Sitting of 23 January 1984

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

    Urban Programme
    Mr. Hoosonasked the Secretary of State for Wales what was the average cost per job created under the urban programme in Wales in 1983–84.
    The Minister of State, Welsh Office (Mr. John Stradling Thomas): The urban programme is not specifically aimed at job creation and no comprehensive figure is available. However, local authorities have estimated that some 2,700 jobs would be created or safeguarded by the new schemes costing £11·15 million introduced in 1983–84. Of course, these schemes could lead to many more jobs being created indirectly.
    Mr. Hooson: Does not that sum of £11 million translate into about £2,000 or £3,000 per potential job, and is not that figure encouraging when compared with the estimate by the Department of Trade and Industry of about £35,000 per job in assisted area schemes? Does not that show that there should be increased emphasis on future urban aid programmes?
    Mr. Stradling Thomas: I agree with my hon. Friend on that point. The urban programme and urban development grants are doing an extremely effective job.
    Mr. Ron Davies: Is there not a real likelihood that this year local authorities will be unable to take up their full allocations of urban aid because of the constraints imposed by the Government on their expenditure? If the Secretary of State wishes to encourage the further involvement of local authorities in the urban aid programme, should he not consider exempting expenditure on the scheme's general administration and revenue contributions to specific programmes from overall expenditure limits imposed on them?
    Mr. Stradling Thomas: I cannot give an undertaking to do that. We have been informed by Welsh local authorities that schemes approved in 1983–84 involving £1·8 million did not proceed this year as a result of the voluntary moratorium on capital expenditure. Those schemes will now start in 1984–85, with the appropriate exenditure being included in the local authorities, urban programme capital allocation.
    Mr. loan Evans: As more than 100,000 manufacturing jobs in Wales have been lost since the Conservative party
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    took office, what positive steps do the Government intend to take? As well as urban aid, will they consider restoring regional assistance to those areas that have been denied it by the Government?
    Mr. Stradling Thomas: As the hon. Gentleman will know, a review of regional policy is going on. I cannot at this stage predict the outcome.

    Selective Financial Assistance Applications
    Mr. Gwilym Jonesasked the Secretary of State for Wales what was the number of selective financial assistance applications in Wales for 1981–82 and 1982–83.
    The Secretary of State for Wales (Mr. Nicholas Edwards): There were 234 applications under section 7 of the Industrial Development Act in 1981–82 and 311 in the last financial year.
    Mr. Jones: I am grateful to my right hon. Friend for that answer, as I feel that it underlines the increasing level of investment activity in Wales. However, can my right hon. Friend give us any intimation of the level of applications for financial assistance in the current financial year?
    Mr. Edwards: There is a rising tide of applications. In the first nine months of the current financial year the number has been at a record level, with 270 applications promising to create about 13,000 jobs and to safeguard 8,000 jobs. The level of acceptances—which is perhaps the most immediate and important factor—is also rising steadily.
    Mr. Wigley: Is the Secretary of State aware that the figures that he gave to me in an answer shortly before Christmas showed that only 1 per cent. of industrial grants paid in Wales in the past two years went to the county of Gwynedd? What is the cause of that failure, and what is the right hon. Gentleman doing to redress the balance?
    Mr. Edwards: We deal with applications from industrial companies, and I respond to specific applications. It is not perhaps surprising that many of the applications—particularly in this phase of the recovery—should come from some of the main industrial areas that are particularly attractive to the new technologies. However, I assure the hon. Gentleman that an application from his area receives the same attention as an application from one of the principal industrial locations.

    Milk (EC Negotiations)
    Mr. Harveyasked the Secretary of State for Wales if he will ensure that in the continuing European Economic Community negotiations the interests of Welsh milk producers are safeguarded.
    Mr. Nicholas Edwards: We shall be seeking to safeguard the overall British interest, including that of Welsh milk producers, and will oppose any measures which discriminate against the United Kingdom.
    Mr. Harvey: I am grateful to my right hon. Friend for that reply. Is he aware of the critical state in which not only Welsh hill cow producers but Welsh hill sheep farmers have been left because of the suspension of grants following the failure to reach agreement by the Council of Ministers in Brussels?
    Mr. Edwards: It is an exaggeration to say that farmers have been left in a critical state. Normally, almost no grants are paid in January. The applications are being processed, and we normally expect grants to flow at an increasing level in February. I understand the great concern expressed by the agriculture unions and others at the unfortunate delay in agreeing that grants can be paid. We are urgently investigating the legal implications with the relevant authorities in Brussels. I hope that we shall soon reach a settlement on this important matter.
    Mr. Alex Carlile: Is the Secretary of State aware that I have received two representations this morning on the question asked by the hon. Member for Clwyd, South-West (Mr. Harvey)? Some small farmers are being caused severe financial embarrassment by the freezing of grants? Will the Secretary of State take temporary steps to alleviate the financial hardship suffered as a result of the freezing of grants?
    Mr. Edwards: We pressed hard for roll-over provisions at the last meeting of Agriculture Ministers, and we shall do so again at the next meeting. In the meantime, we have sent officials to Brussels to try to reach agreement on the legal implications. As soon as the legal matters are settled, we shall. of course, try to meet the point made by the hon. Gentleman.
    Mr. Mark Robinson: Will my right hon. Friend explore the possibilities of obtaining funds from Europe for the Welsh plant breeding station?
    Mr. Edwards: I note the suggestion, although that is not my direct ministerial responsibility. Some of the suggestions about the threat to the plant breeding station have been greatly exaggerated. There is a firm future for that institution. Its operations have just been extended by the acquisition of an upland farm in Powys and by work on the uplands.
    Mr. Roy Hughes: As well as safeguarding the interests of Welsh milk producers, will the Secretary of State ensure that the interests of Welsh steel workers are safeguarded? Will he tell this organisation—
    Mr. Speaker: Order. That is well wide of the question.
    Sir Raymond Gower: I acknowledge the efforts being made to reach agreement, but will my right hon. Friend take account of the particular dependence upon milk production for their income by a large proportion of Welsh farmers?
    Mr. Edwards: Of course. My hon. Friend will understand that he need not tell me, the right hon. Member for Pembroke, about the importance of the milk sector. Nevertheless, there must be adjustments and restraints on prices if the Community's problems are to be resolved. One of our principal objectives is to ensure that any changes are on a non-discriminatrory basis and that Welsh producers are fairly treated in relation to producers in Europe as a whole.
    Mr. Ray Powell: May I remind the right hon. Member for Pembroke (Mr. Edwards) that there is a problem about the amount of milk imports allowed into the United Kingdom? If the Government are not prepared to do anything about it, I suggest that the Secretary of State should read the article in today's Daily Mirror about the amount of milk that is expected to come into the United Kingdom from Denmark, Ireland, Belgium and Germany.
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    Is he aware that we have opened the flood gates to milk imports? Does he accept that that will affect milk producers and doorstep deliveries, with the loss of thousands of jobs? What does the Secretary of State propose to do to alter that situation?
    Mr. Edwards: That is a gross exaggeration of the position. So far the shipments of UHT milk have been small. We are insisting on the strictest safeguards on health grounds and limiting the number of ports through which shipments can be made. It is for consumers to decide whether they wish to buy their milk in supermarkets or to have it delivered to the doorstep. There is no evidence that they will make a substantial switch to UHT milk, which has clear disadvantages.

    Mentally Ill Persons
    Mr. D. E. Thomasasked the Secretary of State for Wales if he is satisfied with the services for mentally ill persons discharged from mental health hospitals and units in Wales; and if he will make a statement.
    The Under-Secretary of State for Wales (Mr. Wyn Roberts): The Welsh Office has consistently urged the health and local authorities which are responsible to develop joint strategies to enable long stay patients to leave hospital and receive more appropriate care in their own locations. We have provided record levels of joint finance and psychiatric reserve allocations this year and have designated mentally ill people as a priority group to benefit from the reinvestment of some £2·7 million of efficiency savings in hospital and community services in the coming financial year.
    Mr. Thomas: Will the Welsh Office investigate the growth of places in private homes for the mentally ill which are located only in Clwyd and Gwynedd? Will the hon. Gentleman ensure that residents within those homes are treated properly and that some of the cases recently exposed on the Welsh language media should be dealt with?
    Mr. Roberts: It is dangerous to exaggerate incidents based on one's knowledge of reports in the press. Only about 3 per cent. of those discharged go to local authority, voluntary or private residential care. As regards private residential care, the Health and Social Services and Social Security Adjudications Act 1983 should be helpful as it insists on registration and inspection of private homes.
    Sir Anthony Meyer: Does my hon. Friend accept that this admirable policy must be supported by public opinion? There is a risk that public opinion could be alienated if stupid decisions are made, such as the giving of planning permission for the opening of a home for the mentally handicapped in a semi-detached house which has a fire escape that goes through the house next door in which there are young people who might be alarmed at such a position.
    Mr. Roberts: I agree that the public must be educated to accept that care in the community for the mentally ill and mentally handicapped, where appropriate, is the best form of care for them. As to their settlement in the community, I shall not comment on any specific planning permission that has been given since this matter could come up on appeal to my right hon. Friend.
    Mr. Ioan Evans: The hon. Gentleman said that he is concerned about the welfare of the mantally ill and

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    mentally handicapped. Is there not a need also to maintain local authority personal social services? Should we not avoid cuts in those services caused by the Government's constrictions on the rates? Does the hon. Gentleman agree that we need to develop community psychiatric nursing services to ensure effective after-care?
    Mr. Roberts: In fact, expenditure on personal social services is 7 per cent. more than would be needed to keep pace with inflation, compared with 1979.

    Chatsworth House Hospital, Prestatyn
    Mr. Raffanasked the Secretary of State for Wales if he will seek an urgent meeting with Clwyd health authority to discuss the future of Chatsworth house hospital, Prestatyn.
    Mr. Wyn Roberts: No, Sir. Clwyd health authority's proposals in respect of Chatsworth house form part of wider rationalisation proposals upon which the authority have undertaken public consultation. Should local agreement not be reached and the authority wish to proceed, the proposals will have to be submitted to my right hon. Friend the Secretary of State for his consideration, and it would not be appropriate to intervene at this stage.
    Mr. Raffan: As it is clear that local agreement will not be reached and that proposals will be submitted to the Secretary of State, will my hon. Friend bear in mind that, should Chatsworth house be closed, Prestatyn, the largest of the four towns in my constituency, will be the only one without any hospital facilities whatever? Is my hon. Friend aware that the proposed closure is supported by members of the Labour party, including the former election agent of the hon. Member for Alyn and Deeside (Mr. Jones)? Does my hon. Friend agree that this matter exposes the hypocrisy of the Opposition's position on the National Health Service?
    Mr. Roberts: I hope that everyone who considers the authority's rationalisation proposals will take a sensible, non-political view and judge the proposals on their merits. The provision of a hospital for Prestatyn is a matter for the health authority. It has tentatively programmed a hospital for 1992, but detailed planning has not yet commenced.

    Perinatal and Infant Mortality
    Mr. Gareth Wardellasked the Secretary of State for Wales, pursuant to the reply to the hon. Member for Gower on 12 December, Official Report, c. 374, when the perinatal and infant mortality rates for each social class where babies were born into married households for each of the counties of Wales for the year 1981–82 will be available.
    Mr. Wyn Roberts: Within the next three months.
    Mr. Wardell: Does the Minister accept—a simple Yes will do—that the large and continuing gap in infant and perinatal mortality rates between socio-economic groups 1 and 5 are, in many counties in Wales. the direct result of the Government's stubborn refusal to adopt an anti-poverty strategy?
    Mr. Roberts: I do not agree with the hon. Gentleman, who has misunderstood the position altogether. In 1982, the numbers of stillbirths, deaths in the first week and
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    infant deaths were the lowest on record in Wales. Perinatal and infant mortality rates in Wales were below those for both England and Scotland. The figures have been reflected at county level. For example, in West Glamorgan—which includes the hon. Gentleman's constituency—infant mortality was cut by almost half between 1979 and 1982.
    The Government are aware of the social class problem, and they accept that there is a higher rate of perinatal and infant mortality in social classes 4 and 5. That is why we have taken the perinatal initiative that I described in detail during the last sitting of the Welsh Grand Committee.
    Dr. Roger Thomas: When does the Minister expect to have average figures for the whole of Wales, including the whole of the socio-economic range, on a par with the figures from that centre of excellence, the Nevill Hall hospital at Abergavenny, which are as good as any throughout Europe? Are there not tremendous discrepancies between the excellent figures in one part of Wales and the damning figures in other parts?
    Mr. Roberts: We accept that there is a difference in the incidence of those regrettable deaths in different parts of Wales. Indeed, that is the reason behind our perinatal initiative. We have appointed a Welsh Office medical officer and an expert midwife from the National Health Service to study and examine the causes of each death. We hope that their studies during the next two years will highlight the deficiencies.

    Secondary Schools
    Sir Raymond Gowerasked the Secretary of State for Wales how many pupils were in secondary schools in Wales (a) in 1979 and (b) at the latest convenient date; and what were the respective pupil to teacher ratios on those dates.
    Mr. John Stradling Thomas: In January 1979 there were 241,662 pupils in maintained secondary schools in Wales. The corresponding figure for January 1983 was 235,625. The pupil to teacher ratios were 16·8:1 and 16·5:1, respectively.
    Sir Raymond Gower: Are not those figures somewhat at variance with the exaggerated dismay that has been expressed about educational trends, including secondary schools, in Wales?
    Mr. Stradling Thomas: The pupil-teacher ratio figures are proving satisfactory, but they are only one of the yardsticks that are used to judge how well our education system is working.
    Mr. Ron Davies: Does the Minister accept that Wales has lost more than 400 school teachers during the past 12 months? Is he aware that in Mid Glamorgan there are 364 classes with a pupil-teacher ratio in excess of 31:1? Will the Minister give serious consideration to making special funds available to Mid Glamorgan to tackle that appalling problem?
    Mr. Stradling Thomas: I understand that the Mid Glamorgan county council is planning to reduce its teacher force in 1984–85 by about 180, of which 44 posts represent a response to anticipated falls in schools rolls. The pupil-teacher ratio in Mid Glamorgan secondary schools in September 1983 was 16·3: I compared with 17·5:1 a year earlier and 16·:1 in January 1979. It is for individual local

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    authorities to decide how to allocate their resources, but there can be no question of relaxing the pressure to contain public expenditure.
    Mr. D. E. Thomas: Should not local authorities in Wales use the opportunity that is provided by falling rolls to diversify the curriculum and ensure that the so-called bottom 40 per cent. are provided for in schools in Wales rather than to reduce teacher numbers?
    Mr. Stradling Thomas: As the House will be aware, the Government's objective—my right hon. Friend the Secretary of State for Education and Science made an interesting speech recently on this topic—is to diversify and to improve standards and achievement generally. I am sure that my right hon. Friend's speech will be the subject of much consultation in future.

    Rate Support Grant
    Mr. Ioan Evansasked the Secretary of State for Wales what representation he has received regarding the rate support grant for Wales.
    Mr. Wigleyasked the Secretary of State for Wales what representations he has had from local authorities in Wales concerning the level of rate support grants for 1984–85 in Wales.
    Mr. Nicholas Edwards: Representations have been received from the Welsh Counties Committee, the Committee of Welsh District Councils, 22 individual local authorities in Wales and one other organisation.
    Mr. Evans: Has the Secretary of State read the letter from the Association of District Councils in Wales, in which it argues that the settlement is unreasonable and grossly unfair to district councils as it will result in the loss of almost £10 million of block grant, or a 7 per cent. reduction compared with inflation of 5 per cent? Does the Minister agree that the Welsh settlement illustrates that central Government are completely unable to fix targets for district councils, although they will be making provision to do so in the Rates Bill?
    Mr. Edwards: Very few people are now repeating the exaggerated forecasts of likely rate increases that were made by the district councils when the settlement was first made. Provision for the current year is 3·8 per cent. more than was included in this year's budgets. Current provision is 4·8 per cent. in excess of this year's current expenditure provision. These are substantial increases. Local authorities will undoubtedly face some difficult decisions, but some of the language that is being used about them is greatly exaggerated.
    Mr. Wigley: If the concept of grant-related expenditure has any meaning, is it not ridiculous to penalise authorities that are spending below their GRE though above target?
    Mr. Edwards: Local authorities arrived at below-GRE spending provision because they believed they were meeting the requirements of their areas. The local authorities were agreed—I consulted them on this issue — that we should not adjust the target basis to take greater account of that factor this year. It was on their insistence that we did not alter the factors on the lines suggested by the hon. Gentleman.

    Rate Capping, Gwent
    Mr. Roy Hughesasked the Secretary of State for Wales how many representations he has received from local authorities in Gwent concerning the Government's proposals on rate capping; what reply he has sent; and if he will make a statement.
    Mr. Nicholas Edwards: I have received representations from five local authorities in Gwent. In responding I made it clear that the Government are firmly committed to curbing the excessive spending of a small minority of local authorities by selective action, and that I trust that the reserve general power we are seeking will not need to be implemented.
    Mr. Hughes: Does the right hon. Gentleman appreciate that the solidly Conservative-controlled urban district council of Monmouth, which is represented by the Minister of State, Welsh Office, has described the measure as unnecessary and unjustified and as attacking the very fabric of local democracy? Bearing in mind that a vital principle is involved, are Welsh Office Ministers now considering their position, or are the perks too attractive for them to permit that to happen?
    Mr. Edwards: I hope that the measure will not be necessary in Wales. If Welsh local authorities continue to spend at reasonable levels, on the lines that they have adopted in the past, it will not be necessary to use the selective powers.
    Mr. Gwilym Jones: What representations has the Secretary of State received from ratepayers who have to bear the burden? Does he agree that at least equal consideration should be given to such representations about increases which have been out of all proportion and have done more than their fair share to cause job losses?
    Mr. Edwards: There is no doubt that the public and ratepayers generally have far less sympathy with the case advocated by local government representatives than one might gather from the views expressed by the Opposition.
    Dr. Marek: If the Secretary of State believes that local authority budgeting in Wales has been and will continue to be reasonable, why does he seek the special powers in the rate-capping legislation?
    Mr. Edwards: Ratepayers are entitled to the assurance that protection is available to them. Moreover, I hope that the existence of such powers will encourage local authorities to pursue a sensible course so that we do not need to use the powers.
    Mr. Barry Jones: Will the Secretary of State accept my plea that Wales should be exempt from that draconian measure, which is an insult to local government leadership in Wales? Will he name one irresponsible local authority in Wales? Why must he take a legislative sledgehammer to strip Wales of its centuries-old freedoms?
    Mr. Edwards: The answer is no, Sir. If I am right in thinking that Welsh local authorities will budget sensibly and continue along the lines that they have followed so far, there need be no question of their suffering the penalties of which the hon. Gentleman complains. He is making a great song and dance about very little.

    Cardiff (Job Creation)
    Mr. Terlezkiasked the Secretary of State for Wales how many new jobs were created in Cardiff in the most recent 12 month period for which figures are available.
    Mr. Nicholas Edwards: Comprehensive information is not available, particularly about the continuing increase in the number of jobs in tourism and the retail and service sector. However, for the period 1 October 1982 to 30 September 1983, projects for which offers of selective financial assistance have been accepted or which were allocated Government factories in the Cardiff travel-to-work area promise to provide 1,300 jobs. In addition, more jobs may be expected to arise in the manufacture and service sectors as a result of urban development grant.
    Mr. Terlezki: I am most grateful to my right hon. Friend and most appreciative of his reply. It is encouraging to know that unemployment in Cardiff is falling, as I dare say will continue to be the case in future years. I am most interested, as no doubt is the whole House, in the south Butetown redevelopment scheme. How quickly will my right hon. Friend be able to approve the scheme, how many jobs will be created when it gets under way and how many jobs will subsequently be created when the scheme is completed?
    Mr. Edwards: It is a matter of great satisfaction that the initiative that I asked Michael Roberts to prepare in the autumn of 1982, and which I announced to the House just under a year ago, has made such satisfactory progress and that a proposal is now coming forward from the local authorities. I shall deal with the application for UDG as quickly as I can and I do not expect any great delay. It would not be right to make a job estimate at present, but a £50 million initial development in the area will clearly provide great scope for job creation.
    Mr. Allan Rogers: Will the right hon. Gentleman undertake the much easier ministerial function of telling us how many jobs have been lost in Cardiff in the past year and in south Wales generally since the Government came to power in 1979?
    Mr. Edwards: The unemployment figures are well known and it is clear that a significant number of jobs have been lost. Nevertheless, it is, and should be, a matter for satisfaction that there is a rising tide of new job creation, that an all-time record of more than 2 million sq ft of factory space in Government factories will have been allocated this year, that the number of selective financial assistance cases is rising and that a considerable number of new major projects, including inward investment projects, have already been announced.

    Labour Statistics
    Mr. Ray Powellasked the Secretary of State for Wales what is the total number of unemployed for more than 52 weeks in Wales and the corresponding number in 1979.
    Mr. Nicholas Edwards: In October 1983, 64,917 claimants in Wales had been unemployed for over 52 weeks. In October 1979, the number of people registered in the same category was 22,819.
    Mr. Powell: I view with concern the complacency with which the Secretary of State gives these replies. Is he
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    aware of the degradation, despair and mental torture of people who are unemployed for long periods? Does he realise that the only hope that people in Wales who have been out of work for more than 12 months have had from this Government was the hope that they would get a job under the community programme, but that the number of places on that programme are now being cut back? Does he realise that in the Ogwr borough area alone one scheme of 64 jobs has been cut, 800 have gone in mid-Glamorgan, and even more in Wales generally? What has the Secretary of State been doing in the Cabinet to protect some of the jobs that we thought would go to the long-term unemployed in Wales?
    Mr. Edwards: We have recently allocated a further £15 million for Great Britain to enable the MSC to build up the community programme to the 130,000 filled places by the spring of 1984 that was previously planned. We are spending about £1 billion on the employment programme generally, and the job-creating activities that I mentioned earlier are of supreme importance for the future of people who are at present unemployed.
    Mr. Raffan: Did my right hon. Friend hear the comments on television last night of Mr. Peter Summers of the Deeside enterprise trust, that the trust had almost reached the half-way mark in replacing the 8,000 jobs lost in the Shotton closure? Does my right hon. Friend agree that that tremendous achievement in job creation lies in the face of the preachers of doom on the Opposition Benches?
    Mr. Edwards: I agree, too, that enterprise trusts are doing a very good job. I am sure that my hon. Friend will be pleased to know that the Angus Chemical Company of Illinois and Isochem of France today announced that, subject to the satisfactory conclusion of negotiations, they intend to build a speciality chemical manufacturing plant on a joint venture basis on the Deeside industrial park, and that 250 jobs will be created. I visited the Angus Chemical Company in Chicago in September, and I am particularly pleased about the prospect of that development.
    Mr. Geraint Howells: What advice can the Secretary of State for Wales give to young people in Wales at die beginning of 1984 as what to do during the next few months, particularly those who have been unemployed since they left school?
    Mr. Edwards: It is a matter of great satisfaction that the guarantee given to school leavers has been substantially met again in the current year. Of course, projects such as I have just announced will provide the jobs in the future for those who are now leaving school. Another announcement is being made today by an established firm, A.B. Electronics, of a major expansion of two projects, which are likely to produce several hundred additional jobs. Firms such as Angus Chemicals and B.B. Electronics will provide the prospects that we all want for our young people.
    Mr. Barry Jones: I sincerely welcome the right hon. Gentleman's announcement about jobs in north-east Wales, but I remind him that under his regime Wales has lost 103,000 manufacturing jobs, including 30,000 steel redundancies, 2,500 coal redundancies and 4,000 textile job losses? Does he further understand that, following the last count, the right hon. Gentleman now presides over

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    12,000 jobless 18-year-olds and 9,000 jobless 17-yearolds? What will he do urgently to find jobs for young people in Wales who are out of work?
    Mr. Edwards: I have already listed a good many of the things that we are doing. It is surely a matter of satisfaction that the job-creating prospects of the SFA applications that I mentioned has reached the best figure since 1974. I am also delighted that our new inward investment operation, WINvest, which has handled 186 company visits in Wales since it was established on 1 April, has been able to secure another 16 new overseas projects and seven expansion projects by existing overseas companies. Such work, rather than the specious and alarmist talk that is all that we hear from the Opposition Benches will provide jobs for the future. However, I am glad to see that a certain new realism is affecting the Leader of the Opposition, who has apparently abandoned his previous targets for job creation.
    Mr. Ron Daviesasked the Secretary of State for Wales what action he proposes to reduce the level of unemployment in Wales amongst 16 to 18-year-olds by the end of 1984.
    Mr. Nicholas Edwards: The Government will be providing around £1 billion next year on schemes aimed specifically at improving the employment prospects of young people.
    Mr. Davies: In the light of the good news that the Secretary of State has just given us, will he give an undertaking that the level of unemployment among 16 to 18-year-olds will be lower at the end of 1984 than at the beginning?
    Mr. Edwards: The hon. Member knows perfectly well that anyone who gave such an undertaking would be—
    Mr. Ioan Evans: Conservative?
    Mr. Edwards: —wildly irresponsible. The fact that the Labour party made such promises at the last election was one of the reasons why its economic policies were discarded by the electorate.

  CHURCH COMMISSIONERS

    Mepal Churchyard (Tombstone)
    Mr. Freudasked the hon. Member for Wokingham, as representing the Church Commissioners, pursuant to his answer to the hon. Member for Cambridgeshire North-East on 31 October, Official Report, c. 618, if he will make a statement on the application to erect a white marble tombstone in Mepal churchyard.
    The Second Church Estates Commissioner, representing Church Commissioners (Sir William van Straubenzee): As I have explained by letter to the hon. Gentleman, applications for the erection of tombstones are not matters for the Commissioners. They are made to the incumbent, who must act within any regulations issued by the consistory court of the diocese and to which an appeal may be made.
    Mr. Freud: While I am grateful to the hon. Gentleman for that reply, would he not accept that whereas, in the long term, environmental factors must be given priority, in the short term the Church Commissioners should be
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    rather more sensitive towards the heartfelt wishes of the deceased, especially in a case such as this? The churchyard contains many white marble tombstones, some of them commemorating members of the same generation of the same family as the person for whom the application has been refused.
    Sir William van Straubenzee: I must be careful to avoid any comment on that case, which is now before the consistory court and is therefore sub judice. Furthermore, with due respect to the hon. Gentleman, I must repeat that the Church Commissioners are not responsible for the erection of tombstones.

    Ecclesiastical Buildings
    Mr. Murphyasked the hon. Member for Wokingham, as representing the Church Commissioners. how many ecclesiastical buildings are currently classified as listed.
    Sir William van Straubenzee: The Church Commissioners are not themselves responsible for maintaining separate lists of all listed ecclesiastical buildings. Such buildings are, however, included, though not specifically identified, in the full lists prepared and maintained by my right hon. Friend the Secretary of State for the Environment.
    Mr. Murphy: Is my hon. Friend satisfied that in consultations between the Department of the Environment and the Church Commissioners over the possible listing of ecclesiastical buildings, a fair balance is struck between the safeguarding of the architectural heritage and the ability to finance preservation?
    Sir William van Straubenzee: I can answer only in respect of buildings for which the Church Commissioners are responsible, and they are not responsible for the vast majority of churches. The Church Commissioners would certainly not wish to receive more favourable treatment than any other owner. We are always notified, as are others, of the broad lists of listed buildings.
    Sir John Biggs-Davison: Can my hon. Friend extend his concern to some of the contents of those buildings? I am thinking of the selling of communion plate and other sacred objects given or bequeathed by pious benefactors. This is causing great concern, particularly on the eve of Christian heritage year.
    Sir William van Straubenzee: I do not wish to be unhelpful, but I must limit myself strictly to buildings for which the Church Commissioners are responsible. If I do not do so, more questions will appear on the Order Paper. In relation to those buildings alone, there are very stringent regulations. I suspect that my hon. Friend is referring to churches for which the Church Commissioners are not answerable.
    Mr. Chapman: With regard to the highest graded buildings of architectural or historical interest in the ownership of the Church Commissioners or the Church of England, is it not a fact that only one, to date, has been demolished? Is not the fact that all the others have been maintained in one form or another a matter for commendation of the Church Commissioners?
    Sir William van Straubenzee: I am much obliged to my hon. Friend. That is the position with regard to those

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    buildings for which the Commissioners are responsible, which have been declared redundant or which have passed through their hands. I hope that that shows the careful stewardship of the Church Commissioners.

  HOUSE OF COMMONS

    Industrial Relations
    Mr. Canavanasked the hon. Member for Berwick-upon-Tweed, as representing the House of Commons Commission, what new initiatives the Commission propose to improve the state of industrial relations for employees for whom the Commission is responsible.
    Mr. Beith: A number of issues remain under discussion between management and staff side, and the Commission is hopeful that they will be resolved in due course.
    Mr. Canavan: Would it not help to improve industrial relations if existing staff were given first consideration when vacancies arise? Is the hon. Gentleman aware that there have been occasions when vacancies have been advertised externally, external applicants have been interviewed at considerable expense, and the post was eventually given to an internal applicant, anyway? Is not that a deplorable waste of time and money?
    Mr. Beith: The Commission is concerned that members of staff should have the full opportunity to compete for internal appointments, and has gone to considerable lengths to satisfy itself that the staff of the House are given a full and free opportunity to compete for senior posts. However, the Commission would be criticised if it did not, in appropriate circumstances, ensure that open competition took place.
    Mr. Greenway: For how many posts does the Commission have responsibility in terms of appointments and services?
    Mr. Beith: I should require notice of that question.
    Mr. Speaker: We go back to question No. 14.
    Mr. Ray Powell: On a point of order, Mr. Speaker. Should we not continue supplementary questions on question No. 13 because no supplementary questions were called on a very important matter, the unemployment of 16 to 18-year-olds?
    Mr. Speaker: Order. That is the luck of the draw, but we are back on Welsh questions now.

  WALES

    House Building
    Mr. Mark Robinsonasked the Secretary of State for Wales how many private house building starts have been made in Wales in the latest available year; and how this compares with the previous year.
    Mr. Wyn Roberts: Private house building starts during 1983 in Wales are provisionally estimated at 6,235. That is an increase of some 14 per cent. over 1982 starts.
    Mr. Robinson: I am sure that hon. Members on both sides of the House will welcome that significant increase. Does my hon. Friend agree that it shows a welcome input to the construction industry in Wales?
    Mr. Roberts: I agree with my hon. Friend. The figures are most encouraging, particularly because this is tie third year that there has been an increase. Private starts are now 40 per cent. higher than in 1981.
    Mr. Coleman: How do those figures compare with 1979?
    Mr. Roberts: I should require notice of that question.
    Mr. loan Evans: Will the Under-Secretary help the House by publishing the figures under the Labour Government and this Government, since they were elected, for both private and public starts, so that we can make a true comparison?
    Mr. Roberts: The figures are available, but I might help the hon. Gentleman by saying that in some years, certainly 1977 and 1978, public sector starts under the Labour Government were not as high as the number of private sector starts that I have just given.

    Local Authority Expenditure
    Dr. Marekasked the Secretary of State for Wales how many authorities are planning to spend in 1983–84 at or below their revenue expenditure targets where these targets are less than the grant-related expenditure assessment.
    Mr. Nicholas Edwards: Twenty.
    Dr. Marek: Does not that show that the authorities that have been hardest hit are those that have continued to exercise restraint in their budgets? Is it not time that the Secretary of State realised that and accepted that targets have historically been based on past spending, and it not time that he freed those authorities from any grant hold-back or any penalties if their spending is below the grant-related expenditure assessment?
    Mr. Edwards: No, Sir. I shall cite the example of Wrexham, the hon. Gentleman's constituency, to provide the reason why I say that. The reason why there has been a reduction between the 1983–84 budget and the 1984–85 target for Wrexham is that it has not increased its average council house rent by the recommended 85p per week. Indeed, it has refused to increase the rent at all. The cash reduction can therefore be blamed almost entirely on the authority's unwillingness to recognise the clear need to bring council house rents more into line with those charged by other district authorities in Wales.
    Mr. Rogers: Can the Secretary of State inform the House—and, as my hon. Friend said earlier, a simple yes will do—whether the cost of public housing per unit in Wales is less than the cost of public housing in the Falkland Islands?
    Mr. Edwards: To receive an answer to that question the hon. Gentleman would have put down a separate question. He will know that my right hon. Friend the Secretary of State for Defence has already stated that he will be reviewing decisions about certain housing plans for the Falklands.

  ARTS

    Arts Council Grant
    Mr. Fisherasked the Under-Secretary of State answering in respect of the Arts what representations the Minister for the Arts has received in the subject of the Arts Council's grant for 1984–85.
    The Under-Secretary of State for the Environment (Mr. William Waldegrave): My noble Friend has received a number of representations, both before and after the announcement of grant for 1984–85.
    Mr. Fisher: Would the Under-Secretary of State confirm that the representations of the regional arts associations show that they are in despair over the Government's policy, which once again ignores the regional case? When are the Government going to end their anti-regional bias in arts funding?
    Mr. Waldegrave: I have to say that I have answered this question from the hon. Member previously. The balance of spending, and the Arts Council's decisions on spending on the regions versus London and the south-east, have steadily moved in favour of the regions over the past 20 years. These decisions, which continue in the same direction, must be for the Arts Council to take.
    Mr. Jessel: As the Arts Council budget has been increased by £8 million from £92 million to £100 million, which is an increase of approximately 8 per cent. at a time of 5 per cent. inflation—which is a 3 per cent. increase in real terms—may I ask whether the Arts Council is pleased?
    Mr. Waldegrave: I can say that the answer to that is yes. I think that the House and all those who are concerned about the arts, particularly publicly funded arts, should congratulate my noble Friend on the settlement that he has achieved this year.
    Mr. Campbell-Savours: Will the Minister ensure that the Royal Shakespeare Company's regional tours are fully funded? Is he aware that the most recent tour of the Royal Shakespeare Company regional organisation to my constituency in Workington was a sell-out, a resounding success, and will he ensure that it is always supported with whatever finance it needs in the future so that we in the regions are enabled to enjoy that which would otherwise be available only in parts of London?
    Mr. Waldegrave: No one doubts the importance of what the hon. Member has said, but I must say, as to the purpose of the Arts Council, that the decisions on how much money to spend on which aspects must be for the Arts Council.
    Mr. Stanbrook: As the grant to the Arts Council increases continuously, there seems to be no need for us to increase revenue and penalise those who enjoy the arcs. Would my hon. Friend therefore confirm that there is no intention to reintroduce musuem charges?
    Mr. Waldegrave: It is a matter for the individual trustees of the museums to bring forward proposals, should they want to do so, to introduce charges. I believe that one museum has made such proposals recently.
    Mr. Buchan: That last answer, I think, will cause a lot of anxiety throughout the museums in Britain. We had
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    expected at least a rejection in principle of the concept of payment for museums—[HON. MEMBERS: "Why?"] For the reasons that were given by the House when the then Prime Minister tried to bring it in 10 years ago.
    I come to the question that is being asked about 1984–85. Is it not the case that every single metropolitan local authority in Britain is concerned because they recognise the great collapse that there will be in their revenue? Is not the Minister being complacent in believing that this would be funded centrally, and is he giving the guarantee that, if the metropolitan authorities' income collapses, as is suggested, because of the actions of the Government, Her Majesty's Government will make up the money?
    Mr. Waldegrave: The hon. Gentleman has asked two questions there. On the first point, what I have said will be no news at all to anybody who knows the museum situation. That has been the policy for some time now. On the second point, my noble Friend has issued a consultation paper, and he made an interesting speech yesterday in Newcastle on the matter. He has reaffirmed that the intention of the Department of the Environment to abolish the metropolitan counties does not derive from any wish to diminish funding for the arts. and he is willing to consult about the maintenance of reasonable spending on the arts.

    Public Funds (Inquiries)
    Mr. Murphyasked the Under-Secretary of State answering in respect of the Arts what plans the Minister for the Arts has for further Rayner-style investigations into major arts recipients of public funds.
    Mr. Waldegrave: My noble Friend has no such plans at present.
    Mr. Murphy: I thank my hon. Friend for that answer. However, does not he agree that, as public finance is involved in supporting the arts, inquiries to ensure value for money are essential?
    Mr. Waldegrave: There is a great deal in what my hon. Friend says.
    Mr. Tony Banks: Did not the Rayner inquiry merely confirm what the Arts Council has been telling the Government for many years which is that the large national arts institutions are underfunded? Is the hon. Gentleman aware that one company that is seriously underfunded and has a large deficit is the London Festival Ballet? Will he give us an assurance that the LFB's £200,000 deficit will be taken up and, if he cannot do that, will he set up a Rayner-style inquiry into the LFB?
    Mr. Waldegrave: The London Festival Ballet is on the consultation list issued by my noble Friend. The hon. Gentleman is right to say that the Rayner report showed that the big companies have been underfunded. That is why my noble Friend found more funds for them.
    Mr. D. E. Thomas: Does the Minister accept that these issues involve an artistic judgment, for which Rayner-type scrutinies are hardly suitable? I remind the hon. Gentleman of the disastrous inquiry that recommended not proceeding with the Theatre museum.
    Mr. Waldegrave: My noble Friend has succeeded in going ahead with the Theatre museum and deserves

    631
    congratulations on that. The big companies are the first to say that the scale of their operations needs up-to-date management skills and they were grateful for many of the recommendations in the Priestley report.

    Parthenon Marbles
    Mr. Canavanasked the Under-Secretary of State answering in respect of the Arts whether the Minister for the Arts has yet come to any conclusion in his consideration of the request by the Greek Government for the return of the Parthenon marbles to Greece.
    Mr. Waldegrave: A formal reply to the Greek Government's request will be given soon.
    Mr. Canavan: What possible justification can there be for Britain hanging on to the marbles, which were stolen by Lord Elgin from the people of Greece? In the interests of simple justice and good relations between Britain and Greece, will the Minister ensure that the marbles are returned to their rightful owners and sited as near as possible to their original environment?
    Mr. Waldegrave: The marbles were not stolen from anyone. A Select Committee has looked into the matter and decided that they were not stolen. The hon. Gentleman's comments are almost as foolish and ignorant as those of the Leader of the Opposition who, such was his ignorance of the matter, made it appear that he thought that the Greek Government proposed to put the marbles back on the Parthenon, which is, of course, out of the question. The right hon. Gentleman said:
    "The Parthenon without the marbles is like a smile with a tooth missing."
    He proposed the absurd idea of the marbles spending six months here and six months in Greece, which the Greeks, being sensible people, rejected. The Labour party will get used to back-of-an-envelope policy-making, but that was a poor example of it.
    Mr. Jackson: Does my hon. Friend agree that the Parthenon marbles are as much a part of the heritage of Western civilisation as a whole as they are a factor in the would-be national myths of modern Greece? In that case, are they not as well placed in London as they would be elsewhere?
    Mr. Waldegrave: I think that that is so. Indeed, a process that started the destruction of the great museums of the world—if hon. Members look at question No. 30 on the Order Paper, they will see that this will not be the last such demand—would be a major disaster for world culture as well as for European culture.
    Mr. Robert Sheldon: Is the Under-Secretary aware that if it were practicable to replace the marbles on the Parthenon there would be a very strong case for doing so? As it is only a question of taking them from one museum to another, that is a much less attractive idea, except in the context of a general cultural interchange.
    Mr. Waldegrave: The right hon. Gentleman is better informed than his right hon. Friend the Leader of the Opposition, because that is, indeed, the proposal. I sympathise with what he said, but if we started breaking up the great museums by repatriating items, it would be a very serious mistake.
    Mr. Cormack: May we take it from my hon. Friend's robust and sensible answers that there is no question of the Government being bludgeoned or seduced into parting with the marbles?
    Mr. Waldegrave: I hope that all that my hon. Friend can learn from my replies is that the answer that will be given by the Government in due course will be better considered than the policy proposed by the Leader of the Opposition.
    Mr. Buchan: Does the hon. Gentleman realise that the picture that he has given of my right hon. Friend's concept and understanding of the problem of the marbles is wrong? Whatever may be attributable to Welsh hwyl, the Minister's concepts are wrong. Nobody is suggesting a massive interchange of art treasures — if we tried to return all the Titians and Tintorettos to Italy we should not be thanked for it. However, there are two or three special cases—West Africa is an example, and clearly so are the Parthenon marbles—in which the importance of the items to the originating country far outweighs even the artistic value. A national perception is also involved. If Greece is the fount of western civilisation, we should accept the role of the Parthenon and the entire Acropolis, to which these marbles should be returned. This is not instant policy-making. The Opposition believe that it is right to do this and we intend to do it.
    Mr. Waldegrave: I am not sure what the Parthenon is a symbol of except Athenian imperialism, of which it was built as a symbol. There is a proposal to have massive circulation of monuments. I quote from what the Leader of the Opposition said:
    "supplementary to this is the need to give effect to a system of rotation of ancient treasures to make them accessible in the greatest numbers of places and to the greatest number of people "
    That is what the right hon. Gentleman is proposing.

Poisonous Cargo (North Sea)
3.30 pm
Mr. A. J. Beithasked the Minister of Agriculture, Fisheries and Food if he will make a statement about the threat to fish stocks and marine life in the North sea from the loss of 80 barrels of toxic weedkiller from a Danish vessel.
The Minister of State Ministry of Agriculture, Fisheries and Food (Mr. John MacGregor): The information available to me is that a Danish vessel lost her deck cargo in rough weather on 13 January while steaming over a 30-mile stretch due east of Berwick-upon-Tweed and roughly half-way between the United Kingdom and Danish coasts. The cargo consisted of 80 barrels containing 200 litres each of an agricultural chemical known as "dinoseb". The barrels will almost certainly have sunk to the seabed. They are yellow and are clearly marked as a class 6/1 poison.
I understand that the Danish authorities are mounting a recovery operation but that the vessel equipped with the necessary detecting and lifting gear will not be able to reach the area until Tuesday evening or Wednesday at the earliest.
At this time of the year it is unusual for British fishing vessels to fish in the area. However, purely as a precaution, my Department is advising fishermen to avoid fishing in the immediate locality and to report to my district inspectors immediately if they have taken fish catches in the vicinity of the incident since 13 January.
It is hoped that all 80 barrels will still be intact, but even if every one of them has released its contents the chemical will almost certainly have dispersed rapidly and fish are likely to be seriously affected only in the immediate vicinity. The chemical is not bioaccumulative in fish flesh and it is extremely unlikely that any supplies of fish to the British market from the North sea would have been affected.
At this stage, I am not able to say why there was such a long delay between the incident and the information being made available to the international community.
Mr. Beith: I thank the Minister for his statement. Is he aware of suggestions that the owners did not report the nature of the cargo that they had lost, and will he look into that? Are the British Government helping in the attempts to locate the barrels? Are there any regulations that limit the carrying as deck cargo of dangerous commodities such as these?
Mr. MacGregor: The first point is a matter that we are investigating at the moment, and as it happens my right hon. Friend the Minister of Agriculture, Fisheries and Food will be in Denmark later this afternoon and will be discussing the matter personally with his opposite number in the Danish Government. On the second point, we have not been asked to provide any assistance, but we should consider it if we were asked to do so. On the third point, there is a code laying down the rules for the carriage of dangerous goods under the International Maritime Organisation regulations.
Mr. Robert Hughes: I thank the Minister for the statement and for the assurances that the chemicals are not bioaccumulative in fish flesh. Will he make sure that the position is monitored carefully, on that score in particular? Can the owners or the skipper of the Danish vessel be prosecuted under the maritime regulations of which the Minister spoke? Instead of waiting for a request for assistance from the Danish Government, will the Minister make an offer of such fishery protection vessels as are available to assist? Has he considered discussing with the North sea oil companies what expertise they might have in sub-sea exploration to see whether they can help to locate the barrels? Eighty barrels represent a huge amount of chemicals, and that must be of grave concern to every one of us.
Mr. MacGregor: I understand and appreciate the anxiety. The advice that I have given is advice that was given to me by my scientific advisers about the chemical aspects of the matter. Prosecution is obviously a matter for the Danish authorities, because the incident involves a Danish vessel. It will, therefore, in the first instance be for the Danish Government to examine the incident and consider what should be done, but we shall keep closely in touch on the matter. The suggestion that we should make available facilities, including North sea diving facilities, will be discussed by my right hon. Friend the Minister later this afternoon with his Danish opposite number.
Mr. Robert Hughes: Was not the vessel loaded in the United Kingdom and, therefore, do we not have the power of prosecution?
Mr. MacGregor: We are considering that aspect. In answer to one of the hon. Gentleman's first questions, may I say that my officials are doing everything they can within our responsibilities about the incident, including keeping British fishermen fully informed of developments.

Prescot Industries Limited (Closure)
3.36 pm
Mr. Robert Kilroy-Silk: I beg to ask leave to move the Adjournment of the House, under Standing Order No. 10, for the purpose of discussing a specific and important matter that should have urgent consideration, namely,
"the closure of BICC Prescot Industries Limited and the loss of 350 jobs in Prescot and Merseyside."
Clearly, this matter is specific because a company is closing one plant, Prescot Industries Ltd, and making redundancies at another, Reliance Cords and Cables Ltd, in my constituency. It is important at any time when jobs are lost both to those who lose them and to future generations who lose job opportunities. It is especially important because my constituency already holds the record for the third highest level of unemployment. There is already 40 per cent. unemployment throughout the borough, 85 per cent. of this year's school leavers are still unemployed or on temporary employment schemes, 7,000 unemployed people in the neighbouring town of Kirkby are chasing 17 vacancies, and on Merseyside there are 136,000 unemployed, which is a rate of 18 per cent. In that context, the loss of further jobs is of appalling consequence to the town and to the economy of the whole region. It is important not only because of the jobs that will be lost but because their loss threatens the viability of the parent plant and the 2,800 people employed there.
It is urgent that the House has the opportunity to debate those job losses and the continuing decline—indeed, the slow death and destruction — of the industry on Merseyside, so that we can hear from the Government what specific and concrete steps they intend to take to revitalise and regenerate the area. My constituents wish to know whether Merseyside is to be allowed to die, and with it their employment opportunities and prosperity.
Mr. Speaker: The hon. Member for Knowsley, North (Mr. Kilroy-Silk) asks leave to move the Adjournment of the House under Standing Order No. 10 for the purpose of discussing a specific and important matter that should have urgent consideration, namely,
"The closure of BICC Prescot Industries Ltd and the loss of 350 jobs in Prescot and Merseyside."
The loss of jobs anywhere and especially on Merseyside is a grave matter for the hon. Members representing those constituencies, but I do not consider that the matter is suitable for discussion under Standing Order No. 10. I cannot, therefore, submit the application to the House.

Mr. Bernard Ingham (Statement)
3.39 pm
Mr. D. N. Campbell-Savours: On a point of order, Mr. Speaker. This is not a spurious point of order. I seek to raise something which I do not understand and about which you, Mr. Speaker, may be able to help the House in its deliberations.
Last Friday, there was an article in The Guardian about a statement made by the press secretary to the Prime Minister in Downing street, Mr. Bernard Ingham. He referred to a report, which had been handed to Ministers, about "neutralising" the opposition within the Government party to the proposals on the rate capping. Bill.
I understand that it is the right of Ministers and the Secretary of State for the Environment to lobby and impress upon their hon. Friends the need for them to support the Government, but the article referred, interestingly, to the action being approved by a Civil Service committee. That committee consists of civil servants, and I cannot understand on what basis civil servants can take, on behalf of the Government, strategic political decisions that affect elected representatives in the House. I wonder whether you, as Speaker, wishing to defend our rights, might be willing to give the matter some consideration during the next few days.
Mr. Speaker: The hon. Gentleman is quite right. I am here to look after the rights of Back-Bench Members, but I know nothing about this article. It is not a matter for me. The Leader of the House is here and will have listened to the hon. Gentleman's remarks.

Mr. Bernard Ingham (Statement)

  STATUTORY INSTRUMENTS, &c.
  Mr. Speaker: With the leave of the House, I will put together the Questions on the two motions relating to draft statutory instruments.
  Ordered,
  That the draft Pedal Bicycles (Safety) Regulations 1984 be referred to a Standing Committee on Statutory Instruments, &c.
  That the draft Companies Acts (Pre-Consolidation Amendments) Order 1984 be referred to a Standing Committee on Statutory Instruments, &c.—[Mr. Neubert.]

Local Government
Mr. Speaker: Before we start this important debate, I must say again to the House that many right hon. and hon. Members have written to me, stating their wish to take part in it. Several hon. Members were unsuccessful in the debate last Tuesday, and I hope that some of them may be called to speak in this debate. I understand that it will continue until 11.30 pm, so I hope it will be possible to call rather more hon. Members than it was possible to call last week. Mr. Secretary Jenkin.
Mr. Robin Maxwell-Hyslop: On a point of order, Mr. Speaker. Would you be good enough to let the House know whether you have selected the amendments in my name, bearing in mind that this is not an affirmative resolution on the statutory instrument and that you are at liberty to select the amendments if you so desire?
Mr. Speaker: I must apologise to the hon. Gentleman. I should have said that I have not selected his amendments.
3.41 pm
The Secretary of State for the Environment (Mr. Patrick Jenkin): I beg to move,
That the Rate Support Grant Report (England) 1984–85 (House of Commons Paper No. 151), which was laid before this House on 14th December, be approved.
Before I deal with the rate support grant settlement, I shall make some general points. The system for settling the rate support grant attracts much criticism. It is complicated, partly because it deals with very large sums of money and many local authorities and partly because it tries to take account of the varying circumstances of individual authorities. As I said on a previous occasion, it can result in rough justice, but let us not forget what went before it. I remember — I am sure that several of my hon. Friends remember it—how, year after year, we all complained that the old system of rate support grant rewarded overspending. The more a council increased its spending, the more rate support grant it received. We now have a system where, under the block grant and taper and, more sharply, under the targets and holdback, an increasing proportion of higher spending comes from the ratepayer and a reducing proportion comes from the taxpayer. The system now rightly penalises overspending.
The local authority associations criticise the way in which targets are set, but the House should know that their officers are under formal instructions not to take part in consultations leading to the setting of those targets. Privately, local authority leaders welcome targets because they provide an excellent discipline which councils can enforce upon their officers. Is it too much to ask that the associations should drop their boycott and consult us at an early stage on the target formula?
I am well aware of the continuing sense of unfairness felt by those councils which have made great efforts to make savings and cut staff costs but which still face demanding targets. Our central problem is that between 1978–79 and 1983–84 current expenditure by local councils in England increased from £11 billion to about £20·5 billion. Allowing for inflation. that is an increase in cost terms over that period of 9 per cent.
Dr. John Cunningham: What about central Government expenditure?
Mr. Jenkin: Central Government have had to cope with a 4 per cent. increase in the number of pensioners and
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with, as the Opposition never tire of reminding us, a doubling of unemployment. During that period, local government has experienced a reduction of about 750,000 in the number of children in schools.
Dr. Oonagh McDonald rose—
Mr. Jenkin: I shall not give way.
I pay a very warm tribute to those councils — they include most Conservative-controlled councils — that have done their best to make savings, cut costs and live within their targets. I understand the very real difficulties with which they have been faced. They know that keeping public spending down is central to the economic policy approved by the electorate and endorsed by Parliament.
However, I cannot say the same for those councils— the worst offenders are all Labour-controlled—that have substantially increased their spending. They are the rogue elephants in the system and have made life extremely difficult for the rest.
Mr. Allan Roberts rose—
Mr. Jenkin: Governments must be concerned with the totality of local government spending. If some authorities insist on overspending, the targets of the responsible majority must be correspondingly tougher. That has driven us to propose more direct action to curb the highest spenders. Last week, the House passed by a majority that I now understand was 101 the Second Reading of the Rates Bill, which, if the House so wills, will give us power to deal with the feckless few.
Dr. Cunningham: I am grateful to the right hon. Gentleman for giving way. As well as implying that pensioners and children do not live in council areas—an odd assertion—he seemed to suggest that pensioners and children were apparently reflected in central Government expenditure but not in local government expenditure. He now says that targets are necessary, and on 14 December he said that they were "tough for everyone". Does he now think that the targets which he is asking local authorities to accept are attainable? Will he be clear and unequivocal in his answer?
Mr. Jenkin: The hon. Gentleman will no doubt make his own speech. Very high-spending authorities — the hon. Gentleman knows them — which complain about their targets are complaining about a burden that they have imposed on themselves year after year. Their spending has gone through the roof, they have got themselves into this situation, and it is for them to decide how to get out of it.
Mr. Allan Roberts rose—
Mr. Jenkin: I shall not give way, because I want to get on.
As evidence of the responsibility of the majority of authorities, let me cite the outcome of last year's rate support grant settlement. When my right hon. Friend the Member for Henley (Mr. Heseltine), now Secretary of State for Defence, announced his proposals for the 1983–84 settlement, he cut the percentage of spending met by grant from 56 per cent. to 53 per cent., and many targets were again set well below grant-related expenditure. As one well remembers, he was met by the barrage of protest. Foremost among the protestors was that prophet of doom, the right hon. Member for Manchester, Gorton (Mr. Kaufman), to whom I have given notice that I would quote him. He said:

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"will it not continue to mean, record high rates, worse services and over 100,000 job losses to add to the present total of 3¼ million?"—[Official Report, 27 July 1982; Vol. 28, c. 924.]
What happened? Four out of five authorities, which I have described as the responsible majority, budgeted to spend at or within 2 per cent. above their targets. In other words, the great majority of local authorities buckled to and did their best.
We have heard the usual scare stories about services, but I have seen no hard evidence that they are unacceptably low. The right hon. Gentleman claimed that there would be 100,000 redundancies. I must report to the House that during the year the latest local authority manpower figures show no reduction at all. As for so-called record rates, the general rate increase last year was 6·5 per cent., the lowest for five years.
Of course, I concede that if all the councils had behaved like the Socialist republics so admired by the Labour party, no doubt there would have been record rate increases. Last year, rates in Islington rose by 60 per cent., and in Lambeth by 55 per cent. However, the great majority of councils did their best. Indeed, some were able to cut their rates.
Mr. Allan Roberts: rose—
Mr. Jenkin: I shall give way when I have finished my sentence.
Birmingham, whose inner city problems are no less serious than those of Islington and Lambeth, cut its rate by 15p last year and has just announced another 5p cut this year. That shows what a sensible, vigorous Tory city council can do if it sets its mind to it.
Mr. John Powley: Does not my right hon. Friend agree that some local authorities, particularly Labour-controlled authorities, overspend largely because they spend their ratepayers' money on quite unnecessary goods, services and local authority employees? In contrast, Norfolk county council has to spend its money on essential items such as education and the social services. Nevertheless, it is being penalised because of the profligacy—
Mr. Speaker: Order. That is a very long intervention.
Mr. Jenkin: My hon. Friend is absolutely right. I hope that there may be some words of comfort in my speech for an authority such as Norfolk.
I come to the settlement for 1984–85. Faced with a budgeted overspend in the current year of £0·75 billion —three quarters of that overspend comes from no more than just 16 Labour-controlled authorities — I have had to increase the White Paper provision — [Interruption.] Penalties are nothing to do with this issue. I am talking about spending and there is no question of any penalties affecting the amount that they decide to spend.
Mr. Mark Hughes rose—
Mr. Jenkin: I have had to increase the provision for next year by £540 million, to £20·4 billion. That is the figure for local authority current spending. Of course, that increase has put pressure on others of the Chancellor of the Exchequer's programmes. The targets that I have set are consistent with that figure of £20·4 billion.
In setting targets, I have tried to take account of the representations made to me by local authorities. The big change this year is that I have made a larger distinction than ever before between the majority of authorities which
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have tried to find savings and the high-spending minority which have not. But I do not question for one moment that the targets imply real economies across the board even for responsible low-spending councils.
The target for most low-spending authorities — there are 233 in that category — is a cash increase of 3 per cent. over the adjusted budget for this year. By contrast, most high-spending authorities have targets representing cash cuts of up to 6 per cent. What those targets will buy will depend crucially on the rate of increase in local government costs, and two thirds of those costs are wages. A clear message of this settlement is that restraint in manpower costs is needed more than ever this year. If the local government employers concede high pay settlements this year, of course even the maximum 3 per cent. increase from budgets will mean even greater cuts elsewhere. The downward trend of manpower numbers must be resumed. Councils simply cannot expect to keep their spending below target if they allow their manpower numbers to rise.
Mr. Allan Roberts rose—
Mr. Geoffrey Rippon: As my right hon. Friend cannot have known that you, Mr. Speaker, would not accept the amendments in the name of my hon. Friend the Member for Tiverton (Mr. Maxwell-Hyslop), he must have prepared a reply to it. As that amendment raises the only point at issue, will my right hon. Friend reply to it?
Mr. Jenkin: With great respect, it might be wiser for my hon. Friend the Under-Secretary to deal with that after my hon. Friend the Member for Tiverton (Mr. Maxwell-Hyslop) has caught Mr. Speaker's eye and made his point at greater length.
Mr. Allan Roberts rose—
Mr. Jenkin: I have already given way to several Opposition Members.
Aggregate Exchequer grant for next year will be £11·9 billion — £90 million more than this year's settlement and £370 million more than is being paid this year when one takes account of holdback. The £11·9 billion is 51·9 per cent. of relevant expenditure, only marginally less than the 52·8 per cent. in this year's settlement.
Many councils feared a much larger reduction. In the event, the reduction in the percentage of grant is much smaller than it has been in recent years. I remind the Opposition that not only this Government reduced grant percentage. Our predecessors thought it right to reduce the grant percentage from 66 per cent. to 61 per cent. We have simply continued that trend.
I come now to holdback. As I discussed with local government in October, I am proposing a more severe scheme of grant holdback for authorities which exceed their targets next year. The arrangements are set out in paragraphs 28 to 32 of the report. To summarise, at ratepayer level holdback will be at the rate of 2p in poundage terms for the first percentage point of overspend, 4p for the second. 8p for the third and 9p for each percentage point above that.
Mr. D. N. Campbell-Savours rose—
Mr. Jenkin: I must get on, because many right hon. and hon. Members wish to speak.
Understandably, this scheme has aroused much concern even among responsible authorities and I should like to explain why we have had to do this.

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The purpose of holdback is to deter overspending by increasing the cost to ratepayers of spending above target. Because authorities exceeding their targets this year will have already rated up for that excess, we must steepen the holdback tariff if deterrence is to work next year. Many councils asked for a gentler lead-in so that the penalty for those which try but narrowly fail to hit their targets is less severe than it is higher up the scale. I understand that argument, and the penalties for the first two percentage points of overspend are therefore much lower than for the higher levels. But if the first step were even smaller, I doubt whether it would have much impact on spending decisions.
Mr. Peter Hordern: So far, my right hon. Friend has dealt with the high-spending local authorities. Will he find a place in his speech to deal with low-spending authorities such as West Sussex, which has to meet nationally negotiated wage settlements of 5 per cent. for teachers and 7·5 per cent. for the police with but a 2 per cent. cash increase? It is the lowest precepted authority in the country and if it spends up to its GRE it will lose the whole of its rate support grant.
Mr. Jenkin: My hon. Friend anticipates my next argument. I have been asked by many why there cannot be an exemption for spending above the target but below GRE. I am aware that some of the fiercest criticisms of the RSG settlement come from authorities whose targets are set below GRE and which can therefore come into penalty while still not spending up to their GRE level.
Several Hon. Members rose—
Mr. Jenkin: I should like to develop my argument.
The main reason why there cannot be such an exemption is that a GRE exemption for next year would provide councils collectively with headroom for additional spending without penalty which could amount to about £500 million. When there was a GRE exemption in 1982–83, two thirds of that headroom was used by the authorities concerned. I am sure that the House understands why it would not be responsible to contemplate allowing extra expenditure — it could be £330 million—of that magnitude this time.
Some expenditure is disregarded for the purposes of holdback. We have added one third to the two existing disregards—increased urban programme expenditure by partnership and programme authorities and increased expenditure on civil defence. I propose to disregard increased spending on those community care schemes which are financed jointly with health authorities. The amount earmarked by the DHSS for joint funding has trebled since 1978–79. The new disregard is therefore an important change for social service authorities such as county councils and has been widely welcomed by them.
Mr. Mark Hughes: I wish to deal with a narrow and technical agricultural and rating matter. The present outbreak of sheep scab in the north of England is costing Cumbria county council £11,500. Under these proposals, it will be penalised by an additional £23,000. Can that type of disregard be included?
Mr. Jenkin: It is my duty under the statute to consider requests for disregard until the time of the final rate
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support grant report relating to any year. I have taken note of what the hon. Gentleman has said, but that must be without commitment.
Mr. Allan Roberts: If the main thrust of the Minister's rate support grant settlement and rate capping Bill is to penalise overspenders, why has Sefton metropolitan district council, which is one of the lowest-rated metropolitan districts in the country, Conservative-controlled, and high on the list as a paragon of underspending virtue, lost £2 million in real terms in rate support grant in this settlement? If it increases its expenditure by 4·5 per cent. just to cover inflation. it will lose another £4 million on clawback. What must the Conservative authorities do to please the Minister?
Mr. Jenkin: I do not accept the hon. Gentleman's figure of 4·5 per cent. By far the biggest influence on that figure will be the pay settlement which is being negotiated. I have made no secret of the fact that I recognise that the targets that we have set and the holdback regime that I have described are tough on everyone. If authorities budget to spend within the targets set, the average rate increase should be quite low.
I am well aware of the anxieties of the low-spending authorities. Many authorities, while criticising this settlement, have expressed to me their very grave anxieties not so much about 1984–85 but about what they fear for the following year, 1985–86. I should like to give this assurance to the House.
I have been made very well aware that a number of low-spending authorities regard the targests that have been set for 1984–85 as an unfair use of a system which should in their eyes be intended to bring pressure primarily on those spending well above GRE. I have already said that, in the absence of any effective way of curbing the extravagance of the high spenders, the Government have been forced to seek savings from everyone—high and low spenders— in order to meet the Chancellor's spending guidelines. The Rates Bill is now before the House. One of its primary purposes is to help restrain the total of local authority expenditure. After enactment — that is a matter for Parliament—we shall, for the first time, have power to restrain the worst excesses of the highest spenders. This power will not change the picture overnight, but as it begins to take effect I would expect in 1985–86 and thereafter to be able to set targests which take greater account of GREs and thus recognise the efforts which low-spending authorities have made.
Sir Humphrey Atkins: My right hon. Friend has made an important statement which we shall wish to study carefully. He said that he recognises the problem of the low-spending authorities, such as Surrey, of which I represent a part. Can he assure me that his words mean that next year he will seek to deal with the difficulties which he knows that Surrey and other authorities are experiencing?
Mr. Jenkin: I am grateful to my right hon. Friend. Surrey is budgeting to spend just below its GRE for this year. It was well below GRE in 1982–83. Its target for next year is £8 million below its GRE. Obviously, I shall want to examine its budget for next year. On the evidence so far, Surrey is precisely the type of authority that I have in mind —an authority which has budgeted carefully and kept its expenditure below GRE and which now finds that a target which is significantly below GRE presents real problems.
Sir John Biggs-Davison: Bearing in mind the fact that my right hon. Friend is an Essex ratepayer, will he be more precise about what he is saying to Essex? He said that he has an expectation that something might be possible. Is that enough for Essex hon. Members who are wondering how they should vote tonight?
Mr. Jenkin: My hon. Friend understands the difficulty that I face. I am seeking to offer some reassurance for the year which begins in April 1985. My hon. Friend knows that the Cabinet's consideration of the totality of public spending and the entire first round has yet to begin. I understand all too clearly the position from the representations made vigorously by hon. Members representing Essex. When the authorities find themselves this year with a target that is 2·1 per cent. below the GRE, they think that it is unfair that Essex should have to suffer penalties in these circumstances. When I draw up the targets next year I shall take greater account of those authorities which have budgeted carefully and which could not, by any stretch of the imagination, be called high spenders.
My hon. Friend will recognise that there is no way at this time of the year of trying to put figures on next year's targets. It would be quite unreasonable to do so. I hope that I have described my intentions in approaching the setting of the rate support grant settlement next time round.
Mr. Jack Straw: As we are talking about 1985–86, if and when the Rates Bill becomes law does the Secretary of State also accept the view of the chairman of the Surrey county council, published in last Friday's Financial Times, that, if rate capping works, more rate support grant will go to the capped authorities, less to the uncapped authorities, including Surrey and Essex, and therefore, in his words,
"other prudent authorities, will have to foot the bill"?
Was the chairman of Surrey county council right or wrong when he used those words?
Mr. Jenkin: The chairman of Surrey county council made many assumptions in that letter which I do not accept for one moment. Much will depend on how the rate support grant settlement is drawn up in the light of the knowledge that some authorities will be spending less in 1985–86 than they are spending now. The chairman of Surrey county council made unwarranted assumptions.
Before I sit down, I want to say something about a new factor in the equation — the Audit Commission. Set up under the 1982 Local Government Finance Act, the commission was given a specific remit to look at value for money in local authority spending. The commission really got under way in April of last year, and it has already produced an impressive handbook entitled, "Economy, Efficiency, and Effectiveness" explaining how it proposes to tackle this aspect of its work. Copies are in the Library of the House, and I am sure that the commission will be happy to provide a copy to any hon. Member who wishes to have one. Copies have been sent to every local authority, and each local authority has been given an individual profile of its own spending, costs, and other data — including demographic data — together with comparisons with the figures of other comparable authorities of the same class.
These profiles and the other material in the handbook are intended to help individual authorities and their
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auditors to identify the areas where they should concentrate their efforts in looking for better value for money and for savings through greater economy and efficiency. They provide the necessary information to enable auditors and councillors to ask the really searching questions that are needed.
The handbook's introduction states:
"Is the Council getting what it is paying for? Does the Council need to provide all its present services, some of which may well be geared to the needs of an earlier era? Should resources be redeployed to meet new needs and demands? Are there lower cost ways of delivering the same benefits? Is the Council being managed well? These are questions …to which, often there are no ready answers".
The handbook deals generally with the arrangements that councils should have in place to ensure economy, efficiency and effectiveness in their use of resources. It should become compulsory reading, not only for chief officers but for the chairmen of policy and resources committees and of finance committees. There may be councils that cannot improve their systems, but I doubt whether there are many of them.
The first edition of the handbook contains sections on further education, police, refuse collection and purchasing. Further sections will be added progressively to cover other services as the commission's special studies of specific areas produce results and findings for general application.
I shall give the House some examples of how the handbook can be used. Let us take the mundane subject of refuse collection. The handbook records how one council cut its refuse collection costs by 30 per cent. using the ROSS computer programme devised by LAMSAC. Others have saved 15 per cent. or more. Why is it that only one refuse collection authority in eight actually uses that computer system?
On police services, the commission outlines the range of opportunities for savings that exist, including, for instance, the use of civilians. Using 1 per cent. more civilians instead of uniformed officers for administrative police work could save a typical county police force £100,000 a year. There is not a scintilla of evidence to suggest that civilianisation reduces the efficiency or effectiveness of any force. Why does the ratio of civilians to police officers in different forces range from as low as 22 per 100 officers to 59? Yet 1 per cent. saves £110,000 a year in a typical county force.
On further education, the handbook spells out the significant opportunities for increasing student numbers and reducing costs without adverse effects on the quality of education. In 1981, one polytechnic alone — the details are in the book — wasted £100,000, of which £20,000 went on rates on buildings it did not need or had already sold or which had even been pulled down. Is every education authority quite satisfied that nothing like that is happening in its area?
I consider the Audit Commission handbook one of the most powerful tools for efficiency ever put into the hands of local councillors. Time and time again, officers tell the councillors, and councillors tell the public—and, I dare say, Members of Parliament — that further economies can mean only savage cuts in services, but who in this House could put his hand on his heart and say that his council is so efficient that any further economies must mean cuts in services?
Why is it that similar authorities can produce such totally different figures for expenditure per head?

