Sitting of 17 July 1984

Preamble
The House met at half-past Two o'clock
PRAYERS
[MR. SPEAKER in the Chair]
PRIVATE BUSINESS
  SHREWSBURY AND ATCHAM BOROUGH COUNCIL BILL [Lords]
  Read the Third time, and passed with amendments.
  GREATER LONDON COUNCIL (GENERAL POWERS) BILL
  Considered; to be read the Third time.
  AYLESBURY VALE DISTRICT COUNCIL BILL [Lords]
  Read a Second time, and committed.

  MERSEYSIDE DEVELOPMENT CORPORATION BILL (By Order)
  Order for Third reading read.
  To be read the Third time upon Thursday 19 July.

Oral Answers to Questions
  EDUCATION AND SCIENCE

    Open University
    Mr. Yeoasked the Secretary of State for Education and Science how many representations he has received about his Department's grant to the Open University.
    Mr. Campbell-Savoursasked the Secretary of State for Education and Science what representations he has received from west Cumbria on the funding of the Open University.
    Mr. Strangasked the Secretary of State for Education and Science what representations he has received regarding the proposed cut in grant for the Open University.
    The Secretary of State for Education and Science (Sir Keith Joseph): We have received over 700 such representations. No record has been kept of their geographical distribution.
    Mr. Yeo: Does my right hon. Friend agree that the existence of the Open University is a tangible demonstration of our commitment to equality of opportunity? Is he aware that there is widespread dismay about the possible reduction in student places that may result from the proposed cut in real terms in the Department's grant?
    Sir Keith Joseph: The Government have a high regard for the work and functions of the Open University. However, we do not accept that the constraint on finance will necessarily lead to any diminution in its activities.
    Mr. Campbell-Savours: Is the Secretary of State aware of the sense of outrage among many of my constituents in west Cumberland, who have historically supported that institution since its inception under a Labour Government? Does he realise that if he strangles this institution, as he has strangled so many other public services, he will be denying many people in my area, who have lost their jobs under this Government, the right to retrain and to be educated in the new skills that they will need if they are to secure employment in future? Will he see sense and rescind his stupid decision?
    Sir Keith Joseph: The hon. Gentleman would he more effective if he were not so strident and did not exaggerate. There is a difference of calculation between the Government and the Open University. We are asking the university to make savings of about £4·5 million in the second of two years. The university claims that it is being asked to make savings of £13·5 million in the second of two years. We do not understand that, and we have asked the university to send us the basis of its calculations.
    Mr. Strang: Why have the Government singled out this institution—one of the finest in the country — for such savage cuts in expenditure? If the Secretary of State does not recognise the unique importance of allowing those who left school early to acquire a university education from this unique educational institution, does he at least recognise this it is the most cost-effective way to provide higher education?
    Sir Keith Joseph: The Government have not picked out this institution for special treatment. We are proposing levels of financial constraints of the same order of magnitude as those for other institutions of higher education.
    Mr. Forman: I strongly endorse what my right hon. Friend said about the necessity to get the best value for money from the large sums made available to the Open University. However, will he consider appointing an independent third party to examine the discrepency between the two figures, otherwise it may not be possible to reconcile them?
    Sir Keith Joseph: We intend to study carefully the figures for which we have asked, when we receive them. The Open University is setting up an efficiency study in the near future and the Government have invited the visiting committee to discuss the proposed finances with the Open University, after which the visiting committee will report to me.
    Mr. Wallace: Will the Secretary of State acknowledge that in rural areas, such as the one that I represent, the Open University represents one of the few opportunities that people have for further education and retraining? Does he appreciate that great fear is being expressed in those areas that if the cuts go through there will be a serious diminution in that service, particularly in terms of the loss of part-time tutors? Will he bear that in mind and have a rethink about his proposals?
    Sir Keith Joseph: I accept the first part of the hon. Gentleman's supplementary question.

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    The answer to the second part is that I do not believe that the fears being stoked up by the figures distributed by the Open University are justified, but I await the basis of its calculations.
    Mr. Greenway: If the Open University raises money externally, will my right hon. Friend's Department reduce its grant proportionately, or will the university be allowed to keep the money that it raises in that way?
    Sir Keith Joseph: We have told the universities that we shall not deduct from their grants money that they raise from the private sector, and that applies to the Open University.
    Mr. Flannery: Is it not a fact that this morning the Select Committee thought this question so important that it devoted over a quarter of the two hours it spent with the Secretary of State to this subject? Is it not also a fact that the Open University, at a time of unemployment, has increased by 10 per cent. its intake of students and received a cut of 4 per cent? Does the right hon. Gentleman feel that the Open University has conveyed the impression that, if the proposed cuts take place, the whole character of the university will change? What is he doing to ensure that its character does not change?
    Sir Keith Joseph: I am not the least convinced that its character need change. I do not believe that the Open University is the only institution in this country which cannot find economies while still maintaining its activities. The hon. Gentleman failed to add that the Government have provided a significant extra sum to the Open University to enable it to give additional subsidies to students, such as the unemployed or disabled, as it thinks fit.
    Mr. Hirst: Does my right hon. Friend agree that the Open University represents a ladder of opportunity for people who did not go to university as teenagers and therefore deserve to be encouraged? Will he publish the report of the visiting committee, which has been asked to look at the future options for the operations of the Open University, so that the House may judge for itself whether the grant allocations for 1985 and 1986 represent any impairment in the operations of the Open University?
    Sir Keith Joseph: I regard the Open University as a ladder of opportunity, as were the grammar and direct grant schools before the Labour Government abolished them. I shall consult the chairman of the visiting committee about the publication of the report that I expect from him.
    Rev. Martin Smyth: Does the Secretary of State acknowledge that, while some public money may be saved by reducing the allocation to the Open University, it may need other sums for retraining purposes?
    Sir Keith Joseph: There is generally a case for more money for almost everything, but the Government want to reduce the conditions which have helped to create the high unemployment that we have, and constraint on public spending is one of the imperatives.
    Mr. Harris: While rejecting completely the wilder allegations that have been made by Opposition Members about the cuts in allocation to the Open University, may I ask my right hon. Friend whether his mind is completely closed on the matter? If it is shown that the Government's figures are, to a degree, wrong, may we be assured that he will consider the matter again?
    Sir Keith Joseph: I would find it hard to say that the Government would in no circumstances think again in a case such as this. However, I have decided, and told the Open University, what its allocation from the taxpayer will be over the next two years, and it is most unlikely that that will be changed.
    Mr. Radice: But is not the Secretary of State planning to give the Open University a smaller recurrent grant in 1986 than it gets now, not taking into account inflation and the cuts that have been made in the past? It is these problems which should be concerning him — he described the Open University this morning as "very remarkable" — not what is taught on a particlar Open University course. Does he recognise that, in a democracy, it is the business of Ministers and civil servants to discuss resources and to listen to what is said to them, not to meddle in what is taught at universities and polytechnics?
    Sir Keith Joseph: The figures that I have announced take account of inflation——
    Mr. Andrew F. Bennett: That is not true.
    Sir Keith Joseph: Once again the hon. Gentleman is misinforming himself. The Department has received a significant though relatively small number of complaints——
    Mr. Radice: How many?
    Sir Keith Joseph: About seven. These have been received during a time when we have received no complaints about other university courses. When we asked the Open University to consider the complaints, it replied that its rules prevented it from considering complaints without evidence. It implied that it would consider the complaints with evidence. The Department asked for a professional judgment of the course concerned and forwarded it to the university. The Department made no judgment itself. It simply passed on the judgment of others, and that judgment is in the Library for hon. Members to study.
    Mr. Campbell-Savours: On a point of order, Mr. Speaker. In view of the totally unsatisfactory nature of that reply, I shall seek to raise the matter on the Adjournment at the earliest possible moment.

    New Examination System
    Mr. Madelasked the Secretary of State for Education and Science whether, following his announcement of the new system of examinations at 16 years of age, he has received any representations from local education authorities as to the staffing implications of the new system; and if he will make a statement.
    Sir Keith Joseph: I have received no such representations. Implementation of the national criteria will require some in-service training of teachers; but I do not foresee any increase in the total requirement for classroom teachers.
    Mr. Madel: As the new system of examinations will result in more emphasis on the practical side of school work, does my right hon. Friend agree that it will provide new opportunities for those seeking jobs in the teaching profession? Does he accept that this will provide an additional incentive to restructure teachers' salaries to attract more people of quality into the profession?
    Sir Keith Joseph: The answer to the first part of my hon. Friend's supplementary question is yes. There are severe shortages already emerging in the craft, design and technology areas. The Government hope that the present negotiations on the restructuring of teachers' salaries will be successful.
    Mr. Sheerman: Will the Secretary of State take on board the fact that the shortages to which he has referred underline what the Open University and other universities could do to meet the shortage of scientists? Will the right hon. Gentleman address himself to a problem that is worrying many experts, namely, that his demand for more practical tests will not be met for the 16-plus examinations because one fifth of our secondary schools are under-resourced for science and do not have the laboratories to carry out the necessary tests? That is what has happened under this Administration.
    Sir Keith Joseph: The shortage of laboratories goes back a long time, but it does not affect anything like one fifth of the schools. There is scope for a practical element in tests in almost every subject. For instance, the new examinations will give more marks for oral, as opposed to literary, mastery of foreign languages. Opposition Members should not think that "practical" applies only to engineering and science subjects.

    Truancy
    Mr. Heddleasked the Secretary of State for Education and Science what steps he is taking to monitor truancy levels.
    The Parliamentary Under-Secretary of State for Education and Science (Mr. Peter Brooke): Monitoring the incidence of absences from school is essentially a local responsibility. At national level there is evidence enough that truancy is a cause for concern; and we propose to issue a circular on the part that education welfare services can play in reducing it.
    Mr. Heddle: I welcome my hon. Friend's announcement. Does he agree that there is a direct relationship between hard-core truancy and teenage crime, especially in the inner cities, and that that is a serious matter? Will he engage in discussions with our right hon. and learned Friend the Home Secretary to ascertain what can be done to make parents stand by their obligations and duties to ensure that their children attend school?
    Mr. Brooke: I believe that there is a link between truancy and juvenile crime, but the connections are not firmly established. Whatever the interaction, both problems must be tackled vigorously. Parents have an important role to play. Where parents display an interest in their children's education and show that they regard it as important, truancy is less likely to occur. Unfortunately, not all parents regard their children's schooling as important. Some parents condone or even cause absence by keeping a child at home to look after a sick relative.
    Mr. Fatchett: To what extent is there a link between high levels of truancy and unemployment among young people? Is not the reality that many young people who attend school live in a no-prospect society led by a no-hope Government, and for them truancy is one alternative?
    Mr. Brooke: There is a closer link between truancy and the curriculum. Teaching needs to be lively and absorbing, and the curriculum needs to be seen by pupils and parents as relevant to the demands of adult life.

    Undergraduate Income and Expenditure
    Sir William van Straubenzeeasked the Secretary of State for Education and Science what representations he has received from the National Union of Students in relation to its survey of undergraduate income and expenditure.
    Mr. Brooke: I received a copy of the full report of the NUS survey of undergraduate income and expenditure from the president of the NUS on 6 July. I have received no other representations on the contents of the full survey report.
    Sir William van Straubenzee: I appreciate that my hon. Friend will need appropriate time to consider the report. In the meantime, does he accept that the report is a competent and important contribution to our knowledge? Should it reveal certain weaknesses in any particular aspect of student grant, will he give appropriate and careful attention to its message?
    Mr. Brooke: The survey is a weighty document. It will require careful consideration and we shall, of course, examine it as a matter of urgency. I have written to the president of the NUS suggesting that we have an early meeting.
    Mr. Wilson: Will the Under-Secretary of State look at a parliamentary reply that he recently gave to me showing that since 1979 there has been a progressive reduction in student grant, now amounting to 7 per cent. in real terms? Would not the simplest course, regardless of the documents sent to him by the NUS, be to increase the grant to a level comparable with the level when the Conservative Government came to power?
    Mr. Brooke: Some reduction in central Government expenditure on education was necessary if total expenditure was to be kept within bounds. It was judged preferable to make the necessary savings by a modest drop in the value of the full award rather than, for example, by reductions in the provision available for science in the universities.
    Mr. Marlow: Will my hon. Friend take up with the European Court of Human Rights — that institution which seems to make so many of the laws of England—the fact that many students who have reached the age of majority have their grants reduced according to the circumstances of their parents?
    Mr. Brooke: That is probably more a matter for my right hon. Friend the Secretary of State than for me.
    Mr. Andrew F. Bennett: When the Under-Secretary of State meets the president of the NUS, will he assure him that the Government are not trying to introduce back-door loans? Is the hon. Gentleman aware that the survey shows the increasing hardship caused to students, even before the situation has deteriorated for many of them because of the new regulations on student travel? When will the hon. Gentleman lay the regulations before the House so that we can debate them? Last year the hon. Gentleman promised

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    that he would lay them down earlier. He has about six days left in which to lay the regulations so that that is done earlier than last year.
    Mr. Brooke: As the hon. Gentleman knows, the survey shows that at the time of interview only 10 per cent. of students had overdrafts. I hope it can be said that students are generally able to live within their means. I take the hon. Gentleman's point about laying the regulations.

    Hearing-impaired Children
    Mr. Boyesasked the Secretary of State for Education and Science if he will make a statement on the recommendations of the Advisory Committee on the Supply and Education of Teachers that the specialist qualification to teach hearing-impaired children should be withdrawn.
    Sir Keith Joseph: My right hon. Friend the Secretary of State for Wales and I are considering the proposals in the committee's report. We intend to consult interested organisations before reaching decisions on the recommendations.
    Mr. Boyes: Is the Secretary of State aware that all professional organisations concerned with deaf people are united against the recommendation to withdraw the specialist qualification and regard it as a cynical attack on a group of people with a unique disability? Is it not shameful that any Government should consider accepting such a recommendation? Is the right hon. Gentleman aware that if the legal requirement for additional qualifications for those teaching the deaf is abandoned, the standard of teaching for those pupils is bound to fall?
    Sir Keith Joseph: The Government will consider the views of all interested parties and will take into account the reasons set out by ACSET in support of its recommendations. There are generally two sides even to a question of this kind. The Government will certainly consider the arguments of interested parties very carefully.
    Mr. Favell: I welcome my right hon. Friend's assurance that the views of all interested parties will be considered, but will he confirm that not one member of ACSET has first-hand experience of teaching the deaf or children with impaired hearing?
    Sir Keith Joseph: That is probably true, but I am sure that its members took advice and considered all the arguments.
    Mr. Ashley: The Secretary of State says that there are two sides to every question. Does he appreciate that on this occasion the side recommending dropping the specialist qualification is grossly misinformed? Is he aware that it is vital that teachers of deaf children should have special skills—for example, in audiology, lip-reading and sign language — and the ability to assess the extent of disability? Therefore, will he give full weight to the teachers' views, because if the recommendation is accepted those skills will be lost for ever?
    Sir Keith Joseph: I accept much of what the right hon. Gentleman says. On the other hand, ACSET was looking to a time when more children with handicaps would attend ordinary schools and recommending a series of qualifications for teachers in ordinary schools to enable
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    them to help handicapped children. There are indeed arguments to be considered on both sides, and we shall consider them all very carefully.
    Mr. Nicholas Winterton: Does my right hon. Friend accept from a member of his own party that many of us do not agree that there are two sides to this argument, because we believe that special expertise is required by those who teach pupils who are deaf or whose sight or hearing is impaired? Is he aware that we could not support any decision by the Government to remove the qualification required for those teaching the deaf, and that we speak from experience in local government and as members of the Select Committee on Social Services? Does he accept that the problems faced by handicapped people in the community are already severe enough?
    Sir Keith Joseph: There is no question of removing qualifications. There is a quesion of possibly ceasing to require qualifications. [Interruption.] Before hon. Members laugh too riotously, they should appreciate that a significant minority of teachers in the special schools do not possess those qualifications. Our object is to ensure that more teachers in main line schools have a qualification to teach handicapped children.

    Inner London Education Authority
    Mr. Tom Coxasked the Secretary of State for Education and Science what recent discussions he has had with the leader of the Inner London education authority as to future funding of the authority.
    Sir Keith Joseph: None, Sir.
    Mr. Cox: Is the Secretary of State aware that that is a deplorable reply? Is he completely unaware that the effects of the rate-capping legislation on ILEA will be fewer teachers, fewer school allowances and a reduction in building work? Is he further aware that the present Tory Government have never received any mandate from the people of London for any reduction in our education service? Why does he not face his responsibilities to the children and adults of London in regard to education?
    Sir Keith Joseph: Any decision about how to spend the money that is available for education in inner London will fall to ILEA. It has not asked to see me about that and I have not sought a meeting with it. It seems to me that there are several areas in which there is scope for economy without inner London's education being damaged in any way. For example, ILEA charges less for school meals than any other authority in the country and its charges for adult education courses are little more than half the average. I could give several other examples, spending on which could be reduced without there being any damage to the quality to education in inner London.
    Mr. Mark Carlisle: Now that the Government have taken what I believe to be the right decision and are going for a directly elected membership of ILEA, would my right hon. Friend care to emphasise to its potential members that the problem of education in inner London is not one of inadequacy of resources but rather one of the need to motivate pupils in schools?
    Sir Keith Joseph: I entirely agree with my right hon. and learned Friend. ILEA has some extremely zealous teachers and has pioneered much in education. However,

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    it seems unable to justify, either in terms of effectiveness or in terms of results, a vast amount of the money that it spends.
    Mr. Corbyn: Is the Secretary of State aware that the disgraceful statement that he has just made about the school meals service in London and the funding of ILEA will cause a great deal of hardship throughout London? Is he further aware that if school meal prices are raised, children will go hungry and school meals workers will be sacked, just to starve the children? Is he further aware that ILEA is the only education authority that receives no Government funding? Conservative Members could not give a damn——
    Mr. Speaker: Order. The hon. Gentleman has had three bites already.
    Sir Keith Joseph: There are free school meals.[Interruption.]
    Mr. Corbyn rose——
    Mr. Speaker: Order. Has the Secretary of State finished?
    Sir Keith Joseph: Yes.
    Mr. Corbyn: On a point of order, Mr. Speaker.
    Mr. Speaker: Order. I shall take points of order afterwards.
    Mr. Corbyn rose——
    Mr. Speaker: Order. I asked the Secretary of State whether he had finished answering the hon. Gentleman's question and he indicated that he had.
    Mrs. Rumbold: As my right hon. Friend has rightly agreed that the new ILEA should be directly elected, and as that authority will be the only education authority that will not have the constraints of other service committees to contend with when it examines its budget, how will constraints be put on the new directly elected authority to contain its budget?
    Sir Keith Joseph: It has yet to be decided and announced to which authorities rate capping will be applied. There could conceivably be a decision to apply it to ILEA, in which case there would be constraints additional to those that are normally applied to all local authorities.
    Mr. Radice: Perhaps the Secretary of State can answer this question. As a democrat, can he not understand that the combination of rate capping, the three-year control of ILEA's budget and manpower by his Department and, from last night, the prospect of an immediate power over contracts worth more than £100,000, amounts to an utterly unacceptable interference by the Government in the running of inner London education?
    Sir Keith Joseph: No, because present spending by ILEA is at the expense, to some extent, of jobs for Londoners——
    Mr. Radice: Prove it.
    Sir Keith Joseph: I can prove that by the general proposition that the money must come from somewhere. It comes largely from business, which is driven out of London, so the number of jobs dwindles. Secondly, high-spending local authorities which, exceptionally these
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    days, refuse to comply with the elected Government's general economic strategy are still subject to the rule of law by Parliament. That is why it is legitimate to apply some constraints.

    School Meals
    Mr. Dobsonasked the Secretary of State for Education and Science if he will list those education authorities no longer providing school meals for all children who choose to have them.
    Mr. Brooke: School meals are available in all local education authorities, but in Merton they are provided through a contractor; in some schools in Hereford and Worcester through self-help groups based on the schools; and in primary schools in Dorset and Lincolnshire only packed meals are provided and only to those entitled to free meals.
    Mr. Dobson: Will the Minister confirm that since 1979 the percentage of children taking school meals has declined from more than two thirds to under a half? Will he also confirm that this is damaging the diet and health of many of the worst-off children?
    Mr. Brooke: I confirm the first figure given by the hon. Gentleman, but not the second.
    Mr. Greenway: Have not school meals contained far too much stodge and involved far too much waste for many years, and does my hon. Friend agree that the most expensive food is not necessarily the best for children? Is it not now time to take a careful look at the nutritional content of food provided to schoolchildren, whether it is provided publicly or by private contract?
    Mr. Brooke: The DHSS has undertaken the schoolchildren's dietary survey, and I understand that the results will be available later this year.
    Mr. Canavan: Will the Minister issue a directive to all education authorities to follow the good example of those Labour-controlled education authorities which are offering free school meals to all the children of miners on strike, or will the Department of Education and Science follow the bad example of the Prime Minister and the DHSS and use starving children as political pawns in an industrial dispute?
    Mr. Brooke: No.

    Head Teachers
    Mr. Haselhurstasked the Secretary of State for Education and Science whether, in his proposals for school government, he will lay down clear criteria according to which governing bodies may procure the removal or redeployment of unsatisfactory head teachers.
    Sir Keith Joseph: The Green Paper on school government proposes, inter alia, that an LEA would have a duty to consider a governing body's recommendation for the dismissal of the head teacher or any other member of staff. The final decision on dismissal or redeployment must, however, continue to rest with the authority as employer.
    Mr. Haselhurst: Can the governing body be guaranteed greater leverage with the local education authority where it feels that a head is unsuitable on grounds

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    of competence and general performance, as opposed to the common belief at present that only by committing a gross breach of discipline can a head be moved on?
    Sir Keith Joseph: I think the answer is yes. The views of the governing body must in certain circumstances be considered by the local education authority, but that authority retains the final decision.
    Mr. Alton: Is the Secretary of State not concerned that some managing bodies are now being stacked with people purely because of their political affiliation rather than because of any interest in education? In cities such as Liverpool, all the places have been taken purely on a political basis, which could lead to head teachers and deputy heads being appointed and dismissed purely on the basis of political spite. What does he intend to do about that?
    Sir Keith Joseph: I deplore such political stacking where it occurs. Indeed, the Government's proposals will reduce the number of places in the gift of the local education authority.

    Maintained Sector (Results)
    Mr. Patrick Thompsonasked the Secretary of State for Education and Science what further research he proposes to undertake into the relationship between money spent on education in the maintained sector, and the results achieved, and into the other non-financial factors which may affect the results achieved.
    Sir Keith Joseph: I announced in March that I had asked the Department to undertake further studies into the factors affecting examination results in schools so that I could assess the potential value of further research. These studies will be completed soon and I expect to make a further statement in the autumn.
    Mr. Thompson: I hope that my right hon. Friend will take advice on this from those—supported by the recent evidence—who believe that good results in schools flow directly from good staff morale and—as we heard in the previous question—from a high standard of leadership from headmasters, and not from outside interference. Do not our schools already suffer from over-administration and from those who confuse education with indoctrination?
    Sir Keith Joseph: I agree that the curriculum, quality of teaching and the vitality and the skill of the head teachers are crucial.

    Inner London Education Authority
    Mr. Dubsasked the Secretary of State for Education and Science if he has any plans to meet the leaders of the Inner London education authority to discuss the future of education in London.
    Sir Keith Joseph: I have no plans to do so; nor have I been approached for such a meeting.
    Mr. Dubs: Given the Secretary of State's recent decision, as exemplified in the amendments in the other place to the paving Bill, should he not discuss with the leaders of ILEA, and explain to the House, his reasons for seeking extraordinary powers over such ILEA activities as building work, maintenance and contracts, when these
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    powers are matters of detail and are contradicted by the Government's statement on the Rates Bill that they would not seek to interfere in the minutiae of decisions?
    Sir Keith Joseph: There is no reason to exempt ILEA from the powers that the Government are writing into legislation to ensure that such legislation is effective.
    Mr. Peter Bottomley: Does my right hon. Friend agree that one of the reasons for taking the transitory powers is that ILEA leaders cannot be trusted to run ILEA effectively? Is not the fact that ILEA spent 50 per cent. more per pupil on heating and lighting than other authorities just one small example of its financial profligacy, which should be stopped? Should not ILEA wake up to its responsibilities?
    Sir Keith Joseph: Yes, on all counts. If ILEA wishes to do so, economies can be made that would not harm education and would help Londoners.

    Open University
    Ms. Clare Shortasked the Secretary of State for Education and Science if he will make a statement on the future of the Open University.
    Sir Keith Joseph: The Open University has an important part to play in the Government's strategy for higher education, both in its role as a "second chance" institution which offers adults the opportunity to study at degree level, and increasingly as a provider of continuing education and updating courses relevant to our economic needs.
    Ms. Short: Is it not time that the Secretary of State visited the Open University, planned for expansion of its provisions instead of the cuts about which we have heard, and stopped interfering in the curriculum of this immensely popular institution?
    Sir Keith Joseph: We do not believe that the constraints of finance that were proposed should diminish the activities or the quality of the Open University.
    Mr. Nicholas Winterton: Has my right hon. Friend seen the early-day motion that I have tabled on the Open University, which has been signed by hon. Members of all parties? Will he accept that there are some Conservative Members who feel that the Open University offers a unique opportunity for those young people who were not able to take advantage of higher education when they left their secondary schools? Therefore, will my right hon. Friend treat the Open University as a special case?
    Sir Keith Joseph: My hon. Friend is swallowing the Open University's assertion that its grant is being cut by 20 per cent. We have not had any calculations to support that. We believe that the proposed cut is very much less.
    Dr. Marek: Does the Secretary of State realise that there is great concern about his dabbling in the courses of the Open University, particularly in the sociology department? Will he stand up for academic principles and either drop those investigations or, for the sake of balance, look into the extremist courses being taught at the school of economics in Liverpool university?
    Sir Keith Joseph: I shall take seriously, and I hope that any vice-chancellor will take seriously, any complaints that reach him or me. In the Library there is a copy of the

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    comments on the particular course, which I hope the hon. Gentleman will read. The preoccupation of the Government is only with the quality and balance of the courses about which there are complaints, not about bias.
    Dr. M. S. Miller: What does the right hon. Gentleman mean by the bland statement "relevant to our economic needs'?
    Sir Keith Joseph: The Government have publicly announced that we are asking higher education to carry out a switch of 2 per cent. of places from the arts and humanities to science, engineering and technology.

  PRIME MINISTER

    Engagements
    Mr. Blairasked the Prime Minister if she will list her official engagements for Tuesday 17 July.
    The Prime Minister (Mrs. Margaret Thatcher): This morning I had meetings with ministerial colleagues and others. In addition to my duties in the House I shall be having further meetings later today.
    Mr. Blair: Does not the Prime Minister now wish that she had consulted the trade unions over GCHQ? Does not her refusal to consult bear the stamp and style of her entire way of government? When will she learn, quite apart from GCHQ, which is the subject of her statement later, that the British people prefer democrats to autocrats?[Interruption.]
    Mr. Speaker: Order.
    The Prime Minister: I shall be making a statement on GCHQ later, and I should prefer to deal with the matter in detail then. The hon. Gentleman will be able to hear what I have to say.
    Mr. Onslow: If an agreement that is extorted under duress can have no legal or moral force, is it not monstrous that the dockers' leaders should be trying to hold the country to ransom to secure the perpetuation of the dock labour scheme?
    The Prime Minister: With regard to the dock labour scheme, as my hon. Friend knows, my right hon. Friend the Secretary of State for Transport has made it clear that the Government have no plans to change or abolish the scheme. My hon. Friend will also be aware that ACAS is meeting the unions this afternoon and that it met the port employers last evening. It is best to let ACAS complete its task of conciliation. If there is very little to this strike I am sure that ACAS will soon find that out.
    Mr. Wilsonasked the Prime Minister if she will list her official engagements for Tuesday 17 July.
    The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.
    Mr. Wilson: If the Prime Minister wishes to give up her current addiction to wearing sackcloth and ashes, will she turn her attention to another decision that requires to be made and issue to the House now a complete undertaking that Locate in Scotland, which has the support of all Scottish Members of Parliament including members of her own party, will not be abolished, with the investment and opportunities taken with it, by the Department of Trade and Industry?
    The Prime Minister: The hon. Gentleman is aware that that matter has been raised more than once in the House. My right hon. Friend the Secretary of State for Scotland will be dealing with it.
    Mr. Michael Howard: Has my right hon. Friend had drawn to her attention reports of the disgraceful conduct of those who have roamed the streets of Bolsover to intimidate coal miners who wish to work? Will she condemn this behaviour, in the name of the people of Britain, in contrast to the support given by the Leader of the Opposition to those who condone and encourage it?
    The Prime Minister: The mass picketing that has given rise to violence and intimidation is one of the worst features of this strike. I notice that the Leader of the Opposition is reported as having said at the weekend that there is no alternative but to fight—all other roads are shut off. I hope, nevertheless, that he will agree to the NUM negotiations tomorrow.
    Mr. Mason: When will the Prime Minister settle the miners' dispute?
    The Prime Minister: There are negotiations tomorrow where they should be — between the NUM and the NCB. I hope that the right hon. Gentleman will support those negotiations, which will be held round the table between management and work force.
    Sir William Clark: Does my right hon. Friend agree that it is a disgrace that the NUM, with £32 million of assets, will not give strike pay to striking miners yet gives pay to flying pickets, which are causing so much violence not only in Bolsover but all over the country?
    The Prime Minister: I am not responsible for the NUM, but it is an astonishing way for it to treat its loyal members.
    Mr. Skinner: Is the Prime Minister aware that Mr. MacGregor and the NUM were so near to agreement that they got out Roget's "Thesaurus" to find the appropriate words, but that at the moment when agreement seemed imminent Mr. MacGregor was seen to go to a payphone, and when asked whom he had called, given all the telephones available in the suite, he said "I've been phoning my sister in America''? Is she further aware that Scargill was heard to say to him, "I didn't know your sister's name was Margaret."? Can the Prime Minister confirm that she mucked up those negotiations, just as she has mucked them up throughout the dispute?
    The Prime Minister: That question was rather below the hon. Gentleman's usual standard. I make it absolutely clear that whomsoever Mr. MacGregor was telephoning — if he was telephoning — it was not me. I have not seen or spoken to him since 3 July.
    Mr. Flanneryasked the Prime Minister if she will list her official engagements for Tuesday 17 July.
    The Prime Minister: I refer the hon. Gentleman to the. reply that I gave some moments ago.
    Mr. Flannery: When will the Prime Minister realise that, now that the Falklands jingoism has worn off, her real policies have come to light and are plunging this country into total chaos? [Interruption.] Furthermore, when will she realise that her draconian anti-trade union laws are quite unworkable and that, as I said some time ago when she was in Fontainebleau, the inexorable march to a

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    general strike has begun and that more and more sections of the working people will be on the streets struggling against this appalling Government?
    The Prime Minister: It is strikes that are destroying jobs and businesses faster than anything else, and so much so that I believe that the Labour party has become the party that wants unemployment.
    Mr. Sayeed: Can my right hon. Friend suggest any reason for a national dock strike apart from Mr. Connolly's wish to join the Leader of the Opposition as one of Mr. Scargill's lackeys?
    The Prime Minister: I can see no reason whatever for a national dock strike. There is a well-established disputes procedure under the national docks labour scheme, and it should be used. If it was used, the strike would soon be at an end, provided that Opposition Members want it to end as much as we do. That strike will do immense damage to the ordinary working people of this country.
    Dr. Owen: In as much as the docks dispute has much to do with the genuine grievances of dockers, does not the Prime Minister think it wiser to state clearly that the Government have no intention of legislating during the lifetime of this Parliament on the National Dock Labour Board, and that if she wished to do so she would include that in her manifesto and win a mandate for it?
    The Prime Minister: The right hon. Gentleman will have heard what my right hon. Friend the Secretary of State said yesterday. It is astonishing that the Opposition should claim that the strike is to try to stop something that the Government have no plans to do. If that is all that it is about, ACAS, which is meeting the unions now, will have a very easy job to do to end the strike.
    Mr. Temple-Morrisasked the Prime Minister if she will list her official engagements for Tuesday 17 July.
    The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.
    Mr. Temple-Morris: Does my right hon. Friend agree that there are serious constitutional aspects about the fact that the Leader of the Opposition appears——
    Mr. Speaker: Order. I could not quite hear the hon. Member, but I hope that he was asking a question for which the Prime Minister has ministerial responsibility.
    Mr. Temple-Morris: Is my right hon. Friend not extremely worried about the future of the country when a certain person allies himself to the trade union movement? That means the end of Her Majesty's Opposition, because that is what they stand for. Having been Leader of the Opposition, does my right hon. Friend not consider it serious that a person puts himself on that side of the fence and ends his own future with his party and the country?
    The Prime Minister: My hon. Friend is right. Some people wish to circumvent the processes of parliamentary democracy and impose their wishes upon the rest. —[Interruption.]
    Mr. Speaker: Order. The Prime Minister has a right to be heard.
    The Prime Minister: I thank you, Mr. Speaker, but I had finished my reply.
    Mr. Spearing: With reference to circumventing parliamentary democracy, will the Prime Minister go into the Library today and look at the Adjournment debate of 22 October 1971? Does she remember that she refused point blank to obey the law and carry out the instructions of sections 4 and 5 of the Education Act 1944? Does she also recall that her only reason was that the background had changed? By what democratic or moral right does she expect others to obey the law when she does not do so herself?
    The Prime Minister: I do not think that I was ever taken to task for refusing to obey the law in the Education Act 1944.
    Mr. Spearing: Yes the right hon. Lady was — by me.
    Mr. Kinnock: When the Prime Minister broke the law by not consulting the unions at GCHQ Cheltenham, did she do so by herself or on the advice of the Attorney-General?
    The Prime Minister: Every Prime Minister and every Minister is within the law, must be seen to be within the law and must be subject to the law. I wholly accept that every Minister in taking action does so in the belief that he or she is within the law and acting on the best of advice.
    Mr. Favellasked the Prime Minister if she will list her official engagements for Tuesday 17 July.
    The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.
    Mr. Favell: Will my right hon. Friend take time today to remind Mr. MacGregor, before the resumption of negotiations tomorrow, that many thousands of jobs depend on competitive energy costs, and that, if the coal industry was allowed to be inefficient while other industries were expected to be efficient, there would be widespread anger?
    The Prime Minister: It is important to have a cheaper supply of coal, because we derive so much electricity from it. France can offer us electricity from nuclear energy at a lower price than we can generate it from coal. It is important for the whole of industry that we produce cheaper coal for electricity. That means getting rid of uneconomic pits.
    Mr. Redmond: Will the Prime Minister join me in condemning Fascist Governments who use the police and the military to suppress trade union activities?
    The Prime Minister: I am sorry, but I could not hear precisely what the hon. Gentleman said.
    Mr. Speaker: Order. I call Mr. Redmond.
    Mr. Redmond: Will the Prime Minister join me in condemning Fascist Governments who use jointly the police and the military to suppress trade union activities?
    The Prime Minister: In this country the police are always there to uphold the law.
    Mr. Ashleyasked the Prime Minister if she will list her official engagements for 17 July.
    The Prime Minister: I refer the right hon. Gentleman to the reply that I gave some moments ago.
    Mr. Ashley: The Prime Minister is to make a statement at 3.30 pm about what action she proposes to take on GCHQ. Can she now make a statement on what she is doing about the Foreign Secretary?
    The Prime Minister: The Foreign Secretary is doing an excellent job and will continue to do so.

GCHQ
3.30 pm
The Prime Minister (Mrs. Margaret Thatcher)rose——[Interruption.]
Mr. Speaker: Order. The House will want to hear what the Prime Minister has to say.
The Prime Minister: Mr. Speaker, with permission I should like to make a statement on GCHQ.
Following the judicial review of the Government's action in respect of GCHQ, Mr. Justice Glidewell, in giving his judgment yesterday in the High Court, on four of the five grounds on which the Council of Civil Service Unions had based its case found in favour of the Government.
The judge confirmed that the Minister for the Civil Service has the right to vary the terms and conditions of service of civil servants so as to exclude membership of trade unions and that an instruction may be given under article 4 of the Civil Service Order in Council 1982 to this effect. Nevertheless, the judge concluded that, because of the lack of prior consultation with the unions concerned, the instruction given in this instance was invalid. His finding did not affect the certificates issued by my right hon. and learned Friend the Secretary of State for Foreign and Commonwealth Affairs under the Employment Protection Acts.
In view of the implications of this judgment in the field of national security, the Government are appealing against it and are applying to the court later this afternoon for an early hearing of the appeal.
The judge indicated that the status quo should be maintained at GCHQ pending consideration of an appeal.
As the Government will be lodging an appeal later today, it would be inappropriate for me to make any further comment.
Mr. Neil Kinnock: The Prime Minister evaded my question earlier, but the Government have been found guilty of breaking the law. Will the Prime Minister now admit that the judgment of the High Court makes it clear that responsibility for this major breach of natural justice and offence against civil rights rests with her and her alone? Was it not she and she alone who issued instructions—[Interruption.]
Mr. Speaker: Order.
Mr. Kinnock: —for the compulsory removal of trade union membership rights without consultation with the trade unions? Why did she let a month elapse during which time consultations could have taken place before leaving the Secretary of State for Foreign and Commonwealth Affairs as a punch bag to try to cover up her trail of guilt? Will she further admit to the House and the country that she compounded her mischief by refusing, against the advice of her colleagues, to accept guarantees of continuous operations at GCHQ given by the trade unions way back in early February? Why has she spurned the opportunity afforded her by Mr. Justice Glidewell for a period of reflection and, instead, rushed off to appeal and thus prevent further consideration by this forum of Parliament? In an attempt to explain the reason for going to appeal—[Interruption.]
Mr. Speaker: Order. In the same way as I indicated that the Prime Minister has the right to be heard, so has the Leader of the Opposition.
Mr. Kinnock: Conservative Members illustrate their own discomfort and guilt by the noise that they make.
In an effort to explain the reason for going to appeal, the Prime Minister speaks of concern for national security. Since we share that concern, may I ask her whether that is sufficient ground for preaching natural justice, and how can she defend this country when she is so obviously prepared to make such breaches of natural justice? Will she now conclude this £5 million farce at GCHQ by apologising to loyal civil servants for insulting their integrity, and will she instruct the Government's lawyers in the Court of Appeal to withdraw the appeal this afternoon and inform the court that the decision of the High Court will be followed by the Government? In the light of this experience—[Interruption.]
Mr. Speaker: Order.
Mr. Kinnock: If Conservative Members give more, Mr. Speaker, they are going to get more. In the light of this experience, willl the Prime Minister just for once permit humility and reason to replace her extremism and prejudice?
The Prime Minister: The right hon. Gentleman is right in saying, although he did not quite use those words, that Mr. Justice Glidewell found the order invalid. "Invalid" was the word. I do not think that the right hon. Gentleman will find the words that he used within the judgment. May I remind him that during the last Labour Government four Ministers had their actions declared invalid by the courts? The right hon. Member for Glasgow, Hillhead (Mr. Jenkins), when Home Secretary, was told by the Court of Appeal that his attempt to revoke television licences was unlawful, invalid and — [Interruption.]
Mr. Speaker: Order. The Leader of the Opposition put his case in some detail, and the Prime Minister has a right to respond.
The Prime Minister: Mr. Sam Silkin, when Attorney-General, was told by the Master of the Rolls that he had no prerogative to suspend or dispense with the laws of England; and, of course, I could go on giving some of the details of other cases.
It is quite right that every member of the Executive must be subject to the law of the land. That is totally accepted. Every Minister would wish to have his actions subject to the law of the land, and takes them in the belief that they are subject to the law of the land. When one has a judgment of the kind that we have had, one uses the law, as one has a right to do, to take it to the Court of Appeal. I do not think that anyone would wish to deny the right to go to the Court of Appeal to get this matter satisfactorily settled by further hearing, and to see what that further hearing produces. Of course, Ministers are subject to the final finding of the courts of law.
The right hon. Gentleman asks, why today? Our advice is that an appeal should be lodged today if there is to be any prospect of the case being heard before the courts rise for the summer recess. It is clearly in the interests of GCHQ staff themselves as well as of national security to remove uncertainty as soon as possible.

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The right hon. Gentleman referred to a no-strike agreement. The Civil Service unions made a number of alternative proposals. As Mr. McCall said before the Select Committee on employment, they undertook that they would not ask their members to take industrial action of any kind in essential intelligence and security services. I note, however, that such an agreement has already been repudiated by the conferences of the two largest Civil Service unions.
Mr. Norman St. John-Stevas: Will my right hon. Friend accept that Conservative Members appreciate her courage and her respect for the House in postponing the lodging of an appeal until later this afternoon so that the House may have an opportunity to express its mind on the issue? Does she agree that if others, including the Leader of the Opposition, were to follow her example, instead of making common cause with those who seek to deprive the law-abiding citizens of this country of their constitutional rights by intimidation and violence, it would be a better thing for the country and the House?
The Prime Minister: I am grateful to my right hon. Friend, and I agree with him. The Government are exercising their legitimate right to appeal. It is an important case involving national security, and that is why we are lodging an appeal.
Mr. J. Enoch Powell: In a matter of this great importance, is it not essential, and the Government's duty, to ensure that the present law is clarified and defined at the highest judicial instance that is available?
The Prime Minister: I am sure that the right hon. Gentleman heard me say that the judgment has substantial implications for national security. Therefore, we are exercising our right of appeal, as we believe that the case must be heard by a higher court.
Mr. John Gorst: Will my right hon. Friend make it abundantly clear that there is no incompatibility between the concept of natural justice and national seurity? Irrespective of the outcome of any appeal and whatever happens hereafter, will the negotiations between the Government and the unions be conducted on the basis of natural justice?
The Prime Minister: I think that my hon. Friend was using some of the words in the judgment. I think that it would be better if I did not go into the judgment, for the obvious and good reason that it is the subject of an appeal to a higher court. Hon. Members are rightly asking me why we took the decision in the first place, and I am fully prepared to answer that.
Mr. John Morris: What is the real reason for the Prime Minister's persistence in trying to overturn a decision of the courts and ignoring the decision of the International Labour Organisation? Is it because she is too stubborn to reconsider the offer made by the unions? If more judges hold against her in the Court of Appeal, will she then call it a day and not go to the House of Lords?
The Prime Minister: As the right hon. and learned Gentleman is aware, I, rightly, cannot overturn the decision of a court, and I would not wish to do so. I believe that people should be subject to a court of law. I also believe that, being subject to a court of law, they are entitled to use their right to go to appeal, especially on a
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very important matter such as this, which involves national security. I wish to make it clear that at the end of the judicial process Governments, of course, accept the courts' final ruling. That is what the rule of law is all about.
Sir John Biggs-Davison: Has not there been industrial action in the public service intended to hamper defence effectiveness? Has not there been industrial action at GCHQ in times of emergency? Has not Mr. Peter Jones of the trade union side denied that no-strike agreements were offered? Therefore, had the Government any alternative to taking the action that they did?
The Prime Minister: I believe that it was Mr. Jones who made some comments on the radio this morning about what the unions had offered. I do not have a transcript of precisely what he said. I have repeated to the House what Mr. McCall said to the Select Committee. I am aware that two of the main Civil Service unions overturned any offer of no-strike agreements. That seems to me to be very significant.
With regard to the reason that led to our taking the decision, my hon. Friend was right to refer to the fact that during one of the many strikes and industrial disputes in which GCHQ took part the Council of Civil Service Unions reported:
"48 hours walkouts have severely hit secret monitoring stations belonging to the Composite Signals Organisation. The Government is clearly worried and will be subject to huge pressure from NATO allies."
It is because of that sort of industrial disruption and a duly to maintain the national security of this country that we took action. The judge found that we were fully entitled to use the powers, but that they were invalid in that instance for one reason, and one reason only—because of the absence of prior consultation.
Dr. David Owen: Is not the Prime Minister aware that by her oral decision of 22 December she not only damaged national security but besmirched the office of Prime Minister? Furthermore, she dragged the Secretary of the Cabinet, in a letter to the Civil Service unions in January, seriously to mislead those trade unions about her capacity to enter into serious negotiations with the trade unions.
Why has not the Prime Minister informed the House that the secretary of the Civil Service unions had written to the Cabinet Secretary and offered to open negotiations and that the Council of Civil Service Unions is entitled to negotiate a no-strike agreement on behalf of all the Civil Service unions?
Why has the Prime Minister said that the status quo remains in Cheltenham when trade unionists are, at this moment, eligible to rejoin their trade union? Why has the right hon. Lady not told us whether Lord Donaldson will make the decision on the Government's appeal? Why is the right hon. Lady hiding behind the sub judice rule" Why has the Leader of the House not made provision for a debate in the House this afternoon?
The Prime Minister: The right hon. Gentleman is well aware that it is not for me to say who shall hear the appeal. He knows that it is impossible, and would be quite wrong, for a Prime Minister to attempt to interfere in the decision as to who should hear an appeal.
The judge indicated that the status quo should be maintained pending consideration of an appeal. I was

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quoting what I believe the judge said after the hearing. The Government will, of course, honour precisely what that means.
Has the right hon. Gentleman forgotten that it was the first leader of the Social Democratic party, the right hon. Member for Glasgow, Hillhead (Mr. Jenkins), who, when he was Home Secretary, was told by the Court of Appeal that his attempt to revoke television licences was unlawful, invalid and of no effect. I did not hear the right hon. Gentleman protest then.
Mr. Patrick Nicholls: The reaction on the Opposition Benches shows that the Labour party is, after all, in favour of obeying decisions made by judges. Does my right hon. Friend think that there will come a time when the Leader of the Opposition will advise his supporters to condemn secondary picketing if there is ever an order to that effect in the courts—[Interruption.] When the case finally goes for appeal, if — [Interruption.]
Mr. Speaker: Order. Hon. Members must confine questions to the matter before the House and not go too wide of that.
Mr. Nicholls: If, in the end, the present decision is reversed, does my right hon. Friend think that Opposition Members will be as vocal in support of that final decision as they have been in favour of the interim decision?
The Prime Minister: I want to make it clear that the Government, like any person or citizen, must and will accept the court's final ruling. That is not in doubt. I hope that it is not in doubt anywhere in this land.
Mr. Merlyn Rees: Is it not likely that, whatever happens in the Court of Appeal, this case will end up before the Law Lords in another place and that this process will take a long time? Why does not the Prime Minister in the meantime consult the trade unions at Cheltenham about the matter, which would be a reasonable thing to do, and find an appropriate way through the problems at Cheltenham?
The Prime Minister: For reasons which I have given, and which the right hon. Gentleman perhaps heard, this case has considerable implications for national security. I hope that the right hon. Gentleman, who was once Home Secretary, will not object to a Minister or anyone taking up the right to have a case heard by the Court of Appeal.
Sir Anthony Kershaw: Does my right hon. Friend agree that broken promises about strikes in the past and the rejection of strikes in the future do not command much confidence in relation to what can be arranged in consultation about our vital intelligence services?
The Prime Minister: I quoted from what Mr. McCall said to the Select Committee. I also noted that a no-strike agreement had already been repudiated by the conferences of the two largest Civil Service unions. I do not wish to go any further. The case will go before the Court of Appeal. I repeat that the Government will, of course, accept the judgment at the end of the judicial process.
Mr. Ron Leighton: Is the Prime Minister aware that, had she accepted the report of the Select Committee, she would not be in this mess? The key passage in the judgment was to the effect that there
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should be a pause for reflection. Is the right hon. Lady capable of pausing for reflection? Is she capable of thinking that she might have been wrong? Is she capable of thinking that she might have been in error? Instead of rushing immediately to appeal, which could lead to an even bigger fiasco, will she take the course of negotiating an agreeable settlement, one which is acceptable to both sides, rather than proceeding by authoritarian diktat?
The Prime Minister: I am surprised that the hon. Gentleman should refer to appealing to the Court of Appeal as diktat. It is a due process of law, and he is well aware of that. I have already said that this is a very important case because it has implications for national security. At the end of the judgment, the judge indicated that the status quo should be maintained pending consideration of an appeal. It is clearly in the interests of the GCHQ staff and of national security that uncertainty should be removed as quickly as possible. If that is to be done, the case before the Court of Appeal must be heard as soon as possible, and therefore the application had to be made as soon as possible.
Mr. Patrick Cormack: Is my right hon. Friend aware that even those who questioned the wisdom of the original decision will find her unequivocal acceptance of the rule of law in stark and refreshing contrast to the empty posturings of the Leader of the Opposition?
The Prime Minister: I am grateful to my hon. Friend for his remarks. I hope that the ultimate decision of the court, whatever it may be—whether injunctions, fines or some other decision concerning Ministers of the Crown—and all decision of courts of law will always be upheld.
Mr. Tam Dalyell: Will the Prime Minister shed light on the reported puzzlement of Mr. Justice Glidewell on why the instructions were given to officials orally on 22 December? What precise event prompted the Prime Minister, three days before Christmas, to give those oral instructions? Does she recollect that on 19 December she answered two parliamentary questions from me—[Interruption.] —about GCHQ Cheltenham? As she knew well that those questions were prompted by information that had come to me, not from trade union activists—[Interruption] —but from——
Mr. Speaker: Order.
Mr. Dalyell: For over five hours messages in relation to the instructions ordering the Belgrano — [Interruption.]
Mr. Speaker: Order. The hon. Gentleman must not go into overmuch detail. He is asking a question of the Prime Minister.
Mr. Dalyell: It is on the detail that we discover that the Prime Minister acted unlawfully and has misled the House.
The Prime Minister: As the hon. Gentleman is aware, I have answered many questions on that issue. I did not notice that that matter featured in the judgment on Mr. Justice Glidewell.
Mr. Ian Lloyd: Is there not a most singular and conspicuous difference between the Leader of the Opposition's sudden passion for and overwhelming conversion to the rule of law and that of St. Paul on the

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road to Damascus in that the right hon. Gentleman's conviction will vanish with the speed of a tropical sunset the moment——
Mr. Speaker: Order. The hon. Gentleman must put his question to the Prime Minister and not address himself to the Leader of the Opposition.
Mr. Lloyd: Does my right hon. Friend agree that the right hon. Gentleman's conviction will disappear the moment that the courts issue a ruling which condemns the violence and mayhem which is being orchestrated by leaders of the National Union of Mineworkers and the Transport and General Workers Union on our streets and at our docks?
The Prime Minister: I agree with my hon. Friend. Perhaps the Leader of the Opposition will insist on allying himself only with those who say quite clearly that they will accept and uphold the law.
Mr. A. J. Beith: Is the Prime Minister seriously telling the House that she will continue to exact a penalty from employees at GCHQ who have stood firm in their decision to remain members of trade unions or from any who have joined them during the interim period? Does she think that GCHQ's capacity to contribute to our intelligence and security is in better shape now than it was before she started all this?
The Prime Minister: As I have made clear several times in recent weeks, the service provided by GCHQ is excellent. I believe that the GCHQ employees to whom the hon. Gentleman referred are fully covered by the judge's remark that the status quo should be maintained pending consideration of an appeal. We had that much in mind when we began the judicial review.
Mr. Michael Morris: Is my right hon. Friend aware that this issue has nothing to do with civil rights and that the key issue remains national security, when over about 18 months 10,000 working days were lost and when on 9 March 1981 parts of GCHQ came to a halt? Is my right hon. Friend aware that she was right to take the action she took and that she was right to lodge an appeal immediately after the proceedings?
The Prime Minister: Those were the reasons that we gave for taking the action in the first place. The judge at first instance found that we had all the powers to take the action that we took. We had every one of the powers necessary to take that action. However, he considered that had we had prior consultation we might have taken a different course, and so he found that instance invalid, but not the general powers themselves.
Mr. Frank Cook: The Prime Minister has placed stress on 48-hour disputes within the security establishment. Perhaps she will tell us of which unions Philby, Vassall, Maclean and Roger Hollis were members. How does she equate her accusations that are based on union membership with fallibility within our national security? She is totally wrong.
The Prime Minister: The quote which I used about 48 hours came from the Council of Civil Service Unions' campaign report No. 5. I could quote many more passages. We took action because national security and GCHQ are extremely important and we must have continuous coverage. The quotation which I used — I could give many more—shows that the Civil Service unions were
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prepared selectively to strike at GCHQ and to damage communications — [Interruption.] I shall quote from campaign report No. 1 of the Council of Civil Service Unions, which states:
"The use of selective strike action by members in sensitive areas is a key part of our campaign."
That is what the council, not I, said.
Mrs. Edwina Currie: Will my right hon. Friend view with alarm the advice of trade unions leaders to get in and start recruiting? Does she not agree——
Hon. Members: Reading.
Mr. Speaker: Order. The hon. Lady must not read.
Mrs. Currie: Does not my right hon. Friend feel that that action will re-establish the conflict of GCHQ employees between loyalty to their employer and the nation and loyalty to their trade union?
The Prime Minister: I believe that the actions of both sides are covered by the judge's statement that the status quo should be maintained. Everything that my hon. Friend said shows the wisdom of entering an appeal quickly, so that it can be heard as quickly as possible by a court of appeal of three judges. This is an important case, because it involves national security. What my hon. Friend said lends powerful support to the need for a quick appeal and a quick hearing.
Mr. David Winnick: Does the Prime Minister recognise that the court's decision was a sharp rebuke for the arbitrary and dictatorial way in which the Government, and the right hon. Lady in particular, make decisions? Is the right hon. Lady aware that the decision taken yesterday by the court will be warmly welcomed by all who believe in protecting the rights of working people?
The Prime Minister: A Minister in the Labour Government did not hesitate to appeal to the High Court and the Court of Appeal on a fundamental matter when it suited him. I am taking precisely the same course of action.
Mr. Robert Atkins: Is it not the case that the last Labour Government took action under this very law believing that that was in the national interest? Does my right hon. Friend find it slightly ironical that the Labour party is always against certain matters when it is in opposition? Does my right hon. Friend find this cant and hypocrisy typical of where the Labour party stands at the moment?
The Prime Minister: I believe that my hon. Friend is referring to certificates issued under the Employment Protection Act 1975, which were given by the Labour Government and by us. The use of such a certificate in this case was not found to be invalid in any way.
Mrs. Ann Clwyd: Will the Prime Minister estimate how many Conservative Members share the view of the hon. Member for Hendon, North (Mr. Gorst), who believes that the Government, having made a bad judgment, should now accept their mistake? How should the trade unions at Cheltenham be compensated after the Court of Appeal finds in their favour?
The Prime Minister: The hon. Lady is going into what will be argued before the Court of Appeal. Because the Government are entering an appeal before the Court of

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Appeal, it would be best if I did not enter into the arguments to go before that court. I hope that the appeal will be heard quickly. We shall accept the final results of the judicial process.
Mr. Robert Adley: Because Labour Members and trade union leaders are stalking the country seeking to encourage people to go on strike but denying those people the right to be consulted, I ask my right hon. Friend one simple question: can she think of any greater humbug than Opposition Members using the word "consult"?
The Prime Minister: I hope that every person who carries any authority in any strike—I believe that this is what my hon. Friend is talking about—must say that he or she will accept the judicial process, as I have said from the Dispatch Box.
Mr. Eddie Loyden: Is it not a fact that, in spite of the Prime Minister's attempts to mask the intentions of the Government, the Government's actions towards GCHQ and their other actions stem from a blind hatred of the trade union movement by the right hon. Lady, her right hon. Friends and other members of the Tory party.
The Prime Minister: No. As we said right at the beginning, there has always been special provision for certain intelligence services. GCHQ was regarded as an intelligence service and agency. It has been subject to several severe industrial disputes. Selective action was deliberately taken. We used powers which, according to the court of first instance, were valid powers to use. The only reason why those powers were not valid in the particular instance was the lack of prior consultation. That is the point. Because this matter affects national security, the case has been referred to the Court of Appeal for higher consideration.
Mr. Eldon Griffiths: Does my right hon. Friend accept that no amount of litigation, wherever it takes place, will overcome the dilemma that national security means no strikes at GCHQ, but civil liberties require that the civil servants there shall be properly represented? Will my right hon. Friend therefore urge the Foreign Secretary and other Ministers to listen to some of the suggestions that have been made to bridge this problem so that during the judicial process sensible negotiations are conducted to resolve the essential problem?
The Prime Minister: As the judge stated, it would not be right to take any action that could hinder the process in any way. Action was, of course, taken to get a staff association going. Clearly, any move in that direction must now be halted, as it may or may not be necessary according to the court's decision.
Mr. Kevin Barron: Notwithstanding the question of the appeal, will the Prime Minister and the Government take notice of what was said yesterday in the High Court—that there have been some guilty dealings in the lack of prior consultation with the relevant trade unions at GCHQ? Will the right hon. Lady and the Government consult throughout the public sector and replace the confrontational politics in the past five years in the Government's actions with the trade unions? Will
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the Government try some consultations and stop bringing the public sector, the Prime Minister and the Government into disrepute, as the right hon. Lady is doing?
The Prime Minister: I have carefully not intervened to confront Mr. Scargill.
Mr. Richard Hickmet: Does my right hon. Friend agree that, whereas the Government are prepared to subject themselves to the judicial process, the leader of the National Union of Mineworkers, supported by his poodle, the Leader of the Opposition——
Mr. Speaker: Order. The same rules apply to every hon. Member. Questions must be confined to the statement. The Prime Minister's statement was not about the miners.
Mr. Hickmet: The Government do not consider themselves above the law, whereas the NUM does.
The Prime Minister: I believe that everyone in this country must accept the final judgment of the legal process, and that is precisely what I intend to do.
Mr. Robert C. Brown: Does the right hon. Lady recall that the last time I caught Mr. Speaker's eye during Prime Minister's Questions—more than two years ago—I accused her of being the worst form of vandal, in so far as she was tearing away at the fabric of our society? As it now seems that a High Court judge shares my opinion of the right hon. Lady, will she give the country an assurance that she will seek to honour her policies? Will the right hon. Lady answer the question asked by my right hon. and learned Friend the Member for Aberavon (Mr. Morris)? If the High Court decision goes against her, will she call it a day and not appeal to the House of Lords?
The Prime Minister: I believe that violence and intimidation are tearing their way through the fabric of our society — not the judgment in this case about prior consultation, which is being appealed against. The result of the final judicial process will, of course, be wholeheartedly accepted, whatever it is.
Mr. Nicholas Winterton: Does my right hon. Friend accept that the vast majority of people on this side of the House and in the country fully accept the principle and purpose behind the Government's decision on GCHQ and expect no less than that Her Majesty's Government will uphold the law and use the law in the national interest and to protect national security in the way that she has described?
The Prime Minister: I am grateful to my hon. Friend.
Mr. Bryan Gould: In deciding to pursue an appeal, is it the Prime Minister's contention that the principles of natural justice were observed, which is flatly contradicted by the facts, or— something much more consistent with her general attitude—that in depriving trade unionists of their rights the principles of natural justice are irrelevant?
The Prime Minister: As the hon. Gentleman knows, this is a matter for the court. The judgment will have substantial implications for national security. That is why it is being appealed before the court. It would not be right for me to start to argue the case at the Dispatch Box, because the House of Commons is not a court of law.
Mr. Kenneth Carlisle: Does my right hon. Friend agree that we must uphold the principle that the Government are ultimately responsible for national security? As 25 per cent. of GCHQ staff were involved in industrial action in 1981, does my right hon. Friend agree that any Government would have had to take action to ensure that that situation could not recur?
The Prime Minister: I am grateful to my hon. Friend. As I understand the judgment, we had all the powers that we took. The use of the powers was not found to be invalid. In this particular instance, it was found to be invalid on one point—that the use of the powers was not preceded by consultation. Had there been prior consultation followed by a decision nevertheless to use the identical powers, I understand that there would have been no ground for the court's decision.
Mr. John Fraser: As the two QCs sitting beside the Prime Minister presumably have the grounds for appeal in their pockets or folders, may we be told whether those grounds contain a statement that the Prime Minister may ignore the rules of natural justice?
The Prime Minister: This House, however distinguished—and it is the most distinguished representative Chamber—is not a court of law. Therefore, the point should be argued before the Court of Appeal.
Mr. Geoffrey Dickens: As the Opposition are constantly calling for civil liberties and Conservative Members are constantly calling for national security, will my right hon. Friend remind the Opposition that without national security there can be no liberty for anyone in this country?
The Prime Minister: Yes, it is that aspect of the case and its implications for national security that led us to take the matter to the Court of Appeal. Because we believe that it is in everyone's interests to have the case settled quickly, we have decided to appeal this afternoon so that the case can be heard as quickly as possible.
Mr. Dennis Skinner: As the whole thing began because the Prime Minister was prepared to bribe trade unionists to forgo their union activities when she took action against GCHQ, and as the stakes are now extremely high because if the matter went the wrong way in the Court of Appeal it could lead to her resignation as Prime Minister, how can we be sure that she will not go to the extent of bribing the judges who are to take the decision?
Mr. Speaker: Order. Every hon. Member must take responsibility for his questions, but that one was out of order.
The Prime Minister: I must ask that that allegation be totally and unreservedly withdrawn.
Mr. Speaker: Order. I gave the hon. Gentleman the opportunity to do that. Will he now withdraw it?
Mr. Skinner: No. The Prime Minister is quite capable of doing that to save her own neck.
Mr. Speaker: Order. I put the hon. Gentleman on warning that unless he is prepared to withdraw the allegation I shall be forced to take extreme action.
Mr. Allan Rogers: On a point of order, Mr. Speaker.
Mr. Speaker: No point of order can arise. I am asking the hon. Member for Bolsover (Mr. Skinner) immediately to withdraw his allegation.
Mr. Skinner: I have no intention of withdrawing the allegation because the Prime Minister would do anything to save her own neck.
Mr. Speaker: Order. I name Mr. Dennis Skinner for persistent disobedience of the Chair.
Motion made, and Question put,
That Mr. Dennis Skinner be suspended from the service of the House.—[Mr. Biffen.]
The House proceeded to a Division—
Dr. M. S. Miller: On a point of order, Mr. Speaker. Surely the point rests on the meaning of the word "bribe". When my hon. Friend the Member for Bolsover (Mr. Skinner) used the word in respect of the payments made by the Government to trade union members at GCHQ there was no objection. It was when he used the same word in relation to the Prime Minister that the problem arose. It seems that using the word to denote an indirect influence is all right but using it to refer to a direct payment is not all right. I ask you, Mr. Speaker, to reflect on the fact that my hon. Friend used exactly the same word to describe the Prime Minister's behaviour towards the trade union members and the behaviour alleged to be possible in relation to the judiciary.
Mr. Speaker: I took the action that I did because the hon. Member for Bolsover refused to obey an order from the Chair. That is the fact of the matter. I think that the whole House will agree.
The Tellers having been named and the Question having again been put—
Mr. Rogers: On a point of order, Mr. Speaker. When my hon. Friend the Member for Bolsover (Mr. Skinner) originally made the remark, you saw fit merely to admonish him. You asked him to withdraw it only on the prompting of the Prime Minister. Is the Prime Minister now to dictate the rules under which the House operates?
Mr. Speaker: The hon. Gentleman misunderstood me if that is what he thought. I used the words, "That is out of order" and I gave the hon. Member for Bolsover the opportunity to withdraw what he had said, but he did not do so.
Mr. Nigel Spearing: Further to the point of order, Mr. Speaker. Notwithstanding your remarks, Mr. Speaker, can I put it to you, first, that a question to the Prime Minister does not necessarily include an allegation if it is in the form of a question—which was the form of words used by my hon. Friend — and, secondly, although you ruled my hon. Friend's question out of order, if the Prime Minister had not replied, which I suspect is prima facie out of order, we should have proceeded to the next question and the matter would not have arisen. Might I therefore suggest that my hon. Friend's use of the word "allegation" is not in accordance with the words recorded in Hansard?
Mr. Speaker: Whatever the hon. Gentleman may say, the fact remains that I asked the hon. Member for Bolsover to withdraw his remark. He persistently refused to do so. The whole House knows that and it heard what was said.
The House having divided: Ayes 218, Noes 84.

Division No. 411]

[4.20 pm

AYES

Adley, Robert

Harris, David

Alison, Rt Hon Michael

Harrison, Rt Hon Walter

Alton, David

Haselhurst, Alan

Amery, Rt Hon Julian

Havers, Rt Hon Sir Michael

Ancram, Michael

Hawkins, C. (High Peak)

Arnold, Tom

Hawkins, Sir Paul (SW N'folk)

Ashby, David

Hayes, J.

Ashdown, Paddy

Hayward, Robert

Aspinwall, Jack

Heathcoat-Amory, David

Atkins, Robert (South Ribble)

Hickmet, Richard

Atkinson, David (B'm'th E)

Holland, Sir Philip (Gedling)

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

Holt, Richard

Baldry, Anthony

Hooson, Tom

Banks, Robert (Harrogate)

Howard, Michael

Beith, A. J.

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

Best, Keith

Howe, Rt Hon Sir Geoffrey

Biffen, Rt Hon John

Howells, Geraint

Biggs-Davison, Sir John

Hughes, Simon (Southwark)

Blaker, Rt Hon Sir Peter

Hunt, David (Wirral)

Bottomley, Peter

Hunter, Andrew

Bottomley, Mrs Virginia

Hurd, Rt Hon Douglas

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

Irving, Charles

Bowden, Gerald (Dulwich)

Jackson, Robert

Boyson, Dr Rhodes

Johnson Smith, Sir Geoffrey

Braine, Sir Bernard

Jones, Robert (W Herts)

Brinton, Tim

Kershaw, Sir Anthony

Brittan, Rt Hon Leon

Key, Robert

Bruce, Malcolm

Kilfedder, James A.

