Sitting of 22 February 1984

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

    Geneva
    Sir Peter Blakerasked the Secretary of State for Foreign and Commonwealth Affairs if he will pay an official visit to Geneva.
    The Secretary of State for Foreign and Commonwealth Affairs (Sir Geoffrey Howe): I have no plans to visit Geneva at present. However, the Minister of State, my hon. Friend the Member for Shoreham (Mr. Luce), addressed the conference on disarmament in Geneva on the 14th of this month and laid particular emphasis on the importance of a total, worldwide ban on chemical weapons. As a further contribution to the negotiations, he introduced another in the series of British proposals on verification.
    Sir Peter Blaker: Is my right hon. and learned Friend aware that he will have the support of the House for the latest proposals put forward by the Government for a total ban on chemical weapons? Does he agree that it is one of the most important subjects now on the disarmament agenda, especially in view of the enormous stocks of chemical weapons possessed by the Soviet Union? Is there any sign of movement in the attitude of the Soviet Union towards the key question of verification?
    Sir Geoffrey Howe: I am grateful to my right hon. Friend for his support. I take this opportunity to congratulate him on the 21st anniversary of his first association with disarmament negotiations, as he was a witness to the 1963 test ban treaty. I agree about the importance of a worldwide ban on chemical weapons and about the size of stocks held by the Soviet Union. We are able to welcome, at least at the outset, the positive step announced yesterday by the Soviet Union on the continuous inspection of the destruction of chemical warfare stockpiles. Other aspects, however, have to be covered, including in particular the need for arrangements for challenge inspection. We trust that in further discussions there will be further advances from the Soviet Union.
    Mr. James Lamond: Surely the agreement of the Soviet Union to this measure came as no surprise to the
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    Foreign Secretary, as it is exactly in line with the proposals made at the United Nations special session in New York in 1982, when Mr. Gromyko made the same proposal, including the question of agreement to on-site verification.
    Sir Geoffrey Howe: As I have said before, on the subject of verification there has been some hope of arriving at common ground. The initiative tabled by my hon. Friend the Minister of State on the 14th of this month dealt with the additional and even more important subject of challenge inspection. The hon. Gentleman is right in saying that the response from the Soviet Union was not unexpected. We hope that in the course of further discussions we shall be able to persuade the Soviet Union that our other proposals are an essential complement.

    Southern Africa (Trade)
    Mr. Chopeasked the Secretary of State for Foreign and Commonwealth Affairs if he will increase the support being given by Her Majesty's embassies in the promotion of trade between the United Kingdom and countries in Southern Africa.
    The Minister of State, Foreign and Commonwealth Office (Mr. Malcolm Rifkind): No, Sir. We are satisfied that the present level of commercial staffing in and promotional support by our posts in Southern Africa is in keeping with our needs and interests. It is subject to continual review.
    Mr. Chope: In the light of the welcome rapprochement between the nations in Southern Africa, does my hon. Friend agree that the time is now right for a much higher political profile to be adopted by the British Government in promoting trade with all the countries of Southern Africa, on which so many jobs in this country depend?
    Mr. Rifkind: We have never hesitated to emphasise that trade with all the countries of Southern Africa is highly desirable in the interests both of the United Kingdom and of the countries in that region. We shall continue to do all in our power to ensure that British exports to and trade with those countries is at the maximum possible level.
    Mr. Nellist: Is the Minister talking about the desirability of trading with South Africa, a country which puts profits so high above regard for human life that last year 17,000 miners were injured and 800 killed? Is he saying that trade with such a country is important to British industry? Will he accept that the last major inquiry, in the late 1970s, into health and safety in South Africa showed that there were 29 factory inspectors for 30,000 factories, and that British investment is an important component in those factories?
    Mr. Rifkind: The hon. Gentleman will be aware that if the United Kingdom traded only with countries which have Governments with which we entirely agree, we should trade with only a few parts of the world. The United Kingdom trades with such countries as the Soviet Union and others in the Warsaw pact, about whose internal policies the hon. Gentleman is no doubt concerned. That has not prevented us trading with them, nor will it prevent us trading with South Africa.

    Russia (Human Rights)
    Mr. Sumbergasked the Secretary of State for Foreign and Commonwealth Affairs if he will seek further opportunities to remind the Soviet authorities of their human rights obligations under the Helsinki agreements.
    Mr. Rifkind: My right hon. and learned Friend raised the question of Soviet commitments in the field of human rights with Mr. Gromyko at their meeting in Stockholm on 19 January.
    We shall continue to take suitable opportunities to raise this question with the Soviet authorities.
    Mr. Sumberg: I welcome my hon. Friend's reply, but can he confirm that in any future meetings with the Soviet Foreign Minister he will continue to raise this issue, and will he make it clear that until the Soviet Union's record improves there can be no real advance in East-West relations?
    Mr. Rifkind: I can give my hon. Friend that assurance. We always make it clear to the Soviet Union that an improvement in human rights would be a clear indication of the Soviet Government's desire for a reduction in tension and an improvement in relations with the West.
    Mr. Cormack: Does my hon. Friend accept that if the new Soviet leadership wishes to have better relations with this country it can do no better than free Andrei Sakharov and some of his unfortunate compatriots?
    Mr. Rifkind: I can only agree with my hon. Friend. Mr. Sakharov is one of the best known dissidents in the Soviet Union, but sadly there are many tens of thousands of people who have been persecuted in the Soviet Union, and clearly an improvement in human rights there would make a substantial impact around the world.
    Mr. Anderson: Will the Minister confirm that during the Stockholm discussions with Mr. Gromyko only the most pressing cases, such as those of Anatoly Shcharansky and Mrs. Bonar Sakharov were raised, and will he seek opportunities to raise other acts of discrimination, particularly in relation to breaches of the postal regulations, and examples that have been given to the Foreign Office of confiscation of dictionaries and other material, in spite of the Helsinki agreements?
    Mr. Rifkind: It is regrettable that only a small number of individual cases can be mentioned during these meetings, but we use these opportunities to raise the general problem of interference in contacts between the Soviet Union and other countries, particularly as that affects agreements that come under the Helsinki accord, which the Soviet Union voluntarily signed.

    Lebanon
    Mr. Neil Thorneasked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the current situation in the Lebanon.
    Sir Geoffrey Howe: Fighting continues between the Lebanese armed forces and the Druze militia in the Chouf mountains. In Beirut the ceasefire is generally holding, but the situation remains tense. If further bloodshed is to be avoided, the Lebanese people must make further efforts to settle their differences by negotiation. We shall do all that we can to help.
    Mr. Thorne: Does my right hon. and learned Friend accept that the abrogation of the treaty between Lebanon and Israel of 17 May 1983 adds considerably to the comfort of the terrorist forces in the middle east, and that this is a bad thing, considering that one of the main hopes for peace in that area must be the support of the only democracy in that part of the world—Israel?
    Sir Geoffrey Howe: I appreciate that a number of different views are held about the 17 May agreement, which maintains the important principle of full Israeli withdrawal. Whatever one's view of this, it should not become an obstacle to progress on the important issues. There is no objection to alternative arrangements which have the agreement of all parties, but which must cater for the security of Israel's northern border.
    Mr. Douglas: Will the Secretary of State give the congratulations of both sides of the House to the British services for the evacuation of British civilian and military personnel from the Lebanon, and will he tell the House what representation, if any, he is making, direct or through our European partners, to the Government of Syria on this vexed question?
    Sir Geoffrey Howe: I am grateful to the hon. Member for what he said about the part played by the British forces. It will be a source of pride to hon. Members on both sides of the House that Foreign Ministers from a number of Community countries have expressed their gratitude to the British Government for the part that we played in helping the evacuation of citizens of other countries.
    The hon. Gentleman will recall that I saw the President and Foreign Minister of Syria not many weeks ago. We continue to make clear to them our view that they should be ready to take part in the negotiations that are necessary if we are to secure a settlement in Lebanon.
    Mr. Walters: Does my right hon. and learned Friend agree that recent events in the Lebanon have made it increasingly apparent that there cannot be a piecemeal approach to a peace settlement? What steps does he propose to advance towards a comprehensive settlement? Does he agree that talks between the Soviet Union and the United States at a conference in which Britain and other interested countries participated would be a step in the right direction?
    Sir Geoffrey Howe: I agree that it would be desirable if the settlement that we wish to see in the Lebanon could be set in the framework of progress towards a more widescale agreement, but that in itself serves to increase rather than to diminish the problem.
    Our position has been to support all steps that can be taken to promote discussion between the parties, with a view to reaching a solution based on the principles which we have many times enunciated, namely, the recognition of Israel's legitimate existence and need for security, and the recognition of the entitlement of the Palestinian people to self-determination.
    As to talks with the Soviet Union, I am not persuaded that a conference such as my hon. Friend suggests would be appropriate now. However, I raised the matter when I met Mr. Gromyko in Stockholm a few weeks ago.
    Mr. Alton: Will the Foreign Secretary say something about the situation in Palestinian refugee camps, especially at Chatila and Sabra, following the withdrawal of the Italian contingent from the peacekeeping force?

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    Does he agree that there is now a possibility of renewed pressures on the Palestinians in those camps, and should he not raise this matter with his counterparts at the United Nations.
    Sir Geoffrey Howe: I agree with the hon. Gentleman that this is one reason why it would be helpful if a larger role could be visualised for a United Nations force. We have been putting forward such a proposal. The difficulty is that such a force must essentially be a peacekeeping, not a peace-creating, force. It may be possible to secure an enlargement of the mandate of UNIFIL in that direction, and I shall bear the hon. Gentleman's point in mind.
    Mr. Weetch: Will the Foreign Secretary tell the House what he makes of the movement of Israeli heavy armour and personnel, as reported in The Times today, together with the extensive Israeli air attacks on Moslem positions? As Syria and Israel are essentially client states of superpowers, would it not be of advantage to peace in the area if a high level diplomatic initiative were taken to include the superpowers, to underpin any internal political settlement in the Lebanon?
    Sir Geoffrey Howe: I understand the hon. Gentleman's concern about the nature and scale of recent Israeli troop movements. As I emphasised, Israel is entitled to be concerned about the security of its northern frontier. However, it must be remembered that the objective of the 17 May agreement was to secure the withdrawal of Israeli troops. That can be brought about only if there is a willingness by both sides to promote progress in that direction, and that means a willingness on the part of Syria.
    It may be the case that a closer involvement of the two superpowers could help to promote that process. That is why I raised the subject in my talks with Mr. Gromyko, and I was glad that Mr. Shultz did the same. However, I remain to be convinced of the need for a wider conference.
    Mr. Healey: As the Prime Minister has said that the West must now seek an understanding with the Soviet Union on regional problems such as those in the middle east, can the Foreign Secretary tell us what specific steps he has taken to secure the support of the Soviet Union for the establishment of an enlarged United Nations force in the Lebanon, and what steps he has taken to secure Soviet understanding of any possible Western military action in the Straits of Hormuz, such as the Prime Minister envisaged yesterday, which, without Soviet understanding, could be pregnant with danger for world peace?
    Sir Geoffrey Howe: The right hon. Gentleman raises two separate questions. The attitude of the Soviet Union towards an enlarged role for the United Nations in the Lebanon has been the subject of discussion at the United Nations by our representative there for some time now. There are likely to be informal consultations later today on the basis of a French draft resolution, which is alongside the proposals which we have been putting forward. We are, of course, seeking to secure a helpful response from the Soviet Union to that proposal, but it must know that if it goes so far as to demand the removal of all United States ships from the area, that will be unacceptable. We are seeking to find ground on which the role of UNIFIL can be enlarged in that area.
    I understand the importance of the point that the right hon. Gentleman raises about the Gulf. It is right to say that
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    if the situation were to require any further movements of a significant kind there we should need to consider acquainting the Soviet Union of our position.

    Israel
    Mr. Mikardoasked the Secretary of State for Foreign and Commonwealth Affairs whether he will follow his recent visit to Saudi Arabia, Egypt and Syria by seeking to pay an early visit to Israel.
    Sir Geoffrey Howe: When I met Prime Minister Shamir in Brussels on Monday of this week, we agreed that I should visit Israel at the first mutually convenient date.
    Mr. Mikardo: While thanking the right hon. and learned Gentleman very warmly for that reply, may I ask him whether he will bear in mind in his conversations when he goes to Israel the fact that one of the things most desired as part of the settlement in Lebanon is the evacuation from Lebanon of all foreign forces—Israeli, Syrian, Iranian, Palestinian and all the rest? As there is some interlocking there of Syrian-Israeli relationships, will he see whether he can do something to bridge the manifest gap that exists there?
    Sir Geoffrey Howe: I am grateful for what the hon. Gentleman says. He is, of course, quite right to say that one of the objectives of everyone who is concerned with the future of the Lebanon is the withdrawal of all foreign forces, including Syrian and Israeli alike. If one speaks separately to the Syrian Government or to the Israeli Government, there is a ready endorsement of that principle. The problem is to secure the interlocking of the steps that are necessary to bring it about.
    Mr. Marlow: Will my right hon. and learned Friend condemn the recent bombing of Lebanese citizens by the Israelis, who always claim, of course, that they are bombing Palestinian terrorists, but anyone who follows the progress of Israel will realise that these are propagandist untruths? Will he also say, when he is in Israel, that Her Majesty's Government will not accept the establishment of a quisling force under Israeli domination in southern Lebanon?
    Sir Geoffrey Howe: I am not, I think, ready to endorse precisely the language used by my hon. Friend in the last half of his question, but I emphasise the fact that any moves that escalate the level of violence in the region make the solution of the problem more, not less, difficult.
    Mr. Cartwright: When the Foreign Secretary visits Israel, will he seek to persuade the Israeli Government that there cannot be peace in the middle east until the Palestinians are recognised as having the same rights as the Israelis to a free and independent homeland of their own?
    Sir Geoffrey Howe: One of the central principles of our approach to the problem is to emphasise the need for Palestinian self-determination to be regarded as essential in any negotiated settlement. That is to be placed alongside the point raised by the hon. Gentleman about the entitlement of Israel to a secure existence.
    Mr. Adley: So long as the United States involves itself with, and commits itself to, Israel, is it not unrealistic to expect the Soviet Union to remain aloof? Because of the failure of United States policy in the Lebanon, is it not

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    essential to involve the Soviet Union in peace talks about the middle east? Will my right hon. and learned Friend please be a little more forthcoming on this issue in view of the fact that hon. and right hon. Members on both sides of the House are trying to put to him the view that the European countries might be in a better position—
    Mr. Speaker: Order. The question relates to visits to Israel.
    Mr. Adley:—to facilitate peace between Israel and her neighbours?
    Sir Geoffrey Howe: Despite its length, my hon. Friend's question is well-directed. It is the case that the countries of Europe have a distinctive position and a distinctive contribution to make. We are anxious to see whether a solution can be found along the lines that I have suggested, and we have made it clear, as I have indicated, that this is a subject which it is sensible to discuss with the Soviet Union.
    Mr. George Robertson: The Secretary of State is quite right in saying that there can be no resolution of the problem of the middle east without providing security for Israel and self-determination for the Palestinians. In that regard, will he remind himself that there is no longer just one opinion within Israel about how that can be achieved? What is he doing to encourage voices within Israel, other than those of the present Israeli Government, to seek a better and more constructive way to peace?
    Sir Geoffrey Howe: As the hon. Gentleman points out, more than one view and more than one voice is being heard in Israel today about the way forward. No doubt the process of democratic debate within that country will secure an advance from the present position. But it is not for me to seek to interfere in that process.

    Oman
    Mr. FrankCook asked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on Her Majesty's Government's relations with Oman.
    Sir Geoffrey Howe: We enjoy excellent relations with the Government of the Sultanate of Oman.
    Mr. Cook: I am delighted with the information imparted to me by the Foreign Secretary. Has anyone taken the trouble to tell him—or has he bothered to find out—that a number of United Kingdom journalists have been denied access to the Oman to do their jobs? Does he agree that such a denial of access is an obstacle to the much-vaunted freedom of the press, of which we are so proud? Does he accept that the continued denial of access can do no good to the lasting relationship between our two countries, and if so, what will he do about it?
    Sir Geoffrey Howe: The points raised by the hon. Gentleman will be looked at.
    Mr. Hicks: Is my right hon. and learned Friend aware that the whole emphasis of the Omani Government and the Sultan is to strengthen political and economic relationships with Britain and, wherever possible, to award major capital investment projects to United Kingdom companies? Should not that be welcomed? Are not all the other aspects that have been mentioned in respect of the university contract wholly irrelevant?
    Sir Geoffrey Howe: I am grateful to my hon. Friend for his question. He is right to emphasise that British industry and expertise have a formidable and important part to play in the development of Oman, as they have been doing for at least the last 14 years. The United Kingdom is the second largest supplier of Oman. British exports to that country last year were just under £450 million, which represents an increase of almost 70 per cent. during the last two years.
    Mr. Johnston: Has the right hon. and learned Gentleman seen the report that there might have been a decision by the Iranian Government that, in any escalation of the Iranian-Iraq war, it would seize an Omani island in the Straits of Hormuz? In such a case, what responsibility would the Government have to the Omani Government?
    Sir Geoffrey Howe: I have not seen the report to which the hon. Gentleman referred. Our relationship with the Omani Government on any development in the Straits of Hormuz is one of close consultation and whatever action may be necessary.
    Mr. Healey: Is the right hon. and learned Gentleman aware that yesterday the Omani Government joined the other Governments in the Organisation of Gulf States, including Saudi Arabia and Kuwait, in warning that superpower intervention in the Gulf would be resisted at all levels? In view of the great danger to freedom of passage through the Straits of Hormuz, what steps has he taken to discuss possible contingencies with the Arab states in the south of the Gulf, as well as with the Soviet Union?
    Sir Geoffrey Howe: It is right that we should take account of the risk of any interference with passage through the Straits of Hormuz that could arise from an extension of the conflict in the Gulf. Therefore, it is a matter about which we have been consulting the Gulf states, as well as others.

    Chemical Weapons
    Mr. Robert Banksasked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the Geneva negotiations on the abolition of chemical weapons.
    Sir Geoffrey Howe: I refer my hon. Friend to the reply that I gave earlier to my right hon. Friend the Member for Blackpool, South (Sir P. Blaker). The latest British proposal on verification is further evidence of our determination to achieve the total abolition of these weapons. That would constitute an important step in practical arms control.
    Mr. Banks: Does my right hon. and learned Friend agree that chemical weapons are every bit as devastating as nuclear weapons? Is it not a sanguine reflection that Britain's renunciation of chemical weapons some 25 years ago, which set an example, has been received by an opposite reaction from the Soviet Union? Does he agree that the time has arrived when, at the long drawn-out negotiations in Geneva, we expect some positive response to come from the Soviet Union if an arms race in chemical weapons is to be avoided?
    Sir Geoffrey Howe: I entirely agree with my hon. Friend, as I am sure the whole House will. We renounced weapons of this kind many years ago. The United States

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    ceased producing chemical weapons as long ago as 1969. The stock of chemical weapons held by the Soviet Union is estimated at about 300,000 tons. This is an area where it should be possible to make progress and we hope that the Soviet delegation will adopt a forthcoming approach on all aspects of the negotiations along the lines that we have already discussed.
    Mr. Tom Clarke: Is the right hon. and learned Gentleman aware that agreement on these matters is not solely the prerogative of the Soviet Union? Did he have time this morning to read in The Times that the Soviet Union has expressed grave reservations about the sincerity of the West in trying to reach agreement? Do the Government accept that this is a major priority and is of the utmost concern?
    Sir Geoffrey Howe: The entire House is agreed about the importance and priority of this question. The United Kingdom has put forward a series of initiatives, starting in 1976, with the latest, as I said, last week. The United States has indicated its intention to put forward a further proposal later next month. It is important to make progress in this matter and we trust that in the course of further discussions we shall persuade the Soviet Union that the kind of proposals that we have introduced, including those for challenge inspection, are an essential complement to routine inspection arrangements.
    Mr. Key: Does my right hon. and learned Friend accept that were it not for the professionalism and dedication of the work force and public servants at Porton Down this country would not now be in a position to have a real and lasting effect on the future use of chemical weapons? Does he agree that it is time that there was some support from the Opposition Benches for the work of that establishment?
    Sir Geoffrey Howe: My hon. Friend makes a perfectly fair point. It would not be possible for us either to make provision for defence against weapons of this kind or to formulate proposals with the skill and tenacity of those that we are putting forward were it not for the contribution made by research work of that kind.
    Mr. Anderson: The reported progress on the permanent verification committee is to be welcomed. but how significant can it be if there is no move at all on the challenge procedures and particularly on the right of a state to refuse inspection?
    Sir Geoffrey Howe: The hon. Gentleman underlines the point that I have been making, that of drawing attention to the importance of challenge inspection. Clearly, there are still some difficulties to be resolved on that. The first thing is to accept the basic framework of the proposals which we put forward last week on that subject.

    Arms Reductions
    Mr. Nelsonasked the Secretary of State for Foreign and Commonwealth Affairs what is his assessment of the principal obstacles to progress being made on the negotiations leading to mutual and balanced force reductions.
    Mr. Leighasked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the mutual and balanced force reductions talks in Vienna.
    Sir Geoffrey HoweAt the end of the last round of the mutual and balanced force reduction talks, the East declined to begin the next round in January, as usual. I am glad that they have since agreed to resume negotiations on 16 March. The main obstacles to an agreement remain the Eastern refusal to co-operate in resolving the dispute over their current force levels. This makes it impossible to determine the size of reductions necessary to reach the agreed negotiating goal of 900,000 ground and air forces on each side. They have also been reluctant to accept adequate verification measures.
    Mr. Nelson: Does my right hon. and learned Friend agree that while the United Kingdom has made a number of constructive proposals for progress on the MBFR talks, it is disappointing to many people that for nearly 10 years no progress has been made on this front? Is he aware that many who take the defence of this country very seriously, at the same time strenuously believe that it will not be possible for us to face the electorate at the next general election with no progress having been made on this front, and that it behoves this country as well as the Soviet Union to press more strenuously for some consensus?
    Sir Geoffrey Howe: I have no doubt about the importance attached by every hon. Member to the chances of making progress with the negotiations. We recognise the importance of the role that we can and should play. It was for that reason that Ministers who attended the meeting of the North Atlantic Council in December commissioned a review of the negotiations. That review is under way. We wish to find any justifiable method of making further headway.
    Mr. Leigh: As the Soviet Union has claimed consistently that it has 150,000 fewer troops than it has in fact, will my right hon. and learned Friend confirm that it is vital that any agreement is subject to watertight verification, something which the Soviet Union has rejected consistently, for obvious reasons?
    Sir Geoffrey Howe: That is precisely the difficulty that has most bedevilled the talks so far. I am confident that my hon. Friend's figure for the Soviet Union's underestimate of its current force levels is correct. For that reason it is crucial to have an agreement on current force levels as a sign of the Soviet Union's willingness to make progress along the lines required.
    Mr. Norman Atkinson: Does the right hon. and learned Gentleman agree that it is somewhat perplexing when he complains that the Soviet Union does not recognise the methods of verification offered by the West as being substantial and satisfying in respect of its demands? The right hon. and learned Gentleman, the Prime Minister and other members of the Cabinet refuse to answer Members' questions on the verification of nuclear weapons in Britain and of those held by NATO, and United States Congressmen cannot obtain verification of the weapons held by the United States. When British Members of Parliament and United States Congressmen cannot obtain the information that the Soviet Union requires, is it any wonder that it is not possible to secure agreement on verification?
    Sir Geoffrey Howe: The hon. Gentleman raises a different question. We could only wish that the Soviet Union and its allies were as open in the presentation of their weapon and arms systems as the United States, the

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    United Kingdom and their allies. Effective verification is crucial and it must be reciprocal. It is in that area that it has been most difficult to secure an effective response from the Soviet Union.
    Dr. M. S. Miller: Does the right hon. and learned Gentleman care to estimate when the day will arrive when mutually balanced force reductions will enable the United. Kingdom proudly to say once more that it spends more of its gross domestic product on education than on defence?
    Sir Geoffrey Howe: In asking that supplementary question the hon. Gentleman is making a point with which we would all like to agree, for we would all love to live in a world in which the degree of expenditure on defence fell constantly. The percentage of the gross domestic product of the Soviet Union that is being spent on defence is about twice as large as that which is being spent in the United Kingdom.

    Uganda (High Commissioner)
    Mr. Peter Bruinvelsasked the Secretary of State for Foreign and Commonwealth Affairs when he last met the high commissioner of Uganda.
    Mr. Rifkind: My right hon. and learned Friend last met the Ugandan high commissioner on the 7 December 1983 during the course of the visit to the United Kingdom of the Ugandan Prime Minister, Mr. Allimadi.
    Mr. Bruinvels: I thank my hon. Friend for that helpful answer. Was he able to raise the issue of compensation for the Ugandan Asians who were expelled from Uganda 12 years ago, 6,000 of whom are resident in Leicester, who are beginning to lose considerable financial commitment? It is rumoured that some of them are working for wages that place them in the poverty gap.
    Mr. Rifkind: This issue was raised by my right hon. and learned Friend with the Ugandan Prime Minister. My hon. Friend will be pleased to know that the committee that has been established by the Ugandan authorities is now to begin its work on processing claims. We should be getting some real progress over the next few weeks and months.
    Mr. George Robertson: That is obviously a helpful answer. We must continue to hope that the discussions produce fruit. However, if the negotiations break down and the Ugandan Government return to their previous and first position, will the British Government make it clear that they will take over the negotiations on behalf of all the Ugandan Asians who are involved in this issue?
    Mr. Rifkind: There are more than 1,800 claimants in the United Kingdom alone, and therefore it will take some time for those claims to be processed. The Government have always made it clear that if the proposals and the structure established by the Ugandan Government did not work properly, or did not enable progress to be made, we would consider whether we as a Government were able to help the claimants in the United Kingdom.

    Cyprus
    Mr. Norman Atkinsonasked the Secretary of State for Foreign and Commonwealth Affairs if he will state the current situation in regard to Cyprus.
    The Under-Secretary of State for Foreign and Commonwealth Affairs (Mr. Ray Whitney): As I told
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    the House on 25 January, Mr. Denktash made some proposals on 2 January and President Kyprianou has given the United Nations Secretary-General the framework of a comprehensive solution. The Secretary-General is actively seeking to make progress with the parties in promoting a settlement of the Cyprus problem. Last month he met President Kyprianou, President Evren of Turkey and Mr. Denktash. We support his efforts and stand ready to help him.
    Mr. Atkinson: Is it not a fact that President Kyprianou has offered the Turkish authorities about 25 per cent. of Cypriot territory and full recognition in the formation of a Cypriot federal authority to govern those parts of the island occupied by Turkish people? Put together, does that not constitute a full recognition of the demands made earlier by Turkish people in Cyprus? Should not the British Government do everything possible to put pressure on Ankara so that Turkey will accept what is being offered by the Kyprianou Government?
    Mr. Whitney: The British Government recognise that progress must be made and that the best opportunities for progress lie through the actions of the Secretary-General. We support those actions.

  EUROPEAN COMMUNITY

    Brussels Summit
    Mr. MacKenzieasked the Secretary of State for Foreign and Commonwealth Affairs what prospects he holds out for the success of the Brussels summit in solving the current problems in the Community.
    Sir Geoffrey Howe: The principal issues in the negotiation were discussed at an informal meeting of European Community Foreign Ministers on 18 and 19 February and at the Foreign Affairs Council on 20 February. The French Presidency is also holding an extensive series of bilateral meetings. It is not yet possible to draw conclusions from those discussions. Our aim is to make decisive progress at the March European Council.
    Mr. MacKenzie: Will the Secretary of State give the House an assurance that he will firmly resist any suggestion, be it from the Commission, the Council of Ministers, or whatever, that money that should properly be spent on regional aid, modernisation of industry and providing jobs for our people, will not go to European farmers?
    Sir Geoffrey Howe: One of the central objectives of the negotiation is to secure a better balance in the expenditure and distribution of Community funds, and regional policy forms one part of those objectives.
    Mr. Yeo: Does my right hon. and learned Friend agree that, when the British people are being asked to accept cuts in expenditure on all sorts of desirable domestic projects, on housing, education, transport or whatever, it would be wrong to suggest that an increase in own resources of the EEC can be made for projects which, in the main, will be of no benefit to the British people?
    Sir Geoffrey Howe: My hon. Friend is right to draw attention to one feature which is increasingly dominant in the discussions—the need for all Community countries to maintain the strictest possible budget discipline. We are grateful for such firm support from the Socialist

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    Government of France on precisely that objective. Even when that is achieved, we must recognise also that the Community's objective, not least that of the common agricultural policy, is also a policy in which this country has some interest. Our task is to secure a better balance of policies, a firmer budget discipline and, above all, a better distribution of budgetary burdens.
    Mr. Boyes: What does the Foreign Secretary mean by saying that the present crisis is damaging our security objectives? Does he mean that he is working towards a separate EEC group, either inside or outside NATO, on security matters or — as many of us suspect — that, following the installation of the first missiles, the President of the United States of America is further interfering in European affairs? Is it that to which the Foreign Secretary is really reacting?
    Sir Geoffrey Howe: There must be almost no limit to the fancies which disturb the hon. Gentleman's mind. I have no concern of that kind. I have this point in mind —that the European countries, including those that are members of the Community, have an important common interest to promote. In the role that we played, for example, in the opening stages of the Stockholm conference on disarmament in Europe, it was of the greatest advantage to have co-operation, not just between members of the North Atlantic Treaty Organisation, but between members of the European Community.
    Mr. Bill Walker: Is my right hon. and learned Friend aware that the farming community in Scotland is worried about the difficulties faced in Europe, and is grateful to Her Majesty's Government for the payment of the hill livestock compensatory allowances?
    Sir Geoffrey Howe: I am grateful to my hon. Friend for what he said. We must seek to secure for British farmers in Scotland, as in other parts of the United Kingdom, the right to compete on fair terms with products in the Community.
    Mr. Robin Cook: Will the Foreign Secretary confirm that the increase in own resources proposed by Gaston Thorn at the weekend was not 1·4 per cent. of VAT, but a full 2 per cent. of VAT? Does the Foreign Secretary appreciate that that sum, on the harmonised base used by Brussels, would represent over one fifth of our total VAT receipts? If he has been successful in making progress towards gaining control of agriculture expenditure, why on earth does the Commission need to double its income?
    Sir Geoffrey Howe: No such sum was proposed at that meeting. We are as interested as the hon. Gentleman to ensure that any proposal for an increase in own resources is scrutinised with the utmost care. It would have to be justified. No conclusion has been reached yet. Beyond that, there can be no increase in the Community's own resources unless there is a successful outcome on the need for agreement on the effective control of agriculture and other expenditure, and of the need to establish an equitable financing mechanism.

    Budget Rebate
    Mr. Maxtonasked the Secretary of State for Foreign and Commonwealth Affairs if he will introduce legislation to authorise the suspension of future United Kingdom payments to the European Community if the promised 1983 rebate is not forthcoming.
    Sir Geoffrey Howe: As in previous years, we expect to receive the bulk of our refunds by the end of March. As my right hon. Friend the Prime Minister told the House on 7 December, if this does not happen, we would have to take steps to safeguard our position.
    Mr. Maxton: When the Foreign Secretary says, 'the bulk of our refund," does that mean that we will not get it all? Secondly, would it not be considerably better to have legislation on the statute book before the crisis arises rather than wait until it comes about and then have to rush legislation through the House in an unseemly manner?
    Sir Geoffrey Howe: The hon. Gentleman is running a great deal too far ahead of possible events. In earlier successive years the bulk of our refunds was secured by the end of March in those years. That is precisely our objective this time. If our refunds are not paid by the end of March on that scale, we shall have to take steps to safeguard our position. We shall consider what steps when the time comes.
    Sir Anthony Meyer: Is my right hon. and learned Friend aware that, whatever protestations may be made, there will be wide support for his refusal to allow short-term difficulties to prejudice the attainment of his longterm objectives? Is he further aware that if he succeeds in negotiating a package that safeguards this country's vital long-term interests, he will enjoy massive support from the Conservative side of the House?
    Sir Geoffrey Howe: I am grateful to my hon. Friend for what he has said. In these difficult negotiations it is right to remember their importance and the importance of the objectives that he has identified, and to achieve them in a sensible pattern.
    Mr. Deakins: Will the Foreign Secretary avoid the temptation of talking tough about this issue in public so as to save himself and his right hon. Friend the Prime Minister considerable embarrassment when they eventually have to return to the House before 31 March with a patched up agreement?
    Sir Geoffrey Howe: The hon. Gentleman can be assured that the presentation of our case by myself and my right hon. Friend the Prime Minister on these important issues is precisely the same in the House, in the Council chamber, in private or public. It is most important that the strength of our case should be fully and clearly understood.
    Mr. Marlow: At a time when we cannot even get our rebate back, and at a time when we are cutting public expenditure at home, how on earth can we even consider the possibility of increased European own resources? Will my right hon. and learned Friend say whether he has been considering what action would have to follow should the Government agree, by misadventure, to an increase in own resources and the House of Commons throws it out?
    Sir Geoffrey Howe: It has long been the position that Governments in this country have had to make judgments on matters of that kind whenever they are engaged in international negotiations. For just that reason, we continue to stand by the important conditions to which I have already referred, and there will be no question of an increase in own resources unless there has been satisfaction on effective control of agriculture and other expenditure, and on equitable financing.

    Trade Agreements
    Mr. Fallonasked the Secretary of State for Foreign and Commonwealth Affairs what trade agreements are currently being negotiated between the European Community and third countries.
    Mr. Rifkind: Apart from sectoral arrangements in textiles and steel, the only agreement covering trade currently being negotiated is the successor to the second Lomé convention, between the Community and African, Caribbean and Pacific countries.
    Mr. Fallon: As such trade agreements increasingly embrace the so-called voluntary restraints on imports into this country, thus allowing the Community effectively to enforce a cartel against its own citizens, will my hon. Friend reassure me that someone in his Department is representing the interests of the British consumer?
    Mr. Rifkind: Naturally, we take into account the interests of consumers, as well as the implications for employment in the United Kingdom, when agreements of this kind are negotiated. That will remain one of the important objectives of any agreement of this kind.
    Mr. Leighton: The Foreign Secretary said that he wants to make decisive progress in March. Does the Minister know of any occasion, at any of the summits that have ever been held, when Britain has ever made decisive progress, and does he draw any moral from that?
    Mr. Rifkind: I am not certain whether that matter arises out of this question, but the hon. Gentleman should be aware of the very substantial achievements that my right hon. Friend the Prime Minister has already obtained for the United Kingdom, both in the refunds that have been paid to us and in the fact that at the moment the Community is seeking a solution based on an agenda which, to a substantial extent, coincides with the objectives that the United Kingdom has always identified as the main problems that have existed within the Community.

    Spain and Portugal
    Mr. Foulkesasked the Secretary of State for Foreign and Commonwealth Affairs if he will take steps to accelerate the accession of Spain and Portugal to the European Community.
    Mr. Rifkind: We are already working for rapid progress, with a view to completion of the negotiations during 1984 so that Spain and Portugal can accede to the Community by 1 January 1986, as they wish.
    Mr. Foulkes: How does it help to speed accession by putting forward transitional agricultural proposals that enrage the Spanish Foreign Minister and threaten supplies of cheap fruit and vegetables to the British consumer? Does the Minister accept that Portugal's potential position as the poorest member, yet one of the net contributors to the budget, makes long-term budgetary reform even more urgent?
    Mr. Rifkind: The hon. Gentleman is correct in that the present negotiations on budgetary reform have importance not only for the present members of the Community but also in the context of enlargement. The Spanish Government were anxious that there should be a declaration at the Foreign Affairs Council at the beginning
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    of the week. My right hon. and learned Friend will be reporting on the various aspects of that in the context of the statement that he will make later.
    Mr. McQuarrie: Will my hon. Friend give a firm undertaking that before there is any question of Spain's accession to the Community all restrictions against Gibraltar will be removed?
    Mr. Rifkind: I assure my hon. Friend that the Government have always made it clear that when Spain joins the Community access between Spain and Gibraltar cannot be different from that between Spain and other parts of the Community. Agreement has already been reached between the Community and Spain on the external affairs chapter in respect of the accession negotiations, and we hope for an early, successful conclusion of the final aspect—the social affairs chapter.
    Mr. Johnston: Is it not contradictory on the one hand to call for the speedy accession of Spain and Portugal and on the other totally to oppose any increase in own resources, as without the latter we can do nothing for Portugal, the poorest country in Europe?
    Mr. Rifkind: It is not correct to imply that the negotiations with Spain are of a short duration. Spain originally applied seven years ago. Therefore, we are looking for a speedy conclusion to the negotiations rather than speedy negotiations as such. As to own resources, it is widely agreed within the Community that when Spain and Portugal become members their position in terms of their economies and agriculture industries is likely to make them net beneficiaries.

    Foreign Ministers
    Ms. Harmanasked the Secretary of State for Foreign and Commonwealth Affairs when he next intends to meet the European Economic Community Foreign Ministers; and what subjects will be discussed.
    Mr. Parryasked the Secretary of State for Foreign and Commonwealth Affairs when he next expects to attend the Council of Ministers of the European Community.
    Sir Geoffrey Howe: I next expect to meet my Community colleagues at the Foreign Affairs Council on 12 to 13 March. It is too early to say what items will be on the agenda but details will be made available by the end of the month in the usual monthly forecast of Community business.
    Ms. Harman: Is the right hon. and learned Gentleman prepared to put on the agenda the directive on part-time workers that has been in draft for more than two years, about which the Government have been dragging their feet, if not blocking the matter? Does not the right hon. and learned Gentleman recognise that most part-time workers are women, trying to cope with the competing demands of a home and a job? It is unfair for such women to be penalised by having inadequate protection against low pay and poor terms and conditions of employment. Will the Government stop blocking the draft directive?
    Sir Geoffrey Howe: The Government understand the importance of proper treatment of those in part-time work, and equal treatment between the sexes. The hon. Lady understands that legislation of this sort, especially in relation to the Community, is complex, but I shall bear in mind the points that she made.
    Mr. Rathbone: Will my right hon. and learned Friend tell the House his attitude towards the British contribution to the European budget when he enters the talks? His reply will also be of benefit to the Chancellor of the Exchequer when couching the Budget in a few weeks' time.
    Sir Geoffrey Howe: The arrangements for future financing are at the heart of the present negotiations. I repeat that our objective is, first, to secure effective control of expenditure generally, and in particular of agricultural expenditure. There is increasingly widespread support for such control throughout the Community. Secondly, we shall seek a fair arrangement for the redistribution of the budgetary burden in the Community. In those circumstances we may be prepared to contemplate an increase in own resources, but, if progress is achieved on all those points, the outcome should be that Britain will pay less than its present contribution.
    Mr. Faulds: When next the European Foreign Ministers meet, would it not be advisable for them to consider — in view of Israel's continuing aggressive policies in the middle east and disregard of United Nations resolutions — the EEC-Israeli trade and financial agreements, with the possibility in mind of review or even abrogation?
    Sir Geoffrey Howe: I understand the hon. Gentleman's point of view on that matter. It is a factor that we shall have in mind.
    Mr. Nicholas Winterton: When my right hon. and learned Friend next meets his colleagues in the European Community, will he discuss with them the dramatic decrease in justice in Zimbabwe, especially the totally unjustified detention of Zimbabwe's first black Prime Minister, Bishop Abel Muzorewa? Will my right hon. and learned Friend seek to persuade his colleagues to put pressure upon Mr. Mugabe's Government, so that justice may prevail in a country that was civilised until a few years ago?
    Sir Geoffrey Howe: I understand my hon. Friend's concern about that matter. However, it does not arise in the subject matter of these questions in any sense. I believe that my right hon. Friend the Prime Minister has answered a written question on that topic within the past few days.
    Ms. Richardson: Going back to the question of the EEC draft directive on part-time workers, does the Foreign Secretary accept that part-time women workers cannot wait much longer? Complex though the situation must be, the Government have had two years in which to consider the directive. How many more years will pass before women are granted equal rights?
    Sir Geoffrey Howe: I have already told the hon. Member for Peckham (Ms. Harman), who asked the question on this matter, of my understanding of the importance attached to it. As the hon. Member for Barking (Ms. Richardson) knows, this area of Community law involves complex drafting and legislation.

    Court of Auditors (Report)
    Mr. Tim Smithasked the Secretary of State for Foreign and Commonwealth Affairs when he expects to receive the report of the European Community Court of Auditors.
    Mr. Rifkind: The Court of Auditors' annual report for 1982 was published in the Official Journal on 31 December. Copies of the report, together with an explanatory memorandum by my hon. Friend the Economic Secretary, were deposited in the Library on 19 January.
    Mr. Smith: Has my hon. Friend had a chance to look at the Court of Auditors' comments about the previous year's recommendations and the failure of the Community to follow them up? Does my hon. Friend agree that there is not much point in producing a report of this size if the recommendations are not followed up? Will my hon. Friend try to ensure that proper systems of financial control are introduced into Community institutions?
    Mr. Rifkind: I agree with my hon. Friend that many of the recommendations of the Court of Auditors deserve strong support from the Council of Ministers and the Community as a whole. Responsibility for the report lies with the European Parliament. It is for it to decide whether sufficient action has been taken to justify discharge of the accounts.
    Mr. Spearing: Following the point made by the hon. Member for Beaconsfield (Mr. Smith), will the Minister answer a question which he did not answer in the debate on Monday night? If he is not satisfied with the Commission's response to the Court of Auditors. report, will he ensure that those matters are discussed properly at the relevant Council of Ministers meeting when the discharge certificate is considered?
    Mr. Rifkind: I emphasise that it is not the Council of Ministers that takes the decision on discharge. That is the responsibility of the European Parliament. However, if there are matters recommended by the Court of Auditors that we think require further consideration, we shall proceed along the way that we think is most likely to produce the desired result.

Ministerial Statements
Mr. Dennis Skinner(Bolsover) rose—
Dr. David Owen: On a point of order, Mr. Speaker.
Mr. Speaker: I shall take the points of order afterwards.
Dr. Owen: On a point of order, Mr. Speaker. Have you had a request from the Home Secretary to make a statement about the serious incident that has occurred on the picket line to the chairman of the National Coal Board, who was knocked down? A major incident appears to have taken place. In view of the fact that two statements are to be made, would it not be reasonable to ask the Leader of the House, who has now come into the Chamber, to arrange for the Home Secretary to make a statement to the House about that incident? I think that it is a matter of concern in all parts of the House.
Hon. Members: Hear, hear.
Mr. Speaker: Order. [Interruption.] Order. I normally take points of order immediately after statements, but as the matter has been raised I shall take the point of order now. I call Mr. Dennis Skinner. I gave the hon. Gentleman an opportunity. I shall deal with this point of order. I have not had such a request. The Leader of the House is here and no doubt he will have heard what has been said. There is only one statement today, and there is also a private notice question.
Later—
Mr. Skinner: On a point of order. You will recall, Mr. Speaker, that immediately after questions, you were right to intervene after the leader of the Social Democratic party had already sought to raise his point of order, because you knew, and the House knew, with the exception of the SDP leader, that points of order that do not arise immediately out of questions shall be taken later in the day. However inconvenient that may be to some hon. Members, that is the rule. I therefore take the opportunity to reinforce the point that you made, Mr. Speaker. I also draw to your attention the fact that if we manage, as the SDP leader suggested, to get the Home Secretary to talk about the incident up in Northumberland, we might also draw to the attention of the Home Secretary the fact that the mining communities will notice particularly that the SDP leader is more concerned about the boss of the Coal Board than he is about the 30 miners who have been killed in the course of the last 12 months.
Mr. Speaker: I am not sure that any of that had anything to do with me, but I thank the hon. Gentleman for his support.
Mr. Robert Maclennan: Further to that point of order, Mr. Speaker. Since my right hon. Friend the Member for Plymouth, Devonport (Dr. Owen) asked whether you had received notice that the Home Secretary would make a statement, I have been in touch with the right hon. and learned Gentleman's office to ask if it was aware of the position. As 20 minutes have elapsed, is the Leader of the House now in a position to meet the wishes of the House for an immediate statement about the mass picket that led to the striking down unconscious of the chairman of a nationalised industry? Surely that is a matter of the greatest importance to the House, and not simply for comment outside. The House should have an opportunity to hear what happened and comment on it.
The Lord Privy Seal and Leader of the House of Commons (Mr. John Biffen): Further to that point of order, Mr. Speaker. I shall, of course, report to my right hon. and learned Friend the Home Secretary the exchanges that have taken place upon a topic that I realise has prompted very real emotions.
Mr. Speaker: Ten-minute rule Bill.
Dr. Owen: On a point of order, Mr. Speaker.
Mr. Speaker: Dr. David Owen. [HON. MEMBERS: "No."] Order. I have called the right hon. Gentleman.
Dr. Owen: I am grateful to the Leader of the House for his remarks. I rise on a strict point of procedure. It is important that we should have some ruling from the chair about genuine points of order requesting a statement. If we had waited until after the statement by the Foreign Secretary, we should not have been able to give sufficient time for the Home Secretary to come to the House. When asking for an early statement in an emergency, I hope that you, Mr. Speaker, feel that it is in order for points of order to be raised immediately after Question Time.
Mr. Speaker: I note what the right hon. Gentleman says. I understand that the incident was reported on the news at lunch time, so there was time to send a message to the Home Office. Therefore, the matter need not have been raised immediately after Question Time.

Lorry Drivers (France)
3.31 pm
Mr. Richard Traceyasked the Secretary of State for Foreign and Commonwealth Affairs if he will outline what action the British Government are taking to alleviate the plight of British lorry drivers and other British motorists stranded in France as a result of the industrial action of the French lorry drivers.
The Minister of State, Foreign and Commonwealth Office. (Mr. Malcolm Rifkind): Consular assistance is being provided to those in need. Consular officials have been touring the main areas of disruption contacting groups they know to be stranded. They are providing cash, against the undertakings, where it is needed. Local inhabitants and French authorities have also been offering shelter and food. We have made our concern for the safety and welfare of British lorry drivers and other travellers very clear to the French Government in Paris and to the French ambassador here.
Mr. Tracey: I am grateful to my hon. Friend, as will be the relatives of the drivers. However, I ask my hon. Friend to make the strongest possible representations to the French Government and to convey the condemnation of the House of this unbelieveable action by French lorry drivers. Will my hon. Friend look into the possibilities of airlifting by helicopter the lorry drivers who may have been stuck in sub-zero, freezing conditions for nine or 10 days, and replacing them with other crews?
Mr. Rifkind: Action of the sort suggested by my hon. Friend has already been taken. Representations were made in Paris. My hon. Friend the Under-Secretary of State saw the French ambassador, when he expressed the great concern of Her Majesty's Government. With regard to assisting lorry drivers to leave the places where they are stranded, if there is any danger to them, action to resolve that problem will be taken by Her Majesty's Government. At the moment that is not the most serious problem. There have been individual cases of need for financial help, which is being provided, and assistance is being given with food supplies, but the vast majority of drivers wish to remain where they are so that they can look after their lorries.
Mr. Russell Johnston: The French Minister of Transport has made a request to insurance companies to reimburse drivers whose vehicles have been damaged in the riots. Is that obligatory? Will it extend to those who have suffered long delays? If not, is there any possibility of the United Kingdom Government providing financial assistance?
Mr. Rifkind: Her Majesty's Government will certainly not be liable, but the question of compensation was raised by my hon. Friend the Under-Secretary of State when he saw the French Ambassador yesterday. The Ambassador was unable to give my hon. Friend an immediate reply, but promised to look into that aspect of the matter.
Mr. John Farr: What is my hon. Friend doing about those small British exporting firms and hauliers which are in some financial difficulty? Will he look into the situation today as a matter of urgency, and consider what help the Government can provide?
Mr. Rifkind: The position of companies within the United Kingdom would not be a matter for the Foreign and Commonwealth Office, but I can assure my hon. Friend that I will draw his remarks to the attention of the relevant Secretary of State.
Mr. D. N. Campbell-Savours: Is the Minister of State aware that in the past one and a half hours I have been approached on behalf of British drivers at a routier at Chamonix in south-west France? They reported an incident yesterday when CRS French riot police drove a British driver out of his cab with the use of tear gas shells. He was taken into hospital last night in Chamonix and discharged himself this morning. Is this not a disgrace? Should not the Government make the strongest representations to the French authorities about this incident and gain an assurance that it will not happen again?
Mr. Rifkind: If such an incident has taken place in the way that the hon. Gentleman has described, clearly it is a most serious matter. I will ensure that the hon. Gentleman's claim is investigated.
Mr. George Foulkes: May I make it clear that the Opposition do not consider that the Government are acting with sufficient urgency on this matter? The picture painted by the Minister of State is entirely different from that given in the media. Can the Minister of State guarantee that all stranded British motorists and lorry drivers are being supplied with the necessary food and equipment, and that those who are in danger are being offered the opportunity of being airlifted out? If the Foreign Secretary can fly to Paris and back, surely we should look after our citizens in France?
Will the Minister give a clear assurance that we will demand compensation from the French Government for people who lose cargoes, suffer bankruptcy or may have extra costs as a result of this incident? Can the Minister give firm assurances rather than bland generalisations?
Mr. Rifkind: The hon. Gentleman has made his usual constructive and practical suggestions. He has told us that his claims are based on what he has seen in the media. As the most recent comments that I heard on the media were by the hon. Gentleman himself, making the same wild allegations based on no substantive evidence, he must allow me to have some doubts about the credibility of his case.
If the hon. Gentleman had listened to my earlier remarks, he would not have had to ask whether the British Government were making representations about compensation. I have already informed the House that that has been done. That shows the value of the hon. Gentleman's interest in these matters. I repeat that we already have consular assistance in the area and are ready and willing to provide any extra consular assistance necessary to ensure the lives and well-being of those concerned. These matters are treated very seriously indeed by our consular staff in Lyons and elsewhere.
Several Hon. Members rose—
Mr. Speaker: Order. I remind the House that a private notice question is an extension of Question time. There is a statement and a ten-minute Bill to follow. This is an Opposition day, and I remind the House that a large number of hon. Members wish to take part.

Foreign Affairs Council
3.38 pm
The Secretary of State for Foreign and Commonwealth Affairs (Sir Geoffrey Howe): With permission, Mr. Speaker, I will make a statement on the outcome of the Foreign Affairs Council held in Brussels on 20 and 21 February, at which I represented the United Kingdom and at which my right hon. Friend the Minister for Trade was also present. A co-operation council with Israel on 20 February and a ministerial conference with Spain on 21 February were also held in the margins of the Council.
The Council gave unanimous support to my proposal for a request for the Parliament's opinion on the 1983 refund regulations to be given in time for them to be considered at the next meeting of the Foreign Affairs Council on 12 and 13 March.
There was a follow-up discussion to the talks which had taken place over the weekend on preparation for the European Council next month. It was agreed that the Commission should now produce a document covering all those aspects of the negotiations not already being handled in other specialist Councils. The paper will therefore cover the central budgetary issues—budget imbalances and budget discipline—for discussion at the March European Council. Separate discussions between individual member states will of course continue in the meantime.
The Council agreed a substantive declaration on the agricultural transitional arrangements with Spain, which was presented to the Spaniards at the ministerial conference.
The Council reached agreement on the arrangements which will govern Greenland's relationship with the Community from 1 January 1985. There will be a treaty amendment linked to agreements on fisheries which balance the development of Greenland's own fisheries with the needs of the Community. The change in status is subject to ratification by member states in accordance with their constitutional procedures.
The Council had a first discussion, without taking any decisions, of the Commission's proposal to stabilise imports of certain cereal substitutes.
The Council agreed a declaration emphasising the Community's concern at the build-up of protectionist pressures in the United States. The Council also discussed the proposal for a new common commercial policy regulation. Work is to continue on the technical aspects of this.
The Council reviewed progress in negotiations to renew voluntary restraint agreements for steel imports from European Free Trade Association suppliers and Spain.
Mr. Robin Cook: On Monday, the Economic Secretary to the Treasury assured the House that Europe was at a crossroads. In the light of this afternoon's statement it would appear that the Foreign Affairs Council has parked heavy lorries over all the exits and left the Foreign Secretary boxed in.
The Foreign Secretary referred to the settlement with Greenland. He will be aware that that settlement provides for a payment for every man, woman and child in Greenland of £211 for every year for the next 10 years. As Greenland was plainly much more successful than Britain at obtaining progress at the Foreign Affairs Council
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meeting, will the Foreign Secretary consider approaching the diplomatic corps of Greenland and asking them to represent British interests at the Council's next meeting?
Will the Foreign Secretary confirm that it is true, as suggested in his statement, that the only progress that he can show on the payment of Britain's budget refund is the fact that a nice letter is to be sent to the European Parliament? As that Parliament decided only last week to block the rebate for another month, what possible progress does the Foreign Secretary hope to achieve on that matter?
While we are considering exchanges of letters, has the Foreign Secretary been informed that, on Monday, the House was told that it could not bear what was in the reply that he received concerning the £42 million for 1982 because he had taken the only copy of it to Brussels? Has he brought it back with him? If so, can the House hear what is in that reply? As the Common Market has now been in default on that payment since 31 December why does he not now start withholding in respect of that sum?
The Foreign Secretary referred to the curb on imports of cereal substitutes and said that no decision was taken. Will he tell us what view he expressed? Did he not oppose that measure, which will simultaneously mean higher prices for consumers and lower incomes for livestock farmers? If he did not oppose that measure, what credence does he expect the House to attach to his claim that he is determined to reform the common agricultural policy, since any reform must involve wider access to the cheaper markets of the world?
Can the Foreign Secretary name one concession that he has achieved from our partners since the Athens summit? If he cannot, will he bear in mind the fact that it will be the House which will have the last say about any increase in own resources? If he is unable to secure major concessions he cannot expect the House to rubber-stamp any surrender on that issue.
Sir Geoffrey Howe: The hon. Gentleman is more to be congratulated on his phraseology than on his insight.
Mr. Peter Snape: No one could say that about you.
Sir Geoffrey Howe: I need no reminding of the importance of securing an outcome to the negotiations which can be commended to the House on the basis that my right hon. Friend the Prime Minister and I have made clear many times. The arrangements in relation to Greenland, for example, lead to a reduction in payments to the Community and move into a different status.
On the 1983 refund, the steps that we are taking so far are those which can and should be taken at this stage to secure the refunds by the end of March. We have taken steps in relation to the European Parliament. In due course we shall need regulations and transfer to the line of the money now in the reserve chapter of the budget. We shall continue to press for action along those lines.
The status of the 1982 refunds is different. I have received a communication from the President of the Commission saying that the amount adopted—this is the central point—by the budget council was a political figure. It is therefore something to which we shall have to bring attention in the negotiations now taking place. The status of those refunds is quite different from that of the 1983 refunds about which we have also had questions.
As for cereal substitute imports, of course we have made it plain that the objective is a reduction in prices

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within the Community to bring them progressively closer to those prevailing in the rest of the world. That is the important feature. If it is possible in the negotiations to secure clear agreement on that, it would be foolish to reject out of hand the case for considering negotiations with the United States in the wider world context and indeed with other suppliers. I assure the hon. Gentleman that the negotiations are being conducted on the basis of the plain provisions outlined to the House on many occasions by my right hon. Friends and myself.
Mr. Bowen Wells: Did my right hon. and learned Friend raise in the foreign affairs forum the issue of the Luxembourg agreement and the continuation of the proceedings by means of a veto in the hands of each member country? If he did not raise that issue on this occasion, what attitude do the Government intend to take to it in future discussions?
Sir Geoffrey Howe: That question was not raised at the last Council meeting and there has been no change in our position.
Dr. David Owen: I strongly support the stance of the Foreign Secretary on the 1982 rebate and on the vital importance of achieving a key for the long-term financial contribution, but does he accept that there is a strong feeling in the European Community that Britain should express readiness to increase the social and regional funds, commit itself wholeheartedly to the ESPRIT technological investment and be prepared to see an overall increase in the Community budget? Does he agree that only in that context, linked with joining the European monetary system, can we obtain the financial key and rebate owed to this country by the rest of the Community?
Sir Geoffrey Howe: As the right hon. Gentleman will recall, we already belong to the European monetary system but not to the exchange rate mechanism of it; nor has there been any recent pressure for a change in that respect. We recognise the importance of the social and regional funds, but the scale of any increase must depend on various other matters. As the House knows, we rightly attach importance to the ESPRIT programme, but, again, in the context of proper negotiations and provision of financial resources.
Equally, provided that agreement is reached on the right arrangements for effective control of agricultural and other spending and on a fair budgetary mechanism which takes account of that important point, as we have said many times, we are prepared to consider the case which has to be made out for an increase in own resources.
Sir Anthony Meyer: Is my right hon. and learned Friend aware that the BBC and any other organ of public opinion which bothers to reproduce today's exchanges will doubtless describe him as being "at bay" and facing great difficulties from all parts of the House? Does he accept that, on the contrary, there is great support not just among Conservative Members for the very difficult hand that he is now trying to play?
Sir Geoffrey Howe: I am grateful to my hon. Friend. I should make one point clear. Throughout all the negotiations there is increasing agreement on many points among all or almost all member states. For example, the case being made for effective control of Community expenditure, with express provision for control of
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agricultural expenditure, is now almost universally accepted, with the formidable support of the French Government, who are now applying precisely the same principles in the control of their domestic expenditure as we have advocated in this country for many years. This is only one example of the many subjects on which there has been wide agreement. There is only one such subject in which we are, almost by definition, likely to find ourselves arguing a lone case, because it concerns our contribution, on which we are seeking to secure a proper adjustment of the budgetary measures. Over the widest part of the front, we have widespread support from our Community partners, and I am also conscious of the widespread support on both sides of the House.
Mr. Eric Deakins: How will it be possible to reach adequate and satisfactory agreement on new financial arrangments in the Community in the next couple of months when they depend crucially on two variables—the cost of the admission of Spain and Portugal to the Community, after the two months and not before, and a major restructuring of the common agricultural policy? Neither will happen in the next couple of months, so how can the Foreign Secretary be so sanguine about achieving progress in this matter?
Sir Geoffrey Howe: The hon. Gentleman is right—although he may not realise it—to draw attention to the extent to which all these meetings are interlinked. It is for that reason that they were brought together in the Stuttgart mandate and are now being considered at the same time. We shall not be able to secure a satisfectory conclusion, for example, on the budgetary burden problem unless we also secure, for example, proper agreement on the effective control of expenditure on agriculture. They must all be handled together.
Mr. Richard Body: I appreciate what my right hon. and learned Friend said about approaching agreement, but to what extent has there been any concession to our point of view since the summit in Athens?
Sir Geoffrey Howe: One can give a great deal of detail in answer to that. [HON MEMBERS: "It will be the first time."] First and most important is the extent to which the case for budgetary control in the Community is being accepted on the footing that finance must determine expenditure and not expenditure finance, and the universal recognition of applying that principle and doing so expressly to agricultural expenditure. As to the budgetary burden, there is increasingly wide agreement that: a budgetary mechanism taking account of Britain's special needs must be durable and must not involve the provision of special expenditure programmes such as the one with which we have been concerned over the past two years. There are many other problems on which advances have been made, and I am grateful for the support of my hon. Friend.
Mr. Dennis Skinner: Will the Foreign Secretary adopt the same tactics as those that the Secretary of State for the Environment has adopted towards local authorities by bringing in rate capping, and apply that to the Common Market if it runs out of money, in case it finishes up doing a Liverpool? Is this master of detail aware that one of the reasons why the Common Market is on the verge of backruptcy is that in 1982 the Court of

827
Auditors report showed that it managed to lose £700 million? There were olive groves that did not exist but were on paper only, the Mafia was running cheese processing plants in Italy and there was a holiday account of £180 per month for every one of the bureaucrats in the Common Market. Is it any wonder that it has run short of money and that the British people are saying that we are not prepared to bail it out by increasing value added tax and all the other fancy proposals that the right hon. and learned Gentleman is trying to put forward?
Sir Geoffrey Howe: I am always grateful for advice from the hon. Gentleman, who is the master of the need—
Mr. Skinner: They are all facts.
Sir Geoffrey Howe: —for budgetary discipline at home as well as abroad. The fact is that the present limit on the expenditure of the Community is itself a manifestation of a rate cap. There can be no increase in own resources unless the House of Commons, together with nine other Parliaments, is satisfied of that need. It is because of that that we are seeking at the same time the reforms that we want in another direction.
Mr. Nicholas Winterton: Is my right hon. and learned Friend aware that, despite what my hon. Friend the Member for Clywd, North-West (Sir A. Meyer) said, there is growing impatience not only in the House but throughout the country at the delay in this country receiving the refunds to which it is entitled? My right hon. and learned Friend has implied that the accession of Portugal and Spain will cost the European Community a great deal of money. Will he please come clean with the House, and with his colleagues in particular, and let us know where this extra money will come from? The decision to allow Spain and Portugal accession to the Community is not an economic one but a political one. Who will pay, and how will they pay?
Sir Geoffrey Howe: Once again I return to the fact that a range of questions must be considered together: first, a reduction in the rate of growth of costs in the Community and a control of expenditure, especially agricultural expenditure; and, secondly, the achievement of a mechanism to control the budgetary burden of Community states.
If all those things can be achieved, it should not be regarded as inadmissible to secure the accession of Spain and Portugal to the European democratic Community. Of course it is a political matter, but there is a legitimate political interest in securing a safe place for those democratic countries in the European democratic Community. The entire House should recognise that.
Mr. Nicholas Winterton: Who is going to pay?
Mr. Roland Boyes: Is the Foreign Secretary aware that on Monday evening the Economic Secretary to the Treasury said:
"The current arrangements between the Community's institutions for dealing with the Budget process are unsatisfactory."—[Official Report, 20 February 1984; Vol. 54, c. 576.]
He also said that the Foreign Secretary was discussing that very matter that day. As the Foreign Secretary is currently grovelling to the President of the European Parliament, and might even have to beg the European Parliament to
828
have a special meeting before we can get our rebate, did he discuss curbing the powers of the European Parliament so that it cannot take such action in future?
Sir Geoffrey Howe: The essential point is that the new machinery for the control of budgetary expenditure in the Community must involve putting in place a set of rules which apply to all the Community's institutions—the Commission, the Council of Ministers and the European Parliament. It is an essential feature of a change in Community procedures that we should have effective control of Community expenditure, especially agricultural expenditure.
Mr. Tim Rathbone: Is my right hon. and learned Friend aware that most Conservative Members will welcome his stance at the Council discussions? However, can he tell us about the specific benefits of his presence there, for the benefit of my constituents in Lewes and of those who live in constituencies not at present represented in the House, such as Chesterfield?
Sir Geoffrey Howe: I have no doubt that the benefits of our membership of the Community extend to all our constituents. They secure an effective distribution of resources in relation to agricultural policy, without which many parts of Britain would be seriously disadvantaged. They secure for Britain a much stronger position in international trading relationships, and give us a position in relation to affairs on the continent of Europe which, if we were to throw it away, we should sadly regret.
Mr. Tom Clarke: Does the right hon. and learned Gentleman recall the reference in his statement to the negotiations on steel imports involving EFTA and Spain? Will he assure the House that the interests of the British steel industry will be very much borne in mind, and that the Government will not present themselves with an excuse for closing any of the five major plants?
Sir Geoffrey Howe: As the hon. Gentleman suggests, the arrangements that have been made in the Community for voluntary restraint arrangements in EFTA countries and Spain are important. It must also be recognised that only as a result of measures adopted within the Community in face of the present worldwide surplus of steel capacity have we been able to limit the import penetration of our markets to the extent that we have in recent years.
Mr. Tony Marlow: When is the Community likely to run out of money? What is the burden of the Delors proposals? Given that my right hon. and learned Friend says that the only thing that is likely to require an increase in Community own resources is the accession of Spain and Portugal—apparently the status of the organisation has reached such a low ebb that people now have to be paid to join—why is it not possible to sort out the problems of the budget and those of the agricultural policy within existing own resources, and then at a later stage get on with the problems of Spain and Portugal?
Mr. Skinner: Let us give them £1,000 and get out.
Sir Geoffrey Howe: Negotiations on the accession of Spain and Portugal have been under way for seven years, and it would hardly be fruitful to seek to postpone them now for the reasons suggested by my hon. Friend. A case for an increase in Community own resources can be

829
advanced, first, in respect of enlargement to include Spain and Portugal; secondly, in the adoption of new policies; and, thirdly, in respect of the redistribution of budgetary burdens within the Community. The community was very close to the 1 per cent. VAT ceiling in 1983, and it is likely to reach the 1 per cent. ceiling during 1984.
That is why it is so important to secure adoption of effective measures for control of Community expenditure. It was to that question that the Delors proposals were specifically directed. The Delors proposals asserted in Community terms the principle that has been at the heart of our economic policy in this country, that finance must determine expenditure, and not expenditure finance. It is on the basis of that approach that we are now considering arrangements to that end.
Several Hon. Members rose—
Mr. Speaker: Order. I will call the two hon. Gentlemen who have been rising to ask their questions briefly.
Mr. Tam Dalyell: The Foreign Secretary said that the Council had reached financial arrangements with Greenland. What are the figures in his brief for the amount of money that will be given to Greenland over the next few years? I am not saying that it is wrong, but we are giving them quite a nice financial igloo, are we not?
Sir Geoffrey Howe: I am not quite sure from what posture the hon. Gentleman asks his question.
Mr. Skinner: Curiosity.
Sir Geoffrey Howe: The fact is that the Community has agreed to pay Greenland about £15 million a year to maintain the Community's existing quotas in Greenland's waters; that is about 100,000 tonnes of cod equivalent and is less than Greenland currently receives from the Community as a member, which is about £19 million a year.
Mr. John Farr: Is my right hon. and learned Friend sure that enlargement of the Community is necessary or desirable? Is he aware that there are many firms in Britain that, once Spain and Portugal join, will become bankrupt? Can he look at the present position of these firms and, if he is going to arrange a transitional period, make it as long as possible?
Sir Geoffrey Howe: I appreciate the importance of my hon. Friend's point about transitional periods. The period
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currently proposed for transition for agricultural matters is 10 years. All these matters have to be taken very closely into account. I return to the fact that this country and the European Community stand to gain real advantage from the secure accession of Spain and Portugal to the main stream of European democratic society.
Mr. Robin Cook: On the outstanding £42 million, does the Foreign Secretary recall that, when his letter of January was leaked to the press, it was claimed that he was seeking prompt repayment of the £42 million, not a legal opinion as to the standing of the £42 million? As he has now received a reply saying that this £42 million repayment is a political judgment, can we have an assurance that on 31 March we will not be told that he has received a further letter stating that the refund for 1983 is also a matter of political judgment, for political negotiation?
If the Foreign Secretary is determined to ensure that revenue determines expenditure rather than expenditure determining revenue, is not the best way of enforcing that objective to decline to approve an increase in own resources? If the Delors proposal adds up to a statement of principle only, what confidence can we have that, if we remove those financial constraints, the Community will not once again spiral merrily upwards in expenditure until it hits the next financial ceiling?
Sir Geoffrey Howe: On the first point, the hon. Gentleman is right to understand that the position of the 1983 refunds is distinct from that for the 1982 risk-sharing payment. We have made it quite clear that, if the Community does not meet its olbigations in respect of the 1983 refunds, we shall have to take steps to safeguard our position. I remind the hon. Gentleman, however, that in respect of the 1982 refunds we were in an exactly similar position, and those refunds were paid by the end of March 1983.
On the second point, the hon. Gentleman is also right to say that, if we were going to be content on the control of expenditure, and if we were going to be content on the important principle, which I am glad to see gaining ground on the Opposition Benches, that finance must determine expenditure and not expenditure finance, then we need something more than a declaration of principle. For that reason, we need precise procedures incorporated in the Community's budget procedures which are going to be effective. That is one of the strengths of the proposals that we are now considering.

Early-Day Motions
4.5 pm
Mr. Ian Lloyd: On a point of order, Mr. Speaker. You will be aware that, within the last few days, there has appeared on the Order Paper a series of early-day motions on the subject of the conditions of black South African mineworkers. These early-day motions fall into three categories. The first is based on the distinct and obvious premise that South African society has no redeeming features whatsoever, and that a policy of total condemnation is therefore justified. The second is based on a premise that these damaging, destructive and indefensible features of apartheid are on the way out, and that any support which can be given by Her Majesty's Government or others to that trend is therefore justifiable.
But there is a third category, which is entirely different.
Mr. Dennis Canavan: Abuse of the House.
Mr. Lloyd: It is a different kettle of stinking fish. The objective of the third category of early-day motion is to discredit the views of hon. Members by suggesting that they hold views which they do not hold. Secondly, it has as its distinct purpose the suggestion that the views or the judgment of an hon. Member can be bought or influenced simply because he has accepted a journey to a foreign country and has travelled around, as most hon. Members do on most occasions when they travel abroad to other countries. My point of order is that such motions are an unwarranted and grave abuse of the House.
Mr. Canavan: The hon. Gentleman is abusing the House.
Mr. Speaker: Order.
Mr. Lloyd: It makes the most scandalous allegations about an hon. Member and it is a breach of the tradition of courtesy and dignity in this place, which allows the widest possible diversion of interest and argument, without attacking the honour and integrity of individual Members. Is it possible for you in such circumstances, Mr. Speaker, to defend an hon. Member, and, indeed, to
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defend the tradition and dignity of the House, by ensuring that, when an early-day motion of this kind is tabled, the Table Office will at least refer it to you in the first instance so that any early-day motion attacking—
Mr. Canavan: Censorship.
Mr. Lloyd: —the opinions of an hon. Member is wholly acceptable, but that an early-day motion attacking his honour and integrity is not acceptable?
Mr. Speaker: I thank the hon. Member for having given me notice that he was going to raise this point of order. I have studied carefully the motion to which he refers. It contains strong criticisms of the hon. Member's alleged political views and conduct, but motions of this kind frequently appear on the Order Paper. However, this motion gives me the opportunity to remind the House—I am glad to have the opportunity—of the words in "Erskine May":
"Good temper and moderation are the characteristics of parliamentary language. Parliamentary language is never more desirable than when a Member is canvassing opinions and conduct of his opponents in debate."
I would therefore ask all hon. Members drafting motions to bear those wise words in mind.
Mr. James Lamond: On the same point of order, Mr. Speaker. While I accept the ruling and comments that you have made, Sir, would you care to extend that to include all citizens of this country who might be maligned in early-day motions—such as Monsignor Bruce Kent, who frequently comes under very strong personal attack in early-day motions?
Mr. Speaker: I confirm to the hon. Member that the words that I have quoted from "Erskine May" apply equally to those inside or outside the House.

BALLOT FOR NOTICES OF MOTIONS for FRIDAY 9 MARCH
Members successful in the ballot were:

Mr. Bill Walker.

Mr. Malcolm Thornton.

Mr. J. Enoch Powell.