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According to CIPFA figures for 1982–83, Tory Wandsworth spent £246 per head on all its services; Labour Camden spent £528 — more than double Wandsworth's figure—and Tory Dudley spent £290 per head compared with Labour Newcastle's £478 and Labour Manchester's £548. Spending per head is, I agree, a rough and ready comparison, but are we not bound to ask how such disparities can be justified? Are Wandsworth's ratepayers really getting half the services received by Camden's ratepayers? Are Manchester's ratepayers getting nearly twice as much as Dudley's? I do not believe it for one minute.
The hon. Member for Holborn and St. Pancras (Mr. Dobson) made an impassioned speech last Tuesday about the Inner London Education Authority. What the hon. Gentleman did not ask — and I doubt whether he ever thought of asking — is why the administrative clerical costs per pupil in the Inner London Education Authority are 80 per cent. more than the average costs in the outer London boroughs. Why are the support staff costs per pupil 86 per cent. more? Why do staff looking after school premises cost 90 per cent. more? Those are not the classroom or teaching costs; they are the administrative tail on a scale that has made the Inner London Education Authority a byword for feckless extravagance.
Mr. Frank Dobson rose—
Mr. Jenkin: I shall give way to the hon. Gentleman later, as I mentioned him.
If we compare ILEA with some of the other hard-pressed inner city areas in the provinces—
Several Hon. Members rose—
Mr. Speaker: Order. The Secretary of State is not giving way. When hon. Members intervene, that takes time out of the debate.
Mr. Jenkin: I shall finish my sentence and then give way to the hon. Member for Holborn and St. Pancras.
Many of the provincial cities have large ethnic minorities. They must cope with the same problems as inner London. Yet the expenditure per pupil in ILEA is half as much again as in Coventry, Bradford, Birmingham and Wolverhampton. It is twice as much per head as in the metropolitan district of Kirklees. There is absolutely no justification for that. Savings can be made.
Mr. Dobson: The Secretary of State obviously did not listen to my quarter of an hour speech on the Rates Bill, or he would have understood the multiplicity of problems that affect ILEA that affect no other authority. Can he tell the House of any other education authority that has 50.000 children—one in six—who speak a language other than English at home?
Can the right hon. Gentleman confirm that Her Majesty's inspectorate of schools has fully endorsed the ILEA administrative back-up expenditure and attacked the failure to provide back-up in such councils as Dudley? Can he also confirm that the Metropolitan Police, for which the Home Secretary is responsible, costs 40 per cent. more than any other police force in Britain?
Mr. Jenkin: The hon. Gentleman has abused his opportunity to intervene. I quoted four or five authorities with severe inner city problems, large ethnic minorities
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and large numbers of children for whom English is not the mother tongue. ILEA is spending half as much again as the highest spender in those authorities. It is impossible to believe that that can be justified. It is an example of the sort of comparison, broken down by function and service, that should enable councillors who genuinely want to cut out waste without damaging services to see the way to do so.
There is a another way. Millions of pounds can be saved by putting services out to competitive contract. That has been shown conclusively by those councils which have done it. Refuse collection, street cleaning, park maintenance, school cleaning and no doubt many other services can show substantial cost reductions through competitive tendering. When the savings are now proven, why do so few councils go down that road? Is it fear of the unions? Many councils have shown that it is perfectly possible to negotiate satisfactory deals with their unions and to secure real benefits for their ratepayers. What is at the moment a pioneering trickle must become a great cost-saving flood. The opportunities are there; all that is needed is the courage and the will to grasp them.
That is the way to make sure that this settlement, tough as it undoubtedly is, brings benefit to ratepayers, and I ask right hon. and hon. Members to give it their approval.
4.20 pm
Dr. John Cunningham: Last week the Secretary of State introduced his Bill to control local democracy, and now he is springing his trap to ensnare local councils by creating conditions that will justify, in his terms, his action to take over responsibility for local budgets, rates and services. As the intervention of my hon. Friend the Member for Blackburn (Mr. Straw) so clearly demonstrated in respect of Surrey, the authorities that will be caught in the trap will not be restricted to the right hon. Gentleman's favourite hit list. The mess of local government finance that has been created by this Administration is now so unravellable that the trap will catch authorities indiscriminately, as I have no doubt many Conservative Members are dying to tell the right hon. Gentleman. I am sure that they will be armed with examples to support their argument. Surely no one in the House can mistake the Government's strategy. It was clear when the right hon. Gentleman made his announcement to the House on 14 December 1983 that most ratepayers would face steep rates increases in the spring as a direct result of the Government's policy.
The rate support grant that we are asked to approve involves further massive cuts in the cash that the Government are willing to give councils to support the services on which their communities depend. The report marks a further shift of the burden of taxation away from direct taxation, for example, to every rates bill in the country. It is further confirmation, if more were needed, of the Government's intention to sustain a disgraceful assault on local government and local democracy. The cash cut of £100 million in block grant is, after allowing for inflation, a cut in real terms of well over £600 million. That is equivalent to a rates increase of at least 8p in the pound.
The Association of Metropolitan Authorities has estimated that on average the Government's proposals will cost householders another £21 per year at least. It estimates that the cost will be more where councils are penalised by the Government. Council tenants will be

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worse off because of Government-enforced rent increases. The Government's proposals do not even keep pace with inflation, and they have been condemned as unrealistic, arbitrary and a deception of the public by the Conservative-controlled Association of County Councils. Its anger is understandable and must be as well known to Conservative Members as it is to us. I assure the House that it is well known to us. It has been demonstrated by the volume and strength of the representations that have been made to us by Conservative councils and the Conservative leaders of the councils. Ministers and Government supporters cannot be in any doubt about the intensity of the feelings of their Conservative colleagues in local government.
The Association of County Councils has stated that local councils face an
"intolerable choice. Rates increases will be far in excess of inflation or major cut-backs in essential services will take place."
That is a quotation from the evidence that was submitted by the association to the right hon. Gentleman when its representatives went to see him.
The Government's grant penalty system will penalise harshly and unfairly all those authorities which, over the years, have done their best to meet the Government's requests. The targets allow only a 3 per cent. cash increase compared with the Treasury's estimate of 5 per cent. inflation, which is probably an underestimate. I noted the Secretary of State's refusal to say whether he believed that the targets that he is setting were attainable.
Similarly, the Conservative-controlled Association of District Councils has stated that the Government's policies are likely
"to produce a wide range of rates increases across the country."
Even if there is spending on the lines that the Government request, the association estimates that more than 180 district councils will have rates rises of 5 per cent.— that is 63 per cent. of all districts — while dozens will have increases of over 10 per cent. It estimates that some councils will have rates increases of 20 per cent. I remind the House, ratepayers and all local electors that in 1979, when we had a Labour Government, local councils received 61 per cent. of all the expenditure that was necessary to provide local services. The Secretary of State rather disingenuously referred to that as being a reduction. He was right, but it was a reduction in a growing total. He is reducing a declining amount, and that is the major difference between the policies being followed by this Administration and those that were followed by the previous Labour Government. It is proposed to reduce the sum yet again to 51·9 per cent.
A massive reduction of rate support grant has taken place under the Governments of the Prime Minster. Penalties in the form of fines on councils which try to maintain services—their only crime is to want to protect the elderly, families with young children and the sick and disabled while keeping down transport costs and fares and keeping people in jobs—will reduce the actual level of support to below 50 per cent., which is what they did in 1983–84. The level of support will be reduced perhaps to as little as 48 per cent. of the total. Councils which refuse or fail to comply with these arbitrary and nonsensical ceilings will face the most vicious penalties on record. They will amount to fines on councils of up to £6 for every £1 that is spent without the right hon. Gentleman's approval.
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In other words, local ratepayers are facing a double betrayal by the Government. First, the overall amount of grant has been slashed. That means that every council, including those that are spending within their ceilings, will receive less cash for community services. They will be forced to cut those services or to increase their rates, or both.
Secondly, the Government's fines will take money away from ratepayers when their inadequate and unrealistic ceilings are not met. The choice facing local councillors of all political parties is horrendous. In real terms, the Government's policies could mean 12,000 fewer teachers, 11,600 fewer social services residential places, 8,300 fewer day care places, 46,200 fewer homes attended by home helps, over 58,000 fewer meals on wheels per week, 2,400 fewer children boarded out, 7,100 fewer policemen, 7,150 fewer support staff for them, over 3,300 fewer firemen and 2,700 fewer jobs in road maintenance. There could be increased fares, reduced bus and train services and reductions in concessionary fare schemes. Those are the estimates of the Association of Metropolitan Authorities, and they have not been challenged, let alone refuted, by the Minister.
When will more Conservative Members face the reality of the direction in which the Government's policies are leading us? If a recovery is under way, as is claimed, why are all these measures necessary? Why are those who live in Tory-controlled counties and towns being punished, in many instances after decades of unbroken Tory domination of councils? The truth is that the policies have nothing to do with a few high-spending Labour authorities. That is a deception that has been practised by Ministers. The Government's policies are undermining council services throughout the country regardless of which political party is in control in the shire halls and the town halls.
In the documents leaked in December, the Secretary of State himself advised his colleagues that
"real terms reductions are required from all authorities, including those which have tried to meet targets in the past."
The Secretary of State wanted to establish his own campaign unit to cloak the harsh reality in some kind of Government propaganda, but the Prime Minister clearly did not trust him or the Department to do the job properly, as she disapproved of the plan and we now learn that it is in the hands of her own press officer.
As my hon. Friend the Member for Workington (Mr. Campbell-Savours) pointed out, The Guardian last Friday revealed the contents of yet another leaked document. I have always supported the case for a freedom of information Act, but I begin to wonder whether it is really necessary. We learn from that document that in addition to central control of local councils Mr. Bernard Ingham is now calling for—note the language—"neutralisation" of "dissident elements" among the Government's own supporters to prevent the Government's attacks on local councils being frustrated.
Other proposals include
"remedial action with troublesome journals".
What can it all mean? Will it mean fewer gongs, no more knighthoods and a more vigorous reselection process for Conservative Members? Is there to be a Finchley gulag? The mind boggles. Perhaps the right hon. Member for Cambridgeshire South-East (Mr. Pym) will be sent to a correction seminar with Professor Walters or Professor Friedman. In any event, more and more people believe

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that the journals and newspapers in need of remedial treatment are those that support the Government's policies, not those that oppose them.
The Government cannot disguise the fact that in the coming year grants to local councils will be at least £2,800 million less than in 1979 although there was then far less unemployment, deprivation and hardship than there is now. Yet again, we are being asked to approve the redistribution of resources in favour of the better-off and away from the people most in need. As the latest edition of the Government's own publication, "Social Trends," makes clear, the position of people in need of community support and services is deteriorating. The Financial Times analysed that document and concluded:
"The gap widens between the 'haves' and 'have-nots'."
It is to the shame of the Government in general and the Secretary of State in particular that the House is now being asked to support more of the same policies.
That charge is borne out by the fact that even the neediest communities — the so-called partnership and programme authorities — which the Government recognise as having desperate problems, have lost £231 million in holdback alone since 1981–82. Even if those authorities were able or willing to decimate their services in the 1984–85 financial year and even if they met the Government's imposed ceiling, they would lose a further £40 million in block grant—more than a quarter of the total urban programme specific grant. That is just one aspect of the policy that the Secretary of State asks the House to approve today. Is that what he and the Government regard as fair and equitable in the prevailing climate?
In London, the total grant entitlement is cut by about £100 million in real terms. Although the GLC entitlement is to be increased by £24 million, in practice that authority and ILEA, about which the Secretary of State had much to say, will receive no block grant at all. There will be no block grant support for Londoners living in the GLC area and no block grant support for the children, teachers and other staff at schools in the ILEA area. That is disgraceful.
In the inner London boroughs, entitlement is cut by £44 million in real terms. For outer London boroughs the entitlement is reduced by £65 million in real terms. This represents a real onslaught on London by the Government. Those figures are based on the Government's unrealistic targets and show how shabbily the whole of London, both inner and outer, is being treated.
The penalty system is likely to make the situation even worse unless savage cuts in services are implemented. Preliminary estimates by London boroughs suggest that the cash loss could be up to £150 million, which represents a 37 per cent. reduction on the current financial year.
The Secretary of State has made much of the Audit Commission report, but does he really believe that this is the most efficient way to redistribute resources or reorganise finances?
Mr. Nicholas Baker: The hon. Gentleman spoke at length about fair redistribution of resources. Does he accept that under Governments of both parties there has been, and still is, unfairness in the way in which resources are distributed as between the high-spending authorities and the lowest-spending authorities? Would it not be progress if the lowest spenders were
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protected from percentage increases under this rate support grant adjustment so that they receive a fair allocation of resources in the future?
Dr. Cunningham: I agree that there is unfairness, but I do not assume that because an authority is a high spender it is by definition profligate or careless. The high spending often reflects the needs of the community that the authority seeks to serve. We cannot accept the simplistic view that high spending is by definition wrong and low spending by definition right and efficient.
The penalty system imposed by the Government will make things much worse for all authorities. If there is a reduction of 37 per cent. compared with the current financial year for the London boroughs, the loss of support for the people of London will be more than £300 per household since the Government came to office. The absurdity of the system is best illustrated by the fact that, using GRE as a yardstick, as the Government now intend, the City of London is defined as a huge overspender, spending 3·3 times the amount that the Government say that it should spend.
Many authorities which do not provide the services on which it is based now receive GRE on equal terms with authorities which do. For example, Gloucestershire receives support for nursery schools although it has no nursery schools. There are countless examples to illustrate the absurdity of the Government's system. The unique achievement of their system of local government finance is that it supports councils which do not provide services and penalises those which do. Is that the way to encourage local accountability?
When the Secretary of State circulated documents to his Cabinet colleagues in December, he said:
"It is the time of year for scare-stories on rate increases, even from Conservative authorities."
The system has produced massive reductions in grant to Tory-controlled shires. Surrey lost £11 million in this financial year, and it will lose another £9 million in 1984–85. Hampshire will lose at least £4 million in the coming financial year 1984–85.
Hertfordshire, another Tory-controlled authority, has lost £9 million in the current year for spending at the level that the Government requested and will lose a further £900,000 in holdback. Hertfordshire will lose at least £8 million in the coming financial year, even if it accepts the Government's ceiling. The present situation in Hertfordshire is so bad that some schools depend more on covenants from parents and private fund-raising efforts than on support from Government grants. Indeed, at a recent lobby of Conservative Members representing Hertfordshire those facts were drawn to their attention. Those hon. Members expressed genuine surprise and concern about the effect of the cuts, which they attributed, in part, to the harshness of Government policies, but they refused to oppose them. That is not the way to represent the people of Hertfordshire.
In Tory Essex, too, it has been made clear that rates will need to increase by 7p in the pound in the coming year to maintain services, the alternative being serious reductions in those services. Indeed, the list is endless, and every member of the Association of County Councils will be clobbered by penalties.
Something more akin to panic seems to have gripped Tory-controlled Kent county council. Kent is in danger of being in the highest penalty list, in spite of its years of

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cutbacks. According to one of its chief officers, the county council has stopped requisitioning equipment, restricted the use of supply teachers, placed an embargo on the use of telephones in schools, and the painting and decorating of schools has been postponed. So the list goes on. It is all set out in a letter from one of the chief officers of the county council. It is not a figment of our imagination. Does the Secretary of State regard it as a scare story, or does he accept that it is the reality of life in the counties under this Administration?
In view of the examples that I have given, examples from districts, boroughs and shires, both Tory and Labour-controlled, and in view of the fact that every local authority association has condemned the report and the controls and penalties that prop it up, is it not an utter deception, a complete untruth, for the Secretary of State to claim, as he does in paragraph 7 on page 4 of the report, that
"This should enable the Government's policies for individual services to be broadly maintained"?
How can services be broadly maintained when we know what is happening, and when we know that there is more to come? Nothing could be further from reality; nothing could he further from the truth. With his now somewhat infamous computer, the Secretary of State epitomises the man who has come to know the price of everything and the value of nothing.
There was a revolt last week against the Prime Minister's attempt to devalue people's votes. How much longer will Conservative Members, who apparently feel that they have nothing to fear from their electors, go on saying to the communities that they represent, "Yes, we intend to go on voting for cuts in all your services; yes, we will vote for reductions in Government support for those who need it most; yes, we have swallowed hook, line and sinker the fact that all this is the result of a handful of Labour councils; yes, we will treat with contempt the representations made to us by our Conservative colleagues in local government; and yes, we will support a Bill to usurp democratic elections that would prevent the worst excesses of this"? With that Bill and this report, councils, communities and those who serve them are caught in a vice. The trap in this report will hasten a local government financial crisis in 1984–85. It will bring it on—perhaps engineer it quite deliberately, so as to justify the Bill.
The Opposition will work to defend all those who are threatened by the Government's policy. In doing so, we hope to leave the country in no doubt that the solutions to the problems can begin only by the rejection of the authors of the Bill and the report—this Government. I hope that the House will reject the report.
May I press the Secretary of State on a matter that I have raised before? Why has he still not introduced a second supplementary report for 1982–83? I asked him about that in December, and it is now long overdue. Does he not realise that the first such report was debated a year ago? Why is he delaying and withholding information from the House and the councils concerned? Is it because it is a somewhat serious embarrassment for him to acknowledge that this Government owe the GLC money? They owe the GLC £100 million in grant that has been wrongfully withheld. How many other authorities are waiting for grants that the Government have delayed in paying? Why cannot we have that report?
For rate support grant, the Secretary of State's ceilings represent the test that he imposes, while in his Rates Bill
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grant-related expenditure is used to undermine councils' budgets. If, in 1984–85, county councils, excluding the metropolitan counties, spend only to their GRE targets, they will lose £761 million in grant. Is that realistic? Is that what the Government expect from the shire counties? As the Association of County Councils says,
"The operation of targets has robbed G.R.E.s of their last vestige of credibility. Very few Shire authorities will be in a position to pay attention to their G.R.E.s in fixing their budgets."
For example, West Sussex would lose all its block grant if it spent at GRE level. Berkshire would lose 60 per cent. of its grant, and Kent would lose 42 per cent. of its grant. That shows how preposterous the proposal is.
The total grant lost nationally for spending at GRE level would be £1,100 million—one eighth of the entire grant available to all local authorities. It is no wonder that in an unprecedented decision the ACC says that unless these deficiencies are remedied, the Association of County Councils would prefer to see this report rejected by the House. It has never said anything like that before. The report is indeed Byzantine in its complexity and obscurity.
It is now clear why the Secretary of State has set an exclusion limit in his Bill at a figure of £10 million. That is clear from the figures in the report and those associated with it. If his test of 1983–84 budget over GRE is used to construct his now infamous hit list, the authorities that he apparently hates most—Newcastle upon Tyne, Islington, Sheffield, Tyne and Wear, Manchester, West Yorkshire and others—cannot be included on the hit list because many other authorities come out of that test far worse. The Secretary of State therefore introduced his £10 million budget caveat to ensnare the councils which, for his own political purposes, he wants to ensnare.
Can public expenditure best be controlled by restricting dozens of small authorities that overspend by a few million pounds or — as the Secretary of State believes — by tackling one or two very large authorities and using them as an example? There is patently no fairness in what the Secretary of State proposes. Will he confirm that — as reported in the Financial Times today —he is now to introduce yet another spending target, not consistent with those already in existence, so that he can finally ensnare the local authorities that he wishes to ensnare? The treatment of the GLC and the metropolitan county councils in the report seems, as was said in The Times, to be contrived to bring about an easier path to their abolition. To justify them as overspenders, the Secretary of State is imposing ceilings which it will simply be impossible for them to meet without swingeing cuts and massive sackings. The distribution of transport supplementary grant was also deliberately loaded against the metropolitan councils.
Against the background of the absurdities that are now endemic in the Government's approach to council finance, how can the Secretary of State really expect this system to endure? It simply does not work. It is grotesque in its complexity. Authorities cannot plan from one year to the next with any certainty of being able to maintain their services, and all this is done in the name of efficiency.
In a recent letter to me the Prime Minister pretended that she and her Government are committed to the protection of the individual
"where he is being unreasonably oppressed".
The Government have brought local authority finance to a totally unreasonable state. I join all the local authority associations in calling for the rejection of the report. I

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repeat my suggestion that the Minister should now institute urgent discussion with local authority associations on an all-party basis to find a way out of the mess that he and his right hon. Friends have created.
4.54 pm
Mr. Francis Pym: The hon. Member for Copeland (Dr. Cunningham) made some very good points, but I received the impression that he had forgotten too easily the state of our national finances when the Labour party left office in 1979. I must remind him that the previous Labour Government could not be described as a model of fairness in relation to local government finance. I hope that the Secretary of State will be the man to put that right.
It is with regret that I find myself in disagreement with the Government about local government. Last week I was unable to support the Rates Bill because the general powers in it go too wide and are not defined, and because it is a centralising measure. Because of those characteristics, I think that the Bill will damage the independence of local government, and all for achieving a saving that will be marginal on a national scale and, for the ratepayers affected by it, rather less than their hopes and expectations. There is a need for rate capping for those authorities which can be shown to have abused and exceeded their powers, but it must be done in accordance with criteria which are clearly laid down, and there are no such criteria in the Bill.
Today we are discussing the rate support grant report and this, too, presents genuine difficulties. The high hopes of the Government of abolishing the rates, and indeed their undertaking to do so, were abandoned before the last election. Apparently, having gone into the matter in great detail, they found that all the alternatives were worse. We are therefore continuing with the rates, which remain as unfair as they have always been. In my view, in that situation, the Government ought to have set about reforming local government in other ways and not resorted to short-term expedients such as the Rates Bill.
In the 1970 Parliament there was much talk of reform of local government finance. It did not happen then and it has not happened since, and the consequence is the present unsatisfactory arrangement of rates, rate support grant and the Rates Bill. Not many people regard that as a sound basis for local government finance. It is a botched-up method that must be straightened out. My right hon. Friend must introduce better methods in future—he has made some remarks about that—but in the meantime we can use only the existing machinery.
I fully support the Government in their efforts to contain public expenditure and wherever possible to reduce it. However, whatever method they use to achieve that must be fair as between one authority and another. Local authorities approach their responsibilities in different ways. Some regard their power to raise rates as a licence for profligacy. Others believe that their duty is to spare the ratepayer as much as possible and to be as economical as possible. The object of policy ought to be to reverse the extravagance of the former and encourage the good housekeeping of the latter. Unfortunately, that has not been done in recent years and it will not be done under this report. Indeed, the Secretary of State has ackowledged some of the shortcomings.
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I speak for the low spenders. I can tell the House about the experience of Cambridgeshire. From its inception in 1974, Cambridgeshire county council has followed the policy of economising and making savings wherever possible, and raising the minimum rate necessary to finance the services that the council and the electors feel are necessary. The policy of the county council has been to spend less than GRE and not to increase its spending by more than the rate of inflation. In 1978–79 the council introduced its own cash limit system, ahead of the Government's cash limit policy.
Cambridgeshire ought to be in the Government's good books. It should be looked up to as an example. "Here is a council that is following our guidelines, as they should all do", the Government should have said. Not a bit of it. Under this report, Cambridgeshire, for providing the services that the electors believe to be essential, and doing so in the most economical way, is to be penalised. The GRE was fixed for 1984–85 at £205·5 million, an increase over this year of 6·7 per cent. Taking all the factors into account, that was what the Secretary of State judged in his GRE. However, the block grant is based not on the GRE but on the current year's budget. On that basis, Cambridgeshire is given a target of £194·5 million, which is 2 per cent. up on this year's budget. The report states that it is an increase of 3 per cent. but in reality it is 2 per cent., because the national insurance surcharge falls to 1 per cent. in April and the target has been reduced to take account of that. Either way, it is £11 million short of GRE, and on top of that there is a further reduction in grant from 39·5 per cent. to 37 per cent.
In fact, from its first budget in 1974–75 to the current year, Cambridgeshire has seen the block grant come down from 62 per cent. in 1974 to 39·5 per cent. in 1983, a loss of income equivalent to 50p of the present precept of 129p, yet that current precept, discounted for inflation, is the same in real terms as the precept for 1974–75. That massive loss of grant has been absorbed by increased efficiency and marginal cuts in services. I think that the House will agree that that is a good record, much better than average and, I think, better than that of Her Majesty's Government. The report cuts the block grant by a further 2·5 per cent. this year.
The council's estimated budget is £198·5 million, £7 million less than GRE. If that is agreed, the result will be a penalty of £4·5 million. Although the council would spend 3·5 per cent. below GRE, a fine of £4·5 million is to be imposed. That is a tax on the electors of Cambridgeshire, and it cannot be justified. If it spent the whole of the GRE. it would have a fine of £28 million, which is impossible.
The council's proposed budget includes many savings in relation to schools and highways, privatisation and increased charges — all the things that my right hon. Friend the Secretary of State mentioned in his speech. The budget has to absorb pay awards that are above the going rate. The police and fire service awards have been agreed, and they are above not only the target but the rate of inflation. Others are to come. The budget also has to absorb the cost of new legislation, which imposes additional duties on local authorities. The Education Act 1981, the Mental Health (Amendment) Act 1982, the Criminal Justice Act 1982 and others are all sensible, progressive measures, but the cost of discharging the duties under them adds to the penalty.

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On top of that, there is the difficult question of bus subsidies. The Government want the National Bus Company to break even, which is a legitimate aim, but we should consider the problem that that causes to local authorities. They have not been allowed the money to increase bus subsidies. The alternative is to reduce services. In the rural areas, that gives rise to serious deprivation for a minority of citizens.
All that has to be accommodated in a budget that is permitted to be 2 per cent, more than that of the current year, compared with the Secretary of State's assessment of a 6·7 percent, increase. As things stand under the report and on the assumption of the budget that I have described, the rate increase will be 11 per cent. If it were not for the penalty and for the reduction of grant, the increase would be only 5 per cent. — in other words, in line with the current rate of inflation. To put it another way, the ratepayer will have to find 5·1p for penalty and another 1·5p for loss of grant, despite the council's maintenance of very careful economy.
Therefore, this low-spending authority, with one of the highest population growths, is being fined for its carefulness. The methodology that gives rise to that cannot be acceptable. The Secretary of State is not dealing with the overspenders, as he is trying to do, but clobbering the underspenders. What is worse, that fine is based on the rates, that unfair tax that the Government have failed to abolish. It will be raised not for the benefit of the ratepayer, the ratepayer's family or Cambridgeshire, but for the benefit of the Chancellor of the Exchequer.
In some respects, the districts are even more badly affected. The targets do not operate to equalise expenditure levels. I know that in theory they are not intended to, but they should. At the moment, they are exacerbating the differences. The lowest-spending district in Cambridgeshire is spending £23·28 per head this year and is allowed to spend 70p more in 1984–85 under the report. The highest-spending district is spending £63·52 this year and next year is allowed to spend an extra £1·55. Therefore, the highest-spending council is allowed to spend more than twice as much extra as the lowest-spending council in 1984–85. To put it another way, very low-spending councils can spend less than 70 per cent, of GRE and lose all their grant, and other councils can spend in excess of GRE and still qualify for grant. That does not make sense. I do not see how it can be justified to the people who are called upon to make that payment.
On a regional basis, there is no doubt that East Anglia gets a raw deal. Its grant aid is more than 20 per cent, below the average for England and Wales, at £55 per head. That shortfall has to be made up by the ratepayer, whose average earnings in East Anglia are well below the national average. That does not seem to be very just. East Anglia is the lowest-spending local government region, with expenditure of £107 per head. However, that achievement and the careful housekeeping it represents work against the region, because past spending is the significant factor in fixing targets, and not needs.
Nationally, the targets for local authorities in England are 3·3 per cent, over GRE. In East Anglia they are 4·6 per cent, lower than GRE. Therefore, low-spending East Anglia gets low grants. That is the criticism that I make. It is inherent in the amendment on the Order Paper in the name of my hon. Friend the Member for Tiverton (Mr. Maxwell-Hyslop). That is the policy that must change. The high-spending authorities should get low grants. It is
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they that have scope for savings. In putting this case, I think that I am speaking for most, and perhaps all, of my hon. Friends who represent Cambridgeshire and those in many other counties.
The present system is unacceptable. I cannot support it. My present inclination is to vote against it. My constituents did not elect me to have a tax like this inflicted upon them. We must have a better method. The Secretary of State spoke about the future. I am grateful for what he said. He said that he could speak only in tentative terms. However, can he be more specific? Can we have some clearer undertakings in the winding-up speech? Is it possible to say that next year the Secretary of State will stop penalising low spenders? Can he give them some encouragement and incentive? Can he get away from the practice of basing targets on budgets, with all the unfairness that that entails? Will he be rigorous in dealing with overspenders, not just by capping—I suspect that that is the only weapon immediately available to him if the Rates Bill is passed—but in his allocation of the block grant? Those are the questions to which I should like an answer, as would several of my hon. Friends.
My right hon. Friend has time to make the changes before next year. I, and I think many of my hon. Friends, expect big changes before he comes to the House with a report for 1985–86. I urge him to use that time to devise a method that is fair and that we can all support.
5.8 pm
Dr. Oonagh McDonald: I am glad to be able to take part in the debate, having tried earnestly to take part in the debate on the Rates Bill last week.
I listened carefully to the speech by the Secretary of State for the Environment. Once again he made vague promises and vague statements of intention about the future for Essex county council in 1985–86. However, we are particularly concerned about the coming financial year.
Members of Parliament representing Essex on both sides of the House have made more than one approach to the Government on behalf of Essex county council asking for the special problems of Essex to be taken into account. The Government this year have had something to say about the target for Essex county council. This follows repeated pleas made by Members of Parliament supporting that county. I can do no better than to quote from the briefing sent not even by the Labour group of county councillors on that council but on behalf of the county council, which has, of course, a majority of Tory representatives, as it has had for a long time past. The official briefing says:
"The rate support grant settlement for 1984/85 has set the Government's target figure for Essex at £473·5 million, i.e. a £6·5 million shortfall."
That leaves Essex with the plain choice of making further cuts in its expenditure or exceeding the Government target and incurring grant penalties.
We heard so much last week about the high-spending Labour authorities. We heard even from the Tory Back Benches about the so-called rotten boroughs in which the voters had the temerity continually to vote Labour and to allow for high rates payments and high spending on the services. In the view of the Government and their supporters, the voters had the cheek to appreciate this expenditure so much that they continued to vote Labour, despite the pleas of the Government and their supporters

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to do otherwise. The irony of it all, as we have already heard from the right hon. Member for Cambridgeshire, South-East (Mr. Pym), and we shall no doubt hear from other Members of Parliament representing Essex, is that Essex, as a low-spending authority, is about to incur the displeasure of a Government who have already ignored the pleas for additional Government help to meet the manifold problems of Essex.
Mr. Straw: Would my hon. Friend accept the further irony and twist that some authorities picked out by the Secretary of State as profligate high spenders, including Manchester and Newcastle, have increased their spending by far less than Essex or Cambridgeshire? Manchester, for example, has increased its spending by only 66 per cent, since 1979 compared with the 86 per cent, for Cambridgeshire, and has cut its staff by five times as much as Cambridgeshire, yet it has had to suffer far higher penalties than authorities such as Cambridgeshire and Essex.
Dr. McDonald: I thank my hon. Friend for his intervention, which shows the incredible irony of the Government's approach. One can only assume that the Government's approach is so blinkered that they have had their eyes fixed on certain Labour authorities and have taken no account of the needs and aspirations of voters in one local authority after another up and down the land. The extent to which the Government have ignored their own supporters in this matter was shown last week when a former Cabinet Minister, the right hon. Member for Chelmsford (Mr. St. John-Stevas), voted against the Government and at least one other hon. Member representing Essex abstained and refused to support the Government, no doubt prepared to put his money where his mouth was in the consideration of needs. The Essex authority is not only a low spender but, in the eyes of many of the inhabitants of Essex, a notorious low spender.
Reference is made in a submission from Tory Members of Parliament representing Essex to an extensive management review by the former Secretary of State, now the Secretary of State for Defence, in which he could find no areas where significant savings could be achieved in the county council. Savings may be achieved under the Government's target figure and under their threats, but those savings are at enormous cost to the community.
The county council talks about the closure of nursery classes and schools, teacher redundancies, closing the adult education service, closing branch libraries, reducing the number of firemen and appliances, and so on. The submission from the Tory Members of Parliament representing Essex spelt that out in further detail by describing the reduction of teacher numbers beyond that achieved by falling rolls, even though the present Secretary of State for Education and Science advised the chairman of Essex education authority that he should be spending more money and not less on education in Essex, up to its grant-related expenditure.
Reference is made to a reduction in the number of police in spite of the fact that the M25 through Essex has now been opened and the A13 has now been dualled, two roads that make extraordinary demands on the police. In the first six months of last year, no fewer than 500 serious road accidents in my constituency were reported by the police, all of which took their toll upon the local accident
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and emergency units. Despite the demands on the police, there has been an increase of only 10 policemen for the whole of Essex, and this from a Government who have come to office on more than one occasion with a commitment to law and order as one of their major planks. Law and order cannot be achieved without proper policing or the right number of policemen on the beat, where it matters. I am frequently in touch with community groups of all kinds in my constituency. Even local wards of my Labour party — this might surprise Conservative hon. Members — which want to see community policing in the constituency find that the county council has neither the number of policemen nor the resources to make such policing available.
Even more alarming is the possibility of Essex county council reducing its fire cover, even though, to quote again from the submission of Tory Members of Parliament representing Essex,
"Her Majesty's Inspector again warned that Essex is already substantially below Home Office requirements".
I intend to pursue this matter with the Home Office since I am not satisfied with the reply of the Home Secretary to my question today.
As the hon. Member for Castle Point (Sir B. Braine) knows, both his constituency and mine are in areas of great hazard due to the large number of chemical and oil installations, regarding which, if there were a serious fire, both he and I would be asking questions of the Home Secretary as to why adequate cover was not provided. This is nothing but alarming from the hon. Gentleman's point of view and from my point of view. I know how deeply concerned he is to protect the health and safety of his constituents.
Sir Bernard Braine: The hon. Member for Thurrock (Dr. McDonald) will know that not only am I concerned, but I have made the strongest possible representations on the subject both recently and for many years. I hope to catch your eye a little later, Mr. Deputy Speaker, to expand on this point.
Dr. McDonald: I thank the hon. Gentleman for his intervention. I hoped that I had given adequate recognition in my remarks of the work that he has done in that regard. Both he and I know that we are up against it with this kind of limit on county council expenditure in that we can no longer take for granted the safety of the constituents we represent, particularly in that part of Essex that represents the area of greatest hazard. I am alarmed and horrified —I have no doubt that the hon. Gentleman shares my feeling — with the reply that I have received to the question I tabled today concerning the Home Secretary's apparent dismissal of these anxieties and the fact that the Secretary of State for the Environment is obviously not prepared to take these serious matters into account.
Suppose that there were that sort of serious accident in Essex, which neither the hon. Gentleman nor I would wish. He and I, along with other hon. Members who may have constituents working in the area, such as the hon. Member for Brentwood and Ongar (Mr. McCrindle), would come to the House and demand to know the reasons for the failure to protect our citizens. The rate support grant target shows us the reason. It is the Government's penny-pinching, narrow-minded and ideological viewpoint. In attempting to pick out "rotten" Labour boroughs,

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the Government are prepared to penalise vast sections of the population by putting them seriously at risk through cuts in expenditure.
Less dramatic risks are incurred by cutting social services expenditure. The county council's brief warns of the possibility of closing homes for the elderly. I regularly visit such part III accommodation in my constituency and I know of the increasing demands made on staff there by general cuts in public expenditure. Cuts in NHS spending mean that geriatric wards may be closed and patients who would normally be cared for in those wards are often put into part III accommodation. That puts enormous demands on the staff of those homes. I do not criticise them; the staff in my constituency work extremely hard, but they are not doctors or nurses and the demands made on them because of the dependency of patients are much higher than they used to be.
Another consequence is that many elderly people who ought to be in part III accommodation have no chance of getting it and are cared for by such warden services as can be provided by district councils and by the county council's home help service. Many of those elderly people live miserable lives because of the cuts that have already taken place.
Less dramatic are the effects of cuts in education. Essex county council's brief refers to cutting nursery education. Cutting nursery education in Essex would be virtually to obliterate it. There are only two nursery schools and 38 part-time nursery classes in the county. The county council reduced expenditure on nursery education to £2·80 per child last year and imposed further cuts in the current financial year.
The penny-pinching of the county council can be demonstrated by a recent example from my constituency. Herringham primary school, which I visited on Friday afternoon, was burnt down by an arsonist. There may be little that we can do to stop arsonists, but the school governors have repeatedly asked for a resident caretaker or an alarm system connected to the local fire station or police station. Those requests have been ignored, and now that the school has been burnt down the much greater expense of rebuilding it will have to be incurred. Penny-pinching may not only impose great burdens on those on the receiving end of restricted services but may prove a short-sighted policy.
Essex county council has a comparatively low achievement in secondary school examination results, even though the county is comparatively well favoured. I do not include my constituency, most of which counts as an educational priority area. There are 63 local education authorities with more than 4,000 school leavers. In the academic year 1980–81, Essex came 24th in the O-level stakes and 47th in the A-level stakes. That was a pretty poor achievement in a county where many children— not all — do not face the sort of problems faced by children in the ILEA area.
Cutting expenditure in Essex could lead not only to serious risks but to an impoverished life for children, the elderly and other groups that depend on the services provided by local authorities. Essex is not a high-spending authority; it is a low spender. It is a Tory-controlled council and 15 of the 16 parliamentary constituencies are represented by Tory Members. I hope that every one of those Members will join the Opposition in the Lobby to
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vote against a target which they must know in their hearts Essex cannot possibly achieve without imposing intolerable burdens on all our constituents.
5.26 pm
Mr. Robin Maxwell-Hyslop: On Friday, I tabled an amendment to the substantive motion before us. I did so in an attempt to focus the debate on what I consider to be the principal defects of the report which can be remedied only by its withdrawal.
It is often not known outside the House to what extent Parliament lacks any power of amendment. Although the report is not a statutory instrument, it is unamendable by either House. It can only be accepted or rejected. I believe that it ought to be rejected, in the words of my suggested amendment,
"because it increases the proportion of local government expenditure which is financed by an unjust rating system and it embodies a system of financial penalties which are based on 'targets' which are historically based, thereby penalising consistently low-spending councils for their history of economical adminstration and expenditure."
There are many other points that I would wish to make, but my principal focus is on those issues.
It is not enough for my right hon. Friend the Secretary of State for the Environment, whom I am glad to see in the Chamber, to promise us jam tomorrow. No sudden emergency has descended on him or the Government to bring about the necessity for an order that does those things.
As long ago as May 1981, my right hon. Friend's predecessor as Secretary of State—not a junior Minister— received from the Mid-Devon district council a deputation which I had the honour to lead. We drew specific attention to the defects in the rate support grant system, embodied in targets, and in the grant-related expenditure formula, as currently employed. We do not depend upon the memory of the then Secretary of State, which could not in personal terms extend to the present one. The deputation left behind a most admirable document called "Block Grant Formula" which, I suppose, was passed on to his successor. Therefore, it is not sufficient to say, "Here am I at this stage; there is nothing I can do now; let us save it all until 1985–86," or that argument becomes one of the perpetually receding future. This is the encapsulation of the doctrine of mañana", which is not acceptable to me or to a number of my right hon. and hon. Friends.
There are several reasons why the rating system is so grossly unfair, of which the principal is that it measures neither the benefit received nor the capacity to pay It is paid by between one third and one fifth of the local government electors. It is paid only by householders and, moreover, only by householders who do not have it paid for them in supplementary benefit. This factor is well recognised by my right hon. Friend the Secretary of State, because he used it as one of his main arguments on Tuesday of last week in support of rate capping. As he said, the arduous and cruel effect of excessive rates on local government electors can affect such a small proportion of them that it is not an effective antidote to excessive local government expenditure. However, that argument, which he put forward convincingly, is wholly incompatible with increasing the proportion of local government expenditure that falls on that system.
One of the ingredients of the report is the proposal to increase the proportion of local government expenditure that falls on a rating system which is universally

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condemned, except by those who have a professional interest in maintaining it. That is the first reason why the report should be rejected, and I plead in aid the speech made by my right hon. Friend the Secretary of State on Tuesday of last week.
The second reason is that it is not even based on the highly inaccurate system of assessing needs which GRE is. It is wrong not in principle but in practice and detail, because it is based on targets. That polite word means, "As you have done, so shall you do." That means that local authorities that have been consistent low spenders because the resources of those who pay rates are tiny in national terms are penalised by having their target historically based. This cannot be right, yet it is done. Over and again we are told—not always with the full glare of publicity —that it is done because there is no way in which the full extravagance of the high spenders can be checked that will have the result that their high spending is acceptable to the Government in budgetary terms.
I am the first to say that the system, used when my right hon. Friend the Member for Old Bexley and Sidcup (Mr. Heath) was in government—I wish that he were here today, because his memory seems short and defective— and by the Liberal-supported Labour Government—none are guiltless in this—which is a system of clawback, directly punished everyone for the sins of the few. The clawback system resulted in a reduction in grant if the total expenditure was more than the Government had anticipated. That not only punished everybody, but it punished them unpredictably. It usually meant that it was impossible for local authorities to budget, because they did not know what their resources from Government would be after the clawback and, as they were incapable of knowing—it was unknowable — by what percentage extravagant councils would overspend, the economical councils could not estimate in advance what their revenue from Government would be.
It would have befitted my right hon. Friend the Member for Old Bexley and Sidcup, who was Prime Minister of a Government that employed clawback, to have admitted that when he was speaking and castigating central Government for interfering with local government. There could not be a greater interference than clawback, for the reasons that I have given.
However, that does not justify the target system, and cannot do so. Moreover, the target system is accompanied by another pernicious device that affects low spending, and that is the notional rate, which is not always in the forefront of the minds of Members of Parliament or Ministers when considering this system. I digress for a moment into what is in the forefront of the minds of Ministers. After correspondence and a meeting, I received a ministerial letter explaining to me the central Government basis of finance for renovation and repair grants. I received this after a meeting with a local government treasurer. As I read through the letter from the Minister concerned—my right hon. Friend the Secretary of State — I realised that the arithmetic of it was incomprehensible, by which I mean not that I could not understand it, because I could, but that it could not be right, as it was not. When I referred this back, it was agreed that it was not a correct statement and that what I had believed to be the case was the case.
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I mention this not only because the civil servant who prepared it was clearly in error but because, if the Minister who signed it thought that it was right, he did not understand the system by which central Government finance the renovation and repair grant. It is necessary that Ministers should understand the system if they are to make value judgments about whether it needs to be altered.
The renovation and repair grants, which were advertised as being available up to and at 90 per cent., had severe repercussions on local government finances because they can be taken up any time in the year during which the local council agrees to them, but that period of a year extends beyond the financial year of the councils concerned. Therefore, the second-tier authority concerned has no means of confining the expenditure of funds on those grants within the financial year for which it has budgeted, and for which it knows what provision will be coming from central Government.
Presumably, central Government want local authorities to scrutinise the builders' tender for this work, 90 per cent. of the cost of it falling on central Government, and therefore, if local authorities do not carefully scrutinise each tender to make sure that inflated bids are not being put in because of the sudden increase in the repair and renovation work, this necessarily involves a vast increase of work that only specialist personnel can perform. Only they can know whether a tender for given work on an old thatched house built of cob, which is clay and cowhair, is or is not reasonable. Only they know whether that repair needs to be done in the terms of the tender and whether a site visit is necessary, not to prevent the local authority from being taken for a ride but to prevent my right hon. Friend the Minister from being taken for a ride. He is paying 90 per cent, of the bill. Yet that is not compatible with enjoining local authorities to reduce their staff. It is that sort of conflict between what the right hand is recommending and what the left hand is doing which causes more than a little irritation, if not despair, at local government level.
It is not only reasonable but essential that central Government must be able to budget. They must know for a given year what will be the calls on their resources in rate support grant. They cannot, therefore, have a system of percentage grants that is open-ended to local authorities and allow expenditure which affects grant. I take it as axiomatic that there must be that control. I do not object to rate capping in cases of gross extravagance, not least because there was a specific commitment by the Conservatives to do so at the previous election.
I recommend to hon. Members that they reject the report because, instead of replacing a rating system which is inherently unjust and, even by the Government, admitted to be an ineffective vehicle for controlling rate increases, the proportion of expenditure dependent on that condemned system has increased. Targets freeze, as a penalty, the practice of economic administration. That is the opposite of that which the Government should be considering. There is no remedy before the House at this stage other than to vote against the report. Unfortunately, having spent two hours pointing out the defects of the system, including GRE, it is asking too much that I should be invited to take on trust for yet another year the assurance that these defects will be remedied.
I shall give the House some examples of defects in GRE. There is an element for coastline, because coastal costs fall on local authorities with coastlines. How many

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right hon. and hon. Members are aware that under GRE the coastline element is proportionate not to the mileage of coastline but to the population in the local authority area? The cost is obviously proportional to the mileage of coastline, yet the GRE allowance for Bournemouth is proportional to Bournemouth's population, and the same is true for west Cornwall, despite its huge mileage of coastline. It is the Minister's job to correct that nonsense. It is no good his saying that the local authority associations have not done his job for him. They are not homogeneous bodies. They represent local authorities of wholly disparate natures. Even if there is a heading under GRE for a multitude of considerations, the quantum put on that heading is even more important than the existence of the heading.
I hope that I have demonstrated within the limits of time which you, Mr. Speaker, asked us to impose upon ourselves the shortcomings of a system which we are asked to approve or negative today. I shall vote against it.
5.54 pm
Mr. Gordon Oakes: I am delighted to follow the hon. Member for Tiverton (Mr. Maxwell-Hyslop) because he made a direct, forceful and detailed speech and is not prepared to accept jam tomorrow. I hope that the right hon. Member for Cambridgeshire, South-East (Mr. Pym) will likewise reject the jam tomorrow approach. I shall try to prove to the House that they are right, especially as the Secretary of State for the Environment said that the position will be altered in view of the rate-capping Bill. The rate-capping Bill will make matters worse, not better, for prudent authorities.
I have no financial interest to declare, but I am one of two vice-presidents of the Conservative-controlled Association of County Councils. I am delighted that my co-vice-president is present, and hope that he, too, will catch your eye, Mr. Speaker. As my hon. Friend the Member for Copeland (Dr. Cunningham) said, and to my knowledge—I have been dealing with rate support grant as a member of both Government and Opposition parties for 12 years — we have a unique statement form the Conservative-controlled ACC. In a letter to me and to other hon. Members, dated 19 January 1984, the Association of County Councils said:
"Unless these deficiencies are remedied, the outcome would be so unfair that the Association would prefer to see the Report rejected."
The main body of Conservative local government opinion would prefer the chaos of no grant at all to the chaos of the proposed legislation. The statement is unique and one that I have never heard from a local authority previously.
In his speech the Secretary of State was fond of citing profligate authorities, which were all members of the Association of Metropolitan Authorities. He did not cite one county authority. In the winding-up speech perhaps he will tell the House whether any of the Conservative or Labour-controlled county councils, which are so burdened by the rate support grant order, are considered by him to be profligate, because they will all suffer from the rate support grant whether they are profligate or not.
The Association of County Councils went on to demonstrate some of the effects of the rate support grant on members of the association. It stated:
"In 1983–84, 14 Shire Counties have planned to meet the Government's targets."
Nothing could be fairer than that. It further stated:
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"For 1984–85, they will be penalised by grant being withheld if their spending is increased by more than 3 per cent. The Treasury estimate inflation for 1984 at an average of 5 percent. Is it fair (or indeed realistic) to expect those counties to budget for a 3 per cent, increase?"
It is not realistic. Today negotiations are going on between local authorities and public sector unions. The local authorities, pressed by the Government, will hold out for 3 per cent., which will be unfair, since public sector workers are already slipping badly because of Government policies. They will be entitled to go to arbitration, and, if they do, I am convinced that they will be awarded at least double the 3 per cent, proposed by the Government. What will the prudent and excellent authorities, to the Government's mind, do under this measure when they face a 6 per cent., not a 3 per cent., increase in their wages bill?
The association also deals with GRE, which is Whitehall's — the civil servants'—assessment of what the spending needs of an authority should be. It states that a comparison of the calculated figures with the arbitrary targets that the Government propose to use for penalty purposes
"produces surprising and disturbing results which must call into question the entire validity of the targeting exercise. Thirty-three of 39 Shire Counties have GREs above their target in 1984–85, and so would be penalised if they were to spend at the Government's own assessment of their spending need—ie, the GRE. Were they to spend at GRE, Shire Counties would lose £761 million of grant in penalty and at least one authority"—
I think West Sussex—
"would lose all its grant."
The rate support grant produces bizarre results, with the targets set by the Department at complete variance with the GREs set by the same Department for those authorities.
As a way out of the dilemma, the Secretary of State introduced his jam tomorrow argument, based on the rate-capping Bill that created so much dissension in the House last week. Representatives of the Association of County Councils, my authority of Cheshire — which is Conservative-controlled — and every district council in Cheshire, Conservative and Labour-controlled, came to London last week to ask all Cheshire Members bitterly to oppose the rate-capping Bill. One reason why the authorities oppose the Bill is that, in one calculation made by the Department of the Environment, Cheshire is 10th in the Government's hit list, and therefore might be included in the specific part of the Bill, and in another calculation it is 110th. Local authorities do not know from month to month how popular they are with the Government. Targeting has become the principal activity of their staff during the past one or two years. I suggest that it is a wasteful activity.
Cheshire is a prudent authority, and no Government could regard it, whether Labour or Conservative-controlled, as anything but normal and prudent. However, it may be on the specific list in the Bill. The district representatives who visited London were confused by the general list, and everyone was frightened of what the Secretary of State proposed to do by including that general list in the Bill, despite the revolt of many of his hon. Friends last week. The list excludes authorities whose gross expenditure is less than £10 million, but no one has yet told the authorities, or the House, whether that sum includes the housing revenue account. If it does not, only one authority in Cheshire — Warrington — would be affected. If it includes the housing revenue account. every

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district council in Cheshire will be affected. The rate-capping Bill, which the Secretary of State prescribes as the reason why he can give jam tomorrow, is completely mistrusted by all local authorities.
Some Conservative Members may agree with me when I say that once the Bill is implemented the Government will discover that high spending is not the equivalent of a profligate council. High spending relates to the needs of the area. If the Government cap that council, it will be in great difficulty, because the statutory services must still be provided. The Government will say that the council cannot raise a penny more in rates. If it does, the rate will be void and the authority will become bankrupt—that is unheard of in local government—because it does not have the resources to pay for those essential statutory needs, unless the Government come to its rescue.
That is what the chairman of Surrey county council meant in his letter to the press, when he said that the Bill could divert resources towards, not away from, high-spending authorities. The Secretary of State's jam tomorrow argument was based on that premise, and before Conservative Members vote tonight they should bear it carefully in mind. I suggest that they cast their votes as the Conservative-controlled Association of County Councils suggests—against the Bill.
Local authorities object to rate capping and to this measure because of centralisation — the belief that Whitehall knows best. I shall prove to the House that reliance on Whitehall, whether on GREs or on rate capping, leads not to savings but to horrendous waste. Let us take a hypothetical authority in mid-Wales, Northumberland or any part of Britain where land is fairly cheap. The district council decides to spend £80,000 per unit on prefabricated council houses. What joy that would provide to Ministers and Conservative Members, who could cite that authority's spending as an example of waste that the Government could have curbed. Let us suppose, further, that the figure of £80,000 for each prefabricated unit proved to be wrong and that each unit cost £133,000 even before it had been built. What glee we would see on Conservative Members' faces. That is exactly what has happened in the Falkland Islands fiasco, yet the mandarins of Whitehall have the audacity to tell local authorities that central Government can spend money in an area better than the local council.
Mr. Tony Banks: What is the GRE for the Falkland Islands?
Mr. Oakes: The Falkland Islands, with such a small population, would represent only a parish council—not even a district council.
When Whitehall makes a mistake, that is the sort of massive mistake that it makes. A local authority may make a mistake that costs £10,000, £100,000 or even £500,000, but Whitehall makes mistakes with a vengeance.
If the Ministers drove on roads in many northern counties today, they would discover that those roads, including some main roads, were not gritted, because local authorities are so scared of incurring penalty that they will not pay the overtime rate on a Sunday for four or five men, for petrol for the lorry or for sand and salt. The result of that penny-pinching is tremendous delay for many people, loss of production because people arrive late at work, accidents to vehicles, thus causing enormous cost to
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insurance companies, and, worse still, injuries to people, who then become a cost on the NHS. It may even result in death in some cases.
Mr. Banks: Hon. Members need not travel that far to see a similar example. Earlier the Secretary of State extolled the virtues of Wandsworth council compared with Lambeth council next door. During bad weather Lambeth grits its roads; Wandsworht does not.
Mr. Oakes: That is a good example, but I especially quoted northern authorities because the amount of snow in London bears no comparison with the north.
A county or district council must provide insurance for the people of its area against unexpected events. In an excellent speech, my hon. Friend the Member for Thurrock (Dr. McDonald) mentioned a number of the more obvious activities—education, social services, and so on. County councils provide other services that we do not even think about unless we need to do so. My hon. Friend the Member for Thurrock said that one of those is the fire service. That is a form of insurance for the people.
In Cheshire, members of the Fire Brigades Union are currently justifiably engaged in industrial action. They are protesting against the actions of the county council, which, because of the Government's attitude towards it, is trying to reduce the fire budget by £100,000 next year. That reduction will mean that some major industrial areas, such as Warrington, Chester and Crewe, will be manned only in the daytime to save some jobs and some expense.
Rightly, the actions of those members of the Fire Brigades Union are not affecting the public. Emergency calls, whether or not they are about fires, are being accepted. In the storm trouble last week, firemen attended those who got into trouble. However, they are not undertaking fire prevention duties, the cleaning and maintenance of fire engines, and so on.
The Conservative leader of Cheshire county council has said that the reduction is necessary because the provision of fire services in Cheshire is 14 per cent, above the average of the other counties.
The Secretary of State has quoted the Auditor General and tried to compare one authority with another, but what he said is typical of the nonsensical statements that result when one cannot compare like with like.
Cheshire has three major motorways, and motorways are notorious for creating accidents that involve the calling out of the fire service. It is probably the county with the highest percentage of dangerous chemical cargoes travelling along those motorways, and any prudent council would make provision for that. It has two major petrochemical refineries, and the major centre of the chemical industry is situated in my constituency. The largest storage centre for British Gas for the whole of the north west area is located in Lymm. How can it be argued that a county with such problems should not provide 14 per cent, more than the average for its fire service, which, after all, is insurance?
When I speak of the fire service in Cheshire, I speak not of the burning down of the occasional hay rick or of a cat trapped up a telegraph pole. The fire service there must deal with major hazards and risks, of which any prudent council must take account.
The Government may well suggest that the fire service should be privatised. That has been done in the past. In the old days, each insurance company provided its own fire

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engine. If someone was insured, he put a plaque outside his house giving the name of the insurance company, so if a fire engine arrived it could take great care not to put out a fire that was not covered by its own company. Such nonsense can result if we delve too deeply into privatisation. That is an example of what is happening to the essential services of the counties.
The Government have also asked local authorities to do many things since the last rate support grant settlement. Cheshire has been asked, and would dearly love, to set up an extensive youth training scheme, because in my area unemployment is above 20 per cent. The county council dare not do so, because, if it obeys the Government, it will incur penalties.
Halton council, my own district council, is Labour-controlled. Indeed, the Secretary of State's predecessor twice complimented it for being an excellent authority financially. Its rates have not gone up for two years. That authority wanted to accede to the Government's request to give home improvement grants, with which we all agree. Home owners need them and they are good for the housing stock and the building industry. Such grants were popular with home owners. But Halton council had to stop them in mid-stream and say, '"No more", because they were open-ended and the council did not know how many applications would be made, As a result, it did not know whether it would be penalised through the rates, even though it had kept the rates steady for the past two years.
Such nonsensical results can flow from the rate support grant proposals now in front of us. The White Paper is nonsense from beginning to end. Indeed, it is dangerous nonsense that is wasting money, time and people's lives. When the Government present such hocus-pocus, the only answer is decisively to reject it in the Lobby.
6.6 pm
Mr. Maurice Macmillan: I shall be extremely brief and deal solely with the impact of this measure, combined with the Rates Bill, on the electors, ratepayers and taxpayers of Surrey. I thought that the right hon. Member for Halton (Mr. Oakes) was trying to do my job for me when he quoted the Surrey county council chairman, which I shall also do.
The present rate support grant system has probably a greater impact on county councils, especially on the shire counties, than on the districts that make them up. Broadly speaking, the amount of grant that the districts receive pretty well mirrors the amount of precept that they must pass on to the counties. Generally, the districts pay for their own expenditure out of their own rates.
This has an effect on the Minister's arguments. The Under-Secretary should address his attention to the extent to which action to reduce county council expenditure is pre-empted because so much of it goes on the wages and salaries of the education and police services — the greater part of the overall expenditure of shire counties. That gives them less room for manoeuvre than other types of authorities.
Whether or not this is a relevant factor, there can be no doubt that targets—as my hon. Friend the Member for Tiverton (Mr. Maxwell-Hyslop) so effectively argued and referred to in his amendment — are a bad way of assessing expenditure limits for those who have done their best to meet the Government's requirements and to economise as far as possible.
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Surrey had been very badly done by, even compared with other shire counties. Its block grant is only 16 per cent, of the target it has been set. Even West Sussex, badly treated though it is, is to get 28 per cent., Buckinghamshire 28 per cent, and Kent 45 per cent. In the last 10 years, Surrey's block grant has gone down 10 per cent, in cash terms in a period when the retail price index rose threefold and when the national rate for grant rose by almost the same amount. For example, if Surrey were to spend its target, the grant would amount to £49 per person, whereas the average English county would get £139 per person.
Now the 1984–85 proposal is to cut Surrey's block grant by a further one sixth. That is proportionately the biggest cut of the lot, with the exception of Avon. My right hon. Friend the Secretary of State kindly gave us a small crumb of hope when he said that in the 1985–86 arrangements he would try to meet those target difficulties. However, I am a little doubtful about his ability to do so, in view of the impact on his finances of the Bill that he is now forcing through the House. But, regardless of whether he can do so, it is not quite enough, particularly for Surrey, because we are oppressed by an erroneous linkage between high rateable values and the actual ability to pay.
Surrey has a supposed greater ability than other counties to pay high rates, because of so-called "high resources". However, there is no connection between high rateable values and the capacity of ratepayers to pay. That is particularly true of counties such as Surrey where there are many elderly people whose incomes have not increased but who still live in the houses that they lived in 30 or 40 years ago. Their rates have increased spectacularly.
The Minister has accepted the discount principle for parts of Surrey that are now in the metropolitan area. At the end of the debate I hope that my hon. Friend the Undersecretary will let us know whether the Department will consider doing the same thing for other parts of Surrey. If Surrey was permitted a mere 0·95 poundage discount, it would not have to face an RSG cut next year.
One of the difficulties that we face is that it is almost impossible to debate such matters sensibly, because of the abstruseness and irrelevance—no doubt accidental—of the method of calculating RSG and the other factors in the assessment of rates. The method of presentation makes the whole issue even less clear. If I did not know my right hon. Friend the Secretary of State and his colleagues so well, I would have thought that they were deliberately trying to confuse the House. However, I know from having dealt with these matters in conjunction with members of the county council that they are inevitably confusing, however much one tries to clarify them.
That means that it is very difficult to calculate from the formulae supplied the ratio between a reduction in spending by an overspender under the new Bill and the increase in RSG that that overspender will receive as a result. It is not easy—and may not even be possible—to calculate it in advance, partly because a secondary local poundage is calculated based on area rateable values, in addition to the standard grant-related poundage. However, it is possible to make some meaningful comparison between the differential of the rate support grant and the differential of the main formula for the grant-related poundage.
In so far as the dominant force in calulating the RSG will be this main formula, at least for the initial, large reductions that the rate-capping Bill intends, we can take

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the resulting ratio as a useful guide as to what might happen. I am saying not that this is an accurate way of assessing the link between the reduction in overspending and the increase in rate support grant but that a ratio that can be established as part of the criteria for that link is at least an indication of what is likely to happen.
Subject to what I have said, for every pound of overspending that rate capping prevents, the RSG will rise by at least about 25p. That means that if the rate-capping Bill reduces local authority overspending by £500 million altogether, the RSG will have to be increased in total by £125 million. Savings of £500 million produce an overall increase in the RSG of £125 million. However, the cash limit for the overall RSG is fixed at £9,323 million. If that is so, the only money for reimbursing the black sheep that have repented will come from the poor white sheep that have never strayed. I think that that is what led the right hon. Member for Halton to mention the letter to the Financial Times from the chairman of Surrey county council, who pointed out that in those circumstances the money could not come from anywhere other than the more prudent councils.
Therefore, I am a little wary about the assurance that my right hon. Friend the Secretary of State gave to the shire counties, and particularly to Surrey, to the effect that through the new Bill he would be able to release resources that would be available to give them a better deal next time. I hope that my hon. Friend the Under-Secretary will give an assurance that, if he is disappointed in his attempts to raise more money from the Bill, he will see that the unfairness that has been described by hon. Members on both sides of the House in respect of low spenders, and the shire counties and, of course, Surrey in particular, will be dealt with, regardless of the Bill's effects. If he cannot give that undertaking, the assurance that we have had is not very convincing. If he cannot give an overall assurance, he is basing his possibilities of doing justice to those that are now unfairly treated on something that is unlikely to happen. That is my main point.
I voted against the rate-capping Bill and, unless I receive a positive assurance that Surrey's RSG for 1985–86 will be very different, I think that I shall be forced to vote against the motion, rather than merely abstaining. However, I shall do so with great reluctance, and not because I am opposed to my right hon. Friend the Secretary of State or seek his resignation, or because I am against the great efforts that the Government are making, but because it would be wrong not to vote against two measures that separately damage all my constituents and which, taken together, could damage them very much more.
6.17 pm
Mr. Simon Hughes: After about two and a half hours of debate, it is noteworthy that, apart from the Secretary of State's opening speech, we have not so far heard a word in support of the report on the RSG. Most eminent and respectable Conservative Members from different counties in England—we have not yet heard about Wales — have clearly and graphically expressed the folly that the Government are now propounding as their policy for local government finance.
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To misquote somebody perhaps even more eminent than any hon. Member, it could be said that the RSG saga is a tale of arbitrariness told by an autocrat, helped out by a bureaucrat, full of statistics and contradictions, signifying muddle and injustice. The anomaly is that it makes the Government's policy as a whole illogical. We are discussing the funds that local authorities spend on, for example, education, the social services and the police. For every cut in funding to education, there may be a commensurate reduction in the qualifications of those coming out of that education process, and it is likely that they will be less equipped to find jobs. As a consequence, they are more likely to be unemployed and to demand benefit from the national budget. Every time that a cut is made in social services, it is likely that a person will have to be cared for in the community by the National Health Service instead of in the home. The national costs will be greater because needs cannot be met locally.
Government policy has already created 4 million unemployed. This policy will impose even greater burdens and move the country further towards becoming a handout state. The Government set themselves against people being dependent on the state, but that is made more likely when local authorities are less able to deal with the problems and needs of our constituents and their electors.
The same policy has now been pursued for many years. The hon. Member for Tiverton (Mr. Maxwell-Hyslop) tried gently to implicate Liberal Members in shoring up the previous Labour Government's similar policy in terms of block grant and rate support grant. For many years, however, Liberals have argued that the whole edifice of local government finance is ramshackle and that the rating system needs wholesale reform. I hope that at the end of this debate it will be clear that wholesale local government financial reform is needed. Everyone knows that the rating system is inadequate because it does not charge the citizens fairly for the services that they receive or need. The old structure is no longer able to sustain the scaffolding that the Secretary of State now seeks to build upon it.
The amendment, which has not been selected, expresses the views of many inside and outside the House. It is also our view that the rating system is unjust. The system must be changed, not just tinkered with. The trouble is that the present system is simply a device that the Government engineer with more complexity each year. They try, but fail, to buy off their supporters in areas represented by Conservatives at local and Government level by reducing the penalty that those authorities incur. The system has often been amended to try to improve it where the Government are vulnerable. That tinkering and adjustment has not succeeded, and we have seen through the Government's policy.
Many hon. Members have referred to the uniquely strong view of the Association of County Councils. None the less, of the 107 authorities that the Secretary of State said on 14 December were to have their targets increased, only three are metropolitan authorities. The policy affects not only the shire counties but metropolitan areas.
Perhaps most amazing is that the policy shows that the Government have no confidence in their own party members who run the shire counties. Conservative members, standing on Conservative manifestos, have been elected to run most of the shire counties. The Government clearly have no confidence that they are competent to decide expenditure levels. The Government say, "We do

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not accept that those are your needs. We do not accept that, although we in Whitehall work out what we think you should have and what the grant-related expenditure should be, even that is an acceptable amount to spend. We shall penalise you even if you meet our target when you think that you should spend more."
That proves that the Government have no confidence in their system. By this legislation, the Government are also condemning their own party's many elected and diligent representatives. We have heard of examples. We have heard that 33 out of 39 authorities in the Association of County Councils are complaining. West Sussex will suffer a £59 million penalty, Kent £95 million, Essex £65 million, Berkshire £30 million and Cambridgeshire £29 million. If the 33 authorities in question conform with the Government's grant—related expenditure targets—they will incur total penalties of over £750 million.
As the chairman of the Association of County Councils said, the reality facing shire counties is that they are being required to achieve targets based on arbitrary judgments. Subsequently, he said:
"For the first time ever, every single one of our 37 English member counties will be seriously affected by the new penalties announced by the Government. This represents a dramatic worsening of the situation."
This month the same chairman said:
"I am astonished that local government is expected to live within an inflation rate that is substantially less than that which is facing the rest of the economy."
The target for the authorities is 3 per cent., whereas inflation is projected at 5 per cent. The chairman went on:
"The truth of the matter is that local government will face the same level of inflation as everyone else. Therefore, on the Chancellor's own forecast of inflation for 1984, the ratepayers will face abnormally high increases or serious cuts in services, or both."
Mr. Charles Morrison: The hon. Member for Southwark and Bermondsey (Mr. Hughes) said that local government faced the same inflation as everyone else. He is not quite right. Local government faces higher inflation since it is so manpower oriented.
Mr. Hughes: That is true. The largest element in any local government budget is manpower.
Mr. Straw: Does the hon. Member for Southwark and Bermondsey (Mr. Hughes) accept that large parts of pay increases are negotiated nationally and that local authorities have no control over them? I refer in particular to police pay.
Mr. Hughes: Not only that, but a large bulk of local authority expenditure is fixed from year to year-for example, debt repayments. It is not possible in a short time to adapt budgets to targets that involve large cuts.
Today's debate has contained many illustrative examples, but substantive arguments are also involved. In September, Warwickshire made representations to each of the five Conservative Members who represent that county. The representations were also directed to the Secretary of State. The county, which has always been Tory-controlled, said:
"Warwickshire's position is perilous. To meet Government spending guidelines it has to make cuts of £10 million. This would mean, amongst other things, fewer teachers, much bigger classes in schools, the abandonment of school meals, the closure of old people's homes and even the closure of police and fire stations."
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Dealing specifically with the Secretary of State's exhortation of the Audit Commission and the desire to ensure an objective assessment of the economy, Warwickshire county council said:
"The accounts office has done virtually everything it can to make economies without cutting services. One of the country's top firms of management consultants, Coopers and Lybrand have examined the council's books and concluded that there is little or no waste and the only way big savings could be made was by making big cuts in services."
The Audit Commission published a statistical profile of each authority, in which Warwickshire is shown as the lowest spender within the family of low spenders in similar circumstances. It is not surprising that this month, four months after having made those representations, the clerk to Warwickshire council writes to hon. Members representing constituencies in that county stating:
"In view of the support and encouragement we have received from you"—
the Members of Parliament for the county of Warwickshire—
"and the sympathy from the Minister regarding the justice of" our case we have been very concerned to discover that the trouble we have taken with our representations has got us nowhere at all; in fact the penalty situation is even worse than had been anticipated.
Since our representations the County Council has again considered its own budget plan and as a result has proposed reductions in current spending of £6·5 m. by 1985/86 rather than the £3 m. previously proposed.
It struck us as ironic that when the RSG settlement was confirmed and the provisional target set at £158 m. for 1984/85, the same document gave us a Grant Related Expenditure …of £163·8 million."
That is £5·8 million higher.
The letter concludes:
"Our main objection now must be to the proposed penalties without which it would be possible for us to keep rate increases for this and succeeding years within the rate of inflation while maintaining services at the level at which both the ratepayers and central Government would expect. If the penalties are to remain at the levels proposed then our reserves could soon be exhausted. Without large cuts in services the ratepayers would then face massive rate increases, not due to real increases in this Council's spending, but due to decisions taken by Members of Parliament about penalties."
To take another example, Cornwall is having to cut its police force, despite the fact that more serious crimes were committed there last year than in any police authority outside Greater London. The cut is against the wishes of all parties representing local government authorities.
It is not true to say, as the White Paper on the rate support grant suggests, that the proposals will allow the level of services to be broadly maintained. If that is the definition of "broad", the English dictionary is being rewritten by the Government.
The ludicrous nature of the proposals can be seen in those authorities that the Government have picked as overspenders. I declare my interest as a ratepayer of the London borough of Southwark, which features variously as an overspender in different positions in lists, depending upon which arbitrary criteria the Government put together to form the list at the relevant time.
The targets for the so-called low-spending authorities are cash increases of 3 per cent., which is a loss in real terms as inflation is 5 per cent. The targets for high-spending authorities are cash cuts of 6 per cent.—a real cut in one year of probably 11 per cent. That cut does not take into account the nature of the services, as the hon.

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Member for Tiverton said, which depend on manpower and other factors. The result is that the average statistical reduction is even less than the real figure.
The bizarre position is that the Government have accepted that local authorities overall need to spend more. The targets compared with last year have increased slightly, but inner London has a target of 2·4 per cent. less. It seems that the needs of London are recognised by the Government week after week in the form of urban aid schemes, development corporations and partnership schemes. There are any number of Government schemes which offer financial assistance to the inner city. In spite of all that, the Government are taking away the main budgetary support mechanism that they invented for supporting the inner cities.
Not only in Southwark has an arbitrary figure of population reduction of 6,000 been assessed for one year—clearly, the population has not reduced by that number — but the Government presume that when a population decrease takes place the level of services can be reduced proportionately. It is often the case that those least dependent on services move out and those who are most dependent remain. It is not correct to say, as the hon. Member for Tiverton also said, that it makes sense to use the formulae that are in the appendices at the back of the report to work out a fair grant related expenditure by multiplying the figure, which is worked out in Whitehall, by the number of people in the county or borough and say that the resulting total is the level of demand. It is not true to say that there is an equivalent amount of tourism per head of the population in Brent compared with Westminster, but the formula is the same. If one examines the list of elements which make up the grant related expenditure assessment, one finds throughout the same anomalous assessment of different elements. The system is arbitrary, illogical and totally unjust.
High rates are acceptable if people believe that they are getting value for money, and that is the test. People are prepared to pay for what they think is a good service. That is how they shop and how they will be happy to live. The rating system has all the inadequacies that I have set out. The amazing folly is that since 1979 the rate support grant system has been modified not only yearly but also during each year. Proposals were made to reform the system by way of a referendum, but they were eventually withdrawn by the Government. Now the Rates Bill is being considered.
Not only have the calculations of GRE also been revised regularly but we have been subject to an ever-changing form of calculation which no one has found either easier to understand or more acceptable as the years have passed. There is a simple method for curbing the high level of spending, if the Government believe that to be the position in, for example, Southwark. The Labour party, which runs the borough, secured 44 per cent, of the vote —53 out of 64 seats—at the previous election.
One simple legislative measure to reform the electoral system for local authorities would be more effective than tinkering with the finance system year after year. It is ironic that the Financial Times suggests today that the Government might now be comtemplating annual elections for every local authority. That has long been a Liberal view. Secondly, if the Government changed their view and trusted local representatives, perhaps local
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authorities and their associations could work out the criteria for grant related expenditure. The system might then be acceptable as objective, and the citizens of Warwickshire or elsewhere would be charged with the responsibility of deciding their needs.
Unlike the two major parties, we believe that eventually central Government should finance not more than 30 per cent, of local government services; the remainder should be paid for out of income raised in the form of local income tax or by other local methods. I shall not discuss that issue now. The Government should examine the fundamental reforms that we and others have proposed. I refer again to Shakespeare, whom I paraphrased at the beginning. The Government are behaving like Lady Macbeth and Macbeth on their way to the murder of Duncan and then onwards to their own doom. They are wringing their hands, trying to justify their actions and can do no more to justify going on than to lament:
"in blood
Stepp'd in so far, that …
Returning were as tedious as go o'er".
The Government should admit that the rate support grant system is full of injustices, that the proposals are full of anomalies and that the arguments are full of holes. They have not had any support so far. The report should not be approved.
6.37 pm
Mr. Edward du Cann: I do not agree with the hon. Member for Southwark and Bermondsey (Mr. Hughes) who, as in his quotation from Macbeth, preached doom and blood. It is possible to read too much that is unattractive into the present position. However, I agree with the theme of the hon. Gentleman's speech when he said, as have other hon. Members, that the implications for services are substantial as a result of the measures that we are discussing this week. I am sure that he is right. My view of the matter is encapsulated in the second part of the amendment tabled by my hon. Friend the Member for Tiverton (Mr. Maxwell-Hyslop).
Before I deal with those matters, I wish to make a general observation. I thought that my right hon. Friend the Secretary of State was right when he said last Tuesday that at the heart of the Government's policy has been the need to curb the demands made both on individuals and businesses by the public sector by reducing the burden of public spending and taxation. The hon. Gentleman reiterated that point in different language in his speech. I believe that the whole House should support strongly such an aspiration and policy, which has lately been warmly endorsed by the electorate. I shall put the matter slightly differently. It is less important to insist on absolute levels of expenditure and more important to insist upon value for money and to be sure of getting it.
If I have a complaint about the devoted work of my right hon. and hon. Friends, it is that their policy has not been pursued with sufficient resolution, determination and success during recent years. A number of us have done our best both in debate and through the Select Committees to argue for greater emphasis on value for money in Government services, and not least for a better balance between capital an adminstrative expenditure in central and local government. We have not always been popular for doing so. I hope that my current impression is not the

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reality. I hope that there will be no weakening of Government resolve and that a fresh effort will be made to achieve significant results.
Although I supported the Rates Bill, I did not do so because I thought it a good Bill. Indeed, it is a bad Bill. One of its weaknesses is the way in which it establishes a minimum level for expenditure, which will shortly force all authorities up to that level and become the maximum. I supported the Bill because I truly believe that Government cannot stand aloof from local authority spending or an attempt to influence it. Local authority spending encompasses a quarter of total current public spending. There are irresponsible administrations whose rate increases have been two or three times the increase in inflation. Therefore, the Government cannot stand idly by.
I have sympathy with my right hon. Friend, who has inherited a difficult problem. The system of local taxation is capricious, uncertain, unfair and riddled with inconsistencies and anomalies. As 40 percent. of the rates are provided by the disfranchised, and only one-third of ratepayers pay the full rates, local democracy is less a reality than a myth. My right hon. Friend said the other day that the link between local rates, local spending and local voting is tenuous, and that point has been reiterated a dozen times during the debate.
The worry is that, as yet, the Government have failed to grasp the nettle of reform, and that is the challenge for the future. I hope with all my heart that my right hon. Friend and my hon. Friend the Minister, the hon. Member for Bristol, West (Mr. Waldegrave) — for whom the House has so much respect — will regard the present time as an opportunity to draw fresh breath and to tackle the reforms that we all know are so urgently needed. That will not be easy and there is no single course that will meet universal approval; but reform must come.
I wish to speak tonight about my county. It is the first time in recent years that any of us has spoken about Somerset, yet year after year its representatives have met Ministers and discussed its problems with successive Secretaries of State. But the warnings that we have endeavoured to give have not been heeded, Somerset is now in a difficult position, and its problems must be expressed in public. Somerset has always followed Government guidelines closely and prided itself on standing on its own two feet, but the position is now untenable, and unless the grant rules change some extremely difficult decisions must be taken for 1985–86.
As I am sure all hon. Members know, Somerset is a typical rural county, but it has above-average problems such as the high mileage of roads and a large share of elderly people. The problems of unemployment affect Somerset as much as they affect other areas. We hear so much about areas that face huge problems because of structural change, such as the decline of coal production, shipbuilding, steel making, and textiles. But, proportionately, the problems facing a little town like Wellington when it loses its dominant industry are just as important as the terrible problems faced by Newcastle, Liverpool and Glasgow.
Mr. Straw: While the Opposition accept that Somerset has had a great many problems, we wonder whether it comes as a surprise to the right hon. Gentleman to learn that Somerset's expenditure has increased by 79 percent. since 1979, which is significantly faster than that of
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Manchester, Newcastle and Liverpool — all of which have been categorised as high spenders and overspenders that need to be penalised.
Mr. du Cann: I shall deal with the hon. Gentleman's point in a moment.
Somerset is not a rich county. It does not have the resources of such counties as Surrey and Kent, about which we have heard so much this afternoon. The unsatisfactory local government reorganisation took away from Somerset its fastest growing and richest area to create the new aberration of the county of Avon—a wrong that I hope it will be possible to undo one day.
Historically, Somerset has always been a low spender. That is not only my opinion — it has been confirmed during the past two or three years by a report from a firm of management consultants commissioned by my right hon. Friend's Department. It is because Somerset has always been a low spender that it now faces problems.
When the block grant was devised, Somerset had a low base of spending. The block grant system has not been sufficiently flexible to allow the necessary refinements to cater for the problems of Somerset. During the past 18 months Somerset has received reports from Government inspectors that both the education service and the fire service were under-resourced. There was no complaint about standards—indeed, Somerset has high standards in both services. The chief education officer and the chief fire officer are among the best in the United Kingdom— yet the Government published reports castigating Somerset for having under-resourced its education and fire services. As a result, Somerset gave additional resources to both those services rather than reduce them, which was the only alternative. It is now attempting to fill the consequential financial gap with contributions from special funds to avoid grant penalties. That can continue for only a short period. By 1985–86 there will be little scope to continue the contributions. Spending by then is estimated to be about 6 per cent. over target.
Part of the problem is how to foretell the targets for 1985–86 and 1986–87, because the rules change so often. All we can reasonably do is to extrapolate the present rules and plan accordingly. I cannot subscribe to or endorse every one of Somerset county council's figures, but I have been through them with elected members and officers. The best present estimate is that Somerset needs to spend 6 per cent. above target, or another £8 million, in 1985–86.
If that is so, there are three options open to us. First, we could incur grant penalties. That would mean a 25 per cent. rate increase even on present scales. That is too horrendous a prospect to contemplate. We have no special grants or facilities for attracting industries to Somerset. We can only offer our natural advantages and show prudent financial management of our resources. Let it not be forgotten that high rates impose a heavy cost on industry.
The second option is to abolish the capital fund and revenue contributions to capital and start capitalising everything that can possibly be deferred. That is against the council's financial ethos, and I think that it is right to take that view. To take such a course would be to mortgage the future, which is surely not something that a Conservative Government could encourage.
The third option is to cut spending severely. That would mean reversing the recent improvements to the education service and much more besides. It would include

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substantial redundancies and many direct services would be reduced or abolished, with all the consequential adverse publicity that these matters always attract.
It is possible to argue that there is always scope to reduce a budget. I know that there is, but by and large Somerset's budget is not great in local authority terms, being about £130 million a year. Officials came from the Department of the Environment to conduct a special inquiry at Somerset's request. The inquiry was carried out last year and the officials went through all the figures. They said, "There is no fat to cut." Before that inquiry took place, Somerset employed management consultants.
It is difficult to understand the logic of the Government's position. Somerset has been criticised by the Government for not spending enough, but it now faces the prospect of being penalised as an overspender. My right hon. Friend has said that he will reconsider targets in the light of experience over the next few months, and we in Somerset are grateful for that. That was the thrust of his remarks and it sounded fine. He has written in a letter to me that he wishes to be fair, and that was the implication of some of his remarks this afternoon. I accept that he wishes to be fair and I have every trust in him and his motives. However, the promise of consideration rings slightly hollow by comparison with experience. It is because the requests of Government have been listened to in past years and acted upon faithfully that Somerset now faces its present problems.
Somerset county council has felt it essential to set up a special panel of members to examine all possible options for expenditure cuts. It tells me that because redundancy costs are counted against expenditure definitions for determining grant penalty and because there is a long lead time in reducing some service levels, it will have to come to decisions well before the summer of 1984 to influence the 1985–86 financial year to ensure that no additional costs fall in 1984–85. I am not sure whether my right hon. Friend has taken that point on board adequately in the past.
The debate cannot be a private one. The matters that are being discussed—for example, where the cuts may fall—are bound to be matters of public discussion too. The discussions are causing grave anxieties within the county among many loyal and dedicated people. These include members of the local authority, officials and members of the public. I hope that my right hon. Friend will agree that it must be right to try to avoid these worries.
I am sure that my right hon. Friend cannot mean to penalise the Somersets of this world. However, we cannot put off decisions for as long as July, when perhaps his conclusions might be expected. I shall make a suggestion which I hope will commend itself to him. What is sauce for the goose is sauce for the gander; if rate capping is appropriate for the high spenders—I believe that it is— exemption from penalties is appropriate for local authorities such as Somerset, which have low unit costs. I hope that he will explore that avenue, as the saying is. Here is a way in which the worry that he expressed so candidly to the House could be alleviated and our problems solved. A decision to this effect could be perfectly well made now rather than some months ahead. Thereby uncertainty could be avoided and the genuine concern, which is bothering so many people, could similarly be saved.
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I have always believed that local government should be a cornerstone of democracy. Unfortunately, in practical terms, it is not at present. I believe that there should be a natural trust and respect between local government and central Government. It seems that we are in danger of losing that old tradition and I am anxious to see it rebuilt promptly. It is not enough for any of us merely to talk with sympathy of local government. This is a practical matter and we must find practical ways of giving effect to our sympathy. Difficult though it may be, we must grasp the nettle of fundamental local government reform. That is the challenge to my right hon. Friend and those who serve with him in government. I have every confidence that he and they will measure up to it.
6.57 pm
Mr. Ted Garrett: The right hon. Member for Taunton (Mr. du Cann) caused me quite a few palpitations. I thought for one dreadful moment that, as Chairman of the 1922 Committee, he was about to express the same vigorous opposition to these measures as some of his colleagues who contributed earlier to the debate. However, knowing the right hon. Gentleman's style of delivery, I knew that he would never fire the fatal shot.
The Secretary of State, who unfortunately has just left the Chamber, said that the formula was complicated. He said that in a rather modest way but it certainly is complicated. None of us is surprised because each rate support grant paper produces an additional complication. It is a continuing process.
There are many of us in the Chamber who served for many years in local government before entering this place. I am a former member of the Northumberland county council. When I was serving on that authority, my colleagues and I were rather surprised when we received a Government circular from time to time and were advised to read it and to put forward our ideas. Local authorities are now snowed under with circulars. There is a certain cynicism among the elected members of local authorities and a sense of despair.
The right hon. Member for Taunton was wise and fair enough to observe that we are in danger of losing the link between central Government and local government. I venture to suggest that that link has already broken. It has been split asunder.
The Secretary of State admitted that his proposal would be subjected to some criticism. Of all the debates in which I have participated in the Chamber, I have never heard such unanimity of criticism. I am sure that those who have sat through the debate will agree with me that not one hon. Member has uttered a sentence in favour of he formula that has been applied to the 1984–85 grant settlement.
I did not like the attitude of the Minister when he said that the worst offenders were Labour councillors. He made his usual remark about Socialist republics. Labour Members are becoming weary of such smears. They are tiresome to hear when one knows how many Labour councillors throughout the country have no wish to be associated with any self-styled Socialist republic. Those councillors are as hard-working and conscientious as any member of any party serving in local government.
Members of Parliament should stop denigrating local councillors, who are doing a good job. I served for many years on a council in which there were Conservative and Liberal members in abundance. Despite our disagreements, we tried to work out what was best for the financial

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stability and wellbeing of the authority. I believe that that is the general pattern of behaviour. I do not see why it should be any different elsewhere. What benefit is there for any councillor or group of councillors of whichever party in imposing harmful financial systems on their fellow citizens? Let us not forget the importance of the ballot box. If a system is harmful, it can be rejected by the electorate.
A great many statistics—far too many — have been bandied about today. The debate was turning into a statistical comparison of counties. The case was presented for the county of Essex and the case for Surrey was exceptionally well expounded. We have also heard the arguments for Cambridgeshire and Somerset. Conservative Central Office and the Prime Minister must be concerned about the hostility in traditional areas of Conservative support. No doubt discussions are taking place in Smith square to see what can be done about it. The Labour party has its own problems, so I cannot burden myself with those of the Conservative party. Indeed, I should not wish to do so.
The borough of north Tyneside in which my constituency lies is imposing for 1984–85 an increase of 4·8 per cent. over the previous year, based on a no-growth system. That 4·8 per cent. increase will make it subject to surcharge and it will lose £10 million a year. That may not seem much to a wealthy authority, but for one with a population of 205,000 it is a staggering blow. Moreover, the deprivation described in relation to other counties fades into insignificance compared with that in Tyne and Wear and other areas where pre-Victorian and early Victorian industries grew up. There are still two nations. The difference between the counties described so far and metropolitan counties such as Tyne and Wear are all too obvious. The metropolitan counties are grey. They lack the resources to achieve equal standards and quality of life for the people there.
Mr. Straw: In emphasising the burdens on such authorities, does my hon. Friend agree that north Tyneside, despite all its problems has cut its spending in real terms since the Conservatives came to power in 1979, increasing its spending by only 77 per cent. compared with 79 per cent. local authority inflation and an 89 per cent. increase in expenditure in Cambridgeshire? Is it not an outrage that such an authority should face such severe penalties?
Mr. Garrett: It is indeed an outrage, but north Tyneside is similar to many other responsible Labour-controlled authorities which have tried to meet the figures set by the Government. The Government's targets are physically impossible to achieve even in a no-growth situation. This situation cannot continue much longer. I do not wish to sound pessimistic, but if the nation is seen to be dividing itself in relation to its resources there will be further problems of the kind that arose in Toxteth, Manchester and Brixton. We must find a system that will equalise the burden.
I shall not detain the House any longer. I always heed the words of Mr. Speaker. We were reminded at the outset that although the debate may continue until 11.30 pm a large number of hon. Members wish to contribute. If we all discipline ourselves a full and happy debate will have taken place by that time.
I have one final question for the Minister. Will he explain why, according to annex B on page 15 of the
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report, supplementary spending of £150 million is set aside for an urban programme and £78 million for Commmonwealth immigrants? I assume that such immigrants are members of the community who pay their taxes and live happy, normal lives in our society, so what is the reason for that figure? I have tried to find out the reason but, regrettably, I have been unable to do so. We need an answer as people in the deprived areas wish to see money well spent. If the Minister can assure me that that sum will be well spent and if he will explain the purpose of it, my fears may be allayed.
I entirely support the plea of the right hon. Member for Taunton. I hope that efforts will be made in the lifetime of this Parliament to bring the democracy back into local government so that it may take its full responsibility. The people who serve on local authorities throughout the country are responsible people. If we fail to do that, overcentralisation will make this country like East Germany, Czechoslovakia or any of the other Comintern countries — grey, drab and indecisive. Above all, the flower of this nation—ourselves—will wither away. The opportunities are there, but they must be taken If the Government continue to behave as they have this week and last week and to seek to impose a system that is inherently unfair, they are heading for very troubled waters indeed.
7.8 pm
Mr. Charles Morrison: The hon. Member for Blackburn (Mr. Straw) has interrupted the debate twice to point out that the increase in rates in certain Labour-controlled urban areas has been greater than the increase in some of the counties which feel particularly hard done by as a result of this rate support grant decision. However, we do not know what went before in those Labour-controlled areas, compared with what happens in many of the shire counties where every effort is made to pare expenditure to the minimum.
Nevertheless, I admit that I have some sympathy with the hon. Member for Wallsend (Mr. Garrett). I imagine that the deprivation in his area is only too obvious, and he must see it whenever he is in his constituency. Indeed, we are faced with a stark contradiction here. On the one hand, certain Labour local authorities are, in my view, rightly castigated for overspending; on the other hand, no doubt many of those local authorities are the largest recipients of urban aid. It is difficult to reconcile the two.
Opposition and criticism of the rate support grant report has been unanimous, but perhaps even more important, in terms of political weight, length of service in the House and experience, is the number of right hon. and hon. Members who have criticised the report from these Benches. Indeed, the number of Privy Councillors who wished to speak in criticism of the Rates Bill last week, and of this rate support grant this week, has been so great that the rest of us wondered whether we might ever get a chance to speak.
My right hon. Friend the Member for Cambridgeshire, South-East (Mr. Pym) said that he supported the Government's attempts to control public expenditure. Of course I agree with him. Nevertheless, since 1979. local government has cut the share of gross domestic product that it takes, whereas central Government have increased their share no less than 2 per cent. My right hon. Friend the Secretary of State complained not so very long ago that local government had increased its expenditure by £2·5 billion above the 1980–81 level, but by the same token,

