Sitting of 12 December 1984

Preamble
The House met at half-past Two o'clock
PRAYERS
[MR. SPEAKER in the Chair]
PRIVATE BUSINESS
  BRITISH RAILWAYS ORDER CONFIRMATION BILL
  Considered; to be read the Third time.
Oral Answers to Questions
  FOREIGN AND COMMONWEALTH AFFAIRS

    Nicaragua
    Mr. Meadowcroftasked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the implications for United Kingdom foreign policy of the current situation in Nicaragua.
    The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Mr. Tim Renton): We wish to see the restoration of peace and stability in central America. As my right hon. and learned Friend told the House on 9 November, the situation in Nicaragua calls for the greatest possible restraint on all sides. We wholeheartedly support the Contadora process as the best hope for bringing peace and stability to the region.
    Mr. Meadowcroft: Why do the British Government, rather like the United States Government, appear to accept that the elections in El Salvador are more legitimate than those in Nicaragua? Do the British Government accept the integrity and sovereignty of Nicaragua? What representations have we made regarding the serious tension that exists between the United States and Nicaragua?
    Mr. Renton: There was agreement on all sides that the elections in El Salvador were fair. It cannot be said that the same agreement applied in respect of the elections in Nicaragua. Although a number of people felt that the elections were reasonably conducted on election day, it was clear that, in advance of that, there was political discrimination in the form of harrassment at Opposition meetings, unequal time on radio and television and censorship of some material relating to the election campaign. Because of such considerations, four parties withdrew from the election. Against that background, we decided not to send observers.
    Mr. Alan Howarth: Is it not true that the strategic security of this country depends to a significant degree on NATO's capacity to provide reinforcements for Europe passing through the Panama canal, the Caribbean and the
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    Gulf of Mexico? Does my right hon. Friend agree that the efforts by the United States to foster genuine democracy and to prevent the extension of Marxist subversion and influence in that area are in our interests?
    Mr. Renton: Security not only in Nicaragua but in the whole of central America depends strongly on a regional settlement. That is the spirit behind the whole Contadora process. The United States in the United Nations General Assembly has given its specific support to that process, just as we have.
    Mr. Anderson: Is there not a role for us, particularly before Congress meets, in seeking to restrain the increasingly bellicose noises from the United States in respect of Nicaragua?
    The Minister mentioned Contadora. Does he not share the anxieties of the Mexican Government and others that the United States, acting directly and through its allies, is seeking to move wrecking amendments to the Contadora treaty and thereby abort the process?
    Mr. Renton: Honduras and others have suggested amendments to the Contadora Act, which are now under consideration. The position of the United States in this matter is reflected in the fact that the United States has constantly stressed that it wishes to achieve political reform by peaceful means. There is a continuing dialogue between the United States special representative, Mr. Shlaudeman, and the Deputy Foreign Minister, Mr. Tinoco. That shows that the American Government have a direct link with the Sandinista Government. The continuation of those discussions is most important.

    Uganda
    Mr. Fisherasked the Secretary of State for Foreign and Commonwealth Affairs what representations the Government have made in the current year to the Ugandan Government on human rights.
    The Minister of State, Foreign and Commonwealth Office (Mr. Malcolm Rifkind): We attach great importance to this. My right hon. and learned Friend met the Ugandan Minister of State for Foreign Affairs in New York on 28 September and discussed a number of issues in our bilateral relations, including human rights. The situation has also been raised with the Ugandans on a number of other occasions.
    Mr. Fisher: I appreciate the Minister's concern, but how does that concern square with the fact that the Government are giving support for the training of the Ugandan police and army? What assurances can the Minister give that that training will be solely for the benefit of increased discipline in the army and will not result in human rights being endangered further?
    Mr. Rifkind: It squares very well. As the hon. Gentleman correctly said, the purpose of the military training that we are giving the Ugandan army is to ensure that there is a proper level of discipline in the armed services. At least part of the problem of human rights in Uganda has been caused by a lack of discipline and a lack of control. That is one element in regard to which we can make a positive contribution.
    Sir John Farr: Are representations being made about the pitiful circumstances of the many tens of thousands of Ugandan Asians who fled that country and arrived in

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    Britain penniless, many of whom are now in Leicester? What actions have the Government taken to get some justice for them?
    Mr. Rifkind: Earlier this year the Ugandan Government introduced a scheme to examine compensation claims and to try to respond to the proper anxieties to which my hon. Friend has referred. I understand that some of the cases have been completed and that property has been returned to Ugandan Asians from whom it was expropriated. We hope for rapid progress in this matter. There has been progress, but it has not been sufficiently rapid.

    Space Weapons
    Mr. Robert Banksasked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the Government's policy towards the proposed Soviet-American negotiations on weapons in space.
    The Minister of State, Foreign and Commonwealth Office (Mr. Richard Luce): We are pleased that the Soviet Union has agreed to discuss outer space arms control with the United States. We are strongly committed to arms restraint policies in this area. Together with our other allies, we shall continue to support United States efforts to achieve progress in this field, but the need for Western patience and perseverence is as great as ever.
    Mr. Banks: I am grateful to my hon. Friend for his reply. Bearing it in mind that the two super powers are at the start of a race to develop weapons in space at gigantic cost, will my hon. Friend undertake to do all that he can to improve the understanding between the United States and the Soviet Union on the desirability of reaching an agreement to ban the stationing of all weapons in space? Will he say what the Government's policy is towards the United States's strategic defence initiative?
    Mr. Luce: I agree with my hon. Friend about the urgent need for measures, which are agreed between East and West, and principally between the United States and the Soviet Union, for arms restraint in outer space. My right hon. Friend the Prime Minister talked about the dangers of a new and terrible theatre of war in that regard. I am sure that the United States goes into these preliminary discussions in the new year with the clear objective of trying to reach an understanding with the Soviet Union. Indeed, my right hon. and learned Friend has just had discussions with the United States Secretary of State about these and other issues and will shortly do so with Mr. Gorbachov in London next week.
    Mr. Norman Atkinson: Will the Minister reconsider that answer, as it must contradict the Government's main purpose for maintaining nuclear weapons? The House has often heard the Government explain that their justification for having nuclear weapons is their deterrent value. If weapons in space are successfully developed with a view to finding a satisfactory defence against nuclear weapons, will that not minimise the deterrent value of nuclear weapons?
    Mr. Luce: The Soviet Union and the United States are undertaking some research on strategic defence and ballistic missile defence, but the United States has made it plain during this year that it is willing and anxious to talk
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    to the Soviet Union about research on both sides, with a view to reaching some form of understanding. That is a sensible way in which to proceed and I hope that that is what they will do.
    Mr. Heathcoat-Amory: Does my hon. Friend agree that American space weapons are designed primarily for the defence of the United States, not for Europe, and, therefore, that their deployment would uncouple Europe from the American strategic deterrent? Does he further agree that on those grounds alone West European Governments should resist the development and the deployment of space weapons by either side?
    Mr. Luce: As I have already made plain, the Government believe that we must get urgent progress, if possible, in arms restraint in outer space. I reinforce that view strongly. Nevertheless, I believe that it is the view of the United States that the Alliance as a whole should remain completely united in these matters. We are in the closest possible consultation with them on the important issues of outer space.
    Mr. Healey: Is not the question of unity the question of the policy upon which that unity exists? Does the Minister agree that the American strategic defence initiative, if it were successful, which most American experts think is most unlikely, would undermine the whole basis of nuclear stability as it has existed since the second world war? If he does not accept that, does he agree that if the Americans give their knowledge to the Russians it would make a farce of the Government's policy of maintaining a national nuclear deterrent? For those reasons, will the Minister strongly urge the United States' Government to accept the Soviet proposal to ban weapons in outer space?
    Mr. Luce: I agree that the implications of research and prospects in outer space are extremely far-reaching and serious. That is why it is important that we should support strongly the statement of the United States' Government that they are willing to discuss both their research and Russian research in outer space with a view to reaching some understanding about restraints.

    High Technology
    Dr. Michael Clarkasked the Secretary of State for Foreign and Commonwealth Affairs whether, during his recent visit to Israel, he was able to further the prospect of joint ventures in high technology between Israel and Britain and closer co-operation between Israel and the European Community.
    Mr. Luce: My right hon. and learned Friend's recent visit to Israel focused on the prospects for peace in the middle east. He also reviewed our bilateral relationship with Israel, as well as the effects on Israel's relationship with the European Community of Community enlargement. There was a discussion on progress in commercial relations, but joint ventures in high technology were not specifically discussed.
    Dr. Clark: I am sure that my hon. Friend is aware of Israel's capability in various areas of high technology. Will he therefore suggest to his right hon. Friend the Minister for Trade that he should visit Israel for bilateral talks, as he has done with other countries in that area?
    Mr. Luce: First, I take note of my hon. Friend's suggestion. He might like to know that officials at the

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    Department of Trade and Industry are due to have discussions with officials in Israel shortly, as part of the United Kingdom-Israel joint committee on trade relations, with a view to finding ways to increase our trade with Israel. Trade in both directions is already increasing quite strongly.
    Mr. Ernie Ross: Does the Minister accept that before there is a further increase in trade, or a continuation of trade, between Britain and Israel, we should first at least demand that Israel withdraws from Lebanon, stops building settlements on the west bank and gives basic human rights to the Palestinians on the west bank in Gaza?
    Mr. Luce: On the first question, commercial trade has continued with Israel. We believe that it is right to have ordinary, straightforward commercial trade. We want to see an agreement as soon as possible between the Israeli Government and the Lebanese Government for the withdrawal of forces there. In that connection, the European Community imposed an arms embargo on Israel in 1982 as a result of the invasion of the Lebanon.

    Africa
    Mr. Ian Lloydasked the Secretary of State for Foreign and Commonwealth Affairs what plans he has to visit Africa.
    The Secretary of State for Foreign and Commonwealth Affairs (Sir Geoffrey Howe): I shall be visiting Zimbabwe, Zambia and Kenya between 5 and 12 January.
    Mr. Lloyd: The World Bank, in its challenging and perceptive series of reports on sub-Saharan Africa, has pointed out that the key issues are the better use of investments and the adequate existence of management capacity in Governments. Does my right hon. and learned Friend agree that, despite the well-meaning but misguided observations of certain bishops and others, the one thing we must do is to continue support in that area, especially where investment in South Africa is concerned, since, despite its many faults, it remains the country which most fulfils the World Bank's conditions and is the only country which is well placed to ensure that there is not a massive disaster south of the equator? Does my right hon. and learned Friend agree with the observations of President Reagan yesterday that we shall continue to give unswerving support provided that South Africa continues to address the imperatives of constructive change?
    Sir Geoffrey Howe: I agree with my hon. Friend about the importance of continued investment throughout Africa, and that that investment should be well managed, and in many places better managed than it is. I also agree with him about the importance of continuing freedom to invest in South Africa where that investment can contribute to the economic and political stability of that country, which has a wider significance. I would rather not agree selectively with parts of President Reagan's observations on South Africa, but I have noted them with interest.
    Dr. Owen: Does the Foreign Secretary agree that this is perhaps the best opportunity that there has been for six years to obtain a Namibian peace settlement along the lines of the United Nations resolution? The hardening of Republican Congressmen's attitudes and President
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    Reagan's change of position are now coupled with the Angolan President's offer to withdraw Cuban troops from the Namibian border and to send some Cuban troops home. Will the Foreign Secretary take the initiative, with the other four of the original five countries, to push a United Nations settlement in Namibia?
    Sir Geoffrey Howe: I agree with the right hon. Gentleman that the changes to which he referred, especially the change in the position of the Angolan Government, give greater encouragement to the chances of a settlement of the Namibian problem. As he will know, we have been pursuing this matter through the existing negotiation arrangements for a long time. We shall continue to do that, and I shall consider whether the original Contact Group can do something more in this context. We must give every encouragement to that process.
    Mr. Hayes: I am sure that my right hon. and learned Friend and the House will join me in expressing sympathy with and offering condolences to those British people who lost relatives in last week's Gambian ferry disaster. Will he assure the House that he will do his best to give information to those families, who at present do not know what is happening? One of my constituents does not know whether his brother is alive or dead. Will my right hon. and learned Friend go so far as to say that he will assist with the funeral arrangements at the earliest possible opportunity so that my constituents—[HON. MEMBERS: "Get on with it."] Mr. Speaker, Opposition Members do not seem to appreciate the seriousness of the matter.
    Mr. Speaker: Order. The hon. Gentleman is going into detail on a rather broad question.
    Mr. Hayes: I am grateful, Mr. Speaker, but may I finally ask my right hon. and learned Friend to do everything in his power to ensure that the right information is provided to my constituents on this extremely serious matter?
    Sir Geoffrey Howe: The House will join my hon. Friend in expressing sympathy with the Gambian Government and people at the sinking of the ship Chilele Jawara on 7 December when it was carrying 73 Gambians and 25 Britons. We especially extend our sympathy to the families of the three Britons who are missing, feared drowned. Only one body has been recovered, and the search continues for the other two. I fully understand my hon. Friend's anxiety on behalf of his constituents, and I assure him that our consular department is in contact with the next of kin and is, through the high commission, keeping them informed of developments. It will continue to do so.
    Mr. Robert Hughes: Is the Foreign Secretary aware that today there is a lobby of Parliament, jointly organised by the Namibia support committee and the anti-apartheid movement, demanding Government action on independence for Namibia? Will he take to the rally that is being held immediately after Foreign and Commonwealth Questions a message that the Government will now act and speak on behalf of the Namibian people, instead of behaving like a surrogate of South African intransigence, as has hitherto been the case?
    Sir Geoffrey Howe: The hon. Gentleman has offered a characteristically misguided insight into the scene. The Government have been exercising the most strenuous

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    endeavours to help to bring about a settlement of the Namibian question. We have been taking an active part, not only in discussions with the South African Government, but with the Angolan Government, the Front Line states and our other partners in the Contact Group. We regard the settlement of this dispute in accordance with resolution 435 as a matter of importance, and we shall continue to press for this.
    Mr. Lawrence: While he is in Africa, will my right hon. and learned Friend visit Bophuthatswana, from which I have just returned, which is an independent, free enterprise, democratic, multi-racial and harmonious state, lacking only the recognition of Britain and other countries?
    Sir Geoffrey Howe: I am familiar with my hon. and learned Friend's views, which he propounds with such tenacity, on Bophuthatswana. I fear that I shall not have an opportunity to visit it in the near future. It will have to bask for the moment in the glory of his own recent visit.
    Mr. Anderson: The Foreign Secretary knows that we applauded the courage shown by his Minister of State in his attitude to Solidarity when he visited Poland. Will he show a portion of that same courage in denouncing the legal tyranny in South Africa, which charges with treason men who involve themselves in democratic activities? Will he also learn from the President of the United States and the chairman of the Senate Foreign Relations Committee that the tune has changed and that it is now respectable to denounce apartheid?
    Sir Geoffrey Howe: I am surprised that the hon. Gentleman is not fully familiar with the fact that, on many occasions, we have expressed our abhorrence of the system of apartheid. We have expressed our views strongly about many manifestations of that, and most recently in the pronouncement that we agreed with our partners in the European Community on 11 September. There was also the speech by the presidency in the General Assembly only three weeks ago. There is no doubt about our position.

    China
    Dr. Mawhinneyasked the Secretary of State for Foreign and Commonwealth Affairs in which ways he expects the signing of an accord with China over the future of Hong Kong will affect Anglo-Chinese relations in the long term.
    Sir Geoffrey Howe: We are confident that the successful conclusions of the Hong Kong negotiations provides a firm basis not only for the future prosperity and stability of Hong Kong, but for even closer co-operation between the United Kingdom and the People's Republic of China in the years ahead.
    Dr. Mawhinney: Does my right hon. and learned Friend accept the appreciation of the House for the substantial contribution that he has made to improving Anglo-Chinese relations? Now that the accord on Hong Kong has been signed and an agreement has been reached, will my right hon. and learned Friend assure the House that he will continue to afford the highest priority to building on that good relationship politically, diplomatically, in trade and in travel?
    Sir Geoffrey Howe: I am grateful for my hon. Friend's comments. I assure him that, just as we have been working
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    hard for a number of years to improve our relationship with the People's Republic of China we shall continue to do with particular reference to trading, touristic and other opportunities, so that our companies can make a major contribution, as we would wish them to do, to Chinese modernisation.
    Mr. Beggs: Following the signing of the agreement, will all possible assistance be given to British companies tendering for contracts in China? Will companies such as GEC, which has factory space in my constituency in Larne, benefit in the long term from the good relationship being developed between the two countries?
    Sir Geoffrey Howe: We shall certainly continue to give all the support that we possibly and sensibly can to the efforts of British companies. We shall shortly be reopening a consulate in Shanghai, which will be helping in that important part of the Chinese economy. I hope that the company to which the hon. Gentleman has referred will be among those to benefit.
    Mr. Mark Robinson: Does my right hon. and learned Friend agree that, following the agreement on Hong Kong, any consideration of Anglo-Chinese relations should include priority being given to fostering confidence in Hong Kong and in the relationship between the people of Hong Kong and China? Has he any plans to facilitate that?
    Sir Geoffrey Howe: I very much agree that after the conclusion of the agreement on Hong Kong it is essential that we do not lose sight of the continuing importance of good relations between Hong Kong and China. Indeed, such relations are likely to develop during the work that will have to take place over the next 14 years. That work will be undertaken in a more auspicious climate if, at the same time, we are striving to improve our general relations with the People's Republic.
    Mr. Adley: Will my right hon. and learned Friend please take this opportunity to have a thoroughgoing review of the COCOM agreement in so far as it relates to relations between this country and the People's Republic? Does he agree that in the past 30 years there has been such a fundamental change in China's relations with the Eastern bloc and the Soviet Union, as well as with the Western world, that the present situation is nonsensical, indefensible and thoroughly harmful to the development of good trade relations between us?
    Sir Geoffrey Howe: I hesitate to agree with such wide-ranging epithets, even though they come from my hon. Friend, but I agree that it is important to ensure that the COCOM agreement operates sensibly and in a manner consistent with its overall objectives.
    Mr. George Robertson: Now that the Foreign Secretary is on the point of going to Peking to sign the Hong Kong agreement, which will do much to cement British-Chinese relations, will he tell us how he intends to report on the joint liaison group over the next 12 years? Has he had any time to reflect on the suggestion made last week about the possibility of an annual report to Parliament, with, perhaps, a debate on it?
    Sir Geoffrey Howe: I have certainly been reflecting upon that point, but I am not yet in a position to emit the results of those reflections.

    Disarmament
    Mr. Maloneasked the Secretary of State for Foreign and Commonwealth Affairs what is the Government's response to the United States-Soviet talks on disarmament, planned to take place in Geneva in January 1985.
    Mr. Luce: We have consistently supported the United States in its willingness to negotiate, without preconditions, balanced and verifiable agreements on limiting nuclear weapons. We therefore welcomed the announcement that Mr. Shultz and Mr. Gromyko are to meet in January. We firmly hope that this will lead to agreement on how to carry forward the process of negotiating arms control agreements covering both nuclear and outer space questions.
    Mr. Malone: I am grateful to my hon. Friend for that reply. Does he agree that the recent Soviet offer secured by the Leader of the Opposition not to target nuclear weapons on this country and to reduce the number of medium-range nuclear weapons is anything but helpful? Does it not simply amount to a unilateral renunciation of our nuclear weapons? Does not the other matter, which was conceded off-the-cuff by the Leader of the Opposition when in the Soviet Union, that we can simply replace all our missiles with cardboard ones, say all that needs to be said about the Opposition's policy on this issue?
    Mr. Luce: In so far as it is possible to understand the offer made to the Leader of the Opposition by the Soviet Union, it would seem that in return for us renouncing our independent strategic deterrent and getting rid of all nuclear weapons in this country the Russians would make proportionate reductions in their country—which, given the size of their strategic force, would represent a tiny, minimal reduction—and would point their weapons in a different direction. If the Leader of the Opposition thinks that that would enhance the security of this country, he had better think again.
    Mr. Johnston: Are the Government prepared to involve the British independent nuclear deterrent in such disarmament negotiations?
    Mr. Luce: The first thing, obviously, as the hon. Gentleman knows is that there is to be a preparatory meeting between Mr. Shultz and Mr. Gromyko in early January with a view, we understand, to discussing the parameters within which they will review the whole question of nuclear reductions and arms activities in outer space. That is the purpose of that meeting. Therefore, we have to hope that it will lead to a discussion between the Soviet Union and the United States which will, in due course, lead to a reduction in nuclear weapons.
    My right hon. and learned Friend the Foreign Secretary has frequently made it absolutely clear, as far as Britain's independent strategic force is concerned, that if there is clear evidence that both of those countries agree to substantial reductions in nuclear weapons, and there is no increase in the defence capability of the Soviet Union, we shall consider the situation with regard to the British deterrent force.
    Sir Peter Blaker: Will my hon. Friend be even more specific about the relationship between our nuclear deterrent force and the size of the Soviet strategic arsenal? Is it not true that our nuclear force represents less than 3 per cent. of the strategic arsenal of the Soviet Union?
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    Therefore, is not the proposal discussed between the Leader of the Opposition, the right hon. Member for Leeds, East (Mr. Healey) and Mr. Chernenko that we should throw away the whole of our nuclear arsenal in return for a reduction to 97 per cent. in the Soviet Union arsenal both ridiculous and positively dangerous?
    Mr. Luce: My right hon. Friend, who has had responsibility for these matters, is absolutely right. The British deterrent force constitutes only 3 per cent. of the total nuclear force of the Soviet Union. It must be seen in perspective. In the forseeable future there is a need to maintain our security in Britain by the retention of an independent nuclear deterrent. As I have said, if there is real progress and substantial reductions, we can review the position again.
    Mr. Healey: Either the Minister was badly briefed or he did not read his brief. Is it not true that the United States Government and the Soviet Union Government will discuss in January not only the abolition of weapons in space but a substantial reduction in offensive missiles, whether based in Europe or elsewhere? Does that not put the British nuclear force, like the French nuclear force, in the middle of the argument?
    Does the Minister agree that as the Conservative Government in the early 1970s agreed that British weapons should be counted in SALT I, for the Prime Minister now to oppose the counting of British weapons in the forthcoming negotiations will present a severe obstacle to their conclusion? Does the hon. Gentleman not feel a little embarrassed because President Reagan and the Opposition are talking to the Russians about arms control while the Government absolutely refuse to engage in discussions?
    Mr. Luce: As is often the case, the right hon. Gentleman is talking absolute nonsense. The position is clear. If Mr. Gromyko and Mr. Shultz, as a result of their preparatory meeting, get together to discuss all nuclear weapons reductions as well as those in outer space—which is absolutely right—that will involve discussions about the Soviet and the United States missile systems. The right hon. Gentleman is not showing a sense of perspective. If there is substantial progress on nuclear weapons, which we all hope there will be, and there is an agreement for substantial reductions, that will be the right moment for us to review the position on Britain's deterrent force.

    Brazil
    Mr. A. Cecil Walkerasked the Secretary of State for Foreign and Commonwealth Affairs what steps he is taking to foster and cement good relationships between the United Kingdom and Brazil; whether he will seek to visit Brazil; and if he will make a statement.
    Mr. Renton: We have close and friendly relations with Brazil. These links were further strengthened by the visit of my noble Friend the Minister of State for Foreign and Commonwealth Affairs in July and by recent parliamentary visits in both directions.
    Mr. Walker: Is the Minister aware that the Brazilian economy continues to grow despite the economic problems in the world, and that British exporters can only benefit from good political relationships with that country? Is he further aware that the Brazilian Government

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    annually purchase from British defence suppliers £80 million of goods and have never demanded an offset agreement? Is he aware also that the arrangement between Short Brothers of Belfast and Embraer provides Brazil with little in money terms? Does the Minister recognise that a contract for the new basic RAF trainer would greatly assist in cementing good relations with both countries?
    Mr. Renton: I appreciate the hon. Gentleman's close interest in the Shorts—Embraer bid to supply the RAF with a new trainer. It is one of four bids currently being considered by my right hon. Friend the Secretary of State for Defence. It will be given close attention and, like all the other bids, every other relevant consideration, including political factors, will be taken into account.

    South Africa
    Mr. Proctorasked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the current condition of relations between the United Kingdom and the Republic of South Africa.
    Mr. Rifkind: Despite recent difficulties, we continue to attach importance to the maintenance of diplomatic relations with South Africa. We welcome the lifting of the detention orders on the three men in our Durban consulate, and I can confirm to the House that the three men have now left the consulate. This removes a difficult problem and will improve our ability to make representations to the South African Government on matters of concern.
    Mr. Proctor: I welcome the good news from Durban that my hon. Friend has just given the House. Will he take this opportunity to welcome the recent release of political detainees in South Africa?
    Mr. Rifkind: We are always delighted when the imposition of detention without trial is lifted. Naturally, both sides of the House will be concerned that charges have now been levelled against the men, but they will at least be able to answer those charges in court. The South African courts have a healthy reputation for independence.
    Mr. Anderson: Have the men been charged with treason following their leaving the consulate? Now that these three brave men are no longer in the consulate, will the hon. Gentleman adopt a rather more robust view about the "Coventry Four" in relation to South Africa?
    Mr. Rifkind: I am not aware that any charges have been levelled against the three men. My latest information is that the three men in the consulate were having a meeting with their families in the building in which the consulate was situated. We have already indicated our great concern at the South African Government's refusal to return the "Coventry Four".

  EUROPEAN COMMUNITY

    Budgetary Discipline
    Mr. Freemanasked the Secretary of State for Foreign and Commonwealth Affairs if he is satisfied with the effectiveness of the proposed new principles for European Economic Community budgetary discipline.
    Sir Geoffrey Howe: The principles agreed at Fontainebleau represented an important new step in the control of Community expenditure. Following the
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    adoption at Dublin of a text incorporating these principles, the Community now has at its disposal the means of implementing effective budget discipline.
    Mr. Freeman: I draw my right hon. and learned Friend's attention to article 5 of the agreement and ask him about two provisions. It is extraordinary, by normal business standards, that the overspending will be corrected within a two-year period and that let-out clauses will enable overspending not to be corrected in certain circumstances. Will my right hon. and learned Friend assure the House that overspending in the Community will be promptly corrected and that there will be no fudge?
    Sir Geoffrey Howe: The point made by my hon. Friend in his last sentence is plainly important. The arrangements for correction over a period are designed to take account of the circumstances in which the correction might need to be made. It is of the highest importance that this budgetary discipline arrangement should be applied with full vigour and that its purpose and intention are met.
    Mr. Deakins: Is control of public expenditure a matter of vital national interest for this country? If it is, why have we agreed to majority voting to deal with it in future?
    Sir Geoffrey Howe: Control of Community expenditure has been and remains of the greatest importance to this country. It is regarded as a matter of the highest importance by a number of other member states. For that reason, we have been able to achieve agreement on this text to secure effective implementation of budgetary discipline. The reason why the budgetary discipline text provides for the Council to set the reference framework by qualified majority is that we want the new budgetary discipline arrangements to be incorporated, as I think the House would want, in the Community's budgetary procedure. All decisions on budgetary procedure are taken by qualified majority. The essential point is the stipulation that, in future, agricultural spending should grow at a rate less than the growth in the own resources base, and the Commission has bound itself to draw up its price-fixing proposals in the light of that guideline.
    Mr. John Mark Taylor: As it seems likely that the European Parliament is about to reject the Community's budget, what advice will my right hon. and learned Friend give to the Council of Ministers? Will he take note of the fact that the last time the European Parliament rejected the Community's budget the Commission observed little discipline by way of sticking to the principle of one twelfth per month of the previous year's budget?
    Sir Geoffrey Howe: My hon. Friend has come at the end of his question to the point that arises at the beginning of his question. If the Parliament rejects altogether the 1985 draft budget, the Community will have to operate under the provisional twelfths regime within the 1 per cent. ceiling. It is important that that is done properly.
    Mr. Robin Cook: The Foreign Secretary was once Chancellor of the Exchequer. During the annual round of public expenditure reviews, would the right hon. and learned Gentleman ever have dreamt of accepting an undertaking from a Government Department that it would not spend more unless exceptional circumstances arose, as under article 2, or barring aberrant developments, as under article 5? Would it not have been abundantly plain to him as Chancellor that such a Department was fashioning the boltholes down which it hoped to escape? Therefore, why

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    should the right hon. and learned Gentleman invite the House to pretend that that is not precisely what the Community is also doing?
    Sir Geoffrey Howe: If the hon. Gentleman studies the budgetary arrangements in this country he will see that a number of Departments have rather more flexible arrangements over the control of expenditure than the ones about which he is now complaining. As Chancellor I was not necessarily happy with all of them. The arrangements that have been made, which were debated in the House yesterday, represent a substantial achievement as a means of securing effective budgetary discipline.

    Community Institutions (British Staff)
    Mr. Philip Oppenheimasked the Secretary of State for Foreign and Commonwealth Affairs what is the ratio of Britons to other nationals of member states employed by European Economic Community institutions.
    Mr. Rifkind: The overall ratio is about one to 10 for all staff and one to 6 in the highest grades. I am arranging for more detailed figures to be published in the Official Report.
    Mr. Oppenheim: Is my hon. Friend aware that Great Britain's agreed staffing quota of 18·4 per cent. of the staff of the EEC institutions is only just over half filled by British nationals? What steps does my hon. Friend intend

    British and other nationals in EEC institutions*

    A Grade

    Others

    Total number of officials

    United Kingdom officials (Per cent.)

    Total staff numbers

    United Kingdom staff members (Per cent)

    Commission

    2,527

    360 (14·25)

    7,155

    549 (7·67)

    European Parliament (Secretariat)

    373

    60 (16·09)

    2,288

    195 (8·52)

    European Investment Bank

    239

    41 (17·15)

    353

    36 (10·20)

    Council Secretariat

    178

    25 (14·05)

    1,535

    104 (6·78)

    Court of Auditors

    70

    7 (10·00)

    187

    19 (10·16)

    Economic and Social Committee

    45

    8 (17·78)

    370

    31 (8·38)

    European Foundation

    9

    3 (33·33)

    27

    1 (3·70)

    * The European Court of Justice has not issued the relevant statistics.

    Budgetary Discipline
    Mr. Deakinsasked the Secretary of State for Foreign and Commonwealth Affairs if the Council of Agriculture Ministers will be asked to approve the statement on budgetary disciplines before it is finally approved by European Economic Community Foreign Ministers.
    Sir Geoffrey Howe: No, Sir. The text on budgetary discipline was formally adopted by the Foreign Affairs Council in Dublin on 4 December.
    Mr. Deakins: Is the agreement by the Foreign Affairs Ministers legally binding on the Council of Agriculture Ministers? If it is not, why should it pay any attention to the agreement?
    Sir Geoffrey Howe: As the hon. Gentleman will recollect, there is only one Council of Ministers. It is sometimes attended by Finance Ministers, sometimes by Foreign Ministers and sometimes by Agriculture Ministers. The text represents a firm undertaking by the
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    to take to ensure that more of the 1,000 or so highly paid jobs involved go to British nationals, as they should, rather than to French and Belgian nationals as at present?
    Mr. Rifkind: My hon. Friend properly draws attention to what has been a problem. We have been exercising ourselves energetically in recent years to rectify the position. The position is now reasonably healthy in the higher grades, but there is still a problem to be resolved with some of the lower grades within the Community, particularly in agriculture, development of the budget, the secretariat, and the Council secretariat. We shall continue to make representations on those matters.
    Sir Anthony Meyer: Has my hon. Friend noted that the French Government have appointed as their two Commissioners their former Foreign Minister and former Finance Minister? If we wish to stake a claim to important posts within the Community, would it not be a good idea to appoint persons of that calibre rather than the two—I had better not say it—rather less than first-class political personalities whom we have chosen?
    Mr. Rifkind: My hon. Friend's remarks are unworthy. One of the two British Commissioners to the Community is a respected former Cabinet Minister, and the other was an important member of the previous Government. My hon. Friend does no service to the United Kingdom by suggesting that their qualifications are other than excellent for the jobs that they will occupy.
    Following are the figures:
    Council, which has committed itself to observe the provisions. It is an undertaking which is as valid and effective in relation to Agriculture Minister as to any others.
    Mr. Winnick: How does the Foreign Secretary compare his words about better financial discipline, and the rest, with the thousands of tonnes of beef, butter and milk powder that are being held in stores within the United Kingdom? Is the Foreign Secretary aware that I have a list of thousands of tonnes of such food? Will he use his influence to ensure that such food is sold at reduced prices in Britain and used for people in distressed areas? There are 2,000 tonnes of milk powder being held in one intervention store in the west midlands.
    Sir Geoffrey Howe: The hon. Gentleman correctly identifies one of the features of the common agricultural policy which must be reformed. It is being reformed as a result of the measures agreed by the Agriculture Council on 31 March this year. In regard to milk and butter production, total Community milk production is down by

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    3·4 per cent. this year, and butter production is down by 9·5 per cent. The reduction of present stocks and the problem of the creation of additional stocks are central objectives of the reform of the CAP, upon which the Community is now embarked
    Mr. Marlow: While my right hon. and learned Friend is rightly concerned to keep public expenditure strictly under control at home, can he explain to the House and the country why the Government have put their name to this ramshackle vessel, which will founder at the first squall?
    Sir Geoffrey Howe: Because they take a totally different view from the somewhat eccentric one to which my hon. Friend has for so long been committed.
    Mr. Wigley: Is the Foreign Secretary aware of the misgivings that many milk producers have that other EC countries may not be abiding totally by the quota agreement? Will he give the House an assurance that, if that is the case, we shall not screw our farmers down and suffer disproportionately as a result?
    Sir Geoffrey Howe: I am aware of the anxiety that is rightly felt by the farming community in Britain in that respect. In four other countries already the production is currently less than the total quota which has been allocated to them. One country, Italy, does not yet appear to have taken steps to implement the super levy, and the Commission has instituted infraction proceedings against Italy. We attach importance to the discipline being enforced effectively across the board.
    Mr. Budgen: If there is such widespeard and strong determination to enforce budgetary control, why has the payment of the super levy been postponed by all the nation states on so many occasions?
    Sir Geoffrey Howe: I suspect that, because of the way in which the market arrangements are going, the requirement for payment of the super levy has not yet arisen. The postponement to, I think, 14 December is being applied uniformly.
    Mr. Robin Cook: Has the Foreign Secretary observed that the Strasbourg Assembly proposed the insertion, on the revenue side of next year's budget, of an expected revenue of 120,000 ecu from payments of the super levy, and that the Commission has since deleted that entry on the ground that it does not expect to receive payments? Does not that speak volumes for the confidence of the Commission in its own system for controlling agricultural expenditure?
    Sir Geoffrey Howe: If the system operates so as effectively to reduce the output on a substantial scale, that will, of course, have an effect on the likelihood of the super levy being paid on the scale on which it would otherwise be paid. I think that chat must be the answer to the hon. Gentleman's question.

    European Union
    Mr. Knoxasked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement about progress made towards achieving the objectives set out in the solemn declaration on European union made by the Heads of Government at the Stuttgart summit.
    Mr. Rifkind: This work is being pursued in the two ad hoc committees set up at Fontainebleau last June. The
    1050
    Dublin European Council received interim reports from both committees and asked them to continue their work, and each submit a report in March for full discussion at the European Council in June next year.
    Mr. Knox: Does my hon. Friend agree that his answer indicates a disappointing lack of progress so far? What steps do the Government intend to take to ensure that progress is made rather more quickly and effectively in the future?
    Mr. Rifkind: The solemn declaration to which my hon. Friend's question refers calls for a review to be made not later than 1988. Based on the progress achieved by that date, a decision would be taken as to whether there should be a treaty on European union. Given that we are expecting a full discussion by European Heads of Government in June 1985, I cannot accept the implied criticism of my hon. Friend's question.
    Mr. Spearing: Does the Minister agree that, irrespective of any proposal that may emanate from the Heads of Government working parties, both the Heads of Government meeting and, therefore, the meetings of their working parties are extra-treaty? If the results of the working parties are placed before the Council of Ministers, as the Minister has just mentioned, will that not be a new genesis of legislation in the Community? Hitherto, proposals for legislation have come only from the Commission. Therefore, will not the whole of the working parties' proposals, irrespective of their mertis, be extratreaty and ultra vires?
    Mr. Rifkind: I do not think that there is any reason why the European Council cannot discuss or commission work on any issues that it thinks are relevant. If it wished to implement any proposals that were recommended to it, and if the implementation of the proposals required treaty amendment, the hon. Gentleman can be assured that that would be done.
    Mr. Forth: Will my right hon. Friend agree with me that in an enlarged Community, moving towards majority rule under agreements of this sort, the emphasis of policy-making and agricultural expeniture will shift inexorably to the south, and that that will cause a major reorientation of direction of Community policies and of expenditure, to our own detriment?
    Mr. Rifkind: With regard to any decisions that may be taken by a majority, the Community has already reached agreement with the applicant countries as to what a new qualified majority will require. It will require a sum that is significantly different, as a consequence of enlargement, to take into account the larger Community that we shall then have.

    Fontainebleau Agreement
    Mr. Foulkesasked the Secretary of State for Foreign and Commonwealth Affairs what progress has been made in implementing the Fontainebleau agreement.
    Sir Geoffrey Howe: A text implementing the Fontainebleau agreement on budget discipline was formally adopted at the Dublin European Council. The United Kingdom's 1983 refunds have been released and the bulk of the money has been paid. The Council has also reaffirmed its commitment that the United Kingdom's abatement for 1984 should be made on the revenue side of the budget in 1985, as agreed at Fontainebleau.
    Mr. Foulkes: Is the Secretary of State aware of the great concern in the House and beyond at the statement by the Economic Secretary to the Treasury in the debate last night, when he appeared to link the 1984 refund with the proposed increase in the Community's own resources and, even more worrying, with advancing that increase into 1985? Particularly because that increase in own resources has not been agreed by Parliament, can the Secretary of State give us a clear assurance that the United Kingdom refund and the abatement to implement that refund do not depend in any way on the agreement to increase the Community's own resources?
    Sir Geofrey Howe: All those matters have been considered together over many months, and the 1985 draft budget as sent to the European Parliament was accompanied by a Council declaration stating that funds would be provided to meet the Community's inescapable financial obligations and the United Kingdom's 1984 abatement. Nine member states agreed that additional financing in 1985 should be made available to own resources, and it is our hope that the other country—Germany—will soon agree.
    Mr. Dykes: Now that we are gradually getting used to working constructively with foreigners in the Community, would not my right hon. and learned Friend repeat the assertion that the commitment to majority rule that we encapsulated in our submission to the Fontainebleau conference is one of the best ways in which we and the other member states can begin to take the Community forward in some of the vital areas in the creation of a unified Community?
    Sir Geoffrey Howe: I agree with my hon. Friend that if the Community is to make the progress that we want towards effective unity of the market as a better opportunity for job creation in this country and throughout Europe it is important that the existing provisions for majority voting already in the treaty, to which we belong, should be put into action.
    Mr. Hill: Is my right hon. and learned Friend saddened, as I am, by the fact that when we talk of Europe, we talk only of the EEC? Are there not other institutions in Europe, such as the Council of Europe and the Western European Union? Was not the French initiative at the Fontainebleau conference to reactivate the WEU one of the most important decisions made this year by any Head of State?
    Sir Geoffrey Howe: I agree with my hon. Friend that there are many European institutions beyond the European Community, and I know of his association with the WEU Assembly. As a matter of fact, these questions are related to EEC matters. However, I also agree with my hon. Friend about the importance of WEU. I think that he will know of the declaration by my right hon. Friend the Secretary of State for Defence and myself at the Rome ministerial meeting of WEU that we regard the revitalisation and effective operation of WEU as a very important matter.
    Dr. Owen: Does the Foreign Secretary agree that when considering the treaties and the possibility of an umbrella treaty it would not be inappropriate to look at the Community in terms of a two-stream Europe, at least on political co-operation, and that the seven countries which
    1052
    are signatories to the WEU treaty would be a natural grouping within the European Community to discuss that all-important element in political unity—security?
    Sir Geoffrey Howe: The right hon. Gentleman raises wide-ranging questions. I would not readily subscribe to the idea of a two-stream Community, but I would subscribe to the idea that it is important for European countries to undertake effective discussion and consideration of security matters. I agree that the WEU, which comprises seven of the member states, is an appropriate place for that to take place. However, I would not want to regard that as exclusive or extinctive of political cooperation in the wider Community.

    Common Market
    Mr. Yeoasked the Secretary of State for Foreign and Commonwealth Affairs what recent steps have been taken to secure the practical establishment of a common market within the European Community.
    Mr. Rifkind: In September an important package of standards for industrial products was agreed. In addition, there has been progress on a British initiative for standards for the interconnection of computer and communications equipment, and in similar work on telecommunications. The directive on frontier facilities will enter into force on 1 January.
    Mr. Yeo: I am grateful to my hon. Friend for his answer. Does he agree that the process of wealth creation in this country and throughout the EEC is far more likely to be assisted by the establishment of a free market in goods and services than by any form of expenditure under the EEC budget? Will my hon. Friend give an undertaking to give the highest priority at meetings with his EC colleagues to sweeping away the remaining obstacles to such a free market?
    Mr. Rifkind: The United Kingdom considers this to be the greatest priority at present. I am pleased to say that in one of the ad hoc institutions to which I referred earlier the United Kingdom put forward recommendations for the early implementation of an equal internal market. This has been unanimously endorsed by the committee as a whole.
    Mr. James Lamond: Before the Minister gets carried away too far by the free internal market, will he tell us what steps are being taken to try to limit the damage that will be done to the British textile industry when Spain and Portugal join the Common Market?
    Mr. Rifkind: I can assure the hon. Gentleman that we are treating the industrial interests of the United Kingdom and of the existing members of the Community as an important priority. This covers a wide range of issues—not only textiles, but motor vehicles and a whole series of other matters which are important to the British economy.
    Several Hon. Members rose—
    Mr. Speaker: Do the points of order directly relate to Question Time?
    Sir John Farr: Mine is a point of order relating to questions.
    Mr. Speaker: Very well. I shall take it.
    Sir John Farr: My point of order relates to the format of Question Time today. Seventy-seven Foreign and

    1053
    Commonwealth questions were tabled, of which only 10 were reached, whereas six EEC questions were tabled, and in 20 minutes all six were reached. Mr. Speaker, I have drawn your attention to this anomaly on previous occasions, but it has been even more' aggravated and exaggerated today. Once again may I ask you to pass on to the usual sources that the division of Foreign and Commonwealth and EEC Question Time is not equitable at the moment?
    Mr. Winnick: Further to that point of order, Mr. Speaker. Is it not farcical that, excluding EEC questions today and, in the main, brief supplementary questions, the fact is that we have dealt with only 10 questions? I do not believe that any further questions were linked with earlier questions. Is it not necessary to protect the House so that when there is the opportunity to ask questions on foreign affairs we have more than 40 minutes in which to do so? It is only by raising points of order that we can try to ensure that the time which should be ours is given and duly allocated. It is farcical that only 10 questions, or perhaps nine, were reached on foreign affairs, and that no more will be taken until the next round.
    Mr. Norman Atkinson: On a point of order, Mr. Speaker. Is it not fictitious to ask what would happen to EC questions if foreign affairs questions took up all the time? Should not EEC questions take their chance along
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    with all other foreign affairs questions that are addressed to the Foreign Office? If it is looked upon in that way and if you yourself, were to support the protests that have been made about only 35 minutes being spent on foreign affairs questions, I am told that the Procedure Committee would pay much more attention.
    Mr. Hill: Further to that point of order, Mr. Speaker. I would suggest that it should be called, not EEC Question Time, but the European Institutions Question Time. There are frequently questions on other European institutions which override EEC matters.
    Mr. Speaker: I share the worry about the shortness of time available for foreign affairs questions. It is a matter not for me, but for the usual channels, whether the Order Paper is broken up as it is today with, effectively, 35 minutes allotted for foreign affairs questions and 20 minutes for EC questions. That should be taken up through the usual channels.
    I should tell the hon. Members who said that we had got through only 10 questions today that although Ministers do not always link questions, I seek to give preference to hon. Members who have subsequent questions on the Order Paper. I see from the indications that I have put on my Order Paper today that no fewer than 10 hon. Members who had tabled subsequent questions were called during the questions that were answered.

Entry Certificates
3.34 pm
Mr. Max Madden: On a point of order, Mr. Speaker. I apologise for raising a point of order that I have raised over the last three days—the proposal of the Foreign Office to introduce a charge for entry certificates I felt that it might be helpful to raise this point of order since Foreign Office Ministers are in the Chamber. As I have explained over the last three days, the advice I have received has been contradictory and has varied over the last three days.
I am now advised that the Foreign Office proposes to secure a Privy Council order on Tuesday to implement charges for entry certificates, which is a matter of considerable anxiety to Commonwealth citizens and their families. I understand that the order is not subject to any parliamentary proceedings, but will be available for scrutiny by the Joint Committee on Statutory Instruments which, conveniently, meets next on Tuesday.
The proposal is widely thought to be unlawful, because a right conferred by statute would be diminished if a charge were introduced for entry clearance certificates. It is also widely held that an appeal in the courts against payment of a charge would be successful. Therefore, I am desperately trying to avoid the Foreign Office and Parliament being embarrassed.
Could you, Mr. Speaker, make representations to ensure that whatever procedure the Foreign Office pursues in this matter will be subject to parliamentary proceedings and will enable my colleagues who are very worried about the matter to have an opportunity to debate the issue before implementation of the proposal, which I understand is scheduled for 1 January?
I should also be grateful if we could be given advice by the Leader of the House or the Foreign Secretary about what procedures will be pursued and an assurance that whatever procedure is used will give us all an opportunity to debate the matter before a charge is introduced.
Mr. Speaker: I undertook to look into the matter and I am still doing so. In relation to what the hon. Gentleman has just said, I presume that the statutory instrument will be scrutinised by the Joint Committee on Statutory Instruments. The Leader of the House will have heard what the hon. Gentleman said. Patently, it is not a matter for me, but I fully accept that it is an important subject on which hon. Members hold strong views.

Rate Support Grant (Wales)
3.36 pm
The Secretary of State for Wales (Mr. Nicholas Edwards): With permission, Mr. Speaker, I wish to make a statement about the Welsh rate support grant settlement for 1985–86.
I am today announcing to the Welsh consultative council on local government finance the details of the 1985–86 rate support grant settlement. Copies of the text of my statement to the consultative council, together with a number of key statistical tables, have been placed in the Library of the House. The rate support grant report has been laid before the House today and will be debated in the usual way. A copy of the report has also been placed in the Library. I will be announcing my decisions on the related capital expenditure issues in the near future.
The main features of the 1985–86 rate support grant settlement confirm the intentions that I announced in July. The total of relevant expenditure provision accepted for grants is £1,514·1 million. This comprises £1,309 million for current expenditure and £205·1 million for non-current items. Current expenditure provision—after allowing for the abolition of national insurance surcharge from next April and the greater role of the Manpower Services Commission in funding certain areas of further education — is £46 million or 3·6 per cent. more than the expenditure underlying local authority budgets in 1984–85, while the total of relevant expenditure is about 5 per cent. more than the comparable budgeted total for the present year.
Aggregate Exchequer grant will be £1,014·2 million comprising £149 million for specific grants, £26·5 million for transport supplementary grant, £2 million for national parks supplementary grant and £836·7 million for the rate support grants. Domestic rate relief is unchanged at 18·5p in the pound which costs £25·5 million, leaving £811·2 million as block grant. After deducting £600,000 for payments to specified bodies, the amount available for distribution to local authorities is £810·6 million.
The aggregate Exchequer grant of £1,014·2 million is £18·2 million or 1·8 per cent. more than the aggregate Exchequer grant provision in the main rate support grant settlement for the current year. Far more important for rating purposes, however, it is almost £50 million or 5 per cent. higher than the amount that authorities have included in their budgets for the present year, after allowing for the expenditure changes to which I have already referred. It represents 67 per cent. of relevant expenditure.
I believe that the settlement is very fair, and the consultative council has acknowledged that it represents an improvement on last year. That this is so owes much to the restraint which has been exercised by a majority of Welsh local authorities. Unfortunately, however, a small minority of authorities persist in spending in excess of their targets. I confirm, therefore, that I am setting targets for 1985–86 and grant penalties for exceeding those targets. I have retained the same basic system for determining next year's expenditure targets as that used in the present year but increased the weighting given to the grant related expenditure component.
The targets may require local authorities to make difficult choices in determining their spending priorities, but I believe that the targets are achievable by all authorities. Every authority's target gives a cash increase

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in its current expenditure. The minimum increase is 2 per cent. and the maximum 4 per cent. , after making allowance for the national insurance surcharge and further education changes. In addition, for authorities spending at or below target in 1984–85 I have added 0·5 per cent. to their current expenditure total. Thus the maximum current expenditure increase for such authorities is 4·5 per cent. in line with the projected rate of inflation for the economy as a whole. In aggregate, the targets that I am announcing today are £7·6 million higher than the provisional sum notified to authorities in the summer. The increase largely reflects the use of fixed interest rates and a slightly lower assumption for council house rents.
The grant withholding penalty for local authorities spending in excess of targets has been strengthened. The amount of grant withheld for excess expenditure up to 1 per cent. above target is 100 per cent. of that excess, but above that level the rate of holdback increases to a maximum rate of 150 per cent. for authorities spending 2 per cent. or more above target. This compares with a maximum of 90 per cent. in the current year, reached at 5 per cent. spending above target. I am retaining the arrangements under which any authority spending at or below target is exempted from both grant holdback and the close-ending adjustment. The incentive for local authorities with low rateable resources to achieve their targets has, in the past, been considerably reduced because I placed a limit on grant holdback for such authorities. This year, therefore, I am reducing that limitation by 50 per cent.
Block grant will be distributed in accordance with the formulae agreed by the Welsh local authority associations. I have decided to retain the existing block grant mechanisms which determine the distribution of block grant and the same safety net for limiting grant losses associated with changes in GRE—a maximum 4p loss at county level and 1p at district level.
One innovation that I am introducing this year is a forward indication of targets for 1986–87 and 1987–88. This will assist local authorities in their planning. I must emphasise, however, that these are indeed indications and that circumstances in which the Government have to review them cannot be ruled out. Whether those indicative targets will need to be transformed into formal guidance figures depends to a very large extent on authorities' performance next year. I have told the consultative council that if budget returns show that authorities, individually and collectively, are on course to spend in line with the Government's plans for 1985–86 I am prepared to examine with the associations whether an alternative means of containing expenditure and encouraging moderate rate increases is possible for future years.
As I said earlier, the settlement provides for an increase in both grant and relevant expenditure of about 5 per cent. more than authorities have included in their budgets for the present year, after allowing for certain expenditure changes. That is why, in a period of expenditure restraint, I regard the settlement as very fair. It is now up to the local authorities in Wales to respond sensibly and with restraint, and I believe they will. Given this and continued vigilance against spending excesses and manpower increases, it should be within their power to maintain satisfactory levels of service in key areas while keeping rate increases on average to levels comparable with inflation.
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I commend my proposals for the 1985–86 Welsh rate support grant settlement to the House.
Mr. Barry Jones: The right hon. Gentleman still operates a harsh system. Does he understand that the minuscule easing of the target figures and the prospect of forward indications of targets are welcome, although they are but small crumbs from his table? Has not block grant in real terms been cut—according to the calculation of the Association of District Councils by about £30 million?
Whatever future tinkering the right hon. Gentleman may propose, is not the penalty regime very much more severe than 1984–85? Beyond a 2 per cent. overspend, the rate of grant lost levels out at one and a half times the amount of excess spending. Is that not extremely harsh? in fact, will not the amount of grant to be taken away from Wales altogether and returned to the Treasury inevitably exceed the total overspending by Welsh local authorities, even though the overall excess over target is very small? Could not this be seen as a Welsh ratepayers' contribution to the Treasury?
On rate increases, is it not realistic to suggest that some authorities will not succeed in getting within their targets and that the average rate figures will go up more like 8 or 9 per cent. because of the severity of the penalty regime and the overall cut in aggregate Exchequer grant?
Is not the right hon. Gentleman being very coy indeed about expressing clearly a view on the effect of this statement on the standard and depth of local government services? Is he not aware that he is placing local authorities under intolerable pressures? Does he know that a typical Welsh district might have to make real savings of up to £250,000 to achieve a district rate increase in line with inflation? What will the right hon. Gentleman do to reduce the volatility in the Welsh rate support system as it affects the Welsh districts? I am informed that there will be differences in targets set of up to 30 per cent. —arguably from a 19 per cent. increase to a 10 per cent. decrease. I remind the right hon. Gentleman that there are also differences in grant-related expenditure of up to 19 per cent.
If authorities in aggregate manage to get down to the overall targets, will that not be a serious cost to the services provided to our beleagured communities? I have in mind the quality of maintenance on roads and buildings, the quality of administration, the closure of libraries, the increase in the price of school meals, the decline in the number of policemen and teachers and the decline in Welsh housing and industrial development.
Penalties have again been increased, the ratepayers' contribution has again increased while central Government's contribution has decreased, and aggregate Exchequer grant has again been cut. Does the right hon. Gentleman realise that he has put Welsh local authorities at very great disadvantage with his tightening of the financial screws? Under the right hon. Gentleman we have lost our democratic local government freedoms. We have lost 100,000 manufacturing jobs. One Welshman in five is out of work. The settlement will become known as a guarantee of social distress.
Mr. Edwards: Last year we heard from the hon. Gentleman the usual forecast of rate increases. He said that they would be well over 10 per cent. In fact, the average increase was about 8 per cent. Once again, this year, the

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hon. Gentleman has pitched the average a good deal higher than the inflation rate that I forecast. Once again, we shall wait and see the result.
The hon. Gentleman says that this is a harsh system. However, there are increases in relevant expenditure and in grant of 5 per cent. more than budgeted expenditure in the current year, which is more than the inflation rate. No one can say that that represents a harsh regime.
The hon. Gentleman referred to block grant cuts. It is true that since 1981–82 aggregate grant has grown by only 19 per cent. while there has been inflation of 22 per cent. Over that period, in cost terms, there was a fall of 3 per cent. which had to be borne by the local authorities. Over such a period, however, no one could describe that as a savage round of cuts.
The hon. Gentleman says that penalties are severe if targets are not met. However, all the evidence that I have suggests that the majority of authorities—certainly the majority of the counties — will meet their targets or come very close to meeting them. I have been able to tell Mid Glamorgan, for example, that, its final target being £1 million higher than the figure suggested in the summer, it is now within an almost minuscule percentage point of its target. Mid Glamorgan, too, should be able to meet its target.
The hon. Gentleman referred to the volatility of targets for districts. That volatility arises almost completely because of the rate fund contribution to housing revenue account. Districts decide either not to put up rents by as much as other districts, or to increase maintenance by much more than the average amount.
We all agree that targets are not an ideal system. I have made it clear to the local authorities and to the House that if we continue the progress made so far towards meeting the Government's objectives, I hope that we may move away altogether from the target system. We are on the road to achieving that result.
Finally, the hon. Gentleman painted the usual picture of the severity of effects on services. He cited some examples. I have before me figures for the expenditure of Welsh local authorities on education over the past seven or eight years. In terms adjusted for price and wage increases, we are spending more than, or almost exactly the same amount as, we spent seven or eight years ago. At the same time, there has been a fall of nearly 12 per cent. in the number of pupils. There has been no savage cut in that area, and it is a gross exaggeration to pretend that there has been.
Several Hon. Members rose—
Mr. Speaker: Order. I shall do my utmost to call all those hon. Members who wish to put a question. I ask hon. Members to make their questions succinct and brief. This matter will be the subject of an order later, and it will be debatable. This will be not a day for long speeches.
Sir Anthony Meyer: Is my right hon. Friend aware that there is general admiration for the way in which he manages to walk a very slack tightrope? The tightrope is slack because it lacks the necessary tension which would arise if local authorities were compelled to raise the money that they spend.
In that position, however, my right hon. Friend is vulnerable to cross-breezes. Is he aware that while there
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is still a determination that all waste should be cut out, there is also increasing anxiety lest essential services should start to suffer from a further increase in economies?
Mr. Edwards: I do not think that, when we are offering local authorities the ability to increase expenditure by slightly more than the rate of inflation without imposing severe rate burdens on them, there is any need for the type of suffering that my hon. Friend suggests might occur.
Mr. Michael Foot: Does not the right hon. Gentleman appreciate that one of the heaviest burdens that most local authorities in Wales have to bear, some more severely than others, is that imposed by heavy, mass and persistent unemployment? Should there not be, under this settlement, some form of arrangement by which the scale of unemployment is taken into account" Might not the settlement take into account, for example, expenditure that must be made to maintain skillcentres which the Government and others are not willing to assist us to maintain? Should not the right hon. Gentleman have have come to the House to say, among other things that in the rate support grant he will try to do something to rescue us from the cuts that he is imposing i a other spheres, such as massive cuts in regional aid for Wales?
Mr. Edwards: Some of the matters to which the right hon. Gentleman refers are taken into account in the GRE assessment. I note that the target of the right hon. Gentleman's Blaenau Gwent authority is well above the estimated inflation rate. In terms of the targets per head which have been set for English and Welsh counties, all of the eight Welsh counties are in the top 11 for England and Wales. That suggests that they are getting treatment which compares favourably with comparable authorities which face comparable difficulties elsewhere.
Mr. Alex Carlile: Does the Secretary of State intend to produce a simple guide to his statement and the documents that accompany it so that the people of Wales can understand the Government's meanness? Does he agree that a consequence of his statement, even in a well-managed and law-abiding county such as Powys, will be a decline in education provision, which has already led to the closure of a remedial education unit in Newtown. the closure of a special unit for teaching travellers' children in Welshpool and the closure of one-third of the school meals service in Powys? That is leading day by day to a decline in education standards about which head teachers are not being consulted properly because it is happening so suddenly?
Mr. Edwards: The simple way in which to put it, so that people can understand it, is to say that the grant provision is 5 per cent. higher than the amount which authorities have included in their budgets for the present year, which is above the anticipated rate of inflation, that Powys has a budget-to-target increase of 4·68 per cent., which is above the rate of inflation, that since 1981–82, Powy's spending has grown more than the general rate of inflation, and that I understand that that authority has resolved to meet its target. How it does that is for it to decide.
Mr. Keith Best: Is my right hon. Friend aware that three elements of his statement will be especially welcomed? The first is that we can see an end to targets, which none of us like. The second is the 5 per

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cent. bonus to local authorities — it can fairly be described as such. The third is the courageous attitude that he has now taken towards forward-planning, thus giving local authorities an opportunity of greater stability when planning. That is especially important in regard to stability of interest rates in supplementary reports. He is also giving indicative targets for the next three years—something that no previous Government have had the courage to do.
Mr. Edwards: I am sure that it is helpful to let local authorities plan. If they continue to co-operate as they have in the past, we could abolish targets. That would benefit everyone. Since 1979–80, Welsh local authorities' current expenditure has increased by 2 per cent. more than the increase in costs. Our aim is that, by 1987–88, current expenditure should be no higher in cost terms than in 1979–80. I do not believe that anyone can say that that is a severe regime. Against that background, it is absurd and a distortion of the truth to talk of slashing cuts in services.
Mr. Ray Powell: I appreciate your request, Mr. Speaker, for hon. Members to be brief, but as we have received a document of 85 pages and a statement of 15 pages about rate support grants in Wales, I have many questions to ask. The Secretary of State continually comes to the House with statements and prophesies further doom and gloom for Wales. Last week there was a £60 million cut from our regional aid, and today his statement is about a further reduction in grant in real terms to local authorities. Will he state how many local authorities will receive less grant aid in real terms next year than they received this year?
Page 5, paragraph 8, of the statement gives a figure of £46 million, which is 3·6 per cent. higher than that included in local authorities' budgets for 1984–85. The Secretary of State claims that that is within the 4·5 per cent. increase in costs projected for the economy as a whole. Will adjustments be made to allow for a further inflationary increase? Will he state the total reduction in grant aid to local authorities since he was appointed to office in 1979? Is the Government's message the same as before—
Mr. Speaker: Order. There is to be a debate on this subject. The hon. Member is making now the speech that he might well make on that occasion, if he were to catch my eye. In fairness to the House, there is another statement to follow this statement and a long day and night Committee sitting. He should confine himself to one question.
Mr. Powell: I promise that I shall not delay the House tonight because I shall not wish to catch your eye, Mr. Speaker, but this issue is so important to the ratepayers of Ogwr that I wish to ask the last part of my question. Does the Secretary of State expect ratepayers yet again to pay more for fewer services? How many jobs will be lost as a result of his statement? What services will suffer? Will they include the care for the elderly, our schools, the fire brigade and social services?
Mr. Edwards: I have given the hon. Gentleman the overall figures and I circulated to every Welsh Member the detailed schedule, which sets out the position for each local authority in Wales. It would be unreasonable to detain the House by giving the detailed answers that the
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hon. Gentleman requires. Ogwr has a target increase which is above the anticipated rate of inflation. For the reasons I have given, I see no reason to anticipate the slashing cuts in services, about which the hon. Gentleman loves to talk.
Mr. Keith Raffan: Will my right hon. Friend confirm that this extremely fair settlement will not harm the educational prospects of pupils in Clwyd? Does he agree that the maintenance of a high standard of education depends on the county council at last getting its priorities right and concentrating on its statutory obligations?
Mr. Edwards: I see no reason why there should be a great sacrifice by the education service in Clwyd. It is remarkable that the resources available and being spent on education in Clwyd, adjusted for cost and price increases, are substantially more than they where when we first had a separate Welsh rate support grant settlement. Indeed, it is about £10 million a year more than when the Labour Government made its slashing cuts in expenditure in 1977–78. There are more than 11 per cent. fewer pupils in the schools, and the pupil-teacher ratio in Clwyd is at its best ever.
Mr. Dafydd Wigley: Will the Secretary of State confirm that there has been no broad change in the definition of grant-related expenditure, and that it is broadly an assessment of the cost to a local authority of providing a standard of service comparable to other local authorities? If that is the case, why has Gwynedd this year once again a GRE of £97·2 million, but a target of only £94·4 million, which is £2·5 million less than the Government recognise as necessary to maintain the services?
Mr. Edwards: As the hon. Gentleman has had explained to him often before, targets are related not only to GRE but to previous expenditure patterns and to the pattern of expenditure that the local authority actually thought was right for the people in its area. He can hardly complain now and demand that the local authority should achieve the exact theoretical pattern of expenditure that creates GRE.
Mr. Ian Grist: Is my right hon. Friend aware that yesterday his right hon. Friend the Secretary of State for the Environment promised to send a "child's guide" to the rate support grant system to a number of hon. Members. Will he please send one to me? I am sure that I am not alone in being confused this afternoon. Will the Secretary of State say what effect his announcement will have on the city of Cardiff and the county of south Glamorgan?
Mr. Edwards: I sympathise with my hon. Friend about the complexity of these issues. South Glamorgan has a target increase above its budget of 5·19 per cent., which is well above the rate of inflation. I do not anticipate that it will have any difficulty in meeting its target. Since 1981–82 its current expenditure has grown a good deal more than the general increase in inflation and it has been a relatively low spender. I would think therefore, that it would have no difficulty in maintaining services and a low rate increase in the current year.
Mr. Donald Anderson: The Secretary of State will recall that we used to have a high domestic rate relief, partly because of our high water rates. He

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halved that domestic rate relief. As we are now likely to have higher water rates, will he increase the domestic rate relief?
Mr. Edwards: No, I shall not. I halved the domestic rate relief because I believed that it was currently a priority to give the maximum assistance to industry and to job creation. The change has been of great benefit to industry, and will help in our common objective of reducing unemployment. I am surprised, therefore, that the hon. Gentleman should suggest that we should go back on that move.
Mr. Tom Hooson: My right hon. Friend has done well in limiting himself to grant withholding as a method of discipline with the various local authorities. I note that among the counties the safety net needs to be applied only to Powys. Has not the time come to reopen the GRE need indicator, not only in relation to rural sparsity but at the opposite end of the scale, that is, where there is a high density of population?
Mr. Edwards: We have had this debate over a long period. We keep looking at the GREs of the local authority association. I would have thought that my hon. Friend would be glad that the limiter was used in that case and that we took account of the special problems of his county.
Mr. Donald Coleman: The right hon. Gentleman said twice when he introduced his statement that he believed that it was a fair statement. Does he recall saying the same thing last year? Why is west Glamorgan county having to reconsider having nurses in comprehensive schools, cutting the meals service and doing away with music and swimming tuition? What does his statement offer west Glamorgan? How will it affect the decisions that the county may have to make?
Mr. Edwards: I pay tribute to west Glamorgan, which has made a considerable effort to get within target. It started as a very high spender, relative to the GREs, which my hon. Friend the Member for Brecon and Radnor (Mr. Hooson) urged should be the basis on which we should proceed. We have allowed west Glamorgan a considerable period to adjust its expenditure from those high levels. It could meet its target, probably for the first time, on the basis of plans which it is now considering. I hope that it will do so, and that all Welsh counties will be able to meet their targets.
Mr. Stefan Terlezki: Does my right hon. Friend agree that in an ideal world it would be marvellous to have an unlimited amount of money to spend? But in reality where is the money to come from? We could print or borrow more money, which would cause higher inflation, higher interest rates and perhaps higher unemployment.
Mr. Edwards: I am sure that it must be a priority to keep down interest rates and domestic and industrial rates. The rate burden on industry has a considerable effect on jobs. I do not apologise for introducing a settlement that will help to keep down the general level of rates, as it has in recent years, to at or below the inflation rate.
Mr. Ted Rowlands: So that Mid-Glamorgan authority nearly reaches its target, will the Secretary of State estimate how many fewer teachers, home-help hours and school books there will be in the county?
Mr. Edwards: Adjusted for price and wage increases, personal and social service expenditure by Welsh local authorities has increased under this Government, and expenditure on education has been maintained, although Wales has nearly 12 per cent. fewer pupils. The reduction in teachers in no way matches the reduction in pupils. It is absurd for the hon. Gentleman to argue that there should not be some adjustment at a time of falling school rolls.
Mr. Gwilym Jones: Does my right hon. Friend agree that his statement will be welcomed in Cardiff, although some of my constituents might prefer the loonier councils in Wales to be swept away by an extension of the reform of local government that we shall debate later today? Does he accept that his statement will concentrate the minds of our local councillors and will force them to return to what they should do rather than to waste taxpayers' and ratepayers' money on items such as CND weeks and reality-free zones?
Mr. Edwards: Local authorities should consider carefully their expenditure priorities at a time when it is clearly important that they should hold down the rate burden.
Mr. Allan Rogers: The Secretary of State talks about industrial rates and the need to keep them down to attract industrialists to the valleys and communities of south Wales. Does he accept that a major criterion used by industrialists in coming to Wales is that there is a reasonable social infrastructure for them to move into, and that the continual cut in resources for Wales is a disincentive to industry to invest there?
Mr. Edwards: It is not a continual cut in resources for Wales. There is an increase above the expected rate of inflation in relevant expenditure and in aggregate grant. The target for the Rhondda is well above the expected rate of inflation. As the hon. Gentleman was informed in the Welsh Grand Committee only today, we are launching a major new road scheme for the improvement of his constituency.
Mr. Peter Hubbard-Miles: Is my right hon. Friend aware that Mid-Glamorgan county council decided recently to take £3 million from capital reserves rather than to make the necessary economies in this year's budget, which will result in a shortfall next year of £6 million? That decision was taken against the advice of the treasurer and the leader of the Labour group, who put his proposals to the Labour group but who was defeated by 31 votes to 19, although he remains the leader.
Mr. Edwards: My hon. Friend is right to draw attention to the dangers inherent in putting off difficult decisions. Mid-Glamorgan's spending has increased by 4·1 per cent. more than inflation since 1981–82, and there is a danger that if it does not make the necessary changes it will store up difficulties for itself.
Mrs. Ann Clwyd: If the Secretary of State believes, as he said in answer to my hon. Friend the Member for Rhondda (Mr. Rogers), that the infrastructure is adequate, does he expect to attract more Japanese companies to Cynon Valley? If he does, will he assure us that those companies will not require workers to retire at the age of 35?
Mr. Edwards: I am not sure that the hon. Lady's latter point arises from this statement. I welcome Japanese

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investment, but the policy statement issued by that company was not one of the finest examples of Japanese management techniques.
Dr. Roger Thomas: In the light of what the Secretary of State called his generous statement, may we look forward to headmasters in his constituency and mine — they are adjacent — giving up the idea of demanding £5 from hard-pressed parents to pay for inadequate school resources?
Mr. Edwards: It is about time that Dyfed authority got down to the job of considering the details of its budgeting and what has been happening with its financial arrangements, because it is hard to see why it is confronted with such difficulties. Its target increase is above the inflation rate, yet it is on course to exceed that target by £1 million. Instead of encouraging schoolmasters to campaign, the authority should have a thorough and proper re-examination of its finances.
Mr. Ron Davies: Does the Secretary of State appreciate that the message that will go to Wales following the statement is that there will be a further reduction in resources to Welsh local authorities, and that the penalties for the authorities which cannot comply with the Government's guidelines will be even harsher? Does he further understand that, as the total money available to local authorities decreases, an increasing percentage of cuts will be made in the provision of statutory services? That means that less money will be available for discretionary measures, which either improve the quality of life or are employment-related schemes. Does the Secretary of State agree that the statement will lead to a diminution in the quality of life, especially in the valleys of south Wales, and to an increase in unemployment?
Mr. Edwards: I am sure that strange messages will go out from hon. Members such as the hon. Member for Caerphilly (Mr. Davies), who are more anxious to make political points than they are concerned with reality. The 80 per cent. block grant has hardly altered since we first made a separate Welsh rate support grant settlement, and the suggestion that hunks of discretion will be removed from Welsh local government is not true.
Mr. John Watson: Is my right hon. Friend aware that I do not represent a Welsh constituency, but that I represent the rest of Britain, which must foot the bill?
Hon. Members: Oh!
Mr. Speaker: Order. An hon. Member who represents an English constituency has the right to participate in Welsh debates. We shall all be interested to learn how the hon. Gentleman can relate Skipton and Ripon to this statement.
Mr. Watson: Will my right hon. Friend tell the House what proportion of local authority spending in Wales will be covered by the rate support grant that he announced this afternoon, and how that proportion will relate to most constituencies in the rest of the United Kingdom, including Skipton and Ripon?
Mr. Edwards: The rate support grant proportion of 67 per cent. is based on completely different rateable values in Wales than in England. The real difference, which accounts for the settlement today being somewhat easier than the settlement in England, is that the Welsh local authorities have made a considerable effort to achieve the expenditure targets set by the Government. They have come close to doing so, while the minority of high-spending authorities in England have failed to do so, have enormously overspent on the Government's targets, and are still paying the price for that overspending.

Agriculture Council
4.19 pm
The Minister of Agriculture, Fisheries and Food (Mr. Michael Jopling): With permission, Mr. Speaker, I should like to make a statement about the meeting of the Council of Agriculture Ministers in Brussels on 10 and 11 December, where, with my hon. Friend the Minister of State, I represented the United Kingdom. Much of the meeting was taken up with further discussion of the new structures package. No agreement was possible on the basis of a compromise from the presidency. I emphasised the need for consistency between the costs of the structures measures and a decision, which has still to be taken, on the finance available for guidance expenditure over the next few years.
On the milk supplementary levy, the Commissioner said the that Commission was determined to ensure that the system was applied according to the rules in all member states, and that they would withhold funds for financing the dairy sector where the rules were not being observed. With most other Ministers, I emphasised the importance of proper and uniform application of the rules in all member states. Nine member states, with Denmark abstaining, adopted a statement noting that there are still technical and administrative difficulties concerning the application of the system in certain member states, and inviting the Commission to allow postponement of the first payment until the end of the marketing year. The Commission is expected to consider this matter at its meeting today.
During the discussion, I emphasised again the urgent need for the Commission to come forward with proposals to allow more flexibility between the dairy and direct sales quotas.
I raised again the issue of the price of natural gas for Dutch horticulturists, on which the Commission has instituted legal proceedings under the treaty. I urged the Commission, pending the outcome, to require suspension of the aid. The Commissioner said that the Dutch had already been asked to suspend the aid complained of. The question of recovery would be considered when the case was decided.
I also pressed the Commission on the French beef aid. The Commissioner confirmed that the French Government had notified this aid in accordance with the treaty, following the refusal of the Council at its last meeting to endorse the payments. The Commissioner confirmed that meanwhile no payments should be made.
In discussion on changes in detailed provisions on sparking wine, I refused to withdraw my opposition until I had received assurances that illegal procedures applied to United Kingdom whisky imports into Italy would be discontinued. I am happy to report that, after consulting Rome, the Italian Minister gave fully satisfactory assurances both that import procedures applied in future would allow imports at the lower rate of duty and that the excess duty charged would be refunded as quickly as possible.
In the veterinary sector, the Council reached agreement in principle on a proposal on charging for red meat and poultrymeat inspection. We have explained the need for the Community to reach early agreement on the harmonisation of inspection standards under the poultry meat hygiene directive. This made it possible to adopt the
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other outstanding issues in the veterinary package otherwise agreed at the June Council. These include satisifactory trading arrangements to protect the United Kingdom, including Northern Ireland, and the Republic of Ireland and Denmark against foot and mouth disease.
Mr. Brynmor John: I thank the right hon. Gentleman for making that statement, but he will not be surprised to hear that it has raised more questions than it has answered. For example, concerning the last paragraph of his statement, will he confirm that the previous agreement makes it possible for an import charge to be made to cover the costs of inspection of New Zealand lamb? If so, what is likely to be the extent of that charge? The poultry industry in Britain will be fairly unhappy at a decision that again harmonises charges in advance of the harmonisation of standards, which means that our more rigorous standards will feed through into higher costs in the shops.
There are a few shorter points to be made. For example, France seems to be still adamant about beef aids. I hope that the Minister will be equally tough if any question is raised about continuing our variable beef premium.
The wine lake was discussed at the Council of Ministers. What does the agreement amount to? Does it mean a genuine agreement to effect a genuine cut in wine production or is it, as one fears, a potential cosmetic fiddle which will put money into the pockets of people who remain in the industry?
What will be the effect of the Finance Ministers' demand to be consulted before any structures agreement arrived at by the Agriculture Ministers is agreed? Will that happen and has it been agreed that it will happen? Will the Minister confirm that, as the structures agreement affects only 4 per cent. of the agricultural budget, it will be a minuscule control on the profligate agriculture budget of the EEC?
Did the Minister—I suppose from his statement that he did not—and his fellow Agriculture Ministers discuss the increasingly important question of mounting cereal surpluses, which will be greatly augmented by this year's monster harvest? Did they consider the likely effect of the United States 1985 Farm Bill, which is likely to add some £900 million to the cost of EEC cereal export subsidies? If Ministers have not yet discussed that, I recommend that they do so, so that they can avoid the sort of haste, panic and muddle that has characterised the dairy quotas scheme.
The main part of the statement relates to the decision to ask the Commission to postpone the super-levy until March. The Minister rightly said that the Commission is meeting today. Has he heard what results have been arrived at? Is it likely that the Commission will agree to a request for postponement, and if not, what will happen? What will happen to the Northern Ireland dairy industry as a result of the withholding of the first £60 million by the Commission, for example? The Minister will know that the dairy industry in the United Kingdom is in complete confusion. Does he accept that, at the very least, this further decision will prolong its anxiety?
This decision — coupled with the failure of two countries even to try to implement the scheme, and the fact that on the latest figures, five countries are over their quotas of production—will lead many people to doubt whether the milk quota scheme will ever be properly implemented. On top of that, there is a threat by the

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Commission that it will direct imports of fresh milk into this country. Is it any wonder that the dairy industry is confused and has lost faith in the Government, who launched into the scheme without anticipating any of the problems, however simple? Are we not in danger of being the only ones in the Common Market who are in step?
Can the Minister confirm that our inability even to fulfil our quota will not penalise us in the future, and will he use the present gap to try to obtain a more sensible scheme? The Select Committee has already criticised the over-hasty British scheme. Our dairy farmers, who have already made the sacrifice, will properly demand a fair deal and fair implementation throughout the Community. Will the right hon. Gentleman stake his reputation on getting that?
Mr. Jopling: The hon. Gentleman has asked a great many questions, which I shall try to answer. His first question was on the veterinary measures that I announced. The package provides for a charge on imports of meat from third countries to cover the costs of the limited inspection that is carried out. There has been provision for such a charge since 1972, although it has not been levied. The charge will not be implemented immediately. Charges have to be fixed by January 1986, so there will be further discussions on the implementing arrangements next year. New Zealand has known about this all along. It has not made representations to my Department. Domestic slaughterhouses are already subject to meat inspection charges.
The hon. Gentleman asked about beef, and in particular about the beef variable premium scheme. As he knows, this is something for which we fought, and, with great difficulty, we succeeded in keeping it within the package agreed at the last price review. There is no doubt that it will be one of the closely argued issues at the next price review. I see no reason to change the present arrangements, but the hon. Gentleman and the House will understand that the scheme has no friends in any other country in the Community. We did not enter into a detailed discussion of the wine situation following the agreements that were recently reached in Dublin.
The hon. Gentleman then asked me a question about the financial implications of the structures proposals. As I understand it, the arrangement is that the matter will be discussed at ECOFIN — the Council of Ministers (Economic and Finance)— when it meets to consider what the financial ceilings should be in relation to the structures directives.
The hon. Gentleman rightly said that the cereal surpluses are a crucial factor in the CAP. However, that subject was not on the agenda this time. Nevertheless, the cereal position was the subject of a good deal of discussion between Ministers in the margins of the Council. The hon. Gentleman also asked me about the United States Farm Bill, and I am hoping to meet Secretary Block within the hour to discuss that. He will also discuss that point with the Commission in Brussels before the end of the week. The hon. Gentleman also asked me about the Commission's decisions on milk. It is considering the requests for a general delay at its meeting today. First reports are that it has decided to make no changes to the regulations, but there has not yet been any formal response
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to the Council's request. Thus, I cannot anticipate what the situation will be until we receive a formal response from the Commission to the request from the Council.
Mrs. Elaine Kellet-Bowman: My right hon. Friend said that he had drawn the Commission's attention to the need for flexibility as between direct sales and dairy sales quotas. Is he making any progress on that, and when are we likely to hear that such flexibility has been achieved?
Mr. Jopling: My hon. Friend will have heard me say before that this issue involves the clearest case of unsatisfactory rules within the present milk levy arrangements. I think that I have raised this matter at every meeting of the Agriculture Council since June, but regrettably so far to no effect. One difficulty in recent weeks is that we have had a lame duck Commission, as the Commissioner and many members will not continue in office after the end of the year. However, I assure my hon. Friend that I shall continue vigorously to press that important point.
Mr. David Penhaligon: Can the Minister confirm that there is only the remotest and faintest possibility this year of any levy being raised on the dairy farmers of England, Scotland and Wales? Can he also confirm that if it is to be raised, it will probably be raised by so little that there will be no logic in discouraging any dairy farmer in Britain from producing milk between now and next April? Were liquid milk imports discussed? If so, what is the present position?
Mr. Jopling: The hon. Gentleman will have seen the most recent figures, which show that when the period between April and October 1984 is compared with the same period for 1983, it is clear that the United Kingdom's milk production fell by 8·7 per cent. As he will know, that fall was largely assisted by the drought. I think that farmers have had sufficient information from various sources to show that it would be possible to produce more milk in the remainder of the year than in the first part of it and still not have a levy commitment at the end of it.
The hon. Gentleman asked me about imports of liquid milk, but that subject was not discussed in the Council of Ministers. However, he may have read in the press that our present arrangements have recently been questioned by the Commission. We are considering the situation and will decide, in due course, what response to make.
Sir Peter Mills: Yes, but will the Minister put down a real marker next time he discusses milk imports in the Community? If they were imposed in addition to the problem of quotas, it would mean a very serious blow for British dairy farmers. Will he make it quite clear that we are not prepared to allow such milk to be imported until the health problem, including that of foot and mouth disease, has been cleared up, together with the whole problem of nationally subsidised production and the freedom of our producers to export their products to the Community? At present, that is not the case with sheep.
Mr. Jopling: I endorse much of what my hon. Friend has said and am grateful to him for saying it. He is right to home in on the public health problems, which are central to milk importation.
Mr. Norman Buchan: Is the Minister telling us that the central issue at present—the cereals

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surplus—was discussed only on the margins, when we are witnessing the biggest emergency and famine that the world has faced for many years? What is the present estimate of the cereal surplus and, how much will it cost? Will he repudiate the statement of the Tory chairman of the Tory group of Members of the European Parliament that they should sell that surplus, rather than giving it, in order to help solve the problems of Ethiopia?
Mr. Jopling: I had better not get into the business of repudiating, or not, any Member of the European Parliament. I have enough on my plate dealing with the comments of hon. Members. Perhaps the hon. Gentleman is not aware of a question that I answered earlier about the last Council, where we discussed in depth the problems of world famine and the cereal situation. But on this occasion we had a particularly heavy agenda. Of course, the whole subject of cereals will come up in the course of the discussions on the price fixing for 1985, which we shall no doubt start early in the new year.
Mr. Eric Forth: Has the Agriculture Council considered the likely effect of enlargement on the Community and on agricultural policies, in that the shift in balance and political influence in the Community will put much greater pressure on the northern countries and their products because it will put greater emphasis on Mediterranean so-called products and prices? Is my right hon. Friend concerned about that? Is the Council doing anything about it?
Mr. Jopling: My hon. Friend will remember that responsibility for dealing with the problems of enlargement lies mainly with the Foreign Office. But of course the Council of Agriculture Ministers has given a good deal of thought to the problems of Mediterranean products within the Community. As one who, like my hon. Friend, attends the Fisheries Council, I should add that fisheries represents another important area where Spanish fishing, in particular, could have great effects on existing members of the Community.
Mr. William Ross: Which states have difficulties in applying their rules over the milk supplementary levy? Is it true that some of those states now believe that the milk quota system is impractical, given the conditions that they face? Will the right hon. Gentleman confirm that a United Kingdom quota on milk is just a United Kingdom quota, and that no supplementary levy will be paid by the United Kingdom unless other states follow the rules and until the United Kingdom quota is exceeded?
Mr. Jopling: No doubt the hon. Gentleman will have seen statements that my right hon. Friend the Prime Minister and I have made in the past about the payment of levies. As a farmer, he will be aware that, because we have opted for formula B, these matters are based on the various milk marketing boards within the United Kingdom. Therefore, it is a fact that for the first six months of the milk year, a levy is due from Northern Ireland. However, the hon. Gentleman may like to know that milk production is down in most member states, including Denmark, France, Germany, the Netherlands, Belgium and the United Kingdom, and that from April to September milk deliveries in the Community were down on the same period last year by 1·7 million tonnes.
Mr. Andy Stewart: Does not my right hon. Friend agree that it would be misleading to talk about cereal surpluses if the cereal substitutes allowed into the Community were eliminated?
Mr. Jopling: My hon. Friend may recall that the matter of cereal substitutes — mainly maize gluten feed and citrus pellets—has caused a great deal of discussion in the Council of Ministers. The Council did not discuss it on this occasion, but we have always resisted limitations upon those importations. I have no doubt that when I meet Secretary Block within half an hour, that will form a major part of our discussions.
Mr. Tam Dalyell: Just what are we going to do about the Dutch horticulturists with their subsidised Groningen gas? Does not the Minister understand that hon. Members from central Scotland who represent glasshouse owners know that they are becoming absolutely distraught because of the unfair competition? I understand from the Minister's statement that there are to be legal proceedings. Is it fair to say that the Dutch have cocked a snook at the Commission in the legal proceedings? Knowing the Amsterdam lawyers, may I ask the Minister whether there is any likelihood of their arriving at a conclusion before the mid-1990s, by which time many of the tomato growers we represent will be out of business and down the chute? What will the Minister do about it?
Mr. Jopling: I am not going to enter into an argument with the hon. Gentleman about whether Amsterdam lawyers are any more pernicious than Scottish or any other lawyers. That would be inappropriate. It is a matter of the hon. Gentleman to judge.
I have made it quite clear that our view is that the Commission should have acted more quickly and that we expect the Commission to pursue the matter in the European Court if the Dutch do not comply. We extracted from the Commission yesterday a statement that it has already asked the Dutch Government to desist from that practice. I took particular trouble at a meeting with Mr. Braks, the Netherlands Minister, on Monday morning to express my serious displeasure at the way the issue has developed.
Mr. Nicholas BudgenIs it true that five countries are now eligible to pay super-levy? Will my right hon. Friend explain why the payment was postponed if it is true that there is a general, serious and widespread political desire throughout the Community to restrain agricultural expenditure?
Mr. Jopling: My hon. Friend has not counted very well. As I understand the matter, the Commission's view is that seven countries are due to pay levy. Some have collected it, some have said they will pay and there are disputes with other countries. The crucial aspect of the operation is to ensure a uniform attitude towards the behaviour of member states as regards complying with the law and the regulations. That is much more important than any short-term arrangement. We must ensure that everyone complies with the law.
Mr. J. Enoch Powell: How can supplementary milk levy be due from the United Kingdom if its milk production is not exceeding its quota?
Mr. Jopling: As the right hon. Gentleman will see from the regulations, these matters are assessed under what we call formula B, on a dairy basis. For the purposes

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of the United Kingdom, especially for wholesale deliveries, we have treated the five milk marketing boards as the dairies. The levy and the quota are based on that. That is why there is levy due in Northern Ireland, but not in Great Britain.
Mr. Edward Leigh: When my right hon. Friend spoke to his colleagues about cereal surpluses, did he impress upon them his view that they should be dealt with not at the last moment by a bureaucratic quota but by a price mechanism? Cereal farmers need an element of certainty. Above all, we need to take more grain out of intervention stores by relaxing controls on restitutions and export credit.
Mr. Jopling: I am grateful to my hon. Friend because, for a long time, I have said that the way to deal with the cereal surplus is through the discipline of price and not through some bureaucratic horror such as quotas or co-responsibility levies.
Mr. Dafydd Wigley: On milk, did the Minister make it clear, and will he now make it clear to the House, that, if any other state—Italy appears to be the culprit—does not comply with the requirements, we will reserve the right not to comply ourselves and to take whatever unilateral action is necessary to safeguard our dairy producers?
Mr. Jopling: As I said earlier, the hon. Gentleman will have seen what both I and the Prime Minister have said on this matter. We must be a little careful about Italy; a special derogation in the regulations agreed last March, because of the peculiar problems of Italy and Greece, provides that their assessment for levy is made on the basis of 12 months, whereas the other eight member states are treated on a shorter-term basis.
Mr. David Maclean: I congratulate my right hon. Friend on his stance in the Agriculture Council in pressing for flexibility in milk quotas. What progress is he making towards a system of leasing of quotas?
Mr. Jopling: I am grateful to my hon. Friend for those kind remarks. I have said many times that I am sympathetic to the prospect of leasing quotas. The present system of attaching the quota solely to the land is a great deal too rigid. In the end, we will have to make it more flexible, as well as dealing with the adjoining matter of direct and wholesale quotas.
I am afraid that it has proved impossible to get the outgoing Commission to change the rules. I shall give my hon. Friend the same assurance that I gave my other constituency neighbour, my right hon. Friend the Member for Lancaster (Mrs. Kellet-Bowman), that I shall press on as hard as possible with this matter when the new Commissioner is in office.
Dr. Roger Thomas: My hon. Friend the Member for Pontypridd (Mr. John) mentioned the disarray in the dairy industry. Does not the Minister fear that that is due to the tardiness of the distribution of secondary quotas? Will he extend the outgoers scheme to all farmers, irrespective of farm size, on a partial surrender basis?
Mr. Jopling: With a great deal of difficulty, I managed to obtain £50 million for the outgoers scheme. It looks as though that will be spoken for—I hope so. I am afraid that there are no prospects at the moment for an extension of that.
I wholly reject the hon. Gentleman's suggestion about disarray.
Mr. Tony Marlow: How did the Council of Ministers defend the cereal support system, under which, for example, if United Kingdom agriculture receives a bonus issue of 4 million tonnes of cereal from the Almighty over and above that which is required by farmers to satisfy their appetites and their bank managers, the taxpayer will have to put his hand in his pocket and find an additional £100 million at least, at a time when the Government are trying to cut back in other areas?
Mr. Jopling: Under the rules as they stand, there is an open-ended commitment to pay. My hon. Friend should recall that there has been a dramatic drop in cereal prices this year, which has been to the benefit of the livestock industry. He should also remember that this year, for the first time, the guarantee thresholds should bite very hard on cereal prices. Our estimate is that they should lead to a reduction of 5 per cent. in cereal prices at the next price fixing.
Mr. John Watson: How strong an assurance can my right hon. Friend give that production by British dairy farmers next year will not need to be reduced as a result of over-production by some continental dairy farmers this year?
Mr. Jopling: I have every hope that that will not happen. In fact, that thought has never seriously crossed my mind. Certainly, we would strongly resist any such suggestion. As I said to the House the other day, people in the Community speak to me with a good deal of envy about the drought we had in the summer, which has greatly helped us to reduce our milk production level.
Mr. Mark Hughes: I am grateful to the Minister for making this statement on the Agriculture Council. I ask your advice, Mr. Speaker, about Questions Nos. 1 and 175 on today's Order Paper, which call for written answers. Both those questions were asked by the hon. Member for Banff and Buchan (Mr. McQuarrie) and both asked for a statement on the Fisheries Council meeting which was held on the same day as the Agriculture Council meeting. It is curious that we need to have two questions about the same Council.
Mr. Jopling: I regret to say that I have not studied the Order Paper sufficiently to note that fact. With customary foresight, my hon. Friend the Member for Banff and Buchan (Mr. McQuarrie) has tabled questions on days when he thought it was likely that there would be a report on a meeting of the Council of Ministers.
Mr. John Home Robertson: Twice?
Mr. Jopling: If my hon. Friend has tabled the question twice, that is a totally admirable belt and braces policy.

