Sitting of 5 December 1984

Preamble
The House met at half-past Two o'clock
PRAYERS
[MR. SPEAKER in the Chair]
PRIVATE BUSINESS
  LOCHMADDY AND EAST LOCH TARBERT (IMPROVEMENT OF PIERS ETC.) ORDER CONFIRMATION BILL
  Read the Third time, and passed.
  BRITISH RAILWAYS ORDER CONFIRMATION BILL
  Mr. Secretary Younger presented a Bill to confirm a Provisional Order under section 7 of the Private Legislation Procedure (Scotland) Act 1936, relating to British Railways: And the same was read the First time; and ordered to be considered upon Tuesday 11 December and to be printed. [Bill 18.]
Oral Answers to Questions
  SCOTLAND

    Teacher Training
    Mr. Maclennanasked the Secretary of State for Scotland what proposals he has for increasing in-service training for Scottish teachers.
    The Parliamentary Under-Secretary of State for Scotland (Mr. Allan Stewart): Prime responsibility in this area rests with education authorities. I have made resources available for training related to the standard grade and 16 to 18 action plan developments, and I am offering specific grant-aid towards in-service training in certain other priority areas. I have authorised staffing levels in colleges of education which will enable them to contribute fully to in-service training programmes.
    Mr. Maclennan: Will the Government safeguard academic prospects for the pupils who have already started standard grade courses by substantially improving the conditions of service set down in the post-Houghton review of 1975? Will the Minister include those proposals in the terms of reference of the independent pay review for which he has been asked?
    Mr. Stewart: A specific question on the independent pay review has been tabled. I emphasise that we have set out a full strategy for in-service training with the education authorities to make the best use of the resources of the centrally funded development officers and of training organisations in relation to the 14 to 16 changes and the action plan. I deplore the fact that some teachers have deliberately not taken advantage of the in-service training.
    Mr. Bill Walker: Does my hon. Friend accept that some of the in-service training will be carried out in the schools? Does he agree that thought should be given in the
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    management of the school programme to allowing one day a week or one day a month for training, because that would not be disruptive over a long period and would be manageable? Does he accept that such an arrangement could make a major contribution to solving the problem?
    Mr. Stewart: I note my hon. Friend's comment. My right hon. Friend the Secretary of State announced that he was prepared to allow reductions in the school year of up to 10 days for the preparation of in-service training.
    Mr. Strang: Do the Minister and the Secretary of State not understand that having to train in the evenings and at weekends is only one aspect of a host of factors, such as spending cuts and inadequate remuneration, which have driven teachers to strike today? When will the Government address themselves to the real problems in our schools, or is the strike the beginning of a period of disruption?
    Mr. Stewart: I certainly hope not. Such disruption does the teachers' general standing in the community no good. Expenditure per pupil in Scotland is now at its highest ever real level.
    Mr. Wallace: As the hon. Member for Edinburgh, East (Mr. Strang) said, in-service training is but one aspect of many justifiable grievances of Scottish teachers. Will the Minister guarantee that the standard grade examinations will go ahead as planned for 1986?
    Mr. Stewart: I hope so. We are committed to the standard grade changes. These changes have been widely welcomed in principle by the teaching profession as being in the interests of Scottish education.

    Local Government Expenditure
    Mr. Hendersonasked the Secretary of State for Scotland if he will list the categories of local government expenditure in Scotland which require his prior approval.
    The Parliamentary Under-Secretary of State for Scotland (Mr. Michael Ancram): Local authorities may not incur any liability to meet capital expenses without the consent of my right hon. Friend. As regards current expenditure, local authorities generally speaking do not require the prior approval of my right hon. Friend.
    Mr. Henderson: Is my hon. Friend aware that there is deep resentment among my constituents at the extravagant way in which Fife regional council is throwing about ratepayers' money in support of Arthur Scargill's political strike, ranging from expenditure on Christmas parties to substantial payments and loans to striking miners and their families? Some of that provision is wasteful because, if it were not paid for by Fife regional council, it would be paid for by the DHSS. Is my hon. Friend aware that many of my constituents feel that if those payments are not illegal they should be made so? Is my hon. Friend aware that urgent action is needed to protect the interests of ratepayers?
    Mr. Ancram: My hon. Friend makes a valid point. Obviously, it is up to each authority to satisfy itself that it has the power to make those payments. It is extraordinary that authorities—not just my hon. Friend's authority—which are constantly claiming that they do not have sufficient resources to service the needs of their areas can make that extra expenditure. The ratepayers are being asked to subsidise the failure of responsibility by the NUM.
    Dr. Bray: Is the hon. Gentleman aware that, as the Government directly control capital expenditure, they are responsible for the decay of the infrastructure in Scotland and the rotting away of services for housing, roads, hospitals and schools, which are greatly in need of repair?
    Mr. Ancram: I do not believe that the hon. Gentleman has seen last year's allocations. We take into account the bids made to us by authorities and try to meet them within the available resources.
    Mr. Kirkwood: The hon. Gentleman has confirmed that some categories of revenue require prior Government approval. Will he confirm also that the methods of assessing the needs of local authorities require prior Government approval? When will the Under-Secretary of State introduce the proper client-group approach of assessing local authorities' expenditure?
    Mr. Ancram: The hon. Gentleman should look at the system that exists at the moment, because need is assessed on the basis of the client-group approach. The guidelines are drawn up on the same basis. Increasingly, from year to year, we are making sure that the distribution of rate support grant occurs in accordance with that same system.

    Teachers (Salaries and Conditions)
    Mr. Norman Hoggasked the Secretary of State for Scotland how many representations he has received advocating an independent review of teachers' salaries and conditions of service; and if he will make a statement.
    The Secretary of State for Scotland (Mr. George Younger): I have been asked by the teachers side of the Scottish Joint Negotiating Committee for Teaching Staff in School Education to set up an independent review of teachers salaries. By the end of last week, I had received some 770 representations generally advocating a review, many of which asked for a review of conditions of service as well as salaries. I hope to announce a decision shortly.
    Mr. Hogg: Is the Secretary of State aware that today throughout Scotland teachers are on strike? Is he aware also of the real grievances of teachers and their justifiable case for an independent inquiry? Will he make that decision as a matter of urgency?
    Mr. Younger: However justifiable the teachers' case may be—I have undertaken to consider carefully all the points they have put to me—I honestly do not feel that industrial action does anything but the greatest harm to their case.
    Mr. McQuarrie: My right hon. Friend will be aware that the joint negotiating committee first wrote to him on 14 August 1984 requesting this meeting and that he recently met the committee. I am sure my right hon. Friend accepts that, having gone through the trauma of claims and all the rest of it in the last Parliament, it is essential that he should come quickly to a decision on the question of an unrestricted independent pay review body for the teachers so that both the Government and the teachers are obliged to accept the decisions of that review body.
    Mr. Younger: I note what my hon. Friend says. I have been asked by both sides to take careful account of all the facts that they put to me, and I am certainly doing that.
    Mr. Roy Jenkins: Does the Secretary of State recollect that when my hon. Friend the Member for Ross, Cromarty
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    and Skye (Mr. Kennedy) and I met him five and a half weeks ago to discuss this point he said that he hoped to reach a decision within two weeks? What is causing the delay? Is the right hon. Gentleman less effective in dealing with the dogmas of the Secretary of State for Education and Science than are his own Back Benchers?
    Mr. Younger: There is no dogma involved. It is a purely practical question. It is a major request that requires very careful consideration, and I am giving it that.
    Mr. Canavan: Is the Secretary of State aware that, since the last major independent review by Houghton in 1974, teachers' salaries have fallen behind those of many other categories of people, such as policemen, who can now earn as much as £138 per week more than a teacher? Bearing in mind that the teachers made their demand for an independent review as long ago as August, is it any wonder that they now feel that they have to resort to strike action in protest against this reactionary Philistine Government, who must bear full responsibility for the current crisis in Scottish education?
    Mr. Younger: I do not think that there are any circumstances in which strike action by teachers can ever be justified. The teachers' position would be more credible today if it were not the fact that some teachers started disruptive action even before they had given me a chance to consider their request.
    Sir Hector Monro: Does my right hon. Friend agree, in view of his statement that he will make an early decision on this very important subject, that it is unforgiveable to have strike action now and to prevent children from having education?
    Mr. Younger: I agree with my hon. Friend. The sad thing is that teaching is or should be a highly respected profession, and action of this sort does nothing for the teachers' case.
    Mr. Gourlay: Is the Secretary of State aware that the dog-in-the-manger attitude towards teachers' salaries and conditions has caused many moderate minded people, and even Tory supporters, to go on strike today? Why will he not invest in Scotland's future and help to restore Scotland to its place in the educational vanguard?
    Mr. Younger: I appreciate that many teachers feel very strongly about the issues. It is for those reasons that I am taking great care in considering their request. Teachers would expect me to do that.
    Mr. Donald Stewart: Is the Secretary of State aware that the industrial action is arising from sheer frustration, as the teachers feel that their case is getting nowhere? Therefore, the setting up of an independent review is extremely urgent. As their position and salaries have recently been drastically eroded, does he not think that the teachers have a fair case which should be attended to urgently and sympathetically?
    Mr. Younger: I appreciate that, and that is why I am considering their points very carefully. As I said, the regrettable fact is that the disruptive action started in the summer. If I were the most enthusiastic teacher in the world, I would not feel that such action could advance my case. It has the opposite effect.
    Mr. Lambie: Will the Secretary of State confirm that he is in favour of granting an independent review to

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    Scottish teachers, or will he at least make a substantial lump sum available to teachers for the extra work that has fallen on them? If the answer is that the Treasury will not sanction it, when will the right hon. Gentleman speak up for Scotland and tell the English Treasury to go to hell?
    Mr. Younger: As there is no such body as the English Treasury, I cannot very well ask it to do anything.
    I think that the hon. Gentleman is asking me to preempt the conclusions of the review that I have been asked to consider. I am taking into account everything that the teachers and employers have said to me.
    Mr. Robert Hughes: Does the Secretary of State recall that, exactly 10 years ago today, the House was debating teachers' pay and unrest in Scottish schools? Despite the fact that the then Labour Government had set up the Houghton committee, the right hon. Gentleman and his hon. Friends laid the responsibility for the unrest directly at the Government's door. Therefore, will he now accept his responsibilities, set up a review body and agree to meet its costs?
    Mr. Younger: I accept my full responsibility. I thought I had made that clear. In the interests of each side of the House it might be better not to recall the events of 10 years ago.
    Dr. M. S. Miller: In connection with conditions of service, will the right hon. Gentleman give an undertaking to teachers, who entered a pension scheme with good will many years ago, that when they receive their lump sum gratuity it will not be taxed, and that any such provision will not be retrospective?
    Mr. Younger: Matters of taxation are for my right hon. Friend the Chancellor of the Exchequer.
    Further to the question of the hon. Member for Kirkcaldy (Mr. Gourlay), we have already made provisions to help teachers with an extra work load. We have given them no fewer that 10 extra free days in the year on which to do further preparation for their teaching. We have also allowed for some extra staffing levels this year to help the minority of teachers who will have extra work to do in regard to the new standard grade courses.
    Mr. Willie W. Hamilton: As there is independent review machinery for police salaries, does the right hon. Gentleman think that a teacher is less, or more, important than a policeman?
    Mr. Younger: They are equally important, but I have not had a request from the teachers to set up an independent pay review body.
    Mr. Bruce: Does the Secretary of State not accept that the lack of an independent pay review and the fact that teachers' salaries have already fallen far behind have meant that there has already been a loss of dedicated teachers from the profession, especially science and mathematics teachers? If he does not set up a review, we shall fail to recruit the dedicated teachers whom we need. Does he not recognise that an independent review is long overdue and that he should make an early announcement to that effect?
    Mr. Younger: I appreciate the hon. Gentleman's comment. I would have hoped that most teachers, irrespective of these issues, would have felt that at present teaching is more exciting, innovative and creative than for many years. The finest people in the teaching profession
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    must respond clearly to this extremely challenging job, including the introduction for the first time of an all-graduate profession.
    Mr. Bill Walker: Does my right hon. Friend agree that when teachers behave like industrial trade unionists they should not be surprised if at a future date the Government decide to introduce legislation to ensure that, like industrial trade unionists, they are subject to the Employment Protection Act 1975 and anything else?
    Mr. Younger: I confine myself to saying that teachers are a highly respected professional body, but such bodies do not have their causes advanced by anything like the sort of industrial action that we now appear to be seeing.
    Mr. Dewar: Does not the Secretary of State not recognise that there has been an almost complete absence of support from Conservative Members because there is a widespread realisation that teachers have fallen behind comparable groups in society? Would the right hon. Gentleman think himself a member of a respected profession if he were earning between £8,000 and £9,000 a year as an experienced secondary school teacher doing a stressful and difficult job and coping with new curricula developments? If he wants to avoid industrial action and discontent boiling over in our schools during the coming months, does not he accept that he must make a prompt and sensible decision in favour of an independent pay review?
    Mr. Younger: There is not much in what the hon. Gentleman says with which I can disagree. I have made it clear all afternoon that I am carefully considering all the points put to me, and I shall try my best to make a response to the teachers. However, the hon. Gentleman must have been half asleep, because many of my hon. Friends have warmly supported me.

    Student Awards
    Mr. Steelasked the Secretary of State for Scotland how much money he expects to save by the cut in the level of student grant; and how many Scottish students will be affected.
    Mr. Younger: My right hon. Friend the Secretary of State for Education and Science will be making a further statement today.
    Mr. Steel: Does the Secretary of State not recognise that there has been a public outcry about recent announcements because they have come on top of a steady erosion in the value of student grants since the Government took office? Does he appreciate that a 14 per cent. increase will be necessary this year to restore the grant to its level at the time when the right hon. Gentleman took office? If there is further damage to the parental contribution, will that not militate against recruitment in the Scottish universities, because of the four-year honours degree compared with the three-year standard in England?
    Mr. Younger: I appreciate the right hon. Gentleman's latter point. However, as he has noticed, in the past year I have made alterations to the Scottish system of student grants to recognise the fact that the travel pattern of Scottish students is different from that south of the border. That was widely welcomed.
    Mr. Malone: Will my hon. Friend also bear in mind that Scotland is additionally affected because first-year

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    intake is often at the age of 17 and covenanting schemes are not available, thereby putting us in a very different position from our English equivalents?
    Mr. Younger: My hon. Friend is absolutely right. I appreciate his point, but he will no doubt take that question up with my right hon. Friend the Chancellor.
    Mr. Tom Clarke: Does the Secretary of State accept that these problems are taken as seriously by Scottish students and their parents as they are by English Conservative Members of Parliament? How does he relate education to industry, and are not Government policies giving students a signal that for most of them jobs will simply not be available?
    Mr. Younger: I do not think that this issue, important though it is, is directly related to industry or to jobs for students. This is a question of how to finance university education. As I have said, my right hon. Friend the Secretary of State for Education and Science will be making a statement later today.
    Mr. Wilson: I look forward to the recantation from the Secretary of State for Education and Science, but will the Secretary of State explain why he made a statement on grant cuts several days after the statement made by his right hon. Friend, and why on major aspects of grants he appears to be a copycat Minister and rarely to give the lead?
    Mr. Younger: On the contrary, I should have thought that the hon. Gentleman, who is supposed to be a specialist in Scottish affairs, would know that public expenditure calculations for Scotland take place at different times from those for England because we must work in line with the formula on which our block grant is worked out. The system is highly favourable to us, and I should have thought that the hon. Gentleman would know about it.
    Lord James Douglas-Hamilton: Will my right hon. Friend ensure that the fact that the majority of Scottish students at universities take a four-year degree course will be fully borne in mind and taken into account?
    Mr. Younger: Yes, I can confirm that.
    Mr. Ewing: Is it not a spineless approach for the Secretary of State to hide behind the Secretary of State for Education and Science? As the hon. Member for Dundee, East (Mr. Wilson) said, the Secretary of state issued a statement after he caught the night sleeper north, which meant that he was not subject to questions in the House. Why does he not tell his Scottish colleagues what arrangements he has made, and answer the question of the right hon. Member for Tweeddale, Ettrick and Lauderdale (Mr. Steel)? What arrangements has the Secretary of State made to tell us what will happen to student grants in Scotland after the Secretary of State for Education and Science has made his statement this afternoon?
    Mr. Younger: The hon. Gentleman has been reading too many whodunnits. It would generally be for the convenience of the House if one of the Ministers involved made a clear statement about what the position will be. When my right hon. Friend makes his statement, he will make it on behalf of all Education Ministers.

    Salmon Fishing
    Mr. Leighasked the Secretary of State for Scotland if he will make a statement about the salmon fishing industry in Scotland.
    The Parliamentary Under-Secretary of State for Scotland (Mr. John MacKay): There was a modest improvement in catches in 1983 in comparison with 1982, but I share the concern of the salmon interests in Scotland that catches in the 1980s have been poor in comparison with the previous three decades and that spring running fish have been particularly scarce.
    Mr. Leigh: Will my hon. Friend take this opportunity to pay tribute to the immense contribution made to the Scottish economy by anglers on the salmon leaps, including English anglers? Will he confirm that this contribution is being put under increasing strain by overfishing on the spawning grounds of Greenland, commercial netting at the mouths of rivers and poaching? What urgent steps will the Government take to deal with those problems by way of increased pressure on our Community partners, pressure on the local authorities involved and by introducing tagging?
    Mr. MacKay: My hon. Friend is right to draw the House's attention to the important part that salmon angling plays in the rural economy of many parts of Scotland. The Government are well aware of that and are worried about the decline in stocks. As my hon. Friend knows, we are considering seriously proposals put to us about tagging. We have come to agreements with Greenland about reducing the tonnage which it takes. Indeed, I noticed a recent press report that Greenland has not found the salmon to make up this year's tonnage for its fishing industry.
    Mr. Mason: Will the Minister inform the House what progress is being made on the legislation, which we expect, on the salmon-tagging scheme, which is designed to cut salmon poaching? It has been under review for nearly two years. Has not consultation gone on for too long? Is he aware that the House is growing impatient with the lackadaisical approach of the Scottish Office, as distinct from the Ministry of Agriculture, Fisheries and Food, which wants to get on with the matter?
    Mr. MacKay: I do not accept that the Scottish Office has been lackadaisical in this matter. My noble Friend the Minister of State and officials in his Department have had discussions with various interested organisations. It is clear that although there is considerable support for tagging, there is also considerable hostility to it. I hope that it will be possible to reach conclusions on this matter in the near future.
    Mr. Corrie: Is my hon. Friend aware that there is tremendous opposition to tagging of any sort among Scottish fish farmers? Does he accept that this will simply lead to legalised poaching? Might not it be far better to have a scheme of licensing game dealers to sell salmon, so that all the fish passes through them, just as game does now?
    Mr. MacKay: My hon. Friend has made a valid point about licensed salmon dealers. My right hon. and noble Friend and I are well aware of the objections to tagging felt

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    by the Scottish National Fanners Union and by the very important salmon farming industry in Scotland. Of course, their objections have to be taken into account.
    Mr. Johnston: Is the Minister aware that the sale of salmon fisheries, such as those in the river Conon, by the North of Scotland Hydroelectric Board, means that the opportunities for local people to fish are being drastically reduced? Does he not feel that their opportunity to fish for salmon in Scotland is something in which he should be interested?
    Mr. MacKay: There are very adequate facilities for local people to fish in Scotland. Many of them would find the situation much better if only there were more salmon. The hon. Gentleman mentioned the river Conon, but that is a matter for the hydroelectric board and I suggest that he takes up the matter with the board's chairman.
    Sir Hector Monro: Will my hon. Friend introduce legislation at an early date to help the district fishery boards? What steps is he taking to put pressure on Ministry of Agriculture, Fisheries and Food to prevent drift netting off the English coast?
    Mr. MacKay: I cannot predict the timing or precise content of any Bill, but, apart from the possibility of salmon sales control, we are considering how to strengthen the local administrative structure of the salmon fishery boards in Scotland. My hon. Friend will know that the drift netting to which he referred is a matter for my right hon. Friend the Minister of Agriculture, Fisheries and Food.
    Mr. Soames: Does my hon. Friend really accept the great importance of this asset to Scotland? If so, does he agree that the Government's prevarication on this issue, and on many others affecting the salmon, does them no credit?
    Mr. MacKay: I know my hon. Friend's deep interest in this subject, and we have all heard about his success in recent weeks. The Government are not prevaricating. We are well aware of the serious position and of the importance of the salmon fishing industry to rural Scotland. We are concerned to ensure that any proposals we bring to the House are correct.

    European Regional Development Fund
    Mr. Knoxasked the Secretary of State for Scotland what is the total value of grants made towards projects in Scotland by the European regional development fund since its inception in 1975.
    Mr. Allan Stewart: Total commitments and allocations for Scotland are £385 million.
    Mr. Knox: Is my hon. Friend satisfied that the people of Scotland are aware of the scale of those grants and of their significance to the progress of the Scottish economy?
    Mr. Stewart: I certainly hope that the people of Scotland are aware of the considerable importance of European regional development fund assistance. There was a recent and important announcement with regard to non-quota funds. The types of Scottish projects that benefit are roads, bridges, sewerage systems and industrial site services. Some Scottish Members may be interested to know that, following our discussions with the European Commission, we expect it to announce soon that it is prepared to add ferry vessels to that list.
    Mr. Allen Adams: I wish to raise a more parochial matter. Given the substantial sum that the Minister has mentioned, will he use the little ability that he obviously has to make sure that some of the money is used in our area to ensure that Renfrew district council can proceed with the building of its leisure centre, which it has been talking about for 10 or 15 years? I am sure he will agree that it might go to his credit if he could at least build public baths.
    Mr. Stewart: I am aware of the importance that the hon. Gentleman attaches to the Paisley leisure centre, which is near my constituency. In my constituency we already have those facilities at Barrhead. The matter is in the hands of the European Commission. Our application was made seven months ago and we presented what the Scottish Office believed to be a good case for European regional development fund assistance. The Commission is not yet convinced of the contribution that the project will make to tourism, but we are pressing it to give the project favourable treatment next year.

    Regional Policy
    Mr. Ewingasked the Secretary of State for Scotland if he will make a statement on the anticipated effect of the Government's regional assistance policy on the Scottish economy.
    Mr. Younger: The measures announced on 28 November maintain a strong regional policy in Scotland and extended regional development grants to service industries for the first time.
    Mr. Ewing: I should like to ask the Secretary of State about the economy of the central region. Does he realise that three of the areas in Scotland granted special development area status have unemployment rates below that of Falkirk, and that five of them have unemployment rates below that of Alloa? Why has the Secretary of State totally ignored the representations both of Central regional council and Falkirk district council about the need for development area status for the Falkirk area? Will the right hon. Gentleman consider meeting the local authorities, or at any rate the Labour Member of Parliament, to discuss the seriously deteriorating situation in the Central region?
    Mr. Younger: I appreciate the hon. Gentleman's concern. I shall be glad to see any hon. Member who wishes to see me about any such matter. It is not a straight matter of slotting an area into a category on the ground of the unemployment level. We also take into account other factors such as the industrial structure in the area. I fully appreciate the hon. Gentleman's concern about the central area—a considerable part of which is still an assisted area—but I still believe that the best way to look at the matter is in the broadest sense, taking into account other factors as well as unemployment.
    Mr. Corrie: Is my right hon. Friend aware that 200 steel workers in my constituency are under threat of redundancy? Will he assure us that the area will be given any aid that can be given under the scheme, to try to alleviate unemployment?
    Mr. Younger: I was glad to see the deputation from the area that my hon. Friend brought to see me, and I am considering very carefully everything that the members of the deputation said to me. The decision is one for the general management of the British Steel Corporation, and

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    rightly so, but I am glad that, under the regional changes, the area will be in the top tier for regional policy assistance.
    Mr. Home Robertson: Some areas of very high unemployment in Scotland are located in places that are no longer assisted areas, and which—as in the case of my own constituency—may not have been assisted areas for some time. What hope is there for development and job creation in such areas?
    Mr. Younger: Any properly planned regional policy is bound to concentrate on the very worst areas. Under all Governments, small pockets of high unemployment can occur in areas where the general level of unemployment is not very high. I can assure the hon. Gentleman that there are still powers available to the Scottish Development Agency, and other powers, that can be used even for areas that are not assisted. No doubt those powers could be used in appropriate cases.

    Coal Industry Dispute
    Mr. Ron Brownasked the Secretary of State for Scotland what he estimates has been the cost to date to the Scottish economy of the mining dispute.
    Mr. Allan Stewart: The loss of coal output directly reduced industrial production by some 2·5 per cent. in the second quarter of this year. The recovery in manufacturing output is continuing. The main effect of the strike has been the hardship suffered by the families of striking miners.
    Mr. Brown: Will the Minister face facts? The Government are responsible for the crisis. It is obvious that the miners are standing firm and will not be defeated, and so something must be done to resolve the crisis by bringing both sides together. What, if anything, do the Government intend to do?
    Mr. Allan Stewart: The people who should be facing facts are Mr. Arthur Scargill and his colleagues in the National Union of Mineworkers, and the fact that they should face is that there is a perfectly reasonable basis for setlement in the terms put to, and agreed by, NACODS.
    Mr. Henderson: Does my hon. Friend agree that one of the most unnecessary costs of the mining dispute has been incurred by local authorities which insist on dishing out ratepayers' money to support the operation? That has affected not only ratepayers in the domestic sector, but businesses as well, and there is bound to be a knock-on effect on jobs.
    Mr. Allan Stewart: I entirely agree with my hon. Friend. I know of the anger that that action has caused among ratepayers, especially in my hon. Friend's area. It is indeed surprising that councils which constantly claim that they are tight on resources should apparently be so flush with funds for such purposes.
    Mr. Eadie: If the hon. Gentleman will return to the original question about the effect of the strike on the Scottish economy and its cost, he must concede that the cost has been enormous. Will he note that the way to resolve the problem is to get back to the negotiating table to achieve a negotiated settlement? Is he aware that, since the Conservatives have been in Government, there has been less investment in the mining industry in Scotland?
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    Is he further aware that there was less investment in the industry in Scotland in 1983–84 than there was in 1979, when Labour was in power?
    Mr. Allan Stewart: The Government have an outstanding record on investment in the coal industry. We have invested £2 million a day in it.
    Mr. Eadie: Not in Scotland.
    Mr. Allan Stewart: As to the adverse industrial consequences of the strike, there have been reduced purchases of mining machinery, and loss of income has hit suppliers of goods and services to the mining community. However, the recovery in manufacturing output in Scotland is continuing—it was up 5 per cent. in the first half of 1984. Scotland is in favourable circumstances with regard to electricity supply because, as the hon. Gentleman will be aware, the electricity boards have alternative sources of supply.
    Mr. Maxton: As the Minister is so anxious to bring the strike to an end, why does he not advise the Cabinet to instruct the National Coal Board to go back to the negotiating table and start negotiating on the true facts about the viability of pits instead of the nonsense that it has talked so far? Is he aware of the report that I have in my hand, and which is marked "Confidential"? In it, five leading accountants, including two professors of accountancy, show quite clearly that the facts and figures that the NCB has used so far are utter nonsense? Will he go back to the negotiating table on that basis? [Interruption.]
    Mr. Allan Stewart: It is Mr. Scargill who has said that he has not budged an inch. The NCB has proposed a basis for settlement, which has been accepted by NACODS. Perhaps I might tell the hon. Gentleman and others who are cheering what he said that 2,267 miners are working in Scotland today. My right hon. and hon. Friends commend them for going back to work and their bravery in the face of intimidation. I know that Opposition Members regard them as scabs. That is the difference between us. We are the party of the workers, they are the party of the strikers.
    Mr. Campbell-Savours: On a point of order, Mr. Speaker.
    Mr. Speaker: Order. I shall take the point of order afterwards.
    Mr. Andy Stewart: Does my hon. Friend agree that the Scottish economy would have been worse affected if the Nottinghamshire miners had not continued to work?
    Mr. Allan Stewart: My hon. Friend is absolutely right. It is a pity that miners in Scotland did not get the opportunity to ballot, as did Nottinghamshire miners, as they would have been at work as well if they had had the chance.
    Mr. Douglas: Will the Minister restrain his hon. Friend the Member for Fife, North-East (Mr. Henderson) and concur with the convenor of Fife regional council in that, first, nothing that the regional council has done in support of the miners has broken the law and, secondly, that he is perfectly right to say that, "nae wain in my region will have a hungry belly."? Do Conservative Members intend to win the strike on the basis of hungry bairns' bellies? As we are approaching the season of good will, will the

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    Government show good will and get the Secretary of State for Energy to call the parties to the negotiating table to achieve an honourable settlement to the dispute, or do they intend to win by attrition?
    Mr. Allan Stewart: My hon. Friend the Member for Fife, North-East (Mr. Henderson) did not say that the action of the regional council was illegal. He said that he deplored it, as I do. As for the emotive language used by the hon. Member for Dunfermline, West (Mr. Douglas), I believe that the striking miners have a responsibility to take into account the interests of their families and to go back to work. Their jobs are there for them.
    Mr. Hugh Brown: I am glad that the Leader of the House is in his place as I wish him to repeat what I believe he said yesterday, although it is not in Hansard, when he urged the NUM to return to the negotiating table. If that is indeed the Government's position, will the hon. Gentleman instruct the NCB to be a bit more conciliatory?
    Mr. Allan Stewart: What I said, and am happy to repeat, is that in my view there is a perfectly reasonable basis for a settlement on the terms already accepted by NACODS. I am sure that if a ballot were put to members of the NUM as a whole on that proposition it would be accepted.
    Mr. Malone: If my hon. Friend reads the report to which the hon. Member for Glasgow, Cathcart (Mr. Maxton) referred, will he bear in mind that it was prepared by academics with little experience of the mining industry and that it was immediately ripped apart on breakfast television by a leading practical expert?
    Mr. Allan Stewart: I am grateful to my hon. Friend. As a former academic myself, I often take with a pinch of salt documents produced by academics.
    Mr. Dewar: Does the Minister accept that his synthetic rage in the past few minutes had made hint a somewhat ludicrous figure, like some demented Paddington Bear dancing at the Dispatch Box? Will he accept that the Opposition give the strongest possible support to local authorities in Scotland, which have shown concern and compassion for the real hardship being endured in their areas, and that we would welcome a gleam of humanity on this issue from Ministers of the Crown in Scotland?
    Whatever the record for the United Kingdom, will the hon. Gentleman admit that investment in the Scottish coalfields has declined since 1979 and that that is one of the major problems? Will he give a categorical assurance that, to the best of his and the Government's knowledge, there is no plan to close pits and reduce the work force on the lines forecast on fairly compelling evidence by the STUC and other bodies in Scotland?
    Mr. Allan Stewart: I am not prepared to comment on the status of documents which the NUM or STUC claims to possess. That is a matter for the National Coal Board. We all saw the hon. Member for Glasgow, Garscadden (Mr. Dewar) on television, giving support to Mr. Arthur Scargill in the Usher hall. He is now clutching at straws to hide the extreme embarrassment felt by him and some of his colleagues at the conduct of the National Union of Mineworkers.

    Aid to Industry
    Mr. Millanasked the Secretary of State for Scotland if he will make a statement on his Department's aid to industry.
    Mr. Younger: As announced by my right hon. Friend the Prime Minister on 28 November, responsibility for the administration of regional development grant in Scotland is being transferred from the Department of Trade and Industry to the Scottish Office. My Department's funding of both the Scottish Development Agency and the Highlands and Islands Development Board is being maintained at very high levels.
    Mr. Millan: Is the Secretary of State aware that, even with the present disgracefully high levels of unemployment in Scotland, there are still shortages of skilled labour? That being so, does he agree that it is scandalous that there should be proposals to close skillcentres, including one in my constituency? As he is one of the Ministers directly responsible for the Manpower Services Commission, will he ensure that those proposals—the case for them is argued on the flimsiest grounds, as I have seen from the paper that is to go to the MSC on 13 December—are withdrawn and the skillcentres allowed to get on with the job which they are so well equipped to do?
    Mr. Younger: I appreciate what the right hon. Gentleman says about the centre in his constituency, and I agree that those who work in these skillcentres are dedicated people, who have done good work for a long time. However, if the right hon. Gentleman carefully studies the papers that he has been given he will find that the amount and the quality of the training that is to be done is not being reduced, but increased. All that we are trying to do is to get the premises and buildings put into line with modern training conditions, and this is long overdue.
    Mr. James Hamilton: Will the right hon. Gentleman recognise that the Government's policies on trade and industry are doing nothing for the people in Lanarkshire? Is he aware that in my constituency there were 32 liquidations last week? Is he also aware that in my constituency a skillcentre is closing in Bellshill? Bearing in mind that over 20 per cent. of our people are unemployed, is it not time that the Government took their finger out and did something about the unemployed and about helping to train unskilled people?
    Mr. Younger: I think that it is an annexe of the skillcentre that is due for closure in the hon. Gentleman's constituency. The amount and the quality of training have increased. We are merely trying to get the type of premises brought up to date. As to regional support in general, the hon. Gentleman will know that Lanarkshire has had many important new developments, and he has warmly welcomed some of them in the House.

  SOLICITOR-GENERAL FOR SCOTLAND

    Seat Belts
    Mr. Maxtonasked the Solicitor-General for Scotland how many people have been prosecuted in Scotland for not wearing seat belts.
    The Solicitor-General for Scotland (Mr. Peter Fraser): The number of persons proceeded against in 1983 when the seat belt charge was the main offence was 275. The provisional figure for the first half of 1984 is 93.
    Mr. Maxton: In view of the very encouraging results in terms of prevention of injury following the seat belt legislation — I myself escaped minor injury in a car accident last week by wearing a seat belt—may I ask the Minister to consult his colleagues in the Department of Transport and urge them to support legislation to make it compulsory for car manufacturers to fit rear seat belts as a first step towards making the wearing of them compulsory in back seats as well?
    The Solicitor-General for Scotland: It is clear that the use of seat belts since the introduction of the legislation has been successful. My hon. Friend the Minister of State, Department of Transport has already said that she will announce the Government's intentions about making rear seat belts compulsory in the light of the Select Committee on Transport report on road safety.
    Mr. Malone: Were a substantial number of the people stopped for not wearing seat belts not prosecuted? In view of the success of the policy of wearing seat belts, will my hon. and learned Friends undertake a policy of prosecuting as often as is necessary?
    The Solicitor-General for Scotland: The figures that I gave do not show the number of offences that were recorded by the police. In the first half of this year, over 1,100 were recorded by the police. However, I make it clear that the figure I have given is of those cases where there was a main offence and prosecution for the offence. My hon. Friend will appreciate that, it is also within the power of fiscals to issue warning letters and to take advantage of the fiscal fine system. A number of people have been dealt with in that manner.

    Homelocators Ltd.
    Mr. McTaggartasked the Solicitor-General for Scotland if he will institute proceedings against Homelocators Ltd. of Glasgow for offences under the Accommodation Agencies Act 1953; and if he will make a statement.
    The Solicitor-General for Scotland: No report has been received by me or the procurator fiscal at Glasgow in respect of any contravention by Homelocators Ltd. of Glasgow under the Accommodation Agencies Act 1953, but, following the tabling of this question, I have now instructed the procurator fiscal at Glasgow to make inquiries.
    Mr. McTaggart: I am grateful to the Solicitor-General for that answer, and I recognise that he is trying to be helpful in this matter. Does he agree that even if this firm is found not to have been breaking laws, it is certainly guilty of circumventing them, and in the process has caused hardship to many students who are already under tremendous pressure? Can the hon. and learned Gentleman give the House an assurance that, if necessary, he will bring forward changes to the relevant Act to make sure that these practices cease as soon as possible?
    The Solicitor-General for Scotland: I am grateful to the hon. Gentleman for what he has said. It would be premature now to say whether there has been a breach of
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    the Act to which the hon. Gentleman has referred or whether there is a loophole in the law that is being exploited. If inquiries reveal that an offence has been committed, we shall give careful consideration to prosecution. Alternatively, if there appears to be a loophole, that will be made clear.

    Coal Industry Dispute
    Mr. Strangasked the Solicitor-General for Scotland how many people charged with offences arising out of the dispute in the mining industry have been refused bail.
    The Solicitor-General for Scotland: As at 3 December 1984, 18 persons had been remanded in custody after appearing in court charged with offences arising out of the mining dispute. Of the 18 persons, two were subsequently released on appeal and one immediately changed his plea to that of guilty.
    Mr. Strang: Will the Solicitor-General for Scotland recognise that these are honest men who have never been in trouble with the law in their lives, including the chairman of the Lothian central strike committee, Mr. David Hamilton, who is one of the constituents of my hon. Friend the Member for Midlothian (Mr. Eadie)? Mr. Hamilton has languished in Saughton prison for six weeks. Does the hon. and learned Gentleman not understand the damage that is being done by using the apparatus of the state to defeat the National Union of Mineworkers? When will he understand that it is outrageous that these men are being penalised? When will the Government face the fact that long-term damage has been done to the police force in Scotland in many communities because of the use to which it has been put in the miners' dispute?
    The Solicitor-General for Scotland: I have already said that 18 persons have been remanded in custody. There is a clear bail procedure and a clear opportunity to take advantage of an appeal if those concerned feel that bail should have been granted to them. Such appeals have been successful in a number of cases. The hon. Gentleman mentioned a particular case and he knows that as it is to come before the courts in the next fortnight I cannot comment on it in any detail. However, he will be aware that the man to whom he has referred is charged with a serious assault. He took the matter of his bail to the appeal court and his application was refused.
    Mr. Speaker: Order. I should have said before that the House must be careful about mentioning individual cases, especially those which are before the courts, and should bear in mind the sub judice rule.
    Mr. Gordon Brown: Will the Solicitor-General for Scotland at least agree to minimise hardship among mining families, although his colleagues seem determined to maximise it? Will he explain to the House why at least 100 miners have been refused legal aid by the Dunfermline sheriff court?
    The Solicitor-General for Scotland: The granting of legal aid in Scotland is a matter for individual sheriffs. The hon. Gentleman will be aware that the test that is required to be applied by the courts in those circumstances is that of the interests of justice. It is on that basis only that legal aid is granted or refused. The hon. Gentleman will appreciate that the prosecutor in Scotland is independent.

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    Nevertheless, he makes no intervention when an individual makes an application before the courts, whether it arises from the miners' strike or otherwise, for legal aid.
    Mr. Dewar: Will the hon. and learned Gentleman accept that in a letter to me of 13 November from his right hon. Friend the Secretary of State it was conceded that there were significant variations in the approach of individual sheriff courts to the granting of legal aid? These variations have been highlighted in a discreditable fashion by experience with picket-line offences. The hon. and learned Gentleman will be aware that a review of legal aid is being conducted. Will he give a guarantee or undertaking that the granting of legal aid will be considered in that review and that the results of it will be made known to the House?
    The Solicitor-General for Scotland: The hon. Gentleman appreciates that the administration of the legal aid system is a matter for my right hon. Friend the Secretary of State and not for me. However, it is a fact that there have been discrepancies in the way in which legal aid has been applied by the courts in Scotland. The hon. Gentleman will readily appreciate from his professional experience that discrepancies existed long before the miners' strike first emerged. I understand that my right hon. Friend is considering the matter as one of the issues to be included in an overall review of legal aid in Scotland.

    Salmon Poaching
    Sir Hector Monroasked the Solicitor-General for Scotland how many prosecutions have taken place in the latest available year for salmon poaching in the sea and fresh water, respectively.
    The Solicitor-General for Scotland: In the period from 1 December 1983 to 1 December 1984 there were 38 and 321 prosecutions for salmon poaching in the sea and fresh water respectively.
    Sir Hector Monro: Will my hon. Friend take every opportunity, now that we have an aircraft to add to the fishery protection vessels, to ensure that as many poachers as possible on the high seas are brought to book?
    The Solicitor-General for Scotland: Yes. I understand that "Younger's tartan air force" has already had considerable success in using aerial photography to catch those who have been engaged in illegal poaching for salmon at sea. Given that success, it is anticipated that we can look forward to further prosecutions in the Scottish courts.

    Diversion Scheme
    Mr. McKelveyasked the Solicitor-General for Scotland if he is satisfied with the progress of the diversion scheme.
    The Solicitor-General for Scotland: Yes, Sir. The scheme is still in its early days but continues to make steady and satisfactory progress.
    Mr. McKelvey: Is the Minister aware that I support the scheme? Does he not share my concern that in Ayrshire recently there were a couple of diversions involving cases of husbands of battered wives. Does the Minister agree that cases of serious assault are not proper to be used in a diversion scheme?
    The Solicitor-General for Scotland: Clearly, we want to expand the diversion scheme. I believe that the hon. Gentleman supports what is being done. Obviously there are also cases where it is not appropriate to take advantage of that alternative to prosecution. I do not know of the particular cases to which the hon. Gentleman has referred. If he feels that there have been cases of serious assault, I shall be grateful if he will let me know. It is certainly not intended that the diversion scheme should be used to deal with serious assaults, which should very much more properly come before the ordinary courts.

Points of Order
3.30 pm
Mr. D. N. Campbell-Savours: On a point of order, Mr. Speaker, arising out of questions. My point of order relates to the rights of hon. Members and to the confidentiality of the document referred to by my hon. Friend the Member for Glasgow, Cathcart (Mr. Maxton) in his supplementary to question No. 8. I have a copy of a document entitled "NCB Accounts—a Mine of Misinformation". The document is available in two forms. One is marked "Confidential" in red. The other is not marked at all. The document marked "Confidential" in red was given to me by a member of the Select Committee on Energy. Discretion as to whether that document is designated as a confidential document is in the hands of the Chairman of the Select Committee on Energy. It is within his discretion. In the event of his attaching the designation "Confidential", it means that the document becomes privileged. If the document is privileged, it is subject to the rules as set out in "Erskine May" on pages 153 and 154 where it says that until a Committee has reported to the House it is a breach of privilege for disclosure to be made of anything that took place during the Committee's private meetings, or for any of its papers to be made public.
My point of order is in two parts. Has the Chairman of the Committee abused his position by seeking to designate a document as confidential when it has already been made available to Members of this House and has already been made the subject of a BBC "Newsnight" programme in the middle of last week? This document has already been made public. Could it possibly be said that in designating the document as confidential the Chairman was intending to shackle the members of that Committee and prevent them from commenting publicly upon the contents of the document? Furthermore, in order to finalise my point of order, was my hon. Friend the Member for Rother Valley (Mr. Barron) placed inadvertently in contempt of this House? Was the hon. Member for Aberdeen, South (Mr. Malone), who rose today to refer specifically to that document and who is a member of that Select Committee, inadvertently or deliberately placed in contempt of this House?
Mr. Ian Lloyd: Further to that point of order, Mr. Speaker. The hon. Member for Workington (Mr. Campbell-Savours) did not give me notice that he intended to raise this matter. However, I have to inform the House that, as far as I am aware, no member of my Committee has with my knowledge made this document available. When it was received by the Committee it was marked "Confidential". The Committee was requested to treat it as such. As far as I am aware, we are under an obligation so to do.
Mr. Speaker: Order. We have a heavy day and I can dispose of the matter simply, because the hon. Member for Workington (Mr. Campbell-Savours) kindly gave me notice that he was going to raise the matter and I have had an opportunity to look into it. I have made inquiries about the document and I am satisfied that it may be referred to. Indeed, it has been referred to in the House before by the hon. Member for Bolsover (Mr. Skinner) on 29 November. An hon. Member must not refer to unreported evidence of a Select Committee, but if a paper has already
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been circulated to other persons before the Committee sends for it, clearly reference can be made to it in the House or anywhere else.
Mr. Kevin Barron: Further to that point of order, Mr. Speaker. I am very concerned about the position. I had hold of that document as a Member of the House last Thursday and I used it on three occasions at public meetings over the weekend. I came to the House on Monday evening to open correspondence from the Clerk to the Select Committee and in it was a copy of the document that I had used on public platforms marked "Confidential". It was I who handed it to my hon. Friend the Member for Workington (Mr. Campbell-Savours).
I have written to you today, Mr. Speaker to ask whether my actions over the past six days have indeed been a contempt of the House and I look forward to receiving your reply.
Mr. Dennis Skinner rose—
Mr. Speaker: Order. I have already referred in a kindly fashion to the hon. Member for Bolsover. I do not think that any point of order can arise.
Mr. Skinner: Further to that point of order, Mr. Speaker.
Mr. Speaker: Order. Let me dispose of the point of order. I do not think that the hon. Member for Rother Valley (Mr. Barron) has done anything wrong. I have nothing further to add to what I have already said to the hon. Member for Workington. As I understand it from the Chairman of the Select Committee, and as the House heard, when he received the document it was marked "Confidential".
Mr. Skinner: On a further point of order, Mr. Speaker. As you, Mr. Speaker, will look seriously into what my hon. Friend the Member for Workington (Mr. Campbell-Savours) had to say, and taking into account the admission of my hon. Friend the Member for Rother Valley (Mr. Barron), it is important that you understand that for many years the Coal Board has been twisting the accounts when it presented reports—
Mr. Speaker: Order. The hon. Gentleman is not on a point of order. He is abusing his point of order to make a political point which is not a matter for me.
Mr. Skinner rose—
Mr. Don Dixon: On a point of order, Mr. Speaker. Yesterday, during the Second Reading of the Local Government Bill, I was fortunate enough to catch your eye at 25 seconds to 10 o'clock. I intended to point out to the House how the Bill would deny millions of citizens the democratic right of electing their local representatives. I have no doubt but that the House would have welcomed that after listening to 30 minutes of boring diatribe from the Minister. However, at 15 seconds to 10 o'clock the Treasurer of Her Majesty's Household moved that the Question be put, and, rightly, you put the Question. I rushed to the House this morning to read my 20-second speech and I found that it was not in Hansard. Can you put this right, please?
Mr. Speaker: Hansard heard it, I am sure.
Mr. Skinner rose—
Mr. Speaker: Order. I will not take a further point of order from the hon. Member for Bolsover.
Mr. Ron Brown: You will remember, Mr. Speaker, that I asked a supplementary question to question No. 8. May I apologise to you and to the Leader of the House for misleading the House. The right hon. Gentleman replied to three questions on the mining dispute yesterday, and, unfortunately, I had read only two of them.
Mr. Skinner: On a further point of order, Mr. Speaker.
Mr. Speaker: I will take the point of order if it is entirely different and legitimate, but in fairness to his colleagues in the House, the hon. Gentleman should not take up time with spurious points of order on a day when we have a heavy programme before us.
Mr. Skinner: On a point of order, Mr. Speaker. One of the difficulties that hon. Members experience in relation to nationalised industries and documents of this kind is that we are allowed to ask questions only of a general nature. We are not allowed to ask questions about the day-to-day administration of any nationalised industry. That has been laid down. In your capacity as Speaker, you will know that there is a severe limit upon the areas about which we can ask questions.
Because of that I raise this legitimate point of order. Lots of information has been given to the Coal Board upon which Ministers have commented at the Dispatch Box, throughout the dispute and before. An important Select Committee was given figures by the Coal Board that have been proved to be false. They were also given to the House. If we are to be allowed only to raise matters of a general nature in relation to the National Coal Board as a nationalised industry and not about the day-to-day administrative figures we should have more reliable evidence.
It is pretty clear from the confidential document that the Chairman of the Select Committee has that, if we are not careful—this is what I ask you to rule upon—we shall be given Coal Board accounts in a twisted form delivered by people from the NCB who are bent and the House will be misinformed. We want to make sure that—
Mr. Speaker: Order. The hon. Gentleman was not here during Scottish questions.
Mr. Skinner: I was.
Mr. Speaker: Then the hon. Gentleman was not listening. This matter was extensively discussed during Scottish questions and it was suggested that there were two views on the report.

European Council (Dublin)
3.42 pm
The Prime Minister (Mrs. Margaret Thatcher): With permission, Mr. Speaker, I should like to make a statement on the results of the European Council held in Dublin on 3–4 December. I was accompanied at this meeting by my right hon. and learned Friend the Secretary of State for Foreign and Commonwealth Affairs. The conclusions of the Council have been placed in the Library of the House.
The Council covered four main subjects. First, we examined the economic situation in the Community on which the Commission had submitted a detailed report. In particular, we discussed the creation of more jobs by opening up the internal Community market for all goods, services and professions; by defining European standards for products; and by improving the Community's performance in advanced industrial technology. This has to be achieved in the context of—
"moderation in the evolution of real wages"
and
"a pause in the growth of current public expenditure and a decline for several years in its share of gross domestic product".
The Council agreed to set up a review of manpower policy with the aim of directing training to sectors where labour will be needed, of encouraging job mobility and of fostering enterprise, especially among young people.
Secondly, the European Council reached agreement on the Community's position in the enlargement negotiations with Spain and Portugal. Two major issues had been outstanding — wine and fisheries. Both were satisfactorily settled. Unfortunately, Greece reserved her position on enlargement, linking it with a bid for more money for Mediterranean programmes. However, the enlargement negotiations will now go ahead on the outstanding issues and, we hope, be brought to an early conclusion, with a view to accession on 1 January 1986. The outcome will have to be referred back to the Council of Ministers, especially in view of the position adopted by Greece.
Thirdly, we gave particular attention to further measures to relieve famine in African countries, particularly in Ethiopia. We agreed that the Community and its member states should provide 1·2 million tonnes of grain in 1985. This is a really major effort which the United Kingdom strongly supports. We appealed to other donor countries to match this effort.
Fourthly, we had a preliminary exchange on reports from two groups established after the Fontainebleau meeting. These groups are dealing with Community institutions and with practical measures such as easier movement of goods and frontier formalities. The final reports will be substantively discussed at the European Council in the first half of next year.
The European Council also urged the Environment Ministers to reach agreement at their meeting tomorrow on guidelines for the reduction of lead in petrol—a British initiative within the Community — and on vehicle emissions.
Within the context of political co-operation, the Council endorsed the principles for dealing with terrorism and the abuse of diplomatic immunity. which were adopted in September and are now being put into practice.

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We discussed East-West relations, stressing the importance of reaching satisfactory arms control agreements, and the middle east. In the discussion on central America we reaffirmed our support for the Contadora process.
Finally, the Foreign Affairs Council adopted the text on bydgetary discipline, including the strict financial guideline for agricultural expenditure. It is the result of considerable efforts over a period of years by Britain to ensure the better control of Community expenditure and a better balance in the Community budget.
Mr. Neil Kinnock: The most welcome news that comes out of the Dublin summit is the agreement to release 1·2 million tonnes of grain for Ethiopia and other African countries in the coming year. Will the Prime Minister give us an undertaking that, as the grain surplus of the Common Market continues to increase, she will prevail upon the other Heads of Government to increase that allocation as the opportunity arises.
Unfortunately, other consequences of the Dublin summit are much less satisfactory than the decisions on famine relief. First, the Prime Minsiter has failed to get the discipline over the Common Market budget that she promised. When reporting to the House after the last summit in June, the right hon. Lady said:
"we should like the principles to be embodied formally and legally in the budgetary procedure, but it must be done in such a way as to guarantee them."—[Official Report, 27 June 1984; Vol. 62, c. 1001.]
Will she now confirm that the document on budgetary discipline approved by the Dublin summit has no legal status, that it will operate on the basis of majority voting with no British veto, and that it falls lamentably short even of the objectives which the right hon. Lady set herself and promised us back in June?
Secondly, the Prime Minister may talk in her statement of the strict financial guidelines for agricultural expenditure, but is it not a fact that the 1985 Common Market draft budget, which will provide the basis for our 1986 arrangements, provides for a further and significant increase in the proportion of the budget going to agriculture and provides also for cuts in science, technology, investment in research and expenditure on transport and energy? Did the Prime Minister challenge that budget, because it will mean heavy disadvantages for Britain? In the light of that, is the right hon. Lady now prepared to reconsider her rash commitment six months ago to increase British VAT own resource payments to the Common Market by 40 per cent. in the coming year?
Tomorrow, the House debates the Chancellor's autumn statement, which provides for reduced expenditure on housing, education and other vital provisions such as regional aid and training. Against the background of financial stringency at home, how can the Prime Minister possibly justify the increased largesse to the Common Market to which she again committed herself in Dublin?
The Prime Minister: I thank the right hon. Gentleman for his comments about Ethiopia. The Community has pledged itself to provide 1·2 million tonnes of grain between now and the next harvest. All of that grain is not for Ethiopia — other places in Africa also need a considerable amount. It is thought that overall 2 million tonnes are needed of which the Community says it will provide 1·2 million tonnes. The Community is saying to
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other donors, "Will you please at least match that?" There is a considerable number of other donors who, as the right hon. Gentleman knows, are being very generous.
Considerable amounts of grain are due to land in Ethiopia, with 112,000 tonnes of wheat due to arrive in Ethiopian ports in December and another 94,000 tonnes in January, so that the distribution is kept up. As the right hon. Gentleman knows, the distribution is going well. It is vital that we have both flow and distribution. I do not think that we can commit ourselves at the moment to increased amounts. The total amount of cereal allocation in the budget is about 1·1 million tonnes. Not all of it goes to emergency aid; some of it is committed elsewhere. It is a combined effort between the Community and its member states. The right hon. Member will be aware that member states have been very active on their own behalf in helping Ethiopia, as well as within the Community. The text on financial budgetary discipline is binding on the Council itself, but it is not being embodied into a treaty or technically — legally — into the budgetary process. [HON. MEMBERS: "Why not?"] Because one simply cannot get agreement from all 10 countries. All of them have, however, agreed that the Council, which is the deciding unit in the whole Community, shall be bound by the clause on financial budgetary discipline. I hope that the right hon. Gentleman will welcome that.
With regard to the right hon. Gentleman's remarks about the autumn statement and public expenditure, he will have noted that I quoted from one of the documents submitted by the Commission to the Council in the discussion on employment, urging a reduction in public expenditure as a proportion of GDP.
Mr. Julian Amery: Is my right hon. Friend aware that, while the aid that we are, quite rightly, sending to Ethiopia is reaching the Ethiopian army and much of the civil population under Government control, the larger part of the country is not under Government control, and that none of the aid that we are sending is reaching the areas under the control of the National Liberation Fronts of Eritrea and Tigre? As a result, there is a tremendous influx of refugees—nearly 1 million — into the Sudan, and it is becoming an intolerable burden on the Sudan.
Will my right hon. Friend give serious consideration to sending aid through the Sudan to the areas controlled by the National Liberation Fronts of Eritrea and Tigre? There is some justification for doing so, in that those two organisations have offered a truce to the Ethiopian Government and the Ethiopian Government have not responded to it.
The Prime Minister: I am aware that not every area in Ethiopia has managed to get food, but the distribution is very much better than it was. My right hon. Friend is the first to be aware of the difficulties of getting supplies of food and water to the areas concerned. We are very much aware that Sudan is another area in need of help, and I shall take up what my right hon. Friend said about it.
Mr. J. Enoch Powell: How far are the new budgetary arrangements, as they affect Britain, capable of being overturned or deferred by action on the part of the European Assembly?
The Prime Minister: I do not believe that those new arrangements can be overturned by the Assembly. The

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Assembly has to act within the treaty. As the right hon. Gentleman knows, the treaty refers to 1 per cent. VAT, and his question is pertinent to some of the things being considered at the moment. The Assembly cannot go beyond 1 per cent. VAT. It has certain margins within that provision but cannot go above it.
Mr. Terence Higgins: What case is there for any increase whatever in EC agricultural expenditure?
The Prime Minister: My right hon. Friend may take that view, and some of us may go quite a long way towards meeting him on it, but it is not a view taken by everyone.
My right hon. Friend will also be aware that when we took the first steps to limit the guarantees on certain agricultural produce, it caused problems in Britain. We have to be aware that whatever is done is done gradually.
Dr. David Owen: What is the Government's view on the fact that the majority of Community countries wish to have an intergovernmental conference now on the treaties? In the light of the Greek attitude and the impending enlargement of the Community, are there not advantages for Britain in streamlining the Commission from 17 to 12, in safeguarding budgetary disciplines, and in ensuring that, provided we retain the safeguard of the Luxembourg compromise, there is more majority voting?
The Prime Minister: As the right hon. Gentleman knows, those matters are being discussed in the Dooge committee.
With regard to the right hon. Gentleman's point about reducing the number of Commissioners from 17 to 12, even at Fontainebleau I said that we were prepared to accept that. We think that it is absurd to have 17 Commissioners. There is not the work for 17 Commissioners to do. I must tell the right hon. Gentleman that I was not necessarily followed in my conclusions by other countries which have two Commissioners. I hope that ultimately they will see the wisdom of what I said.
With regard to majority voting, I have no wish to extend it beyond what is at present provided for in the treaty. Majority voting can operate in many areas, but we must stick to the Luxembourg compromise. From what the hon. Gentleman has said, I understand that he agrees.
Mr. David Harris: What about the fishing aspects of the Dublin summit? In particular, can my right hon. Friend assure our fishermen that the negotiating position agreed there will not be to the detriment of our fishermen, particularly in the south-west of England where Spain clearly hopes to gain increased fishing rights?
The Prime Minister: The Community adopted an agreed negotiating position on fishing. For obvious reasons, that has not been published, but I do not think that my hon. Friend would be unduly concerned about its provisions. I am sure he would feel that they reasonably protected Britain's interests.
Mr. Nigel Spearing: The Prime Minister has said that the Council has bound itself in respect of budgetary discipline. If that were to be so, would not that need financial regulations? Has not the Council reached conclusions only?
The Prime Minister: No, the conclusions bind the Council, but the hon. Gentleman is right in that this matter has not been transferred into regulations. Other members
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of the Community did not think that that was necessary. We would have preferred it, but the conclusions are now binding on the Council.
Mr. David Crouch: Will my right hon. Friend give more details about the satisfactory settlement on wine? Am I right in thinking that this settlement requires a much greater distillation of wine, and what effect will that have on the production and use of industrial alcohol in this country?
The Prime Minister: My hon. Friend will he aware that when wine production exceeds a certain amount—and it is triggered by three different criteria—the wine then goes for distillation into alcohol at a very much lower price. That is meant to be a disincentive to growing so much wine in the following year. I refer to table wine, not vintage wine. We are very much aware of the effect that this could have on industrial alcohol in this country. It is therefore important that the triggers are effective to reduce the amount of wine grown in successive years. That will thereby reduce the amounts that go to distillation because the price of that wine would be so low as to make it not worth producing.
Mr. Roland Boyes: Was there any discussion on the easier movement of professions in the internal Community market? Did the Prime Minister take the opportunity to raise the Football League's opposition to the free movement of footballers, which could have a devastating and damaging effect on the finances and standards of English football?
The Prime Minister: No, the hon. Gentleman will be well aware that we are talking about equivalence of qualifications, which can take a long time to negotiate. It is important to complete that part of our work so that our young people are able to practise more easily in other Common Market countries.
Mr. Stefan Terlezki: What provision has the EEC made for food and medical supplies to the 3 million Afghanistan refugees in Pakistan?
The Prime Minister: That is not dealt with through the EEC. We give refugee aid to Pakistan. We have tried to be as generous as possible, because we understand and applaud the excellent provision which Pakistan has made for those refugees from Afghanistan. I shall give my hon. Friend the precise figure. It was up to £3 million, burit may now have gone over that.
Mr. Andrew Faulds: During the conversations on the middle east, did the right hon. Lady pursue the suggestion put by the Greek Prime Minister that there should be a European initiative towards a settlement in the middle east, or is she simply prepared to wait until the American President bothers to notice the problem?
The Prime Minister: The hon. Gentleman will have seen the communiqué on political co-operation. The discussion on the middle east was not extensive. A new initiative could emerge only after very extensive consideration of the kind which specifically occurred at the Venice summit. The discussion was brief. Therefore, the communiqué summarises our present position and says that each of us has kept our contacts with the several parties involved in the middle east dispute. We intend to continue to keep those contacts separately and as a Community.
Mr. Eric Forth: Is my right hon. Friend satisfied with the provisions made in the context of enlargement both for migrant workers and the access of British industry to Spanish markets? Does she share my unease that the Greek bargaining position that is now being taken up is a foretaste of what is yet to come regarding Mediterranean countries' pressure on northern European countries on agricultural matters?
The Prime Minister: We have a particular interest in the negotiation of industrial tariffs of the Community with Spain in the negotiations for enlargement. We are not yet satisfied with the conditions, but they are still under negotiation. We are aware of the matter both regarding the quota on cars which are imported into Spain and on the high tariff imposed on them. Therefore, we want increased quotas and reductions in tariffs to take place especially steeply during the early years.
The Greek Government are demanding considerable sums for Mediterranean programmes. The sums were of such an order that my colleagues and I did not think that we could possibly agree to them, bearing in mind that Greece already derives substantial net benefit from joining the Community, which has increased steeply during the past two years.
Mr. Roy Jenkins: Does the Prime Minister recognise that Mr. Papandreou has become her most apt pupil in unilateral intransigence? Nevertheless, does she agree that it would be singularly inappropriate for Greece, which was eager to speed its entry into the Communityto block the entry of two at least equally qualified Mediterranean countries? Does she agree that that is an example neither of Socialist internationalism — a rare commodity these days — nor of democratic responsibility?
The Prime Minister: I recognise no similarity. The right hon. Gentleman has reason to know that the United Kingdom is still a substantial net contributor to the Community—[Interruption.]
I note that the right hon. Gentleman says that that is very good. He should be the first to understand that Greece is a substantial—I am sorry—a substantial taker-out from the Community and wants substantially to increase the sum which it takes out. There is, therefore, absolutely no parallel between the two cases. However, I agree that it would be disgraceful if Greece were to use that particular demand to block the entry of both Spain and Portugal. I am grateful to the right hon. Gentleman for expressing that sentiment in the House.
Mr. Francis Maude: My right hon. Friend announced the intention to proceed to the free exchange of services within the Community. Will she say when we may expect a genuine Common Market to replace the protection that exists at present?
The Prime Minister: My hon. Friend is right in saying that the article of the treaty on the completion of the Common Market for internal services has been pursued least, although in order of priority it comes above that for agriculture. It is a matter to which the Dooge committee is giving special attention. We have a special interest in it. The committee will report in March, when we shall consider how to take forward its proposals, and we shall have a substantive discussion on it by June 1985. The sooner we get a complete internal market in services the better.
Mr. Ernie Roberts: At the meeting did the Prime Minister raise the urgent and serious problem of massive unemployment in Europe? What cures and solutions did she suggest at the meeting?
The Prime Minister: As I said in my statement this was the first part of our discussions and the first matter to which we addressed our attention. I pointed out that there was a substantial report from the Commission — the annual economic report—which was geared especially to
"the dominant problem of unemployment."
It set out four particular groupings and 16 guidelines on matters to be followed. There is a full copy of the report in the Library.
Several Hon. Members rose—
Mr. Speaker: Order. There is to be a further statement of great importance, an application under Standing Order No. 10 and an important debate lies ahead of us. I shall take two more questions from each side.
Mr. Ralph Howell: I am glad to hear of the initiatives taken to try to solve the problem of unemployment in the EEC. Is my hon. Friend aware of the success of the United States in its work fare schemes in place of welfare? Will she institute a serious inquiry to see whether their methods can be useful in solving our unemployment problems?
The Prime Minister: We did not discuss those schemes in detail at this meeting, but they were discussed in detail at the London economic summit, at which many European Community countries were present, when President Reagan described them. Some of my hon. Friends in the Department of Employment have been studying those schemes.
Mr. Tom Clarke: When the Council considered the provision of grain and food aid to Ethiopia and to other countries, did it take into account the role of the United Nations and its various agencies? If so, what conclusions were reached?
The Prime Minister: Yes, we took into account the role both of other countries and, as many of our colleagues pointed out, of the extremely generous gifts from individual citizens and groups in other countries. We took the measure of what we could do both as a Community and as individual countries, and decided that we could provide 1·2 million tonnes of grain, out of a required amount of, we calculated, 2 million tonnes. That is not only for Ethiopia. There are other countries in need in Africa. Many of us also contribute to the world food programme which has been active in securing greater supplies of food to Ethiopia.
Sir Anthony Kershaw: Considering the attitude of Greece, is it expected that enlargement will cause particular difficulties, and when may we hear the outcome? Is it generally accepted that Greece has an absolute veto in all circumstances about enlargement?
The Prime Minister: Negotiations will go ahead on the remaining matters, which were wine, fish and industrial tariffs, for Spain and Portugal. We hope they will be completed by March so that the March Council can consider them. I think that it is technically true that Greece or any member state would have a veto on enlargement

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because if one insists on having a Luxembourg compromise on the veto, that inevitably follows. I hope that we shall be able to point out, as right hon. and hon. Gentlemen have, that it would be completely unjust if Greece, which is doing extremely well from its membership of the Community and is a democracy which has known non-democratic days, blocked the entry of other newly established democracies into the Community, when a purpose of their entry is to help and strengthen their democracy.
Mr. Russell Johnston: Is the Prime Minister suggesting that Greece is getting enough from the Community already? If so, does she still believe that economic convergence is a central objective of the EC? If the sums that Greece is receiving are sufficient, what hope can there be for a poor country such as Portugal? How and when does she expect the standard of living and economic opportunity of the poorer countries to be significantly improved?
The Prime Minister: In 1982, Greece's net receipts were £404 million, and in 1983 they amounted to £555 million. That represented the sharpest rise in any member state's net receipts, and made Greece the second largest net recipient of European Community funds after Italy. Greece has also benefited from certain special measures such as postponement of the introduction of VAT, which means a benefit of some £140 million. On top of those benefits, other sums were offered to Greece in pursuance of the agreement that we had, that such funds should be provided for integrated Mediterranean programmes as a consequence of enlargement. Therefore, extra on top of that has been offered to Greece. Greece said that it thought that that was not enough, but we said that it was all that the Community could afford for the time being. The hon. Gentleman mentioned convergent economic policies, but the Community is not meant to be a mechanical redistributive mechanism.

Student Awards
4.10 pm
The Secretary of State for Education and Science (Sir Keith Joseph): With permission, Mr. Speaker, I should like to make a statement.
On 12 November I announced changes to the student awards system involving the abolition of the minimum award, increased contributions from parents in the middle and upper reaches of the income scale and the extension of contributions, for those most able to pay, up to the maximum of the designated tuition fee of £520 a year. The resources released by these measures were intended in part to meet increases in the already substantial bill for student awards—about £700 million in 1984–85—and in part to provide additional money for science.
Our system of student support—amongst the most generous in the world—has long been based on the sharing of responsibility by the Government, the student's family and where appropriate the student himself. When resources are limited, it is, I believe, right for those parents who can afford to do so to carry a larger share of the costs of their children's higher education, in order to release money for urgent needs elsewhere, particularly at the moment for science.
I recognise the concern expressed in the House and elsewhere that the increase in parental contribution that was proposed was too sharp and the notice given too short to enable parents to make such a substantial adjustment in their financial affairs. I believe also that parents will want to know where they stand in relation to the next academic year.
I should therefore tell the House that it remains the Government's intention, subject to the decision of Parliament, to abolish the minimum award and to increase the level of parental contributions to maintenance for those in the middle and upper reaches of the income scale. I have, however, decided to withdraw the proposal that parents should make a contribution to tuition fees. My right hon. Friend the Secretary of State for Scotland has decided similarly. The cost of this concession in England and Wales in 1985–86 is £21 million. In order to find this extra sum, I have been through my recently announced expenditure programme again and I have been able to find £11 million savings towards it.
I have three savings to announce. First, there will be a reduction of £6 million in the addition to the equipment grant for universities in 1985–86. This means that universities will get £4 million for this purpose in that year instead of the £10 million that I announced earlier. I intend, however, that the selective scheme, with the agreement of the University Grants Committee, should now be extended to cover the three years to 1987–88: £7 million a year will be available in each of the two later years.
Secondly, there will be a reduction of £3 million—from £14 million to £11 million—in the amount which I had told the chairman of the Advisory Board for the Research Councils was a planned addition for science in 1985–86.
Thirdly, there will be a number of smaller economies amounting to £2 million. This will mean among other examples a smaller increase than already announced for

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the PICKUP programme; and less for educational research, adult education and the microelectronics programme.
The remaining £10 million needed in 1985–86 will, exceptionally, be found by an addition of that amount to the public expenditure planning total.
The Government propose to consider—and consult widely about—whether a radical change in the student support system, which might include loans, should be made so as better to meet the needs of students and their families whilst safeguarding the interests of the taxpayer.
I believe that these proposals meet the two main concerns of the House: first, that the increase in parental contribution was too sharp and too sudden; and, secondly, that the system of student support in the longer term should be reviewed.
Mr. Gordon Wilson: On a point of order, Mr. Speaker—
Mr. Speaker: Order. I shall take points of order afterwards.
Mr. Wilson: It is very important—
Mr. Speaker: Order. All points of order are very important.
Mr. Wilson: On a point of order—
Mr. Speaker: No; I said that I would take the hon. Gentleman's point of order afterwards.
Mr. Wilson: On a point of order—
Mr. Speaker: Order. I have told the hon. Gentleman that I will take his point of order afterwards, and I will.
Mr. Wilson rose—
Mr. Speaker: I will take it afterwards. I will not take it now!
Mr. Wilson: On a point of order—
Mr. Speaker: Order. Perhaps the hon. Gentleman did not hear me. I will take the point of order afterwards. I will not take it now.
Mr. Giles Radice: Is the Secretary of State aware that by withdrawing the proposal to charge for tuition fees he has been forced into a humiliating climb-down? Is he further aware that since the Government came to power they have reduced the real value of student grants by 14 per cent.? The right hon. Gentleman still proposes to abolish the minimum grant and is still not prepared to set up a wide-ranging and independent — I stress "independent"—review of financial support for all those in higher and further education.
Is it not also the case that the right hon. Gentleman is now cutting over £9 million from the increase in the science budget, which he told the world was so important that parents and students must pay for it? Terrified by their own Back Benchers, the Government have climbed down. How can the House have confidence in a Secretary of State who has displayed such incompetence and insensitivity? How can the Secretary of State have any confidence in himself?
Is the right hon. Gentleman aware that we would feel more respect for Conservative Back Benchers if they also used their muscle on issues affecting far greater numbers?
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Where is the Tory rebellion on the reduction in the pensioners' heating allowance? Where is the Tory rebellion on the cuts in regional aid? Where is the Tory rebellion on unemployment? We will take the Tory Back Benchers seriously when they force the Government to climb down on those other issues of fundamental importance to many millions throughout the country.
Sir Keith Joseph: The Government's purpose of strengthening the science budget — though admittedly less than we would have liked—is still being achieved.
Mr. Mark Carlisle: While obviously regretting the need for any increase in the parental contribution, I nevertheless say to my right hon. Friend that I and many of my hon. Friends will be glad that he has thought again about the question of tuition fees. We welcome the change and thank my right hon. Friend for what he has done in that regard, thereby preserving the principle of free higher education in this country.
Sir Keith Joseph: I very much respect the desire of my right hon. and learned Friend to find the best answer to the problem of student support, and I am grateful for what he has said.
Mr. David Steel: It will not be lost on the House that a rebellion by Tory Back Benchers has for the first time been half successful when it involves the interests of their better-off constituents.
The right hon. Gentleman misunderstands the position if he thinks that the public outcry is about the suddenness of the announcement. The outcry has arisen because the announcement comes on top of a steady erosion of the value of the student grant during the right hon. Gentleman's period of office. That is why it is unacceptable. Why is the right hon. Gentleman messing around trying to find £11 million by damaging cuts in other areas of education when the Chancellor of the Exchequer has told us that he is keeping £1,500 million in reserve for tax cuts in the spring? Will the right hon. Gentleman tell us about the effects of the cuts on the Scottish budget, about which he said nothing in his statements?
Finally, why should there not be a review before any changes are made rather than after the right hon. Gentleman has aready made some damaging decisions?
Sir Keith Joseph: All the better-off will still pay more in parental contributions, despite today's announcement. The question of arriving at the optimum balance between students and families on the one hand and taxpayers on the other will be at the heart of the review that has been announced. The cuts of £11 million are reductions in increases and leave substantial increases for the science budget.
Sir William van Straubenzee rose—
Mr. Wilson: On a point of order, Mr. Speaker.
Mr. Speaker: Order. I have already told the hon. Gentleman that I will take his point of order afterwards, and I will do so.
Mr. Steel rose—
Mr. Wilson rose—
Mr. James Wallace rose—
Mr. John Maxton rose—
Mr. Speaker: Order. I am very surprised that the leader of the Liberal party and other should rise on points of order in the middle of a very important statement which the House wishes to hear. I am here to protect the interests of the whole House.
Mr. Wilson rose—
Mr. Wallace rose—
Mr. Maxton rose—
Mr. Speaker: Order. If the hon. Member for Dundee, East (Mr. Wilson) does not resume his seat, I shall have to ask him to leave.
Mr. Wilson rose—
Mr. Wallace rose—
Mr. Alexander Eadie rose—
Mr. Speaker: Order. I would be reluctant to have to ask the hon. Gentleman to leave. I ask the hon. Gentleman to resume his seat. I call Sir William van Straubenzee.
Mr. Wilson rose—
Mr. Wallace rose—
Mr. Maxton rose—
Mr. Speaker: Order. I think that I can almost anticipate the point of order that the hon. Member for Dundee, East wishes to make, although there is so much noise that the situation is very difficult for me. I believe that he wishes to say that we have had Scottish questions this afternoon, that there was a question on this point, and that the Secretary of State did not answer it as the Secretary of State for Education and Science has done.
Mr. Wilson rose—
Mr. Speaker: If the hon. Gentleman will be patient, I may be able to call him.
Sir William van Straubenzee: Does my right hon. Friend recall that I ventured yesterday afternoon to identify —and the point seemed to have approval—the inclusion of fees in the parental contribution arrangements as the issue of principle that was bothering so many hon. Members on these Benches? I said that that principle potentially affected not just the better-off but students from far less well-off homes than is normally supposed. What my right hon. Friend has now done, therefore, has gone a long way towards setting at rest the anxiety of Conservative Back Benchers.
Will my right hon. Friend venture to suggest to his Cabinet colleagues that the other lesson of principle is that Conservative Back Benchers who are anxious to support the Government must, in difficult matters such as this, be brought into consultation at a reasonably early stage?
Sir Keith Joseph: I am glad to pay tribute to the effectiveness of my hon. Friend's insight. The review and the following consultation will give an opportunity for the thorough canvassing of the options.
I gather that a question was asked by the right hon. Member for Tweeddale, Ettrick and Lauderdale (Mr. Steel), which I did not hear. I cannot answer for Scotland myself, but I am told that my right hon. Friend the Secretary of State for Scotland has yet to announce the allocations to programmes within the Scottish block. The effect of this change will be covered when he makes that announcement, which I understand he hopes to do shortly.
Mr. Martin Flannery: Has not the Secretary of State been kicked into grasshopping from one penny-pinching point to another? He has no answer to the accusation that, while giving public funds to the assisted places ,scheme and cutting down on education left, right and centre, he has now been brought to book, and, in order to please his own Back Benchers is having to make a concession that is not really a concession. He is stealing funds from other areas when he could take money from the rich to ensure that working people have a proper education.
Sir Keith Joseph: The hon. Gentleman should recognise that, as is often the case, that is inaccurate. On an exceptional basis, my right hon. Friend the Chancellor has helped to achieve a situation which allows an increase in the science research budget.
Mr. David Madel: I welcome what my right hon. Friend has said about fees and future inquiries into student support, but can he confirm that, as the student population is rising, the extra £15 million for awards in 1985–86 is safeguarded?
Sir Keith Joseph: Yes, Sir.
Mr. Wilson: As the Secretary of State for Scotland put off the leader of the Liberal party earlier this afternoon in Scottish Question Time with a promise that a statement would be made on this matter setting out the Scottish implications, will the Secretary of State tell us—we demand it — what the effect will be on the Scottish education budget?
Sir Keith Joseph: No, Sir. I have told the House that my right hon. Friend hopes to make a statement shortly.
Mr. Dick Douglas: On a point of order, Mr. Speaker.
Mr. Speaker: Order. We have already gone over this matter.
Mr. Douglas: No.
Mr. Speaker: Order. I have received notification that the Opposition Front Bench wishes to raise a point of order at the end of the statement. I intend to take points of order then.
Mr. Douglas: On a point of order, Mr. Speaker.
Mr. Wilson rose—
Mr. Speaker: Order. I have already said that I shall take the point of order later. I call Sir William Clark.
Mr. Douglas rose—
Mr. Wilson rose—
Mr. Speaker: Order. I have already said that I shall take the point of order after the statement.
Sir William Clark: Is my right hon. Friend aware—
Mr. Douglas: On a point of order, Mr. Speaker.
Mr. Speaker: Order. I hope that the hon. Gentleman, who is a very experienced parliamentarian, is not trying to challenge what I have said. I have already said that I shall take the point of order at the end of the statement. That is exactly what I intend to do. I call Sir William Clark.
Sir William Clark rose—
Mr. Harry Ewing: On a point of order, Mr. Speaker.
Mr. Donald Stewart rose—
Mr. Douglas rose—
Mr. Speaker: Order. I think that this is intolerable.
Mr. Douglas rose—
Mr. Speaker: Order. It is intolerable that Privy Councillors—
Mr. Donald Stewart rose—
Mr. Speaker: Order. It is intolerable that Privy Councillors and experienced Members should seek to challenge a decision that I have already stated. As I have already told the House, I intend to take the point of order at the end of the statement. I have an obligation to the whole House, not just to Scotland.
Mr. Donald Stewart rose—
Mr. Douglas rose—
Mr. Speaker: Order. I call Sir William Clark.
Sir William Clark: Is my right hon. Friend aware that his statement will be widely welcomed here and throughout the country? Is he further aware that, rather than this being a humiliating defeat for him, we admire him for agreeing and admitting that his first assessment on student awards needed amendment? He showed political honesty and courage. In his long-term consideration of student awards, will he look into the extension of the business loan guarantee scheme for students?
Sir Keith Joseph: I am most grateful to my hon. Friend. We can ensure that his suggestion is taken into account in the review.
Mr. Eric S. Heffer: As someone who is not renowned for causing any trouble in the House, may I tell the right hon. Gentleman—[HON. MEMBERS: "No—ask him."]—may I let him know that Opposition Members are not averse to any Government taking notice of what Back Benchers think? It would be a good thing if all Governments did that.
Does the right hon. Gentleman understand that many of us are deeply anxious about the suggestion of loans to students, as such a proposal would result in ordinary working-class youngsters who have previously been given the opportunity to go to university not getting those opportunities because their families are unable to meet the cost? Is he aware that student grants are tremendously important to ordinary working people as they have given thousands of youngsters from working-class families the opportunity to go to university? Is he further aware that if the Government continue with the proposal of student loans they will meet the greatest resistance from both sides of the House—I hope?
Sir Keith Joseph: The idea of partial or total loans in replacement of grants is one that should surely be considered during the review. The experience of our neighbours in north-western Europe shows that a suitably drawn partial or total loan scheme does not discourage access to higher education in any way.
Mr. Alan Haselhurst: Is my right hon. Friend aware that we are pleased that the voices of
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his colleagues and those who have spoken through them have been heard by the Government? Will all options be considered in the review, including the possibility of our not being committed to further increases in parental contributions?
Sir Keith Joseph: I am grateful to my hon. Friend. I assure him that the review will aim to consider all the options before consultation.
Mr. Tam Dalyell: The Secretary of State and the Prime Minister in their respective statements talked about the Community's advance in high technologies. Precisely how many alpha research projects, many of which are already being refused, will now be refused when they would otherwise have been successful? What number of peer-group diagnosed alpha research projects will be refused as a result of taking money away from the science budget?
Sir Keith Joseph: The hon. Gentleman has evidently not absorbed the fact that the Government are proposing an increase in the science budget, although it is slightly reduced as compared with what we proposed at first. The answer to the hon. Gentleman's question cannot be given by any Minister from this Dispatch Box, because the decision is for individual research councils. I can give him a general reply that the number of approved and funded alpha grants will be substantially greater because of even the reduced increase which is now proposed.
Mr. Harry Greenway: Does my right hon. Friend recall that some 70,000 students were taken out of contributions by themselves and their parents under the package that he announced first? Will he assure the House that they will be safeguarded, as was first announced? Will he bear it in mind that adult education has suffered severe cuts already and should be subjected to no more? Will he remind the Opposition and everyone else of the importance of maintaining the access of able people to university, wherever they come from, as they will create the wealth which will pay for the welfare programmes that we all want? That is the only way in which that will be achieved.
Sir Keith Joseph: Those at the lower end of the income spectrum who would have benefited from the Government's first proposals will still benefit exactly as was originally proposed. I should not like the House to get the wrong impression about the diminution of the money that might have to be made in the allocation to the adult education programme. As far as we can tell, it will be about £100,000 a year.
Mr. David Winnick: Is the right hon. Gentleman aware that my hon. Friend the Member for Liverpool, Walton (Mr. Heffer) is absolutely right, that a loan scheme for students would undoubtedly disadvantage many working-class families and, although today's climb-down by the Cabinet shows that he has been listening to Back Benchers, the substitute proposals that he has put forward will be no less damaging to education than the earlier proposals and should provoke the same protests from his own side?
Sir Keith Joseph: I believe that the hon. Gentleman is wrong. The effect of a loan scheme, whether partial or total, depends on the detail of its construction. As for the