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central Government have increased their expenditure by £15·5 billion. As the Association of County Councils—of which I happen to be a vice-chairman—said, local authorities are criticised for overspending planned levels about which they were not informed, and which were impossible to achieve, and when their performance in moving towards those planned levels has nevertheless been a great deal better than that of the Government itself.
It is not surprising that local authorities should feel hard done by. So in this debate there is a slight whiff of the pot calling the more pristine kettle black.
Even so, it is perfectly reasonable for the Government to castigate high spenders in local government, because broadly they must be extravagant and incompetent, compared with the low spenders. On the other hand, the ACC considers that the current Government expenditure provision for 1984–85 is impossible to achieve. In my opinion, the ACC is right. The Government's proposals for a cut in real terms of 5 per cent. from the 1983–84 budgets are neither realistic nor reasonable, simply—as I have implied already — because most shire counties have already reduced their provision of services to the bare minimum, and there is no more fat to be lost.
Shire counties have been making cuts since 1974, and they cannot continue to do so. So cuts in grant are bound to create increases in rates. Saving the presence of my right hon. Friend the Member for Tiverton (Mr. Maxwell-Hyslop)—I should point out, before he interrupts me, that I should have liked to qualify the statement that I am about to make endlessly, were there time — I am not against proportionate cuts in grants, as long as they are not excessive, because I believe that the consequent increase in rate-borne — or, should I say, locally borne — expenditure increases local accountability. However, I object to the Government trying to have it both ways, with low spenders in particular—cutting their grant, and then penalising them for compensating rate increases. That is what is being done. In the end, the pressure on low-rated local authorities will not only reduce the provision of services, but will destroy the foundations of local government finance.
I should like to say a few words about one low spender and one high spender in my constituency. The low spender is Wiltshire county council. In a leading article of 3 November last year, The Times said this about Wiltshire:
"His"—
that is, my right hon. Friend the Secretary of State's—
"model county is Wiltshire, Conservative and frugal, not merely spending on target but spending less than the experts, who include Her Majesty's Inspectors of Schools, say should be spent."
That reference to Her Majesty's Inspector is the same point as was made by my right hon. Friend the Member for Taunton (Mr. du Cann). Wiltshire, like Somerset, has been, let us say, "warned" about its expenditure on education. As in Somerset, the standard of education is excellent, but it will be difficult for Wiltshire county council to maintain that standard of education unless it increases expenditure to some extent in the future.
How is this model county treated? Currently, Wiltshire has the third lowest rate in England and Wales among shire counties, despite having to finance the infrastructure for the expansion of Swindon, which has been described as
"probably the fastest growing urban area in the European Community".
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Wiltshire also has a rateable value per head of population well below the average. The amount produced from a rate of 1p in the pound is £614,000, compared with the average for shire counties of £987,054. In spite of that — or perhaps because of it—Wiltshire expenditure per head of population is lower than the average for shire counties in every respect, except on libraries. The leading article in The Times described the county as "frugal" and, not surprisingly, within the county there are people who describe their council as mean and parsimonious.
How does the county now fare? First, let us remind ourselves about GRE and its definition. I believe that the right hon. Member for Halton (Mr. Oakes) has already referred to this. He is my co-vice-president of the ACC. GRE is defined as
"assessment of the expenditure required to provide a normal standard of service after taking account of local factors."
Mr. Maxwell-Hyslop: That definition omits the notional rate, towards which all rates lower than that tend to be pushed by the GRE system.
Mr. Morrison: I take that point.
The GRE for Wiltshire for 1984–85 is increased by the Government by 6·2 per cent., but the target of expenditure set by the Government for this low-spending county is increased — not surprisingly — by only 3 per cent. According to the GRE definition, that must mean that the Government expect Wiltshire county council to provide a lower than "normal standard of service", and to cut it further. I am not prepared to accept that without protest.
In practice, the county council is faced with three possibilities. The situation is similar to that in Somerset, described by my right hon. Friend the Member for Taunton (Mr. du Cann). Wiltshire can reduce services. If that is done there will be a tremendous howl not only from electors and ratepayers but also from Members of Parliament. Wiltshire could reduce its balances to an irresponsibly low level. I gather that balances should amount to about 5 per cent. of expenditure. In one budget calculation for the county, it has been suggested that the balances should be reduced to about 1·5 per cent. of expenditure. In my view, that would be wholly irresponsible. Thirdly, the county could maintain services. That would mean maintaining expenditure at a level that would attract grant penalty, which in turn would necessitate an even bigger increase in the rates and an extra burden on ratepayers.
That is how the present crazy rate support grant system works in Wiltshire. That is how a model county is to be treated. Putting it mildly, those who have been responsbile and frugal are being kicked in the teeth. It is unacceptable.
The high spender in my county is the district of Thamesdown, which includes Swindon, and over 35,000 of my electors. Thamesdown is Labour-controlled. It has a very high rate — about 50p in the pound. I am prepared to accept that that is excessive. I am sure that a Conservative administration would cut expenditure by various means. It would improve the standard of administration. It would cut out waste. Probably, it would also—this would be very important in Swindon—sell some assets which are very expensive for the ratepayers to run. Nevertheless, if they are to be seen to be fair and reasonable, the Government must treat like with like.
Thamesdown expands under the control of the district council. Milton Keynes, Peterborough and Northampton expand under the control of their councils plus

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development corporations. If district and development corporation expenditure is added together, cost per capita in all those three towns exceeds that of Thamesdown, and capital expenditure shows a similar pattern. Perhaps that demonstrates only that in fast developing areas—at least initially, until there is a return in rateable value from the investment—costs are high. However, if that is true in those three towns it is also true in Thamesdown.
Mr. Straw: It is true that the level of services in Thamesdown has been higher than in other Wiltshire districts historically. Since 1979, however, the expenditure of Thamesdown council has been cut in real terms, going up only 66 per cent., against local authority inflation of 79 per cent. The council has cut its level of spending in order to try to meet the Government's requests, but it still faces massive penalties.
Mr. Morrison: I take the hon. Gentleman's point, but I must make a counter-point. Thamesdown was formed out of the old borough of Swindon and the rural district of Highworth, which was in my constituency. Before the amalgamation and reorganisation of local government, Swindon had expanded to a considerable extent into Highworth rural district. Before the time of the reorganisation, I fought to stop the boundary of Swindon being pushed further into my constituency, because the rates there were much higher, although the services provided in the rural district and in Swindon were very similar. Swindon was pretty well run, but the rural district was run even better. I hope that the Under-Secretary of State will respond to my point about the comparison between the treatment of development corporation towns and the treatment of areas such as the borough of Thamesdown.
However we look at the present system of grant aid and local government finance we find that it is still a tangled and complex mess. This cannot continue. There should be a revaluation of rateable value. That is very important in a growing area such as Swindon—
Mr. Maxwell-Hyslop: No.
Mr. Morrison: It will be important at least until we have a decent system of local government taxation.
Sir Bernard Braine: I am interested to hear my hon. Friend's reference to a revaluation. Has he some inside information? When is it likely to take place?
Mr. Morrison: I have no inside information at all. Perhaps the Under-Secretary will provide us with some. It is unfortunate that the previous valuation was cancelled.
Above all, the Government must fulfil two requirements. First, they must stop pretending that those who run local government are wasteful or incompetent or unaware of the financial needs not only of their area but of the country as a whole. They are not. Most of them are dedicated people trying to do a good job for the community and, in the face of great financial stringency, to discharge the responsibilities imposed on them not by Government but by Parliament.
Secondly, the Government must design a system of grant aid which is comprehensible and fair and provides reasonable incentives to responsible local authorities. I doubt whether more than a very small handful of people understand the present system. Therefore, the
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Government's objective next year should be to do a U-turn. They should simplify rather than complicate. If they do so, we may be able to praise the Government next year instead of criticising them.
7.27 pm
Mr. Robert N. Wareing: To Liverpool and Mersey side, the rate support grant settlement will seem as irrelevant as an attempt to sell air conditioning to Eskimos. It bears no relation to the real needs of Mersey side. Liverpool — a microcosm of all our economic and social problems—has massive social problems. If we look at what we are being offered this year in conjunction with conditions in Liverpool, it can only be described—inadequately—as inadequate.
In Liverpool, 20 per cent. of the population is unemployed. In some districts 80 or 90 per cent. of the people are out of work. In one part of my constituency, 94 per cent. of young people are without any permanent employment. The six Liverpool constituencies are among the first 28 in the league table of constituency unemployment rates. Liverpool, Riverside is at the top of that unenviable league, and West Derby is ninth.
There are 29,000 people in need of housing or rehousing in Liverpool. Their housing needs should be met. Last Friday, the Liverpool Echo published a list of 87 separate cases of announced job losses during the last two years, many in firms that are well known both nationally and internationally. Against that background, Merseyside has responded much more positively than the Secretary of State.
The Merseyside county council has set its face against further redundancies. It is determined not to make any cuts in measures for the promotion of the local economy. Conservative Members are prone to looking for wild excursions in expenditure by metropolitan counties, but they should pay due regard to the services that are provided by county councils such as Merseyside.
Until all the bankruptcies last year, the Conservative party was supposed to be the party of the small business man. On Merseyside, an increasing part of our expenditure since Labour took control in 1981 has catered for small businesses in creating enterprises and new businesses. No fewer than 7,000 jobs have been generated as a result of the County Help for Active Small Enterprises scheme, otherwise known as the CHASE scheme. It was introduced by our Tory predecessors on the county council, and has been expanded under the Labour administration. Expenditure is being used to promote co-operatives and to create confidence among ordinary working people, who are establishing their own centres to provide education and training for the unemployed. The Merseyside county council is spending its money on projects such as Merseyside Training Ltd., which is now designated by the Government as one of their information technology centres.
The Merseyside county council has set its face against fare increases. Anyone who suggests that that is where one might find the means to combat the reduction in the rate support grant for Merseyside should bear in mind that, since the Labour party introduced fare reductions in 1981, there has been a 13 percent. increase in the numbers using the Merseyside passenger transport system. That compares with before 1981, when orthodox financial methods were

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used under the Conservatives on the county council, and when year after year, fares on the Merseyside buses were increased.
What has been the Government's response to Merseyside county council's valiant efforts not only to provide for the unemployed and to provide a bus service that caters for the disabled and for elderly people who live on the outskirts of the conurbation, but to spend £1·5 million next year to service the International Garden Festival promoted by the Government-appointed Merseyside development corporation and financed by the Government? Last week I asked the Secretary of State whether, if money is found by Merseyside county council to provide a ferry service between the Wirral and the International Garden Festival site, there will still be penalties, and the right hon. Gentleman gave me an oblique answer. As far as I know, that is not on his list of disregards, but it should be. I hope that he will address himself to that matter and to the other services mentioned in a letter from the leader of the Merseyside county council to the Government.
What are the Government doing about the rate support grant and targets? The target set for Merseyside next year is £165 million, which is a 6 per cent. cash cut. I hope that Conservative Members will remember the background against which that is set. My hon. Friend the Member for Wallsend (Mr. Garrett) acknowledged that many Conservative Members have problems in their constituencies. There are pockets of social distress. However, my hon. Friend was right to tell them that day in, day out, we face a much greater problem.
The Secretary of State for the Environment implied that the 6 per cent. cash cut is the maximum reduction that any local authority, other than the Greater London council, will be required to make. However, one cannot take the rate support grant settlement without taking into account the transport supplementary grant settlement, in which there is an arbitrary cut that requires the Merseyside county council to find an extra £5 million next year. That raises the cash reduction from 6 per cent. to 9 per cent. I am not taking into account inflation and commitments that have to be absorbed to comply with Government policy. If we comply and say that we accept the 9 per cent. reduction, £13 million will become rateborne expenditure, equal to a 7p rise in precept, which is a rise of 12 per cent.
There are anomalies in the Government's general policy on the transport supplementary grant. The TSG is to be reduced by 11 per cent. Next year, the shire counties are to have an increase of 18 per cent. The Secretary of State for the Environment and the Secretary of State for Transport, in their combined policies, overlook the legal requirement for metropolitan counties to subsidise local rail services. In the shire counties, that responsibility falls on the national Exchequer. I hope that the Under-Secretary of State will refer to my point about the TSG in relation to the RSG.
We are often told on Merseyside, particularly the Liverpool city council, that we must not break the law. There was no consultation about the arbitrary cut in the TSG with the Merseyside county council under section 60 of the Local Government, Planning and Land Act 1980. I sometimes wonder who the lawbreakers are.
Merseyside is told that it is one of the major overspenders. Hon. Members will have seen the list of
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overspenders. Merseyside was No. 4 or No. 5. However, the fact remains that of our overspend at least 25 per cent. is expenditure on the police, the fire service and the arts —17 per cent. on the police, 3 per cent. on the fire service and at least 5 per cent. on the arts. In Merseyside we take pride in our special responsibility for catering for nationally known institutions, such as the Walker art gallery and the Royal Liverpool philharmonic hall.
If we accept money from the European Economic Community, indeed, it costs us money in terms of penalty. For every £1 million that Merseyside accepts from the European social fund, it has to spend an extra £1·2 million of its own funds because of the penalty imposed.
I ask the Secretary of State to look very carefully at the disregards that are being asked for by the Merseyside county council. In the case of police services, for example, surely nobody — not even the Government — would advocate that we should cut the Merseyside police force, where the problem is difficult enough already with the increase in the crime wave.
In answer to a supplementary question put by me to the Prime Minister on 5 July 1983 she said:
"the record of this Government in putting extra money into Merseyside is a good one".
She went on:
"Somehow, the people themselves there have not been involved sufficiently in trying to rejuvenate the centre of their own city."—[Official Report, 5 July 1983; Vol. 45, c. 154.]
That is precisely what the elected city council of Liverpool has been trying to do on behalf of its citizens. It aims to provide 1,000 new jobs by using MSC schemes and, I might say, by topping up the pitifully low wages that are being allowed under those schemes. Nevertheless, it is using a Government scheme to provide more houses for the people I mentioned who are in a monstrous plight, and to deal with the necessary repairs.
While on that subject, I say this to the Secretary of State through you, Mr. Speaker. When he comes to Merseyside, let him allow the Members of Parliament representing Merseyside to make up his itinerary because, if he listens only to civil servants who may be better acquainted with the Oxford and Cambridge club than they are with the problems of Toxteth or Croxteth in my constituency, he will get a very false idea of the great "prosperity" that is Merseyside under the most marvellous economic policies for which we are told the Government have been responsible. Let him go round Liverpool, escorted: I am afraid that he will need an escort, but we shall be glad to provide it. Let him go round some of the working class estates and talk to the people who count, and not the higher echelons, even of the Merseyside task force.
Any compassionate or rational Government would want to assist in a true partnership with Liverpool and with the Merseyside county council, but, since the Government came to power, that is far from being the case. Indeed, since 1981 there have been reductions in Liverpool's block grant. In 1981–82 there was a reduction of 11 per cent. A slight concession was made in 1982–83 when it increased by 0·5 per cent. In 1983–84 there was a further reduction in block grant of 1·5 per cent. It may well be said, and rightly, that Liverpool did well out of the rate support grant during the seventies. It is true that there was an increase every year under the Labour Government. In 1974–75 the rate support grant stood at £62 million. By 1979–80 it had risen to nearly £110 million.

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The hon. Member for Devizes (Mr. Morrison) was correct when he said we should ask ourselves what went before. I shall tell the House what went before in Liverpool. during the years when rate support grant was increasing year after year under a Labour Government, Liverpool had the misfortune to be dominated by the Liberals. These were Liberals who owed more to the memory of the late Horatio Bottomley than to the late William Gladstone. [HON. MEMBERS: "Where are they?"] Hon. Members might well ask where they are. They are certainly not here; they have probably gone on a six-month holiday, taking a leaf out of their leader's book.
What did the Liberals do with the rate support grant increases? They used the rate support grant to cut the rates and to cut essential expenditure. In 1975–76 when inflation stood at 24 per cent. the rates in Liverpool were cut by 6 per cent. In 1976–77 when inflation stood at 16–17 per cent. the rates went up by only 2 per cent. How did the Liberals balance their budget in those circumstances? They did it by cutting 4,000 jobs. They did it by building no more corporation houses in an area of real need for rented property. They did it by freezing, and then cutting, student grants. They did it by every means that they could discover. They even suggested at one time that pensioners should pay £4 for concessionary bus passes. That is what the Liberals did, or threatened to do, in Liverpool. Only after tremendous demonstrations did they pull back.
We are told that local authorities are the creatures of statute and are bound by the law. That did not bother the Liberals too much. Indeed, although there are obligations to local authorities under the Chronically Sick and Disabled Persons Act 1970, they went so far as to freeze the allocation of telephones to the handicapped. They were criticised at the time by RADAR, the disabled persons' organisation. I wonder what RADAR will say when this rate support grant results in further cuts if the Government can get away with it.
We have to ask ourselves who the real law-breakers are. I suggest that ratepayers should look very carefully at what the Government now propose. I believe that, because they failed to consult properly under the 1980 Act, there may be a case through litigation against this Conservative Government. In looking for the background and what went before, one has to look at the legacy of Liberal—Tory neglect on the local council, and all of this against a background of distress and factory after factory closure in the area. It does not call for threats against Liverpool to cut the rate support grant.
I believe there is a case for a royal commission to examine what has happened in Liverpool over the last 10 years, during which time Sir Trevor Jones, the leader of the Liberal city council, was able to say:
"We have cut our services to the bone, we can cut no further."
And that was three years ago.
It would be bad enough if it could be argued that all this is in aid of promoting the needs of the national economy, but the total overspend in the entire country is equivalent to no more than 0·02 per cent. of gross domestic product. The Government tell local authorities—this is an irony — that they will encourage capital expenditure, but capital expenditure enters into the public sector borrowing requirement and affects the target of the Chancellor, whereas current expenditure does not.
My hon. Friend the Member for Copeland (Dr. Cunningham) at the beginning of the debate indicated correctly that for local authorities to carry out the
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Government's desires would mean 12,000 fewer teachers, 11,600 fewer places in residential accommodation in the social services, 8,300 fewer day care places and 46,200 fewer home helps. I hope that this is registering with the Secretary of State. There would be 7,100 fewer police officers—unless the Government intend to protect the police. I hope that they will do so, but not at the expense of social workers, teachers, firemen and those in other essential services.
The former Secretary of State for the Environment, the right hon. Member for Henley (Mr. Heseltine), visited Merseyside just after the Toxteth riots and told the Conservative party conference that the problems there could be tackled only by public expenditure. He was converted from the views of Milton Friedman. I suggest that the right hon. Gentleman is glad to have been moved to another post and is pleased that the present Secretary of State has to carry the burdens. I believe that the previous Secretary of State could not get his way in the Cabinet.
If the present Secretary of State is not man enough to stand up to the harsh leadership in the Government, he will be prescribing a recipe for chronic disaster in areas such as Merseyside. I do not forecast that it will come next week or next year, but there will be social catastrophe unless the Government turn away from the course that they have set themselves.
People in Liverpool are asking what the Prime Minister is afraid of. She has made only one visit to the city since the Toxteth riots and it was as if General Ustinov had arranged to visit the Gdansk shipyards. The Prime Minister came in the early hours of the morning under close police protection. The people of Merseyside believe that she and the Government have caused more devastation than any squadron of Junkers-88s or Heinkel-111s during the blitz in May 1941.
I hope that the Secretary of State will consider carefully the points that have been put to him, will consult the Merseyside and Liverpool councils and will withdraw the report. If he will not, the House should certainly reject it.
7.52 pm
Mr. Michael Carttiss: My contribution on the rate support grant report will have to be strictly limited, as this is my maiden speech and, before commenting on the subject of the debate, I am happy to observe the convention of paying tribute to my predecessors and my constituency.
To be given the opportunity of representing Great Yarmouth, where I have spent my life and where generations of my family have lived and worked, is a signal privilege. The borough of Great Yarmouth has sent representatives to the Commons since 1294. It has been represented by many distinguished men. Some have been noted or — depending on one's viewpoint — notorious rebels.
In the early 17th century, Miles Corbett, when Member of Parliament for Yarmouth, put his signature—it is the last—on the death warrant of Charles I. By contrast, my immediate predecessor, Sir Anthony Fell, was very much a monarchist, but he was a rebel against his party when convinced that it was wrong. First elected in 1951 for Yarmouth, where his grandfather was the Member of Parliament before the war, Sir Anthony was a great champion of the role of Britain on the world's stage. He was also a great champion of the role of the House above Government.

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One of my 18th century predecessors, Sir Edward Walpole, son of the first Prime Minister, was Chief Secretary for Ireland. I am proud that since June, the Great Yarmouth constituency has included villages from the old Lowestoft constituency, now called Waveney and represented by my right hon. Friend the Secretary of State for Northern Ireland. My right hon. Friend's compassionate approach to political issues is greatly admired, especially by his former constituents who are now within the boundaries of my constituency. I trust that I shall keep in my mind my right hon. Friend's example of public service.
My constituency combines a major seaside resort with the broadland villages for which my county is famous worldwide. Our holiday industry brings an annual turnover of about £100 million to the area. Our new marina centre, jointly developed by private and municipal enterprise, is the largest leisure and entertainments complex of its kind in the country.
Every year, Great Yarmouth attracts 2 million tourists, and the rural area is noted for its intensive and successful agriculture. In the town, we are developing year-round industry, and our port is vital to that objective. We trade daily with The Hague, only 90 miles across the North sea, which gives access to the whole of Europe. The shipping handled by our port in 1983 totalled 3·5 million tonnes. Nearly half of that was the gross registered tonnage of offshore supply vessels to the North sea oil and gas rigs. It is essential for the future of our town that Norfolk is linked as soon as possible to the national motorway network by dual carriageway routes, to enable the port to continue to grow. The Norwich and Acle bypasses on the A47 are equally important to Great Yarmouth.
Many hon. Members have mentioned the problems that the rate support grant report will cause for their local authorities. The authority responsible for major services in my constituency, Norfolk county council, is well known as a low spender. The council believes that it provides an acceptable level of local services at one of the lowest costs in the country. It frequently comes under pressure to increase spending, not least from Her Majesty's inspectors of schools.
Norfolk's grant-related expenditure assessment has been set at £231 million, but if the county council spent up to that GREA, it would incur a penalty of £36 million. I know that there is no direct link between GREAs and targets. Indeed, talking about the GREA in relation to targets is as relevant as discussing the menu in the dining room as one sinks below the icy waters on the Titanic.
The Great Yarmouth borough council, which is responsible for the other services in my constituency, is likely to be 3 per cent. over its target this year. For every pound spent over target, Great Yarmouth will lose £2·47 in grant. That is not a loss to the council; it is a loss to the people whom I have been sent here to represent.
The penalty system devised by the Government can encourage higher rates than would otherwise be levied. If a council wishes to spend less than its target, it would be unwise to do so, because the following year's target would almost certainly be further reduced, as happened to Norfolk two or three years ago. Suffolk kept its spending up and benefited from a target for the following year that recognised that fact. Norfolk's target was reduced in line with its reduction in expenditure in the previous year.
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Great Yarmouth reduced its rate last year by 2p in the pound, in line with the Government's national policies. The borough council's position illustrates another aspect of the defects of the penalty system, which is that a council could levy a higher rate than necessary to increase balances using the added interest to decrease net expenditure and making it easier to keep within the target. In the case of Great Yarmouth, instead of reducing the rate by 2p in the pound it would have been better off to have left the rate as it was originally, and used the interest gained from the higher balances to keep its net expenditure down so as to meet the new target this year.
It must be recognised that establishing GREAs, and setting targets well below them in many local authorities, and the reverse with others, is a rough and ready form of justice. My right hon. Friend the Member for Cambridgeshire, South-East (Mr. Pym) has drawn attention to the raw deal for East Anglia, pointing out that compared with the national position of other local authorities, the East Anglian authorities have been set targets for 1984–85 that are 4·6 per cent. less than the GREAs.
With regard to my county, the Eastern Daily Press recently commented that Norfolk has played the game with the Government every year and has lost every year. However, it is one of the few local authorities in the Association of County Councils that supports the Government's rate-capping proposals, in respect to the selective powers. I have given my support to my right hon. Friend the Secretary of State on that.
To be able to support with conviction the general powers for which the Government have asked I need to see more evidence that the Department of the Environment, when arriving at rate support grant settlements such as we are discussing today, shows a better understanding of the needs of local authorities where the GREA is well above target, and spending up to the GREA brings a heavy and unacceptable penalty. I noted my right hon. Friend's assurances, when he opened the debate, that he will be taking greater account of the record of those authorities that cannot be described by any stretch of the imagination as high spenders, to use my right hon. Friend's words, when drawing up targets for next year.
I understand the problems to which my right hon. Friend the Secretary of State is addressing himself. These problems arise from the past few years of gross overspending by a handful of large councils. With respect to the hon. Member for Liverpool, West Derby (Mr. Wareing), when one hears arguments such as those propounded from the Opposition Benches, one is driven more and more into the Lobby with my right hon. Friend. This consistent overspending has been to the detriment not only of the interests of local government generally but to the achievement of the economic objectives set for the nation as a whole. Because of that and the need to control that problem, I shall have no hesitation in joining my right hon. Friend in the Lobby. However, I point out that if he is not able to find a more equitable approach to consistent low-spending authorities such as Norfolk during the coming year I may not be in the Lobby with him in 12 months time.
8.3 pm
Mr. Tony Banks: It falls to me to congratulate the hon. Member for Great Yarmouth (Mr. Carttiss) on his first speech in the House. I wish that

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I could say that I agreed with every word that he uttered, but I am afraid I cannot do that, and he would be surprised if I could. The hon. Gentleman put the boot into his right hon. Friend the Secretary of State most gracefully, and criticised him. as most right hon. and hon. Members have done. The hon. Member spoke with great feeling and conviction, which comes from his long service in local authorities. The House listened with great respect to the authority that he brought to his speech.
Criticism has characterised much of the debate so far, and by my reckoning the Secretary of State is about nine and a half down at the moment. He has not been able to find much support on either side of the House. It must be clear, with all the experience of local authority on both sides of the House criticising what is being proposed, that he has got himself a report that should be withdrawn and rethought. It would appear to many of us that he is being badly advised by his civil servants.
I am reliably informed that there was a time in the House when local government issues surfaced only intermittently. However, since the general election of 1983, such matters have dominated our proceedings and are likely to continue to do so throughout the whole of 1984 as we witness an intensification of the struggle between central and local government.
I see two reasons for this development. In Britain two sets of national institutions stand between working people and the full impact of the Government's monetarist lunacy. The first is the trade union movement, and the second is the Labour-controlled local authorities. It is little wonder that both are under sustained attack from the Government. British capitalism can no longer buy off working class demands, as it did in the past, so it must resort to coercion to survive. That means imposing declining living standards and mass unemployment on growing numbers of British people. British capitalism is morally corrupt and in economic decline. During the 1980s as that crisis deepens, it will be forced more and more to reveal itself in all its arrogant and brutal reality.
In his respect, we should appreciate that the Prime Minister is very much a creation of our time—a leader who can use the language of the populist while at the same time taking the country towards an increasingly authoritarian and centralised Government. That suits her nature, in which resides the second reason for the Government's current onslaught on local democracy. The right hon. Lady hates all opposition, whether it be inside or outside the Conservative party. I once saw a piece of graffiti on a wall in London — it might have been washed away by now—which said, "Get rid of Thatcher before she gets rid of you." A number of prominent Conservative Members have recently had experience of the sharp reality of that cautionary slogan, as the Tory party gradually discards its higher minded and more principled leaders in favour of the parvenus who now dominate its higher councils. Labour-controlled local authorities have dared to defy the tactics of the right hon. Lady and her ministerial poodles, and for their temerity they must go—certainly the GLC and the metropolitan councils—such is the contempt that today's Tory party has for democracy.
The Government's campaign against local councils has revealed the manipulative nature of our political system, and the technique that has been used has been that of the big lie, repeated over and over again. We are repeatedly told that local authorities are out of control in terms of their
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public spending and must be curbed. In the recent debate on the Rates Bill we were treated to an appallingly arrogant and wholly misleading presentation of the case against local government. I hope that when the Minister sums up he will give us a slower and more thoughtful endpiece to this debate than that on the Rates Bill. For our part, we shall try to contain ourselves so that he can have the opportunity of a good run at it.
On Second Reading of the Rates Bill little attempt was made to answer the fears of hon. Members on both sides of the House about the threat to local democracy. Instead, we received the usual superficial and selective use of statistics, calculated to deceive and blind people to the truth about what is going on in local government. We are in grave danger of adding a new dimension to the saying,
"Lies, damned lies and statistics"
—namely, "Lies, damned lies, statistics and the Secretary of State for the Environment."
Ministers continually accuse local government of sabotaging the Government's economic policies. That is arrant nonsense. As hon. Members have pointed out, in the current year, 1983–84, the so-called local government overspend amounts to £771 million a year. That is 0·6 per cent. — just over half of 1 per cent. — of total Government spending of £119,600 million. Therefore, the overspend that is viewed with such alarm by Ministers is about the same amount of taxpayers' money as will be spent this year on the Government's doomed Falkland Islands policy.
According to the echoed lies in those grovelling Tory rags, the Daily Mail, The Sun, and the Daily Express, the rise in rates in recent years has been caused by profligate spending in town and county halls. That accusation has been bandied about by Conservative Members during this debate and on Second Reading of the Rates Bill. Yet between 1978–79 and 1983–84 central Government spending increased by 101 per cent., while local authority spending increased by 80 per cent. In that same period taxation increased by 94 per cent. and rates by 125 per cent. Rates increased so dramatically because of the massive reductions in Government grants to local authorities.
In effect, central Government have reduced their expenditure at the expense of ratepayers. They have used the price of local services, much as they have used gas and electricity price increases, as a form of taxation to raise money for central Government services. That is dishonest and unfair. I do not expect Conservative Members to take my word for that statement, but they may have more confidence in the Financial Times, which, in its editorial of 15 December 1983, stated:
"The Government cuts have taken £3·6 billion of grant away from Councils since 1978–79, nearly half of it from London. The total grant loss is the equivalent of 4p in the pound on income tax and the Government is less than just in not admitting that this switch in tax burden from central to local is at least partly responsible for rate rises."
That quotation is taken not from the information division of the GLC, but from the Financial Times. It makes the point that the Opposition have consistently made and that the Government have consistently denied.
The Secretary of State said that there had been a drop in the amount of central Government funding for local government. It was a dramactic drop, and it must be responsible for the great impact on the cost of services and high rate levels. In 1978–79, the Government paid for 61 per cent. of council expenditure, but by 1984–85 that will

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have decreased to 51·9 per cent. As my hon. Friend the Member for Copeland (Dr. Cunningham) said, that is a declining amount as well as a declining percentage. That is the true measure of the Government's attack on local authorities.
Who, then, is responsible for rate increases? All the sophistry, the statistical chicanery and Fleet street propaganda will not alter the truth, however much it alters people's perception of the truth.
From 1979–80 to 1983–84 — those years are convenient when we realise who has been in Government during that period — London lost more than £9/1/25501,700 million in rate support grant. The 1984–85 settlement means that if every London authority, including the GLC, stayed within the Government's targets, the loss would be more than £2,200 million. In practice, the cost will be much higher, since most London authorities cannot meet their targets, and the real loss is likely to be about £2,700 million.
The block grant system is biased against London, first, because it is based on the false premise that ratepayers in all areas should pay the same rate in the pound and get the same services. That produces higher rate bills in London, because London's rateable values are high compared with elsewhere. Despite the effect of the London multipliers, the rate bill of the average London house in 1982–83 was £401 compared with an average in the rest of England of £261, which represents a premium of 54 per cent. Secondly, the GREs, of which we have heard so much this evening, inadequately reflect the need to spend on local authority services in London in terms of volume and costs. Costs are much higher in London than they are elsewhere.
Thirdly, the per capita basis of equalisation is heavily biased against London. Although the cost of the standard service level in London is acknowledged by the GRE system to be 42 per cent. higher than in non-metropolitan areas, the cost of increments in the service level above that standard are deemed to be the same in all areas. Per capita equalisation is indefensible in London, and it is about time that Ministers considered percentage equalisation.
Fourthly, the perverse consequence of the use of rateable value as the measure of local government's taxable resources is that increments of expenditure in London, whether above or below GRE or target, result directly in grant losses. Outside London such increments in expenditure result in an increase in grant. Thus, the cost of marginal expenditure in London is magnified while the cost outside London is reduced.
Fifthly, the Government's expenditure targets for local authorities, which serve as a benchmark for measuring overspending, are based on crude calculations modified by arbitrary and capricious rules designed merely to achieve the Government's political aims. The Government's spending targets have hideously penalised Londoners and will continue to do so under the terms of the 1984–85 settlement. I should be most grateful if the Minister would comment upon those points as they affect London.
The GREs for the boroughs in the Association of London Authorities fell by 1 per cent. between 1983–84 and 1984–85, which means a real reduction of 6 per cent. Are we seriously being asked by the Government to accept that inner London's needs have declined by 6 per cent. in a year? That cannot be true. The index of deprivation published by the Department of the Environment shows
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that the 10 most deprived authority areas in Britain are all in London. Newham, in which my constituency is located, although not as well known as the area represented by the hon. Member for Great Yarmouth, is second only to Hackney in the table of the most deprived areas.
The 1984–85 expenditure target for Newham is £120 million, which is an increase of 2·5 per cent. on the 1983–84 target. If Newham spends at the budgeted levels produced by its committees, the grant penalty will be £23 million. The effect is that for every pound of expenditure at the margin, there will be a reduction of about £1·60 in block grant. Every £1 of extra expenditure will cost Newham ratepayers £2·60. Yet the ratepayers may have to face those costs because there are massive social problems in Newham, which is a deprived east end area.
Hon. Members who represent similar areas can testify to the number of people who visit their advice surgeries. In my case, a constant request is to get out of the tower blocks. We have one of the highest, if not the highest, concentrations of tower blocks. I know that a Labour local authority built those tower blocks, but it was encouraged to do so because of the cost yardsticks that previous Governments of both persuasions had put forward. That does not get away from the problem that thousands of my constituents in Newham are living in accommodation that no hon. Member would wish to live in for other than a short time, if at all.
Newham needs extra resources to deal with those deep social problems. Unfortunately, this rate support grant settlement provides none of the extra resources that Newham so badly needs.
The Government have proposed a 1984–85 target for the GLC of £561 million—a 35 per cent. cash reduction in the 1983–84 budget. I declare my interest as a member of the GLC. It is asked to make a 35 per cent. reduction in one year, but realistically that cannot, and indeed will not, be done.
In an effort to show that the GLC is not thoughtless about this matter, some calculations have been made. If it was mindful, or forced by the Government, to meet its set target, it could increase London transport fares substantially above the rate of inflation by, say, 40 per cent. That would produce £90 million. It could increase rents by £5 a week above the level determined by the Government of 75p a week on all GLC retained stock in 1984–85. That would produce a further £10 million. It could limit staff recruitment and impose some redundancies. That would have a random effect on services, but would produce a saving of £10 million.
I remind hon. Members of something that they may have forgotten or do not know. It may be thought that the GLC has a large number of staff, but it should be noted that its staff levels have been reduced from 33,000 in 1975 to 21,000 now, 9,000 of whom are fire fighters or those involved in public service work. It could withdraw all support to the voluntary and community sector established by the GLC's grant aid programme. Some hon. Members may say, unkindly, that they do not like some of the bodies to which the GLC has given ratepayers' money, but the cost of funding them amounts to nothing, not even to a few peanuts. The GLC funds 2,000 community groups throughout London. They are by no means controversial. They deal with the old, the sick, the disabled and the disadvantaged. If all those bodies were eliminated, that would produce a saving of £15 million.

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The GLC could withdraw all its support from industry and the employment programme. That would affect the 1,504 jobs that to date have been saved or created by the Greater London Enterprise Board. That would save another £30 million It could remove all concessionary travel arrangements to old age pensioners, on the assumption that they would continue to travel and pay fares. That would save another £65 million. It could then withdraw from agency agreements with boroughs to maintain roads, bridges and traffic signals, resulting in a further saving of £35 million; it could reduce the level of statutory services currently provided and save a further £10 million. It could restart borrowing for capital expenditure by reducing the revenue contribution to capital. That would save a further £15 million.
The total would amount to £280 million, which is still £20 million short of the reduction in GLC spending determined by the Government. One can imagine the impact on London services that such cuts would achieve. Yet that would still not meet the unrealistic and ludicrous targets set by Government.
I invite the Minister to say which services the GLC should cut. Apparently, Ministers want to remove all local control from local councillors. Therefore, let them say what services the local authorities should cut. I shall be interested to hear what the hon. Gentleman has to say.
A school of thought now developing within Labour groups is that we should meet the targets and impose on people the ludicrous cuts that the Government are suggesting. That will never be done, because Labour Members are far too concerned about the impact on ordinary working people. Labour councillors throughout the country seek to defend the interests of the communities they represent, yet for their pains they are abused by the Government and the lackey Fleet street press.
The Government are steadily turning councillors into stooges of Whitehall—elected enuchs who are obliged to carry out the diktats of Ministers. What is the point of standing for a local council if the ability to make decisions is to be so closely confined within artificial and unrealistic limits set by civil servants who have no personal knowledge of local circumstances and conditions?
The Government, with the aid of their Fleet street propoganda sheets, are again posing as the champion of the hard-pressed ratepayers. What utter hypocrisy! If they want to do something about rates, as they said in 1979, they should abolish them. They should come forward with a proper system of local government financing that eliminates the inadequacies and pain that rates cause to many people. Instead, the Government tinker around with the system. They resort to common abuse of both Labour and Tory councillors by suggesting that somehow town and county halls have been taken over by maverick loonies who have no concern for the welfare of the people they represent.
The Government have no interest in the welfare of the people they are supposed to represent. That is evidenced by the imposition of these riduculous and savage cuts in local and public expenditure.
Ratepayers are hard pressed. I assume that we are all ratepayers. I am a ratepayer. I know that ratepayers are hard pressed, but the Government's policy is to blame, rather than the local authorities, which are desperately trying to maintain already inadequate levels of local services and are being heavily penalised by the Government for doing so.
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This shabby Tory Government are out to shackle local government. The 1984–85 rate support grant settlement is just a further stage along the dismal road towards the end of local democracy. That is the Government's clear objective. I trust that tonight hon. Members on both sides will unite against such a move.
8.27 pm
Sir Bernard Braine: As I think the House knows, I am a cheerful man by nature, but I rise to speak in this debate with a very heavy heart.
Before I say anything further, let me congratulate my hon. Friend the Member for Great Yarmouth (Mr. Carttiss) on an excellent maiden speech. It may interest him to know that I stand in the place where, on occasion, his predecessor, Sir Anthony Fell, addressed the House. He was a great House of Commons man. Those of us who knew him over the years liked him greatly, a feeling that I know extended across the Floor of the House. Like other hon. Members, I listened with great care to what my hon. Friend said, and I am convinced that he will make a notable contribution to our debates. I look forward to the occasion when he addresses us again.
I rise with a heavy heart because I recall the Conservative manifesto on which I and my hon. Friends fought the last election. It promised, among other things, to legislate
"to curb excessive and irresponsible rate increases by high-spending councils, and to provide a general scheme for limitation of rate increases for all local authorities to be used if necessary."
When I saw those words and applauded them, it did not for one moment occur to me that when framed, such legislation would penalise low-spending local authorities that had made every effort to keep their expenditure within bounds and their rates at a reasonable level. It never occurred to me for one minute that that was in the Government's mind.
I agree with the rate-capping proposals, and I voted for the Bill last week. However, I cannot agree with what is set out in the report. There are no fewer than 14 shire counties, including Conservative-controlled Essex county council, that planned to meet the Government's target for 1983–84, but for 1984–85 will be penalised by grant being withheld if their spending is increased by more than 3 per cent. I do not know how much reliance should be put on the Treasury's estimates, but it has estimated that inflation will run at an average of 5 per cent. in 1984. Given that, it is neither fair nor realistic to expect low-spending authorities to budget for only a 3 per cent. increase.
The options open to those authorities are to make reductions in the level of services or to budget higher than 3 per cent. and to incur penalty. I will refer shortly to what that means to my county, and to why it is unacceptable to me and, I suspect, to other Essex Members. In general, the Essex Members are proud of our county council's achievements in trying to meet the call for economy. Close liaison has now been maintained with the county for several years and we have regular meetings to ensure that both sides understand what is happening. There is a close rapport between the county council and the elected Members of Parliament.
Time and again we have had to tell central Government—and as senior Member, I have had to take the lead—that our situation calls for understanding, because we are an expanding county. For that reason alone, we cannot view any reduction in services with equanimity. Although

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our rate in the pound is relatively low, the ratepayers' bill is high because of the high rateable value of property in a county that is near London. The prospect of anything being done about revaluation is remote. No one disputes that our county is economically and prudently managed. My right hon. Friend the previous Secretary of State for the Environment, and now Secretary of State for Defence, acknowledged that. Indeed, my right hon. Friend the present Secretary of State wrote in October 1983 that he was
"glad that the consultants have confirmed that Essex is running a tight and efficient ship".
There can be no question about it; Essex has never been open to criticism on the score of economy. It has long been running a tight and efficient ship. We would find it less disturbing if we felt that the Government's target figures were realistic and fair, but they are not. Let us consider the record. In 1981–82, two Government figures were produced for Essex; the GRE figure of £419·5 million and the target figure of £347·7 million. At first we were told to adhere to the lower target figure, but when the implications of that were eventually grasped in Whitehall, we were told that GRE was the figure that we had to meet.
What makes the present target figure fair and realistic? On behalf of Essex Members and the county council, I wrote to my right hon. Friend the Secretary of State on 18 November. I reminded him that his predecessor had directed that an extensive management review of the county's expenditure should be undertaken. That has been done and it was confirmed that there was no area in which significant savings could be achieved. Yet, under the Government's proposals, Essex now faces an imposed target of £473 million compared with the £480 million it requires just to maintain its present level of services.
Let us suppose that that target is accepted. Of course, it is substantially below GRE, which was hitherto regarded as the Government's own best assessment of an authority's real needs. Consider then the effects on our services and on the standards required by other parts of central Government. Acceptance would inevitably entail reducing the number of teachers beyond the level achieved by falling rolls, even though my right hon. Friend the Secretary of State for Education and Science has recently advised the chairman of the Essex education committee that he should be spending more on education, and up to the council's GRE. Thus, straight away there is a conflict between my right hon. Friend the Secretary of State for the Environment and my right hon. Friend the Secretary of State for Education and Science. Acceptance would entail reducing the number of police, even though a request for a substantial increase in their numbers in Essex is now before the Home Secretary. That increase is urgently required and is supported by the Home Office provided that Essex can meet its additional share of the cost. However, it patently cannot do so because of the wholly inadequate target.
Acceptance would also entail reducing fire cover, together with the closure of fire stations and the inadequate manning of fire appliances, even though Her Majesty's inspector has warned that Essex is substantially below Home Office requirements in that regard. Acceptance would also entail reducing expenditure on social services, by closing homes for the elderly, even though Essex has one of the lowest rates of expenditure per head on the
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social services. Essex is already 15 per cent. below the GRE for that service, and it faces substantial additional expenditure from the transfer of responsibilities from the Health Service to the social services.
How can one cut services any more? We are put in an impossible position. It is a pity that one cannot say such things to more hon. Members. However, that is not necessary, because not a single hon. Member on either side of the House has had anything to say in favour of the proposals. The fact is that the Government's left hand does not know what the right hand is doing. On the one hand, a formula is applied that militates against the advice given by senior members of the Government in respect of particular services. On the other hand, if Essex were to decide to go above target in order to maintain its services at their present level, the £7 million gap would cost its ratepayers no less than £13·6 million as a result of the harsh system of penalties. That was not envisaged in the election manifesto.
I hope that my hon. Friend the Under-Secretary will try to reconcile the election manifesto with what is being imposed on Conservative-controlled councils such as Essex. At no time did any Essex Member think that in order to curb a relatively small number of irresponsible and high-spending local authorities, councils such as Essex, which have an impeccable record of prudent management, would be so cruelly penalised.
I see no evidence in this of Conservative principles, fairness or consistency. Indeed, I fail to see evidence of logic. We are told that the object is to reduce public expenditure and to relieve the burden on industry of excessive rates. Those are desirable objectives. Hon. Members will know about the heavy burden that business and industries bear in their constituencies. The object may have been to reduce the burden, but the reality is different. Because we care about our people, it is unlikely that services will be cut. As a result, rates will go up.
The rates burden will not be reduced; it will be increased. A Government who talk about reducing taxation will receive increased revenue. Those authorities that have to pay penalties will increase the revenue but the scheme will not reduce expenditure by one title, although that is what it should be about. That is what we understood from the manifesto promise. The whole exercise was aimed at reducing expenditure and the rates burden, not only for domestic ratepayers, but for business and industry. In reality, expenditure, which is supposed to be brought under control by this crazy scheme, will be increased.
I shall listen with interest to what is said by the Under-Secretary at the end of the debate but I have to tell him that nothing has been said so far to convince me that my duty is to walk into the Government Lobby tonight. Unfortunately. my right hon. Friend, for whom I have great admiration and who is tackling an extremely difficult job, gave no sign that he would change course. He said that there may be some easement next year. That is not good enough. It does not right a palpable wrong. Unless a positive statement is made by the Under-Secretary and a helpful response is made to the constructive suggestion of my right hon. Friend the Member for Taunton (Mr. du Cann) I cannot support the Government in the Lobby.
8.42 pm
Mr. Robert Litherland: I compliment the hon. Member for Great Yarmouth (Mr.

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Carttiss) on his maiden speech. To his credit, he selected an important debate for his first speech. I am glad that he recognises that he is a privileged person and I hope that he will continue to fight for local government democracy in his constituency.
Each authority throughout the country puts a different interpretation on the rate support grant debate, for the simple reason that each authority is different and has differing needs. The Manchester city council is different from its sister city, Salford. No two local authorities are identical, so it is farcical to make comparisons. The Secretary of State does not compare like with like. Each local authority is affected differently by the rate support grant.
Each hon. Member who contributed today referred to his own authority. We all recognise the work done by dedicated local councillors and the complexities of a system which has evolved over the centuries. A democratic system has emerged which is now a part of our lives. Any tampering which takes away responsibility from democratically elected representatives will produce an outcry of protest.
The effect of Government interference by limiting local government activity and imposing financial stringencies is different for each authority. Another drastic and vicious cut in the rate support grant for Manchester, a major inner city area with all the problems that that entails, will affect every aspect of life including welfare, education and culture. Manchester's cut amounts to 5 per cent. in real terms.
The Government set the standard in Whitehall and local government tries to meet the standards in the town hall. Grant-related expenditure assessments—new terminology—was introduced in a recent Act and was designed solely for the distribution of the rate support grant. The Government said that it was an attempt to seek a fairer distribution of the rate support grant. That attempt has failed miserably.
Manchester city council has made repeated representations to the Minister pointing out the inadequacy of the system, which does not reflect the needs of a major inner city with a population of fewer than 500,000 at the centre of a conurbation containing 2·5 million people. The assessment fails to take account of individual services, deprivation, the needs of a regional centre and the restriction of the city boundaries in relation to the size of the conurbation when compared with other local authorities. Manchester has vast historical problems. It is the victim of its industrial heritage.
My constituency faces the problem of derelict factories. The Government will have to find money to deal not only with land dereliction, but with factory site dereliction. Manchester also has to bear the impact of investment decisions still being met by the payment of debt charges. In spite of the nasty propaganda by this Government, the city council in its response to the Government's White Paper showed that its net spending had fallen by 3·4 per cent. in real terms since 1979–80. Any increase in rates arises solely from the reduction in resources from central Government.
Housing subsidies for 1983–84 will be about £30 million less than they would have been if the 1979–80 level had continued. Manchester city council would have been about £77 million better off in terms of Government support if housing subsidies and rate support grant had been maintained at the 1979–80 level. In spite of all its
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efforts to meet Government targets, living on the assurance that if targets were met in 1981–82 things would be better in 1982–83, and if it met the targets in 1982–83 things would be better in 1983–84, and so on, the city still faces a 5 per cent. cut. It reminds one of a hurdle race with no winning post. There will be no winners in local government.
In spite of all its efforts since 1979, the Whitehall and Government mercenaries have deprived Manchester of over £250 million and 7,000 council jobs. The Government must realise that we are talking not about a high-spending local authority which ignores Government, ratepayers, tenants and the community, but about an authority which has made every effort to provide services with diminishing resources. No wonder local councillors and officers are sick and tired of attacks on their integrity and on local democracy.
Manchester has been named today by the Secretary of State as a high-spending authority. What can the people of Manchester expect from further cuts? Where will it all end if each year services deteriorate? The cuts suffered in the past four years will be trivial by comparison to those envisaged in the next four years if the city councillors try to meet the demands placed upon them.
The Government's intentions are laid down firmly and expressly in their rate-capping policy—the subservience of local authorities to the dictates of Government and Whitehall. Is it any wonder that councils are preparing for a bitter struggle? If each year they concede the Government's demands, there will be nothing in the future to struggle for. The Government must realise that local councillors cannot fulfil their basic statutory obligations if they are to comply with the rigid financial strictures being imposed.
Those who are affected in my constituency include the elderly who depend upon local social services, luncheon clubs, meals-on-wheels, warden services, caretakers and home helps to provide some dignity and comfort in retirement. All such services are targets for the Secretary of State. The cuts will also affect the under-fives for whom nursery provision and child care facilities, adventure playgrounds and swimming baths are essential to a happy and healthy start in life. The real human costs of such cuts are borne by such people whose numbers are swelling daily in my constituency. They know from bitter experience that the poverty trap is an ever-tightening vice. As community services and welfare benefits are eroded, their dependence on such sources of support increases.
The Government can shroud their measures in a minefield of financial jargon—rate poundages, grant-related expenditure assessments, multipliers, tapers and schedules: all the gobbledegook — but on the ground they will be seen as another turn of the crank and a further tightening of the vice. All the waffle and double-speaking that the Secretary of State can muster, which is formidable, will not hide the true nature of the cuts from the people of Manchester. Those are the areas in which the cuts will bite hard.
I hope that the Government listen to the eminent Members of their party who have warned the Government that we are dealing not just with the control of local government but with a sinister shift of power which is taking us down the wrong road. I hope that every Conservative Member who has any respect for democracy

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and local electors will be joining us in the Lobby. This is not the Orwellian year of the Big Brother, but it is certainly the Orwellian year of the Big Sister.
8.54 pm
Mr. John Maples: I join in congratulating my hon. Friend the Member for Great Yarmouth (Mr. Carttiss) on his maiden speech. He stated the problem of low-spending shire county authorities extremely eloquently, and I am sure that my right hon. Friend the Secretary of State has taken the strictures on board.
The problem of low-spending county authorities has been stated by many hon. Members during the debate. I wish to lead the debate back to the inner city urban authorities and consider the problem from the ratepayers' point of view. We seem to have two problems—the long-term problem of local government finance and the short-term need to do something with persistent overspenders. It is clear that the efforts of the past four years, through reorganisation of the grant system, targets, penalties and exhortations, have achieved little with such authorities.
The only way to stop them is to put a legal limit on what they can spend, because the new generation of London's Labour councillors do not care about the ratepayers. They have found an apparently bottomless pocket to pick and they will continue to do so until they are stopped. My constituents have to pay rates not only to the London borough of Lewisham but also to the GLC and to ILEA, which is a burden that they understandably regard as excessive. The rates in Lewisham have risen from 70p in the pound to 198p—an increase of 180 per cent. Rate bills in Lewisham are staggering. Rates on a small and typical semi-detached house are about £750 a year.
During the past four years Lewisham's net revenue spending, which is under its control and has nothing to do with the grants, has risen 15 per cent. in real terms. This year it is rising by 9 per cent. and next year it is proposed to rise by 7 per cent.
Mr. Straw: Where does the hon. Gentleman get his figures? The figures from the Secretary of State, which were given to my hon. Friend the Member for Copeland (Dr. Cunningham) in answer to a parliamentary question, show that net current expenditure in Lewisham has increased by only 83 per cent. since 1978–79. That is four percentage points over the whole period more than the rate of inflation for local authorities, and six percentage points below the average level for local authorities. If rates have increased by 180 per cent. in Lewisham, do not the Secretary of State's figures show that the reason why rates have risen twice as fast as spending lies with the Government and not with the councillors of Lewisham?
Mr. Maples: I obtained my figures from written answers to questions to the Lewisham borough council. I was referring to expenditure related to the retail price index and not to an artificial index of local authority costs.
During the same period, GLC spending has risen in real terms by 65 per cent. and ILEA's spending in the past 10 years has risen by 550 per cent., of which 280 per cent. is a real rise.
Mr. Jeremy Corbyn rose—
Mr. Maples: I will not give way.
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During the period when the real spending rose by 280 per cent., the school rolls in London fell by 27 per cent. God knows what is the increase in unit costs. This year, when school rolls are falling by a further 4 per cent., the proposed increase in expenditure is 8·5 per cent. Those authorities are not only making no effort to reduce expenditure but are actively increasing it.
So much for statistics. How is the money spent? The authorities concerned claim that they spend it on vital local services. In fact, they waste it through a combination of frivolous political expenditure and bad management. I know it is tempting to laugh when a new horror story breaks about GLC spending, but they all represent real money taken from ratepayers, which, in the opinion of most of them, is wasted.
Lewisham council says that it cannot make any savings this year. It has £5 million in rent arrears and the council has just voted never to use the bailiffs to collect a rent debt. We send problem children to school in the West Indies, we have a borough artist and extensive and expensive sexism awareness training programme for council staff. We have spent money putting up nuclear-free zone signs throughout the borough. We have 1,600 empty houses which cost £2 million a year in lost rent and rates. I am dealing with a council that cannot make any savings.
But by comparison with the GLC, Lewisham is only a beginner. The figures and the projects for the GLC are truly staggering. The GLC has recently made grants to the gay arts sub-group, the Karl Marx Centenary—it spent £35,000 of our money celebrating that —the women's art alliance, the black women's radio group, the London lesbian and gay centre, the London teenage gay group and Babies against the Bomb, whoever they may be.
Mr. Maxwell-Hyslop: The Opposition Front Bench.
Mr. Maples: I defy anyone to tell me why my constituents should pay taxes to subsidise those groups. Perhaps the hon. Member for Blackburn (Mr. Straw) could explain why my constituents should subsidise the gay arts sub-group.
Mr. Straw: As the hon. Gentleman has invited me to speak, I shall do so. What Lewisham council or the GLC spends its rates on is a matter for its ratepayers. If those councils make unacceptable decisions, they will face the proper consequences at the next election. Why does not the hon. Gentleman have faith in democracy?
Mr. Maples: The relationship between rates and the electorate is not democratic—only about one in three voters pay rates. As the hon. Gentleman is not a London Member, he may not realise that when people voted for a Labour-controlled GLC in 1981 the Labour group was led by a nice man called Andrew McIntosh—but 12 hours later the voters of London found that he had been hijacked by a junior people's republic.
Mr. Tony Banks rose—
Mr. Maples: I shall not give way, as the hon. Gentleman is a professional apologist for the GLC.
Most of the GLC's current activity is directed towards opposing its abolition. It spent £850,000 on that last year, and has voted to spend a further £1 million in the first three months of this year. County hall has become a giant propaganda factory. It is financing the campaign against the Police and Criminal Evidence Bill—which is none of its business — opposition to the Sizewell nuclear

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power station, opposition to the docklands stolport—in a scandalous manner — and is even paying for advertisements in the London local press opposing the denationalisation of British Telecom. What business is that of the GLC?
The ILEA is engaged in an equally heavy, and even more disreputable, propaganda campaign designed to scare people into believing that there can be no economies in its budget without affecting education services at the sharp end. Yet ILEA is one of the most wasteful authorities of all.
Mr. Corbyn: Does the hon. Gentleman agree that the rates paid to ILEA by Lewisham are less than ILEA expenditure in Lewisham, which makes Lewisham a net recipient of help from the remainder of London?
Mr. Maples: That is true of almost every borough in inner London except Westminster and Camden. It is not a substantive point. Taxes are paid on a London-wide basis. We all know that Westminster and Camden subsidise all the other boroughs because most of London's rateable value lies in those two boroughs—
Mr. Corbyn rose—
Mr. Maples: No, I have already given way to the hon. Gentleman, who made a rather phoney point.
Let us return to the question whether savings can be made without affecting education services. The unit of cost of educating a child in an inner London secondary school is £1,427 a year. In Bromley, just over the border, it is £979 a year, and in Birmingham it is £844. We all know that it is more expensive to do things in London, that London has special problems and that, in some respects, the education provided by ILEA is better than that provided by the two other authorities. But it is not that much better, it is not that much more expensive and the problems are not that much greater.
I shall quote some specific examples from this year's budget. In a year in which school rolls are falling by 4 per cent., the cost of recreational and community premises is rising by 22 per cent., school premises by 26 per cent., non-teaching staff by 10 per cent. and education officers' accommodation— a pure overhead, and nothing to do with schools — by 17·5 per cent. The ILEA is an extravagant authority that does not know the meaning of efficiency. It is more interested in fighting the Government than in finding savings.
All three of the authorities to which I referred are also badly managed. Lewisham does not even have a cost accounting system to enable officers to monitor expenditure against budget. Officers are not responsible for budgets, and budgets are applicable to committees, not operational functions. Therefore, if a housing manager saves money by managing with fewer people or a little less space, that is a saving not off his budget but off someone else's budget.
The results are the inefficiencies that are so obvious and so easy to see. In Lewisham, for example, the children's homes are half empty, but it still costs £900 a week to keep a child in care in the borough. The managing and maintaining of a council house cost £582 each last year and it has risen to £692 this year.
The hon. Member for Copeland (Dr. Cunningham) referred to those who know
"the price of everything and the value of nothing."
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If my memory serves me right, that is Oscar Wilde's definition of a cynic. Many Conservative Members find the attitude of Labour Members, and especially Labour councillors, to be cynical when they consider efficiency. Surely, they want to find the money to be gained from efficiency to spend on personal social services, for example, and home helps. Instead of that, we hear constant denials from Labour Members and Labour councillors that efficiency savings are possible when they are there and obvious to everyone. There are enormous potential savings to be made by proper management and there is no need to cut services. The answer is to run them more efficiently.
I agree wholeheartedly with what the Government are doing to overcome the short-term problem but I am concerned that we are not doing enough about the deeper causes. I shall briefly suggest a few ideas for longer-term reform. First, and most important, there must be a better connection between payment for local government services and votes in local elections. Everyone must contribute and everyone must realise that he or she is doing so. The Government have ruled out the various options and have not produced any new ideas of their own. I urge them to reconsider a poll tax and the relating of the rates bill to the number of adults in a household rather than to the household itself. A poll tax set at the modest rate of £50 a year would replace about 40 per cent. of the money that is now raised by domestic rating. Secondly, the rate support grant cannot continue to decline at the rate of the past few years.
Thirdly, I suggest that consideration be given to setting the maximum business rate at a national level to stop the milking that some councils have conducted of business in their areas. Fourthly, we could and should consider ending the derating of agricultural property. Fifthly, the permissible areas of local government spending must be more carefully defined so that the abuses that we have seen, of which I have given examples, are not allowed to continue. They offend many people. Sixthly, we should give serious consideration to prohibiting employees of one council sitting as elected members of a neighbouring council.
In the context of my constituency, it must be acknowledged that there are special inner city problems. For all the faults that the council has in my constituency, it attempts to tackle the problems. I concede that the problems need special provision and that they are particular to the inner city. They must be considered and provided for as such. This should be done largely outside the ambit of the rate support grant, so that specific programmes can be agreed and specifically financed.
Local government finance needs extensive reform and I hope that the Government will introduce proposals to undertake that reform before too long. In the meantime, there is a short-term problem that needs action of the type proposed by the Government. In 1975 a Labour Secretary of State for the Environment told local authorities that the party was over. Unfortunately, some of them did not get the message. For the householders of west Lewisham, the party has turned into a rake's progress. The party will not be stopped merely by withdrawing the invitation; it needs someone to turn off the tap. When there is a limit on what can be spent, councils will find savings, make the tough decisions and examine their priorities. They will not do so

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until they are forced to take that action. The Government's policy on rate overspenders will put an end to a national scandal. I wholeheartedly support it.
9.9 pm
Mr. Stan Thorne: I am rather surprised by the opposition to this measure that has come from the Conservative Benches and I hope that my right hon. and hon. Friends will not be led astray by some of the speeches of Conservative Members. In a number of instances the opposition is clearly based on local factors and the concern is directed not to the needy authorities north of the line from the Wash to Bristol but to the special circumstances of Somerset, Devon, Cambridge, Essex, Surrey, Great Yarmouth and its marina, Norfolk and Wiltshire. There are not many Labour-controlled authorities in those areas. Not many Opposition Members represent constituencies in those areas. It behoves the Opposition to examine carefully the criticisms of Government policy made by Conservative Members.
I am concerned about the problems of Lancashire and of Preston in relation to the report. The Government's cash target for Lancashire is £477·362 million. To avoid severe penalties Lancashire county council would have to reduce revenue expenditure by about £20 million. In my view, the present level of services must at least be maintained and a number of services require increased resources to meet increased need. The Government's economic and industrial policies in the past five years have created increased demand for social service provision. Poverty has that effect.
In addition, the increasing number of very elderly people creates further demand for special accommodation, meals on wheels, bus passes, and so on. There is also increasing demand for nursery provision as well as for adult education and for grants to allow adults to pursue educational courses. Road repairs are urgently needed, as little attention has been paid to this aspect in recent years. A wide variety of other needs — environmental improvements, leisure centres and so on—have become more urgent due to the Government's economic policies. Lancashire also faces major problems with regard to the police and fire services.
The GRE for Lancashire — the Government's assessment of the sum necessary to provide an adequate level of services—is £495·368 million. That is £18·006 million more than the Government's target—
Mrs. Elaine Kellett-Bowman: Paragraph 2.
Mr. Thorne: If the hon. Member for Lancaster (Mrs. Kellett-Bowman) wishes to speak, no doubt she will manage to catch your eye, Mr. Deputy Speaker.
The Government's own calculations thus support the contention that the present level of services is not unreasonable. Yet to avoid penalty the council will have to make a reduction of £20 million. If it spent at the GRE level it would incur grant penalties of £26 million.
Mr. Straw: Like my hon. Friend, I represent a Lancashire constituency. Does he agree that the penalties faced by the council, or the rate increases necessary to protect services, are the more unacceptable in that
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expenditure in Lancashire over the past four years has increased by less than the average for local authorities and by far less than central Government spending?
Mr. Thorne: I fully accept that. I had assumed that my hon. Friend would deal with that in winding up the debate. The reduction in the overall rate of grant from 52·8 per cent. to 51·9 per cent. in 1984–85 will mean that the county council's grant will be about £6 million less than it would otherwise have been. Inevitably, all this means hardship for the people of Lancashire.
In Preston, the situation will be disastrous in certain respects, in particular housing. Preston needs a major input into housing provision. It has large estates which have uninhabited houses, unfit for human habitation, boarded up, waiting for the resources to repair them to make them habitable. We have an enormous housing waiting list. There are many families with small children living in multistorey blocks. Many areas of Preston have become known colloquially as Dodge city — Callan, Moor Nook, Faringdon Park, and others. They are atrocious areas, of which the hon. Member for Tiverton (Mr. Maxwell-Hyslop) and other Conservative Members have no conception. In their narrow sectarian arguments, they are quite oblivious of the needs of people living in Lancashire and elsewhere in the north. People in Preston should have decent homes, and sites should be cleared to build new houses.
Mr. Martin M. Brandon-Bravo rose—
Mr. Thorne: I shall not give way. We need an input of several million pounds. A clear decision must be made: are we to increase rents by about £3·50 to £4 a week so as to carry out the necessary repairs to houses and provide for those in need—
Mr. Brandon-Bravo rose—
Mr. Thorne: —or are we to consider an additional 6p rate to make that provision? Or will the Government will the means to carry out this radical work in Preston?
The rate support grant is supposed to aid local government in providing houses and other services. In my opinion, responsible local authorities seek, in spite of the difficulties, to meet the needs of the people who live in their areas. One could ask a question that has been asked time and again, "Is a decent home a right?" In wartime, such houses were called possible homes for heroes. In peacetime, we talk about homes for people in need. Some local authorities attempt to meet those needs. However, the Tory Front Bench, with its capacity for Newspeak, rejects the concept of need. Its past economic decisions require it to ignore need and to promote deprivation.
The Government may suggest that so far there is no major evidence of rising discontent with the Government, but it will come. History will show that the Rates Bill, the housing benefit legislation, and the rate support grant policy have had a significant quantitative and qualitative effect on the growth of extra-parliamentary activity in Britain. We shall see more of it in the none too distant future.
9.18 pm
Mr. James Couchman: I am not at all sure that I should speak in this debate, because I spent the weekend trying to read this document, and I confess that I am as confused as when I began. Indeed, I suspect that

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I am not alone among hon. Members. My confusion deepens when I look at the treatment that is to be given next year to the district and county councils, affecting my constituents.
We enjoyed one another's company, Mr. Deputy Speaker, on the Adjournment debate last Friday. I recognise that this is not an Adjournment debate and that therefore I should not allow myself to take a purely parochial view. However, the state in which Gillingham borough council and Kent county council find themselves serves admirably to demonstrate what a complex mess the present rate support grant rules have created.
Gillingham borough council is one of the thriftiest councils in the country. It has a rate of 6·39p in the pound and an RSG current expenditure per head of £22·86, which is the fourth lowest in the country—easily the lowest for any urban authority—and just over half the average for all districts, which is £43·31. Gillingham's staffing ratio, at 5·71 per 1,000 people, is just three-quarters of the average for its group of 43 districts, which is 7·65 staff per 1,000.
Gillingham spends less per head on almost every service than the average, and has no unusual source of income. For 1983–84, Gillingham's budget expenditure is estimated at £2,499,000 against a GRE of £5,030,000. It is spending just 49·7 per cent. of its GRE.
Gillingham's frugality verges on parsimony. One would have thought that this thrifty, careful—almost mean — council would have been the apple of the Secretary of State's eye and been held up as an example to the many profligate local authorities. Yet, incredibly, Gillingham faces the distinct possibility this year of being penalised under the holdback scheme. Since it was allowed only a 3 per cent. rise for inflation next year, that possibility has become a near certainty.
Gillingham faces unique pressures for such a low-spending authority. The Government have closed the royal naval base and dockyard at Chatham. With that closure, 7,000 job prospects were lost. Unemployment has risen to 16·3 per cent., which can be compared with the very worst in the north. That unemployment rate alone will put extra strains on Gillingham's purse. Although the Government have taken several commendable steps to alleviate the unemployment problem, Gillingham has attempted to do so in its own way by taking measures to bring in new business, with start-up premises and involvement in a recently opened ITEC.
The burdens have been exacerbated by a high level of activity on housing improvement grants and by the administration of the housing benefit scheme, not all of which is being reimbursed and which will certainly cost more in real terms than the administration of the former scheme. An unforeseen additional burden has been placed on the council by the decision of its partner in a computer-sharing scheme to go solo. None of those tasks was the choice of the borough council, but they have all added expenditure and brought closer the prospect of grant holdback.
Kent county council is a similarly thrifty authority on a much larger scale. It seems likely that, notwithstanding major savings on education, social services, police and highways, a penalty will be incurred.
The sinister aspect of Kent's position arises from the fact that the gap between GRE and target is widening. In 1983–84 the Kent GRE was £31 million, or 6·7 per cent., above the target. For 1984–85, GRE is £37 million, or 7·8
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per cent. above target. Kent has been given a target for 1984–85 which reflects the maximum allowable increase over the 1983–84 budget, but in cash terms Kent's target is further below GRE than that of any other authority in the country.
A further concern in a county with substantial unemployment is the Government's restriction on using capital receipts to expand the capital programme beyond the tight allocations notified by Government Departments. That will limit Kent's ability to maintain an adequate level of capital investment when capital schemes could bring a substantial injection of activity to the private sector of the construction industry.
The straitjacket in which both Gillingham and Kent find themselves demonstrates the failure of the policy of holdback to control the high-spending authorities to the advantage of the thrifty. The profligate ignore the penalty and blame swingeing rate increases on the Government, while the thrifty have long since exhausted any fat that there might have been. The effect of the holdback policy on the thrifty has led to dismay about the Rates Bill that we discussed last week. They believe that they could end up as victims of that scheme as well.
Gillingham and Kent do not want their targets lifted so that they can indulge in a wild orgy of spending. They have too much respect for their ratepayers. Indeed, it is to protect those ratepayers from the draconian financial penalties that they face that they plead for fairer and more realistic targets. They realise that GREAs are not a measure of what the Government expect them to spend, but this abstruse booklet defines GREA as
"an assessment of the cost to each authority of providing a common standard of service, allowing for differences in the characteristics and needs of different areas…These assessments in general relate spending needs to the cost of providing services to each 'client' in need of them or 'unit' of service provided."
That method of constraining the wilder urges of local politicians was never meant to penalise authorities, such as Gillingham, for spending under half their GREA. This grotesque scheme takes Government support for local government out of wonderland and straight through the looking glass.
I shall go into the Government Lobby with a heavy heart, and diffidently, for I believe that the scheme is unfair to the councils affecting my constituents. I ask my right hon. Friend the Secretary of State to look long and hard at the scheme during the coming months. I am to some extent cheered by what he said today. I could not support the scheme unamended next year unless there were an amendment to distribute grant in a much fairer and more rewarding way to the careful and thrifty good housekeepers of local government.
9.27 pm
Mr. John Cartwright: Unlike other hon. Members I shall vote against the report and not just speak against it. I shall do so not because of its effects on an individual local authority but because the whole philosophy on which it rests is fundamentally wrong. I confess to being an unreconstructed localist. I believe that decisions about local spending are best taken locally. I have always been extremely sceptical about the concept of grant-related expenditure assessments, and about the idea that Ministers in Whitehall, however well-intentioned and

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however sophisticated their computers, can tell us what it is right and proper for a local authority to spend to tackle the problems of its area.
The concept of grant-related expenditure is undermined as an objective test of a reasonable level of spending when we find that the spending targets set by the Government are not directly related to this magical grant-related expenditure. I shall quote three examples of indefensible anomalies that arise from the report and from the use of targets and GREAs. The first is about the shire counties, most of which are Conservative-controlled. Thirty-three out of the 39 have been set targets below their grant-related expenditure figures. As a result, if they were to spend at the grant-related expenditure level — the level that central Government say is a reasonable assessment of their need — the situation would arise in which the shire counties would lose £761 million in penalties. One county, West Sussex, would lose its entire grant. I cannot believe that that is a sensible and logical way of approaching the problem.
The second example I give comes from the greater London area and relates to a problem of considerable concern to Londoners at present, the question of the future of the concessionary fares scheme in greater London for the elderly and the handicapped. The London Boroughs Association — Conservative-controlled, of course — is currently looking at the problem of taking responsibility for administering the concessionary fares for the elderly when and if the Greater London Council is abolished. The London Boroughs Association is not particularly happy about the prospects. It has discovered a very large gap between the grant-related expenditure assessment on concessionary fares in London and the spending. Grant-related expenditure represents approximately half what is being spent at present on concessionary fares in London. The LBA points out that if individual boroughs that are on what is called negative marginal rates of grant—that is, if they overspend their target figure, they will lose grant —overspend on concessionary fares, not only will they get no grant for concessionary fares, but they will lose grant for many of the other services they are providing. That would involve considerable losses for a number of the boroughs concerned.
The London Boroughs Association suggests that the best solution to the problem would be to increase grant-related expenditure for concessionary fares to something near the level now being spent on that service. However, it fears that the other possibility is much more likely, that expenditure will have to be reduced to much nearer the level of the present GRE. It goes on to suggest that
"this would mean a complete reappraisal of the scheme both as to the concession granted and as to its availability. This would go against the line the Association has so far taken."
Therefore, all the undertakings that we have been given by Ministers — that the concessionary fare scheme in London is safe when the GLC goes, that the boroughs will be able to take over that responsibility and that there will be no diminution in the quality of the service—look extremely doubtful as a result of the operation of GRE and target in that respect.
The third example I give relates to the question of GREs in inner London. In 1983–84 the 12 inner London boroughs had a total GRE assessment of £695 million. In the coming year it has fallen to £678 million, a fall of 2·4 per cent.
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in cash terms. Many of us in inner London regard that as a shocking outcome. Only one inner London borough, Tower Hamlets, had an increase in its GRE assessment. The Government clearly accept that there are major social problems in inner London. The whole partnership scheme, the whole urban aid scheme, indicates that that is accepted, yet we are told that, to maintain an average level of service, it is perfectly possible for the inner London boroughs to spend less money. Against a background where local authorities as a whole will be spending 3·4 per cent. more, as judged by GRE assessments, the fall relatively in inner London is almost 6 per cent. I think most of us in inner London will regard that as unacceptable.
The other general point I wish to make concerns the effects of the rate support grant report now before the House on the total proportion of local authority expenditure to be met by central Government. We can all recall that, as recently as 1979–80, 61 per cent. of relevant spending was being met by Government grant. For the current year the figure is nominally 52·8 per cent. but, with the penalties providing a windfall to the Exchequer, the actual figure is likely to be below 50 per cent. For the coming year, the nominal figure is down again, to 51·9 per cent. and the penalties will reduce it still further.
I do not like local authority dependence on Government grants. I agree with Layfield that he who pays the piper calls the tune. Dependence on Government grant has done more to undermine the autonomy and independence of local authorities than almost anything else. However, if we are to reduce the proportion met by Government grant, we have to give local authorities a fairer and broader tax to replace that money.
I agree with Layfield that a local income tax provides the most likely solution to the problem. We are now getting the worst of all worlds. The Government are reducing their contribution and transferring more of the burden from taxes, which are broadly fair, to rates, which many of us regard as being overstretched and extremely unfair. The Government then penalise and pillory local authorities for being "wicked overspenders" because they have to raise their rates to meet the extra burdens imposed by cuts in grants.
Some hon. Members have argued that the Government's plans will have a salutary effect on local government, which will be forced to become more efficient as a result of the sudden cuts in grant income. As a former leader of a local authority, I know—and I imagine that some Ministers will have had similar experiences — that sudden cuts in resources can be extremely wasteful. The slamming on of brakes is not the most efficient way of getting a good return from investments. A sudden cut in revenue for local government will not automatically improve efficiency and may make things much worse.
I believe passionately that rate capping will remove the responsibility from many local councillors. In defending themselves against charges that services are inefficient, they will have the perfect excuse and will say, as some do now, "It is nothing to do with us. Central Government are interfering and it is their problem." We are going down a dangerous road in making local government finance even less comprehensible. God knows, the old rate support grant regression analysis system was difficult enough, but the present complex system of grant-related expenditure

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assessments, targets, holdbacks, clawbacks, disaggregation ratios and safety nets is impossible for ordinary people to understand, and that is bad for local democracy.
Worse for local democracy is the fact that it is increasingly difficult for electors to influence the policies of their councils. Councillors will have to take more notice of the views of Cabinet Ministers and civil servants who will be breathing down their necks. We shall get the form of local democracy without the reality.
Hon. Members on both sides of the House have pointed out that we have got into this difficult situation because the Government have backed away from admittedly decisions about reforming local government finance. I understand why those decisions have been avoided. They are not easy decisions, but we are paying a heavy price for that avoidance of tough choices. We have a system of local government finance that is ever more complex, a bureaucracy that grows ever more powerful and intrusive and Whitehall interference that grows month by month and year by year. And after all that, I still do not believe that the system will work.
I agree with the right hon. Member for Taunton (Mr. du Cann) that the nettle will have to be grasped and that we must have a reform of local government finance to share the burdens more fairly and encourage responsible local decision making. The report goes in the wrong direction and I shall oppose it.
9.39 pm
Mr. Michael Shersby: I am glad to follow the hon. Member for Woolwich (Mr. Cartwright). I listened with interest to his speech. Like him, I have take a close interest in local government for many years, and I have served as a councillor in two London local authorities.
In company with other hon. Members, I am once again debating the rate support grant for England and, as usual, hon. Members on both sides of the House are expressing their concern about the way it affects their particular local authorities. As we know, the amount of the grant is determined partly by Government policy and partly by the operation of the formula that has been in operation for several years. That formula is supposed to take account of the needs of each individual authority and to provide a grant that is fair and reasonable and that will enable local authorities to discharge their statutory duty. It is also intended to enable local authorities to provide local services that they consider desirable and that reflect the wishes of the local electorate, within reasonable bounds. The formula also means that those authorities that overspend unreasonably incur penalties through loss of grant.
When that formula was first devised, my right hon. Friend the Member for Henley (Mr. Heseltine) was Secretary of State for the Environment, and many of us on the Governent Benches hoped that it would 'be an improvement on the previous arrangements. We recognised that it was not perfect—I doubt whether any formula that anyone could devise could be perfect—but it was my hope, and that of many of my hon. Friends, that with some refinement and the benefit of several years' experience, it would be a good system, and informed people would be able to see how the grant was calculated and able to regard it as fair and reasonable for their local authorities.
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I regret that my hopes have not been fulfilled, and that this year's grant has proved to be by far the most unsatisfactory, particularly for my local authority, the London borough of Hillingdon. The result of this year's settlement presents Hillingdon with difficult problems, and it is about that that I shall speak. The estimated grant for spending at target goes down this year by £3·3 million. In a settlement that involves an increase in the total amount of grant available, there should not be a cash loss for spending at target. Hillingdon's budget for 1983–84 is a mere £1·5 million over target, a small sum in terms of the total budget of £87 million.
I listened with great interest to the speech of my right hon. Friend the Secretary of State, in which he talked about the cost of providing local services and how that cost differs from one London borough to another. He might be interested to know that the cost of providing services in Hillingdon is about £350 a head. That is a little more than it is in Wandsworth, but unlike Wandsworth, Hillingdon is an education authority. However, even if Hillingdon were to spend on the same level relative to target, it would still have to find a further £2·3 million because of further grant losses.
Why is this? Hillingdon, which has been led since 1978 with considerable distinction by my hon. Friend the Member for Slough (Mr. Watts)—who I am glad to see is in his place tonight — is one of the Secretary of State's blue chip local authorities. I can say with confidence that my hon. Friend the Member for Slough, supported by my hon. Friend the Member for Hayes and Harlington (Mr. Dicks) who is deputy leader of Hillingdon borough, together with their colleagues, have achieved a deserved reputation for economic efficiency and for showing just what can be done to provide good services at a reasonable cost to the ratepayer. I pay tribute to this record, as does my hon. Friend the Member for Ruislip-Northwood (Mr. Wilkinson), who wishes to be associated with my remarks.
In view of the position that has developed in Hillingdon, I wrote last week to my right hon. Friend the Secretary of State for the Environment expressing my deep concern about the settlement and the effect that it would have on my constituents and those of the other constituencies in the borough of Hillingdon. The Secretary of State has written a letter to me today which says:
"Hillingdon have certainly tried to find savings, but there is no question of Hillingdon having decimated their services as a result of our policies. Since 1981–82 they have increased their expenditure by 11·6 per cent. During the same period, local authority costs have increased by 13·1 per cent."
On that ground, Hillingdon does not seem to have done too badly. The Secretary of State continued:
"I do not disguise the fact that the council will face some extremely difficult choices in setting the 1984–85 budget. Your letter clearly shows this."
It is true that in Hillingdon we employ a few more staff for each thousand people than some other outer London boroughs, but that is because we provide a better service for the mentally handicapped and the elderly—a service of which we are especially proud and which is enormously important in such an outer London borough. I remind my hon. Friend the Under-Secretary of State that since 1978 Hillingdon has reduced its staff from 12,025, when it was Labour-controlled, to 10,600 this year. That information must suggest to my hon. Friend that Hillingdon authority

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is not employing more people than it should, but a sensible number of people to provide good services at a reasonable cost.
Why, then, will Hillingdon lose so much grant? It is because of the wretched formula which increased the penalty and the consequent loss of grant for a small margin of expenditure over target. In his opening remarks, my right hon. Friend the Secretary of State referred to the problem faced by authorities spending a little above target, and gave the impression that that would not cause enormous problems, although he mentioned that those authorities would incur penalties because of the total national expenditure. That would not be too bad if Hillingdon had ample reserves, but that is not the case. Because it has heeded the Government's call for the utmost efficiency and to cut expenditure, there are no lush balances to cushion the effect of the penalty. That shows that the imposition of the penalty on Hillingdon results from the inflexible nature of the formula and the failure of the Department of the Environment to take account of Hillingdon's outstanding record of success.
My right hon. Friend has been most kind and considerate, as he always is, but he has not been well served by those who advised him who have apparently failed to draw attention to the effect of the loss of grant in this and similar cases. In other words, there is no evidence that my right hon. Friend is aware that those authorities that have backed him loyally year after year will now face this difficulty, and no effort is being made to overcome that.
It is not for me to detail the various cuts in services which Hillingdon may have to make to avoid a rate increase of about 20 per cent., and instead to levy an increase no greater than the current rate of inflation of 5·3 per cent. My hon. Friend the Member for Slough and his colleagues rightly believe that any increase in rates in that borough should not exceed the rate of inflation. Like me, they listen to the views of domestic, commercial and industrial ratepayers. In my constituency, the latter are represented by the Uxbridge Industrial Estate Association and other organisations, who have made it clear how important it is to maintain the rate at a reasonable level because they must bear the added cost of the GLC rate, whatever that may be.
The problem must be faced by the much-respected councillors in the borough who must, unless the Secretary of State undertakes to amend the formula, make some uncomfortable and unpleasant choices in the weeks and months ahead. The authority faces a difficult problem and it will have to present a bleak picture to my constituents. That position cannot possibly be justified.
In the circumstances, I must consider the position not only as it affects Hillingdon but as it affects the other outer London boroughs. The London Boroughs Association has drawn to my attention the fact that the outer London boroughs gained only 0·8 per cent. in GRE which, with inflation running at 5 per cent., represents in real terms a loss of 4 per cent. How can that be justified? How could I be justified in voting for the settlement that is offered to the House tonight?
I do not feel able to support the Government in the Lobby tonight, which is a matter of great regret to me. My hon. Friend the Minister cannot consider me as one of those Members who constantly kick over the traces against
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the Government, but I hope that he will feel that, when people such as I do so, there must be something seriously wrong with the system. It is about time that the Government reconsidered the matter and began to do something about it. If they do not, not only will people such as I kick them on the shins, but my constituents and many others will say that they will no longer put up with it. We need action now to amend this crazy formula and to ensure that councils such as Hillingdon do not suffer such unjust and damaging penalties and consequent cuts in services.
The Government would be wise to take account of the fact that during this debate, which will continue until 11.30 pm, we have yet to hear a speech from a Conservative Member congratulating the Government on the policy which they are pursuing and on the benefits which they are bestowing on local government. Instead, we have listened to a catalogue of the great difficulties experienced by hon. Members on both sides of the House. I hope that my hon. Friend the Minister will realise that there is grave disquiet about this settlement, and that urgent action must be taken. We cannot wait until next year, and we cannot wait until Parliament has considered and either enacted or rejected the legislation on rate capping. We cannot wait until the Government believe that they are in a more satisfactory state to be able to improve the grant settlement.
Important services are likely to be truncated now, and although I fully support the Government's policy of reining back public expenditure, there are other ways of doing it. The Government are trying to rush it, but they cannot produce a grant settlement that affects good local authorities and expect them to decimate local services and to revive some next year. That is not practical politics, and I do not believe that the settlement has been properly thought through by the Department of the Environment.
It is with great regret that tonight I am in the unusual position of having to say that I cannot support the Government. It is urgently necessary for the Government to think again and to try to get us out of the crazy position in which I and many other hon. Members find ourselves on this unhappy and unpleasant occasion.
9.53 pm
Mr. Jeremy Corbyn: I have the honour to represent part of the borough of Islington. There can seldom have been a local authority that has been more maligned and vilified by Ministers and their friends in the press than Islington since the 1982 elections. It is strange that they should mount such an attack against a democratically-elected council, when that council's efforts are directed to carrying out the manifesto on which it was elected.
The Labour party in Islington drew up a long and comprehensive manifesto because it believed that the borough council had a role to play in solving the terrible housing problem of thousands of my constituents, protecting and creating employment in the borough and providing good social services. There is a link between the three matters. If a borough has high unemployment and many social needs—housing, meals on wheels, home helps, nurseries, play groups or after-school clubs for children—it can solve two problems at one stroke. It can create jobs by providing for the needs of its people.
The people of Islington are angry that since 1979 they have been fined nearly £40 million by the Government.