Trade Union Membership Rights
4.13 pm
Mr. Dennis Canavan: I beg to move,
That leave be given to bring in a Bill to prevent employers from taking action against employees for being members of a trade union; and for connected purposes.
I declare an interest as I am the parliamentary adviser to the Civil Service Union, which has the largest membership at the Government communications headquarters in Cheltenham. Last month, the Secretary of State for Foreign and Commonwealth Affairs made a statement in the House designed to deprive employees at GCHQ of their right to join a trade union. If they refuse to accept the changes in their conditions of service, they will be offered a transfer; if they refuse to accept a transfer, they will be sacked without compensation. Although the Secretary of State did not admit that in his initial statement, he was forced to admit it later.
To try to sell that squalid deal to the workers at Cheltenham, the Foreign Secretary offered a bribe of £1,000 per trade union membership card. Yesterday, the Prime Minister told us that more than 50 per cent. of employees at Cheltenham had already accepted that offer. However, that is disputed by trade union representatives of the Civil Service. The general secretary of the Civil Service Union, Mr. John Sheldon, has rightly described the Government's bribe as Judas money.
The proposal came out of the blue. It was a unilateral decision and did not emerge from genuine consultation between the Government and the Civil Service trade unions. It appears that a decision was reached without consideration by the full Cabinet. The legality of the decision may also be questionable. On the face of it, it appears to be against the international labour convention. In evidence to the Select Committee on Employment, the TUC said that it had received advice to that effect from the International Confederation of Free Trade Unions. The Foreign Secretary has denied that. He insists that what he is doing is legal and in accord with international conventions. In view of the dubiety of that, further legislation should be brought forward to clarify the rights of all employees on trade union membership.
My Bill would outlaw the sort of conduct of which the Foreign Secretary has been guilty. If any hon. Members are worried about the implications for national security, I can tell them that my Bill would not preclude the possibility of special arrangements for national security and security staff, but without using the draconian resort of bribing staff to give up their trade union membership. Indeed, I understand that the trade unions at Cheltenham have offered some concessions. Unfortunately, there has been no positive response from this intransigent Government. I hope that, when the Prime Minister meets the trade unions again tomorrow, she will reconsider the matter.
Some elements in the Government and the Conservative party are obsessed with the idea that trade union membership per se is a potential security risk. That is a gross insult to the trade union movement and its members, especially those at Cheltenham. It is also a gross insult to millions of trade union members, past and present, throughout the country who have given and are giving loyal and dedicated service to their country. Many of them have lived for their country, given service to their
834
country and, in some instances, died for their country. The trade union movement grossly resents any implication that trade union membership presents a security risk. if the Government are really hellbent on looking for spies, traitors and disloyal people, they should bear in mind recent history and look at what has come out of the public schools and the Cambridge union, rather than any trade union.
My Bill is designed to deal not only with the position at Cheltenham. It would prohibit any employer in the public or private sectors from taking action to reduce the rights of an employee simply because that employee happens to be a member of a trade union. It is important that the Bill is so comprehensive, because many trade unionists see the action being taken by the Government at Cheltenham as the thin end of the wedge.
Tomorrow, for example, many hundreds of Civil Service trade unionists will be coming from all over the country to lobby Parliament. Unfortunately, it appears that the Government have prohibited trade unionists from GCHQ from joining in that lobby. They will be coming primarily in support of, and showing solidarity for, their trade union colleagues at Cheltenham. However, many of them are also concerned for their own situation. If the Cheltenham battle is lost, who will be next in line for deprivation of trade union membership? There is fear that it might not be confined to the Civil Service. There are many people employed in other essential services—for example, in the National Health Service, often working in a life or death situation, many of them good and responsible trade unionists—who may be worrying lest they are next in line for a change in legislation that might deprive them of their trade union membership rights. There are some ruthless employers in the private sector who would grab at any opportunity to deprive a whole work force of the opportunity of joining, or retaining membership of, a trade union.
Since the Tories took office in 1979 we have seen a whole series of attacks on the trade union movement. We have witnessed anti-trade union legislation designed to weaken the power of the movement to do what has historically been its role and duty to do, which is to look after the interests of its members. Apart from legislative measures, we have seen the deliberate use of mass unemployment to try to break the back of the trade union movement. We have also seen attempts, made through the media, to try to manipulate public opinion and to Instill in people's minds the belief that the trade union movement—or certain elements of it—is anti-social, antidemocratic and even subversive.
The latest action by the Government is designed to deprive some workers of their rights to join a trade union. The Government have denied that that has anything to do with pressure from the United States, but it is important to remember that our foreign and defence policy is much influenced, and in some cases dictated, by an American president who, not long ago, was responsible for having trade union members literally in chains. That occurred during the air traffic controllers' dispute in the United States.
We have a British Prime Minister who claims to be a champion and defender of freedom. She is on record as saying that she believes in a free trade union movement in eastern Europe. Many of my hon. Friends and are on record as believing in the right of a free trade union movement in eastern Europe, and in particular standing up

835
in defence of the Solidarity trade union in Poland. But we will not follow the bad example of the Prime Minister in having double standards in this regard. We believe in a free trade union movement in Britain as well, and that means people having the freedom to join a union and to retain their membership of it, irrespective of pressures from any employer, be it a private or public sector employer.
I appeal to all who believe in genuine freedom, in a genuinely free trade union movement and in people having the freedom to join and retain their membership of a free trade union to support me in this Bill.
Question put and agreed to.
Bill ordered to be brought in by Mr. Dennis Canavan, Mr. Gordon Brown, Mr. Eddie Loyden, Mr. Robert Parry, Mr. Ernie Ross, Mr. Robert Litherland, Mr. Doug Hoyle, Mr. Brian Sedgemore, Mr. Robert Kilroy-Silk, Mr. Dennis Skinner, Mr. John Maxton and Mr. Tom Clarke.

Trade Union Membership Rights
  TRADE UNION MEMBERSHIP RIGHTS
  Mr. Dennis Canavan accordingly presented a Bill to prevent employers from taking action against employees for being members of a trade union; and for connected purposes: And the same was read the First time; and ordered to be read a Second time upon Friday 16 March and to be printed. [Bill 107.]

Youth Unemployment
OPPOSITION DAY [10TH ALLOTTED DAY]
4.26 pm
Mr. John Smith: I beg to move,
That this House condemns the Government's failure to tackle high and long term unemployment among young people which has resulted, as at January 1984, in 1,259,743 young people under the age of 25 years being unemployed, of whom 347,110 have been unemployed for more than one year; and calls upon Her Majesty's Government to introduce a comprehensive and high quality training scheme for 16 to 19-year-olds.
Mr. Speaker: Order. This the first of two important Opposition motions. I remind the House that a large number of hon. Members wish to take part in the debate. I should also announce that I have selected the amendment standing in the name of the Prime Minister.
Mr. Smith: The fact that 1·75 million young people under 25 are unemployed is a national scandal. That nearly 350,000 of them have been unemployed for more than a year shows that the crisis is deep-seated as well as urgent. It seems that there is little prospect of a significant reduction in the figures in the near future.
We debate youth unemployment today because it is a crisis of national importance. Our young people are bearing the brunt of the Government's deflationary policies, which have caused unemployment to rise nonstop each year for the last four years. They are in danger of becoming a forgotten generation—denied the dignity of work, deprived of the training for skills, depressed by poverty and denuded of aspiration. We see them in all parts of the nation, but particularly in the hard-pressed industrial areas, kicking their heels disconsolately as one weary day of unemployment and lost opportunity follows another. If they are not so engaged, they are among the thousands of applicants for a handful of jobs when any enterprise advertises vacancies.
Any manager in the engineering industry will say that if he looks, for example, for the recruitment of 10 new apprentices —and they are a fast-disappearing phenomenon—he will receive hundreds of applications from youngsters bursting for opportunity, and well able to take advantage of it. With a heavy heart, he will have to turn away hundreds of ambitious and keen youngsters, and he and they will wonder—and so should we—what kind of society it is in which such things are permitted. Even for low-paid jobs with little by way of future opportunity, there are patient queues of the young unemployed.
I will not dwell—I have no doubt that other hon. Members will—on the social consequences of mass unemployment among young people; on the effect on family life; on individual character; and on the very social fabric of the community. It is enough to assert that the lost opportunities of this forgotten generation must have a major claim not only on the attention of the nation but on its resources and its concept of moral responsibility, for we reject utterly any proposition that states that youth unemployment on this scale is either tolerable or inevitable.
When we get high unemployment in general, as regrettably we do, we usually get disproportionately high youth unemployment in its train. Young people are often on the fringe of the labour market and are therefore the first to suffer. The first task in getting young people back to

837
work is to tackle unemployment in general for everyone. It is not enough to introduce palliative work substitute schemes when the real answer lies in a change of economic policies which will seek to create, rather than to destroy, jobs for everyone in the country.
There is an almost endless list of what a caring, intelligent and purposeful Government could do by way of tackling this problem. We should be tackling it by seeking to fulfil the many unmet needs by the use of our unused resources, the greatest of which is the army of unemployed in our midst. The modernisation, replacement and expansion of our housing stock, the modernisation of our transport system, including electrification of the railways, the expansion of caring services for the sick, the elderly, the disabled and the disadvantaged and the renewal and rebuilding of our declining urban centres are only a few of the tasks that could form the basis of an imaginative public works programme which would put thousands of our young people back to work within a few years, if not within a few months.
Let us not hear from Conservative Members that we cannot afford such a programme. I remind them that since 1979 the Government have received over £25,000 million in North sea oil and gas revenues. That is the equivalent for the nation of a monster pools win for an individual. The Government did not work for this money and they did not even plan for it; they inherited it. What did they do and what do they do with the inheritance, which is still running at £9 billion each year? They spend it all, every penny piece of it, on paying for the cost of the extra unemployment that their policies have created since 1979. They continue relentlessly, year in, year out, to use our North sea oil revenues to pay a subsistence to our standing army of unemployed.
It is no wonder that the extent of North sea oil revenues is the best kept secret in No. 10 Downing street. To know the facts is to be prompted to ask, "What have we done with it all?" I was for a short time a Minister with some responsibility in a Labour Government for North sea oil and gas policies. It was known then that there would be substantial revenues after 1980.
I thought that an interesting debate would develop between the Left and the Right. I thought that the Left would in general say that we should use the revenue for community-based expenditure on rebuilding our social structure, developing regional policies and the straight financing of industry. I thought that the Right would argue for tax-cutting policies and a series of individual choice-based decisions rather than community choice-based decisions. That is part of the legitimate argument that has been taking place for many years between the Left and the Right.
I never thought—I do not think that anyone else did—that we would take neither of those courses. I do not think that it would have crossed anyone's mind during the time when the Labour Government were in office that we would pay the cost of unemployment, which was then uncreated but which would come, with our North sea oil revenues.
Britain has had unprecedented assets that have not been enjoyed by our competitors in western Europe. The tremendous asset of North sea oil revenues has been an advantage to our balance of trade and our balance of payments as well as to our straight cash resources, although straight cash is available in abundance.
838
At the same time as we have had these advantages—the Government have been lucky to have had them—we have seen an unprecedented collapse in manufacturing industry and the creation of an army of unemployed, many of its members being young people.
What do the Government offer our young people? They say that recovery is on the way. I think that we have been told that the upturn is round the corner during every quarter of every year since the Government were elected in 1979. We were told that again today and we were told it yesterday, and the message is in the amendment to the motion. We are told that there will be an increase in economic activity. If there is, we shall know that it is the result of the pre-election relaxation of financial controls—a Keynesian tactic in which the Government indulged shortly before the 1983 election.
Even if there is an increase in economic activity, it is not likely to lead to jobs. We know that the Treasury told the Government Actuary earlier in the year to bank on there being no reduction in unemployment throughout 1984. As far as I know, those instructions have not been changed, and I shall take the Treasury's word that there will be no reduction in unemployment in 1984. The depressing reality is that there is not likely to be any drop in unemployment—certainly not down to pre-1979 levels, or anywhere near them—throughout the future life of this Administration and Parliament.
The Government have tried to deal with the problem by rolling into place a number of youth training and youth work schemes. Two major elements, apart from the community programme, which is not really training based, are the youth training scheme and the young workers' scheme. In the Opposition's opinion, these schemes are an insufficient response to a major crisis. They are being adopted for the wrong motives and purposes. The Government's main aim in promoting the youth training scheme is to reduce unemployment figures for young people and to give them something to do for a year. Another purpose, which is being more and more revealed as the days pass, is to keep wages down for those who are in employment. That is why the YTS allowance has remained at £25 a week despite the Manpower Services Commission's recommendation that it should be regularly reviewed, and despite increases in the cost of living which would require another £10 weekly to be added to the £25 to maintain the value of the allowance.
That is why we have in the young workers' scheme the remarkable prospect of the Government subsidising employers to keep down the level of wages. Some employers are breaking the wages councils' legislation to qualify for the subsidy that another part of the Department of Employment hands out. We have policemen at one corner who are failing to catch criminals, and the same criminals are coining back to the police authority to ask for a subsidy for their criminal activities. That is an interesting example and reflection of what is going on.
In having 1·25 million unemployed young people we are in danger of creating a secondary labour market of young people that is made up of low skills, low wages and low aspirations. Instead, we need what the motion proposes—
"a comprehensive and high quality training scheme for 16 to 19-year-olds."
It should be based on training for at least two years—preferably three years—so that real and lasting skills are learnt. It should complement our further and higher

839
education system so that those in education and training receive fair treatment. The education maintenance allowances that the Labour party proposes would be an essential element in the scheme.
We need proper support for apprenticeships in industry so that there is real training for real jobs. Regrettably, we have seen apprenticeships almost disappear from the industrial landscape. We must so organise the programme that we encourage the acquisition of skills that are useful to work and to relevant industries and ensure that the training extends and develops the intellectual perceptions and horizons of young people within their own lives and personalities.
All this we could have if we had a Government who cared, but we do not. For their callous, complacent and disinterested neglect of our young people, we utterly condemn them.
4.39 pm
The Secretary of State for Employment (Mr. Tom King): I beg to move, to leave out from "House" to the end of the Question and to add instead thereof:
"believes that the most important way in which the problems of the young unemployed can be overcome will be by a general improvement in the economy; therefore welcomes the encouraging signs of economic recovery; and recognises that the employment prospects of the younger generation will be greatly enhanced by the Government's considerable range of special employment and training measures."
I welcome the opportunity that is presented by this debate. It will direct our attention to what by any standard is one of the most serious problems that faces us.
I was interested to speculate on the way in which the Opposition would approach the problem. Would they treat it as a political point-scoring exercise or would we have a serious discussion of a major problem? I leave it to right hon. and hon. Members to form their own judgment on the way in which the right hon. and learned Member for Monklands, East (Mr. Smith) sought to deal with the problem by means of, for someone of his capability, a frivolous and party political contribution. His speech reflected no credit on him, especially as it was directed to such a serious subject.
We owe it to our young people—they are the children of many of our constituents and the are facing the tragic problems of unemployment—to approach these issues in a much more serious and sensible manner. A certain sense of humility would have become the right hon. and learned Gentleman in moving the motion. It is a fact that we face the same appallingly difficult problems of unemployment as are faced by a Christian Democratic Government in Germany, a Liberal Government in Holland and a Socialist Government in France, where the Socialist President has just forecast the loss of a further half million jobs in shipbuilding, steel and car manufacturing. It is political twaddle to pretend that unemployment is uniquely the problem of a Conservative Government, and the people of this country do not believe it. The right hon. and learned Gentleman owes it to the House to approach this matter more seriously. A certain sense of humility would have become a Labour spokesman when each Labour Government have promised to reduce unemployment, and no Labour Government have succeeded.
840
The right hon. and learned Gentleman said that there was an endless list of examples of what an intelligent, caring and creative Government would do to tackle the problems of unemployment. He was a member of a Cabinet that doubled unemployment, so we know what fallacious humbug that is.
Mr. John Smith: I am grateful to the right hon. Gentleman for giving me an excellent example of nonparty political speech making. Before he proceeds further along that line, will he explain why unemployment as a whole was less under the Labour Government than it is now for young people under the Tory Government? There was no understanding of international comparisons then, although I am expected to exhibit that now.
Mr. King: I shall analyse the background to the problem facing this country. We owe it to the people, including the young, to look at this more seriously. The period 1955 to 1980 spans Governments of both political parties. In that period, our share of world trade halved from 20 per cent. to 10 per cent. It is sobering to think that in 1955 Britain was the largest car exporting nation in the world and by 1980 we were an also-ran. Our competitiveness deteriorated across industry—shipbuilding, steel and the other major industry to which I referred. In the 1970s, output increased by 17 per cent., wages increased—it is unhappy to remember this—by 350 per cent. and our competitiveness collapsed. When the world recession hit us with its full ferocity, Britain was overmanned, undertrained, unprofitable, underinvested and uncompetitive, and we paid a heavy price.
The key question is whether we have learnt the lessons of that period and are starting to lead the recovery. There is no way in which a state can provide all the jobs for its people. The only way we can provide proper employment for our people, including young people, is with a prosperous and successful economy. That is the first criterion. The right hon. and learned Member for Monklands, East spelt out—I do not wish to embarrass the right hon. and learned Gentleman after his unfortunate experience last week in disowning the words of his colleague, the former Chancellor of the Exchequer, the right hon. Member for Leeds, East (Mr. Healey)—that the first prerequisite for tackling unemployment was a successful economy. We stand heavily on that important first requirement and look at the progress we have made and the prospects for the economy. The right hon. and learned Gentleman said that he had heard it all before, that there is not really any recovery, and that those are the same old words Government spokesmen always give and we have heard over the years.
Our first objective is to get inflation down. We remember the disastrous peak in 1975 when it was as high as 27 per cent. Inflation is now down to 5 per cent. [Interruption.] I would not attempt to misrepresent the figures. If the inflation rate for the past six months is extrapolated for 12 months—I am telling the House the basis on which I calculate—inflation is running at 3·5 per cent. It is worth looking at that figure. In the past six months, inflation has been 1·8 per cent. We see a prospect that we have not seen in recent years. Outside forecasters, whether the EEC or the OECD, have said that in 1983 the United Kingdom had the fastest growth in GDP of all the European countries and is forecast to have the fastest growth in GDP in 1984.
Mr. Robert Kilroy-Silk rose—
Mr. King: I just wish to clarify this point. Short-time working is at a much lower level, overtime is at a high level and, for the first time since 1979, the number of people in employment increased in the third quarter 1983. We are starting to see a more encouraging picture.
"The Government continues to regard the mastery of inflation as the pre-condition for success in returning to full employment."
I say to those who disagree with me that that was said in a 1977 White Paper published by the Labour Government. We agree with that 100 per cent., and the only difference is that we have achieved that aim. That gives us the best possible prospect for an improvement in employment.
Mr. Kilroy-Silk: While the right hon. Gentleman is talking about the encouraging news and being specific in attempting to forecast, will he tell me when the 46 men and 30 women in Kirkby in my constituency, who left school in the year in which this Government came into office and who have never had a full-time job, will—on his forecast, encouragement and optimism—get a job?
Mr. King: The hon. Gentleman knows that it is as difficult to answer his question as it is to answer it for the people in my constituency, in the other constituencies in this country, the constituencies of French Ministers in the Socialist Government and the constituencies in America that face that problem. The only hope for employment—the hon. Gentleman knows this—is expansion and a prosperous economy. That is the first requirement, and that is why there is a significant improvement in the number of young people getting into employment. One of the reasons, as the hon. Gentleman will know, that there is a shortfall this year on the youth training scheme is that a higher number of school leavers than forecast have obtained jobs and gone into direct employment. It would be dishonest, at the Dispatch Box, to give a direct answer and to predict, because I cannot do so. The prospects depend on a number of factors. I am in no doubt that the prospects for those young people to whom the hon. Member for Knowsley, North (Mr. Kilroy-Silk) referred are now better this year than at any time in the past three years, and I take some comfort from that.
While there is an improvement and the position in the economy is encouraging, we know that the key problem is employment, not investment, which is improving, not exports, which are doing well, and not profits, which are improving and which are a vital ingredient in investment.
Mr. Paddy Ashdown rose—
Mr. King: I shall just deal with this point. The key requirement for employment is that we have the people with the training and skills necessary to take the new jobs that will be available in the upturn.
Mr. Dave Nellist rose—
Mr. King: I have inherited responsibility for the new training initiative and have recently published the White Paper "Training for Jobs". The Opposition motion deals with the problems of the young unemployed.
Mr. Ashdown: I wanted to catch the right hon. Gentleman before he moved away from statistics. I waited until he had spoken about unemployment as well as inflation. If the Government's record is so good, why is it that when the Government came to power in 1979 we had, measured against OECD countries, about average
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inflation and unemployment, but we now have well above average unemployment and round about average inflation, as I understand it?
Mr. King: I deliberately condensed the points that I was making about overmanned, uncompetitive, under-invested and under-productive industry. I remember a book written about 20 years ago about the 2 million under-employed. We were singularly ill-placed, and w hen the recession came it caught us out in a big way. I will not debate this point at great length. The hon. Member, who studies these matters seriously, knows that that was the problem we then faced.
I took exception to one thing that the right hon. and learned Member for Monklands, East said. He may have spotted my concern when he said that the main purpose of the youth training scheme was to keep unemployment figures down and give young people something to do. That is a most disgraceful comment coming from an Opposition Front Bench spokesman. It is pandering to the worst elements on the Left wing of his party who are determined to maintain their hostility to the scheme. I believe that he is far too intelligent to share that view.
I pay tribute to the work and leadership of the trade union movement and the TUC in the development and encouragement of the youth training scheme. It does them great credit. It does the right hon. and learned Gentleman no credit to lend the Labour party's official name to denigrating that scheme. The co-operation of employers, trade unions, employees, management, the MSC and the trainees is most encouraging in the development of what I believe will probably be recognised as a most important scheme for the future. It will increasingly be the way in which young people come into jobs with some training which, all too often in the past, they did not have.
Mr. John Smith: The Secretary of State accused me of something of which I have not been accused before—pandering to some Left wing fantasy. May I quote to him an editorial in The Times of 2 September 1983:
"The crude political impulse behind this"—
that is the YTS scheme—
"is maintaining social peace. YTS is an anti-riot device keeping 16 year olds off the unemployment record and off the streets."
As The Times said that, why is it some terrible fantasy of mine?
Mr. King: It is a disgraceful editorial. It is quite untrue. I urge whichever leader writer it was on The Times to see for himself some of what is going on on the youth training scheme. I hope that that will not be the Opposition's view of this matter. It would be sad if the Opposition were to resile from a scheme in which about 300,000 youngsters would have been involved, and which gives, for the first time, an opportunity for training. I hope that the right hon. and learned Gentleman and his hon. Friend the Member for Huddersfield (Mr. Sheerman), when he replies, will respond rather more positively and enthusiastically to the scheme. The right hon. and learned Gentleman might have had the generousity to respond in the way that Shirley Williams did. At least she gave my predecessor in this position
"due credit for being the first Minister of any Government to introduce a scheme to provide unemployed 16-year-olds with what we hope will be effective training. It would be less than generous not to admit that the right hon. Gentleman has had more success with his Cabinet colleagues than I had with mine."—[Official Report, 21 June 1982; Vol 26, c. 82.]

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Dare I ask: was the right hon. and learned Gentleman one of those Cabinet colleagues who was not prepared to back a training scheme for unemployed 16-year-olds and who then has the nerve to come to the House and rubbish the Government who are now spending £700 million of public money on giving youngsters a proper job?
Dr. Brian Mawhinney: Given the attitude of the right hon. and learned Member for Monklands, East (Mr. Smith), will my right hon. Friend give him the opportunity to commit the Labour party to doing away with the scheme in the unlikely event that it ever gets back to power?
Mr. King: I do not want to embarrass the right hon. and learned Member for Monklands, East any further. It is far too serious a matter. I hope that we shall receive general support for the scheme.
I have already had the opportunity to visit a considerable number of schemes. I have been enormously impressed by the youngsters' attitude and enthusiasm. It is appalling if the right hon. and learned Gentleman pursues his attitude. I hope that on reflection he will not.
Mr. Nellist: As the Minister is reluctant to accept the quotations given by my right hon. and learned Friend the Member for Monklands, East (Mr. Smith) about the purpose of the youth training scheme, and the views of The Times editorial, will he give his reaction to Sir John Hoskyns' paper, which was produced when he was head of the No. 10 policy unit? He said that the training programmes set up by the Conservative Government should be designed to increase the differential between young people's and adult's wages. If the right hon. Gentleman does not like The Times' Left wing views or the Left wing Labour Front Bench, does he no longer like the Left-wing No. 10?
Mr. King: I have not been in much doubt about the hon. Member's views. What shocked me was to find the right hon. and learned Gentleman spouting them from the Opposition Front Bench. I know the damage that the hon. Member for Coventry, South-East (Mr. Nellist) has sought to do to the youth training scheme for his own political interests.
The point that Sir John Hoskyns makes in his article is serious because there is a problem about the level of wages of young people first coming into jobs. It is interesting to note that under the Social Democratic Government in West Germany the starting wage for someone there is about 25 per cent. of the full adult wage. Although the Opposition will perhaps seek to maintain that our youth unemployment is much worse, it is significant to note that about the only country whose youth unemployment is significantly below ours is West Germany. It has a much lower starting wage relative to the full adult rate. Wage levels in this country have undoubtedly not helped young people.
For that reason, we have introduced the young workers scheme. I hope the House will support this, but as I am anxious to encourage training for 16-year-olds I have therefore closed the young workers scheme to them. It will now be for 17-year-olds. That will make it possible to dovetail it with the youth training scheme, so that they can move from that scheme to a real job on the young workers scheme.
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It would be wrong for the House to ignore what is contained in our adult training strategy, because the problem to which the right hon. and learned Gentleman referred—one about which some of us feel most keenly—involves those people who were too old for the youth training scheme and who at age 20, 22 or 24 now face the problem of unemployment. They have never worked—the point made by the hon. Member for Knowsley, North—and have no training.
The Opposition motion refers to the problem of unemployment but then talks about the introduction of a training scheme for 16 to 19-year-olds. It does not refer to any measure for the older group. Many hon. Members will feel that that is a serious problem. It is one to which we have paid particular attention in the adult training strategy, which is why we have doubled the annual provision to 250,000 adults whom we can train, and thus give an opportunity to make youngsters who have never worked fit for work. I shall be particularly interested in that aspect of the problem because it is worrying and one to which we must pay attention.
I recognise the importance of the steps taken, and the introduction of special employment measures and the community programme. More than half of those working on that programme are under 25 years old. We must ensure that that age group will not be excluded or prevented from taking up the job opportunities coming with the improvement in the economy because of a lack of adequate training.
I know that this is a short debate and that many right hon. and hon. Members wish to speak, so I shall be brief. I sought to set out the two key ingredients of the amendment. First, the prerequisite for improved employment opportunities must be a strengthening of the economy, of which there have been very encouraging signs. It is too soon to say whether that recovery and strengthening of the economy will lead to a real improvement in unemployment. However, as I told the House yesterday, I hope that that will take place. I am determined to see that, as the economy improves, training appropriate to the needs of that economy will be available. At the same time, we shall do all we can to help those facing the difficulties of unemployment.
We should not embark on the Opposition's extraordinary proposals, which are put forward without proper costing, as that will lead to an explosion in public expenditure in areas suggested in the speech of the right hon. and learned Member for Monkland, East. If that were done, it would lead directly to the old cycle of higher inflation and interest rates, and to a downturn in the economy and a disappoining performance by industry. We should be back with the conditions that led to the remorseless rise in unemployment suffered in the 1970s, and in the recent recession. The course that we have charted is the best hope for the British people. It is a heavy responsibility because employment is the area of greatest difficulty that we face. We shall stick to our policies to ensure that the economy improves, and that employment opportunities improve with it.
5.6 pm
Mr. John Golding: Insensitive, inadequate, incompetent—those words sum up the performance of the Department of Employment these days. It is insensitive because Ministers have slipped

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into apathy in the face of the massive problem of unemployment among those under 25 years old, and the unhappiness and frustration that that creates.
It is appalling that almost three in 10, or 27·2 per cent., of our 18 to 19-year-olds are unemployed. More than two in 10 of our 19 to 24-year-olds are unemployed. That is a national disgrace. Yet Ministers sit there like dum-dums, doing next to nothing about it. We cannot underline the figure often enough: 1,209,443 young people under the age of 25 are drawing benefits because we cannot provide them with work and wages. It is a crime that 329,685 of those young people have been out of work for more than 12 months, and a personal tragedy for them and their families. It would be insensitive not to be distressed about that enormous problem, but the Government's response has been totally inadequate.
My complaint against the Government is not about the youth training scheme, as I strongly support it, but about the fact that it does not go far enough. The Government have concentrated so much on provision for 16-year-olds and school leavers that they have virtually washed their hands of responsibility for young adults.
The problem of unemployment for 18 to 24-year-olds is massive, with more than 1 million of them out of work. Provision for them is almost non-existent, as was the Secretary of State's explanation. For the unemployed over 18, of whom there are well over 1 million, only 130,000 community programme places are available, even after the scheme's expansion. The vast bulk of 18 to 24-year-olds have been written off by the Government.
There has been an enormous impact on personality and attitudes among the young. The normal patterns of work and of saving to get married have been upset. I am concerned about the problems faced by youngsters saving up to get married, and about the whole impact of unemployment on family life.
Young unemployed people living at home receive only £24·55 per week in benefits. After April, the Government will take £3·10 away from them as a result of the proposed housing benefit reduction. Those young people will get £21·45 per week. It is appalling that the housing benefit cuts will hit that age group. A single householder aged 18 or 19 receives £26·80 per week and an allowance for rent and rates. A boarder gets board and lodging payments, and a meals allowance, totalling £8·85 per week.
How does the Secretary of State—I have asked his predecessors the same question—expect young adults of 18 to 24 to save up and get married on that sort of money? What a start to family life. The last time that I asked one of his right hon. Friends that question, he replied that young people in that position should not get married.
It is an increasingly important problem. We are dealing with 1 million of our fellow citizens, who are living on a pittance and are unable to save. Even the hon. Member for Derbyshire, West (Mr. Parris) could not get through the week with enough money to put in the gas meter, never mind saving to get married.
The Government's response to the problems of this age group is as inadequate as it is insensitive. It is not that the Government do not have enough money to help those youngsters, as the Government are wasting money in the most incompetent manner on the job-splitting scheme and the young workers wage subsidy scheme, which are fine examples of waste and gross incompetence. Both those schemes were defective when introduced, and should have been killed off long ago.
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On the job-splitting scheme, the House was told on 17 November 1982 of an estimate of 62,500 jobs being split by 31 March 1984, of which 50,000 would be split by 31 December 1983. That was for last year. The figure for 1983 was 734, after an estimate of 50,000. What a flop. What a waste of money. As much as £338,500, was spent on advertising the scheme. Perhaps the Minister will tell me, taking into account the money spent on advertising, the cost of providing each job under the scheme. Only 706 jobs have been created for the 1,200,000 young adults who are unemployed. It does not bear examination. However, I hope very much that the Select Committee on Employment will consider the scheme in detail.
The Government are dogged by dogma. They should have scrapped the job-splitting scheme before now or introduced radical alternatives to make it work. Instead, they have extended the principle to the job release scheme. I am prejudiced. I introduced the job release scheme and am proud to have done so. It was a good scheme because it allowed those who had worked hard all their lives to retire and give their jobs to the young unemployed. It was an inexpensive scheme, relative to other schemes.
However, the Government have now stopped early retirement at 62 and 63 and have put the age for job release back to 64, which is a disgrace. The people believe that to be a disgrace. To make it more palatable, the Government took a flop, the job-splitting scheme, which has not cost them much money because nobody wants it, and said that they would insert job splitting into the job release scheme. At 10 February only 26 people were receiving the part-time job release scheme allowance. Can the Secretary of State tell me that it is worth keeping countless civil servants working on the scheme? It is a Civil Service job creation scheme. It is incompetent to run schemes in which only 26 people are involved.
The young workers scheme is totally inefficient. Under the scheme, where earnings are below £42 a week, the employer gets a subsidy of £15, and where earnings are below £47 a week, the employer gets £7·50. It is a ridiculous subsidy system because it pays employers to employ youngsters whom they would have employed, even without the subsidy. Labour tried a recruitment subsidy for school leavers, but we quickly scrapped it. I was involved in the scrapping. Experience told us that we were paying employers to take on youngsters with eight or nine O-levels whom they did not need to pay, and whom they would recruit and employ anyway. What is the point in the Government saying to an employer that if he employs a Queen's scout or somebody with a Duke of Edinburgh award, who has 10 O-levels, they will pay the employer £15 a week? If subsidies are being paid they should go towards ensuring that youngsters are employed who otherwise would not be employed.
I shall go back not to the 1982 survey, which was unfavourable to the Government, but to a recent parliamentary answer. I understand that four fifths of the jobs for which an allowance is paid are not dependent on that allowance. My arithmetic may be wrong, but I have calculated that at present it costs the Government £1,435 a year for each job with wages of £42 per week. That does not make sense. It is not economic sense. [Interruption.] The Secretary of State stutters and mutters. I should be glad if he would get up and say "The hon. Gentleman has got his figures wrong."
Mr. Tom King: The Minister of State will reply.
Mr. Golding: The Minister of State will reply when we cannot get at the right hon. Gentleman. That is an old dodge. The Secretary of State talks his general waffle and the Minister of State will be asked to reply when we cannot get at him. I wonder what justification there can be for running such an expensive scheme. It is a financial flop.
Another problem that we face is that we are receiving complaints from constituents because employers are being encouraged to exploit young people. That is happening increasingly. Young people are taken on the young workers scheme. As soon as the subsidy comes to an end, they are bundled out of the door. If a person is recruited on the young workers scheme and then goes into an apprenticed job with higher wages, the employer grumbles when his subsidy is cut. If complaints are made against the employer for cutting pay, the youngster mysteriously gets the sack for something else. He gets the sack not because of the wages, but because of this, that or the other. Once complaints are lodged, victimisation takes place.
That is no way to treat our young people. One will not get the best out of them if they are exploited and ill-treated. That is not a base for increased productivity in future. One will produce so many work people who are against the system, the boss and the firm. The atmosphere that has been created by the young workers scheme and some of the deficiencies in other schemes will be harmful to our industrial future. The Government owe it to our young people to ensure that they can develop their talents and their potential to the full in a favourable atmosphere. They cannot do that at present.
There is evidence of growing exploitation not only of those between 16 and 24 but of those under 16. It is important for the Government to take seriously the charge that young people under the age of 16 are being exploited in cafes and elsewhere. They are being given low pay, and are taking jobs from other people.
We need a Department of Employment that once again will stand up for itself against the Treasury. We want Ministers at the Department who will stand up against the Prime Minister and make it absolutely clear that their role in government is to stand up and be counted on the side of the unemployed. All that those Ministers seem to do at present, from their comfortable offices in Caxton house, Tothill street, is to count the number of unemployed. They are insensitive, inadequate and incompetent. The quicker they go, the better.
5.18 pm
Mr. Geoff Lawler: I share the dismay of my right hon. Friend the Secretary of State at the negative attitude taken by the Labour party to this subject. In the motion there is an element of constructive suggestion. I hope that it will come out later. At the moment there is precious little evidence of it. Perhaps the fact that there are so few Labour Members present is a reflection of how short on constructive ideas they are.
That negative attitude to youth unemployment does not go down well with young people. They do not like to be told that they are on the scrap heap or that there is no hope. If one talks to young people, one finds that they are taking great steps, either through joining the youth training scheme or, if they are too old for that, by going to unemployment centres or joining any other schemes on which they can teach themselves skills and learn to become more employable and thus find jobs more easily. What Labour Members say is like a doctor telling
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everyone in a hospital that they are desperately ill and there is no hope for recovery. There is hope, and young people are grasping those opportunities.
That negative attitude is almost a death wish for the youth training scheme and has done more harm to it than any other factor, including the level of allowances such as the travelling allowance, and the quality of training. If one talks to some young people on the youth training scheme, one hears criticisms that spring from certain Opposition Members and certain people in trade unions, but I agree with my right hon. Friend that the bulk of trainees take a responsible attitude towards the scheme. Unwarranted criticism of the training scheme has done much harm to young people's aspirations, but the vast majority have ignored it, and those on schemes are pleased to be there and regard them as an avenue to a future job.
On a more constructive note, I should like to consider what the Government are currently doing and suggest measures to put more young people into jobs. The reason youth unemployment is so high is that for every reduction of 1 per cent. in employment, it generally happens during a recession that the level of unemployment among the under-twenties rises by 1·7 per cent. That is because the employers' first step during a recession is to stop recruiting. In particular, they stop recruiting young people, because young people are a burden on a company. They are untrained and add very little to productivity and competitiveness.
It is therefore imperative that the Government should pursue a national training scheme that enables young people to contribute to a company almost from the day they arrive. They must arrive equipped with skills. The lack of a suitable scheme has greatly damaged industry in this country in the past few years. Until September 1983, only 50 per cent. of young people in the United Kingdom had training of any kind, compared with 90 per cent. in Germany and 80 per cent. in France. It is no coincidence that in Germany last year the level of youth unemployment was 13 per cent., while ours was 26 per cent. We have the lowest level of skilled young people in the Common Market. That point was recognised by the Labour party in 1978 in its consultative paper, which stated:
"If this neglected group do not receive the vocational preparation they need, many workers in Britain will continue to be substantially less well trained than their counterparts abroad, and the industries in which they work will continue to suffer in consequence."
That is very important. It shows that training not only provides young people with skills but helps to create jobs. That is why a national training scheme is so important. In Bradford this year, 40 per cent. of school leavers who have found jobs have opted for the traditional manufacturing industries. If they acquire skills before they go into those industries, they are able to contribute to them. They are able to use their skills in technology and engineering to contribute to innovation. That will ensure that their company becomes more competitive, that its share of the market expands and—perhaps even more important—that it is able to develop new markets.
This new generation of skilled young people will not feel trapped in one occupation. The youth training scheme will provide them with job skills that are flexible, adaptable and transferable—all vital qualities in today's changing job market and work environment, as many hon. Members in marginal seats can attest. Employers want those skills and will take people on if they have them. That

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is why, as recovery continues, we shall find that employers will take on a greater proportion of young people, as they have done in every other economic recovery in the past. So the level of youth unemployment will decline.
The seeds are sown for a promising future for young people from the youth training scheme. However—I welcome my right hon. Friend's remarks on this point—there will be a problem with those who have not had the benefit of the youth training scheme. Young people aged 17, 18 or more have not been able to acquire skills. I am glad that my right hon. Friend is considering this area seriously. In Bradford there are 475 18-year-olds who have been unemployed for over a year. It is vital that, when we provide skill training for young people, we do not forget those who are aged 18 to 24 or more. I urge the Minister to encourage the Manpower Services Commission to show greater flexibility in the treatment of those young people. For example, there are the information technology centre schemes which have been so successful that in Bradford, where there were 60 places, so many people have gone into jobs already that there are a certain number of vacancies that cannot be filled because there are no 16-year-olds to fill them. They are all placed in jobs or education. Rather than leave 10 places standing idle, could not the MSC take in 10 people aged 17, 18 or more? That would not involve any extra expense. It is inconceivable that there are no young people of 18, 19 or more who would not be glad to take an ITEC place, knowing that it virtually guarantees them full-time employment afterwards, and who would not want an extra allowance for attending that place. All that is required is a certain amount of flexibility from the MSC and the DHSS to bend its rules to permit these people to attend ITEC courses full-time.
There is another way in which we could help to create jobs for young people. In liaison with other authorities we should consider how to give greater encouragement to young people to become self-employed or to start their own businesses. Much interest is being shown in this area. A recent youth survey, carried out in conjunction with the Thompson report, showed that 30 per cent. of young people were interested in becoming self-employed and running their own businesses.
Mr. Robert N. Wareing: And then they saw the bankruptcy figures for last year.
Mr. Lawler: That idea is being taken up by groups such as the British Youth Council—organisations that take a more constructive view of youth unemployment than certain members of the Labour party. I commend one such scheme, which seems to be working—the stand-by scheme in Kent. This youth unemployment project allows young people to become self-employed or to start their own businesses. It provides advice and skill training, and, in conjunction with the DHSS, has worked out a scheme of providing credits for young people so that the money that they earn goes into a bank and provides for tools for self-employment. It is also a way of saving up the £1,000 that they will need to take advantage of the enterprise allowance at the age of 18.
My right hon. Friend should consider an extension of this, perhaps by encouraging chambers of commerce to provide professional advice and management, working in liaison with unemployment centres where skill training can be provided. Such schemes would contribute to creating extra employment for young people. I hope that that suggestion will be considered.
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The Government have taken a constructive view of the problem of youth unemployment and made a constructive response. That response, and the schemes that are in operation, give young people hope.
5.28 pm
Mr. Tony Blair: The eastern division of County Durham's career service recently published its 1983 annual report, which covers eight comprehensive schools and their school leavers. Only 335 of those school leavers have obtained full-time jobs. In the final quarter of 1983, only 24 obtained full-time jobs. Ninety-seven of the 335 have rejoined the dole queue since they left school and found a job. The report also shows that over 120 of those who left school in 1982 and found jobs are now back on the dole and that a further 261—16 per cent.—of those who left school in 1982 have not worked at all since leaving school. It is true that 1,000 or more are on youth training schemes, but that is of little comfort to them.
In County Durham, about 20 per cent. of those who join Government schemes get full-time jobs after leaving them. Across the northern region, since 1979 the most dramatic change in the total unemployment figure has been the percentage of long-term unemployed. Whereas in 1979 12·5 per cent. of youth unemployment was long term, by the beginning of 1984 it had risen to 32·3 per cent. It is not the statistics that matter but how the lives of young people who live in areas such as mine are actually affected that brings those figures home.
Young people are desperate for work. They have no sense of purpose or hope—only despair—and their first experience of adult life is often the dole queue. Their lives comprise standing on street corners, watching television or video and going along to apply for jobs and frequently being told that unless they have experience they cannot have a job — but it is not possible to gain such experience without having had a job. In a recent paper which was presented to the British Association for the Advancement of Science, Mr. Kenneth Roberts talked of the twilight world which many young unemployed people inhabit. They move from temporary Government schemes to low-wage unskilled jobs temporarily and then back to the dole queue.
The Government's amendment congratulates them on their economic policies and youth training programme. It would be easier to be well disposed towards the latter if it were not so much influenced by the former. The character of schemes such as the youth training scheme and the young workers scheme depends as much on the motives and ideology of those who run the schemes and the Government as they do on their detail. No Opposition Member is against the idea of youth training, but we oppose the way in which the schemes have been implemented by the Government and how they are being run. It is difficult to resist the conclusion that the Government's intention in the YTS is to condition youth to low wages. We have reached the ludicrous point at which the concept of training becomes the concept of training people to accept low wages.
Mrs. Angela Rumbold: The hon. Gentleman disagrees with the way in which the Government have set up their youth training scheme. Does he disagree with the idea that the employer has a great deal to give in terms of training young people?
Mr. Blair: I certainly do not suggest that the employer does not have a role in training young people. The Labour party's programme makes that clear. I must point out emphatically, however, that it is wrong for the youth training scheme to become a means of conditioning young people to low wages. It is difficult to resist the conclusion that that is what the scheme is about.
Perhaps I might quote what the Prime Minister said on 27 July 1981, shortly before the White Paper on the youth training scheme was introduced. She said:
"Because the wages of young people are often too high in relation to experienced adults, employers cannot afford to take them on—even though it is clear that many employers want to help. That situation has come about because of unrealistic pay bargaining over the years."—[Official Report, 27 July 1981; Vol. 9, c. 835.]
Mr. Kenneth Hind: That is right.
Mr. Blair: For the benefit of the hon. Member for Lancashire, West (Mr. Hind), I shall read from the Department of Employment's research paper which was published shortly before the Prime Minister spoke. It said:
"Variations in youth unemployment do not appear to have any systematic relationship with changes in the relative earnings of young people."
The young workers scheme is an extraordinary indication of the Government's purpose in that area of policy. It provides a subsidy for young people to be paid low wages. If any right hon. or hon. Member is in any doubt about how the scheme is perceived by many young people, he should be aware that many such people regard themselves as being brutally and cruelly exploited by the low wages paid in the youth training scheme. One has only to talk to them sensibly to appreciate that.
Mr. Lawler: The recent survey, to which I referred in my speech, showed that when young people were asked why they would not go on the youth opportunities programme, only 3 per cent. quoted the allowance and their being exploited as cheap labour as a reason.
Mr. Blair: That is a piece of calculated impertinence. Many young people, when faced with the prospect of doing absolutely nothing and going on a scheme, choose to go on a scheme. That is why many young people in my area go on such schemes. That is not a reason for the complacent arrogance that we have just heard.
Mr. Golding: Will my hon. Friend bear it in mind that the first thing in young people's minds is not the wages but the fact that there is little point in going on a scheme if they do not get a job afterwards? That is the feeling that has conditioned the response to the survey.
Mr. Blair: My hon. Friend is absolutely right. We should remember that when the YTS was originally mooted by the Government, it was to be compulsory and the wages were to be much lower than they are. Now the number of mode B1 places is to be reduced and the NAPRO wheelbase project in Darlington, which provides a service that meets a real need in the community, is to have its 90 places reduced to 30. Measures such as that mean that many young people and others who analyse Government policy believe that the Government's purpose is to push people into low-wage jobs rather than to give them real training.
I entirely accept that no amount of schemes is a substitute for Government action in the broad management of the economy, but it is there that the Government's true failure lies. Government action requires Government will.
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It is appropriate that today's debate takes place almost 40 years after the Conservative-led coalition Government of 1944 presented a White Paper on employment policy. It was a Conservative Minister of Reconstruction—my goodness, we need such a Minister now — who presented that White Paper to the House. Sir William Beveridge later described that White Paper as
"a milestone in economic and political history".
It defined three major advances in economic policy which should be taken as read: first, that the concept of planning had a role to play in creating employment; secondly, that the Government's role in stimulating demand and spending was a key factor in diminishing unemployment; and thirdly, that the primary aim and responsibility of Government was to maintain high and stable levels of employment.
It is a sad but profound reflection on the modern Conservative party that it is the Labour party which must now argue with Conservative Members for all three of the points that were advanced. The Beveridge pamphlet called "Full Employment in a Free Society" was widely praised. Like the Opposition, he appreciated that freedom and democracy are not abstract and formal concepts but relative. When our young people are deprived of the opportunity to lead an active working life and to play a proper part in the affairs of the community, they cease to feel a part of the community.
Mr. Barry Porter: Does the hon. Gentleman agree that the debate so far has shown that successive Governments have fiddled about with schemes of various types with varying success? Does he further agree that no one has yet attempted to define full employment which is one of the three legs on which the hon. Gentleman advances his argument? Will the hon. Gentleman define, in modern terms, what full employment means and say whether it is achievable? Is he speaking of employment levels such as those of the 1950s? No forecast that I have seen suggests that full employment in terms of the 1950s is possible. Would it not be much kinder to young people to say what we mean by full employment? Should we not spend our time trying to find a way in which to organise society so that people who are not working in the ordinary sense have a proper role to play in society? Would it not be much better if we did that rather than exchanged ridiculous rhetoric?
Mr. Blair: I hope that the House will compare what the hon. Gentleman has just said with what a Conservative Government wrote in 1944. If it does, it will see clearly the difference between the modern and the old Conservative party.
When young people do not feel that they are playing a part in community life, more than their livelihoods suffer. Democracy suffers. The tragedy is that many young people are denied the opportunity to live an active working life and to play a part in community affairs. The Government's sin—no amount of schemes will absolve them—is that, as long as they are in power, the tragedy will go unremedied.
5.39 pm
Mr. Mike Woodcock: In my constituency there are more than 5,000 registered unemployed. That represents more than 20 per cent. of the working population. For every registered vacancy there are 75 people waiting to fill the job. Fifteen per cent. of

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all young people between 16 and 18 are without a job, even though last year 71 per cent. of school leavers entered youth training schemes. Moreover, 40 per cent. of the registered unemployed are under 25.
That is a tragedy. It is a tragedy in personal terms because to trade the classroom for the dole queue is no way to start adult life and because young people lose hope. Last week, I heard about one young person with A-levels who had made 140 job applications and received 140 rejections. It is also a tragedy for society, for without work young people can become frustrated, rebellious and eventually apathetic; and apathy is no solution to the country's problems. It is also a tragedy for society, because unemployed young people can so easily drift into bad ways, including petty crime. Shoplifting may be induced by the desire to keep up living standards and vandalism may be induced by boredom. I make no excuses for such behaviour, but in 12 years as a magistrate before I became a Member of Parliament I learned that there is a connection between youth unemployment and petty crime.
Youth employment opportunities depend on many factors. First, they depend on young people not being priced out of the job market, because employers will ultimately choose employees who seem to be good value, after taking account of the inevitably higher costs of training young people. They depend on young people having adequate education standards and adequate qualifications. Our schools and colleges still have a long way to go before they turn out young people suitably qualified to work in trade and industry. They depend also on young people having the right attitudes and appearance when they attend their first job interviews.
Mr. Golding: Did the young gentleman with A-levels whom the hon. Member cited as having applied for 140 jobs meet the requirements of good education and appearance, attractiveness and so on?
Mr. Woodcock: Yes, I think that it is fair to say that that young person—it was in fact a young lady—met those requirements. But that is not the whole story. Above all, job opportunities for young people depend on job opportunities generally. When I talk to careers officers and jobcentre staff in my constituency, they say that the problem is not that employers are reluctant to take on young employees but that there are simply no jobs available for anyone.
To put it very simply, if there are to be more jobs for young people, there must be more jobs generally. There is only one way to achieve that — through higher productivity. That means producing the right goods at the right price in the right quantity at the right time. That is the only way to succeed, as every successful business man knows. It means paying ourselves what we earn and not more than we earn, because that merely leads to inflation and ultimately to unemployment. It means encouraging business expansion by rewarding enterprise and allowing businesses to keep and invest more of what they earn. It means reducing taxation, especially rates. I regularly hear of businesses in my constituency paying rates equal to £40 per employee per week.
Mr. Wareing: The hon. Gentleman may be interested to know that at a meeting with the Secretary of State for
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the Environment this morning a delegation of Liverpool councillors was advised to increase rates by 60 per cent. What does the hon. Gentleman think about that?
Mr. Woodcock: Any local authority which raises rates by 60 per cent. and passes on the increase to local businesses will certainly increase unemployment.
I do not pretend to know the answer to youth unemployment, but I do know that before we can have more jobs we must have more successful employers. Every one of us can help in achieving that. The Government can help by reducing taxation on businesses trying to expand and by continuing to roll back the frontiers of state bureaucracy and interference. They must gear regional aid more closely to job creation and give special consideration to cases where jobs are lost as a direct result of Government action. For example, Associated Octel in my constituency produces most of the lead additives for petrol. Its 1,500 employees stand to suffer greatly from the Government's decision to phase out lead in petrol. That is no fault of the company.
Local authorities can help be reducing rate levels which are crippling many small businesses. They must be more active in providing and helping small businesses to find accommodation. The education system must help more by preparing young people more adequately for working life and teaching them the disciplines and constraints that working life demands. The trade unions must help by modifying agreements which require employers to pay wage-for-age scales and which in many cases make it uneconomic to employ young people. Parents must help by preparing children for the day when they must compete in the job market. Young people can also sometimes help themselves more by recognising that most employers will choose smart, punctual, polite applicants.
Above all, Members of Parliament can help by supporting policies based on business common sense, policies which recognise that we must live and work in a world economy and that protectionism in any form is no long-term solution. We can help by supporting policies which tackle the underlying problems of this country. Those are the policies which will lead to an upturn in the economy and those are the policies of this Government.
5.47 pm
Mr. Ian Wrigglesworth: Although it is always necessary for the country to have as comprehensive and effective a system as possible for training young people, the problem of unemployment makes the training scheme introduced by the Government and the various schemes run by the Manpower Services Commission especially important for so many young people today. I wish to say something about the youth training scheme before commenting on the problem of unemployment.
It is a sad fact that this country has taken far too long to introduce a system of youth training that has been needed for many years past. Although the Government have now introduced such a scheme—the Secretary of State mentioned the comments of the SDP president, the right hon. Shirley Williams, on this—our competitors in Europe, especially Germany, and in other parts of the world have more comprehensive and effective training schemes in which they have invested far more resources than this country ever has.
The alliance supports and welcomes the introduction of the youth training scheme but believes that it can be

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improved. I shall point out one or two ideas for improving the scheme that I hope the Government will consider. First, I hope that their approach to the scheme will be to look on it as only a first step towards a longer system of training for young people than we have had in the past or that we have today. Secondly, it must be developed into a more comprehensive scheme than it is, because it does not fit in well with adult training, the apprenticeship system or what is going on in the schools and further education colleges, which should run parallel with it.
The Secretary of State will know that I and my colleagues have often expressed our anxiety about the development of the dual track training and education system. The Secretary of State is aware of the problem of the overlap, and the decrease in co-ordination between what is happening in local education institutions and under the MSC. So much has been put on to the shoulders of the MSC that I am sure that all hon. Members must be aware that it has not been able to carry out its duties and responsibilities as effectively as it should have done or would like to have done. It has been given so much to do in a short period that it is not able to carry out its job properly. More resources are needed to help it to do so.
Instead of having two Government Departments, one responsible for education and one for training, we should have one Government Department responsible for both. I know that, with the vested interests of Government Departments and members of the Cabinet, it is not easy to contemplate losing part of an empire, but I beg the Government to look at the problem of the dual track system that is developing, particularly with regard to the recently published White Paper. The problems will grow, and there will not be the comprehensive system that is needed unless we have better co-ordination.
Nothing illustrates this better than the development of what I regard as the excellent and exciting new initiative in training in vocational work in schools that the Secretary of State for Education and Science has introduced. However, it is no good for the Department of Education and Science to introduce such an initiative, welcome as it is, when it is not tied in with the youth training scheme and the other work going on under the MSC and other parts of the education sector. I hope that the Government will look not only at this but at the way in which the YTS is monitored and certificated. It is no good having a scheme if, at the end of the day, it has been second-rate training for the young people and they do not have a piece of paper, a qualification that they can take from the employer, that is recognised as being worth something.
The problem is not only one of the quality of training but also of fitting that qualification in as a component with what is going on in apprentice training and adult education later in life. We should not be speaking only about youth training because in today's world people will need to go back to training and education throughout their careers much more than they did in the past. Therefore, youth training should be the first step in achieving a more comprehensive system than that which we now have.
Reference has been made to the weakness of the scheme, caused by the unemployment that is the main feature of this debate. There is a clear division in the House between the parties as to what economic policy we should adopt to get more people back to work—I do not say to get rid of unemployment. It would be a bold hon.
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Member from either side of the House who would claim that he or she knew the answer to this problem, and a little humility on the part of all hon. Members might ring a bell outside if we were to demonstrate it rather more than we do in debates such as this.
The best way to characterise the difference of approach between the parties is to refer to the economic indicator to which the Government have paid so much attention in recent years, the public sector borrowing requirement. The Government are the party of the 2 per cent. PSBR as a percentage of gross domestic product. The alliance is the party of 4 per cent. and the Labour party is the party of 6 per cent. or 8 per cent., depending upon whose speech one is listening to. I read with interest the speech made by the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) as he seems to be moving in the direction of the alliance.
As the Secretary of State knows, we do not take the view that there should be a massive and confetti-like reflation of the economy. The Government have a major responsibility towards the young unemployed and must do more than they have done since 1979. The international comparisons show this clearly. They must do more to get young people back to work and into jobs and to give them opportunities that they do not have at the moment.
What worries me about the Secretary of State's speech today, about the Prime Minister's attitude and about the Chancellor's and other senior economic Ministers' attitudes, is that they do not seem to be aware of the scale of the problem facing them. I have the pleasure and the pride to represent Stockton-on-Tees. A former right hon. Member who represented my constituency, which is also my home town, is the ex-Prime Minister Mr. Harold Macmillan, who was our Member before the last war. As his choice of title for when he goes to the other place demonstrates, he learnt a great deal from the town, and that has stayed with him throughout his life. His period as our Member left an indelible imprint on his mind, and in Stockton because he will always be held in high regard there, where he is a freeman of the city. The effect the town had upon him was demonstrated in his writings at that time and in the policies that he has pursued since then.
All those experiences and policies have been rejected by this Administration. Over the past two weeks I have been reading Harold Macmillan's biography, and I have been struck by the fact that the unemployment figures in Stockton-on-Tees today are not that much different from what they were when he was the Member for my constituency. In particular, the young people are in virtually the same difficulty today as they were then.
If he has not done so recently, the Secretary of State for Employment would do well to study the writing of that former Prime Minister and the policies that he advocated and pursued when he was in office. They are not revolutionary policies, but they are very different from the policies that characterise this Administration. If the Secretary of State and the Prime Minister in this Administration were to move in that direction, they would give hope to the young unemployed and make their participation in the youth training scheme and in the employment opportunities that the Secretary of State's Department provides through the MSC that much more meaningful. That would get more people into them and make them more relevant to their lives.
Unless the Government are prepared to change their economic policies and to start a steady reflation of the

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economy over a period those youngsters who have been unemployed for too long already, and who have no hope of obtaining jobs in the foreseeable future, will despair even more. I fear to think what retribution will be wreaked on society as a result of their despair and anger.
5.59 pm
Mrs. Angela Rumbold: It was interesting to hear the hon. Member for Stockton, South (Mr. Wrigglesworth) comparing the position of 40 or 50 years ago with today's. He and Labour Members seem to have forgotten that, sadly, unemployment is not the prerogative of Britain. In the European Community, which has a total population of 273 million, of whom 100 million are aged under 25, the sad fact is that young people account for 20 per cent. of the working population, but for 40 per cent. of the unemployed. Youngsters are especially vulnerable to the effects of world recession, and it is generally acknowledged that special measures are needed to help them.
My hon. Friend the Member for Bradford, North (Mr. Lawler) stressed the importance of the young people of any country being in the right frame of mind. Central to that is an optimistic future in which employment is available and the rewards for it are attractive. That will provide the background for a better understanding of other nations' problems and the greater likelihood of mutually beneficial attitudes among countries.
Although the world recession has partly contributed to unemployment in Britain, other factors, such as new technology, have also had an impact upon it. We must take on board the fact that traditional jobs will disappear as new forms of employment appear. As I can see no reason for continuing to look back and wring our hands in misery, I wish to look forward and try to determine where those jobs will come from.
It is important to make it clear that the Government can play only one role, and that is providing the right policy framework within which economic changes can take place smoothly. It is logical to say that only when the long-term decline in profit is reversed will investment be encouraged, which is critical to long-term job creation. Without labouring the point, may I say that for Britain to provide the optimum opportunity for sustained competitiveness there must be an improvement in design, more reliability in marketing and an effective after-sales service comparable with that of other countries, so that we can improve our share of domestic and world markets. Without such effective management we cannot compete with other countries.
The Government have taken a number of steps in the right direction to encourage the training of youngsters. As my right hon. Friend the Secretary of State said, they are already spending a considerable sum to ensure that training is available to every young person who requires it. Some hon. Members have said that the amount of money paid to the youngsters is not enough, but, whatever the sum they received, some people would find fault with it. It would either be too much or too little. Although it might seem tough, part of the training process is the understanding of the trainees that those who are teaching them and working with them are sharing skills which have a cost attached to them. That is a valuable bench mark for the young, coming face to face with the realities of work.
I have always believed that training is only as good as the result: that those in receipt of training are successfully
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employed afterwards. That must mean that the current scheme should relate to possible, or even probable, employment. That is why there should be a change of emphasis from community-led schemes to employer-led schemes. The schemes should be based on first-hand experience of the skills required in jobs, which would provide a much better chance for future employment.
Any future training scheme should have three basic elements: potential employers should be involved, it must be regarded as a long-term investment to provide relevant employment; and the idea should be clearly implanted that a well-trained work force produces an efficient work force composed of people who obtain maximum job satisfaction. We have heard very little in the debate about ultimate job satisfaction, but without it no future work force, however well trained and however much employment there is, will be satisfied with what it is doing. The future work force must also be adaptable.
I have concentrated on only one area of a many-faceted problem, but it is critical to our future employment pattern. The relevance of the training which our young people receive must be examined continuously, and I hope that those who plan training in future will take an accurate estimate of employment patterns so that the skills chosen and the schemes introduced change according to our prospects. I refer especially to the use of computers and high technology, which will play a significant part in our future employment scene. However, we should not forget the service industries when planning youth training schemes, since in future there will be much more time for leisure. There should be endless opportunities for planners to imagine what those industries will be.
I stress the danger of allowing youngsters to continue to believe that they will not have a place in society. Although the Government have taken many steps towards improving the position, it is vital for our future society that young people are geared to believing that they can look forward to success. Unless we do that — it is our responsibility as adults—and unless we point out the opportunities to young people, believing that they will exist, we shall not satisfy the requirements of a responsible Government.
6.8 pm
Mr. Robert Kilroy-Silk: I represent half of the borough of Knowsley, which has the highest youth unemployment in Britain. For that reason alone, I welcome the motion tabled by my right hon. and learned Friend the Member for Monklands, East (Mr. Smith) and the opportunity provided for the House to debate youth unemployment and to hear what plans the Government have to alleviate the enormous scale and depth of youth unemployment. The problem is that we heard little from the Secretary of State today that would contribute to relieving the anxiety of the 85 per cent. of school leavers in my constituency who are either unemployed or serving on youth training schemes. They have heard nothing to make them sure of a full-time, proper job at any time in the foreseeable future.
Youth unemployment has to be set in the context of the general economic situation and of adult unemployment. The background in my constituency is the continuing and deepening crisis of Merseyside. According to the 1981 census, the employment rate level in my constituency was 22 per cent. male unemployment. Since then, in the town of Kirkby alone, which is one small part of the

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constituency, there have been 8,000 redundancies. On Merseyside we have witnessed major closures of factories such as Dunlop, Tate and Lyle, Courtaulds, Hygena, Metal Box and Meccano, and substantial redundancies in BICC and British American Tobacco. Scarcely a day goes by on Merseyside or in my constituency without a major factory closure or substantial redundancies announced.
On Merseyside, 103,639 men are unemployed, an unemployment rate of 18 per cent., with 38,745 women and 5,500 school leavers unemployed. In the town of Kirkby, 5,949 men are chasing seven jobs, with 1,764 unemployed women and 252 unemployed school leavers. In the small town of Prescot, 1,865 men, 830 women and 107 school leavers are unemployed.
The problem is not just magnitude of the numbers, but, as the Secretary of State acknowledged, the length of time that many adults, and in particular today young people, have to spend waiting for the opportunity to begin their lives as fully employed individuals. As I pointed out in my intervention in the Secretary of State's speech, 46 boys and 30 girls who left school in the year in which the Government came into office in 1979 remain unemployed, and have never had the opportunity to earn their living. They have never had a proper job. Nine boys and two girls aged 18 to 19 have been unemployed for between three and four years.
Let us consider the higher age group. The unemployed are often the 24-year-olds who have missed out on training or youth opportunities programmes. In Kirkby, 210 boys—if one can so call them—and 72 girls in the age group 20 to 24 have been unemployed for up to three years. A total of 154 males and 56 females have been unemployed for up to four years. Fifty-seven boys and 20 girls in the same age group have been unemployed for four to five years. Of that age group, 56 boys and 15 girls have been unemployed for over five and a half years in the town of Kirkby alone. That shows not only the scale of the problem and the depth of the economic crisis, but the way in which this affects our young and, in some cases, vulnerable people.
In the town of Prescot, three 19-year-old boys have been unemployed for four years, and 13 19-year-old boys and four 19-year-old girls have been unemployed for three years. Unemployment is at its highest, however, in the town of Cantrell Farm or, as it is now called, Stockbridge village, where in hardly one block of fiats—and they are huge blocks—can one find a male, female, adult or young person in full-time work. The Secretary of State will know this, because he was partly responsible for funding the privatisation of that council estate. The area covered by this huge estate is deprived, desolate and decimated, with hardly one person in full-time productive employment. The situation is terrifying. It is a scandalous state of affairs for any Government or any country to have allowed entire communities in places like Cantrell Farm and Kirkby to have reached this level.
The Secretary of State says that at least there are the youth training schemes. In my constituency, the youth training scheme has been avidly and enthusiastically embraced by the council and by private employers such as BICC and Otis Elevator, as have the community-based schemes such as the Kirkby training workshop or Knowsley community enterprise scheme. There are approximately 2,000 places in my constituency alone. The
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fact that those community-based schemes are used by the council and by the private sector does not detract from the criticisms that have been made by my right hon. and learned Friend the Member for Monklands, East and other hon. Friends. In my constituency—I know this not from academic surveys such as those quoted by Conservative Members, but from speaking to the people on the streets and in the places in which they are working on these schemes—I have been told repeatedly that the schemes are no substitute for a proper job. The schemes are often reviled by people, because they do not offer the prospect of full-time employment at the end of the year. Their training needs are not met, because the jobs for which they are being trained—if, indeed, they are being trained—are not available at the end of the year.
Mr. Tom King: Anybody who has the slightest knowledge of Knowsley or Merseyside knows the appalling difficulties in the hon. Gentleman's constituency. When the hon. Gentleman echoes those criticisms yet again, there is an unfortunate side effect. While it may be true that these courses are no substitute for the full employment that many would wish to see in certain areas, they do provide training and work experience. The message to some young people from the contributions of some of the hon. Gentleman's hon. Friends is that it is better to stay at home and do nothing than to go on a scheme. That is the damage that is done to young people.
Mr. Kilroy-Silk: Let me make it clear—I speak for my constituency and my constituents—that I have not said that, nor do I say it. It is the young people who say to me that they would rather be in full-time employment, that there are many deficiencies in the scheme and that they are not being paid enough or being adequately protected by health, safety and welfare regulations. These comments are made forcefully and eloquently. This point was made by my right hon. and learned Friend the Member for Monklands, East, and it was repeated by my hon. Friend the Member for Coventry, South-East (Mr. Nellist). We are not dreaming or theorising, but are relating the direct experience of our constituents, who are at the sharp end where it counts. The youth training schemes in my constituency are no substitute for jobs, nor do they provide sufficient training. [Interruption.] If the Secretary of State wishes to mutter, I shall be happy to give way to him. However, he will be much better employed listening to the criticisms of these schemes by my hon. Friends, and then improving them.
Without detracting from the useful work that the schemes have often done, I maintain that some schemes do not cater for children of lesser ability. Unfortunately, there are many such children in my constituency who cannot benefit from the training provided in the schemes. None of the schemes is any substitute for proper jobs.
Several hon. Members, not least on the Conservative Benches, have pointed to the waste of young people caused by the present levels of unemployment. We are wasting the future of those young people—indeed, we are wasting a whole generation. They are the forgotten generation. We are involved in the criminal, almost wanton, destruction of their hopes, lives, talent and abilities. There is not the dignity of employment for them; there is no training or proper skill acquisition; there is no future. There is no need for what my constituents

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experience. There is no need for the desolation, deprivation and scale of unemployment that we presently confront.
I say that with great authority and great confidence because of the unmet social needs in my constituency and on Merseyside. Any sensible, reasonable person could match the resources, abilities, aptitudes, talents and ambitions of my unemployed constituents with the real social needs for rehousing, repairing the sewers and improving the transport system — all of which are urgently needed in Knowsley and on Merseyside.
There are 36,000 men and women on Merseyside in pain, agony and distress, on the waiting list for hospital admission. Yet wards are closed and new wards have empty beds. There are unemployed doctors and nurses because of the cuts that the Government have imposed on the National Health Service. How much more sensible it would be to open those wards and fill those beds, to reemploy the doctors and the nurses, and thereby offer employment opportunities to my constituents as ancillary workers, administrative workers and so on. That could be done in that one area alone. There is no need for such criminal destruction of our lives and our youngsters. The quicker the Government understand that, the quicker they can embark upon the massive public works programme that is so urgently needed and the quicker they will stop the corrosive effects on my constituents.
The riots that we have seen—which no one condones or wants to see again—will be as nothing to those that we will experience if we do not now show that we care for our children and their future, if we do not now show that they are just as much a part of this community and our society as the Secretary of State for Employment. At the moment we are not giving them that message; the message that they are receiving is that we do not care and they do not count. That is a terrifying message and it will have horrendous consequences.
6.23 pm
Mr. Roger Gale: It is incumbent upon me to say immediately on behalf of any youngsters who may be listening to the debate that the indictment that we have just heard from the hon. Member for Knowsley, North (Mr. Kilroy-Silk) is wholly irresponsible.
I am grateful for the opportunity to speak in this performance because I was at the rehearsal on Friday 15 July when the hon. Member for Newham, North-East (Mr. Leighton) was rather more constructive and sympathetic than his Opposition colleagues have been this afternoon.
Conservative Members agree with Opposition Members on the need that has been voiced, but we part company with them on how to meet that need. I have not heard from the Opposition Benches one useful, costed suggestion that is likely to help young people—
Ms. Clare Short: The hon. Gentleman has not been listening.
Mr. Gale: I have been listening intently.
Mr. Nellist: The hon. Gentleman has not understood, then.
Mr. Gale: I have not heard one useful, costed suggestion that will help youngsters. Instead, I have heard an indictment of a scheme that we believe is making a significant contribution to helping youngsters. It is an insult to the youngsters taking part in the YTS that it
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should be condemned out of hand, quite irresponsibly, by the Opposition this afternoon. Any youngsters listening to those comments would be dismayed.
Conservative Members want to say to youngsters—and their parents—who have been and will be taking part in the YTS that, for the first time, the Government have introduced a genuine short-term apprenticeship that will provide job experience, a useful opportunity and a qualification at the end of a year's training.
Mr. Nellist: What qualification?
Mr. Gale: After 13 weeks of off-site training, they will receive a piece of paper that will state exactly what they have done, the duties that they have had to fulfil, how they have fulfilled them, comments on their time-keeping and on what sort of persons they may be. It will be a reference that will tell a future employer that those youngsters have experience and are now employable. Conservative Members believe that that is extremely worth while.
In my constituency, the Thanet youth training association has offered 400 placements this year, and 210 of them have been taken up by youngsters. Of those 210 youngsters, 53 per cent. —and we are still only two thirds of the way through the first year—now have jobs either in those placements or as a direct result of their training. According to Mr. Lynas, who has run that scheme, all the young people on it have gained in personal development, in confidence and in experience. That sort of enterprise is to be not condemned, but applauded.
I hope that my right hon. Friend the Secretary of State will take the opportunity to visit that enterprise to see the work there. Such work is going on in similar schemes throughout the country. Youngsters are benefiting from a project that the Government have introduced. Rather than condemning it out of hand, and making the youngsters feel that they are doing something that is not worth while, Opposition Members should applaud the enterprise that has been shown.
I agree with my hon. Friend the Member for Mitcham and Morden (Mrs. Rumbold) that many of the jobs being learned are in the new service industries. The youngsters gaining experience in those industries are going out and getting jobs. I also agree with my hon. Friend the Member for Bradford, North (Mr. Lawler), who congratulated my right hon. Friend the Secretary of State on saying that it was time to consider ways in which the scheme could be extended upwards.
Looking to the future, we must offer training in high technology. We must train youngsters in the skills that they need for the opportunities likely to be available to them. Those youngsters are ideally suited to take advantage of modern technology, and, therefore, they must be trained in modern technology. We must provide the facilities for that training. That is why I and many of my hon. Friends have been pressing our colleagues at the Department of Education and Science to increase the opportunities for hi-tech training, and that is now happening.
In the debate in July, which not many Opposition Members present today attended — [HON. MEMBERS: "Yes, we did."' I do not think that many of them did attend. My hon. Friend the Minister of State, Department of Employment, referred in that debate to the enterprise allowance scheme, which at that time was beginning to go nationwide. We have now had an opportunity to see the

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benefits of that scheme and the way in which it applies to youngsters. No one on either side of the House has yet mentioned the possibility for self-employment created by the Government. If is a fact that large numbers of youngsters are taking the opportunities offered by the enterprise allowance scheme. They are not sitting back waiting for something to happen; they are going out and setting themselves up in business.
I wish to refer to two financial equations. The first is the equation between social service benefits and jobs. I find it immensely depressing when a youngster of 18 or 19 comes into my surgery on a Saturday morning and tells me that he, his girl friend and the child receive £83 a week in social service benefits, and that, even though he has useable skills, it is not worth his working.
The second equation is between wages and productivity, to which reference has already been made in the debate.
Mr. Golding rose—
Mr. Gale: I shall not give way.
The money that we pay to young people in Britain is higher than in any other Western country. There is, as is often said, a direct relationship between the amount that we pay and the amount that we earn through productivity. I am afraid that as a result of what has become known as wage bargaining—which other people would call greed — young people have been priced out of jobs by the very people who claim to represent them.
Mr. Nellist rose—
Mr. Gale: I shall not give way. I said that I would be brief.
In July, I said, and I still believe, that in our young people we have a wealth of enthusiasm, energy and optimism. We must not fail them. Nor must we write them off. They are not, as Labour Members believe, a forgotten generation. They are our future. They are very bright indeed, and they are at the forefront of our minds.
6.32 pm
Ms. Clare Short: I am grateful for the opportunity to take part in what is one of the most important debates we have had for a considerable time, because, unless we solve the problem of youth unemployment, we shall not solve any of the other problems that face the nation. Our primary task is to solve that problem, but not enough is being done in that direction.
The scale of the problem is enormous. One in two of all under 18-year-olds are unemployed or on the youth training scheme. It has been projected by the MSC that this year the figure would be two in three, and the only reason why we are not at that figure is that more young people are staying on at school and college because their families consider that that is better than to have them unemployed or on a scheme that will lead them nowhere.
About 1·5 million under 25-year-olds are unemployed, and 339,000 of them have been out of work for a year or more. Unemployment is bad, but long-term unemployment is savage. It leads to gross poverty, grinding apathy and no hope for the future. This problem is growing fastest for young people than for any other group, and last year 100,000 youngsters were added to the statistics of the long-term unemployed.
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In my constituency the situation is very bad. In the area covered by the Handsworth careers service — which includes the whole of my constituency and one ward of the neighbouring constituency of Perry Barr—in 1983, of 1,389 young people who left school 101, got jobs. In my constituency, people have one chance in 138 of getting a job when leaving school at 16. One in four of them has gone on to the YTS.
If the Secretary of State is suggesting that we are no longer allowed in this House to speak the truth about a training scheme because we might mislead young people, he is believing in his own propaganda far too much. The youngsters of Britain take a certain view of the YTS, and many of them are on it because they have no other opportunity. Nevertheless, they are critical of it, and they will do what they think is right on the basis of their own and their friends' experience. We have not yet reached the stage when we cannot discuss such matters honestly, because to do so might be to mislead. The youth are far more intelligent than that.
In my constituency, 329 have gone on to youth training schemes, but the careers service tells me that the schemes are belittled and thought nothing of by the parents as well as by the youngsters themselves. It is the view of my local careers service that many youngsters who are rejecting the schemes might benefit from them because the options locally are so poor. Nevertheless, they are rejecting them. That is their opinion, not mine. The Government should take seriously into account the people whom they claim the schemes should benefit.
There is another irony in that my constituency takes in the centre of Birmingham. We have the highest level of unemployment in the Soho ward of Birmingham, in the centre of my constituency, with 47·7 per cent. unemployed. We also have the commercial centre of Birmingham, but young people from Handsworth do not get on the few high quality YTS schemes there that lead to jobs. Their opportunities end at Hockleybrook, so they go on to schemes that lead nowhere, and increasing numbers of them are rejecting such schemes.
The Minister of State, Department of Employment (Mr. Peter Morrison)rose—
Ms. Short: I shall not give way to the Minister. I have very little time in which to speak, and he will be addressing the House shortly.
In Handsworth, increasing numbers of young people—one in five—have decided to stay on at school, with a further one in five going on to college. One in 10 are registered unemployed, and one in five has disappeared from the unemployment figures. In 1962, I left school in Handsworth at the age of 16. It was never a rich area, but every one of those in my class got a job. That shows the destruction that the Conservatives have done to the west midlands and to my constituents.
It is important to remind ourselves of how recently the problem of youth unemployment has become so gross because Conservative Members suggest that youth wages explain youth unemployment. That is false, and I will come to that. They also claim that there is something wrong with the education system. That is false, too. Until the mid-1970s there was no major problem of youth unemployment in Britain. Indeed, youngsters were snapped up into jobs the moment they left school.
We should, at the same time, nail the lie—it was put about by the Conservative party at the general election and

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Conservative Members have been repeating it ever since—that there has been an inexorable rise in unemployment since the war and that the figures have risen under every Labour Government since that time. That is false, as the facts show.
From the end of the war until 1970, unemployment stood at just over or below 0·5 million. It did not rise higher than that during those years. Then we got the Government led by the right hon. Member for Old Bexley and Sidcup (Mr. Heath) and Selsdon Man. That was monetarism first time round, and unemployment shot up to 1 million. In those days even the Conservatives did not believe that 1 million unemployed was tolerable, so we got the famous U-turn, and unemployment returned to 0·5 million. Inflation was encouraged, and that result was achieved.
Next we had the famous Labour Government who, it is claimed, created massive unemployment. In fact, in August 1977 the peak level of unemployment throughout the United Kingdom, including Northern Ireland, was 1·63 million. Today, we are talking about 3 million registered unemployed, but the number is really far higher. Throughout the time when the Labour party was in office, the number of jobs in the economy increased and the participation rate of women workers, for example, went up. When the Labour party left office, unemployment had come down to 1·3 million.
That is the true historical record, not the big lie that has been repeated time and again to try to confuse the public into accepting the atrocious unemployment record of the Conservatives. Today we have 3 million registered unemployed, but the Government have changed the way in which the figures are collected. It is widely agreed that if they were still collected in the way they were when the Conservatives came to office, they would show 3·5 million registered unemployed. The number of unregistered unemployed has also grown, while the number of people in jobs has declined. That is the record of the Conservatives.
The Government claim that they are not responsible because unemployment has risen in every country in the world. Figures produced by the American Bureau of Labour Statistics—it produces figures for all developed countries on a comparable rate—show that the increase in Britain has been greater than in any other nation. In any event, the Government cannot have it both ways. If they claim not to be responsible for the level of unemployment —because it has risen throughout the world, and other Governments have been foolish enough to follow the economic policies that the British Government have been pursuing—they cannot claim responsibility for reducing inflation.
As for the economic policies that the Government have been pursuing, if many countries are thrown into recession because they adopt monetarist policies and believe in the ridiculous ideas that the British Government have been following, the world economy is bound to go into recession. That does not mean that an act of God has occurred or that it is a problem that we cannot solve. If we pursue sensible economic policies, we can resolve all these problems.
The Government cannot claim that they are not responsible for unemployment, yet at the same time claim that they are responsible for bringing down the rate of inflation. Just as unemployment has gone up in other countries, so inflation has come down in those countries,
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simply because they have adopted the same package of policies. In other words, the Government are responsible for unemployment, if they wish to claim credit for what has happened to inflation, or they cannot claim credit for either. So let them not continue that piece of double-speak.
Conservative Members continually suggest that wage levels cause unemployment among young people, but they speak without considering the facts. What has been the relationship between wage levels and unemployment among young people? In 1980, Peter Makeham undertook a major study, which was published by the Department of Employment, which showed that there was no relationship between the movement in wage levels and the rise in unemployment among young people in Britain.
The study revealed facts that are true throughout the world — that when unemployment rises, youth unemployment rises faster than unemployment within other categories, and that when unemployment falls, youth unemployment falls faster than the average. That has been the pattern in Britain and in all other industrialised countries throughout the post-war period.
The Government are determined to reduce wage levels and to increase profit levels. That is what they are about. They were unhappy with the study to which I have referred, so they recently commissioned another one, to be undertaken by Mr. W. Wells, on the relative pay and employment of young people. The report has recently been published by the Department of Employment. It is research paper No. 42—known in the unemployment trade as the Wishing Wells report. It is suggested that the report reveals a relationship between young people's wages and the level of unemployment, but that is a false description of the study's findings.
The report recognises that youth pay has not risen relative to adult pay over the past decade. We know from the new earnings survey that it has declined relatively since 1979 and that there has been no corresponding decline in young people's levels of unemployment.
The report claims to discover a link between pay and employment, but it is statistically significant for only one group — under 18—year-old males. If that is the explanation of rising youth unemployment, surely there should be a link for females and 18 to 24-year-olds. However, the report states that even for this narrow group
"the results should be viewed with caution."
The great finding is that up to 100,000 jobs could be created for young people by a 10 per cent. cut in their wages. However, about 80 per cent. of those jobs would have to be taken from older workers. Let us have no misquoting of the report.
Mr. Nellist rose—
Ms. Short: I shall not give way to my hon. Friend. I have been speaking for too long as it is.
Reference has been made to the young workers scheme. The Government have a dogmatic attachment to trying to cut young people's wages and pretending that such wage levels are the cause of unemployment. They ignored the research findings published by the Department of Employment and chose to invent a scheme— it is an expensive subsidy—to cause young people's wages to be cut. The scheme has shown that the Government are subsidising many jobs that would exist for young people in any event, and that, by cutting young people's wages, they have not generated a significant number of new jobs for them.