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hon. Gentleman's comments about the implications for education, even after the adjustment, we are proposing an improvement in the education and science budget.
Mr. Andrew MacKay: Is my right hon. Friend aware that on this very healthy day for parliamentary democracy his proposals on tuition fees will be broadly welcomed by Conservatives and by the country as a whole? Nevertheless, will he explain in more detail his proposals for grants in the middle-income groups so as to allay our fears that some families in that group may suffer unduly?
Sir Keith Joseph: I am not quite sure what my hon. Friend has in mind. We are removing the danger or the probability of any individual with just one child in higher education having to pay more than £205 per year, except in very unusual circumstances. What we do afterwards will depend on the review, which will take all the options into account, and on the consultations that follow the review.
Mr. David Lambie: Is the right hon. Gentleman aware that his climbdown will be totally unacceptable to students and parents in Scotland? He has said that the Secretary of State for Scotland will be making an announcement on a future occasion. Why is that announcement not being made today, after the right hon. Gentleman's own statement? May Scottish Members have a guarantee that any such announcement will be made on the Floor of the House so that we can ask questions on it and not through a private notice question or a press notice issued from Edinburgh?
Sir Keith Joseph: I cannot really answer that beyond saying, on behalf of my right hon. Friend the Secretary of State for Scotland, "Yes."
Mr. Michael Forsyth: Does my right hon. Friend recognise that his statement today will be widely welcomed in Scotland as a recognition of the unfairness of the parental contribution system? In carrying out the review, will he bear in mind that partial loans for students will be welcomed by students and parents across the political spectrum in Scotland as a fairer system whereby working class families will not have to subsidise others?
Sir Keith Joseph: I am grateful to my hon. Friend. I suspect that many hon. Members agree that the interests of taxpayers who do not have children in higher education and who may themselves have relatively low incomes must also be taken into account.
I should correct an error that I inadvertently made in reply to my hon. Friend the Member for Berkshire, East (Mr. MacKay). It is possible that some parents may have to pay as much as £270 per year more.
Mr. David Alton: Is not the Secretary of State simply playing ducks and drakes with his own budget and merely offering a continuation of the thin gruel of education cuts and turning the clock back to before the Education Act 1944? Will be guarantee that more funds will be made available for education and that the 20,000 places in higher education that have been lost in the past five years will be restored? Does he agree that it is immoral to give away £1·5 billion in tax cuts when this money is being denied to higher education?
Sir Keith Joseph: The hon. Gentleman has got it entirely wrong. The number of students in higher education is nearly 60,000 per year higher than it was in 1979.
Mr. Andrew Bowden: Will my right hon. Friend remind the House that many students are receiving grants in excess of the amount on which many pensioners have to live? Will he confirm that, in view of the need to restrict public expenditure, it is only fair and just that all sections of the community should pay their share, including those earning between £20,000 and £30,000 per year?
Sir Keith Joseph: Yes. We must also bear in mind the contribution of those on low incomes to the total tuition fees from which students in this country benefit, which vary from £3,000 to £8,000 per year.
Mr. Robert Hughes: Is the Secretary of State aware that, however humiliating this partial climbdown has been for him, it is an even greater humiliation for Conservative Back Benchers who have shown no spine or guts and have accepted a statement which, if anything, will damage the future of education even more than the original proposals?
Sir Keith Joseph: The hon. Gentleman is being unduly churlish. The result of today's announcement is to leave a substantial — a significant — increase in the money available for basic science research, which I should have thought would have been of interest to Members on both sides. It is also a recognition by my right Friend the Chancellor of a quite exceptional case so that he has been able to contribute to that result.
Mrs. Edwina Currie: Does my right hon. Friend accept that the most welcome part of his statement is that serious consideration will be given to the whole system of financing students in higher education and that there will be full consultation on this? Does he agree that the review is long overdue and that it must take particular account of those students whose parents cannot or will not pay for them?
Sir Keith Joseph: Yes, but I should not like any hon. Member to ride away with the thought that the reduction in savings accepted by the Government today can be free. We have had to make reductions in other forms of public expenditure.
Mr. Robert C. Brown: Is the Secretary of State aware that it is not unknown for students with extremely rich parents to live on chip butties because their parents will not accept responsibility for the parental contribution? In carrying out his review, will he bear it in mind that the only egalitarian way to finance education expenditure is through taxation and that that is the way in which the matter should be tackled?
Sir Keith Joseph: That is an approach that the Labour Government felt unable to adopt. There is a limit to what can be asked of the taxpayer.
Sir Bernard Braine: Most of us recognise that it takes great courage for a Minister to change course as my right hon. Friend has done today, and he should be given credit for that. Nevertheless, will he take a longer, harder look than he seems prepared to do? Does he agree that investment in minds is the finest investment that we can make for the future but that many

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of us are dubious about some forms of research expenditure? Will he take a close look at some of the unethical research taking place in accordance with guidelines laid down by the Medical Research Council?
Sir Keith Joseph: A large number of people will agree strongly with my hon. Friend, but the Government, like many previous Governments, have given the research councils autonomy to make their own decisions on such matters.
Mr. Kevin Barron: The Secretary of State has said that there will have to be other cuts to pay for this. How are those cuts likely to affect organisations such as the Workers Educational Association, which helps those who have not had the privilege of a university education? Has he considered cutting the present £30 million subsidy from taxpayers to the public schools?
Sir Keith Joseph: The reply to the first part of the hon. Gentleman's question is none; there will be no effect on the WEA. In answer to the second part, the Government reviewed all the possible sources of savings, including that one.
Mr. Alan Howarth: Is my right hon. Friend aware that there will be a warm welcome on the Conservative Benches and in the country for the commitment to study in the review the part that a loans scheme might play in student finance? Does he agree that the availability of loans in conjunction with grants could do much to widen opportunity and responsibility in higher education, as well as help to meet the Government's financial commitment within the bounds of what can reasonably be afforded?
Sir Keith Joseph: I welcome my hon. Friend's comment, but I should not like the House to imagine that a part-loan scheme, which I have long favoured, can be introduced without complications and costly options. It will need a great deal of thought before deciding whether the Government would be wise to adopt any option that would involve extra costs.
Mr. Derek Fatchett: Does the Minister feel that by saying over the weekend that it would be impossible to cut a further penny from the scientific budget but coming three days later to the House with cuts amounting to £11 million he will have enhanced his status in the scientific community?
Sir Keith Joseph: The hon. Gentleman is right. I did not, as I should have done, interlard every statement that I made on televison with the phrase "Parliament permitting" or "With the approval of the House". I was talking about the provisional allocations. I accept the hon. Gentleman's comment.
Mr. John Stokes: Is my right hon. Friend aware that his original proposals seemed to some of us wholly right in principle, although perhaps somewhat wrong in execution? Is he also aware that millions of people who voted Conservative, including a large number in my constituency, have incomes that are nothing like £19,000 a year? If we are a national party, is it not our duty to look after all classes, not just the middle band? Furthermore, if we are to control Government spending, should we back down just because we receive a few letters from our constituents?
Sir Keith Joseph: I agree very much with the first part of what my hon. Friend says. How much the taxpayer should contribute to the expensive education costs of students is an important question to decide. Although students will almost certainly in most cases benefit the public, they will also—and good luck to them—benefit themselves.
Mr. Gavin Strang: Surely the Secretary of State is aware. that the cuts that he has announced this afternoon are even more reprehensible than the parental payment towards fees? Does this not demonstrate that the Conservative Government attach more importance to the disposable income of their highly paid supporters than to science, which is crucial to our future? As the Secretary of State has made such a public capitulation on this issue, will he resign?
Sir Keith Joseph: The Government's purpose is being achieved. There is some redeployment towards scientific research, which will receive an increase even after the reduction from that increase this afternoon, and we shall embark on a review to sort out part of this complex matter, which arouses strong feelings on both sides of the House.
Mr. Patrick Cormack: I thank my right hon. Friend for listening and acting. However, I am somewhat disappointed that it has not been possible to find the extra £11 million, in view of the fact that my right hon. Friend the Chancellor of the Exchequer has told us that he is likely to have £1,500 million to spare. Bearing in mind that people are adults at the age of 18, will my right hon. Friend the Secretary of State reaffirm the pledge that he and his predecessor gave to the Select Committee, that it remains the policy of the Government to phase out parental contributions?
Sir Keith Joseph: No, I cannot give a pledge such as that. We have long recognised that it would be desirable to treat an adult as an adult in terms of the costs of higher education, but we do not judge it practicable in the present and foreseeable circumstances to be able to do as my hon. Friend suggests.
Mr. Mark Fisher: Does the Secretary of State agree that he has broken his word to the University Grants Committee and to the research councils? Does he not understand that this statement, far from allaying criticism, will be viewed with anger and contempt by the universities, by people interested in research and particularly by parents and students? Does he realise that he no longer enjoys the confidence of the House in his handling of education, and should he not resign?
Sir Keith Joseph: The hon. Gentleman is totally wrong. The vice-chancellors of many universities objected to the scale and the short notice of the proposal that I originally announced. I have had many letters from them urging some reduction in the proposed increase. I do not think that the hon. Gentleman will find support for what he is saying among universities or among the science community.
Mr. Gordon Brown: Will the Secretary of State confirm that, instead of cuts in one sector, there will be cuts in almost every sector of the education budget, and that in postponing the erosion of student grants in the short term he is proposing the elimination of student grants in the long term? Will he

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come clean and say that it is to make possible tax cuts at Easter that he is prepared to cut science, training, adult education and research in universities' budgets?
Sir Keith Joseph: The hon. Gentleman is wrong. The result of this afternoon's decision is that the science budget receives more, although slightly less than was originally announced.
Mr. Patrick Nicholls: Will my right hon. Friend accept that the fact that he has correctly identified one of the outstanding points of principle that concerns Conservative Members shows that he has displayed high personal courage, which can only increase the esteem in which Conservative Members regard him? In the deliberations that will follow, will my right hon. Friend be able to persuade my right hon. Friend the Chancellor of the Exchequer to find the remaining £11 million that has made this change possible?
Sir Keith Joseph: I am grateful, but it is a dangerous illusion into which we fall when we talk of the Government, or even my right hon. Friend the Chancellor of the Exchequer, finding money. It is all the taxpayers' money.
Mr. Nicholas Winterton: Does my right hon. Friend accept that many of us who have been highly critical of him will welcome his decision to maintain the status quo in tuition fees, which shows good sense? However, will he go further and say that, as the grants that many students obtain from local authorities are tax free, any contributions that parents make should be allowable against their tax?
Sir Keith Joseph: That is really a matter for my right hon. Friend the Chancellor of the Exchequer.
Mr. D. N. Campbell-Savours: Will the Secretary of State accept that the way in which he has dealt with this problem in securing the interest of articulate organisations and the middle-class lobby may in future mean that, instead of taking them on, he will turn his attention to the more deprived elements of our society and their education needs? Will he give an assurance that he will not do that?
Sir Keith Joseph: I do not think that the hon. Gentleman can be aware that in 1979 the Labour Government left a minimum award that was highly regressive in its affects, and that has only been removed by the decision, which has been confirmed today, to abolish the minimum award.
Mr. Derek Conway: Bearing in mind that the Representation of the People Act 1969 set the legal age of adulthood at 18, is it not incongruous that young people are even more reliant on their parents at a time when they are judged to be legally adult? When my right hon. Friend has his inquiry, will he examine closely the estimate that 46 per cent. of students do not receive the full parental contribution, which is a matter of concern? It is of great sadness to his colleagues that he will have to look round for the odd million here and there when it is so easy to find hundreds of millions of pounds, as we did last week, to throw at the National Coal Board.
Sir Keith Joseph: My hon. Friend has inadvertently misled himself. I think that he was intending to speak of the 46 per cent. of students who receive contributions. The
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House must recognise that any Government face a dilemma in balancing the adult status of the student child with the sheer budgetary burden of removing the parental contribution.
Mr. Wallace: You will recall, Mr. Speaker, that during Scottish Question Time the Secretary of State for Scotland said that the Secretary of State for Education and Science would reply to a question put by my right hon. Friend the Member for Tweeddale, Ettrick and Lauderdale (Mr. Steel), the leader of the Liberal party. I repeat the question in the hope that the Secretary of State will answer A. I do not think that it depends on the work allocation that is always being referred to. What will be the savings in the Scottish Office budget as a result of the cuts which have been announced, and how many Scottish students will this affect?
Sir Keith Joseph: I still cannot reply to that question. That is a matter for my right hon. Friend.
Dr. Keith Hampson: Is my right hon. Friend aware that, although there will be some who will say that he has not gone far enough, the majority will acknowledge the importance of having a fundamental review, which all Governments over the past 10 years have been asked to carry out? The concession on fees which he has announced will have the single most important effect of reducing the burden on parents who are contributing to the maintenance of their children in university or other higher education. Will he ensure that my right hon. Friend the Chancellor of the Exchequer does something in the Budget to offset what has been done to science, the pickup scheme and micro-electronics to help modernise industry? He has only to see what is happening in Japan to recognise the importance of that.
Sir Keith Joseph: The Government have provided extra money for all these schemes. I hope that the erosion of their finance will be marginal compared with the increases with which they have already been provided.
Mr. Anthony Beaumont-Dark: Will my right hon. Friend accept that there is some relief and gratitude that, after much hard pounding, some common sense at least has been brought back to student grants? Does he think that it is worth the agony and the anguish to the great body of the middle class that for £11 million so much ill will has been caused? This time last week some of us stayed in the Chamber at a late hour because £800 million was to be put through on the nod on behalf of the greatest pressure group of all, which is formed by those who insist on going on strike in an industry which continually loses money. Does he agree that if we can get our priorities right those who contribute most, who are members of the middle class, will not be hit as hard as they have over this stupid matter?
Sir Keith Joseph: Under the constraint of various burdens on public expenditure, I can understand my hon. Friend's complaint. I hope that he and the House will recognise that it is a national interest to safeguard the quality of our scientific research base. It seems imperative to the Government to take urgent action to preserve it.
Mr. Teddy Taylor: Is my right hon. Friend aware that his statement will bring great relief to many parents, especially those of younger children who are not yet at university, who were worried that, once established, the principle of tuition fees could soar to an

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impossible level? Will he make it abundantly clear that the figure which has been arrived at is unlikely to re-emerge in any review?
Sir Keith Joseph: No, I cannot give my hon. Friend a guarantee that this or that possibility will not arise in the review. The review will give us the opportunity to consider all the options and then we shall consult upon them.
Mr. Stuart Randall: Is the Secretary of State aware that a recent NEDO report described British micro-electronics and information technology as being in serious crisis? Is he aware also that the gap between our main competitors in Japan, the United States, France and Germany and ourselves is widening? Does he realise that his proposal to introduce a cut in the micro-electronics programme will accentuate the gap, which must be bad for all modern or new industries in Britain?
Sir Keith Joseph: The hon. Gentleman has entirely wrong the scale of what might be involved. The erosion in the micro-electronics programme — the programme has been growing—might be £250,000 to £500,000 a year. That is dwarfed by what the micro-electronics programme is achieving.
Mrs. Elaine Kellett-Bowman: Will my right hon. Friend accept the thanks of the many parents who save conscientiously towards meeting the cost of the education of their children, who would have been unable to bear the additional burdens that it was proposed to place upon them? Will he accept also my thanks for the offer of a review, which will be greeted with great pleasure? People like to feel that they have influence in anything as important as the matters that will be examined during the review.
Sir Keith Joseph: I am grateful to my hon. Friend.
Mr. Radice: Is the Secretary of State aware that many of us are dissatisfied with his answers, especially on the science budget? I return to the review of student support. Given the mess which he made of his original proposals and the controversy which surrounds the issue of loans, will he guarantee that his review will be independent?
Sir Keith Joseph: The Government have not yet decided the form that the review will take. I cannot give any such commitment.
Mr. Donald Dewar (Glasgow, Carscadden): On a point of order, Mr. Speaker. I ask you, Mr. Speaker, to consider the damaging and rather disgraceful situation that has arisen this afternoon. After the statement of the Secretary of State for Education and Science, we know nothing about the thoughts, actions or reasons of the Secretary of State for Scotland on student grants. All that we have is a statement from the Department of Education and Science that the Secretary of State for Scotland has decided similarly. That is added as an afterthought almost insultingly, at the fag end of the Secretary of State's statement.
I ask you for some protection, Mr. Speaker. It is important that we know what is happening in the Scottish Office. We know the total figure that is involved for England and Wales and we know where the education cuts will fall, but when it comes to Scotland we are left in a
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black hole of uncertainty. We are left with the unfortunate impression that, whether the Secretary of State for Scotland has decided or not, he does not really know what has been decided in his name.
Is it not intolerable that, on a day that has included Scottish Question Time, we should be left with less information than the rest of the United Kingdom about a key decision of interest to universities, students and the people of Scotland generally? Will you consider, Mr. Speaker, whether it was not most unfortunate that when a precise and specific question appeared on the Order Paper — it was Question No. 4 from the right hon. Member for Tweeddale, Ettrick and Lauderdale (Mr. Steel) — we were told that it could not be answered because there would be a statement from the Department of Education and Science? Any reasonable person would have deduced from that that the Minister making the statement would be in a position to deal with the Scottish figures and answer specific questions on Scotland. The Secretary of State for Education and Science was not in a position to do so. I presume that we were misled unintentionally during Scottish Question Time.
I hope that the Secretary of State for Scotland will not try to shirk his responsibilities. He is responsible for these matters in Scotland. He is quick enough to claim the credit if there are differences of approach in Scotland and England, but when the going becomes rough he must come to the House and not shelter behind another Minister. The right hon. Gentleman is in his place and the Leader of the House is in his. Can we now have, through you, Mr. Speaker, an assurance that there will be an immediate statement that will give us the details for Scotland?
Mr. Speaker: Order. The hon. Gentleman knows perfectly well that I am not in a position to give immediate guarantees that statements will be made. That is not a matter for me.
The Lord Privy Seal and Leader of the House of Commons (Mr. John Biffen): Further to that point of order, Mr. Speaker. I realise that there is great concern and anxiety in the House about the Scottish dimension of this afternoon's business and a wish that it should be made available to the House. I shall not comment on the remarks of the hon. member for Glasgow, Carscadden (Mr. Dewar) save to say that I think that they are rather contentious. At least that is how they are heard by English ears. I assure the House that an oral statement will be made as soon as possible, the modalities of which can be determined through the usual channels.
Several Hon. Members rose—
Mr. Speaker: Order. The House will fully understand my position. The House has heard what the Leader of the House has had to say. I am not certain that I shall be able to answer any points of order, but I will do my best.
Mr. David Steel: May I seek your guidance, Mr. Speaker, as the Member who asked question No. 4 on the Order Paper? It will be within your recollection that the Secretary of State for Scotland specifically asked us to wait until the statement was made this afternoon. Rather foolishly, perhaps, we agreed to that request. In retrospect, perhaps we should not have agreed to it. Indeed, in retrospect there is no earthly reason why we should have agreed to it. The Secretary of State for Scotland is not a subsidiary Minister. He is

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entitled to give us the information. My specific point of order is to ask why we should have a separate statement taking up the time of the House. Could we not direct the Secretary of State for Scotland to answer question No. 4?
Mr. Speaker: I cannot do that.
Mr. Bill Walker: Mr. Speaker, you will recollect that during Scottish Question Time this afternoon you called Opposition Members in consecutive order on more than one occasions. In one instance, four of them were called before anybody was called on the Government side of the House. I am not making any criticism, because I was called. I ask you, however, Mr. Speaker, to reflect that you were rewarded by the behaviour of Labour Members, even those on the Opposition Front Bench who attempted to disrupt the proceedings.
Mr. Wilson: Could I raise a point of order that includes three separate aspects? First. I raised a point of order during the statement because it became clear, from the answer that was given, that the Secretary of State for Education and Science had no intention of replying—or, indeed, may not have had information to enable him to reply — to the question about the Scottish education budget. I did not wish unnecessarily to interrupt the statement because I know of your preference for dealing with points of order at a later stage, but for Scottish Members a point of order was essential at that time. Without any knowledge of whether there would be a separate statement from the Secretary of State for Scotland, we could not know whether it was appropriate for us to direct our questions to the English Minister for Education and Science.
The second part of the point of order that I wish to bring to your attention is that the Secretary of State for Education and Science has control over the Scottish universities but, by reason of an anomaly, does not have control over the grant or budget of the Secretary of State for Scotland. The particular aspect to which I wish to draw your attention and to ask you to consider raising with the Procedure Committee, is that if Scottish Members of Parliament—it has happened frequently in the past—cannot expect to receive statements from the Secretaries of State for Scotland on policy matters affecting Scotland when equivalent statements are made by their colleagues, they are effectively treated as second-class Members of this House. Immediately after the Treaty of Union I believe that one of your predecessors wrote in terms of the orders of this House that it was the English House of Commons which was to continue. If the Procedure Committee and you, Mr. Speaker, do not direct your minds to the rights of Scottish Members of this House, that is exactly what it may be.
The third aspect of the point of order that I wish to bring to your attention, following upon the point of order raised by the leader of the Liberal party concerning question No. 4, is that we were misled. We look upon you to defend our rights as Members of this House when promises are made by Cabinet Ministers. We now know how the statement on grants will impact upon the education system in England and Wales. It will do so in a manner that must cause us concern over the equivalent budget for Scotland.
Either the Secretary of State for Scotland—who has acceded to the decision announced today in the House by his colleague — is aware of how he will fund it, in
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which case he is cowardly in not facing hon. Members, or, if he does not know, he is incompetent. It may be that he is both, but in either event a serious point of principle is involved. As Scottish Members we should be entitled to answers from our own Ministers. Otherwise, our attendance at this House is a waste of time.
Mr. Douglas: On a point of order, Mr. Speaker. Rather reluctantly may I ask you to reconsider some of the remarks you have made. During the exchanges that took place this afternoon you said, if I understood you correctly, that you represented the interests of all Members of the House, not just Scottish Members. On this occasion I ask you to consider what has happened. Scottish Members have been treated not as equals but as inferior to other hon. Members. You will be well aware that in Scotland we have a separate and distinct education system. It is not sufficient to have the Secretary of State for Education and Science answer for English universities and polytechnics when in Scotland the colleges of education, central institutions and student grant system form a separate and distinct system of education.
I am asking you, Mr. Speaker, whether you are aware of that and whether it is within your power and province to ensure that the Secretary of State for Scotland simultaneously, so far as is possible, comes to the House and answers on a co-equal basis for Scotland when the Secretary of State for Education and Science answers in this House for matters within his province. When is the Secretary of State for Scotland going to come to the House today to make such a statement?
Mr. Maxton: On a point of order, Mr. Speaker. You have the responsibility to protect the reputation both of this House and of every single Member in it. The reputation of this House will today have been severely damaged in Scotland by the action of the Secretary of State for Scotland, who has refused to make a statement on the matter. The Secretary of State has an opportunity to do so now. If he is saying that he does not know what is happening in the universities he should not be in the job. The fact is that, already, during the last three weeks, we have had two examples of Ministers coming to the House late in the day, as a result of pressure from the House. The Secretary of State is in a position to do that today. He does not have to leave it until another occasion. It is right that the Secretary of State, who is present and who is in a position to answer questions, should answer questions now from Scottish Members and not make a statement later.
The Secretary of State for Scotland (Mr. George Younger)rose—
Mr. Speaker: The Secretary of State is rising to his feet. It might solve the matter if he were allowed to speak.
Mr. Younger: I may be able to help the House. The House may not be fully aware of how the Scottish public expenditure system works. It works in this way. There is a block of Scottish expenditure within which the Secretary of State has discretion to make dispositions according to his priorities. None of the decisions on any parts of the expenditure within the Scottish block have yet been finalised. Therefore, this is merely one other part of the series of decisions that are being taken by my hon. Friends and myself within the Scottish block.
May I confirm what my right hon. Friend the Leader of the House said? I shall be making a statement to the

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House when the full implications of the whole Scottish block — [Interruption.] Perhaps the House would be good enough to hear me out. It is an important point. When all the decisions are taken about all aspects of the Scottish block, which is imminent, and when all the decisions are clarified, I shall be making a statement upon which hon. Members from Scotland or anywhere else will be able to cross-question me. At this moment, quite irrespective of any changes that are taking place today as a result of my right hon. Friend's statement, there is no way in which I am in a position to give any of the figures for any of the expenditure within the Scottish block. I should be grateful if the matter could be dealt with in the normal way.
Mr. Dewar: On a point of order, Mr. Speaker. I want to be clear, through you, what the Secretary of State is saying. When the Leader of the House rose to say that there would be a statement, the timing of which would be agreed through the usual channels, I understood that that would be a statement about student grants in Scotland. The Secretary of State now seems to be saying something rather different. He seems to be saying that at some future date, probably some way ahead, there will be a general statement about the overall public expenditure system in Scotland, including education, social work, housing and everything else. Somewhere subsumed in that will be the information about student grants parallel to that which has been given by the Secretary of State for Education and Science.
That is not satisfactory. We want a separate statement, parallelling the English one, giving us the information and the figure equivalent to the £21 million in England. Presumably that is known now and we do not want to wait until some future date.
Secondly, to save a further intervention, it would be helpful to the House and to the dignity of his office, if the Secretary of State for Scotland were to say that, with hindsight at least, he regrets the way that question No. 4 was dealt with. He gave a clear impression that the details requested would be supplied during the course of this afternoon's statement. That, as the Secretary of State for Education and Science made clear, was not the case. It is unfortunate that that impression was given and I hope that the Secretary of State for Scotland will join me in regretting that.
Mr. Younger: Further to that point of order, Mr. Speaker. Of course I am sorry if any misleading impression was given by me or anyone else. I did not imagine that the right hon. Member for Tweeddale, Ettrick and Lauderdale (Mr. Steel) would be expecting anything in detail until the Scottish public expenditure was settled. [Interruption.] The reason for that is perfectly simple. Whatever changes have to be made could affect many different parts of the Scottish block. Therefore, by the time I am able to make a statement about this precise aspect, all the other aspects must be decided too. They have nearly been decided and I do not expect a statement to be long delayed. But when I make a statement, of whatever sort, it will have to cover all aspects of the Scottish block because they are all interdependent.
Several Hon. Members rose—
Mr. Speaker: Order. The House has heard the Secretary of State. We have an important debate before us—
Mr. Eadie: I am demanding my right to put a point of order.
Mr. Speaker: Order. We have an important debate before us. Other hon. Members have their rights as well. If the hon. Gentleman persists in raising points of order all afternoon, I cannot stop him. Nevertheless, that is unfair to his colleagues. I shall take his point of order.
Mr. Eadie: On a point of order, Mr. Speaker. I have never unfairly exercised my rights in this Parliament and I demand to put a point of order in relation to this issue.
We are well aware of how this matter arose. To some extent, hon. Members have rights and are entitled to respect the Chair of this honourable House. I want to put it to you, Mr. Speaker, that occasions can arise when it may be convenient for you to say that you will take points of order afterwards, but there are circumstances when it is right, and in accordance with the good workings of the House, that hon. Members who rise to their feet to make a point of order should be given the right to do so at that time.
I submit today that if that right had been given to hon. Members, the incompetence that the Government have shown today would perhaps not have been as bad as it has been. There may have been some reflections by the Government when hon. Members put the points of order on the Scottish aspect of the cut in student grants and fees.
Therefore, I say in all sincerity that this issue is occupying the minds of my constituents in Midlothian in relation to the whole aspect of university education, and, indeed, all education. We want the Secretary of State to come to the Dispatch Box today to tell us what is happening to student fees and grants. I submit that we have the right to put that point of order to you.
Several Hon. Members rose—
Mr. Speaker: Order. Let me deal with one point of order at a time. It is not a new doctrine that I do not take points of order in the middle of questions. It is long established and my predecessors, as far as I know, have always adopted that practice. It is right and fair to the House.
Mr. Robert Hughes: On a point of order, Mr. Speaker. I accept fully the statement that you made earlier today that it is your duty to protect the rights of all hon. Members, from whatever part of the country they come. I also accept your remarks made slightly later that there is a responsibility on the House and on you to take account of important business that faces the House.
It will be within your recollection that yesterday there was a series of questions to the Secretary of State for Education and Science and during those exchanges the right hon. Gentleman sought, or attempted, to make it clear that he was not shifting his ground in any way. Therefore, if there is any encroachment on the important business of the day, it is precisely because the Secretary of State sought to return within 24 hours to try to change that position.
It is time that the whole subject of statements made by Ministers was re-examined. There was no earthly reason whatever why the right hon. Gentleman had to come to the House today and make the announcement that he did. It

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would have been a courtesy to the House, to the Secretary of State for Scotland and to every hon. Member if there had been a period of calm and silence. That would have allowed consultation to take place so that the right hon. Gentleman did not place the Secretary of State for Scotland in the invidious and embarrassing position in which he has been placed today.
Indeed, Mr. Speaker, the Secretary of State for Education and Science has put you in an extremely embarrassing position. He has also put me in an embarrassing position. I am not one of those who constantly harps on about the specific and special rights of Scottish Members. But I feel strongly that, given the sequence of events — the Secretary of State for Education and Science answering questions yesterday, refusing to make an announcement, followed, 24 hours later, by questions to the Secretary of State for Scotland when a specific question dealt with the issue on which the Secretary of State for Education and Science was to make his statement—it beggars belief that we should not have had proper answers from the Secretary of State for Scotland.
Nothing that the Secretary of State for Scotland says about the difficulties that he is facing in announcing his programme can make up for the fact that, if he had said earlier, during Scottish questions, that he would be making a statement after the Secretary of State for Education and Science—even if he had said then what he said later about the need to examine the budget—that might have been acceptable. But the contempt that the Secretaries of State for Education and Science and for Scotland have for the House must be ended. You, Mr. Speaker, must look seriously at the issue of statements being made. Although "Erskine May" says that a Minister does not require either your permission or that of the House, that needs to be looked at so that we can judge whether our rights are being eroded in an insidious way.
Several Hon. Members rose—
Mr. Speaker: Order. These are not matters for me. If the hon. Gentleman feels that the system is wrong, he has a right, even an obligation, to take the matter to the Procedure Committee. That is where such matters are looked at. The House decides. I am elected by the House to keep the rules as they are. That is all that I can do.
Mr. George Foulkes: Further to that point of order, Mr. Speaker. I wish to seek your guidance. Earlier this afternoon the Secretary of State for Scotland said that no decision had been made about any part of the block grant allocation for Scotland. However, the Secretary of State for Education and Science said that the Secretary of State for Scotland had decided similarly on the question of student awards. That implies that a decision has been made. How can I find out which Secretary of State is misleading the House?
Mr. Speaker: I cannot advise on tactics.
Mr. Tom Clarke: Like my hon. Friends, I have no desire to be disrespectful to you, Mr. Speaker. I know that you will understand that. However, you will recall that hon. Members have an interest in this serious subject. My own interest was shown when you called me to ask a supplementary question to the question tabled by the right hon. Member for Tweeddale, Ettrick
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and Lauderdale (Mr. Steel). In common with the right hon. Gentleman and others, I failed to get information that is essential for the whole House.
Two important matters emerged. First, after a number of points of order, the Secretary of State for Scotland conceded that he had taken a decision on principle without considering the implications. That is of the utmost importance and deserves debate.
Secondly, you, Mr. Speaker, are right to say that you have a responsibility to the whole House. Equally, the House has a responsibility to you. The Government Front Bench has neglected that responsibility by presenting such a shambles to the House. We owe it to you to offer the apology to which you are entitled.
Mr. Ewing: Further to the point of order, Mr. Speaker. I was involved in question No. 4 tabled by the leader of the Liberal party. I asked the Secretary of State why he did not intend to make a statement similar to that which was to be made by the Secretary of State for Education and Science. The record will show tomorrow that the Secretary of State said that I had read far too many whodunnit magazines and that, on this issue, he never made any separate statements. He said that when his right hon. Friend spoke about education he spoke for all education Ministers. The record will show that.
The Secretary of State for Scotland put the Secretary of State for Education and Science in an embarrassing position. The right hon. Gentleman had enough difficulties today without the Secretary of State for Scotland causing him more. The Secretary of State for Education and Science was in no position to fulfil the statement by the Secretary of State for Scotland.
When the Secretary of State for Scotland said that the Secretary of State for Education and Science would speak on behalf of the Scottish Office he knew that to be untrue. We are told that we misunderstood, but the Secretary of State for Scotland knew that what he said was untrue. I have a respect for him, but he has a duty to his office and to the House to withdraw the answer to the question so that when the record is produced it will be correct.
Several Hon. Members rose—
Mr. Speaker: I can see several hon. Members who are anxious to take part in the next debate, but that will be made difficult if we persist with points of order. I cannot take the matter further this afternoon. The sensible course would be for the matter to be discussed through the usual channels. No doubt an arrangement will be made for a statement to be made to the House by the Secretary of State for Scotland. We shall then see what he has to say. I cannot take the matter further.
Mr. Dewar: Further to the point of order, Mr. Speaker. I accept that this is a matter for the usual channels. However, I should like to say publicly that it is important for the effectiveness of the Scottish dimension within the United Kingdom parliamentary system for the statement, when it comes, not to be an overall wrap-up of public expenditure in Scotland in which the debate about student grants will be lost. We must have an opportunity soon to discuss the specific issue on the Floor of the House. If we receive a sympathetic response, I shall be happy to leave the matter there.
Several Hon. Members rose—
Mr. Speaker: I shall hear the shadow Leader of the House.
Mr. Alan Williams: On a point of order, Mr. Speaker. I am sorry, but it seems that two completely separate issues are involved. The first is the issue of a statement on student grants in Scotland which, as has been said, can be dealt with through the usual channels. The second is that a Minister has misled the House. When that happens is it not normal for the Minister to come to the House to make a personal statement? In addition to the statement about student grants in Scotland we must consider good behaviour in the House of Commons. That means that tomorrow at the start of business the Secretary of State for Scotland should come here and make a personal statement based on what the official record shows.
Mr. Speaker: As the hon. Member for Glasgow, Garscadden (Mr. Dewar) said, we cannot take the matter further this afternoon.
Mr. Denis Howell: On a point of order, Mr. Speaker. My point of order is about points of order. I agree that the House should consider your position. You were put in an intolerable position by the Government's inept handling of the issue. During exchanges you rightly said that Mr. Speaker can exercise discretion about when to take points of order. That is in accordance with precedent and with "Erskine May", which also says clearly that if an hon. Member has a point of order it is his duty to raise it immediately, if necessary interrupting a right hon. or hon. Member. More thought should be given to the position when contentious statements touching on principles are involved.
You suggest, Mr. Speaker, that the Procedure Committee might be appropriate, but will you consider the conflicting difficulties in which you are placed? The usual channels will try to assist, particularly to ensure that hon. Members have adequate notice of which statements are to be made so that they can assess their possible effect on other Departments.
Mr. Andrew Faulds: On a point of order, Mr. Speaker. You made reference earlier—the right hon. Member for Birmingham, Small Heath (Mr. Howell) also raised the point—to the practice that has developed of points of order being postponed until later. Is it not the case that this was an innovation of Speaker Thomas and yet a further illustration of his many failures of judgment? May I ask you, Sir, to take this matter back very seriously and consider whether the traditional practice of accepting a point of order when it is put and allowing it should be resumed for the good health and conduct of the business of the House?
Mr. Speaker: I think that it is a wise practice to take points of order at the end of questions. If the right hon. Member for Birmingham, Small Heath (Mr. Howell) and the hon. Member for Warley, East (Mr. Faulds) thought this matter through, they would find that we would get through fewer questions if points of order were raised in the middle of questions. The hon. Member for Warley, East will know, because he has done this himself, that most points of order arise because the hon. Member did not receive the answer he expected.

Parliamentary Questions
5.41 pm
Mr. Dennis Skinner: On a different point of order Mr. Speaker. As you know, one of your awesome tasks is to oversee questions that are tabled by hon. Members. Sometimes we are in difficulty about the aspects on which we can table questions. The subject of taxation causes difficulty, because hon. Members can ask questions only about general taxation matters and not about individual aspects. I seek your guidance on the important principle that is at stake.
In recent days there has been much discussion about giving aid to Ethiopia. As a result, a group of young people got together and made an important record. That record is selling by the thousands and is making a tremendous amount of money to go towards aid for Ethiopia. I should like to table a question to ascertain the precise amount of value added tax that will accrue from the sale of that record and go into the Government's coffers. Many of us believe that the money the Government are taking from that charitable action should to to Ethiopia, instead of to the Chancellor of the Exchequer.
I wish to ask a question not about general VAT but about the precise amount of money that the Government are receiving through VAT from the sale of the record so that I can demand that the Government send to the Ethiopians pound for pound the money they have received. I want to find out about the money that those young people have made from producing a record, some of which goes to the Chancellor.
Mr. Speaker: If the hon. Member tables that question, I shall look into it. Perhaps he will send me the record.
Mr. John Home Robertson: On a point of order, Mr. Speaker. At any point during the past hour or so, has it crossed your mind that there is great merit in the argument for establishing a Scottish assembly?
Mr. Speaker: That frequently crosses my mind.

Teachers (Pay)
5.42 pm
Mr. Malcolm Bruce: I beg to ask leave to move the Adjournment of the House, under Standing Order No. 10, for the purpose of discussing a specific and important matter that should have urgent consideration, namely,
"the strike today of Scottish teachers over the failure of the Secretary of State for Scotland to grant an independent pay review."
This matter is urgent because this is a major national strike involving more than 30,000 teachers — 80 per cent. of the members of the Educational Institute of Scotland. The matter is specific because that strike is disrupting the education of many thousands of pupils throughout Scotland. That is a regrettable development. The matter is also specific because the Government could do something about the problem by granting teachers an independent pay review.
This matter is urgent because the lack of independent pay review is leading to the disruption of the programme to develop standard grade examinations in Scotland. It is likely that the whole system could collapse in the next year or two and that students will be unable to take those examinations in 1986. The matter is urgent also because, already, many dedicated teachers are leaving, or contemplating leaving, the profession, specifically science and maths teachers who are in most need. They are leaving because they can receive better pay in other sectors.
I therefore urge you, Mr. Speaker, to give me leave to move the Adjournment of the House so that this matter can be debated and we can impress upon the Government the need to take positive action to grant an independent pay review and allow Scottish teachers to get on with the job they want to do—that of teaching our children.
Mr. Speaker: The hon. Member asks leave to move the Adjournment of the House for the purpose of discussing a specific and important matter that he thinks should have urgent consideration, namely,
"the strike today of Scottish teachers over the failure of the Secretary of State for Scotland to grant an independent pay review."
I have listened carefully to the hon. Member, but I regret to say that I do not consider that the matter he has raised is appropriate for discussion under Standing Order No. 10 and, therefore, I cannot submit his application to the House.

BILLS PRESENTED
  INTOXICATING SUBSTANCES (SUPPLY)
  Mr. Neville Trotter, supported by Mr. Alex Carlile, Sir Geoffrey Finsberg, Mr. Marcus Fox, Mr. Roy Galley, Mr. Harry Greenway, Mr. Michael Hirst, Mr. Ron Lewis, Mr. Christopher Murphy, Mr. Reg Prentice, and Mr. Tom Torney, presented a Bill to prohibit the supply to persons under the age of eighteen substances which may cause intoxication if inhaled: And the same was read the First time; and ordered to be read a Second time upon Friday 18 January and to be printed. [Bill 19.]
  SEXUAL OFFENCES
  Miss Janet Fookes, supported by Mr. Charles Irving, Mr. Tom Cox, Mr. Anthony Beaumont-Dark, Mr. Robert Parry, Mr. Christopher Chope, Mr. Tony Lloyd, and Mrs. Elaine Kellett-Bowman, presented a Bill to make, as respects England and Wales, provision for penalising in certain circumstances the soliciting of women for sexual purposes by men, and to increase the penalties under the Sexual Offences Act 1956 for certain offences against women: And the same was read the First time; and ordered to be read a Second time upon Friday 25 January and to be printed. [Bill 20.]
  LOCAL GOVERNMENT (ACCESS TO INFORMATION)
  Mr. Robin Squire, supported by Mr. W. Benyon, Mr. Marcus Fox, Sir Bernard Braine, Mr. Jonathan Aitken, Mr. Charles Irving, Mr. Jim Lester, Mr. Allan Roberts, Mr. Alf Dubs, Mr. Clive Soley, Mr. Simon Hughes, and Mr. Michael Hancock, presented a Bill to provide for greater public access to local authority meetings, reports and documents subject to specified confidentiality provisions; to give local authorities duties to publish certain information; and for related purposes: And the same was read the First time; and ordered to he read a Second time upon Friday 1 February and to be printed. [Bill 21.]
  WILDLIFE AND COUNTRYSIDE (AMENDMENT)
  Dr. David Clark, supported by Mr. Andrew F. Bennett, Mr. Jim Callaghan, Mr. D. N. Campbell-Savours, Mr. John Cartwright, Mr. Sydney Chapman, Mr. Ron Davies, Mr. Peter Hardy, Mr. Mark Hughes, Mr. Stephen Ross, and Mr. Chris Smith, presented a Bill to amend the Wildlife and Countryside Act 1981: And the same was read the First time; and ordered to be read a Second time upon Friday 8 February and to be printed. [Bill 22.]
  UNBORN CHILDREN (PROTECTION)
  Mr. J. Enoch Powell, supported by Sir Bernard Braine, Mr. Donald Stewart, Mr. A. J. Beith, Rev. Martin Smyth, Mr. Anthony Beaumont-Dark, Mr. Ian Campbell, Sir Gerard Vaughan, Mr. James White, and Mrs. Ann Winterton, presented a Bill to make provision relating to human embryos produced by in vitro fertilisation, and for connected purposes: And the same was read the First time; and ordered to be read a Second time upon Friday 15 February and to be printed. [Bill 23.]
  COPYRIGHT (COMPUTER SOFTWARE) AMENDMENT
  Mr. William Powell, supported by Mr. Nicholas Lyell, Mr. Nicholas Baker, Mr. Bryan Gould, Mr. David Madel, Mr. Richard Shepherd, Mr. Nigel Forman, and Mr. Patrick Nicholls, presented a Bill to amend the Copyright Act 1956 so as to provide new penalties for offences relating to infringing copies of computer programmes; to provide for the issue and execution of search warrants in relation to such offences; and to confirm that copyright subsists in computer programmes: And the same was read the First time; and ordered to be read a Second time upon Friday 22 February and to be printed. [Bill 24.]
  SMALL BUSINESS
  Mr. Michael Grylls, supported by Mr. David Howell, Mr. William Cash, Mr. Michael Fallon, Mr. Richard Wainwright, Mr. Spencer Batiste, Mr. Neil Hamilton, Mr. John Browne, Mr. Andrew Rowe, Mr. Phillip Oppenheim, and Sir Philip Goodhart, presented a Bill to make further provision for, and to amend the law relating to, small businesses: And the same was read the First time; and ordered to be read a Second time upon Friday 18 January and to be printed. [Bill 25.]
  SPORTS FIELDS AND RECREATIONAL FACILITIES
  Mr. John Carlisle, supported by Mr. Nicholas Soames, Mr. Colin Moynihan, Mr. Richard Ryder, Mr. Robert Atkins, Mr. Martin Brandon-Bravo, Mr. Tim Brinton, Mr. Jim Lester, Mr. David Ashby, Mr. Jim Spicer, Mr. Matthew Parris, and Mr. Nicholas Winterton, presented a Bill to enable the Government to direct public bodies and other owners of recreational facilities to inform them of any proposed sale or change of use of sports fields or facilities, to monitor annually the loss of playing fields and facilities, and to encourage local authorities and others to offer the use of their sports facilities to voluntary sports bodies and community groups: And the same was read the First time; and ordered to be read a Second time upon Friday 25 January and to be printed. [Bill 26.]
  WATER AUTHORITIES (MEETINGS)
  Mr. Gerald Bermingham, supported by Mr. Marcus Fox, Mr. Derek Fatchett, Mr. Clement Freud, Mr. Michael Knowles, Mr. Robin Corbett, Mr. Matthew Parris, Mr. Frank Haynes, Mr. John Ryman, Mr. Allan Rogers, Mr. Robert Rhodes James, and Mr. Anthony Beaumont-Dark, presented a Bill to apply the provisions of the Public Bodies (Admission to Meetings) Act 1960, relating to the admission of the press and other members of the public, to meetings of water authorities, and for related purposes: And the same was read the First time; and ordered to be read a Second time upon Friday 1 February and to be printed. [Bill 27.]
  EDUCATION (SCHOOL BUDGETS)
  Mr. David Madel, supported by Mr. Gerald Bowden, Mr. David Knox, Mr. Michael Stern, Mr. Alan Haselhurst, Mr. Harry Greenway, Mr. John Carlisle, Mr. Robert Hicks, Mr. Peter Bruinvels, Mr. Graham Bright, and Mr. Hugh Dykes, presented a Bill to require local education authorities to publish annually certain financial information relating to maintained, aided and special agreement schools; to require the governing bodies of aided or special agreement schools to publish accounts of income and expenditure; and for connected purposes: And the same was read the First time; and ordered to be read a Second time upon Friday 8 February and to be printed. [Bill 28.]
  CHARTER TRUSTEES
  Mr. Charles Morrison, supported by Mr. Douglas Hogg, Mr. Robert Key, Mr. Richard Alexander, Mr. Michael Howard, and Mr. Jonathan Aitken, presented a Bill to provide for the continuation of the charter trustees of any city or town and for the preservation of their powers and of the privileges and rights of the inhabitants of their area upon that area becoming comprised in a borough: And the same was read the First time; and ordered to be read a Second time upon Friday 15 February and to be printed. [Bill 29.]
  HOSPITAL COMPLAINTS PROCEDURE
  Mr. Michael McNair-Wilson, supported by Mr. Patrick McNair-Wilson, Mr. Steve Norris, and Mrs. Renée Short, presented a Bill to oblige Regional Health Authorities to establish a complaints procedure for hospital patients and to draw such a procedure to the attention of patients: And the same was read the First time; and ordered to be read a Second time upon Friday 22 February and to be printed. [Bill 30.]
  CONTROLLED DRUGS (PENALTIES)
  Mr. Keith Raffan, supported by Mr. Mark Carlisle, Sir Edward Gardner, Mr. Teddy Taylor, Mr. John Wheeler, Mr. Frank Field, Mr. David Alton, Mr. Harold McCusker, Mr. Dafydd Wigley, Mr. John Cartwright, Mr. Roland Boyes, and Mr. Ron Davies, presented a Bill to increase the penalties for certain offences relating to controlled drugs within the meaning of the Misuse of Drugs Act 1971: And the same was read the First time; and ordered to be read a Second time upon Friday 1 February and to be printed. [Bill 31.]
  NORTHERN IRELAND (TERMINATION OF JURISDICTION)
  Mr. Ernie Roberts, supported by Mr. Tony Benn, Miss Joan Maynard, Mr. Bob Clay, Mr. Derek Fatchett, Mr. Dennis Canavan, Mr. Dennis Skinner, Ms. Clare Short, Mr. Jeremy Corbyn and Mr. Robert Parry, presented a Bill to make provision with respect to the termination of Her Majesty's jursidiction in Northern Ireland; and for purposes connected therewith: And the same was read the First time; and ordered to be read a Second time upon Friday 15 February and to be printed. [Bill 32.]

  MOTOR-CYCLE CRASH HELMETS (RESTRICTION OF LIABILITY)
  Mr. Ivor Stanbrook, presented a Bill to exempt persons other than the actual offender from criminal liability in

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  resepct of the offences of driving or riding on a motorcycle in contravention of regulations requiring the wearing of crash helmets: And the same was read the First time; and ordered to be read a Second time upon Friday 18 January and to be printed. [Bill 33.]

  FABRIC ORIGIN MARKING
  Mr. Geoff Lawler, supported by Mr. Gary Waller, Mr. Richard Wainwright, Mr. Tom Torney, Mr. Nicholas Winterton, Mr. James Lamond, Mr. Cyril Smith, Mr. Barry Sheerman, Mr. Peter Thurnham, Mr. Ken Hargreaves, and Mr. Alastair Burt, presented a Bill to require the indication of country of origin for woven fabrics in outer wear textile products: And the same was read the First time; and ordered to be read a Second time upon Friday 18 January and to be printed. [Bill 34.]
  MINIMUM WAGES ETC.
  Mr. Dave Nellist, supported by Mr. Terry Fields, Mr. Eddie Loyden, Mr. Dennis Skinner, Mr. Dennis Canavan, Mr. David Winnick, Mr. Gerald Bermingham, Mr. Terry Lewis, Mr. Brian Sedgemore, Mr. Max Madden, Mr. Roland Boyes and Mr. Robert Litherland, presented a Bill to provide for the setting and enforcement of statutory minimums below which wages and allowances shall not fall with respect to different classes of employees and trainees; and for connected purposes: And the same was read the First time; and ordered to be read a Second time upon Friday 22 February and to be printed. [Bill 35.]

  COMPANIES (POLITICAL DONATIONS)
  Mr. Derek Fatchett, supported by Mr. Ian Mikardo, Ms. Jo Richardson, Mr. John Maxton, Mr. Doug Hoyle,
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  Mr. Ron Davies, Mr. William O'Brien, Mr. Robert N. Wareing, and Mr. Chris Smith, presented a Bill to require ballots of shareholders of companies incorporated under the Companies Act 1948 in respect of proposed donations for political purposes; to define political purposes under this Act; to require political funds to be established for the payment of such donations; to specify the qualfications for receipt of such donations; and for purposes connected therewith: And the same was read the First time; and ordered to be read a Second time upon Friday 22 February and to be printed. [Bill 36.]

  GAMING (BINGO)
  Mr. Peter Fry, supported by Mr. Fergus Montgomery, Mr. Bernard Conlan, Mr. John Forrester, Mrs. Ann Winterton, Mr. Barry Porter, Mr. Eldon Griffiths, Mr. Sydney Bidwell, and Mr. Michael Moms, presented a Bill to amend the Gaming Act 1968 in respect of games which are played on bingo club premises and in which the players may be on different bingo club premises: And the same was read the First time; and ordered to be read a Second time upon Friday 22 February and to be printed. [Bill 37.]
  ROAD TRAFFIC (PRODUCTION OF DOCUMENTS)
  Mr. Tim Smith, supported by Mr. Geoff Lawler, Mr. Robert Kilroy-Silk, Mr. Andrew MacKay, Mr. Mark Fisher, Mr. Tim Brinton, Mr. David Alton, Mr. Tony Blair, Mr. Tony Favell, and Mr. Gerald Bermingham, presented a Bill to amend certain provisions relating to the production of documents under the Road Traffic Act 1972 and the Transport Act 1982: And the same was read the First time; and ordered to be read a Second time upon Friday 18 January and to be printed. [Bill 38.]

Hong Kong
Mr. Speaker: This important debate on the Hong Kong agreement has had a rather late start, for reasons that the House well knows. I must announce to the House that I propose to operate the 10 minute limit on speeches between 7 pm and 8.50 pm. I hope that all hon. Members will bear that limitation in mind when making their speeches, because, as I said, this debate has had a late start and there is great pressure from hon. Members to participate.
5.49 pm
The Secretary of State for Foreign and Commonwealth Affairs (Sir Geoffrey Howe): I beg to move:
That this House, having considered the views of the people of Hong Kong as set out in the reports of the Assessment Office and the Independent Monitoring Team published in White Paper, Cmnd. 9407, approves Her Majesty's Government's intention to sign the agreement on the future of Hong Kong negotiated with the Chinese Government, which was published in White Paper, Cmnd. 9352.
The draft agreement which the motion commends for the approval of the House is a document of historic importance. It has a significance that goes well beyond Hong Kong itself. But it is with the unique and thriving community of Hong Kong that the House is rightly concerned today.
Hong Kong owes its success to the spirit of free enterprise and resourcefulness that has for generations been displayed by the people of Hong Kong of all races. It is that spirit that has created Hong Kong's unique way of life, and it is the preservation of that way of life, its rights and freedoms, and the prosperity and stability on which it has been built, that has been our firm objective. We have sought that throughout all the work that has produced the agreement that is the subject of today's debate. In that work, I have been most grateful to the official Opposition and to hon. Members in all parts of the House for the understanding and support which they have given me in a task which I have been able to feel I have been undertaking on behalf of the whole House.
The agreement that has resulted must, of course, be judged against the background of the historical realities that created the problem with which we are concerned today.
In May 1898, the second convention of Peking was signed, in Peking, by the British Minister resident there, Sir Claud MacDonald. I cannot believe that at the time when he signed that document he had any idea of the complexity of the problems that he would be bequeathing to the present generation.
Under that convention, the area which later became known as the New Territories of Hong Kong was leased to Britain for a period of 99 years. Those territories were added to the relatively small areas of Kowloon and Hong Kong Island, which had been ceded to Britain during the previous half-century. That 1898 lease covers 92 per cent. of the land territory of Hong Kong as it is today. It expires, of course, on 30 June 1997. On that date, the New Territories will revert to China.
The ceded territories, the other 8 per cent., have, over the past 87 years, become completely integrated with the leased territories. On their own, they would not be viable. It is those circumstances that compel the need for a specific agreement at this time.
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Yet the need for accommodation with China is not new to Hong Kong. Throughout most of its existence, Hong Kong has been dependent on co-operation with its giant neighbour. In recent years that has developed into a strong and complex relationship.
That is the background to the long— and at times very difficult—negotiations that have been taking place over the past two years. They have had to be conducted in confidence. I know that the need for confidentiality has been frustrating—for Parliament and, of course, much more so for the people of Hong Kong. Both have shown great understanding, and both, I hope, will take some comfort from my judgment that confidentiality was absolutely essential to the success of the negotiations.
I should like to give warm thanks to the members of the Hong Kong Executive Council, who played a vital part in advising the Government, through the Governor, throughout the negotiations. I give thanks too to the members of the Legislative Council. The confidentiality of the negotiations posed particular problems for them.
The Governor of Hong Kong has borne the dual burden of continuing responsibility for the government of Hong Kong and of continuous involvement in the negotiations. If I may be allowed to say so, he has borne that heavy burden with great distinction.
Our Ambassadors at Peking, successively Sir Percy Cradock and Sir Richard Evans, have led the negotiating team with great skill. They and all the officials involved, from the Hong Kong Government as well as from our own diplomatic service, well deserve the tribute paid to them by the Far Eastern Economic Review, which spoke of the "sheer professionalism" of the British team. I have no doubt that the whole House will wish to join me in thanking and congratulating them all.
Throughout all our work, we have aimed, of course, to reach agreement on arrangements which would be acceptable to the people of Hong Kong; arrangements that would enable them, and the international community, to have confidence in the future of the territory.
From the outset it was clear that such arrangements would also need to be acceptable to the Chinese Government. That is just another reflection of the fact that Hong Kong could never have become the place that it is today without establishing a practical relationship with the People's Republic of China.
In the early part of the negotiations we looked for ways which might allow a British Administration to continue in Hong Kong after 1997—on the basis that Britain would recognise China's sovereignty over the whole of Hong Kong. That course would have meant the minimum of change. The people of Hong Kong certainly expected that we would, as a first step, see if that was possible. So we tried, over 12 months of negotiation. But it became quite clear that a solution along those lines would not be acceptable to the Chinese Government, and that if we had persisted in seeking it, the talks would have broken down. That would not have altered the fact that 92 per cent. of the territory would revert to China, under the lease, in 1997. But in that way it would have done so without any agreement on its future.
We concluded that a breakdown in negotiations, with all the uncertainties that that would have created, could not in the long view offer satisfactory prospects for the people of Hong Kong, and for is future stability and prosperity.
We therefore decided, with the agreement of the Governor and of the Executive Council of Hong Kong, to

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seek to negotiate arrangements under which British administration in Hong Kong would cease after 1997 and Hong Kong, though becoming a part of China, would retain her distinctive way of life as a special administrative region of China.
The draft agreement before the House today is the result of the negotiations which were brought to a conclusion on that basis. If the motion on the Order Paper is carried, my right hon. Friend the Prime Minister and I will travel to Peking later this month to sign the agreement—and we shall, of course, be going as well to Hong Kong. This will be my third visit to Peking in nine months. It will provide an opportunity to renew the close working relationship that we have established with our Chinese colleagues. It must be said that this agreement would not have been possible without the vision and realism which has characterised the approach of the Government of the People's Republic of China to these negotiations. I should like to express my personal appreciation of the part played by my opposite number, Mr. Wu Xueqian, in bringing our negotiations to a successful conclusion.
Following signature, we shall bring forward legislation early next year to provide for termination of sovereignty in 1997, and to provide powers to make other changes to the law, including the nationality law, which will be necessary in connection with the agreement and termination of sovereignty.
The agreement is both comprehensive and detailed. Since it was published on 26 September, hon. Members will have had more than two months to study it. I described its main provisions in my statement of 25 October. Today I want only to stress a few of its significant features.
First, the joint declaration and its annexes constitute a legally binding international agreement. As the Chinese Foreign Minister recently told the Standing Committee of the National People's Congress in Peking, the joint declaration is a form of international treaty; it has the same force in international law and is legally binding.
Second, the policies set out in the agreement will, under the terms of the agreement, be stipulated in a basic law which will be passed by the National People's Congress of China and which will establish the special constitutional status of the Hong Kong special administrative region. The agreement provides that these policies will remain unchanged for 50 years.
The content of the basic law, and the arrangements for its drafting, are rightly of great interest to the people of Hong Kong. They are of crucial importance.
The law will be passed by the Chinese National People's Congress under the powers conferred on it by articles 31 and 62 of the Chinese constitution. Those articles provide the basis for special administrative regions with systems different from those in other parts of China.
It is, of course, the Chinese who must undertake the drafting of the basic law. But the joint declaration states that the basic policies for Hong Kong set out in the joint declaration itself, and elaborated in annex 1, will be stipulated in the basic law. The agreement thus provides clear guidelines for the drafting of that law.
I know that the Chinese leaders understand the great importance of this. I am confident, too, that they will have noted the hope, which has been widely expressed in recent weeks, that the people of Hong Kong will be fully consulted about the drafting of the law.
The Chinese Government have indicated that the people of Hong Kong will be consulted, though the exact form of
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that consultation has yet to be made clear. I welcome that indication. In that and in other respects, we stand ready to extend to the Chinese our fullest co-operation.
The third point I want to stress about the agreement is that it provides sufficient detail, in the many areas it covers, to give confidence, both internationally as well as in Hong Kong itself, that the future is a secure one. It provides a high level of autonomy for Hong Kong, as a special administrative region of the People's Republic of China. It provides a firm guarantee that Socialist policies pursued on the mainland will not be practised in Hong Kong. It provides for the administration of Hong Kong to be in local hands, and for the Executive to be accountable to an elected legislature. It provides for judicial power to be exercised independently and for a public service in which appointment and promotion will depend on qualifications, experience and ability.
The preservation of the legal system and courts to which Hong Kong is accustomed is fundamental to the continuation of Hong Kong's way of life. The agreement provides for this. Appeals to the Privy Council will cease. Instead there will be a Court of Final Appeal in Hong Kong.
The English language will continue to have equal validity with Chinese in the courts. The work of translating the laws of Hong Kong into Chinese is now going ahead.
The agreement provides for Hong Kong to continue as a world commercial, financial and communications centre. It will be responsible for conducting its own external trade, have its own freely convertible currency, and enjoy free flow of capital without exchange control.
Although the Central People's Government in China will be responsible for its external relations, Hong Kong will have considerable autonomy in conducting relations with other countries in many important areas. There are arrangements permitting Hong Kong to continue its participation in the GATT and other international trade agreements, and to participate in relevant international organisations. There are provisions for Hong Kong to continue to be an important centre for shipping and civil aviation.
There are full and explicit provisions for the preservation of human rights and freedoms, including those specified in the international covenants on civil and political and economic, social and cultural rights.
Finally, secure arrangements have been made both for the recognition of existing land leases after 1997, and for the extension of leases expiring before 1997, and for the granting of new leases for terms of up to 50 years beyond 1997. Those are only the broad outline. There is much more detail in the agreement.
So far, I have dealt with the future after 1997, but the next 12 years are also crucial for Hong Kong.
Mr. Eric Deakins: Whose task will it be to secure international recognition of this agreement and its terms in the period after 1997? Is it for China or for Britain, or will it be a combination of both? If it is both, has an adequate machinery been set up for that purpose?
Sir Geoffrey Howe: There are various aspects of that question. If the hon. Gentleman is referring to the need to secure continued recognition of Hong Kong's place in the GATT and other international arrangements, that is something on which both countries will co-operate. That is specifically provided for as one of the objectives of the joint liaison group, to which I shall refer in a moment.

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The next 12 years are also crucial for Hong Kong. In order to ensure the success of this enterprise, and to make sure that the provisions of the agreement are put into practice—such as the one that I have just mentioned—there will be a need for close co-operation between Britain and China in the period between now and 1997, especially in the later years. The joint liaison group which is provided for by the agreement is the best means of achieving this and of avoiding abrupt changes in 1997 which might disturb the continuity of life at that time.
The joint liaison group will be charged with the tasks of consulting on the implementation of the joint declaration and of discussing matters relating to the smooth transfer of government in 1997, as well as exchanging information. It will continue in being until the year 2000.
It is our firm intention that the group should carry out its functions so as to build confidence between the British and Chinese Governments on all matters relating to the agreement, as well as building confidence among the people of Hong Kong. We shall give the group our full co-operation to that end, because I regard its work as of the highest importance.
Mr. Alfred Morris: The right hon. and learned Gentleman will be aware that some people in Hong Kong are concerned that they could become stateless persons. Can he say anything on that important matter?
Sir Geoffrey Howe: That could arise in certain cases. It will be dealt with so as to ensure that statelessness does not happen. This matter will be included in the provisions of the Bill that we shall be introducing in the new year. I am glad to have had the opportunity of dealing with that point.
Mr. David Howell: If the joint liaison group is to play a leading part in underpinning the international status of the special administrative region after 1997, will people from Hong Kong be among its members?
Sir Geoffrey Howe: I was about to come to that point. I appreciate my right hon. Friend's concern, but perhaps he will allow me to deal with it at the appropriate point in my speech.
We took pains to ensure that there could be no possible ambiguity about what the group's functions will be. In no sense will it be a shadow Government. The agreement makes it plain that, in Chinese phraseology, the group shall be an organ of liaison, not an organ of power, and that it shall take no part in the administration of Hong Kong. The agreement also states explicitly that Britain will remain fully responsible for the administration of Hong Kong until 1997. I assure the House of the Government's wholehearted commitment to the full exercise of their responsibilities throughout that period.
Of course, the interests of Hong Kong will need to be properly represented on the joint liaison group. The exact composition of the group has yet to be determined, but I should like to make it clear that the British delegation will include officials from the Hong Kong Government. There will continue to be the fullest consultation with the Executive Council and with other representatives of the
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people of Hong Kong. It is important that the group should be able to enjoy the kind of confidence that is essential if it is to carry out its work properly.
Mr. Russell Johnston: Is the right hon. and learned Gentleman saying that while officials of the Hong Kong Government will serve on the British side of the joint liaison group, there will be no unofficial representatives?
Sir Geoffrey Howe: Annex II to the joint declaration on page 25 of the White Paper makes it clear that the joint liaison group shall enjoy diplomatic privileges. It is a diplomatic group. There is provision for the appointment of representatives of that kind to the group. However, as the group carries out its work — no doubt working through a variety of methods as time goes by — it is important that there is full representation of the viewpoint of the Hong Kong people. This point has been raised with me in a number of places. It is important that it takes sufficient account of the view of the Hong Kong people, as I hope we have been able to do during our negotiations thus far. As the group's work intensifies, that will be important.
Mr. Robert AdleyIs my right hon. and learned Friend saying that the joint liaison group will remain throughout the period of 12 years, that in no way will it evolve and that it will remain a purely diplomatic body?
Sir Geoffrey Howe: The agreement provides that the joint liaison group may, by agreement between the two sides, decide to set up specialist sub-groups to deal with particular subjects requiring expert assistance. Members of the joint liaison group and sub-groups can be attended by experts other than members of the joint liaison group. There is provision for a steady development of the working of the group in a practical fashion. The group will remain a body of which officials from either side will be members. That is part of the nature of the group, and those officials will include those from the Hong Kong Government. These matters are precisely set out in the agreement.
Mr. Robert Parry: Regarding representation on the liaison group, the Foreign Secretary will be aware that people from Hong Kong should sit on it. Is that the position?
Sir Geoffrey Howe: I have made it clear that officials of the Hong Kong Government will be members of the group. Beyond that there will be provision for input from the people of Hong Kong. It is plainly important that that should be so.
I have a long speech to make to introduce the matter. My hon. Friend the Minister of State, Foreign and Commonwealth Office will be able to answer these questions in more detail when he replies. However, the point raised by hon. Members relates to a point that I wish to underline.
Our aim throughout the negotiations has been to secure an agreement that would be acceptable to the people of Hong Kong. The Government have known from the start that the House would certainly wish to be satisfied on that point. That is why we decided that an assessment office should be set up in Hong Kong to collate and analyse the views of the people of Hong Kong on the draft agreement. Their report, together with the report of the two monitors whom I appointed to observe their work, was published as

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a White Paper on 29 November. That White Paper is the second document that is before the House today, alongside the draft agreement itself.
The period of assessment in Hong Kong ended on 15 November. It was a considerable achievement that a clear and comprehensive assessment report, as well as the report of the monitoring team, should have been compiled, forwarded and published within two weeks so that it was available to hon. Members within a fortnight at the completion of the process. I should like to thank the head of the assessment office, Mr. Iain MacPherson, the two monitors, Sir Patrick Nairne and Mr. Justice Li, and everyone else concerned for completing their work in time for the House to receive their reports in that way.
I am glad to draw the House's attention to the conclusion of the assessment office, endorsed by the monitors, that
"most of the people in Hong Kong find the draft agreement acceptable".
That is an authoritative, and most important, conclusion. It is based on careful analysis of the whole range of submissions and statements received. All the principal representative bodies in Hong Kong, along with the overwhelming majority of organisations and groups and most of the individuals expressing a view, accepted the draft agreement.
The overall picture from reports by and through the media was found to be one of general acceptance. The same view emerged from various independent opinion surveys. The independent monitors, who watched the work of the assessment office at every stage, confirmed that the office had performed its functions properly and impartially.
By any standards there has been a very vigorous and public debate on the draft agreement since it was published in Hong Kong. Over 3·5 million copies of the agreement were distributed in Hong Kong. The fact that more than 1 million of them were distributed by the New China news agency says something about the relationship within which the assessment was conducted. The assessment office received nearly 2,500 direct submissions, many from organisations representing a huge membership. That compares very favourably with previous exercises of consultation in Hong Kong.
The assessment office took into account 273 reports of discussions, debates, seminars, public speeches and interviews, and the results of 23 opinion surveys of various kinds. By any standards, it was a most thorough exercise in information and consultation.
One point on which a number of people commented in the course of this process was the fact that the draft agreement could not in any case be amended. I want to deal directly with this.
The normal practice in negotiating international agreements is that, once they have been initialled, they are not open to amendment. There is good reason for that. It is that in such cases any attempt to change the draft agreement would risk disturbing the whole delicate balance that had been established. So it was in the present case. That is why we took such trouble to consult the Executive Council at every turn during the negotiations, and that is why I made statements on my two visits to Hong Kong in April and July. In that way, we offered the people of Hong Kong opportunities to comment on the likely shape of the emerging agreement. Characteristically and rightly, they took advantage of those opportunities.
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Subsequently, the assessment exercise has enabled people in Hong Kong to express their anxieties about the completed draft agreement. The report gives a clear account of them. That will be of enormous value to us during the process of implementing the agreement in the years ahead and during the discussions we shall have in the future with the Chinese Government through the joint liaison group. That has been an added advantage of the whole exercise.
I shall now deal with one or two other matters which have attracted attention. The first is nationality. It was one of the most difficult subjects in the negotiations. Because it is also a matter which affects people in their personal lives, it gives rise to very strong emotions. It was not easy to reconcile the conflicting interests involved.
Nevertheless, I believe that what has been achieved is a reasonable answer to the problems. The Chinese Government were not prepared to agree that anyone born in Hong Kong after 1997 should acquire British nationality by virtue of their connection with Hong Kong.
What we have achieved is agreement with the Chinese Government on measures which will mean that those who are British dependent territories citizens before 1 July 1997 can retain during their lifetime an appropriate status, which by definition will be a form of British nationality. As with their present status, that will not entitle them to settle in the United Kingdom. But it will enable them to use a British passport and so to avail themselves, except in Hong Kong and China, of British consular protection.
Those arrangements have been set out in a draft exchange of memoranda which, although they are not part of the agreement itself, were agreed between the two sides and published alongside the agreement.
We were not able to provide that those persons who had been British dependent territories citizens before 1997 should transmit that status to their children for one generation thereafter. Obviously, I recognise that that has been a disappointment to many people in Hong Kong.
Mr. Andrew Faulds: Since that matter is not part of the agreement but is in an annex, would it be open to reconsideration in legislation, which must follow, about British nationality?
Sir Geoffrey Howe: I should not like to give the hon. Gentleman the impression that that could be open to consideration. I know from observations that he and other hon. Members have made in the past that the matter has been regarded, understandably, as being of importance. During negotiations transmissibility was unattainable. The compromise which was arrived at was the best that could be achieved. I have no doubt about that.
The second issue that I want to mention is the stationing of Chinese forces in Hong Kong after 1997. Under the agreement, defence is a matter for the Central People's Government. However, the agreement clearly provides that the special administrative region government will have full responsibility for the maintenance of public order and that forces sent by China for the purpose of defence shall not interfere in its internal affairs. I am confident that the Chinese Government are aware of the sensitivities in Hong Kong on this matter, and that they will act prudently.
I have one final point about the agreement. Some have asked whether there can be any guarantee that the Chinese Government will keep the agreement. There is no such thing as absolute certainty in relations between sovereign

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states. But I believe that we can all have confidence that the agreement will be observed. I say that for the following reasons.
The best guarantee of a country's performance is its own self-interest. The House will need no reminding of the United Kingdom's strong interest in adhering to this agreement and making sure that it works. China has a matching interest. First, China has and is likely to continue to have strong economic reasons for wishing to see Hong Kong remain stable and prosperous. Secondly, and perhaps even more important, the whole course of Chinese reunification, which has always been a central policy of the Chinese Government, is likely to be connected to the success of the agreement.
Both countries have given their commitment to the agreement. Both countries will wish to maintain their reputation by upholding the agreement in the spirit in which it was made.
It would be too much to expect that this document, which has emerged from extremely complex and sometimes difficult negotiations, could provide the whole answer to every problem. In some areas it will be necessary to elaborate the general principles set out in the agreement. One such area is the constitutional arrangements and government structure of the future Hong Kong special administrative region.
In that connection I welcome the White Paper on constitutional development which has just been published by the Hong Kong Government. It provides for substantial development towards representative institutions in the 1985 elections, and for the prospect of further development in this direction following a further review in 1987, which will consider also the question of direct elections. At the same time it rightly avoids sudden and dramatic changes, which could unsettle the very stability that all our efforts are designed to secure.
I have already told the House that we regard the next 12 years as crucial. We shall need to achieve progress in constitutional development. At the same time, we shall need to keep constantly in mind the unique circumstances of Hong Kong, and its future position as a special administrative region of the People's Republic of China.
Mr. Ivor Stanbrook: There is one important matter to which my right hon. and learned Friend has not referred, and which is referred to only briefly in the White Paper, and that is the position of the British expatriate staff in the public service of Hong Kong. Will my right hon. and learned Friend bear in mind that in the past, whenever a colony has achieved its independence, there has been a public officers' agreement, under which provision has been made for their future career prospects and pensions, and for compensation for loss of office arising out of constitutional changes? Will he give an undertaking that similar arrangements will be made for members of Her Majesty's overseas Civil Service in Hong Kong?
Sir Geoffrey Howe: I am grateful to my hon. Friend for raising that point, about which he has already asked several questions. As has been pointed out, the draft agreement in annex I, part IV provides satisfactorily for continuity of service by serving officers in the public service of Hong Kong on terms and conditions, including pay and pensions, that are no less favourable than before
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1 July 1997. Those provisions apply to members of Her Majesty's overseas Civil Service serving in Hong Kong as well as to other civil servants.
The resumption of sovereignty over Hong Kong by the People's Republic of China raises similar issues in respect of Her Majesty's overseas Civil Service as independence did for other dependent territories. However, it is not possible to define now, 12½ years in advance of constitutional change, all the arrangements that will apply to members of Her Majesty's overseas Civil Service serving in Hong Kong and to payments of their pensions by the Hong Kong special administrative region after 1 July 1997. Thus, at this stage, I draw my hon. Friend's attention to the contents of the agreement, which he has seen. I understand his concern and I hope that I have shown our appreciation of it.
Sir Nicholas Bonsor: There is one other peripheral but important matter that I should like my right hon. and learned Friend to comment on, and that is the long-term fate of the Vietnamese refugees in Hong Kong. He will be aware of the difficulties that the Hong Kong Administration face in trying to place those refugees throughout the world, and of the Government's reluctance—having already done a great deal—to take any more refugees now. I should be grateful if my right hon. and learned Friend would confer with my right hon. and learned Friend the Secretary of State for the Home Department to ensure that we take some refugees, and that we make every effort to encourage other countries to do so.
Sir Geoffrey Howe: Again, I am grateful to my hon. Friend for raising that point. Of course, it goes a little outside the debate that I am now concerned with, in commending the agreement to the House. But in so far as it is within the scope of today's debate, I am sure that my hon. Friend the Minister will have something to say about it at the end of the debate. However, that point takes us on to rather different territory.
Mr. Neville Trotter: I think that my right hon. and learned Friend has set at rest the worry about the role of the People's Liberation Army within the region, as it will not be involved in internal security. But there is another worry, and that is that conscription might be applied. That worry should be set at rest as soon as possible. Might it not be a good idea to establish some internal security force for the policing of the frontier with the rest of China, so that young people in Hong Kong can serve in that body and not be in any way subjected to the possibility of conscription to the PLA?
Sir Geoffrey Howe: It is obviously important that the arrangements that are to be in place after 1997, whereby public order is the responsibility of the government of the special administrative region, should be considered and developed so far as necessary. Conscription is not mentioned in the agreement. The Chinese Government have not suggested that there will be conscription, and there is no reason to assume that there will be such a thing. I cannot say more than that at this stage.
Mr. Faulds: Will the right hon. and learned Gentleman give way on that point?
Sir Geoffrey Howe: I shall not give way. I must try to draw my remarks to a close, as I want other hon. Members to have a chance of taking part in the debate. I

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have said as much as I can now about the balance of factors that we have to take into account on constitutional development.
I believe that what has emerged from these negotiations is a bold and imaginative plan for the future of Hong Kong. The concept of maintaining two separate political, economic and social systems within one country is a farsighted one, which is closely associated with Chairman Dengxiao Ping himself. As a means of reconciling the apparently irreconcilable, it could have important implications for problems in other parts of the world.
I am greatly encouraged by the favourable reception given to this draft agreement internationally—and not least by the major industrialised nations that can play such an important part in Hong Kong's future prosperity. Indeed, 1997 will not just mark the end of an era in Hong Kong but more important than that, it will mark the beginning of a new era.
The success of this agreement will depend not only on China and the United Kingdom but to a very large extent on the people of Hong Kong and on their willingness to make it work. As the House well knows, they are resourceful and resilient people. I believe that there is every chance that in the 21st century Hong Kong will continue to be the striking financial, economic and social success that it is today.
We shall certainly continue fully, responsibly and effectively to discharge our obligation for the administration of Hong Kong until 1997. Thereafter we shall follow the fortunes of the Hong Kong special administrative region with the utmost attention and interest.
This is a debate about the future of Hong Kong and about the draft agreement before the House today. I close by saying that it is an honourable agreement. It is good for Britain and good for China. But far more important than either of those things it is good for the people of Hong Kong.
On behalf of the Government, I warmly and strongly commend the agreement to the House.
6.27 pm
Mr. Denis Healey: I thank the Foreign Secretary for that thorough and detailed presentation of the agreement. However, I regret the fact that the Government did not accept the Opposition's suggestion that we should have two days for this important debate. At the time we were grateful for the extension of the debate by two hours but, of course, we have already lost more than that owing to not unfamiliar incidents in the House after Question Time. Accordingly, I shall try to keep my remarks short, as many hon. Members wish to speak. It will be relatively easy for me to do so, because the House gave careful consideration to the background to the negotiations as long ago as May, and I think it fair to say that at that time there was a broad consensus.
In September, the Government published the draft agreement and I believe that it was clear then that there had been a combination of political realism and diplomatic skill in both the People's Republic of China and Britain that we all admired, and which I hope may be applied in some other areas on which the issue of sovereignty is of central importance.
When we discussed the agreement briefly in the House on 25 October the House was broadly agreed that the agreement as Lord Butler said, was "the best we have", and certainly better than might have been expected a few
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years ago. At that time, the House was disposed to accept it as such, subject only to the views of the people of Hong Kong, as assessed by the office set up for that purpose. Now we have the report of assessment office and of the independent monitoring team. I propose to confine my remarks largely to the findings in those reports and to some of the important issues that emerged with new clarity from them.
The report of the assessment office suggests that the people of Hong Kong have taken much the same view of the agreement as has the House of Commons. The report is decently honest about the problem of judging opinion in a territory that has never possessed representative government as we know it here. The assessment office was clearly disappointed by the relatively tiny response to its inquiries. Only one individual out of every 3,000 in the territory put in a written submission, and I suspect that Sir Patrick Nairne and Mr. Justice Li were right to say that that was partly because the office took a long time to assure the people that any opinion that they might submit individually would remain confidential and inaccessible to outsiders for ever.
It is somewhat disturbing that out of the 1,000 people who expressed a view on the acceptability of the agreement, as many as one in three opposed it. Nevertheless it is difficult to dispute the conclusion in the report that, given the fact that nearly all the people of Hong Kong acknowledge the inevitability of China having sovereignty in 1997 and the impossibility of changing an agreement made by two Governments outside Hong Kong, the agreement must be accepted.
I was somewhat surprised, however, by the Foreign Secretary's suggestion that it was not possible to change any international agreement that has been initialled. I had formed the impression that that is not the view of Her Majesty's Government in the case of the draft treaty on the law of the sea. Perhaps, when he replies, the Minister will comment on that.
We would all agree that the important thing is to ensure that the agreement is carried out as the basis for the continued prosperity and well-being of the people of Hong Kong. I suspect that the general view of the people of Hong Kong was summed up by one person quoted in the report by the assessment office, who said that the draft agreement is a post-dated cheque and that the result can only be known when it is proved.
Perhaps the most interesting summary of the situation is contained in paragraphs 23 and 24 of the report of the independent monitoring team. I hope that I may be allowed to read it—as they say in the United States—into the record:
"Nobody in Hong Kong can escape the uncertainties of the future: those who have, or can acquire, a 'right of abode' elsewhere will take personal precautions in the short term while hoping for the best in Hong Kong in the long term. The minority who reject the draft agreement do so either because they can never accept reunification with Communist China or because they are bitter about the consequences for themselves as British dependent Territories citizens. The majority who accept it do so chiefly because they regard reunification as inevitable and are relieved that the terms of the draft agreement are as good as they are.
But the verdict of acceptance implies neither positive enthusiasm nor passive acquiescence. The response to the Assessment Office has demonstrated the realism of the people of Hong Kong. They know that their future now lies in their own hands."