Bruinvels, Peter

King, Rt Hon Tom

Buck, Sir Antony

Kirkwood, Archy

Budgen, Nick

Knight, Gregory (Derby N)

Carlisle, John (N Luton)

Knight, Mrs Jill (Edgbaston)

Carlisle, Kenneth (Lincoln)

Knox, David

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

Lamont, Norman

Chapman, Sydney

Lawler, Geoffrey

Chope, Christopher

Lawrence, Ivan

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

Lawson, Rt Hon Nigel

Clark, Dr Michael (Rochford)

Lennox-Boyd, Hon Mark

Clark, Sir W. (Croydon S)

Lewis, Sir Kenneth (Stamf'd)

Clarke, Rt Hon K. (Rushcliffe)

Lilley, Peter

Colvin, Michael

Lloyd, Ian (Havant)

Coombs, Simon

Lloyd, Peter, (Fareham)

Cranborne, Viscount

Luce, Richard

Dickens, Geoffrey

MacKay, Andrew (Berkshire)

Dicks, Terry

MacKay, John (Argyll & Bute)

Derail, Stephen

Maclennan, Robert

Douglas-Hamilton, Lord J.

McQuarrie, Albert

Durant, Tony

Major, John

Dykes, Hugh

Malins, Humfrey

Eggar, Tim

Malone, Gerald

Emery, Sir Peter

Maples, John

Eyre, Sir Reginald

Marlow, Antony

Fallon, Michael

Maude, Hon Francis

Favell, Anthony

Maxwell-Hyslop, Robin

Forman, Nigel

Meadowcroft, Michael

Forth, Eric

Mellor, David

Fowler, Rt Hon Norman

Merchant, Piers

Fox, Marcus

Meyer, Sir Anthony

Franks, Cecil

Miller, Hal (B'grove)

Fraser, Peter (Angus East)

Mills, lain (Meriden)

Freud, Clement

Mills, Sir Peter (West Devon)

Galley, Roy

Moate, Roger

Gardiner, George (Reigate)

Molyneaux, Rt Hon James

Goodhart, Sir Philip

Monro, Sir Hector

Goodlad, Alastair

Montgomery, Fergus

Gorst, John

Morris, M. (N'hampton, S)

Gower, Sir Raymond

Morrison, Hon C. (Devizes)

Greenway, Harry

Murphy, Christopher

Gregory, Conal

Neale, Gerrard

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

Needham, Richard

Grist, Ian

Nicholls, Patrick

Grylls, Michael

Ottaway, Richard

Gummer, John Selwyn

Owen, Rt Hon Dr David

Hamilton, Hon A. (Epsom)

Page, Sir John (Harrow W)

Hamilton, Neil (Tatton)

Pawsey, James

Hancock, Mr. Michael

Penhaligon, David

Hanley, Jeremy

Pollock, Alexander

Hargreaves, Kenneth

Porter, Barry

184

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

Thompson, Patrick (N'ich N)

Price, Sir David

Thornton, Malcolm

Rathbone, Tim

Thurnham, Peter

Rees, Rt Hon Peter (Dover)

Townsend, Cyril D. (B'heath)

Renton, Tim

Tracey, Richard

Ridley, Rt Hon Nicholas

Trotter, Neville

Roe, Mrs Marion

Twinn, Dr Ian

Rost, Peter

Wakeham, Rt Hon John

Rumbold, Mrs Angela

Walden, George

Ryder, Richard

Walker, Cecil (Belfast N)

Sainsbury, Hon Timothy

Wallace, James

St. John-Stevas, Rt Hon N.

Waller, Gary

Sayeed, Jonathan

Walters, Dennis

Shaw, Sir Michael (Scarb')

Wardle, C. (Bexhill)

Shelton, William (Streatham)

Warren, Kenneth

Shepherd, Richard (Aldridge)

Watson, John

Silvester, Fred

Wells, Bowen (Hertford)

Skeet, T. H. H.

Wheeler, John

Smith, Sir Dudley (Warwick)

Whitney, Raymond

Smith, Tim (Beaconsfield)

Wiggin, Jerry

Smyth, Rev W. M. (Belfast S)

Winterton, Mrs Ann

Soames, Hon Nicholas

Winterton, Nicholas

Stanbrook, Ivor

Wolfson, Mark

Stewart, Allan (Eastwood)

Wood, Timothy

Stewart, Andrew (Sherwood)

Woodcock, Michael

Stradling Thomas, J.

Wrigglesworth, Ian

Sumberg, David

Yeo, Tim

Taylor, John (Solihull)

Young, Sir George (Acton)

Tebbit, Rt Hon Norman

Younger, Rt Hon George

Temple-Morris, Peter

Thatcher, Rt Hon Mrs M.

Tellers for the Ayes:

Thomas, Rt Hon Peter

Mr. Ian Lang and Mr. Tristan Garel-Jones.

Thompson, Donald (Calder V)

NOES

Ashley, Rt Hon Jack

Lewis, Terence (Worsley)

Ashton, Joe

Litherland, Robert

Atkinson, N. (Tottenham)

Lloyd, Tony (Stretford)

Banks, Tony (Newham NW)

Lofthouse, Geoffrey

Barron, Kevin

Loyden, Edward

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

McNamara, Kevin

Bermingham, Gerald

McTaggart, Robert

Bidwell, Sydney

Marek, Dr John

Boyes, Roland

Marshall, David (Shettleston)

Buchan, Norman

Maxton, John

Canavan, Dennis

Maynard, Miss Joan

Carter-Jones, Lewis

Michie, William

Clarke, Thomas

Mikardo, Ian

Clwyd, Mrs Ann

Miller, Dr M. S. (E Kilbride)

Cohen, Harry

Morris, Rt Hon A. (W'shawe)

Cook, Frank (Stockton North)

O'Brien, William

Corbett, Robin

Orme, Rt Hon Stanley

Cowans, Harry

Park, George

Cox, Thomas (Tooting)

Patchett, Terry

Cunliffe, Lawrence

Pike, Peter

Dalyell, Tam

Powell, Raymond (Ogmore)

Davies, Ronald (Caerphilly)

Redmond, M.

Dobson, Frank

Roberts, Allan (Bootle)

Eadie, Alex

Robinson, G. (Coventry NW)

Eastham, Ken

Rogers, Allan

Edwards, Bob (W'h'mpfn SE)

Rooker, J. W.

Evans, John (St. Helens N)

Ross, Ernest (Dundee W)

Fatchett, Derek

Sheerman, Barry

Field, Frank (Birkenhead)

Short, Ms Clare (Ladywood)

Fields, T. (L'pool Broad Gn)

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

Foulkes, George

Soley, Clive

George, Bruce

Strang, Gavin

Godman, Dr Norman

Thorne, Stan (Preston)

Hamilton, James (M'well N)

Wardell, Gareth (Gower)

Hamilton, W. W. (Central Fife)

Wareing, Robert

Harman, Ms Harriet

Welsh, Michael

Hart, Rt Hon Dame Judith

Wigley, Dafydd

Heffer, Eric S.

Williams, Rt Hon A.

Holland, Stuart (Vauxhall)

Wilson, Gordon

Hughes, Dr. Mark (Durham)

Winnick, David

Hughes, Roy (Newport East)

Kilroy-Silk, Robert

Tellers for the Noes:

Lamond, James

Mr. Jeremy Corbyn and Mr. Bob Clay.

Leighton, Ronald

Question accordingly agreed to.
Ordered,
That Mr. Dennis Skinner be suspended from the service of the House.
Mr. Speaker: I call Mr. Secretary Younger to make his statement.
Mr. Andrew Faulds: On a point of order, Mr. Speaker. Because of this unfortunate interruption of service, and because the Prime Minister saw and grabbed an opportunity to change the press reportage of the GCHQ issue, could some more of us be called who wanted to ask a question on this grave matter?
Mr. Speaker: The House has had a very good run on this.
Mr. Faulds: I did not.
Mr. Speaker: Order. The House has had a good run. We have another statement and an important Back-Bench Members' debate ahead of us in which many right hon. and hon. Members wish to take part.
Dr. Owen: On a point of order, Mr. Speaker. We have heard from only one side in this dispute about the interpretation of the High Court's judgment. The Prime Minister has consistently claimed that the status quo will be maintained. One of the parties to the dispute has already said that it greatly resents the Government's attempt to misrepresent the High Court's meaning. The judgment is not available to right hon. and hon. Members. It is clear from the interpretation of one party to the dispute—after all, the Prime Minister is a party to it — that the judgment restores the status quo at GCHQ; it does not maintain the status quo. May we have the judgment in full placed immediately in the Library because at the moment it is not available to hon. Members? It is presumably being made available only to one party to the dispute.
Mr. Speaker: The judgment has been reported widely. The right hon. Gentleman's question is not a matter for me.
Dr. Owen: It certainly is a matter for the House. A party to the dispute has come to the House and given one interpretation. The Council of Civil Service Unions, which is another party to the dispute, has no doubt written to right hon. and hon. Members claiming that the former interpretation is black propaganda. Hon. Members have every right to see that interpretation. In the past 24 hours the rights of the House have been trampled on, and many of us are getting extremely annoyed about the way in which the Government have behaved.
The Attorney-General (Sir Michael Havers): Further to that point of order, Mr. Speaker. It was in the discussion between counsel and the learned judge afterwards that the judge recommended in open court that the status quo should be maintained. I have ordered a copy of the transcript. The moment that I have received it, I shall, of course, place it in the Library.
Mr. Dalyell: Further to that point of order, Mr. Speaker. Wanting for greater accuracy to see the full judgment rather than the report in The Times this morning, I went to the ever-helpful Dr. Menhennet, the Librarian, and asked him, together with his assistants, to get hold of the full judgment. I understand that the Library of the House of Commons has difficulty getting hold of these judgments because apparently they are done by a private firm which is unwilling to yield them up. As Mr. Speaker, can you look into this question of private firms which apparently prevent the Library of the House of Commons from getting hold of judgments?
Mr. Speaker: The hon. Gentleman has just heard the statement by the Attorney-General, who has told the House that as soon as it is available to him the judgment will be placed in the Library.
Mr. Tony Baldry: On a point of order, Mr. Speaker. Will you be so kind as to study a transcript of today's Hansard, because in his question to my right hon. Friend the Prime Minister the right hon. Member for Plymouth, Devonport (Dr. Owen) sought by implication to impugn the impartiality and integrity of the Master of the Rolls? If that is the case, I am quite sure that the hon. Gentleman would wish to withdraw.
Mr. Speaker: I was listening carefully but did not hear that accusation, and I have not had time to study the record of today's Hansard.
Later——
Mr. Nicholas Winterton: On a point of order, Mr. Speaker. I understood that it was the decision of the House that the hon. Member for Bolsover (Mr. Skinner) should leave the precincts of the House immediately. Am I permitted to say that he still remains within the precincts of the House in the Lobby, giving a statement to the press? I should be obliged, Mr. Speaker, if you would give instructions for your decision, and that of the House, to be implemented forthwith.
Mr. Speaker: I shall look into the matter.

Rate Support Grant (Scotland)
4.32 pm
The Secretary of State for Scotland (Mr. George Younger): With permission, Mr. Speaker. I wish to make an announcement about local authority expenditure and rate support grant in Scotland.
Scottish local authorities are planning expenditure in 1984–85 which is some £114 million, or 4·2 per cent. above the current expenditure guidelines that I issued to them. When I met the Convention of Scottish Local Authorities on 22 June, I said that I was disappointed that authorities were not much closer to the expenditure provision made in the rate support grant settlement. Having considered the budget returns of authorities I said that I had decided not to take selective action to reduce the rates of any individual local authority this year, although I will not hesitate to use the power again if an individual authority plans excessive and unreasonable expenditure.
However, since there was only marginal improvement on last year in the general level of expenditure I made it clear that there would have to be a substantial general abatement of rate support grant. It is apparent that the abatement which I imposed last year was not sufficient to impress upon authorities the very real need to bring their spending into line with Government guidelines.
In my consideration of the level of abatement required I was very aware of two arguments which the convention and individual authorities had raised with me.
The first was the distribution of the abatement. Previously grant reductions for excess over guidelines bore no relation to the level of excess over guideline. Authorities were penalised in proportion to their share of grant rather than on the basis of their degree of overspend. This, I acknowledge, was not fair. During the parliamentary proceedings on the Rating and Valuation (Amendment) (Scotland) Act 1984 it was made clear that I intended to use my powers under the Act to ensure that the amount of reduction for each authority was directly related to the extent of its overspend.
Secondly, COSLA has for a number of years represented to me the unfairness of a system which did not recognise reductions in overspend at outturn and thus gave no incentive to respond to an abatement by economies in the current year. This year, I have decided that the amount of the grant reduction will be adjusted when information is available about actual expenditure in 1984–85. Any authority whose expenditure at outturn is below guidelines will have its grant penalty cancelled. An authority which while still above guideline reduces its expenditure at outturn will have its penalty reduced. Conversely, of course, an authority which increases its excess will find its penalty on outturn increased.
In the light of these two significant improvements to the system, which have removed the basic unfairnesses which have previously existed, I have had to consider whether to seek a grant reduction equal to the full amount of the overspending of £114 million.
I have decided, however, that a penalty of this scale would be too steep an increase on last year's total penalty of £64 million. I have decided that for 1984–85 the appropriate reduction would be £90 million. I will lay the necessary rate support grant order shortly, and grant reductions will start on 1 August I have today placed in the
188
Library a paper showing how the abatement will affect each local authority, and letters of notification to them are being posted today.
I accept that this penalty will be regarded as severe. At the same time the new system will allow authorities to reduce their penalty in part or in entirety by taking positive action now to bring their spending down. The solution lies in their hands. In the interests of their ratepayers and of the economy as a whole, I hope that this opportunity will not be missed.
Mr. Donald Dewar: I begin by welcoming one feature, and one feature only, of an otherwise deplorable statement. It is right that those authorities whose outturn is less than the budgeted expenditure on which the penalty was calculated should have a reduction in that penalty. But if there are to be such reductions—and that seems likely—I assume that that will mean a reduction in the total of £90 million which is to be clawed back and that it will not mean an increase in the burden to be shouldered by other authorities. It is important that that should be made clear.
The Secretary of State is right on only one other thing —that this abatement will be seen as severe. It is clear that the clawback is punitive and that there is no justice, no sign of social conscience and no appreciation of the damage that will be done to basic services by the announcement. A clawback of £90 million on an excess of £114 million means that the Government will be taking back 79 per cent. of the total overspend.
My understanding is that the equivalent percentage in England was 66 per cent., and in Wales 54 per cent. In 1982–83 there was an excess of £203 million and the penalty was £57 million. I am fairly including the individual hit lists—the section 5 procedures—as well. In 1983–84, the excess was £121 million and the penalty was £64 million.
When put in that context, it seems that the present figure of £90 million on an excess of £114 million is vindictive, unreasonable and unreasoning. The consequences will be further cuts in services, fewer teachers and home helps, a less effective social work service and a poorer transport service. The only way in which that can be avoided — surely the Secretary of State recognises this—will be an increase in rates.
I understand, and will the right hon. Gentleman confirm, that the £90 million clawback is the equivalent of about 7·5p on the rates across the board in Scotland? How does he expect Strathclyde to find £39 million half-way through the year, Lothian £12·5 million, and Edinburgh—which under a Tory Administration had the largest excess over guidelines—£3·9 million?
Is it not sadly inevitable that this will mean a continuation of the tension between central and local Government which has marked the last few years — a tension which has degenerated to confrontation and for which the Secretary of State and his policies bear a heavy responsibility? In view of his party's humiliating reverses in the district council election, which show what the people of Scotland think of the policy lines that he is pursuing, will he reconsider his policy? Will he recognise that his insensitivity and prejudice are doing real damage to everyone in Scotland?
Is not the Secretary of State ashamed of the fact that, despite the obvious and genuine need to improve, not cut, services, if he takes the whole £90 million in the cuts in

189
this financial year the grant table in 1984–85 will be £20 million less in cash terms than it was two years ago? Is that not a recipe for disaster, and something that he should undo before the damage becomes irreversible?
Mr. Younger: The hon. Gentleman, I know, has not had a great deal of time to study my statement, but he has greatly underestimated the effect of the two major changes that I have made in how the grants will be applied. They introduce a wholly new principle, and councils will now have a direct incentive, and one from which they can profit, to reduce expenditure in their budgets. I confirm that if, as I hope, local authorities reduce their excess over guidelines, and therefore get reduced penalty, that does not adversely affect any other authority as it is a reduction in the total amount that is recovered.
Secondly, as to the comparison between Scotland and England and Wales, I make it clear that it is impossible to compare two wholly different systems. For instance, a large number of English authorities—about one third—have penalties that are over 100 per cent. of their excess. We have always set our face against that in Scotland, and the one thing that COSLA does not wish is to have the English system. The English penalty for 1984–85 has gone up 63 per cent. from the 1983–84 figure, whereas the Scottish penalty that I announced this afternoon has gone up by only 40 per cent., so it cannot be said that this is unfair to Scotland.
As to the effect on rates, I would be most astonished if Scottish local authorities took the view that the way to achieve their budgets was to go ahead, irrespective, and put the increase on the rates. There is a direct incentive to make the savings people want to see and thereby get recompense through reduced penalties.
It is the case that this announcement comes part way through the year, and that makes it more difficult for local authorities to make savings. We all know that, but I remind the hon. Gentleman that I clearly and positively reminded local authorities as long ago as June that there would be a large abatement, and that they would do well to start looking for economies then. The more sensible of them did so, and about one quarter of all our authorities are in any case well within the guidelines and will not suffer penalties.
Sir Hector Monro: I warmly welcome my right hon. Friend's continuing efforts to keep extravagant authorities within bounds in the interests of ratepayers. What positive incentive is there to local authorities, such as Dumfries and Galloway and the four districts within it, who keep their expenditure within guidelines? Will my right hon. Friend switch resources from extravagant authorities to those who deserve an incentive to keep within the guidelines?
Mr. Younger: I can appreciate my hon. Friend's point, and I am grateful for his comments. The main incentive for authorities such as Dumfries and Galloway — to whom I pay a warm tribute for the way that it has successfully achieved the difficult task of getting its spending down—is that they, unlike other authorities, can go ahead with their plans, secure in the knowledge that no penalty applies to them.
Mr. Gordon Wilson: Will the Secretary of State accept that this craven surrender to the Treasury leads many of us to believe that he wishes
190
promotion, and there is no sacrifice that he would make to achieve that? Secondly, as it has been shown that the increase in penalty in Scotland is far greater than it is in England and Wales, will he come clean and confirm that as part of the Treasury's instruction, there is a progressive reduction in the amount of money available to the Scottish Office, and that that is one of the reasons why these impositions are placed on our constituents year after year?
Mr. Younger: I am sorry to say so, but the hon. Gentleman is wrong on both counts. First, it is expected that there will be a smaller increase in the general abatement this year in Scotland than the equivalent English amount, which is 63 per cent. as against 40 per cent. for Scotland. As to general abatement, I thought that the hon. Gentleman knew that Scottish expenditure en bloc is worked out by a formula, which has not changed.
Mr. Albert McQuarrie: I congratulate my right hon Friend on penalising those authorities that have overspent on guidelines. Will he assure me that it is not his intention to penalise the Grampian region, which has kept within the guidelines despite the problems that it had with snow clearing and so on during last winter? Will he also assure me that Banff and Buchan district, which has done its best to keep within the guidelines, will not be penalised?
Mr. Younger: I am grateful for my hon. Friend's comments. I can confirm that Grampian regional council, which has done extremely well in getting its expenditure down, is not subject to penalty as it is well within the guidelines. Unfortunately, I cannot say the same about Banff and Buchan, which has an excess this year, and will therefore have a penalty to pay. However, that penalty will now be fair, which it was not this time last year.
Mr. Bruce Millan: Is not today's statement part of the Secretary of State's continued vendetta against Scotland's local authorities? Deny it as he will, are not these penalties more savage than in the past two years, and considerably more savage than those being imposed in England? At the moment, the total penalty there is £450 million, while that for Scotland at £90 million is proportionately much higher.
If the local authorities were to carry out the reductions in services that these penalties will impose on them—I am confident that they will not because they have too much concern for the ratepayers of Scotland and the people for whom they provide services—there would be savage reductions in many social services in Scotland. Is that rot the kind of measure that the Secretary of State is trying to enforce on Scottish local authorities?
Mr. Younger: The right hon. Gentleman is exactly the person to ask that question. The last year when he had responsibility as Secretary of State was 1978–79, and local authority budgets this year are still 2·6 per cent. in real terms above what he allowed in that year. That is the complete answer to the nonsense that he has just put out about wholesale cuts in services, because the services that he approved would be 2·6 per cent. below what local authorities are proposing in their budgets this year. Secondly, as to grant reductions, the right hon. Gentleman has a bit of a cheek. We all remember an article in The Scotsman that he wrote, in which he strongly recommended to me that the way to control local

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government expenditure was to make reductions in grant. If that was his advice, I do not not know why he is complaining now that I have to do it.
Mr. Gerald Malone: My hon. Friend will be aware of the relief felt by Conservative Members that he is at last able to reduce local authority spending across the board and does not have to penalise councils that keep within budgets. I reiterate that Grampian regional council is a good example. Will he remind Labour Members that in the case of councils such as Aberdeen district council, which I suspect will be overspending, there are two solutions? One would be to reduce the budget, and the second would be to proceed with policies initiated by this Government, such as the sale of council houses, which will increase their receipts and improve services at reduced cost, while allowing them still to come within their budget? Is it not a fact that there is no necessity to reduce services as a result of my right hon. Friend's statement?
Mr. Younger: My hon. Friend is right. In particular, he will remember very well that Aberdeen council forwent a considerable sum of money that it could have had for its housing if it had wished.
Mr. James Wallace: Does the Secretary of State agree that, because of the abatement, the level of rate support grant will be cut in cash as well as real terms from what it was in 1982–83? Is he not surprised that councils are still overspending? Is that not because many councils have cut away all the fat there is to cut and cannot eat into the muscle and the bone?
Does he not accept that it must be very galling to councils such as the Shetland islands council, which will suffer an abatement of almost £500,000 when it has cut expenditure responsibly as and where it can and maintained basic services, that the Government are giving money to Liverpool council in spite of its irresponsible militant action?
Mr. Younger: The hon. Gentleman's latter point is not true, as he ought to know. He might have found a word of good to say about Orkney, in his constituency. The council is well within guidelines and will not suffer penalties. In the absence of the hon. Gentleman's congratulation, I congratulate the council.
Lord James Douglas-Hamilton: Is my right hon. Friend aware that there will be much interest in his decision that the reduction should be limited to overspend? How will Edinburgh and Lothian region be affected?
Mr. Younger: Both Edinburgh and Lothian region are considerably over budget and they will undoubtedly have to pay large penalties.
Mr. Alexander Eadie: The right hon. Gentleman must be aware that he came to the Dispatch Box to make a statement this afternoon with much-weakened political authority, in the light of the local government elections in Scotland in which his party was soundly trounced.
Will he be a little more forthcoming than in his rather ominous statement to his hon. Friend the Member for Edinburgh, West (Lord James Douglas-Hamilton) that Lothian region has overspent? Will he translate that in
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terms of teachers' and home helps jobs and other local authority services? The right hon. Gentleman owes it to the House to tell us what redundancies may be expected in services in Lothian region.
Mr. Younger: I appreciate the hon. Gentleman's point, but if Lothian region had not had such high levels of expenditure in the past, it would be easier to reduce spending. I recall that three years ago, when the previous administration in Lothian region was faced with a penalty for the first time, it declared that at least 15,000 redundancies would result. I understand that no compulsory redundancies resulted from the imposition of that penalty.
Now that the system is fair, I hope that that will be an incentive to Edinburgh, Lothian region and other authorities. Reductions in budgets will be reflected in a lower penalty. I hope that authorities will respond to that incentive.
Mr. George Foulkes: Will not the Secretary of State admit that this is an artificial accounting exercise and that the guidelines are artificial? Will he give examples of the profligacy of Cumnock and Doon Valley district council, which has low overheads? Is it burying too many people or cleaning the streets too much? Will the Secretary of State give examples of the profligacy on which he is encouraging the council to cut down?
Mr. Younger: The general answer to the hon. Gentleman's question is that if local authority expenditure as a whole is in real terms 2·6 per cent. above its level of five years ago, all the talk about slashing services wholesale is just a load of rubbish.
Services are better and bigger than five years ago. We must all face the fact — with respect, the hon. Gentleman would need to do so if he was likely to be in government—that only a certain amount of money is available for all services. If local authority expenditure is allowed to run ahead of what the country can afford, other services would be reduced. Hon. Gentlemen would resent that, too.
Mr. Robert Maclennan: Will not the Secretary of State acknowledge that the real increase in expenditure of 2·6 per cent. since he took office, to which he referred in his answer to the hon. Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes), is minuscule against a background of deindustrialisation and social despair, which puts much greater responsibilities onto local authorities than when the right hon. Gentleman took office? Will he accept that much of the difficulty faced by local authorities flows from his constant changing of the guidelines, which have been changed about seven times since he took office? It is all very well for him to sit in his ivory tower re-jigging the formulae and increasing abatements, but local authorities on the ground have to translate his paper work into cancelled programmes.
Mr. Younger: With respect, the hon. Gentleman is not right. The guidelines are built up with much care and generosity, and many allowances are written in for special needs.
The hon. Gentleman might be interested to know that Sutherland district council will have a small penalty of about £3,800 to pay for its overspend, which I hope it will manage to reduce.

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On industrialisation, our businesses and industries in Scotland have found the going so tough partly because of high rate increases. That case has been made clear in many areas of Scotland.
Mr. David Lambie: It is no wonder that so few Tory Back Benchers from Scottish constituencies are present to support the Secretary of State for Scotland in this further attack on the people of Scotland because they continue to vote Labour.
Before the Secretary of State imposes penalties on local authorities, will he take into account areas such as Cunninghame, where every fourth man is unemployed and we have a serious problem of long-term unemployment with people out of work for two, three or four years? Those factors create social problems needing more money. Is the Secretary of State prepared to receive representations from areas such as Cunninghame, with its high unemployment rate, before he imposes penalties on that district?
Mr. Younger: The hon. Gentleman has not examined the picture that he tries to describe. The result of the Government's policy has been substantially to reduce the level of rate increases in the past five years. They have been reduced from a peak of about 35 per cent. at their highest level to about 5 per cent. last year.
Services are higher in real terms, than five years ago. The hon. Gentleman's description does not tie up with the figures.
Mr. Harry Ewing: Does not the Secretary of State appreciate that he is left without credibility, in Scotland, as the ratepayers and electors demonstrated in two recent elections? Does the Secretary of State not accept some small responsibility for creating an additional 300,000 unemployed during his time as Secretary of State and agree that teachers and home helps are fewer?
Does the Secretary of State not believe that he has the responsibility to feed in additional resources to help to deal with the problem? Does he not accept that we should be talking not about abatements and reductions in Scottish authorities, but about the allocation of additional resources to every district, region and island authority in Scotland?
Mr. Younger: I am trying to put over the point that additional resources are being allocated right now and that services are 2·6 per cent. higher in real terms than five years ago.
There are slightly fewer staff working for Scottish local authorities than there were five years ago, but considerably more staff per head of population than south of the border. I believe, also, that there are more home helps than there were five years ago, so the hon. Gentleman's song makes no sense on any count.
Mr. Norman Buchan: The tenor of the Secretary of State's remarks is that he would prefer to have more rather then less unemployment in Scotland. When will he realise that his policy is cruel and stupid and that he will force local authorities into confrontation with the Government? He is imposing a legal obligation upon authorities by means of his punitive policy, while they have a statutory duty to carry out services. The Secetary of State will create conflict. We are dealing with real hardship and real poverty, and he is increasing the gravity of the situation.
Will he take it from us that, if he were to be promoted, the whole of Scotland would be delighted to see him go?
Mr. Younger: The hon. Gentleman's conclusions do not meet his facts. I would understand the hon. Gentleman's point if local authorities had been forced successfully to slash expenditure in the past five years, were spending much less now, and if many services had been slashed beyond recognition as a result. As none of his conclusion are true, his whole case falls.
Several Hon. Members rose——
Mr. Speaker: Order. I shall call all those hon. Members who have been standing in their places, but I remind them again that there is an important Back-Bench debate to follow. May I ask for brief questions, please?
Mr. John Maxton: Given that the Secretary of State's party has been rejected in election after election and twice within the past three months, how can he continue to impose his extremist political philosophy on the people of Scotland? Does he agree that he has no mandate or moral authority to do that? How can local authorities make these savings without creating massive unemployment in Scotland?
Mr. Younger: The answer is simple. A quarter of local authorities have already made the savings and will consequently suffer no penalty. A further five or six local authorities — making about one third in all — face no penalty or a very small penalty. That is the answer—if they can do it, why cannot all the others?
Mr. William McKelvey: Will not the Secretary of State for once come clean and accept that this thinly disguised and vicious attack on the democratic rights of the people of Scotland has been carried out because Scottish people have consistently elected Labour-controlled authorities? As I have asked before, why does not the Secretary of State throw off the shackles of the lunatic monetarist policies that he follows so slavishly in accordance with the Prime Minister's diktat? Will he——
Mr. Speaker: The hon. Gentleman must be brief.
Mr. McKelvey: Will the Secretary of State not sober up, throw off the opiate of monetarism, and agree that he is making nothing more than a vicious attack on those people in Scotland who have consistently voted Labour?
Mr. Younger: The only point that I should answer is the hon. Gentleman's suggestion that I am picking on people because they vote Labour. I suppose that Opposition Members will agree that Glasgow is the best example of a consistently and thoroughly Labour-controlled authority. This Government have poured money into that city. I need name only the exhibition centre, the St. Enoch's centre, job dispersal into the centre of Glasgow, new buildings for the courthouse and the Royal Scottish Academy of Music and half the cost of the Burrell gallery. Glasgow is a Labour-controlled authority, but there is not much evidence there for what the hon. Gentleman has suggested.
Mr. Archy Kirkwood: Is the right hon. Gentleman aware that for the Borders, this dose of agony is more palatable as it affects only one district council? I think that he will confirm that Berwickshire district council is being penalised to the tune of £26,000. Is it not a mark of his policy's failure that Berwickshire district council, which is Conservative-controlled, which is labouring under the great difficulties

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involved in having a rural area to administer, and which has in the past adopted progressive policies, should be penalised by the Government in this way?
Mr. Younger: The hon. Gentleman has fairly raised a very good point. I shall use the broadest definition of the Borders. With the exception of Berwickshire, I can say that Borders regional council, Dumfries and Galloway regional council, Ettrick and Lauderdale district, Roxburgh district, Tweeddale district and Nithsdale district face no penalty as they have kept within the guidelines. If they can do it, why cannot the rest of Scotland?
Mr. Tam Dalyell: May I contrast the statement made this afternoon with what was happening 24 hours ago in this House in the debate on the Gower committee report, when we discussed the Stock Exchange, the bullion market——
Mr. Speaker: Order. Does the hon. Gentleman's question have anything to do with the statement on rate support grant? I called him to ask a question on that, but if he is raising a point of order I shall call him later.
Mr. Dalyell: It is a question.
Mr. Speaker: Very well.
Mr. Dalyell: May I contrast the huge amount of money that the City operates on with the comparatively small amounts needed in Scotland. The £12·5 million for Lothian means redundancies for roughly 800 teachers and 1,200 home helps. Does the Secretary of State or his officials have any calculation of how much it costs in terms of unemployment benefit to render those people unemployed? What is the very lowest cost of that to the Government?
Mr. Younger: If the hon. Gentleman wants to ask me specifically about the figures, I can try to discover the answer. In general, however, his case does not stand up to analysis. In 1978–79, Scottish local authorities spent £2,684 million, and in 1984–85 they will spend £2,754 million. Those are huge sums by any standard, and of course they have to be to maintain the vast range of services provided by Scottish local government. However, the burden of paying more than that is more than Scottish ratepayers and the Scottish people can manage at the same time as keeping Scottish industries going.
Mr. Ernie Ross: In 1981, the Secretary of State took £975,000 away from Dundee district council by order of the House because he alleged that it was being excessive and unreasonable. However, he made no effort to claw back any more money from the council until this statement. How can we encourage local authorities to be reasonable if they still suffer when they are reasonable? How can the right hon. Gentleman explain the £5 million penalty on Tayside region when, since coming into being, it has bent over backwards to do what both Labour and Tory Governments have suggested? Local authorities will have to make 20,000 people redundant if they are to keep within the new guidelines for the last five months of the year. Which one of his own family would he like to see made redundant?
Mr. Younger: The hon. Gentleman was not correct in his first statement. Like all other Scottish local authorities, Dundee has paid a share of the general abatement each year. In the past year and previous years it has paid a share of an unfair general abatement. From now on, it will pay a share of a fair general abatement, under which the amount of money that it has to pay in penalty is directly related to the amount of its overspend. The hon. Gentleman should welcome that. Of course, I hope that savings can be made with the maximum care for economy while at the same time making no more redundancies than necessary. However, the ordinary ratepayers and taxpayers have to pay for those services and so they must be entitled to obtain them at the lowest possible cost.
Dr. Norman A. Godman: I readily acknowledge that there are major differences between the English and Scottish systems of local government, and that that may make comparisons difficult, but why is the Secretary of State aiming so much higher in his penalties than is his English counterpart?
Mr. Younger: It is not quite like that. I shall explain briefly. The penalty systems north and south of the border are entirely different. The objective is the same—to bring expenditure down—but the approaches to it are different and comparisons cannot be made easily. In England and Wales a penalty tariff is announced in advance. For substantial numbers of authorities—about a third of English authorities—the loss of grant under that tariff is over 100 per cent. of their overspend, and for some authorities it is over 200 per cent. of their overspend. Some authorities receive no grant. No Scottish authority is in that position. In addition, the English penalty has increased by 63 per cent., whereas the Scottish penalty has increased by only 40 per cent.
Mr. Dewar: As the Secretary of State is obviously so well briefed on the situation in England, perhaps he will give us the total English penalty figure, as that is the comparison for which we are looking. Will he give an assurance that as the subject is obviously of great interest to hon. Members— many of my hon. Friends have tried to make points already— the debate on the order will not be confined to one and a half hours late at night?
Mr. Younger: The hon. Gentleman's latter point is a matter for my right hon. Friend the Leader of the House, and I shall draw his attention to the hon. Gentleman's remarks. If the hon. Gentleman wishes to know any of the figures for England, I shall be happy to write to him.

Statutory Instruments, &c.
Mr. Speaker: With the leave of the House, I shall put together the two motions relating to statutory instruments.
Ordered,
That the draft Insolvency Proceedings (Increase of Monetary Limits) Regulations 1984 be referred to a Standing Committee on Statutory Instruments, &c.
That the draft Cosmetic Products (Safety) Regulations 1984 be referred to a Standing Committee on Statutory Instruments, &c. —[Mr. Lang.]

Visiting Forces etc. (Amendment)
5.9 pm
Mr. Paddy Ashdown: I beg to move,
That leave be given to bring in a Bill to amend certain provisions of the Visiting Forces Act 1952 and the International Headquarters and Defence Organisations Act 1964, so as to restrict their application to persons attached to or working at locations specified by Order in Council and their dependants.
What with one thing and another, immunities have been much in the news recently. The British public, and hon. Members in this House, have been justifiably concerned about whether it is right to offer immunities to diplomats, which allow them to commit crimes against British law, offend the standards of civilised behaviour and then avoid the consequences of their actions. However, it appears that it is not only diplomats who enjoy immunities from British law for unlawful acts committed in this country.
The Visiting Forces Act 1952 and the International Headquarters and Defence Organisations Act 1964 offer visiting forces in Britain a form of immunity from appearing before British courts in respect of nations committed against British law on British territory, so long as they can claim to be on duty at the time, or if the acts involve only visiting forces personnel or property.
It is the view of the Home Office, judging by a recent parliamentary answer which I received, that the rights enjoyed by visiting forces are not, technically, immunities as such. I am grateful to the Under-Secretary of State for the Home Department for being present. The Home Office argues that service courts of a visiting force are allowed by the Act to have primacy over British courts in cases which fall under the Act. One can accept that this is not the same form of total immunity as that enjoyed by diplomats, but it is a kind of immunity nevertheless—if not from some jurisdiction, then at least from the jurisdiction of British courts for acts committed in Britain.
I can understand why such provisions may be required by visiting forces helping to defend Britain in time of war. Indeed, there seems little doubt that the two Acts were instituted to regularise the position as a result of the de facto immunities enjoyed by visiting forces in Britain during the second world war.
In that sense the Acts are a leftover from 40 years ago. There can be no justification for the continuation of those anachronisms today. Indeed, the immunities, far from fostering good relations between visiting forces and the people of Britain, have instead in some instances proved a source of provocation and resentment, which has inevitably damaged those relations.
I acknowledge that visiting forces in Britain, by and large, appear to have exercised some restraint in seeking to make use of the provisions of the Acts. However, there have been disturbing individual examples of foreign service men avoiding the consequences of British law because of the Acts.
Since obtaining this ten-minute Bill, I have been informed by several hon. Members of a number of individual cases of that sort, some of which are serious and some relatively trivial.
Perhaps the most disturbing case in recent years was that involving Mathew Cheshire, a 17-year-old RAF technician at St. Mawgan in Cornwall, who was killed in a road accident on the base by a United States service man driving a jeep on the wrong side of the road. Using the provisions of the Act, the United States Navy interrupted
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a local inquest on Mathew Cheshire, and prohibited the coroner, Mr. Alan Harvey, from continuing. Six months later the United States Navy tried the marine concerned at a court martial in London. They fined him one dollar.
The attitude of the United States authorities in that case and in others infuriated not only Mr. Cheshire's parents, but local journalists and police officers. After Mathew Cheshire's death, local police were prevented for three hours from entering the base to investigate the accident. A local journalist, covering the case, was misled by a United States official in an attempt to prevent him from attending the court martial
In a similar earlier case a British judge expressed his anger about the immunities offered under the Act in the following terms:
"It did seem rather unfortunate if visiting sailors or airmen could leave the country and leave an action of this kind to proceed in their absence. One would have thought that … the responsible authorities would attend to the material results of the judgment. There is nothing I could do about it. There did seem to be a large lacuna and a loophole if visiting service men could drive cars all about the country and then leave before a civil action came to trial".
I should make it clear that United States visiting forces do not uniquely make use of these provisions. It merely happens that, since there are more United States forces stationed in Britain, there are, naturally, more cases which relate to them. It will not be lost on those who follow these matters that this subject has been elevated in importance because of the stationing of cruise missiles in Britain. They have already caused conflicts between United States forces and civilians. But those conflicts will be as nothing to those which may occur not only with British civilians, but with British forces, because British people have no de facto physical control over the firing of the missiles through a dual-key system.
This anxiety has received yet further impetus as a result of an answer recently given by the Secretary of State to the right hon. Member for South Down (Mr. Powell), who asked the Government what the legal provisions were, under which American service men had the right to arrest British citizens, for instance, at Greenham common. The right hon. Member received, at the end of last week, a reply—which I understand is to be published in the Official Report tomorrow — which stated that United States service men had citizen's rights of arrest in such circumstances, similar to those enjoyed by British service men, because of the provisions of the Visiting Forces Act 1952. The position, therefore, seems to be that United States forces have the same powers of arrest and detention as British forces as a result of these Acts; however, whereas British forces can be taken to court if they use excessive force or abuse these powers, American forces could, under the very same Act, escape from such legal redress. The same Act which confers powers on United States forces to arrest British citizens also, it seems, provides the means by which United States forces can escape British law if those powers are abused. Surely that cannot be correct.
We know that in 1980–81, the last year for which figures are available, no fewer than 1,123 offences committed by foreign service men in Britain could have been subject under the Act primarily or exclusively to foreign jurisdiction. What is extraordinary, however, is that, according to a parliamentary answer given to me on 5 April, we do not know how many times the immunities under the Act were claimed, because the Home Office

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does not think it important to keep such figures. It seems remarkable, to say the least, that the Home Office does not regard it as important to keep a record of how many times those who have committed offences on British soil against British law were able to remove themselves from British justice in favour of foreign jurisdiction.
Visiting forces in Britain enjoy a greater degree of immunity than in other NATO states. Even in West Germany, where the legacy of post-war occupation still gives allied forces unusual powers, the police have the right to decide whether cases involving the interests of German citizens should be heard in German courts rather than under the law of the military forces concerned. In 1980, a secret document leaked to the press revealed that certain NATO countries would have to sign an emergency agreement to give local United States commanders certain immunities from their law before United States reinforcements could be deployed in Europe. Britain was the only major NATO power not required to give such an undertaking, presumably because it was considered that the Visiting Forces Act 1952 and the International Headquarters and Defence Organisations Act 1964 already gave such immunities.
It is not my purpose with this ten-minute Bill either to seek to remove those so-called immunities or to withdraw those two Acts, although there will doubtless be many hon. Members who believe that that is what should happen. But before any Secretary of State can grant immunities to visiting forces in Britain, he should bring the matter before Parliament for approval. It is not the Secretary of State, or even the Government, who make the laws of this country; it is Parliament itself. The granting of immunities from jurisdiction under the laws which Parliament makes, should be in the gift not of the Secretary of State, but of Parliament. In the hope of bringing about that position, I commend the Bill to the House.
Question put and agreed to.
Bill ordered to be brought in by Mr. Paddy Ashdown, Mr. Russell Johnston, Mr. Dafydd Wigley, Mr. Alex Carlile, Mr. Gavin Strang and Mr. James Tinn.

Visiting Forces etc. (Amendment)
  VISITING FORCES ETC. (AMENDMENT)
  Mr. Paddy Ashdown accordingly presented a Bill to amend certain provisions of the Visiting Forces Act 1952 and the International Headquarters and Defence Organisations Act 1964, so as to restrict their application to persons attached to or working at locations specified by Order in Council and their dependants: And the same was read the First time; and ordered to be read a Second time upon Friday 26 October and to be printed. [Bill 218.]
ESTIMATES DAY
[3RD ALLOTTED DAY]—considered
ESTIMATES DAY
  Estimates 1984–85

    Class II, Votes 1 and 8
    Motion made, and Question proposed,
    That a further sum not exceeding £363,123,000 be granted to Her Majesty out of the Consolidated Fund to defray the charges which will come in course of payment during the year ending on 31st March 1985 for expenditure by the Foreign and Commonwealth Office on Salaries (Subhead Al of Vote 1), Loans: allocated (Subhead C1 of Vote 8), Grants: allocated (Subhead C2 of Vote 8), and service overseas and regional technical co-operation programmes (Caribbean and Pacific) (Subhead D1(5) of Vote 8).—[Mr. Whitney.]
    Mr. Deputy Speaker (Mr. Paul Dean): Before I call the right hon. and learned Member for Hendon, South (Mr. Thomas), the House will wish to know that this debate must end at 7.30 pm, so time is limited.
    5.19 pm
    Mr. Peter Thomas: This debate arises out of the report of the Foreign Affairs Committee on Grenada, which was published in early April, and the Government's observations on and reply to the report, published towards the end of the last month. The "tag" on today's Order Paper relates to the Committee's report on the Foreign and Commonwealth Office and Overseas Development Administration Supply Estimates 1984–85, which was published yesterday, which includes a certain amount of evidence and comment on the aid Estimates for Grenada and recent cuts in FCO and ODA manpower.
    The House may be wondering why a debate on what appears to be a largely political subject is masquerading as an Estimates debate. Perhaps I should make it clear at once that a large part of the report on Grenada dealt with the quality of information reaching British Ministers from our diplomatic staff in the Caribbean and the effectiveness of the ODA in responding to the urgent needs of Grenada after the United States intervention last October. In other words, we were interested in the efficiency of the United Kingdom's relatively large missions in the eastern Caribbean and the value for money that the country was receiving from its relatively large investment in the region.
    We have not tabled any amendment because the report reflects the anxiety, expressed yesterday, about the potential danger of further cuts in diplomatic service manpower.
    The Committee, in paragraph 19 of its conclusions, states that
    "the squeeze on the Diplomatic Service manpower has probably gone far enough and that additional significant reductions would only be made at the cost of accepting a reduced level of quality of service."
    I have been asked to open this debate because the Chairman of the Foreign Affairs Committee, my hon. Friend the Member for Stroud (Sir A. Kershaw), was unhappily unable to participate in the Committee's visit to the Caribbean in January. It therefore fell to me to lead the team.
    I have no doubt that other members of the Committee will wish to take part in the debate. Therefore, I propose to limit my remarks to what seem to be the key issues raised during our inquiry.

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    The House will be fully aware of the background and the history. Grenada is a truly lovely and relatively prosperous east Caribbean island of 133 square miles. It has a population of about 110,000 attractive people. For nearly 200 years it was a British colony. In 1967 it became an associated state, with Great Britain retaining responsibility for defence and external affairs.
    In 1974, under the premiership of Sir Eric Gairy, and without the wholehearted enthusiasm of the populace, Grenada was granted independence. In March 1979, the Gairy regime was overthrown in an almost bloodless coup by Maurice Bishop's New Jewel movement. Until October 1983 Grenada was governed by a people's revolutionary Government which aligned itself with Cuba, Russia and the Eastern bloc countries, and pursued certain policies which caused increased alarm to its neighbours and, in particular, it seems, to the United States of America.
    In October 1983, following dissension within the revolutionary Government, Maurice Bishop was overthrown. On Wednesday 19 October he was summarily executed together with three of his former Ministers and two trade union leaders, and the revolutionary military council took over Grenada and imposed a curfew upon its inhabitants.
    What is relevant is that, throughout all these events, Grenada was a member of the Commonwealth and, despite the suspension by the revolutionary council of its independence constitution and in strange contrast to its revolutionary movement in the Bolshevik mould, it retained the Governor-General, representing Her Majesty the Queen as Head of State. The Governor-General was, of course, wholly independent of Her Majesty's Government here.
    In the early morning of Tuesday 25 October the United States, with Jamaica and Barbados and with the support of five members of the Organisation of East Caribbean States, invaded Grenada and within three days secured all significant military objectives and restored Grenada to peaceful order.
    The "joint rescue mission", as the United States Administration likes to call it, was overwhelmingly welcomed in Grenada, in particular by the Governor-General, Sir Paul Scoon, who, on 31 October, announced his intention to appoint an interim advisory council to run Grenada until elections could be held. That council was proclaimed formally a fortnight later, and, with the Governor-General, now forms the present Government of Grenada.
    That, in brief, was the background against which the Foreign Affairs Committee, immediately after its reappointment in December last year, decided to investigate. Our terms of reference were to investigate
    "the political crisis in Grenada, progress towards the restoration of civilian democratic government, and the aid and development needs of the Island."
    Two matters particularly interested us. The first was the widespread allegation in the Caribbean that the United Kingdom had failed its friends in the region by failing to participate in the military intervention of 25 October. Naturally, those allegations gave rise to worries about the effects of the intervention on Great Britain's close and long-standing links with the region.
    The second matter was that there had been many suggestions that the British Government had been kept deliberately in the dark about American and Caribbean plans for military action. Those suggestions had inevitably
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    been fuelled by the denial of my right hon. and learned Friend the Secretary of State for Foreign and Commonwealth Affairs in the House, only a few hours before the troops moved in, that he knew of any intention of American military action.
    If those suggestions were proved to be well-founded, further questions were bound to follow about the health of the special relationship and the efficiency of our information and intelligence gathering in Washington and the Caribbean.
    The difficulty which the Committee faced in seeking to answer the key questions — about the nature of any request for United Kingdom military assistance and the quality of information available to the Government at the time—was, of course, that the answers could be found only in the files and collective memories of the traditionally and understandably secretive diplomatic services not just of the United Kingdom, but of the United States and of the Governments of the eastern Caribbean.
    If the Committee were to do its job properly, therefore, there was no chance of doing so through the normal process of evidence taking, even if the evidence had been taken in private. No foreign Government would submit to formal interrogation by a British Select Committee, but foreign Governments possessed much of the relevant information.
    Although we were able to take useful evidence from our own Ministers, particularly on aid matters, much of our report had to be based on information given to us in private, and strictly off the record, by the representatives of foreign Governments and our own diplomatic representatives overseas.
    For obvious reasons, we had to respect the confidentiality of our sources and could not disclose much of the fascinating detail of the events of last October revealed to us by those sources.
    The House, therefore, has before it a report which lacks many of the footnote references that it would normally expect to find, and which, in places, is necessarily and deliberately opaque. Far from indicating any uncertainty or unreliability in our account of the events of last October, these features in our report reflect our awareness of the delicacy with which a public parliamentary Committee must tread when entering a world as closed as the diplomatic world, and our respect for the openness and frankness of the Ministers, diplomats and other Government officials who agreed to talk to us in Bridgetown, Port of Spain and St. Georges.
    In paragraph 24 of the report we state:
    "We are confident … that our account accurately reflects the information given to us during these conversations."
    The Government, in reply to our report, have chosen to describe our description of events as "oversimplified" and relying "too much on hindsight". But, with respect, I submit that nothing in the Government's reply, nor any subsequent information which has become available, suggests that in any detailed respect the Committee's account is wrong or its conclusions false.
    The Committee's report is broadly divided into three parts. The first part deals with the events leading up to the overthrow of Maurice Bishop, the United States Caribbean intervention and an assessment of the consequences of Britain's non-involvement. The second part comments on the political and economic situation in Grenada after the intervention. The third part, which I hope will be referred to in more detail by some of my Committee colleagues,

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    discusses Grenada's need for assistance from overseas, and in particular from the United Kingdom. Some final comments are added on the security implications of the Grenada crisis and the United Kingdom's further relations with the Commonwealth Caribbean.
    I turn first, and briefly, to our assessment of the intervention and of Britain's so-called failure to take part. Our account of these events makes several points absolutely clear. First, for reasons of their own, the United States Government did not want the United Kingdom to be involved in the military intervention on 25 October.
    Secondly, as the Committee puts it in paragraph 39 of the report,
    "the timing, nature and extent of the information provided to the United Kingdom Government by the United States Government were consistent with that position."
    Those were carefully chosen words, but the point was made to us more bluntly by one prominent American, who said, "If we had consulted the United Kingdom, you would have tried to persuade us not to go in." Indeed, as the Foreign Secretary told us in evidence at question 11 in the report, not only the United Kingdom Government but the United States State Department was not in full possession of the facts. Our investigations in the Caribbean pointed strongly to the conclusion that this was deliberate, not accidental.
    In addition, the information reaching the British Government from the Caribbean was confused and ultimately misleading. Whether this was deliberate or not is less easy to say. Certainly the decision of CARICOM on Sunday 23 October to go for economic and other sanctions rather than military action—and the deputy high commissioner's famous walk on the same day in the garden with the Governor-General, who did not ask for any help, together with the failure of the Organisation of East Caribbean States to deliver its promised written request for assistance — seems to have dissuaded the British Government from believing that a military operation was imminent, and therefore the need for urgent action to discourage such an operation, if that was their intention, was less obvious.
    At the time of the publication of our report, the press made much of a phrase in that report implying, as it was interpreted, criticism of the Foreign Secretary for "a somwhat lethargic approach" in relying solely on what was described as "normal diplomatic channels". On reflection, I think that they were unfortunate words, and I regret that most press reports used them out of context. I have known and admired my right hon. and learned Friend for many more years than he has been in the House, and he would be the last person whom I would accuse of lethargy. The phrase, in its context, was not a personal criticism of my right hon. and learned Friend, but a reflection of the Committee's genuine concern that insufficient appreciation was being given to the development of the crisis in Grenada by Ministers and officials.
    In their reply to our report, the Government have sought to refute this charge by detailing the large number of communications between London and the Caribbean and Washington during the critical period, and the number of telegrams copied to Ministers, including my right hon. Friend the Prime Minister, during the weekend. But, with respect, the reply is not overwhelmingly convincing. It seems evident that operations consisted largely of the FCO
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    duty officer, out of normal hours, passing telegrams on to others as part of the normal out-of-hours routine. Our concern is that, even if the signals from Washington and the Caribbean were misleading, there should, by the weekend of 22 and 23 October, have been sufficient awareness of the political temperature in the Caribbean to justify greater alertness, if not alarm, in Whitehall.
    When all has been said, and the events of October raked over, what were the consequences of Britain's non-involvement in the military intervention?
    Mr. Ivan Lawrence: Before my hon. and learned Friend leaves that important point. Is it not a fact that a large amount of the criticism that was levied against the Government was due to a misunderstanding about the role of the Governor-General in relation to the United Kingdom? Is not the Committee correct, in paragraph 38 of the report, in drawing particular attention to this problem, and in saying that there is no question of the Governor-General being in any special relationship with or under any duty to inform the British Government of events in Grenada? His obligation was only to Her Majesty the Queen and to the Government of Grenada. When that fact is known, does not much of the criticism made at the time about the Government's turpitude and ineptitude fall away, and does that not justify what my hon. and learned Friend has been saying in denial of the criticisms levelled at the Government?
    Mr. Thomas: I am obliged to my hon. and learned Friend for that helpful intervention. As he will recollect, when I referred to the fact that Grenada retained a Governor-General, I said emphatically that he had no responsibility for, and was totally independent of, Her Majesty's Government here in London. I am sure that the House will find the intervention of my hon. and learned Friend helpful.
    What were the consequences of Britain's non-involvement in the military intervention? First, a slight strain on United States-United Kingdom relations certainly occurred, but the United States Government appear to have come as close to making a direct apology to the United Kingdom Government as could be expected. Secondly, despite the public utterances of some Caribbean politicians, no great or lasting damage appears to have been done to the United Kingdom's relations with the Caribbean.
    Speaking personally, I am not among those who believe that United Kingdom involvement in the operation would have been beneficial. My impression on leaving the Caribbean was that the allegations that Britain had failed its friends were much more convenient public rhetoric than genuinely held sentiment.
    The Caribbean and the wider Commonwealth were deeply divided over the issue, as was made abundantly clear at the Delhi summit. It is really only by not being directly involved that the British Government have been able to help in the process of healing the wounds. Moreover, as our report makes clear, the promptness of the British Government's subsequent offers of aid to Grenada has done much to dispel fears of a lack of British concern for the problems of the country and the region.
    The problems of Grenada are undoubtedly immense. Its agriculture and infrastructure need urgent support and repair. Its civil service has been gravely weakened by the revolution and its dramatic end. Its political community is

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    disorganised and vulnerable to the attractive power of individuals whose democratic credentials must be regarded as questionable.
    We are told that the preparation of a new electoral roll is complete. However, despite the drawbacks of the unelected interim Administration, I hope that undue pressure will not be brought to bear by other countries to force the holding of elections too quickly, before the political parties have revived sufficiently to be able to fight on fair and equal terms.
    Our report made a number of specific suggestions about the areas in which British aid to Grenada could be most usefully concentrated. The Government, in their reply, say that while they are willing to consider any requests for assistance,
    "The initiative should, however, properly come from Grenada: the Government do not believe that it would be right for Britain to press unsolicited advice or help on an independent sovereign state within the Commonwealth."
    That is undoubtedly a proper and desirable approach, and not one to be lightly abandoned. However, it was clear during our visit to Grenada that the interim Advisory Council's resources of skill and time are so stretched that its ability to meet the ODA's normal requirements of project analysis and detailed specification may be severely circumscribed.
    We should welcome an assurance from my hon. Friend the Under-Secretary of State for Foreign and Commonwealth Affairs, who is to reply, that, while not pressing unsolicited aid on the Grenadian Administration, the ODA and the High Commission are doing everything possible to ensure that help is provided in the formulation of requests for aid, as well as in the provision of aid that has been specifically requested.
    One possibly serious and long-term consequence of the Grenada crisis could be that some, if not all, Caribbean Commonwealth countries may be further persuaded that their interests, particularly their security interests, lie wholly in the fostering of relations with the United States, because they believe that the United Kingdom is turning its back on them. Certainly, if one were to regard as typical the recent statements of Prime Minister Eugenia Charles of Dominica, that process seems well advanced.
    Relations between the Caribbean and the United States are bound to become closer, and Britain's ability to react swiftly to assist in the maintenance of the security of the region is bound to be circumscribed by cost and distance.
    However, what I found most striking during our visit to the Caribbean was the strong desire for the region's economic, social and cultural links with the United Kingdom to be maintained and strengthened. If there is a feeling that Britain has turned its back on the Caribbean, it is a feeling of regret rather than anger. I do not believe that the Government's policies are moving in that direction, and I accept what the Government have said about the volume and quality of British aid.
    I particularly welcome the Government's firm commitment, in paragraph 33 of their reply, that they attach importance to the region, and I am pleased that they are
    "currently reviewing the effectiveness of their activities in the light of British interests in the area and will take full account of the Committee's conclusions as part of this process."
    It is important that the Government should recognise the strength of pro-British sentiment in the region and regard as a priority the need to strengthen the dialogue with
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    the Governments of the region, as equals. However, as the Committee's report says, all improved dialogue must be a two-way process which
    "will not be assisted by a failure on the part of Caribbean politicians to appreciate the difficulties which confronted the United Kingdom Government last October or by public denunciations of the United Kingdom for the particular stance it adopted in respect of the Grenada crisis."
    I agree with the part of the Foreign Secretary's reply that says that what is important now is to look to the future on Grenada, rather than to rake over the past. He is right to say that Britain's links with the Commonwealth Caribbean are deeply rooted in history and span a wide range of political, social, commercial, sporting and cultural activities and interests. It is a unique relationship, and it is in the interests of the Caribbean, of the United States and of Britain that our concern for, and involvement in, the welfare and security of the area should never wane.
    5.45 pm
    Mr. Stuart Holland: I intervene now, though this is essentially a Back Benchers' debate. The report illustrates the importance of a Committee system in which serious consideration can be given to issues of great importance to this and other countries.
    I pay tribute to the work done by members of the Select Committee in preparing the report. They will make a major contribution to the debate. However, I am sure that the House also will wish to remember the key contribution made to the understanding of the Caribbean and the issues involved by my good friend loan Evans, the former hon. Member for Cynon Valley, now tragically deceased.
    What was the background to the invasion of Grenada and what inadequacies were involved? The Committee's report sought to unravel the true story of the events leading up to the invasion. Some Caribbean leaders have alleged that Britain was invited to participate in the invasion and that the invitation took the form of an oral request. The Foreign Office maintains that it was not kept fully informed of developments and did not have a chance to make a serious response to the request, which it expected to receive in writing before the invasion took place.
    The conclusion has to be drawn that Britain was not kept abreast of how advanced the invasion plans were, and officials in London were not fully briefed by their Washington counterparts.
    Ironically, it appears that when the Foreign Office first heard that the use of force was being mooted by certain figures in the Organisation of Eastern Caribbean States, the Foreign Secretary contacted the Reagan Administration
    "to warn them of these ideas."
    In subsequent transatlantic exchanges, the Foreign and Commonwealth Office was assured that further consultations would precede any action or change of view. Such consultation did not take place. The Foreign Office also maintains that Sir Paul Scoon did not invite Britain to rescue Grenada—a crucial point in our deliberations.
    However, the Prime Minister of Barbados insisted that, through emissaries, he received a clear call for help from Sir Paul Scoon. This is a crucial matter, because much of the justification for the invasion turns on whether the Governor-General requested armed support. Regrettably, despite the work of the Committee, the matter remains "shrouded in mystery". Rarely in diplomatic history can

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    such simple signals have been so stunningly misrepresented, both within the Caribbean and between this country, the Caribbean and the United States.
    The section in the report on the economy and aid is significant because it spells out that the Foreign Office took the view that the completion of the Point Salines airport represented an
    "essential precondition for the expansion of the tourist industry."
    Even the Reagan Administration had a change of heart about the airport. They used to regard it as a possible threat to United States security, but, in the words of Mr. George Shultz:
    "now the regime is different."
    Therefore, the threat has been removed.
    The need for an urgent transfusion of aid into the island is stressed on all sides. The United States intends to provide a total of $18 million by the end of this year, though it has been less than generous in meeting compensation claims arising from the hostilities.
    British aid has been renewed, initially to the tune of £750,000. It is interesting to examine the composition of that sum. As some of us stressed in November, about £300,000 of that £750,000 has been for capital projects and current expenditure concerning the police and policing rather than for development.
    If we examine the background to the invasion and the aid contribution at that time, we find a staggering imbalance between the recipient countries in the region. The figures for 1982 of the total aid allocated show that the Turks and Caicos Islands received more than £5 million in aid, with a per capita contribution of £788. Jamaica also received more than £5 million but, with a larger population it had a lower per capita contribution of £2·40. Grenada, with a population of 110,000, had a per capita contribution of only 71p. I appreciate that the figures can be influenced by particular events concerning mediterranean clubs on certain islands, but it is clear that Grenada has had significantly less assistance from the Government than have other countries. Indeed, British aid to Dominica was more than £23 per head, and to Anguilla £160 per head.
    The lamentations of some hon. Members that the previous Bishop regime was aligned with other powers and super-powers in its aid programme is little less than two-faced given the unreadiness of our Government to give aid for specific projects—including the airport project. An application was made to the Government and turned down.
    It also is unrealistic of the Government to say that they cannot substantially increase aid within the Caribbean, as well as for Grenada, in the coming years. In a parliamentary reply to me last month, the Minister for Overseas Development made it plain that official development assistance as a proportion of gross national product is now 0·35 per cent. —precisely half of the well-established and recommended target of the United Nations and the Brandt commission. Rather than the aid level bottoming out as the Minister claims, we are moving further and further away from the possibility of the 0·72 per cent. target, dropping from 0·44 per cent. in 1981, to 0·37 per cent. in 1982, to the present figure of 0·35 per cent.
    If the Government recognise that they have responsibility in that region, and do not want to leave matters entirely to the United States, they must come
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    forward with significant development proposals that go beyond anything that the House has heard to date. They should be aimed not only at infrastructure. Although infrastructure is a necessary condition for development, it is not a sufficient condition. We recognise that in such matters as water supply, power generation and other basic provisions, the island desperately needs infrastructure. But if we cannot go beyond that, Grenada will continue to be essentially dependent for its development prospects on tourism. Despite the airport, tourism is not enough.
    I quote not from any centre of radical research, but from Latin American and Caribbean, which states about tourism:
    "There is a dilemma, however, facing those islands which have concentrated on the luxury market. Such installations give little possibility for any equitable distribution of benefits, consume few local products, are capital and import-intensive and otherwise form isolated ghettoes away from population centres. There is no doubt that this market is a very durable and growing one and therefore profitable. But it is also very fickle and can bring problems of its own."
    The complementary framework within which it is feasible that development could be promoted in the Caribbean is the CARICOM framework. But CARICOM itself has been fundamentally hindered rather than helped in its work and its potential because of the invasion. A report by Canute James in the Financial Times of 4 July, stated:
    "Planned as a framework for the integration of the region's small and weak economies, based on free trade between the Caribbean Economic Community … has foundered on policies implemented by individual Governments … the region will inevitably be conditioned by one political factor which will not be on their agenda—"
    but will not go away—
    "the fallout from last October's U.S. invasion of Grenada."
    The real difficulty is the long-term financing of development and trade. The right hon. and learned Member for Hendon, South (Mr. Thomas) was sanguine about the prospects resulting from Government policies. In a more recent report on 9 July, on the recent CARICOM discussions, it emerges not only that the individual countries cannot cope in their development agendas, but that that they also must run to the IMF. The community has agreed in principle to proposals from the Caribbean Development Bank for the "structural adjustment" of their economies.
    The formula in such a package implies not only a greater role for the private sector—to which the IMF, the Reagan Administration and this Government are committed—but changes in exchange rates, which is a euphemism for devaluation, moves to reduce import bills and to cut domestic consumption, and an increasing focus on exports.
    That, in practice, means the old IMF formula for domestic deflation and for cuts in social and welfare expenditure in islands with a low per capita income, which desperately need such expenditure if there is to be any increase in the welfare on which political stability over the medium term relies. It is a monetarist solution that will not bring welfare to the region. That solution should be opposed by the Government if they have the long-term development interests of the region at heart. It is an unpromising prospect in both the short and long term.
    Two main themes emerged from the invasion. The North-South development issues have been overwhelmed in the Caribbean, and in Central America, by the concern of the United States Administration with East-West global

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    super-power relations. If the United Kingdom Government are serious about their commitment not only to Grenada but to the Caribbean—indeed if they wish to continue to play a role in the Caribbean — they must show the House and member Commonwealth countries in the Caribbean area that they have not handed over their influence to the United States. They must show that they have not handed over their basic responsibilities either for the economy or for defence in the region. If they cannot do that, they will follow their remarkable dereliction of duty about the invasion with a failure to achieve the comprehensive, balanced development plan for the region as a whole that is so desperately needed.
    5.59 pm
    Mr. Bowen Wells: I rise to make my contribution more in sorrow than in anger and with the hope that we can do more to help and support positively the security of Grenada and other small dependent states by our debate today, and by the conclusions brought to the attention of the House by the Select Committee report and the Government's reply.
    I begin by sketching a little background to the current position, in addition to that already given by my right hon. and learned Friend the Member for Hendon, South (Mr. Thomas). I take the House futher back in this saga, to the period when associated statehood was established for the six island territories in the eastern Caribbean, in the Windward and Leeward Islands. Fundamentally, those associated states were set up in answer to a call for decolonisation by the United Nations and the world community at large, with pressure on the British Government by the Committee of 24 and public opinion throughout the world to bring their existing colonies to independence.
    The solution arrived at—after the failure of the West Indies federation, of the proposal to set up a smaller federation, called "The Little Eight," based on Barbados, and an attempt to join Grenada with the state of Trinidad and Tobago in a unitary state — by the British Government was associated statehood. We reached that solution in consultation with the countries of the Caribbean.
    Associated statehood could be ended in two ways. First, it could be ended by the state itself asking the British Government to give it independence. Secondly, it could be ended if it secured a Bill through its legislature by a two-thirds majority and obtained, by a referendum of the country at large, a two-thirds majority in favour. The state could then proceed to independence without further British Government interference. That was the agreement and that secured the approval of the Committee of 24 to that form of substantive decolonisation.
    Special considerations were taken into account. These islands are small and vulnerable and they are often monocultures—not Grenada, but all the other islands—and they are dependent not only on the fickleness of the tourist trade but also on the weather in the West Indies, which has a great effect on their agriculture. They are also affected by the long distances to their markets, which lie many thousands of miles away by sea.
    They had two peculiar problems which associated statehood tried to redress. One was to secure their external defence, giving them security from interference from outside bodies of whatever kind. The second was to secure
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    political stability within those small island states, so enabling their people to develop their economies in peace to the best of their ability.
    The United Kingdom undertook, responsibly, to provide defence for the islands under the associated statehood agreement, and that provided a degree of political stability in the islands. However, the Britsh Government then connived — I cannot use any other word — with other independent Governments of those states to come to a mutual agreement to end associated statehood.
    The British Government must bear some responsibility for bringing about that mutual agreement, for we must consider the result of operating the second option under the West Indies Act 1967. By that option, the British Government could give six months notice of their desire to end their association with any of the states.
    It was not envisaged at the time of the passage of that Act that Her Majesty's Government would undertake that step lightly or irresponsibly. It was envisaged, however, that circumstances could arise—perhaps resulting from the domestic political scene in the islands or from actions which they might take overseas—which would make it impossible for the British Government to continue to operate within the agreement.
    In the event, the British Government reached an agreement in the first place with the Grenada Government, who were led by a premier, Mr. Eric Gairy, who was well known to the British Government as having conducted his Government in what I can only describe, and what has been described elsewhere, as a corrupt manner. The British Government told Mr. Gairy that if he held an election in which the issue of independence was put to the electorate, the British Government would agree to give notice of the ending of associated statehood by giving six months' notice of Britain's intent to end it, thereby eliminating the checks and balances built into the 1967 Act. That measure required the people to be consulted and to be told, through the political process, of the implications of independence.
    That, therefore, undermined the whole principle of a democratic state. The idea was that the people should understand what was being done and should be in a position to vote in accordance with the ideas being put to them. The peoples of the associated states have never had the opportunity to decide how they should be governed, under what constitution they should be governed, the way in which their relationships with their neighbours should be conducted and the relationship they would like to have with the much larger states with which they trade and on which, to some degree, they are dependent.
    By short-circuiting the political process in that way, the British Government abdicated their responsibility for the Leeward and Windward Islands. The Government can say what they like about their legal right to operate the West Indies Act 1967 in the way in which it was operated, but what would have been the position if their actions had been put to a court of law? Consider, for example, what happened in the Supreme Court in Canada when the then Prime Minister intended to apply to this House to change the constitution of Canada without the support of eight out of 10 of the provinces. The Supreme Court of Canada ruled that that, under British constitutional practice, was unconstitutional.
    In my view, the mutual agreement was arrived at by connivance with Governments some of whom were elected