867
The Government must stop claiming that they have the solution and the way forward. The evidence provided by research and practice proves that they are wrong and that their schemes are not working.
What is the effect of the youth unemployment that the Government have created? More jobs for teenagers were lost in 1980 than throughout the 1970s. That loss was suffered in one year—the year after the Government came to power.
There is clear research evidence that there is a link between unemployment among young people and a rising incidence of mental illness. Authoritative studies have borne that out. Other authoritative studies show that there is a link between long-term unemployment and suicide attempts. The largest group of those affected by long-term unemployment consists of young people, and long-term unemployment is growing faster among young people than any other group.
There are other problems, such as increasing drug addiction. A serious proportion of working-class young people are now addicted, and many of them were not previously involved with hard drugs. There is a problem of prostitution among young women. The greatest problem is the sense of hopelessness that has been created among a generation which is starting adult life. Those young people feel that they have no future and no prospects as adults. That is the direct result of the Government's economic policy.
We are all in favour of training, but Britain is providing less training for 16 to 18-year-olds than any other OECD country. In the good old days of full employment, 40 per cent. of young people left school at 16 years of age and received no training. The Government's economic policy has caused the virtual destruction of the apprenticeship system, which has been replaced only by the YTS. The Government's policies have not improved training prospects. Indeed, the training received by young people has become worse. A massive improvement is needed. It is a false claim that the scheme that the Government have cobbled together to cope with the problem of unemployment—they call it the youth training scheme —has met the needs of young people.
The Government have deeply damaged the British economy by implementing policies that were always immoral and that have now been proved not to work. Have Conservative Members the guts not only to admit that their policies do not work but to change them? The answer does not lie in fancy bits and pieces of new training schemes. The solution is a change of economic policy. We shall not salvage a generation, our economy or our country until the Government have the guts to admit that everything they have tried has failed and that they have destroyed a generation in the process.
6.45 pm
Mr. Barry Sheerman: We have all heard eloquent testimony—
Mr. Nellist: On a point of order. Mr. Speaker.
Mr. Speaker: Is the hon. Gentleman raising a point of order because he has not been called to contribute to the debate?
Mr. Nellist: It is a point of order, Mr. Speaker.
Mr. Speaker: Very well.
Mr. Nellist: This debate began at 4.25 pm. and an equally important debate will follow it on care for the elderly. It seems that we can stay in the Chamber virtually all night to discuss Members' salaries, which involve large salaries and high pay. Bearing in mind the interest that has been shown by hon. Members in youth unemployment, is it not within your power, Mr. Speaker, to extend the debate a little longer so that those who have been in the Chamber since 4.25 pm might contribute to it?
Mr. Speaker: That is not within my power. However, the debate can continue beyond 7 o'clock. I think that the hon. Gentleman should direct his remarks to the usual channels rather than to me. The Opposition Front Bench spokesman, the hon. Member for Huddersfield (Mr. Sheerman), rose in his place and I have called him to address the House.
Mr. Sheerman: We have heard eloquent testimony to the fact that youth unemployment threatens a generation with the loss of its future. It threatens the whole of our society by the loss of the contribution that that generation could make to it. I accept that the problem is not entirely of the Government's making—no one on the Opposition Benches would be crass enough to make that allegation —for it reflects in part the long-term structural decline of the British economy. However, the Government stand guilty of contributing enormously to the scale of youth unemployment through their disastrous economic policies and, secondly, of making a heartless and pathetic response to the terrifying scale of the problem.
As has been said repeatedly during the debate, 1·25 million young people are unemployed. Around 25 per cent. of all young people under 25 years of age are unemployed. These young people are not in work, in training or further education. In response to this dire situation, the Government have not begun to do nearly enough. More tragically for the young people affected, what they have done has not been good-hearted or well-intentioned, and their motives have always been suspect. For these reasons the problems will inevitably worsen.
The Government's attitude to the problems of the unemployed young person is crystal clear in their entire approach, in what they have done and in what they have left undone. They did their best to introduce industrial conscription at a miserly £15 a week in the original YTS proposals. They are still doing their best to move the YTS back in that direction by letting the training allowance erode until it finds its way back to a basic minimum level. The Government hanker persistently for an element of compulsion in the scheme. They are using public money to encourage employers to reduce the wages of young people through the young workers scheme. It is shameful that they blame young people for creating unemployment through the ludicrous argument that young people are pricing themselves out of jobs.
The Government have reduced the number of places in higher education when we should be building and developing skills. University places have been cut by 20,000. The Government have increased spending on training to the extent of that which is represented by the YTS, and we accept that this move contains the development, in part, of a more integrated approach. The idea of the YTS came not from the Conservative party or Ministers but from many well-intentioned individuals and organisations, including the TUC and youth training boards.

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The training schemes have been cheapened and soiled by the bad heart with which they were introduced. The range of measures I have listed make it clear that the Government have no real commitment to the training of young people. The Government are not well-intentioned in their approach to training. The good which others persuade them to do is promptly poisoned by the Government's motivation for doing it. For that reason, the YTS will never be a success under this Government. There will still be a demand for places from young people, because they have no alternative.
The Government's motives, in the form of crude ideology, are rapidly displacing any pretext of concern for training. It is increasingly clear that the YTS is not a policy with anything like the scope necessary to meet the scale of the problem. We have heard that time and time again this evening from the Opposition. The YTS's focus is on only the 16-year-olds and 17-year-olds. So far the Government have been reluctant to lift their eyes to see what can be done for the generation under 25.
I repeat the figures: 1¼ million people under 25 are out of work. In so far as youth training is a policy, it is a fig-leaf policy. While the scale of the problem is growing, and there is a steady erosion of the allowances through inflationary increases, that fig leaf is rapidly shrinking. What is needed now as a matter of urgency—that has not been displayed by the Secretary of State or any other Conservative Member—as a minimum, is a crisis initiative for 18-year-olds and 19-year-olds at least on the scale of YTS, although with a much higher specific training component. We need an effective scheme for the 25-year-olds as well. The community programme is barely scratching the surface.
I shall put this in proportion. There are 530,000 long-term unemployed in the 18 to 25-year-old age group compared with the 460,000 places on YTS, and so we need a scheme equally large. YTS is not at stake. We can get locked into those initials. The Government constantly point to anyone who criticises training and say, "You are doing down YTS." We are not doing down YTS. We want to make it bigger and better and a proper training scheme for all our young people. This debate is about the position of young people in society today.
The Government are squandering the human potential of our young people in the same way as year after year they are squandering our oil revenues. Young people are being dealt a cheap four-card trick, and that is a raw deal for most of them. If they choose the work card, there are no jobs. If they choose the training card, YTS leads to nothing after it. If they choose the further education card, there is precious little at the end of that extension of training. If they take the dole card, at best that is a poor card and the restrictions on self-betterment make it increasingly difficult to pursue education under it.
I remind the House that, for just a few, there is privilege and assured success. It is no surprise to me that the Secretary of State went to Rugby and the Minister of State, Department of Employment the hon. Member for the City of Chester (Mr. Morrison) went to Eton. It is hard for such people to understand and realise what young ordinary working people must face. For many of the people playing this game there is a privileged and assured success. For one or two—the jokers in the pack—there is wealth beyond the wildest dreams of the young unemployed. Mark my words: like the jokers in many card games, they do not need any substance of their own to be whatever they
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like. The hopelessness and frustration of young people is growing fuelled by the lack of a future and stoked by the glossy blandishments of our strident, aquisitive society. That hopelessness may lead in many directions. The unemployed may take no easy road out, into riots and mayhem. That road may lead to more crime, more civil unrest and, most serious off all, to a deepening apathy and a sense of personal alienation for young people. Whichever it is, it spells disaster for the next generation.
The Labour party has an alternative, which is not token or perfect, but at least tries to get some measure of the problem. That alternative recognises the problems but does not have all the answers. We want educational maintenance awards, two-year traineeships, and a chance for people to develop real skills within a package over two years. We want to nurture the apprenticeship scheme, which has been devastated under this Government. We want a comprehensive training scheme at the end of the day for all 16 to 19-year-olds. More important, we approach the issue with a different attitude, a good heart and a genuine commitment to youth and to helping young people realise that their trite potential as individuals lies in the discovery of themselves, not in their becoming mere wage slaves in a rotten job for the sake of it. We want them to be individuals who make a contribution to society through effective education and training.
Make no mistake—young people are bitter about the deal they are getting, as was apparent at the recent lobby by YTS trainees which, for some reason, the Secretary of State could not attend. Meeting them that day and thinking of the prospects they face made me think of Tennyson's pathetic lament:
"What shall I be at 50, Should nature keep me alive If I find the world so bitter When I am but 25?"
Those young people are a lost generation—lost to the world of work, to the sense of purpose and worth that people get from a job and to their families. The Secretary of State smiles. Perhaps he has never had an unemployed son or daughter. That is the problem with the Conservative Benches. How many unemployed sons and daughters do Conservative Members have? Those young people are lost through the tensions and torments of poverty and unemployment. Most dangerous of all for us as politicians is that they are probably lost even to democracy. Young people deserve a new deal and a better deal than they get under this Government. In due course, Labour will provide them with the new deal they deserve.
6.57 pm
The Minister of State, Department of Employment (Mr. Peter Morrison): The hon. Member for Huddersfield (Mr. Sheerman) suggested that those of us who had had a public school education were not worthy to talk about important subjects such as unemployment generally and youth unemployment. The hon. Gentleman said that at an inappropriate moment, because it was a large stab in the back for his party's candidate in the Chesterfield by-election.
My hon. Friend the Member for Bradford, North (Mr. Lawler) said—I could not agree with him more— that young people will pay enormous attention to this debate. I hope that they will notice that Conservative Members have been constructive and that the Opposition have been negative and destructive. M y hon. Friend the Member for

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Ellesmere Port and Neston (Mr. Woodcock) said that a job exists only when a product or service is provided at a cost and a quality that makes consumers wish to buy. I agree with him. However much Opposition Members may wish to avoid these basic facts, they always were true, they are true and they will remain true.
The right hon. and learned Member for Monklands, East (Mr. Smith) appeared totally to avoid those economic facts of life. As my right hon. Friend the Secretary of State said, of course the level of unemployment is regrettably high, but with the backdrop of Britain losing international competitiveness and, during the 1970s, our output rising by only 15 per cent. and wages by 350 per cent., it is not entirely surprising. I accept the statement of the right hon. and learned Member that young people are at a particular disadvantage because they do not have the experience or skills to sell that other potential employees have. The economic recovery is with us. Inflation is down to 4·6 per cent. In the last quarter of 1983, industrial output was up by 4 per cent. on a year earlier. In 1983, car production was near the 1 million mark for the first time since 1979 and 18 per cent. up on 1982.
The hon. Member for Sedgefield (Mr. Blair) talked about the figures for his careers service. According to the latest figures produced by the Manpower Services Commission, in January this year in England 25,000 more young people under 18 had come on to the labour market compared with a year ago, but there were 15,000 fewer unemployed. That was because, compared with last year, some 40,000 more young people had obtained jobs, some within and some outside the youth training scheme.
There are two final items of good news. Cost-competitiveness in manufacturing has improved by about 20 per cent. since 1981. The hours lost through short-time working in manufacturing are at the lowest level for four years. Contrary to what the hon. Member for Birmingham, Ladywood (Ms. Short) said, there has always been a link between a job and the price that an employer has to pay. As I said last week, even the TUC accepts that. In a recent document sent to my right hon. Friend the Secretary of State, the TUC said:
"There must obviously be some truth in the proposition that with all other things being equal an individual employer will tend to employ more people if wages are lower and fewer people if wages are higher."
Mr. Nellist: If the contention of the Department of Employment research paper No. 42, that high youth wages cause youth unemployment, is correct, can the Minister explain to me how he stood at the Dispatch Box before Christmas and told me that over the past four years boys' wages relative to the adult rate had dropped by 8 per cent. and that girls' wages relative to the adult rate had dropped by 12 per cent., when we have heard repeatedly tonight that during the same period youth unemployment trebled? Wages have gone down, but unemployment has still gone up.
Mr. Morrison: I do not think that the hon. Gentleman was listening to the figures that I quoted. They had just come from the Manpower Services Commission and they are a distinct improvement over last year, taking into account the fact that the relative difference between adult and youth wages is greater.
The youth training scheme has been wholeheartedly welcomed by all my hon. Friends, including my hon.
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Friends the Members for Thanet, North (Mr. Gale) and for Mitcham and Morden (Mrs. Rumbold) and by the hon. Member for Stockton, South (Mr. Wrigglesworth) who represents the Social Democratic party, and the hon. Member for Newcastle-under-Lyme (Mr. Golding), in marked contrast to the right hon. and learned Member for Monklands, East and the hon. Member for Huddersfield, who gave the impression that the youth training scheme was no good. They are doing themselves no good by that, because the youngsters are voting with their feet, and they are doing no good for the scheme, which is of great benefit to tens of thousands of youngsters.
The right hon. and learned Member for Monklands, East quoted a leader in The Times. Perhaps I may quote the same leader:
"At the least, this"—
the youth training scheme—
"is the latest and biggest attempt by Mrs. Thatcher's Government to rescue a generation of British youth from aimless unemployment. At best here are the beginnings of a long-term effort to raise the quality and skills of the labour force to the levels of our trading competitors … Judgment on the YTS must, of course, be deferred: the scheme has not deserved the early drizzle of carping it has had—negative complaint of the sort that often greets any plan of social reform that is patently less than perfect. By September next it will be possible to reach a conclusion."
That puts The Times leader into context.
I must assume that the Bill introduced by the hon. Member for Coventry, South-East (Mr. Nellist), supported by the hon. Member for St. Helens, North (Mr. Evans), is part of the Opposition's strategy towards the youth training scheme. I see no rebuttal of that from hon. Members on the Opposition Front Bench. The proposal in the Bill is that the scheme
"shall exclude trainees from involvement in production work."
That says goodbye to factories. It says also:
"No trainee shall be placed in a workplace not registered by the Factories Inspectorate"—
Mr. Nellist: On a point of order, Mr. Speaker. I apologise for returning to the same point that I was the only Member who has been here for the whole of the debate without being called, but the Minister is attacking me and a private Member's Bill that I have introduced. I have no opportunity to answer those allegations. What is your advice, Mr. Speaker?
Mr. Speaker: I have no advice to give the hon. Member, except to say that I have no power to stop the debate when the Minister sits down. The hon. Member might discuss that with his Whips.
Mr. Morrison: The quotation I gave means there will be no training in offices, shops or laboratories. The Bill is supported by the hon. Member for St Helens, North who, if my memory serves me correctly, is an employment spokesman. I must assume that the Bill is Opposition policy. But if the hon. Member wishes to rebut that and say that it is not Opposition policy, that is different.
Finally, the Bill says:
"Youth Training Schemes shall not be introduced into non-unionised workplaces."
That will say goodbye to a large chunk of the scheme. It would include a number—I cannot say how many—of the mode B1 schemes about which the Opposition feel so strongly.
The youth training scheme—
Mr. Andrew F. Bennett: What about real jobs?
Mr. Morrison: The hon. Gentleman knows perfectly well—I explained at the beginning of the debate the economic backdrop to jobs — that the youth training scheme is but one of the Government's training plans. It must be taken in context with the adult training strategy to which the hon. Member for Newcastle-upon-Lyme referred, and with the efforts that have been made to help the 18 to 24-year-olds under the community programme. I find it somewhat surprising that some Labour-controlled councils do not come forward as sponsors of the community programme, despite the fact that it is a genuine attempt to help the long-term unemployed.
We have still not heard from the right hon. and learned Member for Monklands, East what the reaction of his right hon. Friend the Member for Leeds, East (Mr. Healey) is, as the right hon. and learned Gentleman referred to his right hon. Friend's remarks in the April 1976 Budget debate as "gobbledegook". Which right hon. Gentleman is now stating official Opposition policy? In their White Paper in July 1977, the then Labour Government stated:
"The Government continues to regard the mastery of inflation as the precondition for success in returing to full employment."
I agree entirely with what they said then. That is why I invite the Opposition, as well as my right hon. and hon. Friends, to join me in the Lobby in support of our amendment.
Question put, That the original words stand part of the Question: —
The House divided: Ayes 191, Noes 301.

Division No. 172]

[7.7 pm

AYES

Alton, David

Cowans, Harry

Anderson, Donald

Cox, Thomas (Tooting)

Archer, Rt Hon Peter

Craigen, J. M.

Ashdown, Paddy

Crowther, Stan

Ashley, Rt Hon Jack

Cunningham, Dr John

Ashton, Joe

Dalyell, Tam

Atkinson, N. (Tottenham)

Davies, Rt Hon Denzil (L'lli)

Bagier, Gordon A. T.

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

Banks, Tony (Newham NW)

Deakins, Eric

Barnett, Guy

Dewar, Donald

Beggs, Roy

Dixon, Donald

Beith, A. J.

Dormand, Jack

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

Douglas, Dick

Bermingham, Gerald

Dubs, Alfred

Bidwell, Sydney

Duffy, A. E. P.

Blair, Anthony

Dunwoody, Hon Mrs G.

Boothroyd, Miss Betty

Eadie, Alex

Boyes, Roland

Eastham, Ken

Bray, Dr Jeremy

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

Brown, Gordon (D'f'mline E)

Fatchett, Derek

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

Faulds, Andrew

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

Field, Frank (Birkenhead)

Brown, Ron (E'burgh, Leith)

Fields, T. (L'pool Broad Gn)

Bruce, Malcolm

Foot, Rt Hon Michael

Buchan, Norman

Forrester, John

Callaghan, Jim (Heyw'd & M)

Forsythe, Clifford (S Antrim)

Campbell, Ian

Foster, Derek

Campbell-Savours, Dale

Foulkes, George

Canavan, Dennis

Fraser, J. (Norwood)

Carter-Jones, Lewis

Freeson, Rt Hon Reginald

Cartwright, John

Freud, Clement

Clark, Dr David (S Shields)

Garrett, W. E.

Clarke, Thomas

George, Bruce

Clay, Robert

Gilbert, Rt Hon Dr John

Cocks, Rt Hon M. (Bristol S.)

Godman, Dr Norman

Cohen, Harry

Golding, John

Coleman, Donald

Gould, Bryan

Concannon, Rt Hon J. D.

Gourlay, Harry

Conlan, Bernard

Hamilton, W. W. (Central Fife)

Cook, Frank (Stockton North)

Hardy, Peter

Cook, Robin F. (Livingston)

Harman, Ms Harriet

Corbyn, Jeremy

Harrison, Rt Hon Walter

874

Hattersley, Rt Hon Roy

Owen, Rt Hon Dr David

Haynes, Frank

Park, George

Healey, Rt Hon Denis

Parry, Robert

Heffer, Eric S.

Patchett, Terry

Hogg, N. (C'nauld & Kilsyth)

Pavitt, Laurie

Home Robertson, John

Pendry, Tom

Howells, Geraint

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

Hoyle, Douglas

Powell, Raymond (Ogmore)

Hughes, Dr. Mark (Durham)

Prescott, John

Hughes, Robert (Aberdeen N)

Radice, Giles

Hughes, Roy (Newport East)

Randall, Stuart

Janner, Hon Greville

Rees, Rt Hon M. (Leeds S)

Jenkins, Rt Hon Roy (Hillh'd)

Richardson, Ms Jo

John, Brynmor

Roberts, Ernest (Hackney N)

Johnston, Russell

Robertson, George

Jones, Barry (Alyn & Deeside)

Rooker, J. W.

Kennedy, Charles

Ross, Ernest (Dundee W)

Kilroy-Silk, Robert

Ross, Wm. (Londonderry)

Kinnock, Rt Hon Neil

Rowlands, Ted

Kirkwood, Archibald

Sheerman, Barry

Lambie, David

Sheldon, Rt Hon R.

Lamond, James

Shore, Rt Hon Peter

Lewis, Ron (Carlisle)

Short, Ms Clare (Ladywood)

Litherland, Robert

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

Lofthouse, Geoffrey

Silkin, Rt Hon J.

Loyden, Edward

Skinner, Dennis

McCartney, Hugh

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

McCusker, Harold

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

McDonald, Dr Oonagh

Smyth, Rev W. M. (Belfast S)

McGuire, Michael

Soley, Clive

McKay, Allen (Penistone)

Spearing, Nigel

McKelvey, William

Steel, Rt Hon David

Mackenzie, Rt Hon Gregor

Stewart, Rt Hon D. (W Isles)

McNamara, Kevin

Stott, Roger

McTaggart, Robert

Strang, Gavin

Madden, Max

Thomas, Dr R. (Carmarthen)

Maginnis, Ken

Thompson, J. (Wansbeck)

Marek, Dr John

Thorne, Stan (Preston)

Martin, Michael

Tinn, James

Mason, Rt Hon Roy

Walker, Cecil (Belfast N)

Maxton, John

Wardell, Gareth (Gower)

Maynard, Miss Joan

Wareing, Robert

Meacher, Michael

Weetch, Ken

Mikardo, Ian

White, James

Millan, Rt Hon Bruce

Wigley, Dafydd

Miller, Dr M. S. (E Kilbride)

Williams, Rt Hon A.

Mitchell, Austin (G't Grimsby)

Wilson, Gordon

Molyneaux, Rt Hon James

Winnick, David

Morris, Rt Hon A. (W'shawe)

Woodall, Alec

Morris, Rt Hon J. (Aberavon)

Wrigglesworth, Ian

Nellist, David

Young, David (Bolton SE)

Nicholson, J.

Oakes, Rt Hon Gordon

Tellers for the Ayes:

O'Brien, William

Mr. James Hamilton and

O'Neill, Martin

Mr. John McWilliam.

Orme, Rt Hon Stanley

NOES

Aitken, Jonathan

Brown, M. (Brigg & Cl'thpes)

Alexander, Richard

Browne, John

Alison, Rt Hon Michael

Bruinvels, Peter

Ancram, Michael

Buck, Sir Antony

Arnold, Tom

Budgen, Nick

Ashby, David

Bulmer, Esmond

Aspinwall, Jack

Burt, Alistair

Atkins, Robert (South Ribble)

Butcher, John

Baker, Nicholas (N Dorset)

Butterfill, John

Banks, Robert (Harrogate)

Carlisle, John (N Luton)

Bellingham, Henry

Carttiss, Michael

Bendall, Vivian

Chapman, Sydney

Best, Keith

Clark, Sir W. (Croydon S)

Bevan, David Gilroy

Clarke, Rt Hon K. (Rushcliffe)

Biffen, Rt Hon John

Clegg, Sir Walter

Body, Richard

Cockeram, Eric

Boscawen, Hon Robert

Colvin, Michael

Bottomley, Peter

Conway, Derek

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

Coombs, Simon

Boyson, Dr Rhodes

Cope, John

Braine, Sir Bernard

Corrie, John

Brandon-Bravo, Martin

Couchman, James

875

Cranborne, Viscount

Hunt, David (Wirral)

Critchley, Julian

Hunt, John (Ravensbourne)

Currie, Mrs Edwina

Hunter, Andrew

Dorrell, Stephen

Irving, Charles

Douglas-Hamilton, Lord J.

Jenkin, Rt Hon Patrick

Dunn, Robert

Jessel, Toby

Durant, Tony

Jones, Gwilym (Cardiff N)

Dykes, Hugh

Jones, Robert (W Herts)

Edwards, Rt Hon N. (P'broke)

Joseph, Rt Hon Sir Keith

Eggar, Tim

Kershaw, Sir Anthony

Emery, Sir Peter

Key, Robert

Fairbairn, Nicholas

King, Roger (B'ham N'field)

Fallon, Michael

King, Rt Hon Tom

Farr, John

Knight, Gregory (Derby N)

Favell, Anthony

Knight, Mrs Jill (Edgbaston)

Fenner, Mrs Peggy

Knox, David

Finsberg, Sir Geoffrey

Lamont, Norman

Fletcher, Alexander

Lang, Ian

Fookes, Miss Janet

Lawler, Geoffrey

Forman, Nigel

Lawrence, Ivan

Forsyth, Michael (Stirling)

Lawson, Rt Hon Nigel

Fowler, Rt Hon Norman

Lee, John (Pendle)

Fox, Marcus

Leigh, Edward (Gainsbor'gh)

Fraser, Peter (Angus East)

Lennox-Boyd, Hon Mark

Freeman, Roger

Lewis, Sir Kenneth (Stamf'd)

Fry, Peter

Lilley, Peter

Gale, Roger

Lloyd, Ian (Havant)

Gardiner, George (Reigate)

Lloyd, Peter, (Fareham)

Gardner, Sir Edward (Fylde)

Lord, Michael

Garel-Jones, Tristan

McCrindle, Robert

Glyn, Dr Alan

McCurley, Mrs Anna

Goodhart, Sir Philip

MacGregor, John

Goodlad, Alastair

MacKay, Andrew (Berkshire)

Gorst, John

MacKay, John (Argyll & Bute)

Gow, Ian

Maclean, David John.

Gower, Sir Raymond

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

Grant, Sir Anthony

McQuarrie, Albert

Greenway, Harry

Madel, David

Gregory, Conal

Major, John

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

Malins, Humfrey

Griffiths, Peter (Portsm'th N)

Malone, Gerald

Grist, Ian

Maples, John

Gummer, John Selwyn

Marland, Paul

Hamilton, Hon A. (Epsom)

Marshall, Michael (Arundel)

Hamilton, Neil (Tatton)

Mates, Michael

Hampson, Dr Keith

Mather, Carol

Hanley, Jeremy

Maude, Hon Francis

Hannam, John

Mawhinney, Dr Brian

Hargreaves, Kenneth

Maxwell-Hyslop, Robin

Harvey, Robert

Mayhew, Sir Patrick

Haselhurst, Alan

Mellor, David

Havers, Rt Hon Sir Michael

Merchant, Piers

Hawkins, C. (High Peak)

Meyer, Sir Anthony

Hawkins, Sir Paul (SW N'folk)

Mills, Iain (Meriden)

Hawksley, Warren

Mills, Sir Peter (West Devon)

Hayhoe, Barney

Miscampbell, Norman

Hayward, Robert

Mitchell, David (NW Hants)

Heath, Rt Hon Edward

Moate, Roger

Heathcoat-Amory, David

Monro, Sir Hector

Heddle, John

Montgomery, Fergus

Henderson, Barry

Moore, John

Hickmet, Richard

Morris, M. (N'hampton, S)

Hicks, Robert

Morrison, Hon P. (Chester)

Higgins, Rt Hon Terence L

Moynihan, Hon C.

Hill, James

Mudd, David

Hind, Kenneth

Murphy, Christopher

Hirst, Michael

Neale, Gerrard

Holland, Sir Philip (Gedling)

Needham, Richard

Holt, Richard

Nelson, Anthony

Hooson, Tom

Neubert, Michael

Hordern, Peter

Newton, Tony

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

Nicholls, Patrick

Howell, Rt Hon D. (G'ldford)

Norris, Steven

Hubbard-Miles, Peter

Onslow, Cranley

876

Oppenheim, Philip

Stevens, Lewis (Nuneaton)

Oppenheim, Rt Hon Mrs S.

Stevens, Martin (Fulham)

Osborn, Sir John

Stewart, Allan (Eastwood)

Ottaway, Richard

Stewart, Andrew (Sherwood)

Page, John (Harrow W)

Stewart, Ian (N Hertf'dshire)

Page, Richard (Herts SW)

Stokes, John

Parkinson, Rt Hon Cecil

Stradling Thomas, J.

Parris, Matthew

Sumberg, David

Patten, John (Oxford)

Taylor, John (Solihull)

Pattie, Geoffrey

Taylor, Teddy (S'end E)

Pawsey, James

Tebbit, Rt Hon Norman

Peacock, Mrs Elizabeth

Temple-Morris, Peter

Percival, Rt Hon Sir Ian

Terlezki, Stefan

Pink, R. Bonner

Thomas, Rt Hon Peter

Pollock, Alexander

Thompson, Donald (Calder V)

Porter, Barry

Thompson, Patrick (N'ich N)

Powell, William (Corby)

Thorne, Neil (Ilford S)

Powley, John

Thornton, Malcolm

Prior, Rt Hon James

Thurnham, Peter

Proctor, K. Harvey

Townend, John (Bridlington)

Raffan, Keith

Townsend, Cyril D. (B'heath)

Raison, Rt Hon Timothy

Tracey, Richard

Rathbone, Tim

Trotter, Neville

Rees, Rt Hon Peter (Dover)

Twinn, Dr Ian

Renton, Tim

van Straubenzee, Sir W.

Rhodes James, Robert

Vaughan, Sir Gerard

Ridley, Rt Hon Nicholas

Viggers, Peter

Rippon, Rt Hon Geoffrey

Waddington, David

Roberts, Wyn (Conwy)

Wakeham, Rt Hon John

Robinson, Mark (N'port W)

Waldegrave, Hon William

Roe, Mrs Marion

Walden, George

Rost, Peter

Walker, Bill (T'side N)

Rowe, Andrew

Wall, Sir Patrick

Rumbold, Mrs Angela

Waller, Gary

Ryder, Richard

Ward, John

Sackville, Hon Thomas

Wardle, C. (Bexhill)

St. John-Stevas, Rt Hon N.

Warren, Kenneth

Sayeed, Jonathan

Watson, John

Shaw, Giles (Pudsey)

Watts, John

Shaw, Sir Michael (Scarb')

Wells, Bowen (Hertford)

Shelton, William (Streatham)

Wells, John (Maidstone)

Shepherd, Richard (Aldridge)

Wheeler, John

Shersby, Michael

Whitfield, John

Silvester, Fred

Wiggin, Jerry

Sims, Roger

Wilkinson, John

Skeet, T. H. H.

Winterton, Mrs Ann

Smith, Sir Dudley (Warwick)

Winterton, Nicholas

Smith, Tim (Beaconsfield)

Wolfson, Mark

Soames, Hon Nicholas

Wood, Timothy

Spence, John

Woodcock, Michael

Spencer, D.

Yeo, Tim

Spicer, Jim (W Dorset)

Younger, Rt Hon George

Spicer, Michael (S Worcs)

Squire, Robin

Tellers for the Noes:

Stanbrook, Ivor

Mr. Tim Sainsbury and

Steen, Anthony

Mr. Douglas Hogg.

Stern, Michael

Question accordingly negatived.
Question, That the proposed words be there added, put forthwith pursuant to Standing Order No. 33 (Questions on amendments) and agreed to.
MR. SPEAKER forthwith declared the main Question, as amended, to be agreed to.
Resolved,
That this House believes that the most important way in which the problems of the young unemployed can be overcome will be by a general improvement in the economy; therefore welcomes the encouraging signs of economic recovery; and recognises that the employment prospects of the younger generation will be greatly enhanced by the Government's considerable range of special employment and training measures.

Care of the Elderly
Mr. Speaker: I have selected the amendment in the name of the Prime Minister.
7.20 pm
Mr. Michael Meacher: I beg to move,
That this House condemns the falling standards of provision for the elderly over recent years and deplores the severe cut-back in resources relative to need now being imposed by the Government on community care; and calls upon this Conservative Government to give priority to improving the quality of life of the elderly rather than adding to the advantages of the rich.
It is rightly said that the key test of a civilised society is its treatment of its elderly people. By that standard, in terms of the manifest collapse of community care that we are witnessing, Thatcherite society has lamentably and tragically failed. The quality of life for elderly people is measured not simply, or even mainly, in terms of the pension level, but by the adequacy of a range of services that can make life in old age dignified and fulfilling.
The motion draws attention to the deficiency in those services. It is widely recognised in the House and outside that the number of elderly people, particularly of advanced age, has been increasing year by year; hence the need for increased services. However, it is less well recognised that some crucial services for the elderly have been cut even in absolute terms. An example of that is the provision of residential accommodation. In 1978 there were 118,000 elderly residents, but by 1982 that figure had been reduced to 116,800. The same pattern of absolute decline is reflected in the important meals on wheels service. In 1978, 41·
4 million meals were served, but that figure was reduced in 1982 to 40·3 million. That is not a large drop, but it is significant in absolute terms.
That picture gives a falsely optimistic impression, because the figures take no account of the rising number of elderly people, with their increasing need for such services. That criterion—I do not think there will be disagreement about it for assessing what is actually happening — was used by the Social Services Select Committee, which said in its definitive study in 1982:
"Between 1975–76 and 1980–81, home help hours of service to those over 75 failed by 8 per cent. to keep pace with the growing numbers of elderly, and meals served to those over 75 fell by 11·6 per cent."
The Committee could have added that, on the same basis, residential care places failed to keep pace with the growing demand by 10·2 per cent. By any standards, those figures reveal a serious decline in key services for pensioners in recent years.
The Government's defence is that a real growth of 2 per cent. per year in personal social services is sufficient to meet rising demand and that that has been achieved, broadly speaking, since 1978. However, all the independent studies have concluded that that is a substantial underestimate of the minimum required to maintain existing standards.
The most thorough analysis is that undertaken by Professor Webb and Mr. Wiston, which I am sure the Minister has at his fingertips. According to them, in their conclusion to a memorandum to the Social Services Select Committee report, given other demands from social services departments, but especially rising unit costs, a 2 per cent. growth is insufficient to maintain absolute levels
878
of provision. I stress the words "absolute provision". It is certainly not enough to provide a constant level of service output to take account of rising demand.
The minimum growth required to preserve existing standards, let alone produce any improvements, was estimated by the Association of Directors of Social Services in the 1982 report at from 4 to 6 per cent. real growth per year. The association is an important witness in our debate. The report says that the figure would only begin to reflect the type of service development required to prevent standards from dropping. In other words, that is the very minimum necessary. The report shows how far short the Government's provision is of the 2 per cent. growth estimate.
The Association of Directors of Social Services reported in December 1983:
"If the results of our five annual surveys are taken together the resources of personal social services have been reduced by 4 per cent. and, measured against increased demand, have probably fallen 10 per cent. below those some impartial observers believe minimally desirable".
The Association's general conclusion was that the standards of provision being meted out to the elderly were well below what a rich civilised society should tolerate. It said that it was "truly amazing" that the Government allowed them to continue. That is indeed amazing, until we realise that preserving or improving social services for pensioners is hardly one of the Government's highest priorities.
Another disquieting aspect of this fundamental failure to keep up with the demand is that pensioners get the services they need depending upon the accident of geography, of where they live. I hope I have proved that 2 per cent. real growth is inadequate, but Professor Webb and Mr. Wiston found that almost one fifth of social services departments in England failed to achieve even that low rate of growth. In other words, the Government do not keep a check on minimum standards. I emphasise that provision has fallen back alarmingly in some areas. The Department of the Environment audit survey in March 1983 found an immense variation in local authority spending on social services, out of all proportion to what could be justified with a balanced distribution of national resources.
Spending on the elderly 'was found to vary by plus or minus 37 per cent. in the four local authority areas surveyed. There could scarcely be a clearer demonstration of the Government's failure to enforce and monitor minimum standards, which are at present abysmal. A recent survey showed that an increase of no less than 32 per cent. in the number of home helps, perhaps the most crucial service to the elderly, was needed in Birmingham.
The apparent reduction in services might matter a great deal less if the Government were prepared to admit their past failings and put them right. However, they are doing exactly the reverse, and are not aiming at a gross figure of 2 per cent., or even a zero standstill. Personal social services will fall in real terms by 2·5 per cent. next year according to figures published in the public expenditure White Paper. Translated into the reality of ordinary people's lives, that means a drastic cut, at a time of increasing need, in residential provision, day care places, home helps, district nurses and the meals on wheels service. When the Government are boasting about 3 per cent. economic growth, that is the brutal measure of how much they are deserting the elderly.

879
However, even that conclusion, which is confined to demographic pressures, does not take account of two other crucial developments, which are making dramatically worse the standard of services to the elderly. Neither is new. However, they are important points to make in the context of this debate. The first is hospital closures. There have been 155 since the Government came to power. About 30 hospitals have been built, so there has been a net loss of about 125. That means that a huge number of elderly people are being dumped in the community. "Dumped" is an ugly word to use, but it is an ugly situation. Those people are being dumped in the community, where all too often no one is able to look after them adequately.
There is a second arm to the pincer. Not only are there more elderly patients each year—that is a demographic fact, at least to 1985–86 — especially in the over-75 age group, not only are district health authorities being forced by Government cuts to decant elderly people out of closed hospitals and geriatric wards back in to the community—
The Minister for Health: No.
Mr. Meacher: The Minister will have a chance to reply. That is the experience all over the country.
Mr. Clarke: Rubbish.
Mr. Meacher: Last Friday I was at Thornton View hospital in Bradford. Some 59 frail, elderly geriatric patients are in a hospital that the district health authority has already decided to close, against the wishes of the overwhelming majority of the people of Bradford. The Minister has to take a decision whether to ratify that. I hope that he will tell us whether such hospitals will continue to be closed. There are 59 frail, elderly people there, for whom there is no alternative hospital accommodation. There are not enough carers in the community to look after that number of people.
Mr. Clarke: The hon. Gentleman knows that Thornton View is an old poor law institution. I forget how long ago it was built, but I do not think that it was built in this century. The discussion in that district is about whether the patients should continue to be cared for there or whether better accommodation can be found in more modern hospitals elsewhere. Ministers are looking at the proposal that the district has made. I assure the hon. Gentleman that any decision taken about the elderly in that area will be on the basis of improved services, not bad services. Most of the hospitals that the hon. Gentleman has talked about are old hospitals that are being closed because they were never fit to cater for people in this day and age.
Mr. Meacher: I am wholly in favour of the closure of hospitals when there is an alternative of better hospitals and better provision, but the point is that that does not happen. It has not been the case in 155 hospitals that have been closed. I hope that the Minister will take this point on board. Perhaps my hon. Friend the Member for Bradford, West (Mr. Madden), who represents that area, will emphasise it when he winds up. The people in Bradford and the existing hospital provision cannot cope better for those 59 frail, elderly people anywhere else. Even bearing in mind the age of that hospital, it would be better if that provision were upgraded until better provision could be made available.
880
I ask the Minister to accept that not only are there more elderly patients, not only are many being pushed back into the community without adequate community care, but local authorities are being forced by cuts in the rate support grant and by grant penalties to chop community care for the elderly and other needy groups—at the very time when, for the other reasons that I gave, demand for community care is rising faster than it has for many decades.
The victims of that deliberate squeeze on resources—not by the Department of Health and Social Security but by the Treasury—are the elderly themselves, plus those who are involuntarily forced into the caring role to look after them. In the majority of cases, that means women. If they have not already been made redundant by the Government's economic policies, they are now being forced to give up their jobs by the Government's social policies because, in all too many cases, there is no one else to whom elderly dependants can turn for care.
If the Minister does not like my views, I shall quote those of Age Concern. Perhaps the Minister will take them on board. Age Concern states:
"Community care must not be seen as a cheap option. It will only be cheap if the state relies on the good will and love alone of those who are caring, without the backup services in the community. Community care can be as expensive as other forms of care."
I entirely agree with this:
"It should be viewed as a desirable goal, not as a cost-cutting exercise."
But that is exactly how it has been regarded by the Government.
The Government's White paper "Growing Old" is widely regarded as the most shallow social policy document of recent years. At least it admitted:
"Care in the community must increasingly mean care by the community."
There we have it. Behind the cosy refuge of community care, there is the hard-nosed reality. The Government are doing less and less for some of the most frail people in our society, including families. Female carers in particular are being forced to pick up the responsibility now being abdicated by the Government.
I hope that the Minister accepts this. The physical, emotional and financial strain on carers is often truly horrendous, as many examples from the Association of Carers testify which have been sent to me and which I shall send to him. Given the Government's alleged support for the family and voluntary action, their lack of meaningful back-up for carers is almost breathtaking. They have failed to extend the invalid care allowance to married women, although the cost would be only £60 million, which is a tiny fraction of the cost if that care were provided by social service departments. Moreover, even where the Department of Health and Social Security is finally taking an initiative—I think that the name of the exercise is "supporting the informal carers" — it is clear that improvements in services for carers and their dependants are to be achieved without any significant increase in resources. The limit to the Government's commitment is all too apparent when they talk of the way forward as being by the extension of good practice and the more effective use of existing resources.
Of course, the Government will say that extra resources are not available. They have said that so many times. Making extra resources available has never been much of a problem for the Government when it is a matter of

881
dealing with the rich. I shall give a few facts. No less than £2,600 million has been doled out in tax reductions to the rich by the Government since 1979. No less than £9,000 million is being paid out this year alone in tax reliefs, on pension contributions, on life assurance, on mortgage interest and on investment income surcharge exemption, and the main beneficiaries are the rich. In addition, billions of pounds are now being lost to the Exchequer because so-called fringe benefits that can run as high as £12,500 on top of a director's salary of £25,000 a year remain untaxed.
Providing improved care for the elderly is not a financial impossibility. It is a matter of priorities. Because we in the Opposition believe that it is wholly objectionable that huge tax handouts should continue to be showered on the rich at the expense of cutting back basic services for the elderly, because we believe that it is intolerable that elderly people are being dumped in the community when people cannot look after them, and because we believe that community care must not be a cheap option in which families, especially women, are victimised with overloaded and unfair responsibilities, I call on all those in the House who share our concern for a higher social and financial priority for decent and civilised standards of care for all our elderly to vote for the motion.
7.40 pm
The Minister for Health (Mr. Kenneth Clarke): I beg to move, to leave out from "House" to the end of the Question and to add instead thereof:
`welcomes the steps the Government have taken in a period of economic difficulty to provide elderly people with improved financial support and to continue the development of health and personal social services for them; and pays tribute to the professional staff and volunteers who play a central and crucial role in the care and support of elderly people and their families.'.
I begin on a non-contentious note. All hon. Members will agree that we are facing the consequences of the rise in the number of elderly people in the population. That must be the background to all our deliberations about the elderly in the next 10 or 20 years. The number of people aged over 65 is increasing rapidly and will continue to do so. In England there are now just over 7 million people aged over 65. The latest projections show that by the year 2001 there will be 7·5 million. The proportion will have risen from 15·2 per cent. of the total population to 15·4 per cent. Not only will the number of those over retirement age rise over the next 20 years, but the numbers of those aged over 75 will grow considerably, and the number of those in the over-85 age group will rise faster still. At the moment the percentage of the total population aged over 75 is 5·9 per cent. By the year 2001, the proportion will be 7·3 per cent.
We are all agree that ours is a civilised society which aims to provide a decent level of care and support for everyone in need. Over the next 20 years we must therefore fulfil our duty to give care to all who need it among the growing number of the very elderly. That is the biggest substantial challenge facing the welfare state over the next 10 or 20 years.
Dr. Dick and the Health Advisory Service have produced a booklet about this challenge entitled "The Rising Tide". There is indeed a rising tide of the numbers of elderly in our society, which will pose fresh problems for the Health Service, the community services, the voluntary bodies and the welfare state. We must face that problem, but we must not be overwhelmed by it or
882
misunderstand its nature and scale. The fact that more of us live longer is good news, not bad. It is a mark of the success of the welfare state in raising health and living standards. The picture of growing numbers of elderly people is not a cause for despair. For instance—to take one end of the political spectrum—it is not necessary to talk of the impossibility of financing the welfare state or of meeting the challenge.
The cost to the working population of the current pension provision, projected forward on present policies, would tend to fall by the turn of the century rather than increase. On the other hand, it is equally ludicrous to talk about having to face the problem against a background of massive underfunding. Let us consider the welfare state that we maintain today. Despite the description given by the hon. Member for Oldham, West (Mr. Meacher), the budget of the National Health Service is over £15 billion, and the total budget for social security is some £35 billion. The hon. Gentleman suggests that the answer to every problem is to spend more billions of pounds, although he does not quantify how many billions would be required. That would be an absurd way of facing the challenge of the rising numbers of the elderly. The bill would cripple the productive economy, beggar the working population and thereby damage the real interests of the elderly.
Despite the hon. Gentleman's constant endeavour to produce studies that disprove this fact, spending on health and social security by the DHSS represents, under the present Government, about 30 per cent. of total public spending. Over half that massive bill is, in one way or the other, for the care of pensioners and the elderly.
The hon. Gentleman tries to portray modern Britain — Thatcherite Britain, as he calls it — in Dickensian terms. He conjures up a picture of abject poverty and social injustice. He uses language and statistics in a manner that reminds me of the Fabian tracts of the 1890s. However, he is talking about a modern welfare state. It is 40 years since Beveridge, and the nature of the problem has changed. It is the problems of the next 10 or 20 years that we have to tackle, and tackle sensibly.
For some, age brings poverty, frailty and ill-health; but it does not bring them to all. Very many people in their sixties and seventies, and some in their eighties, now lead happy, active, vigorous and even quite prosperous lives. In a conversation earlier today, my hon. Friend the Member for Mid-Kent (Mr. Rowe) reminded me that if one looks at the wider scene, one finds that they also tend to run super-powers. There are some extremely active elderly men among those who govern the world today.
As a group and on average, the elderly people of today and tomorrow are the fittest generation of elderly people that there has ever been. Growing numbers of them are fortunate enough to have been able to acquire some savings, or occupational pension rights on top of their modern state retirement pensions. That makes them—as a group and on average—the most prosperous elderly generation that there has ever been. That will continue to be so.
However, the expectations of today's and tomorrow's elderly people are also rising. Many of today's elderly people were young before the first world war. Tomorrow's elderly people will expect a higher standard of life. If one sets aside some of the hon. Gentleman's lobbying claims, I think that, in reality, rising expectations are posing as many problems as rising need.

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As a boy, I walked every day past a workhouse built in Napoleonic times. It housed the derelict and poverty-stricken elderly of that part of Nottingham. By the time I reach old age, if I live that long, all my contemporaries will expect a way of life vastly better than that. They will expect that a long, comfortable and enjoyable retirement will form an important part of their lives.
With the changed background to old age and the changing expectations of old age, we must not plan as though the whole aim of policy must be to produce a world of institutions, long-term hospital care, social workers, means-tested benefits and bus passes. That is the vision of the future that the hon. Gentleman tends to produce. What we have to do is to increase the proportion of elderly people who are fortunate enough to be independent and self-sufficient and who are able to enjoy fit and active lives. We must also care in a proper way—the way that they prefer — for those who, because of age or misfortune, are not able to care for themselves.
Mr. Eric S. Heifer: Is the right hon. and learned Gentleman aware that people like my mother had one great fear—the fear of going to the workhouse? Is he further aware that, although in 1945 the Labour party lifted that fear from millions of ordinary working people, that fear is now returning among elderly working people because of the policies of the Government?
Mr. Clarke: The hon. Gentleman's first point is true. The policies of successive Governments and the development of the modern welfare state have taken those fears away. The hon. Gentleman's second assertion is ridiculous. It is the rhetoric of the Liverpool Labour party and bears no relation to the day-to-day life of elderly people.
Large numbers of elderly people are fitter and better off than ever, but some still suffer from poverty and ill health, and need proper care. We need policies that match the expectations of the elderly—policies suitable for 1984, not 1945, which are not still based on fighting the old battles. The aim of all our policies must be to enable as many people as possible—
Mr. Heifer: They are the same battles.
Mr. Clarke: The hon. Gentleman may not have moved on since 1945, but life has.
Mr. Heifer: They are the same battles, and we are fighting the present Government.
Mr. Clarke: By attributing to me the problems of 1945 the hon. Gentleman is failing to notice that quite a lot has changed since then. Our policies must be aimed at today's problems. We must enable as many people as possible to live independently as part of the general community for as long as possible.
Mr. Roland Boyes rose—
Mr. Clarke: We need a balance of services to enable the growing elderly population to live their lives in the community and to provide the care needed when age and infirmity finally make that impossible. We must make living as part of the community easier and to help to prolong that for more people.
Mr. Boyes: Will the Minister give way?
Mr. Clarke: I will in a second. Perhaps the issues of 1945 can be conducted in a more orderly way by hon. Members being given way to at a suitable point.
We must keep necessary periods of hospital care for the elderly as few and as short as possible. We must keep the need for long-term residential care as low as possible and we must provide the best possible quality of life for those who need long-term care in hospital or in a residential or nursing home. What I have described is a package of objectives aimed at supporting more people in the community, and enabling them to be self-sufficient and to lead fit and active lives longer. The objectives are not based on preserving poor law institutions in Bradford or on trying to refight the battles of 1945 in one hon. Member's far away Socialist youth.
Mr. Boyes: I am grateful to the Minister for giving way. As a former assistant director of social services I agree with the Minister's aim of trying to keep people in the community and out of residential homes. I am not talking about 1945 but 1985. I cannot see how it is consistent for the Minister to carry out that programme while the Government are imposing rate capping. The Association of Directors of Social Services calculates that the result of the Government's policies will lead to 50,000 fewer meals on wheels, 50,000 fewer home help hours and 7,000 people having to be found extra resources to keep them out of residential accommodation. Although I understand the Minister's line, where will the cash to pay for it come from if the Government are to take the money away from local authorities?
Mr. Clarke: I am grateful for the hon. Gentleman's support for the general approach of keeping more people in the community. He is a younger Socialist who seems to have moved more with the times. The Association of Directors of Social Services has, to the best of my recollection, made forecasts every year during the Government's term of office and, understandably, it puts in hair-raising forecasts in response to the Government's demands for greater restraint and careful use of local authority finance. Its forecasts never prove correct as I hope to show shortly.
Mr. David Winnick: Will the Minister give way?
Mr. Clarke: If I can remain succinct hon. Members will have. a chance to make a speech and if I give way too often I shall prevent hon. Members from speaking.
I should now like to deal with income support. One of the first things that one considers is pension levels, although they have not been heavily laboured today. There is still far too sharp a drop in income for people who retire. That gap is being steadily closed for more people by the accumulation of savings and occupational pensions. The Government have complied fully with our election commitment to maintain the purchasing power of the retirement pension. Between November 1978 and November 1983 the pension increased by 74 per cent. During the same period the retail price index increased by 70 per cent. Therefore, the purchasng power of the state pension has been kept ahead of prices and its real purchasing power improved modestly.
For people on supplementary benefit who have to look beyond the state's pension to maintain their basic living

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standard we have enabled people with modest savings—they are often the people who miss out worst in today's welfare state conditions — to accumulate and retain rather more benefit from their savings. The amount of savings that they can have and still qualify for supplementary benefit was raised in 1982 from £2,000 to £2,500 and again in 1983 from £2,500 to £3,000. From 1983 they could also retain £1,500 of life assurance policies without jeopardising their entitlement to supplementary benefit. For the poorest pensioners we have considered heating costs. We have a much better record on that than the Government whom we succeeded. This year we are spending £350 million on special heating costs for the elderly. Only £124 million was spent in that way when we took over in 1979. We are spending £100 million more in real terms on helping elderly people with fuel bills. We are helping 1·5 million pensioner households.
Our record on state pensions and help for the poor is good. We intend to take a broader look at the needs of all pensioners and how the growing number of pensioners ought to provide for their retirement. In November 1983 my right hon. Friend the Secretary of State announced an inquiry into the provision for retirement. It has started work and will consider how to maintain adequate financial support for elderly people.
In addition to financial support, I agree that we must consider the type of community care and support that is given to elderly people in or near their homes by family, friends, local authority social services and voluntary bodies. For all our anxiety and for all the battles about institutions and hospitals, 95 per cent. of the over-65s live outside an institution and in the community. I agree with the hon. Member for Oldham, West that many of them look to their own families and friends for support. I entirely agree with his sentiments about the need to examine what we can do to help carers—that is a perfectly convenient jargon word—who find that they take on the strain of looking after elderly people. They need all sorts of support. They need respite care whereby the elderly person goes to suitable accommodation for a short time while the carer has a break. There therefore need to be home helps, day centres, luncheon clubs and the rest.
The project supporting the informal carers is being sponsored by the development group of our own social work service. The project resulted in a two-day seminar at Oxford in June 1983 to pool ideas about the needs of carers and the ways in which to meet them. There was a national day conference on the same theme in London on 2 November to stimulate debate. My hon. Friend the Under-Secretary of State addressed the conference. A resource document about the schemes and ideas which are currently in practice for helping informal carers has now been produced. I agree that we must now move on from pooling ideas and decide what we can do to turn policy into action.
Mr. Michael McGuire: Does the Minister agree that some of the most successful schemes for keeping old people in the community often involve moving them into their own small houses? Many of them occupy huge council houses, which are now too big for them, and they need to be moved into modern bungalows or similar housing where there is a warden and the houses are linked by a simple communication system. Elderly people therefore retain their privacy and their families are
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assured that they are being looked after in the best sense of that word. Insufficient attention is paid to that. If the Minister announced help for local authorities to do that we should be much happier than we are hearing him bandying statistics about and referring to 1945 and what has happened since.
Mr. Clarke: We all agree that sheltered accommodation for elderly people is important. I agree that most councils are now pressing ahead with providing such accommodation with wardens, alarm systems and so on. Local authority housing programmes have changed substantially. The most important part of local authority housing provision in areas where there is no longer a demand for housing for families is concentrated less on council house estates and more on specialist care. I do not have the statistics and, bearing in mind the hon. Gentleman's warning, I shall not give them. I think, however, that he will find that provision of sheltered accommodation is increasing steadily. It is certainly happening in my constituency and I hope that the same is true for his.
Supporting services are in large part provided by local authorities. The hon. Member for Oldham, West got back to his usual theme. He analysed the spending of local authorities and social services and compared it with the most ambitious desire for increases in spending that he could find.
The fact remains that 1983–84 local authority budgets show an overall increase on social service spending of 12·5 per cent. in constant terms compared with 1978–79. I accept, however, that increases in expenditure are not always matched by increases in service provision. The hon. Gentleman mentioned, as a throwaway line, the increase in unit costs. That means that local authorities may be spending more money without looking after more people. That is sometimes necessary. Sometimes the reasons for it bear closer examination.
The hon. Gentleman then gave a somewhat selective list of figures and percentage changes in certain aspects of local authority care. I could be equally selective and say that the 1981 figures show that in our first two years of office there was a 6·3 per cent. increase in the number of home helps employed and a 14·7 per cent. increase in the number of people visited by community nurses compared with the position in 1979.
One may argue about the adequacy of what the hon. Gentleman described as the Government's 2 per cent. growth provision. There has certainly been such a growth in resources for social services. In our projections for local government spending we accept the increased demand for social services by giving a 2 per cent. lead for personal social services compared with other services.
I prefer to consider the matter, as the hon. Gentleman usually does not, not in terms of what is being paid for a service but in terms of the service produced with the money provided. It is pointless to judge a local authority's achievement merely in terms of the amount of money that it has succeeded in consuming on that service in a given year. There are bound to be difficulties as we live in the real economy and we cannot print money, so it is useless for the hon. Gentleman, his researchers or anyone else to assume that policy determines resources.
We must consider experimental alternative patterns of service such as the Kent community care scheme, which

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has shown that better patterns of care can be provided at little or no extra cost by developing new and imaginative ways of providing services.
Although all social services departments are striving to do their best despite difficulties, some are extremely badly organised. At present, very little is done to spread good practice from one authority to another. Through the projected inspectorate, or in other ways, we must try to ensure that the performance of local authorities and the value for money provided is brought up to the level of the best so as to keep up with demand.
Mr. Meacher: Before the Minister becomes too complacent about his record, will he explain how he expects to achieve a greater volume of provision while spending less money? Will he confirm my contention that there is to be a 2·5 per cent. reduction in personal social services expenditure this year? How do the Government justify that when they claim that there is a 3 per cent. growth in the economy?
Mr. Clarke: There must be a reduction in overall local government spending if the rate burdens are not to cripple industry and cause unacceptable levels of unemployment to continue in some parts of the country. That is a perfectly worthwhile and desirable social aim. How the economies are effected is a matter of judgment for local authorities. They must choose their own priorities and deliver their most important services in a cost-effective way.
We prefer to compare our projections for local authority expenditure each year with the targets that we set in the past. The best-run authorities have achieved those targets and thus do not face draconian reductions. Those in trouble with the Government, who are affected by the targets and rate capping, are spending money in a wasteful way on the whole range of services. When challenged on behalf of the public and the ratepayers, they try to persuade the public that desirable objectives such as social services or education are the only areas in which economies can be made. I do not believe that.
In addition to developing sensible, well managed social services provided by local authorities we must bring local authorities, health authorities and volunteers closer together so that they can collaborate in providing a range of services. We must do away with artificial barriers between the Health Service, local government and volunteers whereby people with different professional disciplines and loyalties sometimes come close to competing with one another to help the same people needing one range of services from them all. Our main weapon in improving collaboration is joint planning and joint finance. Each year we allocate funds to help authorities to launch personal social services schemes jointly agreed between health authorities and local authorities. Spending on that has greatly increased to more than £24 million this year—an increase of more that 50 per cent. compared with 1979. It also helps to develop joint planning by bringing the authorities together to spend the money in a desirable way.
We have also launched our new care in the community project which enables health authorities to allocate funds without limit of time to provide care in the community for people who would otherwise be long-term patients but
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who are better provided for in smaller units outside. We allocated £15 million for pilot schemes last year and 100 applications for pilot funding have already been received.
Going beyond the personal social services, elderly people are now living and finding care in private residential homes and nursing homes. There has been enormous growth in that area and it is an extremely important source of provision. We very much welcome the growth in investment and accommodation provided, as it happens, by the private sector, especially in terms of residential and nursing homes.
We must ensure, however, that the enormous increase in accommodation bought by the elderly for themselves is of an acceptable standard and thus constitutes a desirable increase in the total stock of places. Last year we legislated for residential care homes. We are giving local authorities greater powers to inspect all residential care homes not less than once a year. A code of practice is being drawn up by an outside group and we hope to produce regulations by May to allow local authorities to charge fees for the provision of a proper service.
We are now ready to take the next step of improving standards in residential nursing homes and ensuring that all meet the best standards. The Government have decided to issue fresh proposals to ensure good standards of care in private nursing homes. We intend to tighten the checks made by health authorities on such homes to ensure that all are kept close to the excellent standards that most already achieve. With the rapid growth in the number of elderly people, we need that rapid increase in private nursing homes and hospitals, which will have an ever more important role to play in providing comfortable accommodation and care for people in old age. It is all the more important, therefore, to ensure that the best standards are maintained and it is essential that health authorities should be able to use their powers of inspection and registration effectively. The powers were strengthened in the Health and Social Services and Social Security Adjudications Act 1983 — and tomorrow I shall issue guidelines for discussion as to how the new powers should operate.
The conduct of private nursing homes is governed by the Nursing Homes Act 1975, which requires that all private nursing homes, including private hospitals, be registered with the district health authority. The Act and associated regulations ensure the maintenance of adequate standards and facilities in all registered homes, subject to regular inspections by health authorities. With the 1983 Act we introduced several amendments to the 1975 legislation which, when implemented, will improve and strengthen it.
The guidelines to health authorities on which we are now consulting interested bodies propose a number of changes to registration and inspection procedures. They include, for example, making it an offence to describe, with intent to deceive, premises not registered with a health authority as a nursing home, maternity home or mental nursing home. Thus, if proprietors advertise a nursing home the public will usually be safe to assume in future that the home has been inspected and approved by the local health authority.
My right hon. Friend the Secretary of State for Social Services also intends to issue a direction requiring health authorities to enter and inspect any unregistered premises believed to be functioning as a nursing home. It is already a criminal offence to run a nursing home without being

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registered, and health authorities already have power to enter such premises if they believe that they are operating as nursing homes. We propose the unusual step of placing authorities under a positive obligation to enter such premises because we are concerned about the welfare of patients receiving nursing care which is not subject to the rigorous standards applied to registered nursing homes.
We are also creating for the first time a national list of cancelled registrations compiled from returns submitted by health authorities and local authorities giving the names of persons whose registration in respect of nursing homes, residential care homes and children's homes has been cancelled. This "black list" will help authorities to prevent people who have failed to maintain good standards in a home in one part of the country simply moving elsewhere to start again.
A small but significant part of the country's health care has always been provided by the private sector which, of course, includes the voluntary sector. The biggest contribution to health care by private and independent people and groups in this country is made by small nursing homes which in total look after well over 20,000 elderly people. We are anxious to ensure that further development should keep pace with growing demand and at the same time to protect the public by maintaining and improving standards.
I have covered the financial support, on which the Government have an excellent record, and personal social services, for which the case put by the hon. Member for Oldham, West can be demonstrated to be over-dramatised and based on insupportable claims that a service that is spending more money each year is somehow starved of funds. I have described what we are doing to encourage the growth of private residential homes and private nursing homes and to make sure that the right standards are maintained as that welcome growth takes place. I assure the House that our policies for the National Health Service place the greatest emphasis on developing care for the elderly, and that includes closing some of our older geriatric hospitals and providing more modern, suitable and upgraded care in better and more suitable wards.
Those are the ingredients of the decent caring policy for the elderly that is the aim of the Government. We have not been saving money in this sector, but have been changing policy and adapting it for today's generation of elderly. The rather old-fashioned diatribes from the Opposition Benches cannot dent our record and are not a constructive, realistic or helpful approach to the problems of the next generation of elderly in the next decade.
8.12 pm
Mrs. Renée Short: I am glad that we have an opportunity to give a little time to this problem. We have given much time to the young unemployed and it is time to look to the other end of the population. We are faced with a considerable increase in the number of elderly people through the rest of the century, but we have faced this problem before, so it is not a new one.
In 1901, if I can take the minds of some hon. Members back that far—mine will not go back that far—the population of the United Kingdom was just over 38 million, with 500,000 people over the age of 75—13 in every 1,000. Now the population is about 55·5 million with 3 million over the age of 75—56 in every 1,000.
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In 1900 there was virtually no care for the elderly, who relied entirely on their families. There was no National Health Service and it took the Labour Government of 1945 to introduce that. The rest of the population is now fairly well stabilised. Between 1971 and 1991, an increase of about 1 million is expected in the total population, but the number of elderly people is expected to rise by 500,000, which is about half the increase.
While the number of elderly people is rising, we have to remember that at the same time the birth rate is declining. In 1966, the birth rate was 950,000 but in 1978 it was 660,000. The working-age population, if we take that to be from 16 to 64, is about 60£5 per cent. At the start of the century, it was 61£3 per cent. By 1991, it will have risen slightly from its present level to 61 per cent., so the demographic trend will not be as threatening as everybody tries to make us believe, provided that those of working age are able to work. That is the key issue in our discussions on the problems of the elderly.
The Government must realise that the problem is not the number of elderly people, but unemployment among the working population. The working population consists of those who will provide the resources to care for the growing number of elderly people. Everybody accepts that the elderly are entitled to a share in the wealth of the country as they have made their contribution in the past. The Labour party's view is clearly stated in all its policy statements, including that on which it fought the last election—that the elderly should have a fair share of the increasing prosperity of the country. However, as I said earlier, we are not increasing prosperity at the moment.
To put it in a nutshell, we stand for a policy of providing sufficient money for an active and independent life after retirement and for freedom of choice as to how to spend it. However, we must face the fact that many old people cannot look after themselves and are without family or friends to help them, so they are forced to rely on what the community can or is willing to provide, with services such as home helps, meals brought to the home or residential or hospital care.
Such valuable support has declined under this Government, and the shortcomings and deficiencies of the system are clear for all to see. As my hon. Friend the Member for Oldham, West (Mr. Meacher) said, the Select Committee looked at this. However, the serious decline in the past five years has meant that many people are now saying that we cannot afford to do any more. I refute that. At the moment, only about 67 per cent. of the elderly population receive help during the year. Less than 4 per cent. — a minute proportion—regularly receive meals either in their own homes or in clubs or centres and only about 10 per cent. are visited by district nurses.
My hon. Friend referred to the guidelines laid down for the provision of services. The key services, where existing service provision falls short, are home helps, of which the provision is 12 per 1,000 elderly people. Some 200 meals per week per 1,000 elderly should be provided, and there should be one district nurse for every 2,500 to 4,000 of the total population. For day centres, there should be three to four places per 100 elderly people. Amazingly enough, there are no guidelines for chiropody, which is an important service for elderly people. If they have bad feet but cannot get them looked at, that is a major factor in making them stay at home.
The implementation of the Department's policy on domiciliary care rests with the local statutory authorities,

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which sometimes adopt different attitudes. They do not always do as either we or the Government want. They do not always wish to expand their services for elderly people. Many of them cannot do so because they cannot afford it and many of them have difficulty in recruiting the necessary staff to provide for elderly people either at home or in establishments such as day centres.
There are other difficulties, such as the closure of branch surgeries, which create considerable problems for elderly people, the closure of chemist shops and of sub-post offices, which the Select Committee examined during the last Government, and which creates many difficulties, especially in rural areas where the elderly rely on the sub-post offices for the collection of their pensions and for doing a great deal of their shopping.
We have much to do to provide better facilities. I am concerned about the provision of many services. There are old people in hospital wards, usually in the old hospitals over 100 years old. The Select Committee visited some on Merseyside—and I am not singling out Merseyside as the only place where this happens—when it was looking at the problem of medical education in the last Parliament.
We went to some hospitals where elderly people were kept in enormous barrack-like wards. Everything had to be tidy, every bedspread had to have not a single wrinkle, there were no pictures on the walls, no personal property and nothing to make the ward look bright or cheerful. What I might call the custodial attitude of many of the staff has been criticised in the past. The Department should take this problem on board to see what can be done to improve those 19th century establishments where we put so many of our old people.
In visiting that and other hospitals, the Select Committee discovered that the medical care of the elderly is almost always the responsibility of doctors from the Commonwealth, who have got into dead-end jobs, much to their concern, and who have no chance of getting out of the rut. Doctors and patients have extreme difficulty in communicating, which helps neither of them. It is high time that the Department did something about that. It has had the Select Committee report for some years, but not enough progress has been made.
The Under-Secretary of State for Health and Social Security (Mr. John Patten): In her balanced and evenhanded account of the position thus far, does the hon. Lady recognise — here I shall indulge in some statistics, because I know that the hon. Member for Oldham, West (Mr. Meacher) likes statistics—the considerable growth in medical manpower devoted to geriatric care since 1978? There has been an 11 per cent. increase in consultants, a 37 per cent. increase in senior registrars, and an 11 per cent. increase in nursing staff.
Mrs. Short: The Minister is trying to steal my thunder, because I was going to mention that point later. Of course, that has happened, but the conditions that I described still exist, and it is time that the Department did more to change the position altogether.
There is a similar problem in local authority homes for the elderly. Perhaps I should not refer to my area specifically, but when Members of Parliament or members of the public visit homes for the elderly, they will find that in the television room the chairs are ranged round the room, but that people are not sitting in groups chatting to
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each other. No one is reading or doing anything active or lively. The television may be on, but no one is looking at it. We must do something about that, because otherwise we shall be encouraging the progress of senility in mind and body. The Minister must give a lead in this and take the problem by the scruff of the neck, because it is a most dispiriting and discouraging experience.
During the next two or three decades we must not overlook the fact that many elderly people receive splendid support from their families. We should strengthen that support so that more elderly people can remain independent in their homes for as long as possible, but the Government must take on board the fact that some elderly people need four times as much health care and six times as much social service care as do the rest of the population. The growth for that increased care has not been allowed for. Unless it is, the position will deteriorate.
The message that we must get over is that health care for the elderly should start in middle age, before they become old. Poor diet and lack of exercise contribute to health problems in the elderly. Geriatric medicine in Britain is acknowledged as a model for many countries, and we have made enormous progress in this area. The United States is funding fellowships to enable some American physicians to train here in geriatrics, and many countries want British geriatricians to train their students and doctors and to help them to establish services. About 35 years ago Britain had no geriatricians. Now we have 400, training has developed and teaching departments are attracting some of our best graduates who, until recently, would have preferred to specialise in surgery. That is an encouraging trend.
However, the elderly, who represent about 14 per cent. of the population, occupy about half of the surgical, orthopaedic, genito-urinary and eye beds in our hospitals. That is a high percentage. Those aged over 75 often need more care and more social services. The good teaching departments cross the boundary between health and social services, which means that we must have more efficient use of resources. The Minister referred to the private sector, but it is interesting to note that private medicine contributes little or nothing to the care of the elderly.
We must urgently provide more short-term facilities in hospitals and residential homes to diagnose and treat patients and to provide relief for families. Special housing, full-time care and nursing, long-term hospital care and medical supervision are all areas where resources have not been adequate. If the Government would get Britain back to work, resources would be available and we could devote a greater share of what we earn to the care of the elderly. At present we spend a minute amount—only about 2 per cent. —on personal social services, which is far too low. Caring for others must be made a worthwhile job, regarded as something important and properly rewarded. We need more domiciliary services, more housing, more short-term care and a more imaginative and flexible system of long-term care for those who need it.
When the Select Committee examined the problems of the elderly, we were told that plans were well advanced for three experimental National Health Service nursing homes for the elderly, and that four hospitals have been designated as demonstration centres for the rehabilitation of the mentally ill, including the elderly. Perhaps the Under-Secretary of State will tell us what progress has been made with those experiments.