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That money has been taken away through penalty clauses, cutbacks, loss of grant and a general lack of regard for the problems faced by those living in a typical inner city borough.
It is incredible to relate that at the same time the Government, wearing a different hat in the Department of Transport, propose to spend upwards of £30 million on a one-mile stretch of motorway to bring traffic into a borough that cannot cope with it. It is a weird sense of Government priorities that condemns a council for trying to provide services while at the same time giving it a road that no one wants.
Apart from the problems faced by my constituents, this debate is part of a more serious and sinister process that the Government have followed since their election in 1979. Instead of accepting the needs of inner city areas—that people living in those areas have suffered from high unemployment, long housing waiting lists, multiple deprivation, inferior environmental conditions and all the other things associated with inner city life — the Government continually cutback local authority support. In spite of the principle that if an area is in need it is the job of central Government to provide some resources to solve its problems, there has instead been a steady catalogue of penalties, discrimination against areas of high stress and high need and central Government spending on areas in less need.
We now have the fantastic situation that the education service for the whole of inner London receives not a penny of central Government money for its schools expenditure. It is the only education authority in the country in that position. That is a product of nearly five years of the Tory Government's attitude towards the poor people of the inner-city areas.
Those of us who represent areas of multiple deprivation are angry at, and feel nothing but bitterness towards, the Government for their attitude to local government. Not only have they consistently taken money away from local government; as proposed in the Rates Bill, they intend to introduce central Government control over local government. That is a dangerous centralisation of power in the hands of a small number of people.
Conservative Members may smile, but they will regret it when they try to get local decisions made for their constituents and find that they are blocked by a Minister. No genius on either side of the House has such a breadth of vision that he is fit to run local government, yet that is where the Rates Bill and this rate support grant lead.
It would be bad enough if the Government's restrictive legislation affected only the inner city areas, but we must also take account of the other forms of restrictive legislation, such as the civil defence regulations now going through the House. That adds up to a dangerous concentration of power in the hands of Ministers, many of whom spend little time addressing the House in their attempts to get such legislation passed.
I have a long circular from the London chamber of commerce. Every few months, certainly at rate-making time, it writes to say that, because some Labour-controlled authorities are putting up the rates whereas certain Tory-controlled authorities are not, business is driven from one borough to another and the economic life of the city is being destroyed. Yet it always fails to mention that central Government expenditure has gone up by 101 per cent. at the same time as local government expenditure has gone up by 80 per cent. It fails to mention that local government
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spending has increased because needs have increased, because unemployment has been increased by that very same Government. It also fails to mention that local rates in London have increased because of the penalty clauses imposed on councils every year by a system which it is claimed is fair and logical.
I have spent nearly 10 years serving on a local authority. Every year, about this time, locally elected councillors sit far into the night trying to devise ways to carry out manifesto commitments. They find an incomprehensible series of regulations has been sent down to them by central Government, telling them that they cannot do this, that or the other, and that if they try to increase the number of home helps, for example. it will put them over the GREA formula. Consequently, a further penalty will be incurred, because they have tried to help others. That is dictatorship, not democracy, and the rate-capping Bill last week was the final straw for local democracy.
In 1979–80 the volume of central Government spending on local government was about 61 per cent. That figure has now fallen by more than 10 per cent. However, the penalties have continued to rise. I hope that Conservative Members will read some of the material that they have been sent by the Association of Metropolitan Authorities. After all, in our long debate, only half a Conservative Member has spoken in favour of the Government 's RSG settlement. Perhaps Conservative Members will think for a moment about why some of us are so bitterly opposed to it and its effects.
A circular sent out by the Association of Metropolitan Authorities states that in real terms the cash cutback in this year's RSG means 12,000 fewer teachers, 11,600 fewer social services residential places, 8,300 fewer day-care places, 46,200 fewer homes attended by home heaps, 52,800 fewer meals on wheels per week, 2,500 fewer children boarded out and — this might interest Conservative Members—7,100 fewer policemen, 7,150 fewer civilian support staff, together with fewer firemen and road workers. Every grade of council worker is being cut.
These days, in the poorest parts of the country, should not the Government be thinking about providing more home helps, more meals on wheels, better day nurseries and better after-school clubs instead of persistently attacking local democracy and the right of people to elect councils in the knowledge that they will be given the freedom to carry out the manifesto on which the election campaign was fought?
I am sponsored by the National Union of Public Employees. I have spent some years negotiating with local authorities and health authorities on behalf of public sector workers. Conservative Members lecture us in their high-handed and arrogant manner about local government efficiency and efficiency in the National Health Service. However, I should like them to consider the efficiency of administering local government in this way, and the inevitable waste from continual stop-start policies. They should also consider the social and public spending consequences of making people unemployed. The Government could tell Islington, or any other district, borough or metropolitan authority to sack all their meals-on-wheels workers and home helps. By doing so, thousands of elderly people would be condemned to a life of misery and loneliness. They would not be at all dependent on the public sector, but nobody else would

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look after them. In addition, a few thousand women workers would become unemployed and have to line up each week in the unemployment queue instead of working and providing a good service. If they work, they are paid instead of being a charge on the state through unemployment pay.
Most public sector workers, particularly manual workers, are paid disgracefully low wages through the decision of central Government. It is the Government who impose penalties on local government if they try to pay their manual workers a reasonable wage. Yet at the same time the Government lecture public sector workers on the need for efficiency and privatisation, which mean poorer services for lower wages so that the Government can give the profits to their friends who operate the private cleaning companies, gardening companies and the incompetent refuse collection service in Wandsworth, which Conservative Members have been so keen to tell us about.
Conservative Members talk about business people being disfranchised because they cannot vote in local elections and therefore on the rates. I know of no legislation which prevents anyone who is eligible from voting in a parliamentary election or in a local election where they are registered to vote. Business people are not prevented from voting, and I do not see why they should have two votes just because they have the money to set up a business. We abolished that system many years ago, and I do not want it back.
Perhaps we should be talking about the lack of democracy in public employees not being allowed to stand for election to the local authorities for which they work. They are denied access to their democratic rights because they are public employees. Conservative Members say that such employees should not even be able to stand in local elections anywhere else. Is not that another attack on democratic rights?
I hope that Conservative Members who tonight and in the rate-capping debate a few days ago said that they were worried about the centralisation of power and the attack on democracy that goes with it will have courage to vote down this monstrous rate support grant proposal. I hope that they will put a flea in the Secretary of State's ear and say, "What we need is a Government who care for the people, for local democracy and for local services and who are prepared to provide the necessary money.".
Islington has been told on many occasions that it is spending too much money. Most weeks The Sun the Daily Express or the Daily Mail carry stories by journalists who are sent to look for dirt about Islington council and to follow councillors around. They even camp outside the council leader's house. An orchestrated campaign against Islington is taking place.
Many of the people in Islington are poor and rely heavily on council services. Many of them tell me at my weekly surgery, as I am sure they tell my hon. Friend the Member for Islington, South and Finsbury (Mr. Smith), that they need more home helps. They want it to be easier for elderly relatives to find a place in an old people's home. They want a better street-sweeping service. They think that the rates are high, but they do not think that the council is profligate. The rates are high because central Government have penalised Islington council for attempting to carry out its manifesto pledges on which it was democratically elected in 1982.
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It may surprise some hon. Members to learn that Islington council would have to increase its expenditure by only £12·9 million for it to be in receipt of no rate support grant from central Government. That sum is not large when one considers the people's needs. Would it not be a scandal and a condemnation of the Government if, in an area of above average unemployment, homelessness and deprivation and below average wages, the council received no money from central Government because it attempted to meet the needs of the people.
Even to maintain services and to keep within the guidelines imposed by the Government the borough of Islington, keeping spending within inflation, would have to put 25p on the rates. Because of the way in which the clawback system and the attack on local democracy operates, Islington would be fined. I am sure that many other councils are in the same position. The iniquitous system is designed to attack any local authority that attempts to meet the needs of the people who elected it.
People come to my surgery week in, week out, including children aged 11, who take valium because they are depressed and distressed by their housing conditions. They have been told that accommodation is not available because the council does not have the money with which to build houses for them. Some children under the age of 10 go into hospital with bronchitis—the hospital does its best to cure them and make them well, despite the cutbacks—but they return to privately rented, damp and putrid flats, and the bronchitis returns and the illness continues. Is it any wonder that the health of people in the inner city areas is considerably worse than that of those who live in rural areas or more fortunate suburban communities?
We are dealing not just with a cutback in spending by those councils that are attempting to meet the needs of their people and provide good services, but with an attack on local democracy. We are also dealing with an attack on local authorities which are providing the services that people need. To many of my constituents—I am sure the same applies to other hon. Members who represent inner city areas—the services provided by councils, be they meals on wheels, home helps, libraries, day centres for the disabled and the elderly, represent the thin line of survival.
If my council does as the Government say, many such services will go and many of my constituents will literally be murdered by the policies being pursued by the Government. That is what their attack on the social services means. If one adds to that the attack on Health Service spending in my constituency, as well as in other constituencies, one has a cycle of deprivation, of cutbacks in public spending by local authorities, cutbacks in health services and longer waiting lists and unemployment queues.
At the same time we receive lectures about efficiency and against profligacy in local government from Conservative Members who can find £8 billion to spend on cruise missiles and, apparently, more than £100,000 per prefabricated bungalow in the Falklands because they do not give a damn about the poorest people in the country.
The debate is about democracy and survival for the poorest people in the community. Above all, it is about the purposes of central Government, which should be to redress imbalances in society and provide help for those who need it, not for those who are well-off and doing very nicely because of the economic policies pursued by the Government.
10.12 pm
Mr. Churchill: The hon. Member for Islington, North (Mr. Corbyn) will not expect me to follow him in his attack on the rate-capping powers that the Government are seeking to obtain. Councils such as Islington, by their profligacy with ratepayers' money are driving industry and commerce out of their boroughs and are directly responsible for increasing unemployment. It is essential for industry and local ratepayers to be protected from such councils.
The squandermania of Islington and other Marxist-controlled boroughs knows no bounds. The hon. Member for Islington, North has treated the House to a synthetic plea concerning the plight faced by his constituents. How does the borough to which the hon. Gentleman referred find the resources to send people swanning around the Caribbean, poking their noses into Grenada and trying to scratch at anything that they can to throw against the United States of America—
Mr. Corbyn: Will the hon. Gentleman give way?
Mr. Churchill: I shall be happy to give way to the hon. Member if—
Mr. Corbyn rose—
Mr. Speaker: Order.
Mr. Churchill: I shall be happy to give way if the hon. Gentleman will tell us where the finance for that visit came from. I believe also that he accompanied several councillors from the borough.
Mr. Corbyn: I am happy to tell the House about that. The hon. Gentleman is not giving a factual account of what he believed may or may not have happened. A delegation from Islington, Haringey and Sheffield, including myself, recently visited Grenada, but not one penny of that visit was paid for by the ratepayers of Islington.
Mr. Churchill: It is interesting that the hon. Gentleman does not say who paid for his trip. I know that he is being pressed by the press to reveal that, but he has thus far refused to do so.
Mr. Corbyn rose—
Mr. Churchill: No.
Mr. Corbyn rose—
Mr. Speaker: Order. Two hon. Members should not be on their feet at the same time.
Mr. Corbyn: I am happy to inform the House that I paid for my visit to Grenada.
Mr. Churchill: It is nice to be assured that the ratepayers of Islington will not have to pick up that bill —although we are still not clear who will have to do that.
Last year's rate support grant settlement was so catastrophic for the Manchester borough of Trafford—I have the privilege to represent part of it—that I and my hon. Friend the Member for Altrincham and Sale (Mr. Montgomery) had no choice but to vote against the Government. Following our representations, the Government acknowledged that Trafford had been unfairly treated and £1.2 million was restored to our grant —£750,000 in respect of falling school rolls. We now find that the limited ground—and more— made good since last year's rate support grant has been lost. The 1984–85 grant is based not on last year's adjusted grant. but on the original grant that the Government conceded was wrongly calculated.
In consequence, we find ourselves facing a reduction of nearly £2·5 million in rate support grant, which has been reduced from £22·5 million to barely £20 million. In terms of block grant as a percentage of target, Trafford fares worse than any other metropolitan district at 27·9 per cent., the next lowest being Newcastle at 33 per cent. Our notified grant for 1984–85 represents the loss of 11 per cent. in cash compared with last year, and 15 per cent. in real terms — again, the largest reduction of any metropolitan district.
Our target is well under GRE. Were we to spend at the prescribed standard level, we would be penalised to the tune of more than £500,000. The safety net that previously existed, and from which Trafford benefited in respect of falling school rolls, has now been removed. Trafford believes that it is suffering from delays in revaluation. That is based on a statement contained in the White Paper, which declares that older industrial properties in the north and the midlands are now over-valued. That means that industry in the established industrial areas is paying too much in rates. Trafford, by the same token, is losing too much of its grant.
We in Manchester feel strongly that the discount of 30 per cent. on rateable values given to the London boroughs, including Islington, should either be extended to other high resource areas or be abolished completely. There is no justification for treating the London boroughs in a privileged way compared with areas such as the Trafford district of Manchester.
Although many of my right hon. and hon. Friends have had cause to make complaint to the Minister on behalf of the local authorities in our constituencies, which have been careful with their expenditure and have kept within the Government's guidelines—they have been kicked in the teeth and penalised for their pains—several of the high-spending local authorities have had their grants increased for 1984–85 in spite of all the Government's rhetoric. I do not understand what the hon. Member for Islington, North was belly-aching about. Islington has gained 2·3p in the pound in grant. Doncaster has gained 4·2p, Cleveland has gained 4·9p but Trafford has lost 2·7p. Where is the justice in that? Where is the sense in that?
In 1981–82, the first year in which the present system of block grant was in operation, Trafford received £25·1 million. Its grant is now down to £20·1 million, a loss of £5 million, or 20 per cent., in cash terms over four years. In real terms the grant should have been £29·5 million this year to maintain its 1981–82 value. This year's settlement

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represents a reduction of 32 per cent. in grant since 1981–82. Were we to go back to the previous grant system, allowing for the transfer of grant to the Greater Manchester council, I estimate that our present grant would be found to be well under half the 1975–76 level. All the cuts are well in excess of any reduction that has been imposed nationally.
It cannot be right that a council such as Trafford, which has so loyally implemented the Government's policy of restraining expenditure and seeking efficiency wherever it may, should so repeatedly be done down by the formula that Ministers use. Last year I warned Ministers that if they continued to give prizes to those who so openly flout their injunctions and guidelines while penalising those who do the Government's bidding, they would be undermining their own policies. Last year I begged Ministers to reconsider the formula upon which the rate support grant settlement is based. They have done nothing. They have ignored all the warnings. When will my right hon. and hon. Friends get a grip of the situation? When will they insist, with their civil servants, that the flawed formula be changed?
It gives me no pleasure to find myself unable to support the Government this evening. Unfortunately, I have been left with no other means of making clear on behalf of my constituents that Trafford is not prepared to accept a fundamental injustice.
10.23 pm
Mr. Jack Thompson: This has been a fascinating debate in that it has been completely unbalanced. The arguments against the Government's proposals have outweighed the few arguments that have been advanced in their support. One or two shots have been fired across the bow of the Secretary of State and one or two have been put through the bow. More seriously, one or two shots have been put through the waterline. The right hon. Gentleman will probably have to examine the holes that have appeared in his ship after the debate has concluded.
About two hours ago I telephoned my home, which is in my constituency in the north of England. I wanted to ascertain the weather conditions. I could not contact anyone directly because it appeared that they are all engaged in clearing the snow. This bears on the arguments that have been advanced on behalf of the London boroughs and local authority services.
Currently my local authority is out in force trying to clear the snow. If it were possible for Members to go on a magic carpet trip 300 miles north of here, they would not see my county because it is white from end to end. That is not the case in London, but London has its own problems. Inner city problems are quite different from the problems of Northumberland. That is why local government exists—to deal with local affairs at the local level. The Government's local government Acts and their latest rate capping and rate support grant proposals are destroying the basis of local government.
Before 1979 my political aspirations did not include membership of this House. I was heavily involved in local government and still am. Since then, however, it has become increasingly clear that the situation has changed. Local people have less and less autonomy to make local decisions and more and more decisions are made in
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London. I was not sure then whether they were made in Westminster or in Whitehall, but it is now clear that they are made in Whitehall. It became increasingly obvious that any decisions, arguments and debates must take place in Parliament as local opportunities constantly diminished.
From 1979 until the last general election I was on the receiving end of Government policy. The erosion of local democracy in that period was dramatic. If the recent rate capping and rate support grant proposals go through, I believe that the process will have passed the point of no return. Since 1979 major efforts have been made to curtail local government powers by all possible means. culminating in the Government's latest proposals.
The theme is clear—the final removal of local autonomy and the right of local people to provide for local people. In the past, our system was an example to the rest of the world of how real democracy should work, from the national arrangements and the two Houses of Parliament to the democratic arrangements for local government. It is perhaps a sad reflection on the population of Britain that the proposals now going through Parliament will not come to their notice for many months to come because they do not realise what is happening until it hits them locally. Too often the popular misconception has been that council operations are typified by workmen leaning on shovels. Nowadays the workmen are not even there and very soon there will be no shovels either.
A great many statistics have been given today. They have been useful in making the arguments for various areas. I shall adopt a different approach. My county is known for its moderate local government, whether it be Conservative or Labour-controlled. Control seems to change over a 15-year period. Labour has been in control for about two years and it is likely to continue for 15 years. Before that, we had 15 years of very moderate Conservative rule. I am the first to concede that the Conservative councillors were reasonable people, prepared to talk to their opponents about what was best for the county. They were Northumbrians — and very responsible ones. I am proud to have been associated with them—not all of them, but many of them. We had the determination to share in the common defence of our county.
I was involved both as a council leader and as a Member of Parliament, in what was defined as a Northumberland action group. It consisted of the county council, all six district councils, only two of which were Labour-controlled, and the Members of Parliament. It was established originally to consider the 1980 and 1981 Bills, which later became Acts. Its primary function in 1983 was to examine the White Paper, Cmnd. 9008. Following that examination, they all reconfirmed their attitudes. The one principle that they supported was that no matter what form of political or non-political control the council had, it was the right of the people of Northumberland to determine the range and level of services in Northumberland because they understood the needs of the county and districts—unlike civil servants in London. That is the important principle that all Northumbrians in local government adopted.
One matter has not been mentioned tonight. Local government operates because thousands of people in this country do what I still call voluntary work in that sphere, because the recompense they receive for the work that they do is so small that their work can only be described as voluntary. What will the Secretary of State do if many of

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those responsible people decide that they have had enough? What will he do if the local government workhorse—the councillor—decides to stop work before he is killed between the shafts of the cart of the local authority? The load on that cart is increased day by day by the Government. The time will come—I predict that
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it will come at the next local elections, or the ones after that—when people in local government say, "We will not take any more. We will pack it in, and leave it to someone else." The people who take their jobs will come for all the wrong reasons. That is what worries me, and that is where democracy will disappear.

Local Government
10.31 pm
Mr. Jack Straw: First, I congratulate the hon. Member for Great Yarmouth (Mr. Carttiss) on his maiden speech. It was an excellent and courageous speech which ably fulfilled the first duty of us all, which is to represent our constituents.
This debate has proved an even greater embarrassment to the Government than the debate on the Rates Bill just six days ago. At least in that debate five Conservative Back Benchers spoke in favour of the Bill. Today only one speaker has supported the Bill. Indeed, the score stands at 22 to 1, and it includes 10 own goals. Ten of the 11 speeches from the Conservative Back Benches have been thoroughly against the report on the rate support grant settlement. Even the hon. Member for Davyhulme (Mr. Churchill), who began his speech with a vitriolic attack on the spending policies of the Islington borough council—that was just the froth—reserved his venom for his own Government and Ministers.
We make five charges against the Secretary of State and the Conservaive Government. First, the Government alone are responsible for the fact that there will be rate rises of at least 8p in the pound—and, in many cases, up to 40p in the pound—in Conservative as well as Labour areas, in counties as well as towns and cities. Second, the Secretary of State has fixed the system of grant assessments so as to penalise the most hard-pressed areas — almost invariably Labour—and force up their rates significantly more than the average. Third, the Secretary of State has claimed as overspenders many Labour authorities which have, in fact, made real cuts in their expenditure over the past four years. Fourth, by reducing the proportion of the rate support grant, most authorities, including many of those which have done exactly what the Secretary of State and his Conservative predecessors sought, face massive rate rises or cuts in services, or both. Fifthly, the Secretary of State has imposed upon local authorities demands about cuts in services and general improvements in efficiency which central Government have manifestly failed to achieve themselves.
The vote against the Rates Bill last Tuesday was lost but the argument against it was overwhelmingly won—on the question why rates have risen and will rise as much as on the rest of the disreputable and discredited case which the Secretary of State and his junior made for the Bill. In the now immortal words of the right hon. Member for Chesham and Amersham (Sir I. Gilmour), who was once a leading member of the Prime Minister's Cabinet,
"It is not a matter of what the Labour Party says. It is the truth."
It is the truth that rates go up every year because the Conservative party has cut the rate support grant. In other words, whether one lives in the town or the country, whether one has a Labour or a Conservative council, it is not the local council but the Thatcher Government which has pushed up one's rates in the past and will push them up again next April.
As well as that of the right hon. Member for Chesham and Amersham, we have the Secretary of State's word for it. Last Tuesday he was forced to admit — wriggle though he might — that the calculations of his hon. Friend the Member for Ashford (Mr. Speed) were
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arithmetically correct when that hon. Member pointed out that had the rate support grant stayed at 60 per cent., as it was in 1979, rates would have risen less than the retail price index rather than rising by 50 per cent. more.
We also have the word of the Association of County Councils, a Conservative-controlled body dominated by the men and women who form the backbone of the Conservative party in its heartland, the shires. The ACC says that the ratepayers face abnormally high increases, serious cuts in services, or both. In discussing why rates have risen more than inflation, the Association of County Councils said that the "excess and more" of the increase in rates above the rate of inflation
"can be attributed entirely to the action of the Government, by reducing the percentage of their support to local government … and by failing to maintain the real terms value of the domestic rate relief. If these had been properly taken into account then the figures show that rates would have risen more slowly than general inflation."
While rates have risen almost everywhere, as both Conservative-controlled associations predicted, there is no question but that some of the greatest increases have occurred and will occur in predominantly Labour and urban areas. The simple reason is that the Secretary of State has manipulated the grant-related expenditure assessment system which allocates rate support grant and the methodology of targets to ensure that those areas, which on the whole need most, should receive least.
The Secretary of State claims that the GREA system is an objective measure of the amount needed to provide a standard level of service. In doing so, and then making grant-related assessments the yardstick against which to measure individual authorities' assessments, the Secretary of State is using the assessments in a way in which his predecessor, the Minister for Local Government, explicitly pledged to the House that they would never be used. GREAs can at best be no more than a rough and ready way of allocating grant to local authorities. Apart from the opportunities that the system may provide for political bias, no one who has studied the appendix to the report could possibly come to any conclusion but that the system is riddled with value judgments of an arbitrary kind.
I shall give a non-political example. Does anybody seriously believe—does the Secretary of State believe—that the only indicators of whether children under five will be at risk, and thus impose demands upon the social services, are whether they have a black father or mother, whether their parents are separated, or whether they live in a house with no inside water closet or bath? Yet that is what the grant-related assessment says. That is what the Secretary of State asserts. Both are wrong in a way that should offend both our compassion and our common sense.
In the selection of factors, the weight given to them and the Secretary of State's discretion over multipliers, the system is open to clear political bias and has been used by the Secretary of State in a wholly unacceptable and subjective way. The Secretary of State, in defending himself against the charge by the Opposition that expenditure by the Government had risen faster than that of local government, said that unemployment had doubled. Does he not realise that the doubling of unemployment—the 3·5 million on the dole—imposes additional demands not only on the Government but on local authorities? Yet the weight given in the GREAs to adult unemployment is minimal compared to the

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overwhelming burden that its growth has imposed on so much of the country, nowhere as much as in the inner urban areas.
With regard to how the grant system has been manipulated, we not only have to take my word for it or that of the ACC, but we have the word of the Secretary of State, at least as communicated by the hon. Member for Reigate (Mr. Gardiner). The Financial Times of 5 December, commenting on the howls from the ratepayers of Reigate about what will happen to them in April, stated:
"Mr. George Gardiner, the local Tory MP, has told the council that Mr. Jenkin 'grabbed me in the division lobby to say he had instructed his department to "feed every possible solution into the computer" to try to find a way of helping Reigate'."
Did the Secretary of State say that, or was the hon. Member for Reigate making it up? If the right hon. Gentleman said that, what was the purpose of feeding every possible solution into the computer if not to manipulate the system of GREAs, or was it of targets, in a purely partisan and political way? The Secretary of State has the gall to call the system objective. As the ACC commented,
"The operation of targets"—
the Secretary of State's computer—
"has robbed GREs of their last vestiges of credibility."
I hope very much that no Conservative Member will be taken in by the syrupy words of the Secretary of State about how the system might be changed next year. It is a promise of jam tomorrow that will not come right. All that is on offer under this Secretary of State is brimstone tomorrow.
As the right hon. Member for Taunton (Mr. du Cann) said, these promises ring hollow when compared to the experience of local government. As the hon. Member for Tiverton (Mr. Maxwell-Hyslop) said, what the Secretary of State was doing was encapsulating the doctrine of "mailana", that something would turn up. Conservative as well as Labour authorities had promise after promise, and I hope that their representatives are not willing to accept more promises or unbankable cheques from the Secretary of State and his junior.
To justify himself, not least to his sceptics on Conservative Benches, the Secretary of State said, as he told the ACC conference in Cardiff, that the high spenders were depriving the shire counties
"of resources which you need in your counties."
That statement is simply and categorically incorrect. In every single statement by Conservative local authority associations, the blame for high rate increases has been placed exclusively at the door of the Government. In not one of any of their statements have Conservative local authority leaders suggested that the higher-spending Labour authorities are to blame, nor arithmetically could that be true. The amount of rate support grant that each Conservative area has received cannot possibly have been affected by the other authorities' budgets. The system simply does not work in that way. The Government, for all the Secretary of State's complaints, have made a handsome profit out of the alleged overspending by Labour authorities. The £280 million that the Secretary of State has docked from the rate support grant of higher-spending authorities has been retained by the Treasury to reduce the public sector borrowing requirement.
Let us hear no more complaints by Conservative Members that what Labour authorities are doing is pushing up public borrowing. What Labour authorities have been doing for the last year, thanks to the Secretary of State's
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system, is pushing down Government borrowing to the tune of £280 million. None the less, the Secretary of State persists in his mendacious justification of this settlement by pointing to high spenders who
"continue to spend with no regard to national policies or the burden to their ratepayers".
It is, indeed, the case that some of the authorities on the Secretary of State's hit list—though far fewer than he would have the House believe — have increased their spending by more than the average, just as the national Government have increased their spending on some services—for example, on defence and unemployment—by considerably more than the average. These overspending authorities fall into three categories—the GLC and ILEA, some inner London boroughs and the metropolitan counties.
Most of the GLC's increase in spending has gone on additional subsidy to London Transport. This additional subsidy has proved overwhelmingly popular with the 90 per cent. of Londoners who use public transport in London—not that the Secretary of State would know anything about that. This year, so popular has the travelcard proved that London Transport will make £40 million profit from the scheme. The Secretary of State for Transport has said that the present fares will not increase significantly above the level of inflation. Unless the Secretary of State for Transport is lying to the House, he will, when he takes over London Transport, have to confirm more or less the same level of subsidy as the GLC is providing today.
As for ILEA, its costs are higher than other counties elsewhere, but so, too, are those of other London services provided centrally — for example, the Metropolitan police. There has been a reduction, not an increase, in staff by ILEA of 3 percentage points, and ILEA's expenditure, which has increased by 95 per cent. since 1979, has increased less fast than central Government's expenditure on goods and services.
As for the London boroughs, they, too, have had to meet massive increases in demands, especially for social services. As the Alliance Member for Woolwich (Mr. Cartwright)—he is no particular friend of the Labour borough of Greenwich—pointed out in the Rates Bill debate last Tuesday, despite the substantial increases in spending by Greenwich—and Greenwich's spending has gone up by 113 per cent. since 1979—Greenwich still spends less per head on vital services for its electors than many similar boroughs, including Conservative boroughs, according to a study by the very Audit Commission whose work the Secretary of State was commending to the House only six hours ago.
As for the metropolitan counties, their real increase in spending above the average has been approximately 13 per cent. in real terms. That is attributable, first, to the much higher levels of inflation in the fire and police services caused by pay settlements, nationally negotiated and agreed by central Government; and secondly, to the growth in the numbers in the police service and in subsidy to public transport. Forty per cent. of the real growth of the metropolitan counties is a direct result of those counties carrying out the national Government's mandate on the police, the rest as a result of improved support to public transport. That improved level of support to public transport formed a central part of the manifestos on which the Labour party fought and won the county council elections in 1981. That was at a time in 1981 — how time passes and opinions change — when the same

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Conservative Government who are now seeking to end local democracy had defended the ideal of the local mandate by solemnly telling the House that the
"ultimate decision on rating and on the volume of expenditure of local authorities is a matter for the councillors themselves",
to quote the words of the then Minister for Local Government.
The Government's position is even less defensible, because a Department of Transport study shows that, for every £1 of subsidy paid by the metropolitan counties to public transport, the economies of those areas benefit by £1·20 or £1·30. The Government's claim about the bad effects on local economies of subsidies from the rates have been damned out of their own mouth.
So much for authorities that have, following clear local mandates, spent more than the average. What of those that have spent less than the average but are, nevertheless, attacked daily by the Secretary of State as profligate overspenders? Why does the Secretary of State keep picking on Sheffield and Haringey when their expenditure has risen by less than the average?
Mr. Patrick Jenkin: Haringey has the highest rate in London.
Mr. Straw: Of course it has. That is because of the cuts in rate support grant imposed by the Secretary of State. I am talking about what has happened to expenditure.
Why does the Secretary of State keep complaining about rate rises in Newcastle? As he told the House, rates have gone up by 130 per cent. in Newcastle, but the council's expenditure over the past four years—while it has been Labour-controlled — has gone down in real terms; it has risen less than the retail prices index. Will not the Secretary of State admit that the reason why rates have risen in Newcastle has nothing to do with that authority and everything to do with the cuts in rate support grant which he has imposed? What is true for Newcastle is also true for Manchester and Liverpool.
Mr. Tony Banks: I bet the Secretary of State is glad that he is not replying to the debate.
Mr. Straw: The Secretary of State's approach to local government spending is even more outrageous, because the Government are making of local authorities demands that they have manifestly been unable to achieve themselves. Yes, the Government have made cuts in public spending, but they have principally been cuts in grants and subsidies to social security beneficiaries, hard-pressed industries, public transport and, of course, local authorities. When it comes to the services for which the Government are responsible and which Ministers are running, a different picture emerges.
The public expenditure White Paper shows that Government spending on central wages and salaries, goods and services has risen by 101 per cent. — four percentage points more than the comparable spending of local authorities. And those figures exclude the amount by which unemployment benefit has had to rise.
One of the truths about central Government is that they run little directly, but they run defence. Not only has defence expenditure risen by 110 per cent., apparently as a result of a deliberate decision, but we see such enormities as prefabs in the Falklands costing £130,000. We would never hear the last of it if that were being done by a Labour-controlled local authority.
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The Government run the Metropolitan police, expenditure on which has gone up by 20 per cent. in real terms, compared with only 15 per cent. on police in the metropolitan counties, yet London still has the least efficient police force, with an expenditure per head twice that of the police forces in the metropolitan counties and with the most overblown bureaucracy. But the GRE system accommodates the Metropolitan police overspend while penalising increased expenditure on the police in other metropolitan areas, despite the fact that that has been done at the behest of the Government.
Then we have the record of the Secretary of State when he was running the National Health Service. What a record that is! He introduced a reorganisation to cut administrative costs. There were no elected councils to get in his way. The transitional costs of the reorganisation—£40 million—were 500 per cent. of what they should have been and—surprise, surprise—there are now 6,000 more administrators in the NHS than there were when the Government took office.
It is this Secretary of State who is now expecting authorities to make cuts of between 3 per cent. and 10 per cent. in their spending in the course of a single year. Thousands of firemen, teachers and social workers face the sack if the Secretary of State's plans go through. The services that they provide to those most in need will be decimated.
Only one hon. Member, the hon. Member for Lewisham, West (Mr. Maples), has spoken in support of the Government, and he used figures that he had made up.
Mr. Maples: What particular figures is the hon. Gentleman suggesting I made up?
Mr. Straw: If the hon. Gentleman did not make them up, they were still very different from the figures that the Secretary of State gave the House on recent spending in Lewisham, which has been less than the average rise for local authorities.
The Association of County Councils has, for the first time, called categorically for the report to be rejected because of the damage that it will do to its Conservative-controlled local authority members. However, this Conservative Government are deaf to criticism. Last week's revolt was brushed aside because, Government business managers told the Financial Times, those dissenting from the Government were either "has-beens" or "never would-bes".
As I told the House last Tuesday, the system of control over local authorities that the Government are taking has no parallel outside the Soviet bloc. We now find the Government adopting not only the methods of the Kremlin but the language as well. In one of the most revealing statements that I have ever read during the period of this Government, we learnt on Friday that Mr. Bernard Ingham, the Prime Minister's press secretary, and a man in whom only last week the Prime Minister was expressing her fulsome confidence, described those who dare to oppose the Government from their Back Benches as "dissidents" who were to be "neutralised". [HON. MEMBERS: "Oh."] I have no doubt that Mr. Ingham was reflecting the language of his boss, the Prime Minister, and that opposition inside the Conservative ranks is now to be treated as dissidence.
I hope that Conservative right hon. and hon. Members will not accept such Stalinist sentiments, will show their

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disgust at the way that the Government are undermining democracy, and recognise that the tradition that the Prime Minister is seeking to establish has nothing to do with the tradition of the British Conservative party and everything to do with an alien, continental Right-wing tradition, which would lead this country and their party down a difficult path.
If we reflect on what has transformed the quality of life of our citizens in the past century, absolute changes in living standards will come a long way down the list. Our nation has been transformed by the provision of pure water, a decent sewerage system, public health control, free education, a free health service, effective public transport, gas and electricity and decent social services. The institutions most responsible for these services, which have pioneered these services and which have, above all others — certainly above central Government — been responsible for the real improvements in our lives, are the local councils, which have provided these services collectively and in a democratically accountable way.
That great Liberal turned Unionist, Joseph Chamberlain. who did so much to transform the lives of the people of Birmingham by such collectively provided, democratically accountable services, would turn in his grave if he knew what vandalism was being wreaked on these services in the name of the Conservative party. We oppose the report because it will wreck education, social services, transport and public health services and will seriously damage the quality of life for millions of our citizens. In doing so, we invite Conservative Members to join hands with their Conservative colleagues in local government and join us in the No Lobby tonight.
10.59 pm
The Under-Secretary of State for the Environment (Mr. William Waldegrave): The hon. Member for Blackburn (Mr. Straw) never uses one exaggeration when two will do. He scored an own goal by introducing Birmingham, because the gentleman who sits under the portrait of Joseph Chamberlain, and all the other Chamberlains, hanging on the staircase of that great building is not only a stalwart supporter of the Government's rate-capping legislation but for two years running has managed to cut rates. It is an example that Opposition Members should follow.
There have been two, exactly mutually contradictory, lines of criticism of the report in the debate. The Opposition have again and again claimed that targets set for authorities could not be met, or that meeting them would have the direst effect on services. The message from the Labour party was the age-old message of the Labour party in Opposition — although it soon becomes a different tune in Government—that spending where they have any say over it has increased, is increasing, and should be increased even further. That line of argument is most honourable when it is at its most straightforward, as in the speech of the hon. Member for Thurrock (Dr. McDonald), who argued simply that Labour believes in high spending and that is the end of it.
Against that, we must say, as Conservatives with a large majority in the House, that we take a different view, and that we believe that it is our duty to struggle to restrain spending at the level which the House has approved. Less satisfactory is the argument from some Opposition Members, including the hon. Members for Copeland (Dr. Cunningham), for Newham, North-West (Mr. Banks) and
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for Blackburn, which makes excuses for high spending, claiming that authorities have been forced into it by the system or by the Government. That is an attempt. for the purposes of debate, to diminish the perfectly straightforward political division between us — Labour high spenders on one side and Conservatives who resist increases in public spending on the other.
The completely contrary argument is put by my right hon. and hon. Friends who have criticised the report. They say, most stalwartly, that spending can and must be held down. My right hon. Friend the Member for Cambridgeshire, South-East (Mr. Pym) said that straightforwardly, and my right hon. Friend the Member for Taunton (Mr. du Cann) said it with great force. Even more important, they say that in some cases it has been held down. That is the essence of their case.
My hon. Friend the Member for Devizes (Mr. Morrison) said that the record of central Government was not as good as that of local government in this matter. But that is what the House voted for. In the 1980 White Paper that embodied the policies that we put before the electorate at the 1979 general election, the services that we considered as priorities, such as defence, were mostly those run by central Government. There is nothing surprising about it; that is what we voted for. However, it is not fair for my hon. Friend the Member for Devizes to use the argument—of course, the Opposition use it. because they will use any old argument—that rates have increased because central Government grant was cut. The purpose of cutting central Government grant was not to transfer spending from one tax to another; it was to demonstrate with the only means open to us at the time that: we wanted spending to be reduced.
My right hon. and hon. Friends' criticism is based on the fact that they say that the very thing which the Opposition say cannot or should not be done has been done but has not been sufficiently rewarded or recognised by the Government in this report.
My right hon. Friend the Member for Cambridgeshire, South-East, who is perhaps the hon. Member with whom I least wish to disagree, reaffirmed his commitment to the control of public spending. But my right hon. Friend must recognise that the system as it now operates was not designed in six months by my right hon. Friend the Secretary of State. He is the first Minister with the courage to come to the House to ask for direct weapons to use on high-spending councils, to enable him to move towards rewarding the low-spending authorities. My right hon. Friend the Member for Taunton made that point most fairly. The Secretary of State has had the courage to do that, but I shall return to the speech of my right hon. Friend the Member for Cambridgeshire, South-East.
Mr. Charles Morrison: My hon. Friend has just implied that if the overspend by some local authorities is brought to an end, that will enable the Government to redistribute the money that is saved among the low spenders. Last week, some of us understood that the overspend was an overspend pure and simple and that the Government were trying to save £750 million. If that is right, there will be no money to redistribute. Will my hon. Friend say which is right?
Mr. Waldegrave: The two objectives are not incompatible. The first is to save money and to meet the targets that my hon. Friend and the rest of us have voted

733
for. If at the same time we have the subsidiary objective of making the system fairer, surely that is a perfectly honourable position.
Mr. John Gorst: Although I understand the reply that my hon. Friend has just given, I do not understand how, when a borough such as Barnet complains that wrong facts are going into the computer, we can expect any sort of justice.
Mr. Waldegrave: I believe that the borough of Barnet is complaining about the Audit Commission figures, which are based on the CIPFA figures. No doubt Barnet is conducting that discussion with CIPFA.
The two arguments we have heard today are at completely different ends of the political spectrum. Without doubt, an Opposition whose support is so diminished will look for support where they can find it, but it does little for the consistency or rationality of the case of the hon. Members for Blackburn, Copeland or Liverpool, West Derby (Mr. Wareing) to pretend that there is any point of genuine contact between their arguments and those of my hon. Friends who are dissatisfied.
My right hon. and hon. Friends make criticisms with which I can feel sympathy, and I shall return to them, but, as for the Labour party, it was with mounting incredulity that I heard the claims about what our targets mean for vital services. Of the 10 authorities being asked to cut by 6 per cent., seven have increased current expenditure by more than 100 per cent. since 1978–79 against a price increase of 71 per cent. The GLC is, of course, being asked to cut spending by roughly a third because it has managed to increase its spending by no less than 185 per cent. in the same period. It has nearly tripled its expenditure.
These are huge real terms increases, and they allow massive room for savings without damaging essential services.
Mr. Straw rose—
Mr. Waldegrave: The hon. Gentleman has just made a 30-minute speech and I am trying to answer the debate.
Some hon. Members — for example, the hon. Member for Newham, North-West—have claimed that the expenditure targets for particular authorities are unattainable. Very high-spending authorities that complain about their settlement targets are complaining about a self-imposed burden. Year after year they have deliberately decided to spend beyond their targets, and, having got themselves into this situation, it is now for those authorities to decide what to do. Authorities remain free to choose to exceed their targets, but the consequence in loss of grant means that rates will be higher than they would otherwise be. If our targets have been so impossibly strict, how are 80 per cent. of local authorities budgeting to spend within 2 per cent. of target in 1983–84? The truth is that the variation in the cost of comparable services between authorities is far too wide to be explained even and only in terms of variations in efficiency; we have to recognise that in many high-spending Labour authorities public spending is seen as an end in itself. The right hon. Member for Halton (Mr. Oakes) asked whether any shires were among the high spenders. I am in the unfortunate position of living in one that is—Avon.
734
Some of these authorities, not content with being high spenders on traditional local government services, have steadily expanded into other areas. Some of them are intrinsically sensible, such as regional industrial policy and help for the unemployed, but they are areas where Parliament has decided that central Government has the principal responsibility for action. Others are intrinsically absurd for local authorities, such as foreign and defence policy or Northern Ireland policy.
Mr. Straw: Why does the Under-Secretary categorise Avon as an overspender when its expenditure—an 87 per cent. increase over 1979—is less than the average for local authorities? Apart from the fact that they are Labour-controlled, why are authorities such as Avon, Manchester and Newcastle classed as overspenders when they spent much less than the average?
Mr. Waldegrave: The present Conservative opposition in Avon—although it will not be in opposition for long—could easily explain how large savings could be made without damaging any essential services. Those savings should be, and will be, made.
Some of the authorities have launched out into areas that are intrinsically absurd for local authorities, where expenditure has not only been poured down the drain but has been mischievously expended. For example, Sheffield city council has spent £15,000 of ratepayers' money to prepare a video to show Members of Parliament its views on local government finance. The Conservative group on the council prepared a rather better video. I watched it carefully. It cost £50, and they paid for it out of their own pockets. There are hundreds of other examples.
Lambeth is owed almost as much in rent arrears as the whole of Birmingham, which has nearly three times as many tenants. Sheffield and Camden have appointed peace officers on the rates. Sheffield is having a record label and plans a fully equipped recording studio for budding pop stars. Lambeth has decided to pay all the parking fines of its local officials. Camden has put on free exhibitions on peace and disarmament. I hope that I do not need to go on.
Mr. Tony Favell: Is my hon. Friend aware that in Sheffield it now costs about £1,000 per annum per employee of the British Steel Corporation? Is it small wonder that BSC is on its knees?
Mr. Waldegrave: The effect on commerce in Sheffield has been well demonstrated to my right hon. Friend the Secretary of State by local business men.
This argument, that many Labour authorities are absurdly high spenders, should not be confused for a moment with the allegation that we do not recognise the particular problems of some urban areas. We do.
Mr. Eric S. Heffer: I have been in the Chamber for all the debate and would like to know whether the hon. Gentleman agrees that it was wrong of Nottingham council to give grant aid to the two iceskaters who have just won the European championship.
Mr. Waldegrave: I shall pass over that question.
Of course we recognise the real needs of urban areas. Urban areas will get as big a proportion of rate support grant under this settlement, if they spend on target, as they received under the Labour Government's last settlement. London, for example, stands to receive 16 per cent. of block grant in 1984–85 assuming spending at target. In

735
1977–78, it got 15·1 per cent, of grant. That may be of interest to the hon. Member for Newham, North-West, who asked me about such matters.
So, despite the criticisms we have heard of block grant and GRE methodologies, if—but only if—inner city authorities would take steps to moderate their spending they would get the same sort of share of the total grant cake as they have had under successive Governments. Another way of putting that is that the GREs for inner city areas are usually far higher per head than for other areas, in recognition of the spending need. Of course the system recognises need.
Outside London the nine metropolitan districts with the highest GREs per head are all either partnership or programme authorities. Similarly, inner London boroughs such as Islington, Southwark, Hackney and Lambeth have much higher GREs for the services that they provide than authorities elsewhere.
Our commitment to urban regeneration policies is demonstrated in the continuing partnership and programme authority arrangement. The hon. Member for Southwark and Bermondsey (Mr. Hughes) reminded us of that. The urban programme grant, which authorities receive already, reduces their net expenditure for comparison against target. In addition, we are proposing again to disregard, when assessing holdback liability, all increased spending by partnership and programme authorities on projects supported by urban programme grant.
The hon. Member for Wallsend (Mr. Garrett) questioned the section 11 Home Office grant for areas with high Commonwealth immigration. The grants have been supported by hon. Members on both sides in the past. They recognise the need for extra language tuition for new immigrants. There is traditional bipartisan support for those grants.
The fact is, of course, that too many inner city authorities are making no attempt whatsoever to moderate their spending—quite the reverse. They are apparently happy for their ratepayers to suffer the consequences in lost rate support grant. Let us look at Islington, if we can bear that briefly for another moment. Over the last two years alone, its expenditure has risen by 32 per cent, while local authorities' costs have risen by 13 percent. Of course the borough has problems. We recognise that and that is why it is a partnership authority and why its GRE per head is £353 compared to Wandsworth's £240. We cannot ignore massive increases in expenditure of that order. The message is clear. If inner city authorities are losing grant, it is mostly because of their own spending decisions.
I said earlier that I had far more sympathy with the quite different criticisms of my right hon. and hon. Friends. They say not that spending cannot be cut but that it can be, should be and has been, and that particular authorities deserve more credit for that than we have been able to give them so far. That is at the heart of the worries expressed by my right hon. Friends the Members for Cambridgeshire, South-East and Taunton and by my hon. Friends the Members for Castle Point (Sir B. Braine) and Devizes.
Some authorities will make great efforts and manage to keep their budgets at or close to target in 1984–85. I pay tribute to them for their efforts. Their most acute worry is about 1985–86. Many authorities, but not all, are telling us that they cannot make further cuts. My right hon. Friend the Secretary of State has given reassurance on that
736
because, of course, in 1985–86 the picture is importantly different. Subject to Parliament's approval, the Rates Bill will soon be on the statute book. That means that for the first time we shall have the power to restrain the worst excesses of the high spenders directly.
My hon. Friend the Member for Tiverton (Mr. Maxwell-Hyslop) made a formidable speech, but we are not talking about the doctrine of manana. My right hon. Friend has had the courage to come to the House and to ask for direct powers to take action. Manana has arrived. The situation will be changed by the Rates Bill. As my right hon. Friend made clear, once that Bill is enacted and begins to take effect, we should expect, from 1985–86 onwards, to be able to set targets which take greater account of GREs and thus recognise the efforts that low-spending authorities have made.
My right hon. Friend the Member for Cambridgeshire, South-East asked me to be more specific. With his long experience of such matters, my right hon. Friend knows that at this stage I cannot give figures for a year when the first PESC round has not yet even started. We had in mind that, subject to overall spending constraints, the rules for target and holdback in 1985–86 will pay greater regard to the present need and the low historic spending levels—some of which go back well beyond 1979 — of authorities which have budgeted prudently and responsibly over the years.
Mr. Pym: I am grateful to my hon. Friend for giving way. I think that he is trying to help the House in a difficult situation. My right hon. and hon. Friends have spoken throughout the debate about the unfairness to the low-spending authorities. Is my hon. Friend undertaking that in all circumstances he will stop penalising low-spending authorities, pay full regard to the historically low-spending experience of such authorities and treat them fairly? That is what we are asking.
Mr. Waldegrave: I understand what my right hon. Friend is asking, and we shall pay regard to it. He will understand that the extent to which we can ease the problems of low-spending authorities must inevitably depend on overall public expenditure.
Mr. Pym: Whatever constraints there may be from 1985–86 and thereafter, will the Minister be fairer to the low-spending authorities than his statement suggests?
Mr. Waldegrave: I can give a categorical answer to that question—yes.
The pressure on high-spending authorities to make cuts will be increased because we shall have the means to do this once Parliament has approved the Rates Bill.
I say to my hon. Friend the Member for Davyhulme (Mr. Churchill) that it is not a matter of the formula or the computer. The truth of the matter is that the House has not until now agreed the powers to enable my right hon. Friend the Secretary of State to take direct action against the high spenders. We do not have such powers this year, and we must ask for the patience of the genuine low spenders for a little longer.
We have been warned by my hon. Friend the Member for Great Yarmouth (Mr. Carttiss), who made a powerful and excellent maiden speech, and by my hon. Friend the Member for Gillingham (Mr. Couchman) that the patience is not unlimited. We all understand that. I hope that the assurances given by my right hon. Friend and repeated by

737
myself make it clear that we understand that. Of course, we will guarantee to examine specific elements. My hon. Friend the Member for Devizes wanted us to re-examine the relationship of the GREs to the expanding areas, and we shall. My right hon. Friend the Member for Taunton asked us to look again at different ways of measuring unit costs, and we shall.
I wish to refer to the speech of my right hon. Friend the Member for Surrey, South-West (Mr. Macmillan). I hope that I have already dealt with some of the essential parts of his argument. He also mentioned how the rate-capping Bill might work.
Dr. Cunningham: I am grateful to the Minister for giving way as he has just made a very important statement to the House in response to a question by his right hon. Friend the Member for Cambridgeshire, South-East (Mr. Pym). How will the Government in fiscal year 1985–86 deliver the wide-ranging commitment that the Minister has just made? Will they abandon penalties, increase public expenditure or change the grant structure?
Mr. Waldegrave: The hon. Member for Copeland knows that we will be in a position, with the support of the House, to cap the high spenders. The commitment that I gave to my right hon. Friend the Member for Cambridgeshire, South-East is that the low spenders—those with a record of low spending over the years—will benefit.
My right hon. Friend the Member for Surrey, South-West said, correctly, that if high spenders spend less they will get more grant, as they will be subject to less holdback of grant. The extent to which any authority is subject to holdback has no effect whatsoever on the grant entitlement of other authorities. If a high spender cuts its spending, it could get more block grant, but the effect on grant entitlements as between more than 400 authorities in 1985–86 will depend on a series of decisions yet to be taken, such as the threshold above GRE at which block grant begins to taper, the slope of the taper, the calculation of GREs and so on. We will, obviously, have to ensure that decisions on these matters do not negate the purpose of the Rates Bill.
My right hon. Friend the Member for Surrey, South-West questioned the room for manoeuvre left by the centrally negotiated pay settlements. Most of those are negotiated on behalf of local authorities at a time of year when they already know the provisional targets. Local authorities have not only the means but the incentive to achieve low pay settlements.
My right hon. Friend also asked what we would do for local authorities if the Rates Bill failed to deliver the savings we expect. I can only say that we are absolutely adamant in our intention that it will deliver those savings. No one should doubt that it can. Those who do should read—
Mr. Wareing: On a point of order, Mr. Speaker. Is it in order for the Minister to address himself only to those points raised by Conservative Members? I want to hear the answers to my questions on the Merseyside transport supplementary grant.
Mr. Speaker: Order. The Minister has dealt fairly with many points that have been raised on both sides of the House. He still has five minutes to go.
Mr. Waldegrave: It may be that when we look at the Official Report we will find that I have spent a quarter of an hour dealing with the rather frivolous points raised by Opposition Members.
Those who doubt that savings can be made should read the article by Peter Kellner in the New Statesman, who told Labour readers that the Rates Bill will work.
My hon. Friend the Member for Tiverton made the point once again that targets, as opposed to GREs, reflect to some extent past spending behaviour. The assurance that my right hon. Friend has been able to give is explicitly that once rate capping begins to bite he will ensure a fairer regime for the low spenders.
I wish to make two points about my hon. Friend's well-known and formidable campaign against the rating system. First, the purpose of the cuts in Government grant was not to transfer spending on to the rates but to signal that Government policy was that the 25 per cent, of public spending represented by local authority spending should be diminished. Secondly, I remind my hon. Friend that this report makes a far smaller cut in grant than any of its immediate predecessors.
Even among the low spenders, the remorseless pressure for economy must not be abandoned. My right hon. Friend the Member for Taunton made a powerful speech on that point. I hope that I can guarantee that my right hon. Friend's imperatives to go on searching for economies will be heeded by the Government.
I congratulate the East Sussex county council on being the only county to achieve the volume of savings planned by the Government in 1979–80. Let us remind others that could have done equally well that they must never give up the search for economies. Perhaps that is the answer to my hon. Friend the Member for Uxbridge (Mr. Shersby). The Audit Commission, the comparative figures and the achievements to date all show what can be done.
Let us consider the savings that businesses have had to make to survive in the recession. There is no question that many, even low-spending, authorities can find gains and efficiencies. There is a slightly ritual quality about the prophecies of doom from the Opposition that accompany this statement year in and year out—to be followed every year by further savings, efficiently made, by even some of those who denied that that was possible. To reverse and adapt a remark once made by an ancestor of mine, there has over the past few years been a great deal of wringing of hands and, perhaps, not a sufficiently continuous ringing of alarm bells about expenditure.
My hon. Friend the Member for Devizes told us that we were at the end of the road for finding savings. I know that Wiltshire is a responsible authority—a classic case of the sort of authority that my right hon. Friend will be endeavouring to help in future. My hon. Friend argued that Swindon should be classed as a new town. That has not been the policy of this Government or their predecessors, but the GREs try to take account of expanding areas. We shall look again at that point.
I hope that I have dealt with most of the substantial points raised in the debate. The report provides the necessary basis for local authorities to take final decisions on their budgets. If authorities across the country take responsible decisions and spend to target, that will benefit not only the national economy but the individual ratepayer.
In many instances we would see rate reductions and not merely low rates. I commend the report to the House.
Question put:—
The House divided: Ayes 332, Noes 203.

Division No. 132]

[11.30 pm

AYES

Adley, Robert

Fallon, Michael

Aitken, Jonathan

Farr, John

Alexander, Richard

Favell, Anthony

Alison, Rt Hon Michael

Fenner, Mrs Peggy

Amery, Rt Hon Julian

Finsberg, Sir Geoffrey

Amess, David

Fletcher, Alexander

Ancram, Michael

Fookes, Miss Janet

Arnold, Tom

Forman, Nigel

Ashby, David

Forsyth, Michael (Stirling)

Aspinwall, Jack

Forth, Eric

Atkins, Rt Hon Sir H.

Fowler, Rt Hon Norman

Atkins, Robert (South Ribble)

Fox, Marcus

Atkinson, David (B'm'th E)

Franks, Cecil

Baker, Kenneth (Mole Valley)

Fraser, Peter (Angus East)

Baker, Nicholas (N Dorset)

Freeman, Roger

Baldry, Anthony

Fry, Peter

Banks, Robert (Harrogate)

Gale, Roger

Batiste, Spencer

Galley, Roy

Bellingham, Henry

Gardiner, George (Reigate)

Bendall, Vivian

Gardner, Sir Edward (Fylde)

Berry, Sir Anthony

Garel-Jones, Tristan

Bevan, David Gilroy

Glyn, Dr Alan

Biffen, Rt Hon John

Goodhart, Sir Philip

Blaker, Rt Hon Sir Peter

Goodlad, Alastair

Body, Richard

Gow, Ian

Bonsor, Sir Nicholas

Gower, Sir Raymond

Bottomley, Peter

Greenway, Harry

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

Gregory, Conal

Bowden, Gerald (Dulwich)

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

Boyson, Dr Rhodes

Griffiths, Peter (Portsm'th N)

Brandon-Bravo, Martin

Grist, Ian

Bright, Graham

Ground, Patrick

Brinton, Tim

Grylls, Michael

Brittan, Rt Hon Leon

Gummer, John Selwyn

Brooke, Hon Peter

Hamilton, Hon A. (Epsom)

Bruinvels, Peter

Hamilton, Neil (Tatton)

Bryan, Sir Paul

Hampson, Dr Keith

Buchanan-Smith, Rt Hon A.

Hanley, Jeremy

Buck, Sir Antony

Hargreaves, Kenneth

Budgen, Nick

Harris, David

Bulmer, Esmond

Harvey, Robert

Burt, Alistair

Havers, Rt Hon Sir Michael

Butcher, John

Hawkins, C. (High Peak)

Butterfill, John

Hawksley, Warren

Carlisle, John (N Luton)

Hayhoe, Barney

Carlisle, Kenneth (Lincoln)

Hayward, Robert

Carttiss, Michael

Heath, Rt Hon Edward

Chalker, Mrs Lynda

Heathcoat-Amory, David

Channon. Rt Hon Paul

Henderson, Barry

Chapman, Sydney

Heseltine, Rt Hon Michael

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

Hickmet, Richard

Clark, Dr Michael (Rochford)

Hicks, Robert

Clark, Sir W. (Croydon S)

Higgins, Rt Hon Terence L.

Clarke, Kenneth (Rushcliffe)

Hill, James

Clegg, Sir Walter

Hind, Kenneth

Cockeram, Eric

Hirst, Michael

Colvin, Michael

Hogg, Hon Douglas (Gr'th'm)

Coombs, Simon

Holland, Sir Philip (Gedling)

Cope, John

Holt, Richard

Couchman, James

Hooson, Tom

Cranborne, Viscount

Hordern, Peter

Crouch, David

Howard, Michael

Currie, Mrs Edwina

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

Dickens, Geoffrey

Howarth, Gerald (Cannock)

Dorrell, Stephen

Howe, Rt Hon Sir Geoffrey

Douglas-Hamilton, Lord J.

Howell, Rt Hon D. (G'ldford)

Dover, Denshore

Howell, Ralph (N Norfolk)

du Cann, Rt Hon Edward

Hubbard-Miles, Peter

Dunn, Robert

Hunt, David (Wirral)

Edwards, Rt Hon N. (P'broke)

Hunt, John (Ravensbourne)

Eggar, Tim

Hunter, Andrew

Emery, Sir Peter

Hurd, Rt Hon Douglas

Evennett, David

Irving, Charles

Eyre, Sir Reginald

Jackson, Robert

740

Jenkin, Rt Hon Patrick

Patten, John (Oxford)

Jessel, Toby

Pattie, Geoffrey

Johnson-Smith, Sir Geoffrey

Pawsey, James

Jones, Gwilym (Cardiff N)

Peacock, Mrs Elizabeth

Jones, Robert (W Herts)

Percival, Rt Hon Sir Ian

Joseph, Rt Hon Sir Keith

Pink, R. Bonner

Kellett-Bowman, Mrs Elaine

Pollock, Alexander

Key, Robert

Porter, Barry

King, Roger (B'ham N'field)

Powell, William (Corby)

King, Rt Hon Tom

Powley, John

Knight, Gregory (Derby N)

aroctor, K. Harvey

Knight, Mrs Jill (Edgbaston)

Raffan, Keith

Knowles, Michael

Raison, Rt Hon Timothy

Knox, David

Rathbone, Tim

Lamont, Norman

Rees, Rt Hon Peter (Dover)

Lang, Ian

Renton, Tim

Latham, Michael

Ridley, Rt Hon Nicholas

Lawler, Geoffrey

Ridsdale, Sir Julian

Lawson, Rt Hon Nigel

Rifkind, Malcolm

Lee, John (Pendle)

Roberts, Wyn (Conwy)

Leigh, Edward (Gainsbor'gh)

Robinson, Mark (N'port W)

Lennox-Boyd, Hon Mark

Roe, Mrs Marion

Lester, Jim

Rossi, Sir Hugh

Lewis, Sir Kenneth (Stamf'd)

Rost, Peter

Lightbown, David

Rowe, Andrew

Lilley, Peter

Rumbold, Mrs Angela

Lloyd, Ian (Havant)

Ryder, Richard

Lloyd, Peter, (Fareham)

Sackville, Hon Thomas

Lord, Michael

Sainsbury, Hon Timothy

Lyell, Nicholas

Sayeed, Jonathan

McCurley, Mrs Anna

Shaw, Giles (Pudsey)

Macfarlane, Neil

Shaw, Sir Michael (Scarb')

MacGregor, John

Shelton, William (Streatham)

MacKay, Andrew (Berkshire)

Shepherd, Colin (Hereford)

Maclean, David John.

Shepherd, Richard (Aldridge)

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

Sims, Roger

McQuarrie, Albert

Skeet, T. H. H.

Madel, David

Smith, Sir Dudley (Warwick)

Major, John

Smith, Tim (Beaconsfield)

Malins, Humfrey

Soames, Hon Nicholas

Malone, Gerald

Speed, Keith

Maples, John

Speller, Tony

Marland, Paul

Spence, John

Marlow, Antony

Spencer, D.

Marshall, Michael (Arundel)

Spicer, Jim (W Dorset)

Mates, Michael

Squire, Robin

Maude, Francis

Stanbrook, Ivor

Mawhinney, Dr Brian

Stanley, John

Mayhew, Sir Patrick

Steen, Anthony

Mellor, David

Stern, Michael

Merchant, Piers

Stevens, Lewis (Nuneaton)

Meyer, Sir Anthony

Stevens, Martin (Fulham)

Miller, Hal (B'grove)

Stewart, Allan (Eastwood)

Mills, lain (Meriden)

Stewart, Andrew (Sherwood)

Mills, Sir Peter (West Devon)

Stewart, Ian (N Hertf'dshire)

Miscampbell, Norman

Stokes, John

Mitchell, David (NW Hants)

Stradling Thomas, J.

Moate, Roger

Sumberg, David

Monro, Sir Hector

Tapsell, Peter

Moore, John

Taylor, John (Solihull)

Morris, M. (N'hampton, S)

Taylor, Teddy (S'end E)

Morrison, Hon P. (Chester)

Tebbit, Rt Hon Norman

Moynihan, Hon C.

Temple-Morris, Peter

Mudd, David

Terlezki, Stefan

Murphy, Christopher

Thatcher, Rt Hon Mrs M

Neale, Gerrard

Thompson, Donald (Calder V)

Needham, Richard

Thompson, Patrick (N'ich N)

Nelson, Anthony

Thorne, Neil (Ilford S)

Neubert, Michael

Thornton, Malcolm

Newton, Tony

Thurnham, Peter

Norris, Steven

Townend, John (Bridlington)

Oppenheim, Philip

Townsend, Cyril D. (B'heath)

Oppenheim, Rt Hon Mrs S.

Tracey, Richard

Osborn, Sir John

Trippier, David

Ottaway, Richard

Trotter, Neville

Page, John (Harrow W)

Twinn, Dr Ian

Page, Richard (Herts SW)

van Straubenzee, Sir W.

Parkinson, Rt Hon Cecil

Vaughan, Sir Gerard

Parris, Matthew

Viggers, Peter

Patten, Christopher (Bath)

Waddington, David

741

Wakeham, Rt Hon John

Whitfield, John

Waldegrave, Hon William

Whitney, Raymond

Walden, George

Wiggin, Jerry

Walker, Bill (T'side N)

Winterton, Mrs Ann

Walker, Rt Hon P. (W'cester)

Wolfson, Mark

Waller, Gary

Wood, Timothy

Ward, John

Woodcock, Michael

Wardle, C. (Bexhill)

Yeo, Tim

Warren, Kenneth

Young, Sir George (Acton)

Watson, John

Younger, Rt Hon George

Watts, John

Wells, Bowen (Hertford)

Tellers for the Ayes:

Wells, John (Maidstone)

Mr. Carol Mather and

Wheeler, John

Mr. Robert Boscawen.

NOES

Alton, David

Davies, Rt Hon Denzil (L'lli)

Anderson, Donald

Davies, Ronald (Caerphilly)

Archer, Rt Hon Peter

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

Ashley, Rt Hon Jack

Deakins, Eric

Atkinson, N. (Tottenham)

Dewar, Donald

Bagier, Gordon A. T.

Dicks, T.

Banks, Tony (Newham NW)

Dixon, Donald

Barnett, Guy

Dobson, Frank

Barron, Kevin

Dormand, Jack

Beckett, Mrs Margaret

Douglas, Dick

Beith, A. J.

Dubs, Alfred

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

Dunwoody, Hon Mrs G.

Bermingham, Gerald

Eastham, Ken

Bidwell, Sydney

Evans, loan (Cynon Valley)

Blair, Anthony

Evans, John (St. Helens N)

Boothroyd, Miss Betty

Ewing, Harry

Boyes, Roland

Fatchett, Derek

Braine, Sir Bernard

Faulds, Andrew

Bray, Dr Jeremy

Field, Frank (Birkenhead)

Brown, Gordon (D'f'mline E)

Fields, T. (L'pool Broad Gn)

Brown, Hugh D. (Provan)

Fisher, Mark

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

Flannery, Martin

Brown, Ron (E'burgh, Leith)

Foot, Rt Hon Michael

Bruce, Malcolm

Forrester, John

Caborn, Richard

Foster, Derek

Callaghan, Jim (Heyw'd & M)

Fraser, J. (Norwood)

Campbell-Savours, Dale

Freeson, Rt Hon Reginald

Carter-Jones, Lewis

Freud, Clement

Cartwright, John

Garrett, W. E.

Clark, Dr David (S Shields)

George, Bruce

Clarke, Thomas

Gilbert, Rt Hon Dr John

Clay, Robert

Golding, John

Cocks, Rt Hon M. (Bristol S.)

Gould, Bryan

Cohen, Harry

Gourlay, Harry

Coleman, Donald

Hamilton, W. W. (Central Fife)

Concannon, Rt Hon J. D.

Hardy, Peter

Conlan, Bernard

Harman, Ms Harriet

Cook, Frank (Stockton North)

Harrison, Rt Hon Walter

Cook, Robin F. (Livingston)

Hart, Rt Hon Dame Judith

Corbett, Robin

Hattersley, Rt Hon Roy

Corbyn, Jeremy

Haynes, Frank

Cowans, Harry

Healey, Rt Hon Denis

Cox, Thomas (Tooting)

Heffer, Eric S.

Craigen, J. M.

Hogg, N. (C'nauld & Kilsyth)

Crowther, Stan

Holland, Stuart (Vauxhall)

Cunliffe, Lawrence

Home Robertson, John

Cunningham, Dr John

Howell, Rt Hon D. (S'heath)

Dalyell, Tarn

Howells, Geraint

742

Hoyle, Douglas

Penhaligon, David

Hughes, Mark (Durham)

Pike, Peter

Hughes, Robert (Aberdeen N)

Powell, Raymond (Ogmore)

Hughes, Roy (Newport East)

Prescott, John

Hughes, Sean (Knowsley S)

Radice, Giles

Hughes, Simon (Southwark)

Randall, Stuart

Janner, Hon Greville

Redmond, M.

John, Brynmor

Rees, Rt Hon M. (Leeds S)

Johnston, Russell

Richardson, Ms Jo

Jones, Barry (Alyn & Deeside)

Roberts, Allan (Bootle)

Kaufman, Rt Hon Gerald

Roberts, Ernest (Hackney N)

Kennedy, Charles

Robertson, George

Kilroy-Silk, Robert

Rogers, Allan

Kirkwood, Archibald

Ross, Ernest (Dundee W)

Leadbitter, Ted

Rowlands, Ted

Leighton, Ronald

Ryman, John

Lewis, Ron (Carlisle)

Sedgemore, Brian

Lewis, Terence (Worsley)

Sheerman, Barry

Litherland, Robert

Sheldon, Rt Hon R.

Lloyd, Tony (Stretford)

Shore, Rt Hon Peter

Lofthouse, Geoffrey

Short, Ms Clare (Ladywood)

Loyden, Edward

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

McCartney, Hugh

Silkin, Rt Hon J.

McDonald, Dr Oonagh

Skinner, Dennis

McGuire, Michael

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

McKelvey, William

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

Mackenzie, Rt Hon Gregor

Snape, Peter

Maclennan, Robert

Soley, Clive

McNamara, Kevin

Spearing, Nigel

McTaggart, Robert

Steel, Rt Hon David

McWilliam, John

Stott, Roger

Madden, Max

Strang, Gavin

Marek, Dr John

Straw, Jack

Marshall, David (Shettleston)

Thomas, Dafydd (Merioneth)

Mason, Rt Hon Roy

Thomas, Dr R. (Carmarthen)

Maxton, John

Thompson, J. (Wansbeck)

Maxwell-Hyslop, Robin

Thorne, Stan (Preston)

Maynard, Miss Joan

Tinn, James

Meacher, Michael

Torney, Tom

Meadowcroft, Michael

Wallace, James

Michie, William

Wardell, Gareth (Gower)

Mikardo, Ian

Wareing, Robert

Millan, Rt Hon Bruce

Weetch, Ken

Miller, Dr M. S. (E Kilbride)

Welsh, Michael

Mitchell, Austin (G't Grimsby)

Wigley, Dafydd

Morris, Rt Hon A. (W'shawe)

Williams, Rt Hon A.

Morris, Rt Hon J. (Aberavon)

Winnick, David

Nellist, David

Winterton, Nicholas

Oakes, Rt Hon Gordon

Woodall, Alec

O'Brien, William

Wrigglesworth, Ian

O'Neill, Martin

Young, David (Bolton SE)

Orme, Rt Hon Stanley

Park, George

Tellers for the Noes:

Parry, Robert

Mr. James Hamilton and

Patchett, Terry

Mr. Allen McKay.

Pendry, Tom

Question accordingly agreed to.
Resolved,
That the Rate Support Grant Report (England) 1984–85 (House of Commons Paper No. 151), which was laid before this House on 14th December, be approved.