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    fraudulently, and in the case of Grenada there is great doubt about the legality of the 1972 election, which led to independence. All of that provided the means by which the islands became independent unconstitutionally and without the people concerned being consulted. That laid the seed bed for revolution and tyranny and for invitations to evil-minded people to undermine the security and stability of the islands.
    We in this House cannot evade some responsibility for what occurred. Grenada is the most recent and dramatic example of what occurred, and as my right hon. and learned Friend the Member for Hendon, South (Mr. Thomas) went into what happened, I shall not go over that ground.
    However, we must consider the stability of the other islands. Dominica followed into independence. There were two attempts there at overturning the Government by outside sources, one launched from a neighbouring island and the other from the mainland of the United States. British civil servants, trained in the Colonial Service, operating, as they had been trained, within the British political system, were given responsibility for the conduct of affairs in Dominica, the only island in which the then Governor-General was given responsibility for conducting, through an electoral commission, the electoral process. That was achieved in the teeth of opposition from the legal adviser to the Foreign and Commonwealth Office — who took a rather ignominious part in the recent Grenada affair. As the electoral process was isolated, Mrs. Eugenia Charles was able to come to power in Dominica through a properly conducted election. That saved Dominica from revolutionary tyranny which would have ground the faces of its people into the earth.
    I could cite other examples in the West Indies. Many of the islands are in grave danger of suffering what has happened in Grenada. The vacuum created by the abdication of Britain, the lack of ability to defend themselves and the political instability that arose as a consequence attracted others. Cuba and Russia filled the vacuum in Grenada. Grenada took a revoluntary Government who were never elected. They never submitted themselves to the electorate. Mr. Maurice Bishop was an extremely personable, kind and generous man, despite his political beliefs with which I disagreed fundamentally. He made a grave mistake in not holding an election soon after he came to power. In my view he would be in power now and ruling a much happier island than Grenada was under the people's revolutionary Government if he had taken that course. Unfortunately his Government were led and bullied by Cuba and Russia, which both had enormous embassies on the island although they had never had a presence there previously. The Cubans had an embassy staff of about 38 on the tiny island of Grenada and the Russian embassy and staff were slightly larger.
    There was no doubt about the intention of the Russians and Cubans on Grenada. They were there to disrupt and threaten the stability of Grenada and that of its neighbours. There were rubber boats among the supplies that were found on Grenada during the American intervention. They would have been ideally suited for taking small and heavily armed groups to neighbouring islands to take over their Governments. It would not take much to do that because the islands are virtually defenceless as we have
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    left them. The disruption that would have been caused would have seriously undermined the security of the United States because 40 per cent. of its oil supplies pass through Caribbean waters. In addition, the islands provide an obvious political springboard.
    The United States was naturally concerned about its internal security, and it became increasingly worried at events occurring in the West Indies.
    It is all very well for Ministers to excuse themselves before the Select Committee on Foreign Affairs by saying that they could not have been expected to foresee the events of 25 October. My right hon. and learned Friend the Foreign Secretary made a statement on 24 October 1983 and answered the questions of several right hon. and hon. Members on both sides of the House. The final part of the question of the right hon. Member for Leeds, East was as follows:
    "Can the Foreign Secretary assure us that there is no question of American military intervention on the island? It could only make the position worse."
    My right hon. and learned Friend replied:
    "I know of no such contention." —[Official Report, 24 October 1983; Vol. 47, c. 27.]
    My right hon. and learned Friend made his statement at 4 pm and he must have answered the right hon. Member for Leeds, East at about five minutes past four o'clock. As my right hon. and learned Friend the Member for Hendon, South said, that answer led to grave misgivings about the way in which the information, whether it was gathered in the first place—which we assured ourselves it was—and whether it was transmitted—we assured ourselves it was—had been presented. It seems that the problem arose in the Foreign Office and in its assessment by Ministers. There can be no evasion and Ministers have not tried to introduce it.
    The Foreign Secretary was put into bat in the House at four o'clock when American bombers and helicopters were landing on the airstrip at Grantley Adams airport, Barbados. Indeed, they had been doing so for the previous four hours. Against that background some humility should have appeared in the Minister's answers when questioned by members of the Select Committee on Foreign Affairs. However, I can find no vestige of humility in the report of the Committee's proceedings for having put the Foreign Secretary in that position and there is nothing to highlight the degree to which he was in touch with the United States and understood what was happening in the Caribbean during the debates that took place on the following day and subsequently. Anyone who was really listening, who was alert and capable of understanding, could have had no doubt that military intervention was intended.
    Intervention was invited and begged for by the Organisation of East Caribbean States. It was asked for by the other islands that were most vulnerable to the Cuban, Russian and Grenadian menace in their midst. Jamaica had been subjected to Cuban intervention and had been rescued by Prime Minister Seaga not more than three years ago. The surrounding islands were frightened for their own security and they needed help. They turned to Britain and to the United States. They could not intervene in Grenada by force in the light of the reported stocks of arms and ammunition available to the Grenadian Government. They had to get outside help, and that was appreciated by the British Government.
    The Government said that they were against military intervention. What were the British Government in favour

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    of doing? That has never been spelt out. They have never explained the exact nature of their misgivings and how they tried to present them to the Prime Ministers of the other five small states plus the Governments of Barbados and Jamaica. In fact, those Prime Ministers and Governments were all in favour of intervention.
    In what company did the Government find themselves when they decided that they would not join the intervention and would not go to the rescue of the people of Grenada? The proof of the pudding is in the eating because the intervention was welcomed by over 90 per cent. of the people of Grenada. It was applauded by all the people of Barbados and Jamaica.
    I would say that it was similarly applauded by Trinidad and Tobago, although that Government had misgivings which they have elucidated to us. They did not wish military intervention to take place at that stage, but even they were conscious of the threat and understood that all parts of the Caribbean must join in a combined effort to change the balance in a neighbouring sister island. There was a situation that could not be tolerated within what they regarded as the bounds of human relationships, deep trading concerns and the security of the islands. They bound themselves together to intervene in Grenada to save their brothers and sisters from the tyranny that had overtaken them following the assassination of Maurice Bishop. The fear gripped tighter and with greater intensity following his assassination and that of his Ministers. There was no federal constitution which bound the islands together, but they chose to be so in the name of human relationships. Unfortunately the British Government did not make themselves clear, and even now they have not said what they would have done or what they should have done.
    The Government should have been more active in trying to find ways of providing support and assistance and involving themselves in discussions in an effort to arrive at the right solution. There might not have been intervention if the Government had played a part, but they chose not to do so. They exchanged messages and the high commissioners listened and reported, but with what response did they meet? We know only that the Government had misgivings. I submit that this is an insufficient response to a friendly neighbouring island which has depended on Britain for 400 years, as has the whole archipelago.
    Britain has benefited enormously from that relationship. We find invariably that the money that built the great houses of the 18th century in this country came from the jewels in the crown of the British king at that time, the West Indian islands. We owe them and they owe us and we must live in friendship. I hope that that lesson has been driven home and that we shall not abdicate our responsibility further. There is much in the reply to the Select Committee's report to suggest that the lesson has been learnt.
    I shall hurry, because other hon. Members wish to speak. I shall make some points about aid administration. In trying to give development assistance to islands whose Ministries are low in managerial and administrative talent, one must go much further than simply sitting back on one's seat in Barbados, 120 or 140 miles away, in a development division, saying, "We shall await an application from the Government of Grenada or its electricity services which we can say is in the correct ODA form, to be digested by the ODA machine, to go through the full panoply of
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    tendering, and so on." Anyone with experience in this matter realises that tendering must be done in a co-operative spirit with the hard-pressed administrative officials, whose workload its usually too heavy because there are few people in those Governments with the talent necessary to undertake the administration. Those co-operative arrangements might mean that an ODA official goes down to the office and writes up the form. What is wrong with that? Is that neo-colonialism, or is it an attempt to assist?
    In one case, a spare parts list was needed for a generator in Grenada that had gone bust. The list was urgently needed for the electricity services power station to ensure that electric power and light was available. Those facilities were crucial in an island that was fundamentally insecure. I said that, instead of waiting for that list, it would have been a good idea for the aid director to secure the spare parts list and write it out. His office had an engineer in the development division who could have provided the advice, or someone could have gone to the manufacturers in Peterborough, Rushton and Hornsby to ask for a spare parts list. That list could have been tacked on to the form required by ODA and the project could have got under way. That plan was described to me as neo-colonialism, and my submission that the ODA might like to help Grenada during its difficult circumstances after the revolution was dismissed.
    The aid administration cannot possibly get away with such actions. I know that it has helped and that its officials have gone to Grenada on many missions. In many respects, they have done a good job, but the process is slow and tedious. We supply a great deal of aid to the Commonwealth Caribbean countries, but we are not recognised as being especially helpful. We are not believed to be particularly supportive of those Governments, because the procedure is so tied with red tape they cannot obtain the necessary money and do what they want with it.
    Let us take the example of St. Vincent, to which we gave a £10 million independence gift—half in loan and half in grant. They have used up the grants, but want £5 million in loans to extend the Amos Vale airport on St. Vincent, thereby providing the basis for the increased tourism and small industrialisation that would enable them to trade generally and revive their economy, which is in serious trouble because of the failure of the arrowroot market.
    Recently, the ODA told me that St. Vincent can have £5 million on agreed projects over an extended period. That money will be given lump by lump, as it fits into the ODA' s budgetary regime. Is that calculated to enthuse the Prime Minister and Deputy Prime Minister of St. Vincent with the generosity of the aid given by the British development division? I submit that it will do the reverse and make them angry. That is part of the explanation why the Caribbean Governments believe we have turned our backs on them, do not care arid do not want to help them. The problem is easily rectified, and I am glad that the Government have accepted our recommendation, in spite of rejecting it in the first part of one sentence. At the end of the sentence, the Government say that they will put the high commissioner in charge of the political aspects, and. therefore, the hastening aspects and political implications of our aid programme in that region. I welcome that change.

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    I have a few other examples, but I shall not go on at great length. Grenada's economy needs our support in many serious ways, including the provision of infrastructure and education. It is important to provide assistance with education, because its structure has, sadly, been undermined by the revolution.
    Support is needed in the provision of power supplies and water. All the pipes used are made in Britain. The pipes used in Grenada have the same type of thread as British pipes, so they cannot be replaced by types from other countries. If we are to be supportive, we must supply those pipes to Grenada. We found on visiting Grenada that the roads could not be surfaced as the Americans wanted, because the British development division had not thought it appropriate to approve the provision of pipes unless it was part of a larger water supply project. A change in that provision has been achieved.
    Unemployment is a major problem in Grenada. I am glad that the Americans have temporarily met that problem by agreeing to complete the much maligned airport which was to be built for military purposes. Of course, that airport can be used for military purposes — it was beautifully used for those purposes by the Americans when they intervened; so that use has been proven. The basic purpose of that airport is to promote tourism. In 1961, I undertook to do an economic feasibility study of that airport. The conclusion was that the Grenada tourist industry could not expand without an airport in that position. The trouble was that it was not economically viable. I am glad that, following the intervention, Grenada will get such an airport.
    Mr. Jeremy Corbyn: It was there before.
    Mr. Wells: There was no airport at Point Salines. The airport we are discussing was only partly completed and was of sufficient length to enable the intervention to take place. The airport was not there until Maurice Bishop took steps to have it built by the Cubans. That airport will now be finished. There will be a new road to St. George's. The Plessey contract has been reinstated, so the British will play their part in the project. The road will be completed on 25 October. I welcome that development.
    We must ensure that the tourist infrastructure of hotels follows the airport project. In addition, some of the foods eaten in those hotels must be provided. That includes vegetables—Grenada is good at vegetable production, because it is a fertile land—and fish, which can be produced in the fishponds and caught at sea. We must ensure that there is sufficient power and water to supply those hotels.
    The future of Grenada and the other islands in the area will be much brighter if we learn lessons from the intervention. We must somehow find our way back to helping those people to provide — this must be done through them—the constitutional changes necessary to produce political stability. That means checks and balances and security. I beg the Government to emphasise those two aspects and to produce them positively—not to sit back and say, "We are listening to you, but you are independent and we must not interfere." We should say, "How can we help? Let us discuss the matter and examine the possibilities." We should not, as my right hon. and learned Friend the Member for Hendon, South (Mr.
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    Thomas) said, push Grenada into early elections—that would be disastrous—before the shock of revolution has been overcome and the internal security position has been better divined. We should not return to the same old story with which I began my speech—the instability due to the Government's tyranny, corruption and dissent.
    Let us hope that Grenada can return to greater stability in which the economy is supported positively and constructively by Britain in association with the United States — there is no competition between the two countries—the French, the European Community, the Caribbean Development Bank and its neighbours. Let us hope therefore that, in spite of the difficulties, there is a change of heart in Britain, that we understand the problems and will be seen to be constructively helping the stability and security of Grenada and the Caribbean.
    6.29 pm
    Dame Judith Hart: I shall be as brief as possible as I know that many hon. Members wish to take part in this important debate. I agree with a great deal of what was said by the hon. Member for Hertford and Stortford (Mr. Wells), although I disagree vehemently with some parts of his speech. I should also express my appreciation of the Select Committee report, which I have read extremely carefully.
    I agree with the hon. Gentleman's description of the history of the matter from the West Indies Act onwards. The House may recall that I was the Minister who introduced that legislation incorporating associated statehood and so on. I agree with the hon. Gentleman, too, that it was a disastrous mistake to push the associated states into independence without the security involved in associated statehood. The vacuum thus caused has been a source of problems ever since.
    I wish to deal with a matter of which I have great personal knowledge but of which there is little awareness in this country. I refer to British support in 1978–79 for the Commonwealth Caribbean, including the Windward Islands and the eastern Caribbean states as well as Jamaica and other countries then in great need. It should be recalled that by 1978 all the Caribbean countries, which were almost although not entirely oil dependent, had taken a tremendous knock due to the increase in oil prices and an equally great knock due to the fall in commodity prices for their crops—bauxite and sugar in Jamaica, and sugar in several other states—as well as the escalating cost of manufactures imports essential for development. In view of that tremendous economic knock, it was clear that any responsible Government concerned about the Commonwealth Caribbean should make every effort to assist.
    In 1978, President Carter had taken a new interest in both Latin American and Caribbean development problems. He had made some visits and Rosalind Carter had made others. To put it in a nutshell, there was an American initiative to ask the World Bank to set up a Caribbean economic conference in Washington. The conference duly took place. By then, however, this was partly due to British enthusiasm for it as President Carter and the State Department had changed tack and lost interest. The conference took place with the participation of the World Bank and all the aid donors, including the United Kingdom, France, Germany, Japan, the Netherlands, the EEC and Venezuela which, interestingly,

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    seemed to be responsible for OPEC aid in that part of the world at a time when OPEC aid generally was very substantial.
    The conference was attended in some cases by the Prime Ministers and in other cases by the Finance Ministers of all the Caribbean states, and, despite the lack of commitment or enthusiasm by the United States, a commitment was secured before the end of 1978 to try to raise about £150 million from among all the donor countries. In the six months from the end of 1978 the British contribution amounted to about £40 million, a large chunk of which went to Jamaica which was then in deep economic difficulties. At constant prices, that would now be about £72 million, which gives the House an idea of the significance and substance of what we were trying to do. After the conference, it was agreed that working groups of donors and recipients would deal with specific projects and countries. For example, Venuzuela and the United Kingdom were extremely interested in putting together an assistance package for commodity transport in the eastern Caribbean.
    I say all this because I believe that a political ethos was involved. Given their situation, the Caribbean states were bound to look somewhere for friendship, support and allies. Were they to look entirely towards Cuba or their nearest neighbour, the United States, or could they look to the countries of central America and the northern part of Latin America, such as Venezuela and Mexico, thus making the Caribbean basin a meaningful political concept while still maintaining a relationship with the Commonwealth? That was the theoretical motivation for my own enthusiasm for that Caribbean economic initiative.
    Following the general election in 1979, however, the whole concept dropped into the deep waters of the Caribbean and no more was heard of it. In the meantime, there had been the revolution in Grenada. Here I should put the record straight. It is often suggested that Britain cut off aid to Grenada after the revolution which brought Bishop to power. That is not so. I cannot vouch for what happened after the general election, but until then we continued our normal aid relationship with Grenada.
    After 1979, it became clear that there were problems in the relationship between Britain and Grenada. My hon. Friend the Member for Vauxhall (Mr. Holland) has given the exact figures for aid to Grenada in recent years compared with our aid to other Caribbean states. In this context, one must make a fundamental criticism of the Government. It is always a great mistake to abandon a small, non-viable state which has hitherto enjoyed economic assistance and protection from Britain because it is hound to look somewhere else for help. In the circumstances, Grenada could look only to Cuba and later, in my view unwisely, towards the Soviet Union. Apart from the military implications, I believe that the Cubans have a certain understanding of the economic development of that part of the world. The Government made a very great mistake — I believe that the Select Committee report sustains this thesis—when they abandoned their Commonwealth responsibilities in the Caribbean. I am sure that that was done in deference and acquiescence to President Reagan's strategic plan for hegemony in the Caribbean and central America as there is no other logic in it.
    That was followed by the developments leading up to the terrible events of 18 and 19 October in Grenada. I was
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    there briefly in March and I can vouch for the disastrous consequences. I have copies of the committee minutes of the administration from August to October, showing the discord between the Coard faction and the Bishop faction and all the other factors that led up to those events. I can also confirm that the people of Grenada were so disastrously affected by those events that they welcomed the American invasion. I think that they would have welcomed someone else a great deal more, but there is no doubt that they welcomed any rescue from the situation.
    The people of Grenada suffered a long trauma as a result. In March, they were already impatient of the occupation by American and Jamaican troops. I think that they minded the Jamaicans more than the Americans. They also minded that they had not been able to mourn their dead. I know of one woman who lost her two schoolboy sons in the square on 19 October. She never knew exactly what happened to them. She knew only that they were dead and had never been able to have a funeral for them. There had been no mourning for the people who had been lost. In a tiny close-knit island of only 110,000 people, that is a terrible thing, and people felt it.
    The people of Grenada felt tremendous anger against the people who were responsible. Some of us have been deeply anxious about the right to fair trials in Grenada. People have been accused, and, even with technical assistance from Britain, it has taken a long time for charges to be levelled against some of those who have been in prison. They may not be guilty, but whoever is guilty bears a terrible burden of responsibility for what happened. It is nevertheless important that there should be free and fair trials, proper defence and no ill treatment of prisoners. I know that there has been some ill treatment. That is infinitely regrettable and should not happen.
    The most important issue is what happens from here on. The hon. Member for Hertford and Stortford and the right hon. and learned Member for Hendon, South (Mr. Thomas) spoke of the development needs of Grenada. I agreed with much of what the hon. Member for Hertford and Stortford said about greater flexibility and assisting them to ask for aid. However, Britain's political role in the Commonwealth Caribbean must be examined in much greater depth than the Government's reply to the Select Committee report implies that it has received. Either we are abandoning the Caribbean, to the Americans or we are retaining our Commonwealth involvement with it. That is a clear choice and there is no evading it. That does not mean that we must be the enemies of the Americans in the region or that we cannot co-operate with them.
    Are we merely saying that we have no further interest or responsibility for Commonwealth Caribbean countries? I think that that is what we are doing because the Government, the Foreign Secretary and the Prime Minister are rolling over themselves to support anything that President Reagan takes it into his mind to do in that regard. It is essential that hon. Members should debate this issue in a far better attended House. It should be regarded as a supreme issue of foreign policy because of the historical and pragmatic reasons and because the Commonwealth Caribbean has been deeply and gravely split by what happened in Grenada.
    I came back from a conference in Colombia through Trinidad, Grenada and Barbados. The repercussions of Grenada, the machinations during the weekend between Caribbean countries, the little deceits, the not tellings and the lack of honesty have deeply divided the Caribbean.

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    After the CARECOM conference that ended a couple of days ago, the Trinidad Guardian said that it was clear that the wounds had not yet healed. The parties to that conference got on all right, but only just. I could quote what has been said, even by people such as Seaga, with whom I have deep differences of opinion. What happened in Grenada was considerably the result of the closeness between Seaga and Washington. that led to the staging of the American intervention.
    Nevertheless, there seems to be universal agreement among Commonwealth Caribbean countries that they need a stable world economy, development assistance so that their people can prosper and, above all, the assurance of freedom from the exercise of power politics by the United States and the Soviet Union. The only way in which they can be given that freedom is by Britain again exerting its Commonwealth role with the assistance of all members of the Commonwealth. We should say that it is our duty to give them that freedom and make it clear that they need not be dependent on the United States or the Soviet Union and that they can be free to exercise their own choice. That involves the type of security, involvement and assistance that only Britain, with the rest of the Commonwealth, can provide.
    6.46 pm
    Mr. Richard Shepherd: It must be a matter of grave concern to people such as us, who are responsible for having a view on foreign affairs, that the Foreign Office is so denigrated by our fellow citizens. That must be a matter of public concern for foreign policy, and it was never better reflected than in the responses, or lack of them, over the Grenada incident. That week in October was the nadir of the conduct and direction of our foreign policy. It was unsatisfactory because, for one horrible week, which started with the stance of the Foreign Secretary on the Monday, we did not know the Government's position or response, in respect of the events in Grenada. It was by courtesy of the world service and "Weekend World" that we learnt of the British Government's position the following Sunday.
    As the Select Committee report says, the reaction was confused. What worries me is why it was confused. What does that betray in our foreign policy thought processes? The first thing that it illustrates is that there was clearly no thought-through response to a situation such as that arising in Grenada. It betrays a disturbing lack of interest in a region that, like some hon. Members and the right hon. Member for Clydesdale (Dame J. Hart), I believe is of considerable importance to our well-being. It seems incredible that those responsible at the Foreign Office had not thought through a response and had not countenanced the possibility of events in Grenada reaching a point at which other nations in the Caribbean would expect a response. It is extraordinary that a British Foreign Secretary had to wait for nearly a week to announce, on a television programme, our nation's policy.
    The confusion also betrays something about the inadequacies of consultation and of evaluating the advice of our friends. Who are our friends in that region? The Government ought to be fully aware of them. We have representation in Barbados, and we are closely allied to the United States. I am conscious of the way in which the advice of our friends in the Caribbean split. We should
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    examine perhaps the most immediate record of how people feel about an incident—public opinion. Those of us who were in touch with friends and contacts in Trinidad and Tobago were well aware that the majority of people, contrary to the stance of the Government there, supported the invasion of Grenada. There is no question about that, although the Foreign Office response says that it is only too well aware of the divisions in the eastern Caribbean community. I believe that, having identified them, we must listen to the advice of friends. That response showed that the Foreign Office had not thought through who our friends were and what advice we should take.
    Perhaps the most important point concerns our lack of appreciation of who we are and what Britain is. That is a dangerous lack of appreciation.
    I am sorry that the right hon. Member for Clydesdale made a distinction about the Commonwealth, of which I am a great supporter. Last November I asked the Library for a breakdown of citizens in this country who came from those Caribbean islands. In a sense, the figures were fairly startling, inasmuch as the proportion of the populations of those countries living here is considerable.
    Of those born in the Caribbean, excluding their children, who were returned in the 1981 census, 25,000 come from Barbados—7 per cent. to 8 per cent. of the resident Barbadan population. Each of those Barbadans has families and relatives, and their children have grandparents, cousins, and so on. It means that citizens of the United Kingdom have intimate and immediate relations with the citizens of Caribbean countries. Therefore, what happens to those countries is of vital importance to British citizens, who have a right to know that the British Government have a thought-out position on the well-being of those countries.
    Jamaica has 164,000 people recorded as living here, excluding children born here. That is between 8 per cent. and 9 per cent. of the population of Jamaica. Similarly, Trinidad and Tobago has 16,000 people recorded as living here.
    About 300,000 people were confident enough to fill in their census returns stating that they had been born in the Caribbean. We know that that is an understatement, and we also know that that figure does not record the number of their children born here. In fact a significant proportion of the population of the Caribbean live in this country. If we are to maintain our position in the world, we must have regard to who our citizens are and who we are. That is why to me the events in Grenada in that awful week in October were shaming, because the Caribbean had slipped from our consciousness and we had not taken the trouble to think the matter out. There may be many reasons for that. Perhaps the long retreat into Europe has vitiated our view of the world.
    According to the report, our trade with the Caribbean in 1983 amounted to £463 million. Trinidad is our fourth largest trading partner in the western hemisphere. It is probably now the third largest, because Brazil's imports fell dramatically last year. This only reinforces why I am deeply concerned that we did not have a view of who our friends are in the region. We do not have a sufficient view of ourselves or sufficient consultation within our own community. This turning of our back on who we are and where we stand in the world gradually erodes our trading and contact points with these countries, which are vital to the well-being of ourselves, our constituents and most of our fellow citizens.

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    I have already said that this was a shaming experience. Sometimes I almost wish that I could get into the Foreign Office with a broom, because South America and the Caribbean have been unhappy experiences. I recently visitied Brazil and saw how we have retreated into the far distance in the perception of those who run countries elsewhere. That should not have happened in the Caribbean. Indeed, it should not be allowed to happen — and I do not hang on the initiatives of the United States, which I regard as a great friend and ally — because our foreign policy represents what is solely our responsibility to the families and brethren of our own citizens. In this context the response to events in Grenada was shaming for the Foreign Office.
    However, out of this incident I would like to think that we have learnt something. We should have learnt that what we often think of as peripheral problems of that nature are those that sink us and that the Caribbean is central to our interests in the Americas. After all, it is not so many years ago that a former ambassador to the United States, who was Governor of the Bank of England, tried to apply to join the Organisation of American States. That was how important we perceived our presence in the Caribbean.
    We cannot turn our backs on this situation. Increasingly, if we want to pull our own community together, we must have regard to the interests of our own citizens who have a direct and important interest in the Caribbean.
    6.54 pm
    Mr. Paddy Ashdown: This report covers both the invasion of Grenada and the needs and prospects of that country. Although we must do everything we reasonably can to ensure that Grenada becomes a prosperous and democratic member of the Commonwealth, in the main I wish to concentrate on the more global questions which the invasion raises.
    The background to the invasion is well known and has been well articulated by other hon. Members. As other hon. Members have said, there are lessons to be learnt from what happened. First, the British Government should have taken the lead in pressing the Gairy regime to moderate its approach and to respect civil liberties before the coup in 1979. Secondly, we should also have pressed the United States not to cut off aid to Grenada, because by doing so they pushed the New Jewel movement quickly into the hands of the Cubans and the Soviets.
    The central period under consideration is that between 19 and 23 October. This was a crucial time both for United States-United Kingdom relations and for the Foreign Office. On this I am in agreement with the report, which states:
    "The evident lack of consultation between the United States and its allies in the days preceding the intervention in Grenada must, however, be a cause of concern to all members of the North Atlantic Alliance and has inevitably worrying implications for United Kingdom-United States and wider NATO-United States relations on other matters in the future".
    In other words, the report points towards an extension beyond the rather narrow confines of Grenada, important though that is.
    In answer to that statement in the report one might reply, "Indeed it does," because on 12 May 1983 the Prime Minister announced that no nuclear weapon would be fired or launched from British territory without the agreement of the British Prime Minister. Had she been pressed, she would no doubt have made a similar assertion about the
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    possibility of the Government's principal ally invading one of their terroritories without even informing, let alone consulting, either Her Majesty or the Government.
    The Foreign Secretary told the Select Committee, as set out in paragraph 21:
    "the extent of the consultation with us was regrettably less than we would have wished".
    Indeed, were the United States Government to invade every country whose regime does not meet the highest tests of democracy, at this moment the marines would be invading Chile and establishing a bridgehead at Johannesburg rather than training Nicaraguan contras.
    For those who believe in NATO, Grenada clearly shows the need for a strong, balanced alliance with Europe to provide a counterweight for the bellicosity of the present United States Administration. More than 20 years ago President Kennedy set out his vision of the "twin pillars" of NATO, with Europe an equal partner with the United States. So far that vision has proved illusory, and it is the duty of the European leaders to create it. Grenada should force us to recognise that the United States should not be allowed to dictate NATO policy, nor should the wildest flights of this President's imagination be allowed to go unchecked.
    On a more domestic note, Grenada shows the narrow-mindedness of the British Government's refusal to insist on a dual key for cruise. If the events of last October showed nothing else, they showed that one key — an American one—together with some outdated agreements stitched together by Attlee and Truman is one key too few.
    There is no doubt that in invading Grenada the Americans acted illegally. The invasion is in clear violation of the United Nations charter and of articles 18 and 20 of the charter of the Organisation of American States. Equally, there is little doubt that the Americans were less than zealous in keeping Britain informed of their invasion plans, despite Britain's special Commonwealth relationship with Grenada and the supposed special relationship which exists between Britain and the United States.
    The key question which needs to be answered is whether, given this, the Foreign Office did enough to keep abreast of American intentions after 19 October. It appears from the report that the short and brutal answer is, "Definitely not."
    It is not as if the Reagan Administration had not signposted its intentions well in advance. Mr. Reagan was elected President partly on the basis of his robust criticisms of President Carter's policy in Latin America. When elected, he essentially resurrected the Monroe doctrine, intervening in Nicaragua and El Salvador, and making warlike noises about Grenada becoming another Cuba, largely on the basis of the Port Salines airport, which President Reagan had managed to convince himself was part of a plot to turn Grenada into
    "a Soviet-Cuban colony being readied as a major military bastion to export terror and undermine democracy".
    Of course it was nothing of the sort.
    Mr. Bowen Wells: Oh?
    Mr. Ashdown: I draw the hon. Gentleman's attention to the fact that President Reagan considered it a major bastion. The hon. Gentleman quoted some figures which showed that it may have been growing into a bastion, but at all events that process was a t best just beginning. A few rubber boats do not make a major bastion. However, that was President Reagan's view.

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    Plessey had a considerable stake in the original construction of the airport, and testified that it lacked many of the essential features of a military airport. No doubt it could have been used as a staging post for a short-term military occupation such as that which the Americans undertook.
    Most significantly of all, in 1981 the United States carried out military exercises simulating the invasion of Amber and the Amberines, with the purpose of displacing the imaginary island's Marxist ruler. Commentators were in no doubt that this was a flimsily disguised Grenada and the Grenadines. It is inconceivable that the Foreign Office did not realise the true significance of this military exercise.
    This should be added to the evidence cited in paragraph 32 of the report that, on 23 October, the British high commissioner in Barbados was told that he would probably receive a formal request for British participation in an invasion of Grenada later that day. This point has been covered by other right hon. and hon. Members. The request was never received because:
    "According to the Prime Minister of Barbados, as far as the United Kingdom was concerned, 'our attitude was that the formal request in writing would go when the oral request had been answered. And since the oral request was never answered … the formal written request was overtaken by the operation itself'."
    However, even such a verbal message, of which, according to paragraph 35, the British Government were perfectly well aware, should, given the overall aspects of what happened previously, have started alarm bells ringing. Instead, it appears that the Foreign Secretary was taken in by United States blandishments to the effect that
    "the United States was proceeding 'very cautiously', and that HM Government would be 'consulted immediately if the United States decided to take any action' or 'before any further steps were taken'."
    The report continues:
    "The Foreign Secretary told us that 'there was certainly a hesitation to embark on telephone calls on necessarily an open line' to the Caribbean, and that HM Government had therefore relied on normal diplomatic channels to convey their point of view. This seems to us a somewhat lethargic approach."
    That comment has been referred to. An increased telephone bill to the Caribbean or whatever it was that put the Foreign Secretary off the "open line" would have been a small price to pay for proper information and a chance to influence world events. The Foreign Secretary's political career has been characterised by a certain laid-back approach, but here he seems to have surpassed his own worst standards.
    The foreign policy implications of the Grenada incident are clear. We need a strong European component of NATO, a strengthening of the United Nations, a more alert Foreign Office and, above all, a more alert Foreign Secretary. What about the people of Grenada? Here we must endorse whole-heartedly the sections of the report that deal with the political and economic future of the island. The need is for a steady transition from the advisory council to democracy, coupled with a determined effort to rebuild and diversify the Grenadian economy.
    The report sets out a wholly sensible set of priorities, of which three need to be highlighted. Other right hon. and hon. Members have already referred to the building of the Point Salines airport, which as well as encouraging the tourist trade would safeguard Plessey's contract for the
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    work on the airport, and the rebuilding of Grenada's infrastructure — roads, water, power and so on — is essential. As well as helping to encourage tourism, that provides a sine qua non of a sustainable economy. Grenada should not be lumbered with prestige projects such as the airport without such basic necessities as a good road structure. Thirdly, it is important to strengthen the private sector of the Grenadian economy after the ravages of the past 10 years. No doubt the various public investment measures that the report outlines will help the private sector, but I believe, with the report, that more direct measures may be needed in the end.
    Grenada should have taught everyone who is interested in NATO and United Kingdom-United States relations an important lesson. Luckily, the invasion, illegal and precipitate as it was, has turned out reasonably well. The people of Grenada have the prospect of an orderly and reasonably prosperous future. No major super-power incident has resulted from the invasion. There have been serious costs—the fragile harmony of the Caribbean has been strained almost to breaking point, as other hon. Members have said, the United States has lost much of its moral authority to condemn Soviet adventurism elsewhere, and international law has been blatantly flouted. However, things could have been immeasurably worse. Sparks such as Grenada could land in the tinder of fragile super-power relationships and set off a confrontation of truly apocalyptic proportions. We must learn the lessons of Grenada well—we may not have a second chance.
    7.5 pm
    Mr. Tom Clarke: I shall try to be brief, in the hope that at least one of my hon. Friends may catch your eye, Mr. Deputy Speaker.
    This has been an interesting debate, although not as long as most of us would have wished. A number of lessons have clearly been learnt, certainly by the House, if not by the Government. My concern is that we are facing an unhelpful and unhealthy rigidity. That was highlighted by the view of my hon. Friend the Member for Vauxhall (Mr. Holland) that we seem at times to be more concerned about East-West dialogue than about the North-South problem.
    I fear that, in spite of the fact that the Foreign Office and the British Government, on all the evidence, were treated abominably, they have, in the time that has passed since the invasion, allowed themselves to be associated with the rigid approach of the Reagan Administration. As evidence of that, I refer to the background briefing issued by the Foreign Office on Grenada entitled, "The Activities of the New Jewel Movement". I note that this document refers to
    "the intervention of the United States forces supported by those of several Caribbean states."
    I understood that it was an invasion — not an intervention—and all the evidence given to the Select Committee points to that.
    The document says:
    "Cuba provided major assistance in the form of equipment, materials and construction workers. Other contributors to the airport project included Libya, Venezuela, Algeria, OPEC and the European Community."
    The European Community is mentioned last.
    I join with my hon. Friend the Member for Vauxhall, who expressed his grave worries about the Government's aid policy. The tone and attitude of this document is

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    reflected in Government policies. In any graph on foreign and overseas affairs we see that defence expenditure has gone way up since 1979, but there has been a considerable drop in the amount of aid. We are also being extremely selective. Is there any doubt that Bishop was driven to Cuba and the Soviet Union in the vacuum that was thus created, as my right hon. Friend the Member for Clydesdale (Dame J. Hart) said? We are almost sitting it out, even with Commonwealth countries, despite the almost unhealthy American interest in that part of the world.
    I draw to the Minister's attention my concern, and that expressed by Conservative Members—notably the hon. Members for Hertford and Stortford (Mr. Wells) and for Aldridge-Brownhills (Mr. Shepherd), in refreshing speeches—about stability in other parts of the Caribbean arising from this episode and the lessons that we are trying to learn.
    I also draw to the Minister's attention the problem of Belize. I visited Belize recently with my hon. Friend the Member for Stretford (Mr. Lloyd) and other hon. Members. I hope that any suggestion that the case for a British presence has fallen by the wayside is one that the Minister would repudiate, and that our aid policy will give every assistance to George Price, the Prime Minister of Belize. If we fail to do that, the message of Grenada is simple. There will be an almighty struggle between the United States and perhaps Cuba, and, on all the evidence, we should avoid that.
    7.10 pm
    Mr. Donald Anderson: I shall be as brief as I can.
    The Select Committee report was clearly valuable. Important points have been made in the debate about the nature and quantity of aid directed to the island of Grenada, as well as about Britain's relationship with the Caribbean and whether the area should be consigned to the United States.
    I shall move on to broader foreign policy considerations, some of which have been touched on already. The question of the security of small states has been raised as a result of the events in Grenada. We know that two studies are under way by the Commonwealth Secretariat and by the David Davies Institute, under the chairmanship of the hon. and learned Member for Blackpool, South (Sir P. Blaker). It would therefore probably be prudent to avoid saying anything of substance until the reports are available and we can debate them.
    I have only one word of caution at this stage. There is real danger in our talking of threats to small states, as threats can often be defined in a subjective way, according to the strategic considerations of one or other of the superpowers. The Prime Minister appeared to be aware of that danger when she said in the Sunday broadcast on the world service, after the invasion, that
    "Western democracies should not use force to walk into other people's countries."
    The Foreign Secretary, in his evidence to the Select Committee, on page 15, said something fairly similar.
    I have two further points to raise. First, I should like to refer to the quality of advice to the Foreign Office from our missions in the field and to the quality of the Foreign Office's response, as set out in the report. My second point relates to the effect of the invasion and the events immediately surrounding it on the bilateral relations
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    between ourselves and the United States, and the nature of the special relationship which still persists, or not, after those events.
    With regard to the events preceding the invasion, the New York Times reported on 30 October that Administration officials were then briefing journalists that the United States began discussing the use of force in Grenada with friendly Caribbean Governments on 15 October. Between 15 October and 25 October events moved very quickly.
    Apparently, plausible legal cover was provided by the OECS appeal under a treaty article that required an external threat, which certainly did not exist. There was increasing military activity in the region during the Saturday and Sunday, and C130 transports and heavy-lift helicopters were active around Bridgetown. The flight paths to Grenada had been tested, and the Caribbean was bristling with air and sea activity to the extent that both Caribbean and United States journalists were talking openly of the certainty of an invasion. It seems clear from the accounts given in the United States press — and, indeed, from the helpful account that was published in The Economist on 10 March—that the "Go" order had been effectively given in the United States by the joint chiefs of staff on the Saturday.
    There was sufficient evidence for those who wished to see what was happening to report back to Whitehall what was going on. Indeed, it is significant that the Governor of Grenada, whose appeal is used now as justification in part for the invasion, told the BBC that he did not think that intervention was necessary until "late Sunday evening." Even then, as he told the BBC, he asked not for an invasion, but for "help" — undefined — "from outside". That proves that the decision to invade had been made before requests for help from the Governor.
    In any event, the account shows that there was massive evidence on the spot available to those who wished to see it. It is remarkable that the diplomatic advice available to the Government and to our joint intelligence committee did not sense the vibrations of invasion. Yet our Government were happy to take at face value what Larry Speakes, the White House press officer, and others in Washington were telling them: that the United States was adopting a cautious approach and that we would be consulted before anything happened.
    There are lessons to be learnt from the invasion. The Select Committee talked about the lethargic response of the Foreign Secretary and of the need for the Foreign Office to have taken the initiative at that time and found out what was going on on the spot. Certainly it is clear that the Foreign Office was allowing things to drift.
    The Foreign Secretary was clearly put in an extremely embarrassing position on the Monday, when he reported to the House that he knew of no intention for an invasion. At the time of the famous telephone message from President Reagan to the Prime Minister on the Monday evening, the fleet had been diverted, on 20 October, the joint chiefs of staff had been on countdown to invasion, and United States troops had arrived in Barbados. Whoever was to blame—the Foreign Secretary or the men in the field—it was a very embarrassing few days for the Government.
    The Foreign Secretary was able to tell the House on Tuesday that it was "a matter for regret" that there had

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    been an invasion. That is a truly Palmerstonian response to the invasion of an independent Commonwealth country by an ally with whom we have a special relationship.
    Clearly, neither the United States President nor the Secretary of State thought it proper, worth while or necessary to consult this country before the invasion, or to consider United Kingdom participation as an essential part of the operation. Therefore, there are clear implications for our bilateral relations.
    Is the Prime Minister still examining the implications of that unilateral United States action, with token local assistance, and total lack of real consultation with us? What guarantees do we have, for example, that our interests will be taken into account in actions by the United States outside the European theatre, in sensitive areas such as the Gulf? What implications are there for strengthening the European voice—the European pillar within NATO? What implications are there for dual control of cruise missiles and for a European voice in the "Star Wars" strategy?
    Traditional British and Commonwealth interests were planned out of the operation from the very start. There are implications for consultation and crisis management procedures. However much the Foreign Office suggests that we look to the future, and tries to stifle a post mortem and a longer-term analysis, it is clear that in Washington at that time our voice counted for very little. As part of a European grouping, we would have been allowed a stronger voice. The special relationship was exposed as an illusion by the incident. If it proved nothing else, that was one of the hard lessons for us from the Grenada incident.
    7.20 pm
    The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Mr. Ray Whitney): The debate has been very interesting and useful, and I am particularly grateful to my right hon. and learned Friend the Member for Hendon, South (Mr. Thomas) for the balanced way in which he introduced it. He got us off to a very good start. The debate has added to the very significant work done by the Select Committee on an area that is clearly of great importance to this country, as well as being of great interest to the Government and the House.
    As the hon. Member for Swansea, East (Mr. Anderson) has just said, there are dangers in looking back too much. It is certainly not the Government's intention to stifle, as he suggested, a post mortem. It can be seen from the debate that there is a danger in rewriting history and in indulging in the pastime of hindsight, which is a temptation to us all. I should say to my right hon. and learned Friend the Member for Hendon, South that the terminology used in the Foreign Office reply applied to the Committee's description of the process rather than to a consideration of the Committee's deliberations.
    I should like to go rapidly over the history of the issue in something like chronological order and to offer some element of corrective, and a somewhat different viewpoint from that which has so far been heard in the debate. My hon. Friend the Member for Hertford and Stortford (Mr. Wells) is a great expert on these affairs and has long experience of this part of the world. He and the right hon. Member for Clydesdale (Dame J. Hart) took quite a bit of time to tell us that we should have handled the issue
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    differently in the 1960s and early 1970s. That may well be so, but the right hon. Lady will know better than anyone that she was a leading member of the Labour Government for a significant part of that time. For example, between 1974 and 1979 Dominica and St. Lucia were among those states that achieved independence under the procedure that was also followed in the case of Grenada. The Governments of all the Associated States that requested termination of association had recently won elections after having advocated independence. There were opportunities for each island to engage in public discussion of the proposal for independence, and the constitutional conference was open to the opposition parties.
    Mr. Nigel Spearing rose——
    Mr. Whitney: I am sorry, but I shall not give way. I have allowed hon. Members as much time as possible in which to speak, and have left myself only 10 minutes in which to conclude the debate. If I do not give the Government's point of view, I shall once again be accused of not indulging in the post mortem that many hon. Members seem to want.
    Therefore, whatever the view is now, I must suggest that it was the carefully considered policy of Governments of both complexions to grant those states independence. Many of the problems were foreseen, but perhaps some were not. However, I accept that those problems exist, and we are determined to help the Caribbean states with them. That is why, for example, we are co-operating so positively with the study that has now been launched, under the aegis of the Commonwealth Secretary-General, on the security of small states.
    There was discussion as to what we might or might not have done about the Bishop regime. That regime was turning away from this country, towards Cuba. We were considering a new tranche of aid in 1979 when those unhappy developments began. It was a very difficult dilemma, but with hindsight I do not believe that this Government or any other Government would have handled the matter significantly differently.
    I come to the events of last October. The Government's response contained in the White Paper sets out clearly what was happening. It is wrong to suggest a shortage of information or a lack of analysis. With respect, I must firmly reject the quite unprincipled — forgive me, the quite unjustified—attack of my hon. Friend the Member for Aldridge-Brownhills (Mr. Shepherd) on the capability of the diplomatic service. We are well represented in the Caribbean in terms of both numbers and quality, and it is wrong to talk about a shortage of information reaching Ministers, or indeed, my right hon. Friend the Prime Minister.
    The tale is told in the White Paper. It is not a question of how many telegrams were sent, but rather a matter of judgment. That judgment was reached on a sound basis, and as many hon. Members have recognised, many states in the Caribbean came to a similar conclusion to us. There was an honest and entirely understandable difference of view as to how to treat a particularly difficult problem. Thus, it is not profitable at this stage to take the matter further.
    The difference that arose with the United States is, again, well-trodden ground. There is no doubt that we and the United States regret that we got out of kilter at that time. However, hon. Members must understand how that

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    arose and should not indulge in the very cheap anti-Americanism of the hon. Member for Yeovil (Mr. Ashdown), who seemed to be riding the Liberal horse of anti-European policy——
    Mr. Ashdown: We are not anti-European.
    Mr. Whitney: I should have said riding the Liberal horse of anti-American policy. The hon. Gentleman sought in some way to suggest that was a link between our different readings of the situation in Grenada and our very satisfactory relationships with the United States over the use of nuclear weapons in this country.
    Mr. Ashdown rose——
    Mr. Whitney: The hon. Gentleman knows very well that that is a complete red herring.
    Many hon. Members complained about the swiftness of aid dispensation once we had moved in after the intervention in Grenada. The Overseas Development Administration has a record of which it is justly proud. About 97 per cent. of that £750,000 was agreed by the end of January. As the right hon. Member for Clydesdale knows, by any standards that is very fast going. We must, of course, go through certain procedures — as hon. Members will understand—as public money is involved.
    Mr. Corbyn rose——
    Mr. Whitney: Of course I shall not give way at this stage.
    We certainly take into consideration the need to help members of the Caribbean to fill in the forms and all the rest of it. As my hon. Friend the Member for Hertford and Stortford knows, we have looked very closely into the complaints made about aid administration. Although, of course, nothing is perfect, I am satisfied that there is little substance to them. There has been very effective aid disbursement, and that continues. The efforts of the development division and the better input by the high commission will improve still further the aid administration.
    I must emphasise that there is no question of the Government turning their back on the Caribbean. Far from it. As I have said, we take a very close interest in what we can do to help security and that is precisely why—to pick up the point of the hon. Member for Vauxhall (Mr. Holland)—we provided £300,000 of police training in Grenada. The Grenadians asked for that. We take a close interest in their security and in the economic development of the Caribbean as a whole. In response to a point made by the hon. Member for Clydesdale, I should add that in every year since 1980 British aid to the Caribbean commonwealth countries has averaged £27·5 million. That gives that area one of the highest per capita rates for aid in the world.
    Mr. Holland rose——
    Mr. Whitney: It is about four times the amount per capita that we give to the African countries and perhaps 40 times what we give to the Asian sub-continent. In addition, we contribute to a whole raft of multilateral agencies. Overall, aid from Western sources has increased from $75 million to $298 million. That is a token and strong manifestation of our interest in Grenada and the Caribbean, and of our commitment to the 5 million people in those states, who are linked to the United Kingdom in the many ways to which many hon. Members referred. I
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    rededicate and reaffirm the Government's commitment to the development of Grenada and the Commonwealth states of the Caribbean.
    It being half-past Seven o'clock, the Question was deferred, pursuant to paragraph (2)(c) of Standing Order No. 19 (Consideration of Estimates).
    Mr. Spearing: On a point of order, Mr. Deputy Speaker. The rubric in italics on the Order Paper refers to the debate, to two reports of the Foreign Affairs Committee, House of Commons Papers Nos. 421 and 226, and also to the Government's reply in Cmnd. 9267. I draw it to your attention, as the Estimates days are an experiment, that no member of the Select Committee was called from this side of the House during the debate.
    Mr. Deputy Speaker (Mr. Harold Walker): I am not sure that that is a point of order, but I understand the hon. Member's resentment and will bear it in mind.
    Mr. Tom Clarke: On a point of order, Mr. Deputy Speaker. I seek your guidance. I understand that the Minister did not have as much time as he would have wished to reply to the debate. I raised the important question of Belize. Is it normal practice for the Minister to write to the hon. Member when he does not have time to answer the hon. Member's question?
    Mr. Deputy Speaker: That is not a question for me. I understand the resentment of hon. Members, but the debate, for reasons that are well understood, started late. If some hon. Members took a disproportionate amount of time, I hope that they will bear it in mind during similar debates in future.

    Class XIV, Votes 1 and 2
    Motion made, and Question proposed,
    That a further sum not exceeding £496,708,000 be granted to Her Majesty out of the Consolidated Fund to defray the charge which will come in course of payment during the year ending on 31st March 1985 for expenditure by the Department of the Environment (Property Services Agency) on maintenance and running costs (Subhead A3 of Vote 1), acquisitions and new works costing over £100,000 (Subhead C1 of Vote 1), and general administrative expenses (Subhead A2 of Vote 2).—[Sir George Young.]
    7.31 pm
    Sir Hugh Rossi: I beg to move,
    That Class XIV, Vote 1 be reduced by £20 million in respect of Subhead C1 (Acquisitions and new works costing over £100,000).
    Estimates and accounts are not the most riveting of subjects for debate. At first sight they present little to excite and stir the imagination. However, the Environment Select Committee was appointed by the House to examine the expenditure of the Department of the Environment. That obliges us to examine pages of detailed accounts and to report on our findings.
    The Votes on the Order Paper are the subject matter of the third report of the Environment Committee. We asked for the debate because during our examination of Class XIV, Votes 1 and 2, which contain the Property Services Agency estimates, we came across matters hidden away amongst the mass of figures, which worry us. We sought to highlight the seriousness of our anxiety by placing on the Order Paper a motion to reduce by £20 million the provision for acquisition and new works which cost more than £100,000. Whether this motion is pressed to a

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    Division at 10 o'clock will depend upon the way in which the Minister replies to our criticisms and on the assurances he can give to the House.
    The Committee has serious reservations as to whether the proper value will be obtained for the financial provision being sought by the PSA under three Sub-heads within the Votes. That is quite apart from the even more serious matters, which are the subject of the Wardale report, recently considered by the Public Accounts Committee. I have no doubt that this will be raised by the Chairman of that Committee, the right hon. Member for Ashton-under-Lyne (Mr. Sheldon), if he catches your eye, Mr. Deputy Speaker.
    In considering the three Sub-heads the Environment Committee had the advantage of reading the Comptroller and Auditor General's report on "The PSA: Building Maintenance Expenditure in the United Kingdom." Although that report is for the PAC's consideration, we could not overlook its findings and recommendations when considering the PSA's Vote provision for maintenance and running costs. This is a further example of co-operation between our two Committees, to which my hon. Friend the Member for Scarborough (Sir M. Shaw) drew attention on 4 July during the debate on the Department of the Environment's Estimates for 1984–85. We await with interest the report from the PAC on building maintenance by the PSA.
    Regarding the three Sub-heads, I ask the House to consider Class XIV, Vote 1 on civil accommodation services. Our examination of Sub-head A3 on maintenance and running costs shows that an extra £11·6 million was being provided for maintenance works—an increase of 18 per cent. over the previous year. However, we also discovered that the maintenance of the civil estate had fallen below its proper level. A shortage of funds was said to be the reason for a backlog of maintenance from past years, provisionally estimated at £90 million.
    This year's provision will not enable that backlog to be overtaken. It will merely restore expenditure part way towards the level needed to maintain the estate in good condition. Obviously, another year's delay in dealing with the backlog will lead to a much heavier maintenance bill next year.
    It is difficult to reconcile the PSA's two explanations for the backlog of maintenace of £90 million, which it gave the Committee in evidence. On the one hand, it gave the reason as being a shortage of funds—that is found in its answer to question 2 of our report—and on the other, it said that the backlog was of recent origin,
    "over the last few months"—
    that is found in its reply to question 7.
    When the Minister replies will he tell the House what volume of backlog was planned for when the 1983–84 Estimates were presented? The House also needs to be told whether the backlog results from under-estimating. In that case, who is to blame? Is it the Treasury or the PSA? Alternatively, does the fault lie in inadequate agency methods of gathering information? If it is the fault of the information gathering methods, there remains a real risk that additional financial provision may not be allocated where the need is greatest. It is clear that the PSA needs to lay down central guidance on maintenance priorities and
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    to ensure that regional directors are using common standards in making their assessments for maintenance programmes. We await its response.
    The Committee also awaits the outcome of the PAC's inquiry into the Comptroller and Auditor General's report on "The PSA: Building Maintenance Expenditure in the United Kingdom". That inquiry may offer greater scope for the issues I have raised to be fully examined.
    It should be good news that the discretionary limit of expenditure which client departments may incur on local offices is being doubled this year. But the new limit is only £1,000. That is insufficient. It will simply redecorate a fair-sized room. According to the report, a more realistic level would be helpful,
    "both in averting new arrears of maintenance of the kind that have arisen and in putting into decent condition some of the local public offices, in particular DHSS offices, whose appearance and atmosphere are at present deplorable".
    My hon. Friend the Minister will remember that when we both served in the Department of Health and Social Security, and I had personal responsibility for social security matters, the conditions of the social security offices in which the staff of the Department had to work and in which their clients had to wait, sometimes for many hours, were a matter of deep anxiety for me. When one tried to discover why the conditions could not be brought up to an acceptable level one found that it was not within the right level of priorities for the PSA. On inquiry, one found that if the local managers of those offices were given a discretion to approach local builders, the work could be done rapidly and at far less than apparently it cost the PSA to carry out required work from time to time in those offices. That is a matter upon which I would press the Minister strongly — the level of expenditure at local discretion should be considered and reviewed substantially.
    In the same class, Vote 1, I should like to draw the attention of the House to Subhead C1 "Acquisitions and new work costing over £100,000." That is the subject of the motion on the Order Paper that I have just moved. The provision sought is £172·5 million compared with a provision of £131·1 million in 1983–84 of which, in practice, only £114·8 million was spent. The increase in the Estimate provision is thus £57·7 million, or about 50 per cent., above the previous year's expenditure. Although the PSA expects a large number of projects to reach peak spending in 1984–85, the planned expenditure is extremely ambitious when viewed against past performance.
    Our assessment of the probabilities was made much more difficult when we learned that important errors had been made in supporting tables 1 and 2 of pages 67–76 of the Estimate. The technical explanation for the errors will be found in paragraph 11 on pages vi and vii of our report.
    At the same time, we wanted to question the PSA about four projects where the estimated cost was being exceeded so substantially as to suggest that they were running out of control and a glance at tables 1 and 2 to which I have referred will show how we came to that assumption. Liverpool Crown court, on page 72, appears to be 40 per cent. in excess of estimated cost; the Houses of Parliament heating modernisation, on page 74, 30 per cent. in excess; Park Lane fourth special hospital, on page 74, 65 per cent. in excess; and Wymott prison, on page 72, 45 per cent. in excess.
    The figures presented to Parliament were wrong anyway—for example, in the case of Liverpool Crown

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    court, the original estimate of costs at current prices was not £37·3 million as printed but £50·338 million. Probable expenditure to March 1984, also at current prices, was not £50·242 million as printed but £55·301 million. That is a cumulative figure and not last year's expenditure.
    We were also puzzled as to why further financial provision was needed in 1984–85, and after 31 March 1985 when the building had been completed and had been opened by Her Majesty. No explanation was given during the oral examination of PSA witnesses, but the position has been clarified in additional written evidence as will be seen from the footnote to question 49 of our report.
    The published Estimates are important public documents provided for the information of Parliament and other interested parties. We considered it wholly unsatisfactory that they should have been permitted to be issued with significant errors throughout ten pages of the Estimates. It is surely even more unsatisfactory that neither the Department of the Environment nor the Treasury discovered those mistakes in their examinations of the Estimates, which must have been perfunctory to a degree.
    We insisted that corrected tables should be provided, and that has been done in the revised Estimates. When I tell the House that, in cash, the Liverpool Crown court cost £43 million and that the figure does not merit a mention in the Estimates or the revised Estimates, right hon. and hon. Members will understand why we so readily accepted the PSA offer to discuss a better format or an explanatory note for the tables in next year's Estimate.
    I have explained our difficulties as a Committee in assessing the financial provision under this subhead, and, given the inaccurate statistics throughout the ten pages of the Estimates, we had no confidence in a bid for funds which represented a 50 per cent. increase over the previous year's expenditure. We therefore recommended a reduction in the Vote provision of £20 million. Even so, the reduced provision will allow for a 33 per cent. increase over last year's expenditure. That £20 million is the subject of the motion.
    I come now to Class XIV, Vote 2 "Administration and Miscellaneous Services". We were interested in the provision under Subhead A2 "General administrative expenses". Even after allowing for a supplementary provision last year, the provision this year has increased by almost £39 million, nearly two thirds of which is attributed to the increase in consultants' fees.
    We were told that the increase was needed to meet an expanded programme of work, coupled with a policy of switching from in-house resources to the use of professional design consultants. On the first point, we were assured by the PSA that the projects in the expanded programme of work could be expected to mature in two or three years' time. We were pleased to hear that, because it means that the expansion of the employment of out-house consultants does not seem to be running unduly ahead of the planned programme of work.
    We noted the steady reduction in staff for in-house major design work in recent years as well as the increase in the proportion of design work, in value terms, put out to private contractors over the past seven years with even larger increase forecast. We were less certain about the somewhat imprecise nature of the approach to allocating schemes between in-house and out-house. Normally the PSA is interested in obtaining the best financial deal, and in arriving at that assessment we have been told that it had
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    to be assumed that it would be financially disadvantageous to have in-house staff sitting around doing nothing, simply to pursue an out-house consultant's policy. Given that the professionals available in-house, both type and number, can hardly be expected to match the project requirements, it would seem that in many cases schemes are allocated not on the basis of an assessment of the relative costs of the two methods, but rather on the basis of what professional expertise is for the time being available in the PSA's territorial organisation or in headquarters. Perhaps the Minister can say whether suitable staff can be moved temporarily between headquarters and the territorial organisation to ensure the full use of in-house staff. We thought that it might be preferable to maintain a staffing level sufficient only to meet the lowest troughs in demand and, therefore, not have excess staff against a possibility of there being peaks. The out-house people can deal with that situation.
    Our main recommendation is that a proper assessment be made of the relative costs of designing different types of scheme by different methods, and that the agency staffing and design practices be actively managed to minimise costs.
    The Committee welcomed the opportunity to examine the agency's estimates. Despite the illustrious parentage of the format of the tables on the cost of projects, we have found them wanting, as I have demonstrated, and we look forward to seeing them improved after further consultation. We look forward also to continuing the estimates dialogue next year with the added advantage of the forthcoming report of the Committee of Public Accounts on building maintenance expenditure.
    Finally, I express the fervent hope of the Committee that the Department of the Environment and Treasury officials will not again allow so many errors in the Estimates to slip through unnoticed during their examination so that the Committee had to pick them up.
    7.52 pm
    Mr. Robert Sheldon: The House will be grateful to the hon. Member for Hornsey and Wood Green (Sir H. Rossi) for his examination of the Property Services Agency, and the third report upon it. I congratulate the hon. Gentleman not only on his speech but on the report and on the way in which the investigation was conducted, the estimates were made and the errors were discovered.
    The hon. Gentleman mentioned the way in which the presentation of financial documents was made, and he made one or two criticisms. He may be aware that it was only at the end of last week that Mr. Likierman presented a report on the presentation of Government financial documents and how they might be improved, so this matter is very much in the centre of thinking at present. I am sure that the wise comments he made will be part of the argument that is just beginning upon the publication of that report.
    As the hon. Gentleman foresaw, I wish to deal with the Wardale report, and in particular the twenty-sixth report from the Committee of Public Accounts on systems controls and fraud in the Property Services Agency. The Committee report dealt with an examination of the Wardale report which had been produced by Sir Geoffrey Wardale, assisted by Mr. Herron. The report examined a number of cases of corruption in the PSA. I believe that this question of corruption and dishonesty in the public

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    service is the most important matter to come before the Committee of Public Accounts. We have had matters involving substantial sums of money, matters where a number of errors were made, such as the De Lorean affair, and matters concerning the size of defence contracts.
    The integrity of the Civil Service, its reputation for incorruptibility and its dedication is one of the great treasures of our constitution. If we observe any decline in those standards, we need to act urgently, immediately and thoroughly. Isolated examples of corruption when they occur must be dealt with immediately and thoroughly. Dishonesty has a number of the characteristics of a malignancy. It can spread, if unchecked, and it can take over the organism in which it intrudes. At the early stages of such corruption, fellow workers will disdain involvement in fraud, and the threat of disclosure will effectively deter many from taking part in such practices. But there can come a time when bribery is so widespread in a department or part of a department that it becomes part of the system, and when that happens eradication becomes very hard. We know many countries where this has happened. The examples are, sadly, all too numerous.
    The threat of increased fraud and corruption in the public service is a very real one. We are presently faced with a situation in which Civil Service morale is unhappily rather low, there are questions of pay, and there is a feeling among many civil servants that they are seen as failures who were unable to get a job in the real world of competitive finance and industry. The idealism which prompted so many of our leading civil servants to engage in the public service for the good of the people of this country is declining as a result of attitudes being taken towards civil servants.
    The very ethos of the Civil Service is under threat. We know that some of our leading young figures — for example, a number of principals—some of the brightest people in the Civil Service, are leaving the Treasury for other areas of activity, and we have to be careful about the decline in the standards and abilities of the people employed in the Civil Service and in the public service generally. I happen to believe that there has been a general decline in standards in the country as a whole. The patterns of honesty are changing, unfortunately frequently for the worse, as we become a more competitive economy, which is after all the aim of the Government. However, a more competitive climate, as an unfortunate by-product, leads to a number of corners being cut, and these are matters that we also have to consider. At the same time as this is happening, opportunities for corruption are greater in the public service as hard-pressed industries struggle for contracts by Government Departments. Thus there is a need for continual surveillance, and that need will remain with us for some time.
    The Wardale report examined 61 cases of corruption. That Committee and the Committee of Public Accounts accepted that those 61 cases were the tip of an iceberg. How big the iceberg is we are obviously unable to say. What the Comptroller and Auditor-General found particularly disturbing—he repeated it in his memorandum—is the extent of collusion, collusion within the Department and collusion with contractors. Particularly disturbing was the deliberate swindling of the PSA by
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    contractors. The attitude to this, about which we heard, is best expressed by a reply of Sir Geoffrey Wardale to a question that I put to him. I said:
    "you make some strong comments about the complacency and failures of management in the PSA. In your view, how deep-rooted are these weaknesses of attitude—are they widespread across the country, and do they exist at all levels of management"?
    Sir Geoffrey replied:
    "The simple answer to that is yes, to all the questions. We found that this attitude which we have described as complacent—and we have tried to define in the course of the report what exactly we mean by complacent, because it is rather a loaded word used on its own—was a deep-seated attitude. It showed itself in people's attitudes almost without them knowing it. Although I would not like to give you the impression that everyone was tarred with the same brush, because of course there were people in the organisation we saw who were doing a good and efficient management job, nevertheless I think I have to say that I regard these attitudes almost as the attitudes of the organisation; they are the ethos of the organisation."
    Later, it was put to him:
    "You say in your report that there is a degree of complacency on the part of management which is reflected in its attitude towards dishonesty and fraud."
    Sir Geoffrey replied, "Yes."
    There is only one interpretation of those replies: there was a certain amount of corruption and those in many parts of the areas concerned felt that it was a problem which they had to live with. When that happens, certain serious consequences follow for us, because we have to ensure that that state of affairs is brought to an end. If it remained unchecked, it would spread, bit by bit. The eradication of corruption is one of the most difficult tasks that many countries have tried, often unsuccessfully, to achieve.
    Sir Geoffrey pointed out that when contracts went out to an individual jobbing contractor, there was a "field for bribery". He added:
    "this field in our view was made worse in the PSA because often only one officer dealt with all the stages of letting the contract, saying the work had been completed and authorising the payment. We did not regard that as a very satisfactory arrangement. Finally of course there is the direct works with which you would not want to be concerned. As to how it compares with the outside world, perhaps before I turn to Mr. Herron on this I should say that when we started on this enquiry I took it on under the impression that I would find the systems and controls in the PSA would be, like they are in most Government organisations I have had any acquaintance with, somewhat elaborate, rather more elaborate than perhaps you would get in the private sector as a rule, and that the kind of cases we would have to deal with would be those that would escape through any system of control, however elaborate. I am bound to say that I was rather taken aback to find that the controls were nothing like as elaborate as I would have expected in any organisation. In fact the conclusion we came to was that both on the preventive controls, the controls where work is authorised and at the other stages while work is being carried out and authorised they were weak and the detective controls that find out irregularities later in the day after the work had been completed, by spot checks and so on, were weak also. I am bound to say that I found myself surprised at this."
    Inspection teams were set up to discover errors and frauds. Sir Geoffrey was asked:
    "You perhaps in your mind drew an analogy, or I did in mine, with banks where fraud is always a risk and where they have outside inspection teams who drop in on a bank unannounced and within ten minutes are going through the books. You made a recommendation that there should be what you called regional management inspection. Had you something similar in mind?"
    Sir Geoffrey replied:
    "It was of the same nature."
    The next question was:
    "Were you surprised when the PSA did not accept that recommendation?"