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With the proper management of our economy, we could do much more for the elderly to allow them to live better lives.
8.27 pm
Mr. Andrew Rowe: When the hon. Member for Oldham, West (Mr. Meacher) quotes figures about the number of residential places or the number of meals on wheels, and purports thereby to show that a decline is inevitably a decline in the standard of care, he is advocating a static position in the care being delivered. If it were true that community care was becoming a completely successful programme, the number of residential places might fall. Similarly, it is a source of considerable consolation to many hon. Members that the WRVS is about to carry out a survey on whether the admirable meals on wheels service, of which it provides about 46 per cent., is the sort of service that the elderly need. Our anxiety to discover whether we are giving people what they want means that we can look for changing patterns in health care.
Mr. John Patten: Does my hon. Friend recognise that some studies of the meals on wheels service, such as that recently conducted by Leeds university, show that many people use the service not for the meals provided, which are often not consumed, but for the social care that can be provided? It is up to the community, not necessarily local councils or the state, to ensure that people have the necessary company from their neighbourhood and the community.
Mr. Rowe: I am grateful to the Minister for pointing that out. I have reservations about the standard of company that can be offered by people running down the path, delivering a meal and racing back to the van to move on to the next person. It is right that the community should try to improve on that service, especially if the meal is not being eaten.
As you will know, Mr. Deputy Speaker, it was Cicero who said,
"Old age is honoured only on condition that it defends its rights, is subservient to no one and to the last breath rules over its domain."
These words are the motto and the inspiration of my county council's approach to the care of its rapidly growing elderly population. That approach has three main characteristics: innovation, value for money and cooperation with the voluntary sector. The fact that the county council is taking care of the amount of public money that it disburses is one of the only hopes of my constituency, which has unemployment running at between 16 and 18 per cent., to attract new jobs into the area. If it followed the kind of disbursement policies of many of the councils supported by Opposition Members, its chances of obtaining any new jobs and, therefore, any wider financial base, would disappear.
Mr. Jeremy Corbyn: Is this a serious contribution?
Mr. Rowe: On innovation, the community care scheme was one daring experiment which flew in the face of much received wisdom, not least that of the professional social workers who had an anxiety that a relationship based on payment rapidly becomes debased. Under the scheme, elderly people who are physically handicapped—and it is being used increasingly for mentally handicapped people — remain in their own homes, cared for by
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friends and neighbours who are able to perform these services because they receive a small sum of money in return.
It is a central tenet of Kent's philosophy that schemes are objectively monitored. It was reassuring when the social services research unit, itself a pioneering venture in Kent university, discovered that old people covered by the scheme were in better health, were livelier and were less lonely than those who were not so covered. Small wonder that the scheme has been widely copied outside Kent. The researchers also found that the average cost per client was one third of the cost of keeping an individual in residential care. That is what I call value for money, however much Opposition Members sneer.
Co-operation with the voluntary sector in Kent has been developed to a high degree. Age Concern Kent, for example, shares massively with the council in the care of the elderly. Eight hundred and sixty-three day care places, 12 pop-in centres, although I dislike the term, and 37 lunch clubs are part of the fruits of that co-operation—money from the council, caring from the volunteers.
In similar vein is the tremendous advance in cooperation between those who provide social services for the elderly and the local health authorities. These are rational, constructive, steps towards providing real care and independence for the elderly of Kent — a very different approach from that sought by Opposition Members. They look for increases in public authority, increases in publicly provided accommodation and increases in public benefits. They never learn that such programmes lead instantly to massive inflation, the effect of which is to make paupers of those who spent, their working lives laying up what they had hoped would be sufficient provision to keep them off the state. They find that spendthrift Governments have destroyed their savings. It is a form of peculiarly damaging hypocrisy to parade as the party that wants to do more for the old, while advocating policies that destroy their independence and turn them into unwilling dependants of a bloated state bureaucracy. Kent has shown the way towards sharing of responsibility for its older citizens which I am proud to bring to the attention of the House.
I should not like the Minister to imagine that there is no more to be done, not that there is much danger that he would do so. There is a range of opportunity opening up before us so huge that those with courage less noticeable than my Friend's might quail rather than seize the chances. Let me end by mentioning two of them. Led by the voluntary sector—and in this context one thinks of Help the Aged — new ways of enabling the elderly to capitalise upon their major, and in many cases often their only, asset are being pioneered. As the number of 80-yearolds in Britain increases in the next decade by some 400,000 people, the realisation that their children may well have no need to inherit their house will become ever more widespread. It is therefore right and proper that schemes should be on offer which, in return for eventual ownership of the property, offer shelter until death. It is a lamentable feature of human society that, where there is brass, muck will be attracted.
I urge upon the Minister that he establish urgently clear guidelines as to what constitutes acceptable schemes, otherwise a Rachman will reappear, this time battening on the ageing pensioner. Can the Minister assure the House that his Department is fully seized of the need to ensure protection for this most vulnerable section of the

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population, and that he will take steps to secure it, without destroying the expansion of this entirely sensible solution to some of the difficulties facing the old?
As a nation we are singularly ill-served by our housing market, in one respect especially. Although each year brings further understanding of what old people require of their habitation in terms of accessible electric points, effective insulation, doors wide enough to cope with wheelchairs and no dangerous steps, and although many of these facilities are equally helpful to younger people, our housing continues to be built with only the first-time buyer, fit, careless and childless, in mind. Is there nothing that the Minister and his colleagues can do to encourage the building of houses fit for more than one generaton? I leave it to the Minister to reassure us.
8.37 pm
Mr. Archy Kirkwood: I am grateful to be able to take part in the debate. I listened with interest to the contributions by the Minister and the Member for Mid-Kent (Mr. Rowe).
Taken by itself, the Minister's speech was balanced and reasonable, but it does not match at any point the experience I have had in my constituency when the old, the frail and the elderly come to consult me. They are confused by society, they are overwhelmed by the system of benefit on which most of them have to depend for their existence, they live in derelict housing and they are beset on all sides. In the Minister's part of the world and in mid-Kent, the situation may be different. If that is so, the Government have a responsibility to sort out the division that they are creating in the nation between those who live in the north and those who live in the south. The Minister as the Government spokesman should pay attention to what is happening in other parts of the country outside the south-east and mid-Kent.
I listened carefully to the speeches from both Front Benches. Hon. Members on the alliance Benches give high priority to the problem. My hon. Friend the Member for Ross, Cromarty and Skye (Mr. Kennedy) moved a motion on 10 November, when half of our only Supply day was devoted to the problems of people covered by the personal social services.
The demographic framework has been well argued in the debate. We all know that changes will be thrust upon us between now and the year 2000 which will mean that people will be more bedridden, more people will be living on their own and more people will find it difficult to live, will be unable to go out, and will be housebound and bedridden. Towards the end of the century, 25,000 people will be over 75, and living by themselves.
The Minister and the hon. Member for Oldham, West (Mr. Meacher) had a detailed and heated argument about money. Although money is important — indeed, it is fundamental to the provision of services for the elderly —we must also consider the attitude of mind that we adopt towards that provision. I do not want to sound semantic, but the Minister referred to the matter as a problem. Indeed, one can construct an argument that the elderly pose a considerable problem, but they should also be seen as a challenging opportunity. I see the Minister pointing to the Opposition Front Bench. I am addressing
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my remarks to the whole House. I appreciate that that attitude came not only from the Government Benches, but from the hon. Member for Oldham, West.
The Government amendment refers to economic difficulties. I recognise the economic difficulties, but there are ways other than hard cash in which we can approach some of the important problems. I reinforce the remarks of the hon. Member for Oldham, West about the Government's spending priorities. They are cutting back by 2·5 per cent. the money devoted to personal social services. I understand also that there is an estimated growth rate in the economy of 3 per cent. The combination of those two factors is important. The Government must say where they stand on the priority they give to provision for the elderly. I think that there is a cut in real terms in the expenditure on such provision.
We are dealing mainly with the problems of the elderly who live as part of their families in their homes. Indeed, only about 5 per cent. of the elderly population are in institutions or similar places. We should concentrate on providing facilities for the elderly who stay with their families, and we can do so only by making more use of more labour-intensive services.
The provision of care in the community is not a cheap option. If it is to be carried out properly, it must involve those employed in the domiciliary and home help services. That would provide an opportunity for the Government to deal with two problems at the same time. It would help to deal with unemployment. The hon. Member for Mid-Kent argued that that would mean pouring money into the welfare services, which would create inflation. We are all concerned about inflation, but if the money was put into the relatively unskilled work in such services as home helps, meals on wheels and so on, that would not cause inflation. The Government should consider expanding employment opportunities that would have the double benefit of cutting the employment queues and helping the elderly.
There is an overriding need for greater co-ordination between the Government Departments involved in providing services for the elderly at home. As the hon. Member for Wolverhampton, North-East (Mrs. Short) said, problems are faced by the elderly in rural areas, such as the provision of sub-post offices and similar services. Central Government could set the right framework by ensuring that housing, transport, and education Departments, as well as personal social services, are more aware of the problems. Whitehall could do a great deal more in co-ordinating the services provided for the elderly to make them more sensitive and effective.
The joint funding arrangements have been a good start, but they do not go far enough. However, I accept that it is not a matter only for central Government if we are to be successful in community care—it must be delivered by local people at local level through local authorities.
But the Government are positively hindering local authorities in their work. For example, there is no doubt that the housing benefit cuts took no account of the effect on the level of insulation grants available to the elderly, which have now been reduced from 90 per cent. to 60 per cent. I will give the Government the benefit of the doubt that that was inadvertent, but it has had a severe effect on the elderly whose houses are not insulated. That mistake was perpetrated by central Government.
There is a hot issue in my local authority in the Borders. It has decided to withdraw grants for providing wardens

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for sheltered homes because the new housing benefit regulations include an element for that for those living in a home with a warden on stream 24 hours a day. The local authority believes that if housing benefit includes that element—although it is only a maximum of 60 per cent. —it should not pay the salary of a warden or give a grant to the Hanover Association, or whichever association provides the facilities. That is a retrograde step. It is another example of how the Government, perhaps inadvertently, have caused problems for the elderly in my area. That is causing great hardship and anxiety. The policy of rate cutting means that local authorities are less able to provide the domiciliary services, home helps and so on.
I referred earlier to the possibility of using the problems faced by the elderly to create employment. Voluntary agencies and the MSC are currently giving help for house improvements, repairs and insulation in the private and public sectors. But more could be done. The Select Committee on Energy in 1982 said that all those in receipt of fuel allowances should have their homes insulated free as a matter of priority. That would be a tangible way to help old people, create jobs and save energy. Many benefits could accrue from such a policy.
Simple repairs to homes create problems for pensioners. They cannot carry out those repairs themselves. The 1981 house condition survey highlighted the need for assistance for the elderly living in less than standard accommodation. The problem goes beyond the DHSS. There is a discrepancy between need and services.
I endorse the comments of the hon. Member for Oldham, West about the sentiments expressed by the Select Committee on Social Services in 1982. I was interested in his reference to the Association of Directors of Social Services, who had said that resources had been reduced by 4 per cent. but that, measured against the increased demand, it had probably fallen 10 per cent. below what was minimally desirable. There are not sufficient home helps, meals on wheels, day centres, ambulances to day centres and so on.
Mr. John Patten: The hon. Gentleman has been endorsing, as is his right, a number of the remarks of the hon. Member for Oldham, West (Mr. Meacher), who condemned everything that the Government had done. He condemned everything completely and utterly; everything in our record was totally bad. I was wondering whether the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood) endorsed those sentiments.
Mr. Kirkwood: I have had occasion in the past to lecture the hon. Member for Oldham, West — this sounds presumptuous coming from me, as I do not have his experience—on the extravagance of his language. I am happy to assure the Minister that I do not follow his hyperbole or agree with everything he says, but there was force in some of his arguments.
The hon. Member for Oldham, West made a fair point when he spoke, for example, about the invalid care allowance. It is unfair that single women and married men can get the allowance, whereas married women cannot. The hon. Member for Oldham, West said that it would cost £60 million to put that right. I appreciate that that is a significant sum and that pension rights are involved. However, various principles, such as the principle of sex equality, are also involved, and if I were in the
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Government's position I should be looking hard at ways of redressing that anomaly. It is unjust, and resolving it would have the double function of putting the discrimination aspect right at the same time as providing much-needed assistance to elderly people who are in the care of people in their own homes. That is an important issue on which I hope the Government will give an assurance, as I hope they will give assurances on some of the other matters that I have raised.
8.52 pm
Mrs. Edwina Currie: I begin with a confession. My interest in the elderly, which now extends over several years, is entirely self-interest. Most women live to be elderly. The higher proportion of the elderly population are women. It follows, therefore, that I am far more likely to end up old, grey, wizened and crabby than any of the present occupants of the Government Front Bench.
I am rather cross over the wording of the Opposition motion in suggesting, for example, that the elderly are separate from the rich. That is wrong and could be considered patronising. It is a misconception to think that all the elderly are poor, sick, indigent and helpless. Indeed, if Opposition Members came to my constituency and made such remarks to my good Tory ladies, not all of whom are well off, they would get a fine Derbyshire wallop.
Elderly people are, first and foremost, citizens. They benefit far more than most: from reductions in the rate of inflation and they are affected more than most by such problems as high crime rates, which are at last beginning to come down. They would be delighted to be regarded as part of society, not apart from it, and therefore they welcome, for example, the recent introduction of the clause that will give them the right to buy their own homes. Most of them are determinedly independent; 94 per cent. of them live at home; a large percentage—about 30 per cent. — live alone, frequently cut of choice; they are increasingly articulate and knowledgeable; and they are not available to be used by the hon. Member for Oldham, West (Mr. Meacher), who has shown his great interest in this debate by not being present for most of it.
The House will not be surprised to hear that, in my view, the Government amendment is first class, particularly in its reference to the health and personal social services. The increase in National Health Service expenditure between 1979 and 1983 has amounted to 17 per cent. in real terms, which by any calculation is more than enough to cope with the demographic problems. The public expenditure White Paper shows a further increase of £600 million, which again must be more than enough to beat both inflation and demographic change. Joint funding—which I have been able to use extensively for such services as night watchers, weekend meals on wheels and weekend home helps to assist with the discharge of people from hospital on Fridays—now stands at nearly £100 million.
I have often felt that the approach of Opposition Members to the NHS possibly contains some lessons for people such as Lord Whitelaw. If one says something often enough, people begin to believe it. If that works with something that is not true—such as the notion that we have been cutting the Health Service—perhaps, if we adopt it, it will work with the truth.

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Those of us who have worked with the elderly and have, therefore, acquired what amounts to a shopping list of the things that we would like to see must nevertheless bear in mind two pieces of simple arithmetic. The first is common to this and most western countries. It is that about one fifth of the population are young dependants and that about two fifths are adult dependants — roughly half elderly and half others. That leaves about two fifths of the population who are working and, therefore, generating all the funds for all those services.
Those proportions have tended recently to change adversely, so that the ratio between the providers and the dependants is going against us in the western nations, and that is happening for a variety of reasons. It follows, therefore, that economic growth and improvements in productivity are needed just to maintain the constraints produced by that interface. Those who want to spend more money on the elderly must recognise that.
There is also the arithmetic of demography. I listened with interest to the comments of the hon. Member for Wolverhampton, North-East (Mrs. Short), and I am honoured now to be a member of the Select Committee of which she has been the distinguished Chairman for some years. The demographic problems are acute. If one compares the growing number of elderly with the next generation, who are the carers—in other words, the 45s to 65s—the problem becomes considerable. At the turn of the century, the ratio was about 10 carers to one elderly. It is now two or three to one and it is heading towards being one to one, and I can illustrate that by using my own family.
My grandmother had 10 children soon after the turn of the century and up to the period of the first war. As they grew up, they were perfectly capable of caring for their elderly parents, because there were only two of them. Of those 10 children, seven have now survived into old age, one of whom is my mother. They range in age between 60 and over 80 and they have managed, those seven people, between them to produce only eight children. The ratio, therefore, becomes acute. In other words, there will not be enough people in the next generation to look after the people who will need caring for.
It should be stressed that this generation of elderly people suffer from the fact that we lost 2 million men during world war 1, and therefore we have a high proportion of elderly single ladies who never had the opportunity to have a family; and in any case, even when they did, they never planned to be that old. They did not have the opportunity to provide for it and, even when they did, their savings tended to disappear through inflation.
Like most hon. Members, I have my own shopping list, but I will mention only two of the items. The first is sheltered housing. Recent literature has been critical of sheltered housing, although I believe that most of the criticisms have been misplaced. The arithmetic of the number of carers to the number of people needing to be cared for is such that shared care will have to be the way in which we manage in future, and most of the sheltered housing with which I have been associated has been a great success.
It does not all have to be provided by the local authority; it can be provided, and is increasingly being provided, by the private sector. An article in the Financial Times of 26 January 1984 suggested that the growth of the
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private sector in sheltered housing was such that we could be talking about £0£5 billion a year in that sector by the end of this decade. I warmly welcome that and hope that it will happen.
Provision does not have to be made by finding a piece of ground and building from scratch. That is the most expensive form of provision. It is quite easy to take a group of dwellings already occupied by the elderly, build a warden's house and, perhaps, a small common room and, at comparatively modest expenditure, wire the properties to a central alarm system. That approach will provide all the facilities of shared housing.
It was my privilege last year to create those facilities in tower blocks, perhaps the most unpromising of environments. It was found that many people liked living in their tower block flats and that they required only security, company and the knowledge that they would be able to live undisturbed. At one stage I was proud to become the largest buyer of carpets in the country, which were used to improve the lobbies, halls and lounge areas of the tower blocks.
My real beef is directed to invalid care allowance and attendance allowance. Most people want to be cared for at home, especially if they have a long-term illness. I hope that the figures that I am about to quote are right, but, on the other hand, I shall be delighted to be told by my right hon. and learned Friend the Minister for Health that I have them wrong. The attendance allowance is payable tax free at the rate of £18·15 or £27·20. If the disabled person is cared for by a younger relative who is not working, a total of £20·45, taxable, is paid as an invalid care allowance. If the younger relative is receiving unemployment benefit, no ICA is payable. If the relative is in work, no ICA is payable. That is the result if he or she is earning more than £12·27, which is 60 per cent. of the ICA. If the relative who is doing the caring is of pensionable age, no ICA is payable. Those provisions rule out the bulk of those whom we have been discussing because in most instances the elderly person who is being cared for is receiving care from another person of pensionable age — perhaps typically another woman who is 60 years of age or older.
The position becomes worse, because if the person concerned is a married woman, no ICA is available, even if she is not married to the person for whom she is caring. That applies to anyone who would otherwise qualify. For example, if my husband falls under a bus on his way home tonight and becomes disabled and I give up my job to look after him, I cannot claim ICA. If my right hon. and learned Friend offered his wife to look after my husband, she would not be able to claim ICA. However, if my very pretty secretary were willing to give up her job to look after my husband, she would be able to claim ICA. I am not a feminist and the House will not hear me advancing feminist arguments, but I think that the result is iniquitous. It is wrong, unfair and purely discriminatory. I accept that most married women would look after their husbands in any event, but it is wrong that ICA would not be payable to them.
If no attendance allowance is payable, there is no ICA, even though we all know of instances where the attendance allowance would be appropriate. If the allowance is claimed, the person concerned must have been disabled for six months. That means that the terminally ill cannot claim the allowance because they will be dead within the six months.

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It should be possible for the DHSS to accept a certificate from an approved doctor stating that the applicant is terminally ill and entitled to attendance allowance and ICA. It should be remembered that if the applicant were to receive care in hospital he would be given free drugs as well. It can be an expensive business caring for the terminally ill at home, and we must examine our apparent lack of policy in this area. I have written in my notes that the present position is "disgraceful".
Anyone who takes the line that I am advocating must accept that £60 million must be found. However, a careful examination reveals that the money is being paid out in any event. For example, many local authorities pay for carers. Before I came to this place I was responsible for ensuring that that happened. Frequently, the alternative is to keep someone in a home or in hospital. When put together, the ICA and the attendance allowance produced £47·45. That would keep one disabled person in a teaching hospital of the sort for which I used to be responsible for half a day. That is the sum that is allocated to keep at home someone who is very disabled, and possibly extremely ill, for an entire week. If we are prepared to hand out—
Mr. Boyes: The Under-Secretary of State is leaving the Chamber. The hon. Lady's supporters are walking out on her.
Mrs. Currie: My right hon. and hon. Friends know what I have to say.
If we are prepared to hand over £200 or more to a private home to keep a disabled person for a week, I fail to understand why we jib so much at paying ICA at the rate of £20·45. I obtained the figures which I have quoted from the National Council for Carers and their Dependants, and my right hon. and learned Friend admitted to me over tea that he used to be its parliamentary adviser. Therefore, he knows all about the council and its work.
Most of the elderly want to retain their independence. They are indignant at the notion that they owe us anything; they properly feel that the reverse is true. They feel, for example, that they have paid for their occupational pensions and that my right hon. Friend the Chancellor of the Exchequer should keep his sticky fingers off them. I tend to agree with them. I venture to suggest that most elderly husbands and wives would like to care for each other, would like in their old age to be cared for by those whom they love, and hope to die in dignity, free from care and worry. Our children will learn from us how we look after old people and they will treat us accordingly in our turn.
Several Hon. Members rose—
Mr. Speaker: Order. Three more hon. Members wish to take part in the debate. It might be helpful if I let them know that the Front Benches have said that they would like to begin the reply at 9.30 pm. If that could be borne in mind, I might be able to call each of the three hon. Members.
9.5 pm
Mr. Jeremy Corbyn: I shall attempt to be brief. It is a shame that so few hon. Members can participate in the debate. My hon. Friend the Member for Oldham, West (Mr. Meacher) pointed out that there was a link between Health Service cuts, the effects on local social services and the effects on the elderly within each community. The council in the area that I represent has just
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been told by the Government that its social services budget is being overspent by well over 30 per cent. and that it is spending too much money on providing for the needs of the elderly. Yet the services for the elderly provided by Islington council, excellent as they are in many ways, are insufficient and do not meet the demands and wishes of councillors, the director of social services and others.
The council provides 900 meals on wheels. 1,700 elderly people's holidays, 2,674 households with home helps and 285 places for elderly people in day centres. Obviously, the cost of those services is considerable. It is incredible that, considering the borough's needs and the increasing dependence of elderly people on the council to provide services, the Government should be telling the council to make cuts.
On a first look at the demographic pattern of arty inner city area Ministers and many civil servants would say that there is a continual outflow of population from the boroughs. In many cases, that is true. An increasingly elderly and single population is dependent on local authorities to look after it. A document produced in 1982 by Islington council's social services programme plan working party states:
"The elderly now form a higher proportion of our population than they did 10 years ago, since emigration from the borough has been mainly by adults and children, leaving the elderly with less support from their families and neighbours. The number of single-pensioner households has decreased from 10,563 in 1971 to 10,170 in 1981. More importantly, the proportion of such households has increased. In 1971, single-pensioner households formed 13·7 per cent. of all households in the borough, while in 1981 they formed 16 per cent. In 1971, people over retirement age formed 15 per cent. of the total population; in 1981, they formed 17·3 per cent.
It is important to emphasise that the great majority of the elderly do not require, or do not use local authority services; but when other support to the elderly becomes less available from family and neighbours then increasingly the Social Services Department is asked to fill the gaps, particularly when Health Service bed norms fail to reflect the significance of high proportions of single pensioner households."
Local authorities are facing an increasing demand upon their services and a demand for better services and more imaginative use of homes for the elderly. Like my hon. Friend the Member for Wolverhampton, North-East (Mrs. Short), I have often been in old people's homes. I have been profoundly depressed not just by the conditions within them — I am talking of homes throughout the country—but the attitude that leads us to force people to live in old people's homes with a colour television blazing away in the corner as a piece of moving wallpaper and with people not participating in arty activity in the homes. That promotes and provokes senility.
We need a more imaginative approach towards care for the elderly and a recognition of the growing needs of the ethnic minority elderly communities in many parts of London and the major cities. I am pleased that my area has formed an elderly persons' luncheon club for retired West Indian people. The same is happening in many other places. It is incredible, and it makes me angry, that many old people in my constituency who rely entirely on the local authority to provide services for them do not have any relatives living nearby. They are not in a position to buy luncheon club facilities, to have meals on wheels delivered to them or to pay for maids or other people to come in to help. We do not have a huge, generous, middle class able to provide daily volunteers to do the work for the elderly. Unlike the case referred to by the hon. Member for Mid-Kent (Mr. Rowe), who spoke on behalf

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of Kent county council, the local authority and political system in my area is determined to provide for all our old people.
We resent the Government's attitude when they say that Islington is spending £9 million too much on its social services when there is clearly a demand for them. That figure has not just been thrown at Islington council; nearly every London social service department has been told that it is spending well over the Government's grant-related expenditure assessment formula. This is a scandal. If Conservative Members are serious about caring and supporting the elderly in a decent and humane way, they would not be imposing spending cuts on local authorities or attempting to control their spending.
Conservative Members have been quick to tell us that there have been no Health Service cuts. I challenge and refute that. A further £163 million is required for the National Health Service to provide for the elderly. As the motion points out, we are looking for a comprehensive policy on care for the elderly. That means an end to the attacks on local authorities that are trying to provide services, an end to the cuts and closures in the Health Service and a different attitude towards transport, mobility allowances and bus passes.
Mr. Winnick: Does my hon. Friend agree that one of the most unfortunate aspects of the Minister's speech, and his sneering remarks about 1945, was his refusal to recognise that many advances have been made in the care of elderly people since 1945? With a Labour Government, with a large majority, 1945 was a watershed in the provision of services by the state and local authorities. Without such provisions the elderly would be far worse off than they are at present.
Mr. Corbyn: I thank my hon. Friend for that intervention. The Government's policies of controlling local authority spending, cutting National Health spending and promoting private medicine and care for the elderly are a return to the workhouse. The only difference is that it is a capitalist workhouse rather than a discreet workhouse stuck away in the hills outside the town.
Last week saw the culmination of a massive campaign by pensioners throughout London, who are determined not to lose their concessionary bus and train passes, and who are determined not to see the gains won for them by a Labour-controlled GLC in 1973 swept away by the London regional transport authority.
We must recognise the other matters that are affected by the Government's change in policy. If cuts are made in public spending on the elderly or people in the Health Service, many relatives will be forced to look after elderly people. That care is often inadequate because the relatives cannot do the work. Women are forced to give up work to nurse elderly relatives. The problem caused by women having to give up jobs to look after elderly relatives is growing. One hears of unpaid carers giving up their work to look after elderly relatives without support or recognition from the state, despite lectures about bounteous volunteers.
I have heard of people in their sixties and seventies being full-time carers for elderly patients in their nineties. That will become worse unless the Government change their attitude towards the elderly and recognise the work done in homes for the elderly, by meals on wheels workers
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and home helps. I am sponsored by the National Union of Public Employees. The Government have said that those workers are not worth £100 a week for the jobs they do and the dedication they show. They are subjected to moral blackmail, in the way that Health Service workers were two years ago.
In addition to forcing local authorities to cut their spending, we have the Government's privatisation policy. There is a growing number of residential and nursing homes for the elderly. Conservative Members have asked what is wrong with them. I believe that there are two things wrong. First, I am not satisfied that the DHSS has the resources or the capability, or is prepared to provide them to enable local authorities to undertake the necessary tight supervision and inspection of those homes to ensure that they adopt progressive caring policies. Secondly, there is motive. If there is a local authority home with a caring policy for the elderly, the motive is clear. The people who work in that home, who manage and administer it, are doing so because they care for the elderly and wish to see them looked after.
The motive in operating a private home—not from the point of view of the staff but from that of the owners —is simply to make money out of care for the elderly. I reject the idea that one can privatise care for the elderly, which is what Conservative Members in their arrogant way continually tell us.
Mr. Boyes: Does my hon. Friend agree with the Association of Directors of Social Services, which says that the system is unfair and that the Government are prepared to allow private money to be poured into these homes whereas local authority homes are continually monitored by expensively paid auditors? On the one hand, private owners can provide even poorer services and get away with it, while, on the other, local authority homes are continuously under pressure.
Mr. Corbyn: My hon. Friend has hit the nail squarely on the head. The Government are restricting money for publicly run, publicly owned and publicly administered homes for the elderly yet at the same time are encouraging the development of private homes for the elderly without imposing the same conditions on them.
My own authority has been told that it is 33 per cent. over budget on social services. When the Minister kindly finds the time to visit my borough, or any other poor inner city areas, he might care to tell the people which home for the elderly should be shut, how many home helps ought to be dismissed from post and where exactly the cuts should be made.
Mr. Kenneth Clarke: The hon. Gentleman's whole speech is based on the ridiculous claim that his borough is in trouble for overspending solely because of its caring policies for the elderly. It is in trouble because of the totality of its spending. Islington is notorious for the money that it pours into crackpot political groups and the curious hiring of fringe officials to perform unnecessary duties on behalf of the borough. Does not the hon. Gentleman accept that something must be done to tackle Islington's wasteful expenditure so that it can maintain the services and reduce the rate burden for some of its elderly population?
Mr. Corbyn: The Minister, who is a member of a Government who are promoting the Rates Bill, which

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seeks to control local authority spending, shows a worrying misunderstanding of the way in which the GREA formula works. That formula is specified department by department. My borough, along with others, has been told that it is overspending on social services. I am not talking about the totality of its spending. Indeed, virtually every other London borough has been told exactly the same thing by the Minister and his Government colleagues. He ought to understand the way in which the Government's policies operate on social services spending.
Mr. Clarke: With respect, targets are not based on GREAs, as the hon. Gentleman, as an experienced councillor, knows perfectly well. He makes a quite misleading use of GREAs by suggesting that that is the measure of overspending that the Government are taking into account. They are taking account of the inexorable year-on-year increase in Islington's budget, because that borough spends its money in profligate, wasteful and sometimes downright foolish ways. That has got the borough into trouble and is threatening its services.
Mr. Corbyn: I do not know how long we shall be able to continue this discussion. The Minister ought to get a new brief on what the rate capping legislation means. The GREA formula is specific on each department, and it is specific that social services departments in London are overspending.
Care for the elderly is an important issue. It cannot be left to volunteers, charities or to people going out with collecting boxes to see that old people are looked after properly. The issue is central to our demands for a caring society. That means an end to the cuts and an end to the policy of attacking those authorities that try to care for the elderly. Instead, there should be support for and recognition of those demands.
Elderly people deserve a little more than pats on the head from Conservative Members. They deserve more than the platitudinous nonsense talked about handing the meals on wheels service over to the WRVS or any other volunteer who cares to run it. Instead, there should be a recognition that those who have worked all their lives to create and provide the wealth that the rest of us enjoy deserve some dignity in retirement. They do not deserve poverty, or to be ignored in their retirement, having to live worrying whether to put on the gas fire, or boil the kettle for a cup of tea, or whether they can afford a television licence or a trip out. They should not have to wonder whether the home help who has looked after them so long will be able to continue. The issue is crucial. The motion says clearly that care for the elderly comes before the promotion of policies that merely increase the wealth of those who are already the wealthiest in our society.
9.23 pm
Rev. Martin Smyth: I appreciate being called to speak. Lest the Minister asks why the Opposition have not said "Thank you" for anything that the Government have done, I welcome the announcement about the inspectorate. I am not yet sure whether I welcome that announcement more than the fact that the Minister left aside three pages of his brief.
I speak for a party that is concerned about the elderly. It is interesting that more than 50 per cent. of right hon. and hon. Members belonging to the Official Unionist party have been in the Chamber for part of the debate. That shows our concern.
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In the time at my disposal, I shall encourage the Minister and his colleagues to do better in their work. I recognise the problems, and know something of the pressures of finance, but, even in the fulsome praise with which the amendment pays tribute to professional staff and volunteers in their central and crucial role of supporting elderly people and their families, we must take heed of the cries for more finance and help in specific areas. We should at least listen to the workers and volunteers who have been dealing with the problem at the coal face, so to speak, if as a party we are not always ready to listen to political opponents who criticise what we are trying to do. Those workers and volunteers say that more needs to be done for the elderly.
I should like to put it on record, in a debate where the need for greater care in the community has often been mentioned, that the British Medical Association stated recently that 94 per cent. of die elderly are cared for in he community, leaving 6 per cent. cared for in old people's homes and other establishments. That might be a distorted figure, as I understand it, but I use it as a warning, because there is a tendency simply to believe that if people were taken out of hospital to make geriatric beds available and were returned to the community, that would go a long way to solve our problems. I contend that that approach may add to our problems rather than solve them, if that is the strategy on which the Government's plans are based.
Tonight we have been told about two elderly people who have contributed to world leadership. I pay tribute to the elderly. A good friend of mine ceased driving at the age of 94. The car needed some attention. I believe that many of our senior citizens could be redeployed usefully in the community if there were strategic planning. However, when we begin to pay people off and tell them that they can do nothing useful after a certain age because of the problems of youth unemployment, and other concerns, we should re-examine the strategy behind our care procedures.
Figures have been bandied about in the debate. Some were useful and others were just argumentative. I plead with the House and above all with the Government not to lead us down the road to the time when a successor to the hon. Member for Derbyshire, South (Mrs. Currie) comes to the House as a robot, saying that every human is an elderly person, and that they must carry the can for them. If we do not provide the framework now, it will not be long before we are back to the deplorable practice of dumping our elderly and not caring for them.
We welcome the work that has been done, and the improvements, but not only financial considerations are involved. Because we sometimes do not realise that we are dealing with human beings, we fall down on the job. I suspect that at times Ministers and even civil servants are not fully aware of the problems facing people. I think that the Under-Secretary of State will admit that to a large extent the social services and hospitals in Northern Ireland compare favourably with other parts of the kingdom. Therefore, if I use illustrations, it is not with a sense of hypercriticism but with the suspicion that if that is the position in a place where I have respect for the level of care, it could be worse in other places.
In the previous debate, it was said how wonderful the youth training scheme is. However, the headlines of yesterday evening's edition of the Belfast Telegraph stated that there were 1,000 fewer places in youth training. When one talks about social services in the rest of the kingdom

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and the amount of money that is being spent, it is important to realise that senior citizens in Northern Ireland are in double jeopardy. That little strip of water is used as an excuse for exorbitant charges in virtually everything. Mention has been made of the extra sums paid for heating charges. Many people in Northern Ireland and other parts of the United Kingdom are in difficulties because they are pensioners. Their supplementary benefits, even with augmented heating grants, have not met their needs in a winter like this.
On Monday night I visited a senior citizens' group. Those people were fascinating in their approach to life. They meet regularly on Monday nights and are up to all sorts of antics. There is plenty of life in them. One was concerned about the dumping at the entrance of Belfast lough. One of the things that they were interested in, with regard to pensions, was television fees. One was concerned that the previous day's paper forecast an increase. The people in the group recognised that some pensioners who have the benefit of sheltered or warden accommodation can view television free of charge, but others cannot. We have been lobbied by a fine group of people who said that they were building their own dwellings, thus saving the state money, and who would like free television licences. I would welcome that.
I plead for a large percentage of pensioners on low pensions who would love to be in warden or sheltered accommodation or who would even like to join a self-help group, but who, because of their finances, cannot do so. Thus they continue to pay high television costs while others benefit from the rebate. I gather that that may not be just Government policy. It has been suggested that it is the BBC's policy—that the BBC does not wish to receive Government subsidies, because that would make it look less independent. The Government should think less about the independence of the BBC and more about the needs of pensioners.
Finally, it is a long time since the death grant was fixed at £30. We should be trying to meet the needs of decent people who fear the possibility of a pauper's grave because the state allows them only £30 in an age when the minimum requirement for a decent funeral is £400.
9.31 pm
Mr. Max Madden: On 1 March, pensioners from all over Britain will come to this House again from the National Pensioners' Convention to urge the Government to accept a declaration of intent which lists a number of demands. The declaration states:
"every pensioner has the right to choice, dignity, independence and security as an integral and valued member of society. These rights require an adequate State retirement pension. There must be an immediate commitment to a pension level of not less than one half of average gross earnings for a married couple and not less than one third of average gross earnings for a single person, uprated at six monthly intervals."
Nine demands are listed. I shall quote the first two. First, there should be a right to
"live in accommodation which is appropriate to personal need and circumstance with a reasonable degree of choice including sheltered housing".
Secondly, there should be a right to
"be able to call on the full range of community and personal social services to give full support as need arises, including, for example, home helps, meals on wheels, chiropody, television and telephone".
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Today in Britain there are 9·5 million pensioners—almost one in five of the adult population. Their pensions are the lowest, as a proportion of earnings, of any country in the Common Market. Pensions, compared with average earnings, have grown only modestly in recent years. The most important target for pensioners is to restore the link between pension, prices and earnings. That link was broken as soon as the present Government came to power. It must be restored at the earliest possible moment.
Pensions are now linked to the retail price index. There is considerable evidence to show that for pensioner households the retail price index is wholly unrealistic. The rate of inflation experienced by pensioners is greater than that reflected in the retail price index. The alternative price index prepared by pensioner organisations shows that for the average pensioner household the cost of living has increased by 0·6 per cent. more than the RPI in recent years.
Pensioners spend more of their incomes on food and energy. The prices of both have increased sharply in the past 10 years. Pensioner households spend more of their incomes on bread, margarine, sugar and vegetables. They spend more of their incomes on heating, and they often have the form of heating which is cheapest to install but most expensive to run. Some spend most of their days walking around inner city supermarkets in order to keep warm. Some spend 15 or 16 hours a day in bed to keep warm, covering the bed with an overcoat. The cost of living can be higher for pensioners because they have less access to large low-cost shops and they do not have the ability to buy in bulk.
My hon. Friend the Member for Wolverhampton, North-East (Mrs. Short) has a distinguished record in these matters. She pointed out how pensioners have been hit by the policies of this Government, which have brought about the closure of village shops, sub-post offices and chemists. The ending of doorstep deliveries of milk, if it came about on a general basis, would also hit many pensioners. Fewer than 40 per cent. of pensioners have access to a car. That is why many pensioners depend on public transport, and why many pensioners in London are determined to defend their free transport facilities and to oppose the loss of concessionary fares which may follow the abolition of the metropolitan councils by this Government.
A hospital which is close to my heart—Thornton View hospital in Bradford—has been mentioned. It was occupied in the early part of August last year by the staff to defend it against closure. Since then the staff, assisted by relatives and the local community, have been defending it not because they have a great relish for standing out in the cold in snow 2ft deep or in pouring rain or in the extremely bad weather that we have experienced recently, but because they know that that hospital offers first-class care for very elderly people and that if it is not allowed to remain open such care will not be available.
Through a series of clumsy efforts to threaten, coerce and victimise the staff— most recently by bringing a petty complaint for disciplinary action against a leading member of the occupation — the health authority has tried to do everything to secure the hospital's closure. I urge the Ministers who are facing me to respond sensibly to the community's demands. I urge them to announce that the hospital can be kept open — there is no better provision. The Minister talked of the need for better provision when old hospitals are closed. We all agree with that, but the bare fact in Bradford is that there is no better

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provision. The only alternative long-stay provision which is proposed is at the Leeds road hospital. It would cost at least £80,000 to bring it into use. Moreover, it does not offer better standards of patient care and it certainly does not offer patients or relatives greater access or greater convenience.
We know that about 19 per cent. of the over-85s live in residential establishments. Their need for residential hospital care is significantly higher than that of younger retired people. That also makes nonsense of any attempt to close hospitals such as Thornton View. It is those hospitals which provide the residential care which is often not available elsewhere.
We also know that many pensioners live in the most unsatisfactory conditions. One third live alone and have no direct family support. More than 400,000 pensioner households do not have exclusive use of a bath or an indoor WC. With hospitals closing, more pensioners are being compelled to look to community support. With local authorities reeling from cuts in their rate support grant, there are cuts in home helps, meals on wheels and other services which help pensioners to live independently. Moreover, as councils' part III accommodation is shrinking, an increasing number of pensioners are buying shelter in the private sector.
It is estimated that about 48,000 elderly people live in 3,400 private homes which attract an annual revenue of £250 million a year, about half of which comes from the DHSS's supplementary benefit budget. The assets of the private sector are valued at £6 billion. The private sector is booming. We have heard about that tonight. Indeed, it is ironic that when the Government are robbing pensioners through cuts in housing benefit to the tune of £185 million, they are propping up the private sector which is one of the biggest growth industries in Britain today.
Malcolm Johnson of the Policy Studies Institute, writing in the Health and Social Service Journal of July last year, said:
"over the past year or two it has become the practice for local social security offices to allow the payment of attendance and other allowances previously available only to those in their own homes, to receive these in residential care settings. Moreover, a discretionary topping-up payment is now widely made in accordance with the level of local costs. Thus, across the country there are supplementary benefit supported residents in Homes where the weekly costs range from £70 to £125.
There is no indication that the DHSS is moving towards a curbing or withdrawal of his considerable source of revenue for proprietors who are increasingly aware of its benefits. One new owner, wishing to fill his beds, recently advertised a free weekend trial stay for elderly people. When the rested carers came to collect their equally satisfied elderly parents, lamenting that it would be nice to continue the arrangment except for the money, the proprietor had a solution. Ready to hand he had a supply of supplementary benefit forms—and rapidly filled his beds. This facility is undoubtedly costing tens of millions of pounds a year, and some social services directors share my view that it may already have reached £100 million in the payment of allowances and top-up awards."
In opening the debate for the Government, the Minister gave an extensive, apparently written explanation of the measures announced today. Will the Minister in replying to the debate tell us what the registration fee will be? If it is as inadequate as those previously proposed, local authorities will have great difficulty in policing the proposed system. Secondly, is there to be a ceiling on the benefit paid to elderly residents in the private sector?
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What kind of money is being made out of this? I recently obtained a prospectus being circulated to potential investors in a nursing home proposal. It states:
"Financial experts now take the view that nursing homes for elderly people are likely to become a growth industry. And that, because of the special circumstances described above, this growth will continue through bad years as well as good.
Through the Business Expansion Scheme, where investment is subsidised by the Government, Mrs. Thatcher can effectively influence the switch of emphasis to private care in this area.
We believe that, with this impetus behind it and the tax advantages of a BES investment, 'An Investment in Nursing Homes' will prove a lucrative long-term opportunity for large-scale capital growth."
Indeed, it is. The brochure gives the equivalent gross annual return as more than 20 per cent. for a £1,000 investment by an investor with a marginal tax rate of 30 per cent. With a marginal tax rate of 75 per cent., the return is 57 per cent. and the return on a £10,000 investment over a period of five years is equivalent to an annual growth rate of 115 per cent. That is not bad at all. That is the type of carrot being dangled increasingly before the noses of all kinds of people with money to invest.
Sir Raymond Gower: Will the hon. Gentleman give way?
Mr. Madden: I am reluctant to give way as it is a short debate. If the hon. Gentleman had been here earlier, he might have caught your eye, Mr. Speaker.
We in no way oppose the private sector in the way that Ministers have suggested, but we are concerned that the people involved should have the right caring qualities and managerial and business experience. We are extremely concerned about the standards of care available in the private sector. We readily admit that some of the best residential homes are in the private sector, but so are some of the worst. We are also worried about the thoroughly inadequate training available to people serving in those homes.
In this debate on the needs of the elderly all hon. Members who have spoken have expressed deep concern about the plight of many elderly people in this country today. There is no excuse for selling pensioners short and not giving them the best possible opportunity to live with dignity and with a standard of living that allows them a full life and a life of quality. That is what the debate is about.
I urge those who agree that the Government's policies appear to be a determined attempt to reduce the standard of living of pensioners to join me in supporting the Opposition motion and doing all that we can to oppose Government policies that are hitting British pensioners extremely hard. Britain is one of the richest countries in the world. The time has come for that wealth to be mde more available to pensioners so that they may enjoy an increasing share of it and escape the never-ending prospect of drab, depressing lives which at present so many of them have to endure.
9.44 pm
The Under-Secretary of State for Health and Social Security (Mr. John Patten): In answering the debate, I do not intend to refer to what the hon. Member for Bradford, West (Mr. Madden) had to say about hospitals in his constituency, a subject more suitable for an Adjournment debate than for a debate such as this, which arises on an Opposition motion. The Government do riot regard the elderly as a dependent group in the way that,

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all too clearly, the Labour party does. We reject the patronising attitude that anyone over the age of 65 is helpless and a member of a client group, in need of care or suffering from illness. That is not our view of the role of the elderly in society. Retirement is not an illness, and that is why in our 1983 manifesto we pledged that, together with a number of other priority groups such as the mentally ill and the mentally handicapped, we would give special attention to the needs of those over 65 who needed special care. My right hon. and learned Friend the Minister for Health pointed this out clearly in his introductory remarks.
Nothing in the motion on the Order Paper pays any attention to the important work that can be done in looking after the elderly by voluntary societies and community work. That is why the Government's amendment correctly points out the critically important role of the voluntary societies and organisations in helping with the mixed care of the elderly provided through funds from the state, in increasing amounts through the resources of the elderly themselves and through voluntary organisations.
Mr. Boyes rose—
Mr. Patten: I cannot give way as I have only a quarter of an hour in which to reply to the debate.
I need only give a few examples of the way in which the Government have encouraged the development of voluntary care in looking after the elderly to substantiate the case that my right hon. and learned Friend made in his introductory remarks. The Government are giving increasing attention to involving voluntary organisations more deeply in joint planning, in which we hope that voluntary organisations will soon have a statutory part to play. That will be of great importance in the care of the elderly.
More and more, we shall make finance available to help joint planning between health and local authorities and to stimulate work in community care. Already there have been considerable increases in this over the past five years. In 1983–84 the total stands at £96 million, and I hope that our record in recognising the role that community care can play in joint planning is recognised by members of the alliance.
Mr. George Foulkes: I hope that the hon. Gentleman is not looking at me.
Mr. Patten: I am not looking at the hon. Gentleman —I try to restrict myself to looking at those things at which I enjoy looking.
The alliance has to think carefully before it decides to go into the Lobby supporting the Opposition.
Mr. Foulkes rose—
Mr. Patten: I apologise unreservedly. I enjoy looking at the hon. Gentleman.
Mr. Foulkes rose—
Mr. Speaker: Order. I think that the Minister is not going to give way.
Mr. Foulkes: The Minister was referring to me.
Mr. Patten: I apologise. I do not wish to upset the hon. Gentleman.
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I hope that the alliance will think carefully before going into the Lobby in support of the Opposition. The motion's blanket condemnation of all the developments since 1979 is unfair and unjustified. The hon. Member for Oldham, West (Mr. Meacher), with his love of statistics, should recognise the improvements that have been made. I do not intend to go through a Dalek-like repetition of statistics in the next 12 minutes, but in an intervention in the speech of the hon. Member for Wolverhampton, North-East (Mrs. Short) I gave her three statistics, with which she was good enough to agree, concerning the provision of geriatric care in hospitals. I quoted the 11 per cent. increase in consultants, the 37 per cent. increase in senior registrars and the 11 per cent. increase in nursing staff looking after geriatric patients. All those developments since 1979 have enabled the average length of stay in geriatric units—this is another statistic for the hon. Member for Oldham, West—to be reduced by 20 per cent. down to about 60 days, which then enables the elderly to return to the community. That is exactly what they wish to do.
When talking about returning to the community, it is nice to see the hon. Member for Oldham, West returning to the Chamber. He did not stay in the Chamber for any of the speeches, except one, in this most interesting debate. It would have shown greater interest in the debate on his part had he spent some time listening to what other people said.
Let me tell the hon. Gentleman about some of the speeches that he missed. He missed an admirable speech by my hon. Friend the Member for Mid-Kent (Mr. Rowe), who gave the House a rational exposé of the prudent approach of his local authority and who went through all the advantages of the social services set-up in Kent. That social services department involves the voluntary services in the care of the elderly. My hon. Friend also referred to the fears of the elderly, especially the fears of those who are giving up their accommodation to enter local authority accommodation. He raised several important points, and I undertake to consider them.
Had the hon. Member for Oldham, West been in the Chamber, he would have heard an interesting speech by the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood), who paid many compliments to the hon. Member for Oldham, West. He endorsed several of the comments of the hon. Member for Oldham, West, but he did not endorse the language in which so much of the hon. Gentlman's speech was expressed—the language of total condemnation, which does him less than justice.
The hon. Member for Roxburgh and Berwickshire talked about the importance not just of spending money but of developing and changing attitudes towards the elderly and of developing care for the elderly. He said that there are other ways of approaching issues than spending cash. I am pleased that the hon. Gentleman shares the view that is common among Conservative Members: that we must consider the efficiency and effectiveness of social services provision for the elderly, not just the amount of money spent on them. Considerable improvements can be made in social services departments to improve the effectiveness and efficiency of the delivery of social services care.
My hon. Friend the Member for Derbyshire, South (Mrs. Currie) treated the House to an extraordinary picture of herself growing old, grey and stooped and unable to deal with life. I find that picture hard to substantiate. She raised one specific point about the need to extend the

913
provision of invalid care allowances to married women. When the invalid care allowance was introduced in 1976 the Labour Government believed it necessary to confine the allowance to those who were thought to need it most. I am afraid that those considerations still apply, together with the considerations of cost. As my hon. Friend said, the cost would be about £60 million. My hon. Friend has often spoken about the need to restrain public expenditure. She understands the hard decisions that have to be made. While the Government are sympathetic to this as a long-term aim, I am afraid that at present we will not be able to oblige the hon. Lady.
The House then heard the voice of sanity from Ulster in the shape of the hon. Member for Belfast, South (Rev. Martin Smyth). I point out to my right hon. and hon. Friends that when the hon. Member for Belfast, South was speaking at 9.22 pm, there were eight members of the Ulster Unionist party in the Chamber, and five members of the Labour party, to listen to speeches on their own Opposition Supply day. I congratulate the Ulster Unionist party on showing its characteristic interest in these affairs, which has not been shown by members of the Labour party, or, most important, by the Opposition's Front Bench spokesman.
Mr. Boyes rose—
Mr. Speaker: Order. I hope that it is a point of order.
Mr. Boyes: On a point of order, Mr. Speaker. If the Minister is going to quote the number of hon. Members in the Chamber across political parties he ought to quote the number of Members of all political parties present.
Mr. Speaker: As I suspected, that is not a point of order.
Mr. Patten: I shared your suspicion, Mr. Speaker, and, like you, I have not been surprised to hear the result.
It is critically important to remember that the major attack on the Government has been launched by the hon. Member for Oldham, West. The hon. Gentleman is an important man in his party. He is a seminal thinker and he has written a book that I have read called "Socialism with a Human Face". I bet that is an experience that not many of my right hon. and hon. Friends have shared. Indeed, I do not know how many of his hon. Friends would be able to hold up their hands to say that they had read it. What is so interesting about the book, which was published in 1982, is that, despite being called "Socialism with a Human Face", there is not one mention of the National Health Service, and not one mention of social services. However, it is a document of great interest, because it is very honest. One has to read only as far as the sixth line of the first page to come across
"the need for a drive to transform the party under the campaigning leadership of Tony Benn".
I am afraid that the hon. Gentleman has a record. The hon. Gentleman served as a junior Minister in the DHSS. The hon. Gentleman suffers from amnesia, because he can never quite recall that he was a member of the DHSS when the Christmas bonus was "daylight-robbed" from pensioners in 1975–76. He somehow cannot manage to recall, curiously enough, that he was part of the ministerial team that decided to mount a daylight robbery exercise on pensioners when they moved from the historic to the forecast method of calculating pensions. That is the trouble with the hon. Gentleman: this amnesia creeps in.
914
The other point that is characteristic of the hon. Gentleman's argument is the automaton-like repetition of statistics, which many of my hon. and right hon. Friends were not privileged to hear at an earlier stage this afternoon, in his frantic attempt to identify a new client group for the Labour party to get hold of—in this case the elderly. The Labour party has tried it time alter time since the second world war. It has tried to make the council tenants its own client group, and it has failed. It has tried to make industrial manual workers its own client group, and it has failed. It has tried to make new Commonwealth immigrants its own client group, and it is failing in that. I have to say that it is failing completely in trying to make the elderly its own client group, as all opinion polls showed after the result of the last general election, when 50 per cent. of those over 65 correctly voted Conservative. They voted Conservative because they recognised the record of the Conservative Government before the last election, and they recognised the realistic way in which we have not made promises that we cannot keep, but have moved to improve the lot of the elderly within their own means.
Question put, That the original words stand part of the Question:—
The House divided: Ayes 185, Noes 285.

Division No. 173]

[10 pm

AYES

Alton, David

Dalyell, Tam

Anderson, Donald

Davies, Rt Hon Denzil (L'lli)

Archer, Rt Hon Peter

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

Ashdown, Paddy

Deakins, Eric

Ashley, Rt Hon Jack

Dewar, Donald

Ashton, Joe

Dormand, Jack

Atkinson, N. (Tottenham)

Dubs, Alfred

Bagier, Gordon A. T.

Duffy, A. E. P.

Banks, Tony (Newham NW)

Dunwoody, Hon Mrs G.

Barnett, Guy

Eadie, Alex

Beggs, Roy

Eastham, Ken

Beith, A. J.

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

Bell, Stuart

Fatchett, Derek

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

Faulds, Andrew

Bermingham, Gerald

Field, Frank (Birkenhead)

Bidwell, Sydney

Fields, T. (L 'pool Broad Gn)

Blair, Anthony

Foot, Rt Hon Michael

Boothroyd, Miss Betty

Forrester, John

Boyes, Roland

Forsythe, Clifford (S Antrim)

Bray, Dr Jeremy

Foster, Derek

Brown, Gordon (D'f'mline E)

Foulkes, George

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

Fraser, J. (Norwood)

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

Freeson, Rt Hon Reginald

Brown, Ron (E'burgh, Leith)

Freud, Clement

Bruce, Malcolm

Garrett, W. E.

Buchan, Norman

George, Bruce

Callaghan, Jim (Heyw'd & M)

Gilbert, Rt Hon Dr John

Campbell, Ian

Godman, Dr Norman

Campbell-Savours, Dale

Golding, John

Canavan, Dennis

Gould, Bryan

Carter-Jones, Lewis

Gourlay, Harry

Clark, Dr David (S Shields)

Hamilton, James (M'well N)

Clarke, Thomas

Hamilton, W. W. (Central Fife)

Clay, Robert

Hardy, Peter

Cocks, Rt Hon M. (Bristol S.)

Harman, Ms Harriet

Cohen, Harry

Harrison, Rt Hon Walter

Coleman, Donald

Heffer, Eric S.

Concannon, Rt Hon J. D.

Hogg, N. (C'nauld & Kilsyth)

Conlan, Bernard

Home Robertson, John

Cook, Frank (Stockton North)

Howells, Geraint

Cook, Robin F. (Livingston)

Hoyle, Douglas

Corbyn, Jeremy

Hughes, Dr. Mark (Durham)

Cowans, Harry

Hughes, Robert (Aberdeen N)

Cox, Thomas (Tooting)

Hughes, Roy (Newport East)

Craigen, J. M.

Janner, Hon Greville

Crowther, Stan

John, Brynmor

915

Jones, Barry (Alyn & Deeside)

Radice, Giles

Kennedy, Charles

Randall, Stuart

Kilroy-Silk, Robert

Rees, Rt Hon M. (Leeds S)

Kirkwood, Archibald

Richardson, Ms Jo

Lambie, David

Roberts, Ernest (Hackney N)

Lamond, James

Robertson, George

Leadbitter, Ted

Rooker, J. W.

Lewis, Ron (Carlisle)

Ross, Ernest (Dundee W)

Lofthouse, Geoffrey

Ross, Wm. (Londonderry)

Loyden, Edward

Rowlands, Ted

McCartney, Hugh

Sedgemore, Brian

McDonald, Dr Oonagh

Sheerman, Barry

McGuire, Michael

Sheldon, Rt Hon R.

McKay, Allen (Penistone)

Shore, Rt Hon Peter

McKelvey, William

Short, Ms Clare (Ladywood)

Mackenzie, Rt Hon Gregor

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

McNamara, Kevin

Silkin, Rt Hon J.

McTaggart, Robert

Skinner, Dennis

McWilliam, John

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

Madden, Max

Smyth, Rev W. M. (Belfast S)

Maginnis, Ken

Soley, Clive

Marek, Dr John

Spearing, Nigel

Martin, Michael

Steel, Rt Hon David

Mason, Rt Hon Roy

Stewart, Rt Hon D. (W Isles)

Maxton, John

Stott, Roger

Maynard, Miss Joan

Strang, Gavin

Meacher, Michael

Thomas, Dr R. (Carmarthen)

Mikardo, Ian

Thompson, J. (Wansbeck)

Millan, Rt Hon Bruce

Thorne, Stan (Preston)

Miller, Dr M. S. (E Kilbride)

Tinn, James

Mitchell, Austin (G't Grimsby)

Torney, Tom

Molyneaux, Rt Hon James

Walker, Cecil (Belfast N)

Morris, Rt Hon A. (W'shawe)

Wallace, James

Morris, Rt Hon J. (Aberavon)

Wardell, Gareth (Gower)

Nellist, David

Wareing, Robert

Nicholson, J.

Weetch, Ken

Oakes, Rt Hon Gordon

White, James

O'Brien, William

Wigley, Dafydd

O'Neill, Martin

Williams, Rt Hon A.

Orme, Rt Hon Stanley

Wilson, Gordon

Owen, Rt Hon Dr David

Winnick, David

Park, George

Woodall, Alec

Parry, Robert

Wrigglesworth, Ian

Patchett, Terry

Young, David (Bolton SE)

Pavitt, Laurie

Pendry, Tom

Tellers for the Ayes:

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

Mr. Frank Haynes and

Powell, Raymond (Ogmore)

Mr. Don Dixon.

Prescott, John

NOES

Alexander, Richard

Chapman, Sydney

Ancram, Michael

Churchill, W. S.

Arnold, Tom

Clark, Sir W. (Croydon S)

Ashby, David

Clarke, Rt Hon K. (Rushcliffe)

Atkins, Robert (South Ribble)

Clegg, Sir Walter

Banks, Robert (Harrogate)

Cockeram, Eric

Batiste, Spencer

Colvin, Michael

Beaumont-Dark, Anthony

Conway, Derek

Bellingham, Henry

Coombs, Simon

Bendall, Vivian

Cope, John

Best, Keith

Corrie, John

Biffen, Rt Hon John

Cranborne, Viscount

Body, Richard

Critchley, Julian

Boscawen, Hon Robert

Currie, Mrs Edwina

Bottomley, Peter

Dorrell, Stephen

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

Douglas-Hamilton, Lord J.

Boyson, Dr Rhodes

Durant, Tony

Brandon-Bravo, Martin

Dykes, Hugh

Brown, M. (Brigg & Cl'thpes)

Edwards, Rt Hon N. (P'broke)

Browne, John

Emery, Sir Peter

Bruinvels, Peter

Fairbairn, Nicholas

Buck, Sir Antony

Farr, John

Budgen, Nick

Favell, Anthony

Bulmer, Esmond

Fenner, Mrs Peggy

Burt, Alistair

Finsberg, Sir Geoffrey

Butcher, John

Fletcher, Alexander

Butterfill, John

Fookes, Miss Janet

Carlisle, John (N Luton)

Forman, Nigel

Carttiss, Michael

Forsyth, Michael (Stirling)

916

Fox, Marcus

McCrindle, Robert

Franks, Cecil

McCurley, Mrs Anna

Fraser, Peter (Angus East)

MacGregor, John

Freeman, Roger

MacKay, Andrew (Berkshire)

Fry, Peter

MacKay, John (Argyll & Bute)

Gale, Roger

Maclean, David John.

Galley, Roy

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

Gardiner, George (Reigate)

McQuarrie, Albert

Gardner, Sir Edward (Fylde)

Madel, David

Glyn, Dr Alan

Major, John

Goodhart, Sir Philip

Malins, Humfrey

Goodlad, Alastair

Malone, Gerald

Gow, Ian

Maples, John

Gower, Sir Raymond

Marland, Paul

Grant, Sir Anthony

Marshall, Michael (Arundel)

Greenway, Harry

Mates, Michael

Gregory, Conal

Mather, Carol

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

Maude, Hon Francis

Griffiths, Peter (Portsm'th N)

Mawhinney, Dr Brian

Grist, Ian

Maxwell-Hyslop, Robin

Gummer, John Selwyn

Mayhew, Sir Patrick

Hamilton, Hon A. (Epsom)

Mellor, David

Hamilton, Neil (Tatton)

Merchant, Piers

Hampson, Dr Keith

Meyer, Sir Anthony

Hanley, Jeremy

Mills, Iain (Meriden)

Hannam, John

Mills, Sir Peter (West Devon)

Hargreaves, Kenneth

Miscampbell, Norman

Harvey, Robert

Mitchell, David (NW Hants)

Haselhurst, Alan

Moate, Roger

Havers, Rt Hon Sir Michael

Monro, Sir Hector

Hawkins, C. (High Peak)

Montgomery, Fergus

Hawkins, Sir Paul (SW N'folk)

Moore, John

Hawksley, Warren

Morris, M. (N'hampton, S)

Hayhoe, Barney

Moynihan, Hon C.

Hayward, Robert

Mudd, David

Heath, Rt Hon Edward

Murphy, Christopher

Heathcoat-Amory, David

Neale, Gerrard

Heddle, John

Needham, Richard

Henderson, Barry

Nelson, Anthony

Hickmet, Richard

Neubert, Michael

Hicks, Robert

Newton, Tony

Higgins, Rt Hon Terence L.

Nicholls, Patrick

Hill, James

Norris, Steven

Hind, Kenneth

Onslow, Cranley

Hirst, Michael

Oppenheim, Philip

Hogg, Hon Douglas (Gr'th'm)

Oppenheim, Rt Hon Mrs S.

Holland, Sir Philip (Gedling)

Osborn, Sir John

Holt, Richard

Ottaway, Richard

Hooson, Tom

Page, John (Harrow W)

Hordern, Peter

Page, Richard (Herts SW)

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

Parris, Matthew

Howe, Rt Hon Sir Geoffrey

Patten, John (Oxford)

Howell, Rt Hon D. (G'ldford)

Pawsey, James

Hubbard-Miles, Peter

Peacock, Mrs Elizabeth

Hunt, John (Ravensbourne)

Percival, Rt Hon Sir Ian

Hunter, Andrew

Pink, R. Bonner

Hurd, Rt Hon Douglas

Pollock, Alexander

Jenkin, Rt Hon Patrick

Porter, Barry

Jessel, Toby

Powell, William (Corby)

Jones, Gwilym (Cardiff N)

Powley, John

Jones, Robert (W Herts)

Proctor, K. Harvey

Joseph, Rt Hon Sir Keith

Raffan, Keith

Kershaw, Sir Anthony

Raison, Rt Hon Timothy

Key, Robert

Rees, Rt Hon Peter (Dover)

King, Roger (B'ham N'field)

Renton, Tim

King, Rt Hon Tom

Rhodes James, Robert

Knight, Gregory (Derby N)

Ridley, Rt Hon Nicholas

Knight, Mrs Jill (Edgbaston)

Rippon, Rt Hon Geoffrey

Knox, David

Roberts, Wyn (Conwy)

Lamont, Norman

Robinson, Mark (N'port W)

Lang, Ian

Roe, Mrs Marion

Lawler, Geoffrey

Rost, Peter

Lawrence, Ivan

Rowe, Andrew

Lee, John (Pendle)

Rumbold, Mrs Angela

Leigh, Edward (Gainsbor'gh)

Ryder, Richard

Lewis, Sir Kenneth (Stamf'd)

Sackville, Hon Thomas

Lilley, Peter

Sainsbury, Hon Timothy

Lloyd, Ian (Havant)

St. John-Stevas, Rt Hon N.