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Some of the implications of that judgment on the findings of the assessment office are relevant to us in Britain. The House and the Government must take account of the clear misgivings that remain in Hong Kong. Both as a matter of honour and, I suggest, as a matter of British interest, we must accept our responsibility to do what we can to ensure that the agreement is successful, particularly in the 12 years before the resumption of sovereignty by the People's Republic of China.
There is a strong case for meeting the views of the Unofficial Members of the Legislative Council, at least so far as saying that the Government should publish an annual report that Parliament could debate. A firm commitment to debate every report would be perhaps unnecessary or even unwise, but the Government should make an annual report on developments in the territory and it should be open to the House, if it wishes, to debate it.
I hope that when we consider the legislation next year we shall be able to debate many of the issues that arise and to which the right hon. and learned Gentleman referred. However, some issues require special attention. There are the problems of the expatriate civil servants and of the Vietnamese refugees, which have already been referred to. I hope that the Government will take those problems seriously and will be able to allay some of the concern felt on those issues on both sides of the House.
A matter of even greater moral importance for Britain is that a substantial number of the people of Hong Kong served the British colonial Government in fields that could render them liable to victimisation in the future. I hope that the Government can give us an absolute assurance that those people will be guaranteed their future and their personal security.
There is also the problem of the British dependent territory citizens in Hong Kong. As the years pass, there is a case for giving somewhat fuller assurances on nationality and travel for those 2 million British dependent territory citizens. I gather from what the Foreign Secretary has said that, although this is not necessarily possible, it is not necessarily excluded. Not many of us would believe that it would be possible for any British Government to offer them all an automatic right of residence here. However, many of those people have skills and energies that could contribute greatly to Britain's economy and social progress. Having spent some weeks on holiday in California in August, I was immensely impressed by the contribution made by recent immigrants from Hong Kong, Vietnam, Taiwan, Korea and Japan to the stupendous growth of a state that is the size of Britain and has twice our annual national product. We should not be indifferent to the contribution that Chinese people from Hong Kong can make, although we cannot issue any blank cheque to accept as many of them as might wish to come here at any one time.
Mr. Parry: Does not my right hon. Friend accept the suggestion that, together with Commonwealth, NATO and the European Community, the Government might take the initiative to provide a haven for those who might wish to leave?
Mr. Healey: I was just about to refer to that proposal. I am glad that my hon. Friend is keen on it because I think that the suggestion is a very good one. The idea is that the Government should consider launching an international
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effort, drawing largely on members of the European Community, the Commonwealth countries and NATO, to assist in the resettlement of those who may wish to be resettled. I believe that the idea has been referred to as "operation Haven". I hope that the Government will consider that suggestion. The Minister of State may wish to say something about it when he replies.
There has been a dramatic change of opinion in Hong Kong about the joint liaison group since the idea was first mooted. Many people in Hong Kong originally saw the joint liaison group as an underhand mechanism by which Peking could get premature control over the territory. Those fears have been completely dispersed, and the joint liaison group is now seen in Hong Kong as a valuable instrument in ensuring the future development of the territory in line with the agreement. I take it that the Government also regard it in that light. It would be useful if some means could be found of associating the people of Hong Kong in the liaison group's work. We know from the draft agreement that the group will include officials of the Hong Kong Government and that there is some scope for evolution at a later stage, at least in the case of the working groups. I hope that Government officials in Hong Kong and the British Government will watch the possibility of development in that direction because there is no doubt that it would be greatly welcomed by the people of Hong Kong.
It is not unnatural that the people of Hong Kong would also like representation on the Chinese body that will draw up the basic law, but that must now be a problem for them to discuss with the Chinese Government. It is not essentially a problem that the British Government should discuss, once the agreement comes into force. Representation by Hong Kong on the joint liaison group or on any Chinese body that drafts the basic law raises what is still the most difficult issue concerning Hong Kong's future—whether its institutions can be given the power to reflect more accurately the views of the people of Hong Kong in the years before the change takes place. In other words, can Hong Kong move towards more representative government? That will not be easy in a territory in which there has been hardly any significant constitutional change for the past 100 years. Suddenly rushing the thing in 12 years is obviously open to real dangers.
We must test each step in the process before moving to the next to ensure that nothing that is done disturbs the political stability on which the economic prosperity of Hong Kong must depend. Through this agreement, the Government have a direct responsibility to the Government of Peking to deal with that problem in this way — I put it no higher than that. However, if any more representative system is to last, it is important that it should be in place well before the transfer of sovereignty. I assure the right hon. and learned Gentleman that I am fully aware of the problems that that raises and will be tolerant of any difficulties that the Government might encounter.
If the House accepts this agreement—I strongly hope that it will—and the Foreign Secretary and the Prime Minister sign it and it is passed into law in Peking and London next year, we shall be opening a new chapter in the life of some of the most vigorous, skilful and ingenious people who have ever been subjects of the British Crown. We are opening the new chapter under far better auspices than anyone would have believed possible only a few years

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ago. No other territory in the world is guaranteed 62 years of capitalist free enterprise by treaty. Some of us might regard that as a somewhat mixed blessing but it is not completely without precedent for a Socialist community to coexist with a capitalist one. Many of my right hon. and hon. Friends from north of the border will feel that that has been the problem of Scotland for many years. Although we hope to assimilate the rest of the United Kingdom with the Scottish model as the years pass it cannot come a day too soon.
As I have said, when we read the news that we get from Hong Kong and talk to travellers to Hong Kong and our colleagues who have visited the territory in the past six months, we find that everyone is impressed by the tremendous opportunities for external capital and enterprise in these new circumstances. They have been impressed by the fact that Japanese and American businesses are already gearing themselves up to take full advantage of competition with British businesses on what they regard as likely to be more equal terms than in the past. I hope that the Government will take every opportunity to press British businesses to be equally alert. Some of the princely hongs have shown far from the right spirit in their approach to the opportunities that now face them. I hope that their place will be taken by other British businesses with more energy and vision.
6.45 pm
Mr. Edward Heath: I commend most warmly the manner in which my right hon. and learned Friend the Foreign Secretary and those colleagues who have worked with him have conducted the negotiations. I should like to offer my full congratulations on the result that he has achieved. In my view he has been most successful.
This is a realistic agreement. It recognises the facts of the situation. I have always believed that the people of Hong Kong have recognised those facts. My plea to my right hon. and learned Friend is that he should continue with his present attitude and not allow himself to be diverted in any way from it. The temptations will be quite considerable — some of them have already been expressed today.
On 1 July 1997 we relinquish sovereignty over the island and the lease over the rest of Hong Kong. We shall then have neither sovereignty nor power and I beg my right hon. and learned Friend not by any sentence or phrase to give indications that will cause troubles for his successors when that time comes. That is fundamental in every respect. It is already being said that we must ensure that the agreement works, but it will not be in our power to see that it works. What lies in our power is to ensure that we carry out our side of the agreement. The rest will be in the power of Hong Kong and the People's Republic of China. I hope that that will always be at the forefront of my right hon. and learned Friend's mind and in the minds of his colleagues in the Foreign Office and the Government as a whole. To do otherwise would be unfair to the people of Hong Kong as we should be misleading them, and they would not then be able to make their own fair and responsible judgments about how to organise their future.
My right hon. and learned Friend rightly emphasised that Britain is responsible until the date of the handover. That alone puts great responsibilities on us. In the wealth of admiration which my right hon. and learned Friend and others expressed today, we should be foolish if we failed
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to acknowledge that Hong Kong has its problems, and great internal problems. I hope that we shall concentrate, for the remaining years of our responsibility, on helping Hong Kong to solve those problems. I do not need to go into them in detail as we all know what they are. Moreover, it is right to emphasise that Hong Kong now faces considerable competition from the rest of the Pacific. That has nothing to do with 1997 but derives from the fact that Singapore has emerged as an extraordinarily successful entity and is now linked up with Tokyo and Chicago, which Hong Kong is not. That is one of the elementary facts of financial life at the moment. If Hong Kong suffers from that it is not our fault, Peking's fault or the fault of the Foreign Secretary and the negotiators, but something that Hong Kong, with the aid of the British Government until 1997, has to resolve for itself.
I hope that we shall continue to do everything possible to help Hong Kong solve its problems and recognise that after 1 July 1997 we shall have neither sovereignty nor power. That affects nationality, which itself is complicated enough. The right hon. Member for Leeds, East (Mr. Healey) mentioned two groups whom we should look after and said that we might organise a European or world arrangement to accommodate those who wish to leave Hong Kong. I believe that that is impractical. I do not for a moment doubt the skill and drive of the people of Hong Kong—that is why I have confidence in their future. If we want to use some of that skill and drive, it is open to us to allow them to come to Britain without their having British or any other dependent form of British nationality. The question therefore does not arise. We should learn from the experience of the years in which we moved our colonies to independence but loaded ourselves with all manner of undertakings which we could not carry out afterwards and which became a source of grave embarassment to this country.
Mr. Healey: I think that the right hon. Gentleman has misunderstood my comments in two ways. The first group to which I referred were those whose work for the British colonial regime may render them liable to victimisation as time goes on. I hope that he will accept that we have a direct responsibility to give people who have served, for example in the police, the opportunity to come here before 1997, whatever their nationality status.
On the second point, I entirely agree with the right hon. Gentleman. I am not suggesting that we should give British dependent territory citizens a statutory right to live here. Like the right hon. Gentleman, I am saying that we should recognise that many of them could make a great contribution to our country by coming here and that we should be prepared to accept them, on a case by case basis, as the Americans have accepted hundreds of thousands of Asians from other western Pacific countries since the war.
Mr. Heath: I am grateful to the right hon. Gentleman for that explanation. His point about victimisation implies that the autonomous Hong Kong China Government will victimise people in Hong Kong. I am not for one moment prepared to accept that before the transfer of power in 1997 and it will not help the working of the agreement if we suggest that it will happen.
I have dealt with the Government of the People's Republic in private business in the City and I have always found them meticulous in carrying out agreements made

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since the revolution. International treaties and arrangements made since the revolution have also been meticulously observed. That should give us confidence that the same will be true of the agreement now before us, which I hope that the House will reaffirm today.
On the development of representative government within Hong Kong, I agree with the right hon. Member for Leeds, East that we must do our utmost to achieve proper, working representative government there by the time the handover takes place, but I cannot agree with the right hon. Gentleman's comments about not rushing things. With only 12 years to develop representative government, the question of rushing or not rushing does not arise. What I believe will do more harm than anything is the suggestion, as the tone of the White Paper implies, that we are doing this rather grudgingly. Post-colonial history shows that we have always suffered when we have seemed to be dragging out feet. There is always the argument that it would be so much better if these people let us go on ruling them because we do it so much better than they ever could, but not all of us share that view and the impression that we are only grudgingly making changes will be highly damaging to Hong Kong. My experience in talking to young Hong Kong Chinese is that they are anxious to assume those responsibilities, but that response to the assessment was low because they did not trust the present system to enable them to express their views safely and clearly.
Mr. Adley: I entirely agree with my right hon. Friend. Does he agree with me that there is likely to be more resistance to the change that he proposes from the Hong Kong Government than from the People's Republic of China?
Mr. Heath: Of course I do. My right hon. and learned Friend the Foreign Secretary will have seen the mass of advice from people in appointed positions who naturally enjoy their positions and will urge him to continue them rather than spreading responsibility too hastily. Far greater than any danger of haste is the danger of not having fully representative working government with experience by the time the handover takes place.
There is constant discussion about the stability of the People's Republic and of the administration in Peking, but no Conservative Member can deny that the direction of their agricultural policy in the past five years and now their industrial policy has been most satisfying. Of course there are aspects of the Chinese regime of which some people do not approve. That happens all over the world. Nevertheless, the direction adopted by the Chinese in agricultural and industrial affairs is certainly one that we can encourage and approve. The Chinese declaration about industrial policy could almost have been made in this House by my right hon. and learned Friend the Foreign Secretary, with occasional deletion of the word "Socialist" which had clearly been inserted to keep the ranks in order. It was a policy of enterprise, incentives and greater productivity, stressing that management must manage and that there should be good relations between unions and management and no interference from the Government. It says everything that my right hon. and learned Friend has been saying in various ministerial capacities for the past five years.
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There is one way in which we can help, given our good relations with the People's Republic and the part that we are playing in its affairs. My right hon. and learned Friend's achievements as Foreign Secretary fully justify the decision of the Government over which I presided and of which he was a member to enter into full relations with Peking in 1972. One of the purposes was to ensure the best possible answer for Hong Kong when the time came.
The right hon. Member for Leeds, East said that we must acknowledge the interest being shown by the Americans and the Japanese in capital in Hong Kong. In fact, 50 per cent. of the capital in Hong Kong is already American, 35 per cent. is Japanese and only 5 per cent. is British. That is the situation now and there is nothing new or experimental about it. Moreover, nearly 50 per cent. of trade with Hong Kong is American, more than 35 per cent. is Japanese and only 7 per cent. is British. Clearly, therefore, the American and Japanese economic interest is far greater than our own in both investment and trade.
The area in which we can be helpful is in joint ventures with the People's Republic, by far the greater part of which currently go to Japan, with a small amount going to the United States and a very small amount to Europe, of which we get only a proportion. This goes beyond the sphere of my right hon. and learned Friend the Foreign Secretary. It means that the Treasury as well as the Foreign Office and, indeed, the Government as a whole must take a much broader attitude to investment in such joint ventures than it now does. If Dengxiao Ping asks why he should get his joint ventures from us at 11 per cent. or 12 per cent. when he can get them from Tokyo at 4·5 per cent., I cannot give an answer. No one here can answer that, but an answer must be found if we are to have joint ventures with the People's Republic and thus extend our influence, help the People's Republic to stabilise and thus help the people of Hong Kong.
I congratulate my right hon. and learned Friend the Home Secretary all the very hard work that he and his team have done, some of which I have seen at first hand, and I thank him for it.
Several Hon. Members rose—
Mr. Deputy Speaker (Mr. Paul Dean): Order. I remind the House that the 10-minute limit on speeches operates from 7 pm. I appeal for the co-operation of right hon. and hon. Members.
6.58 pm
Mr. J. Enoch Powell: I do not think that it would be possible to query the wisdom of relinquishing our sovereignty over Hong Kong under the terms of an agreement such as that now before us. Whatever may be the future of that agreement—we cannot look 60 years into our own future, let alone that of China — the agreement is a remarkable achievement, which many would not previously have expected the Foreign Secretary and his colleagues to achieve.
I wish to refer to just one element which, I believe, is technically not part of the actual agreement. The Foreign Secretary said that the last four paragraphs were not part of the agreement. That section is entitled "Associated Exchange of Memoranda". As I understand it, this means that, having been notified of our intentions as set out in those paragraphs, the People's Republic of China raises no

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objection to them. The fulfilment of what is set out in those paragraphs is not, from its point of view, a condition to its acceptance of the rest of the agreement. From that it follows that this, and perhaps this alone of all that is set out in the White Paper is a matter which the House—and the country—is free to debate and decide for itself, since it concerns us materially, in the course of the legislation that will be laid before us.
In those paragraphs, the Government say that they
"will seek parliamentary approval for legislation"
to give
"a new status, with an appropriate title,"
to those who are now British Dependent Territories citizens by reason of their connection with Hong Kong, and those who will become such in the next 12 or 13 years.
It is true that the Government say that that status
"will not give them the right of abode"
in the United Kingdom. It does not. That is one of the absurdities and anomalies of a status which many of us thought should never have been created in the British Nationality Act 1981 and which has already had to be modified in the case of two of the territories to which it applied. But it is one thing for the Government to say that the new status will not give these people the right of abode in the United Kingdom. It is another to ignore the increasing pressure that will be brought to bear on the United Kingdom if we confer the kind of status adumbrated in this document, to admit its holders liberally and freely to the United Kingdom from Hong Kong in coming years, both before and after 1997. We would be foolish to underestimate the anxieties that exist or the pressures that may be deliberately engineered to that end in years to come. One can see the growth of such pressures already.
In September, The Times was writing:
"the British government should at least compensate for them"—
that is, the terms of the memorandum—
"by giving as broad a definition as possible to those B.D.T. passport holders eligible to settle in Britain under the discretionary terms of the 1981 Nationality Act."
After a few weeks that had become:
"Even though Britain is in no position to open its doors to such numbers we will have to be prepared to treat such an emergency, if it happens, with particular humanity and urgency."
And today, in the same newspaper, we are told:
"The present generation will probably be granted British overseas citizenship, which does not give the right of abode in this country but implies an ultimate moral obligation on Britain if things go badly wrong."
By what is proposed here we are incurring a virtually unlimited, though unacknowledged, liability to cede to pressure, a liability which could be of great consequence for our own future.
The Government have courted that result by the manner in which they have represented the new status. They have represented it as a continuation of the present British dependent territory status. In no circumstances could any status of the people of Hong Kong after 1997 be properly regarded as a continuance of their present status as inhabitants of a British dependent territory.
In the draft the Government have repeatedly referred to the travel documents that would be issued as "British passports". Now, we in the House may understand that a British passport issued to a British dependent territory citizen is not what the rest of the world would take it to be; but the rest of the world, and a great many of the people who will read this document, will think that a British passport means the same as a French passport—
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in other words, a passport the possession of which is equated with citizenship and with the rights of citizenship. It is a profound mistake on the part of the Government to use a concept and vocabulary that is bound to strengthen the internal and international pressures and to weaken the legal protections that we have against entry into this country where that has not been specifically decided in specific cases by the authorities of the United Kingdom.
I hope therefore that this proposal will be rethought, and will be rethought if not before, at any rate during, the course of the legislation that is to come before the House next year. The notion that the United Kingdom can confer a status that will outlast 1997 is itself the assertion of a falsehood. It represents the inadmissible division between citizenship and status on the one hand and sovereignty and power on the other. Where there is no sovereignty or power, there cannot be citizenship or status in any natural sense of the words. In this I concur entirely with what the right hon. Member for Old Bexley and Sidcup (Mr. Heath) said. We are in danger of adopting formulae at this stage which will be interpreted in the future in a way that will be a rod for our own backs, and will not be to the advantage either of those who might eventually be covered by it.
We have made such mistakes before. I see that in the document there is a reference to
"passports issued by the United Kingdom."
We have been through all that painfully in past years, when we found that the act of issuing passports by an authority responsible to the United Kingdom Government was interpreted as conferring all the rights naturally inherent in citizenship itself. As a result, we were held internationally as well as internally to be bound by the fact of the United Kingdom having issued passports to individuals, even though the citizenship possessed by those individuals was one that by our law did not carry the right of entry and abode to this country.
We have no need to make that mistake again. We are deceiving others and ourselves if we lay this foundation for a repetition of that mistake. I hope that reconsideration, in the context of the future legislation, will enable us to avoid it.
7.7 pm
Mr. Peter Temple-Morris: This is the best possible deal that we could get. It owes a lot to the realism of the people of Hong Kong, and the way in which they have accepted it, and the assessment team has said as much. Reality is the name of the game, and we salute the Hong Kong people for it.
I intend to make a short speech within the 10 minutes that are available to me. There are several realities. Reunification is unavoidable, and that fact has to be faced by all of us. Secondly, China has accepted, and we hope will go on accepting, the two systems. It is in her interest to do so. This point is absolutely crucial. It has been emphasised by both Front Benches, and will be emphasised again in the debate this evening. The crucial nature of this is that we must, in the 12 years to come, maintain the fact that it is in China's interest to make this a success.
The opportunities are enormous. I emphasise this, as it has not yet been touched on. That area of the far east is perhaps the premier potential growth area in the world. Europe has its difficulties, and it may be said that it has

409
reached a plateau of achievement, although we are hoping it will get better, while the potential of expansion in the future in that area of the east is enormous.
China will want to control Hong Kong, and that point will play a vital role in all this. To think otherwise is to delude oneself. Therefore, there are two points. First, we must preserve the value of what China takes over, and the self-interest argument comes in there. Secondly, we must create positions and institutions which are reasonably compatible with the system that is due to take over Hong Kong. Therefore, everything that we do must be directed to that end. Positions and institutions that are reasonably compatible is all that we can achieve.
The future of democracy within Hong Kong is a delicate matter and it has been approached delicately in the debate so far. There is nothing sacred about democracy. It has not always worked in parts of the world where we have wished it to work and where we have introduced it. In many instances it has declined rapidly and in many others it has died. It is important, whatever the system, to get the Hong Kong Chinese into leadership positions whatever the system that prevails in Hong Kong between now and 1997. During the next 12 years we must create something that will continue beyond 1997.
The proposals for indirect elections are just about right. Again, this is a difficult and delicate matter. We must proceed slowly in the recognition that democracy is neither a Chinese nor a Hong Kong institution. Democracy is not exactly the main attribute of Hong Kong or the reason for its success. There are great dangers in undue speed. Those who advocate speed, such as the radicals, pressure groups and Hong Kong observers, perhaps strike some of us as being rather too western-oriented for comfort, and perhaps not the ideal people to advocate a lasting system beyond 1997. I am not deriding democracy. I am merely observing that it is necessary to be practical. [Interruption.] I notice that one or two great democrats have responded to my remarks. Perhaps they are amused by what I am saying, but there is a certain seriousness behind my remarks.
We must not divide a consensus community. Hong Kong is not and has never been an independent state. It has operated by consensus and we must not exacerbate the differences which might appear between the Nationalists and the Communists by pressing on too quickly towards a system which is based on direct elections. That is why indirect elections will be going quite far enough for the moment. There are Communists within Hong Kong and they have a close relationship with the mainland. They would not win in any direct elections and we should not cause them to feel that they should not compete. If we did, they would opt for abstention and perhaps eventually influence those who take over to dismantle the system that we have tried so laboriously to build up.
It is all-important that the United Kingdom continues its interest and support over the next 12 years. It is pleasing that so many hon. Members are present in the Chamber to demonstrate their interest in Hong Kong, and this interest must continue. Indeed, it must be seen to continue. It is only then that China will take sufficient interest in the Hong Kong Chinese. It is imperative that we give them an increasing role if the framework is to last and continue beyond 1997.
It is vital also to maintain confidence. If we fail to do so, the consequences and results will be dire. We all know
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that various individuals are, understandably, going to various boltholes. When they have the nationality that will result from those boltholes, they may return to Hong Kong. There is a vital middle ground of talent within Hong Kong that is responsible primarily for the continuation of its success. That talent will leave if we get things wrong. This terrible danger was apparent in Shanghai back in the 1940s and it has been apparent in other parts of the world.
If things start to go wrong, they rapidly become worse. That leads to corruption, "take while you can," and the entire edifice collapses. That is why confidence is so vital. It is necessary to maintain Hong Kong's freedom of operation bearing in mind the opposition and competition which it faces. If exchange controls were to be introduced, for example, in addition to other measures, confidence would be lost and the Hong Kong experiment would diminish to such an extent that it would be the end of the agreement which we have all worked so hard to achieve and which we want to make a success.
In maintaining confidence, there is no greater challenge than the liaison group. The issue has been raised with my right hon. and learned Friend the Foreign Secretary and his answers were rather blurred, although he pointed out the presence of the Hong Kong Government on that group. Within the agreement there is a facility for continuation to the extent that we can involve the Hong Kong Chinese, at least for the moment on the sub-committees. The liaison group will have a vital role in the next 12 years. Its contribution and its access to the basic law will be all important. It is the duty and role of the House—I hope that my right hon. Friend the Minister of State will be dealing with this in more detail than my right hon. and learned Friend the Foreign Secretary did—to ensure that we have the active and vital participation of the Hong Kong Chinese on the group rather than a load of Hong Kong Government luminaries.
7.17 pm
Mr. Eric Deakins: I agree entirely with the hon. Member for Leominster (Mr. Temple-Morris) about the need to maintain the confidence of the people of Hong Kong. I hope that this debate will not be the last occasion on which we have a major examination of the affairs of the colony. I hope also that we shall have regular reports from time to time that will enable us to show the people of Hong Kong that we are continuing to maintain our interest in what will remain for the next 12 or 13 years a British colony.
I shall address myself to two problems. One problem is that of democracy and the other is the international recognition of the agreement. We have had the Hong Kong Government's White Paper and there have been comments already on how far and how fast we shall go by 1997. I join those, including the right hon. Member for Old Bexley and Sidcup (Mr. Heath), who feel that by 1997 there should be in place in the colony a system of fully representative government. I believe that that will be in the best interests of the people of Hong Kong. I invite hon. Members to envisage a situation in which there is virtually no progress towards democracy in Hong Kong over the next 12 years. We shall then be handing over one authoritarian system of government to another. It will be much easier in those circumstances for the incoming Government and governor, if they wish, to make fundamental alterations irrespective of whether they are in accordance with the terms of the agreement. Their task in

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doing whatever they may wish after 1997 will be made immeasurably easier and smoother by the absence of representative institutions and government in Hong Kong which can represent fully to them the interests of the Hong Kong people. We need to have more representative government—that is, a majority of elected members of LEGCO and EXCO—but I do not presume to enter into the many arguments and discussions on the exact formula of the elections. That should be the guiding principle.
In paragraph 33 of the White Paper there is set out the issue of the powers, if any, that should devolve to the new Hong Kong Administration, the more representative Government. There is little point in making the Government more representative unless they have some powers with which to control the destiny of the Hong Kong people in the period up to 1997. The issue is uncertain and vague as it appears in the documents before us. I hope that we shall maintain the pressure on the British Government and the Hong Kong Government to make haste slowly during the next 12 years. That should be our theme and I hope that that will help the Hong Kong people to realise that we have their best interests at heart.
I turn briefly to the issue which has concerned me from the time that I visited Hong Kong earlier this year with a number of other hon. Members. We did so at the invitation of the Hong Kong Government. That issue is the international acceptability of certain of the provisions of the agreement. I refer in particular to the period after 1997. The agreement says that all ahould be well and that Hong Kong will be able to maintain its participation in GATT and its special status as a member of the multifibre arrangement. Both of those international institutions are vital for the future economic prosperity of Hong Kong.
If Hong Kong were unable to maintain its position within those two international institutions, its economic future would become very uncertain. That is recognised in the White Paper which is before us for provisional approval today and for approval by Britain and China next year in the form of legislation. The agreement is good, so far as it goes, but it does not go far enough. It may mislead people in Britain, China and Hong Kong about the need to take urgent measures to ensure that the special economic status of Hong Kong is recognised by other countries.
I invite the House to consider the economic climate in the world over the next 12 years. We have seen during the past 10 years, during which there has been the multifibre arrangement and other economic arrangements to benefit poorer countries, including Hong Kong, a climate of growing protectionism. I resist that climate and I intend to go on resisting it. Nevertheless, the mood of the House is that we need to protect ourselves much more. That mood is also evident in the United States and in other industrial countries. Therefore the international economic climate will not be very favourable towards concluding an international economic agreement for the continuation of Hong Kong's special status in GATT and the MFA.
The Foreign Secretary made great play— I do not blame him—of the fact that there agreement. However, all countries in the world recognise and applaud the agreement because it does not cost them anything to do so. Many countries are anti-colonialist. If the agreement ends colonislism, all well and good. Most countries are conscious of the value of friendship with the people's Republic of China, if only for economic reasons, because
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potentially in the 21st century China will be one of the largest markets in the world. Therefore, they do not want to lose any brownie points over the next 12 years.
The point we are asking them to accept is that this is not only an agreement between Britain and China over the future of Hong Kong. We are asking the community of nations in GATT and the MFA to accept that Hong Kong's special status should continue. It will require them to continue to make sacrifices, in the sense that we accept the obligations of the MFA.
Hong Kong also enjoys certain privileges under GATT as a dependent territory. In those circumstances, it is incumbent upon all of us in this House, and upon the British Government, together with the People's Republic of China, to map out a strategic campaign to ensure that at the appropriate time there is full international recognition and an agreement on these two issues well before 1997. That will be extremely difficult. At least two countries—the United States and France—will be very difficult to convince that the special status of Hong Kong under the MFA and GATT should continue after 1997.
During the last year there has been a row between Hong Kong and the United States over the rules of origin for certain goods and garments. That is a sign of the times. I believe that there will be forces in the United States—I use the United States as an illustration of a country where this issue has arisen during the last year—which will want to ensure that by 1997 the special economic status of Hong Kong should cease, because then it would revert to being part of mainland China for the purposes of the MFA. Unless China's quotas under these arrangements are increased, the net result will be to reduce the pressure on rich countries to take goods from countries such as Hong Kong, China and many other developing countries.
Under the MFA, I believe that there will be strong opposition from France and perhaps from other members of the European Community. I single out France because when the Foreign Secretary raises this issue at the Council of Ministers he will be told that this is an excellent agreement, that most of the members of the EEC welcome it and that they also welcome the fact that Hong Kong is to continue to enjoy a special economic status. However, when our Foreign Secretary, as I hope he will, tries to obtain a concrete agreement in the EEC recognising the special status of Hong Kong in MFA and GATT, I suspect that the French will say that 1997 is a very long way away, that circumstances may change, that there will be several different MFAs leading up to that point, that they cannot consider the matter properly and justifiably at this stage and that we should put off the negotiations until much nearer the time. However, when we get much nearer the time—1995, 1996, and 1997—I have no doubt that the French, and perhaps others, will drive a very hard bargain if we are to fulfil the commitment which is contained not merely in this agreement but in statements made by the Foreign Secretary in Hong Kong, Peking and in this House about the special economic status and international provisions for the economic future of Hong Kong.
I hope that the Foreign Secretary will take these points on board. I am extremely worried about the international economic status of Hong Kong. Everything depends upon that after 1997. The best we can do in this House is to ensure that we negotiate successfully on their behalf.
7.26 pm
Sir Peter Blaker: The hon. Member for Walthamstow (Mr. Deakins) is quite right to stress the importance of obtaining acceptance of this agreement by the international organisations and by other countries which are concerned with economic and financial matters. I shall return later to that subject. I believe that the most important aspect of this excellent agreement is the evident acceptance by China of the basic principle that Hong Kong will be run after 1997 by the people of Hong Kong. Given the enormous difference between the two ways of life on the mainland of China and in Hong Kong, any attempt by China to run Hong Kong would lead to great difficulty.
Given that the acceptance by China of the principle of Hong Kong being run by its own people is absolutely sincere, I am optimistic about the success of the agreement. This is what the "one country, two systems" slogan means. From it flows most of the other important aspects of the agreement. China has accepted a self-denying ordinance. This shows that China understands that if it were to intervene in the day-to-day affairs of Hong Kong after 1997 it would risk the collapse of a structure which brings benefits not only to the people of Hong Kong but to the people of China. From the acceptance of that principle flow the other consequences in the agreement: a separate system of law and courts, private property, a separate currency, the fact that China will not take taxes from Hong Kong, and the separate membership of Hong Kong in GATT, IMF and the other organisations to which the hon. Member referred. There is also the remarkable list of 16 freedoms which will be enjoyed by the people of Hong Kong. They are set out on page 22 of the agreement. The agreement is a great credit to all those who have been involved in the negotiations.
I wish to say a word about the role played by my right hon. and learned Friend the Foreign Secretary. It is clear that in the summer of this year, when the negotiations were at a rather difficult stage, the personal intervention of my right hon. and learned Friend when he visited Peking was responsible for unlocking the door. I want also to pay tribute to his officials. They have made a wonderful job of the negotiations. I want also to pay tribute to the governor and to the members of UMELCO who have clearly advised the Government extremely well.
My right hon. and learned Friend was right to pay tribute to the Chinese Government as well because China has recognised its own interest. I say that as a compliment. It is not always that Governments recognise their real interests. It is very much in the interests of China that the agreement should work and it is very much in its interest that it has been made in such an excellent way.
But there are still some concerns. First, will the agreement last? We may ask what will be the system in the United Kingdom in 20 years' time. I do not know. I hope that it will be a country in which I will be happy for my children to live, but I cannot guarantee it. We cannot guarantee what Hong Kong will be like in 20 years' time, but we should have confidence in the agreement.
There are many reasons for that confidence. China has a good record in observing treaties which it has signed. It has even observed what it describes as unequal treaties which are responsible for the creation of Hong Kong. The whole thrust of China's economic development is encouraging because it is becoming more compatible with
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the system in Hong Kong. There are the special economic zones and we have now heard about the first peasant millionaire in China, which is encouraging. In addition, the great publicity which the Government of China have given to their first peasant millionaire is encouraging. That tendency is now spreading to the cities.
I cannot say that that trend is irreversible, but it is much more likely that the tendency towards liberalisation will continue rather than be reversed. I think that it is likely to be successful.
The Prime Minister, Dengxiao Ping, said that China proposes to remain open to the world. If that is its policy, there is only one place through which it can successfully be open to the world and that is Hong Kong.
Then there is the proposal that Hong Kong will have a separate status in all the international organisations to which the hon. Gentleman referred. It would be an outrage if our allies and friends—the French and the Americans—were to obstruct the proposal. It is an intolerable thought that they may do so. It may occur, but if it does I am sure that China, the United Kingdom and many of our friends will ensure that the proposals in the agreement are put into effect.
Then there is the important Taiwan factor and the example that Hong Kong will give for the proposed reunification of the mainland and Taiwan.
There are several matters about which concern has been expressed by the UMELCO delegation. One is the question of possible statelessness for some Hong Kong residents. I hope that when my hon. Friend replies he will say something more in addition to what was said by my right hon. and learned Friend the Foreign Secretary about that matter. The possibility of statelessness for some Hong Kong people is a matter of great concern.
An annual report to Parliament has been proposed. That was referred to by the right hon. Member for Leeds, East (Mr. Healey). That is a good idea and I hope that when my hon. Friend replies he will say that the Government propose to accept that.
There are two concerns which are much broader than those that I have just mentioned. They are the drafting of the basic law and the joint liaison group. China will understand the importance of closely associating the people of Hong Kong with the drafting of the basic law. I say that because of what I said at the beginning of my speech. China has understood that the prosperity of Hong Kong, which is so much in China's interests, depends on maintaining confidence among the people of Hong Kong. If the people of Hong Kong feel that they are excluded from the drafting of the basic law and that their views are not being taken account of, confidence will suffer. I am sure that the Chinese Government understand that as well as we do.
A similar factor applies to the joint liaison group. I note that there will be Hong Kong civil servants in the group, but I hope that it will be possible, at least over time, for unofficial people from Hong Kong also to be part of the group. That would be in the interests of not only the Hong Kong people but Britain and China. I see little conflict of interest between those groups in this situation. It is in all our interests that Hong Kong should be stable and prosperous in the future, and that is the greatest ground for encouragement.
7.34 pm
Mr. Russell Johnston (Inverness, Nairn and Lochaher): It is one of the had things about the new 10-minute rule that it is difficult to intervene. I have been a great believer in giving way, but I give notice that on this occasion I shall not give way. That is bad because the fact that we give way in this Chamber is supposed to make us different from and better than continental systems where people make set speeches.
I reiterate the welcome that I gave to the agreement when it was announced by the Foreign Secretary and repeat my congratulations to him and my admiration of the remarkable approach made by the Chinese under Chairman Dengxiao Ping.
We are left with three basic questions. First, can Britain do anything about making the agreement stick in the spirit as well as the words? That has already been rehearsed quite a bit. Secondly, what should we do in the next 13 years about the internal administration while we still remain responsible? Thirdly, where does our responsibility stop to those Chinese now resident in Hong Kong, many of whom went there to escape the People's Republic of China and who fear reabsorption into it?
The right hon. Member for Old Bexley and Sidcup (Mr. Heath) said that we could basically do nothing to make the agreement stick. That is pretty important. As somebody said to me when I was in Hong Kong in October, the music is good but the song must be well sung. In other words, it is the implementation and practice that are important. I am sure that something can be done. One of the myths about sovereignty is that the decision-making process can be influenced only by a great power. One of the good things that the Government have achieved is to develop a close relationship with the People's Republic of China which gives them an opportunity to exert influence as things develop.
Britain has a special responsibility. We are not decolonising. It is not quite right to use that expression. Every time we have decolonised we have allowed people to decide for themselves what would happen and what form of Government there would be. That has not been done and we all know why. The Government have shown sensitivity, but in the years to come there will need to be a commitment to follow up matters. Various people have mentioned the idea of regular reviews. That was mentioned in the press at the weekend by Miss Lydia Dunn of the Legislative Council. It was also mentioned today by the right hon. Member for Leeds East. It is a good idea. But it is not enough to proceed on the basis that if the House wishes we shall have a debate on the annual report. The Government should commit themselves to a debate at least once a year to examine some sort of annual progress report so that we can monitor what is going on and so that we have the opportunity in the House to reassert the fact that we still have responsibility.
I am still not clear, despite the exchange with the Foreign Secretary, whether non-official people will be allowed on the joint liaison group. I gather they will not. I gather that they may be brought in for sub-committees. It may be that that is impossible, but the route through the sub-committees must be fully utilised.
The drawing up of the basic law has been mentioned by many people and undoubtedly it will be done on behalf of the Hong Kong people by the Chinese. The Foreign Secretary said that the Hong Kong people have been
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offered consultation. They deserve participation, which is different from consultation. That is a view that could well be conveyed to the People's Republic of China. After all, we have paid tribute to the People's Republic of China for going along with an agreement of remarkable flexibility. It is right to stress that that will be for the benefit of the People's Republic as well as Hong Kong. It may open the door to a resolution of the problem of Taiwan and certainly it has economic significance.
As everyone has said, it will be a bold person who claims that the economic modes and modules in the People's Republic of China, Hong Kong or the United Kingdom will be recognisable 50 years from now. It is a matter of trust.
What should we do about democratic institutions in the next 13 years? How fast do we move and what do we do? The agreement states:
"The Government of the Hong Kong Special Administrative Region will be composed of local inhabitants. The chief executive will be appointed by the Central People's Government on the basis of the results of elections or consultations to be held locally."
There is no guarantee of elections. I expect that the People's Republic will accept the structure that it inherits.
I agree that we must make haste in the next 10 years, but it must be done with care because everything depends upon Hong Kong's economic success, as the right hon. Member for Leeds, East (Mr. Healey) has said. That does not depend only upon how ingenious and effective people are in Hong Kong. It depends upon the world economic situation. As the right hon. Member for Old Bexley and Sidcup said, Hong Kong's exports are heavily concentrated in certain places and its economic position is fragile.
The question of nationality arouses strong passions. The Foreign Secretary said that "statelessness would not happen." I should like to be assured that that applies to the Portuguese, the Indians, the Parsees and other minority groups. I hope that they will have documentation to give them statehood.
What about the Vietnamese? The Foreign Secretary said that their problems were not the point of the debate, but they live there. I visited Hong Kong with the hon. Member for Warley, East (Mr. Faulds) in October. The flow of Vietnamese refugees continues. This year, 1,535 have arrived in 63 boats. They are allowed in and are not turned away. By the end of this year about 12,500 Vietnamese refugees will be living in Hong Kong. They keep coming and we do nothing about it. The Minister should comment on that. They cannot be left in camps for ever.
The right hon. Member for Leeds, East mentioned the sensitive areas—the police and those involved in security. We remember the riots in 1967. The people involved in security and the Communists are still there. Old grudges might be settled. The right hon. Member for Old Bexley and Sidcup said that there would be no victimisation. That is a trusting view for a man who claims to be a practical chap.
I shall not dwell on the question of the expatriates, but they are worried about the future of their pensions arid their security.
What about the main body of people—the 2·5 million who are British dependent territory certificate holders? It is not practical to say that we shall let them all in. The right hon. Member for South Down (Mr. Powell)

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would not allow that. Yet consider what Hong Kong has done. After the second world war 600,000 people lived there. After the 1949 uprising there was a tremendous influx followed by a steady flow and 2·5 million people were absorbed in an area of 393 sq miles, much of which is hill or island. My constituency comprises 4,900 sq miles. The United Kingdom does not lack space, but it lacks a tolerance to absorb other people. That is a fact that we have to face. I am not especially proud of it, but I recognise it.
The Government must concentrate on ensuring that people do not receive passports which are in any way devalued and that such passports give them access and entry—
Mr. Deputy Speaker Mr. Ernest Armstrong): Order. The hon. Gentleman must bring his speech to a close.
Mr. Johnston: I shall take one minute.
Mr. Deputy Speaker: The hon. Gentleman must not take one minute. We are under orders and his 10 minutes are up.
Mr. Johnston: Then I commend the agreement, and I am sorry that I could not say more about it.
7.45 pm
Sir Paul Bryan (Boothferry): Many of us have already found opportunities to congratulate the Foreign Secretary, the Governor and the negotiators of the draft agreement. I do so again. I now want to congratulate the people of Hong Kong and their representatives—the members of the Executive and Legislative Councils. One has only to read the agreement and the long "Elaboration of basic policies" that goes with it to realise that the Chinese negotiators were much influenced by the UMELCO paper published when we last debated the subject in May, and, I have no doubt, by the UMELCO delegation to Peking.
The Chinese have been just as keen as we to gauge Hong Kong opinion. In the last two years scores of prominent Hong Kong citizens have been asked to go to Peking, many of them to meet Deng himself. Hence an agreement that has surprised us by the degree of its detailed understanding of the financial and social set-up in Hong Kong has emerged.
In our last debate, several right hon. and hon. Members went out of their way to argue that as UMELCO is not an elected body like the House of Commons it could not represent the Hong Kong people. I ask the doubters to read the assessment office report which summarises the debate in the Legislative Council. The views expressed in that debate are completely in tune with reports from hundreds of individuals and organisations reporting to the assessment office. Originally I had doubts about the creation of the assessment office. In the event, I and many others were wrong.
The Hong Kong Government are to be congratulated on the thoroughness with which they sought public opinion. they circulated 2½ million copies of the draft agreement in two languages within a few days. They undertook the massive job of collecting and collating all the evidence. No such operation has ever been attempted in any other country.
The report is a valuable document. The range and number of contributors gives it credibility. Written
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evidence came from about 1,800 individuals. That may not seem many, but people do not often hurry to put pen to paper unless they have something to grumble about.
I was most impressed by the reaction of the network of 679 organisations and groups from all levels of society which permeates Hong Kong and covers every sector of the community. Because of that range of interest, in effect the report goes through the draft agreement with a fine tooth-comb. It provides the one and only systematic record of Hong Kong opinion at this critical point in the territory's history. It will be read by foreign Governments and, in particular, by serious long-term investors. It will certainly be read by the Chinese and referred to by the joint liaison group.
In the debate in May we looked forward to today's debate as the time to discuss whether the draft agreement had the approval of the people of Hong Kong. That question has now been settled by the overwhelming message of acceptance accompanied by, of course, a list of reservations, qualifications and questions which must be clarified or resolved in the years ahead. Let nothing I say tonight be taken to under-rate the seriousness of the problems yet to be solved.
I can find no better interpretation of the Hong Kong verdict than the last words of the report of the monitors, Mr. Justice Simon Li Fook Sean and Sir Patrick Nairn to whom we should be very grateful. They said:
"The majority who accept the agreement do so chiefly because they regard reunification as inevitable and are relieved that the terms of the draft agreement are as good as they are. But the verdict of acceptance implies neither positive enthusiasm nor passive acquiescence. The response to the assessment office has demonstrated the realism of the people of Hong Kong. They know that their future now lies in their own hands; and the widespread concern to be involved in the drafting of the basic law is a timely and important token of their wish to stand increasingly on their own political feet."
That interpretation leaves us with much to do during the next 12 years. More and more people are turning to the prospect of the basic law which they expect not only to reflect the draft agreement but to solve outstanding problems. There is an increasing call that Hong Kong people should not only be consulted but participate in the drafting of the basic law. Members of UMELCO have. advocated a
"basic law advisory and monitoring committee".
I doubt whether the Chinese will concede any such formal arrangement, but the way in which the draft agreement has so accurately reflected Hong Kong views gives me hope that the Chinese will take the trouble to ensure that the basic law does the same. The Chinese must know that they will need practical help from the British and the people of Hong Kong in drafting the law—something in which they have no experience.
What time must I finish, Mr. Deputy Speaker?
Mr. Deputy SpeakerAt 7.56 pm.
Sir Paul Bryan: In the UMELCO paper with which hon. Members have just been issued—the paper is in the House of Commons Library—fears about the implementation of the agreement and the policies of future Chinese leaders come high on the list. Those fears were well answered by Miss Lydia Dunn in the Legislative Council debate, when she gave six reasons why she believed that the terms of the agreement would be faithfully implemented. Judgment on that front made by leading citizens in Hong Kong seems to be more convincing than anything we can say in this Chamber.

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Earlier this afternoon, my right hon. Friend the Secretary of State for Education and Science undertook to reconsider his plans for a reduction in student grants. I warn him that, if his recommended economies include a reduction in overseas student grants, that would be politically disastrous in Hong Kong. The present scheme, financed in part by the Hong Kong Government, is going well, and any tampering with it would be regarded as a sure sign of declining British interest in the territory.
In our long and unique colonial history, we have never experienced a transfer of sovereignty compared with this one. With our other colonies, we have usually found virtue in handing over the reins of power at reasonable speed, leaving unsolved problens for the incoming Government to face. Often, those Governments faced a pseudo-Westminster system of government unsuited to their circumstances.
This time we have 12 long years. The responsibility is all the heavier on British shoulders. In the words of the UMELCO statement,
"Given that Hong Kong will be a special administrative region within China after 1997, with an elected legislature enjoying a high degree of autonomy, it is essential that a Government structure consisting largely of local people is in place and in proper working order well before 1997."
I stress that last sentence. That does not necessarily mean direct elections or any other preconceived system which happens to have worked in some other part of the world. We must develop a system that is tailormade to bring stability and prosperity to Hong Kong in its new and particular circumstances. With that objective firmly in our sights, I believe that the White Paper on the future development of representative government in Hong Kong is about right. I agree with this step-by-step approach. The steps should be quick and not too long. All the time we must ask ourselves, "Is the developing system attracting new talent and new leadership into government?"
7.55 pm
Mr. Jack Ashley: The hon. Member for Boothferry (Sir P. Bryan) spoke with great knowledge of Hong Kong, and hon. Members listened to him with respect. A few weeks ago, I visited Hong Kong and China. It was interesting to compare the reactions in the two places. In Hong Kong there was a welcome for the agreement but some reservations about the future. The agreement was enthusiastically acclaimed in China. There is no doubt about the fundamental importance that China attaches to this agreement, because to the Chinese the agreement is a recognition of the geographical, legal and emotive issues. They are completely committed to it. Although most Hong Kong people accept the agreement, it is essential for us to recognise frankly the different reactions of Hong Kong and China.
The reasons for some disquiet in Hong Kong—I put it no higher than that—have been expressed clearly since the initialling. Naturally, the Hong Kong people feel deeply about this matter because their way of life and community are involved. No one else is involved. I am glad that the Foreign and Commonwealth Secretary has given assurances that the people of Hong Kong may participate in the drafting of basic law and will be adequately represented on the joint liaison group. There is some anxiety about possible restrictions on individual rights and freedom and about passports for British dependent territory citizens. I hope that those anxieties will be considered carefully.
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It is only fair, and certainly important, to recognise China's point of view and its problems. A capitalist Hong Kong within the territory of China could place great strains on the whole of Chinese society. We should appreciate China's difficulties. The fears of some Hong Kong people may be unfounded, because there are many good and varied reasons for believing that the Chinese are acting in good faith and will scrupulously carry out the agreement. The Chinese habitually keep their word, and they have an excellent record for keeping international agreements. The Chinese had no need to sign this agreement, and, if they wanted, they could long ago have taken Hong Kong. We must recognise that fact.
The Chinese recognise Hong Kong's unique value, and they have been reasonable during the negotiations. They value their standing in the world as men of their word. The Chinese are great realists. As realists, they have Taiwan clearly in mind. Obviously, an acceptable and accepted settlement in Hong Kong could pave the way to a settlement on Taiwan with great political and economic implications for China. By proving the fears of the Hong Kong people to be groundless, the Chinese can maintain the special value of Hong Kong. A large part of the success of Hong Kong has been built on confidence, and if that confidence is seriously damaged, the unique value of Hong Kong will be damaged. By sustaining that confidence, China can preserve and enhance the value of Hong Kong. I believe that China will do precisely that.
The Foreign Secretary and the Governor of Hong Kong deserve great credit for the success of the negotiations. I have no doubt that they benefited from the wise and valuable counsels of Sir Percy Cradock, and I am very glad that the Foreign Secretary referred to him. But the brilliantly imaginative stroke was not British; it was Chinese. I pay tribute to Chairman Dengxiao Ping, for his startling concept of "one nation, two systems". That provided the breakthrough. Making a success of that concept will provide the great challenge for the future.
In meeting that challenge, the Hong Kong Government have a vital role to play in preparing for 1997. Clearly, the most important aspect will be to involve the people of Hong Kong in decisions affecting them and their children. The Hong Kong Government have operated a different form of government from our own, but their record is a splendid one. The Hong Kong Government have enjoyed outstanding administrators such as Sir Jack Cater and many others who have made a notable—indeed, a historic—contribution to Hong Kong. They have done that under a type of colonial Government that we no longer accept in Britain. Incredibly, it has survived in Hong Kong. But the time has now come for Hong Kong to adapt to the historic changes that are soon to take place in Hong Kong.
I have heard it suggested that the British system of adversarial politics should be implanted in Hong Kong. That is a wholly unrealistic concept and fails to take account of the political delicacy of the situation in Hong Kong. It would be a "bull in a Hong Kong shop" approach which would be wholly inappropriate for Hong Kong. I do not believe that it would work.
We want to see progress in Hong Kong. What is now required is an imaginative approach—something as realistic and shrewd as Dengxiao Ping's "one nation, two systems" concept. I cannot pretend that I have the answer or that anyone so far has found the answer, but there must be a greater involvement of the people of Hong Kong in

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the Government. The form of involvement should be decided not by the British Government or by the Hong Kong Government, but by the people of Hong Kong themselves.
The great challenge for the people of Hong Kong today is to produce political leaders. There has been no role for political leaders in the past in Hong Kong, but they are greatly needed now. I hope that people who believe in the future of Hong Kong will come forward. I appreciate the complexities of the situation there, but those people, who will become the political leaders of Hong Kong, can play a major role in their own destiny. Hong Kong needs to move forward to new forms of government which manage simultaneously to give continuity and to preserve posterity, and which are consistent with the new arrangement with China.
Whichever way the problems are tackled, it is of paramount importance for the British Parliament to maintain a very close interest in the affairs of Hong Kong. It will be even more important now than ever before to have more regular debates about the affairs of Hong Kong. Without that interest, Britain will be unable to fulfil its final role in Hong Kong and will be throwing away a valuable opportunity to mould the future of Hong Kong. By regular debates, Britain can remain involved in the developing process of Hong Kong after the signing of the agreement, and can play a major and significant role in the long-term future of Hong Kong.
8.5 pm
Mr. Peter Thomas: I apologise, in his absence, to my right hon. and learned Friend the Foreign and Commonwealth Secretary for not having heard his speech in full. I heard the end of it. I was unable to hear the whole of it because I was in a Select Committee.
From the debate so far it is clear that there will be overwhelming support in the House for the draft agreement. That is absolutely right. I join in the congratulations that have been given to my right hon. and learned Friend, to the Governor of Hong Kong, and to all the people who have been associated with the remarkable and superb draft agreement. It is unique, in that it brings together two sovereign countries with totally different approaches to economic life. They have come together in a realistic way in a historic agreement. Everyone concerned with it deserves the highest possible praise.
Few speakers in the debate so far have gone into any detail. How remarkable it is to find, in the elaboration by the Government of the People's Republic of China of its basic policies, the words:
"The National People's Congress of the People's Republic of China shall enact and promulgate a basic law of the Hong Kong Special Administrative Region of the People's Republic of China…in accordance with the Constitution of the People's Republic of China, stipulating that after the establishment of the Hong Kong Special Administrative Region the socialist system and socialist policies shall not be practised in the Hong Kong Special Administrative Region and that Hong Kong's previous capitalist system and life-style shall remain unchanged for 50 years."
How remarkable it is to find phrases such as that in an official document of a Communist country. The current social and economic systems in Hong Kong will remain unchanged, and so will the life style, rights and freedoms, including those of
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"the person, of speech, of the press, of assembly, of association,…of correspondence, of travel, of movement, of strike,…of choice of occupation, of academic research, of belief".
Those rights will be ensured by law in the Hong Kong special administrative region. Private property, ownership of enterprises, the legitimate right of inheritance, and foreign investment, will be protected by law. With such wonderful phrases, how could anyone not say that it is a remarkable and admirable document?
Therefore, I have no hesitation in giving my support to the agreement. I have no doubt that I shall be in very good company, in as much as all hon. Members in all parts of the House will be with me.
I listened with great interest to the speech of the right hon. Member for Leeds, East (Mr. Healey). He was absolutely right when he referred to the report of the assessment office. That clearly shows that there has been general acceptance of the draft agreement in Hong Kong. All the representative bodies have endorsed it, and there is a sense of enormous relief in Hong Kong. Two years ago people were extremely concerned, but there is now a sense of real relief and a determination to make the agreement work. I have no doubt that it will be extremely successful.
I appreciate that certain misgivings remain and that people will have reservations, but these are far fewer than many people anticipated. I am sure that some of them will be dealt with in the next 12½ years.
The continuing interest of this House will be important, and I am certain that over the next 12½ years the Government of the day will realise that they have a continuing responsibility for Hong Kong, which will be of major importance up to 1997. I have no doubt that the Government of the day will, before the end of this period, continue to carry out their paramount duty.
It is also important that this House should interest itself continually in Hong Kong. An annual report to the House on Hong Kong, perhaps followed by a debate, would be one way of ensuring a continuing interest in the fortunes and progress of Hong Kong.
The agreement makes it clear that the drafting and passing of the law will be done by the People's Republic. It is important that considerable assistance should be given to the People's Republic in the drafting of this basic law. I have no doubt that certain lawyers and officials will assist, but it is equally important that the people of Hong Kong should be involved. That is of major importance.
Vast changes will take place during the next 12½ years. Something like 100 Privy Council orders apply to Hong Kong, and they will have to be incorporated into Hong Kong law. The basic law will also incorporate the agreement. Therefore, it must be well drafted, and it is important that everyone with an interest should get involved and help the Chinese.
Several hon. Members have also referred to the possibility of more democratic representation in the Hong Kong assemblies—be it the Legislative Council, the Executive Council or whatever. In the main, this relates to the Legislative Council. There is no doubt that when the chief executive takes over at the end of 1997 or before that, he will have to be supported by a more representative council.
I am inclined to support what the right hon. Member for Leeds, East said. I do not support the views of my right hon. Friend the Member for Old Bexley and Sidcup (Mr. Heath). It would not be right if we tried to get the Hong Kong people to enter in a hurry into a form of democratic

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representation which is similar to western democratic representation. There is no history of that type of representation in Hong Kong, which has been a colony, nor is there such a history in China. If, out of enthusiasm, we try to introduce the form of democratic politics in this country into Hong Kong, we may well cause enormous suspicions and difficulties with China.
I do not know whether there can be democratic elections without political parties, but there may be trouble if, side by side, there is a Right-wing national party and the Communist party. This matter should be left to the people of Hong Kong, who see themselves in a unique situation. They should decide the pace at which they wish to have greater representation in their legislative bodies. That is the general wish in Hong Kong. The White Paper sensibly paves the way in accordance with the traditions and situation in Hong Kong.
Above all, stability and prosperity must continue. If in the next 12½ years anything happens to upset that, the value of Hong Kong to China will be diminished. That could well result in a total change and something very different from what people hope for.
I pay tribute to the Chinese who have agreed to this draft agreement and who have worked so hard to make it sensible and realistic. The Chinese have shown that they keep agreements. I therefore have no doubt that it will be in their interests—indeed, it will be their intention—to keep this agreement absolutely to the letter of the law.
8.16 pm
Mr. Robert Parry: My recollection is that this is the third or fourth debate on Hong Kong in which I have participated. In previous speeches I have been critical of the social system in Hong Kong, the lack of democracy and the repression of civil liberties in this last bastion of British imperialism.
Tonight we are debating the draft agreement on the future of the colony. Previously I have said that I have always accepted that in the last century Hong Kong was colonised under unequal treaties, and that it was inevitable that it would return to China in 1997.
The draft agreement has been broadly accepted in Hong Kong. Mrs. Elsie Elliott, an elected member of the urban council for many years, who has been in touch with the real grass roots in Hong Kong, supports the White Paper. She made that clear in an urban council debate earlier this year. It is also supported by the Heung Yee Kuk, which represents the people from the New Territories. If Mrs. Elliott is prepared to accept the draft agreement, that is good enough for me.
I welcome the decision to set up the special administrative region of Hong Kong, which will receive a high measure of autonomy. Last Monday, along with a number of other hon. Members from both sides of the House, I met a number of members of UMELCO, which has sent a delegation here to lobby hon. Members. They have raised some questions on the agreement. One is that the people of Hong Kong should not only be consulted but should actively participate on the drafting of the basic law. I agree.
They believe as well that the Hong Kong people should also sit on the Sino-British joint liaison group. That is also right. I do not accept that only expatriates or colonialists should sit on this group. The Hong Kong people have the
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right to sit on this group as it will deal with their future. If such people are unable to sit on the group now, I hope that they will be able to do so in the years ahead.
I do not believe that UMELCO should try to act as spokesman for the ordinary people of Hong Kong. A number of UMELCO members are at present in the Gallery listening to this debate. In the main they are wealthy or middle-class professionals who claim to speak for the masses but speak only for themselves. I have received many letters from people in Hong Kong and I have seen many reports in the papers which make it clear that UMELCO does not represent them. It is a pity that they were not campaigning with me, my hon. Friend the Member for Falkirk, West (Mr. Canavan) and the hon. Member for Christchurch (Mr. Adley) many years ago when we argued for democracy, basic civil rights and consultation with the people of Hong Kong. UMELCO members are visiting London at the expense of Hong Kong taxpayers. Yet people like Dr. Ding, Mrs. Elliott, Mr. Tsin Sai Nin, Mr. Andrew Tu, who represent the grass roots, must pay to come over here from their own pockets.
It is interesting that during the summer recess we saw an unprecedented number of hon. Members visiting Hong Kong. Those visits were also paid for—by Hong Kong tax payers. Over the years few hon. Members, with the exception of my hon. Friend the Member for Falkirk, West, have argued for democracy, tabled early-day motions, or taken part in deputations to the Foreign Office to argue for human rights and civil liberties.
I wish to raise the matter of Chinese troops being based in Hong Kong until 1997. Some UMELCO spokesmen raised the matter. It is made clear in the draft agreement that Chinese troops will be based in Hong Kong. Paragraph 42 on page 36 of the White Paper makes it clear that British troops will be withdrawn and
"that military forces Sent by the Central People's Government to be stationed in the SAR for the purpose of defence will not interfere in its internal affairs."
I hope that there will not be a need for a heavy military presence in Hong Kong. Obviously, the People's Republic has the right to base its troops there, if it wishes. The young people of Hong Kong may be asked to volunteer for the forces. I was pleased when the Foreign Secretary said that during the discussions there was no talk of compulsion in bringing people into the army in Hong Kong.
On the question of citizenship, I support the suggestion that I made earlier to my right hon. Friend the Member for Leeds, East (Mr. Healey). He agrees with me about a possible haven for people who may not wish to stay in Hong Kong. A couple of academics from St. Anthony's college, Oxford, raised the matter. The United Kingdom Government should take the initiative in launching an international effort, especially among the EEC and the Commonwealth and members of the NATO alliance to bring into being an operation haven. This will provide funds for co-ordination and resettlement and quotas in a large number of participating countries, to permit those holders of British dependent territories passports in Hong Kong as well as minority nationality passports and travel documents holders in Hong Kong, to settle in those countries abroad if they so wish. I hope that the Minister will consider that point.
Will the Minister ask the Hong Kong Government between now and 1997 to make a positive attempt to improve services in Hong Kong, which affect masses of the people? I am thinking of housing. Thousands of people

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are homeless or living in boats. I hope that for housing, social security, pensions, social services, welfare and the health service, the Hong Kong Government will make a positive attempt to improve them without prodding from the British Government to do the right thing.
During our last debate I spoke about the freedom of conscience, religion and association. This is dealt with in paragraph 46, page 37 of the White Paper. I mentioned that the Catholic Bishop of Hong Kong was concerned with what may happen in the colony after 1997. In China there are many christians, Catholics and non-Catholics, bishops and priests who have been held in prison for many years. I hope that every effort will be made to guarantee that after 1997 those people will have the right to freedom of religion.
8.25 pm
Mr. David Howell: I fully share the admiration expressed on all sides for the work of the Foreign Secretary and his team in securing the agreement. There is no doubt that in difficult circumstances he secured the best possible agreement. Nor is there any doubt that, if things go right, the prospects for the future stability and prosperity of Hong Kong and that part of the world will be bright, especially with the opening up of the giant Chinese markets for the development of trade and commerce.
I shall concentrate on the international dimension, to which the hon. Member for Walthamstow (Mr. Deakins) addressed his interesting and perceptive remarks. By that I mean four things. Hong Kong is one of the key parts of the world's financial and trading system. It is one of the wealth-creating centres of the planet. It is a source of physical wealth and a range of new ideas. It is interesting that Hong Kong inspired the Foreign Secretary in a former role to develop his idea of enterprise zones, which have been introduced in the United Kingdom and now in the United States. Fourthly, it is the home of millions of free people, businesses and of tens of thousands of families, many of whom have tasted oppression in the past and clearly remember what happened in Shanghai.
So the autonomous survival of Hong Kong, without any undermining by the Communist party, is internationally vital. There is international interest in the survival of an autonomous Hong Kong. It is not merely a matter of pride, duty and interest here and in Peking, although it is also those things.
If there is an internationally vital requirement it needs two things. First, it needs a strong, internal SAR government, as many hon. Members have rightly observed. Minds will have to be made up not only on the ideas in the latest White Paper for the Legislative Council but on the Executive Council and the governorship before 1988. A decision will have to be made about whether there is to be a gubernatorial type of government with one figure in charge in 1997 or whether it is to be a government of a different sort. It will be essential for that government to develop. While the development may take time, the decisions must be made during the next two or three years. If the Peking cadres are to be kept from infiltrating the structure of government in Hong Kong, as they will naturally do, a strong government is essential.
Secondly, international interest and commitment must be secure. Some people will tell us not to worry about that,
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because Japanese and American capital will pour in as it is doing already. That is true, but the money will go out as fast as it has come in the moment when it is felt that the world has lost interest in the future of Hong Kong and that the special autonomous region is sinking back into the grey mass of greater China.
So we have an important task. We must ask ourselves what we can do. A number of suggestions have been made. I shall repeat some and make some new ones.
First, I like the idea of the annual report to Parliament that the right hon. Member for Leeds, East (Mr. Healey) and others have mentioned. It should be a report about the work of the joint liaison group and about internal developments. Indeed, I think that we should insist on that. My right hon. and learned Friend the Foreign Secretary should adopt that as a Government commitment and procedure.
Secondly, it must be right that there is involvement by the Hong Kong people in the joint liaison group—perhaps not immediately, but in due course. We shall need to press for that. Thirdly, the Hong Kong people must be allowed to help to draft the basic laws. I hope that my right hon. and learned Friend's optimistic assessment of that possibility is right and that that will happen, as it is essential. Most importantly, Hong Kong's autonomy as a separate region, with a separate political, trading, commercial and legal system must be underpinned internationally.
That means, in particular, two things. First, it means that the assertion made by my right hon. and learned Friend very strongly that what is written and settled is an internationally legally binding agreement must be made a living and continuing reality. Secondly, it means that there must be some means of ensuring that Hong Kong SAR passports are accepted everywhere, like the passports of any other sovereign state. There are two sides to the travel documents question. One is the issuing of them and the other is getting the international community to accept them. It is vital that SAR passports should be recognised throughout the international community.
I have mentioned a few things. The point I wish to emphasise is that it is within our power to achieve them. It is not true that all the cards remain even now in Peking's hands. In this debate I have detected signs of that dismal fallacy—a fallacy of the past that has no relevance today—that where there is no sovereignty, there is no influence. Any trade, diplomatic or financial negotiator or banker will confirm that that is not so. But the perpetuation of that fallacy has caused this country great grief and harm.
I am all for realism in recognising the future position of Hong Kong as an SAR of China, but realism must not become defeatism or disinterest. I fear that that would be the possibility if some of the views expressed in the debate were taken to their logical conclusion.
I believe that the agreement is the best that could be secured. However, this is not the time for opening champagne or for celebratory self-congratulations. If that tone has crept into the debate on some occasions, I regret it. The Chinese proverb says,
"Never praise a day before evening."
There is much wisdom in that when we look ahead to the enormous tasks on which we are only just now embarking in dealing with the future stability, security and prosperity of Hong Kong.
We are at the beginning of a very long and arduous journey to ensure the survival and prosperity of what has

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so far been one of the 20th century's most glittering successes and a beacon of light amidst a world of much darkness and misery. It is essential that we keep that beacon alight.
8.33 pm
Mr. Andrew Faulds: In my 10 minutes I shall not have time to make reference to the right hon. Gentleman's speech, which is the normal tradition, and nor do I intend to give way to interventions. I think that the introduction of the 10-minute rule is a nonsense, and I hope that we get rid of it.
I believe that both Governments, the British and the Chinese, and particularly their negotiating teams, deserve our warmest congratulations for having evolved an extraordinarily satisfactory agreement. And I believe that confidence—that essential component for its successful fulfilment—will be maintained by the conduct of the three parties involved in Hong Kong's future.
Concern has been expressed both here and in Hong Kong that China might not observe the agreement over the years. I strongly oppose that view—and there are very good reasons for doing so. First, historically, all Chinese Governments—whether dynastic, republican or Communist—have meticulously honoured their international agreements. Second, the process of the reunification of China will not be complete until Taiwan returns. Third, China needs to pursue the process of modernisation and will certainly not wish to damage its "open-door policy". Fourth, China needs the foreign exchange generated by Hong Kong. Finally, China may even want to learn from Hong Kong some of its dynamic commercial and trading skills.
Britain, of course, wants the agreement to work because of Britain's commercial and trading interests in Hong Kong's prosperity. But even more importantly perhaps Britain wants to tidy up the ends of empire responsibly. That she must do. What of the views of the Hong Kongers—the people most affected by the ending of the lease and the abandonment of empire? I have visited Hong Kong a number of times over the last few years, usually on the way to or from China in the company of my admirable friend, the hon. Member for Christchurch (Mr. Adley). On such visits, contacts in Hong Kong are normally pretty limited on the establishment round. But the purpose of my last visit in September—three days after the initialling of the agreement—was to elicit the reactions of the range of contacts which were set up at my specific request—and most of those were certainly not on the cocktail circuit.
Two reactions to the agreement were immediately clear from all those contacts. First was the "Chineseness" of the Chinese of Hong Kong—the feelings of attachment and affection for the land and the culture of their mother country, and that feeling seemed to override most of the adverse considerations. Second was the view stated time and again by all the groups I talked with, that the Chinese Government had met nearly all the points put to them at various meetings by Hong Kong representatives of a variety of interests. The agreement, they conceded, was much better than they had thought attainable.
But the real surprise of that last visit was the moderation and rationality of the reaction from those I thought would have responded otherwise. We Parliamentarians are great proponents and exporters of the Westminster model. But it does not always fit. And it often does not work. I had
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expected strident demands for the immediate introduction of direct elections to the legislative council. But it was not like that. Even the radical groups and the young intellectuals—a most impressive crowd of young men and women—were not arguing for direct elections now or tomorrow. They understand the unique and precarious position of Hong Kong. They want its prosperity to survive. In all the many conversations I had, most in the excellent company of the hon. Member for Inverness, Nairn and Lochaber (Mr. Johnston), these supposedly radical people seemed to me to accept, indeed to stress, the responsible view of "phasing in" direct elections and seemed to accept too the need for indirect elections for some period of time, although I must say that the functional constituencies were not universally popular.
What time, of course, is the crucial question. I criticised the Green Paper on Hong Kong's future while I was there, on its time scale of change. The recent revised White Paper has already brought the start of the process three years forward from the suggested 1988, to 1985. So far so good. However, I do believe that even this position is unduly pessimistic about the ability of Hong Kong people to comprehend the democratic procedures, although education in that area is mooted, and certainly needed.
The people of the territory have never had the chance or the choice of participation. I understand the argument about the Chinese tradition of respect for authority. But Hong Kong has had compulsory education for 32 years, since 1952. And Western pressures and attitudes have certainly been at play over many decades—whether always advantageous is another matter. Perhaps Hong Kong's people have more sense and more appreciation of Hong Kong's special situation than the local Government allow for. Democracy is an infectious thing, once given rein. And historical processes always move much faster than expected. I think that a somewhat quicker pace of change to fully representative government than the White Paper allows for, will have to be met in Hong Kong.
Then there are issues that remain out of the residual responsibility of empire. I am perturbed that the rights of protection and travel under the British Dependent Territories citizenship cannot be transmitted after 1997 to the first generation of Chinese Hong Kongers. I wonder if Her Majesty's Government have tried hard enough on that. Perhaps there was strong resistance from the Chinese Government to the possibility of such rights continuing and lasting beyond the 50 years of the two systems in one country. But perhaps we did not want an inflow of immigrants.
I am particularly concerned about the non-Chinese residing in Hong Kong —children of citizens of the British Dependent Territories who will become stateless after 1997 and who may number between 6,000 and 10,000. However, I understood the Foreign Secretary to give an assurance about them. Then there are the British Dependent Territory citizens living outside Hong Kong. Their numbers are difficult to estimate but a figure of 3,000 Indians, among others, has been put forward. Do we in Britain not have a responsibility to assure the future of those last categories? Have we not a duty to them on this demise of Empire? Fortunately, we will be able to pursue those matters on later legislation on nationality. But there are two further points that I must make. If and when direct elections to the legislative council are introduced—as I

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think that they will be before 1997—will privilege in the sense that we in this House enjoy it, of protection from prosecution, apply to members of that body?
Consideration must be given too to the abandonment of the oath of loyalty to the Queen—much as we love that admirable lady. The view has been expressed in Hong Kong that future members of the Legislative Council might not be prepared to give such an oath.
I am sorry to have had to rattle through my speech at such a ridiculous speed. I hope that the 10-minute limit will be reconsidered. However, I shall be grateful if the hon. Gentleman will make some reference to all those points.
8.42 pm
Mr. Hal Miller: I wish to treat with the subject of change raised by the hon. Member for Warley, East (Mr. Faulds) in the context of the need to maintain the prosperity and stability of Hong Kong. Several hon. Members have spoken today of the need for a realistic approach. I trust that my own note of realism will not jar on the atmosphere of eulogy and euphoria that has largely permeated the debate so far. I have already congratulated those responsible on the achievement of the draft agreement, but we are now more concerned with its implementation.
First, there is a question of prosperity. Hong Kong must prosper if it is to continue to enjoy its present autonomy, let alone the autonomy promised by China, because a Hong Kong that is not prosperous would not merit the operation of the concept of two systems within one country. China's concern for the prosperity of Hong Kong is evident from that country's expressed worries about the budget deficits in Hong Kong and the level of welfare benefits already available, which are not paralleled on the mainland.
Hong Kong, therefore, is under an obligation to succeed. That obligation has certain positive features. There has to be a response in the development of new products and the promotion of new markets. That, coupled with the political change now set in train, will inevitably involve changes in the education system in Hong Kong which—in parenthesis—I myself think are long overdue and would have hoped to see brought forward after the 1967 riots.
Negatively, there is the pressing need for Hong Kong to be protected against the swelling tide of protectionism in the developed markets of the world. That is a matter in which Britain's role and continuing interest are most important. As a member of the EEC, we are not only an important customer but the possesser of an important voice in the international bodies which regulate trade. We must secure Hong Kong's separate and autonomous representation on those bodies. Britain must also do a great deal of detailed negotiation on behalf of Hong Kong on such matters as traffic rights for Cathay Pacific Airways until 1997.
However much some people in Hong Kong may object—and some do—to continuing British involvement, and however much others may feel let down by Britain, Britain still has a responsibility to exercise. We will continue to be responsible for defending Hong Kong's interests on the joint liaison group before the year 2000.
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The second matter of importance is the stability of Hong Kong. Peking could not stand idly by and watch Hong Kong become unstable. That assumption has nothing to do with the draft agreement. It has been the case ever since 1949 that destabilisation would inevitably bring involvement. That is why the draft agreement provides for Britain to continue to administer Hong Kong until 1997, and I believe, why the British Government have declared their determination to govern until the transfer of sovereignty and administration takes place. After 1997, under the agreement, Hong Kong will still remain responsible for internal security. It is foolish to ask China whether it intends to station the PLA in Hong Kong or to introduce conscription. The Chinese are bound to say that they have every right to do so. However, there is no evidence that they wish to do so.
Hong Kong has to maintain internal security, and it will be important to maintain a strong civil service, free from political manipulation, as well as an independent judiciary. Hong Kong's commercial, financial and industrial success depends on laws that are certain and subject to independent interpretation as much as on an impartial and efficient civil service and police force.
The agreement provides for an executive to be subject to an elected legislature. The question that exercises many hon. Members is how those elections fit in with the concept of continuing British administration, the maintenance of stability and the transfer of power. On what system, furthermore, should they be based? A recent editorial in the Ming Pao paper made it plain that China had promised a high degree of autonomy but not necessarily a high degree of democracy. It is obviously important not to arouse any further the suspicions of Peking that were already a roused when the Green Paper was introduced before the negotiations on the draft agreement were completed. There is a danger that the Chinese may regard the White Paper as having been produced in an undue hurry. It is most important not to regard the elections as a test of China's sincerity about the agreement or to take them as an earnest of Britain's washing her hands of responsibility for Hong Kong. We must all understand that China would be bound to oppose the formation of a pro-Taiwan Right-wing political front. That could only have a destablising effect.
The White Paper was surely right to provide increased opportunities for training people in elections and leadership while allowing for consultation with China on the joint liaison group. We have to take China along with us and to settle Chinese suspicions, and the result is not likely to be an electoral system based on the Westminster model. As the UMELCO paper recognises, it is likely that a Hong Kong system will evolve and that Hong Kong leaders will emerge to stand up for Hong Kong's interests.
The aims of Britain, China and Hong Kong are the same—to work for a prosperous and stable Hong Kong. There will be increasing co-operation to that end, and not only on the joint liaison group for whose work the assessment office report has provided an initial agenda. People have derided the assessment office, but its report reflects views in Hong Kong, as the opinion poll commissioned by UMELCO has confirmed. In view of the attack made on UMELCO, I should like to pay tribute to it as its poll has been found to reflect all sectors of opinion in Hong Kong. Some tribute should be paid to the care and trouble that it has taken to elaborate it and for the excellence of its memorandum.

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Chapter 4 of the report draws attention to the items that Hong Kong people want to be dealt with on the joint liaison group. Most notable among them are the drafting of the basic law and the possible conflict between the laws of Hong Kong and that basic law. That issue is still a source of much anxiety and must be resolved. They also want the joint liaison group to deal with the appointment of the chief executive and future nationality. However much some people in Hong Kong might feel aggrieved, especially the young ones who are angry that their future has been decided by Britain and China in this way, and however much older people might feel bitter about the consequences of the British Nationality Act 1981, Britain has to remain responsible until 1997. If Britain gave up that responsibility, China would assume it—a vacuum could not exist.
The success of the two systems in the 50 years after 1997 depends on the success of the 12 years remaining until that date. Of course Hong Kong people are worried about changes in China—they always have been. It has never been possible to see more than five years ahead in Hong Kong. The draft agreement merely preserves that. The task in the next 12 years is to knit Britain, China and Hong Kong together ever more closely through the joint liaison group and through practical projects of cooperation such as the nuclear power plant, the telecommunications project, the Canton motorway, the second harbour crossing and so on. Hong Kong has an important role to play in the development of China and as an example to Taiwan of two systems in one country. However, its ultimate success will depend on the confidence that its people show in their own future and the efforts that they make to secure their own prosperity and stability.
8.51 pm
Mr. Dennis Canavan: I welcome the draft agreement in principle. It marks the beginning of the end of a long era of British colonial rule which dates back to the opium wars of the last century when Britain grabbed Hong Kong from China by an act of imperialist aggression and trickery. As far as we can gather, the draft agreement is generally welcomed by the people of Hong Kong. I say "as far as we can gather" because the method of assessment of opinions in Hong Kong is imperfect. By saying that, I am not making a personal attack on those involved in the assessment office. They had a difficult job and it was made more difficult by the fact that there is no representative government or assembly in Hong Kong. Indeed, there are no elected representatives in Hong Kong with any meaningful power and this is a point to which I shall return later.
Despite the general welcome of the agreement, some Hong Kong people have some reservations and fears. Those fears and reservations include the role of the people's liberation army, the possibility of conscription, nationality rights, passport rights, human rights and personal freedoms, freedom of religious practice, the desire to participate in the work of the joint liaison group and the desire to participate in the formulation of the basic law. There is also a general fear about undue interference by Peking. The best way in which to alleviate those fears and reservations and the best guarantee of preserving all that is worth preserving in the Hong Kong way of life is to maximise the autonomy of the people of Hong Kong. Complete independence is not an option—it never was.
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Sovereignty will ultimately be transferred to the People's Republic of China but even without complete independence there could be a high degree of self-determination. That would involve a high degree of internal democracy replacing the existing system of colonial patronage.
Last month, the Hong Kong Government published a White Paper to which several right hon. Members, including the right hon. Member for Old Bexley and Sidcup (Mr. Heath) have referred. I do not often agree with him, but I entirely agree with what he says about the White Paper. It is too little and too late. It proposes that, next year, an elected element will be introduced to the Legislative Council. It is worth reminding the House that, despite the introduction of that elected element, not one member of the Legislative Council will be elected directly on a universal franchise. Less than 50 per cent. of the Legislative Council in 1985 will be elected by any method. The functional constituencies which are proposed are unnecessarily divisive—they might reinforce existing or potential divisions in society. Moreover, the White Paper contains no proposals for elections, direct or indirect, to the Executive Council in 1985.
I understand what right hon. and hon. Members have said about it not being desirable suddenly to introduce tomorrow or next week a mini-Westminster model of democracy in another part of the world with a different culture, a different way of life and different traditions and call it the ideal model of democracy. There must be a phasing-in programme. Some of the pressure groups that I met during my recent visit to Hong Kong made that point strongly. However, it would surely not be unreasonable to suggest the target that by, say, 1990, the entire Legislative Council should be directly elected on a universal franchise, that the Executive Council, or whatever body replaces it, should be elected indirectly from the members of the Legislative Council and that the head of that council—the governor, chief executive or whatever he is called—should also be elected from the membership of the Legislative Council. The White Paper's proposals are far too pussy-footed, and one of the reasons for the go-slow attitude is that—I was sorry to hear this view expressed in the House as many people regard it, rightly or wrongly, as the mother of democracy—some people think that democracy is not bad as long as there is not too much of it and it is possible to predict who will win the elections. Some people seem to be afraid that those who win the elections may be a bit too radical or Left-wing and that perhaps the odd nasty Socialist may get elected to the Legislative Council. If people genuinely believe in democracy through direct elections they should not be two-faced. Adopting double standards and saying that democracy is all right so long as we win is hypocrisy rather than democracy.
I would not say that the Chinese version of Socialism is perfect, but it manages to feed the billion people of China. Anyone who imagines that the naked unbridled capitalist economy of Hong Kong could be transplanted to the People's Republic of China and continue to feed all those people is living in cloud-cuckoo-land. Although the draft agreement provides that for half a century after 1997 there will be guaranteed co-existence for a capitalist system alongside the Socialist system, no realistic politician, on whatever side of the ideological divide, could expect such co-existence to continue for ever. There will have to be some kind of accommodation between the two systems.

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The Hong Kong economy was largely built on the hard work and endeavour of its people. Unfortunately, this was sometimes accompanied by the exploitation of cheap sweated labour by multinational capital. That exploitation will not and should not survive and I hope that it disappears long before 1997. That is why, despite the provisions of the draft agreement, there will eventually have to be some accommodation between the two systems so that eventually all the people of the reunified China can live together in peace, equality and dignity, with respect for one another's human rights and a higher degree of social justice for all.
9 pm
Mr. Robert Adley: I am fortunate that you, Mr. Speaker, have returned to the Chair and called me as the clock shows 9 pm when we escape the appalling penance of the 10-minute limit. You will correct me if I am wrong, Mr. Speaker, but I understand that that is the position. It is a great tribute to your judgment that you have called me at this time.
Mr. Speaker: Order. The hon. Gentleman tempts me. There is no longer a 10-minute limit on speeches, but quite a number of other hon. Members wish to take part in the debate.
Mr. Adley: Thank you, Mr. Speaker. I have asked my hon. Friend the Member for Orpington (Mr. Stanbrook) to give me a swift dig in the ribs when I reach nine minutes.
I hope that those who observe our affairs will not take the thinness of attendance at this debate as in any way suggesting any lack of interest in the future of Hong Kong. I believe that more of us have spent more time genuinely worrying about whether we can get this matter right than any other single issue for many years. Members in all parts of the House are deeply aware of our responsibility to try to ensure that the people of Hong Kong have the future that they want.
I shall not take up time repeating the tributes to which my right hon. and learned Friend the Foreign Secretary and his colleagues are so clearly entitled. As he rightly said, we must remember the deep roots of history underlying the Hong Kong situation. We know the political reality, but the practical reality is also legion.
Only 3 per cent. of Hong Kong's fresh water supply can be obtained from the present territory of Hong Kong island, Kowloon and Stonecutters. When we talk about what the Chinese have done in the past and might do in the future, we should remember that they could at any time have turned off the water supply and taken over. The best guarantee that the people of Hong Kong have as to the likely behaviour of the Government of the People's Republic in the future is the reality of their behaviour since 1949.
My right hon. Friend the Member for Guildford (Mr. Howell) suggested that sovereignty was not the key issue. However, it always was for the Government of the People's Republic of China. It is no use our suggesting that it was not, or is not, an important issue for them. Although they could have taken over Hong Kong any time they wanted to, the negotiated return of Hong Kong to mother China is and always was the key emotive issue for them. More than two years ago, the previous Chinese ambassador said to me that until sovereignty was conceded
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nothing would be possible, but once sovereignty was conceded everything would be possible. As a result of that, I was perhaps slighty less surprised than some hon. Members at the progress that we have been able to make since we conceded sovereignty.
Two points require our attention. One is the pace of change. Those who hold power in Hong Kong now like it, and want to hold on to it. They have not been elected to it and have an obvious incentive to resist change. The idea of an annual debate is acceptable, but it is a peripheral issue and to suggest that it is the overriding priority emerging from the debate is indicative only of the priorities of those who have put the idea forward as though it is the most important thing in the world.
Those who have power in Hong Kong at the moment were appointed by the governor, who was appointed by Her Majesty's Government. They have always looked to London as the ultimate source of their patronage, and they want to continue to look to this place as the source of influence for Hong Kong. However, it is in Hong Kong itself that the changes must take place. Therefore, we should be encouraging change in Hong Kong: not change for change's sake but because it is vital that the people of Hong Kong should equip themselves with their own political institutions long before 1997.
I have never been a sycophantic supporter of UMELCO, so all that I have to say about it is to quote a sentence in a leading article in the Hong Kong Standard on 11 May which said:
"For a self-proclaimed mirror of Hongkong opinions, Umelco seems to reflect not so much the daily concerns of the Hongkong public but the obsessions of the few."
By quoting that, I am suggesting to my hon. Friend the Minister of State, Foreign and Commonwealth Office, and the Government that we must broaden our listening as we go into the next 12 years. We simply cannot allow a handful of people who are appointed by the governor to be taken as solely, or even mainly, representative of the genuine voice of Hong Kong. That is why I agree with the point that my right hon. Friend the Member for Old Bexley and Sidcup (Mr. Heath) made, particularly about the young people in Hong Kong.
Most hon. Members have spoken of citizenship. We must not forget that there are between 3,000 and 4,000 people in the Indian community, many of whom held British Indian passports before India achieved its independence in 1947. The Government must pay particular attention to that group.
My second point is about Chinese intentions. I believe that the Government of the People's Republic of China intend to observe both the spirit and the letter of the agreement, but they are looking for advice and guidance on the best way to achieve this objective. They wish to encourage change, provided it is change that aids in the maintenance of stability in Hong Kong. If I were to be so presumptuous as to give the Government of the People's Republic of China some advice, it would be to involve the people of Hong Kong in the creation and development of their own institutions. A motto of "Invite, involve and entrust" would be a good way for the Chinese Government to ensure stability in Hong Kong by keeping the people content and confident in their own future. I agree with those who have said that the people of Hong Kong should be involved in the drafting of their basic laws. After all, they themselves will have to live under the laws.