Teachers (Scotland)
4.51 pm
Mr. Donald Dewar: 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 Government's refusal yesterday to have an independent pay review for teachers in Scotland."
The matter is specific, because yesterday the Secretary of State for Scotland announced that he was refusing what the Opposition believed was a thoroughly justified claim. The Minister made the announcement by written answer, which gave the House no opportunity to call the Secretary of State for Scotland to account.
This matter is important, because, as a result of the right hon. Gentleman's intransigence, we are faced with the prospect of a protracted period of disruption in our schools which could be disastrous for teachers, for parents and, above all, for pupils. If the teachers are right in thinking that their salaries have fallen behind those of comparable groups, they deserve justice. If they are wrong, the Secretary of State has nothing to fear from an independent inquiry.
The House should have an immediate opportunity to probe the reason why teachers in Scotland can obtain redress only at the price of accepting a sharp deterioration in their conditions of service. If there is no debate, and Ministers do not reconsider their position, there will be serious consequences, deepening the mood of anger and resentment in our schools, a mood which the Minister responsible for education in Scotland—the hon. Member for Eastwood (Mr. Stewart)—described in the House last night in an insensitive and unhappy phrase as "hysterical".
The Opposition's sense of urgency is reinforced by the knowledge that there will be widespread industrial action in Scotland's schools during the next few days. Teachers expect the House to have flexibility and a sense of priority of such an order as to allow it to respond to their outrage. In that expectation, they will have widespread support from Scottish public opinion. For those reasons, I ask you, Mr. Speaker, to consider this application sympathetically.
Mr. Speaker: The hon. Member for Glasgow, Garscadden (Mr. Dewar) asks leave to move the Adjournment of the House for the purpose of discussing a specific and important matter that he believes should
have urgent consideration, namely,
"the Government's refusal yesterday to have an independent pay review for teachers in Scotland."
I have listened carefully to the hon. Member's speech, but I regret to say that I do not consider the matter that he has raised as appropriate for discussion under Standing Order No. 10. Therefore, I cannot submit his application to the House.
Mr. Norman Buchan: On a point of order, Mr.Speaker.
Mr. Speaker: No point of order can arise on that subject.
Mr. Buchan: On the contrary, Sir. I completely accept your ruling, but, it has been alleged that the Minister responsible for education in Scotland described the teachers' response as "hysterical". The hon. Gentleman
1076
appeared just now to deny that. Is is possible to give the Minister the opportunity to tell us exactly what he said if he did not use the word "hysterical"?
Mr. Speaker: That is not possible now.
4.54 pm
Mr. James Wallace: I beg 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 postponement of the announcement of the introduction of phases II and III of the standard grade examinations in Scottish schools as a result of industrial action by Scottish teachers."
This is an important and specific subject. As the hon. Member for Glasgow, Garscadden (Mr. Dewar) said, last night the Under-Secretary of State for Scotland announced that, following consultation with the Convention of Scottish Local Authorities, the Government have agreed to the postponement of phases II and III of the standard grade reform of the curricula in Scottish schools.
It is clear that phase I covers English, mathematics, science and social and vocational skills, and phases II and III cover all the other subjects. It is clear that the subjects in which there is to be a postponement of the reform cover a wide range. It is clear also that such an important reform of Scottish education is falling and crumbling around the Government's ears.
This matter is urgent because, although phases II and III were not scheduled to come into operation until 1985 and 1986 respectively, the important preparatory work to bring those phases into operation must be done now.
The hon. Member for Garscadden has referred to the industrial action, which is part and parcel of this matter, and which is holding up the reforms. That industrial action is related to the Government's action—or rather inaction —in dealing with the teachers' justifiable claims for an independent pay review.
I therefore submit that this is an important and urgent matter. I ask you, Mr. Speaker, to grant this application and allow the House the opportunity to challenge the Government's educational policies in Scotland, which are rapidly pushing Scottish education into an ever-deepening crisis.
Mr. Speaker: The hon. Member for Orkney and Shetland (Mr. Wallace) 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 postponement of the announcement of the introduction of phases II and III of the standard grade examinations in Scottish schools as a result of industrial action by Scottish teachers."
I regret to say that I must give the hon. Member the same answer I gave the hon. Member for Glasgow, Garscadden (Mr. Dewar). I have listened carefully to what the hon. Member said, but I do not consider that the matter he has raised is appropriate for discussion under Standing order No. 10. Therefore, I cannot submit his application to the House.
4.56 pm
Mr. Tam Dalyell: On a point of order, Mr. Speaker. My point of order involves statements of ministerial speeches that are placed in the Library. Mr. Deputy Speaker will recall that, last night, I asked for the speech of the Under-Secretary of State for Scotland to be made available in the Library, and the Scottish Office

1077
Ministers courteously made such arrangements. The Library copy of the statement—I do not know whether it has the official status of the Hansard report—states that I asked:
"A what reaction—historical or hysterical?"
The Minister replied:
"I understood that there has been a hysterical reaction to this point."
That may not appear in the Official Report, but it certainly appears in the report placed in the Library. Does that Library report have official status?
Mr. Speaker: A paper in the Library does not have the status of a statement in the House. I cannot comment on any ministerial statement placed in the Library or the language in which it is couched. The report may have been uncorrected.
Mr. Donald Dewar: Further to the point of order, Mr. Speaker. I do not want to delay the House, because I realise that my colleagues have important business to transact, and we are all looking forward to helping them.
It is clear that the Minister responsible for education in Scotland indicated forcefully when I made my Standing Order No. 10 application that he had not used the word "hysterical". The word appears in what I understand to be an official report. We shall check the details tomorrow. I presume that this will be a correct report. I hope that the Minister accepts that, in referring to the reaction of the principal teachers' union, he used a word which I regard as unfortunate — he said that its members were "hysterical".
Mr. Speaker: That is as may be, but it is not a matter for me.

Teachers (Scotland)

  SCOTTISH AFFAIRS
  Ordered,
  That the matter of the Oil Industry in Scotland, being a matter relating exclusively to Scotland, be referred to the Scottish Grand Committee for its consideration. — [Mr. Major.]

Orders of the Day

  Local Government Bill
  (Considered in Committee)
  [MR. HAROLD WALKER in the Chair]

  Local Government Bill
    Clause 1

      ABOLITION OF GLC AND METROPOLITAN COUNTY COUNCILS
      4.59 pm
      Mr. Jack Straw: I beg to move amendment No. 1, in page 1, line 8, at beginning insert
      'After a Royal Commission has reported on local government in Greater London and the metropolitan counties and'.
      The Chairman of Ways and Means (Mr. Harold Walker): With this it will be convenient to discuss the following amendments: No. 2, in page 1, line 8, at beginning insert
      'After a Parliamentary tribunal of inquiry has reported on local government in Greater London and the metropolitan counties and'.
      No. 3, in page 1, line 8, at beginning insert
      'After a review of metropolitan counties under the provisions of the principal Act has reported on local government in Greater London and the metropolitan counties and'.
      No. 4, in page 1, line 8, at beginning insert
      'After a committee of inquiry has reported on local government in Greater London and the metropolitan counties and'.
      No. 5, in page 1, line 8, at beginning insert
      'After the Audit Commission has reported on local government in Greater London and the metropolitan counties and'.
      No. 6, in page 1, line 9, after 'force', insert
      'and after the Secretary of State has laid before Parliament proposals for an independent inquiry into the administrative implications of the proposed reorganisation of local government in London and the metropolitan counties'.
      No. 7, in page 1, line 9, after 'force' insert
      'and after a referendum held in each of the areas of the Greater London Council and the metropolitan county councils in which a majority of those voting have approved the proposed abolition of the council in each of the areas concerned'.
      No. 19, in page 1, line 15, leave out '1st April 1986' and add
      'such day as may be appointed by an Order by the Secretary of State after the Royal Commission referred to in subsection (1) above has reported'.
      No. 20, in page 1, line 15, leave out '1st April 1986' and add
      'such day as may be appointed by an Order by the Secretary of State after the review of the metropolitan counties under the provisions of the principal Act referred to in subsection (1) above has reported'.
      No. 21, in page 1, line 15, leave out '1st April 1986' and add
      'such day as may be appointed by an Order by the Secretary of State after the Parliamentary tribunal of inquiry referred to in subsection (1) above has reported'.
      No. 22, in page 1, line 15, leave out '1st April 1986' and add
      'such day as may be appointed by an Order by the Secretary of State after the committee of inquiry referred to in subsection (1) above has reported'.

      1079
      No. 23, in page 1, line 15, leave out '1st April 1986'
      and add
      'such day as may be appointed by an Order by the Secretary of State after the Audit Commission referred to in subsection (1) above has reported'.
      No. 24, in page 1, line 15, leave out 1st April 1986'
      and add
      'such a day as may be appointed by the Secretary of State after a referendum has been held in each of the areas of the Greater London Council and the metropolitan county councils to coincide with the local elections to be held in May 1986 in which a majority of those voting have approved the proposed abolition of the council in each of the areas concerned'.
      No. 35, in page 1, line 15, leave out '1st April 1986'
      and add
      'such dates as the Secretary of State shall by order appoint, after he has laid before each House of Parliament reports of independent local inquiries setting out proposals and recommendations for the future administration of local government in the Greater London Council and each of the metropolitan counties, such order to be laid before and approved by a resolution of each House of Parliament.'.
      Mr. Straw: The departure of my hon. Friend the Member for Copeland (Dr. Cunningham) as I stood up, was not designed to reflect upon anything that I was about to say. We have started rather late and the time coincides with a meeting of the parliamentary Labour party's parliamentary committee.
      The purpose of these amendments, with two exceptions, is essentially the same — to provide that there should be proper inquiry before the abolition of the Greater London council and the metropolitan counties is proceeded with. The inquiries are variously to be held by a Royal Commission, a parliamentary tribunal or the Audit Commission. In addition, there are other amendments which have the similar effect of ensuring that the proposals are subject to greater scrutiny. One of the amendments
      proposes that if abolition is to go through there should be direct elections to all the presently indirectly elected
      boards and quangos to which most of the functions of the present metropolitan counties and the GLC are to be
      transferred.
      It is notorious that the Bill's proposals were cobbled together in haste without proper consultation or consideration even within the Conservative party, let alone outside it. As we have heard, and it has not been expressly contradicted, they were against the expressed wishes of the Conservative party policy committee.
      My hon. Friend the Member for Copeland wrote last
      week to the Prime Minister to remind her that the right hon. Member for Old Bexley and Sidcup (Mr. Heath) had
      said in the House, with all the authority that he commands, that the manifesto commitment was included nine days after the 1983 election was called and against the wishes of the Conservative party policy committee. A week later, we have had no reply from the right hon. Lady.
      The Secretary of State for the Environment (Mr. Patrick Jenkin): The reply, the terms of which I have seen, is on its way. If it is of any help to the hon. Gentleman, and so that he does not go on flogging a dead horse, the date to which my right hon. Friend the Member for Old Bexley and Sidcup (Mr. Heath) referred in his speech was the date upon which the manifesto was published. The idea that the commitment was inserted on the day of publication is fanciful. On the hon. Gentleman's second point, it is not for my right hon. Friend the Prime Minister to make public statements about internal party committees.
      Mr. Straw: If it is not for the Prime Minister, who should comment about the internal organisation of the Conservative party? It is she who runs the Conservative party.
      I note with interest that this is the third intervention that the Secretary of State has offered on this important matter. At no stage has he explicitly denied the charge of his right hon. Friend the Member for Old Bexley and Sidcup, his former Prime Minister, that the commitment was included in the manifesto against the wishes of the Conservative party policy committee. I see that someone is about to give me some information on this.
      Mr. Tony Favell: I shall give the hon. Gentleman information not on the Conservative party's manifesto but on that of the Labour party. Will the hon. Gentleman tell us why the Labour party manifesto says:
      "we aim to end, if we can, the present confusing division of services between two tiers of authority. Unitary district authorities, in England and Wales, could be responsible for all of the functions in this area that they could sensibly undertake."?
      Mr. Straw: That is an entirely unexceptional statement which talks about ending the division of services if we can and suggests that district authorities could be responsible for them. Had we been elected as a Government there would have been the most careful consideration of the matter. We should have listened carefully, as we have in the past and as our record shows, to representations made to us.
      As so many Conservative councillors have made clear, whatever else the Bill does, it does not create unitary authorities out of the present two-tier structure; it makes a two-tier structure into a four-tier structure and transfers power to the Secretary of State. The result of the haste is that this measure is ill-considered and without merit. So much so, that the Government's case rests upon shifting sands. First, they said that the proposal was all about savings, and nothing else. We all know about the £120 million.
      When the Minister for Local Government reached the Department he evidently decided that the argument about savings was not as strong as we had been led to believe. For 18 months the Government had been promising us details of that £120 million, but could never come up with it. The Minister then issued a statement saying that that was not the main issue but that the proposal was all about devolution to the boroughs. That is nonsense and a deception, according to the Conservative councillor, Mr. Robert Mitchell. I am sure that our ever-flexible Friend the Minister will offer some other explanation this afternoon.
      The proposal is so ill thought out that the Government have failed to convince even those people on serious newspapers who at other times have been regarded as the Government's allies and supporters. Today, the Financial Times said:
      "there are certain criteria which must be fulfilled for these changes to be accpetable. The first is that the new arrangement has a reasonable chance of being an improvement on the old. The second is that accountability is not reduced, so that pressure for efficiency and sensitivity to local aspirations is not diminished. The third is that democracy and democratic principles are neither weakened nor violated. The Bill fails on all three counts."
      I could not have said it better myself. I notice the odd guffaw at that suggestion from the Financial Times, which is, of course, the mouthpiece of international capitalism — as people may say — and a supporter of the Government, but how about the "old thunderer" The Times

      1081
      which has been cerebrating in its support for this Administration? Two editorials attacked the proposals. One said:
      "The abolition bill can be examined in vain for any expression of a general philosophy of the role of government in society, or doctrine of fiscal limits. It is a document lacking any sense of future … It is a document lacking coherent principles for local administration."
      The second said:
      "Ostensibly about devolving powers to districts and boroughs the local government bill becomes in too many places a recipe for decentralisation … this excess of ministerial discretion … they are a recipe for private government and the abuse of power."
      Those views are backed by those who normally support the Conservative Administration—the London Chamber of Commerce and Industry, the British Roads Federation and even Alcoholics Recovery Project.
      Mr. Tony Banks: They could do some good business in this place.
      Mr. Straw: I am sure that that was an all-party reference.
      The Government went through a consultation process. They denied the Library and hon. Members copies of the documents which were submitted to them by way of consultation, as well they might, because they were overwhelmingly against the proposals. Out of 780 submissions analysed by outside bodies, 750 were against, only 10 in favour and 20 could not be classified.
      Why are the Government in this mess? First, because their motives for the change are fundamentally suspect. We know that the real motive for the change was not that they thought that change was needed on its merits but because they objected to the policies being democratically carried out by democratically elected Labour authorities.
      The second and associated reason for the mess is that the proposals were not thought out before they were brought forward. As the Prime Minister told the nation in her Carlton club lecture last week, the Conservative party claims to be the party which respects the conventions and traditions of Britain. The Bill flies in the face of all convention and of all principles of good government.
      Every previous change in local government has been preceded by a serious and independent inquiry in which the people concerned have been able to put forward their views before and not after the Government have made up their mind and set their proposals in concrete.
      The establishment of the county councils—including the London county council, in 1888—was preceded by years of public debate and consultation. Recently the Secretary of State referred to the fact that Lord Salisbury had opposed the London county council in 1898, but I remind the right hon. Gentleman that it was Lord Salisbury who sponsored the establishment of the London county council in 1888. Later he may have repented for the same reason as the Secretary of State is now proposing the removal of an elected authority for London. Lord Salisbury repented later because the elections in London did not go the way that he had wished, but it was he who proposed the measure, and his hon. Friends helped to push it through this House. Whatever their subsequent comments about the policies of the LCC, at least previous Consevative administrations, even when the LCC elections went the wrong way, were willing to allow an elected authority for London to continue.
      1082
      The London Government Act 1962 was preceded by the most serious consideration, not only by the Herbert Commission but within the wider confines of the London community. I remind Conservative Members that someone who was at that stage a leading light in the Conservative party, and is now the right hon. Member for South Down (Mr. Powell), was a director of the London Municipal Society, which held an inquiry into the running of Greater London and produced serious and well worked out proposals—with which the Labour party did not agree — for London to be split into seven large boroughs. The Government did not say that they would act on those proposals. They looked at them and at other proposals and set up a Royal Commission, so that the matter could be considered with great seriousness, with people having a chance to put forward their views.
      With regard to the government of the country outside Greater London, the Labour Government between 1964 and 1970 could have implemented proposals which suited their political book. It is a testament to the Labour Administration — as it is to the Conservative Administration under Macmillan—that they did not do so. They recognised that they were dealing not simply with party advantage but with a central part of the running of our democracy. So, again, there was a full inquiry, under Lord Redcliffe-Maud, before any proposals were made.
      With regard to three of the six metropolitan areas, Lord Redcliffe-Maud recommended that there should be two-tier government. In paragraph 3 of Chapter I the report said:
      "In the special circumstances of three metropolitan areas around Birmingham, Liverpool and Manchester, responsibility for services should be divided in each case between a metropolitan authority … and a number of metropolitan district authorities".
      To the extent that Conservative Members are now recommending unitary authorities—that is what they say but it is not what they are doing—the case for unitary authorities is overwhelmingly the strongest in the shire areas, where there are free-standing towns without surrounding conurbations. I look forward to the Secretary of State at last recognising that that is where the logic of his arguments will lead. What will he say to the proposals of the last Labour Government for organic change in the shire areas, which were carefully worked out, the subject of the widest consultation, and supported by Conservative as well as Labour Administrations? Does he believe that what is sauce for the goose in the Labour conurbation areas is also sauce for the gander in the Conservative shire areas?
      The Secretary of State for Transport and his right hon. Friends have called for an inquiry into the GLC's lorry ban. The Secretary of State-I understand his reasons said:
      "If people are adversely and discriminately affected by matters such as a new road … the Government have no hesitation in allowing a public inquiry."
      He added that it was a question
      "of individuals being adversely affected compared with others." —[Official Report, 7 November 1984; Vol 2, c. 138.]
      5.15 pm
      If people are to be adversely affected by a lorry ban, how much more will people be affected by the abolition of the GLC? If there is a case for an inquiry into a lorry ban, there is an overwhelming case for an inquiry into the Bill's proposals, which would have a far greater impact on people in the areas concerned.

      1083
      We have heard a great deal about the Conservatives' manifesto commitment and we have all read it. The Conservative party claims to be the principal upholder of the parliamentary system, so it should never be seen to override the will of Parliament and the need for important proposals, such as those in the Bill, to be scrutinised on their merits. When I talk of the will of Parliament I do not mean the use of a parliamentary majority to effect elective dictatorship of the offensive kind that Lord Hailsham once exposed and which the present Government have been practising.
      I suggest to the Secretary of State that the manifesto commitment in no way precludes the reference of that commitment to a Royal Commission. If the Government were to set up such an inquiry, it would still be open to them, within the lifetime of this Parliament, to bring forward proposals, if they wished to do so, in exactly the same form as the pesent proposals. Such proposals would have a great deal more legitimacy behind them, having been the subject of independent scrutiny.
      The Secretary of State should have listened more closely to his predecessor, the right hon. Member for Henley (Mr. Heseltine), who said:
      "At any time it is possible to carry out a review of the 1972 Local Government Act, and for my money the longer the settling-in period the more factual evidence we shall possess upon which to make informed judgments."
      The right hon. Gentleman said that in 1979. Only five years have passed since the first elections following a reform of local government—the first serious attempt at that task since Queen Victoria sat on the throne. The right hon. Gentleman went on to say:
      "We are agreed that we do not seek another major reorganisation of local government because we are certain that change in this field is likely to be expensive and divisive."
      The Secretary of State's Conservative predecessor was right when he said that in 1979, and he is right now.
      Mr. Reg Prentice: I voted for the Bill on Second Reading, I expect to vote for it on Third Reading, and possibly once or twice in between, but very selectively, because it is a Bill that I dislike in many respects. I particularly dislike the way in which it was born.
      I voted for the Bill on Second Reading for one reason only. Given the fact that the Bill was before the House and that we had to make a broad decision on whether we believed in the continuation of the GLC and the metropolitan counties, my own view on balance was against them. I think that those authorities are too large to be local authorities and too small to be regional authorities; therefore, I want to see some change. But I dislike the way that the change was brought about.
      I have a great deal of sympathy with the analysis of the hon. Member for Blackburn (Mr. Straw). I suggest to my right hon. and hon. Friends that a major change in the structure of local government in Britain should take place only very occasionally, and then only after the most careful study and consultation. I suggest that about twice in a century is sufficient. Such a change should be preceded probably by a Royal Commission or by some other deep study of that kind. I think that we are due for a Royal Commission or some such study into the structure and financing of local government.
      We have had several studies in the past, but they have tended to be either of structure or of the method of financing local services. All were unsatisfactory for that
      1084
      reason. We should now have a major study of both together. It would have been compatible with the election pledge to set up a Royal Commission now, for it to report during this Parliament and then for the Government to make up their mind on their proposals towards the end of this Parliament, to be implemented in the following Parliament.
      At the very least, if we do not go down the road of a Royal Commission, I suggest that there should have been a much longer period of consultation before the Government ever made that firm commitment in the election manifesto. It is rather absurd to put such a pledge into a manifesto, at a late stage, without consulting the local government world in general, and without even consulting Conservative councillors up and down the country or even Conservative councillors on the GLC and the metropolitan counties. Many of them have resented that, and they are right to resent it.
      It seems to me that the pledge went into the manifesto basically because in the last Parliament the Government had failed to find an alternative to the rating system. Having failed to do so, and having disappointed the expectations of people up and down the country who looked for a change, there seemed to be a move in the leadership of the Conservative party, saying that Conservatives had to do something about the rates and wondering what could be put into the manifesto. One outcome was the unfortunate Rates Bill and the second is the Local Government Bill. That is not the way in which such major decisions should be made. I might vote for the amendment, or my right hon. Friend the Secretary of State, by his eloquence, might persuade me to abstain. One way or the other, I cannot vote with the Government.
      I do not seriously expect the Government to accept the amendment. I expect them to go ahead with the Bill. Given the broad choice facing us, I am in favour of a change away from the large authorities, but I suggest to my right hon. Friend and the Government that unfortunately in the past few years they have produced an atmosphere in their relationship with local government, including Conservative-controlled local authorities, that is very unhappy and has caused a great deal of resentment. Several of their friends feel that they take local government too much for granted and do not sufficiently respect its traditions and successes. If I am told that that is unfair, I can only say that that is what is often said to me by county and district councillors in my constituency, and by other people whom I meet elsewhere. I hope that the Government can, in various ways, begin to put that right. It is in that spirit that I speak briefly in favour of the amendment.
      Mr. John Cartwright: It is a pleasure to follow the right hon. Member for Daventry (Mr. Prentice), because I agreed strongly with two of the points that he made. First, he argued that the existing GLC and the metropolitan counties are too large to be genuine local government and, in some respects, have the wrong boundaries and powers to be effective regional government. That is absolutely right. That is why there is a case for re-examining our metropolitan government in London and the metropolitan counties. Secondly, I agree that we make a great mistake in looking at the structure of local government and its financing in isolation. It means that we get the wrong structure and the wrong financing system, when we should look at the two together.

      1085
      The Government are most vulnerable on this Bill because it is not the result of any independent analysis. The hon. Member for Blackburn (Mr. Straw) rightly said that before the London government reorganisation we had the Herbert commission report and before the reorganisation in the metropolitan areas outside London we had Redcliffe-Maud. It is fair to say that the Government of the day did not stick to the recommendations of either report—they produced different formulations—but the two reports provided a basis of independent assessment against which one could judge the Government's proposals. That is not what we have in this Bill.
      Mr. Patrick Jenkin: The hon. Gentleman cannot be allowed to get away with that statement. We should compare what was finally enacted in the Local Government Act 1972 with the Redcliffe-Maud report which, after all, recommended 61 unitary authorities across the country, and we ended up with the present pattern of shire counties and districts. When one makes that comparison, how can the hon. Gentleman say that one decision flowed in any way from the inquiry that preceded it? It is as different as chalk from cheese.
      Mr. Cartwright: I am sure that the right hon. Gentleman would not want to misrepresent what I said. I was not arguing that the one flowed from the other. I said that the independent assessment provided a background and evidence against which to judge what the Government were doing. Many of us who thought that Redcliffe-Maud was right were able as a result to oppose the local government reorganisation proposed in 1972 by the then Secretary of State for the Environment. I was saying that the independent analysis was there, and provided some independent judgment. There is nothing of that sort available against which to judge what the Government are now proposing.
      We are talking about a very important area — the government of the capital and of the most important urban areas of this country. To make a change on the basis of a sudden commitment produced at the beginning of a general election campaign, if not in the heat of the campaign, is not the right way to go about it. The effect is that the commitment that was given has had to be made good in a hurry. I am reminded of the experience of the noble Lord Shinwell, who has from time to time commented on the problems that he faced when he took over the Ministry of Fuel and Power. He was given the job of nationalising the coal mines and discovered that there were no plans to nationalise them. The same sort of problem seems to have befallen the Secretary of State. No doubt when he walked into the Department of the Environment after the general election in June 1983 and said, "Let me see the proposals for the abolition of the GLC and the metropolitan counties," the civil servants had to say that no detailed proposals had been worked out.
      Mr. Patrick Jenkin: Rubbish.
      Mr. Cartwright: I should be interested to see what evidence the right hon. Gentleman has that there were any detailed— [HON. MEMBERS: "Give way."] The Secretary of State has not signified that he wishes to intervene at the moment. If he has any evidence that detailed proposals had
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      been worked out either in Conservative Central Office or in the Department of the Environment, I am sure that the Committee would be interested to hear it.
      What we have to go on is the White Paper entitled "Streamlining the Cities". That document appears to have been cobbled together at such speed that the joins show. If one wanted evidence of that, I suggest that it came rapidly in that snowstorm of hastily duplicated consultation documents which came whistling out of Marsham street as civil servants discovered that many practical problems had not even been addressed in "Streamlining the Cities".
      Two domestic problems in my constituency have still not been sorted out. One is the problem of Thamesmead new town. The Government have still not reached a conclusion on the final arrangements for Thamesmead, which is a new town of the 21st century being developed by the GLC. It falls within two London boroughs, neither of which is anxious to take it over or has the resources to take it over. The Government are saying that the best solution that they can find is to set up a trust to take over responsibility for the development of Thamesmead. At this point, they have no firm proposal for such a trust. We look forward with great interest to seeing how that idea works out.
      5.30 pm
      If the proposal for the abolition of the Greater London council had been worked out in such detail, the Secretary of State would have some difficulty in persuading me that at this stage we should be discussing what on earth to do about the problem of a major housing development like Thamesmead.
      My second example is that of the Woolwich free ferry. It is now run by the Greater London council. Before that, it was operated by the London county council. After the abolition of the GLC, who is going to run the Woolwich free ferry? Neither the London borough of Newham nor the London borough of Greenwich has the resources or the capability to run it. When the matter was raised in the House and outside, there was a clear statement from the Government that the ferry would continue as a free ferry, but who is going to run it we do not yet know. When I took up this point with the Minister of State, Department of Transport, I received a very civil letter from her in which she said that it was a very good question and that if I had any solution to the problem would I kindly let her have it. This shows that on what is no doubt a minor matter for the Government but an important matter for Londoners, this proposal has not been thought through.
      Mr. Laurie Pavitt: Does the hon. Gentleman say that the same kind of consideration as for the ferry occurs in relation to the upkeep of the Blackwall and Rotherhithe tunnels?
      Mr. Cartwright: No. They are run on a different basis. They are not the direct responsibility of the ferry which has been operated on a free basis for generations by the GLC and the LCC. The argument I am putting to the Committee is that this is another example of legislation on the hoof, something which has not been thought through and which has been produced under pressure.
      If we are considering that kind of approach to the government of major urban centres in this country, I do not believe that that is the way to go about it. I agree with the right hon. Member for Daventry. He argues that if we are

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      going to change the government of these important parts of the country, we ought to produce the kind of change which will last for a very long time. I do not believe that the proposals which are now being put before the Committee can possibly last. They are being imposed for political reasons. They have not been thought through. They are confusing to the electorate. They will be costly to administer. They involve a major switch of power and influence from local government to central Government.
      The case which can be made against the Government on this batch of amendments is that they clearly do not want the best available system of government for London and the metropolitan counties. They wish to impose their system without any independent assessment of what they are doing. I hope that, even at this late stage, they will grasp the opportunity provided by these amendments. I have little faith that they will, but, nevertheless, we shall support this group of amendments.
      Sir Ian Gilmour: I should like briefly to support the proposal for an inquiry before this legislation proceeds. My right hon. Friend the Member for Daventry (Mr. Prentice) explained how he voted for Second Reading, although he had considerable reservations about the Bill. I did not vote for Second Reading, although I had and still have sympathy with some of the objectives of the Bill. I did not vote for Second Reading because I believe that the legislation is feckless and ill-considered. Therefore, it could only be very seriously improved if there were an inquiry. As my right hon. Friend the Member for Daventry said, local government matters are peculiarly unsuitable for rushed and ill-digested legislation. This Bill comes under that heading. I have every sympathy, therefore, for my right hon. and hon. Friends who are caught up with this legislation.
      Let me give one example—waste disposal. Funnily enough, the GLC runs waste disposal very well, to the considerable advantage not only of London but of the surrounding counties. To break up that waste disposal activity would be irresponsible and would involve considerable disadvantages for Greater London and the home counties. That is just one example of the problems caused by' a Bill being brought forward before the Government have thought through the matter. It will have very damaging consequences.
      There has been no consultation about the Bill and there has been no attempt to obtain wide support for the Bill's proposals. As Conservatives, we ought to be aiming for that. Not even to try to hold consultations over local government matters is surely a considerable mistake and will result in grave problems.
      When moving the Second Reading my right hon. Friend the Secretary of State said that he did not believe that anybody would wish to live with a structure that would inevitably lead to the sort of conflict that we have seen. That may well be true, but surely my right hon. Friend does not believe that these proposals will not lead to just as much conflict in the future. Indeed, they will probably lead to a great deal more conflict.
      My right hon. Friend takes 123 powers in the Bill. Not all of them are new powers; nevertheless, 123 different powers are mentioned. I suggest that that will lead to a great deal of conflict, and probably even more conflict
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      than last year's measure—ratecapping—is likely to lead to before very long. Therefore, an inquiry would be a great benefit.
      Mr. Bernard Brook-Partridge, the GLC Conservative member, recently wrote an article in which he described this legislation as
      "the last-minute, unconsidered, un-thought-out, 'populist', ignorant, insulting and constitutionally illiterate proposals relating to the GLC and the Metropolitan Counties",
      and said that they
      "should be dropped immediately in favour of either a short, sharp, properly constituted public inquiry or an immediate acceptance of the fact that London-wide services should be discharged by a refined, 'slimmed-down' GLC or by a new London Assembly, democratically elected and publicly accountable".
      Those are strong words. I would not go quite so far myself. Nevertheless, they contain a certain amount of truth.
      Mr. Robert C. Brown: I support all the amendments which stand in the names of my hon. Friends. In my view, these amendments expose very well the basic weaknesses of this squalid Bill. It is sometimes seen as a badge of honour for a Secretary of State to pursue a Bill which he knows is not acceptable to the country. It would be much more of a badge of honour and would require much more courage if the Secretary of State were to go back to his Cabinet colleagues, even at this late stage, and say that this hastily cobbled Bill is not worth wasting a large amount of time during this parliamentary session.
      There is no denying that this Government have not been prepared to hold proper, meaningful consultations or a proper form of inquiry before deciding to ride roughshod over one third of the population of the country, including that part of the country which I have the privilege to represent. I refer to the area of the Tyne and Wear county council. In my opinion and in the opinion of the vast majority of my constituents, it has done an exceptionally good job, measured by any standards, during the 10 years since the creation of the metropolitan counties by the previous Tory Government.
      My concern is that all the traditions of previous Administrations — of not being prepared to undertake major local government reform in advance of an independent inquiry or a Royal Commission—have been flung to the winds by this Government. The Local Government Act 1972 was preceded, as my hon. Friend the Member for Blackburn (Mr. Straw) said, by the Redcliffe-Maud Commission. In fairness to the Tory Government at that time I should say that they were implementing the recommendation to set up two-tier authorities in the metropolitan areas or major conurbations — hence the creation of the metropolitan county councils.
      I am equally concerned that the review procedures that Parliament established by the 1972 Act, which required a review of local government to be undertaken within 10 to 15 years, have been completely ignored. Parliament decided that a major review should be undertaken within 10 to 15 years. We are in the 11th year, yet the Government have introduced a Bill which rides roughshod over one third of the population and over the will of Parliament.
      At the Tory party conference, the Secretary of State announced a major review of local government finance. That was not done out of a genuine desire to consider what should replace the rates, a subject on which the Prime

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      Minister waxed so eloquent two elections ago when she committed the Tory Party to the abolition of the rates. We are still waiting. The Secretary of State was so embarrassed when he thought of the hoo-ha that would occur at the Tory party conference if he did not give some sort of undertaking that he promised to set up an inquiry into local government finance.
      I give the right hon. Gentleman credit for promising at least to do something, but, having agreed to examine the financial structure of local government, the right hon. Gentleman should have gone on to look at local government as a whole.
      I did not support the establishment of the metropolitan county councils. I make no apology for that, because I still believe that we should have major regional authorities, with all-purpose authorities under them. However, the best method of local government can be determined only by the sort of major inquiry proposed in the amendments.
      The Bill is bound to have major knock-on effects. It will have implications for the whole of local government and not just for the GLC and the metropolitan county councils. The PA Management Consultants report has already pointed out that many shire areas have larger populations but fewer powers than the metropolitan districts. That is why there must be full consultation on the structure and financing of local government as a whole before any changes are made in the conurbations.
      The Government have rejected consultation. Not only have they not commissioned an inquiry into their proposals, but they have paid little or no regard to the response to the White Paper "Streamlining the Cities". On their own analysis of responses, published in the summer, fewer than 10 per cent. of those consulted supported abolition. The Secretary of State has consistently refused to publish the responses to help us have a considered debate on the issues involved in the Bill.
      We have not been told the views of 90 per cent. of those who responded to the White Paper, but I could quote ad nauseam hundreds of comments that condemn the Bill line by line, just as we shall be doing in the months ahead.
      Mr. Barry Porter: I had not intended to speak in the debate. I avoided speaking on Second Reading because I thought that if I showed any enthusiasm for the Bill I might be put on the Standing Committee. I came in to listen to the debate in the hope that I would hear some words of wisdom. I have been sadly disappointed.
      I had the advantage in the years up to 1972 of serving on a county borough council — still, in my view, the best method of effecting local government in its proper sense. I also have the advantage of being on record as having opposed the establishment of the metropolitan county councils in general and the Merseyside county council in particular.
      5.45 pm
      In my political peregrinations around the country, trying to get elected to the House, I was at a by-election in Liverpool in 1971 when the few people who were then inclined to support the Conservative cause said that they had no wish to see the establishment of a Merseyside county council. They did not understand what it was, and nothing much has changed in the succeeding 14 years.
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      Many people in that part of the world still think that the county council is something to do with the Liverpool city council.
      In 1974, when I moved my political activities to Newton-le-Willows, which for some reason is now in the Merseyside county council area, though it has nothing to do with Merseyside, people asked what on earth they were doing in Merseyside and what Merseyside had to do with Newton-le-Willows.
      I remember that the people involved in local politics at that time, either on the county borough council or on urban district councils, had to make judgments about their political futures. Without exception, they stood for election to the district councils within the metropolitan county council areas and not for the county councils. They could not see what the counties would do politically or how they would occupy their time. I took the same decision. Unfortunately, I was defeated by a Liberal, although I got back later.
      No one of any political consequence chose to stand for election to the county councils. The young hirsute gentlemen who sit on those councils now perhaps do not have such long memories.
      In 1979, I was asked why, as the metropolitan county councils had still not worked, we had not got rid of them. The same question was being asked during the 1983 general election.
      It has been suggested that the people represented by the metropolitan county councils have some affection for them. That is not true. The Merseyside county council has gone to enormous expense to buy space in newspapers so that people can send me clippings saying that they wish to keep the county council. Some people have done that, but it is surprising to see how many altered the clipping to say that they agree with the abolition of the Merseyside county council.
      Mr. Robert N. Wareing: How many slips of paper has the hon. Gentleman received from people who support the abolition of the county council and how many people have told him that they disagree with abolition? I have not had a single call for abolition.
      Mr. Porter: As the lady said, "You would, wouldn't you?" To be absolutely fair, about 60 per cent. were in favour of abolition and about 40 per cent. were against it. As it is a printed form to be sent to the person's Member of Parliament expressing disagreement with abolition, I am surprised that so many people have gone to the length of altering it and then sending it to me.
      My right hon. Friend the Member for Chesham and Amersham (Sir Ian Gilmour) seemed to be suggesting that, as the GLC had run waste disposal services rather well, that was somehow a powerful argument for not abolishing it. Waste disposal no doubt took place before the GLC was set up. I do not argue about the situation in the GLC area, but on Merseyside, whatever I put in my dustbin was adequately disposed of before the county council came into being. I do not believe that it is beyond the wit of man to devise an equally efficient system under the new arrangements, so that seems a rather infantile objection to a major proposal.
      Sir Ian Gilmour: I was simply saying that well-thought-out legislation would have dealt with the problem in the Bill, so I do not think that my hon. Friend's objection carries much weight.
      Mr. Porter: I have no doubt that during the Committee stage, in which I intend to take little part after today and tomorrow, such matters will be dealt with, but I should not have thought that they constituted fundamental objections to the measure. I hope that those who take part in the Committee stage — [HON. MEMBERS: "This is the Committee stage"] I mean the Standing Committee upstairs. I hope that members of that Committee will address themselves postively to these matters rather than keeping people like me up all night for the next six months.
      The Chairman: I share the hon. Gentleman's hope, but I also hope that he will address himself to the amendments before the Committee and not seek to make the speech that he might have made if he had caught Mr. Speaker's eye on Second Reading.
      Mr. Porter: I am obliged to you for that reminder, Mr. Chairman. It might help if I had read the amendments. I shall call myself to order, conclude my remarks very shortly and leave it to the self-appointed experts to carry on.
      Merseyside county council in particular and the metropolitan counties in general have achieved popularity, although some false affection has been generated by money, activity and noise from those running them. I am in fact advocating the abolition of my own father, who in the latter part of his local government career has subsided on to the benches of Merseyside county council. It is with the greatest pleasure that I abolish his office. I am sad that he should have spent the past few years in an activity of no real consequence when he would have been better occupied dealing with local government matters in the proper manner that the Bill will achieve.
      Mr. Tony Lloyd: The Government have put forward proposals for the reform of the metropolitan counties without proper consideration and almost without putting them to the public in the areas concerned. They have a very long way to go if they are to justify the wholesale massacre of local government structure. They have yet to show the logic of undermining local government in this way, as they have not yet provided the detailed analysis that both Opposition and Conservative Members have called for. In dealing with the most fundamental restructuring of local government this decade we need far more evidence to underpin the proposals before us.
      One of the amendments calls for a series of referendums in the GLC and metropolitan areas. We set great store by that in Greater Manchester, where only 10 per cent. of the population strongly favour the Government's proposals. The proposals thus have almost no credible support in the area. It is not unreasonable to suggest that the people most affected by the proposals should have the opportunity to express their view. I also have considerable sympathy with the view that the proposals should be subject to detailed examination by a Royal Commission or similar body. Whatever the merits or demerits of the Bill, it is clear that the structure of local government after abolition will have to be reformed very quickly by a future Government,
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      preferably a Labour Government, because the present proposals offer no credible structure for local government in the metropolitan areas.
      The uncertainties caused by the Bill have not been adequately dealt with. The proposals for the police forces are a good example. Greater Manchester now has an integrated police force covering the whole metropolitan county, with a central headquarters and a centralised communications system. I understand that the Home Office itself, unofficially, strongly opposes the idea of breaking up that integrated force. If the Bill is passed there will be strong demands from the districts within Greater Manchester for the restoration of some democratic control over the police force because we wish a police force to be accountable. That is not the right way to achieve accountability. Having created an integrated force out of the former separate forces in the area, the correct way to proceed is to guarantee that democratic structure through a countywide body such as the present county council. The Government's proposal is unsatisfactory and unlikely to gain the support of Home Office Ministers. With such uncertainty built into the Bill, it is inevitable that the public in the metropolitan areas will look askance at the Government's proposals.
      Despite the various assertions made by the Secretary of State, there has been no adequate discussion of the cost of the proposals. An annual figure of £100 million has been magicked out of the air by the Government, but there has been no in-depth examination or justification and there is not a shred of evidence to support the Government's assumptions. Credible examinations have been carried out by Coopers and Lybrand and others who have attempted to grapple with the complexities of the problem. We all admit that it is a complex matter and none of us would wish to pin our faith to the last pound on the figures in the Coopers and Lybrand report. Nevertheless, it has been the only attempt to analyse the situation and to tell the public the likely costs and benefits of abolition and people will naturally assume, in the absence of any other evidence, that the figures in that report are more reliable than those plucked out of the air by the Secretary of State. The public cannot possibly be satisfied while that uncertainty remains.
      All those uncertainties point to the need for a Royal Commission to carry out a study based on something more substantial than the political prejudices of the Prime Minister and the Secretary of State, who dislike the county councils because of their political composition, which is merely temporary. The Government dislike the authorities because they are all Labour-controlled. It is unlikely that a Royal Commission would approach the matter purely on the basis of party political spite. It is important that we get away from such spite and set up a body on which we can rely to examine the arguments in a more dispassionate and constructive way than has been achieved so far.
      One amendment refers specifically to the Audit Commission. I have had cause to write to the commission in relation to the Price Waterhouse report on the abolition proposals. I am not totally enamoured of the Audit Commission, but that is a much more reputable body to look into these matters—
      Mr. Harry Cowans: It was set up by the Government.
      Mr. Lloyd: As my hon. Friend says, it was set up by this Government to control local government spending.

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      The Audit Commission ought to be given the opportunity to look into the costing of these proposals and the efficiency of the existing set-up. Not even Parliament has discussed improving the county councils and the GLC, and that should be put to the judgment of a Royal Commission or the Audit Commission. It is not good enough simply to bow to the prejudices of the Secretary of State and the Prime Minister. It is more important to establish a local government structure that will last and which, without the present uncertainties, will be safe for a considerable number of years ahead and not simply until the next Parliament.
      6 pm
      Mr. John Heddle: Are not Royal Commissions, committees of inquiry and parliamentary inquiries just another form of parliamentary procrastination? Will they produce any shred of evidence which my right hon. Friend does not already possess? I think not. The Committee would be well advised to reject this group of amendments.
      In 1975, to its eternal credit, the Labour party took the trouble to set up the Layfield committee of inquiry into the financing of local government. That document remains a major work on the financial aspects of local government. However, to its discredit, the Labour party did not have the courage between 1975 and 1979 to implement any of that committee's recommendations. To our credit, my right hon. Friend and his predecessors have since 1979 tried to grapple with the problem of financing local government. We have not yet been entirely successful, but at least we have taken steps which, it is hoped, will ultimately lead in the right direction. That must surely be the protection of the ratepayer against rapacious and greedy local authorities which seek to obtain funds from the ratepayer out of earned income to provide for services which are not necessarily best provided by the local authority, and which perhaps could be better and more prudently provided by other solutions.
      Mr. Tony Banks rose—
      Mr. Heddle: I shall not give way to the hon. Gentleman. He spoke many times on Second Reading, and no doubt he will do so in Committee. I am sure that he will make his own views known in his inimitable manner.
      This Committee should direct its attention specifically to protecting the ratepayer, because without the wealth which the ratepayer can provide, local authorities such as the GLC and the six metropolitan country councils would not have the money with which to provide the services which, in their infinite wisdom, they believe that the ratepayer deserves.
      Both the Labour and Liberal parties are united with Conservative Members in wishing to seek a solution to unemployment, the most enormous problem which confronts us. We all want to find a solution which will create jobs. We are more likely to find that solution if we give the industrial and commercial ratepayers a greater opportunity to preserve as much of their after-tax wealth as they can. Without a doubt, there has been a flight of private sector capital from the GLC and the six metropolitan county councils because that sector has paid an inordinate amount of after-tax profits in rates. This has nothing to do with reducing the rate support grant, but it
      1094
      has everything to do with protecting the industrial and commercial ratepayer. My right hon. Friend's rate-capping announcement yesterday will do precisely that and will go some way towards protecting jobs in our inner cities and conurbations.
      Mr. Cleve Soley rose—
      Mr. Heddle: Perhaps the hon. Gentleman will allow me to finish my speech. When I sit down, he will no doubt have the opportunity of catching the eye of the Chair.
      Some of the operational aspects of the Bill which will have to be further debated when it goes into Standing Committee — for example, waste disposal, planning functions, transfers of powers and transfer of rights and responsibilities under leases — are technical nuts and bolts to which the Committee will have to give deep consideration. However, these amendments simply suggest the fudge of a basic issue which affects all firms in the constituency of every hon. Member in or near the GLC and the six metropolitan county council areas. Relieving them of the additional burden of one expensive layer of bureaucracy, which takes democracy one step further away from them, will do nothing to create jobs. The Committee should reject this raft of amendments forthwith.
      Mr. Wareing: As my hon. Friend the Member for Blackburn (Mr. Straw) said, all previous major local government reorganisations have been preceded by a thorough review and investigation of the needs of those who live in the various areas. So important did a thorough investigation seem that, after 1926, a borough or urban district which sought county borough status was required to present a private Bill before Parliament so that it could be thoroughly investigated before a change was made. Between 1926 and the 1960s, only one county borough was established in that way—Doncaster.
      Even relatively minor changes have been the subject of real inquiry. Between 1945 and 1949, two local government boundary commissions looked at the problems of boundaries only. In 1956, a Conservative Government published a White Paper on the structure of local government. However, that was felt to be insufficient, and that Government under Harold Macmillan passed the Local Government Act 1958 which established two local government commissions—one for England and one for Wales—which in 1963·64 reported on the establishment of a number of county boroughs in the west midlands area.
      The Redcliffe-Maud commission provided a mountain of information and identified the disparity in size and resources of local authorities, the overspill problems in the conurbations and the haphazard allocation of functions between urban and rural districts and the non-county and county boroughs. It was argued that the Labour party has never been in favour of metropolitan authorities, but, following the publication of the Redcliffe-Maud report, the White Paper on the reform of local government in England was published in February 1970 by the Government of which the right hon. Member for Daventry (Mr. Prentice) was a member.
      A common theme of the Redcliffe-Maud report and the White Paper of February 1970 was that in the metropolitan areas of Greater Manchester, Merseyside and the west midlands the two-tier system was the correct one to deal with the disparity in resources, the haphazard allocation

      1095
      of functions and the overspill problems in those conurbations. Indeed, the Labour Government's White Paper went further. It added to the three areas mentioned in the Redcliffe-Maud report the conurbations of west Yorkshire and south Hampshire, including the Isle of Wight. In February 1971, the Conservative Government published a White Paper on local government in England. Again, it increased from three to six the number of conurbations which were to have metropolitan authorities. Those, of course, were the areas which were the subject of the Local Government Act 1972.
      Redcliffe-Maud and all the previous reports and White Papers had something else in common. They were all concerned about the growing amount of central control. They argued that, if nothing was done to reorganise local government, central control was bound to become greater.
      The motive for the Local Government Act 1972 was to hold back the tide of central control. The proposition before the Committee now has exactly the opposite motive. The aim of the Secretary of State is not to increase local accountability, but to increase central control. As the right hon. Member for Chesham and Amersham (Sir I. Gilmour) so eloquently put it, there are about 120 powers in the Bill—I had not realised that the figure was so large — by which the Government seek to increase central control.
      In answer to the hon. Member for Lichfield and Tamworth—
      Mr. Patrick Jenkin: Mid-Staffordshire.
      Mr. Wareing: I am sorry. The hon. Member for Mid-Staffordshire (Mr. Heddle) referred to the increasing burden on the ratepayer. However, the burden on the ratepayer must increase when the Government reduce the rate support grant from 61 per cent. of expenditure to 48 per cent. At a time when we are still suffering from inflation—even though it has become less severe—the only alternative is to cut services. That is what the Secretary of State has in mind. He is the agent of the Prime Minister and the Chancellor of the Exchequer. At the Tory party conference, the Secretary of State announced that there was to be a review of local government finance. However, before that review can be published, the Secretary of State presents us with a Bill to alter the structure of local government. That has never happened before.
      Even on the Government's own admission, they have little support. I understand that the Government received 5,000 responses to their White Paper "Streamlining the Cities" and that less than 10 per cent. of the respondents supported the Government's proposition.
      Throughout the arguments of the past year, the Government have provided no concessions whatsoever to informed opinion. There is still much that one can ask about the details. We know that under this measure a number of trusts are to be established. One will cater for the arts on Merseyside. There has been no thoroughgoing investigation of the right way of presenting the arts in conurbations such as Merseyside. I dare say that, even now, the Secretary of State could not tell me who will be responsible for the Philharmonic hall in the city of Liverpool. The philharmonic orchestra may be administered by the trust, but presumably the hall itself will become the possession of Liverpool city council—and
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      the city council has had to close St. George's hall already in order to keep its head above water in the climate created by the Government's financial policies.
      6.15 pm
      Government Members have argued that the Labour party manifesto favoured unitary authorities. However, "Labour's Programme 1982" included a statement on devolution. In the consideration of devolution for Scotland and Wales, the point was made that if there is devolution in Scotland and Wales, we must also consider the democratisation of regional government in England. The Labour Government of 1964–79 published a document called "Devolution: The English Dimension". Many Labour Members would be fully in favour not of reducing the second tier but of extending democratic government to the control of electricity boards, gas boards, health authorities and water authorities. That is the question that we should be considering, instead of this squalid measure.
      The hon. Member for Wirral, South (Mr. Porter)—the only Member from the Merseyside area who has been present on the Conservative Benches—said that most people on Merseyside are not in favour of the county council. What has he been reading? He has certainly riot read Liverpool polytechnics' survey of opinion on Merseyside, according to which, 70·3 per cent. of those questioned were in favour of retaining the Merseyside county council. Some people were in favour of increasing its powers. Over 80 per cent. of those questioned were opposed to increased central Government control. No less that 86·8 per cent. were in favour of Merseyside county council's cheap fares policy.
      That survey was a test of opinion. What test of opinion have the Government carried out? How can this measure be presented to the Committee as a matter of major importance to the country? What people in the conurbations are concerned about is how services can be provided adequately to protect them in their homes and their streets. They are concerned about how to find jobs. For such areas, the question that we should be considering is unemployment, and not this nonsensical measure which is before us, merely—as I said on Second Reading—at the whim of the Prime Minister.
      On the authority of someone who was very close to the Conservative party working party on this issue, I can say that, originally, the manifesto was to state that there would be a review of the local government system under the new Conservative Government. That would have been entirely in accord with the amendments. Nine days after the general election was called, that commitment was crossed out by the Prime Minister. I challenge the Secretary of State to say whether that is true or false. I understand that that is what happened.
      Mr. Patrick Jenkin rose—
      Hon. Members: Give way.
      Mr. Wareing: I will indeed give way in a moment. The right hon. Member for Old Bexley and Sidcup (Mr. Heath) has confirmed what I say, in a sense.
      Mr. Jenkin: I do not think that the hon. Gentleman can have been in his place an hour and a half ago, when I replied to the same allegation when it was made by the hon. Member for Blackburn (Mr. Straw).
      Nine days after the election was called, the manifesto was published. Thousands and thousands of copies of it

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      were distributed around the country. The manifesto had taken some time to print. The idea that such a change could have been made at that time is absurd. I shall deal with the point again when I reply to the debate, but the hon. Gentleman must not be fooled by some of the statements that have been made on the matter.
      Mr. Wareing: You will have noticed, Mr. Walker, that the Secretary of State will not confirm or deny that it was the Prime Minister who determined that, in the final manifesto, there should appear the abolition of the met councils rather than a promise to review the system of local government. Such a review would not have required legislation. The Local Government Act 1972, which was put through by a Government of which the Secretary of State was a member, presaged a review of local government in 10 to 15 years. Amendment No. 1 would put that requirement into effect. As a member of the previous Conservative Government, the right hon. Gentleman should promise such a review.
      Mr. Hugh Dykes: Further to the exchange between my right hon. Friend and the hon. Member for Liverpool, West Derby (Mr. Wareing), my right hon. Friend must exercise care when dealing with these matters. It is widely known, as a result of the process of osmosis, that this matter was never properly discussed in Cabinet. As far as we know, it came up once at the tail-end of a general Cabinet discussion and was very much an afterthought. I must not transgress the rules and conventions on this matter but, as far as can be ascertained, it appears that two members of the Cabinet declared themselves in favour of the proposal and no one else said anything on the subject. My right hon. Friend must therefore be careful. I am sure that he is not trying to mislead the House, but he must refrain from giving the impression that the matter was given the conventional endorsement of the Cabinet, as we would expect in regard to such a controversial and sweeping measure. That is the sadness of the background to the Bill, which was referred on Second Reading.
      During the Second Reading debate, my hon. Friend the Member for Harrow, West (Sir J. Page) declared himself enthusiastically in favour of abolition of the GLC. I have not had a word with him about referring to what he said, but shall try to do so as soon as possible later this evening. After the Second Reading debate, one of my constituents told me that opinion in Harrow appeared to be evenly divided about abolition of the GLC and its replacement by a successor authority. I do not get that impression. I do not wish to make a Second Reading speech, but I must observe that I have been inundated with letters from people, including Conservatives, who have expressed gross dismay at the essence of the Bill and what it stands for. As several hon. Members have dealt with the metropolitan counties, I hope that I shall be forgiven for dwelling on the GLC.
      Because he was interrupted so much, my hon. Friend the Member for Harrow, West did not have time in his Second Reading speech to discuss the Bill or the proposal to abolish the GLC, but he referred to the disastrous effect of the GLC in regard to roads and said that, 15 years ago, he had tried to get a road in his constituency put right. The only problem is that the road was not in his constituency then and it is not in his constituency now. I hope to be able
      1098
      to bring that to the attention of my hon. Friend soon. However, that example shows how important it is, whether on Second Reading or in Committee, for right hon. and hon. Members to refer to the Bill.
      Sadly, my hon. Friend the Member for Mid-Staffordshire (Mr. Heddle) did not deploy a good argument and my hon. Friend the Member for Wirral, South (Mr. Porter) came in but briefly and made a somewhat incoherent speech. Admittedly, he had not read the Bill or the amendments, but he has now disappeared, although right hon. and hon. Members might want to refer to what he said.
      I shall now return to the valid objections to the Bill and therefore to an expression of support for amendments that are designed to ask the Government, with humility but forcibly and reasonably, to think again carefully about this proposal. Amendment No 1 proposes a Royal Commission. There are tempting arguments in support of that and I and other Conservative Members might consider doing that in the absence of my right hon. Friend advancing reasonable arguments to the contrary.
      Several Conservative Members have proposed a formula that would produce an intra-parliamentary inquiry, which might take less time than a Royal Commission. It gives me no pleasure to support the Opposition amendment, but there are times when right hon. and hon. Members have to get up and say what they believe is right. A Royal Commission might be the right method. I mean no disrespect to parliamentarians here and in another place, but it is the only mechanism of getting a profound and outside independent inquiry which, by solemn political and constitutional convention, is an absolute engagement. It has always been the case that there should not be legislative and constitutional upheavals of local government structures without such an inquiry.
      I should like to refer to what The Sunday Times said on 25 November 1984—just after the Bill was published. It said that there was not a strong case for keeping the Greater Manchester council. I disagree, but shall not go into that argument now. It continued:
      "People do however talk of themselves as Londoners. The capital is a recognisable geographical and social entity. It requires a London-wide authority to maintain its cultural and economic viability, and we hope that in its passage through Parliament, the Bill will be amended accordingly.
      Even then, the Bill will be a monument to a missed opportunity. Local government can only be reformed once in a while. What was needed, this time, was a radical, fully thought-through reorganisation, embracing finance as well as structure, thus treating the whole malaise. Instead, in its haste to despatch Ken Livingstone and his comrades, the government has produced a botched job."
      Two months before, the Financial Times of 20 September 1984 said, in what is now a well-known quotation which was referred to on Second Reading, similar things about London being a collection of villages but a cohesive capital city of international importance, and therefore needing commensurate treatment in its structural organisation.
      I have always been naive in assuming, in an old-fashioned way, that the Tory party in government has not historically been in the business of creating huge political upheavals, least of all on a decision based on people being in a political bad temper and when that decision would not save money. Indeed, the proposition will cost London ratepayers more. If the Bill goes through without being amended as proposed, it will create such a disastrous upheaval in London that it cannot possibly go into

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      Committee upstairs without the commitment of a huge amount of time to examine it properly. The Government have the opportunity to accept these amendments or later ones tonight. As The Sunday Times said recently:
      "a lingering question hangs over the great investment of Parliamentary time and political energy about to take place. What relevance does all this re-jigging of boundaries and functions have for the real agenda of British political economy in the second half of the 1980s?"
      I hope that my right hon. Friend and the Minister, who have the unenviable, indeed, hapless and miserable task of getting this awful Bill through will bear in mind that a change of mind in the face of overwhelming evidence from all parts of the House, far from being a sign of weakness, is a sign of political strength.
      Mr. Heddle: Will my hon. Friend give way?
      Mr. Dykes: I have little time.
      Mr. Heddle: I am grateful to my hon. Friend. The Committee has listened, as it always does, with great respect to what he has said. As he prefaced his speech with a reference to my speech, perhaps he would make it quite clear how he stood on the abolition of the GLC in the general election of June 1983. From where I was in Mid-Staffordshire, I got the impression that a considerable number of voters in Greater London supported the abolition of the GLC, as is evidenced by the presence of many of my hon. Friends who perhaps owe their present position to the wealth of opinion against the GLC at that election.
      Mr. Dykes: I gave way only because I referred to my hon. Friend's remarks. I am not sad that I did, because it gives me the opportunity to repeat that I was a co-author of the 1976 pamphlet, which the Minister also wrote. Pamphlets carry collective responsibility, especially when the chapters do not have attributional names attached to them. We all enthusiastically said that London needed a strategic Londonwide authority. [Interruption.] Whips do not normally intervene from a sedentary position, but I recognise the exception this time.
      Mr. David Ashby rose—
      6.30 pm
      Mr. Dykes: I shall not give way at the moment. My hon. Friend the Member for Leicestershire, North-West (Mr. Ashby) has not been present for long. I should like to continue, because I do not wish to take up too much time.
      The co-authors also said that such an authority could be called the Greater London council, or, as that was rather a corny name, something else. In January, February and March 1983, through the local press and local broadcasting in London, I made it crystal clear that I was opposed to the abolition of the GLC. That was manifest in my election campaign. I was asked two questions on the subject during the campaign and I made that clear when I answered them. Everyone, locally and throughout London, knew that that was my consistent position.
      Mr. Patrick Jenkin rose—
      Mr. Dykes: I shall not give way, although I shall on a later occasion. I am explaining my position. I have already taken rather a long time to do so, and I am aware that other hon. Members wish to speak.
      1100
      It is definitely not a sign of weakness for a Government to listen to arguments and realise that second thoughts are a legitimate part of the democratic response of any great Government. Because such solemn issues about democracy and accountability are at stake, the Government would receive tremendous applause by doing so. Although it has been said before, I commend to the Committee again the utterances of a courageous Conservative at county hall, Bernard Brook-Partridge, in his article,
      "Whither, not wither, local government?"
      He said that this was not merely a disagreement about policy but
      "a dispute about principle and constitutional legitimacy."
      That is the anxiety that assails those of us who are against these proposals in detail and, therefore, in favour of this kind of amendment, and who are worried about the constitutional background to them. We know the history of the matter. On all previous occasions Conservative Governments have endorsed independent outside reports and external examinations that have concluded that London needs a Londonwide authority.
      Once again we thank the wisdom of the Financial Times. A final paragraph of its leading article today entitled
      "The reform of local councils",
      states:
      "London is a conundrum."
      Perhaps the paper is returning to the theme enunciated in September. It continues:
      "At least in the metropolitan areas the major cities such as Leeds, Liverpool, Manchester, will still have a city-wide authority after abolition. The capital will not. The Government has had no answer to critics who point out the absurdity of ignoring the common interests which exist between the disparate villages and communities which make up one of the world's largest and most important capitals. The case for abolishing the Greater London Council is clearly much weaker than for the metropolitan counties and, on present evidence, ought not to proceed at all.
      An opportunity for sensible reform has been missed."
      Mr. John Maples rose—
      Mr. Dykes: I hope that my hon. Friend will forgive me for not giving way. I am aware that I am taking up time. I know that the Government Whip would like me to give way, but I have given way several times already.
      Without burdening the Committee with too many quotations, I commend to all hon. Members who want a genuinely constructive solution to the question of the future of London the article by my hon. Friend the Member for Ruislip-Northwood (Mr. Wilkinson). In an article in The Guardian of 7 December he concluded:
      "There is however another option which could meet the obvious need to curb the wildly excessive discretionary spending powers of the GLC, to rationalise the strategic government of London and yet retain an elected voice for our capital city".
      He was referring to a total of 4 per cent. of the GLC's total spending, and the 1·5 per cent. of the most contentious areas of its spending, with which I also violently disagree. The 4 per cent. is the same ratio as that which existed when Horace Cutler was in charge of the GLC.
      The article states that the option is
      "to institute a directly elected representative body for London whose functions and powers would be determined by Parliament, following a Select Committee Inquiry."
      I shall not say any more about that in case I am out of order, because it will be the subject of a later amendment.
      Whatever the form of the inquiry, whether it is a Royal Commission or not — there are arguments that that

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      would be the best way—it might conclude that that would be its option because the present legislative proposal is a recipe for complete chaos, and disaster in future. That is why I support the amendment.
      Mr. Tony Banks: It is a pleasure to follow the speech of the hon. Member for Harrow, East (Mr. Dykes). If the hon. Member for Watford (Mr. Garel-Jones) wishes to speak, the House will be delighted to listen to him making a speech rather than to his comments from a sedentary position.
      The hon. Gentleman made a good speech, as did the hon. Member for Ruislip-Northwood (Mr. Wilkinson) on Monday night. It is often said that the Labour party is intolerant of opposition. My eyes have been opened to the intolerance of Conservative Members to dissident voices within their ranks. That is a matter of especial concern when those dissident voices are clearly talking good sense. I ask Conservative Members for one moment to lay aside some of the prejudices that they bring with them into the Chamber and to reflect on what their reaction would be, had a Labour Government brought forward proposals to restructure local government based on such a sketchy undertaking in a manifesto.
      That is the point at issue, and the central feature of the amendment. It is intellectually insulting for the House to consider how the Bill was formulated. We have heard how the abolition of the GLC got into the Conservative party manifesto. There seems to be no argument that it was introduced at the behest of the Prime Minister and against the advice of her party policy committee. The right hon. Member for Old Bexley and Sidcup (Mr. Heath) gave us that evidence.
      I understand that Prime Ministers tend at times to say, "Put this in the manifesto, or else there will be trouble". The Labour party has experienced that. A previous Labour Prime Minister made it clear that if a proposal to abolish the House of Lords were in the manifesto, he would resign. I do not know whether the Prime Minister made that sort of threat to her colleagues, but the manifesto undertaking was clearly there because she decided that it should be.
      On many occasions the Secretary of State said that discussions had taken place a year before the undertaking to abolish the GLC was written into the manifesto. However, he has not said with whom those discussions took place. Did they take place in the Cabinet or in the Department of the Environment? On whose authority did they take place? What was the outcome of the discussions? The only evidence that the House has is that the Prime Minister insisted that the abolition of the GLC should be written into the manifesto. That is the intellectual insult that has been delivered to the House and the country.
      Mr. Maples: The hon. Gentleman pretends constantly that the proposal to abolish the GLC is a diabolical, secret Tory plot. How does he square that with the fact that the Labour party programme of 1982 called for the same thing? It called for a root and branch reorganisation, and stated:
      "We favour the creation in England and Wales of unitary authorities."
      Mr. Banks: That is not a valid point. There is nothing wrong with any Government considering the structure of local government.
      Mr. Chris Smith: Does my hon. Friend agree that that is precisely what this series of amendments proposes should occur? Therefore, the hon. Member for Lewisham, West (Mr. Maples) will presumably support them.
      Mr. Banks: If we were debating a Bill that had been the product of a Royal Commission inquiry or a public inquiry, and it was based on a measured consideration of the needs of local government in London and the rest of the country, I admit that we might still oppose it. That is a function of opposition. But the Government's case would have been much stronger, because they could have prayed in aid the fact that the Bill was based on evidence taken by Royal Commission or by a public inquiry. They cannot say that. All they can say is that the manifesto said that they would do it.
      I have some sympathy with a Government who say, "It is a manifesto commitment and we shall carry it out." However, to take up the words of the right hon. Member for Old Bexley and Sidcup, it is still for the Government to prove their case to the House. As he said, that case has not been proved. It is symptomatic of the failure to prove the case that there have been so many weak arguments from the few Conservative Members who are prepared to speak in favour of the proposals.
      The Herbert commission that sat between 1957 and 1960 took millions of words in evidence. It produced a unanimous report that had great standing in local government, in the House and in the country as a whole. Hon. Members should contrast the Herbert commission's report with the back-of-the-fag-packet undertaking that brought about this proposal. How can we contrast the 66 words in a Conservative party manifesto — by all accounts written in by the Prime Minister, unaided, and against the advice of her party policy committee—with all the words of the Herbert commission, which suggested the present structure of local government in London?
      Most of the Herbert commission's views were supported by the Marshall inquiry of 1978. There were two major inquiries into the structure of local government in London, both conducted under Conservative Governments. That must be contrasted with 66 words in the Conservative party manifesto.
      I hope that when the Labour party is in government it will carry out its manifesto pledges, but I hope — indeed, I know—that they will have been thought out in greater depth and with more intellectual effort than has this back-of-the-fag-packet policy.
      I wonder whether Ministers have re-read the report of the Marshall inquiry. I am especially interested to know whether the Minister for Local Government has done so. I will not go through all the evidence that he gave to the inquiry, because I am sure that it will be mentioned many times during the long Committee nights until March. He will have to do better than to say that it was not really his evidence. He carries much responsibility for what he wrote in 1978, with much of which the Opposition agree. Many of his proposals were similar to those contained in the 1981 Labour party manifesto. I congratulate him on his prescience in that respect, and I am only sorry that he is now trying to distance himself from the views that he held those few years ago.
      6.45 pm
      Hon. Members will remember that the Labour GLC also made a manifesto pledge in 1981, when this trouble

      1103
      started. Had the Labour party not won the GLC elections in 1981, and had Mr. Kenneth Livingstone not been elected to the leadership of the GLC, I am convinced that we would not now be discussing the abolition of the GLC. The GLC's manifesto undertaking to introduce cheap fares in London was challenged in the courts by Bromley council—an authority that now supports the abolition of the GLC. Although the GLC prayed in aid the fact that there was a manifesto undertaking, the then Master of the Rolls, Lord Denning, said:
      "A manifesto issued by a political party—in order to get votes—is not to be taken as gospel. It is not to be regarded as a bond, signed, sealed and delivered. It may contain—and often does contain — promises and proposals that are quite unworkable or impossible of obtainment. When the party gets into power, it should consider any proposal or promise afresh — on its merits — without any feeling of being obliged to honour it or being committed to it. It should then consider what is best to do in the circumstances of the case and to do it if it is practicable and fair."
      When Lord Denning uttered those words in overturning the GLC's manifesto commitment to reduce fares in London, I do not remember many Conservative Members protesting that it was a manifesto undertaking that should be upheld. In the circumstances, it comes ill from the Conservative party to say that the manifesto is all, that the undertaking is the only relevant thing and that no other considerations should be entertained.
      The Herbert commission, the Marshall inquiry and the Layfield inquiry have all considered the structure and financing of local government. I noted the speech of the hon. Member for Mid-Staffordshire (Mr. Heddle). I tried to intervene because I wished to ask a question about a point that he made. I hope that in future, in the interests of good debate, he will give way rather than steadfastly refuse to answer the point. I shall gladly give way to him if he wishes to answer my question now. Does he support the idea in the Layfield report of a local income tax? Many Opposition Members argue that rates are not a fair form of taxation, mainly because they have a regressive impact and they take no account of the ability to pay of those who must foot the rates bill. Few Conservative Members have supported the idea of a local income tax. The Layfield inquiry also suggested greater local authority powers; that again is something with which the hon. Member for Mid-Staffordshire has not come to grips.
      For many years, we have had major inquiries into the structure of government in London. Fights between county hall and central Government are almost part of our historical process. But every change in local government structure in London—I have confined my remarks to London for obvious reasons — has followed intense consultation and study. The Bill is not worthy of consideration by the House. It is a fag-packet proposal written into the manifesto by the Prime Minister in a fit of great passion. The House should not discuss it tonight in a fit of great passion.
      Mr. Keith Speed: I apologise to the hon. Member for Blackburn (Mr. Straw) for not being here to hear his speech, as I was in another Committee.
      I have been a Government Whip and was an Under-Secretary with responsibility for local government affairs when various new procedures were brought in in 1972–73, with the creation of the metropolitan counties. I take full responsibility, having been a Minister, for what we did then, but in retrospect I think that the creation of those councils was a mistake. However, I am extremely
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      attracted by the arguments made by my right hon. Friend the Member for Chesham and Amersham (Sir I. Gilmour), my hon. Friend the Member for Harrow, East (Mr. Dykes) and others who have said that at the moment, the Government, both with their rate-capping Bill and this Bill, are treating the symptoms and not the cause of local government problems. Therefore, what we need and what this and other amendments are suggesting, is a proper, independent look at both the structure and finance of local government, as the two essentially go together.
      The Bill is a major reform of the structure, but with no independent inquiry. When I was shadow spokesman for local government from 1975 to the end of 1977, about the same time that my hon. Friend the Member for Harrow, East was writing his pamphlets, I spent my time going up and down the country speaking with the full backing of the shadow Cabinet. I was saying that a Conservative Government believed in local government and wanted to see more powers devolved from central to local government, and not the other way round. I shall not bore my right hon. and hon. Friends with the speeches that I made then, but I draw their attention to a speech that I made in Gloucester, which sets out our philosophy in great detail. There was a Conservative Central Office handout running to 14 pages, so important was the policy statement on this. Time after time, I underlined that the fact that we trusted local government and wanted to devolve powers to it, because it was locally accountable. A considerable number of powers will be going from the Greater London and metropolitan county councils to the Government. That is against what I believed in at that time, and still believe in today, and it is a profoundly un-Tory approach to these issues.
      There is a central problem, which has led to this Bill, and which could have been tackled by an independent inquiry or a Royal Commission. It is that at the moment we have taxation without representation in local government. In my constituency of Ashford, about 30 per cent. of the local government electorate pay domestic rates. In the borough of Lambeth, where I have a flat, 22 per cent. of the local government electorate pay rates. That is a farcical situation and it is no good wittering on about Mr. Livingstone, Mr. Knight or anybody else until we can put that right, so that when people are voting for local government they realise that they are not only voting but will have directly to meet some of the costs themselves. When only one in five in some of the London boroughs, and even fewer than a third in my constituency, pay rates, clearly something is wrong. To tamper with that through this Bill or through rate capping is putting the cart before the horse.
      Since the Layfield inquiry, modem computer technology and other developments have made it easier to have a system of local income tax, should that be the way to go, or a local service tax, or whatever. In the 1970s, it would have been difficult to do that, because the technology was not there to do it without creating vast numbers of civil servants and bureaucrats. If we wished to introduce such a system now, the technology would be there.
      This Bill has been introduced without a proper investigation or report. Many of us believe that such a report would be not only practically sensible but constitutionally necessary. All the facts that have been given tonight show that on every major constitutional reform — the abolition of the largest authority in the