Lloyd, Peter, (Fareham)

Sayeed, Jonathan

Lord, Michael

Shaw, Giles (Pudsey)

917

Shaw, Sir Michael (Scarb')

Townend, John (Bridlington)

Shelton, William (Streatham)

Tracey, Richard

Shepherd, Richard (Aldridge)

Trippier, David

Shersby, Michael

Trotter, Neville

Silvester, Fred

Twinn, Dr Ian

Sims, Roger

van Straubenzee, Sir W.

Skeet, T. H. H.

Vaughan, Sir Gerard

Smith, Sir Dudley (Warwick)

Viggers, Peter

Smith, Tim (Beaconsfield)

Waddington, David

Soames, Hon Nicholas

Waldegrave, Hon William

Speed, Keith

Walden, George

Spence, John

Walker, Bill (T'side N)

Spencer, D.

Wall, Sir Patrick

Spicer, Jim (W Dorset)

Waller, Gary

Spicer, Michael (S Worcs)

Ward, John

Squire, Robin

Wardle, C. (Bexhill)

Stanbrook, Ivor

Warren, Kenneth

Steen, Anthony

Watson, John

Stern, Michael

Watts, John

Stevens, Lewis (Nuneaton)

Wells, Bowen (Hertford)

Stevens, Martin (Fulham)

Wells, John (Maidstone)

Stewart, Allan (Eastwood)

Wheeler, John

Stewart, Andrew (Sherwood)

Whitfield, John

Stewart, Ian (N Hertf'dshire)

Wiggin, Jerry

Stokes, John

Wilkinson, John

Stradling Thomas, J.

Winterton, Mrs Ann

Sumberg, David

Winterton, Nicholas

Taylor, John (Solihull)

Wolfson, Mark

Taylor, Teddy (S'end E)

Woodcock, Michael

Temple-Morris, Peter

Yeo, Tim

Terlezki, Stefan

Younger, Rt Hon George

Thomas, Rt Hon Peter

Thompson, Donald (Calder V)

Tellers for the Noes:

Thompson, Patrick (N'ich N)

Mr. David Hunt and

Thorne, Neil (Ilford S)

Mr. Tristan Garel-Jones.

Thornton, Malcolm

Question accordingly negatived.
Question, That the proposed words be there added, put forthwith pursuant to Standing Order No. 33 (Questions on amendments), and agreed to.
MR. SPEAKER forthwith declared the main Question, as amended, to he agreed to.
Resolved,
That this House welcomes the steps the Government have taken in a period of economic difficulty to provide elderly people with improved financial support and to continue the development of health and personal social services for them; and pays tribute to the professional staff and volunteers who play a central and crucial role in the care and support of elderly people and their families.

Double Taxation
10.15 pm
The Financial Secretary to the Treasury (Mr. John Moore): I beg to move,
That an humble Address be presented to Her Majesty, praying that the Double Taxation Relief (Taxes on Income) (Sweden) Order 1984 be made in the form of the draft laid before this House on 20th January.
It might be for the convenience of the House if we take this order and the three other income tax orders on the Order Paper together.
Mr. George Foulkes: On a point of order, Mr. Speaker. I do not wish to be objectionable [Interruption.] Hon. Members may be asking why I am changing the habit of a lifetime. If the Minister is to make a substantive statement about any of the orders other than that on the Falkland Islands, I believe it would be for the convenience of the House to take the orders separately, so that we have at least an hour and a half to debate the Falkland Islands order.
Mr. Speaker: When the House agrees otherwise, they must be taken separately. The orders will be taken separately.
Mr. Moore: It might be for the convenience of the House if I make a brief comment on the first order, as some questions have been raised in relation to Sweden, and then proceed to the other orders. if that is for the convenience of the House, I shall be delighted to do so.
The Swedish convention, like the others, will replace the existing convention. The new arrangements are, broadly speaking, a consolidation of the earlier convention and protocols, but with a general updating of their provisions to bring them into line with the developments in the United Kingdom's policy and practice as reflected in our most recent double taxation convention.
The convention on Sweden is comprehensive and designed to cover all the various forms of income which arise in international trade and investment. It is based largely on the OECD model double taxation agreement, with appropriate modifications to take account of the requirements and interests of the United Kingdom and Sweden. By laying rules for the taxation of income between countries and by fixing maximum rates of tax which may be applied by the country of source to certain types of income, the rates will remain unaffected by any subsequent domestic increases in each country. The purpose of double tax conventions is to contribute to the creation of a stable framework for the development of mutually beneficial trade and investment.
There has been some criticism by some Swedish nationals resident in Great Britain on two aspects of the new convention. I shall first briefly describe the effects of the relevant articles and then turn to the points of criticism.
Sweden has formally reserved her position on the article dealing with pensions in the OECD model agreement. This means that she insists on taxing private pensions arising in Sweden in the same way as she is entitled under the OECD rules to tax Government or social security pensions arising there. The United Kingdom would normally follow the OECD principle in relation to occupational pensions, which provides for them to be taxed only in the state in which the recipient is resident, but in this case article 18 of the agreement provides that Sweden should tax

919
occupational pensions flowing to residents of this country. But, to take account of the higher Swedish tax rates, the convention provides for a deduction of one fifth of the pension in computing the Swedish tax liability. This means that, broadly speaking, the amount of tax payable is about the same as it would have been if the pensions had been taxed by the United Kingdom. The amount of tax involved here is small and the provision does not affect pensions paid by United Kingdom bodies.
On capital gains tax, a provision has been included at Sweden's request, which will, subject to certain conditions, allow Sweden to tax Swedish nationals resident in the United Kingdom on gains arising from the sale of shares in Swedish companies. That provision is aimed at countering a form of tax avoidance which can arise when an individual changes his country of residence immediately before the disposal of large shareholdings. The result can be that no tax is payable in either country because of the manipulation of the dates of sale of shares and the change of residence. One of the objectives of double taxation conventions is to prevent international tax avoidance, and in meeting Sweden's request we were acting in accordance with accepted policy and practice. Broadly similar measures have been included in several of our more recent conventions.
I can understand the feelings of those members of the Swedish community who are concerned about these two provisions. Nevertheless, I think the criticisms of these features are exaggerated, and they fail to take account of the place of the two articles in the agreement as a whole. Any negotiation has to take account of the interests and priorities of each side. For the United Kingdom a major interest was in oil-related activities—where we secured substantial benefits, with which I will deal more fully in a moment. For Sweden, a major priority was the way in which Swedish nationals abroad were taxed on private pensions and could seek to avoid their capital gains tax. In the give and take of negotiation, we had to recognise the strength of the Swedish Government's feeling in relation to pensions, and m relation to capital gains.
Against that background, I consider that the criticisms of the pensions article are ill-founded. I should emphasise that the broad effect of the provision on the group of individuals concerned is that their tax bill in relation to their pensions should be no higher than if the existing convention had continued in force. This is the result of the one fifth deduction in the amount of pension subject to Swedish tax in article 18(i) of the convention. I do not think the criticisms of the article do sufficient justice to the effects of this one-fifth deduction. Nor do they do sufficient justice to the efforts the United Kingdom Government made to secure it.
The Memorandum circulated to hon. Members criticises the Government for failing to fulfil the terms of an assurance given by the then Chancellor of the Exchequer in March 1982 that
"every effort will be made to ensure that the terms of the proposed Convention will prove satisfactory both to the persons directly affected by them and to the interests of the United Kingdom".
It also suggests that the Government failed to take account of the representations that had been made by members of the Swedish community.
920
In fact the contrary is true. Following the former Chancellor's assurance, the United Kingdom renegotiated the pensions and capital gains tax articles, and secured substantial concessions from Sweden in both respects. On pensions, we persuaded Sweden to agree to the 20 per cent. deduction in the taxable amount of private pension paid in Sweden to Swedes resident in the United Kingdom, where there had been no such deduction in the first-stage negotiation. The 20 per cent. deduction achieved the objective of ensuring that those receiving these pensions would suffer no more tax under the agreement than they would have experienced if their pensions had been taxed by the United Kingdom. If there were no pensions provision in the new agreement those concerned would have to pay tax on their pension at the full Swedish rate.
There was also a substantial improvement in relation to capital gains tax. There are 20 countries where our treaty includes an anti-avoidance capital gains tax article on the line of the United Kingdom—Sweden provision, so it is not correct to say that this is an exceptional provision. The only difference between the Swedish and other agreements is in the period for which this anti-avoidance rule runs. Normally it is five years. In the first stage of negotiation, Sweden insisted on a 10-year period. After the former Chancellor's assurance, we re-opened negotiations on this point also and secured a reduction to seven years. This represents a substantial improvement.
As I have said, the relatively minor concessions on occupational pensions and capital gains have to be seen in the context of the convention as a whole. A major benefit here is in the taxation of oil activities. The new convention, for the first time, covers the continental shelf, and contains an article enabling a state to tax exploration and related activities taking place on its continental shelf, even where those activities are not carried on through an actual permanent establishment. Whilst the provisions are, of course, reciprocal they will be of special benefit to the United Kingdom. Oil activities on the Swedish continental shelf are, of course, not as large as those on the United Kingdom shelf, and the involvement of Swedish enterprises in exploration of the United Kingdom continental shelf is growing.
Without these new provisions, the potential tax loss to the United Kingdom Exchequer could run into some millions of pounds. On dividends, the withholding rates to which Sweden has agreed are very favourable for United Kingdom investors and, under our existing policy, this enabled us to make available the United Kingdom tax credit to Swedish portfolio and direct investors in this country.
There has also been some complaint that the text of the convention has been officially available for discussion in Sweden for some time, whereas it has not been so available in the United Kingdom. The reason is simply the effect of the difference in parliamentary conventions in the two countries.
In Sweden, the agreement is available for public inspection as soon as it has been formally approved on behalf of the Government. In the United Kingdom, it is a breach of parliamentary privilege for the text of the agreement to be published until an order has been laid before the House.
Dr. Alan Glyn: Surely anyone could have obtained the text in Sweden, as it was freely available there.
Mr. Moore: My hon. Friend is right. In his capacity as chairman of the British-Swedish Parliamentary Group, he has been deeply involved in this issue and has made sure that all the relevant arguments were made. He has played an active role in this matter.
I trust that the information I have given shows why, despite the criticisms, we regard this as a balanced and worthwhile convention, and I commend it to the House.
10.25 pm
Mr. Jeff Rooker: I shall be equally brief, perhaps even shorter than the Minister. I believe that in his remarks the hon. Gentleman has met the substance of the complaint in the notes circulated yesterday to all hon. Members by the Committee for Swedes Living in Britain.
This must obviously be a cultural shock for Swedes living in Britain—an extremely closed society—given that Sweden has had freedom of information legislation for more than 200 years and that individual tax returns are open and available for public inspection. Therefore, Swedes must have a considerable problem coping with our arrangements.
As the hon. Member for Windsor and Maidenhead (Dr. Glyn) pointed out, I imagine that Swedes living here are in touch with their fellow citizens in Sweden. I therefore suspect that the text of the agreement could easily have been obtained, as a result of which I do not think that their complaint holds much substance.
Page 2 of the note states that in excess of 25,000 Swedes and their families are living in Britain and
"Many of these are of retirement age".
Exactly how many? How many are affected by the change in the pension arrangements? This a perfectly acceptable change given that they will not be called upon to pay any more tax than they would have paid had the agreement not been changed in view of the 20 per cent. tax deductible element.
Double taxation agreements have two functions—to stop an individual or a company from paying double tax and to stop what can sometimes be tax avoidance on a massive scale. I understand from the notes that were available with the order in the Vote Office that the United Kingdom could not have taxed the capital gains. Therefore, it is necessary for the Swedish Government to levy tax. Otherwise that massive loophole could have been exploited by tax avoidance experts who abound in this country, mainly on the Conservative side of the House — [HON. MEMBERS: "Oh"] If anyone wants to challenge that, I am happy to debate it, and we shall no doubt do so in the weeks ahead.
The oil and continental shelf aspect of the agreement is of benefit to the United Kingdom. There must be compromise in coming to these arrangements. As I have said, I believe that the arguments advanced by the Committee for Swedes Living in Britain have been met, but I should like to know how many pensioners are affected, if that figure is available.
10.29 pm
Mr. Robert Rhodes James: I thank my hon. Friend the Financial Secretary for his statement. The basis of the order is an agreement between Her Majesty's Government and the Swedish Government relating to the Swedish community in this country. That raises much
922
wider implications for other communities resident in this country, who thought that they were here under different arrangements from those that were subsequently made.
I say to my hon. Friend with respect that, given the fact that we wish to encourage people from abroad to work and live in this country, we should be careful about making arrangements, after they have come here, that could possibly affect the attraction of this country to the very people and investment that we need.
10.31 pm
Mr. Eric Deakins: I should like to ask the Minister three questions.
First, how many other double taxation conventions have similar provisions in relation to pensions in which the United Kingdom is involved? Secondly, will the Minister comment on the allegation in the memorandum that we have given way on the pension provisions at the request of the Swedish Government after negotiations, whereas the Swiss, French and perhaps other Governments in western Europe have not done so, and have refused to concede to Swedish demands? Thirdly, will the Minister comment on the suggestion in the memorandum that there may be an infringement of rights that could give rise to litigation before the European Court in respect of non-Swedish nationals resident in Britain who would be covered by the terms of this agreement?
10.32 pm
Mr. Mark Wolfson: I should like an assurance from my hon. Friend the Financial Secretary about the actions proposed in the order. It departs from the normal OECD arrangements about people being taxed in the country in which they reside. The principle involved appears to be a departure from the situation in other similar treaties.
As I understand it, part of the negotiation was concerned with achieving a rate of tax on pensions for Swedes resident in this country that was no higher than they would have paid in Sweden. Hence, as the Minister described, there is the one fifth factor taken into account before payment of tax. How is that affected by possibly increased rates of taxation in Sweden in future, which might put residents here at an unfair disadvantage?
10.33 pm
Mr. Moore: I shall try to respond to all the points that have been made. If I can, I shall come back to some aspects in detail.
It is extremely difficult to be precise about the numbers, but according to the note that we received there are approximately 25,000 Swedes in the United Kingdom. I am advised by the Swedish Government that the numbers of those receiving pensions could not be over approximately 250. That figure is on the high side, so that is the sort of figure that we are discussing.
With regard to benefits, I thought that I stressed that the renegotiations mean that for the benefit as per the 1960 existing double taxation rate as opposed to the rate that supersedes it, the arrangements were maintained. However, conditions changed, with the discovery of oil in the North sea and the development of our continental shelf. When there are such developments, every nation has constantly to update its tax treaty arrangements. That is accepted and regarded as perfectly normal, especially in this instance, where the citizens resident here are not disadvantaged.

923
The aspect of pensions is outside the normal provisions of the OECD. I explained that in my speech. I said that it seemed that there was a need for a balance of national interests to the extent that one sought at the same time to protect foreign citizens who are resident here, and welcome. I thought that that had been achieved. That is an important point.
I cannot comment on the suggestion about litigation. That supposition is made by those who sought to write to hon. Members. I shall confirm it in writing to my hon. Friend the Member for Sevenoaks (Mr. Wolfson), but in my experience the United Kingdom Government have not given arrangements to other countries that are similar to the pension requirements of the Swedes.
I cannot make assumptions about what other nations do, and I have not investigated the attitudes of the Swiss. However, many of the arrangements relate to the timing and the position of their existing double taxation arrangements. They may have a more up-to-date arrangement, or it may be in process of renegotiation. My hon. Friend is right to draw attention to the fact that, in terms of the debate, this is an acceptance of a Swedish requirement. The basis of these arrangements is to seek to negotiate reliefs from taxation. If there were no such arrangement, the citizens in question living here would be even more disadvantaged. My hon. Friend asked about the situation if there were to be a higher rate of taxation
924
applying in Sweden. I can only say—I will confirm this in writing—that we are talking about existing pensions. The mitigation negotiated by the Government was a diminution of the existing pension by 20 per cent. and therefore is not affected by Swedish tax rates. Swedish tax rates can go up and down, as can those of the United Kingdom. That is an accepted feature of double taxation agreements.
If I have not answered any points in full, I will seek to do so by writing to the hon. Members concerned.
Question put and agreed to.
Resolved,
That an humble Address be presented to Her Majesty, praying that the Double Taxation Relief (Taxes on Income) (Sweden) Order 1984 be made in the form of the draft laid before this House on 20th January.
Address to be presented by Privy Councillors and Members of Her Majesty's Household.

DOUBLE TAXATION RELIEF
Resolved,
That an humble Address be presented to Her Majesty, praying that the Double Taxation Relief (Taxes on Income) (Luxembourg) Order 1984 be made in the form of the draft laid before this House on 20th January.
That an humble Address be presented to Her Majesty, praying that the Double Taxation Relief (Taxes on Income) (New Zealand) Order 1984 be made in the form of the draft laid before this House on 20th January.—[Mr. Moore.]
Addresses to be presented by Privy Councillors and Members of Her Majesty's Household.

Double Taxation (Falkland Islands)
Mr. Deputy Speaker (Mr. Ernest Armstrong): Mr. John Moore.
Mr. George Foulkes: Corunna.
10.37 pm
The Financial Secretary to the Treasury (Mr. John Moore): The hon. Gentleman refers to a great British victory. It began as a defeat, but ended as a victory.
I beg to move,
That an humble Address be presented to Her Majesty, praying that the Double Taxation Relief (Taxes on Income) (Falkland Islands) Order 1984 be made in the form of the draft laid before this House on 20th January.
Our arrangements are slightly different from those that I expected, and I shall now proceed rather more slowly.
I should explain to the House why we have double taxation arrangements with the Falkland Islands. The Falklands are of course—like all dependent territories—autonomous in fiscal matters and have their own tax system. It is clearly, therefore, just as advantageous to both sides to have an arrangement as it is with any other countries.
The existing arrangement—it is called an arrangement in the case of a dependent territory rather than a convention—was amended in 1968 and 1974 but is now rather dated. The Falkland Islands authorities approached us for a new arrangement to take account of changes which they were contemplating in their tax system, particularly the special exemptions for investment in their "pioneer industries". We were of course more than happy to pursue negotiations, and the new arrangement now before the House for approval is the outcome.
Mr. Foulkes: The Minister is being very helpful in explaining why we must have a double taxation arrangement with a dependent territory. Could he explain to us, very briefly, what double taxation arrangements we have with Jersey, Guernsey and the Isle of Man?
Mr. Deputy Speaker: If the hon. Gentleman strayed into that, he would not be referring to the convention that we are discussing.
Mr. Moore: As you, Mr. Deputy Speaker, have reminded me, I should try to stick to the particular case. When I wind up the debate, if there is a question about the nature of other areas where we have arrangements with dependent territories, I will attempt to answer it.
The arrangement with the Falkland Islands contains an important new provision which permits credit to be given against United Kingdom tax liabilities for tax which has been relieved by the islands under the provisions to attract investment in their pioneer industries. In other words, United Kingdom tax will be reduced by the amount of the tax that would have been paid in the Falkland Islands on the income and profit in question but for these pioneer reliefs. Similar double taxation agreements are negotiated with most developing countries. Relief of this kind is already an important feature of a number of our double taxation agreements, and I hope it will have the support of the House.
There is no separate Falkland Islands withholding tax on dividends flowing to United Kingdom residents. But,
926
subject to the other provisions in the arrangement, Falkland Islands tax is chargeable on individuals at graduated rates on all income from the Falklands, on a similar basis to United Kingdom tax. Any excess of the Falkland Islands tax credit on dividends over the individual's final liability there is payable to him. Individuals resident in the Falkland Islands are entitled to the tax credit on United Kingdom dividends, and the rate of United Kingdom tax is limited to 15 per cent of the dividend, plus tax credit. In the case of companies, the position in both countries is the same—there is no tax on dividends flowing to the other country and no tax credit.
The House might find it helpful if I mention tax arrangements in relation to United Kingdom troops and construction workers. It has been the subject of some interest lately. Members of Her Majesty's forces serving in the Falkland Islands remain liable to United Kingdom tax on their remunerations. Under tax legislation, their duties are treated as being performed in the United Kingdom, even though carried out abroad, and they do not therefore qualify for the foreign earnings allowance. Overseas allowances to compensate for the additional cost arising from postings abroad are exempt from United Kingdom tax.
For construction workers, the Falkland Islands Executive Council has agreed not to tax the wages of workers on construction projects in the islands and will introduce a special ordinance to give formal effect to that arrangement. For United Kingdom tax the normal rules will apply. If they are resident in the United Kingdom their earnings will be liable to United Kingdom tax, subject to the appropriate foreign earnings deduction, and if they are not resident in the United Kingdom their earnings will be exempt from tax.
Mr. Tam Dalyell: I do not expect the Minister to answer this question off the top of his head. Did such arrangements apply, for example, to the construction workers of the 1950s and 1960s who went out to RAF Gan, or is this a new arrangement?
Mr. Moore: I do not know. There is some confusion here in that where a double taxation agreement is in place the taxation locus of the worker is not as relevant as the decision taken, in this case, by the Falkland Islands Executive Council in regard to the construction workers. It simply means that United Kingdom tax rather than Falkland Islands tax is paid and there is a credit against the worker's pay later. The net effect, theoretically, for the worker in regard to different residences is the same. I shall try to answer the hon. Gentleman's specific point.
Some right hon. and hon. Members might ask why there is some retrospection to 1982. The text of the arrangement was agreed at official level in May 1981. It seemed likely that all the necessary formalities would be completed by the end of 1981, and it was agreed that the arrangement should have effect from 1982. In the event it proved impossible for the Falkland Islands Executive Council to complete its procedures during 1981. The invasion meant that it was not until last year that the Falkland Islands Executive Council approved the arrangement. In the circumstances, it is considered appropriate that the arrangement for the tax relief for which it provides should have effect from the originally intended date.

927
The House might find it convenient if I comment on the double taxation arrangements. Whether a person is a resident of the Falkland Islands or of the United Kingdom is decided by the respective domestic laws. When a person is resident in both, paragraphs 4(2) and 4(3) provide rules for the problem, and paragraph 4(1) refers to laws and how they apply to the Falkland Islands. The Falklands have their own laws which are called ordinances. One of them provides that the general statutes in force in England on 22 May 1900 are enforced in the colony in so far as local circumstances permit and provided that they are not inconsistent with or repugnant to any local ordinance. Such ordinances cover a range of topics, including income tax. In addition, the rules of common law and equity which are applicable in England are also applied by courts in the Falklands. Moreover, some United Kingdom statutes and Orders in Council apply directly or have been extended to the Falkland Islands, whereupon they become part of the local law and take precedence over local ordinances.
There has been some suggestion that the Falklands might be seen as a tax haven. That is obviously untrue as the Falklands show none of the characteristics of a tax haven. They have a comprehensive tax system which covers corporations and individuals. The rates for both are broadly in line with those in the United Kingdom. For those with particular interests in the nature of tax havens, it may be helpful if I remind the House that with certain dependent territories such as Bermuda, the Cayman Islands and the British Virgin Islands there are no double taxation agreements, although there once were. Those areas are regarded as tax havens because no taxes or low taxes apply and we regard double taxation agreements as inappropriate in those circumstances.
Mr. Foulkes: That is an amazing statement. Indeed, it is outrageous. Why does Her Majesty's Treasury regard it as inappropriate to have double taxation arrangements for the Cayman Islands? Why do we foster — nay, encourage—the development of that means of avoiding United Kingdom tax? In Committee on the last Finance Bill the present Chief Secretary insisted, parrot-like, week after week, "We need the money." I see that the hon. Gentleman remembers that. If so, why do we not get rid of the Cayman Islands tax haven and introduce a proper tax arrangement with those islands?
Mr. Moore: As I tried to say at the beginning, but the point clearly was not taken by all hon. Members, double taxation arrangements are for relief, not for raising taxes. That is what we are discussing today. I was trying to show why it was not appropriate, despite public press and other comment, to consider arrangements of a tax haven nature in relation to the Falkland Islands.
Mr. Foulkes: Will the Minister give way?
Mr. Moore: No, I should like to finish. I have given way several times.
Mr. Foulkes: On a point of order, Mr. Deputy Speaker.
Mr. Deputy Speaker: The hon. Gentleman did not say so before, but if it really is a point of order, I will, of course, take it.
Mr. Foulkes: The Minister has said that we are talking about an arrangement relating to the avoidance of double
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taxation. If the Minster reads the schedule—I am sure that you, Mr. Deputy Speaker, have read it—he will see that it refers also to
"the Prevention of Fiscal Evasion".
That means tax avoidance.
Mr. Deputy Speaker: We are talking about fiscal evasion in the Falkland Islands, not in other territories.
Mr. Moore: Clearly, I was unwise to try to be helpful and I retract the attempt. I repeat that the arrangements in the Falkland Islands in no way resemble those of a tax haven.
I believe that the terms of the order take proper account of the policy requirements both of the United Kingdom and of the other territory concerned. I commend it to the House.
10.47 pm
Mr. Jeff Rooker: I, too, shall be brief. We make no apology for dealing with this on the Floor of the House rather than in Committee upstairs where it would probably have gone through on the nod. As the situation in the Falkland Islands has changed somewhat in recent years, every parliamentary opportunity to raise matters relating to the Falklands must be taken for the benefit of hon. Members who wish to discuss such matters.
The Minister said that the reliefs were backdated to 1982 as a result of requests from the Falkland Islands Council in 1981, presumably due to the pioneer industries there. I suspect that that flowed from the developments which were to follow the first Shackleton report back in the mid 1970s. There was to be expansion in the Falkland Islands, although the population was declining.
Since 1982, and for the foreseeable future, the economic situation in the Falklands has been changed out of all recognition compared with what must have been envisaged when the agreement began to be discussed by the Falkland Islands Council and the British Government. Are the Government satisfied that, despite the build-up of the Falklands economy in the meantime, which is bound to have received a fillip from the additional number of people, contractors and companies there, all the points are covered by the agreement? As I understand from the small print, this agreement cannot be changed for at least five years, and cannot be reneged on by the United Kingdom Government or the Falkland Islands Council. Simply because of what is happening there now, we are talking about millions rather than hundreds of thousands of pounds. That is an important point.
The Shackleton report and the economic study are partly relevant to the debate because of the flow of funds between the Falklands and the United Kingdom. The position has changed dramatically since 1974, because until then the United Kingdom gained—some would say that it ripped off the Falklands — and the flow of taxation was generally all one way. From 1974, the flow has gone the other way. Do the Minister and the Government see this changing as a result of the changes implied in the order?
Another relevant point comes in paragraph 3.72, which says:
"Sound independent, professional financial advice is also generally lacking in the Falklands".
If that is so, given that the Falkland Islands Trading Company, which is owned by the Falkland Islands

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Company, acts in effect as a banker for its employees and many others in the islands — individuals, farming companies and partnerships — what steps have the Government taken to ensure that the boom in the amount of money now circulating there is not being siphoned off? This is relevant because the position has changed so dramatically.
It may be that there is now an experienced bank manager, as the Shackleton report suggested that
"an exprienced bank manager would be able to provide this missing ingredient."
Is this matter being taken care of in the discussions between the Government and the Falkland Islands Council? That point has to be answered by the Minister.
I have no doubt that my hon. Friends will raise the matters that have been reported in the press recently. Last weekend, there were reports of allegations that some of the payments to people in the Falklands are being paid via banks in Jersey. That is relevant to matters in the agreement, simply because of the number of bodies and the earning power of the Falklands.
On the other hand, a couple of weeks ago, in business questions, we heard about the appalling conditions of some craftsmen who, according to the Daily Telegraph of 10 February, are being treated like animals. They are paid £250 a week, which sounds a princely sum, but, given their appalling conditions, are all the loopholes being blocked in the sense that no one can swap non-taxable pay in exchange for working in such conditions? That point has also to be answered.
Would the position in this double taxation order change in any way if or when normal financial arrangements with Argentina re-emerge? There must be an economic link soon, and, as a result of any discussions that the Government must be having with Argentina, will it be necessary to make changes in the order?
The Minister must have come prepared to answer my next question. Are any Government payments for work in the Falklands or associated with the Falklands economy, whether it be salaries, payments for properties or to construction workers, management fees to individuals or companies, being paid other than in the United Kingdom or the Falklands? If the answer is no, there will be no problem about tax avoidance because of the arrangements in this order. The Government must be able to answer that question, because, by and large, they are funding the flow of money.
The Falklands economy has changed, and will change out of all recognition this year and in the next couple of years, compared with what it was when the agreement began. Therefore, it is right for the House to deal with the matter, so that it can be properly reported to the people in the Falklands, who are not unconnected with this.
The Minister talked about tax havens. It is worth pointing out to the Government that the 1976 Shackleton report recommended that the Falkland Islands should not seek to become a tax haven. The implication is that if the Falkland Islands wished to become a tax haven, the Government could do nothing to stop them, which would abrogate this order.
How many other double taxation orders does the United Kingdom have with groups of 2,000 people round the world?
10.55 pm
Mr. Tam Dalyell: The Minister said that the Falkland islands were autonomous in fiscal matters. I echo the point of my hon. Friend the Member for Birmingham, Perry Barr (Mr. Rooker): where else are about 1,800 people autonomous in fiscal matters' It is a strange set-up, but be that as it may.
I must take responsibility for mentioning the allegations that have been made that money is being paid direct from the earnings of those who are engaged in construction and other works in the Falklands to Jersey banks. No hon. Member should minimise the rough and tough conditions in which those people are working. The reports are of inadequate accommodation, eight people sleeping to a portakabin, living space of 3·75 metres by 1·75 metres, cockroaches, flies and heaven knows what, and —it is no laughing matter—a considerable amount of diarrhoea and infection. In those circumstances, we would not wish to begrudge those who are doing the work. Nevertheless, whatever the conditions, it is deeply unsatisfactory that some people—not all: that is what makes it the more invidious—should have their money paid into banks in Jersey.
This happens not only in the Falkland Islands. I know a good deal about oil rigs, simply because in my constituency much North sea oil comes ashore at Hound point. A number, possibly an increasing number, of oil rig workers are paid through banks in Jersey. What is the Treasury's information about this, and is there a distinction made between British banks and, for example, in Jersey, the Bank of America, Citibank, and the Banque Nationale de Paris?
Since the dismantling of exchange controls, there is only one reason for paying money into banks in Jersey, and that is tax evasion. The question arises: is this equitable, and is it tolerable in terms of the Government's contract? This is a difficult area of contract law. People who pay, in this case the Government, the amount of money that is now pouring into the south Atlantic should at least make it a condition that contractors, subcontractors and possibly even sub-subcontractors should pay it into British banks. What people do with the money once it has been received is entirely their business. If they like to invest it in the United States, that is their business. It is intolerable that some favoured people should be allowed to receive their pay through Jersey banks.
If some construction workers are allowed to do this, what about the men of the Royal Navy? If that happens, why should Royal Navy men, having equal hardship and possibly equally uncomfortable lives, Royal Marines or Royal Air Force service men not receive their service pay through the Jersey banks? What is sauce for the goose is sauce for the gander, and there are personal problems of equity. I am told that a considerable hassle arises from this practice. It is insufferable that those who are working equally hard should find that the people working alongside them are getting markedly more pay in real terms than they are. There is an issue here, and we await the Minister's reply with some interest.
I want to raise two other points. The first is the taxation of people working on British contracts for vessels flying a foreign flag. The Merchant Navy and Airline Officers' Association contacted me. Eric Nevin, who is well known to Treasury officials, wrote a formal letter to the Minister of State for the Armed Forces:

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"The MNAOA is particularly interested in the replies concerning the charters by the Ministry of Defence of British and foreign flag ships for work in the South Atlantic. We have already voiced our concern at the number of foreign ships being used by your department and in October last year we met Lord Trefgarne to discuss this matter. It is interesting to note such concern now being raised in Parliament. However, our members presently working in the Falklands area continue to express their concern on this subject. They have seen the foreign flag vessels now on charter to your department and find it hard to believe that no British flag alternatives were available. We are especially concerned by your department's refusal to reveal the costs of such charters. We feel this is contrary to the methods by which the freight market operates. Our members have also expressed the belief that, as tax payers, such information should be readily available and withholding it cannot be justified as being against the public interest."
On behalf of the Merchant Navy and Airline Officers' Association, I should like to ask the Treasury what is the tax position of people working in ships like the Herta Maersk or other chartered ships under foreign flags. Do we understand that they pay no UK tax? My guess is that no UK tax is paid by people working in ships under foreign flags. If that is the situation, it should be answered. I acquit the Minister of having to answer what I suspect is a Department of Trade and Industry point on the general issue of the use of foreign ships, although if British ships are available, given the unemployment among British seamen, and given the attitude of the General Council of British Shipping, I should have thought that the Treasury, being the most important Department of Government, would at least have made its policy clear.
Mr. Rooker: My hon. Friend should take note of paragraph 8, which states:
"Profits from the operation of ships or aircraft in international traffic shall be taxable only in the territory in which the place of effective management of the enterprise is situated."
That precisely covers the point that my hon. Friend is raising.
Mr. Dalyell: Not for the first time, I receive great help from my hon. Friend. I should like an answer to that point.
Concerning the situation in the airport, it ought to be known to the Treasury that, for all the argument that the House is hearing, there is now the greatest doubt among serious people, such as airline pilots, as to the safety factors in this great construction work. I shall quote briefly:
"It is a fact that the official figures in use worldwide (due to commercial pressures) allow legal departures with only this one second thinking time. It is also a fact that more often than not there is another 2,000ft or so of runway beyond the 'required' length, this will not be the case at Falkland."
That is an airline pilot making a statement about the safety of that vast construction work—
Mr. Deputy Speaker: Order. I do not think that the safety aspect is part and parcel of the debate tonight.
Mr. Dalyell: I am concerned with construction and the pay of the construction workers. However, I always know when to take a hint, so I shall not abuse the House.
11.6 pm
Mr. George Foulkes: I am grateful for the opportunity to say a few words.
Two of the double taxation arrangements that we have been discussing have been with autonomous, sovereign countries. I find almost Gilbertian the thought of the
932
United Kingdom Government, which represents 50 million people, negotiating double taxation arrangements with a colony of 1,800 people. I cannot remember how many people work on the island, but taking account of the retired people, the children and the women who do not work, I doubt whether there are more than 500. That is not a significant tax base.
Rather more important is whether we are dealing with an autonomous country. How can we negotiate double taxation arrangements with a colony? That raises issues of principle that we shall have to explore—and I accept your ruling on this, Mr. Deputy Speaker—in more detail on some other occasion. As the Minister is responsible for this double taxation arrangement, will he tell us exactly with whom on the Falkland Islands it was negotiated? Which competent authorities negotiated it on behalf of the Falkland Islands Government?
I suspect that we go round in a circle. The Falkland Islands Government consists of two bodies — the Executive Council, commonly known as EXCO, and the Legislative Council, known as LEGCO. The Civil Commissioner, formerly the Governor, Sir Rex Hunt, chairs both those bodies. The Civil Commissioner is an appointee of the Foreign and Commonwealth Office—a career diplomat of the United Kingdom Civil Service. That means that we are negotiating with ourselves. That is a strange position.
This order comes before the House of Commons. But when the legislation of the Falkland Islands is being discussed, it is considered by LEGCO with representations from EXCO, and then has to come before the Foreign Secretary for approval. So it is a little bit of a farce that we are negotiating and concluding a double taxation agreement with ourselves.
I want the Minister to tell me with whom it was negotiated. What discussions took place, over what period of time? What representations were made on behalf of the Falkland Islands Government and what account was taken of them? Or is it really, as I suspect, something drawn up by the United Kingdom Government and laid down and accepted by both sides—which are really the same side in the end?
I had an exchange earlier with the Financial Secretary. As my hon. Friends are aware, I do not relish harsh exchanges. In the light of the comments that I made then, the Financial Secretary will probably agree that part of the reason for a double taxation arrangement such as we are discussing is to do with the prevention of fiscal evasion. In paragraph 29, referring to the exchange of information, it is stated:
"The competent authorities of the territories shall exchange such information (being information which is at their disposal under the respective taxation laws in the normal course of administration) as is necessary for carrying out the provisions of this Arrangement or for the prevention of fraud or the administration of statutory provisions against legal avoidance in relation to the taxes which are the subject of this arrangement."
It is, therefore, for the prevention of fraud and tax avoidance. That being so, will the Financial Secretary say what precedent this double taxation arrangement provides for negotiating — if that is the right word — double taxation arrangements with, for example, the Cayman islands, Bermuda, Hong Kong and other dependent territories? Further, what precedent is there for negotiating double taxation arrangements with Jersey, Guernsey and the Isle of Man, which are not dependent territories but which are, by a strange constitutional arrangement, under

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the general aegis of the Home Secretary? I should have thought that the United Kingdom Parliament, with its paramount responsibility for the dependent territories and offshore islands, could negotiate and conclude double taxation arrangements of the type that we are discussing tonight with those areas.
I am using the Falkland Islands as an example, because it provides a useful precedent. When we were debating the Finance Bill, as it then was, and Ministers were explaining the need to raise taxes on, for example, chewing tobacco —my hon. Friend the Member for Glasgow, Cathcart (Mr. Maxton) will recall that I fell asleep during that discussion—and to raise money by changes in capital gains tax and capital transfer tax, we received no assurances about swift and certain action to deal with tax evasion and avoidance and fraud in, for example, Jersey, Guernsey, the Isle of Man, Bermuda, the Cayman islands or Hong Kong.
If the Government want to raise money, they should try to get hold of the hundreds of millions, if not billions, of pounds that are lost by tax avoidance, evasion and fraud through the use of tax havens, instead of clouting the old people by cutting their housing benefit. Only recently we witnessed in this House £200 million being taken from the elderly, the disabled and others in housing benefit.
The Financial Secretary will be aware that a deputation of Canadian pensioners came here recently. I hope that the sort of arrangements in the provisions that we are discussing tonight will be taken into account when the Government are considering representations from United Kingdom citizens, many of whom worked all their lives in this country and who are now in Canada but who are not getting the benefit of pension indexation.
I hope that the Financial Secretary will make representations to his colleagues at the Foreign and Commonwealth Office about the pay differentials that exist on the Falkland Islands. Falkland Islands residents doing exactly the same jobs as people from the United Kingdom on short-term contracts are being paid half as much. Obviously that is relevant to taxation. If there is a common taxation regime and the native Falkland Islanders are being paid only half as much for the same jobs as those whom we send out to those islands, there are great inequities.
11.15 pm
Mr. Dennis Skinner: It seems that the order is concerned to ensure that those on the Falklands and in Sweden, for example, pay only single tax and no more than that. They may even pay less than single tax. To my mind, the order is wrongly titled. The Minister should make up his mind what effect the order has. He tried to explain to my hon. Friend the Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes) that it is the intention to give those living on the Falkland Islands the opportunity to pay only single tax and not to be subject to greater taxation than that. Are we on an even keel now?
Mr. John Maxton: You are not getting much response, Dennis.
Mr. Skinner: I do not think that the Minister is sure what effect the order has. I understand that the principle behind the order is to make it clear to those who living on the Falklands that they will not be penalised by taxation
934
to the extent that they would be if they were living in Britain. The purpose is to protect single taxation and not to introduce double taxation.
There are those in the poverty bracket in Britain who are taxed at 80 per cent. if they have some money in the bank. That is the result if they have a windfall and they have more than —3,000 in the bank. If someone in that position is in receipt of —30 net a week and he is found through some circumstances to have more than —3,000, he will be subject to about 80 per cent. taxation. Will anyone on the Falklands be penalised in the same way as those in this country when they are in receipt of a few extra bob, when their occupational pension or disablement pension increases?
That is why it is more than important to take up the discussion about the effect of putting money in the bank. It seems that, in the light of the order, there will not be the 80 per cent. taxation to which those in the poverty bracket in Britain are subject. If the money goes info a bank in Jersey, no tax will be paid at all.
The concept of "permanent establishment" is relevant to the prefabricated buildings that are being erected on the Falkland Islands and the money that will be made from that. The contract was awarded to a Swedish firm last year. It has a sort of front organisation called James Brewster Associates, an exhibition firm that is based in Britain and which took on the job of supposedly building the units. In fact, a Swedish firm had gained the contract, although it did not submit the lowest tender. That gave rise to some people saying, quite properly, that the Prime Minister was not batting for Britain when that tender was accepted. She was batting for Sweden, and James Brewster Associates has never built a house during its existence. I want to know what will happen to the money that will be made from the erection of the units.
We have discussed a double taxation order for Sweden and the units for the Falkland Islands are being built by a Swedish firm that is fronted by James Brewster Associates. That is a company that did not file its accounts for two years on the trot.
Mr. John Wilkinson: Is this in order?
Mr. Skinner: It is in order, Mr. Deputy Speaker. This matter deals with permanent establishments. That company filed its accounts when pressed to do so by parliamentary questions. How is that company fixed for taxation? One of the lowest tenders came from a firm just outside my constituency, the Hallam group. I thought that the Prime Minister would have batted for Britain, the Hallam group and British workers, but she batted for Sweden.
Mr. Deputy Speaker: Order. I remind the hon. Member that the Swedish order has been resolved.
Mr. Skinner: This is a complicated business. We have just debated an order on double taxation relating to Sweden. A Swedish firm is building prefabricated units in the Falklands. It put in a tender—
Mr. Deputy Speaker: Order. The hon. Member knows that the conditions of tender are not related to this debate. The hon. Member can talk about taxation, the money received and so on, but the conditions of tender are not for discussion.
Mr. Skinner: It is important if a firm is making massive profits from the taxpayer. The Prime Minister and Ministers often say that the Government do not have any money, that it is taxpayers' money. The taxpayers' money will go to that Swedish firm whose costs have increased from £70,000 a unit to £230,000 a unit. How much tax is that Swedish firm paying? How much will it hand over to the Treasury? I should have thought that the Financial Secretary would be glad to grab hold of some of that money.
Will the Swedish firm pay anything? Will the Double Taxation Relief (Taxes on Income) (Falkland Islands) Order, following the Swedish order, allow that firm to get away with almost anything? It is said that it will cost a small fortune to build the prefabricated units. The price has doubled. The Financial Secretary must answer that charge. It is important that the House and the taxpayers know why these massive profits made by that Swedish company will not be taxed. That company will, no doubt allege that it has spent every penny trying to erect those units.
This matter is relevant, Mr. Deputy Speaker. The Financial Secretary should be able to tell the House how much money will come from the firm which won the contract to build the prefabricated units. The same question would apply to all the contractors in the Falklands.
My hon. Friend the Member for Birmingham, Perry Barr (Mr. Rooker) referred to the dramatic changes in the Falklands, and no one can deny that. Will we receive much more taxation from that area? Is it, as my hon. Friend the Member for Carrick, Cumnock and Doon Valley said, that much of the money is being siphoned off to other tax havens such as Jersey, the Channel Islands and the Cayman Islands? Is that why James Brewster Associates won the contract—to siphon off the money on behalf of the Swedish firm?
The Financial Secretary has a duty to tell us how much extra taxation is likely to come from the Falklands because of the increased activity there, the increased amount of monwy in circulation, the building of the airport and so on. Whereas the amount of taxation to be paid previously would have been relatively small, much more tax must now be paid. We should know how much extra income the Chancellor's coffers will receive because of that activity.
11.23 pm
Mr. Moore: We have had an extensive and interesting debate. I do not complain about the degree to which hon. Members were able to spread their wings, because they had the opportunity to do so. I shall seek to contain myself by addressing myself to areas of direct relevance. I shall, as always, later in correspondence deal with any matters beyond double taxation arrangements about which I can help hon. Members.
The hon. Member for Birmingham, Perry Barr (Mr. Rooker) raised a legitimate point of the nature of the pioneering industries and asked whether, in 1978–79, all the activities in the Falklands had essentially changed the character so much that there was a need for a different type of double taxation arrangement. Double taxation in developing countries is geared more to the nature of the economy—agricultural, rural, or those industries in the earlier stages of development. Therefore, I do not see that there has been any substantial change, but the point made by the hon. Gentleman is relevant. He pointed out also that
936
a new agreement could not be produced for five years. Although a five-year life is provided, should circumstances require it, both parties may agree to earlier changes to reflect the new circumstances. I shall take the point on board, but I do not see the need to consider changes at this stage.
The hon. Member also asked whether any changes were needed to help along the path towards normalcy in the relationships between the United Kingdom and Argentina. That is a valid point, but I do not think that a double taxation arrangement that seeks to advance decent business relationships between the two communities would hinder or inhibit that advance. It is a germane and important point. The hon. Member asked about the relationship between the Falkland Islands and the United Kingdom Government, and I shall bring the points that he made to the attention of my right hon. and learned Friend the Foreign Secretary.
The hon. Member asked about future money flows. He talked about Lord Shackleton and his recommendations. The Government's aim is to promote the economic development of the Falkland Islands by following, in large part, Lord Shackleton' s recommendations. The first grant of £31 million announced to the House in December was a result of those recommendations.
A number of questions were asked by the hon. Member for Linlithgow (Mr. Dalyell) and by the hon. Member for Perry Barr about the payment of earnings. That is entirely a matter for the contractors. Where earnings are paid has no relevance to the double taxation arrangements. I am not talking solely about the Falkland Islands. The only material questions is whether the tax which should be paid is being paid. There is no reason why payment in a Jersey bank account should prevent the proper deduction of United Kingdom tax in the normal way. Although not easy to answer it is a different question to that about the location of pay.
The hon. Member for Perry Barr also asked about banking arrangements. I am pleased to say that the First Commercial bank, a branch of the Standard Chartered bank I am advised, has opened in Port Stanley. It was inaugurated by my right hon. and noble Friend, the Minister of State, Foreign and Commonwealth Office when she visited the Falkland Islands last month.
Mr. Dalyell: I do not ask for an answer tonight, but do we have a clear assurance that the Treasury, at least, will study what has been said about payment to Jersey and give a considered reply at the appropriate moment?
Mr. Moore: I can reassure the hon. Gentleman that there is a major difference between the responsibilities and duties of the Inland Revenue to seek and collect taxes due, as they clearly would be in the areas about which we are talking, and those where contractors pay their employees' funds. There is a distinction between the two, but I have heard the hon. Gentleman's point, and I shall study it.
The hon. Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes) dwelt upon the autonomous nature of the Falkland Islands. I shall not discuss his observations about the size of the organisation, but I would point out, in relation to the DTA, that the Falkland Islands Civil Commissioner seeks advice and recommendations from the Executive Council—Exco as the hon. Gentleman called it—about whether to make the necessary order. While not obliged to do so, the Civil Commissioner

937
generally follows the recommendations of the Executive Council. The new arrangement has already been considered and approved by the Executive Council. Formal approval by the Legislative Council is not required.
The hon. Member for Linlithgow asked also about the position of people employed on chartered foreign flag ships. I am advised that earnings from work on foreign flag vessels are regarded as being earned outside the United Kingdom where the ship is involved in international traffic. In those circumstances, the employee is subject to United Kingdom tax if he is resident in the United Kingdom, but not otherwise.
Article 17(3) preserves United Kingdom taxing rights on earnings from employment on United Kingdom-operated ships, and does not remove our normal taxing rights so far as they operate on United Kingdom residents working on foreign vessels.
Mr. Dalyell: Surely the policy consequence is that every effort ought to be made to use ships under a British flag. That is not just the view of those of us who might be critical of the whole operation, but of the General Council of British Shipping, the Merchant Navy and Airline Officers Association, the National Union of Seamen and British shipping interests in general.
Mr. Moore: I could not agree with the hon. Gentleman more on all issues of this kind. I would have thought that the basic objective of all Ministers would be to seek to use United Kingdom material, vessels and activities so long as they were efficient and provided the right service. Any British Minister would share that attitude.
The hon. Member for Carrick, Cumnock and Doon Valley asked many questions, but I would be out of order if I sought to answer them. He seemed to suggest that there was a precedent in relation to this DTA that might be pursued in other areas. I take note of what he said, but it would be wrong to concern myself with other areas when discussing this DTA.
The hon. Member also asked about Canada—not a germane question, but one in which I have an interest. I take note of his comments and will come back to him on
938
that specific Canadian point. He also asked about pay differentials. Much as I would wish to go into that issue, it does not come under my area of responsibility.
Mr. Rooker: I was not aware of the nature of the bank that had opened on the Falkland Islands. In view of the Minister's remarks on shipping, why did not a British bank open on the Falklands? So far as I know, Standard Chartered is an American-owned and controlled bank—[HON. MEMBERS: "No."] It is not one of the big five British banks, and it is certainly not wholly British. Did the Treasury ask one of the big five to go there?
Mr. Moore: That shows that one cannot give good news to all sides of the House. Earlier, I drew the hon. Gentleman's attention to the happy news that a British bank had been opened in the Falklands. I hope that the development of double taxation arrangements of this kind will encourage the further development of other British activities. I trust that the hon. Gentleman's support of the five clearing banks, as opposed to other British banks such as the Trustee Savings bank and the Co-op, will not discourage him from trying to encourage other such organisations from going.
Finally, but by no means least, we had a contribution from the hon. Member for Bolsover (Mr. Skinner). I appreciate that he had to participate in the debate because that excellent United Kingdom firm Coalite is headquartered in Chesterfield. Given that it has about 2,000 employees in the Chesterfield area, we are all concerned about the nature of the subsidiary of that company—the Falkland Islands company. To that extent, I clearly realise that the hon. Gentleman has fully understood the nature of double taxation arrangements and their prime purpose, which is to seek to encourage the development of decent business relationships between communities — in this case, the Falkland Islands and the United Kingdom. Therefore, I am sure that he will join me in commending the order to the House.
Question put and agreed to.
Resolved,
That an humble Address be presented to Her Majesty, praying that the Double Taxation Relief (Taxes on Income) (Falkland Islands) Order 1984 be made in the form of the draft laid before this House on 20th January.

Civil Aviation
11.35 pm
The Under-Secretary of State for Transport (Mr. David Mitchell): I beg to move,
That the draft Air Navigation (Noise Certification) Order 1984, which was laid before this House on 1st February, be approved.
The order, the third of its type, will replace the Air Navigation (Noise Certification) Order 1979. It carries forward the provisions of the previous order, and, inter alia, includes requirements for the first time for supersonic aeroplanes, and sets standards for microlight aeroplanes. As in 1979, it is considerably preferable to have a new comprehensive order than an amending order.
The House will wish to know that the draft order, which is to be made under the provisions of the Civil Aviation Act 1982, will bring into effect new and revised standards agreed following the sixth meeting of the Committee on Aircraft Noise. The draft order also gives effect to EC directives 80–51 and 83–206 on the limitation of noise emissions from subsonic aircraft, which are in line with the International Civil Aviation Organisation recommendations.
In broad terms the order will require new production of older types of heavy propeller-driven aeroplanes to meet the earliest standards for subsonic jets. It will allow aeroplanes up to a maximum weight of 6,500 kg. to be noise certificated to the light propeller-driven aeroplane standards, where the prototype was certified for those standards. It will require derived versions of low bypass ratio engined subsonic jets, mainly the old types, to meet the more stringent standards for derived versions of high bypass ratio engined jets, and it will require further production of derived versions of existing types of supersonic aeroplanes to be no noisier than the parent aeroplane.
The proposed introduction of standards for microlight aeroplanes, which arouses considerable interest, fulfills an undertaking given by my predecessor to the House last March, to be found in Hansard of 29 March, c. 117. While certainly not a major problem, there is no doubt that that relatively new activity is a source of annoyance to communities overflown by those small machines. Some of my constituents have expressed that view. The British Microlight Aircraft Association, the sports controlling body, is conscious of the need to minimise such disturbance, and has co-operated fully with my Department. The proposed standard will, I believe, give worthwhile environmental protection without crippling the sport or impairing the ability of our manufacturers to compete with foreign manufacturers. The remainder of the order carries though the provisions of the 1979 order.
I admit that the order is complex, but that is necessary when dealing with so many categories and related standards. Aircraft noise is, as the House will know, a formidable problem, and the Government have every sympathy with those whose quality of life is affected because they live in the vicinity of an airport. It must also be acknowledged that aeroplane noise is likely to be a nuisance for a long time. Regrettably, some people will have to live with that fact. However, improvements in the overall noise climate have been and will continue to be made, for example, by ensuring, wherever possible" that the ICAO standards that we adopt take full account of advances in noise technology.
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The introduction of the order is a further, admittedly modest, step along that path, but it recognises the interests of users, operators and manufacturers. It is important to bear in mind that a balance has always to be struck between the environmental acceptability of any new noise standard and the technical feasibility and economic cost of its introduction.
On that basis, I commend the order to the House.
11.36 pm
Mr. John Prescott: The Opposition welcome the order, because it continues to reduce the aircraft noise that causes great concern to those who live around major airports. Even at the smaller airports, the microlight aircraft lead to many complaints. We congratulate the Government on resisting the pressures from airlines to delay the introduction of the new noise standards. It is a welcome fact that the standards are before us and will be implemented this year. We all recognise that the environmental issues have to be balanced against the commercial and economic judgments of the flight operators. The order is a modest step forward. It is an improvement, and it is to be welcomed.
As well as asking one or two questions about the order, I want to ask the Minister about other matters of environmental concern which arise directly from the movement of aircraft, as well as the noise that they make.
As the Minister says, the standards are very complex. I remember, in my seaman days, trying to read a safety report about noise in engine rooms. Noise was causing loss of hearing, so there had to be a limitation on the decibel level. I found that report somewhat complicated, but I cannot say that I have any comprehension at all of the meaning of these standards. However, I am advised that they are an improvement.
This is another welcome step forward in properly regulating the operation of microlights. The order is concerned largely with the noise that they make, but other steps have been taken in the past year or so in connection with the standard of the machines, pilotage, licensing and so on. Considerable enthusiasm is going into the development of these new machines, and the conditions for their operation are now being put into a proper regulated form.
This order, unlike the 1979 order, makes no mention of the extension of these improvements to cover helicopters. There is an increasing amount of helicopter activity around our major airports—in particular, on the service between Gatwick and Heathrow. Concern is expressed about levels of noise, and flight movements, in connection with that service. Why have the improved standards not been extended to helicopters?
Secondly, the fine, at £400, is very low. An aircraft operator would not regard that sum as a deterrent or a penalty.
Thirdly, the noise regulations are largely concerned with supersonic aircraft of current design. After the cost of the first supersonic aircraft, one might wonder whether we shall hurry into the growth of supersonic aircraft, but I presume that, with the march of time, we will see such growth. Should not any new generation of supersonic aircraft be designed from the beginning to conform to the noise regulations? That should be one of the factors taken into account in the design. However, the Minister makes it clear that the regulations apply only to present supersonic aircraft, which we identify with Concorde.

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When quieter aircraft use our airports, there will be new pressures on the Minister. Many people in the United Kingdom, representing different interests such as the airline operators and the airports, are already beginning to demand that there should be more movement into Heathrow. Heathrow is a major international airport, the major airport in the United Kingdom. It has been closely involved in the problems of noise and the movement of aircraft.
The Government have in a variety of ways put aviation policy into the melting pot. They have privatised the airlines and possibly, with the British Airports Authority, the airports as well. There is their policy on routes and fares, which is now being reviewed by the Civil Aviation Authority. There is the inquiry into Stansted, and the possibility of a fifth terminal at Heathrow. Many airline operators and regional airports are beginning to demand —for example—a liberalisation of routes. That will lead many of them to demand greater access to Heathrow.
Heathrow is a special problem. Several domestic airlines have already demanded more access to it. The Civil Aviation Authority ruled against such extra access in one case but the Secretary of State overruled it. Airline and airport operators are getting the signal to increase pressure to get access to the hub of our airport network —Heathrow. The great bulk of passenger and freight movement goes through it. If pressure for more domestic flights out of Heathrow builds up, will the Government be forced to do something about movement?
Noise is an environmental consideration, but aircraft movement is another. As recommended by the inspector in 1979, the Government imposed a ceiling of 270,000 flights on the movement out of Heathrow until the fourth terminal was in use. The Minister will be aware that we are now within about 10,000 of that limit and the terminal has not been opened. Although flight movements were fewer in 1981–82 than in the mid-1970s, mostly because of larger aircraft, there will not be a trend to even larger ones, as most economic considerations press in the other direction.
As we are approaching the limit that the Government set for flight movements and as the fourth terminal is not yet open, how do the Government intend to deal with the pressures from the airlines and the airports? I should have thought that they had been encouraged by the Government overruling the CAA.
Dr. Alan Glyn: I am following the hon. Gentleman's argument closely. Does he agree that Heathrow has reached the peak of endurance for the people who live under the flight paths?
Mr. Prescott: I am aware that that is what people around Heathrow feel. I have much sympathy for them. I should have thought that current reviews about alternative airport capacity prove that. We are not sure how capacity will be used. Heathrow can handle more flight movements than the ceiling of 270,000. Those movements are determined by the number of runways and other considerations. A source of anxiety, especially to people in the Heathrow area, is that it is possible to increase the number of flights out of Heathrow. The environmental limit is much lower than the limit imposed by capacity. As we are close to the ceiling, are the people in Heathrow to expect that, in this era of competition and deregulation, the Minister will yield to the competitive
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forces that the Government want to release and increase that ceiling or break into restricted periods and allow night flights, for example? There have been many rumours and this debate gives the Minister an opportunity to say whether the ceiling will be increased.
11.49 pm
Mr. Keith Speed: I thank the Minister for introducing the order. As the hon. Member for Kingston upon Hull, East (Mr. Prescott) has said, it is an important step forward and has considerable environmental implications.
On microlights, I agree with the hon. Gentleman that we are edging towards proper control of this form of activity in which noise is clearly a consideration. It may be outside the terms of the order, but it might not be altogether irrelevant if my hon. Friend the Minister would say a little about how he envisages the microlight sport developing. The order will control the noise aspect, which certainly causes problems in my constituency, but is he satisfied that the safety record and construction regulations are now on all fours with the noise safeguards? Even within the past few days, alas, there have been microlight crashes in various parts of the world and there is still great concern about that aspect.
I also share the hon. Gentleman's reservations about helicopters. They cause noise not only from their engines but from the rotor blades, which in some circumstances produce a sharp crack almost comparable with the noise of a supersonic aircraft. That lacuna needs to be covered in some way and it would be helpful if my hon. Friend the Minister would say something about it.
Another environmental problem has been with us for a long time. When I represented the constituency of Meriden, which included Birmingham airport, I regularly had complaints from people living under the flight path that their gardens were not best served by being sprayed with unburnt paraffin. I do not believe that the order covers that, but even efficient modern engines produce a great deal of black smoke on take-off which I understand is unburnt aviation paraffin. It is thoroughly unpleasant and unlikely to do the plants much good—I am not aware that it is an especially effective fertiliser—so perhaps my hon. Friend will also deal with that.
Finally, perhaps my hon. Friend will give some "for instances." I will give an example of what I have in mind. A very popular British aeroplane flying with British Caledonian, our No. 2 airline — I say that purely in terms of size, by comparison with British Airways—and with many other airlines is the BAC 1–11. Presumably if the Spey engines are hush-kitted, that aircraft will meet all future noise regulations, but how viable is that proposition?
The Spey engine also powers the Trident airliner. which is being phased out of British Airways but forms equipment in certain second-line airlines and w ill not necessarily be scrapped. Is it viable to fit hush kits on the Spey engines of the British Airways Trident 3 which in terms of airframe and avionics could have a reasonable life ahead after being phased out of British Airways? If it will cost a small fortune to meet the noise regulations, that may put a different complexion on its prospects. I am sure that my hon. Friend the Minister accepts that there is now a good and constructive growth not only in second-line but in third-line airlines in this country and elsewhere. Those airlines are likely to be interested in just this type of

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secondhand aircraft if the price is reasonable and its performance and economy and the viability of fitting the appropriate hush kits make sense.
Perhaps my hon. Friend will give us some hard information about how the order will operate in those respects.
11.53 pm
Mr. John Wilkinson: I agree with my hon. Friend the Member for Ashford (Mr. Speed) that it would help to have more specific instances of the actual impact of the noise regulations.
Article 4(a) covers the whole gamut of ordinary general aviation piston-engine aeroplanes such as the Cessna 421 Golden Eagle, the 404, the 414, Beech Baron, Piper Navajo and so on. Am I right in thinking that that provision will not impose limitations on the operations of those aircraft in international standard atmosphere conditions? This is important as those aircraft are used not only for corporate and business aviation, executive flying and general aviation purposes, but, as their all-up weight is less than 12,500 lb, or 5,700 kg, private pilots may also fly them. I should like my hon. Friend to give us a reassurance that nothing in the order will impinge adversely on British general aviation as far as piston-engine powered aircraft are concerned.
Article 4(b) is a cleverly drafted provision. Article 6(8) has the limitation of a sub-paragraph, which seems to imply clearly to me that it refers to a notional supersonic commercial airplane. I cannot see any commercial airplane for which
"the authorities of the State of manufacture received an application for a certificate of airworthiness before 1st January 1975 and did not reject that application and in respect of which a certificate of airworthiness was first issued on or after 26th November 1981".
Concorde received its certificate of airworthiness well before that date and came into operation with British Airways and Air France in 1977 and the TU144 was also certificated in its country of manufacture, the Soviet Union, well before the specified date. In the state of the art, I suggest that this is a notional sub-paragraph.
As to article 4(c), I doubt that people will be worried about the few microlights that occasionally buzz over their houses. It is interesting and important that we mention this category of aircraft, because it is relatively novel and there have to be airworthiness provisions. With respect to my hon. Friend the Member for Ashford it does not come under the terms of the order. This is a noise certification order.
Article 4(d) is an interesting provision, and I require my hon. Friend the Minister to give more information. On the face of it, it would cover most civil jets and large piston-powered airplanes, because most of them have a take-off distance in still air of more than 610m. As the primary noise regulation is not to come into effect until 1 January 1985, the regulations under article 4(d) will not in practice have any effect on the BAC 1–11 whether or not they are hush-kitted, or Tridents Two or Three which are still in operation. The Boeing 727 and the F28s constitute the major problem in the airliner sector.
A fundamental and important point implicit in the regulations on noise, to which the hon. Member for Kingston upon Hull, East (Mr. Prescott) referred, is that the noise certification being imposed by Governments is
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becoming increasingly strict, so that in realistic terms we can no longer regard noise as the primary determinant of airport location. There was a time when we could, and we had the hare-brained scheme of putting concrete on mud in the Maplin sands, and recently the idea of placing a major international airport at Stansted, far away from the centre of population that that airport for the London area is designed to serve.
Noise certification is so strict, and the technical advances are such that with the increasing number of turboprop aircraft and quiet, high bypass ratio turbo fan engines coming into service, noise is no longer a primary determinant of airport location. That seems to show that the Government should look seriously at raising the upper limit of 275,000 movements a year to Heathrow airport, particularly as some of the aircraft coming into Heathrow are ones to which the order would apply — general aviation aircraft and commuter airplanes. Such aircraft are increasing the number of movements without disturbing the surrounding population very much. When we later debate airports, bearing in mind this order, we shall disregard noise to a greater extent than we would have done in the past. I hope that we would look more favourably upon a fifth terminal at Heathrow than we did in days gone by.
12 midnight
Mr. Stephen Ross: I am tempted to rise to my feet by the speech of the hon. Member for Ruislip-Northwood (Mr. Wilkinson), who has a certain amount of courage. I remember some years ago Sir John Nott announcing the Stanstead inquiry, and I asked whether, with Stanstead airport taking over 16 million passengers, possibly increasing to 30 million, it would not be better to have a fifth terminal at Heathrow airport. Thereupon all the Minister's colleagues from Richmond, Kingston upon Thames and elsewhere rose to their feet, and ever since the proposition has been used against every Liberal candidate in general elections in Richmond and all points nearby. I assure the hon. Member for Ruislip-Northwood that I shall quote his speech to some of my colleagues. However, I acknowledge that he spoke honestly.
I wish to speak mainly because, dressed as I am, I have been to the Aerodrome Owners Association dinner tonight. Other hon. Members left early to vote here, but I stayed to listen to the speech of the Secretary of State for Trade and Industry. He quoted some interesting figures on aircraft noise, and showed that during the past five or 10 years there have been great achievements in reducing aircraft noise. I have to answer many questions on microlights. Therefore, I welcome what has been said about microlights tonight, because the Isle of Wight was one of the places where microlights were developed, and I believe that the Department took advice from one of my constituents in drafting the regulations. It would be helpful if the Minister would put on record tonight what has been achieved in the reduction of aircraft noise. This relates to the speech of the hon. Member for Ruislip-Northwood, because there has been such a reduction at Heathrow, which allows for an increase in movements and the possibility of a fifth terminal.
12.2 am
Mr. Rob Hayward: I do not wish to extend the debate for longer than is necessary, despite the

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fact that I would have wished to make some comments about microlights, since I have had discussions with a British microlight manufacturer today.
I wish to ask my hon. Friend the Minister a specific question that has not yet been posed, relating to paragraph 7 (1) and (2). There is a requirement that the registration certificate should be carried in the plane at all times. I do not understand why, as long as the plane has a registration certificate in the United Kingdom, it should not be readily available at the aerodrome or the base rather than be carried in the plane at all times. I hope that my hon. Friend can clarify that matter.
12.3 am
Dr. Alan Glyn: Although I accept that the order is of benefit to all of us, I hope that my hon. Friend the Minister will not use it as an excuse —as I said to the hon. Member for Kingston upon Hull, East (Mr. Prescott) —for an increase in movements at Heathrow. Most hon. Members whose constituencies are under the flight path regard the movements of aircraft in and out of Heathrow as being the maximum that can be endured by those who live there.
12.4 am
Mr. David Mitchell: The House has had an interesting, short debate on this matter, which has demonstrated not only the breadth of matters covered by the order, but the breadth of associated interests in the problem of aircraft noise, which affects many hon. Members' constituencies.
The hon. Member for Kingston upon Hull, East (Mr. Prescott) generally welcomed the order, especially the reference to microlights, and he asked why we had not covered helicopters. This is a matter for urgent consideration when the CAN 7 standards have been finally adopted by ICAO, which is expected in about 12 months' time. There will have to be further arrangements in that connection. The level of fines was reviewed two years ago. If the hon. Member feels that they are not sufficient, I am prepared to examine them further.
The hon. Gentleman raised the problem of the order being related to existing designs, and asked whether there might be new supersonic designs in future. We do not know of any plans by anyone as yet to make a new supersonic transport of that sort. If one were planned, ICAO would step in and formulate a new standard. While the hon. Gentleman has legitimately raised the point, he may feel that it need not concern the House further.
The hon. Gentleman mentioned a series of matters, such as the Civil Aviation Authority's review of British Airways and other operators' share of the market, the problems of privatisation, the introduction of private sector capital into the airports and the limit of 275,000 at Heathrow. The hon. Gentleman has demonstrated as the Secretary of State so clearly perceived, that the problems inter-relate. It is therefore necessary to stand back and look at them in the round before coming to specific decisions, because one might well find that one was taking decisions which in isolation appeared to be right, but which, when seen in the broader context, had unfortunate side effects.
The hon. Gentleman asked about the 275,000 limit, a point that was raised by other hon. Members. There is no present limit on the number of movements at Heathrow. The Government have stated that a limit of 275,000 air transport movements per annum will be imposed when the
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fourth terminal is opened at the airport in late 1985. We are currently considering how this limit should be implemented.
Mr. Wilkinson: May I ask the Minister to amplify the statement that he has made, because it seems extraordinary? Is the Minister saying that, until the fourth terminal becomes operational, there is no upper limit? Is he saying that, so long as the passenger handling facilities remain relatively limited, the airlines can pour in any number of movements beyond the airport's capacity to handle them, but that, once the fourth terminal is operational, an arbitrary upper limit of 275,000 will be imposed? If that is the case, it seems distinctly odd.
Mr. Mitchell: My hon. Friend has put his finger on a somewhat ironic situation. He is correct in at least part of what he says. He is not correct in saying that the capacity at Heathrow will be exceeded. He is correct in saying that there is no legal limitation. There is a capacity limitation only, which is considerably higher than 275,000 movements and, when the fourth terminal comes into operation, there will be a reduction, if 275,000 movements have been exceeded, to 275,000 movements.
Mr. Jeremy Hanley: Does the Minister not agree that the inspector appointed to hold the fourth terminal inquiry stated that 260,000 should be the upper limit for aircraft movements?
Mr. Mitchell: I did not occupy my present position at the time of that inquiry. I am not aware of the figure given by my hon. Friend, but I shall write to him to set out the precise circumstances relating to it. It is my understanding that 275,000 is the figure that followed after, and became part of the decision related to the consent for the fourth terminal.
Mr. Prescott: Is the Minister saying that when T4 comes on stream in 1985, if the flight movements have exceeded 275,000, it will be Government policy to reduce those movements back to 275,000?
Mr. Mitchell: Broadly speaking, the hon. Gentleman is setting out the position.
In giving approval to the Belfast service, the Government said that the problem of the 275,000 movements limitation would have to lead to a review of the position overall. But we would not single out a particular service to be subject to a restriction.
Mr. Prescott: The Minister is being misleading. I put the point as clearly as I could. Is he now saying that the 275,000 movement limitation is likely to be part of the CAA review?
Mr. Mitchell: The hon. Gentleman misunderstood me. I said that because of the potential for exceeding the 275,000 limit, when the Belfast approval appeal was turned down we said that any—not specifically Belfast —of the existing movements might have to be reviewd if they exceeded 275,000 at the time that the T4 began operation. We do not know whether that figure will be exceeded, but there is clearly a potential for doing so.
Mr. Wilkinson: This is at extremely important point. Can my hon. Friend explain to the House how, if the number of movements increase beyond 275,000 a year before T4 becomes operational, it will be decided which operators will take their services out of Heathrow once T4

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is operational so that the number will come below the 275,000 ceiling? On the face of it, it is an arbitrary and difficult operation that could lead to all sorts of problems.
Mr. Mitchell: That is precisely why I said earlier that my right hon. Friend was reviewing the matter and considering how the limit would be implemented. I cannot go any further tonight.
The hon. Member for Kingston upon Hull, East asked whether there was capacity in excess of the environmental limit and whether the Government plan to alter that limit. Yes, there is capacity in excess of the limit, but we have given our undertaking that that limit will be observed at the time that T4 comes into use. Until then, there is no such limitation.
My hon. Friend the Member for Ashford (Mr. Speed) referred to microlights, and the safety aspects as well as the noise aspects. The Civil Aviation Authority is keeping safety standards under review. I am especially pleased that it is one area where the sport itself is regulating the standards. That is the right way to move because, by its nature, the people in the sport know more about it than can a major organisation covering the whole of aviation safety. Of course, the cost factor is important for those concerned with that and other sports. I am pleased to see that it is not only in this, but in other areas of sporting activity, that the Civil Aviation Authority is delegating work to those with a specialised knowledge of the sport concerned.
I have not before had my attention drawn to the question of unburnt paraffin, so I shall have to answer my hon. Friend the Member for Ashford in writing.
As for the viability of hush-kitting, I understand that it costs about £200,000 for the type of aircraft to which my hon. Friend the Member for Ashford referred. It brings them within the limitation of chapter 2—the noisier of the two chapters in relation to accepted noise—though it makes them slightly less fuel-efficient. It is, of course, for the users to decide on commercial grounds the relative merits of that as against a new aircraft, and a number of operators have taken the view that a new aircraft is a more viable proposition. Clearly, there will be trading down, a cascading down, to other operators who will be looking for a lower-cost operation and who will pick up these aircraft relatively cheaply.
My hon. Friend the Member for Ruislip-Northwood (Mr. Wilkinson) asked a number of technical questions, about which I will write to him. I understand that these provisions will not damage the operation of business aircraft, and I hope that that gives him some reassurance. He raised a fundamental point when he said that noise should no longer be the deciding factor on the location of a new airport, and he instanced the degree of technical advance in noise control, went on to discuss the potential for raising the 275,000 limit and on to the verge of a question about which I am sure he knows I cannot comment, in connection with a potential third London airport.
The hon. Member for Isle of Wight (Mr. Ross), after paying tribute to the courage of my hon. Friends, asked
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me to note the extent of advance in the reduction of noise in recent years. I confirm that, and I pay tribute to those who have been involved in the technological advance that has made that possible. While they have been dealing with engineering and technical questions, they have been helping to make life much more acceptable in environmental terms for those who live in the immediate vicinity of airports.
My hon. Friend the Member for Kingswood (Mr. Hayward) asked whether the noise certificate had to be carried in the plane. It need not be so carried when the flight begins and ends at the same airport. When it does not, we think it right that it should be able to be produced.
My hon. Friend the Member for Windsor and Maidenhead (Dr. Glyn) begged me not to use these regulations as an excuse for tampering with the 275,000 limitation. I am well aware that he is a forthright spokesman on behalf of his constituents who live in the vicinity of Heathrow and who are affected by the local noise. I assure him that the commitment to the 275,000 limit remains to be brought into effect at the time of the introduction of the fourth terminal.
I hope that I have covered all the points that were raised by hon. Members and that the House will now agree to pass the order.
Question put and agreed to.
Resolved,
That the draft Air Navigation (Noise Certification) Order 1984, which was laid down before this House on 1st February, be approved.