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    Sir Geoffrey replied:
    "Yes is the short answer to that."
    There were not even the inspection teams that one would regard as a minimum requirement, knowing that there had been fraud.
    We understood initially that the 5 per cent. sample that was subject to check was a means of checking on fraud within the PSA. Mr. Herron, who advised Sir Geoffrey, said:
    "This 5 per cent. check as it is, is the management's day-to-day control of the business; it is nothing more than that. It is not an independent check as such. That is our view and therefore if you wish to set up an independent check you cannot use the 5 per cent. checks as being that, it must be something superimposed over and above; hence our recommendations on an inspection team."
    Against that argument, Mr. Montague Alfred said that the aims of the PSA were, first, to satisfy clients, secondly, to spend the voted funds and thirdly, to obtain value for money. The Committee's objectives were different. They were that if there is corruption, public money must be safeguarded. Even if that leads to unpleasant consequences, it must be our first priority, given the pressures to which, as I said earlier, the Civil Service is subject.
    We made a number of recommendations. We were pleased to receive the Secretary of State's assurances of determination to root out corruption in the PSA. That was unqualified and we welcomed it. The right hon. Gentleman also said that he intended to press forward the Wardale recommendations. We shared the Comptroller and Auditor-General's concern about examples of deliberate swindling by contractors and we asked PSA to sharpen its staff's alertness to the risks, whether or not there was collusion.
    We recommended that, quite apart from the ordinary judicial penalties, which would be incurred anyway, dishonesty should normally entail dismissal for staff and loss of orders for contractors, and that sharp practice falling short of dishonesty should also be penalised. We recommended that the PSA should re-examine with the Director of Public Prosecutions how disciplinary action against staff might be speeded up.
    We recommended that the PSA should take prompt action against unsatisfactory contractors and publicise it among its regular contractors, so that they knew the risks that they were taking if they indulged in the practices to which I have referred.
    We said:
    "We shall expect next year to see evidence of significant improvements in attitudes and performance."
    When we examined the new chief executive of the PSA, we were given assurances on those matters.
    The most important aspects are the attitudes and the seriousness with which Government Departments deal with and anticipate dishonesty among employees. It must be at the pinnacle of our priorities for the public service that its reputation is protected. The Government hold the Civil Service in trust, not just for themselves, but for all Administrations to come. It is that trust which we must fulfil.
    8.10 pm
    Mr. Sydney Chapman: It is a great pleasure to follow the right hon. Member for Ashton-under-Lyne (Mr. Sheldon), who speaks with immense
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    authority on public finance. I hope that he will excuse me if, on this occasion, I do not follow him in his remarks about the Wardale report.
    I want to take this opportunity to support the motion tabled by my hon. Friend the Member for Hornsey and Wood Green (Sir H. Rossi), following the third report of the Environment Committee on the Property Services Agency's main Estimates for the current financial year. I reiterate what my hon. Friend said on Class XIV, Vote 1 about civil accommodation services.
    As I understand it, the maintenance of civil estates has fallen below an adequate level. My hon. Friend said that there was a backlog of £90 million maintenance work which will not be tackled in the current financial year. I believe that, all things being equal, the present time is ideal to step up maintenance and repair work.
    I shall give the House one construction statistic, which is revealing. It was given to me some time ago by the director-general of what was then the National Federation of Building Trades Employers, now known as the Building Employers Confederation. He said that, although between 1979 and 1982 building costs had increased by 40 per cent., tender prices had increased by only 11 per cent.
    The director-general's point was that that gave some indication of the construction industry's contribution to the battle against inflation. I do not believe that the position has materially changed since then. Now is the best time to obtain value for money and to get work done at less than the estimated cost of a project at the time of its conception. It is absolutely essential that the estates under the responsibility of the PSA should be kept in good repair. I join my hon. Friend in asking for an assurance that the House will be told about the Government's plans to dispose of the backlog of work. Does the deficiency result from under-estimating at a time when, if anything, the tendency would be to over-estimate contract prices, or was it a result of the inadequate PSA methods of what I call property intelligence?
    I wish to give an example that is rather close to home. Across the road, in St. Stephen's house, room 404 is used by an assistant clerk to the Select Committee on Social Services. Not long ago the ceiling fell into a state of damage and disrepair, as did the walls, because of a leak from above—whether it was from defective plumbing or because of a leak in the roof, I do not know. Several hundreds of pounds were spent on repairs lasting a full week, including replastering and repainting the ceiling and repapering the walls. However, after last week's rainfall, the ceiling is again bulging, the carpet must be dried out and the occupant has again been moved. Surely this is a classic case of its being absolutely essential to have a tight grip on management control of those properties. We should not try to save a penny now when it will cost an additional pound next week.
    I am not suggesting that that is endemic and widespread throughout the service—I hope that it is an exception. But that sort of instance cannot be tolerated with the large and important estate of the PSA, for the cost could be hundreds of thousands, even millions, in wasted pounds.
    I want to underline another point made by my hon. Friend about the provision for acquisition and new works of more than £100,000. He said that, in reality, the provision was 50 per cent. more than the amount spent in 1983–84. One reason for that may be the uneven flow of

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    projects and contracts at different stages. Even so, there is a need for better management control to ensure a smoother and steadier flow of work.
    I wish to refer to the errors in tables 1 and 2 on pages 67 to 76 of the Estimates. My hon. Friend mentioned the Liverpool Crown court. Other instances were given which, frankly, show that the figures were badly wrong. I described them as gobbledegook in the Committee proceedings and that is no exaggeration. More importantly, they emphasise that if the figures are not correct, and if the information given to us was inaccurate, it makes a mockery of the purpose of Select Committees watching the work of Departments.
    A wider issue is involved, in addition to over-estimating or under-estimating on projects, be they a Crown court, a hospital, a prison or any other building. Evidence presented to me shows that far too regularly the costs of contracts rise significantly, not primarily because of inflation but because the plans of the buildings and schemes are changed.
    It may be prudent for me to declare a possible interest as a non-practising architect and a non-executive director of a construction company. To my knowledge, there are NHS hospital buildings where the costs are much higher than the estimates simply because design and construction works have been changed—not only after the contract has begun, but even after it has been completed.
    Mr. Chris Smith: Will the hon. Gentleman include in his analysis a comparison with the very stringent rules that the Department of the Environment places upon housing associations that are constructing housing projects with funding from the housing association grant system? Any additional costs, additions to the contract and changes in the plans once the contract has begun are pored over by the Department in excruciating detail. The housing association is forced to justify every item. Will the hon. Gentleman contrast that exercise with what appears to be happening to the PSA?
    Mr. Chapman: The hon. Member for Islington, South and Finsbury (Mr. Smith) does not need me to make that comparison. He made it eloquently himself. I am not arguing whether the regime of the Department of the Environment vis-a-vis housing associations is too rigid or harsh, but certainly a better element of discipline in hospital and prison building programmes should be a first priority.
    After all the plans have been designed, the working details drawn up and the contracts let — remembering that committee-itis runs rampant in the NHS — DHSS officials, consultants, nurses' representatives or somebody else may have a change of mind. If that happens when the construction is proceeding, the added expense is unwarranted and significant.
    I know of a case in the building of a prison where the warders demanded changes after a prison extension had been completed. I am not against warders being consulted, any more than I am against nurses or consultants being consulted in matters of hospital building. I am simply saying that the consultation period should occur before the design details are drawn up and not after the work has started, which is apparently the norm, or even, as happens in exceptional cases, when the project has been completed.
    Mr. John Mark Taylor: Is not the conclusion which the hon. Member for Islington, South and Finsbury (Mr. Smith) was seeking that the further one gets from direct public ownership the more scrupulous would appear to be the regime? He compared the PSA with housing associations, which have private input, and said that the latter was the better-run regime. Are we not forced to the conclusion that we should move these activities away from public ownership?
    Mr. Chapman: My hon. Friend makes an important point, but I do not want to get involved in an ideological battle. On balance, I agree with my hon. Friend. Public authorities must take extra care to ensure cost-effectiveness and efficient management systems because they are spending taxpayers' money. When private money is being spent, there is a natural mechanism of efficiency because the company would go out of business if it did not order its business in an efficient way.
    Mr. David Alton: Would the hon. Gentleman extend the analogy in the public sector to a comparison between the PSA and local government? Does he agree that if local government overspent by 30 to 40 per cent., as have some of the contracts and companies listed in the PSA accounts, it would be subjected to massive financial penalties, including rate capping, yet the PSA has been able to get away with it scot-free?
    Mr. Chapman: The hon. Gentleman is correct. Indeed, all of those who have intervened in my remarks have underlined the importance of the PSA management getting a grip on the efficient execution of the building work entrusted to it.
    My hon. Friend the Member for Hornsey and Wood Green referred to Class XIV, Vote 2, and the whole question of in-house services and the use of outside consultants. The provision on this aspect has been vastly increased, by at least £39 million over last year, and probably two thirds of that is due to the increase in consultants' fees. I understand that that has occurred because, in giving outside consultants responsibility for certain jobs the fees in the early stage, before construction and completion, are relatively high.
    I am satisfied that that increase is due to the expanded programme of work, though it must include an increase in the proportion of design work — and, as I say, consultants' fees—partially offset by a steady reduction in the work of in-house staff. We should not be dogmatic about this, but I believe that there is a case for more work going to consultants outside rather than to in-house staff. I say that because, particularly with large contracts, there is greater opportunity, for example, to get the best architect for the type of building, and the fee can be negotiated or be at a standard rate.
    I hope, therefore, that more serious consideration will be given to comparing the cost of each contract so that we adopt the most effective way of using the resources, in-house or outside, that are available. Clearly on some work it is better to have the in-house specialists deal with the contract, whereas on others it is best to go out of house. I am told that at present the proportion is about 50:50. I would welcome a commitment on the part of the Government to go to a 60:40 split for design work, using 60 per cent. outside consultants. The key should be excellence of design, cost-effectiveness and value for money of design work.

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    The PSA is a large and important enterprise of Government. Much needs to be done, as our inquiries have underlined only too well. I hope that its leading personnnel and the new chief executive will take to heart the perhaps overdue but constructive criticisms of the Select Committee. I am happy to be associated with the motion of my hon. Friend the Member for Hornsey and Wood Green.
    8.26 pm
    Mr. David Alton: When the hon. Member for Chipping Barnet (Mr. Chapman), in his opening remarks, said that he intended to tell us something about leaks, I thought at first that he proposed to reveal inside information about some forthcoming story in The Guardian, or that he would provide some inside information about some of his hon. Friends on the wetter fringe of the Conservative party.
    Instead, the hon. Gentleman gave the House an accurate account of the inadequacies of the PSA accounts and mentioned some remedies, with which I wish to be associated. Those remedies would prevent the sort of problems that the Select Committee has highlighted.
    The hon. Member for Hornsey and Wood Green (Sir H. Rossi), the Chairman of the Select Committee, in a characteristic speech, gave an authoritative, competent and eloquent account of many of the problems that the PSA has been facing. He spoke of the concern, which will be shared by hon. Members on both sides of the House, about the need to get value for public money. The right hon. Member for Ashton-under-Lyne (Mr. Sheldon), when referring to the Wardale report, spoke about some of the problems that have bedevilled the PSA, and he suggested some remedies that might be applied.
    The hon. Member for Hornsey and Wood Green, who put his remarks under three headings, referred to civil accommodation services, acquisitions and new works. I shall deal with new works later, but I should underline at the outset that the Select Committees, acting as watchdogs have been most valuable in putting forward suggestions and remedies.
    They have demonstrated that the Estimates which were submitted to the Environment Committee were a farrago of errors and deceit and that, without the Committee's careful scrutiny, the figures would have slipped through unchallenged. I am glad, therefore, that a proper assessment of the schemes was made, and I hope that, as a result of this debate and a possible reduction of £20 million in the funds made available to the PSA, change will be stimulated in the way in which that body is organised.
    I shall mention now the two reports that are before the House, beginning with the report of the Committee of Public Accounts, which looked at the Wardale report and at fraud in the PSA. There are many theories in politics about the motives. There are some who talk about the cock-up theory and others who talk about the conspiracy theory. It is clear that the corruption theory also has a part to play when one considers the way in which the PSA has been operating. Sir Geoffrey Wardale's report is a formidable indictment of the PSA, and I shall refer briefly to some of the comments that appear in it. Those who read the report of this debate should be aware of the gravity of the situation.
    Paragraph 5 deals with the extent of fraud in the PSA. Sir Geoffrey
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    "emphasised his view that known cases represented only the tip of the iceberg; and PSA accepted that the full extent of fraud could never be known and that they could not be confident that no major frauds were still going on."
    That is a matter of major public concern. It seems that what has been discovered so far is only a small fraction of the corruption that Sir Geoffrey Wardale believes is taking place in the PSA; that it extends a great deal further, and that much of it has yet to be uncovered.
    In paragraph 7, Sir Geoffrey talks about the remedies that are open to the PSA arid to the House. He says:
    "dishonesty should normally entail dismissal for staff and loss of orders for contractors".
    In paragraph 8 he reports that nearly 200 staff have been disciplined for irregularities. It appears that 66 members of staff have been dismissed — 21 in 1983. I ask the Minister to tell us rather more about those cases. Can he say in which schemes those staff were involved, what action was taken against those who were not dismissed, and whether he will consider further the way in which we deal with those who have their fingers in the till? The action that has been taken so far has not been effective enough to ensure that the problem is tackled adequately.
    Paragraph 11, which deals with delays, states:
    "We were also concerned about delays in taking action against dishonest contractors, and about the adequacy of the action itself."
    This is also a matter of great concern. If this really is only the tip of the iceberg and if there is much greater corruption in the PSA, why have there been delays? What are the Minister and the Government doing to ensure that there are no delays in future?
    Paragraph 12 of this excellent report, which directs itself to the uncommercial attitudes of the PSA, reads:
    "The Wardale team thought that PSA's attitude to contractors was uncommercial, and that firms should not be employed if they could not be relied upon to perform services in accordance with prescribed contractual terms."
    It is clear that some of those who have been running the PSA should not have been put in charge of running a whelk stall. I am worried that people of such low calibre should have been in charge of such vast sums of public money.
    Paragraph 13 deals with the lack of vigour that has been shown in trying to root out the corruption, which the right hon. Member for Ashton-under-Lyne described as an insidious process that undermines the respect and integrity with which public servants are normally regarded. Paragraph 13 states.
    "its lack of vigour in handling them when identified, indicated a degree of complacency which was reflected in its attitude towards dishonesty and fraud."
    That is unacceptable, as is the complacency that is mentioned in paragraph 14, where it is reported that
    "complacent attitudes were deep-rooted, widespread and existed at all levels of PSA management."
    It is clear that complacency and corruption are not confined to the man who simply pushes a wheelbarrow on a building site somewhere in the north of England. It exists at all levels of the PSA. It is an organisation that appears to be riddled with corruption.
    In paragraph 15 the report refers to arrogance and incompetence within the PS A. Sir Geoffrey commented:
    "First, he was concerned and surprised that PSA had rejected his proposal for a form of regional management inspection."
    If it rejected that recommendation, what is the Minister doing to ensure that the PSA is made to accept it? The paragraph goes on:
    "The second point concerned the DWOs'"—
    the direct works organisations—

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    "spot checks of transactions … which Sir Geoffrey considered were unsatisfactory in both conception and execution."
    What is being done to change that system?
    I refer the House to paragraph 19, which states:
    "It is plainly useless for PSA to set great store by checks which do not meet the proper objectives or are not carried out consistently well."
    In other words, the PSA has indulged in self-delusion about the solutions which it has introduced to try to tackle the problems. The solutions have clearly been inadequate. I should like to know what action the Minister is taking.
    In paragraph 21 the strongest possible indictment is levelled at the PSA. The report states:
    "Our enquiries have confirmed that an unsatisfactory state of affairs still exists in PSA. The very serious frauds which have come to light in recent years would be cause for concern in any organisation, but they are intolerable in a government department."
    Paragraph 23 adds:
    "we are not convinced that PSA's detailed proposals for action are sufficient."
    In other words, nothing has changed. It seems that everyone is at it. What someone cannot carry away, he drags behind him. It is clear that some members of the PSA would sell their own grandmothers. The place is riddled with incompetence, corruption, lethargy and laziness, and it is apparent that there is total disregard for the protection of public funds. The remedies that the PSA is considering introducing are entirely inadequate.
    I shall address the second part of my remarks to the evidence of the Select Committee on the Environment. I refer the House to page 11 of the evidence. Hon. Members will observe that when the witnesses from the PSA appeared before the Select Committee, I, along with other Members, questioned them about a number of schemes, but two especially—the Liverpool Crown court and the House of Commons heating scheme. Both projects provided examples of the problems to which I have been alluding. If local government operated in the same way as the PSA, councillors would be called up before the district auditor and surcharged. If local councils behaved in the same way as the PSA, they could expect to have the most punitive measures taken against them, including a considerable measure of rate capping.
    I put it to PSA witnesses that the Liverpool Crown court scheme had increased in cost by about 40 per cent. during the course of its construction and that the costs of the House of Commons heating scheme had increased by about 30 per cent. At page 12 of the evidence one witness from the PSA, Mr. Johnston, said:
    "The Liverpool courts are shown on page 72 at an original estimate of £37 million but a probable expenditure of £52 million."
    That is an extraordinary way to go about accounting. First, it is said that it will cost about £37 million to build the Crown court complex, and then a probable estimate of £52 million is submitted. If the target is not met, it can be covered up by a much greater figure. When it is said later in the evidence that it has cost only £43 million, that is regarded as some sort of triumph, despite the fact that originally the scheme was supposed to cost only £37 million. It is revealed that supply services — for example, furnishing and the like—were not included in the original estimates, but were included in the final figure, and that an adjustment to the contract had to be
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    made. Why are furnishings not included in the cost of a building? The idea of building a shell without including furnishings strikes me as crazy.
    I put it to Mr. Johnston, in question 48, that the cost of the Crown court started at £37 million and that the figure is now £43 million. I asked him whether that looked like being the final figure, and he replied:
    "The final figure is a firm one because we have agreed the final bill with the contractor."
    I was unhappy about the evidence that was given on the Liverpool Crown court and later on the Palace of Westminster heating modernisation scheme. I pressed for further information. The information appears on pages 40 and 41 in annexes B and C. Some new figures emerge in the cost of the Liverpool Crown court. The original estimate of the project in 1976 now appears as £21·5 million, not £37 million. Annex B lists how the increase occurred. There was a variation of price payments of £14·8 million—that sounds like confetti money. Next, the cost of fitted furniture had to be added to the bill, at a cost of more than £900,000.
    Justice is no better dispensed because of palatial surroundings. A figure of £900,000 to provide something along the lines of the Savoy lounge is totally unnecessary. The Crown court complex, which I visited, is a fine building, but it should not have cost as much as it has. If the original estimate was £21 million, why did it increase to £37 million, then to £43 million and eventually to £52 million?
    The story does not end even there, because paragraph 5 of annex B, giving the Supply Estimates figures, shows that the original estimate of £37 million and the current estimate of £52 million were both to increase further. Paragraph 6 states that there was a revised version because of the pressures placed on the PSA to do its sums again. I suspect that someone in the PSA should learn how to add up, or perhaps a calculator should be bought. The new final revised version of the original estimate was £50·3 million, and the revised version of the current estimate was £57·5 million. Having begun at £21·5 million in 1976, the final jackpot figure was £57·5 million—an increase of £36 million, or nearly three times as much as the original estimate.
    We can compare that with what would happen in local government. As most people know, during the past few weeks the Liverpool city council has been in conflict with the Government about the £30 million additional rate support grant for which it asked. Contrast that £30 million with the £36 million required to make up the difference between the original estimate for the Crown court project and the final estimate. The cavalier approach adopted by the PSA, whereby it treats money as though it were confetti, and zip go the millions, smacks more of squandermania than of any logical system of accounting. We began with a steamer and ended up with a Queen Mary.
    The same is true when we note the information in annex C about the Palace of Westminster heating system. Some might say that there is sufficient hot air in the building without improving the heating system. In 1978, the original cost of the modernisation project was put at £2·5 million. Paragraph 2 includes a figure for inflation—that is reasonable—and a figure of £850,000 for under-estimation and other causes. No one has given any indication of what those other causes and under-estimation are. Yet they involve a considerable sum. The final figures

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    are cited in paragraph 4. The first version of the original estimate is shown as £4·5 million and the current estimate is £5·8 million. The final revised version gives figures of £5·03 million for the original estimate and £6·7 million for the current estimate—an increase of 33 per cent. That is outrageous. We are throwing money around like a man with three arms. The PSA seems to have no idea how these figures have been arrived at. The evidence of witnesses was hopelessly inadequate. The Committee Chairman, the hon. Member for Hornsey and Wood Green, put it like this:
    "If you wanted to set out to confuse everybody as to what you were up to, you could not have gone about it in a better way."
    So say all of us. The hon. Member for Chipping Barnet was right when he described those figures as sheer "gobbledegook".
    That is not an adequate way to run our affairs or a proper way to deal with large sums of public money. The people who have been running the PSA should be dismissed. The Government should do that immediately. It is clear from the two reports we are considering that all is not right in the PSA. First, we have heard charge after charge of corruption. Secondly, we have heard charge after charge of sheer incompetence. That is why my name is added to this motion and why my right hon. and hon. Friends will support the motion to deduct £20 million from the Vote. I hope that the Government will act to ensure that a proper performance review and financial control mechanism are developed to ensure that money is not frittered away or wasted and I hope that they will implement the excellent recommendations of the Wardale report.
    8.45 pm
    Mr. Richard Alexander: I add my support to the remarks of my hon. Friend the Member for Hornsey and Wood Green (Sir H. Rossi). I am a signatory to the motion that stands in his name. The discretionary limit of expenditure on what we call client departments of the PSA can now be doubled. I agree with my hon. Friend that that is a small figure of only £1,000. I should like to underline what my hon. Friend said about the conditions under which many of our DHSS officers have to live and operate.
    A few months ago, I visited the DHSS office in my constituency. The hard part of winter was just over, and I was appalled at the grim, tight, cramped, dingy conditions in which our civil servants must work. Sometimes I think that we under-estimate what we ask of our civil servants. I was especially appalled that during working hours male and female officers had to use an outside loo. I do not believe anyone in private business would be allowed to oblige their female and male staff to trudge through the snow to a brick loo. Admittedly, that loo is attached to the building, but it is outside the main building. Frankly, that is disgraceful. I support my hon. Friend the Member for Hornsey and Wood Green when he said that the appearance and atmosphere of some of our DHSS offices are deplorable.
    Mr. Chapman: Does my hon. Friend recognise the fact that, if a private employer offered those inadequate facilities to his employees, he would be in contravention of the Offices, Shops and Railways Premises Act 1963?
    Mr. Alexander: I am obliged to my hon. Friend. Had he allowed me to pursue my speech, I would have made that point. He has properly underlined that aspect.
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    The Select Committee was unhappy with the PSA's evidence and these Estimates. We had an unhappy afternoon, as I believe all hon. Members who served on the Committee would agree. Despite all the expertise at its command, the PSA had failed to notice certain enormous discrepancies. I shall repeat the figures, although I know that my hon. Friend the Member for Hornsey and Wood Green cited them. The figures are startling.
    Liverpool Crown court will cost 40 per cent. above estimate, the Palace of Westminster heating modernisation 30 per cent. above estimate, the Park Lane fourth special hospital 65 per cent. above estimate and Wymott prison 45 per cent. above estimate.
    If the Select Committee had not raised the matter no one at PSA would have bothered to check whether the figures being put out were correct. Indeed, when the Select Committee checked, the figures turned out to be wrong. In other words, the arithmetic was apparently not checked by the PSA and when it was checked by someone else it turned out to be wrong. One is bound to ask whether PSA figures are checked before they come out. If they were properly checked, the major discrepancies identified by the Committee could not have occurred. If it turns out that the figures are indeed checked within the PSA, I strongly recommend that the gentleman or lady concerned be transferred to a less expensive occupation.
    Equally, one is bound to ask whether anyone at the Treasury checked the figures that the Select Committee discussed that day. The House is entitled to know whether anyone checked those figures. If someone at the Treasury is supposed to have checked those figures, I suggest that that person, too, would be less expensively employed making tea for the rest of his or her professional life. Ten pages of the estimates presented to us contained significant howlers and had to be revised after we had gone through them.
    It was left to a Committee of politicians, assisted by their advisers, to spot instances where professional statisticians and accountants had boobed. That is highly unsatisfactory and gives us little confidence in the accuracy of the remaining estimates. I am in no position to make such allegations stick, but I must say that I regard the remaining figures with little confidence and I concur with all that my hon. Friend the Chairman of the Select Committee has said about the unhappy experience that we had in going through these highly unsatisfactory figures.
    8.52 pm
    Mr. Tam Dalyell: Those of us who are not on Select Committees owe a debt of gratitude to colleagues on both sides who carry out that work. Having served for five years under three Chairmen of the Public Accounts Committee — Lord Wilson, Lord Houghton and Lord Boyd-Carpenter — I know how much work, often unsung, is carried out by such Members.
    As my right hon. Friend the Member for Cardiff, South and Penarth (Mr. Callaghan) used to say, "Chacun à son goŭt," but my experience of the PSA in Scotland has been of very efficient people apparently doing a good management job. In the light of what has been said by some colleagues, I wish to make it clear that my experience as a constituency Member in Scotland has been very favourable to the PSA. In this context, I draw attention to question 2179, in which Sir Geoffrey Wardale said:

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    "It showed itself in people's attitudes almost without them knowing it. Although I would not like to give you the impression that everyone was tarred with the same brush, because of course there were people in the organisation we saw who were doing a good and efficient management job".
    I seem to have come across just such people and I should not like the message to go out from the House that everyone in PSA is tarred with the brush of inefficiency, let alone corruption. Some of us have very good experiences of the PSA and have found the people working there helpful and efficient.
    That being so, if I ask the Minister about certain aspects of the PSA's work I am not suggesting that there has been inefficiency, corruption or slapdash attitudes of any kind. Nevertheless, I am concerned about the estimates for certain projects.
    The first is a matter on which I have approached the Minister before in written questions. To what extent is the PSA and British money involved in the construction of a £26 million hospital at Lakenheath in Suffolk? I attended a political meeting at Bury St. Edmunds last week and was taken to Lakenheath. The Bury St. Edmunds Labour party was convinced that the hospital, which will be mostly underground, would cost £26 million and was to be constructed by the PSA. Perhaps the Minister can tell us more about this. Exactly what are the terms of the contract under which, rightly or wrongly, justifiably or not, this work is carried out for the Americans? Does the PSA take a percentage profit? How much of the cost of that hospital is borne by the British taxpayer and how much by the American Government? I do not think that the Minister is being deliberately evasive. Reticence about projects for the Americans seems to be standard practice and the Labour Government, too, were unwilling to reveal figures. Nevertheless, we are entitled to know how much the British taxpayer is paying for the hospital at Lakenheath. Will the Minister give us that figure?
    Secondly — again I do not allege incompetence — I should like to know more about the PSA's role in the building of the airport in the Falkland Islands known in common parlance as the Margaret Thatcher international airport. Is the £215 million estimate to be adhered to? What is the truth about the 6,600 tonnes of aggregate and rock mined near Bristol and Oxford which have had to be taken from the northern hemisphere to the southern hemisphere because the tillite and quartzite mined in the Falklands was too full of impurities, clay and sand having integrated themselves to such an extent that the apron would not be smooth and Tristars would not be able to land? Was the PSA in any way responsible for the original information given to the Laing Amey Mowlem consortium that the rock and aggregate to be found in the Falklands would not be suitable? What tests were done? What extra costs—
    Mr. Deputy Speaker (Mr. Harold Walker): Order. I am sorry to interrupt the hon. Gentleman, but it is difficult to see anything in the motion which would cover the matter that he now raises. If he can tell us under which subhead it arises, that would be most helpful.
    Mr. Dalyell: I thought that we were talking about the PAC's systems of financial control. That is also highly relevant to the next topic on which I wish to ask the Minister questions.
    Mr. Deputy Speaker: Order. The motion before the House relates to Class XIV, Votes 1 and 2 of the Estimates.
    Mr. Dalyell: Are we not discussing the general issue of the financial control of PSA projects, because in that case it is highly relevant to ask how——
    Mr. Deputy Speaker: Order. We are not discussing a general question but the motion on the Order Paper and I am finding it extremely difficult to relate the point that the hon. Gentleman is making to the motion.
    Mr. Jack Straw: On a point of order, Mr. Deputy Speaker. Perhaps I might offer some advice. Page 5400 of the Order Paper makes it clear that we are also discussing the reports of the Environment Select Committeee and of the Committe of Public Accounts. Therefore, the discussion necessarily goes wider than the relevant Votes. My hon. Friend seemed to me to be discussing financial control in the context of those reports.
    Mr. Deputy Speaker: If the hon. Gentleman draws to my attention the parts of those reports which refer to the matters that he is discussing, I shall accept that he is in order, but I find it difficult to find such references.
    Mr. Dalyell: I thought that we were discussing the general issue of financial control. However, I promised the right hon. Member for Worthing (Mr. Higgins) that I should sit down at 9 pm. I think that it is in order for me to ask the Minister how the £133,000 Brewster houses have got to such an expense and how it is that 26 of them are still unoccupied. Surely that is a matter of financial control. What is the PSA's reaction to the situation imposed by the dock strike and the fact that supplies in the form of the Orepesa, which is shortly to leave Avonmouth, are not likely to get through? Will that create problems for the PSA? I could go into the issue of the squalid conditions but I shall merely ask, is the PSA in any way involved in the allegations of the squalid conditions in the building of that airport and in the condition of Ascension Island? I gave my word to the right hon. Member for Worthing that I should not go over time, so I shall leave it at that.
    9.1 pm
    Mr. Terence Higgins: The hon. Member for Linlithgow (Mr. Dalyell) has done even better than he said and I do not wish to detain the House too long.
    It is worth observing that, at the conclusion of this debate, we shall have completed the first round of Estimates days under the new procedures. In the previous Parliament, we had just one Estimates day when we debated the Stationery Office and investment in the Turks and Caicos Islands. Since the general election, we have had all three debates that were promised to the House by the Government. We had some satisfactory debates on Department of Health and Social Security redundancy arrangements and National Coal Board allowances for subsidence. Only a few days ago we had a further set of debates on prison education and the vexed issue of dog licences, on which at long last we got some action. Whether hon. Members agree that the action was the right one is perhaps a matter for consideration.
    After today's debates on Grenada and the Property Services Agency, it seems that the new system is beginning to run satisfactorily. It reflects what people at school have always been told—that Parliament controls the Executive by controlling the purse strings. Only in the

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    past couple of years have we finally begun to re-exert that historic role. That is important and it is possible only if we have the type of hard work that has been put in by the Select Committees, the reports on which we are debating. My hon. Friend the Member for Hornsey and Wood Green (Sir H. Rossi) and his Committee should be congratulated on their work as the report reveals some important points.
    It should be stressed that it is much easier for Select Committees to pick up what has gone wrong when they scrutinise a Supplementary Estimate as by definition, in those circumstances, something unusual has happened. That is much easier than scrutinising the main Estimates. The items that were brought to the attention of the Liaison Committee show a wide range of interests in the scrutiny of public expenditure arrangements. One of the weaknesses that have emerged following the establishment of the departmentally related Select Committees is the short time that is given to debate reports on the Floor of the House. On financial arrangements, we have a specific allocation of time, albeit only three days. I am glad that Committees such as that chaired by my hon. Friend the Member for Hornsey and Wood Green have taken the opportunity to raise broader issues in the context of financial arrangements. That gives us considerable scope as many of the issues with which Select Committees are concerned involve money.
    I wish to refer briefly and specifically to some of the other points that have been made, because I know that the hon. Member for Blackburn (Mr. Straw) wants to intervene. The reports that we are now considering give considerable cause for concern. As the hon. Member for Linlithgow said, we must not exaggerate the extent to which they give cause for concern, but at least three aspects ought to be considered carefully.
    The report clearly shows that in the presentation of the Estimates there were some simple, straightforward arithmetical errors. That is not satisfactory. Even if the Department could not get its arithmetic right, the Treasury most certainly should have picked up such a mistake. While we are fulfilling our watchdog function as the guardian of the public purse and can point out when such errors need to be corrected, it is not good enough that such errors should occur.
    Until the new procedure was introduced, this kind of thing was not picked up, except in particular cases by the Public Accounts Committee. In that context, it is pleasing that the work of the Departmentally-related Select Committees is becoming satisfactorily integrated with the work of the PAC under the expert and excellent chairmanship of the right hon. Member for Ashton-under-Lyne (Mr. Sheldon). That far from ineffective combination gives us more scope.
    The disadvantage of the usual annual debate on the PAC was always that it was related to a huge range of subjects on which the Committee had done an immense amount of work. However, it was not always possible to pin down and, if necessary, vote on a particular issue.
    The report that we are now discussing contains some interesting statistics. On page V of the third report from the Environment Committee, we are told that maintenance and running costs have increased by 18 per cent. over 1983–84. That is a substantial increase which raises the question of priorities. At present I do not think that we have got right the allocation of priorities between different items of public expenditure.
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    I accept that broad issues are involved, where huge sums of money are allocated to defence, housing and so on. However, on more specific issues we must question why maintenance and running costs have increased 18 per cent. We must look at some of the items of expenditure, where quite substantial sums have been expended by the PSA. Attention has been drawn to a number of those individual items.
    Page VIII of the third report, states:
    "The most noticeable feature is a £41 million increase in general administration expenses. This stems mainly from a … (30 per cent.)"
    increase
    "in consultants' fees and a £4·5 million (31 per cent.) increase in travel and subsistence."
    These are substantial figures against a background in which the House has voted on difficult policy decisions to curtail the provision of NHS spectacles to pensioners at a saving of £14 million. We must therefore consider whether our mechanism for assessing priorities — say, between £41 million for an increase in general administration expenses in the PSA as against a £14 million cut for pensioners' spectacles—is right.
    These broad issues are brought out by the report. However, I wish to comment on a couple of more detailed issues. I refer in particular to the revisions in tables 1 and 2, which were eventually provided by the PSA in the light of the inquiry to which the Select Committee referred. It says:
    "When PSA was scrutinising the initial draft of the 1984–85 Estimates it concluded that some of the proposed provisions in that financial year were too large because the work was not likely to proceed as fast as had previously been forecast. A number of the provisions for 1984–85 were therefore reduced. There should have been a corresponding increase in the amount shown as needing to be spent in later years to finish the work but due to an oversight this adjustment was not made."
    I could read on, but hon. Members have the report in front of them. It is not good enough that the PSA is apparently incapable of getting the figures right and not only comes to the Select Committee in the first instance and gives inadequate evidence, but has to provide a revised Estimate and an explanation of things that should have been put right in the first place. Again, the House is fulfilling an important operation through it watchdog function.
    Finally, I come to the point made by the right hon. Member for Ashton-under-Lyne about the conclusions of the Wardale report, which are important. Paragraph 21 of the report says:
    "Our enquiries have confirmed an unsatisfactory state of affairs still exists in the PSA."
    It goes on to refer to the various frauds. This country has a deserved reputation for having a system of financial accountability unmatched anywhere in the world. I agree with the hon. Member for Liverpool, Mossley Hill (Mr. Alton) that it would be wrong sensationally to exaggerate the points that have rightly been brought to the attention of the House. Unless the House fulfils its proper function, we shall not maintain our standards, and we should do everything possible to ensure that they continue in the future. Therefore, it has been a worthwhile exercise to debate this matter, through the motion tabled by my right hon. Friend the Member for Hornsey and Wood Green. I hope that it will become a permanent and useful feature of our procedures.
    9.12 pm
    Mr. Jack Straw: I commend the speech of the right hon. Member for Worthing (Mr. Higgins). I

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    pay tribute to the hon. Member for Hornsey and Wood Green (Sir H. Rossi) and to my right hon. Friend the Member for Ashton-under-Lyne (Mr. Sheldon), the Chairman of the Public Accounts Committee, and its members. As the right hon. Member for Worthing said, the approval and granting of Supply is central to the proper role of the House. If Parliament is to re-exert its proper authority over the Executive, the machinery for scrutinising and granting Supply has to be improved and made more effective. The attendance and interest shown in these debates by hon. Members on both sides of the House must increase. We are slowly moving towards a re-assertion of Parliament's historic role, and I hope that I am as enthusiastic in support of that move if and when I ever sit on the Treasury Bench as I am now. I hope that if I am not, my words will be held against me.
    Some changes are still needed. In particular, it is high time that the accounting conventions of the Supply Estimates were brought into line with those of the public expenditure survey committee and the national accounts. We have three sets of conventions and therefore three sets of numbers, which makes comparison difficult. I hope that there will come a time when in these debates dealing with specific aspects of Supply, we are able to discuss not only accounting questions but the economic impact of the Supply with which we are concerned.
    For example, through its orders, the PSA has an important impact on the building industry, and through that on the economy as a whole. When its orders are cut, the building industry suffers, as we shall discover tomorrow when the Government announce cuts in capital expenditure on local authorities through the moratorium that they are planning. That will have a serious effect not only on local authorities but on the building industry as a whole.
    Before coming to the main part of my remarks, I shall bring into the debate the question raised by my hon. Friend the Member for Linlithgow (Mr. Dalyell). With respect, we are discussing financial controls on the PSA, which seem to be germane to both of the reports, in relation to the hospital at Lakenheath and to the airport on the Falklands and the amount of aggregates that had to be imported to the Falklands from this country. He wanted to know whether the additional costs had been incurred as a result of the failure of the financial controls that we are discussing here, or as a result of political decisions.
    The PSA is a large organisation by any standards. Any of us who has ever had any dealings with maintenance organisations — I know that the hon. Member for Huntingdon (Mr. Major) and the Under-Secretary, who are adorning the Front Bench, had such dealings when they were councillors in Lambeth, as I did when I was a councillor in Islington—knows that there are problems of management and control inherent in the nature of the work. We need think only of the problems that all of us have when dealing with small builders who provide maintenance in our homes. Some of us have experienced those problems and we can imagine their magnification and the difficulties that are caused. These problems are not confined to the public sector. Every large firm finds that its maintenance operation is difficult to control. It is not a neat and tidy area of paper administration.
    The difficulties inherent in the nature of the work are made more difficult because large sums of money are
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    involved. Transfers take place between the public sector and individuals in the private sector. Some individuals make large sums of money for themselves as a result of these transfers. The opportunities and incentives for corruption are greater than in almost any other area of public service.
    We must also recognise the reality that the culture of the private building industry is one in which a blind eye is turned to financial practices that would be wholly unacceptable in other industries, involving back-handers or "drinks", as I believe they are called in the trade. That leads to tax evasion and petty corruption and, in some cases, corruption on a grand scale is endemic. The PSA has to work against that background. I echo the remarks of many hon. Members this evening, from my not inconsiderable experience, that the majority of staff in the PSA have always acted in the highest traditions of public service and have been efficient and wholly incorruptible. If we are to ensure that the House roots out corruption efficiently we should do so in a way that does not wreck the service and morale of the PSA, that has served the public well for many years.
    There are obvious and serious shortcomings in the administration of the PSA, which are well documented in the reports. That is so particularly at the crucial level of the delivery of the service, at middle management level — the regional and district offices from which the services are delivered. That level forms the interface, as it were, between the public service and private contractors. The opportunity and temptation for petty corruption and inefficiency is at its greatest there.
    I was in a position to observe at least one aspect of the management of the PSA when I acted as adviser to my right hon. Friend the Member for Bethnal Green and Stepney (Mr. Shore) when he was Secretary of State for the Environment in 1976–77. I also worked on the staff of "World in Action" when we made a film of the book by Leslie Chapman, "Your Disobedient Servant". That disaffected former civil servant made serious allegations of inefficiency, rather than corruption, against the PSA, his former employer. From both those standpoints, I believe that the complacency in senior and middle management that was identified by Wardale and the Public Accounts Committee was reflected in the organisation. It is a matter of great regret that, despite the clear allegations and warnings then, the organisation's response was continually defensive, and it has taken the enormous force of these two highly critical reports to enable serious change.
    In the brief time available to me I shall direct a few remarks at this Government, as they specifically bear some responsibility for the PSA's present difficulties. There are criticisms that I could make of the previous Labour Administration, and of the Conservative Administration of which the right hon. Member for Worthing was a member, and of their respective activities between 1970 and 1979. Neither Administration got things exactly right in deciding to hive off the PSA as a separate agency or in the way that they administered it. But both of those Administrations were at least fired by one concern alone—to ensure the most efficient use of resources by an organisation that, by definition, must be in the public sector, as long as there is such a sector.
    However, I am afraid that the same cannot be said about this Government. Their concern for efficiency in the public sector has become mixed up with an ideological

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    vendetta against that sector. Thus their judgment as to what management decisions to take in relation to the PSA has been tainted by their instinctive response to any problem in the public sector, which is to privatise. The result, as I shall explain, has been demoralisation of the service, a reduction in efficiency and, consequently, a climate in which corruption and collusion of the type mentioned could increase.
    There is no better illustration of that than the sorry saga of the appointment and subsequent service and dismissal of Mr. Montague Alfred as chief executive of the PSA. That matter is referred to in some detail in the PAC's report.
    Mr. John Mark Taylor: The hon. Gentleman spoke about the possibility of transferring resources, property and activities from the public to the private sector. He purported to give us a universal rule that in such circumstances staff became demoralised and so began to under-perform. But will he not accept that in the important cases of British Airways and British Telecom the threat of privatisation has worked wonders in making those organisations begin to work extremely efficiently and well?
    Mr. Straw: With your ever-watchful eye on order, Mr. Deputy Speaker, I am sure you would not wish me to extend my remarks to a debate about privatisation. Time will tell whether British Airways will benefit from privatisation and telecommunications will be debated later tonight.
    I am making a specific point about the management decisions made by this Government about the PSA. My criticism of the Government is not that they have judged that it would be sensible to bring in someone from outside but that their Pavlovian reaction is to believe that only people from the private sector have the management skills necessary to run such a large organisation. They thus denigrate the skills of those in that sector with rather disastrous and, indeed, palpable results.
    Mr. Alfred was appointed on 1 January 1982 by the then Secretary of State for the Environment, the present Secretary of State for Defence. A great song and dance was made about it, and it was said that his appointment and salary level, and the arrangements made in relation to that, although exceptional, were — to quote from the deposited paper—
    "considered necessary to attract the right man from the private sector with skills and experience not available within the Civil Service."
    It was an insult to people of Sir Geoffrey Wardale's capability and to his former colleagues to say that they did not have the experience and skill necessary to run the PSA. Although that appointment was made by the former Secretary of State, it was confirmed by the present Secretary of State on 5 October 1983. In a press notice he said:
    "We have appointed a Chief Executive from the private sector who is bringing a new perspective to the Agency's work."
    He can say that again. The new Chief Executive indeed brought a new perspective.
    The Times of 14 March 1984 states:
    "His departure came as no surprise. If you alienate each and every audience you are playing to, your immediate colleagues, the other permanent secretaries, the Cabinet Office, and then the Prime Minister, it is bound to happen".
    Within 15 months Mr. Alfred was summarily sacked by the Secretary of State, who explained his reasons on 13
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    March. Mr. Alfred's departure was directly connected with the questioning of my right hon. Friend the Member for Ashton-under-Lyne and other members of the PAC. It is of importance to the House that it is now possible through the PAC to hold a temporary public servant to account and, in some circumstances, to have his employment terminated.
    He was fired not because he introduced new ideas and reorganised the operation to make it more efficient, but because he seemed to be infected with the complacency of the private sector and his answers conflicted with those given by officials from the Department of the Environment. I hope that his experience and service at the DOE is a lesson to the Prime Minister and the Secretary of State for the Environment that bringing people in from outside—Mr. Alfred had worked for the British Printing Corporation, and, given its record, that should have been warning enough—is not necessarily the best way to get efficiency from the service.
    My right hon. Friend the Member for Ashton-under-Lyne referred to a climate of collusion and an acceptance of corruption. The Government should recognise that they bear responsibility for lowering standards. Mr. Alfred was paid £50,000 a year—£20,000 a year more than if he had been appointed from the Civil Service. Secondly, the payment for Mr. Alfred's services, £50,000 per annum, was not made to him as an individual. The deposited paper states:
    "It is made to a private company, Masa Management Services Limited, who provide Mr. Alfred's services, and are responsible for his superannuation and national insurance provision."
    Value added tax was paid on top of that £50,000.
    The Government were colluding with Mr. Alfred in a mucky, greedy scheme of tax avoidance. A man who was already being paid £50,000 thought to save a few more pounds by setting up a management services company. The Government are supposed to be the keepers of high standards of public service, yet they felt it appropriate to pay him £20,000 more than a civil servant would have been paid and to collude with a scheme which was at best tax avoidance and whose probity could have been questioned by the Inland Revenue. The Government must recognise that, by lowering standards, they have contributed to that climate.
    The hon. Member for Liverpool, Mossley Hill (Mr. Alton) referred to the Government's double standards. I made a similar point in the House last week. There is case after case of ineffeciency for which Ministers are responsible. Had that taken place in local government, and had those Ministers been councillors, they would have been surcharged, disqualified and, in all probability, bankrupted. That would have happened in respect of some of the instances documented in the PAC report and the report of the Select Committee. It would also have been the case in respect of another matter which was the subject of inquiry by the PAC relating to the Hamilton college of education, where it turned out that the Under-Secretary of State for Trade and Industry, who was then a junior Minister in the Scottish Office, wasted about £4 million by his decision to sell that college of education to the private sector at an inopportune moment. If he had been a councillor, he would have been hounded by Ministers, surcharged and disqualified. ft is time that the Government adopted a single standard for financial probity.
    My last point picks up the general issue of ministerial accountability and whether, after 12 years, the experiment

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    of hiving off the PSA into the demi-monde of not being a separate corporation with relatively clear lines of communication but not the responsibility of one Ministry, has been a success. I doubt it. I believe that it was sensible to establish the PSA as a separate trading fund and that because of the nature of the PSA's work it should continue. I make no criticism of the Under-Secretary. By having the PSA as a separate agency, but not a separate national corporation—it could not be that—we have the worst of all possible worlds. The Secretary of State is responsible for it, but he is also responsible for a vast Department.
    If the experience of the past five years is anything like the five years of the previous Labour Government that I watched, the truth is that no Secretary of State, however hard-working, will be able to devote his full energies and attention to the PSA. He will be happiest when it is causing no ripples. Whoever he is, his political career will be dependent upon much bigger political issues — what happens in local government, housing and planning — than what happens in the PSA. As a result, day-to-day responsibility for the PSA is delegated to an Under-Secretary who, however good, has other responsibilities and is not identified as the Minister whose reputation stands or falls with the reputation of that agency.
    I believe that we should reconsider appointing a Minister responsible for the PSA, with the PSA as a separate Department. It would entail no internal reorganisation of the PSA. If it is said that would make the Department too small, I remind the Secretary of State that there are other examples — the Office of Arts and Libraries — where small Departments have separate Ministers, and that greatly enhances accountability to the House. The debate is devoted to improving the accountability of the agency to the House and, through it, to the country.
    9.33 pm
    The Parliamentary Under-Secretary of State for the Environment (Sir George Young): This debate has arisen from the Environment Committee report on the PSA's 1984–85 Estimates. I intend, therefore, to deal first with the comments and recommendations in the report, concentrating upon the points that I know caused anxiety to members of the Committee and those hon. Members who have spoken this evening. In particular, I should like to mention the presentation of the new works programme and how we shall do that more comprehensibly. I hope to reassure the House of the PSA's ability to spend this year's provision. If I can do that, I hope to be able to persuade the House that we can spend the £20 million in question.
    I will also, of course, deal as best I can with the PAC report on fraud in the PSA and the Wardale report, and outline the action Ministers and senior staff are taking to bring about the change of attitude and the tighter management control of the PSA which is needed. As the PAC report was published only last Thursday, this will be an initial response. I hope to deal in writing with some of the questions that were raised during the debate if I do not have time to deal with them in my remarks.
    The Environment Committee took evidence on a number of aspects of the PSA's expenditure, and I very much welcome the interest that it has shown under the chairmanship of my hon. Friend the Member for Hornsey
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    and Wood Green (Sir H. Rossi), and its willingness to look into the details of the PSA's work and the effort that it has put into the examination of witnesses, its report, and its helpful recommendations.
    I deal first with the level of expenditure on maintenance. As PSA witnesses told the Committee, the Government are concerned about the low level of maintenance spending on the civil estate. This is the familiar problem of constraints on public expenditure which has been with us for many years, starting in December 1976, when I believe the hon. Member for Blackburn (Mr. Straw) was helping the Department, and, indeed, mentioned in two White Papers published by the last Labour Government.
    Fortunately, when the Government reviewed their public expenditure plans last year, they were able to allocate extra money for maintenance amounting to about £18 million in 1984–85, with slightly higher amounts in subsequent years.
    However, we have not been able to get back to the level of spending that we would like to see, and I acknowledge that there is a big problem still to be tackled of the backlog of work which has been building up over the years. But at least a start has now been made. In the expectation that we can continue to make progress on this front, the PSA is developing a three-year forward look at maintenance requirements, the first version of which was produced early this year and quoted to the Committee. This will be further refined to incorporate the work that the PSA is doing to set priorities, which my hon. Friend the Member for Hornsey and Wood Green rightly mentioned, and to measure standards.
    Dealing next with the client departments role, which several hon. Members mentioned, we made a significant change in financial responsibilities in 1983–84, by asking the PSA to charge other Departments for their occupation of the civil estate. As part of this, they were given complete responsibility for small routine works which they now order themselves on local contractors instead of going through the PSA. This arrangement covers works costing less than £1,000—about a quarter of all the spending on maintenance work on the PSA's civil estate. The reason why we have stopped at this level for the moment is that, whilst it is relatively easy to get a simple quotation from a builder and place an order for a small job without bureaucracy and documentation, this ceases to be the case as the jobs get bigger and more time and effort and technical expertise is required to handle them. However, I note that the Committee has proposed that client departments should have more power to decide what work should be done in local offices. We have already doubled the powers of Departments since 1983–84; this was increased to £1,000 in April this year.
    We are also studying other ways in which the system might be developed in the light of experience. I can tell the House that we will certainly be looking at the idea of increasing the role of client Departments in a way which would allow them to decide how much of their own money should be spent on improving conditions in local offices. As a former DHSS Minister, I end on what my hon. Friend the Member for Hornsey and Wood Green said about the conditions of some local offices. We will look at this when we assess our priorities for next year.
    I would like, before considering the actual expenditure provisions in the Estimates, to deal with the details of individual projects shown in the tables attached to the

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    Estimates. Until 1983–84, these tables merely showed how the total provision was broken down between the major new construction projects and other works concerned, together with figures for past and future expenditure at difference prices.
    Obviously there is a need to monitor the handling of these projects, and in particular to direct scrutiny to any increases in their cost which occur during their life. In 1983–84, following investigations by the Procedure (Finance) Committee, the Estimates tables were altered so that the Select Committees dealing with particular Departments, in our case the Environment Committee, could scrutinise the projects. The tables now show both the original estimated cost of projects and past, current and future expenditure, all at current Estimate prices, the objective being to show the real changes in cost of projects by putting out the figures on a common price basis.
    As has been said in the debate, I am afraid that the PSA did not manage to get the new procedure off the ground satisfactorily, and I deeply regret the fact that, as a result, the figures printed were confusing and severely handicapped and retarded the work of the Committee in examining the Estimates. The basic problem lay in the treatment of inflation.
    The PSA's method of correcting for price changes since the original estimate of cost was prepared — based on changes in tender prices—gave a substantially different answer in practice from the method used to bring past expenditure on projects up to Estimates prices, which was an essential part of establishing the current estimate of cost at this price basis. The comparisons in the original Estimates tables were, therefore, defective.
    I do not want to take the House through the technical details of the revaluation, particularly as the figures were also affected by some other distortions that crept into the process. They have been set out by the agency in a note which is reproduced as an appendix to the Environment Committee's report supplementing the oral evidence given to the Committee on 14 May.
    The officials concerned have already offered their apologies, to which I add my own, for the fact that the figures originally put before Parliament were unsatisfactory. I hope that we have now put it right and will not have that difficulty again.
    I should, however, stress, since this is important for what is said about the Vote as a whole, that these problems related to the comparison between original and current estimates of total cost and not to the forecasts of what will be spent in 1984–85. Indeed, as was explained to the Committee, one of the sources of the misleading totals was action taken by PSA to reduce the 1984–85 figures to fully realistic levels before the Estimates were presented to Parliament.
    We are considering with the Treasury the scope for improving the information shown in the tables. However, since it follows a standard format for such tables across all Departments' Estimates, and it would in any case be difficult to give in these tables enough information to provide a complete analysis of changes in cost, it may be more satisfactory to supply the Committee instead with a supplementary note. We are anxious to be as helpful as possible on this score and to make the Committee's task of looking at the Estimates as easy as we can and, with that in mind, we suggested to the Committee that PSA officials should explore this suggestion with their advisers.
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    I understand that those discussions will start this Thursday, and I assure the House that I shall take a close personal interest in them.
    The Committee recommended that the 1984–85 provision should be reduced by £20 million in respect of major new works, because it did not believe that expenditure on them could rise to £172 million in that year, in large part because this would represent a 50 per cent. increase on the outturn in 1983–84. Of course, a Government committed to reducing public expenditure have to take extremely seriously the suggestion by Environment Committee that £20 million might be deducted from estimates.
    Let me explain what the £172 million is spent on. Broadly speaking, £62 million is for offices and general accommodation suitable for a miscellany of Government Departments; the balance of £110 million is to meet the specialised requirements of a variety of civil departments, listed in the Estimates.
    The first claim on the funds is to allow completion or continuation of work already started. Of the £172 million, £152 million is for projects that are in progress. Hon. Members will have seen for themselves the work that is going on at Richmond terrace and in Broad Sanctuary for the international conference centre. The balance of £20 million is for projects that are due to start in the rest of the year. The implications of a £20 million cut are therefore clear; no new starts could be accepted for the remainder of this financial year.
    Mr. Chapman: Is not my hon. Friend forgetting that the outturn expenditure last year was almost £20 million less than the forecast? Surely the Committee was making the point that this year's forecast might be an overestimate?
    Sir George Young: I hope to come to that valid point. I have asked my officials for the latest information on spending in the current year to satisfy myself on the point made by my hon. Friend, which is whether the £152 million is still a fully realistic assessment. They have confirmed that it is, and expenditure in the first three months of this year is well over 50 per cent. higher than in the first three months of 1983–84.
    Faced with the reduction that is suggested, I should have no option but to place no more new contracts. The consequences of such a decision would be grave. For example, the programme to computerise PAYE, which the Government expect will bring major savings in the administration of taxation, would have to be deferred. Two computer centres and one training centre, which are due to start later this year, would have to be put off.
    The court building programme for the Lord Chancellor's department would be delayed. Twelve new projects to provide 53 courtrooms are due to start in the remainder of the current year, but they would be postponed and the backlog of outstanding cases for trial, and difficult working conditions for all involved, would continue to arise.
    The prison building programme would be affected. My right hon. and learned Friend the Home Secretary has declared the Government's intention of starting two new prisons a year. A cut of £20 million on the major works subhead would mean that Garth and Swaleside prison—due to start this year—would have to be deferred.

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    Overcrowding in existing prisons, from which prison officers suffer as much as prisoners, would thus be perpetuated.
    That illustrates the effects on the main programmes, but there are many individual schemes of importance to the efficient operation of government that would also be affected. Many rationalisation measures included in the new starts would bring savings in the operation of the civil estate as a whole. All that would, of course, have a damaging effect on the construction industry.
    In practice, it is doubtful if it would be safe to rely entirely on abandoning all the new starts as a small increase in spending on works in progress due, for example, to contractors making faster progress than expected, would then jeopardise the cash limit. For prudence, it would be desirable in addition to provide some safety margin by slowing down some work in progress. Hon. Members who are familiar with the construction process will know that any attempt to slow down the rate of progress on work where there are existing commitments would lead to claims from contractors that might well outweigh any saving in the present year. I have already mentioned two examples of continuing work, the international conference centre and the Richmond yard project in Whitehall.
    Those, with the major office building in Glasgow to take the Ministry of Defence, require in total £27 million in the current year. Slowing down or stopping any of those would have a very major impact on the Government's programmes. I could not commend any such action to the House.
    In response to what my hon. Friend for Chipping Barnet (Mr. Chapman) said, there are good reasons for believing that the planned spend this year of £172 million is both realistic and attainable. As I have already explained, there is a very high proportion of expenditure on work in progress where the risk of failing to spend is considerably reduced compared with new starts. Secondly, allowance has already been made for some slippage in drawing up the details of the programme. In other words, if every project spent according to the expectations of the project manager, there would be an overspend. Nor should there be any argument about inherent limitations of the PSA capacity. All the works in question are being carried out by private contractors, and many of them are designed by private consultants.
    I direct the attention of the House to the possible wider implications of a cut in this subhead for other elements of the Vote—which include maintenance, rents and other services that go towards the provision of accommodation.
    The Committee has rightly recognised the need for more expenditure on maintenance, but a cut in major new works, which could not be fully met from that source, would inevitably mean a cut in maintenance. If, contrary to present expectations, some leeway were to emerge on new works for reasons outside the PSA's control, there would be every reason to direct the balance towards maintenance.
    I hope that my hon. Friend and other hon. Members, having weighed the serious implications that a £20 million cut in provision would have for urgent and important programmes of work, will accept that the PSA should be allowed the money it needs to fulfil its services to
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    Government as a whole. I will be keeping the position under personal review during the remainder of the year in the light of monthly reports on the progress of expenditure.
    Finally, on the report of the Environment Committee, I come to the PSA's administration costs, mentioned by my right hon. Friend the Member for Worthing (Mr. Higgins). The Committee's report draws attention to the design staff savings of 39 per cent. made since 1979, and to the fact that we are moving from a position where only one third of the major new works designs was done by consultants to one where the proportion has increased to about 50 per cent. already and will approach two thirds. The report very properly asks that an assessment be made of the relative costs of design methods, and I can say that the need to monitor these costs on a continuing basis is accepted, as is the need to ensure that the agency's practice is managed in the most economic way.
    Studies have been made of relative costs in past years, and the report of a working party on design costs was placed in the Library in July 1983. Naturally, we now have to assess what they will be in future at a time when there are considerable changes in circumstances in prospect, including the abandonment by the consultants of mandatory fee scales. It is also essential to ensure that the quality of work done is reflected in the assessment and not just its price, and the PSA practice in choosing between consultants will be based on getting the best overall results.
    The Environment Committee's examination was the first it has made of the PSA's Estimates, and I am afraid that the difficulty over the tables, for which I have accepted entire responsibility, has meant that it was rather heavy going. I hope, however, that this will be the beginning of a more fruitful relationship in the future, and I assure the House that the PSA, for its part, will work towards that end.
    In coming to the PAC report on fraud, I endorse what the hon. Member for Blackburn said in commending the work of his right hon. Friend the Member for Ashton-under-Lyne (Mr. Sheldon) and his Committee on the report that is before us. We shall be studying carefully all 12 recommendations and will be putting in a full reply in a Treasury minute this autumn. Ministers are determined to see that the highest possible standards of conduct of our staff, and fair dealings by our suppliers, are enforced.
    Indeed, the PAC report welcomes the assurances which we have given that we need to root out corruption and that pressing forward action on the Wardale recommendations is a top priority task. I reaffirm that that remains the policy and intention of all three DOE Ministers who look after the PSA, and of the top PSA management.
    As part of our actions on fraud, not only is every case notified immediately to Ministers, but we have established new procedures for reporting cases of theft, fraud and irregularity, and a central record of all cases involving staff or contractors, or both, has been set up. There is now a single focal point covering industrial and non-industrial staff and contractors.
    The pooling of information will assist higher management to ensure that any developing patterns of irregularity are recognised from the outset, that vigorous and even-handed justice is meted out to offenders — whether staff or contractors, or both — and that the lessons learned from one case are applied throughout the system.

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    In an organisation as large as the PSA — spending over £0·5 billion a year on maintenance — with a widespread and complex net of relations with the construction industry, irregularity can take many forms. The cases which we put to Sir Geoffrey Wardale—the PSA commissioned the Wardale report, and then published it; there are few organisations which would do that—and on which the PAC has reported, pinpointed certain danger areas, for example, awarding jobbing contracts with personal interests in mind, the authorisation of the payment of bills to jobbers by the person who ordered the work in the first place without any check by a second person, and the payment of bills on measured term contracts without proper measurement of the work.
    We have taken specific action in these and similar cases — for example, making it clear that patronage of any sort will not be tolerated, requiring second signatures for the authorisation of payment in jobbing cases and instituting better arrangements for checking measurement on measured term contracts. But the most effective way in which we can ensure that we stop irregularities from taking place, or catch them when they do, is, first, by having keen and effective managers operating sensible and tight procedures; secondly, by being tough with any contracor or consultant who tries to defraud us in any way; and thirdly, by disciplining severely any of our staff who are implicated in them.
    Mr. Eddie Loyden: If there is to be a reduction in so-called bureaucracy, how will the degree of control necessary to eliminate the practices which the Minister has outlined take place if there is not control of a bureaucratic nature?
    Sir George Young: The hon. Gentleman makes a valid point. When it comes to the integrity of the public service, we cannot afford the sort of economies that might be accepted in the private sector. My right hon. Friend has made it clear that we are prepared to pay costs which would not be accepted in the private sector so as to set higher standards in the public sector.
    Not only will the actions I have outlined help us control irregularities, but they tie in with the wider sphere of the Wardale recommendations which cover financial controls and value for money recommendations generally. From this point of view, they link in closely with the National Audit Office report on building maintenance, which was considered by the PAC on 21 May and on which it will, no doubt, soon be reporting, as it will on other work, particularly the 1982 Rayner study on resource control in district works offices.
    These two reports were concerned basically not with fraud but with getting value for money, and they show, as does Wardale-Touche Ross, that we need to work very hard to get it. The reports show that PSA needs some review of its policies, procedures and management practices affecting the work of the United Kingdom territorial organisation. In some instances changes are needed to make it more difficult for the kind of irregularities that led to the WTR investigation to take place. In other cases they are needed to improve performance generally and to give a better assurance that value for money is being achieved.
    Mr. Alton: Why are the Government treating the PSA differently from the Crown Agents and why has not the
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    hon. Gentleman dealt with the substantive issues that I raised about the Liverpool Crown court and the House of Commons heating scheme?
    Sir George Young: I have no responsibility for the Crown Agents, and I hesitate to intervene in that relationship. To my knowledge the responsibility does not come within the Department of the Environment. The hon. Gentleman must direct his question to the appropriate Minister. I hope to deal with some of the matters that have been raised in the debate and not only those raised by the hon. Gentleman. If I fail to deal with the matters that he raised, I shall write to him. His questions were rather technical ones about two specific contracts.
    We have already done a great deal of work on the reports. For example, 42 of the 62 accepted recommendations of the Rayner report have been implemented. Many of the recommendations that run through all reports—for example, better management information systems, better training and use of staff and better budgeting systems—are taking time to implement and must be co-ordinated so that we can implement them with the resources that we have available.
    The heart of the matter, as many hon. Members have recognised, is to change attitudes and to make it quite clear that certain conduct will not be tolerated. We must restore a pride in the public service, which sets itself the highest standards. We must not confine ourselves to individual changes of systems and procedures. Attitudes can be changed only by personal conviction. It is necessary to convince managers at all levels in the relevant area of work throughout the PSA that the criticism might, and to some degree probably did, apply to them. We are trying to do this by ministerial statements and by personal visits by all the senior staff of the PSA to regional, area and district offices throughout the United Kingdom. It is too early to assess their success but I believe that at least one fundamental criticism of WTR—that management is out of touch with what happens on the ground — is now being answered.
    Mr. Straw rose——
    Sir George Young: With respect, I must try to deal with some of the questions posed by the hon. Gentleman's hon. Friends. I was asked about RAF Lakenheath. I can only confirm that no detailed instructions have been received by the PSA for the design and construction of a new hospital at that station. As for the effect of the dock strike, the closure of Avonmouth could well affect an important and difficult project. The contractor and the PSA are reviewing the procedure.
    The hon. Member for Liverpool, Mossley Hill (Mr. Alton) talked about penalties. I agree that dishonesty should normally entail dismissal as well as any judicial penalties. That is the agency's stated policy and it is being made known to all the staff through a variety of notices dealing with general policy and precepts. It is publicising the disciplinary action that is taken. Regional directors are now required in all cases to report before taking disciplinary action even when the action contemplated falls within their delegated powers.
    I shall conclude by taking up a matter that was raised by the hon. Member for Linlithgow (Mr. Dalyell). In doing so I hope that I shall not be accused of complacency. There are 27,000 staff who work for the PSA and who know that the agency has some fine achievements to its

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    credit. Hon. Members will have seen the stone restoration programme at the Palace of Westminster and I hope will shortly see the ceiling of the House of Lords. I hope that many hon. Members will find time to visit the Cabinet war rooms. In putting right the problems which my right hon. Friend and I acknowledge, I hope that the solid achievements of the PSA, of which it can rightly be proud, will not be forgotten.
    Sir Hugh Rossi: I am grateful to my hon. Friend the Under-Secretary of State for the way in which he ahs responded to the debate, the regrets that he has expressed and the assurances that he has given. Bearing in mind what he has said about the effect that the £20 million will have on new contracts in the construction industry, I beg to ask leave to withdraw the motion.
    Motion by leave, withdrawn.
    It being Ten o'clock, the original Question was deferred, pursuant to paragraph (2)(c) of Standing Order No. 19 (Consideration of Estimates).
    MR. SPEAKER then proceeded to put forthwith the deferred Questions necessary to dispose of the proceedings on Estimates, 1984–85, Class II, Votes 1 and 8 and Class XIV, Votes 1 and 2.