      1105
      United Kingdom is certainly a major constitutional reform —there has been a proper, wide-ranging committee of inquiry or a Royal Commission.
      I shall not stray into the details of how this manifesto commitment was arrived at. I shall just say that there was a manifesto commitment about the reform of the domestic rating system, which I believe would still be possible, but that was put on one side. Therefore, we have establishd that manifesto commitments are not the Ark of the Covenant. Anyway, there is a way to get over this manifesto commitment, as Mr. Greengross, the Conservative leader in the GLC, has proved in his excellent pamphlet.
      Finance is the key and heart of the problem of local government, not only in London but outside as well, but it is not being examined. I know that my right hon. Friend the Secretary of State announced at the party conference that another investigation would be set up, but by the time that that report is finished and there is an effective prospect of action, it will be after the next general election. By that time, the Bill will have been enacted, the GLC will have gone and there will be more central control. It will go against what many of us on the Conservative Benches, and, I am sure, even my right hon. Friend himself, who is as good a Tory as I am, believe in, which is to have local accountability and not to bring things back to Whitehall and central Government, which cannot be right.
      It is breathtaking to go around the major cities in the western world and see how in each one people are either New Yorkers, Berliners, Parisiens or Londoners. Each one has a major, directly elected and accountable local authority looking after it. Once the Bill has gone through, this country will be unique in not having such a body for its major cities. What is more, that will have happened without the benefit of a rational report. That is not acceptable. I am sorry, but I believe that this is against the Conservative tradition, and I have been a member of the Conservative party for 34 years. I ask my right hon. and hon. Friends on the Front Bench to look at this again, not least because of the financial and other problems and not least because, while abolishing the GLC will abolish Mr. Livingstone, it will solve no problems for Londoners or the Conservative party.
      Mr. Simon Hughes: I hope that the Government will listen to the comments of experienced and caring members of their party as well as to the arguments from Opposition Benches. Hon. Members such as the hon. Member for Ashford (Mr. Speed) with experience of local government, and as a member of a Government, and other hon. Members should be listened to, if the Government are to restore any credibility to the claim that they have listened to anybody since they introduced the proposals.
      Amendment No. 35 in the name of my right hon. and hon. Friends is being discussed with this group of amendments and will be voted on at the end of our debate. My colleagues and I will vote in support of any of the amendments that are put to the vote because we believe that at this stage it is fundamentally important that the Government recognise that they cannot sufficiently impartially and adequately, and in the time that they have given themselves, allow for a proper reorganisation of local government in England. That is not possible, and it
      1106
      will not happen. Unless the Government allow some expertise, intelligence and advice to come their way, we shall be heading for an unsatisfactory and troublesome state in Britain in the years ahead.
      The result of all this will be that the Government will go down in history with a reputation of having been arrogant and undemocratic. That will be to their detriment. Although they may not care to discriminate, Conservative Members who come from constituencies such as Harrow and other places on the boundaries of Greater London can speak with more authority of the feelings of their constituents on this issue than can such hon. Members as the hon. Member for Mid-Staffordshire (Mr. Heddle). He could not have had the abolition of the GLC as the fundamental point on which he fought the last election, no matter what his colleagues were saying.
      The hon. Member for Wirral, South (Mr. Porter) made the most amazing and incoherent contribution. I hope that it will be reported back at his home that he came here to represent his constituents not having bothered to read either the Bill or the amendments. He said that he did not want to make himself a self-appointed expert. The trouble with the Bill is that the Government have effectively made themselves self-appointed experts. They could claim that they obtained their authority to be the experts from the election. Of course, we now have a new theory in the Conservative party's political philosophy—the doctrine of the mandate. But it must first be remembered that at the last general election the Conservative party's vote fell, and thus its authority with regard to this proposal is at least arguable. Furthermore, we all know that the election of a Government does not necessarily mean that each point of their manifesto was endorsed. It is certainly alien to the Conservative party to claim that it is committed to the doctrine of the manifesto. Many arguments have already been well presented on that point, and I hope that they will serve to debunk the idea that the doctrine of the manifesto lies easily in Conservative mouths.
      7 pm
      The arrogance and undemocratic nature of the proposal is borne out by the fact that the Secretary of State and his colleagues regularly reassert that the counties' powers will be returned to the boroughs. In London's case that is so fundamentally inaccurate as to show that the Government obviously have not listened to the volume of accurate evidence that has been given.
      The time factor is not a persuasive argument against there being some form of public inquiry, because if the Government so wished, they could accommodate an inquiry within this Parliament's timetable that would allow proposals to be put through thereafter. But there should be a public inquiry, because, unlike the occasion when the GLC and the metropolitan counties were set up, we are now seeing for the first time in the reform of English local government a dismantling and dismembering process. That is quite different from setting up such bodies. In the Conservative party's election address there was, indeed, a proposal to abolish the GLC and the metropolitan counties, but there were no details as to the destinations of those powers. Although we would all accept the proposition of the hon. Member for Ashford that as much power as possible should be devolved locally, that will not be the result of this legislation. Thus the Government

      1107
      cannot claim that they have put a simple proposition to devolve power to the people or that that is what they are doing in the Bill.
      Mr. Maples: In the unlikely event that the alliance had won the last election, would the hon. Gentleman have proposed the establishment of a Royal Commission to consider its manifesto proposal to abolish a tier of local government?
      Mr. Hughes: Quite clearly the answer is yes. Indeed, we specifically said so. We said that the order of events should be that we would establish, with consultation, regional government in England. I think that it is highly likely that, before the next election, the Labour party will also hold that view. I do not critisise it for coming to that view, but I think that that is the way that its policy is moving. Thereafter changes in powers between levels of local government within the regions would be the subject of discussion within them. If regions wanted slightly different forms, they could have them, because that is what devolution and decentralisation is all about.
      It is not always appropriate to apply the same principles to all cities. As London has asserted over the years, it is certainly inappropriate that a capital should have the same local government structure as other cities. After all, it inevitably has a different nature. That is why it is always argued that the Metropolitan police must be under the direct control of the Home Secretary, as opposed to being under the control of a democratic police authority. Thus, we clearly said and would, I hope, never do other than ensure, that there would be an independent and proper inquiry before any fundamental local government change took place.
      Until now, that was of course the Tory position. In 1970, the Tory manifesto—which was written after the Redcliffe-Maud commission had reported—said:
      "We are convinced of the need for reform of the present structure of local government. Unfortunately, the Terms of Reference given to the Redcliffe-Maud and Wheatley Royal Commissions which examined this problem in England and in Scotland respectively were restricted. As a result, the crucial questions of devolution of power from the central government and of local government finance were not adequately dealt with in their Reports. We believe that these matters must be considered and that those concerned in local government must be fully consulted before final decisions are made."
      Then, and perhaps most importantly, the manifesto said:
      "We will bring foreward a sensible measure of local government reform which will involve a genuine devolution of power from the central government and will provide for the existence of a two-tier structure. There will be full consultation about the pattern of boundaries and the effect of changes upon existing resources of local government."
      Even after the Royal Commission had reported, the Conservative party that gained office in 1970 — the Secretary of State was then a member of the party—said
      that there would be thereafter further and proper consultation. After that, the changes were brought about.
      Whenever changes were made it was never even contemplated that such a substantial and radical constitutional change could be entered into without an impartial and objective inquiry. The Liberal party, together with its alliance partner, proposes a series of local inquiries. They have a specific role. Indeed, I hope that the Secretary of State will accept from me—as I am sure that he will in view of his legal background—that they have a perfectly proper constitutional role which
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      could be used in these circumstances. The special report of the Council on Tribunals, which was published in January 1980, states:
      "Powers to hold statutory inquiries have also existed for many years: Their essential purpose is two-fold: to provide Ministers with factual reports and recommendations which form a basis for policy decisions, and to ensure that citizens whose interests are affected have an opportunity of examining and probing the issues and putting their objections."
      One of the most eminent constitutional lawyers of this century, Professor de Smith, had some relevant things to say in his last major book on this subject. I shall quote just two sentences, as they include examples that relate to this debate. He said:
      "Local inquiries are used for three main purposes. As a means of consulting and informing local opinion, and gleaning local information as to the likely impact of a proposed administrative decision (for example, to alter constituency or local boundaries, or to amalgamate police forces)"
      among other things, this Bill involves changing the structure of police forces—
      "affecting the interests of persons and bodies in that locality."
      It was then said—and I accept it—that:
      "This slows down the pace of decision-making but provides the decision-maker with a better fund of knowledge."
      It is important that the fund of knowledge should be accurate and generally available, so that even if the Government ultimately choose to ignore it, they do so in full knowledge of what they are doing and cannot then be blamed for what they will be principally blamed for after this legislation, which is perhaps not that they carried out a reform but that they did not consult.
      At the next election I imagine that politically the Government's greatest weakness—as many Conservative Members know—will be that there was no inquiry. It does not matter whether or not that inquiry was into matters such as those gone into by the report of PA Management Consultants on the metropolitan counties. The fact would be that there was no inquiry, the Government had not listened and they had no objective evidence. Those factors will lead to a weakness that they will never be able to justify later.
      All commentators, and particularly The Times of 24 November, have said that, as a result, this Bill has an unstable impermanent air and is a breeding ground of discontent. Consequently, in five or six years' time the House will have to go through the exercise again. It will be the taxpayers and ratepayers who pay for that. The Government will not do so, because they have no money other than that which they glean from this country's citizens. If we make a mistake this time, it will be the Government's fault. Indeed, it will be an extremely costly mistake.
      The advantage of our proposal is that there would be different solutions for different areas. Perhaps districts on the edge of metropolitan counties such as Merseyside—for example, Wirral or Sefton—could establish a case for running their own services rather than being encompassed by the broad brush approach of the Bill, which is a two-stage approach—in the first instance a joint board and then the opportunity to opt out at a later date. Such a proposal would allow local people, not in a politicised or polemical way—including representatives at district and county level, hon. Members and the public generally — to put before an inspector specific ideas upon which he could report, and which could provide a

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      factual basis for discussion in the House. It would be without the quite clear prejudice that the Government have brought to the issue.
      One argument must be laid to rest, because the Government continually seek to use it in support of their proposition. They say that it is not true that throughout western Europe there are authorities for capital cities. The Institute of Local Government Studies — a highly respected body—specifically studied the administration of metropolitan areas in western democracies. In its report it states:
      "metropolitan structures and powers are generally the result of prolonged local study, debate and consultation, in order to set up arrangements which have as wide as possible multi-party consensus and may therefore be expected to be relatively stable. Commonly their operation is the subject of thorough review by independent commissions, as well as by parliamentary committees, and changes tend to be incremental…The direction of development is strongly towards…decentralisation."
      The report ends:
      "British local government is a frail and vulnerable plant compared with that in other Western European Countries, lacking their constitutional shield and their high levels of connection with central government."
      It is untrue to say that in any other western European country there is not a tier of government between central Government and the lowest tier of local government. I hope that the Secretary of State will not use that argument again, because there is no evidence to support it.
      There are two options tonight. We either have quick justice or we have good justice; we either have quick law or we have good law. I hope that at even this late stage the Government will accept that, because the matter is of such fundamental importance. As we go into this long, proper and considered period of Committee, it is far better to have a good law at the end of the process. We shall achieve that only with independent evidence and an independent inquiry. If we do not, there will be muddle, it will be a mistake, and we shall all pay for it and regret it.
      Mr. Charles Morrison: Like the hon. Member for Southwark and Bermondsey (Mr. Hughes), I hope that the Government will listen. However, judging by their recent record on local government legislation, there is not much hope of their doing so. If they do not, although they will get their legislation through Parliament I fear that they will create a banana skin of proportions that even they have not yet discovered.
      I wish to take up a point raised by my hon. Friend the Member for Lewisham, West (Mr. Maples). He asked what a successor Londonwide authority would do. I am not saying that Lord Marshall was 100 per cent. right, but it is worth recording that he undertook an inquiry at the behest of the last Conservative leader of the GLC. He was given a free hand to respond to any criticism and to make any recommendations that he felt inclined to make after his inquiries—including the possibility of the abolition of the GLC. He did not reach that conclusion. Indeed, he identified 38 functions that a metropolitan authority should fulfill.
      The GLC currently exercises 27 of those 38 functions. The London Boroughs Association, in its response to the White Paper "Streamlining the Cities", also identified 27 functions that should be managed by a Londonwide
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      authority, and which could not be managed by individual local authorities. It is not good enough to say that there is not a job for a Londonwide authority.
      7.15 pm
      Mr. Maples: I accept that some functions remain, but it is difficult to accept that any of them is important enough to necessitate the creation of a special Londonwide authority to manage it.
      Mr. Morrison: I am not saying that Lord Marshall is absolutely right. However, he recommended an increase in the number of functions, not a decrease. At least he went into the issue in some depth, as others have done—for example, Mr. Alan Greengross, who was referred to by my hon. Friend the Member for Ashford (Mr. Speed). Those with experience of London government believe strongly that it is impossible for London to be administered properly without some Londonwide authority. If an inquiry was set up, I believe that it would reach the same conclusion. That is why the Government do not want an inquiry. I intend to support the amendment.
      Our manifesto said that we would abolish the metropolitan counties and the GLC and return most of their functions to the boroughs and districts. In principle, I am not against the abolition of the GLC or the metropolitan councils. There is plenty of scope for evolving the GLC. However, it is absolutely certain that most of the functions under this Bill will not be returned to the boroughs and districts. Many of the functions being taken from the GLC and given either to boroughs or quangos have never been administered by the boroughs, so there is no question of returning them to the boroughs.
      My hon. Friend the Member for Harrow, East (Mr. Dykes) has already referred to the leading article in today's Financial Times. I suppose that the nearest the Financial Times comes to being a Socialist newspaper is the fact that it is printed on pink paper. It is generally thought to be a Conservative paper, albeit one that believes in good administration and good sense. The article stated:
      "But there are certain criteria which must be fulfilled for changes to be acceptable."
      The article went on:
      "The first is that the new arrangements stand a reasonable chance of being an improvement on the old. The second is that accountability is not reduced, so that pressure for efficiency and sensitivity to local aspirations is not diminished. The third is that democracy and democratic principles are neither weakened nor violated.
      The Bill fails on all three counts."
      Later the article stated:
      "The three key areas requiring amendment are the Government's reserve powers, joint boards and London. The Bill is littered with reserve powers to give a degree of centralised control over local issues which makes efficient service provision less, rather than more, likely."
      As I have always understood it, the Conservative party's principle and, perhaps, part of its philosophy, is that there should be the maximum possible distribution of power; yet in this Bill the Secretary of State tends to take unto himself these reserve powers. Day after day, week after week, month after month, leading politicians and great statesmen—even Lord Stockton, in his maiden speech in the other place—have criticised the degree of centralisation in the state. The Government's response is to make the state more centralised. That is an extraordinarily contradictory attitude. It is true that, under

      1111
      this Bill, some powers would go to the boroughs, but many more would go to the quangos or, indirectly, to Whitehall. Worst of all, there are rows of reserve powers.
      The GLC has rightly been criticised for wasting an enormous amount of money on advertisements. The natural inclination of some of us who support the Conservative party is to believe that the advertisements do not tell the true story. Last week, not for the first time, a number of national papers contained an advertisement headed:
      "Who Patrick Jenkin plans to put in the place of London's democratically elected councillors."
      Beneath the heading, there were nine photographs of my right hon. Friend who is described as the head of education, planning, traffic control, fire service, housing improvements, arts, waste disposal, grants to voluntary groups and flooding and land drainage. I said to myself, "Rubbish, that simply cannot be true." Unfortunately, on looking into the matter one discovers that, because of the reserve powers, there is a degree of truth in that advertisement. Again the point is made that the Government intend centralising power.
      I do not want to go through the justification for each of the nine claims, except with regard to education. If enacted, the Bill would give the Secretary of State the power to review the functions of the Inner London education authority and to transfer education to any of the inner London boroughs either before or after 1991. The Secretary of State for Education and Science will have the power to control for the first three years staffing levels and budgets. Apart from the fact that no other education authority is subject to such controls or to the permanent threat of break-up into smaller units, the provisions that leave my right hon. Friend with these powers are guaranteed to ensure that ILEA will live in a state of total uncertainty until 1991, or possibly later. I doubt that that will lead to good administration. Perhaps my right hon. Friend will be able to assure me that it will lead to good administration, but it is difficult to believe that that will happen.
      I am utterly convinced that, if there is not a proper inquiry into the future of London and the metropolitan boroughs before this legislation is passed, we shall end up with a measure which will provide, at best, poor administration and, at worst, complete chaos.
      Mr. Brian Sedgemore: I support the amendments. I suppose that it is a character defect on my part that I expect others, when
      I discuss issues dispassionately, rationally and intellectually, both inside and outside the Chamber, to respond in the same fashion. I am always confounded in my expectations, and I am afraid that that happened once again as a result of the Second Reading. My doubts about these amendments have been resolved. This morning, as I came to the House, I had grave doubts about the desirability of setting up a Royal Commission. I am now absolutely convinced of its desirability.
      On Second Reading, I raised two issues — first, damage to the arts in Hackney and, secondly, the visual arts and the continuing control of the Hayward gallery by the Arts Council, which would result if this legislation were passed. I then wrote to the chairman of the Arts Council, Sir William Rees-Mogg, and suggested that I and a couple of my advisers should see him to discuss some
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      of the issues. Hackney and the visual arts and the control of Hayward gallery were the only issues I suggested we should discuss.
      Imagine my astonishment when, this morning, I received a letter from Sir William Rees-Mogg which stated:
      "Dear Mr. Sedgemore
      I do not see any point in having a discussion with you until you have made a further study of the Arts' Council's work. If you believe that our support for the Regional Arts Associations or such institutions as the Notting Hill Carnival, the Everyman Theatre in Liverpool or the Whitechapel Gallery represent the notion of an 'exclusive Mandarin art', or that they are 'restrictive, elitist, oligarchic and discriminatory', then it seems to me you insult the institutions that we do support. If you are not aware of our support for these institutions, then you should reconsider your position in the light of the work that we actually do."
      Leaving aside the complete irrelevance of that letter to the concern I expressed about the Arts Council's marginalising, rejecting and defining as bad the work of women
      artists at the Hayward gallery, the chairman of that unelected quango is saying that he is not prepared to talk to the elected representatives of this country about major items of legislation before we reach the relevant clauses in Committee. That is one of the most powerful arguments one could adduce for setting up some type of inquiry or some type of Royal Commission to discuss some of these issues.
      I shall bring out some of the constitutional issues involved in supporting these amendments if I read briefly what I am thinking of saying in reply to Sir William Rees-Mogg. My handwritten draft states:
      "Dear Sir William Rees-Mogg,
      Thank you for your letter of 10 Dec, which I was disturbed to read. You are a public servant and the staff under your control at the Arts Council are paid in part out of the taxes of the people of Hackney. For good or ill I am one of their elected representatives. As such my constituents want me to discuss with you or your officers two issues, namely,

      (1) what the Arts Council will be able to do for Hackney when the GLC is abolished and, with it, its policy for the arts and the funds which accompany it, and

      (2) what the Arts Council intends for the future of the South Bank if it takes over the complex under the Bill, and what plans it has to change its damaging policies over the Hayward Gallery, particularly in relation to the Gallery's treatment of women artists.

      At our discussions, which I am sure that you will agree on mature reflection should take place, my constituents will expect me both to listen and to make suggestions. I have never heard of a public figure in your position refusing to see a Member of Parliament. If Ministers, chairpersons of nationalised industries, leaders of professional association, quango chiefs, and editors of great national newspapers can do so, I am not sure why you are refusing. As the Committee stage of the Local Government Bill proceeds, Conservative Ministers will be asking you for your briefings to deal with various amendments to the Bill which I shall put down in clauses which deal with the arts. In that context, your refusal to talk to a Labour MP whom you have in the past been only too happy to invite to PR luncheons will be seen as political bias. Although you are a Conservative, you are supposed to appear to be even-handed about these matters."
      I then go on to explain that Sir William Rees-Mogg does not seem to understand the important practical and ideological issues involved in the Bill and that it is important for Members of Parliament to have access to him to discuss the issues involved.
      7.30 pm
      Mr. Tony Banks: There is one small textual amendment that my hon. Friend might like to make to his letter before he sends it. Will he make the abolition of the GLC conditional—"if" rather than "when"?
      Mr. Sedgemore: My hon. Friend has made a valid point. We were discussing matters this afternoon in an unnamed Committee Room of the House, and I am sure that he will get his way. "If" will be the paramount word in the letter. I undertake to write that excellent amendment into my letter.
      It is pathetic that the chairman of an unelected quango, when asked to discuss future major issues that we are dealing with in Committee, should, in effect, put his finger in his mouth and say, "I am not prepared to talk to Brian Sedgemore." We should not perhaps be too worried about what Sir William Rees-Mogg says, because anyone who can do what he did 10 years ago, and write a book and say that our economic problems could be solved by God and the gold standard is no doubt capable of writing a load of tosh about the Arts Council and misunderstanding the ideology of the authority that he runs.
      We should send a clear message to Sir William Rees-Mogg from the House this evening. It is that his arrogance and ignorance are not just damaging to the impartiality of the Arts Council: they make it important that we have new procedures for considering Bills in the House. The amendments that we are talking about provide for an excellent procedure that we should have, perhaps not just on this but other Bills.
      Mr. Soley: Any Secretary of State should be deeply disturbed by the number of people from all parts of the Committee and by the individuals and groups outside it who have condemned the Bill, not just because it is a bad Bill in terms of organisation, but because it is thought to be undemocratic. That is extremely important.
      The problem for the Government is that many people inside and outside the Committee are deeply suspicious of their motives. It is important to put on record why we are suspicious and why many people outside the Committee, across the political spectrum, are suspicious of their motives. The first reason is that the authorities whom they seek to abolish are controlled by their political opponents. They are Labour authorities and a Conservative Government are seeking to abolish them.
      I shall not build on my points in too much detail now but I may at another time in another place. The second point that needs to be borne in mind and which we have from the Secretary of State for Trade and Industry is that, because the Conservative party does not like the GLC's policies, it will abolish it.
      Thirdly, the Government have made the point a number of times, inside and outside the House, that they want to cut public expenditure. We all know that they were elected on a ticket of cutting public expenditure and we all know that they have failed to cut central Government public expenditure. They have ended up trying to make local authorities cut their public expenditure for them. It is a classic case of, "Don't do as we do; do as we tell you."
      The fourth reason for questioning the Government's motives is that it is becoming increasingly clear that they want to silence opposition. Let me spell that out. It is not just the silencing of Labour-controlled authorities, but what is perhaps more important and deeply disturbing, they wish to silence some of the minority groups that they do not like. That is why they have picked on the GLC.
      I believe that the GLC has been far-sighted and brave in supporting many of the groups that it has. I wish to encourage it to do so, but the Government do not like that. No one gave the case away more than the hon. Member
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      for Mid-Staffordshire (Mr. Heddle) when he went down what I regard as a profoundly dangerous road. He was saying that if we do not like what a local authority is raising money for, we should abolish that local authority because that level of rates should not be imposed on the individual. It follows that if a Government are spending the public's money in a way that is not popular, we should abolish the Government. I am all for abolishing the Government, but I wish to do it through the ballot box. I want that for local authorities as well.
      This is a bad Bill. It is not just that the alternatives have not been thought out or that the many minority groups — the Victim Support Scheme, the ethnic minority groups—and major groups such as the police and fire service will be disrupted and disorganised as a result, but people here and outside profoundly distrust the Government's motives, and the Government must justify their actions.
      Mr. Patrick Jenkin: We have had an interesting and useful debate. I am sure that the Committee will forgive me if I say that much of it was a repeat of the arguments that were deployed by both sides of the House on Second Reading. I hope that the Committee will forgive me if I do not rehearse the arguments of principle on the main substance of the Bill.
      The amendments call, in a variety of ways, for some form of inquiry from a Royal Commission at one end of the scale to a local inquiry of some kind, to which the hon. Member for Southwark and Bermondsey (Mr. Hughes) spoke briefly.
      I shall start by reminding the Opposition Front Bench what their environment spokesman said about the Labour party's attitude to structural reform of local government about three months before the 1983 election. The right hon. Member for Manchester, Gorton (Mr. Kaufman) told a Labour party conference:
      "We shall therefore legislate to create unitary district authorities which will be responsible for all the functions in their area that they can sensibly undertake. We shall, of course, consult carefully and genuinely before we introduce our legislation. However, we shall set up no more inquiries. We shall legislate and we shall legislate so that these reforms will be in force during the lifetime of the next Parliament."
      If that was the view of the Labour party spokesman on the environment, I fail to understand how the Opposition have the effrontery to table and speak to this group of amendments. It is absurd. They make clear what they were going to do and that they would have no inquiries.
      Mr. Andrew F. Bennett: We said we would consult.
      Mr. Jenkin: I am coming to consultation. I take the point, but there is a second large hole in the arguments that have been addressed to the Committee about that. They said that they would undertake their reform of structure, with unitary authorities devolving to the local level as far as could sensibly be done. I repeat the words of the right hon. Member for Gorton:
      "we shall set up no more inquiries. We shall legislate".
      Mr. Tony Banks: In the context of those remarks by my right hon. Friend the Member for Manchester, Gorton (Mr. Kaufman), will the Secretary of State comment on the position of the Greater London council? Secondly, will he accept it from me that I disagree very strongly with the views expressed by my right hon. Friend? I ask my hon.

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      Friends to be as rational in approaching those remarks as I have asked Conservative Members to be in approaching the Government's proposals this evening.
      Mr. Jenkin: I can understand that the hon. Member for Newham, North-West (Mr. Banks) may disagree with what one of his party's Front Bench spokesmen said, but the point is undeniable. The Labour party made it clear at its national conference on local government that that was its intention. According to my research, the right hon. Member for Gorton, who was the Opposition spokesman on the environment, and who presumably held that shadow portfolio throughout the 1983 election, campaign, appears not to have addressed one word on radio, on television, or to any audience to which he put out a press release, on the subject of the Conservative manifesto commitment to do the same in the metropolitan areas and in Greater London.
      The hon. Member referred to what the right hon. Member for Gorton said about the GLC. His view was clear and I quoted it on Second Reading. He said:
      "We shouldn't regard the existence of the GLC as sacrosanct. In my view it is an enormous bureaucracy which has a dubious role to play."—[Official Report, 3 December 1984; Vol. 69, c. 30.]
      The right hon. Member for Gorton has never made any secret of his dislike of the metropolitan county councils and of his desire to see local government powers returned to the city of Manchester, where his constituency is. He has never made any secret of his views about the unsuitability of the GLC. He made it perfectly clear that if a Labour Government had been elected they would have legislated without any inquiry.
      Therefore, I listened with some cynicism to speech after speech from Labour Members saying how disgraceful it is for the Government to proceed with this sensible reform of local government without having indulged in a Royal Commission, a committee of inquiry, an audit commission, a local inquiry or anything else. It is a lot of humbug.
      Mr. Straw: It is not humbug, because we have a record in government of consulting to a very great degree, as the Secretary of State knows, in the area of local government. He knows that we did so in setting up the Redcliffe-Maud Commission. My right hon. Friend the Member for Bethnal Green and Stepney (Mr. Shore) also consulted extensively before bringing forward proposals for a much more modest measure than the Bill before the House.
      The Secretary of State apparently disagrees — I understand why — with my right hon. Friend the Member for Manchester, Gorton (Mr. Kaufman). Therefore, should not the Secretary of State have established a proper inquiry into the proposals before going ahead?
      7.45 pm
      Mr. Jenkin: I am not expressing a view on whether I agree with what the right hon. Member for Gorton said. I am saying that it is sheer hypocrisy for Labour Members to chide us for proceeding with this reform without having an inquiry, when it is clear and on the record that their own Front Bench had committed their party to do precisely the same thing. [Interruption.] So let us hear no more about that. We have consulted widely on our proposals, and I shall itemise them. In response to the views expressed, we have made a number of changes in what we originally proposed, and we have now brought legislation to the
      1116
      House. I found it very strange to have to sit here for nearly three hours listening to abuse of the Government for not having an inquiry before proceeding with the Bill.
      With regard to consultation, there is a huge hole in the arguments which have been addressed to the Government Benches—
      Mr. Favell: My right hon. Friend has dealt with the humbug of the Labour party. The 1983 manifesto of the alliance says on page 24 that the alliance would
      "revitalise local government, restoring its independence and its accountability to the local electorate by…simplifying the structure of local government to make it more effective by abolishing one of the existing tiers of local government. This will be done by stages against the background of our proposals for the development of regional government. It would inevitably involve the eventual abolition of the Metropolitan Counties."
      Mr. Jenkin: My hon. Friend is right. I think that the hon. Member for Southwark and Bermondsey (Mr. Hughes) quoted the provision in the 1970 Conservative party manifesto, where it was said that inquiries would be set up.
      There has been complete inconsistency in the arguments from the Opposition. On the one hand, we are accused of not having consulted properly on all the details of the proposed reform, and I refute that accusation. The hon. Member for Woolwich (Mr. Cartwright) and one or two of my hon. Friends, such as my hon. Friend the Member for Harrow, East (Mr. Dykes) and my right hon. Friend the Member for Chesham and Amersham (Sir
      Gilmore), charged the Government with preparing proposals which were not complete in every jot and tittle. We were accused of not having a proposal in the Bill for dealing with the Woolwich ferry. We were accused by my right hon. Friend of not having provided for precisely how the refuse disposal arrangements for London were to work. Yet, almost in the same breath, hon. Members have accused the Government of failing to consult.
      Within a month or two of the general election we published a White Paper. As I said at the time, it was a White Paper with very green edges. It dealt in great detail with how the main proposal would be carried forward. Every chapter of the White Paper ended with a series of questions addressed to the readers. We made it clear that we were very prepared to listen to detailed arguments about the proposals.
      Mr. Tony Banks: Yes, but the Government ignored them all.
      Mr. Jenkin: The hon. Gentleman is wrong, and I can give numerous examples showing that we took the fullest account of the views put to us by a wide range of people. We were prepared to listen to all the views that were put forward.
      If there has been any lack of effective consultation on the details, the real blame rests with those authorities and those trade unions which have refused to enter into sensible bilateral discussion with the Government, with the staff commission or with anybody else, because they hoped that the whole thing would go away.
      Mr. Jeremy Corbyn: Will the Secretary of State explain why he has refused to offer the same amount of money to the staff affected by abolition or by transfer as his right hon. Friend the Member for Henley (Mr. Heseltine) did in regard to the housing transfer order in 1982 dealing with former GLC housing?
      Mr. Jenkin: The short answer to the hon. Gentleman is that if the interests that he represents—I understand that he is sponsored by the National Union of Public Employees—
      Mr. Corbyn: And I am proud of it.
      Mr. Jenkin: I have no doubt that the hon. Gentleman is proud of that; he would be proud of almost anything. If the union that sponsors him, which represents many local government employees, were prepared to respond to the invitation of the staff commission to discuss precisely that question, he would get the answer to it. As it is, his union has refused point blank to take part in any discussions. I do not know how he has the effrontery to stand up and ask a detailed question about the staff proposals. We published a lengthy document and invited the unions to discuss the matter. So the hon. Gentleman missed the point.
      I should like to refer to the origins of the proposals—
      Mr. Andrew F. Bennett: What about the changes that the Government have made?
      Mr. Jenkin: If the hon. Gentleman would like it, I shall deal with the changes that we have made now. We were accused by the hon. Member for Newcastle upon Tyne, North (Mr. Brown) of ignoring consultation. The hon. Member for Southwark and Bermondsey said that Ministers had not listened. The hon. Member for Liverpool, West Derby (Mr. Wareing) said that there were no concessions to informed opinion. I have to tell them that they were all absolutely plumb bang wrong. The Opposition have welcomed warmly the decision, which was not in the original White Paper but which is now in the Bill, that the Inner London education authority should be a directly elected authority. In making that decision, we were impressed by the cross-party weight of opinion from Inner London that that would be an improvement in our proposals, and we accepted it.
      Our original proposals on planning in the six metropolitan areas and London were criticised by planning experts as unnecessarily complicated. We therefore came forward with a radical change — the new idea of a unitary local plan, which has met with much more support. No doubt it will be debated during proceedings on the Bill, but it represents a significant change from the original proposal.
      In our original proposals, we were accused of failing to take adequate account of what I might call regional arts institutions. We therefore came along with proposals, which again have been widely welcomed by the arts lobby, for more central funding of regional arts. It has almost ceased to be a factor in the abolition argument.
      We were criticised that in the White Paper we were not making sufficient provision for the continuity of local government support for voluntary bodies. On Second Reading I spelt out the four measures that we have introduced, all since the White Paper, in response to consultation, to improve support for the voluntary bodies.
      Originally, we envisaged that a local district council would be able to run its own bus service, but we made no provision for the fire service and the police service being devolved to the district council. In response to the many powerful representations from district councils in various parts of the country, particularly the west midlands and Merseyside, which wished to get back the powers that they
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      had as county boroughs, we included in the Bill the power, after a reasonable period, to make an application to the appropriate Secretary of State.
      On a relatively less important matter—but it was important to the people concerned — we were charged that in the White Paper we had not taken account of the value of the mobility scheme within London offering the choice of exchange of houses. We have brought forward proposals, which were spelt out in the Yellow Book, for a mobility scheme. Therefore, to say that the Government have ridden roughshod over public opinion and that we have paid no attention to people's views is a travesty of the truth. I hope that we shall hear no more of it.
      I was asked a perfectly fair question by the hon. Member for Woolwich (Mr. Cartwright) and, I am sorry to say, some of my hon. Friends made the same charge against the Government, that somehow the proposal was dreamed up in the last few days before the manifesto was published.
      Mr. Straw: Come on.
      Mr. Jenkin: The hon. Gentleman also made that charge. I regret that some of my hon. Friends made the same charge. Nothing could be further from the truth. The argument about whether the GLC should change has been going on for years in London. Motions have been passed in London borough councils, in council after council, calling for the abolition of the GLC. We all know that the metropolitan county areas have never had the support of the metropolitan district councils from the day they were set up. Resolutions were being passed, councils were subscribing to the Sheffield resolution, letters were being written—
      Mr. Wareing: Which councils on Merseyside?
      Mr. Jenkin: The hon. Gentleman knows that only in 1982 Liverpool city council passed a resolution calling for the end of the Merseyside county council, under the leadership of Sir Trevor Jones. Therefore, it is all the more surprising that the hon. Member for Southwark and Bermondsey is criticising the proposals. These arguments have raged for years. There was plenty of cross-party support for the proposal that we have now put forward. I understand that people may criticise some of the details. That is what the Committee stage of the Bill is all about, but to imagine that the proposal was somehow conjured out of nothing in the last few weeks of the 1983 election campaign is a travesty.
      Mr. Straw: The hon. Member for Harrow, East (Mr. Dykes) made specific charges about the lack of consideration of this specific proposal within the Conservative party in the period leading up to the election and said, among other things, that it had gone to the Cabinet for the most cursory of examinations, when two Members spoke up in favour of it, and that was it. Was the hon. Gentleman correct?
      Mr. Jenkin: Neither the hon. Gentleman nor my hon. Friend the member for Harrow, East has been a member of a Government. Perhaps they do not understand how the Cabinet committee system works. The details of such a proposal are most unlikely to be handled in Cabinet. The papers all go round. Those who are members of the Government know that perfectly well.
      I can tell the hon. Member for Blackburn that on the issue of local government reform we had more piles of

      1119
      paper and hours of discussion in the year that led up to the election than on almost any other subject when I was Secretary of State for Industry. I shall refer to the point made by the hon. Member for Woolwich. There was a substantial amount of preparatory work in the Government before the election. When I arrived in the Department of the Environment after the election it was clear that a great deal of preparatory work had been done before the election in my Department and the other Departments concerned. As the Secretary of State for Industry and a member of the Cabinet, I had been aware of what was happening and was taking part in the decisions. The fact that a final decision was taken only shortly before the election does not mean that the analyses on which that decision was based were not exhaustive.
      It does no credit to the case of those who seek to attack the proposals if they try to pretend that there was not a great deal of care and discussion. We did not discuss all the details because we were going to consult on them. We have put out many detailed consultation papers and have responded in considerable measure to the points that were made to us—
      Mr. Dykes rose—
      8 pm
      Mr. Jenkin: I have given way to my hon. Friend, and he refused to give way to me. My hon. Friend said that there was massive opposition to the proposal in Harrow. Harrow borough council supports it. The hon. Member for Stretford (Mr. Lloyd) said that there was no support for it in Greater Manchester. He is a member of the Trafford council which supports this measure. My hon. Friend the Member for Ashford (Mr. Speed), who has great experience of these matters and to whom I listened with great care, attacked the measure as creating massive centralisation. If one measures it by the budgetary expenditure this year, 95 per cent. of the expenditure will go to the boroughs, either individually or jointly. In the case of the metropolitan county councils, virtually 100 per cent. will go to them.
      We shall examine the powers during the Committee stage of the Bill. This is not a massive centralising piece of legislation. It represents substantial devolution to the boroughs and districts. The hon. Member for Woolwich and many other hon. Members said that no local government reform has been carried out without it being preceded by a substantial inquiry. The hon. Gentleman mentioned Redcliffe-Maud. The fact is that the changes that took place following Redcliffe-Maud bore almost no relationship to what his committee had recommended. It reminded me of the examination question to a student who was asked to describe the principles of the Archimedes pump. He replied, "I know nothing about the Archimedes pump, but here is a list of the kings of Israel and Judaea."
      When in opposition, the Labour party wants nothing but delay and indecision. My hon. Friend the Member for Mid-Staffordshire (Mr. Heddle) was absolutely right. These amendments are a recipe for more delay, more uncertainty and more indecision. There is a mass of information based upon the Herbert report, the Redcliffe-Maud report and the Marshall report. Those reports give us all that we need by way of analytical background to all forms of local government. What then was needed was judgment in the light of experience. We have made that judgment. We have looked at the metropolitan county
      1120
      councils and the Greater London council, made our judgment and brought forward our legislation. I ask the Committee to reject these amendments.
      Mr. Cowans: Before dealing with the reply of the Secretary of State may I congratulate the hon. Member for Bristol, West (Mr. Waldegrave), the Parliamentary Under-Secretary of State for the Environment, who has just become the father of a boy. Perhaps the Secretary of State would set up a Royal Commission, part of whose job should be to consult on the name.
      I understood very well the speech of the Secretary of State. It went like this: "if you do not have a case and if you do not have any facts, try to attack everybody else." During the course of the debate, to all of which I have listened, there were seven Labour speakers, two alliance speakers and five Tory rebels. I know what rebels are because I have been a rebel. The total number of Tory Members who support the Bill is three, one of whom immediately admitted that he had not read the Bill. He made a fantastic speech. The hon. Member had not read the Bill but he spoke about abolition, which proved to me that he had not read the Bill. It would be interesting if the Secretary of State could convince the members of his own party. He has not done so up to now.
      The hon. Member for Wirral, South (Mr. Porter) who had not read the Bill—
      Mr. Tony Banks: Or the amendment.
      Mr. Cowans: If the hon. Member had not read the Bill it is exceedingly unlikely that he would have read the amendment. If one has not read the Bill one cannot amend it. The hon. Member succeeded very well, not having read the Bill. He spoke at great length. If the hon. Member for Wirral, South were to read the Bill he might be able to convince the chamber of trade on Merseyside. I do not know any rabid Socialists who are members of the chamber of trade on Merseyside. Even the chamber of trade says that Merseyside county council has been successful in promoting the economic and business life of the region and has done much to promote tourism and the arts.
      Mr. Patrick Jenkin: The hon. Gentleman will know that earlier in the year Merseyside chamber of commerce expressed views that were against the abolition of the Merseyside county council. Subsequently, it thought again about the matter and in September decided that it was prepared to support the abolition of the Merseyside county council. One or two of its members expressed doubts about the original meeting. They said that it was not a very well attended meeting. It came back a third time last month, in November and by a decisive majority decided to confirm the opinion that it supports the abolition of the Merseyside county council and the main principles of the Bill. I hope that the hon. Gentleman will now withdraw his remarks.
      Mr. Cowans: So it is one down, with 55,000 to go. If the Secretary of State is right about the Merseyside chamber of commerce, stand by—here we go. Against abolition are the United Kingdom Association of Professional Engineers, the School of Advanced Urban Studies, the university of Bristol, the Chartered Institute of Public Finance and Accountancy, and, for the hon. Member for Mid-Staffordshire, (Mr. Heddle) the National Union of Ratepayers' Associations. They are supposed to

      1121
      be on the side of the Government. Also the CBI—there are no rabid Socialists in the CBI, are there? — the National Trust and the Royal Town Planning Institute are against abolition. If the Secretary of State stands up and says that Merseyside county council has changed its mind, he ought to stand up and say how many of these other bodies have changed their mind. So it is one to the Secretary of State and eight to me.
      It is absolute nonsense for the Secretary of State to stand up and talk about my right hon. Friend the Member for Manchester, Gorton (Mr. Kaufman). He suggested that what my right hon. Friend the Member for Gorton said was bad and that the Government would do better. However, my right hon. Friend the Member for Gorton said that the Labour party would consult before legislating. If the Secretary of State believes that to be bad, why does he not do better and accept the amendment about the Royal Commission? The Secretary of State should not accuse somebody of doing something badly when the Secretary of State is doing it even worse. My right hon. Friend the Member for Newham, North-West (Mr. Banks) said that this legislation had been cobbled together on the back of a cigarette packet. That may be true, but I fancy that it was cobbled together on the back of an old grocer's bag.
      The Secretary of State assures us that this is long-standing, well-planned legislation. If he is right, there was something wrong with his predecessor, his right hon. Friend the Secretary of State for the Environment, who on 23 February 1983, which is not so very long ago, said that he did not have any plans to change the existing system. So it cannot be all that well planned. Need I remind hon. Members of today's date?
      Before talking about a long-standing, well-established well-thought-out plan, the Secretary of State ought to start talking to his colleagues in Cabinet. That might be infra dig, because there is only one person in the Cabinet, but the right hon. Gentleman might start a precedent, and it would be helpful if he did.
      I could go on for a long while, but I am conscious of the time. I thought about preparing a few notes for the debate, but I decided against it, because I thought that I should come here with an open mind and to listen to the debate—unlike Conservative Members who have been dragged screaming from the Tea Room to support the insupportable.
      I have kept an open mind and, leaving aside the speeches of my hon. Friends, the arguments that have convinced me about the merit of the amendment have come from the Tory Benches. Conservative Members have made some tremendous arguments.
      I do not accuse the Secretary of State of not listening, but I do accuse him of not hearing. The right hon. Gentleman has accused the trade unions of not coming forward on this issue. But they have bombarded him with paper, left, right and centre and he has not looked at any of it. He would not even publish the replies so that hon. Members could read them. If he cannot convince his own Back Benchers and will not publish documents so that unbiased observers can read them, where is his case?
      No one on the Opposition side opposes an examination of local government. Far from it. We should welcome such an examination across the board, with those who serve in local government, and those who are serviced by it having an input. Instead of that, the Secretary of State has drawn
      1122
      up legislation on the back of an old Woodbine packet. It means nothing to anyone on his side and nothing to anyone on the Opposition side. More important, it has got everybody outside completely confused.
      As the hon. Member for Harrow, East (Mr. Dykes) said, it is not too late and it is not a sign of weakness to have another look. The Government have had another look at some matters. Dare I mention student grants? When the second look revealed 150 Conservative votes against the Government, lo and behold, the Government changed their mind. I do not think that there will be 150 Conservative votes against the Government on the amendment, but, although the case has been well made by my hon. Friends, it has been made even better by Conservative Members. The Secretary of State's hon. Friends have made our case for a Royal Commission or an independent body to examine the matter in detail. The test of any amendment is whether the case for it has been made. I submit that the Government's case for refusing to accept the amendment has not been made.
      The Secretary of State's action in refusing to accept the amendment is like accusing a man of murder, taking him to court and hanging the jury.
      Question put, That the amendment be made:—
      The Committee divided: Ayes 182, Noes 233.

      Division No. 46]

      [8.14 pm

      AYES

      Alton, David

      Cunningham, Dr John

      Anderson, Donald

      Dalyell, Tam

      Archer, Rt Hon Peter

      Davies, Ronald (Caerphilly)

      Ashdown, Paddy

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

      Ashley, Rt Hon Jack

      Deakins, Eric

      Bagier, Gordon A. T.

      Dewar, Donald

      Banks, Tony (Newham NW)

      Dixon, Donald

      Barron, Kevin

      Dobson, Frank

      Beckett, Mrs Margaret

      Dormand, Jack

      Beith, A. J.

      Dubs, Alfred

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

      Duffy, A. E. P.

      Bermingham, Gerald

      Dunwoody, Hon Mrs G.

      Bidwell, Sydney

      Eastham, Ken

      Blair, Anthony

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

      Boothroyd, Miss Betty

      Ellis, Raymond

      Boyes, Roland

      Evans, John (St. Helens N)

      Bray, Dr Jeremy

      Ewing, Harry

      Brown, Gordon (D'f'mline E)

      Fatchett, Derek

      Brown, Hugh D. (Provan)

      Field, Frank (Birkenhead)

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

      Fisher, Mark

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

      Flannery, Martin

      Bruce, Malcolm

      Foot, Rt Hon Michael

      Caborn, Richard

      Forrester, John

      Callaghan, Jim (Heyw'd & M)

      Foster, Derek

      Campbell, Ian

      Foulkes, George

      Campbell-Savours, Dale

      Fraser, J. (Norwood)

      Carlile, Alexander (Montg'y)

      Freeson, Rt Hon Reginald

      Carter-Jones, Lewis

      Garrett, W. E.

      Cartwright, John

      George, Bruce

      Clark, Dr David (S Shields)

      Godman, Dr Norman

      Clay, Robert

      Golding, John

      Clwyd, Mrs Ann

      Gould, Bryan

      Cocks, Rt Hon M. (Bristol S.)

      Hamilton, W. W. (Central Fife)

      Cohen, Harry

      Hancock, Mr. Michael

      Coleman, Donald

      Hardy, Peter

      Concannon, Rt Hon J. D.

      Harrison, Rt Hon Walter

      Conlan, Bernard

      Hogg, N. (C'nauld & Kilsyth)

      Cook, Frank (Stockton North)

      Holland, Stuart (Vauxhall)

      Cook, Robin F. (Livingston)

      Home Robertson, John

      Corbett, Robin

      Howell, Rt Hon D. (S'heath)

      Corbyn, Jeremy

      Howells, Geraint

      Cowans, Harry

      Hoyle, Douglas

      Cox, Thomas (Tooting)

      Hughes, Dr. Mark (Durham)

      Craigen, J. M.

      Hughes, Robert (Aberdeen N)

      Crowther, Stan

      Hughes, Roy (Newport East)

      Cunliffe, Lawrence

      Hughes, Simon (Southwark)

      1123

      Janner, Hon Greville

      Pike, Peter

      John, Brynmor

      Powell, Raymond (Ogmore)

      Johnston, Russell

      Prescott, John

      Jones, Barry (Alyn & Deeside)

      Radice, Giles

      Kaufman, Rt Hon Gerald

      Randall, Stuart

      Kennedy, Charles

      Rees, Rt Hon M. (Leeds S)

      Kilroy-Silk, Robert

      Roberts, Allan (Bootle)

      Kinnock, Rt Hon Neil

      Roberts, Ernest (Hackney N)

      Kirkwood, Archy

      Robertson, George

      Lamond, James

      Rogers, Allan

      Leighton, Ronald

      Rooker, J. W.

      Lewis, Ron (Carlisle)

      Ross, Ernest (Dundee W)

      Lewis, Terence (Worsley)

      Ross, Stephen (Isle of Wight)

      Litherland, Robert

      Sedgemore, Brian

      Lloyd, Tony (Stretford)

      Sheerman, Barry

      Lofthouse, Geoffrey

      Sheldon, Rt Hon R.

      Loyden, Edward

      Short, Ms Clare (Ladywood)

      McCartney, Hugh

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

      McDonald, Dr Oonagh

      Silkin, Rt Hon J.

      McGuire, Michael

      Skinner, Dennis

      McKay, Allen (Penistone)

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

      McKelvey, William

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

      Maclennan, Robert

      Snape, Peter

      McNamara, Kevin

      Soley, Clive

      McTaggart, Robert

      Spearing, Nigel

      McWilliam, John

      Stott, Roger

      Madden, Max

      Strang, Gavin

      Marek, Dr John

      Straw, Jack

      Marshall, David (Shettleston)

      Thomas, Dafydd (Merioneth)

      Mason, Rt Hon Roy

      Thomas, Dr R. (Carmarthen)

      Maxton, John

      Thompson, J. (Wansbeck)

      Maynard, Miss Joan

      Thorne, Stan (Preston)

      Meadowcroft, Michael

      Tinn, James

      Millan, Rt Hon Bruce

      Torney, Tom

      Miller, Dr M. S. (E Kilbride)

      Wainwright, R.

      Morris, Rt Hon A. (W'shawe)

      Wallace, James

      Morris, Rt Hon J. (Aberavon)

      Wardell, Gareth (Gower)

      Nellist, David

      Wareing, Robert

      Oakes, Rt Hon Gordon

      White, James

      O'Brien, William

      Wigley, Dafydd

      O'Neill, Martin

      Williams, Rt Hon A.

      Park, George

      Winnick, David

      Parry, Robert

      Young, David (Bolton SE)

      Patchett, Terry

      Pavitt, Laurie

      Tellers for the Ayes:

      Pendry, Tom

      Mr. James Hamilton and

      Penhaligon, David

      Mr. Sean Hughes.

      NOES

      Aitken, Jonathan

      Farr, Sir John

      Alison, Rt Hon Michael

      Favell, Anthony

      Ashby, David

      Fenner, Mrs Peggy

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

      Fletcher, Alexander

      Batiste, Spencer

      Fookes, Miss Janet

      Beggs, Roy

      Forman, Nigel

      Bellingham, Henry

      Forsyth, Michael (Stirling)

      Bevan, David Gilroy

      Forth, Eric

      Biffen, Rt Hon John

      Fox, Marcus

      Boscawen, Hon Robert

      Franks, Cecil

      Braine, Sir Bernard

      Freeman, Roger

      Brandon-Bravo, Martin

      Fry, Peter

      Bright, Graham

      Gale, Roger

      Brown, M. (Brigg & Cl'thpes)

      Galley, Roy

      Bruinvels, Peter

      Gardiner, George (Reigate)

      Budgen, Nick

      Gardner, Sir Edward (Fylde)

      Burt, Alistair

      Glyn, Dr Alan

      Butcher, John

      Gorst, John

      Carlisle, Kenneth (Lincoln)

      Gow, Ian

      Carlisle, Rt Hon M. (W'ton S)

      Gower, Sir Raymond

      Clark, Sir W. (Croydon S)

      Greenway, Harry

      Colvin, Michael

      Gregory, Conal

      Conway, Derek

      Griffiths, Peter (Portsm'th N)

      Coombs, Simon

      Grist, Ian

      Cope, John

      Grylls, Michael

      Crouch, David

      Gummer, John Selwyn

      Currie, Mrs Edwina

      Hamilton, Hon A. (Epsom)

      Dickens, Geoffrey

      Hamilton, Neil (Tatton)

      Dorrell, Stephen

      Hampson, Dr Keith

      Douglas-Hamilton, Lord J.

      Hanley, Jeremy

      du Cann, Rt Hon Edward

      Hannam,John

      1124

      Hargreaves, Kenneth

      Needham, Richard

      Harris, David

      Nelson, Anthony

      Haselhurst, Alan

      Neubert, Michael

      Hawkins, C. (High Peak)

      Newton, Tony

      Hayward, Robert

      Norris, Steven

      Heathcoat-Amory, David

      Oppenheim, Phillip

      Heddle, John

      Oppenheim, Rt Hon Mrs S.

      Henderson, Barry

      Osborn, Sir John

      Hickmet, Richard

      Page, Richard (Herts SW)

      Higgins, Rt Hon Terence L.

      Parris, Matthew

      Hill, James

      Patten, John (Oxford)

      Hind, Kenneth

      Pawsey, James

      Hogg, Hon Douglas (Gr'th'm)

      Peacock, Mrs Elizabeth

      Holland, Sir Philip (Gedling)

      Percival, Rt Hon Sir Ian

      Holt, Richard

      Pollock, Alexander

      Hooson, Tom

      Porter, Barry

      Hordern, Peter

      Powell, William (Corby)

      Howarth, Gerald (Cannock)

      Powley, John

      Howell, Rt Hon D. (G'ldford)

      Price, Sir David

      Hubbard-Miles, Peter

      Proctor, K. Harvey

      Hunt, David (Wirral)

      Raffan, Keith

      Hunt, John (Ravensbourne)

      Rathbone, Tim

      Hunter, Andrew

      Renton, Tim

      Hurd, Rt Hon Douglas

      Rhodes James, Robert

      Irving, Charles

      Rhys Williams, Sir Brandon

      Jackson, Robert

      Rifkind, Malcolm

      Jenkin, Rt Hon Patrick

      Roberts, Wyn (Conwy)

      Jones, Gwilym (Cardiff N)

      Robinson, Mark (N'port W)

      Jones, Robert (W Herts)

      Rossi, Sir Hugh

      Jopling, Rt Hon Michael

      Rowe, Andrew

      Kellett-Bowman, Mrs Elaine

      Ryder, Richard

      Key, Robert

      Sackville, Hon Thomas

      King, Roger (B'ham N'field)

      Sainsbury, Hon Timothy

      Knight, Gregory (Derby N)

      St. John-Stevas, Rt Hon N.

      Lamont, Norman

      Sayeed, Jonathan

      Lang, Ian

      Shaw, Giles (Pudsey)

      Latham, Michael

      Shaw, Sir Michael (Scarb')

      Lawler, Geoffrey

      Shelton, William (Streatham)

      Lawrence, Ivan

      Shepherd, Richard (Aldridge)

      Lee, John (Pendle)

      Shersby, Michael

      Lennox-Boyd, Hon Mark

      Silvester, Fred

      Lewis, Sir Kenneth (Stamf'd)

      Sims, Roger

      Lightbown, David

      Skeet, T. H. H.

      Lloyd, Ian (Havant)

      Smith, Tim (Beaconsfield)

      Lloyd, Peter, (Fareham)

      Soames, Hon Nicholas

      Lord, Michael

      Speller, Tony

      Luce, Richard

      Spence, John

      Lyell, Nicholas

      Spencer, Derek

      McCrindle, Robert

      Spicer, Jim (W Dorset)

      McCurley, Mrs Anna

      Spicer, Michael (S Worcs)

      Macfarlane, Neil

      Squire, Robin

      MacGregor, John

      Steen, Anthony

      MacKay, Andrew (Berkshire)

      Stern, Michael

      MacKay, John (Argyll & Bute)

      Stevens, Lewis (Nuneaton)

      Maclean, David John

      Stewart, Allan (Eastwood)

      McQuarrie, Albert

      Stewart, Andrew (Sherwood)

      Madel, David

      Stradling Thomas, J.

      Major, John

      Temple-Morris, Peter

      Malone, Gerald

      Thomas, Rt Hon Peter

      Maples, John

      Thompson, Donald (Calder V)

      Marland, Paul

      Thompson, Patrick (N'ich N)

      Marlow, Antony

      Thorne, Neil (Ilford S)

      Marshall, Michael (Arundel)

      Thurnham, Peter

      Mates, Michael

      Townend, John (Bridlington)

      Mather, Carol

      Trippier, David

      Maude, Hon Francis

      Trotter, Neville

      Mawhinney, Dr Brian

      Twinn, Dr Ian

      Maxwell-Hyslop, Robin

      van Straubenzee, Sir W.

      Mellor, David

      Vaughan, Sir Gerard

      Merchant, Piers

      Waddington, David

      Meyer, Sir Anthony

      Waldegrave, Hon William

      Miller, Hal (B'grove)

      Walden, George

      Mills, Iain (Meriden)

      Walker, Bill (T'side N)

      Mills, Sir Peter (West Devon)

      Waller, Gary

      Miscampbell, Norman

      Ward, John

      Mitchell, David (NW Hants)

      Wardle, C. (Bexhill)

      Moate, Roger

      Warren, Kenneth

      Monro, Sir Hector

      Watson, John

      Montgomery, Fergus

      Watts, John

      Murphy, Christopher

      Wells, Bowen (Hertford)

      1125

      Wheeler, John

      Yeo, Tim

      Whitney, Raymond

      Young, Sir George (Acton)

      Wiggin, Jerry

      Younger, Rt Hon George

      Wilkinson, John

      Winterton, Mrs Ann

      Tellers for the Noes:

      Winterton, Nicholas

      Mr. Tristan Garel-Jones and

      Wolfson, Mark

      Mr. Tony Durant.

      Wood, Timothy

      Question accordingly negatived.
      Amendment proposed: No. 2, in page 1, line 8, at beginning insert
      'After a Parliamentary tribunal of inquiry has reported on local government in Greater London and the metropolitan counties and'.—[Mr. Straw.]
      The Committee divided: Ayes 185, Noes 229.

      Division No. 47]

      [8.25 pm

      AYES

      Alton, David

      Edwards, Bob (Wh'mpt'n SE)

      Anderson, Donald

      Ellis, Raymond

      Archer, Rt Hon Peter

      Evans, John (St. Helens N)

      Ashdown, Paddy

      Ewing, Harry

      Ashley, Rt Hon Jack

      Fatchett, Derek

      Bagier, Gordon A. T.

      Field, Frank (Birkenhead)

      Banks, Tony (Newham NW)

      Fields, T. (L'pool Broad Gn)

      Barnett, Guy

      Fisher, Mark

      Barron, Kevin

      Flannery, Martin

      Beckett, Mrs Margaret

      Foot, Rt Hon Michael

      Beith, A. J.

      Forrester, John

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

      Foster, Derek

      Bermingham, Gerald

      Foulkes, George

      Bidwell, Sydney

      Fraser, J. (Norwood)

      Blair, Anthony

      Freeson, Rt Hon Reginald

      Boothroyd, Miss Betty

      Garrett, W. E.

      Boyes, Roland

      George, Bruce

      Bray, Dr Jeremy

      Godman, Dr Norman

      Brown, Gordon (D'f'mline E)

      Golding, John

      Brown, Hugh D. (Provan)

      Gould, Bryan

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

      Hamilton, W. W. (Central Fife)

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

      Hancock, Mr. Michael

      Bruce, Malcolm

      Hardy, Peter

      Caborn, Richard

      Harrison, Rt Hon Walter

      Callaghan, Jim (Heyw'd & M)

      Hogg, N. (C'nauld & Kilsyth)

      Campbell, Ian

      Holland, Stuart (Vauxhall)

      Campbell-Savours, Dale

      Home Robertson, John

      Carlile, Alexander (Montg'y)

      Howell, Rt Hon D. (S'heath)

      Carter-Jones, Lewis

      Howells, Geraint

      Cartwright, John

      Hoyle, Douglas

      Clark, Dr David (S Shields)

      Hughes, Dr. Mark (Durham)

      Clay, Robert

      Hughes, Robert (Aberdeen N)

      Clwyd, Mrs Ann

      Hughes, Roy (Newport East)

      Cocks, Rt Hon M. (Bristol S.)

      Hughes, Simon (Southwark)

      Cohen, Harry

      Janner, Hon Greville

      Coleman, Donald

      John, Brynmor

      Concannon, Rt Hon J. D.

      Johnston, Russell

      Conlan, Bernard

      Jones, Barry (Alyn & Deeside)

      Cook, Frank (Stockton North)

      Kaufman, Rt Hon Gerald

      Cook, Robin F. (Livingston)

      Kennedy, Charles

      Corbett, Robin

      Kilroy-Silk, Robert

      Corbyn, Jeremy

      Kinnock, Rt Hon Neil

      Cowans, Harry

      Kirkwood, Archy

      Cox, Thomas (Tooting)

      Lamond, James

      Craigen, J. M.

      Leighton, Ronald

      Crowther, Stan

      Lewis, Ron (Carlisle)

      Cunliffe, Lawrence

      Lewis, Terence (Worsley)

      Cunningham, Dr John

      Litherland, Robert

      Dalyell, Tam

      Lloyd, Tony (Stretford)

      Davies, Ronald (Caerphilly)

      Lofthouse, Geoffrey

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

      Loyden, Edward

      Deakins, Eric

      McCartney, Hugh

      Dewar, Donald

      McDonald, Dr Oonagh

      Dixon, Donald

      McGuire, Michael

      Dobson, Frank

      McKay, Allen (Penistone)

      Dormand, Jack

      McKelvey, William

      Dubs, Alfred

      Maclennan, Robert

      Duffy, A. E. P.

      McNamara, Kevin

      Dunwoody, Hon Mrs G.

      McTaggart, Robert

      Eastham, Ken

      McWilliam, John

      1126

      Madden, Max

      Sheerman, Barry

      Marek, Dr John

      Sheldon, Rt Hon R.

      Marshall, David (Shettleston)

      Short, Ms Clare (Ladywood)

      Mason, Rt Hon Roy

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

      Maxton, John

      Silkin, Rt Hon J.

      Maynard, Miss Joan

      Skinner, Dennis

      Meadowcroft, Michael

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

      Millan, Rt Hon Bruce

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

      Miller, Dr M. S. (E Kilbride)

      Snape, Peter

      Morris, Rt Hon A. (W'shawe)

      Soley, Clive

      Morris, Rt Hon J. (Aberavon)

      Spearing, Nigel

      Nellist, David

      Stott, Roger

      Oakes, Rt Hon Gordon

      Strang, Gavin

      O'Brien, William

      Straw, Jack

      O'Neill, Martin

      Thomas, Dafydd (Merioneth)

      Park, George

      Thomas, Dr R. (Carmarthen)

      Parry, Robert

      Thompson, J. (Wansbeck)

      Patchett, Terry

      Thorne, Stan (Preston)

      Pavitt, Laurie

      Tinn, James

      Pendry, Tom

      Torney, Tom

      Penhaligon, David

      Wainwright, R.

      Pike, Peter

      Wallace, James

      Powell, Raymond (Ogmore)

      Wardell, Gareth (Gower)

      Prescott, John

      Wareing, Robert

      Radice, Giles

      Welsh, Michael

      Randall, Stuart

      White, James

      Redmond, M.

      Wigley, Dafydd

      Rees, Rt Hon M. (Leeds S)

      Williams, Rt Hon A.

      Roberts, Allan (Bootle)

      Winnick, David

      Roberts, Ernest (Hackney N)

      Young, David (Bolton SE)

      Robertson, George

      Rogers, Allan

      Tellers for the Ayes:

      Rooker, J. W.

      Mr. James Hamilton and

      Ross, Ernest (Dundee W)

      Mr. Sean Hughes.

      Ross, Stephen (Isle of Wight)

      NOES

      Aitken, Jonathan

      Gardiner, George (Reigate)

      Alison, Rt Hon Michael

      Gardner, Sir Edward (Fylde)

      Ashby, David

      Garel-Jones, Tristan

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

      Glyn, Dr Alan

      Batiste, Spencer

      Gorst, John

      Beggs, Roy

      Gow, Ian

      Bellingham, Henry

      Gower, Sir Raymond

      Bevan, David Gilroy

      Greenway, Harry

      Biffen, Rt Hon John

      Gregory, Conal

      Boscawen, Hon Robert

      Griffiths, Peter (Portsm'th N)

      Braine, Sir Bernard

      Grist, Ian

      Brandon-Bravo, Martin

      Grylls, Michael

      Brown, M. (Brigg & Cl'thpes)

      Gummer, John Selwyn

      Bruinvels, Peter

      Hamilton, Hon A. (Epsom)

      Budgen, Nick

      Hamilton, Neil (Tatton)

      Burt, Alistair

      Hampson, Dr Keith

      Butcher, John

      Hanley, Jeremy

      Carlisle, Kenneth (Lincoln)

      Hannam, John

      Carlisle, Rt Hon M. (W'ton S)

      Hargreaves, Kenneth

      Clark, Sir W. (Croydon S)

      Harris, David

      Conway, Derek

      Haselhurst, Alan

      Coombs, Simon

      Hawkins, C. (High Peak)

      Cope, John

      Hayward, Robert

      Crouch, David

      Heathcoat-Amory, David

      Currie, Mrs Edwina

      Heddle, John

      Dickens, Geoffrey

      Henderson, Barry

      Dorrell, Stephen

      Hickmet, Richard

      Douglas-Hamilton, Lord J.

      Higgins, Rt Hon Terence L

      du Cann, Rt Hon Edward

      Hill, James

      Farr, Sir John

      Hind, Kenneth

      Favell, Anthony

      Hogg, Hon Douglas (Gr'th'm)

      Fenner, Mrs Peggy

      Holland, Sir Philip (Gedling)

      Fletcher, Alexander

      Holt, Richard

      Fookes, Miss Janet

      Hooson, Tom

      Forman, Nigel

      Hordern, Peter

      Forsyth, Michael (Stirling)

      Howell, Rt Hon D. (G'ldford)

      Forth, Eric

      Hubbard-Miles, Peter

      Fox, Marcus

      Hunt, David (Wirral)

      Franks, Cecil

      Hunt, John (Ravensbourne)

      Freeman, Roger

      Hunter, Andrew

      Fry, Peter

      Hurd, Rt Hon Douglas

      Gale, Roger

      Irving, Charles

      Galley, Roy

      Jackson, Robert

      1127

      Jenkin, Rt Hon Patrick

      Raffan, Keith

      Jones, Gwilym (Cardiff N)

      Rathbone, Tim

      Jones, Robert (W Herts)

      Renton, Tim

      Jopling, Rt Hon Michael

      Rhodes James, Robert

      Kellett-Bowman, Mrs Elaine

      Rifkind, Malcolm

      Key, Robert

      Roberts, Wyn (Conwy)

      King, Roger (B'ham N'field)

      Robinson, Mark (N'port W)

      Knight, Gregory (Derby N)

      Rossi, Sir Hugh

      Lamont, Norman

      Rowe, Andrew

      Lang, Ian

      Ryder, Richard

      Latham, Michael

      Sackville, Hon Thomas

      Lawler, Geoffrey

      Sainsbury, Hon Timothy

      Lawrence, Ivan

      St. John-Stevas, Rt Hon N.

      Lee, John (Pendle)

      Sayeed, Jonathan

      Lennox-Boyd, Hon Mark

      Shaw, Giles (Pudsey)

      Lewis, Sir Kenneth (Stamf'd)

      Shaw, Sir Michael (Scarb')

      Lightbown, David

      Shelton, William (Streatham)

      Lloyd, Ian (Havant)

      Shepherd, Richard (Aldridge)

      Lloyd, Peter, (Fareham)

      Shersby, Michael

      Lord, Michael

      Silvester, Fred

      Luce, Richard

      Sims, Roger

      Lyell, Nicholas

      Skeet, T. H. H.

      McCrindle, Robert

      Smith, Tim (Beaconsfield)

      McCurley, Mrs Anna

      Soames, Hon Nicholas

      Macfarlane, Neil

      Speller, Tony

      MacGregor, John

      Spence, John

      MacKay, Andrew (Berkshire)

      Spencer, Derek

      MacKay, John (Argyll & Bute)

      Spicer, Jim (W Dorset)

      Maclean, David John

      Squire, Robin

      McQuarrie, Albert

      Steen, Anthony

      Madel, David

      Stern, Michael

      Major, John

      Stevens, Lewis (Nuneaton)

      Malone, Gerald

      Stewart, Allan (Eastwood)

      Maples, John

      Stewart, Andrew (Sherwood)

      Marland, Paul

      Stradling Thomas, J.

      Marlow, Antony

      Temple-Morris, Peter

      Marshall, Michael (Arundel)

      Thatcher, Rt Hon Mrs M.

      Mates, Michael

      Thomas, Rt Hon Peter

      Mather, Carol

      Thompson, Donald (Calder V)

      Maude, Hon Francis

      Thompson, Patrick (N'ich N)

      Mawhinney, Dr Brian

      Thorne, Neil (Ilford S)

      Maxwell-Hyslop, Robin

      Thurnham, Peter

      Mellor, David

      Townend, John (Bridlington)

      Merchant, Piers

      Trippier, David

      Miller, Hal (B'grove)

      Trotter, Neville

      Mills, Iain (Meriden)

      Twinn, Dr Ian

      Mills, Sir Peter (West Devon)

      van Straubenzee, Sir W.

      Miscampbell, Norman

      Vaughan, Sir Gerard

      Mitchell, David (NW Hants)

      Waddington, David

      Moate, Roger

      Waldegrave, Hon William

      Monro, Sir Hector

      Walden, George

      Montgomery, Fergus

      Walker, Bill (T'side N)

      Murphy, Christopher

      Waller, Gary

      Needham, Richard

      Ward, John

      Nelson, Anthony

      Wardle, C. (Bexhill)

      Newton, Tony

      Warren, Kenneth

      Nicholls, Patrick

      Watson, John

      Norris, Steven

      Watts, John

      Oppenheim, Phillip

      Wells, Bowen (Hertford)

      Oppenheim, Rt Hon Mrs S.

      Wheeler, John

      Osborn, Sir John

      Whitney, Raymond

      Page, Richard (Herts SW)

      Wilkinson, John

      Parris, Matthew

      Winterton, Mrs Ann

      Patten, John (Oxford)

      Winterton, Nicholas

      Pawsey, James

      Wolfson, Mark

      Peacock, Mrs Elizabeth

      Wood, Timothy

      Percival, Rt Hon Sir Ian

      Yeo, Tim

      Pollock, Alexander

      Young, Sir George (Acton)

      Porter, Barry

      Younger, Rt Hon George

      Powell, William (Corby)

      Powley, John

      Tellers for the Noes:

      Price, Sir David

      Mr. Michael Neubert and

      Proctor, K. Harvey

      Mr. Tony Durant.

      8.30 pm
      Dr. John Cunningham: I beg to move amendment No. 8, in page 1, line 9, after 'force', insert—
      1128
      'and after the Secretary of State has laid before Parliament proposals for an independent inquiry into the implications for the unit cost of local government services and local government spending in London and the metropolitan counties'.
      The Second Deputy Chairman of Ways and Means (Mr. Paul Dean): With this it will be convenient to discuss the following amendments: No. 9, in page 1, line 9, after 'force', insert—
      'and after the Secretary of State has laid before Parliament a detailed analysis of the implications for public expenditure in the three years following the abolition date'.
      No 30, in page 1, line 15, leave out '1st April 1986' and add:
      'such day as may be appointed by an Order by the Secretary of State.
      (3) No order shall be made by the Secretary of State under subsection (2) above until the Secretary of State has presented to parliament a report on—

      (a) the percentage of the expenditure of those councils in the financial year 1984–85 which would have been the expenditure of London boroughs of metropolitan districts had this Act been in force during that year;

      (b) the percentage of the expenditure of these councils in the financial year 1984–85 which would have been the expenditure of bodies other than London boroughs, metropolitan districts or ministers of the Crown had this Act been in force during that year; and

      (c) The percentage of the expenditure of those councils in the financial year 1984–85 which would have been the expenditure of Ministers of the Crown had this Act been in force during that year.'.

      No. 31, in page 1, line 15, leave out '1st April 1986' and add:
      'such day as may be appointed by an order by the Secretary of State.
      (3) No order shall be made by the Secretary of State under subsection (2) above until the Secretary of State has submitted an analysis of the savings he anticipates from the abolition of the Greater London Council and the metropolitan county councils to a Select Committee of the House of Commons.
      (4) The Select Committee referred to in subsection (3) above shall be empowered to commission such studies of the costs and savings likely to result from abolition of those councils as it sees fit.'.
      No. 39, in page 1, line 15, at end add:
      'provided that the Secretary of State has by that date laid before Parliament a report setting out the basis on which the provisions in subsections (3), (4) and (5) below shall be given effect.
      (3) For a period of three years from the abolition date no increased expenditure shall fall on the Consolidated Fund other than expenditure set out in the Financial Memorandum to this Act;
      (4) For a period of three years from the abolition date no borough or district shall receive greater or reduced financial support from the Exchequer or from other local authorities as a result of the provisions of this Act;
      (5) For a period of three years from the abolition date services provided before the abolition date by the Greater London Council and metropolitan county councils shall be continued by successor authorities at the same level and same unit cost as in the financial year 1984–85'.
      Dr. Cunningham: From the outset of the announcement of this policy, the Government and sucessive Ministers have made great claims about the savings which would result from the abolition of the GLC and the metropolitan county councils. Indeed, in the beginning the savings were said by Ministers to be of primary importance. That has changed somewhat, particularly since the appointment of the right hon. Member for Mole Valley (Mr. Baker), who in a short time has slightly changed the emphasis of Government policy.
      These amendments address themselves to this crucial issue. It has been our contention, and the position of the

      1129
      councils, from the outset that, far from large potential savings, at best there will be no savings to ratepayers or taxpayers as a result of these cobbled-together proposals. The likelihood is that there will be significant costs.
      It has not gone without notice that the Financial Times today carries a withering leading article about the Government's proposals, and argues that on none of the tests it applies does the Bill stand up to the questions posed. It is a devastating criticism of what the Government are proposing. That is not surprising, because on this issue perhaps above all others, the Government are in a terrible mess and have indulged in claims, counter-claims, contradictions and in some cases plucking figures out of the air in briefings to their own supporters for this and previous debates.
      The Government began by claiming that savings of £120 million per annum would result from the abolition of these seven Labour councils and that 9,000 jobs would go. There was no apology for getting rid of 9,000 people who are at present employed by these authorities. However, there has never been — and there still is not — any systematic or authoritative justification for that claim, which incidentally has in the latest briefing now slipped to £100 million per annum. In reality, it is likely to slip much further.
      The Government have simply never gone beyond assertions and generalities in attempts to justify their claims. Those attempts have never been taken seriously in the House by the majority of the Government's own supporters, let alone by my hon. Friends and myself. They have never been taken seriously by the GLC or the metropolitan county councils, nor by any of the independent bodies and organisations which have systematically examined them.
      The Government seem to have been relying on abolition to make savings related to policy. That in itself is an interesting question. It implies that the real reason for abolition is not that there was some unnecessary tier of government but simply that the present Administration did not like the policies pursued by the Labour-controlled authorities. There has been a considerable change since, following a Conservative victory in the GLC, the Prime Minister said:
      "This is our greatest prize."
      That was the Prime Minister's description of Conservative control of the GLC at that time.
      During Second Reading on 4 December, a former Conservative Prime Minister, the right hon. Member for Old Bexley and Sidcup (Mr. Heath)—I wish that the right hon. Gentleman was in his place now—said that the proposals were pushed into the Conservative manifesto a few days before it was published and after the election had been announced, and that that was done against the wishes of Conservative party policy committee, After the right hon. Gentleman made that speech, I wrote to the Prime Minister to ask her whether that statement was true. I received a reply from No. 10 Downing street early this evening. The letter is not very long, and if the Minister would like a copy I should be happy to provide one for him. In no sentence in her reply does the Prime Minister deny what her right hon. Friend said. In the final paragraph, she says:
      1130
      "You should be aware…that the commitment to abolish the GLC and the metropolitan Counties was the result of long and detailed preparatory work and members of the Cabinet were involved in that policy-making process."
      The Minister for Local Government is not a member of the Cabinet, much as he would like to be and much as some of us would like him to be too. If he were, it might be a more sensible body. However, if the proposals before us are the result of
      "long and detailed preparatory work",
      that simply shows what a confused and convoluted state of mind exists collectively in the policy thinking of the Conservative Cabinet. That will be no surprise to the 4 million people who are out of work and the many others who are suffering as a result of the Government's policies.
      Mr. Nigel Spearing: When I heard something about this matter, I asked the Prime Minister in a written question on what date she had become publicly committed to these proposals. The Prime Minister replied—I speak from memory, and will correct myself if I am wrong—that the date was 18 May 1983.
      Mr. Cunningham: I have seen the instructive reply to which my hon. Friend refers. There is no evidence that there was much preparatory research, consideration or discussion of what, by general consent—not only in the House but outside—is a shambles of a Bill.
      However, during the period between the publication of the White Paper and the publication of the Bill, other people with real interest in these matters, principally in the GLC and the metropolitan counties, have put their considerable expertise and experience—and that of other bodies such as Coopers and Lybrand—to work on these issues. Some serious analysis of the cost of the proposals has been done. As the Minister knows, the Government have never responded to those reports and documents. Coopers and Lybrand found, in brief, that with a high level of co-operation between district authorities and boroughs, a saving of £4 million to a cost of £9·5 million per annum could be expected. That is a minimal saving, and it assumes the best possible level of co-operation. Those eminent consultants thought it more likely that cooperation would be limited. In that case, they said, instead of any savings, abolition would involve a cost of between £36 million and £61 million per annum.
      8.45 pm
      With the publication of the Government's yellow document or statement a few months ago, Coopers and Lybrand were commissioned to produce an update of their estimates in the light of the Government's proposals. They concluded that an extra cost of up to £69 million would be incurred in the six metropolitan councils.
      With the publication of the right hon. Gentleman's statement on 29 November, Coopers and Lybrand again considered their findings. Given that no new evidence was contained in the right hon. Gentleman's statement, they stood by their estimates. There will be a real cost to the taxpayer and ratepayer from abolition. The officers of the GLC have estimated that there will be transitional costs of about £65 million in 1986–87 for redundancy payments, administrative costs, the setting up of the new joint boards and quangos, and other odds and ends in this mish-mash of a Bill. The figures do not include the substantial costs likely to result from less efficient delivery of services.
      Ministers should try to reconcile the independent consultants' estimates with the Government's arguments.