Civil Aviation

  TRADE MARKS ACT 1938 (AMENDMENT) BILL [MONEY]
  Queen's Recommendation having been signified—
  Resolved,
  That, for the purposes of any Act resulting from the Trade Marks Act 1938 (Amendment) Bill, it is expedient to authorise the payment out of money provided by Parliament of any increase in the expenses of the execution of the Trade Marks Act 1938 which is attributable to the Act so resulting. — [Mr. Douglas Hogg.]

  AGRICULTURE (AMENDMENT) BILL [MONEY]
  Queen's Recommendation having been signified—
  Resolved,
  That, for the purposes of any Act resulting from the Agriculture (Amendment) Bill, it is expedient to authorise the payment out of moneys provided by Parliament of any increase attributable to provisions of that Act extending the definitions of 'co-operative marketing business' and 'co-operative association' in section 64 of the Agriculture Act 1967 in the sums payable out of such moneys by way of grant under that section. — [Mr. Douglas Hogg.]

  ANATOMY BILL [MONEY]
  Queen's Recommendation having been signified—
  Resolved,
  That, for the purposes of any Act resulting from the Anatomy Bill, it is expedient to authorise—

  (a) the payment out of money provided by Parliament of any expenses of the Secretary of State incurred in consequence of the Act;

  (b) the payment into the Consolidated Fund of any sums received by the Secretary of State under the Act. — [Mr. Douglas Hogg.]

British American Tobacco (Liverpool)
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Douglas Hogg.]
12.19 am
Mr. Robert Parry: I am grateful to you, Mr. Deputy Speaker, for giving me the opportunity to raise the subject of the loss of jobs at the British American Tobacco factory at Liverpool in this Adjournment debate, and to raise also the issue of further unemployment and job losses in Liverpool and on Merseyside generally. There may be many Members who are not very much concerned with unemployment in areas such as Merseyside. I was surprised this evening when I saw a number of hon. Members on both sides of the Chamber who appeared to have been enjoying themselves at dinner. They were wearing bow ties and at one time I thought that the House was being invaded by penguins.
I had the good fortune last April to initiate a similar debate on mass unemployment in Liverpool. Since that debate we have, unfortunately, seen large job losses at various factories in the area. At the end of last year we saw the closure of the Huntley and Palmer biscuit factory at Knowsley, that company now being part of the Nabisco group. There was the loss of 2,000 jobs at the United Biscuits factory, which was formerly Crawfords.
In my constituency, the BAT company has announced the axing of 1,100 jobs. Like most of the multinational and transnational companies that have pulled out of Merseyside over the past few years, its industrial relations and productivity records have been good. It has that in common with other firms that were in Liverpool for well over 100 years, such as Tate and Lyle and Dunlop.
This latest blow to the workers in the tobacco industry is due solely to the greed of companies that wish to maximise their profits at the expense of the work force. It has made large profits for the industry over many decades and now it is being thrown onto the scrap heap and on the dole with no chance of finding alternative employment.
BAT is largely an exporting company and 75 per cent. of its products were exported last year. Far from sales falling, output has almost doubled. Between 1977 and 1983, sales have risen from 12.9 billion cigarettes to 25·5 billion. Contrary to press reports, BAT (UK Exports) made a profit of £25 million last year. That profit was preceded by profits of £27·1 million in 1982 and £29·8 million in 1981. This is a subsidiary of BAT Industries, which is the world's largest transnational tobacco company. Last year it made the massive profit of £856 million. As I said in my application under Standing Order No. 10, this is an example of the brutal, vicious and dirty face of the capitalism of multinationals and transnationals, which use markets and workers to make profits. When they feel that it is in their interests to move out of a city or region, they will move. The doubling of production from 1979 to 1983 was achieved by a labour force that has remained constant, yet the company now intends to make 70 per cent. of the work force unemployed over the next 15 months. There will also be job losses at the Southampton factory.
I raised these issues last week with the chairman of BAC, who listened to my representations and those of my hon. Friend the Member for Liverpool, Garston (Mr. Loyden) and responded by saying that the company must look after the interests of its shareholders. This is the
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uncaring and cold face of capitalism. For many years that has been the blight of Merseyside and other regions. The Order Paper contains two early-day motions—No. 463, tabled by me and supported by 117 right hon. and hon. Members and No. 443, supported by 37 hon. Members.
I ask the Leader of the House whether he will arrange for an urgent debate on the future of the tobacco industry. In spite of the anti-smoking lobby in the House, many hon. Members recognise the large number of people who are directly employed by that industry. According to an official estimate, 30,000 people, including 4,500 in Northern Ireland, are employed in the tobacco industry. Most of the factories are located in areas of high unemployment such as Glasgow, Newcastle, south Wales, Liverpool and Northern Ireland. Two reports by the economic consultants, PEIDA, show clearly that for every job in the industry, there are six or seven dependent jobs in wholesaling, retailing, supply and services. In 1980, 264,000 jobs were involved.
I hope the Under-Secretary of State will remind his right hon. Friend the Chancellor of the Exchequer, when writing his Budget, not to kill the goose that lays the golden eggs. In 1983, almost £3¼ billion was raised in the excise duty on cigarettes and almost £80 million on pipe tobacco. Some of the few pleasures left to the working man is his pint of beer, his smoke or his pipe of tobacco. The Government must be aware of the law of diminishing returns.
Earlier, we were debating the important subject of the young unemployed. With the loss of all these jobs, thousands more young people will be thrown on the dole. Already in certain parts of Merseyside youth unemployment is between 80 per cent. and 90 per cent. Thousands of young people are roaming the streets, getting into trouble through despair and frustration. In one square mile of my constituency where the BAT factory is situated more than 5,000 jobs have been lost in less than two years. One company, Tillitsons, next to the BAT factory closed a couple of years ago with the loss of 500 jobs. The refinery, Tate and Lyle, closed with a loss of almost 2,000 jobs. The CBS engineering company closed with a loss of about 400 jobs. On Merseyside, since 1979 more than 30,000 jobs have disappeared. Those figures are horrendous in anyone's imagination.
The inner city of Liverpool is slowly dying on it feet while the Government look on and take no part, doing nothing to alleviate the loss of jobs. I am not referring to the Government's gimmicks or cosmetic measures, although I presume that the Under-Secretary of State will raise those matters when replying. The international garden festival, the Merseyside Development Corporation or the enterprise zone will produce very few jobs. I do not believe that the freeport will provide many jobs. It may stop the loss of jobs from the docklands area. The Government's policies and measures have done nothing to staunch the massive loss of jobs from Liverpool.
The heart of my constituency is being ripped out, and the community is being slowly destroyed. I ask the Under-Secretary of State to bring this message to his right hon. Friend the Secretary of State and to note the social consequences of mass unemployment in inner areas of our cities. Young and old people have died. Some have committed suicide or suffered illness due to despair and worry at their unemployment. Just a couple of weeks ago, an 18-year-old man took his life—this was reported in the local newspaper, the Liverpool Echo — leaving a

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message that he was doing so because he had no hope of ever getting a job. We have seen broken marriages, young people driven to drink, drugs or solvent abuse, and crime as a result of high unemployment. The former Home Secretary admitted in the House that rising crime was linked with high unemployment.
The tragedy of BAT is that 60 per cent. of the jobs involved are done by women. Some of the women are single parents. I believe that most of the women are working to keep a husband who has already lost his job. The women are the only breadwinners.
In 1981 my constituency had the highest male unemployment rate, according to the official census, of 37·6 per cent. The projected job losses at BAT and the 700 job losses that have already been announced by the Scotts bakery in Bootle, the neighbouring constituency to mine, will, I guess, increase unemployment to 40 per cent. In the northern part of Liverpool I would say that the unemployment rate is between 55 per cent. and 60 per cent.
When I raised the subject of BAT under Standing Order No. 10 last week, the hon. Member for Weston-super-Mare (Mr. Wiggin) suggested that I was abusing the procedures of the House by raising local questions. I understand that the unemployment rate in his constituency is about 8 per cent. or 9 per cent. Anyone who knows anything about the workings of the House will be aware that the hon. Gentleman is a silly twit to make such silly remarks about matters as serious as mass unemployment.
The Toxteth riots in 1981 were sparked off partly because of high unemployment, particularly among young people. If unemployment continues to rise there will be much more social unrest on our streets. I hope that the Minister will not use empty rhetoric or make excuses as to why the Government cannot intervene in commercial decisions taken by companies. I hope that he will tell his right hon. Friends in the Cabinet, and the Prime Minister, whom I hope to meet in the near future to discuss BAT, that Liverpool has had enough erosion of its industrial base and dismantling of its manufacturing capacity. Will he tell the Government that enough is enough is enough?
12.33 am
Mr. Eddie Loyden: I am grateful for the opportunity given by my hon. Friend the Member for Liverpool, Riverside (Mr. Parry) for me to support him in this short debate about BAT.
Many hon. Members may think that they have heard enough about Liverpool and Merseyside. I want the Minister to know that, following the general election in June last year, Labour Members gave a pledge that Merseyside unemployment would be on the agenda of the House while that unemployment remained at its present level. None of the Government's attempts to disguise or ignore the problem will deter Labour Members representing Liverpool from raising the subject of mass unemployment on Merseyside and many of the other industrial conurbations. Mr. Deputy Speaker, you have sat through a number of Adjournment debates during which that subject has been raised.
My hon. Friend has brought to the attention of the House the fact that there will be 1,100 jobs lost at the
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British American Tobacco company which will be in addition to the already long list of redundancies and closures on Merseyside.
BAT established itself in Liverpool at the turn of the century, along with Tate and Lyle, Distillers and a whole string of factories that lined Commercial and Vauxhall roads—the area in which I and my hon. Friend were born. Those factories were the lifeblood of the local community. All but the BAT factory have gone, and with them every job. BAT is all that remains in that vast industrial conurbation. Now we are told that BAT has declared 1,100 redundancies. As those factories have made their exodus from Merseyside, there has been a virtual collapse of private sector industry, and they have left behind desolation and despair among the local community.
Almost everyone in Merseyside is now aware that the Government intend to do absolutely nothing about the domino effect that factory closures and redundancies have had on the area, Liverpool in particular. The effect on young people and families is not understood by the Government. Otherwise they would be adopting an entirely different attitude towards unemployment. That problem has now been with us for many years, yet the same old record is played — that we must be more competitive, compete effectively in world markets, and so on. While that has happened, whole cities have lost their industrial base and become industrial wastelands.
It is not my intention to scaremonger, but we have now reached the point where the situation on Meseyside is akin to a time bomb. Not only are we caught in the crossfire of unemployment and attacks on the local authority, thus depriving it of resources to ameliorate some of the problems that exist, but members of that authority will be charged as criminals for providing 1,000 jobs and building 1,000 houses, when there are 20,000 on the housing waiting list. That picture can now be painted of Merseyside which, since the Government have been in power, has lost 34,000 jobs. That is the Tory Government's record. That is the effect they have had on Liverpool's industry and jobs.
So long as that continues, every Member of Parliament from the area will raise Liverpool's unemployment, and the desolation and decline of its industry. In the near future, the same will happen in other parts of the country.
It is only fair to warn the Government that the problems of Liverpool have now reached such proportions that they must act before something desperate happens.
12.38 am
The Under-Secretary of State for Trade and Industry (Mr. David Trippier): Let me say at once, as the hon. Members for Liverpool, Riverside (Mr. Parry) and for Liverpool, Garston (Mr. Loyden) know, that I am very much aware of the several difficulties which burden the north-west, and paricularly Liverpool. I too was saddened to hear of BAT's decision to reduce so considerably its work force at its Commercial road and Seaview road factories.
But most of the principal manufacturers of cigarettes, cigars and smoking tobacco in this country are currently undergoing major rationalisation measures. As the House is aware, Carreras Rothman announced only a few weeks ago its intention to cease cigarette production at its

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Basildon factory. Imperial Tobacco is shedding jobs at Glasgow, Stirling and Bristol, and Gallaher is to close its factory at Middleton near Manchester.
The basic factor behind all those job losses is, of course, declining output. Between 1978, when BAT entered the United Kingdom market in earnest for the first time, and early 1984 when the company announced its intention to withdraw from direct United Kingdom sales, the United Kingdom market declined by 20 per cent. With the benefit of hindsight, it is now clear that BAT could hardly have chosen a less auspicious moment to try to break into this already extremely competitive market. Nevertheless, the company achieved a creditable initial market share, at the expense of other United Kingdom manufacturers.
However, fierce price competition continues to be a prime feature of the United Kingdom cigarette market. I understand that when BAT announced its plans to withdraw from direct United Kingdom sales, it calculated its accumulated trading loss in the United Kingdom market as over £53 million.
Clearly, no company can sensibly continue to operate in a market where it does not foresee profitability within a reasonable time. That essentially is a commercial decision that only BAT could make. The Government would not wish to intervene in such circumstances.
In referring to the decline in the United Kingdom market for tobacco products, I should say that in the decade to 1982 the proportion of female smokers fell by about one fifth and that of male smokers by about one quarter. That continuing long-term trend is reflected in many other developed countries.
Despite those constraints on its United Kingdom and indeed on some of its export sales also, the United Kingdom tobacco industry remains remarkably successful. Job losses in the United Kingdom would have been far more serious than has been the case, if it had not been for the companies' ability to meet and beat foreign competition, both at home and abroad. United Kingdom producers supply a highly creditable 98 per cent. of the home market for cigarettes. As for exports, the United Kingdom was in 1982 the world's third largest exporter of cigarettes and exported about one third by volume of its production.
That excellent record has not, however, been achieved easily. In order to maintain their position in their chosen markets, the companies concerned have had to become and remain among the most efficient cigarette producers in the world. Increases in productivity over recent years have been dramatic. The industry has a good record of innovation and of keeping up with the latest technological developments. It is essential that the companies should continue to do that. Failure in that respect would inevitably result in still greater acceleration of job losses.
I stress that the industry has been highly efficient. Nevertheless, with shrinking markets and the necessity to remain competitive, it is faced with an extremely difficult situation, which can be met only by continued improvements in productivity, with the regrettable consequence of a reduced labour force.
Mr. Parry rose—
Mr. Trippier: With great respect, I have little time, because the hon. Gentleman and I allowed the hon. Member for Garston to speak.
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Our tobacco industry has given sterling service in providing much-needed employment in areas of particularly high unemployment such as Newcastle, Northern Ireland, south Wales and indeed Merseyside. It still does so. It is to be hoped that BAT's efforts to maintain some production at its Liverpool plant will be successful.
To say that the Government simply stand aside in the face of Merseyside's economic problems is obvious nonsense. The Government provide substantial support for local businesses, but companies must be competitive and able to sell their products. That is the only basis for long-term prosperity. My own Department provides a wide range of assistance to companies for the introduction of new products, to help introduce new techniques and support for investment, especially in manufacturing industry. With the opening of the new Department of Trade and Industry office in Liverpool, liaison between the Department and local companies will be further improved. In the Merseyside special development area, assistance from the Department through regional development grant and selective financial assistance has averaged about £110 million a year over each of the past three years.
Overall, the Government's support for Merseyside is huge; over the past three years the Department of the Environment has supported capital expenditure by local authorities and other bodies totalling £650 million. Expenditure this year alone will be £250 million, of which £40 million has been found for special initiatives on Merseyside. A further £380 million is available through the rate support grant.
Other Departments make substantial contributions, and £134 million has been made available to the Mersey Docks and Harbour Company under the Ports (Financial Assistance) Act 1981. This assistance will help to streamline the company and its operations. 1983 saw a profit for the first time since the mid-1970s. Industrial relations have improved and the port should be able to look forward with more confidence. This should be further enhanced with the designation of Liverpool as one of the freeport sites, the announcement of which I know has been welcomed on Merseyside.
In the current year the youth training scheme will be making available places for 17,500 young people at a cost of £44 million and the community programme aims to provide 6,600 temporary jobs for the longer-term unemployed, costing about £20 million. With adult retraining schemes, young workers schemes and the costs of running the MSC's activities is included expenditure in Merseyside through Department of Employment programmes, which will run to about £110 million in 1983–84. This is the highest concentration of aid to any sub-region in the country. It is not cosmetic.
Mr. Parry: How many jobs have been saved?
Mr. Trippier: The Government are, of course, extremely concerned about the loss of jobs on Merseyside. That is why we have ensured that the area has continued to benefit from special development area status, with the assistance that it brings in attracting and promoting new industry and in the creation of new jobs.
In addition, hon. Members will be aware of the announcement on 18 January that the European Community is to provide the United Kingdom with £89 million of aid from a second series of measures under the non-quota section of the European regional development

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fund. Liverpool, as a shipbuilding closure area, will be eligible for that aid. This represents a valuable contribution by the Community towards overcoming the worst effects of the decline in the steel, shipbuilding and textile areas. The aid will be available over a five-year period once the Commission has approved the special programmes, showing how these industries can be rationalised, which member states are required by the regulations to produce.
Mr. Parry: On a point of order, Mr. Deputy Speaker. I asked about jobs on Merseyside and the tobacco industry, not about the EEC.
Mr. Deputy Speaker (Mr. Ernest Armstrong): This is an adjournment debate. That is not a point of order.
Mr. Trippier: The hon. Gentleman should listen more carefully to what I am saying. I referred specifically to the fact that Liverpool, as a shipbuilding closure area, will be eligible for aid from the EC.
Mr. Michael Cocks: Marvellous.
Mr. Trippier: The right hon. Gentleman says, "Marvellous." The news has, in fact, been widely welcomed on Merseyside. I am not aware that the right hon. Gentleman represents a constituency in that area.
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We are seriously concerned that regional industrial incentives may in the past have gone to projects that merely shuffled jobs around the country. That is not the answer. It is also true that, whereas in the past a target for regional incentives was the large internationally mobile project, there is now less of this type of investment available.
The economy of Merseyside is sharing in this improvement, notwithstanding the announcement by BAT. Plessey Telecommunications Ltd. is investing significantly at its Edge Lane factory, and is also heavily involved in establishing the adjoining Wavertree technology park. Capital investment also being undertaken by Valor Newhome Ltd. at Prescot, Viota Foods at Bromborough and Lever Brothers at Port Sunlight will total £82 million. These are jobs. Vauxhall at Ellesmere Port will introduce a second shift in April. The Arrowcroft Group, in partnership with the Merseyside Devlopment Coporation, plans to build a major residential, commercial and leisure complex on the site of the disused Albert dock. There are—
The Question having been proposed after Ten o'clock, and the debate having continued for half an hour, MR. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.
Adjourned at eleven minutes to One o'clock

ATTORNEY-GENERAL
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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 Hereford.

Extradition Law and Practice
Lord Gainford: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they intend to reform the law on extradition.
The Parliamentary Under-Secretary of State, Home Office (Lord Elton): My Lords, recommendations for improvements in the law and practice of extradition were put forward by an interdepartmental working party, whose report was published in May 1982. My right honourable friend is now considering these recommendations in the light of the comments which he has received from interested organisations and individuals.
Lord Gainford: My Lords, I thank my noble friend the Minister for that reply. Has he any information as to when the findings may be known to the public, and can he give any assurance that consideration is being given to the blocking of possible loopholes which exist in the law at the moment, with the result that certain criminals may be evading justice?
Lord Elton: My Lords, the efficacy of the law is always a matter of concern, but no decisions have yet been taken on the recommendations in the report, and the Government have no plans at present to introduce legislation.

NHS: Treatment Statistics
2.37 p.m.
Baroness Faithfull: My Lords, may I first apologise to the House and to my noble friend the Minister for the fact that one word was left out of my Question. It should read:
"To ask Her Majesty's Government how many hospital patients received treatment…"
The word "hospital" was left out.
Having said that, 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 how many hospital patients received treatment in 1982 and 1983 under the National Health Service, and what was the corresponding figure for 1978.
The Parliamentary Under-Secretary of State, Department of health and Social Security (Lord Glenarthur): My Lords, the information for which my noble friend asks is not available in precisely the form that she requests, but comparing 1982 with 1978, the
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NHS treated over half a million more in-patients and days cases and over 2 million more out-patient cases.
Baroness Faithfull: My Lords, I thank my noble friend the Minister for that reply. Does he agree—I am sure he does—that his Answer does not indicate an ailing National Health Service? May I further ask him whether the general practitioner committees keep records of how many patients consult general practitioners? Moreover, would he agree that if perhaps more patients attended their GPs and were subject to community services there would be more hospital places for both in-patients and out-patients in the most serious cases?
Lord Glenarthur: My Lords, I would certainly agree with my noble friend that all the evidence clearly shows that the NHS is not ailing. To some extent waiting lists represent the problems of success. The wider range of treatments available, greater life expectancy, and the increasing proportion of old people have all added to people's expectations and thus their demands on the National Health Service.
With regard to the second part of my noble friend's supplementary question, family practitioner committees keep records only of those items of service for which general practitioners are separately remunerated. These items are only a very small part of the GPs' service. In reply to the question about patients going to hospital rather than to their GPs, I would point out that the vast majority of hospital patients are referred by the general practitioner, and there is no reason to suppose that hospital facilities are used inappropriately on any scale.
Lord Wells-Pestell: My Lords, may I ask the noble Lord the Minister whether he will not recognise that, following the advance of medical science in recent years, it is now possible to treat in hospital a considerably larger number of people than ever before? That arises simply because until a few years ago after some operations patients had to remain in hospital for 14 days, whereas now they can be discharged within three or four days. That is more largely due to the advance of medical and technical science than to anything else.
Lord Glenarthur: My Lords, in many ways the noble Lord is quite right. But recently there have come to the fore other operations—I am thinking in particular of hip replacements and other such operations—which take rather longer than the time that the noble Lord mentioned.
Lord Nugent of Guildford: My Lords, is my noble friend aware that it is a great pleasure to all of us to see one noble patient so well recovered and back in the House?
Lord Molloy: My Lords, is the noble Lord aware that among both the professions in the NHS and the general public there is growing concern not so much about the people who are already in hospital but about the ever increasing waiting lists and the anxiety that that fact causes families, would-be patients themselves, and indeed the hospital staffs and the whole range of professions in the health service?
Lord Glenarthur: My Lords, of course we want shorter waiting lists. That is why the Government have concentrated the attention of health authorities on the need to make the best use of all of their resources, and we see this as one of the major tasks of the new management initiative.
Baroness Gaitskell: My Lords, is the Minister aware that people such as myself, who have dealt with the National Health Service in regard to certain matters, have nothing but praise for the medicine we have received and the consultancy services we have been given? They have made us better, and I cannot praise too highly the National Health Service.
Lord Glenarthur: My Lords, I entirely share the noble Baroness's views.
Lord Ennals: My Lords, the noble Lord mentioned the increasing demands of the elderly, and in pressing him on this point I am certainly not referring to any noble Baroness or noble Lord who has received such successful treatment from the National Health Service. However, can he give an indication of what proportion of the total number of patients are elderly? Would he not agree that fewer people would be treated in hospital if the social services could make better provision, which unfortunately they are not able to do because of the cuts which the Government have imposed upon local authority services?
Lord Glenarthur: My Lords, I cannot give without notice the figures for which the noble Lord asks. So far as local authorities and personal social services are concerned, local authorities certainly have difficult decisions to make but there is every indication that they have sought to protect the most vulnerable people, including the disabled and the elderly, in the community. Taking this year's budgeted expenditure into account, personal social services expenditure overall will have risen by 12½ per cent. in real terms over the past five years.
Lord Kilmarnock: My Lords, if it is in order to stick to the noble Baroness's Question as printed on the Order Paper, has the noble Lord comparable figures for community health visits and family practitioner visits?
Lord Glenarthur: My Lords, what I can tell the noble Lord is that nearly half a million more people were visited at home by health visitors or district nurses. As for the other information that the noble Lord seeks, I shall have to provide it for him in writing.
Lord Wallace of Coslany: My Lords, is the noble Lord aware that to assume on the basis of these figures, as the noble Baroness did and as the noble Lord himself did, that everything is all right in the National Health Service would mean that the noble Lord is talking through the back of his neck? If he has any connection with any local area health authority, he will find that they are at their wits' end to provide the services needed mainly due to the Government's policy of denying finance to many authorities, particularly in the South East.
Lord Glenarthur: My Lords, no. I do not share the noble Lord's views. Spending on the National Health Service is at a record level. Since we came to office we have doubled spending on the Health Service from £7¾ billion to some £15½ billion.

Overseas Students: Financial Support
2.45 p.m.
Lord Gladwyn: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what provision they intend to make for the continuation of additional support for overseas students beyond the three-year commitment of £46 million made on 8th February 1983.
The Minister of State, Foreign and Commonwealth Office (Baroness Young): My Lords, it is our intention to make suitable provision for the continuation of additional support for overseas students in 1986–87, the last year to which present public expenditure plans extend. The amount to be made available and the way the money will be distributed have yet to be decided.
Lord Gladwyn: My Lords, I am obliged to the noble Baroness for that mildly encouraging reply. Can she however say what will be the actual value of additional support if universities give effect to the increases in minimum fees, which I believe represent something like twice the actual increase in inflation, now recommended by the University Grants Committee? And what will be the consequent likely effect on the number of overseas students who will benefit from the existing scheme in 1984–85?
Baroness Young: My Lords, I think it is very difficult to make an assessment of the precise consequences as it is difficult to make an assessment of the precise consequences of the effect of the extra £46 million package of additional support that has been given. It depends upon a number of factors, including the strength of the American dollar, which affects where students might go.
Lord Kaldor: My Lords, will the noble Baroness confirm that students from some of the French ex-colonies receive far more favourable treatment in respect of fees than students from British ex-colonies, and that this is a consequence of the fact that we extend concessions to members of the Common Market which we do not extend to members of the Commonwealth? Does the noble Baroness regard this as an equitable arrangement in view of the fact that some Commonwealth countries, particularly India, have habitually received a high level of education of their political and social leaders from this country?
Baroness Young: My Lords, the Government announced in 1983 that there would be an increase of £46 million in the financial years 1983 to 1986 to expand support to selected overseas students. Included in that amount was a particular sum for students from Cyprus, Malaysia and Hong Kong. Furthermore, there

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are specific schemes that help students from the Commonwealth. There is the Commonwealth scholarship and fellowship plan—and it is expected that the extra provision will enable 119 additional awards to be made in 1983–84—as well as the technical co-operation and training programme, many of whose students go and work in Commonwealth countries.
Lord Elwyn-Jones: My Lords, is the noble Baroness aware of the immense importance and value that overseas students who come to our universities attach to that experience? Is it not the case that they become wonderful ambassadors for this country? Is it not also the case that they are effective in all sorts of fields, not merely in economic relations but in cultural and other fields as well? Will everything possible be done to support and even increase the arrangements and provision for them?
Baroness Young: My Lords, I have indicated the increased support that the Government have given. We recognise the importance of overseas students, and their value to this country. We also recognise what very good value for money a British university education is.
Baroness David: My Lords, in the light of the Government's stated intention to develop a coherent policy on overseas students and the Prime Minister's commitment in Delhi not to make any further significant increases in overseas students' fees without consulting our Commonwealth partners, is the Minister able to say that any future recommendations about fee levels will be made only after consultation with the relevant Government departments and with our Commonwealth partners?
Baroness Young: My Lords, as the noble Baroness is aware, the increase of 9 per cent. in university fees is a matter for the University Grants Committee. I note, of course, what she says.
Lord Glenamara: My Lords, will the noble Baroness undertake that the new arrangements from 1986 will be no less "generous"—I put the word "generous" in inverted commas—than the present arrangements? Will she bear in mind that more than half of these students are not in universities but in polytechnics?
Baroness Young: My Lords, I entirely take the second part of the noble Lord's question. When I use the word "universities" I should include polytechnics and courses at colleges of advanced education and colleges of further education, all of which have overseas students. On the first part of the noble Lord's question, I cannot add anything to my original reply.
Baroness Vickers: My Lords, I should like to ask my noble friend whether she realises that overseas governments have to make plans for their students several years ahead. Therefore, it is essential for them to know as soon as possible what facilities are available. Will my noble friend take particular interest in the smaller territories, which are in need of greater help?
Baroness Young: My Lords, I fully appreciate the point that has been made by my noble friend Lady Vickers, and I also take on board the point which she has made about small countries.
Lord Merrivale: My Lords, will my noble friend take particular account of the interests of developing countries in Africa, which are in a particularly difficult position as regards students? I have in mind Chad, because there are a number of students here who, in effect, have had a grant from the British Council and who believe in extending their higher education in this country. Will Her Majesty's Government pay particular attention of the needs of students who are associated with, or who are citizens of, countries in Africa which are in a very difficult position both politically and from a defence point of view—for example, Chad?
Baroness Young: My Lords, my noble friend has asked a very specific question about a specific country. Having noted the point that he makes, and having indicated the extra support that the Government have given to overseas students and our intention to give continuing support, perhaps it would be best to follow up by correspondence the point which my noble friend has made about Chad.
Lord Kaldor: My Lords, will the noble Baroness confirm the point which I made in my first question; namely, that students from some of the French ex-colonies receive more favourable treatment as regards fees in British Universities than students from British ex-colonies? If that is so, will the noble Baroness say whether she would regard the situation as anomalous?
Baroness Young: My Lords, the provision that the French Government make for students from their colonies is a matter for the French Government. I have outlined what we do in this country. It is very important for any potential overseas students to recognise that in Britain, whether in a university, a polytechnic or a college of advanced education, it is possible to get a qualification in a short period of time and in a situation where there will be a very good staff/pupil ratio.
Lord Cledwyn of Penrhos: My Lords, the noble Baroness said that the increase of 9 per cent. is the responsibility of the UGC. But would it not be fair to say in defence of the UGC that it is acting in pursuance of Government policy and at the behest of the Secretary of State for Education and Science?
Baroness Young: My Lords, it is not for me to speak for the University Grants Committee, but my understanding is that the 9 per cent. increase is made up of 5 per cent. for inflation and 4 per cent. to cover what are regarded as the costs that are necessary for overseas students fees to meet the full economic cost.
Lord Gladwyn: My Lords, I should like to pursue the increase of 9 per cent., because the decision was taken it seems, without any consultations with the Commonwealth. Does that really square with the decision taken at New Delhi by the heads of Government that there would be no effective increase

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in fees except as a result of consultations with the Commonwealth?
Baroness Young: My Lords, my understanding of the position as regards the increase in the fees for overseas students is as I have described it in answer to the noble Lord, Lord Glenamara, and it follows the policy of an increase which would cover inflation and an increase which would mean that the fees cover the full economic cost.
Lord Leatherland: My Lords, would the noble Baroness agree that there is much wisdom in encouraging and allowing overseas students to attend our universities because if they could not get into our universities they might go into universities in the Soviet Union?
Baroness Young: My Lords, I am quite prepared to agree with the noble Lord, Lord Leatherland, that it is always worthwhile to go to a British institution of higher education.

Leeds: Orthopaedic Waiting List
2.55 p.m.
Lord Dean of Beswick: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what action they are prepared to take to remedy the situation reported in the Yorkshire Evening Post on 1st February, whereby in the Leeds Western Health District the present orthopaedic waiting list of 476 patients will take seven years to clear.
Lord Glenarthur: My Lords, Leeds Western Health Authority are responsible for the pattern and delivery of health services within their boundaries. My right honourable friend the Secretary of State for Social Services announced the distribution of resources to regional health authorities in early January, and particular emphasis was laid on the need to develop services for joint replacement. Leeds Western Health Authority have set up a series of meetings to consider action to reduce the orthopaedic waiting list. I understand that it is hoped this year to adapt a ward at Chapel Allerton Hospital which can be earmarked as the initial base there for the orthopaedic specialty.
Lord Dean of Beswick: My Lords, I am grateful to the noble Lord the Minister for that reply. Is the Minister aware that between Leeds Western area and Leeds Eastern area there are almost 1,300 people on the orthopaedic list awaiting surgery? Even on the basis of the most optimistic forecasts that have been made, many of those people will be on the list for far too long, and certainly for a length of time that could not be considered tolerable. Will the Minister press the regional health authority to make resources available so that the Leeds area health authorities can deal with this matter in a satisfactory manner?
Lord Glenarthur: My Lords, representatives of the Leeds Western Health District management team
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have been discussing the issue with the orthopaedic surgeons. It is recognised that an increase in the number of elderly in the population and in the demand for joint replacement and other procedures, has maintained a pressure on orthopaedic beds. The national increase of 30 per cent. in total hip replacements between 1978 and 1981 is an illustration of that pressure. But the district management team has offered the services of a senior registrar in community medicine to work closely with the surgeons to find a means of alleviating the pressure. This has been accepted by them. As I have already mentioned, the possibility of Chapel Allerton Hospital is also being considered.
Lord Dean of Beswick: My Lords, I am grateful to the Minister for his reference to the increased facilities that may be made available at Chapel Allerton. Is he also aware that a decision is about to be taken as to whether to keep the Margarita Hepton Hospital at Wetherby open or not? If this hospital is closed—and it caters for a lot of post-operative orthopaedic patients—it will have a further detrimental effect on the services. Will the noble Lord try, if possible, to influence a favourable decision regarding that hospital?
Lord Glenarthur: My Lords, this is essentially a local matter and not one in which I could intervene at this moment. The fact is that if Chapel Allerton is to be opened in the way that I suggested it might be, then of course funding will be dependent upon the release of revenue from elsewhere. But I do not think that it would be right for me to talk any further about the Margarita Hepton Hospital, to which the noble Lord referred.
Lord Ferrier: My Lords, if the figures given in the noble Lord's Question are even approximately correct, do they not indicate that no time should be lost in introducing a measure of chiropractic help in dealing with cases of this nature? There should be no further delay. There has been enough delay hitherto. I should like to know what my noble friend has in mind as regards this particular angle.
Lord Glenarthur: My Lords, I am well aware of my noble friend's interest in chiropractic, and I share many of his views, but I am not sure that a waiting list like the one referred to in the Question would be cut if it were possible to recognise chiropractic. First, it is by no means clear that the people awaiting in-patient admission in Leeds need or are seeking the type of help which chiropractors offer, because one of the many problems that they are there for involve hip replacements. Secondly, there are relatively few chiropractors in the country and there is no certainty that they would wish to work in the way in which the noble Lord hopes that they might.
Lord Ennals: My Lords, is the noble Lord aware that the situation described by my noble friend Lord Dean of Beswick is not just a Leeds problem, but is common across the country, as my noble friend Lord Wallace said on an earlier Question? Is the noble Lord aware that when his Government came to office in 1979 they made a commitment to reduce the hospital

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waiting lists, yet in fact they are very substantially higher than at the time when the present Government came in? According to the latest figures available from his department, they are up to 726,186. Would the noble Lord agree that that is the highest they have ever been since the health service was established? Is the noble Lord also aware that 65 per cent. of urgent cases have been on the waiting list for more than a month? Would he not agree that this is an appalling situation?
Lord Glenarthur: My Lords, I do not think that it is nearly as bad as the noble Lord makes out. During the period of the last Labour Government the total number of NHS patients waiting for in-patient admission rose from 508,390 in June 1974 to a peak of 752,422 in March 1979.
Lord Ennals: My Lords, the noble Lord really must not twist the situation. I have the figures, which were given to me by his own department, and so I know precisely what the figures were in 1979, in 1980, in 1981, in 1982 and in 1983. Will the noble Lord confirm that the figures available from his own department for 1983 show a substantially higher waiting list than that which existed even in 1939, when the Labour Government went out of office?
Lord Glenarthur: My Lords. I certainly do not have figures with me that go back to 1939, but I can tell—
Lord Ennals: My Lords, I said 1979.
Lord Glenarthur: My Lords, I thought that the noble Lord said 1939; if he said 1979, then I misheard him and I apologise. However, the fact is that the total number of NHS patients awaiting in-patient admission is lower, at 726,186, at 31st March 1983 than it was in March 1979.
Lord Ferrier: My Lords, is my noble friend aware that my information is that the assistance of chiropractic would greatly reduce the backlash of these waiting lists, and that considerable financial savings could accrue to the National Health Service if these facilities were used?
Lord Glenarthur: My Lords, with respect the whole subject of chiropractic and professions of that sort is rather a different matter. If my noble friend would like to put down an Unstarred Question on the subject, I should certainly do my best to answer it.

Business
Lord Denham: My Lords, at a convenient moment after 3.30 this afternoon my noble friend Lady Young will, with the leave of the House, repeat in the form of a Statement an Answer that has been given in another place to a Private Notice Question on industrial action by French lorry drivers.
My noble friend will then, again with the leave of the House, repeat a Statement that is to be made in another place on the Foreign Affairs Council in Brussels on 20th and 21st February.

Industrial Resources—Redeployment: EC Coal Policy
3.3 p.m.
The Earl of Lauderdale The Earl of Lauderdale rose to call attention to the need to transfer resources from heavy industries with high-cost output and surplus capacity, particularly in the field of energy, into others whose future offers prospects of continuing demand, of profitability, and of jobs; and to move for Papers.
The noble Earl said: My Lords, a bitter thumbnail sketch of our industrial almanac of shame appeared on the front page of The Times yesterday in a comment on the Scott Lithgow affair. The passage reads as follows:
"The scenario being played in and around Scott Lithgow has convinced many overseas oil companies, as well as British, that the industry is determinedly on a course of-self-destruction".
That comes from the columns of The Times of yesterday.
Less than a month ago there was a feature article in the Financial Times headed:
"Hard truths on Britain's industrial decline";
and in the very first paragraph we were told that for the first time since the Industrial Revolution our visible trade balance in manufactures went into deficit last year. In the 20 years to 1980 our manufactured exports exceeded imports by a value of more than £2 billion a year. Last year there was an adverse balance of no less than £5 billion. There are many examples. A simple one is passenger cars, but there is another about Leyland Trucks, which perhaps is worth quoting. Overseas sales have fallen from 10,000 a year to 3,000 last year and Nigeria, which took 2,500 a year in the past, took only 100 last year. There is no point in wearying your Lordships with a long catalogue, the general drift of which is well known.
In our galloping obsolescence there are, of couse, many factors—including management, unions, social values, inflation and lack of investment for lack of profit perspective—but I wish to submit that there are two which are politically avoidable. The first is the burden of old plant. I have in mind collieries, on the one hand, and electricity generating stations, on the other. The second is the consequential on-cost of energy.
My Motion, which focuses on energy costs, is procedurally bracketed with the Scrutiny Committee's coal study. That committee was chaired with predictable elegance and distinction by the noble Lord, Lord Kearton, who in turn was assisted by the noble Lord, Lord Ezra, who I am glad to see will speak later, and the noble Lord, Lord Gormley, whose return to our company is much welcomed and to whose full recovery we look forward.
As a one-time Member of Parliament for a mining constituency—Lanark—the social horror of mine closures is to me bitter and vivid, but that is the subject of quite a different debate. We on the Scrutiny Committee were faced with some macabre figures. One-twelfth of the output of the Coal Board clocked up some £300 million in losses. While the best 20 pits produce at about £30 a tonne—which matches any price anywhere in the world—the worst 20 produce at about thrice that figure, nearly £90 a tonne.
In 10 years the Coal Board's annual deficit grants have risen from £48 million to more than £400 million, and the other day Mr. Walker said that the 1984 limit would be raised to £600 million. The Coal Board's EFL for 1984—in effect, its charge on the public sector borrowing requirement—has just been raised another £200 million, from £1.195 billion to £1.409 billion.
Having heard the evidence submitted by the National Union of Mineworkers and the National Association of Colliery Managers—the case, in effect, for "no annihilation without representation"—we almost seemed to hear a case for mining regardless of cost, and never mind the figures. At one point it even seemed to me that everything was true except the facts. Broadly, they told us that the cost of 10 years' closures on the present programme, including social costs, would be of the order of £4.3 billion, while the cost of keeping the pits open would be only £2 billion.
We then received material from the Department of Energy, which told us that closure costs were half that figure and that the cost of keeping pits open was double what we had been told. Amid malodorous facts, a nose that can see is said to be worth two that can smell. Mammoth imports of coal are not on as a practical possibility for years ahead because of the enormous capital costs involved in the equipment to export it. International marketing of coal is, in fact, a relatively small factor in volume terms in world trade. But, as with the Rotterdam spot price for oil, the price at the margin is a critical marker and, therefore, the international price from South Africa and Australia—of the order of £31 a tonne delivered in Britain—is a marker. Prudence does require a diversification of source uncertainty. So despite the world price at the margin, the case for supporting coal at more than the natural market level is a strong one on grounds of diversification of uncertainty. The political question is: how much?
Whatever may be said about the losses of the Coal Board—and one appreciates that members involved in the coal industry sometimes resent this—the fact is that the future of the coal industry is certain at competitive prices. Coal is going to be required to some extent at prices higher than that. It is an essential fail-safe as a fuel for electricity generation. It is essential for the critical change as we move from an abundance of oil produced on the continental shelf to purchasing it elsewhere.
Coal should benefit, and has every prospect of benefiting, from better and cheaper use arising from fluidised combustion and, indeed, as a satisfactory source of petrochemical feedstuffs in years to come. It must, too, be a fail-safe back-up for natural gas, for which demand is rising at 2 or 3 per cent. a year. It is worth bearing in mind that Britain's natural gas supplies from 1995 onwards are not yet assured from the continental shelf, neither are they as yet contracted from the Sleipner field of Norway, which could provide a quarter of our needs; nor have they been contracted from the Soviet pipeline, which might well he an interesting source, and still less again by LNG tanker from Africa, the Mediterranean or the Middle East.
The future of coal at a competitive price is not and never has been in doubt, but the overall cost of energy has to be better than competitive if we are to recognise this as the very sinew of our industrial renewal. It has been said that knowledge makes one laugh but wealth makes one dance. The performance of electricity as a source of energy might well make one dance. While total energy use in the last 15 or 20 years has in fact shown a falling curve as against gross national product both here and throughout Western Europe, the use of electricity has been rising all the time. Between 1960 and 1980 the use of electricity rose by 50 per cent., and figures from the World Energy Conference in Delhi last year predict a further 20 per cent. rise by 1990.
What is often overlooked—and, with respect, I bring it to the attention of your Lordships—is that electricity is itself a lever for growth in all sorts of ways. There are the technical developments, such as electromagnetic induction and electric beams which focus electricity on the elementary particles themselves and make sure, in the case of plasma jets, that heat is directed only where needed. These are highly technical matters, but they are examples widely quoted. The fact is that the use of electricity is growing faster than the use of other kinds of energy, and is a factor of growth. Furthermore—what has hitherto been brushed aside—there is a possibility that within 20 years, or perhaps sooner, electricity will be a serious factor in road transport. In the laboratories of Europe there are now 12-volt car batteries the size, believe it or not, of a £1 coin. The meaning of that for the future speaks for itself.
The question is: how much more electricity are we going to need? The Central Electricity Generating Board told the Sizewell inquiry that they think the 1973 levels of consumption will be recovered and will be again required by about 1990, the dip having been due to the slump following the rise in oil prices. But what about the period from 1990 to the year 2000, or 2010? There are serious estimates from researchers in the oil industry which suggest that between the years 1990 and 2000, or certainly the year 2010, we may well need 40 per cent. more electricity than we have now. The figures quoted rise from 320 million to 450 million tonnes of oil equivalent.
What if negligence or political pressures leading to a failure to extend, let alone simply to renew, our generating capacity run us into black-outs of the scale of 1947? The Cooper Lybrand report to the last Secretary of State for Energy relative to electricity pricing reckoned that it would be prudent to consider electricity generating stations as ready to be retired "from 15 years onwards". Seventy-five per cent. of the generating capacity of this country is more than 15 years old; 61 stations are of that age and generating 40 per cent.; 52 stations are 20 years or more, generating 25 per cent.; and 33 stations are more than 25 years old and generate 10 per cent. We have an ageing element in our generating capacity amounting to three-quarters. Yet, what is being constructed now?—not more than a replacement of about 20 per cent. of our capacity at eight sites whose stations will eventually generate nearly 10 gigawatt towards the present total of 55·0.
Here is a tale of inertia, a tale of feet dragging. In the administration of inertia we still lead the world. By any

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measurement we shall be short by the year 2000, if not before, and with lead times at anything up to ten years from planning a power station to its actual commissioning, new provision is urgent now. Here is indeed a task for giants, and in energy terms the year 2000 is really tomorrow.
In political terms the Sizewell B inquiry and its result could be critical. I would say this is one of the greatest filibusters known to British history. The inquiry began in 1983 and is by no means running out of steam. Will the violence of the peaceful push it beyond 1985? Who can tell? Some pessimists think it will run to 1986. The Sizewell B inquiry has been focused more on the surplus of current capacity, of which three-quarters is ageing anyway, than on the need for replacement, for the needs of tomorrow, and on the costs of energy themselves.
Coal accounts for about 60 per cent. of the costs of the Central Electricity Generating Board. This is generally the picture with coal-fired stations. Nuclear fuel in a thermal reactor accounts for only 20 per cent. of the costs. A tonne of uranium fuel in a thermal reactor is approximately equal to 25,000 tonnes of coal, so that the economy of a nuclear system is manifest. The importance of Sizewell is not so much the extra 2 per cent. of capacity that it will add to current stock: the fact is that if the recommendation is to go forward, then there is a go-ahead for a balanced nuclear programme of AGRs and PWRs. The time is short for all this—so short, indeed, that one almost seems to be reading the advice columns of a rootless society.
In this negative and dispiriting context it is welcome, to me at any rate, to read of the steps being taken by the Central Electricity Generating Board to link up with Electricité de France. They have built 25 PWRs in 20 years and are currently building another 20. France expects to have an exportable surplus of electricity before long. The cross-Channel power link, phase 1. should be ready next year, and phase 2 the year after. We read that the CEGB are studying a large investment of the order of £100 million in Electricité de France for a swap arrangement.
Sir Walter Marshall, chairman, is quoted for the claim that French energy prices are about 30 per cent. below ours. That is a controversial figure because many questions have been asked (but never answered) about the way the French accounts are drawn and the provisions for writing off. But, whether or not French electricity is going to be cheaper, it is going to be there; and it is not going to be from run-down stations, it is going to be from new stations, and that is a matter of great significance.
Even more exciting, continuing on the European theme, are the plans now being generated by the Electricity Council and activated through the CEGB for Franco-German-British collaboration on the commercial scale fast reactor in which, may I say, a tonne of fuel is not just worth 25,000 tonnes of coal but more than a million. At the galloping tempo of France at the present time you might well see the commercial fast reactor early next century, if not before.
No matter how miraculously management-labour relations may be transformed into common sense, let
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alone into a sense of common cause, cheap energy aplenty must be the bloodstream of our industrial renewal and ability to compete. Diversification of source uncertainty is mere common prudence—coal on the one hand, nuclear on the other, for oil is likely to become dearer and scarcer. Life is neither a spectacle nor a feast, it is a predicament, and that could be an epitaph. In Britain's name, we have to take it as a challenge. My Lords, I beg to move for Papers.
3.22 p.m.
Lord Kearton Lord Kearton had given notice of his intention to move, That this House takes note of the Report of the European Communities Committee on European Community Coal Policy (10th Report, 1983–84, H.L. 80).
The noble Lord said: My Lords, in rising to speak to the Motion so powerfully and ably presented by the noble Earl, Lord Lauderdale, I should perhaps make it clear that I shall also he speaking on the Motion which is down in my own name and which follows his on the Order Paper, with the result that I shall be speaking a little longer than I would like, and I therefore apologise in advance to your Lordships.
It would be churlish not to give the Government credit for considerable achievements in the economic field over the last few years. Inflation is down, interest rates are down, the trough of the recession has passed, and there has been a considerable surplus on the balance of payments account. In many areas productivity is up and there is a growing acceptance of the idea that too high wages leads to loss of jobs. The country is becoming virtually strike free, and union stridency has, nearly everywhere, been replaced by reasonableness, even if not sweet reasonableness.
But there is a darker side to the picture. While economic growth has resumed, it is still at a very modest level. Unemployment is historically very high, although do not let us forget that there is nearly a record number in jobs, and there is no expectation on the part of the Government that unemployment will fall to any extent in the next three years. The recent White Paper on Expenditure Forecasts shows how difficult it is to control Government and municipal spending. To bring the total taxation take in percentage terms down to the level of 1979 is calling for stern housekeeping; and the published tables in the White Paper are based on the continuation of 1983's internal growth trends and on a continual recovery in world trade.
To help to balance, cuts in expenditure are being made in some areas, particularly in higher education—a not very clever place to make cuts. To keep the public sector borrowing requirement within tolerable limits recourse is had to once-for-all sales of national assets and to some fairly blatant over-pricing of gas and electricity. But while the neat balancing, which does prudently include contingency amounts for the unexpected, can be admired, the economic outlook for the late 1980s and for the 1990s looks very fragile.
In the next three years, the period covered by the White Paper, a major component of taxation take comes from North Sea oil. It will not be far short of £10 billion for 1983–84 and could be even higher in the following two or three years. At the same time a

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major plus on the balance of payments accounts is the net oil figure, which is almost £7 billion for 1983, and which again could be even higher in the next two or three years.
Looking ahead a bit further, it seems likely that North Sea oil production will start to fall in 1987 or 1988. The steepness of the fall will depend on what new oil fields will be initiated this year and next. The list of probables and possibles is a credit to the oil industry and its exploration efforts. But the list is one of small fields with relatively low maximum daily production rates. Opinion in the oil industry clusters around the view that oil self-sufficiency, about 60 per cent. of current output, is still a 50/50 chance for the early 1990s, but the net exportable surplus will disappear, and the new oil will not provide the same tax revenue as current oil.
A halving, or more, of the oil tax take at present money values is on the cards. Even the import bill element of natural gas is set to go up. The proposed price for gas from the Norwegian Sleipner field to replace gas from the Norwegian side of the mature Frigg field will add about £1 billion a year to the import bill. It seems crystal clear that our economic future will once again rest primarily on the strength of our manufacturing industry—our battered, reduced, manufacturing industry, where some 2½ million jobs have been lost in the last decade.
The balance of our non-oil visible trade was nearly £8 billion in the red in 1983. We imported nearly £45 billion of manufactured goods and exported just under £40 billion. An historic surplus on the manufacturing account, as the noble Earl, Lord Lauderdale, pointed out, a surplus existing with hardly a hiccup for 200 years, has turned into a substantial deficit. Last year it was the culmination of a trend evident over the last few years.
It is true that there is a handsome surplus on invisible trade, probably £3 billion in 1983, and with the big increase in overseas direct and portfolio investment since 1979 the invisible surplus should rise. But there is not the remotest possibility in my view that net invisibles could ever pay for more than a very small fraction of the current import bill for maufactures—the massive figure of£45 billion already mentioned.
In our manufacturing industry there is a continuous development. Older standbys decline in importance and newer products take up the running. But decline is not the same thing as elimination. If we lost our basic heavyweights and had to import all our steel, all our textiles, all our cars and lorries, all our chemicals, all our glass, and all our multitudinous older metal products, then the balance of trade, including loss of current exports in these fields, would suffer by up to £30 billion. Unemployment would soar, the budget would be wildly unbalanced, and, in a word, we would be sunk.
Basic industries are indeed basic, and the newer industries, so many of them rooted in electronic manipulation, could not make good the vast lacuna which loss of the heavyweights would entail, and we have to bear in mind that we are not currently exactly world beaters in the sunrise electronic industries. To
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keep up competitively with the Americans, the Japanese, and our colleagues in Europe will call for all our ingenuity, our inventiveness, our application and our drive. It is encouraging to me personally that we have been sensible enough not to have abandoned steel; not to have abandoned the vehicles industry, but to have supported them from taxation during their recent travails; and that we are taking a similar attitude with aero engines and aeroplanes. The support has been conditional, quite rightly, on vigorous self-help and revitalisation within the industries themselves. I hope that something similar can be worked out for commercial shipbuilding, including a capability to build offshore oil exploration vessels.
The example which Sir Michael Edwardes set at British Leyland and the achievements of Mr John Egan at Jaguar highlight the crucial importance of management and leadership in what can be recovery situations. We have had a net trade deficit, as my noble friend Lord Lauderdale has pointed out, of £2.4 billion in the United Kingdom motor industry in 1983. If we could turn this into a net surplus of £2.4 billion in the next two or three years, it would be the most positive single sign that our economic future could be assured.
I have not time to deal with recent developments owing so much to strong and positive leadership in the private sector. I shall mention just textiles and chemicals. These two industries were fiercely hit by the absurdly high exchange rates from 1980 to 1982; rates which, at the time, the Government regarded with complacency and which did nearly mortal damage. Without any Government aid, these two industries are more prosperous again, although not at a level equal to their former outputs. Many other old industries are also on their toes, more productive with good labour forces and with aggressive management. They could grow again.
The Government could give immediate encouragement, very definitely needed, by action and stimulus along the lines that the Confederation of British Industries has suggested to the Chancellor, and I hope he takes the CBI's advice.
The Motion which Lord Lauderdale has so eloquently introduced calls for the need to transfer resources from heavy industry with high cost output and surplus capacity into others with better prospects. This provides a peg on which we might hang the recent report of the European Community sub-committee dealing with European Community coal policy. The sub-committee, on which it was a privilege to serve, included Members of your Lordships' House with great experience in energy matters. It was particularly happy that these included the noble Lords, Lord Ezra and Lord Gormley, whose valiant strivings for the welfare of the United Kingdom coal industry and all those who work in it have given rise to such admiration. The committee was also fortunate in its specialist adviser and in its clerk. At the conclusion of its work the committee paid these two gentlemen a heartfelt tribute.
In considering the Commission's proposals—modest indeed compared with those made a few years ago—the committee was travelling in part on well-trodden ground. Nevertheless the inquiry was thorough. The committee trusts that your Lordships will find the conclusions, summarised in 23

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paragraphs at pages 37 and 38 of the report, realistic. In brief, the key finding was that, while European coal demand is likely to increase appreciably by the year 2000, almost all the increase will be met by imports from outside the EEC. These imports are likely to be available from a wide variety of sources at landed prices which are comparable with the costs achieved at the most economic pits within the Community. The substitution of a measure of coal import dependence for the existing oil import dependence is regarded as tolerable. It is clear that both domestic and worldwide coal reserves will last long after oil and gas reserves are exhausted.
It was deeply disappointing that the sub-committee had to conclude that there was no hope for the United Kingdom to supply more than a tiny fraction of the Community's import demand. The landed cost of United Kingdom coal from inland sites to Community reception ports is forecast to be appreciably higher than the landed cost of coal imported in bulk over deep water. To match imported coal prices in any volume would lead to large losses for the United Kingdom industry.
Within the United Kingdom itself the main conclusion of the committee was that it was unlikely that demand up to the year 2000 would differ much from present levels. The Plan for Coal drawn up in 1974 and the subsequent reviews of the plan have all proved to be much too optimistic. There is absolutely no case in terms of coal need to keep open grossly uneconomic mines. Indeed, if your Lordships will forgive the language, it is nonsensical. The way forward is to spend money on new investment in the presently profitable mines which have adequate long-term reserves and to open up new coalfields which hold the promise of high productivity and low costs of production. This is so obvious that one can only marvel at the obtuseness of the long and ultimately futile rearguard action which obstructs the rapid implementation of such a policy.
Clearly the social consequences of a realistic policy have to be faced and the costs met. These costs, in the sub-committee's view, should fall on the United Kingdom Government, representing the full body of the taxpayers, with help from the Community. They should not just fall on the Coal Board. Present practice piles nearly all the costs of adjustments on to the board's accounts, as it does the costs of serving past unproductive capital expenditure and the costs of making good past environmental damage. A committee recommendation is that at a convenient time the Coal Board's balance sheet should be reconstructed on a realistic basis. Similar action has already been taken with respect of the steel corporation, and write-offs are not new costs but a tidying up of past misjudgments and expenditures.
The future of the United Kingdom coal industry in the early years of the 21st century depends to a considerable extent on decisions about new nuclear power stations. The Magnox units of the 1960s are now over half-way through their useful lives. The fossil fuel fired stations of the 1960s and 1970s which carry the bulk of today's electrical load will have a much longer life than originally supposed; it could be more than 40 years.
Here is where, with regret, I part company to some
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extent with my noble friend Lord Lauderdale. These giant stations are now working well after a decade or more of running-in troubles. They operate with great reliability, great flexibility and with high thermal efficiencies. The individual boiler turbo-generator units are about the optimum size for this country. New stations do not offer much hope for any greater thermal efficiency or greater flexibility. A programme of steady replacement of critical parts for existing stations represents sound economic policy. This is the policy which the generating board is following. But an ordering programme of one, or perhaps two, new 2,000 megawatt stations a year, whether coal or nuclear, could be prudent.
The Sizewell PWR option is being thoroughly evaluated at the current inquiry. The longer it goes on the more time the successful and reliable AGR design—the design exemplified in Hinckley Point 2 and Hunterston 2—has to show its value as the alternative to the PWR design. The up-to-date version of this particular AGR design at Heysham 2 and Torness stations, currently under construction, is being built to time and at well below budget. In contrast, the record of the cost overruns of recent stations of PWR design in America has become, to say the least, disturbing.
Another 21st century use for coal is in steam raising for industrial purposes—an area where coal lost out massively to oil in the years after 1960. The EEC is encouraging such development and the sub-committee endorses this approach.
On the other hand, the once great hopes that coal liquefaction and gasification would soon provide major markets have been deferred. But the sub-committee believes that research into these developments should be pressed forward with EEC support. Liquefaction and gasification could still be great industries with high technological content some 30 years on. Coal, economically produced, could be a sunrise industry itself and a source of further sunshine in its offshoots.
I must mention in this connection one aspect of the United Kingdom coal position which your sub-committee would like to see firmed up. This is the question of economically recoverable reserves. The figure of from 4 billion tonnes to 5 billion tonnes—sufficient for from 30 years to 40 years of production—is well established. The much larger figure of 45 billion tonnes often bandied about requires more verification. It is double the amount of coal produced in total since the start of the industry hundreds of years ago. Your sub-committee recommends that the Institute of Geological Sciences and the Department of Energy should engage themselves in an authoritative assessment and review of the Coal Board figures.
My Lords, in conclusion, perhaps I may restate my view that our national economic position is currently strong but is precariously based and that, while pressing on with the development and encouragement of new industries and of more diverse service activities, we should give major attention and attach due importance to what are generally known as basic industries. These industries will remain truly basic for as long as we want to enjoy the fruits of a prosperous economy.

French Lorry Driers' Industrial Action
3.41 p.m.
Baroness Young: My Lords, with the leave of the House, I will now repeat the Answer which has just been give in another place to a Private Notice Question on the French lorry drivers' dispute:
"Consular assistance is being provided to those in need. Consular officials have been touring the main areas of disruption contacting groups they know to be stranded. They are providing cash, against the usual undertakings, where this is needed. Local inhabitants and French authorities have also been offering shelter and food. We have made our concern for the safety and welfare of British lorry drivers and other travellers very clear to the French Government both in Paris and to the French Ambassador here."
Lord Underhill: My Lords, the House will be grateful to the noble Baroness for repeating the Answer given in another place. While appreciating the activity now taking place from the British consulate one must ask why there is this delay. The noble Baroness will undoubtedly have heard on the radio appalling reports of some lorry drivers having been stranded for eight days without any contact at all from any United Kingdom representative. I must ask why there is this delay. I wonder whether The noble Baroness can amplify on the question of assistance, because I heard on the radio one lorry driver who complained of shortage of food, of the difficulty in getting diesel oil replacements (because they need to keep the engines going to keep themselves warm); and I must ask: what arrangements will be made for possible relief crews, and for the security of the vehicles if the crews have to leave them and they are stranded for from six to eight days?
While we, naturally, do not wish to be involved in a French industrial dispute, it would appear that one of the basic arguments concerns frontier formalities. Therefore, what immediate action are the Government going to take at international level because of the frontier formalities? Also, what action will be taken in the long run to ensure that frontier formalities are eased out? Furthermore, if the industrial dispute involves a question of hours and periods of duty, does this not confirm the importance of the review being undertaken by your Lordships' EC Committee F into the whole question of driving and social conditions?
Lord Diamond: My Lords, we, too, are grateful to the noble Baroness for repeating the Answer to that Private Notice Question. Our anxieties are the same as those that have been expressed already. The Government should do not only what they have done but more than they have done, and more quickly, to come to the assistance of those in great need. I would not wish to delay the House with any other point.
Baroness Young: My Lords, I appreciate the concern which has been expressed by both the noble Lord, Lord Underhill, and the noble Lord, Lord Diamond, on this matter. I should like to confirm that the British Government have made their concern for
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the safety and welfare of British lorry drivers and other travellers very clear to the French Government, both in Paris and to the French ambassador here. We had a broadcast on the BBC by our Consul-General in Lyons yesterday and again today, and my honourable friend Mr. Whitney went on the "World at One" programme to explain the situation. We have been assured by the French Government that it is doing everything possible on the political front to resolve the situation.
As to the practical help that has been offered, I should like to make it clear that consular officials have been providing money where that has been required, against undertakings to repay. They have been giving other help when they can; for example, in supplying emergency transport. I understand that there was particular difficulty at Mont Blanc, where there are 500 British lorry drivers in the area of the French-Italian border. We expect that consular officials will get through to Chamonix today but they, too, have been hampered by the blockade. The advice that we are giving to those who are stranded is that they should try to contact consular officials in the area or to telephone to the nearest consulate. I should confirm that we have extra staff standing by in Paris to go to the area if necessary.
Lord Kaldor: My Lords, I realise that the noble Baroness is hardly answerable for the action, or rather inaction, of the French Government. Nevertheless, I should be very interested in her views as to whether a similar situation could arise in this country. I should have thought that if British lorry drivers blocked the Queen's highway the police would come and forcefully remove the drivers, then move the lorries, and that they would not tolerate a situation where the roads are blocked for days by a limited number of lorry drivers.
Baroness Young: My Lords, I do not intend to speculate on the proposition that the noble Lord, Lord Kaldor, has put up. We do not anticipate such a situation in this country.
Lord Gladwyn: My Lords, would it not be necessary for us, if things go on like this much longer near Chamonix, to ask the French Government to supply helicopters to evacuate what seems to me to be almost the equivalent of shipwrecked mariners on the roads which are totally blocked by lorries?
Baroness Young: My Lords, obviously, we are watching the situation most carefully, even if it is not necessary to go to the extent that the noble Lord, Lord Gladwyn, has suggested. If the situation should get worse, we should have to consider whether there was anything further we could do.
Lord Hankey: My Lords, having just come back from that area and having seen the hundreds of lorries stepped two deep all the way along the roads on the other side of the Alps, bearing in mind that the difficulty has originated with the Italian Customs officers who feel that they are overworked, and in view of the enormous interference with European trade that is going on, may I ask the Government whether there are any means of getting the Common Market to do something about it?
Baroness Young: My Lords, I should imagine that all countries in the European Community are equally as affected by this strike as we are in Great Britain and no doubt are making their representations just as forcefully.
Lord Maude of Stratford-upon-Avon: My Lords, since it appears now that in France militant pressure groups are able to bring normal trade and passenger and freight traffic to a standstill, sometimes not without violence, and since this is clearly in restraint of trade, is not this (as the noble Lord has suggested) clearly a matter which should be taken up by the European Community authorities?
Baroness Young: My Lords, I note what my noble friend Lord Maude has to say on this. It may well be that if it persists, this is what will happen.

Foreign Affairs Council: Brussels Meeting
3.48 p.m.
Baroness Young: My Lords, with the leave of the House, I shall now repeat a Statement being made in another place by my right honourable and learned friend the Secretary of State for Foreign and Commonwealth Affairs. The Statement is as follows:
"With permission, Mr. Speaker, I will make a Statement on the outcome of the Foreign Affairs Council held in Brussels on 20th and 21st February, at which I represented the United Kingdom and my right honourable friend the Minister for Trade was also present. A Co-operation Council with Israel on 20th February and a ministerial conference with Spain on 21st February were also held in the margins of the Council.
"The Council gave unanimous support to my proposal for a request for the Parliament's opinion on the 1983 refund regulations to be given in time for them to be considered at the next meeting of the Foreign Affairs Council on 12th/13th March.
"There was a follow-up discussion to the talks which had taken place over the weekend on preparation for the European Council next month. It was agreed that the Commission should now produce a document covering all those aspects of the negotiations not already being handled in other specialist councils. The paper will therefore cover the central budgetary issues—budget imbalances and budget discipline—for discussion at the March European Council. Separate discussions between individual member states will of course continue in the meantime.
"The Council agreed a substantive declaration on the agricultural transitional arrangements with Spain, which was presented to the Spaniards at the ministerial conference.
"The Council reached agreement on the arrangements which will govern Greenland's relationship with the Community from 1st January 1985. There will be a treaty amendment linked to agreements on fisheries which balance the development of Greenland's own fisheries with the needs of the Community. The change in status is subject to
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ratification by member states in accordance with their constitutional procedures.
"The Council had a first discussion, without taking any decisions, of the Commission's proposal to stabilise imports of certain cereal substitutes.
"The Council agreed a declaration emphasising the Community's concern at the build-up of protectionist pressures in the United States. The Council also discussed the proposal for a new Common Commercial Policy Regulation. Work is to continue on the technical aspects of this.
"The Council reviewed progress in negotiations to renew Voluntary Restraint Agreements for steel imports from EFTA suppliers and Spain."
My Lords, that concludes the Statement.
Lord Cledwyn of Penrhos: My Lords, we are grateful to the noble Baroness for repeating the Statement. We much regret that the meetings were so disappointing. Would not the noble Baroness agree that, unless urgent action is taken and a settlement achieved at the Summit in Brussels on 19th and 20th March, a very grave crisis will follow? Does she think that bankruptcy is a possibility in those circumstances?
We welcome the support of the EEC Council referred to in the Statement and their decision to request a special meeting of the European Parliament before 12th March—an essential pre-requisite, as I understand it, if the rebate is to be paid before the end of the financial year—and we hope that the budgetary problem will be resolved. If there is no progress, can the noble Baroness say what steps the Government will then take? Do they propose to withhold part of the contribution for 1983–84?—that is, equivalent to the sum owing? Also, can she say whether, in those circumstances, they would agree to an increase in the amount of own resources?
Finally, are the Prime Minister's projected meetings with Chancellor Kohl, Prime Minister Lubbers of the Netherlands and President Mitterrand designed to help resolve these very serious difficulties which are impending?
Lord Gladwyn: My Lords, I thank the noble Baroness for repeating this important Statement. Am I right in thinking that parliamentary approval is necessary before we can get our agreed refund of £475 million, or whatever it is? If so, what are the prospects of the Parliament agreeing to such a refund?
With regard to the budgetary issues referred to in the Statement, I take it that by "budgetary imbalances" is implied the whole vexed question of the excessive present expenditure on agriculture, involving of course the production of absurdly large surpluses. "Budget disciplines" I take it we must understand to refer to the allegedly unfair contributions made by some members to the common funds. Are we to assume that on these two crucial issues there has been no unanimity at all in the discussions during the last two months between all the experts of the countries concerned and, that being so, that everything depends on the ability of the Commission at the last minute to produce some compromise capable of being accepted by the European Council on 4th March? I fear the chances of this appear to the uninitiated observer at the moment to be extremely dim!
Baroness Young: My Lords, I should like to thank the noble Lords, Lord Cledwyn of Penrhos and Lord Gladwyn, for their reception of the Statement. The noble Lord, Lord Cledwyn, asked a number of questions and his first was: if we do not get the refund that we are entitled to, would we consider withholding our payments? The view of the Government is that, of course, we want to secure payment of the bulk of our refunds by the end of March and we do not want to precipitate a premature and needless confrontation over this matter. My right honourable friend the Secretary of State for Foreign and Commonwealth Affairs raised the issue of Parliament's attitude at the Foreign Affairs Council on 20th February. The council agreed to adopt my right honourable friend's suggestion to send a letter to the Parliament under Article 139 of the EEC Treaty, formally requesting the Parliament to give its opinion on the refund regulations in good time for the Foreign Affairs Council on 12th and 13th March. I hope that what I have said answers the first point put by the noble Lord, Lord Cledwyn, and also the point put by the noble Lord, Lord Gladwyn, on the need for Parliament to give approval for the refund.
On the question of own resources and whether or not we would withhold our contributions, my right honourable friend the Prime Minister made it clear at the end of last year that if the Community does not meet its obligations on the 1983 refund, we would have to take steps to safeguard our position; but of course we would not wish to do so prematurely and we hope that, following this letter that has been written to the European Parliament, the Parliament will give a favourable opinion on the repayment of the refunds to which we believe ourselves entitled.
The noble Lord, Lord Cledwyn, also asked about the meetings which my right honourable friend the Foreign Secretary is to have. Of course, I have no doubt that the issue of the budget will be one of the matters to be discussed at the meetings. This is a matter which clearly is of great importance not only to us but to the whole of the European Community.
The noble Lord, Lord Gladwyn, asked what was meant by "imbalances" and "budget discipline". On budget discipline, we believe that there should be a ceiling on the amount of expenditure and on the amount of expenditure which should go to the common agricultural policy. As to imbalances, it is of course a question of the disproportionate amount which we as a country pay into the budget. We hope very much that the Community will look positively at our proposals for a safety-net in order to meet our specific budget problem.
Lord Cledwyn of Penrhos: My Lords, I am very grateful to the noble Baroness for those answers. Would she not agree that it is very important to underline the gravity of the developing situation within the Community? There are three weeks to go before the next summit, which will be a crucial occasion. Would she be prepared to say to the House and to the country that unless a settlement is achieved a very serious economic crisis will follow?
Baroness Young: My Lords, I should be perfectly prepared to agree with the noble Lord, Lord Cledwyn,
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that this is a very serious matter. We hope very much that we shall get a settlement by the March meeting, and of course it is a very serious matter not only for us but for the whole Community as the year goes on. Not only is it important in terms of getting a settlement on the budget and on the CAP, but of course until that happens the Community cannot think positively about many of the other things which it might be doing.