    Class II, Votes 1 and 8
    Resolved,
    That a further sum not exceeding £363,123,000 be granted to Her Majesty out of the Consolidated Fund to defray the charges which will come in course of payment during the year ending on 31st March 1985 for expenditure by the Foreign and Commonwealth Office on Salaries (Subhead A1 of Vote 1), Loans: allocated (Subhead C1 of Vote 8), Grants: allocated (Subhead C2 of Vote 8), and service overseas and regional technical co-operation programmes (Caribbean and Pacific) (Subhead D1(5) of Vote 8).

    Class XIV, Votes 1 and 2
    Resolved,
    That a further sum not exceeding £496,708,000 be granted to Her Majesty out of the Consolidated Fund to defray the charges which will come in course of payment during the year ending on 31st March 1985 for expenditure by the Department of the Environment (Property Services Agency) on maintenance and running costs (Subhead A3 of Vote 1), acquisitions and new works costing over £100,000 (Subhead C1 of Vote 1), and general adminstrative expenses (Subhead A2 of Vote 2).
    MR. SPEAKER then proceeded to put forthwith the Question which he was directed to put pursuant to paragraph (7) of Standing Order No. 19 (Consideration of Estimates).

    Estimates, 1984–85
    Resolved,
    That a further sum not exceeding £49,076,176,000 be granted to Her Majesty out of the Consolidated Fund to complete or defray the charges for the service of the year ending on 31st March 1985, as set out in House of Commons Papers Nos. 292, 293, 294, 470 and 471.
    Bill ordered to be brought in upon the foregoing Resolutions and upon the Resolutions [4 July] relating to Estimates 1984–85 by the Chairman of Ways and Means, the Chancellor of the Exchequer, Mr. Peter Rees, Mr. John Moore, Mr. Barney Hayhoe and Mr. Ian Stewart.

    CONSOLIDATED FUND (APPROPRIATION) (No. 2)
    Mr. John Moore accordingly presented a Bill to apply a sum out of the Consolidation Fund to the service of the year ending on 31 March 1985 to appropriate the supplies granted in this Session of Parliament, and to repeal certain Consolidated Fund and Appropriation Acts: And the same was read the First time; and ordered to be read a Second time tomorrow and to be printed. [Bill 180.]

  Telecommunications
  10.2 pm
  Mr. Harry Ewing: I beg to move,
  That an humble Address be presented to Her Majesty, praying that the Public Telecommunication System Designation (British Telecommunications) Order 1984 (S.I., 1984, No. 855), dated 26th June 1984, a copy of which was laid before this House on 26th June, be annulled.
  Mr. Speaker: With this it will be convenient to discuss also the next motion:
  That an humble Address be presented to Her Majesty, praying that the Public Telecommunication System Designation (Kingston upon Hull) Order 1984 (S.I., 1984, No. 856), dated 26th June 1984, a copy of which was laid before this House on 26th June, be annulled.
  Mr. Ewing: I should make it clear that it is not the Opposition's intention to oppose the statutory instrument relating to the Kingston upon Hull Order 1984. It must be obvious to the Minister of State that the Kingston upon Hull telecommunications system has been in existence for many years. It is a system of which the Opposition, including my hon. Friends who represent Kingston upon Hull constituencies, are especially proud. The Opposition are not critical either of the licence for that system. We do not intend to vote against that statutory instrument.
  We intend—I must make this clear at the outset of this brief debate—to divide the House on the order on the British Telecommunications licence, which was published on 13 July but which comes into operation on 5 August 1984. We wish to record our displeasure at the conditions contained in the licence. The Opposition recognise that it is a different form of licence. If the British Telecommunications unions — the Post Office Engineering Union and the Union of Communication Workers—and my right hon. and hon. Friends had not campaigned so vigorously during the Government's privatisation proposals, there is no doubt—I am sure that the Minister of State in his most generous moods would accept this—that the conditions contained in the British Telecom licence would have been different.
  It is significant that although an opinion poll taken at the beginning of the legislative process on this measure about 18 months ago showed that people were in favour of privatisation — I do not shift from that view — a subsequent poll by the same firm well into the campaign to which I referred showed that pubic opinion had completely changed. Thus, by the time the Telecommunications Act became law, the majority of people in this country opposed privatisation and I believe that the licence reflects that change in public opinion.
  Mr. John Powley: If public opinion has changed so quickly in one direction, does the hon. Gentleman accept that, when privatisation proves successful, public opinion will move equally rapidly in the opposite direction?
  Mr. Ewing: I am not arguing that the change took place quickly. We had the advantage of a general election between the 1982 Bill and the 1983 Bill and about 18 months to argue the case. Public opinion was not changed in a short time but as a result of a lengthy debate about the value of BT as a co-ordinated unit. This debate is not about whether privatisation will be successful, although I should expect Conservative Members to have serious reservations
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  in view of their experience with Enterprise Oil, Wytch Farm, Amersham International and certain other privatisation ventures which could scarcely be described as outstanding successes. I shall be happy to take part in that debate when the time comes, but on this occasion, having made it clear that we do not dispute the entire licence, I wish to concentrate on certain aspects of the BT licence and leave my hon. Friends to deal with other aspects which give cause for concern.
  When we considered the legislation in Committee we were given one assurance after another that the rural services would be protected, but condition 11 of the licence shows that those assurances were not worth the paper that they were written on. We were told that everything would be different and that rural services would be far more secure with privatisation, but we now find that as from 5 August the conditions laid down will allow the closing of up to 5,000 telephone kiosks in rural areas. I cite that figure because the break-even figure for takings is defined as £185 per annum whereas recent evidence shows that for kiosks in rural areas the average take is only about £140. On the Minister's information, it is clear that 5,000 telephone kiosks in rural areas will be affected.
  I do not know how Conservative Members will be able to repeat to their constituents the assurances that they gave during the passage of the Bill, as those assurances are not to be found in the licence. Early in the operation of BT plc, many rural telephone kiosks will be closed. I am not scaremongering; I am merely trying to be factual. I know that the Minister will say that clause 83 of the Telecommunications Act 1984 gives local authorities power to contribute to what are described as uneconomic services. The Secretary of State, who is on his weary walk from the Chamber——
  The Secretary of State for Trade and Industry (Mr. Norman Tebbit): Wrong again.
  Mr. Ewing: The Secretary of State has now taken his proper seat below the Gangway. I am glad to see him go there at long last.
  Hon. Members who write to the Secretary of State or the Minister will be told that they ought to have urged their local authority to contribute to the cost of keeping rural telephone kiosks open. We should bear it in mind that we shall tomorrow discuss the English and Welsh rate support grant supplementary reports, which will seriously restrict the ability of local authorities to spend on anything, let alone telephone kiosks. Only today the Secretary of State for Scotland told Scottish local authorities that he will claw back £94 million from them It is beyond me how local authorities in any part of the United Kingdom are to contribute to keeping open uneconomic but socially essential telephone kiosks.
  The Secretary of State has now assumed the seat of the Chief Whip. He is a man of many guises.
  It is beyond me how local authorities will keep the services open.
  Mr. Tebbit: It is not difficult.
  Mr. Ewing: The Secretary of State should be careful, because he will soon have to sign the letters that close the telephone kiosks. I hope that, in his usual generous way, the Minister will explain how, in Committee, on Report, on Second Reading and on Third Reading he could assure rural communities that their telephone service would be

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  preserved, when the first thing that stands out from the licence like a sore thumb is the fact that 5,000 rural telephone kiosks are almost guaranteed to be closed.
  Mr. A. J. Beith: I agree with the hon. Gentleman's contention that it is impossible to land local authorities with the bill. Will he be careful in his use of the word "uneconomic", as many of the telephone boxes that do not make £180 a year are used widely by people who put only 10p in the box to get someone to ring them back. I refer to travellers and lorry drivers who go around the countryside. The true economic contribution of those telephone boxes is often not recorded in the accounting figures and they might be quite wrongly condemned.
  Mr. Ewing: That is a fair point. I and, I am sure, the House would like the Minister to explain the principle on which BT plc has been instructed to give a 20 per cent. rebate to the Mercury company on the end-user rates. If ever I heard of a direct subsidy being given to a competitor company, that is it.
  The Minister will correct me if I am wrong, but I understand that BT plc is under pressure from the Government to give a 20 per cent. discount to Mercury. That was widely reported in the daily press on Friday 22 June, when Tom Rowland said:
  "Details are emerging of the agreement between BT and the government which helped to break the deadlock in negotiations over the BT licence".
  That article went on to explain the 20 per cent. rebate on end-user rates which has been given to Mercury by BT and said that the 20 per cent. rebate would reduce as Mercury's turnover and profitability increased. If that report is wrong, and if there is no possibility of that happening, the Minister will have to explain the relationship between BT plc and Mercury, specifically in relation to any rebates or discounts which BT plc has been pressurised into giving to Mercury.
  The Minister for Information Technology (Mr. Kenneth Baker): Perhaps I can answer some points as they arise. The terms of interconnect between BT and Mercury have been freely negotiated between those two companies. It took a long series of negotiations, because this is an immensely complicated subject. Those terms were freely negotiated and the companies came to a private agreement which they have signed and initialled. Neither party wishes to make that agreement public, but I should make it absolutely clear that at no time did I or the Government put pressure on BT. The agreement was freely negotiated between two independent operations.
  Mr. Ewing: I am grateful to the Minister. If he is saying that the report from which I quoted is inaccurate and that at no time did the Goverment apply pressure or use any other form of influence on BT plc in its negotiations with Mercury on interconnect rates, I accept what he says. But I do not accept that the details of the negotiations should be kept secret. After all, BT plc will be floated in the not-too-distant future, and the House ought to know the details of that agreement on interconnect rates.
  This is an important aspect of our debate. It will not be acceptable to the House if the Minister says that he does not want to give details and that BT plc and Mercury do not want to reveal them.
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  Under the licence, BT plc is under an obligation to provide Mercury with all the connecting facilities for which it asks. I have heard nothing so ridiculous in my life. A competitor company—Mercury—has been given the right to use the facilities of BT plc. As Bryan Stanley of the Post Office Engineering Union said last week, it is like privatising British Rail and giving a competitor the right to use its track and rolling stock. Although that may seem a ludicrous proposition, that is exactly what we are faced with in telecommunications.
  Operator services directly affect the Union of Communication Workers—I declare my interest as a member of that union. There is great concern that BT plc will continue to apply pressure to be allowed to charge for operator services. It will be an outrage if the company were, for instance, allowed to charge for directory inquiry services. The largest users of that service are usually the blind, those who cannot read telephone directories and those who normally need help to make a telephone call. After all the assurances given by the Minister, it would be an outrage if BT plc were allowed to charge for directory services.
  I hope that the Minister can give the House an absolute assurance on this. We do not want any nonsense, with the Minister saying that the matter is out of his hands, and that BT plc is a private company and makes its own commercial judgment. The Minister and his junior Ministers were quick to give us assurances in Committee that there would not be any charges for the operator services. Kim McKinlay of the Union of Communication Workers, who represents this grade of worker, is concerned that BT plc will eventually be allowed to charge for operator services.
  I have highlighted a few points, and my hon. Friends will highlight others. I hope that I have laid the foundation for opposition to some of the conditions in the licence granted to BT plc. I shall end where I began. I recognise that the licence is different from that which would have appeared had the Opposition and the British Telecom Unions Committee not conducted vigorous opposition to this Bill in Committee. We claim the credit for that; let there be no doubt about it.
  Despite the improvements that we have forced in the licence, there is still sufficient in it to give us concern about the operator services, the rural services and the commercial agreements that have been made between Mercury and BT plc. That will take us into the Lobby tonight to vote against the first order.
  10.22 pm
  Mr. Gerrard Neale: It epitomises the way in which the debates on the Bill have taken place over this Parliament and the last that the hon. Member for Falkirk, East (Mr. Ewing) put his arguments on behalf of his party in a manner lacking in the vindictiveness that we often hear in many other debates. That has meant that the debates on telecommunications have been all the better.
  The hon. Gentleman spoke about the effects of pressure to change from the various unions on my right hon. Friend the Minister for Information Technology. I declare my interest in the industry. It is only fair to say that there has been pressure from a whole range of interests within that industry, as my right hon. Friend will agree, all of which have led to various changes. Despite the fact that my right hon. Friend has been criticised at various stages for not coming to the House with a Bill in a sufficiently finite

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  form, he has shown that he is always ready to listen to constructive points, whether they have come from Labour or Conservative Members, and he has accommodated them wherever possible.
  I still nurse a fundamental misgiving about the way in which we have indulged in the privatisation process. My right hon. Friend knows full well that for a long time I said that we should have had a far clearer policy of separating the supply and attachment end of the market within BT from the network. In leaving it all in one, we have left a large monopolistic enterprise, which we are floating on to the market.
  I am further disturbed, with those in the industry, that there is no express condition in the licence as it stands to set up an arm's length Companies Act company to deal with the supply of business systems. It is fair to say that a range of conditions in the licence refer to its various elements, but there is no set condition that requires it to set up a separate Companies Act licence.
  Condition 17.2 states:
  "The Licensee may be deemed to have shown undue preference … if it unfairly favours to a material extent a business carried on by it … so as to place at a significant competitive disadvantage persons competing with that business."
  In that condition, the words "fairly", "material" and "significant" are all subjective. What might be insignificant to the licensee—in this case BT, with its massive turnover—might be very significant to a small competitor who was trying to enter the market.
  I have a nagging doubt about the continuation of the arrangement. I fear that before very long, in terms of the development of telecommunications, the House will need to reconsider the size and nature of BT within the telecommunications market, with a view to breaking it down still further to a form that is seen in the United States.
  There are two other important points that I should like to make in the time that I have available. They relate to licences.
  The first deals with intellectual property rights. A licence condition of critical importance to the home telecommunications industry relates to the prohibition of certain exclusive dealing arrangements, especially the requirement in condition 31(c). It says that:
  "The Licensee shall not, except with the written consent of the Director make the acquisition … of any telecommunications apparatus … conditional upon agreement … to transfer to the Licensee … any interest in Industrial or Intellectual Property with a view to restricting unreasonably the freedom of the supplier … to exploit his Industrial or Intellectual Property in order to confer on the Licensee … an unfair competitive advantage."
  If that condition were left as it is, many in the private sector of the telecommunication industry would have been desperate. Unfortunately, condition 36.4 lists a number of qualifying circumstances to that condition which tend to nullify it. I am left with the strong belief that the exclusions in 36.4 totally negate the prohibition in paragraph 36.1(c).
  I know that my hon. Friend has received representations on the matter and that he is aware that counsel's opinion has been obtained. They make it clear that the Government's intention in relation to the retention of the ownership of intellectual property rights is safeguarded. I know also that he made attempts, belatedly, before the publication of the licence, to make a further amendment.
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  Even since then, attempts have been made in correspondence to clarify it further. The view remains that BT's position in the case is far too powerful.
  If the Minister makes the point that individual owners of intellectual property rights are safeguarded and if, as I understand it, BT is of the view that they are safeguarded and both believe that they have accommodated the fears of the private sector, surely the Minister should deal with the Director-General of Oftel immediately that he is in post. The Minister should ask him to make an agreed change to the licence to ensure that that doubt does riot continue.
  My other concern relates to BT's right to go into apparatus production. One could make several points about that, but suffice it to say that, although the licence requires the setting up of an arm's length Companies Act company, it still falls short of the sort of protection that the private sector would wish to see. It does not impose any suitable conditions on BT until 1986. Furthermore, there is no mention of making clear what the apportionment of overheads should be between the rest of BT and the production company, and no mention of the restraints on hidden subsidies or the transfer price to supply companies. I must emphasise that all those points should be referred immediately to the Director-General of Oftel.
  I am surprised that the Opposition should pray against the order. I can assume only that Opposition Members are relaxed about it because they know full well that the Government will defeat them tonight in the Lobby. I cannot imagine a worse recipe for the future of BT's union members or for the future of the members of any union in telecommunications than that of further delaying the licence. As my right hon. Friend the Minister knows, major reservations have been expressed by the private sector and by trade unions. However, it would be the worst thing possible for the industry to continue with the present doubt-ridden interregnum.
  I served on the Committee that discussed the Bill in 1980–81. My right hon. Friend the Minister was appointed to his post in the middle of our proceedings on that Bill, having made a speech on Second Reading that I would have been proud to make. I should like to thank him for accommodating various requests for change. I congratulate him on the way that he has dealt with allcomers throughout the Bill's long passage. It certainly made things far easier for those of us who wanted to see competition introduced in its fairest form. I hope that he will continue to apply just as much zest and energy to ensuring that Oftel polices the Act and all the provisions relating to BT and telecommunications as a whole, so that there is no unfair competition and so that his aspirations for the telecommunications environment are achieved.
  10.32 pm
  Mr. John McWilliam: At the outset I should like to declare my interest as a sponsored member of the Post Office Engineering Union. As such, I speak for the other members of the British Telecom Unions Committee as well, which means that I represent tonight 250,000 people who depend for their future on the success of BT. I believe that the Government have put that success seriously at risk.
  At the end of more than 600 hours of debate we are left with the hon. Member for Cornwall, North (Mr. Neale) still complaining about the conditions in the licence and

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  about the fact that the Minister has, as he would say, let loose upon our society a monopolistic monster. I agree with him, but it is the Minister's fault. If he had accepted our advice all those hours ago, he would never have resorted to such a measure. The United States has opted for a system of very detailed statutory controls over private monopolies within the telecommunications system. Like most of the world, we have traditionally opted for our monopoly to be constrained by the state, and therefore directly controlled by the democratic process. The hybrid that the Minister lets loose tonight is neither flesh nor fowl and does not satisfy either side.
  Many hon. Members wish to speak, so I shall briefly outline my main objections—and those of the BTUC—to the licence as it now stands.
  Our first objection is that there is no guarantee that a service will be available at as a fair price to rural users as to users in more urban areas. Secondly, there is no requirement that directory information will remain available free of charge to all customers, especially to disabled customers. The Minister must take that point on board. My hon. Friend the Member for Falkirk, East (Mr. Ewing) made it clear that the closure of many thousands of telephone kiosks will be permitted. It is nonsense for the Minister to say that local government can pay for that. It cannot. His right hon. Friend the Secretary of State for the Environment is making sure of that. British Telecom will be forced to allow rival operators to interconnect with the public network. There is no guarantee that, if they do, the access charges will be levied, and even if they are levied, there is no guarantee that the charges will be at such a level as to enable BT to meet the uneconomic services which it must supply to rural areas.
  The Minister is placing restraints unfairly on the manufacturing role of BT, and I object to that. The formula for regulating BT traffic is seriously defective and needs further consideration. Protection charges for the introduction of certain exchange lines are too weak. Research and development on aids for the disabled is not being ensured, and the detailed, delicate and helpful work which many employees at BT have undertaken voluntarily and free of charge over the years to help the disabled is not underpinned by the licence.
  BT's marketing and promotion operations are to be restricted. The Minister is, in part, helping his hon. Friend the Member for Cornwall, North because "restricted" does not mean impaired entirely. We want to know what that restriction will mean in a practical sense. Will BT be asked regularly to lay off the big boys and to eat up the small fry, or will it be the other way round? It is not clear and we want to know. There is no real commitment within the licence to the universal provision of non-voice services.
  I could continue, but time marches on. We will have spent about 600 hours on the Bill. It is not a geat deal better whan it was when we started. The degree to which it is better is largely due to the activities of my colleagues and of British Telecom Unions Committee, who have pressurised the Minister and others to think carefully about the nonsense that the Government were perpetrating. I urge the House to reject the measure out of hand.
  10.38 pm
  Sir John Farr: I shall speak briefly about the provisions for the granting of the licence, especially in relation to the safeguards which may not be sufficiently strong for those who live in remote areas.
  I spoke in two Second Reading debates—the first one and then the resumed Second Reading. On both occasions I was assured by the Minister that no rural kiosk would be shut where there was a proven need. Moreover, I was told that the cash take by a rural kiosk would stay fairly low and that a director would be in control and ensure that possibly marginal kiosks were not closed on a wholesale basis. With those assurances my hon. Friends and I felt it right to welcome the Bill. Indeed, we fully support all its other provisions.
  However, hon. Members with responsibility for rural areas are a little worried. We do not want an arbitrary limit of, say, a £185 take for a call box below which it is under serious threat.
  The point has been made in the House for years, and ignored consistently by the drafters of the Bill, that one cannot judge the value of a call box solely on the cash intake per annum. I am not just thinking of the great value of call boxes to those who live alone and the elderly and their value for emergency purposes, but there is evidence that many remote kiosks serve as staging posts for long distance lorry drivers. Many long distance hauliers make a practice of calling a driver at a key point at a certain time so that he can receive the latest instructions. There is no record in the annual take of the use of the call box, but it forms a vital and important link.
  I hope that my right hon. Friend is listening because that has been said in the House several times during the past two or three years and has been completely ignored. I should hate to think that it will be ignored again.
  Can my right hon. Friend tell the House whether it is in the Government's intention eventually to draw up guidelines in accordance with which the director should act when considering whether to close a rural kiosk? We are worried about closures in the country. We do not want the future of a kiosk which is a lifeline in a remote hamlet to be subject to the whim of a director in London who is solely going on whatever figure is decided. The director should have the benefit of the best advice, and he should heed it, but guidelines should be laid down as to when a kiosk should remain open. It should be possible for the House to debate and approve such guidelines because the provisions for rural kiosks is the one part of the Act that causes me a great deal of anxiety.
  I wanted to ask my right hon. Friend some questions particularly in relation to condition 24, the restriction on prices for certain services. As the House is aware, it has been agreed that trunk call charges may not increase by more than the RPI minus 3 per cent. before July 1989. We are worried that call box charges have been left out of the basket of services whose prices will be controlled. Those who rely upon the call box services are often the less well-off and they are worried about that.
  The other point that I wish to make involves people who are at the end of their own telephone line, which may be long and remote and which goes through woods and over difficult terrain. At the moment, such people do not pay for the repair of a telephone line if it is carried out in normal working hours. Apparently, that will change under the conditions that we are considering. Condition 23

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  allows BT to charge for the maintenance and repair of a consumer's telephone line. Many people who have such lines, which ar subject to torrential rain and strong winds, are worried that they will be faced with horrifying bills for the damage to their lines unless something is included in the condition which will ensure the averaging of the maintenance costs to all consumers by means of the rental charge.
  I want also to ask about condition 3 in schedule 4. It is the requirement that BT wherever possible should install new lines underground rather than overhead. One would have hoped that condition 11 of the schedule would have contained the suitable minimum depth at which such underground lines are installed for safety reasons.
  While reminding my right hon. Friend again that many of us are concerned about the position of scarce and valuable rural kiosks, I welcome the order.
  10.45 pm
  Mr. Ian Wrigglesworth: I am sure that all hon. Members will share the anxieties that have been expressed by the hon. Member for Harborough (Sir J. Farr) and other hon. Members. I do not want to pursue that debate in the course of my brief remarks.
  The licence before the House is central to the future development of British Telecom and, as that is one of the most important industries for the future of the country, it is in that context that we should predominantly consider it.
  I and my hon. Friends have not regarded the question of ownership of BT as the most important issue in the debate. We consider that liberalisation for the consumer is by far the most important issue for the future. In our view, either one should have retained the public monopoly where it can be properly regulated, or one should have a much fuller and fairer competition than will be the case under the existing regime, as spelt out in the licence. I therefore wish to mention some of the reservations that we have about the terms of the licence, and how the new regime will operate.
  First, while other methods of telecommunications are coming down the track, on the major provision of telecommunications, Mercury will be the only serious competitor to BT in the foreseeable future, and it will have 3 per cent. of the market only, so what we are doing is changing a public monopoly into a private monopoly.
  In a number of areas covered by the licence, the public have good cause to be anxious about how the new system will operate. It is not clear that BT plc will be able to demonstrate that the separation of the systems of supply and production will be adequate and clean enough to prevent predatory pricing. That the BT accounts will not be capable of differentiating between those areas for at least three years shows the dangers facing consumers and potential competitors as a result of that lack of clarity. How can Oftel regulate BT if its accounts for the next three years will not be clear enough to show that there is proper separation of the systems of supply and production? I hope that the Minister will explain that.
  Many parts of the licence depend heavily for effective operation upon Oftel. I and my hon. Friends think that the resources and the qualifications of the people in the Office of Telecommunications are central to whether that office will be able to do its job on behalf of the consumer in order effectively to ensure fair competition. All that we have
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  seen from the Government so far gives little reassurance that Oftel will have adequate resources and a staff sufficiently qualified to do the job properly.
  This task will be made more difficult because of some of the woolly drafting that Oftel will have to interpret in the licence—phrases such as
  "at a significant competitive disadvantage."
  What is significant, and how does one judge that? As to the phrase
  "if it unfairly favours to a material extent",
  who will interpret what that means? Such phrases are unexplained in many parts of the licence. We are not convinced that the Office of Telecommunications will be adequate to the task that it has to carry out on behalf of consumers and in the interests of competitors to BT who wish to compete fairly with it.
  I shall be interested to hear the Minister's justification for the proposed RPI minus 3 per cent. pricing formula. Unless there is proper competition, it is difficult to know what the right price should be, but, in view of the productivity progress in the industry, not only here but in other countries, does the Minister regard the formula as an adequate yardstick by which to judge the operation of BT?
  As a result of the fiasco over the recent sale of Enterprise Oil and its effect on the market, some terrible asset stripping is likely to occur if BT is brought to the market later this year. In the light of that and of the rise in interest rates and its repercussions on the market, I appeal to the Minister to consider delaying the sale of BT, certainly beyond the end of this year, and to consider selling it in smaller tranches than is proposed.
  Whatever methods the Government may adopt for selling BT to subscribers, I am sure that many hon. Members feel that the Government will not obtain a fair price for BT, which has many assets and much experience and has made a tremendous contribution to this country over the years, if it goes to the market at the time the Government propose.
  For those reasons, we shall join other Opposition Members in opposing the licence.
  10.52 pm
  Mr. Richard Shepherd: It is always amusing to see the antics of the SDP as it moves in to take over the position of the many Conservative Members who have tried arduously to persuade my right hon. Friend the Minister for Information Technology to respond to some of our anxieties. The SDP is slowly trying to identify consumers and their interests as its central theme. I am sorry that Conservative Members have not been more rigorous in our defence of that position.
  I shall forgo the usual encomium of the Minister and his assistance on this issue. One can argue that the licence is a substantial improvement on previous intimations, but grave reservations remain. I hope that I shall be forgiven if I refer closely to my notes, because I wish to make a number of points that I think are of value and may influence the game plan that we shall have with BT.
  Under the licence, the success of regulation will depend entirely on the expertise and dedication of the Director General of Telecommunications. For that reason, I wish him well, but it is disturbing Ito note that BT has obtained several changes in wording that release it from, for instance, bearing the burden of proof and place the onus for action on the director.

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  The change is most apparent in condition 18. In the section dealing with prohibition on cross-subsidies, the draft licence provided:
  "The licensee shall, except where the Director agrees otherwise, not transfer capital from monopoly to competitive operations for a consideration which is less than full cost."
  The new licence provides:
  "where it appears to the Director that the licensee is unfairly cross-subsidizing … it shall take such steps as the Director may direct for the purpose of remedying the situation".
  Not only is the standard of unfair cross-subsidy potentially more vague than the previous injunction against transfers at less than full cost, but the licence no longer directly prohibits anti-competitive conduct by BT. Instead, it requires the director to make a finding of cross-subsidy and to direct unspecified remedial steps.
  Condition 39, relating to the potentially anti-competitive use of BT's patent library, is similarly contingent on action by the director. Condition 24, regarding the RPI-X formula places an even more formidable burden on the Director General. If BT adopts a potentially predatory pricing policy by lowering only those "relevant prices" that face competition, the licence immunises BT from any remedial action unless the Director General finds that "undue advantage is being taken" within 28 days. The RPI-X formula has been weakened by the carry-over provision that allows BT to increase prices in excess of the ceiling if it did not take the full allowance of increases in the previous years.
  These provisions reflect a complete inversion of one of the most basic principles of civil procedure—that the person who has exclusive access to the evidence needed to establish a fact in dispute should bear the burden of proof. BT should have the incentive to maintain the records and accounting systems necessary to establish that it is behaving in a proper fashion in avoiding anti-competitive practice.
  When price differences appear among similar services for a particular service among different regions or classes of customers, BT should bear the burden of disproving the prima facie case of discrimination. In that context, it is especially disturbing to note language in the licence that I believe to be meaningless. It attempts to limit even the access of the Director General to information.
  Condition 52.2 provides that BT need not produce information that would not usually be available unless the Director General considers a particular report essential for him to exercise his functions. If competition is to become a reality, the Director General will have to proceed aggressively, have adequate staff and be willing to make findings of undue preference or discrimination where his knowledge is incomplete and BT is unwilling or unable to provide the additional information required.
  The powers of an aggressive Director General are extremely broad, as is best illustrated by condition 17.3 that allows him to make determination of undue preference whenever BT favours an affiliated business
  "So as to place"
  its competitors
  "at a significant competitive advantage."
  Apart from the general authority to prevent anti-competitive behaviour, the licence is short on specific provisions relating to those areas where BT is most capable of achieving an anti-competitive advantage. This lack of specifics illustrates the obvious—that the civil servants
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  and the negotiators for the Government are considerably less knowledgeable about the business than the negotiators for BT.
  There are three areas of conspicuous omission—the right to approve the capitalisation plan, the control of network information flow and the use of customer specific proprietary information. The explanatory notes—this is extraordinary — congratulate the drafters of the new licence on "greatly strengthening" condition 18 in the 25 October draft
  "which failed to deal with capital transfers."
  I refer to the congratulatory note that the Minister's advisers put together.
  Although condition 18.4(c) clarifies that the licence prohibits capital transfusions at below market interest rates, the requirement to document those transfers does not become effective until 1 April 1987, almost three years away. It seems that the rationale is that BT's current book-keeping procedures preclude any accurate attribution of costs. The effect is to provide a strong incentive for BT to capitalise its competitive subsidiaries on a non-compensatory basis without subjecting its initial financing to the approval of the Director General.
  Another issue relates to the use of information about the network by BT's affiliates that produce and supply apparatus. That has been a matter of considerable concern to my hon. Friends. Changes in the network may require modifications to apparatus for transmission facilities, so advanced knowledge of potential alterations would give affiliated manufacturers an anti-competitive advantage. The licence recognises that problem in several places. Condition 21.5 requires BT to publish specifications for equipment it procures, but only at the time of tender.
  Condition 23 requires the disclosure of reasonably anticipated changes to the BT network or its protocols from time to time. Information about changes in the network should be made available for inspection by leading manufacturers at the same time that it is disclosed to the engineers at BT's manufacturing affiliates.
  The licence appears to tolerate a similar preferential flow of customer specific information. The restrictions of condition 38 are aimed exclusively at the problem of disclosure without the prior consent of customers. If information about the telecommunication needs of customers is passed to suppliers affiliated with BT, it should also be made available—on identical terms—to competing suppliers.
  These omissions demonstrate a lack of wisdom in the Government's decision to lay this licence before Parliament on a take-it-or-leave-it basis. The licence requires significant refinement in a number of highly technical areas, and the Secretary of State should take proper account of the parliamentary debate, which is the first real opportunity to understand interests other than those of BT.
  The new licence reflects substantial changes from the draft of 25 October 1983. It seems slightly undemocratic to allow the document to emerge in final form after extended negotiations with BT, from which all other parties including Parliament, were excluded.
  Another basic flaw in the licence is the difficulty in obtaining modifications within its 25-year term. Any modification requires either the consent of BT or the invocation of a cumbersome process involving the Monopolies and Mergers Commission. The purpose of this inflexibility seems to be to maximise the Exchequer's

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  return by assuring the investment community that BT can never be regulated more strictly than the licence currently provides. Moreover, if BT violates the licence, the director has no power to assess penalties other than complete revocation, a sanction that he is never likely to impose.
  The risk to the public interest is obvious. In an area of rapidly changing technology, where the prospects for truly competitive conditions are most uncertain, the requirements of the national economy and the interest of consumers may require significant changes in the way in which BT is regulated. It seems extraordinarily unwise, for example, to provide in condition 24 that all price controls will expire in 1988. It is also disturbing that the Government have attempted to embed in the licence their prohibition of simple resale until July 1989, although resale may prove to be essential to achieve the control of prices through competitive market forces. I am particularly mindful of Mr. Solomons' advice to the Department on the shape of telecommunications through to the next century.
  What should have been in the licence? BT should always bear the burden of proof. It has the information, but the consumer does not know what it is, and that is the real problem. Parliament should have set national telecommunications policy. We should know the answers to certain basic questions which our constituents will ask. For instance, what is the definition of "local versus trunk"? What does "discrimination" mean? The statute does not tell me and the licence tells me only in part. Is it discrimination mile by mile? For instance, if I live in Scotland, where a 100-mile call costs more than the same call in England, can one describe that as discrimination?
  The Director General should have been made to interpret and adjudicate, not to set policy. That is the problem; we have given over the policy options to the Director General. That is highly unsatisfactory and, in my view, unconstitutional. I said that BT should bear the burden of proof. Any pleading before the Director General should be in public, the licence should prescribe BT's behaviour, and it should not be contingent on the Director General taking steps.
  The licence for 25 years is too long, because in five years the price controls run out and we do not know what will happen then. Perhaps there will be no competition within three years. What, then, will happen after five years? A seven-year ban on resale is written into the licence. In five years from now there might be almost no competition. We have an inconsistency in dates. What evidence is there that duopoly acts differently from monopoly?
  I have shortened my comments, but I have tried to put the thrust of my argument as concisely as possible. There are grave doubts about a licence being presented to the House in a fully completed form which we are unable to amend or to discuss in detail. That is unsatisfactory constitutionally and it shows a misunderstanding of how a complex, great industry moves forward and how sometimes one must fine-tune. I deeply regret and resent the fact that we in Parliament have had no real role in determining telecommunications policy. After those remarks, I can only wish the Director General well.
  11.5 pm
  Mr. John Golding: The debate has summed up the general attitude towards the
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  British Telecommunications Bill. Only the Minister for Information Technology will have spoken in support of the Bill and the licence. He will be their sole supporter. Member after Member from the Tory Benches have been most critical of the licence. The Secretary of State showed his interest by walking out of the Chamber. Even the Under-Secretary of State has abandoned the Minister in his hour of need. Why is this? The answer is that the House has come to realise increasingly that privatisation is a flop.
  The privatisation of telecommunications is not in the interests of the consumer, the manufacturing industry or the staff. I am sorry that my hon. Friend the Member for Stoke-on-Trent, Central (Mr. Fisher) could not lend his considerable weight to the condemnation of the selling of BT shares, on which he is an expert. We all know that that sale will be a scandal like all the other privatisation sales, for it will represent the giving away of public assets.
  As Tory Members have said, the licence is a mixed bag. The Opposition will be voting against the principle of privatisation. However, the licence is better from our view, as the hon. Member for Aldridge-Brownhills (Mr. Shepherd) underlined, than the one that was presented to us two years ago. It is better because of the campaigning of the trade unions outside the House and the intense parliamentary opposition within it. There have been changes in the Government's attitude which have brought criticism from Tory Members. The Government have accepted that serious competition will not be in the interests of the development of telecommunications. British Telecom will become almost a private monopoly for outside Hull it will faced only by the irritants of Mercury and cellular radio.
  I know that many Conservative Members dislike that fact. The hon. Members for Aldridge-Brownhills and far Cornwall, North (Mr. Neale) have illustrated the antagonism that they feel. They wanted more competition and the break-up of BT, but they do not have that in the licence. I must congratulate the Minister on facing reality and ensuring that his hon. Friends' wishes have not been met. I would prefer a public monopoly to a private monopoly, but I think that it would have been disastrous for telecommunications had we gone along the road advocated by Conservative Back Bench Members.
  British manufacturers are acting against their own interests in supporting the weakening of BT. It is in their interests to have a strong British telecommunications system. British manufacturers should be concentrating on preventing the excessive telecommunication imports that will be arriving as a result of privatisation rather than trying to undermine the strength of British telecommunications. The licence is far superior, because of what the Opposition have campaigned for in terms of rural areas and the disabled and protection for the vesting subscriber. There are safeguards that would not have been included had we not argued day in, day out, night in, night out. The justification for our intense opposition to the Bill is to be found in an improved licence.
  I promised to finish my speech at 11.10 pm, and I shall keep my word. Much still needs to be done to improve the licence. It is still unsatisfactory—not in its provision of sufficient competition and sufficient 19th century laissez-fair, but in its provision of sufficient safeguards for the weakest people in our society. We shall be voting against the measure.
  11.10 pm
  The Minister for Information Technology (Mr. Kenneth Baker): This debate has been similar to other debates in the long process of this measure passing on to the statute book. When my hon. Friend the Member for Aldridge-Brownhills (Mr. Shepherd) said that he would spare passing his encomium upon me, I thought that that was a self-denying ordinance that he observes at the beginning of our debates, because I did not notice him scattering encomiums upon me.
  My hon. Friend's contribution — I say this with genuine feeling — to the competitive balance in a deregulated telecommunications network has been significant. My hon. Friend has consistently taken a different view from the Government. He has had a considerable impact upon the shape of the licence and the legislation. He may believe that his contribution is not as great as he would have liked, but I pay tribute to him for the fact that his thinking has changed significant parts of the licence and the framework of regulation and has led to greater competition. I have noted what he said tonight. I shall read carefully his points, and I am sure that the Director-General of Oftel will do so as well.
  There has been little mention of the Hull licence. It is almost identical to the BT licence, both in the protection that it gives consumers and in its provisions to ensure fair competition. Its 25-year term creates adequate confidence in the further development of the telecommunications system which has served the people of Hull well for many years.
  The licences granted to British Telecom and Hull must be granted before the appointed day when the legislation comes into force — 5 August. That is clearly foreshadowed in section 7 of the Act. Unless the BT licence is in place when the licensing provisions of the Act come into effect, BT would be committing the offence of running an unlicensed system. It would be unable, for example, to place its telegraph poles along the highway, because its present powers to do so under the Telegraph Acts will be repealed on 5 August. The same consideration applies to Hull.
  In addition to the licences for BT and Hull, a series of other licences will need to be in place by 5 August. In addition to the licences under the order we are debating, BT will require separate licences for its mobile radio, value added and cable television systems. These will place BT on a level footing with its competitors so that it will enjoy no unfair competitive advantage over them. Hull will also require a value added services licence.
  Apart from this, a considerable number of private systems are currently run under BT's exclusive privilege and have not required licences. Now that BT is to be licensed, they will need licences as well, and the Department will be consulting those concerned about the text of the necessary licences.
  I shall deal with a specific point raised by my hon. Friend the Member for Cornwall, North (Mr. Neale) about intellectual property. I apologise for the complexity of these sentences, but my hon. Friend made an important point. He questioned whether the new safeguards in the licence were adequate to ensure that BT is not able to require the transfer to it of intellectual property — possibly a patent—in such a way that it gains an unfair competitive advantage. The doubts that have been expressed relate to condition 36 of the licence which
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  places a clear prohibition on BT making it a condition of the acquisition of any telecommunication apparatus that any interest in intellectual property — the patterns and design—should be transferred
  "with a view to restricting unreasonably the freedom of the supplier … to exploit his Industrial or Intellectual Property in order to confer on the Licensee or some other person an unfair competitive advantage."
  In other words, there is anxiety that when BT buys a piece of telephonic equipment it could insist that the supplier transfer the patents, which BT could then exploit.
  A number of specific qualifications in condition 36.4 disapply the prohibition in certain circumstances — for example, where the transfer is necessary or desirable
  "to facilitate the running of any of the Applicable Systems"
  or to the extent that it is "reasonably necessary" for the purpose of enabling the licensee to secure an alternative source of supply.
  As I understand it, my hon. Friend's concern is that that would enable BT to require the assignment to it of intellectual property rights. I do not accept that that is so, because the provisions refer specifically to transfers which the director must agree are necessary or desirable or which are reasonably necessary. In one case, BT would have to obtain the specific authority of the director before any such transfer could be made and in the other case any disagreement about what is reasonably necessary would naturally fall to the director to determine. I regard it as highly unlikely that the director, acting in accordance with his duties under section 3 of the Act, would ever decide that the acquisition of industrial or intellectual property was necessary or desirable for the purposes that I have mentioned.
  I appreciate that concern has been expressed by others as well as my hon. Friend about the drafting of the condition, but I hope that they will be reassured that there are adequate safeguards to ensure that BT does not behave in an anti-competitive fashion in relation to industrial or intellectual property. If they are not sufficient, the Act provides clear mechanisms for the Director General to amend licences and no doubt representations will be made to him in due course.
  Several hon. Members raised the not unfamiliar question of the provision of public call boxes after liberalisation following privatisation. My hon. Friend the Member for Harborough (Sir J. Fan) has raised the matter on several occasions, as have the hon. Members for Falkirk, East (Mr. Ewing) and for Blaydon (Mr. McWilliam). Perhaps I may explain how the Act and the licence improve the situation. I assure my hon. Friend the Member for Harborough that I am just as concerned about this as he is. When I started taking the legislation through the House four years ago I represented an urban seat. I now represent a rural seat, with many remote kiosks, and my constituents put the same points to me as my hon. Friend's constituents put to him. I hope that my hon. Friend will be reassured by what I have to say.
  For the first time, there is a positive obligation on BT to continue to provide call boxes. Under the present arrangement, no such obligation exists. Secondly, at present there is a voluntary agreement between BT and POUNC which has worked very satisfactorily. The licence ensures that that arrangement will continue, but the safeguards will be stronger in that the arrangement is at present only voluntary whereas in future it will be obligatory and enforced by the director.

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  Several hon. Members mentioned the guideline figure of £185, which is the trigger level at which the director may consider whether a kiosk should be closed. It has been claimed that this will lead to the wholesale closure of kiosks in rural areas. I wish to take this opportunity to allay that concern. First, BT has always behaved responsibly in the past. For example, in 1982–83 only 66 call boxes were withdrawn on account of low takings, of which 29 were in rural areas, out of a total of more than 70,000 kiosks. There is no reason to expect any significant change in BT's behaviour. Indeed, BT has publicly committed itself to maintain and improve services in the rural areas. Moreover, certain parts of the licence oblige BT to continue specifically to continue the provision of those services to the rural areas.
  Secondly, I draw attention to the role of the Director-General in this respect. Section 3 of the statute obliges not just the director but the Secretary of State to exercise his functions in the way that he considers best calculated to secure the provision throughout the United Kingdom of
  "such telecommunication services as satisfy all reasonable demands for them including, in particular … public call box services."
  I do not believe that there could be a clearer obligation.
  Perhaps I might discuss the constituent parts of the £185 as I know that it worries hon. Members, especially the hon. Member for Berwick-upon-Tweed (Mr. Beith), as he has raised the matter several times. The figure is not new as it was agreed between BT and POUNC in 1981. Revenue to a call box cannot be measured just by the number of coins that drop into it as there are transfer calls and credit charge calls and someone can make a short 5p or lop call and ask the other person to ring back. We have said that, in additon to the £185, there must be taken into account an allowance of 25 per cent. of takings. The call box's takings therefore need amount to only £138·75 a year to meet the £185 minimum. If we assume that each call costs 10p, a call box has to take only about 26 calls a week — or fewer than four a day — to meet the minimum figure. If we use the more realistic assumption of a 20p call, the box has to be used only 13 times a week — or less than twice a day — to be kept in business. Even in those circumstances, representations can be made. In condition 11 there are the most elaborate arrangements by which the Director-General must advise the parish council, put up a notice and receive representations. That does not exist under present arrangements in the United Kingdom.
  Mr. Ashdown: Why are call boxes excluded from the constraints of condition 24 on the restriction of prices?
  Mr. Baker: We made up the basket on the restriction of prices on the guidance of the recommendations of Professor Littlechild. We have included in the basket the area of substantial monopoly that will continue and have excluded certain others. The one that the hon. Gentleman mentioned is one of those which we have excluded. I do not think that the House need feel too much anxiety on that account.
  I should like to deal with the promotion of competition and what the hon. Member for Stockton, South (Mr. Wrigglesworth) and my hon. Friend the Member for Aldridge-Brownhills said. We have tried to increase substantially competition in this market. I shall not go through the history of the provision of services and apparatus. Conditions 13 and 14 promote competition.
  282
  Perhaps I might add to what has been said about resale. I want to announce an extension of competition. In my statement of 17 November 1983 in Standing Committee A on the Telecommunications Bill, I set out the Government's intention in regard to competition in telecommunications. I discussed the principles of the Government's approach towards the various forms of resale of private circuits. I said that, although the Government did not intend to introduce resale before July 1989, we would examine the scope for the relaxation of existing rules in several specific areas. The Government have made several decisions that will provide a distinctly more liberal regime for users. These issues are complex, and I believe that I should strain the patience of the House if I went into the details of schemes for lease circuits and interconnect.
  Mr. Golding: No, go on.
  Mr. Baker: I think that my judgment might be better than that of the hon. Member for Newcastle-under-Lyme (Mr. Golding) in this respect. The details run to about seven pages of close typing. If I may, I shall arrange, in the next two days, to answer a written question. I shall set out the principles now. The Government have decided to introduce specific liberalisation measures for the group use of inland lease circuits, the interconnection of leased circuits and public switched networks and the use by BT or Mercury of spare capacity on privately owned networks.
  These measures will, on the one hand, stimulate greater availability and improved use of telecommunications services, but, on the other, they are aimed at avoiding the financial threat to the services provided by public telecommunications operators which could arise from the early introduction of simple resale capacity on private circuits. When the House and the various interested parties in the country have had time to consider these, as they will, I hope that they will find them a significant increase in liberalisation.
  Several hon. Members touched on the flotation of BT. I have consistently argued that the privatisation of BT is not an act of dogma but a logical extension of liberalisation of a monopoly. BT will certainly benefit by being removed from a web of public control; the taxpayers will benefit by receiving the receipts from the sale of BT; and the consumers will benefit from better services from BT.
  I am glad to say that we are moving down the path to privatisation and are holding the course well. The Act received Royal Assent on 12 April. The capital structure on the RPI minus 3 formula was announced on 2 May. The BT licence was issued on 22 June. The Director-General of Oftel took up his post on 1 July. BT will become a plc on 6 August. The legislation is all in place, and the machine is running. BT will be privatised in the late autumn, and all the signs are that it will be extremely successful.
  The sale of BT represents the greatest opportunity we have ever had to increase the ownership of shares by ordinary people in Britain. If all the 240,000 BT employees take up their free allocation of shares, BT will have the largest number of shareholders in the country, second only to ICI. However, this is only the beginning. We want to do much better than that.
  First, we intend to set the minimum application level at around £250 worth of shares. Less than half of this—

  283
  in the region of £100—will be payable at the time of flotation, and the balance in instalments over a set period. The exact duration of the instalments period will be firmed up closer to the flotation.
  I announced on 25 May that we intended to offer telephone subscribers who buy shares a set of vouchers which can be set in part payment of their quarterly telephone bills for a period of up to three years. The vouchers will be of a fixed monetary amount and will be usable one at a time over the period of the scheme. The number of vouchers which investors can receive will be related to the number of shares which they buy at the time of the flotation and which they keep until the vouchers are sent out.
  This scheme is designed to encourage telephone subscribers to invest in BT, and also to reward their loyalty by keeping the shares during the period of the voucher scheme. The first set of vouchers is likely to be sent out six or seven months after the flotation.
  Mr. Peter Shore: On a point of order, Mr. Deputy Speaker. This all too short debate, lasting one and a half hours, is on the licence of BT. It has nothing whatever to do with privatisation. It is a gross abuse of the House for the Minister now to make a statement on the details of that.
  Mr. Deputy Speaker (Mr. Paul Dean): We have had a fairly wide debate from both sides of the House.
  Mr. Baker: The right hon. Gentleman is a little too peevish. He has not been present for most of the debate. Had he been, he would know that the question of flotation was raised. However, I can understand why he is so peevish, because the scheme that I have outlined will be attractive to many of the telephone subscribers of Britain and will represent an enormous opportunity to increase share ownership. The Opposition do not like that, but that is what will happen.
  We want to take every opportunity to ensure that, with the sale of BT, we extend ownership not just through the City institutions but to many ordinary people. That is why we shall be introducing the scheme, and why the flotation of BT will be a great success later this year. I am glad to say that we have already set in train a series of measures involving the promotion and sale of BT which the public will see over the next few months. It will culminate in the issue of a shortened prospectus as well as a full prospectus in November, and I am sure——
  It being half-past Eleven o'clock, Mr. Deputy Speaker put the Question pursuant to Standing Order No. 4 (Prayers against statutory instruments, &c. (negative procedure)).
  The House divided: Ayes 186, Noes 247.

  Division No. 412]

  [11.30 pm

  AYES

  Alton, David

  Bell, Stuart

  Anderson, Donald

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

  Archer, Rt Hon Peter

  Bermingham, Gerald

  Ashdown, Paddy

  Bidwell, Sydney

  Ashton, Joe

  Blair, Anthony

  Atkinson, N. (Tottenham)

  Boothroyd, Miss Betty

  Barnett, Guy

  Boyes, Roland

  Barron, Kevin

  Bray, Dr Jeremy

  Beckett, Mrs Margaret

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

  Beggs, Roy

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

  Beith, A. J.

  Brown, Ron (E'burgh, Leith)

  284

  Bruce, Malcolm

  Lamond, James

  Callaghan, Jim (Heyw'd & M)

  Leadbitter, Ted

  Campbell, Ian

  Leighton, Ronald

  Campbell-Savours, Dale

  Lewis, Ron (Carlisle)

  Canavan, Dennis

  Lewis, Terence (Worsley)

  Carter-Jones, Lewis

  Litherland, Robert

  Clark, Dr David (S Shields)

  Lloyd, Tony (Stretford)

  Clarke, Thomas

  Lofthouse, Geoffrey

  Clay, Robert

  Loyden, Edward

  Clwyd, Mrs Ann

  McCartney, Hugh

  Cocks, Rt Hon M. (Bristol S.)

  McDonald, Dr Oonagh

  Cohen, Harry

  McKay, Allen (Penistone)

  Coleman, Donald

  McKelvey, William

  Conlan, Bernard

  Mackenzie, Rt Hon Gregor

  Cook, Frank (Stockton North)

  McNamara, Kevin

  Cook, Robin F. (Livingston)

  McTaggart, Robert

  Corbett, Robin

  Madden, Max

  Corbyn, Jeremy

  Maginnis, Ken

  Cowans, Harry

  Marek, Dr John

  Cox, Thomas (Tooting)

  Marshall, David (Shettleston)

  Craigen, J. M.

  Maxton, John

  Crowther, Stan

  Maynard, Miss Joan

  Cunliffe, Lawrence

  Meacher, Michael

  Dalyell, Tam

  Meadowcroft, Michael

  Davies, Rt Hon Denzil (L'lli)

  Michie, William

  Davies, Ronald (Caerphilly)

  Mikardo, Ian

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

  Millan, Rt Hon Bruce

  Deakins, Eric

  Miller, Dr M. S. (E Kilbride)

  Dewar, Donald

  Mitchell, Austin (G't Grimsby)

  Dobson, Frank

  Morris, Rt Hon A. (W'shawe)

  Dormand, Jack

  Morris, Rt Hon J. (Aberavon)

  Dubs, Alfred

  Nellist, David

  Dunwoody, Hon Mrs G.

  Nicholson, J.

  Eadie, Alex

  Oakes, Rt Hon Gordon

  Eastham, Ken

  O'Brien, William

  Evans, John (St. Helens N)

  O'Neill, Martin

  Ewing, Harry

  Orme, Rt Hon Stanley

  Fatchett, Derek

  Park, George

  Faulds, Andrew

  Patchett, Terry

  Field, Frank (Birkenhead)

  Pavitt, Laurie

  Fields, T. (L'pool Broad Gn)

  Penhaligon, David

  Fisher, Mark

  Pike, Peter

  Flannery, Martin

  Powell, Raymond (Ogmore)

  Foot, Rt Hon Michael

  Prescott, John

  Forrester, John

  Randall, Stuart

  Forsythe, Clifford (S Antrim)

  Redmond, M.

  Foster, Derek

  Rees, Rt Hon M. (Leeds S)

  Foulkes, George

  Roberts, Allan (Bootle)

  Fraser, J. (Norwood)

  Roberts, Ernest (Hackney N)

  Freeson, Rt Hon Reginald

  Robertson, George

  George, Bruce

  Robinson, G. (Coventry NW)

  Gilbert, Rt Hon Dr John

  Rogers, Allan

  Godman, Dr Norman

  Rooker, J. W.

  Golding, John

  Ross, Ernest (Dundee W)

  Gould, Bryan

  Ross, Stephen (Isle of Wight)

  Gourlay, Harry

  Rowlands, Ted

  Hamilton, James (M'well N)

  Sedgemore, Brian

  Hamilton, W. W. (Central Fife)

  Sheerman, Barry

  Hancock, Mr. Michael

  Sheldon, Rt Hon R.

  Harrison, Rt Hon Walter

  Shore, Rt Hon Peter

  Hart, Rt Hon Dame Judith

  Short, Ms Clare (Ladywood)

  Haynes, Frank

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

  Healey, Rt Hon Denis

  Silkin, Rt Hon J.

  Heffer, Eric S.

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

  Hogg, N. (C'nauld & Kilsyth)

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

  Holland, Stuart (Vauxhall)

  Snape, Peter

  Howell, Rt Hon D. (S'heath)

  Soley, Clive

  Howells, Geraint

  Strang, Gavin

  Hoyle, Douglas

  Straw, Jack

  Hughes, Dr. Mark (Durham)

  Thome, Stan (Preston)

  Hughes, Robert (Aberdeen N)

  Tinn, James

  Hughes, Roy (Newport East)

  Torney, Tom

  Hughes, Sean (Knowsley S)

  Wallace, James

  Hughes, Simon (Southwark)

  Wardell, Gareth (Gower)

  Janner, Hon Greville

  Wareing, Robert

  John, Brynmor

  Welsh, Michael

  Jones, Barry (Alyn & Deeside)

  White, James

  Kilroy-Silk, Robert

  Wigley, Dafydd

  Kirkwood, Archy

  Williams, Rt Hon A.

  Lambie, David

  Wilson, Gordon

  285

  Winnick, David

  Woodall, Alec

  Tellers for the Ayes:

  Wrigglesworth, Ian

  Mr. John McWilliam and Mr. Don Dixon.

  Young, David (Bolton SE)

  NOES

  Adley, Robert

  Edwards, Rt Hon N. (P'broke)

  Aitken, Jonathan

  Eggar, Tim

  Alexander, Richard

  Evennett, David

  Amess, David

  Fairbairn, Nicholas

  Ancram, Michael

  Fallon, Michael

  Arnold, Tom

  Farr, Sir John

  Ashby, David

  Favell, Anthony

  Aspinwall, Jack

  Fenner, Mrs Peggy

  Atkins, Rt Hon Sir H.

  Finsberg, Sir Geoffrey

  Atkins, Robert (South Ribble)

  Fletcher, Alexander

  Atkinson, David (B'm'th E)

  Fookes, Miss Janet

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

  Forman, Nigel

  Baker, Nicholas (N Dorset)

  Forsyth, Michael (Stirling)

  Baldry, Anthony

  Forth, Eric

  Banks, Robert (Harrogate)

  Fowler, Rt Hon Norman

  Batiste, Spencer

  Fox, Marcus

  Beaumont-Dark, Anthony

  Fraser, Peter (Angus East)

  Bendall, Vivian

  Freeman, Roger

  Berry, Sir Anthony

  Fry, Peter

  Biggs-Davison, Sir John

  Gale, Roger

  Body, Richard

  Galley, Roy

  Bonsor, Sir Nicholas

  Gardiner, George (Reigate)

  Boscawen, Hon Robert

  Gardner, Sir Edward (Fylde)

  Bottomley, Peter

  Garel-Jones, Tristan

  Bottomley, Mrs Virginia

  Glyn, Dr Alan

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

  Goodhart, Sir Philip

  Brandon-Bravo, Martin

  Goodlad, Alastair

  Brinton, Tim

  Gow, Ian

  Brittan, Rt Hon Leon

  Greenway, Harry

  Brooke, Hon Peter

  Gregory, Conal

  Brown, M. (Brigg & Cl'thpes)

  Griffiths, Peter (Portsm'th N)

  Bruinvels, Peter

  Grist, Ian

  Buchanan-Smith, Rt Hon A.

  Ground, Patrick

  Buck, Sir Antony

  Grylls, Michael

  Budgen, Nick

  Gummer, John Selwyn

  Bulmer, Esmond

  Hamilton, Hon A. (Epsom)

  Burt, Alistair

  Hamilton, Neil (Tatton)

  Butcher, John

  Hanley, Jeremy

  Butterfill, John

  Hannam, John

  Carlisle, John (N Luton)

  Hargreaves, Kenneth

  Carlisle, Kenneth (Lincoln)

  Harris, David

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

  Harvey, Robert

  Carttiss, Michael

  Haselhurst, Alan

  Cash, William

  Havers, Rt Hon Sir Michael

  Chalker, Mrs Lynda

  Hawkins, C. (High Peak)

  Channon, Rt Hon Paul

  Hawkins, Sir Paul (SW N'folk)

  Chapman, Sydney

  Hayes, J.

  Chope, Christopher

  Hayhoe, Barney

  Churchill, W. S.

  Hayward, Robert

  Clark, Sir W. (Croydon S)

  Heathcoat-Amory, David

  Clarke, Rt Hon K. (Rushcliffe)

  Hickmet, Richard

  Clegg, Sir Walter

  Higgins, Rt Hon Terence L.

  Cockeram, Eric

  Hind, Kenneth

  Colvin, Michael

  Hirst, Michael

  Conway, Derek

  Hogg, Hon Douglas (Gr'th'm)

  Coombs, Simon

  Holland, Sir Philip (Gedling)

  Cope, John

  Holt, Richard

  Corrie, John

  Hooson, Tom

  Couchman, James

  Howard, Michael

  Cranborne, Viscount

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

  Critchley, Julian

  Howarth, Gerald (Cannock)

  Crouch, David

  Howell, Ralph (N Norfolk)

  Dicks, Terry

  Hubbard-Miles, Peter

  Dorrell, Stephen

  Hunter, Andrew

  Douglas-Hamilton, Lord J.

  Hurd, Rt Hon Douglas

  Dover, Den

  Jackson, Robert

  Durant, Tony

  Jenkin, Rt Hon Patrick

  Dykes, Hugh

  Johnson Smith, Sir Geoffrey

  286

  Jones, Robert (W Herts)

  Spencer, Derek

  Joseph, Rt Hon Sir Keith

  Spicer, Michael (S Worcs)

  Kershaw, Sir Anthony

  Squire, Robin

  Key, Robert

  Stanbrook, Ivor

  King, Roger (B'ham N'field)

  Steen, Anthony

  King, Rt Hon Tom

  Stern, Michael

  Knight, Gregory (Derby N)

  Stevens, Lewis (Nuneaton)

  Knight, Mrs Jill (Edgbaston)

  Stevens, Martin (Fulham)

  Knowles, Michael

  Stewart, Allan (Eastwood)

  Knox, David

  Stewart, Andrew (Sherwood)

  Lamont, Norman

  Stokes, John

  Lang, Ian

  Stradling Thomas, J.

  Lawler, Geoffrey

  Sumberg, David

  Lawrence, Ivan

  Taylor, Teddy (S'end E)

  Lee, John (Pendle)

  Tebbit, Rt Hon Norman

  Leigh, Edward (Gainsbor'gh)

  Temple-Morris, Peter

  Lennox-Boyd, Hon Mark

  Thomas, Rt Hon Peter

  Lester, Jim

  Thompson, Donald (Calder V)

  Lilley, Peter

  Thompson, Patrick (N'ich N)

  Lloyd, Ian (Havant)

  Thome, Neil (Ilford S)

  Lord, Michael

  Thornton, Malcolm

  McQuarrie, Albert

  Thurnham, Peter

  Malins, Humfrey

  Townend, John (Bridlington)

  Maples, John

  Tracey, Richard

  Mather, Carol

  Trippier, David

  Miller, Hal (B'grove)

  Trotter, Neville

  Monro, Sir Hector

  Twinn, Dr Ian

  Moore, John

  van Straubenzee, Sir W.

  Murphy, Christopher

  Vaughan, Sir Gerard

  Neale, Gerrard

  Viggers, Peter

  Neubert, Michael

  Waddington, David

  Nicholls, Patrick

  Wakeham, Rt Hon John

  Norris, Steven

  Walden, George

  Oppenheim, Philip

  Wall, Sir Patrick

  Page, Sir John (Harrow W)

  Waller, Gary

  Peacock, Mrs Elizabeth

  Ward, John

  Porter, Barry

  Wardle, C. (Bexhill)

  Powley, John

  Warren, Kenneth

  Roberts, Wyn (Conwy)

  Watson, John

  Robinson, Mark (N'port W)

  Watts, John

  Roe, Mrs Marion

  Wells, Bowen (Hertford)

  Rossi, Sir Hugh

  Wells, Sir John (Maidstone)

  Rost, Peter

  Wheeler, John

  Rowe, Andrew

  Whitfield, John

  Rumbold, Mrs Angela

  Whitney, Raymond

  Sainsbury, Hon Timothy

  Winterton, Mrs Ann

  Sayeed, Jonathan

  Winterton, Nicholas

  Scott, Nicholas

  Wolfson, Mark

  Shaw, Giles (Pudsey)

  Wood, Timothy

  Shaw, Sir Michael (Scarb')

  Woodcock, Michael

  Shelton, William (Streatham)

  Yeo, Tim

  Shepherd, Colin (Hereford)

  Young, Sir George (Acton)

  Shersby, Michael

  Vounger, Rt Hon George

  Silvester, Fred

  Sims, Roger

  Tellers for the Noes:

  Smith, Sir Dudley (Warwick)

  Mr. David Hunt and Mr. John Major.

  Smith, Tim (Beaconsfield)

  Soames, Hon Nicholas

  Question accordingly negatived.

  Telecommunications

    BUSINESS OF THE HOUSE
    Ordered,
    That, at the sitting on Wednesday 18th July, notwithstanding the provisions of paragraph (1)(b) of Standing Order No. 3 (Exempted Business), the Motions relating to Food may be proceeded with, though opposed, for three hours after the first Motion has been entered upon, and Mr. Speaker shall then put any Questions necessary to dispose of proceedings on those Motions, if not previously concluded. — [Mr. Archie Hamilton.]