      1131
      They have made no attempt to do so. The reports and investigations have been brushed aside, dismissed, and in some cases derided, and no realistic attempt has been
      made to counteract the arguments. Such behaviour sits ill on a Secretary of State—I understand why the right hon. Gentleman is not in his place at the moment—who, at a Conservative party conference in 1983, said:
      "I am a Tory, and I have been brought up as a Tory, and I believe that the burden of proof is upon the man who advocates change, and if he does not satisfy that burden of proof, then change should not be made."
      The Opposition endorse those sentiments. In this case, on the question of costs and savings, there is no proof; what is worse, no serious attempt has been made by the Government to produce any proof.
      A number of questions arise about the proposal to establish residuary bodies. The proposals are a mess. It is plain that the Government do not have much idea what the residuary bodies are to do or how they are to do it. They are to take over certain responsibilities such as debts of the MCCs not specifically allocated elsewhere, superannuation functions and funds, and property of the MCCs not specifically passed to the district councils. Those are almost all long-term functions.
      The same is true for the GLC. The Secretary of State is giving himself power to pass debt management and superannuation functions to one district council in each area if all the districts ask him to do so. What are the chances of that being agreed in practice? We should like to hear the Minister's thoughts on and answer to that. What will happen if the districts do not agree? What will happen to costs and savings and the management of those functions?
      The residuary bodies are enjoined to secure that their work is completed within five years but, as their work is ill-defined and as such bodies have never before existed on this scale, is that realistic? If they are to be under pressure to dispose of assets and land holdings in that time, is there not a real danger that the value of those assets will not be realised to the public good? Is that not a hidden cost to the public?
      Residuary bodies are to be required to make proposals for their own demise. They are to wind themselves up. However, such proposals can include proposals for successor bodies or for keeping the residuary bodies in being in some other form. There is no estimate of the cost of any of that either. In addition to the well-known and much-rehearsed arguments about the costs of joint boards, the quangos and the seven new precepts or charges on the district rates, a bombshell was dropped recently when Mr. Maurice Stonefrost of the GLC reported that there were likely to be significant real costs because of the way in which the GLC has funded its operations from its capital fund and from the results of winding that fund up.
      I must draw attention to the fact that the fund was established when the GLC was under Conservative control. It has been used efficiently and effectively by successive administrations to fund projects. On 29 November 1984, the Minister for Local Government wrote to the chairman of the council concerning arrangements for its outstanding debts. He had set out his proposals in a written reply which appears in the Official Report for 16 November. He reported that account had been taken of representations received on the White Paper "Streamlining the Cities". It is clear from examination of his proposals that, like the rest of the burden of evidence which was
      1132
      submitted following the publication of that White Paper, little if any account has been taken of the main points made by the GLC in response to the White Paper. That is especially true of the implications of the GLC's capital fund.
      To service its debts and accounts, the authority has made repayments of £113 million a year. The charging of a market rate of interest enhances the value of the fund and ensures that all services are treated equally and bear the full economic cost of their consumption of capital. The fund has been built up from some £58 million in March 1978 to £820 million in March 1984. It is a significant fund. It is important to note that the GLC finances 26 per cent. of the total debt under its management. That was £3·18 billion in March 1984. That should be compared with the 2 per cent. which is financed from the London boroughs. All these statistics are provided by the Chartered Institute of Public Finance and Accountancy.
      More than 60 per cent. of net capital expenditure on the council's services is now financed from the fund. At the end of March this year, the fund's value—£820 million—represented 65 per cent. of the total debt of directly administered GLC services. That way of funding its activities brings major benefits to the council, such as a reduction in public borrowing, which is in line with Government policy and a strengthening of the council's borrowing position. The council has relatively low interest costs which average £15 million a year. That is lower than the London boroughs for the past five years. The fund also safeguards the credibility of the council's reputation, thus enabling it to contribute to present and future financing of London's capital programme.
      This is an important issue. The implications of writing the capital fund off will—no doubt this is one of the Government's subterfuges — probably result in short-term rates reductions through the cessation of repayments. However, in the longer term, writing the fund off is likely to lead to an increase in public sector borrowing. According to Mr. Stonefrost's argument, it could lead to an increase in the medium term of perhaps £750 million, given that the boroughs are likely to finance only a small percentage of capital expenditure from their capital funds. Writing off the fund is also likely to lead to an increase in rate costs in the longer term of about £20 million a year because of the relatively higher average interest rates borne by the boroughs as compared to the GLC and because rates of interest charged to market lenders to finance a constant volume of assets are greater than those required by a capital fund.
      It appears that the Government have taken none of that into account. I understand that the Minister or the Secretary of State—I am not sure which—has sent an urgent message asking for consultations about the implications of all this. That shows that, here again, there is a glaring hole in the Bill and in the Government's thinking and preparation for what they are proposing.
      To take all the evidence into account, the reality is that there will be no savings, except perhaps as an expedient in year one or year two. There may be a reduction in the rates, which the Government seek to engineer for their own political purposes. The reality is that, in the longer term, it will cost everyone much more. It will cost significantly more for less effective services, less democratic control and less accountability and for organisations which will be more remote and obscure to the people of London and the metropolitan county council

      1133
      areas. There is no case, argument or evidence for or substance in what the Government have said about savings through these proposals.
      It is also significant that the widespread calls from the Labour party, other political parties, the House of Lords, CIPFA and other bodies are for an independent investigation into the financial implications of the proposals. The Government have brushed them aside and ignored them. That confirms our belief that the Government have no evidence to substantiate their case.
      Even Government supporters, such as the Association of British Chambers of Commerce, say of the Government's existing claims:
      "These targets, however, seem unduly modest. If the whole exercise of abolition, which carries the considerable risk that non-co-operation between district councils might damage certain services, is to prove worthwhile in the long run, substantial savings for business ratepayers…must be obtained."
      The Association does not even think that the Government's present, false, transparent and unsubstantiated claims make abolition worth while, not to mention the reality of the real costs to those who will be affected.
      That sums it up. The Government have no friends, no arguments and no evidence. They deserve no support.
      9 pm
      Mr. Maples: I wish to spend some minutes addressing one aspect of the pubic expenditure and cost implications for local authorities. It relates to the way in which block grant and grant-related expenditures will be redistributed among them, and how the London boroughs in particular will have to pay for the services that they will have to take over from the GLC.
      In the White Paper the Government made the correct and acceptable statement that no authority should be unduly financially advantaged or disadvantaged by the change. They then published two consultation papers in the original round of consultation papers. One was about block grants and the other about the London rate equalisation scheme. It would not understate the case to say that both papers left various questions unanswered. The paper on the London rate equalisation scheme, which is clearly the more complicated, states:
      "It is not possible at this stage to produce a detailed model of the effects on individual London Boroughs of the disappearance of the GLC precept."
      It is disappointing that in the Yellow Book published in the summer the argument is taken no further. We seem to be left in a position where discussions are still continuing on a complicated and extremely important matter, especially for the London boroughs which are effectively subsidised by the GLC rate now.
      I shall ask my right hon. Friend to deal with two specific aspects. Regarding the block grant, will the GREs that are allocated to the boroughs in respect of the GLC expenditure that they take over be at the level of the GLC's present GREs, or will they be closer to what the GLC actually spends? If it is to be somewhere between those two points, how will it be calculated? If a borough takes over services which are similar to those which it provides now—for example, by taking on an extra park or leisure service—will its new GRE in respect of that be less than the sum of what it had before and what the GLC had? Will it always be a case of adding the two?
      1134
      For many London boroughs, especially my own, it is not the GRE that is important but the expenditure limit and the target. Therefore, most important, how will those two figures be set? How will the target be set, and how will the expenditure limit be set for rate-capped authorities? Will it be set in relation to the GLC's GREs in respect of the expenditure that is taken over, or in relation to what is actually spent? I expect that it will be set somewhere in between, and I shall be interested to know how that will happen. I hope that the boroughs will not be asked to adjust the GLC's expenditure to their GRE assessments immediately.
      As the difference between what the GLC will spend next year, even under its expenditure limit, and its grant-related expenditure assessment is over £2 million, this matter is important, and we shall wish to know how the Government envisage it being adjusted by the boroughs. I fear that the shortfall, if there is one, will impinge, as always seems to happen, more heavily on the poorer boroughs, of which mine is one.
      If the boroughs are to attract additional block grant in respect of GLC expenditure, which the GLC does not presently receive, from where will that additional block grant come? If the overall figure for block grant remains fixed, some of it must come from the existing grants to the London boroughs to pay for expenditure that they are taking over. By the mechanism of the block grant, the boroughs will probably be worse off.
      It is not enough to make up the GREs. We must know how the targets and expenditure limits will be set, and how the penalty system will operate. Even if a borough spent below its target, could it lose block grant if it failed to reduce expenditure to the level of the GLC's previous GRE? I am sorry that there are so many initials in my speech, but I did not invent them. The purpose of block grant is set out most clearly in the Government's consultation paper, which states that a central aim of the block grant system is to compensate authorities for differences in their expenditure needs and their rateable resources so that, in broad terms, local government in each area can provide similar services by charging their ratepayers the same rate poundage. It would be comforting to have an assurance that that will be the effect of the changes, that similar authorities will charge similar rate poundages, and that the re-allocation of the GLC's expenditure and targets will not result in their being prejudiced.
      Will my right hon. Friend develop the Government's thoughts on how the London rate equalisation scheme will be extended? One of my few worries about abolition is that the GLC carries out the redistribution of resources from the wealthier boroughs to the poorer ones. We know that three of the 32 London boroughs subsidise the others. The two boroughs that pay most — Westminster, including the City, and Camden—which contain only 6 per cent. of London's population, contribute 36 per cent. of the GLC's income. That is a subsidy to the other London boroughs of 30 per cent., or £240 million at present. In addition, those authorities contribute to the existing London rate equalisation scheme by about another £80 million a year. The total subsidy from those three boroughs to the other 29 is about £320 million. I do not know Lewisham's share of that, but if it lost only £10 million on a pro rata basis, that would mean another 30p on the rates. I am sure that the Government will ensure that that will not happen, but I wish to know a little more about the mechanism by which

      1135
      they will ensure that it does not happen. The consultation paper recognises the difficulties, but neither it nor the Yellow Book takes the argument much further.
      Will the London rate equalisation scheme be extended by equalising expenditure and subsidy on the GLC's present grant-related expenditure assessments, or on the GLC's present expenditure? Will the boroughs have to find the full £320 million, or will the sum be calculated on the basis of the GREs? If it is the latter, the boroughs will have considerable difficulty, because the expenditure that they take over will, of necessity, be higher than the GREs. It is considerably higher at present. It is impossible to envisage the boroughs reducing it to GRE level in the foreseeable future—it certainly could not happen within a year or two. Although some reductions could be made, if the rate equalisation is based on GREs, the other 29 boroughs will be seriously prejudiced.
      Mr. Tony Banks: The hon. Gentleman is making a characteristically thoughtful speech about local government finance. Does it not occur to him that the pertinent questions that he is directing to his Front Bench are the questions that should have been answered during the long consultation in the run-up to the proposals, about which we heard?
      Mr. Maples: I thought that that was what I was seeking to do. I said that I was disappointed that the Yellow Book did not come up with answers to these questions. I asked my right hon. Friend the Minister for Local Government to say where the Government think that they will find solutions to these problems. I would rather hear my right hon. Friend's reply before saying whether I agree with the hon. Gentleman.
      On the London rate equalisation scheme, will the subsidy be extended on the basis of the GREs or on the basis of the GLC's expenditure? If it is somewhere between the two, how will that be done so that the boroughs are not prejudiced? What mechanism will be used for doing this? Are we to have a negative block grant, which would have serious implications for the principles behind the rating system, or is it to be done on some other basis? If so, is that other basis to be statutory so that we know that it will go on in the future? Of paramount importance, do Westminster and Camden agree to whatever arrangements the Government have in mind? Under the present system of levying rate by the GLC, this is not open to debate, but it might be if we were simply asking them to write the cheque for a pool or to accept a negative block grant system.
      If I understand it correctly—I may be wrong because every time I think that I know something about local government finance I find that I know far less than I thought — the London rate equalisation pool at the moment is distributed to the other boroughs on the basis of their total rateable values. That is a strange way to do it because, by distributing the pooled subsidy on the basis of a borough's total rateable value, it is likely that the wealthier boroughs will do rather better than the poorer ones. Would it not be more appropriate for whatever goes into the London rate equalisation pool in the future to be distributed like the block grant, with the intention of equalising, as far as can be, the rates that have to be charged in different boroughs for the same services, and not simply on the basis of a borough's total rateable value?
      These are matters of general importance. They are the remaining points about which I have concern if the GLC
      1136
      is abolished. I think that the figures for my borough are that the GLC spends about £25 million a year and raises about £10 million in rates. Effectively, we are subsidised to the tune of £15 million. I would be concerned if I felt that any of that £15 million had to come out of the already heavily picked pockets of the ratepayers of Lewisham. I would welcome my right hon. Friend's assurances about that and his reasons as to why that will not be so.
      Mr. Chris Smith: I rise to support the amendment. I do so because I do not think that the Government have told us the whole truth, or even very much of it. about the costs of the abolition proposals. That is especially true of the Greater London council. I shall pass briefly over the obvious costs of the operation of the abolition—the new offices, the new boards, the servicing of the network of enterprises that will be set up, the cost of any redundancy payments if the Government go ahead with their proposals for the sacking of staff and so on. Anyone with any common sense will know that the proposed operation of abolition, with more diverse operations being brought in in place of a centralised organisation and existing functions being carried out by those diverse entities, will cost more rather than less.
      Having looked briefly at that, one has to look at what lies behind the Government's claims of potential savings. My hon. Friend the Member for Copeland (Dr. Cunningham) touched on the reality when he spoke about the Government seeking policy rather than administrative savings. It is surely true that if the Government are to achieve the savings that they have so far spoken about both inside and outside the House, they will have to do so by means of policy changes and by the removal or diminution of functions presently carried out by the GLC.
      9.15 pm
      I shall briefly consider two areas of policy. I want first to ask the Government what they have in mind as to how funds will be devoted in those areas, and as to the costing of the future operations of the various boards, quangos, enterprises and boroughs that are to take over the GLC's functions. If the boroughs take over the housing functions that the GLC now has, what will the provision be for the repair and maintenance of the transferred GLC stock? At present provision flows through the housing investment programme allocations made to the GLC and thence to the boroughs. What also will he the fate of the projects in support of the single homeless that are presently carried out by the GLC?
      There are brief references in the yellow document, although there have been none in ministerial speeches or in the Bill, as to what will happen to the houses in Thamesmead and Tower Hamlets. What will be the exact fate of the seaside and country homes to which the GLC now has right of access? The yellow document promises us a guarantee in the legislation of continued allocations for Londoners, yet the Bill has only an extremely vague and broadly worded clause that does not offer the guarantee being sought.
      What will happen to the fund of housing association schemes, including those in the pipeline and those that might have been expected to be built with GLC funding? Above all, what will happen to any mobility schemes for those wishing to transfer across London from one property to another? At present all of those functions are carried out by the GLC. They cost money, and if the Government have their way and seek to produce the savings that they

      1137
      say that they can make through these proposals, some at least of those functions will have to go, and the Government should tell us which. Alternatively, to which of those functions will they dovote less money than is at present devoted?
      The funding of voluntary organisations is a matter of great concern to Londoners. It is estimated that the GLC will spend about £53 millon this year on the support of voluntary organisations. What are the Government's intentions? A later clause talks about provision for boroughs jointly to fund individual organisations and projects. It specifies a limit that the Secretary of State can set. So far we have been told that it is likely to be £10 million, so what will happen to the remaining £43 million? The Government speak about making large savings as a result of the GLC's abolition, but if they are to make them by reducing the funding of those organisations, as we can only suspect from the details that have so far been given, they should come clean and tell the people of London what they will stop funding and what they will continue to fund. We can then have a sensible and reasonable debate on these issues.
      I have cited only two specific policy areas. I could go through a whole list of functions carried out by the GLC, and ask the Government exactly which of them will go and which will be carried on. But over and above that, there is the overall question raised by the hon. Member for Lewisham, West (Mr. Maples) — which is especially important for the poorer areas of London—and relates to the GLC as a redistributive mechanism in taking money from the richer parts and peoples of London and putting it into the areas of greatest need. Who or what will perform that function when the GLC is abolished? What arrangement do the Government have in mind to ensure that that happens?
      The Government must either accept the amendment, which would ensure some independent analysis of costs, or they must be far more honest about the amount of money that they expect to save and from where it will come. If it is to come from services and functions carried out by the GLC, which are likely to disappear with abolition, they must tell the people that so that they can make up their minds about the Government's plans.
      We are asking for some honesty from the Government. I know that it is a rare commodity these days, but we have the right to expect it.
      Mr. Robert Litherland: The amendments and the preceding debates have been about abolition—will it be simpler or cheaper and has there been any in-depth inquiry into the costing? The response from the GLC and the metropolitan counties makes it clear that the impression given by the Secretary of State that their observations about the proposals and the costings had been carefully considered was not true. The Government have ignored arguments in favour of the retention of county councils. They have rejected the argument about the effect on services. They have rejected the argument about the future of transport, consumer services, economic development, art, culture, leisure and emergency services — especially the fire brigade, the police, planning, conservation and waste disposal.
      Does the Secretary of State seriously believe that the public will accept the claim that an in-depth study has
      1138
      taken place into the financial implications and effects of the abolition measure? The Government have been dismissive of the majority of the replies that they have received. The whole exercise is one of deceiving the public — an attempt to persuade the public that the Government are going through a democratic process before any decision is made. Yet the decision has already been made—the die has been cast.
      This is an ill-conceived piece of legislation that will be forced through despite the protestations of the GLC, the metropolitan counties and the voluntary organisations.
      Although the latest proposals differ from the original, the Government have given no further scope for consultation. They stand accused of making major changes without meaningful discussion and without realising the consequences of their actions. Is it any wonder that such proposals give the impression that this legislation is nothing more than a politically motivated act to take control of and undermine local democracy—which, in turn, means the loss of accountability? That danger has already been recognised by the amended proposals to allow ILEA to become a directly elected authority.
      The Secretary of State for Education and Science claimed that the nature and scale of the importance of the education service in inner London, taken together, justify a directly elected authority in this special case. If that is a special case, what about the Greater Manchester council and the met counties which are responsible for police, the fire service and public transport? The joint boards will not have the same accountability as these bodies. They will be indirectly elected and will not be answerable to the electorate. Why should the Secretary of State make a concession with ILEA, yet have a blinkered approach to the overtures of the met counties? That is gross inconsistency, and that fact is recognised.
      The observations put to the Secretary of State about the fact that he will be empowered to control for the first three years the expenditure and manpower of those boards and the fact that they will be administered by nominated representatives can only lead to the conclusion that this legislation is a further attack on the responsibility of local government, especially in vital respects such as police accountability. The police authority in Greater Manchester spends about £10 million above the sum the Government say should be spent. About £4 million above the Government's figure is spent on fire services. The multifunction GMC has the necessary flexibility to determine its priorities in the light of local needs.
      What real consultation has there been about the cost of police and fire services? The GLC and the met counties cannot accept the statement by the Secretary of State that the proposals will lead to a transfer of power to the London boroughs and the metropolitan district councils. Those councils would claim that the suggestion by the Secretary of State—that functions will devolve either individually or jointly to local democratically elected councils, thereby decentralising powers at the local level—is totally false and misleading. The major and vital functions, such as police, fire and public transport services, and minor functions, such as the registration of animal trainers, will be allocated at the district level. Fewer than 20 per cent. of the services will devolve to district councils, where full acountability will be preserved.
      The Government's arguments about the spread of local democracy are extremely bogus. Bodies will be able to precept the district councils and will at the same time be

      1139
      acountable only to the Secretary of State. The Government have not shown where savings will be made. The Government do not know what the financial outcome will be. The GLC and the met counties are urging the Government to publish as a matter of urgency their detailed estimate of the minimal savings that will be made, with information of how those savings will be achieved by successor authorities.
      For all their arguments, the GLC and met counties know that the abolition die is cast. The Government have closed their ears to any intelligent argument. As the Times editorial on 1 August said:
      "Ministers will seem to believe that in this matter assertion can substitute for argument."
      Does the Secretary of State truly believe that the GLC and met counties take him at his word when he says that the abolition issue has not been settled yet? The Government believe that they have a mandate to abolish those county authorities and, at the same time, to rid themselves of political opposition. The name of the game is to rid themselves of Ken Livingstone and the GLC. That is why the Government are willing to take these draconian steps which put democracy at risk.
      The Government have completely ignored local government. Mr. G. A. Harrison, the chief executive of the Greater Manchester council, said:
      "The Bill is very similar to the White Paper 'Streamlining the Cities' and, quite clearly, the Government have ignored the mass of comment received when only 9 per cent. of respondents supported the proposals. If the Government is serious about wanting to make local government cheaper, simpler and more local, the Bill must be regarded as a failure in that all the information available confirms that none of these will be achieved. What is more likely to happen is that the proposed successor bodies will be blamed for not making the system work. An independent inquiry must be held if yet another costly reorganisation of local government in the metropolitan areas is to be avoided in the very near future."
      The question has not been answered. Will those arrangements lead to simpler, cheaper and more accountable local government? The Opposition know the answer; I do not believe that the Government have considered it.
      9.30 pm
      Mr. Derek Fatchett: If one were looking for an object lesson in how not to go about
      reforming local government, I suspect that what we have seen over the past 18 months would be a good example.
      First, we have had no Royal Commission to discuss the functions, role and structure of local government. Secondly, we have introduced proposals that apply to a percentage of the country only, under the bogus argument that we are abolishing two-tier local government whereas, in relation to the shire counties, we are maintaining two-tier local government, and the Government seem pleased to be doing so. Thirdly — this is the point of the amendments—we are making major structural changes in local government without any understanding of the costs involved.
      The hon. Member for Lewisham, West (Mr. Maples) made a thoughtful contribution. I congratulate him on being the only one, I suspect, to understand the language of local government finance. He may be seated in the wrong position, in view of the contribution that he can make. He pointed out some of the many difficulties
      1140
      involved in financing the new structure. Those questions should have been answered by the Government or by an independent inquiry before we reached legislation.
      If one studies the history of these proposals, one sees that the Government have tried throughout to obscure the issue of costs. During last year and the early part of this year, we considered the Local Government (Interim Provisions) Act 1984 which took the right to rote from people in the GLC and metropolitan county areas. En the run-up to that Act, the Government talked glibly about the possibility of savings from the metropolitan counties being about £120 million. In all, 12 parliamentary questions asked the Government to detail and substantiate that figure. At no time did the Government say how that figure was arrived at. We went into a legislative procedure whereby we took away people's right to vote on a blank cheque and blank prospectus. People lost the democratic right to vote on their services without understanding the costs involved in the proposed changes.
      I should have thought that any responsible, decent Government, before taking away people's right to vote, would have told them what the costs or savings 'were. Some of my hon. Friends would rightly point out that no financial saving is as great as losing the right to vote and exercise a democratic choice. We went through the first part of the year losing the right to vote without the Government substantiating that figure of £120 million.
      We have now come to the latter part of the year and to the Local Government Bill. The Government are now saying that there will be savings of £100 million, half of which will apply to the metropolitan counties. During the past 12 months, the savings in relation to the metropolitan counties have been halved. The Secretary of State may well leave the Department of the Environment in the same way as he left the Department of Industry. If this process goes on much longer, we will have a Government who will say, "We shall make a loss on the proposals rather than a saving." With the present rate of inflation, in terms of the potential costs, and deflation in terms of the potential savings of devolution, if the Government are managing the country's money in the same way, we have a great deal to worry about. I suspect that all the evidence is that they are managing the Government's money in exactly the same sort of way. The figure has changed during the year but yet again we have a figure that the Government are not prepared to spell out in detail or put to any independent inquiry.
      I am not saying that the Coopers and Lybrand report or the PA Management report—both of which cast doubts on the Government figures — are correct to the last penny but, as my hon. Friend the Member for Copeland (Dr. Cunningham) said, it is up to the Government to substantiate and support change. One would have thought that the Government would produce the figures rather than spend time sniping at the Coopers and Lybrand report and the PA Management report. The Government have significantly failed to do what they should have done.
      We are now legislating without any indication whatever of the costs. I take the simple view that if a large organisation, enjoying certain economies of scale, is abolished, there is a cost to the ratepayer. In other capacities the Minister has often talked of the advantages of economies of scale, but in terms of local government some of those advantages seem to have disappeared.
      Waste disposal in west Yorkshire is very eficient. It is now to be moved from a county level, where there are

      1141
      considerable economies of scale, to five individual districts. In regard to land, labour, computer services, secretarial and legal services, additional costs must be involved.
      I believe that the Government can deliver cost savings. Conservative Members should recognise how those savings can be delivered. They are not intrinsic to the Government's proposals and do not flow from them. They can be delivered only by taking away our right to vote, so that those of us in the GLC area and in the metropolitan counties do not have the right to make a choice, and by rate-capping the new joint boards and committees, so that Whitehall sets the level of service, of expenditure and of jobs.
      The Minister can get his savings, but he will not get them honestly. He will get them by imposing on all of us who live in the metropolitan areas a loss of services and of jobs. The measure is not about saving money by the reform of local government; it is not about creating a better local government structure. It is a further attempt to reduce services and jobs and to ensure that those in local communities who depend on local government will have less to look forward to in the future.
      Mr. Cartwright: I support the group of amendments because I believe they are crucial to our discussion of the Bill.
      The Government's claim that cost savings will result from abolition is a central factor in the argument for the Bill. The Government have regularly argued that streamlining cities, and removing a bureaucratic tier of government which is no longer needed, will produce substantial savings for the ratepayer. But, as other hon. Members have said during the debate, it has been impossible to get any clear and convincing evidence to support that claim.
      The hon. Member for Copeland (Dr. Cunningham) rightly drew attention to the very different assessments made about the transitional costs by GLC officers and by the explanatory and financial memorandum to the Bill. Both accept that there will be transitional costs, but there is a wide variation between the two calculations. Ministers will no doubt argue that the GLC officers are interested parties in making their calculations and producing their figures, but it is just as easy to say that the Department of the Environment is an interested party and that its figures might be open to some challenge and doubt.
      The situation gets even more complex in regard to the metropolitan counties, where we have celebrated firms of accountants reaching very different conclusions. The Coopers and Lybrand report was referred to earlier. It states clearly that savings will not result from abolition. Its study concluded:
      "the proposed structural changes cannot be expected to lead to savings in themselves … Savings, therefore, can only be sought as a result of policy changes about the levels of services, and hence expenditure in an area."
      That was the judgment of Coopers and Lybrand. Price Waterhouse, an equally celebrated firm of accountants, was retained by another group of interested parties—a consortium of district councils. It came to a different conclusion. Having looked at three of the metropolitan counties, it said in its study:
      "in the area of rationalisation alone, excluding any policy or efficiency changes, a saving in staff costs of around £20 million can be made."
      1142
      Therefore, those are two very different judgments by two firms of accountants of national repute. Surely it is difficult for hon. Members to reach a balanced judgment when there is such conflicting evidence. That alone is enough to make a case for an independent and impartial judgment.
      What do our constituents make of all this? I think that my experience will be like that of many right hon. and hon. Members on both sides of the Committee. My constituents make a simple judgment that every time we reorganise local government, it costs them money. I was reminded of that when I read the editorial in this evening's edition of The Standard. It had some unkind things to say about the Secretary of State, for example that he "has a credibility problem." The editorial goes on to say:
      "As a gift bringer to ratepayers, he is about as believable as Santa Claus, and a lot less jolly."
      That seems unkind, but The Standard goes on to advance some criticisms about the claims made by the Secretary of State yesterday about the impact of rate capping and the great benefits that it is held to bring to ratepayers. The judgment of The Standard is:
      "The trouble is, most people just don't believe it. We certainly don't … Much the same goes for the plans to sweep away the GLC. Most people just don't believe they will save money or improve matters."
      Faced with such a judgment from a newspaper such as The Standard, I suggest that the Secretary of State would be well advised to take on board the idea of an independent inquiry into the financial implications of the Bill. Whether he does or not, I shall advocate that course by voting for the amendment.
      Mr. Eric Deakins: I agree with the sentiments expressed by hon. Members who have spoken so far in the debate. I share the concern of the hon. Member for Lewisham, West (Mr. Maples), who has forebodings about the effect on local authorities in the London area of the abolition of the GLC. There will be financial consequences, particularly on poorer authorities such as my own in Waltham Forest.
      In my time in the House I have never seen a Bill so shoddily presented in terms of its financial consequences. The explanatory and financial memorandum is vague in the extreme. In the Secretary of State's speech on Second Reading there was little of substance on that important point, yet the savings to be made were one of the major arguments put before the people of London — to the extent that any arguments were put before them—in the general election and subsequently. If one judges by the Secretary of State's speech on Second Reading, the main area of savings that the Government estimate will be made will come in the area of local authorities taking over services. That means either that the functions transferred to local authorities in London and the metropolitan counties will not be adequately funded or that money will be handed over and pressure will be put on them through the block grant, penalties, and so on to reduce their expenditure.
      What is being proposed will put pressure on local authorities' existing resources when the GLC's and other functions are transferred. It will mean a crowding out, a pressure on existing local authority services. Local authorities in London will be in a real dilemma. Those which accept their responsibilities to the ratepayers and electors in their areas for maintaining services as far as possible within the rate-capping legislation, will have to

      1143
      put up their rates to cope with the consequences of transferred functions, particularly if they are not adequately financed, which is probably the Government"s intention.
      9.45 pm
      The extra costs that will be incurred by local authorities have not received much attention. The Bill will mean that in both the Greater London area and the metropolitan counties an increased burden will be placed upon local authorities and their councillors. The extra work that is to be transferred has to be carried out not merely by public servants employed by local authorities but by democratically elected local councillors. I challenge the Minister to deny that there will be more local authority committees and quangos, which will have to be attended by local authority councillors. This will impose a heavier burden upon councillors. They will be unable to carry out their job as well as they carry it out now because of the extra functions, which they do not want, which will be thrust upon them. This will have an impact upon the services that they can offer to their electors.
      In addition, there will be extra expense. Councillors obtain allowances for attending meetings. There will be many more committee meetings. There will also be many more outside committee meetings, which councillors will have to attend. I do not know whether the Government have taken that point into account. The Government claim that there will be financial savings. I invite the Secretary of State to undertake to conduct an inquiry within a year after abolition into the savings made so that after the Bill is passed we are able to judge whether savings have been made.
      In the case of hospital closures, one of the main arguments for closures put forward by district health authorities is that financial savings will be made. My own experience is that if one tries to find out whether financial savings have been made after a hospital has been closed it is impossible, because of the accounting arrangements, to do so. If we do not pin down the Secretary of State we shall find that he will make assertions and claims that can never be contested after the event because figures will never be available.
      Mr. Tony Banks: By any objective standards, the Government's failure to make out their financial case is manifest. It is interesting to note that only one hon. Member on the Conservative Benches stood up to state his position. A number of very important and leading questions have been asked. I look forward to the summing up by the Secretary of State as, I am sure, will the hon. Member for Lewisham, West (Mr. Maples) who could refer to an internal Department of the Environment document, reference LGFIDG, which indicated that the Government were concerned about the fact that the passing of the GLC functions to the boroughs would result in rates being raised. If GLC expenditure at 1983–84 levels were maintained, an 8·2 per cent. rate increase would be required in Lewisham.
      The Department of the Environment document states that some form of safety net should be written into the calculations. There are three ways in which this could be done. I ask the Secretary of State to say whether these ways are being considered by him and his Department in order to engineer rate reductions in the boroughs, following abolition. This could be by means of an enhancement of the take from the rate revenues of the three
      1144
      boroughs which provide the vast bulk of the GLC's finance: Camden, Westminster and the City and to enhance the take from rate revenue by the London equalisation scheme. The second way would be substantially to increase GREAs and targets within the individual boroughs so that they could obtain the whole of the GLC's disaggregated GREA and target and thereby be eligible for a greater block grant. The third option would be so to engineer the GREAs and targets for the boroughs in 1986–87 as to ensure that major reductions in costs are achieved.
      These are the ways I assume the Government will operate if they are to produce savings but, as has been said by Labour Members, that could be achieved only by a substantial increase in unemployment through cuts in services and large numbers of redundancies.
      We are in great difficulty, because we do not know precisely what the Government's financial case is or the background to their calculations. In their 1983 manifesto, the Government justified abolition by saying that the GLC and the metropolitan counties were wasteful and unnecessary. The estimates of savings have gradually diminished almost to the point of disappearing—from £120 million down to transitional costs.
      We need to know the figures and we need to have them judged objectively. It is for the Government to make their case. If the Government would accept an independent and impartial audit of their financial claims and the counterclaims made by the GLC and the metropolitan county councils, the public would be able to judge for themselves who is speaking the truth.
      I give the Minister the undertaking that I gave on Second Reading, and I should like him to respond to it. I have full authority to say that, if the Government will commission an independent audit into their claims on savings and the services that will be devolved to the boroughs, the GLC will co-operate with him and the inquiry and will provide all necessary facts and figures to the independent auditors so that at last the electorate can see who is speaking the truth—the Government or the local authorities.
      The Minister for Local Government (Mr. Kenneth Baker): The debate has ranged more widely than the amendments. I shall seek to answer some of the broader points that have been made as well as those related to the amendments.
      The hon. Member for Copeland (Dr. Cunningham) referred to an article in the Financial Times by Mr. Robin Pauley, who wrote about the capital debt. As we announced in our White Paper "Streamlining the Cities", we proposed to write off the debt to internal capital funds. However, that is not real debt; it is simply a method of internal financing by which the ratepayers have paid over time for the GLC's capital spending programme. Writing it off does not lead automatically to an enormous increase in public sector borrowing.
      It will be for the successor authorities to decide, within the capital control system established by the Government, how far they need to replicate the GLC's capital programme and whether to finance that spending through internal sources, including capital funds, or from external borrowing.
      Attempting to make this rather old story a little more interesting, Mr. Pauley speculated about the Treasury beginning to worry and Department of the Environment

      1145
      officials asking the director general of the GLC for urgent advice. As usual, the truth is a little less exciting. I am at one with my Treasury colleagues and I have followed the usual path of consulting the local authority associations and the GLC about our debt proposals before reaching final decisions. They have been invited to comment by the end of January.
      My hon. Friend the Member for Lewisham, West (Mr. Maples) made a well-informed speech about GREAs and targets. Those will be debated in detail and, no doubt, at length on clauses 64 to 78, but I draw my hon. Friend's attention to a letter that I placed in the Library yesterday. It was written by an under-secretary in my Department to the chief executives of the London boroughs. It is a detailed letter, but the passage on targets also answers the point made by the hon. Member for Newham, North-West (Mr. Banks):
      "Ministers have made it clear … that if targets are set, they will not be looking for a higher level of savings on those services transferred to the boroughs than would have been sought from the GLC. What we envisage is that the target which the GLC would have been given would be split between the successor bodies along with the expenditure concerned."
      On GREAs amd block grant it is also rather detailed. It reads:
      "As stated above, our aim will be to ensure that the post-abolition arrangements as a whole maintain the existing balance between ratepayers in different parts of London, and between ratepayers in London and those elsewhere."
      The actual details will, of course, have to be worked out in the spring of next year on the grants working group. Our proposals would lead to a report being placed before the consultative council on local government finance in July.
      On rate equalisation, the letter states:
      "At present we believe that this is likely to require the continuation of London rate equalisation arrangements in order to avoid a windfall gain to ratepayers in the high resource authorities in central London at the expense of those elsewhere. Nevertheless, the new arrangements will be designed to ensure that all London ratepayers stand to benefit if expenditure on former GLC services is reduced after abolition. In particular, Ministers have made it clear that, provided savings are achieved, London authorities can expect to benefit from the grant which the GLC has forfeited as a result of its exceptionally high rate of spending in recent years."
      Mr. Maples: I had hoped that my right hon. Friend would go further into that as it is important to many of us to know exactly how it will operate, whether it will be a statutory obligation, what Westminister and Camden think and whether they are willing, as well as the level and whether it will be related to the GLC's GREAs or its spending. I hope that we may have that information at an early stage.
      Mr. Baker: I understand my hon. Friend's concern. As he would expect, I have a working group on this. We certainly see the continuation of rate equalisation as an important part of the financial arrangements. It is a statutory scheme at the moment.
      The hon. Member for Islington, South and Finsbury (Mr. Smith) spoke of problems that could arise from policy changes not taken into account in the explanatory and financial memorandum. He raised a mass of questions about housing and voluntary organisations. I believe that voluntary organisations are best dealt with when we reach clause 46, although the subject will come up on several other clauses, as will the subject of housing. The GLC's
      1146
      HIP allocation comes out of London's allocation and would go direct to the boroughs. The mobility scheme will continue as a statutory scheme.
      On the more general issues actually relevant to the amendments, the hon. Member for Manchester. Central (Mr. Litherland) raised broad questions of accountability. I do not criticise that as, all Committee debates on the Floor of the House range fairly widely. It has been suggested that joint boards will not be truly accountable and that they will not be as representative as the present arrangements for fire and police committees. I wish to draw attention to certain anomalies in the present system. I am told that on the Greater Manchester police authority there are no county councillors from either Bury or Rochdale, which have a combined population of 380,000, whereas in the future both will be represented.
      Mr. Tony Lloyd: As a constituent I can approach my county councillor who has access directly to those on the police committee and is also a member of the parent body, the county council, the police committee being a committee of that council. With joint boards that access will no longer exist.
      Mr. Baker: The hon. Gentleman supports my point. At the moment the county councillors representing the areas covered by those metropolitan districts do not serve on the police authority. The fire service is different because that is a committee of the authority. I think that it is fair to say that there will be direct representation in the future. Solihull, with a population of 200,000, is also not directly represented on the west midlands police authority.
      The hon. Member for Manchester, Central asked about the distribution of money among successor bodies. In the metropolitan counties, only a fractional part—less than 1 per cent. of current spending — will become the responsibility of bodies outside local government. For example, the Arts Council is taking on certain responsibilities in the metropolitan counties, but it is a fraction.
      Much has been made of the proportion of expenditure that will become the responsibility of the joint authorities, but I remind the Committee—
      It being Ten o'clock, THE CHAIRMAN left the Chair to report Progress and ask leave to sit again.
      Committee report Progress.
      Ordered,
      That, at this day's sitting, the Local Government Bill may be proceeded with, though opposed, until any hour. — [Mr. Archie Hamilton.]
      Again considered in Committee.
      Question again proposed, That the amendment be made.
      Mr. Baker: I was referring to the split between the responsibility for expenditure now and in the future. In London the situation is clear. The GLC proper has current spending of about £530 million this year. That is not in dispute. That excludes ILEA and the payments to LRT. That is a reasonable measure of the level of service activity. A small amount of that—about 5 per cent.—will go to bodies outside local government, for example, the Sports Council and the Arts Council. The boroughs jointly or individually will be responsible for the rest—about one quarter for the fire service and three quarters for the other activities taken over by the boroughs.
      Mr. Tony Banks: We are back where we started, and there are arguments on both sides about the figures. The figures provided to me for 1984–85 expenditure show a GLC net expenditure of £950 million. Is the Minister leaving out of his calculations debt servicing, housing deficits and waste disposal? If he is, he should not. If he is not, the figures just do not tally.
      Mr. Baker: I would be happy to answer a question and to set out how the figures reconcile. The £530 million to which I have referred covers waste disposal and housing deficit. It does not cover debt interest, which is additional.
      That brings me to my next point about residuary bodies. Those bodies will really be trafficking the money provided by the lower-tier boroughs. They will provide that money to service the debt and the pension obligations, but it will be the obligation of the boroughs to do that as this is borough money. Indeed, half the GLC capital debt today is already the responsibility of the London boroughs, although it is paid through the GLC because the housing has been transferred. For that function the residuary body will, as it were, stand in the place of the GLC.
      Various points were made about the Coopers and Lybrand report. It is certainly a professional job. However, just the other day I read a cutting from the Liverpool Daily Post and noticed that the hon. Member for Liverpool, Walton (Mr. Heffer), when asked about costs and savings in this report, said with his rather earthy wisdom:
      "My experience of management consultants is that in the main they do the job they are employed to do. They come up with the answers that are required by their 'masters'. It in no way surprises me."
      On our estimates for savings, we have made it clear from the outset that a detailed assessment of the savings that will result from abolition will depend on the various separate decisions made by all the authorities involved. At this stage, therefore, one can only make broad statements, and that is what we have done. We have stated our views in the financial and explanatory memorandum, and I gave the background to those estimates in my answer to my hon. Friend the Member for Surbiton (Mr. Tracey).
      We identified three areas where savings will be made. I am not talking about policy savings, as the hon. Member for Islington, South, and Finsbury suggested, but savings resulting from the abolition. Savings will be made in central administration, in connection with highways, and in planning. The county councils will cease to be planning authorities.
      I shall reiterate the key points in our estimate. First, I find it hard to believe—and I am sure that other hon. Members share my view — that the elimination of a whole tier of government will not bring savings. The hon. Member for Walthamstow (Mr. Deakins) said that there would be more committees. At present, the GLC has 60 committees, sub-committees and panels to administer its affairs. When the Tories were in command, they needed only about 30.
      An Hon. Member: How many Cabinet Committees are there?
      Mr. Baker: When a Minister is asked how many Cabinet Committees there are, even if he knows the answer—which I do not—he is not allowed to give it.
      The existence of large bureaucracies in the authorities brings with it inevitable overheads. Those overheads will go.
      1148
      Secondly, in the case of some services, the existence of two tiers with related jobs means overlap and duplication. Even the MCC consultants agree that savings might be found in central administration and central services. I certainly agree with them on that point.
      The expenditure of the councils under consideration is some £432 million a year above their targets and some £600 million a year above their grant-related expenditure assessments. To say that there will be no savings from better adminstration and from an examination by the boroughs and districts of—
      Mr. Tony Banks: It is done by manipulating the GREAs.
      Mr. Baker: No. As I have said, the savings are not policy savings. They are made in the areas of administration, highways and planning—in the internal organisation.
      The hon. Member for Copeland has said that some people consider the savings to be modest. As the hon. Member for Woolwich (Mr Cartwright) rightly said, there have been other reports. It would be fair for me to draw the attention of the Committee to the Price Waterhouse report.
      Mr. Fatchett: It would be useful if the Minister could tell us how much of the overspend is derived from additional administration, and how much from the provision of services. If it is derived from services it is true that there is a policy objection to the metropolitan counties; if from administration, we are talking about the structure of government. Which is it, or what is the balance between the two factors?
      Mr. Baker: I will answer that question as soon as I have dealt with the Price Waterhouse report. That report considered some of the metropolitan counties and districts and estimated that there would be a manpower saving of some 3,500. That is close to our own estimates.
      There was also a joint report by the chief executives and borough treasurers of Bury, Rochdale, Stockport and Trafford. They suggested a saving of £11·5 million in the Greater Manchester council alone. Such figures point to levels similar to those that we have estimated in the Bill.
      There has also been a report by four London boroughs —Bromley, Kensington, Wandsworth and Westminster — which estimated that they would save about £35 million on the administrative side—this will interest the hon. Member for Leeds, Central (Mr. Fatchett) — and that by changing policy they could save another £65 million, making £100 million in all. We have not included those policy savings. If the hon. Gentleman presses me about whether it should be administration or policy, I should say that there are substantial savings to be made in the administration of the GLC. I have mentioned its tremendous number of committees and the superstructure that has been built up. In the 12 months from September 1983 to September 1984, its staff records show an astonishing increase of 1,280 in the number of staff in post. That is a 6 per cent. increase in staff in an authority which has little more than one year to live.
      Mr. Tony Banks rose—
      Mr. Baker: Perhaps I might be allowed to conclude as I think that the Committee wants to move on to the next group of amendments. [HON. MEMBERS: "Hear, hear."] I am grateful for the support of my hon. Friends in some part

      1149
      of our proceedings. There are substantial savings to be made from efficiencies, changes and the elimination of duplication and from the removal of a tier of unnecessary, costly and remote government. For those reasons I hope that the Committee will reject these amendments.
      Mr. Allan Roberts: The Minister has failed to answer major criticisms about the Government's proposals concerning savings. If the Minister is convinced that savings are justified, why is he afraid of these amendments? Why is he afraid of amendment No. 8 which asks for an inquiry into the implications for local government unit costs? If what he says is to be believed, he would not be afraid to accept it. Why is he afraid to lay before Parliament, as requested by amendment No. 9, a detailed analysis of implications for public expenditure? If his arguments are justified, he could give us such an analysis. Why is he afraid of amendment No. 30, which would enable us to know what percentage of expenditure of the councils that are to be abolished will be borne by the districts and London boroughs, what percentage will be borne by the quangos and joint boards and what percentage will be the responsibility of the Minister? If what he says is true, and there are savings to be made, why does he not accept that amendment and tell us the facts? Why is he afraid of amendment No. 31, which would set up a Select Committee to examine the costs of his proposals? We should remember that it was the Conservative Government who established Select Committees for such purposes.
      As suggested by amendment No. 9, Parliament must be entitled to assurances that the same costs and levels of expenditure will be maintained by the London boroughs, the metropolitan districts, the joint boards and the quangos. Has the Minister given the game away? Will there be significant savings only if there are changes in policy? That means cuts in services and job losses. Is this not another attack, not on councils, but on people most in need, who are served by the councils that are to be abolished?
      I should like to consider the Government's argument that they are streamlining the cities and getting rid of two-tier local government. Earlier today, the Labour party manifesto was quoted as favouring one-tier local government where possible. The Redcliffe-Maud commission favoured one-tier local government where possible but concluded that it was not possible in urban areas and conurbations. The Bill does not set up one-tier local government. It establishes and maintains two-tier local government, but one of the tiers is not to be democratically elected. That is the difference. If the Government really were streamlining the cities and getting rid of a local tier of local Government, we might accept that savings could be made.
      Irrespective of the arguments about joint boards and other proposed arrangements, none of them can work without management costs. The Government want to replace seven authorities with at least 19 joint bodies, a host of joint committees and other co-operative arrangements often with statutory backing. Where will the administrative savings come from? Seventy per cent. of Merseyside county council's expenditure will go not to the districts there but to the joint boards and quangos that will be established. How can we therefore envisage
      1150
      administrative savings? Has the Minister given the game away? Are not the savings those which will result from changes in policy and from the continuation of the trend that the Government have established, in which 61 per cent. of local authority expenditure funded by central Government has dropped to 48·8 per cent? Grant has been cut in metropolitan areas, and indeed, throughout the country, which is causing cuts in services and the rate increases, for which the Government criticise the GLC and metropolitan counties.
      10.15 pm
      The tremendous upheaval that abolition will cause will not be justified by the estimated savings, which could be a mere 2 per cent. of the metropolitan counties' total expenditure. Local government expenditure as a proportion of GDP and public sector spending has fallen during the past five years, while central Government expenditure has risen.
      To take Merseyside county council as an example—this is true for all authorities—much of the increase in costs borne by the local authoritiy, which is to be abolished, has been caused by matters outside its control. I refer to police pay, the needs of the regions, penalties on grants and so on.
      If the amendments are not accepted, these proposals will be a recipe for increased bureaucracy, the continuing duplication of services, and the continuation of two tiers, one of which will no longer be democratically elected. The proposals are opposed by the Labour and alliance parties and by all informed opinion outside the House. Despite what the Secretary of State says, they continue to be opposed by voluntary organisations, which see their funding cut and the duplications that the system will create, and recognise that that will cause them and the electors great difficulties.
      Question put, That the amendment be made:—
      The Committee divided: Ayes 186, Noes 231.

      Division No. 48]

      [10.16 pm

      AYES

      Alton, David

      Carlile, Alexander (Montg'y)

      Anderson, Donald

      Carter-Jones, Lewis

      Archer, Rt Hon Peter

      Cartwright, John

      Ashdown, Paddy

      Clwyd, Mrs Ann

      Ashley, Rt Hon Jack

      Cocks, Rt Hon M. (Bristol S.)

      Ashton, Joe

      Cohen, Harry

      Atkinson, N. (Tottenham)

      Coleman, Donald

      Bagier, Gordon A. T.

      Concannon, Rt Hon J. D.

      Banks, Tony (Newham NW)

      Conlan, Bernard

      Barnett, Guy

      Cook, Frank (Stockton North)

      Barron, Kevin

      Cook, Robin F. (Livingston)

      Beckett, Mrs Margaret

      Corbett, Robin

      Beith, A. J.

      Corbyn, Jeremy

      Benn, Tony

      Cowans, Harry

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

      Cox, Thomas (Tooting)

      Bermingham, Gerald

      Craigen, J. M.

      Bidwell, Sydney

      Crowther, Stan

      Blair, Anthony

      Cunliffe, Lawrence

      Boothroyd, Miss Betty

      Cunningham, Dr John

      Boyes, Roland

      Dalyell, Tam

      Bray, Dr Jeremy

      Davies, Ronald (Caerphilly)

      Brown, Gordon (D'f'mline E)

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

      Brown, Hugh D. (Provan)

      Deakins, Eric

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

      Dewar, Donald

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

      Dixon, Donald

      Brown, Ron (E'burgh, Leith)

      Dobson, Frank

      Bruce, Malcolm

      Dormand, Jack

      Buchan, Norman

      Dubs, Alfred

      Caborn, Richard

      Duffy, A. E. P.

      Callaghan, Jim (Heyw'd & M)

      Dunwoody, Hon Mrs G.

      Campbell, Ian

      Eastham, Ken

      1151

      Ellis, Raymond

      Maynard, Miss Joan

      Evans, John (St. Helens N)

      Meacher, Michael

      Ewing, Harry

      Meadowcroft, Michael

      Fatchett, Derek

      Millan, Rt Hon Bruce

      Faulds, Andrew

      Miller, Dr M. S. (E Kilbride)

      Field, Frank (Birkenhead)

      Morris, Rt Hon A. (W'shawe)

      Fields, T. (L'pool Broad Gn)

      Morris, Rt Hon J. (Aberavon)

      Fisher, Mark

      Oakes, Rt Hon Gordon

      Flannery, Martin

      O'Brien, William

      Foot, Rt Hon Michael

      O'Neill, Martin

      Forrester, John

      Orme, Rt Hon Stanley

      Foster, Derek

      Park, George

      Fraser, J. (Norwood)

      Parry, Robert

      Freeson, Rt Hon Reginald

      Patchett, Terry

      Garrett, W. E.

      Pavitt, Laurie

      George, Bruce

      Pendry, Tom

      Godman, Dr Norman

      Penhaligon, David

      Golding, John

      Pike, Peter

      Gould, Bryan

      Powell, Raymond (Ogmore)

      Gourlay, Harry

      Prescott, John

      Hamilton, James (M'well N)

      Radice, Giles

      Hamilton, W. W. (Central Fife)

      Randall, Stuart

      Hancock, Mr. Michael

      Redmond, M.

      Hardy, Peter

      Rees, Rt Hon M. (Leeds S)

      Harrison, Rt Hon Walter

      Richardson, Ms Jo

      Hattersley, Rt Hon Roy

      Roberts, Allan (Bootle)

      Heffer, Eric S.

      Robertson, George

      Hogg, N. (C'nauld & Kilsyth)

      Rogers, Allan

      Holland, Stuart (Vauxhall)

      Rooker, J. W.

      Home Robertson, John

      Ross, Ernest (Dundee W)

      Howell, Rt Hon D. (S'heath)

      Ross, Stephen (Isle of Wight)

      Howells, Geraint

      Sedgemore, Brian

      Hoyle, Douglas

      Sheldon, Rt Hon R.

      Hughes, Dr. Mark (Durham)

      Short, Ms Clare (Ladywood)

      Hughes, Robert (Aberdeen N)

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

      Hughes, Roy (Newport East)

      Silkin, Rt Hon J.

      Hughes, Sean (Knowsley S)

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

      Hughes, Simon (Southwark)

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

      John, Brynmor

      Snape, Peter

      Johnston, Russell

      Soley, Clive

      Jones, Barry (Alyn & Deeside)

      Spearing, Nigel

      Kaufman, Rt Hon Gerald

      Stott, Roger

      Kennedy, Charles

      Strang, Gavin

      Kilroy-Silk, Robert

      Straw, Jack

      Kirkwood, Archy

      Thomas, Dafydd (Merioneth)

      Lamond, James

      Thomas, Dr R. (Carmarthen)

      Leighton, Ronald

      Thompson, J. (Wansbeck)

      Lewis, Ron (Carlisle)

      Thome, Stan (Preston)

      Lewis, Terence (Worsley)

      Tinn, James

      Litherland, Robert

      Torney, Tom

      Lloyd, Tony (Stretford)

      Wainwright, R.

      Lofthouse, Geoffrey

      Wallace, James

      Loyden, Edward

      Warden, Gareth (Gower)

      McCartney, Hugh

      Wareing, Robert

      McDonald, Dr Oonagh

      Welsh, Michael

      McGuire, Michael

      White, James

      McKelvey, William

      Wigley, Dafydd

      McNamara, Kevin

      Williams, Rt Hon A.

      McTaggart, Robert

      Winnick, David

      McWilliam, John

      Young, David (Bolton SE)

      Madden, Max

      Marek, Dr John

      Tellers for the Ayes:

      Marshall, David (Shettleston)

      Mr. John Maxton and

      Mason, Rt Hon Roy

      Mr. Allen McKay.

      NOES

      Alison, Rt Hon Michael

      Butcher, John

      Ashby, David

      Carlisle, John (N Luton)

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

      Carlisle, Kenneth (Lincoln)

      Batiste, Spencer

      Carlisle, Rt Hon M. (W'ton S)

      Beggs, Roy

      Clark, Sir W. (Croydon S)

      Bellingham, Henry

      Colvin, Michael

      Bevan, David Gilroy

      Conway, Derek

      Biffen, Rt Hon John

      Coombs, Simon

      Boscawen, Hon Robert

      Cope, John

      Braine, Sir Bernard

      Crouch, David

      Brandon-Bravo, Martin

      Currie, Mrs Edwina

      Brown, M. (Brigg & Cl'thpes)

      Dickens, Geoffrey

      Bruinvels, Peter

      Dorrell, Stephen

      Burt, Alistair

      Douglas-Hamilton, Lord J.

      1152

      Farr, Sir John

      Luce, Richard

      Favell, Anthony

      Lyell, Nicholas

      Fenner, Mrs Peggy

      McCrindle, Robert

      Fletcher, Alexander

      McCurley, Mrs Anna

      Fookes, Miss Janet

      Macfarlane, Neil

      Forman, Nigel

      MacGregor, John

      Forsyth, Michael (Stirling)

      MacKay, Andrew (Berkshire)

      Forth, Eric

      MacKay, John (Argyll & Bute)

      Fox, Marcus

      Maclean, David John

      Franks, Cecil

      McQuarrie, Albert

      Freeman, Roger

      Madel, David

      Fry, Peter

      Malone, Gerald

      Gale, Roger

      Maples, John

      Galley, Roy

      Marland, Paul

      Gardiner, George (Reigate)

      Marlow, Antony

      Gardner, Sir Edward (Fylde)

      Marshall, Michael (Arundal)

      Garel-Jones, Tristan

      Mates, Michael

      Glyn, Dr Alan

      Mather, Carol

      Gorst, John

      Maude, Hon Francis

      Gow, Ian

      Mawhinney, Dr Brian

      Gower, Sir Raymond

      Maxwell-Hyslop, Robin

      Greenway, Harry

      Merchant, Piers

      Gregory, Conal

      Meyer, Sir Anthony

      Griffiths, Peter (Portsm'th N)

      Miller, Hal (B'grove)

      Grist, Ian

      Mills, Iain (Meriden)

      Gummer, John Selwyn

      Mills, Sir Peter (West Devon)

      Hamilton, Hon A. (Epsom)

      Miscampbell, Norman

      Hamilton, Neil (Tatton)

      Mitchell, David (NW Hants)

      Hampson, Dr Keith

      Moate, Roger

      Hanley, Jeremy

      Monro, Sir Hector

      Hannam,John

      Montgomery, Fergus

      Hargreaves, Kenneth

      Murphy, Christopher

      Harris, David

      Neale, Gerrard

      Harvey, Robert

      Needham, Richard

      Haselhurst, Alan

      Nelson, Anthony

      Hawkins, C. (High Peak)

      Neubert, Michael

      Hayes, J.

      Newton, Tony

      Heathcoat-Amory, David

      Nicholls, Patrick

      Heddle, John

      Norris, Steven

      Henderson, Barry

      Oppenheim, Phillip

      Hickmet, Richard

      Oppenheim, Rt Hon Mrs S.

      Higgins, Rt Hon Terence L.

      Osborn, Sir John

      Hill, James

      Page, Richard (Herts SW)

      Hind, Kenneth

      Parris, Matthew

      Hogg, Hon Douglas (Gr'th'm)

      Patten, John (Oxford)

      Holland, Sir Philip (Gedling)

      Pawsey, James

      Holt, Richard

      Peacock, Mrs Elizabeth

      Hooson, Tom

      Percival, Rt Hon Sir Ian

      Hordern, Peter

      Pollock, Alexander

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

      Porter, Barry

      Howell, Rt Hon D. (G'ldford)

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

      Howell, Ralph (N Norfolk)

      Powell, William (Corby)

      Hubbard-Miles, Peter

      Powley, John

      Hunt, David (Wirral)

      Price, Sir David

      Hunt, John (Ravensbourne)

      Proctor, K. Harvey

      Hunter, Andrew

      Raffan, Keith

      Hurd, Rt Hon Douglas

      Rathbone, Tim

      Irving, Charles

      Rees, Rt Hon Peter (Dover)

      Jackson, Robert

      Renton, Tim

      Jenkin, Rt Hon Patrick

      Rhodes James, Robert

      Jones, Gwilym (Cardiff N)

      Rhys Williams, Sir Brandon

      Jones, Robert (W Herts)

      Rifkind, Malcolm

      Jopling, Rt Hon Michael

      Roberts, Wyn (Conwy)

      Joseph, Rt Hon Sir Keith

      Robinson, Mark (N'port W)

      Kellett-Bowman, Mrs Elaine

      Rossi, Sir Hugh

      Key, Robert

      Rowe, Andrew

      King, Roger (B'ham N'field)

      Ryder, Richard

      Knight, Gregory (Derby N)

      Sackville, Hon Thomas

      Lamont, Norman

      Sainsbury, Hon Timothy

      Lang, Ian

      St. John-Stevas, Rt Hon N.

      Latham, Michael

      Sayeed, Jonathan

      Lawler, Geoffrey

      Shaw, Giles (Pudsey)

      Lee, John (Pendle)

      Shaw, Sir Michael (Scarb')

      Lennox-Boyd, Hon Mark

      Shelton, William (Streatham)

      Lewis, Sir Kenneth (Stamf'd)

      Shepherd, Colin (Hereford)

      Lightbown, David

      Shersby, Michael

      Li Hey, Peter

      Silvester, Fred

      Lloyd, Ian (Havant)

      Sims, Roger

      Lloyd, Peter, (Fareham)

      Skeet, T. H. H.

      Lord, Michael

      Smith, Cyril (Rochdale)

      1153

      Speller, Tony

      Thompson, Donald (Calder V)

      Spence, John

      Thompson, Patrick (N'ich N)

      Spencer, Derek

      Thome, Neil (Ilford S)

      Spicer, Jim (W Dorset)

      Thumham, Peter

      Spicer, Michael (S Worcs)

      Townend, John (Bridlington)

      Squire, Robin

      Trippier, David

      Stern, Michael

      Trotter, Neville

      Stevens, Lewis (Nuneaton)

      Twinn, Dr Ian

      Stewart, Allan (Eastwood)

      van Straubenzee, Sir W.

      Stewart, Andrew (Sherwood)

      Vaughan, Sir Gerard

      Stradling Thomas, J.

      Waddington, David

      Temple-Morris, Peter

      Waldegrave, Hon William

      Thatcher, Rt Hon Mrs M.

      Walden, George

      Thomas, Rt Hon Peter

      Walker, Bill (T'side N)

      1154

      Waller, Gary

      Winterton, Nicholas

      Ward, John

      Wolfson, Mark

      Wardle, C. (Bexhill)

      Wood, Timothy

      Warren, Kenneth

      Yeo, Tim

      Watson, John

      Young, Sir George (Acton)

      Watts, John

      Younger, Rt Hon George

      Wheeler, John

      Whitney, Raymond

      Tellers for the Noes:

      Wilkinson, John

      Mr. John Major and

      Winterton, Mrs Ann

      Mr. Tony Durant.

      Question accordingly negatived.
      10.30 pm
      Mr. Simon Hughes: I beg to move amendment No. 11, in page 1, leave out line 10.
      The First Deputy Chairman of Ways and Means (Mr. Ernest Armstrong): With this, it will be convenient to take the following amendments:
      No. 12, in page 1, line 10, after 'Council', insert
      'shall be replaced by a directly elected authority representing the area presently administered by the Greater London Council, such authority's functions and powers to be determined by Parliament following an enquiry by a Select Committee of the House of Commons into the functions and powers of the Greater London Council.'.
      No. 46, in page 1, line 15, at end add—
      '(3) On the abolition date there shall be established for each metropolitan county and for Greater London a body corporate to be known by the name of that county with the addition of the words "Precepting Authority" or to be known as the Greater London Precepting Authority, as the case may be.
      (4) The authorities established by subsection (3) above shall consist of members elected by the local government electors of the metropolitan county of Greater London, as the case may be, in accordance with this Act and the Representation of the People Act 1983.
      (5) The authorities established by subsection (3) above may in respect of any financial year, or part year, beginning with the abolition date issue precepts to the appropriate rating authority for the levying of rates to meet, to the extent the authority considers reasonable in all the circumstances, the expenditure of the bodies or persons or joint committees (other than directly elected bodies) to whom functions are transferred by this Act.'.
      Mr. Hughes: I have the privilege to move this amendment which stands in the name of my right hon. and hon. Friends in what I sense is the most important debate on the most important amendments to the most important clause to be debated during the Committee stage of this most important Bill.
      The amendment would delete the GLC from the list of councils that the Government propose to abolish. The effect of all the amendments would be to ensure the continuance of directly elected government for London across London. We seek to do no less than to take the heart out of the Bill. We seek to do so because we believe that to do away with a single tier of Londonwide government without any proposal for a better Londonwide alternative is mindless as well as heartless. We seek to do so because we believe that the obsession with abolition that only as recently as last year entered the mind of the Prime Minister and her Government, if carried into legislation, will take the democracy from the city that is at the heart of our nation.
      To abolish the GLC and to put no Londonwide democracy in its place is to decapitate democracy in our capital. So it is to retain the GLC that we move the amendment, with retention as its first objective. We know that the GLC is not and has never been perfect. We also know that, before it, the LCC was not perfect. The GLC is not the model regional authority that my right hon. and hon. Friends and I would wish, but it is easier and, we believe, cheaper to improve government in our capital city by extending and improving the existing structure than by knocking down the edifice that was first erected in 1889 and making no real attempt to replace it with any structure at all.
      It is not that there will not be one structure to replace the GLC, but that there will be no replacement and many replacements at the same time. The Liberal party has
      1156
      always been in favour of regional government for London, as for elsewhere, and we have a record of consistency that is unparelleled for any party that has been in the House since before the Herbert commission reported. Compared with all our partners in Europe, Britain does not have a happy track record, and this is not a very happy, altough unique, proposal.
      The report of the Institute of Local Government Studies was published last year, comparing the proposal for London with other metropolitan and capital cities in western Europe and north America. Page two states:
      "The turbulent history of recent local government change in England amazes our continental neighbours … While reform outside the United Kingdom has generally been gradual, through a long programme of amalgamations which give priority to initiatives by local municipalities and tailor metropolitan institutions to the particular case, the English metropolitan areas have undergone one traumatic reorganisation in recent times, and in the case"—
      not our concern at the moment—
      "of the West Midlands, two in the space of eleven years."
      The report continues with this telling phrase:
      "Amongst European democracies British local government must now seem a very tender plant."
      The Government intend to pull up by the roots the best example of the tender plant of local government primarily and quite clearly because they do not like the colour of the flower. Our objections are clear. The proposal to abolish the GLC is not based on an objectively strong or argued case. The economies asserted have not been proved. But, even more important, the clause that we seek to amend would try to ensure that instead of London logically having, as it does have, a unity throughout its area, there would be no co-ordinating tier of government. We believe that there should be a tier of Government to co-ordinate and complement the functions of the boroughs across the square miles of Greater London, the boundaries of which are, for most people and most purposes, artificial and of little day-to-day relevance.
      We say also that to abolish the GLC will not, as has often been said, result in government not being carried out for London—it will be carried out in a much less co-ordinated, much less simple and much less accountable manner. This clause, unless amended, will result in the fragmentation and dispersal of the functions of London's government.
      The proposal was put forward in the manifesto because the Government said that the GLC was wasteful and unnecessary. They said that they would return most of the functions to the boroughs. Of course, that is untrue. Most of the functions were previously not with the boroughs, but were at county level. If the proposals go through, two thirds of the expenditure will go elsewhere than to borough councils. Only 15 per cent. of the services will go to them.
      The Government accept that only 12 per cent. of the cost of local government in Greater London is borne by the GLC, so on any scale of values it cannot, even at its worst, be that wasteful. In the argument about what is necessary, the Government do not appear to have struck a supportive chord among the people of London and its surrounding areas.
      We do not accept that joint boards are an acceptable alternative. If the Secretary of State does not understand that, I can tell him that, rather than a GLC, whose councillors I and the other residents of London elected four years ago, working for London, there will be running London a Secretary of State whom I did not put in the job,

      1157
      a joint board which I did not choose for the job, or a quango appointed to the job by other than those who pay for the services.
      Rather than 33 relationships across London, there will be 500 different relationships—different bodies levying the moneys from the ratepayers to pay for services. At the end of the day, the process of democracy will not work. Democracy is about choosing between priorities — making choices to do one thing rather than another. When the roads are the responsibility of one department, industry and employment policies of another, and the fire service of a joint board, when planning is the responsibility of the Secretary of State advised only by a planning commission and when waste disposal goes elsewhere, choices about priorities—which is what democracy is all about—can no longer be made.
      It is untrue to say that decisions will be left with democratically elected representatives. Under the Bill, those who take over the government of London will have an enormous plethora of controls ultimately exercised by the Secretary of State and his right hon. Friends at the top of the bureaucratic tree of the Civil Service and Whitehall Government.
      The overwhelming view of Londoners—50 per cent. in January and 74 per cent. when they were last polled—even in the constituency of Finchley, represented by the Prime Minister — and, I have no doubt, in the constituency of Enfield, Southgate, as we shall see tomorrow—is that the Government must think again. The chaos and confusion, let alone the inevitable job losses, jobs that the transition will cause are complex and unnecessary.
      From 1885, when the metropolitan board of works was set up, London has had an unbroken line of multifunctional, democratically elected governors for its services. This Government propose to break that line. Our amendment would solve for the Government the problem of the embarrassing position they have got themselves into by their political misjudgment of the views of the people whom they are meant to represent.
      I end with a quote from the report comparing these proposals with those affecting other European capital cities. The report states:
      "It is easy in the United Kingdom for a government to abolish an institution. It can almost invariably find support from those who see themselves likely to gain powers from its abolition. It is much more difficult to replace it with sound and robust alternatives that will have the public support on which they will depend to succeed."
      I ask the Committee to accept either the amendment in the name of the hon. Member for Staffordshire, South (Mr. Cormack) as a second-best alternative, or our amendment as an even better alternative, and to reject the proposal to abolish the GLC. The proposal is unacceptable. We resist it, and we ask the Government and those hon. Members who would normally support the Government to think again on this issue and to change the Government's mind.
      Mr. Patrick Cormack: The hon. Member for Southwark and Bermondsey (Mr. Hughes) was kind enough to trail my amendment, so perhaps I can make it plain to hon. Members on both sides of the Chamber that I intend to confine my remarks to amendment No. 12 which stands in the name of a number
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      of right hon. and hon. Friends and myself and which is preferable to the amendment moved by the hon. Member for Southwark and Bermondsey.
      The Government are guilty of reflex politics in this regard. It all began on a night in 1981 when there was a putsch or pogrom, or whatever one likes to call it, and Mr. McIntosh was replaced by Mr. Livingstone. Incredulity became hostility, and a Tudor attitude of "off with his head" became the whim of the moment. We found in last year's manifesto a commitment which, I suggest to my hon. Friends, had not been sufficiently clearly thought through — a commitment to abolish the GLC and the metropolitan counties. I know that many of my hon. Friends feel strongly about manifesto commitments, and that is reasonable. Manifestos are a general expression of intent by a political party; but we still have a constituency system. Each of us is individually answerable to our electorates.
      It so happens that in my constituency we had 50 copies of the Conservative election manifesto. I think that we got rid of 23 of them—I believe that three were bought and 20 were given away. I know that 53,000 copies of my election address, or thereabouts, went out and that the abolition of the GLC and the metropolitan counties did not feature in the document—comprehensive and excellent though it was. Therefore, I do not feel that I am at all bound by that last-minute pledge, rushed in as it was without adequate consultation. Yet, at the same time, I am deeply sensible of the susceptibilities of my hon. Friends who feel that the otherwise excellent document that emanated from central office has a binding effect. That is why my right hon. and hon. Friends and I have devised this amendment.
      10.45 pm
      We have accepted the logic and logistics of a large majority. We understand that the metropolitan counties, which a Conservative Government of whom my right hon. Friend the Secretary of State was proud to be a member brought into existence a decade ago, are likely to be swept away. We accept that there is strength in the argument and that the cities within those metropolitan counties will have directly elected authorities governing their affairs. We also accept that many legitimate critcisms can be made of the GLC, although I rather think that if Sir Horace Cutler had been returned to power in 1981 we would not be debating this measure.
      My biggest objection to the Bill—that is why I have not and will not vote for it on any occasion—is that it is entirely peripheral to the major issues facing our nation today. Be that as it may, my right hon. Friend and the Prime Minister have decided that the GLC will go. So, in a spirit of conciliation and compromise, which used to be the hallmark of the Tory party before it exchanged a philosopy for dogma, we are prepared to say, "All right, let it go, but at the same time"—
      Mr. John Wheeler: My hon. Friend will never make PPS now.
      Mr. Cormack: My hon. Friend talks about PPSs. We have in this Government more PPSs than in history. It is the largest collection of eunuchs in high places since the Pope disbanded the castrati.
      Mr. Michael Brown: Just because my hon. Friend did not become a PPS.
      Mr. Cormack: I was a PPS long before my hon. Friend was out of nappies. I found it a delightful but somewhat restricting experience and I did not continue.
      We are saying, "All right, we will accept what you are seeking to do in respect of the metropolitan counties, albeit reluctantly; we will accept what you are seeking to do with the GLC, albeit reluctantly, but we will not accept that London, the flower of cities all, the greatest city in the world, should be without a directly elected council".
      It is a sad coincidence that this week we should be commemorating the 200th anniversary of the death of Dr. Johnson, who said of London:
      "when a man is tired of London, he is tired of life; for there is in London all that life can afford"—
      in 1984, all that life affords apart from a directly elected council. [Interruption.] My hon. Friend's knowledge of history is about as profound as his knowledge of parliamentary tactics. I just wish that he would listen for a moment. He can have his own go later if he catches your eye, Mr. Armstrong.
      In the amendment we are seeking to say to the Government, "Here is an opportunity to heed the words of those who, over the past few months, since the paving Bill"—that iniquitous measure—"was brought before the House have said, 'Please think again. We are not calling in aid a galaxy of pseudo-intellectuals of the Left; we are calling in aid men of great experience who have served local government well and nobly for many years. They are people like Sir Horace Cutler and Lord Marshall—
      Mr. Dykes: Bernard Brook-Partridge.
      Mr. Cormack: And Bernard Brook-Partridge. My hon. Friend can mention many Conservatives, and doubtless he will do so. There is also Desmond Plummer. All those who have had deep and proper experience of London government believe that it is necessary that London should have a centrally elected co-ordinating authority.
      This week a letter came into my possession. It was written by an eminent elder statesman of the Tory party. He said:
      "No one person or a collective is entitled to take the Conservative party along a course fraught with difficulties during the necessarily long gestation period without keeping an ear to the ground to see that the earth is not shifting."
      They are wise words, uttered by a very eminent Conservative local statesman, as I shall call him. [HON. MEMBERS: "Who was it?"] I shall reveal the source later. I was given the letter by a colleague who received it from the person in question and does not wish the writer's name to be revealed at the moment. I hope that hon. Members in all parts of the Committee are prepared to accept my word.
      I should like to quote from a speech made by Neville Beale, the GLC member for Finchley, who happens to represent an area that is not entirely unfamiliar to the leader of our party. He says:
      "Sir Horace … commissioned a detailed study of local government in London by the man who is now Lord Marshall and, until recently, vice-chairman of the Party. Whether everyone agrees with Lord Marshall's conclusions or not, it is a matter of some regret that the incoming Tory Government in 1979 appears to have ignored his report."
      He says of Mr. Livingstone:
      "the case against Ken Livingstone is not the same as the case against the GLC. Nor is the case against the GLC the case for the particular proposals in the Abolition Bill which received its
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      Second Reading in the Commons … It is painfully obvious that many Tory MPs and many Tory Peers are deeply troubled by what is happening, even if reluctant to defy the Whips."
      I suggest to my hon. Friends that there is deep unease throughout the country at what is being proposed. Supporting amendment No. 12—modest proposal that it is—would give my hon. Friends an opportunity to say to the Government,
      "You do not have to tear up your whole measure but you can rethink this particular central provision in it".
      I should be disappointed if we did not get a positive and helpful reply from the Secretary of State this evening.
      Infallibility is a characteristic of few Governments. It is no answer to cogent arguments to ride roughshod over them. We have seen that happen too often in recent years. We have seen the attitude that there is a God-given right to govern. There is sometimes a case for a little humility when looking at the voting figures. A few weeks ago Mr. Walter Mondale polled in the popular vote roughly the same as the Conservative party polled in the popular vote in this country last year. He has retired from politics; we are assuming that we have a right to do whatever we want to do.
      I urge my right hon. Friend to remember that he was a distinguished member of a Government who brought in the very apparatus that he is now seeking to destroy. He has a great knowledge of London. His own county councillor has told him that on this occasion he might well be advised to think again. He should listen to Alan Greengross, Horace Cutler, Neville Beale and the voices on his own Back Benches. I hope that he will—
      Mrs. Elaine Kellett-Bowman: Don't knock me over.
      Mr. Cormack: I must apologise to my hon. Friend. The last thing that I would wish to do is knock her over. Her contributions to our deliberations are always elegant and enlightened.
      Will my right hon. Friend the Secretary of State please think carefully before he rejects the amendment'? We do not wish to press it to a Division, but press it to a Division we most certainly will unless there is a categorical assurance that there will be a directly elected authority to represent this great capital city.
      Mr. Pavitt: The House always enjoys listening to the hon. Member for Staffordshire, South (Mr. Cormack), because he is one of the few Members who not only enlighten the House but relieve some of the acres of boredom that my late right hon. Friend Nye Bevan warned us about when we first came to this place.
      I should like to go back into history and say why, much to my regret, I think that the hon. Gentleman's case is falling upon deaf ears on the Conservative Front Bench I should like to refer to directly elected representatives. I suppose that I am the only person in the Chamber who spent long and weary hours in 1963 on the Standing Committee of the Bill that created the GLC. During my 20 years in the House I have been bedevilled by two Tory Ministers—one is the right hon. Member for Leeds, North East (Sir K. Joseph), who inaugurated that Bill and afterwards had a disastrous reorganisation of the National Health Service—I served on that Standing Committee—and the other is the present Secretary of State for the Environment, who later had the task of undoing the mess that had been made of the NHS. Of course, I served on that Standing Committee. Now we reach this Bill.