Industrial Resources—Redeployment: EC Coal Policy
Debate resumed.
4 p.m.
The Chancellor of the Duchy of Lancaster (Lord Cockfield): My Lords, I propose taking a broad view of the canvas which my noble friend Lord Lauderdale has painted in a speech of great interest and insight and, indeed, prophetic quality. There was much, too, in what the noble Lord, Lord Kearton, said with which I would agree—not quite everything—but he speaks from an enormous fund of practical experience.
We do, indeed, need to look to the future and to be quick to seize the opportunities which open up before us. We have lived through a period of severe recession and a period characterised by great changes in the economic structure of the developed and the undeveloped world alike. Adaptation to change is difficult, even in times of prosperity. It is doubly difficult in times of recession. It is particularly helpful, therefore, to have this debate at a time when there are encouraging signs of economic recovery, when we can ensure that as the economy recovers it is pointed in the right direction.
Recovery is certainly now well under way. Growth of GDP in the first three-quarters of 1983 was 3 per cent. above the same period in 1982. Industrial output is well up—some 6¾ per cent. higher than at the bottom of the trough in 1981. Output of chemicals, electrical and instrument engineering, car production and private sector housing all show very healthy increases.
Our rate of growth in 1983 was higher than in any other country in the European Community, and we expect it to be higher also in 1984. It is unusual for the United Kingdom's economy to be pointing the way. It is particularly encouraging that in this instance it is. Hitherto, consumer expenditure has been the mainspring of that growth. This is normal in the early stages of recovery. Henceforth, we should expect to see investment and exports take up the running. Indeed, total fixed investment is now 10 per cent. higher than at the trough of the recession. Exports are rising strongly, corporate profits are rising and liquidity is improving rapidly. These are healthy developments which bode well for investment and for the future.
The Motion stresses the importance of structural change in the economy. No economy can be static. Patterns of economic activity and employment are under constant change. About 350,000 people enter and leave employment every month. There are some 6 million job changes in every year. These changes require people to change the industries they work in,

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the places where they work, their skills and occupations and their working practices. The pace of change is quickening—the evidence is all around us—and it will continue to quicken.
Market economies have a great capacity to cope with change. This is their great strength compared with planned economies. Experience shows that no planning techniques can match the efficiency of the market economy as a means of satisfying customer demands and adapting to changes in those demands.
Within the manufacturing sector itself there have been major structural changes, but the picture is far from one of universal decline. Expanding manufacturing industries over the last decade include aerospace, chemicals, instrument and electrical engineering and particularly electronics, which are up by some 56 per cent. in real terms over the period, and pharmaceuticals which are up by 73 per cent. Of the sectors whose output has declined over the last decade by more than average, there are a number of heavy industries—metal manufacture, which includes steel, down 34 per cent.; shipbuilding down 25 per cent. and mechanical engineering, not all of it "heavy", down by 17 per cent. Because of our history, it was inevitable that many of the older industries would decline. Their problems have been worsened by the severe world recession that followed the second oil crisis in 1979 and by the spread of industrialisation in the third world. There is, indeed, a price to be paid for support to the third world.
The lack of competitiveness of many of our industries has also been a factor. This has been seen in a reluctance to accept change by both management and labour, leading to a refusal to adopt working practices or new technology which are commonplace among our competitors, or to recognise the imperative of closing uneconomic units and concentrating investment and output where efficiency is highest.
My noble friend's Motion calls attention to the need for resources to be transferred from the declining industries to the growth points of the economy. I agree with the sentiment behind the Motion. The recovery upon which the economy is now embarked will develop into sustained growth only if British industry further improves its competitiveness, and if unnecessary restrictions on the processes of adjustment and change are swept away.
The task of raising competitiveness is one for industry itself. The main contribution of this Government has been their determined fight to bring inflation under control by strict control of public expenditure and monetary growth. The success of this policy is there for all to see. Prices actually fell last month for the first time in 14 years and the inflation rate is now on course to drop below 5 per cent.—better than almost all of our competitors.
Provided the Government themselves follow responsible monetary and financial policies, the key to continuing success is moderation in wage settlements as the recovery picks up and as the demand for labour increases. And there are encouraging signs that people really do now understand that excessive wage settlements reduce employment opportunities. In contrast, falling unit labour costs and increasing productivity mean increased competitiveness, higher output and
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greater employment. There is still a long way to go to improve British industry's competitiveness, if we are to match the best in the world, and further structural change will certainly occur and, indeed, will need to occur.
The Motion draws specific attention to the problem of the heavy, high-cost industries with surplus capacity. Many of these industries are located in areas where unemployment is high. The skills of their labour forces are in limited demand in the growing parts of the economy. It is this which makes their contraction so painful.
My noble friend's Motion is coupled with a debate on the Select Committee's report on the coal industry. We all recognise the importance of that industry; the opportunities that are open to it and the problems that it faces. In many respects, it illustrates better than anything else the problems associated with change in an industry with a long history and one which, given the right policies and the right attitudes, has an equally long future. I will leave detailed comment on the coal industry to my noble friend Lord Avon, who will be speaking at the end of the debate when he has had the opportunity of listening to the contributions made by your Lordships. I myself will choose as illustrations two other heavy industries which have had to undergo a period of reconstruction; namely, steel and shipbuilding.
The steel industry is the locus classicus of misdirected public investment. Huge sums of money were invested in facilities which were not, and never would be, required. No better illustration exists of the fact that capital expenditure, whether public or private, is of no avail unless it is properly directed and profitable, otherwise it is simply a waste of the nation's resources. This misdirected investment, coupled with poor productivity and overmanning, left the industry ill-equipped to face the appalling problems brought by the world recession. But vigorous measures have been taken. They are now hearing fruit in markedly higher productivity and a sharp reduction in losses. Manpower has been halved. Output is now rising. But we have to accept the fact that the industry will be much smaller than it was—as, indeed, is true for Western Europe as a whole. But at least on this basis we have the opportunity of establishing a viable industry with a long term future. This is the most interesting and, indeed, heartening illustration of the way that an industry, which at one time seemed to be on the brink of disaster, can be saved and offered real hope for the future as a result of the combination of vigorous management and a workforce prepared to adapt to change.
While, for steel, there is real promise for the future, the picture in shipbuilding—particularly in merchant shipbuilding—remains clouded. Here again, we have an old industry, bedevilled by restrictive practices, characterised by overmanning and with an appalling record of productivity which no one now, on either side of the industry, would seek to defend. The Government have been generous in their help. We have provided nearly £1,000 million since we took office. But there is a very long way to go in improving productivity and reducing overmanning if orders are to be secured and the investment justified. But the

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industry does now have a vigorous new chairman, and therein lies its best hope.
While then we must make every effort to improve the efficiency and viability of the old industries, for the future we must look increasingly to the sectors of the economy which are expanding. This is where the new jobs and the new prosperity will come from. These are the industries producing and using the advanced technologies—in manufacture, in communications and in the service industries. I have already given a number of examples. We need to be ready to adapt to changes in technology and to changes in the pattern of demand for goods and services. That adaptation needs to take place at all levels. As individual employees and managers we need to be prepared to embrace changes in technology and the alterations in our attitudes and working practices which must follow. And as a country we must also take full advantage of the growth in the services sector which has been taking place over the last decade.
The term "service industries" has begun to acquire in some quarters a somewhat disparaging connotation. This is based on old folk memories going back to the days before Adam Smith wrote The Wealth of Nations. The term "service industries" tends to be associated in many people's minds with hotels and tourists, with leisure activities and so on. These are important, both in terms of domestic industry and in terms of exports. But the really important point to make is this: the emerging new technologies—in the North Sea, in communications, in electronics and in computers—frequently reside in what are called "service industries". Even British Telecom, if I may be forgiven for quoting that example, is a "service industry". London, too, remains the centre of the financial world: banking, insurance, consultancy and a host of other services which strengthen our economy at home and abroad. Manufacture could not exist without the service industries to support it. There is no conflict—except artificial conflict created for the purposes of debate—between "manufacture" and "services". They are a partnership, but a partnership where, not just in this country but in all advanced economies and particularly in the United States, the services partner is showing the greatest vigour.
For every 20,000 jobs which are shed by manufacturing industry, 25,000 are created in the service industries. This is partly a direct response to the fact that advancing technology and changes in the pattern of tastes and incomes mean that we spend more of our income on services. But it also reflects the fact that the increasing complexity of manufacturing processes and of the market mean that more and more aspects of development, of production, of design, of distribution and of marketing are now being supplied as specialist services instead of being supplied in-house. Part of the apparent decline in manufacturing activity is accounted for by a transfer of some of that activity to the services sector. The same trends are responsible, at least in part, for the growth of self-employment which replaces conventional employment. The "lump" in the building industry is a familiar example, but we are seeing the same development elsewhere.
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These changes in the pattern of our economy are well illustrated by the fact that total employment in services has grown by some 1¼ million in the last 10 years. An extra half million of these jobs were created in professional and scientific services, and a further 0.3 million in insurance, banking, finance and business services. No less than 210,000 new jobs were created in the service sector in the first three quarters of 1983. In all, some 63 per cent. of the total labour force is now employed in the service industries and they account for about the same percentage of total output.
The Government's primary responsibility is to set the right framework within which industry operates, but in addition the Government do spend substantial sums in various forms of financial assistance to industry. The objective is the promotion of an efficient and profitable industrial sector and an expanding private sector of the economy. Financial assistance is intended to help industry to adapt and respond to new pressures and new opportunities. Our aim is to make this spending more cost effective and more conducive to enterprise and growth and, therefore, to the creation of new jobs in new fields.
An important part of our financial assistance is devoted to regional policy. We are committed to an effective regional policy to ease the process of change in hard hit areas and to encourage new businesses in those areas. But we are reshaping regional policy to make it more cost effective, more attuned to the need to improve our competitiveness and, in particular, more effective in creating genuine and lasting new jobs.
A rising proportion of our financial assistance is directed towards the encouragement of research and development and innovation. It is our policy to encourage innovation in all sectors—in mature industries as well as in the so-called "sunrise" industries. Expenditure on the "Support for Innovation" programme is currently running at a rate of £330 million per annum.
Also vital to the process of adjustment and growth is the reduction of the many barriers to change which seem to be so much a feature of British society and its institutions. While, again, much of the responsibility must lie with industry itself, the Government are playing their part. We have dismantled a whole host of controls—dividend controls, exchange controls, price controls, hire-purchase controls—which inhibited and distorted the efficient working of the competitive market system.
Of particular significance is the major programme of privatisation which will free many industries now unnecessarily in the public sector from the constraints of Government control, and expose them to the challenges, disciplines and, above all, the opportunities of the market place.
We have taken important steps to make the labour market work more efficiently. This is vital to the process of helping resources move from the declining to the growing parts of the economy. Our education and training system must be more responsive to industry's needs. The technical and vocational education initiative promotes experiment in schools, while the youth training scheme assists with the transition from school to work. The new training

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initiative will reform skill training by replacing traditional time-serving apprenticeships by a system of standards, and will open up training opportunities for adults.
It is through greater adaptability, mobility and entrepreneurship that the future of our industry, and therefore of our standards and way of life, depends. As I have said, the Government's responsibility is to provide the right framework within which economic change can take place more smoothly and more quickly. Government cannot determine the process of change. Still less can they determine the manner and places in which change will happen, The future structure of industry, and therefore the future pattern of jobs and employment, depends upon the individual choices of employers, employees and customers—above all, upon the choices of customers. It is when industries have neglected to recognise and respond to their customers' needs that industries have been forced into decline. Conversely, growth and output follow success in meeting the needs of customers. My Lords, my noble friend's Motion is timely; I am sure it will stimulate an interesting and constructive debate.
4.23 p.m.
Lord Stoddart of Swindon: My Lords. I, too, would like to congratulate the noble Earl, Lord Lauderdale, upon introducing this subject. Indeed, I should like to congratulate him on the manner in which he moved his Motion. It showed an erudition and great knowledge of the subject. I very much enjoyed his speech and I hope that the House will learn from it. I was impressed also by the introduction to his report by the noble Lord, Lord Kearton. Again, he showed not only a knowledge of the oil and coal industries—indeed, of all the fuel industries—but also that he has an enormous grasp of the economic problems and industrial policies which face us at the present time.
The noble Earl, Lord Lauderdale, drew the attention of the House to the fact that we had a visible trade deficit last year of some £5,000 million. He rightly said that that was a disaster for this country. Most of that visible deficit occurred in the EEC; the visible trade deficit for the EEC last year was £6,000 million. I merely mention that to point to the fact that in other markets of the world we are still creating surpluses although—because we do not import their goods—we have taken away their ability to buy our own manufactures. Therein may lie one of the keys to future success. In other words, we should broaden our approach to the world market.
The noble Earl was also concerned that by the end of the century we may be suffering blackouts. I do not happen to agree with him, and I shall seek to show why when I come to deal with the Select Committee's report. He mentioned also the PWR in France. He felt that that was a great, forward-looking programme of investment in a modern industry, and that France will be seeking to export her electricity elsewhere.
In the latter of those contentions, I believe that the noble Earl may be right—because the French have over-stretched themselves in the provision of nuclear energy. Indeed, there was a recent report in the Financial Guardian headed,
"The Great French Nuclear Disaster".
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It has been a disaster because the French have invested in a programme of nuclear power stations far in excess of any demand which exists now or is likely to exist in the future. Indeed, about half of French nuclear power plants are standing idle at the present time.
If nuclear plants are good for anything at all, they are good for base load. They are not flexible enough to deal with loads which are fluctuating. Therefore, the French nuclear power industry is now carrying—or the consumers are now carrying—the burden of enormous capital expenditure which is lying idle. I hope that we shall be very careful before we embark on a similar adventure.
The noble Lord, Lord Kearton, broadened this discussion to an extent which I would not have dared to contemplate, lest I was accused of being party political. Nevertheless, I am glad that the noble Lord did broaden the debate to that extent, because everything he said was so absolutely right. He pointed to the difficulties, and he almost rehearsed the debate which the noble Lord, Lord Cockfield, and myself had last night over the future prospects of our country when North Sea oil revenues stop coming into the Exchequer and no longer enable our balance of payments to be in credit. The noble Lord, Lord Kearton, described very graphically how, when North Sea oil revenue ceased to flow, and if we have not by then recovered our manufacturing industry, this country will be in a very difficult situation. He was absolutely right, and I sincerely hope that the Government will take note of what he said.
The noble Lord was also right to draw attention to the blatant overpricing of gas and electricity. Again, the noble Lord is so right. Only today his view was confirmed by House of Commons Select Committee on Energy which produced its report on energy pricing in the gas and electricity industries. I would like to quote what they said about electricity prices:
"We would summarise our conclusions on the proposed electricity price increase as follows. It is not justified on the grounds either of the industry's financial target or the Government's economic pricing policy. The only plausible reason for it is the Government's desire to raise additional revenue for macro-economic purposes. This being the case the Treasury should have the honesty to say so rather than retreating behind a smokescreen of economic pricing. Finally, the manner in which the 1984–85 EFL was imposed on the industry is in conflict with the agreed framework within which the Government and nationalised industries are supposed to operate".
That absolutely confirms what the noble Lord, Lord Kearton, said. I would draw attention to the fact that that was not a report produced by the Labour Party or the Liberal Party; it was produced by the all-party Select Committee on Energy, on which, of course, a majority of Conservatives serve.
The noble Lord, Lord Cockfield, made an interesting speech and my noble friend Lord Bruce will deal with that when he comes to wind up later this evening. I say this: the noble Lord, Lord Cockfield, painted a rosy picture of Britain in 1984. But the facts, my Lords, are quite the reverse; it is not a very rosy picture at all. He pointed to a rise in output, but the fact is that total output is still 10 per cent. below that of 1979. And industrial investment, although rising slightly, is nearly one-third below that in 1979, while we still have over 3 million unemployed. He boasted about the inflation rate of 5 per cent., but I would

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submit that it is very simple to have a low inflation rate when you have the lash of mass unemployment and steady or falling commodity prices abroad. But, as I have said, my noble friend Lord Bruce, who has proved to be a great sparring partner for the noble Lord, Lord Cockfield, will be dealing with other aspects of his speech later on this evening.
I would like now to come to the report of the Select Committee itself; that is the report on European Community Coal Policy. I would like to welcome the report because it has dealt with a difficult and complex problem in a clear-minded and sensitive manner. I am particularly pleased that the Select Committee recognised the need to handle any closure problem humanely and with proper regard for industrial relations and social consequences. That is not to say that we necessarily agree with any closure programme which goes beyond the need to close pits on grounds of exhaustion, and any programme of closures beyond that must take into account the very pertinent point made by the National Union of Mineworkers, that the total cost of closing mines other than on grounds of exhaustion could well cost the taxpayer more than if such pits were kept in production.
In this connection I would like to ask the noble Earl, Lord Avon, who will be speaking later, if he could give us some news about future pit expansion. As he will know, South Wales will be particularly hit by closures, but nevertheless there are good reserves of coal at Margam. I would like him in particular, if he can do so, to make some announcement about that during his winding-up speech tonight.
It is of course a cause for concern that stocks of coal are at record levels and it would clearly be beneficial if stocks could be lowered. However, that need not be achieved by reducing coal production. Indeed, from the long-term point of view that could be a disastrous course. There is a much better way, and that is by increasing demand for coal, both in the United Kingdom and in the EEC, by increasing industrial production and ensuring that coal-using industries in Britain are given a fair share of the European market. One could argue in general terms that the present Government's total economic policies have depressed demand at home for British goods, and have opened the floodgates to a tidal wave of imports which have hurt not only the coal industry but many other industries, particularly in manufacturing, forcing a record number into bankruptcy. But that ought to be the occasion for another and wide-ranging debate on the economy generally, and I hope that we shall have such a debate in the not too distant future.
I want therefore to concentrate on one industry whose fortunes over the last five years have directly affected the coal industry and the demand for coal. I refer to the steel industry, where crude capacity has fallen dramatically among EC steel producing countries, and Britain, I find, is alone in reducing capacity below what it was in 1973. For example, we find that in West Germany there has been a percentage change of plus 15 per cent., in Italy plus 41 per cent., in France plus 0·5 per cent., in Belgium plus 10 per cent.; and in the United Kingdom minus 16 per cent. That of course, has caused great difficulties for the coal industry. The Government in this country have
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accepted targets for cutting steel production and closing steel plants which other nations have not been prepared to accept.
Even when considering the financing of the coal industry in this country, the support given has to be brought into proper perspective. According to the Select Committee's report, the total subsidy per tonne paid in respect of British coal in 1982 was 5·76 ECUs. Yet in the Federal Republic of Germany it was 15·37 ECUs per tonne, in France 30·77 ECUs per tonne and in Belgium 31·68 ECUs per tonne. On that comparison British coal gets the least support, and yet it has the cheapest deep-mined coal produced in the EEC.
Table 5 of the Select Committee's report sets out the total grants to the NCB between 1974–75 and 1983–84. They set out a total of £2,643 million. Certainly that is a formidable sum, but again it has to be seen in perspective. For example, let us compare that sum with agricultural support. To be completely fair, I have extrapolated the figures for coal support between 1979–80 and 1983–84, the worst case figures as far as coal is concerned. I have done a similar exercise for agricultural support. The total support for coal, including social grants, was £2,142 million. For agriculture the total grants—that is, through CAP and national sources—over the same period amounted to £5,783 million, of which £2,125·4 million was paid by our own national Exchequer. In other words, from national sources alone financial support for coal and for agriculture are virtually the same.
In spite of that identity of support, the attitudes to both industries are completely different. In the case of coal, because stocks are high and demand low, there is pressure for closure and retrenchment, but in the case of agriculture, where stocks in intervention, particularly of grain and dairy products, are a positive embarrassment, and demand is low, production is allowed to go on unchecked and surpluses are sold at rockbottom prices on the world markets. I make this point not to attack the farming community but merely to show the difference in attitude towards the two industries, which is puzzling and potentially damaging to our future economic wellbeing. Mistakes made now about the coal industry could cost us dearly a decade hence and on a long-term basis, whereas the nature of agricultural production allows more flexibility in planning.
If it is desirable that the Community should be self-sufficient in food supplies, it is even more necessary that it should be as near as possible self-sufficient in coal supplies. That is why I am so concerned that the report seems to accept quite readily that the shortfall in coal supplies in the European Community should be met from outside the Community rather than by an expansion of coal production within the Community, particularly from British coalmines. That is an issue which must be further examined and provides an opportunity for Britain to obtain some recompense from the EC for our unfavourable treatment through the CAP.
I now turn to nuclear energy. First, I want to make the point that on the basis of demand there is no need to build any new power stations for some while yet. We have a surplus capacity in England and Wales of 30 per cent. and in the south of Scotland a surplus

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capacity of over 100 per cent. That is the present situation, before the AGRs at Heysham and Torness come on stream and certainly before Sizewell comes on stream. Therefore, I believe that it would be a mistake to proceed with the building of a PWR at Sizewell. It would be far better to re-plant the coal-fired stations as they come to the end of their useful lives, convert existing power stations and build new smaller power stations on the basis of CHP district heating. That would have many advantages. It would give a much better flexibility on the total electricity system and, what is more, it would be a much more efficient use of our coal and other energy resources throughout the country. I hope that very soon the noble Earl, Lord Avon, will be able to make an announcement about the first CHP scheme as recommended by Atkins.
That is not to say that we are against nuclear power, but it would be absurd to introduce the PWR at this or any stage, especially bearing in mind current experience in the United States. In my view, if a programme of nuclear power is necessary we should concentrate on the fast reactor programme. The noble Earl, Lord Lauderdale, raised that point; that this is perhaps the new form of nuclear energy that should be concentrated upon. It is likely that a competitive commercial fast reactor could go on stream by the turn of the century. We already have 20,000 tonnes of depleted uranium in stock, which is sufficient to meet electricity demand at current levels for 400 years—I repeat, 400 years. This will be added to over the next 30 years as further supplies of depleted uranium becomes available from the operation of existing fission power stations—namely, the Magnox and AGR stations. There would he the further benefit from this of ending our reliance on imported uranium supplies.
Therefore, the Government should take particular note of the report's conclusions; that there are good long-term prospects for the coal industry and that action should be taken to ensure that there is continued coal production in the EC to ensure security of supplies. They should also take note of the report's call for the capital reconstruction of the coal industry, particularly in respect of writing off the whole, or a substantial part, of the outstanding debt, which, as the report says, would help give the industry a new start and improve morale.
Finally, I hope that the Government will pay heed to the general ethos of the report, which is sympathetic to the mining industry, to those who work in it and to the communities who depend on coal mining for their survival. The report gives the Government an opportunity for a fresh start through a new tripartite partnership between the Government, the NCB, and the NUM and the other coal industry unions. If that opportunity is grasped, it could herald a new and prosperous era for the coal industry itself and the country as a whole.
4.45 p.m.
Lord Ezra: My Lords, in rising to speak in this important debate I should like to crave the indulgence of the House if I leave before it is terminated because some months ago I committed myself to going to Eastbourne to speak to a large gathering on the subject
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of industrial investment, which is not far removed from the present subject. Therefore, I shall journey to Eastbourne carrying the wisdom of this House on this subject.
I add my appreciation to that already expressed by noble Lords who have already spoken, to the noble Earl, Lord Lauderdale, and to the noble Lord, Lord Kearton, for introducing these two very important related subjects. They have raised one of the most fundamental issues which confront our society: the problem of restructuring, to put it in shorthand. We are facing perhaps one of the most serious and important choices that we have had for many decades: in which direction do we go economically and socially? To be quite fair and to take an objective view, as is the practice in this noble House, there are certain positive elements in the situation. We are coming out of the deep recession which set in during 1979. Inflation is much lower than it was.
On the other had, we are faced with two very serious longer term problems. There is the question of unemployment, the figures for which were announced to this House yesterday in answer to a Question—13.4 per cent.; and it does not show much sign of coming down. There is the related problem, to which many noble Lords referred; namely, the balance of payments, For the moment it is still showing a positive aspect, but it masks the serious problem of the deficit on our manufactured trade, which in 1983, on the figures so far published, exceeded £5 billion. If, with the projected peaking of North Sea oil in a couple of years and, therefore, the diminution of the revenues that we can earn from exporting that valuable commodity, we see a continuance or even an acceleration of that loss of earnings on manufactured exports, then we should be facing a very serious situation.
I mention these two problems because they relate hack to our attitude to manufacturing industry. That is the real issue. We are moving out of a manufacturing situation into what the noble Lord, Lord Cockfield, referred to as a "service situation." He gave a modern definition of what the service industries mean, and we are beholden to him for that. But, as the noble Lord, Lord Weinstock, made clear during the Committee stage of the Telecommunications Bill, services are, however one defines them, there to serve. There is an inter-relationship between the service industries and manufacturing industries, and there must he a right balance between the two. Some of us fear—I happen to be one—that we are perhaps moving away from the right balance and that we are allowing our manufacturing base to diminish more than it should. If we go on allowing it to diminish at this rate we shall still need the products of its activity, and if we cannot get them from home manufacturers we must get them from abroad. If we do that we will inevitably slide into a chronic balance of payments crisis—and from past experience we know what that means.
That therefore raises the question of our attitude to future manufacturing development and whether we should be so quick and ready as we have been in recent years to depart from established industries and move into new ones. Of course we must seize on the new opportunities. But have we done enough to consider how the existing established industries could be revitalised? Have we paid sufficient attention to the

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application of the great new technologies that we all talk about—in particular, in communications, control equipment, and so on—to the existing industries? That is one of the fundamental issues that we need to face.
In a few moments time I should like to mention how I believe we should be approaching the coal industry's problems, in the light of what was said in the report that we are debating. But before that, with your Lordships' agreement, I should like to say a few words about the electricity industry, in particular in regard to the remarks made by the noble Earl, Lord Lauderdale, and the noble Lord, Lord Stoddart of Swindon.
The noble Earl, Lord Lauderdale, told us that he considered that a large proportion of the electricity generating capacity in this country was outdated, and he implied that it should be replaced. I think I have represented him fairly. But the noble Lord, Lord Stoddart, made what I considered to be a most important point. It is a point that I personally have been making for some years; namely, that we should consider the question of refurbishment as well as that of outright replacement. What is tending to happen in the British electricity generating industry is that a number of small stations, necessarily less efficient than the very big new ones, are being replaced with these big new stations. The big new ones cost an enormous amount of money. They have to be located way out in the countryside, and they replace a very large number of small stations. No doubt in terms of generating efficiency they have the edge on the small stations. But if we were progressively to refurbish some of the smaller stations and in particular introduce combined heat and power generation, there could be substantial benefits.
Let us recall that the smaller stations are located quite near the centres of population, and therefore the cost of generating combined heat and power from them would be very much less than it would be for many of the bigger stations, if indeed that were ever feasible. So I believe that in the case of the electricity industry we ought to be very seriously considering making good use of the location of the smaller stations and carrying out what appears to be the declared policy of the Government in the recently enacted Energy Act to introduce combined heat and power generation. There could be no better place for the combined heat and power plants than at the smaller stations which are on the list for closure.
Turning to the coal industry, as someone who has worked in it for so many years I should first of all like to express my appreciation of the sympathetic way in which the noble Earl and the noble Lord who introduced today's Motions referred to it. Indeed, I should be surprised if reference to the coal industry during the rest of the debate is made in any other way. I believe that everyone recognises that the coal industry has had a great past, is assured of an important future, but has substantial problems. Having defined the coal industry in that way, I wonder whether the definition is not appropriate to the United Kingdom as a whole: a great past, present problems, and good prospects. That seems to me to be a sound basis from which to tackle the issue.
Without any doubt we have at present a surplus of coal production; nobody can deny that. The question is, what do we do about it? If we were to say merely
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that the size of the coal industry must be progressively reduced to fit into what the present situation of demand seems to represent, that could be a serious mistake. Having been in the industry for several decades, I have known situations change very rapidly. If there was one area in which I took issue to a certain degree with my eminent colleagues on the committee which produced the report before us, it was on the question of exports. I felt that the time could come when there would be a greater potential than some of them seemed to feel for exports of British coal. In this country we happen to be on top of one of the world's most important coal markets, and economic circumstances, as well as freight rates and exchange rates, change. I am very glad that in the report reference is made to the security element provided by the indigenous European coal-producing industry. It is a matter of nice judgment as to how much you should pay for security, how much you should pay for an insurance policy. But that you should have them there is no doubt, and I am glad that there is general agreement on that.
I am also pleased at the way in which the whole question of closures has been treated. After all, mining is an extractive industry. Once the product has been taken out of a particular hole in the ground, it is not there any more; that is a stark fact of life. But before it all disappears difficulties arise. That is where the argument comes in. I had many an argument with the unions over this. Each of us in his own way tries to do the best for the industry. However, obviously from the mining engineer's point of view, as soon as one started getting into difficulties which one considered were going to get worse one wanted to get out of that situation and into a better one. But, of course, with all their social connections of the mining village, and so on, the mineworkers were less prepared to accept that. We must realise that this is the way things are, and these matters must continue to be treated carefully, as they have been in the past and as I am convinced they will be in the future.
However, in my opinion there is no doubt that the future of the coal industry resides in progressively replacing capacity which is running out of steam (if I may put it that way) with capacity which will enable us to use to the full extent the great skills of the British mining industry. That is what we need to do. Therefore, I hope that when he replies to the debate the noble Earl, Lord Avon, will be able to give us an assurance that the present high level of investment in the mining industry will be continued, and that the determined efforts that we have shown over many recent years will be continued to make sure that the technology of the British mining industry will at least remain in line with the best anywhere else in the world, if not be better. Those are important matters.
We know that fossil fuels will remain a very important energy commodity for as far ahead as we can see, because renewable resources—nuclear energy and so on—cannot entirely replace fossil fuels in all their uses: in the chemical industry, the transport industry and the processing industries. We happen to be blessed with one of the most important and richest resources of fossil fuels in Western Europe, if not in the world, in relation to our size. Therefore, this is something to be developed for the future. We must not

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allow ourselves to be deflected from that long-term task by what appear to be the great difficulties of the present. They could change at almost any time.
I am very pleased that in the report reference is made to the Community's energy proposals and the proposals put forward by the commission for diverting some of the Community's resources to the coal industry. Regrettably, agreement has not yet been reached at the Council of Ministers. I should like to pay tribute to British Ministers who have attended those meetings. Having been involved at consultative level for many years, I know that they have fought strenuously and consistently—there is reference to this in the report—to make sure that we could get relatively more of the financial resources of the Community devoted to the development and the modernisation of the coal industry.
A great deal of the report that we are considering—and we are indebted to the skilful chairmanship of the noble Lord, Lord Kearton—is positive and requires pondering over, not least the proposition that the noble Lord indicated about the need for a degree of financial reconstruction in the mining industry. That need, to my mind, is justified because of the massive change that has had to be introduced in the industry over the past decade. There have been enormous social and technical problems to be overcome. The need now is to enable the industry to move forward from a new, more rational and acceptable base.
In conclusion, I should like to reiterate my belief that these two Motions have been of enormous importance and that they are very timely. I believe that we as a country have been through a prolonged period of industrial attenuation. We now need to move into a period of industrial revitalisation.
5.1 p.m.
The Duke of Portland: My Lords, I should like in the first place to comment on paragraphs 27 to 30 and paragraph 42 of the report. As was implicit in the evidence given by the Institute of Geological Sciences, reserves require to be defined by reference to the cost of extraction. We must therefore bear in mind that reserves which are likely to prove uneconomic owing to the high cost of extraction are in fact no reserves. Paragraphs 73 and 77 comment on the environmental impact of the increased use of coal, in particular acid rain. This has formed and continues to form the subject of numerous reports, the majority of which blame the emission of carbon or sulphur dioxide as the principal source of this evil.
When the committee's report was being drawn up, a long report on combating acid rain that was prepared last year by the European Parliament Committee on the Environment had not been received; nor had we heard of the two reports which had been supplied to the United States Government. Both reports establish a direct link between the quantity of flue gases emitted and the quantity of acid rain or deposited gases. I shall quote their general conclusion:
"Acid rain is a problem and a reduction of emissions is the solution. You cannot go on belching out tons of toxic substances and gases, some of which produce acids, year after year without consequences.".
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The United States Government appear reluctant to compel power stations to control their emissions before the presidential election as this would inevitably raise the cost of electricity. But the committee of the Royal Society which has also been examining this problem has come to the conclusion that there is an urgent need for further research into acid rain and is of the opinion that the case against coal is as yet unproven. I think that here I must declare to your Lordships an interest in that I have acted for a number of years as consultant to the Uranium Institute.
It seems to me that there is a practically worldwide tendency on the part of the media to magnify any incident connected with nuclear power and, at the same time, to give the impression that nuclear power is excessively dangerous and no more economic than coal. The relative costs of generating electricity in nuclear and coal-fired power stations has formed the subject of a report published last year by the Nuclear Energy Agency, which is part of the Organisation for Economic Co-operation and Development, OECD.
This report states that nuclear power has a very clear economic advantage over coal for baseload electricity generation except where cheap coal is readily available close to a load centre, as in parts of the United States and Canada. In Europe, Japan and central Canada, the economic advantage would still hold even with a 50 per cent. increase in the nuclear cycle costs or for the operation of a nuclear station at below a 50 per cent. load factor. The magnitude of the ratio of nuclear and coal-fuelled electricity costs is highly dependent on nuclear capital costs which are considerably influenced by construction lead times, by the ability to replicate design and to place several reactors on sites with common services. The availability of the plants is also a key factor. Overall, nuclear fuel price changes have a relatively small impact on comparative economics. In general, countries projected no significant real cost increases for nuclear fuel over the next 30 years.
I wish to give figures showing the advance of nuclear power in recent years. In the United States, in 1983, a record 300 billion kilowatt hours was generated by 80 reactors operating in the United States. In 1984, 14 new reactor plants will be ready to receive authority to operate and a further 10 in 1985, one of which will have been completed within six years. In France, in 1981, eight 900 megawatt pressurised water reactors were connected to the grid and 10 more were commissioned. After this, the new government froze all further nuclear construction for a year. Thereafter, they decided to resume work on the five sites that had been frozen. There are now a total of 32 stations in France that are either under construction or planned. Here, I should like to mention that at the time when the French decided on the pressurised water reactor, I happened to be a member of a Franco-Belgian fuel company board. I witnessed the extreme distaste with which the French went to Westinghouse for know-how and to take up their models. They saw clearly that it was what they considered the best buy. They were quite shrewd buyers.
In Germany, in July and August 1982, the first construction permits were issued since 1977 for three nuclear power stations and also for a nuclear enrichment plant and a dry radiated fuel store. The

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construction of all these has been proceeding according to plan. In Italy, sites are being designated for two pressurised water reactors. In Belgium, between June 1982 and March 1983, there was a prolonged parliamentary debate on how nuclear power should develop in Belgium. It concluded that nuclear power must remain a viable option for the energy supply of Belgium.
I turn to Spain. In 1982 and 1983 Spain pushed ahead with its national energy plan which now foresees a further 9,500 megawatts of electric power by 1987. As regards Sweden and Switzerland, 37 per cent. of Sweden's electric power is now nuclear, and in Switzerland, 28·6 per cent. Japan is steadily continuing an important nuclear programme. I mention the fact that a great majority of these reactors are pressurised water reactors.
Here, in the United Kingdom, no advance appears to be permitted pending completion of the Sizewell Inquiry. According to a press report that I have read, the inquiry will not be completed for a further 18 months. Any effort made for speeding up the programme after the completion of the inquiry gives rise to a parliamentary hue and cry. If in fact a further year and a half is to elapse, the United Kingdom will be trailing far behind all the other participants in the nuclear stakes.
5.11 p.m.
Lord Kaldor: My Lords, when I first read the Motion put forward by the noble Earl, Lord Lauderdale, I thought that it was thoroughly misguided. However, when I listened to the noble Earl today he did not seem to speak very much to his Motion and what he said, if I understood him correctly—and I am sorry that he is not in his place at the moment—concerned the replacement of obsolete plant in the electricity and various other industries, such as steel and shipbuilding, with new plant. He did not talk about the transfer of resources from the heavy industries to unspecified other industries where continuing employment opportunities are to be found. I was in danger of my prepared remarks being taken as "fighting windmills", meaning criticising views which nobody put forward. But, luckily, the noble Lord, Lord Cockfield, came to my rescue and said all the things which I am going to criticise and thereby he has justified the speech I am about to make.
"Resources" is a vague word, but what is meant by "resources" is labour, and nothing else. Clearly, one cannot make a disused coalmine or an obsolete steel plant into the plant and machinery required for a computer factory or a supermarket. The only thing one could transfer is labour. To suggest that we should transfer the labour means that the 3 million unemployed that we have at present must be left untouched and any increase in the demand for labour in one sector of the economy must be balanced by the release of labour in other sectors.
The noble Lord, Lord Cockfield, in his long list of praise for the achievements of the present Government, did not mention unemployment; neither did the noble Earl, Lord Lauderdale. However, I took the noble Earl's Motion (however wrongly) as a more
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modest version of the oft repeated claim which we constantly come across in the right wing press and, indeed from all kinds of sources, that Britain ought to abandon the idea of being a country that produces manufactured goods, of being a manufacturing country, because we are bad at it, and we ought to concentrate instead on services which we are comparatively good at. I submit that anyone who says that has not the foggiest notion of what he is talking about.
Let us turn to services. One of the services of which we are most proud in our great national heritage and which is of worldwide distinction, is the City. Indeed, in the Balance of Payments Year Book there is a special table entitled, "The earnings of the City". That table is artificially blown up because the investment income of insurance companies, investment trusts and unit trusts are all included as the earnings of the City, whereas in fact they are interest and dividends received from abroad—not payment for services currently provided. If I buy a share abroad, it comes under the heading, "interest received from abroad", but if I buy it through an investment trust then it increases the earnings of the City. However, if we strip the table of its bogus elements, we find that the net income from all the real activities of the City, which consist of commodity trading, brokerage of all kinds and banking services, comes to £1 billion and no more. If we add all the other services—and they are of the most varied kind, including construction services carried out abroad by British firms; consultancy fees; royalties of playwrights and authors, and many other things besides—they together add up to £2.5 billion, according to the Balance of Payments Year Book. Air and sea transport add another £½ billion. If we add it all together, it comes to something like £5 billion, which would pay for less than 10 per cent. of our annual import bill, with our manufacturing industries at their present size. However, it would become very much larger as our manufacturing industries are allowed to run down.
There is a type of service, in which it can be said that we lead the world—and that is higher education. Our universities—particularly Oxford and Cambridge, but by no means only Oxford and Cambridge—provide services to undergraduates which have no equivalent in any other country, no equivalent either in America or any country of continental Europe. Instead of promoting the export of such services, we impose prohibitive fees on foreign undergraduate students to come here and discourage in every possible way these services being a source of foreign earnings.
Another potentially important source of service employment is domestic service, which, as late as 1891, provided employment for 16½ per cent. of the total occupied population of the country, but which now provides practically nothing. If we could recreate the Dickensian distribution of income, there is a possibility of increased employment opportunities in that respect. I am sure that even Mrs. Thatcher has no clue about how to bring that about. The suggestion that we could or should live on services is just not on. There is no earthly possibility that we could live on services.
However, the Motion could also be taken to refer to new and promising industries of which, as I mentioned, there are a few. Unfortunately in all these

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industries we start at a considerable disadvantage because the Americans and the Japanese are miles ahead of us. It will take a long time to develop these industries to the point where they would be a considerable source of export earnings. Moreover, the Japanese and Americans make use of very cheap labour—a fact which is not always known—not in their own countries, but by sub-contracting the really labour-intensive parts of the production process (such as the intricate wiring involved in making a small computer or a small calculator) to countries of South-East Asia, such a Taiwan or Hong Kong, where labour is very cheap.
Here again, rightly or wrongly, we start with an innate disadvantage. It would take a very long time to bring British wages down to the level of those of South-East Asian countries, even if anyone would regard such a development as something to be promoted and not something to avoid. I am convinced that Britain, with its present population density and its present status as one of the leading powers of the world—for we are still one of the leading powers of the world if the super powers are excluded—cannot do without a large, balanced and comprehensive manufacturing industry, a vital part of which are the heavy industries producing capital goods. It is nonsensical to suggest that we are potentially at a natural disadvantage in producing steel, coal or engineering goods or that we produce useless energy products, presumably in the form of coal.
Why are we at a natural disadvantage in producing steel? We have any amount of coal and we can import iron-ore over short distances from Sweden or Norway. The Japanese increased their steel capacity from 5 million tonnes to 125 million tonnes during the post-war period (a period in which our steel capacity rose from 24 million tonnes to 29 million tonnes) importing both coal and iron ore from 10,000-mile distance. The Japanese do not say that they are naturally suited to produce steel and that we are not. We are in fact much better suited to produce steel than the Japanese. When I was in Japan and I asked the Japanese how on earth they managed to find markets for all this steel I invariably received the answer: "It is simple; we just took over all your markets which you were either unable or unwilling to supply" that is, the traditional markets of Britain in the Far East. There is no doubt that if we had expanded our steel industry after the war very much more than we did we could have found markets for it. For one thing we could have competed with the Japanese, whose annual exports of steel amount to 40 million tonnes, or three times our total capacity.
Then the noble Lord, Lord Cockfield, said that we must slim down our steel industry to what is profitable. It is a matter of economic policy what is profitable or what is not. Obviously, we must get rid of our obsolete steel plants and replace them with more modern plants. I do not know what the noble Lord, Lord Cockfield, was talking about when he said that during the period of nationalisation vast sums were wasted and sunk into the steel industry. The fact remains that there was talk of producing one really up-to-date, integrated steel plant of 6 million tonnes capacity, but that plan never materialised because at that time it
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would have cost £4 billion. That was many years ago. Now, of course, it would cost much more.
We never invested the sums required to keep our capital goods sector in line with that of other countries, for example, the Germans, let alone the Japanese. Since the beginning of the last war the Germans have increased their steel capacity from just over 20 million tonnes to well over 50 million tonnes. Of all the countries in Europe, ours more than others was possibly the one which held down the expansion of the steel industry.
The same applies to shipbuilding. As recently as the early 1930s we produced all but 3 per cent. of the world's tonnage. Now we produce only a small proportion of the annual addition to the world's tonnage. There is nothing in shipbuilding as such which makes Britain a more unsuitable country to produce ships than other countries.
The steel and engineering industries are absolutely basic because they provide the means for enlarging their own capacity and they also prove the means of enlarging capacity of all other industries. Countries which possess only light industries and import capital goods from other countries—which is what the noble Earl's original Motion suggested—are in a natural position of inferiority, as they are likely to need capital goods in times of boom just when eveybody else needs them and when they can only be had at a high price and with long delivery delays.
There is another reason why heavy industries are so important, and I am surprised that no one on either side of the House has mentioned it. They are absolutely vital for national defence. When it is a question of making ships, aircraft, guns or tanks it is the heavy industries—the steel and engineering industries—which provide the goods. Without them we could not carry on a war, except perhaps a brief nuclear exchange which would put an end to everything.
Of course, after 10 years of worldwide stagnation there is a large over-capacity in steel. Of course, our costs of production are comparatively high because we allowed the exchange rate to go up too much and because our techniques are obsolete and our productivity is comparatively low. But so far from this being a justification for further liquidation, we ought to use the unique opportunity provided by North Sea oil to invest large sums of money in creating a modern industry with the latest techniques. That is what we have singularly failed to do. In the last four years we have accumulated savings due to North Sea oil in the form of an unrequited surplus in the current account of the balance of payments, totalling £17 billion. If that £17 billion had been invested in Britain, it would have doubled the gross investment in manufacturing industry and would have largely modernised our manufacturing industry. As it is, the present Government allowed it all to be wasted in the purchase of portfolio investment abroad, which may provide some additional income to a narrow group of the community—the shareholders—but it does not do the slightest bit of good to the British economy.
We could still invest. Also, in all these comparisons, which the noble Lord, Lord Cockfield, is so carefully making, and he has done it today at greater length than

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before, of how much better we do than our partners in Europe—3 per cent. last year and 2 per cent. the year before—we are so much ahead of the record of Germany and continental countries. However, in other countries production has never fallen absolutely, whereas in our case industrial production is 20 per cent. down from what it was 10 years ago. In all the other countries it is higher than it was 10 years ago.
Secondly, the noble Lord completely forgot the modest little fact that we are selling oil and they are buying it. Because of the need to buy oil at very high prices there is an absolute bar on the expansion of employment and production in countries like Germany and France. There is no such bar here: only the Government's obsolete and ludicrous ideology which regards any kind of reflation as creating an unsound development—and that is combined with an attitude of indifference, if not of callousness, about mass unemployment which I find the most distressing feature of the present British scene.
Enforced idleness is very demoralising, not only for those made redundant in the middle of their working lives, but also for the young people leaving school who lose all ambition for further learning or for the further acquisition of skills when they see that their extra effort does not improve their employment prospects. This indifference to mass unemployment is something new. It is by no means the traditional attitude of the Conservative Party; it is not the attitude of people like Joseph Chamberlain, Churchill or Macmillan, to mention only a few.
If noble Lords will permit me, I would like to quote a few lines from something which Winston Churchill wrote, with which not many are familiar because it was an internal Treasury memorandum only released to the public when these files were transferred to the Public Record Office a few years ago. This originates from 1925, from the discussions on whether we should return to the gold standard:
"The Governor"—
he was referring to Montagu Norman—
"shows himself perfectly happy in the spectacle of Britain possessing the finest credit in the world simultaneously with a million and a quarter unemployed. This is the only country in the world where this condition exists. The Treasury and the Bank of England policy has been the only policy consistently pursued. It was a terrible responsibility for those who shaped it unless they can be sure that there is no connection between the unique British phenomenon of chronic unemployment and a long resolute consistency of a particular financial policy. It may be that you will argue that unemployment would have been much greater but for the financial policy pursued: that there is no sufficient demand for commodities either internally or externally to require the services of this million and a quarter people: that there is nothing for them but to hang like a millstone round the neck of industry and on the public revenue until they are permanently demoralised. You may be right, but if so it is one of the most sombre conclusions ever reached".
The only difference is that for "Montague Norman" read "Margaret Thatcher" and for "a million and a quarter unemployed" read "3 million and a quarter unemployed".
My Lords, those of us who were strongly against Britain's entry into the Common Market were so because we feared that as a result employment opportunities in Britain might be greatly reduced, and
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that by joining the Community we would deprive ourselves of the freedom to pursue full employment policies in Britain. While we remain in the Community our capacity to provide work for the people of these islands is likely to become progressively smaller, until we end up as an unimportant offshore island with an increasing part of our workforce finding employment in other countries. The best way of promoting such developments is to start by abandoning our so-called "heavy industries".
5.35 p.m.
Lord McAlpine of Moffat: My Lords, in giving my wholehearted support to the policies and thoughts of the noble Lord, Lord Cockfield, it is only fair to inform the House that we must realise that he does not have these imaginative ideas for the fun of it, but because he is forced to do it. We do not just own this world, we have to fit in with it as it is there, and I think the noble Lord is making a splendid effort at doing so. It is not going to be easy and it is up to everyone in this country to struggle to help him.
My Lords, if we are going to look forward it is no had thing to study history. I was particularly shaken the other morning, when I was coming up in my car and listening to the radio, to hear a lady talking about how astonished she was with regard to her daughter setting up a new home. She had splendid scissors for the kitchen made in England by Wilkinson Sword; she had a Singer sewing machine manufactured in Taiwan. My goodness! that went right to my heart, because 100 years ago the Americans came to England, to Clydebank, to build a factory, and my family were the fortunate contractors. We continued to be fortunate contractors, building and building and building until World War II.
Many years later I asked my father about this. We do not hold it against Singer but I think they were the midwife, as it were, who created McAlpine's Construction company. They were always developing and they were ahead of everybody and everything. They had inventions. They did not use the new patents until someone else was near them. I asked my father why they were like that. I asked him why they came to Clydebank. He said it was because they had done worldwide research and they could manufacture, in Clydebank, next to John Brown's who were building great big transatlantic ships, cheaper than anywhere else in Europe. That went on until the terror started to come in the late 1920s, and then they went to Italy and France and built factories there.
When I went back to them in the 1950s there was a different atmosphere. There was not the enthusiasm or the labour relations of former days. There was not the understanding or the creativity. The place was full of shop stewards arguing how they could get the better of the new management, which was made up mostly of lawyers and accountants. In the imagination of the noble Lord, Lord Cockfield, we have to have the right people doing the right thing in the right way. That is history. I think we were right.
Now we come to the nuclear world. Here I must declare an interest because I was deputy chairman and then chairman of one of the first groups over 30 years ago—and I am still involved in BNA. My family firm are still designing and building nuclear power stations.

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It was music to my ears to hear the noble Lord, Lord Kearton, say that Torness and Heysham were in budget and up to time. He is right. I was going to say it but it is much nicer to hear it said by the noble Lord.
We have done a wonderful job in this country with our British gas-cooled reactors. One of the things I learned through working with these people is that I cannot argue technically with them because I have never believed in keeping a dog and harking myself. I have been lucky to have good barking dogs which barked in the right direction and guided me in the right decision. At the moment the Government have naughty dogs leading them in the wrong direction. Personally, I regard the Sizewell Inquiry as a tragic charade. It is so pathetic. The noble Earl, Lord Avon, will not be expected to answer this, hut I would ask that he look into this matter and get more information, because by the time the design for Sizewell is approved and that station is built, it will be out of date; so we can forget any possibility of marketing it abroad. Whereas people who are taking a slight interest in AGRs and particularly smaller stations, may well come to us, and we may well have an export.
Another thing that shocked me is this, I understand that some ill-advised witness at the inquiry said that the PWR had to be designed by Government servants and not private enterprise. Is that not perhaps nationalisation by stealth? I do not know. It rather shocked me. It seemed to me that it would put the private designers out of business.
When I made my maiden speech two years ago I boasted about the fantastic invisible export that this country had through its wonderful consulting engineers. We led the world with our electrical engineers. The CEGB has made enormous commitments before this inquiry has finished. They have employed American consultants. They have placed orders. If we build British AGRs it will all be British material. If we have PWR then we will have a lot of foreign material.
I do not want to go on the long way. I would beg that this Sizewell Inquiry be stopped, and that we wait to see whether Torness and Heysham are as successful as we hope they will be, and then repeat them and be British. I do not want to take too long, and perhaps your Lordships will forgive me if I am philosophical. I believe that all progress is circular, and it is up to mankind to decide whether it is going to be a corkscrew into the ground, or whether it is going to be a spiral staircase taking us up to heaven. We have a choice with our reactors. Let us have an AGR and go up to heaven.
5.41 p.m.
The Earl of Halsbury: My Lords, in thanking the noble Earl, Lord Lauderdale, and my noble friend Lord Kearton for introducing this subject this evening in their joint Motion, I see nothing to disagree with in all the distinguished speakers who have preceded me, and therefore see little point in repeating what they have said. Instead I should like to turn to some of the priorities involved in this, because these are really the practical working points that we have to consider. Priorities of course are priorities in time. It is a question of what you feel you must do today as opposed to what you can put off until tomorrow.
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Talking of tomorrow, may I invite your Lordships to excise from your minds that fossilised phrase "the year 2000"? It is only 16 years away. Anything you propose to do in the year 2000 would have a ten-year lead time. It is only concerned with the decisions you will be taking in the next six years. We must learn to think of a 25-years' roll forward as opposed to a fossilised formula like the year 2000. When talking of time, one must have a beginning. In historical processes it is often difficult to find a beginning, but with the Industrial Revolution I think one can find a point in time at which it began. That was the building of the first coke-fired blast-furnace by Abraham Darby in Coalbrookdale, which took place in the middle of the 18th century, 200 years ago.
When we talk about 400 years' coal reserves, or 400 years' reserves of depleted uranium, we are thinking of something that stretches twice as far into the future as the beginnings of the Industrial Revolution stretch backwards. It is possible to launch oneself into time-wasting controversies as to whether the figure is right. It is possible for the geological survey to take a different view of what is first of all accessible and then recoverable of our coal reserves, and to get into controversy with, say, the National Coal Board. But I do not care whether the figure is right or wrong. It may be 300, 400 or 500 years, but the problem that that involves will be solved by my great, great, great, great grandchildren 200 years from now, and I shall leave it to them and not get into an anxiety state about it.
The same to some extent applies to projects for making SNG—that is, substitute natural gas—and the oilification of coal, which again cannot be made economic in this day and age because all of them require one to put more calories in as coal than you will ever get out as oil. Assuming any sort of parity for a calorie derived from oil and one derived from coal, they can never be made to work economically at the present point in time. But the supplies of oil will last for so much shorter a period than the supplies of coal that we ought to be studying it.
There is a case for making pilot plants and learning how to train the engineering industry to build them. Possibly a lot more oil is going to be discovered than we now know about. People are making the same sort of exciting noises about what is in the China Sea as they did about what was in the North Sea 20 years ago. In that case, the horizon for oil depletion will go forward and the building of pilot plants will, to that extent, become less urgent.
I thought that the remarks of the noble Lord, Lord Stoddart of Swindon—and I am sorry he is not in his place—were a trifle one-dimensional in the sense of what we ought to he building or constructing here and now. You have to have a minimum constructional programme on a roll forward basis to keep the engineering industry in being. If it takes 10 years to build a nuclear power station, then you ought to order one about once per decade. If you do not do that then the engineering team will he dispersed, and, once dispersed, will be difficult to get together again, because the different layers of experience and lore—and I spell "l-o-r-e" and not "l-a-w"—involved in a team of all ages representing the complete spectrum from apprentices to managing directors on

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the retiring list is not something you can assemble from scratch. It is something that grows up on the spot.
It may well be that the economy of this country could not tolerate building one nuclear power station per decade. In that case we have too many nuclear power syndicates in Europe. We ought to remember that we are members of the European Economic Community and set up, let us say, two competitive international syndicates to design and supervise the construction, with contracts placed with local industries, of nuclear power stations all over Europe. That is the way to approach it, rather than saying "Let us abandon the whole thing".
I turn now to some of the remarks of the noble Lord, Lord Cockfield, with which I was in profound agreement. There is a time factor—I keep on about time factors—in all our lives; it is the limit of our careers. It may he 50 years, which means a 2 per cent. retirement rate per year; it may be 40 years for professional people, which means a 2½ per cent. retirement rate per year. But, by the time you have mixed all classes and allowed for wastage, premature death, retirement, and so on, you have a retiral rate of something like 3 per cent per annum.
In one decade you could redeploy 30 per cent. of your labour force if you knew how to do it. A 30 per cent. redeployment of a labour force would be a significant contribution to the problem that the noble Earl raised of how we are to redeploy from some of our industries which are no longer in balance with our requirements. During the decade of the 1960s we redeployed across the economy about 12½ per cent. of the labour force from productive industry to the service industries, and at the same time kept the productivity of industry advancing so that the standard of living was higher, and gross national product per head higher, at the end of the decade than it was at the beginning. We did it during the 1960s so it can be done. We stopped doing it in the 1970s largely because of inflation, and we have to learn how to get back and do it again. Perhaps it may fall to me to make a quotation from Winston Churchill addressing some of his assistants, when he said, "The difficulties speak for themselves. Tell me how it may be done."
There is one matter I have come across recently which is not referred to in the report but which is important and should receive more study and detailed understanding. There ought to be a sort of notional international price for a calorie as a calorie. Think of a flight of stairs, and the notional international price is around, say, waist level. Above that would be motor spirit. Calories, yes, but calories coupled to mobility. More than just calories, more than bare calories, calories coupled to mobility. Not the kind of mobility in a railway engine that can be fired with coal, but the kind of mobility you can have in a run-about car. Then, also at a premium, a little further up the staircase, there would be petrochemical feedstocks which are used for entirely different purposes, not because of their calorie content but because we can turn them into nylon, polyvinyl chloride, and so on.
Then, below waist level, somewhere around the bottom of the staircase, there would be calories at a
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discount. Calories that are difficult to get at which would not command the price of the readily handleable oil that is so easily pumpable from one place to another. Calories in coal which you have to get from, first of all, surface outcrops and, then, deep mining.
This ought to make a rational price structure; a transparent price structure. But it does not. It does not make a transparent price structure because of continual interference with economic prices by domestic rules and regulations of different countries. It goes not make a rational structure because this waist-high level I have been postulating I have been told by witness after witness does not exist. The basic price of a calorie as coal and the basic price of a calorie as oil are uncoupled. I do not see under those conditions how one can have a rational international structure for prices. This is a real problem deserving of more attention than it is getting. I shall pursue my inquiries and perhaps in a later debate I shall be able to report to your Lordships.
5.51 p.m.
Viscount Torrington: My Lords, I too should like to pay tribute to the way in which the noble Lord, Lord Kearton, introduced the coal report and thank my noble friend Lord Lauderdale, for giving us the chance to broaden the debate. Without this there would be little else to do but to reiterate the conclusions of the report which are eminently self-obvious.
In approaching today's debate, I tried to consider energy in an historical context. The earliest references I could find to oil involved virgins' lamps, so I thought that was perhaps unsuitable to follow. It seems odd to me that we talk about coal as an old, mature industry and we look towards potentially new sources such as wind and solar power. But the wind has been blowing for a long time and carried the Union Jack to the far corners of the earth before the first coal-fired steamship ever made way. I was interested to read recently that a British firm is to launch a new commercial sailing vessel. What I fear is that our competitors will be looking at this like so many British inventions or British developments and improving on it when we have been through the learning process.
With apologies to David Attenborough, solar energy is the very source of life on earth and the earliest attempts to capitalise on solar energy were the humble greenhouse, in which one can grow things which are not intended to grow in the British climate and to grow them cost-effectively—or we could until the Dutch started cheating with cut-price natural gas. For example, we could have a strategic core of industry in banana growing in this country under glass. No doubt it would provide some employment and protect us against unreasonable behaviour by the Organisation of Banana-Exporting Countries, but I doubt that the economic environment or the climate would permit that.
The economic climate has been changing for the coal industry. We undoubtedly can, do and will continue to have an economically viable strategic core coal industry. Unfortunately, this industry is weighed down with a tale of mines that lose money, some of which are wholly uneconomic. I should like to draw an

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analogy with the rest of the mining industry, so I hope your Lordships will forgive me if I flip between the words "seams" and "lodes" or "ore". In any given mining enterprise there will be particularly profitable ores. Elsewhere within the same mine there will be less valuable ores. It is simple, sensible practice to blend the best with the worst, or with lower grades, within a single mine to produce a grade which allows for the maximum amount of ore to be extracted consistent with producing it at a rate of profitability which allows a reasonable return of capital.
One can apply the same thing to a group of mines like the National Coal Board. One can have an element of sensible cross-subsidisation. The most profitable mines should he used or can be used to subsidise the gentle loss-makers. One can take the loss-makers in turn until the return on capital is lowered to a minimum acceptable level. In the case of a group of mines, any single mine (as with any ore in the case of one mine) which loses more than that and which has higher unit costs is not really a mine but a hole in the ground with a social problem. We have to recognise this. When we talk about shifting of financial resources to the coal industry we should be honest about the headings under which we are applying those resources. Undoubtedly there is an appalling social problem in the older coal-mining areas which must be solved, but let us recognise it as such and not cloak it in spurious debate about what constitutes an exhausted mine.
Before I move away from coal I have one other reservation about the report. I am somewhat worried about the application of resources and financial incentives to the greater use of coal throughout industry. Like my noble friend the Duke of Portland, I am worried about acid rain. I am a little younger than the noble Duke, but I remember the blackened streets of postwar London and pea-soup fogs. Thank heavens we have been enlightened enough to bring in smokeless zone rules to obviate those problems. But we do not understand the implications of acid rain in full and we do not really understand how fast we are generating the pollutants which give rise to it. We should be a little careful about any attempt massively to increase coal production.
The new industries such as wind and solar power always seem to me to remain tantalisingly in the future. They are never quite economic. As the cost of electricity rises so do the costs of trying to create these sources. Oil and gas are here today, but will run down and will have to be increasingly reserved for the non-fuel uses. It is an inescapable conclusion that the energy supplies of the future will have to rely heavily on nuclear energy. I am not technically minded about AGRs versus PWRs, but like most members of the public I have read of the Three Mile Island problem. I have a suspicion that it is the public perception of dangers which is liable to turn the Sizewell inquiry into a rival to "The Mousetrap". But it seems desperately important to me that we apply resources not just to the debate over which is best, the PWR or the AGR, but to solving the problems that are perceived by the public, and demonstrably to solving them, by educating the public.
The noble Lord, Lord Rothschild, gave an interesting talk a few years ago on the television—I wish I could remember the exact statistics—but he said
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that living next door to a nuclear power station was considerably less dangerous than walking in Hyde Park.
I have just one simple thought that the answer may be to take the nuclear power stations of the future away from the people. We have a major problem in considering the idea of burying nuclear waste. I wonder whether we should not bury the nuclear power stations—and what better location, perhaps, than the bottom of the coal mines we must close in the future?
6 p.m.
Lord Dean of Beswick: My Lords, may I commence, as have other noble Lords, by paying tribute to the noble Earl, Lord Lauderdale, and the noble Lord, Lord Kearton, for the way in which they introduced the subject under discussion and for the facts that they were able to disclose during their speeches, which I am sure are of tremendous assistance to other noble Lords in debating this subject. I do not want to dwell too much on the coal industry because I think that that has been adequately covered by such previous speakers as the noble Lord, Lord Ezra, with his expertise, which certainly I could not match. I found the comments of the noble Earl, Lord Lauderdale, on the electricity supply industry very illuminating, having worked in that industry myself for nearly 20 years.
Some 10 to 15 years ago, the same arguments were taking place in this country on the question of electricity supplies as are taking place now as to what should be the future policy. I do not know whether it was the noble Earl, Lord Lauderdale, or the noble Lord, Lord Kearton, who made the point that the French were almost at the point of being ready to move into the export market on the exportation of nuclear power for peaceful purposes. I have some little reservation about our holding our horses for too long on that issue and of our opting out. I am fully aware that it would be nonsense not to have coal as our overwhelming basic for the supply of energy to our power stations; but there is now a selling technique abroad where, if you want to get into this commodity export market, a market of millions, and sometimes billions, of pounds, you do not sell them by means of exhibiting drawings on paper or plans but you let the would-be buyer see one working. I think that the case is overwhelming for our not opting out now of an export programme, funded perhaps in some respects by the Government, to assist us in keeping the door open for our exports in the future.
Let me make it clear that I do not think that there is an export market for coal-fired power stations. They are of domestic benefit to us, but, on selling abroad. I say, "No!" I think that that was the position 10 to 15 years ago, and it has not altered. There was an on-going debate at that time as to whether Drax B ought to have been built or whether there ought to have been a showpiece nuclear power station built that was marketable abroad.
One of the points that interesed me was when both the noble Earl, Lord Lauderdale, and the noble Lord, Lord Kearton, referred to the question of the ageing power stations. I had been lobbied in another place quite a few years ago—and I supported the views of the people who were lobbying us—to the effect that at that

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time the CEGB ought to have been undertaking a massive refurbishing programme of its old power stations, the present ageing power stations. I am not talking about those that were completely uneconomical—most of which were small ones of 60 megawatts, built just after the war to a standard plan. But, especially in the 1950s, there were a large number of power stations some of which in my opinion, could have been rescued by major refurbishing, whereas now they are perhaps due only for demolition.
I noted the point made by the noble Lord, Lord Ezra, on the matter of district heating and relating it to some of these power stations. There is no question at all that that is a subject worth looking at. When we talk of the reduction in manufacturing output and the manufacturing labour force of this country, there is no question that, had the CEGB been allowed (and I do not think they were allowed to do so at the time because successive Governments placed monetary limits on what they could spend) to indulge in a refurbishing programme of their existing power stations, it would have been very intensive in job creation or maintaining the industry that then existed. That industry has been hit more alarmingly than any other. The factory where I worked 20 years ago employed 24,000 people, mostly on the manufacturing end of power stations. They are moving up in size now with larger power stations, larger turbines et cetera. But there are less than 8,000 people in that factory now.
That is a situation multiplied throughout the whole of the manufacturing industry which used to manufacture or help to manufacture or build power stations. If there is a possibility—and I am not technically equipped to say whether there is so or not—that a lot of the existing power stations can he made serviceable with a reasonable expectancy of life and can be made economically viable by a refurbishing programme, I would suggest that we ought to be getting on with it. I have to take to task a little the noble Lord, Lord Cock field, for his remarks. I think he was a little unfair. I think people could have drawn the conclusion when he talked about the tens of thousands and hundreds of thousands of jobs that had been lost in the manufacturing industry, that it was all the fault of the workers for their asking for too much money; and it was all the fault of the workers' trade unions. I do not think that he dare go to West Yorkshire and East Lancashire and tell the textile workers there that it was their high wages that put them out of business. I do not think that he dare tell that to the workers in the general engineering industry—which over the last 20 years has lost more jobs than steel, coal and a host of other industries together. I do not think he dare tell those men in those industries that they were overpaid. The fact is that some of the most skilled artisan engineers in this country, such as tool makers, were among the lowest paid. One of the myths of engineering workers here is that historically they all had high wages.
Let me say clearly now that that strictly is a fallacy, a fallacy to be attributed to the car industry where and when they were on high wages. The significance of their high wages in the car industry was that the wages were those of the semi-skilled people and not the
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skilled engineers. As an ex-engineer off the shopfloor, I completely refute that I ever was able to extract from my employer high wages. I was a skilled engineer who worked at Thorpe Marsh and Egborough, at some of the big power stations. I never had the benefit of high wages. I think that it was a little bit unfair to talk in those terms about that.
One of the things that I think we shall have to look at is the balance between manufacturing industry and the public sector service industry. Speakers have made reference to that and said that there will have to be an increase in the numbers of jobs found in the public service sector. That is undeniable; but what is even more undeniable is that if we do not refurbish our industrial bases and get back to the point where they are in credit as a manufacturing industry, we shall not be able to expand the service industries either. My own party and the TUC made a declaration some time ago that the absolute priority in any investment programme of Government money would be to improve, refurbish or encourage those emerging industries which had a future in order to restore our position as a manufacturing country. I think that it is sad to say that the Government at present show no sign of taking heed of these arguments.
On Wednesday last, there was a debate in the other place on a similar subject to this. It was about future industry—about industries of the future, industries of excellence, that type of thing, industries that were going to be money spinners. We have been talking about energy, without which no industry can run. But patterns are changing in all industries as to components and eventually as to how you produce the goods that you want. One thing which has emerged over the past few years is the rapid approach of the silicon chip industry and techniques, with all that that implies. This country has been pretty successful in some of the moves it has made.
An organisation was set up in 1978, as probably most of your Lordships know, which is known as Inmos. These are the present facts. It is 75 per cent. owned by the Government through the British Technology Group. In the past six years the Government have invested about £110 million in research and development in Inmos and have given £30 million to £40 million loan guarantees. The rest of the shares are owned by the founders and employees, 750 of whom are in Britain, with nearly 800 in the United States. Last year Inmos lost £15 million on a turnover of £30 million, but there are predictions of profit in the near future. Part of the reason for this is that the firm recently unveiled a so-called transputer, a 32-bit microprocessor named T424. There was a Guardian article on 2nd November last and an item in the New Scientist on 10th November which analysed the significance of this device.
One other reason for the expected profit is the huge market for microprocessors and memory chips in this country. A Guardian article on 13th February said that Britain urgently needs 30 per cent. more chips than it can buy and it blames the fact that Inmos cannot fill this gap on the Government, who delayed development funds for Inmos. Several articles have appeared in the press, hinting that the Government may well sell Inmos off to AT & T, an American company, or to Western Electric of America or to

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Britain's GEC. Inmos is known to be short of cash since the last Government injection of £ 15 million in spring 1983. They are now seeking another £15 million.
I would put it to the noble Lord that for that industry, which is emerging now and can take us into the future—almost a guaranteed winner—to be "flogged off", just for a political ideology, to an American company is an absolute, complete and utter nonsense. It is almost like selling your coalmines and the whole of your basic steel; in fact. I think we would be selling at a knock-down price our best seed corn for the future. I think it would be completely rejected and resented by most of the people in this country. For an industry like that—which was originally sponsored publicly, having got through its teething troubles and starting to emerge as a best seller, creating jobs for our youngsters who are now on the dole, refurbishing our industry—to go abroad would be an appalling blunder and not accepted lightly by the people of this country. I would hope that the Minister in his reply may be a bit more positive in saying what are the Government's intentions about Inmos than was the Secretary of State in another place.
6.14 p.m.
Viscount Hood: My Lords, may I add my thanks to my noble friend Lord Lauderdale for initiating this wide-ranging debate on industry, with a particular application to energy. I also listened with great interest to the noble Lord, Lord Kearton; I have had the pleasure of sitting on his committee when preparing the report on the European Community Coal Policy.
In order to improve opportunities in industry and to provide more jobs and greater profitability, it is essential that industry should be competitive. And for industry to be competitive, it is essential that its costs should be competitive. Energy is a cost, to a greater or lesser extent, in every product manufactured in this country. It is unfortunately true that our energy costs are not competitive.
I think that the blame does not lie with petroleum. Crude oil prices are kept strictly in line with the world markets, high as they may be; and that is after providing a very large tax revenue for the Government. The retail prices, likewise, are competitive. Indeed, I know of no more competitive business than petrol at the petrol pumps and fuel oil for housing.
The problem, as has been said by many speakers during this debate, lies with electricity, where the prices are clearly not competitive. The noble Earl, Lord Lauderdale, said that electricity prices in France are 30 per cent. below ours. That may be an exaggeration, but certainly it is true that prices are lower on the Continent and also elsewhere in the world.
The problem, primarily, is one of the price of coal. Three-quarters of the coal consumed in this country is for power generation and 80 per cent. of electricity is generated from coal stations. There are problems of both pricing and of price. Prices are averaged countrywide. It is an extraordinary thing to me that it is not possible to build a modern coal station on an efficient coalmine and pass on the correspondingly low electricity price to industry. That is done elsewhere, of course—notably in the United States.
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The prices are about £40 a tonne as compared with world prices of about £30 but, even so, we are faced with a subsidy which in the current year, for social needs and trading losses, will be of the order of £540 million. If £10 of the higher price is related to production, one reaches a very large figure of well over £1 billion. These are strains on the country and, still more, strains on industry.
The noble Earl, Lord Lauderdale, has mentioned the problem of the losing mines and the figures are so striking that I should like to state them also, in a different way. If the surplus coal production, the difference between coal produced and coal currently consumed, could he removed by closing the worst losers, it would save something of the order of £350 million or £400 million of trading losses. If all the losers were closed, those figures would probably be doubled.
The social problems we all recognise. It is an unfortunate fact that the losers, if I may use that term, are in difficult areas of unemployment and social distress. The main area, of course, is South Wales, where a large number of mines are losing great sums of money even though they represent only 25 per cent. of the mines that were in production in the 1960s. I believe it to be true that no mine in the Scottish area is making a trading profit. This is a problem for the coal board but it is also a national problem, and it is to be hoped that this will be tackled with great activity by the Government and by the coal board.
There is a sentence in the report which I feel expresses the problem as well as it can be done. It states:
"There must be better ways of spending money than paying out large sums over and above their wages to keep men working underground to mine coal which cannot be sold."
The problem of coal here carries across the Channel. There is only one member of the Community who is still depending on coal in a major way and that is West Germany. The other countries have, to a large extent, dealt with the problem of high-priced coal and I believe that there is not the slightest chance of their coming over here to buy high-priced coal or providing help to us by subsidising our high-cost coalmines. As the head of the Italian CEGB—or whatever it is called—said, the European coal lies in Colorado.
On the nuclear matter, I am no expert in the different forms of power, but I am struck by the percentages and 80 per cent. is a large dependence on coal. I do not doubt that it will be a high percentage for the foreseeable future, but I should have thought that a higher percentage of nuclear was desirable. It is extremely difficult to get an accurate comparison for the future generation of electricity, by coal or by nuclear stations. In the case of nuclear, there is an enormous capital expenditure at the beginning and very low operating costs thereafter. A coal station is much cheaper to build: but, inevitably, it is not possible to predict what the operation costs will be in 10 years' time. However, be that as it may, I should have thought that the Government would be wise to support the CEGB in a nuclear programme, and I hope that support will not be deterred by the emotions which one can see here and still more in other countries.