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One of the Government's main duties must be to encourage change and to keep an eye on those who want to stifle it. I do not share the concerns about the sincerity of the Chinese Government expressed by my right hon. Friend the Member for Guildford. If he is concerned about the sincerity of the Chinese Government's intentions, then surely he will agree that the best way to keep a check on that sincerity is to ensure that the people of Hong Kong are equipped with democratically elected institutions at an early date. The development of such institutions by Hong Kong people will make it far more difficult for the Chinese Government to interfere.
Numerous concerns are expressed daily by the people of Hong Kong, but in many ways it is extraordinarily interesting that we have 12 years to iron out the outstanding problems. One could only wish for the same thing for industrial disputes. The timing between events being discussed and action being taken causes trouble, and the shorter the time, the more the trouble. These 12 years are precious years and they are more than enough time to deal in detail and at reasonable length with the many problems that understandably concern the people of Hong Kong.
It is interesting that the agreement has been objected to by only two groups. One group is the Taiwan regime and the other is the Government of the Soviet Union. That speaks for itself. There is nothing that the Taiwan regime fears more than the ability of the Government of the People's Republic peacefully and quietly to conclude an agreement with Her Majesty's Government which is acceptable to the people of Hong Kong, which is implemented without too many problems and which shows the Taiwan people, especially the young, that the scare stories which are constantly being spread by Taiwan and its agents in Hong Kong about the intentions of the Government of the People's Republic are unjustified. I am more than happy to commend the agreement to the House.
The best guarantee for the future would be a broadly based and legitimately enfranchised representative body. I hope that the Government will listen not only to those who are appointed by the British Government but to a far broader base of people in Hong Kong. I wish the millions of citizens of Hong Kong the very best for the future. We shall be keeping more than an eye on them because we are responsible for their welfare for at least 12 years. The question is not whether the House will monitor what is going on. The Chinese do not want to take over Hong Kong and they do not want the British to relinquish control before 1997. We shall indeed be keeping a close eye on things, and we wish Hong Kong well.
9.12 pm
Mr. Tom Clarke: The hon. Member for Christchurch (Mr. Adley) made a crucial point when he referred to the views of the Chinese towards the Soviet Union and on the likely attitude of the Soviet Union towards the agreement. The debate has been interesting and realistic. It has reflected the views of the House as expressed in the various debates that took place during the negotiations. It was accepted that the agreement would be immensely difficult and complicated and I would be churlish—I do not intend to be so—not to acknowledge that the agreement was hard fought and entailed close examination of the small print. In common with all those who have contributed to the debate, I
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welcome the agreement. However, no one should be complacent while we study these matters over the next few months and on into the coming years.
I agree with those who have suggested that we shall be hearing about these matters for a long time to come. The leader in yesterday's edition of The Times made an important point, although I did not agree with the leader entirely. It offered the opinion that
"Both the full Commons and its Select Committee on Foreign Affairs must meanwhile keep closely in touch with the colony's fears and aspirations and the Government should be generous in allocating parliamentary time."
That is important, but equally important is the reference to "fears and aspirations". I happen to believe that the greater of the two is aspirations. The agreement offers a great deal of hope to the people of Hong Kong and to others well beyond its borders. I say that in the spirit in which comments have been made by many of my hon. Friends. We would not have devised the system of government that we have seen in Hong Kong in recent times if we had not believed in democracy, and we believe that a strong case should be made for improving democratic processes in Hong Kong. Having said that, I believe that the people of Hong Kong are beginning to indicate that they, too, take that view. I visited Hong Kong in March with my hon. Friend the Member for Hamilton (Mr. Robertson). We were impressed by the educational system and by community involvement, as we saw it. The young people whom we saw taking part in those activities, and in industry and in the public service in Hong Kong are the very kind of people who, notwithstanding the agreement, will say that they want to have a role in shaping their society. In my view, they are absolutely right.
I believe that the agreement is important. We recognise the importance of Hong Kong in trading matters. We also recognise that importance in the context of our relationship with China and the wider world. I was interested to read among the views expressed in the consultative document an assessment of the reaction to the agreement by the Hong Kong Federation of Education Workers. It is to be found on page 23:
"The solution of the Hong Kong issue under the innovative guidance of the 'one country, two systems' concept will be conducive to maintaining the stability and prosperity of Hong Kong. Moreover, the success of this 'one country, two systems' arrangement may embody a more far-reaching international significance."
I believe that to be right. I believe that the agreement, and the events which will follow, can have a very profound international significance. As my hon. Friend the Member for Hamilton is aware, because we visited the region, China has in Shenzhen an economic shop window which suggests that it is very much in the interests of China that Hong Kong should be seen to be prosperous and successful.
In view of the international impact of the agreement, it is right that the House should consider carefully its meaning in that context and beyond. In previous debates and discussions, hon. Members, including myself, referred to the refugee problem. Today the Secretary of State for Foreign Affairs repeated a view which he has twice expressed in the Chamber on the matter. He has said, broadly, that the refugee problem has nothing to do with the agreement; it ought to be left on one side and should be dealt with at another time. I happen to believe that it has everything to do with the agreement. The fact that refugees are living in those conditions and in that society

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is an affront to everybody who is involved in the discussions. I should have liked to hear a great deal more from our friends in Hong Kong about an attempt to seek a solution to the Vietnamese refugee problem.
I should like to refer to other views which were expressed in the document dealing with the assessment. On page 41 we are told that a group of individuals has said:
"We do not care what happens to Hong Kong for our sake. However, we worry for our children".
That is an admirable expression of an opinion which people understandably hold. I am sure that all hon. Members wish those who express such a view success in the objectives that they have set. Nevertheless, I believe that even the children of those people do not want the refugee camps to be continued but an international agreement to be arrived at. Notwithstanding the views which the Foreign Secretary has expressed previously on this matter, I believe that it would help us considerably if a new British initiative were taken. I am sure that hon. Members would encourage the Foreign Secretary to take that view.
Mr. Faulds: My hon. Friend has the luxury of being able to allow interventions which those of us unfortunate enough to speak between 7 pm and 9 pm were unable to do. Does he agree that the efforts that the Hong Kong authorities have put into taking care of the refugees are extraordinarily concerned and they have done a good job but that it is totally unreasonable to expect them to bear that burden on their own? It is essential that not only should the international community accept obligations in that area but that the British Government should be far less mean-minded in future in their attack on the problem.
Mr. Clarke: Yes, I am delighted to agree with my hon. Friend. When my hon. Friend the Member for Hamilton and I visited one of those camps, we were full of admiration for the work being done. Nevertheless, we noted that the camp was next door to a prison which we had to go through in order to see the refugees. Excellent work is going on, but I entirely agree that the Government should apply themselves to trying to seek a permanent solution to that difficult problem.
During future debates—I have no doubt that there will be debates on the Bill which the Foreign Secretary mentioned in his opening remarks—there will be further discussions about nationality because grey areas remain. There will be discussion about land ownership, defence and, above all, human rights. As those discussions continue, the relationship that has been developed between Britain, the people of Hong Kong and the Government and people of China can be improved, good though many of us believe those relations to be.
The Foreign Secretary said that the Chinese contribution to the discussions represented vision and realism. The very fact that he said that at this difficult time in international affairs will be welcome. I take the view, which I believe is shared by many of my hon. Friends, that the agreement is well worth while. But it ought to be seen not as the end of the story but as the beginning of what could be a new era of hope for the people of Hong Kong in terms of their attitudes to social democracy and so on, and, perhaps even more importantly, to the realisation of
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world peace. In the negotiations that have taken place we have set an example to the rest of the world which others might be encouraged to follow.
9.22 pm
Mr. Michael Marshall: I am glad to follow the speech of the hon. Member for Monklands, West (Mr. Clarke) because I found a great deal with which I could agree. May I at the outset declare my interest as a parliamentary adviser to Cable and Wireless. I do that in the particular context of Hong Kong because, as many hon. Members will know, Hong Kong's raison d'être as a financial and communications centre is a key element in the future not only of Hong Kong but of the People's Republic of China.
It was in that sense that I found myself in agreement with my right hon. Friend the Member for Old Bexley and Sidcup (Mr. Heath) when he talked about the competition between Singapore and Hong Kong. Therefore, if the House will allow me, I want to deal a little further with the experience of Cable and Wireless in Hong Kong and in the People's Republic of China. Its experience in the past and plans for the future, and above all the commitment which it has made to that triangular relationship, is of some significance.
It is fair to remind the House that the commitment which companies such as Cable and Wireless have made in Hong Kong, which goes back many years and involves many hundreds of millions of pounds of investment, has presently assured Hong Kong its standing as the leading communications centre in the far east. When we ally to that the joint ventures which have been agreed with the People's Republic of China, the implications become of extreme importance.
A co-operative agreement has been made for a microwave link between Guandong province and Hong Kong. That opens up communications with south China and connects with the Hong Kong-Guengzhou communications system. There is a telecommunications service agreement for exploration work in the south China sea. That is done through the Huaying Nanhai joint company. If energy resources are found in that part of the world, it will have a strong effect on the industrial development of China and Hong Kong and that will be important for companies such as Cable and Wireless and BP, which is directly concerned.
The agreement for a joint venture to provide a telephone service for the Shenzhen special economic zone is indicative of the way in which a British company operating in Hong Kong can provide the infrastructure for much of the new development on which the People's Republic of China depends.
China is to be commended on the way in which a cordon sanitaire has been introduced through the economic zones to allow an integration and interface between the two systems operated by Hong Kong and the PRC using the economic zones as a buffer. It is in Britain's interests as well as Hong Kong's interests to ensure that the economic zones are a success. A number of Hong Kong Chinese industrialists are already investing in the zones, and further afield in Shanghai. That is wise.
I support what my right hon. Friend the Member for Old Bexley and Sidcup (Mr. Heath) said about investment. The British share of investment and trade in Hong Kong has declined rapidly. American and Japanese investment has increased substantially, as has that from other

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European countries. Like many other hon. Members I visited Hong Kong recently. I am grateful to the Hong Kong Government for all that they did to enable us to see what 'was going on. However, I was depressed that already substantial numbers of Japanese and American companies are active on the ground and considering how they can establish manufacturing facilities in Hong Kong with a view to trading from Hong Kong with the People's Republic of China and moving progressively into the economic zones and hence into a wider Chinese context.
I urge British industrialists who are looking for future markets to think carefully about the opening up of China through Hong Kong. Some of us have been involved in that part of the world for 20 years. We know that it is a long haul. It took about 10 years for Cable and Wireless to conclude some of its early agreements. But agreements which the People's Republic have made since 1949 in trade and industry have been honoured. The record is good.
I urge British and Hong Kong companies to look to China for a strengthening of the link that already exists. That is in their interests. The greatest underwriting for the future lies in that investment for Hong Kong, Britain and China.
I have made those points by way of preamble. I also want to discuss some of the wider questions that have come from the agreement. However, industrial matters are of a wider significance than was perhaps appreciated until the agreement was signed. We now see the opportunities opening up. The examples that I have cited reflect farsighted vision in the past.
I am sympathetic to the whole question of Hong Kong passport holders. I should like to put one or two thoughts to my hon. Friend the Minister in the hope that he will convey my suggestions which I make as a contribution to further discussion. This is a complex matter. I do not pretend that what I am about to propose can be assumed automatically to be appropriate. I should like my proposals to be tested.
As a number of hon. Members have said, there is a wide range of existing passport holders in Hong Kong, and that raises serious problems. Already there are some problems for the so-called British dependent territories passport holders. There is plenty of evidence, from conversations that I and others have had, that those who come into this country with such passports experience difficulty, even as regular travellers, in making their way through customs and immigration. From time to time, there are particular problems with delays, investigations and so on.
It would be helpful to have a visa stamp in the passports emanating from Hong Kong that are used by regular travellers. Those regular travellers who can establish—I believe they can do this easily—a bona fide reason for their regular travel patterns should have their passports stamped with a visa. That would follow the American path whereby, after the initial visa is stamped, the passport holder can, in due time, move into a higher category of unlimited access. The British dependent territories passport allows that system, but I believe that my principle would help in two ways. First, the visa stamp system would facilitate the movement of regular travellers with a bona fide reason for travel. We could reasonably put it to the customs and immigration authorities that the movement of those travellers should be facilitated. Trade
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and investment and the links between Hong Kong, Britain and China would be facilitated if the passage of travellers were eased in that way.
Secondly—I hope that my suggestion has a wider significance and provides additional reassurance to Hong Kong residents—it would follow that, when the passport expired, the visa stamp would be transferred from passport to passport. After 1997, the authorities in the People's Republic of China could be reasonably expected to honour such a visa stamp. People are genuinely worried about the future of their passport after 1997. I believe that the use of a visa stamp would help to alleviate the difficulties. Having moved in that direction, I should expect the Government to look to the Commonwealth countries and members of the Community to follow suit. The assurances about access and, therefore, freedom of travel might prove helpful in the short term and, above all, in the longer term.
I do not agree entirely with my hon. Friend the Member for Christchurch (Mr. Adley), although he made a good speech. He brushed aside the importance of accountability to the House. I support the right hon. Member for Leeds, East (Mr. Healey) in putting forward a proposal, which I advanced in Hong Kong, for an annual debate in the House. I suggest that a convenient time to hold that debate would be during the annual foreign affairs debate. I believe that there should be a printed report on the work of the joint liaison group. It is true that the assessment office has provided us with a worthwhile agenda. but the provision of an annual report would help us to focus our debates. We may not want to debate this issue in every foreign affairs debate, but over the next few years such a debate would provide us with a check list on which we could work. It is important for the House to be seen to commit itself to that process of continuing observation and comment. In considering the work of the joint liaison group, there may also be opportunities for us, through the Select Committee system, to make a positive contribution. I accept that a great deal remains to be done.
With regard to the question of a wider franchise, I am somewhat reluctant automatically to argue that the Westminster model should be transplanted to Hong Kong. I believe that progress in that direction should be left essentially in the hands of those whose future lies in Hong Kong. In saying that, I am not overlooking the fact that there are probably many people in Britain who can make a contribution. This House and Her Majesty's Government have a continuing responsibility. I hope that a genuine feeling for democracy will be nurtured within Hong Kong on a basis that is acceptable to the people there as they face the realities of their future relationship with the People's Republic of China.
When I argue that we should continue to look at the role of Hong Kong—and the relationship of Hong Kong not only with Britain but with China—I do so because I strongly believe that in this House there are many friends of Hong Kong. Many of us have had great opportunities to be involved in trade and industry there. We have made many friends and have come to admire the tremendous success story that Hong Kong embodies.
The partnership between essentially Chinese people and British people has had many things to commend it. Despite my earlier strictures about the levels of British trade and investment, there are still outstanding examples of that partnership. In its own way, it has drawn on the peculiar

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skills and character of the two peoples. I hope that it may long continue, and that this House will play its part in ensuring that it does.
9.37 pm
Dr. John Marek: I regard the debate as one of the most important in this Session of Parliament. I think that it is as important as any other debate that may arise from the Queen's Speech.
I regard the economic development of Hong Kong, its stability and its future prosperity as of the first priority. I agree with the hon. Member for Arundel (Mr. Marshall) that we should seek to arrange the affairs of Hong Kong with the help of the people of Hong Kong—I shall develop that theme later—so that not only do they prosper but there are economic ties with the adjoining parts of the Chinese mainland.
I should like to refer to two points on which I think there has been a certain amount of fudging. The first is whether the part of Hong Kong that was ceded in perpetuity is viable. Everyone says that it is not viable. I also think that it is not viable. It is not viable because, as the hon. Member for Christchurch (Mr. Adley) said, the Chinese could turn off the water taps. It might prove to be very difficult if the water taps were turned off. However, any part of the globe can be viable if other nations have the will to support it.
The Falkland Islands is not a very viable colony. However, it seems to be of strategic value and there may be wealth from the sea and from Antarctica, so we are prepared to spend hundreds of millions of pounds in ensuring its viability.
I remind the House that there is a place in a somewhat similar position to Hong Kong—the city of West Berlin. It is an island surrounded by a political system completely different from its own, yet it is viable. It thrives and its people are satisfied.
I am not advocating that we should take an opposite view to that of the White Paper and that we should stick out for the continued independence of that part of Hong Kong. That would be extremely difficult, but more important, I do not believe that we should do so because the original treaty was unequal. It was forced on the then Chinese Government, and I agree with the People's Republic of China that it was unequal. The People's Republic would have every right, if it wished, to insist on gaining sovereignty.
How do we equate that undisputed right with the right of the people of Hong Kong to self-determination? That does not necessarily mean independence, or becoming part of China or part of the United Kingdom. My definition of self-determination is that we should accede to the wishes of the people. How therefore, do we equate China's natural desire to regain the sovereignty of Hong Kong with acceding to the wishes of the people of Hong Kong?
There is no guarantee that that can be done, but I have every confidence that the People's Republic will act with integrity. If the people of Hong Kong wish to proceed along the lines of the White Paper, I have every confidence that the principle of self-determination for the people of Hong Kong will be satisfied.
I give credit to the People's Republic and to the Foreign Secretary for taking this first giant step—there is still a long way to go—along the road to satisfying the
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principles to which I have referred. Clearly, anxiety and apprehension will increase as we get nearer to 1997. There is no way in which that can be avoided. We must therefore do everything in our power to ensure that there is continued stability in the colony.
There is no guarantee about what will happen after 1997. This House should order its arrangements so that it does its best for the colony up to that time. After that, there is nothing that we can do. We live in a world of nation states where sovereignty is sacrosanct, and we must realise that. It is, I believe, appreciated that when we hand over the welfare and future prosperity of the people of Hong Kong it will become the responsibility of the People's Republic of China.
How can we be satisfied that the people of Hong Kong agree with the White Paper? I am not completely satisfied that the assessment office has done enough. I admit that it tried to do this work independently and that it has genuinely sought to obtain the views of different bodies, institutions and people in Hong Kong. It received a few thousand replies, generally from people who are articulate. Unlike almost every other hon. Member who has spoken, I have not been to Hong Kong, but I know that arrangements were made to take down any views which were given to the assessment office if the person concerned did not wish to write them down.
There is no substitute for democracy, and that means one person, one vote. Until there is a democratic declaration by the people of Hong Kong that they wish to go along the road of the White Paper, I cannot be completely satisfied—it does not matter how elaborate the assessment has been—that this is their genuine wish. Some Conservative Members, excluding those who made the last few speeches, implied that democracy is all right for the United Kingdom but is alien to Hong Kong and China. I find that elitist attitude objectionable. I am certainly not advocating adversarial politics, politics based on the Westminster model or on any of the other western European models. Democracy means that on an issue as important as this one can go to a polling station and cast a secret ballot to say yes or no to a proposal. I need hardly remind Conservative Members that they advocate ballots for certain matters pertaining to trade unions from time to time. People are people whether they live in this country, Hong Kong or elsewhere.
It is important that the White Paper is understood by the people of Hong Kong. They must take time to reflect on it and come to a decision. The right hon. Member for South Down (Mr. Powell) is muttering the question, "What happens if they say no?" I have every confidence—
Mr. J. Enoch Powell: What happens if they say yes?
Dr. Marek: If the right hon. Member wishes to intervene, he may do so, but I shall take issue with him.
Regardless of what other hon. Members think, democracy is an absolute prerequisite for the development and determination of any peoples in any country. The people of Hong Kong should be able to vote on the proposed treaty.
I am confident that people who are sensible, everywhere on the planet, will realise the position and history of Hong Kong, and will say yes. If Conservative Members are not happy about that they are performing a charade because they are congratulating themselves on a

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wonderful treaty and saying that it is good for the people of Hong Kong. I notice Conservative Members smiling. If that is their attitude they are being dishonest. They should be honest, and put the treaty to the test via a referendum.
Mr. Deakins: Does my hon. Friend agree that even the British people do not have the right to pronounce on the treaty or the subject of tonight's debate, because treaties are under the royal prerogative? We are being asked to approve the Government's intention to sign the treaty, but not the treaty itself, but the British people, although we are a democratic nation, are not being asked to approve the treaty.
Dr. Marek: There are shortcomings everywhere. In a recent debate the Secretary of State for Education and Science made a memorable phrase when he said that indirectly elected bodies are nearer to the democratic end of the spectrum. That caused a great deal of laughter, but it is true. A representative democracy is never perfect. Our problem is to get a representative system of democracy as near to perfection as possible. Simply having an assessment office is not good enough. I suggest that we can get nearer to true democracy by having a referendum on the White Paper and how Hong Kong people envisage their future Government.
I take up the pleas of other hon. Members who have said that there must be progress to some sort of directly elected body, whether the Executive Council or the Legislative Council, or another. The hon. Member for Christchurch (Mr. Adley) put it well in his speech when he said that we should involve the people of Hong Kong in the development of their institutions. Other hon. Members said that we should make haste to do so. I do not disagree with that. We have time. It is only 1984 and we have until 1997.
But it is of the utmost importance that we make some sort of progress during that period, so that by 1997 we have a directly elected representational Government or an advisory Government. At this stage, I am not too concerned to spell out exactly which way things should go. That largely depends on the people of Hong Kong and how they see their institutions developing. But it is vital that we should have some form of directly elected democracy in Hong Kong. That is our duty and we should not fudge it. We should not say that Hong Kong and China have never had any democracy and so they should not have any now, because whose fault is that? We should not fudge the issue.
I reiterate that I am satisfied with the White Paper. But I look to the Government to take the people of Hong Kong into their confidence in their future actions.
9.50 pm
Mr. Ivor Stanbrook: I shall concentrate on two matters: the position of members of Her Majesty's Overseas Civil Service now in Hong Kong, and the question of nationality.
On the first issue, Hong Kong is a British colony like any other. Its transition from that status to that of a part of a foreign state involves the same problems for its Government servants as would its transition to full independence. Its colonial status comes to an end on 30 June 1997 and those members of Her Majesty's Overseas Civil Service who have been recruited by the Secretary of
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State outside Hong Kong, but who are then serving there, will be faced with such changes of employer and conditions of service that they will be entitled—as would members of Her Majesty's Overseas Civil Service elsewhere—to leave their jobs on accrued pensions plus lump sum compensation for loss of office. At least, that is what I hope will happen.
I must declare an interest in that I retired from the Colonial Service, now called Her Majesty's Overseas Civil Service, in 1960, with lump sum compensation and a pension which I still enjoy, thanks to the generosity of the Nigerian Government. To their credit, they paid only recently the final instalment of the capital sum needed in order to pay the pensions of all their former expatriate staff.
The question is whether the expatriate staff of Hong Kong will be equally fortunate. My right hon. and learned Friend the Foreign Secretary has not said so specifically. When I intervened in his speech and asked for an undertaking that expatriate staff now serving in Hong Kong would be treated no less favourably than were expatriate staff so situated in colonies that have already achieved their independence, he used a form of words to be found in the White Paper but did not specifically give me that assurance. I hope that my hon. Friend the Minister will give that assurance tonight, because I respectfully submit that it is simply not possible to say that British expatriate staff now serving in Government posts in Hong Kong will be treated any less generously than were the British expatriate staff of other colonies that have received independence.
In all previous cases there has been a public officers' agreement with the successor Government, guaranteeing expatriate staff certain rights. First, serving officers who continue to serve the successor Government remain eligible for transfer or promotion elsewhere in the Overseas Civil Service. Secondly, the successor Government agree not to unreasonably withhold consent from any officer wishing to accept a transfer or promotion, and agree to preserve his pension rights on transfer. Thirdly, pensions derived from service after independence—in this case, after 1997—attract supplementary pensions for overseas service, payable by the successor Government. Fourthly, in the event of premature retirement casued by constitutional changes, the officers concerned receive lump sum compensation from the Government.
Those pledges were designed elsewhere to reassure expatriate civil servants in the colony concerned and to encourage them to remain in the service of the colony after independence, if they were required.
I should like an assurance that the Government intend to apply a public officers' agreement to the officers of the Hong Kong Government service. That is very important because, in the case of Hong Kong, the relevant agreement is with a foreign Government—one that is actually in being, rather than one that is being offered independence on terms—and, furthermore, a foreign Government that has no financial responsibility for the implementation of the agreement.
If China will not pay for the pensions and redundancy terms of Hong Kong expatriate staff, I should like to know who will pay. It may be said that the Hong Kong special administrative region will pay. The officers concerned should be told without delay so that they can make their own decisions about their future careers.

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According to part IV of annex I of the draft agreement, expatriates will be employed
"only in their individual capacities".
They will not be entitled to "privileged treatment" which I take to mean treatment special to expatriate staff, such as expatriate allowances or overseas leave with passages paid. The agreement also specifically states tat, after 1997,
"heads of major government departments"—
and in some cases deputy heads—will be changed. Those posts will not be held by expatriates.
Those changes are not unreasonable, but they will fundamentally affect the conditions of service of the officers concerned. Clearly they will justify the early application of a public officers' agreement, such as we have had in the case of all former colonies, to all expatriate staff in Hong Kong.
It is not good enough to say that this discussion is premature because the event will not take place for more than 12 years. The whole point of the arrangement is to reassure existing staff, all of whom hold positions of great responsibility in the colony and carry on its government at senior levels, about their future. It is very important that the Government should make the position clear. I therefore trust that very shortly, if not this evening, the Government will give an undertaking to all expatriate staff serving in Hong Kong that they will be treated in this respect not less favourably than expatriate staff in other colonies have been treated on independence. I trust that the application of these arrangements will be made now and that the effective date of the public officers' agreement providing for pensions to be payable in Britain in sterling at a fixed rate of exchange will be from the date of the agreement with China as is normally the case with independence agreements.
It being half past Ten o'clock, the debate stood adjourned.

Hong Kong

  BUSINESS OF THE HOUSE
  Ordered,
  That, at this day's sitting, the Motion relating to the Hong Kong agreement may be proceeded with, though opposed, until Twelve o'clock.—[Mr. Major.]
  Question again proposed.
  Mr. Stanbrook: Nationality issues are rather more complex. We thought when we passed the British Nationality Act 1981 that it was substantive and definitive. I wrote a textbook on the strength of that proposition, but it looks as though I shall have to write a fresh edition fairly soon. As the right hon. Member for South Down (Mr. Powell) said, we have already made alterations to that legislation. It is clear from the British memorandum attached to the draft agreement that the Government are proposing to change the law of British nationality once again by creating a fresh category of citizenship. It apparently will not be British citizenship because the right of abode in the United Kingdom is specifically ruled out, so the people concerned will not become British citizens. Nor will it be British dependent territory citizenship, as that must end in Hong Kong on 30 June 1997 when sovereignty passes. It is inevitable that that species of
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  citizenship should also end. According to the memorandum, they will get what is rather obscurely called "appropriate status".
  It is suggested that that "appropriate status" might be that of British overseas citizens. That status carries few rights and few obligations except those on the United Kingdom Government. Those who now hold it are spread around the world. They already number well over 1 million. They have no right of abode in the United Kingdom and mostly live in independent countries which were formally part of the British Empire. They have retained this status because of faulty legislation of the past, in that it is a claim on future British Governments in regard to their citizenship rights. It is a species of British nationality and perhaps creates a moral obligation.
  It is quite clear that, irrespective of whether "appropriate status", as described in the agreement, turns out to be British overseas citizenship, we will be adding to our existing embarrassment in having large numbers of people around the world who have this form of moral claim on the United Kingdom, and unnecessarily so. According to the official Foreign Office estimate, there are 3 million British dependent territory citizens in Hong Kong who, on 1 July 1997, will get the new citizenship. Their number will be added to the more than 1 million existing British overseas citizens. What rights will those 4 million people have? They will have the right to some kind of travel document or passport issued by the United Kingdom, entitling them to travel round the world under the diplomatic and consular protection of Her Britannic Majesty.
  Mr. Henry Bellingham: What is wrong with that?
  Mr. Stanbrook: There is a great deal wrong with that. They will be hostages to immense trouble and problems arising from the fact that they do not have a proper citizenship, although they have rights against this country. In many cases, those rights eventually terminate with the presence here of such people who then become entitled to full British citizenship.
  Many of us who were on the Standing Committee which considered the British Nationality Bill hoped that such a continuing obligation would end naturally with the absorption of the people in question into the citizenships of the countries in which they live. Apparently, we were wrong. Even worse, we are now adding to the number of people who will be able to travel around the world in that way. In this case, they will have the right to live in Hong Kong, to leave Hong Kong freely and, in theory, to return there with the right of abode there, but in the meantime they will be entitled to draw upon the protection of the United Kingdom Government.
  The 3 million people concerned are mostly of Chinese ethnic origin. We understand from the Chinese memorandum that such people will automatically be entitled to Chinese nationality. A number, however, will not be defined as Chinese compatriots. The official Foreign Office figure for those people is about 6,000. They include people who have been naturalised as citizens of the United Kingdom and Colonies in Hong Kong and people born in Hong Kong. As my hon. Friend the Member for Christchurch (Mr. Adley) said, many of them will be of Indian origin and, I dare say, will have some prospect of settling in India.

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  These people constitute a different group, likely to become "stateless" but having a continuing right to call upon Britain. Many of them have a genuine expectation of assistance from us. According to figures supplied to me by my right hon. and learned Friend the Foreign Secretary, 188 of them were naturalised in Hong Kong. If such people become stateless and do not receive the status of British overseas citizens or British dependent territories citizens, or the "appropriate status", I believe that they should be considered separately from the rest of the 6,000 and that special arrangements should be made for them.
  Provision of that kind is fraught with problems and likely to involve us in considerable difficulties with individual people, but I believe that special provision should be made because when those people became citizens of the United Kingdom and Colonies, albeit in the colony of Hong Kong, they swore allegiance to the Queen and no doubt believed and expected that their British passports made them British, with all the rights entailed by that. In 1997, however, their status will be terminated. I believe that in their case that would be unfair, considering the circumstances and the fact that they will not get Chinese nationality. We should make special provision for them and perhaps give them British citizenship. If we do not do so, we shall be storing up trouble for ourselves and at the same time depriving ourselves of the industry and talent of some very remarkable people who, out of all proportion to their numbers, have helped to make Hong Kong the remarkable place that it is.
  10.9 pm
  Mr. Ken Eastham: I apologise to the House for having been absent when the two Front Bench spokesmen made their speeches. I was attending the Select Committee on Employment. I am sure that the House understands that hon. Members do other things besides attending the Chamber. I have explained that point because I may repeat some of the remarks that have already been made.
  I was privileged to visit Hong Kong a few weeks ago. It is of great benefit for an hon. Member to see a country at first hand rather than seeing documents. I was surprised, even shocked, to see the great dimensions of success, drive and energy that Hong Kong is enjoying. There is obviously a spirit of co-operation, and I am glad to say that it prevails between the Government and the people as well. I pay special tribute to the Civil Service, which seems a most excellent and competent body.
  Before I went to Hong Kong, the Green Paper making recommendations on the proposals for electoral reform had been issued. When I arrived, being accustomed to the democratic system in the United Kingdom, I thought that there would be great enthusiasm, and people would be pressing on the doors, demanding to have the recommendations implemented immediately. I was surprised to learn that many people in Hong Kong were satisfied and were taking their time to say what they wanted. There seemed to prevail among them the wish that there be a process of gradual change. I must confess that when I spoke to one or two of the Hong Kong people I felt rather impatient, but this was probably because of the traditions of the United Kingdom. I felt wiser after I had returned, and understood some of the traditions of the Chinese people. I still believe in the democratic system
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  and in elected bodies. In 1997, we should leave the people of Hong Kong with a system of which they will approve and be proud.
  Registration is important. In the past the number of people who registered was extremely low, but there was a genuine attempt by the civil servants to encourage Hong Kong citizens to take up registration so that they could participate in the coming elections. I am sure that all hon. Members who have been to Hong Kong and had meetings with various sectors in the community would still nail their colours to the mast and say that they believe in free speech, the freedom of religion and of travel, the right to strike and to organise. There should be a balanced and a caring society from that basis.
  When I was in Hong Kong, the assessment office had just been opened, and the following week it went into operation. My hon. Friend the Member for Walthamstow (Mr. Deakins) was there with me, and we closely questioned officers and asked how they would approach this problem. Both sides agreed that it would be rather difficult. There was a genuine attempt to get some true cross-section assessment as to what people felt. I was delighted to note that nearly three million copies of the White Paper had been printed and circulated. To distribute nearly three million copies of the White Paper to a population slightly larger than 5·3 million was no mean achievement. I should say that it was an honest endeavour to consult the people. I hope sincerely that there were no citizens who did not respond because of fear. I am sure that the assessment officers were anxious to ensure that their deliberations were fully representative. It seems that there was general approval. It seems also that a most excellent job was done. One recognises that there will always be qualifications, and some were included in the assessment summary. However, I feel confident that the agreement has the support of the Hong Kong people.
  It pleases me to think that people in the United Kingdom are genuinely interested in the people of Hong Kong. I received a letter only the other day from the Greater Manchester county ecumenical council. The council addressed itself to Hong Kong and I took it as a sign that British people are genuinely interested in the important future of the people of Hong Kong. The council's letter is a fairly representative document. It includes the views of church leaders and representatives of the Anglican, Roman Catholic and free church of the area.
  One paragraph states:
  "people from Hong Kong who were once British subjects have been progressively stripped of a meaningful nationality and the rights that go with it, to be left after the recent British Nationality Act with a second-class British dependent territories citizenship."
  The letter continues:
  "The British Government should recognise its responsibilities towards the Vietnamese refugees in closed camps in Hong Kong."
  I agree with those sentiments. I took the trouble to see for myself some of the conditions of the unfortunate Vietnamese refugees. I do not believe that the refugees are solely the responsibility of the British Government, and they are certainly not the responsibility of the Hong Kong Government. Unfortunately, we all seem to be casualties of the Vietnamese war. The warring factions withdrew and left the problem of the refugees to others. The refugees are floating around, landing in different countries and creating a serious problem. They should not receive inhuman

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  treatment, but I wish that other countries, especially the United States, would take a greater part in facing some of the problems that have confronted the Hong Kong people as a result of the war.
  The council's letter observes that:
  "Hong Kong residents…will not become Chinese citizens on the eversion of the Colony to the People's Republic (i.e. those not born on Chinese/Hong Kong territory and without Chinese ancestry)."
  There will be serious problems for those people and they should receive sympathetic consideration.
  Furthermore, everybody appears to believe that it is a good agreement. I congratulate the Governor, who was very closely involved over many weeks and meetings in negotiating the deal. We must now encourage the people of Hong Kong to feel confident. Nevertheless, we have to recognise that the citizens of Hong Kong will always have reservations about the agreement, because 2·7 million of the inhabitants are refugees from the mainland on account of the tortuous period of the Chinese cultural revolution. It has led to a certain element of fear and distrust among those people. Therefore I hope that these 2·7 million citizens out of the 5·3 million citizens of Hong Kong will feel confident that the agreement includes them, that there will be no reprisals and that together with the remainder of the people of Hong Kong they will be able to look forward with confidence to the future.
  Turning to industry, it is believed by many people that the industries of Hong Kong are based upon textiles and clothing. That is not the case. Hong Kong has made great strides in electronics. There may, therefore, be problems unless something is done about this problem. The United States, for example, has introduced an embargo upon electronics. Unless that kind of problem is resolved it will be very damaging to the electronics industry in Hong Kong. One has to stand still only for six months or for 12
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  months in the electronics industry and the company dies. The technology is changing all the time. Therefore, this aspect needs to be carefully considered.
  When I left Hong Kong I made one comment about the proposed agreement. It may not meet with the approval of everybody. However, I believe that the agreement should be endorsed by the United Nations. I do not mean to insult the Chinese Government or the British Government. However, this will be an international agreement. Therefore I believe that the United Nations ought to be involved.
  Whatever agreements are signed and whatever may happen in 1997, other fundamentally important matters will have to be considered. The most important of these is lasting friendship between the United Kingdom and the people of Hong Kong. We have fostered very good relationships for many years. There is no reason why we should not look forward confidently to good business relationships after 1997. We should not adopt the attitude that after 1997 the curtain will be rung down. There is no reason why arrangements should not be made through the Chinese Government for a conference to be held every year or every two years after 1997 in order to discuss issues which are of mutual interest to the people of Hong Kong. Nor is there any reason why specialist teams should not take an interest in Hong Kong and why the tourist industry should not continue. There is no reason why we cannot carry on promoting trade between Hong Kong and Britain. With those remarks I would like to extend the very best wishes to the people of Hong Kong.
  Several Hon. Members rose—
  Mr. Deputy Speaker (Mr. Paul Dean): Order. It might help the House to know that the wind-up speeches are expected to begin at about 11.10 pm. Five or six hon. Members have sat here for a long time hoping to speak. If hon. Members could restrict themselves to 10 minutes or less, it should be possible to allow every hon. Member to speak.
  10.24 pm
  Mr. Henry Bellingham: I am pleased to follow the thought-provoking speech of the hon. Member for Manchester, Blackley (Mr. Eastham), although I do not agree with every word that he said.
  Last week I attended several constituency functions, both political and otherwise. Many points were raised on subjects such as student grants, the deduction of £1 from heating additions and sugar beet quotas, but Hong Kong was not mentioned. Had Norfolk farmers put Hong Kong before sugar beet quotas, something fairly dramatic would have had to have happened. It is a compliment to my right hon. and learned Friend the Foreign Secretary that it was not mentioned; because it shows that he has got it right.
  I join many right hon. and hon. Friends who congratulated both my right hon. and learned Friend the Foreign Secretary, my hon. Friend the Member for Shoreham (Mr. Luce), those people on the negotiating team from both sides and those many people from Hong Kong who were closely involved in the crucial negotiations. We have learnt today that they were painstaking, at many times frustrating and disheartening, but ultimately rewarding. They can certainly be proud of their achievement.
  When UMELCO came here in May they issued a statement that laid down full criteria by which the acceptability of a Sino-British agreement to the Hong Kong people would be judged. I am sure that they would agree that those criteria have been met virtually in full. They have been met in a way that many people would not have dreamt possible three or four months ago.
  When that statement was issued, it was as though UMELCO were saying that that was what they hoped would be achieved but that they had grave doubts. That was very much the mood three or four months ago. Things have changed a great deal and in their debate they made a strong recommendation to the people of Hong Kong to accept the draft agreement.
  What about the people of Hong Kong themselves? There has been great mention of that today. The report of the assessment office covers not only the organisations and pressure groups but several important opinion polls and surveys. They will have got through to many ordinary people, and, again, the result was fairly overwhelming. In the most important opinion poll 71 per cent. said that the agreement was quite good and 14 per cent. said that it was good in some way.
  There can be little surprise that, with such an overwhelming feeling of general acceptance, some basic anxieties come to the surface and will continue to do so in the months ahead. We have heard about the fear of conscription into the PLA. Will my hon. Friend the Minister look carefully at the suggestion made by one or two members of UMELCO about the volunteers being expanded and a regular battalion being attached to the existing territorial battalion. Perhaps they could take on a role that even the Chinese would accept and approve of. Will my hon. Friend look carefully at that?
  At the same time, will he consider the future role of the Gurkhas? We are now entering a new era of relations with the People's Republic of China. I see no reason why, after 1997, we could not have the Gurkhas stationed in Hong Kong. We have troops stationed in the countries of many
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  allies. I hope that will be considered carefully in the months ahead and that some definite arrangement will be arrived at with the Chinese.
  There are bound to be anxieties about the development of representative government. There may be great pressure internationally but also in the House for direct elections. I would be one of those hon. Members who would urge caution on that point. The Hong Kong Government's White Paper strikes a balance. I agree with the hon. Member for Warley, East (Mr. Faulds) that at the moment there is no obvious demand in Hong Kong for direct elections. We must proceed with caution. Of course, we want direct elections eventually. I should like to see them everywhere in the world. But in this case we must be realistic and proceed with caution.
  The nationality problem causes anxiety. That thorny subject is mentioned in the memorandum attached to the agreement, which shows what a difficult problem it is. We shall discuss that subject when we consider legislation in the near future. That is the time to go into more detail. I voice my concern about the 6,000 British dependent territories citizens who are of neither Chinese nor British origin. After 1997 their children could become stateless. My right hon. and learned Friend referred to that, but it still causes anxiety.
  I take exception to some of the remarks by the right hon. Member for South Down (Mr. Powell) and by my hon. Friend the Member for Orpington (Mr. Stanbrook). We are being shortsighted about the Hong Kong Chinese and the possibility of them coming here. The people have no great desire to come here, but it would be a safety net if they knew that we would be liberal in our interpretation of discretion under the 1981 Act. If 10,000, 20,000 or 30,000 Hong Kong Chinese came to Britain we would be fortunate. It would be an occasion for rejoicing rather than for throwing up our hands in horror.
  The next 12 years will be crucial. If stability and prosperity are maintained, there is every chance that they will be guaranteed thereafter. However, we must have a determined and strong commitment from the Government. The transition must be smooth so that 1997 does not represent a sudden break with the past, but a continuation of the gradual process of evolution. I like the idea voiced by the right hon. Member for Leeds, East (Mr. Healey) of an annual report to the House. We must be kept in touch.
  Confidence is of the utmost importance. Hong Kong's prosperity and stability depend on highly volatile financial and business markets. If confidence is eroded the markets could collapse. That has been said by many today, including my right hon. Friend the Member for Blackpool, South (Sir P. Blaker).
  We have heard about Peking's great modernisation programme and how it is trying to quadruple its industrial and agricultural output by the year 2000. That will depend upon the maintenance of political stability in China and upon the development of the offshore oil reserves. Above all, it will depend upon the continuing prosperity of Hong Kong. That is why China has such a vested interest in maintaining the status quo in Hong Kong.
  There will be great investment opportunities for British firms in China. Indeed, C. Y. Cheng, the economics professor at Indiana state university, estimated that to reach its goal China will have to spend $1 trillion. That is a huge sum and there will be rich pickings for British firms. They must not assume that because we are

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  embarking on a new era of relations with China that orders will fall into their laps. They will have to go out there and capture the orders.
  When I was in Shanghai recently it was impressed upon me that we are not being aggressive or competitive, and that we were not cutting the bureaucratic barriers like the Italians, French, Germans and Japanese. We have a long way to go.
  The uncertainty is over. The Hong Kong people can face the future knowing where they are going, with growing confidence. I praise the Secretary of State for the work that he has done, but we are a long way from a diplomatic triumph.
  Many Chinese people believe that it is a great tragedy that the British administration is coming to an end. Many are critical of the way in which we embarked upon the negotiations and raised so publicly the question of the treaty and convention. That meant that the Chinese had political face to save. Many are critical of the appalling human rights record in China.
  Now is not the time to look back. Now is the time to be positive, because the Hong Kong people are realistic. Before we leap for joy we must remember, as the right hon. Member for Leeds, East said, that we are dealing with a post-dated cheque. We can be optimistic when we know that that cheque will be honoured. The future holds much potential, but it is also full of risks. If all three parties play a constructive part in minimising those risks, the future will have a great deal to hold for the people of Hong Kong.
  10.35 pm
  Mr. Paddy Ashdown: It is a pleasure to follow the hon. Member for Norfolk, North-West (Mr. Bellingham). I agreed with some of his comments, particularly about British dependent territories citizen passport holders and citizenship.
  I think it was Henrik Ibsen who had someone say in the play "An Enemy of the People" that in a democracy the minority is always right. From time to time that statement gives some comfort to the alliance. I may take comfort from it tonight, because I fear that I will introduce a jarring note into what has otherwise been a gentle and well-modulated debate.
  I shall start on the easy side by joining other hon. Members in congratulating the Government on the general tenor of this agreement. There is a Chinese statement which, for the benefit of the World Service, goes, "tien xia de shih wu mei you shih chien shih mei de." I am sure that all the hon. Members who are present in the Chamber know precisely what that means but, for the benefit of those who will read those words in Hansard in the morning, it means, "There is nothing under heaven which is completely perfect". That is true about this agreement. It is, nevertheless, as near perfect as the Government could have got in the circumstances. The British Government are to be congratulated on that, as are the Chinese Government.
  Such reservations as I have are not related to the Government, but rather to the way in which the House has handled the issue. A very old and wise Member said to me before I became a Member of Parliament, "The moment when you must be most suspicious is when there is common agreement on all sides of the House of
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  Commons". Both this debate and the previous Hong Kong debate have been characterised by a tenor of common agreement on both sides. I am deeply suspicious about that. There are good reasons why the previous Hong Kong debate had to be carefully conducted and why we had to be statesmanlike. At that stage, the agreement had not been drawn up. On this occasion, it has.
  I have not been in the Chamber for the entire debate, but I have discussed it with my colleagues. I apologise for the fact that I have not been present, but I had to be away for an hour or so. There has not been, in the tenor of the argument from both sides of the House, the real and genuine fear—I go further and say "anger"—which I noted in Hong Kong and which I found on discussing the matter with my Hong Kong friends and colleagues, felt about what the British Government have done and are doing in terms of the future and citizenship of the people of Hong Kong. Those who study the White Paper with a careful eye will see signs of that feeling. The Hong Kong people were asked to assess whether an agreement should be accepted. The only alternative was an agreement imposed unilaterally by the Chinese. It was an agreement based on whether the people would like it or lump it. It is not surprising to know that the population of Hong Kong has chosen essentially to like it.
  Some aspects of the assessment should concern us. As the right hon. Member for Leeds, East (Mr. Healey) said, one third of the individuals who commented on the agreement said they were against the agreement and criticised it. Furthermore, nearly half of the organisations that put in statements on the agreement chose to remain anonymous. That is remarkable, in view of the general climate in which the assessment was conducted.
  On page 80 of the White Paper, the monitors said, rightly, that the comments were made by people who were traditionally reserved in political matters. We must not expect from a population that has been anaesthetised from politics—largely at our request—for so long the type of fairly pungent comment that is heard in the House of Commons. There is concern about what is happening to the people of Hong Kong. I am depressed by and worried about the fact that that worry has not been expressed with the force that I observed in Hong Kong, which I believe characterises the views of many Hong Kong people. It is right to say that many in Hong Kong are angry about what is going on. Many are concerned, and some feel betrayed. Those words crop up in the assessment.
  It may be that some hon. Members do not like the word "betrayal". Some may feel that it is inappropriate. I believe that it is inappropriate. But it is as well that we should recognise what people feel. It is as well that we should recognise that there needs to be a voice in this House which is capable of expressing their anger. I believe that the tenor of the debate will not be understood by many of those who hoped that their fears, their concerns and their sense of betrayal would be reflected here, albeit in terms of challenging the Government. I do not criticise the Government. I criticise in a sense the way that we in this House have reacted to our responsibility to express the views of the people of Hong Kong in a forthright fashion.
  The hon. Member for Wrexham (Dr. Marek), who is not here, said that the Hong Kong agreement is the greatest issue in the Queen's Speech. I suggest that it may well be the greatest issue that this House has dealt with in the past 20 or 30 years. We are handing over the future and the rights of 5 million people to a Government from whom

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  many of them have fled. They all remain deeply concerned about the future. We have never done such a thing before. We have never been faced with such a sense of concern. [Interruption.] The right hon. Member for Western Isles (Mr. Stewart) says that we had no option, but it is right that this House, carrying that responsibility and duty on its shoulders, should express the views of those people clearly and forthrightly.
  Mr. Nicholas Winterton: Like the hon. Member for Yeovil (Mr. Ashdown), I have not been able to be here throughout the debate, but I believe that he is doing a great service to the House in reflecting the views of the vast majority of the people of Hong Kong who, because they are not part of the moneyed class, the moneyed mandarins, will not be able to leave Hong Kong. It is up to Back Benchers such as ourselves to reflect the views of those who cannot leave, and whose views have not been adequately monitored in the lead-up to the draft agreement. Does the hon. Gentleman agree that those who are at the grass roots in Hong Kong are deeply concerned about the agreement?
  Mr. Ashdown: I confirm that that is my view, at all events. Those people believe that there is a moral duty on the British Government that has not been adequately fulfilled.
  I recognise the imperatives under which the Government have had to operate, but I believe that we in this House have allowed our Government too easily to slough off that moral responsibility, without sufficient question.
  We all understand that we are not now in a position to alter the agreement, or the nature of it. But this debate can start the process of setting the agenda for what will happen in the next 13 years. That is the significance of the debate. It is in that spirit that I agree with the right hon. Member for Leeds, East , who said that we should review the matter on a year-by-year basis. The House might choose not to debate the issue, but reports should be produced on how we fulfil our duties and responsibilities towards the people of Hong Kong. The House should have the right to debate the issue annually.
  The area in which the anger, concern and sense of betrayal of the people of Hong Kong is most significantly expressed is that of citizenship. There are those who are holders of British dependent territories citizens' passports and who, in good conscience in Hong Kong, and with a deep sense of duty, actually took an oath of loyalty to the Queen. They find that no sense of reciprocal duty has been shown by the British Government. They are concerned about that.
  The right hon. Member for Leeds, East introduced a significant, interesting, imaginative and daring concept when he talked about setting up an "Operation Haven". It may be too tall an order, but we should at least try to do something along those lines. If we could put such a scheme into operation, its very existence might act as a back pressure on the Chinese Government to operate strictly in terms of the agreement.
  The Government of the People's Republic of China have operated an open door policy. They have committed themselves to open doors for Hong Kong for the next 50 years. But an open door is of use only when, having stepped through the door, one has somewhere to go. They have honoured their side of the open door policy. That
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  must be in the best interests of the future of Hong Kong. There is a duty on us to see what, if anything, can be done at least to investigate the possibility of ensuring that something happens on the other side of that open door. If that can be done, it will give considerable reassurance in terms of confidence building over the next 10 to 15 years.
  The importance of Hong Kong to the future of the south-east Asian Pacific basin is now absolutely vital. Whether the free capitalist economies which now exist in some of those countries survive as the norm will, at least in some measure, depend on the survival of Hong Kong as a free institution under the terms of this agreement. That is important, because many nations—ourselves included — wish to see this emergent and powerful industrial force develop in line with our way of life, our freedoms and our industrial and economic system. I suggest that a certain international status is attached to Hong Kong. It is important that it be allowed to develop as a free institution because it will encourage that kind of institution elsewhere in this important area.
  It would be appropriate for the British Government now to go along to their friends—NATO was mentioned—who are also interested in the survival of that kind of institution in that area, to see whether something can be pinned together to bring "Operation Haven" into reality. Perhaps that cannot be done, but we should at least try.
  If at the very least, we can provide some international substance for the Hong Kong travel document post-1997, which assures freedom of movement if not right of settlement, that will be a recognition of the importance of Hong Kong's future trading capacity and the free institutions in the colony.
  I very much hope that the Government will accept the moral duties that now rest upon them. I hope that they will use this period to see whether we can give some substance to concepts such as "Operation Haven" and to the document under which the Hong Kong people will live.
  I was concerned and disappointed to hear the Foreign Secretary say that only officials in the Hong Kong Government would sit on the joint liaison group. The case that he made did not convince me, nor will it convince the people of Hong Kong. There is no reason whatever why membership of that group should be confined to members of the Hong Kong Government. However, if that must be, it should not be confined to expatriate members of the Hong Kong Government. It should at least encompass ethnic Hong Kong-Chinese members of that Government who have a commitment to the colony because they have lived there all their lives.
  If the free democratic institutions of Hong Kong develop along the lines that the Government wish and we get directly elected representatives, are the Government saying that even in that instance those who represent the people of Hong Kong on the joint liaison group will still be the bureaucrats? It would be outrageous if those who were elected under such institutions were not allowed to serve on the joint liaison group. I hope that the Minister will clarify that point.
  In conclusion, this is the greatest issue in human terms that the House has faced for a long time. A moral duty rests upon us. Many hon. Members believe that we should make every effort to honour that moral duty and ensure that the opinions and concerns of the people of Hong Kong are more adequately expressed in the House than they have been during the debate.
  10.49 pm
  Mr. Andrew Rowe: I also had the good fortune this summer to be the guest of Hong Kong. I, like many of my colleagues, returned impressed by the energy, inventiveness, creativity and social sophistication of the colony. Few British people who had to live in the sort of houses in which the squatters have had to live for up to 10 years, would ever have achieved the degree of meekness and homeliness which they have achieved under those astonishing conditions.
  I was struck, in my ignorance, by how remote Hong Kong has felt from us, despite our presence there. That has inspired a range of myths and legends. One might have expected a land of sweat shops instead of intensely sophisticated manufacturing units, the conditions of many of which are better than in many places in the world and, indeed, better than in some of our cities. The remoteness is a two-edged weapon. It has enabled Hong Kong to escape some British diseases, such as over-regulation, over-taxation, over-unionisation and, therefore, overpricing. However, it has also led to a realisation that it is not at the forefront of British thinking.
  We owe a great debt especially to UMELCO. While we were in Hong Kong and during the visit of its members here, they gave us a model of what a good briefing should be. I pay tribute to S. Y. Chung and his team for a remarkable educational exercise.
  I am distressed by the tenor of much of tonight's debate. The line between realism and pessimism is often too narrow. I have an edgy feeling that tonight we may be seeing the beginnings of a diminishing interest and our gradual move away from involvement. That may have been an inevitable part of disengaging ourselves from other parts of the former British Empire. If my right hon. Friend the Member for Old Bexley and Sidcup (Mr. Heath) is right that Hong Kong may have difficulty in entering the next stage of its economic development in competition with the rest of south-east Asia, our commitment will become more valuable and not a glad excuse to distance ourselves because in 12 years' time we shall no longer have direct responsibility.
  Hong Kong has a great deal to teach us. I was impressed, as was my wife, who is a specialist in these matters, to see the enormous skill with which it runs an integrated service for the handicapped. We were impressed by the way in which it runs a successful national preventive health campaign, which has many models for us.
  It is indispensable to the future prosperity of the United Kingdom that we learn and create the mechanisms for sharing in Hong Kong's sophistication to understand China. It is entirely within the Government's power to accelerate and encourage the formation of joint endeavours with Hong Kong in that most important area — for example, British universities should be much more closely linked with the universities of Hong Kong. There it is possible to study the changing moods and understandings of China more easily than we can here.
  I shall concentrate on one detail, which would seem to me to be of enormous importance, in the report of the Assessment Office. It was reported that there were anxieties about the accreditation of Hong Kong's academic courses and degrees. It is vital that a mechanism —I cannot say whether it should be the one suggested, of an independent council—should be provided whereby
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  Hong Kong is assured of its ability to accredit its courses and to authorise its diplomas and degrees in a way that will make international recognition instantly possible.
  Anyone who has taught in a university knows perfectly well that it is one thing to have a paper accreditation and another actually to see the students as they come to do post-graduate work, or whatever. Another way of ensuring that the standards are up to international standards—as they certainly are in the case of some of the courses put on in Hong Kong—is to make sure that we have much more common work together.
  Britain is in a peculiarly privileged position to assist in the development of Hong Kong, and vice versa. If we or the Government can do anything to encourage, for example, the great British companies in Hong Kong—which seem to use their London offices much less than they might do to inform people about Hong Kong—to put their corporate weight behind helping fledgling British companies to make their mark in Hong Kong, and eventually in China, we shall have made a remarkable contribution.
  Ultimately, it is not just an economic but a philosophical and political question. If Hong Kong's economy falters, it may become less attractive to China. If China's politics go wrong, Hong Kong will be in very serious danger and trouble. It is absolutely essential that, whatever we say about economics, we should remember that for 100 years Hong Kong has been our responsibility and, if the going gets tough because politics go wrong in China, to the greatest possible extent that we can contribute on the international stage to improving relations between Hong Kong and China, it will be our duty to do so.
  10.57 pm
  Mr. Ron Lewis: I shall certainly take your advice, Mr. Deputy Speaker, and at this late hour my contribution to the debate will be very brief.
  My interest in Hong Kong is that of an ordinary Back Bencher who has been following the fortunes or misfortunes of a colony known as Hong Kong, which at present comes under the British flag. When we were advised that the Foreign Secretary was setting off to meet the Chinese to seek an agreement over the future of Hong Kong, most of us—regardless of party—had certain doubts and misgivings as to whether our British Foreign Secretary and Government would not go to Hong Kong and have to acquiesce in everything that the Chinese had to say. But that has not been the case. If hon. Members are honest with themselves, they will all agree that the Foreign Secretary and his team came away from those talks with a far better agreement and understanding than any of us had envisaged.
  One thing about the debate has been the great unanimity on the part of hon. Members. However, the exception was the hon. Member for Yeovil (Mr. Ashdown), who has just left the Chamber. But I felt aggrieved when, long before any agreement had been reached, and almost before any meeting had begun, I read that Jardine Matheson was pulling out of Hong Kong. I believe that that move gave a very bad impression to other businesses concerned, and I hope that, even at this late stage, Jardine Matheson may have second thoughts and perhaps agree to retain an office in Hong Kong.
  I have listened upstairs this week to the views of the members of the official delegation who are in this country

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  on their mission. They were speaking and lobbying Members of Parliament. I formed the impression that even the majority of those who are here on an official visit find the agreement acceptable. although of course they would have liked it to go much further.
  Yesterday, I also met an ordinary citizen from Hong Kong. I had quite a discussion with him. He posed a number of questions, of which I shall mention only two. First, he asked me what is likely to happen in the event of a change of Government in Hong Kong. None of us knows the answer to that, but I believe honestly that, whatever Government may hold power, Peking will honour the agreement arrived at with the British Government. I told that ordinary citizen that such was my belief and my faith.
  The second question was a very important one—at least to me and to that ordinary citizen of Hong Kong, who is a deeply committed and very evangelical Christian. He asked me whether we can be assured that people in Hong Kong will have religious freedom, without any interference from the State.
  I believe that many good Christian people, and many people who do not belong to any basic Christian faith, are wondering what is likely to happen after the Chinese takeover in 1997. I could say only that I believe that we must have a basic trust that the undertaking given will be fulfilled whatever happens.
  I hope that my plea, uttered in this British Parliament, will echo not only through Hong Kong but throughout China. After 1997 I want to see complete religious freedom in Hong Kong, with no interference from the State whatsoever. I believe that that should be one of the main objectives of the joint liaison committee. In its meetings over the next few years, the committee should try to move further along that road.
  I undertook to raise those points in the debate, and I have done so. It remains only for me to say to the Hong Kong people in general, in the words of the old hymn with which, as a Methodist preacher, I am very familiar:
  "Ye fearful saints fresh courage take, The clouds ye so much dread Are big with mercy, and shall break In blessings on your head."
  11.4 pm
  Mr. David Heathcoat-Amory: I have only five minutes so I shall put only a few thoughts on the record. First, I repeat the congratulations that have been given to my right hon. and learned Friend and his officials. The Foreign and Commonwealth Office has taken its share of the blame for Britain's economic ills during the past 20 years, so let us recognise a success when we have one.
  The agreement shows that differing political systems can be brought together in agreement when mutual interests can be identified. I strongly hope that the same mixture of firmness and patience, which my right hon. and learned Friend specialises in, can be brought to bear in the search for an agreement with Argentina over the Falklands and with the Soviet Union over arms control. I am glad that that skill has already yielded results in Gibraltar.
  All the democratic institutions in the world will not save Hong Kong unless we preserve its economic prosperity and success. I should like to reinforce what the hon. Member for Walthamstow (Mr. Deakins) said about the future of Hong Kong's trading rights and quota allocations. I hope that Opposition Members were listening to him because some have little right to speak for
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  Hong Kong when their protectionist policies for the United Kingdom would spell disaster for the employment prospects and prosperity of Hong Kong. I hope that when the protectionist tendency in the Labour party next raises its head it will remember this debate.
  The People's Republic of China knows quite well that a Socialist Hong Kong is of no use to it. It is interesting that the agreement states not that Hong Kong may retain its capitalist lifestyle for the next 50 years but that it will do so. If some oriental Labour party were to take root in Hong Kong, it would find that its decrees were null and void if they conflicted with the basic law. It is fascinating that the world's largest Communist power is guaranteeing for 50 years the success of a capitalist offshoot.
  How else is Hong Kong to be protected? How else is this delicate and vulnerable system to be preserved? Surely it is by building up Hong Kong's political confidence and ability. There will be many difficult times between now and 1997 and beyond. There will be ups and downs and moments of despair and gloom as well as of euphoria. That is the nature of any society that is founded on risk. As the moment of British withdrawal grows nearer, that security must be replaced by a home grown set of political institutions capable of taking the strain.
  Right hon. and hon. Members have commented on the White Paper on representative government. I do not like the functional constituencies. I do not think that people should be represented according to whether or not they belong to some producer interest group. But the most important thing is not what form of election Hong Kong goes for but how the elected men and women are to control their Government. How are they to scrutinise the workings of the Civil Service and the Executive? Will there be a ministerial system? Is it right that officials should sit on those representative bodies? Not all of those decisions can be made now, or even soon, but time is short. We have only 12 years and the direction of the constitutional changes must be embarked on soon because Hong Kong cannot afford any mistakes. Other societies can afford one or two false starts, but not Hong Kong. Whatever system is chosen, it is vital that it should be supported by those twin pillars of democracy, a free press and the rule of law administered independently. Both now exist in Hong Kong and both are rare commodities in the world. Their preservation will be the real test of the agreement and of the sincerity of the People's Republic.
  Personally, I am an optimist. I believe that developments in China towards greater personal and financial freedom are irreversible. There will, of course, be difficulties. China has problems, with its immense population pressures, rising expectations and a society and country far more diverse than we realise. Nevertheless, I believe that it is through its revolutionary stage and embarking on a long period of development, and it is important that this country should play a part in that economic development. There are 1 billion people in China, all with massive unfilled wants. I urge British business men to look to China rather than to the saturated markets of Europe for orders in the 1990s. China is not an easy market. It is not an easy country. Business men will have to get to know the provinces as well as Peking. They will have to invest both time and money. But if the future of the world is to revolve around the axis stretching from the United States to Japan and China, it is vital that this country plays a part.

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  I believe that the real achievement of this remarkable agreement will be if our extraordinary but fruitful relationship with Hong Kong can be translated into an equally exciting and peaceful relationship with the largest and most populous country in the world on the mainland.
  11.11 pm
  Mr. George Robertson: This is a late hour in the House, but it is just dawn in Hong Kong. We understand that the debate is being taken live by the media there and that large numbers of people will have been listening through the night to our deliberations in the past five or six hours. Those who have listened here and elsewhere will recognise that it has been a wide-ranging and informed debate on a subject that the whole House has treated with appropriate seriousness. I still regret that the Government felt unable to allow two days for the debate. Despite the 10-minute rule, which ensured a reasonable number of contributions today, other Members on both sides who wished to express their views were no doubt deterred by the limited chance of being able to do so.
  The gravity of the subject for the people of Hong Kong has been well recognised in the House, and very few of the fears, apprehensions and potentials have been left unexplored. That is right because, as has been stressed so many times today, this is an historic occasion for the House and for the people of Hong Kong. There are few examples in the world of such an amicable and equable transfer of sovereignty as this change will mean. For this nation, it is unique in that sovereignty is being passed not to an indigenous population but to another nation. Those facts emphasise the uniqueness both of Hong Kong's status since 1897 and of the new status promised from 1997. That status has been the root of Hong Kong's economic success so far and in it lies the basis for a future success based, as many hon. Members have said today, on the entry point to the massive Chinese market.
  Some have characterised the debate as having a foregone conclusion. The hon. Member for Yeovil (Mr. Ashdown) admitted that he introduced a jarring note into what has been a fairly unanimous debate. There was a weakness in his argument, however, in that he did not say how he would have achieved a better agreement or indeed what kind of better agreement could possibly have allayed the accusations of betrayal that inevitably come when such a traumatic change takes place.
  Mr. Ashdown: I was rather careful to say that I think that the Government have done a good job. I was criticising the House and not the Government for not having a Member to express those fears in the way that they should have been expressed.
  Mr. Robertson: The hon. Gentleman was frank enough to admit that he had not been here for the whole of the debate, but he underestimates many of the fears that have been expressed, both in the assessment report and by right hon. and hon. Members in this debate.
  Those who have said that the debate is a foregone conclusion are right in fact, even if they are misguided in tone, because the foregone conclusion was already there, as with the year 1997. As that year was predetermined, most of what has followed from it can be said to have been predetermined as well. However, the draft agreement whose terms we are being asked to endorse tonight was
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  never a foregone conclusion, and nor were the details in it, which will provide a protective framework for Hong Kong society to continue virtually unchanged for at least 62 years.
  As in all good negotiations—I speak as one who was a negotiator for more than nine years—the ground was prepared in advance for the likely outcome. However, few would have dared to make a prediction about the likely final package, however sceptical or optimistic one started out. The official Opposition have already commended the success of the negotiators, especially the professionals in the team, in achieving this agreement, and have deliberately, both in the negotiations and the subsequent reception of the results, sought to make no political capital out of a highly sensitive subject. It is as well to underline the point made by the hon. Member for Wells (Mr. Heathcoat-Amory) that, if the same realism was shown in other negotiations on other subjects, many hon. Members would be happier about foreign policy.
  Given the provocation of the Government in almost every other subject, the generosity in this one will be difficult to achieve again. However, we believe that to attack, undermine or harass the Government at times of such delicacy and confidentiality would have impeded progress and would have brought benefits only at the expense of the interests of the people of Hong Kong. Therefore, we are happy to do what right hon. and hon. Members have done today and commend the amount of detail in the agreement, the reassurance it provides on central issues such as freedom before the law, and for the signal that it more than anything represents—that the People's Republic of China is determined to maintain the uniqueness of Hong Kong and to protect the prosperity that has provided such benefits to the People's Republic.
  There is a gamble associated with living as a populated merchant bank for a Communist state, but it will be no more of a gamble for those who have already lived in the immediate shadow of the cultural revolution, which scythed its way through China but left vulnerable, invadeable and easily established Hong Kong unscathed and unaffected.
  Therefore, it is difficult to accept that China would have entered into such a visible, verifiable, legally binding agreement if it had no intention to abide by it. The valuable and cherished international reputation of China, its respectability in the eyes of traders and competitors and even superpower equals is on the line. The Chinese Government know it, we know it, and the commitments have been given with their eyes fully open.
  A framework now exists, and it is in high international profile, for Hong Kong's future for at least 62 years. That is longer than most of us have any such detailed framwork to work within. Faith will perhaps be needed to make it work, but also realism and a common continuing concern for shared interests and perceptions. Shared interests, or the lack of them, dominate relations throughout the world and the position of the people of Hong Kong will be little different from that of the rest of us over the next few decades.
  Much has been mde of the suggestion that has come from Hong Kong, first from Miss Lydia Dunn, and then endorsed by the rest of her colleagues in UMELCO, about the possibility of a continuing interest in Parliament and in the United Kingdom generally on progress within Hong Kong. Many of the detailed matters that have been raised in the debate, by the UMELCO submissions and, most

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  importantly, by the valuable report of the assessment office could not be raised fully in a debate such as this. They cannot even be debated while we discuss the legislation that will be introduced in the new year. They can be dealt with only over the years as events unfold.
  The joint liaison group conducts its work and many of the issues which have been raised will be on its agenda. Now that the sensitive negotiations are over and the agreement has been made—it will probably be endorsed tonight—with the consent of the Hong Kong people, there is little need for secrecy and undue confidentiality. It has been said in the House and elsewhere that we have a duty to ensure that progress towards 1997 is open and accountable. That is why the idea of an annual report from the joint liaison group through the Government to Parliament and the possibility of a debate in the House on it are the minimum offers that we can make. Regular monitoring by the Select Committee on Foreign Affairs is also a means of open administration that we should be willing to put forward.
  Progress towards more representative institutions is the clumsy title which the Government of Hong Kong have used to describe a movement towards more democratic institutions. The creation of democratic institutions in Hong Kong has been resisted over the years, partly and mainly because the very suggestion of independence or self-determination has been enough to set alarm bells ringing in Beijing, which have caused experiments to be kept to a minimum. That reason for caution has gone. With sovereignty acceded, with the agreement in existence and with China's declaration that the next 12 years are Britain's responsibility alone, that major inhibition has fallen. Perhaps the overriding objection has also gone.
  It was interesting to hear earlier this evening from the right hon. Member for Old Bexley and Sidcup (Mr. Heath), who I regret is not in his place for the Front Bench replies. The right hon. Gentleman made a remarkable contribution, as we have come to expect from him over the past few weeks. I have usually enjoyed them. The discomfiture of those on the Government Front Bench has warmed the hearts of most of my right hon. and hon. Friends. However, I did not derive much comfort from the right hon. Gentleman this evening. He sought to advance a number of arguments that will not offer great comfort to many in Hong Kong. He suggested that a lack of democracy in Hong Kong was something we should regret and be ashamed of. He said that the arguments advanced for the proposed system have come from those in appointed places who want to enjoy keeping them.
  The right hon. Member for Old Bexley and Sidcup is not a humble Back Bencher. He is not in my position of being a relatively junior Member of the House who has enjoyed only a fragment of a moment of his party being in power. The right hon. Gentleman was Prime Minister from 1970 to 1974 and I would wager a considerable sum that the governor of Hong Kong during his period of office appointed many people. I would wager also that some of those who are in London this week representing UMELCO — nominated members of the Legislative Executive Council — were probably appointed under the Government who were headed by the right hon. Gentleman. It ill becomes him to start preaching democratic reforms at this stage in Hong Kong's development when he had it considerably in his power to do something substantial, constructive and fundamental to strengthen democracy in Hong Kong.
  Mr. Nicholas Winterton: Will the hon. Gentleman give way on that point?
  Mr. Robertson: No, I shall not give way.
  Sir Paul Bryan: Why not?
  Mr. Robertson: The hon. Gentleman, from a sedentary position, asks "Why not?" The hon. Member for Macclesfield (Mr. Winterton) has allegedly preached a doctrine in favour of the ordinary people of Hong Kong, but in a debate which began at about five o'clock the hon. Member for Macclesfield appeared at a quarter to eleven. That is why I shall not give way.
  Fear of Chinese over-reaction was not the only inhibition on institutional change. I address my remarks also to my hon. Friends the Members for Falkirk, West (Mr. Canavan) and Wrexham (Dr. Marek). There still remains in Hong Kong the traditional Chinese antipathy to confrontational elections which my right hon. Friend the Member for Stoke-on-Trent, South (Mr. Ashley) mentioned and, crucially, the problem of introducing elections into a society without any experience of them —in addition, a society with two substantial, externally motivated partisan electorates which we cannot ignore.
  The progress towards the more elected and representative Government that is proposed in the White Paper is perhaps unduly cautious. The Government of Hong Kong must be ready in the 1987 review to consider holding direct elections and having a greater proportion of directly elected legislators and extra members than they seem willing to contemplate at the moment. The danger now is not of Chinese over-reaction to democratic reform but of insufficient time before 1997 in which to create a strong, viable, locally based system which will withstand the inevitable pressure and traumas as 1997 advances. The priority must remain that changes, reforms and improvements must proceed at a pace which does not threaten the all-precious stability and prosperity upon which Hong Kong's future security is based, but must be at a pace and of a nature moulded in Hong Kong by the people in Hong Kong whose future depends upon it.
  Much has been made this evening of the institutions that exist in Hong Kong. As the hon. Member for Wells (Mr. Heathcoat-Amory) said in his brief but relevant contribution, side by side with the reform of government through elections in Hong Kong must go administrative reform. The accountability of the newly reformed institutions is as important as the elections themselves. The transition from colonial rule to a self-governing administrative region must involve open, accountable government at all levels.
  I turn to the fraught question of nationality. The assessment office report has found grave dissatisfaction among some sections of Hong Kong life with the provisions in the memorandum of agreement on nationality. This is hardly a surprise since the same sense of let-down, disappointment and even accusations of betrayal occurred after the passage of the British Nationality Act. The attitude displayed this evening and the views expressed by the hon. Member for Orpington (Mr. Stanbrook) and the right hon. Member for South Down (Mr. Powell) perhaps underline the feelings which were expressed at that time. But whatever provisions had been adopted on nationality then and now, the very fact of changing the particular status at present enjoyed by Hong Kong residents would have led to protest.