Leyland Vehicles (Scotland)
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Neubert.]
11.43 pm
Mr. Tam Dalyell: Let it not be forgotten that Leyland's plant at Bathgate was brought to Bathgate by a decision of Government — a Conservative Government, albeit under Harold Macmillan, Rab Butler, Iain Macleod, Christopher Soames, Jack Maclay and the right hon. Member for Old Bexley and Sidcup (Mr. Heath), with different and wiser policies than those of the present Prime Minister and the group of Ministers around her who make economic decisions.
Twenty-one years ago, the crusty old boss of Austin, Sir George Harriman, told me in Birmingham, "I always want you to remember that we came to Bathgate by decision of the Cabinet". That is what Harriman said.
The Government, having begun Bathgate's vehicle industry, cannot pass by on the other side of the road, like the biblical Levi, and leave central Scotland to industrial dereliction. In particular, the Government are bound by a decision of Parliament to consider the "political and social implications" of any significant decision in the corporate plan that the Government have to approve.
Before putting a question, of which I have given notice to Minsters through the Secretary of State for Scotland and his office, I have two observations to make. There is no complaint about either the product or the work force at Bathgate. On the contrary, both are regarded as excellent. The difficulty lies in the market. The problem is not that African countries do not want Bathgate vehicles but that at the moment they do not have the cash to pay for them. However, if African countries have no transport, or only clapped-out transport, how will they escape from a deep recession? It is a case of the chicken and the egg.
During the coming weeks, the Government should re-examine the Export Credits Guarantee Department's terms and the reasons why many countries are struck off the ECGD list. They should not say that there is no cash to help the ECGD. Last weekend, in reply to my parliamentary questions, it emerged that 54 prefabs in the Falklands cost more than £7 million. That is more than £1 million more than the cash needed for the development of the family 1 engine to continue.
There are 1,800 Falklanders and there are 1,800 workers and members of their families at Bathgate. Only £6 million is needed for the family 1 engine, but £6,000 million has been spent on or committed to the south Atlantic before 1988. The engine will cost only one thousandth of what we have spent on or committed to the Falklands. Will the Government help by reviving and reviewing the ECGD guidelines?
I shall be followed in this debate by my hon. Friend the Member for Livingston (Mr. Cook), who represents many of those who work at Bathgate, and by my hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar), who is an Opposition Front Bench spokesman and also has a constituency interest. For us, the debate is about the erosion of the industrial base of our country.
11.47 pm
Mr. Robin Cook: I am grateful to my hon. Friend the Member for Linlithgow (Mr. Dalyell) for the opportunity to speak briefly in this debate about the
744
Bathgate plant, which is situated in his constituency but draws about a third of its work force from my constituency.
I welcome the fact that the House is debating the matter tonight. The timing could not be better. My hon. Friend and I were assured earlier today that no decision had yet been taken about the future of the plant. However, it is clear that a decision will be reached in the next two months. Therefore, it is vital that the views of all who wish the plant to have a secure future should be heard in the coming two months.
What do the Government propose to do in the next two months to make sure that the decision involves a secure future for the workers and the plant at Bathgate?
My hon. Friend referred to the importance of export credit to the future of the truck line at Bathgate. I should like to expand my hon. Friend's comments about exports to the Third world.
It has long been apparent to many of us in the Opposition, and also to some Conservative Members, that the financial crisis in the Third world poses a major threat to the industrial economy of the advanced nations that depend on those countries for their markets. Therefore;, it has disappointed us that the Government have often been the most negative and least imaginative in their response to the debt crisis in Third-world nations. It is only two months since the Prime Minister was at Delhi vetoing every positive, constructive suggestion for reforming the international monetary order. I hope that in the light of the latest crisis, and yet another plant suffering from declining orders from the Third world, the Under-Secretary of State for Trade and Industry will be emboldened to go back to his colleagues and to exert pressure for a more positive and urgent British approach to finding a solution, because the fact is that those countries' lost purchasing power is this country's lost export orders.
My other point concerns the second major product line at Bathgate—the engine line. The Bathgate plant was promised the development of the Cummins family 1 engine. It is clear that that engine is needed not simply at Bathgate but by the British Leyland truck division. If the truck division is to have a successful competitive product in the medium future, it requires a new engine with which to compete. I therefore ask the Minister to do all in his power to make sure that that product gets the go ahead at Bathgate in the interests of the truck division and of the Scottish industrial economy. As my hon. Friend said, the sums involved in that investment are comparatively small, but they could make a major contribution to securing the future of this major public company.
I ask the Minister to give the House an assurance that when he examines the corporate plan that is now with his Department he will do so with a view to ensuring that there is provision in it for investment in the family 1 engine line to be unfrozen and for it to go ahead as a matter of urgency.
There is a sombre background to this debate on the future of the Bathgate plant. In the catchment area from which the work force comes, unemployment exceeds 20 per cent. If there are any more major redundancies at the Bathgate plant, those leaving the gates will not find any work in the surrounding area. For many of them the truth is that they would find that they had no work until they dropped out of the labour force when they reached 65 years of age. That is a sombre background, and it must condition our approach. We ask for the additional investment not on

745
those grounds alone but because Bathgate has a successful and dedicated work force. The workers are disciplined and have shown in the past their willingness to accept productivity changes and changes in work practices. They can make a success of the investment if they get it. They deserve to be given the chance.
11.53 pm
Mr. Donald Dewar: I congratulate my hon. Friend the Member for Linlithgow (Mr. Dalyell) on his timing and ingenuity in getting this Adjournment debate and on the fact that he widened it to include all the Scottish operations of Leyland Vehicles, which allows me to say a brief word about the Albion plant, which is a constituency interest of mine.
As the Minister and many Scottish Members will know, 387 redundancies at the Albion plant were announced the other day. That is a bitter pill to swallow. When I became a Member of Parliament about five years ago, the work force was well over 2,000. It is now scheduled to fall to just over 1,000. We have seen cut after cut in an area of Glasgow where unemployment is becoming more of a plague and where the fears of redundancy are all too real. The work force has fought hard over the years to try to secure the future of the plant. It deserves a period of stability and the support of Leyland Vehicles.
Reference was made earlier to the meeting with the management which I attended with my hon. Friends the Members for Linlithgow and for Livingston (Mr. Cook). We sought some assurances about the future of the Albion plant. I believe it needs a good deal of investment, perhaps not massive sums of money but specific and significant investment, if it is to achieve the levels of activity that will give it the secure future to which I referred. It is also very important that Albion continues to be the supplier of axles to Leyland Vehicles as a whole. After all, over the years it has been encouraged to concentrate on axle production only, losing its assembly site, and it is only fair that in return it should get the support that will allow it to capitalise upon the undoubted skill of the work force and the energy it has shown in very difficult conditions over the years.
This matter is relevant to the Government, and it is important that these points are made to Ministers, because the corporate plan of Leyland Vehicles is now before the Government, and a number of factors included in the undertaking refer to social and political implications of change that are the business of Ministers.
I have already referred to the impact of unemployment in the west of Glasgow on the area I represent. I hope that all these factors will be borne in mind when Ministers take decisions about the corporate plan and have discussions with management, taking into consideration not just commercial criteria but the wider implications of what is being decided for the many hundreds of people who depend upon the Albion and Bathgate plants.
On a wider note, may I reinforce the points that have been made by my hon. Friends about the Bathgate plant? It is a facility of central importance not just to Bathgate, Blackburn, Whitburn, Armadale and the towns around it but to the Scottish economy. I hope that Ministers will recognise that they have a part to play—perhaps a small and limited part, but a significant part—in fighting to make sure that this plant retains its place in Scottish
746
economic life. My hon. Friends have referred to the importance of the African orders and to the importance of ECGD cover. I hope that that point has been well noted. There is also the possible influence on investment. It is clear, as my hon. Friend the Member for Livingston said, that, if Bathgate is to have a future in the engine line or, indeed, if Leyland Vehicles is to have a future, it is necessary to have a new generation of engine, whether the family one or some equivalent, not too many years hence.
The special relationship that the submission of the corporate plan represents and the social and economic implications of which Ministers are the guardians underline the importance of the venture. I hope—I am sure I speak for my hon. Friends and, indeed, for many people in Scotland—that at least the Government will remember that they have to defend these wider interests and bear them constantly in mind.
It is not just a question of a narrow, commerical criterion, although that must weigh heavily with management in particular; there are these wider horizons. It is essential that the Scottish economy is not asked to take another hammer blow of the kind that has become all to familiar in the last two or three years when—I accept that no decisions have been taken yet—the decisions are taken on Bathgate. I hope that we never come to the bitter point where a closure or massive redundancies are threatened. If that were to happen, it would be a serious decision for Ministers. I hope they will accept their responsibilities to the wider community of Scotland, as well as to Bathgate in particular and to the other communities that are so dependent upon this plant.
11.57 pm
The Under-Secretary of State for Trade and Industry (Mr. John Butcher): Hon. Gentlemen opposite have done their constituents a great service in raising a matter of some considerable concern and, of course, of some urgent topicality. The numbers present here tonight are adequate testimony to the seriousness with which hon. Members on both sides of the House view the question.
To the hon. Member for Livingston (Mr. Cook) I say, through you, Mr. Deputy Speaker, that I do not agree with the commentator he quoted, albeit it is in a historical context, who spoke of leaving Scotland to industrial dereliction. Nor do the Government believe that there is a faint possibility of that happening. As testimony to that, I cite the presence of some of my hon. Friends who represent Scottish constituencies, including my hon. Friend the Under-Secretary of State for Scotland.
The hon. Member for Linlithgow (Mr. Dalyell) said that many commentators who are familiar with the Bathgate plant and its products have no complaint about the product and the work force. He said that the difficulty lies in the market. This is not the occasion on which to indulge in nit-picking or to bandy details; there may be a difference in how we would record the facts of the past few years, but generally we agree with the hon. Gentleman's major assertion that the prime difficulty is in the market place. We will not indulge in union-bashing or in criticising the work force of the Bathgate plant.
The hon. Member for Linlithgow rightly drew attention to the various forms of aid that have been given to BL and to the role that the ECGD has played in invigorating and encouraging growth in markets. I shall deal with that in detail, because the hon. Gentleman was good enough to advise us of his preoccupation with that issue.

747
The hon. Gentleman said, Mr. Deputy Speaker, that we are talking about a sum equivalent to one-thousandth of the expenditure in the Falklands. That is his target. We have been debating today other targets and we have found extreme difficulty in persuading hon. Members on both sides of the House that there are legitimate ways of finding savings. We can all find worthy recipients of a subsequent redeployment of resources. That is always a matter of controversy. It involves value judgments and is all about the priorities that we set, as parties and as individuals, in spending programmes.
The hon. Gentleman was right to relate his remarks to the foreign aid programme. A huge amount of the output of Bathgate, and of Leyland Vehicles in general, has gone to the Third world, particularly to Africa. The Government also believe in the industrial regeneration of this country, which, of course, includes Scotland.
The hon. Member for Livingston also spoke of the financial crisis in the Third world. I am pleased to assure him that the comments made in the debate will be referred to my right hon. Friend the Minister for Trade. However, leaving aside the ECGD, which is concerned more with trade than with aid, and looking solely at the overseas aid programme, the figures show that, to sustain the volume of orders going to Bathgate only three years ago, we should have to pre-empt about 8 per cent, of the foreign aid programme and gear it entirely to the output from that one plant in order to secure, say, £100 million of orders. That would be a very difficult and controversial decision to make.
We do not look with enthusiasm or indifference at any trend that could bring 20 per cent, unemployment to this part of Scotland or any other. [HON. MEMBERS: "We have that already."] Yes, we have over 20 per cent, unemployment in parts of Scotland and England, but our target is to reduce that and not to endure it.
We shall look at the comments of the hon. Member for Glasgow, Garscadden (Mr. Dewar) in the context of the corporate plan. He spoke eloquently in defence of his constituents.
I ought to make it clear, Mr. Deputy Speaker, that the Government fully recognise the concern that has been expressed. We shall have it prominently in our minds as we consider the BL board's corporate plan, which we have recently received. The House will understand that I cannot at this stage discuss the contents of the plan, which includes the board's plans for Leyland Vehicles. However, it may be helpful if I outline some of the background to the problems that are the subject of the debate.
For many years, Leyland Vehicles was a very profitable business. Until 1974 it was the market leader in trucks in the United Kingdom, and it was a very successful exporter to a large number of developing countries, many of them former British colonies in Africa. In several of these countries Leyland established assembly plants and built up something approaching a monopoly of the truck and bus markets.
I visited Sudan about two years ago, Mr. Deputy Speaker, and it was with pleasure and delight that I saw so many British, and in this case Leyland, trucks on the roads of that severely underdeveloped country. This export business was so valuable to Leyland that it was even worth while to manufacture a range of trucks specifically designed for the requirements of African purchasers.
However, even back in the mid-1970s, when BL's commercial vehicle business was profitable, there were
748
worrying signs. The company's share of the domestic truck market was 26·3 per cent, in 1975. By 1978 it had plummeted to below 20 per cent.—and this was at a time when the United Kingdom truck market was growing rapidly. In 1978 the commercial vehicle operation recorded a loss for the first time. With hindsight, it is not difficult to see that if the market turned down the business could be in very severe difficulty indeed. And turn down it did. Although a record number of trucks—nearly 80,000 —were sold in 1979, the market fell to about 60,000 in 1980 and 45,000 in 1981. Meanwhile Leyland's market share continued to fall, down to 17·3 per cent, in 1979 and 16 per cent, in 1981.
This fall in demand did not only affect Leyland. All European truck makers have been, and still are, going through a very difficult time. European truck sales fell by some 30 per cent, between 1979 and 1982, and virtually all the major European companies are running well under capacity. Figures are understandably hard to come by, but it is doubtful whether more than a very few are currently making profits. Traditionally, Leyland Trucks and its continental competitors have been able to look to their markets outside Europe to sustain them through the leaner years of the European investment cycle. However, as I shall explain in a minute, this has not been the case this time round, at least for the middle eastern and African markets, where Leyland Trucks is strong. The result has been too much capacity chasing too little business within Europe, which has reduced volumes and drastically squeezed margins throughout the industry.
I mentioned a moment ago that, at the same time as it attempted to weather these storms in Europe, Leyland also faced considerable difficulties in its export markets. These were caused largely by the severe economic difficulties of many important Third-world countries, which led to very sharp falls in the demand for Leyland trucks in these countries. The world recession has exposed the fragility of the external financial position of a number of important countries. Big elements of this crisis have beer large current account deficits due to factors such as unexpectedly slow growth in export volumes due to recession in industrial countries, reduced export earnings due to falls in commodity prices and the 1979 oil price rise — a series of issues that the hon. Member for Linlithgow has raised on a number of occasions in the House. He will know that high world interest rates have been another adverse factor.
We all know now the litany of events and problems that arose from the oil price changes, but they had a particularly dramatic effect in central and east Africa. It is one of the sad ironies of this crisis that it has affected most of all, and most dramatically of all, those countries that were least able to afford the high prices and the international crisis that followed and that had difficulties in servicing their debts. That brings us back to the parochial, in terms of the world, but nevertheless important issue, for the people of Scotland, of Leyland Trucks.
One of the major impacts of the debt problem has naturally been on trade. Developing countries were forced to react to the drying-up of new loans by cutting back sharply on imports in the last couple of years. An important contribution to reversing this situation would be a revival in developed economies, which would make it easier for developing countries to earn sufficient through exporting to service their debts. For that reason, it is in the

749
interests of developing countries as well as ourselves to stick to the Government's policies for the domestic market, which are designed to ensure and promote sound, sustainable growth.
The ECGD is a commercially based operation working to commercially justifiable criteria. It is not Government policy to support credit in those markets where there is no reasonable prospect of repayment. It would not make economic sense to extend cover to uneconomic markets to bolster United Kingdom exports in the short term.
Mr. Dalyell: That may be true in Nigeria in the short term, but not in the medium or long term. This is an oil-based economy and potentially a rich country. Do not advanced countries have some obligation at least to tide over major sectors of manufacturing industry at such a time?
Mr. Butcher: Had the hon. Gentleman allowed me to continue a little further, I would have qualified my opening statement on ECGD. The Department of Trade and Industry is anxious to underpin those pressures which give continuity to our domestic manufacturing and service selling base. However, I must report to the House that the scope of ECGD cover for exports to Nigeria is currently under review in the light of the arrears payments due to exporters, on which the Nigerians have requested relief. The Government are aware of the importance of Nigeria to Leyland Vehicles' operations, and this will be borne in mind in assessing any additional cover which may be made available to the company. The hon. Gentleman will know that ECGD has a general and statutory obligation to act commercially and is, therefore, precluded from offering credit cover where, in its judgment, the chances of repayment are too remote to justify it.
This is a complex matter, Mr. Deputy Speaker, and I give an undertaking to the hon. Gentleman, as there will
750
not be time to record the details in the House tonight, to provide him with a circular that has been sent to ECGD policy holders in respect of Nigeria, advising them on how to take their businesses forward with their current policies and how to renegotiate some of those policies. It may be helpful if the hon. Gentleman takes the copy that I have here tonight, which is in the public domain, with which he may be able to advise those who are pressing him for advice.
The Government would have difficulty in re-routeing a massive chunk of the foreign aid programme. ECGD is more a trade than an aid-based measure, and we are circulating those trading with Nigeria to advise them of the best way to proceed.
Mr. Speaker, for the past 14 minutes I have been referring to you as Mr. Deputy Speaker. However, while indulging in an Adjournment debate with the hon. Member for Linlithgow, you will forgive me for occasionally thinking that I am in a time warp. I am aware of your promotion since the previous Parliament.
Mr. Dalyell: Is the Minister aware that this company is the only indigenous British truck manufacturer? Could the Government reflect on whether France, Germany, Japan, or any other advanced country, would allow this to happen — although we do not accept the closure of Bathgate? Would not another advanced country step in to protect its indigenous truck manufacturer?
Mr. Butcher: It is a preoccupation of the Department of Trade and Industry to see many issues from a limited, United Kingdom point of view, which is another way of putting what the hon. Gentleman has just said—
The Question having been proposed after Ten o'clock, and the debate having continued for half an hour, MR. SPEAKER adjourned the House without Question put, pursuant to the Standing Order.
Adjourned at thirteen minutes past Twelve o'clock.

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  Local Government Act 1972
  Local Government Act 1972
  Rates (Solar Heating)
  Rates (Solar Heating)
  Rates (Wind Turbines)
  Rates (Wind Turbines)
  Multiple Occupation Houses (Fire Escape)
  Multiple Occupation Houses (Fire Escape)
  Local Government Reform
  Local Government Reform
  Rate Capping
  Rate Capping
  M25 (Industrial and Commercial Development)
  M25 (Industrial and Commercial Development)
  Public Authorities (Unused Housing)
  Public Authorities (Unused Housing)
  Departmental Administration Costs
  Departmental Administration Costs
  General Rate Act 1967
  General Rate Act 1967
  General Development Order
  General Development Order
  Falkland Islands
  Falkland Islands
  Wildlife and Countryside Act
  Wildlife and Countryside Act
  Sewers
  Sewers
  Radioactivity (Cumbria)
  Radioactivity (Cumbria)
  Calke Abbey
  Calke Abbey
  Repair Grants
  Repair Grants
  Local Authority Housing
  Local Authority Housing
  Private Unoccupied Property (Rates)
  Private Unoccupied Property (Rates)
EDUCATION AND SCIENCE
  Pregnant Women (Multivitamin Pills)
  Pregnant Women (Multivitamin Pills)
  Expenditure Statistics
  Expenditure Statistics
  Esperanto
  Esperanto
  Cardiovascular Disease
  Cardiovascular Disease
  Peace Studies
  Peace Studies
  University Graduates (Careers)
  University Graduates (Careers)
  Nursery Schools
  Nursery Schools
  Weed Research Organisation, Oxford
  Weed Research Organisation, Oxford
  Agricultural and Food Research Council Laboratory, Letcombe
  Agricultural and Food Research Council Laboratory, Letcombe
  Agricultural and Food Research Council
  Agricultural and Food Research Council
  Universities (Redevelopment)
  Universities (Redevelopment)
  Assisted Places Scheme
  Assisted Places Scheme
  Voluntary Aided Schools
  Voluntary Aided Schools
  Maintained Schools
  Maintained Schools
CIVIL SERVICE
  Public Servants (Re-employment)
  Public Servants (Re-employment)
OVERSEAS DEVELOPMENT
  Project Appraisal
  Project Appraisal
  UNESCO
  UNESCO
  Falkland Islands
  Falkland Islands
  Mr. John Fowler
  Mr. John Fowler
  Falkland Islands Development Corporation
  Falkland Islands Development Corporation
  Mr. and Mrs. Richard Cockwell
  Mr. and Mrs. Richard Cockwell
  Bangladesh
  Bangladesh
ARTS
  Arts Council (Membership)
  Arts Council (Membership)
  National Museum for Wales
  National Museum for Wales
  Riverside Studios
  Riverside Studios
  Arts Council Grant
  Arts Council Grant
  Office of Arts and Libraries
  Office of Arts and Libraries
  Museums and Galleries (Grants)
  Museums and Galleries (Grants)
  European Music Year
  European Music Year
  Business Sponsorship
  Business Sponsorship
  Liverpool (Ministerial Visit)
  Liverpool (Ministerial Visit)
  Barbican Centre
  Barbican Centre
  Museums (Collections Purchases)
  Museums (Collections Purchases)
SCOTLAND
  Schools
  Schools
  Cot Deaths
  Cot Deaths
  Benbecula
  Benbecula
  Stoneyburn, West Lothian
  Stoneyburn, West Lothian
  Tobermory
  Tobermory
  Woodland Planting
  Woodland Planting
  Home Knitters
  Home Knitters
  Composite Classes
  Composite Classes
  Teachers
  Teachers
  Hill Livestock Compensatory Allowances
  Hill Livestock Compensatory Allowances
  Sentencing Policy
  Sentencing Policy
  Police Files (Security)
  Police Files (Security)
  Labour Statistics
  Labour Statistics
  Closures and Redundancies
  Closures and Redundancies
  Napier, Glasgow and Bell Colleges
  Napier, Glasgow and Bell Colleges
  Prison Officers (Assaults)
  Prison Officers (Assaults)
EMPLOYMENT
  St. David's Day
  St. David's Day
  Labour Statistics
  Labour Statistics
  Departmental Administration Costs
  Departmental Administration Costs
  Young Workers' Scheme
  Young Workers' Scheme
  Retail Price Index
  Retail Price Index
  Rotherham (Youth Unemployment)
  Rotherham (Youth Unemployment)
  Correspondence
  Correspondence
  Youth Training Scheme
  Youth Training Scheme
  Community Programme
  Community Programme
  Earnings
  Earnings
  Workington (Short-time Working)
  Workington (Short-time Working)
WALES
  Council House Sales
  Council House Sales
  Development Board for Rural Wales
  Development Board for Rural Wales
  Labour Statistics
  Labour Statistics
  Land Slippage, Dingle
  Land Slippage, Dingle
  Foreign Languages (Examination Results)
  Foreign Languages (Examination Results)
  Cardiff Docks Development Scheme
  Cardiff Docks Development Scheme
  Departmental Administration Costs
  Departmental Administration Costs
  Owner-occupiers
  Owner-occupiers
  Farms
  Farms
  Hill Compensatory Allowances
  Hill Compensatory Allowances
  Local Authority Expenditure
  Local Authority Expenditure
  Local Government Employees
  Local Government Employees
  Housing Renovation Grants
  Housing Renovation Grants
  Rate Support Grant
  Rate Support Grant
  Rate Income
  Rate Income
  Government Spending
  Government Spending
  Rate Capping
  Rate Capping
  Cardiac Surgery and Bone Marrow Transplants
  Cardiac Surgery and Bone Marrow Transplants
SOCIAL SERVICES
  Housing Benefit (Wales)
  Housing Benefit (Wales)
  Single Payment Awards
  Single Payment Awards
  Drugs (Third World)
  Drugs (Third World)
  Leaflets (Dundee Resources Centre)
  Leaflets (Dundee Resources Centre)
  Supplementary Benefit
  Supplementary Benefit
  Pharmaceutical Imports (Quality and Consistency)
  Pharmaceutical Imports (Quality and Consistency)
  Expenditure Statistics
  Expenditure Statistics
  South London Hospital for Women
  South London Hospital for Women
  Benefits
  Benefits
  Convector Heaters
  Convector Heaters
  Mentally-ill Persons
  Mentally-ill Persons
  Social Security Benefit
  Social Security Benefit
  Drugs
  Drugs
  Blood Glucose-Monitoring Equipment
  Blood Glucose-Monitoring Equipment
  Public Health Laboratory Service
  Public Health Laboratory Service
  Griffiths Report
  Griffiths Report
  NHS (Efficiency)
  NHS (Efficiency)
  Social Workers
  Social Workers
  Young Persons
  Young Persons
  Unemployment Review Officers
  Unemployment Review Officers
  Re-establishment Centres
  Re-establishment Centres
  Agency Agreement
  Agency Agreement
  National Playbus Association (Exhibition)
  National Playbus Association (Exhibition)
  Civil Servants
  Civil Servants
  National Insurance Numbers
  National Insurance Numbers

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

Death Grant
Baroness Ewart-Biggs: 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 how much the value of death grant has declined in purchasing power since the present monetary level was fixed.
The Parliamentary Under-Secretary of State, Department of Health and Social Security (Lord Glenarthur): My Lords, the value of the grant has declined by about 82 per cent. since 1967.
Baroness Ewart-Biggs: My Lords, I should like to thank the noble Minister for his answer. Would he not agree that the figure he has just given explains why so many old people have a justifiable fear of what they term a pauper's funeral? Would he say, first, what means of assistance there are to relatives, other than widows and widowers on supplementary benefit, to help them meet these rising costs? Secondly, would he say when the Government will be ready to report on what many people would think was long overdue: that is, the future of the death grant?
Lord Glenarthur: My Lords, as the noble Baroness will be aware, a consultative document went out for consultation in March 1982 and replies were received by July 1982. The public response to that document gave no clear support for any of the proposals put forward. As a result, it has been necessary to re-examine the whole situation. The noble Baroness asked when an announcement could be made about the future of the grant. All I can say is that an announcement will be made in due course.
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As regards help from supplementary benefit for poor families facing funeral bills, the increase in the supplementary benefit single payments limit from £300 to £500 and the other changes in the supplementary benefit capital limits announced in the last Budget will help to ensure that people receiving supplementary benefit are not required to draw on personal savings or other forms of provision towards personal funeral costs. Those on supplementary benefit who are left with responsibility for arranging a funeral but have few savings or resources can already be given special help, and in 1982 some 13,000 families were given single payments toward funeral expenses, at an average level of about £200.
Baroness Ewart-Biggs: My Lords, I asked the Minister what means of assistance in meeting these costs are available to a son or daughter who is not on supplementary benefit.
Lord Glenarthur: My Lords, that is a question for the consultations which the Government are having at the moment and on which I cannot give a pronouncement.
Lord Airedale: My Lords, can the noble Lord answer the noble Baroness's question the other way round, so to speak, and tell the House what the level of the death grant would now be had it been increased in the same proportion as the increase in national insurance contributions since the present grant was fixed?
Lord Glenarthur: My Lords, in 1967 when the present rate of grant was fixed the national insurance contributions were flat-rated, and since 1975 they have been related to earnings. There have also been changes to and increases in other benefits, so it is not really possible to make a direct comparison in the way that the noble Lord asks. I could perhaps turn his question round, if I may. One could ask how far would national insurance contributions have to increase to restore the value of the death grant, and the answer to that is about 3p a week for the average earner.
Lord Airedale: My Lords, may I ask: to restore the death grant to what?
Lord Glenarthur: My Lords, to restore it to what it was.
Lord Stallard: My Lords, will the noble Lord accept that the consultative process he mentioned failed miserably, and for four reasons? First, the low cost basis of the proposals pre-empted any real consultation process; secondly, the proposals would have disqualified national insurance contributors from an entitlement; thirdly, the benefit would have been insufficient to help those who would have qualified; and fourthly——
Noble Lords: Question!
Lord Stallard: My Lords, is the noble Lord aware that, Fourthly, it would not have been readily available to those who needed it most? Would he not now accept that the Government and his right honourable friend the Secretary of State ought to be discussing with the Dignity in Death Alliance their very simple alternative proposal that the death grant should be up-rated in line with inflation and should be index-linked, non-means tested and available to everyone, including children and elderly people?
Lord Glenarthur: My Lords, I would not agree with all that the noble Lord says. There are many reasons which have to be taken into consideration by the Government in their consultations on the matter. I am sure the noble Lord and many others of your Lordships also would agree that the most important thing is that those who really need a grant get it. That is something that is also being considered by the Government at the moment.
Baroness Jeger: My Lords, does the noble Minister recall that in the consultative document which was put out it was stated that the equivalent value of the 1949 death grant would in 1982 have been £195? Can he tell us what it is now in January 1984? Can he say what practical steps the Government are taking to reopen the consultations which failed so disastrously in 1982?
Lord Glenarthur: My Lords, on the second part of the noble Baroness's supplementary, consultations are going on between Ministers at the moment, as I hoped I had made clear earlier. As to the cost of restoring the 1949 value of the grant to today's prices, based on the latest figures available the grant would need to be increased to about £210. That would cost about £105 million extra for the year 1983–4.
Lord Gridley: My Lords, may I ask my noble friend the Minister whether he is aware that I, as a Government appointed trustee of the Far East Prisoners of War and Internee Fund, and other trustees are concerned at the level of grants now being made to the widows of former prisoners of war who were forced to work on the Burma-Siam railway? Will the widows be borne in mind along with other considerations which the Government may be thinking about?
Lord Glenarthur: Yes, my Lords. I am well aware of the active part that my noble friend plays so far as Far East prisoners of war are concerned. I can assure him that all he says will be taken into account.
Lord Diamond: My Lords, will the Minister be a little more forthcoming as to what he means by "in due course"? Is not the essence of this matter that everybody has some concern? Indeed, many people believe that they have an indirect interest in the benefit in question. Is it not right that the Government should hurry up with these consultations which are going on between Ministers and offer us their conclusions, and not merely say "in due course"? As has been said with some considerable authority, in due course we shall all be dead.
Lord Glenarthur: My Lords, I seem to remember hearing various attempts to explain whether "in due course" was the same as "soon", or whether "soon" was the same as "in due course", and I am afraid that I cannot go further than I have said.

UK Shipping: Crosstrade Figures
2.44 p.m.
Lord Gridley: 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 percentage of Britain's gross shipping income was derived from "crosstrading" in 1982.
Lord Lucas of Chilworth: My Lords, crosstrade freight revenue is provisionally estimated to have accounted for 46 per cent. of total revenue from international activities of the United Kingdom shipping industry in 1982 or 67 per cent. of international freight revenues. Charter receipts and passenger revenues make up the remainder of the total.
Lord Gridley: My Lords, I thank my noble friend the Minister for that Answer. Will he confirm that over two-thirds of international trading arises from crosstrading and that in the circumstances this position is reasonably satisfactory?
Lord Lucas of Chilworth: My Lords, the figure of£1,541 million of United Kingdom shipping earnings on crosstrades compares with the total of £3,335 million of total revenue from international activities. I confirm that the proportions are satisfactory: but it is not without a considerable amount of endeavour by the shippers, the shipping lines and, indeed, the Government that this figure is being maintained.
Lord Underhill: My Lords, does the Minister recall that in our excellent debate on shipping competition it was made clear—and the Government department concerned agreed—that the beneficial owners of about 50 per cent. of United Kingdom registered shipping are foreign companies? Are the figures that he has given net figures, or do they allow for any of those receipts which are transferred out of this country? Also, does he not agree that crosstrading is imperilled by flags of convenience and discriminatory action by other countries? May I ask what the Government propose to do to avoid that?
Lord Lucas of Chilworth: My Lords, the Government are doing a great deal in a number of international fora to fight for the rights of British lines to continue their traditional crosstrading activities. It is the Government's policy, in the interests of the British shipping industry itself, British exporters and consumers alike, that an open competitive régime in world shipping should be maintained. It is for this reason that we are party to the current discussions of the United Nations Conference on Trade and Development and, in particular, to the EC agreement to work through the Consultative Shipping Group to ensure that there is freedom of competition for our ships and those of our Community partners.
Lord Greenway: My Lords, can the noble Lord give the House any comparable figures concerning Soviet crosstrading activities?
Lord Lucas of Chilworth: My Lords, so far as Russian crosstrading is concerned, I can tell the noble Lord, Lord Greenway, that about 15 per cent. of the trade of Soviet vessels is derived from trade between non-Soviet ports. In recent years, Russian vessels have carried between 1 and 2 per cent. of the value of all British seaborne trade.
Lord Underhill: My Lords, I am sorry to press the Minister further. He answered the second part of my question on the Government's action on crosstrading and discrimination, but not the first part which was that it is generally agreed that the beneficial owners of 50 per cent. of the United Kingdom registered shipping fleet are foreign companies. Therefore, are the figures that he has given to the noble Lord, Lord Gridley, net, after allowing for money transferred out of this country from those receipts, or are they gross figures?
Lord Lucas of Chilworth: My Lords, I very much regret that I cannot tell the noble Lord whether the figures are gross or net; but I will make inquiries and ensure that he is informed. It is not true that 50 per cent. of United Kingdom shipping is foreign owned. It is a smaller amount than that.

Further Education: Local Authority Provision
2.49 p.m.
Baroness David: 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 local authorities are obliged to pay for the education or training of 16 to 19 year-olds in further education establishments.
The Earl of Swinton: My Lords, Section 41 of the 1944 Education Act requires local education authorities to secure the provision for their area of adequate facilities for further education in accordance with a scheme of further education. Section 8 requires that they secure provision in schools for full-time education suitable to the requirements of pupils up to the age of 19, other than such full-time education as
6
may be made under the provisions of the Act relating to further education. It is for individual authorities to decide how to give effect to these requirements.
Baroness David: My Lords, I thank the Minister for that reply, and I understand from it that local authorities are not obliged to pay fees in a further education establishment. Would he not agree that it is an anomaly that a local authority should be obliged to provide education in a school for 16 to 19 year-olds but should not be obliged to provide for what may be an absolutely identical course in a further education establishment? Would he not agree that there should be no statutory bias towards one form of provision or another, and that they should be on all fours? Does he not think that young people should be able to choose freely which sort of education they are taking between 16 to 19, whether in a school or at a FE or tertiary college?
The Earl of Swinton: My Lords, I agree at least partly with what the noble Baroness has said. I accept that the position of the 16 to 19 year-old further education student is anomalous in that the home authority is obliged to pay the cost of provision at a college maintained by another authority only if they have given prior approval for that provision. The Government are committed to increasing freedom of choice wherever possible. This is one of the matters which are being considered by my right honourable friend the Secretary of State in response to the review of further education law.
Baroness David: My Lords, is the Minister aware that the drill of my questions is towards asking for some sort of legislation about further education, for which I have asked many times before? There are so many anomalies. Sections 6 and 7 of the 1980 Act mean that parents have a choice about where their children, whether post-16 or under the age of 16, go to school. They can also appeal. This is not so if they wish their children to go to a further education college. The same applies to recoupment. It is essential if it is a school but it is not essential for another authority to pay if it is for further education. Could the Minister please press for early legislation to put these anomalies right?
The Earl of Swinton: My Lords, I could press for all I am worth, but whether or not anyone would take any notice is another matter. There are other priorities for legislation, as I indicated in response to a Question from the noble Baroness on 27th October. However, my right honourable friend is addressing the underlying issues of the efficiency and effectiveness of the further education system by other means.
Lord Kilmarnock: My Lords, I think I detected a gleam of light in the noble Earl's reply. Would he not agree that in the present unfavourable employment climate for young people very many more of them are likely to wish to continue in non-advanced further education rather than in sixth-form education? If the Secretary of State is seriously studying the matter, will the noble Earl come to the House and make a Statement on the result of the Secretary of State's deliberations?
The Earl of Swinton: My Lords, I cannot tell the House how and in what form my right honourable friend will make his statement. However, if it is in the form of a Statement in another place it is customary that I should repeat it in this House. I can give no undertaking, however, on that point.
Lord Graham of Edmonton: My Lords, from what the Minister has said I gather that there is the possibility that the present practice may be changed. Will the Minister accept that the general public, in particular the young people involved, cannot grasp the subtleties of the demarcation between courses of education in schools and those in further education colleges for those aged between 16 and 19? Surely we ought to be maximising the number of young people who are prepared to take advantage of the benefits of education. If there is a preference for attending further education colleges because it appears to young people to be more grown up to attend further education colleges than school, ought we not to encourage this by every means possible?
The Earl of Swinton: My Lords, if I suggested that the position was going to be changed, I gave the wrong impression. I did not say that. I said that my right honourable friend was looking at the possibility of change, which is a different matter. Yes, I agree that the position is anomalous and that it is difficult. At the same time, the system is working. I do not believe that there are any very great difficulties. That is the only undertaking I can give to the noble Lord and to the House.
Baroness Masham of Ilton: My Lords, if local authorities do not have adequate or suitable educational or training facilities in their own area for disabled students, may I ask the noble Earl my kinsman whether they are obliged to send them elsewhere?
The Earl of Swinton: My Lords, local authorities are expected to assess the individual needs of each handicapped young person and to take into account special factors that refer to that individual young person. They have the power to provide for young people beyond the age of 19 as well as for those up to that age, and they have discretionary powers to provide financial support for any student in further education. Whether authorities send them in fact elsewhere I should not like to say. There are local authorities and local authorities.

Nuclear Weapons: Policy
2.55 p.m.
Lord Jenkins of Putney: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether, in view of the report of the Washington Scientific Conference on the Biological Consequences of Nuclear War, they will reappraise their nuclear warfare policy, so as to place less emphasis on the growth of the nuclear strength of the West and more on endeavours to halt the nuclear arms race.
The Parliamentary Under-Secretary of State for the Armed Forces (Lord Trefgarne): My Lords, the horrific consequences of nuclear war are not disputed. That is why NATO's policy is one of deterrence aimed at preventing war of any kind, while at the same time seeking balanced and verifiable measures of arms control.
Lord Jenkins of Putney: My Lords, I am grateful to the noble Lord, but I wonder whether he has fully taken on board the conclusion of this
high level world scientific conference, including four Nobel laureates, that if even a small proportion of the present stock of nuclear arms were launched it might well bring about the extinction of humanity in the Northern Hemisphere, in any event, and possibly even in the world. Is the noble Lord aware that, although this report has received wide coverage elsewhere and is believed by some to be one reason for President Reagan's recent change of tune, it has had very little coverage in this country? Will he make the report available in the Library to noble Lords, and in particular the transcript of the satellite television dialogue which took place between American and Soviet scientists, which ended by the Vice-President of the Soviet Academy describing nuclear weapons as,
"a cancerous growth which will kill us if we do not cut it out"?
Lord Trefgarne: My Lords, there is always room for speculation about the horrors of a nuclear war and the severity of its effects, but NATO is more interested in ensuring that war does not start in the first place.
Lord Orr-Ewing: My Lords, has my noble friend observed that the Question refers to the growth of the nuclear strength of the West? Is it not a fact that while the Soviets have withdrawn a few SS4s and SS5s they have replaced them with 250 SS20s, all with three warheads and a reload capacity? Is it not a fact that during this period the United States of America has withdrawn or intends to withdraw several thousand nuclear warheads? How can this possibly be described in the Question as "growth", except by a distorted mind?
Lord Trefgarne: My Lords, my noble friend is quite right when he points out that NATO has been reducing the number of nuclear warheads, particularly in the European theatre, in recent times and that we have plans to reduce them even further, Whereas, as my noble friend said, at the same time the Soviet Union have withdrawn just a few very old warheads and introduced new, triple-warheaded missiles.
Lord Brockway: My Lords, in view of the strength of the demand all over the world for the ending of nuclear weapons, not only in Europe but in America and in the non-aligned nations, Japan and Australasia, will not the Government take advantage of the Stockholm Disarmament Conference not merely to demand the monitoring of military manoeuvres and activities but, through its terms of reference as a disarmament conference, to seek to bring about the ending of nuclear weapons?
Lord Trefgarne: My Lords, it is, unhappily, not for Her Majesty's Government alone to achieve a

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reduction or an elimination of nuclear weapons, but we shall certainly support any measure which proves to be both balanced and verifiable.
Lord Cledwyn of Penrhos: My Lords, further to the question which my noble friend has just asked, could not the noble Lord go a little further and tell the House what will be the main objective of Her Majesty's Government in the CSPM conference? Futhermore, could the noble Lord say whether his right honourable friend sees any hope of a possible resumption of the START or INF talks? Is there any ground for believing, as I believe The Times stated this morning, that the START talks might resume fairly soon, given that that would be an extremely important step forward?
Lord Trefgarne: My Lords, we do not yet have a date for the resumption of the START talks. We hope that there will be a date before long, but, as I believe I mentioned to your Lordships the other day, the Soviet Union are apparently reconsidering their position in this particular area. If that is so, and if it leads to a more constructive attitude of the Soviet Union in these talks, then a short delay in setting a date for restarting them will be well worth it. They have, however, recently agreed to a date to restart the MBFR talks in Vienna, and that is much to be welcomed.
The Earl of Kimberley: My Lords, does my noble friend not agree that the Soviet Union was bound to leave the talks in Geneva when cruise and Pershing missiles arrived in Europe, because they could not lose face due to their sponsorship of the so-called peace movements throughout the world?
Lord Trefgarne: My Lords, I greatly regret that the Soviet Union found it necessary to leave the INF talks when they did. It is a pity that they had not been more flexible during the time that the talks have continued or that the proposals they ever brought forward were ones which simply maintained the status quo, namely, a monopoly on the Soviet side of these particular classes of weapon, while we on the Western side—or, at least, the United States on the Western side—had been advocating a number of different proposals, including the zero option and variations of it. I hope that those talks, too, will restart although I am not hopeful that they will do so in the near future.
Lord Molloy: My Lords, while appreciate the fact that the noble Lord the Minister acknowledges and recognises the horrendous effects of a possible nuclear war, will he be prepared to consider that, in so far as it was perhaps this country—Great Britain—which had more in common with the Russian people and the American people while we were all allies together just a few decades ago, it could be Great Britain which provides the real meeting together of the Soviet Union, our former allies, and the United States, our allies? Would that not serve to acknowledge that the Warsaw Pact and NATO Pact by themselves mean nothing, but that it is the authority of the USA and USSR that really counts in the end? Would not some intervention and a bold independent stand by the Government on
10
behalf of our people enable sanity to start creeping in and bring both sides together on a realistic basis to stop the growth of nuclear weapons—which growth might be followed by their destruction?
Lord Trefgarne: My Lords, the noble Lord is right when he says that the chief protagonists in these discussions are the Soviet Union and the United States. However, the United Kingdom does play an important part and we shall certainly continue to do so, not least in the current conference in Stockholm, to which the noble Lord, Lord Cledwyn of Penrhos, referred.
Lord Jenkins of Putney: My Lords, will the noble Lord the Minister be good enough to explain to his noble friend Lord Orr-Ewing that this matter is not assisted by name calling on either side? Will he further recognise that the main issue here is not so much the preponderance of weapons on either side but the fact that even a small proportion of either the Soviet or the American weaponry could virtually destroy mankind? Is that not a fact which ought constantly to be borne in mind?
Lord Trefgarne: My Lords, nobody doubts that the present nuclear arsenals in the world ought to be reduced. This Government will hasten to support any measure of that kind which was, as I have said, both balanced and verifiable. As to the name calling to which the noble Lord referred, perhaps he will convey his point to Mr. Gromyko following his recent speech in Stockholm.
Lord Bishopston: My Lords, in view of the growing feeling internationally that little progress will be made in any nuclear talks in the USA's pre-election period. Will the Government themselves, in support of the comments made by my noble friend, take their own initiatives to see that progress is made and that the future of mankind is assured?
Lord Trefgarne: My Lords, we will certainly, as I have said, continue to play our part in these matters but the chief protagonists—if that is the right word—must remain the United States and the Soviet Union.
Lord Paget of Northampton: My Lords, does not the noble Lord the Minister feel that all these questions are along the wrong lines? Homo sapiens has launched upon a career in which he is numerically doubling himself every 30 or 40 years. He is plainly in need of a massive cull. Nuclear weapons will make possible that massive cull—and, even more, they have the special factor of muddling up the genes so that from the new crop something rather better than the present lot may emerge. Ought we not to look to our good fortune?
Lord Trefgarne: My Lords, the originality of the noble Lord's views never ceases to impress me.
Lord Cledwyn of Penrhos: My Lords, is the noble Lord the Minister aware that what my noble friend has just said is not Labour Party policy?

Business
Lord Denham: My Lords, at a convenient moment after 3.30 p.m. this afternoon, my noble friend Lord Belstead will, with the leave of the House, repeat in the form of a Statement an Answer to a Private Notice Question in another place on the loss of toxic weed killer in the North Sea.
It may be for the convenience of the House if I announce that dinner will be available at the usual time this evening. The Committee stage of the Cable and Broadcasting Bill will be adjourned at approximately 7 p.m. for about one hour. During the adjournment, the Committee stage of the Prohibition of Female Circumcision Bill will be taken.

Cable and Broadcasting Bill [H.L.]
3.5 p.m.
The Parliamentary Under-Secretary of State, Home Office (Lord Elton): My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.
Moved, That the House do now resolve itself into Committee.—(Lord Elton.)
On Question, Motion agreed to.
House in Committee accordingly.
[The LORD ABERDARE in the Chair.]
Clause 1 [The Cable Authority]:
Lord Ardwick Lord Ardwick moved Amendment No. 1:
Page 1, line 14, leave out ("three") and insert ("six").
The noble Lord said: At the start of the Committee stage may I say that we are all faced with an unusual difficulty. We are legislating not in the dark perhaps but certainly in the twilight. We have very little knowledge of how the cable operators will carry out their tasks. We know of their "must carry" obligations to BBC and ITV programmes; and we know that those obligations will take up a considerable number of channels. Nevertheless, operators will have at least half-a-dozen channels at their disposal. How many of them do they hope to use? How do they intend to fill them? How many channels will they give to pure entertainment and how many to information, education, local affairs and shopping guides?
Each operator will of course make his own pattern. However, there must be a good deal of common ground among the cable operators—something that we shall eventually recognise as the British style in cable entertainment, and which will differ from that of other companies.
The Government have already awarded or are still in the process of awarding 11 pilot schemes to 11 companies, and the Government must know by this time how those companies intend to operate. The companies must have declared their aspirations, their intentions, and even their plans. But what those are we do not yet know. It would be a help to us all during our discussions on this Bill if the way in which the pilot projects will operate were brought into the open.
It would help us even with Clause 1. This clause sets up the Cable Authority and states that it shall consist
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of a chairman, a deputy and no fewer than three other members. This leaves it open to the Minister of course to have as many members as he wishes. It imposes on him only one limitation—that the number must be at least five. Nevertheless, Clause 1 is disquieting. The minimum is far too small for an authority which will have great powers, which will be able to impose drastic sanctions, and which will have need to make a variety of difficult judgments—especially in its early years.
Why such a low minimum? One can only surmise that the number was thought of very early in the interdepartmental discussions about cable, when a case was being made out for minimum control over the system, and when it was thought essential to assure investors—in order to get them to risk their money—that they would not be under the obligations of the independent television companies, which can be pressed to provide some features of high quality at high expense that will certainly not attract the maximum audience. Since then, wiser counsels have prevailed in Government circles, and although the authority is expected to exercise its powers with a light touch, as the White Paper puts it, its duties will be very wide. Of course these duties will be carried out by the professional staff, but that staff is going to require both guidance and support. The Government's wiser views were given in the White Paper. In this it was proposed that the authority should have initially a chairman and six other members: a total of seven. That was a fixed number, not a minimum. But even that more generous figure is on the small side, particularly as the appointments are for part-time service.
The authority is going to have a very large task. It is going to have statutory authority for awarding franchises to cable operators for the provision of cable services. It will determine the size and shape of franchise areas, taking into account not only market forces but also community groupings, and it may at the margin include areas of less economic appeal to the investor. The authority will, moreover, prevent concentrations of power in particular areas which would be contrary to public interest. It will judge franchise applications against a number of criteria which include judgments on the financial provisions of the company, the range and diversity of the material originating in this country that it would draw upon. It would have to see what are the arrangements proposed for educational services, community programmes and some local access, plus the range of interactive services. All this, if we take the White Paper as our guide, must be done fairly and must be seen to be fair.
The authority's sanctions will be the premature withdrawal or the non-renewal of an operator's franchise. It will also be able, after warning an operator, to subject him to a tighter degree of supervision than normal. The authority will be concerned, too, with setting up an advertising code of practice and with the moral aspects of cable, including its respect for the limitations of obscenity and racial prejudice. This sounds a very tall order for a board of five part-timers restricting themselves to a light touch. Surely a body somewhat bigger and with some specialist qualifications is needed, as is suggested in further amendments.
The size is important in another way. Most of the licences will not come up for renewal for 12 years, and

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it might be useful to have at the end one or two people on the authority who were there at the beginning of it all. A larger authority would make this survival more probable.
Our amendment is a modest one. We suggest that, instead of a minimum of chairman, deputy and three other members, there should be a minimum of six other members—an authority with a minimum of eight members instead of a minimum of five. I beg to move.
Lord Campbell of Alloway: Before justice could be done to the spirit of this amendment, is it not relevant to know if there is any hope that the departmental dichotomy which leaves this artificial gap between the authority and Oftel may be closed by setting up a merged authority, and if not, without anticipating the amendment put down by the noble Lady, Lady Saltoun, is there not a reasonable case in favour of this amendment on breadth of expertise? On this question of breadth of expertise, although the Fair Trading Act 1973 is excluded by paragraph 26 of the third schedule, it would appear that the director general, the OFT and the Restrictive Practices Court retain full jurisdiction as regards the grant of licences under Clause 4(8). So would it not be preferable perhaps to exclude the incidence of all restrictive practice legislation and to increase the number of members in accordance with the spirit of this amendment, to widen the expertise and to do broad justice by the community in that way? Is this not a matter which could be worthy of some consideration?
Lord Molloy: May I follow the submission made by my noble friend and the noble Lord, Lord Campbell of Alloway. It does seem to me to be not merely a simple amendment which could be accepted by the Government but one of very great import. When one looks at the other countries which have this sort of thing in their legislation—take, for example, the United States of America, the Federal Republic of Germany—they would not have to argue this case; it is already there built into their constitution. Sometimes we forget that there are five Prime Ministers in Western Germany, because there are five States and the Federal State and each State within the Federal State has a Prime Minister. We have not got that. We are probably the last, if not indeed the only, unitary country in the world.
Therefore, we have to take cognisance of that. It is wise, of course, to have a deputy to the chairman; that is sensible. But to have only three more members for an organisation of such considerable influence does seem to me to be unnecessarily mean. We might have, for example, one person with special responsibility for Wales, one for Northern Ireland, one for Scotland, another two for England being the largest of the countries. Then, when one realises that there are numerous other groups which will have an interest in this form of organisation, they should not be debarred or shut out or palmed off, so that they cannot submit their appeals in a particular week because the three members of the board are tied up and are very busy. We all know that this sort of flimsy, mean excuse has been used in the past.
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Therefore, let us start off on the correct foot and make sure that there can be proper representations submitted by masses of people, either on an area basis or on a professional basis. To make sure that that can happen, I believe it would be sensible for the Government to adopt the amendment and make the situation more realistic when this Bill becomes an Act under which the chairman and his deputy will have to act. I am sure the chairman with his deputy would prefer to have three more members on the board rather than leave it at a meagre three.
Lord Grimond: Following what has just been said by the noble Lord, may I ask whether it is intended to have any special representation from Scotland, or indeed from Wales, on the board? I am not myself clear at the moment that this is necessary, but of course Scotland is explicitly represented on certain similar boards. I should like to know from the Government whether it is their intention that this should be the case here.
Lord Aylestone: The 1981 Act requires the IBA to have a representative for Scotland, for Ireland and for Wales, and each one of those three gentlemen is chairman of his national committee, which is a considerable help. But the cable authority, as I see it, is a very different sort of animal from the IBA. It does not engage in transmission, it does not do any engineering. In my view, it would be very much better, if it is felt necessary so spread the cable authority throughout the country, to relate it to the areas where cable is being transmitted, because at best cable will not be transmitted, as the IBA is required to do, to 100 per cent. of the whole of the country to be achieved in 1998; cable in the beginning will be very lucky to serve half the country. I certainly shall not oppose this amendment, but I do wonder if it is really necessary.
Lord Mishcon: I wonder if I may venture to put some tidiness into the series of amendments now before the Committee. It may be unfortunate that it is an amendment from the Opposition which first deals with the question of the numbers of those who sit upon the authority. All the contributions made so far, if I may say so, are very relevant. But the Committee will have realised that subsequent amendments have been tabled which propose that various interests should be represented. Indeed, the noble Lord, Lord Aylestone, spoke about this; and how welcome it was to have that intervention in Committee. That will be welcomed from all sides.
I suggest that it would be a good idea to leave the debate on the question of how many should be on the authority fairly open, and then come hack to the issue of the separate représentation that ought to be on the authority. It may then be possible at this stage, or perhaps on Report, having heard the individual debates on who or who ought not to be represented, to decide what should be the minimum figure. It would be untidy—a word I used in my introductory remarks—if we now deal with issues which your Lordships will see are matters for debate on Amendments Nos. 4, 5 and 6.
Lord Elton: I am most grateful to the noble Lord, Lord Mishcon, for his elucidation of where we stand.

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I absolutely agree. Therefore, it might be helpful if I were to respond to the rather more general remarks of the noble Lord, Lord Ardwick, and others, by way of a preliminary comment. Perhaps he would then care to speak to his Amendments Nos. 4 and 6, in the context of this debate. Amendment No. 5 is a slightly different issue, which looks at the ceiling rather than the floor, and perhaps we can come back to that amendment afterwards.
The noble Lord, Lord Ardwick, said that we were, if not in the dark, in the gloaming, as to various developments within the context of which we shall be making our legislation. I had hoped to shine a feeble spotlight for him this morning in a letter which obviously has not reached him. It might help both him and the Committee if I say as much as I can about the general context, and I hope that soon after we shall revert from what I call the Second Reading to the Committee stage mode.
My general remarks in response to the noble Lord's questions are that we propose in due course—I use those words with trepidation after the exchanges during Question Time—when we get to the stage of licensing particular operators, to make public the details of their proposals for services so that the public will be in a position to know What to expect and are able to judge how the operators live up to their promises. But for the time being we are still discussing certain aspects of the applications with the companies concerned with a view to determining whether licences can be issued.
On the question of range and diversity of programmes, it is already clear that few programmes will be originated by the cable operators themselves. This is not surprising as the revenue from, say, 50,000 or fewer subscribers to each cable system will not itself support a great deal of original programme production. What is already happening is the formation of a number of companies which plan to offer programme services to cable operators on a national scale. As the new cable industry is only just starting, these plans are inevitably fluid; but an indication of the programme services which may become available in this wav can be gained from the published list of companies which have banded together to form the cable programme providers group. I believe there are about 10 or 11 of them.
The British content of these programme services will naturally vary depending on their nature as time goes by. The Government's requirements in this respect were generally understood, and the cable pilot project applicants and the programme providers gave details of their plans and aspirations for the future. Although I cannot go into all the details at this stage, we shall be publishing full information in due course, as I have said. In addition to offering what they consider to be an attractive range of different channels from those expected to be available centrally, the pilot project applicants all propose services which will be locally produced for the particular community served by the cable system. These include plans for community access, but normally go further, so that the operating company accept a commitment to produce a programme service of local interest. I know that that will be of interest to my noble friends sitting on the
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Benches behind me as well as to noble Lords on the Opposition Benches.
A number of other matters were raised. As to the optimum minimum number of members on the authority, perhaps I should reserve what I have to say until I have heard rather more of what noble Lords opposite wish to say on subsequent amendments. May I briefly say to my noble friend Lord Campbell of Alloway, as a first response to his idea, that the Competition Act will apply to cable as it already applies, for example, to independent television. We feel that it would be wrong to create an entirely separate scheme for cable. Regarding the relationship with Oftel, we shall be coming to that issue again on later amendments. Perhaps the noble Lord would like to follow me.
Lord Ardwick: In the circumstances I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
3.27 p.m.
Lord Aylestone Lord Aylestone moved Amendment No. 2:
Page 1, line 14, after ("three") insert ("nor more than ten.").
The noble Lord said: This amendment has already been touched on in my remarks on Amendment No. 1. The object of it is of course to limit the size of the authority to 10 members. It will be noted from the amendments printed on the Marshalled List that there are proposals to add an additional six members to the authority, presumably in addition to the six or seven which the Government have in mind already, making about 12 or 13. At the moment the IBA works—and works very well and doing a much bigger job—with an authority of 12 members, and the membership figure has been lower. If we limit the authority to 10 it would help the Secretary of State and the authority to resist any attempt that may come from outside, in addition to the suggestions in other amendments on the Marshalled List, to add members to the authority. It would help the Government to repel such suggestions and keep the authority to a size that is workable. I beg to move.
Lord Elton: Do I take it that noble Lords on the other Benches opposite are neutral on this matter?
Lord Mishcon: Let me reply at once that we are in a position of neutrality until we hear the reply of the noble Lord the Minister.
Lord Elton: The Government quite agree with the mover of this amendment and are happy to accept it.
Lord Mishcon: I did not expect such co-operation from the Minister on any amendment not moved by himself. May I just utter this caveat. I would have hoped that this amendment, too, would have been withdrawn for this reason. Whereas it may be very proper to prescribe a minimum, when one is legislating for very much an unknown quantity—and we will be saying this very often during this Committee stage—to fix a maximum produces a difficulty. Nobody wants to see an authority overburdened in numbers, and nobody wants to see a very large committee, as it were, looking after the authority's

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powers in the Bill. But it is rather dangerous to fix a maximum number at this stage and I should have thought that that matter could always be at the discretion of the Government. So long as it remains in the discretion of the noble Lord the Minister I am sure that he will have the confidence of this Committee.
Lord Aylestone: It only remains for me to thank the Minister and assure him that I am extremely surprised at this stage that an amendment has been accepted. I thank him and I am very glad that he is prepared to support it.
On Question, amendment agreed to.
Lady Saltoun Lady Saltoun had given notice of her intention to move Amendment No. 3:
Page 1, line 16, at end insert ("and of whom one member shall have the special duty of maintaining close contact with OFTEL").
The noble Lady said: I do not propose to move Amendment No. 3 on this occasion because it cuts across Amendment No. 108, which is the amendment of the noble Lord, Lord Glanusk, and which I very much prefer.
[Amendment No. 3 not moved.]
Clause 1, as amended, agreed to.
Schedule 1 [The Authority: Supplementary Provisions]:
Lord Mishcon Lord Mishcon moved Amendment No. 4:
Page 36, line 16, at end insert—
("( ) Three out of the members of the Authority other than the Chairman and Deputy Chairman shall be persons who appear to the Secretary of State to be suited to make the interests of Scotland, Wales and Northern Ireland their special case.").
The noble Lord said: Here we revert to the whole question of the content of this authority. I believe that it would be the wish of the Committee that in so far as it is consistent we follow as far as possible legislation that already exists in regard to broadcasting. That does not necessarily mean that we are saying that a broadcasting authority has the same ambit of powers and duties as the Cable Authority will have under the Bill; but I do not think that we should give the impression that we are legislating purely and simply for those areas which are likely to be taken up by commercial interests at this point of time.
On Second Reading we all took the view that it could be quite a risky enterprise but that it was for those who are schooled in commercial matters of this kind to decide for themselves. We all took the view that very likely there would be limited areas of England which might be the beneficiaries of cable licensing and the activities of cable operators. The Committee does not need me to point out that we are legislating for a great number of years and trying to peer into the future. It would be quite wrong to take it for granted that Wales, Scotland and Northern Ireland will not have cable operators in their midst and cable programmes for their enjoyment. That point will be particularly interesting when we come to consider what is called the interactive services, about which the Committee will be hearing a great deal.
As the noble Lord, Lord Aylestone, said earlier, the Broadcasting Act 1981 provided for precisely the matters raised in this amendment, saying:
"Three out of the members of the Authority other than the Chairman and Deputy Chairman shall be persons who appear to the Secretary of State to be suited to make the interests of Scotland, Wales and Northern Ireland, respectively, their special care."
We must not think that in other contexts Northern Ireland, Wales and Scotland are to be left out of the Bill. In Clause 3(3) there is provision for offences committed under the Bill to be within the purview of Wales and Northern Ireland, and for people on behalf or those countries to initiate prosecutions. I observe that there is an amendment down to bring Scotland into line with that provision. If it is taken for granted that offences will be committed in Scotland, Northern Ireland and Wales, the Bill should aim at covering those areas.
It may be said that when dealing with cable it is unnecessary to feel that there are different interests in the various constituent parts of the United Kingdom which make it necessary for there to be representatives of those areas on the authority. I should say that that is quite a wrong view. One can foresee without any difficulty at all how much it may be necessary to have the national and cultural interests, and the various desires of Wales, Scotland and Northern Ireland, looked at quite separately from those of England. It is on that basis that this amendment is moved.
Lord Elton: Amendment No. 4 proposes that three members, other than the chairman and deputy chairman, shall speak for the Kingdom of Scotland, the Principality of Wales and the Province of Northern Ireland. This is a matter in which the noble Lord, Lord Grimond, has already voiced an interest. As he comes from one of the remoter parts of Scotland, I can well understand that.
In this requirement the noble Lord, Lord Mishcon, and his allies are drawing a parallel, I believe, between the Cable Authority, on the one hand, and the BBC and the IBA, on the other. The charter of the BBC requires the corporation to have national governors for Scotland, Wales and Northern Ireland. Similarly, under the Broadcasting Act 1981, the IBA has to include members designated to make the interests of those regions their special care. The broadcasting corporation and the broadcasting authority are the precedents for the amendment, and very respectable precedents they are, too. But while they are strong on precedent they are not quite so strong on relevance. The Cable Authority, for which we are now legislating, will be different from the two broadcasting authorities in several important ways.
For a start, the Cable Authority will not provide any services of its own to the public, and nor will it have any power to impose on its licensees any public service obligations. It is intended, therefore, to supervise the services provided on cable systems with only a light touch. The particular concern of the BBC's and IBA's territorial members is with their authorities' obligation to provide a service which has regard to the distinctive culture, interest and taste of the separate parts of the United Kingdom. That is proper, for much of what they promulgate goes out over the whole of the United Kingdom or is receivable at least on either side of the

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various national borders. But cable is not like that. Each network is local and limited. The Cable Authority will have no national role for its members of the kind that falls, for instance, to the national governors of the BBC. The authority will of course be obliged to demonstrate that it is not favouring one part of the United Kingdom as against another in dealing with licensing, but it will not need national members simply to do that.
We would rather, therefore, that the choice of members was not strictly limited in that way but that my right honourable and learned friend should be able to look rather more freely for the available talent. We would also rather avoid giving one of the signals implicit in such a requirement: that signal would be that the authority would be rather interventionist in its approach and those coming under its aegis could expect constantly to be asked to adjust their product according to its views. The success of cable is closely dependent on the confidence of investors. We do not wish them to expect closer supervision than is already in the Bill.
That said, I should like to give an assurance to noble Lords opposite that, although we may not wish to reserve labelled seats, as it were, for national members of the authority, that is not to say that we want members to come only from London and the South-East, for instance. We recognise the importance of a membership with a wide geographical spread. My right honourable and learned friend has asked me to convey to your Lordships his assurance that he will pay particular attention to that when he comes to appoint members for the authority; but that does not mean, of course, that he will appoint specific Scotsmen, and Welshmen and Northern Irishmen, as such. I hope that the assurance that I have given as to the widely diffused regional character of the membership of the board will reassure the noble Lord.
Lord Ardwick: That reassurance is very welcome, but we were not thinking of the Scot or the Welshman on the authority exerting a continuous repressive influence on the operator. We were thinking of the representative being there in the beginning, when the choice is made, and when a decision has to be made about the range and diversity of the programmes and whether they should include something of the national culture of the country in which the cable operator is working. That is what is in our minds.
There is another question. The authority has to make sure that the area in which the cable operators are working is not just a commercial or market unit but is also relevant to the community. That is a very difficult decision. It is the type of decision which has often been fraught with difficulties when we have been dealing with the question of Parliamentary constituencies. So I believe that if there is on the authority representation by people from Northern Ireland, Scotland and Wales, that would give a good deal of reassurance. But, as the noble Lord has hinted, because a member of the authority is an expert on Wales, Scotland, or Ireland, that does not mean that he does not have other general qualifications for the task. However, I believe that I can accept the assurance of the noble Lord with a good deal of pleasure.
Lord Elton: I am not sure where that leaves us. Is the noble Lord not pressing the amendment? I have one or two things to come back on if necessary.
Lord Mishcon: Since I earlier moved the amendment, perhaps I ought to say that, together with my noble friend. I welcome the assurance. However, I wonder whether the Minister will consider saying that he is prepared to give further consideration to the question of representation as mentioned in the amendment. That would make my task rather easier for the sole reason that I am sure the Minister has in mind that members of the authority, at all events to start with, are to be part time, apart from the chairman and the vice-chairman; I am not quite sure whether they, too, are to be part-time. Therefore it would do very little harm to make provision as we propose for the representation of the various areas of the United Kingdom on the basis that possibly those members, at all events for the time being, would be part-timers. If, having regard to the discussion that has taken place, the noble Lord the Minister would be prepared to say that he would again look at the matter, I should be perfectly happy to withdraw the amendment.
Lord Elton: The noble Lord tempts me sorely, particularly as, oddly enough, he makes me feel almost guilty because of the kindness that I was able to show to the noble Lord, Lord Avlestone. The noble Lord knows me well enough to understand why I say that. I now have to deploy arguments which I shall repeat when, after two brief interludes, we come to the debate on Amendment No. 6. There is a general argument about giving specific responsibilities to members of any body such as the authority, in that one either inexorably increases the number of seats, or one inexorably increases the number of hats worn by each person in a seat. General experience suggests that often it is better to increase the number of hats rather than the size of the body. We can argue about what is the optimum and maximum size; and we have fallen into having 13 as the maximum—or is it 12?—following the helpful intervention of the noble Lord, Lord Aylestone. Therefore on that count I am anxious about the point that if we produce three representatives of Scotland, Wales, and Northern Ireland—and, incidentally, none for my own country, England—we shall put labels on three seats.
I turn to the question of whether it is necessary to have these specific labels and these specific appointments in order to achieve what both the noble Lord and I want to achieve, which is that the interests shall be effectively represented. I must then consider, for instance, the procedures to be gone through under Clause 6(2)(c) in regard to licensing a cable system anywhere, and the elaborate local consultations that must then be undertaken, which no doubt we shall be debating later this afternoon.
My feeling is, first, that I should like to keep my right honourable friend's hands free to choose the talent where he thinks it best; and, after all, there may be three talented Scots, or indeed three talented Welshmen, three talented Irishmen, or, for the sake of national loyalty I must hastily add three talented Englishmen. But, whatever one says, the requirement that each kingdom, principality, or province be

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specifically represented will quite possibly result in one of the representatives being pushed off.
I could go on repeating myself in different forms; I am sure that the noble Lord has got the point. Much as I should like to say that I shall take away the question and think further about it, I must, with reluctance, say that I think that that would prejudice my position on Amendment No. 6, on which I feel quite strongly.
Lord Mishcon: I shall use the formula that is well known to your Lordships' Committee, and say that I shall consider most carefully what the noble Lord the Minister has said, and at this stage beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
The Earl of Swinton: I think that this might be a convenient time to take the Statement, and so I beg to move that the House do now resume.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.

Weed Killer: North Sea Pollution
3.46 p.m.
The Minister of State, Ministry of Agriculture, Fisheries and Food (Lord Belstead): My Lords, with the leave of the House, I shall repeat in the form of a Statement the Answer to a Private Notice Question being asked in another place. The Answer is as follows:
"The information available to me is that a Danish vessel lost her deck cargo in rough weather on 13th January while steaming over a 30-mile stretch due east of Berwick-upon-Tweed and roughly half way between the United Kingdom and Danish coasts. The cargo consisted of 80 barrels containing 200 litres each of an agricultural chemical known as "Dinoseb". The barrels will almost certainly have sunk to the sea-bed. They are yellow and are clearly marked as a Class 6/1 poison.
"I understand that the Danish authorities are mounting a recovery operation, but that the vessel equipped with the necessary detecting and lifting gear will not be able to reach the area until Tuesday evening, or Wednesday at the earliest.
"At this time of year it is unusual for British fishing vessels to fish in the area. However, purely as a precaution, my department is advising fishermen to avoid fishing in the immediate locality and to report to my district inspectors immediately if they have taken fish catches in the vicinity of the incident since 13th January.
"It is hoped that all 80 barrels will still be intact, but even if every one of them has released its contents, the chemical will almost certainly have dispersed rapidly, and fish are likely to be seriously affected only in the immediate vicinity. The chemical is not bioaccumulative in fish flesh, and it is extremely unlikely that any supplies of fish to the British market from the North Sea would have been affected.
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"At this stage I am not able to say why there was such a long delay between the incident and the information being made available to the international community."
My Lords, that completes the Answer to the Private Notice Question in another place.
Lord Grimond: My Lords, I am greatly obliged to the official Opposition for allowing these Benches to ask the first question on the Statement. In deference to the distinguished lawyers I see on the Opposition Front Bench, I must say that I fully understand that this is without prejudice. Bearing in mind that the Question was asked by a colleague of mine in another place, I should like to know whether I am right in thinking that the main danger from the chemical would arise if any of the barrels were hauled on the deck of a trawler and there opened or split, and that the chemical affects the skin and hands of people? I take it that the crews of trawlers have been advised not to touch the barrels if they come up in their trawls.
Do I understand that it is quite clear that it was contrary to regulations that the barrels were being carried as deck cargo? Have the Danes assured us that some steps are being taken by way of prosecution or otherwise to prevent such a practice in the future? Have the Danes also assured us both that they are taking steps to inquire as to why there was such a delay in informing us about this danger and that they will obviate any similar delay in the future?
Lord Bishopston: My Lords, I thank the Minister for replying to the Private Notice Question which has been tabled by a Liberal Member in another place who has constituency interests in the matter. I feel, as the noble Lord, Lord Grimond, has suggested, that there are a number of questions to which some reply is needed relating to a situation that could have serious international consequences. The Minister, if I heard him correctly—I make no complaint about the fact that we have not all received a copy of the reply that he has given—said that it is extremely unlikely that fish will be affected. However, the situation is serious. One wonders about the delay between the incident happening and the information becoming known.
Can the Minister say what consultations have taken place between Her Majesty's Government and other states, including the EC, about action to reduce the effects of pollution, and in this case contamination of fish and food, although there may not be any substantial fears at the moment? Can he also say what action is being taken to protect the interests of the fishing industry and those who work in it and transport as it relates to shipping? Do the Government agree with the Danish Environmental Protection Agency which has warned about the extremely high toxicity of the cargo, and which has allocated resources to rescue the containers? Does the Minister agree about the extreme toxicity of the weed killer involved? What assistance have the Government offered to the Danes in their attempt to clear up the lost cargo?
I believe that the House will also be much alarmed that the cargo was stored on deck where it was possibly subject to the kind of situation that has occurred. Will the Minister say what the International Maritime Consultative Organisation and perhaps the United

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Nations Law of the Sea Conference organisations have been doing to avoid the effects of pollution and to meet the needs that arise in an incident of this kind? Will the Minister say what monitoring takes place for which the Government are responsible that could be effective in preventing a recurrence of what happened with the consequences about which we know little at the present time?
Lord Belstead: My Lords, I am grateful to both noble Lords for what they have said about this difficult situation. In answer to the noble Lord, Lord Grimond, I most certainly agree with the noble Lord's assertion that the main danger would arise if fishermen were to try to land these barrels on to the decks of their ships. The noble Lord asked me about the legality or illegality of a cargo of this kind being carried on deck. My right honourable friend the Minister of Agriculture, Fisheries and Food is leaving for Denmark this afternoon and will be taking up this matter at the highest levels together with the question of the delay in notification which both noble Lords have raised.
The noble Lord, Lord Bishopston, asked about consultation which Her Majesty's Government might be undertaking with other countries, particularly within the European Community, to reduce the effects of pollution. It is important, without in any way sounding complacent, to repeat the point made in the original Statement that, on the best advice I have, this poison—although, it is true, it is highly toxic—would disperse rapidly in water, especially in the rough waters to be found in the middle of the North Sea at the present time.
In addition, it is important to notice that the Statement also said that the poison would be non-bio-accumulative in fish flesh, meaning that the poison would pass through the fish and would not be retained in the flesh of the fish. Although therefore I should like to study what the noble Lord, Lord Bishopston, said about the locus of the IMCO and the United Nations Law of the Sea organisations in this matter, we are not—if I may put it to the noble Lord—talking about pollution of coastlines which, both on the British side and on the Continental side, would be some 200 miles away.
We are talking of the danger of fish being polluted in the area where this grave incident occurred. In order to deal with that, I assure the House that the most urgent warnings have been going out from radio stations around the coast ever since we were notified about the matter by the Danes. Our inspectors have also been active in the main ports concerned warning fishermen and the associations of shipowners.
Lord Bishopston: My Lords, I apologise for coming back so quickly. In regard to my question about IMCO and the Law of the Sea facilities, I recall that when I had the noble Lord's responsibilities within the Ministry, I became aware of the enormous quantity of shipping that sails in the various waters concerned, and also about the need for effective international action and monitoring to prevent such a situation arising again. I am talking not only about this situation but also about others which are unforeseen arising from time to time.
Lord Belstead: My Lords, I should like to study what the noble Lord has said. He makes the point that huge numbers of vessels use the North Sea. Yes, indeed, they do; but it is perhaps right to be aware that, according to our best advice, there were no United Kingdom vessels in the area at that time and there were sightings of only 15 fishing vessels over the previous 10 days or so. The fact of the matter is that, mercifully, this is an area not much used for fishing at this time of year.
Lord Campbell of Croy: My Lords, will my noble friend agree that while some progress has been made over the years towards reaching international agreements and conventions for dealing with oil and trying to prevent oil pollution and slicks, very much less has been done concerning the carriage by sea of toxic substances such as this? Will the Government do what they can to prompt action in the international organisations including what used to be called IMCO, now called IMO, the International Maritime Organisation, with headquarters in London?
Lord Belstead: My Lords, my noble friend underlines the importance of seeing that if this cargo was being carried in an illegal way the matter should be taken up at the highest level. This will be done, as I have already said. But we have first to be clear in our minds—which we are not at present—whether the skipper of this boat was in breach of any regulations.
Lord Tordoff: My Lords, arising out of that and further to the reply that the Minister gave to my noble friend, Lord Grimond, may I ask whether there is some responsibility in this country in so far as the ship, I understand, was loaded in a British port?
Lord Belstead: My Lords, I do not have information on that point.
Lord Harmar-Nicholls: My Lords, will my noble friend recommend to his right honourable friend, in regard to anticipating future problems such as this and dealing with them on an international scale involving more than one nation, that when such matters are sent from the European Commission and from the European Parliament, the Council of Ministers gives them a higher priority than it seems to have given them in the past for enabling regulations to be made?
Lord Belstead: My Lords, in the first instance, this is precisely the sort of point I think that my right honourable friend ought to talk about on the spot with the Danish authorities in Denmark. I am glad to be able to say that he will be in a position to do so within a very few hours.
Lord Fitt: My Lords, will the Minister say whether he is satisfied that the Danish authorities have the machinery and expertise to recover these containers if they are not at the moment creating the damage that all of us fear? Has any request been made by the Danish Government to the United Kingdom Government for assistance in the recovery of the containers?
Lord Belstead: My Lords, I am not aware that the Danish Government have made any such request. On the other hand, I am advised that a vessel equipped with the necessary detecting and lifting gear would be able to reach the area, as the Statement said, by about Wednesday morning at the earliest.

Cable and Broadcasting Bill [H.L.]
4 p.m.
House again in Committee on Schedule 1.
Lord Mishcon Lord Mishcon moved Amendment No. 5:
Page 36, line 22, after ("interest") insert ("(and in particular, no such financial or other interest in any advertising agency or in any business concerned with the manufacture or sale of apparatus for wireless telegraphy or other telegraphic equipment)").
The noble Lord said: The Committee will want to be very careful indeed about the provisions in the Bill which deal with independence of mind and with commercial dual interest when it comes to legislating with regard to the appointment of members of the authority. This is undoubtedly important because the cable companies, the cable operators, will, one hopes, have successful business ventures while complying with all the restrictions and limitations for which we may legislate or which may be imposed by the authority. But what one wants to achieve, through the care that this House and another place will exercise, is the avoidance of scandal and the avoidance of legitimate complaint that licences have been wrongfully awarded or licences have conditions attached to them which are not sufficiently onerous and that that has happened—even though it may not be true that it has happened—as a result of the conflicting interest that a member of the authority might have.
The draftsmen and, indeed, Parliament, were very careful when the Broadcasting Act was brought into being to ensure that it contained provisions which made it very clear that this dual interest should not apply. But when your Lordships look at page 36 of the Bill, and in particular paragraph 2(3) of Schedule 1, you will find that the Act has been followed faithfully until it comes to the very wording that is inserted in Amendment No. 5, which is the amendment I am moving. I should like to read the words:
"and in particular, no such financial or other interest in any advertising agency or in any business concerned with the manufacture or sale of apparatus for wireless telegraphy or other telegraphic equipment".
Those words occur in the Broadcasting Act 1981. They are followed by words which apply only to the Broadcasting Act and which do not in any way apply to this Bill. But all the relevant words I have directly copied in the amendment. The sole purpose—if I may repeat myself—is to ensure that no breath of scandal, if we can avoid it, does in fact occur by virtue of our having not copied these words from the Broadcasting Act into the Bill, and one wants to secure that there is no question of criticism being made of a member of the authority that he had two axes to grind when dealing with the very responsible job that the authority will have. I beg to move.
Lord Marsh: I intervene very briefly because, frankly, I am puzzled by the noble Lord's amendment. It seems to me that the Bill as printed makes it very clear that:
"the Secretary of State shall satisfy himself that that person will have no such financial or other interest as is likely to affect prejudicially the discharge by him of his functions as member of the Authority".
That seems to me to be such a blanket power, and a very good one, because it enables the Minister of the day to choose on the basis of the actual circumstances. Conflicts of interest in industry and commerce are very common. They are inevitable. If people are involved in that particular area of activity it is highly likely that they will be involved in some other aspect of it. If one is looking for areas where there are people who are not members of advertising agencies and who are not manufacturers or suppliers of equipment, one has to remember that it is quite common for virtually any merchant bank to have clients who are acting very substantially for other persons who may well be advertising agencies or manufacturers or suppliers. It is quite common to find auditors, accountants, or even lawyers who have very considerable interests indirectly. That could, in many cases, be more significant than picking on one specific area of activity.
So I cannot understand why, having given the Secretary of State total power and total authority to refuse to accept someone because he believes that there is an unacceptable conflict of interest, it should be deemed necessary to add in two, and only two, areas of specific interest.
Lord Peyton of Yeovil: I should like briefly to express my agreement with what the noble Lord, Lord Marsh, has just said. I will not repeat his arguments. However, I have long been a supporter of what I am afraid is a lost cause in our times—that of keeping Acts of Parliament to a minimum length and not seeking every opportunity unnecessarily to lengthen them. As the noble Lord, Lord Marsh, has pointed out with great eloquence, to insert this amendment—which was moved with customary eloquence by the noble Lord, Lord Mishcon—would seem to add nothing to the Bill. Therefore, I hope that the noble Lord the Minister will check his own characteristic amiability and not accept the amendment.
Lord Mishcon: After such courtesy, paying tribute to eloquence on one side of the Committee and amiability on the other, I find it extremely difficult to answer the noble Lord at all crossly, and indeed I do not do so. However, I should like to turn to the points raised by the noble Lord, Lord Marsh. His argument would have been very effective indeed if he had done the usual homework that he always does when taking part in "Any Questions"—in which he is such a very interesting contributor—and had looked at the Broadcasting Act 1981, which I quoted. The Broadcasting Act 1981 has precisely those safeguard words that are in the Bill—they appear there word for word. But the Broadcasting Act 1981 went on to say, because the general words were not thought to be sufficient, that what one must do very specifically is to see that nobody interested in advertising and nobody interested in the supply of equipment which was relevant, should in fact sit upon the authority.