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      The history has been made plain in previous debates. In talking about the colour of the flowers, the hon. Member for Southwark and Bermondsey (Mr. Hughes) put his finger on the important point. The purpose of the original Bill in 1963, which this one now seeks to obviate and obliterate, was entirely the political motive that Herbert Morrison's LCC had to be changed because it had been Labour-controlled since it was established. To do so, that original 1963 Bill incorporated pieces of Kent, including Bromley, and eliminated the Middlesex county council, to arrange boundaries. It looked as if two things would happen — first that the GLC would become Conservative-controlled instead of Labour, and secondly that many of the 32 boroughs that were created would also be Conservative. Neither of those things happened.
      When the Secretary of State for the Environment, who followed the history of that first Act closely, was consulted about the Bill, he realised the great mistake in the Conservative party's judgment: following the establishment of that new large body, there were elections. Therefore, when the Bill was first mooted, there was a good deal of discussion in the contacts that the right hon. Gentleman was having with the Prime Minister of whether or not to have an election or how the Government would get out of having one. The right hon. Gentleman is a serious political operator. He was not going to face the possibility again of having a directly elected responsible body in charge of all the strategy that is needed for the greatest capital city in the world because the last time that was done by his right hon. Friend the Member for Leeds, North-East, the Tory party lost out. Therefore an excellent case has been made out by the hon. Member for Southwark and Bermondsey (Mr. Hughes), who moved the amendment.
      11 pm
      Throughout our debates a plea has been made from this side of the Chamber that the Conservative party should not desert its democratic principles, but it has fallen on deaf ears. Although I hope that the Secretary of State for the Environment will come to the Dispatch Box and say, "We shall return to the philosophy of Disraeli, kin Macleod and Macmillan. We will accept the amendment so that there will be democracy for an elected authority" I do not believe that it will happen. I have passed the age when I believe in miracles.
      Mr. John Gorst: I do not intend to spend long upon discussing the merits and demerits of Amendment No. 12. Even though I may take no further part in the debates I believe it to be essential that one hon. Member for London should endorse what my hon. Friend the Member for Staffordshire, South (Mr. Cormack) has proposed.
      I supported the Bill on Second Reading. I believe that it is desirable to abolish the Greater London council and to redistribute its functions. I have also supported the Government in defeating various amendments. However, I do not favour abolition unless some of the strategic functions can be replaced. I cannot agree that 7 million Londoners should flounder at the mercy of a disparate collection of 32 boroughs. This will lead either to chaos, or to a vacuum, or to an alternation of both.
      If the amendment is passed I shall be glad to continue to support the Government in their efforts to abolish the
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      GLC. If the amendment is not accepted or if, worse, is defeated, I shall give no further support to what I believe to be a fundamentally deficient Bill. I shall oppose it if it remains unaltered after the Report stage, at its Third reading.
      Mr. Edward Leigh: I do not wish to apportion blame. All hon. Members on the Government side of the Chamber agree that the Greater London council should be abolished. Our only concern is what should replace it. We are concerned about accountability, a point which was made frequently during the debate on Second Reading. I do not wish to deal with that subject tonight, but with the provision of a framework for London that is both effective and efficient. If the Bill remains unamended it will create a multiplicity of precepting bodies. They will impose precepts upon the boroughs either individually or as a group.
      Secondly, each precepting body will be orientated towards its own functions and will not have an overall view of London. Each precepting body will require its own premises, equipment and staff and it will also require borough councillors to serve upon it. This could impose an intolerable work load upon them, given their borough duties.
      Lastly, I do not believe that my right hon. Friend can deny that as a result of the quangos and joint boards there will be fragmentation, which will lead to less efficiency.
      Mr. Patrick Jenkin: I have listened with some astonishment to my hon. Friend. He does not appear to have taken on board that there are no extra precepts for the outer London boroughs. There is one extra precept for the Inner London boroughs. There is to be one joint board for London. During the last few minutes my hon. Friend has spoken as though there is to be a plethora of precepts and joint boards. I must ask him to address himself to the proposals contained in the Bill, not to a figment of his imagination.
      Mr. Leigh: All that I can do is to refer my right hon. Friend to those who are involved in local government in London and particularly to members of the Conservative group on the GLC, who have studied the proposals carefully and are convinced that there will be major rate increases in outer London. The difficulty with the new structure is that it will not be directly elected and, therefore, it flies in the face of accountability.
      My hon. Friend the Member for Staffordshire, South (Mr. Cormack) is asking for a new structure which will be directly elected and primarily concerned with policy-making and not with executive government. It will not be a local authority for the purposes of the Act and will not have section 137 and 142 powers to abuse. Its functions will be precisely defined. It will not be able slowly to acquire powers and thereby become a GLC Mark II.
      Mr. Wheeler: I am listening carefully to my hon. Friend's argument. Can he tell us precisely what function he would give to the new authority? As he is proposing a new authority, he ought to be able to tell us what he would give it to do.
      Mr. Leigh: I am about to deal with that. The authority's functions would include the fire brigade, civil defence, flood prevention, land drainage and refuse disposal. It would also have planning functions and be

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      involved with the structure plan and the resolution of conflicts between the boroughs. It would also have financial functions.
      Dr. Ian Twinn: My hon. Friend started by saying that the strategic authority would not have executive functions, but he is now outlining functions that are all executive functions.
      Mr. Leigh: I say that all the powers that can possibly be devolved to the boroughs should be so devolved. As my hon. Friend knows, some powers cannot be devolved to the boroughs and have to be vested in some sort of authority.
      The new authority could have financial functions for debt management and rate equalisation, and ad hoc functions, including responsibilities for historic buildings, arts, regional policy and the green belt. Those are all Londonwide functions. For funding, the authority could make an annual bid to the Secretary of State.
      What are the advantages of such an authority? It would be accountable, cost-effective and efficient. It would not be a local authority, and it would provide a voice for London, avoid the multiplicity of joint boards and quangos, provide a framework for policy-making, avoid the centralisation of power in the Secretary of State, provide an easy mechanism for rate equalisation, eliminate duplication, strengthen and not weaken the executive arm of the boroughs, by ensuring co-ordination, and standardise delivery of services.
      Mr. Douglas Hogg: My hon. Friend stressed that the authority should be accountable, but he says that it could be financed by a direct bid. I have always understood that one of the essences of accountability is that the authority raises money. According to my hon. Friend it will not raise money, but will simply apply to the Secretary of State. Is my hon. Friend commending that form of accountability to the House?
      Mr. Leigh: I am simply trying to be helpful to the Government. I am not proposing a GLC Mark II. We are trying to devise a framework that is efficient.
      My hon. Friends who support the Bill face a difficulty. What will they do about the functions that cannot be devolved to the boroughs? There must be a Londonwide voice for London.
      Let me throw out a last lifeline to my right hon. Friend the Secretary of State. If he is not prepared under any circumstances to accept a directly elected body, I hope that he will listen to Mr. Bob Vigars who is a member of the GLC and is worried about the Bill. He does not believe that the good government of London would be helped by fragmentation. I do not say that his solution is a desirable one, but it is better than we have at the moment. He is asking for a statutory LBA. I do not believe that that is necessarily the best solution but at least it would provide a Londonwide framework and a voice for London. If my right hon. Friend is not prepared to accept the suggestion of my hon. Friend the Member for Staffordshire, South, I hope that we will consider that alternative.
      Mr. Roland Boyes: Earlier this week I said that the Opposition were the true democrats and custodians of democracy and that we wanted an extension of democracy. It is painful to hear the reactions of the Conservatives who are in the process of taking democracy from the people in the GLC and
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      metropolitan county areas. I make no apology for my position. It is absolutely clear. I am for the continuation of the GLC and all the metropolitan councils. I shall take the example of Tyne and Wear to illustrate my points.
      In an area of high unemployment, deep economic problems and all the consequent social problems, it is essential to have elected representatives accountable to the people through a strategic authority which can help to solve some of those problems despite the attitudes of the Government. That is why I support amendment No. 46.
      Democracy must also be simple and clearly understood. The Government's proposals will make the situation extremely complex and difficult to understand. One authority for Tyne and Wear is to be replaced by seven authorities, each with its own functions. That is absurd. How people in the area are to understand the differences in how the bodies operate is beyond imagination. I have personal experience of a similar situation, having lived in a new town, where there was a development corporation, controlled centrally, a elected town council, an elected district council and an elected county council, and many people were confused about the functions of those bodies.
      In my area things are fairly simple at present. There is the borough council—in this case, Sunderland—and the county council. In place of that, we are to have eight different bodies directly accountable to the Secretary of State, the joint boards and joint committees accountable to a body consisting of elected representatives from the district and borough councils, and then the local council.
      Despite what the Government say, it is clear that only minimal power is to be transferred from the strategic county authority to the borough council. It is estimated that it will amount to a maximum of 20 per cent. in terms of spending power, while the joint boards, joint committees and residuary authorities will have 80 per cent. In other words, the main services now administered by Tyne and Wear county council will go to three different bodies.
      By no stretch of the imagination can Conservative Members claim that that is an extension of democracy. It is an extension of confusion and of Government control and an increase in centralisation. We want an increase in decentralisation. We believe in accountability. We believe that elected representatives should do what they believe is right in their elected authorities for three, four or five years and then come before the electorate to answer for their actions during that period. How can that be accepted when there will be a plethora of committees? In fact, no one can forecast how many committees there will be.
      11.15 pm
      Mr. Cowans: My hon. Friend is making a tremendous case. While the case put forward by Conservative Members in respect of the GLC is valid, it is equally valid in respect of every metropolitan county. The case is that there is no need for residuary boards if there is another authority in London, and that applies to every met county.
      Mr. Boyes: I am grateful to my hon. Friend for putting the argument so succinctly.
      I guarantee that, as a result of this reorganisation, the job prospects and conditions of the people of my area will become worse. When Labour is in power in a few year time, it is absolutely inevitable that the outcry will be such that it will be necessary to reintroduce a tier of strategic government to carry out the functions needed to get our people back to work and to raise their standard of living.
      Mr. Dykes: Although as time goes on some of the peripheral and tangential arguments change about what local authorities should do, the central arguments always persist. That theme was part of the speech of my hon. Friend the Member for Staffordshire, South (Mr. Cormack), who ably presented the amendment on behalf of a number of my hon. Friends following the amendment proposed by the second Bench below the Gangway.
      Whatever may now be said by Ministers in their awkward position—and we all sympathise greatly with the dilemma faced by my right hon. Friend and his colleague—the essential truth always remains.
      I hope that colleagues from outside the capital city will accept our apologies for talking about London. The central function of London government was best summed up and encapsulated — despite the fact that he had recent difficulties over another political battle of a totally different kind—by my right hon. Friend the Secretary of State for Education and Science in his former capacity as Minister for Housing and Local Government. During Second Reading of the London Government Bill he rightly, and with great conviction and enthusiasm, quoted the
      "masterly Report of clarity, humanity and vision"
      of the Herbert Commission and said that it formed
      "the basis of the … Bill".
      He said that
      "Greater London is, in a very real sense, a single city"
      unit needing a directly elected Greater London council. He added:
      "One would have thought that this proposal that Londoners should have an effective say in the shaping of their own environment would have an obvious appeal".
      He continued:
      "Those who find it unpalatable must face up to the question of what they would have instead".
      He also rejected specifically and with great clarity and enthusiasm the use of joint boards or a joint board for Londonwide strategic functions. In the same debate, he said:
      "No solution can be found by submitting these great tasks to delegates of local authorities responsible for part only of the area and its problems and some of which have responsibilities which are not only different from but often in conflict with the interests of London."—[Official Report, 10 December 1962; Vol. 669, c. 51–53.]
      If we examine these matters in a dispassionate way, there is no reason why we should conclude that the basic rationale for the creation of a Greater London authority is no longer valid. It has not been changed by the short-term political considerations that may have arisen in various accidental ways since the last general election.
      The basic arguments remain entirely valid. None of my hon. Friends could say tonight, in all honesty and with conviction, that everything has been fundamentally changed by a multitude of tangible factors that necessitate an entirely different basic structure for London's Government, which must now be devolved to some extent to the boroughs but mostly to central Government or to quangos and joint boards. In the old days such an idea would have been anathema to any Conservative Government. I find it most disappointing that my right hon. Friend and his colleagues on the Front Bench do not have the courage to admit the solemn obligation of Conservative Governments to the traditions of our own policy, which I had assumed to lie in devolution, decentralisation, passing down local functions, though at the same time they could encompass creating—as we
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      did in the early 1960s — a dramatic new authority to undertake the strategic planning of the whole Greater London area.
      There is no reason for any basic change. My right hon. Friend and his colleagues use an entirely spurious argument when they say that some or most of the functions would be returned to the 32 borough councils. On all the evidence, that is entirely wrong. Most of the GLC's citywide functions were inherited from the London county council, Middlesex and other county authorities. They cannot easily be divided among the boroughs. Hence there is to be an elaborate jungle—a nightmare structure—of quangos, joint boards, trusts and agencies, all relying on the patronage and decision-making powers of the Secretary of State.
      The abolition scheme is designed to look like a plan for decentralisation but we know that in practice it is a very different thing. The financial breakdown reveals the true position in clear statistical terms.
      As a traditional old-fashioned Tory, I will resist to the end of time — like my hon. Friend the Member for Hendon, North (Mr. Gorst) — the idea that all power should end up in Whitehall. That was the traditional philosophy of the Labour party. Indeed, it still is that party's philosophy, although for tonight's purposes the Opposition are pretending that that is no longer so.
      The Bill is a sad reflection of the opportunistic change in the Government's proposals since the general election. It results from an ill-thought-out, ill-considered proposal. Because it was not discussed with anyone in the Conservative party structure at any level, even the Cabinet, we are now lumbered with pretending to want to pass this ill-judged proposal into law.
      The amendment is a valid proposal and should be supported not only by Conservative Members but by hon. Members in all parts of the Committee. The Government have achieved only very modest majorities on the previous amendments. They should think again before the Bill goes upstairs, and have the courage to change their mind.
      Mr. Tony Banks: Although I have sat through so many debates about the GLC and the met councils since June 1983, I still find it unbelievable that this proposal is seriously made. I know that I should not, but I find it unbelievable that, after 95 years of directly elected citywide government in London, the Government are proposing that that voice is no longer needed. The Government might not have agreed with the noises that have come from county hall. They certainly have not agreed with the politics of those who control it, but surely that is not an argument for abolition of the GLC—that is an argument for getting out on the doorsteps and campaigning through the ballot box to get a change in that political control, not to steamroller it aside saying, "We do not like its politics and the people who control it, so we shall abolish it."
      It is monstrous to suggest that 32 London boroughs can speak for London or, indeed, that the Secretary of State can speak for London. I understand that his Department has rejected the idea of a Minister for London, so who will speak for London?
      Mr. John Wilkinson: Quango speaking.
      Mr. Banks: It is marvellous how strong tea can produce so much wit. It is amazing that the Government

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      should persist in the idea that 32 boroughs can speak for London. The London Boroughs Association has never been able to speak for London. Even if it were suggested that it should be a statutory body, I do not believe that its ability to speak for London would be improved. People on that association are there to represent their boroughs. They will, as is their right, fight their corner and for their boroughs, not with a Londonwide voice. The continuing battle between county hall and this place has gone on for many years. I shall quote from a pamphlet written by the Progressive party in 1898, when a Conservative Government under Lord Salisbury again proposed the breaking up of London's government. It was called tenification at that time. The pamphlet said:
      "There cannot be a town of Kensington or a town of Whitechapel, because the town life of a Londoner is not restricted to his own parish. Live where he may, the interests of his life are metroplitan, and no paper constitution of local mayors and councils can make it otherwise."
      That is as true today with 32 London boroughs as it was then.
      If the GLC's powers are devolved, not to the boroughs but to indirectly elected boards, as is suggested in the Bill, the following factors will arise. First, the boards will have a single purpose orientation. They will look after only one service. There will not be the argument on those boards that is found among Labour groups in county hall, or among Conservative groups, about conflicting demands of service. Secondly, the board will have no mandate for its services. It will have no programme for action on a citywide basis. Thirdly, it will be ineffective in resolving conflict because, as with the London Boroughs Association, representatives on indirectly-elected joint boards will argue for their small part of London. That is not good for London. It does no make good Londonwide sense. Although I have grave reservations about amendment No. 11, I share the desire of the hon. Member for Staffordshire, South (Mr. Cormack) for citywide government. We have it at the moment—it is called the GLC—and this amendment will in no way act as a substitute.
      Sir Philip Goodhart: In moving Second Reading, my right hon. Friend the Secretary of State said:
      "To most Londoners London is a series of separate local areas with very diverse characteristics. Camden has little in common with Croydon; Hackney has little in common with Harrow; Redbridge has little in common with Richmond."—[Official Report, 3 December 1984; Vol 69, c. 27.]
      That is correct to an extent, but I do not believe that it is possible to consider London, our great capital city, merely as a collection of 32 Greater London boroughs. There is a need for a central voice to discuss many issues—for example, traffic. The GLC proposes very soon to introduce a ban on lorries in the London area at night and at weekends. That is a dotty proposal, which will do great damage to commerce in London if it is implemented.
      11.30 pm
      Under my right hon. Friend's proposals, those matters will pass to the Ministry of Transport. I have no great quarrel with that, but if the Department gets it wrong, where will we be able to criticise the proposals and discuss them? I doubt whether we will be able to do so on the Floor of the House, although I believe that it should be within the ambit of Parliament.
      The issue of roads transcends the interests of individual local London boroughs.
      Mr. Douglas Hogg: Will my hon. Friend clarify one matter? In common with other hon. Friends and Opposition Members, he calls for a city wide voice. Is he asking that the authority should be merely a talking shop, capable of expressing opinion, or that it should be cloaked with executive powers? They are not one and the same thing.
      Sir Philip Goodhart: I am not arguing for executive powers. The mere impact of debates has an influence on Ministers and the civil servants who prepare Ministers for them.
      Mr. Cormack: Is it not interesting that many of those who are most vociferously against our suggestion are most vociferously in favour of the European Parliament?
      Sir Philip Goodhart: I am not sure whether it has executive powers or not. I think that it is limited. The debates on some matters may have only a degree of interest.
      The issue of roads transcends the interests of the individual Greater London boroughs. At least once a week I travel on the south circular road. If ever one wanted a monument to a lack of planning ability on the part of the GLC, the south circular would prove the case. At long last the Secretary of State for Transport has asked for a survey of needed improvements to the south circular. It may get it right, but it may get it wrong. The matter must be discussed by a central body.
      Public transport also transcends the interests of one single Greater London borough. Obviously, our constituents have an interest. We are delighted that at long last politicians have been removed from the day-to-day control of London Regional Transport. To think that our constituents will not have an interest in the plans, performance and policies of London Regional Transport is absurd. We cannot spend one or two days a year discussing this on the Floor of the House, nor can it be effectively discussed by the London Boroughs Association.
      We need a special Committee of the House to discuss such Londonwide issues, and I hope that my right hon. Friend will introduce an amendment on Report showing that the Government support the idea. I note that my right hon. and sometime Friend the Member for Old Bexley and Sidcup (Mr. Heath) did not think much of the idea on Second Reading, when he said:
      "Such a Committee would not have been democratically elected for London." — [Official Report, 4 December 1984; Vol. 69, c. 191.]
      I could not believe my ears when I heard him say that, but I checked it in the columns of Hansard, and there it was. It is difficult to imagine a more nonsensical argument against the concept. Whatever one may say about hon. Members who represent London constituencies, all of us received a higher proportion of votes at the general election than did any candidate at the GLC elections. To suggest that such a Committee would not be democratic is to misunderstand the meaning of democracy. I hope that the Government will be able to support this concept.
      Mr. Robin Squire: As a London Member of Parliament, may I begin by making it clear that I regard the GLC as outdated, expensive and outmoded, and I have no hesitation in welcoming its departure. However, in January 1983 I chose to have a public debate in my constituency —my colleagues will tell me that

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      that is a dangerous precedent — and invited for that purpose one of my hon. Friends and colleagues from London. We were to discuss the need or otherwise for a Londonwide body. We had a good, ding-dong debate that covered all the issues, and at the end of the meeting it was clear that a large majority of those present—most of whom were Conservatives—concluded that there was a need for a Londonwide body.
      Invigorated by my practical demonstration of accountability, I was a little nonplussed a few months later when the election manifesto arrived, and I realised that the odd problem had appeared. As a consequence of that commitment, the Government are no longer addressing the central question, which is how best local government should be organised in Greater London. Instead they are addressing the question how best to dispose of the functions of the Greater London council. That is a very different matter, but one that, in the context of the way in which the debate has developed, has become almost the inevitable one, rather than the one I would wish.
      It is true to say that one can distribute services in almost any way and they will still work.
      The Government's proposals will work with fewer problems than has been suggested by the Opposition and with more problems than my hon. Friends have suggested. However, I am concerned that they lay great stress on the operation of joint boards. I speak as the former leader for several years of a large outer London borough, with all the powers, such as education and social services. My experience led me to believe that arguably the weakest role in local accountability was the operation of joint boards. It requires members who have been elected in a borough or district capacity to position themselves instead on a county or boroughwide basis. Above all, the role tends to fall on the shoulders of those who are not necessarily the most competent, but on those who happen to be available for day-time meetings, and those whom the Leader can rely on, rather than on those who have great expertise in the subject under discussion. Therefore, I am concerned at any proposals that would increase existing joint board activity, and remove a Londonwide authority elected for that purpose.
      My colleagues will be relieved to hear that I do not want to make a long speech, but I should like my right hon. Friend to bear in mind my fears, and those of other hon. Members who have spoken. If this amendment is unacceptable, for whatever reason, will he at least keep an open mind on the subject, because many of us remain concerned, through public debates and private conversations? We want to see more than we have so far seen to be satisfied that the current proposals are necessarily the best.
      Mr. Ashby: In debating this amendment, we have to ask ourselves what the current functions of the GLC are. We have had a lot of nostalgia from hon. Members who were members of the GLC some 15 years ago, but they do not know that the GLC is now a eunuch. It is a body with no powers. I was a member of the GLC between 1977 and 1981. I was vice-chairman of the development committee for a year. In that year, I drew up a list of all the land that the GLC possessed, which extended from Land's End to
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      John o' Groats. Little of it was in London, and little of it was of any relevance to London. We got rid of it, and so the GLC ceased to have a relevant function.
      I was chairman of the legal and parliamentary committee where my prime function was to prepare the Greater London Council (Money) Bill, which I notice went through on the nod the other day. That is an unnecessary function of the GLC. My next role was three years as chairman of the housing committee, and in that time, we devolved housing from the GLC to the boroughs. If housing had not been so devolved, we should not be able to debate this Bill, because that was the major function of the GLC. Once the housing was gone, there was nothing left for the GLC to do.
      Parks are virtually non-existent, and what parks there are could easily be devolved to the boroughs. What importance is there in the parks? The GLC makes no impact on the environment. Road repairs are nearly all done locally, and the major thoroughfares are looked after by the Ministry of Transport. The only major road being built is the Rochester way, which will soon be finished. The fire brigade runs itself— [Laughter.] Oh yes it does. Hon. Members should reflect that the GLC had the ambulance service for a few years until it was taken from it. There was no outcry about that, and the ambulance service runs very well. What happened to the fire service before 1964? We had a first-class fire brigade service in London, which was running very efficiently. We could easily return to that.
      11.45 pm
      Mr. Corbyn: Will the hon. Gentleman give way?
      Mr. Ashby: I shall not give way for the moment.
      The GLC's real function was strategic and was to produce the development plan. I believe that the development plan must be updated from time to time, but that is something that could easily be done by an ad hoc forum composed of the various elements of the boroughs. The only great hope for the GLC was docklands, but it is not developing that, because that has gone to the docklands development corporation. The board is doing a first-class job. After docklands what else was left?
      I believe that the support for the GLC that we have heard represents a misunderstanding of its present lack of functions. I well remember the pamphlet of my hon. Friend the Member for Harrow, East (Mr. Dykes). But 1976 was before housing was devolved. Once housing had gone, what was left—
      Mr. Leigh: My hon. Friend is saying only that the Government can take more and more powers away from the GLC. We know that, but does he or does he not believe in democratic accountability?
      Mr. Ashby: It is not a question of democratic accountability. The fact is that those functions have gone. What is left? Well, something very important is left.
      Mr. Dykes: I do not want to prolong the debate, but as my hon. Friend has asked what is left, perhaps I can refer him to page 15 of that pamphlet, which states:
      "There are three main principles to put forward:

      1. The GLC must become a proper strategic authority within the South East Region.

      2. There must be clearer lines of responsibility between the GLC and the boroughs.

      3. The boroughs must be seen to be the primary units of local government in London."

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      Quite apart from housing, what about that?
      Mr. Ashby: My hon. Friend is saying that we should get rid of the GLC but have a strategic south-east authority that covers the whole of the south east of England. That is a different argument. Some peole are in favour of regional policy although I am not one of them. However, that is a completely different thing. I do not see how my hon. Friend can argue like that. He is arguing there for something completely different.
      I said that something was left, and that is the representational role. By that I mean a purely representational role and something that has been abrogated by the present regime in county hall, which does not like being representative. I would be in favour of having a lord mayor for Greater London—
      Mr. Wilkinson: My hon. Friend would be marvellous.
      Mr. Ashby: I would rather enjoy that role, and am grateful to my hon. Friend for that remark. But there is a case for having someone who is truly representational with a budget of several million pounds who is able to give great dinners— [Laughter.] — and to go to the great cities abroad representing London. But the very laughter that I hear illustrates the absurdity of the only representational role that one can think of for the GLC. It would be frivolous, and it would not be acceptable or understood — [Interruption.] Wandsworth can run Battersea park. There is nothing special about that park. There is nothing special either about Burgess park. They can all be run by the boroughs.
      Mr. Simon Hughes rose—
      Mr. Ashby: There is absolutely no reason for maintaining the GLC.
      Many people who are now speaking against the abolition of the GLC, not so long ago were in favour of its abolition. Many ex-members of the GLC, who are not protecting their own hides and are looking at the issue objectively, are saying that enough is enough. They favour abolition. There are dozens of hon. Members with—
      Mr. Charles Morrison: By giving way, my hon. Friend has saved me the need to make a speech. With his great experience and knowledge of the GLC, will he comment on the report of Lord Marshall about the future of the GLC? After all, it was drawn up on the basis of a careful inquiry. Lord Marshall was empowered to recommend, if he felt so inclined, the abolition of the GLC, but he actually came out against that.
      Mr. Ashby: Lord Marshall really stressed the representational role of the GLC. Anyone who has seen the recent agendas of the GLC will realise that it is an expensive debating shop on every subject except London — [Interruption.] My hon. Friend the Member for Gainsborough and Horncastle (Mr. Leigh), who intervenes from a sedentary position, wants to replace the GLC mark 1 with a similar GLC mark 2 talking shop, producing nothing. I suspect that any attempt to find a solution to the problem will produce the same results.
      The remaining areas that cause some of us concern, such as historic buildings and the green belt, are dealt with effectively in the Bill. With those out of the way, there is no other function for the GLC or any GLC mark 2, 3, 4 or 5.
      Mr. Straw: With this group of amendments is included amendment No. 46, which proposes that the precepting
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      authorities should be subject to election. As many Conservative Members wish to speak in this debate, and as it will be for the convenience of the House generally if it is concluded at a reasonable hour, I shall not say anything further about that amendment. There will be another opportunity, as the vote on the amendment will not arise until tomorrow evening.On the issue raised by amendment No. 12, the speech by the hon. Member for Leicestershire, North-West (Mr. Ashby) was frivolous and ill-informed. It emphasises how important it is that there should be the fullest parliamentary scrutiny of these matters before the House and the Government reach a final decision. Although the amendment is not perfect, it is far better than the Government's proposal, and for that reason we shall support it.
      I hope that the Secretary of State will realise that he has been lumbered with a commitment with which he probably disagrees and which he believes is not worth the candle. It is still not too late for the right hon. Gentleman to listen to counsel from both sides of the chamber. Proverbs have warned of the dangers facing the Government:
      "Pride goeth before destruction, and an haughty spint before a fall".
      Despite the fact that the Government have an enormous paper majority—they have not been able to wheel out that majority tonight; on three occasions tonight, the Government's majority has been cut to less than 50—it is important that the Government should listen to the arguments and the merits of the case and, for that reason, support the amendment.
      Mr. Wilkinson: The last thing I would wish to do at this hour is to delay the Committee. I ask my right hon. Friend the Secretary of State to treat this matter with the seriousness it deserves. Throughout the spring and summer, between 12 and 15 of his hon. Friends representing London constituents sat long hours and worked hard trying to work out the best institution for London's government when the GLC was abolished. We support the abolition of the GLC. We are not convinced that the Government have adequately thought out what is to replace it.
      The principle is simple: those aspects that can sensibly be devolved to the boroughs should be devolved; those that can more effectively be fulfilled at the centre should be carried out at the centre. The instrument for the power of execution should be directly elected, because in the past the Conservative party has not been afraid of direct elections. The support that the Government have enjoyed from hon. Members representing the shires has been given because they, like Conservative Members representing London constituencies, believe that the extra arrogation of powers to the Secretary of State, the degree of centralisation and the multiplicity of joint boards—the quangos—are not helping.
      This legislation may prove to be boring. Indeed, the Government may wish to bore us into submission. I believe, as I said on Monday night, that, for our party, this will prove to be a devolution. Bill. It will prove to be a parliamentary morass. We shall get deeper and deeper into the morass, and that will not be for the good government of London. London needs an elected voice to represent its interests to Government and to the nation. The Government may not realise that, but most Londoners do.
      Londoners will judge this measure by how it affects their pockets. The financial implications are extremely

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      sketchy and have not been thought through. I know that a careful and thorough analysis has been done by a highly qualified person, known to my right hon. Friend the Secretary of State. That document, which has been suppressed for the time being, proves that, far from reducing the costs to London ratepayers this measure means that they will pay more. I shall not say more than that. That document will be published shortly, and I suspect that it will, at a stroke, destroy the main rationale for what I regard as a thoroughly undemocratic measure which is not worthy of our party. I hope that my right hon. and hon. Friends will oppose this measure in supporting the most excellent amendment on the list—amendment No. 12.
      Mr. Tony Marlow: I shall be brief. I have two questions to ask my hon. Friends who are opposing this amendment. London is our capital city, and we all know what it means to us as our capital city. What is this geographical entity for which a few of my hon. Friends are pleading on behalf of some new local authority?
      12 midnight
      All right, it would include the City of London; it would include Westminster. I suppose that it would include Blackheath, where I was born, which used to be part of Surrey. Does it include Greenwich, Woolwich, Richmond — ancient old boroughs — Hendon, Dagenham and Camberley—umbilically attached to London? How far does it go? Does it go as far as Rugby 82 miles away and 56 minutes by train, closer in terms of communication with London than many of the places on the undefined periphery of this London that my hon. Friends are talking about?
      My second question is one that has been referred to by my hon. Friend the Member for Grantham (Mr. Hogg). What is the institution that my hon. Friends want? What is the scope of it? What powers should it have? The reality surely is that either it will be an embarrassment—an unloved and unwanted extravagance like the European Assembly, forever sentenced to posturing, lacking power and forever seeking power—or it will be instead a resurrected, second GLC? That is what they have said that they do not want. If they do not want it I suggest that they vote against it.
      Mr. Patrick Jenkin: I agree with one thing that was said by the hon. Member for Southwark and Bermondsey (Mr. Hughes)—that this is probably one of the most serious debates on the Bill. The amendment spoken to by my hon. Friend the Member for Staffordshire, South (Mr. Cormack) raises one of the issues relating to London that has caused the most argument. Many issues have been aired.
      If I have one criticism of the debate—it is perhaps churlish of any Minister to criticise a debate, but I think it is a fair point, and I hope I shall go some way to remedy it—it is that many who spoke about London perhaps did not do so with the historical perspective of why we are where we are and why the Government have brought forward this measure.
      When the hon. Member for Newham, North-West (Mr. Banks) quoted from the document called "The fight for the county council — an elector's catechism of February
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      1898" he made the fair point that the argument was raging then. I shall rehearse with the Committee why I think we are where we are, and justify the decisions that the Government have taken and the proposals that we have brought before the House.
      There are three amendments in this group. They all have a common theme. They all seek to retain some form of directly elected body for each of the seven metropolitan areas. The amendments are different. The amendment moved by the hon. Member for Southwark and Bermondsey would preserve the GLC as it is—warts and all—with no changes. There are few hon. Members and few people who have been involved with the GLC or local government in the London boroughs who can support that.
      There are arguments for some form of Londonwide body—and I shall deal with them—but not for the GLC as it is. Amendment No. 12 relates to some form of replacement authority. Amendment No. 46 which was spoken to by the hon. Member for Houghton and Washington (Mr. Boyes) is different. It contains the strange proposition of an elected precepting authority separate from the joint boards that have operational responsibility for the services. The hon. Member for Blackburn (Mr. Straw) said that he hoped to be able to argue that point later. Perhaps in view of the time I will not deal with that at length now. I will say only that I hope that, when the time comes, the Committee will reject amendment No. 46.
      I have just referred to amendment No. 11, which would leave the GLC untouched. I do not think that anybody wants that.
      I shall devote the rest of my remarks to amendment No. 12, to which most of my hon. Friends and one or two Opposition Members have spoken. It deals with one of the key issues in the Bill. We welcome the fact that those who have put their names to the amendment recognise that the GLC in its present form must go, but I do not think that they have made out a case for a replacement body directly elected.
      The word "metropolis" emerged about 150 years ago in the history of London government. That is how far the arguments go back. We have to remember that the formation of the first Londonwide body, when London was very much smaller than it is today, arose out of the need to have a sewerage system. It was the sewerage commissioners who first established the Londonwide body. I have nothing whatever against sewers; indeed, Disraeli was chided by his opponents as having a policy for sewers. But the public health legislation of Disraeli was, of course the foundation of much of our public health today. Today our main sewerage system is the responsibility of the Thames water authority.
      There followed the Metropolitan Board of Works in 1855. It was a compromise between those who wanted local government for the vestries and those who wanted some form of metropolitan authority. But by the end—[Interruption.] If I may say so, the Committee has asked me to take the debate seriously, and I hope I am doing so. The argument is a very real and genuine one and it has lasted for over a century. [Interruption.] By the end of the 19th century there was a strong Conservative commitment to localism and a strong Liberal commitment to centralism.
      When the Conservative party established the LCC in 1899 they saw it as part of a system that would consist as

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      well of strong London boroughs. In 1899 they went on to create the boroughs, but they did not become the powerful bodies that were envisaged at the time. Even then they were having worries, concerns and doubts about the LCC. On Second Reading I quoted the words of the then Prime Minister, Lord Salisbury, and I quote them again. He said:
      "We might have obtained a much more efficient machine if we had been content to look upon London as what it is, not as one great municipality but as an aggregate of municipalities". —[Official Report, 3 December 1984; Vol. 69, c. 28.]
      The argument continued. The Ullswater Commission was appointed in 1921, when the London suburbs fought off control by the LCC, but in 1950 London's rapid growth gave rise to pressure within the Tory party for reform. The hon. Member for Blackburn mentioned the "Powell plan", conceived by the right hon. Member for South Down (Mr. Powell) in 1955. It proposed the abolition of the LCC and the transfer of most of its functions to seven new county boroughs, which would form what is now recognised as the inner London area.
      Mr. Tony Banks: The Secretary of State is giving us a very interesting historical lecture, but will he agree that each time the government of London was examined by the various bodies they carne to the conclusion that a citywide body and a citywide voice were necessary?
      Mr. Jenkin: I do not deny that at all. It is a matter of history. I hope that the hon. Gentleman will allow me to develop the historical perspective. I was asked to treat this as the most important amendment in the Bill. I am sorry —although the hour is late, my hon. Friends deserve a full reply.
      The Powell plan led to the establishment of the Herbert Commission, which reported in 1960. It recommended a single council for Greater London, originally with 52 London boroughs, smaller than the present ones, but with the enormously important provision that the London boroughs should be the primary units of local government—
      Mr. Dykes rose—
      Mr. Jenkin: I am sorry. I hope that my hon. Friend will bear with me. The point is that until then there had not been powerful boroughs in London. None of the boroughs up to 1964 had ever had full powers anything like those of most purpose authorities with three exceptions—the three county boroughs of Croydon, East Ham and West Ham. All the rest had lesser powers. The creation of the GLC, so vigorously defended by the Labour party today, was bitterly opposed, line by line, clause by clause by the Labour party in 1962 and 1963.
      The most important point is that the creation of those powerful London boroughs alongside a GLC—
      Dr. Cunningham: Will the Secretary of State give way?
      Mr. Jenkin: May I develop this argument?
      Dr. Cunningham rose—
      Mr. Jenkin: All right, I shall give way.
      Dr. Cunningham: Why does the right hon. Gentleman keep emphasising the point about powerful London boroughs when he introduced a Rates Act to stop them being powerful in the way that they want?
      Mr. Jenkin: With respect, that is irrelevant to the argument. The great majority of London boroughs will not and will never need to be rate-capped, and the hon.
      Gentleman knows that.
      The point that I was making before the hon. Gentleman diverted the argument is that the creation of the strong London boroughs in 1964 contained within it the seeds of the destruction of the GLC, because what has become clear in the 20 years since then is that once one has the London boroughs, responsible as they are for over 80 per cent. of local authority spending in London, most purpose authorities with all the major local authority functions, it becomes impossible to have a viable separately elected authority on top of that without the inevitability of conflict, argument and confusion.
      In a long and perceptive lecture on the history of local government in London, an academic, Mr. Kenneth Young, commented:
      "The GLC has always been too weak to be effective. But at the same time it has been too powerful to be accepted."
      Mr. Wilkinson: Could my right hon. Friend explain to the Committee who will pay in the boroughs for the cost of the additional functions transferred from the GLC, upon abolition, to the boroughs? That is an important point as this year, for example, my own borough of Hillingdon already faces a rate increase of about 40 per cent., as my right hon. Friend knows, largely because of central Government policy. This is an important point, and I ask my right hon. Friend to give the Committee a clear explanation.
      Mr. Jenkin: That does not directly arise on this amendment, but I can assure my hon. Friend that in the financial provisions towards the end of the Bill there is a series of clauses designed to make sure that the GRE, rate support grant, and so on, which go or should go to the GLC if it spends at a reasonable level will, of course, be distributed among the London boroughs so that they have the resources as well as the rateable capacity to pay for the services that devolve upon them.
      12.15 am
      These are complicated and technical matters, but the provisions are intended to ensure that no fortuitous gain or loss occurs as a result of the redistribution of the powers among the boroughs. The London rates equalisation scheme will also preserve a substantial measure of redistribution, as happens between the wealthy and the poorer boroughs of London. We shall come to that matter at a later stage. My hon. Friend does not have anything to worry about.
      It is scarcely surprising that the argument for the abolition of the GLC began to be heard quite soon after it was set up in the early 1970s. Serious thought was given within the Conservative Party to the abolition of the GLC. Before the 1974 general election a Conservative policy statement promised an urgent review
      "of what further powers should be devolved to the London boroughs by the GLC".
      The same Mr. Kenneth Young put forward the view that, had the Conservative party won the general election in 1974, a Bill would have been introduced to abolish the GLC.
      The conflict that has taken place during the last 100 years has represented a conflict between the centralists pressing for uniformity and central control and the localises who are arguing for as much power to be given to the

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      borough councils as possible. It is the Conservative party which has usually, though not always, followed the localist cause while the Liberal and Labour parties have always followed the centralist cause. In his speech the hon. Member for Southwark and Bermondsey put forward the traditional centralist argument for London: that as much power as possible should be given to the centre. He followed the very honourable tradition of the Liberals who during the last century have put forward the same argument. Those who support the Conservative party have argued consistently, and successfully in 1964, for devolution of power to the boroughs.
      Mr. A. J. Beith: It was the Secretary of State's party that took away from democratically elected local government their powers over health, water and transport and it was my party that opposed him.
      Mr. Jenkin: My hon. Friend the Member for Leicestershire, North-West (Mr. Ashby) made a powerful speech in which he indicated how the various powers have been withdrawn from the GLC and given to other appointed bodies, which are accountable ultimately to this House. Very few people now argue that health or the water authority functions should go back to the GLC. The Thames water authority covers a far greater area than that of the GLC. And so it should. There is a conflict between the localists who favour local government and those who favour big authorities with a strategic role. The Committee know that this Government's view is strongly localist and that it was the starting point of "Streamlining the Cities". The Bill gives effect to those principles. Virtually all of the service functions of the GLC which I spelled out on Second Reading — 95 per cent. of them — will go to the boroughs.
      There will be only one joint authority for a Londonwide service to look after fire and civil defence. That is to be a joint .responsibility with the boroughs.
      An interesting aspect of the debate — I say this without implying critisism— is that we have heard a variety of different views upon what this replacement, directly elected body should do. My hon. Friend for Gainsborough and Horncastle (Mr. Leigh) gave a very long list of functions which, with the exception of section 137, seemed to me to make it indistinguishable from the present GLC. My hon. Friend may have an opportunity to spell that out.
      The amendment moved by my hon. Friend for Staffordshire, South approaches this problem from the other end. He does not ask what that body should do. I listened to every word that my hon. Friend the Member for Staffordshitre, South said and he did not address himself to what the proposed body would do. The amendment does not spell it out. It says that there should be a body and that a Select Committee should decide what it does. That is standing the argument on its head.
      The only way to decide whether there should be a replacement body is to consider in detail what it would do.
      Mr. Cormack: I intervene at the request of one or two of my hon. Friends to point out that the amendment refers the matter to the House of Commons and, thereby, provides an opportunity for proper consultation, which we have not had up to now.
      Mr. Jenkin: I responded to that argument some hours ago on the first amendment. I told the Committee how much consultation there had been and spelt out the considerable extent to which the Government had responded.
      If we are to have a replacement body, the first question to ask is what it will do. Could it have service functions? My hon. Friend the Member for Leicestershire, North-West effectively made it clear that there are almost no service functions of the GLC that cannot perfectly well be devolved to the boroughs. The Government have identified the fire brigade and civil defence, but no one in his right senses would argue that we needed a separate body for the whole of London to deal with those services.
      Mr. Charles Morrison: Will my right hon. Friend address himself to the question that I asked my hon. Friend the Member for Leicestershire, North-West (Mr. Ashby) about the Marshall report?
      Mr. Jenkin: I have discussed the matter with Lord Marshall. He made a number of recommendations about what the GLC might do. He has since recognised that few people accepted his proposals and thay they are now a dead letter. The fact that he reached a different conclusion in the 1970s is a fact of history which should not govern what we do now.
      The real question is whether there is a strategic role for the proposed body. The word "strategic" never appeared in the Herbert report. That committee was concerned only with service functions. There is no strategic role for the Greater London area. My hon. Friend the Member for Northampton, North (Mr. Marlow) asked a reasonable question. If there is a strategic planning role, it will inevitably cover a substantially wider area than Greater London.
      Let us examine the major decisions that have had to be taken about London. We are now considering the future of London's airports; that is not a matter for the GLC. We have had to consider the east London river crossing; that has had to be a matter for the Department of Transport. The GLC had all the planning powers necessary to redevelop docklands, but nothing happened for 20 years until those powers were taken out of its hands.
      Mr. Gorst: My right hon. Friend has not yet replied to the important question whether there are any Londonwide functions, considerations or discussions on which the London boroughs will have to reach agreement or whether there will be an enormous debate on that level that will go unresolved.
      Mr. Jenkin: We have always recognised that the London boroughs will need to reach agreement on certain issues — waste disposal is clearly one — and the Bill contains a reserve power if that is necessary.
      There is also the power relating to charities—[HON. MEMBERS: "Get on with it."] I sense that the Committee is anxious to reach a conclusion on this amendment. [HON. MEMBERS: "Hear, hear."]
      Finally, there are deep contradictions between the boroughs as main organs of local government and the idea of a separate elected authority on top. As has been shown in London, they really cannot coexist. Local government should be local and powers should be devolved to the boroughs. That is what the Bill does. I shall certainly keep an open mind, as a number of my hon. Friends have

      1179
      requested, but I have heard no arguments today to convince me that it is right to have a separately elected upper-tier authority for London. I therefore ask the Committe to reject my hon. Friend's amendment.
      Mr. Simon Hughes: I shall take but one minute. The Secretary of State has been thrown many lifelines in the interests of democracy for London, but he has taken none of them. The 6,750,000 people of the largest capital in western Europe want to be able to participate in the way in which their city is run in the future. There are two options before the House, either of which is preferable to the Government's proposals. I urge all hon. Members to support at least one and preferably both proposals to amend the clause and keep elected government for London.
      Question put, That the amendment be made:—
      The Committee divided: Ayes 27, Noes 237.

      Division No. 49]

      [12.26 am

      AYES

      Alton, David

      Morrison, Hon C. (Devizes)

      Ashdown, Paddy

      Owen, Rt Hon Dr David

      Beith, A. J.

      Penhaligon, David

      Bruce, Malcolm

      Ross, Stephen (Isle of Wight)

      Carlile, Alexander (Montg'y)

      Smith, Cyril (Rochdale)

      Dykes, Hugh

      Steel, Rt Hon David

      Gilmour, Rt Hon Sir Ian

      Thomas, Dafydd (Merioneth)

      Gorst, John

      Torney, Tom

      Hancock, Mr. Michael

      Townsend, Cyril D. (B'heath)

      Hicks, Robert

      Wainwright, R.

      Howells, Geraint

      Wallace, James

      Hughes, Simon (Southwark)

      Johnston, Russell

      Tellers for the Ayes:

      Kennedy, Charles

      Mr. John Cartwright and

      Kirkwood, Archy

      Mr. Michael Meadowcroft.

      Knox, David

      NOES

      Aitken, Jonathan

      Fookes, Miss Janet

      Alison, Rt Hon Michael

      Forman, Nigel

      Ashby, David

      Forsyth, Michael (Stirling)

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

      Forth, Eric

      Batiste, Spencer

      Fox, Marcus

      Beggs, Roy

      Freeman, Roger

      Bellingham, Henry

      Fry, Peter

      Bevan, David Gilroy

      Gale, Roger

      Biffen, Rt Hon John

      Galley, Roy

      Boscawen, Hon Robert

      Gardiner, George (Reigate)

      Bottomley, Peter

      Gardner, Sir Edward (Fylde)

      Bottomley, Mrs Virginia

      Garel-Jones, Tristan

      Braine, Sir Bernard

      Goodhart, Sir Philip

      Brandon-Bravo, Martin

      Gow, Ian

      Brown, M. (Brigg & Cl'thpes)

      Grant, Sir Anthony

      Buck, Sir Antony

      Gregory, Conal

      Budgen, Nick

      Griffiths, Peter (Portsm'th N)

      Burt, Alistair

      Grylls, Michael

      Butcher, John

      Gummer, John Selwyn

      Carlisle, Kenneth (Lincoln)

      Hamilton, Hon A. (Epsom)

      Clarke, Rt Hon K. (Rushcliffe)

      Hamilton, Neil (Tatton)

      Colvin, Michael

      Hampson, Dr Keith

      Conway, Derek

      Hanley, Jeremy

      Coombs, Simon

      Hannam, John

      Cope, John

      Hargreaves, Kenneth

      Corrie, John

      Harris, David

      Crouch, David

      Harvey, Robert

      Dickens, Geoffrey

      Haselhurst, Alan

      Dorrell, Stephen

      Hawkins, C. (High Peak)

      Douglas-Hamilton, Lord J.

      Hawkins, Sir Paul (SW N'folk)

      Dunn, Robert

      Hayes, J.

      Durant, Tony

      Hayhoe, Barney

      Emery, Sir Peter

      Heathcoat-Amory, David

      Farr, Sir John

      Heddle, John

      Favell, Anthony

      Henderson, Barry

      Fenner, Mrs Peggy

      Heseltine, Rt Hon Michael

      Fletcher, Alexander

      Hickmet, Richard

      1180

      Higgins, Rt Hon Terence L.

      Parkinson, Rt Hon Cecil

      Hind, Kenneth

      Parris, Matthew

      Hogg, Hon Douglas (Gr'th'm)

      Patten, John (Oxford)

      Holland, Sir Philip (Gedling)

      Pawsey, James

      Holt, Richard

      Peacock, Mrs Elizabeth

      Hooson, Tom

      Percival, Rt Hon Sir Ian

      Hordern, Peter

      Porter, Barry

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

      Powell, William (Corby)

      Howell, Rt Hon D. (G'ldford)

      Powley, John

      Howell, Ralph (N Norfolk)

      Price, Sir David

      Hubbard-Miles, Peter

      Proctor, K. Harvey

      Hunt, David (Wirral)

      Raffan, Keith

      Hunt, John (Ravensbourne)

      Rathbone, Tim

      Hunter, Andrew

      Renton, Tim

      Hurd, Rt Hon Douglas

      Rhys Williams, Sir Brandon

      Jackson, Robert

      Ridsdale, Sir Julian

      Jenkin, Rt Hon Patrick

      Rifkind, Malcolm

      Jessel, Toby

      Roberts, Wyn (Conwy)

      Jones, Gwilym (Cardiff N)

      Robinson, Mark (N'port W)

      Jones, Robert (W Herts)

      Rossi, Sir Hugh

      Jopling, Rt Hon Michael

      Rowe, Andrew

      Joseph, Rt Hon Sir Keith

      Ryder, Richard

      Kellett-Bowman, Mrs Elaine

      Sackville, Hon Thomas

      Kershaw, Sir Anthony

      Sainsbury, Hon Timothy

      Key, Robert

      St. John-Stevas, Rt Hon N.

      King, Roger (B'ham N'field)

      Sayeed, Jonathan

      Knight, Gregory (Derby N)

      Shaw, Giles (Pudsey)

      Knight, Mrs Jill (Edgbaston)

      Shaw, Sir Michael (Scarb')

      Lamont, Norman

      Shelton, William (Streatham)

      Lang, Ian

      Shepherd, Colin (Hereford)

      Latham, Michael

      Shepherd, Richard (Aldridge)

      Lawler, Geoffrey

      Shersby, Michael

      Lawrence, Ivan

      Silvester, Fred

      Lee, John (Pendle)

      Sims, Roger

      Lightbown, David

      Skeet, T. H. H.

      Lilley, Peter

      Smith, Tim (Beaconsfield)

      Lloyd, Ian (Havant)

      Soames, Hon Nicholas

      Lloyd, Peter, (Fareham)

      Speller, Tony

      Lord, Michael

      Spence, John

      Luce, Richard

      Spencer, Derek

      Lyell, Nicholas

      Spicer, Jim (W Dorset)

      Macfarlane, Neil

      Spicer, Michael (S Worcs)

      MacGregor, John

      Squire, Robin

      MacKay, Andrew (Berkshire)

      Stanbrook, Ivor

      MacKay, John (Argyll & Bute)

      Steen, Anthony

      Maclean, David John

      Stern, Michael

      McQuarrie, Albert

      Stevens, Lewis (Nuneaton)

      Madel, David

      Stevens, Martin (Fulham)

      Major, John

      Stewart, Allan (Eastwood)

      Malone, Gerald

      Stewart, Andrew (Sherwood)

      Maples, John

      Stradling Thomas, J.

      Marland, Paul

      Taylor, John (Solihull)

      Marlow, Antony

      Temple-Morris, Peter

      Marshall, Michael (Arundel)

      Terlezki, Stefan

      Mates, Michael

      Thatcher, Rt Hon Mrs M.

      Mather, Carol

      Thompson, Donald (Calder V)

      Maude, Hon Francis

      Thompson, Patrick (N'ich N)

      Mawhinney, Dr Brian

      Thorne, Neil (Ilford S)

      Maxwell-Hyslop, Robin

      Thurnham, Peter

      Mayhew, Sir Patrick

      Townend, John (Bridlington)

      Merchant, Piers

      Trippier, David

      Meyer, Sir Anthony

      Trotter, Neville

      Miller, Hal (B'grove)

      Twinn, Dr Ian

      Mills, Iain (Meriden)

      van Straubenzee, Sir W.

      Mitchell, David (NW Hants)

      Vaughan, Sir Gerard

      Moate, Roger

      Viggers, Peter

      Montgomery, Fergus

      Waddington, David

      Morris, M. (N'hampton, S)

      Waldegrave, Hon William

      Moynihan, Hon C.

      Walden, George

      Murphy, Christopher

      Walker, Bill (T'side N)

      Neale, Gerrard

      Waller, Gary

      Needham, Richard

      Ward, John

      Nelson, Anthony

      Wardle, C. (Bexhill)

      Newton, Tony

      Warren, Kenneth

      Nicholls, Patrick

      Watson, John

      Norris, Steven

      Watts, John

      Oppenheim, Phillip

      Wells, Bowen (Hertford)

      Oppenheim, Rt Hon Mrs S.

      Wheeler, John

      Osborn, Sir John

      Whitney, Raymond

      Page, Richard (Herts SW)

      Wolfson, Mark

      1181

      Wood, Timothy

      Tellers for the Noes:

      Yeo, Tim

      Mr. Michael Neubert and

      Young, Sir George (Acton)

      Mr. Mark Lennox-Boyd.

      Question accordingly negatived.
      Amendment proposed: No. 12, in page 1, line 10 after 'Council', insert
      'shall be replaced by a directly elected authority representing the area presently administered by the Greater London Council, such authority's functions and powers to be determined by Parliament following an enquiry by a Select Committee of the House of Commons into the functions and powers of the Greater London Council.'.—[Mr. Cormack.]
      Question put, That the amendment be made:
      The Committee divided: Ayes 210, Noes 233.

      Division No. 50]

      [12.37 am

      AYES

      Alton, David

      Dobson, Frank

      Anderson, Donald

      Dormand, Jack

      Archer, Rt Hon Peter

      Dubs, Alfred

      Ashdown, Paddy

      Duffy, A. E. P.

      Ashley, Rt Hon Jack

      Dunwoody, Hon Mrs G.

      Ashton, Joe

      Eastham, Ken

      Atkinson, N. (Tottenham)

      Evans, John (St. Helens N)

      Bagier, Gordon A. T.

      Fatchett, Derek

      Banks, Tony (Newham NW)

      Faulds, Andrew

      Barnett, Guy

      Field, Frank (Birkenhead)

      Barron, Kevin

      Fields, T. (L'pool Broad Gn)

      Beaumont-Dark, Anthony

      Fisher, Mark

      Beckett, Mrs Margaret

      Flannery, Martin

      Beith, A. J.

      Foot, Rt Hon Michael

      Benn, Tony

      Forrester, John

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

      Foster, Derek

      Benyon, William

      Foulkes, George

      Bermingham, Gerald

      Fraser, J. (Norwood)

      Bidwell, Sydney

      Freeson, Rt Hon Reginald

      Blair, Anthony

      Garrett, W. E.

      Boothroyd, Miss Betty

      George, Bruce

      Boyes, Roland

      Gilbert, Rt Hon Dr John

      Bray, Dr Jeremy

      Gilmour, Rt Hon Sir Ian

      Brown, Gordon (D'f'mline E)

      Godman, Dr Norman

      Brown, Hugh D. (Provan)

      Golding, John

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

      Gorst, John

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

      Gould, Bryan

      Brown, Ron (E'burgh, Leith)

      Ground, Patrick

      Bruce, Malcolm

      Hamilton, James (M'well N)

      Buchan, Norman

      Hancock, Mr. Michael

      Caborn, Richard

      Hanley, Jeremy

      Callaghan, Jim (Heyw'd & M)

      Hardy, Peter

      Campbell-Savours, Dale

      Harrison, Rt Hon Walter

      Carlile, Alexander (Montg'y)

      Hattersley, Rt Hon Roy

      Carlisle, Rt Hon M. (W'ton S)

      Heffer, Eric S.

      Cartwright, John

      Hicks, Robert

      Clay, Robert

      Hogg, N. (C'nauld & Kilsyth)

      Clwyd, Mrs Ann

      Holland, Stuart (Vauxhall)

      Cocks, Rt Hon M. (Bristol S.)

      Home Robertson, John

      Cohen, Harry

      Howell, Rt Hon D. (S'heath)

      Coleman, Donald

      Howells, Geraint

      Concannon, Rt Hon J. D.

      Hoyle, Douglas

      Conlan, Bernard

      Hughes, Dr. Mark (Durham)

      Cook, Frank (Stockton North)

      Hughes, Robert (Aberdeen N)

      Cook, Robin F. (Livingston)

      Hughes, Roy (Newport East)

      Corbett, Robin

      Hughes, Sean (Knowsley S)

      Corbyn, Jeremy

      Hughes, Simon (Southwark)

      Cowans, Harry

      Janner, Hon Greville

      Cox, Thomas (Tooting)

      John, Brynmor

      Craigen, J. M.

      Johnston, Russell

      Crowther, Stan

      Jones, Barry (Alyn & Deeside)

      Cunliffe, Lawrence

      Kaufman, Rt Hon Gerald

      Cunningham, Dr John

      Kennedy, Charles

      Dalyell, Tam

      Kilroy-Silk, Robert

      Davies, Ronald (Caerphilly)

      Kirkwood, Archy

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

      Knox, David

      Deakins, Eric

      Lamond, James

      Dewar, Donald

      Leigh, Edward (Gainsbor'gh)

      Dixon, Donald

      Leighton, Ronald

      1182

      Lester, Jim

      Rees, Rt Hon M. (Leeds S)

      Lewis, Ron (Carlisle)

      Richardson, Ms Jo

      Lewis, Terence (Worsley)

      Roberts, Allan (Bootle)

      Litherland, Robert

      Roberts, Ernest (Hackney N)

      Lloyd, Tony (Stretford)

      Robertson, George

      Lofthouse, Geoffrey

      Rogers, Allan

      Loyden, Edward

      Rooker, J. W.

      McCartney, Hugh

      Ross, Ernest (Dundee W)

      McDonald, Dr Oonagh

      Ross, Stephen (Isle of Wight)

      McGuire, Michael

      Rowlands, Ted

      McKay, Allen (Penistone)

      Sedgemore, Brian

      McKelvey, William

      Sheerman, Barry

      McNamara, Kevin

      Sheldon, Rt Hon R.

      McTaggart, Robert

      Shore, Rt Hon Peter

      McWilliam, John

      Short, Ms Clare (Ladywood)

      Madden, Max

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

      Marek, Dr John

      Silkin, Rt Hon J.

      Marshall, David (Shettleston)

      Skinner, Dennis

      Maxton, John

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

      Maynard, Miss Joan

      Smith, Cyril (Rochdale)

      Meacher, Michael

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

      Meadowcroft, Michael

      Snape, Peter

      Meyer, Sir Anthony

      Soley, Clive

      Mikardo, Ian

      Spearing, Nigel

      Millan, Rt Hon Bruce

      Speed, Keith

      Miller, Dr M. S. (E Kilbride)

      Steel, Rt Hon David

      Miscampbell, Norman

      Stott, Roger

      Morris, Rt Hon A. (W'shawe)

      Strang, Gavin

      Morris, Rt Hon J. (Aberavon)

      Straw, Jack

      Morrison, Hon C. (Devizes)

      Thomas, Dafydd (Merioneth)

      Nellist, David

      Thomas, Dr R. (Carmarthen)

      Oakes, Rt Hon Gordon

      Thompson, J. (Wansbeck)

      O'Brien, William

      Tinn, James

      O'Neill, Martin

      Townsend, Cyril D. (B'heath)

      Orme, Rt Hon Stanley

      Wainwright, R.

      Owen, Rt Hon Dr David

      Wallace, James

      Park, George

      Wardell, Gareth (Gower)

      Parry, Robert

      Wareing, Robert

      Patchett, Terry

      Welsh, Michael

      Pavitt, Laurie

      Wilkinson, John

      Pendry, Tom

      Williams, Rt Hon A.

      Penhaligon, David

      Winnick, David

      Pike, Peter

      Woodall, Alec

      Powell, Raymond (Ogmore)

      Young, David (Bolton SE)

      Prescott, John

      Radice, Giles

      Tellers for the Ayes

      Randall, Stuart

      Mr. Patrick Cormack and

      Redmond, M.

      Mr. Hugh Dykes.

      NOES

      Aitken, Jonathan

      Dunn, Robert

      Alison, Rt Hon Michael

      Durant, Tony

      Ashby, David

      Emery, Sir Peter

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

      Farr, Sir John

      Batiste, Spencer

      Favell, Anthony

      Beggs, Roy

      Fenner, Mrs Peggy

      Bellingham, Henry

      Fletcher, Alexander

      Bevan, David Gilroy

      Fookes, Miss Janet

      Biffen, Rt Hon John

      Forman, Nigel

      Boscawen, Hon Robert

      Forsyth, Michael (Stirling)

      Bottomley, Peter

      Forth, Eric

      Bottomley, Mrs Virginia

      Fox, Marcus

      Braine, Sir Bernard

      Freeman, Roger

      Brandon-Bravo, Martin

      Fry, Peter

      Brown, M. (Brigg & Cl'thpes)

      Gale, Roger

      Buck, Sir Antony

      Galley, Roy

      Budgen, Nick

      Gardiner, George (Reigate)

      Burt, Alistair

      Gardner, Sir Edward (Fylde)

      Butcher, John

      Gow, Ian

      Carlisle, Kenneth (Lincoln)

      Grant, Sir Anthony

      Clarke, Rt Hon K. (Rushcliffe)

      Gregory, Conal

      Colvin, Michael

      Griffiths, Peter (Portsm'th N)

      Conway, Derek

      Grylls, Michael

      Coombs, Simon

      Gummer, John Selwyn

      Cope, John

      Hamilton, Hon A. (Epsom)

      Corrie, John

      Hamilton, Neil (Tatton)

      Crouch, David

      Hampson, Dr Keith

      Dickens, Geoffrey

      Hannam,John

      Dorrell, Stephen

      Hargreaves, Kenneth

      Douglas-Hamilton, Lord J.

      Harris, David

      1183

      Harvey, Robert

      MacKay, Andrew (Berkshire)

      Haselhurst, Alan

      MacKay, John (Argyll & Bute)

      Hawkins, C. (High Peak)

      Maclean, David John

      Hawkins, Sir Paul (SW N'folk)

      McQuarrie, Albert

      Hayes, J.

      Madel, David

      Hayhoe, Barney

      Major, John

      Heathcoat-Amory, David

      Malone, Gerald

      Heddle, John

      Maples, John

      Henderson, Barry

      Marland, Paul

      Heseltine, Rt Hon Michael

      Marlow, Antony

      Hickmet, Richard

      Marshall, Michael (Arundel)

      Higgins, Rt Hon Terence L.

      Mates, Michael

      Hind, Kenneth

      Mather, Carol

      Hogg, Hon Douglas (Gr'th'm)

      Maude, Hon Francis

      Holland, Sir Philip (Gedling)

      Mawhinney, Dr Brian

      Holt, Richard

      Maxwell-Hyslop, Robin

      Hooson, Tom

      Mayhew, Sir Patrick

      Hordern, Peter

      Merchant, Piers

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

      Miller, Hal (B'grove)

      Howell, Ralph (N Norfolk)

      Mills, Iain (Meriden)

      Hubbard-Miles, Peter

      Mitchell, David (NW Hants)

      Hunt, David (Wirral)

      Moate, Roger

      Hunt, John (Ravensbourne)

      Montgomery, Fergus

      Hunter, Andrew

      Morris, M. (N'hampton, S)

      Hurd, Rt Hon Douglas

      Moynihan, Hon C.

      Jackson, Robert

      Murphy, Christopher

      Jenkin, Rt Hon Patrick

      Neale, Gerrard

      Jessel, Toby

      Needham, Richard

      Jones, Gwilym (Cardiff N)

      Nelson, Anthony

      Jones, Robert (W Herts)

      Neubert, Michael

      Jopling, Rt Hon Michael

      Newton, Tony

      Joseph, Rt Hon Sir Keith

      Nicholls, Patrick

      Kellett-Bowman, Mrs Elaine

      Norris, Steven

      Kershaw, Sir Anthony

      Oppenheim, Phillip

      Key, Robert

      Oppenheim, Rt Hon Mrs S.

      King, Roger (B'ham N'field)

      Osborn, Sir John

      Knight, Gregory (Derby N)

      Page, Richard (Herts SW)

      Knight, Mrs Jill (Edgbaston)

      Parkinson, Rt Hon Cecil

      Lamont, Norman

      Parris, Matthew

      Lang, Ian

      Patten, John (Oxford)

      Latham, Michael

      Pawsey, James

      Lawler, Geoffrey

      Peacock, Mrs Elizabeth

      Lawrence, Ivan

      Percival, Rt Hon Sir Ian

      Lee, John (Pendle)

      Porter, Barry

      Lightbown, David

      Powell, William (Corby)

      Lilley, Peter

      Powley, John

      Lloyd, Ian (Havant)

      Price, Sir David

      Lloyd, Peter, (Fareham)

      Proctor, K. Harvey

      Lord, Michael

      Raffan, Keith

      Luce, Richard

      Rathbone, Tim

      Lyell, Nicholas

      Renton, Tim

      Macfarlane, Neil

      Rhys Williams, Sir Brandon

      MacGregor, John

      Ridsdale, Sir Julian

      1184

      Rifkind, Malcolm

      Temple-Morris, Peter

      Roberts, Wyn (Conwy)

      Terlezki, Stefan

      Robinson, Mark (N'port W)

      Thatcher, Rt Hon Mrs M.

      Rossi, Sir Hugh

      Thompson, Donald (Calder V)

      Rowe, Andrew

      Thompson, Patrick (N'ich N)

      Ryder, Richard

      Thorne, Neil (Ilford S)

      Sackville, Hon Thomas

      Thurnham, Peter

      Sainsbury, Hon Timothy

      Townend, John (Bridlington)

      St. John-Stevas, Rt Hon N.

      Trippier, David

      Sayeed, Jonathan

      Trotter, Neville

      Shaw, Giles (Pudsey)

      Twinn, Dr Ian

      Shaw, Sir Michael (Scarb')

      van Straubenzee, Sir W.

      Shelton, William (Streatham)

      Vaughan, Sir Gerard

      Shepherd, Colin (Hereford)

      Viggers, Peter

      Shepherd, Richard (Aldridge)

      Waddington, David

      Shersby, Michael

      Waldegrave, Hon William

      Silvester, Fred

      Walden, George

      Sims, Roger

      Walker, Bill (T'side N)

      Skeet, T. H. H.

      Waller, Gary

      Smith, Tim (Beaconsfield)

      Ward, John

      Soames, Hon Nicholas

      Wardle, C. (Bexhill)

      Speller, Tony

      Warren, Kenneth

      Spence, John

      Watson, John

      Spencer, Derek

      Watts, John

      Spicer, Jim (W Dorset)

      Wells, Bowen (Hertford)

      Spicer, Michael (S Worcs)

      Wheeler, John

      Squire, Robin

      Whitney, Raymond

      Stanbrook, Ivor

      Wolfson, Mark

      Steen, Anthony

      Wood, Timothy

      Stern, Michael

      Yeo, Tim

      Stevens, Lewis (Nuneaton)

      Young, Sir George (Acton)

      Stevens, Martin (Fulham)

      Stewart, Allan (Eastwood)

      Tellers for the Noes:

      Stewart, Andrew (Sherwood)

      Mr. Tristan Garel-Jones and

      Stradling Thomas, J.

      Mr. Mark Lennox-Boyd.

      Taylor, John (Solihull)

      Question accordingly negatived.
      Dr. Cunningham: On a point of order, Mr. Chairman. I ask the Secretary of State to recognise that he and his Cabinet colleagues have just suffered a moral and humiliating defeat.
      Mr. Patrick Jenkin: It is worthy of note that the Labour party did not vote for the amendment to keep the Greater London council. It has changed course. The public will be interested to note that.
      To report progress and ask leave to sit again.—[Mr. Patrick Jenkin.]
      Committee report progress; to sit again this day.

Pound Note
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Sainsbury.]
12.50 am
Mr. Geoffrey Dickens: This debate, coming as it does before the end of 1984, ensures that the pound note will not be reduced to small change without at least a voice being raised in the House of Commons on behalf of the millions of people who, like me, believe that the pound note has become part of our heritage and must be saved. Having studied the speeches of Lord Glenarthur in another place this week, and recalling the words of the Chancellor of the Exchequer in his autumn Budget statement, may I say that the drastic decision to abolish our pound note is a financial decision that does not measure up to strict examination.
We are advised that an annual saving of £3 million will result. That is nonsense. It is within my knowledge that the sheer weight of the £500 bags of £1 coins will dramatically increase the transportation costs of foreign exchange, and inter-bank branch circulation will be more expensive. Banks supplying currency to industry and commerce to meet wage bills will have to pay more for security. It may take security officers two or three journeys from bank to vehicle against one at present, thus adding to their time and risk at each end of the contract. Storage of £1 coins is also a headache for the banks.
We hear today that job losses may occur in the paper producers and printers of banknotes. I ask the Government to reflect on the queues that will result at cash desks when the staff and customers have to deal with 10 or more coins in change for a £5 note. It is widely believed that to abolish the £1 note will cost £14 million a year rather than save £3 million. Against that background, the House is entitled to demand a financial inquiry before the pound note is withdrawn from circulation.
It cannot be argued that people will get used to the new pound coin in time. We have had it for months and it is unwelcome. The small pound coin hides itself away in the middle of our coin range. It is almost identical in diameter to the 5p and 20p coins, and is slightly larger—but not by very much—than the 1p coin. Our coinage is in a mess, derived from a mixture of inflation and decimalisation. The 50p and 10p coins are both larger than the £1 coin. Switzerland has a complete coin range, with the major coin—the five franc coin—as the largest, then down to two francs, one franc and half a franc. Even in France, the 10 franc coin is large and substantial. The United States coinage is sound. Charities, which rely on impulse donations of £1, £2 or £3 slipped into an envelope, claim that they will suffer. Many people cannot afford to give £5. This also applies to pensioners who like to slip £1 or £2 into birthday cards or letters to their grandchildren. London taxi drivers find the £1 coin confusing and they handle money all day long. For the elderly, we are creating a financial horror.
Bank headquarters are asking their branches to push the new £1 coins, but many people refuse to accept them. We are flying in the face of public opinion, and have produced a psychological devaluation of our respective currencies. Lloyd George introduced the £1 note when he was Chancellor of the Exchequer back in 1914. It was a state financial provision because of the war in Europe. The House may be surprised to learn that that happened during
1186
an Adjournment debate. Therefore, it is fitting that today I use the same parliamentary procedure in my endeavours to save the £1 note.
In the name of the people of this nation, I beg the Government to pause and reflect on public opinion, which is calling out to save the £1 note. Let the Government hold a financial inquiry, and if any doubts remain, let us have a referendum so that the House may have the benefit of the advice of the millions of our citizens who hold such affection for the £1 note.
12.56 am
The Economic Secretary to the Treasury (Mr. Ian Stewart): After the excitement that we have had today, I wish to deal seriously with the points made by my hon. Friend the Member for Littleborough and Saddleworth (Mr. Dickens) about a matter so important to all of us as our national currency. I begin by congratulating him on having obtained this debate at such an appropriate time, so that we can deal with the issues that he has put before the House.
My hon. Friend has made a number of important and telling points about the change from the pound in note form to the pound in coin form, and in particular he commented on public opinion. No Minister offers a referendum from the Dispatch Box because, as my hon. Friend knows, in our political system a referendum has been used only for the most major constitutional questions. In recent times, it was used on the question of membership of the European Community and it was proposed in the case of the Scottish and Welsh Assemblies, all of which were constitutional matters. We do not deal with our affairs by referendum. However, it is not on those grounds that I must resist the beguiling plea to consult the public in that way. I do so because of the nature of the problem of changing currencies.
I entirely accept my hon. Friend's comments that there is an untidiness about the structure of our coinage. Unfortunately, after the period of rapid inflation that we suffered in the 1970s, the existing structure of the coinage was no longer convenient because some of the coins were the wrong size in relation to their purchasing power. My hon. Friend pointed to Switzerland, which has a more self-evident graduated currency. That is enviable, but it is no accident that it has happened in a country such as Switzerland, which has not suffered the ravages of inflation and has been able to maintain such a pattern. I have no immediate further proposals about alterations in the currency, but I assure my hon. Friend that I shall take serious note of what he says about the structure of the currency. It may be that, in the years ahead, we shall consider that further changes are needed.
We have responded to a number of the difficulties caused by the size of the coins already. The introduction of the 20p coin was a good example of this. When the lop coin was doing service on a much larger scale, unless a 50p coin was offered in change for a pound for a very small purchase, one was apt to get nine lop coins that formed an extremely inconvenient cylinder in one's pocket. Therefore we introduced a 20p coin to reduce some of the weight. But the 20p coin was not popular when we introduced it, and had we at the time had a referendum or a public opinion poll, or whatever might do service for that, it is very likely that the verdict would have gone against the coin. It certainly would have gone against the

1187
50p coin 15 years ago, when that was introduced. But after a short while the 50p coin was found to be a very useful part of the currency.
If we go back a bit further to the introduction of the Treasury note in 1914, to which my hon. Friend alluded, we know that there would have been an absolute outcry if it had not been the beginning of the war. The note was introduced then because of the emergencies involved in the war breaking out. But people at that time felt that to have the pound in the form of a piece of paper was a great insult to the currency.
I am sure that my hon. Friend will remember that a few years ago the size of the pound note shrunk. There were all sorts of disparaging references to pieces of paper like soap coupons, and so on. But concern is now expressed about that same shrunken pound. Although cost is a significant factor in the decision, it is not the reason that triggered it. With the persistent inflation of the 1970s, the purchasing power of our units of currency fell to a point at which their usage changed. By 1976, the pound's purchasing power was less than that of the 10 shilling note when it was withdrawn from circulation. Of course, it is considerably less than that again today. Indeed, the purchasing power of the pound today is about equivalent to that of the half-crown when I was at school. In those days people were not saying that they must have a half-crown note. We managed pretty well without such a note. Of course, in those days the 10 shilling note was worth much more than the pound note is today.
Because of the change in the purchasing power of the pound note, its usage has also altered, particularly in recent years. No hon. Member could say that pound notes are not now in a much dirtier state, and are more often torn and damaged than they were a few years ago. That is because people no longer keep pound notes carefully in a separate segment of a wallet or in a hip pocket as they used to, separate from their coins. They tend to keep them in their pockets or purses, alongside coins, and so the notes suffer. If one looks at the issue in that way, paper is not a very satisfactory material for something that is being used as a coin.
Various comments have been made about the possibility of doing more to maintain the quality of notes in circulation. We have obviously looked at many of the options. A year ago my hon. Friend the Member for Shipley (Mr. Fox) suggested plastic notes. But of course forgery is an absolute bar to that solution. We have looked at other means of dealing with the problem, because the servicing of the note issue has become increasingly expensive as notes have been used in that way. But we have not found a satisfactory solution. It is because of the way in which pound notes are now used that we were led to this decision. They now circulate much more between individuals and retailers without going back through the banking system where they could be replaced by new notes.
It is not just a question of the cost of replacing the notes through printing new ones, but also of the notes staying longer in circulation than before, without coming back centrally for renewal. That situation has been deteriorating over the past few years. It was in response to that change that the Government decided that they should introduce the pound coin. It is not some extraordinary decision by the Government alone. It has happened in other countries. In France a 10 franc piece was introduced in 1974, and no notes of that value are now issued. The Germans have a
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five deutschmark piece, worth about £1·40, which was introduced in 1974 and there are now no notes of that value in Germany. The Japanese introduced a 500 yen coin, worth about £1·70 in 1982, and the note has long ceased. The Swiss five francs is worth about the same, and that has been around for many years. It is not an isolated decision. Other countries are also making the same decision. For example, Australia and Norway are introducing new, higher value coins in 1984.
My hon. Friend made a fair comment about the difficulties faced by people using the pound coin. It is sometimes criticised as being too heavy. It is not as heavy as the 10p piece, which is worth only a fraction of its purchasing power. Its thickness and edge, apart from its different colouration, are deliberately designed to make it easily distinguishable by touch from other coins. As they come into use more generally, they will be easy to distinguish—especially by the blind, whose interests we consulted before taking a decision. They thought it a great improvement on the note.
My hon. Friend mentioned that people liked to put a pound note in an envelope at Christmas or send it to a charity. I assure him that it will not disappear overnight. It will be around this Christmas and next Christmas. The Chancellor of the Exchequer said that it would continue for at least a year. I cannot say more than that as we shall have to see how things progress. It will be around at this time next year, so it is not a sudden change. In fact, by this time next year it will be two and a half years since the pound coin was circulated, which is a long transitional period.
Mr. Dickens: Is my hon. Friend saying that we shall print more pound notes during 1985?
Mr. Stewart: No, that is not what I said. The issue of new pound notes will cease at the end of 1984. However, there are more than 500 million notes in circulation, and they will, no doubt, continue to be in circulation for some considerable time. There will not be a sudden change on 1 January from all notes to all coins. The pound note will remain in circulation for at least a further year.
The pound coin is already increasing rapidly in circulation and it is only when it comes into common usage that it will be more readily distinguished by the public and its advantages will be fully realised. Quite apart from the convenience to the blind, there are specific applications for a coin of that value that have not been fully taken into account for the very good reason that not sufficient of them have been in circulation to encourage those who have meters and vending machines to convert them. For the sake of those who have gas and electricity meters, it will be convenient to have a £1 coin, which is not too large, and which will save the collection of a large number of smaller value coins.
Many businesses held back converting machines until the pound coin was in wider use. The Royal Mint has issued more than 200 million pound coins, and more coins are being produced. I believe that, in a few years' time when people have become used to the pound coin, they will like it as they have learnt to like many other coins which were initially unpopular. At the time the 50p and 20p coins were issued, there was substantial resistance to them, but I do not receive any letters of complaint about them now. It is always difficult to make a transition of this kind, because the public are naturally conservative about

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currency. They are always reluctant to have any currency changes. If we had had to conduct a referendum or public opinion poll on currency changes, we would still be using groats and nobles, or the Scots among us would be using placks, bawbees and unicorns. There has always been an inherent conservatism about the currency.
The Government have a duty to ensure that the currency is maintained not only in good condition but in accordance with the current needs of individuals, shopkeepers, the financial system, and so on. I assure my hon. Friend that all those factors have been considered. The decision might well have been taken several years ago, but we felt that it was right to wait until there was a clear-cut case. We have allowed an unusually long transitional period for circulation of the coin and note together. The decision was right. The factors that led us to make the decision were justified and they have not changed.
I understand the point that was so well put by my hon. Friend. The public are instinctively suspicious and, therefore, hesitant about using new coins until they have been in circulation long enough and in sufficient quantities to be widely familiar. I accept that, until recently, that has not been the case with the pound coin. With increased usage, the pound coin will be a much more useful and respectable part of the currency than initial reactions suggested. I take on board my hon. Friend's point about the relative size and weight of coins. Those factors must be considered. As I said, already we have introduced a much lighter 20p coin to reduce the great weight of 10p
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coins. We shall continue to examine all the options. It is helpful for the House to have an opportunity to discuss the questions raised by this change.
I genuinely thank my hon. Friend for giving us an opportunity to consider these matters. I frequently discuss the future of the coinage with my right hon. Friend the Chancellor of the Exchequer, because he is the Master of the Mint and has overall responsibility for the nation's coinage and currency. My responsibilities are more to do with day-to-day matters of the Royal Mint. We take account of the public impact of changes we make and carefully research coin specifications before introducing a coin into the currency. At that time it was necessary to make the change.
Some of the reactions have been exaggerated. I am not accusing my hon. Friend of that. It is frequently said that people will not take the pound coin and that most people regard it as highly unsatisfactory. There have been one or two tests. One major store found that less than 3 per cent. of its customers actively disliked the coin. The Post Office test showed that that applied to an even smaller proportion of people. It is an instinctive reaction to a new coin and not one that attaches to the pound coin as distinct from other new coins.
I hope that my hon. Friend will accept that the factors that he mentioned have been and always are taken into account when any decisions are made affecting our currency. There are sound reasons for our decision in this case.
Question put and agreed to.
Adjourned accordingly at fifteen minutes past One o'clock.

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

The Lord Bishop of Birmingham
Hugh William, Lord Bishop of Birmingham—Was (in the usual manner) introduced between the Lord Bishop of Derby and the Lord Bishop of Southwark.

Law and Order in Wartime
2.43 p.m.
Lord Mottistone: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they will consider issuing guidance to civil defence community leaders about law and order in wartime.
Baroness Trumpington: My Lords. volunteers have an important role in civil defence. but we intend that law and order should remain the responsibility of the Government and the police. Detailed guidance has been issued to local authorities since 1972 covering all aspects of local authority civil defence functions. Revised information will be published next year.
Lord Mottistone: My Lords, is my noble friend aware that these questions of law and order are of great concern to the civil defence community workers, but that their requests for information from chief constables meet with varied response? Do I take it from what my noble friend said in her closing remarks that there will be consistent guidance from chief constables in future as a result of guidance from the Home Office?
Baroness Trumpington: My Lords, we are considering with the police how information can usefully be made available to civil defence volunteers about police wartime duties and the maintenance of law and order. However, as I have said, these are essentially matters for the police.
Lord Renton: My Lords, while accepting the view expressed by my noble friend that law and order should be the responsibility of central Government and of the police, can she tell us whether the consolidated directions and guidance being given to local authorities will contain references to this matter of co-operating with the police?
Baroness Trumpington: My Lords, the consolidated circular on emergency planning already contains guidance on the wartime duties of the police.
Lord Inglewood: My Lords, can my noble friend be clearer than in her first reply? She spoke about the police but we have already the chief executive of the county council who is, apparently, the chief in some counties. Then we have the senior soldier overlaying the chief executive; and we may also have the chief constable, too. All three cannot be the leader. Who is to be the leader?
Baroness Trumpington: My Lords. I thought I had made it clear in my original Answer that the question of law and order is primarily the responsibility of the Government and the police. With regard to consolidated guidance to local authorities, I think I have already dealt with that, too.
Lord Orr-Ewing: My Lords, when my noble friend circulates the new instructions to local authorities will she point out that their responsibilities also include disaster relief? Will she remind them that in Bhopal 2,500 people have died and many others have suffered and that civil defence and disaster relief go together? Those who put their heads in the sand and pretend there is no need for civil defence should be reminded of those facts in future circumstances.
Baroness Trumpington: My Lords, my noble friend is, in fact, not correct. The Civil Defence Act is confined to measures against enemy attack, but we acknowledge that the planning staff of local authorities would undertake the co-ordination of plans for handling peacetime emergencies, and we intend to amend the Act to enable civil defence resources to be used for this purpose. In point of fact. a Bill is ready for a Private Member to take up. Perhaps my noble friend would care to do so.
Lord Murton of Lindisfarne: My Lords, may I suggest to my noble friend that it would be a good thing if it was not a Private Member's Bill and it was the Government which took action in this very important matter?
Baroness Trumpington: My Lords, the Home Office business of the Government is such that, while the Government entirely support and would welcome any such Bill, there is no time in the planning of legislation for it to be a Government Bill this year.

HMS "Conqueror": Log
2.47 p.m.
Lord Molloy: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they will publish a White Paper concerning the loss of the navigator's log book of HMS "Conqueror".
The Parliamentary Under-Secretary of State for the Armed Forces (Lord Trefgarne): No, my Lords.
Lord Molloy: My Lords, does the Minister recall that when I first raised the matter in the House he agreed that there were such serious implications in it

273
that it ought to be thoroughly examined from the point of view of safety concerning not only HMS "Conqueror" but also other of Her Majesty's ships? since then there have been allegations in the press and reports of conflicting statements made by senior and junior officers; so some cannot be telling the truth. That is causing concern. Therefore, because of the security aspect and to clear up the issue properly for all involved, will the noble Lord reconsider his short and unnecessarily abrasive Answer?
Lord Trefgarne: My Lords, I am afraid that we have already released as much information on this issue as we can, consistent with national security. I would draw the noble Lord's attention to the Written Answer which I offered to my noble friend Lord Mottistone on 4th December.
Lord Shinwell: My Lords, would the noble Lord care to enlighten me on this subject? I require a bit of information. My memory goes back some 80 years or so, which is a considerable time. This subject has been mentioned several times. What was it all about?
Lord Trefgarne: My Lords, strangely my own memory has now deserted me, too!
Lord Mottistone: My Lords, is my noble friend aware that, sadly, the losing of documents has happened in the past and will no doubt happen again in the future? Is he further aware that I was court-martialled and found guilty for my ratings' losing confidential books back in the 1940s, and survived? These things happen. Is he also aware that I understand I was court-martialled in order to encourage those of my colleagues who might lose their books not to do so?
Lord Trefgarne: My Lords, as far as I know, there are no plans to offer Commander Wreford-Brown a peerage.
Lord Hatch of Lusby: My Lords, will the noble Lord confirm that this is not a question of just one log book, hut of six documents, and that those documents were, it is said officially, delivered to the Ministry of Defence intact after the debriefing of the crew of the "Conqueror"? Is it not also the case that his own Secretary of State for Defence publicly declared that the signals log was destroyed in the period up to February 1983 under the authority of the Defence Council? If that is so, is there not an overwhelming case for the Government to publish a White Paper or a further explanation as to how they and the department which the Minister represents have so conveniently managed to lose logs which contain all the signals concerning the action of "Conqueror" before and after the sinking of the "Belgrano"?
Lord Trefgarne: No, my Lords, because all signal logs are destroyed under the authority of the Defence Council, as described by my right honourable friend.
Lord Molloy: My Lords, I do not want to make exceptionally heavy weather of the matter, but does the noble Lord consider that, in as much as there is
274
concern among personnel serving on Her Majesty's ships, some of whom may not see the matter altogether with the humour that the Minister does, an examination of some sort should be made, with particular emphasis on the security angle from the point of view of those personnel, the Navy and the nation?
Lord Trefgarne: My Lords, a board of inquiry was convened to inquire into those matters. The outcome was reported to the other place by my right honourable friend the Secretary of State and to your Lordships by myself.
Lord Hatch of Lusby: My Lords, surely that was not a full account of what occurred. Is it not the case that as the board of inquiry failed to find any trace of the logs, the matter has now been handed over to Scotland Yard for further investigation? What is the noble Lord's latest news about the Scotland Yard investigation?
Lord Trefgarne: My Lords, I am afraid that I have no further announcement to make on that matter.
Lord Murton of Lindisfarne: MY Lords, is there any fear that "Belgrano-mania" is a contagious disease?
Lord Trefgarne: My Lords, that would not, I think, be a matter for me.

Birds of Prey: Registration
2.52 p.m.
Baroness Nicol: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they will make a statement on the effectiveness of Section 7 of the Wildlife and Countryside Act 1981 in preventing the illegal taking of birds of prey from the wild; and whether they will review the procedures for registering captive birds of prey with the Department of the Environment.
The Parliamentary Under-Secretary of State, Department of the Environment (The Earl of Avon): My Lords, the purpose of the registration scheme introduced by Section 7 of the Wildlife and Countryside Act 1981 is to prevent eggs and birds illegally taken from a nest being passed off as captive bred. We consider that the scheme, coupled with the checks undertaken to verify captive breeding, acts as a strong deterrent to illegal taking from the wild. Its operation is being kept under review.
Baroness Nicol: My Lords, I am grateful to the Minister for that reply. Relating to the species most at risk, being golden eagle, goshawk, merlin and peregrine, would the noble Earl make a statement about the number of young that were captured during this year, 1984? It is believed that the numbers were heavy. Is the Minister aware that in the three years since 1982—that is, 1982, 1983 and 1984—the total number of peregrines stolen was 219, of goshawks 23 and of merlins 14? Would he agree that this throws some doubt on the working of the Act?
The Earl of Avon: My Lords, I was aware of some of the statistics that the noble Baroness has given me. She will no doubt have seen the exchange on 3rd December. Of course, this is a new scheme. When the registration scheme was introduced, it broke completely new ground. No one envisaged at the time the number of birds kept or the volume of trade in birds. Furthermore, the department was reliant upon information provided by keepers, which was not always as accurate as we would have liked. However, I have looked into this carefully and I do believe that as the data basis improves our knowledge we shall become more efficient in this particular sphere.
Lord Chelwood: My Lords, on another aspect of this Act, is there not a continuing risk of serious damage being done to wildlife habitats until what is known as the three months' loophole is blocked? That is something which both Government and Opposition wish to see done. Is it not unfortunate that in another place a Private Member's Bill (which I understand is not yet printed but the contents of which, nonetheless, have been broadcast) includes this amendment but also three others, at least one of which is highly controversial? Is there not, therefore, in these circumstances, a serious risk that the amendment which everybody wants is likely to fall by the wayside?
The Earl of Avon: My Lords, I understand my noble friend's question. Obviously, I am not yet in a position to comment on this Bill as it has not been published. I agree with my noble friend that the chances would obviously be better for the clause which he has in mind if the Bill did not contain other controversial matter.
Viscount Massereene and Ferrard: My Lords, is my noble friend aware that one of the greatest dangers to these rare birds in their natural habitat is the free access of hikers to the hills in the Highlands? They now come in great numbers, and that causes great disturbance to these rare birds. I do not know what one can do about it.
The Earl of Avon: My Lords, I cannot accept my noble friend's criticism of hikers in this way, but, of course, I understand the point he is making. I believe the Royal Society for the Protection of Birds does a great deal of work in this particular sphere.
Baroness Nicol: My Lords, does the Minister agree that the greatest threat is theft? This is because the value of these birds on the market is extremely high. In some cases it is many thousands of pounds. Can the Minister make a statement on the level of fines imposed on those offenders who have so far been brought before the courts? Can he also tell us whether central records will be kept so that the Secretary of State can measure whether the regulations need changing in the future?
The Earl of Avon: My Lords, as far as the fines are concerned, the maximum fine is £2,000 for an offence under Section 7. For other offences, it is £400. In recent publications I have seen some cases reported which show that some of the fines that are being
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imposed are quite severe. During our monitoring we shall of course make sure we have a record of what is going on.