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  Nobody who has enjoyed the right to the blue passport and the quasi imperial injunctions we have heard quoted this evening will ever lightly give it up. But some change was inevitable, given the magnitude of the new arrangements. However, some areas still need to be examined: first, those people who have been mentioned by a number of hon. Members who will be rendered stateless by the changeover. I welcome very much the Foreign Secretary's assurance that at the end of this process nobody will be left in that state.
  Secondly, as my right hon. Friend the Member for Leeds, East (Mr. Healey) said, we have to consider the circumstances of some people in Hong Kong for whom we have particular regard — those citizens who have, by virtue of their public work or background, reason to believe themselves vulnerable in the new circumstances. They will have to be given protection by Britain and they have a right to know it in advance. The Government must be prepared to give assurances on that soon.
  Points have been raised this evening on the question of the basic law and the participation by the Hong Kong people in the drawing up of the Chinese basic law on the agreement. Nobody should, in considering that issue, under-estimate the problems of such a complex and unprecedented handover of power. That is why the implementation of this agreement is bound to throw up practical issues which can be dealt with only as they arise.
  Some of those problems have been raised in this debate and they will be raised in the debates on the Bill that will come before Parliament in the new year. But the basic law is not within the power of this Parliament and it would be wise not to be transfixed by that issue at this time, especially as China has said that the process of drawing it up will take up to 10 years to complete.
  Nevertheless, the demand from the Hong Kong people for a monitoring of the process must be taken note of and deserves attention. It is not for Britain to say yes or no to the request for Hong Kong's participation. That is up to China, and how persuaded it is of the merit of the idea. Our responsibility is and remains to ensure that the terms of the argeement are discharged and are eventually, before 1997, included in full in the basic law.
  Many other matters have been raised in this debate. The international acceptability of the new status of Hong Kong is one obvious area that bothers hon. Members and will bother people in Hong Kong who know that their future prosperity will depend on its own international acceptability.
  The question of conscription into the Chinese army and the location of elements of the Chinese army in or near Hong Kong has also been raised. There is the problem of the refugees, and, in particular, the Vietnamese boat people who are in Hong Kong in large numbers and whose status has still to be clarified. That will have to be taken up at a future date.
  Those are matters of real and understandable apprehension, but not matters which we can raise in a debate of this nature. Those fears and apprehensions exist and must and will be pursued with the other subjects in the transition period until the handover.
  The future of Hong Kong is not about institutions, be they social, economic or political. Nor is it about buildings or systems of concepts, however grand. It is about people who, over the past 88 years, came to live in Hong Kong
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  in the knowledge that its incredible mixture of colony, free trade area, super-plan city and bastion of free expression had a finite life until 1997. They may have come to make money, for freedom, or to find cash or refuge. They may have come for a financial killing or for a way of life distant from arbitrary arrest or directed labour. Whatever they came for, they did so on time borrowed from the large neighbour next door.
  Nevertheless, they are people who demand our attention and who deserve it, however great may be the historical accident which has placed their future in our hands. The next and crucial phase in Hong Kong's remarkable history is about to commence and we in this Parliament will play a pivotal part in making sure it promises all that those people, 8,000 miles away from us, really can expect. That will demand from us constant vigilance which we can readily pledge, but it will also demand a hard-headed realism on the part of the Hong Kong people, knowing that their future, perhaps for the first time, is completely in their own hands. How they choose to use it will determine the kind of society that they will inherit.
  We shall discharge our obligations and our onerous responsibilities. We can offer no less. But we must do so conscious that our real obligation now is to provide the means, the machinery and the institutions which will put the momentous and personal decisions into the hands of Hong Kong's own people.
  11.35 pm
  The Minister of State, Foreign and Commonwealth Office (Mr. Richard Luce): Ministers cannot often claim that a debate has been historic or moving, but without doubt I can claim that today's debate has been historic. It is a debate of great importance, and the range of contributions has been remarkable. I go further. The House has shown a tremendous sense of responsibility towards the 5·5 million people who live in Hong Kong, contrary to the contention of the hon. Member for Yeovil (Mr. Ashdown), who implied that hon. Members were not particularly bothered about the anxieties of the Hong Kong people. The debate has shown that they are concerned. The Assessment Office report also reveals that concern.
  The British Government's duty is to do their best for the people of Hong Kong. That is precisely what we are doing now. We have a draft agreement which attempts to achieve just that. It has been widely welcomed in the House. The agreement should give the people of Hong Kong a chance and a feeling of hope for the future. It enables them to maintain their economic system and their way of life after 1997 and, as the hon. Member for Hamilton (Mr. Robertson) said, for at least 50 years thereafter. Whether he and I will still be around in 63 years' time I am not sure, but that is the agreement with the Chinese.
  The agreement provides for continuity. It sets the framework for continuing continuity, stability and prosperity. It contains a large amount of detail to cover every facet of life among the Hong Kong people. It provides a high degree of autonomy and enables Hong Kong, after 1997, to administer itself and to run its own economic, financial and commercial affairs. It allows Hong Kong to continue to play a unique role in the world as a trading and financial centre. All that is placed in an

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  international agreement between the United Kingdom and China. We are talking about a unique agreement for a unique set of circumstances.
  The right hon. Member for Leeds, East (Mr. Healey), my hon. Friends the Members for Bromsgrove (Mr. Miller), for Leominster (Mr. Temple-Morris) and for Mid-Kent (Mr. Rowe), and my right hon. Friends the Members for Guildford (Mr. Howell) and for Blackpool, South (Sir P. Blaker) talked about the Government's responsibility in the next 12½ years. It is important to make it clear once again that the Government will maintain full responsibility for administering Hong Kong until 1997 and will continue to work hard to build up Hong Kong's strength and prosperity.
  Many hon. Members suggested an annual report to the House of Commons. We shall take such ideas seriously and some system of regular accountability to the House is of great importance to the people of Hong Kong, as is the interest that right hon. and hon. Members will maintain over the next 12½ years.
  There has been much discussion about the implementation of the agreement. As my right hon. Friend said, one can never, in this world, have an absolute guarantee, but we have a legally binding international agreement. More important than anything else in this matter is the fact that the best prospect for success is the self-interest of all the parties to make the agreement a success.
  The hon. Members for Warley, East (Mr. Faulds) and for Carlisle (Mr. Lewis) and my right hon. Friend the Member for Blackpool, South have all stressed the self-interest of China in making this agreement work. China's economic interest, general policy on reunification and reputation for sticking to international agreements are factors that we are entitled to take into account. There is certainly a strong British interest in ensuring that the agreement works. I believe that the United Kingdom and China will work effectively together to fulfil our joint interest and our determination to honour this agreement. That self-interest on both our parts has been more important than anything else to the people of Hong Kong.
  We have been considering the White Paper and the draft agreement in the context of the report of the assessment office and its conclusion that most Hong Kong people find the draft agreement acceptable. That conclusion was endorsed by the independent team of monitors who believed that the assessment office carried out its task accurately, fairly and impartially. The assessment office's report highlighted a considerable number of reservations and anxieties in the minds of the Hong Kong people. Many of those anxieties have been clearly and fully evoked by hon. Members during this debate, and rightly so. I want to assure the House that those views will be carefully borne in mind by the Government in any future discussions with the Chinese Government on the implementation of the agreement.
  I should like to answer every contribution, but that would be extremely difficult. I shall, however, make that attempt. I assure hon. Members that if I miss their contributions I shall write them a letter answering their points if I can. The right hon. Member for South Down (Mr. Powell), the hon. Members for Hamilton and for Inverness, Nairn and Lochaber (Mr. Johnston), my hon. Friend the Member for Orpington (Mr. Stanbrook) and many other hon. Members raised the important subject of nationality. As my right hon. and learned Friend the Foreign Secretary has emphasised, the Government will
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  introduce legislation in the new year to give effect to the nationality provisions in the United Kingdom memorandum. That will involve the creation of a new form of British nationality for former Hong Kong British Dependent Territory citizens who obtained a passport before July 1997. In general, they will enjoy the same benefits as British Dependent Territories citizens, except for the transmissibility of their status to their children.
  During the negotiation, we argued strongly for transmissibility. The Chinese side that it could not in any circumstances accept it, and in the end, we had to accept this measure. The House will have the opportunity to debate further the nationality questions connected with that legislation. Individual rights of abode in, the United Kingdom are not affected by the agreement. British Dependent Territory Citizens do not have this right of abode now, as the right hon. Member for South Down knows, nor will their future status carry that right. Rights of abode in Hong Kong are fully protected by the agreement.
  The right hon. Member for South Down and I served together in Committee on the British Nationality Bill during the four months of its proceedings, and his speech did not come as a great surprise. The right hon. Gentleman is worried about the possible flow of immigrants into this country.
  There are only an estimated 20,000 British citizens in Hong Kong. They have the right to enter and live in the United Kingdom, as the right hon. Gentleman knows. The 3 million or so British Dependent Territories citizens in Hong Kong do not have a right of abode in the United Kingdom and will not have it in 1997 if they acquire the new status for which they are eligible under the terms of the United Kingdom memorandum. Our efforts have been directed to achieving conditions under which people will not wish to leave Hong Kong. We believe that the agreement provides those conditions.
  My right hon. Friend the Member for Guildford and my hon. Friend the Member for Arundel (Mr. Marshall) asked about travel documents and passports. According to section XIV of annex I of the Joint Declaration, residents of the SAR will be able to use travel documents issued by the SAR Government. They will record the holder's right to return to the SAR. The Chinese Government will assist or authorise the SAR Government to conclude visa abolition agreements with states or regions. Those who are on 30 June 1997 British Dependent Territories citizens by virtue of a connection with Hong Kong will be eligible to retain a status which will enable them to use British passports after that date. Those passports will make it clear that the holders have a right of abode in the SAR, and Her Majesty's Government will do all they can to secure for the holders of those passports the same access to other countries as that enjoyed at present by holders of British Dependent Territories citizens passports. There is no reason to believe that third countries will not recognise those passports.
  There were several speeches in which the dangers of statelessness were raised. The hon. Member for Warley, East mentioned it, as did many other hon. Members. It is important that I should say something in addition to what my right hon. and learned Friend said. There are concerns which, understandably, are felt by members of the community in Hong Kong, that they might become stateless as a result of the agreement. We intend fully to comply with our obligations under the 1961 convention on

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  the reduction of statelessness. It is possible that some British Dependent Territories citizens who may not be considered to be Chinese nationals will not acquire the new status in 1997. There is also the question of children born after 1997 to ex-British Dependent Territories citizens who are not considered to be Chinese nationals. I assure the House that we shall provide for such people to have a form of British nationality if they would otherwise be stateless. The House will have an opportunity to scrutinise the legislation in due course.
  There were several questions about international help with resettlement. The question was raised by the right hon. Member for Leeds, East, by the hon. Member for Liverpool, Riverside (Mr. Parry), and by my right hon. Friend the Member for Old Bexley and Sidcup (Mr. Heath) who is not here. Our aim all along in the agreement has been to provide security for the future of the people of Hong Kong in such a way that they would not wish to leave. We have a very good agreement which does just that, and I do not think this is the moment to be taking steps to ask other countries to assist with resettlement of the Hong Kong people. Other countries would find incomprehensible such a display of lack of faith in the agreement that we have just reached, and I cannot believe that they would find our arguments persuasive. Moreover, because it would display a lack of faith, it would inevitably be very unsettling for the very people in Hong Kong for whose security we are seeking to provide. Therefore, I suggest that that is not the best way of proceeding.
  There have been speeches in the debate about the very important position of the Vietnamese refugees in Hong Kong. That does not affect the agreement immediately. I am sure that my hon. Friends will understand it if I do not go into too much detail save to say that the matter is of very great concern to the British Government. We are very conscious of the important problems that it raises, particularly for the Hong Kong Government, with their very heavy responsibilities there. We are making every effort, in co-operation with the United Nations High Commission for Refugees, and with other countries, to seek permanent solutions to the problem of the Vietnamese refugees who are at present in Hong Kong.
  A number of hon. Members have asked about consultation with the people of Hong Kong. In particular, I single out the Joint Liaison Group and the Basic Law, which were referred to by the hon. Member for Yeovil, the right hon. Member for Stoke-on-Trent, South (Mr. Ashley)—who gave me notice that he would not be present — and my hon. Friend the Member for Leominster among others.
  There is not a great deal that I can add to what my right hon. and learned Friend said, except that we attach very great importanc to the Joint Liaison Group as a forum for consultation with the Chinese Government over the implementation of the agreement. The detailed procedures will be worked out at a later stage, although the framework for its activities are already set out in annex II to the Joint Declaration. I expect the United Kingdom side of the Joint Liaison Group to include appropriate Hong Kong Government officials. The group will be an organ of diplomatic discussion between the two Governments. Therefore, it is likely that we shall have to keep participation at official level. But I remind the House that the range and sophistication of consultation in Hong Kong
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  is now very strong, and I am certain that we shall be able to find ways of ensuring that the views of the people of Hong Kong are taken fully into account during the discussions in this important group.
  Mr. Ashdown: Will the Minister give way?
  Mr. Luce: I hope that the hon. Gentleman will forgive me, but if I am to do justice to the House I must proceed. I understand his concern, but I should try to answer the debate.
  My right hon. and learned Friend the Member for Hendon, South (Mr. Thomas), and my hon. Friends the Members for Boothferry (Sir P. Bryan) and for Christchurch (Mr. Adley) asked about the Basic Law. As the House knows, the drafting of the Law is a matter for the Chinese Government. However, the agreement states that the policies described in the Joint Declaration and annex I will be stipulated in the Basic Law. We therefore already have a good idea of what it will contain.
  The Chinese Government have made it clear that the people of Hong Kong will be consulted on its drafting, although the exact form of this consultation has not yet been specified. In the period between now and 1997, there will be a need for close co-operation between the British and Chinese Governments. The Joint Liaison Group exists for this purpose, and we look forward to a close and constructive partnership in that connection.
  In his short but moving speech, the hon. Member for Carlisle spoke of basic freedoms, including religious freedoms. That is a matter of profound importance to the people of Hong Kong, and, as he knows, all existing freedoms will be stipulated as a result of this agreement in the Basic Law.
  The constitutional development of Hong Kong has caused great interest and a large number of hon. Members have expressed legitimate concerns. We all fully accept that we should build up a firmly-based, democratic administration in Hong Kong in the years between now and 1997. The White Paper sets out the proposals on elections to the Legislative Council in 1985, after taking account of public comments on the earlier Green Paper. For the first time in Hong Kong, some Legislative Council members will be indirectly elected, rather than being appointed by the Government. The White Paper envisages a step-by-step approach — that is the right way of proceeding—to more representative government which takes fully into account Hong Kong's special circumstances and traditions.
  A review of possible developments will be held in 1987 before the 1988 elections. Public reaction to the Green Paper in Hong Kong was generally in favour of its aims and of the gradual and progressive nature of its proposals. The public recognised the need to ensure that the prosperity and stability of Hong Kong are not put at risk by introducing too many constitutional changes too quickly. However, the Hong Kong Government have responded to public feeling by increasing the number of Legislative Council members to be elected in 1985 from 12 to 24. That is the sensible basis on which we should proceed.
  My hon. Friend the Member for Orpington asked about the position of Her Majesty's Overseas Civil Service. He was a distinguished member of it, as I was, so we have a joint interest in ensuring that its interests are safeguarded. We have its interests closely in mind. As my right hon. and

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  learned Friend the Foreign Secretary said, the draft agreement provides satisfactorily for continuity of service by serving officers in the public service in Hong Kong on terms and conditions, including pay and pensions, no less favourable than before, to 1 July 1997. The resumption of sovereignty over Hong Kong by the People's Republic of China raises similar issues in respect of Her Majesty's Overseas Civil Service as independence has in other dependent territories. I remind my hon. Friend that the public officers' agreement, to which he referred, has generally been negotiated at the last moment before independence in the case of other independent territories, and signed after independence. Constitutional change is still more than 12 years away in Hong Kong and the Government have, and will continue to have, closely in mind the interests of that particular group of civil servants as well as of contract officers, other expatriates and local civil servants.
  Other important points were raised, including points about defence and the position of the People's Liberation Army. Under the agreement, China would remain responsible for foreign affairs and defence, but public order will be the responsibility of the Special Administrative Region. The House will wish to take that division of responsibility fully into account.
  The hon. Member for Walthamstow (Mr. Deakins) made an important point, which was backed up by my hon. Friend the Member for Wells (Mr. Heathcoat-Amory) and my right hon. Friend the Member for Guildford, on the question of Hong Kong's membership of international agreements. At present Hong Kong plays an important role in the General Agreement on Tariffs and Trade and the multifibre arrangement. The agreement allows its continued participation in GATT and any successor to the present MFA. It also provides that the Hong Kong SAR will have the status of a separate customs territory. A priority task of the joint liaison group will be to consider action to be taken by the British and Chinese Governments to enable the SAR to function as a separate customs territory and, in particular, to ensure the maintenance of its participation in GATT and other similar arrangements. We shall therefore work together to secure and protect Hong Kong's position. Given the widespread international good will expressed since the publication of the agreement, I have no doubt that our partners will show sympathy and support towards Hong Kong. We shall certainly work to that end.
  The agreement has been widely praised as giving Hong Kong a strong chance of success. It was achieved under the supreme leadership of my right hon. and learned Friend the Foreign Secretary with the fullest possible professional support of the Governor of Hong Kong and other professional advisers, and in close co-operation with members of the executive council and legislative council
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  under the leadership of Sir S. Y. Chung. That has made an outstanding contribution to the progress that we have made.
  The Government have done their best. We have given the people of Hong Kong a firm basis on which to build a prosperous future. We and China will work as strongly as we can to make the agreement a success. The political will is there. We believe that it can and will succeed. The Government will work in the closest possible co-operation with other countries, especially China, to ensure that it is a success. For the next 12 and a half years we maintain full responsibility for Hong Kong and its administration. We expect and believe that the international community will give its support to us in this. It is in the British interest that this agreement should succeed, and I am confident that the people of Hong Kong will work hard to make it a success. I therefore strongly commend the agreement to the House.
  Question put and agreed to.
  Resolved,
  That this House, having considered the views of the people of Hong Kong as set out in the reports of the Assessment Office and the Independent Monitoring Team published in White Paper, Cmnd. 9407, approves Her Majesty's Government's intention to sign the agreement on the future of Hong Kong negotiated with the Chinese Government, which was published in White Paper, Cmnd. 9352.

  BUSINESS OF THE HOUSE
  Ordered,
  That, at the sitting on Monday 10th December, Standing Order No. 3 (Exempted business) shall apply to the Motion in the name of Mr. Secretary Jenkin relating to the draft Local Government (Interim Provisions) Act 1984 (Appointed Day) Order 1985 with the substitution of One o'clock or three hours after it has been entered upon, whichever is the later, for the provisions in paragraph (1)(b) of the Standing Order. —[Mr. Durant.]

PETITION

  Human Embryos
  12 midnight
  Mr. David Mudd: I beg leave to present a petition signed by 939 of my constituents who have expressed concern over the contents of the Warnock report. I join with them in that concern.
  The petition states:
  Wherefore your Petitioners pray that the House of Commons will take immediate steps to enact legislation which forbids any procedure that involves purchase or sale of human embryos, the discarding of human embryos, their use as sources of transplant tissue or as subjects for research or experiment (unless this is done solely for the benefit of the embryo concerned). And your Petitioners, as in duty bound, will every pray etc.
  To lie upon the Table.

British Telecom Computer Centre, Portsmouth
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Peter Lloyd.]
12.1 am
Mr. Michael Hancock: I am fortunate to have the opportunity of this Adjournment debate so soon after the unfortunate occurrence in Portsmouth involving the closure of BT's computer centre.
I have the dubious pleasure—if that is the right word —of being the first Member of Parliament to challenge the consequences of BT's privatisation and the effects on employees, many of whom have given BT very loyal service only to find in the opening days of privatisation that their jobs are at risk and that the centre in Portsmouth will close.
I do not believe that the tragic upheaval and trauma facing those people has been seriously considered by the management of BT. Indeed, I do not believe that the Government considered that prior to privatisation. Anyone reading the Act that allowed BT to change hands, would find it very difficult to discover provisions that gave the House any responsibility. Surely, it should have shown some loyalty to the staff who have worked for so long within BT's organisation.
The closure is a double loss for Portsmouth, which has the worst unemployment of anywhere on the south coast and which is desperately trying to encourage the sort of industry represented by that computer centre. The job prospects of the 150 people working at the centre, and of the young people in the area who have been trained in those sophisticated skills, will be lost. Presumably, as far as BT is concerned, they will be lost for ever.
There has been a complete loss of morale among the staff at the computer centre and a waste of good-will. Indeed, that centre had a marvellous industrial relations record and its employees had given loyal and devoted service in the interests of the Government. The waste of public money alone prompted me to write to the Public Accounts Committee, urging it to investigate the closure. About £20 million of the taxpayers' money will go down the tube when the centre closes. That money was hard-earned in the first instance, and, having had the privilege of seeing round the centre, I agree with the employees there that the money was well spent, too. It will now simply be frittered away.
British Telecommunications has behaved in a most deceitful way. The decision was made before privatisation took effect, but was deliberately suppressed. Indeed, I believe that the management of BT came clean only after my final letter to the regional director in which I suggested that unless I received an answer within 14 days I would raise the matter in the House and ask the Minister to confirm what the future of the site was to be.
The decision was deliberately suppressed before privatisation, and carried out afterwards. Adopting a phrase used recently in the House, I would say that BT is playing bingo with other people's money. The real losers will be the employees at the centre.
The centre was brought into being in 1980 after pressure from local Members of Parliament, the staff sides and the regional management of BT. It was opened in 1981 at an initial cost of £500,000 for the building, a conversion
474
and adaptation cost of £1 million and some £7·5 million for the equipment installed at the time. The site was a disused warehouse, so the centre made use of surplus land in the city. It became a centre of employment offering jobs for over 150 people.
According to BT, the centre is recognised as the most cost-effective centre in the country. BT has itself recognised the fact that the work load at the centre is extremely heavy and that it does a good job. Indeed, despite the closure, BT has agreed to spend nearly another £4 million on enhancing the equipment there and will be taking on about another 100 people. It was a sad reflection on the members of the management of BT that in their recent letter to me they made it clear that anyone taken on after next January to cover the workload would be told that the job would be a very short-term experience. The £4 million is to be added to the colossal amount of money already consumed by the centre. It will simply be thrown away.
The centre's work covers an enormous area. It deals with 3·5 million subscribers' accounts and the ordering and work load of 12 telephone areas. The centre is being closed, apparently, because BT wants to adopt a new concept — the front office concept. To arrive at that decision it has had to dabble in new types of computer and to consider different practices in this country and abroad. For instance, BT bought the Cincinnati-Bell system. BT in fact experimented to the tune of about £17 million of taxpayers' money, which has subsequently been written off because the experiment was a complete failure. If BT has learnt nothing else, it should surely have learnt that the centre in Portsmouth is worth saving. Its equipment has been tried and tested. Its staff has responded to the job given to it.
Because of the establishment of the new districts, the need arises to absorb the existing computer centres within BT's new district organisation. A problem thus arises for three of the existing centres— Portsmouth, Derby and Rochdale. The problem has been alleviated in Derby and Rochdale because BT has suggested that, because those centres are close to the areas that they serve, they can be absorbed. It is ludicrous that a company such as BT, which we are told almost daily is in forefront of new technology, finds it impossible to base a computer centre in Portsmouth to communicate with Brighton, which is only 46 miles in one direction, or Southampton, which is 25 miles in the other.
There must be a better way of doing things. The Minister could use his influence with BT management on at least two. The centre could remain open and meet the needs of the south downs district—the new name for the district in which Portsmouth will be based. The distance from Portsmouth to Brighton, the district headquarters, should not pose a problem. If we can cover the world by satellite I am sure that we can bridge 46 miles. The city has well established data communication links. A precedent for that solution has already been set at Derby and Rochdale. The centre can justify its existence as it can cope with the work load. Indeed the south downs district will represent a slight reduction in its work load.
The second solution is that the centre could remain open and meet the computing requirements of the Southampton district. No decision has been made about the Southampton computer site, so it is not too late for BT to

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designate Portsmouth as the centre which deals with the Southampton area. Such a solution would use existing expertise and capital investment.
I hope that the Government have the wit to recognise that they have an obligation to the centre's employees and to youngsters who need the type of jobs that the Secretary of State for Education and Science constantly tells us people should train for. Our city needs the jobs. The Government should use their influence with BT management in that regard. What proportion of BT computing staff are employed at Portsmouth? How many jobs are likely to be created in BT computing in 1985 and 1986? What guarantees do Portsmouth employees have that they will be selected for those posts? Why is BT unable to use its data communication technology to retain Portsmouth as a centre for Brighton and Southampton when it currently covers areas as far away as Norwich and Cambridge and has data links with sites as far away as Edinburgh? What proportion of the money that is to be spent in the next four or five years developing the front office concept—the real culprit—is needed to retain the Portsmouth centre?
Finally, what will be the total cost of making staff at Portsmouth redundant and the cost of redeployment throughout BT? BT itself suggests that it will cost about £17,000 per employee to transfer staff to other sites. For th staff, many of whom have given 20 years service at the Portsmouth centres, the most annoying aspect is that they will have to apply for their own jobs. Not one of them has the right to have his own job guaranteed to him. That is a very sick, sad state of affairs.
Under the Act the Secretary of State has specific powers to use his influence to instruct the Director General of Telecommunications as to the way in which the service should be run. He has a specific responsibility, given to him by this House, to promote the interests of consumers, purchasers and users. It cannot be beyond the wit of anyone to see that that responsibility must be used to investigate what I consider to be the scandal of the proposed closure of the Portsmouth centre, the absolute waste of countless millions of pounds of taxpayers' money and the writing off and disregard of the loyalty and integrity of the staff.
I am grateful for the opportunity to bring this matter before the House today and I hope that the response will be an initiative by the Government to see whether there is any way in which they can express their concern and their willingness to try to direct British Telecom to retain the Portsmouth centre.
12.16 am
The Parliamentary Under-Secretary of State for Trade and Industry (Mr. David Trippier): The hon. Member for Portsmouth, South (Mr. Hancock) has asked for ministerial intervention in the detailed local affairs of a large private sector company and I have listened carefully to all that he has said. I was a little surprised at the somewhat intemperate language of his harsh and, I believe, unfair criticism of British Telecom. I do not wish for a moment to give the impression that it is not right for him to pursue the interests of his constituents in whatever way he sees fit. Nevertheless, although there may well be value in a public airing of a perceived problem, there is no substitute for direct approaches to the management of the company in a case of this kind.
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I can answer many of the points that the hon. Gentleman has raised, but on the extremely detailed matters that he raised in the latter part of his speech, although I am anxious to respond, I am afraid that I shall have to look up the details and reply to him by letter.
The hon. Gentleman has already sought a meeting with my right hon. Friend the Secretary of State in the hope of persuading him to intervene but has been told that there is nothing that Ministers at the Department of Trade and Industry can do. It may be helpful if I clothe that rather bare statement with some more general explanation.
The operations of British Telecom, like those of any large employer, are of interest to a wide range of people — individual and business customers, suppliers and employees. There is also room for interest in its operations from the wider standpoint of the role that the company can play in encouraging growth in the economy through its research and development. Individual Members of Parliament may have points to raise wth a company from any of those standpoints, but it is understandable that the aspect that most are quickest to raise concerns decisions affecting employment. Such decisions, however have to be made in the context of the company's overall objectives. Among these, in the case of British Telecom, the provision of an efficient service to customers rightly, in my view, ranks high.
The hon. Member has, I believe, been in correspondence with British Telecom which will no doubt have told him that the local communications services division, the division with the main direct contact with the public, is at present being re-organised—the hon. Member touched on this—into 24 management districts in place of the former 61 areas. I would not think it useful to debate the merits of the new structure here, except to say that British Telecom is satisfied that it will help to make the company more responsive to its customers. That must be welcome to us all. Similarly, I would not see merit in exchanging views on just why one area headquarters is chosen to be the headquarters of one of the new and larger districts, while another is not. Most of us in such a discussion would stick up for the case of the headquarters in or near our own constituency, although we would recognise that there may be good company reasons for preferring another location. It happens that the British Telecom decision has been to make Brighton the headquarters of the south downs British Telecom district rather than Portsmouth, and it also happens that the proposed rundown of the Portsmouth computer centre is part of a similar reorganisation of the computer back-up that the new reorganisation in districts needs.
It is the right of the hon. Member to seek further explanations from the British Telecom management, who will I am sure take careful note of all that is said in tonight's debate. I understand that the British Telecom director concerned, who would be very happy to see the hon. Member, is Mr. Noel Tappenden, who can be contacted at Telecom Centre, Newgate street. I have, however, no reason to suppose that British Telecom has not weighed carefully the points that have been made about the development of the Portsmouth computer centre and the capital expenditure involved in it.
The hon. Member argued in the earlier part of his speech that had British Telecom still been a nationalised industry the Government would have been in a position to intervene in a matter of this kind. Perhaps they would with an Alliance or Labour Government, but it has been this

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Government's firm policy to give the nationalised industries the maximum possible freedom to reach their own commercial decisions on such matters. Therefore, if this point had been raised two, three or four years ago my answer would have been that this must be a matter for the business judgment of the corporation's board, and I would have invited the hon. Member to take it up with British Telecom direct.
If that were inappropriate then, it is surely doubly inappropriate now. I think that everybody in the country must have noticed that in the past few days British Telecom entered the private sector. It has entered the private sector with more than 2 million small shareholders, considerably more than any other private sector company in the country.
Mr. Hancock: Surely, if this had happened two years ago, the hon. Gentleman, as a responsbile Minister of the Crown, would have wanted to investigate how about £20 million worth of investment since 1980–81 had been written off after such a short time. Would he not have questioned carefully the management of BT about the ethics of doing this, and about the merits of pursuing a policy that will lead the company to spend about £20 million developing another centre in place of the one in Portsmouth?
Mr. Trippier: I am anxious not to encourage the hon. Gentleman to make another speech, but I draw his attention to a number of Adjournment debates in which I have participated, referring specifically to the Post Office, rather than to BT. He will find a common denominator in my replies to those debates, in that I said that we do not interfere in the commercial judgment of the Post Office, which is not privatised.
The Government meant what they said in the prospectus of BT. We said that we did not intend to use our shareholding—to which the hon. Gentleman referred—to intervene in the commercial decisions of the company.
The hon. Member surely cannot expect us to intervene now with the company in what is an entirely commercial decision of its own. It would be a complete breach of faith with those 2 million new private shareholders for us to do so, and I am sure that the hon. Member will understand that.
I understand that British Telecom has replied fairly recently to the hon. Gentleman, setting out its intentions and the arrangements for the full consultation that it has in mind. We should bear in mind also that it is not proposed that the closure should take place until 1988. If the hon. Gentleman and his constituents wish to avail themselves of the opportunity, there can be considerable consultation with the company before then. The hon. Gentleman should understand that it is no good trying to enlist us in his support, and he will understand well that it is not my place to go into the merits of the decision.
The hon. Gentleman has made much of the situation in Portsmouth and its employment problem. I do not deny that problems exist and that they are a source of much concern locally. However, I feel that he does less than justice to the splendid efforts of the Portsmouth city council, of which he is still a member and, by all accounts, an active one.
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The city council's promotion of new industrial and commercial developments, together with the encouragement of tourism, have done much to mitigate the effects of the rundown of the naval dockyard, which for so long dominated the local economy. By its diversification, the city council is laying the foundations for future prosperity.
As I am sure the hon. Gentleman well knows, I have had the privilege of visiting Portsmouth on a number of occasions. I have always been struck during these visits by the initiative and enterprise displayed by the city council. These are key ingredients for success.
Many of the initiatives have been on the small firms front, and here I must declare an interest. I have always been conscious when speaking in Portsmouth—where initiatives to help small businesses abound — that I preach to the converted when I tell the City Fathers that this sector is so very important for our future prosperity.
I am sure that the hon. Gentleman will agree that the foundations for future prosperity are being laid locally by the city council. There is an exercise in self-help taking place there. The community is pulling itself up by its bootstraps. For its part, my Department has contributed nearly £3 million in grants under its support for innovation programme towards 19 projects since 1979. It is supporting also the Portsmouth ITEC, as the hon. Gentleman will know.
Our general economic policies are creating the conditions in which businesses of all sizes and types can flourish. Business in Portsmouth, which has the full support of the city council, is well placed to take full advantage of the opportunities that we have created.
I have referred to the hon. Gentleman's suggestion that the Portsmouth computer centre would not be run down if British Telecom were not being privatised. I want to lay stress on the argument that I advanced earlier. I think that the hon. Gentleman's suggestion is entirely wrong. British Telecom's decision arises from its increasingly commercial attitude as it is faced with commercial competition. It is nothing to do with privatisation. The Government can take some responsibility for British Telecom's commercial attitudes, as we have encouraged the competition and appointed the present strong management at British Telecom. To that extent the hon. Gentleman can reasonably lay some of the responsibility for British Telecom's commercial decisions at the Government's door. But the sale of British Telecom to the public is a quite different matter. This complements the decisions taken earlier but does not directly affect the reorganisation of computer services of concern to the hon. Gentleman.
This reorganisation is part of a policy which has brought the public great benefits—a far better service for customers, lower real prices for telecommunication services as a whole and a more efficient management of resources. That must be generally welcomed.
It is important to stress the Government's standpoint in British Telecom and other employers enlarging the number of jobs that they can maintain viably and not shirking the need to make organisational changes where these would enable a more efficient service to be provided. When the modest reductions in employment in British Telecom are considered, thought should be given also to the increased employment resulting from other companies taking advantage of the new competitive environment. As I said earlier, Portsmouth should be well able to take the closure of British Telecom's computing centre in 1988 in its stride.

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I shall not intervene in the hon. Gentleman's dispute on behalf of his constituents with British Telecom. I cannot and should not do so, and it would be a breach of faith with the 2 million new shareholders to do so. The hon. Gentleman might like to think how he would convince those many thousands of the 2 million who live in his
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constituency that it is in their interests for British Telecom to preserve these jobs at any cost. For the power to determine the future of British Telecom has now been transferred to them.
Question put and agreed to.
Adjourned accordingly at half-past Twelve o'clock.

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

Super-748: Proposed LIAT Purchase
The Earl of Cork and Orrery: 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 what steps they are taking to secure European Community funding for the proposed purchase of four British Aerospace Super-748 aircraft for Leeward Islands Air Transport (LIAT).
The Minister of State, Foreign and Commonwealth Office (Baroness Young): My Lords, my right honourable friend the Minister for Overseas Development has discussed the matter on several occasions with the Development Commissioner, M. Pisani, and with the Director-General for Development, and has set out our view in writing.
The Earl of Cork and Orrery: My Lords, I am most grateful to my noble friend for that Answer. Is it not the case that LIAT, the operating company concerned, is strongly in favour of purchasing the British aeroplane and is totally opposed to the Franco-Italian one? Are Her Majesty's Government prepared to insist on a revelation of the negotiating processes that went on with the EEC in order to come to their present decision?
Baroness Young: My Lords, the Caribbean governments who own LIAT have made clear their strong preference for the Super-748, which, unlike its French rival, is available now. May I make clear that it is the Commission's responsibility to manage Community aid funds; and the rules for Community aid require that the economically most advantageous offer be approved.
Lord Bruce of Donington: My Lords, can the noble Baroness reveal to the House what views Her Majesty's Government communicated to M. Pisani?
Baroness Young: My Lords, it is our view, because we are involved in this matter, that it is the Commission's responsibility to ensure that economically the most advantageous offer is selected. In this particular case it has received advice from the three independent consultants. The Commission believes that LIAT will need assurances about delivery times and other conditions which it is by no means certain that Aerospatiale can in fact provide.
Lord Orr-Ewing: My Lords, will the noble Baroness perhaps place in the Library the explanation as to why
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this aircraft is being forced on LIAT? Is it not true that we are contributing 20 per cent. of the funds to the Development Commission? Is it not equally true that it is an unproven aircraft which will not be available until 1986? Is it not also true that it uses North American engines and therefore has only 7 per cent. of its content manufactured in Europe, while the Super-748 has 90 per cent. so manufactured? Therefore, is it not astonishing that the clients, LIAT, are not allowed to choose the aircraft which best suits them—an aircraft which is available, and much of which is manufactured on Merseyside, where it would provide very valuable jobs? Can my noble friend be a little more robust in dealing with the EEC Development Commission on this matter?
Baroness Young: My Lords, I should stress to my noble friend, in answer to his supplementary question, that the situation is one which is changing from day to day. The Commission has employed three independent consultants and has taken the view that the ATR-42 meets LIAT's technical requirement, provided that it gets certain assurances. So far as Britain is concerned, we believe that it is important to adhere to the Community's rules and it is essential, indeed, to our own long-term aim of improving the quality and effectiveness of Community aid to which, of course, we contribute 18 per cent.
Lord Bruce of Donington: My Lords, I am sorry to trouble the noble Baroness further. Would she mind informing the House of the identity of the three independent consultants to whom she has referred?
Baroness Young: My Lords, as I understand it, one of them was a consultant from Lufthansa. I think that I shall have to write to the noble Lord in regard to the other two consultants.

Drug Smuggling: Customs and Excise Posts
2.43 p.m.
Lord Rodney: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what steps have been taken to strengthen Her Majesty's Customs and Excise in their efforts to stop the flow of drugs into the United Kingdom.
The Chancellor of The Duchy of Lancaster and Minister for the Arts (The Earl of Gowrie): My Lords, earlier this year 60 posts were allocated to enhance controls of both passengers and freight. These posts were temporary in the first instance, but are now to be made permanent. For 1985–86, 100 further posts are to be allocated for the fight against drugs smuggling. Careful consideration is being given to the deployment of these new posts in order to achieve the most effective results.
Lord Rodney: My Lords, I should like to thank my noble friend the Minister for that quite encouraging Answer. May I ask him whether he is satisfied with the development of technical aid for the detection of drugs

1309
being smuggled into this country, particularly as this seems to be the only ultimate hope of stopping this traffic?
The Earl of Gowrie: My Lords, I can confirm to my noble friend that we examine every possible method of stopping this deadly and murderous traffic. We pursue new technologies; we do it through personnel and information and crime detection; and we also rely on drugs dogs, which are very effective.
Lord Mishcon: My Lords, would the noble Earl accept that the House will, I imagine, have received with gratification the news that there is now a 24-hour service instituted by the police so that all questions of drug trafficking can be reported as a matter of direct communication from the public to the police? Would the noble Earl also be good enough to indicate how far the promise has been implemented in regard to the increase in the number of Customs and Excise personnel who will be dealing specifically with the matter of drugs?
The Earl of Gowrie: My Lords, I shall take note, if I may, of the first part of the noble Lord's supplementary question, which was a useful contribution to debate on the issue. As to the specific question, the 60 extra posts allocated earlier this year were additions to the Customs complement in carefully selected locations. A similar process will be followed when the 100 new posts for 1985–86 are allocated in the new year. The overall effect is of a very considerable increase in the Customs preventive effort.
Lord Shinwell: My Lords, would the noble Earl not agree that the importation and use of these noxious drugs is the most serious evil facing our country? It is far worse than our imaginings or part imaginings about Scargill, the miners' strike, the possibility of civil war or further trouble in Ireland. Is it not the worst evil of all? When he talks about effective results, is he satisfied with the results? Does he regard them as effective? Does he not think that many members of our police force, for whom I have the highest regard and respect, could be utilised to deal with a situation of this kind, even if it is done in a surreptitious fashion instead of in the usual diplomatic and official fashion?
The Earl of Gowrie: My Lords, as I have indicated, I certainly think that drug smuggling is a very serious threat indeed. That is why—as my earlier answers indicate, I think—we are giving it more resources and more attention. I could never be said to be satisfied while any noxious drugs get in the country at all, but there has been some evidence of success in the fight. In the first 10 months of this year, Customs and Excise—who, if I may say this to the noble Lord, are in the front line here—seized over 250 kilos of heroin, which is considerably more than was seized in the whole of last year: that is to say, 212 kilos. That compares with the total of 40 kilos in 1979. There was a spectacular seizure of cannabis from a ship in the River Crouch, which was one of the largest ever seizures in Britain. Also, so far this year some 200 persons have been arrested, more than 60 of whom were principals rather than mere carriers; so although
1310
we are by no means satisfied, the effort is being intensified considerably.
Baroness Masham of Ilton: My Lords, could I ask the noble Earl whether there is a policy with Customs and Excise not to use Alsatian dogs? Also, if that is so, why not? Would the noble Earl not agree with me that they are highly intelligent, highly efficient and highly respected animals with long noses? Might they not be better than other breeds of dog?
The Earl of Gowrie: My Lords, I cannot comment and I have no information about the rival breeds of dogs; but I can confirm to the noble Baroness that Customs and Excise have dogs based on a number of regional centres, and they are called out regularly to sniff out drugs. In the most recent 12 months, over 200 dog-aided seizures were achieved. These were worth many millions of pounds at street-level prices, and I think that the "long noses"—if I may echo the noble Baroness's phrase—are doing a very good job indeed.
Lord Winstanley: My Lords, without for a moment suggesting that cannabis should be legalised, still less encouraged, may I ask the noble Earl this question? Would he use his influence to ensure that our already hard-pressed Customs and Excise officers focus their energy and attention on heroin, which is of desperate importance, rather than dissipate their efforts in pursuit of cannabis, which is of very much less importance?
The Earl of Gowrie: My Lords, I have to say that both substances are illegal, and the fact of the matter is that most people engaged in drug trafficking are doing so for profit. I do not think they enormously worry what they are trafficking in so long as their profits are high enough. That is why we have to attack this evil wherever we find it.
Lord Molson: My Lords, are the Government satisfied that drug traffickers do not make extensive use of the route through the Customs at airports if they claim they have no dutiable goods to declare? If more Customs officers are going to be employed, will they be used for checking those who pass through at present without apparently any check at all, if they claim that they have no dutiable goods?
The Earl of Gowrie: My Lords, I may be misinterpreting my noble friend's question; but, if I understand him aright, I think that we would have to measure our undoubted successes and our undoubted need for greater successes to counter this evil against really very considerable disruption to the public—disruption that has been eased by introducing the red and green channel system at points of entry. In fact of course—as so often with crime detection and with catching criminals—careful research, careful intelligence and careful under-cover work is really the most cost-effective way of proceeding.
Baroness Ewart-Biggs: My Lords, following the noble Baroness's question, can the noble Minister say how many sniffer dogs are used by Customs and Excise? Secondly, is he satisfied that adequate staff are deployed in the investigation division of Customs and

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Excise to take on the ever-growing incidence of drug smuggling?
The Earl of Gowrie: My Lords, on the latter point, in recent years Customs and Excise have made substantial staff savings through streamlining their procedures and organisation, and as my earlier answers and the figures indicate, the anti-smuggling effort has been maintained through careful ordering of priorities. I understand that there are nearly 30 sniffer dogs used and they are based in a number of regional centres. I know of no special constraints on Customs and Excise having more dogs if they would be cost-effective.
Baroness Lane-Fox: My Lords, will my noble friend the Minister tell us whether he is satisfied that enough static searches (as they are termed) are made on passengers entering the United Kingdom?
The Earl of Gowrie: My Lords, I have already to some degree tried to answer that point. We have to weigh disruption and annoyance to visitors—the vast majority of whom we welcome here very much—and to our own people returning, against the need to combat this evil. The best way to proceed is by tried and tested methods of crime prevention. We will of course keep in mind the point of the noble Baroness about more spot checks; but that, as I have indicated, most of this traffic is a highly organised international criminal conspiracy. We have to proceed against it accordingly.
Lord Glenamara: My Lords, the noble Earl the Minister has told us about the steps being taken in this country with some success. Can he say what action is being taken on a government to government basis to try to stop the export of drugs by the countries of origin?
The Earl of Gowrie: My Lords, I have this point very much in mind, as do the Government. To give a case in point, we have had a United Kingdom Customs specialist investigator in post in Pakistan since April of this year, and his role is to liaise with law enforcement agencies in Pakistan and to feed back operational intelligence.
Lord Kilmarnock: My Lords, is it not the case that the figures which the noble Earl gave us about an increase of 60 Customs officers this year (and I think he said 100 for next year) must be seen against a background of the overall decline of the numbers in the service which is now at a lower level than when the Government came to power in 1979?
The Earl of Gowrie: My Lords, the noble Lord, Lord Kilmarnock, must recognise that this very important area is but one part of the Customs and Excise functions. The fact that we are increasing personnel and manning levels in this area is an indication of the importance we give to fighting this great evil. That would not of course let the Customs and Excise or any other Government department off trying to achieve manpower savings in very many fields.
Baroness Sharp: My Lords, will my noble friend accept that the street price of heroin is very much lower than it was? Does this not mean that in fact a great many drugs are coming into this country?
The Earl of Gowrie: My Lords, I do not think that that necessarily follows. Even at lower rates this is tragically a very profitable traffic. I think it is more the evil people reacting to changes in the market rather than anything else.
Lord Molloy: My Lords, does the noble Minister not agree that, from reports he has had from the police and from the medical profession, there is a dramatic increase in drug taking in the United Kingdom? Would he be prepared at least to consider this? Many of the victims and their relatives have some idea of the sources of the pushers, and know some of them personally because of their appeals to them. If they had a telephone number or an address which they could contact anonymously and give information, would this not help the authorities to try to reduce the problem by the exposition of those who are dealing in this evil trade?
The Earl of Gowrie: My Lords, the noble Lord has a point. In fact, we obtain quite a lot of our information in that way.
Lord Bruce of Donington: My Lords, the noble Earl mentioned in the course of an earlier reply that we have a representative in Pakistan. Will the noble Earl reply to the question which elicitied that answer which was, "What representations are we making to the governments of the countries involved in this?"
The Earl of Gowrie: My Lords, we have of course made representations to governments. This is part of our continuing efforts against the traffic. We also have many friends and allies in the Western democracies who are in the same boat in respect of this evil traffic, and we work very closely with them.

RAF Leuchars: Security and Road Layout
2.55 p.m.
The Earl of Cork and Orrery: 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 progress they are making in having the public road shut at RAF Leuchars for security reasons.
The Parliamentary Under-Secretary of State for the Armed Forces (Lord Trefgarne): My Lords, the legal and operational aspects of closing the road are still being studied.
The Earl of Cork and Orrery: My Lords, I am obliged to my noble friend for that not very conclusive Answer. Is he aware—and I shall be astonished if he is not—that this road runs straight through the middle of an operational station, with all the resulting dangers to security which that represents? Is it not also the case

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that the local authority is perfectly ready to allow this road to be closed? Is anything more keeping it open at the moment than a tangle of red tape which my noble friend's scissors might easily snip?
Lord Trefgarne: My Lords, unfortunately the tangle of red tape to which my noble friend refers is the labyrinthine corridors of Scottish law, which we are doing our best to negotiate.
Lord Taylor of Gryfe: My Lords, would the noble Lord, in considering this matter, weigh the question of public convenience alongside the security interest? Is he aware that the local community welcomes the RAF personnel in the area and enjoys their presence, rather than have them segregated from the community in any ghetto-like fashion? Will he keep the community interest in mind, and also public access and public convenience?
Lord Trefgarne: My Lords, yes, it is indeed the case that the Scottish people generally are very receptive of defence facilities in their particular part of the country. With regard to this road, there is now a by-pass which I am sure will overcome any modest inconvenience that might be caused by closing this road, when and if we are able to do that.
Lord Mowbray and Stourton: My Lords, as my noble friend has said, there is now a by-pass, but is he aware that the mediaeval village of Leuchars, with its lovely mediaeval church, was there long before the Ministry of Defence or other Ministries started to think of building RAF Leuchars? If this sort of question is going to have to be considered seriously owing to disruption, the implications are terrifying, are they not, for places like Wittering, on the A.1? One could go on ad infinitum. If it is going to be necessary for this to be thought through, ought not the Ministry of Defence therefore to be thinking in terms of putting RAF stations in future in places far more distant from civilisation?
Lord Trefgarne: My Lords, my noble friend no doubt has a point, but, happily, as far as Wittering is concerned, they have the benefit of English law.
Lord Grimond: My Lords, is the noble Lord aware that, among the many interesting sidelines to this matter, the question of access to Leuchars Junction Station arises? Is he aware that this might well be impeded? Will he take the opportunity, therefore, to press British Rail to re-open the line to St. Andrews? I have no doubt that the noble Lord will highly approve of that. If in so doing they are forced to pull down the monstrous hotel which they have built on the old station at St. Andrews, that would be a very good thing.
Lord Trefgarne: My Lords, I am sorry to say that the brief I have from the commander of RAF Leuchars does not cover that point.
Lord Ross of Marnock: My Lords, is the Minister aware that we are very sympathetic to him in his troubles over the labyrinthine corridors of the Scottish
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Office in respect of roads and road legislation? Is he aware that his Government have just spent a year modifying it, codifying it and simplifying it? Is this the result?
Lord Trefgarne: My Lords, it must be that this particular clause escaped the attention to those to whom the noble Lord refers.
Lord Shackleton: My Lords, will the noble Lord be careful in taking the advice of his noble friend Lord Mowbray? It is not unknown for public transport to be found on airfields. Is he aware, for instance, that at Ballykelly—the only place where a cow has been killed on the main runway by a railway train—this problem has now been solved?
Lord Trefgarne: My Lords, I am grateful to the noble Lord for that piece of information.

IRA: Funds from United States
3 p.m.
Lord Grimond: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what representation they have lately made to the Government of the United States to stop the flow of funds to the IRA from that country, and with what result.
Baroness Young: My Lords, President Reagan shares our total opposition to terrorist violence of every kind. We have for many years enjoyed close and fruitful co-operation with the United States Administration in the fight to deny financial and other forms of support to those organisations engaged in terrorism in Northern Ireland. This co-operation has been intensified since the outrage at Brighton.
Lord Grimond: My Lords, I am most grateful to the noble Baroness for that Answer, but could she be a little more specific as to whether she has, since the American presidential election, definitely protested to the Americans about the flow of funds to murderers? I am perfectly certain that further steps could be taken to stop this and that any such steps would be most welcome not only in this country but to most people in Southern Ireland as well.
Baroness Young: My Lords, I understand the concern of the noble Lord. I confirm to him that there is the closest co-operation between ourselves and the American Government. As these are matters of security I am sure that the noble Lord will understand that it would not be right for me to go into detail.
Viscount Hanworth: My Lords, is the noble Baroness satisfied that our public relations from our embassy and elsewhere with the Americans as a whole are satisfactory? If so, does the noble Baroness understand that most of us consider they are not?
Baroness Young: My Lords, I regret that the noble Viscount should take that view about our public

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relations from our Washington embassy. A great deal of trouble is taken to put the case fairly as to what is happening in Northern Ireland. I should like to confirm also that the United States Administration has repeatedly appealed to Americans to refrain from giving financial or other forms of support to those organisations engaged in terrorism.
Lord Fitt: My Lords, does the Minister accept that the main organisation which contributes funds to the IRA is the Irish-American organisation known as NORAID and that that organisation has stated quite clearly—as we saw on our television screens earlier this year and which has been accepted by the FBI in America—that anyone who contributes to NORAID does so in the full and certain knowledge that their money will be used to buy arms for the commission of murder in Northern Ireland? Is the noble Baroness further aware that NORAID and its supporters no longer hide behind the pretence that their money is being used for welfare purposes in Northern Ireland?
I recognise that we are in no position to dictate their laws to the American population, but if it has been agreed by senior spokesmen for the Federal Bureau of Investigation that those who contribute do so in the full knowledge that their money is to be used for the purchase of arms, would it not be in the interests of this country to make forceful representations to the American Government that some way or other, and in view of the knowledge we now have, it should be a criminal offence in the United States of America to make any contribution whatever to the organisation known as NORAID?
Baroness Young: My Lords, I can well understand the very real concern of the noble Lord, Lord Fitt, on this matter. I can confirm to him that those NORAID officials found to be breaking the law—for example, by gun running—have been prosecuted and many have been convicted. NORAID officers have also been prosecuted in connection with non-compliance with the Foreign Agents Registration Act. I confirm to the noble Lord that President Reagan has made perfectly clear his opposition to political violence in Northern Ireland. In a radio broadcast on St. Patrick's day this year he urged, and I quote,
"all Americans not to give support of any kind to the terrorist IRA elements in Northern Ireland".
Baroness Ewart-Biggs: My Lords, does the Minister nevertheless not agree that some of the Americans who send funds to Ireland are ignorant of the situation in Ireland and think that they are sending funds to widows and children? Therefore, will the Minister give a commitment that any of the cuts envisaged for the Foreign Office will not fall on the strength of the British information services in the United States who do their very best to educate the American public as to what is going on in Ireland?
Baroness Young: My Lords, it may well be, as the noble Baroness said, that some of the contributors to NORAID are unaware of its real activities. I think it very important that this point should be brought home to them. I can confirm that very great efforts are made by our ambassador and his staff in Washington, and
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indeed by Ministers and others visiting the United States, to bring home to people the true facts about Northern Ireland.
Lord Galpern: My Lords, can the Minister confirm a recent newpaper report to the effect that the IRA contributed £400,000 to the PLO?
Baroness Young.My Lords, I think that is rather wide of the Question.

Business
Lord Denham: My Lords, at a convenient moment after 3.30 this afternoon my noble friend the Leader of the House will, with the leave of the House, repeat a Statement which is to be made in another place on the European Council in Dublin.
This will be followed by my noble friend Lord Swinton who, again with the leave of the House, will repeat a Statement on student awards.

Televising of Proceedings of the House
3.5 p.m.
The Lord President of the Council (Viscount Whitelaw)The Lord President of the Council (Viscount Whitelaw) rose to move, That a Select Committee be appointed to supervise arrangements for, and report on the outcome of, the experimental period of public televising of the proceedings of the House of Lords agreed to by the House on 27th November 1984.
The noble Viscount said: My Lords, I beg to move the Motion standing in my name on the Order Paper. On this occasion I should perhaps add a brief word of explanation as the Motion represents a slight departure from one of the recommendations of the Sound Broadcasting Committee to which the House agreed on 27th November.
The Sound Broadcasting Committee recommended that it should act as a forum in which all aspects of televising could be discussed with the broadcasting authorities during the experimental period of televising of proceedings. The committee proposed that additional members should serve on the committee for this purpose. After further consideration, it has become clear that a more satisfactory procedure would be to appoint a quite separate committee for the purposes of the experiment, and that is the purpose of this Motion. The practical result will be the same, as it is intended that all the existing members of the Sound Broadcasting Committee should also serve on this committee. The nomination of additional members of the committee will be a matter for the Committee of Selection, which will be meeting later this afternoon for that purpose. I beg to move.
Moved, That a Select Committee be appointed to supervise arrangements for, and report on the outcome of, the experimental period of public televising of the proceedings of the House of Lords agreed to by the House on 27th November 1984.—(Viscount Whitelaw.)
Lord Ronton: My Lords, will it be in order to ask my noble friend the Leader of the House if he will use his good offices with the Committee of Selection to ensure that some of those noble Lords who voted against the Motion last week are represented on the committee?
Viscount Whitelaw: My Lords, I think I can fairly say to my noble friend that that is one of the purposes of the Motion which I have just moved. Of course, it is couched in very correct language because it suggests that the initiative should be wholly with the Committee of Selection. But the Committee of Selection has been left in no doubt that it would be helpful from the point of view of the House if some of those appointed might be those who voted against the Motion in the first place.
Lord Houghton of Sowerby: My Lords, may I ask the noble Viscount whether it will be within the terms of reference of the Select Committee to consider the additional hazards of accident to noble Lords who may fall over the cables and other apparatus, who may collide with the stages upon which the cameras are to be mounted, or bump into the crew and otherwise sustain additional risk of accident? Is this a hazard which the Select Committee will endeavour to safeguard us against? Will it consider what financial compensations are available if, unfortunately, this happens?
Viscount Whitelaw: My Lords, I do not think I am competent to argue on those various complicated matters of insurance that might arise except to say that the committee will, of course, for the convenience of your Lordships consider all the matters that arise during the experimental period. However, I should also say to the noble Lord that at the same time there will be a certain presumption that noble Lords who are reasonable at all times will be able to look after themselves.
Lord Jenkins of Putney: My Lords, will the noble Viscount ask the Committee of Selection to bear in mind that the decision taken in this matter was taken by a majority of more than two to one? Will it bear that in mind when making the selection?
Viscount Whitelaw: My Lords, I think the Committee will be well appraised of that particular matter.
On Question, Motion agreed to.

Food and Environment Protection Bill [H.L.]
The Minister of State, Ministry of Agriculture, Fisheries and Food (Lord Belstead): My Lords, in moving this Motion I should explain that the words "New Clauses" and "New Schedules" were inserted on the Order Paper in error. I therefore move the Motion with the omission of those words. I beg to move.
Moved, That it be an Instruction to the Committee of the Whole House to whom the Food and Environ-
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ment Protection Bill has been committed that they consider the Bill in the following order—

Clause 1

Schedule 1

Clauses 2 to 8

Schedule 3

Clauses 9 to 13

Schedule 4

Clauses 14 to 17

Schedule 2

Clauses 18 to 26

—(Lord Belstead.)
On Question, Motion agreed to.

The Civil Service
3.10 p.m.
Lord Boyd-Carpenter Lord Boyd-Carpenter rose to call attention to the importance of an efficient and dedicated Civil Service; and to move for Papers.
The noble Lord said: My Lords, the terms of the Motion are, I hope and believe, not only anodyne, but uncontroversial. Indeed, as I was reflecting on what I was to say this afternoon, it almost occurred to me that they might be subjected to the criticism which some of your Lordships may remember was applied to the speeches of his late Majesty King Louis Philippe of France, of whom it was said that his daily prayer was clearly: "Give us, O Lord, our daily platitude". The Motion nonetheless, contains one word of significance, the word "dedicated". The intention behind that word is to try to put out a marker at least for the point of view that those who in our public service serve the Crown and the community, rightly have demanded of them a very special degree of loyalty and of devotion.
On any view, the Civil Service is a major element in our system of government. Indeed, those of your Lordships who habitually watch that extremely entertaining television programme "Yes, Minister" might well draw the conclusion that the Civil Service was our system of government. Only perhaps those who have looked at that a little more critically may reflect that, on the contrary, the truth of this kind of matter is best expressed in Bernard Shaw's play The Applecart, in which some of your Lordships may remember the point was made that real power is exercised in any system of government by those who have the brains, the determination and the courage to operate it.
Having said that, the Civil Service is obviously a major element in our system. It employed on the 1st October 1984—the latest date for which I have the figures—some 617,000 people, of whom, in round figures, half a million were in the non-industrial Civil Service and the rest in the industrial. That is, in fact, a substantial reduction below the figure for the 1st April 1979, when the total had risen to 732,275. It still employs, however, 2·38 per cent. of the working population of the country. Despite the reduction in its size over the last five years—a reduction which your Lordships may be interested to know has saved some £700 million a year net in public expenditure—the pay bill for the Civil Service stands at the latest figure of £5·35 billion.
We should, I am sure, debate this afternoon the affairs of a service which directly and indirectly affects the lives and livelihoods of every one of our population from the cradle to the grave or, perhaps, to put it in more appropriate language, from the maternity grant to the funeral grant, and the more so because the Civil Service shares with individuals in politics and public life the uneasy distinction of being very frequently the butt or the subject of criticism of the media of publicity. Your Lordships will be only too familiar with the rather jejune attacks on the service as being bureaucratic—whatever else a service that has to act from its desk can be, I do not know—and also with the traditional and wholly out-of-date picture of the civil servant as being somebody wearing striped trousers and carrying a neatly rolled umbrella. That again, of course, disregards not only sartorial change, but the significant fact that only 5 per cent. of the total membership of the service actually work in the Whitehall departments, of which that is supposed to be a picture.
The service, however, does expose itself from time to time to a certain amount of ribaldry by its use of the English language. I should like to remind your Lordships of two of my own favourite specimens of this, the first of which I think would have a great appeal to the noble Lord, Lord Jenkins of Putney; or would have had, had he still been in his place. This is a notice:
"In the event of a major nuclear attack, the county libraries will be manned only by a skeleton staff".
Then there is the Department of Employment circular of a year or two ago which delicately, or perhaps indelicately, stated:
"Approximately half the married people in this country are women".
But to pass to more serious aspects, I think those of us who are concerned with the welfare of this great service are increasingly conscious that all is not very well with it. There was a very thoughtful and intelligent article on this topic in the Financial Times last week. The article brought out the point that many of the ablest men and women in the service were leaving it and going into the private sector—either industry or commerce. The Financial Times writer attributed this in part, rather interestingly, to the lack of respect and prestige which it was thought the service now surfers from; in other words, they thought that they were insufficiently appreciated. It is certainly the fact that recruiting of the ablest men and women in the universities for the highest grades of the service is increasingly difficult, although in times of unemployment recruiting generally for the service does not present any particular difficulty.
There is then what is, to me, the very distressing growth of what is called "industrial action" inside the service. The expression "industrial action" is, of course, a misnomer—if it means anything, it means industrial inaction—but it is the conventional phrase that is used to indicate either strike action or action short of strike action which involves not doing all one is expected to do.
The particularly painful example—and I must confess to your Lordships, having been involved in the department concerned for some six-and-a-half years, it is a very painful one for me—is that of the long-
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drawn-out industrial action in the Department of Health and Social Security's offices at Long Benton, near Newcastle. Certainly in the six-and-a-half years that I was there—now, I am sorry to say, many years ago—it never occurred to me that the devoted public servants there, who seemed to be immensely concerned with their important job of relieving poverty and hardship, would ever, in pursuit of their own claims or their own interests, come to the point of actually harming those who they were expected to look after. This is an extremely distressing phenomenon, and it is not, of course, the only one.
Computerisation has, of course, enormously increased the effect of quite small industrial inaction in as much as, if a number of key people come out and disrupt the computer system, an enormous area of work is disrupted. That is what has happened to some extent, I understand, at Newcastle, and also in one or two other directions.
That, combined with these other incidents, leads to the first suggestion that I want to make to my noble friend the noble Earl on the Front Bench for consideration when he comes to speak either shortly or at the end of the debate. It seems to me that these various factors which I am trying to outline underline the importance of moving into a no-strike agreement in certain sections of the service which are important to the community, either because of the harm to individuals which can be done by disruption of them, or because of questions of national security and the like.
One must accept that if individuals are recruited and join on a basis that no strike action will take place, there must be compensatory arrangements in their favour. It can of course be said that regular members of the Civil Service have two very considerable advantages over most of their fellow citizens. They have a very high degree of security of tenure and they have the certainty, at a fairly early age, of an indexed pension. But I do not think that one can quite duck with that the question of pay. If individuals are to be induced—and it seems to me clearly that this would have to be done voluntarily—to accept terms of service which absolutely exclude strike action, there must be some reasonable mechanism for determining their remuneration. Otherwise, they may fear that some Government, some day may treat them badly.
I do not wholly follow the Megaw recommendations, but I think that it might be possible for those who are on no-strike terms to be distinguished from the rest of the service by having a form of arbitration which, while not wholly and compulsively binding on the Government of the day—I think that the Government of the day, with their responsibility for the economy of the country, must always have the last word—would be difficult for them to override. I put this just as a suggestion. If a Government wished to reject arbitration in these cases, they might be compelled to lay a statutory instrument, subject to the affirmative procedure in both Houses. In my experience and that of many of your Lordships, that is a very considerable discouragement for a Government to do anything of the sort.
The no-strike concept is, I think, reinforced when one reflects on the power which the service, or many members of it, have over the individual citizen. There

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is the Inland Revenue. Seeing the noble Lord, Lord Houghton of Sowerby, I recollect most gratefully the way that he, as secretary of the Inland Revenue Staff Federation, handled the affairs of those important people. But they have very considerable power over the citizen. One always thinks in that connection of the old saying:
"To tax and to be loved, no more than to love and to be wise, is not given to man".
There is the Customs and Excise; there are the staff, as I have already mentioned, of the DHSS, the staff of the Department of Employment, immigration officers and many others who exercise direct power over the citizen.
I am aware that in most of those cases the citizen can, if aggrieved, go to the courts. As your Lordships know, the courts of law, like the Ritz Hotel, are open to all, but the financial risk of taking on a major Government department in the courts amounts to a considerable deterrent to an aggrieved citizen.
Therefore, when one has people such as this exercising real power over other individual fellow citizens, it is not only indecorous—I think that is too weak a word; it is surely wrong that those individuals who exercise with a very wide discretion these very considerable powers over all of us should be in a position that they might quite suddenly decide to abandon their duties in order to pursue some claim of their own. I ask my noble friend to indicate what is the Government's thinking on this issue of a no-strike arrangement.
That leads me, if I may, briefly, but I think inevitably, to the GCHQ situation. It seems to me that the simple problem there—simple to state and difficult to handle—is that if an ouside trade union is properly to represent the affairs of its members, it must know what their work is, what they are doing, and what their conditions of service are. As necessarily the officials of the unions concerned have not been security vetted, they may be, with the politicisation of the unions, of very extreme political views. It is extremely difficult for any Government concerned with public security to allow the ordinary system of trade union representation in a high security institution such as GCHQ. My only criticism—I realise that it is probably the converse of the criticism of noble Lords opposite—is that the Government did not get on with that and do it some years ago.
I shall pass quickly to my two remaining points. The first is the necessity of maintaining the political impartiality of the service, which is its old, long and honourable tradition. When Sir Winston Churchill appointed me Financial Secretary to the Treasury in 1951 I inherited the private secretary who had previously been serving my Labour predecessor, Douglas Jay. He served me, as he served Mr. Jay, with absolute loyalty. He was a very distinguished official, who, I am happy to say, is now Permanent Secretary to the Department of Energy. But to this day, although he is an old friend, I have not the faintest idea what his political views are.
I must not touch on any issue which is at the moment sub judice, but there is some indication in some directions of impatience among those in the service with the political neutrality which their job
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imposes on them. I can speak with a little understanding of this. When I first came into your Lordships' House I was chairman of the Civil Aviation Authority and bound by the same rules of political impartiality as a public servant. I would on occasions sit here listening to your Lordships without being able to yield to the temptation of intervening, although I am happy to recall that those who advised me said, on the other hand, that facial expression was not excluded—a freedom of which I am bound to tell your Lordships I occasionally took full advantage.
A point that I want my noble friends to think about and say something about is the age of retirement in the service. The Diplomatic Service has a rigid age of 60, though the Prime Minister, to her credit, broke that not long ago in order to send an extremely able man to the Washington embassy. In the Home Service in the days when I had responsibility for the service I managed to loosen the rigid 60 age limit into a retirement zone after 60. But with the increased expectation of life and the increased efficiency of medicine, I suggest to your Lordships that that is a very early age of retirement in a service which, unlike the Armed Forces, demands mental rather than physical agility. I am not suggesting that the Armed Forces do not need mental agility, too; they need both.
It is wasteful to send on pension, perhaps for 20 or 25 years, one hopes, a man of 60 who is doing an excellent job, just because he is 60. That is very wasteful. In these days when the United States has just elected for his second term a President of 73, and when the Kremlin is full of aspiring and sprightly young men in their seventies—aspiring to whatever vacancies there may be—for our service (diplomatic absolute; home relative) to impose an early limit such as this is absurd.
The absurdity is emphasised when your Lordships see that many of the leading figures of the service are obviously regarded by industry and the City as being worth paying very large salaries to. They are recruited promptly at the age of 60 and go on to render extremely useful and distinguished service, we hope, for many years to come. I hope that we may have a look at the age limit provisions.
The most important issue (and I have left it to the last) is the question of moving the service—gearing it—into a greater appreciation of the importance of management. Senior civil servants are responsible for managing large organisations, quite apart from being administrators or political policy advisers. When I was chairman of the Public Accounts Committee in another place some years ago, I saw example after example of the failure of senior people in the service to manage. One case will suffice as an example—the Bristol Siddeley engines case. A Government department happily paid the bill to Bristol Siddeley, for rehabilitating some aircraft engines, twice in succession without noticing it until the Comptroller and Auditor General picked it up.That would be difficult to see happening in a properly managed business.
Therefore, one goes back to the Fulton Report. I have the quotations from it, but for reasons of time I will not weary your Lordships with them. The Fulton Report in 1968 suggested that it was essential that management techniques, control of management, the

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handling of large enterprises, the allocation of jobs, specific cost limits—all those sort of things which are the normal practice of senior management in industry—should be developed in the Civil Service, and that, given the very high level of ability of such senior members of the Civil Service, if they were properly instructed in it they would manage extremely well. But, unhappily, it seems that not much has happened.
Sir Henry Clucas, the former permanent secretary of the Department of Trade in 1982, 14 years after Fulton, was complaining vigorously that very little indeed had happened in the training of himself and his former colleagues in management techniques. I know that the present Prime Minister, for whom my noble friend Lord Gowrie carries on the day-to-day management of the service, is herself very keen on this, and that she introduced the noble Lord, Lord Rayner, among others, into helping to make some movement in this direction. I therefore hope that my noble friend will be able to tell us that progress, pitifully slow since Fulton, yet in what everyone who has examined the service regards as a critical area, really is now being made.
Perhaps I may be allowed to say that we in this House are very lucky to have the noble Earl as the Minister responsible for the day-to-day administration of the service. We can therefore hear from him this afternoon and this evening: not having, as I am afraid we sometimes do, the reading of a brief by a Minister who is not in the department concerned, but a proper speech by the responsible Minister. This is a very great advantage to the House, as I have little doubt the noble Earl's position is to the Civil Service. I am hoping very much that we shall hear from my noble friend an answer to the points I have put and to the many points which, looking at the speakers' list, I expect will be put.
I have deliberately fastened, as I think is all one can do in a short time, on the points of criticism. I do not wish to leave the impression that I am other than a great admirer of our Civil Service. I want to see it continue to progress and to adapt, as necessary, to the greatly changing needs of the last quarter of the twentieth century, and indeed to be ready to adapt to the years further ahead. It is probably the finest service in the world. It has a splendid record in so many things. Corruption is almost unknown, despite Gibbon's admirable remark that corruption was the mark of a political democracy. It has very high standards indeed, and it provides a very good foundation on which to build the new improvements which I hope and believe are under way. My Lords, may I sum up what I have tried to say in the language of a school report on the service? It would be: "Doing well—could do better". I beg to move for Papers.
3.34 p.m.
The Earl of Gowrie: My Lords, I congratulate my noble friend, Lord Boyd-Carpenter, on his choice of subject today. That this is more than conventional congratulations is indicated by the splendid team of batsmen which his opening bowling has attracted. He deserves particular commendation for bringing before the House a subject which has been left without full debate by your Lordships for over 16 years. Sixteen
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years ago, the particular question for debate was action on the then recently published Fulton Report—and my noble friend mentioned this—which set out proposals for wide-ranging change in Civil Service structure, training and attitudes. Reports and reviews are usually good and worthy things. The Fulton Report still has things to say of relevance 16 years on.
However, I must confess that I am pleased that this debate is not about a report. I say this because reports, however good they are, tend to look backwards and forwards and indeed any place at all other than where we are now. I want, by contrast, to try to use my brief time in this debate to talk in quite detailed terms about what is actually happening in the here-and-now of the Civil Service today. I want in particular to try to get under that surface of stereotype, caricature, and generalised criticism that the Civil Service has always managed to attract.
I do not think that this criticism is malevolently made. I think the service attracts such criticism perhaps by its very nature. Modern government, including Ministers, are always liable to be thought of as "they" rather than "we". I shall be talking about changes and improvements in management, as my noble friend challenged me to do. But I am not going to talk at any length about new management systems or procedures. I have to confess that I have not yet mastered the jargon of management, and I am making fairly strenuous efforts not to do so. I am going to describe in what I hope will be plain language (and we are trying to revive the precedence of the admirable Sir Ernest Gowers in a number of our forms and in other fields) what different groups of civil servants around the country have been and are doing to try to earn the labels "dedicated" and "efficient".
Those are the people who work behind the counter in Jobcentres and tax offices, who test people's driving, who collect VAT, who work in defence stores and workshops, or who staff the Customs and immigration desks, as well as those conforming to the more usual image of the bureaucrat in his bowler hat who sits in Whitehall and provides policy advice to Ministers. However, I must say that in my years working with the Civil Service I have yet to spot a bowler hat—rather a pity in many ways. I then want to pick out one or two key points about the direction in which we are trying to move.
What struck me particularly when I had the great privilege to be asked to take on my present responsibilities—and I suspect that it strikes the more casual observer of the Civil Service—is the immense size and diversity of the service and the vast scale of its operations in money terms. It is rather easy, as a result, to think only in terms of money and numbers, and to look back to the period before the First World War, when the whole Civil Service was smaller than one of our single present departments of state, and to look back on that as a kind of golden age. Of course, one cannot ignore numbers and money. The reduction in Civil Service numbers which this Government have achieved since 1979—from 732,000 to 617,000 souls—is saving the taxpayer some £700 million a year. But it is not the only thing to notice about our drive towards greater savings and efficiency.
An essential element of our basic policy is to see that we do not employ civil servants on tasks which can be

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done equally well or better by the private sector. I do not believe that this is a matter of party political dogma, though of course it is often represented as such. It is surely good sense. We in this country are not alone in learning the lesson that the bigger the share of resources which the public sector takes, the bigger the burden on the taxpayer and the less resources are available for the creation of wealth. You only have to look at other Western democracies to see that this is now a universal brand of common sense and not a particular political or economic theory. It is everywhere driving the push to cut public sector numbers and costs. But these simple matters, or relatively simple matters, of cutting numbers and money are not enough in themselves.
My noble friend Lord Rayner—and he has told me how very sorry he is that he is unable, as he is abroad, to take part in this debate—made what seems to me a very important observation in a recent lecture at London University. He said:
"The volume of expenditure is too often mistaken for, or treated as the surrogate of, quality of service or of function performed".
That is a very easy trap to fall into. My noble friend is quite right to warn us against it. It is a trap that I and my ministerial colleagues fall into ourselves from time to time—the trap of confusing the volume of expenditure with the quality of service or function performed. How often do we hear people say "We are spending so many million pounds on a new programme to help this or that worthy purpose", or "We have now got 500 people providing this or that worthy service across the length and breadth of the land". It sounds good and we then stand back and wait for the applause. But it means rather little by itself. What matters is whether the service provides any real value and what is the quality of the service.
So we must have some objective tests of services. Surely, the basic test of any service or programme provided by civil servants is value for money. Over half of the cuts in Civil Service numbers have been achieved by improving efficiency. In this area, my noble friend Lord Rayner's own work as the Prime Minister's adviser on efficiency—work that is now very ably being carried on by his successor, my colleague in the Cabinet Office, Sir Robin Ibbs—has helped us beyond measure, and I pay tribute to it. The Rayner and Ibbs efficiency scrutinies apply what I have called an objective test in a very simple way. They ask four simple questions of any Government service. Why do we do it? What does it cost? What value does it add? And if it has to be done, does it have to be done in this way? It is really no more complex than that. There is nothing glossy, elaborate or expensive about such questions. And they are nothing to do with fashions in managerial systems. Yet the savings so far generated as a result of asking these questions are worth £330 million a year with some £45 million saved on a once-and-for-all basis.
So one important feature of the efficiency work is its simplicity. Its other feature—and this, I think, is often overlooked—is that the scrutinies are carried out and the improvements in efficiency achieved not by a team of outside management consultants, though we use them from time to time, but by civil servants themselves. And this is true of all the efficiency work
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now going on around Whitehall and in Civil Service offices around the country, whether or not it is under the direction of the centre. You can impose cuts from outside. You can supplement internal expertise from outside. You can encourage and stimulate from outside. But you cannot impose efficiency, effectiveness and value for money from outside. They have to come from the inside. And that means hard work and dedication from the inside as well.
The public has always been a hard taskmaster. As members of the public, which we all are, we seldom want fewer services and we seldom want to pay more for the services that we have. What we want are better services at lower cost—tax offices that open at times of day that suit us, counter staff who have time to explain procedures that we find complicated in a world that is to some degree inevitably bureaucratic because we are requiring so many services. We would get nowhere without the positive co-operation, initiative and leadership of the civil servants themselves. And echoing my noble friend, these qualities also include the greater qualities of loyalty, devotion and dedication.
May I give you, my Lords, a few quick examples of the sort of things that have been happening. I begin with a word of caution. Your Lordships' first reaction to some of the examples may be surprise that such inefficiency can have existed at all rather than admiration at improvements that have taken place. But I would be surprised if any organisation in the public or private sector could not find just as many examples. The Civil Service is not unique. The changes that it has come through in the last few years and the difficulties that is has had to cope with can be found in any number of large organisations in both the private and public sectors including those that are household names for efficiency. Just look at Sainsbury's or Marks & Spencer, or indeed in the public trading sector, British Airways or British Leyland. They have all had to face one common and simple economic truth. The public wants value for money and it rewards those who provide it.
We are therefore not out on a limb. Nor is this a kind of political crusade. We have simply been doing what is happening everywhere. The basic formula is quite simple. Each member of the organisation knows what he or she is meant to be doing, why it needs to be done and what it costs. And each member has to learn to take individual responsibility for delivering the tasks with maximum value for money. If you do not have that, the pattern of inefficiency will repeat and repeat.
I give now the examples. On example is the wheelchair example. One Government department had a store which took delivery of wheelchairs and parts from manufacturers, and they sent them on to local distribution points for supply to users. Demand was always greater in the summer because that is when disabled people are likely to want to go outdoors more often. The store, apparently with good sense, used to stockpile the wheelchairs so that they could meet peak demand. But this apparent good sense overlooked the possibility of getting a better match between manufacturers' supply and patterns of demand and the fact that the local distribution centres already held four to six weeks' supply of wheelchairs which were

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together more than enough to cope with any hiccups in demand. So there was a double stockpiling and double costs. The main store has now become a receipt and distribution point only, reducing its own stock to practically zero. The result is savings of around £5 million previously tied up in stores and yet there is no loss of service to the user.
The second is an example that I happen particularly to like. It comes from the Inland Revenue. A 1981 efficiency scrutiny by the Inland Revenue Office found some local tax offices gradually disappearing under tonnes of files. The files were literally everywhere—under desks, behind doors and even blocking radiators. Why did they need so many? It was to answer queries and complaints. Why were there so many queries and complaints? It was because there were so many delays. Why were there so many delays? The answer was because there were so many files that it took so long to find the right piece of paper. Reverting to my arts hat, this is like the Borgesian universe. The examining officer looked at how assessments were made and recommended doing away with 20 million files on those with simple tax affairs. The Revenue identified the problem and improved their practices to make the system more efficient. Accordingly, there were fewer queries and complaints.
Both these examples concern services to the public. This is an area worth looking at in a little detail because I know that there is a great deal of concern that cuts in manpower and spending may produce extra strains on staff and therefore a poorer service for the customer. I of course would not claim that we have, in all cases, maintained exactly the same standards of provision and service that we inherited in 1979. Indeed, if we are committed to getting better value for money, it would be pretty odd if this was the case.
There can be no case for asking the taxpayer to fund a service that does not justify its cost. There is a place for the Rolls-Royce and a place for the handcart. So I do concede that some services have been cut and others have changed in quality. It is quite right to consider whether some services were not too lavish. What I do not concede is that cuts in money and manpower necessarily mean a worse or a smaller service. There is nothing magical about the numbers of people employed or the amount of money spent on any particular service.
Again, some brief examples. The DHSS have recently introduced a postal claim form for supplementary benefit in place of visits by officials or calls by claimants at local offices. The form is simple to understand; I think the technical description is that it is "user friendly". The change has been generally welcomed by the public as being more convenient to them. At the same time, it has enabled us to save no less that £13 million a year and to use some of these savings to improve other services. Another example is the transfer of most relicensing of motor vehicles to the Post Office. This has saved about 1,000 Civil Service posts and produced annual cash savings of about £9 million a year, but the result is an improved service to the public, who now have another 1,000 outlets to go to.
Again, in common with industry, civil servants in all kinds of areas are also achieving impressive
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improvements in productivity. In the Customs and Excise field the numbers of passengers from abroad and the volume of vehicles, ships and aircraft have increased by well over 10 per cent. in the past three years or so. And yet the same services have been provided by 10 per cent. fewer staff. By putting staff into key areas we are also achieving real improvement in performance.
For example, 160 new posts are being allocated this year and next to strengthen Customs controls. I know from Question Time today how interested your Lordships are in our efforts to combat the evil of drug trafficking. The number of drugs seizures increased from 1,784 in the year ended March 1979 to 3,315 in the year ended March 1983. Seizures of heroin went up from 40 kilogrammes in 1979 to 250 kilogrammes in the first 10 months of this year; and that has a street value of over £25 million. So, as I emphasised earlier this afternoon, in 1985–86 we are allocating 100 further posts to the fight against this great evil.
Another area is that of social security—as my noble friend implied, a bureaucratic jungle which we are gradually clearing, but not of course without stresses and strains. Between 1980 and 1984 the number of unemployment benefit claimants went up by 60 per cent. In the same period staff productivity has increased massively. One member of the staff now deals with 114 claimants, compared with one every 76 claimants in 1980. This reflects the very greatest credit on the staff who work in these offices in what are often stressful and exposed jobs. Of course, people will say that the efficiency and productivity gains achieved so far cover all the easy targets. It is always easier to get the first savings. All that I would say is that, after five years, we are continuing to find more.
One area where vast sums of money are spent every year is Government purchasing. Some £15 billion goes every year in buying a vast range of goods and services—from comparatively small sums for desks and paper to larger amounts for new technology. There are some items that you would not immediately think of. The Government buy 14,000 loaves of bread a day, for instance, at a cost of nearly £2 million a year. We discovered that from department to department there were puzzling as well as accountable variations in the cost of bread. My own department will be publishing a report in the next week covering a major review of non-military purchasing practice which will identify a number of ways in which departments can get substantially better value for money in this kind of buying. Some of the changes are very simple—just a matter of only specifying the quality the job needs. In one department we found for example that by using a less expensive quality of paper for various kinds of departmental printing we were saving around £400,000 a year.
All these examples have been given. What do they add up to? What do they tell the Civil Service observer other than that the Civil Service is under pressure and that it is working hard and delivering rather more? I believe that underlying them is something more positive than that. It is a fundamental management change of the sort for which my noble friend asked. It is not a change of structure or training of the kind that we saw after Fulton, though of course that comes into it; it is a change of attitude and approach. It is not a

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quick or an easy change and it did not spring fully formed from the head of the Prime Minister or my noble friend Lord Rayner or anyone else in 1979. But they gave it the push; it is there and it is growing.
The central core of the change is what we call the Financial Management Inititive. Essentially, that is the move from a situation in which efficiency and value for money were someone else's responsibility to one in which everyone in Government shares and accepts some of that money responsibility. There are two main features. First, we are moving towards a more explicit and open style in which we set out what we are trying to achieve and what yardsticks we are going to use to measure achievement. Secondly, we are moving towards a more dynamic managerial style. That means moving out of the complacent, "We've always done it this way" kind of attitude to the, "I wonder whether we could get better value if we did it that way" attitude—in short, positively looking for regular improvements in performance and value for money.
Both features Impose disciplines, and not only on those down the line in the permanent Civil Service. Ministers and senior management cannot ask staff to accept reductions in resources without themselves being very clear about what standards and priorities they expect. We have therefore tried to build into Civil Service management at every level four basic principles. First, that managers need to be given clear objectives; secondly, that those with the responsibility for achieving them need to be identified; thirdly, that their achievement needs to be monitored; and, fourthly, that managers need to be given the information, training and expert support necessary for them to carry out their responsibilities.
The new management systems which have been introduced in each department provide the framework for action. We have already published details of progress in two White Papers, so I shall not delay the House with further description on that front. May I instead, in closing, mention just two recent developments which support and fit into this new approach and which I think best illustrate it?
There is the experiment announced today under which certain staff will be able to earn a bonus for particularly good performance. Performance-related pay is widely used in other organisations as an incentive to better performance. I think it will be an interesting experiment, running alongside and reinforcing the changes I have mentioned. We also have some group incentive schemes which involve ploughing back a proportion of savings into improved amenities for the staff involved. For instance, many offices qualifying for awards have allocated up to £1,000 to their sports and social clubs for the provision of new or improved equipment.
Then, the Prime Minister, as Minister for the Civil Service, announced yesterday the publication of a report on a review of the consultancy, inspection and review capabilities in departments. Copies are being placed in the Library today. It sounds rather unexciting, but in fact what it involves is giving people down the line, who have the responsibilities concerned, the expert back-up they need to carry out their jobs effectively. It is therefore most important.
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As my noble friend Lord Rayner said, what we have seen in recent years is the first coherent and sustained attempt to assess the operation of the state from a management perspective. That has produced a considerable upheaval, and one cannot have change, even change for the better, without some inconvenience. The changes we have gone through in the last few years have meant inconvenience for Ministers as well as civil servants. Civil servants—and even Ministers—would not be human if they did not occasionally look back to other and quieter times. We also would not be human if we did not worry that we were losing some of the strengths of those earlier times in the process of getting rid of the weaknesses. However, the strengths remain. These have always been the Civil Service's capacity for hard work, its ability to work quickly and effectively in crisis and to provide services to the public with a high degree of equity, and its comparative freedom from corruption.
Our professional or non-political Civil Service remains a model which many other countries regard with envy. I believe that the new emphasis on value for money, which I have tried to outline, and on efficiency, will build on these strengths, not destroy them. As my noble friend has said, the process is long and it may sometimes be difficult and painful—just as it has been for many other organisations. But when we get to the end of the process I believe that we shall have a Civil Service which, combining the traditional strengths with the new ones that I have outlined, will be one to which civil servants themselves will be proud and eager to belong, and which the country will continue to be proud to possess.