27
The argument put forward by the noble Lord, Lord Marsh, would have applied to the Broadcasting Act in regard to accountants, solicitors, merchant banks and all the rest. But Parliament in its wisdom said, "We are not going to walk into the danger of people sitting on an authority where licences are going to be granted, or contracts are going to be granted, who have something to do with equipment relative to broadcasting and something to do with advertising, which will be the feature of the Broadcasting Act 1981; Parliament is going to be sufficiently careful—and not over complex in its wording—to see that these words are put in the Broadcasting Act" apart from the general words which are in this Bill. There is specific exclusion of these words, which are already in the Broadcasting Act, although the Broadcasting Act, I repeat, has the very safeguard in general words that the noble Lord, Lord Marsh, quoted.
Lord Marsh: I apologise; I have no intention of turning this into a duologue. But the fact that Parliament in its wisdom inserted unnecessary words and provisions in past legislation is no reason for those of us who were not here at the time, and who can plead not guilty to doing so, to say that they must be continued in the future. I realise that we cannot speak on Amendment No. 6, but I find it very strange that it should be suggested by people who say that we cannot have any persons working for an advertising agency or a manufacturer or supplier of equipment, that it is absolutely essential that there should be somebody on the board who comes from the entertainment industry.
Lord Elton: I think I am right in saying that the noble Lord, Lord Mishcon, is seeking an assurance. I can assure him that we absolutely agree it is essential that we should prevent the arrival on the authority of people with inappropriate interests, and we also agree that quite possibly the interests to which he referred might be inappropriate in certain circumstances, and perhaps in most circumstances. I shall reply to the noble Lord's riposte to the thrust made by the noble Lord, Lord Marsh, in a moment.
First, I should like to put that assurance on the record. Nobody should serve on the Cable Authority whose business interest could conflict with the proper performance of his duty. Paragraph 2(3) of Schedule 1 is designed to ensure this. It is in wide terms, requiring the Home Secretary to satisfy himself that prospective members have no financial or other interest of any sort which might be prejudicial to the carrying out of their functions, and to check periodically that serving members have not acquired such an interest. My right honourable and learned friend will be obliged to do that, and to ensure that they are not in any way disqualified.
The occupations which the noble Lord listed—and he has now kindly drawn my attention to the origin of them—may be thought to be particularly sensitive, though not necessarily the most sensitive or, from another point of view, the most obvious ones that spring to mind as being incompatible with membership of the Cable Authority. Moreover, if in the provision we single out particular activities as being particularly undesirable, the inference of that is
28
that activities not singled out are necessarily less undesirable. That would have a narrowing effect on the legislation, and I do not think that the noble Lord would wish, inadvertently by seeking to strengthen the already substantial and adequate defences against this sort of inappropriate appointment, in fact, marginally to weaken them.
Now he brings me back and rubs my nose in the fateful subparagraph (4) of paragraph 1 of Schedule 1 to the Broadcasting Act 1981. I cannot be certain why it was included, possibly as long ago as 1954; perhaps at that time there was excessive caution. In my own view, there was excessive verbiage and I agree with the noble Lord, Lord Marsh, and my noble friend Lord Peyton that we wish to keep the verbiage to a minimum, particularly if thereby we strengthen rather than weaken the defences against inappropriate appointments. I want to make it absolutely clear that I am not seeking to make it possible for people with inappropriate interests to get on the board; I want to make certain that no such people do, even if they are not possessed of the interests which the noble Lord has listed.
Lord Mishcon: In order that the argument at least follows in a logical sequence, perhaps I may deal with what the noble Lord has just said. In all humility, I believe it has generally been forgotten from where my amendment originates. I have an idea—and I may be venturesome in saving so—that it is not realised where my amendment comes from, so much so that, although the noble Lord the Minister quoted just now the Act from which it comes and said that that may have been all right 30 years ago, I was quoting from the Broadcasting Act 1981, which was passed only three years ago. Three years ago Parliament decided that these words were necessary in addition to the words contained in the Bill. At that time there were many debates and there were those who advocated, as have the noble Lord, Lord Marsh, and the noble Lord opposite, that in various parts of the Bill there should be simplicity and economy of language. Nevertheless, it was decided that these matters were sufficiently sensitive with regard to broadcasting to be included, so there was no doubt that the Minister was properly warned with regard to an appointment.
There is one difference in the Cable and Broadcasting Bill. So far the authority is to comprise people who are given no description in this enactment; there is no provision that anyone with a particular interest will be made a member of that authority. It is very likely and very proper that on that authority there should be people with wide commercial experience and interest. The contracts or licences and monopolies that will be given are being given to commercial companies. If Parliament was wise enough and careful enough to put these words into another broadcasting Act in relation to the appointment of an authority, a fortiori should we be putting these provisions in a Bill setting up this Cable Authority, which deals with matters of the kind which I have just mentioned.
I urge upon the Committee that this is not a question of simplicity of language; it is a question of following a very proper precedent, there being an even stronger need in this Bill than there was in the Broadcasting Act 1981.
Lord Elton: Perhaps I should remind the noble Lord that the Broadcasting Act 1981 was a consolidation measure and, therefore, was not a revising measure. We are in fact looking at a precedent of 1954, not a precedent of 1981. I do not know whether that alleviates the noble Lord's anxiety, but we are looking at what happened 30 years ago.
Lord Mishcon: This is the last time that I shall rise, because I may lose support if I become too verbose and rise too often on this amendment, and I do not want to lose support. The noble Lord the Minister is quite right, but he knows as well as I do that when consolidating measures Parliament has the right to remove from Bills that it is considering anything that is otiose. In this case Parliament—in my opinion very wisely—did not think it necessary to do so.
Lord Molloy: I want to turn briefly to the submission made by the noble Lord, Lord Marsh, with which I would normally wholeheartedly agree. Only some months ago in this House, when we had a debate on the wording of Acts of Parliament, to many of us on all sides of the House it seemed that some of the language used was absolutely appalling and that ordinary people could not understand it—even some lawyers and judges could not understand it. There was general agreement on that by lawyers and judges as well as by ordinary folk like myself. Therefore, we must take full cognisance of what the noble Lord, Lord Marsh, has said.
Speaking parenthetically, my noble friend on the Front Bench quoted the Broadcasting Act 1981, but that quotation is also included in other legislation; it was in other broadcasting Acts. There seemed to be a specific reason for that. It would appear that when one reads the parliamentary history of broadcasting Acts one must be especially careful. This seems to be the gravamen of my noble friend's submission this afternoon.
As the noble Lord, Lord Marsh, has said, there is a blanket clause which one would have thought covers everything, but experience has taught us that it does not. I shall not say that people who are appointed to this board will fall into this category, but one of the reasons given to both the noble Lord, Lord Marsh, and myself when we were in another place was that sometimes things must be spelt out and a few more words must be added, because we must always bear in mind the activities, not so much of people who deliberately seek appointments on a board such as this in order to make money but of the crafty, the clever and the "shyster" (I believe that is the word sometimes used) lawyers, who will cut their way through a good-intentioned Act of Parliament with dead ease. I believe that both the noble Lord, Lord Marsh, and the noble Lord opposite who supported him know that. Therefore, in general, I support what the noble Lord, Lord Marsh, said.
However, if it is necessary (and those of us who disagreed with it at the time found it necessary to accept it) that three or four more lines be added to a Bill of this character, which will become an extraordinarily important Act of Parliament, in order to spell out something under that blanket coverage and tie up the safety aspect, I believe that this Committee ought
30
to say that, by and large and in general, we approve of their being added to the Bill.
Lord Peyton of Yeovil: I would add only a word of great regret that the conversion of the noble Lord, Lord Molloy, to the cause of brevity in Acts of Parliament should be so shortlived.
Lord Mishcon: I have moved the amendment and ask for the opinion of the Committee to be taken.
4.20 p.m.
On Question, Whether the said amendment (No. 5) shall be agreed to?
Their Lordships divided: Contents, 50; Not-Contents, 119.

DIVISION NO. 1

CONTENTS

Ardwick, L.

Jeger, B.

Birk, B.

Jenkins of Putney, L.

Bishopston, L. [Teller.]

Kearton, L.

Blyton, L.

Leatherland, L.

Boston of Faversham, L.

Listowel, E.

Briginshaw, L.

Llewelyn-Davies of Hastoe, B.

Brockway, L.

Carmichael of Kelvingrove, L.

Lockwood, B.

Cledwyn of Penrhos, L.

McCarthy, L.

Collison, L.

Mishcon, L

Cooper of Stockton Heath, L.

Molloy, L.

David, B.

Oram, L.

Davies of Penrhys, L.

Peart, L.

Dean of Beswick, L.

Phillips, B.

Donnet of Balgay, L.

Ponsonby of Shulbrede, L.

Elwyn-Jones, L.

Shinwell, L.

Ennals, L.

Stewart of Alvechurch, B.

Ewart-Biggs, B.

Stewart of Fulham, L.

Fitt, L.

Stoddart of Swindon, L.

Gaitskell, B.

Stone, L.

Graham of Edmonton, L. [Teller.]

Taylor of Blackburn, L.

Taylor of Mansfield, L.

Hale, L.

Underhill, L.

Hall, V.

Wallace of Coslany, L.

Hatch of Lusby, L.

Wedderburn of Charlton, L.

Howie of Troon, L.

Wootton of Abinger, B.

NOT-CONTENTS

Alexander of Tunis, E.

Ebbisham, L.

Annan, L.

Eccles, V.

Atholl, D.

Ellenborough, L.

Attlee, E.

Elton, L.

Avon, E.

Faithfull, B.

Aylestone, L.

Fraser of Kilmorack, L.

Banks, L.

Gainford, L.

Belhaven and Stenton, L.

Gardner of Parkes, B.

Belstead, L.

Glanusk, L.

Broxbourne, L.

Glenarthur, L.

Bruce-Gardyne, L.

Glenkinglas, L.

Byers, L.

Gray of Contin, L.

Caithness, E.

Gridley, L.

Campbell of Alloway, L.

Grimond, L.

Campbell of Croy, L.

Hailsham of Saint Marylebone, L.

Carnegy of Lour, B.

Cockfield, L.

Halsbury, E.

Cottesloe, L.

Hampton, L.

Cox, B.

Hanworth, V.

Craigavon, V.

Harmar-Nicholls, L.

Cullen of Ashbourne, L.

Harris of Greenwich, L.

Daventry, V.

Harvey of Prestbury, L.

Davidson, V.

Hayter, L.

De La Warr, E.

Henley, L.

Denham, L. [Teller.]

Hornsby-Smith, B.

Diamond, L.

Hylton-Foster, B.

Donaldson of Kingsbridge, L.

Ironside, L.

Drumalbyn, L.

Kilmarnock, L.

31

Kitchener, E.

Peyton of Yeovil, L.

Lane-Fox, B.

Plummer of St. Marylebone, L.

Lauderdale, E.

Porritt, L.

Lloyd of Hampstead, L.

Portland, D.

Lloyd of Kilgerran, L.

Rodney, L.

Long, V.

St. Davids, V.

Lucas of Chilworth, L.

Saltoun, Ly.

Lyell, L.

Sandford, L.

McAlpine of Moffat, L.

Seear, B.

Macleod of Borve, B.

Selkirk, E.

Malmesbury, E.

Shaughnessy, L.

Mancroft, L.

Skelmersdale, L.

Margadale, L.

Somers, L.

Marley, L.

Spens, L.

Marsh, L.

Strathcona and Mount Royal, L.

Maude of Stratford-upon-Avon, L.

Sudeley, L.

Merrivale, L.

Swinton, E. [Teller.]

Mersey, V.

Terrington, L.

Molson, L.

Teynham, L.

Montgomery of Alamein, V.

Tordoff, L.

Mottistone, L.

Tranmire, L.

Mowbray and Stourton, L.

Trumpington, B.

Munster, E.

Vaizey, L.

Murton of Lindisfarne, L.

Vaux of Harrowden, L.

Newall, L.

Vickers, B.

Northchurch, B.

Vivian, L.

Nugent of Guildford, L.

Wakefield, Bp.

Orkney, E.

Walston, L.

Orr-Ewing, L.

Westbury, L.

Pender, L.

Whitelaw, V.

Penrhyn, L.

Wynford, L.

Peterborough, Bp.

Young, B.

Resolved in the negative, and amendment to disagreed to accordingly.
4.28 p.m.
The Chairman of Committees: I understand that the noble Lord, Lord Mishcon, wishes to move the next amendment in two halves separately and therefore will not move Amendment No. 6 as printed on the Paper but will move two manuscript amendments, the first, Amendment No. 6A, being the first half of Amendment No. 6 relating to those employed in the entertainment industry. When that has been dealt with, I shall call manuscript Amendment No. 6B, which will be the second half of the amendment referring to a representative of the interests of the consumer. If that is right, Amendment No. 6 is not moved.
[Amendment No. 6 not moved.]
Lord Ardwick Lord Ardwick moved Amendment No. 6A:
Page 36, line 31, at end insert—
("( ) The membership of the Authority shall at all times include at least one person who appears to the Secretary of State to be representative of those employed in the entertainment industry in the United Kingdom.
The noble Lord said: I wish to speak to Amendment No. 6A, which is identical with the first paragraph of the old Amendment No. 6. This says that the membership of the authority shall at all times include at least one person who appears to the Secretary of State to be a representative of those employed in the entertainment industry in the United Kingdom. I have to answer the criticisms previously made that this seems inconsistent with the last amendment, but there is a vast difference. One was dealing with an individual having a particular interest in a particular firm. What we are concerned about is somebody who should be representative of the workers of the whole of the
32
entertainment industry. There will be no financial interests at all.
This is a remarkable decision that the Government have taken, that the cabling of programme services in Britain is to be entertainment-led, so the considerable interests of all the various branches of the British entertainment industry and everybody who works in it are all going to be affected by the advent of cable. Surely it is essential to have somebody at the highest level on the authority who can represent the workers in the industry and see that they are given full scope and are not denied legitimate opportunities by the use of an excessive amount of foreign material which can be bought in this country at low prices since it has already earned its keep—and its profits probably—in the United States of America.
Also, it is not only a question of watching over interests. The world of "showbiz" is a world of its own and other members of the authority may lack the special knowledge which is required—the kind of special knowledge which the Hunt Committee lacked and of which I was critical at the time. The authority is going to need this special knowledge if the claims of "showbiz" are to be viewed realistically and are to be properly judged. I beg to move.
Baroness Gardner of Parkes: I oppose this amendment. I did not like it when I read the text; and, having heard the speech made by the mover. I like it even less. It would be quite impossible to find the exact person that he was describing. I will make all my points now rather than speaking again on Amendment No. 6B. I accept that there is a possible need for someone in the entertainment industry and indeed for the consumer. But whatever need there is for these people, we do not know what other needs there are which might be greater; and to write these exact changes into the Bill to establish those for all time would I think be very wrong.
There should be a very wide discretion so that the people chosen to serve on this authority could be chosen on their own merits in order to meet whatever were the absolute needs at the time. I would not be in favour of the amendment although I have nothing at all against the people in the entertainment industry—and indeed I am very much a consumer myself I think the principle is wrong and it is quite incredible that we should suggest tying it down to such specific categories. Therefore I oppose the amendment.
Lord Somers: One difficulty about this amendment, although I am entirely in agreement with the spirit of it, is the immense difference in the various areas of the entertainment industry. There is music, the theatre, ballet and endless other forms of entertainment. Who on earth are you going to find with a really inside knowledge of the whole lot? It is practically impossible. You should have somebody who is ready to listen to those who are expert in the various departments. I must confess, for instance, that up to now music has had rather a poor deal as regards television. I only hope that one can find somebody who is ready to listen to expert knowledge and to take account of it.
4.35 p.m.
Lord Jenkins of Putney: The difficulty in dealing with this schedule and indeed with the Bill as a whole is that none of us knows what we are talking about. That is a common criticism of this Chamber. It is true particularly of this Bill, and also it is true of every other Bill which has ever been introduced concerning the creation of television services in this country. If one examines, for example, the Act which set up the Independent Television Authority, one finds that the shape, structure and nature of the authority, as we now know it, simply was not envisaged in the legislation itself. It has arisen by a strange combination of pressures, and on the whole I think the results of that have not been too had. But we are now attempting to create a structure in a situation in which television is already established and so our position is even more difficult than it was in those days. The existing structures are bound to condition to some extent the new structure that we are attempting to bring about.
I wholly support my noble friend's endeavour to put down something in the nature of a marker by saying that—and I share the view expressed earlier by my noble friend that the authority is not nearly large enough—conditioned by the small size of the authority, we can suggest only one person to cover the various areas of entertainment. As has been indicated already, he will have to be a person of very considerable stature indeed; but that there should be a person who appears to the Secretary of State to be representative of those employed in the entertainment industry I would have thought a very reasonable proposition, having regard to the fact that the whole structure of television in this country has been formed by the various pressures within the entertainment industry, acting upon other pressures. I think something similar is likely to happen in this case, although here there are other communications pressures, and pressures from business and consumer interests, which did not apply in the same form or nature to the existing channels. Nevertheless, having said that, it seems to me that my noble friend's proposal is a reasonable one, and I hope that the Committee will accept it.
Lord Annan: I very much hope that this amendment will not be pressed. It seems to me that it is an example of a special interest being introduced into the authority. That is my first point. My second point is that I deplore the attempt to go on earmarking places on the authority for special interests. I had some experience of this when the Committee on the Future of Broadcasting was being set up. It was then put to me that a most admirable member of it would be Miss Shirley Bassey, who was Welsh, a woman and black. I had to say that I would find it difficult to recommend this to the Home Secretary, because, although Miss Bassey might well be a most admirable member of the committee, she could not speak Welsh.
When you try to balance all the interests which naturally a Minister would want to try to have represented on the committee, if you once begin tying up places, whether for national interests, as in the first amendment which was moved by the noble Lord, Lord Mishcon, or in this one, it seems to me that we are on a very bad path. Therefore, I very much hope
34
that we shall not have either this or someone to represent the consumer—the consumer, it seems to me, being a very difficult person to define in this case. Is it the person who is in fact buying cable services or is it the general public? These are contradictions and confusions which we should be ill-advised to back.
Lord Marsh: At the risk of sounding negative, I should like to follow the noble Lord in his objection to this amendment, on the principle of being strongly opposed to setting up boards and authorities which are comprised of individuals all representing a specific sectional interest. It is an increasing trend with regionalisation in a country whose prime fear seems to be the ungovernability of its land mass, that we must have somebody representing the Welsh, somebody the Scots, somebody the Irish—we do not normally have somebody representing the English or Londoners, who are a large part of the population—and somebody representing this or that group. If the intention of the amendment is to ensure that the views of the staff are properly reflected, that seems to me to be perfectly right and proper. But it is something which will happen within each company separately, where there is a specific structure to deal with that.
I have recently had some experience of the entertainment industry and the people in it, and I agree with the noble Lord that it is quite unlike anything else that I have been associated with in my life before. But, having said that, I think that the principle of having people representing a particular interest is unworkable in reality, because you cannot find a person, or even a couple of persons, who represent the entertainment industry. It is totally unnecessary and it is a highly undesirable thing to continue to progress.
Lord Molloy: I find these arguments somewhat distressing. I hope that the noble Lord. Lord Marsh, will understand when I say that when he comes here he seems on occasions to be representing a very special body in Parliament—not just in an organisation outside—in the highest assembly in the land. The same can be said for people who want to make representations on behalf of trade unions. I do not think that that argument will work. If that argument will work, I do not think that the noble Lord, Lord Marsh, will come here any more on behalf of one big, powerful organisation. I ask your Lordships to take the attractive submission of the noble Lord, Lord Annan. The only snag is that it has nothing to do with this Bill. There is no one like Miss Shirley Bassey, who is black, Welsh, a good singer and cannot speak Welsh, who will be appointed under this Bill.
So what is really being proposed? Is it one tiny little group? As the noble Lord, Lord Marsh, said, that would be an appalling thing to do. Is it just a couple of groups? What do we mean by "the entertainment industry"? There was also the point made by the noble Lord on the Cross-Benches a moment ago. How on earth would all these various people get together to elect whoever would represent them? What is the answer to that? The answer is that they have got together. They have organised themselves. They are known as the Radio and Television Safeguards Committee and I am sure that they would help us.

35
We must ask ourselves, who are the Radio and Television Safeguards Committee? I shall not read out the long details of everyone who belongs to it, but I should like to indicate the substantial number whom they represent. So we have got over that obstacle. If we are to have a representative of the entertainment industry, say, "You have organised yourselves. You are all included. You are in a body which meets from time to time. Now elect one of your number for the Minister to consider". They would have no right to appoint anybody, but they should have the right to submit to the Minister somebody who they feel should be on this board.
Who are these people? To begin with, there are all the broadcasting staff. Then there are the TV technicians and engineers. There are all the actors represented by their guild. Then there is that suspicious lot known as British cricketers. A large cry from Miss Shirley Bassey! There are all the footballers in Great Britain. There is the artists' association and they are on radio, screen and in the playhouses. There are all the musicians. Then there are the journalists, probably with members in every newspaper and magazine throughout Great Britain. There are the authors and there is the Writers' Guild. I could go on and on. These are now all joined together.
It would be a good thing to ask, "Are we going to get all these together? Are we going to get them to decide who will represent them?" There is something to be said for the last point, but with regard to the first point they are all together under one heading known as the Radio and Television Safeguards Committee. I should have thought that, if something like this did not exist, we should have some genius on the Back-Benches who would propose the setting up of this sort of organisation with which the Secretary of State or other Ministers could discuss. Perhaps they could influence the Minister. The Radio and Television Safeguards Committee would be an asset to the group that will run cable and broadcasting under this Bill.
If we accept the amendment, it will not mean that there will be any special group from the entertainment world. Whoever is ultimately selected will have to satisfy, first, the Minister and, secondly, all the other people whom I have listed that he or she is the right person to represent the entertainment world. If it were an amendment which was purporting to damage or harm the Bill or, indeed, to destroy it, then I could understand that there would be strong opposition from the Benches opposite, or from elsewhere, to try to see that it was not approved by this Chamber. But, when one considers the status of all the groups that I have mentioned—and they cover roughly 15 or 16 British organisations that are concerned with sport and television—it will be seen that a representative on the board would be an asset to the whole organisation and would help in the success of this measure when it becomes an Act of Parliament.
Lord Aylestone: The noble Lord, Lord Mishcon, called in aid the 1981 Act, which was of course a consolidation Act. He will be well aware that there is no requirement in that Act to include a member of the entertainment world on the Independent Broadcasting Authority. But from my experience over a number of
36
years, I can say that what is behind this amendment is the exclusion of a representative of the trade union movement and not of the entertainment movement. I can tell him that, without that requirement in the 1981 Act, several Secretaries of State, through the Ministers of the time, and the chairman of the authority, appointed the late Sir Vincent Towson. Sir Ronald Gould, Sir Frederick Heyday and the last one, our noble colleague in this House. Lord Blease. I do not think there is any reason to believe that the new Cable Authority will behave any differently, or that the new Secretary of State will behave any differently.
Lord Elton: I feel greater sympathy with the noble Lords, Lord Annan, Lord Marsh and Lord Aylestone, than I do with the noble Lords, Lord Ardwick and Lord Molloy, on this matter. Very briefly, since I think that the Government's position ought to be on the record, may I say that we feel, as does my noble friend Lady Gardner of Parkes, that the imposition of statutory criteria for membership is bound to reduce the flexibility which is desirable in making appointments to the authority, as I have already said in dealing with the proposal for national representatives.
Like the noble Lord, Lord Marsh, I am averse to labelled seats for that reason, as well as for the occasional combative position which I fear in a body which has both labelled seats and the sort of pyramid of election which the noble Lord, Lord Molloy, suggested beneath it. And who is to say whether the vote of a ballerina will equal that of a television interviewer and what the balance of forces will be within that? It seems to me that the whole thing would become politicised. Since this still hovers about the question of optimum size, what we are trying to construct as the authority is a non-bureaucratic body exercising a light touch in its relations with the cable operators.
To start off with, we do not think it will be necessary to have as many as eight members for our purposes. It is my right honourable and learned friend's intention, however, that at the start the authority shall consist of a chairman, a deputy chairman and five other members. I hope that noble Lords will agree that that should be within his powers and that even within the larger confines which the noble Lord, Lord Aylestone, has permitted us in his amendment he should not be constrained to dish out labelled seats to the exclusion of talents which may not coincide with the categories into which noble Lords want to put them.
Lord Archwick: The size of the authority, which we have decided this afternoon shall be anything between five and 10, allows room, if desired, for some representative figures. We have been criticised for trying to find someone from a category, but I must emphasise that the category is enormously wide. It includes all the people employed in the entertainment industry. It ought not to be impossible for the Secretary of State to take soundings from the unions and find somebody whom they regard not simply as, in a narrow sense, representing their interests but as being able to speak on behalf of the entertainment industry as a whole.
Lord Mishcon: I am sure that my noble friend Lord Ardwick will agree that it is necessary to weigh up what has been said on this important matter and consider whether or not it is necessary to come back at Report stage to the amendment. With the leave of the Committee, therefore, I beg leave to withdraw it.
Amendment, by leave, withdrawn.
4.52 p.m.
Lord Mishcon Lord Mishcon moved Amendment No. 6B:
Page 36, line 31, at end insert—
( ) The membership of the Authority shall at all times include at least one person who appears to the Secretary of State to be representative of the interests of the consumer.")
The noble Lord said: I hope the Committee infers from what I have just said that we do not concede the principle that Parliament should guide the constitution of an authority if a vital interest is concerned. Although generalisations can very properly be made as to the inadvisability in some circumstances, when one is setting up a statutory body of this kind, of labelling the people who must be on it, there must, in Parliament's wisdom and width of view, be exceptions to that rule. I am going to quote what has been said about the constitution of this authority by a body which has been set up nationally and which has. I believe, our general respect, irrespective of party considerations—the National Consumer Council. They say:
"The membership of the Cable Authority is too loosely defined. Apart from there being at least five members and a few restrictions on who cannot be on it, there are no provisions for ensuring that the authority will reflect the many views of those with legitimate interest in the rules by which cable companies operate. The decisions of the Cable Authority could have a serious effect on, amongst other things, the finances of the cable companies, the quality of cable services, the control of advertising on cable and indirectly on broadcast TV, the finances of the ITV companies and the extent and quality of local community and access channels"
The National Consumer Council go on to say that there should be a representative of consumer interests on the Cable Authority.
Let me deal briefly with two points and then leave the matter for the wise discussion of the Committee. First, the noble Baroness, Lady Gardner of Parkes, made a very sensible and practical suggestion, which affected my judgment as to whether this was the right time for the Committee to take a decision. The noble Baroness said that if you label the various interests you may exclude some interests which may become of greater priority later on. There cannot be a greater interest than that of the consumer. Even if one thinks in terms of a higher priority, the consumer interest must obviously operate throughout the Bill. Because there is no other guidance in the Bill, I believe that there is a special case, as advocated by the National Consumer Council, for the consumer interest to be represented.
Secondly, we were asked who was meant by "consumer". Let me answer that question right away. I mean the person who is right at the end of the receiving line: the recipient of the programme. That person must be safeguarded in relation to advertisement interest, content of programmes, prices and so on. Whatever the Committee's view may be on any other labelling question, I hope that it will agree
38
with the view of the National Consumer Council. I should hope that it would be their own nominee who would represent the consumer interest. Whatever your Lordships' views may be about other labels, I believe that they should not apply to this one. I beg to move.
Lord Somers: I wonder whether all that the noble Lord, Lord Mishcon, has just said, with which I very largely agree, could be solved by having an entirely disinterested official, a radio ombudsman, to receive complaints from the public and convey them to the appropriate place. This matter of complaints applies not only to cable television but also to all forms of broadcasting. At present it is very difficult indeed to get one's complaints home to the authorities. I do not know whether any of your Lordships have ever looked at the programme in which various letters from the public (I cannot remember the name of the programme because I dislike it so much) are read out by a man who treats them in a most complacent and, he thinks, amusing manner. He makes me so entirely irritated that I have to turn the programme off after five minutes. What we want is an individual who has no particular interest one way or the other to accept the complaints of the public and convey them to the appropriate place.
Lord Peyton of Yeovil: I cannot conceive that when my right honourable and learned friend composes this body he will be so foolish as to set out to collect hermits and Trappist monks, who are the only people who in this context might perhaps be regarded as non-consumers. There are numerous bodies in this country which set out to represent, quite stridently at times, the interests of those whom they identify as consumers.
Therefore, I believe that to accept the noble Lord's amendment would be an error. My increasing confidence in my noble friend the Minister, if I may put it that way, leads me to believe that he will do nothing of the kind. I myself was surprised to hear that the National Consumer Council was called in aid. I have great respect and admiration for that body, but I manage to keep my admiration in a fairly low key, and I hope my noble friend will do the same.
The noble Lord, Lord Mishcon, said he was anxious that the interests of the person right at the end of the receiving line should be safeguarded. As I said at the start of my remarks, I cannot conceive that members of the authority—no matter from what group they are selected, or perhaps from none—would be innocent of the views, interests and reactions of the person at the end of the receiving line.
Lord Winstanley: It appears to me that the noble Lord, Lord Mishcon, in moving this amendment, which he did admirably, put both sides of the case. Perhaps that indicated that it may have been more appropriate if the noble Lord sat on this Bench and not on the one he occupies now, so fair was he in steering the course. I listened to the noble Lord most carefully and it appeared to me that he was opposed to the idea of the authority being filled up with people having a specific responsibility to represent specific interests. The noble Lord made the point, rightly, that if one once spells out one interest that must be represented on the authority, then there is an implication that

39
other interests not so spelt out are not to be so represented.
I would have thought that every Member of your Lordships' Committee hopes that the whole of the authority will be there to represent the interests of the consumer. That is the whole purpose of the authority It is not there to represent the interests of the cable operators. I hope it is not there wholly to represent the interests of the Government, whatever Government that may be. The purpose of the authority is to protect the public interest in one way or another, because the public is the consumer.
I hope we shall leave this matter fairly open, but I hope also that at the end of this debate the noble Lord or Baroness who is to reply will be able to tell the Committee that, without question, when deciding who to appoint to the authority the Secretary of State will bear carefully in mind the ability of those people to represent the interests of the consumer. I hope very much that the Secretary of State, in making appointments, will make absolutely certain that there is at least one person who is sufficiently familiar with the workings and activities of the National Consumer Council, the Consumers' Association, and perhaps the Citizens Advice' Bureaux and other bodies of that kind to be able effectively to represent their interests. But to spell out that the National Consumer Council shall have the right to nominate somebody would be very dangerous indeed.
Without straying from the point, my noble friend and I have down an amendment to insert after Clause 9 a new provision to appoint local advisory committees. If the Committee felt it was appropriate to set up such committees, we would very much hope your Lordships would agree that they should contain people who are quite specifically connected with voluntary consumer interest bodies in their own particular areas. That arrangement would safeguard some of the matters which the noble Lord, Lord Mishcon, has in mind.
I am in some difficulty because I very much agree with the noble Lord's point, but if you once start spelling out an interest which must be represented, and almost imply that a body such as the National Consumer Council has the right to nominate a person, then one begins to think about other bodies which ought to have a parallel or similar right. That is a great difficulty. I am bound to say that my noble friend and I on these Benches would be very concerned if, at the end of the day, we found that the Secretary of State had appointed people to the authority and that the authority as so constituted was not capable of representing the consumer.
I hope those matters can be attended to by some kind of undertaking or assurance by the noble Lord or Baroness who replies, to the effect that the Secretary of State will hear in mind very strongly the need for the people on the authority to be fully aware of the activities of those very important consumer protection bodies of one kind or another, and that he will spell out also that the whole purpose of the authority is to watch over and protect the interests of the consumer. So, we would not necessarily oppose this amendment but, frankly, we would not be wildly enthusiastic in
40
supporting it. Nevertheless, we sympathise with its ultimate aims.
Lord Marsh: Having opposed on principle the idea of having labelled seats on the authority—and that is a principle about which I feel very strongly—I find this amendment even easier to oppose, and I am troubled by it. Frankly, if there is one interest group that does not need to be protected in this particular case it is that of the consumer. That the consumer needs protection is an extraordinary proposition. The consumer is the paymaster. I sit as chairman of a commercial television company. I promise your Lordships—and I make no virtue out of it because it is pure self-interest—that I think of nothing else but the consumer. I wake every day hoping that more consumers will be happier with the product.
The idea is that a contractor is going to ignore the consumer, but the consumer is the sole source of success available to the contractor. We are in danger of believing that, somehow or another, Parliament has a role to help everybody do everything. People who set up and put their own money behind a project that is designed to attract and please the viewers of cable television will be very well aware of the needs, desires and interests of the consumer. If they are not, then, fortunately, they will not just get a rude letter from the Minister and fail to be appointed next time around, but they will go bust.
5.6 p.m.
Baroness Lockwood: I have a great deal of sympathy with those noble Lords who have spoken against having a fragmented authority, with different members representing different interests. But unlike the noble Lord who has just spoken. I take an entirely different view of this particular aspect. Unfortunately, I was not in the House during the Second Reading but I read the debate very carefully. On reading the debate, one realises that the contributions came very much from the experts. This is a very technical matter. While I accept what has been said about the approach of the Home Secretary to this matter. I believe that in a new area such as this it is important to ensure that the consumer's interests and point of view will be taken into account. It is not just a question of the National Consumer Council because no single body should have a right to nominate. But it is a question of trying to assess the various interests of a community as a whole and of appointing someone within the community who is in touch with grass roots points of view and who can speak on behalf of those people.
If I may say so, this is not just a negative approach—dealing with complaints. It is also a positive approach—being able to import into the authority ideas on the kind of approach and programmes which the consumers in the area want. Whether or not the noble Lord the Minister feels able to accept the amendment. I hope he can give an assurance that there will be on the authority someone who is a part of the community; who knows the various voluntary bodies in the community, is in touch with them, and can speak on their behalf.
Lord Elton: I wonder whether the words "demand-led" lack some of the force that I need to express my

41
support for that which the noble Lord, Lord Marsh, has said. I have to tell the noble Baroness, Lady Lockwood, that if the consumer does not want cable, he will not pay for it; and if he will not pay for it, there will be no cable.
Lord Molloy: Does the same apply in respect of nuclear weapons?
Lord Elton: I cannot hear the noble Lord, but I will sit down.
Lord Molloy: That is a terrible argument to make.
Lord Elton: The noble Lord can now tell me why.
Lord Molloy: I beg the noble Lord the Minister to think again about what he has just said; that if you do not want something in this country then you do not have to pay for it. Is it therefore the policy of the Government that pacifists will not have to pay their part towards the cost of nuclear weapons?
Lord Elton: If the noble Lord will allow me, I am not adducing a general principle as to how we should run this country; I am addressing myself to the matter on the Marshalled List—an amendment to the Cable and Broadcasting Bill. In that Bill there is a system whereby we expect entertainment to be delivered to houses and other places and it will be delivered only at the cost, and therefore at the invitation, of the people who will be at the end of the cable. If people do not want the cable to come through their door or their drainpipe it will not. If enough of them do not want it to come through it will not start from the other end.
With the noble Lord, Lord Marsh, I regard that as a definitive statement of the initial control which the consumer has. Thereafter, he has the perfect right not to continue subscribing to the service which the company has brought at great expense to his door or his drainpipe as the case may be. Therefore, he has a negative voice as well. But I can assure both the noble Baroness and the noble Lord, Lord Winstanley, and indeed my noble friend. Lord Peyton, that my right honourable and learned friend will not set about the difficult task of finding people who are particularly out of touch with the views of the consumer, and that he is aware of the way in which the views of the consumers are at present reviewed, co-ordinated and sometimes orchestrated, and is well capable of finding people suitable in that respect to sit on the authority.
Similarly, as I should have said in the last debate, he is well seized of the width of interests in the entertainment business, and I shall be very surprised indeed if that interest is not also represented on the authority.
What I want to say is that the interests which your Lordships have so clearly expressed as being so close to your hearts are ones which are very likely indeed to be covered. I cannot say they will be because everybody has a particular interest, but the generality of interest will be spoken for on this authority, and if it is not my right honourable and learned friend will want to know why it is not. I think, therefore, we ought to get away from this whole question of putting labels on seats.
Lord Mishcon: I wish it were as easy as that, and I wish that the wisdom of the right honourable and learned friend of the noble Lord was guaranteed under the Bill for all time, and indeed that he was allowed to sit, if there were a Conservative Government, for a great number of years as Secretary of State.
But, having said that, we are legislating for what ought to be the constituent elements of a very responsible authority. I promise to do it briefly, but let me try to deal with some of the points which have been made. The noble Lord, Lord Marsh, is, as usual, persuasive and amusing, but I found, if I may say so, a lack of depth on this occasion both in the amusement and in the content of his argument. We are not dealing with a commercial product which the customer can either refuse or take as he wishes. We are dealing with something that is going to be a monopoly in a particular area for 12 years, possibly 15 years if a later amendment is passed. In those circumstances it is a very different consideration from the matter which appears to obsess the noble Lord, Lord Marsh, night and day—and I admire him for it—namely, the benefit of his own consumers. His own consumers can indeed switch off; other people like the BBC can come along and entertain, and other channels may also be competing. But this is a monopoly being given for 12 to 15 years.
Again I repeat the point which was made so well by my noble friend Lady Lockwood. The argument is, what about a complaints procedure? I am most grateful to the noble Lord on the Cross-Benches for the words he spoke in half support of the amendment before he went on to the setting up of a complaints procedure as being a possible alternative. I was not thinking in negative terms of what the consumer does not want; I was again thinking in positive terms of what the consumer does want. That does necessitate a representation on the authority.
The whole basis of the Bill we are talking about, the question of advertising, programme content, and the way in which various services are being dealt with, the interactive services and so on all this makes the interest of the consumer paramount. So, in my view—I can only put the view of myself and my noble friends as forcefully as I can—it goes miles above the whole general concept of whether or not you should label and set out the various interests that should be on the authority.
I regard this, as do my noble friends, as of sufficient importance to, ask your Lordships to support this amendment in the Division Lobby, if that be necessary. This does not in any way make it wrong to support any notion that local committees might be set up upon which there should be representation; it does not affect that issue. I do hope that in various parts of the Committee there will be support for this amendment.
Lord Winstanley: I am sorry to prolong this discussion, but, after all, this is Committee and is the proper time to settle one's anxieties. I am bound to say I am a little less happy than I was about my neutrality towards this amendment since I heard the reply of the noble Lord, Lord Elton, and the speech of the noble Lord, Lord Marsh. It seemed to me that both rather missed the point. I fully understand the noble Lord.

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Lord Marsh, being wholly preoccupied with trying to find a prescription which is something the viewers want; I well understand that, in his present position as head of a company which has not hitherto been able to find exactly what viewers want, or at least has not been able to find enough viewers to want it.
But the noble Lord, Lord Elton, made the same point. He talked about cable as being a means whereby entertainment is to be delivered to homes. We are not wholly concerned here with entertainment. When the noble Lord, Lord Elton, talked about these consumer bodies, which he said were sometimes combined together as an orchestrated body he was talking very much about the campaigning voluntary bodies, which are slightly different from the local or national bodies of one kind or another which are essentially bodies concerned with information.
All right, I accept the entertainment point, but there is a need, one would hope, in certain areas for cable to be used as an information service, now that it is through television that most people primarily obtain their information rather than from the press. In a highly complex society there is no doubt that cable can be a very powerful and useful weapon, with which to provide citizens with the information that they need in order to conduct their lives properly. The kinds of body which are concerned with disseminated information are Citizens' Advice Bureaux and the National Consumer Council, not so much from a campaigning point of view but from the point of view of alerting people to the necessity of being properly informed.
I am very anxious indeed that the Cable Authority does have people on it who are personally acquainted with the activities of bodies like the Citizens' Advice Bureaux so that they are personally aware of the gaps in the public knowledge, gaps which could indeed be filled by cable if the Cable Authority had on it people who were aware of those gaps. I think the noble Lord, Lord Elton, rather dismissed this as being a sort of consumer lobby, a campaigning outfit. I do not think it is like that at all.
Lord Elton: If I appeared to dismiss it, it was because of the enthusiasm with which I rose to the fly cast to me by the noble Lord, Lord Molloy. I leap up to intervene before he casts another fly over me, so that I do not mislead the noble Lord again. Everything I say about entertainment and this being a demand-led service stands, but I do not regard cable as being capable only of providing entertainment. Nor will the Home Secretary be concerned only with entertainment, although entertainment is one of the special interests which the noble Lord in this amendment seeks to have specifically represented on the authority. My right honourable friend will indeed be concerned with the interests of the consumer in the broader sense to which the noble Lord has referred, and I hope the noble Lord will accept my assurance on that. I think we have gone on a long time about this, and I personally want a decision.
Lord Mishcon: And so do I, but, before the noble Lord sits down in peace and quiet, perhaps I may say that there is nothing in this amendment about representation of the entertainment industry. That was
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a separate amendment. The noble Lord said it was contained in this amendment; I am sure he did not mean that.
Lord Elton: No, I meant to refer to what was the first half of the amendment, which was the last amendment, which we have now discarded; but it is germane.
Lord Molloy: Is the noble Lord prepared to look at this and perhaps come back on Report? It is a vital point. For example, there is the very telling point made by the noble Lord, Lord Marsh. If the consumers do not like it, it will go bust. That means the consumers pay for it. That must follow. Surely, then, if they pay for it they are entitled to some representation on the board.
5.20 p.m.
On Question, Whether the said amendment (No. 6B) shall be agreed to?
Their Lordships divided: Contents, 56; Not-Contents, 108.

DIVISION NO. 2

CONTENTS

Ardwick, L.

Listowel, E.

Birk, B.

Llewelyn-Davies of Hastoe, B.

Bishopston, L.

Lloyd of Hampstead, L.

Blyton, L.

Lockwood, B.

Briginshaw, L.

Longford, E.

Brockway, L.

McCarthy, L.

Bruce of Donington, L.

McIntosh of Haringey, L.

Caradon, L.

Mishcon, L.

Carmichael of Kelvingrove, L.

Molloy, L.

Cledwyn of Penrhos, L.

Oram, L.

Collison, L.

Peart, L.

Cooper of Stockton Heath, L.

Ponsonby of Shulbrede, L.

David, B. [Teller.]

Ross of Marnock, L.

Davies of Penrhys, L.

Shinwell, L.

Dean of Beswick, L.

Spens, L.

Donnet of Balgay, L.

Stallard, L.

Elwyn-Jones, L.

Stewart of Alvechurch, B.

Elystan-Morgan, L.

Stewart of Fulham, L.

Ewart-Biggs, B.

Stoddart of Swindon, L.

Fitt, L.

Stone, L.

Gaitskell, B.

Strabolgi, L.

Graham of Edmonton, L. [Teller.]

Taylor of Blackburn, L.

Taylor of Mansfield, L.

Hale, L.

Underhill, L.

Hatch of Lusby, L.

Wallace of Coslany, L.

Howie of Troon, L.

Wedderburn of Charlton, L.

Jeger, B.

Wells-Pestell, L.

Jenkins of Putney, L.

Wootton of Abinger, B.

John-Mackie, L.

NOT-CONTENTS

Airey of Abingdon, B.

Cox, B.

Alexander of Tunis, E.

Craigavon, V.

Alport, L.

Cullen of Ashbourne, L.

Ampthill, L.

Daventry, V.

Atholl, D.

Davidson, V.

Auckland, L.

De La Warr, E.

Avon, E.

Denham, L. [Teller.]

Belhaven and Stenton, L.

Dilhorne, V.

Belstead, L.

Drumalbyn, L.

Boothby, L.

Ebbisham, L.

Broxbourne, L.

Eccles, V.

Bruce-Gardyne, L.

Ellenborough, L.

Caithness, E.

Elton, L.

Campbell of Alloway, L.

Faithfull, B.

Campbell of Croy, L.

Fortescue, E.

Carnegy of Lour, B.

Fraser of Kilmorack, L.

Cockfield, L.

Gainford, L.

Cottesloe, L.

Gardner of Parkes, B.

45

Glanusk, L.

Munster, E.

Glenarthur, L.

Murton of Lindisfarne, L.

Glenkinglas, L.

Newall, L.

Gray of Contin, L.

Northchurch, B.

Gridley, L.

Nugent of Guildford, L.

Hailsham of Saint Marylebone, L.

Orkney, E.

Pender, L.

Halsbury, E.

Penrhyn, L.

Harmar-Nicholls, L.

Peyton of Yeovil, L.

Hayter, L.

Plummer of St. Marylebone, L.

Henley, L.

Hornsby-Smith, B.

Portland, D.

Howard of Henderskelfe, L.

Rodney, L.

Hylton-Foster, B.

St. Davids, V.

Killearn, L.

Saltoun, Ly.

Kimberley, E.

Sandford, L.

Lane-Fox, B.

Seebohm, L.

Lauderdale, E.

Selkirk, E.

Lawrence, L.

Sempill, Ly.

Long, V.

Shaughnessy, L.

Lucas of Chilworth, L.

Skelmersdale, L.

Lyell, L.

Strathcona and Mount Royal, L.

McAlpine of Moffat, L.

Macleod of Borve, B.

Sudeley, L.

Malmesbury, E.

Swinton, E. [Teller.]

Mancroft, L.

Terrington, L.

Margadale, L.

Teynham, L.

Marley, L.

Tranmire, L.

Marsh, L.

Trenchard, V.

Maude of Stratford-upon-Avon, L.

Trumpington, B.

Vaizey, L.

Merrivale, L.

Vaux of Harrowden, L.

Mersey, V.

Vickers, B.

Molson, L.

Vivian, L.

Montgomery of Alamein, V.

Westbury, L.

Morris, L.

Whitelaw, V.

Mottistone, L.

Wynford, L.

Mowbray and Stourton, L.

Young, B.

Resolved in the negative, and amendment disagreed to accordingly.
5.28 p.m.
Schedule 1 agreed to.
Clause 2 [Meaning of "cable programme service" etc.]:
[Amendment No. 7 not moved.]
Lord Elton Lord Elton moved Amendment No. 8:
Page 2, line 4, after ("both") insert ("either—(a)").
The noble Lord said: With your Lordships' leave, I shall speak also to Amendments Nos. 9, 10, 11, 12 and 13:
Amendment No. 9: Page 2, line 5, leave out ("either—(a)").
Amendment No. 10: Page 2, line 8, at beginning insert ("for reception, by whatever means.").
Amendment No. 11: Page 2, line 14, at end insert ("either—(a)").
Amendment No. 12: Page 2, line 15, leave out ("either—(a)").
Amendment No. 13: Page 2, line 18, at beginning insert ("for reception, by whatever means,").
Again with your Lordships' leave, I shall then seek to move Amendments Nos. 9 to 13 en bloc.
These small amendments make adjustments to the definitions in subsections (1) and (2) of Clause 2 to rationalise the licensing arrangements in respect of programme services which are intended for public presentation outside the home or, as the Bill terms them, "restricted services". This category of service is likely to account for only a very small part of the authority's work because it is essentially confined to the occasional coverage of certain sporting events by showing them on a large television screen in places
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such as cinemas. Up to now these presentations have been licensed by my right honourable and learned friend the Home Secretary. In recent years they have most often consisted of boxing championship fights which neither the BBC nor the ITV companies have wished to cover live.
This category of service is in most respects somewhat marginal to the rest of the Bill, but there is one important respect in which it involves the same considerations as the generality of cable services which serve the home. There is a possibility that it could, by providing live sports coverage to paying audiences, lead to a siphoning off of certain events from the public service networks to the detriment of the ordinary television viewer. For that reason, it seems right that the cable authority rather than the Home Secretary should exercise oversight of this kind of service so that it can impose the same requirements as for other cable services under Clause 13.
The Bill already goes some way towards achieving that, but, as drafted, subsection (2)(b), like subsection (2)(a), excludes programmes delivered to the screen by wireless telegraphy. In the past that would have been of no concern, but nowadays the final transmission to the point of reception is sometimes effected by wireless telegraphy rather than a cable link. This would mean that the licensing arrangements for the programmes would vary depending on the particular technology used. The amendments therefore provide that a "restricted service" shall be licensable by the cable authority whatever the technical means by which the signals are received. I beg to move.
5.31 p.m.
Lord Mishcon: I hope that the noble Lord the Minister will note my generosity and will find it possible to reciprocate. We do not intend to oppose any of these amendments.
On Question, amendment agreed to.
Lord Elton Lord Elton moved Amendments Nos. 9 to 13:
[Printed above.]
On Question, amendments agreed to.
Lord Howard of Henderskelfe Lord Howard of Henderskelfe moved Amendment No. 14:
Page 3, line 1, leave out subsection (6).
The noble Lord said: I apologise for not being in my place to move Amendment No. 7. I had not realised that it was possible to return to my place by a route shorter than the one I took. However, with your Lordships' indulgence, because I should not in any event have pressed Amendment No. 7 and because the two are closely tied together, I hope I shall be allowed to speak to both amendments.
This is a very complex matter. I am not a lawyer. I hope that I can explain the proposition in sufficiently simple terms for it to be understood by others who also are not lawyers. It relates to the future and, to some extent, to the present. There are well-understood definitions of what programme services are. In the past they have referred to sound, music and moving images. There are now, and will be in the future,

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certain programmes (which are referred to in the Telecommunications Bill but not in this Bill) which are neither.
I am speaking not only for the BBC; I am speaking for the mass of broadcasters and indeed I hope for the very high proportion of consumers—if that is not a dirty word—who will never receive cable. There are a number of programmes that the BBC puts out under its service Ceefax on the four unused lines of the 625 television signal which are neither moving images, nor sound, nor music. An example is not only Ceefax itself but the programmes for computers which are put out—though not many of your Lordships may realise this—at a late number of the Ceefax, page 796, or whatever it may be, which can then be downloaded by means of a special adaptor on to the microcomputers which are being bought in such very large numbers by what appears to be a highly numerate public, especially in the younger age group. Unless these programmes—which are covered by Clause 4(1)(c) of the Telecommunications Bill:
"signals serving for the impartation (whether as between persons and persons, things and things or persons and things) of any matter otherwise than in the form of sounds or visual images"—
are defined as broadcasting services, there are certain consequences in relation to cable.
I believe that the Telecommunications Bill gets it right. Clause 6 of that Bill states:
"Section 5(1) above is not contravened by the running by a broadcasting authority of a telecommunication system the sole purpose of which is the transmission, by wireless telegraphy, from a transmitting station for general reception of sounds, visual images or such signals as are mentioned in paragraph (c) of section 4(1) above".
I am sorry that this cross-referencing makes it all sound so complicated. If this development is foreseen in the Telecommunications Bill, the provision should also be included in this Bill.
The amendment would also bring cable teletext services within the scope of the Cable Authority's licensing powers. Teletext services again consist of visual images but they are motionless visual displays. They therefore fall within Clause 2(1) as visual images, but they do not fall under subsection (2) (the definition of a "licensable service") because subsection (6) says that "visual images" is to have a different meaning in subsection (2). A submission on this matter has been made to the Government, so that what may appear to many of your Lordships to be gobbledegook may make sense to some members of the Government.
In subsection (2) "visual images" means visual images which are such that sequences of them may be seen as moving pictures. That is, after all, the way that the cinema and television work—a whole succession of still visual images which, because of what happens in the eye, become moving images. According to the definition in the Bill the term must exclude the motionless visual displays of which a teletext service—and hence a service including, say, a computer programme—is comprised. That means that a teletext service (including Ceefax and Oracle) will be excluded from the licensing requirement and so will not be subject to the control of the Cable Authority. Consequently, a teletext service providing religious or political material of whatever nature
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would be permitted (subject only to the law of obscenity and of incitement to racial hatred), because Clauses 24 to 27, dealing with these matters, apply to cable programme services generally and not just to licensable services. Under the licensable services definition there would be no control however unbalanced or unfair might be the material.
I believe that the deletion of subsection (6) would prevent that by bringing teletext services within the control of the licensing system. Similarly, the amendment which unfortunately I was not in my place to move would have brought similar services within the confines of the copyright law—which is in itself a highly complex matter—in relation to cable services.
I am conscious that what I have said is as unclear as is much of what the future holds for cable services generally, but I hope that since with your Lordships' permission I have been able to associate together the two amendments, the noble Lord who will be answering the debate will be able to give me some kind of assurance that the point is taken on board and the two Bills are brought into line. It is precisely because the new services are so new that the terms of art which hitherto applied do not appear to cover these services and that it is necessary to widen the scope of such terms of art in order to include them in the future. I beg to move.
Lord Elton: I am sure that all of your Lordships will share my sympathy with the noble Lord for his long peregrination in the Chamber. I hope that the Committee will agree that since both he and I were to have spoken to Amendment No. 14 with Amendment No. 7, which is normal procedure, we may have your Lordships' indulgence to speak to Amendment No. 7 with Amendment No. 14—which is what the noble Lord has done. I need not take too long, though this is a technical matter. I hope that I can assure the noble Lord that the Government's intention is that the teletext services of the BBC and the IBA should come within the scope of the "must carry" rule and that no adjustments to the definitions in Clause 2 are necessary on that account, even to embrace the specialist computer signals to which the noble Lord. Lord Howard of Henderskelfe, referred.
This is a point which we shall be able to consider in more detail when we come to the noble Lord's amendments to the "must carry" provisions in Clause 12. If the drafting of that clause should prove to leave that in doubt, I shall seek further to allay the noble Lord's fears by improving it by amendment. For the present I hope that he will be prepared to accept my assurance that we intend that the Bill shall extend the "must carry" rule to both the teletext services.
The noble Lord has also expressed concern that cable text services should be subject to licensing by the Cable Authority; and I now launch into my own attempt at clarifying gobbledegook. In regard to the matters now concerning the noble Lord. Clause 2 works as follows. Subsection (1) defines the general category of cable programme services in terms which include text services. Subsection (2) separates out and defines the smaller category within that category of licensable services. It does so in terms which make it broadly comparable with broadcast television and radio. The reason for this distinction lies in the

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difference between the meaning borne by the words "visual images" when they appear in subsection (1) and the meaning borne when they appear in subsection (2). In subsection (1) they appear unqualified, and I can assure the noble Lord that therefore they bear the full meaning which is attributed to them in normal speech.
However, in subsection (2), as in subsection (4), they are qualified by the operation upon them of subsection (6). What subsection (6) does is to say that the term "visual images", where it appears in subsections (2) and (4) of the clause, but nowhere else, means moving pictures. Teletext is not made up of moving pictures and is thus excluded from the terms of subsection (2), and indeed subsection(4). It is therefore also excluded from the requirement that anyone providing it will need a licence to do so from the Cable Authority under the Bill when it is enacted.
The effect of these parts of the clause is that therefore only a licensable service—that is, a service broadly comparable with broadcast TV and radio—will require a licence from the Cable Authority. Other cable programme services, which are much closer to printed publishing than to television, will not be so required. That does not mean that they will be open to uncontrolled and perhaps licentious free-for-all. They will still he programme services under Clause 2(1), and they will therefore be subject to the general laws of the land, including, for instance, those of obscenity and defamation.
To require the Cable Authority to license all text services would not only impose an unwelcome burden on the authority—which is a consideration—but, I believe more importantly, not be right in principle. We do not propose to start licensing newspapers printed on paper, which would indeed be Orwellian but I think would not for a moment be supported by your Lordships, and for similar reasons we do not propose to start licensing newspapers printed on television screens.
I hope that the noble Lord will be content with both the assurances that I have given him on the "must carry" rule and the explanation I have given him on the operation of subsections (1), (2), (4) and, in particular, (6) of the clause, at least until he has read Hansard, which I think might be necessary in order to translate what doubtless seems to him to be the gobbledegook which I have uttered into the plain speech which he always has a right to expect from me.
Lord Howard of Henderskelfe: I think that the noble Lord has succeeded in expressing in extremely plain speech what is by no means in his mouth gobbledegook. But I am still not absolutely and completely happy about the point which I raised almost en passant in relation to copyright. We shall be reverting to it at a later stage of the Bill, and therefore I do not now propose to detain the Committee on it. But it seems to me that due to the interaction of the various clauses and subsections of the Bill with one another, the effect of not making the teletext services licensable services—and I agree that they are very much a newspaper of the air, and therefore should not be licensed in the ordinary way—may be, and I say only may be, to deprive them of that protection of copyright which is so necessary to the producers of intellectual property, which is what I think composers
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and writers now tend to be called in law, which seems rather sad, but there it is. However, resting on the assurance I have been given, and asking the Minister to look at the matter again between now and Report stage to see whether I am right or wrong in it, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 2, as amended, agreed to.
Clause 3 [Prohibition on unlicensed services]:
5.48 p.m.
Lady Saltoun Lady Saltoun moved Amendment No. 15:
Page 3, line 31, at end insert—
(";
(c) in Scotland, except by or with the consent of the Lord Advocate".)
The noble Lady said: To start with I had to scrutinise the Bill very carefully before I was quite sure that it applied to Scotland at all, because some English people who I call English nationalists still seem to think of Scotland, when they think of it at all, as a wild region beyond Northumberland and Cumberland, inhabited by sheep and by mad savages clad in tartan, who hunt a beast called the haggis, and whose life style might be described as by "Whisky Galore" out of "Brigadoon".
As your Scots Lordships know, that is not at all the case, and the country is in fact inhabited mainly by quite civilised people, who do quite ordinary things, lead quite ordinary lives, wear quite ordinary clothes, and who even watch television and are enthusiastically looking forward to the advent of cable. Their equivalent of the Director of Public Prosecutions is a colourful-sounding figure called the Lord Advocate, who sits on the Government Front Bench in your Lordships' Chamber. So, since this Bill seems to apply to Scotland, I imagine that the omission of Scotland from this clause can only be an oversight, which this amendment is designed to rectify. I beg to move.
Baroness Trumpington: I think of Scotland constantly. How could I not do so with such a charming and able representative proposing this amendment, not to mention the noble Lord, Lord Ross? The noble Lady has suggested that Clause 3 of the Bill as drafted might create an anomaly in respect of prosecutions for offences under Clause 3 committed in Scotland as against those committed in the case of the rest of the United Kingdom. While the Bill expressly provides for the appropriate Director of Public Prosecutions to give his consent to proceedings in England, Wales and Northern Ireland, Clause 3(3) makes no mention of Scotland.
I hope that I can allay the noble Lady's fears. There is no mention of the position in Scotland because none is necessary. The whole system for prosecutions in Scotland is, of course, different from that in the case of the rest of the United Kingdom. Where an offence is created by statute, prosecutions in Scotland can be brought only by the procurator fiscal on behalf of the Lord Advocate unless the statute expressly provides otherwise. In England, Wales and Northern Ireland the presumption works the other way: private prosecutions are possible unless excluded by the relevant statute.

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Since the Bill as drafted makes no special provision for Scotland in respect of offences under Clause 3, the general rule will apply. There will thus be no question of private prosecutions being brought in Scotland or elsewhere in the United Kingdom in respect of this offence. I hope that the noble Lady is reassured, and that she will withdraw her amendment.
Lady Saltoun: I should like to thank the noble Baroness for that explanation. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Howard of Henderskelfe Lord Howard of Henderskelfe moved Amendment No. 16:
Page 3, line 37, leave out from ("instrument") to ("a") in line 38 and insert ("but no such order shall be made unless a draft of the order has been laid before and approved by").
The noble Lord said: I do not think I need speak at length on this amendment. Simply, I think that the prohibition of unlicensed services, except with the leave of the Secretary of State, is absolute, The Secretary of State, however, may make exceptions by statutory instrument. Since the principle controls over cable operators will be imposed through the licensing system, it is in my view extremely important that those excused from the controls should be carefully scrutinised. My amendment is designed to subject the proposed exceptions to the rather stronger form of positive parliamentary scrutiny rather than negative parliamentary scrutiny. I beg to move.
Baroness Trumpington: Clause 3(5) of the Bill as presently drafted provided for an exceptions order made under Clause 3(1) to be subject to the negative resolution procedure in Parliament. Such an order might exempt from the need to hold a Cable Authority licence certain services or classes of service which would otherwise require a licence. This provision follows the precedent of Part IV of the Post Office Act 1969, which contains the Home Secretary's existing power to license cable programme services, and of Part IV of the Telecommunications Bill, which will replace Part IV of the 1969 Act until this Bill comes into force.
The noble Lord, the Lord Howard of Henderskelfe, has referred to the problems which might ensue if the relay by cable of DBS subscription services were exempt from the need to hold a Cable Authority licence. In such a case, it has been suggested that the operator of a communal aerial system might acquire a single set of apparatus for decoding the signals constituting the pay service, and distribute the service free of charge to his customers without payment to the provider of the service.
I would, however, refer your Lordships to the assurance which my noble friend Lord Elton gave on Second Reading of the Bill when he said that the Government were aware of a number of difficulties of which this is only one over the dishonest acquisition of pay television services, and were considering the need to bring forward additional provisions during the passage of the Bill. I can assure the noble Lord that in our consideration of such new provisions we shall not overlook this particular aspect of the problem. I
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cannot yet say whether we shall be in a position to bring forward proposals on Report stage. The issues are complex, but the Government accept that there is a real problem to be tackled, and tackled it shall be.
Lord Howard of Henderskelfe: Before the noble Baroness sits down, may I inquire, with the utmost respect, whether she is answering the amendment I have just moved or a new clause which I shall be moving somewhat later in the proceedings, relating to theft? I was merely referring to the positive and negative procedures which are so well known to Members of your Lordships' House. We know perfectly well that if the Government have to go through the positive procedure they have in fact to come to us and justify what they are doing. They do not have to do that if they go through the negative procedure. It was purely on this issue that I was speaking to your Lordships, not on something that is somewhat more complex.
Baroness Trumpington: If the noble Lord will allow me to continue, I think he will find that I shall eventually come to the bit to which he is referring. I hope that he will allow me to carry on. I think that what I will do is to read the bit concerned with the standard negative resolution procedure. In the view of the Government there is no need either to strengthen or weaken the standard negative resolution procedure in Clause 3(5). I hope that the noble Lord will accept that bald statement.
Lord Howard of Henderskelfe: It is so bald that it almost suits me.
Baroness Trumpington: If the noble Lord will allow me, I have found another piece. There is absolutely no point in not coming clean with your Lordships. I had expected, quite frankly—in fact, I had been informed—that Amendments Nos. 16 and 17 were to be taken together. That is why I have gone into all this rather long rigmarole that affects Amendment No. 17. I think I am not altogether to blame for having been bald. I shall now try to put a little hair on the baldness by adding another little piece.
The amendment of the noble Lord, Lord Howard of Henderskelfe, would mean that every order would have to be debated in both Houses even if there were no objections. That, I suggest, is a needless allocation of parliamentary time. I hope, therefore, that the noble Lord will not feel bound to impose this small but very real additional burden on either this House or another place. Heaven knows what I am going to do when I get to Amendment No. 17!
Lord Howard of Henderskelfe: I think that by now I cannot possibly press my amendment. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
5.59 p.m.
Lord Aylestone Lord Aylestone moved Amendment No. 17:
Page 3, line 38, leave out ("either House") and insert ("both Houses").
The noble Lord said: I should first like to assure the Committee that there has been no agreement between

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the noble Lord, Lord Howard, and myself to take these two amendments together. But, in fact, the subject matter is related. I can conceive of a position when the agreement of the Secretary of State and the chairman of the authority may not be in line with the wishes of some people who are concerned with that agreement. There could be a position whereby Members of both Houses of Parliament are interested in the subject and would want it ventilated. It would be possible to pray against the order in either House and I cannot agree that it would take a little parliamentary time. The matter should really not be regarded as a negative procedure Motion but as a positive procedure, whereby it comes before both Houses of Parliament for approval.
Baroness Trumpington: The Bill, as it stands, allows both Houses of Parliament to debate any exceptions order which the Home Secretary may make under Clause 3(1). The procedure provided for is the standard negative procedure whereby the debate takes place only if the order is objected to. It then takes place in either House or both, according to who objects to it.
The effect of the amendment in the names of the noble Lords, Lord Aylestone and Lord Winstanley, differs from that of the noble Lord, Lord Howard, in that it would mean only those amendments that were objected to would be debated, and that I welcome. It would, however, also mean that even if a vote were considered against the order in one House, the order would still be valid unless it were also voted against in the other House. Therefore we could have an order condemned by the Commons but validated by the approval of this House, or vice versa. I hope that the noble Lord will withdraw his amendment.
Lord Aylestone: I do not think that I can take the matter much further or we shall get the needle stuck on the record in the same place the whole time.
Lord Mishcon: May I merely say that the Government are extremely fortunate in having the noble Baroness, Lady Trumpington, to represent them; she can get away with anything.
Lord Aylestone: I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 3 agreed to.
Clause 4 [Power to license services]:
Baroness Trumpington Baroness Trumpington moved Amendment No. 18:
Page 3, line 39, leave out from ("Authority") to ("for") in line 40.
The noble Baroness said: This amendment is a technical one designed to improve the drafting of Clause 4. Clause 4(6) contains an exhaustive list of the types of conditions which the Cable Authority may wish to include in their licences. Clause 4(1) as presently drafted, however, overlaps with Clause 4(6) by giving the authority discretion to include in licences such conditions as they think fit. Since Clause 4(6) deals with all the conditions which the authority may include in licences, there is no need for Clause 4(1) to cover the same ground. The amendment, accordingly, removes from Clause 4(1) the reference to licence conditions. I beg to move.
Lord Mishcon: With great respect to the noble Baroness, this is not just a technical amendment. I will explain why, because I think the Committee, if I may say so, must know what it is doing if it is agreeing to this amendment. I do not intend to oppose it, but I want to add a qualification to it.
If you will look at the relevant clause, which is 4(1) on page 3 of the Bill—and I am looking as the amendment looks, three lines from the end—that was a power which many of us were apprehensive about because it said a licence could be granted by the licensing authority subject to such terms and conditions as the authority may think lit. There was therefore no limitation whatsoever; no question of whether or not that was a term that was imposed upon the authority; and the terms and conditions had to be subject to Part I of the Act, or had any other considerations: it was a broad authority that was given to impose any terms and conditions that the authority saw fit.
The noble Baroness, on behalf of the Government, in describing that as a technical amendment said, as I understood her, that this was unnecessary and the words were left out because of the wording on page 4 of Clause 6(a). If you look at Clause 6(a)——
Baroness Trumpington: No, I did not. I never mentioned Clause 6(a); I mentioned Clause 4(6) and Clause 4(1).
Lord Mishcon: I am so sorry, but when I said "on page 4" I was referring to subsection 6(a). The words are not that the licence may include such conditions and terms as the authority may think fit, but it says:
"such conditions as appear to the authority to be requisite or expedient having regard to the duties imposed on them".
That was a very much lesser power than would have been granted under Clause 4(1). If that is so, I do not think (and there was no question of anyone trying to mislead or anything of that kind) that it ought to be described as a purely techical amendment. I am the last person in the world to object to the taking away of an unlimited power, and I do not object to it. I was going to have something to say about the terrific power that the authority was given under Clause 4(1).
Having said that I do not object to it—and I have tried to point out to the Committee what we are doing if we remove this overall power—it becomes all the more necessary for us to be very careful about the terms, conditions and the codes that we put in this Bill, so that we know exactly what is the area in which we want the authority to impose terms and conditions. That indeed will be a matter to which amendments direct themselves subsequently before the Committee. Having uttered that caveat, I say that it is right for the Government to have withdrawn the overall unlimited power of the authority, but we ought to concentrate on what the nature of the terms and conditions should be, and what code should be laid down, and so on, hereafter.
Baroness Trumpington: I am extremely grateful to the noble Lord, Lord Mishcon, for saying that he is not going to oppose this amendment. I am not sure that I can go along with his suggestion that Clause 4(1) goes very wide. The point is that Clause 4(6)(a) gives the

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authority power to include all such conditions as are requisite or expedient for the purposes of this Part of the Bill. The problem was one of overlap; but I am grateful to the noble Lord for his charming remarks.
Lord Mishcon: The noble Baroness has, in a much nicer voice, repeated what I said.
On Question, amendment agreed to.
Earl De La Warr Earl De La Warr moved Amendment No. 19:
Page 4, line 10, leave out ("twelve") and insert ("fifteen").
The noble Earl said: Before I move this amendment, it would be right for me to repeat my reference to my interest in this industry as I said on Second Reading. I am deputy chairman of a cable consortium which is at present discussing with the Government the issue of a licence, and I have for very many years, as a result of being in another company, been very closely associated with the Cable Television Association. In order to save parliamentary time, perhaps I might have your Lordships' leave to say that just once tonight instead of every time I rise to speak.
The purpose of this amendment is to extend the period of the initial licence from 12 to 15 years. The White Paper in paragraph 72 referred to the inevitable gap between the granting of a licence and the start of the service. It said that this period:
"will not count against the twelve years".
But in the Bill there is no allowance made for this gap and I, for one, well understand why not. So far as I can see, one cannot in practice post-date a licence if only because it must actually be in force before a single subscriber can be connected even for marketing or technical purposes, and I should have thought that it would be hard even to start digging up the road. Nevertheless, there is a serious omission here and it is something that we must ask the Government to tackle and to tell us how they are going to deal with it. I have already put forward my proposal and I shall enlarge upon it.
I put it to your Lordships that the only sensible way in which to deal with this is to have no complex formula—I could think of many formulae that would be extremely difficult to apply—but simply to add a fixed period on to the 12 years. If that be agreed—and of course I know that it will not be agreed by many—what we have to do is to decide the length of the extra period.
I expect some of your Lordships will have heard that in the United States it is the norm for an area—indeed, a large one—to be cabled in about one year. But in that country, with very few exceptions, something well in excess of 75 per cent. and very often 100 per cent. of the cable is carried above ground on pole routes and the connections to the subscribers are just from the poles to the roofs of the houses. How different it is going to be here when every yard of cable has to go underground and every street dug up, sometimes on both sides, to get it there!
I should like to quote an example. I was closely involved some time ago in the late 1960s with the cabling of the City of Leicester—a city of over 100,000 houses and the last of the big towns to be speculatively cabled by a relay operator. I have checked the statistics
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very carefully with some of the people who were working for me then, because I regard my memory as liable to be a bit rusty on this point. As a result I can assure your Lordships that it was getting on for two years before we had completed the main trunk routes which, in the case of Leicester, we put underground and that was why it took that time, and we were still putting up feeders after six years. I have no hesitation in suggesting that three years is a reasonable and by no means a generous time to allow for what is referred to as "installation". It is for that reason that I strongly urge the Government to accept 15 years as the period for the initial licence to run. I beg to move.
6.14 p.m.
Lord Elton: I take grateful note of my noble friend's declaration of interest. I say "grateful" because it is good to know not merely that he has an interest which he has declared, but that he has one which makes him so very conversant with the matters with which we are dealing. He has set out very cogently views which I know will be strongly supported by the Cable Television Association. Even at this early stage of the Bill this is not unfamiliar territory. The Hunt Report which was published in October 1982 said that the cable franchises should run for eight years in the normal case, but for 10 years in the first instance in view of the large initial investment and the need for the business to be built up from scratch. The Cable Television Association argued very strongly then that that was insufficient and the Government took their views carefully into account in reaching their own conclusions which were announced in another place on 2nd December 1982 and elaborated in the White Paper of last April.
The Hunt Report did not draw a clear distinction between systems and services, but the Government decided on reflection that it was necessary to maintain separate though interrelated arrangements for the telecommunications and Cable Authority licences. The telecommunications licensing system was designed to encourage patterns of development consistent with both current and future technological development and the telecommunications licence was, therefore, fixed at 12 years for a conventional tree and branch system; but for 20 years for the more forward looking switched star system. Congruously, or congruently, with this (I am not sure which) the Cable Authority licence was set at eight years in the normal case, but 12 years for the initial period rather than the 10 originally proposed. That means, as I understand it, that the first Cable Authority licence will expire roughly simultaneously with the first tree and branch telecom licence and that that second Cable Authority licence will expire at more or less the same time as the first Switched Star Telecom licence. That was the basis upon which the pilot project applications were invited and no fewer than 37 consortia were willing to apply for licences on it.
The Government recognise that those who are to invest in cable wish their licences to run for as long as possible. The question is: what period is the right one in the public interest? My noble friend has cogently advanced that it ought to be longer than we proposed. Cable operators will in practice have a local monopoly. It is clearly undesirable that that monopoly

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should run, unchecked, for too many years. The Cable Authority will have the possibility of some intermediate sanctions, but the formal review of the licence will constitute its big gun and it gives it its most effective oversight of companies' activities. If that review is too far distant, its effectiveness will be diminished. If it is too close, companies will not be prepared to invest in the medium. Those are the opposing tensions and we believe that the point of equipoise is properly fixed at 12 years and not 15 years.
However, there are two points that I should like to make and I hope that my noble friend will find them helpful. First, the licence period will not start to run until an operator starts to provide programme services. So while he or his telecommunications counterpart is merely doing the initial installation, the clock will not have started. He will, of course, want to have a firm promise of a licence before he invests any money, but the licence will not need to come into operation until the day that services start. Secondly, we entirely accept that cable operators will have to work hard to build up a business, especially since they may wish to start providing public services before everyone is within range of the cable. That is a factor which we have specifically taken into account in allowing four years longer for the initial period than for the subsequent licences. I am afraid that I cannot, however, agree to meet my noble friends on the question of longer licences still. The Government believe that they would be bad for the consumer, and in the long run that must mean that they would be bad for cable, too.
Lord Mottistone: What my noble friend has said is most interesting: that the 12 years would start only from the moment that programmes could be provided, and therefore there would not be a start point on the licence until one actually got going. Does the Bill say that and, if so, where?
Lord Mishcon: I should like to add a query from these Benches to that raised by the noble Lord, Lord Mottistone. In my reading of the Bill—and I am sure that it is my fault—I could find nothing which made the start of the licence time run from the start of the programmes. I though that it ran from the start of the grant of the licence. It may be that I am completely wrong. If I happen to be right, then of course the noble Lord's point about the question of time becomes a very essential element in our future discussions, because if a licensee takes an inordinate amount of time in which to lay his cable and an inordinate amount of time to start his programmes, it may make matters very difficult.
Lord Elton: I am obliged to the noble Lord, Lord Mishcon, for the length of his intervention. I think that the answer to both my noble friend and the noble Lord is that one does not need a licence until one undertakes a licensable activity, and in this case the licensable activity is sending out the programmes to the person to receive at the other end of the wire. In the Bill if as a commercial activity, one is sending out practice signals or merely digging holes—as the noble Lord put it—the licence is not necessary. I trust that the noble
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Lord will be reassured by what I tell him. I think that the noble Lord, Lord Ardwick, wants to come back and say that he is not.
Lord Ardwick: I am just wondering what will happen if an area is half cabled and if programmes go out to half the area. Does the licence begin then?
Lord Elton: Yes, subject to correction—but I cannot see why correction should be needed. If you start sending out programmes to a small audience in the expectation that your audience will increase, that is clearly described in the Bill as a licensed activity. It will be a matter for commercial judgment by the operator as to what point he should start the ball rolling, and at what point the expenses of being licensed will be balanced by the revenue received from sending out programmes.
Lord Mishcon: I do not intend to take time on this point, but it is important; perhaps the noble Lord would be good enough between now and the Report stage to consider with his advisers whether this aspect is sufficiently clear from the Bill, both as guidance to the licensing authority (that is, the Cable Authority) as well as to licensees. I follow his point that Clause 3(4) says that:
"For the purposes of subsection (3) above the relevant maximun period is—(a) twelve years in the case of a licence for the provision of a subscribed diffusion service in an area".
I suppose, as the Minister says, that could be interpreted to mean that one gets the licence only for the diffusion of the service. Nevertheless, it may be necessary to make sure that the words are clear. It will become a much more interesting debate when we listen to the terms and conditions of the grant of the licence because, as I said, the time element may be a very vital factor in the cable-laying and the starting of the programmes.
Lord Mottistone: Before my noble friend replies, I should like to endorse in principle what the noble Lord, Lord Mishcon, is saying. It seems to me that both here and in the answers to the noble Lord, Lord Howard, on Amendment No. 7—which was rather surprisingly spoken to although it was not moved at the correct point—the Government are taking for granted that the interlink between the Telecommunications Bill and this Bill does not need to be a very strong one. I think it does. It is very unfortunate—and we said this on Second Reading—that there are no cross-references at appropriate stages to the Telecommunications Bill to make it clear to the users of this Bill just exactly where that fits in. In answer to my point as well as that raised by the noble Lord, Lord Mishcon, my noble friend was saying that it is all right because the other period is in the Telecommunications Bill. It is very confusing.
Perhaps between now and the Report stage the Government could undertake to bring forward some sort of comprehensive amendment which provides cross-references—perhaps a schedule of cross-references to the Telecommunications Bill—because I think that when they tackle the matter seriously, the two departments of state concerned will find that there are more gaps than they think there are and that in preparing such a schedule they will have to tighten up

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loopholes that they do not realise they have. That is very important.
Lord Elton: I have stated what we intend shall happen. Of course, noble Lords are quite right to ask me to make sure that that is what will happen and to be familiar with the means by which it will happen. I think that the anxiety of the noble Lord, Lord Mishcon, will reduce itself to this: will the authority be able to say that they will give a licence to company X when they are ready for it, or in six months' time, and then start the licence running at that point? In other words, is that an undertaking that they can give? As far as I am advised, it is an undertaking that they can give. Therefore, I see no difficulty there.
I wonder whether my noble friend Lord De La Warr is not distinguishing in his mind between cable operators and cable providers, because there is a distinction. One is concerned with licensing in this Bill, and the other with licensing in the Telecommunications Bill. It may be that he seeks a link between the starting of digging the hole by the provider and the licensing of the activity of the user on the assumption that they are always one and the same person. That was not an assumption that I was making. It may further arise from that that my noble friend Lord Mottistone—and I do not know why I am putting these terrible ideas into his head—may wish to press me further about linking legislation between the two at a later stage. I can certainly undertake to look at that, though I cannot begin to undertake to say what the result of that look will be.
Earl De La Warr: I can assure my noble friend that I was accepting a distinction between these two licences, though both on Second Reading and in the debate on the White Paper I made it clear that this is a distinction that I do not like. Indeed, this matter will be raised a good deal later at this stage in order to try to link the two together. We understand very well the difficulty in which the Government found themselves. I know a great deal about the arguments that have raged in the past three years between these two great departments of state. Let us say that I understand that it was convenient that the programme side should be part of the Home Office and that the telecommunications side should be part of the Department of Industry. So I do not have it wrong there.
Having said that, I still hope that my noble friend will be able to say that, ideally, he can produce something which links these two licences together, but in any case something that takes account of what was said in the White Paper (and I quoted it very precisely) that this period:
"will not count against the twelve years".
He has given us some assurances on this aspect. I should very much like to see these assurances written into the Bill. I do not ask him to give any firm assurances tonight, but I should like him to say that he will take this away and look at it.
Lord Elton: What I cannot say is that I shall take my noble friend's amendment away and look at it. What I can take away and look at is the validation that I seek
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to give of the not insignificant reassurance that I have given him that the period about which he expressed the greatest anxiety—the period of installation and setting up—shall not count against the currency of the licence. If it takes three years, in his terminology he has his 15 years because he says that it is three years before the clock starts running. On reflection, if he takes that away and thinks about it, he may be reassured about that.
As to the validation of that and how it will work, I will take advice, as I will look at the linking with the Telecommunications Bill, but I do not hold out a great deal of hope about that.
Earl De La Warr: I am grateful to my noble friend for that, I hope that, even by implication, I did not ask him to think again about the three years. I asked him to think again about the suggestions made by my noble friend Lord Mottistone, and to think how he could satisfy us all as to a proper allowance being made for the installation period. I should like to think that he has said he will think about these things, and for that reason I now beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
6.32 p.m.
The Duke of Portland The Duke of Portland moved Amendment No. 20:
Page 4, line 19, after ("varied") insert ("in respect of such matters as are specified in the licence as being subject to variation").
The noble Duke said: The risk that the authority might vary the licence in such a manner as to make it unprofitable will not encourage applicants of high standing. If the authority has the power to vary the terms of the licence in such a manner as to make it unprofitable, applicants will be discouraged from making as large an investment as they would if they knew that the authority could vary the licence only in certain clearly defined eventualities.
Lord Elton: My noble friend the Duke of Portland does not wish the Cable Authority to have an unfettered power to vary licences once they have been issued. He suggests this might create unhelpful uncertainty for investors. I think he will agree that there are a number of circumstances in which the authority may perfectly properly wish to vary licences. In some cases the authority may wish to impose greater restrictions on licensees: but, equally, in others, it may wish to respond to a request from the licensee to relax those restrictions.
I do not believe we can expect either the Cable Authority or the licensees to foresee all the sets of circumstances in which either or both may need to vary licences during the currency of the licence. After all, the initial licences will run for 12 years, and in a new industry all parties would have to be clairvoyant to foresee every eventuality from the outset. If the amendment were made, therefore, I am afraid that the authority would be constrained to write into the licences very wide powers indeed to vary them in any circumstances they saw fit. That would bring us back to almost the same place as we are now, before the amendment was drafted.
But some licences would be beyond the reach of even that device. I doubt whether those licensees

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would bless the provision in the noble Duke's amendment. I remind your Lordships that on the day that the authority is created it will assume responsibility for a number of licences already issued by the Home Secretary to existing operators, and for pilot projects. Not all the conditions in those licences will necessarily match the new framework which we and another place will by then have established by virtue of this Bill. So the authority will need the power to vary those licences to bring them into line with the obligations which flow from the legislation we are now producing. This is perhaps a rather special case, but it is a good example of one of the many circumstances in which the authority may quite reasonably need, or be quite reasonably requested by the licensee, to vary a licence after it has been issued.
The authority will, of course, under Clause 4(8) have a general duty to use the licensing powers in the manner which it judges best calculated to promote the provision of prescribed diffusion services. I doubt that the authority will use the powers to vary licences in an unhelpful way, but I hope that my noble friend agrees with me that it should be free to vary them in a helpful way as well. Therefore, I hope he will think a little longer about his amendment.
Lord Peyton of Yeovil: May I shortly observe that in these days there is no guarantee of an authority behaving in a helpful manner. I had no intention of intervening until the last few sentences uttered by my noble friend the Minister. I hope he will consider this again carefully, because there is something objectionable about the terms of a licence or a contract being altered unilaterally after they have once been settled, without any warning at all. Unless I misunderstood my noble friend I conclude that he is assuming that the authority, being given the general duties that it is being given, will perform those duties in a helpful manner. I believe that such an assumption is optimistic in the light of general experience today. I therefore hope that my noble friend will again consider this point to see whether some sort of provision should not be made that additional restrictions should not be inserted into the licence unless, at the time of the granting of the licence, some kind of warning was given that they may be so introduced.
Lord Mishcon: I wonder whether I may assist on this; it is my wish to do so. I can well understand the arguments in this matter, as I am sure the noble Lord the Minister can with his usual breadth of mind. The first argument is that if one ties the hands of the authority it can only vary a licence where it has warned, on the grant of a licence, that it might do so in respect of any term or condition. That has the grave disadvantage that nobody can foresee what situations may arise which may cause the variation. On the other hand, there is the case against a variation which says that the difficulty is that there is, as it were, a contract: the licensee, on the basis of the terms and conditions, has decided to invest his money in the project, and it is unfair if he receives a material variation shot at him out of the blue. Those are the two arguments.
I respectfully suggest to the Minister that the way in between may be a consideration of the fact that a clause should be inserted in the Bill which says that if
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there is to be an intended variation of the licence the licensee has the right to make representations, on proper notice being given to him, as to the intention to vary. Those representations have to be considered by the authority before the variation takes place. Then it seems to me that one has a just situation.
Lord Elton: I am grateful to the noble Lord, Lord Mishcon, for his intervention. It was not my intention to suggest that the only variations that might be proposed by the authority would inevitably be helpful. I am not only a member of the Government: I am also a member of the public, and my experience is similar to that of my noble friend in this matter.
The noble Lord has suggested—I am not sure whether he intended to suggest this—that the alternatives are that there shall be no power to vary or that there shall be a power to vary helpfully to the licensee or that there shall be power to vary helpfully to the other interests which need protection and about some of which we have talked at length this afternoon.
Plainly we could not have a lopsided licence with a sort of ratchet effect, that "This licence may not be altered in any sense except for the benefit of the licensee"; nor could we have one with the opposite ratchet system built into it, that it could be altered only to the disadvantage of the licensee, and to increase the restrictions. So we are left with the question of whether or not the amendment is right to posit that at the very beginning of the licence period, 12 years away from its renewal, the licensing authority is going to be in a position to say, "We will not ever vary this licence except in the following respects".
I do not know about your Lordships' perspicacity and ability to foresee the future, but if I were put into the position of granting licences for that purpose, and if I had a statutory duty to promote the whole exercise, I should be very anxious indeed not to prevent myself either assisting the cable movement, which was my duty, or, in some respects, though not against the interests of cable, restricting the activities of the licensee, because it is conceivable that some of them may offend against canons not expressed in law at present. I would simply have to give myself the chance of doing what proved to be necessary when the time came and which I had not foreseen when drawing up the licence.
Given that, I would have to give myself a very wide remit indeed and say, "This licence shall not be variable unless circumstances arise which make it necessary to vary it". That seems to be the unavoidable implication of what my noble friend has put in his amendment. If there is another approach and another way in which he wants to talk about these various devices proposed by the noble Lord, Lord Mishcon—for example, that a variation may be imposed on a licensee only after a given period of notice or with the possibility of appeal or in the light of specific considerations—they do not appear on the face of the amendment and I should be reluctant to commit myself to a response to those, because they were not what the noble Duke was asking your Lordships to do.
I have to say that what your Lordships are being asked to do can have only one of two possible effects.