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To conclude, if British industry is to flourish it is necessary that its energy should be competitive. To this end, it is essential that obsolete coalmines should be closed, with firmness combined with humanity, and that the country's nuclear policy should be based on reality and not on emotion.
6.23 p.m.
Lord Bowden: My Lords, so much has already been said this evening that I do not know how best to make my own contribution. I should like to begin by thanking the noble Earl, Lord Lauderdale, and the noble Lord, Lord Kearton, who spoke so very clearly and went into such detail, but I want to make one point which may help. I should like to link this debate with a debate that we held in this House about a month ago on the subject of the infrastructure of the community. We realised then that the neglect of the infrastructure was causing devastation in many parts of England. We talked about the collapse of the sewers in Manchester, we talked about the risk that the sewers of Islington may fall in and we talked about the neglect of some of the secondary road surfaces. We realised that this might have an absolutely devastating effect on the whole of our civilised living.
But if ever there was a part of the infrastructure which we ought to consider, it is the primary industries of coal and steel. We cannot assess the problem without realising that this must be our primary concern. I was therefore almost devastated when I read this document for the first time and realised that, in a sense, it was an attempt to make the proces of change respectable. It was almost an apology for the whole process of closing down some of our main industries, which have such an enormously important part to play as an aspect of the infrastructure.
I felt this to be the case particularly because, some long time ago when we were trying to become a member of the Common Market, I happened to be in France. M. Pompidou was lecturing French farmers about the circumstances which would make it reasonable for them, in the referendum which they were about to hold, to vote for the admission of this country to the Common Market. He said, quite clearly and distinctly, "As far as I am concerned, the primary purpose of the Common Market is to maintain the way of life of French farmers".
I thought to myself that that was quite splendid and I presumed that, in due course, we would announce that it was our primary intention to maintain the way of life of manufacturing industry in this country. But not at all. We, too, have been devoting ourselves primarily to the maintenance of the way of life of French farmers. As a result of this, last year they spent something like 30 times as much on the basic problems of the Common Market, and in the support of French farmers in particular, as they did on research into all forms of energy and all the problems with which we have been concerned tonight. This is the beginning and end of much of our problem.
The countries of Europe ought to be sharing with us in solving the basic problems of the steel industry and the basic problems of all the other manufacturing industries. But resources have been diverted, perpetually and continuously, to the support of the
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French farmers' way of life, as a result of which funds have not been available, as they should have been, for what I regard as our problems. They have been devoted entirely to theirs. That is my first point.
It has already been said that we are now to make about one-tenth of the steel that the Japanese are making. This is quite preposterous. We were once the leaders of the steel industry in the world, and it is ridiculous that we should allow ourselves to be pushed into a position of relative inferiority and insignificance, dependent on outside suppliers for some of our primary and essential raw materials. We cannot manage without steel for building houses and other structures and for every other type of industrial plant. We must have it and we shall need more of it in future. Unless something dramatic is done to increase our potential we shall have to import it, and we should never have to import steel on a large scale. We ought to be exporting it to the world, as we could have done if we had devoted sufficient resources to capital investment in that very important industry, which is part of our great infrastructure.
So much for the question of our infrastructure and the importance of developing it. I now turn to the question of electricity supply. This is a most complicated story but there is one very simple problem which is never adequately considered. How reliable are the stations when they have been built? This is one parameter which is never normally considered. A nuclear power station is a very expensive item, and when it is not actually generating electricity it is still consuming interest on the capital which paid for it.
One particular type of nuclear power station has been much more reliable in the world than any other, and it has therefore generated electricity more cheaply than any other type of nuclear power station; much more cheaply, for example, than any coal-fired station or any PWR in the United States. Believe it or not, that is a system which the Canadians have produced and which we and the CEGB have totally ignored. We have ignored it, not because of arguments about its intrinsic merit but because we have never considered the fact that it works much more reliably than any other type of power station. Its performance has been quite extraordinary. It is not commonly realised, for example, that the nuclear furnaces in the great stations of Toronto are more reliable than any coal-fired furnaces that have ever been built. A coal-fired furnace nearly always has to be taken out of service and repaired after it has worked for 75 or, at the very most, 80 per cent. of total time. Some of the nuclear powered stations, on the other hand, have gone on for 95 per cent. of total time, which is quite extra-ordinary—much, much better than a coal-fired station has ever done and much, much better than any PWR has ever done. Their record is about 80 per cent., which is very good, but not so good as the best stations in Canada.
It is extraordinary to me that the result is that they are selling electricity more cheaply than anywhere else in the whole of North America, with the exception of one or two hydro-stations like Niagara. Even there the discrepancy is very small. The reason is that the greatest part of the cost of any nuclear powered station—about 80 per cent. of it—pays for the turbines, the alternators, the switch gear and in

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particular for the civil engineering, which can be very expensive. They have found—again in Toronto, which I know—that the cost of electricity from their nuclear powered station is about as great as the cost of electricity from a hydro-station where the power has to be taken about 200 miles across country. The cost of transporting the power is about equal to the difference between the cost of generating power by a nuclear station and by a hydro-station.
There is available, therefore, a system which would provide electricity cheaply and reliably; but we have wilfully neglected it, the reason being the simple one, that comparisons between the reliability of the stations have never been made. I have made this point more than once. I gave evidence to the Sizewell inquiry about it and tried to persuade them, too, of the enormous importance of making those comparisons.
There are other slight advantages which Candu has. First, its fuel is less expensive than that for a PWR. Even supposing that the PWR were made as reliable as a Candu station, its electricity would cost significantly more. When one taxes some of the Americans with the fact that the Candu station is so reliable, they very modestly say that the Canadians are very good engineers. Furthermore, they say that their maintenance crews are superbly well trained. That is true. I am fairly certain that if the Canadians had built the station at Three Mile Island, it would never have blown up; furthermore, had they had a Canadian crew in charge when the accident occurred they would probably have fixed it. This is true, but it by no means accounts for the fact that on balance, allowing for everything, these stations have been extraordinarily good. They are well built, well engineered and very well maintained, all of which is part of the process. Goodness knows how good our AGRs have been, and goodness knows how good the stations we are going to have will be. But they have not been so reliable as the Candu stations. Nor have any of the stations which have been built in France. They are quite good. They are better than the Westinghouse stations which are being built by Bechtel, but they are not so good as the Candu stations in terms of sheer reliability. I shall be happy to give the figures to the Minister, but the fact is that they are not so reliable and, in the end, it is reliability which dominates the question of cost.
My last point—perhaps a rather foolish one—is that we talk about the importance of combined heat and power stations. For a long time the CEGB was not empowered to sell heat. This is extraordinary. The CEGB was required to sell power but it had no right to sell heat. I believe I am right in saying that the position has been changed by the latest Act. But we had an extraordinarily good system in London for combined heat and power. It was at Battersea. Your Lordships will remember that that great station, by means of a pipeline under the Thames, heated the whole of a very large area immediately on this side of the river. It was scrapped because it did not pay. The reason it did not pay was because the concept of selling both the heat and the electricity could not be maintained. If they were to rebuild it where it was we should have one of the best combined heat and power stations in the world. I shall never understand why we do not do this. May I ask the Minister to request his officials to take this on board as a very sensible proposition and as a
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very nice way of reviving something which has already been in existence and which ought never to have been scrapped.
Mine is, perhaps, a rather curious contribution. I beg your Lordships to believe that nuclear power can work, has worked and could work again. I doubt very much whether our plans for it will work. I would make the point which has already been hinted at: that if ever we get our large scale PWR working it will by then be obsolete. It will be a prototype. It will have been redesigned, because the Nuclear Inspectorate said that it would not be safe, and redesigned again because the Government decided that it would be too expensive. It will therefore be a prototype. It ought to he tested for at least five years before we decide whether it is any good. By then it will be much too late ever to copy it. Therefore our policy to build PWRs, based on the Sizewell model, seems to me to be foredoomed to failure.
We have embarked on a project which seems to me to be unlikely to succeed. Even at this late stage we could change our policy and work to a design which is known to be effective. There is only one curious reason why we could not do it. It has been said that the Nuclear Inspectorate could not license it. I talked to the inspectorate about it. They told me that of course they could not license it because they have not looked at it yet and do not possess a single file upon it. There cannot be a worse reason for determining British nuclear policy than the fact that the Nuclear Inspectorate has never been instructed to look at what is undoubtedly one of the best and probably the safest design in the world. It takes time to inspect a new design. The staff of the Nuclear Inspectorate should, if need be, be increased in number to allow them to look at it. I cannot imagine a worse way of defining our nuclear strategy than to overload the Nuclear Inspectorate with the PWR and then say that for this reason they cannot inspect what is undoubtedly a very much better design.
6.39 p.m.
Baroness Airey of Abingdon: My Lords, your Lordships may think it strange that I should speak on a Motion such as the one which is being debated this evening, but the congratulations which have been extended this evening to my noble friend Lord Lauderdale, to which I should like to add mine, show how very wide-ranging is this Motion. Speaking, as I do, rather late in the debate, it has struck me forcibly that many brilliant speeches have been made from the heart this evening and, even more, from experience by men of great knowledge in this particular field.
I should like to support my noble friend Lord McAlpine of Moffat who made a heartfelt speech without any notes—unlike me. My noble friend made the point to your Lordships that heavy industry, in particular the nuclear industry, is needed to maintain scientists, engineers and jobs. The subject of jobs was originally put in the Motion of my noble friend Lord Lauderdale, and it is one of great importance to us all.
I also speak from experience, which, again, may appear strange to your Lordships. For nearly half my life, I seem to have been engulfed and surrounded by talk of the genius of British inventiveness in the field of nuclear power stations, built by British workers and

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backed and encouraged by the Government of this country—confident that we would thus benefit from our own inventiveness, maintain our workforce, and export to the world. An earlier generation was thrilled by the inventions of Barnes Wallis who, against seemingly impossible odds, succeeded with the project of his "bouncing bomb". He had to convince the Government. He had to convince the Prime Minister of the day, Winston Churchill—and we know to what effect. Not so, alas, the story of his equally brilliant invention the swing-wing aeroplane, with which I am sure your Lordships are familiar.
Is there not a parallel today in the Sizewell inquiry, which has spent a period of 13 months—to which so many of your Lordships have referred—on a deliberations, at enormous cost, to assess the effectiveness of the American system? One does not, or should not, know the outcome of a committee until it has finished its deliberations. How, then, can the CEGB be entitled to spend in the region of £100 million on services and parts ordered in anticipation that the American PWR will be accepted? That sum is attributed to the CEGB in an article in the universally respected Financial Times. I do not have the whole newspaper here but I have the extract containing that article, which was published on 8th February 1984.
I ask your Lordships this question: does not this make a mockery of the inquiry? What would the compensation be to those firms if the discussion went the other way, to the British AGR system, and if that should be preferred to the American system?
Most other countries have faith in their own industries and are prepared to back them. Heavy electrical industry will wither, and jobs will be lost if we do not back our own industries. This country stands on an unrivalled record from the past, and it should put its faith in the future.
6.44 p.m.
Lord Pennock: My Lords, may I begin by offering my apologies—especially to the noble Earl, Lord Lauderdale, and to the noble Lord, Lord Kearton—for not being present at the outset of this debate. Unfortunately, like the noble Lord, Lord Ezra, I had a long-standing prior public commitment which was quite inescapable and which prevented me from being here. I also wish to offer my thanks to the noble Earl, Lord Lauderdale, for introducing to your Lordships an important debate, just when it is particularly timely and opportune. I wish also to congratulate the noble Lord, Lord Kearton, for presenting a report which shows scientific analysis, business acumen, and, most important of all, the fearless presentation of economic implications in a manner which we would expect from him.
This debate is timely and opportune, because underlying the suggestion that we should transfer resources from heavy industry elsewhere there lurks a myth which is gaining, I regret to say, increasing credence in our society—the myth that our economic future depends upon replacing the basic manufacturing industry we have by movement into the services sector, on the one hand, and into high technology industries, on the other. I believe that
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argument is based on a false premise. I believe that it has been developed and embroidered with false logic, and I believe that it finally comes to a false conclusion because it often depends on misleading and inaccurate information that comes from the countries from which it is alleged to have originated.
In the past two or three decades, we have often had changes in the direction of our economic development which, because they have corrected earlier distortions, had some validity at the outset; revolving on the fly-wheel of fashion and economic discussion, they speedily represented the sovereign remedies upon which our future depended and without which our salvation would be lost. Then, because in the outcome this did not happen, those originally creditable theories became discredited and fell into disrepute.
In the 1960s we had, first, devaluation and then the incandescent glow of white hot technological revolution. In the 1970s we had fine tuning, and then the dash for growth. Later in the 1970s we had industrial democracy, from which would come economic reality—which would become a recognition of the importance of competitiveness, and everything in the garden would be beautiful. More recently we have had the sanctity and pre-eminence of the PSBR. Now we have a suggestion that our future depends in moving out of the basic manufacturing industries and into service industries, on the one hand, and high technology, on the other. There is nothing wrong in those movements, but to suggest that the two can replace the former is a fundamental misconception which should be exposed.
The argument is a familiar one. We know that in the past 10 years in the United States, 12 million new jobs have been created. I understand that in the past nine months, 2½million new jobs have been created; in fact, even more impressive, 2½ million more people have been employed—allegedly, mainly in the service industries and in high technology developments. In Japan, similarly, there has been a vast growth on both fronts.
I recall travelling not so long ago on the Silver Bullet train from Tokyo to Osaka. I noticed that when the ticket collector came to take my ticket he was preceded by a charming "air hostess" young lady, wearing white gloves, who took the ticket from me and handed it to the ticket collector. He punched the ticket, passed it back to the young lady, and she handed it to me. I marvelled at the fact that the lack of productivity was so immense, and at the fact that in Japan the services sector was expanding so rapidly that they could afford it.
That is the key to the whole question; they could afford it. The developments in the services sector has not replaced basic manufacturing industry. It is based on the success which the Japanese have had in basic manufacturing industry—particularly those basic manufacturing industries which they have been able to export and expand around the world. The distinctions between manufacturing and service industries, between heavy industry and light industry, and between light industry and electronic industry, are false distinctions.
In basic industries, high technology is now essential if we are to remain competitive. How many of our

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manufacturing processes are now being developed by CADMAT and by computer developments? In my own industry, more and more of the elements which go to make the cables are controlled by computers and the highest technology is used. How many of the service industries—whether they are concerned with finance, distribution, transport or even information technology—are not being used in the basic manufacturing industries? I submit that this is a false distinction in the first place.
In the cable industry, where I have the privilege and satisfaction to work, we have a cable heartland. We make cables for energy. We make cables for power. We make cables for telecommunications. We make fine enamel wires, and so on. That is our basic cable heartland. Because cables last a long time, take a long time to wear out, it is a comparatively slow-growing business, except in the developing countries of the world, where the growth is much faster. So, not unexpectedly, we have moved into faster-moving growth areas, the developments that happen at the end of the cable before the cable goes into the computer, the world of connectors, the world of power service units.
We have moved, not unnaturally, into the development of optical fibre cable, recognising, with the development of CATV and the development of junction routes for fibre cable development, that this is an area of great growth for the future. These are modern high technology developments. But if we neglected our basic cable heartland we should neglect it at our peril, and we should lose the resource whereby we are able to expand in the faster-growing and new developing electronic industries.
It is fashionable, whenever a trend of this nature is presented, to point to Japan, to Germany, to the US as exemplars which we should follow. If one examines—and I have examined—the proportion of GDP which is now expended in manufacturing industry, in the years 1972 to 1982, you discover that already our manufacturing industry in the United Kingdom has declined more rapidly than that in those countries. In the UK over that period, manufacturing industry as a percentage of GDP has declined from 37 per cent. to 24 per cent., a significant reduction; in the US it has remained at about 24 to 22 or 23 per cent.; in Western Germany it has declined much less, from 37 per cent. to 32 per cent., and in Japan from 35 per cent. to 30 per cent. So in both those countries you still have a much higher percentage of GDP covered by manufacturing industry. Conversely, as a percentage of GDP, our service industries have already increased more rapidly than in those countries—in the UK over this period they have gone from 53 per cent. to 62 per cent.; in the US again the service industries have remained static around 62 to 63 per cent.; in Western Germany the increase has been much smaller, from 48 per cent. to 54 per cent., and in Japan similarly from 48 per cent. to 53 per cent. Having, therefore, moved more swiftly than our competitors in, on the one hand, the downward development of manufacturing industry as a percentage of GDP, and, on the other hand, the growth of service industry as a percentage of GDP, and still having had a lower overall growth rate throughout the decade, it would seem difficult to argue that we shall be successful if we pursue this change
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even faster and achieve an even greater rate of change than those whom we have already passed, with this deleterious effect.
I noticed earlier in the week another suggestion that there lurks this myth: an interesting article by Sarah Hogg in The Times of Monday entitled "Does manufacturing matter?" in which she stated:
"To the prosperity of Great Britain it is value added that matters."
I have taken out the figures to show that, if we take the value added of our goods and services exported in recent years, we discover that half still comes from manufacturing industry, a further quarter comes from the services which are supporting manufacturing industry—finance, transport, distribution and so on—and only a quarter from the service industries on their own.
So, in conclusion, the burden of my remarks is that what matters is not that we move out of manufacturing into service and into high technology industries; what we must do is to have a balance and expand in all these fields. Over the last few years, manufacturing industry has, I believe, achieved a quite prodigious improvement in productivity, a faster improvement in productivity than has happened in the services sector. So far as manpower is concerned, it has achieved a very satisfactory improvement indeed. There has, however, been a notorious lack of expenditure on investment, simply because the profits to produce the investment have not been there. We have now moved into an area where we have a growth rate, hopefully, of 3 per cent. We certainly have control of our wage increases and a reasonable control of inflation. It would be reasonable, therefore, to expect that profitability will now begin to assume proportions which will allow us to expand and to develop in the manufacturing field in new investment as we have developed our productivity in the way of using our people. So my conclusion is not that we should move from heavy industry into these new areas but that we must continue in the former because they are the basis on which the other developments exist, and we shall neglect manufacturing industry at our peril.
6.58 p.m.
Lord Bruce of Donington: My Lords, the House will be extremely grateful to the noble Earl, Lord Lauderdale, and to the noble Lord, Lord Kearton, for having made it possible for us to have such a comprehensive debate here today, with a number of extremely thoughtful and well-informed contributions, if I may say so, and notably that of the noble Lord, Lord Pennock. I cannot recall in my nine years' experience in your Lordships' House having been in so substantial agreement with a noble Lord sitting on the Back-Benches opposite. It is my very great hope that his speech will be studied by members of Her Majesty's Government at Cabinet level, who seem to be singularly oblivious of the extremely cogent arguments that he put forward.
I thought the noble Lord, Lord Kearton, was being a little generous to the Government when he referred to the complacency with which they viewed the exchange rate which, as he said, brought very substantial sections of British industry to its knees during the

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period 1980–1981. "complacency" is really not the word. I have the speeches of the Prime Minister at the time, and they are all carefully filed. In them, the Prime Minister was boasting of the high rate of exchange, "looking the dollar in the face", and completely ignorant of the fact that that very high rate of exchange and the monetarist policies that caused it were wreaking such havoc in considerable sections of our industry, and not least in heavy industry.
The noble Lord, Lord Cockfield, in his list of achievements of the Government carefully did not claim the high interest rates and the high exchange rates that flow from them as being any kind of credit record. However, the noble Lord's remaining arguments were of course, if he will forgive me saying so, very much a photocopy of the arguments and theories that he has honoured us with on so many previous occasions. I can only say that the remarks of my noble friend Lord Kaldor once again, I think, effectively demolished the economic theories which the noble Lord entertains us with from time to time, and one wonders when he is going to change his ideas a little in conformity with the times.
The noble Lord said that the policy of the Government was not to intervene in matters of this kind but to create the climate. The noble Lord is much too modest. Of course the Government intervene. The Government protest the virtues, as indeed the noble Lord did this afternoon, of competition and these are quite unexceptionable. The noble Lord, Lord Kearton, referred to them, as did the noble Lord, Lord Pennock, and others. But basically the Government do not believe in competition where their political interests are affected. They do not believe in competition in agriculture. They do not believe in it at all. Indeed, as my noble friend Lord Stoddart of Swindon was quick to point out, the Government pour massive subsidies into agriculture. I would not say that that is because farmers are so heavily represented in the Cabinet, as indeed they are also represented in your Lordship's House, but the Government's political interests lie there and they have not the slightest hesitation in pouring thousands of millions of pounds into agriculture whilst moaning and groaning the whole time when they are reluctantly compelled, for other reasons, to inject money into British industry.
The noble Lord, Lord Ezra, in what many will feel was a very informative and well argued speech, said that the real debate was about restructuring and revitalising. Inseparable from that problem essentially must be the future of manufacturing industry. I do not want to add too many examples to those given by the noble Lord, Lord Pennock, but as a prime piece of idiocy which surpasses the asininity of some editorials, The Times of 27th June 1983 could hardly achieve more sublime heights. After revealing that imports exceeded exports by £552 million in May, the editor said:
"Net imports of manufactures should be regarded as the logical, and indeed necessary, counterpart to net exports of oil and services."
He continued:
"Britain's deficit on manufactured trade is an acceptable feature of the economy. It reflects our natural endowment and improves industrial efficiency."
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Even the noble Lord, Lord Cockfield, in all his glory could not possibly better that.
As I was listening to him today, and I was reminded of it when the noble Lord, Lord Ezra, spoke, I recalled the report of your Lordships' Select Committee on Science and Technology which this House debated only last year. It supports, right down to the letter, the argument of the noble Lord, Lord Pennock. This is what it said, or rather what the Minister for Information Technology said. I do not know whether the noble Lord, Lord Cockfield, has more than a passing acquaintance with the Minister for Information Technology or whether perhaps what the Minister said has not yet penetrated into the Cabinet, but this is what the Minister said:
"Manufacturing industry provides about 25 per cent. of our GDP and 25 per cent. of jobs but it provides 75 per cent. of our visible trade exports. If we were to replace the contributions made by manufacturing industries to the balance of payments, we would need to increase our exports of services by £60 to £70 billion a year. To do that we would have to increase our share of world exports of services quite dramatically from under 10 per cent. to over 50 per cent. and that is really a wholly impossible task at the moment. So without manufacturing industry Britain could not survive.".
One hopes that observations of that kind made by a responsible Minister do penetrate somehow into the philosophy of Government, because unless that is done the noble Lord, Lord Cockfield, will remain convinced of his own wisdom. This is very dangerous for him. He should concede the feasibility of error. All mankind has to concede the feasibility of error because it is only in that way that we learn.
The noble Lord said, and most noble Lords agree, that the future of British industry, and the future of the heavy industry within it, depends on competitiveness. The noble Lord himself narrowed down the argument—and as an accountant I was pleased that he did—to unit costs. But when the noble Lord thinks of unit costs he thinks only of one factor. Sometimes I feel he may forget that the production of wealth is the application of human effort to raw materials, semi-raw materials or sub-assemblies with the aid of machinery. In other words, there is the function of the machine as well as the function of the individual. As I said, I think that very often the noble Lord loses sight of that.
As the noble Lord, Lord Pennock, well realises, the function of investment in plant and equipment is vitally necessary for the reduction of unit costs. It is not only the human endeavour applied at the work place with the aid of machinery and plant and the various other technical facilities available, it is the quality of the investment and the improved nature of the investment, to which the noble Baroness obliquely referred when speaking of the achievements of Whittle and such people, for whose inventive genius the whole nation is so grateful. That is what it is all about. But if one takes too narrow a view and says that the unit costs are essentially the sole function of the cost of the labour, the cost of the human effort that goes into it, one can never, never arrive at any logical and viable conclusion. It is the product of them both.
This brings me back again to a factor that we often do not realise when we are talking of restructuring, whether it is restructuring on an international scale—and that has its implications, as the noble Lord, Lord Cockfield, knows well—or on a national scale. What we sometimes tend to forget is that one of the

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vital components in the creation of wealth is capital. Capital is necessary to buy plant and equipment, to erect factories or whatever it may be. Capital is highly mobile. It can be transferred like lightning, particularly with modern computer technology, from one side of the earth to the other. The transfer of a million pounds takes a couple of seconds provided it is properly authenticated. Since the motivation of capital—and I am not decrying this—is to earn a profit, capital will seek out the most profitable areas into which its investment is to take place. The human individuals, whether they be managers, executives, accountants, lawyers, supervisors, or the works operatives, are immobile, and are essentially immobile except within a comparatively small area. Therefore, it follows that with the varying speed of the developments of various parts of the world at different rates, with different standards of life, whereas capital can move like lightning it can very often leave labour behind.
That is exactly what has happened with a large number of our industries. Vast sums of capital have gone out of this country to the newly-industrialised countries to which the noble Lord referred. There is no reason why that should not happen, because due to the state of social and economic developments in those countries, labour rates are only 30 per cent. of what they are in the United Kingdom. So capital flows into those countries, and labour—the ordinary, human individual—is left stranded behind. Any restructuring of British industry must take account of that factor.
If we are to consider this question as a nation, as one people, as, perhaps I may say, Britons, we must ask ourselves whether capital has any responsibility to the nation of human individuals who provide the human effort? This is a fundamental problem not only of ethics, but also of politics. There is of course a dim realisation of this. The battle of the mind is fought as to whether it is patriotic to invest here or elsewhere, and the result is very often an uneasy compromise, dependent upon political considerations and very often electoral considerations, too.
But this much must be said: No matter what may be the political complexion of the Government, no matter what may be the political acerbities that are exchanged in another place and here, (though doubtless in a friendly spirit), the problem is our problem. The problem which any Government in Britain must face is to decide what they, as a Government, can do to help the industries concerned, whether or not that violates some fondly held and now considerably disproved monetarist theories.
I should like to give an example, which I had very much in mind when I was listening to the speech of the noble Lord, Lord McAlpine of Moffat. The Government could make considerable public investment in the infrastructure of the United Kingdom in terms of roads, sewers, housing and a whole series of other projects of that kind. In doing that they would probably save money because they are already spending many millions enforcedly on unemployment pay. It is not as though there is not the need for steel in the United Kingdom. It is not as though the demand for steel is at the bottom of the problem. Once the Government started to do what
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even some of their own supporters are now advocating—to make an immediate investment in the infrastructure, in a constructive and planned way, by putting to work the construction industry and the mechanical engineering side of the United Kingdom's economy—that would itself begin to provide the grounds for the recovery of the heavy industries themselves. The demand for steel would then go up and unit costs would come down. As the noble Lord opposite knows perfectly well, one cannot do much about fixed overheads, but if one increases turnover, unit costs go down automatically, even though the overhead loading remains substantially the same. The Government could play a constructive part in this move.
They could also, I fear, embark upon a policy which in some ways they find repellent, but in other ways attractive. They will bend over backwards to protect their agricultural lobby. They will break every canon of competition, free trade and anything else in support of their basic political hinterland. They will do that all the time. In fairness, when formulating their public purchasing policies, they ought to consider whether it really is in the national interest to seek out the cheapest product when that product comes from a country that pays labour rates of about 30 per cent. of those obtaining not only in this country, but also in Western Europe. A Government convinced that the necessities of their country's economy demanded that would do it. The Government cannot plead all the virtues of free trade and free competition throughout the whole of industry while violating every one of them in relation to agriculture; and they know that perfectly well. Common sense would dictate that what I suggest is what they should do.
The case for aiding and investing in heavy industry is overwhelming, for precisely the reasons which the noble Lord, Lord Pennock, has given this evening, and the Government ought not to be prissy as to the source from which that investment comes. They ought not as a matter of political dogma stipulate that it must come from private sources. They need not insist that their rentier supporters get their cut first before the national interest is considered. Private industry is very welcome to invest in these sectors, and indeed ought to do so. That would be a preferable exercise to the vast exchange of money that at present takes place by way of investment in taking over companies which already exist—an activity which today occupies the bulk of the time on the Stock Exchange.
In the national interest the Government ought on their own account to invest instead of considering what my noble friend Lord Dean of Beswick referred to in relation to Inmos. That is part of a new industry that must be dear to the noble Lord's heart. It is one of his new, expanding industries; an industry over which Sir Keith Joseph dithered for at least two years before he made the investment. Now that the investment has been made and is beginning to yield results, the first thought is not to encourage the industry further, not to ensure that it makes a profit that would provide relief for the taxpayer by way of payments into the Consolidated Fund. The first thought is that it should be "flogged" off, and as my noble friend Lord Dean very well knows, one of the figures that has been mentioned is £40 million, which United States experts are already

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ridiculing, saying that it is worth at least £200 million. I hestitate to repeat the figure in case it encourages the rapacity of the Chancellor of the Excheque and advances his privatisation plans.
These are the ways that a nation should function. If the national interest demands it, political dogma should not prevent the Government from investing where private capital's caprice (to which it is entitled) means that it is unwilling to invest, for a variety of reasons, such as competition overseas, the desirability of investing in Florida, or something like that. This is the way forward, and this is the course which I commend to the House.
7.19 p.m.
The Parliamentary Under-Secretary of State, Department of Energy (The Earl of Avon): My Lords, I had intended to open by saying that the Motion which we have been debating today touches upon one of the major issues facing the United Kingdom at the present time. In fact, I think, having listened to the debate, I could say that one speaker or another has touched on virtually every issue that faces our country today. I believe that, if there were any gaps, the last speaker, the noble Lord, Lord Bruce of Donington, has certainly plugged them.
In the past, we have too often devoted large portions of our capital finances to parts of the economy which face decline. The intention has often been well motivated—the protection of a threatened section of our industrial society. But the outcome has frequently been waste. The changing patterns of market demand have worked inexorably to make the protected unprotectable. Finance that might have been used to create new opportunities, generating new jobs and new profit for reinvestment, has been lost. My noble friend Lord Pennock, in his opening remarks, put this better than I could.
The breadth and depth of today's debate has illustrated forcefully the great concern that the House brings to this issue, inspired, as we are, by the Motion introduced so well by my noble friend Lord Lauderdale. My noble friend Lord Cockfield outlined, with his normal lucidity in his opening remarks, and, if I may use his own words, with a broad brush, the policies that the Government have adopted. He has made clear the general thrust of those policies and their relevance to the problems of the shipbuilding and steel industries.
Much as I enjoy a good look into the future, I should like to turn in some detail to the great industry that faces problems all too germane to today's debate. It is an industry that has been referred to by virtually all speakers. It is the coal industry. Indeed, the noble Lord, Lord Kearton, has drawn our attention to another excellent report by the Select Committee on the European Communities, this time, on coal policy. The Government welcome the Select Committee report. I should like to add my congratulations both to the committee and to the noble Lord, Lord Kearton, for his introduction. I believe that it would be appropriate for me to reply in some detail to his report. It provides a trenchant analysis of the prospects and problems of the British coal industry and examines the
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industry in a realistic context, namely, within the European and world market environment.
I do not think that I can respond in the time available to all the points that have been raised but I shall endeavour to cover the main ground. Any assessment of the coal industry's future must start from the understanding that coal is now an international business and growing more so every year as the world market in coal expands. In the Government's view, the European Communities Committee has described the international position of the coal business with realism. Europe, outside the Unied Kingdom, will be turning increasingly to coal imports from low cost producers such as Australia and the United States and, as we have recently heard, even from Colombia.
World-wide reserves of coal are abundant, widely spread and highly competitive. Low cost international supplies can he expected to increase for many years to come. The future size of our own coal industry will depend largely on its ability to compete against these international supplies. But the prospects for the coal industry at home and in competitor countries are good, at least for those that achieve necessary levels of efficiency to command a place in the energy economy. I share the desire of the noble Lord, Lord Stoddart, in this respect, but I believe that this last sentence is very important.
As the committee says, the contribution of European Community policy on coal has been limited, one would even say minimal. The Government share the Committee's view that the Community proposals on solid fuel now being discussed are on broadly sound lines. They are new encouragement for investment in economic production, incentives to reduce loss making capacity and reduce stocks, increased aid with the social costs of rationalising the coal industry and further finance for energy demonstration projects. No real progress has yet been made on these proposals. This is particularly to be regretted because they would provide a welcome boost for Community production of indigenous coal.
The Government join with the Select Committee in regretting this lack of progress and we are continuing to press our partners and the European Commission to move forward and develop an effective Community policy without delay. But whatever the outcome of the community discussions, there is no escaping the realities that the coal industry faces at home. As the Committee recognises, the main market opportunities for our coal lie within the United Kingdom and this market is unlikely to change substantially from its present size. Industrial demand for coal will grow, aided by the Government's conversion grants, but demand for coal at power stations will tend to remain static. Perhaps it is worth noting, particularly as my noble friend Lord Lauderdale and the noble Lord, Lord Ezra, mentioned it, that despite the strength of international competition, our country exported 2 million tonnes of coal net last year. That is, I think, about 1 million tonnes down on the year before, but we are a net exporter.
One overall message of the committee is that the demand for home produced coal is unlikely to pick up fast enough to reduce the current massive surpluses in

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the supply of general purpose steam coal. The committee also points to very heavy losses which some of our collieries are incurring. It concludes that it cannot make sense to keep open every mine indefinitely, however uneconomic. This must make sense. In keeping with the central theme of today's Motion, the industry must avoid the easy option of letting good money shore up hopeless mining capacity. For this reason, the Government share the committee's view that a long-term view must be taken on coal.
The objectives that we have set for the management of the National Coal Board encourage them to develop a long-term viable strategy. The aim is to direct investment in the industry into sound projects with lasting prospects and value. New modern capacity such as the recently approved Asfordby mine is to be created. Existing mines with potential are to be further developed and modernised. But mines with no future must not be allowed to drag down the rest of the industry.
The Government are very conscious, as is the Select Committee, of the serious social problems that arise when mines are closed or their work force cut back. A number of noble Lords have touched upon this important aspect of industrial rationalisation today. It should always be in the forefront of our minds. The Government have taken important steps to alleviate these problems. My noble friend Lord Cockfield referred to regional incentives. In addition, the Government have worked closely with the coal industry to develop special redundancy, re-location and retraining assistance to reduce the problems which individual miners and their families face if their present jobs go. The Government believe that if the coal industry is successful both in carrying through the restructuring and re-investment now in progress and in bringing output into balance with demand, then the future for the industry will be secure. In answer to the noble Lord, Lord Ezra, may I say that we should not be helping to finance an investment programme costing over £800 million a year if we did not believe that the coal industry has a promising future beyond its current problems.
The noble Lord, Lord Stoddart, asked about high coal stocks and industrial demand. The National Coal Board is actively working to reduce the current very high stocks by pursuing new markets for coal and by reducing its costs in order to become more competitive. The Government's coal firing schemes providing up to 25 per cent. grants and exchange risk cover on ECSC loans have given the coal board constructive and practical help in its efforts to increase coal penetration in the industrial sector. The noble Lord, Lord Stoddart, mentioned at one stage the European subsidies. There was an exchange on 20th February in the other place when my right honourable friend gave the figures for production subsidies and investment finance in 1982. These show that the United Kingdom contributed in the longer term better than any other of our European partners. I understood the noble Lord to say that the Commons Select Committee on Energy had published its report. I do not believe that it has done so, and therefore I do not think that I should comment upon it.
Lord Stoddart of Swindon: My Lords, I am much obliged to the noble Lord for giving way. I think that I should say that I was in error in quoting from a report which has not been published. I had understood that it was to be published today; but I now understand that it is to be published next Wednesday. Let me take this opportunity to apologise to your Lordships for quoting a document which is clearly confidential and to apologise to the Select Committee on Energy and, indeed, to the Speaker of another place.
The Earl of Avon: My Lords, I am grateful to the noble Lord for his generous apology. It also makes my reply slightly easier because I was not quite sure what I ought to say!
The noble Lord, Lord Stoddart, and other noble Lords raised some points on electricity prices. I should like to draw attention to what my right honourable friend the Secretary of State pointed out to the Select Committee in his oral evidence, and that is, that the recommended price increase to domestic consumers is only 2 per cent., which is very small compared with the turnover of the electricity supply industry, and is a prudent provision for ensuring that they meet their external financing limit. The Electricity Council's recommendation for 1984–85 is that there should be no tariff increase to industry beyond any necessary fuel price adjustment.
The noble Lord, Lord Stoddart, also asked about new mines. As we know, the Government have recently given the go-ahead for the new mine at Asfordby. It is, of course, a matter for the board's commercial judgment to decide which particular projects they may wish to bring forward next.
There were also remarks made on financial structure and commitments, and I know that this is close to the heart of the noble Lord, Lord Ezra.
Lord Stoddart of Swindon: My Lords, I am most obliged to the noble Earl for giving way. Is it possible at all to give any indication as to when a decision about Margam is likely to be made? There is a great deal of anxiety in the area, and it would be helpful if those anxieties could be allayed at this stage.
The Earl of Avon: My Lords, my information is that at the moment the Government have received no proposals from the National Coal Board on Margam.
On the question of the financial structure and commitments, payments of deficit grants to the National Coal Board reduce the amounts which the board has to borrow, and have since 1981–82 exceeded the board's payments of interest. I do not believe that at the present time writing-off borrowing would help. The first priority must be for the board to concentrate their full attention on achieving viability. The board enjoy what amounts to a year-by-year capital reconstruction, because the deficit grants reduce the amount that they have to borrow. However, this is certainly something that we will consider when the industry becomes more viable.
My noble friend Lord Lauderdale expessed concern about CEGB's generation capacity replacement programme, and the noble Lord, Lord Stoddart, also spoke to this matter. I agree that neither of us shares

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the concern of my noble friend in this respect. Both the Government and the CEGB fully appreciate that, over the next 20 years, a large number of units will be reaching the end of their design lives. But the CEGB has nearly 10 gigawatt capacity under construction in 1983–84, which is about one-sixth of present total capacity.
One large, modern generating set has the capacity of 10 of the old ones now reaching the end of their economic lives. So for the next few years CEGB will have surplus capacity, not a shortage, and there is time to plan for the needs of the turn of the century when the outcome of the Sizewell Inquiry is known. I have taken the point made by the noble Earl, Lord Halsbury, to mind about not using the year 2000 as if it were a long way ahead.
One or two noble Lords gave me the impression that they thought that power stations were going to last for a shorter time than was originally envisaged. In point of fact, all indications are that the power stations, particularly the AGRs, will have a longer life than was originally anticipated. The noble Lord, Lord Dean of Beswick, talked about refurbishing. There is quite a lot of refurbishing taking place on the ones in merit order which have enough capacity to be refurbished. That is happening now.
The noble Lord, Lord Bowden, asked about Battersea Power Station. I do not particularly wish to be drawn into that matter. But as I believe the noble Lord said in his closing remarks, the Energy Act has enabled people now to sell power to the electricity boards and we are encouraging CHP in this field. Incidentally, if anybody wishes to buy a power station, it is open for them so to do. Moreover, to answer the noble Lord, Lord Dean of Beswick, perhaps the fact that they have not been rushing to buy them may show that it is not quite as economic a matter as we would all wish it to be.
I should like to welcome the contribution of my noble friend the Duke of Portland. We are fortunate that his wide knowledge and experience of the nuclear industry is available to the House. I also welcome the contribution of my noble friend Lord McAlpine and recognise his interest. I thought how privileged we are in this House to have three speaker—one promoting PWRs; one promoting AGRs and then the noble Lord, Lord Bowden, promoting Candu from the other Benches. We have certainly had all three options shown to us.
I thought that my noble friend Baroness Airey came down slightly anti as regards the PWR. Let me point out to her that the CEGB have made quite clear to the Sizewell Inquiry that the buying of the pre-consent ordering was a commercial decision, and they fully accept that it will not in any way influence the Secretary of State's eventual decision, nor in any way should it affect the inquiry. Also, I think that should the PWR ordering be accepted by Sizewell, a very high percentage will, of course, be placed in this country.
My noble friend Lord Torrington talked about wind and also solar energy. We are spending quite a lot of research funds at the moment both on wind and geothermal energy, as well as looking at tidal energy. So the Government have not lost their interest in this field.
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The noble Lord, Lord Kearton, and the noble Earl, Lord Halsbury, also talked about coal liquefication and gasification. The National Coal Board's liquefaction process has progressed through the research stage and the Government are sharing with the coal board the cost of a design study for a 2,500 tonnes per day plant. I am told that the design study should be completed later this year. I was intrigued by the new ideas of the noble Earl, Lord Halsbury. One of the new aspects of the oil world is the new plans for oil extraction which may produce a little more oil than we thought we could get out previously. I was also pleased to have his acceptance of the plans for the fast breeder, which I believe is a very good step forward.
Finally, I should like to return to the more general issue raised in today's Motion and the questions posed for all our industries, not just coal, nor even just our traditional industries. The coal industry illustrates well that even within industries where there are problems of excess supply and financial loss, there can be substantial opportunities for viable operations and continuing jobs. But these opportunities can only be exploited to the full if we are prepared to make our industries sufficiently competitive to hold their own.
The United Kingdom is a trading nation. Our prosperity depends already to a very large extent on our success or failure in selling our products to other countries. In short, we have to be competitive to live. We cannot earn our living in the world if our basic energy costs or our finished goods are uncompetitive. So we must concentrate our efforts where there is demand for our products. We must not waste our resources in costly surplus capacity in stagnant or declining markets. We must put new resources into the growth areas. And we have to accept that even in the growth markets the competition is going to be strong.
There are many signs that our industries are winning more ground in export markets and facing up to competition at home. We are confident that this process will continue as our policies help to encourage the much-needed shift in productive resources that has been the subject or our debate today. I end my remarks by thanking my noble friend for introducing this Motion.
7.39 p.m.
The Earl of Lauderdale: My Lords, one lesson to be learnt from today's procedural arrangement is that the experiment has been valuable, in that we have managed to get a full day's debate at a reasonable hour and on a convenient day for a very important report from the scrutiny committee. Very often these admirable reports are taken at a late hour on a difficult day and do not receive the attention they deserve.
The whole House is indebted to the noble Lord, Lord Kearton, for agreeing to take what happened to be a type of second fiddle position in the pecking order, though not in quality. I should like to thank them. We are all grateful to him, because it has enabled us to look at the coal report in a much more satisfactory context.
I should like to thank all noble Lords who have joined in the debate today—several, to my certain knowledge, at considerable inconvenience and indeed at rather short notice. We have had some notable

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contributions from all sides of the House. It has been said that tomorrow's truths are today's blasphemies, so I am not altogether surprised that my anxiety about generating capacity has not been reflected by the Government or, indeed, anywhere else in the House. Those of us who are young enough to live long enough towards the end of the century will see.
However, that apart, there has been a surprising consensus; there has been general agreement all round that we must sustain heavy industry, no matter how imperious is the impulse to get into the new sunrise industries. Basic manufacture has to survive or else there is nothing. There was not much enthusiasm for the general Government stress on the service sector. As to the coal industry, this House has certainly made clear what the scrutiny report recommended: that there can be absolutely no question of stripping the coal industry, which is at the very heartland of our economy. On the other hand, the closure programme has to go ahead, sad though it is and sad as are the social consequences. I hope that there may be an opportunity to have a good debate on the social problems of closures and of replacing employment in Scotland, the North-East and South Wales.
On nuclear power, there has been the familiar interchange as between Candu, AGR and PWR, but we were mostly agreed that the nuclear programme must go ahead. There was fairly common agreement that at any rate the refurbishment of power stations would be needed, and some noble Lords thought that it could usefully be combined with CHP. I have certainly said enough and, once again, I should like to thank all noble Lords for their forbearance and participation, and at the same time beg leave to withdraw my Motion for Papers.
On Question, Motion for Papers, by leave, withdrawn.
Lord Kearton Lord Kearton rose to move, That this House takes note of the Report of the European Communities Committee on European Community Coal Policy (10th Report, 1983–84, H.L. 80). The noble Lord said: My Lords, I beg to move the Motion standing in my name on the Order Paper. I must at once reassure your Lordships that I do not propose to start a second debate. As I mentioned in my opening remarks, and as the noble Earl, Lord Lauderdale, has confirmed, the debate on the report of the sub-committee of the Select Committee has been subsumed in the wider Motion standing in the name of the noble Earl, Lord Lauderdale.
On behalf of the committee, we are very grateful to the noble Earl for allowing us to tag along with his major Motion. I would also like to take this opportunity to thank all those who have spoken in the debate relevant to the committee's report and for the generally kind reception which the report has received. I should particularly like to say that the committee appreciates the reception which the Government have given to the report and the constructive and positive comments of the noble Earl, Lord Avon, on the report. The promise of further action will be a source of great satisfaction to the sub-committee.
I should like to thank all noble Lords who served on the committee, among whom the most prominent was the noble Earl, Lord Lauderdale, himself. I should also like to make special mention of the fact that the Chairman of the Select Committee, my noble friend Lady Llewelyn-Davies of Hastoe, gave us every encouragement; owing to the election, we had quite a major break after the inquiry had started but because of her encouragement we were able to complete it. Once again, I should like to thank all those who have been concerned with the report and who took part in the debate on the report. I beg to move.
On Question, Motion agreed to.

The Blind: State Benefits
7.45 p.m.
Lord Banks Lord Banks rose to ask Her Majesty's Government whether they are satisfied that state benefits available to the blind are adequate.
The noble Lord said: My Lords, I beg leave to ask the Unstarred Question standing in my name on the Order Paper. The Question asks the Government whether they are satisfied that state benefits available to the blind are adequate. I put down this Question with the support of my noble friend, Lord Kilmarnock, after a discussion which we had had with representatives of the various organisations representing the blind. We felt it would be right that the House should hear the misgivings which they have about the present situation and that an opportunity should be provided for the Government's policy in this field to be probed.
There is, of course, an appreciation in all parts of the House of the burdens which are imposed by blindness. Many of these burdens have a financial aspect. For example, it has been pointed out that a blind person cannot manage, as many of us can, with a cheap ballpoint pen and a pad of paper but needs a typewriter or a braille writing machine. He uses the telephone more, and at more expensive times. He often needs to pay for a companion or take a taxi when he travels. For example, it is difficult for him to do his own decorating, clean his own windows, cut his own hedge, mend a fuse or rewire a plug.
The point of mentioning those restriction on what a blind person can do in the context of this Question this evening is to emphasise that blind people have extra expenses because of their blindness. There are some 130,000 registered blind people in the United Kingdom, some 75 per cent. of whom are over the age of 65—over retirement age. Unlike those who are war-blinded, people who are born blind or who become blind through natural causes in adult life receive no benefit or pension. It is true that blind people on supplementary benefit receive a supplement of £1.25 per week. Blind people earning enough to pay tax receive an allowance against tax of £360 per annum, or £720 per annum for a married couple. So the principle is conceded by the state machinery that blind people require assistance on account of their blindness.
However, it is reckoned that over a third of blind people have an income under £2,000 per annum and

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more than half have an income under £3,000 per annum. So it follows that many are not getting the full value, or any value at all, from the tax concession. In fact in 1982–83 30,000 were claiming the tax relief, which is worth £108 per annum for somebody on the standard rate, and 41,000 were on supplementary benefit. That would appear to leave some 59,000 receiving neither the supplementary benefit supplement nor the tax relief—the blindness gap, as it is called. Some 59,000 blind people, most of them on low incomes, were getting no state assistance at all on account of their blindness.
I should be grateful if the noble Lord who is to answer the Question would confirm or otherwise that that is a correct statement—that some 59,000 blind people, most of them on low incomes, are receiving no state assistance at all on account of their blindness. Blind people who cannot orientate themselves in their environment are not entitled to mobility allowance unless they are unable to walk; in other words, they do not get it on account of their blindness. We on these Benches, and many people in many other parts of the House, believe that there is a need for a general disability allowance to meet the additional expenses incurred by being disabled from whatever cause—blindness or any other cause of disablement. The eventual aim, must remain a disability income where earning is not possible and a disability allowance, whether or not earning is possible, towards the additional expenses.
In the meantime, could not the Government begin to tackle the problem so far as the blind are concerned by turning the tax relief into a positive cash payment, as was done with children's tax allowances when child benefit was introduced? This would help those who do not pay income tax. I wonder whether it is possible for the noble Lord to say when he replies how much it would cost extra to provide the same net benefit of £108 per annum, which the standard rate taxpayer now enjoys, to all the blind, regardless of income. My own calculation is that it would be somewhere in the neighbourhood of £10 million to £12 million. Of course, that would be a very small beginning and we would want to increase the weekly payment beyond the £2 a week; but that £2 a week would be higher than the present supplementary benefit supplement and would be payable to all who were blind, not merely to some.
The organisations representing the blind feel that blind people should be entitled to a benefit equal in amount to the mobility allowance of £19 per week. How much would that cost? I imagine the answer is somewhere in the region of £100 million.
My Lords, I believe that the Government concede the case for such a blindness allowance, but that only the question of cost prevents them from doing anything about it. Perhaps the Government could begin with something between the lower benefit costing £10 million to £12 million which I mentioned, and the higher benefit of £100 million. If the Government agree that present benefits are inadequate, what priority do they give to rectifying that position?
7.55 p.m.
Baroness Jeger: My Lords, we are very much indebted to the noble Lord, Lord Banks, for bringing this important Question before us this evening. I do not want to detain the House for long, but I assure the noble Lord the Minister that the brevity of my remarks is not proportional to the seriousness of the case.
My Lords, I would like to ask the noble Lord the Minister one or two questions. In December 1980 32,000 blind people on supplementary benefit were receiving the £1·25 extra blindness allowance. By December that figure had risen to 41,000. Has the noble Lord the Minister the figures for 1983? Is there any explanation for this increase? Is there an increasing number of blind people, or is there an increasing amount of poverty among the blind which is putting more of them on supplementary benefit? Moreover, if the allowance was £1·25 some time ago, should that not be increased? Are the Government giving any consideration to increasing the £1·25 in proportion to the rate of inflation?
The noble Lord, Lord Banks, referred to the question of income tax relief under which blind people are allowed up to £360 of income free of tax. I understand, with him, that that helps about 30,000 people, but I am sure the noble Lord shares my concern for those people who are too poor to pay any income tax at all, so that this is of no help to them.
My Lords, I would also like to ask the noble Lord the Minister if the Government could not look again at this question of the mobility allowance. There was a case reported in The Times Law Reports a few days ago of a blind woman whose appeal for mobility allowance had been turned down because under the regulations which grant mobility allowance, it was said that she was not entitled to this help because in fact she could put one foot in front of the other; there was not what I believe the professionals call a motor disability. But this woman had been so disorientated by her blindness that she could not go out, she could not find a bus stop, she did not know her left from her right or where she was going. She needed to have someone to put her in a taxi or to put her on a bus, but because her "fault", if I may use that word, was blindness and was not some sort of paralysis or other kind of disability, her case was disallowed. I am not criticising the court because it was quite clear in the regulations for the mobility allowance that these were to be guidelines. However, there must be many blind people, especially older people, who are afraid to go out on their own, who are quite unable to move around, or to have any kind of social life, not because they cannot—I repeat—put one foot in front of the other, but because their blindness makes them feel afraid and terribly alone.
I hope, too, that we are all giving some thought to the marvellous improvements in technology for all kinds of disablement. There is a great number of inventions, of sensitive appliances, which help all the disabled. Can we be told what help the Government are giving to make sure that people who need the most sophisticated aids can get them? I understand, for instance, that a Braille writing machine costs £70, even though subsidised by the National Institute. If a person is on supplementary benefit, plus £1·25, £70 is a lot of money.

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Another point which I think is very important is that of guide dogs. I think the Guide Dogs for the Blind Association is one of the most efficient, most marvellous, charities in this country, but it has to rely entirely on voluntary contributions. A guide dog can mean the difference between some sort of quality of life and no quality of life, especially for younger blind people. I know a lot about the voluntary work done by the Guide Dogs for the Blind Association, but I am wondering whether the Government can see any way towards supplementing that voluntary effort, because it is very expensive to keep a guide dog. They are not little dogs who can be given a couple of biscuits a day. Veterinary fees are expensive nowadays, and it is essential for these dogs to be kept fit. As I have said, I know the association is very caring of its dogs and of the blind people they help, but sometimes I wonder if it ought to be left on its own.
My Lords, of course it would be wrong to omit the marvellous work done by institutions like St. Dunstan's and others. But we must consider whether or not the problem is getting beyond the voluntary associations in that their work is often supplementary. I sometimes think we leave too much to them. In fact, when we are told about the problems the Government have in finding money, I believe every self-respecting taxpayer in this country would gladly contribute, in thankfulness for his sight. I do not think there are many in this country would say, "I want income tax cut so you do not give any money to the blind", nor do all the other things which are essential if we are to help those who have this appalling disability to live lives as fully and as richly as possible.
My Lords, in the Labour Party manifesto at the election we suggested we would introduce a £10 a week blindness allowance as a first step towards the introduction of a new cash benefit for the disabled. In the Conservative Party manifesto I can find no reference to helping blind people specifically. We are told that the Government have in mind some disability pension which, of course, will include blind people, but that there is not the money available.
There may be some arguments about waiting until the general disability help can come in, but I should like to put to the House this evening that there should be a special consideration for blind people. For one reason they are identifiable, mostly they are registered, and also if the general disability allowance comes in at some time or other the blind allowance could be subsumed in that, so we are not contradicting each other. I am just suggesting that we might start towards this general disability allowance with blind people. We already have the mobility allowance, the attendance allowance, and this seems to me to be the next step forward.
I hope that the Government will have something encouraging to say to the House tonight and some message of hope for many of the blind people in our society, the majority of whom unfortuantely are getting older and older and so have other disabilities as well; sometimes deafness, sometimes arthritis, sometimes other crippling diseases. But we should also think of the brave younger blind who go out to work. We see them on the Tube and the buses with their dogs, and working on telephone switchboards, and in
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all sorts of work. They should be encouraged and made to feel that we all care about them. If the Government are to say that there is not any money to help them further, then the Government are not reflecting the public's view, because the public has great sympathy and concern for those who do not share the marvellous gift of sight.
8.2 p.m.
Lord Kilmarnock: My Lords, the gaps and shortcomings in our tax and benefits system in so far as it affects the blind have been tellingly demonstrated by my noble friend Lord Banks and by the noble Baroness, Lady Jeger, and I do not want to repeat what they have said. In some ways the Blind Persons Acts 1920 and 1938 showed, by the standards of those times, a greater concern with the plight of blind people than we have since evinced, for these were in effect blindness allowances, or they provided blindness allowances, with an age threshold. These were repealed by the National Assistance Act 1948 which contained, so far as I can see, rather weaker provisions concerning welfare, workshops, meals, and recreation, and in any case these were not specific to the blind as they included the deaf and the dumb also.
Our present apparent indifference may well be due to an erroneous belief by most people that a blindness allowance is already in existence. That of course is not the case, as we have heard. On the contrary, it appears that in comparison with the rest of Europe we are not in the same league in our statutory treatment of our blind fellow citizens. Despite the acknowledgement by Mr. Prentice on 24th July 1979 in another place, at col. 337—I quote from Hansard—that,
"the case fir an income in the form of a blindness allowance is unanswerable on its merits".
nothing has happened in the subsequent five years.
The petition, of which I have a copy here, which was presented to the House of Commons in December 1980, signed by half a million people, is presumably just gathering dust on a shelf. Is it not time, therefore, that the Government made a resolution to respond positively during their second administration to a claim they felt unable, for various reasons, to meet during their first administration?
I understand that the organisation representing the blind have met Mr. Fowler, and we hope that something, however modest, may come of that. They have also, I understand, written to the Chancellor of the Exchequer, whose reply they still await. As it is on him that any substantial progress depends, I hope that he will read this short debate.
I want to turn to more specific matters. My noble friend Lord Banks has already drawn attention to an extraordinary lacuna or, to put it more forcefully, a damned great hole that appears to exist in provision for the blind. Out of the 130,000 blind people it is estimated that approximately 30,000 are in work and can claim the tax allowance if their income brings them into tax, while some 40-odd thousand who are on supplementary benefit get the rather exiguous daily additional allowance of £1·25p, to which the noble Baroness, Lady Jeger, referred. This has not moved in cash terms since 1966, and seems to have been sinking in real terms since the 1940s when it stood at 15 shillings.

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None of this is very good, but what I want to ask the noble Lord, Lord Glenarthur, is whether he can throw any further light—and my noble friend asked him this too—on the remaining 59,000 or 60,000 who qualify under neither of these headings? Given the predominance of elderly blind persons, we must assume that many of them are pensioners above the suplementary benefit level—or some of them are—and the rest are those with such low pay that they do not qualify for tax relief.
Many of these people may be living in conditions of appalling difficulty. Have the Government made any estimate of the numbers of such people, and, if not, is this not something which should be undertaken? Would it not be possible to start with the voluntary register that local authorities are bound to keep as a basis for their returns to the DHSS? Will the Government undertake to make a serious investigation of how many people are languishing in what my noble friend called the blindness gap?
I turn next to some immediate ways that the Government could help. First is the important question of mobility referred to by the noble Baroness, Lady Jeger. This is an area of inadequate assistance for the blind which has struck me with particular force. It may come as something of a shock to those unfamiliar with these problems—it did to me—that people who are blind and cannot orientate themselves in their environment are not entitled to mobility allowance unless their lack of mobility is a direct result of an ambulant disorder; that is, nothing to do with their blindness.
It must be obvious that blindness much reduces effective mobility, or makes it much more expensive. Here I want to refer to the judgment, to which the noble Baroness referred, recently delivered in the case of Christine Lees, a blind person now 30 years old who applied back in 1979 for a mobility allowance, refusal of which by the Medical Appeals Tribunal was upheld by the Social Security Commissioner. It went to the Court of Appeal where, on 9th February this year, her appeal was dismissed. I do not want to go into the case in any detail because Christine's blindness was compounded by another condition, and I understand there is the possibility of a further appeal.
What I want to stress is that it is only because of such inadequate provision for the blind that the case had to be brought at all. Any such claims must at present be based on the Mobility Allowance Regulations 1975, paragraph 1 of which specifies that:
"A person shall he treated, for the purpose of Section 37A (of the Social Security Act 1975)"—
that is the mobility allowance, and then I paraphrase a little, only under the following conditions:

"(a) he is unable to walk; or

(b) his ability out of doors is so limited, as regards the distance over which or the speed at which or the length of time for which or the manner in which he can make progress on foot without severe discomfort, that he is virtually unable to walk".

Then there follows sub-paragraph (c) which is less relevant.
This means, or appears to mean, that people who are capable of walking in the sense that they can put one foot in front of another, as the noble Baroness said, provided that they are steered or have some
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apparatus for steering, and can cover a reasonable amount of ground, do not satisfy the statutory provision for an award for a mobility allowance.
In the case of Christine Lees, the commissioner said of blindness in general, not her blindness,
"It is an affliction which is wholly unrelated to the physical power to move one leg in front of another".
Later he said:
"But unfortunately for the claimant her inability to control the direction in which she goes is a handicap which has nothing to do with her ability to walk in the first place, and accordingly is something which cannot be taken into account in determining whether the claimant satisfies Regulation 3(1)(a) or (b)."
This brings me to my main point. Will the Government not agree that there should be an additional subsection to the regulation extending the concept of immobility to cover severely impaired or restricted mobility arising from blindness; that is, due to a faulty steering mechanism in addition to a faulty mechanism of propulsion? After all, all vehicles need both. The impairment of sense of direction is surely as important as the impairment of the means of locomotion, and, in fact, potentially more dangerous. I do not wish to suggest that deprivation of locomotion is not a terrible affliction or that mobility allowance is not a great advance for the disabled; it certainly is. But why should the blind be excluded, or have the Government some other alternative in mind?
It is interesting that, in the case I referred to, the Medical Appeals Tribunal said:
"In general terms, we would have thought that Attendance Allowance was, in tact, more appropriate in cases such as this".
But it was outside their jurisdiction to recommend that and that allowance was not in payment.
That leads me to another question that I wish to ask the noble Lord. It has been calculated that some 10,000 blind people qualify for attendance allowance, but, as we know, many blind people are elderly, frail, or suffer from other disorders, and it therefore seems quite possible that they would have qualified for the allowance anyway and that in many cases the attendance allowance represents no additional help for blindness. This is precisely what emerges from the opinion of the Medical Appeals Tribunal in the case of Christine Lees, when it suggested that her other disability, which is hydrocephalus, should qualify her for that allowance, not her blindness. Incidentally, have the Government any figures of how many blind people have applied for attendance allowance and have been refused?
The speeches have all been short this evening, and I do not want to make a long one, but the upshot is that many blind people appear to be falling between a number of stools. The tax allowances are a very modest benefit and are available to fewer than a quarter of blind people. The supplementary benefit additional allowance has fallen drastically behind inflation. In the absence of some further decision by the courts or some amending legislation by the Government, blind people do not qualify for mobility allowance and even claims to attendance allowance, seem to qualify in far fewer cases than one would have expected. There is an indeterminate, but apparently large, number of blind people who qualify for none of these things.

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I venture to suggest that this is simply not good enough. I should have thought that a blindness allowance was a sine qua non of a civilised society. I will not go in to the details of likely cost. My noble friend Lord Banks has already mentioned £100 million, but it would be a minute proportion of the social security budget, or it could be found from the very large contingency reserve planned in the Government's recent White Paper.
Finally, if the Government will not make a firm commitment this evening to an allowance on the lines advanced by my noble friend Lord Banks, I hope that we shall hear from the noble Lord, Lord Glenarthur, that the Government will give some immediate help on mobility and on the wider availability of attendance allowance. I look forward to the noble Lord's reply.
8.13 p.m.
Lord Glenarthur: My Lords, I join with those who have spoken earlier in thanking the noble Lord, Lord Banks, for asking this Question this evening. I know only too well that over the years the noble Lord has taken more than a keen interest in a great range of social security matters, not least that of the interests of the blind.
I would like to start by assuring your Lordships that the Government are deeply sympathetic to, and aware of the needs of, blind people and of disabled people in general. Indeed, my right honourable friend the Secretary of State for Social Services and the Minister for the Disabled recently met with a deputation from a number of organisations representing the blind to discuss their concern at the need for a cash allowance specifically for blind people, which was the theme of many of those who spoke this evening.
We are well aware of the case put forward by these organisations which work so tirelessly on behalf of the blind. I join with the noble Baroness, Lady Jeger, in adding my support and thanks for all that they do for the blind. The arguments which have been put forward have been repeated this evening. But in the present financial situation we think that our policy of concentrating on the basic needs to which disability gives rise, rather than providing benefits for particular diagnostic groups, is the best way of ensuring that our scarce resources are used to assist those most in need.
As I am sure your Lordships are aware, the blind can qualify for the present range of social security benefits in the same way as other claimants. For example, about 10,500 people, whose main disabling condition is listed as blindness or diseases of the eye, currently receive attendance allowance at the lower or higher rate. I am afraid that I do not have the information which the noble Lord, Lord Kilmarnock, asked for about the numbers who were claiming and not receiving this payment. If those figures should be available, I will let him have them.
I accept, of course, that many blind people are not eligible for these benefits. Many, indeed, are able, despite their handicap, to work and lead full and independent lives. This is something which we all applaud and which we would wish to encourage as much as possible. Although we are sympathetic to the
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case for the introduction of a special cash allowance for all blind people, it would be wrong for me to suggest that the necessary resources are likely to become available in the foreseeable future. A benefit for all registered blind people, pitched for example at £10 a week, would cost in the region of £65 million a year. To pay it at the same rate as mobility allowance, which was suggested—currently £19 a week—would cost some £125 million a year. These figures do not take account of those who are registered as partially sighted.
In the long term, the Government's policy is to work towards a more coherent system of benefits for disabled people. And with this in mind we are using the resources we have at our disposal to remove anomalies in the present system and increase the effectiveness of existing benefits. For example, mobility allowance has been increased by a massive 90 per cent. since we took office in May 1979. In relation to mobility allowance, the entitlement to it, as your Lordships will be aware, is based on a person's inability or virtual inability to walk, not on the existence of a particular illness or disability. If it were made payable to particular groups, it would radically alter the nature of the benefit. A blind person may qualify for mobility allowance if he fulfils the medical criteria of inability, or virtual inability, to walk. The noble Baroness—indeed, all those who have spoken—referred to the Christine Lees case. We have not yet had an opportunity fully to study the transcripts of the judgment. The adjudicating authorities for the allowance consider the facts in each individual case, but it seems clear that some blind people, who have other disabilities which affect their walking ability, will continue to qualify. On that case, I do not think I can say any more.
Last year we were able to remove the "invalidity trap" which prevented thousands of chronically sick and disabled people from ever qualifying for the higher, long-term rate of supplementary benefit. The current Health and Social Security Bill at present in another place includes proposals for the introduction of a new benefit, called severe disablement allowance, which will replace-non-contributory invalidity pension from November 1984. This will result initially in an extra 20,000 disabled people, including a number of blind and partially-sighted married women, being able to qualify for benefit for the first time, at an additional cost of £20 million a year. I would point out that, in common with other disabled people, blind people who receive housing benefit allowance have their needs allowance set 11½ per cent. higher than other.
The noble Lord, Lord Banks, and the noble Baroness referred to the additional £1.25 a week payable to a blind person in receipt of supplementary benefit. The noble Baroness asked what would be the value of this addition now if it had ben increased in line with the rise in prices. I understand that this benefit has been as it stands for the last 22 years, or thereabouts, and I have to say that the value would be just over £8 now. The additional benefit cost would be in the region of £11 million a year. On the taxation front, we were able, as the noble Lord, Lord Banks, said, to double the tax allowance for the blind to £360 a year. It is worth about £2 a week to those who pay tax at the basic rate. Of course, tax matters are for my right

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honourable friend the Chancellor of the Exchequer and not for me; but, in relation to the question of benefit (which the noble Lord, Lord Banks, raised) of £108 per year, which would be the amount after tax of the figure to which I referred, the cost, roughly, would be about £14 million gross. I cannot give a more accurate figure. That is roughly what the figure would be.
Provision for the blind is not just about cash benefits. The services available to them play a great part in helping them to live their daily lives, and I should like again to pay my tribute to the many people who play such an important role in this respect. The problem here is the apparent variation in the level of service from one area to another. To try to resolve it, officials recently have conducted a series of fact-finding visits to authorities involving health and personal social services as well as the voluntary bodies. When we have completed an analysis of the findings, we hope to be better placed to assess the actual needs and level of service. Meanwhile, the indications are that the visits themselves had a beneficial effect locally, in that that they brought ophthalmological and social work service staff round a single table where they could exchange views and information. We hope that this will prove useful and help to iron out difficulties in communications between the various services. We hope to build on this once we have the complete picture.
The noble Lord, Lord Banks, asked whether I could confirm the estimate of 59,000 people who get no state help: that is, no supplementary benefit. I am afraid I cannot give the figure. The noble Lord, Lord Kilmarnock, raised this as well. He is probably right when he says that the people who do not benefit from supplementary benefit or tax allowance are pensioners on small incomes or those who work on very low pay. There are, I am afraid, no definite figures for evidence on this matter.
The noble Baroness, Lady Jeger, asked about guide dogs. I can tell her that, so far as I know, licences for guide dogs are free. I am not aware of any assistance available for feeding guide dogs or for vets' fees. If there are any particular allowances—and I do not think there are—I shall let her know.
The noble Lord, Lord Banks, raised an interesting point and asked me a great many additional questions which included a great many figures. I have tried to answer as many as I possibly can, but I assure him that, if there are any which I have failed to answer or any asked by the noble Baroness or the noble Lord, Lord Kilmarnock, I shall write to them. In conclusion, let me stress again the sympathy and concern the Government have for blind people. We have taken the initiative on the services side with worthwhile results. I only regret that the stringent financial situation does not enable me to respond more positively—which is what the noble Lord, Lord Banks, asked—to the case he made for a special benefit. But, as in all matters to do with social security, the Government will keep all these things under review.
Lord Kilmarnock: My Lords, will the noble Lord look carefully at my proposal for an addition under the mobility allowance, bring it to the attention of his right
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honourable friend and let me have a response on that particular point?
Lord Glenarthur: My Lords, of course.

Tourism (Overseas Promotion) (Scotland) Bill [H.L.]
Returned from the Commons agreed to with a privilege amendment; the amendment was considered and agreed to.
House adjourned at twenty-six minutes past eight o'clock.

  EXPERIMENTS ON LIVE ANIMALS
  EXPERIMENTS ON LIVE ANIMALS
  BADGERS: INFECTED FEMALES AND CUBS
  BADGERS: INFECTED FEMALES AND CUBS
  METROPOLITAN COUNTY COUNCILS
  METROPOLITAN COUNTY COUNCILS
  FUEL SUBSIDIES: INDUSTRIAL COMPETITIVENESS
  FUEL SUBSIDIES: INDUSTRIAL COMPETITIVENESS
  NORTHERN IRELAND: EXPENDITURE ALLOCATIONS
  NORTHERN IRELAND: EXPENDITURE ALLOCATIONS