  Road and Rail Communications (North-east Lancashire)
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Archie Hamilton.]
  11.43 pm
  Mr. Jack Straw: I am glad to have this opportunity to debate the subject of road and rail communications in north-east Lancashire. I am pleased that I am joined in the Chamber by my hon. Friend the Member for Burnley (Mr. Pike). With your agreement, Mr. Deputy Speaker, and that of the Minister, it may be possible for him to speak if I sit down at about 11.54 pm.
  I am also pleased to see the hon. Member for Pendle (Mr. Lee), the Parliamentary Under-Secretary of State for Defence Procurement, in the Chamber, who is also concerned about this issue, as well as the hon. Member for Hyndburn (Mr. Hargreaves).
  The general title of this debate relates to the transport infrastructure of north-east Lancashire. I shall mention two issues — the public bus and railway services, and the completion of the M65 motorway from Blackburn to the M6 and M61 south of Samlesbury. That is a major issue of contention in the area.
  The buses White Paper which was published last week shows that just under four out of 10 households in the country as a whole lack access to a motor car. In north-east Lancashire that proportion is higher. In Blackburn and Burnley, for example, exactly half the households do not have access to a car, and in Hyndburn, Pendle and Rossendale the proportion is only a little smaller.
  I hope that the buses White Paper is reconsidered for the folly that it is. It will spell a serious curtailment of bus services in rural areas. That is evidenced by the appendix to the White Paper, which shows that in the experimental areas of Hereford, Devon and Norfolk, the privatisation and liberalisation had led to a curtailment of rural services. It will disrupt the municipal undertakings in the area. Each borough, with Pendle and Burnley combined, runs effective municipal undertakings. The White Paper will also pose serious difficulties for bus and coach builders, including the east Lancashire coach builders in my constituency. They have already had to shed 30 jobs and their future is difficult.
  My second massive worry is about the railway service. East Lancashire is intersected by two railway services—one runs from Preston through Blackburn to Colne, and the other is a connecting service from Blackburn to Manchester. Both are vital commuter links and social services. They still use diesel multiple units, which were first introduced in 1959. Anyone who travels on them regularly knows that it feels as if they are 25 or 30 years old and they are well passed their useful life. Because they are clapped out, the timing of the services on those routes must be extended. That means, for example, that, whereas before the new timetable was introduced in May, 17 of the daily services from Manchester connected at Blackburn with trains to Accrington, Burnley and Colne, now only 10 do and the other seven arrive often two or three minutes after the train from Blackburn has gone.
  We will no longer accept it if the problem is shuffled off to British Railways. The Minister holds the purse strings for British Railways. We need urgent decisions to replace those diesel multiple units, and a pledge from the
  288
  Government—they also control this decision—that those two vital lines will have a long future and will not be subject to serpell cuts.
  An even more controversial issue is the full completion of the M65 motorway. The promise to build a motorway along the east Lancashire corridor from Colne through Nelson, Burnley, Accrington and Blackburn to connect with the M6 and M61 south of Preston was made in the late 1960s in response to deep anxiety that that sub-region would suffer if and when the central Lancashire new town, based on Preston, Leyland and Chorley was built. There was also anxiety that because other areas in the north-west had their transport systems improved, if north-east Lancashire lagged behind, it would be at a disadvantage. It was agreed that the M65 should be built from Colne to the M6 and M61. There was a great debate about which route it should take, especially whether it should go north through the centre of or south of Blackburn. That was finally resolved by a decision to route it through the south of Blackburn. It was announced by the then Secretary of State for Transport, Mr. Bill Rodgers, in 1977.
  I was present at a meeting between all the Lancashire Members of Parliament on 4 July 1979 and a junior transport Minister, now the Minister for Health. The Minister was pressed to pledge to continue the construction of the M64 through to the M6–M61 south of Preston. The Minister told us, as was repeated in a press statement issued after the meeting, that
  "The previous Government had given the M65 a high priority and he would continue to give it the same priority."
  At that meeting there was no suggestion that the route would be curtailed just east of Blackburn. In April 1980, in answer to a question from me, the Secretary of State for Transport, now the Secretary of State for Health and Social Security, announced that the section between Blackburn and the M65 and the M6–M61 would be cancelled. That caused, and has continued to cause, great consternation throughout north-east Lancashire, but no more than within my constituency. It means that the key link in the chain connecting that motorway to the national motorway network has been cut. That has serious implications for industry in the area. They are so serious that the north-east Lancashire development association has received well over 100 letters from major industrialists complaining about the disadvantage that would accrue to the area if the link continued to be cancelled.
  My constituents face the prospect that within a few months the motorway will finish at Whitebirk just to the east of Blackburn and all the motorway traffic not just from east Lancashire but coming down the A59 from north and west Yorkshire will pour into residential areas of Blackburn and through the Brownhill roundabout, which is already inadequate, and will then have to make the journey between the Moat house, formerly the Saxon and the Trafalgar inn at Samlesbury on a wholly inadequate, dangerous single carriageway road.
  The residents of Blackburn and north-east Lancashire felt betrayed by the former Secretary of State, given his colleague's pledge to treat the route as a high priority. No one in north-east Lancashire has accepted the decision. Everyone agrees that it is unacceptable that the motorway scheme should be cancelled, and believes that it must go ahead.
  We have had numerous meetings with the Minister of State, and I commend the fact that she has taken a considerable interest in the scheme. We look forward to

  289
  a positive response as a conclusion to her interest. The Minister was good enough to come to Lancashire in December 1982. I believe that she was deeply impressed by the case that was then put forward. That was followed by a detailed inquiry by Harold Yeadon, the Lancashire county surveyor. His report, which I have and which runs ino many pages, suggested that overall it would be more costly for the Government to go ahead with the cancelled scheme than it would be to include the motorway. The sum involved is £4 million, the difference between £56 million and £60 million. That takes account of the fact that if the motorway scheme does not proceed many more roads would need improvement than would otherwise be the case. It showed also that the level of traffic on the residential and main roads in the Blackburn area would be intolerable.
  Since 1 December 1982 there have been further meetings. The Minister has met further deputations and she has said on a number of occasions that she hoped to make a decision soon. I shall not embarrass her by giving the number of times on which she has said that, and the number of times that the deadlines have passed.
  In a recent reply in the House, the Minister rather ominously said that other areas in north-east Lancashire had a higher proportion of motorways than the country as a whole. That may be true, but it is no comfort to north-east Lancashire. If it is true, it places north-east Lancashire at a greater disadvantage than would otherwise be the case.
  We need the road. It was promised 15 years ago. It was re-pledged by this Conservative Administration in July 1979. The case for the scheme is overwhelming. It is needed for industry, for jobs, and to prevent misery, unhappiness and danger to the residents in my constituency. I urge the Minister to give a positive pledge to ensure that the scheme is built, and built soon.
  11.55 pm
  Mr. Peter Pike: I thank my hon. Friend the Member for Blackburn (Mr. Straw) for calling for the debate, and for giving me a few minutes in which to support the case that he so ably made.
  The two aspects on which I want to concentrate are the rail service and the M65. I am sure that the bus issue is one that the House will debate fully over a period of time because of the controversy that will arise from the proposal announced in the House last week.
  It must be remembered at all times that the proposal for the M65 to be linked to the M6 and to the M61 has the full support of all local councils in the area, and is not a matter of political division. The fact that not only two hon. Members on this side of the House support the case, but that the hon. Members for Pendle (Mr. Lee) and for Hyndburn (Mr. Hargreaves) are present for the debate is indicative of the support that the measure has. I know that my predecessor, Mr. Dan Jones, fought for improved road links to Burnley long before the suggested motorway when the proposal to construct the road was originally made in 1969–70. I am aware that the time schedule proposed for that motorway link has run out. It was originally evisaged that a motorway from Colne to the M6 would be completed by 1978; and, of course, that time has long since passed.
  This proposal is supported not only by the political parties and the local councils but by industry and the north-east Lancashire development association. In north-east Lancashire, communications are vital to our economic and industrial survival. We ask the Minister to take that vital
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  factor into account when reaching a decision. We are out on a limb in north-east Lancashire. The people in that area, who led the industrial revolution and played such a vital part in the country in the last century, have shown adaptability in transferring to new industries and, indeed, in transferring from the new industries that came in in the 1950s to yet another phase of new industries. We need the motorway if the new industries are to continue to come in and provide the employment that we so badly need.
  Another important aspect is the enterprise zone project which is supported by a number of councils in the area, including Pendle, Hyndburn and Rossendale, a project which is based on the concept of the motorway. That is an important factor to take into account.
  There is a great need for an improvement in the railway network in north-east Lancashire. From Burnley, the service to Preston is only one train an hour which takes over an hour, and it is a difficult journey. I am sure that no Minister of Transport with a choice would ever travel the last 20-odd miles to Burnley by rail if that could be avoided. We have one slight disadvantage as against my hon. Friend the Member for Blackburn in that from Burnley there is no direct service to Manchester, so that one must change at Blackburn. In the middle of the day, some trains take over two hours to travel the 20-odd miles from Burnley to what is the regional capital of Lancashire, which is deplorable. There needs to be an improvement in the rail service, and completion of the M65. I hope that, when the decision is reached—and we keep hearing that this will come very soon—it will be a favourable one.
  11.59 pm
  The Minister of State, Department of Transport (Mrs. Lynda Chalker): I am grateful to the hon. Members for Blackburn (Mr. Straw) and for Burnley (Mr. Pike) for their contributions to this important debate. I think that they both know already that I regard this as an important subject.
  The hon. Members mentioned buses and, although I do not wish to dwell on that aspect, I should point out that in recent years there has been a continuation of policies that have led to increased fares, reduced services and increased subsidies. That policy cannot go on.
  Experience in trial areas is that deregulation has not led to major cuts in rural services. On the contrary, those areas have done rather better than comparable rural communities outside the trial areas. New initiatives come forward when buses are freed from regulation. Enough of buses for tonight.
  The hon. Members for Blackburn and for Burnley mentioned the problems of rail travel. The hon. Member for Burnley told us how difficult it was to get from Burnley to Preston and Manchester. We fully accept that many of British Rail's diesel multiple units are approaching the end of their working lives. However, BR has plans to renew the entire fleet over the next few years and is working on that investment. Since the beginning of the year, we have approved investment in 150 lightweight rail buses and 100 medium-weight DMUs, together worth nearly £50 million.
  Those vehicles are for BR's provincial services, though it will be for BR to decide where they will be used. I know that BR is concentrating such vehicles on the sort of provincial lines of which the hon. Members have spoken.

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  I know that BR wishes to have further DMUs built in the near future. I assure the hon. Member for Blackburn that the Government will do their bit to help to create the modern and efficient railway that our people want.
  Talking of efficiency brings me to timetabling. I do not deny that there have been problems since the new timetable was introduced on the east Lancashire line, in changing at Blackburn for services to Manchester. British Rail has received a number of complaints about those connections and has made adjustments to the timetable to overcome the problem. Revised times have been publicised in the local press and will be included in the October supplementary timetable. British Rail has already responded to an unsatisfactory state of affairs.
  British Rail has recognised that the connections to Preston are not good enough and the 1985 timetable will include a number of adjustments designed to improve those connections for people using local services to and from Preston and wishing to change there to the west coast main line. Neither BR nor the Government intend to excuse the operational difficulties that have occurred, but BR is putting them right.
  I should say to the hon. Members for Blackburn and for Burnley and to my hon. Friends the Members for Pendle (Mr. Lee) and for Hyndburn (Mr. Hargreaves), who are also present, that since 1982 much time has been spent on considering links from Blackburn to the M6 and the M61. I have been listening to the arguments of hon. Members on both sides of the House that the construction of the green route would confer great benefits on north-east Lancashire. I am sorry that I cannot give the House a decision tonight. I do not think that the hon. Member for Blackburn expected that, but he wanted a progress report and hoped that my "soon" might have arrived. I know the importance of the timing.
  We know that completing the connection to the national motorway network, fostering the expansion of existing industry and encouraging the development of new industry has merits. However, there is a contrary view of the link with the motorway system. A decision is needed without further delay to remove the uncertainty and the understandable local concern. I apologise, but it is an important matter and the decision either way has far-reaching consequences.
  The alternatives are rather more finely balanced than the hon. Member for Blackburn gave us to understand. The many representations to me, both for and against, show a finer balance of the argument. That is why the discussion of the elements involved is taking longer than the hon. Gentleman would wish.
  The case for the green route rests upon a number of factors, which have been expounded. It also stands or falls on the justification for it in terms of the traffic that it will attract away from other routes and the economic benefits that it will confer. The study of traffic and economic considerations has involved a great deal of work. We have had to go back to the county council to obtain an explanation of some of the figures in its excellent report. It has had to amplify some of the work. Those results are being carefully considered.
  My Department has done all it can to speed up the process. I do not hold my officials in any way responsible for the time that it is taking. I genuinely feel that we should take a little extra time now and ensure that we reach the
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  right decision. I think that that is what the hon. Gentleman wants. The green route, as I am sure he accepts, is an expensive proposition involving a massive injection of capital into an area that has already benfited considerably from roads investment—even if that part of Lancashire does not have the road it wants yet. I cannot make any decision lightly.
  I welcome the debate because it allows me to say a word about the future. I accept that the construction work on the Department's final four-mile section of the M65 Calder valley motorway between Whitebirk and Hyndburn is going extremely well. It is scheduled for completion in the middle of next year. I am sure that my hon. Friend the Member for Hyndburn will welcome that.
  The construction of the Accrington easterly bypass, southern section, is also proceeding and will complete the final stage in the construction of a high standard north-south route between the Calder valley towns and Greater Manchester conurbation and the M62 motorway. Already, plenty is happening, but what is not happening is the decision about Blackburn going westwards towards the M6.
  The opening of the 5·5 mile Hyndburn to Burnley section of the M65 and the extension of the Lancashire county council's section of the M65 between Brierfield and Nelson means that there is considerably easier traffic in those areas. It highlights the difference when we reach Blackburn. That investment must be borne in mind, especially now that the north-south link is going ahead in relation to the total amount of resources available. That has not made me cease to look at what needs to be done. I would be failing in my task if I did not tell the hon. Member for Blackburn that the Brownhill roundabout will have to have attention, whatever the decision on the green route, but how it is done must be decided in conjunction with the decision that must be made.
  I know that there is anxiety about the forward plan for the A677–A6119 improvement. I want to set the record straight. There is no doubt that if the green route goes ahead, we would need to reassess our plans for the northern route between the M65 and the M6 at Samlesbury. We are convinced that improvements will be needed at the roundabout junction at Brownhill. There are serious present-day problems, which have existed for many years, and we cannot expect the traffic just to go away, especially after the M65 to Whitebirk opens next year.
  My Department has been discussing the appropriate answer with Lancashire county council. We have also involved Blackburn borough council. I hope that, for that roundabout, we can find a mutually agreed solution. We want to publish some firm proposals as soon as possible so that we can test public opinion, have a local inquiry and take a final decision about the form of the urgently needed improvement at that junction.
  As for any doubts that remain locally, I confirm that for Brownhill we are thinking in terms of a single-level junction. The plans which were around some time ago to build a flyover have been scrapped. I can give the hon. Member for Blackburn that assurance, which he will welcome.
  I have mentioned the timing of the Brownhill improvement. I hope that, with the local councils, we can get on with the statutory procedures and complete the public inquiry by 1986. If the green route is to go ahead, it will be necessary to review the proposals that we have

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  recently been developing for comprehensive improvements to the remainder of the A677–A6119 route. We shall, however, wish to look at other junctions on that route to see whether we can do something modest to enhance their use and reduce accident spots. In particular, we need to look at Samlesbury.
  The Lancashire county council report on the green route, which we have been studying, compares the Department's present proposals to upgrade the existing road with the proposal to construct a new road along the lines of the green B route. We are grateful for that assessment, as I have already said. It has highlighted the environmental problems associated with the Department's current northern strategy and its implications for consequential work on both trunk and county roads.
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  The report is a well-argued and well-presented document, and in coming to our decision I shall take into account the county council's case, the case that the hon. Members have made tonight—and the points that have been made by several of my hon. Friends, two of them present tonight—about the the importance of getting better links from Blackburn across to the M6. I do not want anyone to think for a moment that we shall not be considering every aspect of that, including all the traffic implications in that part of Lancashire. That is what we are doing now, and I hope very shortly to reach a conclusion.
  Question put and agreed to.
  Adjourned accordingly at twelve minutes past Twelve o'clock.

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

Grenada: Intelligence Advice
Lord Hatch of Lusby: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
[To ask Her Majesty's Government what action they are taking over the assertion by the Commons Foreign Affairs Committee that the Foreign and Commonwealth Office based "its reaction entirely on the advice received from Washington, which in the end proved to be unreliable advice" in the days leading up to the invasion of Grenada.
The Parliamentary Under-Secretary of State for the Armed Forces (Lord Trefgarne): My Lords, our reply to the Second Report from the Select Committee on Foreign Affairs was published as a White Paper (Cmnd. No. 9267) on 20th June. The White Paper explains why we do not accept the criticisms in the report of our actions during the Grenada crisis.
Lord Hatch of Lusby: My Lords, is the noble Lord aware that this is an all-party Select Committee and that its all-party membership found that in the days before the invasion of Grenada Her Majesty's Government had:
"been reacting passively to the events unfolding in the Caribbean and basing its reaction entirely on the advice received from Washington, which in the end proved to be unreliable advice"?
Can Her Majesty's Government state whether they accept that criticism, and if not, why not, considering that it comes from some members of their own party?
Lord Trefgarne: My Lords, I am not certain that the fact that this was the report of an all-party committee, as the noble Lord rightly says, necessarily gives it a monopoly of wisdom on the matter. But I can say that in the Government's view the committee's description of the process of assessing information and formulating policy in a fast moving situation is oversimplified and relies heavily on hindsight.
Lord Cledwyn of Penrhos: My Lords, is the noble Lord aware that the House fully understands that he has to defend the department against the committee's charges? But is he also aware that in the report it was stated that the United States Government recognised that it would have been better if they had consulted the British Government much earlier? Can he therefore say what steps have been taken to improve the consultative procedures between the two countries so as to avoid that sort of thing in the future?
Lord Trefgarne: Yes, my Lords, the noble Lord is quite right that the Americans have indicated that it would have been better if we had been consulted earlier. We are of course in constant touch with the
1328
United States on a whole range of matters. It was unfortunate that on this occasion we were not consulted more fully at an earlier stage. But the United States is our principal and closest ally, and I am not sure that the wide-ranging review, which I think that the noble Lord is calling for, is necessary.
Lord Paget of Northampton: My Lords, does the noble Lord agree that we owe quite a few of our victories in history to having received and acted on the wrong information? Is this not another example? Should we not be grateful that we did not get the right information or we might have frustrated one of the West's few successes?
Lord Trefgarne: My Lords, I am not sure whether the noble Lord has it entirely right. The actions that the Government took at the time are not ones that we would now wish to have changed, even with the benefit of hindsight.
Lord Sainsbury: My Lords, does the Minister agree that many of the smaller islands in the Eastern Caribbean welcomed the American action because they feared possible revolts against their own governments by extreme Left-wing Marxist groups?
Lord Trefgarne: My Lords, the noble Lord is right to suggest that there was a wide range of views as to the merits or otherwise of the American action. If I may say so, I think that it is in our interests in maintaining the two-way flow between our countries that not only do we seek to persuade the Americans of our views, but we listen to their views as well.
Lord Cledwyn of Penrhos: My Lords, may I put one further point to the noble Lord which concerns intelligence sources in the Caribbean? As he recalls, there has been considerable criticism of the way in which we have neglected to develop, or to continue, the intelligence contacts that we had in that area since most of the territories gained their independence. Can he say whether we have improved our intelligence contacts in the area?
Lord Trefgarne: My Lords, it is, I fear, the case that a country such as ours and of the size of ours is not able to have the facilities in every part of the world for which the noble Lord is calling; but we take what steps we can to ensure that the arrangements are the most appropriate that we can make.
Lord Cledwyn of Penrhos: My Lords, I apologise again, but may I ask whether it is not the case that this is an area where we have particular interests and where we still maintain close relationships? In those circumstances, is it not a retrograde step to neglect our intelligence contacts?
Lord Trefgarne: My Lords, I certainly agree that it is a retrograde step to neglect intelligence matters anywhere. But, having said that, there is a limit to what we can do. I hope that the noble Lord will forgive me if I do not go into details.
Lord Hatch of Lusby: My Lords, does not the noble Lord agree that in this case the lack of intelligence was

1329
not lack of intelligence in Grenada but lack of intelligence between the Foreign Office here and Washington? That is where the intelligence link was needed. I do not cast aspersions on the noble Lord, but is he not aware that he has been briefed to give answers which give the impression of a great deal of complacency? Is it not the case that our Queen was Queen of the island of Grenada, yet a foreign power, albeit an ally, invaded the Queen's territory without her knowledge? Is this not a very grim commentary on the advice that the Foreign Office was able to give to Her Majesty's Government and that Her Majesty's Government gave to Her Majesty? How did it come about that on 24th October, less than 24 hours before United States paratroopers landed on the island of Grenada, the Foreign Secretary was able to tell Members in another place that no United States invasion was imminent?
Lord Trefgarne: My Lords, I can assure the noble Lord that we do not for a moment wish to be complacent about these matters, as the noble Lord suggests. We were informed in advance of what was proposed; but, as I said just now in answer to an earlier question, we certainly would have wished that the consultation had been earlier and more full.
Lord Hatch of Lusby: My Lords, if Her Majesty's Government were informed in advance, how did it come about that the Foreign Secretary, less than 24 hours before the invasion, told Members of the other place that no invasion was imminent?
Lord Trefgarne: My Lords, that seems to be a matter of elementary arithmetic.

The Telephone Service: Waiting List
2.45 p.m.
Baroness Sharples: 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 is the current length of the waiting list for the installation of telephones and how this compares with the situation in 1979.
The Chancellor of the Duchy of Lancaster (Lord Cockfield): My Lords, the waiting list on the accepted definition has been reduced from 196,154 as at 31st March 1979 to 337 as at 31st May 1984.
Baroness Sharples: My Lords, I thank my noble friend for that very satisfactory reply. Can he say whether the rural services will continue to be maintained? Can he also say whether telephone kiosks, even if they prove uneconomic, will also be kept throughout the country?
Lord Cockfield: My Lords, specific safeguards both for public call boxes and for rural areas are contained in Sections 3 and 8 of the Telecommunications Act and effect to these safeguards is given in Conditions 2
1330
and 11 of the British Telecom licence, which will be the subject of debate in your Lordships' House tomorrow week.
Lord Somers: My Lords, is there any method of protecting telephone kiosks from the attacks of vandals?
Lord Cockfield: My Lords, I am afraid that that is quite a different question from the one which appears on the Order Paper, but nevertheless an important one.
Lord Bruce of Donington: My Lords, would the noble Lord agree that the reply he gave to the original Question reflects very great credit indeed on this publicly-owned enterprise? Would he confirm that if a Question is put down in similar terms 12 months from now it will be answered by Her Majesty's Government?
Lord Cockfield: My Lords, so far as the first part of the noble Lord's supplementary question is concerned, he will recall that on a number of occasions during our debates I paid tribute to the progress which had been made by British Telecom. This has been due, at least in some measure, to successive Acts of Parliament passed during the lifetime of the present Government which have done so much to induce a spirit of enterprise in the case of British Telecom. As regards answering Questions in the future about the activities of British Telecom when it becomes a private limited company, that will be subject to the general rules of your Lordships' House which will be found, inter alia, in the Companion to the Standing Orders.
Lord Molloy: My Lords, can the noble Lord comment on a point which is genuinely irritating many people? Is he aware that they would like to know how many nationals of foreign countries will now play a dominant role in the control of what we now know as British Telecom?
Lord Cockfield: My Lords, this is going far wide of the Question on the Order Paper, but this matter was discussed at great length in the course of the debates on the Telecommunications Bill, as it then was, and I refer the noble Lord to what was said then.
Viscount St. Davids: My Lords, does the noble Lord have in mind the protections which were put into the Acts on the subject of railways, which finally resulted in those disgraceful vehicles which became a public joke—the parliamentary train? Will the noble Lord take great care that we do not have, as a further modern joke, the parliamentary telephone box?
Lord Cockfield: My Lords, I am not an authority on the history of the early railways in the way that the noble Viscount is.
Lord Ferrier: My Lords, does the noble Lord agree that at this moment there is an element of transition about the whole practice of operating telephones?
Lord Cockfield: My Lords, I do not entirely follow the point that my noble friend has in mind, but if there

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is a specific point to which he wishes to draw my attention I should be only too glad to discuss it with him.
Lord Glenamara: My Lords, will the noble Lord say whether he considers it a gain or a loss to democracy that British Telecom should become answerable to a body of shareholders rather than to both Houses of Parliament, as it is today?
Lord Cockfield: My Lords, I think that the noble Lord misunderstands the position when he refers to British Telecom being answerable to both Houses of Parliament. The fact of the matter is that all experience shows that when an enterprise of this character is transferred to the private sector, its efficiency of operation improves.
Lord Glenamara: My Lords, will British Telecom, when it is privatised, report to Parliament, and will Members of Parliament be able to ask questions about it?
Lord Cockfield: My Lords, the noble Lord's question has nothing whatever to do with the Question on the Order Paper.
Lord Glenamara: My Lords, will the noble Lord nevertheless answer it? It has great bearing on the noble Baroness's Question and on her supplementary question.
Lord Cockfield: My Lords, if the noble Lord wishes to ask a question of this kind, perhaps he will place it on the Order Paper.
Lord Glenamara: My Lords, then the answer is no.

Treasure Trove
2.52 p.m.
Lord Gainford: My Lords. I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government on what criteria the Treasure Trove Reviewing Committee makes an ex-gratia reward to finders of treasure trove.
Lord Cockfield: My Lords, it is the job of the Treasure Trove Reviewing Committee to ensure that the valuation made by the British Museum of any hoard of treasure trove to be retained by a public museum corresponds to a sum that might be paid for it at an open market sale by a willing buyer to a willing seller. Where finds have been promptly and fully disclosed to the authorities, the sum will be paid to the finder as an ex-gratia reward, but in cases where finds have been concealed, decisions on whether or not a reward should be paid, and on the size of any such reward, are made by my right honourable friend the Chief Secretary to the Treasury.
Lord Gainford: My Lords, I thank my noble friend the Minister for that Answer. Arising out of it, what is
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the simplest and easiest way for members of the public to find out whether or not something that they may have found is treasure trove?
Lord Cockfield: My Lords, a find that is a find of treasure trove should be reported to the coroner. Usually, the easiest way of doing this is to report it to the police. Press notices were in fact issued by the Treasury on this matter on 20th June this year; and a further press notice was issued on the same day. I shall let my noble friend have copies of these if he is interested.
Lord Bruce of Donington: My Lords, in order that the zest of those seeking treasure trove may continue unabated, will the noble Lord, from his great knowledge of the matter, confirm whether any payments will be free of all taxation?
Lord Cockfield: Yes, my Lords, in the normal way, the payments would be free of tax. But, of course, if subsequently they formed part of a deceased's estate, they might in that respect then be liable to capital transfer tax.

Salmon Fishing
2.54 p.m.
Lord Gisborough: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they intend to introduce a salmon tagging scheme and to ban monofilament and drift nets for salmon.
The Minister of State, Ministry of Agriculture, Fisheries and Food (Lord Belstead): My Lords, the examination by officials of salmon tagging, which I announced in reply to a Question from my noble friend Lord Ridley on 1st March, is being pursued in consultation with representatives of a number of interests, including salmon farmers and traders who would be significantly affected. A number of problems have been identified and are being investigated urgently.
The use of monofilament nets and drift nets for salmon fishing around the coast of England and Wales is strictly controlled by the water authorities. They have powers to make by-laws prescribing the type and construction of nets which may be used in their areas, depending on local circumstances.
Lord Gisborough: My Lords, I thank my noble friend the Minister for that full reply. Would he agree that the maintenance of salmon stocks for anglers is vital for the rural economy in many parts of the country? Will he, in particular, look into the position of the Yorkshire Esk, where salmon have been virtually wiped out by armed and masked gangs of illegal netsmen?
Lord Belstead: My Lords, I agree with my noble friend about the importance of preserving salmon stocks, which underlies his Question on the Order Paper. I do not think that I should give a reply to my

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noble friend's second supplementary question. I believe I am right in saying that a public inquiry opened on 9th July into the question of the Yorkshire Water Authority making a by-law on the Esk. My right honourable friend the Minister of Agriculture, Fisheries and Food is in the position of having to give a final decision in the matter.
Lord Grimond: My Lords, can the Minister state the up-to-date position in Scotland? Will he tell the House what are the arguments for allowing monofilament nets to be used at all?
Lord Belstead: My Lords, so far as the first part of my noble friend's Question is concerned, which the noble Lord, Lord Grimond, asks me about, we feel strongly that the question of whether or not we can achieve a salmon tagging system is a Great Britain matter. I am happy to be able to report to the House that whereas, after I replied to my noble friend Lord Ridley on 1st March, working groups of interested parties were set up separately for Scotland and for England and Wales, those working groups have come together in a Great Britain working party. I am sure that this is the right way to proceed.
So far as the second part of my noble friend's Question is concerned, to which the noble Lord refers, I think I am right in saying that it is already unlawful in Scottish waters to fish for salmon with drift nets, of whatever material, set from a boat. It has proved difficult to enforce that ban, and my right honourable friend the Secretary of State for Scotland will be considering use of the enabling power in the Inshore Fishing (Scotland) Act 1984 to make an order prohibiting the carriage of monofilament nets in fishing vessels.
Lady Saltoun: My Lords, can the noble Lord say how many fishery protection vessels we now have patrolling our coasts?
Lord Belstead: My Lords, I must apologise to the noble Lady; I do not have that answer with me. I wonder whether I may write to her on the point.
Lord Cledwyn of Penrhos: My Lords, the consultative paper on this subject was, I understand, published in July 1981—exactly three years ago. Can the noble Lord say when a definitive statement is to be made by his department on the question of tagging and on the nets, in view of the time that has passed since the report was published? Secondly, can he tell the House what would be the effect on fishing enterprises of banning these nets? I understand that there are complications here, and I should be grateful if he would enlighten us upon them.
Lord Belstead: My Lords, if I may take the second point first, I have just replied to the noble Lord, Lord Grimond, about the situation in Scotland, which clearly falls to my right honourable friend the Secretary of State. As to the use of monofilament nets by those who are catching fish in England and Wales, this is really a matter for the water authorities. As the noble Lord will know, the Welsh Water Authority has seen fit, in parts of its area, to ban the use of monofilament nets in relation to salmon fishing.
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The noble Lord is, of course, absolutely right in saying that the Ministry of Agriculture reported on the matter of tagging in 1981. It is fair for me to say that it was not until last year that the salmon sales group of the former National Water Council came out with a definite recommendation for tagging. We really have tried to move as quickly as possible since then. I shall not go over the ground that I have explained in the last few minutes, but there is just one point that I should put to the noble Lord; I am sure that he is well seized of it. The really difficult point confronting us, and all the various salmon interests, is what on earth to do about imported fish, if one has tagging. It is this that we are very much hung up on at the present time.

Business
Lord Denham: My Lords, at a convenient moment after 3.30 p.m. my noble friend the Leader of the House will, with the leave of the House, repeat a Statement to be made in another place on GCHQ.
This will be followed by my noble friend Lord Gray of Contin who, again with the leave of the House, will repeat a Statement on the rate support grant for Scotland 1984–85.
It may be for the convenience of the House if I announce that dinner will he available this evening at 7.30.

Overseas Trade
2.59 p.m.
The Lord President of the Council (Viscount Whitelaw)The Lord President of the Council (Viscount Whitelaw) rose to move, That a Select Committee be appointed to consider the causes and implications of the deficit in the United Kingdom's balance of trade in manufactures; and to make recommendations.
The noble Viscount said: My Lords, the suggestion that the House should appoint a Select Committee on overseas trade was first put forward by the noble Lord, Lord Ezra, in the course of a debate on an Unstarred Question on 10th November last year. Discussions through the usual channels have shown that there is widespread support for the setting up of such a Committee. I have accordingly tabled the Motion in my name. If the House agrees to this Motion, it will be for the Committee of Selection to meet and to propose the names of noble Lords to serve on the Committee. A further Motion will then be brought before your Lordships appointing the Members of the Committee and giving them the necessary powers. It is hoped that the Committee will be able to hold one meeting before the summer Recess and that the whole of the Committee's inquiry will be completed within a year. I beg to move.
Moved, That a Select Committee be appointed to consider the causes and implications of the deficit in the United Kingdom's balance of trade in manufactures; and to make recommendations.—(Viscount Whitelaw.)
Lord Hatch of Lusby: My Lords, may I for one moment draw to the attention of the noble Viscount the Leader of the House the fact that on many occasions, including that which he mentioned—the debate on the Motion of the noble Lord, Lord Ezra—a

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number of us have drawn special attention to the connection between the deficit in our manufacturing trade and trading relations between this country and the third world market, which at present is virtually closed. Can I ask him, when he is giving a remit, as I imagine he will be, to this Committee, to bear in mind especially the relevance of this aspect of the subject?
Viscount Whitelaw: My Lords, I can answer the noble Lord best by saying that, very naturally, how the Committee proceeds will be a matter for the chairman of the Committee and its members, bearing in mind of course the terms of reference which will be set down for them.
Lord Wigoder: My Lords, on behalf of my noble friend Lord Ezra I should like to say how much he appreciates the care, courtesy and reception that has been given to his suggestion.
On Question, Motion agreed to.

Building Bill [H.L.]
The Lord Chancellor (Lord Hailsham of Saint Marylebone): My Lords, I understand that no amendments have been set down to this Bill and that no noble Lord has indicated a wish to move a manuscript amendment or to speak in Committee. Therefore, unless any noble Lord objects, I beg to move that the order of recommitment be discharged.
Moved, That the order of recommitment be discharged.—(The Lord Chancellor.)
On Question, Motion agreed to.

Parliamentary Pensions etc. Bill
3.3 p.m.
Viscount Whitelaw: My Lords, I beg to move that this Bill be now read a second time.
I should make clear at the outset that the Parliamentary Pensions etc. Bill is of very limited direct relevance to Members of this House. It is mainly concerned with the pension benefits and contributions from salary to be provided for Members of the House of Commons, and it has been drawn up to meet the needs of members of an elected chamber. The Bill does however also make changes to the supplementary pension scheme for Ministers and office-holders, and is therefore of importance to noble Lords who are Ministers—or hope to become Ministers—and who choose to join the scheme.
The proposed improvements to pension benefits derive from the Twentieth Report of the Top Salaries Review Body, published in May 1983. These recommendations were adopted by resolution of the House of Commons in July last year, with the exception that the rate of contributions to be paid by Members should be 9 per cent. of salary instead of 8 per cent., as the review body had recommended.
During the preparation of the Bill, the trustees of the Parliamentary Contributory Pension Fund, and other interested Members of the House of Commons, made a number of suggestions for modifications of the scheme to take account of the special character of a
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parliamentary career, many of which my right honourable friend the Lord Privy Seal has been able to include in the Bill. The Bill therefore represents the result of a long process of close consultation.
The parliamentary pension scheme is at present embodied in two principal Acts, the Parliamentary and Other Pensions Act 1972 and the Parliamentary Pensions Act 1978. These Acts have been amended on several occasions, and the present Bill consists largely of further amendments; hence its apparent complexity. I would be happy to make available the Notes on Clauses to any noble Lord who would like to have more detailed information.
I turn now to a brief description of the main provisions. The Bill proposes an increase in the contributions paid by Members of the House of Commons and Ministers and other office-holders from 6 per cent. and 5 per cent. of salary respectively to 9 per cent. A contribution of 9 per cent. is more than double the national average for pension schemes in the private sector, and is clearly in line with the policy—announced in the 1983 manifesto—that members of public sector pensions schemes should pay realistic contributions towards their index-linked benefits. The increase in contributions will be implemented in annual stages so that the full rate of 9 per cent. will come into force in January 1987, when the final increase in the pay of Members of the House of Commons, agreed last July, is implemented.
Secondly, the Bill aims to provide a rate of accrual which will yield benefits appropriate to the career of a Member of Parliament. The pension accrual rate is to be increased from one-sixtieth of annual salary per year of service to one-fiftieth.
The TSRB recommended that it would not be appropriate to apply the improved accrual rate retrospectively to past service. This is in accordance with the long-accepted principle that improvements in pension scheme benefits should apply only to the future service of current members of the scheme. In order to provide a degree of flexibility to Members of the House of Commons in planning their pension arrangements, however, a limited facility is being made available for current Members to convert their back service to the new accrual rate at 40 per cent. of the cost to the fund. This facility is not open to Ministers or office-holders in this House.
Another area which has given rise to concern is the arrangements for early retirement. As your Lordships will know, it is not always as easy to plan the date of one's retirement when one is a Member of Parliament or a Minister or office-holder, as it is in other employments.
Lord Stoddart of Swindon: My Lords, the Minister can say that again.
Viscount Whitelaw: In particular, a career may come to an end at the dissolution of Parliament.
Lord Ennals: Or before, my Lords.
Viscount Whitelaw: My Lords, the Bill therefore contains certain provisions intended to give flexibility for those who retire before the age of 65, whether by choice or of necessity. I can explain these provisions more fully if any noble Lord wishes.

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The other provisions of the Bill include the abolition of the qualifying period of service necessary to receive benefits; an increase to the maximum permitted by the Inland Revenue in the lump sum which may be obtained by commutation of part of a pension; the provision of pensions for the widowers of female Members or office-holders on the same basis as those for widows; and various other minor changes.
The Bill also contains provisions which are not directly connected with the parliamentary pension scheme. One of these gives United Kingdom representatives to the European Assembly severance grants on the same basis as those payable to Members of the House of Commons, on a scale set out on page 18 of the Bill.
Clause 13 is of especial interest to certain Members of this House. It provides for Ministers and other office-holders in this House to receive a payment of one-quarter of final salary on ceasing to hold office. This implements a 1983 recommendation of the Top Salaries Review Body. I indicated to the House on 25th July last year the Government's intention to bring forward legislation on this matter. As the TSRB recognised, loss of office can come suddenly to a Minister in either House. Unlike his counterpart in another place, a Minister in this House has no salary as a Member of the House to fall back on in such circumstances, and he may have difficulty in resuming a former career at short notice.
The TSRB recommended a payment equivalent to three months' salary in order to ease the process of adjustment to loss of the income that goes with office, and the Government have accepted that recommendation. As I indicated to noble Lords last July, for the Chairman and the Principal Deputy Chairman of Committees, the recommendation to make severance payments to Ministers and office-holders could have been implemented without legislation. Nevertheless, in order to avoid possible complications should questions arise at some future date over the aggregation of periods of office as Minister and Chairman or Principal Deputy Chairman of Committees, it is proposed to cover them all in the legislation.
It is inevitable that the arrangements Parliament makes for its own pay and conditions will attract a good deal of publicity, and perhaps it is almost equally inevitable that whatever is proposed will be criticised. There is however a legitimate and justifiable public concern that Parliament should be seen to be responsible and circumspect in proposing improvements in our own conditions. The Government believe that the present Bill acknowledges the unique character of a parliamentry career and at the same time reflects the cautious approach towards improvement which the public expects. I therefore commend it to your Lordships and ask the House to give it a Second Reading.
Moved, That the Bill be now read a second time—(Viscount Whitelaw.)
3.11 p.m.
Lord Ponsonby of Shulbrede: My Lords, I thank the noble Viscount for so succinctly explaining the
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purposes of the Bill. As the noble Viscount said in his introductory remarks, the Bill as it stands is of little relevance to Members of this House, but there is a great deal of interest in the Bill by Members of this House, particularly by those Members who were formerly Members of another place. Indeed, one of the faults of the Bill will be seen by many to be that it does little, if anything, for those who are now in this House and who were previously Members of another place.
Let me say in opening that we give a general welcome to this Bill and to the improvements in the pension scheme proposed by the Bill. However, one regrets that the Bill does not go further. Part of this of course is accounted for by the fact that the full proposals of the Top Salaries Review Body were not implemented, with the effect that MPs' salaries are lower than proposed in the review body's report and that has the consequential effect that the proposed pension will be lower than envisaged in the report. The proposal to increase the amount of pension contributions over a period of years rather than bringing it in immediately, is inevitable in view of the decision which was taken in another place about the level of MPs' salaries, and it is obviously the only practicable solution to this particular problem. But of course it will result in a lower pension at the end of the day.
As I said, we generally welcome the proposals but of course anomalies will still exist, and as the noble Viscount has said there is a particular concern about the position of a Member who achieves the 20 years' service and retires before the age of 60, as opposed to the Member who achieves his service after the age of 60. All Members, as of right, should receive their pension at the age of 60 irrespective of whether they have achieved the 20-year qualifying period for the full pension to be paid immediately.
The noble Viscount rightly pointed out that Members of another place have difficulty in fixing their retirement date. This of course is a particular problem for those who find themselves compulsorily retired under the age of 60. A Member in his late fifties will find difficulty in finding an alternative job. The Bill provides for a Member who has retired forcibly at any age over the age of 50 to receive an actuarially reduced pension. But that actuarially reduced pension will be a very substantially reduced pension, and one raises the question of whether such a Member should be entitled, for example, after the age of 55, to receive a full pension, rather than an actuarially reduced one.
The rate of accrual for pensions at one-fiftieth instead of one-sixtieth per year of contribution is welcomed. But as the noble Viscount said in his opening remarks, this is not something which can be back-dated prior to the date of the last election. So for all former Members of Parliament with service before the last election the one-sixtieth principle will apply to their pension as opposed to the one-fiftieth provision. Again, this is something which is causing concern to Members of this House who draw pensions or who will have the right in future to draw pensions because of service in another place. Could we not look at whether there could be some element of retrospection with regard to the basis upon which the pension is calculated?

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There is also the problem of those Members of Parliament who retired before 1964 and before the introduction of these particular arrangements. I know that some special arrangements were made in the past for those who had given considerable service in years gone by to receive a pension, or perhaps I should say a nominal grant. That grant is now £1,000 a year which of course is subject to tax, which means that those former Members of Parliament with considerable service will be receiving something slightly over £10 per week as a pension. One would not have thought that that was a particularly generous payment to them. One would have thought that there was a case for being considerably more generous in this particular area.
I know that many noble Lords think that they are being treated or have been treated in a way that makes them feel that their successors in another place are being treated far more generously than they have been, and that there should be more recognition of the past service of MPs. Another factor of which the Bill, as drafted at present, does not take account is the situation with regard to Members of the European Parliament. As we now have two elected assemblies, it means that people can, and indeed do, follow parliamentary careers both in the United Kingdom Parliament and in Europe. As I understand it, it is the intention that the pension scheme for MEPs is to be brought into line with the pension scheme for MPs. It would seem right that the two should be linked together so that in each scheme membership of the appropriate assembly would count towards total service, and that the benefits of having achieved a full pension after a 20-year qualifying period could be obtained from service in both assemblies added together. Alternatively, perhaps this could be achieved if there were transferability of rights between the two schemes.
As the noble Viscount said in his closing remarks, inevitably what Parliament does with regard to pensions will achieve a good deal of publicity. But that is not to say that we should not do the right thing by those who have rendered service in Parliament, whether in this House or in the other House, and that is something of which the Government should take account. I look forward to an interesting Committee stage.
3.1 p.m.
Lord Diamond: My Lords, as an ex-Member of the other place, and as one whose office and responsibilities were terminated sharply and involuntarily both as to membership of another place and as an office-holder, let me first of all declare that unhappily I have no interest whatever. I am grateful, as we all are, to the noble Viscount for having introduced this Bill and to the noble Lord, Lord Ponsonby, for having gone into it in a certain amount of detail.
However, I find it difficult to think of more than one point which is appropriate for Second Reading. We shall have a Committee stage and all the problems that arise will arise at that stage. On Second Reading one simply has to direct one's mind to the prime question of whether or not it is proper that the other place—because by and large this affects the other place
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—should have an increase in its level of pension entitlement.
Anyone who knows the problems of providing for increases in remuneration or in pension entitlement in another place will know that the barriers are so great and the problems of public opinion so appalling that it is quite impossible to enable Members to have adequate remuneration, adequate services or adequate pension rights. Therefore, in my view, none of your Lordships can have the slightest doubt but that these increases are well merited and still leave Members of another place well behind the kind of remuneration and pension rights that they would receive if they were applying their minds in commerce or professional activities.
Having said that, and looking forward to the details of the Committee stage, I repeat my thanks to the noble Viscount and conclude with the words that Mr. Gilbert might well have used:
"I see in this one for thou and one for thee, but never oh never a one for me".
3.22 p.m.
Lord Bottomley: My Lords, I should like to ask the noble Viscount the Leader of the House a question. Quite rightly, much has been said about those in another place who, unlike many of us, have not benefited. A plea has been made on their behalf and I hope that something can be done for them. Under Clause 12 of this Bill, is it not possible for something to be done to assist them?
Lord Beswick: My Lords, I was asked whether I would intervene for just a few minutes because, as my noble friend Lord Ponsonby said, there are anomalies in this Bill, and it is obvious from the voices that were raised behind him, and indeed from the other side of the House, that there is considerable agreement for the criticism which he was implying. There are those (I think these are the people whom my noble friend Lord Bottomley has in mind) who served in the other place up to 1964, when the pension provisions were first instituted. I believe that it is worthwhile thinking again about the conditions under which some of them entered the House just after the war. It was not a motivation that was prompted by financial considerations. I believe that the salary was £600 and that it rose to £1,000 a year. There was no question of any pension at all.
However, we have gone beyond those days and we are now thinking in terms of pensions. This Bill is about improvements to the provisions that have already been made. I know that some provision has been made to the pre-1964 Members, and I support what my noble friend Lord Bottomley was saying. I wonder whether something more might be done for them. Of course, it is possible for them to appear before a body and to receive an allowance on the ground of hardship. Those people can plead their case. But the sort of people I have in mind and the sort of people who have spoken to me are not given to pleading, and I do not think that we should leave them in that position.
It is not my intention to go into the details as regards the sort of individuals I have in mind, but before the Committee stage perhaps the noble Viscount might give one or two of those concerned the opportunity to

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see him and discuss the matter with him. I am sure that he would view their case with some sympathy, and conceivably something might be done.
Lord Glenamara: My Lords, I do not wish to delay the Second Reading of this Bill. But as someone who served for 25 years in another place and for eight years as a senior Minister, and who was Leader of the House in the other place, I should like to support the point made by my noble friends Lord Beswick and Lord Ponsonby. Up and down the country I suppose that there are upwards of 200 ex-Members of Parliament, some of them in your Lordships' House, who are living in straitened circumstances, and increasingly so. It was difficult to accumulate any savings in those days, but such savings as they have, because of inflation, are worth almost nothing.
I think that it is an affront to such people that we should allow public servants to live in this way. I know that they can go and submit themselves to a means test before a committee and then may receive a small allowance. I do not think that that should be the case. The noble Viscount made the point about retrospection and I encountered the same point from the Civil Service Department when I was working on the same problem. However, the noble Viscount has already breached the retrospection principle in what he has said by allowing Members of Parliament to buy-in previous years' service.
I would make a plea to the noble Viscount (although I do not think it will be dealt with under this Bill) to look at the problem of Members of Parliament who retired before 1964 to see whether, as of right, something can be done to help them, because they should not be subjected to a means test. They are a diminishing number. They are all getting on in years, and many of them are very hard up.
Lord Dean of Beswick: My Lords, I rise very briefly to support the point that has just been made by my noble friend Lord Glenamara and by the two previous speakers. I think it should be made quite clear that not all the Members who retired before 1964 receive that sum of £1,000. Whether such a Member receives it depends on a strict means test and some receive nothing, which is the insulting part about it. In this day and age, if we cannot put that right, there is something entirely churlish about our society, and I hope that this issue will be looked at as a matter of urgency.
Lord Ross of Marnock: My Lords, there is just one other point which I would ask to be taken into consideration. I completely support what has been said on this side of the House about former fellow Members of the House of Commons who retire fairly early. The point I wish to raise is the point about the availability of pension at the age of 60. Would it not be advisable to leave some scope for a certain amount of flexibility?
A colleague of mine who came to Parliament in 1935 was compulsorily retired in 1970 after 35 years' service. His was not the best of constituencies because it was probably the furthest away from London and one of the most difficult constituencies in the country—namely, the Western Isles. He served for 35 years in the House of Commons, was compulsorily retired and at that time was not entitled to a single penny of pension. He had come to Parliament at the
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age of 21 or 22, but he was far away from pensionable age, so when he retired he was completely without resources. No one would argue that the salaries in 1935 were at all adequate, any more than they were in 1945. Could the noble Viscount look at this matter to see whether a little flexibility could be included in the Bill to cover what would inevitably be an exceptional case?
3.29 p.m.
Viscount Whitelaw: My Lords, I am grateful to noble Lords who have spoken, and particularly to the noble Lord, Lord Ponsonby, for the detailed points that he made. I hope to write and answer many of the points that he made before the Committee stage so that we may see where we stand before we reach that stage. If I can help in that way, I shall certainly do so. Equally, I am grateful to the noble Lord, Lord Diamond, for the important points that he made.
The noble Lords, Lord Bottomley, Lord Beswick, Lord Glenamara, and Lord Dean of Beswick, raised the question of the pre-1964 Members of the House of Commons. The noble Lord, Lord Ross, raised a slightly different point. As one who was a Member of that House for nine years before 1964, who was Chief Whip of a party for six years and Leader of the House for another two, it would be absurd to pretend that I did not have a good deal of knowledge of many of the issues that the noble Lords have raised and of many of the individual problems that were put forward. I do not think that it would be right for me to take the time of this House in dealing in detail with some of those points, because obviously a limited number of us are present today who are particularly concerned with this.
Lord Beswick: My Lords—
Viscount Whitelaw: My Lords, I am about to try to help the noble Lord, if he will allow me. Perhaps he will not.
Lord Beswick: My Lords, I want to help the noble Viscount. He reminded us that at one time he was Leader of the House. I had the feeling that, had he not been transported to Ireland, the deputation that I was going to lead to him at that time might have been very favourably received.
Viscount Whitelaw: My Lords, it would be dangerous for me to say that it would have been any better received than it was by my successor. I have nearly always found that all my successors in the different offices I have had have done it better than I did, and probably he did to.
It is important to remember in these cases that, as there was no pension scheme before, none of these former Members in fact ever had the chance to contribute to a pension scheme. They have not been contributors, and that raises a particularly difficult problem so far as their position under a pension fund subsequently established is concerned. Of course I shall be prepared to discuss this with the noble Lords concerned, but up to now that has been the major problem.
I understand, on the question of hardship raised particularly by the noble Lord, Lord Glenamara, that the Bill provides for much greater discretion to the

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trustees of what used to be called—I think it still is—the Members' Fund to deal with such cases, as he and I would know, and there is much greater discretion now. But I have to accept that much greater discretion to deal with hardship raises the problem that the noble Lord, Lord Beswick, put forward, that many of the people concerned do not like having to plead cases of hardship. I think one must accept that.
I should be pleased to discuss this detailed point but I have to come back because I may not be able to succeed in helping as much as my own instincts would like me to do. As the pension fund schemes have come up subsequently, and as these people have not paid contributions, this raises some formidable problems of how to deal with them successfully. But I shall be very pleased to try to see whether I can help in any way.
On Question, Bill read a second time, and committed to a Committee of the Whole House.

Health and Social Security Bill
Lord Denham: My Lords, I have it in command from Her Majesty the Queen to acquaint the House that Her Majesty, having been informed of the purport of the Health and Social Security Bill, has consented to place Her prerogative and interest, so far as they are affected by the Bill, at the disposal of Parliament for the purposes of the Bill.
Read a third time.

GCHQ Cheltenham
3.32 p.m.
Viscount Whitelaw: My Lords, with permission, I shall repeat a Statement which is being made by my right honourable friend the Prime Minister in another place on the subject of GCHQ.
"Mr. Speaker, with permission, I should like to make a Statement on GCHQ.
"Following the judicial review of the Government's action in respect of GCHQ, Mr. Justice Glidewell, in giving his judgment in the High Court, on four of the five grounds on which the Council of Civil Service Unions had based their case found in favour of the Government.
"The judge confirmed that the Minister for the Civil Service has the right to vary the terms and conditions of service of civil servants so as to exclude membership of trade unions and that an instruction may be given under Article 4 of the Civil Service Order in Council 1982 to this effect.
"Nevertheless, the judge concluded that, because of the lack of prior consultation with the unions concerned, the instruction given in this instance was invalid. His finding did not affect the certificates issued by my right honourable and learned friend the Secretary of State for Foreign and Commonwealth Affairs under the Employment Protection Act.
"In view of the implications of this judgment in the field of national security, the Government are appealing against it and are applying to the court later this afternoon for an early hearing of the appeal.
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"The judge indicated that the status quo should be maintained at GCHQ pending consideration of an appeal.
"As the Government will be lodging an appeal later today, it would be inappropriate for me to make any further comment."
My Lords, that concludes the Statement.
Lord Cledwyn of Penrhos: My Lords, we are grateful to the noble Viscount the Leader of the House for repeating the Statement. As the House will appreciate, it raises extremely grave issues. The High Court ruling shows again how important it is that the Government should not ride roughshod over those who are affected by their policies. The necessity to consult is vital, and in this case the judge has ruled that the Government had ignored the rules of natural justice, and that Ministers exercising the royal prerogative through Orders in Council should he subject to the same scrutiny and control by the courts as if statute law were involved.
It is well to bear in mind that after the ban itself was announced unilaterally by the Government the unions offered a basis for a reasonable settlement, the so-called "no strike agreement". At the time, this formula was widely approved, but the Government, imprudently in my view, rejected it out of hand, thereby making confrontation inevitable and casting doubts upon the loyalty of the people employed at GCHQ.
In his ruling the judge gave some good advice when he said:
"I am confident that Ministers will give proper consideration to any further representations to them, and I cannot be sure that they will inevitably arrive at the same decision as before.".
While we note that the Government are to lodge an appeal, and that therefore there are extensive matters with which one cannot deal today, does the noble Viscount not agree that the opportunity now exists to enter into negotiations with the civil service unions forthwith in order to arrive at a sensible and acceptable arrangement, and to avoid protracted and expensive legal proceedings? If they do this it will be to their credit as well as that of the unions concerned, and very much in the public interest.
Baroness Seear: My Lords, we on these Benches would wish also to thank the noble Viscount the Leader of the House for repeating the Statement. I personally must make my apologies for not being in my seat when he began his speech, but I had seen the previous legislation come on the screen and assumed that the Statement was not going to be made immediately.
We recognise that there is an appeal and that therefore this matter is sub judice, but the fact that it can be said in a court of law that the Government have acted contrary to natural justice is something which all of us must deplore. It should be assumed, surely, that any Government would fall over backwards to make certain that no such criticism could possibly be levelled against them.
We on these Benches could hardly be described as the poodles of the trade unions, and yet when this decision was made in the case of GCHQ we urged strongly that the Government were mistaken in the

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way in which they were acting, and we would certainly have urged that joint consultation at least should take place, as the judge has now said, before the decision was taken. The effect on industrial relations can only be deplorable, especially in dealing with a union which has a highly responsible record.
Viscount Whitelaw: My Lords, I am grateful to the noble Lord and the noble Baroness for their response to the Statement. May I first make my apologies and those of my noble friend the Chief Whip to the noble Baroness, Lady Seear, for the fact that we did not warn her in time before the Statement was made? The fault was entirely ours. I hope we shall not be accused of discourtesy. I do not think that either of us has the habit of being discourteous, and I apologise to the noble Baroness.
On what the noble Lord and the noble Baroness have said, I am advised very strongly that, as some of the matters that they have raised are likely to be the basis of the appeal that the Government are going to make, it would be highly improper for me in these circumstances to reply to their particular criticisms. I think it would also be right for me to say that, because I am not going to reply to them for that reason, it is not necessarily the case that I accept them.
Lord Dean of Beswick: My Lords, is the noble Viscount aware that on each occasion when the question of GCHQ has been raised in the Chamber from this side of the House it has been raised by me? As recently as a fortnight ago I brought to the notice of the Government that they had been found guilty by a committee of the ILO of breaking agreements to which we have been long-time signatories. They have now been found guilty, at present—though the appeal may decide otherwise—of being in breach of the law of this country. Does this not appear to be a case where the Government are in agreement with the referee so long as he always blows the whistle in their favour? I would urge the noble Viscount, who I know is a fair-minded man, that the best way to resolve this situation is not in the courts, but by arriving at an agreed solution with the trade unionists involved. That would avoid the appalling damage that would linger for a long time if the matter were decided in the courts in an adverse manner to those people.
Viscount Whitelaw: My Lords, I think it would be fair for me to say that since the Government feel that this judgment has substantial implications for national security, they are exercising their right to appeal, as I am sure has been the case with all Governments. The noble Lord would not deny that the Government have the right to appeal, just as the unions exercised their right to go to court. That is the position, and it is not unique in any way.
Lord Mottistone: My Lords, would my noble friend not agree that after the clever men of the Civil Service unions had unwisely involved GCHQ in their selective strikes at the beginning of the last Parliament, the action that the Government took in relation to trade union representation was inevitable? Does my noble friend not agree also that in the circumstances any
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preliminary discussion with trade unions would have led to unnecessary argument in a very sensitive area of national security?
Lord Elwyn-Jones: My Lords, while there is far more latitude in regard to the application of the sub judice rule to proceedings in the Court of Appeal, nevertheless the rule does apply especially to the desirability of avoiding sharp statement of facts that are in dispute in the case, as the noble Lord is now endeavouring to do.
Viscount Whitelaw: My Lords, I shall answer my noble friend as neutrally as I felt I had to do in the case of the noble Lord, Lord Cledwyn, and the noble Baroness, Lady Seear, and, indeed, the noble Lord, Lord Dean. It would he improper to do more, in view of the appeal; in this I am supported by no less an authority than the noble and learned Lord, Lord Elwyn-Jones. In the circumstances it would be wrong for me to comment either way on these matters.
Lord Diamond: My Lords, while thanking him very much indeed, may I ask the noble Viscount for his assurance that when the further proceedings are terminated—not necessarily in the court to which they are going at the moment—there will be at least an opportunity for further discussion, by way of a Statement being made, though with possibly a greater opportunity than that?
Viscount Whitelaw: My Lords, I can do no more than commit myself to the noble Lord, Lord Diamond, and to the fact that there will inevitably be a Statement at that stage. I expect that it will be at least a Statement, though probably it will amount to considerably more.
Baroness Phillips: My Lords, may I ask the noble Viscount the Leader of the House a very simple question? He stated that the judicial inquiry had found in favour of the Government. Why, then, is it necessary to appeal?
Viscount Whitelaw: My Lords, the noble Baroness will appreciate that while the judge found in favour of the Government on four of the five counts, he did not find in favour of them—in fact he found against them—on the lack of prior consultation with the unions concerned.
Lord Mountgarret: My Lords, may I ask my noble friend whether the Government in general and the Prime Minister in particular took legal advice on this matter before considering the propriety or legality of the situation which has now arisen? If they did, what was the advice so given; and if they did not, why not?
Viscount Whitelaw: My Lords, it would be wrong of me to reply to that, except to say that I cannot imagine any Government that I have ever been in not taking some legal advice on all their actions very properly from their law officers.