Scottish Banknotes: Availability
2.57 p.m.
Lord Stodart of Leaston: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether there are any legal barriers to making Scottish banknotes available in England.
The Parliamentary Under-Secretary of State, Department of Health and Social Security (Lord Glenarthur): My Lords, the note issuing powers of Scottish banks under the Bank Notes (Scotland) Act 1845 are confined to Scotland. By virtue of Section 1 of the Currency and Bank Notes Act 1954, together with Section 11 of the Bank Charter Act 1844, only the Bank of England may issue notes in England and Wales.
Lord Stodart of Leaston: My Lords, if my noble friend accepts the fact that there is a fairly widespread disappointment at the withdrawal of the £1 note, might he not consider that legislation which was introduced 130 years ago might not be totally relevant to present-day circumstances? Does he not regard it as slightly absurd that branches of Scottish banks in London or elsewhere in England are allowed to accept Scottish notes and give English ones in return, but are not allowed to re-issue Scottish notes? People might want them because they are slightly cleaner than the English ones and made of better paper. Would he not, finally, agree that it is surely the philosophy of this Government that if there exists a demand and somebody is ready to supply it, that supplier should be encouraged?
Lord Glenarthur: My Lords, coming, as I do, from Scotland, I share some of my noble friend's concern. But the answer to his first question is no, I am afraid not. Such a measure as he suggests would represent a radical departure from the long established policy of supporting the Bank of England's supervisory role in the banking system. The Government's interest is in the effective management of the currency as a whole. I do not think that any useful purpose would be served by allowing Scottish banknotes to be issued south of the Border.
With regard to the issue of Scottish notes through the head offices, or whatever offices they may be, of the Scottish banks in England, the answer is, no. The restructured group will, in the case of the Royal Bank of Scotland, be able to issue its own notes only in Scotland and only the Bank of England can issue notes in England. So I am afraid I cannot offer much help to my noble friend.
Baroness Burton of Coventry: My Lords, reverting to my original Question on 22nd November, when the noble Lord told the House that the Government had

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consulted no consumer organisations on this matter of ceasing to issue the £1 note, can he give us some further information? Does he recall that in the debate last Monday the noble Lord, Lord Barnett, asked a question to which I do not think the Minister replied? Does he recall that the question from the noble Lord, Lord Barnett, concerned the system in the Treasury known as "roundings"—a description of the system used in the Treasury by which each line of figures was rounded up to the nearest million? The noble Lord, Lord Barnett, thought that the estimated extra cost of £3 million in issuing the £1 notes could well be swallowed up in these roundings. For the benefit of those of us not so well versed as the noble Lord, Lord Barnett, will the Minister reply?
Lord Glenarthur: My Lords, I am not sure that I can give the noble Baroness the answer that she wants on rounding now. I am sorry that she was not able to take part is that particular exchange herself. So far as consultation is concerned, the main point, I think, is that the consultation took place before the coin was actually issued. I cannot add more to what I have already said in reply to the questions raised on this issue, because the consultations did take place before the coin was first issued. There was, as I say, no consultation before the decision to withdraw the note was announced.
Lord O'Brien of Lothbury: My Lords, is the noble Lord the Minister aware that the issue of banknotes is a highly profitable activity and that, in so far as the Bank of England derives profits from its issue of notes, they accrue to the Exchequer? Is he also aware that the issues of banknotes by the Scottish and Northern Ireland banks are very small, controlled by law and a survival of many private issues of banknotes in earlier days? Does he not agree that it would be entirely inappropriate to enlarge the powers of those private banks to issue banknotes in order to supplement the circulation in this country?
Lord Glenarthur: My Lords, yes. I agree with what the noble Lord, Lord O'Brien, says. There is the added fact of what one might call an interest free loan to the Exchequer through meeting the backing requirement that is necessary in the case of the Scottish notes.
Lord Beswick: My Lords, if the noble Lord says that he agrees with the noble Lord, Lord O'Brien, will he tell the House how he reconciles the statement of the noble Lord, Lord O'Brien, that it is profitable to issue £1 notes, or notes, with the statement that there will be a loss of £3 million if we continue to issue them?
Lord Glenarthur: My Lords, the cost relates to the returning of the notes to the bank, because, as we discussed the other day, they get extremely tatty and require to be replaced. That was the point that I made in the first place.
Lord Campbell of Croy: My Lords, as the notes issued by the three Scottish banks are legal tender south of the Border, have the Government arranged, perhaps through the Bank of England, for an increased production of these notes? Because there is no doubt that if the present plan is carried forward a great many will be brought south of the Border.
Lord Glenarthur: My Lords, that is a matter for the banks in Scotland themselves.
Lord Leatherland: My Lords, will the noble Lord the Minister send me a few of these notes so that I can see what they look like?
Lord Glenarthur: My Lords, in exchange for coin, certainly.
Lord Hughes: My Lords, will the Minister be pleased to hear that not every Scot will be dissatisfied with his original Answer? If what the noble Lord, Lord Stodart of Leaston, was asking did take place, Scottish banknotes, like Scottish beef, might be easier to find south of the Border than in Scotland.
Lord Glenarthur: My Lords, I note what the noble Lord says, as I am sure does my noble friend also.
Lord Inglewood: My Lords, can my noble friend say what is the position in respect of the Isle of Man paper? Does it circulate south of the Border like Scottish notes? Or is it different?
Lord Glenarthur: My Lords, not without notice.
Lord Tordoff: My Lords, is it not a fact that the Isle of Man is producing plastic notes?
Lord Glenarthur: My Lords, yes. They have produced a plastic note, but that is another question.
Lord Glenamara: My Lords, why do the Government persist with this change-over which apparently no one except the Treasury wants, particularly in view of figures published by the banks a few days ago which show that their additional costs in handling coins will far outweigh the alleged saving to the Treasury? In view of this, will not the Government reconsider the matter?
Lord Glenarthur: My Lords, no. I think that the facts speak otherwise. The circulation of the coin has increased by 25 per cent. in the last year.
Lord Stodart of Leaston: My Lords, may I encourage the noble Lord opposite who asked if he could see a Scottish banknote? If it is of interest to him, I may say that the last time that I showed 10 Scottish banknotes to an American I was able to get ten guineas from him in return.

Business
Lord Denham: My Lords, with the leave of the House, I should like to say a brief word about the timing of this afternoon's debate standing in the name of the noble Lord, Lord Cledwyn of Penrhos, to which your Lordships have decided to apply the five-hour time limit that the House approved in January of this year. On the principle that the mover is allowed approximately 20 minutes and that the Minister should rise to reply not less than 25 minutes before the scheduled end of the debate, other speakers in the debate should limit their speeches to a maximum of 8½

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minutes. If any noble Lord were to speak at greater length, he would inevitably do so at the expense of later speakers in the debate.

Televising the Proceedings of the House: Select Committee
3.6 p.m.
The Chairman of Committees (Lord Aberdare): My Lords, I beg to move the Motion standing in my name on the Order Paper.
Moved, That, as proposed by the Committee of Selection, the Lords following, with the Chairman of Committees, be named of the Select Committee on Televising the Proceedings of the House:

Ardwick, L.

Aylestone, L.

Cathcart, E.

Henderson of Brompton, L.

Orr-Ewing, L.

Phillips, B.

Ponsonby of Shulbrede, L.

Stoddart of Swindon, L.

Swinton, E.

Thomas of Swynnerton, L.

Winstanley, L.

That the Committee have power to adjourn from place to place and to report from time to time;
That the Committee have power to appoint Specialist Advisers;
That the Minutes of Evidence taken before the Committee from time to time be printed and, if the Committee think fit, be delivered out;
That the Committee do meet on Wednesday the 19th of December at four o'clock.—(Lord Aberdare.)
Lord Renton: My Lords, I wonder whether I might ask the Lord Chairman why it is that those who voted against the Motion in favour of the experiment of televising the House seem to be so under-represented on this Committee? My noble friend Lord Thomas of Swynnerton voted against. It may be that one other did. It would, therefore, seem that they will be heavily outnumbered. I wonder why this is so. Can the noble Lord explain?
Lord Aberdare: My Lords, the House accepted by a handsome majority the recommendations of the Committee on Sound Broadcasting. That recommendation was that the committee itself should be enlarged to take in representatives of the Front Benches and the Cross-Benches. That would have been sufficient to satisfy the vote. In fact, it was decided, in view of the discussions that took place on the Motion, that we should add two representatives of those who had voted against the Motion. As the noble Lord has pointed out, those two people are now on the Committee. In general, I am certain that whether any of your Lordships voted for or against this particular Motion they are perfectly capable of exercising their critical facilities to make sure whether the experiment is a success or not.
On Question, Motion agreed to.

Unemployment
3.8 p.m.
Lord Cledwyn of Penrhos Lord Cledwyn of Penrhos rose to move to resolve, That this House recognises the human misery and waste caused by current unemployment of labour and resources; deplores the lack of urgency shown by Her Majesty's Government in tackling this problem and calls for a statement of the positive steps to be taken to enable available labour to be used to meet undoubted national needs.
The noble Lord said: My Lords, the Government are faced with a number of problems at this time, some of which are of their own making and others for which they cannot be held responsible. Their task is to try to find solutions for these problems. That is their job. They pledged themselves to do so in two successive general elections. For a time at least, a Government can blame their predecessors—and some Members opposite are expert at that. But whatever the merits or otherwise of the previous Administration prior to 1979, it is too late for that now. This Government under Mrs. Thatcher have been in power for 5½ years. Like "The Mousetrap", the play goes on and on. It is true that the cast has changed substantially. Some star actors are now resting. But the leading lady is still on stage, for the time being at least.
By far and away the biggest problem facing the nation is that of unemployment. It has trebled to over 3¼ million under this Government. And after a period of misplaced faith and unrealised hope many members of the party opposite have begun to worry about it. They are of course right to do so, as many of the ills in our society stem from it: the growing lack of respect for law and order; the crime rate: the safety of our streets; even the problem of drugs and drink. All these are acknowledged to bear some relationship to the failure of so large a number to find work or to have a prospect of work.
There are also wider costs and consequences to society. They are reflected in increased demand on doctor services, on social services departments, on organisations such as the Samaritans and the NSPCC. The Survey of Social Service Departments for 1983 had this to say:
"We have found evidence that long-term unemployment puts individuals under great strain and is a major cause of family breakdown … We can only repeat our past warnings that society must not be surprised when some young people feel resentful, apathetic and resort to delinquency, drug addiction and drunkenness because they feel we do not afford them the chance to become worthwhile citizens".
It is a grim warning.
The statistics of unemployment are well known to the House and I shall therefore only summarise them briefly. As I have just said, the official figure of unemployed stands at over 3,250,000. An analysis of this shows that it is deep-seated, for 369,000 have been unemployed for more than three years, nearly 700,000 for over two years, and 1,047,000 have been unemployed for more than a year. There are other, equally distressing figures. For example, it is estimated that 63 per cent. of 16- and 17-year-olds will not find paid work by the end of this year, and 40 per cent. of the total out of work are under 35 years of age. This is the human misery and waste that we refer to in our Motion.
In a speech yesterday, the Prime Minister rightly called for a reduction in waste. This is what we are stressing today: that there is a waste of experience and a waste of young lives; and the longer the period of unemployment, the greater the deprivation and insecurity. In 1981 there were 15 million people living on the margins of poverty; and of these, 2.8 million were living on incomes below supplementary benefit rates—a level below which Parliament believes no one should fall. This, in 1981, was three-quarters of a million more than in 1979, and things have got much worse since then. By December 1983 the number of people living on supplementary benefit had risen to 7.2 million. The number of people living in poverty as a result of unemployment has trebled since 1979. This has occurred solely among those of working age and it is a consequence-a direct consequence—of the Government's economic policies.
According to a Low Pay Unit paper, in 1983 the United Kingdom was found to be in breach of Article 4 of the European Social Charter, which states:
"There is a fundamental social and economic right of workers to a remuneration which will give them and their families a decent standard of living".
The "decency threshold" set by the council is a wage equivalent of 68 per cent. of average adult earnings, or £108.30 in 1984. We should be ashamed of that. Of course, there has been great confidence in the economic policies among some members of the Government, including the Prime Minister. We were told that the policies were right: and we were told that the policies would work, even though all the signs pointed in another direction. This is the lack of urgency to which we refer in our Motion.
The Chancellor of the Exchequer worries me. Last year he said on "Weekend World":
"There is every prospect that by next year"—
that is, 1984—
"we will see the start of a fall in the level of unemployment".
Not so long ago—I think it was in September—the Chancellor. when charged with the size of this problem, said:
"Crisis? What crisis? There is no crisis".
I say to him, to noble Lords opposite, and to the House, that it is a crisis for that skilled man, if he has been eating his heart away because he thinks he is no longer needed; it is a crisis for his wife and for his children; it is a crisis for that young boy or girl who leaves school without the prospect of a job; and, while I value youth training, it is a crisis for the young people if, at the end of their training, there is no job for them.
Furthermore, it is a crisis for the country when so many of our people have become increasingly desperate or hopeless and when the most priceless of all our resources—our men and women, with all their skills and their aspirations—are sacrificed on the altar of economic doctrine. Lest it be thought that I am exaggerating—and I do not want to do that in this debate—I shall call one quotation in aid. Here it is:
"The dole today is better than anyone could have dreamed of in the 1930s—we are able to cushion the hardships of the unemployed. But the social waste is still the same, the human debilitation just as bad, the affront to dignity just as tragic".
These words were uttered by Mr. Peter Walker two weeks ago—Mr. Walker, a member of the
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Government, a Cabinet colleague of noble Lords opposite. I shall return to Mr. Walker a little later.
But the fact is that he is at odds with the great majority of his colleagues and with the Prime Minister. They are obdurate in their refusal to modify their economic policies and their reliance on monetarism. This is well known, but how successful have these policies really been? The Government's message over the past five years has been: "Put up with these difficulties; and once we've got inflation right, things will get better and unemployment will start to come down". It was on that very prospectus that the Government won two general elections. They have rested their policy on the control of two arbitrary statistics—the money supply and the PSBR—and both have failed as the real economy of Britain has deteriorated.
The Government claimed that unemployment would come down if inflation was reduced. It is true that inflation has fallen, but unemployment has gone on rising and all predictions indicate that it will continue to rise. If there is any evidence to the contrary, this House will require to hear that evidence from the noble Lords who are members of the Cabinet and who are speaking in this debate.
The Government have blamed unemployment on the world recession, and of course we recognise that the recession affects every country. But our unemployment rate rose more than twice as much as the rest of the OECD, between May 1979 and May 1984. In short, the Government's medium-term financial strategy is not working; the economy is not responding to it. The Prime Minister is on record as saying:
"There will he no change in our economic policies, because they are absolutely right".
The Prime Minister's strength is her determination; her weakness is her obstinacy; and in due course she must change her policies or she must go. It is no use carrying a well-thumbed copy of the 1944 White Paper on unemployment in your handbag if you do not read it. She reminds me of a fundamentalist preacher who was always preaching from the more lurid texts of the Old Testament and completely forgetting the messages of the New Testament.
She says that the Government's policies are those of the White Paper. But she has forgotten its foreword, which said:
"The Government accept as one of their primary aims and responsibilities the maintenance of a high and stable level of employment";
and further:
"Public investment should be used as an instrument of employment policy".
I can imagine Lord Beveridge's reaction if he thought that unemployment was one in six of the labour force, with no hope of improvement in the foreseeable future. He would have been horrified.
The Government are to be condemned therefore for operating unworkable policies and for accepting—indeed, for creating—unemployment as a part of those policies. By so doing they have created a huge problem, and it is necessary to stress that it is not one which can be quickly or easily solved. There is no short cut to the days of full employment. What we

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want to see, and what we are asking for in this debate, is a clear and constructive start on the road back to full employment.
The Youth Training Scheme, the efforts of the Manpower Services Commission, of which the noble Lord, Lord Young, was a distinguished chairman, and even the Voluntary Community Work Scheme which the Secretary of State for Employment is said to be planning—all these are laudable; but unless the Government are prepared to modify their economic policy, all these are sedatives and not remedies. They will not bring the country back on to its feet.
Let me put this plainly to the Government in this debate. There is a very strong feeling in this country—and it is a feeling which cuts right across party political boundaries—that the Government should move quickly to rectify their mistakes before it is too late.
Many constructive proposals have already been made and they have come from several sources. A Select Committee of this House under the chairmanship of the noble Baroness. Lady Seear, made some important recommendations. Many of those, like the proposal to extend the Job Release Scheme, should be considered by the Government; but the report of the noble Baroness and her committee was put on the shelf to gather dust. It is time that the Government acted upon some of its recommendations.
Furthermore, a number of leading Conservatives, in addition to Mr. Peter Walker, have expressed their profound disquiet about the present state of affairs. Mr. Francis Pym in another place, and yet again on television two weeks ago, had no doubt in his mind that the Government should take action. Sir Ian Gilmour. Mr. Geoffery Rippon, Mr. Edward Heath and many others have expressed similar views. I could quote at length from their speeches, but I think that their considered opinions are well known to noble Lords opposite. They were supported by a large number of speeches made at the annual conference of the CBI where unemployment again was properly the central issue.
Some Ministers in this Government, and no doubt one or two noble Lords opposite, will shrug off these protestations, but I do not, cannot, believe that the Leader of the House. with his great experience and his sense of what is right, will do so; he will realise that the future of this country is at stake in this matter.
There are some other things which could be done now without great cost. For example, voluntary early retirement on a proper scale—something discussed in the Select Committee's report—should be introduced. Measures should be taken to halt the outflow of capital from this country; we cannot afford the luxury of British capital being invested overseas when it is needed by British industry here at home. And we should also extend the programme of retraining and training to people of all ages, so that they can make full use of changes in technology. We rightly emphasise the problems of young people. But we must not overlook the desperate worries of men over 40 and 50, many hundreds of thousands of whom throughout the country are losing all hope of ever finding work again.
The training programmes introduced by this Government, although they are welcome, are not an answer to the problem. There are indications that the Youth Training Scheme itself—and I address this to the noble Lord, Lord Young—is not fulfilling the Government's expectations. The Financial Times on 10th December reported that in a paper presented to the Youth Training Board on that day the figures showed that at the end of November the provisional number of young people on current year schemes was 258,000, which is about the same as this time last year. I believe that a figure of over 400,000 was predicted the Government. I support the Youth Training Scheme. but it would be a great mistake for the Government to make exaggerated claims at this time. There is nothing to be gained from that in the long run.
With others, we have urged that far more should be invested in our infrastructure. We debated this in the House last January, and there is widespread agreement that investment in improving infrastructure would bring real benefits. This again was urged strongly upon the Government at the CBI conference.
The case for capital investment in the infrastructure appears to be overwhelming, not only because a good part of our infrastructure is in need of replacement, but also because we cannot have economic recovery unless the infrastructure is in good shape. The Chancellor of the Exchequer has told us to look to the private services for salvation. They will make a contribution, but they will not solve the problem. I regard public sector employment as playing a crucial role, and we should not forget it. The construction industry in particular has a key role to play, and I am sure that a number of noble Lords who are to take part in this debate will refer to that vital area.
Noble Lords opposite may ask, "Who is to pay? How are we to pay? If we do pay, it is a departure from economic policy and will bring back inflation". Is that the case? The Independent Institute of Fiscal Studies and the London Business School—not unfriendly to this Government—recently came to the conclusion that £1 billion (and I say this specifically to the Government and to the Chancellor in advance of his Budget) spent on tax cuts reduces unemployment by about 30,000 in four years. But £1 billion spent on investment, particularly capital investment in the infrastructure, reduces unemployment by about 185.000 in four years. Which is the Government to choose? Is it tax cuts, or is it jobs? We shall see on Budget Day, but I hope that Ministers like the noble Viscount the Leader of the House will make their voices clearly heard in the Cabinet when the debate takes place. I hope that the Government are not so intransigent that they will not listen to views other than their own.
In short, we have come to a point where there is a need for the most urgent and careful study of the implications of the current unemploymet crisis. To potter around at the edges without going to the heart of the problem is to ask for trouble. One of the causes of the present tragic strike is that the people living in the mining communities do not believe that the Government have any serious plans to provide alternative work for them in the valleys if the pits are closed. This lack of confidence must not be ignored.
The tragedy is that, at a time when we are enjoying one of the biggest bonuses in our history—the great North Sea oil development—the Government should be using the revenue to pay unemployment benefit and not to invest in industry and infrastructure. It is the most unhappy paradox that money which should be used to build our country to match the challenge of a difficult age should be used to keep men and women on the dole. It is a sad and sorry tale.
I read with interest what Professor Michael Howard wrote in The Times the other day. He said:
"unless people are able to contribute by their work to the functioning of society, thereby acquiring some status within it, they will feel rejected and ultimately alienated".
When the lighthouse flashes its warning beam the prudent captain knows that danger lies ahead and he will change course. The warning lights are flashing for Britain today; there is still time to change course and we plead with the Government to do so. If they do not, they will take Britain into the utmost peril. I beg to move.
Moved to resolve, That this House recognises the human misery and waste caused by current unemployment of labour and resources; deplores the lack of urgency shown by Her Majesty's Government in tackling this problem and calls for a statement of the positive steps to be taken to enable available labour to be used to meet undoubted national needs.—(Lord Cledwyn of Penrhos.)
3.29 p.m.
The Minister Without Portfolio (Lord Young of Graffham): My Lords, in opening today's debate on behalf of the Government, I should not like your Lordships' House to consider that the eight minutes allotted to me in any way reflects either the Government's or my lack of concern about the subject of this debate, which is, after all, the central issue of our time. Nothing could he further from the truth and, although the time is more than enough, I suspect, to refute the case put forward by the noble Lord, Lord Cledwyn, it will not be enough for me to expand on what the Government have done, are doing, and will do. In leaving some of that task to my noble friend Lord Gowrie, I hope that no-one in your Lordships' House will feel that the Government are in any way defensive of their record or that I am in any way slighting this House.
Unemployment is a matter about which we all share a profound concern. Experience here and abroad has proved time and time again over many years—not just during the lifetime of this Government—that it is a deep-rooted problem, and one to which there are no easy answers. Indeed, if there were easy answers, if there were simple solutions and if we could just have waved a magic wand, would we not have waved it, would we not have implemented such solutions and, indeed, would not other countries have done so? But there is none. It is no service to the unemployed to pretend that there are any. They at least deserve more honesty from us than that.
Of course, the Government recognise the human distress and waste which unemployment brings to individuals, to their families and to whole communities. I know only too well the waste of our
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country's most valuable asset—our people. But we shall not solve this problem by the fine-sounding words which the noble Lord, Lord Cledwyn, produced today. We can all produce fine words, but it is sound policies that are needed—policies that will provide a real, lasting basis for a better future. I do not believe that the noble Lord, nor those sitting on his Benches, have such policies.
We have heard once again the "mores" of the Opposition—more Government spending, more Government investment, more Government jobs and more Government controls. I have to say that the noble Lord sings a song with a tired refrain. Time after time we hear the same old song.
I find it extraordinary that the noble Lord and his party have still not learned the lesson that you cannot spend your way into sustained economic growth. Where is this money to come from? From higher taxes? From more borrowing? By printing more money? And what would be the effects of any or all of these in combination? We have only to look back a little way in our history to find the answers: higher interest rates, rising inflation, fewer incentives, lower investment and, in the end, higher unemployment. We have tried it before and the noble Lord would have us try it again.
If massive extra public spending was the right way to create jobs, then the big rise in public expenditure as a proportion of GDP over the past 20 years should have solved the problem. But it has not. The fact is that the Government are already spending over £130 billion a year. But no matter what the level of public expenditure, the noble Lord and his party always seem to think that somehow just £1 billion more would make all the difference.
The Government are not against investment. Far from it: we fully understand the need for effective investment if our industries are to be able to match their foreign competitors. Fixed investment across the whole economy is at a post-war record; this year it is estimated at over £55 billion at current prices. It is up by 7·5 per cent. in real terms, and we expect it to be higher next year. But more than that, between 1981 and 1985 it will have increased by over 24 per cent. compared with a mere 5·1 per cent. for the EEC as a whole.
Of course, the balance between public and private investment has shifted as the Government have released resources to the private sector. We make no apology for that. But we also recognise the value of public capital investment where it is appropriate and where it can earn a proper return. However, it is absurd to suggest that spending yet more millions of pounds of taxpayers' money on major infrastructure projects is any answer to unemployment. The job-creation effects of such expenditure would be much less than is imagined. I must tell your Lordships that it would be good for the hire of plant, but it would be bad for the hire of men.
I should now like to turn to one particular aspect of unemployment which the noble Lord, Lord Cledwyn, mentioned—that of youth unemployment. Here, at least, in your Lordships' House, there can be no disagreement. For a young person to go straight from school into unemployment is something which none

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of us can lightly contemplate. Unemployment among school-leavers represents a waste of young people's energies at the very moment when those energies are at their most receptive. It also conditions the young people concerned into an attitude of mind in which to do nothing is the norm and where the street corner becomes the limit of their vision and of their ambition. That is why this Government have devoted resources on an unprecedented scale to meet this challenge. This year we shall be spending approaching £1 billion on employment and training measures just for young people.
The results of that expenditure are now clear to see. A recent survey showed that nearly 60 per cent. of the young people who left the youth training scheme this summer went into employment and a further 13 per cent. were in, or intending to go into, further education or training. If only 250,000 people take part in the youth training scheme as against the original estimate of 400,000. it is because many more young people found employment.
However, this does not mean that we can rest content or that there is no more to be done. I am undertaking an urgent investigation into the whole range of our provision for the employment, training and payment of benefits to our young people. I profoundly believe that the youth training scheme has been a major milestone along that road, and I think that we owe it to our young people to encourage its progress by all the means at our disposal. It was Oscar Wilde who said:
"Children begin by loving their parents. After a time they judge them. Rarely, if ever, do they forgive them".
I am not too sure that many of our young people will readily forgive us if we do not do all in our power to create a climate in which their enterprise is allowed to flourish.
There are many other key questions on which I should like to have touched, including the very real problem of the long-term unemployed, but time does not permit. The key to reducing unemployment can only lie in the policies being followed by this Government. That means controlling inflation, restraining public expenditure, encouraging the growth of real jobs and returning to this country the spirit of enterprise which was so nearly extinguished by the heavy hand of state control which by 1979 had come to permeate almost every corner of our land.
I know that there is impatience to see these policies result, as they will do, in falling unemployment. But they are already bearing fruit. We employ 66 per cent. of our population of working age, compared with 61 per cent. in Germany and 60 per cent. in France. We are the only major European economy generating additional jobs. Only Australia, the United States and Canada are doing better than we are, and in the last 12 months we have done better than Japan, Germany, Italy, Switzerland, France, Sweden, Norway and Spain. Our policies are working: for the road to reduced unemployment is to get employment going, and it is only by the policies followed by this Government that the way lies for a return to fuller employment.
3.38 p.m.
Baroness Seear: My Lords, we on these Benches have repeatedly explained our macro-economic policies in relation to unemployment in general, and in the time allowed me I do not propose to repeat those policies. Instead, I want to concentrate on one group of the unemployed to whom I attach the greatest importance—the long-term unemployed. I agree with much that the Government are doing to make industry more efficient. I agree that if we have the changes in industry and if we have training of the labour force, which the Government support, then for many people in this country the prospects of employment can be quite good.
However, the fact remains that we have a residue of long-term unemployed who will not be absorbed into work as a result of the Government's policies, and it is of those people that I- wish to speak today: for they need interventionist policies of the kind that, to a great extent, the Government have been unwilling to adopt. In relation to such interventionist policies the Government will say that they have to be cost-effective. Of course we want them to be cost-effective, but I beg the Government, when they consider cost-effectiveness. to consider it in the terms of the economist and the management accountant, and not in the terms of the bookkeeper, as they so often do at the present time.
It is not for me to repeat the sexist remark made by a Member speaking in another place (or was it made by a Member of another place speaking outside this building?) when he referred to the economics of the housekeeper. I would not use such a term, but I think that my meaning is the same as his. For so often when the Government are looking at expenditure in these matters they think extremely short-term, calculating the benefit on a yearly basis, taking into account only the immediate results that they get; and yet when dealing with the long-term unemployed it is necessary to take other considerations into account. I am not talking now about the pain, suffering and social cost, I am talking about the harsh financial cost of maintaining large numbers of people in this country in permanent unemployment, and that is the position of the long-term unemployed.
We find the long-term unemployed tragically not only among the elderly and the middle-aged but also among the young. Far too much unemployment is concentrated among the under-25s, and there are many under-25s who rank as long-term, having not had a job for one, two, or even three years. I would ask the Government to look as a matter of urgency at the policies, some of which they have already started, which they have started, in my view, in too tentative a way and with too little courage, too cautiously to tackle this particular and urgent problem.
Let us take first the young. I am a strong supporter of the Youth Training Scheme and what the Government are attempting to do. I know that it is in the mind of some Ministers that we should have a two-year and not a one-year programme. I ask the Government as a matter of urgency how soon can they come to a decision about this, not necessarily to make the second year from the age of 17 to 18 but to have a second year which can be used as appropriate for the

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youngsters when they are ready to take that second year? I would ask that one year should be available to some more of the under-25s who have missed the opportunity of the Youth Training Scheme and who are heavily represented in the ranks of the long-term unemployed.
Then again I would ask the Government to look at the question of those youngsters who study but who, if they are on supplementary benefit and if they take worthwhile courses—courses involving more than 21 hours of study—lose their benefit. What sort of cost effectiveness is this? We all know that we suffer in this country because we have an untrained labour force. We all know that in the future the race is to those who have a fully-trained labour force, an educated labour force, capable of flexible adjustment to the new opportunities that arise. If we do not want to turn the young of today into the long-term unemployed of the future we must encourage them in every possible way to get themselves educated and to be flexible. Surely it is the most paltry economy to suggest that if they study for more than 21 hours their supplementary benefit should be reduced. I ask the Government to look urgently at that point.
Then there is the question of jobs and work for those people who are indefinitely unemployed. The Government have done something. It was one of the points suggested in the Select Committee report: the Government have done something to allow unemployed persons to earn more than was allowed before and still to keep their benefit. But it would pay us hands down in regard to those people who have been unemployed for one, two or three years, particularly those in the older age groups for whom, frankly, the likelihood of a return to full-time employment is almost nil. This will be the case however succesful the Government's policies may be, because the success of the Government's policies will involve the elimination of the very jobs that people of that kind have in the past been able to do or have any prospect of being able to do in the future.
It would be a cost-effective thing to do to enable the people in that category—and it would not be difficult to discriminate between people in that category and others—to earn a far larger amount than they are at present permitted to do without losing their unemployment benefit. The savings in other directions would go a long way to offset the cost that would be involved in allowing them so to do. It would increase the number of men in part-time employment, and that might be a very good thing indeed. It would encourage some people to take part-time employment, and therefore to release the full-time jobs to other persons who need them more and want them more urgently.
I beg the Government to ask themselves whether it is possible to move much further in that direction so that there could be really worthwhile part-time jobs for people in the category of long-term unemployed without them losing to any substantial extent the benefit that they are able to draw. In so doing we should be moving in the direction—a direction in which we on these Benches are convinced that we have to go—of a minimum citizen income. That is the way that sooner or later we shall have to direct ourselves.
Then. in the minute left, I come to the community programme. The Government have been on a winner
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in the development of the community programme, but they have done their best to ruin what was one of their own most successful ideas, because they have not allowed sufficient continuity. This scheme is based on the collaboration between the statutory and the voluntary bodies, drawing on the ability, enthusiasm and knowledge of people at grass roots level, but they need to have continuity. The voluntary bodies need the assurance that they will be able to continue with their plan, and at present again and again when schemes have got going they have been cut back because of changes in the budget.
I beg the Government to look at ways in which, once schemes of that kind have been accepted as being worth while, they can be assured of a degree of continuity which at present is not there. If these schemes take root, I believe they will be worthwhile job creators, but they are not taking root at present as they should because of the way in which the Government have played ducks and drakes with the financing of them in the past.
May I in the half minute left to me just make one further point? The recent regulation which has come out in relation to community programmes which prevents people who are not drawing benefit from being employed on the community programme is in my view indirect discrimination against women. I hope that the Equal Opportunities Commission will take the Government to court on this.
3.47 p.m.
The Lord Bishop of Southwark: My Lords, eight minutes is not very long for an early participant in a major debate. I have hacked off as much as I can from my speech and I hope that the rest hangs together. I want to offer two particular suggestions in relation to Lord Cledwyn's proposal for a statement of the positive steps to be used to meet undoubted national needs. I take no party line, but we are reaching a point in what may be called national consciousness when the need to take action about unemployment is seen by most of us as overwhelming and urgent. It is for this reason that my first proposal is short-term, immediate, and relates directly to the statement made by the Chancellor of the Exchequer on 12th November at col. 418 when he stated that tax changes already made,
"will take full effect next year and reduce taxation in 1985–86 by some £1¾billion."
He then went on to say that,
"it does look as if there will be scope for some further net reductions in taxes in next year's Budget. The best figure that I can put on it at the present time is about£1½billion."
I am sure that everyone here wants to see the burden of taxation on the lower paid lifted. The poverty trap is a menace. But what worries some of us is that, if you simply lift the taxation threshold, a great many other people who are not in such urgent need, or in no need at all, also benefit. From that point of view, a simple increase in child benefit will do the job much more precisely for many and it will help those who pay no tax at all.
If it is argued that the money left in the hands of the better off through lower taxation will then be used to invest, or to buy more consumer goods, thus creating

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more real jobs in the long term, then one has to ask another question: will this in fact create the jobs where they are most needed and which will best serve the long-term interests of the country at the present time? That is one of the key issues before us.
I am a member of the inquiry into British housing which is chaired by His Royal Highness the Duke of Edinburgh and has many serving on it who are very knowledgeable about housing questions generally, which I am not—not yet, anyway. So far, we have been receiving and sifting a large amount of evidence. On the basis of what I have read and heard—and I must stress that this is my personal opinion—some broad conclusions emerge which will not be unfamiliar to Members of this House. First of all, in certain areas those with low and limited incomes are facing increasing difficulty in finding or keeping a home. There is a growing shortage of housing to rent, and it is most severe in London.
Secondly, there are worsening problems of house conditions throughout Britain, despite some increase in rehabilitation and maintenance work in recent years. This is principally because such huge numbers of houses were built, often to lowish standards, in the late 19th and early 20th centuries, and because of the well-known defects of some recent system building, especially in the municipal sector.
Thirdly, capital investment is not being attracted into the provision of rented housing, and while interest rates remain at or near double figures it probably never will be attracted again into the commercial or private sector except at the luxury end of the market. Good housing is such a basic need for any society. It seems obvious that its high cost must be shared within the community and across the generations in some way. If I billion is to be available in next spring's Budget, then there must surely be a very strong case for saying that part of it should be used to tackle the appalling housing problems faced in places like Southwark, in my own diocese.
These broad arguments, I know, were powerfully deployed in the debate on the infrastructure earlier this year. Its relevance to this debate is the obvious one that the construction industry is labour-intensive. It employs mainly younger men, and if it is not revived a little soon it will become incapable of carrying out work which will have to be done if we are to avert a housing crisis, a sewer crisis, a road or a rail crisis, or possibly the whole lot together in a few years' time. In 1960 the construction industry employed 1½ million people. By 1983 that figure had dropped to under 1 million. I do not think that much of that can be simply attributed to technological change.
Since Bishops are rightly suspected of being weak on the subject of economics—though they are not alone in this—may I add that I am well aware of the arguments about more Government spending leading to inflation, and I accept the strength of them. But in this case we are talking about a surplus which the Chancellor has already told us that he hopes to have. A professor of economics whom I consulted opined that to give all that surplus back in tax cuts is more likely to be inflationary than using some or most of it on capital development, if only because some of it
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would almost certainly be spent on imports and services abroad.
My second proposal is the long-term one touched upon by the noble Baroness. Lady Seear. I am trying to bring into play certain convictions that are, I believe, part of the Christian understanding of how we should live together in a crowded and dangerous world. Any consideration of these positive steps to be taken to enable labour to be used to meet undoubted national need must not stop at the traditional views about work and remuneration, which still lead to such sterile debates. Many of us believe that there will never be enough work again for everyone who wants to work for 35, 40 or 45 hours a week. Many of us also believe that it is not everyone who wants to spend long hours at boring and repetitive work of one sort or another. Gradually, a whole new debate is emerging about the possibility of a society in which everyone might be paid a guaranteed minimum income or wage and then paid more for particular kinds of skills, responsibilities, danger and so on. Many of your Lordships will know much about this already, and it has been quite well researched.
I think your Lordships will also know that when one first hears about something of this kind one greets it with mild disbelief, or worse. It sounds like an invitation to laziness on an unprecedented scale. I have no doubt that original sin, or whatever one chooses to call it, will raise its head in certain ways on issues that have to be faced. But the main thing about it is that the more one thinks about this the more one suspects that we have to move towards some radically new solution. Beveridge welfarism cannot stand the present strain much longer. And leaving it all to private capital is not producing fair or adequate solutions, either. There must be another way: a way which makes it possible for more people to work part-time, which they want to do; to retire earlier, which they often want to do; to change jobs more easily; and a way which gives people a sense of participating more in society and being valued and wanted. That is a crucial issue in this debate.
There must be another way, too, to reduce the almost unbearable bureaucracy which is now administering our so-called welfare. Something along the lines of a basic wage might be the answer.
I wanted also, like the noble Lord. Lord Cledwyn, to quote Michael Howard, but time does not allow that. He said at the end of his article that we may have become
"a society in which the enrichment of the few contributes little if anything to the national wellbeing but the deprivation of a substantial minority impoverishes us all".
They are brave words. I think they are true, and I believe that wise self-interest, never mind a true concern for the unemployed and their families, must make us look very hard for new ways out of our dilemma.
3.56 p.m.
Lord Jacques: My Lords, 40 years ago the leaders of our political parties had seen at first hand the misery and waste caused by the unemployment of the 1930s. They resolved that the greatest need of the British people was a high and stable level of employment. and they acted accordingly. For the first 25 years after the

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war we had full employment. We had the highest increase in our standard of living in our history. We were able to develop the welfare state because such a high proportion of our people were working that the cost per head was relatively low.
As it was the greatest need of the British people 40 years ago, it is now the greatest need of the British people. We have had experience in the meantime and we know from that experience that what is required, if we are to conquer the problem of unemployment, is that the Government of the day must give the problem first priority.
Secondly, they must be prepared to consult, and seek the co-operation of, both sides of industry because a policy of high employment cannot exist without that co-operation. They should co-operate with industry with a view to devising, directing and monitoring a strategy for dealing with the problem—a strategy which is embracing; a strategy which covers training, public investment, particularly in the infrastructure, and the timing of that investment so that it helps the economy; a strategy which includes private investment, which in turn will give rise to consideration of capital movement and interest rates: a strategy which includes consideration of regional aid; and, above all, a strategy which seeks to control inflation. The control of inflation is vital, but it is only one of the elements; it is not the only element, and things will not come right simply because inflation is controlled. We know this from practical experience.
But what do we have? We have a Government who do not give first priority to unemployment. We have a Government who scorn consensus, who are really contemptuous of consensus—and openly so. As long as we have a Government who are openly scornful of consensus, we shall never solve this problem; we shall simply divide our people. The Government not only have no place for consensus; they have other policies to which to give preference over the problem of unemployment. They give preference to privatisation and to confrontation. For example, in the last few weeks the Government have spent the best part of £250 million persuading the public to buy Telecom shares, and at the same time they have reduced the regional aid to industry by £300 million. That shows where their preference lies.
Their policy of confrontation has given us the most disastrous strike, a strike which should never have occurred, a strike the cost of which has to be measured not in millions but in billions. The real cost is in billions. It is a strike which never need have occurred and would not have occurred had the party opposite had the good fortune to have a Harold Macmillan as their head. If he had been leading the party, if he had been in Office, then in my opinion there would have been no strike. He would not have appointed MacGregor; he would have known that the appointment of MacGregor would provoke, and that that provocation would lead to trouble. Harold Macmillan would have wanted not confrontation but agreement; and because he would have wanted agreement, he would not have provoked.
There would of course have been a dispute, but that dispute would have been settled long ago. It would have been settled at the point when ACAS said to the parties, "There has got to be some kind of arbitration
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here". The Coal Board said, "Arbitration yes, but not binding". The NUM said, "Arbitration is of no use unless it is binding". Harold Macmillan would have seized the opportunity there with both hands. Here was an opportunity of getting an agreement which in the long term could almost have been a no—strike agreement, an agreement in which if there was going to he arbitration on one thing there was no reason why there should not have been compulsory arbitration on other things. And if there were to be general compulsory arbitration, then in effect you have a no-strike agreement. It would have been possible to come out with something like that and somebody of Macmillan's calibre would have done so. The Chancellor of the Exchequer was chided by his own party as to the cost of this strike. He said that it was a good investment. My Lords, an expenditure of money which sowed seeds of conflict among our mining communities can never be a good investment. It is not a good investment. The cost is simply the cost of being clever rather than of being wise.
There is to be a by-election tomorrow in Southgate and last week Gallup took a poll. They gave the electors a list of issues and asked them which would be important in their consideration of which party to vote for. Unemployment was at the top. Some 25 per cent. of the Conservative supporters said, "Unemployment"; 55 per cent. of the Liberal supporters said, "Unemployment" as did 64 per cent. of the Labour supporters. Until we get a Labour Government we shall never solve this problem of unemployment because they are the only party who are willing to do what is necessary to solve it.
4.4 p.m.
Lord Thorneycroft: My Lords, I start with an assumption. I assume that this island will continue to export or try to export one-third of everything that it makes. I assume that it will buy much of what it wants abroad. I assume that it will live by foreign trade. On that assumption, there is no choice. We have to be competitive and efficient or we fail in everything; and above all, we fail in any jobs policy. Against that background, I accept the Government's strategy. Abroad, there is a policy of wider trade and payments, living with the General Agreement on Tariffs and Trade and the rules of the EEC and so forth. I think that that is inevitable and indeed necessary to us. At home, to major in their attack on inflation. For inflation in this situation would suck in imports. Inflation erodes jobs; inflation loses markets, not only here but overseas as well. And I agree with the Government in their policy about union legislation, for the abuse of union power and immunities make free wage negotiations impossible. Free wage negotiation is an essential factor in a free society and the swift moving technological world in which we live. So I regard the Government's policies, their strategy, as not only right but inevitable.
I recognise, though, that the debate about this strategy tends to take on a curious form. It looks from the outside like an argument between one group of men who argue for the market mechanism and for spending rather less; and another group of men arguing for a wages policy or corporate Socialism and wanting to spend a lot more. It is an unhappy spectacle for someone living in a home on the North-East coast

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and wondering what job they can put their son into, to see an economic argument of that kind raging without any real hope of resolution. They ask, and I think that we are entitled to ask, "Isn't there something between these two extremes which will give some hope to people who are facing emergencies and difficulties of that character?".
My Lords, I have time only to list the points and hardly to debate them, but I think I would ask one question: is anybody doing better? The answer is yes, America is doing better; Japan is doing better. And if they are doing better, had we better not admit it and had we better not ask why? There are differences between us, and I do not say that we accept everything that happens in those countries, but we cannot go flat contrary to everything that our more successful competitors do and expect to find a solution to this problem. Real wage costs have risen faster here than in the countries of our principal competitors. We are not likely in those circumstances to hold on to jobs. Wages councils—and I recognise that they have done a great thing in the past—have exacerbated that particular difficulty and hurt particularly the young and the people who are trying to give jobs in small businesses.
The attitude of unions is different. The attitude of unions in the United States is innovative, entrepreneurial, investment-minded, willing to use new equipment. How does that compare with what we have here? Do we expect to hold jobs with attitudes of that kind, so far below what our competitors have managed to adopt? Or, my Lords, take mobility. Not only are workers on Japanese shop floors more skilled than ours and the percentage of skills is far higher, but they are more mobile, and they are more mobile also in the United States of America. Here it is not so; and not only are our people immobile—one of the most immobile peoples in the world—but they belong to clubs. They belong to the Transport and General Workers' Union or the electrical trade union. In America they change the club when they change the job.
My Lords, we have got to look at these things afresh. We have all got to ask ourselves, whether we are management or unions, whether it is not we who are creating a great deal of the unemployment and the immobility that is going on at present. Far less of this is concerned with economics than many people imagine. A lot of it is in straightforward practical management or education and training. Look at the percentage of skills in Japan or in the United States of America: the whole thing is geared, monitored and watched to see the relation of that education and training to the ability to get jobs. And what do we do here? We have just had a tremendous debate on who pays for education. We have had a hell of a row going on about who actually does the training, as to whether it is the Government or industry or not. But we have not managed to produce the quality of training which is related to the kind of age we live in, and I think that unless we do others will have the jobs, not us.
There are of course other differences. The managers on the whole are much better paid, and if there are very well-paid managers there are more people trying to be managers, and the quality tends to rise considerably. The small men start businesses—
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service businesses, little service industries all over the United States of America. We should study closely to see the enormous bureaucratic difficulties which exist in this country before anybody can start anything. If things could be made easier, more people would undoubtedly be employed.
Lastly, but not least perhaps. there is a sort of strategic management from the centre in both America and indeed to some extent. as the noble Lord, Lord Soames, was saying, in France. There, the government can come forward. In Japan, as the noble Lord, Lord Jacques. was saying the government trade organisation, Miti, calls together management. unions, banks and insurance companies. There is central management of great projects which have to take place in the world today. I wish that the Labour Party—if only I could have been a leader of the Labour Party, I always think I should have done it so well!—would only abandon the talk of "ownership" and think of the great central strategic leadership that is wanted in the country at the present time: what a claim that would be for them to put forward! What an argument to present!
I conclude simply by saying this. Of course people will debate strategy, but it is not the strategy that is going to determine matters altogether here. Here it is trying to put unemployment first, whether we are managers or unions—and, by heavens. my Lords, it means very drastic alteration of attitudes on both sides to achieve it.
4.13 p.m.
Lord Seebohm: My Lords, nobody could possibly disagree with the rather vivid description given by the noble Lord. Lord Cledwyn of Penrhos, regarding the tragedy and horrors of unemployment: but I do not think we are going to get very far unless we are absolutely clear what the causes of unemployment are, and I do not agree with what he said on that particular subject. In the short time that I have I should just like to say what in my view I believe to be the main causes of unemployment, and where that leads us so far as the cure is concerned.
The first thing that the noble Lord did not mention was in fact the double oil-price "hike" that took place in the last decade. That put many industries in the developed world which were based entirely on cheap energy into a tail-spin, and many of them only just managed to pull out of this tail-spin before crashing to the ground.
The second thing. which people who have been in my job and in my profession know only too clearly, has been the financial collapse of the third world. World trade grew in the 1960s at an enormous rate, and that was probably one of the reasons for the great prosperity which took place in this country during that period. In the 1960s, when the colonies became independent, they were all launched with adequate foreign exchange reserves. These were all exhausted by 1979; and, of course, the second oil "hike" really put them absolutely into a mess in that particular period.
The financial mismanagement of the Eurodollar market by the developed world was to my mind another cause of our troubles today. It was a classic example of borrowing short and lending long, and the only restriction or control was in fact by interest rates.

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The next thing I believe is the lack of competitiveness in world markets; the lack of productivity and lack of skills which we have, not only in this country but in the whole of Europe. Then I think there is a lack of any possible incomes policy which we could possibly put in force, with the present relationship between the employers and the trade unions. The result of inflation and the rise in incomes has led to the collapse of profits, leaving no money for investment and no alternative but to slim down the workforce and close surplus manufacturing units.
Then I believe that the expectation of annual increases without any economic justification is another very serious problem today. I do not know how one can get over that. It is something which I think must be faced, but I do not know how it can be put across to the trade unions so as to obtain their agreement.
Nothing that we have done has caused the 18 million unemployed in the Common Market. You cannot accuse this Government and our Prime Minister of causing 2 million unemployed in Germany, 2½ million in France or the highest unemployment there has ever been in Belgium. This is something which is far outside anything this country has caused. As a result, there have been I z million jobs lost in Europe, compared with an increase of 18 million in North America and 5 million in Japan. At the same time. 2 million more women have entered the workforce in the United Kingdom and there are 500,000 more people coming into the workforce in the next two or three years in this country. And you cannot blame this Government for the baby boom 15 years ago!
America has reduced its unemployment dramatically, although there has been little increase in the GNP; but real wages have fallen by 11 per cent. as compared with this country, where wages have increased by 10 per cent. over the rate of inflation in real terms, with the result that I have indicated. In fact, there has been a massive redistribution of wealth in the United States which has allowed so many new jobs to be created, most of which are in the service sector and many of which are part-time.
So what? What are we going to do? As I say, it is no good accusing this Government of causing massive unemployment. Our Prime Minister is not responsible for the 18 million unemployed in the Common Market. The first priority must be to make the whole of Europe more competitive with the United States, Japan and the Far East. When you think, there are 230 million people in the United States and Canada, a common language, common laws, a mobility of capital and a mobility of labour, completely competitive over the whole of that area; when you think, Japan is in a similar situation; and when you look at Europe you see that it is fragmented into 10 units with no common laws, no freedom and no common market.
We have already had a debate on this subject, in October, and I will not repeat what we said then; but it is just worth saying that in this country, quite apart from Europe itself, we have 65 per cent. of our workforce who have no occupational qualification, whereas in Germany it is only 30 per cent. In France,
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40 per cent. of all those between the ages of 18 and 20 have full-time educational or vocational training. In this country it is 19 per cent.
I must reiterate what I said in that debate: that no young person must be unemployed under the age of 18. He or she must either be in full-time training and education or in a work situation with at least 20 per cent. of his or her time spent in further vocational training. I also remind your Lordships of the recommendation made by the Select Committee that 16–18 year-olds should be given a defined status of student trainee with independent income, starting at a low figure and progressing to the right rate for the job as they get an occupational qualification.
My second priority is for the long-term unemployed—that is, those who are unemployed for more than a year. I need not dilate on the utter misery of these people. They are in poverty, they are demoralised, while others in employment have never had it so good, they have never had it so bad. Their wives are no longer in employment—they do not work—as they lose all but £4 from their earnings, however much they earn. This does not even pay their travelling expenses. The rules must change for these people. My recommendation would be to allow a 50 per cent. disregard for all earnings of man and wife so that there would be some incentive to get a job, even if it is a part-time job. It is really hitting a man below the belt when he loses a job, to lose his wife's earnings also, whereas when the man is in work both his earnings and those of his wife are retained, subject only to the normal tax rules.
My third priority, for which I make no apology, is that which has been put forward by the right reverend Prelate the Bishop of Southwark, the question of expenditure on housing. Even if it is necessary to borrow money to do this, I would do it. There is a strong social as well as economic reason for doing this. There are 20 million homes in Great Britain. The useful life of most houses is 60 years. This means that 330,000 houses must be built or refurbished every year simply to stand still. We are doing about half that. If we do not start now in this country we will be in a devil of a mess by the end of the decade.
My fourth priority is the adoption of many of the palliatives recommended by the One Nation group of MPs in their booklet called Jobs Ahead. I have not time to go into them but I hope the Government will take full notice.
Finally, I believe the important thing is somehow to make the Common Market work. Unless we do that, I see no chance whatever of our competing with America or Japan. This seems to me the highest priority. I do not see the present Government giving quite the impetus to that particular need which to me strategically is what must happen if Europe is to get rid of 18 million unemployed.
4.23 p.m.
Lord Davies of Leek: My Lords, I am sure that the House has listened with interest to the noble Lord, Lord Seebohm, and knows of his experience. I listened, too, with interest to the dynamism of the noble Lord, Lord Thorneycroft. I thought that he was coming over to this side of the House to dynamise it.

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We are not asking for this side of the House to be dynamised at the moment—it is not in power. It is his side of the House he should dynamise to show that its lack of urgency at the moment is a disgrace.
Lord Parry: My Lords, did the noble Lord say dynamite?
Lord Davies of Leek: No, my Lords, I did not say dynamite. I will keep my speech to about four minutes. The House has shown its interest in the subject by the number of noble Lords who are down to speak. I will try to keep to four minutes and consequently I shall keep to my brief. I am rather interested in the wages councils. I deprecate the growing attack on them by the Gradgrind policy of the Thatcher Government. They weaken, enfeeble and make impotent, so they think, the British trade union movement. I think that that is a fundamental mistake. One of the greatest trade unionists was Winston Churchill himself. He was a member of the bricklayers' union. In 1909, he himself supported the British trade union movement and pointed out how it stopped "cowboy" firms exploiting other firms by achieving cheap labour in various concerns.
There is a concerted effort from noble Lords opposite and from their colleagues in another place to ask questions on the wages councils. Those questions have been put down for Answers in both Houses and to my mind it is a pre-arranged attempt to lower wage and trade union standards throughout the country. The Government wish to get rid of the wages councils. The purpose of the wages councils was, and is, to give some protection to low paid workers. In some kind of queer economic theory that seems to be floating around at the moment the Government appear to think that cheap labour will lead to prosperity. Nothing could be further from the truth because those affected will have very little purchasing power to buy with their lower wages the goods that are in the shops. Low minimum wages and rates of pay affect nearly 3 million of our workers, in the clothing business, in shops, hotels, agriculture, the catering industry and hairdressing. They are usually poorly unionised and poorly paid. The Government should support such organisations and not try to destroy them. Often these people work at home. The Employment Committee, in its minutes of evidence of June 1984, pointed out that about one—fifth of them were women and were often exploited, especially at this time of the year, making crackers, working for Christmas shows and so on.
It should be remembered that the wages council is the United Kingdom's sole claim to compliance with the International Labour Convention No. 26, which requires signatory governments to create or maintain machinery whereby minimum rates of wages can be fixed for workers employed in certain trades in which no effective arrangements exist for the regulation of wages. Now Thatcherism—I will use that word without denigrating anybody—undermines even these minimum low-pay agreements. This is the worst Tory Government that the British public has had to tolerate for a generation or more. The Government are even willing to extricate themselves from the International
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Labour Office and their treaty obligations on the payment of wages. Efforts are being made to do that. We need a statutory minimum wage, and one day, after the downfall of Thatcherism, some compassionate government of either political party will see to it that that is done.
The Labour party is committed to moving towards this idea. I have looked at some of the Hobart Papers, as I often do, and in their high sounding language they seem to denounce the work of the wages councils. They seem to regret the acquisition of the power of the wages councils. They question their usefulness. They talk in language more suitable for selenography, or for talking on the surface of the moon, than for the down-to-earth minimum wage protection of the workers. Would the party opposite abandon the wages councils that protect the disabled? Have they thought this out, as they argue for the abandonment of wages councils?
As I said, the British wages councils were first set up in 1909. Churchill himself supported them and their protection as trade boards. Men and women in sweated industries were at least given some little protection. These councils now cover some 3 million workers in nearly 400,000 small establishments. They try to set minimum wages and conditions. They comprise equal union and employer representation, and independent members to hold the balance are appointed. All successive governments until this one of Thatcherism supported these justly formed wages councils.
I want them to be made more efficient. When the CBI was asked this question, although some of the members favoured the abolition of the Fair Wages Resolution, the Government decided to ask the CBI for its views before going ahead with any dismantlement of the wages councils. The CBI accepted that:
"Wages council industries enjoyed good industrial relations"—
but the CBI wants their reform rather than their abolition. That is the sensible approach and I hope that both sides of the House will adopt that sensible approach to the wage councils in future. I am sorry, my Lords, but I have taken a couple of minutes over time.
4.30 p.m.
Lord Alport: My Lords, put very simply, to me the issue we are debating is whether the damage to the public interest resulting from inflation is greater or less than damage caused by mass unemployment. It is true that the impact of inflation affects a larger number of people. It involves sacrifices which have to be borne by the nation generally. On the other hand, the impact of unemployment affects the lives of, say, 10 million to 12 million people—less than a quarter of our population.
If we believe the Benthamite plagiarism about "the greatest happiness of the greatest number" being "the foundation of morals and legislation", there is much to be said for a policy which keeps inflation below 5 per cent. There is of course a price to pay. Part of that price is the miners' strike, as the noble Lord, Lord Jacques, pointed out. Part is the alienation of communities and individuals and great areas of northern Britain, Scotland and Wales from the South.

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Part is the inevitability of social unrest which may have ugly consequences for the cohesion of our nation before the century ends; and part is the waste of human resources leading to despair, misery and violence.
The issue, then, is between those of us who believe that there is no alternative to the deflationary policy being followed by the Government, whatever may be the effect on the lives and expectations of a minority, and those of us who believe that those policies are sowing dragons' teeth, the harvest from which will destroy the increasingly fragile structure of this nation. The truth is, that while the Government's present policies continue there will still be 3,500,000 unemployed by the end of this decade, and perhaps more.
We recognise that we are going through an industrial revolution and that many of the landmarks of our past history when we were the "workshop of the world", an imperial power, and the rest of it, have disappeared. Yet we are trying to cope with the problems of a new age with polices derived from the nineteenth century.
We must not misinterpret the significance of the miners' strike. The strike of 1926, as I remember as a boy. had revolutionary undertones, just as has the present strike. In 1926 it failed, but it had a far-reaching impact on the political life of Britain. Combined with the economic crisis of 1929 to 1931, it brought the middle classes before the war, and the Tory party after the war, to realise that the economic policies based on the market economy—or laissez faire, as we called it in those days—and the social consequences of mass unemployment could no longer be tolerated. But here we are today with a Conservative Government in power following one and acquiescing to the other.
Accompanying the technological revolution in industry we are going through a counter-revolution in the social sphere. The class structure of this country has changed. The balance between the middle classes and the working class has altered. The middle classes are possibly now in a majority. They feel that the Welfare State has relieved them of the social responsibilities brought home to them by the events of the years between the wars. The abuse of power by the trade unions during the past 20 years has, they believe, released them morally from having to concern themselves with the consequences of unemployment, social deprivation and even poverty. It was not any of those things which caused 150 members of the Government party in the other place to rebel against cuts in the grants for higher education, but the interests of parents with incomes of more than £20,000 a year.
What Tories like me are trying to say to the Government is that the dominance of policies which serve the interests of the middle classes are just as dangerous and divisive as the policies which are designed to give domination to the working class. The unacceptable face of monetarist materialism is just as unacceptable as the unacceptable face of Marxist materialism. That is why we seek the middle way—the policy of consensus; the ideal of Britain as one nation. That is why we oppose the social consequences of monetarist finance and why I find myself in constant disagreement with the policies of the Prime Minister and those on whom she relies.
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However, it may be that out of our present evils may come good. If there is magnanimity—the truest wisdom in politics, as Burke said—on the part of the Prime Minister and her Government, as well as a change in policies and priorities, this country may be able to avoid the social disaster for which it is at present heading. The first priority must be not inflation or the reduction in direct taxation, but the reduction of unemployment and increased investment in public services, both national and local. To this end the Government must seek to reshape, in consultation with both sides of industry, the present distribution of opportunities for employment. They must reassess the relation of overtime to genuine productivity and the pattern of productivity incentives in relation both to wage levels and output.
Secondly, the Government must recognise that in governing this country they must work through, and with, established institutions; not only the law of the land but also the trade unions, local authorities, the Established Church, and representative bodies of intellectual, academic and professional opinion. There is one more thing that the Prime Minister and her advisers must remember. Whatever may be the class consciousness, the apparent insensitiveness and the acquisitiveness of the majority on whom she today relies for her support, there lies deep down far more powerful instincts: a belief in fairness, a distaste for the arrogance of power and a generous acceptance of the moral principle that the strong must help the weak, whether it be here in the United Kingdom or the deprived and famished people in the world outside.
If the Prime Minister and her Government continue with their present policies the Prime Minister will end up by destroying the party she leads. Behind her she will leave anger, disillusionment and a nation divided against itself. A nation, like a house, divided against itself cannot stand.
I intend tonight to vote for this Motion, not because I believe that the Labour Party or the Alliance would do any better or that my vote will have any influence, but I hope that no-one will accuse me of speaking in coded terms. We in this House, without the incubus of ambition, without expectations for the future or regrets for the past, have the immense privilege of saying publicly exactly what we think. Your Lordships will remember the old army story of the company commander who, when his company was marching towards the edge of a precipice, could not bring himself to order a change of direction, and his sergeant major shouted, "For God's sake, sir, say something, if it's only 'Goodbye' ". I do not want to say "Goodbye" to a Conservative Government, but unless the Prime Minister now uses her strength and authority to give the order for a change of direction the electors of this country will certainly say "Goodbye" to her and her Administration when the next general election takes place.
4.39 p.m.
Baroness Ewart-Biggs: My Lords, the noble Lord, Lord Alport, in very clear terms has made an overwhelming case for the Government to make some changes and to take some remedial action to satisfy the most fundamental human requirements which prevail

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in Britain today. I do not think that my speech can in any way measure up to the level of his.
For my part I should like to concentrate on the last part of the Motion calling for,
"positive steps to be taken to enable available labour to be used to meet undoubted national needs".
I should like to use the area of housing to illustrate my point. As the right reverend Prelate the Bishop of Southwark and the noble Lord, Lord Seebohm, have already said, housing policy has resulted not only in an insufficient number of houses being built but many being allowed to fall into disrepair. This has brought in its wake a combination of high unemployment among construction workers and more and more of Britain's families either badly housed or not housed at all. Therefore, just at a time when the economy is obviously badly in need of regeneration, we are faced with this almost unbelievable, vicious circle made up of unfit housing, unemployed construction workers and inadequately housed people.
What has brought on this disastrous combination? First, it must be remembered that housing work in its various forms has consistently accounted for around 40 per cent. of the construction industry's output in the post-war period, but present circumstances have put as many as 400.000 construction workers on the dole.
Running parallel to that, a potential shortage of housing is being accumulated against today's new household requirements—requirements which are rendered more acute by changing social trends, such as the elderly living longer and the rising divorce rate. On the one hand, there is an insufficiency of new building and. on the other, so many dwellings are falling into disrepair. It is now estimated that the number of houses in serious disrepair increased by about 22 per cent. between 1976 and 1981 and that there may now be up to 1 million totally unfit dwellings in England and Wales and between 2·2 million and 4·5 million others in very poor condition.
The reasons for this are as follows. First, an increasingly large proportion of owners are elderly and lack both financial resources and the necessary physical skills to keep their houses in a proper state of repair. Secondly. the system of mortgage tax relief not only encourages people to buy, but to buy as expensively as available mortgages will allow them. That often has the natural result of leaving them with insufficient resources to maintain their homes properly. Thirdly, although I certainly do not want to engage in the debate about tax benefits and the Government's obsession with owner-occupation, I should, nevertheless, like to stress that the unfitness and disrepair of houses predominates in that sector.
Together all that means that not only are so many of Britain's families badly housed, but there is a steadily increasing number who are not housed at all. Last year the London boroughs alone accepted 24,000 people as homeless, although of course it is known that the actual number of homeless is probably three times that number. Instead of investing in building programmes and providing jobs in the construction industry, public money is being used to provide temporary accommodation, such as bed-and-breakfast hotels, at a horrendous cost.
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If we look at the problem from the employment angle, it is now widely accepted, I believe, that each house built creates two jobs: one on site and one off. A further calculation can be made that for each £1 invested in housing, between 70p and 80p can be recouped, mainly from increases in tax revenues and savings in welfare benefit payments. Based on that assessment, doubling last year's housing investment of £1,650 million would in real terms cost only between £330 million and £495 million. No one could argue that that is not extraordinarily cost effective. Nor can the fact be dismissed that house-building has the two advantages of being highly labour intensive and needing to use little in the way of imports.
Finally, one word about priorities for future training. The consensus expressed by NEDO was that:
"The scale of the outstanding repairs problem in urban housing and strong social pressure are likely to maintain renovation as the priority area whatever the level of public housing expenditure".
Bearing that in mind, it is important to recognise that skilled labour accounts for a higher proportion of the total in renovation as compared with new work. Indeed, the scales are 80 per cent. to 65 per cent., respectively. That points to the critical need to increase the declining number of apprenticeships and other training facilities for young people within the construction industry.
I think that I have said enough to illustrate how destructive is the present negative spiral in housing policy, resulting in a combination of unemployed construction workers, millions of houses falling into disrepair and so many of Britain's families inadequately housed or homeless. What an irony it would be, and what a cruel and devastating condemnation of the present system, should a situation arise whereby a man, after many years in the construction industry, suddenly found himself unemployed, ending up with his wife and child existing in one room in a dingy bed-and-breakfast hotel—and doing so at the total cost to the state of around £1,000 a month. That would be the utlimate in the cruel and wicked waste of resources. both in human and economic terms, which prevails in Britain today.
4.45 p.m.
Lord Nugent of Guildford: My Lords, I should like to congratulate the noble Lord, Lord Cledwyn, on mounting this interesting debate and in particular on choosing a five-hour limit for it. I am sure that that is to the advantage of the whole House. I hope that the noble Baroness will forgive me if I do not follow her very interesting speech on housing which had many cogent points in it.
I must confess that I believe that the Government have been taking effective steps to meet the urgent need to reduce unemployment, and that their policies of stimulating growth of GDP by the firm control of public expenditure, decreasing inflation and reducing taxes on businesses and individuals are succeeding. GDP this year is 2½ per cent. plus: next year it is expected to be 3 per cent. That is the best in the Community. Inflation is under 5 per cent. Taxes were down last year and are going to be down again probably next year, and that includes raising tax

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thresholds for individuals. All that is bound to be helpful.
The result is that—and this point has already been made—the total national investment for this year is some —55 billion. Whether the investment involves public expenditure or private, it is equally good in creating more wealth and more jobs. The result is that in the past 12 months we have had some quarter of a million new jobs, and next year there is a good prospect of the number being even higher, and I think a prospect that it might overtake the loss of jobs that we are still suffering from. It' not spectacular, it is a record of solid progress.
Total spending by the state, which is critical, has gone down from its peak of 46 per cent. 10 years ago to 42 per cent. this year, and it is going down to 41 per cent. next year. We should compare that with the halcyon days of my noble friend Lord Stockton, when it was only 33 per cent. We can then see just how vulnerable we are. I commend Mr. Gladstone's splendid principle: let the money fructify in the pockets of the people. That may commend itself to noble Lords on the Liberal Benches.
The alternative policy of the noble Lord, Lord Cledwyn, was, among other things, increased expenditure on infrastructure. Already £9 billion a year is being spent on those purposes. Even on a limited scale, to increase it. in the judgment of the Government, begins to run us into the same old risks that we have run into time and time again in the past 20 years. Government after Government—not only the noble Lord's but ours as well—have tried to spend their way out of trouble. Inevitably we have had increasing inflation and mounting penalties. Above all, as my noble friend Lord Thorneycroft said, we have lost markets. Twenty years ago Great Britain had 20 per cent. of world trade; today we have only 8 per cent. That is the story. That is where the jobs go. We shall get them back again only by turning the tide, which we are trying to do.
There is President Mitterrand trying all the same things. His policy was to keep unemployment under 2 million. He introduced his great reflation programme, with nationalisation and everything. Within a year he had three devaluations and had to throw everything into reverse. Unemployment went over 2 million. It has now gone over 2½ million and is expected next year to go up to 3 million. However attractive in the short term, such policies simply do not succeed in practice.
Here I come to the point of my noble friend Lord Alport. The price of consensus is to grant the noble Lord what he wants, but I do say that, in the face of our own experience and that of others, it would be the height of irresponsibility to try such policies again. The hard path of strict financial control of public expenditure, leaving a margin of relief for industry and commerce, is the only road to growth and more real jobs. Some of those will come from new businesses. Britain is very weak on that. The United States last year had 600,000 new businesses. The Government have this new enterprise allowance scheme. It has created, since 1979, some 200,000. We need many more. There is not doubt about that.
Another point about the United States picture is that three-quarters of the seven million new jobs
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created there in the last two years were in the communications industry. This is what we have to look at. This is the training point. We are in the middle of this new revolution in the technology of communication. Therefore at school and afterwards it is most urgent to press on with every kind of scheme to try to train the youngsters to be ready for the jobs that are there and the many more which will be there. I very much agree with the noble Lord, Lord Seebohm, on this. I believe much more is needed. Past experience shows that the countries which adopt most vigorously the new technologies win the most benefit in jobs and growth.
This all seems very slow but I have one point which I think is worth making. It is that history shows that in the last hundred years Britain, and indeed other countries, have shortened hours of work. The working population a hundred years ago was 14 million. It is up to 26 million now. Productivity increased five-fold but we decreased hours of work by 40 per cent. OECD countries in the past 30 years reduced working hours by 30 per cent. At the same time growth of GDP and standard of living have steadily improved. So the longterm trend for workforces is to take the benefit of technological innovation partly in increased earnings and partly in shorter working life.
The problem for my noble friend and the Government is to supplement the positive policies to which I have referred and to help industry and commerce with policies to encourage this long-term trend to shorter hours of work. This would begin to ease the problem of new jobs that are needed. The statutory cut in working hours as tried by France is useless. All it does is to increase working cost and thus lose jobs. Work sharing schemes succeed in practice, we have found, only if accompanied by income sharing. Past experience shows that in practice this happens only gradually through bargaining between employers and unions, particularly as employers introduce new technological innovations which reduce costs and thereby increase the productivity of the workforce, leaving employers and employees the elbow room to shorten hours and still maintain earnings.
Last year, the European Commission proposed a reduction and reorganisation of working hours across the whole community. We opposed it, and some other countries did too, because we thought it would simply increase costs of production and markets, and thereby jobs would be lost. However, I am sure that the European Commission should look at this again. I hope that my noble friend will take this point. We know the long-term trend is in this direction. Anything that Ministers and governments can do to try to ease it along and to give incentives to push along that path is bound to he something which will help our own people here and indeed the other 18 million people who are unemployed in Europe.
My noble friend Lord Young has said that his job is to remove barriers to increase employment. I would ask him to look at this particular aspect of the problem with that objective in mind. We know it is a long term trend. We have done it for the last 100 years. We just want to ease it over the next few years, accelerate it a bit and then we should help to reduce unemployment faster than we are now doing.
4.54 p.m.
Lord Hatch of Lusby: My Lords, I intervene in this debate for one purpose only. That is to introduce a dimension which I do not believe will be spoken about by any other noble Lord. It has already been referred to by the noble Lord, Lord Seebohm, but he did not develop the theme. I am delighted that the noble Earl is to wind up this debate. I hope he will be able to find a minute to answer the one point that I want to put to him.
I begin with a quotation from the noble Lord, Lord Belstead, who was answering a debate which I initiated on May 23rd this year. The noble Lord said this:
"let us remember that British exports benefit from the aid programme in a number of ways. Just to give a figure or two, in 1983 some 75 per cent. of our bilateral aid of —604 million was tied to the procurement of British goods and services. In addition, we reckon that we arc winning export business in multilateral aid programmes broadly equivalent to our contribution of some —417 million." —[Official Report, 23/5/84, col. 292.]
In the next paragraph, the noble Lord said this:
"since 1977, when ATP"—
the aid and trade Provision—
"was started, grants of some £264 million have resulted in additional British exports in excess of £1,298 million."
Surely the only interpretation of this statement from the mouth of a Government Minister is that overseas aid helps trade and that trade provides employment.
But this Government have cut overseas aid by the equivalent of 20 per cent. since they came into office in 1979. Why? I hope that the noble Lord—and I do not believe that he will—will not resort to the old stereotype and sterile argument, "We can't afford it." We cannot afford not to invest in this way if we are going to work our way out of recession into economic recovery and so reduce unemployment. That is my single point.
It is not a coincidence that during the time in which this Government have been cutting overseas aid, in 1982 28 per cent. of our total exports went to the less developed countries but in 1983 that percentage had fallen to 20 per cent. This year it is substantially below 20 per cent. I am not saying that this is the only cause, but is it not a valid argument that as the Government cut aid so they are cutting the standard of living, the infrastructure, the ability of the people of the third world in the closed market which extends halfway round the world to buy our goods and so, therefore, are they increasing unemployment?
As the noble Earl knows, last year was the first year since the beginning of the Industrial Revolution that this country had a deficit on its manufacturing trade balance. This is not a coincidence. It is certainly not because people do not need our goods and do not want our goods. I simply put to the noble Earl, who I hope will be willing to take this argument on board and to meet it, that the cuts in overseas aid and the lack of interest in exports to the developing world are one of the direct and major causes of the growing unemployment in this country. One of the major ways in which unemployment could be cut would be both to increase overseas aid and to pay much more attention to trade with the closed developing world.
Let me give the noble Earl two examples. Some noble Lords may be weary of my using this example.
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I hope they are not, because it is a very cogent example and it is a very human example. It is what has happened at Bathgate. Last May, just the day before I introduced my debate, the Government announced that 1,800 workers in the British Leyland factory would be declared redundant, thus creating a figure of 40 per cent. of the workforce unemployed in that part of West Lothian. Why? Simply because that factory had been producing 2,500 truck kits a year, almost entirely to export to Nigeria, and last year Nigeria could only afford to buy 300. That is a direct consequence of lack of purchasing power in a third world country creating unemployment in a specific area in this country.
Secondly, it was only last month that I asked the Government whether they were prepared to use the aid and trade provision of our aid programme in order to assist the tender of British Aerospace to replace the Viscount aeroplanes in Zimbabwe. The Zimbabwe Government want British Aerospace to supply those replacements. The major competitor is the Dutch Fokker. The Dutch Government are prepared to put a substantial element of aid into that tender. This Government refused to use British overseas aid to assist British Aerospace to put in for the tender. To the best of my knowledge, that is the reason why the tender was lost. I know from my personal experience in talking to the Minister of Transport in Zimbabwe that they wanted British aircraft, and that had the aircraft been supplied by Britain it would not have been supplied only to Zimbabwe but there would have been repercussions all round the central African area. These are two specific examples which I hope that the noble Earl will take up in answering the questions that I am putting to him.
There are four million unemployed in this country. There are 17 million children who die every year through lack of the provisions that we could provide. That is surely an obscene commentary on the state of our world today. It has been shown clearly over the last few weeks that the British people feel a deep compassion for people in the third world. That compassion is being shown in the voluntary contributions that they are making. But this is not enough. It has to be supported by Government action. I am suggesting that this is a way in which morality and self-interest come together, and that this is an economic argument as well as a moral argument for increasing our contributions to overseas aid and thus increasing our overseas trade with the developing world and decreasing unemployment in this country. I say to the noble Earl—I know that he likes quotations, because we have swapped them before—that the whole argument was put by Ezra Pound when he said:
"We have one sap and one root. Let there be commerce between us".
5.3 p.m.
Viscount Hampden: My Lords, last week I visited an art exhibition. In one of the rooms there was a large placard which had the motto:
"Work is Love made visible".
I know that this referred to the artefacts that we were looking at, but it seemed to me a very appropriate quote, or motto, for the debate this afternoon.
I declare a small interest in that I employ a few people—not many but a few. I am happy to say that in

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the years of recession, over the last five or six years, they have remained constant. We have made no-one redundant. When a man has retired we have replaced him with a younger man. It was not absolutely necessary. We thought that it was the right thing to do. One question that I should like to ask the Government is whether they could not reverse the trend. It has become morally acceptable to make people redundant. Originally there was a good argument, I think, for reducing over-manning, but the policy of redundancy payments means that employers have been able to shelve their responsibility to the employees.
Redundancy payments were designed, first, I believe, to make the pill a bit sweeter for the employee who had been made redundant, and secondly, as a deterrent to the employer making an employee redundant. I do not think that this has really worked. My experience, especially now that private industry enterprises are becoming more profitable, is that employers are saying, "We shall have to shut down that little section or that little factory. We have to pay redundancy money. OK, if the Government tell us what to do, we will do it". They shelve the responsibility. The Government should give a moral lead to try to make employers feel more socially responsible for employing people.
My second point, to which some noble Lords have referred, relates to infrastructure. They are referring I think to the curious way in which the Treasury does its accountancy. It cannot differentiate between capital investment and current expenditure. If I ran my business or myself the way that the Treasury runs its affairs, nothing would happen at all. I should either be so extravagant, because I was adding my farm expenditure to current household bills, that my bank manager would say, "You cannot possibly do this on your income", or I should say, "I cannot invest in the future because I am unable to take a view about the future". The Treasury seem incapable of taking a view of the future. I shall be interested to hear what the Government say in reply to a Question by the noble Lord, Lord Ezra, on this matter next week.
The noble Lord, Lord Jacques, made a comment about the British Telecom issue. This seems a most extravagant exercise in public money. I should perhaps not complain because I have with me my letter of acceptance for 800 British Telecom shares for which I applied. I am therefore happy to have my £400 profit. All that I should have had to do was to write out my form and my cheque, but the Government were so keen that I should not make a mistake that they paid my stockbroker £8 to do it for me. That must be an enormous expense to the public purse that is totally unnecessary. I should like the Government to examine that point.
In closing, I wish to refer to an incident that happened to me early this summer. I asked a young man who had thumbed a lift in our village what he was doing. He told me that he was studying to be an actor at a drama college in south-east London. To my comment that this was an extraordinarily risky business, he replied that in the view of my generation it probably was but to his generation all professions were risky. That is I think a very sad comment on 1984.
5.7 p.m.
Baroness Carnegy of Lour: My Lords, I want to suggest to your Lordships, with the greatest respect, that the way in which we are conducting our national debate about unemployment, outside and inside Parliament, is increasingly out of date, arid, and for the man in the street, a growing cause for cynicism. I want to suggest that it is high time that both the agenda and the style of the national discussion changed. Of course, every citizen has a right, some a duty, to question whether current policies are the best ones, to propose improvements and alternatives. Of course, it is important constantly to remind the Government of the day that they act for every single citizen, that the economy exists for the people and not the people for the economy, and that in deciding overall economic strategy the effect on individuals must unfailingly be the major consideration.
But it seems to me wrong and cruelly counterproductive—I would say this to my noble friend Lord Alport as well as to the noble Lord, Lord Cledwyn—to pretend to ourselves for whatever reason that the old debate will do, that the old arguments are still relevant, and that the old alternative solutions are adequate when we all know that there has been a sea-change to the problem. It is surely obvious to every thoughtful television news viewer and radio news listener that economic theory, to whichever of the 57 available varieties it may belong, has not kept pace with changes wrought by developing technology, instant communication, and growing interdependence, world and nationwide.
What are urgently needed—I believe the public are ready to be persuaded of it—are absolutely new ideas; radical, really innovative policies; the courage in this country to think the unthinkable, to try new ways which until now have seemed out of the question. Of course, that is not at all easy to achieve. Modern governments find it very difficult to be radical. If they begin by developing their ideas in private, there are leaks, a political scream and the way forward is blocked. If they begin with public consultation, there are formed alliances of defenders of corners and the way forward is blocked.
If they begin by simply announcing a policy cold—and we have had a bit of that lately—there are political explosions and again the way forward is blocked. Likewise, political parties—and, not infrequently, alas, politically inclined Church leaders, too—find it difficult to allow governments to be radical. British political conventions include automatic suspicion of the other side, and of the Government. Public expectation is that oppositions will oppose. The media exaggerate that opposition, and any disagreement there is among a government's supporters are exaggerated, all to turn it into entertainment. One cannot, I suppose, be surprised that the politicians find themselves living up to the image the media have created.
But somehow these problems have to be overcome. We are at a moment in history when much more radical thinking must be done, and conclusions arrived at, about matters your Lordships have been discussing so far in this debate, and other matters, too. We have to think about the whole area of interaction between benefit, national insurance and income tax;

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the resulting poverty trap; the disincentive to taking on part-time work at the very time when part-time work opportunities are increasing. We have to think about ways to encourage employers to take on more people, and of helping people move to where the lobs are; and that may mean re-examining legislation, perhaps employment legislation, perhaps landlord and tenant legislation. I agree there with the right reverend Prelate the Bishop of Southwark that there is a great need for more rented accommodation in many places.
We need to build on what has been done so far in education and training for competence. We have to identify, as our main industrial competitors did long ago, what can be paid for by the employer, what by the person himself or herself, what has to be paid for by the taxpayer. We have to continue developing the successor system to apprenticeship. We have to shift some of our effort away from some traditional higher education to more flexible and cost-effective distance learning. We have to develop the new and important adult training strategy. We have to take a hard look at the health service.
In the course of this sort of radical thinking it will be necessary to look afresh at a whole herd of sacred cows, at policies and legislation of which both parties who have recently been in government were not so long ago proud but which may now, on balance, be doing more harm than good, particularly to the most vulnerable in our society. In China, in 1977, the Central Committee issued an edict, and, as a result, every year since then there has been some 8 per cent. growth in agricultural production. Now a new edict is announced to bring similar private enterprise and growth to the urban scene. Here, edicts do not do the trick. Somehow the country has to overcome the political ding-dong and come together a bit over the next two or three years. We dare not leave it longer.
Dare one hope that this House, true to its independent-minded self, may give something of a lead in the move to urgently needed searching for new solutions to new problems? Dare one hope that on all sides of the House it may be possible to persuade the noble Lord, Lord Cledwyn, not to divide us this evening? We all agree with the first part of his Motion, and if the second part was withdrawn, that would be a beginning of a new approach. I suggest both the content and style of the national debate on unemployment have to change if the Government are to be allowed to be radical. Is it too much to hope that your Lordships can start now?
5.15 p.m.
Lord Soper: My Lords, the House is invited to recognise the human misery of unemployment. I do not intend to generate a head of emotional steam, particularly in a short speech. But I would share with the House my anger, rather than my sentimental approach to this problem, and would seek to promote a sense of anger among those Members of your Lordships' House who may not—I speak, I hope, without impertinence—be aware of some of the more dreadful aspects of unemployment as I had to face them, though not because I have been unemployed; with the present level of original sin, I am in no dire difficulty there.
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I began to work in 1927 or 1928 in the Old Kent Road. and I worked in Islington where the highest rate of unemployment in those days was being suffered. I would introduce into this debate two impressions which were mine and which I have never forgotten; they have become more deeply penetrated over the years. The first is that to so many people who were unemployed the really grievous and terrible thing was not so much that they had not anything to get, but that they had not anything to give. Nobody wanted them. They had no opportunity of fulfilling the kind of life in which they felt they might be of some significance; that significant opportunity simply was not there. I find this a matter which promotes a great deal of anger, and I think it is righteous anger.
Secondly, there is the fact that the candle of opportunity, the developing of those innate resources which many of these young people had, was snuffed out before it had any chance of becoming a flame. What impoverishment of the community in which we live can be put down to the fact that so many who might contribute in art, in welfare, in beauty, in truth. are in fact prevented from so doing by the terrible burden of having no opportunity of developing those characteristics with which they are endowed or which they could develop? It is in that regard that I remember when I first was presented with what I have discovered to be a truth—that poverty is a crime; so, I believe, unemployment is a crime. It is a moral situation which I think we ought to find intolerable, and though the methods by which it can be dealt with may seem remote—and some may seem almost impossible even of introduction—yet it was surely Winston Churchill who on one occasion said how valuable anger is if it promotes action; and I believe it can.
Therefore in a very short speech I want to try to say something about what can be effectively done. First, I must indict the Government. I am not saying that the Government are indifferent to these matters. But I am saying that, from my own acquaintance with public affairs and with people outside and inside, my experience is that there is a very widespread conviction that the people who are today in charge of our affairs—so-called—are indifferent. It is felt that they are indifferent not in the sense that they are deliberately contriving something which is evil and anti-social, but in the sense that they have not a sufficient realisation of the impact of their own actions and that they in fact promote a feeling that, though they may not themselves be committing what is an evil practice, they are doing very little indeed to offer to ordinary people the sense that they have a constructive role to play, as I believe they have.
First, it is surely necessary to recognise quite simply that, whatever may be the decline in the inflation rate and whatever may be the validity of many of the economic arguments which have been introduced into your Lordships' debate this afternoon, unemployment is increasing—it is going up. That is an unassailable fact. In as much as the capitalist system has never acquired a basic ideology and has been subject to vagaries from time immemorial (to say nothing of the 1930s in America, and the oil crisis of more recent date), it is no law of the Medes and the Persians which the Government are compelled to maintain, because they have recognised it to have an innate validity of its

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own. It is a policy which is failing and which ought therefore to be subject to the pragmatic retort that if you find something in as grievous a situation as this, where so many people are being dispossessed of a great element of what can be called humanity, you should do something else. In that regard I am entirely in favour of what the noble Lord, Lord Alport, has said.
This Government have failed, and are failing. And, in the primary conception of what ought to be done to get rid of, or at least to assuage, the burden of unemployment, I believe that there is an overwhelming case for the infusion of public monies into constructive programmes, particularly in the realm of housing and in the refurbishment of a great deal of the substructure of our great cities. People may say that that will produce all kinds of inflationary processes. I would infinitely prefer to have an increase in inflation and an increase at the same time of that consensus which recognises that we are not living in a divided society, as the noble Earl, Lord Stockton, pointed out, as between north and south, those in employment and those who are unemployed. The moment you create a sense that people are living together and can form something of a society, you have in my judgment the greatest creative effectiveness that you can possibly develop in any field whatever.
Therefore, I ask the Government to do two things. First, I ask them to take greater care, to give the impression at least that they are dealing not with an economic problem, but with a moral one—indeed, a problem that is fundamentally a question of human beings living in a society where we have all the implements and the opportunities to provide a full life for all, if we only knew how to distribute them adequately.
Secondly, will the Government recognise—and it will do them no harm whatever to do so—that there is widespread conviction among those who are competent to make such an assessment that the policy hitherto is failing? It is not reducing unemployment. Unemployment is now a greater curse than it was even a year ago. Let the Government recognise that and let them turn in their own tracks and begin to do something for which I believe there is an increasing demand on the part of intelligent as well as well-meaning people. I believe that they would receive a response. A response would at least give them the opportunity to do something better than they have been doing regarding the prevailing curse of unemployment about which I have a mixture of anger and hope and about which I have at least communicated my own sense of conviction.
5.23 p.m.
Viscount Hanworth: My Lords, it is often interesting to look back at the opinions expressed some time ago. When unemployment had exceeded 1 million it was almost an ethic that if the figure reached 2 million it would begin to destroy the fabric of our society. With hindsight that view may have been overstated, but a gradual erosion is now taking place, and that is quite clear to nearly everyone. It is only when people have a real grievance that extremists are listened to. Surely the spectre of unemployment is a major cause of the miners' dispute?
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I dislike the way in which the Opposition try to put all the blame for unemployment on Government policies. It is ridiculous to do so and it cheapens anything else that they say. Unemployment has affected all western countries recently, and with Britain's economic problems it is not surprising that our unemployment rate is higher than that in most other countries. Nevertheless, the Government's monetary policy and their desire to keep down inflation at any cost is a contributing factor.
Productivity, with competitive prices, is all important to our exports—and export we must to survive. But paring down services and administration to the bare bones is a questionable policy when it just puts more people on the labour market and costs the Government around £5,000 a person to keep them unemployed.
The Government's proposals to reduce income tax can surely be justified only on political grounds. Much of the extra money put into the economy will be spent on imported goods and will therefore not increase home production and lessen unemployment. The Government say that it is intended to help lower paid workers. But surely those not paying any tax and the unemployed are still lower paid?
The SDP has put forward proposals for an emergency employment programme costing just under £3 billion, but producing 1 million extra jobs. I do not wish to go into detail. The proposals are readily available to those interested. I would only say that they are not the same as those put forward by the Labour Party.
Today I should like to look at the unemployment problem rather more fundamentally, starting with the proposition that the more people there are who can work usefully for the longest possible time, the richer a nation should be. The word "usefully" needs to be underlined. However, no economist can dispute this proposition; and there are so many things which do not require imports but which are of great importance to our society. Better prisons, smaller classes in schools, and of course sewers, are a few examples of matters which have recently been in the public eye.
It must follow that there is something wrong with our Western economics which, in spite of this proposition, means that we pay about 75 per cent. of the cost of employing a person to keep him unemployed. That is only one of the reasons why some people—and I think that this might apply to Mr. "Wedgie" Benn—have apparently abandoned the capitalist system as being beyond redemption, and many now seek to destroy it altogether. I do not of course subscribe to that view. But unless our economists, the City and the equivalent in other countries really get to grips with the changes which need to be made to the capitalist economic system, taking into account the needs of developing countries, the system, in my view, will not survive.
Finally, I should like to make some other major points. I suggest that we can divide unemployment remedies into three categories: first, fundamental economic changes; secondly, emergency measures; and thirdly, what I would call palliatives. I call them palliatives because they contravene the fundamental proposition that I put forward earlier about

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maximising the labour force and the hours that they work. Some of these palliatives may be what society wants; for example, shorter working hours, early retirement, longer holidays, job-sharing, part-time working and so on. Let us, however, be clear on one thing: unemployment could be solved almost immediately if the Government and the unions were prepared to accept the now unacceptable side effects. But we should keep such possibilities in mind because in the end the side effects could become more tolerable than the disease.
What are the solutions? Obviously one solution is much increased Government spending on promoting industrial growth and exports, with the side effect of producing some inflation. There is also the reduction of real wages and harder working by all employees—the Germans recovered after the last war by these means. Job sharing and part-time working provide a real opportunity here, inhibited only by the difficulties in operating such schemes. I believe, but I cannot prove, that many women and some men would prefer to work part-time rather than full-time, and this could in fact help the situation. If I am right, the Government need to make part-time working more attractive, and industry needs to recognise its benefits.
I now come to job sharing. If you accept that it costs the Government 75 per cent. of the average employee's wage to keep him unemployed, then if two people share a job and the Government chip in, part-time workers need accept only a small drop in their wages. The problem of course is, or would be, the anomaly as regards full-time workers; but it might be possible to do this in selected areas.
5.32 p.m.
Lord Beloff: My Lords, I rise in the first place to echo the words of the noble Lord, Lord Soper. Unemployment is a moral challenge to any society. Any Government must give priority to the solution of the social problems that it presents, and it must equally be the wish of all other parties in the state. Above all, I should have thought that, on those grounds, we ought to condemn unreservedly any man or group of men who seek deliberately to add to the toll of unemployment in this country.
The leaders of the National Union of Mineworkers have, for the last nine months, been engaged in destroying jobs and attempting to destroy jobs in the pursuit of a political objective. They have already, in their own industry, destroyed jobs permanently in those mines where coalfaces have been or are likely to be abandoned. They have destroyed jobs on the railways, as British Rail has told us, and a great deal of work is likely not to go back. You may say that road transport will take up the employment. But, more seriously, they have tried and failed—thanks to Mr. Bill Sirs, very largely—to destroy jobs in the steel industry. People forget the attempt to close down Ravenscraig, Scunthorpe and Llanwern, but everyone knows that if production in any of those three works had been interrupted for any length of time, they would never, in the present state of the world steel industry, have been reopened.
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An attempt was made—and again things move on and people forget—to close down the docks. The docks, one would have thought, have suffered enough from troubles to the benefit of Rotterdam and other Continental competitors. The dockers proved wiser than their union leaders and for the moment the jobs in the docks are safe. But of course if the traffic through the docks had been interrupted, if, above all, the power cuts with which the National Union of Mineworkers has been threatening us at intervals over the last nine months had actually materialised, there would have been a loss of jobs in almost every industry, since every industry is power-dependent. This massive attempt to create unemployment—some of it perhaps temporary, but much of it permanent—is something which has not been condemned by noble Lords opposite in the way in which they have condemned. and condemned in this Motion, lack of urgency on the part of Her Majesty's Government. Therefore, even if I were as critical as the noble Lord, Lord Alport, of some aspects of Government policy, I should not find it possible to vote with an Opposition which is more concerned, let us say, with neglect than it is—in the words of the noble Lord, Lord Soper—with deliberate crime.
It is a pity that this has been the case, and the divisiveness in our society to which the noble Lord, Lord Jacques, and others have referred, is a product of the fact that, in the last resort, there has been an unwillingness on the part of Her Majesty's official Opposition, to face the fact that unemployment is a general problem, a problem of all countries, and a problem which can only be solved by a high degree of national consensus. To give support to an attempt to destroy employment is not the way to bring about that national consensus.
I very much agree with my noble friend Lady Carnegy of Lour that it would be desirable if the noble Lord, Lord Cledwyn, in the light of this debate, withdrew the second half of his Motion. I think it desirable that this House should unanimously call attention to the human waste involved in unemployment which Lord Soper, not for the first time, has drawn to our attention. But if it is to be made a matter of party politics, if it is somehow to be said by the speakers on the other side of the House that there is no willingness on the part of the Government to respond to this need, if they are not prepared to admit how difficult it will be to restore competitiveness to our industries—a point to which the noble Lord, Lord Thorneycroft alluded—then I must say that we are where we started; we are still divided, but divided not by our wish but by the wish of Her Majesty's Opposition.
5.37 p.m.
Lord Parry: My Lords, your Lordships' House is a curious Chamber. From time to time, you hear in it words of total confrontation couched as liberal expositions of a case for reason. We have heard tonight in this Chamber, people who firmly believe that they have been expressing themselves in a way that is helpful to the debate, and not realising that in fact the same speeches have been made on the opposite side of the issue in slightly more strident tones.