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One would be greatly to restrict the ability of the industry to develop in the light of changing circumstances over a decade; and the other would be to force the licensing authority to write such wide caveats into the original licence that the licensee would have no more security than is now the case under present legislation. I wonder whether the noble Duke would be kind enough to look at what he has proposed and consider it further.
Lord Winstanley: Before the noble Duke responds to that invitation, I wonder whether I could ask the noble Lord one question. If we are to accept his advice that the power to vary the conditions of a licence should remain unfettered, and if we are also to accept, as he has advised us, that it would be wrong for the licence to specify those matters which could be varied, are we not to wonder whether or not there should be some control over certain things which could not be varied? For example, there could be circumstances in which the authority might decide to vary the area. They might decide that the original area was wrong, or perhaps they want to let another franchise to another cable authority to do another area, and therefore they might possibly wish to vary the geography of the area in which the licence-holder operates.
A variation of that kind would be of very profound significance, I would have thought, to the licence-holder. I am just wondering whether there are not certain matters concerning which there should be some specific statement in the Bill that those matters cannot be varied, while leaving the others clear in the way that the noble Lord has suggested.
Lord Elton: That is an interesting proposition, but we are faced with exactly the dilemma we were faced with earlier in the example that the noble Lord has given us. In spite of the fact that my noble friend Lord Peyton takes a somewhat pessimistic view of the likely operation of the individuals on the authority once they have become an authority, it may well be that a successful franchise company may go to the authority and say, "We should like to extend our franchise from Leicester to Wigston Magna", for instance. If they were to do that and the noble Lord had the Bill restricted as he has suggested, they would not be at liberty to do it; so I think we need to think this through a little further when amendments are put forward.
Lord Peyton of Yemil: My noble friend has misconstrued me. It was not my intention for one moment to suggest that the persons making up this authority would be unpleasant or oppressive people. I was merely inviting my noble friend at least not to ignore the possibility, which can be vindicated from experience, that authorities can behave in an oppressive or unfair fashion, and that some provision must be made against their behaving in an arbitrary fashion. Although obviously the Government have always the very best of intentions, I wonder whether the provisos and safeguards in subsection (8) are really sufficient to deal with the matter. I cannot speak for the noble Duke, but all I was saying was that I hoped the Minister would be content to say that he would look again to see that a licensee is reasonably protected
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against an arbitrary decision by the authority. It would be a very strange authority if in the course of its existence it did not from time to time stray into arbitrary or oppressive decisions.
Lord Elton: I freely withdraw any unintended imputation to my noble friend for overstating his views on the nature of authorities. I am afraid I tend sometimes to look for colour in my speech by over-emphasis. I would not wish to associate him in that misdirection, and I quite accept that he was not impugning any class of people or any individuals.
The noble Lord, Lord Peyton, has asked me to consider whether the individual needs protection against an arbitrary decision—an arbitrary and possibly unfair decision—by the licensing authority. I actually believe that the provisions in Subsection (8) are a sufficient defence against that, but I would not be so churlish as to refuse to look at something as fundamental as that, because that also would be open to misinterpretation and it might appear that I thought the authority ought to be able to ride roughshod over its licensees.
I do not wish the noble Duke thereby to feel that it is not necessary for him to look further at this, and that the Government are automatically going to come forward with a panoply of protection. I merely say that I will certainly look again at the general principle; but if I have not succeeded in reassuring the noble Duke I am sure he will come forward with further devices to achieve what he seeks.
The Duke of Portland: I thank the Minister for what he said, and I hope that we shall be able to return to the subject later. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Baroness Trumpington Baroness Trumpington moved Amendment No. 21:
Page 4, line 28, after ("for") insert ("the provision of").
The noble Baroness said: This is a technical amendment designed to remedy a minor defect in the drafting of the Bill. Elsewhere—for example, in subsection (4)(a) of Clause 4—the Bill refers to,
"a licence for the provision of a prescribed diffusion service".
Subsection (6)(a), however, omits the words "the provision of". The amendment brings the drafting of subsection (6)(a) of Clause 4 into line with the rest of the Bill. I beg to move.
Lord Mishcon: I agree that this is a technical amendment and I agree that the noble Baroness is dealing with the right amendment. I do not intend to oppose it.
On Question, amendment agreed to.
6.50 p.m.
Lord Mottistone Lord Mottistone moved Amendment No. 22:
Page 5, line 15, at end insert—
("( ) The payments required to be rendered to the Authority under subsection (6)(b) above shall be such as are in the opinion of the Authority a fair reflection of the costs of the Authority in the discharge of its functions.").
The noble Lord said: When we were talking earlier about Amendment No. 18, the noble Lord, Lord

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Mishcon, said words to the effect that, in reducing the powers in the Government's amendment to Clause 4(1), we had to observe carefully the terms and conditions under which the authority would be operating; and, indeed, we have been discussing the extent of the powers of the authority in Amendment No. 20. This is not dissimilar, in that subsection (6)(b), which covers payment for the licence, does not at any point say what criteria the authority will use for deciding on the payment.
It could be that the authority might say to themselves, "We are going to charge more for a licence to someone who is putting in a cable in a very well populated and wealthy area, like the City of Westminster, which will do frightfully well. We will charge them more than the poor chaps who put in a cable in a poor area like the Isle of Wight. So we will charge them less and will charge the Westminster chaps more." It does not seem to us to be fair that there could be a potentiality for that variation, and we think that the criteria for the payment should be in the terms of my amendment, and that they should be,
"a fair reflection of the costs of the Authority in the discharge of its functions".
Surely, that is what the licence should be paying for and it is perfectly fair that it should do so. We think that because of the open-endedness of sub-section (6)(b), it is necessary to have another subsection at the end of Clause 4 to underpin what subsection (6)(b) can fairly be applied to. I beg to move.
Lord Elton: I am grateful to my noble friend for his explanation of his amendment. Unlike my noble friend Lord De La Warr, he did not declare an interest, though, in view of the fact that he lives on the Isle of Wight, I slightly felt he might have done. I appreciate the feeling behind this amendment, the general object of which is to protect those to whom the Cable Authority issue licences from being called upon to pay more for them than is reasonable.
Under Clause 18 of the Bill, the Cable Authority are required to conduct their affairs so as to ensure at the earliest possible date that their revenues are at least sufficient to enable them to meet their obligations and to discharge the functions conferred on them. For that purpose, they will have to look entirely to the fees which subsection (6)(b) of Clause 4 empowers them to charge on the grant of the licences which they issue to the persons who are providing cable programme services, and periodically during the term of their currency thereafter. The subsection leaves it to the authority to decide how much they need to charge their licensees in order to be able to maintain their operations; that is, to enable them to cover their general running expenses and the expenses directly attributable to the grant of individual licences.
The amendment would require the authority to satisfy themselves that their licence fees were such as fairly to reflect their costs in the discharge of their functions. We believe that this would, in any case, be the authority's guiding consideration in setting their fees, having regard to their general financial obligation under Clause 18, and that there is no need to provide specifically on the point. The authority would derive no benefit for themselves by securing from their
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licensees more than they need to carry out their functions. I need not dwell on the provision in Clause 18(2), whereby they would lose any surplus as soon as it was generated, because that is not, I understand, my noble friend's principal concern.
He may be over-anxious on the other leg of his approach. The authority not only are not in the business of raising money for the sake of it. They are not, I hope, to be in the business of using licence fees to cross-subsidise between rich companies and poor ones, as my noble friend suggested. We think that that is an area about which it would be undesirable to be absolutely rigid in the Bill. It may well prove, in practice, both reasonable and beneficial that larger and more lucrative areas should bear a higher proportion of the authority's costs than smaller, less prosperous ones, and I do not know how that grabs my noble friend. I am not suggesting that that would amount to cross-subsidisation; but, on the other hand, I do not think it would be sensible to try to relate each licence fee to the precise amount of time and effort expended by the authority on the particular operator in question. That could be quite an elaborate bureaucratic task.
The Government therefore believe that Clause 4(6) of the Bill ensures that the aggregate amount of licence fees will not exceed the aggregate amount of their operating costs. They also believe that the labour of analysing the precise cost to the authority of each licensee could be considerable and could generate additional costs which all licensees would, in turn, have to share. Some disproportion is therefore, we think, unavoidable, and the Bill is drawn as it is to permit that necessary flexibility; not to permit the authority to rob Peter in order to pay Paul. I hope that my noble friend will permit us to retain that flexibility which we believe to be essential.
Lord Campbell of Alloway: Before my noble friend sits down, may I ask him whether he agrees that perhaps this carte blanche to charge virtually anything is going a bit wide? Is he prepared to consider—only to consider—some sort of scale of fees by some yardstick? Is he also prepared to consider—I emphasise that—building into Clause 18(2) a negative resolution procedure, merely to afford some protection against abuse?
Lord Elton: I am not certain of the intention in the phrase carte blanche, which my noble friend Lord Campbell of Alloway used. There is, as he will see from reading Clause 18, no carte blanche as to the total revenue which the authority are to raise. So what my noble friend is suggesting—and quite possibly what both my noble friends are suggesting—is that the authority may be setting out to charge swingeing fees to a company in one area and minimal fees to another. That is not the intention of the Bill. I should not have thought that a negative procedure order would be the right way of tackling this. But I should just like my noble friend Lord Mottistone and his colleagues to elaborate on the way they see this happening, so that I can reply properly to the risk as they see it.
Lord Mottistone: My noble friend the Minister said that he would not like to see rigidity in the amendment. I suggest that the amendment is not rigid.

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It is in very broad terms. The way in which it would function is that the authority would have to do what the amendment says and the payments would have to be a fair reflection of the costs. It would not be a precise reflection of the costs, and they could vary between the two.
I know that my noble friend Lord De La Warr wants to speak, but I hope he will forgive me if I say that I was very much more taken than my noble friend the Minister by the suggestion of the noble Lord, Lord Mishcon, on Amendment No. 20, that what is lacking is a right of appeal. One would not want to put in an amendment such as this that it would be possible for licensees to appeal against a decision of the authority on all sorts of these areas, whether it be in relation to a variation of a licence or in relation to the fees charged. But if they thought that the authority were not being fair—and I accept the Minister's argument that the Government want the authority to be fair and that Clause 18 is intended to see that they are fair—and if there was room for some kind of' appeal, then it would be possible for us not to press this amendment or to go to a lot of trouble to produce something similar on Report. Either you have to have something which disciplines the authority more than Clause 4 is doing at the moment or you have to have a right of appeal.
Earl De La Warr: A number of useful suggestions have been made but the discussion has centred around the possible dangers of cross-subsidisation, which is not what we want, and has not focused sufficiently upon what we are trying to get across: that the authority should make up its own mind about how it makes the charges but should seek to go no further than to meet its costs out of the total of the charges. Nowhere in the Bill, either in this clause or in Clause 18, are we given any assurance that the charges in the aggregate will not turn out to be a global form of levy on the industry, to the profit of the Government. The last subsection in Clause 18 refers to any excess of the revenues of the authority going into the Consolidated Fund. To me that is not a safeguard. It is a threat.
Lord Marsh: What worries a number of us is that there is no kind of financial discipline on the authority. If it collects more money than it needs, that money is to be taken from it. But the capacity of bodies of this kind to spend money is almost limitless. If the authority is to have what appears to be a complete blank cheque to make whatever kind of demands it can justify, by reason of the fact that it is able to spend that money, that will be very dangerous indeed. I join those noble Lords who say that the suggestion made by the noble Lord, Lord Mishcon, about some kind of right of appeal and challenge would be fair and helpful.
Lord Ardwick: I am not quite clear what will be the source of a continuing income for the authority. It will have a permanent staff and will require a permanent income. Is the authority to live wholly upon the fees which it receives from fresh applications? Those must dry up eventually.
Lord Elton: May I try to deal seriatim with those points? My noble friend Lord De La Warr has asked me to redirect my attention to the question of the aggregate fee. Perhaps I can briefly refresh your Lordships' memory of Clause 18, which is where such reassurance (I am using the term that no doubt my noble friend would use) as there is in the Bill resides. It is fairly substantial. Subsection (1) puts on the authority the duty of getting its books balanced as quickly as possible. Subsection (2) provides that:
"Any excess of the Authority's revenues for any financial year over the sums required by them for that year for meeting their obligations and discharging their functions under this Part shall be applied by the Authority in such manner as the Secretary of State, with the approval of the Treasury and after consultation with the chairman (or in his absence the deputy chairman) of the Authority, may direct."
Subsection (3) goes on to make explicit that:
"A direction under subsection (2) above may require the whole or any part of any excess of the revenues of the Authority to be paid into the Consolidated Fund.".
The noble Lord, Lord Marsh, has put it into my mind (I think it was he, although I do not wish to malign him) that a future Financial Secretary to the Treasury might decide that a good way of beefing up the Consolidated Fund would be for the Cable Authority to overcharge licensees annually (if I may say so to the noble Lord, Lord Ardwick) and for that to become well established—something rather akin to simony in the Church in earlier days. That is certainly not our intention.
If it is thought that the Bill is defective in that respect (the noble Lord, Lord Marsh, indicates that that is not the area of his anxiety, but I detect that it is the area of anxiety of my noble friend, who says that he does not find any door opening into the taxman's office a very reassuring sight when he is trying to keep money in another place, and I take his point) I should have thought that probably it is in that clause of the Bill that my noble friend might seek to establish the reassurance he wants. Whether this should be done by way of amendment or by discussion at clause stand part I am not certain. However, I take the point. The Government intend, and have provided in, I believe, a watertight manner, that the authority can get only as much money from the licensees as is necessary for its function. If it gets more than that, it stands, first, to be directed as to how to spend it and, secondly, quite possibly to be directed to spend it by paying it over to the Consolidated Fund. This is not a prospect that would endear the chairman or members of the authority to their public or to the subscribers. Therefore it is not a likely prospect.
The noble Lord, Lord Marsh, raised a further matter, that of financial discipline. I take it that what he is saying is that it is not enough just for the authority to go on recruiting people to run a wonderful service and paying them. They ought to be required to cut their cloth according to a fairly small coat—only the biggest coat necessary, to switch metaphors, to cover the bodies of those whom they are licensing. That is another issue which does not necessarily arise on this amendment. If it did, I am not sure that it could be dealt with on appeal by an individual licensee.
Lord Marsh: Before the noble Lord sits down, my point is very simple. My fear is not that the authority

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will build up surpluses which will then be transferred to the Treasury. My fear is that with an open-ended ability such as this to raise revenue from the contracting companies, there is no discipline upon them whatsoever, and no sanction which can be applied, to ensure that they run themselves efficiently.
Lord Mishcon: There is a further point. Unless I am very much mistaken, this point has been missed in the discussion so far. The cable operator ought to have the opportunity to know what his commitments are before he agrees to apply and before he accepts the licence. This is a matter of equity. I can well understand that reasonable fees are in the mind of the noble Lord the Minister because he is a reasonable person, but the fact remains that if an annual fee can be charged over a period of 12 years and if there is no limit whatsoever to that annual fee (and the expenses of the authority, with a maximum of 10 members now and a minimum of five, are again an unknown quantity) the licence holder will not be in a position to tell what his likely liability is going to be. It is all very well to say that it is bound to be reasonable and restrained and to be within certain limits. The fact remains that under the Bill there is no limit whatsoever. Although I do not accept the wording of this amendment, I feel that some provision must be inserted which meets that point of equity. If we were to say that the licence fee (I am not putting this forward as an amendment; I am not allowed to do so at this stage) was in no circumstances to exceed a certain sum—"x"—at least we should know where we were. If we said that the licence fee had to be a proportion of the net profits as shown in the accounts, but with a minimum, if there were no profits, of "y", again the licence holder would know where he stood. But on this basis he does not know where he stands. That strikes me as being unfair.
Lord Campbell of Alloway: Is it not manifestly apparent that there is genuine cause for concern on all sides of your Lordships' Committee because, obviously, the drafting is not right; and, equally obviously, no-one has yet devised a way of putting it right? One cannot draft on the Floor of your Lordship's Committee. Will my noble friend the Minister, as an act of generosity, take this matter hack to enable it to be thought about again?
7.10 p.m.
Lord Elton: In the light of that moving appeal, I feel embarrassed to cavil yet further. The noble Lord, Lord Marsh, has raised an issue, and the noble Lord, Lord Mishcon, has, as it were, raised the reverse of the issue. The noble Lord, Lord Marsh, said that the Cable Authority ought to be under some inducement to conduct its affairs economically and efficiently. The noble Lord, Lord Mishcon, said that licensees have a right to expect that they shall not be submitted to unnecessary charges, even if they fall within the terms of the Act.
I have a good deal of sympathy with both points of view as well as that, I may hastily add, of my noble friend whose amendment we are discussing. But may I remind your Lordships that as soon as may be after the end of every financial year, the authority shall prepare a general report of their proceedings during
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the year and transmit it to the Secretary of State, who will consider it and lay copies before both Houses of Parliament. It seems to me therefore that an authority which expended profligate sums, imprudent sums, or even unnecessary sums, on the running of its business would be exposed both to the national media of other sorts, to the critique of the Secretary of State, and to debate by Parliament.
I then begin to wonder whether it is necessary to introduce further statutory incentives to good behaviour in the Bill. I am not certain what they would be. If my noble friends and other noble Lords wish to devise devices, then we should certainly discuss them. At this stage, I will say only that we are committed to having an efficient service run, and that we believe we have so devised. I shall of course read everything that has been said by noble Lords in all parts of the Committee in this debate, to reassure myself that we have done so. If I am so reassured, I shall not be constrained to bring another amendment to the House, but in every other sense I shall consider this issue.
Lord Mishcon: If I may speak just once again to help, and I promise the Committee very briefly. The defect in what the noble Lord the Minister has just helpfully said is that we all know that the Report stage procedure is not the best way of getting reforms or amendments made. There can be a debate on Report, but as a rule one is left with a debate. It is very difficult to enforce any amendment to a Bill, or any power of an authority, when one is debating the matter on Report.
Will the Minister, who is courteously going to reconsider the matter in the light of this debate, consider whether it would not be helpful to give a regulatory power to fix fees, it being understood that the regulations from year to year would be before both Houses of Parliament? They would then, obviously, be either approved or negatived. That would give an opportunity to vary licensing charges year by year if the necessity arose and Parliament so felt.
Lord Peyton of Yeovil: I am grateful to my noble friend for his sympathetic reception, up to a point, of the arguments which have been put, but I hope he will go a little further and look at this matter again. When he suggested—and this particularly worried me—that the authority will be under a duty to submit a report, and that this report will be subject to the scrutiny of the Minister and could even be debated in both Houses of Parliament, I am bound to say that my confidence was not restored enormously. Such documents are not best-sellers by any means. I have been in another place for quite a long time, and that kind of report is not debated at length by Parliament.
I hope that my noble friend will not rely on that kind of assurance, which I believe is very thin. I hope he will look instead at the possibility of a licensee finding himself at the mercy of an authority which (a) is not conducting its business with particular efficiency, and (b) is not constrained by an Act of Parliament to behave in a fair manner.
Lord Elton: I wish I had the advantage which my noble friend has, of many years of service in another

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place, because that would enable me to speak with the trenchant effect that he has. I tried to do so but I regret the electorate saw fit not to give me the opportunity.
I am being invited to do two quite separate things. There is a slight procedural difficulty here because, as I understand the way we conduct affairs, what I can be asked to do is to consider the amendment on the Marshalled List again. I have made it clear that I am not happy with the amendment on the Marshalled List. It seems to me that the aggregate is contained within suitable bounds in the Bill—and that if it is not, the weakness does not lie in that part of the Bill to which this amendment addresses itself; it may lie in Clause 18.
My noble friend Lord Peyton of Yeovil asks me to take away and consider something else; in fact, many of your Lordships wish me to do so—to consider the general point of introducing some greater constraint or of reviewing some greater restraint already in the Bill upon the authority to be efficient. I will of course consider whether the Government believe, in the light of what your Lordships have said, that there is sufficient constraint on the Cable Authority to be efficient. If we think there is not, I do not doubt from the character of all my colleagues from the most senior to the most junior that I shall be under constraint to introduce one. I would be foolish not consider that. But in doing so, it would be part of my general consideration of the Bill which I feel would be proper after Committee stage anyway, and I am not actually saying that I particularly favour that which my noble friend has down on the Marshalled List.
We have strayed a little from the path he sought to hew for us through the undergrowth. I hope he will not consider that I have been discourteous in going down another, and longer, path. For the reasons that I have given, I believe that his amendment is not the right approach to this problem. I do not doubt that a lot of ideas will have been put into his head by this debate, as they have been into mine. He may well wish to come back with something different at Report stage or—happy thought!—to be constrained to be satisfied with the status quo.
Lord Mottistone: On my noble friend's final point, I am not satisfied with the status quo. I accept the fact that this amendment, as with so many others, does not appeal to everybody. I always intended that it should be a probing amendment but it has been a more important debate than it would otherwise have been because together with that on the earlier amendments—some of which were Government amendments—it has led us to understand that the Cable Authority was apparently being given greater power than is reasonable. My noble friend the Minister has received many suggestions as to how that power should be curtailed. I do not think that the way it is done matters provided it looks fair and that as the noble Lord, Lord Marsh, said, the authority itself is subjected to some kind of discipline which it understands.
Provided those two factors are met, I believe that it is up to the Government to come forward with an amendment. If the Government do not, then we shall certainly return at Report stage with an amendment to
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achieve them. But as the noble Lord, Lord Mishcon, said, it is getting a bit late then for the debate that we have been able to have now. At this stage, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 4, as amended, agreed to.
Lord Denham: I believe that this is probably a suitable moment to adjourn this particular Committee stage temporarily. In moving that the House do now resume, for the benefit of noble Lords who are interested in this Bill, I will say that we will not resume this Committee stage before twenty minutes past eight o'clock. I beg to move that the House do now resume.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.

Prohibition of Female Circumcision Bill [H.L.]
7.20 p.m.
Lord Kennet: My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.
Moved, That the House do now resolve itself into Committee.—(Lord Kennet.)
On Question, Motion agreed to.
House in Committee accordingly.
[The Lord HAYTER in the Chair.]
Clause 1 [Prohibition of female circumcision]:
Lord Kennet Lord Kennet Moved Amendment No. 1:
Page 1, line 5, after ("offence") insert ("for any person").
The noble Lord said: Amendment No. 1 hangs together with the second amendment to line 7, which is Amendment No. 4.
Amendment No. 4: Page 1, line 7, leave out ("any") and insert ("another")
They both have the effect of providing better law for a case which I simply had not thought of when the Bill was drafted. I am indebted to the Government for these amendments.
As the Bill stands, it would make a woman who performed any of these operations on herself—if you can imagine such a mad case, but we have to imagine everything—liable to prosecution, and that seems an undesirable way to treat a person as gravely mad as that. This amendment and the one to the end of line 7 would avoid this anomaly by making the acts an offence only if done to another person. I beg to move.
Baroness Gaitskell: I should like to support the noble Lord, Lord Kennet. I think he is a great benefactor. I am entirely with him. We must prohibit this operation. There is absolutely no need for it at all ever, and it seems to me that we should not have it in this country. It is a regressive action, and we should utterly prohibit it. I hope that we shall.

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I have very little more to say apart from one or two things. There is no medical reason for this operation at all; no medical or psychological reason. It is utterly had from beginning to end. I think it is extremely wicked to have an operation like this on women here, and particularly just because there are some women from other countries who go in for it. We do not need any teaching from the women in Africa or India who go in for this kind of operation. We do not have to copy them; we do not have to do anything. I hope that Lord Kennet will succeed in having it abolished completely.
On Question, amendment agreed to.
Lord Kennet Lord Kennet moved Amendment No. 2:
Page 1, line 6, after ("mutilate") insert ("the whole or").
The noble Lord said: This is a drafting amendment. It is evident that if you prohibit the doing of things to any part of something it may be that you have not covered the doing of those things to the whole of it. Therefore, I beg to move the insertion of the words "the whole or".
On Question, amendment agreed to.
Lord Kennet Lord Kennet moved Amendment No. 3:
Page 1, line 7, after first ("or") insert ("labia").
The noble Lord said: This is drafting again, and it arises out of the difficulty that the layman finds in knowing how to mix Latin and English grammar together, as you have to do from time to time when legislating about medical matters. I understand that it would be better if we changed this line in the way proposed in the amendment. I beg to move.
On Question, amendment agreed to.
Lord Kennet Lord Kennet moved Amendment No. 4:
[Printed earlier: col. 72.]
On Question, amendment agreed to.
Lord Glenarthur Lord Glenarthur moved Amendment No. 5:
Page 1, line 8, leave out paragraph (b) and insert—
("(b) to aid, abet, counsel or procure the performance by another person of any of those acts on that other person's own body.").
The noble Lord said: This amendment does two things. First, it deletes the words in paragraph (b) of subsection (1) specifying the offence of procuring, taking part in or facilitating the acts listed in paragraph (a). This, as far as it goes, is a change of drafting rather than of substance. The reason is that we are advised that, if something is made an offence, as a general principle of law it also becomes an offence to aid, abet or procure it.
The wording which replaces this paragraph is consequential on the amendments we have just agreed. The effect of these is that acts performed by a person on herself are now excluded from the definition of offences in Clause 1. Accordingly, it would not be an offence for other people to aid and abet such acts. This seems to us undesirable, because a person charged with an offence under Clause 1 might then put forward the defence that the act was performed by the victim herself. The words of the amendment would preclude
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such a defence from succeeding so long as it could be shown that the defendant was party to the act.
The wording of the amendment is based on Section 1(1) of the Suicide Act 1960, which we think provides a suitable model for this purpose. I beg to move.
Lord Kennet: I should like to say that I support this amendment and would urge the Committee to accept it.
On Question, amendment agreed to.
Clause 1, as amended, agreed to.
Clause 2 [Saving for necessary surgical operations]:
Lord Glenarthur Lord Glenarthur moved Amendment No. 6:
Leave out Clause 2 and insert the following new Clause—
, Saving for necessary surgical operations.
("2.—(1) Subsection (1)(a) of section 1 shall not render it unlawful 'for a person to carry out a surgical operation on another person if that operation is necessary for the physical or mental health of that other person; and accordingly a person shall not be guilty of an offence under that section by reason of anything done in connection with, or with a view to, the carrying out of a surgical operation on another person in those circumstances.
(2) In determining for the purposes of this section whether an operation is necessary for the mental health of a person, no account shall be taken of the effect on that person of any belief on the part of that or any other person that the operation is required as a matter of custom or ritual.")
The noble Lord said: The distinction between the practices which go by the name of female circumcision and operations which are legitimate and necessary to a woman's health is the central and most delicate problem which the Bill presents. Perhaps I may preface my remarks by explaining briefly the objectives of the noble Lord's Bill as the Government understand them. The aim, as we see it, is to put it beyond doubt that female circumcision practised as a custom or ritual is a criminal offence, while avoiding any interference with legitimate medical practice. This raises sonic wider issues to which I shall want to turn in a few moments. But it is very important to keep a sense of proportion over this, because there are something more than 8,000 legitimate surgical operations on the female external genitalia—and perhaps many more—in any year, against perhaps a tiny number of female circumcisions.
May I perhaps now take the Committee through the new clause in detail and explain how it achieves the distinction we seek? So far as definitions are concerned, there is no difficulty about cancerous or pre-cancerous conditions and others for which surgery is clearly indicated on physical health grounds. The cases which present a problem—and they are a small but nevertheless significant number—are those in which a girl or a woman, otherwise perfectly healthy, becomes anxious and depressed about the shape or size of her external genitalia. This distress—which may become very acute and could lead to mental illness—can only be relieved by surgery, Such surgery—coloquially referred to as "trimming"—cannot be said to be necessary for physical health. It is from the woman's actual or potential mental illness that the need for it arises.
The noble Lord has recognised this problem in Clause 2(1)(a) by the phrase "rectification of

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abnormality". But this form of words leaves doubt about what is or is not physically abnormal—a view shared by the Royal College of Obstetricians and Gynaecologists. It would be quite wrong for any doubt to be cast over the position of women, black or white or of any ethnic group, requiring surgery for reasons which have nothing to do with the custom or ritual practice of female circumcision.
If the patient's mental health is to be admitted as grounds for surgery, then clearly some safeguard is needed to prevent its being used as a cover for female circumcision on the grounds that a woman's mental health would suffer if she could not conform to the prevailing custom of her community. Subsection (2) of the new clause covers this by preventing the surgeon from taking account of the effect on a person's mental health of a belief that the operation is required "as a matter of custom or ritual".
But the whole object of the Bill as introduced by the noble Lord is to prohibit practices which are confined to particular ethnic groups. If the new clause discriminates, then so does the Bill itself. It is for Parliament to decide whether the law should put beyond doubt that these medically unnecessary and repugnant practices should be prohibited in this country. If it does, the Government believe that the way to achieve this without interfering with any legitimate surgery is to include this new clause in the Bill.
Given that the clause expressly excludes anything which could be classified as female circumcision, we do not believe it necessary to retain the other detailed provisions of the present Clause 2. The only operations now exempted are those about whose medical justification there is no doubt. We see no need for them to be subject to special restrictions which do not apply to surgical operations generally. I should just mention here that an exemption limited to operations by registered medical practitioners is in any event too narrow since it could be argued that the definition in Clause 1 includes the procedure of episiotomy performed by midwives as a normal part of their practice. Since midwives also attend home confinements, a restriction to hospitals or nursing homes would present further difficulties, and equally we should not want to interfere with doctors performing necessary and proper minor surgery in their own consulting rooms.
The noble Lord, Lord Kennet, has tabled a manuscript amendment, Amendment No. 6A, and it might be convenient to refer to that now. I hope the noble Lord will have no objection. I believe the noble Lord is aware that this amendment only reached me at twenty minutes to seven o'clock and therefore what I have to say will be short. Nevertheless, I hope that it will make the point. I have not had time to consider the amendment as fully as I should have liked. Subsection (2) seems to me to be quite sufficient to prevent female circumcision from being brought in under the cover of the new clause. The additional subsection contained in the noble Lord's Amendment No. 6A would place a bureaucratic duty on doctors who are performing legitimate surgery without, as we see it, any commensurate strengthening of the safeguards provided by the new clause. I beg to move Amendment No. 6.
The Deputy Chairman of Committees: Amendment No. 6: leave out Clause 2 and insert the new clause as set out in the Marshalled List.
Since the amendment was tabled there has been a manuscript amendment to Amendment No. 6. Amendment No. 6A, in the name of the noble Lord, Lord Kennet.
7.34 p.m.
Lord Kennet Lord Kennet moved, as an amendment to Amendment No. 6. Amendment No. 6A:
After the words printed on the Marshalled List to insert a new subsection as follows:
"(3) In determining for the purposes of this section whether an operation is necessary for the mental health of a person a certificate to that effect shall be required from a member of the Royal College of Psychiatrists and a member of the Royal College of Gynaecologists.".
The noble Lord said: The Committee will be grateful to the noble Lord, Lord Glenarthur, for setting out in such careful detail the reasoning behind his very complex amendment. I am afraid that I have quite a lot to say about it and I hope that the Committee will bear with me if I do not hurry through what has to be said. I shall seek to persuade the Government not to press their amendment to a Division tonight. That is the course I hope to persuade them to take. However, I may not be successful in my desire to persuade them to do that, and in case I am not I have tabled a manuscript amendment, which has just been read out by the Deputy Chairman. First, I heartily apologise to the Government, and to the noble Lord, in particular, for the lateness at which my amendment was tabled. I regret to note that it took more than an hour to reach the noble Lord after I had tabled it. I am sorry about that and I do not know how it happened. It was certainly through no fault of mine or, I am sure, the noble Lord. In any case, I admit that it was tabled late and I apologise for the discourtesy to the whole Committee. It arose from discussions that took place only this afternoon and has been tabled because, in my opinion, it will alleviate some of the had effects of the Government's amendment, but it will not touch the main objections to the Government's amendment. The main had effect will remain. What that main bad effect is, other noble Lords and I will now explain to the Committee.
The Bill as drafted says that there shall be no female circumcision and no operations to those parts of the body except in the case of physical ill-health or physical deformity or abnormality. The noble Lord, Lord Glenarthur, put this very fairly in his opening speech. We are agreed that operations for cancer and pre-cancerous conditions—and indeed for any other sort of physical ill-health—should be permitted quite freely by any doctor. I should like to add that it is my understanding of the Bill that this includes episiotomy—routine episiotomies during childbirth are of course for the physical health of the patient—and as I understand the Bill they will be permitted to be done by midwives. There are various limitations towards the end of the Bill, as drafted; but they have all either been withdrawn already or will be withdrawn by a later amendment in my name. So, operations for physical ill-health, if I read my own Bill correctly, may be done by doctors or by midwives.
Then comes the question of physical deformity. As the noble Lord correctly said, some girls are born deformed or abnormal but may be perfectly healthy apart from that. I want to confirm what the noble Lord said to the Committee, that such operations are freely permitted under the Bill as drafted without any reference to bureaucracy, permission, certification, or being done in a special place. They are as freely permitted under the Bill as they are now.
I now turn to the new class to which the Government amendment addresses itself. These are girls who falsely believe, mistakenly believe, that their genitalia are abnormal and who get so depressed about it that, in the noble Lord's words "their distress can only be relieved by surgery". Let me emphasise this distinction once more. II they really are abnormal, even in the slightest way, the operation is freely available under the Bill. There is therefore no need for any amendment to the Bill. However, in the case of those who are quite normal, but believe they are not, the operation would be prohibited under this Bill and permitted by the Government amendment. Let us consider this.
The noble Lord said, if I noted him correctly, that there was "a small but not insignificant number" of such operations each year. I have certain questions to which I think the Committee would welcome an answer. How many each year? Roughly how many operations are carried out on girls who are deluded into believing in their own abnormality? What is the typical age of such girls? Are they not typically adolescent, or very young women indeed? What follow-up has been done in the medical profession on these operations? They are done to heal depression or mental distress. Do they do so? It is obviously impossible to say whether or not they do unless there has been a proper statistical follow-up. What follow-up has been done? Has such follow-up as may have been done included a proper statistical control group to see whether the linked delusion and depression of this type would not have cleared itself up without surgery?
In the event that the noble Lord has to reply that no proper statistical control group follow-up has been done, can he tell the Committee what other surgical procedures are in common use which have never been subjected to ordinary statistical controls afterwards to see if they worked? Only then will the Committee be able to judge whether an exemption is due in the case of this group of girls. In my opinion—I know that the noble Lord, Lord Rea, is to give a professional opinion shortly—it seems obvious that if an adolescent girl thinks she is deformed, but is not, then the right treatment is support, counselling, sympathy, possibly psychotherapy, but not surgery. If the depression is so deep-seated that psychotherapy and sympathy will not cure it, it seems pretty unlikely that surgery will do so either. A layman's understanding of psychotherapy suggests that the delusion and depression would merely transfer themselves to another cause, which would be equally groundless. However, that is for the Committee to judge.
I turn now to the means which the Government have chosen to secure the freedom of surgeons to continue with this tiny group of operations. It is so
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small that no figure has ever been named. As the noble Lord the Minister said, the means that they have chosen is to permit mental health as a ground for the operation but to exclude from the definition of mental health any depression or mental illness which is based on custom or ritual. I submit that this is what should stick in Parliament's throat. Quite simply, it means that white mental health is a good ground for the operation but black mental health is not.
Inadvertently the amendment would have a most unhappy racist effect. I know that that was not the Government's purpose in introducing it. This is not a Bill to put black people down and white people up, but to ban a form of cruelty and harm. It is a very great pity that the words "custom" and "ritual" should be making their first appearance in British law since the Catholic emancipation. In this country in the past 150 years we have not banned anybody's custom or ritual. We rejoice in the diversity and freedom of custom and ritual. It is unfortunate for legislation against the custom and ritual of certain immigrant groups to creep in via a humanitarian and public health Bill.
I am not an expert on race relations and it is not on my say-so that I put this to the Committee. I referred the Government amendment to the Commission for Racial Equality and asked for an opinion. The chairman has been good enough to let me have an opinion, which I shall now read to the Committee. It is dated 22nd December of last year and states:
"The Commission shares your concern at the formulation of the amendment. However well-intentioned in seeking to avoid any circumvention of the Bill's purpose, Clause 2(2) could be indirectly discriminatory in effect. A doctor, when assessing mental health as justifying the performance of an otherwise prohibited operation, will normally base his judgment on the patient's state of mind as he finds it. To suggest that some reasons for that state of mind may be acceptable and others, broadly confined to those which might affect persons of African origin or descent, are not is, in our view, discriminatory and therefore to be avoided".
That is a perfectly clear opinion from the statutory body which exists for the purpose that this amendment is racially discriminatory and is to be avoided. The opinion continues:
"On a more general point, so far as I am aware this is the first time, at least in recent years, that draft legislation has explicitly sought to exclude from consideration the relevance of a custom of an ethnic group settled in the UK. Any such exclusion or precedent would be undesirable on principle".
I sent a copy of the opinion to the noble Lord the Minister as soon as I received it, which was about two weeks ago because of the delay over the Christmas holiday. I feel sure the Committee will want to know his reaction.
I have this afternoon also received a communication from the National Council of Women of Great Britain which I have not had time to send to the noble Lord but I shall read it to the Committee:
"We have learnt with dismay of the Government sponsored amendment to your Bill dealing with the practice known as female circumcision. We welcomed and fully support the intention of this Bill, that the operation should be performed in this country only in cases of proven medical need or deformity. We view the amendment…as providing a loophole by means of which this intention could be circumvented. It would not be too much to say that it would wreck the Bill and we hope very much therefore that this amendment will not be accepted by the House".
I have also received messages to the same effect from the Josephine Butler Society and the Fawcett Society.
To sum up, I hope that the Government will not take the amendment to a Division today and will be ready to consider the arguments and representations from outside the House. I hope, too, that they will consider further—and, if necessary, discuss with me—the effect of my manuscript amendment to the amendment. I hope that we shall not inadvertently, perhaps by not having considered the matter fully enough, carry a piece of de facto racial discrimination into the law under the guise of public health and of kindness. In case a Division is contemplated, I might just say that this is a non-party matter if ever there was one. It is a humanitarian Bill and it is an intensely complicated matter. I am well aware that the situation, as the noble Lord the Minister and I have outlined it today, must be difficult indeed to follow. I judge that at present about 25 to 30 noble Lords are in the Chamber. I should very much regret, as I think would all noble Lords present, if in the event of a Division there was a very much larger tally of noble Lords voting, many of whom had not heard these complicated arguments. I beg to move.
Baroness Gaitskell: May I be allowed to ask the noble Lord the Minister one very small question? Does he agree that there is no need for female circumcision for psychological or medical reasons? It is thoroughly bad.
Lord Glenarthur: I entirely agree with the noble Baroness, but we are not talking specifically about female circumcision. We are talking about legitimate surgical operations as well as female circumcision. I thought that I had made that clear, as had the noble Lord, Lord Kennet, when he spoke earlier.
7.48 p.m.
Baroness Jeger: The Committee is in some difficulty tonight. As the noble Lords will recall, the Bill has, in effect, had two Second Readings. There was general welcome on all sides of the House for the Bill's intention. I very much hoped that it would go smoothly on its way; but it is totally necessary to oppose the Government amendment on the grounds that they have introduced the term "mental health" in the amendment. The original provision referred to "physical health", which covered all the points raised about the possibility of cancer, deformity and other difficulties. We were totally agreed about that. Suddenly we find the words "mental health" in the amendment. This is most unfortunate. It takes the Bill's intention into very shadowy places. It is an invitation for every charlatan in London to crawl out of the woodwork and say, "This woman has a mental difficulty".
Some of us are old enough to remember the difficulties with the old abortion legislation. If a woman had the money to go to a psychiatrist in order for him to say that her mental health would be disturbed if the pregnancy continued, she could get a certificate and have a legal abortion. That opportunity was not open to a poor woman in a back street who did not know what a psychiatrist was. I believe, too—and I have spoken to many doctors about the point—that the situation puts doctors in a very difficult position
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because the judgments are very subjective, very difficult, and shadowy.
With regard to the amendment which the noble Lord, Lord Kennet, has tabled so late, I appreciate that he believes that, if he introduces people with a little more psychiatric clout, it will be all right, but I find that quite unacceptable. I believe that there may be many doctors who are members of the Royal College of Psychiatrists who know very little about anthropology or the basic problems involved in this question.
In adolescence there can, for all kinds of reasons, be distress and difficulty for both boys and girls. If a girl produces a particular reason, she may well be stressing the focus of her depression while being quite unaware of the cause of it. It may be that family pressures to have circumcision are the real cause of her depression and anxiety. It may well be that the cause arises from the fact that the girl has failed her O-levels, or that she has had a row with her boyfriend. The reasons for depression, worry and anxiety in adolescence are legion.
Let us suppose that there is found a psychiatrist who will say that a girl's anxiety about her external organs is causing severe depression and therefore female circumcision is legal in the particular case. What happens if after the mutilation the girl is still depressed, because the cause was not properly diagnosed? She may still not be in love with her boyfriend: she may again fail her O-levels. Yet she has been mutilated at a time when she should have had sensitive psychiatric help, sympathy and encouragement. There are all kinds of emotional strains during adolescence, and if the words "mental health" as they appear in the amendment are to include emotional problems and difficulties as legitimising in this country this dreadful mutilation, it will be a disgrace if your Lordships' Committee pass it tonight.
Moreover, if the Government are spelling out that the operation would be illegal if required as a matter of custom or ritual, that would be very dangerous. The noble Lord, Lord Kennet, has put forward a point of view with which I largely agree. But there is another problem. The existence in the amendment of a phrase relating to custom or ritual would alert the patient, the relatives and the person who is to perform the operation that they must not use excuses relating to ritual or custom. So when they go to the psychiatrist they will not mention those matters because they will know that to do so would mean that the operation would be illegal. Instead, they will go on about depression, misery and all the other things which can come under the heading of mental health. It seems to me that, if we pass the amendment, we shall be supporting—I am sure unwittingly, so far as many of your Lordships are concerned—superstitions which come from witch doctoring and all the things that we are trying to get rid of.
I do not think that the noble Lord's manuscript amendment is very helpful because in my view we should exclude from the Bill the mental health aspect. We should try within the field of physical health to take care of distressing abnormalities. Where there are mental and emotional difficulties they should be dealt with not by mutilating surgery but by the more

81
sophisticated and professional methods which I hope a psychiatrist would wish to use.
I want to make only one more point. I know that there are strong feelings based on racial points of view. However, I would remind the Committee that in countries such as Kenya, the Sudan and many others there are brave rulers, brave doctors, and brave nurses and midwives who are there standing up against this mutilation. If they cannot have from us encouragement in outlawing the procedure in this country, we shall be letting down a movement for freedom for women in many countries of the world where the practice has been a tradition.
I hope that the Government will take away the amendment, but, if they persist in putting it before the Committee, I shall certainly not be able to support it. This is a free vote—I must make that absolutely clear—I am speaking for myself, and I very much hope that the Government will not be able to carry the amendment tonight.
Lord Glenarthur: Perhaps I may briefly intervene because I think that the noble Baroness may be under a misapprehension which could confuse other members of the Committee. The fact is that Clause 1 of the Bill expressly states that to excise, infibulate, et cetera will be against the law. The new clause which I have described simply allows the legitimate surgical operations to go ahead. It does not allow female circumcision in its broader sense to go ahead. So I hope that the noble Baroness is quite clear on that point.
Baroness Jeger: I am not sure whether the noble Baroness is clear on that, but I think that we must ensure that all your Lordships are clear that the reference to mental health permits surgery on grounds of mental health, and should not be acceptable to the Committee.
Baroness Cox: I should like very briefly to add my voice to those who are concerned about the inclusion of the words "mental health", very largely merely to endorse the arguments that have already been put. I am deeply concerned because, though I understand the arguments that a girl may be very depressed, perhaps even to the point of being potentially suicidal, because she perceives herself as having a physical abnormality, if she does not actually have such a physical abnormality, it seems a very inappropriate treatment to subject her to a mutilating operation. Surely the more appropriate treatment is that which has already been endorsed: that she should be referred to those people who can help her with her mental disorder. I think that that is particularly important because the very nature of the situation as it pertains to someone who explicitly has no physical abnormality is that it is a delusion or depression. Therefore, even if she were to have the operation—which I am in no way suggesting she should have—it is likely that some other focus for the depression would emerge in due course. Thus the operation itself would very likely not be therapeutic, but would just leave permanent physical damage.
I should like to say that I am rather perplexed by the reference to episiotomy, because it seems to me that episiotomy is performed for medical reasons, and also,
82
when appropriately carried out, does not leave any permanent mutilation. So I fear that I fail to see the relevance of bringing in episiotomy in this context. Therefore I regret that I cannot support the amendment as put forward by the Government.
Lord Hatch of Lusby: So far in both considerations of the Bill, before and after the election, all sides of the Committee have been meticulous in avoiding any value judgments on the customs of other people. I am afraid that by introducing the term "custom or ritual" the Government have broken that general agreement, and I hope that they will recognise that that is dangerous to the Bill. It is also dangerous to our relations with other countries, and it is particularly dangerous to the relations between the Government, and indeed Parliament, and the ethnic minorities in this country. That is of course no defence of the practice of female circumcision.
I would support totally what the noble Baroness, Lady Jeger, has said about the bravery of medical people, and indeed political people, in other countries where female circumcision is common. I have personal experience of this. When, in 1962, I was deported from Sierra Leone for mentioning the existence of female circumcision, this did not lead, as it has frequently done in other countries, to a blanket removal of any reference to the practice of female circumcision. It led to a national debate in which the major nationalist figures came out against the Government and supported me in saying that if the Government could not answer my case then they had no right to close my mouth by deporting me. Fortunately, that country has since redeemed itself by removing the deportation order and I have been accustomed to returning to it for the past 16 years.
I beg the Minister to recognise the gravity of the case that we are putting. What he has said about the anxiety and the distress—I am quoting him here—which can be caused particularly to young girls by the shape or the size of their genitalia and the depression that may then result is surely a matter, as the noble Baroness has said, for the psychiatrist, for the counsellors and for the family. It is not a matter for surgery or for surgeons. If that is the case with What are largely the depressions of white people, how much more is it the case among the ethnic minorities who come from countries where female circumcision is the recognised practice and is, indeed, virtually a religious practice.
It is surely obvious that many young girls may suffer intense depression and intense mental agony because they are bound to be unlike those among whom they mix, their friends and their relatives. Is this, then, to be a question of mental health? According to the Government amendment, the answer is, no. That is, as the noble Lord, Lord Kennet, has already pointed out, a matter of clear racial discrimination, or what would more clearly be colour discrimination.
I beg the Minister to take this amendment back and to think about it again before Report stage. Just as white girls are depressed because of a false view of their genitalia, so, when black or brown girls are depressed, the same treatment should be made available. I make a specific proposal. I suggest that the Government get in touch with Professor Lambo of Nigeria, who was Vice-Chancellor of Ibadan University, now deputy

83
director general of the World Health Organisation, who is an African psychiatrist, and seek his advice. They should ask that he suggests suitable psychiatrists to be available to the Government in this country to give advice in these desperately complicated and tragic situations. They are complicated and tragic. I have never understood why that noted social anthropologist Professor Malinowski gave his approval to Jomo Kenyatta's book Facing Mount Kenya, a large section of which was devoted to a defence of female circumcision. But by doing so he showed the complications—the psychological, the spiritual and the social—which underlie the whole question of female circumcision in certain societies.
Quite frankly, nobody knows why, if there is any general rule that supports this practice. But if we have in this country—and it is undoubtedly the case that we have—young girls and women who come from societies where it is a disgrace not to have suffered female circumcision, then those are girls, usually British girls, for whom we are responsible. That responsibility is not carried out in this Government amendment. The distinction between subsections (1) and (2) is clearly discriminatory. Subsection (2) does not provide the kind of care and help which the Government should be providing and which we, as a Parliament, should be providing for girls who are put in this very difficult position.
I beg the Minister to take back this amendment before Report stage and at least to give it consideration with the help of those who understand people who have lived in countries, and who have studied the societies, in which this practice takes place.
8.5 p.m.
Baroness Masham of Ilton: I quote from a recent article in the Nursing Times, headed "The unkindest cut":
"Female circumcision is political. It is about the oppression of women by men and an abuse of human rights, performed on the victim before she is in the position to choose rationally what her fate will be. Yet, when women from some other countries come to settle here in Britain they want to have their daughters circumcised. They will group together to preserve the customs of their country and culture."
This is a very complex matter. I am sure that if we manage to pass satisfactory legislation, education will have to continue among these groups of people, many of whom may not speak or understand English well, if at all, but who must and should abide by our humanitarian standards. I think that everyone in the Committee is of the same mind, that female circumcision is nothing less than genital mutilation and will not be tolerated by us.
The amendment before us, in the name of the noble Lord, Lord Glenarthur, is far from clear. In fact, it seems to fog the issue. The amendment states that it,
"shall not render it unlawful for a person to carry out a surgical operation on another person if that operation is necessary for the physical or mental health of that other person".
Does that mean that anyone is free to carry out an operation anywhere if they think that someone needs it for any reason, without any safeguards? The amendment does not even say, "for the good health or wellbeing of the person". "A person can be anyone.
84
How are they to know if an operation is necessary if the people are not medically trained? The amendment does not say that they have to be trained. I have shown this amendment to several doctors in the past few days, a gynaecologist, a neurologist, two paediatricians and a general practitioner who was a senior registrar in urology. All say that there are too many loopholes in this amendment and have queried why the Government have put in "mental health". If this is for sex changes should it not be clearly written in? What other mental cases are operated on?
The cases the noble Lord, Lord Glenarthur has mentioned seem to be abnormalities already covered in the Bill. If mental effects are to be written in, they should be more clearly defined to clear this confusion. I should just like to query the second section of Clause 2. I think perhaps Clause 2 could be widened a little to include small operations which may be carried out in the doctor's surgery or in the home by a doctor or midwife. I do hope the Minister, having listened to the arguments, will take this amendment back and reconsider the whole matter. Many other countries are taking an interest in this Bill and are trying to persuade their Governments to legislate against female circumcision. If we do not get this Bill clear and workable, it may do more harm than good; not just in Britain but in other countries who are watching our legislation.
Lord Rea: It may be of help at this point to describe what is generally thought to be good professional practice with regard to operations of a cosmetic nature on normal human anatomy on mental health grounds such as we are discussing tonight, and which comprise the operations which this amendment is supposed to safeguard. If a patient requests such an operation because she feels distressed or depressed about the shape of her body and wants it changed surgically, the proper procedure is to refer her to a psychiatrist for an opinion about her mental health. I am sure this is the opinion of most doctors and I have confirmed that I am backed fully by the ethical committee of the British Medical Association on this point. In the National Health Service it nearly always the practice that a psychiatric opinion is sought. I wish I could say as much for the private sector. The psychiatrist may be able to advise more appropriate treatment, taking the total interests and background of the patient into account, and I think the noble Lord, Lord Kennet, and other have described how this should be done.
On the other hand, it may be that the psychiatrist decides that the symptoms could in fact be appropriately allieviated by an operation. At this point I should say that many psychiatrists would welcome a blanket prohibition of operations on normal female genitalia since their decisions are often made under great patient pressure. Today, in fact, I was approached by a mother of four who sought augmentation of her breasts. She has perfectly normal breasts. They were not as big as they once were, but they were not abnormal, and I was put under some pressure by this lady. I eventually referred her to a plastic surgeon who I knew would seek a psychiatric opinion before operating. This lady is expecting that a long standing depression is going to be cured by this operation. I am quite sure that she is wrong.

85
The amendment as it stands, contains no requirement that a psychiatric opinion will be obtained to confirm that there are proper mental health grounds for any operation to be done on such grounds. Apart from the discriminatory nature of the wording which is being discussed, the amendment is not sufficiently clear on this point. For ethical and professional reasons, I should like to ask the noble Lord the Minister to withdraw the amendment at this stage for further consideration. Should Amendment No. 6A, which has been put forward as a stopgap by the noble Lord, Lord Kennet, be carried, it would create, as the Minister himself has said, a somewhat bureaucratic procedure and we should not like to have to press this amendment.
Baroness Vickers: I should just like to ask two points: why do we have to leave out registered medical practitioners? Secondly, why are we not mentioning national health hospitals and registered nursing homes? I think that it would be very helpful to have both of those put back into the Bill because I think it is essential that we use these two services.
Lord Kennet: It may be convenient to the Committee if I say another word at this point. As I understand the procedure—and I shall no doubt be corrected if I have got it wrong—Amendment No. 6A, being an amendment to an amendment has to be taken first and then there will be a separate vote on the main amendment whether or not it has been amended by Amendment No. 6A. I see that the Deputy Chairman nods so I am glad that I have that right. I hope the Government will feel able to take the unanimous advice of those who have spoken in Committee and not press the main amendment tonight.
May I just say very briefly in answer to Lady Jeger that I know she does not like my amendment with its reference to two psychiatrists. Nor do I. It is not a good plan at all, but I disliked the Government amendment even more. It seems to me that if we are to institute this freedom to operate on white girls, racially discriminating, the least we can do is to make sure that there are proper psychiatric opinions to back it up. I commend the amendment to the amendment to the Committee as something which will slightly alleviate the fundamentally bad effects of the Government amendment.
Naturally, if the noble Lord is able to tell the Committee that he will not be pressing his amendment to a Division tonight, then there will be no need for me to move mine formally and to press it to a Division because the amendments can be taken away and looked at together.
8.18 p.m.
Lord Glenarthur: We have had a lengthy debate on this amendment and on the amendment of the noble Lord, Lord Kennet. I should like first of all to explain more fully why we do not accept that the new clause discriminates on racial grounds in the way that the noble Lord, Lord Kennet, has described, and in the way that the noble Lord, Lord Hatch, also went to great lengths to explain. The noble Lord, Lord Kennet, and the noble Lord, Lord Hatch, particularly
86
addressed themselves to the words "of custom or ritual" which appear in the new Clause 2. He said, if I understood him right, that those words should stick in Parliament's throat; but it seems to me that the essential purpose of the whole Bill as presented by the noble Lord, Lord Kennet, is to prevent acts of cruelty or harm from being performed under the cloak of custom or ritual. That is the essential purpose of the Bill which the noble Lord has introduced.
Lord Kennet: I hate to interrupt the noble Lord the Minister and I will try not to do it again. My purpose is to prevent acts of cruelty and harm—the cloak is not particularly important—wherever it appears: white or black Christian or Moslem, animist, whatever you like.
Lord Glenarthur: Cruelty or harm is implicit in the custom or ritual in this particular sort of operation. As I said, this custom or ritual is implicit in the title itself, since the term "female circumcision" has no precise anatomical significance. What it does signify is the customary or ritual character of the acts to which it refers. I submit that interference with that sort of custom or ritual is inherent in the basic purposes of the Bill. What we are saying is that these particular customary practices are not compatible with the culture of this country. I do not see this as attacking any racial group; on the contrary; we are saying that girls and women living here should have the protection of the law against practices which, whatever sanction they may enjoy in other countries, are thoroughly repugnant to our way of life, and this seems to be a view which has been expressed by the Committee this evening.
Baroness Seear: I am sorry to interrupt the noble Lord the Minister but is he really saying that he is taking no notice of the express opinion, carefully rendered, of the Commission on Racial Equality? This is, after all, the commission set up by the Government to examine questions of this kind and to give an authoritative judgment on how clauses of this kind appear—at any rate to those directly concerned with race relations in this country.
Lord Glenarthur: What I am saying is that of course, as the noble Lord, Lord Kennet, said, we have seen the comments in the letter to which the noble Lord referred, we have examined them and they have been discussed by the Government. But we stand by the view that I had started to express and will continue to expound now. I do not want our discussion to dwell at length on unnecessary anatomical or clinical detail, but it is important that your Lordships should know exactly what would happen if my amendment is not accepted.
The noble Lord, Lord Kennet, has suggested that the amendment is discriminatory in effect and that it has been introduced to satisfy doctors who wish to carry out operations on the external genitalia of white women who develop imaginary phobias about their external parts. The reality is very different. The Government's amendment is designed to benefit women of all ethnic groups who suffer or who may suffer from mental ill health because some part of their

87
external genitalia has become excessively large, but where there is no physical cause for their ill health.
Lord Kennet: I promised not to intervene again but I must break my promise. If the girl's external genitalia are excessively large an operation is freely permitted under the Bill as drafted.
Lord Glenarthur: I can expand upon that at length. The matter comes later in my speech, but in essence the fact is that we are faced with the problem of defining "abnormality" and if I may I would like to come back to that particular point later on.
Those women to whom I was referring a few moments ago—and there are not many of them—become acutely conscious of their body image, if that is the correct phrase, because of the excessive size of some part of their external genitalia and that may, in schoolgirls, come about as a result of teasing or ridicule by their peers. In such circumstances it is small wonder that they become increasingly anxious and depressed about their own external organs and this may easily lead to mental illness. I am advised that the Royal College of Obstetricians and Gynaecologists consider that surgical correction is the appropriate form of treatment—not psychotherapy in the way that the noble Lord suggests. The women in these cases are not suffering from any delusions, but there is no exact definition of "normality" by which they could be said to be abnormal. The range of "normal" is very wide and if we rely on it it will leave a doubt about the position of the women I am describing.
The Government believe that there must be no doubt in the medical profession's mind about whether such women may be lawfully operated upon in this country. The risks of mental illness to them are considerable despite the fact that there is no physical abnormality. The amendment before the Committee has been drafted to prohibit those operations which we and the noble Lord, Lord Kennet, wish to prohibit—an aim with which the Government are completely in sympathy.
However, we do not wish to cast doubt upon the legal status of what I described earlier as "trimming" operations, the need for, or the lawfulness of which, has not been called in question until debated on this Bill. Let me stress that no one has produced any evidence whatever of abuses in this type of surgery and the question of legislating about it would never have arisen had not the quite separate issue of female circumcision come to the fore.
There is simply no case for interfering with the type of legitimate surgical operations which I have described. It is not a question of protecting the freedom of surgeons but rather the rights of patients to have surgical treatment when that is what their condition requires. The problem is that while the distinction between this legitimate surgery and the traditional practice of femal circumcision is quite clear in commonsense terms, there is no precise anatomical definition which would admit one and not the other. That is why we need the provision for surgery on mental health grounds together with the qualification contained in subsection (2).
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I repeat: there is no racial discrimination in this. The grounds for surgery provided by subsection (1) apply equally to everybody whatever their colour or ethnic group. Subsection (2) in referring expressly to operations performed as a matter of custom or ritual, merely defines more exactly what is already the implicit purpose of the Bill. We do not think that that constitutes discrimination. If it does, as I said earlier, the discrimination is already there in the Bill. What I think the noble Lord was saying when he spoke earlier is that it ceases to be discrimination if it also catches some other activity which has nothing to do with the real purpose of the Bill. With respect, that is not a sound principle for legislation.
Various other points were brought out and I think it only right—although I am acutely aware of the time that this is taking—to comment on some of them. The noble Baroness, Lady Masham, referred specifically to the definition of the word "person". The implication here is that the exemption should be limited, for example, to operations performed by registered medical practitioners—I think that this was the point the noble Baroness was making—as in the existing Clause 2. There is, in fact, no general legal rule that medical treatment or surgical operations may be performed only by registered medical practitioners—and I must confess that until I became involved in this matter I was not aware of that fact myself—although it is illegal for anyone to claim to have qualifications which he does not in fact possess.
The operations exempted by Clause 2 are, by definition, not female circumcision because that is expressly excluded by subsection (2). They thus form part of the normal practice of surgery and it would not be right to subject them to restrictions which do not apply to surgery generally. So, while there may be room for debate on the particular issue which the noble Baroness raises, I submit that the Bill is not the place for it.
The noble Lord, Lord Kennet, asked me a number of questions about numbers. When I spoke earlier to my amendment I gave the noble Lord the figure of about 8,000. We do not have the information that he requested on the follow-up for these types of operation, nor do we have it for most other types of surgery. Successive Governments have always seen the necessity for surgery as being very much a matter for clinical judgment and we do not think that to police it from perhaps the Elephant and Castle in the way the noble Lord suggests is necessarily the right way to go about it. So far as the number of "trimming" operations that might be required is concerned, those operations probably amount to something like 10 or 20 in a year, but I do not think I can be more specific than that.
I hope that I have been able to answer some of the points that have been raised. There is a great deal of technical expertise present in the form of my noble friend Lady Cox and also the noble Lord, Lord Rea. However, I stand by what I said: these really are important matters that have to be included if the Bill is to make an sense at all, otherwise perfectly legitimate operations of the type to which I referred will be prevented, and that is thoroughly against the spirit of the Bill which the noble Lord has put before

89
Your Lordships. I therefore beg to move my amendment.
Lord Hatch of Lusby: Before the noble Lord sits down, is he saying that the mental anguish caused by the inability of a girl to have a cosmetic operation is of greater importance, and should be included as a condition within the Bill, than the mental anguish caused to girls who come from a society in which female circumcision is the general practice, and that that should be a reason for accepting the Government's amendment? I could not follow the noble Lord's argument as to the difference between the two.
Lord Glenarthur: I think that the matter is simpler than the noble Lord, Lord Hatch, says. We all seem to be agreed that female circumcision is a thoroughly unsavoury practice. In effect, we are saying, "We do not like you doing it anywhere in the world, and we will do our best to stop it, but we shall certainly not allow you to do it over here". However, although we say that, we are not prepared to allow legitimate surgical operations of the sort I have described to be circumscribed by the law being changed in a way which has not hitherto taken place. I hope that that answers the noble Lord's point.
Lord Kennet: I do not think the noble Lord has made out a very good case; nor do I think many Members of the Committee think he has. I hope that even now he may consider not pressing the matter to a Division. I note that apparently there has been no follow-up to find the results of these operations which the noble Lord seeks to defend by his amendment. I note that the Royal College of Gynaecologists is in favour of the amendment. It would be, of course, because its members perform the operations. Can the noble Lord really divide the Committee, which has spoken unanimously against him, on the single advice of the Royal College of Gynaecologists without obtaining that of the Royal College of Psychiatrists? I do not think that is respectable.
The noble Lord has said that the Government do not think the amendment constitutes discrimination. The Commission for Racial Equality does, and that is what the commission is there for. The noble Lord, without a single voice in his support, intends to divide the Committee against that opinion. If the noble Lord is to divide the Committee (and he says that he is) I must also press my own amendment to the amendment—unwillingly, because it is not a very good idea, but it will make the Government's idea slightly less bad than it would otherwise be.
8.32 p.m.
On Question, Whether the said amendment (No. 6A) to Amendment No. 6 shall be agreed to?
Their Lordships divided: Contents, 38; Not-Contents, 42.

DIVISION NO. 3

CONTENTS

Ardwick, L.

Cledwyn of Penrhos, L.

Aylestone, L.

Collison, L.

Bishopston, L.

Cox, B.

90

David, B.

Masham of Ilton, B.

Dean of Beswick, L.

Mishcon, L.

Ennals, L.

Ogmore, L.

Fitt, L.

Ponsonby of Shulbrede, L.

Graham of Edmonton, L.

Rea, L, [Teller.]

Hampton, L.

Seear, B, [Teller.]

Hatch of Lusby, L.

Stewart of Alvechurch, B.

Houghton of Sowerby, L.

Stewart of Fulham, L.

Jeger, B.

Stoddart of Swindon, L.

Jenkins of Putney, L.

Taylor of Blackburn, L.

Kennet, L.

Tordoff, L.

Kilmarnock, L.

Underhill, L.

Llewelyn-Davies of Hastoe, B.

Vickers, B.

Lloyd of Kilgerran, L.

Wells-Pestell, L.

Lockwood, B.

Whaddon, L.

McNair, L.

Winstanley, L.

NOT-CONTENTS

Airey of Abingdon, B.

Lucas of Chilworth, L.

Alport, L.

Lyell, L.

Avon, E.

Macleod of Borve, B.

Belstead, L.

Mancroft, L.

Boardman, L.

Margadale, L.

Brabazon of Tara, L.

Marley, L.

Brougham and Vaux, L.

Mersey, V.

Craigavon, V.

Molson, L.

Crathorne, L.

Mottistone, L.

Davidson, V.

Mountevans, L.

Denham, L, [Teller.]

Portland, D.

Drumalbyn, L.

Renton, L.

Elton, L.

Rodney, L.

Faithfull, B.

Saltoun, Ly.

Glanusk, L.

Sharples, B.

Glenarthur, L.

Skelmersdale, L.

Gridley, L.

Swinton, E. [Teller.]

Hornsby-Smith, B.

Trumpington, B.

Kilmany, L.

Vaux of Harrowden, L.

Lane-Fox, B.

Wynford, L.

Long, V.

Young, B.

Resolved in the negative and amendment to the amendment disagreed to accordingly.
8.40 p.m.
On Question, Whether the said amendment (No. 6) shall be agreed to?
Their Lordships divided: Contents, 43; Not-Contents, 43.

DIVISION NO. 4

CONTENTS

Airey of Abingdon, B.

Long, V.

Alport, L.

Lucas of Chilworth, L.

Avon, E.

Lyell, L.

Belstead, L.

Mancroft, L.

Boardman, L.

Margadale, L.

Brabazon of Tara, L.

Marley, L.

Brougham and Vaux, L.

Maude of Stratford-upon-Avon, L.

Cathcart, E.

Craigavon, V.

Mersey, V.

Crathorne, L.

Molson, L.

Davidson, V.

Mottistone, L.

Denham, L. [Teller.]

Mountevans, L.

Drumalbyn, L.

Portland, D.

Elton, L.

Renton, L.

Faithfull, B.

Rodney, L.

Glanusk, L.

Saltoun, Ly.

Glenarthur, L.

Sharples, B.

Gray of Contin, L.

Swinton, E, [Teller.]

Gridley, L.

Trumpington, B.

Hornsby-Smith, B.

Vaux of Harrowden, L.

Kilmany, L.

Wynford, L.

Lane-Fox, B.

Young, B.

91

NOT-CONTENTS

Airedale, L.

Llewelyn-Davies of Hastoe, B.

Ardwick, L.

Lloyd of Kilgerran, L.

Aylestone, L.

Lockwood, B.

Barrington, V.

McNair, L.

Bishopston, L.

Masham of Ilton, B.

Carmichael of Kelvingrove, L.

Mishcon, L.

Cledwyn of Penrhos, L.

Ogmore, L.

Coleraine, L.

Ponsonby of Shulbrede, L.

Collison, L.

Rea, L.

Cox, B.

Ross of Marnock, L.

David, B.

Seear, B. [Teller.]

Dean of Beswick, L.

Stewart of Alvechurch, B.

Ennals, L.

Stewart of Fulham, L.

Gaitskell, B.

Stoddart of Swindon, L.

Graham of Edmonton, L.

Taylor of Blackburn, L.

Hampton, L.

Tordoff, L.

Hatch of Lusby, L. [Teller.]

Underhill, L.

Houghton of Sowerby, L.

Vickers, B.

Jeger, B.

Wells-Pestell, L.

Jenkins of Putney, L.

Whaddon, L.

Kennet, L.

Winstanley, L.

Kilmarnock, L.

The Deputy Chairman of Committees: There being an equality of votes, in accordance with Standing Order No. 53, which provides that no proposal to amend a Bill in the form in which it is before the House shall be agreed to unless there is a majority in favour of such amendment, I declare the amendment disagreed to.
Resolved in the negative, and amendment disagreed to accordingly.
Clause 2 agreed to.
8.49 p.m.
Lord Denham: I take the feeling of your Lordships on this. We have overspread the normal time. If the noble Lord, Lord Kennet, is in agreement, and if nobody wishes to speak very much on the rest of the Bill and it will go through formally, perhaps we could finish it off in a matter of a couple of minutes. But if there is to be discussion on the further amendments I think the general agreement was that we should take it at the next time allotted.
Lord Kennet: I can move the amendments very quickly indeed but of course I cannot answer for what other noble Lords may wish to say about them.
Lord Denham: In those circumstances, we shall have to resume the Cable and Broadcasting Bill Committee because there is a second day allotted for the overspill in the Prohibition of Female Circumcision Bill. I beg to move that the House do now resume.
Moved accordingly, and, on Question. Motion agreed to.
House resumed.

Cable and Broadcasting Bill [H.L.]
House again in Committee.
Clause 5 [Applications for licences and prior consultation]:
Lord Aylestone Lord Aylestone moved Amendment No. 23:
Page 5, line 16, after ("writing") insert ("(and an application fee of such sum as the Cable Authority may reasonably require must be paid)").
The noble Lord said: In connection with the last amendment that we discussed on this Bill, the view of your Lordships generally was that the Cable Authority might make too much money in a particular year, and they were concerned about that position. This small amendment of mine does the reverse. It tries to provide a little money for the authority when they have not got any. The object of the amendment is that when a consortium makes application for a licence they should accompany that with a small application fee. It may or may not be appreciated that the work of considering an application for a franchise—or in this case a licence—is very involved and takes a long time. Should five or six applications be made at the same time within an area, the authority will be involved in a great deal of work investigating, researching and looking at the financial structure of the applicant, the programme objectives, and so on, as required under the legislation. And at that time, starting afresh, they will have no money other than the loan made to them by the Government.
I do not think it will be a hardship if, on application for a licence, a consortium is charged a small fee, which will have to be determined by the authority—perhaps £250, but it is a matter for the authority—at the same time as they apply for the licence. That would be a considerable help at that stage to the Cable Authority as regards the work they have to do. I am aware that in a rather different field—that is, as regards independent local radio—in some cases as many as nine applications have been involved, some of them perhaps mischievous or facetious. That is not likely to happen in this case, where a great deal of capital is involved in the application, but I feel it is worth considering. I beg to move.
Baroness Trumpington: The Bill as it stands enables the Cable Authority to charge fees on the grant and during the term of its licences. These fees will supply the authority with the income it needs to carry out its functions. The amendment provides that the authority should also be able to charge an application fee in respect of any application for a licence. The proposal has its attractiveness from the point of view of the authority and its licensees. It would add to the authority's sources of income: and it would be advantageous to its licensees since it would help to keep down the level of their licence fees. On the last point it has of course to be remarked that it would not be all saving for the licensees, as they themselves would have been liable to pay the application fees, but obviously it would be of some benefit to them. More generally, the existence of application fees might serve, as the noble Lord, Lord Aylestone, said, to deter frivolous applicants with no serious intention or ability to provide cable services, whose applications would needlessly waste the authority's time.
Now we come to the other side of the question. Against that has to be weighed the possibility that application fees might deter some serious applicants. The preparation of an application to provide a cable programme service calls for considerable investment of time and expense, as experience with the recent cable pilot project exercise has shown, and it might be considered unfair that the unsuccessful applicants should in addition have to pay a fee in order to reduce

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the licence fee payable by those who are able to reap the benefits of a successful application.
Where the balance lies is a matter which we should be happy to consider in the light of the debate. I am afraid I do not think that the amendment before us could be accepted, since the relevance of an application fee of this sort would be confined to those cases where there might be competitive applications. For some licences, such as those for restricted services under Clause 2(2)(b) of the Bill, competition will not arise; and in those cases it would seem odd, as this amendment would envisage, to require the payment of two fees. I hope therefore that the noble Lord will agree to withdraw the Amendment so that we could consider, if that were the wish of your Lordships, whether a more narrowly-drawn provision would be generally welcomed.
Lord Aylestone: In view of the fact that I have already had one amendment accepted, and in view of the generous offer that the noble Baroness has made, I am happy to beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Mottistone Lord Mottistone moved Amendment No. 24:
Page 5, line 25, after ("applications") insert "or (if any application or applications have been received by the Authority before publication of the said notice) other applications")
The noble Lord said: This is a small amendment which takes the point that at the moment the wording of subsection (2) of Clause 5 implies that the authority, before granting a licence, shall publish a notice which invites applications for the licence, That is perhaps over-abbreviated, but the point is that it does not allow for the enterprising chap who finds an area in which he might wish to lay a cable and approaches the authority and says: "I should like to have a licence". He says this on his own initiative. The authority might get that informtion and say, "Right, this chap has applied for his licence. He probably has something there; we have to have some competition and therefore we will act under Clause 5(2) and publish the notice inviting applications." But my chap has already applied and the object of my amendment is merely to allow his application, which he has already made, to be considered among the other applications that have come after the notice. That seems to me to be perfectly fair, because my fellow has taken the initiative and is a sensible chap. He will be more of a benefit to the public and will have what we want from these people.
So it is probably a matter of the wording of Clause 5(2) not being clear enough on this point. I shall listen very carefully to what my noble friend has to say, but I suspect that, even if the wording of my amendment is not quite right, we want to make it clear that people who have initiative and get ahead first should at least be given equal consideration, which at the moment the Bill does not appear to give them. I beg to move.
Lord Glanusk: I entirely agree with what my noble friend Lord Mottistone has said. Is it not possible to take this a stage further? If a satisfactory offer from a reliable contractor has been submitted, is it reasonable that the authority should, within the space of perhaps six months, be forced to advertise that area for a new applicant?
Baroness Trumpington: I hope for every reason that we can avoid making heavy weather of this, because I think that there is nothing between the Government and my noble friends on the substance. The problem arises simply from a difference of view of what Clause 5(2) means. The amendment seeks to make it clear that the enterprising friend of my noble friend Lord Mottistone can apply for a licence to provide a prescribed diffusion service without having to wait for the authority to solicit applications. In the Government's view, the amendment is otiose because the Bill already achieves that objective. The important point which my noble friends may have overlooked is that where a statute creates a licensing procedure it is open to anyone at any time to submit an application unless the Act specifically says something different. There is no need to state that someone can submit an application, because by definition he can. As paragraph 58 of the White Paper made clear, the Government accept that the market-led nature of cable will mean that the initiative for applications must rest largely with those who wish to make the investment. The authority, too, will be able to generate interest in particular areas if they wish but there is bound to be a two-way process. All that Clause 5(2) does, is to require the authority to give in all cases a general opportunity for applications to be submitted, whether or not one has already been made. In the light of that reassurance, I hope that my noble friends will feel able to withdraw this amendment.
Lord Mottistone: I take some of the points of my noble friend the Minister, but my noble friend Lord Glanusk asked: is there anything to jolly the authority along? One can imagine the situation in which an enterprising chap puts in his application and nothing happens. It is not strictly relevant to my amendment, but I notice that in Clause 5 there is nothing to ginger up the authority into taking action to create a notice when they have had pushing from behind. If there were, we should be a little happier. Otherwise, we might have to come back at the next stage of the Bill with an amendment to achieve a gingering process, in addition to the assurance that my noble friend has given us that there is nothing to stop us from putting in an application ahead of time.
Baroness Trumpington: In answer to my noble friend Lord Mottistone, the authority's general duty to promote cable means that it would not be at all proper for them to sit on applications and do nothing about them. But it must be right to leave the authority some discretion in the organisation of their workload. Obviously, they will not be able to do everything at the same time. May I suggest that my noble friend reads in Hansard the report of what I said first and I hope that that, together with what I have just said, will thoroughly reassure him.
Lord Mottistone: I am taken 95 per cent. of the way, but I reserve the other 5 per cent. to come back on at a later stage. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
9.5 p.m.
Lord Mishcon Lord Mishcon moved Amendment No. 25:
Page 5, line 31, at end insert ("to this end shall cause to be published in that area a list of all applications relating to that area together with suitable extracts from such applications of the information supplied by each applicant under section 6(2) below; and")
The noble Lord said: If the Committee will be good enough to turn to the wording of Clause 5, Members will see a marginal note Applications for licences and prior consultation. The clause recognises in subsections (2) and (3) that there is a duty to ascertain public opinion before granting licences, so that the views of the public can be properly brought before the authority prior to their making a decision. That is very democratic and very fair. If your Lordships will now turn to Clause 6(2), there are set out there the various considerations which the authority have to take into account. That means that there should be an application and, one assumes, a questionnaire which will anticipate that answers will be given to the matters which the authority have to take into account.
If your Lordships ally what I have said about Clause 5 to what I have said about Clause 6, you will observe that there is nothing in the Bill which deals properly with what has to be brought to the public's attention before they can make any useful observations, and, quite obviously, what ought to be brought to the publics attention is a list of all the applications relating to the area and suitable extracts from the answers that have been given to the questions posed, in order that the material matters mentioned in the Bill and the answers made by the applicants can be before the public in every respect.
I have spoken in terms of suitable extracts, so it is not a question of a very long document. So long as there are suitable extracts, that is all that is required. They can be published, which will ensure that this is not the mere, empty camouflage of a public relations exercise but will enable the public in a particular area to take an intelligent interest in the various applications and to put forward their views. It is in that spirit that I move the amendment.
Lord Elton: I am grateful to the noble Lord, Lord Mishcon, for bringing forward this issue. At present there is nothing in the Bill to stop the Cable Authority from doing what he wants. The present drafting of the Bill is similar in this respect to the obligations placed on the IBA by the Broadcasting Act. The practice of the IBA is to make available to the public copies of applications for ITV and ILR contracts. Applicants are allowed to indicate if there are particular pieces of information which are confidential. However, the Government are prepared to accept the noble Lord's argument for some strengthening of the Cable Authority's obligation on this point.
The amendment as it stands needs some technical attention. The Government would wish to consider further just how a new duty might be framed, particularly in order to ensure that it does not have the effect of preventing the authority from receiving any material from applicants on a confidential basis. On the understanding that the Government will prepare an amendment to bring forward at a subsequent stage
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of the Bill, I hope that the noble Lord will be content not to press his amendment.
Lord Mishcon: It is absolutely wonderful what a dinner recess can do to the noble Lord the Minister in making him so agreeable. Obviously I am very happy to accept his undertaking. In those circumstances and with, I hope, good grace, I ask for the Committee's leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Glanusk Lord Glanusk moved Amendment No. 26:
Page 5, line 36, at end insert—
("( ) Where an application for a licence is for the provision of a prescribed diffusion service in any area by the person who is at the time of the application providing a prescribed diffusion service in that area or a substantial part of it ("the existing prescribed diffusion service") the Authority' may grant a licence without complying with the requirements mentioned in subsections (2) and (3) above, where the Authority is satisfied as to the following matters—

(a) that the applicant has not failed to any material extent to comply with any conditions of his licence for the provision of the existing prescribed diffusion service:

(b) that the programmes included in the existing prescribed diffusion service have been of a high general standard in respect of their content and quality; and

(c) that the terms and conditions upon which the applicant has provided the existing prescribed diffusion service to subscribers have been reasonable.").