European Council: Dublin
4.1 p.m.
Viscount Whitelaw: My Lords, with the leave of the House, I shall now repeat a Statement on the European Council of 3rd–4th December which is being made in another place by my right honourable friend the Prime Minister. The Statement reads as follows:
"With permission, Mr. Speaker, I should like to make a Statement on the results of the European Council held in Dublin, 3rd–4th December. I was accompanied at this meeting by my right honourable and learned friend the Secretary of State for Foreign and Commonwealth Affairs. The conclusions of the Council have been placed in the Library of the House.
"The Council covered four main subjects. First, we examined the economic situation in the Community on which the Commission had submitted a detailed report. In particular, we discussed the creation of more jobs by: opening up the internal Community market for all goods, services and professions; defining European standards for products; and improving the Community's performance in advanced industrial technology.
"This has to be achieved in the context of—and I quote—'moderation in the evolution of real wages' and 'a pause in the growth of current public expenditure and a decline for several years in its

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share of GDP'. The Council agreed to set up a review of manpower policy with the aim of directing training to sectors where labour will be needed, of encouraging job mobility and of fostering enterprise, especially among young people.
"Secondly, the European Council reached agreement on the Community's position in the enlargement negotiations with Spain and Portugal. Two major issues had been outstanding: wine and fisheries. Both were satisfactorily settled. Unfortunately, Greece reserved her position on enlargement, linking it with a bid for more money for Mediterranean programmes. However, the enlargement negotiations will now go ahead on the outstanding issues and, we hope, be brought to an early conclusion, with a view to accession on 1st January 1986. The outcome will have to be referred back to the Council of Ministers, especially in view of the position adopted by Greece.
"Thirdly, we gave particular attention to further measures to relieve famine in African countries, particularly in Ethiopia. We agreed that the Community and its member states should provide 1·2 million tonnes of grain in 1985. This is a really major effort which the United Kingdom strongly supports. We appealed to other donor countries to match this effort.
"Fourthly, we had a preliminary exchange on reports from two groups established after the Fontainebleau meeting. These groups are dealing with Community institutions and with practical measures such as easier movement of goods and frontier formalities. The final reports will be substantively discussed at the European Council in the first half of next year.
"The European Council also urged the Environment Ministers to reach agreement at their meeting tomorrow on guidelines for the reduction of lead in petrol—a British initiative within the Community—and on vehicle emissions.
"Within the context of political co-operation the Council endorsed the principles for dealing with terrorism and the abuse of diplomatic immunity, which were adopted in September and are now being put into practice. We discussed East-West relations, stressing the importance of reaching satisfactory arms control agreements, and also the Middle East. In the discussion on Central America we reaffirmed our support for the Contadora process.
"Finally, the Foreign Affairs Council adopted the text on budgetary discipline, including the strict financial guideline for agricultural expenditure. It is the result of considerable efforts over a period of years by Britain to ensure the better control of Community expenditure and a better balance in the Community budget".
My Lords, that concludes the Statement.
Lord Cledwyn of Penrhos: My Lords, we are grateful to the noble Viscount for repeating the Statement. We are very pleased that the negotiations at the Dublin Summit reached agreement on so many fronts. We note that the appointment of all 14 new members of
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the Commission were, in fact, approved, and that, of course, includes the noble Lord, Lord Cockfield. We, therefore wish him well during his tour of duty, as we do his colleague Mr. Stanley Clinton Davis.
The Statement refers in its final paragraph to budgetary discipline and Community expenditure. I note that at the Summit Britain was guaranteed a two-thirds reduction in its net contribution to the Community, and that there has also been agreement on a system to control the growth of the Community budget. We of course all welcome that. However, what has the noble Viscount to say about next year's budget? As I understand it, the budget as presently formulated would lead to a shortfall at the end of 1985. To what extent is the budget settlement dependent upon reaching an agreement with Greece over the question of development aid allocated to the—and I quote from the communiqué—"integrated Mediterranean programmes"?
I also note in today's press that there is a danger that the Greek demands for a very large sum of money—£1,500 million—in return for agreement to the accession of Spain and Portugal may well threaten the schedule for enlargement. Will the noble Viscount comment on that? While agreeing wholeheartedly that the budget must be held in careful check on all fronts, will he assure the House that the Government will listen to the complaints of all member states as they have listened to ours over the years? Is the noble Viscount confident that the dispute with Greece can be settled at the Summit in March 1985? Is there any danger that the enlargement programme, after so long a delay and so long a wait by Spain and Portugal, will be delayed yet again?
We further note the broad agreement on wine production, on industrial relations, and on agriculture. We also note that we have had successful bilateral negotiations over the question of Gibraltar and we have seen the announcement about the opening of the frontier. But many Gibraltarians remain anxious, as the noble Viscount knows, about the question of sovereignty. Perhaps the noble Viscount can say whether that subject was broached during the summit in Dublin.
The fisheries issue does, in the opinion of many noble Lords, present quite considerable problems. The Statement says that the issue is settled. Spain has a fleet of 17,000 vessels and if the fleet is retained at that size Spain will make up a large proportion of the total Community fishing fleet. Can the noble Viscount say what proposals are being placed on the table and what are their implications for our own fishermen, especially if the size of the Spanish fleet remains at its present level? The point is: is the size of the fleet to remain the same?
We hope that the remaining obstacles to full European co-operation will be settled as soon as possible. We welcome the agreement reached in Dublin not only on the question of budget and enlargement, but also on the questions of aid to Ethiopia and other drought stricken areas; on economic strategy; on political co-operation and foreign policy; and on dealing with terrorism. Agreement on those matters should be warmly welcomed. Not least we welcome the resumption of friendly relations between Mrs. Thatcher and Dr. FitzGerald.
Lord Gladwyn: My Lords, there are obviously many welcome features in this communiqué, more especially the perhaps rather unexpected agreement on wine and fisheries, which should permit the entry of Spain and Portugal into the Community on 1st January 1986. However, in common with the noble Lord, Lord Cledwyn, we should like to have details of the fisheries agreement, because it rather depends on them whether or not we shall be inclined to approve it.
The apparent temporary veto on the application of this agreement by Greece is, however, something which must surely be overcome, and overcome quickly. Are we to understand that if Greece should continue its veto it would not be possible to put the agreement into effect? And would this not suggest that, complete and invariable reliance on the unanimity rule not being the way to run a railway, the suggestions made in the Colombo-Genscher plan to modify the unanimity rule—which, of course, does not figure to any great extent in the Treaty of Rome, which we have all signed—will have to be adopted if, in the long-term, the Community is not to run into the sand?
The methods proposed for making the Community work more effectively so far as the economy is concerned seem to be satisfactory in principle, though presumably we must wait and see what actually happens in practice. Much would seem to depend on whether or not the group dealing with the vital question of frontier formalities reaches a satisfactory agreement fairly soon.
Finally, we would certainly congratulate the Government on having, it would seem, taken the lead in the decision to despatch no less than 1.2 million tonnes of wheat to Ethiopia and other countries affected by famine; on having given support to the Contadora process in Central America; on obtaining final agreement on budgetary discipline; and, indeed, on apparently having made some progress on ways and means of overcoming terrorism. On the whole, it was undoubtedly a very satisfactory council meeting.
Viscount Whitelaw: My Lords, I am grateful to both noble Lords for the welcome which they have given the Statement, and particularly for their welcome of the fact that there was a considerable area of agreement at the Summit—perhaps in marked contrast to some previous ones, and therefore all the more welcome for that.
The noble Lord, Lord Cledwyn, mentioned first the appointment of the 14 new members to the Commission. I should like to join him in wishing every success to the new commissioners whom we are sending—my noble friend Lord Cockfield and Mr. Stanley Clinton Davis. I am sure they will be very worthy representatives of our country on the Commission, and again I join with the noble Lord in wishing them well.
The noble Lord, Lord Cledwyn, asked about next year's budget, and particularly about the Greek demands, which could, on the surface, possibly hold up the accession of Spain and Portugal. I understand that in this particular field Greece has been asking for very large amounts. Both the Prime Minister and our major partners, President Mitterrand and Chancellor Kohl, agreed that amounts on the scale for which
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Greece is asking could not be provided, and there will therefore have to be further discussions about this.
Both noble Lords were anxious whether, by these demands, Greece would frustrate the entry of Spain and Portugal. I understand that my right honourable friend the Prime Minister and the other leaders believe that the negotiations with Greece will succeed, and they cannot believe that Greece, although one of the poorer countries with problems in the Mediterranean, and although clearly anxious, would seek to exploit those negotiations to the extent of hindering the accession of Spain and Portugal in 1986. I accept that that is something for the future.
The noble Lord, Lord Cledwyn, asked for the position as regards fisheries. The details of the agreement are still being discussed by the agriculture Ministers, and no doubt further information on this matter will be available soon. I understand that the Community has established the position on the basis of which the further negotiations with Spain and Portugal will be conducted. The position which has been adopted will safeguard fishing stocks and the traditional fishing rights of the existing member states. I think that transitional measures can then be considered for the future.
I am grateful to the noble Lord, Lord Gladwyn, for congratulating the Government on the lead which they gave as regards aid to Ethiopia and as regards the Contadora process. I am equally grateful to both noble Lords for the welcome which they gave to a Summit which clearly achieved considerable agreement.
Lord O'Brien of Lothbury: My Lords, since, as I understand it, the German Government wish any decision on enlargement to be linked to the decision to raise the VAT ceiling on the Community's own resources, and since that latter decision will incorporate the Fontainebleau arrangement for the abatement of this country's contribution to the Community budget, may I ask the noble Viscount the Leader of the House when he expects the decision to raise the VAT ceiling to be adopted by the Council of Ministers?
Viscount Whitelaw: My Lords, I am grateful to the noble Lord for his question. The budget abatement system agreed at Fontainebleau is due to come into effect in 1986. The Community is also committed by the Fontainebleau conclusions to the introduction of new own resources no later than 1st January 1986. We therefore expect the new own resources decision to be adopted in time to allow these commitments to be met. In the meantime, the council recently affirmed its commitment to make available to the United Kingdom 1,000 million ecus, or £590 million, in respect of 1984 on the revenue side of the budget in 1985.
Lord Boothby: My Lords, is the noble Viscount aware that there is considerable anxiety among the fishing fleets, not only of this country but of other European countries, over the possible effect of a massive Spanish invasion of our territorial waters, which have been agreed by the Council of Ministers—Spain having the largest fishing fleet in the world? Can the noble Viscount give an assurance that that will not be allowed to happen in any

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circumstances, and that we have the necessary naval power to prevent it ever happening?
Viscount Whitelaw: My Lords, I do not think that it would be in the spirit of the agreement recently reached in Dublin on many other matters if I were to respond to the noble Lord's last point. However, on the other matter, I think that the United Kingdom Government's approach in negotiations to safeguard our fishing position has been one from which we can at least take some satisfaction, although one can never be completely satisfied. As I said, these negotiations are bound to be continuing, and I can assure the noble Lord that our position will be very carefully safeguarded in these future discussions.
Lord Cledwyn of Penrhos: My Lords, although we must be relieved that this fishing armada will not be sunk, will the noble Viscount take account of the fact that a fleet of 17,000 trawlers is really enormous? With respect to the noble Viscount, it is not a matter of detail. If, as the Statement says, there has been a satisfactory settlement of the fishing issue, it is right to ask the noble Viscount whether the number of trawlers in the Spanish fleet has been agreed.
Viscount Whitelaw: My Lords, I believe that my right honourable friend the Minister of Agriculture will announce the details of this particular agreement in the near future. I cannot give the details now, but I shall make sure that my right honourable friend gives them.
Baroness Llewelyn-Davies of Hastoe: My Lords, can the noble Viscount clarify the position a little about the information given in the Statement on the reduction of lead in petrol and vehicle emissions, and the urgent meeting tomorrow of the environment Ministers? Of course, the noble Viscount will know that the European Parliament has not yet delivered an opinion on the Commission's Directive. We wondered whether he would be able to indicate to us the kind of line the Government will adopt on the Commission's Directive, and, if so, whether he thinks that agreement is likely tomorrow.
Viscount Whitelaw: My Lords, I am grateful to the noble Baroness. I cannot give any definite answer as to how the discussions will go tomorrow. I think, so far as we are concerned, we feel that particularly in air pollution we have a good record. We are opposed to mandatory reductions at arbitrary levels, given continued uncertainty about both causes and effects of different pollutions. At the same time we aim for still further reductions in sulphur dioxide and nitrogen oxide emissions by 30 per cent. from 1980 levels by the end of the 1990s. I think it can be said that in all these fields we are taking a considerable part and giving a considerable lead.
Lord Ezra: My Lords, I should like to put to the noble Viscount a question arising out of the discussions on economic strategy briefly referred to by my noble friend Lord Gladwyn. It was satisfactory to note that some time was devoted to this matter and that in particular it was considered that an attempt should be made to increase productive employment
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within the Community by extending the effectiveness of the operation of the Community market, by developing and spreading new technologies, and by spreading acceptable standards. However, these matters have been much to the forefront in the Community's endeavours for many years. Would the noble Viscount indicate to us whether any thought was given as to how these desirable objectives could now be accelerated in their achievement?
Viscount Whitelaw: My Lords, I do not think I can help the noble Lord by elaborating because of course the noble Lord will appreciate that I was not there at the discussions. I can only report what was said in the Statement—that these matters were discussed and that considerable thought was given to how some of the, I agree, generalised objectives could be met. I cannot give the noble Lord any further detail as to how that is to be done.
Lord Stoddart of Swindon: My Lords, I wonder whether the noble Viscount the Leader of the House can help me on one point, which relates to the new measures for financial control? Can he say whether these measures will ensure that the Community will continue to be in credit and will not in future need to call on member states to make special loans to the Community, as is the case this year and as in fact will be proposed in a measure which will be laid before this House next Thursday?
Viscount Whitelaw: My Lords, it would be unwise for me to give any such undertaking. I can say only that the agreement that was achieved on limiting the Community's commitments and on limiting agricultural expenditure must be a step in the right direction. We hope that it will lead to no further demands such as have been made this year, but I could not possibly yet say whether the measures taken will necessarily have that desirable effect.

Student Awards: Parental Contributions
4.23 p.m.
The Earl of Swinton: My Lords, with the leave of the House, I shall now repeat a Statement on student awards which is being made in another place by my right honourable friend the Secretary of State for Education and Science. The Statement is as follows:
"On 12th November I announced changes to the student awards system involving the abolition of the minimum award, increased contributions from parents in the middle and upper reaches of the income scale and the extension of contributions, for those most able to pay, up to the maximum of the designated tuition fee of £520.
"The resources released by these measures were intended in part to meet increases in the already substantial bill for student awards—about £700 million in 1984–85—and in part to provide additional money for science.
"Our system of student support—amongst the most generous in the world—has long been based on the sharing of responsibility by the Government, the student's family and where appropriate the student

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himself. When resources are limited it is, I believe, right for those parents who can afford to do so to carry a larger share of the costs of their children's higher education, in order to release money for urgent needs elsewhere, particularly for science.
"I recognise the concern expressed in this House and elsewhere that the increase in parental contribution that was proposed was too sharp and the notice given too short to enable parents to make such a substantial adjustment in their financial affairs. I believe also that parents will want to know where they stand in relation to the next academic year.
"I should therefore tell the House that it remains the Government's intention, subject to the decision of Parliament, to abolish the minimum award and to increase the level of parental contributions to maintenance for those in the middle and upper reaches of the income scale. I have however decided to withdraw the proposal that parents should make a contribution to tuition fees. My right honourable friend the Secretary of State for Scotland has decided similarly. The cost of this concession in England and Wales in 1985–86 is £21 million. In order to find this extra sum, I have been through my recently announced expenditure programme again and I have been able to find £11 million savings towards it. These savings will require:
First, a reduction of £6 million in the addition to the equipment grant for universities in 1985–86. This means that universities will get £4 million for this purpose in that year instead of the £10 million that I announced earlier. I intend however that the selective scheme, with the agreement of the UGC, should now be extended to cover the three years to 1987–88: £7 million will be available in each of the two later years.
Second, a reduction of £3 million—from £14 million to £11 million—in the amount which I had told the Chairman of the Advisory Board for the Research Councils was a planned addition for science in 1985–86.
A number of smaller economies amounting to £2 million. This will mean among other examples a smaller increase than already announced for the PICKUP programme; and less for educational research, adult education and the microelectronics programme.
"The remaining £10 million needed in 1985–86 will, exceptionally, be found by an addition of that amount to the public expenditure planning total.
"The Government propose to consider—and consult widely about—whether a radical change in the student support system, which might include loans, should be made so as better to meet the needs of students and their families whilst safeguarding the interests of the taxpayer.
"I believe that these proposals meet the two main concerns of the House: first, that the increase in parental contribution was too sharp and too sudden; and secondly, that the system of student support in the longer term should be reviewed."
My Lords, that concludes the Statement.
Baroness David: My Lords, I thank the Minister for repeating that Statement, which must have been as humiliating for the Secretary of State to have to make as it was foolish and politically unwise to announce such major changes with no prior consultation. We are of course pleased that the principle of tuition fees being paid by the Government is to remain as it has been since 1977, when my noble friend Lord Mulley was Secretary of State. We can only hope that the parents will pay up and that the students will not be penalised. No doubt the better-off parents will be aware of the covenants and will perhaps be able to get some money back from the tax man in that way.
As I asked for a review of the whole grants and awards system last week at Question Time, I am naturally pleased that there is to be a review, but I should like to ask just what this entails and what will be the terms of reference. Will the review merely mean consulting a few bodies such as the Committee of Vice-Chancellors and Principals and the Committee of Directors of Polytechnics, or will it be the wide-ranging review that is so very necessary? Will the review take in discretionary awards, and will the awards cover a wider number of courses than at present? Will there be a Green Paper or a consultative document?
It is a great pity that the Secretary of State did not fight the Treasury for the amount of money, £21 million, that he is going to lose by not having contributions from parents for fees. It is a disaster for science and scientific research that the money promised only three weeks ago (the £9 million, I think it is) should now be withdrawn. The debate in your Lordships' House on 21st November, with many eminent scientists taking part, made clear how starved of funds is scientific research in this country. Sir Keith himself said in his press notice released only last Thursday:
"Too many of our university laboratories are full of equipment that belongs in museums of industrial archaeology. Too many of the most promising research projects, the ideas of the brightest and best of our young scientists, have to be turned down because of shortage of funds".
I ask whether it is still too late to go back to the Treasury and try to get money from that source or, indeed, from the Contingency Fund so that scientific research does not have to suffer.
4.30 p.m.
Lord Kilmarnock: My Lords, we on these Benches would also like to thank the noble Earl for repeating the Statement made by his right honourable friend in another place. We are glad that the Secretary of State has recognised that his proposals were made completely without adequate notice. We are also glad that he has withdrawn the proposal to charge parents for tuition; this would have represented a serious attack on the Robbins principle and looked like the thin end of the wedge to privatisation of higher education, which would not be in the interests of the country.
However, we cannot accept his method of finding £11 million of the £21 million that he needs. We welcomed his offer only a short time ago of a further £24 million for scientific research, but it was always wrong to finance this by slashing student grants. Why

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should a relatively small body of students and/or their parents pay for basic research which is vital to the economy and, in the case of medical research, to the health of the country as a whole?
Therefore, we deplore his decision to find the money he needs by reducing the equipment grant to the universities from £10 million to £4 million in 1985–86. This seems to us to be folly. We also deplore the proposal to reduce by £3 million the amount the Secretary of State had pledged to the chairman of the Advisory Board for the Research Councils. It is quite wrong that the research councils should have to help to bail him out of this egregious error. Would the noble Earl not also bear in mind that, when the Telecom shares were put on sale to the public, if an extra 5p had been added to the asking price, there would be plenty of money to pay for these things?
Rather than again depleting the science budget, I think that the Secretary of State should take the whole of his £21 million from the Contingency Reserve. It is dangerous folly not to give scientific research the equipment and funds it must have. We also deplore his decision to nibble away at adult education, which is already practically starving to death. This sort of robbing Peter to pay Paul when both are in dire straits simply will not do.
Finally, we give a guarded welcome to the Government's proposal to consult on a radical change in the student support system. Can the noble Earl assure us that this will be a genuine inquiry with a proper consultation period? Will he bear in mind the drawbacks of a loan system, which I have already represented to him in terms of administrative cost and the low recovery rate in the USA? In view of the defects of the parental contribution system, and, indeed, of the discretionary awards system by local authorities, will he undertake that the Government's inquiry will look at the whole system of grants and awards to those at 16 plus, whether in secondary schools, further or higher education? Is this not the right way to go about it?
The Earl of Swinton: My Lords, I am grateful to both the noble Baroness, Lady David, and the noble Lord, Lord Kilmarnock, for the somewhat muted welcome that they have given at least to part of the Statement. I am delighted that we are all in agreement on tuition fees, anyway. I was also very grateful to the noble Baroness, Lady David, for drawing attention, once again, to the possibility of parents using covenants as a form of easing their burden over student grants. I think that we would all agree that the more publicity that can be given to this, the better.
Both the noble Baroness and the noble Lord asked about the terms of the review. These have not yet been decided upon. Obviously, all the points will be borne in mind. In fact, the forthcoming Green Paper will contain a section on student support; so there will be plenty of scope for consultation.
They both also launched an attack on the reduction to the science budget—which, I am sure, we all regret. But I think I should point out that, although the grant to the UGC has been reduced, it is going to be extended for another year; so that in fact from the previous total of £20 million, there will now be £18 million going there. Also, as has been pointed out, the
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grant to the research councils has been reduced from £14 million to £11 million. But, again, I think I should point out that these were in fact additional sums in the first place and therefore cannot be cuts as such.
Lord Mulley: My Lords, as the Secretary of State who was responsible—and it was not the late Lord Robbins—for separating tuition fees from maintenance, I may say that I did so for two reasons. First, I did not want to have a distinction between home and overseas fees, and I am very sorry that my successors of both parties went away from that principle; and, secondly, so many wealthy parents were not giving their children the money to pay the fees at the beginning of the financial year of the university. This caused immense anxiety and doubts as to whether they would be in a position to take up their places. Therefore, I am extremely glad that the principle of not asking parents to contribute to tuition fees has been maintained.
But, in my view, the ragbag of economies which has been put together to pay for it is Treasury activity at its worst. Even under the enlightened guardianship of the Treasury of my noble friend Lord Barnett, I was obliged, as Education Secretary, to point out that I was not prepared to accept the advice at low level which the Treasury gave. For example, they wanted me to have one size of desk from the age of 5 to the age of 18, or something of that sort. I was obliged to tell them—and I hope the noble Earl will suggest to his right honourable friend that he does the same—that if they had been right in living memory about anything I should have taken a good deal more interest in the advice in great detail that they were going to offer.
It is a scandal that scientific research and the research councils are having to be cut in the way that is now proposed. All Governments are responsible for this. Unless in the computer age in our government accounting we draw a distinction between capital and revenue, between investment and current expenditure, this country will get into worse and worse difficulties. What is proposed in terms of equipment for the universities and the research councils surely must be an investment of a different character entirely from normal government expenditure.
The Earl of Swinton: My Lords, I would agree with the noble Lord, Lord Mulley, in endorsing the only thing that I think we are all in agreement about. I think I really must defend the Treasury a bit.
Noble Lords: Oh!
The Earl of Swinton: Well, my Lords, they have to have a champion somewhere. They have agreed to meet £10 million—which is nearly half the extra cost. I must also, again, point out to the noble Lord, Lord Mulley, that to talk about a cut in the research councils' budget, when they are getting an extra £11 million, is not right. I cannot agree that that is a cut.
Lord Shackleton: My Lords, how can the noble Earl, who heard the whole of last week's debate on the research councils, say that this is not a cut? When is a cut not a cut? And what is, "defending the Treasury a bit"?
The Earl of Swinton: My Lords, if you get £11 million extra—and I should not mind if somebody gave me £11 million—I would not say that that was a cut.
Lord Shackleton: My Lords, it was £14 million.
Lord Elwyn-Jones: My Lords, can the noble Earl say where the reduction of £6 million in the equipment grant for universities is to fall? Will this hit the scientific research departments? What is going to be affected? Instead of an extra £10 million, there is going to be £4 million. It is a very substantial reduction in what was contemplated and confidently expected; and on behalf of many noble Lords here concerned with the state of the finances of the universities, I would say that this is a matter of very grave concern.
The Earl of Swinton: My Lords, if I remember correctly, this is going to be used for laboratory equipment. In fact, it is going to be £4 million in the first year and £7 million in the subsequent two years; so that it is going to be £18 million in total.
Lord Rochester: My Lords, is it not particularly deplorable, in addition to the point already made by several noble Lords about the research councils, that at a time when a sub-committee of your Lordships' Select Committee on Research and Development is considering what more can be done to advance the cause of education and training for new technologies, we now hear that there are to be reductions in the grant given to educational research, to adult education and to the micro-electronics programme?
The Earl of Swinton: Yes, there will be reductions, my Lords.
Baroness Lockwood: My Lords, does not the Minister think he is being rather complacent when he says that this is not a cut to the research councils—particularly in view of the statement by the chairman of the Advisory Board for the Research Councils, published by the DES only this morning, and when they have already indicated ways in which the money could have been spent?
May I further ask whether he has any idea how the cuts are going to affect the PICKUP programme, the MEP programme and adult education, to which he has referred? Only a few months ago in this House we had a debate on further education and, as a result of that debate, it was pretty clear that the service was already under-funded. We also made reference to continuing education. It seems as if the PICKUP programme is the Government's main plank in the continuing education programme, but now we are told there is to be a cut here. Can the Minister explain this dichotomy in Government policy?
The Earl of Swinton: My Lords, I think the noble Baroness has made a very valid point. As I tried to explain, the research councils were told they were going to get an extra £14 million and they have now been told they are going to get an extra £11 million. That is £3 million less than they thought they were going to get, but it is still extra money. However, the noble Baroness is absolutely right about the £2 million
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reduction to the PICKUP programme and educational research, adult education and the micro-electronics programme. However, I am afraid I have no details as to how that is going to be spread. I will have to write to the noble Baroness about that.
Lord Taylor of Blackburn: My Lords, may I make a further plea, repeating what has been said earlier, that there should be the widest possible consultation before anything is done to student grants again, and that a Green Paper or a White Paper should be issued so that many people can bring forward their views as to how things should go in the future? The Government should not spring it on people, as has been done during the last week.
The Earl of Swinton: My Lords, I do not think I can give a commitment as such, but there is going to be a Green Paper in the New Year. In it there will be a chapter on student grants and I think that this will probably provide for the consultations which the noble Lord requires.
Baroness White: My Lords, can the noble Earl pick up the point that was made very forcefully during the debate on the research councils? Here I would echo what the noble Lord, Lord Shackleton, has just said. The noble Earl listened to that debate, I trust, and heard the "devastating analysis", as it is called in today's Guardian, of the way in which the Government were treating the research effort of this country, even with the sums which are now being somewhat reduced. Does he not recall that we drew his attention to the fact that the chairman of the Advisory Board for the Research Councils, Sir David Phillips, had indicated that unless the Government kept their basic endowment of research and development in this country at a steady state, within the decade we should be spending in real terms 25 per cent. less? This arises from the under-funding for our research efforts in relation to both equipment and salaries, which has been going on annually and cumulatively, and to which I do not think the noble Earl has made any reference this afternoon.
The Earl of Swinton: My Lords, I remember extremely well that very interesting debate, which I think was introduced by the noble Lord, Lord Sherfield. Yes, I feel extremely sorry about this, and I know that my right honourable friend does, too. As I say, they are getting an extra £11 million. Of course, they want more money—but, again, who does not?
Lord Beswick: My Lords, does not the noble Earl think that in this there is something that we ought to be absolutely ashamed about? Is it not a matter for national shame that this year, when we have made the biggest sale ever of public assets—something like £3,000 million pounds worth of our capital has been sold, a once-and-for-all sale—and have had this enormous influx into the Treasury, they have to cut £3 million off research and development?
The Earl of Swinton: My Lords, I seem to be repeating this over and over again, but it is not a cut. It is £3 million less extra money than they thought they were going to receive. They will still receive £11 million extra money.
Lord Sherfield: My Lords, is it not a cut on what was promised two weeks ago?
A noble Lord: It is still not a cut.
The Earl of Swinton: Yes, my Lords, I suppose it is, technically. But if somebody offered me £14 million and then said, "I'm very sorry—it is only going to be £11 million", I should still be jolly glad to receive it.
Lord Diamond: My Lords, is not the switch from a single completely unacceptable decision to a series of completely unacceptable decisions evidence of the unfitness of this Government to govern?
The Earl of Swinton: No, my Lords.

The Civil Service
4.45 p.m.
Debate resumed.
Lord Barnett: My Lords, the debate this afternoon is about efficiency in Government and the Civil Service. I must say we have just had a devastating example of how not to plan public expenditure. I should like to begin my remarks, if I may, by joining in the congratulations offered by the noble Earl to the noble Lord, Lord Boyd-Carpenter, in choosing this subject for debate today. I am also very happy indeed to follow him, as I have followed him both as Chief Secretary to the Treasury and as Chairman of the Public Accounts Committee. If I may say so, I was delighted to do so in both those roles. Like him, in both those roles my experience was that I found the civil servants who were working for me at that time were loyal, efficient and dedicated. That applied to both private secretaries and to other officials. Certainly they showed great impartiality of a political kind.
The noble Lord pointed out, quite rightly, that one of the problems for those of us who have been in Government is to recognise that Whitehall is not the Civil Service. As I think he said, Whitehall civil servants represent something around 5 per cent. of the total non-industrial Civil Service; so it is important for us to recognise, when we talk about the Civil Service, just what kind of civil servants we are talking about.
The Motion speaks of,
"an efficient and dedicated Civil Service".
I want, first of all, to say a few words about the first part of the Motion, about the need for efficiency in the Civil Service. Few would deny the need for an efficient Civil Service, as we understand the meaning of that word. But in the context of the work of a civil servant, efficiency is not quite the same as it is in many other fields. I have pondered what might be the best definition of the word "efficiency" and how one would best define it. The best definition I could trace was one produced by the sub-committee of the Treasury and Civil Service Committee in Session 1981–82, when they said:
"By the effectiveness of a programme the Sub-Committee understand such matters as the definition of objectives, the measurement of progress towards achieving those objectives and the consideration of alternative means of achieving objectives. By efficiency the Sub-Committee understands, given the objectives and
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the means chosen to pursue the objectives, the minimising of inputs to the programme in relation to the output from it".
It sounds a bit involved, but I think your Lordships will agree that it is a pretty reasonable definition of what one means by "efficiency" in the Civil Service.
I am bound to say to the noble Earl—although he was a little better today—that from time to time the Government seem to be taking, as a definition of "efficiency" in the Civil Service, simply cutting the size. I make it quite clear that I bow to no one, for fairly obvious reasons, in regard to the phrase "small is beautiful". But it certainly does not follow that "smaller" in the Civil Service necessarily can be equated with greater efficiency—
The Earl of Gowrie: Hear, hear!
Lord Barnett: My Lords, I am glad to hear the noble Earl say "Hear, hear!" because that is not quite what he said, if I may quote him, in an article in The Times on 26th July, which I have here, for the sake of better reference. I shall quote the noble Earl. He said:
"Today's Civil Service has shrunk by 108,000 jobs since 1979, with the sharpest reduction at the top. This has lopped £750 million a year from the paybill. The reduction is also a big step towards greater efficiency".
As I was saying, and as the noble Earl was saying, in his "Hear, hear!" to what I was saying, that does not necessarily follow—
The Earl of Gowrie: My Lords, may I interrupt the noble Lord? What I was saying "Hear, hear!" to was the fact that in my own opening remarks—and I hope the noble Lord will do justice to me here—I said that getting numbers and costs down was very important, but it was not the be-all and end-all of efficiency. I then went on to describe what efficiency was.
Lord Barnett: My Lords, I said that the noble Earl was better today, and I am delighted to have the withdrawal of his article in The Times of 26th July. Your Lordships will have noted what the noble Earl said then; but I am delighted he now accepts that just cutting the size of the Civil Service is not an answer and does not solve the problem of trying to achieve greater efficiency. I should like to make it quite clear that I do recognise that from time to time there will be a need to look at the size of any organisation. I am not opposed to that. That must apply to the Civil Service as it must apply to large corporations, whether in the private or public sectors. There will always be room for savings in large organisations, and I do not myself object to the need—indeed, I accept it—to look at them. But it is wrong to equate all cuts with efficiency or, indeed, with value for money, as the noble Earl sought to do today.
I should like to give three examples which would show your Lordships that cuts certainly do not equate with efficiency. First, one can remove a function from a department. For example, in the dockyards one could cut back the repairs done by Government staff, by civil servants, and give them to an outside body to do. Somebody is going to do those repairs. It could mean greater efficiency; it could mean a saving in public expenditure: but it certainly does not necessarily follow that it will. It could well be the case that, by doing it in another way, the cost might be much greater in terms of public expenditure.

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Equally, privatisation has been called in aid, and the noble Earl referred to it as common sense. It may also be the case that from time to time, by privatising certain functions, some public money might be saved; but I am bound to tell your Lordships that the Public Accounts Committee has indeed looked precisely at this area and found that it was not necessarily the case. There was no evidence whatsoever that privatising a particular departmental function led to a real cost saving or to greater efficiency.
Then there is the other area—manpower ceilings. Of course from time to time, properly used, it would be sensible to have ceilings on the levels of manpower in any organisation, but when one sets ceilings it is very important to decide what those ceilings will be and how one uses one's staff within them. Again, the Public Accounts Committee found that cutting back on Inland Revenue staff, particularly the investigation staff, was not exactly productive. Indeed, the committee found (it was when I had the privilege of being the chairman of the committee) that the Inland Revenue could easily have spent more money on additional staff and found it much more productive because it would have raised a much greater amount of money in return for that cost.
Incidentally, if I may take up the point that the noble Earl made about the excessive number of files in the Inland Revenue, if he cares to offer the Inland Revenue my file and the Inland Revenue wants to lose it, I would be happy to opt out. I imagine that many of my noble friends and many noble Lords would be only too delighted to see a reduction in the number of Inland Revenue files by the removal of theirs. But I hasten to say that that would not necessarily be a productive way of raising additional revenue or making the Inland Revenue more efficient.
I can give another example to your Lordships. In the DHSS there have been savings on the method of handling, administratively, sickness benefits. It could be argued—and I would not necessarily deny it—that there is a great deal of good sense in that. But what has happened is that a great deal of the burden of that work has now been put on the employers, often very small employers. That is not necessarily the most efficient way to have that work done in the national sense. Equally, savings have been made and are being made by the Government in this area by making a claimant to benefits wait rather longer and, indeed, often not get his claim at all, bringing about a reduction in the DHSS staff. Surely that cannot be the most efficient way to run a Civil Service in the national interest. All I am saying to the noble Earl and to your Lordships—I hope noble Lords will accept it—is that to think of efficiency in the public service purely in terms of cuts is doing a great disservice to the fine work that is done.
In the Civil Service we have a great diversity of activities. There are very large departments such as the Ministry of Defence, which has something like 300,000 civil servants and 300,000 civilian staff. The Department of Industry has only about 9,000. I should not like to suggest to your Lordships that necessarily the Department of Industry is more efficient than the Ministry of Defence. It may be, but it will not be because of the size; it will be for entirely different
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reasons. I do ask noble Lords and the Government not to delude themselves into thinking that simply cutting the size of the Civil Service is an answer to the problem of efficiency. I was delighted, and I am delighted to acknowledge, that the noble Earl now accepts that.
I return to the best measure or definition of what is efficiency in the Civil Service; that is, as I quoted, "minimising inputs of programmes in relation to the outputs". Of course, it is easier said than done. The noble Earl referred to some ways in which the Government can help. In the Public Accounts Committee, under the noble Lord's chairmanship, under my own and under the present chairmanship of my right honourable friend the Member for Ashton-under-Lyne, there is a much greater emphasis on value for money these days than applied in the past, and I am very pleased indeed to acknowledge that. I think it owes a great deal to the setting up of the National Audit Office and the strengthening of that team. But there are other ways, and I should like to put forward one or two suggestions.
One suggestion—I think the noble Earl also referred to it—is the need for greater ministerial interest. There is the word "MINIS". We are always inventing such words, composed of letters, in our public life. MINIS requires greater ministerial interest in the need for greater efficiency in the Civil Service. The problem, of course, is that Ministers, being the political animals that they are, have greater interest in political matters than in greater efficiency in the Civil Service. They may go into the department initially with the idea of transforming it into a much more efficiency body, but that soon goes. I doubt, for example, whether the present Secretary of State for Education is thinking very much today about efficiency in his department. But there is a need for Ministers to take a greater interest, because that is the only way they are going to be able to persuade senior officials in their departments to take a greater interest themselves.
Then there is the question of staff inspection and internal audit. The Public Accounts Committee has issued reports on this. This does not require cuts in the size of the Civil Service; it requires increases in the staff of both inspection and internal audit. I am happy to say that some of that is coming about, certainly in the National Audit Office. There is also the question of cash limits, which I had the pleasure to introduce. I say "pleasure", although some of my friends in government did not altogether approve of everything I was doing because they apparently equated, wrongly, cash limits with somehow meaning a cut in public expenditure. It does not mean anything of the kind. Indeed, without cash limits one simply cannot achieve efficiency. I certainly do not object to cash limits, but it is necessary to use them with a great deal of good sense; because if one uses cash limits in the public sector on incomes with no agreement on what the level of incomes should be, one gets inefficient cuts in the size of the Civil Service. That is the worst type of use of cash limits.
The noble Earl referred to the noble Lord, Lord Rayner, and the work he did. I worked quite closely with the noble Lord when he was doing that job and when I was chairman of the Public Accounts Committee. I pay tribute to the work he was doing at that time. It is a task which will have to continue

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permanently. I could not help agreeing with something said by Sir John Hoskyns, who was in the Government "Think Tank" and is now head of the Institute of Directors. He thought that the Rayner type work only tinkers with the problem. To a large extent I think he was right. It does not really get to grips with the major problem.
I was much taken, and I agree with what the noble Lord, Lord Boyd-Carpenter, said, with the concept of a no-strike agreement—not necessarily with all civil servants—and I would have thought that is a useful way to proceed. But again, as he rightly said, one would have to do something about salaries if one was hoping to get any reasonable agreement.
I end this part of my remarks on the question of an ideal level of efficiency in the Civil Service. It is a bit like painting the Firth of Forth bridge. One never stops—and one must never stop—seeking to improve efficiency in the Civil Service. That is what happened in the Public Accounts Committee, as the noble Lord will recall. After a few years in the job one finds oneself doing the same task one had been doing a few years earlier because it is so huge an area there is bound to be so much inefficiency. As the noble Lord said, from time to time there can be not very good management and the PAC has to be very much on its toes.
I turn briefly to the other part of the Motion moved by the noble Lord—that is, the need for a "dedicated Civil Service". He was right to join the two words "efficiency and dedication". Whilst one can have dedication without efficiency I do not believe one can get real efficiency within the Civil Service if civil servants are not dedicated in their duty to that service. The two do indeed go together. But I am bound to say to your Lordships, and to the Government, that dedication has to work both ways. An employer must be dedicated to the wellbeing of his staff. It does not mean no cuts, but it does mean recognising the problems that those cuts create for the staff. One must recognise—and I hope the Government and your Lordships recognise—that dedication, morale and loyalty is bound to be affected by substantial cuts in the size of the Civil Service.
I recently read something said by the noble Lord, Lord Bancroft. I hope he will not mind if I quote it in case he does not intend to quote it himself today. This is an article in The Times of 5th March and is from a lecture given by the noble Lord. The article reads:
"As Lord Bancroft, former Head of the Home Civil Service put it in a lecture in December, 'the ritual words of praise forced out through clenched teeth in public deceive no one if they are accompanied by noisy and obvious cuffs around the ear in semi-private' ".
He was referring of course to the Prime Minister and not the noble Earl. I am sure he meant what he said, and I entirely agree with him. There is another quote in the same article from Mr. Julian Critchley, who is described as
"her most irreverent backbencher".
He is quoted as saying:
"She cannot see an institution without hitting it with her handbag".
I make it quite clear that I have some sympathy with hitting institutions with handbags from time to time; but one cannot keep doing that without having an
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effect on the morale and dedication of those one is hitting. It is right that the Prime Minister, and those who from time to time give her advice that she may even recognise, should understand what they are doing to the very loyal and dedicated staff in the Civil Service by the kind of statements that are made.
The GCHQ was referred to by the noble Lord, Lord Boyd-Carpenter. It certainly applies to the thousands of loyal and dedicated civil servants in that establishment. The problem is not, and never has been, one of security. The staff there are as concerned about security as the Prime Minister herself or anyone in this House. It seems to me that security in that establishment has been harmed more by the exposure created by the Government's own inept handling than by the staff at GCHQ. The real problem there, as it is elsewhere, is not getting a loyal staff but insensitive and incompetent handling by employers.
What do the Government want from their civil servants? Do they want loyalty to the Minister right or wrong, even if that Minister is lying to Parliament? Do they want loyalty to Parliament and to the public interest? Is that what we in this House want? We cannot have a situation, speaking for myself, where a civil servant should decide for his or herself what should be the public interest. That really is quite impossible. Certainly I would not accept such a situation. But one cannot expect—and I must repeat this—dedication or loyalty from sullen, cowed staff who are constantly under attack. They then become time-servers and will never give efficient service, either to their Minister or to the state.
I should like to quote something said by John Ward of the First Division Association and reported in the Sunday Times on 23rd September. The article states:
" 'conviction politicians' of the Thatcher administration dislike being offered the widest range of policy options. 'They have no time for objective analysis,' he says. 'So some civil servants take the view: 'Ministers don't trust me—so sod that' ".
I ask your Lordships to excuse me. That is not my word. I am quoting Mr. John Ward. The article continues:
"William Plowden, a former government Think Tank adviser and now head of the Royal Institute of Public Administration—"
he is talking about the Prime Minister—
"thinks this has harmed the quality of Whitehall's work. 'There is a general atmosphere in which people feel dissent may rebound against you. Even if you are seen to be less than enthusiastic it could harm you. So advice is trimmed.' The more extreme reaction of course is for the frustrated adviser to leak unfavourable information to the outside world."
Let me make it quite clear that I have no sympathy for leaks or extreme views. Nor do I like what might be called the intellectual work to rule. That does not help either the Government or the society in which we live. But it is not enough to condemn it. One needs to understand how the climate has created it. For my part I agree with some of the Government's actions. I agree that a shake-up was necessary including, as I have said, some cuts. I agree with the move away from what is called "Buggin's turn"; but if we do not want extremism in the Civil Service we must get away from extremism in Government; and we are not getting that. A different Government approach is needed. We need what might have been called by the noble Earl, Lord Stockton, a middle way, a consensus, a willingness to seek understanding with the staff.

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Those, apparently, are all dirty words to the Prime Minister; but they are not words to be brushed aside, especially in public life, because the alternative is indeed extremism. I know that some staff can make life very difficult for any employer and I certainly do not underestimate the problem. However, all Governments make it more difficult for themselves by excessive secrecy over documents that are not secret at all. There should be greater openness, as we recently heard from the noble and learned Lord, Lord Scarman, in a quite remarkable speech.
Above all, I should like to sum up on this note. As has been said already, on the whole we have a loyal Civil Service. Compared with many other countries in the world we are fortunate to have an almost total lack of corruption. But we must recognise the great strain that can arise when we are seeking to get an improvement in efficiency by cuts—some of which are inevitable—in size. Ministers in this Government, particularly the Prime Minister, by their own behaviour have put at greater risk the dedication and efficiency of thousands of decent, hardworking men and women. The remedy must now be in the Government's own hands. As I have said, dedication and loyalty work both ways. Ministers must show that they genuinely understand the real anxieties of their staff if the nation is to get the efficient and dedicated Civil Service that the vast majority of its members are desperately keen to provide.
5.9 p.m.
Lord Rochester: My Lords, like the noble Lord, Lord Barnett, I am sure that the noble Lord, Lord Boyd-Carpenter, was right to bring together in his Motion the concepts of efficiency and dedication in the Civil Service; for, in my view, each has wide implications for the other. At the heart of the celebrated lectures given two or three years ago by Sir John Hoskyns and Sir Douglas Wass—and one of those lectures has already been mentioned by the noble Lord, Lord Barnett—was the need for change. For several years I bore responsibility in a large industrial organisation for training people in the management of change. The best definition of management I ever heard was that of the late Colonel Lindall Urwick: "Getting things done through people". Much more than at the time he coined the phrase 50 years ago, today that means persuading people willingly to accept change. It also necessitates leadership through action.
While I was engaged in industrial training, there was need to analyse the qualities or functions of effective leadership, and I take leave to mention two of them now to your Lordships. The first is the formulation of objectives that are clearly defined, understood, and, as far as possible, accepted by those required to implement them. In his lecture Sir John Hoskyns said that, as a businessman, he regarded the definition and agreement of objectives as the most difficult and important task of management and that on arrival in Whitehall he had at once been struck by the fact that people were not used to governments setting objectives which were sufficiently demanding and unambiguous to act as criteria for success or failure. He concluded that the Civil Service had grown accustomed to a situation in which either there were
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no objectives or they were so vague as to be meaningless. For my part, as an advocate of a reformed electoral system that would afford more stability and continuity of economic and industrial policy, I would add that, in so far as there were such objectives, they suffered from the fundamental defect that they were constantly changing. However that may be, in Sir John Hoskyns' view the effect of the system was that in the Civil Service performance was always judged by conduct rather than by results.
It seems to me that the Government are to be congratulated in the extent to which they have sought to remedy deficiencies in this field. I welcome particularly the report published two weeks ago on progress under the programme of action to improve the management of people, which was announced by the noble Earl, Lord Gowrie, last July. That applies especially to the emphasis placed in the programme on delegation to departmental line managers of more responsibility, and he has reiterated that theme this afternoon. I welcome also the Government's earlier declaration of their aim to match the number of Civil Service staff more closely to the necessary functions of departments.
That does not mean that I accept in every case the way in which the policy is being carried out. There are certain functions which, in my view, require for their efficient execution the employment of more staff. I think, for example, of the need to counsel the steadily increasing numbers of long-term unemployed people, particular those aged under 25. I should add that my noble friend Lord Harris of Greenwich will have more to say later about inadequate staffing in another particular area.
A second quality of leadership which is related to the first, and is in my view highly relevant to the Motion before us, is an understanding of what enables people to give of their best at work. In this respect, I believe that responsibility, achievement and recognition of achievement are motivating factors that have universal application. It appears, however, from the lecture given by Sir Douglas Wass that, in the Civil Service, there is another motivator which takes precedence over the rest. In his speech, Sir Douglas referred to someone who happened once to be a colleague of mine. Mr. Keith Robertson spent 10 years leading job satisfaction research projects in the service. His comment was:
"Throughout all job satisfaction projects in the Civil Service, it is apparent that the single most important motivating factor for staff is the opportunity to be of service to the public".
He continued:
"It seems almost miraculous that the desire genuinely to serve the public should be born, should survive and should flourish amidst all the politics, tensions and impersonal imperatives of modern bureaucracy".
I have sufficient confidence in the judgment of that man to believe that his comment was valid.
Sir Douglas Wass went on to say that the sense of public service was closely allied with morale. What then is the state of morale in the Civil Service today? I fear that it is rather low. One way in which this can be measured is in terms of recruitment, not least in the key category of administration trainees already mentioned by the noble Lord, Lord Boyd-Carpenter. In 1983 47 people were appointed to fill 60 vacancies.

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Those figures are at least an improvement on the very bad ones for the previous year. My understanding is that this year there were 66 vacancies for such people, of which 58 have been filled. Perhaps the noble Earl, Lord Gowrie, will confirm those numbers when he replies to the debate. In 1984 it seems that there has been some further small improvement compared with the two preceding years, although it is still a disappointing outcome.
Industrial relations is another obvious pointer to the state of morale in the Civil Service. I shall not dwell at any length on the GCHQ affair. My fears were made plain to your Lordships last February in saying that, if the Government proved unwilling to reach an accommodation with union representatives that at the same time safeguarded both our defence capability and the freedom to belong to a trade union, the morale of civil servants would be damaged, the standing of responsible union officials diminished, and the security of the state thus placed more, not less, at risk. That, my Lords, is still my view.
A further reason for low morale in the service is that, since the Government withdrew from the agreed procedures for determining pay four years ago, rates of pay for civil servants have increased by rather less than 25 per cent. In contrast, according to the Government's new earnings survey, the pay of white collar male staff generally, excluding overtime and shift premium payments, has risen during the same period by just over 50 per cent., and that of women by 48 per cent. Moreover, pay increases outside the service are now rising at an annual rate of at least 7 per cent., compared with a projected increase in Civil service pay for 1985 of 3 per cent.
In 1955 the Priestley Commission established the principle that the pay of civil servants should be based on:
"fair comparison with the current remuneration of outside staffs employed on broadly comparable work, taking account of differences in other conditions of service".
The present Chancellor of the Exchequer has said that he stands by the statement of his predecessor to the Megaw Committee in 1982 that:
"the Government as employer did not believe it should seek year after year to pitch Civil Service settlements below market rates in the private sector".
I do not underrate what is obviously a highly complex problem, but in my view that principle of fair comparison, subject no doubt to certain improvements in its application, should be reestablished. The matter cannot simply be left there. It is always easier to define a problem than to prescribe a solution.
Let me therefore reiterate a view that I have expressed before. There is need to establish procedures for pay determination in the Civil Service which might later be extended to those employed in other public services. More specifically—and I was glad that there seemed to be a degree of support at least for something on these lines when the noble Lord, Lord Boyd-Carpenter, spoke—provision should be made for settlement of the dispute by a third party. That referee would take the form of an independent standing commission. It should be distinguished from a mere arbitrating body by being empowered to call for
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evidence other than that of the parties themselves. It should also be required to give reasons for the awards that it makes. Because the Government would themselves be one of the parties to such disputes, members of the commission should be chosen not by the government of the day but by an electoral college set up by statute.
I do not presume to suggest precisely how that electoral college should be constituted, and I recognise the difficulty that there would be in constituting it. But I consider that its establishment is essential to ensure that the commission is independent, that there will be continuity of office for its members and that it will be acceptable to the Government, to the main Opposition parties and to organisations representing both employers and trade unions.
In my view, only thus could civil servants be expected to repose sufficient confidence in the commission to give the necessary prior undertaking that its findings will be observed. Such an undertaking would need to be matched by a corresponding commitment on the part of the Government to accept the commission's findings, withdrawal on the part of the Government being possible only after the passing of resolutions to that effect by both Houses of Parliament—a point made by the noble Lord, Lord Boyd-Carpenter.
A potential criticism is that settlements of that kind would be inflationary. It stems, I believe, from failure to differentiate between arbitration and conciliation. The intention here would not be to bring the parties closer together, nor to split the difference between them. Rather the aim would be to reach a decision which would generally be regarded as reasonable because it would be made by a body whose members would be acknowledged to be independent. I fear that the alternative is for the community to suffer continuing disruption, such as that experienced in the payment of pensions this year, as the only form of protest available to people who perceive themselves to be unfairly treated.
There are other major matters at issue in this debate. One is the so-called politicisation of the Civil Service—that is, the filling of senior posts in particular not by career officials but by people sympathetic to and appointed by the government of the day. If I may say so, I very much welcome what the noble Lord, Lord Boyd-Carpenter, with all his experience, had to say on this point. All I would add is that if Ministers were to surround themselves with yes-men, in my view, they would be less likely to become aware of the obstacles stemming from habit, fear, and so on, impeding the change that they were seeking to effect. If trouble were then to arise, it would be too late for the Minister to say, "Why wasn't I told?". The damage would have been done.
Finally, I suggest that in this debate our overriding aim should be to increase the esteem in which the Civil Service is now held in society. In part that can be done only within the Civil Service itself; but for the rest I hope—and I am encouraged by what has so far been said in this debate—that at least a degree of consensus will emerge from what we say and that that will help the Government in discharging their heavy responsibility in the running of the service.
5.26 p.m.
Lord Allen of Abbeydale: My Lords, I also am very grateful to the noble Lord, Lord Boyd-Carpenter, for initiating this debate about a service which we discuss too rarely. I know that he will not take it amiss if I point out that one of the quotations of the misuse of English with which he entertained us evidently emanated from a local government official and not a civil servant at all!
A great deal of discussion about the service tends to concentrate on what for some reason are commonly called the "mandarins", although I confess that I have never felt particularly Chinese. I think that it is one of the good things achieved by this debate that we are all reminded that these top people and their immediate staff comprise only a very small proportion of the total Civil Service, which consists of a great many people—fewer than there used to be but still a lot—who have very little in common beyond the name of their calling and the identity of their employer.
I should like to follow the noble Lord, Lord Barnett, in discussing this Motion in the two parts into which it falls. I should like first to touch on the part of the Motion referring to the need for an efficient Civil Service. No one who has been in touch with the service in recent years can deny that a great deal of effort has been put into improving the standards of efficiency needed to meet changing conditions. The service is not a bit like the one that I joined almost exactly 50 years ago, but neither is the world in which it operates.
There is still much that can be criticised. We have heard some of this already. I am looking across at the noble Lord, Lord Campbell of Alloway. I expect that we shall hear more as the debate proceeds. But there is indeed an impressive tale to be told about recent developments in such aspects as career planning, clarifying accountability, allocating local budgetary targets, developments in the field of occupational health and especially perhaps management training. I think that the noble Earl could quite well say more about the development of training in response to the animadversions of the noble Lord, Lord Boyd-Carpenter.
As chairman of the Gaming Board, I am not permitted to talk about the operations of that board in this House. But I think I can properly say that over the years we have been very impressed by the quality of the civil servants allocated to us and, in particular, by their managerial skills which emanate from very good managerial training. I know it is only a small area, but I hope it is symptomatic of what is being achieved on a much greater scale.
Some of what is going on is, unfortunately, heavily disguised by an inevitable crop of acronyms. But there is indeed a marked change from what we found some years ago on the committee of inquiry chaired by my noble friend Lord Fulton. A little of what has been done may perhaps have received some impetus from the report of our committee; I certainly hope so. However, one painful truth we learned was that the very size and complexity of the service are such that effecting improvements and securing changes in attitude can be a pretty uphill and lengthy affair.
Next I should like to turn briefly to the second part of the Motion, referring to the importance of a
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dedicated service, although the Motion itself does not go on to explain to whom that dedication should be addressed. Here we run into rather greater complexities. Let me begin here by saying that I know that there are, as there always have been, a great number of hard-working and conscientious people in the service, with a very high standard of duty and complete integrity. I can say that with an assurance based on personal knowledge. All the same, having said that, I am bound to go on to say that there are indications that in some respects there may be cause for disquiet.
I am not going to say anything about leakages by officials or prosecutions under the Official Secrets Act. Leaving those aspects aside, it is a matter of considerable sadness to me to find civil servants going on strike, or taking what I agree is so inappropriately called industrial action, or initiating proceedings in the courts against the Government or, I am very sorry to say, evidently getting themselves involved in criminal charges of bribery and corruption.
Is there a risk, I feel bound to ask myself, that the old traditions of the service can no longer be taken for granted? Bound up with this, is the morale of the service all that it should be, with all its implications for efficiency and standard of conduct? From what I have heard from a variety of sources I feel dubious whether the answer to this question about morale is unequivocally in the affirmative. This is why I put down my Motion in the No Day Named list for a debate on this topic.
In looking round for an explanation I am left in little doubt that there is indeed a widely held sense of grievance. Let us take pay. Without getting embroiled in discussing complaints that the Government unilaterally tore up an agreement and refused arbitration, and all the rest of it, the fact is that there is a widely held feeling that the actions of the Government have not been such as to inspire confidence that their main object has been to be fair. Although as a member of the Security Commission the last thing I want to discuss is the GCHQ affair, it is impossible to ignore the fact that many civil servants—and not just the extremists—feel aggrieved at the way this matter was handled.
Added to considerations of this kind is the inevitable fact that cuts in staff—cuts, incidentally, which have not been matched by any noticeable reduction in the number of Ministers—have meant a slow-down in promotion prospects, to be only partly met by schemes for early retirement.
But there is something else. Here I am echoing something which has been referred to by the noble Lord, Lord Barnett, and I think by the noble Lord who spoke just before me. What I am talking about is the impression that Ministers—not all of them, but some—are convinced that the service is a kind of necessary but rather tiresome appendage which has to be tolerated but need not be positively encouraged. I have no means from outside of knowing what is the truth, but the accumulation of evidence that many civil servants think it is true is rather too great to be ignored. There are persistent accounts that the traditional role of the senior civil servants of giving objective, if sometimes unpalatable, advice about policy is being whittled away; that decisions are being handed out by Ministers, or their political advisers, for

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implementation without the views of the professional advisers being sought or, if sought, being listened to; and that the old characteristic of mutual respect and confidence, and indeed partnership, between Ministers and officials is being eroded, with repercussions going far beyond the top officials themselves.
Let me say that I do not believe that that can possibly be a true picture overall. Many civil servants work just as hard and conscientiously as anyone ever did in my time, and derive ample job satisfaction, and I recognise that the changes in problems of government, whatever Administration is in power, are bound to affect the role of permanent staff. But at the same time, the stories I hear and read are rather too frequent and too consistent for the suspicions I have outlined to be brushed aside in toto and I find it disquieting that they are so widely believed within the service.
Perhaps at this stage I should just pause and say that, having listened to the fascinating speeches of the noble Lords, Lord Boyd-Carpenter and Lord Bamett, no one would ever suggest that any of these doubts could ever apply to a Chief Secretary. They and their civil servants have too close a bond binding them together in the face of the common enemy, the big spending departments.
How far there are real grounds for disquiet I just do not know. But it does at any rate seem to an outside observer that Ministers as a whole do not exactly leap to the defence of their servants when attacked. When it is a question of the Government publicly standing behind their own servants the trumpet is indeed heard with an uncertain sound.
Before I sit down I should just like to touch briefly on three possible implications for the future. The first has already been mentioned: the fact that there seems to be some indication that able people are more ready to leave the service than used to be the case. The outflow statistically is not all that great and the country does not lose if some of the best people move over to the private sector. However, I have encountered this issue in my experience and there is some ground for thinking that the potentialities for serious loss are not to be altogether ignored. I would not put it higher than that.
I do not quite know how best to put my second point. In a way, it is the development of a point made by the noble Lord, Lord Boyd-Carpenter, about political impartiality, but looked at the other way round. I think that what I am trying to say is that if the consequences of what I have been outlining result in the appointment to the higher posts of only those thought to be broadly in sympathy with the philosophy and the general approach of the Government of the day, serious problems are being stored up against the time when a Government of another complexion eventually take over. It is a point that speaks for itself.
My third point is to go back to something mentioned by the noble Lord, Lord Rochester, concerning recruitment. The noble Lord has more up to date figures than I possess. But the fact that there are vacancies in the competitions for recruitment to fast stream administration trainee posts seems to me of itself disturbing. I cannot help thinking how unlike this
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is to life in the 1930s. I notice that in a competition for the direct recruitment of principals, only half the 36 vacancies were filled. I am also given to understand—going to the other end—that there are problems about the recruitment in sufficient numbers and quality of clerical staff. Although your Lordships may not think that the employment of typists is a major issue, the fact is that if you are running an office in central London and you cannot get typists, it does affect the efficiency of that office. And all this, as has been pointed out, at a time of high unemployment!
I am not suggesting for a moment that the points I have been touching upon are the sole causes of these somewhat disturbing symptoms. But they may have contributed. It would not be altogether surprising (would it?) if people were rather put off joining a service that tends to be treated by the media as almost an object of derision, which is the constant recipient of snide comments as exemplified in a particularly unhappy leader in The Times only two days ago, and when the service's own political masters seem content for the most part to leave the impression that they are not all that much concerned for its wellbeing and its pride in performance.
In various contexts, I have had opportunities of seeing something of the civil services of a number of other countries. It has always seemed to me that ours, with all its faults, was better than most, and taking it as a whole, not excelled by any, even the French. Any government have at their disposal a magnificent instrument if properly used. I am glad that this debate has at last given an opportunity of saying so.
5.43 p.m.
Lord Shackleton: My Lords, I must apologise to your Lordships that I have to leave the House early. Last week, a certain noble Lord gave as his reason for leaving early the fact that he had to attend the unveiling of a portrait. He did not actually reveal that it was his own portrait. I have no such respectable excuse other than that I have a very longstanding engagement. And yet I felt, as the first appointed Minister under the Prime Minister in charge of the Civil Service Department, an obligation to take part in the debate. I am grateful to the last Minister in charge of the Civil Service Department under the Prime Minister—namely the noble Lord, Lord Soames—that he allowed me to swap with him. His departure was to my mind symptomatic of some of the troubles that afflict the Civil Service today. It arose out of a longstanding wrangle over half a per cent. At the end of the day, a settlement that had been recommended had to be given and the Prime Minister had lost one of her most independent-minded civil servants—I beg your pardon—one of her most independent-minded Ministers. No one would accuse the noble Lord, Lord Soames, of being a civil servant.
I feel that this is symptomatic of some of the difficulties that, to put it frankly, have led to Civil Service morale being at an all-time low. One may say, "What does that mean?". It is not disastrous but morale is certainly lower than at any time in my lifetime. This is a consequence very much, I think, of Government action, praise—to use the phrase of the noble Lord, Lord Bancroft—"given late, not early, and through clenched teeth". I am grateful to the noble

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Lord, Lord Boyd-Carpenter, for a very balanced and admirable introduction. It is the fact, as the noble Lord says, that there is a certain lack of prestige. It is more than that.
I feel that the situation is a very discouraging one. The noble Lord, Lord Boyd-Carpenter, referred to one of the really great values of the British Civil Service, namely its political impartiality. He gave an example. I did not know the politics of my Principal Private Secretary and I did not seek to find out although, if asked, I would have guessed that he was probably Conservative. One day, when I went into the outer office, one of the girls said of my Principal Private Secretary—I had better change his name—"Oh! Frank won't like that". I asked why not. She said "He is ever so red, much redder than you Minister". I did not know. He continued to serve another Minister. Indeed, let us note the fact that Sir Robert Armstrong was Principal Private Secretary to two Prime Ministers: first to Mr. Heath; and, secondly, to the noble Lord, Lord Wilson, or it may have been the other way round. This great strength of the Civil Service needs to be sustained at all costs.
Why is morale bad? Why is there dissatisfaction? It is that there is a strong sense that the Government have been less than fair. There has been less appreciation of the importance of public service, of the quality that we look for, and—as described in the example given in the speech that we have just heard—of integrity, of high intelligence and of devotion. It is of course absurd to talk about the Civil Service as being inefficient and bureaucratic. I spent 20 years in industry. I know that the noble Lord, Lord Boyd-Carpenter, spent a lot of time in industry. To see real inefficiency you have to go occasionally to private enterprise. Luckily, the shareholders do not find out.
The great strength of private enterprise, if I may give an instance, is that it is free to take decisions. Those decisions are taken. That is why it is so important to the survival of this country. But the public service is accountable through Ministers to Parliament. For that reason, it is much more difficult to introduce these concepts of accountable management. I would say to the noble Earl, Lord Gowrie, that if the last debate in this House took place in 1968 I probably introduced it as the Minister at the time. I cannot remember what I said, but" many of the phrases such as efficiency, transferability and accountable management are familiar. And the drive for more training was very strong. We set up the Civil Service College.
The noble Lord, Lord Windlesham, like the noble Earl, Lord Jellicoe, who succeeded me, will be able to speak about this. Maybe the Civil Service Department did not fulfil all the hopes. I shall not attempt to analyse this. But this sense of unfairness and mistreatment continues. The Government have still not taken any action. One noble Lord has referred to the Megaw Committee. There was a satisfactory system of pay fixing. Those of us who looked at the pay comparability unit—which I did very closely—reckoned that it was a very objective way of establishing under the Priestley proposals, the right of the judgment to enable pay to be reasonably fair. I beg the noble Earl, Lord Gowrie, to understand that I am not just trying to make a party point on this. It is vital to
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this country that the Civil Service should be encouraged and that its role should be recognised. It will be recognised if it is treated more fairly.
There is little doubt that the GCHQ incident was a disaster. If noble Lords have read the Judgment, it is clear that the House of Lords was saying that if it was not for the fact that the Government alone can judge national security we would have said that what was decided was contrary to natural justice. It was a bad mistake, and I think that when the noble Earl, Lord Gowrie, studies it he will think it was a mistake that the offer of a no-strike agreement was refused. It is no good saying, "Well, we didn't believe it". They should have tested it. If the unions had not honoured that agreement, then the Government would have been entitled to move. The difficulty in what is now happening in this policy is that it is encouraging left-wing leadership in the Civil Service unions. It is leading to more industrial strife, rather than the reverse, and I fear that so much that is valuable can be lost.
Let me say that there are some notable achievements, and I shall give credit to the Government for some of these. The number of exchanges between private enterprise and the civil servants has increased. That is something I have wrestled with, both from an industry side and a Government side, without much success. In the long run I shall add no more than that I hope the Government will recognise—I say this in all seriousness—that something has got to be done to improve morale. This applies not only to the Home Civil Service; it is very important also in the Foreign Service. Our ambassadors and our senior civil servants also suffer from this same feeling of lack of appreciation. Many of them are working very hard, and those of us in industry who have to deal with them get uniformly admirable support from posts overseas. It is very exceptional to find that we do not get that support. They are very commercially minded, and I hope this value also will be recognised. But they are being cut, and of course some of the work they are doing will now not be done and it will be damaging to our trade.
My noble friend made an excellent speech, drawing on his experience as Chief Secretary. When I was Minister for the Civil Service I was never sure whether or not I regarded the Chief Secretary as a friend; I think it was the noble Lord, Lord Diamond, on that occasion. My noble friend pointed out that of course some of the cuts that have been made in the Civil Service have been achieved simply by pushing work outside the Civil Service, so that the number of civil servants can be reduced. When I was the Civil Service Minister, or Minister in charge of the department, I used to boast that it was the one year when the numbers of the Civil Service did not go up. But new duties have to be undertaken, and although this Government have gone quite a long way in trying to reduce some of the activities of Government, inevitably new responsibilities and new duties will fall on the public service. I am sorry that I shall not be able to hear the Minister's reply. I have apologised to him. I may say that I have modified my language quite considerably so as not to be as controversial as otherwise I would have been.
The Earl of Gowrie: My Lords, before the noble Lord sits down, since he was kind enough to give me notice that he would not be able to hear the wind-up, may I answer very quickly two points? Obviously at the end of the debate I shall be touching on the GCHQ issue. It would I think be fair to say at this point, in response to the noble Lord, Lord Shackleton, that the offer of a no-strike agreement that was made by the Civil Service unions was repudiated by other unions and by the TUC, as I understand, regardless of its merits. Personally I was not convinced of those merits; but that is another issue. It was repudiated by the Labour movement generally.
The other point I would seek to make to the noble Lord, Lord Shackleton, is that our reductions in Civil Service numbers are net figures. In all kinds of areas, whether it is in the benefits service or whether it is in Customs personnel dealing with drug trafficking, there have been substantial increases. I am talking about a net figure. These figures are in the central Civil Service. Of course I am not referring to savings in nationalised industries' personnel as a result of privatisation.
Lord Shackleton: My Lords, I am very grateful for a separate reply. It will enable the noble Earl to make a shorter wind-up speech.
5.54 p.m.
Lord Soames: My Lords, I have just two points to make. There are many other speakers in this debate. I am among those who are very grateful to my noble friend Lord Boyd-Carpenter for having initiated the debate. It is high time we had such a debate in your Lordships' House.
The first point I should like to make is one that has been referred to by a number of speakers this afternoon; it is about morale. Like many others, I have certain anxieties in this regard, having served close to the Civil Service for a period of time. In 1979 it had grown to by far the largest size that had ever been known in this country. There were two reasons for that. One was a genuine reason, because in the postwar years governments began to touch the lives of citizens at an ever-growing number of points, and by 1979 they touched them at infinitely more points than was the case at the end of the Second World War.
But the second reason was not so commendable, because for some years it had been growing like Topsy and it had come to the point where the growth was, as it were, self-generating. Indeed, it had arrived at the point where it had to be in the national interest to cut it back in size over a timescale of years. But to cut it back in size should not mean that you want to cut it down to size; they are two very different matters. This cutting down in size was achieved over a three-year period. The numbers were reduced; we heard the exact numbers from my noble friend Lord Boyd-Carpenter. It was reduced of the order of 100,000 below the 730,000 that it was in 1979. There is somewhat further yet to go.
But the deeper it is necessary to cut a service, for whatever the reasons may be, the more important does it become to sustain the morale of those who are devoting their lives to that service and who are continuing to work in it. The fact that a man or a woman works for the state does not in any way mean
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that they do not need to be motivated or to realise that what they do is appreciated by those they work for just as much as in the case of those who work for smaller enterprises. This is not always realised by governments. It requires therefore a conscious effort, often in terms of simple man-management by the senior ranks of the Civil Service and by governments.
It so happened that it fell to me to be Secretary of State for War in the late 1950s, at the time when the Army was being much reduced. This involved the names of many regiments of great historical significance and great honour disappearing. The Army had to be reduced very considerably in size. I must tell your Lordships that having also served as Minister in charge of the day-to-day running of the Civil Service some 20 years later I can say that the way in which the Army morale was held up at the time of the big cuts in the Army, as national service ran down, was of a totally different order from the way in which the morale of the Civil Service has been held up. Your Lordships will appreciate that it happened to coincide with a very considerable reduction in increase in pay in the Civil Service compared with those who were working in private enterprise. The combination of these facts, both of which I think were necessary at the time, had an effect upon morale and created the feeling, "Do our masters really mind about us?", coupled with some nasty incidents.
For instance, I remember being present at a conference when a woman rose to speak and in her opening remarks she said, "I am a civil servant", and there were cries from the hall, "Go and do a proper job". However, I do not agree with those who blamed mainly the media; but the media does play upon it. They play upon the mother-in-law jokes and the Civil Service jokes. But they do so because they think that it strikes a chord with the general public, but they do not originate the jokes. They write what they think will sell their newspapers.
It falls to us to make a very considerable effort to give honour and credit where honour and credit are due—and they are due to the Civil Service. Of course the day-to-day contact which civil servants have with ordinary people in their day-to-day lives is a very different contact from that which Ministers and Members of Parliament have with that small proportion—say, 5 per cent. at the most—of civil servants who work in the corridors of Whitehall. People who have contacts in the offices of the DHSS and the like inevitably run up against a bureaucracy which is a bit rigid; it has to be rigid to stop all the risks and dangers. Ministers would be the first to complain if it were not rigid and if they were asked questions in Parliament about why so much money was given to somebody to whom it was not due. There has to be a certain rigidity, and I suppose it is inevitable bearing in mind the opinions of the general public towards the Civil Service.
Whereas we would not dream of letting a year go by without discussing in your Lordships' House the health of the defence services, we heard from the noble Earl who opened the debate and who will wind it up that it is 16 years since there was a debate on the Civil Service. Does that tell us anything? Is it perhaps a sign of the degree of interest felt by this House towards the Civil Service?

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There is a limit to which you can cut; and when that limit comes you have to reduce the tasks as you reduce the numbers—
Lord Diamond: My Lords, as the noble Lord (to whom I have been listening with the greatest possible care) has now left his point about the responsibility for maintaining the integrity of the Civil Service, let me say that I have agreed with every single word that he has said. But I should be grateful if he would complete it and say (if he agrees) that in all the circumstances it is not a general responsibility; it is the responsibility of Ministers. Civil servants are directly responsible to Ministers and in return it is the responsibility of Ministers to do everything to maintain the morale of the Civil Service.
Lord Soames: Of course, my Lords; and that is so of every government in turn, one after the other. Has the Civil Service been taken too much for granted because it was so good? Has there been that type of feeling among Ministers of successive governments? A conscious effort has to be made by Government, by Parliament and by the people to realise what is at risk, how good this service is, and what they stand to lose if morale is not upheld.
As I was saying, there comes a point where one starts having to reduce tasks. For example, as you privatise more, so you automatically need fewer people who are—to use the generic term—civil servants. But you can cut to a point where if you do not reduce their tasks, you will lose effectiveness and efficiency. There is a good example in the diplomatic service. This debate is on the Civil Service, but I think that one might bear in mind the difficulties of the Diplomatic Service, which is constantly being reduced. I have had the good fortune to serve with the Diplomatic Service at various times in my life. You could say, "Well, you could on paper cut down so that you have just enough staff to man the number of posts abroad", but that would be a mistake. I think, for example, of the successful way in which negotiations have recently been handled with the People's Government of China over Hong Kong. That could never have happened had it not been that there were a sufficient number in the higher echelons of the Diplomatic Service who were old China hands, who had spent a great deal of their careers in China and Hong Kong; who knew how the Chinese leaders were thinking; and who could not only talk their language, but could also understand them in the wider sense.
It is necessary for the Foreign Office to have sufficient fat to be able to send young men on language courses so that they really immerse themselves in, for instance, Arabian or Chinese life. Indeed, for the future they should be able to speak Russian, and speak it well enough and understand it well enough to be able to get, as it were, inside the skin of those with whom we will be negotiating over most important matters in the future. So I would put in a plea for the Diplomatic Service.
The other point I want to make is about the relationship between Government and industry—a matter which is particularly important for those industries which are dependent on exports for their success. This concerns both Ministers and civil
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servants. Since the end of the war we have moved from one extreme to the other; we have moved from the extreme of what I thought was too much interventionism by government to the other extreme of almost "hands off industry", letting private enterprise do the job with the Government not interfering. I think that that has gone too far. There is a grey area which we can live in, subject to all the laws and agreements of an international character which derive from our membership of the EEC and from our membership of GATT, whereby Government can help industry to a very considerable degree. We see it in a great many other countries that are competitors. We see it in Japan, where there is MITI. There is hardly a major decision affecting Japanese industry that does not get the imprimatur of MITI before the decision is announced.
France is a country in whose life I am happy to have had some experience. I have seen industry and Government there working in very close accord, particularly in the field of exports.
In our culture and in our way of managing our affairs by the nature of things we get very few Ministers who have had effective responsibility and experience in industry. In the war we did so. In the post-war years it was tried a bit, both with those who had had responsibility for management and with those who had had responsibility in trade unions. That very seldom proved effective and the reason for that is that the other place, rather like the human body, tends to abhor what is not its own. A very important aspect of a Minister's life is being able to carry the House of Commons along with him. So we get young men going into politics in their 20s or 30s, having had very little experience of the problems of industry in the higher ranks, and hopefully staying there for their careers and becoming Ministers. So within our constitution Ministers do not have a very great knowledge of industry; nor does a civil servant. Some of your Lordships have spoken today about attachments from the Civil Service to industry, and vice versa. That is all right so far as it goes, but it is for a year or two at the most and does not fill the need that I should like to see filled.
I have said that I do not think MITI, the Japanese way, is the way in which we could proceed in this country, but I think that we could learn something from the French, who are not bad at this. The percentage of our manufactured exports on the world markets, which has been consistently dropping over the years and shows no sign of recovery, is now down to about 7½ per cent. of that of all industrialised countries, which is half what it has been since the war.
Against that background we must take some steps to remedy the situation, and the best step that I have seen in my experience would be to set up in this country something like the French ENA, the Ecole Nationale d'Administration—the School of National Administration. French graduates attend this school for three years when they leave university, and at the end of their course they are able to manage commerce, industry or, indeed, government. They spend six years in government and then five or 10 years running an industry, and then they return to government. This has two advantages. First, they know each other well, and that is one advantage which should not be forgotten.

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Secondly, they gain experience in both government and industry. Doubtless, in France, industry and government work together seeking, to the greatest possible extent, to stay within the regulations created by their international commitments; they manage to penetrate world markets, which we would very much like to penetrate; and in this area I do not believe that the effect of the ENA, as an élitist "grande école", is by any means minimal.
I think that this would be a good investment for our country to make. It would not be all that large; the graduates would be well-taught and interchangeable. They would not go to industry to learn about it, but to bring their experience to it; and they would not go into the Civil Service to learn about it, but to bring their experience from industry. I do not ask my noble friend to answer this point today, but I hope that others who speak who have experience of the Civil Service and of industry might give your Lordships their views on this matter, and perhaps my noble friend would take it away and, hopefully, give it some consideration.
6.14 p.m.
Lord Hunt of Tanworth: My Lords, I also must apologise for the fact that I shall be unable to stay until the end of the debate, although I am going neither to see my portrait unveiled nor to a private dinner party. For 33 years I was a civil servant and for the last six of those, as Secretary to the Cabinet serving four different Prime Ministers from both main political parties, I was in a somewhat unique position to understand the need for the British civil servant to serve the government of the day to the utmost of his ability and with loyalty, whatever its party political complexion. Before that I had some good jobs and some less good jobs, but I was always proud to be a civil servant. I am therefore very sad that there seems to be an unease enveloping the Civil Service, or parts of it, at the present time.
I do not propose to comment on any particular episodes or rumours. I should like to get back to what I believe are some basic principles, and I do not apologise for the fact that I think some of them are rather old-fashioned principles. In theory, of course, we could have a quite different Civil Service. We could have a politicised system with a large exodus at the top, which we see in the United States. We could have a breed of inefficient, petty officials concerned only with their own importance and held in low public esteem. But I think that everyone who has spoken in this debate so far has agreed that a professional career Civil Service suits this country best.
"Commitment" seems to be the word around these days, but I would say to outside commentators who argue for commitment that there is a world of difference between commitment to deliver what Ministers want and how one votes in the polling booth in private. To my mind, the right sort of commitment is an attitude to work which is concerned more with results and less with the number of compromises that can be made to dance on the head of a pin. This sort of professional career Civil Service needs, in the words of the Motion, both efficiency and dedication, and to some extent those two things go together, but they are different and both need to be cultivated.
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So far as efficiency is concerned, I would agree that much progress has been made since the Fulton Report. The cult of the talented amateur, if it ever existed, has disappeared. There is more training, better career planning, less dependence on Buggins' turn, and greater managerial delegation, particularly to those areas of the Civil Service serving the public directly. Perhaps we have not always counted the cost of improved administration sufficiently, and I very much welcome the greater attention which is now being paid to objectives and to financial management.
I also agree on the need for cross-fertilisation with industry, and I pay my own tribute to what Lord Rayner and his successor, Sir Robin Ibbs, have done and are doing. But that is a long way from saying, as some people do, that top businessmen have a unique capacity to run an undertaking which cannot be based solely on profit centres but which must have regard both to the political process and to the service of the public.
However, I draw a clear distinction between improving efficiency, which I think has been happening and which we should all like to see more of, and changing the nature of a Crown service dedicated to serving the Government of the day to the best of its ability. I believe that this kind of dedication needs understanding and acceptance by all concerned of the very different roles of Ministers, parliamentarians and civil servants. Unless that understanding is there, we have a sure recipe for trouble. I think that some people are beginning to question those different roles.
Civil servants must operate, be seen to operate, and realise that they must operate within quite different constraints from those applying to Ministers. I fully accept that some constraints apply to former civil servants, which is why I shall not comment on particular episodes. I hope that no one wants career civil servants who are political neuters, because if they have no feeling for politics, they will not understand the political process and they will probably not care very much about service of the public.
On the other hand, these career civil servants who should not be political neuters have to work flat out for the government of the day. This rather British convention can work only if it is understood that it is Ministers and not civil servants who have to convince Parliament and the public about the lightness of their policies, and that it is Ministers and not civil servants who are responsible for the way those policies are presented and for how support for them is obtained.
This inevitably raises the question of "leaks" and news management. I am sure that all of us when we are taking a detached and objective view of it would say that both are always undesirable. But again I distinguish between those whose job it is to win support for a particular policy and who naturally consider how best to do this, and those who do not have that responsibility. It is no answer for a civil servant to say, "If Ministers "leak", why shouldn't I?" The answer is that he should not.
But what about conscience? This is a serious issue which I am rather afraid is in danger of being developed and devalued by being prayed in aid too lightly. I agree very much with what the noble Lord,

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Lord Croham, said in a lecture at Salford University recently that,
"those who advocate an ethical duty of civil servants to inform on Ministers while remaining in their posts have almost certainly not realised how intolerable that would be to civil servants and Ministers alike".
Nor, I think, have they realised the almost inevitable consequences in terms of politicisation of the Civil Service.
Of course, we can all conceive the extreme case of a government plotting to subvert the constitution where it might well be the right and the duty of a civil servant to speak out. Of course, one can conceive not the extreme case but the rare case where a civil servant so disagrees with a policy being pursued that he asks for a transfer, or indeed resigns. But I believe that the civil servant who is so committed politically that he seeks to frustrate Government policy should be in a different profession.
But if civil servants are to be dedicated in the way I have attempted to describe, I think there are others who have to contribute to this dedication. As has been said, loyalty flows downwards as well as upwards, and I think Ministers—and Ministers of any party, let me say—need to remember that this kind of dedication we are talking about is different from either the slavish obedience which you might get from a political neuter or a petty official, or the obedience you would certainly get from a politicised Civil Service.
In those two cases you get it easily enough, but for the career civil servant I think it involves pride in his profession or, to put it in more simple terms, pride in serving the people of this country by working for the Queen's Government of the day. That pride will not be there without self-respect, and it is hard to respect yourself if other people do not respect you.
I think also that parliamentarians, the press, and the public need to remember that in the age-old struggle which will certainly go on between the executive and the legislature, civil servants are, willy-nilly, creatures of the executive and not a pawn in the middle. Certainly there is a case for greater openness of Government; certainly the less a Government do, the Jess there will be a need for secrecy; but civil servants can only properly operate within the policies established by Ministers.
The Civil Service is passing through a time—perhaps malaise is the right word—where cuts are affecting promotion prospects and where, rightly or wrongly (and it does not really matter whether it is right or wrong), there is perceived to be a diminution of status and regard. I do not myself believe that there is a crisis. I am sure that my former colleagues and the people now still in the service have no intention of creating a crisis, and do not want one. Nor am I seeking to attribute blame. I suspect that if we searched our consciences—Ministers, civil servants, former civil servants, trade unions—we would all find something for which to blame ourselves. But the morale of the service, as well as its efficiency and dedication, is desperately important, and this is the time perhaps to pause and think; and this is why this debate introduced by the noble Lord, Lord Boyd-Carpenter, is important.
It is time for all concerned, whether in the Civil Service or outside it. to remember the reasons for the
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traditional relationship and ground rules between civil servants and Ministers. It is a relationship—or should be—of mutual respect, but they have very different roles. If we do not perhaps pause and think about those traditional relationships there could be a danger of ending up with the sort of Civil Service which few people would want and which would certainly serve the people of this country less well.
6.27 p.m.
Lord Campbell of Alloway: My Lords, in what I have to say I defer to those noble Lords on all sides of the House who have spoken before me from a lifetime of experience of the great affairs of state. As is well known to your Lordships, I have none. I also defer in particular to the authoritative exposition of the noble Lord, Lord Allen of Abbeydale, and the noble Lord, Lord Hunt of Tanworth, who it is my pleasure to follow.
As in the case of my noble friend Lord Boyd-Carpenter, I, too, am an admirer of the Civil Service and wish to accord it full honour and credit; but I would also wish to take up one of my noble friend's points of criticism and to expand it just a little, but not at great length. The question is, put starkly, whether recent activities of Civil Service unions are consistent with the importance of an efficient and dedicated service. The noble Lord, Lord Allen of Abbeydale, no doubt with his innate sense of intuition, rightly assumed that I should raise this point of criticism, because if I understand his speech aright he agrees with a great deal—but not all—of what I am about to say.
It was known that the political pretensions of many trade unions to govern the realm, albeit by remote control, would lead them to challenge the authority of Parliament and the authority of the Judiciary. This was all but inevitable. But what was not known was that unions, on behalf of their members in the employ of the Executive arm of government, would resort to industrial action to further such pretentions. At the outset, the point has to be made that the activities to which I refer have nothing whatever to do with pay claims as, on pay, Her Majesty's Government have accepted the broad proposals of the Megaw Report and are conducting negotiations with the unions to seek to reach agreement on a new pay determination system taking comparison into account.
So why were such activities on the part of the unions whose members were in the employ of the Executive not foreseen? It is, first of all, because the political aspiration to govern is alien to the ethos of the Civil Service, which is a-political. Secondly, industrial action by civil servants is a contrary concept constituting a departure from established traditions of dedication, efficiency and loyalty. And, thirdly, there are certain constitutional implications concerned with the doctrine of the separation of powers under which the Executive, as well as the Judiciary, is subject to the ultimate supremacy of the Queen in Parliament. So what, may one ask, is the meaning of dedication and efficiency when the general secretary of a Civil Service trade union, taxed by a subordinate of a former director of GCHQ Cheltenham as to the serious consequences of disruption, replies (and I quote):
"Thank you for telling me where I am hurting Mrs. Thatcher most"?