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Almost all that I have left in my mind of the speech that I prepared for this debate is the grid map of Great Britain. It is the grid map of the blackspots of unemployment, and it shows in fact that it coincides with those areas where confrontation is at its greatest, where there is a total violence, and where people are disturbed as to what the future of the community, much less the future of the job, will be.
It is at this stage tonight that I would ask this House to pause a moment and to realise that we are talking about a deterioration that has gone on for a very long time indeed. The last time that I was free to speak in this House without the prefix of the Addison Rules, I spoke about the fact that no Government of Britain of the last 60 years could be totally blamed for the unemployment which is our dilemma at this time. Nor has the Opposition tonight, despite what some noble Lords have misunderstood, blamed this Government totally for the unemployment that they inherited and which has grown worse under their administration. Let us understand that.
This is a difficult problem arising out of the decay of the heavy industry base which no longer finds in Great Britain, or indeed in Western Europe, cheap labour, cheap fuel and the cheap raw materials that we were once able to import from the Empire.
When I first fought in politics in this country, I fought the policies of the noble Lord who has been canvassed earlier this evening as a possible leader, if he could come back in power, of the Labour Party. I fought the noble Lord sitting opposite who was himself canvassed for the job of Leader of the Opposition. It is an essence of the dilemma which faces us, and our failure to respond to it, that we are conducting a debate in this House which is not the same debate that is being conducted in the valleys of Wales or in the towns and cities of Scotland, or in the peripheral areas of Britain that reflect this problem in terms of human misery more vividly and graphically than do those regions of the Golden Triangle which even yet is growing richer.
Let me say to the noble Lords who have spoken—because I believe that they do care, and I should not dream of suggesting in this debate that there is on this side of the House a greater caring than there is among noble Lords on the other side—that it is possible to be isolated from the consequences of the drain that has taken place in the communities of the peripheral areas of Britain. It is possible to be isolated in this city from the decay of the inner heart of the city, and it is possible to go about your business believing that you care deeply and that you understand the problem, yet without appreciating the lives of the people in the areas which have unemployment now ranging between 20 and 23 per cent. as in the case of Northern Ireland, or in the high teens of percentage, as in Wales and in Scotland.
Is it any wonder that we begin to import into mainland Britain the problems which have bedevilled Northern Ireland and that there is some of the violence that we have seen in the streets? We, too, condemn that violence. In a democratic society that is alterable we condemn any violence which seeks to challenge the law, because in this country if you serve democracy properly and use it well, you can change the law.
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Do not let us forget tonight in this debate that we need to solve the problem of communication before we can solve the problem of unemployment. The communities are run down; the roads are pockmarked; the chapels are closed; the cinemas no longer exist; the Co-op has shut down, and not only is there no longer any "divi", there is no longer any place to shop, and people have to travel two and three miles at high cost, and more than that in many places, to find services that they once had close to home.
When we talk about public expenditure we are not talking about misuse of public funds; we are not talking about those individuals who might under any system abuse the power that is vested in them. What we are talking about is the use of public funding to restore the values of the communities to the point where the people who live within them no longer feel alienated from the rest of the nation of which they are a part. I understood the noble Earl, Lord Stockton, to say that; I understood the noble Lord, Lord Thorneycroft, to say that. It would be to the great advantage of this House if the message went out from it tonight that we do understand the frustration and bitterness of historical unemployment, sometimes too readily blamed by one side of this House on the other, and that we are determined that somehow we shall find a better way—because. my Lords, there must he a better way than to bring up a generation of children in unemployment.
Do not forget that some of those people who now await trial were 14 years of age when we last stood up in this House and debated this issue of the decay of the heavy industrial base of Great Britain. Violence is caused by the absence of integration in the communities of Great Britain, and we ignore that fact at our peril. When we blame one another, we help to destroy democracy.
5.44 p.m.
Lord Somers: My Lords, nobody could deny that unemployment is a very bad thing. To have some knowledge, some talent, or some ability and not to find a way of using it is most frustrating and is enough to destroy the soul of any person. But I must say that, like other noble Lords, I get a little tired of hearing unemployment—which is perhaps the most serious crisis that has occurred for many years—being used merely as a party-political brickbat with which to batter the other side. It is not a political matter. I was delighted to hear the speech of the noble Lord, Lord Parry, to which I listened with great attention. It was completely free from that, and as a result we listened to him much more seriously.
Unemployment began long before the present Government came into power. It was not the result of any particular party's policy; it was the result of a world malaise, since we see it in other countries besides our own. Any doctor, when called in to give an opinion on a case, looks back to find whether he can trace the cause of the disease. I think that the cause of unemployment is valuable to know. My noble friend Lord Seebohm touched on it, but I go back even earlier. I remember that years and years ago when we started increasing automation in industry a great deal I could see the beginning of it. Looking back I do not think that I was altogether wrong.

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Another cause arose—and I hope that this will not be misunderstood—when we started large scale immigration. Let it not be thought that I am saying anything against the immigrants themselves; I am not. But when they came to this country they of course expected jobs, and they got them. Well, I wonder how often they got them at the expense of our own British workers.
Then we come to the question of school-leavers. Some of them are anxious to work, others of course are just young people who, having been free for a long time, do not really want to get work. It is important that they should be taught that work is valuable. It is not just something that one must do in order to earn a living, but is valuable to express oneself with. I should like to see a much greater adoption of the apprenticeship system. The noble Baroness, Lady Carnegy, touched on this. It would mean that they would start work at a lower wage in order to learn their trade, whatever it may be. Then, as they learnt it, they could take some examination at the end of a given period, and if they qualified, they would then become full wage earners. But to go in at once without any training at all and to expect to receive full wages—as much as those of an experienced man—is totally wrong.
Now I come to another rather touchy point. The unions, (which again I am not accusing of anything intentional) have probably been responsible for a good deal of unemployment because they were founded to protect the interests of their members. Sometimes they do not look at the other side of the picture. They do not realise that by constantly pushing up wages they are making things so difficult for some firms that they are having to close down, thereby causing more unemployment. There, again, co-operation between management and unions would he valuable.
I sincerely hope that something constructive will come out of this debate. I am sure that it will, because unemployment is a bad thing and must be cured if we are to return to being a productive and prosperous nation.
5.50 p.m.
The Earl of Cork and Orrery: My Lords, when I was a boy I lived in a house in Somerset; not a large house, but reasonably well-to-do. We had no electric light, no gas, no main drains, no mains water, no telephone, and the roads outside were dusty because it was before the invention of tarmacadam. I do not say this to make out how enormously old I am, because a number of Members of your Lordships' House are older. My point is simply to indicate the amount of change that has gone on in one fairly ordinary lifetime. However, one thing that has not changed is the general attitude towards work and unemployment; the attitude of people who are in Government or, on the whole, in management.
This afternoon we have heard speeches still advocating what we read in the newspapers or hear on our wirelesses; all sorts of expedients for reducing unemployment by increasing public expenditure. We even hear former Prime Ministers going on about this. Most of the people know very well that all these things
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have been tried, and failed. If we go on doing it, it will always be the same sterile story.
On the other hand, other things have changed. One thing that has changed only since the war is the belief that has grown up that every working man or woman has the right to an increase in salary or pay every year. That is absolutely new and there is no justification for it whatever, as far as I know. One should receive more money only if one gets better at one's work, but not automatically. This is one of our troubles.
Something else has changed, too, and I shall give a rather graphic illustration which will not be completely new. It occurred only a few days ago at Stoke-on-Trent. I shall read from a BBC transcript the words that were spoken by Mr. Arthur Scargill after Mr. Wilkie, the taxi driver, was killed while taking two miners to work. Mr. Scargill said:
"The National Union of Mineworkers dissassociates itself from any acts of this kind".
At that point he was drowned by applause, as many of your Lordships who listened to it will have heard. So the people in the hall, though not the people outside, did not hear the words that finished that sentence. They were:
"which occur anywhere away from the picket lines".
So what the leader of the mineworkers was saying was not that he condemned but that he dissociated himself from any act of violence, however murderous, unless it occurred upon the picket lines.
Mr. Hattersley has been reported—I do not know whether correctly or not—as having said that those words make no difference. Do they not? If your Lordships should find yourselves lying awake in the cold silent watches of the night, let those words run across the eardrums of your soul to see whether they affect you or not. Will you find that they make no difference, or will you find that they chill your blood, as they do mine?
The world has changed. Why do I bring this subject of change into my speech about unemployment? For the reason that this is Scargillism. It is not new. We have had it before, but it is only now that it has crystallised under a single word. It is deadly; it is poison. The reason it is important in the context of this Motion is that unemployment is both the cause and the effect of Scargillism. If we cannot get rid of unemployment Scargillism will be the reward that we shall reap. It is not a prospect that I personally care to face.
What is the solution? I do not know. I do not pretend to have wisdom to see into the future and know. But I hold a conviction that it is quite wrong—I say this with respect to many of my friends—to say that there is no alternative, ever to use those words at all about anything. To use them about any Government's policies and to say that there is no alternative is, to my way of thinking, the purest obscurantism. It is also defeatist, negative and I want no part of it. It has nothing whatever to do with the vote of censure—if that is what it is—on the Order Paper. That has to do with the lack of urgency, so-called, alleged by the noble Lord, Lord Cledwyn, on the part of the Government. This does not come into the argument as far as I am concerned, because there is no urgency on the other side, either. Urgency is not

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the problem. The problem is what will the future be like and how shall we find out?
Here we come to the admirable speech made by my noble friend Lady Carnegy of Lour, who said that we have to start trying to think the unthinkable. What do the years ahead hold in the way of work opportunities? We are told of the possibilities such as work sharing and this kind of thing. I do not know. What we have to do is to set up some kind of an organisation, some commission or whatever it might be called—I almost said we need a crystal ball, but that is too fancy—to look into the future, using for the purpose the computer that has caused all the trouble, anyway. This commission could look into the future to see what the world will be like, because unemployment, as has been pointed out by several noble Lords, is going up. It does not matter how many more jobs are created, how many new firms come into being; unemployment is increasing because of high technology, new technology, the microchip and all the electronic horrors that lie ahead of us.
What can we look forward to? Who is to tell us? Where is Merlin? Where is Lao-tsze? Where is Cromwell? Where is Shumacher? Can the Government or somebody not think—it does not have to be the Government—how to find somebody to set up such an organisation? I am inclined to believe, without implying any personality, that a suitable person might be someone such as the President of the Royal Society to set up a kind of think-tank. But the matter is urgent. We do not know and we must find out—soon because time is running out—how to prevent this country from approaching the abyss which I believe it is doing at the moment. We must learn how to steer it away from that abyss, to keep it on the path and to restore it to the great nation that it has been. that it ought to be, that it will be, but which Scargillism would prevent it from being. By such means, if we can steer it away from that abyss, and away from the picket lines, I believe our future will shine in a way that it does not shine at the moment.
5.59 p.m.
Lord Molloy: My Lords, the quintessence of the Motion moved so ably by my noble friend Lord Cledwyn of Penrhos was to ask this House to recognise the,
"human misery and waste caused by current unemployment of labour and resources"
and to deplore,
"the lack of urgency shown by Her Majesty's Government".
To an extent, that debate has already been won. It has been agreed by both sides of the House. Nearly everybody who has spoken has shown something that ought to be done which the Government are not yet doing.
I wish to refer briefly to the speech of the noble Lord, Lord Young. I acknowledge immediately that he was in a difficult position, having only a short time in which to make a speech from the Front Bench in reply to the formidable delivery made by my noble friend Lord Cledwyn. But what Lord Young said struck me as being rather peculiar: that he had no time to show what the Government have done or what they intend to do. I am bound to say that not much time is
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required to say nothing much; and there was no point in saying it because there was nothing to be said. When the noble Lord, Lord Somers, quite rightly said that there was high unemployment in this country before this Government came into office for the first time, that is true. It was nearly a million. And when they were defeated by the Conservative Party, unemployment was being reduced.
Let us have a look at the arguments of the noble Lord, Lord Thorneycroft, which are always formidable until you examine them in some depth. He mentioned that period of from 1945 to 1951, when it would appear that the Labour Party was obsessed with ownership. We were not obsessed with ownership. Many of us had gone through the hoop of unemployment in the 'thirties. Many of us found it despairing, as I have said before, that it should have been Hitler and Mussolini who gave us our jobs back. Perhaps Lord Thorneycroft does not remember that. Many of us who served in Her Majesty's Services do.
When that Government came into office they quite rightly said that the basic fundamentals of this Great Britain of ours in a property-owning democracy must be owned by the democracy; the democracy is Parliament and Parliament will be answerable to the people. And so, were the great industries taken into Mr. So-and-so's ownership, into Lord So-and-so's ownership, into the ownership of a little group? No way. They were taken into public ownership on behalf of the British people. And it not only put Britain back on its feet. That policy, my Lords, put Europe back on its feet.
The Americans helped tremendously with money. Aneurin Bevan was sending white timber and scores of skilled workmen to beleaguered France, to Holland, to Belgium. even to Germany, to assist them to build up their bombed hospitals and bombed homes. I have to say therefore that that was the principle on which we then achieved the other end of the scale—under that Labour Government with their wicked nationalisation! Now there is patriotism for you, is it not? Fancy having not only the Navy owned by the people, the Army and the Air Force, but also—and so it should be—what has been lying under the ground for millions of years; so that no single person can claim that and say, "That is mine".
We in South Wales were brought up not to become multi-millionaires but to have compassion and to share. The best way of sharing was through a democratic Parliament, and the best that that Parliament could do to that end was to take industry into public ownership. Only when that principle was attacked in 1980 did we see the base of British industry fundamentally damaged, and then slowly the inexorable increase of unemployment. That is an irrefragable argument and cannot in any way be contradicted.
I want to turn very briefly to another aspect which has not been mentioned. When people say, for example, that there has been no deliberate creation of unemployment by this Government, then I say that perhaps they have not done it deliberately but they must have been terribly myopic if they did not know that some of the things they were doing were going to create unemployment. Let me read from the extremely Left-wing periodical, the Journal of the British Medical

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Association! It talks about a considerable waste of resources created by this Government; there are 700 junior doctors out of work. I do not think that this is a particularly nice thing for us to have to realise. We know that the British Medical Association carried out a survey during the summer to collect reliable information on the prevalence of unemployed doctors in their training grades. They were appalled to discover that more and more young doctors were being unemployed, sometimes for a month only—and that is a month too much. That any doctor can be on the dole for one month is a disgrace to this nation.
We did not start having this sort of thing until the party opposite came into power. And that has got to be acknowledged. It is no use to be mealy-mouthed about it. On these debates I have pleaded for trade unionists to be sensible. I have pleaded for the trade unions, the organisations of employers, some of our best minds in our universities, in banking and commerce, to get together to see if we cannot work out something to resolve this problem. But all these appeals have been ignored by the Government because they are too arrogant to think that perhaps somebody has got a good idea which would help my nation to rid itself of unemployment. I realise that unemployment in our National Health Service among medical and support staff is a shattering experience.
My Lords, I beg you to listen to this. The Department of Health and Social Security, to try to dodge the issue, no longer collects figures of the people and of the employees of the largest employer in Great Britain. It collects no figures to find out how many doctors, nurses and midwives are on the dole. That is a very brilliant way of dodging the issue. They shut their eyes in the hope that the problem will go away. If we were to apply this Conservative Government blindness to our armed forces we would not have even a couple of armed boy scouts. But that is what is happening to the NHS. If that were to be the attitude to the rest of industry—not to make calculations as to how many jobs we need, how many people are being thrown out of work—then we could not even have this debate. What this Government are doing is compounding venom with myopia.
To estimate the unemployment of nurses in particular one has to examine the manpower targets. In 1983 the Government introduced the manpower targets to massage and hide some of the figures in the National Health Service. The health authorities were instructed in 1983 by this Government to cut 8,000 jobs. Is it or is it not deliberately creating unemployment? That was the first cut ever in our National Health Service since that service was introduced by Aneurin Bevan, so ably helped in those days by my noble friend Lord Bruce of Donington. And the zealous authorities, the sycophants of this Government in the country, went better. They were told to destroy 8,000 jobs—the jobs of 8,000 doctors, nurses, midwives. These Tory tools did even better. They destroyed 11,400. These are the facts that the people outside know and which make them irritable.
I just want to say this, too: that in so far as an example can sometimes help. I should like very briefly to give an example of the South-East Thames NHS authority as a case in point. In 1983 the South-East
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Thames National Health Service authority sacked 1,500 people, 650 of whom were nurses. An accident? Not deliberate? Well, who is doing it? Who gave the order? Who gave the instructions to cut 650 nurses and put them out of work? Perhaps Lord Thorneycroft with his great influence will find out for us and let us know. The authority has no plans and they cannot do any more. They have been instructed, it is perfectly true, to try to increase nursing staff. They had cut too much. They say, "All right, we will do this, but we want extra money". The Treasury says "You cannot have extra money". So they are in a difficult situation.
I come back to the point I started with. We have got to say quite bluntly and clearly where grave and serious faults have been made—and I hope they have done that—and when that has been done the malice must disappear. I come back to my plea which I have made time and time again: that responsible trade union leaders, responsible people in commerce and industry, in Government and in Opposition should come together. Then, I believe, we can resolve this dangerous problem, dangerous not only to individuals but dangerous to my nation.
6.9 p.m.
Viscount Massereene and Ferrard: My Lords, talking about venom, I think that I have heard a most venomous speech. The noble Lord appears to think that wealth is provided only by public investment; but, of course, public investment has been the reverse of that, I am afraid. We have only to take the various nationalised industries. I do not want to go on in that sphere. I shall be very short because I spoke at length in the debate on the gracious Speech and then suggested some means whereby not all but certainly some unemployment could be cured.
It is forgotten I think that in the last few years the working population has increased a great deal. I believe it now stands at 24 million, and only last year—I think it was last year but it may be this year—the working population increased by 175,000. That means of course that the Government have to find 20,000 jobs a month in order to stand still regarding unemployment. I think that the Government, on the whole, have done very well, but we must realise that we are in an industrial revolution (if "industrial" is the right word to describe it) which is far greater than the industrial revolution that occurred in the middle of the 19th century. The noble Lord, Lord Molloy, must understand that the object of production, as I have said hundreds of times, is to produce wealth and not necessarily jobs. The theory is that when you produce the wealth you divide it out among the people through taxation to give them a far higher standard of living—which of course everybody wants, as I do.
As an example, if you take my employees—the few I have—they all have a high standard of living. They have very nice cars, they have ponies for their children, and their children have toys which I certainly was never given. I. like my noble friend behind me, was brought up in the days of only gas, and I had only a hip bath when I was very young. I remember the time when children had to walk to school, which was perhaps three miles away; and of course they were far healthier for it. We have now come to the condition

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where we want more and more all the time; and, of course, the more you give people the more they want.
I should like to turn for just a moment to the question of reflation, because I watched Mr. Heath on television about a fortnight ago when he made a speech at Tamworth, and he wants great reflation. Mr. Heath said, putting it simply, after all, businessmen borrow money to create work: they borrow and borrow. Why do not the Government borrow and borrow to create jobs? My Lords, you cannot compare businessmen with the Government, because businessmen, when they borrow money—and they know their job, or the majority do, although some fail, of course— they borrow it with the object of creating wealth. And if you create wealth you then create jobs.
With due respect to the Civil Service—and I have a lot of admiration for many civil servants—they are not trained to create wealth; they are trained to administer wealth. They are not trained to take ventures or anything like that. So when you branch into public expenditure you may be creating jobs temporarily but you are not creating wealth permanently. In fact, as history has shown us in this country, you are spending a lot of money, in the end to no purpose, which will eventually depreciate the currency.
We have only to go back a very short time. If you take 1972, which was when the "Barber boom" occurred, there was a Conservative Government at the time; but the Government then thought that by pumping into the economy vast amounts of new, printed money they would cure all the evils of unemployment. For a short time everybody was very happy, but the end was disastrous. We had a tremendous property boom. I am sure we all remember Slater Walker and various other firms like that; but in the end it was extremely bad for the economy. We have only to go a few years further on, when we get to Mr. Healey. Mr. Healey tried the same thing. He borrowed money—so far as I know, he did not print it, but he certainly borrowed it—and he borrowed more money than any other previous Chancellor. He even borrowed, I believe, more money than all the Chancellors of the Exchequer together from the days of Charles II. What happened? The International Monetary Fund had to take charge, and this country was in a very, very parlous state. We cannot cure unemployment, except temporarily perhaps, by printing or borrowing money.
I should like to say that the only way we can create more employment is by producing goods at a price which our customers will pay. If you think over the last three years, our wages have been 3 per cent. above prices—certainly the only country in Europe, and probably in the world, in that position. If you go on like that, you are on the road to ruin. The Government are quite right. They must not over-reflate: otherwise the result will be disastrous.
6.17 p.m.
Baroness Fisher of Rednal: My Lords, I shall be speaking mainly about the results of unemployment in the West Midlands. The noble Lord, Lord Balfour, a few weeks ago, when he opened a debate on unemployment, said, among other things, that perhaps I was to blame because I did not get the train
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and go to see for myself. May I say to noble Lords that when I leave this Chamber at the end of the week I go back to the West Midlands. I live in the West Midlands and so I do catch the train and I do know what is going on in that part of the country. It is a region which once attracted mobile labour on the promise of affluence and security, and it is now faced with the twin realities of lower pay and higher rates of unemployment than the national average. From May 1979 until the last few weeks approximately 600 factories have closed in the West Midlands involving something like 32,000 workers. The unemployment ratio at the present moment—that is, the number of men and women chasing jobs—is 27 to 1.
The West Midlands is not an area of feckless men and women who do not want to work. It is an area where the problems of unemployment have hit them between the eyes and they do not really know what to do. These are well-qualified workers who are in the greatest difficulties—perhaps even greater than those in some other parts of the country which are more used to unemployment. The West Midlands has changed from being an industrial heartland to being an industrial wasteland, and, compared with other regions of Britain, it is now notable as having the biggest rise in unemployment rate, the worst long-term unemployment, the largest cut-back in its employment base, the greatest competition for jobs and the lowest economic growth of the decade.
Only last week the noble Lord the Minister gave us details of regional assistance. The whole of the West Midlands is now eligible for selective regional assistance. The worst hit areas have failed to achieve development area status due to the choice of travel-towork areas as the basis for designation. If that is not massaging the figures, I do not know what is. I would ask the noble Minister who is to reply how many people travel from Ross-on-Wye and Cinderford to the West Midlands to work because they are in the travel-to-work areas of the West Midlands?
The change in Government industrial policy over the past few years, the 1984 Budget and the Autumn Statement give little encouragement to manufacturing industry; and service industries will not be feeding us in the future. It is of fundamental importance, in my view, not only to the West Midlands but to all the other manufacturing areas that the Government must not accept the swift decline of manufacturing in the United Kingdom as an inevitable fact of life.
We should also look at what we call the "transnationals" as distinct from the multinationals. Many of what we call "transnationals" were the very large industrial concerns that we knew in the West Midlands. Perhaps Dunlop is a case in point. I think it was the managing director, who perhaps was not very successful at the job but now has a post at the CBI, who was telling people how to run their organisations. Nevertheless he was able to sell Fort Dunlop to the Japanese. We are finding more and more that the transnationals have been restructuring their global operations at a very rapid pace. The world recession is helping them but great help also has been given to them by the Government because of the abandonment of exchange controls, so that they move out into the developing countries where low wages areas appertain and where, as we know, there is a lack of environ-

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mental controls. With their moving out from areas like the West Midlands there is a knock-on effect on what the noble Lord, Lord Thorneycroft, referred to as the new thrusting industries. These are the smaller companies that were supplying inputs and services to these larger organisations. When they move out what happens to those organisations is complete bankruptcy.
I should like the Minister to explain one point. I am serious about this because I cannot understand the Government's reasoning. The Government say that the better-off in the nation need to enjoy the extra affluence of tax cuts as a means of solving unemployment, while the less well-off, as a means of solving unemployment, should suffer wage cuts. If the noble Lord the Minister could tell me the Government's reasoning on that point I should be most grateful—that is, of course, if he heard what I have just said.
Have the Government the courage to say to those in well-paid jobs, to those who are directors of companies and seem to get an increase in their salaries every year equivalent to the best paid in the country, to those in the upper income bracket, "You have to forgo your income-tax benefits in order to give more hope to the millions without work?" The Government's phraseology about real jobs and about real wages upsets me very considerably because they never say that unemployment is about real people. All we get is statistics.
Many examples of Government policy have actually increased unemployment. I wish to look quickly at Government cuts in transport. In the West Midlands there is the famous factory of the Metropolitan Cammell Company which makes tube trains for London Transport and is also a very large bus contractor. This Christmas the company is going to have to make redundant more than 400 workers because of the virtual collapse of the bus market. This has occurred because the Government have phased out the 50 per cent. subsidy on bus purchases enjoyed by transport authorities. If they want deregulation, the Government are going to make quite sure that transport authorites are not going to be profitable in the future.
At the moment as a case in point, the West Midlands Transport Executive which was going to order 275 new buses in the next three years now expects to order only 100. Other authorities are taking the same line, and yet this factory of skilled work people, which supplied the Tyneside Metro Services that were taken up by the Hong Kong Government and used as their multi-transport system, is in this dilemma because of cut-backs in Government expenditure. I am talking about service jobs, but what worries me is that the Government do not understand what service jobs are. Many of them are in local authorities where there are real financial cutbacks. What we are finding is that our cities and our towns are showing quite obvious signs of neglect—potholes in the roads, uneven pavements, whole areas looking neglected because of lack of maintenance; in other words an obvious tatty look—
Noble Lords: Time!
Baroness Fisher of Rednal: If noble Lords will give me half a minute, I will draw to a conclusion. We have cutbacks in housing policy which have already been mentioned. My noble friend Lord Cledwyn pointed out quite clearly that in the Conservatives' election manifesto—we are always hearing what they are going to do, whether it is the abolition of the GLC or whatever; they are always saying, "It was in the manifesto"—there was a clear case that they would do something about unemployment.
Finally, other noble Lords have spoken about the loss of dignity felt by the unemployed. I would conclude with a very earnest request. I say to the Government, for God's sake listen to the large percentage of people who perhaps did not vote for you; in a democracy they also have a right to be considered. They are equally as important as the parents of students.
6.28 p.m.
Lord Harris of High Cross: My Lords, as one brought up as a Wesleyan Methodist, I am glad to join the noble Lord, Lord Soper, and others in acknowledging that there is a large moral element in all important economic issues; not least that of unemployment. I recall that Pascal taught us that the first principle of morality is to make the effort to think clearly. Therefore I make no apology from the Cross Benches in offering a critical comment on both the Government and Opposition approaches to unemployment, from the strict standpoint of a Cambridge economist brought up some years ago, before Lord Kaldor, on the great Maynard Keynes. If you will dip into the opening pages of The General Theory you will find that Keynes never supposed that all unemployment could be mopped up by the simple expedient, beloved of the Labour and Liberal Parties, of increasing Government spending. Keynes acknowledged very explicitly that there were several distinct categories of unemployment, each with separate causes and different sorts of remedies. Indeed, his own central novelty of stimulating demand was put forward as appropriate only in the special case where the job situation was due to a deficiency in total spending. Thus in the slump of the 1930s, when even Milton Friedman agrees there was a massive absolute fall in the total demand, increased money would have drawn idle resources and labour into employment.
The whole crux of the argument is that today's circumstances are quite different. There has been no contraction in monetary demand since 1979. There has been a slower rate of increase in the monetary aggregates necessary to bring down inflation from 20 per cent. to below 5 per cent. But it is not plausible for any speakers in this House to argue that a further increase in Government spending of a few billion pounds—representing 1 per cent. or 2 per cent. of the national income—would make any significant dent in unemployment which is now running above 10 per cent. of the labour force. The crucial distinction fudged by such proposals is between raising nominal demand, as measured in money, and the real effect as measured by goods and services that money will buy.
Therefore, my argument is that even if a 1 per cent. or 2 per cent. increase in spending gave some small

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fillip to employment, there would be no lasting relief because we should see interest rates soaring and costs and prices resuming their upward movement, so offsetting the increase in monetary spending. I therefore agree with the Government that there is no alternative to persevering against inflation; but I urge the Government that there are additional policies to their central strategy that could help to relieve the scourge of unemployment.
If we go back to Keynes we find he acknowledged two other main categories of unemployment which I think are more applicable to our present malaise. The first is frictional, or structural, unemployment caused by a mismatch between available skills and those required by changing markets and techniques. This has nothing to do with the volume of demand, but calls for policies to improve training and mobility along the lines that the Government are struggling to develop.
Even more important, to my mind, is Keynes'third category where, again, manipulation of demand can do nothing to help and may, in fact, make things worse. This last category Keynes defined as "voluntary unemployment". It was an inexact use of language. In ordinary parlance, what he meant by "voluntary unemployment" was where workers are unable or unwilling to accept a wage reflecting their market value. My case is that most unemployment today is voluntary in this strict Keynesian definition. So, far from yielding a Marxian surplus value, too many prospective jobs offer a negative value either to the worker or to the frustrated employer.
Keynes explained that voluntary unemployment arose,
"…as a result of legislation or social policies or of combination for collective bargaining or of slow response to change or of mere human obstinacy…"
He is saying that the causes of this unemployment are nothing to do with laissez faire or the uncontrolled capitalism that haunts the fevered brains of the Tory wets and others. This cause of unemployment arises from gross Government intervention with market forces. I am not saying that it necessarily follows that Keynes would be sure to join me in urging the present Government to abolish wages councils, to abolish rent control, to further curb trade union privileges, to curb employment protection and so-called equal pay, or to reverse indiscriminate welfare and the mounting taxes and national insurance necessary to pay for them; although I recommend all those policies as helping to reduce unemployment.
But there can be no dispute that what Keynes was pointing out in this early section of his General Theory is that social policies so beloved of the wets, if I may say so, of all parties are bought at the price of unemployment being higher than it would be in a freer and more flexible labour market. One can make one's choice in the matter. The dilemma for the Labour Party is like that of a rather over-amiable doctor who has administered excessive doses of what might be called social painkillers and then turns ugly when the side effects show up as impairing the patient's ability or inclination to work.
I ask your Lordships to ponder a specific example of a Mr "F", with his wife and two children, who works at Uxbridge for £96 a week. Family income
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supplement, child allowances and housing benefit lift his gross income well above £120 a week; but after taxes and national insurance and allowing no more than £5 for work expenses, Mr "F" is left with what is technically called, by those who understand these matters, a net spending power of almost exactly £80 a week. Against that, if he decided to opt for Keynes' voluntary unemployment, on supplementary benefit he would get, on the latest reckoning, £77.70. Therefore, he is working for 40 hours in return for a net gain of £3, which is just short of 8p per hour. If he earned a little less, or if he had three children, or if he had higher work expenses, he would actually be worse off working than taking social benefits. If he were a single householder with his £96 a week he would be only about £10 a week better off working than taking benefits. My Mr "F" has chosen to work, but there are well over a million people in very similar circumstances who might currently inflate the official unemployment statistics although they are hard at work in the underground economy.
A combination of easy indignation and easy money will do nothing to relieve the misery and waste of unemployment. Sooner or later we shall have to tackle the issue of work incentives for both the worker and the employer. We shall have to contemplate a radical overhaul of the labour market, including far-reaching changes in the whole topsy-turvy tax benefit system. I would certainly welcome, in the terms of the Motion, more urgency from her Majesty's Government in those directions. However, I shall probably not be lured into the Lobby with the Labour Party, because I must say that, unintentionally and over a long period of years, they have sown the bitter fruit which we are now reaping. If the noble Earl is short of a vote and will hold out some hope of action, for a start, on the matter of wages councils, I will thank him in the Lobby.
6.37 p.m.
Lord Belhaven and Stenton: My Lords, the House is debating a very serious problem and it is right that the noble Lord, Lord Cledwyn, should draw our attention to it, but I think it is fair, in considering the terms of the Motion, to ask not just what Her Majesty's Government are doing about unemployment but what Her Majesty's Opposition are doing. Having listened over 20 years to many debates of this kind in this House which have been moved by the Opposition, I have never in my experience come across a worse case of the pot calling the kettle black. Therefore, I come back to the question: what contribution is the Labour Party making to the problem of reducing unemployment? I do not just mean words. We can talk until we are black in the face and make every sort of suggestion, but in this situation there is surely an obligation on those who have power—and although not in office the Labour Party certainly has power—to do all they can to mitigate the situation, regardless of party advantage or the prospect of office.
I make no apology—because others have mentioned it—in referring to Motions enthusiastically carried at the Labour Party conference and at the TUC supporting the striking miners—not the working miners. That support continues to this day and is forcing people who want to work and who want to earn a wage for their

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families not to do so. Moreover, it is wiping out jobs throughout the country.
The noble Lord, Lord Jacques, and others, spoke about a consensus; but what sort of consensus is this? Only yesterday it was reported in the press that British Steel had lost £245 million and it was stated that that is a direct result of the miners' strike, which Her Majesty's Opposition are currently committed to supporting. What effect will this have on the jobs of the steel workers?
There is continuing agitation to impose an embargo on coal and oil going to our power stations. If that were to be effective, millions of jobs would be wiped out, millions of people would freeze and millions would possibly even starve and die. I cannot conceive of anything more wicked than this continuing attack on the power stations which supply the very lifeblood of our modern nation.
Then there was the dock strike of last summer, which was of short duration thanks to the common sense of the dockers and not of their leaders. I was briefly involved in a situation where a number of buyers were brought to a dock to inspect a consignment of timber which had come from a long way away, and who were prevented by union officials even from going onto the dock to look at it. What sort of contribution is that to the problem of unemployment?
In another case not directly related there are civil servants in secure jobs who are refusing to do their work and thereby putting millions of old-age pensioners at risk. If they had their way, those pensioners would not get their pensions at all. In all these cases—miners, dockers and civil servants—those who are striking and disrupting the economy are well off. They are far better off than their fellow citizens who they damage and impoverish by their selfish actions. People are sending food parcels to the striking miners. I would make a suggestion. The poverty of most striking miners is self-imposed. Surely it would be better to address those parcels to their victims—the people they have driven out of work.
Finally, this nation cannot afford to go on living like this. We are too dependent on each other in this new era to be able to indulge in this constant social and industrial anarchy. Strikes which were once directed against the moneyed classes are now directed against the poorest people in the community and those least able to stand up for themselves. I would appeal to the party opposite at least to try to see that that is so; that industrial action taken by people like miners and civil servants who have secure jobs damages the unemployed and the poorest in the land—the very people whom the Labour Party was originally formed to protect.
6.42 p.m.
Lord Kaldor: My Lords, I am in agreement with the terms of the Motion, but I am afraid that I am not in agreement either with those who believe that the problem of unemployment can be substantially dealt with merely by returning to the same techniques of demand management which maintained full employment for 20 years after the war, or with some of the previous speakers like the noble Lord, Lord
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Harris, who think that the present unemployment is voluntary and will disappear if greater incentives are given or wage rigidities are lessened. I believe that the basic causes of our present unemployment are external to our economy and not internal. I am surprised that nobody has—at least in my hearing—brought that out.
The fundamental reason for our heavy and growing unemployment lies in the inferiority of British manufacturing industry in relation to most other industrialised countries and the consequent shrinkage in the growth of our exports and the rapid rise of imports of manufatures. This is a very long-standing process. I shall deposit in the Library some graphs and tables to show that it began in 1885. Since then our share of world trade has been diminishing at a constant geometric rate. In other words, the process began 100 years ago.
Yet as recently as 1954 we were fundamentally in a viable position because our net exports of manufactures were sufficient to pay for our net imports of everything else; that is to say, of food, beverages, fuel and raw materials. We were thus in a viable position, even though that position entailed an acute labour shortage—not unemployment but a labour shortage—which required us to allow the importation of labour on a large scale from the new Commonwealth countries, as well as from Ireland. Our labour force was supplemented in that way with certain social consequences.
But since then, since trade was liberalized, our imports of manufactures have increased far more rapidly than our exports. In the last 30 years the volume of our imports increased 12 times, whereas the volume of our exports increased less than three times. As a result, our net position has become a great deal worse. Import penetration, by which is meant the share of imported goods in final domestic demand, has increased in the last 30 years from 5 per cent. in 1953 to 33 per cent. in 1983. At the same time our share of world exports of manufactures, which was 20 per cent. in 1954, fell to 10 per cent. in 1979, and was only 7.2 per cent. in the third quarter of 1984. No wonder that in the circumstances our manufacturing industry could grow only very slowly. Indeed, in the last 10 years the slow growth has turned into an absolute decline. This year the output of our manufacturing industry will be 13 per cent. lower than it was in 1973, 11 years earlier.
But for the fortunate coincidence of North Sea oil we should be in a most catastrophic situation already. We were heading towards a catastrophic situation. But even with North Sea oil at current levels, a major crisis will merely have been postponed and not avoided altogether if the present situation is allowed to continue. We had increases in import penetration, particularly in engineering products, of the order of from 5 per cent. to 40 per cent. or 5 per cent. to 60 per cent.—that was in mechanical engineering. instrumental engineering and electrical engineering. I mention those examples because the buyers of those products are themselves industrialists. The goods are for industrial use, and their buyers are careful and expert judges of quality.
Moreover, the situation is worsening. In the past three years imports of manufactures into the United Kingdom increased by 44 per cent. in value and 19 per

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cent. in volume. Exports of manufactures from the United Kingdom increased only by 14 per cent. in value and decreased by 7 per cent. in volume between 1980 and 1983. The reappearance of unemployment which began in the late 1960s is more than fully accounted for by the decline in manufacturing, which lost 3 million or one-third of its labour force.
Mr. Lawson said the other day that unemployment is caused by workers,
"pricing themselves out of jobs".
In the British context that, I think, is the silliest remark ever made by a man in his position. I suppose that he would equally say that our post-war labour shortage which lasted 10 or 15 years was due to the failure of the trade unions to price people out of jobs. They priced themselves too much into jobs, and that is why we had the labour shortage. It is not the workers who are at fault; it is their employers who have allowed themselves progressively to be driven out of markets on account of their failure to produce goods of quality and design comparable to those of other countries. Their minds are much too preoccupied with financial manipulations in the City—with mergers and takeover bids—to give much thought to such tedious and slow maturing tasks as product development or design improvement, which are the bases on which industrialists of other countries compete in the world market.
However, the public appears to have a far better appreciation of the nature of this problem than do Her Majesty's present Ministers. Recently a reputable research organisation found that the greatest percentage of those questioned on how to solve Britain's economic problem thought that the introduction of import controls was the only effective remedy. This view was remarkably uniform across the political, and even the social, spectrum—72 per cent. of Conservative voters, 72 per cent. of Alliance voters, and 73 per cent. of Labour voters were in favour of import controls. They thought that import controls were the ony thing that could solve our problems. Again, I shall deposit in the Library the table in the book from which that is taken. As against that, the Government's favoured remedy of reducing spending on health and education was favoured by only 15 per cent. of Conservatives, 6 per cent. of Alliance voters, and 13 per cent. of Labour voters.
For my part I am convinced that the 72 per cent. of voters in favour of import controls are right. Sooner or later we must, and we shall, overcome all our prejudices in favour of free trade and renegotiate our various obligations which stand in the way. The question only is, when. Will it be when unemployment reaches 5 million, or 7 million, or 10 million? All these figures are within the realm of future possibilities if nothing is done to reverse current trends as between import penetration and the continued fall in our share of world exports. The end product is the 19th century version of the dole—mass emigration. Without a manufacturing industry, much the greater part of the inhabitants of these islands will have to emigrate in order to make a living. It is not a very cheerful prospect.
6.52 p.m.
Lord Campbell of Alloway: My Lords, it is always a pleasure to follow the noble Lord, Lord Kaldor.
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However, I hope he will forgive me if I confess that his geometric graphs going back to 1885, which he is going to put in the Library, will be really quite beyond my limited comprehension.
What I should like to do, if I may, is to try, as best I can, to meet head on the core of the criticism which inspired the noble Lord, Lord Cledwyn of Penrhos, to move this Motion. He makes, on analysis, two fundamental assumptions, or rather assertions. Recognising (as he did) that our fiscal, economic and employment policies are but facets of a single general strategy, the noble Lord, Lord Cledwyn, asserts that this strategy is not only unworkable, but is not working.
Secondly, the noble Lord asserts that the policies of Her Majesty's Government are wanting in urgency, in imagination and in resilience—this because we should spend our way out of unemployment by spending on what are called "undoubted national needs" or, as he put it on another occasion, "major works on the national infrastructure". These are somewhat subjective concepts, like beauty in the eye of the beholder, for you will search the OED in vain until you reach the supplement, only to find a definition of "infrastructure" which is largely inapposite.
To meet this assertion—and I want to try to meet the criticism—we could perhaps treat work on the national infrastructure as including the maintenance, modernisation and erection of installations concerned with means of transport, communication and energy. We could also include institutional buildings, such as prisons, hospitals and law courts; public services, such as sewers and water; social services; our voluntary institutions, including civil defence; and perhaps even the housing stock, to which the noble Lord, Lord Seebohm, referred.
It is not easy to define terms. If some such definition were acceptable, then we have to take into account—do we not?—massive subsidies to state-owned industries, such as the coal mines. We must also take into account that roads expenditure is up 12 per cent. this year on last year; that there is £300 million to be spent on the electrification of the railways; that the expenditure on new prisons, hospitals and courts is far greater than ever before under any previous Administration; and that, as for our old friend the sewers, some £800 million is to be spent this year. The point is made that there is no evidence of any cut back on expenditure on the infrastructure; quite the reverse.
On what infrastructure project should the Government spend? Without some specific proposal, we would beat the air with verbiage. Without some proposal relating to need, cost, job creation (whether permanent or temporary) and the inflationary impact on the economy, we indulge in discussion, but to no great profit.
One such project which calls for examination was raised in The Times on 27th November by my noble friend Lady Airey. This concerns orders for two new AGR nuclear stations in an area of high unemployment, giving four years' work for 70,000 men. But let it not be supposed that any project-by-project approach could ever provide work for the real unemployed—about 1.2 million, 60 per cent. of

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whom have no manual skills. I do not refer to the unemployed in transition, who change jobs at the rate of about 6 million job changes a year. The real unemployed—I assume they total 1.2 million—excludes those who are medically unfit to work and the work-shy, to whom the noble Lord, Lord Harris of High Cross, has just referred, who find the differential between living on social security and earning a living too meagre to warrant the effort.
As for the real unemployed, some 700,000 are being helped by various training schemes. This is at a cost of £2¼ billion. Some 130,000 are being found work with voluntary associations or in local authority projects under the supervision of MSC—this at a cost of £214 million. To open up more training for about 10,000 a loan scheme is being set up at an initial cost of £5 million. To enable the unemployed young people to set up on their own an allocation of £72 million is proposed for 1985–86 to provide for an intake of 1,250 new entrants each week.
On Government general strategy, if we are to achieve any substantial and lasting reduction in unemployment. it is essential not only to increase productivity, but also to retain confidence in the stability of money. Is it of the order of compassion to deprive a man of training for a real job by creating some make-believe job? That would be but a callous exercise in cosmetics, a political placebo, a cruel deception. As my noble friend Lord Young said in opening, the unemployed deserve more honesty than that. Is it of the order of compassion to follow the advise of the noble Lord. Lord Barnett, which he gave on the fourth day of the debate on the gracious Speech: spend our way out of unemployment on the back of a huge budget deficit? That would be to land us up with out begging howl in the corridors of the IMF.
My noble friend Lord Alport's forensic nightmare, in which he conjured up my right honourable friend the Prime Minister in the guise of some deranged monetarist fairy queen distributing this largesse of dragon's teeth to destroy society, is no doubt good material for Christmas pantomime. One wonders to what extent this merges with the noble Lord, Lord Cledwvn's, assertion that Her Majesty's Government are using oil money to keep people on the dole, or with the noble Lord, Lord Molloy's, concept that the policies of Her Majesty's Government are a compound of venom and myopia.
These policies of Her Majesty's Government on training the unemployed, on helping the unemployed to set up on their own and on the provision of work on the infrastructure are resilient, are imaginative and. Indeed, are sound. They not only recognise the human misery and waste which all of us condemn on all sides of your Lordships' House, but also afford relevant and urgent remedial action that is both general in terms of cash and compassionate in terms of humanity and fairness.
7.2 p.m.
Lord Kilmarnock: My Lords, in practically every opinion poll on issues of concern to the public over the past five or six years unemployment has come top. Yet the mood of the country on the subject has fluctuated
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considerably. Perhaps the period of greatest alarm was when the figure was pushing 1·5 million, or about three times Beveridge's allowance for frictional unemployment. It was about that time—in 1978, I think—that the noble Lord, Lord McCarthy, sounded the alarm in a notable debate in your Lordships' House in which he conjured up memories of the Great Depression. Then, in late 1979, your Lordships Select Committee on Unemployment was set up under the chairmanship of my noble friend Lady Seear. During the committee's two-and-a-half years of life, unemployment doubled again.
By the time the committee reported in May 1982, the country, after a frisson caused by the events at Brixton and Toxteth in 1981, seemed to have settled into something that was not quite acquiescence but certainly fell far short of revolution. I think that it was during this period, the early 1980s. that the Government won the propaganda war and gained considerable acceptance for their claim that it was all the fault of the world recession abroad and the unions at home and that it was quite beyond their power to do anything about it except to pursue economic policies that would lead to an upturn and thus eventually to more jobs. I believe that the country swallowed this and gave them the benefit of the doubt. This was certainly so at the last general election. Neither the Labour Party's claim to be able to put 2 million people back to work within the lifetime of a Parliament nor the Alliance's more modest bid of 1 million was taken seriously. The climate of resignation was then at its height.
I believe that that climate has changed. The wind is beginning to blow quite sharply from another quarter. In the first place, more and more people are coming to question the Government's economic theory. They note the achievement of bringing down inflation to a steady state of about 5 per cent. but they also note that repeated assertions that unemployment will eventually decline too have simply not been borne out.
The Government claim a small increase in the total number of jobs in the economy but their critics note that there is a rising number of people after them and that the net balance is not better than before. The noble Earl, Lord Cork and Orrery referred to this. Indeed, it is rather worse. Therefore, accepting that we are going to have to live with the Government for two or three years to come, various bodies and individuals have been coming forward with proposals based on the proposition that a good deal could be done without a sea change in economic policy. We might perhaps call them damage limitation proposals.
Back in 1982, the Unemployment Committee adopted the plan of the noble Lord, Lord McCarthy, for long-term, low cost. group specific, net job creation—a mouthful that none of us could ever get out in the right sequence but which meant 400,000 additional jobs in public sector and voluntary sector welfare and amenity services. Many more suggestions have been made here this evening although time does not permit me to go through them. Some of these suggestions involve small increases in public borrowing and some larger ones. But all, I think, fall well within the range considered normal by other and more successful European economies. The noble Lord, Lord Harris of High Cross, in dismissing those

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who want investment in the infrastructure for the purposes of job creation, entirely overlooked how badly these jobs need to be done.
But none of these measures is likely to be adopted because the Government's expenditure plans are set, if not in concrete, certainly within very narrow limits of tolerance as we saw the other day when the Secretary of State for Education and Science had to finance his climb-down over student fees by clawing back a bit from university laboratory equipment, a bit from the proposed increase to the research councils, a bit from poor old long-suffering adult education, and so on. So, if there is no give, no flexibility in the Government's present attitude, where can we look for some movement, some hope in this sorry situation?
We have to look, I think, to the moral dimension. Politics is not only a matter of economics. And the morality of the Government's stance is being called increasingly into question. After five years in which economic theory has failed to halt the rise in unemployment, people not unnaturally turn to the moral issues. This, I believe, is where the real change of climate has occurred. The right reverend Prelate, the Bishop of Southwark, referred to a change in the national consciousness—I think that was his phrase—and he has something there. Morality is not some airy-fairy concern of a few academics or even churchmen. It is the bedrock on which we construct the practical rules that guide our conduct. It lives and breathes in the judgment and actions of ordinary men and women. It is a very close relation to common sense. If the Government are tempted to believe that morality has little to do with political economy, they are deluding themselves and blinding themselves to history. I think that the noble Lord, Lord Harris of High Cross would agree.
If Adam Smith is prayed in aid, the Government will do well to recall that he was the author not only of The Wealth of Nations but also of the Theory of Moral Sentiments, in which he largely adopts Hume's view that sympathy with one's fellows is one of the most important springs of human action. The famous "invisible hand" was not intended to represent the interplay of unrestrained impersonal economic forces but rather the hand of providence behind the process whereby wealth is passed from rich to poor via consumption and investment. It is not all that distant in conception from the Keynesian "multiplier".
In any case, Adam Smith was writing for a society of farmers, craftsmen, merchants and small manufacturers before the Industrial Revolution got under way. With his 18th century love of harmony and of the proper working of all parts of society, there is every reason to think that he would have been appalled by the imbalance, disutility and "deformity"—that is one of his favourite words of condemnation—of our present system. As a Scot, albeit a London Scot, I challenge the way in which one of the greatest luminaries of the Scottish enlightenment has been hijacked by the "New Right".
If we move forward to 19th century utilitarianism, we find that Bentham's early model, in which the greatest happiness of the greatest number is seen as a by-product of self-interest, is replaced by Mill's version in which the individual is exhorted to take the
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general happiness as his ultimate end. If your Lordships ask me why I am dwelling on these old moralists, economists and political philosophers, it is simply to demonstrate to the Government that they have precious little foundation even within the British empirical tradition—the tradition of Bacon, Hobbes, Locke, Hume, Smith and Mill—for the pursuit of their divisive policies and for their refusal to consult the interests of the British people as a whole.
So where have they turned for inspiration? Having rejected our native tradition, who have they chosen as their advisers? They have turned, have they not? to foreign gurus. They have turned to von Hayek and to Milton Friedman and for all I know the Prime Minister may dip into a few pages of Mr. Robert Nozick before she switches off her light at night. But the British people will expect a British Government to follow British traditions and British principles. And if at the end of the day they do not do this, they will not be forgiven.
Before I sit down, because I do not want to take more than my ration—I think that we are running within our time—and the noble Lord, Lord McCarthy, gets up to speak, I have a swift word for the noble Earl, Lord Gowrie. In his speech during the debate on the Loyal Address he made an urbane and ingenious—as we expect of him—but ultimately unconvincing defence of the Government's economic record in which he claimed that everyone would be delighted with the Government's economic performance, positively purring over it, were it not for the minor peccadillo of unemployment, which he then neatly set on one side in order to get on with the more important business of presenting his catalogue of the Government's achievements.
The Chancellor of the Duchy of Lancaster and Minister for the Arts (The Earl of Gowrie): My Lords, I never used the words "minor pecadillo".
Lord Kilmarnock: I did not suggest that the noble Earl had used the word "pecadillo". It was the word that I chose to indicate the tone of his reference to that subject. This was tantamount to staging a performance of Hamlet without the Prince of Denmark. This evening, he will not be able to get away with that. It is now incumbent on him to give us good reasons why we must accept 3 million to 4 million unemployed for the foreseeable future. He has the last word, and we shall listen to him eagerly. We admire his intellect and wit and we hope his argument is worthy of them. If he unveils any substantial measures to create jobs, or gives us any hope of a re-ordering of Government priorities, we may stay our hand and abstain. But if he does not, despite the policy differences between us and the Labour Party, we shall vote for the Motion on the Order Paper.
7.10 p.m.
Lord McCarthy: My Lords, this has been, on the whole, a good-tempered, relevant and well-meaning debate. In the time available to me I cannot hope to sum up either the case on our side of the House or the arguments set against it in other parts of the House. I should like to say very quickly one or two words to those of us who I am afraid I would argue, with great respect, have introduced an irrelevancy into this

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debate. This is not a debate about who is to blame for the miners' dispute. It is not a debate about the effects of this dispute on unemployment in this country. If anybody wants us on this side of the House—and me in particular—to agree that the miners' dispute, and the consequences of the miners' dispute, are disastrous for the economy and for unemployment, I am pleased to do so. But if anybody wants us here to come down and accept the Government's arguments that the National Union of Mineworkers in general, and Mr. Scargill in particular, are the only ones to blame for this dispute, then he has chosen the wrong people and, with great respect, he has chosen the wrong debate.
Therefore, I should like to turn to the debate itself. As I say, I should like to try to discuss and argue about areas of agreement and disagreement, about the Government's own policy and why we think it is wrong, and about what we think should be done. It has been said on several occasions tonight that there is a degree of imprecision about what we think should be done. I should like to say what I think should be done, not simply by a future Labour Government—because that is some time away—but by this Government, now, at this moment.
First of all, I think we have had a very wide area of agreement, not simply on the Labour Party side but from speakers in all parts of the House. In this respect, I note particularly the speech by the noble Lord, Lord Alport, about the nature of the problem, about the state of the economy—we are in the middle of an unstable, uncertain partial recovery—and about the fact that nobody really believes that for the foreseeable future unemployment is going to get better. Indeed, in this respect we have more agreement in this House and in the other House than we have had in the past, because now, at last, the Chancellor, unlike the Chancellor last year and unlike the previous Chancellor at all, accepts that unemployment is going to rise and go on rising; he says it will rise by 150,000 a year, next year. The Select Committee in another place does not agree. Most independent assessments think he is under-estimating. But at least the Government agree with us—and there is agreement tonight—that unemployment is not going away and is getting worse, on the present policies, for the foreseeable future. I regard that as an advance in realism.
Secondly, there is an agreement—and we agree with the Government, because they have made it clear enough—that so long as this Government are in office, on their present policies, as has been said by speakers on the other side who accept the Government's policies, nothing will be done at the macro level to improve the position. The Chancellor made it very clear in his Mais lecture that this Government believe that you cannot improve the unemployment position by trying to raise the overall level of demand. The job of macro policy, he says, is to pursue lower inflation. We believe, of course, that in pursuing lower inflation he pursues it through permanent high unemployment; but that is a disagreement between us.
What is agreed is that, in so far as the Government have any policies—and they have told us tonight that they have some policies; no doubt the noble Earl will tell us again about them—they are all on the macro level. They say, "We are going to make the labour
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market work; we are going to make the labour market more efficient; and, indeed, that's what we have been trying to do since 1979". We have had trade union legislation, which is now admitted to be aimed at reducing union power. We have had the abolition of the national insurance surcharge. We have had reductions in employment protection coverage. We have had the abolition of fair wages resolutions; and the Chancellor says, "We are now selling council houses".
That is the Government's policy so far, unless the noble Earl will announce any more policies at the macro level for dealing with the problem, which they now recognise is getting worse. Several things can be said about them. First of all, of course, they have not helped so far. I do not say that these policies, which have been there for the last five years, have made the situation worse, but they have not made it any better. All the suggestions which are made in this House and elsewhere for going further along those lines, we argue, will not necessarily make it any better, either—abolishing wages councils, as they abolished the fair wages resolutions; abolishing rent controls; abolishing the Employment Protection Act; even the notion of the noble Lord, Lord Young of Graffham, for some form of industrial conscription. None of this is going to help because it is all a supply side solution. It all assumes that the problem is that people will not work. It all assumes that if only you can get wages down or get unemployment benefit down, people will flood in, in a country where the ratio of unemployed to jobs is something like 30 to 1.
We say that is not realistic. But I must be fair. The Chancellor does talk about other things. He says that the unions or the workers—it is not quite clear who—should reduce money wages; in fact, they should reduce real wages. Indeed, he told the Select Committee in another place that there was a mysterious—mysterious because it is unpublished and unquantified; but it is coming—relationship between a 1 per cent. cut in nominal wages and the reduction in unemployment of 200.000 a year; so that if you could have a 3 per cent. cut in nominal wages for three years, he says, you could have an increase of something like 1½ million in employment. I say with certainty that I know of no research into this and I know of no serious academic anywhere who produces figures of any kind at all in this region. It will be very interesting when the Chancellor publishes his figures; and I am not a bit surprised that it is taking rather long.
We shall also be told, of course, about what happened in America. We are being told constantly that there have been real wage reductions in America, that money wages have been reduced and that, as a result, employment has risen. The facts, of course, are quite different. As the noble Lord, Lord Kaldor, said in a previous debate in this House, there has been no real wage reduction; there has been a money wage reduction; and the main reason why there has been a money wage reduction is that there has been a 30 per cent. increase in the size of the labour force in a period when we had a 5 per cent. increase in the size of the labour force. Two-thirds of the increase in employment was brought about in two periods when the Governments concerned were following something very like Keynesian economic policies.

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So I come, finally, to the last thing the Government will say, to be fair to them. We all know that they will say that in April there is to be a tax cut. As I understand the noble Lord, Lord Young of Graffham, a lot of people have shown some doubt about the relationship between employment and tax cuts and employment and public spending. I would like to know the evidence upon which the Government are so sceptical?
The Institute for Fiscal Studies recently published their budget options for 1984 in which they computed, as my noble friend the Leader of the Opposition said, a relationship between the employment effect of tax cuts and the employment effect of public spending cuts where for similar amounts of money tax cuts would produce something like 30,000 jobs a year and public spending about 185,000 jobs a year. I say to those noble Lords who believe that that is not much use because there will be an increase in prices—as was argued—that the Institute for Fiscal Studies also argued that tax cuts over that period would produce a 1.1 per cent. increase in prices and public expenditure increases would produce a 0.8 per cent. increase in prices. Are the Government seriously suggesting to us that tax cuts will produce as many jobs as increases in public expenditure? Is that what they are telling us? Are they telling us that all the economic analysis is wrong, that the Institute for Fiscal Studies is wrong, and that subsequently they will publish information to tell us so? They must be careful because they are going to make those tax cuts, and 12 months after they have made those cuts we shall want to know where the jobs are.
When the noble Lord, Lord Young of Graffham, last spoke in this House he said—and I rather liked it—that he was a remover of barriers, a remover of obstacles. There is no barrier now, there is no obstacle now except ideology. The majority of speakers in this debate have criticised Government policy and have opted for something similar to a select increase in public expenditure of the type put forward by the Opposition parties. That is what is wanted by the wets in the Conservative party; that is what is wanted by the CBI. The barrier is one part of the Conservative Party—that part which is in office; the barrier is ideology; the barrier is bigotry; the barrier is a refusal to admit that they were wrong.
7.22 p.m.
The Earl of Gowrie: My Lords, this debate has been very useful in demonstrating the concern felt by the House for high and rising unemployment, which is, of course, a social and economic evil that we must fight with all the force at our command. I must say, however, that parliamentary debates urging compassion and concern are not enough—as my noble friend Lord Belhaven reminded us in a very trenchant and admirable speech—because our words butter no parsnips and they generate no jobs.
Britain is a trading economy and that was the central lesson of the speech of my noble friend Lord Thorneycroft. We earn our living and we earn, therefore, our jobs in the market-places of the world. Moreover, it is in markets, whether at home or abroad, that our jobs are lost and won. At present we are
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indeed winning markets and winning jobs. So we are doing better, both absolutely and, as my noble friend Lord Young told us, in terms relative to our competitors. I believe that the noble Lord, Lord Cledwyn, does no justice to his own case by refusing to acknowledge this.
Economic growth has been restored to this economy. We have been growing, and growing with progressively lower levels of inflation, for four successive years now, and we have been growing at rates not seen since the Macmillan era—a time when world trade was generally more buoyant. So we are doing quite well, but we must do a lot better. We are in great danger of ceasing to do well and of not doing better mainly, in my judgment, through political pressures.
It is an old story. Britain is the oldest, stablest and greatest political democracy. But too often our political sensitivities interfere with the competitive cutting edge that we need to maintain market shares at home and abroad. That was the point put so well by my noble friend Lady Carnegy of Lour.
My Lords, ask yourselves one or two simple questions. Since the war has the politics of our country concerned with industry and industrial relations been principally aimed at maintaining or increasing industrial market share? Or has it been mainly concerned with social and political issues? My noble friend Lord Beloff posed that question with his usual pertinence. We care rather more in this country about the distribution of the cake than we do about its size. That is changing now.
Or, my Lords, ask this question: on whose shoulders are the present burdens of unemployment falling? Leaving aside the young, who we all agree we should take off the labour market and into training wherever possible, overwhelmingly the burdens are falling on the shoulders of middle-aged, male, industrial workers. They are the victims of previous decades of labour protectionism and of rates of pay negotiated without reference to market share, as my noble friend Lord Campbell and others reminded us. They are the victims of the politics, rather than of the economics of our industrial culture. Well, slowly and painfully that, too, is changing.
Under this Government, if you strike you are unlikely to be rewarded. Let me say to the noble Lord, Lord McCarthy, that I agree with him that it will take a sea change in British attitudes substantially to reduce unemployment and this is because taxpayers in productive work can no longer afford to maintain indefinitely out of their taxes industries which are losing market share. In the main, that is what all the pressures and upheavals in our traditional labour markets are about; they are not about Locke or Hume or even Hayek or Milton Friedman. Because we are British, the pressure on industry to become competitive is being applied in what is still a relatively gentle way. It is, I confess, being applied if anything rather too gently for my own taste. We are still subsidising industries which have little hope of regaining market shares. I know that the noble Baroness, Lady Fisher, would disagree with me, but in my view it would be more compassionate and also a great deal less expensive, to direct that money directly

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to the individuals affected by the decline of industries in which they work, and, under the "buy out" policy, to some degree that has been done.
Ask yourselves just one more question. Is the British educational system primarily directed to serving the British economy and to turning out men and women who could help regain the losses in world markets which have cost us jobs? I used to work in that system and I loved it. I left it because I thought that it was not serving our economy.
We are an agreeable people and this is a very agreeable country in which to live. But if we fall back into our old ways, if we alleviate the pressures which this Government have already—albeit, in my view, rather too gently—applied, we shall, in the early years of the next century, stand rather in the same type of economic relation to the economies of the Far East as Turkey stands in relation to Western Germany today. In terms of unemployment alone that is hardly an enticing prospect. Let me say, therefore, to the noble Lord, Lord Kilmarnock, who challenged me particularly on this issue, that the moral ground on which this Government stand is their determination to reverse this slide and, having done so, to start to move up the ledge a little. We have reversed the slide and we are beginning to climb. But there are growing pressures—and we have listened to many this afternoon—in favour of our dropping right back again.
Lord Kaldor: My Lords, may I interrupt the noble Earl for a second?
The Earl of Gowrie: My Lords, we are under a time constraint and if I may, I want to continue without interruption. I have a very long debate to answer and I want to answer every noble Lord that I can.
This is the general context, the moral ground, if you like—as the terms of the Motion were couched in moral terms—in which I ask the House to judge our response to particular points made to us in today's debate, to judge and to vote accordingly, if we must come to a vote. However, I must say that I do not think it gives the best signals to our economy if we do vote on this issue.
Turning to the main themes of the debate, one was that the Government should invest in jobs directly by increased capital investment rather than go for tax reductions, and the noble Lord. Lord Cledwyn, in introducing the debate, and the right reverend Prelate, the noble Baroness, Lady Seear, and others all urged this upon us. In the view of the Government, however, there is an intimate connection between disincentives to work and some—though not, of course, all—the present numbers of registered unemployed.
In January 1984, a single householder in cheap local authority accommodation needed a gross wage of £94 in order to be £10 a week better off by working. Why bother? Why resist the temptation to earn £10 or £20 a week more in what is politely termed the informal economy? Yet a supplementary benefit claimant who earns more than £4 a week should in theory forfeit the whole package and pay 9 per cent. national insurance contribution and income tax at 30 per cent. on weekly
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earnings above £39. Where then is incentive and responsibility? Again, the noble Lord, Lord Hams of High Cross asked us—
Lord Kaldor: My Lords,—
The Earl of Gowrie: My Lords, I said that I will not give way in a debate of this kind. I have debated in this House for several years, and I have never done so under a time constraint. If the time constraint is taken off me, I am quite happy to give way, but if it is not, I would rather not.
This point about what I would call the benefit or the employment trap was put to us very pertinently by the noble Lord, Lord Harris of High Cross. That is why we must continue. Budget by Budget, with the policy of lowering tax thresholds and reducing the benefit trap, which, as I said, I should prefer to term the employment trap.
We have already made significant strides in this direction. The basic rate threshold has been increased by 16 per cent. in real terms since 1979, and the threshold for the higher rate taxpayer has only been increased by 10 per cent. May I say to the right reverend Prelate that higher rate taxpayers—who number a little short of 900,000 at present—have enjoyed a lesser increase in the tax thresholds relevent to them than the ordinary basic rate taxpayers? In other words, there has been a modest but useful degree of discrimination in favour of the bulk of the 20 million ordinary taxpayers, and we must take into account at the same time the trenchant point made by my noble friend Lord Thorneycroft about incentives, not to rich people, but to the upper echelons of management—those same managers who, the noble Lord, Lord Kaldor, told us (in some cases not without truth) may have been responsible for our decline in market shares.
I am one, therefore, who urges the Chancellor to continue where he can in this direction of tax reforms and raising thresholds. It is not a case of preferring tax policy to jobs policy. The two are interchangeable, and I suspect that the noble Lord, Lord Kilmarnock, even as he threw down his elegant challenge to me, was aware of that as well. If this Government do not further improve tax policy, they will indeed be guilty of that lack of urgency which the noble Lord, Lord Cledwyn. deplores.
Many noble Lords have appealed for reflation through capital spending. This was dealt with in general terms by my noble friend in opening the debate. It is simply not the case that capital projects are not now being undertaken. This year, we expect fixed investment across the economy—that is to say, the private and public sectors taken together—to run at the highest level ever in our history—some forty-five and a half thousand million pounds at 1980 prices. The figure for the public sector, the underlying gross capital spending figure, has recently been running at about twenty-two thousand million pounds in 1982–83 prices. This is an excellent record, as my noble friend Lord Campbell of Alloway reminded us. But as my noble friend Lord Young told us, capital expenditure, like heavy industry generally, is today capital- rather than labour-intensive.

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I am one who happens to be thoroughly in favour of the Channel Tunnel. If it is constructed, it will certainly generate some additional employment. It would be an idiotic project to undertake, however, for that reason alone, as the jobs would not be sustainable beyond the life of the project, and they would in any case be rather fewer in relation to the cost of the project than can be achieved by, let us say, fiscal measures. (I fear that as well as being prejudiced in favour of the Channel Tunnel, I am also—as I must say to the noble Lord, Lord Kaldor, somewhat prejudiced in favour of free trade.)
The noble Baroness, Lady Ewart-Biggs, the noble Lord, Lord Soper, and the noble Lord, Lord Seebohm, urged a greater attention to housing programmes. I am greatly in favour of this, but two of the speakers appeared to imply that housing was especially neglected. We have a measurably superior stock compared with our European Community partners in most respects; that is to say, in relation to space per person, in supply of water, electricity and the like, and in access to proper kitchens, baths and sanitation. The Government believe that home building will continue, as in the past, to be very sensitive to interest rates, and that to raise the level of housebuilding we want the right macro-economic policies to produce low or falling interest rates. That is exactly what we are doing and what we will continue to do. A policy of higher public borrowing would of course do the opposite. and it is not as though public borrowing is particularly low at present in any case.
The noble Lord, Lord Cledwyn—and one or two others mentioned this as well—urged the reimposition of exchange controls. I must say that I can think of few single items of policy under this Government which have been more instantly beneficial than the abolition of exchange controls. Britain's wealth has, since the reign of the first Elizabeth, been achieved by direct involvement in economies overseas. As North Sea oil reserves reach their peak and start to decline, our global investments become ever more important to us. If there were shortage of capital for activities at home, exchange controls might be justifiable, but there are no such shortages. There may he an insufficiency of profitable fields for investment at home, though I believe this is changing. I really challenge noble Lords in all parts of the House to provide me with examples of opportunities of real potential which are starved of capital.
I believe, too, that abolishing exchange controls is the best answer to the question of the noble Lord, Lord Hatch. There are indeed great opportunities in the third world for investment as well as aid, which is also important. and I urge our institutions to seize them—
Lord Underhill: My Lords, would the—
The Earl of Gowrie: My Lords. I have already said that I shall not give way.
Noble Lords: But you challenged the House.
The Earl of Gowrie: I challenged the House rhetorically, my Lords. The noble Lord, Lord Underhill, can write to me and I shall write back to him. I intend to
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make a brief speech, so far as is possible, and the noble Lord, Lord Cledwyn, will have ample chance to reply.
My noble friend Lord Young and I agreed with rather more, I suspect, of the speech of the noble Baroness, Lady Seear, than we were supposed to. I know the ideas of my right honourable friend the Prime Minister about this economy rather well, and they are in very many respects close to those of the noble Baroness, and even closer to those of the right honourable gentleman the Member for Plymouth, Devonport. The noble Baroness and the noble Lord, Lord Harris of High Cross, from very different perspectives commended our training efforts and urged us towards tailoring them towards tomorrow's rather than yesterday's industries. This is being done.
May I say to my noble friend Lord Alport that his juxtaposition of the working and the middle classes seems to me to be simply out of date. He mentioned the miners' strike, which is of course a dispute within a trade union and not between union and employer or union and Government. Would my noble friend call the working miners middle class? Yet their aspirations and their desire to fulfil them are precisely what is sustaining this Government, both morally and in electoral terms.
Three cheers, my Lords, for my noble friend Lord Nugent for reminding us that this is a Gladstonian rather than a Disraelian Government. I love Disraeli. He was a marvellous novelist and the great ringmaster of British imperialism. But allowing money to fructify in the pockets of the people is the better way towards economic health and prosperity for a free society in our age.
The noble Viscount, Lord Hampden, mentioned the British Telecom flotation. In my view £2,000 million, not merely £1,000 million, would have been cheap at the price for the greatest extension of share ownership in our history. He gave the Treasury, through me, strictures about not distinguishing between investment and current spending. When the noble Lord pays his trip to his bank manager, as he said that he did in order to sustain—and I commend him for this—the employment of those he employs, his bank manager will point out to him that that borrowing has to be paid for regardless of the worthy ends to which it is directed.
I have to say that I was staggered—indeed flummoxed would be the word—by the speech of the noble Lord, Lord Molloy, who seems to believe that we could reach full employment through greater expenditure on the health service. Total expenditure on the NHS in 1983 was of the order of £15½ thousand million. Real spending on the NHS has risen by 21 per cent. since 1978–79, much faster than public expenditure in general, and I believe that that alone answers some of Lord McCarthy's questions about public spending.
May I close, as I began: it does damage to confidence in this country, and therefore to employment, not to recognise that real improvements are being achieved, not by the Government, if you like, but by British business in productivity and competiveness and the regaining of markets, and these improvements are beginning to flow into the labour market. About a quarter of a million more people are in work in the

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year to June; unemployment rates are higher in Belgium, the Netherlands, Spain and Ireland than in the United Kingdom; output per head has risen by nearly 6 per cent. a year since the low at the end of 1980; well over a third of a million people leave the unemployment register every month—we must not talk about the 3 million unemployed as though they were a solid phalanx—and about half a million find a new job every month; about 10,000 new businesses start up every month; and in the last four years—and I find this particularly encouraging—there have been nearly 120,000 more business start-ups than stops; and about 6 million people change jobs every year.
It will not help employment, which noble Lords opposite claim to be so concerned about, to discourage this improvement. Indeed, it will put in jeopardy the new jobs that are coming on stream at a highly encouraging rate. Long-term unemployment—which I acknowledge with the noble Baroness is probably the most severe problem that we face—is the consequence of long-term decline, and in some industries of increasing automation.
Our social system therefore must continue to earn money in markets at home and abroad in order to ameliorate the effects of unemployment on individuals and to train new workers for new jobs. That is precisely what we are doing. It would be crazy in economic terms, and I believe immoral in human terms, to follow Lord Cledwyn's party down that same road which led to our decline in the first place.
The French Socialist Government started out precisely along that road and pursued precisely the same policy advocated by the noble Lord. The results were so bad that they were forced to reverse their policies, not to some degree—no fine tuning—but absolutely. Alternative policies are unworkable. Unworkable incomes policies; indisciplined unions; make-work schemes rather than real training; the piling up of debts for posterity to pay; and, above all, futile attempts to insulate Britain from the need to compete in the real rather than the imaginary world, are the policies of cruelty, not compassion, and I urge the House not to follow them.
Lord McCarthy: My Lords, before the noble Earl sits down, may I ask whether he is suggesting that the financial disincentives to work of which he makes so much and by which he justifies tax cuts were significantly different when unemployment was 1 per cent.?
The Earl of Gowrie: My Lords, I did not hear the noble Lord's question. Perhaps he would like to put it to me in writing.
Lord McCarthy: My Lords, the noble Lord made a great deal of the fact—and we have 15 minutes for the answer—that the financial disincentives to work are now so much that we must have tax cuts. I am asking him if the financial disincentives were any different when unemployment was 1 per cent. but we had more jobs?
The Earl of Gowrie: My Lords, at that time we also had a far greater share of markets. In order to have
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incentives to regain those markets we now have to get rid of some of the obstacles to working.
Lord Kaldor: My Lords, I do not—
Several noble Lords: No!
Lord Kaldor: My Lords, I am not asking—
Several noble Lords: No! Order!
Lord Kaldor: My Lords, I am not asking a question. I am merely asking that the noble Earl should deposit the evidence in the Library for his assertion that this Government have recently succeeded in fundamentally reversing the decline in market share. I have seen no evidence for that. I am not asking for evidence now, but it should be made accessible to Members of your Lordships' House.
The Earl of Gowrie: My Lords, the point I made is that we have halted the slide and we are beginning to climb again. We halted the slide in the year 1981.
7.48 p.m.
Lord Cledwyn of Penrhos: My Lords, I think that the House will agree that we have had an interesting, timely and important debate, and this includes the enthusiasm of the last few moments. I am grateful to all noble Lords who have taken part. All the speeches—and I heard them all—were of interest, especially considering the restriction on time. There are only two brief points I should like to make. First, I was chided by one or two noble Lords for making what they called a party-political speech. It was a political speech, I concede. It is part of our work to make political speeches, and I would be guilty of a grave dereliction of duty if I did not criticise the Government on so serious an issue as the present unemployment situation.
I suppose it was also a party-political speech, although the criticism of the Government comes from all sides of the House. It comes not only from the official Opposition but from the Alliance Party, from the Cross-Benches, from the Bishops' Bench, and indeed from the Conservative Benches. I am sure that the House was impressed—it could not have been not impressed—by the speech of the noble Lord, Lord Alport. It was a courageous speech. I think he was right, and I would say with great respect to the noble Earl, Lord Gowrie, that the noble Lord, Lord Alport, is more in touch with the people of this country at this time than the noble Earl is on this issue.
Secondly, I and my noble friends were criticised for advocating massive spending. We did nothing of the kind. We proposed a number of reasonable measures, as indeed did the noble Baroness, Lady Seear, the leader of the Liberal Party, the noble Lord, Lord Kilmarnock. and the right reverend Prelate. They were reasonable proposals which the Government could accept. There was no intention to ask this Government to spend massively because one knows well that they would not do so in any event.
What I did, as we were reminded by my noble friend Lord McCarthy and by the noble Earl, Lord Gowrie, was to suggest to the Government that they might

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divert any money which was available at the time of the Budget from tax cuts to capital investment. I believe that to be a reasonable proposition to put to the Government at the present time.
I am deeply disappointed by the Ministerial speeches, by the response to the criticisms which have been made in this debate—and they have been constructive criticisms. The Government have given me no confidence that they have a policy to deal with this problem. I have heard no sense of urgency whatsoever in Ministerial speeches. I have seen no indication that they are prepared to discuss rationally.
Unhappily, this Government do not consult anyone. If ever there was a closed Cabinet or a closed Government, this is it. It would do them a great deal of good to walk around the streets of this country to find out what people are thinking. In the circumstances I have no alternative but to invite noble Lords on all sides of the House to go into the Division Lobby to vote for this Motion.
7.52 p.m.
On Question, Whether the Motion shall be agreed to?
Their Lordships divided: Contents, 105; Not-Contents, 134.