Health and Social Security Bill
3.43 p.m.
Consideration of amendments on Third Reading:
Clause 1 [Supply etc. of optical appliances]:
Lord Mottistone Lord Mottistone moved Amendment No. 1:
Page 2, leave out lines 29 to 32 and insert—
("(3D) No order under subsection (3A) above shall be made unless a draft of the order has been laid before and approved by resolution of each House of Parliament.").
The noble Lord said: My Lords, I move this amendment on behalf of my noble friend Lord Cullen of Ashbourne, who had down a similar amendment on Report; but, in the event, when the amendment was called by my noble and learned friend on the Woolsack, my noble friend Lord Cullen was stranded at the Table, having very nearly won a Division on the previous amendment. My noble friend Lord Cullen had not told me that he was proposing to move this amendment and I presumed, wrongly, that he had made some arrangements with my noble and learned friend the Lord Chancellor. In the event that was not so and thus I thought it appropriate to move this amendment on behalf of my noble friend who, your Lordships I am sure will be sad to hear, is not able to be with us because he has been stricken with pleurisy. However, he told me on the telephone this morning that he was getting better.
The purpose of this amendment is to make sure that the very important regulations which will be introduced in this part of the Bill receive a very full airing. The kind of things that will go in the regulations to which it applies are not very clear to us at this stage, and it is thought that it would be helpful if my noble friend on the Front Bench could give us an indication as to what will be done before the order is laid. For example, will there be any opportunity for interested parties, in particular professional opticians, to discuss what is to be laid before in fact it is laid? If my noble friend could give us such an assurance, it would be extremely helpful, and the need to make sure that the resolution becomes an affirmative one would not then be quite so important. In the event that it will go blind before the House as a negative order without, in the usual nature of things, very much time to pray against it, then it would be preferable if it could be an affirmative order. I beg to move.
Lord Ennals: My Lords, having been associated with the noble Lord, Lord Cullen, on the original amendment to which the noble Lord, Lord Mottistone, has referred, I strongly support this amendment. I hope that the Government will be able to give a conciliatory and co-operative answer, because the issues covered by this—which I shall not go into in any detail, as they have been dealt with in detail by the House—are of great and grave importance and have caused considerable concern to many organisations and individuals. This is one of those cases where an affirmative resolution of both Houses of Parliament would be appropriate. I want to give my full support to this amendment.
The Earl of Caithness: My Lords, as I am sure my noble friend Lord Mottistone will remember, notwith-
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standing what happened on Report, this amendment is identical to one that was moved at the Committee stage. He spoke on that amendment, which was in the name of my noble friend Lord Cullen. The affirmative resolution procedure is by no means the usual method of parliamentary scrutiny. The vast majority of orders or regulations are subject to annulment in pursuance of a resolution of either House. It has been suggested that the affirmative resolution is inappropriate in this case because the necessary safeguards for the consumer would be contained in these orders. That is the case, but I fail to understand why a vote to annul orders should be inferior to a vote to approve them.
In both cases the essence of scrutiny is in the debate and in whether, during the course of the debate, opponents of the proposals can persuade other Members to their way of thinking. The quality of the argument is surely the important factor, not the terms of the Motion before the House. As my noble friend Lord Cullen said at Committee stage, they would have to be examined carefully, and we welcome that. We are still working on the proposed orders governing unregistered dispensing of optical appliances, but we hope to let interested bodies see them in the near future.
I can assure my noble friend that there is consultation going on and that we are consulting with optical consumer bodies and other groups on the contents of the order. I suspect that, like the Bill itself, they will go too far for some noble Lords and perhaps not far enough for others. It is nice to see the noble Lord, Lord Northfield, in his place. Doubtless, he will say that we are not going far enough. The orders will certainly specify what appliances can be sold; they will require that frames are not made from dangerous materials and that lenses accord to a prescription within the tolerances required by the British Standards, together with a variety of other matters aimed at ensuring safe and serviceable glasses.
These orders will have to come before your Lordships' House and be debated if noble Lords feel that they are not appropriate. This surely is safeguard enough. Acceptance of this amendment would also make future updating more difficult. For example, these orders will invoke the British Standard for spectacle lenses. British Standards are updated in the light of technological change and the orders should reflect such changes. Non-controversial technical amendments to the original orders of this sort should not be discouraged because of the need to find parliamentary time for an affirmative resolution debate. To require the affirmative resolution procedure in this instance will merely add delay to changes which the public clearly want to see and I cannot believe it is necessary or desirable. I hope that in the light of this my noble friend will agree with our noble friend Lord Cullen who withdrew his amendment at Committee stage.
Lord Mottistone: My Lords, I am grateful to my noble friend for giving me the assurances that I sought that there is consultation with the interested parties including the professional opticians in the run up to the production of the order. I would say one other thing. It is that I agree with my noble friend that, providing one is alert enough to spot it, a negative

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order, by being prayed against, can be handled in much the same way as an affirmative order; but there is one qualification. That is that if it is a prayer it tends to find its way into business at a time when the House is not necessarily as full as it is at other times. I got one on a Friday. Affirmative orders tend to be either in the main business or possibly in the dinner hour when there are a lot of people around; so that if you have something special to say you get more people to listen. That is an important point. However, I am most grateful to my noble friend for saying that they will give this matter full consultation. I trust that that will continue and I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 3 [Use of titles]:
The Parliamentary Under-Secretary of State, Department of Health and Social Security (Lord Glenarthur)The Parliamentary Under-Secretary of State, Department of Health and Social Security (Lord Glenarthur) moved Amendment No. 2:
Page 5, line 16, after first ("the") insert ("taking or").
The noble Lord said: My Lords, it may be convenient to your Lordships if in moving this amendment I speak to Amendments Nos. 3, 4, 6, 7, 8, 9, 10, 11 and 12.
Amendment No. 3: Page 5, line 16, at end insert ("(either alone or in combination with any other words)").
Amendment No. 4: Page 5, line 20, after ("he") insert ("took or, as the case may be,").
Amendment No. 6: Page 5, line 20, leave out ("not have been reasonable") and insert ("have been unreasonable").
Amendment No. 7: Page 5, line 22, after ("his") insert ("taking or, as the case may be,").
Amendment No. 8: Page 5, line 37, after ("the") insert ("taking or").
Amendment No. 9: Page 5, line 37, at end insert ("(either alone or in combination with any other words)").
Amendment No. 10: Page 5, line 41, after first ("it") insert ("took or, as the case may be,").
Amendment No. 11: Page 5, line 41, leave out ("not have been reasonable") and insert ("have been unreasonable").
Amendment No. 12: Page 5, line 43, after ("its") insert ("taking or, as the case may be,").
In the course of the debate at Report, my noble friend Lord Mottistone suggested a number of very similar amendments. Several points were raised suggesting why the clause should take further the protection offered to the title, "optician". No doubt we shall return to these arguments when we discuss Amendment No. 5 in due course. Suffice it to say at present that we have not been persuaded to make any substantive change to the clause. However, in the light of my noble friend's remarks and those of others, we have given further consideration to the helpful suggestions on drafting that were made at Report stage.
On reflection, we now see merit in the new subsection added to Section 22 of the 1978 Act being drafted in a similar style to those of the existing section. Otherwise, we see a danger in future that those who have to interpret the statute may look for substantive reasons lying behind the different wording used in different places of the section when none exists. I hope your Lordships will find the Government's change of heart on this matter, albeit at a late stage, acceptable and helpful. I beg to move.
Lord Mottistone: My Lords, I am grateful to my noble friend the Minister for having taken up what we did at Report stage and for improving on the wording in a very small ways and otherwise doing very much the same thing. If it would be for the convenience of your Lordships, I should like now to speak also to Amendment No. 5.
Amendment No. 5: Page 5, line 20, after ("title") insert ("with the addition of the word "unregistered" as a prefix and in combination with no other words, and").
I put down this amendment as a safeguard in the event that my noble friend did not do the right thing. I am going to be very happy not to move it, and to welcome very much what we have. I thank my noble friend for what he is doing.
Lord Ennals: My Lords, it always seems to me that if one thanks the noble Lord for what he has done, he is more likely to do something when one is about to make a request. Let us recognise that the Minister listened very carefully to what was said on both sides of the House and has made a considerable improvement. With that expression of thanks to him, I shall reserve my further words for what I want him still to do.
On Question, amendment agreed to.
Lord Glenarthur Lord Glenarthur moved Amendments Nos. 3 and 4.
[Printed above.]
On Question, amendments agreed to.
[Amendment No. 5 not moved.]
Lord Glenarthur Lord Glenarthur moved Amendments Nos. 6 to 12:
[Printed above.]
On Question, amendments agreed to.
Clause 7 [Professional remuneration in National Health Service]:
Lord Ennals Lord Ennals moved Amendment No. 13:
Page 13, leave out lines 1 to 8.
The noble Lord said: My Lords, this is the occasion for me to ask the noble Lord to respond to the generosity which I showed on his generosity. The noble Lord, Lord Kilmarnock, and I seek to amend Clause 7 by deleting the last subsection. This is the retrospective element of the clause. We believe that there are very important issues at stake here and I would beg your Lordships to hear me for a few minutes on the subject. First, I must welcome the letter which the noble Lord, Lord Glenarthur, wrote to the noble Lord, Lord Renton. He kindly sent a copy to me, which I received recently. The letter showed that putting in a few commas and a few "a"s and "b"s, at least, sought to make rather greater sense of a clause which at its worst was gobbledegook and now, at its best, is at least comprehensible. That does not mean that I am satisfied with it. The fact that its wording is now comprehensible does not mean that, having comprehended it, one therefore approves of it. Nevertheless, as before, we must be grateful for small mercies, and one of the small mercies is to have before us something which those who read it will be able to understand—something which none could in its original form.
The first issue was the question of the actual text. The second issue that I should like to raise concerns the propriety of maintaining the subsection in view of the case pending before the Court of Appeal. I argued at Report stage and in Committee (although only in its latter stages) because I think that we were in some doubt then—and the Minister was in even greater doubt—as to where we stood legally. The House will recall that the Pharmaceutical Services Negotiating Committee challenged the Government's interpretation of the existing regulations. They did so because retail pharmacists are unhappy about the Government's declared intention to claw back some £37 million of discounts received by pharmacists on medicines purchased from wholesalers.
This proposed clawback would stretch back nearly four years to October 1980. As I have said, the PSNC has questioned the Government's right to take back money in this fashion, and the Court of Appeal has still to rule on this question. No doubt in law, the Secretary of State may alter the drug tariff prospectively; and the courts have ruled to that effect. But it has never been conclusively decided in the courts that the Secretary of State is entitled to alter the drug tariffs retrospectively; that is to say, to take back money earned in the past. It is for this reason and the inevitable feeling of your Lordships that retrospective legislation has grave principles involved—
Lord Morris: My Lords, I just wanted to say to the noble Lord, Lord Ennals, that surely taxation is retrospective? It is not prospective, and that is a perfectly acceptable practice.
Lord Ennals: My Lords, if I may say so, taxation has been with us for a very long time. This is not a Bill to introduce a form of taxation, income tax or any other form of taxation. This is a Bill which is instituting measures which would retrospectively authorise the Government to do something which the courts have questioned, or rather which is still questioned by the courts, as to its legality. I would submit that there is no similarity at all.
I used the word "conclusively" because, although the Government won their case in the High Court, the case is pending before the Court of Appeal. It would be very nice if there were a case before the Court of Appeal about whether taxation is permissible or not—and perhaps the noble Lord would care to take the matter to court. Moreover, the judge in the High Court, Mr. Justice Mann, expressed his doubts as to the legality of the retrospective alteration of the drug tariff. He did not actually decide the case in that sense, so the Government won on a technicality and not on the main issue of the case which was never in fact decided, but no doubt will be decided when the matter is brought forward for appeal.
In considering the propriety or otherwise of the subsection, I would ask your Lordships to bear in mind all the facts. I regret to say that the Minister's account of this affair was perhaps not as clear as it might have been during the Report stage. It is true that the PSNC pursued legal proceedings after the Government had announced their intention to add Clause 7 to the Bill. The Government announcement came after another group of pharmacists, the so-called
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"post-1980 pharmacy contractors" had instituted legal proceedings against the Government on the issue of the retrospection proceedings which were subsequently taken over by the PSNC.
The noble Lord, Lord Glenarthur, referred obliquely to the post-1980 contractors, but he did not spell out the obvious fact that the Government were afraid that the law was not clear, that the pharmacists' challenge might succeed, and that this would deprive the Treasury of a large amount of money. He might even have feared that it would deprive the DHSS of a large amount of money if the Treasury were not able to get it back themselves. Why else did the Secretary of State stop clawing back the discounts? Why is he right now not clawing them back? It is because he has doubts as to whether it is legal.
Therefore, although the issue is before the courts, this clause is seeking to make legal something already carried out which was questionably legal and which is still questioned in the courts. Of course, all governments must be assiduous in their handling of public money—it does not take an ex-Minister to know that—but that does not detract from the necessity of governments to deal fairly with their contractual partners, in this case the pharmacists of the National Health Service and also another profession which I mentioned at the Report and the Committee stages but not so far today; namely, the opticians. The Government would have behaved with more propriety if they had waited until the current law was clarified by the courts before changing the law by means of this Bill.
The third and last issue I would like to consider is the familiar one of the general principle of retrospective legislation. We have debated this before, and I shall therefore be extremely brief, but I believe that the principles are very important indeed. Most, if not all, retrospective legislation is undesirable. That does not mean that retrospective practice is necessarily undesirable, because that is the method by which payment is made by the DHSS to some of the contracting organisations—the pharmacists and the opticians in this case. I would submit that it is an abuse of power all too familiar, if I may say so, in the current legislation still before your Lordships' House and it is, I believe, unworthy of an upholder of the rule of law.
Perhaps I can illustrate my point by referring to the opticians. The profession dislikes the last subsection of Clause 7. The opticians are worried that the £6 million withheld from their arrears of fees for the period 1978 to 1983 will be denied to them by the Government once the Bill becomes law, as payment for the discounts received by opticians from their suppliers.
It is, I would submit, simply not fair. It is only with this Bill, in particular with the rest of Clause 7, that the Government are introducing for the first time two completely new elements into the remuneration arrangements for opticians: these elements of discounts on material costs, and the provison for retrospective adjustment of their remuneration to take account of such discounts. My point is this, finally. The changing of the rules providing for the future retrospective adjustment is acceptable to the opticians, and I think it would be acceptable to your Lordships. What is not acceptable is to take back money legitimately earned before today, which is the last date

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on which this piece of legislation will come before either House of Parliament. This Bill, if passed in its present form, would allow the Government to deprive opticians of their £6 million, and perhaps more. I would submit that this subsection of Clause 7 is opaque, improper, and I believe it is inopportune. I beg to move that it be deleted from this Bill.
Lord Kilmarnock: My Lords, I simply want very briefly indeed to support the noble Lord, Lord Ennals, on this. He has set out the position with great clarity. He has mentioned the sum involved, and the amendment he has moved would remove the retrospective character of the clause and prevent the Government from making retrospective adjustments of remuneration to take account of discounts.
It seems to me that the strongest argument of all is that the present state of the law is still clearly confused. There was this case before the High Court which was brought by the PSNC, representing the retail pharmacists, concerning the Government's right to recover from pharmacists amounts said to have been overpaid to them as discounts on medicines in previous years. But as the noble Lord, Lord Ennals, has reminded us, the case has gone to appeal and that appeal has not yet been heard. Thus, the present state of the law concerning the clawing back of discounts is far from clear. If the Government win the appeal, then it would seem to me that Clause 7 is quite simply unnecessary. But what is improper is to introduce this clause into a Bill prior to the decision of the Court of Appeal.
The Government are in effect seeking to pre-empt the decision of the court, seeking to protect themselves in advance against an adverse decision of the court. That, I must say, by any standards seems to me to be the height of impropriety. I stongly support the noble Lord, Lord Ennals, in his amendment.
Lord Mottistone: My Lords, I should like extremely briefly to support the noble Lord, Lord Ennals, and the noble Lord, Lord Kilmarnock, on this point and to support the detail of the points that they and we made earlier during previous stages of the Bill. I think this amendment is important and it is one which I trust my noble friends will see their way to accepting or, at least, if they cannot do that, to modifying.
4.9 p.m.
Lord Glenarthur: My Lords, I appreciate the generous remarks of the noble Lord, Lord Ennals, when he started his speech in support of this amendment. I am afraid I shall, to some extent, have to disappoint him. To deal first of all with the drafting point, Clause 7 puts beyond argument the existing long-standing remuneration arrangements—and they are long-standing—for the four NHS contractor professions. The amendment seeks to delete this subsection of Clause 7 which provides a general validation of the established remuneration arrangements and is, I am afraid, rather technical.
During the debate at the Report stage a number of your Lordships commented on this point. At that time I gave an assurance that I would ask the draftsman to look again at the subsection, and I have done so, as the
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noble Lord, Lord Ennals, described. Unfortunately, we have come to the conclusion that there is little that can be done materially to simplify the position. The real stumbling block for most of the readers who find difficulty in understanding it is probably the double hypothesis in lines 6 to 8 on page 13. If we could stop short at the words "validly made" in line 6, that difficulty would be removed, but it would give the Government a blank cheque which would rightly be unacceptable to the professions. An essential safeguard for them is to restrict the validating effect of the relevant subsection of Clause 7 to determinations of remuneration which could have been authorised by regulations if the powers now to be conferred by the provisions inserted in the National Health Service Act by subsections (1) to (3) had been in force at the time.
Some difficulty, however, comes from the form of the particular subsection. Its appearance as a solid chunk of text makes it more difficult for the reader to see the relationship if it is passed. That could be remedied by using paragraphing to break it up in the way described by the noble Lord, Lord Ennals. I am advised that could be done without the need for a formal amendment, and so it will appear in this version (that is to say, with the paragraphs broken up) when the Act is finally printed. I hope that will be acceptable to the noble Lord. I believe that when the subsection is split up in that way, the change of format will help to make it more easily intelligible.
I now turn to the substantive points in the noble Lord's speech, and in the speeches of my noble friend Lord Mottistone and the noble Lord, Lord Kilmarnock. At Report stage I explained at length the Government's reason for introducing the clause into the present Bill, and I do not think it would be useful to repeat all those arguments, except to say that the usual, and understandable, objections to retrospective legislation do not apply in this case. All the present clause does is to remove recent legal doubts about long-standing arrangements between ourselves and the professions and, in particular, to ensure our ability to implement an agreement that we had with the pharmacists' negotiators last year.
The noble Lord, Lord Ennals, referred to the appeal which is pending, which we have also dealt with in the past. The appeal pending before the Court of Appeal does not raise the question of the legality of the clawback. The proceedings before Mr. Justice Mann did not raise any question of clawback, because the High Court, in view of the announced intention of the Government to add Clause 7 to the Bill, had allowed the case to go forward on the question of whether deduction of discount was legal, but not on the question of whether the rate of discount may be increased to claw back a previous over-payment. That question was not at issue before Mr. Justice Mann; it was not decided by him, and it will not be at issue in the Court of Appeal.
As custodians of the taxpayer's interests, the Government cannot abandon their right to recover the very substantial sums of public money which are involved here. As I have already explained to the House, we are currently seeking to negotiate with the pharmacists improved arrangements which will ensure that reviews take place more frequently and on a regular basis, so avoiding the accumulation of large

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under-payments and over-payments. For these reasons, I commend the clause to the House and I hope that the noble Lord will not feel it necessary to press the amendment.
Lord Ennals: My Lords, I am grateful to the noble Lord for his explanation. I shall not press the amendment to a vote, but I wonder whether he can say a little more about the negotiations and what he hopes to propose, because I made very clear to your Lordships that the principle of retrospection, to a limited extent and over a limited period, has been recognised over many years as part of the system of payment, as the noble Lord said, in terms of taxation. Much of my objection during the various stages of this Bill through your Lordships' House has been based on the point that four years is an intolerable period of time. If the noble Lord is to propose that it should be a shorter period of time, I wonder whether he will say something about that, which would be reassuring to the profession and to your Lordships, since I cannot be the only noble Lord (and I am less noble than most) who has been worried about a situation in which retrospection would be carried through for four years. This really is a very serious situation for those who are seeking to carry out an honourable business, in contract with the National Health Service, seeking to serve the needs of their patients. I hope that the noble Lord can perhaps say something that will be helpful to the contractors as well as reassuring to your Lordships.
Lord Glenarthur: My Lords, with the leave of the House, I do not think I can go very far; but one of the major reasons for the present position, as I have already described, is that the agreed discount inquiry was delayed by the pharmacists themselves, and when the results eventually became available the sums owed b), pharmacists were extremely large. In an effort to avoid a repetition of such a state, negotiations have commenced, as I have said, on a new form of contract with the pharmacists. One of the major features of the new contract is expected to be negotiations to set an annual timetable, linked to regular and frequent inquiries, thus avoiding for the future the build-up of large over- and under-payments. I do not really think I can go much farther than that, but I hope it is some comfort to the noble Lord.
Lord Ennals: My Lords, indeed it is. I have said before that a year is a reasonable period of time to reach a calculation, and if that can be worked out, I shall be very satisfied. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 28 [Transitional]:
Lord Mottistone Lord Mottistone moved Amendment No. 14:
Page 28, line 28, leave out subsections (2) and (3).
The noble Lord said: My Lords, this amendment is similar to one moved earlier. When we last tackled it the time was 11.15 p.m. We had been up late the night before and I am afraid I made one or two harsh remarks, for which I should now like to apologise, in particular to my noble friend Lord Caithness. But I thought it ended on an unsatisfactory note because, it being late, I did not really say as much as I should have
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done in order to make the matter clear; and so I should like to take this opportunity just to add to it.
The problem is this. Under the 1958 Act, opticians have become highly qualified professionals, with all the pride in their profession that is acquired by similar specialists, such as doctors, lawyers, and others. They also have the problem that the Act requires them to be traders, with special restraints on how they trade. A similar, but certainly not identical, problem arises with pharmacists, but I shall not bother your Lordships with that now.
Dealing with the opticians, what sticks in their gullets about Clause 28(2) and (3) is that in circumstances in which, as my noble friend Lord Glenarthur has agreed, competition is not relevant, their professional standing is in a way being impugned. They have accepted that there must be more competition in the open market in the future; and indeed the very few amendments of both myself and my noble friend Lord Cullen at Report stage which were proposed by the optical bodies are proof of that acceptance.
The opticians are, however, proud of the professional skill which they happily use in serving the National Health Service and, as I indicated at the Report stage, they see themselves as on a par with other contractors providing family practitioner services, such as doctors and dentists.
Clearly it is thought—and certainly I have the impression that some noble Lords believe it—that all these people are simply overcharging traders. It might be thought that it was presumptuous of such people to view themselves as professionals, on a par with doctors and others. However, as I said earlier, the 1958 Act seems to have sought specifically to create that kind of pride. I suggest that the public has greatly benefited over the years from the dedicated service which professional pride has engendered in nearly all of its practitioners. As to being thought of as overcharging traders, the way in which these professional persons do their business is itself a creation of the 1958 Act and it is not fair to judge them by it.
So I hope that my noble friend might be able to say something with regard to subsections (2) and (3) of Clause 28—ideally, that he will accept my amendment. But if not, perhaps he can give me some reassurance to make the point that I have been seeking to make to your Lordships, that this is an important dedicated professional body whose status and spirit of dedication should not be eroded by the legislation that is before us. I beg to move.
Lord Glenarthur: My Lords, of course I fully understand and accept my noble friend's earlier remarks. He need not worry that offence was taken. It was late at night and it is also fairly late in the parliamentary year. Everybody tends to get rather exhausted at that time of night—
Noble Lords: No!
Lord Glenarthur: Noble Lords and noble Baronesses opposite look very happy with that and I am delighted to see it. But as I said on two earlier occasions, the intention of subsections (2) and (3) of this clause is to carry into the public sector the wider

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choice which Clause I introduces into the private sector. I do not intend to go over all those arguments again now; but, as your Lordships will appreciate, our ultimate aim is for a system of financial grants for those on low incomes which will enable them to make their own choice of appliance and of supplier.
However, for an interim period we intend to continue to provide adults on low incomes or in need of complex lenses with glasses through the General Ophthalmic Service. These plans apply to children also but the glasses cannot be supplied by the unregistered contractor. During this temporary phase we cannot give those on low income a wider choice of appliance. They will be limited to the National Health Service range. We can however give them a wider choice of supplier.
There is of course no question of competition between GOS contractors in terms of price. There will be fixed national charges to patients. However, there is no reason why we should not introduce competition in terms of service. If new GOS contractors are to take any share of this business, they will have to outperform the existing contractor in terms of such things as opening hours, speed of service and customer responsiveness. This stimulus to better service seems a wholly desirable objective. As I have pointed out on earlier occasions, the permitting of unregistered contractors may also help to ensure the availability of sufficient contractors should some registered opticians not wish to continue to provide this service.
My noble friend Lord Mottistone suggests that this step is an attack—that is not quite the word he used, but he knows what I mean—on the professional standing of the optical profession. Nothing is further from our minds. We have the highest regard for the profession and for the standards of excellence which it pursues. We are as a Government against restriction and for competition. If in applying this policy to optical services it has seemed at times that we are anti-optician, then I should like to take this opportunity to put the record straight and I hope my noble friend will appreciate that.
We hope that we can look forward to rebuilding a constructive relationship with the profession, both on the continuing sight testing service and on the residual dispensing service, because we share the ultimate aim: that is, the optical well-being of the public. Finally, I would emphasise, as I have on earlier occasions, that those we allow to become GOS contractors will be expected to perform to the same standards and to operate under the same terms of service as the registered opticians. There will be no double standards. The same disciplinary arrangements will apply.
At Report stage, my noble friend Lord Mottistone suggested that this could not be because patients would pay the full cost of lenses to the optician and there would be no remuneration due to withhold. I think I ought to point out to him that the vast majority of future GOS patients will be those who get glasses free or have part of their charge remitted, so there will indeed be remuneration to withhold. The same complaints procedure and the same penalties will apply.
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The provisions of this clause will enable us to extend the principle of competition into the public sector provision of glasses for as long as this lasts. Provided that contractors are subject to the same terms and conditions, this will be fair competition. Competition should produce incentives to serve the public better. I believe that the profession can rise to this challenge and that we should therefore have nothing to fear from competition. Customers won in fair competition will reflect more credit to the profession than customers directed to them by the law. I hope that with that explanation and, to some extent, reassurance of the regard that we have for the profession of opticians, my noble friend will feel satisfied.
Lord Ennals: My Lords, I am glad that the noble Lord the Minister used the term "rebuilding the relationship". I hope he recognises that that is a task he will have to fulfil, because as a result of this measure which will pass through your Lordships' House today a great deal of damage has been done to the relationship between the noble Lord's department and the opticians, as well as other professions. A great deal of damage has been done not only to the opticians as contractors, but to individuals who gain benefit from the services provided by opticians.
I just want to read two brief extracts that have come into my hands only today. One is from a letter to the noble Lord, Lord Glenarthur, himself, so he has no doubt read it, from John Mayo, Director of Help the Aged. If the noble Lord has not seen it, then it is a jolly good job that I am reading it to him, because it says:
"Pensioners form the majority of users of these highly expensive lenses"—
he was referring back to the concern and alarm created by the most recent statement of Mr. Kenneth Clarke, the Minister of Health, on the subject of financial assistance for users of complex lenses—
"often requiring a frequent replacement service to cope with deteriorating cataracts or glaucoma. Pensioners will be in the forefront of those facing a new financial burden when those not on supplementary benefit will be required to pay a charge that reflects the cost of the lenses under the GOS. Such plans can only lead to an increase from the present maximum fee of £31 to unprecedented new charges of between £60 and £100. In a previous letter Mr. Clarke assured me that 'If there is an identifiable group who need help, the answer is to find a specific solution'. The group has been identified and I now urge you"—
says Mr. Mayo—
"to do all within your powers"—
Lord Glenarthur—
"to impress upon the Minister"—
the Secretary of State—
"his moral obligation to find that specific solution".
It is sad that this Bill will have passed through the House without that specific solution having been found. We have had assurances that it is going to be found. I think that it ought to have been found before the Bill passed through its final stage in this House.
The second quotation before I sit down—and this came to my attention only today—is from an ophthalmic optician and orthoptist, Mr. Whycer. I am certain that he will not object to my quoting him. He comes from Enfield and he says:
"The dispensing of spectacles is not a simple commercial task but requires a technical background involving considerable training.

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This training is naturally part of the undergraduate teaching at the university departments where ophthalmic optics is studied and in dispensing optics there is a two year professional course at two colleges in the UK which has to be followed by a further year of pre-registration training before the dispensing optician can practise on his own account. How can the Government sacrifice this high level of training, which protects the public, purely and simply on the grounds that competition will bring charges down? In fact, those of us who know the situation see charges rising not falling, since eventually it is proposed that subsidies now paid by the Department of Health in respect of Health Service spectacles will disappear and he replaced by some other scheme, not covering cases where the prescription means costs will be high."
That was just an optician. I have quoted these two letters because the Minister says that it is his hope that the opticians will rebuild their relationship with the service. That will have to be done. It is a task of some urgency because many of those who are practising in the field are very unhappy indeed, and many of those who receive their services are equally unhappy.
Baroness Phillips: My Lords, I support my noble friend Lord Ennals. I have listened intently to the deliberations on this amendment but I am still not clear about why dispensing opticians in the National Health Service will be treated in the same way as suppliers of optical appliances who are not dispensing opticians. To my simple mind, this suggests that people will be able to buy spectacles without first having been to a dispensing optician who will have given them a prescription for lenses. This is the point which people are concerned about. The Minister did not explain the difference between the two. If there is no difference, why is it necessary to include in the Bill a clause of this kind?
Lord Northfield: My Lords, I hope I may say to the noble Lord, Lord Mottistone, that in so far as any of us have been critical of aspects of the profession it is because of the difficulty under which opticians are placed by the 1958 Act. I have tried studiously not to make very many criticisms of opticians but, rather, to refer to the consumer. In so far as I have said anything, it is because the Act puts the optician in an impossible position, as I tried to say way back in 1958.
The optician was at that time, and the same has been true ever since, striving quite rightly for professional acceptance. The profession had not been adequately regarded before that date. The Act gave opticians the chance to reach for and to achieve acceptance and a real profession. I am not attacking their professional status and professional dedication. However, the Act put them in a ridiculous position, because at the same time they were also suppliers of a commercial service; namely, the sale in particular of spectacle frames.
I tried to point out in 1958 that the allegation would be made that opticians would not be subject to proper rules of competition on this purely commercial side of their activity. I suggested that it would lead to abuse and to prices which ought to be reduced. I suggested, too, that it was not in accordance with normal practice in the commercial activities of our community. Therefore, I tried to foresee all this and to warn. I moved amendments to this effect in 1958. For example, I moved an amendment that the General Optical Council should give guidance on prices of frames in order to stop profiteering and in order to
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prevent these allegations from being made. Every one of my amendments was turned down, on the lines, "You can leave it to the opticians; they will not in any sense abuse their monopoly power".
Although I agree that we have now got to learn by all this experience, I do not believe that we should apologise too much about what is contained in the Bill. The point I would make to the noble Lord, Lord Mottistone, is that even with the passage of time the opticians have not been their own best friend. They have resisted, resisted, resisted. They resisted even the display of prices on their premises. After a good deal of pressure, this was finally forced through by only one vote in the General Optical Council. Therefore, years after opticians had obtained their professional status and should have been content with it, proud of it and secure, they were still trying to hide behind their professional status this purely commercial activity, without any real sign of competition.
Therefore, we cannot apologise too much for being fairly rough now and saying that we have got to grasp this nettle, as the Bill does, in order to create some real competition in the way that the Government propose. Nevertheless, I return to what I have already said. I hope that none of my remarks will be taken as degrading or impugning the integrity of the optical profession.
Lord Mottistone: My Lords, I am grateful to my noble friend for what he had to say and for the fact that he clearly recognises the importance of the professional standing of opticians, notwithstanding how their professional standing is being altered—one cannot get away from it—by the Bill. I hope that every effort will be made not only by my noble friend but by his colleagues in the Department of Health and Social Security to ensure that the high standing which has been achieved is not eroded in the future.
I am grateful to the noble Lord, Lord Ennals, for his support on that general theme. I am also grateful to the noble Lord, Lord Northfield, for making it clear that he was not seeking in any way to impugn the high standard, skill and professionalism of the optical profession in the various battles he has been fighting ever since 1958 when, in a different environment, I was commanding a ship at sea in the Far East Fleet.
It is interesting, if the noble Lord, Lord Northfield, will forgive me, that, having said, as I said, that the reason that there is a difficulty is because the 1958 Act creates an artificial trading situation, he should then go on to say a few things, which he could not avoid saying, which epitomised exactly what I was seeking to counter in this amendment. The noble Lord said that the opticians have got their high professional standing but that they are not really trying to compete. The noble Lord put it in the kind of way that I was seeking to override. But we cannot go on about this all day and all night. The Bill will be passed, and I hope that it will work; I hope that it will not do too much damage; I hope that it will be successful, but I have grave doubts. With that, I beg leave to withdraw the amendment.
Baroness Phillips: My Lords, before the noble Lord withdraws his amendment, one of the fascinating features of this House is that, although members spend a great deal of time thanking one another for their

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courtesy and efficiency, one very rarely gets a straight answer when one puts a straight question. The noble Lord, Lord Mottistone, referred to the noble Lord Lord Ennals, and to the noble Lord, Lord Northfield, but I asked a straight question which I think deserves an answer. My question was: what is the difference between a dispensing optician under the National Health Service Act 1977—I am not referring to 1958—and a supplier who is not a dispensing optician?
Lord Glenarthur: My Lords, with the leave of the House, I was looking for a moment to stand up to give an answer to the noble Baroness. The situation is that dispensing opticians contracted to the General Optical Service under the National Health Service Act are those who are registered with the General Optical Council. This clause will allow those who sell glasses privately without being registered to supply them also as National Health Service contractors. Sight testing is the role of ophthalmic opticians. Nothing in the Bill affects who can test sight—I am sure the noble Baroness is aware of that—or who can test sight under the National Health Service. I hope that that explains the point which the noble Baroness made. We are talking about two slightly different matters. When she reads what I have said, I hope that it will make sense to the noble Baroness.
Lord Mottistone: My Lords, I beg leave to withdraw Amendment No. 14.
Amendment, by leave, withdrawn.

Rate Support Grant: Scotland
4.29 p.m.
The Minister of State, Scottish Office (Lord Gray of Contin): My Lords, with the leave of the House I shall now repeat a Statement on local authority expenditure and rate support grant in Scotland which is being made in another place by my right honourable friend the Secretary of State for Scotland. The Statement is as follows.
"With permission, Mr. Speaker, I shall make an announcement about local authority expenditure and rate support grant in Scotland.
"Scottish local authorities are planning expenditure in 1984–85 which is some £114 million or 4.2 per cent. above the current expenditure guidelines that I issued to them. When I met the Convention of Scottish Local Authorities on 22nd June I said that I was disappointed that authorities were not much closer to the expenditure provision made in the rate support grant settlement. Having considered the budget returns of authorities I said that I had decided not to take selective action to reduce the rates of any individual local authority this year, although I will not hesitate to use the power again if an individual authority plans excessive and unreasonable expenditure.
"However, since there was only marginal improvement on last year in the general level of expenditure I made it clear that there would have to
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be a substantial general abatement of rate support grant. It is apparent that the abatement which I imposed last year was not sufficient to impress upon authorities the very real need to bring their spending into line with Government guidelines.
"In my consideration of the level of abatement required I was very aware of two arguments which the convention and individual authorities had raised with me.
"First, the distribution of the abatement. Previously grant reductions for excess over guidelines bore no relation to the level of excess over guideline. Authorities were penalised in proportion to their share of grant rather than on the basis of their degree of overspend. This, I acknowledge, was not fair. During the parliamentary proceedings on the Rating and Valuation (Amendment) (Scotland) Act 1984 it was made clear that I intended to use my powers under the Act to ensure that the amount of reduction for each authority was directly related to the extent of its overspend.
"Secondly, COSLA has for a number of years represented to me the unfairness of a system which did not recognise reductions in overspend at outturn and thus gave no incentive to respond to an abatement by economies in the current year. This year, I have decided that the amount of the grant reduction will be adjusted when information is available about actual expenditure in 1984–85. Any authority whose expenditure at outturn is below guidelines will have its grant penalty cancelled. An authority which, while still above guideline, reduces its expenditure at outturn will have its penalty reduced. Conversely, of course, an authority which increases its excess will find its penalty on outturn increased.
"In the light of these two significant improvements to the system which have removed the basic unfairnesses which have previously existed, I have had to consider whether to seek a grant reduction equal to the full amount of the overspending of £114 million.
"I have decided, however, that a penalty of this scale would be too steep an increase on last year's total penalty of £64 million. I have decided that for 1984£85 the appropriate reduction would be £90 million. I will lay the necessary rate support grant order shortly and grant reductions will start on 1st August. I have today placed in the Library a paper showing how the abatement will affect each local authority, and letters of notification to them are being posted today.
"I accept that this penalty will be regarded as severe. At the same time the new system will allow authorities to reduce their penalty in part or in entirety by taking positive action now to bring their spending down. The solution lies in their hands. In the interests of their ratepayers and of the economy as a whole, I hope that this opportunity will not be missed."
My Lords, that concludes the Statement.
Lord Ross of Marnock: My Lords, we are grateful to the Minister of State for the Statement which he has repeated here. It is all very predictable. In fact, the only

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question was: which of the battery of powers that the Secretary of State has taken would he use? Would he use his general clawback powers? Would he apply it to individual authorities that had sinned against the whole spirit of the Scottish Office today? Would he use his general or individual rate-capping power? That was the only mystery that certainly for me was concerned. He used his latest power; the power that was given in, I think it was, Clause 1 of the last Act that we had in this respect during this Session of Parliament.
He has decided that he will cut local authority expenditure. It was £114 million above the guidelines, but he will not cut it by that amount; he will cut it by £90 million. That was predictable too, because anyone who had looked at rate support grant would have seen that, although rate support grant went up in this coming year as compared to last year by 2·6 per cent., that was without taking account of inflation so that in real terms the local authorities were getting less. There was a reduction in the Government support because the actual rate support grant—the relevant expenditure—had been cut by the Government.
The Government decide everything here. It is the Government who decide the guidelines; the Government decide aggregate expenditure rate support grant; and the Government decide what amount of support they will give to the local authorities. Of course, that was cut too. The central Government share of relevant expenditure was cut by 1·6 per cent. It is now just over 60 per cent. When I was Secretary of State—believe it or not—it was 75 per cent. or 76 per cent. So you can well understand that, although local authorities have held their expenditures pretty well, the Government, by cutting their share of that expenditure, have forced rates up. That is why, although expenditure has been held fairly well as the result of the cutting of the Government support of that expenditure, they have forced up rates in Scotland by about 133 per cent.
Of course, they have been found out in this. We are dealing here with budgets that were drawn up, not by the councils who are in power now, but the councils who were in power prior to the district elections which were held in May of this year. Indeed, in view of their choice of this particular form of penalising local authorities, it is interesting to note that, if the Government had chosen from the selection of individual authorities, the authority they would have had to choose for having the highest increase or excess in expenditure over the guidelines would have been Edinburgh; Edinburgh on a budget drawn up by the Tories, a budget of which the excess was over 14 per cent.
As to the reality of these guidelines, we had no sanctity in relation to guidelines until we got this last Act. Time and again the Secretary of State said, "The guidelines are there only as a guide; you do not have to keep strictly to them"—a bit above and a bit below did not matter. Then suddenly they became part of statute.
Thanks to the delays that have been caused by other necessary Bills and the way we do things here, I have been able to get a list of the local authorities who have sinned against the Scottish Office and the Boy George. It is interesting to note—it might have been embarrass-
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ing for the Minister of State himself, who I think belongs to Inverness—that Inverness's excess of expenditure is 10.03 per cent. Every single Scottish local authority is in excess. Honourable mention should be made of Sutherland—0.78 per cent. I think the Western Isles is even lower than that, it is 0.72 per cent.
But, generally speaking, with the districts there is a considerable increase of expenditure above what the Government expected. That was inevitable because the guidelines were unrealistic. They did not even take account of the increase in inflation costs and to that extent I think the reduction from £114 million to £90 million is just not good enough. Even if he wanted to apply his own system, I think he should have taken the proper inflation rate and applied that to that particular figure. It would probably have further reduced it from £90 million below.
There is the other point. Reducing the support that the Government themselves gave to 60.2 per cent., or 60.1 per cent., cost the Scottish local authorities £48 million in total compared with the previous year. That, too, should have been taken off if the Government were working their own system fairly—with which I do not at all agree. It should be a matter for local authorities to determine what they want to spend, and it should be a matter for their electors to deal with them.
We have just held the elections. Who lost out all over the place? The Government did. They lost Edinburgh—the jewel in the Tory crown of local government. In Glasgow, the Government have only four or five seats left. It is hard to find a Tory councillor in Glasgow. The same applied throughout the whole of Scotland. The Government are out of step with the Scottish ratepayers and certainly with the Scottish people.
What will happen now? I calculate that Glasgow's increase was less than that of Edinburgh—about 12 per cent.—and yet Glasgow will lose about £8 million. I understand that Edinburgh itself will lose about £4 million. Strathclyde, with the biggest problem of all and containing about half the population of Scotland, will lose £38 million. I believe that some 70 per cent. of local government expenditure in the regions is spent on education. This development will mean fewer teachers in Strathclyde. It will mean, no doubt, more unemployed school cleaners. It will mean a cut in the services in respect of transport, concessionary fares, and ferries. I believe that only about £56 million of rate support grant was given for the whole of Scotland, and Strathclyde reckoned that its need, if it was to be realistic in the provision of services, was alone more than £50 million. This is the kind of thing that is happening to local authorities, by the unrealistic application of now legislatively-sanctioned and empowered guidelines.
I am sorry about this because it means that the gap between Scottish local authorities and the Government widens and widens. Negotiations no longer exist; there is just a ritual meeting and there is nothing constructive about it. The Government tell us in the Statement how they will pay attention to how they will apply the general claw-back. We know all about that. It was in the Act of Parliament whose passage started even before the noble Lord opposite came properly into this House.

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One further question arises. Has there been complete agreement by local authorities in respect of the distribution formula? Under the new formula which was introduced using, as the Government told us, a client-based system (which nobody understands), the distribution has changed considerably. Therefore, there may be a change in the incidence of penalties imposed on local authorities. Has that aspect been agreed?
Secondly, the Minister stated that he is seeing COSLA. Has he seen the individual local authorities which will be hardest hit, or is he hoping to see them? I do not see why he should not do so, because he has plenty of time. I am placing greater importance now on budget proposals, which are struck before the start of the financial year, and less on the outcome: what people say they are going to spend and what they actually spend are very different matters. I agree that the Government have sorted that out slightly. If the local authorities make savings within the year, then they will not be penalised so heavily. But there is an unreality surrounding this whole subject, which stems from the Government's original unfairness in drawing aggregate guidelines and then individual guidelines for local authorities which hear no resemblance to reality.
I remember Hector Munroe in another place complaining that Dumfries and Galloway had kept very well to their guidelines in the previous year despite increases in costs and all the rest of it, yet they were being cut by £3 million in the coming year. We have only to look at Dumfries and Galloway now to see that they, too, have exceeded the guidelines. It is inevitable, but the system is unfair and this shows how out of touch the Government are with local authorities.
There was only one copy in the Library of the document I now have before me, and I am sorry that I had to take it. In future, when the Government are drawing up a list, will they provide me with a personal copy, and include in that list the proportion of expenditure of each local authority that is paid by way of rate support grant? I wish to know the percentage. The general expenditure for Scotland is just over 60 per cent., but I know that Glasgow is only about 33 per cent.; there was a time when the figure was 41 per cent. That itself is a 14p rate poundage reduction caused by Government action. It will be helpful if we can see exactly how each of these local authorities are helped. Not the 60 per cent.—I know that the highlands authorities and Orkney and Shetland receive a very much higher figure, but such information would provide an indication of the reality in that respect.
Lord Grimond: My Lords, we, too, are most grateful to the noble Lord the Minister for repeating the Statement. Is he aware that we are indeed impressed with the importance of economy by local authorities, and is he aware also that we do not believe he will ever achieve such economy under the present method of allowing local authorities to fix their budgets and then attempting rate capping? The solution is to reform the system of local government finance, so that instead of a wholly capricious rating system which many people do not pay, or pay in full, the local electors are much more responsible.
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Secondly, may I ask the Minister if he will stop loading on local authorities miscellaneous duties which involve them in greater expenditure on staff? May I ask him also if he will remove his mind from the warmth of London and take it back to the misty uplands of Ross and Cromarty? He will be well aware that the climate in the north is very different from the climate here. Local authorities there have to deal with widely-scattered constituents, with high transport costs, and so forth. Has any notice been taken of that in the present proposals?
I also draw the Minister's attention to the fact that the highland authorities are being heavily penalised. As I understand it, the figure in respect of Ross and Cromarty itself is 81·44. The same applies in respect of Inverness, Caithness and Shetland. I should like to know whether special attention has been paid to the special difficulties and expenses which the Minister well knows those local authorities inevitably face.
4.58 p.m.
Lord Gray of Contin: My Lords. I am grateful to both noble Lords, Lord Ross of Marnock and Lord Grimond, for their comments on the Statement. I will begin by saying how glad we all are to see the noble Lord, Lord Ross of Marnock, with us. Today, he sees through a glass darkly—but we feel sure that before long he will be restored to full vision. I believe that I speak for everyone on this side when I say how delighted we are that his illness does not appear to have affected his persistence in criticising any measures we put forward.
In his criticism of the general attitude we are developing in this Statement, the noble Lord, Lord Ross of Marnock, suggested that the fact of the matter is that local authorities will receive less. I remind him that local authorities are still planning to spend more in 1984–85 than they did in 1978–79. At constant prices, their budgets are 2·6 per cent. above their spending in 1978–79. In cost terms, which shows much more clearly the cost of local authority services to the economy, the increase is 12 per cent.
Therefore, I fully defend what my right honourable friend is seeking to do in persuading local authorities that they really must reduce their spending. There is no alternative to that, and it is in their interests and everybody else's that they achieve what we are asking them to achieve.
The noble Lord suggested that the guidelines were unrealistic. That is not so. Fifteen local authorities have managed to stay completely within the guidelines. Indeed, one-third of all the local authorities in Scotland have managed either to remain within the guidelines or not to exceed them by 3 per cent. It is not right to suggest that what we are asking local authorities to do is by any means beyond them.
The noble Lord, Lord Ross of Marnock, mentioned Glasgow. I remind him that last year Glasgow wasted £5 million of housing capital expenditure because it would not raise rents. That is what we are up against at the present moment.
Lord Ross of Marnock: My Lords, are we including housing now? Has housing anything to do with the Statement? I thought we were dealing with rate

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support grant. Housing does not come within rate support grant—or does the noble Lord not know that?
Lord Gray of Contin: My Lords, I remind the noble Lord that, when he is arguing with me, he never ceases to bring in any factor which he thinks will improve his argument. I reserve the right to do the same when I am replying to what he suggests.
In addition, last year that authority suggested that the penalty with which it was faced would cause massive cut-backs in services. Instead, by disciplining itself to a certain extent, that authority managed to have a surplus by the end of the year. It used that surplus this year to keep its rates down. The fact that that happened to be in an election year was probably coincidental. But that does not matter. It did it, and we all applaud what it managed to do.
The noble Lord asked whether there has been agreement with local authorities. There has been discussion with local authorities on what is proposed. I am not in a position to say whether there has been complete agreement. I should be surprised if there was complete agreement with COSLA on that matter, but there has certainly been discussion. I have not seen COSLA. As the noble Lord will be aware, this is not one of my day-to-day responsibilities in the Scottish Office, but a Scottish Office Minister has seen COSLA. Indeed, my honourable friend the Under-Secretary of State had a meeting with its representatives in Edinburgh only this morning.
The noble Lord asked me whether I could let him have a list of the expenditure and the percentages. I shall certainly do that. I shall ensure that what he seeks is given to him as quickly as possible.
I now turn to the noble Lord, Lord Grimond, who made a number of comments about authorities in the Highlands region. Like him, I know most of those authorities very well indeed. I remind him that one of the Islands authorities within his former constituency was one of those which managed completely to keep within the guidelines. Indeed, two other authorities have not exceeded the guidelines by very much.
I take the points that the noble Lord made about the difficulties that Highlands authorities are involved in because of their geographical position. Of course, in discussions with those authorities those difficulties are considered and taken into account.
From their point of view noble Lords made a fair criticism of our proposals. I am grateful to them for participating in our short discussion.
Lady Saltoun: My Lords, may I ask the noble Lord whether copies of the figures that he is sending to the noble Lord, Lord Ross, will be placed in the Library?
Lord Gray of Contin: My Lords, I am grateful to the noble Lady for that comment. I should have said that of course I shall make them available in the Library for the benefit of any noble Lords who wish to see them.

Health and Social Security Bill
5.4 p.m.
Consideration of amendments on Third Reading resumed.
Schedule 6 [Protection of pensions]:
Lord Morris Lord Morris moved Amendment No. 15:
Page 53, line 33, after ("above") insert ("but excluding any part of such excess which represents increases in the guaranteed minimum occurring after the termination of employment date insofar as such increases relate to any part of the guaranteed minimum which accrued prior to the 31st December 1984;").
The noble Lord said: I think that it will be for the convenience of the House if I speak also to Amendment No. 16.
Amendment No. 16: Page 56, line 4, after ("above") insert ("but excluding any part of such excess which represents increases in the earner's guaranteed minimum occurring after the termination of employment date insofar as such increases relate to any part of the earner's guaranteed minimum which accrued prior to the 31st December 1984.").
It is certainly not my intention to go over old ground, but I believe that at this stage it is important to clarify any misunderstandings that have occurred in previous stages of the Bill. As your Lordships will recall, this amendment would prevent some people having their present pension entitlement reduced, which will certainly be the effect if the Bill goes unamended as it stands. Indeed, I find it somewhat ironic that the pensions of some people will be reduced when there is a cross-heading to Schedule 6 which reads, "Protection of pensions".
In response to my inquiry at the previous stage of the Bill, which was:
"how many of the country's 20,000 contracted-out pension schemes are at present in surplus?",
my noble friend replied:
"My noble friend asked how many of the 20,000 contracted-out schemes are in surplus. All, if they are contracted-out, must be able to meet the contracting-out liabilities. They may or may not be in surplus, but they certainly cannot be in deficit.—[Official Report, 10/7/84; col. 866–7.].
Let us be quite clear. That did not answer my question. If I may, I shall just ask that question again, carefully and slowly. How many of the 20,000 contracted-out schemes are in surplus; or, if my noble friend prefers, how many are in deficit? I ask him not to be shy. If he does not know the answer to the question, he should say so. I do not want an answer to another question.
The reason I ask that question is that my noble friend told me in his letter that many schemes would be able to meet the cost of retrospective change out of surpluses arising from investment conditions in recent years. That is not true where the terms of an insured scheme are such that any benefit that inures to the insurance company will not necessarily inure to the fund. That is a separate point.
There is a second point. My noble friend's original answer, no doubt inadvertently, contained an important factual inaccuracy. He was correct in saying that all contracted-out schemes,
"must be able to meet the contracting-out liabilities",
and that they may or may not be in surplus. However, he was incorrect when he said that they, "cannot be in deficit".
I have had that point carefully checked with a leading firm of consulting actuaries. There is nothing to prevent a deficit in respect of the liabilities over and above the contracting-out liabilities. It is in just such cases that hardship is most likely to be caused to pension scheme members as a result of the retrospective element in Schedule 6.
At a previous stage of the Bill the noble Baroness, Lady Jeger, asked for an assurance that the legislative changes would not result in anyone's pension being reduced. I think that noble Lords will recall that she was far from reassured, if I may put the thought into the mind of the noble Baroness. The answer, at column 224 of the Official Report at Committee stage reads, somewhat cynically, I cannot help thinking:
"If the scheme is not properly funded, then all will suffer".
The point goes beyond that. At Report stage I gave an arithmetical example showing how people's pensions could be worsened, even if the scheme is at present properly funded. To argue, as did the noble Lord, Lord Glenarthur, at column 869, that,
"Pensions can only be reduced if the scheme rules permit them to be reduced",
is like saying that a bankrupt company must pay its creditors even if it has insufficient assets so to do.
I ask my noble friend Lord Glenarthur another question. If anyone's pension can later be shown to have been reduced as a result of the terms of Schedule 6, do the Government have any intention of restoring the pension to its original level? At the same stage, I think it was the noble Lord, Lord Banks, who suggested that franking—and he was quite right—could be likened to robbing Peter to pay Peter. If we take Paul as the early leaver and Peter as the late leaver, in this legislation it is a question of robbing Peter to pay Paul. I suspect that my noble friend will say that that will not be the case, but that is precisely what the case will be in certain circumstances.
My noble friend Lord Glenarthur put up another red herring at the last stage. I believe that it is very important to consider this. He suggested that the effect of the anti-franking legislation would take years to build up if this amendment were passed. I quote what he said—and he somewhat over-egged the pudding:
"We will be faced with thousands and thousands of early leavers receiving pensions from their schemes of no more than the guaranteed minimum pension. Yet they would have paid in contributions rightly expecting to receive benefits on a much larger scale. They would have been better off to stay in the State scheme and not be members of an occupational scheme at all."—[Official Report, 10/7/84: cols. 866–7.]
I suggest that the amendments tabled do nothing other than build up more gradually the anti-franking legislation. Incidentally, I am advised that in practice many schemes will choose to make their change retrospectively, if they can afford it, even if my amendment is passed, because it would be administratively convenient for them to do so. Thus, my amendment will not set back the building up of anti-franking legislation as much as my noble friend Lord Glenarthur fears.
Where a scheme cannot afford the effect of this legislation, however, my amendment will give genuine protection to the people who remain in that scheme until pension age. It is not true that if my amendment is passed many thousands of early leavers will have been better off to have stayed in the state scheme and not be members of an occupational scheme. In any case, they are guaranteed that they will be no worse off in the occupational pension scheme. They may be better off, and many will be, but they cannot be worse off.
Many will have contributed to the occupational scheme but they will have received a compensating reduction in their state scheme contributions. In no sense can they be worse off than they are now if the amendment is passed. I beg to move.
Baroness Jeger: My Lords, I shall be brief. We support the amendment and the noble Lord was certainly reading my mind correctly in saying that I was not satisfied by the noble Lord's reply to my previous question at an earlier stage about the absence of any worsening under the provisions of Schedule 6. I remain unassured.
I think it is extraordinary, and rather ironic, that earlier this afternoon when we were talking about the Parliamentary Pensions Bill the noble Viscount, Lord Whitelaw, referred to the difficulty of retrospective provision. Now we seem to be at the opposite end of the argument. What we object to in Schedule 6 is that retrospective legislation can give rise to additional commitments which could not have been foreseen earlier during the strategic planning. That is exactly the difficulty. Perhaps I should not say "exactly" but it is very nearly the difficulty to which the noble Viscount, Lord Whitelaw, referred in connection with another Bill; but I must not stray beyond the rules of order in that connection.
We also had an earlier debate on the problem of retrospection in the drug tariff for pharmacists and there is a case now before the Court of Appeal in that connection. Therefore, I am sure that all parts of the House must feel that Schedule 6 is not a very satisfactory provision. I am not going in to the matter of the abolition of franking because I think that this question of retrospection and the problem of people who might suddenly find themselves in a worsening position because of Schedule 6 are the important elements. That is why we support the noble Lord, Lord Morris.
Lord Banks: My Lords, at the two previous stages of the Bill I supported the noble Lord, Lord Morris, on this point and he has not yet had a fully satisfactory reply to the very cogent points he has raised. Neither he nor I are against the abolition of franking. I have made clear that we on these Benches welcome it but we recognise the fact that if franking is abolished it will mean that some early leavers are going to have higher pensions than they otherwise would have done. We recognise that that will cost more. In so far as that refers to future years, it can be funded over the future, but in so far as it refers to past years, it puts an immediate burden on the fund. Provision has to be made immediately by those who are running the fund in order to make sure that the fund is solvent. Therefore, there is the danger that with some funds this retrospective part of the proposal could put them into insolvency or could mean that some members who have stayed and not retired early will have lower pensions than they otherwise would have done. I shall be most interested to hear whether the noble Lord is now in a position to give the assurance either that that would not happen or, if it does happen, that the Government will put it right, as the noble Lord suggested.

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It is the retrospective element which we believe to be wrong. People who have been applying the practice of franking—whatever we think of it—did so quite legitimately over these past years. It is not right that they should be penalised for something which was in accordance with the rules and regulations as they stood at that time.
Lord Glenarthur: My Lords, I am sorry that my noble friend Lord Morris feels it necessary to raise this matter again. For the benefit of your Lordships who may have forgotten, if they were here when some of the issues were discussed, I think I ought to make one or two things plain.
First, it is the Government's intention, as soon as possible, to abolish franking as practised by occupational pension schemes. I need say no more than that, basically, franking is a practice where the early leaver or person who retires before state pension age may find himself receiving a lower rate of pension from a scheme than he might have otherwise expected by the erosion of other benefits in excess of the guaranteed minimum pension that may be due to the eventual pensioner. Yet the provision of that guaranteed minimum pension and its revaluation have been allowed for in the national insurance contribution rebate received by contracted-out employers and employees since April 1978. Therefore, schemes which practise franking are being over-compensated.
There is, I accept, and as the noble Baroness, Lady Jeger, and the noble Lord, Lord Banks said, no difference between us or between my noble friend Lord Morris and myself on our attitude to franking. We agree that it should be stopped. However, he and others object to the retrospection implicit in the Government's proposals. The noble Baroness to some extent prayed in aid remarks made earlier in the day by my noble friend, but I do not think I shall follow her down that road as I was not here and did not hear them.
Retrospection does not affect past early leavers, but it protects the benefits of future early leavers. That retrospection is really quite crucial. I go back and develop the theme I made, to which my noble friend referred. It is quite crucial if thousands of future early leavers are to be protected from a potential loss; a loss which no one wants to see. Let us consider the effect if my noble friend's amendment were agreed to. All future early leavers would be protected from franking but only in respect of their benefits which have accrued from 1st January 1985 and not in relation to their past guaranteed minimum pension which had accrued since 6th April 1978.
On average, that guaranteed minimum pension could amount to £310 a year and its statuory revaluation to state pension age could mean that if at the time of leaving the member had benefits in excess of guaranteed minimum amounting to £1,600 a year, then up to £30 a week could be taken away from the future early leaver when he eventually drew his pension. Those figures are fairly staggering. This can have the result that, at that time, he would only be able to draw his guaranteed minimum pension. This is not an extra benefit that we are requiring to be provided.
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The scheme promises him an amount based on final salary and a pension not less than guaranteed minimum pension.
It is our wish that if, at leaving, he is entitled to benefits in excess of his guaranteed minimum, that excess should be preserved and not eaten away as a result of franking. If a member who has been in a contracted-out scheme ends up with a pension that is only equal to the guaranteed minimum, then his scheme contributions have been of no benefit whatever. He would have done just as well to be in the state scheme and not a member of an occupational scheme at all.
When we last discussed the matter, my noble friend suggested that the effect of all this would be that 3 per cent. for each potential early leaver would be required immediately the legislation came into effect. I think that I should refer to this point now, although he did not specifically go into it. The arithmetic is not quite so straightforward as my noble friend indicated at the time. Not every early leaver will qualify for preservation and not all will have six years in the scheme. Not all will have earned entitlement to benefits in excess of the guaranteed minimum pension. On average, there are hundreds of thousands of early leavers each year who would have five years' service. My noble friend indicated that there may be schemes that would be unable to meet the new requirements and would be forced to reduce benefits to existing pensioners. That, I suggest, is a highly unlikely consequence. Benefits in payment in most schemes have top priority over and above all other claims. All contracted out schemes must be funded to meet their priority liabilities, including the guaranteed minimum and pensions in payment. It will be some considerable time before any payments are due as a result of the anti-franking legislation. The leaver must reach state pension age before the proposal in the Bill will benefit him.
I accept that there may be some small schemes which will wish to consider the best way to meet their new liabilities. The Government accept that anti-franking and the early leaver legislation announced on 11th June by my right honourable friend the Secretary of State will impose costs, and I suggest that all involved will wish to consider how best to meet the new requirements. For some, both the employer and the employee may be willing to pay extra contributions. Others might adopt a restructuring of scheme benefits. Ultimately it may be decided to discontinue the scheme. If so, the anti-franking legislation, as I explained at Report, does not apply if the scheme is closed before that legislation is effective.
Alternatively, in future, one might, in extreme circumstances, see the scheme winding up, in which case the anti-franking legislation again would not apply. There is a third possibility—that if the scheme ceases to contract out before the legislation is effective, again the Bill would impose no new requirements. We have therefore, I suggest, incorporated several safeguards and emergency exits in the legislation to cover the kind of situation that my noble friend Lord Moms has postulated. He asked me a number of questions. He asked for the number of schemes out of 20,000 that were either in surplus or in deficit. The number in surplus is not known. But the answer really is that none can be in deficit if they are contracted out,

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as I understand it. They are subject to the Occupational Pensions Board in relation to their contracting out liabilities.
The noble Baroness, Lady Jeger, asked about the effect of anti-franking on existing pensions. We cannot get to the stage of pensions actually being reduced, because the scheme would have wound up first. If there was to be any deficiency in the guaranteed minimum pension as a result of all this, the Government would make good, on the winding up, if the scheme could not meet all the GMP liabilities. I hope that that is some reassurance for her.
On principle, we all object to retrospective legislation. I do not make any apology for repeating what I said at Report. In the case of franking, the Government believe that it would be wrong if it was not retrospective. It is the only way to protect the individual from losing out in the future. My noble friend's amendment would drastically reduce the effect of abolishing franking, and it would take much longer before the benefits became significant for future early leavers. The Government have embarked on a programme of reforms of occupational pension schemes. We have invited consultation not only on the franking legislation but also on the other proposals currently outstanding. There are, however, certain fundamental principles what we must bear in mind. A fair deal for all members of occupational pension schemes must be our aim. For too long, stayers have benefited at the expense of leavers. If the Government were faced with a choice that one or two schemes might decide to close, as opposed to a measure that will benefit thousands of early leavers, I have no doubt as to the way that the legislation should act.
The Government must protect the interests of the individual, the future early leaver, who, as I say, could lose an average of £30 a week by the time that he reaches state pensionable age. It is, I think, a matter of great regret that we cannot make any improvement for those who have already left. We believe that we have incorporated adequate safeguards for existing schemes. I assure your Lordships that retrospection in this case was not a decision entered into without careful consideration. Throughout the debates on this part of the Bill, on one thing we have been unanimous—that it is an extremely complicated subject. I know that my noble friend Lord Morris shares that view. I hope, however, that with this further explanation of this rather tortuous business, he will see fit to withdraw his amendment.
Lord Morris: My Lords, again I am grateful to my noble friend for his comprehensive answer. I should like to deal quickly with his final point. He came out with a quite astonishing contradiction in terms—
Lord Glenarthur: My Lords, did I?
Lord Morris: My Lords, yes. He referred to the early leaver reaching state pensionable age. If anyone reaches state pensionable age he ceases to be an early leaver, I should have thought. Or have I got this completely wrong?
Lord Glenarthur: My Lords, I think that my noble friend has got it wrong. Such a person will eventually reach the age known as the state pensionable age.
Lord Morris: My Lords, thank you. I shall not pursue that matter on the good grounds that I do not understand it. My noble friend also suggested that one of the evil consequences that I had tried to argue would result from the implementation of Schedule 6 was that Peter would be robbed by Paul and that the early leaver would rightly benefit but that if there were not funds in the scheme, then money could only come from the long stayers. To put it another way, my noble friend used a different term. He called it restructuring scheme benefits. What do noble Lords think that this means? That is exactly what will happen. The Government will not pay. The fund cannot pay if it has not got the money. Does anyone think that insurance companies will stump up? You have to be joking.
My noble friend talked at the last stage rather darkly of future legislation. I sincerely hope that when I come back to him, as I will, I am afraid, year in and year out, and when the result of this is monitored, he will look at the matter very closely. If the late leavers in a scheme that is very closely funded are harmed, I hope that my noble friend will reconsider this case as the years go by. With that, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 16 not moved.]
5.28 p.m.
Lord Glenarthur: My Lords, I beg to move that this Bill do now pass.
Moved, That the Bill do now pass.—(Lord Glenarthur.)
Baroness Jeger: My Lords, this Bill seems to have been with us for a very long time. It is right that this should have been so because it is a Bill that affects hundreds of thousands of people in this country. It is right that your Lordships should have given careful and close consideration to its varying proposals. I welcome the end of this unwelcome muddle of a Bill—the end at least until the next Labour Government takes it all to pieces again and puts things right. We await four promised reports on the social services. We can only hope that there will be maximum public involvement and Treasury involvement and that we shall be able to look more closely at the wider aspects of the health and social security provisions within which the provisions of this Bill play a comparatively small part.
In earlier stages we have made our views perfectly clear. We are seriously disturbed about some of the provisions of the Bill. I will summarise them briefly. There are complications about the sections dealing with the opticians and eye services, and I think that the Minister, who speaks with the best will in the world—which we all appreciate—has not made the position absolutely clear in all respects.
We are glad that the Government have insisted on a professional diagnosis before people can take their prescriptions to get them filled. Filling a prescription,

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reading a prescription, is a skilled job, and to think that any shop person—I was going to say shop girl—can, over a counter, take a complicated prescription, particularly if it is involving different prescriptions for different lenses, and take the lenses out of boxes, as if she were selling a pair of tights and getting size 10, seems to us very dangerous. It seems to me—and I speak as an old doctor's wife; perhaps I should say a doctor's old wife—to be similar to a doctor giving a prescription to a patient and the patient does not have to take it to a pharmacist; he or she can take the prescription to a high street shop. Although this would be logical, I hope very much that the Government are not going to go down that road.
It is necessary to have considerable experience and knowledge, not only to diagnose the eye problems but to make sure that the glasses fulfil the prescription. It seems to me that while there is no professional body supervising the sale of these spectacles the customer will have no redress. The customer could get home and find that the lenses do not fit very well. He could take them back and the shopkeeper could say, "Well, you bought them yesterday, and that's the end of the matter". I think this is going to cause a lot of problems. I hope that those who sell spectacles will try to be sympathetic and helpful. It is easy to buy a pair of spectacles in a shop and then, when one gets home, find that, come the night time and one is trying to read by artificial light, they are not so good.
The other complication in this part of the Bill relates to the question of complex and expensive lenses. We have had considerable discussion about this. I go back and use as my text a statement made on the Second Reading in the other place, on 20th December, when the Secretary of State said, at col. 297:
"there are those with the very poorest sight who need complicated and more expensive lenses, and I am certainly prepared to consider the evidence on that to see whether they can have continued access to NHS glasses".
At a previous stage of the Bill here the noble Lord assured us that special consideration would be given in these cases. But we find some difficulty in working out what this special consideration is to be. I know that it is difficult to make these assessments across the Floor of the House, but I thought that the noble Lord, Lord Ross, made his situation very clear, and I have his permission to explain his difficulty. I thank the noble Lord the Minister for sending me a copy of a letter which he sent to Lord Ross; and I have Lord Ross's permission to use that.
In parenthesis, may I say that I think that sending letters to each other is very courteous, but it does not help the public to know what is going on. How are the patients to know that they have these rights and these possibilities of help if this is a matter of correspondence across the Floor of the House? At Report stage, some of us asked why, if the Government were going to help people who needed these complex glasses and had specially difficult eyesight, this could not be written into the Bill for everybody to see.
Lord Glenarthur: My Lords, I am sorry to interrupt the noble Baroness—it is the last thing I want to do—but the fact is that other Members of your Lordships' House have not had the benefit of reading all that this letter contains. The fact is that it deals with
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other legislation. That is why the point that the noble Lord, Lord Ross, raised was not strictly relevant to the Bill before your Lordships, although it was relevant to his particular circumstances. If any of your Lordships, or anybody else, has a particular problem because the National Health Service is not meeting its statutory responsibilities, I should be the first to take that up with the health authority concerned, whether it be in Scotland or in England. But I do not think it is strictly relevant to the Bill before the House.
Baroness Jeger: My Lords, I thank the noble Lord. I cannot see why it is not relevant to the Bill before the House when a large part of this Bill concerns eyesight, the preservation of eyesight and the endangering of eyesight. If the noble Lord thinks it would be fairer of me, I will read out the whole letter. I see that he is shaking his head. Of course, I know that Schedule 12 to the National Health Service Act 1977 applies. I have been around a long time and I, too, know that.
The problem is that there seems to be great diversity, according to which hospital one happens to be in or which Minister or which Government are in charge. I hope the noble Lord will not think that I am unfairly extracting odd sentences from his letter, but that is the only alternative to reading out the whole letter. In regard to eye operations, he says:
"We intend that the present arrangements for such patients will continue. Their immediate post-operative needs are usually met by glasses loaned by the hospital. After that, practice varies but we intend to make no changes to the present arrangements whereby post-operative patients pay for the first pair dispensed after refraction but whilst their eyes stabilise the cost of replacement pairs is met by the authority."
I have to ask the noble Lord why he thinks that,
"post-operative needs are usually met by glasses loaned by the hospital."
I have not been able to find anybody who has had this happy experience. If it is the case that they,
"are usually met by glasses loaned by the hospital",
then it means that, unusually, there must be people who do not get glasses loaned by the hospital. If the practice does vary from hospital to hospital and from region to region I hope the Minister will try to see that there is some uniformity of practice.
It seems to be very unfair that if one has one's eye out in one region one gets some help with glasses, and if one has it out in the next-door region, one does not. It is very unfair for the Government to accept that the practice varies but then say that they do not intend to alter it. That means that the Government are accepting the variability of treatment. That is one of the aspects of this Bill which worries us. I know that the Minister will tell me again that it has not to do with this Bill. But there could have been something in this Bill to put this matter right and provide for people who need these specially complex and difficult lenses to be helped, even if it meant an amendment to earlier legislation.
I should keep your Lordships here too long if I went on about all the failures of this Bill and why we think it is such a wretched piece of legislation. It leaves out any question of long-term benefit for the long-term unemployed, though this had been recommended by the Social Security Advisory Committee. It does not restore the link for uprating of pensions to average

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earnings, which many of us think is the best way to deal with poverty in old age. It does not provide anything to help the blind with their supplementary allowance. It brings in some provisions which make some of us feel very worried about the nation's eyesight, and we hope these will be monitored carefully.
The supplementary allowance for the blind was set at £1·25 in November 1969. If it had kept pace with inflation, it should be £8·25. But the noble Minister told me on 9th July that the present purchasing power of the blind allowance is now 25p. That is a disgrace to the whole House, and especially to the Government.
Under the Bill we have reduced the child dependency allowance by 15p a week. I know that the nation is hard up, but to take 15p a week off the child dependency allowance seems to me unfair and unrealistic. At the same time, the child benefit has in real terms gone up by only about 10p a week since 1979. I understand that at least 425,000 children will lose under this mean clause.
We have discussed—and I shall not go into it in detail again—the severe disablement allowance. Whatever changes there may be—and some might be helped and some might not—there are 16,000 people at present receiving benefit who will be excluded under the Bill because of the alteration in the provisions.
Clause 14 treats occupational pensions as earnings for taxation purposes. I should not have thought that it was really within the Conservative philosophy that people who have saved and who have put their money into their pensions should then find that their earnings, on which they have probably already been taxed, are now to be taxed again as income.
I hope that I have said enough to make it clear that we do not think much of this Bill. We wish that the Government had waited until a wider review of the whole of what is usually called the welfare state and the social security arrangements had been prepared. This is just another piecemeal bite at a very big problem. Therefore, I am not happy, That the Bill do now pass.
5.42 p.m.
Lord Banks: My Lords, I should like to thank the noble Lord, Lord Glenarthur, and the noble Earl, Lord Caithness, for the manner in which they have presented their case throughout the different stages of this Bill, even when we have strongly disagreed with that case. We are grateful to them, too, for supplying the information which we needed for our discussions. I should like particularly to thank the noble Lord, Lord Glenarthur, for arranging the discussion on the severe disablement allowance, which was very valuable indeed. On the Opposition side of the House, from the Opposition Front Bench the noble Lord, Lord Ennals, forcefully assisted from time to time by the noble Baroness who has just spoken, has made a considerable contribution and so have other noble Lords, not least my noble friends Lady Robson and Lord Kilmarnock.
I still believe that a degree of qualification on the part of those who are called upon to dispense spectacles is desirable. I am still concerned about the effect of the proposals for optical appliances on those
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on comparatively low income. I regret that, although the household duties test is to be abolished, the severe disablement allowance will still indirectly discriminate against married women.
My unhappiness remains about the failure to match the abolition of the child dependency additions with a sufficient increase in child benefit. Finally, I am concerned that the Government did not show greater understanding of the effect of retrospection in the otherwise welcome proposals which we have just been discussing to abolish franking. We on these Benches will certainly wish to monitor very closely the working of the Bill's provisions in practice.
Lord Ferrier: My Lords, the speeches that we have just heard make clear that this Bill was not wrongly described as a "rag-bag of a Bill". It would not serve any useful purpose for the House to divide over its passage at this juncture, but from what your Lordships have heard in the last two speeches it is clear that there are a number of features of the Bill which have caused me and others to described it as a rag-bag of a Bill.
As the debates in this House have shown, it has been astonishing to many of us that the DHSS decided to merge in one Bill certain measures about opticians, which some regard as extremely dubious measures, with regulations in connection with social security. In case any of your Lordships wonder how it comes about that I am concerned with social security, I would remind your Lordships that it is a matter of importance to all of us on whichever side of the House we may sit.
More than a quarter of a century ago I took part in a debate in which Lord Pethick-Lawrence and Lord Beveridge also spoke. It might interest your Lordships to know that from that debate stemmed an alteration in the wording from the then current term, "national assistance", to "supplementary benefit". As matters stood at that time, the words "national assistance" stuck in the gullets of some proud old people who refused to "go on the parish". That has been overcome by the words "supplementary benefit", which have a much wider connotation today than they had at that time. I mention this matter because it has been suggested from the other side of the House that Peers on this side know nothing about the problems of poverty or destitution. But that type of criticism is of course only material for a party political knockabout.
As for this Bill, in my view the Short Title appears misleading. It does not cover all the ground. Along with other noble Lords, I was very sorry to hear from my noble friend Lord Mottistone that my noble friend Lord Cullen is unwell. I hope that my noble friend Lord Mottistone will convey our good wishes to my noble friend Lord Cullen for his early recovery, because he has great knowledge of this matter which he has applied to assist our discussions. My noble friend Lord Cullen said at col. 780 on 10th July that he could not help commenting:
"that in the not too distant future the Government may well wish that they had not gone down this road."
That comment rather confirms what the noble Baroness, Lady Jeger, has been saying. Perhaps it would have been much better to wait. In fact this afternoon there have been indications from various speakers that this legislation has been premature in