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I quote from the judgment in the House of Lords.
Let us not sweep this under the carpet, pretend it was not said, pretend that it did not lie at the basis of that judgment—and I will deal with the view of the noble Lord, Lord Shackleton, in a moment, if I may—and pretend that it did not lie at the centre of the reasoning of that judgment. Also in the reasoning of that judgment the point was taken that it had to be borne in mind that the history of industrial action at the Cheltenham GCHQ—the one-day strikes, the selective strikes, the work-to-rule, the overtime bans—was not concerned with local problems at Cheltenham but was in support of a national trade union as sympathetic action. Again, I have quoted from the judgment.
On this occasion therefore with the noble Lord, Lord Rochester, I cannot go along with the noble Lord, Lord Allen of Abbeydale; and certainly I cannot go along with the noble Lord, Lord Shackleton, who cast more than a hint of blame on the Government's handling of that affair. The facts, the reasoning as stated in that judgment of the Appellate Committee of your Lordships' House, do not warrant such stricture. They do not warrant a sense of grievance on the part of civil servants. The judgment of the House of Lords rightly concentrated upon that reply of the general secretary, which was shameful, and on the aspect of sympathetic action to which I have referred. If we look facts in the eye, which of your Lordships is going to say, on those facts, that consultation would have made a ha'p'orth of difference?
One might well ask: what is the meaning of "dedication and efficiency" in context with the industrial action that has been taken at the DHSS computer branch centre at Newcastle? My noble friend Lord Boyd-Carpenter touched on this. May I for a moment consider the facts in some detail? I am sure that if your Lordships are not apprised of these facts then noble Lords on all sides of this House will be appalled. There were three unions involved: the Society of Civil and Public Servants, the Civil Service Union—and those two unions had 40 to 50 members between them—and a third union called the Civil and Public Services Association. That union had about 300 members. What happened was this. The management, in implementation of an agreement with the three unions, entered into negotiations in January 1984 on a proposed alteration of shift patterns. This arose out of an audit question followed by a management study. The object of this was not far from the wording of this debate. The object of this proposed alteration of shift patterns was to provide an efficient service to the public by full use of expensive computer equipment.
In the course of these negotiations, the three unions called a strike on 14th May 1984—a strike call which was answered by the members of all three unions. The attitude of the management at subsequent meetings was flexible while the attitude of the three unions was rigid: that the shift patterns should, so to speak, remain as if set in concrete for all time. The negotiations which had been broken off by the three unions in May were not resumed until October 1984, a stalemate period of six months. On Wednesday, 28th November—last Wednesday—the Society of Civil
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and Public Servants and the Civil Service Union accepted the management's offer and, at last, their 40 or 50 members have gone back to work. But the Civil and Public Services Association refused to accept the offer and their 300 members are still out on strike.
Such a situation is neither acceptable nor tolerable. However enticing may be the prospects of permanency, promotion and pensions, no one is obliged to become a civil servant. The option of resignation is always open to those who are dissatisfied, disenchanted or troubled by conscience—and here one relies again on the authoritative exposition on matters of conscience by the noble Lord, Lord Hunt of Tanworth. The status and privileges of civil servants are unique and not inconsiderable, and I agree unreservedly and wholeheartedly with my noble friend Lord Boyd-Carpenter when he suggests—he did not put it this way; I have to put it my own way, but it comes to the same thing, it is the same thought—that as a quid pro quo surely it is not unreasonable that if any claim or dispute cannot be settled by the process of negotiation then there should be mandatory arbitration and a no-strike clause. Such a regime could be introduced by the Minister by amendment to the terms and conditions of employment in implementation of Article 4.2 of the 1982 Order in Council.
No one supposes that one deft thrust of a lance would dispose of a dragon which would remain dangerous even in its death throes; and it is plain that the appropriate means of terminal extinction are clearly a matter for Her Majesty's Government. It is not to the point in this debate, which is not really a debate about employment but a debate about the Civil Service, to complain about the intransigence of trades unions or the attitude of the TUC or Her Majesty's loyal Opposition. These are all facts of life, and we have to live with them. But it is to the point, in context with the importance of an efficient and dedicated Civil Service, to ask simply this: for how long shall the traditions of efficiency and dedication be flouted by those civil servants who are determined to defy tradition? And for how long shall the Government, or shall we, stand by?
6.41 p.m.
Lord Bancroft: My Lords, I shall not follow in detail the noble Lord who has just spoken. I should like to start by echoing the gratitude which other noble Lords have expressed to the noble Lord, Lord Boyd-Carpenter, for his measured and constructive introduction to this debate. I have already apologised to him and to the noble Earl for the fact that I shall have to leave the House before the debate ends. I now apologise to your Lordships in general.
I must, and will, be brief. Naturally I welcome most of what has been said about efficiency and effectiveness. These have been prime goals of the Civil Service since the pioneering days of the Post Office surveyors one-and-a-quarter centuries ago. And the achievements have been real, fostered—the usual paradox—by two world wars. Over just the last decade, as noble Lords have reminded us, there has been a succession of huge changes in the style, the tempo and the tone of public administration. Many of these changes have been wholly for good.

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I believe the Government are to be congratulated on keeping a head of ministerial steam behind the drive for efficiency, and I wish the service well in pressing forward with the existing initiatives and exploring further such areas as merit pay, which the noble Earl touched upon. It is good to have public recognition that there is some merit in the service, and I assume some resources will be found to reward it. It would also be helpful to have the Government's views, in due course, about the suggested initiative in connection with the private sector, put forward by the noble Lord, Lord Soames. Perhaps I ought also to add that it has always been a useful working rule in my public life that too many initiatives tend to strangle the prompt dispatch of essential business.
Dedication, my Lords, as has been stated by the noble Lord, Lord Boyd-Carpenter, and others, is vital in the Civil Service; and it is also a two-way stretch. It includes, for example, the ability to listen to critical advice, given in private and at the right time. The optimum policies are on the whole unlikely to emerge from Ministers who do not have the weaknesses of their proposals pointed out to them, or Ministers who are otherwise impatient of dissenting advice. There is an honourable role for the official to discharge between saboteur and sycophant. "Yes, Minister" is a comedy, not a documentary. The good Minister and the good official should have a respect—preferably a robust respect—for each other.
Also bound up with dedication nowadays is the question of freedom of information, which other noble Lords have touched on. I have to say that I treat the right to know with some reserve. Ministers and officials must be free to argue and to disagree in private among themselves. It would be distressingly simple to make it a statutory duty to disclose the policy analysis while withholding policy advice; the two are intertwined in the real world. I suggest that unless great care is exercised, a legitimate pressure for more open government can get entangled with a doubtfully legitimate right to know and a wholly illegitimate right to leak. Trust and confidence, as has been said already, between Ministers and officials is essential; and it has declined. What remains would be wholly destroyed if officials claimed to have and to exercise a right to leak, pleading a higher accountability of some sort. I agree with the noble Lord, Lord Hunt of Tanworth, that it is in that way that there lies a politicised Civil Service.
Where else does this responsibility lie—this responsibility for the decline in trust? Unlike the noble Lord, Lord Hunt, I shall have a shot at distributing responsibility. It lies partly, no doubt, in the climate of the times—the service is a reflection of society—and partly in the increased militancy of some staff, to which reference has been made, notably by the noble Lord who has just spoken. I agree that the deliberate wreckers can sometimes be very influential though few in number. I accept that the militancy is deplorable. But I venture to suggest that it may be a symptom, not a disease. With effective management and a serious attempt to restore sensible staff relations, I believe it could become a relatively minor irritant.
In this connection I warmly welcome the principle of the suggestion made by the noble Lord, Lord Boyd-Carpenter; namely, that some Civil Service staff—in my view, the more, the better—should be covered by
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both a no-strike agreement and a recourse to binding arbitration on pay, with the Government having a parliamentary override. Devising the details would not be easy, especially if (as I believe it should) it goes wider than pay. The arbitral body would need to be influential, authoritative and tough; but the rewards to the community in terms of efficiency and dedication, if this were to be successfully brought off, would be immense.
This said, I share the view that the main responsibility for the decline in mutual trust lies in ministerial attitudes, though by no means those of all Ministers. On a personal and pleasant note, I have to say that I was undeservedly lucky in virtually all the Ministers I served; in particular, the seven successive Leaders of this House, for whom I worked when they were Ministers in day-to-day charge of the Civil Service, and many others, including the noble Lord who moved this Motion.
They used to be revered in their departments—no doubt some Ministers still are—and it is mainly in departments I think that the damage can be put right. It was good to read the other day, for instance, a Secretary of State publicly acknowledging in a parliamentary answer the efforts and dedication of his staff at all levels in reducing the impact of the deplorable strike at Newcastle.
As we have been reminded during the course of this debate. Ministers are the direct employers of over 600,000 staff. Good employers need sensitivity, and preferably experience, if they are to get the best out of their workforce. Too many Ministers, I have to say, give the impression that public service is neither an honourable nor a worthy calling and that the members of the non-uniformed services are refugees, afraid of the real world. So long as that happens, dedication will be that much harder to get and to give.
This has nothing to do with numbers and nothing to do with tasks. The Government are absolutely entitled to slim numbers and to hive off tasks in conformity with their democratic political judgment. But governments, I submit—sometimes against the evidence—are not anarchists. A need will remain for sizeable public services. What is then left should be treated positively, not as a regrettable necessity. It is these services, like it or not, which will still be responsible for helping parents to nurture the infancy, the education, the health and the security of tomorrow's private sector workforce.
In conclusion, I hope that my old service will be greatly heartened, as I feel it should be, by most of what has been said, generously and rightly, so far in the debate.
6.50 p.m.
Lord Windlesham: My Lords, it is a particular pleasure for me to follow the noble Lord, Lord Bancroft, since I, like other noble Lords who have spoken in this debate, for a time had Ministerial responsibility for the day-to-day work of the Civil Service Department. When I was there the noble Lord, Lord Bancroft, was Second Permanent Secretary. He was my mentor and closest official colleague and I learnt much from him.
I welcome the emphasis which was apparent in the

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important speech made by my noble friend Lord Gowrie on the drive for better management and higher standards of managerial efficiency in the Civil Service. In what he said he was reflecting some of the remarks made in his admirable introduction by the noble Lord, Lord Boyd-Carpenter, to whom we are all indebted.
There is undoubtedly now a higher level of political interest in and commitment to the way in which the Civil Service works. The scrutinies carried out initially by the noble Lord, Lord Rayner, and now continued by Sir Robin Ibbs have played an important part in the drive for greater efficiency. It is highly desirable that the methods of the very successful companies with which these two advisers have been so closely associated should be brought to bear on the operation of central Government. Although one noble Lord referred to the efficiency scrutinies as mere tinkering, I am not sure that phrase is justified. If I heard him correctly the noble Earl, Lord Gowrie, said that savings of the order of some £300 million per year had already been achieved as a result of these scrutinies. All that is good. There is a higher degree of interest and continued encouragement and determination is needed in the future.
I want to follow what has really been emerging as the theme of this debate: that is to discuss the people who form the Civil Service; who they are; how they are motivated; how they are recruited; how they are trained; how they conduct themselves in the responsibilities which they carry. I will refer more specifically to a matter which was touched on towards the end of the powerul speech of the noble Lord, Lord Soames. For all its virtues in the Civil Service, and in particular in the higher Civil Service which is concerned with the formulation of policy guidance to Ministers, there is a tendency towards exclusivity.
Great care is taken in the initial recruiting. It is fair and open competition and I believe it is now as broadly based as it can be. But once recruited, there is an inbred quality which manifests itself in most Government Departments. What can be done? We heard the noble Lord, Lord Shackleton, speak about secondments or exchanges between Whitehall and industry. That is a subject close to his heart. But it is mainly at senior levels and the numbers involved can only be small. It is desirable, but it is not going to effect the ethos and the traditions of the Civil Service as a whole.
We have heard in the debate from several noble Lords about civil servants leaving in mid-career. The noble Lord, Lord Allen of Abbeydale, referred to this aspect. He said that it did not give him grounds for serious concern at the moment, but that he was watching it with interest. What the reasons are we can only speculate upon—lack of esteem may be one factor If we looked more closely I suspect the desire for professional advancement, for improved income, in some cases ill-health, and wider or more interesting opportunities, would all be found to have played a part as well. People leave the service in mid-career for a variety of reasons, although from my own observation, seldom for incompetence or inadequate performance. But on the other hand, very few enter. A flow of managerial staff, inwards as well as outwards, must strengthen any organisation. In the private sector,
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expansion and retrenchment of businesses provide conditions in which people are joining and leaving all the time up to the highest level. It is a two-way movement.
I have studied the annual report of the Civil Service Commission and I find that in 1983, for the first time for five years, there was open recruitment for people with managerial skill and experience. Thirty-six posts, a relatively small number, were advertised at principal level. What was the response? It was overwhelming. There were 939 applications from mature, experienced people in the age range of about 35 to 45. But out of 939 applications only 18 were appointed. The Civil Service Commissioners commented:
"Despite the large number of candidates, the overall quality of those interviewed was poor, resulting in a very disappointing outcome".
If we turn to administration trainees, a group of younger men and women, direct entry and in-service, we find that there were 60 vacancies in 1983, and 2,884 applications. Forty-seven were appointed, and as the noble Lord, Lord Rochester said that represents a marked improvement on the previous year when only 24 were appointed. The number is likely to be higher this year. The Civil Service Commissioners commented:
"A rather disappointing outcome".
So we have gradations of disappointment, precisely expressed.
In the case of Diplomatic Service officers at grade 5 and at grades 8 and 7, the position was more satisfactory. All but one of the vacancies were filled. What does this show? It shows that there is strong demand for positions in the Civil Service by those who have already started their careers. In the case of administration trainees some will be seeking their first appointment having graduated from university, but many will not. They will have been working in some other capacity up to the age of 30 or thereabouts. Now it is clearly right that there should be strict criteria for selection. There must also be consideration for the future promotion prospects of those who are recruited. It is also certainly right that due weight should be given to the promotion opportunities for those who are already in the service.
I should like to ask the Minister, given the very small number of vacancies which are advertised and made available to open recruitment, and the imperative need to counter the inbred habits and ways of doing things, which have already been referred to in this debate, would it not be better (whether or not this is heresy, I do not know) to say that if we have 36 places then we take the 36 best people? If the number of applicants was only slightly more than the vacant posts, there might be a case against doing so. But here we see that there were nearly 1,000 people who specifically applied for the 36 direct-entry principal posts. In almost any other field of selection the full number would be taken up on the basis of merit, from number one to number 36, and not leaving, as in this case, as many as half the vacancies unfilled.
Apart from that observation, one would need to be very self-confident to feel that the required standards were so absolute that they could be detected with such precision. We all know how difficult it is to tell how those recruited will turn out in the future. Some may

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be a great success, but others will not. Therefore, to leave as many as half the agreed number of vacancies unfilled seems hard to justify; although I know the traditional reply has always been that we cannot afford to drop standards. I hope the noble Earl may be able to deal with this in his reply.
My only other comment relates to training. I listened with interest to the noble Lord, Lord Soames. Clearly, he made a strong case which calls for an answer, either now or later when the noble Earl, Lord Gowrie, has had an opportunity to consider his proposals. Of course, ENA is a part of a totally different administrative system. We have to recognise that, and the noble Lord did so. But if we can get more uniform training covering those from both the public service and industry then, as in France, we may look for many benefits in the future.
I note that in addition to the existing Civil Service management development schemes, next year for the first time, a Top Management programme is to be introduced. Three courses are to be held in 1985 with four a year thereafter; each to cater for 24 participants. There will be approximately 10 civil servants at or around the point of promotion to Under-Secretary—this is a key group nearing the top of the service. There will probably be two or three from local authorities or other public bodies; about three from the nationalised industries, and about nine from private sector companies. I understand there has been an encouraging response already from the private sector. Therefore, it would seem that there is a move in the direction the noble Lord, Lord Soames, and myself would like to see.
The theme underlying the debate is the decline in the public reputation, morale, and esteem of the Civil Service. Several noble Lords have spoken from long, first-hand experience. What is needed is a better spirit in the Civil Service—more confidence, more self-respect—the term used by the noble Lord, Lord Hunt of Tanworth. If these qualities can be restored in the future, they will lead to an improved public reputation. I believe that one way to move towards that aim, which we all share from whatever part of the House we speak, would be to do more to encourage a greater inflow from outside into the middle ranks of the Civil Service.
7.5 p.m.
Lord Gridley: My Lords, your Lordships will not expect me to make a comment on the speech of my noble friend Lord Windlesham. It appeared to me that my noble friend, as a former Leader of your Lordships' House and a noble Lord of great experience, was giving advice to the Government and to my noble friend Lord Gowrie as to how he might help in making a contribution to the debate.
I am indebted to my noble friend Lord Boyd-Carpenter, as are many of your Lordships, for calling our attention to the importance of an efficient and dedicated Civil Service—a service which at one time enjoyed the admiration and envy of the world for its incorruptibility, its efficiency, its dedication and, one word I would add, its impartiality.
I am an overseas civil servant who served in that capacity for over 30 years. While I was overseas, with other officers, a great deal of what motivated us in the
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way we dealt with our work and the service which was rendered to Britain generally, was the enthusiasm and the lead which was given to us from Parliament. After I came home after internment in the last war, and after a short return to that country for further duty, I found when I returned to this country on final retirement that there was a huge expansion in the non-professional Civil Service at home. I express the personal view that, as a result of that huge expansion, the admiration for our Civil Service and its reputation was not as high as it used to be.
The reasons are undoubtedly many. Expansion may be one reason. Some reasons may well lie with the individual civil servants themselves. As the noble Lord, Lord Bancroft, said in his speech, it may be militancy within the service itself. It may lie in the hands of government and be their responsibility to see what they can do to bring back, by reorganisation and possibly by increasing the standards of competence, a dedication by civil servants to bring the service up to the standard of admiration that the world had for us in an age which has now gone.
At this stage, and prior to the Second World War, appointments to the home Civil Service and the overseas service were somewhat restricted. Recruitment was largely confined to academic qualification but character came in for consideration. Character was an important ingredient. It was our public schools and universities which provided the greatest supply to the service. At the end of the war, in 1945, opportunities were given for advancement and promotion from within the service itself. I do not complain about that. It would be right not to deny to those who might not, in the circumstances, have had a privileged education, but had exhibited a special show of ability and devotion, that opportunity of advancement which came the way of others.
However, there is the difficulty today for Government which did not previously exist, and which is accepted by most people, that we are now in the computer age and the age of the micro-chip. In the advancement of science we find that an officer in a clerical grade may be required to handle confidential or classified documents; documents which formerly it would probably have been easier and more obvious to have confined to a restricted circle. But in the affairs of today, where documents may be more numerous—and I have no means of knowing to what extent their numbers exist—it poses difficulties for people in a clerical grade to accept the responsibility entrusted to them in the circumstances I have described.
There is another matter which creeps into my consideration and which has arisen in recent times. How is it—and in any case, how did it ever arise—that personnel employed in the Government Communications Headquarters at Cheltenham, who were employed in Government positions of vital importance to the state, came within the ambit and protection of a trade union who have the power to call a strike of people involved in the safety of the state? I am not against trade unions; I want to see strong trade unions in this country. But why should the interests of these people not be looked after as they were in former times by Whitley Councils of which I have had some experience. Can Whitley Councils not be entrusted to look after the interests of these men? Does not a

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similar observation apply to those civil servants of the DHSS whose strike over a very long duration was designed, but failed, to deprive the pensioners of their pensions?
In conclusion there is no greater service-particularly within the Civil Service—that an individual can render than service to the Crown and his country. Anyone who does not feel that way, should not enter the Civil Service. I have asked myself what it was years ago that fired me, as it did so many others, to enter the Civil Service. There was of course the excitement of adventure. It seemed an honourable opportunity then; but now, in a shrinking empire which has come about in recent times opportunities for that may not be so available as they were. But with the ever-increasing speed of air travel and, as it appears, decreasing boundaries between nations, will that not bring us in ever more contact with the peoples of the world? Here will lie the opportunities for our youth to serve our country either in the Foreign Service or in some other capacity, and they will succeed if their motive is service in the traditions of the service of a former time.
7.13 p.m.
Lord Lindsay of Birker: My Lords, I am extremely grateful to the noble Lord, Lord Boyd-Carpenter, for giving us the opportunity to discuss this very important issue. It is interesting that a little over a century ago Karl Marx described the United Kingdom as a country in large measure without a bureaucracy. Now the growth of the bureaucracy has changed the nature of British society.
I should like to quote a passage from the works of Confucius in which he discusses what is most important for a state and concludes that the trust of the people is more important than either the army or the economy. He ends by saying:
"People without trust, not stand"—"(Min wu xin, bu li.)"
It is quite clear that in this country there has been a decrease of trust in the government. A very interesting indication is the portrayal of the Civil Service in popular fiction. If one looks at the stories by John Buchan, which were published about 60 years ago, civil servants invariably are portrayed as men of wisdom, integrity and courage. If one reads the modern stories by William Haggard, who had the same background of actual experience in government, one finds civil servants almost always appear as stupid and cowardly. Again, if one looks at science fiction works by John Wyndham or Fred Hoyle, civil servants are always bumbling incompetents. Clearly these sweeping condemnations are unfair, but I think that they have some real basis.
Perhaps to explain just why I am saying this, I may describe the episode which destroyed my own personal trust in the Civil Service. This happened in 1975. Our family wanted to rebuild an old water mill, restoring the original outside appearance and turning the inside into a home. The Lake District Planning Board turned down our application, saying that it did not approve the construction of new dwellings on isolated sites. This seemed a highly capricious judgment because it had recently approved the building of a new cement block house on an even more isolated site only three or four miles away.
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People advised us to appeal, and said that we could be absolutely certain that an inspector from the Department of the Environment would give a fair verdict. The inspector came, held a public inquiry and inspected the site. He eventually issued a report backing the Lake District Planning Board with ridiculous arguments. The argument of one paragraph depended on the premise that it was impossible to repair a road. It said that the access road was so bad that emergency vehicles could not reach the site. Now the National Trust has repaired the bad section of this road and given it a tarred surface. The argument of another paragraph depended on misreading the architect's plans, on misremembering the topography of the site and on refusing to believe what several witnesses had said at the inquiry. Those are only the worst examples.
Many local people had attended the inquiry, and a common reaction to the inspector's verdict was to say that both the Lake District Planning Board and the Ministry of the Environment were crooked. I do not believe that the inspector was crooked. The hypothesis which best explains his report was that he believed that his primary duty as a civil servant was to protect and support other people in government service.
The noble Lord, Lord Shinwell, recently expressed his disagreement with Dr. Johnson's definition of patriotism as "the last refuge of a scoundrel". What Dr. Johnson should have said was that an appeal to patriotism is the last refuge of a scoundrel. The scoundrel will claim that his behaviour should be condoned because to punish him would damage the good name of the country. If people once start accepting this kind of appeal, the results are disastrous.
A really extreme example was what happened in Japan in the 1920s and 1930s. The emperor and his advisers did not like the behaviour of the army, but they were never prepared to resist the argument that to punish a high-ranking officer for crime would damage the good name of Japan. The end result was that large sections of the army became involved in drug trafficking and other forms of crime. I have seen the same kind of results in other organisations; for example, in Australian university politics.
I do not think, however, that this kind of thing has gone very far in the British Civil Service, though there is some evidence that it has started, with the result that there has been some decline in standards. I have heard and read of cases where a Minister has given false information to this House because a civil servant has lied to him. The remedy for this should be fairly simple. Ministers should refuse to accept responsibility if they are not told the truth, and should say that telling lies to a Minister is professional misconduct justifying dismissal from the service.
A more general remedy is publicity. Group solidarity can only cover up wrong conduct if it can be concealed. I am glad to see that many people, including the noble Lord, Lord Scarman, are now willing to call for a repeal of the Official Secrets Act. I think there should also be a change in the libel law.
To change to a different point, the officials serving the Emperor Charles V had a saying:
"What is not in the records, is not in the world"—"Quod non est in actis, non est in mundo."

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I think that bureaucrats prefer to operate in terms of a system that accords with their conventional procedures, even though it ignores important aspects of the world. People with a bureaucratic mentality do not ask themselves, "What action is most likely to produce the results we want?" Instead they ask, "What can be done within the limits of conventional procedures?"
In China under Japanese occupation between 1937 and 1940 I saw a very interesting contrast between conventional and unconventional diplomacy. The French had less real power than either the Americans or the British, but were more successful in defending their interests against the Japanese army. It was official British and American policy to react conventionally through diplomatic protests. These were futile because the Japanese foreign policy was powerless against the army. The French reacted unconventionally by retaliating. If a French ship had trouble in Qingdao, there would be trouble for the next Japanese ship that put in at Marseilles. In Shanghai and Tientsin, where there were a few French troops, they relied on the unwillingness of Japanese officers to take responsibility for starting a major international incident.
At that time the British Foreign Office had in China some men of outstanding ability, but there were also men who were intelligent and hard-working but completely inhibited by convention. I wish to give one simple example. In the darkest days of 1940 the man in charge of the embassy branch in Shanghai said to the local leader of the Free French movement, "I cannot have any dealings with you because you represent a rebel government". I heard that from M. Egal's son.
I can also give a contemporary illustration. My brother wrote a letter to the Prime Minister about the miners' strike in which he suggested that, instead of closing collieries, the Coal Board should give them to the National Union of Mineworkers; that would challenge the NUM to prove its contention that those mines could be operated without a huge subsidy from the general public. He soon received a polite reply from the Department of Energy, which commented on that part of his letter by saying that the NUM had not approached it with a suggestion of taking over the mines but that it would be glad to discuss such a proposal if it were made. When my brother wrote to say that that misrepresented his actual suggestion, he received no reply. Apparently the idea of challenging critics of official policy to prove their case by giving a practical demonstration was so unconventional and so shocking that civil servants could think about it only after they had changed it in their minds to something more conventional. It is just possible that they may also have been afraid that the NUM might have been able to demonstrate that it could manage the mines better than the Coal Board.
That lack of imagination comes from the normal structure of bureaucracies. This is hierarchical, with promotion depending very largely on reports from superiors. Ideally, promotion should go entirely by merit. In practice, there is a preference for people who avoid mistakes and act to please their superiors. There is some discrimination against people with imagination and original ideas, who will be regarded as
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trouble-makers if they suggest changes in existing practices. Promotion goes on until people reach a level at which they become incompetent and start to make mistakes. That defect is very much worse in the American foreign service and armed forces because of a rule that people who are not promoted must resign. American writers have praised the British Armed Forces for allowing people to continue useful careers at the level at which they are competent.
One can make some suggestions for reform. A great deal could be learnt from Japanese business organisation which is obviously efficient. One feature is a divorce between authority and status. Businessmen dealing with Japanese companies have told me that they wasted a lot of time by trying to work through the managing director. It took them months to discover that the man who could make decisions was three or four steps down in the table of organisation. In a Western organisation a junior man with outstanding ability can get authority only by displacing people of higher status, who will naturally resist. The Japanese organisation can give authority to the person best qualified for the job, without hurting the careers of others.
Another feature is that important decisions require a long process of discussion in which people quite far down in the organisation can participate. In a Western organisation the man at the top can make a decision very quickly, but it may take a long time to put it into practice because people at lower levels do not understand it or do not like it. In the Japanese organisation, once a decision has been made, it can be put into practice very quickly because everyone understands it and has participated in making it.
The simplest way that I might make some other points is to suggest possible reforms in the Foreign Office. There could be an objective test of merit, which I think is unusual. Suppose that near the end of a tour of duty abroad members of the foreign service at all levels wrote a confidential report trying to predict future developments in the country in which they were serving. Those reports would be opened and read in the Foreign Office several years later. Someone who had made accurate predictions would be marked for rapid promotion; someone whose predictions were widely wrong would be considered unqualified for a responsible position.
Again, there is no real substitute for detailed local knowledge. I knew the man who was the last Japanese service officer in Tokyo. He said that his job was very interesting. He knew that he could never become ambassador, but every ambassador who came to Tokyo had to use him for local contacts and local knowledge. Such people no longer exist.
I think that it would be very sensible to offer two different types of career. One would be for the present generalists and the other would be for people specially interested in some area who could become fluent in the local language and get to understand the local culture and society. Embassies would be under a two-man team of the generalist and the local specialist. Each could rise to the same level in salary and status. The idea of two-man teams may shock some people, but the Roman republic worked fairly well with power shared between two consuls.
I can give another instance of potential gains from

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an untidy table of organisation. One of my good friends was for a long time an NCO in the United States Air Force, working on repair and maintenance. He said that the Air Force did not have enough good repair men because one could get promotion beyond a limited point only by shifting into administration. The contribution of a really good repair man to the fighting ability of the Air Force may well be as great as that of the average colonel. It would make sense to have a separate line of promotion through which a really first-class mechanic could rise to the salary of a colonel. There may quite likely be cases in this country where the same principle would apply.
As I have said something about the "Peter principle", by which bureaucracies promote people to the level at which they become incompetent, I should also mention Parkinson's law, that bureaucracies always tend to proliferate. I know that this is an extremely serious problem in the United States. I used to teach evening classes in which many students came from the government service. One evening I was talking about the Chinese Cultural Revolution. I read out a report from the New China News Agency in which a provincial government claimed that it had reduced the number of its officials by 90 per cent. I asked what I thought was a rhetorical question: "How many agencies are there in Washington that could function effectively with one-tenth of their present number of employees?" I was slightly shocked when several students laughed and said, "We could tell you of quite a number". I think that that is a slight exaggeration, but other people we know in government service say that most of the work in their agency could be done by one-third or one-quarter of the actual number of people employed.
Clearly things are not nearly as bad in this country. People have had some success in reducing the numbers in the Civil Service, as we have heard today, but I think that there must still be some things wrong. When we discussed local government last month, the noble Baroness, Lady Lockwood, mentioned a case in which a number of civil servants in London busied themselves over the lease of a fish and chip shop in Yorkshire. I think that a Civil Service which can waste its time on that kind of problem must clearly be somewhat over-staffed.
The noble Earl, Lord Gowrie's, speech near the start of this debate shows that the United Kingdom has been much more successful than the United States in reducing proliferation and raising efficiency. I hope there will be further progress that will also tackle the perhaps even more difficult problems of trying to get at the top people who will show imagination and willingness to make experiments.
7.31 p.m.
Lord Beloff: My Lords, many of your Lordships will have had the experience of being asked, "What is the House of Lords like?" After this afternoon's debate, I think my future reply will be, "It's like a rock pool: you throw something in and you cannot tell what will come scurrying to the surface". When, some months ago, I had the idea that it would be nice to have a debate on the Civil Service, I could not have foreseen the course that this debate would take or the amount
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of miscellaneous information which would be vouchsafed to us—from the noble Lord, Lord Allen of Abbeydale, disclaiming the title of mandarin, to the last speaker quoting from Confucius in the original.
The general impression, though, that I have gathered from this debate is somewhat depressing. Although the noble Earl, Lord Gowrie, pointed out the very considerable advances in efficiency which have been made in the Civil Service and are in progress, and although there was general agreement on all sides of the House that we have a very efficient service carrying out very heavy burdens entrusted to it, there was yet this undercurrent of anxiety about Civil Service morale, which I must admit I had not expected would figure so largely.
One wonders really whether civil servants are quite as thin-skinned as they would appear to be because, apart from the fact that all of us have our morale damaged when we do not get the financial or career awards that we would like, they in particular seem to suffer, so we are told by many speakers, from the unwillingness of Ministers and, to some extent, the general public, to lavish upon them the praise which their efforts have earned.
I hope they are not as thin-skinned as that because I think that civil servants have to realise, in all periods, that they are, of necessity, caught between two demands upon them which are very largely irreconcilable. One is to be mandarins, to be a caste apart, framed in a particular way to perform a function which is extremely difficult, standing between political Ministers and the general public. In this they have to have dedication to a non-political approach to their work, to which several speakers referred. On the other hand, they are constantly being reminded, and quite rightly, that it is also their business to be sensitive to what the general public requires and needs of them. They require considerable imagination and experience in order to enter into the preoccupations of those aspects of society with which they will deal.
Most of the references have been made today, not unnaturally, to their need for a greater understanding of the demands of industry. But there are other aspects of life, where also some ability to enter into the preoccupations of other people and other professions is demanded. As I say to some extent these demands are ultimately irreconcilable. The more you accept the need for civil servants to live a life apart and to have a prescribed set of values, the more difficult it is to envisage a close interaction between Government departments and the rest of society.
The question must always be this. At any particular stage in the long development of this institution of ours—and after all, we are talking about a Civil Service which is at least 700 years old—the longer we have looked at this in any particular period the more we may have been swayed in one direction or the other. My inclination at the moment is to say that we have not a very precise picture of all that the Civil Service is doing to correct the imbalance in favour of isolation.
Mention has been made of secondments to industry or the commercial world. There are or have been, I know, also secondments to periods of research in universities. However, it would be nice to know the number of civil servants, at any rate above a certain

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grade, who have had, or who are likely to have, in the course of their careers experience of this kind. My own impression—and it is only a very fleeting and external impression—is that on the whole the Foreign Service has been more aware of the possibilities of getting experience of this kind, of broadening the interests and experience of members of that service, than has the home Civil Service. That certainly was the case when this kind of thing began a quarter of a century ago. I do not know whether it is true any longer.
The noble Lord, Lord Windlesham, certainly made much of the need for recruitment at levels which would imply that those coming into the service had experience—in some cases quite prolonged experience—of another walk of life before they became Government servants. I must say that I was not altogether moved by the fact that the first 36 entrants should have been taken irrespective of merit. I suspect that those who interviewed these mid-level recruits were careful, understandably careful, and that the fault may well lie in the fact that, as anyone who advertises a post of almost any kind knows, there will be a large number of applicants who do not come up to the required standard. Nevertheless, I think in spite of the disappointment of this attempt, there probably is now a very good case for saying that quite a proportion of those recruited for a Civil Service career should not be direct entrants from the universities.
Against that, one has to ask if one is not likely, then, to lose very able people because they would want their first career to be the one in which they stayed. Would they not feel, by the time they had reached the age of 30, and perhaps done well in commerce, in industry, or in one of the professions, that they would rather see it out? So here again is a genuine dilemma. One would like to know ministerial and departmental thinking on this matter.
A much more radical suggestion was advanced by the noble Lord, Lord Soames, who, I think not for the first time in discussions on this question, produced the old adage, "The French do these things better". Certainly the achievements of ENA in colonising both the public and private sector in France have been very remarkable. The idea that Britain is the country of the old school tie would hardly survive a close look at the careers of those, in almost all French political parties, as well as in the administration and the private sector, who now govern that country. But one wonders whether this particular kind of exercise—the training together in a school of administration which varies very academic study with postings outside for practical experience, for ENA is a sort of super sandwich course, if I may use a phrase from another branch of education—would, in fact, have the same impact in this country, where we have a rather different and perhaps rather less academic attitude to training for action. But it is an interesting idea.
It is, I think, worth remembering—this is another question upon which perhaps my noble friend the Minister could throw some light—that when the Civil Service College was created (I remember discussing this with the late Lord Armstrong) it was thought that it would play a far greater role, and something much closer to ENA, than has turned out to be the case. It was not thought that it would confine itself, as it certainly did in its early years, very largely to training
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in rather specific skills of a managerial or statistical kind. It was also thought, if I remember rightly, that not only would it be a centre for training at a very high level but also a centre in which civil servants and others would come together to pursue the kind of examination of government and its efficiency which we have now seen conducted in quite different ways through the Rayner inquiries, and so on. I think people would find it very interesting to learn from my noble friend the Minister what are the thoughts about the future development of the Civil Service College. Is it likely that it will turn out, if not to be the British ENA, at least to occupy a rather more central position on the general stage?
7.42 p.m.
Baroness Carnegy of Lour: My Lords, I hesitate to speak in such august and such male company, but I want very much to follow up briefly what has already been said about morale and about motivation. I base what I say entirely on current and very recent experience in working with civil servants in the Manpower Services Commission and in the Scottish Office. It seems to me that the public at large, and indeed many of us in Parliament, simply do not appreciate what we have been asking of our civil servants during these last few years of great change. Nor do we appreciate the initiative, the flexibility and the skill with which the vast majority have responded.
The Earl of Gowrie: Hear, hear!
Baroness Carnegy of Lour: My Lords, I believe that we have recently been taking too much for granted in this respect. My noble friend Lord Soames did, I think, say that. At one time it may have been fair to take the Civil Service for granted: now it is manifestly unfair. Indeed, it is ultimately counter-productive as well. The traditional skills of civil servants (what we used to mean by Civil Service efficiency) were the skills of the administrator of systems—systems which were largely unseen by the public. They were the skills of guardians of an ever-expanding public purse as well as the skills, also unseen, of putting together and proposing policy options, of supporting and protecting Ministers and the like.
Civil servants were people who were expected to get it right, not to get it wrong; people for whom never making a mistake was the best way to promotion. It was recognised that their role behind the scenes was crucially important, that their trustworthiness was absolute. They were much admired from afar. Many of the most able of graduates competed strongly for entry, moved quietly through a comparatively predictable career, remained virtually unknown throughout their career, and received some accolade from the Queen at the end. Some of what I have described is still the case: but much, it seems to me, is not. Cash limits and limits on the number of staff mean, so far as is possible in Civil Service terms, production targets, productivity targets, for the delivery of services, for processing consultation exercises and for writing and publishing documents.
As several noble Lords have said, management skills are demanded at many levels and people are now left, so far as is possible, certainly in the Manpower

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Services Commission, free to manage within the limits set by Parliament. Innovatory action is demanded; new thinking; entrepreneurial projects. The Rayner-type studies have changed the question, "How can we administer this better?", to, "Why do we need to do this at all?". All this means that sometimes risks have to be taken, experiments have to be made; and public answerability for a public experiment can mean public admission of mistakes.
In the case of the Manpower Services Commission and of some other areas, civil servants in the higher grades—some of the 5 per cent. we have been talking about—nowadays find themselves face to face with the public as never before. They meet industrialists, trade unionists, educators, consumer groups of all sorts. They have to consult, explain, persuade, influence. Sometimes they are helped by the ability to offer available grant aid. Sometimes they are armed only with their own powers of tact and of advocacy. The media, too, brings some top civil servants face to face with the public. Articles appear on particular personalities; there are television appearances. The balance between the invisible man or woman and the visible one has to be very carefully struck.
There is the change, too—I think no noble Lord has mentioned it—wrought by the Select Committee system. Whereas a civil servant's public answerability used to take place by way of Ministers and used to be unseen and unheard in the dimly-lit corridors of power, now the windows and doors, as it were, are flung wide open. The lights and the people stream in. The public can hear with their own ears over the radio answerability in action as their elected MPs question their public servants about the policies of the day.
Lastly, there is the effect, as elsewhere in the public sector, as other noble Lords have said, of the Civil Service unions, who. like their members, are still feeling their way to a new role in the new situation and who know very well that if they get it wrong with the public they may well do their members, and indeed the public whom their members serve, more harm than good. These changes bring great challenges to the Civil Service. My experience is that most civil servants welcome that challenge. They are glad to match their efficiency and commitment to the best in the private sector, although they are frustrated to an extent by the fact that of necessity their production is often not in their control because it is demand-led. The criteria for their success are subject to the vagaries of politics. Those who are the managers are not in a position, as they might be in the private sector, to turn improved productivity into improved pay for their junior colleagues.
I would maintain that in my experience much has been and is being achieved. It is easy to talk about efficiency and dedication, but the problems that have to be overcome are complex and demanding of all concerned. But to be efficient and to be dedicated, one must be motivated, one must believe in the importance of one's job and believe the public appreciates that importance. That motivation, in turn, attracts high-quality entrants for the future. I hope this debate, despite the moments of depression to which the noble Lord who has just spoken referred, and the ripples emanating from it, may do something to cause
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Parliament and the public outside to appreciate afresh the way civil servants have been and are responding to the huge changes they are having to meet. I for one should like to salute them for what they have achieved during these last few years. I hope the House, in the company of the noble Earl the Minister, will salute them, too.
7.51 p.m.
Lord Moran: My Lords, the Motion introduced by the noble Lord, Lord Boyd-Carpenter, in his admirable speech this afternoon covered, I am sure, the public service as a whole and not merely the home Civil Service; because when people talk about the efficiency and dedication, or lack of it, in the Civil Service, I am sure that they are thinking of the public service as a whole. So I make no apology for talking primarily, but not exclusively, about the problem as it affects the Diplomatic Service. I said something about the relationship of the home Civil Service and the Diplomatic Service when I spoke last month in the debate on the gracious Speech.
I shall deal first with efficiency. I have seen something of other public services during my career and I think that on the whole the efficiency of our own public service stands up pretty well. I am very glad that the noble Lord, Lord Boyd-Carpenter, made the point about our Civil Service being wholly free from corruption. It is very important that we can take that for granted, certainly in regard to the central Government. But in my experience efficiency, when it does suffer, suffers very often because of shortage of funds. For example, I found that one of the administrative departments in the Foreign and Commonwealth Office was having to send its typing—any letters it wanted typed—down to Southport, whence they returned some three weeks later. It did not do this because it wanted to but because no funds were available for a typist in London and this was the only expedient that could be adopted. But that is scarcely efficient.
On the much more important question of dedication, I would say that in the Diplomatic Service life today for most British diplomats is no longer what it was. It tends to be rough and unpleasant. They have to encounter tropical diseases, microphones in the bedroom or the bathroom, ever-present bodyguards for the head of mission; and pay which was never brilliant has often been reduced in real terms year after year. It is therefore kept going by dedication and loyalty; that is why people go into it. But dedication and loyalty ought to be a two-way street. The noble Lord, Lord Boyd-Carpenter, mentioned an article in the Financial Times of last Thursday. That article referred to what it called the present Government's apparent disdain for the race of civil servants. I do not know how that disdain is expressed—perhaps through leaks or Lobby correspondents—but I think it is thoughts of that sort which cause damage to the morale of the Civil Service as a whole.
Another point I should like to make is that when the Government are planning reorganisations or new departures in the public service very often they call in management consultants to do this job, at a high cost. A senior management consultant costs about £600 a day. But. after all, the Civil Service contains a lot of

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extremely able people and also specialists—lawyers, statisticians, economists; all sorts of specialists—and I do not think it should always be necessary to call in outside bodies. It suggests sometimes to me that the Government have more confidence in the views of management consultants than they have in their own civil servants.
But the Government expect very high standards—rightly, I think—of their civil servants; in some respects even more exacting than they do of Ministers. For example, all senior civil servants have to be positively vetted, and any departure from the highest standards of behaviour will result in their losing their positive vetting certificates, in which case their careers will effectively be at an end; whereas there is no positive vetting for Ministers.
I should like to say a word about cuts. I have always believed myself that what we need to have, certainly in the Diplomatic Service, is small numbers of first-class people, and we should give them the resources to do the job properly. I am against big battalions. But the fact is that in recent years the Diplomatic Service has had to take on greatly increased tasks. There are, to start with, a great many more new independent countries than there were. The Foreign and Commonwealth Office has to cover altogether about 164, and in the last 20 years we have had to create 19 per cent. more embassies and high commissions, though a number of countries are covered by nonresident representation. I say that having myself once conducted the cheapest British embassy in the world, which operated between London and Chad. It involved going there four times a year, taking a typewriter, a radio, and a flag to put on my car. It can be done at very minimal cost, but very often, of course, with countries with which we have more substantial relations it is a good deal more costly.
The job to be done increases year by year. The Foreign and Commonwealth Secretary said in another place last month that the number of British visitors overseas had increased four-fold in the last 20 years. In 1968 it was only 5 million; now it is over 20 million a year; and many of them expect to be helped and looked after. So the burden on the service increases steadily. The Diplomatic Service, however, is small. It is only a quarter of the size of the Metropolitan Police Force. Its overseas staff totals half the overseas staff of Shell. Its home staff here in London is only slightly more than the staff at the headquarters of Marks and Spencer.
It has been drastically cut. It was cut by 10·7 per cent. between 1968 and 1979 and by a further 10·1 per cent. between 1979 and 1984; in other words, it has been cut by a fifth in the last 16 years. On seven occasions since 1950 these public expenditure cuts have compelled the Foreign and Commonwealth Office to close five or more posts. I repeat: that has happened on seven occasions. Many of these cuts are damaging. I remember, for example, that when there was a demand that all government departments should cut by 5 per cent. two senior officials had to come to Canada and demand a contribution towards the cuts. They ended up by cutting altogether our representation in Winnipeg. At just the same time the Japanese, who do not usually do things without good reason, were establishing a Consulate General in
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Winnipeg. If your Lordships look at the trade figures you will see that ours have gone down and those of the Japanese have gone up by an almost similar amount.
The strain on the service is beginning to tell. I have noticed that my friends who are still in it work extraordinary hours. When I was newly-entered into the service we used to work reasonable hours, and when there was a crisis it was naturally all hands to the pump. But now people seem to work all the time, very late in the evenings, and that gives them no reserves to deal with the crises that inevitably arise.
The Select Committee on Foreign Affairs in another place has pointed out that in their view the service is already cut to the bone and cannot be cut any more without damage. Yet the Government have just announced further cuts, and because of anxiety about aid to Ethiopia many of those cuts will fall on the operations of the service itself. This constant series of never ending cuts must have a serious effect on morale. It would be better if the Government could make up their mind what type of diplomatic service they want, how large they want it to be, and then stick to that for a period of years, rather than constantly cutting it, and therefore creating great uncertainty.
In my view, it is absurd that the diplomatic service is made, as it is at present, to absorb the results of the falling pound. I found that when I went to Canada the pound stood at 2.80 Canadian dollars, while now, of course, it is far less than that. These differences in exchanges are nothing to do with the diplomatic service; it is impossible to forecast them accurately; and they are not a real addition to its costs.
I also think that the practice of having cuts across-the-board in all departments bears quite unreasonably on a department like the Foreign and Commonwealth Office. It is what is known as the policy of equality of misery, which I would regard as generalised swipes. It is devastating to a department like the Foreign and Commonwealth Office where some 70 per cent. of its costs are in manpower. If you are the Ministry of Defence and have a huge budget you can, perhaps, secure your contribution to cuts by postponing a weapons programme for a short time. But in the diplomatic service the cuts can only be achieved by cutting posts and cutting people. I do not think that any business would operate with such a blunt instrument. It would be better to examine specific functions—for example, should we cut our own operations or should we decide that we can no longer afford to take part in peace-keeping operations in Cyprus or something of that nature?
It is of enormous importance that young people coming into the service should be treated properly. We ought to treat them well and expect a great deal from them. I do not believe that we always use them as effectively as we should. They come with fresh ideas, and in the past it has always been the interaction of the fresh ideas of the young people coming into the service and the experience of the more senior people operating together which has produced good results. But in order to get good people we must offer them good prospects. How can we do that if we are constantly cutting the size of the service?
When I spoke to your Lordships last month I mentioned Ernest Bevin. I shall mention him again because he was a man who always stood up for his lads

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and received in return a legendary loyalty from the diplomatic service. I hope that the Foreign and Commonwealth Secretary and his successors will in future be equally robust in standing up for their staffs.
8.5 p.m.
Lord Harris of Greenwich: My Lords, I think that this has been a notable debate and that the noble Lord, Lord Boyd-Carpenter, must be gratified about its character. It has had a number of special features, not least that four senior former civil servants have spoken: the noble Lord, Lord Moran, a former senior member of the Diplomatic Service; a former Secretary to the Cabinet; a former Permanent Secretary at the Home Office; and a former head of the Civil Service. For those reasons alone it has been important. While mentioning retired members of the public service, I should perhaps add that there are few Legislatures in the world that have the advantage of having among their members so many senior retired civil servants who take an active role in the day-to-day activities of the House. We derive considerable benefit from their expertise, and in saying that I must add the following point. I very much regret that so far there has been no indication that the last Permanent Secretary to the Treasury and the last head of the Foreign and Commonwealth Office are going to join us. I can recall no recent occasion when senior civil servants of that calibre have not been invited to join this House, and I very much hope that that matter will be speedily rectified.
Before coming to the substance of what I have to say, I should like to raise a question with the noble Earl, Lord Gowrie, right at the outset. It arises from one or two sentences that he slipped in—and I say that in no critical sense—at the end of his speech. I should be grateful if he would be good enough to clarify them in rather greater detail when he comes to reply. The noble Earl made reference to some kind of bonus for good work. He indicated that some form of announcement has been made today. Frankly, I am not aware of any such announcement, but nevertheless I am sure that one has been made. I wonder whether the noble Earl would be good enough to deal with two or three questions which arise from this matter, because it is a very important announcement, which carries with it substantial implications. I know of no previous occasion when this type of action has been taken, but that is not in itself an argument against it. Nevertheless, it does need some explanation.
First, what are the principles of this scheme? Who will decide who gets the bonus? Secondly, how much money is to be made available for this purpose? Will it be new money—money that will be added to the Civil Service wage bill—or will it come out of the total Civil Service wage bill itself? Have any particular ranks been defined by the Government as those which will receive this bonus? I should be grateful if the noble Earl could go into detail. I think that there will be considerable interest in the Civil Service about this whole question and I should be grateful if the noble Earl would go into the matter rather carefully, adding perhaps at the same time whether the Civil Service unions have yet been consulted, and whether they have had the principles of the scheme explained to them.
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I now come to the substance of what I want to say. In some respects—and in this regard I would agree with the noble Lord, Lord Beloff—this has been a rather uncomfortable debate, not because it has been other than important, but because we all (or I think very nearly all of us) are aware of one unpalatable truth, which is that relations between Ministers and the Civil Service have deteriorated sharply. The only point on which I might differ from some of those who have spoken earlier is that I think that this has been a trend which has taken place over a number of years. It would be unfair to say that this is a problem which has arisen only in the lifetime of this Government. I think that it is a far more substantial question than that.
I believe that there are a number of possible explanations for this. I think that the principal one lies in our country's extremely poor economic record during this period. As one government have followed another, each pledged to improve upon the record of their predecessor, but each always accompanied into office with policy commitments made to satisfy the zealots in the constitutencies who have made such objectives impossible to realise, public confidence in our political institutions has been to some degree eroded. The public has become accustomed to economic failure, and inevitably the collective reputation of politicians has suffered; and, just as inevitably, when governments have lost office there has been an enthusiastic hunt for scapegoats.
Sometimes of course the quarry has been a former ministerial colleague, such as Mr. Callaghan or Mr. Heath. But increasingly it has become fashionable to attach the responsibility for failure to the Civil Service. Certainly this is the opinion of many members of the present Government. But in my view they are not alone in holding this opinion. One only has to re-read the memoirs of Mr. Richard Crossman, to take one example, to see the extent to which they were shared by some former members of Labour Governments: when things went well it was as a result of the exceptional ability of Ministers; when they did not, it was due to the incompetence or to the obstruction of the Civil Service.
I do not propose to weary the House by attempting to analyse the extent of these fantasies indulged in by politicians of different political persuasions, or to go to the other extreme and to argue that the Civil Service bears absolutely no responsibility at all for the poor performance of our country since the end of the Second World War. Clearly, as principal advisers to Ministers, they must share some of the responsibility.
However, having worked in a number of Government departments during this period—for 18 months in the Foreign Office, for two and a half years in the Treasury and for five years as a Home Office Minister—I find this shrill campaign of denigration directed against the Civil Service both distasteful and damaging to the interests of this country. Certainly I have had to deal with civil servants who, in my view, were less than competent, and on occasion I believed that one or two officials were not working as tenaciously as I felt they should to implement policies which had been decided by Ministers.
However, the idea that there was a settled determination to frustrate the policy of Ministers is I believe absurd. Let me give just one example—indeed,

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the noble Lord, Lord Boyd-Carpenter, who has much greater ministerial experience than I, as does the noble Lord, Lord Barnett, could I am sure give many himself. But I should like to give this example to illustrate the character of the relationship and what, in my view, it should be.
In 1964, just after the election of the Labour Government, my late noble friend Lord Gordon-Walker, who was then Foreign Secretary, was advised by officials that we were about to become involved in joint naval manoeuvres with the South African Navy. He was told that the Royal Navy favoured them and he was strongly advised by his officials that the consequences of calling them off at the last minute might seriously jeopardise British interests. He listened to the advice. The matter was argued out and he decided that, despite the advice which he had received, the manoeuvres must be cancelled. That was done. There was no acrimony, no obstruction and no disloyalty.
That is my experience of what has happened when Ministers and officials meet, discuss a problem and sometimes disagree. I am bound to say that I can recall no occasion when I believe officials were endeavouring to undermine, in a calculated manner, the policy objectives of Ministers. Indeed, if I were to criticise officials, it would be entirely for the reverse reason. I believe that there were some occasions when officials were only too ready to agree with opinions which were expressed by Ministers. I fear that there are officials who are sometimes slightly too eager to please their Ministers. They are not normally the most self-confident and are rarely the most able.
Therefore, I find it rather depressing to hear suggestions that the best way of determining who should be promoted to the most senior positions in the Civil Service is for Ministers to ask themselves one question: is he one of us?
The Earl of Gowrie: My Lords, I am most grateful to the noble Lord for giving way. There is not a shred of evidence that that is taking place or has taken place.
Lord Harris of Greenwich: My Lords, I rejoice to hear what the noble Earl has just said. I hope that it receives substantia] attention in the media because I have read—as I think all of us have read—substantial accounts in the media, which appear to come from extremely well-informed sources, which suggest that there are just such considerations in the minds of some Ministers. Indeed, although the words I have used this evening are my own, I hope that the noble Earl paid particular attention to the speech of the noble Lord, Lord Allen of Abbeydale, which did not appear to conflict in any particularly direct fashion with what I have just said.
The sort of official who is prepared to hint to a Minister or to his political adviser or to a journalist who is friendly to the government of the day, that he is in full sympathy with the government's political objectives, is almost by definition an unsuitable person for senior appointment in the public service. Not only does that sort of conduct dishonour those few who practise it, but it is rarely, if ever, sincere. The Curates of Bray who are prepared to indulge in this type of behaviour will be off as soon as there is a swing in the
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public opinion polls, making exactly the same sort of noises to the government's political opponents.
I very much hope that we shall hear less of this constant suggestion that this question, "Is he one of us?" is one of the determining features for appointment to senior ranks in the Civil Service. I believe that it undermines public confidence in the Civil Service and also the morale of the many able men and women who have entered the service and want to be, and deserve to be, judged exclusively on the basis of their ability, and not their presumed political views.
I turn now to an issue which I know the Government regard as being of the highest importance, and that is the issue of the size of the Civil Service. Indeed, the noble Earl devoted a great deal of attention to this matter in a speech which he made earlier this afternoon. Let me say at once that I have some sympathy for the Government's view that when they came to office the Civil Service was too large. I am therefore in no sense at all an opponent of what they have attempted to do.
But a price must be paid for making heavy cuts in the size of the Civil Service. Unless the total workload of officials is cut, and as the noble Lord, Lord Barnett, said, unless functions are cut, and dramatically cut, all that will happen is that standards will slip, some important work will not be performed at all, and the burden on the more devoted and responsible officials, who are prepared to work prolonged hours without any expectation of additional financial reward, will increase immeasurably. Of course in some areas the Government have, as a result of policy decisions, succeeded in cutting the overall workload in the public sector. The abolition of exchange controls is an obvious example of this. But in other areas the Government have increased the burden of work on the public service.
I think we all welcome—I certainly do and my noble friends do—the emergence of the specialist departmental committees in another place, but these have imposed a heavy burden on government departments at a time when Ministers have been simultaneously demanding substantial cuts in manpower. The increasing trend of interventionism in the affairs of local government, with the consequence of rate-capping about to fall not only on local authorities but also on the Department of the Environment, is hardly consistent with the Government's declared objective of reducing the pressure of work on Whitehall departments.
Sometimes the effects of cuts in staff numbers pursued with doctrinaire enthusiasm and without any regard for the consequences can be extremely serious. Let me give just one example, one of which the noble Earl, Lord Gowrie, will be aware of for a number of reasons: first, he gave me some Written Answers on this matter on 20th November; second, he dealt with the matter in his speech, and also dealt with the question at Question Time today. I am referring to the alarming increase in drug trafficking in this country.
During the period in which I was a Home Office Minister responsible for the police, the problem of heroin addiction in this country was relatively marginal. There was some trafficking in heroin but it was fairly well under control. In five years the situation

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has been transformed. There is now a serious heroin problem in a number of urban areas in this country, including both south and east London and parts of Scotland. No one who has seen the speed with which heroin addiction has grown within this country, promoted as it always is by sophisticated professional criminals, can fail to be disturbed by the evidence.
The extent of the problem was disclosed in the noble Earl's Answer. In a period of only five years heroin seizures by Customs and Excise had risen from 40 kilograms in the first 10 months of 1979 to 257 kilograms, with a street value of over £31 million, in the first 10 months of 1984. The noble Earl seemed to take the view this afternoon when he touched upon this matter—I hope I do him justice; if I do not no doubt he will correct me when he replies—that he was really rather encouraged that seizures had gone up. Of course, they have gone up. The reason that seizures have gone up is that there has been a massive increase in the overall level of the trade into this country. Of course, the Customs and Excise do everything they can to minimise the flow of heroin into this country, but the noble Earl's answers only reflect the true extent of this situation.
He pointed out, as I reminded the House, that seizures rose by no less than 600 per cent. in a period of only five years. But how much more flooded through into this country without the authorities being aware of it? From all the evidence of our inner-city areas the answer is a great deal indeed. The American Customs are believed to intercept somewhere in the region of 10 per cent. of the heroin that heroin dealers are trying to get into the United States. Let us assume that we are three times more efficient than the American Customs—and that is being pretty generous. It means that in this period, the first 10 months of this year, no less than £70 million or more of heroin has been illegally imported into this country. That gives one an indication of the gravity of this situation.
What has been the Government's response to this crisis, because crisis it certainly is? In the same period of five years they have, to be fair to them, increased the size of the investigation branch of the Customs by around 150 men and women. But, of course, part of the staff of the investigation branch of Her Majesty's Customs and Excise have nothing whatever to do with the traffic in narcotics. The noble Earl has told us that there is to be a further increase of 100 officials in this overall area. But at the same time the Government have cut the uniformed strength of the Customs and Excise, who are our first line of defence against heroin traffickers, by over 1,100 men and women; 25 per cent. of the total uniformed strength of the Customs service. And yet every law enforcement officer knows perfectly well—the noble Lord, Lord Molson, touched on this earlier this afternoon—that the heroin traffickers are moving through those green channels at Heathrow, Gatwick, Manchester, and at the port of Dover in the most alarming fashion. That is why we are seeing those disastrous repercussions in many inner-city areas in this country.
On this matter I find the Government's behaviour quite remarkable. It throws a strange light on the statement made by the noble Earl, Lord Gowrie, in his
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interview in the Guardian on 10th November this year. Then he told his interviewer, Mr. Coleman, that the Government were providing the same service with 100,000 fewer civil servants. I wonder whether the noble Earl really believed that? Did he, or does he, believe that the same service is being provided by the Customs at the points of entry into the United Kingdom? Today he appeared to veer away slightly from that statement in the Guardian. He indicated, as I understood it, that he would not suggest that the Government had maintained exactly the same standard of service that they had inherited in 1979. But if I do the noble Earl less than justice he will no doubt explain what he really meant when he comes to reply.
I do not believe that any sensible Government should take risks of this kind with the safety of the public by pursuing their objectives with such single-minded doctrinaire relish. For the noble Earl to suggest, as I think he did in that interview in the Guardian, that in this area, as in a number of others, it is possible to provide precisely the same quality of service despite savage cuts in staff" numbers is not altogether worthy of him.
The Earl of Gowrie: My Lords, may I intervene? This is a detailed point and I want to deal with the debate generally when I wind up. I said in my opening remarks that it is not precisely the same service. It is improved in some areas and it is probably done at a less admirable level in others. But overall the mix of public services on offer to the public are the same as they were in 1979. That was the point I sought to make in the Guardian.
Lord Harris of Greenwich: My Lords, in that case I do not think the noble Earl did it with his customary skill. He may recall that he received a letter from the secretary of the First Division Association, Mr. Ward, challenging him on this matter. No doubt when he comes to reply—I understand that so far he has not done so—he will explain what he really meant in his article in the Guardian in rather more detail than he has had the opportunity of doing this evening.
There is an issue of even greater significance that lies behind the debate we have had this evening. It is the whole attitude of the Government towards those who work in the public sector. There are a number of Ministers, such as the noble Viscount the Leader of the House, who maintain civilised relations with their civil servants, but other Members of the Government seem, I fear, on some occasions to regard those who work in the public sector as being infinitely less worthy than those who work in the private sector. It is reflected, I believe, in their general attitude to pay (as my noble friend Lord Rochester touched on earlier today), but I think it goes rather wider than that. I think that the Government must accept not only that their relations with their staff are poor—and they are—but that they have been getting a great deal worse. And this affects not just junior staff—and that is a serious matter in itself—but also some of their more senior staff.
There has been the crude and inept handling of the GCHQ affair. I do not propose to go into the matter in any great detail; I spoke in the debate on it. My position and that of my noble friends is abundantly

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plain. But I would say this. I agree very much with the noble Lord, Lord Boyd-Carpenter, when, at the beginning of the debate, he said that he favoured no-strike agreements in certain parts of the public service. I agree with him. Indeed, soon after the return of the present Government, after the "winter of discontent" in 1979, I wrote to the then Secretary of State for Employment, urging precisely such a course.
But I am bound to say that I believe that the way in which the GCHQ affair was mishandled by Ministers has made the attaining of that objective a great deal more difficult. But that, I am afraid, is not an isolated example. Let me give just one other brief illustration. There has been a recent statement by a colleague of the noble Earl, Mr. John Gummer, who is not only the chairman of the Conservative Party, but is as we know, a member of the Government, as well. He made a speech referring to what he described as,
"falling moral standards of civil servants".
I say very seriously to the noble Earl, and, indeed, to his colleagues, that I wonder whether they always appreciate the degree of anger felt by civil servants (many of whom work long hours and unpaid extra hours on behalf of the public) when they read this sort of stuff which is produced by Ministers. As a recent survey carried out by the First Division Association showed, a substantial number of their members were working 10 hours a week more than their conditioned hours.
I think that that sort of thing indicates the degree of dedication we have in a very large number of our public servants. I think, that being so, that it might be rather better if Ministers tried to avoid making provocative statements of the kind that I have just quoted from Mr. Gummer, I hope also that they will reply to letters from the First Division Association when they are written to by the association.
I hope that the noble Earl and the Prime Minister, in the light of the debate that we have been having today, will demonstrate that they understand the seriousness of the present situation and that they will do their best to rectify it; because the British Civil Service is not the private property of any passing Government. In a real sense it belongs to all of us. I hope that, by their actions, Ministers will recognise this.
8.33 p.m.
Lord Ennals: My Lords, I am sure that the House owes a great debt of gratitude to the noble Lord, Lord Boyd-Carpenter, for introducing the debate. We may be thin on the ground at the moment, but the debate has attracted not only the Minister, but eight former Ministers, three former heads of the Civil Service Department, and two other very senior officials within the Government service. They have all expressed themselves with great clarity.
I myself want to say that I believe that in this country we have over the years good reason for pride in the impartiality, the dedication and the incorruptibility of both our borne Civil Service and our Diplomatic Service. I was glad that the noble Lords, Lord Soames and Lord Moran, reminded us that we were talking about the Diplomatic Service as
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well as the home Civil Service. Our concern (all of us, whatever our views may be) must be to ensure that these high standards continue.
Personally, I have no time for those Ministers or former Ministers, who, in their memoirs or speeches, or by innuendo, somehow or other blame civil servants for their own mistakes. Ministers are responsible for decisions; civil servants are responsible for advising them, and, when Ministers have taken their decisions, for helping to ensure that those decisions are carried through.
The noble Lord, Lord Soames, told us that this is the first time for 16 years that there has been a debate in your Lordships' House on the Civil Service. He may well have asked himself why this is so. I think the reason is that there is now a very deep sense of concern about the relationship between Ministers and civil servants, and that is a concern that affects all those who have been civil servants and are civil servants, and I believe it affects a very large number of those who have been Ministers as well. This has been very widely reflected, my Lords, in the debate.
I think that the noble Lord, Lord Hunt of Tanworth, referred to a sense of malaise. The noble Lord, Lord Boyd-Carpenter, in opening this debate, said that all is not well. The noble Lord, Lord Moran, referred to the fact that there is low morale, and the noble Lord, Lord Bancroft, said much the same. So, too, did the noble Lord, Lord Shackleton, from his point of view. I think that to me perhaps the most moving speech—though I was impressed by the speech of the noble Lord, Lord Rochester, who spoke from the Liberal Benches—and, in a sense, the most courageous, was that which was delivered by the noble Lord, Lord Allen, who, as a former Permanent Under-Secretary at the Home Office and a servant of the public in so many ways since then, expressed very clearly the sense of concern and malaise and the low level of morale which I believe has been a theme which has run through most of the speeches in this debate. I was about to say, "Having served under Lord Allen as a junior Home Office Minister" and I guess that that is just about right. He was the Permanent Under-Secretary and I was very new as a Minister. My respect for him was heightened today.
I am not going to deal very much with the question of efficiency, though not because I do not think that it is vitally important. It is partly because of my noble friend Lord Barnett. Any debate that brings he and I together in warmth and agreement is, of itself, a remarkable debate, bearing in mind the conflicts that we have had in the past; and this is one of the advantages of being in Opposition. I want to deal not so much with the question of efficiency—though I must say that I ought to give a warning, as the noble Lord, Lord Bancroft did, not today, but in a debate that took place on the Second Reading of the Rates Bill. He then referred to the provision that had been made in the Civil Service to cope with those local authorities that were affected by rate capping. He said on 9th April—and I quote from column 1000:
"I note the number of extra staff needed in the Department of Environment"—
He had already said what an enormous role it was and how difficult it was for Whitehall to decide what expenditure was to be required. He said:

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"I note that the number of extra staff needed in the Department of the Environment is estimated at 45. If 20 local authorities are designated, that averages two and a quarter staff per authority to check, know and argue about those authorities' spending policies and decisions. Even taking into account the quality of the DoE staff, two and a quarter seems flippantly low".
That comment would still be apt if the number were doubled.
So my warning on this to the Minister and to the Government is that if they are to take unto themselves responsibilities which have not been the responsibilities of central government, then they must provide the staff to enable those tasks to be fulfilled as best they can. That does not mean that I agree with the decisions that they are taking. But if they are going to take those decisions, they have to enable those decisions to be properly carried out.
As I have indicated, I want to deal with what I believe is a most disturbing trend in Ministerial-Civil Service relationships. I believe, unlike the noble Lord, Lord Harris of Greenwich, that this is something that has occurred during not the last five years, but I would say the last two or three years: I do not recall a time in my political life, except perhaps during the Suez crisis, when the morale of the Civil Service was as low as it is at the present time.
The noble Lord, Lord Allen, said that members of the Civil Service felt a widely held sense of grievance, and he listed some of the reasons. My noble friend Lord Barnett quoted from John Ward, who is an official of the First Division Association, which, after all, represents civil servants in a salary range from £13,000 to £35,000 a year. He said:
"The public may be getting a bit sick of bleating about Civil Service morale, but there is no doubt that there is a strong sense of disillusionment at the top level".
Clearly there is something significant about the number of recently retired persons of senior rank in the Civil Service who have aligned themselves with the cause of curtailing secrecy. The panel of advisers to the 1984 Campaign for Freedom of Information, headed by Sir Douglas Wass (already referred to by the noble Lord, Lord Harris) includes no fewer than four onetime permanent secretaries and two under-secretaries.
Their concern for freedom of information is no doubt based on the absence of freedom of information that has applied in recent years. Yes, there have been an incredible number of leaks in recent times, and I am not here to argue in favour of those leaks at all. But the more a Government keeps their information secret, the more likely it is that information will be leaked. It does not justify the leaking of it, but it does partly explain it. I think that this Government have to take some lessons from precisely that.
Of course, there is more to it than mere leaking or than mere security. I believe the central issue is what I consider to be the traditional partnership between Ministers and civil servants. I thought that the noble Lord, Lord Bancroft, described that quite admirably. In my view (and I was a Minister for 11 years) the partnership is an essential part of the role of not only the Minister, but also the civil servant; and the Minister who does not ask for advice from his civil servants, but says simply, "This is what I have decided to do, do it" and then expects dogged loyalty is asking
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for trouble. It is the job of a civil servant to indicate not only the range of options that a Minister has, but also the pitfalls that lie before him if he takes certain courses of action. In the end it is the Minister who must decide and it is the civil servants who have the responsibility of carrying out the decision. But once Ministers ignore the process of consultation, take their civil servants for granted, expect them to do what they are told without there having been a fair and proper method of consultation, there will be a sense of grievance, a sense of concern, a feeling among civil servants that their role has been underrated and sometimes denigrated—as I believe has happened in statements that have been made from time to time.
Senior civil servants are not paid only to implement Ministers' diktats, as I have said. I do not believe that civil servants have failed to point out, for example, the problems implicit in the decision to abolish the GLC. No one could imagine that the civil servants did not say to the responsible Minister, the Secretary of State for the Environment, what traps there were not only in the Bill which is now before another place and which will come before your Lordships' House, but also in the paving Bill. I am sure they indicated the dangers, and the Minister chose to ignore those dangers. I am sure that advice was given to the Secretary of State for Education as to the dangers inherent in the decision he announced only 10 days or so ago about student grants. He was forced to make a new Statement today because he had ignored the advice that had been proffered to him.
Ministers must be prepared to listen to civil servants if they expect the total loyalty of the Civil Service to which they are entitled. I believe that Ministers who do not see this basis of partnership display an arrogance. At the same time they sometimes display an obvious disdain of Civil Service advice, which is very damaging to this relationship which I believe has developed over the years and which is a very important part of our national life and our system of government.
It was said by the noble Lord, Lord Allen of Abbeydale, that there are a significant number of senior and middle-rank up-and-coming civil servants who are leaving the service. Some of them are leaving because of a sense of dissatisfaction; that means a lack of job satisfaction. I can give many examples of the past two or three years, though I shall not do so. But too often, of course, it is the most able civil servants who take the decision to leave. It is therefore the less able who are left in the Civil Service, unable perhaps to see for themselves the job opportunities in the private sector that are seen by those who, in a sense, take the plunge. Why are civil servants voting with their feet—
A noble Lord: They are not.
Lord Ennals: Well, my Lords, they are; they are.
The Earl of Gowrie: My Lords, the noble Lord has made a series of allegations without a shred of evidence whatsoever, and I really think he should start, even if he delays the House, to give chapter and verse for some of these most astonishing statements.
Lord Ennals: My Lords, I do not know what statements I have made might be called astonishing,

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but I shall now quote, since the noble Earl has asked me to do so. There is a former civil servant who now works for an industrial company. He said that he did not want to give his name; why should he give his name? He said that increasingly now officials are not expected to have a view or to give advice to Ministers. He said:
"They are merely expected to take orders. No civil servant objects if a Minister listens to his advice and then rejects it. That is a Minister's right and you accept before you join that it is not your job to make that final decision."
A statement was made by someone who did identify herself; a lady called Jenny Page, who was involved with the privatisation of Britoil and with the selling of some British Rail subsidiaries during her Civil Service career, as well as having been seconded to a post in connection with the London Dockland development. She made a statement which was very similar to the one which I have quoted. May I just finish, and then of course I shall give way to the Minister. He knows that there have been a significant number of such cases. We will not say that it is a massive number. The question is: what is going to happen in the future? My submission is that if more and more first-rate officials leave because they are worried about promotion prospects or, perhaps more importantly, because their jobs do not give them enough responsibility and satisfaction, then we will finish up with a Civil Service the quality of which will be lower than it is at the present time. Yes, of course I will give way to the Minister.
The Earl of Gowrie: My Lords, a number of speakers during the debate have made the point that it is a thoroughly good thing that people should go in and out of the Civil Service and into other activities in the economy. Personally I would seek to encourage that. The noble Lord is drawing heavily from one piece in the Financial Times, and it really will not do to make these very generalised allegations from three or four individuals, two of whom will not give their names.
Lord Ennals: My Lords, it has also been said in this House by noble Lords who have given names that the number of those who are coming forward to join the Civil Service and who see this as a prospect for them of a rewarding career is significantly decreasing—
Lord Windlesham: My point, if the noble Lord had followed me closely, was the opposite. The numbers applying are extremely large. It is the number of applicants who are being selected which falls short of the total number of vacancies in certain grades.
Lord Ennals: My Lords, be that as it may, it is clear that those who are now in the Civil Service are, by one means or another, expressing concern. When the noble Lord, Lord Allen, who, after all, has had a lifetime of public service—if the noble Lord wants to write me off, let him do it, but he will not write off the noble Lord, Lord Allen, whose experience is far greater than mine and whose knowledge, and I would say wisdom, too, is greater than mine.
My final point has been raised in his usual pungent style—not in this debate—by the noble and learned Lord, Lord Scarman, who was perfectly prepared that he should allow his name to be attached to it because
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he made a statement about the concern he felt about the allegiance of civil servants to the Government. He asked a series of questions. These are questions which I think Ministers must ask. One noble Lord asked, "What do they do with a civil servant who gives false information to a Minister?" That is a good question. I suppose, sack him. The reverse question is asked, "What does a civil servant do when he is required to put into a parliamentary statement information that he knows is incorrect?" What does he do? This was the question that the noble and learned Lord, Lord Scarman, was asking. He was saying, "Is the responsibility just to the Minister? Is the responsibility of a civil servant in any way to Parliament; is it to the country?" I am not arguing that one can say what "the country" is, or what "the public interest" is; but civil servants are asking these questions. I know this perfectly well because I meet civil servants frequently and they are asking precisely these questions. They are asking these questions in a way which was never, in my knowledge, done before. They are asking what they should do if they are required to give evidence which they know is not correct. I will not go into the particular case in point because that case is well known to the House.
Civil servants are facing a dilemma. They are facing uncertainty. I will not say that they are facing crisis; that would be a gross overstatement. They are facing a serious dilemma. The noble Lord, Lord Allen, himself said that the numbers involved are still moderately small. The question we ask is, "What is going to be the future?" This is why I say that the Government need to make a concentrated effort to regain the confidence of the Civil Service in themselves as Ministers.
I believe that the prime responsibility lies on the Minister who is principally responsible for the Civil Service—that, of course, is the Prime Minister herself. I believe that she and her Government have a very important responsibility to try to undo some of the damage, as I believe it to be, that has been done between Ministers and civil servants. If it is not done we shall not find ourselves with an efficient Civil Service. We might find ourselves with a Civil Service that is less dedicated than today's. The situation could get worse rather than better.
Lord Campbell of Alloway: My Lords, I apologise for intervening but this is a matter of some importance. Leaving aside anything that is subjudice, has the noble Lord any evidence to support his assertion that some Ministers of the Crown has asked a civil servant to do something or write something which he knows to be false? If so, will the noble Lord say what it is?
Lord Ennals: My Lords, I will not mention names; I will mention the situation, which of course I did not intend to do but the noble Lord has asked me. The Prime Minister made it perfectly clear that statements were made in another place concerning the sinking of the "Belgrano" which were known to be untrue.
Noble Lords: Oh!
Lord Ennals: My Lords, I did not raise that myself. The noble Lord, Lord Campbell, asked me to give an

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example and I have given an example, which he will know because he has readlhe reports as well as I.
As we well know, senior civil servants are now talking about—they were discussing it at the conference which the noble and learned Lord, Lord Scarman, was opening—a code of ethics for senior civil servants. I think that this may be very important. But in my view there is an even more urgent need for a code of ethics for Ministers in handling a service of which the nation has always had a reason to be proud and of which I hope it will always have a reason to be proud.
8.55 p.m.
The Earl of Gowrie: My Lords, I imagine it is almost a duty of the speaker who winds up for the Opposition, after a debate which has been excellent but nevertheless quite long, to try to jazz things up a little. The noble Lord, Lord Ennals, certainly did that. I imagine that most of the House enjoyed his speech. I must confess to a slight irritation because it seems to me that he produced little evidence—one piece from the Financial Times—the by now extremely stale and I would dare to say barely controversial issue of the "Belgrano" affair—on which to build a great superstructure of accusation about the relationships between government and civil servants.
I can only give my own experience. I cannot of course speak for the Labour Government; but like others I have read articles and diaries and I certainly endorse some of the remarks of the noble Lord, Lord Harris of Greenwich. I was a very junior Member of the Government of Mr. Heath. Although a very junior Member, I worked very closely with a very senior Member—no less a person than my noble friend the present Leader of this House, when he was Secretary of State for Employment during the miners' strike. I saw the workings of a major department of state during a very exciting and deeply contentious period—the period which ultimately led to the coming to office of the Government of which the noble Lord, Lord Ennals, was a distinguished Member. I have been a fairly senior Minister throughout the life of this Government at Minister of State level, and a very junior Minister at Cabinet level. My experience is that the relations between the Government and civil servants were not very different in the two cases. There were some general phenomena of change. I thought that the noble Lord, Lord Harris—although I was far from agreeing with everything he said—put his finger on the fact that a great deal has taken place in the past 10 years, and that the Civil Service, Government, Ministers, Parliament, Oppositions, unions, whether militant or unmilitant, have all in varying degrees been affected by the changes. I would not expect the Civil Service to be immune from those changes. But I do not think that the central issue of relationships between Ministers and civil servants, which in this context overwhelmingly means senior civil servants—senior management in Whitehall—have changed at all, and it seems to me that these relations are very good.
We have had a long debate and I do not think that I would be very popular in the Civil Service, let alone with your Lordships' House, if I had a second bite at a Second Reading speech. I am simply going to whistle
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through at great speed the specific points that have been made. My noble friend Lord Boyd-Carpenter—and I endorse all the congratulations to him on attracting a splendid list of experienced speakers—asked me about no-strike agreements. It would be difficult, as the Megaw Report pointed out, to conclude a "no industrial action agreement" at a price acceptable to all parties including the tax-payer, but that may be considered further in the light of whatever long-term pay agreements may emerge from discussions with the Council of Civil Service unions. I shall have a word or two to say about those long-term pay agreements in just a moment.
On my noble friend's question about raising the age of retirement, 60 has been the usual age of retirement of civil servants for more than 100 years, although many staff in the lower grades, notably among industrial staff, stay until the age of 65. Given the recent reductions in the size of the Civil Service and the current climate of unemployment, I do not think it would be right to block opportunities for those coming in or indeed the promotion prospects of our able and talented younger staff in the Civil Service, which are already difficult as many noble Lords have said. Therefore as Minister I must say that I should like to try and establish 60 as a very general retiring age.
The noble Lord, Lord Barnett, made an elegant and relatively—by contrast with his noble friend who, as I said, is to some degree paid to raise the temperature at this late hour—
Lord Ennals: Not paid, my Lords.
The Earl of Gowrie: Well, my Lords, he is encouraged to do so, and not least by me, because I enjoy a knock-about parliamentary debate. In a characteristically restrained and elegant speech the noble Lord, Lord Barnett, itemised some of the issues raised about morale to which I shall refer at the end of my speech. Before doing so, I pay tribute to the noble Lord, Lord Barnett, as the founding father of cash limits—would that his progeny paid rather more heed to him, as he will note we do.
Mention was made of the Prime Minister and the influences on her or her influences on other people. I once asked the Prime Minister if she had read the book, Inside the Treasury by the noble Lord, Lord Barnett. She said that she kept it by her bedside. Many of my right honourable friend's ideas about the Civil Service no doubt stem from the things uncovered by the noble Lord.
On a serious note, Labour's programmes, whatever we on this side of the House think of them, will certainly be expensive—even more expensive than our expensive programmes. There is little evidence that the electorate will easily be persuaded to will the means at their own expense to pay for increases in public provision. I therefore argue that Labour will have an equally urgent—logically a rather more urgent—need to cut Civil Service costs and to emphasise value for money, as we do. It was a remarkable feature of the last election that the public—I think almost for the first time since the war—displayed a doorstep interest in costing political programmes. It was the Labour Party which paid the price. My argument here is that all administrations and potential administrations therefore have to take a