The noble Lord said: Clause 5 makes no attempt to differentiate between the applicant applying for the first time for a licence in a new area and the contractor applying after his first term for the eight-year extension. At the same time, Clause 5 lays down an elaborate procedure which the authority has to go through before granting a licence. This includes holding public meetings, consulting the local authority and inviting applications from various contractors. This can lead to very lengthy delays before the authority is in a position to say whether or not it will grant a licence. It can even, in an extreme case, result in the service to the public in a particular area being cut off.
We believe that the position of a contractor applying for the renewal of his licence is somewhat different and should have different criteria attached to it. We believe that, provided he fulfils the three conditions laid down in this amendment—namely, that he has kept his nose clean and has behaved himseff, that his programmes have been satisfactory and that the terms and conditions he has offered to his customers have also been satisfactory, including the cost—he should be granted a renewal. I beg to move.
Lord Elton: The amendment moved by my noble friend Lord Glanusk would have the effect that companies licensed to provide prescribed diffusion services could normally expect to have their licence renewed unless they had fallen short in some specific way, whether in respect of the licence conditions relating to the general quality of the programmes or in respect of the terms on which the service is provided to the subscriber. It is to the general principles of the renewability of licences that we should turn our attention rather than to the phrasing which my noble friend adopts in suggesting that we should do this in a different way.

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That is because his intention is, I fear, in conflict with an important principle. That principle was spelt out clearly in paragraph 74 of the White Paper. Although the Bill in no way rules out the provision of more than one prescribed diffusion service in an area, in practice such services will inevitably constitute, in a normal case, a de facto local monopoly—at least for the foreseeable future.
Given that situation, it seems wholly right to the Government that every company, however good its performance, should be required to demonstrate to the authority at the end of the licence period that it is the best candidate for the succeeding licence. We see no reason why a person licensed to provide a prescribed diffusion service should have a right, short of specific default, to continue to hold his licence in perpetuity.
The Government are convinced that competition is in the interest of the consumer. We believe also that what is in the interests of the consumers must in the end be in the interests of cable. A company which has done well and which can show that it is likely to do a better job than any rival applicants will in any case have nothing to fear. Equally, if Company A has performed adequately but another clearly superior application is made by Company B, it would be quite wrong if the public were denied the benefit of a better service simply because the existing licensee had an entrenched right to stay on.
More cogently, it would also be wrong if the merely adequate Company A were to be sheltered from the invigorating knowledge that Company B was likely to get the licence unless it started to deliver more than a merely adequate service towards the end of its licence period. We believe that the correct approach is for the authority to re-advertise licences once they have expired and to invite competitive applications. The authority will also have to undertake local consultations before they grant a fresh licence. This will give subscribers an opportunity to make known their views about the existing service and any new proposals. In this way, the existing licensee, if he is seeking a fresh licence, will have positively to justify to the authority and to the public that he ought to be allowed to carry on. Under the amendment, he would merely have to show that he had not stepped over any one of three rather broad lines.
Although this amendment might well be in the interests of the cable companies, I believe it would not be in the interests of open competition or of the consumer—nor, in the long term, to the benefit of cable development itself. I am afraid that my noble friend has not persuaded me that the position we took in the White Paper was wrong. I hope that on reflection he will be able to tell me that he shares my view of the beneficial effects of competition, and that he will not press his amendment.
9.17 p.m.
Lord Mottistone: As your Lordships will know, I am absolutely dedicated to competition and think that all noble Lords opposite who do not believe in it do not understand how life works. In this particular case, there is one point I should like to put in the mind of the Government. There is a great deal of difference between the investment which a company will have to
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make to get cable going and the investment which has to be put in by companies which are operating in independent television. There is just a possibility that the question of going through the application exercise again before being granted a new licence is dictated in the way that it is in the Bill by the experience gained with ITA's similar system.
There is an immense difference between the amount of money that has to be invested to get a cable going and that to provide a programme. I can say this because I have no interest in cable television at all; some of my friends cannot say that. The Bill keeps the two as separate operations. We heard about this earlier. The providers of the cables come under the British Telecommunications Bill and the providers of the programmes come under this Bill. In most cases they are the same people, and they are having to invest a great deal of money and to take an enormous risk. What they have learnt from the other side of the Atlantic is not an encouragement to them.
In order to provide this great service, as I believe it will be, they are having to take a great deal more on their shoulders financially than any other similar bodies. I am not arguing against competition. I believe there ought to be competition, and to that extent our amendment probably requires some rehashing. But when it comes to the question of relicensing, I believe it would be more fair if there was something other than a rehash of the original notification and licensing procedure; an easier way to give a slight advantage to those people who have taken the risk in the first place. I do not know whether I have got my arguments across, but the picture is different from what I believe the Government thought it was.
Lord Mishcon: This is not the time, at 20 past nine in the evening, to indulge in comparative political theory. I would say only that the noble Lord, Lord Mottistone, misinterprets the view of the Opposition, which favours in a mixed economy that there should be competition in the private sector. It is only when there is unfair competition with the public sector that the Opposition raises its voice in a most eloquent and powerful way—but nevertheless fails to persuade the noble Lord on every single occasion.
Having said that, may I say that I agree with everything that the noble Lord the Minister has said. It obviously would be quite wrong to alter the wording of this Bill—because that is what the amendment would effectively do—by granting a licence for 12 years, with an option for the licensee, provided he has behaved himself, to renew for another 12 years and then for another 12 years; in other words, it would be an eternal licence provided he behaved himself. Then he would shield himself completely from the competition which the noble Lord seems to be able to support on every conceivable occasion in theory; but once we deal with it in practice and it hits at some of the people he is trying so fervently to protect, all of a sudden his ideal of competition fails him. This is a bad amendment and should be opposed.
Lord Glanusk: May I say this in defence of the amendment. We have given the contractor a fairly rough ride so far. We have said to him, "You can have a licence. It will have lots of conditions attached. None

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of them means anything, because we are going to alter them whenever we like. We are going to charge you a licence fee; we are not going to tell you how much it is; we can vary that whenever we like. Now we are saying that there is going to be no continuity without heavy competition, even though you have behaved yourself, your prices are right, your programmes are good; there have been no objections in the past 12 years from your public; still you cannot have a renewal of your licence." I think that is a fairly tough proposition to offer to a man who is going to invest several million pounds if not fifties of millions of pounds. I think that is fairly tough on him, and you still do not give any way.
Lord Drumalbyn: May I interject one point here? Is it quite fair when admittedly the licensee has done pretty well and has not put a foot wrong, to allow someone else to come along, without being able to give any proof whatever, and say, "I can do better than that", and merely on argument convince the authority that it would be worthwhile trying him? I am not sure that is quite fair. I wonder whether there is not some means of getting over that difficulty. For example, would it not be fair to allow the authority to put to the licensee, "Yes, you have done pretty well but that does not mean you have been perfect. We should like to discuss with you ways in which you could improve your performance, and compare that with what the new applicant says he could do". Then they could make a decision. They could say, "On the basis of what you have done we can find no fault in that; but we have seen an application from somebody else and it looks to us as though it could make improvements on what you have been doing". But it may not do so; the authority may prove to be wrong.
Earl De La Warr: It seemed to me that the noble Lord, Lord Mishcon, had understood the intention of this amendment slightly differently from my understanding of it, as to the number of years. He said this is perpetual motion: you can go on for 12 years and another 12 and another 12. I had understood it—it may be that I am wrong, and it may be that it would have to be redrafted to achieve it—that the intention was to let the initial man who had had it for 12 years go on for another eight years, and that would be all. If we have failed to do that, so be it, but it may be something which the Government could consider,
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having regard to the points that my noble friends have made.
Lord Elton: I am very much obliged for the support from the noble Lord, Lord Mishcon, and I only hope that it has not rendered my noble friends more suspicious of my advice than they otherwise would have been. May I say this to them? My noble friend Lord Glanusk movingly pointed out the difficulties and risks which beset the original applicants for the original licence. We have already reflected this in the Bill by the granting of a licence initially for 12 years and subsequently, as my noble friend Lord De La Warr rightly reminds us, for eight years. Therefore, the initial risk has been taken account of and there is the further consideration that the clock will not run until the programmes go out, which we discussed on an earlier amendment.
The noble Lord, Lord Mishcon, is right that this amendment envisages that the original successful chap, who may have won by a whisker—perhaps wrongly—from someone else, gets his 12 years and reckons it is worth spending the money, has genuinely taken the risk as a good investment, knows that he may not have more than 12 years in which to recoup his money—goodness knows, that is a long time in most commercial terms—may suddenly be given, as a sort of bonus or windfall, the right to remain for ever in situ provided he keeps his nose clean.
My noble friend Lord Drumalbyn now asks whether there is some compromise and would it not be possible to have a procedure in which the initial contractor says what he proposes to do in the next eight years and others would say what they propose. That is exactly what we suggest. That is the relicensing system as we see it and which, as I read the amendment, my noble friend Lord Glanusk wishes to avoid. Therefore, I hope I shall not be quite so vigorously supported by the noble Lord, Lord Mishcon, on the next amendment, when I hope to be reasonably well disposed towards my noble friends, in case I fall out there. But I cannot happily take on board what they recommend now.
Lord Glanusk: I think I recognise when my noble friend on the Front Bench has turned his toes in, and I ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 5 agreed to.
Clause 6 [Matters to be taken into account]:
9.28 p.m.
Earl De La Warr Earl De La Warr moved Amendment No. 27:
Page 6, line 24, leave out paragraph (d).
The noble Earl said: Clause 6(2) gives guidance to the authority on certain aspects of the applicant's intentions with regard to the programming: the range and diversity, the origin, the educational and what I call the participative content that is envisaged. With one exception these are very reasonable things to look at, and they have my full support. However, what is not clear to me, at any rate, is the purpose of paragraph (d):
"the extent to which the applicant or each applicant proposes to include programmes provided otherwise than by himself or by associates of his".
That seems to add nothing to the guidance that is given to the authority. Because something that is short on meaning can often cause confusion, I believe that for the sake of clarity this particular paragraph would be much better left out. I beg to move.
Lord Mottistone: I support my noble friend Lord De La Warr. Paragraph (d) really does not mean anything at all. There is not much more that I can say. It has no significance within the framework of the other paragraphs in the subsection. I entirely agree that it therefore detracts from the value of the Bill and would be best out of it.
Lord Elton: Perhaps I can explain what I believe the paragraph means. Ever since the report of the inquiry chaired by the noble Lord, Lord Hunt of Tanworth, it has been recognised that each local operator is likely to have the monopoly of the supply of cable programme services in his area, at least for the foreseeable future. Against that background it is important that the Cable Authority should be in a position to see that its licensees use that privilege in a way that is in the best interests of consumers. One particular consideration which, in the Government's view, needs to be borne in mind is that operators might be tempted to acquire a disproportionate amount of programming from sister companies of theirs within the same group. A situation could arise, therefore, in which the local operator unreasonably restricted the range of programme sources from which the local blend of services was constituted. In other words, he might use his monopoly position to the detriment of the consumer who would be denied access to a wider range of programming simply because of the corporate links of the licensees.
This is also a consideration which the authority will need to take into account in exercising under Clause 7(3) its oversight of ownership arrangements which might lead to results adverse to the public interest. So there is a degree of overlap there. But we took the view that the authority should at the licensing stage be required to look at not just the range and diversity of programmes, as Clause 6(2)(a) requires, but also the range and diversity of programme sources, and in particular whether they extend outside the corporate family of which the applicant is a member. That is the reason for Clause 6(2)(d). I wonder whether in fact that explanation will satisfy my noble friend.
Lord Winstanley: In the light of the explanation of the noble Lord the Minister, since his concern apparently is not that an operator should include too little of other things but too much, should the wording not be:
"the extent to which the applicant or each applicant proposes not to include programmes provided otherwise than by himself or by associates of his"?
Surely that is the sense which the noble Lord has expressed.
Lord Elton: It does not matter which side of a coin you look at, you still know what it is worth.
Lord Mottistone: My noble friend the Minister surely would agree that the criteria which he gave us for having paragraph (d) are entirely met by paragraph (c). The trouble with paragraph (d) is that it gives no guidance at all. It gives guidance only if one has a preconceived idea of what it means, and surely one of the things about the law is that one should not have a preconceived idea of what it means. The paragraph could mean that one wants the operator to have more programmes, which I think the noble Lord, Lord Winstanley, was trying to say. Our objection is because the paragraph is meaningless and not because of the sense of what is required. I think that the provision is covered by paragraph (c). If paragraph (d) is to be retained, it needs to be reworded so that it conveys what the Government actually want it to convey, which it does not do at the moment.
Lord Elton: None of us wants to spend too long on this matter this evening. What worries me is that, although invited to do so, my noble friends will not rely on the provisions of Clause 7(3), which I thought that they might say render the proposal superfluous. That means that they intend to do dire and terrible things to subsection (3) in Clause 7. But that is merely a straw in the wind.
At this late hour, since so many experts in the English language tell me that paragraph (d) does not mean what I believe it means, I think that I had better take it away and maybe bring it back next time, or maybe not.
Lord Mishcon: I hope that the noble Lord the Minister realises that I responded to his suggestion made on the previous amendment, that in order that he could succeed in what he said I should not participate or give him support. I have tried awfully hard to obey his instruction.
Lord Elton: The idea did not seem to work, but I am grateful to the noble Lord.
Earl De La Warr: I am most obliged to my noble friend for his offer. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 28 not moved.]
Lord Ardwick Lord Ardwick moved manuscript Amendment No. 28A:
Page 6, line 29, at end insert—
("( ) the proposed charges and charging structure proposed to be levied on the licensee's customers;
The noble Lord said: This is an amendment to Clause 6, which is a splendid clause, stating what the authority should take into account when granting a licence. In a very grand subsection the authority is told to take into account,
"all matters appearing to them to be relevant".
However, not satisfied with that, the Bill goes on to list some of the very important matters, such as the range and diversity of the programmes, the extent to which the applicant proposes to include in the programmes matter from the EEC, as well as programmes of an educational nature and those relating to local affairs. That is splendid.
Our amendment adds to the list; it is a simple addition. No doubt the authority would take into account the matters that we propose, bearing in mind that it is to take into account all matters that appear to it to be relevant, but, just as certain matters are spelt out, we think that it is perhaps useful to spell out yet more. These include, for example, the charges that the company proposes to levy on the customers, the timescale for cabling the franchise area, the method of dealing with and redressing consumer complaints, and the quality of the technology which the applicant intends to deploy.
No doubt the authority would seek such information from each applicant, but it is as well to spell it out, and it seems essential that the rights of the customer should be as fully safeguarded as possible, bearing in mind that the successful licensee will have a monopoly cable service. The procedure should also ensure that the customer gets what he wants at a reasonable cost and that this should continue for the duration of the licence. I beg to move.
I should like to add that, in order to save time, in moving Amendment No. 28A, I have spoken also to Amendments Nos. 28B, 28C, 28D and 28E:
Page 6, line 29, at end insert—
( ) if appropriate the time scale within which the applicant proposes to cable the franchise area;
at end insert—
( ) the method which the applicant proposes to adopt to deal with consumer complaints about the cable service provided and for handling problems of consumer redress;
at end insert—
( ) the extent to which the applicant intends to provide services through a physical system deploying the most advanced technologies;
at end insert—
( ) the extent to which the applicant intends to provide, or secure the provision of, telecommunication services;").
I do not think that there is very much in them that is controversial; at least I hope that there is not.
The Deputy Chairman of Committees (Lord Alport)The Deputy Chairman of Committees (Lord Alport): Amendment proposed,
Page 6, line 29, at end insert—
("( ) the proposed charges and charging structure proposed to be levied on the licensee's customers;
Lord Elton: I understand that the noble Lord the Deputy Chairman is referring to a manuscript amendment which I have not seen, but which I have heard referred to, but that we are actually speaking to the amendment on the Marshalled List.
The Deputy Chairman of Committees: I am under instructions that I am to call not Amendment No. 28, but Amendment No. 28A, which is as I have read out to the Committee.
Lord Mishcon: Perhaps I may briefly clarify the position. As one would expect, the noble Lord the Deputy Chairman is absolutely correct in what he has said. Our proposals are divided into five amendments. For the convenience of the Committee, my noble friend Lord Ardwick has spoken to all five, though technically he is moving Amendment No. 28A.
Lord Elton: I am most grateful; help is coming in on every side. I was aware of what was intended, but I had thought that it was not going to be pursued. If I may, I intend to speak to all the amendments—including presumably Amendments Nos. 28A. B. C. D and E—and I hope therefore to expedite matters because, I regret to say, there is quite a lot that I have to say, though I shall try to compress it.
This matter broaches a wide and interesting area, and there is indeed a wide range of factors which the authority will need to consider before granting a particular licence. That is recognised in Clause 6(1), which requires the authority to take into account all matters appearing to be relevant. Those matters will of course vary from case to case, depending on the type of licence and the specific circumstances in which each is granted. Nor could we expect to produce a list of considerations which was absolutely complete, or which contained nothing that was irrelevant to any particular case. Experience might well prove that some factors are unnecessary, but much more likely, and I should say much more importantly, experience would reveal that some which had been omitted were in fact very important.
Your Lordships might therefore ask why are we ourselves proposing a list at all under Clause 6(2). The list is there because the Government take the view that there are certain particularly important matters concerning the services which an applicant intends to provide which the authority should always consider before granting a licence for the provision of a prescribed diffusion service.
I shall not enumerate examples. Cable offers a pathway for more than cable television. For that reason, the authority will in all cases have to consider what related services may be provided alongside the television channels, and that is worth referring to. Applicants will therefore be able to make promises about what they will provide for this sort of service. Where they make promises, the authority will have power under Clause 4(6) to insert conditions in the licence to hold them to those promises.

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I now turn to the five additional considerations to which the noble Lord has referred. I believe that I am right in saying that three of them, as drafted, are outside the scope of the authority's powers and duties. The actual cabling of an area, which must mean the installation and running of the physical system, is, as we have now established, a matter for my right honourable friend the Secretary of State for Trade and Industry, the Office of Telecommunications and the Telecommunications Bill. Of course it is true that the Cable Authority will, in parallel, be concerned with the rate at which services are to be extended through a particular area. Indeed, under Clause 4(8) it has a duty to use its powers in the manner best calculated to promote the provision of cable services. This must mean that an applicant with plans for developing services throughout an area at the earliest date will, other things being equal, take precedence over someone with a less dynamic approach. We believe that this is sufficient provision without a specific duty in Clause 6(2) and that the other structural aspects in the noble Lord's third and fourth proposals fall properly outside the Bill.
Questions relating to cable technology and telecommunications services are for the telecommunications licensing authorities rather than the Cable Authority. Two further criteria are offered in the list which the noble Lord so ably urged upon us. The first relates to charges. The Government do not believe that it is necessary or, indeed, right to give the Cable Authority a role in controlling or overseeing charges which cable operators make to the public for the services that they provide. Cable companies will have to work very hard to persuade consumers to subscribe and to continue subscribing when there are other competing claims on their pockets in the home entertainment field, including particularly the video cassette recorder and later, of course, other technologies. The Government do not favour price controls as a normal tool of economic management. We do not see a need to depart from that general principle in this area.
The final criterion is on consumer complaints. I agree that the Cable Authority may well wish to satisfy itself, particularly once a service is operating, that the licensee is taking appropriate steps to deal with them. But the Government do not believe that this is a point that needs to be picked out for special mention in Clause 6(2), particularly as, at that stage, it is doubtful whether any applicant would be in the position to offer more than the most general of assurances. I hope that I have not spoken too fast or left out too much but the noble Lord will gather that I do not like, on the whole, what he proposes.
9.43 p.m.
Lord Mishcon: With that, one has to be democratically content. Nevertheless, it is still possible to urge upon the Committee, on what is really a completely non-political matter, commonsense and justice. Again and again, Members of the Committee on all sides of the Chamber have shown that they are worried about the artificial severance of the Telecommunications Bill from this Bill. To hear the Minister say on behalf of the Home Office, which he represents with such elegance
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and ability, that this is really a matter for another department and another Bill when we all know that the things are interconnected just underlines the difficulties that we are all under as a result of the severance of these departments when looking at Bills which are relevant one to the other.
When the point is made that two of these provisions are really within the purview of the Telecommunications Bill and the other department, it shows the absurdity of this artificial separation and underlines the need for us to see in this Bill that the two considerations that ought to apply are in fact applying to those who are granted licences. That is an obvious clarification, I hope, of the duties of the authority; I have no doubt, in conjunction with the other department.
What we are endeavouring to do, as the noble Lord the Minister has fairly said, is to put in this Bill the essential requirements before the public—who are entitled to comment—and the authority grant a licence. If you have that aim, in my submission and that of my noble friend who, as the noble Lord the Minister graciously said, very ably moved this amendment, what is in our mind is purely and simply those essential ingredients that the authority and the public ought to have in their minds.
To say that the question of proposed charges is something that the authority does not want to oversee, merely leads one to the public relations exercise that I referred to before. I assure the noble Lord the Minister that the public are interested in this and if, indeed, there is a choice between two, three or four applicants, and one or two of those applicants intend to make an excessive charge if they get this monopoly for 12 years, but the others when offering rather similar services are prepared to offer them more cheaply, that is obviously something that will activate the minds and the views of people in that area and ought to be very relevant to the authority when they are considering applications. That is the first point. I have dealt with the technological matters.
The next point is this. The noble Lord the Minister made an excellent point when we were discussing an amendment which was not clear to me—and I frankly say it in my ignorance. I did not realise, as I told the Committee, that the time of 12 years started from the commencement of the actual programmes; I thought that it started from the grant of the licences and that would be the time when the licence was granted by the authority. I see other noble Lords nodding their heads and I think they were under the same misapprehension, if misapprehension it is.
If that is so, again one of the most material considerations before the public and the authority will be paragraph (b) which is, if appropriate, the time scale within which the applicant proposes to cable the franchise area. One applicant may say: "I am doing this on the cheap and I must admit it. That means that I have got a contract here to cable the franchised area which is going to take me seven years because the contracting party supplying the cable says he is prepared to do it as economically as that if he can put it behind all the other work he has in priority, and if you give him five years in which to do it". Whereas of

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course another applicant may say: "I am perfectly prepared to see that this area which needs cabling is going to get the service within a very short period of time". That ought to weigh with the authority. It is an essential matter and it will weigh with the public.
Having said that, this is an attenuated if extremely high quality Committee at the moment, and I do not want in those circumstances—and nor do my noble friends—to start the Division Bells ringing, because in my judgment, it will not reflect the views of a full Committee or a better attended Committee. I hope that the noble Lord the Minister, listening to the arguments that have taken place, will say that maybe these are essential ingredients; and maybe, too, if other essential ingredients become necessary, the authority in its wisdom will rely upon the general provisions of the Bill that they have to take into account relevant considerations.
I hope he feels also that this most desirable relationship with the provisions of the Telecommunications Bill, the telecommunications authority and the department, will at least find its way into those matters which are relevant to both authorities when considering the grant of licences. If the noble Lord the Minister will respond with his customary generosity (not shown overmuch so far in the debates that have taken place, but coming their way slowly now and again) I hope that he will find it possible on this occasion to say that he will favourably reconsider.
Lord Elton: I am afraid that the noble Lord expects rather a lot of the dinner hour! I hope that my reply will be rather like the way in which the noble Lord described the Committee—attenuated, but of high quality. I am first opposed to the list before us, because I think lists are dangerous things and we already have as much of a list in Clause 6(2) as we want. My second and more particular response is to the technological arguments which the noble Lord, Lord Mishcon, so persuasively put forward. Under Clause 4(8) the authority is bound already to push forward cable and although it is not responsible for "cabling", as it has been described, it is responsible for seeing that the opportunity to be cabled arises as quickly as it can. That is one of its statutory functions. Therefore, it is already going to consider that matter, although we do not propose to list it in Clause 6(2).
The noble Lord was also anxious about pricing. Here there is a difference of some importance between us because we believe that, if the contractor offers too high a price, then he will not get subscribers, he will not make a profit and he will fail. If he offers too low a price, then he will get lots of subscribers but he will not make a profit and he will fail. That is the operation of the market. We do not think that the authority ought to say, "You shall charge this price". But that is, in effect, what it would be doing if it had an auction and decided the licence on the basis of the auction.
The noble Lord does not find those arguments persuasive, but they must be enough to convince him of the reluctance with which I would take this matter away. In fact, I am reluctant to take the matter away, and I am afraid that I shall have to ask him if he would be so kind as to do so.
Lord Ardwick: Where there are competitors for a licence, the price that they are going to charge the public must be an important factor in the choice of which company is to have the licence. Surely that must be so. That is the intention of the provision.
Lord Elton: Indeed, and that is why we have Clause 6(1) which demands that the authority shall indeed:
"take into account all matters appearing to them to be relevant".
I am sure that they will share the noble Lord's view, which is mine.
Lord Mishcon: Quite obviously the great difficulty is leaving things vaguely in a Bill; taking it for granted that the authority will consider whatever it may be, and leaving over the argument to applicants that it would be quite wrong for the authority to consider prices because in the matters of importance that were set out on the applications, the price charged to the consumer was not even mentioned.
There is no purpose in my wearying your Lordships with further speeches or arguments on this matter. It is obvious that the Minister in his wisdom or on the advice that he has received—and the two are not always the same—has decided to be reluctant about promising anything in regard to these amendments. These are important considerations and I believe that the sensible course, if my noble friend agrees, is to withdraw these amendments—and I know that I am only speaking to Amendment No. 28A—at this stage, and to bring them forward again at the Report stage when it would be my hope (hope being eternal in the human breast) that the Government, on reading the report of what has been said, will find it possible to concede at least some of these amendments. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 28B, 28C, 28D, 28E and 29 not moved.]
Lord Mishcon Lord Mishcon moved Amendment No. 29A:
Page 6, line 29, at end insert—
("(f) whether the applicant is (either alone or in partnership with one or more other persons) entitled to the benefit of one or more existing Licences granted under the Act and;
(g) where the applicant is a body corporate whether that body corporate or any associate of that body corporate or any participant in that body corporate or in any such associate is—

(i) entitled to the benefit of one or more existing licences as aforesaid; or

(ii) a participant in a body corporate so entitled or included among the persons so entitled; or

(iii) a participant in an associate of a body corporate so entitled or so included;

and having regard to any matters ascertained by them under this subsection, the Authority shall consider whether, if the proposed licence was granted, any one person would, in any one or more of the capacities mentioned in paragraphs (f) and (g) above or in any combination of any such capacities, have an aggregate interest in the benefit of two or more licences. If in such circumstances it appears to the Authority that an applicant would have such an aggregate interest and that having regard to the nature and extent of that aggregate interest and any other circumstances appearing to the Authority to be material to the existence of that aggregate interest it would constitute an undesirable monopoly either regionally or nationally, the Authority shall refrain from granting the licence to such an applicant.

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( ) In this section "participant", in relation to a body corporate, means a person who (whether alone or jointly with one or more other persons, and whether directly or through one or more nominees) holds or is beneficially entitled to not less than one-twentieth of the shares in that body corporate".)
The noble Lord said: This looks like a long and complicated amendment. However, if your Lordships will pay me the courtesy of not reading every word of it but of listening to what I hope will be a simple explanation of it, it may make life easier and, indeed, expend less time. The Broadcasting Act 1981 saw fit to include in Section 26 provisions which stated that where it looked as though there was a harmful monopoly, a contract under that Act would not be granted. We are not dealing with contracts; we are dealing with licences. However, in my submission, the same provisions should be included in this Bill when we are dealing with licences and where the authority is satisfied that an applicant is interested in another licence which has been granted.
Noble Lords would probably immediately round on me if I left the argument there because they might well take the view that in certain cases it would not be harmful, and the authority could not reasonably find that it was harmful, that someone—be it a company, individual or a firm—who was interested in another licence should be precluded from a second licence. Therefore, noble Lords will see that I have met the point—as, indeed, the Broadcasting Act met the point—merely by saying that this is one of the matters that the authority, on finding that there was an interest in another licence, should consider with a view to seeing whether it would constitute an undesirable monopoly, either regionally or nationally, and then and only then (and I continue with the last line and a half of the amendment before I reach the manuscript amendment):
"the Authority shall refrain from granting the licence to such an applicant."
So it is only in a case where it is seen by the authority to be an undesirable monopoly, either regionally or nationally, that the authority is being called upon to refuse that application.
Perhaps I may now explain the manuscript amendment. This was my fault; in tabling this amendment, I redrafted—but only making changes where they were necessary—Section 26 of the 1981 consolidating measure. What I omitted to do—and I only realised it this morning—was to define the word "participant", which is defined in the Broadcasting Act 1981. When I discovered that this morning I took the liberty of asking the ever helpful Public Bill Office whether they would kindly ensure that this came before your Lordships' Committee as a manuscript amendment in order to complete the amendment before your Lordships.
I repeat, this is the spirit of the section of the Broadcasting Act carried into this Bill and it is not mandatory upon the authority to refuse; it is only within its discretion when it finds that the grant, as it were, of a second licence or perhaps a third would be harmful within the wording of the amendment. I beg to move.
Lord Elton: It is widely recognised that the provision of cable services will constitute a local monopoly, at
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least for the foreseeable future. I have said that once or twice; I think I shall leave it out of my next speech. That is not because the Government favour the creation of monopolies as a general principle. Indeed, there is nothing in the Bill to preclude the authority from granting more than one licence in a particular area if it judges that that would be in the best interest of the development of cable. But economics seem certain to dictate that one operator per area will be the norm.
The noble Lord's amendment seeks to ensure that these unavoidable local monopolies do not become the launching pad for regional or national monopolies which might operate against the public interest. I am glad to see that the noble Lord has put in the hedges and has said that this is not to be mandatory—that everything has to be properly considered. I am not sure how likely it is that such developments might occur. It must be remembered that the Cable Authority is required to advertise each prescribed diffusion service licence separately, and in every case the authority will have to consider how the grant of the licence will assist the promotion of cable services generally.
It seems doubtful whether the authority would consider that the interests of cable and consumers were best served by the sort of situations which concern noble Lords opposite. But that said, I am ready to concede that there may be scope to deal with the point rather more specifically in the Bill. I congratulate the noble Lord for the care with which he has drafted the amendment and the diligence with which he revised it this morning. Nonetheless, it does not offer quite the right solution and, if noble Lords agree, and if the noble Lord agrees to withdraw it, I shall undertake to consider whether we can bring forward a Government amendment at Report stage which would go some way towards what he wants.
Lord Mishcon: With the passage of every minute upon the clock the noble Lord the Minister is mellowing more and more. In those circumstances, and having regard to the courteous way in which he has dealt with this amendment and the undertaking he has given, I am delighted to withdraw.
Amendment, by leave, withdrawn.
10.2 p.m.
Baroness Faithfull Baroness Faithfull moved Amendment No. 30:
Page 6, line 29, at end insert—
("(ff) the extent to which the applicant or each applicant proposes to commit resources to the production of programmes of social interest and concern to the local community, which should not be less than one per cent. of gross annual turnover of the cable operator;
(gg) the extent to which the applicant or each applicant proposes to involve those living or working in the franchise area on the provision of the services provided under paragraph (ff) above.")
The noble Baroness said: I am slightly daunted in moving this amendment because on the amendment before last, in answer to the noble Lord, Lord Mishcon, my noble friend the Minister said that Clause 6 had as much in it as could be managed. I move this amendment, which has a slightly different slant from the other recommendations in Clause 6.
This amendment is tabled in the names of my noble friends Lord Seebohm and Lady Carnegy of Lour, and of the noble Baroness, Lady Masham of Ilton, and I hope is supported by others in your Lordships' Committee. The amendment is moved bearing in mind that cable programme services will be in a position to offer a social service to the local community by providing air time for local and voluntary organisations, local community groups and self-help groups, and will provide others with a genuine opportunity to be involved in the cable programme and to use cable programmes to disseminate information and act as a link between various voluntary organisations and individuals.
The problem lies in two aspects: the first is money and resources, and the second is methods. The groups of people to whom I refer are the vulnerable in our society—vulnerable as individuals and vulnerable as voluntary organisations. Voluntary organisations in this day and age and at this time are running into severe difficulties and have great financial problems to face. The amendment first recommends that 1 per cent. of the annual turnover of the cable organisation should be allocated to programmes which will help these groups in the community who for real reasons are not altogether able to help themselves.
Secondly, there are the methods. Many of these organisations are small. It is true that there are large voluntary organisations, such as the Spastics Society and Dr. Barnardo's, that have a good income, but I am concerned with the small organisations which have a very small income but which in the community are doing a good and essential job of work. They are not able to produce programmes; they do not have the mechanism by which to produce programmes. Therefore, it is hoped that one of the matters to be taken into account under Clause 6 would be that these organisations could be helped by the cable organisation to produce their own programmes.
Therefore in some ways this amendment, which is perhaps not as well worded as it might be, is to some extent an extension of the amendment of the noble Lord. Lord Mishcon, but it has a different slant and it refers to people and organisations who are vitally important in our society but who themselves have not got the resources. I beg to move.
Lord Seebohm: At this late hour I shall not delay your Lordships for long, but I must refer to the words used by the noble. Baroness, Lady Trumpington, when she moved the Second Reading of this Bill on 19th December last. I quote from col. 486 of the Official Report. The words are these:
"I believe that the development of new cable systems could pave the way for the growth of a whole range of new services of enormous potential for our economic, industrial and social life".
Nobody could possibly disagree with those words, but unless some resources are made available it just will not happen. A number of voluntary bodies, such as the Volunteer Centre, Age Concern, the National Council of Voluntary Organisations and so forth, have been discussing this for some months. They have gone into the matter at great depth and I will quote now from one of their statements, which says this:
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"It is clear from our own experience with existing broadcasting services and from cable services in America, Canada and Australia, that badly-made programmes will not get an audience".
We know that that is true. We also know that the voluntary organisations, which are now playing a greater and greater part in our social life, have neither the training, the resources nor the expertise to make programmes. But they must do this if we are going to have any effect at all. Nothing is worse than bad programmes: in fact they are more harmful than good. This will need money and there must be some form of resource centre where the money will come from. I cannot say that we have necessarily put down the right answer, but money will have to be found if those splendid words of the noble Baroness are to be implemented.
Baroness Carnegy of Lour: It is unfortunate that this particular amendment is being taken at this late hour because I believe it to be extremely important to the very fabric of the Bill and the potentiality of cable in this country. The amendment is an attempt, as my noble friend has said, to ensure that so far as possible in future not only do cable operators intend to offer programmes of local interest and concern and intend to employ local people and local groups but that this does actually happen, that it happens to an adequate extent, that it happens from the outset and that it happens successfully.
It is now widely accepted throughout the community that cable television is a potentially vital tool for the expansion and support of the work of voluntary organisations at local level. It is not clear, however, whether potential operators or indeed. I fear, the Government, appreciate how important this may turn out to be. In the Second Reading debate, my own small contribution was the only one specifically relating to this aspect, and in his summing-up the Minister did not in fact refer to the subject at all, although he has since written me a very helpful and courteous letter on the subject.
This is important not just for the voluntary organisations themselves but for the whole national strategy at the present time. The Manpower Services Commission's adult training strategy intends among other things to encourage people of all ages to use their spare time to keep themselves up to date and to keep involved for the sake of new work skills and for the sake of improving basic education in a variety of ways through such mechanisms as the Open Tech, through broadcasting and by many other means. This also has to happen through cable.
The whole field of preventive health care is involved. By remaining active and involved locally in local groups and local activities, older people, unemployed people and disabled people are far more likely to keep themselves happy well and active. In the field of crime prevention, especially among the young, clubs, societies, hobbies, interest groups and service projects are an important key to the problem of crime.
Voluntary organisations need ways to contact many more young people and involve them in a greater variety of activities, particularly in the great cities. The voluntary organisations have an enormous part to play in all this. They are willing to involve themselves to the

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hilt and are increasingly keen to do so through television. At national level, they already help the BBC and the ITV companies with back-up information and research for programmes in their particular area of concern. Some, indeed, have been appointed officials with media experience. But local programmes by local groups and local people present a very different problem.
We do not yet know how franchise operators will arrange their obligations under Clause 6, because so far these have not been published. Impressions in the areas concerned are being formed that access channels will be the way. The problem here is that companies will want voluntary organisations to produce programmes, and voluntary organisations will keenly desire to do so, but at this local level they simply do not have the money or the expertise to do so. The only way that this crucial interaction between voluntary organisations and the community can happen is if cable companies provide a good deal of help, of consultation, of advice in working up programmes, of script writing, of production, of camera team help and so on. Some mechanism has to be found to ensure this.
I accept that the Government do not want to limit the freedom of action of operators and I do not think anyone in the Committee wants that. But this amendment requires more precision in the consideration of the application, in so far as those areas in Clause 6 are concerned. It proposes that the resources to be devoted to this should be quantified and suggests 1 per cent. of the gross turnover of the operator. This would not be an enormous imposition. The customers of cable will be very interested indeed in what is local. It is likely to put up the number of customers and to increase the revenue of the company. Commercial viability is likely to be enhanced if this amendment is adopted. I hope that this, or at least some similar mechanism, can be adopted by the Government, if cable is to fulfil this particular function which is such a very important one for the nation.
Baroness Masham of Ilton: Voluntary organisations need all the help that they can get. The Government are most helpful to many such organisations, giving them grants to help them with their work; otherwise, some could not carry on. Our British voluntary organisations are the envy of many countries throughout the world. TV is the easiest way of getting a message across to the public. I hope that cable will give voluntary organisations an opportunity to do this. It will happen only if they can afford to do so. I gladly support the amendment.
10.15 p.m.
Lord Howard of Henderskelfe: I had not intended to intervene, but this amendment raises certain wider issues which relate to the community as a whole. I referred very briefly to this point in my Second Reading speech. One of the problems about television has always been that it is too large in its present form—with the independent television companies and the regions of the BBC—to do anything for communities which is really meaningful. The areas are too big and the number of inhabitants is too great. We see a much better picture of what might happen in
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local radio, again whether it be independent local radio or local radio provided by the BBC.
Where I differ slightly from the sponsors of the amendment is in the thought that you need a lot of professional help to achieve it. You do not. You need a minimal amount. It is quite extraordinary what can be done by volunteers within a community, whether they be official voluntary bodies or others. May I quote the example of Leeds local radio which was run for a week entirely, from top to bottom, by the school children of Leeds. They produced the programmes, wrote and read the news, went out and did all the interviews. All this is possible. All that is needed is only a minimal amount of help and resources and somebody to make sure that from the beginning there is a commitment to it. This is why I believe that this is one of the factors which should be written into the requirements for local cable companies.
If local cable can be fully involved with the community in this way—and I have no doubt that in most cases it will be, because it will be an audience-inducing potential—I believe that we can greatly enhance the community life of this country. Therefore I support the amendment.
Lord Mottistone: I support the principle behind the amendment but I should like to add a caveat. I cannot support the motion to write in the amount of money which should be put forward by the cable operators. This has spoiled two good points, in particular the first. It must be appreciated that the cable operators will not make a profit for several years. They will not be producing programmes of any kind for themselves for several years. Not less than 1 per cent. of the gross annual turnover of the cable operator is a vast sum. It would be much better to put it in other terms, if it has to be put in at all. It flaws an otherwise good amendment. The amendment speaks of the extent to which the applicant will commit resources to the production of programmes of social interest. If they are going to commit resources, then they are going to commit resources; you do not have to tell them what resources to commit. For those reasons, I do not support the amendment, although I support the principle behind it.
Lord Mishcon: On behalf of my noble friends and myself, may I say that we completely support the spirit behind the amendment. Obviously we await what the noble Lord the Minister has to say about any difficulties that there may be, which it is hoped can be ironed out. However, we wholeheartedly support the spirit behind the amendment.
Lord Winstanley: Just so that the noble Lord can be aware of the strength of the forces ranged against him—if they are ranged against him, which is not yet known—may I indicate that I and my noble friends on these Benches fully support the amendment moved by the noble Baroness, Lady Faithful!, and the two very important points made in it. I agree with those noble Lords who have expressed some reservations about the detail. I do not disagree with the noble Lord, Lord Mottistone. It would perhaps be a mistake to insert one per cent., half a per cent. or any other kind of per

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cent. In general terms, however, my noble friends and I on these Benches are not wholly enamoured of the idea of imposing upon the authority all sorts of constraints and instructions as to precisely what they should take into consideration on this or any other matter. We believe, however, that the two particular points contained in the amendment are at the very heart of the whole purpose of cable. The noble Lord, Lord Howard of Henderskelfe, is entirely right. The old BBC regions were too big. The BBC is too national and the area which it covers is too large. This has resulted, in a way, in television not being used much for the purpose for which it is ideally suited—that is, an information service and a community service. With cable, we have something catering for the community; something which can give real opportunities to community organisations and which can provide a genuine information service in the locality. It would be tragic if the cable operators did not undertake responsibilities of this kind.
In supporting the amendment of the noble Baroness, and if something of this kind is incorporated into the Bill, I should point out that we are not placing any kind of onerous burden on the shoulders of the cable operators. It is my view that sensible and wise cable operators will wish to do this. They would find it acceptable, good for their programmes, cost-effective, and good for the whole enterprise that they are heading.
Do not let us imagine that we are placing some terrible burden on cable operators. We are merely encouraging them to do what I believe any enlightened cable operator would wish to do. I hope that the noble Lord will be able to respond favourably to this amendment.
Baroness Lockwood: Perhaps I might add one further point to the excellent points which have been made in favour of this amendment, which I certainly support. At an earlier point in the Committee, when we were talking about representation on the authority, I made the comment that we really needed someone who was involved in grass roots issues and who knew about the feelings and the needs of the local community. In replying to that discussion, the noble Lord the Minister stated that consumers had one excellent weapon in their hands; they did not have to take cable, and that the success of cable depended on how many subscribers there were—that people could always withdraw from subscribing if they were not satisfied.
The amendment gets us away from that concept of cable and takes us into an entirely new area, where cable television need not be just another commercial channel but can actually become part of the community itself. It is in that sense that I believe this amendment needs supporting. Whether or not we should go for 1 per cent. I do not know, but there is a need to have some resources available. The only resources which could be available would have to come from the television companies themselves, and like many other noble Lords and Baronesses who have spoken, I believe that this would be a very good investment on the part of the programme makers.
Baroness Carnegy of Lour: Before my noble friend the Minister replies, I may remind your Lordships that people are prepared to pay a great deal to belong to different clubs and societies in which they are involved for the purposes of different hobbies. This could become a very large proportion of the income of a cable authority. Some noble Lords have regretted that a suggested figure of 1 per cent. of gross turnover is in the amendment; but if it has succeeded in exploring the issue by being worded in that way, then it was worthwhile. In fact, there could be a lot of money in this for a cable authority, and there could be a lot of money forthcoming from inner cities and from great housing schemes. The money may well be there, but it will only be forthcoming if there exist attractive programme enterprises in which people want to be involved.
10.24 p.m.
Lord Elton: My noble friends have drawn together a formidable and very distinguished alliance—if I may use that term without causing confusion—in support of what is obviously an idea of very great interest, some originality, and great attraction. We are a nation in which the voluntary spirit is very strong. You have only to look at the latest edition of Social Trends to see how strong it is. We rightly reiterate how fortunate we are to live in a society in which kindness to others and charity are regarded as things which should be expressed by people with a personal concern and not by Governments or institutions.
My right honourable and learned friend was fortunate enough to receive a delegation from Concern on Cable the other day, the members of which were very interesting in telling him what the voluntary movement was already doing to inform cable companies of the role which they would like to play in the development of cable. This is an important subject, and during your Lordships' debate an interesting and rather more appealing image of cable has emerged than existed before. I think it was Lord Howard of Henderskelfe who first referred to it as being intimate, which is a new concept. It was a cold light winking in the basement at one stage, in the back of my mind, but now it has become something warm and rosy.
What the noble Baronesses and others propose is that companies shall be selected, among other things, on the extent to which the applicant for a licence produces programmes of social interest and concern to the local community. It then puts a requirement that that proportion of their turnover devoted to this should be not less than 1 per cent. Finally, it says that a further consideration is the extent to which people living locally are drawn into the production of programmes. Noble Lords and Baronesses have explained how this would be done, in a really quite fascinating debate, I thought.
I will pass over the question of the list because the noble Baroness, Lady Carnegy of Lour, was kind enough to make the point for me about our aversion to lists. I would turn, instead, first of all—and this is not a quibble—to the terms of what it is the amendment asks us to favour. I think I know what is meant. I do not think it is what is in the amendment, and I am not certain that it would be very easy to draft what is

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meant. A programme of social interest and concern to the local community might well be a programme on how to live with a handicap in the community, or it might be about the developments planned in the area which might affect the ecology, and so on. But in fact "a programme of social interest and concern" is a term which you can apply to "Dallas", I regret to say. It is in fact an absolutely all-embracing term. I am not saying this as a quibble, because I am sure a quibble would not be accepted and at this time of night I would not be brave enough to bring one forward.
Lord Winstanley: If the noble Lord would allow me to interrupt, if he refers to the text he will see that it says "of social interest and concern to the local community". Does he mean that "Dallas" is of interest to Dallas?
Lord Elton: If the noble Lord chooses to go to any local community he will find that "Dallas" is, I think, 16th on the list of popular viewings in the national hit-parade. I think it is "Coronation Street" which is at the top, and that is a programme of local interest and concern; it is full of social issues. If the characters in that programme conduct themselves towards each other in a way in which the voluntary agencies think is appropriate, I suppose they would favour this definition, and if they conduct themselves with cruelty and inhumanity perhaps they would not.
I will not go on with this because I am sure that on reflection your Lordships will see that there is a very important point here: that the amendment does have to say in much more specific terms what it is that this 1 per cent. is to be devoted to before it will have the effect that my noble friends and others wish.
My second comment is couched in terms grateful to my noble friend Lord Mottistone for bringing in a reference to the economics of this matter. If, as the noble Lord, Lord Howard of Henderskelfe, suggested, this is a profit-inducing idea or if, as my noble friend Lady Carnegy of Lour suggested, this is going to generate profit, it is something that the companies are likely to do anyway. But, as my noble friend Lord Mottistone said, it will be some considerable time before cable is into profit at all. Indeed, what worries most critics of our policy is that cable is not going to succeed because it will be so difficult to make a profit.
I am not a businessman, but it seems to me that one can have an enormous turnover and virtually no profit. This amendment requires a company with a turnover of £1 million to pump, I believe, £10,000 into this operation, but the company's total annual profit may be only £12,000. So my next anxiety about the proposals put forward by my noble friends and others is that the mathematics are wrong. If we favour anything like this at all, I should be very reluctant to see this sort of arithmetic. In fact, I am not sure that I want to see any arithmetic at all in what is proposed because, on the one hand, I should not want a company with a turnover of £20 million and no profit to have to put £250,000 in, and, secondly, I should not want anything in the Bill which amounted to a levy on a programme; if your Lordships object to the word "levy", I use it only because I do not like using the phrase in my draft which states that cable is a long-
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term high risk investment and it would, in the Government's view, be wrong that any part of its revenues should be mandatorily hypothecated for a specific purpose. I tried to avoid that phrase but I now have it on record so we all know what I mean.
Your Lordships will see that I am greatly attracted by the motivation and ideas of your Lordships and deeply impressed by the numbers of your Lordships who have rallied to the amendments of my noble friends and others. Sympathetic as I am to what is proposed—that local money should go to local good causes or general good causes with a local application; that I entirely applaud because I have campaigned for charities often enough myself—I have never felt entirely happy with the idea of compulsory charity.
The terms on which this amendment is drafted are seriously vague because they do not illustrate precisely what it is. I say this to my noble friends, or such of them as can follow me, that if what they want to happen could be spelled out in the precise terms that would be necessary to make it legislatable, we should be in a different position. However, at the moment they are using what I regard as dangerous mathematics to advance an imprecise cause. I must therefore ask them—with great regret, because I do sympathise with them—to think rather harder again.
Lord Mishcon: Can the noble Lord the Minister build on that sympathy which he has expressed and which we are all sure is sincere? I do not think that one should enter onto what I believe is called a pilpulistic argument—I am rather proud of that word—and deal with a very serious subject, as the noble Lord the Minister admits, in a rather narrow way.
We all know what we mean by matters of social interest and concern. The noble Baroness and those who support the amendment have certainly not used the words "popular interest and concern", which I should have thought would be the proper language to define what the noble Lord the Minister was talking about when he mentioned all the machinations of JR and Dallas. Indeed, I should have thought that at all times those activities would cause concern to all those who had any business, marital or commercial transactions with him. What is intended here is that the word "social" obviously means, to those of us who have caught the spirit of this amendment, matters of social need. It also covers matters of interest socially to the members of the local community. It is to be a local concern and of specifically local interest, although that interest may be shared by others.
I hope that the Minister will be able to do this. It would save the risk at Report stage of words that may be used by any of us in trying to put forward a helpful amendment to support the proposal of the noble Baroness which we may again be told do not properly define the provision in what the noble Lord the Minister called legislating language. The noble Lord knows perfectly well what we intend.
Let us for one moment take for granted the point of the noble Lord, Lord Mottistone. I have a lot of sympathy with what he says about not specifying a minimum or indeed any sort of contribution. Could the Minister undertake to look sympathetically at the idea and bring forward a Government amendment in

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order to see that this is one of the matters that the authority takes into account? That is all that the amendment means. It does not say, as the noble Lord the Minister implied, that anyone who does not put forward these proposals will not get a licence. It merely says that it is among the things that the authority should be concerned with and will take into account.
I hope that this matter will be dealt with rather more affirmatively. Otherwise, we could be lost at Report stage merely by the use of language. If the noble Lord the Minister, with all the advice he has at his command, could bring forward an appropriate amendment to deal with the spirit of this proposal but in language which his advisers feel is suitable, that would be a helpful outcome of this debate.
10.37 p.m.
Lord Airedale: I thought that the Minister made rather heavy weather of the drafting difficulties of expressing the amendment so as to be clear. I can well appreciate that he is right when he says that "Dallas" might well be of social interest to the local community. But if one put the word "local" at the beginning instead of at the end of the phrase, so that it read, "of local social interest", I do not think anybody could suppose that "Dallas" was of local social interest. I know that we cannot draft while we are sitting in Committee, but I put forward that suggestion.
Lord Winstanley: I join the noble Lord, Lord Mishcon, in asking the noble Lord the Minister to think again and in particular to give what assistance he can in his official capacity in drafting a more satisfactory amendment. I find it impossible to believe that the noble Lord did not understand the amendment. I know that it has certain defects.
Lord Elton: Perhaps the noble Lord would be kind enough to tell me, not in the exact terms, but in the length that one would expect in a subsection, what precisely he means. He will find it extremely difficult. I have not hit on a way to do it.
Lord Winstanley: I hope that the Minister will be able to hit on a way to do it, and perhaps a better way to do it. But I think we know what we want done.
Lord Elton: I apologise for intervening again. I mean that I cannot do it in conversational language. I am not addressing myself to the difficulty of drafting language. I know that the noble Lord, Lord Mishcon, has a crystal clear feeling in his heart that certain things are good and should be promoted in the locality; my noble friend Lord Mottistone has an equally clear view but one which is quite different. I do not doubt that the noble Baroness, Lady Carnegy of Lour, is similarly keen on different things. Somehow we have to find a criterion which fits all the views. Until that is done I cannot offer an amendment. That has to be done first.
Lord Winstanley: The noble Lord will be aware that the Independent Broadcasting Authority requires television programme contractors to include in their
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programmes a certain quota of local and regional material—and that quota is vastly more than 1 per cent.—and those contractors are not working in localities in the true sense that cable is.
I put the point to the noble Lord in the following way. If the cable authority turns out to be the kind of body which we are led to believe it will be, and it sees that one of the contractors to which it has given a licence to provide cable services fails to make proper use of local community activities, and fails to give proper information about the local community, including social trends and voluntary bodies, I would expect it at the end of the day to be extremely reluctant to renew the licence. If on that basis the authority is going to be reluctant to renew the licence at the end of the day, surely it ought to make that clear before the day starts.
Lord Elton: Perhaps for the sake of elucidation I may ask my noble friends whether by activities of local social interest—or the other way round, as the noble Lord put it—they mean local community activities; that is, activities which are going on in the local community? That is not the idea that I had. I thought that what were in mind were matters to do with Age Concern, the handicapped and so forth, which are quite different from matters to do with the local rugby club and the migration of the neighbourhood flora and fauna.
Baroness Faithfull: First, I should like to thank all noble Peers who have spoken to the amendment and my noble friend the Minister. There is no doubt that there is one matter on which we are all agreed—including my noble friend the Minister—and that is the spirit of the amendment. It is perfectly true that we are not agreed on the way that it has been presented, and for that I apologise to your Lordships' Committee.
I quite take on board the point of the noble Lord, Lord Mottistone, and as the noble Baroness, Lady Carnegy of Lour, said, putting in the 1 per cent. quota has at any rate focused everyone's attention on the point that money is required. I am also most grateful to the noble Lord, Lord Howard of Henderskelfe, for talking about the production of programmes. The interesting point was that he said that a minimal amount of help was necessary. It need not be a great deal of help, but some is necessary. I am also very grateful to the noble Lord, Lord Airedale. I think that we all know what we mean, but like the characters in Alice in Wonderland, we do not say what we mean, and this is the difficulty that we are all in at the moment.
Perhaps I may suggest that I withdraw the amendment and that, with all those noble Lords who have spoken in the debate, I consider how it can be redrafted. I am sure that my noble friend the Minister will permit me to discuss the redraft with him—or perhaps not, as the case may be; though I hope that it will be so. Bearing in mind that we are all behind the spirit of the amendment, I suggest that I again bring it forward at the next stage. Therefore at this point I beg leave to withdraw it.
Amendment, by leave, withdrawn.
Clause 6 agreed to.
10.43 p.m.
Lord Mishcon Lord Mishcon moved Amendment No. 31:
After Clause 6, insert the following new clause—
("Code of Standards.
.—(1) Within one year from the enactment of this Act the Authority shall draw up and cause to be published a Code of minimum standards for the matters mentioned in section 6(2) above; and they shall not thereafter grant a licence for the provision of a prescribed diffusion service to an applicant who fails to meet the standards established in that Code.
(2) The Authority may from time to time revise the Code drawn up under subsection (1) above.
(3) Before drawing up or revising the Code provided for in this section the Authority shall consult with such interested persons as they consider appropriate and shall take steps (including the holding of public meetings)—

(a) to ascertain the opinions of the public; and

(b) to encourage the making of comments and suggestions by members of the public,

about the standards proposed to be set by the Code, and shall take into account those opinions and any such comments and suggestions received by them.")
The noble Lord said: I shall again try to be brief. Members of your Lordships' Committee will see that in the Bill there is provision dealing with the drawing up of a code affecting advertising. Your Lordships will also see that in Clause 10 there is a provision for drawing up a code dealing with programmes other than advertising and emphasising in particular what ought to be excluded by way of violence and matters of that kind.
In none of those provisions is there anything which deals with a time limit; there is nothing which deals with consultations with the public before drawing up the code, though the public is very much interested in regard to any code on standards. There is nothing which relates to the provisions of Clause 6, with which we have just been dealing, in order to ensure that there is a code which is available to all applicants, indicating the minimum standards for the essential matters mentioned in the clause which must be adhered to before a licence can be granted.
If we do not have that code of practice, then, of course, we are in danger, especially where there is only one applicant for a licence, of standards dropping very badly and of that having an effect not only on the provisions of this Bill and the standards that we are trying to keep in it but also, indirectly, on independent television, and possibly television generally. By virtue of the way that standards might cheapen, obviously, the public may be tempted away from following television on ITA or BBC, with the result that those programmes, too, may deteriorate in standard.
In my submission we have a very important duty to carry out. We should definitely lay down the time in which the code should be brought forward and published. We should see that the public are consulted about it. We should see that licences are not granted unless the code has been published and unless the licensee abides by the standards that the authority has laid down. I beg to move.
Baroness Masham of Ilton: I have had a great worry from several people that there may be far too many cheap American films that encourage gangster behaviour in our communities. I should like to support the amendment.
Lord Elton: I cannot be quite as brief as that, I fear. The noble Lord, Lord Mishcon, is eloquent in the cause of the consumer. It is a cause in which we all sympathise with him. I should like to pause, however, to consider whether the means that he proposes for advancing that cause are entirely appropriate to our case. Clause 6, which immediately precedes the new clause, deals with the testing of applicants for licensing to see if they are fit to receive licences. That clause lists five matters to which the Cable Authority must give particular attention before it grants a licence, and I will not rehearse them. The amendment as drafted takes those matters for consideration and says that it is not enough only to consider them. Considering them will only sort out the good applicants from the bad. I suspect that it means some form of comparison and choice of the best, or, in some circumstances, no doubt, the choice of the least bad.
Noble Lords want to do better than that. They want to be certain that any applicant will offer services which in these respects are at least up to some specific satisfactory standard. Let that standard, therefore, be stated and, since this is a complicated affair and the authority has become expert in it, let the authority take a year to decide what those standards shall be and then publish them and try and alter them in the light of experience if the need should arise. That, according to the amendment, is the hurdle that every applicant should clear before he is accepted.
That seems very practical and effective at first sight, but it is on reflection that doubts begin to arise. As drafted, the amendment is not intended to act of itself as a regulator of what goes out over cable once a licence is granted although it could, of course, be so used by the authority. I take it, however, that the concern of the movers is specifically with the issue of a licence at the outset. The focus of the concern is those occasions when there may be a single applicant only for a licence. That is what I deduce. On those occasions we are to suppose that the machinery of Clause 6 is particularly unsuitable, or at least particularly inadequate.
If it was the case that Clause 6(1) read, in line 5, "In deciding to whom to grant a licence", or even if Clause 6(2) read, in line 9, "in deciding to whom to grant a licence", it would certainly be said that the process was designed to deal only with the competitive entry, because the assumption would have been that a licence had to go to someone willy-nilly. The only question then would be to decide to whom it should go. But the clause does not read like that. It reads:
"In deciding whether or to whom to grant a licence".
So does Clause 6(2). The question that the authority is required to answer therefore is not, "To whom shall we give a licence?" It is, "Shall we give a licence to anyone; and, if so, who is the best qualified?" That is surely the question that noble Lords opposite want the authority to be forced to ask itself. I begin to think that there may be common ground between us because the Bill does quite clearly provide that it is always open to the authority to refuse to grant a licence at all, whether there is one or a hundred applicants.
What then are the considerations the authority is required to have in mind when deciding to grant, or not to grant, a licence whether there be a hundred

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applicants, or, as may happen, only one? They are, first, all matters appearing to it to be relevant and, second, without prejudice to that in Clause 6(2), the five matters listed in 18 in particular. Those are exactly the five matters to which this amendment seeks to direct their special attention as well.
This means that the essential change embodied in subsection (1) of the amendment amounts only to requiring the authority after reflection publicly to declare the minimum that it will be prepared to accept under each of the five headings in Clause 6(2) of the Bill. We have no objection to the authority making public the grounds for the choices it makes if it so wishes and, as I indicated in reply to the noble Lord's persuasive speech on Amendment No. 25, I have already agreed to consider requiring it to make available the information which prospective licensees include in their applications.
Moreover, if the authority is, as the Bill requires it to do, to consider the refusal of licences even to single applicants, it must follow that the authority must on those occasions at least have actual minimum standards in its own mind when it makes the determination. Their nature will become clearer with the growth of experience and the publication of the authority's considerations, perhaps under something like Amendment No. 25.
It follows therefore that all that lies between the noble Lord and the Bill as drafted is whether the minimum should be codified and published not in advance of all applications but in advance of those made more than twelve months after the enactment. My own feeling and that of the Government is that, first, even with the powers of revision given in subsection (2) of the amendment, this may introduce an undesirable level of inflexibility into the authority's remit. We also believe that considerations will vary quite considerably from place to place and that there might arise from a universal code a choice for the authority between fixing a threshold that was too high for some places and one that was unduly low for others.
I regret therefore that we do not favour the noble Lord's interesting idea of requiring the authority to publish a code on the lines suggested in the amendment. We believe that the test which the authority should be required to apply in each case is the one contained in Clause 4(8), which is: how can the provision of cable services best be promoted?
The other provisions in the amendment are actually dependent on the major principle, so the noble Lord will forgive me if I do not address myself to them, because I hope that the principle will be conceded.
Lord Mishcon: I have listened with interest and great respect to what the noble and learned Lord has said. It is his language which made me introduce the word "learned". I wonder whether the noble Lord realises that this was not only protection for the consumer and for standards, but also a protection for intending applicants. It is not enough to say that the authority, when the applicant reads the Bill, has to take certain matters into account which are very essential matters. What would guide the applicant as
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to whether he ought apply, or not, and what may guide the applicant to decide whether he ought to run the gamut of competition which may, indeed, affect his prestige if he is a loser in the competition, is the minimum standards in regard to those matters mentioned in Clause 6, which are of vital importance if standards are to be kept up. If you have minimum standards there, the guidance to the applicant is: "Oh yes, I can meet those standards; indeed, I can improve upon them." I think, therefore, that this will be of value to the applicants and will save the authority's time because it may be saved applications which have no merit.
Dealing with the Minister's next point, which is that of a possible variation in areas, I am trying to think practically in regard to where there could be such a variation in areas which would not satisfy a minimum requirement, because the matters which are mentioned in Clause 6 are, of course, of vital consideration when dealing with the question of licences. One cannot believe that there is not a national or even a United Kingdom minimum standard in regard to those requirements.
Having said all that, let me say that this is not the appropriate time to test the view of the Committee. I have an idea that the Committee is not really terribly anxious to debate the matter at length at this hour. The Minister has very courteously said that he has appreciated some of the points behind the amendment although he has found difficulties. In those circumstances I hope to be able to give consideration again to this amendment and I hope that he, too, will be able to give some consideration to it between now and the Report stage to see whether he cannot be more helpful.
Lord Elton: I shall look forward to hearing what the noble Lord has to say if he returns to this matter at the next stage. I rose to my feet in self-defence to say that I did avoid the words "mandatorily hypothecated". If the noble Lord, in a speech after the one which used the word "pilpulistic", calls me a noble and learned Lord, he must be the Lord Chief Justice!
Lord Mishcon: If the noble Lord the Minister had used the words "mandatorily hypothecated," I should not have called him "learned"! I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 7 [Restrictions on the holding of licences]:
10.56 p.m.
Lady Saltoun Lady Saltoun moved Amendment No. 32:
Page 6, line 30, leave out from ("shall") to second ("that") and insert ("make sure")
The noble Lady said: With the leave of the Committee, I should like to move Amendment No. 32 and to speak to Amendments Nos. 33 and 34 at the same time:
Amendment No. 33: Page 7, line 11, leave out from ("shall") to second ("that") and insert ("make sure")
Amendment No. 34: Page 7, fine 22, leave out from ("shall") to second ("that") and insert ("make sure")
The object of these amendments is two-fold. The restrictions as to who may or may not hold a licence

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which this clause contains are, it seems to me, of paramount importance. The wording of the clause as it stands is not really quite strong enough. It says:
"do all that they can to secure",
which would appear to give the authority the loophole of being able to say, "Well, we did all that we could to secure and failed". Who is to be judge of whether they had in fact done all that they could? Failure in this duty cannot be acceptable, and must be out of the question since in this instance the ball lies in the authority's court and it is only a case of making adequate inquiries, and those inquiries would not, I should have thought, be very difficult to make.
I think and hope that the wording I am suggesting is stronger and, with very great respect, it is also better English. "Make sure" is normal good English. "Secure" means the same, but it is not normal usage. "Make sure" is rather like "begin", which is good Saxon derived English as opposed to the Latin derived equivalent, "commence", which is a horrible word. I beg to move.
Lord Airedale: This is the first of a very large number of clauses in the Bill, as the noble Baroness has indicated, all of which begin with these rather curious words:
"The Authority shall do all that they can to secure that".
I do not know whether those words have any precedent in the statutes; perhaps it does not matter very much whether they are precedented or not. But I should have thought that it went without saying that the authority would do their best to secure that the provisions of the Bill would be complied with. I should not have thought it needed spelling out in a large number of instances like this. If there is any doubt about it, surely it would be easy to insert early in the Bill a short clause which would say:
"The Authority shall do their best to secure that the provisions of this Act shall be complied with".
The other point I wish to make on this is that what is to be done or not to be done according to the clauses in this Bill is at the will of Parliament. It is the will of Parliament that something is or is not to be done. To say that the authority,
"shall do their best to secure it"
is surely a rather secondhand way of impressing upon people what the will of Parliament is.
Why put the burden upon the authority in all these cases? It is for applicants and other people interested upon reading the Bill to see clearly what is permitted and what is prohibited. They must take the proper trouble to find out for themselves whether what they are applying for is permitted by the Act. If one says in almost every instance that the burden is on the authority to secure that the Bill is complied with, one is encouraging people to chance their arm. If there is a case of some doubt, the applicant will be advised, "Do not bother about that, you put in the application. It is up to the authority to secure that the provisions of the Act are being carried out; you do not have to worry about that". Why put all this burden upon the authority? Why not state in the clauses of the Bill nakedly and boldly what the mischiefs are which have to be avoided and what matters have to be complied
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with, so that everybody knows what they have to look at to secure that the provisions are complied with, and do not put the whole burden upon the authority like this. I hope that the amendment of the noble Lady will find favour.
Lord Elton: I am not sure that the amendment would have the effect that the noble Lord wishes, but the noble Lady has picked up an anxiety voiced at the Second Reading stage by the noble Lord, Lord Howard of Henderskelfe. I think therefore that I ought to explain that the duties on the authority in the Bill can in fact be divided into two types. The first is where the objective is one which is clearly within the direct power of the authority to achieve. In these cases the duty on the authority is absolute already. For example, Clause 11(1) says that the authority "shall" draw up a code governing standards and practice in advertising.
The second type of duty is where the means of achieving the duty is not within the direct control of the authority. I hope that the noble Lady will also allow me to speak not only to Amendments Nos. 32, 33 and 34, but also to Amendments Nos. 39, 46, 50, 51, 54, 61, 72 and 78, which will curtail our proceedings later in the day and, indeed, the week. In these cases, which are the subject of the amendments I have quoted, the Bill requires the authority to "do all that they can" to secure the objective. To take an example, the authority could not be put under an absolute duty to secure that certain rules were kept in the area of programme standards because the authority themselves do not control the transmission of programmes. However, I can assure the noble Lady that the duty is much stronger than she fears; indeed, within the conventions of parliamentary drafting it is the strongest possible duty in the circumstances, and is precedented in the 1981 Act. The authority's obligation is to use all the means at their disposal to secure the various objectives. This means that they must insert appropriate conditions in licences, they must invoke the various sanctions available to them in the case of a breach, and, in the last resort, they must use their powers to revoke a licence.
I have to assure the noble Lady that the revised wording that she suggested in actual fact could be held to be less stringent than what is currently in the Bill. I hope that this will reassure the noble Lady, the noble Lord, Lord Howard of Henderskelfe, and the noble Lord, Lord Airedale, that the Cable Authority's duties in the Bill as presently drafted are not deficient.
I entirely share the view of many noble Lords, notably the noble and learned Lord, Lord Gardiner, that our laws ought to be expressed in simple English strictly interpreted. In this case I think that the language is simple, and strictly interpreted it perhaps means a little more than it does in everyday conversation. I understand absolutely why the noble Lady felt it prudent to table her impressive list of amendments. The phrase to which she takes exception is certainly one that lacks force in everyday conversation. But legislation has its own style, and, as we all know all too well, within it words take on a new and sometimes more vigorous meaning. The terms we now have in the Bill place an inescapable obligation on the authority. I hope that in the light of that assurance

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the noble Lady will not feel constrained to press her amendment.
Lady Saltoun: I am very glad to hear from the noble Lord that the wording in Clause 7 imposes an inescapable duty on the Cable Authority to do what I think we all want it to do. I am slightly surprised to hear that the noble Lord thinks that the same applies to Amendments Nos. 46, 46A, 50, 51, 54, 61, 72 and 78, because in the case of those amendments the authority's duty is quite clearly to do its best to see that the instructions are carried out in a situation where it is not absolutely empowered to see that they are carried out.
In the case of the amendments we are discussing, there can be no question that it is up to the authority and up to the authority alone to make sure that the instructions in the Bill are carried out. Therefore, I shall not press these amendments to a Division in view of what the noble Lord has said, but I hope that he will have another look at them to make quite sure that they will make it absolutely mandatory on the authority to see that those duties are carried out and that no excuses are accepted.
Amendment, by leave, withdrawn.
[Amendments Nos. 33 and 34 not moved.]
11.7 p.m.
Lord Mottistone Lord Mottistone moved Amendment No. 35:
Page 7, line 23, leave out from ("corporate") to ("does") in line 24.
The noble Lord said: With Amendment No. 35 I should like to take Amendments Nos. 36, 37 and 38.
Amendment No. 36: Page 7, line 27, leave out from ("of") to end of line 28 and insert ("any shareholdings in that body corporate has led, is leading or is likely to lead to a person or persons exercising material control or influence over the content of the programmes included in the diffusion service or over the terms and conditions upon which the diffusion service is provided to subscribers in circumstances adverse to the public interest.")
Amendment No. 37: Page 7, line 29, leave out subsection (4).
Amendment No. 38: Page 8, line 13, leave out subsection (6).
The key amendment is Amendment No. 37, which is the deletion of Clause 7(4), and consequential on this is Amendment No. 36, which is important. The other two amendments, Nos. 35 and 38, are consequential because they are not relevant when subsection (4) is removed.
At Second Reading my noble friend Lord De La Warr said how curious it was to choose those mentioned in subsection (4) as the people, above all other types of shareholder, who were presumed to be in danger of leading the company in performing in a way that would be adverse to the public interest. He went so far as to say that most of these groups are just the sort of people who should have at least a modest holding in a cable company because their experience could be so valuable. In fact, the trouble with subsection (4) is that it is an exhaustive list of the types of shareholding which the Cable Authority might regard as contrary to the public interest. However, I would suggest to your Lordships that there are other types of shareholding which might affect the public interest adversely.
Thus, for those two sets of reasons I seek to remove subsection (4), but it is important to put into subsection (3) a proper definition of what would be adverse to the public interest, which I think is the purpose that the Government were seeking to serve in the first place. And so Amendment No. 36 seeks to put wording into subsection (3) which I believe is a much more sensible way of describing what the Government are trying to achieve and does not cut out all the people who might be of assistance to the cable company in running its business. As I said, the other two amendments are consequential, and I beg to move.
Lord Glanusk: We have heard from my noble friend the Minister twice earlier this evening about the advisability of sticking to the generality and avoiding the specific. Here in this clause the Government are doing exactly that, trying to be specific and leaving out a very large number of possibly undesirable shareholders who by omission may be allowed in. Otherwise, I support the amendment.
Lord Elton: Both my noble friends and I accept that the authority needs to have the power to intervene in circumstances where the public interest may be at stake even though one of the bodies listed in subsections (1) and (2) of Clause 7 has not actually acquired overall control of the cable company. Where we differ is on the best way of formulating that power. My noble friends' view is that the Bill goes too wide: I hope I shall be able to persuade them otherwise.
It is certainly the case that the list of bodies in subsection (4) of this clause is a long one, and I take the noble Lord's point about my leaping from the general to the particular in an ungraceful way, but I hope he will bear with me. The list includes a wide range of organisations in the entertainment and media field as well as local authorities and religious or political bodies. As my noble friend has said, many cable companies are likely to have some shareholders who come into one or other of these categories; but under the Bill the existence of these shareholdings is no more than a statutory trigger for the consideration which the Cable Authority has to give of the implications for the public interest. If I may change metaphors again, it is an amber light to warn the authority that they need to look a little more closely to ensure that all is well.
I entirely accept that there may be some shareholdings which are so small as to be of no consequence. In that case the authority will not need to waste much time thinking about them. It is much more straightforward, however, for the authority to have the discretion to decide when it needs to delve a little more deeply than to try and build some necessarily arbitrary threshold into the statute. The amendment does not help us in that respect. It is not the existence of the shareholdings which may give rise to difficulty for the operator but results, actual or potential, which are contrary to the public interest. In some cases quite a small shareholding might be sufficient to produce adverse results; in others, a large one.
What are the sorts of developments which the Government believe the authority will need to guard against? First, the grant of a licence could lead to the

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establishment of an undesirable concentration of editorial control in a particular area. Clause 7(2) also deals with that to some extent but subsections (3) and (4) go a step further. Secondly, there could be unacceptable religious or political influence over a company's programming policy. This might happen well before any particular group secured overall control of the company. Thirdly, there might be undesirable anti-competitive practices between companies engaged in related activities. The arrangements for the purchase of programmes and recorded music and the system of selling advertising time could all be distorted in a manner contrary to the public interest as a result of corporate links between the licensee and others in the media and entertainment world. Some of these developments, such as political influence of programming, would also be caught by my noble friends' amendments but others would not.
I believe therefore that these subsections offer important safeguards for consumers while in no way imposing unreasonable burdens on the cable companies. The effect of the amendments would be modestly to weaken the safeguards; and, for that reason, I am unable to give them the enthusiastic support that I should like.
Lord Mottistone: I suggest to my noble friend that they would strengthen them and that the main points that he made are better answered by my Amendment No. 36 than by his existing subsection (4). I ask him to think again about this. It is much too late to go on arguing about it. But, quite honestly, if he reads the report of what he has just said against the arguments that we put forward for this change, he will find that our proposals satisfy what he is seeking to do better than the Bill does at the moment.
The particular points about religion and local authorities are taken care of anyhow in subsection (1), and the other items are all dealt with very fully by my Amendment No. 36, which gets to the heart of the matter; that is, the person who is likely to mislead and act against the public interest—and we define the matter. The wording may be open to improvement, but the approach we have taken deserves the Government's much more thorough look in order to achieve their own objective better.
Having said that, I shall watch carefully to see what my noble friend does. I may have to put down either this amendment or another. But at this stage, I beg leave to withdraw this amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 36 to 38 not moved.]
Clause 7 agreed to.
Clause 8 agreed to.
Lord Denham: I beg to move that this House do now resume.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.
House adjourned at sixteen minutes past eleven o'clock.

  METROPOLITAN COUNTY COUNCILS AND THE GLC
  METROPOLITAN COUNTY COUNCILS AND THE GLC
  HONOURS: CONFIDENTIALITY
  HONOURS: CONFIDENTIALITY
  HONOURS: SELECTION
  HONOURS: SELECTION
  CALKE ABBEY
  CALKE ABBEY
  SCIENTIFIC RESEARCH: DEVELOPMENT OF NON-ANIMAL TECHNIQUES
  SCIENTIFIC RESEARCH: DEVELOPMENT OF NON-ANIMAL TECHNIQUES
  TAXIS: MARBLE ARCH ROUTE
  TAXIS: MARBLE ARCH ROUTE