DIVISION NO. 1

CONTENTS

Airedale, L.

Hatch of Lusby, L.

Alport, L.

Hughes, L.

Ardwick, L.

Hunt, L.

Attlee, E.

Jacques, L.

Avebury, L.

Jeger, B.

Aylestone, L.

John-Mackie, L.

Banks, L.

Kaldor, L.

Barnett, L.

Kilmarnock, L.

Beaumont of Whitley, L.

Kirkhill, L.

Beswick, L.

Lawrence, L.

Birk, B.

Llewelyn-Davies of Hastoe, B.

Blease, L.

Longford, E.

Blyton, L.

Lovell-Davis, L.

Boston of Faversham, L.

McCarthy, L.

Bottomley, L.

McCluskey, L.

Broadbridge, L.

McNair, L.

Brockway, L.

Mayhew, L.

Brooks of Tremorfa, L.

Meston, L.

Bruce of Donington, L.

Mishcon, L.

Campbell of Eskan, L.

Molloy, L.

Caradon, L.

Mountevans, L.

Carmichael of Kelvingrove, L.

Nicol, B.

Cledwyn of Penrhos, L.

Ogmore, L.

Collison, L.

Oram, L.

David, B. [Teller.]

Parry, L.

Davies of Leek, L.

Phillips, B.

Davies of Penrhys, L.

Pitt of Hampstead, L.

Dean of Beswick, L.

Ponsonby of Shulbrede, L.[Teller.]

Denington, B.

Diamond, L.

Prys-Davies, L.

Elwyn-Jones, L.

Robson of Kiddington, B.

Elystan-Morgan, L.

Rochester, L.

Ennals, L.

Ross of Marnock, L.

Ewart-Biggs, B.

Seear, B.

Falkender, B.

Sefton of Garston, L.

Falkland, V.

Serota, B.

Fisher of Rednal, B.

Shackleton, L.

Gallacher, L.

Simon, V.

Galpern, L.

Soper, L.

Glenamara, L.

Southwark, Bp.

Graham of Edmonton, L.

Stallard, L.

Hampden, V.

Stedman, B.

Hampton, L.

Stewart of Alvechurch, B.

Hanworth, V.

Stewart of Fulham, L.

Harris of Greenwich, L.

Stoddart of Swindon, L.

350

Stone, L.

Wallace of Coslany, L.

Strabolgi, L.

Wedderburn of Charlton, L

Strauss, L.

Wells-Pestell, L.

Taylor of Blackburn, L.

White, B.

Taylor of Gryfe, L.

Wigoder, L.

Taylor of Mansfield, L.

Wilson of Rievaulx, L.

Tordoff, L.

Winstanley, L.

Underhill, L.

Young of Dartington, L.

NOT-CONTENTS

Abinger, L.

Killearn, L.

Airey of Abingdon, B.

Kinnaird, L.

Arran, E.

Lane-Fox, B.

Avon, E.

Lauderdale, E.

Barnard, L.

Lindsey and Abingdon, E.

Belhaven and Stenton, L.

Long, V.

Beloff, L.

Lucas of Chilworth, L.

Belstead, L.

Lyell, L.

Bessborough, E.

McAlpine of West Green, L.

Brabazon of Tara, L.

McFadzean, L.

Brentford, V.

Mancroft, L.

Buchan, E.

Margadale, L.

Caithness, E.

Marley, L.

Cameron of Lochbroom, L.

Marshall of Leeds, L.

Campbell of Alloway, L.

Masham of Ilton, B.

Campbell of Croy, L.

Massereene and Ferrard, V.

Camegy of Lour, B.

Maude of Stratford-upon-Avon, L.

Cathcart, E.

Cayzer, L.

Merrivale, L.

Chelwood, L.

Mersey, V.

Coleraine, L.

Middleton, L.

Constantine of Stanmore, L.

Morris, L.

Cork and Orrery, E.

Mottistone, L.

Craigton, L.

Munster, E.

Cullen of Ashbourne, L.

Murton of Lindisfarne, L.

Daventry, V.

Napier and Ettrick, L.

Davidson, V.

Nugent of Guildford, L.

Denham, L. [Teller.]

Onslow, E.

Dilhorne, V.

Orkney, E.

Drumalbyn, L.

Orr-Ewing, L.

Duncan-Sandys, L.

Pender, L.

Ellenborough, L.

Penrhyn, L.

Elliot of Harwood, B.

Peyton of Yeovil, L.

Elton, L.

Plummer of St. Marylebone, L.

Ely, Bp.

Enniskillen, E.

Polwarth, L.

Erroll of Hale, L.

Rankeillour, L.

Faithfull, B.

Renton, L.

Fortescue, E.

Rochdale, V.

Fraser of Kilmorack, L.

Rodney, L.

Gardner of Parkes, B.

Romney, E.

Gibson-Watt, L.

Saint Oswald, L.

Gisborough, L.

Saltoun, Ly.

Glanusk, L.

Savile, L.

Glenarthur, L.

Selkirk, E.

Gowrie, E.

Skelmersdale, L.

Grafton, D.

Somers, L.

Gray of Contin, L.

Southborough, L.

Greenway, L.

Suffield, L.

Gridley, L.

Swansea, L.

Grimston of Westbury, L.

Swinton, E.[Teller.]

Haig, E.

Terrington, L.

Hailsham of Saint Marylebone, L.

Thomas of Swynnerton, L.

Thorneycroft, L.

Halsbury, E.

Tranmire, L.

Hanson, L.

Trefgarne, L.

Hardinge of Penshurst, L.

Trumpington, B.

Harmar-Nicholls, L.

Vaux of Harrowden, L.

Harris of High Cross, L.

Vickers, B.

Harvington, L.

Vivian, L.

Henley, L.

Ward of Witley, V.

Hives, L.

Whitelaw, V.

Hood, V.

Wigram, L.

Hornsby-Smith, B.

Windlesham, L.

Hylton-Foster, B.

Wynford, L.

Inglewood, L.

Young, B.

Ingrow, L.

Young of Graffham, L.

Jessel, L.

Zouche of Haryngworth, L.

Kaberry of Adel, L.

Resolved in the negative, and Motion disgreed to accordingly.

Mentally Ill Offenders in Prison
8 p.m.
The Earl of Longford The Earl of Longford rose to ask Her Majesty's Government what steps they are taking to respond to the statement of the Chief Inspector of Prisons that many mentally ill offenders are at present inappropriately confined to prison.
The noble Earl said: My Lords, I rise with a sense of gratitude to the noble Lords who have not deserted the sinking ship at this stage of the proceedings—I want to give plenty of opportunity to my noble friends Lord Hatch and Lord Kaldor to decide whether they want to stay to listen to me or to go elsewhere; I take no offence. My Lords I rise to ask the Unstarred Question standing in my name. I must say that I must strike a highly critical note this evening which I hope will be attended to by noble Lords opposite even more widely than appears likely at the moment. No Conservative Peers are sitting anywhere except on the Front Bench, but that we understand. I feel sure that the esteemed Minister who is going to reply will agree with me on one point at least: that this is a very difficult subject. The difficulties are intrinsic in theory and still more in practice. We punish law breakers; we do not punish sick people—we try to heal them. But the mental offenders with whom we are concerned this evening fall on both sides of the line. We search in vain for the perfect way to deal with them. The problem will never go away but we could cope with it far better than we are coping at present.
We—and I am speaking of the community as a whole, but the Government have a special responsibility because they are in charge of our affairs—are failing, as I see it, in a double duty. We have the duty to try to clear our minds about the ethical and psychological issues and we have the duty to make far more adequate provision in practice for administrative actions. I submit that the first failure, the failure to make up our minds as to what we ought to be doing, is, to a considerable extent, responsible for the second, the failure to deal with these human beings in a manner beneficial to them and to society.
It would be helpful to read the paragraph in a recent report by Her Majesty's Chief Inspector of Prisons from which my question is extracted. Chapter 2, paragraph 19 of that report goes like this—and now I am quoting:
"In previous reports we have expressed our concern about the detention of mentally disordered offenders in prison, when what they need is treatment in an appropriate psychiatric institution. Prison medical officers have frequently told us that managing mentally ill offenders was the hardest part of their duties. Many Governors expressed similar views. There may be room for argument over the number of those offenders who would be better cared for in a mental hospital, but there can be no doubt that many are inappropriately confined to prison".
That means, in the context, many mentally-ill offenders.
This would appear to represent a very disquieting situation. But it appears that the Government view it with the utmost complacency. The official view is equally bland, whether delivered through the mouth of the noble Lord, Lord Glenarthur, speaking for the DHSS. or through the mouth of the noble Lord, Lord Elton, speaking on behalf of the Home Office. I
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suppose that somehow it is satisfactory that the Government should speak in the same tones whoever the Minister, but it can also be disconcerting.
The subject is, in a sense, a hybrid. What appears to be necessary is a transfer of a considerable number of prisoners from the department of Lord Elton to the department of Lord Glenarthur. It is in just these situations (as I think everyone with experience knows) where the responsibility falls between two stools that failure is most likely; and, it would seem, complacency; because no Minister and no department likes to feel that his department or their department is to blame.
The noble Lord, Lord Broxbourne, who, I believe, cannot be here tonight, put down on 28th November last this Question:
"To ask Her Majesty's Government whether they are satisfied that the courts are in a position to give effect to their power to order hospital admission or guardianship in appropriate cases in accordance with Section 37 of the Mental Health Act 1983".—[Official Report, 28/11/84: col. 897.]
The noble Lord, Lord Glenarthur replied—and I sent word, which I hope reached him, that I was going to mention him in this connection—
"Yes, my Lords, we are generally satisfied".
But the House were generally dissatisfied. In fact, they were totally dissatisfied, as anyone will discover who follows the exchanges in Hansard.
The noble Lord. Lord Glenarthur, replied to a supplementary question from Lord Ennals in this way:
"I hope that he [Lord Ennals] will be pleased to hear that there has been continuing progress in the programme of regional secure units, and the present position is that seven permanent secure regional units are now open. which will eventually provide a total of 264 places of which about 120 are now staffed and available".
I will repeat that last phrase: "about 120 places are staffed and available". I am sure that the noble Lord, Lord Glenarthur, who is highly intelligent, had his tongue in his cheek when he expected us to be pleased about the progress, or the lack of it, that he was announcing—264 places. of which 120 are now staffed and available. We are not told how many of these 120 places which are now staffed and available are actually occupied and how many of those are occupied by offenders, with whom our concern is this evening.
When I myself investigated these matters on the ground in connection with a debate that I initiated in July. I became aware that that question was a very pertinent one—how many offenders were there (in any total recorded) who were occupying these places? I have given notice of that question to the noble Lord, Lord Elton, today—not very much notice, some hours' notice—but, taking the figures even at their best, there was no room for complacency or even satisfaction. As was brought out in the debate which I initiated in July of this year, the Butler Report on Abnormal Offenders, with which the noble Lord, Lord Allen, was so much connected (which I think we can attribute to his inspiration when he was head of the Home Office), recommended ten years ago that 2,000 places should be available. Let us keep some sort of track of the figures: 2,000 places recommended ten years ago and now 120 available, some of them not for offenders.
I believe the Government accepted in principle the report—the noble Lord, Lord Allen, will speak more

353
authoritatively—although I am not sure that they accepted that particular figure of 2,000 places. At any rate, the record of the Government to date recalls to me a remark of the late Lord Beveridge when he was asked by the Secretary of State for War in about 1942 what he thought of the Government's arrangements for making use of skilled manpower in the Services. I should explain that Lord Beveridge had been invited to investigate this issue, with myself holding his coat tails. He replied, to the surprise of the Secretary of State for War, who was surrounded by generals:
"A miserable show, a miserable show".
I can think of no better words to describe the record of Governments in the last 10 years with regard to regional secure units.
The noble Lord, Lord Elton, meanwhile has already given a Written Answer closely related to the Unstarred Question we are discussing this evening. In a reply dated 27th November, he informs me—and I quote—
"The Government are making headway in transferring to hospital sentenced: prisoners who are mentally disordered within the terms of the Mental Health Act 1983. The latest statistical return shows that on 30th September the number of such prisoners held in Prison Department establishments fell below 100 for the first time since recording began in 1977".
So the noble Lord, Lord Elton, was able to supply what he thinks is an encouraging figure: there are fewer than 100 people at present who could be transferred from prison to hospital within the terms of the Mental Health Act 1983.
Here we seem to be talking about two different things. The Chief Inspector records his opinion that there are many—I repeat "many"—mentally ill offenders who are inappropriately confined to prison. The noble Lord, Lord Elton, informs us that the number of prisoners who are mentally disordered within the terms of the Mental Health Act 1983 has fallen below 100 for the first time since recording began in 1977.
One reaction to this—it may or may not be the reaction of the noble Lord, Lord Avebury, but we shall hear from him later—with which I shall sympathise, is to say, "So much the worse for the Mental Health Act 1983". There are many mentally ill offenders who are not mentally disordered within the terms of the Mental Health Act, and therefore that Act ought to be drastically revised. I hope that one day it will be, and the sooner the better. The House may care to look at a major article in the Guardian today, describing the great inadequacy of the Mental Health Act in relation to mental offenders.
The whole of our law relating to mental offenders needs, I would submit, thorough revision. Meanwhile we are bound to ask: Are the Government doing all they can to cope with the situation while the law remains as it is? I cannot persuade myself that they are. The noble Lord, Lord Elton, assured me in a Written Answer, to use his words, that
"for prisoners who cannot be transferred under the Mental Health Act we are planning to extend the range of psychiatric facilities, for example, by reopening the therapeutic unit formerly housed at Parkhurst".
Here I must put a question of which, again, he has had some hours' notice. How far would it be true to say that the psychiatric facilities now available in
354
prisons are at the moment inferior to those which existed a few years ago? From what the noble Lord has said, that was obviously the case in Parkhurst. It is certainly, in my experience, the case in the hospital wing at Wormwood Scrubbs, but I am not pronouncing on the whole range of prisons. The noble Lord may wish to say a word about the extent of the provision of psychiatric facilities in our prisons at the present time and how it compares. It would be a pretty wretched story if it is not better, in view of the great increase in the number of mentally ill people over what it was some time ago.
The noble Lord, Lord Donaldson, who cannot be with us tonight, is our great expert on Grendon. I will leave Grendon for him to speak about on another occasion but I will at least ask this, and I know that he will sympathise with this question: Why have we never built a second Grendon? Perhaps the noble Lord, Lord Elton, will answer that also.
Lord Elton: My Lords, I am so sorry: perhaps we may be able to do what to Grendon? Unfortuntely I missed the word.
The Earl of Longford: My Lords, it is a very simple question: Why do we not build a second Grendon? It is good news if the Government intend to improve the psychiatric facilities in prison, but I am afraid that I and many others will reserve judgment until we see these new facilities in operation.
At this point—and I draw towards a close but I am not quite finishing yet—I must return to an illustration that I have used before in this House. I visited a prisoner for 15 years; I visited him every month during the last year. He has been in prison altogether for 19 years. About 13 years ago—this is a good illustration of a certain aspect of the problem—the late Dr. Peter Scott examined this prisoner very carefully on behalf of the Home Office. The late Reginald Maudling, the then Home Secretary, tried to secure the transfer of this prisoner to Broadmoor. I remember very well visiting this prisoner in Durham when this departmental wrangle was proceeding. He was left almost alone there—not quite alone, because there is some rule apparently that you cannot leave one prisoner alone in a wing, so they left another prisoner there just to keep him company and to keep up apearances. At any rate there were just the two of them there while this wrangle went on. The whole top security wing at Durham had been vacated, except for this prisoner and one other.
Eventually the Minister of Health, Sir Keith Joseph—he was, I think, a tougher character in those days—prevailed, and the man remained in prison instead of going to hospital, in spite of the Home Office view that he should go to hospital. Many years later this prisoner was again investigated, and still more thoroughly, by a Home Office psychiatrist, who recommended once more that the man should go to a special hospital. I have been allowed to see a copy of that report. However, nothing happened, and he remains in prison.
No one can doubt that this man is ill. Although he has no organic disease, I am told that his weight has come down from 13 stones to eight. An eminent man who visited him for several years in Wormwood

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Scrubbs recently visited him in his present prison and could not believe that he was the same man; so no human being, seeing him, could say that this man was anything but ill, and it is very difficult to say that he is anything but mentally ill. I am told that the Home Office are having difficulty in finding a second psychiatrist who will support the view of two of their own psychiatrists over the years who have recommended that he should go to a special hospital. I had some sharp words prepared this evening to aim at the noble Lord, Lord Elton, but while I was getting ready to speak the noble Lord was kind enough to inform me that another psychiatrist—I know him personally, for what that is worth, and I have complete confidence there—is now going to see this man again.
I do not want to disturb matters. I shall cross my fingers, offer up prayers and say, "Better late than never". But I give this case as an example, if you like, of one of the difficulties in dealing with a case of this kind or, you may say, of the very tepid efforts made by the noble Lord's Department to deal with this particular case. But now they are turning over a new leaf. This is the first time I have ever been able to congratulate the Home Office in all the years I have been dealing with the noble Lord, Lord Elton. I cannot remember another occasion; so let us be thankful for small mercies.
I pose again to Her Majesty's Government the question which I asked in the debate on the Address. It was ignored by the Lord Chancellor when he replied, and the noble Lord the Minister has so far not answered it. I put to the noble Lord the question which I put to him recently. Do the Government accept the opinion of the Chief Inspector that,
"many mentally ill offenders are at present inappropriately confined to prison"?
Do they accept that or not? Is the answer, "yes", "no", or "don't know"? I should be very grateful to get their answer. If that claim is accepted, would they agree that it covers a much larger number of prisoners than the fewer than a hundred who are said to be mentally disordered within the terms of the Mental Health Act 1983? If so, what steps are the Government taking to deal with this evident scandal?
8.21 p.m.
Lord Avebury: My Lords, I am sure we all admire the determination with which the noble Earl, Lord Longford, pursues these matters, and I am grateful to him for the opportunity that it gives us for discussing the state of a small but important number of prisoners confined, inappropriately, as the Chief Inspector puts it, within the prison system and, if I may venture to broaden the debate somewhat, not only the prisoners with whom the noble Earl, Lord Longford, is primarily concerned, but that other group which is mentioned by the Chief Inspector lower down in the same paragraph where he refers to the:
"Mentally disturbed offenders who cannot be admitted to mental hospitals and for whom alternative treatment regimes need to be provided."
As the noble Earl, Lord Longford mentioned in passing, what happened with the Mental Health Act 1983 was that the wording of the old Section 72 of the Mental Health Act 1959 was altered so as to make it
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more difficult to transfer prisoners from the prison system into the special hospitals. You will recall, my Lords, that the requirement now is that, if a person is suffering from a psychopathic disorder or mental impairment, the treatment he will receive in the special hospital has to be shown as,
"Likely to alleviate or prevent a deterioration of his condition".
That is a test more difficult to satisfy than the one in Section 72 of the old Act, where the Secretary of State had to consider only whether the mental disorder from which the prisoner was suffering was such as to make it,
"expedient to make a transfer direction".
In other words, the Secretary of State had complete discretion to decide whether or not to transfer the prisoner, irrespective of the likelihood that treatment was going to benefit him in his illness.
The result of this change is that a prisoner who is labelled as untreatable at the time of his conviction is likely to remain permanently within the prison system, as I ventured to predict when your Lordships had the question of transfers under consideration during the proceedings on the Mental Health Act (Amendment) Bill in February 1982, and I believe that this is in fact happening.
As far as I am aware—the noble Earl, Lord Longford, seemed to have some figures which suggested otherwise—there was no attempt to distinguish between those eligible for transfers but for whom places cannot yet be found, and those whose untreatability means that, in spite of the mental disorder which afflicts them, they are likely to remain permanently within the prison system.
We are given periodically the total of mentally disordered persons and a breakdown into sentenced and unsentenced. The number did come down—one has to congratulate the Home Office and the Department of Health and Social Security on this —from 769 at the end of June 1977 to 286 at the end of September 1982, although in the next six months after that it rose again to 319. I do not know whether the noble Lord the Minister will remember this but he wrote to me in July 1983 expressing the opinion that this was the sort of fluctuation that one might have to expect, adding that he would be looking at the next set of figures with great care to ensure that the long-term trend had been resumed. I rather gathered from what the noble Earl, Lord Longford, was saying about the number having declined to only 100—I think that was the figure he gave—that great progress has been made in the past 18 months. But I wonder whether the noble Lord, Lord Elton, can give us some figures for September 1983 and March 1984 and perhaps even for September 1984, if the figures which the noble Earl, Lord Longford, was quoting came from the Home Office. Is it possible to give an estimate of the number of persons suffering from mental disorders who are likely to remain within the prison system, when all those who are eligible for transfer under Section 47 have been moved?
According to the working party which was chaired by Monsignor Atherton, the Deputy Prison Chaplin, on Regimes for Dangerously Disruptive Prisoners, only 10 to 15 inmates came within its definition of "dangerously disruptive"—that is to say:

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"one who, having murdered or committed some other grave assault against the person, shows by his serious anti-social conduct such as hostage-taking, that he constitutes a continuing though unpredictable threat to the prison community".
These people are by definition suffering from a psychopathic disorder, which is described in the Mental Health Act as:
"abnormally aggressive or seriously irresponsible conduct".
There may be others, whose disorder is not quite so serious, but who nevertheless present very severe problems of management over periods of many years within the prison system. This will depend to some extent on the way in which society expects the parole system to approach the question of risk. As the Home Office points out in its Research Unit Study No. 64, Taking Offenders Out of Circulation:
"Because crimes of violence are comparatively rare, attempts at prediction will therefore produce large numbers of what are called false positives—people who fail to conform to expectations which are derived from observations of only a few of them."
In other words, if the policy is to play absolutely safe, then we keep in custody for the whole of their natural lives everybody who has been guilty of certain types of violent offence, on the basis that by doing so, we are going to reduce the incidence of future offences of that kind. But at the same time, according to the Home Office study, we would be keeping behind bars large numbers of offenders who would not have repeated their crimes if they had been released.
The notion of incapacitation is also in conflict with the idea that has been gaining ground over the past few years of a tariff which, when applied to an indeterminate sentence, allows the prisoner to work positively towards a long-term release date. Where psychiatrists reach the conclusion that a man should be held in custody beyond the term which is required for punishment, as has been indicated by the tariff, they should be obliged to justify their decision before some kind of independent tribunal constituted for that purpose, as they would have to do if the patient was in a special hospital. I should like the opinion of the Minister on this—perhaps not this evening but when he has had the chance to think about it. When a prisoner is detained beyond the end of a tariff period and that decision has been taken wholly or mainly on the basis of psychiatric advice, there should then be a right of access to the Mental Health Review Tribunal, as there would be in the case of a person who is detained for a similar period in a special hospital.
I should like to mention in this connection the case of Mr. A. G. D., who is the longest serving prisoner in our system. He was convicted by a field court-martial in Italy in 1944 of the murder of a nine year-old girl, and was sentenced to death. The death sentence was commuted, and in December 1949, after only five years in prison, the then Home Secretary released Mr. D. on licence. But then five years later, in December 1954, he pleaded guilty to indecently assaulting an eleven year-old child, and was, sentenced to six months' imprisonment. The then Home Secretary revoked his licence, since when he has spent the next 30 years uninterruptedly in prison. Mr. D. had not been seen by a psychiatrist from outside the prison system (as distinct from the prison medical officer who was psychiatrically qualified) since 1976 until this year, when, following some correspondence I had with Mr. David Mellor in the Home Office, the prisoner
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was seen by Dr. Faulk of the Knowle Hospital, Fareham.
As is usual on these cases, the doctor's report was not made available to Mr. D. or to any of his advisers. If he is still considered to be dangerous, 30 years after committing the offence of indecent assault for which the court thought an appropriate sentence was six months, first of all he and his advisers will never know the reasons for that opinion, but, more important, they are not going to have a chance of contesting them. I think that when society decrees that a man should spend as long as that locked up behind bars—a 72 year old man who committed an offence 30 years ago—he has a right to a hearing before some kind of objective tribunal.
The Earl of Longford: My Lords, I did not know about that appalling story. Before the Home Office committee under the chairman of the Parole Board was abolished, would he not have had the opportunity of being considered by that committee?
Lord Avebury: My Lords, the point made by the Home Office when one approaches them about this matter is that the Parole Board have never recommended that this man should be considered for release so it must be presumed that, on the basis of the evidence before it, he could still be a potential threat to the public if released. My point is that nobody knows on what basis the parole authorities reach that decision. Even the Home Office do not know because it did not have to entertain a recommendation by the parole authorities.
The general attitude of the Home Office is exemplified by a letter which I received from Mr. David Mellor in August. He concluded that if the Home Secretary was ever called upon to decide whether to accept a recommendation for Mr. D's release he would have no hesitation in resolving any doubt there might be about the degree of risk involved in favour of the general public. In other words, even before anyone suggested to him that Mr. D should be released he was already in the frame of mind to turn down such a suggestion. A similar line could perhaps be taken by psychiatrists because, after all, no one ever criticises these people for keeping prisoners behind bars, but there would be an outcry from the gutter press if, following a recommendation by a psychiatrist, the released person committed a similar offence again.
The next point I want to make concerns the report of the working party under Monseigneur Atherton which recommended a special unit for the small number of prisoners with whom it was concerned, but one very different in its regime from the notorious special unit which the Home Office tried to establish clandestinely a few years ago. One of the features of the proposal from Monseigneur Atherton and his committee was the permeability of the unit's boundaries with the prison system generally; and this is in conformity with two ideas emphasised by the Control Review Committee in its report Managing the Long-Term Prison System. It referred to the need to avoid creating last-resort situations from which prisoners may see no way out, and they underlined the need for sentence planning. It is essential, in my view, that prisoners who present serious control problemsx—of whom the Control Review Committee estimate there may be 150 to 200—should be able to graduate, as it were, from whatever special accommo

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dation is provided for them back to the wing on the satisfaction of an objective test which has been explained carefully to them, so that they can see what they have to do to comply with it.
The Control Review Committee referred in particular to the high security cells at Wakefield which provide a better quality environment for prisoners considered to be exceptionally dangerous than could be offered in a segregation unit. They do; although the amount of contact with one other human being which they provide is extremely limited and the committee rightly say that it is important to ensure that such prisoners spend no longer in these cells than is absolutely necessary.
The Minister is familiar with the case of Mr. RJM who has been segregated continuously since July 1978, latterly in the special cells at Wakefield. The logic of the argument of both Monseigneur Atherton's committee and the Control Unit Committee is that he ought to be given some idea of the conditions that he has to fulfil before he can move towards association with other prisoners. The implication of paragraph 64 of the Control Unit Report is that until there is a network of long-term units, beginning with the five or six which presumably—although they do not make this clear—take an average of 30 prisoners each, the two individuals in the special cells at Wakefield must expect to stay where they are. If that is the policy the prison authorities should say so and enable the men concerned to do their best to adjust to the idea of another several years in the special cells. On the other hand, I hope it will be possible to give these people some idea of exactly what conditions they must fulfil before they can begin to move back to normal association with other human beings.
The only other prospect for prisoners like Mr. M would seem to be—and the noble Earl, Lord Longford, mentioned this in passing—the idea of broadening Grendon's therapeutic regime. on which I understand advice is being sought from a committee chaired by the Director of the Prison Medical Service. It is said that as a result of this work Grendon may be able to accept in future highly difficult and disruptive prisoners. It would be good to hear something from the Minister, if he is able to say anything on the matter, about the progress of the chief medical officer's work.
The description of Grendon as a therapeutic environment seems paradoxical, because the inmates who go there must have been assessed as unlikely to have their mental disorders alleviated by treatment or they would have been transferred under Section 47. Perhaps the group psychotherapy practice at Grendon is not available in the special hospitals; or perhaps there are patients whose treatability is a matter of uncertainty and a greater variety of experimental treatment regimes could be provided within the prison system for those who do not qualify under Section 47 but who may. nevertheless, be thought worth an attempt at treatment, however unlikely the chance of success.
For example, what is to be done with a prisoner like Mr. JSB who was originally made the subject of a hospital order under Sections 60 and 65 of the 1959 Act in June 1981, and then, after the medical evidence was found to have been flawed in some way, brought
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back to court and given a life sentence—the judge expressly saying that it was in order to see that the accused was given the treatment he needed? This man writes to me saying that he has petitioned the Secretary of State four times without receiving an answer. I am afraid that the Home Office, in spite of the instruction given by the Minister, is still not meticulous in replying promptly and fully to petitions, as it ought to be on matters that are of the utmost importance to the people concerned.
To take another case, that of Mr. DJL, who has recently been examined with a view to his transfer to Park Lane Hospital but has been told that because there is no place for him there at the moment he has to return to the wing for the time being. We need some halfway house between the special hospitals, on the one hand, to which a man can be sent only if he satisfies the conditions of Section 47. and the normal accommodation on the wing which is unsuitable for people suffering from mental disorder. The Minister may recall that in a paper entitled A Good and Useful Life by Mr. Harry Gruner of my office, published in 1982. it was recommended that two specialised wings should be designated at the existing dispersal prisons on the lines of the former C Wing at Parkhurst. I think it was the predecessor of the noble Lord with whom I discussed this matter—the noble Lord, Lord Belstead—who at that time was very interested in examining thoroughly the provisions of Rule 43 and, in particular. the way in which Rule 43 was applied to violent and dangerous prisoners.
The Control Unit Committee make a similar recommendation. It says that in C Wing there was never any suggestion of bringing about a lasting improvement in prisoners' behaviour but rather of providing another way of managing disturbed and difficult prisoners without having to segregate them. But perhaps a reconstituted C Wing could take on the job of assessing suitability of the prisoners concerned for transfer to Grendon and of holding patients pending their transfer to Broadmoor or Park Lane.
At their best the special hospitals offer a quality of life which is immeasurably superior to that of the prisons, and I believe that, with imagination and a good degree of openness to ideas from outside the system, the long-term units suggested by the Control Review Committee could provide a far better environment for the 150 to 200 prisoners than they could ever hope to enjoy in the present fabric. The problem will be to create those units physically within category B training prisons and local prisons where there is no room, rather than in the dispersal system where it might just be managed.
My fear is that because of the planning and capital expenditure implications of these proposals, nothing will come of them for many years. But I hope that Ministers will not allow this to happen, because the solution of the problem of regimes for this small group would have beneficial results for the individual prisoners and would improve the manageability of the dispersal system as a whole.
8.40 p.m.
Lord Allen of Abbeydale: My Lords, the noble Earl is indeed to be congratulated on raising this topic. It is an aspect of a subject that we have discussed on more

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than one occasion. I must say that I hope that we shall keep on discussing it until we get reassurances rather more satisfactory than any that we have received so far. I considered it right to put my name down to speak in this debate since I thought the voice of a Cross-Bencher, however inadequate, would demonstrate that this is an issue cutting across any party lines, although looking at the Benches opposite I note that the Conservative Party has been careful not to make too ostentatious a display of its deep concern with this very difficult human problem.
Until I heard the noble Lord, Lord Avebury, I was just a little surprised that it fell to the noble Lord, Lord Elton, to answer this debate. I suppose that when business was being arranged the two facts that the Motion actually referred to prisons and that it is a very awkward topic for the Government to handle pointed to entrusting the responsibility to the safe hands of a Home Office Minister. But the main questions that I shall be raising, and those that the noble Earl raised, primarily affect the DHSS. The Home Office for its part must he only too anxious to free itself as far as possible of an element of the prison population which is totally unsuited to prison conditions and must make a disproportionate demand on prison resources.
I have been re-reading the report of the May Committee of Inquiry into the Prison Services, and I am reminded that, putting it crudely, that committee said that it was not a bit satisfied that the DHSS people really appreciated the gravity of the problem. The committee said that it was left with the impression that the DHSS representatives were more concerned with the convenience of not disturbing the structure of the NHS in the interests of a small minority and of avoiding local trouble than with ensuring that the NHS carried out its functions effectively in that context.
Looking back at the various debates that we have had about alternatives to prison custody in that context, one of the themes which has kept on emerging is that there would be really no worthwhile progress without the full interest and co-operation of the psychiatric consultants themselves. It was not crystal clear that those were forthcoming. In both respects progress depends on a change of attitude. My first question therefore is whether there is reason to suppose that in the last year or two there has indeed been a change of attitude among both those concerned with organising the NHS and the psychiatric consultants. I hope that there has been, because without such a change we shall not get very far.
My next question inevitably relates to the progress—if that is the right word—of the semi-secure units to which the noble Earl has already referred. We have indeed been talking about this story for years and years under Governments of both complexions, and a pretty sorry story it is. Going back to the May Committee again. it was told by the DHSS that the plan was to complete the provision of 1,000 places by 1985–1985, just a few weeks away. The committee was profoundly sceptical, and rightly so. As the noble Earl has just reminded us, the noble Lord, Lord Glenarthur, was telling us the other day that there are now about 120 places available—120 a decade after the acceptance of the Butler recommendation by the Government of the day. Further, he said that it was
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hoped to have 650 places by the end of 1987. As every forecast which has been made so far has turned out to be wrong, one is bound to be dubious about that estimate. But even if it is met, it is still a long way short of the initial programme of 1,000 places. I wonder what the Minister will be able to say for our greater comfort this evening.
In spite of our various debates, very little has been said so far to enlighten us about the criteria for admission to those units and about whether there is indeed any national policy or whether it is simply left to the personal judgment of the individual in charge of the unit, without any guidelines from the centre. I hope that the noble Lord the Minister will this evening be able to tell us more than has been vouchsafed so far about the policy which these units are supposed to follow in deciding who to accept. The point is particularly relevant to our debate this evening since it is not only a matter of moving prisoners direct from prison to one of these units, if indeed that is contemplated, but also a question of whom they may take, for example, from the special hospitals and thereby leave vacancies which can be filled by individuals moved there from prison. Given the minuscule number of places so far available, I do not suppose that there is very much practical experience to go on, but I assume, although we have not been told very much so far, that the Government have a policy about all this.
Moving on from there to territory which comes more directly within the province of the Minister who is to reply, I go along with what has already been said—that it was reassuring to learn from him that the number of convicted prisoners regarded as suitable for treatment in hospital has for the first time fallen below 100. That is indeed very reassuring news, but there are just one or two slightly puzzling features about this. For one thing, as the noble Earl has already pointed out, the chief inspector himself refers to rather larger numbers and says in terms that there is room for argument about the numbers. The May Committee said that for its part it had found it impossible to determine the exact numbers involved, but it duly recorded the figure which I think the noble Lord, Lord Avebury, has already given and which the prison medical service calculated at the end of 1978—that there were 389 such convicted prisoners.
Since then, the published prison department reports do not record any large increase in the numbers transferred. But these reports go up to only the end of 1983 and I wonder whether the total has been brought down so much by a dramatic increase this year? No doubt the Minister, if he has heard the point, will be able to answer it when he comes to wind up.
May I also ask him whether the same criteria have been used unchanged throughout, or whether there have been some changes in the criteria in the light of the 1983 Act, and whether this of itself has affected the figures? Also is he satisfied that reasonable consistency has been achieved over the whole widely scattered prison medical service? Are there obstacles to prevent this total of just under a hundred being much further reduced? Are there often delays in arranging a move once one has been decided on in principle?
There is the further point that the Minister's figures related to convicted prisoners, as I understand it. I wonder whether he will be able to tell us how we stand

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as regards remand prisoners? I appreciate that since October the courts have had available to them the new powers in the 1983 Act to remand individuals to hospital for reports or for treatment. But I am also aware that the DHSS circular to health authorities made it clear that the courts were being told that they should not expect that places would always and everywhere be available.
I am sure it is too early for these powers to have had much impact on the prison remand population so far. I wonder whether the Minister will be able to give us some indication of the number of remand prisoners now in custody who would be better placed in a hospital, and what his assessment is of future developments, including the point of whether the regional health authority will always have someone in court to explain orally why they cannot help, if indeed they cannot help.
One other quite unrelated point I should like to ask is this. We have asked once or twice whether the Mental Health Act Commission has any role to play in this context. We have not had very clear replies. My own reading is that it falls outside their remit but perhaps the Minister will be able to give us an authoritative reply when he answers.
Finally—and here I really revert to the point made by the noble Lord, Lord Avebury—everyone has recognised, the Butler Committee included, that there are certain mentally disturbed prisoners who will have to continue to be treated in the prison system, come what may. Mention has been made of the dangerous, anti-social psychopath. Mention has also been made of certain life sentence prisoners. I have another one in mind who has now served over 30 years. At one stage he was in Broadmoor but the hospitals would not take him back. On the point made by the noble Lord, Lord Avebury, about the change in the law, as I understand it, before the law was changed it had been the increasing practice for the DHSS to refuse to take a prisoner if their advice was that the prisoner could not be treated. Incidentally, these cases to which we have all referred throw rather a lurid light on the popular myth that "life" means nine years.
I hope the Minister will have time, when he answers, to tell us a little more in elaboration of the points he hinted at the other day about what is being done at Parkhurst and at Grendon, the establishment with which I had some concern, and also about the specialist training of prison officers. It has always seemed to me that there is a major problem with some of these dangerous, disturbed prisoners, who are in the nature of things unsuited for any of the pre-release schemes, or for parole, and who, if serving a fixed term of imprisonment, come out at the end of it straight into the community without any preliminary preparation for the outside world and without any supervision. However, that is a separate issue which perhaps we need not pursue today. We have perhaps in this short debate raised enough questions for the Minister to answer.
I am bound to say that the Minister has quite a difficult role ahead of him, even though now supported by some reinforcements on his side of the House, in convincing us that things are now going reasonably well. I shall wait with great interest to see whether he succeeds.
8.56 p.m.
Lord Graham of Edmonton: My Lords, paragraph 2.19 on page 8 of the report of Her Majesty's Chief Inspector of Prisons is the starting point of this debate. I am at one with the noble Lord who uses the first part of that paragraph as his text. But in my view, as was mentioned by the noble Lord, Lord Avebury, the latter part of that paragraph will also equally repay close study. I think it ought to be read into the record. It reads:
"Meanwhile, it is almost certain that there will always be some mentally disturbed offenders who cannot be admitted to mental hospitals and for whom alternative regimes need to be provided. The lessons to be learned at Grendon, particularly in relation to the breaking down of traditional barriers between staff and inmates, have important implications for the management of these and other prisoners, and are worthy of more general application".
I know that we have a Minister here to answer our debate who is known as a caring Minister, one who is respected, none more so than among the members of the Prison Officers' Association, on whose behalf I perform a parliamentary liaison function; and I declare that interest tonight.
As the completed part of paragraph 2·19 shows, prison officers can play, do play, a crucial role within the prison community. When we as politicians make our decisions, provide our remedies, and instruct our servants to carry them out, it is the like of prison officers and governors and those of all other grades involved in our custodial service who are faced with the reality of making that system work.
The Minister will be listened to with great care and I believe with sympathy, sympathy from me not least because I sense his concern. I suggest his response can be anticipated with words like, "We know the problem; we know the solutions; we have insufficient resources". I believe we shall be chided for failing to acknowledge what has already been done. I do not fail to acknowledge this. I acknowledge with appreciation what has been done. We shall be chided for failing to appreciate just how much has been done with so little. But, as the noble Lord, Lord Allen, has said, unless we pressurise the Minister from our experiences and our responsibilities, who else will? In essence we shall be telling the Minister to urge his colleagues to do more, to do it better, and to do it more quickly.
Why do we feel constrained to do so? Our prisons are a reflection both of the ills of our society and of the priorities we have as a society in seeking to make our prisons better places. I would remind your Lordships that it is only a short time since the then director general of the prison service described the over-crowding in prisons as, "an affront to civilised society".
The case for specialist treatment in special places by specialists—qualified specialists—was never more clear than in the realm of the mentally ill or the mentally disordered. Pending the creation of that perfect state when the Minister has all the resources he needs to satisfy society that all that can be done is being done, can the Minister satisfy the House that the best use is being made of human resources? In these establishments, where these unfortunate individuals are placed, what care and concern is shown to see that non-specialist but specially trained officers are given additional training, advice and guidance? When the additional burden to secure these individuals safely

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—security for other prisoners, officers and themselves—is made, is the Minister satisfied that all that needs to be done is being done?
Together with other noble Lords, I had the satisfaction of listening to the Chief Inspector of Prisons, Sir James Hennessy, when he spoke on the work of his department to a meeting of the Parliamentary All-Party Penal Affairs Group here in Westminster last night. Let me tell the House that, on first impresssions, I was impressed by what he told us, and so were other noble Lords. As the Minister knows, I deliberately avoided raising any aspect of that part of his report which forms the subject of our debate tonight. I would, however, ask the Minister to recall that I did quiz the chief inspector on the frequency of his inspections, bearing in mind that the crux of his purpose in life, as I see it, must be to visit, to report and to recommend, and to start all over again, almost like the painting of the Forth Bridge.
The Prison Officers' Association tells me that it could take 10 years to complete inspections. And this, in part, was borne out by Sir James last night when he stated that it will be the turn of the decade before a first visit has been made to all of the establishments. If the gravely disquieting state of affairs in paragraph 2.19 exists after a short period—"In previous reports we have expressed our concern", "frequently told us", "inappropriately confined", "many Governors" and "hardest part of their duties" are some phrases from that tiny bit of the report—how many other wretched individuals are in prisons that may not be visited for three, four or even five years? What is the Minister doing to shorten their inappropriate confinement?
Sir James touched briefly on the desirability of the undertaking by prison officers of a greater share of social work in prison establishments—a policy, I might add, advocated by the Prison Officers' Association for more than 20 years and one which, on the margin, can contribute greatly to changing the atmosphere, relationships and, yes, the possibility of mental illness being fostered or avoided in our prison community. The Minister will not need me to remind him that Sir James could only applaud the promotion of social projects within the prison service while regretting that continuing manpower shortages universally throughout the service meant that little progress was being made to extend social work and thus to help to reduce tensions. Can the Minister tell the House anything helpful concerning progress towards placing the 5,000 additional prison officers now authorised but which seem painfully slow in materialising?
Sir James reports, and my noble friend Lord Longford uses as a text for this debate, the view of prison medical officers that managing mentally ill offenders was the hardest part of their duties. If that is the view of those who are in close contact with those disturbed people for short periods, just imagine the effect that much longer sustained continuous periods must have on those who have to care for them at all times, the prison officers. My noble friend draws attention to the many individuals who require additional care although outwith the terms of the Mental Health Act 1983. Although not covered, they require the time and patience of prison officers to master such simple social tasks as how to shave, how
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to wash and how to eat. No doubt, the Minister has had his attention drawn to the article in The Guardian today, a powerful cry by Kilian Zumpe entitled: "The mad world of the Mental Health Act". References have already been made to it. Time does not permit a critique. Certainly, I do not expect the Minister to respond to the article tonight. The article is both daunting and haunting.
In his report, Sir James had this to say concerning conditions within the prison community today. Paragraph 4.01 states:
"It is easy to forget that the conditions in which prisoners live are also the conditions in which prison staff have to work. Thus the overcrowded prisons we described in the last chapter make life uncomfortable not only for the inmates but also for prison officers. Although staff working conditions have improved in recent years such improvements as our inspectors have noted have not been matched by the general application of modern technology".
Paragraph 4.04 states:
"At every establishment we inspected in 1983"—
note, my Lords, the words "at every establishment we inspected in 1983"—
"we discovered that the number of staff in post was below the authorised staffing level. The shortfall ranged between 7 per cent, and 26 per cent, with the average being around 16 per cent".
That is the shortfall in establishment.
"The Inspectorate does not have the resources to carry out a detailed evaluation of manning levels in an establishment or to assess accurately the efficiency with which the available manpower is deployed. It is difficult for us, therefore, to be sure about the apparent need for additional staff, or to know whether, as some commentators have suggested",
there are further requirements.
Paragraph 4.06 states:
"One of the more serious effects of the apparent shortage of staff in the Prison Service today is the level of overtime worked by prison officers".
Other references are made to shortages of staff which must have a bearing on the ability of the prison service to fulfil successfully all its responsibilities. I draw those words from the report that we are discussing tonight to the attention of the House and of the Minister. Not that I believe he is unaware of them, or that he does not have great difficulties in trying to do something about it. I do so because the problems so powerfully portrayed by my noble friend Lord Longford must be seen in the broader context of the state of the prison service today.
I happen to believe that the Minister in charge of the debate cares about these things. He demonstrates this time after time. Strictures made tonight are more designed to strengthen his hand when seeking additional resources to put things right than to lay blame at his personal door. My noble friend Lord Longford has helped the House and, I believe, the Minister not only in raising these issues but in reminding us of statements made by the Minister and his ministerial colleagues. He also uses illustrations from his own knowledge and experience to support his anxiety.
I have been given some extracts from reports of inspections of prisons which I feel are germane and show the kind of situation which will continue to worry all caring people. I have here an extract from the report by the inspectorate on Parkhurst. This is what it says:
"We received a number of comments from staff about the loss of the medically-orientated unit in C Wing following the 1979 inmate

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disturbances. This small unit, which was first taken into use in 1970, provided a regime for the care, training, management and treatment of prisoners with particularly difficult behavioural problems. It seemed to us that it had proved its worth as a means of enabling the staff to respond to the needs of a particularly difficult section of the population in an environment which kept tension to a minimum. We were disappointed that it had not yet proved possible to reinstate the unit".
I have made inquiries and understand that improvements have been made in the situation since this report, which was made in 1982, was submitted. But I understand the situation has not improved very much.
I have here a report, made in 1983, on a visit to Ashford. It says:
"Some of the discipline staff in the main wings of the Remand Centre had encountered difficulties in dealing with mentally disturbed prisoners, and we felt that greater use should be made of the hospital to care for these inmates, particularly since some accommodation was available there. Discipline staff would also benefit from guidance and close support from the medical staff in their dealings with those disturbed inmates whose condition was not sufficiently serious to justify admission to the prison hospital".
That is the very issue we are discussing tonight. The report continues:
"More generally, Ashford encounters the problem common to so many Prison Service establishments of gaining entry to NHS psychiatric facilities for inmates who are mentally disturbed".
I believe those reports are germane to the subject we are discussing tonight.
I wonder if the noble Lord would take on another aspect which is not related directly. Does the Minister understand the dilemma, the anguish and the despair of many magistrates—my wife is one—who have to deal with and sentence mentally-ill people when, for instance, Friern Barnet and Claybury mental institutions, which are within the area in which we work, in our part of the world, are slowly but certainly being squeezed out as an option which may be available to them?
In conclusion, I should like to say that I can think of nothing worse than being in prison. I can think of nothing worse than suffering a mental disorder. To have those two sorry states compounded—to suffer the disorder while in prison—is bad enough, but to do so and not have access to proper and remedial treatment must surely be depressing and agonising in the extreme. The Minister will know that his concerns are shared by many others, not least prison officers. They want to be more than just the turnkeys of yesteryear. They have a constructive role to play in general but especially in looking after those in their charge who are unfortunate enough to need psychiatric care. Tonight the Minister can go some way towards assuring the whole prison society that he has plans to bring relief, and not only plans but the will and the resources to put those plans into effect.
9.12 p.m.
Baroness Ewart-Biggs: My Lords, in putting this Question before your Lordships this evening my noble friend Lord Longford has very rightly focussed attention on the plight of a particular group of people who are really among the least fortunate members of the community. He has also brought to light the failure to deal satisfactorily with their tragic situation. We have benefited from the highly specialised knowledge
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of the noble Lord. Lord Avebury, and the noble Lord, Lord Allen of Abbeydale, who with his background of expertise and very great experience has put some very searching questions to the Minister. I know that we all look forward very much to hearing the answers the Minister will be giving.
I certainly do not feel that I am in a position to add anything to the extremely expert evidence given by the two noble Lords. My noble friend Lord Graham has put the case from the prison officers' point of view. I know how very grateful we are to him and how very useful it was to hear the whole case from that particular aspect.
Therefore. speaking from the Front Bench in support of my noble friend, I should merely like to make a few general points which represent the anxieties expressed by the National Association for Mental Health. I should also like to describe the circumstances surrounding one particular case involving the detention of a mentally abnormal offender of which I have personal knowledge.
First, I should like to put forward the points raised by the National Association for Mental Health, which is obviously extremely concerned about this particular area. The association has given some figures and I should be grateful if the Minister would confirm them. The figures given by MIND are as follows. The number of persons in prisons on 31st March 1984 formally identified as mentally disordered was 310, of whom 144 were sentenced and 166 were on remand. The association points out that in many cases psychiatric care in prisons for these persons is inadequate or non-existent. That point was borne out in the report of the Chief Officer of Prisons.
The association also has considerable concern about conditions in Holloway Prison and would like to express the shock it feels about the lack of psychiatric care in particular cases which have been referred to its own legal department. There is no doubt that certain conditions in Holloway have found their way into the press and we have heard of horrific incidents where women have injured themselves and are quite clearly in very serious need of psychiatric care.
The association emphasises the point which has already been made by noble Lords that all mentally disordered patients must be treated and transferred to hospital if necessary without delay. The association points out. as has been said, that many transfers do not take place or are delayed due to lack of appropriate beds. The association also stresses that it is important that Sections 35, 36 and 38 of the Mental Health Act 1983 should be used to identify the needs of offenders and accused persons before prison sentences are passed. It feels very strongly that appropriate disposal by the courts is crucial.
Although the sections that I have mentioned became law on 1st October 1984, the association has been made aware that in some cases hospitals have been reluctant to accept accused persons under Section 35—which is the section which relates to remand to hospital for a report on the mental condition of the accused. Finally, the association emphasises the desperate need for an efficient and effective transfer system to enable hospital care to be made available for prisoners, which, as I have said, is

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a point which has been put forward in detail by previous speakers.
I should also like briefly to describe the circumstances surrounding one particular mentally abnormal offender who was brought to my notice. I do not have the experience and expertise of the previous noble Lords who have spoken. However, when speaking to friends in a community health council in Leeds I was told the circumstances of a particular case which brought this problem very much to a head as far as I was concerned. The particular case concerned a 44-year old mentally handicapped man with a personality disorder. In 1982 he had spent time in a mental hospital, but in June 1983 his elderly mother, who is also mentally disturbed, contacted the community health council for advice. She told the council that her son had been sentenced for an offence and put into Armley Gaol. But her major concern was as to what would happen to him after his release in November. This really relates back to the point which has been made about what type of care can be given to people who have been in prison and who then come out and find that their families are unable to cope with them. I was told how very often the families of mentally disturbed people who have been detained are themselves of a disturbed nature and are often from deprived backgrounds.
However, as I have said, the mother telephoned the council daily and described how her son's condition had seriously deteriorated in prison and clearly she was in no position to cope with him on his release. The council, recognising that their function is in relation to the National Health Service and not to the Prison Service, informed the probation officer, who met the released prisoner at the prison gate and arranged for him to be taken back into the mental hospital where he had originally spent some time in 1982. The patient was then released, and his elderly mother remains in a state of deep anxiety as to what will happen to him next.
Resulting from this, however, the Leeds Community Health Council decided to find out what was the situation regarding mentally ill offenders in Armley prison, and wrote to the Home Office asking for this information. Eventually, in December 1983, the council received an answer to their letter written in June, and this appears to me to be a strangely long interlude. I can appreciate that it was not the business of a community health council, but nevertheless they were there trying to help this particular person. They then got the information that there were nine offenders categorised as mentally disordered who were in the prison on remand, and they were told that there were no transfers pending. So here were nine of the mentally disordered offenders who, in the words of the Chief Inspector of Prisons, were inappropriately confined to prison.
I find surprising the case of the community health council who were trying to help this particular family and I also find surprising the interlude of six months before they received a reply to their letter. This particular instance, however, brought home the full reality of the isolation of this small group of unfortunate people and the great feeling of being alone which they and their families must have. So many of the families are unable to cope with the problem of
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dealing with a relative who is in this particular situation, and one wonders who there is to intervene on their behalf. It is for that reason that we are so grateful to my noble friend Lord Longford for taking the opportunity this evening to intervene on their behalf. It is for that reason that I hope the Minister will make a positive and helpful response to what the inspector said in his report and will also give positive answers to the many complicated points which noble Lords have put to him this evening.
9.24 p.m.
The Minister of State, Home Office (Lord Elton):
My Lords, I certainly shall not satisfy your Lordships tonight, and that is for a number of reasons. One is that I am not now satisfied myself, and no responsible Minister could rest content with a position where any people who ought to be in hospital are in fact in prison. But for reasons which I shall go into I fear that on that score it is unlikely that any of my successors will be fully satisfied, either.
Another reason is that I have never, in the compass of so short a debate, received so many questions. I should like to thank those of your Lordships—and in particular the noble Lord, Lord Avebury—who have been kind enough to give notice of your questions and who therefore have a better chance of getting an answer than those who have not.
Further, I would say that the noble Lord, Lord Graham of Edmonton, widened the debate just a fraction, to put it, quite legitimately, into the context of the whole range of staffing, inspectorial and resource problems which the department now faces. I cannot entirely rise to the challenge which he puts before me, however, because of the constraints not only of time but also of the Order Paper.
I remind those of your Lordships who will not tonight get replies to your questions of the comforting and new tradition that the answers which I am bound to send you will be deposited in the Library, so that each of you can see what I have said to the other and, as a result, doubtless make my life difficult again on a future occasion.
The noble Earl has raised a very important issue. It is a very difficult one as well, as he has rightly said, and for many of the individuals concerned it is a tragic one. It is particularly apt because, borrowing the words of the Chief Inspector of Prisons, it concentrates on the question of what is appropriate. Too often it is assumed that the problem of dealing with prisoners who need psychiatric care is a purely mechanical one; that it consists only of providing adequate resources and passing effective laws.
That is not the only misapprehension. Let me quote Dr. Peter Scott, one of this country's most distinguished forensic psychiatrists, who bears me out.
"Most people",
he said,
"harbour the basic fantasy of, on the one hand, a warm liberally equipped and permissive hospital system where treatment is applied by doctors and nurses to persons who are suffering through no fault of their own; on the other hand are the prisons where people are punished for wicked behaviour which they could renounce if they wished, and who should therefore be prepared to accept rigorous conditions and custodial turn-keys. Obviously,"

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he went on,
"neither side of the picture is correct".
It is tempting, and it is even comfortable, to say that if a prisoner needs psychiatric care and attention, or even if he might benefit from it, he ought to be in hospital and not in prison, as though that disposed of the matter. But it does not. Detention in hospital raises moral questions every bit as thorny as detention in prison, and sometimes even thornier, since they involve questions of medical ethics, such as the implications of detaining somebody for treatment which could well have been refused while at liberty.
My Lords, we debated this very issue long and intensely during the passage of the Mental Health Act. As a result, Parliament then decided that it would be wrong to transfer a prisoner to hospital and to detain him there for treatment, whether he liked it or not, unless there were very clear grounds for doing so. Accordingly, the only grounds provided under the Act are that the person in question is suffering from mental illness. psychopathic disorder, mental impairment or severe mental impairment which is of a nature or degree which makes detention in hospital for treatment appropriate; and, in the case of psychopathic disorder or mental impairment, there must be evidence that treatment is likely to alleviate or prevent deterioration of the condition.
I want to make it quite clear that this means that we cannot, in law, transfer to hospital under this Act a prisoner with a personality disorder, if his or her condition does not constitute a mental disorder in the terms of the Act; nor can we transfer a prisoner who is suffering from a psychopathic disorder or mental impairment if it cannot be treated in the sense of alleviating the condition or preventing deterioration; nor can we transfer a prisoner who is mentally ill unless the condition is of a nature or degree which makes detention in hospital for treatment appropriate.
This is not an accident of drafting; it is not the result of expediency; it is the considered view of successive Governments, and of Parliament itself, of the extent to which it is morally right to detain people in hospital against their will. Of course we then have to consider how those who cannot be transferred should be treated in prison. I shall turn to that in a moment.
But I should like, first, to explain what we are doing to transfer those who meet the criteria of the Mental Health Act. The Home Secretary stated at last year's Conservative Party conference that prison is not the right place for such offenders and that he was determined that all possible progress should be made in finding them hospital places.
Considerable progress has since been made in this, particularly in relation to sentenced prisoners. Since 1977 prison medical officers have every six months taken a census of prisoners whom they considered to be mentally disordered within the terms of the Act; that is to say, prisoners who are not only disordered, but who also satisfy the criteria for transfer to, and detention in, hospital. I readily accept that those who are not transferred were inappropriately located in prisons; and that is a direct answer to the direct question of the noble Earl.
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The noble Lord, Lord Avebury, asked me to go back a little. In March 1983 the figure for the sentenced section of the number of people was 160. I might say that we started on 30th June 1977 with 517. I think the noble Lord wanted me to begin with March 1983, and we were then down to 160. On 29th September 1983 there were 118. There was then a kick in the graph to 144 on 31st March 1984. On 30th June this year the figure was 102, and on 30th September this year it was down to 91. Those are I think encouraging figures. Of course I am not happy while the 91 remain, but it would be a formidable task to move them, and I shall return to that point.
The noble Lord, Lord Allen of Abbeydale, asked me about the unsentenced figures.
Lord Allen of Abbeydale: My Lords, I asked whether the criteria had been changed. The Minister explained that new tests were imported by the 1983 Act. Does that of itself mean that the numbers were reduced, that some who were regarded as eligible before that Act was passed are no longer regarded as eligible because the rules have been altered?
Lord Elton: My Lords, I was coming to that after the figures. I shall find my note now and not read it out twice.
The 1983 Act incorporates an additional requirement into the criteria which the courts have to apply before they can make a hospital order. In the case of offenders suffering from psychopathic disorder or mental impairment, the courts must now be satisfied, as I have already said, that treatment must be likely to alleviate or prevent a deterioration in this condition. Although on the face of it this might seem to present an additional obstacle to securing the admission of such offenders to hospital, in practice it does no more than give legislative recognition to the medical criteria which were already applied in practice under the 1959 Act. Indeed, most of the decline in recent years in the number of hospital orders with restrictions made by the courts can be accounted for by the fall in the number of recommendations in respect of persons suffering from mental impairment or psychiatric disorder.
Having said that (the noble Lord will see why I was going to put it the other way round) I have to read the figures for the unsentenced part of the table, the first half of which I gave to the noble Lord, Lord Avebury. The March 1983 figure was 159: in September 1983 it was 198: the figure in March 1984—that is, this year's figure—was 166: the June figure was 150 and all those figures are much of a muchness. We come in September this year to 192. It is notoriously dangerous to deduce anything from one sampling figure and that kick in the graph is, on its own, no more alarming than the others that I have recited. If it is repeated, that is a different matter, but it is too early to say.
As I say, the reduction is particularly striking in relation to sentenced prisoners. I have given your Lordships those figures already. There is concern about the length of time that it takes to complete a transfer, but in the case of nearly half the 150 prisoners transferred in 1983 the Home Secretary's direction for transfer was issued within one week of the receipt of the recommendation. Nevertheless, we are not

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complacent and both the Home Office and the Department of Health and Social Security are making continued efforts to reduce the problem further.
The Earl of Longford: My Lords, I want to interrupt the noble Lord as little as possible, but does he intend to deal with the statement of the Chief Inspector that there are many mentally ill people who are inappropriately confined? Does he intend to deal with that or has he somehow managed to sweep it aside?
Lord Elton: My Lords, I gave a direct answer to the noble Earl's direct question. I think he was doing what I often do when I do not answer a question and that is writing down a note of what I had said just before. But as soon as I came to the figure of 91 at present in prison, who it is agreed should not be in prison, I said that I readily acknowledged that they were inappropriately contained. The noble Earl will want me to go further and say whether what we do for people who are in prison is in itself appropriate. That is what I want to do next.
The Earl of Longford: My Lords, forgive me but the noble Lord really has not answered my point, except in a way that I can hardly credit him with. When the Chief Inspector says that there are many people among the 40-odd thousand people in prison who are inappropriately confined because they are mentally ill, he cannot expect us to suppose that the Chief Inspector meant that there were 91 people.
Lord Elton: My Lords, on the other hand the noble Earl might be expected to assume that the figure of 183 people was "many people" and those are the figures which I gave. We could spend some time debating the others. As convention does not allow me to speak much longer and I have much more to say, I think it would be most useful if I proceeded with this material and perhaps tried to return to the other, if there is time enough at the end of the debate.
We are particularly concerned about unsentenced prisoners (to whom I referred) since these now comprise over two-thirds of the total of prisoners assessed as mentally disordered within the terms of the Act. This reflects the fact that, until recently, the powers for transferring unsentenced prisoners to hospital were rather narrower than those which apply to sentenced prisoners. There may, too, have been some wariness of appearing to influence the court's eventual decision.
But on 1st October this year we brought into force new provisions in the Mental Health Act 1983 which specifically address the problem of unsentenced prisoners. These give the courts new powers to order remand to hospital for a report on an individual's mental condition or for treatment, and to make interim hospital orders. The Government believe that these powers will make it easier to find places for such offenders by enabling the hospitals to evaluate them on a trial basis. We therefore hope for a gradual reduction in the number of unsentenced prisoners in the six-monthly census.
Another important provision is Section 39 of the Act which came into force on 30th September 1983. This requires regional health authorities to give to the
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courts on request information about hospitals which could provide accommodation for offenders in respect of whom the courts are considering hospital orders. This should help the courts to establish what facilities are available and also which is the appropriate hospital catchment area. Officials of the Department of Health and Social Security have had detailed discussions with senior officers of the National Health Service authorities, consultants and senior nursing staff from individual hospitals, directors of social services and prison medical officers about the problem of "difficult to place" patients generally—and into that category fall some of the people the noble Earl referred to—and ways of making the required facilities available.
The effectiveness of Section 39 is being closely monitored and we hope that the new arrangements will reduce the number of cases in which, although a hospital order appears appropriate, the court is unable to find a place. Only 20 referrals were made under this section in the first nine months of this year, and the average time it took to place in hospital such patients, who were found to be mentally ill within the meaning of the Act, was just under four weeks.
As another part of our effort to get the best out of this Act the Home Office is examining the cases of those prisoners in one of the recent surveys who were assessed by medical officers as mentally disordered, and detainable under the Act, to check whether recommendations for transfer have been made, and if not, why not. Where recommendations have been made but there has been difficulty in finding a place we are informing the DHSS in order that they may look inot the matter. We believe that this will help ensure that the census both concentrates on those who can be transferred to hospital and is itself a spur to action.
Noble Lords have for long been interested in regional secure units as places of containment for those for whom prison is not appropriate. Significant progress has been made recently with them. The noble Earl correctly quoted figures given to your Lordships by my noble friend Lord Glenarthur. Seven permanent regional secure units are now open. These will eventually provide a total of 264 places, of which about 120 are now staffed and available. I should add that in most of the units the places are being brought into use in stages. Two further permanent units, providing a total of 51 places, are complete but not yet open. Both units are expected to admit their first patients in the spring. The South-East Thames multi-site scheme, which comprises five units, providing a total of 90 places, will be completed by the end of this month. All five units are expected to admit their first patients in February or March 1985. In addition, two permanent units, providing a total of 128 places, are under construction and are expected to be completed during 1985. Four further permanent RSUs, providing 175 places, are at various planning stages.
We are therefore now seeing real progress across the country in the establishment of RSUs. Nationally nearly 500 places are expected to be completed in permanent RSUs by early 1985 and, as the noble Earl has said, nearly 650 by the end of 1987. He smiles, because I am running on what he regards as predictable tramlines, and he is thinking back to the departure point of the interim Butler report in 1975 which was studied in conjunction with Dr. Glancy's

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DHSS working party report which followed it very shortly. Butler saw a need for about 2,000 beds nationally. Glancy saw a need for about 1,000 beds nationally. Following due consideration, the department concluded that initially regions should be asked to create sufficient beds to meet the Glancy requirement of 1,000 and review the situation when the programme had advanced. The department's RSU policy is based essentially on the Glancy principles.
That wil achieve an even sharper focus if I tell your Lordships that at any one time there are, as I understand it, about 100 of these beds taken up. As to the proportion of them that are taken up by people who have been transferred under Sections 47 or 48 of the Mental Health Act 1983, I shall have to write to the noble Earl, but the fact remains that there is actually room in the system already, and as we increase our ability to transfer prisoners out, so the accommodation will become available to receive them into the system. Therefore I hope the noble Lord will feel that the tramlines on which I have been travelling have arrived at a useful point.
As we are on the subject of security, if for no other reason, I might just mention the length of time which people may be expected to spend in the high security cells at Wakefield. I think it was the noble Lord, Lord Avebury, who asked me whether, if it was to be indefinite, the prisoner should not be told so. We have no intention that it should be indefinite, because we think this is something that ought to be reviewed as a regular precaution; and in fact the Director General does review each case annually. I think the noble Lord had it in mind to ask me about the position of one RJM. His review has recently been completed and the intention is that he should stay there. However, it does not follow from that that he will stay beyond the next review, when again his case will be looked at on his merits, if that is the right term.
On the question of who should be admitted to regional secure units—that was asked by the noble Lord, Lord Allen of Abbeydale—our view is that decisions on admissions are for those running the units to take, having regard to the particular behavioural problems of individuals the majority of whom are likely to be suffering from some form or other of mental disorder, and their likely response to treatment. It is expected that patients will remain in a unit for not longer than 18 months to two years.
I think at this point I must briefly pause to pick up the challenge which the noble Earl has been throwing before me constantly and say that there will always be a difficulty about placing patients, because it is not the function of the Prison Service or of the Secretary of State at the Home Office or the Secretary of State for Health, or indeed for Parliament, to tell an individual doctor or medical team that they must contain an individual patient. Their job is to treat. The first thing the Act requires is that treatability should be established. The second thing is that the doctor must himself decide whether he is able to treat. I see from the position of the noble Lord, Lord Allen of Abbeydale, that I am in danger of precipitating a debate such as we had on the Mental Health (Amendment) Bill, as it was, some 2½ or 3 years ago; but the fact is that doctors cannot be compelled to
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keep secure people whom they do not themselves feel able to treat, because you are then asking them to do the job which is in effect the job of the Prison Service; and one cannot direct them. If the noble Lord wishes me to give way, I will—but briefly, because I am going to be in very bad books with the Chief Whip, if I take too long.
Lord Allen of Abbeydale: My Lords, I wanted merely to say that there is a well-understood policy as to who goes to Broadmoor, Rampton and the other two special hospitals. One would hope that there might be a similar policy for the regional units: evidently there is not.
Lord Elton: My Lords, I think this is something which may develop in time, but at the moment every case is carefully discussed. It may be that, with experience, those in the newer RSUs will come to recognise the cases and some transfers will be made as a matter of course, but that is an aspiration and not a prediction.
I am bound to discard some material. I think that the arrangements for transferring prisoners to hospitals under the Mental Health Act are now working more effectively than they were. That is not to say that the system is perfect or that the noble Earl will be satisfied, and it is right that noble Lords should keep harassing the Government to continue to improve their performance. We now have more places for difficult patients than we did have, and we have reason to expect further progress; but this does not dispose of the problem. There will always be, as the noble Earl has reminded us and as the chief inspector has also reminded us, those who though clearly disturbed are not diagnosed as suffering from mental illness or one of the other forms of mental disorder warranting detention in hospital under the Act, and who must therefore be detained in prison. The purpose of my aside to the noble Lord, Lord Allen of Abbeydale, was to give some indication of who those people would be.
These cases do not comprise a homogeneous group. It includes a few who are very disturbed, perhaps aggressive or even dangerous, but a larger proportion who are suffering from difficult though less aggravated conditions: for example, the burnt-out schizophrenic, whose condition is no longer deteriorating but whose behaviour can be bizarre and who needs careful management, those with behavioural problems over which they need help and others who have no underlying mental problem but who may be seriously depressed or very anxious from time to time.
The group of prisoners with psychiatric problems for whom transfer to hospital is not, in the words of the Question and the Act, "appropriate", is a very mixed one and it follows that there is no single right way of treating them. Many are capable of serving their sentences in an ordinary prison location unde regular medical supervision. Others need to serve shorter or longer periods in a prison hospital. Of course, the presence in the prison system of a sizeable proportion of prisoners who need psychiatric care and attention, some behaving in bizarre and threatening ways, places a great burden on staff.
I pause here to endorse everything that was said by the noble Lord, Lord Graham of Edmonton, about the

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staff, because here I am talking about the prison service as if it is some sort of machine which will take on any task with which the hospital service does not feel itself able to cope. That is not just a statistical or management problem; it is a very deep, testing and personal problem for the people involved in the case. I am very much aware of the extent to which the service and society as a whole, and indeed the prisoners themselves, are indebted to them.
It is a measure of our recognition of this task that we decided last year to double the initial training period for prison hospital officers and to devote the extra time entirely to aspects of the care of mentally disturbed prisoners. The course was 12 weeks—
The Earl of Longford: Will the noble Lord give way?
Lord Elton: My Lords, I really think that I ought not.
The Earl of Longford: My Lords, my point is on that. It is a question of fact. Would that apply only to officers in special hospitals or in prisons?
Lord Elton: My Lords, that would be prison hospital officers across the board. I really think, with your Lordships' indulgence, that I must not give way again, however negligent I have been in making points.
Then there are the medical officers. Almost one-third of our medical officers hold psychiatric qualifications. Most of them have a great deal of experience of psychiatric work. In addition, prisoners have access to National Health Service facilities through their medical officers. In 1983 nearly 11,000 prisoners were referred to visiting psychiatric specialists, and more than 2,000 to consultant psychiatrists. So prisoners have available to them considerable psychiatric resources from both inside and outside the prison service. But there are clearly some mentally disturbed prisoners who cannot themselves cope with an ordinary prison environment or who cause problems for other prisoners and staff because of their unstable and aggressive behaviour.
The noble Lord, Lord Avebury, referred to a number of cases. If I do not deal fully with them, I will endeavour to write to him. On the case of the prisoner whose initials were D.J.L., he is to be seen by an assessment team from Park Lane hospital in order to determine whether he is suitable for admission to that establishment. When they indicate the date on which they can assess the prisoner, the necessary arrangements will be made. The medical officer at the prison where this person is currently located considers that it is in his own interests that he should be on normal location, but this does not in any way prejudice consideration of a transfer to a special hospital.
The noble Lord, Lord Avebury, also referred to a prisoner whose initials are J.S.B. He has been in Parkhurst since March 1982 and reports, including a medical report, on his progress there were received in the Home Office a couple of months ago. In accordance with the revised procedures for dealing with life sentence prisoners announced by my right honourable friend in November last year, we have recently sought and received the views of the judiciary on the period of detention they believe appropriate to
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the offence. My right honourable friend has, in the light of those views, decided the date of the first reference of the case to the local review committee, and the decision will be made known to him shortly. There is nothing in the recent medical reports to suggest that he needs treatment in a special hospital.
The noble Lord asked about a prisoner, Mr. A.G.D. He has been reviewed for parole, as the noble Lord will recall from correspondence, on eight occasions—the first in 1969 and the last in 1982—and on no occasion has parole been authorised. Unless there are developments in the coming months which indicate otherwise, the case will be referred to the local review committee again in October 1985. He is at present accommodated in the hospital at Parkhurst. Should his condition deteriorate to the extent that he needs to be transferred to a mental hospital this can be done.
The noble Lord had an interesting idea which I believe sprang from that case. He suggested there could be something equivalent to the Mental Health Review Tribunal in the event of a prisoner being detained beyond what is the recognised tariff for his case. I should be very rash indeed to say more than that it is an interesting idea which I will take away. I think he can see that there would be statutory difficulties as well as administrative ones. However, I am obliged to him for suggesting it.
I regret that I am not going to be able to say all that I wish. Noble Lords know that we are pressing ahead with C Wing at Parkhurst. I think that some of our most harrowing cases come through the C1 Unit at Holloway prison. That unit has recently been the subject of interest and your Lordships may wish me to spend just a few moments on it. It can hold 46 inmates. The average number held there is about 40. It has 26 single rooms and four dormitories holding five women each. When it was first opened in 1977 it had the primary function of holding and caring for the most disturbed women received into Holloway. This included women who were psychiatrically ill and those whose behaviour or mental state was clearly disturbed—as shown by the difficulties they presented in the management of their persistently disruptive behaviour—but who were not considered to he suffering from mental illness. It was also used to hold women needing special supervision because of the nature of their charge.
Over the years the pattern of allocation to the unit has changed and it now accommodates up to 90 per cent. remand prisoners, most of whom are there for medical assessment and reports to courts. A majority of the inmates on the C1 Unit are diagnosed as being mentally ill. The daily routine follows the normal timetable for the rest of the prison. However, rather than being required to work, all women who are fit enough go to the skills training unit, formerly an occupational therapy unit, which is staffed during the working day by a mix of civilian instructional staff, discipline officers and nursing staff. I am sorry to say that staff shortages sometimes preclude the operation of the skills training unit and the staff then habitually go to the C1 Unit to give instruction there.
The C1 Unit is a medical unit and is under the direction of the senior medical officer. Additionally, a consultant forensic psychiatrist and his senior registrar oversee the psychiatric care of the women by

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contributing five and four sessions a week respectively. The previous medical director of Broadmoor contributes three sessions a week to Holloway, including C1 Unit. One of the full-time medical officers who is also a psychiatrist contributes when required. The unit is staffed jointly by nurses and prison officers. It also has the services of the probation, psychology, chaplaincy and education departments and the staff of the skills training unit.
The majority of the women on the unit are very disturbed and require a caring and supportive environment. Many are considered to be at risk of injuring themselves. The study revealed that although 59·1 per cent. of the women had been thought to be at risk of harming themselves, the rate of serious self-injury was lower: 6·8 per cent. of the women were officially recorded as having injured themselves. I am aware of recent horrific cases of self-injury on the unit. I am glad to say that all three women concerned have since been transferred to special hospitals. The staff at Holloway responded in a most caring and professional way to these very distressing incidents.
Holloway does not, of course, consist simply of one specialist unit for seriously disturbed prisoners. It is, in fact, a big London prison attempting to discharge a variety of functions. It has an extensive remand commitment and it contains a number of other specialist units as well as C1. There is no doubt that its population includes a number of seriously disturbed and difficult prisoners. The redevelopment of Holloway has been going on for a number of years, and during that time ideas about the treatment of prisoners have changed a good deal.
We believe that the time has therefore come to review in some detail what the role of Holloway Prison should be within the women's prison system. We have therefore decided to set up a project committee to look urgently into these matters. The committee will be under the chairmanship of the Regional Director, South East Region, Mr. Colin Honey. Members will be drawn from both within and outside the department. The committee will begin work straight
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away, and will report to the director general of the prison service within about six months. I should say that my right honourable friend the Home Secretary takes as close an interest as I do in this matter. We are convinced that a fresh look at Holloway is needed, and confident that the project committee will be able to set Holloway Prison onto a new course.
I have no time to speak of the provision in the young offender service. I have to say that the Government agree that it is inappropriate that prisoners who are mentally disordered, and detainable in hospital within the terms of the Act, should be in prison. Good progress has been made in transferring them to hospital, but it is not yet complete. I cannot agree that we are or have been in any way complacent, as the noble Lord suggested. Nonetheless, to turn the question round, we recognise that there are others whom it would be equally inappropriate to detain compulsorily in hospital for treatment, either because treatment can be carried out equally well in prison or because their condition cannot in the present state of medical knowledge be treated at all. Those are the remainder who will always demand compassion of your Lordships, of prison visitors and of staff.
I conclude by thanking your Lordships for your compassionate concern. I repeat the great regard that I have for the staff who handle these sometimes appallingly difficult and very dangerous prisoners. It takes courage as well as patience and compassion to handle them. The answers to the many other questions that remain will appear eventually in your Lordships' letter-boxes.

Greater London Council (Money) (No. 2) Bill
Returned from the Unopposed Bill Committee with amendments.
House adjourned at four minutes before ten o'clock.

  PUBLIC EXPENDITURE CONTROL: BBC AND BRITISH COUNCIL
  PUBLIC EXPENDITURE CONTROL: BBC AND BRITISH COUNCIL
  TAXATION OF HUSBAND AND WIFE
  TAXATION OF HUSBAND AND WIFE
  FINANCIAL MANAGEMENT UNIT
  FINANCIAL MANAGEMENT UNIT
  NATIONAL INSURANCE CONTRIBUTIONS
  NATIONAL INSURANCE CONTRIBUTIONS
  AVEBURY: BYPASS SCHEME
  AVEBURY: BYPASS SCHEME
  LASER ROAD SHOWS
  LASER ROAD SHOWS
  WILDLIFE AND COUNTRYSIDE LEGISLATION
  WILDLIFE AND COUNTRYSIDE LEGISLATION
  CRICKHOWELL DEPOT CLOSURE
  CRICKHOWELL DEPOT CLOSURE
  STUDENT GRANTS: LEVEL IN U.K.
  STUDENT GRANTS: LEVEL IN U.K.
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  EDUCATION SUPPORT GRANTS