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great interest in reducing central Government costs and providing value for money, as I have argued.
The noble Lord, Lord Rochester, asked for confirmation of his figures on the administration of trainee recruitment. As he said, the recruitment figures for trainees in 1982 were disappointing: 24 appointments were made when 44 vacancies had been declared. The situation has improved in the past two years, as my noble friend Lord Windlesham acknowledged in a very interesting speech. In 1983, 60 vacancies were declared and 46 applicants took up duties. This year, 66 vacancies were declared and 58 have taken up duty. As I said in my opening remarks, the Civil Service continues to offer a thoroughly worthwhile, interesting and rewarding career for our most able graduates. I shall most certainly look carefully at the sensible observations of my noble friend Lord Windlesham on whether we have been too rigorously selective in the present climate. Obviously we want to keep up the high quality to which successive noble Lords have paid tribute tonight; but I shall consider his point.
The noble Lord, Lord Rochester, talked about recruitment and retention of key staff and this was echoed again in a notable speech by the noble Lord, Lord Allen. In recent years the Civil Service has generally been successful in recruiting and retaining the staff it needs in both numbers and quality, except perhaps for those specialist skills where there is a national shortage. Where national shortages are reflected in the Civil Service, the law of the market applies to some degree to the considerations in the noble Lord's mind of pay issues. These shortage areas are electrical and electronic engineers, the oil industry, communications advanced data processing specialists as well as in the more traditional areas such as accountancy and the legal profession. These difficulties are exacerbated in some geographical locations; especially in London and in what is now known rather inelegantly as the M.4 corridor. The kind of disquiet which the noble Lord, Lord Ennals, mentioned, and which he based on one article in the Financial Times, would better be laid at the door of those market phenomena rather than on any great discontent among civil servants generally.
The noble Lord, Lord Rochester, again echoed by the noble Lord, Lord Allen, did not shirk the issue of pay, and nor must I. The 1984 pay negotiations are now over. The Government believe that the awards were both fair and reasonable to all concerned. It is of course too early to talk about next year's negotiations. The 3 per cent. pay assumption for 1985–86 which was announced on 12th November is a global planning assumption. It is not a norm, nor will it predetermine the level of individual settlements and variations within settlements. Civil Service pay settlements have in each year since 1980–81 been higher than the pay assumption. In these days when we are all anxious about unemployment we must bear in mind the relationship of our public sector costs to high levels of unemployment. So, the Government are hopeful of reaching a responsible and sensible negotiated settlement.
I was very interested, like everyone else in the Chamber, in the speech of the noble Lord, Lord
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Bancroft. May I say to him even in his absence that future arrangements for settling pay are, of course, under discussion with both the industrial and non-industrial unions. I note what he said about arbitration but I must also note that successive governments have consistently reserved the right, on policy grounds, to refuse to go to arbitration. The structure offered by the noble Lord, Lord Bancroft, for our consideration—and I shall consider it most carefully—allowed that that would be the case. But as we know, successive Governments run into counter-inflationary priorities and it would certainly sour relations with the arbitrating body or with the unions if these considerations were allowed to over-ride too often. That is why I still believe that direct negotiation between employers and employees on the basis of what employers can afford is the best method.
The noble Lord, Lord Hunt of Tanworth, referred to freedom of information, leaks and loyalty; and many other speakers have also dealt with those aspects. I certainly welcome and thoroughly endorse the statement made with all his authority by the noble Lord, Lord Hunt, when he said that "civil servants can only operate within the policies established by Ministers". I agree with that.
A fair amount of nonsense is talked about the so-called secrecy of British Government. Yes, we have an Official Secrets Act and it is, as most people agree, not wholly a satisfactory piece of legislation. However, the Official Secrets Act simply prevents the unauthorised disclosure of Government information. What it demonstrably does not do is put a cloak of secrecy around the daily workings of government. You have only to read the reports of the proceedings of this House or of our Select Committees, or the reports of the new departmental Select Committees of the other place, or even the daily newspapers, to see that there is a vast quantity of information available about what is happening in government; certainly as much as you will find in other Western democracies. As one who hails from another Western democracy—the Republic of Ireland—who has lived and worked in America for many years and who is married to someone who comes from Germany, I would say that we beat all those countries hollow on this issue.
Lord Harris of Greenwich: My Lords, by way of a question on that, is the noble Earl maintaining that, in fact, the amount of information available from official sources in this country is as great as it is in Washington? Is that his argument, or am I misunderstanding?
The Earl of Gowrie: No, my Lords. What I am maintaining is that the amount of information available generally to interested people in this country is greater than anywhere else that I have ever lived. I myself learn a great deal of what is going on in central government by reading the newspapers and watching the television, despite having access to Government papers. Of course, one cannot release every single bit of Government information, and no Government could work if they did. Freedom of information, if I may very respectfully say so, is something that Oppositions are immensely keen on but tend to backtrack on a little when they come into office.
Certainly, we could do things differently. We could have a statutory right to information on the lines of some other countries. But I must say that I doubt

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whether a statutory system—which would have to be enforced by the courts or by some other body outside Parliament—would fit our parliamentary democracy as well as the present system, in which Ministers have to make information available to Parliament and are accountable for so doing and for their decisions.
I do not think I will go into the issue of leaks, because the last word on that seemed to me to be said by the noble Lord, Lord Hunt of Tanworth, and I have quoted him already. I must say, however, that if a civil servant should feel a clash of conscience in relation to what his or her Minister is requiring them to do—and I know of no reason why any should—then before he goes to the Guardian it would be only a prudent measure, I would have thought, to consult his Permanent Secretary. There are all sorts of ways in which these issues could be raised.
The next question, of GCHQ, I do not think is something which I should resurrect at this late hour, particularly because we have now had a unanimous judgment in favour of the Government from the highest court in the land saying that the revised terms and conditions of service introduced at GCHQ are valid. The Government hope that the work at GCHQ, which is vital to national security, will now be allowed to continue without further distraction. I must say that I found myself agreeing with much of the trenchant speech of my noble friend Lord Campbell of Alloway. In general, I have to say that I doubt whether Civil Service trades unions are in every respect as representative of their members in this as in many other issues.
The noble Lord, Lord Bancroft, and my noble friend Lord Gridley deplored the new militancy in some unions in the most measured terms. I can assure both noble Lords that we will resist the demands of militancy in this and other fields with all the power available to us. In respect of militancy, I am thinking particularly, of course, of the dispute at the Newcastle Central Office, which has been raised. Your Lordships will know that the strike is affecting the payment of pensions as well as child benefit and national insurance. Contingency arrangements to minimise the effect of the strike on individuals and families and to prevent hardship are working well, and provide for payments to be made as nearly as possible in the normal way. I am pleased to tell your Lordships that, thanks to a great deal of effort by DHSS staff, the increased pension rates and the Christmas bonus will be paid on time. As I say, we have to hit militancy hard wherever we find it.
My noble friend Lord Beloff, who has given a great deal of thought to this issue over the years and has been very influential, I think, in forming opinion, talked about secondments and outside experience. I am glad and proud to be able to say that my admirable principal private secretary is a graduate of a course, if not of the full treatment, of the ENA that my noble friend Lord Soames mentioned in his remarkable speech. I, myself, hope very much to have an improving visit to the ENA, outside Paris before too long.
I passionately believe in moving civil servants in and out, and attachments with industry and commerce, and in much of what my noble friend Lord Soames said about the political culture of this country,
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including the culture of the permanent level of government and industrial culture; his points were well taken, and we shall do what we can to improve the situation.
The Civil Service is certainly anxious to learn from overseas practice and has a number of exchanges with other countries, including France. I am sharply aware of those because the only time that I am allowed to indulge in what Mr. Dennis Skinner calls, "Snout-in-the-troughing", and entertain at Lancaster House is when I am giving meals to foreign civil servants; and they come over in great droves. No doubt that reflects the quality of government hospitality.
My noble friend Lord Beloff asked about the college. Although in 1983–84 the Civil Service College mounted some 1,100 courses which 22,000 or so people attended, it must be remembered that it provides only about 5 per cent. of all Civil Service training. Most training is undertaken by departments themselves. However, the Civil Service also very much appreciates the value and necessity of external training and of sharing the experience and knowledge of managers outside the Civil Service. For example, external training in business schools now accounts for 20 per cent. of total training and is growing in importance. I am sure that most noble Lords will welcome that. We greatly value the cross-fertilisation with commercial and industrial experience that that provides. I take every opportunity that I can to visit the Civil Service College.
In the last minute or so of my speech—without wishing to raise the temperature too much, I have to say to the noble Lord, Lord Harris of Greenwich, that what he said about one of us is, I think, a terrible insult not simply to Ministers but to the present head of the home Civil Service. I know the present head of the home Civil Service very well and so do many noble Lords who have taken part in this debate, I am sure that they would echo my saying that he would not stand for such a thing for a moment.
The noble Lord, Lord Harris, asked me about the announcement which was made today about performance-related pay or performance bonuses. We think it right to introduce with effect from April 1985 an experimental scheme—and I stress that this is a pilot and experimental scheme—under which staff graded between grade 3 (which used to be called under-secretary) and principal and equivalent grades will have the opportunity to earn a bonus for particularly good performance. The experiment will last for three years and its operation will be very carefully monitored. A total of £4 million is being made available to fund that initial experimental scheme in each of the three years.
This will not come—if I could say this directly to the noble Lord, Lord Harris, and to the House—from existing provision for Civil Service pay and related expenditure. It will be additional to existing departmental allocations and will be met from within planned public expenditure totals overall. The Government will enter into immediate consultations with the Civil Service unions. They are also prepared to enter into discussions with the unions about the possibility of conducting further experiments at other grading levels. The method, timing and finances for such further experiments would all be for future

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decisions, but any schemes identified and approved will be introduced as soon as is practical.
I believe that the steps now announced will provide a basis on which the value and operation of performance-related pay can be tested. This will enable decisions to be taken in the light of the experience gained as to any long-term arrangements. Finally on this point, I hope that I can satisfy the noble Lord, Lord Harris of Greenwich, and the House by saying that Ministers will have no say whatsoever in who gets the performance bonuses. That will be a matter for the heads of departments.
Again, may I remind the noble Lord, Lord Harris, and the noble Lord, Lord Ennals, that in my opening remarks I commented on the success that we have had in reducing the size of the Civil Service over the past five years. I suggested that this would be at least as important to an incoming Labour or other Administration as to ourselves. But these reductions have been made—and I stress this most strongly—by improving efficiency (about 55 per cent.); by dropping or materially curtailing functions (about 20 per cent.); by privatisation, including contracting-out (about 10 per cent.); and by hiving off to new and existing public sector bodies (about 2 per cent.).
I have had a good go in both my opening speech and at Question Time about the drugs issue. I take it very seriously indeed, perhaps more seriously personally than even the noble Lord, Lord Harris, and the House are aware, as I have had some family experience of this. In fact, the number of specialist drug investigator complemented posts has been increased by some 75 per cent. The noble Lord, Lord Harris, whose sincerity and concern on this issue is well known, as I hope is mine, must recognise that a complete disruption of the present flow of people through our airports—the green and red channel system—would still be a very serious change indeed. But I will, of course, keep the situation carefully under review.
My last point is the substantive point of the debate. Nearly everyone has talked about morale in the Civil Service. There were remarkable speeches from the noble Lord, Lord Shackleton, my noble friend Lord Soames and others who have had longer experience than I, as I fully recognise, in ministerial roles in this field, as well as from those who have had very great experience—and again congratulations to my noble friend for attracting them—at official level.
Concentration upon crisis news in the press of course distorts public perception of work and morale in the Civil Service. The quiet, effective and efficient delivery of services to the public is, I believe, a more typical but often overlooked picture of the service. We do have an enormous number of talented and highly trained managers in the Civil Service. This Government have done a great deal to recognise and promote the value of their contribution.
However, the Civil Service is in the middle of probably the most profound change for a century. Its chief Minister, the Prime Minister, is not interested in what a former head of the Civil Service, the late Lord Armstrong called, in a chilling phrase, "The orderly management of decline". We are engaged in reversing decline and that does mean hitting institutions of all kinds—and not just with a handbag—I think this point
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was recognised in an interesting speech by the noble Lord, Lord Lindsay. So it is not surprising that civil servants from time to time feel uncertain, vexed or upset by these changes, so that morale may sometimes seem low and grumbling at a premium.
Nevertheless, the Civil Service is well on course to being an organisation which, while retaining the old virtues of dedication and freedom from bias and corruption, is also demonstrably modern and efficient and demonstrably engaged in itself arresting the decline of our place in the world. I, for one, have no fears for its commitment to doing so and, therefore, for its overall morale.
9.21 p.m.
Lord Boyd-Carpenter: My Lords, as several noble Lords have observed, this has been a remarkable and a memorable debate. It has also been yet another example of the fact that in this House, on almost any subject you care to choose, we are able to find Members who speak with the authority of long, practical experience. The contributions which we have had to this debate and to the discussion of this problem, particularly from those distinguished former heads of the Civil Service, have been, I have found, of remarkable interest and value. Until we reached the winding-up speeches, it was a debate, too, which was wholly free—and I have sat through it all—of any party acrimony at all. In regard to my noble friend's reference to the noble Lord, Lord Ennals, jazzing-up the debate, I should only remind both noble Lords that jazz is now very much out of date.
I was a little startled by my noble friend Lord Soames telling us that this is the first time this House has debated the Civil Service for 16 years. Several noble Lords have said that the Civil Service feels there may be a lack of concern for it and its interests in many quarters. Therefore, I hope I may be allowed to express the hope that the next debate on this subject may be after a considerably shorter interval. The comparison of the care with which this House and another place consider the position and interests of the armed forces is perhaps a little sharp if one allows intervals of this kind to develop.
The debate has also been remarkable for my noble friend's announcement of this quite remarkable new development of performance-related pay. Experiment though it may be, I think it is an experiment of very great interest and, if I may say so, a very bold and interesting innovation to which I personally should like to wish the best of good fortune.
The only other thing I should like to say before I formally withdraw the Motion is this. Again, picking up a remark of the noble Lord, Lord Ennals, he referred to the lightness of a partnership between Ministers and civil servants. If your Lordships will allow me to drop into anecdotage, I have a personal recollection which precisely fills that bill.
In the days when I was a Minister of so-called Cabinet rank—which, as noble Lords know, means not a member of the Cabinet but attending the Cabinet for one's own business—many years ago, I attended a Cabinet on departmental business of my own. The then Prime Minister was not very interested in social security, which was the business, and the discussion

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was desultory and indecisive. As I went out—as one had to at that stage of one's life and position, having finished one's own business—I was stopped by the Deputy Secretary of the Cabinet, who is now the noble Lord, Lord Trend, and Rector of Lincoln College, Oxford, whom I knew, and I said to him, "Burke, have I won?" He looked at me with a smile and said, "No, I don't think you have. But when you see the minutes it will be all right". And it was. I hope that this is the kind of partnership that the noble Lord, Lord Ennals, was advocating.
Without more ado, I beg leave to withdraw the Motion—particularly a Motion on this subject, which, if not withdrawn, might result in a considerable avalanche of documentation falling on my innocent head.
Motion for Papers, by leave, withdrawn.

Waste Material Reclamation
9.25 p.m.
Lord Irving of Dartford Lord Irving of Dartford rose to ask Her Majesty's Government whether they will establish schemes to encourage the reclamation of all kinds of waste material, and to ensure the recycling of as much reclaimed material as possible, in order to reduce imports, save money and preserve the environment.
The noble Lord said: My Lords, I am sorry we have had to wait for such a long time. I have no doubt, however, that the debate that kept us waiting was a very worthwhile debate. I hope that noble Lords will not believe that the lateness of the hour diminishes the importance of the matter that we are about to discuss. I think I should make two declarations of interest impinging on this particular theme before I start my speech. One is that I am a member of a local authority where most of the action will have to take place if we succeed in getting what I am asking for and what I hope the House will ask for tonight. Secondly, I declare an interest in having a very long association with the paper industry.
The Government Green Paper of 1974 said:
"The Government believes there should be a national effort to conserve and reclaim scarce resources—a war on waste involving all sections of the community. We all feel instinctively that there should be something wrong in a society which wastes and discards resources on the scale we do today".
It is clear that this subject has a moral as well as an economic dimension. Indeed, it is broader even than this, as it is concerned not just with the preservation of scarce resources but with the preservation of the environment, with the vital question of import substitution and our balance of payments, with financial and energy savings, and with our EEC obligations. Properly organised, the Taunton Think Tank, which has done a great deal of work on this subject, believes that, with the use of reclamation teams and central depots, some 100 people in each district or borough could be employed on this work, many of them between 17 and 25 and at present without work. This would mean a net gain of something like 25,250 jobs. Already a number of schemes involving local councils, charities and the Friends of the Earth are being funded by the youth opportunities and the community programmes.
But despite the brave words of the Government Green Paper, there has been no national effort. The Think Tank says that between 1974 and 1979 less than 1 per cent. of solid waste was reclaimed. Recent years have produced increasing glass recovery but a decline in the amount of paper and textiles recovered. By 1981 we had reached 1 per cent. Although figures are hard to get, we think that it may be about 1½ per cent. at the moment. Each year in the United Kingdom around 20 million tonnes of household waste is collected, transported and disposed of at a cost of approximately £700 million, 55 to 60 per cent. by weight and 75 to 80 per cent. by volume consisting of recyclable materials such as glass, plastics, metals, paper, cardboard and textiles. They are worth at least £200 million at current prices, although, of course, in this equation, there would have to be some infrastructure costs, before we could achieve that sum of money.
Industrial society is dependent upon finite basic resources which should be conserved for future generations. We cannot go on for ever cutting down trees for wood pulp. In other fields, by creating acid rain we produce a direct threat to the supply of such raw materials. Most materials and the waste with which they are mixed are buried in "landfill" sites. Land suitable for this purpose is becoming increasingly scarce and expensive. There is a movement through some districts like Dartford of more than 1,000 trips a day. To give your Lordships an idea of the scale I can say that at certain times of the day vehicles are passing any given point at the rate of at least one a minute, and sometimes more. This is an increasing nuisance to people living on these routes and they are, I believe, entitled to some relief.
In regard to glass recycling, the United Kingdom recycles less than any other European country—only 5 per cent. In 1982 less than 1 per cent. of the United Kingdom's aluminium cans were recovered. In value terms, it costs an average of £33.57 to collect, transport and dispose of each ton of household waste. This is from the data published by the Chartered Institute of Public Finance and Accountancy, relating to the year 1981–82. It is therefore possible to calculate in the most general way when it is economic to recover and recycle. Many materials are worth many times more than this as recoverable and recyclable waste.
I should like to say a few words about paper. Since 1977, 1.8 million tonnes of waste paper has been consumed annually in the United Kingdom's mills, and currently 57 per cent. of total fibre input—some 200,000 tonnes—is exported. Utilisation of secondary fibre at this level makes if difficult to achieve spectacular increases in usage. There are, however, other uses for waste paper in the United Kingdom, including shredding for animal bedding, and later for use as fertiliser, as insulation materal, as building board and for moulded products. This use alone is estimated to be in the area of 100,000 tonnes per annum.
While wishing to operate in the free market—and the paper industry seldom asks for subsidies—the industry believes that the Government should encourage the use of recycled fibres, first of all by encouraging purchasing bodies to review specifications

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and use more waste-based products; by allowing industry to operate in a free market situation, including exports; by encouraging local authorities to charge economic rates for the collection of refuse from commercial premises; by encouraging the separation of waste to facilitate recovery; by encouraging and aiding education; by assisting with public relations and publicity; by committing themselves fully and positively to a reclamation and recycling programme on a national bases, with the first priority being the formation of a dedicated cell or department or Ministry; by encouraging greater local authority involvement with the private sector—and I shall say something more about this later on; and, finally, by promoting and monitoring research and development in this industry.
It ought to be realised about paper that one tonne of it used as secondary fibre saves up to three cubic metres of wood. As that represents 15 medium-sized trees the ecological significance of paper recovery is obvious. The recycling of paper as a substitute for virgin materials halves the energy requirement and eliminates the air and water pollution associated with pulp processing. The British Waste Paper Association have urged the Government to implement Section 12 of the Control of Pollution Act 1974, requiring them to make an economic charge for refuse collected from commercial and industrial premises. I am conscious that any additional increase in charges will be regarded as an increase in industrial costs. However, as the purpose is to encourage the separation of materials, with the co-operation of industry, in my view this could be achieved by concessions for such separation before the materials are removed from their premises.
Considerable savings in energy can be achieved in the glass industry by the recycling of waste glass, known as cullet. Glass represents 9 per cent. by weight of all domestic refuse in the United Kingdom and the energy saving that could be achieved by involving the public is great. In 1977 the Glass Manufacturers' Federation introduced a bottle-bank scheme, and many noble Lords will have seen it in operation. There are containers, conveniently placed, where people deposit their used bottles, and it is part of my weekly routine to take my own bottles to the bottle bank, to set an example to others. I am glad to say that an increasing number of people are doing the same.
Lord Graham of Edmonton: My Lords, who takes the cans back?
Lord Irving of Dartford: My Lords, the collection, treatment and delivery of cullet requires 78 per cent. less energy per tonne than the equivalent virgin raw materials. This is equivalent to 30 gallons of oil per tonne of cullet. In fact, 250,000 tonnes of this would reduce the demand for raw materials by 300,000 tonnes. The principal ingredients are sand and limestone, which in the United Kingdom are often quarried in environmentally sensitive areas. The number of bottle-bank schemes has increased from four in 1977 to something like 300 in 1984, and the number of sites has risen from 17 to the best part of 2,000.
In 1981 the United Kingdom recycled less than any other European country—5 per cent. The others all
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managed at least 20 per cent., except for Ireland and Denmark. Holland recycled 41 per cent. and Switzerland, which has made much progress since then, was second with 36 per cent. The United Kingdom glass recovery target for 1984 is 250,000 tonnes—only a 12.5 per cent. increase on the 1981 target, which is some indication of the little extent to which we are moving to bigger targets.
In certain cases where the collection authorities are operating the bottle-banks, the disposal authorities recognised the saving through a rebate of a fixed amount per tonne of the glass recycled. Although the industry instigated the scheme and has recycling plants built to clear as much of the glass as can be supplied, increased public participation must be promoted by local authorities. In Spain, (to give some idea of what some other countries are doing) the Spanish glass container producers launched a five-year scheme in 1982 with a target of 30 per cent. of national glass consumption by the end of that period.
As regards metals, probably the greatest savings in the consumption of energy can be achieved by using reclaimed metals. It takes at least three times as much energy to convert iron ore into steel as is needed to convert ferrous scrap into equally good steel. Almost half the steel produced in the United Kingdom is made from scrap. The biggest deterrent is the price, which is 20–30 per cent. higher in this country than it is in other European countries.
Recession has dramatically reduced the demand for iron and steel, and many plants have been closed. Demand has fallen from 8·8 million tonnes in 1979 to four million tonnes in 1983. However, British exporters face big disadvantages because of the inadequacy of port facilities. Both equipment and working practices are alleged to be out of date. In Rotterdam, scrap can be loaded into ships at roughly twice the rate as that which can be achieved in British ports. In the case of non-ferrous metals, the benefits of recycling are even more marked. The recycling of aluminium scrap saves 90 per cent. of the energy used in producing aluminium from bauxite. This is an enormous saving. The energy saving in the case of copper is even more startling. To produce wire bar from grade 1 copper scrap demands only 3·2 per cent. of the energy required to convert virgin ore into metal.
Although high values should be very attractice, large quantities are lost because of the difficulty experienced in reclaiming them from domestic waste. As virtually all non-ferrous metals used in the United Kingdom are imported, the effect on the balance of payments is obvious. Whereas almost 45 per cent. of current lead requirements come from recycled materials, this proportion is even higher in the United Kingdom, currently around 60 per cent. This is one of the highest recovery levels in the world for any industrial metal. It represented 185,000 tonnes in 1983, and had it not been recovered the cost to industry to import it would have been £50 million. So vital is lead that we ought not to be wasting any at all, because none of it is mined in Britain.
I turn to plastics. The plastics which reach the consumer amount to something like 485,000 tonnes, but post-consumer recycling schemes are limited because the plastics arise in small quantities (about 5 per cent. by weight) in the dustbin, and the polymer

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types are mixed. There are about 30 different types of plastic in daily use, which are very difficult to identify from each other and, if mixed, cannot be efficiently recycled. The British Plastics Federation's view is that plastic waste cannot at present be recycled as a commercially viable proposition, even though it is possible to separate the polymers.
However, a few schemes are run by voluntary orgnisations. For example, the Friends of the Earth in Stratford-on-Avon collect polystyrene yoghourt pots, cream tubs and polyethylene film from several points in the town on particular days each month. These are then sold to local recyclers. So an effort can be made by voluntary organisations in this field.
One of the polymers, polyethylene terephthalate, is used for containers that are more easily identifiable than others, and has a relatively high value. In 1981 the British Plastics Frederation launched an experimental scheme called PET-a-BOX to recover plastic bottles. Initial results of the experiment have shown that PET bottles can be identified fairly well, and it is planned to extend the scheme to a total of 10 sites in Bradford and Leeds. If the scheme proves to be economic at the end of its two-year trial period, it will be extended on a national scale.
The Government have on several occasions stated that they encourage industry to act in its own enlightened self-interest, by recycling and reclaiming waste materials where it makes commercial sense to do so. It is a little like saying, "When you do not need any help, we shall be there to help". The most recent comment of this kind was made by Dr. David Trippier, MP, a Minister at the Department of Trade and Industry, at the Metals Society seminar only a couple of months ago.
The paper and other industries recognise that viable schemes for waste disposal must be established and do not look for subsidies. Excess stock schemes for the stabilisation of demand have a poor history here and abroad. Nevertheless, there is a need for a national programme of waste reduction and resource recovery as the only way to ensure that all recoverable resources are put to good use.
Several organisations have called for a national effort. In evidence before the Commons Select Committee on Trade and Industry there is a request for a Minister to head a department of waste instead of the division of responsibilities falling on four different Ministries. BRIC, INCPEN, and other organisations have urged that a properly co-ordinated effort with a working partnership between industry, local Government, and central Government be established.
A comprehensive investigation into reclamation and recycling projects is needed, first, to identify and define realisable targets for improving utilisation of waste in each community; secondly, to define the role of each of the major participants in waste management, including the role of Government, manufacturing industry, local authorities, the reclamation and recycling industries, and of waste disposal contractors; thirdly, to consider the overall structure and, where necessary, the legislative framework to achieve effective co-ordination;
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fourthly, to assess the areas of research needed to promote the use of wastes in existing and new products and the development of the funding required to take these products to market; fifthly, to create markets for the materials recovered and develop recycling technologies; and, finally, to boost the fiscal incentives for the use of secondary materials.
However, the Department of Energy has made a large effort on waste-derived fuels. It has spent over £500,000 on research and development and has committed a further £4.5 million to demonstration projects. We in this country are also co-operating with the United States on research and development with the use of wastes and fuels under the bilateral memorandum of understanding signed by the two countries. In this country there are reclamation plants in a number of places—Byker, Doncaster, Westbury, Eastbourne, Witton, Humberside and Manchester. But Governments of both political persuasions have declined to offer incentives to local authorities to overcome the disincentive of potential financial loss as a result of the operation of market forces.
The Association of District Councils' view has been that, without firm safeguards, perhaps allied to some action on capital controls with grants for equipment, the relief of road tax on trailers, disposal authority contributions to collection authorities, with relaxation on bonus schemes, the role of local authorities in waste paper will continue to decline.
We need a proper application of effort to provide imaginative and innovative solutions like the work done, for example, by Mr. Ingemar Bjurenvall in Sweden and England, where he has developed a system which returns to the age-old principle of clearing the straw from the fields along with the grain.
This system saves energy, eliminates waste of natural resources, provides a valuable new material for industry, and solves the vexed question which has troubled this House more than once of straw disposal. Mr. Bjurenvall has shown that straw can be used effectively as a nutrient additive in cattle fodder, and as a fuel for high efficiency industrial boilers. In a demonstration quite recently in England he showed that the logistic problems of the collection and storage of straw can be handled effectively. What is necessary now is encouragement from the Government for research into the technology and funding to secure its adoption in industry. The Report of the Straw Disposal and Utilisation Group, chaired by Lord Belstead, also indicates a number of other uses for straw: for the reinforcement of building materials, insulation and packaging, poultry litter, traffic separation, and as hydro-mulch.
The Commons Select Committee will be reporting tomorrow on its report Wealth of Waste—a fact of which I was unaware when I put down this Unstarred Question, although, as noble Lords will be aware, the proposition has been on the Order Paper for some 18 months. I hope that when the committee reports, as it will tomorrow, the Government will give urgent consideration to creating the national effort we so desperately need. We have everything to play for. I hope that the Government will not lose the opportunity provided by the Select Committee's report to do what is necessary.
9.47 p.m.
Lord Ezra: My Lords, we are all indebted to the noble Lord, Lord Irving of Dartford, for having raised this important Question. In my remarks I should like to complement and support what he has had to say. I should also, as he has done, like to declare an interest in this matter as I am chairman of the Keep Britain Tidy Group and have been involved in all aspects of the problem of litter abatement, waste collection, disposal, recycling, and reclamation. I have mentioned all those words because I believe that this is, and has to be seen as, a comprehensive process. There are many valuable efforts being made at the present time at various stages of the process but it is a comprehensive, continuous process which needs to be encouraged in that form.
The Keep Britain Tidy Group is doing what it can as a largely voluntary organisation with some measure of state support, but its efforts to try to make sure that there is effective litter abatement would be greatly helped if what was previously Section 24 of the Control of Pollution Act 1974 and is now Section 4 of the Litter Act 1983 were brought into effect. Let us face the fact that litter is the unacceptable face of waste. It is part of waste which has gone astray. If we really want to solve this whole problem of dealing effectively with waste we must start there.
This has been attempted by this group by means of what is known as the Community Environment Programme which consists of advising local authorities on how they can systematically bring about an abatement of litter, more effectively collect waste, dispose of it, and use every opportunity for reclamation and recycling. There are many remarkably effective instances of local authorities who have followed this path with vigour and enthusiasm. One that comes immediately to mind is Leeds which for a number of years—I believe it is seven years—has operated the "Save Waste and Prosper" scheme which shows that by a concerted community effort in a local authority area, a great deal of enthusiasm and effective collection of waste which would otherwise not be collected and re-used has been generated. They have added the incentive which has appealed to a number of ratepayers to participate in this; namely, that a large part of the proceeds from this effort go to nominated charities.
There is here a great deal of initiative and enthusiasm to be kindled. Many industrial enterprises have also taken up this subject. The various areas of recycling are well known. The main ones are paper, ferrous metal, non-ferrous metal, textiles and glass. In spite of the efforts which are being made in various parts, whether in local authorities or by industrial and commercial concerns, so far as one can tell the efforts being made here are less effective than those in neighbouring countries on the continent.
Statistics are difficult to come by but glass recovery, as Lord Irving mentioned, in one statistic that has been fairly well established. Whereas here our recovery of glass represents something like 8 per cent. of the total amount of glass in use, in countries such as the
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Netherlands the rate of recovery is as high as 48 per cent. In France, it is over 30 per cent.; in Italy, it is 22 per cent. These are the sorts of comparisons which are factual, so far as one can tell, and which demonstrate that we really could go very much further here in this effort of waste recovery and of making good use of materials which would otherwise be lost.
This is not the only way in which we can make effective use of waste. There is also, as Lord Irving mentioned, the question of incineration and pelletisation; in other words using waste material as an energy source. This has the benefit that a number of non-reclaimable waste materials can be used for this purpose. Here too I must declare an interest because I am chairman of a firm which is working in this field. We believe that there is a long way to go and that we could make a substantial contribution to the energy requirements of this country by further extending the efforts made for incineration at such schemes as the Edmonton scheme or that in the City of Nottingham to use ordinary domestic waste as a source of heat or as a source of electricity generation. In more recent times, there have been successful experiments in converting waste into a transportable solid fuel by pelletising it. It has a lower calorific value than coal; but, on the other hand, it is very consistent, very low in sulphur and other noxious emissions and can be easily handled. Here is another area worthy of development.
I note, as the noble Lord, Lord Irving, has mentioned, that we are soon to receive the report of the Select Committee on Trade and Industry in another place on this whole subject. I have no doubt that it will contain some very positive recommendations about how we can further mobilise the many efforts to achieve much better results in using valuable materials otherwise going to waste—I hope that effective action will be taken in the light of those recommendations.
9.55 p.m.
Baroness Gardner of Parkes: My Lords, often enough in this Chamber your Lordships have heard me say things that were not very nice about the Greater London Council, but on this occasion I intend to speak well about them because I strongly support what they have done and are doing in the reclamation of waste.
In my own constituency I went to the opening of the Barrowell Green recycling depot in September, and I now have the figures of what has been achieved there since then. In that time—it was not all September, but September and October—they have recycled over 47 tonnes of metal, nearly 30 tonnes of paper and cardboard, 7 tonnes of rags, 8 tonnes of glass and 2,300 litres of oil. The value of all those products in that time is £1,683. That does not seem a very large amount, but it is a beginning. That is a new recycling plant, and it is designed in a way that makes it attractive to the public. It is a drive-in, easy-access depot, with self-separation and self-labour so that you put your goods into the containers.

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I understand that in the summer months similar recycling areas, of which there are two others in Enfield—and no doubt the noble Lord, Lord Graham, knows them well—actually get queues of cars waiting to drive in and dispose of large goods which the council do not take away as refuse. I have not seen those places, but I have studied this one carefully. There is ample room to drive in; and it has replaced a former civic amenity site, which was not so spacious or well laid out and which caused a degree of nuisance to local residents living around it. Now the access is so good that there is no trouble caused to residents in the area. A person drives his car in and pulls up in turn at each of the very large skips, which are clearly marked, and people sort their own rubbish, depositing it according to type.
I am told that out of the 33 (as there now are) such recycling centres in Greater London—and there are four more in the pipeline—various pieces of information have been gleaned. One is that it is very easy to educate the public to divide their types of glassware according to colours: the green, the brown and the clear. They have taken that in and started using this very easy and simple system. But when it comes to metals it is much more difficult, as few members of the public stop to think exactly what their container is made of; and, indeed, manufacturers tend to be slightly confusing over this.
There is a most interesting scheme now in operation in London. It started in Barking and is called the Ali-Can scheme. This scheme is encouraged by the Greater London Council although it is actually operated by a private company. That company provide sacks, and then, when there are 30 full sacks, they come and collect them, free. The sacks have to be full of crushed all-aluminium cans, and each sack takes about 200 cans. They will pay approximately one penny per can, or 40p per kilo, for that aluminium, which is then sent to Wales for reprocessing. I am sure that the Welsh Members of your Lordships' House will be pleased to think that work is being sent there. The material is later sold for making new cans.
I saw something of this type in Sydney when I last went there and visited the Royal Sydney Show. There, the grounds of this very large Easter show were free of all aluminium-can litter, because people were being paid to bring back cans. I think only a very small amount was paid for five or 10 cans, but the children, who did not really find enough to do at the show, were busy collecting all the cans as soon as anyone let them fall, or they would even come up to you and ask: "Have you finished your drink? Can I have your can?" Then they were taking them off and selling them; so that the place was kept quite litter free.
This present scheme, of course, will be a great source of fund-raising for charities, parents' associations or schools, and I think it will probably be a great success. It began only in Sepember, so it is still fairly new, but the difficulty arises where a can is made of iron yet topped with aluminium. That can is not useful to the all-aluminium can manufacturers. When the firm
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comes to collect the goods they are tipped into a hopper which passes under a magnet and the magnet will pick out any ferrous metal; thus you will be paid only for the aluminium element. It seems a shame that the manufacturers in the first instance have to mix their metals to an extent where it does complicate the recycling and re-use of the material.
It is a question also of being sure that those who are going to a great deal of trouble to raise funds in these good ways for charities do not find themselves suddenly left with hundreds of bags of aluminium cans. I certainly remember clearly when this happened with waste paper. Near my surgery there was a vast warehouse. Everyone was encouraged to deliver their waste paper to the warehouse and it was sold for recycling for the benefit of nearby hospitals and other good institutions. Suddenly the bottom fell out of the waste paper recycling business and the poor people who had very graciously given the warehouse found that every day more and more people drew up and, even if it was closed or locked up, deposited the waste paper on the footpath outside. Vast mountains of this paper developed without any sale or use. Therefore, it is terribly important that any recycling must be a continuous process, and people must be assured that if they are going to save material it will actually be usable and saleable at the end of that time.
The Greater London Council in its present recycling centres has an interesting scheme to encourage members of the public to bring their items. For every tonne of material that is recycled at those centres the Greater London Council donates £1 to a charity. A different sponsored charity is chosen each month for this donation and charities are able to apply to be the charity of the month. It is an interesting idea because it is promotional. I do not consider that to be a waste of ratepayers' money because the aim is to develop the recycling process.
Price of course is a very important factor, as I mentioned with regard to the waste paper. At the moment aluminium is still profitable. Many other materials are profitable. The noble Lord, Lord Ezra, mentioned the Edmonton incinerator which has been in operation since the early 1970s. A considerable value of metal is extracted from the residue after the incineration process and that is recovered and used. But there is also a very substantial production of electricity from the power that can be generated there, and that produces an income of more than £4 million a year. As far as I know, that £4 million was at the rate of selling electricity last year. Your Lordships will remember that a Bill was passed in this House to enable that electricity to be sold for a more realistic price. So I am hoping that that might mean that it is now producing in excess of £4 million.
Unfortunately, there is no recycling centre in central London. This is mainly because land is at such a premium and there is not sufficient space, but the Greater London Council hopes eventually to bring into use an old waste transfer station in Camden. I am sure that most people already know that a waste transfer station is one where the refuse collection service takes the rubbish and the refuse disposal

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service takes over to dispose of it. It is a small station that is no longer used and it is hoped that it might become suitable.
Perhaps the greatest protection of the environment and the greatest saving would come about if we all used less paper. When I was sent abroad recently to a conference for two weeks I asked that my Greater London Council post be kept in the building rather than sent to me. When I returned at the end of two weeks my desk, which is 6ft. by 4ft., was 18 inches deep in paper over the whole surface. I cannot believe that that quantity of paper is needed; and I cannot believe that anyone can possibly read it all or take in what it says if that is the rate of production. That is something to be thought about. We must economise in the first place. It is not only a matter of recycling waste. We must avoid unnecessary waste in whatever field it is.
At the opening of the depot in Barrowell Green the chairman of the Greater London Council, who is himself a school teacher, made a superb speech to all the school children who arrived. He told them that the centre is to teach them not to waste and to think of the future of everything they use and what good it could do for other people. He told them that they should think before they used anything and to think before they threw it away. Those are very valuable points. Perhaps recycling is only part of it.
In California there is now a system in use which takes old motorcar tyres and grinds them up in such a way that they can be converted into oil and eventually into energy. It is a major contract and one way of using a waste product that otherwise has very little use. One noble Lord, a scientist, mentioned to me the fermentation of waste in the production of methane and how effective that could be. There is no doubt that there are many possibilities.
Another noble Lord asked me whether one needs to have vast storage facilities at home. That must be thought about very clearly because people cannot accumulate large quantities of waste in their own homes. No one has the space for that and would not wish to have the waste piling up. That means that any self-sorting centre must be readily available. It must not cost so much in petrol to get there that one thinks twice about whether to take it there or throw it away and leave the rubbish people to sort it out.
As regards recycled paper, I recently purchased a microwave oven. A great feature in the use of a microwave oven is paper kitchen towels. Instead of being cooked in the normal ways, everything is covered with a paper kitchen towel. However, the instruction booklet states that one must be careful what brands of paper kitchen towels are used because some are made from recycled paper and may cause sparking. That leads me to the point that either manufacturers should identify whether or not their products are recycled or whether or not they are spark-free. If this is to become a major use for paper kitchen towels, people need to know whether recycled material is safe. It also indicates to me that there must be some problem in sorting the actual metal products from the recycled paper because it is the metal that causes the sparking.
Bottle banks are very effective. They certainly would have saved the embarrassing situation in a street in
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which I live where, after a dear 90-year-old died, 750 empty gin bottles were found in one of her rooms. One of her relations told me that the old lady found them too embarrassing to put into the rubbish bin. If there had been a bottlebank, she might have been able to take them along.
The point made by the noble Lord, Lord Irving, about mixed plastics not being suitable for recycling was most interesting. Surely the manufacturers could think about that and when they produce plastic cups or containers of any sort they should consider marking them during the manufacturing process with, say, an "A" or a "B", or some mark to indicate the type of material. It would then be very simple for even the little Brownies to pick up, say, 50 marked "A" or 50 marked "B". It would be one way whereby the public could identify products.
I shall not continue because it is late and I have spoken long enough. This is a most interesting subject and I am grateful to the noble Lord, Lord Irving, for bringing it before the House.
10.9 p.m.
Lord Energlyn: My Lords, you will recall the old saying, "Where there is muck, there is brass". I would add to that, that where there is money, there is also an opportunity for creating employment. I think therefore that the Question that has been raised by the noble Lord, Lord Irving of Dartford, is a very serious and a very constructive one. I should like to congratulate him on the very profound and really remarkable survey of the aspects of the question that he has in mind I also join with the noble Lord, Lord Ezra, in focusing attention for the need for co-operation on the part of the Government in their thinking regarding activities such as the noble Baroness has just referred to. At the moment, as the noble Lord, Lord Ezra, has implied, there is a bewildering number of people who are giving thought to this problem but effectively doing very little about it.
It also raises the question of where capital comes from to initiate—or rather to get off the ground—some of the imaginative ideas for the reclamation and reprocessing of waste materials. I should like to suggest to the Minister in reply that he might give thought to the success of two of his colleagues—namely, the noble Earl, Lord Ferrers, and the noble Lord, Lord Belstead—who set up think tanks in the Ministry of Agriculture to which I had the pleasure and honour of belonging. These two tanks—if I may use the phrase—created in the first case a new industry—namely, the production of fermentation plants for the production of bio-gas. It only took us two years to take that off the ground. We are now considering the various uses of straw, and it is quite illuminating to see how effective this group of individuals has become in suggesting to the Minister—and through the Minister to the Government—effective ways of dealing with troublesome waste materials.
One of the most important substances which is allowed to go to waste because it is very difficult to control is water. Without it, we would not be on earth; it would be like the moon—uninhabited. If Ethiopia had spent some time developing water supplies, they would not have been persecuted today by the famine which hits them.

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One must give serious consideration therefore to any method or any device which conserves water. I have recently seen a very simple and remarkable industrial development for the control of water in schools, in hospitals and in large flats, etc. It is an insertion into a tap, and it is made by a company called Flow Control. They can prove that if they had been operating full-scale throughout this country, we would not have had to suffer the drought that we had this summer. We should look seriously therefore at devices of that kind. They have developed a lot of those devices, and they are using the home market as the taking-off ground for exports. You can see that this device is going to have widespread sales throughout the Mediterranean Islands and the Middle East. So here is a case where you can take a waste product or a waste potential and convert it into an industry.
If I may remind your Lordships, at the beginning of this century small coal was a very troublesome substance. Miners were fined if they filled small coal into trams along with lump coal. A German called Rudolf Diesel saw it as a waste product which he could potentially make use of. He designed an engine which simulated an explosion in the mine. That was the embryonic Diesel engine. It did not continue to be the fuel of the Diesel engine because of the inorganic matter in the coal which wore out the bearings of the engine; and so he turned to oil, and that was how diesel oil came into being.
From that we can quite easily follow a line of thought which is not, I suggest, too romantic. The constituent which Diesel was using for his combustion—which indeed is the fuel which triggers off a coal-mine explosion—was that ingredient of coal which is activated carbon, called fusain. If we could make a suspension of fusain and that could replace diesel oil in an engine, and that engine could drive turbines, we should no longer have to use coal to boil water and pollute the atmosphere with the associated constituents of boiling water. Here is an area of R & D which is practically complete but which needs massive capital to bring it into being. It is quite beyond industry to provide such R&D capital. It would have to come from the Government or from the NCB.
Let us stay with coal for one moment. My noble friend Lord Rugby told me of a remarkable experience that he has had of taking up an agricultural suggestion that pigs love eating coal. For many years I supplied coal to ladies who wished to eat it. The whole thing adds up to a fascinating picture—namely, that coal contains ingredients which have remarkable chemotherapeutic properties. Why do women eat coal? When I made a survey of them—and there were about 80 of them—I discovered that they were all pregnant when they wanted coal. They wanted the coal because it dissipated any heartburn that they may be suffering from. Likewise, when an epileptic is about to have a fit, he has an intense area of heartburn and the coal dissipates it. A coal-miner in the old days would have a big breakfast, go up to the coalface, start to dig coal and suffer from heartburn. He found an immediate cure by sucking a piece of coal. Those are facts.
If we add all that together, the pig digests the coal, increases its appetite and also—and this is the point
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that fits into the debate—creates an excreta no longer full of the toxins that are normally associated with pig excreta. Therefore that excreta can be used for agricultural purposes to an extent not otherwise thought of. Here is an interesting new venture, one might say, for coal. Coal can be added to organic matter and become feedstuff for cattle.
I could go on illustrating that theme by many other examples. For example, a new industry could be formed by extracting enzymes from sewage. I could also illustrate how sewage could be used instead of coke for smelting metals. I have a patent on it. I must declare that interest. I could go on to indicate what happens when dust is collected from an oil-fired burner. That dust is quite fantastic. It contains enough vanadium to supply the whole of the needs of this country. That happens in America. But what the Americans have not yet realised is that this dust also has surface chemical properties which make it into a catalyst. It needs a lot of money to take that into actual production. So where does this money come from?
I would suggest that it would be in the interests of this subject if either the Department of the Environment or the Department of Trade and Industry sets up a think tank very similar to that which was set up in the Ministry of Agriculture, to which the noble Lord, Lord Irving, and I have referred, to consider the wider aspects of the subject which has been brought before your Lordships tonight.
10.21 p.m.
Baroness Ewart-Biggs: My Lords, not only am I, too, very grateful to my noble friend for raising this very important issue; I am also extremely admiring of the very clear and wide ranging way that he presented this subject. So, as I am not an expert like the previous speaker, like the noble Lord, Lord Energlyn, and as the subject has already been very well covered and it is becoming very late, I should like to make two rather simple and more general points.
First, I should like to stress—and I think it is an important thing to remember—how very positive is the attitude of the British public towards environmental issues generally and conservation of resources and recycling programmes in particular. Seondly, I should like to make some comment on the recycling of glass programmes, which seems to be an area which attracts a great deal of public interest and response.
I think there is one thing of which we can be quite sure. It is the fact that people in Britain really do not forget, and are very much influenced by, the old saying. "Waste not, want not". I think it is still a very primaeval need for us all to conserve and not to waste. I should just like to quote a few statistics to prove that this still appears to be true.
For example, the 1983 MORI poll, held to assess the reaction to the publication of the United Kingdom response to the World Conservation Strategy, showed that recycling waste ran top of a list of issues which respondents most favoured. It even showed that 20 per cent. of the respondents would actually consider switching their vote if conservation became a party political issue.

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To further this particular aspect I should like to take the instance of glass recycling and quote from a document dealing with research carried out between 1978 and 1981 to survey public attitudes towards the use of bottle banks. This was presented in the House of Commons Trade and Industry Committee's report (which the noble Lord has already mentioned) called The Wealth of Waste, the result of which is to appear tomorrow. The research company opened the document with these words, which I think are very relevant:
"It is very unusual in our experience for a survey to show so few objections being raised at a new scheme or for such a scheme to be so widely accepted by all classes and age groups. It is equally unusual to find such a very wide awareness not merely of the existence of such a scheme but also of its purpose and of the way it works".
So that shows that there is a general acceptance from the public at large.
Here are just one or two examples of the most revealing figures. For instances, when the respondents were asked whether more recycling schemes should be introduced to cover the material from non-returnable bottles and cans, 91 per cent. agreed, 3 per cent. disagreed and 6 per cent. did not know. As many as 87 per cent. of the respondents,
"did not like throwing glass into the dustbin".
Eighty three per cent. agreed that bottle banks are a more convenient place to put glass than the dustbin. Ninety-four per cent. agreed that saving glass was important because of saving valuable resources. The research document went on to prove that a vast majority of people would use bottle banks if they existed in their close proximity. Indeed, they would even go to some distance to use them if they could. Moreover, further evidence given to the committee showed overwhelmingly that a large majority of people were so concerned that they themselves had thought out all sorts of schemes as to how bottle banks should be set up and how they should be publicised and operated. They had some very innovative ideas.
Surely, there is unequivocal proof that, unlike the response to some proposed changes which authorities might produce—for example, to the new pound coin that has been presented and which the public has rejected—in this case ideas put forward receive a very positive response from the public at large. Indeed, authorities can count on wholehearted support. It is a pity therefore that in this case the two are going in opposite directions. The public want the authorities to produce ideas and the authorities are not producing enough.
On my second point, may I briefly point to the terrible dearth of opportunities offered to the public particularly in the recycling of glass. With 305 local authorities operating some sort of scheme there are, to be precise 1,868 bottle-bank sites in the country. My noble friend Lord Irving has given the figure. This compares with 28,000 sites in West Germany. The Glass Manufacturers' Federation in its evidence to the House of Commons committee made the following points: first, that only 8 per cent. or 127,000 tonnes of the total tonnage of container glass consumed is derived from cullet; and secondly, that it had hoped to get to twice that figure, that is, 250,000 tonnes, by 1984 but had completely failed although it knew that other European countries had achieved much higher
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targets. The federation representative admitted that the vast number of bottles coming from hotels and restaurants remained an untapped source of cullet. He went on to point out that there was a greater incentive in other European countries for the collection of cullet and recycling it and that government encouragement and direction on the Continent has been a great deal stronger than in this country.
In fact, he made it clear that it was, and had been for a number of years, the earnest desire of the federation to see more and more bottles sent back for recycling in order to conserve the 30 gallons of oil the nation saves for every tonne of waste glass recycled. However, the difficulties of transportation of the cullet to the recycling plants, the shortage and ill-spaced positions of the plant and the dearth of schemes and indeed Government apathy combine to make it impossible to attain its target of recycling 250,000 tonnes of cullet.
Indeed, the representative from the Glass Manufacturers' Federation proved his own total commitment to the principle of recycling when he admitted that of the two recycling plants operated by his own company, the price that they paid for cullet was equal to the price of raw materials. When asked why he did it. the economic argument being the same, he said:
"Because we are part of the community and some of us in the industry feel that we ought to be doing it".
I should like to conclude by putting these few points to the Minister. First, as recycling has implications for so many aspects of economic and social life, should not the three departments most closely concerned—that is, Industry. Environment and Energy—co-operate more closely over planning policy and setting up schemes? The noble Lord, Lord Energlyn, made this point. It is a most important one. Secondly, should not the Department of Industry consider a system of grants for small businesses wishing to start collecting cullet from commercial sources? Thirdly, it would be very interesting to have a list of the recycling schemes that the Department of the Environment is encouraging. It would also be interesting to know how much the department is spending on recycling generally this year. Finally, I would be interested to know how many publications have been issued on the subject of recycling.
The last question concerns the conservation schemes set up by the GLC. The noble Baroness. Lady Gardner, has told us about some of the most imaginative ones. It would be interesting to know the schemes set up by the GLC and the metropolitan counties. I believe they represent a very high proportion of the total operating in the country. It would be good to have an assurance of their continuation, at least, after the abolition of the GLC and the metropolitan counties, even if, regrettably, there may be no intention of adding to the number of these schemes.
10.31 p.m.
Lord Molson: My Lords, the noble Lord, Lord Irving of Dartford, in his comprehensive and well-informed speech, has established the fact that we are a shockingly wasteful community, and he has established the fact that a great deal could be done to

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save and recycle, reclaim, material which has been used. It must be remembered, of course, in the first place, that much the greatest volume of reclamation is done by industry itself in its own workshops, but when all that has been done there still remains a tremendous amount which has to be dealt with by the public sector. Anything that can be done in that way is economy; and, of course, it also diminishes the amount of waste that has to be disposed of.
I want to draw attention to the strategy (shall I say?) by which waste ought to be dealt with, and I want to refer, if I may, to the changes which are likely to be made in the local government Bill which will be coming before your Lordships in the new year. I propose to deal with London, although the same considerations apply, to different degrees, to the municipalities in other parts of the country. I would say that under the Acts of 1970 and 1974 waste is dealt with in the correct way. The boroughs are responsible for collecting the waste, and they pass it to the Greater London Council for disposal.
I am much concerned at the implication in the Bill, or, rather, the statement in the Bill, that the disposal of waste is going to be transferred from the central authority to the boroughs. We have been told in a remarkable review by the County Surveyors' Society and the County Planning Officers' Society, working in partnership, that in their opinion it is impossible for boroughs to deal satisfactorily with the disposal of waste.
Waste, having been passed to the central authority, is dealt with, roughly speaking, in five ways: first, by reclamation or recycling, to which the noble Lord. Lord Irving, has devoted his attention; secondly, in suitable cases it is used for the generation of electricity (as at Edmonton), which is efficient and makes a profit for the benefit of the ratepayers; thirdly, it can be used for district heating, for the producing of methane gas or for fuel for industry; fourthly, it can be incinerated; and, fifthly, it can be used for dumping, which in many cases is a costly way in which to dispose of what cannot otherwise be used, but in suitable cases it can be used as an aggregate for road construction.
It seems to me clear that the disposal of waste is essentially something that must be done by a central authority with large resources. In the case of London, for example, surely it is clear that there ought to be—indeed there must be—a central authority. London has not the space available to use mineral workings and so on for landfill; it is obliged to enter into arrangements with the planning authorities of counties in the vicinity in order to dispose of its waste which is required for landfill. Landfill is the way in which 95 per cent. of all the waste in England and Wales is finally disposed of.
What is the optimum area for the centralised disposal of waste? It may be the area of the Greater London Council; when the matter comes up for review it may be an area larger than that of the GLC; it may be a smaller area; and it may include areas beyond the present existing local authority areas. It does not follow in the least that, because a certain boundary line is appropriate for some purposes of local government, it is necessarily the appropriate line for the collection and disposal of waste.
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I should like to see—and here I want to make a constructive suggestion—a quango for the disposal of London's waste. I have undertaken to support the abolition of the GLC, but in the debate on the paving Bill I said that I thought that further thought ought to be given to how London's waste was to be disposed of. I know that the present Government have in many cases expressed a dislike of quangos but that, in fact, is exactly what they have introduced as regards London Regional Transport. There is a great similarity between the kind of organisation which is appropriate for organising the transport of people inside London and the organisation appropriate for the disposal of waste.
I support the democratic principle of elected local authorities to deal with all matters which take into account human requirements, such as education and housing. But I see no reason at all why there should be democratic elections for dealing with a perfectly technical and administrative problem such as that of disposing of waste. The type of quango that I would have in mind would be one appointed by the Minister and an experienced and successful administrator would be the chairman; a transport expert would be a member, as well as a financier, and certainly an industrial chemist for the reclamation and recycling of materials. As the noble Lord, Lord Irving, has emphasised in his informative speech, this is a matter of modern technology and it should be dealt with by experts rather than by popularly elected people, however estimable and hardworking they may be.
There is a tremendous amount that can and probably will be done in the future in this way. Many years ago I spoke in the other place representing the Department of Scientific and Industrial Research. At that time I was shown in the laboratory—I think it was the Warren Spring Laboratory—a wonderfully ingenious machine for processing waste. It separated different kinds of waste, and ferrous metals were extracted by a powerful magnet. At that time and in its model form, it was not of course an economic proposition. But on a much larger scale and when the value of raw materials has probably gone up, what at that time was only—shall I say?—an ingenious scientific experiment which was likely immediately to be useful inside factories, might well be something which might economically be introduced for the extraction of materials from the very large quantities of waste which are produced in London. The importance of the recycling of materials is illustrated by the fact that 63 per cent. of the output of steel in this country comes from scrap.
I had intended to say something about the appalling waste involved in the throwing away of bottles, but the noble Baroness, Lady Ewart-Biggs, has referred to that and has brought out the shocking fact that only 8 per cent. of glass containers is derived from cullets.
We must also remember the great danger of pollution—pollution of the land, of the air and of the water. In the European Economic Community there is growing concern at the increasing danger of the serious pollution of the North Sea. All this is an argument in favour of disposal of London's waste—and, as I say, the same applies to other great centres of population—by a highly organised expert quango at

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the centre of things to which material can be sent by local authorities.
The noble Baroness has drawn attention to the fact that a committee of the House of Commons is at the present time investigating the whole of this question of the possible recycling and reclamation of waste. I am very glad indeed that that is taking place in another place, and the noble Lord, Lord Irving of Dartford, has rendered a public service in ventilating the same matter in this House.
10.43 p.m.
Lord Rugby: My Lords, I should very much like to associate myself with the Unstarred Question of the noble Lord, Lord Irving of Dartford. The noble Lord has raised a very important point, not only for the urban area of London, but for the whole country. I am a countryman, and perhaps one of the biggest areas where we have an accumulation of scrap metals of all kinds is actually in the countryside, where we can also find other materials such as straw.
We find ourselves in the situation that the very type of person who is being dissuaded from starting a business is the very person who would recycle all those materials, bring them back into industry and clear up this mountain of scrap metal, and thus restore the countryside to some semblance of order. Therefore, I think that we should establish a change of heart in this country in our educational attitude to a technology which can only be brought out in our schools.
I believe that where we see, for instance, a television set which has had its day and is then put into a rubbish bin, the children who see that scrap should be taught by the people whom we put at the bottom end of the scale—namely, the scrap dealers—exactly how those valuable and vital metals can be extracted in an orderly way and put into their component parts to be identified, and eventually to find their way back into the various industries which can return them to usage.
When we ask for a Ministry, or even a portfolio, for recycling and reclamation, that should be an important portfolio, and perhaps more important than quite a number of other portfolios. It should be brought into our educational system, and those people who are recycling should be upgraded and be given a higher status than they are given at the moment.
10.46 p.m.
Lord Graham of Edmonton: My Lords, the noble Lord, Lord Irving, does the House and the national imperative a signal service in securing the time of the House for this important debate. He has demonstrated—although those of us who have known him over the years did not really need the demonstration—that he brings to this subject a unique blend of experience and expertise. They are not always the same thing. From his former service to the people of Dartford, right in the centre of the paper industry, he reminds us that that constituency interest has continued unchecked ever since.
His voice on these matters is valuable and important. I believe it has been listened to with attention and respect. He calls for a war on waste. I
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trust that the Minister found his speech as illuminating as did the whole House, and that the Minister will acknowledge this by making several important announcements here tonight. The noble Lord dealt with the nature of the industry. We also have to examine the political dimensions of what he said. In this I am encouraged by some of the remarks made by the noble Lord.
We have not been without firm guidance in these matters. Let me give one illustration. A Member of this noble House, Lord Gregson, lends his name to a valuable report, the Gregson Report, which reported in 1981 upon the disposal of hazardous waste. It emphasised the importance of control by waste disposal authorities and effective site licensing. It also drew attention to the waste disposal authorities' planning responsibilities, and concluded:
"The evidence makes very clear that districts and counties are not big enough units to plan facilities for hazardous waste disposal. Arisings and potential disposal sites often do not correspond; some areas have great geological and topographical problems; and specialist facilities need a large catchment area … the case for regional planning, which was supported by a wide cross-section of witnesses, is overwhelming".
The Gregson Report recommended that waste disposal authorities should be formally linked into regional groups as waste disposal regions, and considered that such regionalisation should be formal. The report did not believe that the many informal arrangements in existence were capable of achieving the desired results. Nor would informal bodies be able to provide the scientific services envisaged.
With the Second Reading of the Bill to abolish the GLC and the six metropolitan counties last night in another place, we are faced tonight, and for some time to come, with an extra dimension to a debate of this kind. When we debate in this House next year all the aspects of that abolition Bill, we shall demonstrate service by service that the Bill is an ill-thought-out expedient, a hotch-potch, cobbled together for political ends. But tonight we cannot avoid putting this debate in the context of what the Government propose should be the organisation of our waste management services in the decades ahead. I can tell the Minister that those plans, as demonstrated by an earlier speaker this evening, fill his friends as well as his political enemies with dismay and despondency. As I heard the former Prime Minister, Mr Edward Heath, say last night, "We do seem to be upsetting a lot of people lately".
What do we find when we examine the situation? Sadly, the Government are proposing nothing less than the complete destruction of a system that has been carefully constructed, brick by brick, over the last 20 years and which is universally accepted as the only practical system of waste disposal control in a city of the size and complexity of London. Waste disposal in virtually every major capital city in the world is administered by a single, strategic, waste disposal authority. London in this context can be no exception. The record in waste disposal of the GLC and the metropolitan counties since their inception is impressive. Nowhere have the consultation papers which have been submitted sought to suggest otherwise.

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Indeed, many of the advances the paper seeks to retain have come about only because of the expertise, the economy of scale and the high professional standard of the GLC and the metropolitan counties. There is not a single word justifying the abolition in the waste disposal consultation paper. There is not a single suggestion that the GLC and the metropolitan counties have failed to deliver the goods on any aspect of waste disposal management. The Government proposals—and we cannot divulge the proposals for the future; and that is tonight's topic: the future management of our waste disposal resources—in the future are certain to mean that different standards will operate in different boroughs. This is the very point that was made by the noble Lord opposite earlier.
Taken with rate-capping proposals, it is possible that economies may be required in certain areas which will make life uncomfortable for people. Waste disposal will become the Cinderella service of the boroughs. Revenue expenditure will be pared down to the bare, statutory minimum and significant capital investment will be halted. The Government proposals will take London and the metropolitan counties back to the inefficient, haphazard years before 1964 and in the long term will build up precisely that situation and those problems which those authorities inherited.
The Association of County Councils, which in most matters are to be relied upon to support this Government, were strong supporters of the abolition proposals per se; and the noble Lord has indicated his involvement here. Nevertheless, the Association of County Councils are distinctly unhappy when it comes to the waste disposal proposals. Clause 9 of the abolition Bill returns the waste disposal service to the London boroughs or the metropolitan districts. I can tell the Minister that the ACC feel strongly that waste disposal should be carried out by the largest practicable units.
I am told that, to the ACC, the GLC in particular and the metropolitan counties in general appear to have made a very good job since the reorganisation of waste disposal. I am told that so far as the shire counties are concerned, they view with depression the likely emerging need for the home counties to have to treat with, possibly, as many as 33 London boroughs, including the City, each of which may be independently seeking land-fill sites in the home counties. Not one authority; but 33 of them! There are fairly limited numbers of these and the more units that are responsible for waste disposal, the more competitive they will be and the fewer co-ordinated disposal operations there are, the more criss-crossing of lorry loads there will be on already overcrowded roads.
The House will forgive me if I share some of the pride which shone through the words of the noble Baroness, Lady Gardner, when she talked with justifiable pride of the excellent facility which I use, if not every week then every other week, because I live within a mile of the Barrowell Green facility. I can vouch for everything she said as being, typically, accurate and faithfully recorded. It is an excellent facility, and one which I simply suggest is better able to be provided—it may not have been provided at all by anyone else—by an authority with an over-view of the
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size of that of the GLC and the metropolitan authorities.
Reference has been made by the noble Lord, Lord Molson, to the Edmonton facility. Such a technological innovation must be capable of being funded and sustained over many years. I can recall when I was on the council in Enfield in the early 'sixties talking about things which are only now coming to fruition, in the middle 'eighties. It takes a number of years and sustained dedication in budget after budget to make these provisions.
At Edmonton, rubbish which is burned produces £3½ million-worth of electricity a year; and the GLC has successfully reclaimed natural gas from rubbish tips, which is then piped and sold to adjoining factories. The GLC is leading the country in bottle-bank schemes and recycling centres, recovering 100,000 gallons of oil, 8,000 tonnes of glass and 200 tonnes of tin. I believe that this is a remarkable record, which is part of the story; and I am glad that the noble Baroness took the opportunity to introduce it. It is part of the whole story of what a large authority such as the GLC can do.
Reference has already been made to the major work on refuse recovery and disposal by the GLC. I called for some background material from the GLC: no doubt the noble Baroness is better briefed than any of us. I have documents here entitled, No Time to Waste and Planning for London's Wastes. This might have been part of the documentation on the noble Baroness's desk when she returned and could not see the leather for the paper. It takes a bit of reading, but it is very impressive to see an authority being so far-reaching in considering what its responsibilities are.
I think the House ought to know of the responses made by some of the people who were consulted by the GLC on the forward-looking plans of the GLC. The Institute of Pubic Health Engineering said:
"The institution congratulates the GLC on the formidable array of statistics assembled, and the soundness both in economic terms and in flexibility of implementation of the courses of action proposed".
The Institute of Wastes Management said:
"The Institute fully endorses all constituent parts of the planning statement".
The Thurrock Borough Council said:
"The borough's concern is the prospect of responsibility for waste disposal being transferred to London Borough Councils. They endorse the reasons given in A Return to Victorian Standards for the retention of the GLC's responsibility for waste and instance the Aveley site".
The Basildon District Council said:
"Generally the document is welcomed but severe concern is expressed that the constructive attitude taken by the GLC to its neighbours on waste disposal matters would inevitably be fragmented and lost in the event of London's waste disposal problems being split between the London Boroughs.
The Kent County Council said:
"Your Council is informed that the needs of the capital are recognised and that positive plans for using waste for the reclamation of land in Kent will be welcomed".
The Dartford Borough Council, well known to the noble Lord, Lord Irving, said:
"Welcome objectives for the use of waste material as a positive resource and the prevention of hazards to public health, improvement and protection of the environment and efficient operation at minimum costs".

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My Lords, time is pressing. What this debate has undoubtedly demonstrated is that with the growth of the "disposable society", the society of built-in obsolescence, there comes a terrifying responsibility for this Government—for any Government—at any time, but crucially now and over the next few years. What we expect from the Minister tonight is a clear, positive and concise statement of what the Government are doing and what they plan to do in the future. There can be few spheres of our economic life and of the better use of our resources that demand such a sure and steady hand to harness the energies of disparate organisations—regional and local government units, individuals, private organisations and professional bodies. This Government have made a bad start and are going from bad to worse. It can only get better, but we shall have to wait and see.
11 p.m.
Lord Skelmersdale: My Lords, I should like to begin by congratulating the noble Lord, Lord Irving, on being able to persuade the usual channels that this Unstarred Question should be debated today. I know that the noble Lord started his niggling on 14th May this year when he asked a supplementary question to the Question of the noble Baroness, Lady Ewart-Biggs. As the noble Lord said, it is quite fortuitous that this debate comes on the eve of the publication in another place of the report of the Trade and Industry Select Committee on the recycling of waste. Of course we have yet to see the report, but we await its findings with interest.
Government policy on waste recycling and reclamation is quite straightforward. In the words of that remarkable book 1066 and All That, it is a good thing. We fully recognise the importance of recycling and reclamation where this is technically and economically feasible. I do not believe that this is a policy that your Lordships would require me to justify. I agree with much that the noble Lord, Lord Irving, has said this evening. Recycling can reduce the call on raw materials and the energy required to process those materials. It can reduce the dependence of the United Kingdom, as a manufacturing nation and exporter of finished products, on imported materials. It can minimise the cost of disposal of waste to both industry and local authorities, as well as the local ratepayers and taxpayers, and also reduce the quantities of waste requiring final disposal; and, as an important spin-off, it can demonstrate that industry and local authorities are environmentally conscious.
There are obvious benefits to be gained if raw materials are conserved and unnecessary waste avoided. However, waste recycling and reclamation cannot be an end in itself. It must not use more resources or more energy in the recycling process than are saved by the re-use of the reclaimed materials. The incentives to recycle are equally straightforward. It is for local authorities and industry, who are most directly involved, to determine for themselves whether to opt for disposal or recycling—or a combination of both—taking account of the technical and economic advantages, providing of course that the option chosen is acceptable environmentally.
Equally, it is for those involved in production processes, that is the customer—or potential
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customer—for the reclaimed materials to choose between using raw or virgin materials and secondary materials. This will be based on normal commercial practice; that is, price, delivery time, amounts available, and so on.
But while recycling initiatives are very important, we must be careful not to precipitate sudden violent changes in the demand for products, thereby causing disruption to manufacturing industry. I am thinking here, for example, of the concern which has been expressed about the EC proposal for a Directive on beverage containers. The principle behind this draft directive is very commendable; that is, to reduce the consumption of energy and raw materials by encouraging the refilling and recycling of beverage containers. It is therefore fully in line with the Government's own philosophy. But what we do not want is to instigate a dramatic change in the market from, say, drink cans to glass bottles. The repercussions of such a change on employment in the steel industry and in can manufacturing might be serious. The Government are therefore trying to persuade our partners in the Community to adopt a recommendation instead of a Directive. A recommendation would allow us to take into consideration the particular circumstances of the United Kingdom market and to build on the voluntary arrangements which we already have and to which I shall turn later.
With considerations of this kind firmly in mind, it would not be appropriate or desirable for the Government to intervene in this decision-making process and it is certainly not our intention to introduce legislative requirements or controls in this respect. I know that a number of noble Lords have in the past taken the view that legislation is the best way to encourage greater recycling; for example, measures such as the Beverage Containers Bill which the noble Lord, Lord Beaumont of Whitley, brought before this House some time ago. The Government do not, then, share the view that either European or domestic legislation is necessary in this field.
As I have said, we believe that there are already ample incentives for recycling. Together with research and development and the setting up of pilot projects to demonstrate the efficiency of new recycling processes and, in particular, the merits of new technology, this provides adequate proof to all concerned that recycling and reclamation can and does work when conditions are right. But, as with all innovation, it requires investment and commitment on top of all that has been done if our long-term goals are to be achieved.
There are real difficulties in recycling waste; for instance, they may be economic. Recycled material must be competitive in terms of price, availability and quantity. The difficulties may also be technical. I am thinking especially that desirable developments in manufacturing technology can inhibit recycling of materials; for example, the adoption of laminated packaging to improve the shelf life of foodstuffs. Another inhibition is the fact that industrial processes have in the past usually been described with only the end production in mind, with little or no consideration for process wastes, and their potential for re-use, either in in-house or outside processes.

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On the positive side, I have already referred to the success of United Kingdom industry in dealing with its industrial process wastes. There have been, in addition, important developments in other sectors of industry. For example, there is the glass industry's purpose-built glass recycling plants at Alloa, Worksop, Knottingly and Harlow, mentioned by the noble Baroness, Lady Ewart-Biggs. I should like to tell my noble friend Lady Gardner of Parkes that Australia does not have things entirely its own way. I recommend that she questions me more deeply on the development of a plant in the Midlands to recycle waste automobile tyres to produce fuel and to extract scrap steel.
I also know of a scheme in East Sussex which is run by a local authority to produce fuel from mostly household refuse. I know of other schemes in the North-east of England. These are just a few of the diverse examples of industrial activity in the field of waste recycling and reclamation. All this I regard as industrial enlightened self-interest, and we are delighted to welcome the situation where one plant's waste is another's raw material. That is as it should be.
I also welcome the recent establishment by industry of the United Kingdom Reclamation Council, which will seek to,
"identify and examine particular cases which have reclamation and recycling potential".
The Government will certainly give what support they can in pursuance of this worthy aim.
Local authorities also have an important role to play, and many have collaborated with industry on recycling schemes for mutual benefit, most notably in the fields of glass recycling through the Glass Manufacturers' Federation's bottle bank scheme, but also through the collection of ferrous, aluminium and other non-ferrous cans, the collection of waste, oil and paper (often at council civic amenity sites) and polyethylene-terephthalate plastic bottles. The bottle bank scheme has in particular proved very successful and is now operating in over 50 per cent. of local authorities. My department has been talking to the Glass Manufacturers' Federation about how we can increase this percentage.
For their own part, local authorities have long had the statutory powers to develop recycling schemes in their areas, and increasing numbers of authorities are considering waste recycling as a serious disposal option in order to reduce the amount of waste requiring final disposal, especially in large conurbations where, as was pointed out this evening, landfill space is becoming increasingly difficult to find. Some authorities have become directly involved in large-scale projects to produce energy from their municipal waste. We have heard from two of your Lordships this evening about the scheme at Edmonton. Similar schemes operate in Sheffield and Coventry.
Central Government is also a partner with local authorities and industry in certain research and development projects, and my own department's involvement in the fields of mechanical waste sorting and waste-derived fuel is an excellent example.
In conjunction with the Department of Trade and Industry's Warren Spring Laboratory, the DoE has
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given substantial financial and technical assistance in the development of the experimental plants at Newcastle and Doncaster for deriving fuel from municipal waste. The success of these experimental plants has led to further plants being commissioned in Merseyside and the West Midlands. The department has published a general guide to the use of waste as a fuel and recently helped organise a seminar for local authorities on resource recovery, which was a considerable success.
My noble friend Lady Gardner spoke of exciting developments on the waste recycling front from the GLC. I am always delighted to get good news from the GLC, but before I leave the role of the local authorities, I should like to say a word about this subject in relation to the Local Government Bill which had its Second Reading in another place yesterday; indeed, the noble Lord, Lord Graham, would not let me get away from this Dispatch Box this evening if I did not. This Bill devolves responsibility for waste regulation and disposal, including recycling, to the London boroughs and metropolitan districts. It emphasises that these authorities will need to satisfy my right honourable friend the Secretary of State that they have planned really effective co-operative arrangements for discharging these new functions, including proposals to ensure that proper standards are maintained. A reserve power for the Secretary of State to set up statutory joint arrangements is also provided for if voluntary co-operation does not materialise. But, my Lords, once local government has got over the culture shock and knows that abolition will go ahead in 1986, I do not believe that this will prove necessary, and so here I must take issue not only with the noble Lord, Lord Graham of Edmonton, but also, regretfully, with my noble friend Lord Molson.
I dispute the claim that London, even though the scale and complexity of waste disposal is greater than elsewhere, is uniquely different in a way which could justify my counselling my right honourable friend to set up a waste quango for the capital. I would, however, be prepared to exert every effort to have waste collection competitively catered for and further to increase the involvement of the private sector in the operational aspects of both waste disposal and recycling. In this connection I would remind the noble Lord, Lord Graham, that one public company would solve the problems of the former.
On the GLC recycling plants enumerated by my noble friend Lady Gardner of Parkes, we know where all the existing ones are; but my noble friend spoke of four, I think, in the pipeline. Regretfully, we are not privy to the GLC's plans for the future. This is exactly the sort of information which we need concerning London boroughs in order to plan for abolition, but which the Greater London Council are not providing us with. This shows yet one more reason for the Local Government Interim Provisions Act which we passed this year.
Lord Graham of Edmonton: My Lords, the noble Lord indicated that the Government were not aware of the plans of the GLC. We are talking of waste disposal. I am not an expert, but there were two documents. One was an attempt to comply with a statutory requirement to produce a plan. There are queries

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about the status of the plan, but this was the first attempt. Then there were the responses to it, including that from the Department of the Environment. Surely the plans for all aspects of waste reclamation are well known. Is the Minister referring to reluctance to cooperate with the Government in supplying statistics?
Lord Skelmersdale: My Lords, I was referring to the need for the GLC to provide information of all kinds, and not just statistics to both the successor bodies and the Government. Is the noble Lord saying that it is complete information on the subject? I rather doubt it. But perhaps I may be allowed to go on with my speech after that exchange.
I can assure the noble Baroness, Lady Ewart-Biggs, that we shall look at all aspects of the proposals for the future organisation of waste disposal which we have asked London boroughs to put forward to us by the end of February 1985; and that their proposals for the future of recycling facilities inherited from the GLC will be looked at very carefully. I see no reason why abolition should result in a reduction in those facilities.
The Government do not leave the development of waste recycling and reclamation entirely to local authorities. The Department of Energy, through its Energy Technology Support Unit at Harwell, supports a number of projects as part of its energy efficiency demonstration scheme fuel-from-waste programme. It also supports research and development, as I have already said, at the Warren Spring Laboratory and under the Department of Trade and Industry's support for innovation scheme.
I turn now to my department's role in encouraging recycling and reclamation. As I told the House on 14th May, we took the lead earlier this year by announcing our decision that in future all letter-headed stationery used in the Department of the Environment and the Property Services Agency will be made from 100 per cent. recycled paper, made in Britain—once, of course, existing stocks are exhausted. I am delighted to be able to tell the House that my speech this evening has also been typed on 100 per cent. recycled paper. The Department of Trade and Industry and the Welsh Office are, I know, considering the use of recycled paper and paper products. I would again urge all other public bodies to consider very seriously whether it makes sense for them to use more recycled paper. On that note, I would conclude by re-emphasising the Government's commitment to recycling and reclamation of waste materials where it is both cost-effective and practical to do so.
During the course of the debate I was asked a number of questions, some of which I am able to answer tonight; others I am not. The noble Lord, Lord Irving, in summary wanted to know the recent progress that had been made in glass recycling. I understand that 50 new bottle bank schemes were established in the United Kingdom last year, providing an additional 12,000 tonnes of glass for recycling and extending coverage of the scheme to nearly 300 district council areas. From all sources some 17,000 tonnes more glass was recovered in 1983 than in 1982, making the total of recycled glass last year around 127,000 tonnes. The noble Lord quoted the United Kingdom percentage recovery of glass in
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bottle banks as being about 5 per cent. It is, I am advised, approximately 10 per cent.
Several noble Lords were interested in the subject of waste paper collection. There has been a decline in the demand for paper products, and hence a reduction in the price of waste paper. That has meant that collection systems have been unable to operate profitably. The Department of Trade and Industry is seeking to increase usage in response to the 1981 EEC recommendation on the re-use of waste paper, though it should be said that the United Kingdom's record on waste paper recycling already compares favourably with that of other member states, with currently 56 per cent. of industry's total fibre requirement being met from waste paper.
There are some indications that markets for waste paper are improving. Virgin pulp prices have increased dramatically recently, mainly due to the weakness of the pound against the dollar, the main trading currency for paper. As a good environmentalist, I should like to think that the fears on acid rain would have had something to do with this as well. This has had the effect of stimulating demand for waste paper, and there are some reports of temporary shortages, although I am told that this may be due in part to increases in exports by merchants.
The noble Lord also spoke about Sections 12 to 14 of the Control of Pollution Act 1974. I accept that they could be an incentive for the recovery of materials from commercial waste. However, these provisions could also lead to increased costs for local authorities. The Government are now, however, seriously considering the appropriate time for implementation of these provisions.
The noble Lord, Lord Ezra, declared an interest, as chairman of the Keep Britain Tidy Group. I look forward to being recycled tomorrow when, for the second year running, I am to present the Kentucky Fried Chicken awards. The noble Lord also referred to the unimplemented provision in the Litter Act, requiring the preparation of litter plans by local authorities. The provision has not yet been brought into force because of the need to contain public expenditure. In the meantime, we do indeed highly regard the work of the Keep Britain Tidy Group, as I am sure the noble Lord knows.
The noble Lord, Lord Energlyn, spoke of a think tank, in my department, on the problems of waste recycling. I cannot go as far as that this evening. However, I am prepared to commit my department to examine all your Lordships' views as expressed this evening, in parallel with the Select Committee's report.
The noble Baroness, Lady Ewart-Biggs, asked me a whole range of questions—first, about co-operation between the three major departments. We will consider this in the light of the Select Committee's report, but I should not like to commit myself on the issue now. She asked about grant for small businesses wishing to collect waste materials. My provisional answer is that I see no reason why existing DTI and COSIRA help should not be available for small businesses wishing to carry out this activity, in the way that it is available for any other small business. But I will of course look into the details of this and let the noble Baroness know.

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The noble Baroness asked for a list of schemes supported by the Government. The House absolutely detests being given, and I detest giving, shopping lists. That comment also refers to the noble Baroness's fourth question, on how many publications have been issued by the department. After this debate I shall provide her with one further good example carried out by the DoE and the Department of Trade and Industry together. Recycling is mentioned in the whole series of waste management papers provided by my department and the excellent sheets provided by the Department of Energy and the Technology Support Unit at Harwell. Again, I shall be delighted to give the noble Baroness copies of them at an appropriate moment.
I am confident that industry, in its own enlightened self-interest, and the local authorities, in response to the increasing need to reduce their disposal costs, are becoming increasingly attracted to the very real benefits that recycling and reclamation of waste materials offer as an alternative to, or as a complement to, disposal. It is accepted that market forces may not always be enough to ensure optimum recycling and reclamation in some areas. There is therefore a clear need for informed advice and information on new technologies and processes, and research and development, in order to stimulate and permit investment in the new technologies which are currently and potentially available.
Education and research, not formal legislative schemes, are, I believe, the answer to this need and the Government are pursuing this energetically within the inevitable limitation on resources. We shall continue to do so and to work closely with industry and the local authorities to achieve success.
House adjourned at twenty-five minutes past eleven o'clock.

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