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regard to taxation, in regard to pharmacists and the like.
The question of the timing of the Bill seems to be very mistaken. I do not know to what extent noble Lords studied The Times leader on 12th July. It referred to the Institute of Fiscal Studies publishing a report on that day on the reform of social security. That leader mentioned a pamphlet Action on Welfare published on that same day by the Social Affairs Unit, which also referred to the need for reform. Could we not have waited? In my view the speech made by the noble Lord, Lord Ennals, on Clause 4 has a bearing on this very matter, but we need not pursue that now.
Be that as it may, my heart has gone out to the hard-working Ministers who have had prematurely to propel this Bill through the House despite the appeals that have been made to the contrary. I think that it was the noble Lord, Lord Wallace of Coslany, who begged the noble Lord to withdraw his Bill and to bring it up next Session, and I think that the noble Baroness, Lady Jeger, cried out, "Good idea". However, here we are.
From what I have said, noble Lords will have gathered that I am not content that the Bill should be passed, but I hope that what I have said will be on the record and will be taken into consideration. My noble friend Lord Cullen may well be right that it will not be long before we have to go over all the ground again with, let us hope, the problem of the opticians separated from that of social security.
5.50 p.m.
Lord Kilmarnock: My Lords, I should like to associate myself with my noble friend Lord Banks in thanking the two Minsters on the Government Front Bench for the way in which they have handled the Bill and for the courtesy that they have constantly shown to us, although in the end we have not managed to make very much impression on the Bill.
It was the optical clauses which received perhaps the greatest amount of debating time and I certainly do not want to go back over all that ground again. However, there is still one loose end for which we must put down a marker. It has been mentioned several times this evening, and I make no apology for mentioning it again. It is the question of the complex prescriptions. The noble Baroness, Lady Jeger, quoted the Secretary of State at Second Reading in another place, but we have much more recent quotations available to us from the noble Earl, Lord Caithness, who, on 10th July in this House at col. 799, in response to an amendment which I moved, said:
"It does, however, give me the opportunity to confirm to the noble Lord, as he has already pointed out, that the Government are concerned about this and we are making very serious efforts to get this particular point right".
A little later in the same column he said:
"We believe that the most vulnerable members of our society ought not to have a financial barrier placed between them and the glasses they require".
In the following column he went on to draw our attention to the provision in the schedule, which allows the Government to make arrangements for a person:
"of such other description as may be prescribed".
We shall look with great interest at these regulations when they are brought before your Lordships' House,
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because we do not think that the Government have yet met us on this point, despite a number of promises, half-promises and indications that they might. The real question here is whether or not severe visual impairment is a matter for the National Health Service—that is, the general optical service. In effect, the Government say that it is not a matter for the National Health Service and, therefore, should be means tested. Our view is totally opposite to that. That is a point on which we are not satisfied and on which we shall certainly want to keep a beady eye when the regulations come before us.
On the question of the family practitioner committees, the road that the Government have gone down is the opposite road to the one which we on these Benches would have wished to follow. We particularly dislike the excessive extension of patronage in the hands of the Secretary of State, which enables him to make something like 3,000 direct appointments to family practitioner committees up and down the land. We believe that this is an unhealthy development. But I must say that in this part of the Bill we secured virtually our only success; we persuaded the Government to recognise the rationality of allowing nurses to have direct representatives on family practitioner committees. We won the argument and in this case the Government listened to the argument and agreed to the necessary amendment. Therefore, that is a minor, but I think significant, success about which we can be pleased.
With regard to the severe disablement allowance, many of us are still rather unhappy about the discouraging effect that Clause 11 may have on the young disabled, because it may discourage them from continuing with education and training with a view to securing a job. That is worrying. Some of us are still extremely worried about the effect of the method of testing mental handicap and mental illness. We had some conversations about this and we understand that a code of practice will be drawn up for the particular area of mental illness.
Finally, I very much agreed with the noble Lord, Lord Ferrier. While we have been debating this Bill, a number of reports of considerable interest—in fact, of great interest—have appeared advocating a thorough reform and simplification of the whole system. The most thoroughgoing was the report by the Institute of Fiscal Studies, to which the noble Lord referred, which describes the social security system in this country as:
"a patchwork quilt falling apart at the seams".
On the same day The Times summed it up by saying:
"Britain's social security system is in a mess. It is inefficient in relieving poverty, disruptive of the labour market, difficult to understand and costly to administer. There is widespread agreement that it needs to be reviewed and then reformed".
This Bill only highlights that necessity. Of course, we are aware of the areas of inquiry initiated by the Secretary of State, but let us hope that when the Secretary of State next introduces social security legislation into Parliament it will be not a dog's breakfast similar to this Bill, but a comprehensive attempt to deal with the fundamental problems.
5.56 p.m.
Lord Northfield: My Lords, I should like to say how grateful I am to the Ministers on the Government

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Front Bench for their courtesy in responding to the campaign which I and others have been waging during consideration of this Bill for greater freedom than the Bill actually offers for those purchasing spectacles. Despite my compliment, may I chide the Ministers for their inconsistency. On the one hand, they said to the noble Lords, Lord Mottistone and Lord Cullen:
"The consumer can be trusted to look after himself in judging the quality and service of sellers of spectacles";
on the other hand, they said:
"The consumer cannot be trusted to look after himself in having himself tested regularly for glaucoma".
I hope that this inconsistency in their attitude will bear in on them as the years go by, and that we shall finally get away from that restriction on freedom to which this provision amounts.
I am glad that at last—and this is the milestone that this Bill represents—the professional and commercial activities of opticians are being separated. Alas! competition has to be pressed and enforced in all commercial activities. We cannot rely on a high degree of self-denial from monopoly activity in our society. It was right that real commercial competition should be introduced into the actual dispensing of these items, many of which, of course, are fashion items rather than simple appliances. I hope that my noble friend Lady Jeger on the Front Bench will allow me to say that even today opticians do not let the girl serving at the counter go into the back room and start making up spectacles. That task is performed by a highly specialised professional company for all opticians.
Baroness Jeger: My Lords, I must not let that comment go on the record. I said absolutely nothing of the sort. I was talking about what would happen after this Bill comes into effect.
Lord Northfield: My Lords, yes. Perhaps I can rephrase the remark in a way which does not upset my noble friend. She implied that after the Bill becomes law someone serving at a shop counter, who has very little knowledge, will go into a back room and start making up spectacles. That is no more likely to happen after the Bill becomes law than before, because in this trade this task is performed by a highly professional, separate company which does it for many opticians. It is a highly skilled task that nobody pretends to do in a back room.
In future, under this Bill, first, consumers will be armed with their prescriptions, which the Minister says opticians will have to hand to them. Secondly, the consumer will receive restrained but helpful advertising of the service that unregistered dispensers and others can offer. So the consumer will have greater choice of where he can go and a greater indication of where he can get the best buy.
Thirdly, I hope that the consumer will then shop around. I hope that he will reflect on the value of the standard made-up spectacles that are available and which can save him a great deal of money, particularly if he does not need very much of a correction in his eyesight. All this will increase competition. I hope that it will have its effect on prices and that it will be good for the whole opticians' trade. It is now up to the opticians and these new unregistered dispensers to
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make the competitive system work, and I am pretty sure they will.
Lord Mottistone: My Lords, having already made a few remarks, I should like briefly to thank my noble friends for the courteous way in which they handled the whole of this Bill—at least the part in which I was interested. Although they did not give a great deal, they at least helped us to resist anything worse from people like the noble Lord, Lord Northfield, and the noble Lord, Lord Rugby. I hope that the result, which is a kind of compromise, will be successful in all its work. I am also grateful for the fact that my noble friend Lord Glenarthur, in accepting an amendment today which I had proposed before, recognised that it was sensible to have some amendments which we could feel recognised the importance of the opticians. I hope that the relationship between them and the DHSS will be splendid in the future. Unlike my noble friend Lord Ferrier, I wish the Bill a good passage.
Lord Stallard: My Lords, may I delay the House for a few seconds. I too should like to thank the noble Lords who have been responsible for the passage of this Bill so far through the House for the courtesy and gracious manner in which they have dealt with the various amendments that I and others have tried to have passed. I also agree with those noble Lords who have described the Bill as a "ragbag". It is a ragbag, and that is a reasonable thing to call it. It was at least two separate Bills, if not more. We were all sad that the Government felt it necessary to roll them all into this one omnibus measure.
I would be wrong if I did not say that I have been disappointed that the Government were unable to accept an amendment that I should have loved to have had carried. That is the amendment on the introduction of the severe disablement allowance. I shall not go into the details any more but I fear that that will introduce more problems than it will solve. The introduction of a new criterion for disablement, the 80 per cent. criterion as well as inaccessibility for work, and so on, will create more problems than it solves. I was sorry that the Government were not able to do more about that, particularly on the housewives' NCIP.
The invalid care allowance is something else I was keen on. I know that noble Lords and noble Baronesses on the Government side who spoke on this share the concern we have felt for a long time. Again, I hope that the Government will be able to give that further consideration as a result of experience following the passage of the Bill. I was more than disappointed, having twice moved an amendment to increase the age allowance from 20 to 25, and then a reasonable compromise from 20 to 23, when the Government were unable to meet us even on those modest attempts to amend this, and make the Bill more palatable and acceptable certainly to the congenitally handicapped who would benefit from that kind of concession.
One of the things I am pleased about is the promise that the noble Lord gave us during the course of one of the amendments that there would be a monitoring process of the Act. That is important so far as I am concerned. I will take every opportunity to pursue this

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question of the monitoring, and keep a close watch on it and use whatever parliamentary devices are available to me to make sure that the points we have raised in the past may be covered by that monitoring arrangement. With those few, I hope constructive, criticisms I too join others in thanking the Ministers again. We shall watch the Act closely and its implementation.
Lord Somers: My Lords, just before we conclude, from these Benches, I also should like to thank the noble Lords on the Front Bench for the way they have manoeuvred this Bill to its final close. I feel that any criticisms which one might have of the Bill are, at this stage, rather like bolting the stable door after the horse has gone, so I shall leave it at that.
Lord Ennals: My Lords, just a few final words from this side of the House before the Bill passes. The only matter I want to defend the Government on is having a miscellaneous provisions Bill. It makes it a ragbag, but there are times when there are good things which one wants to do and one puts them all in a bag and brings them forward. The trouble is that there are not any good things in this bag. That is why at the beginning I called this a "ragbag". As one plucks out each little bit from the bag one realises that there is not a single item which it was necessary to bring forward at this stage or in this form. But we have made some advances, and therefore I too thank the Ministers on the Government Bench for their courtesy and helpfulness.
We have plucked a few things from our debates. One is on the special disability allowance. There is much more understanding of what the Government have in mind. We shall look carefully at the new code of practice, or code of assessment, when it is drawn up. The Government now recognise clearly what our concerns were. We have a nurse on the family practitioner committee, as was said by the noble Lord, Lord Kilmarnock. We have a few extra commas, colons, and brackets as a result of the re-formulation of a paragraph on which I moved an amendment earlier in the day. As the noble Lord, Lord Mottistone, said, we also have a modest concession on the title of optical practitioners.
One of the good things about the debate is that it has been non-partisan. I would say that in the sense that there has been as much wisdom spoken on both sides, and I would cap that by saying that there has been as much nonsense spoken on both sides of your Lordships' House. I am glad to see that my noble friend is still with us in heart and spirit and smiling upon us. It is perhaps helpful that this should be the atmosphere in which we conduct the debate.
When I look through it, it is a shoddy Bill. I am not going to go through it all because we have said it all before. I am just going to finish up with a question. Having thanked the Minister, I want to get something clear. If he cannot answer it now, will he write a letter? I want to know who is right. I want to know whether he is right or whether the Minister of State is right. Of course he has to say that the Minister of State is right. This relates to our dear friend Lord Ross of Marnock and other people in his position. I am quoting from the
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noble Lord, Lord Glenarthur, regarding Schedule 1, paragraph 7, line 1 of the Bill, when, he said:
"Post-cataract patients will be able to get their glasses from the hospital, because the glasses have to be changed regularly over a period of years until the eyes settle down. The same arrangements will be maintained. There is no reason, therefore, for people to fear that because they have had a cataract operation they will have to go to enormous expense to keep their eyes correctly focused. Their glasses will continue to be dispensed by the hospital. This arrangement will continue for the length of time that the eyes are settling down."—[Official Report, 10/7/84; col. 791.]
That was jolly nice, but that was not at all what Kenneth Clarke said in answer to a letter sent to him by the Royal National Institute for the Blind with a particular interest in this. He said:
"In the case of post-operative patients we have no intention of altering the present arrangements whereby their immediate post-operative needs are met by the loan of glasses".
As my noble friend said, we would find it difficult to find anyone who has had any loaned glasses.
"Nor do we propose to alter the existing arrangements whereby patients pay the appropriate charge for their first pair of glasses."
When the noble Lord, Lord Glenarthur, in column 791 made his assurance, I intervened to say,
"My Lords, is this point made clear in the Bill which is before us? If it is, it is a very encouraging reassurance."
The noble Lord said at column 792:
"I am unable to find it in the Bill at the moment".
Perhaps, having had the opportinity of reflecting on this, he will clear this up because it is an important point which affects many people who are post-cataract patients, and it will affect many people in the future. Apart from that question, I just want to say that perhaps that part of it is part of the most raggedy part of the bag.
Lord Glenarthur: My Lords, I am the first to recognise that this is a wide-ranging Bill. I do not think it would he appropriate for me to detain your Lordships at this stage for yet another detailed exposition of its contents or even of what its contents might have been had the noble Baroness, Lady Jeger, had her way. I was chided by the noble Lord, Lord Kilmarnock, to the effect not that it was a ragbag of a Bill (which my noble friend Lord Ferrier said) but that it was a dog's breakfast. All I can say is that if it had had the various additions which the noble Baroness, Lady Jeger, had wanted, the dog would have done very well in the morning.
I should like to refer briefly to those areas which have attracted most attention. A good deal of the debate on the Bill has centered on the provisions in Clause 1, which are concerned with increasing competition in the private market and ending state involvement in the provision of glasses. We believe that as a result most people who wear glasses will in future have a wider choice and their glasses will be cheaper. I appreciate that there are those who would have liked us to have gone even further down the path of liberalisation. The noble Lord, Lord Northfield, as we all know, has tirelessly pursued this aim over the years, and so I am glad that at least some of his wishes have been realised, as indeed have been some of those of the noble Lord, Lord Rugby, who has also pursued the matter with a great deal of vigour in your Lordships' House.

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But we remain convinced that we have struck a sensible balance by retaining the present link between sight testing and the sale of glasses and by ensuring that all glasses sold shall accord with a recent written prescription. We also believe that while ending general NHS supply, we have made sure that no one need be denied access to glasses on financial grounds, and I hope that these safeguards at least will find support from my noble friends Lord Cullen and Lord Mottistone.
I, too, share the wish that has been expressed that my noble friend Lord Cullen will soon be back with us again. I know only too well what a powerful advocate he has been for his cause over the years.
Before we leave the subject of glasses, I wonder whether, in reply to the noble Lord, Lord Ennals, I may try to remove some of the murk that appears in the water over the question of hospital patients and their glasses. If I do not manage to do it now, I shall probably have to write to him yet again to try to elucidate it. The fact is that loaning glasses after operations is accepted practice. While the patient is still an in-patient, his eyes are unsettled and it is not appropriate to test them. The hospital will, therefore, loan glasses which will be of some help, but that will not meet the full optical needs. Once the eyes have settled, and while he is an out-patient, the postoperative patient has his eyes tested and the glasses dispensed. He pays for the glasses, but because the eyes will adjust in the fullness of time, he does not pay for subsequent pairs until the eyes settle, and when frequent changes of glasses are not required.
The procedures perhaps vary from one region to another because the clinical practice of ophthalmologists is different, and it is a matter for local health authorities to check the performance of the regions looking after their hospitals. Even more it is a question principally of the clinicians meeting their patients' needs. There is no evidence that patients anywhere are less generously treated than I have described. The noble Lord asked me whether this was written into the Bill. It is not written into the Bill because it refers to the hospitalised service, and that comes under the National Health Service Act 1977, I think. If either the noble Lord, Lord Ennals, or the noble Lord, Lord Ross, has any evidence of specific cases where it is going wrong, I can only suggest that the noble Lord brings it to my attention and I shall have it looked in to. I hope that that will satisfy them.
I turn to Clause 5 and its related schedule. Changes in the status, accountability and structure of family practitioner committees will provide a firm focus for the provision of family practitioner services. They represent an essential plank in our strategy of ensuring that primary health care continues to be responsive to community needs. I am particularly grateful to my noble friend Lady Cox, the noble Baroness, Lady Robson of Kiddington, and the noble Lord, Lord Kilmarnock for their contributions to the debates on these provisions. I am pleased that we have been able to accept their amendment to give community nurses statutory representation of FPCs.
In our discussions on Part II of the Bill, we have profited from particularly informed and constructive
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debates on our proposals for the introduction of severe disablement allowance. I am grateful to the noble Lord, Lord Banks, for his comments in this respect. I trust that my noble friend Lord Caithness and I have succeeded in alleviating a number of the main concerns that have been expressed.
I think I can safely say that there is now a broad measure of agreement on all sides of your Lordships' House that severe disablement allowance does indeed represent, if not a perfect solution to a difficult problem, a least a step in the right direction and a significant improvement on the present position.
Much of the debate on the provisions in the Bill which will put beyond doubt the arrangements for professional remuneration in the family practitioner services, and which will produce a better deal for future early leavers from occupational pension schemes by abolishing the now discredited practice of franking, has concentrated on the retrospective aspects of those clauses. Indeed that was reflected in amendments which we discussed earlier this afternoon. While I understand the concern which has been expressed, I hope that I have convinced your Lordships that in these particular instances retrospection is not only necessary, but also desirable.
I thank all those who spoke on the Motion that the Bill do now pass for their kind remarks about both my noble friend and myself. In conclusion, it only remains for me to express my appreciation of the thoughtful, constructive and thorough manner in which your Lordships have considered the diverse provisions of this Bill. I am grateful for the constructive approach adopted, particularly behind the scenes, by the noble Lord, Lord Ennals, and the noble Baroness, Lady Jeger. In particular, I should like to thank my noble friend Lord Caithness for this admirable assistance to me in what has been his first venture into the complex, even tortuous, field of health and social security legislation. I am most grateful to him; and at least he has been spared discussion on the subject of franking.
On Question, Bill passed, and returned to the Commons with the amendments.

International Tropical Timber Organisation (Legal Capacities) Order 1984
6.16 p.m.
Baroness Trumpington Baroness Trumpington rose to move, That the draft order laid before the House on 15th June be approved.
The noble Baroness said: My Lords, the International Tropical Timber Agreement is part of the UNCTAD integrated programme for commodities. The main element in the agreement is the establishment of an International Tropical Timber Organisation; an effective focus, it is hoped, for co-operation and consultation between tropical timber producing and consuming countries. The agreement was laid before the House on 5th June. It was signed by the United Kingdom on 29th June.
The International Tropical Timber Organisation will seek to promote the expansion and diversification of world trade in tropical timber. The organisation will propose, approve, and seek finance for research and development projects in tropical timber, and will

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encourage forest industry and management. Furthermore, it will provide a forum for the dissemination of market information among producers and consumers.
The agreement contains no economic provisions, and the organisation, therefore, has no power to intervene in the market in order to influence the price of tropical timber.
The International Tropical Timber Agreement requires that the organisation be granted legal personality by all participating members, and that is the sole purpose of the draft order before your Lordships. It grants no other privileges, nor any immunity to the organisation. It is however, a necessary step towards enabling us to ratify the agreement.
The draft order before your Lordships does not relate to a headquarters agreement. The United Kingdom has offered to host the headquarters of the organisation, which is still to be established. Although it is likely to be some time before a decision on the location of the headquarters is taken, we need to ratify the agreement before 1st October 1984, when it is due to come into force. Our ratification of the agreement will help demonstrate our commitment to international co-operation in this area. I very much hope that your Lordships will approve this draft order, thereby signifying your recognition of the important work to be performed by the International Tropical Timber Organisation. I beg to move.
Moved, That the draft order laid before the House on 15th June be approved.—(Baroness Trwnpington.)
Lord Oram: My Lords, this is clearly a desirable order since the organisation to which it gives legal powers is clearly a desirable organisation. Many a time in your Lordships' House I have called attention to the importance to third world countries of trade in raw and processed materials, and increasingly it is important that these countries should not only export commodities in their raw state but process them before export and thus get the benefit of the added value. It seems to me that this new international organisation is designed to help the third world countries in that regard.
If the International Tropical Timber Organisation is successful in achieving the objectives set out in Article 1 of the agreement under which it is established, there is little doubt that tropical countries will be able to extract increased wealth from their forests as a result of the work of the organisation. I am glad to see that both in the list of objectives to which the noble Baroness referred and in the description of the projects which it is expected that the organisation will undertake, the development of forests and reafforestation take their place together with such activities as harvesting, logging and wood utilisation. I am also glad to see that one of the three committees of the organisation will be concerned specifically with reafforestation and with forest management.
I could not help feeling as I read through the agreement that the work of the organisation is going to be more concerned with cutting trees down and sawing them up and shipping them abroad than it will be with growing more trees and preventing the denuding of forest lands, which is a serious problem. I have seen it
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estimated that an area of forest the size of Austria and Albania combined is being lost every year and that, at this rate, by the year 2000 the forest land in the tropics will have shrunk by some 10 to 15 per cent. Therefore, that side of the problem to which the organisation will need to turn its attention is very important. This problem needs as much attention and as much research as does the problem of finding more efficient methods of utilisation and processing.
I hope—and I think we can expect—that a proper balance will be kept between the two aspects of the work of the organisation. I should therefore like to ask the noble Baroness for an assurance concerning the relative priorities that are likely to be given to different kinds of projects. This matter is dealt with briefly and in general terms in paragraph 8 of Article 23 of the agreement, but I wonder whether the noble Baroness can assure the House that it is likely that as much priority will be given to projects for reafforestation as is given to projects for harvesting, wood utilisation and processing. I hope that a balance will be struck between those two kinds of activities.
That is the only note of hesitation that I need to strike in connection with this order which, as I said at the outset, is a desirable order and one to which from this side of the House we give our general support.
6.25 p.m.
Lord McNair: My Lords, we too, welcome this draft statutory instrument as a step towards ratification of the International Tropical Timber Agreement which I understand will take place in August. If I may, I will dwell on the agreement rather than the order itself which merely gives that legal personality to the organisation which Article 17(1) of the agreement requires. As the noble Baroness has said, the agreement is part of the UNCTAD integrated programme for commodities. Previous agreements in this series have included those on rubber, tin, cocoa, coffee and jute. Unlike previous agreements, with the exception of jute, this one does not include any provision for buffer stocking in order to stabilise the market. It is very largely a non-interventionist agreement.
However, we agree with its objectives and particularly those dealing with reafforestation (to which the noble Lord, Lord Oram, rightly attached such importance), the conservation of tropical forests and the maintenance of ecological balance in those regions. We welcome the provision of an effective framework for consultation and co-operation on this matter between the producer countries and the consumer countries and we hope that this cooperation can be extended to cover wider aspects of world economic policy, as we feel that such cooperation is quite essential for the future wellbeing of the planet we happen to live on. On a slightly less important note, we very much hope that the invitation to set up the headquarters in this country will be accepted; and we rather like the suggestion of the honourable Member for Hamilton that it should be in Edinburgh where the Forestry Commission have their headquarters.
There are, however, one or two questions that I should like to ask. First, do the Government intend to make a voluntary contribution to this special account;

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and, if so, how much? And will it come out of the existing overseas development budget? Secondly, can we assume that the non-interventionist nature of this agreement meets with the full approval of the producer countries? If so, presumably it will be on the grounds of practicality. Lastly, what other steps, if any, are the Government going to take to try to bring about a more stable commodity trade to the benefit of North and South alike, such as, for example, a speedy renegotiation of the sugar agreement?
Viscount Massereene and Ferrard: My Lords, before my noble friend answers, might I point out that we do give quite a lot of help for reafforestation through overseas aid, for instance, in Malawi and that most of our aid actually goes to afforestation. I have been all over the forests there. They are extremely well managed. I quite agree with what has been said, that reafforestation, especially in the tropics, is extremely important.
Baroness Trumpington: My Lords, I thank both the noble Lord, Lord Oram, and the noble Lord, Lord McNair, for their welcome for this measure. In answer to the particular question of the noble Lord, Lord Oram, the decisions on priorities will be taken next year after the agreement enters into force. The United Kingdom considers reafforestation to be one of the most important aspects of the agreement and will certainly be pressing for projects in this area to be given as much priority as those in the other areas mentioned by the noble Lord.
The noble Lord, Lord McNair, asked a question about the siting of the headquarters. London is one of the seven candidates being considered for the location of the headquarters of the organisation. If our offer were accepted, we should need to negotiate a headquarters agreement with the organisation. This is common practice, as the noble Lord will know.
With regard to funding, funding for the implementation of the agreement is expected to come largely from the second account of the common fund when this comes into operation. The direct cost to the United Kingdom will be confined to the annual membership contribution to the administrative account. Provisions have been made for this contribution, estimated at less than £20,000 per annum, by Her Majesty's Government through the DTI.
I thank the noble Viscount, Lord Massereene and Ferrard, for his comments about reafforestation. I am sure I have already made clear to your Lordships the importance which, naturally, we as a country attach to this measure throughout the world. I note the remarks of the noble Lord, Lord McNair, on buffer stocking. I feel it would be difficult for me to answer any other remarks because it would be premature before the organisation is set up, but I feel sure the producer countries are in agreement, because they stand only to benefit.
On Question, Motion agreed to.

Companies Acts (Pre-Consolidation Amendments) (No. 2) Order 1984
6.31 p.m.
Lord Lucas of Chilworth Lord Lucas of Chilworth rose to move, That the draft order laid before the House on 25th June be approved.
The noble Lord said: My Lords, since 1948 there have been four major Companies Acts—in 1967, 1976, 1980 and 1981—which have introduced into company law new and radical concepts. Inevitably, such a body of law contains a number of anomalies, anachronisms and inconsistencies. The distinguished retired parliamentary draftsman working on these Acts came to the view that a satisfactory consolidation could not be affected within the normal consolidation procedures.
The orthodox solution to this problem would have been a programme Bill to make the necessary pre-consolidation paving amendments. However, this alternative, because of the pressure on legislative time, would have delayed the introduction of the consolidation probably for a number of years. This was not considered acceptable because the Government had accepted the urgent need to consolidate. This was keenly felt by practitioners and those concerned with company law. Therefore, the Companies Act of 1981 provided that amendments could be made by order, and we are now considering the second order made under this procedure.
This draft order is a very small part of the preliminaries to the consolidation of the Acts. It has been considered by the Joint Committee on Statutory Instruments, which made no comment. The purpose of the order is to make further amendments to the Companies Acts in addition to those already made in the first Pre-Consolidation Amendments Order earlier this year.
The amendments made in this and in the earlier order are desirable to enable a satisfactory consolidation to be produced. The power to make the amendments derives from Section 116 of the 1981 Act and it can be exercised only on the basis of recommendations of the Law Commission and the Scottish Law Commission acting jointly.
As with the previous order, a report by the two Law Commissions in Command Paper 9272, making joint recommendations, was presented to Parliament last month when the draft order was laid. The report explains the need for and the effect of each amendment. If the order is made, the amendments will come into force only with the Consolidation Acts and the Section 116 power will then lapse.
As my honourable friend the Minister of State for Industry explained in another place, we have had to defer introducing the legislation to consolidate the Companies Acts until next session. The complexity and subtelty of the subject matter is unusual, and in view of what I have said about the scale of the project, it has taken longer to prepare the legislation than we had hoped.
However, we have sought to put this extra time to good use. Continuing work on the legislation and further research on some of the points which emerged when the previous order was under consideration have

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brought to light several points which might usefully be resolved by the present procedure. The necessary amendments are contained in the present draft order. These proposed improvements to the legislation can be put forward now because of the willingness of the two Law Commissions to deal with the points in time to meet the constraints of the parliamentary timetable. I should at this stage like to thank them very warmly for all their work.
My Lords, I commend the draft order and beg to move the Motion standing in my name.
Moved, That the draft order laid before the House on 25th June be approved.—(Lord Lucas of Chilworth.)
Lord Bruce of Donington: My Lords, I should like to thank the noble Lord for having presented the order with the lucidity and clarity to which we have become accustomed. We on this side of the House see no reason why these orders should not be made. As the noble Lord has said, they cover four different Companies Acts, all of which are due for consolidation in due course.
One of the Acts concerns Scotland, and, being a Scot by descent myself, I am happy to report to the House that the noble Lord, Lord Ross of Marnock, has been kind enough to delegate to me the overseeing of this part of the order which relates to Scotland.
As I have already said, the orders are quite unexceptionable and there is no reason why I should detain the House further upon them. There is, however, just one query of which I gave the noble Lord notice earlier on today. It concerns the consolidation process itself. We are given to understand that following the Cork Report we are due to have a Bill presented to us some time before Christmas which substantially amends the law of insolvency, which, as your Lordships are aware, is very largely enshrined in the Companies Act of 1948.
What I should like to know from the noble Lord, if he is in a position to inform me, is whether the whole process of consolidation has taken into account the fact that any Act to amend the insolvency law is likely to make further quite large-scale amendments to the Companies Act 1948. Perhaps the noble Lord can give us some information on that point, because it is in the interests of the legal and accountancy professions, as well as of the companies themselves, to know just how this programme is going forward. It is a matter of very considerable interest.
The noble Lord said he had received a fair wind from the Law Society and various other organisations concerned with the law. I just wonder whether he has had any communication at all from the CCAB, the Consultative Committee of Accountancy Bodies, as to whether they had given it a fair wind as well. I assume that they have, since I, in common with other noble Lords, have had no representations from them. Aside from those observations, I am very pleased to give the order a fair wind.
Lord Lloyd of Kilgerran: My Lords, the noble Lord the Minister has summarised the contents and purpose of this order in his usual concise and efficient way and I would like to join in thanking him for once again fulfilling his task so well before us.
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The contents of the order have some significance to many businesses, business firms, accountants and lawyers. I, of course, would not presume to make any comments at all on those items which deal with Scottish law, though I had hoped that the noble Lord, Lord Bruce of Donington might be able to explain the social significance arising from Paragraphs 2 and 3, where there is now an amendment of the Criminal Procedure (Scotland) Act to enable the courts not only to put people into prison but also to fine them.
I was also interested in Paragraph 6 which has clarified some points, including one perhaps of not great importance but which has caused a little trouble to practitioners: that is, the meaning of the word "transaction" in the Companies Act. Now in Paragraph 6 it says that it is associating the word "transaction" with "or arrangement"; and that will clarify the position to some extent.
However, I was a little unhappy about the observations of the noble Lord the Minister regarding the progress being made for the consolidation of the Companies Acts. As he said, we have four major Acts and we will soon have two orders. Your Lordships have heard on many occasions about the desirability of consolidating the Companies Acts as soon as possible. It is not quite clear to me when the Minister anticipated that this work would be completed. He said, "perhaps in the next Session", but I am not clear what that means in the way of time.
As I have said before in your Lordships' House, it is very difficult for industry and their advisers to follow the many Acts that exist in their present form, and thus to give adequate advice. I hope that the Government will still press on very seriously with producing a consolidated Act in as convenient a form as possible and as cheaply as possible. My Lords, I support this order.
Lord Renton: My Lords, I, too, should like to support this order. I am sure that all those who would like to see an improvement in the statute book must welcome the method which has been used again on this occasion. The importance of progress in consolidation cannot be under-estimated and I am sure that most of us would like to see even more of it, although there has been improved progress in recent years. But the very strict statutory requirements affecting consolidation have undoubtedly been a hindrance to progress. They have caused delay sometimes because of the sheer complexity of trying to consolidate a mass of previous legislation which may be conflicting, and to do so while still adhering to the statutory requirements.
Of course, the method used on this occasion enables mistakes to be rectified. It should I think be used very freely in order to delete provisions which, even in a relatively short space of years, may seem to have become obsolete or redundant as well as conflicting with more important provisions. So this order, as an example of the method, is to be welcomed; but I should like to see the method extended.
I hope it is not irrelevant for me to mention that the Statute Law Society, of which I have the honour to be president and of which the late the right honourable Sir George Baker was chairman (and we deeply regret his passing) recently had a working party on consoli-

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dation of which he was a member, which recommended that the pace of consolidation should be and could be increased by the greater use of methods of this kind. I hope before long to have copies of this report to send to those members of the Government who are interested, and perhaps to others too.
Turning briefly to the amendments that are proposed here, they are technical and limited; they are not likely to arouse controversy. But I should like, in particular, to point to paragraphs 2 and 3, which, for Scotland, appear to correct what can only have been regarded as a mistake in the previous legislation, the 1975 legislation. That is a plain example of what I was saying just now and of the desirability of it.
The fact that sometimes these matters will be technical and understood only by experts like the noble Lord, Lord Lloyd of Kilgerran, should not alarm those of us who are not so expert but who are responsible for legislation, because really this is a matter in which the relatively few people who have the experience, the training and, I may add, the intellect to deal with these matters, must be allowed a certain amount of freedom. I would say that, for example, the amendments set out in paragraph 8 are of that kind. It is, for example, the accountancy bodies to which the noble Lord, Lord Bruce, so properly referred, which have the experience and which have discovered the defects which can arise and which should be cured in the process of consolidation, rather than perhaps waiting for many years for a fresh major Bill.
Lord Lucas of Chilworth: My Lords, may I thank the noble Lord, Lord Bruce of Donington, the noble Lord, Lord Lloyd of Kilgerran, and my noble friend Lord Renton for their welcome to this measure. May I also thank them for their response and for their very useful comments.
Perhaps I might just say, in response to my noble friend's remarks, that I do not know how he was able to exclude himself from the learning which he applied to the noble Lords, Lord Bruce of Donington and Lord Lloyd of Kilgerran, because it is I who have the alarm. Neither he nor other noble Lords who are engaged in this profession have any alarm at all, of course. But I am very much encouraged by what my noble friend said in his welcome for this procedure. There is no doubt that all those concerned will be watching how this procedure is used and what its effect will be.
There may very well be, as I think the noble Lord, Lord Lloyd, said, some disappointments that consolidation has been delayed for so long. However, it was fairly considerable and I have to say that when the Consolidation Bill is presented to Parliament, I fear it is going to be some 600 pages long with 700 or so clauses in it. That I think explains some of the complexity.
The noble Lord, Lord Lloyd, also asked about the timetable on this. We plan to introduce the Bill at the earliest possible opportunity in the next Session, and it is intended that it shall be done in sufficient time for it to come into force no later than 1st July 1985.
The noble Lord, Lord Bruce, asked two specific questions, and he gave me notice of one of them for
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which I am most grateful to him. He asked in particular how the Cork Committee, the insolvency law review, was going to be handled. As he will know, there are a number of proposals currently under discussion, with some implications for the consolidation legislation: the Gower report, the European Community's Seventh Directive on group accounts and the Third Directive on mergers of public companies. In particular, so far as the Cork Committee's report is concerned, a White Paper was issued in February, as he will recall. The proposals contained in it will be enacted in separate legislation which, subject to the pressures of other parliamentary business, the Governmment intend to introduce in the next Session of Parliament. So they will form a separate piece of legislation. Therefore, dependent upon whether the main Bill has to be amended before it comes to Parliament, to take care of what would appear to be a shorter piece of legislation dealing with the Cork Report—
Lord Bruce of Donington: My Lords, I want to be quite sure that I have understood the noble Lord correctly. As I understand it, legislation on insolvency will be introduced first. On the assumption that it proves sufficiently non-controversial not to cause the party managers any difficulty, it ought to be available some time before Christmas. The question that I have to ask the noble Lord is: will that then be consolidated along with the rest or will it rest on its own feet?
Lord Lucas of Chilworth: My Lords, I am most grateful to the noble Lord for making his question quite clear to me. It will rest upon its own feet, but I could not possibly commit my right honourable friends in another place as to whether it will appear before Christmas. Certainly, it will be early in the Session. The noble Lord asked me about consultation. As your Lordships will probably recall, there was quite extensive consultation prior to the first report of the two Law Commissions which led to the first pre-consolidation amendment order earlier in the year. As I indicated in my opening remarks, the circumstances surrounding the second report and this order are different. The two Law Commissions have had to act most expeditiously to produce the report in the time available and there was simply not time to undertake the normal type of consultation that we conducted previously. However, we have no reason to think that there is any disagreement with the proposals contained in the order.
I think that that answers all the noble Lords' questions. I am quite sure that this order will pave the way for a better consolidation—a development to be welcomed by all those concerned with company law. I am most grateful to noble Lords for their support.
On Question, Motion agreed to.

Pedal Bicycles (Safety) (Amendment) Regulations 1984
6.53 p.m.
Lord Lucas of Chilworth: My Lords, I beg to move the draft Pedal Bicycles (Safety) (Amendment) Regulations 1984. These regulations have been laid in

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draft under powers contained in the Consumer Safety Act 1978. If approved, the regulations will amend the Pedal Bicycles (Safety) Regulations 1984 which, as noble Lords may recall, were introduced into your Lordships' House in February this year by myself. These regulations make it an offence from 1st August 1984 to supply a new bicycle if it does not comply with the British Standard for Cycles, BS 6102. That standard lays down safety requirements for all basic bicycle components. As sometimes happens with new standards, defects in the drafting have come to light. The British Standards Institution have issued an amendment—AMD 4627 dated 31st May 1984. Without this amendment, the standard would prohibit protrusions on bicycles, such as lamp brackets, rear gear change mechanisms and so on. Clearly, that was not the intention. The amendment also clarifies provisions on chain guards and markings.
As noble Lords will note, the draft regulations are commendably short and very simple. If approved, they will incorporate the amended standard in the 1984 Bicycle Safety Regulations. This will ensure that manufacturers and retailers are not put at risk of enforcement action. Some manufacturers say that their bicycles comply with the original standard, so the amending regulations have been drafted in such a way as to give manufacturers the option of supplying bicycles conforming both to the original standard and the amended standard. Although this is a very small change, it is nevertheless important to some bicycle manufacturers, including our own Raleigh. The change certainly does not compromise safety in any way at all. Manufacturers will still have to build bicycles to very high standards, and to the basic standard set down. I commend the draft regulations to your Lordships.
Moved, that the draft regulations laid before the House on 22nd June be approved.—(Lord Lucas of Chilworth.)
Lord Underhill: My Lords, we are grateful to the noble Lord the Minister for bringing this order from some obscurity into brightness. I do not think that any of us had much idea of what the order was about. But it is obviously an order of common sense and to the benefit of both the users of bicycles and the traders, and we give it a warm welcome.
Lord Beaumont of Whitley: My Lords, I too should like to thank the noble Lord for his exposition. I have no comments or questions on the main point of the order, but I am afraid that it gives me a chance to raise a question which I have raised previously in your Lordships' House and which, although I have not yet had an answer, has puzzled a great many people to whom I have spoken and who have read the Hansard containing the speech in which I raised it. I apologise for not having given notice to the Minister of this question and I will understand if he is not able to answer immediately, although I should be extremely grateful if I could have a written explanation.
I refer to the whole question of warning devices on bicycles, particularly bells which, when most of your Lordships were young, were absolutely compulsory. This matter arose when we were discussing the question of the blind and the roads and paths which were to be segregated for them. I wondered what
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would happen in areas where both bicycles and pedestrians were allowed to travel. There is a growing feeling that it is a very great pity that warning devices on bicycles are no longer compulsory.
I managed to get hold of the BS which is referred to in this order and I see that Section 17 says:
"A bell or other suitable warning device may be fitted".
That is not very helpful. It might just as well be left out. A bell may be fitted or it may not be fitted.
There seems to be a fairly strong feeling among some people, not least the blind, that it is a great pity that bells on bicycles are not compulsory any longer, and there is some mystification as to how it happened that this has been left out of regulations. I understand that one of the reasons was that the Pedestrians' Association, in a moment of less than its usual perspicacity, offered no objection at the key time—a situation of which it now repents and is reconsidering. But it is a reasonably important matter. As I said, I apologise to the Minister for not giving him notice, but since this was an opportunity to raise the point in your Lordships' House I thought it was worth taking it.
Lord Lucas of Chilworth: My Lords, I am most grateful to the noble Lord, Lord Underhill, and the noble Lord, Lord Beaumont of Whitley, for their comments in respect of this draft order. I do not think that I need to make any response to the noble Lord, Lord Underhill, whose experience of bicycling and bicycling matters enabled him, notwithstanding his denial, to understand the regulations exactly on first sight.
I am grateful that the noble Lord, Lord Beaumont of Whitley, accepts the draft regulations. He raised a point which I know is very near and dear to him. I recall that during the debate on somewhat different regulations concerning cycling he dealt with the interests of the blind and the disabled. The noble Lord is quite right when he says that paragraph 17 on page 5 of British Standard 6102 says:
"A bell or other suitable warning device may be fitted".
I cannot agree with the noble Lord when he says that that may very well not have been written down. The British Standards Institution have thought it necessary to give this piece of advice in the regulations.
Lord Beaumont of Whitley: My Lords, what is the advice which the noble Lord the Minister thinks is contained in that particular sentence? It does not appear to contain any advice at all. It is just a statement.
Lord Lucas of Chilworth: My Lords, it certainly is a statement. It does not say "BS advise X, Y, Z", or anything else. It just says:
"A bell or other suitable warning device may be fitted".
Lord Beaumont of Whitley: My Lords, may be.
Lord Lucas of Chilworth: My Lords, may be. Being a very simple reader of regulations, I should myself have thought that this was a piece of advice proferred to those who manufacture bicycles to certain standards. The noble Lord reminded us that the Pedestrians' Association and others were at one time opposed to mandatory requirements. The

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Government preferred at that time, and still do, to leave the option open. One has to think in these cases of the practicalities of a possible infringement, were a warning device made mandatory. One has to accept that some things are possible and that others are not.
I have to say—I do not say it in any spirit of jocularity—that the sounding of a bell is not always going to help a blind person. A blind person will not necessarily know from which direction a bicycle is approaching, nor whether he should move left or right. He could get himself into a good deal of trouble. I should have thought that the Government could provide far better for the safety of blind people and other disadvantaged people using the roads and/or pavements if they were able to persuade bicycle users to have greater consideration for the users of pavements. I do not believe that I can help the noble Lord any further on that matter.
On Question, Motion agreed to.

Northern Ireland (Emergency Provisions) Act 1978 (Continuance) Order 1984
7.3 p.m.
The Parliamentary Under-Secretary of State, Northern Ireland Office (Lord Lyell)The Parliamentary Under-Secretary of State, Northern Ireland Office (Lord Lyell) rose to move, That the draft order laid before the House on 14th June be approved.
The noble Lord said: My Lords, I beg to move that the draft Northern Ireland (Emergency Provisions) Act 1978 (Continuance) Order 1984, which was laid before your Lordships' House on 14th June of this year be approved. I have to say at the outset that this legislation is of crucial importance to the community in Northern Ireland, which continues to suffer vicious criminal attacks from terrorists. Exceptional powers are still necessary to deal with those attacks and to protect the people of the Province.
Your Lordships will be aware that on this occasion the issue of renewal is being put before Parliament against a background of a comprehensive and independent review of the emergency legislation. Sir George Baker's report was published in April of this year. I am sure that all of your Lordships wish to join me in paying tribute to Sir George's work, and will have been very saddened, as I was, to learn of his recent death.
The review of the emergency provisions legislation was the last public duty of Sir George. It reflects the outstanding qualities of humanity and fairness that marked all his work. His report will, I am sure, stimulate and prompt the most wide-ranging debate both in your Lordships' House and throughout the community. I hope that there will be an opportunity to debate Sir George's detailed conclusions and recommendations thoroughly, in due course. The Government will, I assure your Lordships, take careful note of everything that is said in framing their comprehensive reply.
Most of Sir George's individual recommendations have legal and operational implications which will require a great deal of study and consultation, and some can be considered only when the Police and
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Criminal Evidence Bill has reached the statute book. However, I can say that the Government are in broad agreement with both the tone of Sir George's report and most of his conclusions and recommendations. Our starting point has always been that we are committed to removing all emergency measures from the statute book as soon as improvements in the security situation allow. But, as Sir George makes clear in this report, there is no scope at present for making wholesale changes to the emergency legislation which currently applies in the Province.
I think your Lordships will agree that events since the last renewal of the Emergency Provisions Act have underlined this conclusion. Since 1st December 1983 there have been 51 deaths arising from the security situation in the Province; 28 of these were civilians, seven were officers of the Royal Ulster Constabulary, six were members of the Regular Army, and no fewer than 10 belonged to the Ulster Defence Regiment. Your Lordships will, I am sure, be aware that two of the Ulster Defence Regiment members who died were tragically killed by a land mine as recently as last Saturday. Until the end of June of this year 311 people have been injured in security incidents, and 124 of them were members of the security forces. Over the same period there were 122 different shooting incidents and 133 explosions.
I am sure that the whole House will appreciate from these appalling statistics just what violence confronts the whole community in Northern Ireland, but I am bound to say that the resolve of the Government and of the security forces remains absolute. We are committed to enforcing the rule of law, which is absolutely essential in any civilised society, and we are committed to doing it according to the highest standards of impartiality and justice.
Initial responsibility for implementing this policy falls, of course, on the courageous and dedicated members of the security forces. I believe that we owe a heavy debt to the high standards of professionalism and, above all, devotion displayed by the security forces in carrying out their duties under the law.
I think your Lordships will agree that it might help if I were to give some figures in order to illustrate some of the success which the security forces are having in tackling terrorism. From the beginning of December until the end of June of this year, 325 people were charged with terrorist-type offences, including no fewer than 77 with murder and attempted murder, and 109 with firearms and explosives offences. Over the same period, more than 7,300 pounds of explosives were found and a large number of devices containing over 4,000 pounds of explosives were neutralised.
The security forces know that they have the Government's full support in the discharge of their dangerous tasks. The most tangible expression of this support is in the resources which the Government have made available to the chief constable and the GOC to ensure that their men have what is necessary to carry out their work effectively. For example, we have recently authorised an additional 500 posts for the RUC, and it is hoped that these fresh vacancies will all be filled before the end of this financial year.
However, the security forces also need the support of the community. They will never be able to eliminate

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terrorism without the wholehearted backing of the people they are there to protect. Terrorists and their supporters know this, and they attempt to undermine public confidence by smear tactics and propaganda campaigns.
One such propaganda campaign is directed at the use of accomplice evidence. I would remind your Lordships that there is nothing new about this form of evidence in the United Kingdom, but the decision of some former terrorists to turn their backs on their colleagues has led to cries of, for instance, "betrayal" and, above all, to bitter attacks on all such evidence, no matter what the circumstances of the particular case. But it is for the independent Director of Public Prosecutions to assess the allegations of an accomplice and to determine their value against the background of any other evidence which can be presented. It is for the judge to determine how much weight should be put on that evidence, and he must give his reasoning when setting out his eventual judgment. This process is in the public interest and it is not a matter for Ministers or indeed for political interference.
In a sense, the community's support for the security forces and for the judiciary is expressed in the exceptional powers which Parliament has granted in the emergency legislation that is before us this evening. The Act contains additional arrest and detention powers for the police and the army, together with certain exceptional powers of search and seizure. The Act provides for the proscription of certain criminal organizations, and also provides for trial by a judge sitting alone for certain schedule offences, to counter the problems of jury intimidation and perverse verdicts. The Act does not of course alter the central principles of British justice in the Province. The onus remains on the prosecution to prove guilt beyond reasonable doubt. Also, accused persons have the right to take legal advice of their choice and to be represented by their own lawyers in open court, and there remains the right of appeal against conviction or sentence on matters of law and fact.
The Government fully recognise that emergency powers do not represent the answer to Northern Ireland's problems, and they will continue to do everything within their power to develop the political and economic fabric of the Province in order to reduce and eventually to eliminate the tensions and the problems which lie at the root of this violence. We look for assistance from every reasonable and responsible quarter to that end, both within Northern Ireland and elsewhere, and have been encouraged by the strength of the Republic's commitment to tackling the terrorist violence, which is as much a threat to them as it is to us. The close and effective working relationship between the two police forces on both sides of the border remains a valuable element in the fight against terrorism. We whole-heartedly approve this co-operation and are ready to look realistically at practical ways of developing it further.
Despite the efforts that are being made to remove the need for these extraordinary measures, I hope your Lordships will accept that, for the time being, the emergency powers must continue. They are still needed to sustain the confidence of the community in the rule of law and in the willingness of this
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Parliament, where the ultimate responsibility lies, to support the security forces and the courts who are upholding that rule of law.
I ask, therefore, that your Lordships agree that the powers in the Northern Ireland (Emergency Provisions) Act 1978 which are currently in force should be allowed to continue. My Lords, I beg to move.
Moved, That the draft order laid before the House on 14th June be approved—(Lord Lyell.)
Lord Underhill: My Lords, this six monthly opportunity to debate the renewal of the Emergency Provisions Act has always been taken to be an opportunity also to review the actual operations of the provisions. From these Benches we have always stressed that the emergency provisions must not carry on indefinitely, and, as the noble Lord, Lord Lyell, has mentioned, we now have before us the report of the review conducted by the late Sir George Baker. We would like to join in the expression of regret at his passing and pay tribute to his work. All may not agree with the conclusions and recommendations made by Sir George in his report, but the report indicates a task well done, and no one who reads the report can do other than see that it has a very personal style.
Before continuing I should like to join the Minister in a tribute to all sections of the security forces. The Minister referred to the fatalities and injuries during the last few months, but once again I should like to draw your Lordships' attention to the separate report which was presented to the New Ireland Forum on the cost of violence over the last 15 years. I shall not go into the details but the figures, frankly, are frightening, when one sees them. Both communities have suffered. In fact contrary to what some people generally believe, from the figures given it would seem that the fatalities of persons born in Northern Ireland have weighed more heavily upon the Catholic community than on the Protestant community. There is also to be considered the massive cost of security activities, compensation, and the adverse effect there is on industry.
May I say just a few words about RUC. The increase of 500 in the strength of the RUC, which was announced in April, would seem to be an indication of encouragement for more authority to be given to the police. That is all to the good. I note in the chief constable's annual report which was presented in March the emphasis that he makes on building closer ties with the community and developing greater contact between the police and the public. In fact in his own foreword there is a very encouraging statement when he mentioned that during the current year, 1984,
"steps will be taken towards establishing more formal and mutually beneficial links and relationships between the police at sub-divisional level, locally elected representatives, and other responsible organisations and groups, towards the enhancement of the quality of living and the reduction of crime and socially deviant behaviour".
I wonder if the noble Lord the Minister can make some comment, as we are now well over half way through the year, as to how that work which was intended to be carried out during 1984 is progressing.
This aspect is also emphasised in the report of the Standing Advisory Commission on Human Rights which was presented to Parliament in February. I see

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that Chapter 3 refers to aspects of the Emergency Provisions Act. Paragraph 10 states:
"Violence has now become recognised as endemic."
In the light of questions which were dealt with in your Lordships' House the other day, it is significant to read part of paragraph 10 of that chapter:
"A significantly greater burden of responsibility in combating acts of terrorism now rests with the police rather than the army and, although social and economic deprivation is not the root cause of terrorism in the Province, we are in no doubt that the security forces' task has been made that much more difficult by the increased deprivation which provides a fertile context in which terrorism can flourish.".
In a previous debate on a similar renewal order I referred to the activity on community relations carried out by the RUC. The chief constable's report outlines considerable work carried out in this direction. The activities appear to be very varied. I note that the 1,051 Blue Lamp Discos were attended by some 128,000 young people. Seven thousand participated in rambles sponsored by 24 district councils. One thousand attended 36 summer camps with a similar number at 111 follow-up weekend camps.
Could the Minister say how far all this activity is cross-community, or, if it is not practicable for it to be cross-community in that respect, how far does it involve young people of both communities; and is there any assessment of the benefits of this activity?
The Opposition, both in the other place and from this Dispatch Box, have stressed time and again the need for a review of the Emergency Powers Act. These pressures were resisted by the Government until 1982, when the Secretary of State announced the setting up of a review. But it was not until a year later that the Secretary of State was able to announce that Sir George Baker would be carrying out the review. As the Minister said, the report of the review was published in April. We did not necessarily expect that the Government would be able to make announcements on its decisions very quickly on all the recommendations, but in a Written Answer on 10th April, at col. 139 of the Official Report of the other place, when referring that day to the publication of the report, the Secretary of State said:
"The Government are giving careful consideration to the report's recommendations. Parliament will have opportunity to express its views, and the Government will take them fully into account, as they will views expressed elsewhere".
But there has been no debate in another place, and there has been no debate in your Lordships' House. But Parliament is now being asked once again to approve an order renewing the provisions without such a debate, and without any indication of the Government's attitude to the conclusions and recommendations contained in the report.
A few moments ago, the Minister said that the Government accepted most of the recommendations. There are many recommendations, and I shall be interested to know which they do not accept. The noble Lord said also that it is hoped to be able to debate the report in due course. On the last occasion we debated such an order, I said that I hoped that it would be the last time that we would have a renewal order presented to us without there being any changes arising from a review.
I must emphasise that the Labour Opposition—and
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certainly other oppositions—have always rejected terrorism and lawlessness; that is beyond any question. They have had total and complete opposition to violence to achieve political ends. But Parliament has been faced with a difficult choice. Should it once again approve an order for renewal without there being any changes, without any indication of whether there will be changes, and without any indication of what those changes might be? Or should it register a protest against continuance of the present provisions?
The Opposition in another place took the latter stance but appreciated that that could be misunderstood. In fact my honourable and learned friend Mr. Peter Archer said in a debate on this renewal order in another place that some Members would, no doubt, try to distort the Opposition's attitude as being unmindful of the victims of violence and an encouragement to those who engage in violence. There must be balance between the maintenance of law and order and the maintenance of civil rights. That view was expressed by the Secretary of State during that same debate, and the noble Lord, Lord Lyell, echoed those same sentiments this evening.
The Opposition do not propose a complete repeal of the Emergency Provisions Act. They recognise that Northern Ireland is not yet in a position to return to what we would regard as normality. But there is no doubt that some changes to the emergency provisions must be sought. That view is expressed also in the report of the Advisory Commission on Human Rights. In dealing with emergency provisions, paragraph 11 of that report states:
"We also agreed that these measures should remain in force only while strictly necessary in the exigencies of the situation, while they continue to be effective, and while their aims cannot be achieved by use of the general law. It is also important to ensure that emergency powers do not make unacceptable inroads into civil liberties and that effective safeguards exist to minimise the possibilities of abuse".
The commission also complain of the piecemeal review of special legislation: the Prevention of Terrorism Act; the review of the noble Earl, Lord Jellicoe; the Emergency Provisions Act, and the report which has not yet been debated; and also the likelihood of some of the provisions of the Police and Criminal Evidence Bill being enacted for Northern Ireland. Indeed, in its written evidence to Sir George Baker the commission urged the need for an authoritative statement of the law governing all the operations of the security forces in Northern Ireland.
This is not the occasion to open a full debate on a review of the Emergency Provisions Act, which this order is extending, or to debate any changes we might wish to see arising from Sir George Baker's review. And it is not customary for your Lordships to oppose an order approved by the other place. Therefore, I have not been placed in the position of having to decide whether we should support or whether we should oppose this order. But we must once again express the hope that another renewal order will not be presented in six months' time. We trust that before then, the Government will have announced quite clearly their attitude to the review report of Sir George Baker; that Parliament will have debated that review; and that we will know clearly what the Government's proposals are and what changes there should be.
Lord Donaldson of Kingsbridge: My Lords, curiously enough, the noble Lord opposite has sat on the Front Bench for a number of orders but this is the first time I have been here to put our side of the case to him. I want belatedly to wish him every success and to congratulate him on adding his name to that growing list of not wholly undistinguished Peers who have all served over there in their time. He is very welcome and I hope that he does not find the strains and stresses too great—I am sure he will not.
The noble Lord the Minister said that this order was of crucial importance. Of course it is. When the noble Lord on the Opposition Front Bench says that Parliament faces a difficult choice, I do not think that it is a difficult choice at all. I believe that anyone who did not agree at this particular moment to renew the emergency orders and the continuance of the Emergency Provisions Act needs his head examined. The very figures which the noble Lord has given makes that perfectly clear. It is fair to say that the figures were worse in my day—this was some 10 years ago—by about double. Even so, it is entirely intolerable that this should go on. As to the idea that one can do away with emergency orders, one could by all means possibly alter some of them. I agree with the noble Lord, Lord Underhill, when he says that we are looking forward to hearing what the Government have to say about the Baker report and to learning whether the Government think that modifications can be made which will do anything for the necessarily squeezed civil rights of people who live in conditions of regular violence.
I should like to add our appreciation of Sir George's work and our sorrow at his death. It is a very good report and I look forward to discussing it when the Government have considered it. I do not wish to rush them because the report is so important; and as it is obvious that most of the provisions must continue anyway, the Government could take a fairly long time to consider the report carefully.
The increase in the strength of the RUC is encouraging. I should like to ask the noble Lord the Minister whether this time—as is usually the case—that provision includes a decrease in the military support available. If he does not have the answer, perhaps he will write to me. In my day, whenever we increased the strength of the RUC we usually succeeded in reducing the Army support.
I was interested by the questions of the noble Lord, Lord Underhill, concerning discos and rambling, etc. which are of course extremely important. I can only tell him, at a slightly different level, that one cannot get off any golf course in Northern Ireland before 11 o'clock on a Saturday, and there is no obvious religious difference between the players. One finds Catholics playing golf and one finds Protestants playing golf without any particular trouble. I do not know whether the same is true of the larger groups of young people. They may congregate with their own people but I would have thought that they met one another. I have received no sign of the kind of fights which gangs do get into, and so it does not look as though that is very bad.
One question raised by the noble Lord, Lord Lyell, concerns what he rather politely described as "accomplices' information". I want to confirm the
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fact that however distasteful people who turn against their colleagues in crime and give information against them may be, no police force can work without them. No police force has ever tried. It is only new that that practice is being made a big thing of and that there have been a certain number of, as it were, multiple informers. Information of that kind is crucial to keeping the order and it is important that we should not let that area be whipped up into a campaign against the police and still more against the courts of justice.
Before sitting down, I should like to say that I have an engagement of crucial importance, which may mean that I shall not be able to stay for the last two orders. If I cannot do so, may I say now that I approve of both—and I am particularly pleased with the industrial training order. I am happy to support this measure.
7.29 p.m.
Viscount Massereene and Ferrard: My Lords, before my noble friend responds, may I say that the next six months is not the time to do away with or in any way to water down the emergency provisions? There are many other things to be done before we do that. For instance, I have a question for my noble friend, although I have not given him notice of it. Have the security forces made much progress lately in stemming the flow of arms into Northern Ireland, and have they found any more arms caches?
I should like to make another point regarding explosions. One can buy sodium chlorate from any agricultural merchant. I understand that one can buy other chemicals like that in Northern Ireland. It is easy for anybody to make a bomb with one of those materials. Are there regulations in Northern Ireland now so that certain chemicals, fertilisers and especially weedkillers cannot be bought, except on a permit? I can certainly make very nasty explosions with chemical and other materials that one can buy quite freely.
I shall not go on any longer. I should just like to support my noble friend very much and to wish him well in his task. I should also like to pay great tribute to the RUC. A lot of them are marked men. To join the RUC is a very brave thing to do. They deserve a great tribute.
7.32 p.m.
Lord Fitt: My Lords, in 1973 I represented the constituency of Belfast, West in another place. In that capacity I was a member of the Committee which discussed the implementation of the Act. The Committee stage lasted right through May and June 1973, and during that period I voiced many reservations about certain sections of the Act. I deliberately say, "certain sections", because no one realises more than I do that in the awful situation in Northern Ireland we must have legislation of some description to try to apprehend those engaged in the awful campaign of murder and maiming which has lasted for such a long time. It would be very foolish for anyone to say that an Act of this type is not necessary.
In opening the debate the Minister referred to the terrible tragedy of the murder of the two UDR people

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in Castlederg last week. My wife is from there and knows the families of those who were killed. She is able to describe, as only someone coming from a small village in Northern Ireland can describe, the atmosphere created when such murders take place, particularly—and I stress this—when it would appear that the landmine was detonated from across the border in the Irish Republic. That added element creates a great deal of fear, suspicion and hatred between the communities in Northern Ireland. That happened only last week. The Minister rightly referred to all the other killings that have taken place.
Throughout the original deliberations in Committee on the Bill I put forward what I considered to be constructive suggestions, which I believed would help in its implementation. I have an inherent distaste for emergency legislation of this type. I was born in Northern Ireland, and when I was born the notorious special powers legislation was already on the statute book. It was an Act of Parliament deliberately aimed at the Catholic minority community. All its clauses were deliberately aimed at keeping that community in subjection. I grew up in that atmosphere, where one felt a second-class citizen, hemmed in by that type of legislation, and I think that it is understandable that most people from the minority community in Northern Ireland have a distaste for such legislation.
That Act was abolished by the then Conservative Government and replaced by this Act. All those who took part in that debate—it was a Conservative Government and a Labour Opposition—said that they recognised the draconian aspects of the legislation and hoped that it would not stay on the statute book for a second longer than necessary. Indeed, that is part of the tragedy. Eleven years later we are still debating the effects of this legislation.
During the passage of that legislation I had reservations about the setting-up of the Diplock courts, where there would be only one judge to hear cases brought on scheduled offences. Before those courts were set up I instinctively knew that they would be open to a great deal of criticism because there would be only one judge. The honourable Member for Antrim, North, Mr. Paisley, who at that time had not long been a Member of Parliament, had the same reservations. He also felt that having only one judge would be open to criticism. He put down an amendment in Committee asking for two judges to be appointed. I had an amendment down asking for two assessors to accompany the judge, which would have taken away a great deal of the criticism. I was ever mindful of the fact that the special courts which they had in the Irish Republic were composed of three judges.
At that time a Labour Member, who is now my noble and learned friend Lord Elwyn-Jones, put forward an amendment which provided that the judge should be supported by two barristers who had at least 10 years' experience and other qualifications that he laid down. That amendment was carried. Mr. Paisley voted for it. That proves that right across the board there was a feeling that the provision of one judge sitting alone would be inadequate and open to criticism.
I have been in politics long enough to know that what people say in opposition they do not necessarily
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say when in government. That was in 1973. My noble and learned friend Lord Elwyn-Jones, in his then capacity, had put forward the proposition that the judge should be accompanied by two other persons. In a few months, from May and June 1973 to February of 1974, the Government changed and there was a Labour Government in power. I should have thought that he could then have influenced the Government to appoint two persons to help the judge in fulfilling the objectives he talked of when he moved the amendment in 1973. That did not happen. In 1974 the Labour Government did not take the opportunity to do what their spokesman had previously urged. The Labour Government was in power from 1974 to 1979, and there was a debate twice a year. As I say, what parties say in opposition they do not necessarily carry out when in government.
I think that this should be said. I refer first to the tragic death of Sir George Baker. I met him only briefly, but I have read his report. I certainly agree with those who say that a great deal of the man's humanity and compassion seems to have gone into the writing of that report. I hope that at the earliest possible moment both Houses have an opportunity to debate it, because at the moment we are debating the extension of this legislation in something of a vacuum.
I want to put on record something which I have just read in the debate which took place in another place on 5th July. Almost the concluding words of Mr. Nick Scott, the Minister replying to the debate—given at column 578 of Hansard—were:
"I hope that we shall soon be able to debate the Baker report in its entirety, but I do not decide the business of the House. As I understand it, had the Opposition wished to debate that report before the House rose for the summer recess, it could have been arranged. However, there was not that sort of pressure for the debate, which is why the House will debate it in the Autumn."
Therefore, I wonder whether the Opposition in another place really wanted a debate on the report of Sir George Baker. That is a question which should be answered, because I believe, as I have said, that we are debating this order in a vacuum. Many new recommendations have been put forward by the late Sir George and both Houses should have a debate on them at the earliest possible opportunity.
There are only three very small—they are not small; in fact, they are major—issues that I should like to bring to the attention of the Minister. The first is that there will be sustained criticism of Diplock courts unless and until there is an increase in the number of persons sitting in trial of scheduled offences. There are a number of cases that are now being heard before Diplock judges which have absolutely nothing at all to do with terrorism. People are being charged with nonscheduled offences before Diplock courts. The Diplock courts, set up as they were to deal with specific cases of terrorism, should not be asked to hear other cases which are completely out of that category.
It is a justifiable criticism that there are very long remands in Northern Ireland. When people are charged with serious schedule-type offences, they should be brought before the courts at the earliest opportunity. The Secretary of State said in another place that the average time spent on remand was 46 weeks. But 46 weeks is far too long, and that average does not tell the true story. People have been kept on remand for nearly two years before they have been

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charged. Where people are charged with such serious crimes the Government cannot afford to say that 46 weeks is not too long. It is far too long and, as I said, the average does not tell the whole story.
My next point arises from my knowledge of personal cases. I put forward such a case in 1973. Northern Ireland is a very small community. There is a tribal atmosphere—a majority tribe and a minority tribe. For example, if a young boy of 18 or 19 years of age is detained by the police on suspicion of having been involved in terrorist crimes he can be held for a week. Under this legislation it is three days, but an application can be made under the PTA to hold him for a week. If he is held for a week under emergency legislation, whether this legislation or the PTA, he is not able to go to his job for a week. Therefore, he is absent from his place of employment. If, on being released, he goes back to his place of employment and says that he was detained under emergency legislation at a detention centre but has now been released, knowing Northern Ireland as I do, I know that there is nothing which will erase from the mind of the employer the thought that there is no smoke without fire—particularly if the employer happens to be of the Protestant or Unionist tradition.
That young boy has been branded even though he has not been charged with any crime. His employer will think that the police were not able to get the evidence hut they would not have had him in a detention or interrogation centre for a week without cause. That young lad is left with a stigma. Within a very few weeks the employer will find an excuse —and excuses are not hard to come by in Northern Ireland—to dismiss that employee on the grounds that he could be a terrorist suspect. I said that in 1973, and in all the years that have elapsed since then I have come across perhaps a score of such cases—and I certainly do not need to exaggerate the number—of young men who were similarly caught up.
I believe there should be some means of compensation for those people for the week they were detained, even if they did not get the sack. Some means should be found to compensate those young men who have not been found guilty of any charge for the week they have been out of circulation.
That is one of the criticisms which I made then; the other criticisms related to the judges and the length of time on remand before trial. Those criticisms are as valid today as they were then. I urge the Government to look at those criticisms and to initiate as quickly as possible a full-scale debate on the recommendations of the late Sir George Baker. Only when we have done that will we be aware of what is the Government's real attitude to this legislation.
Lord Underhill: My Lords, the noble Lord referred to the debate on 5th July in the other place. I suggest he refers to Hansard, at column 567—I am not allowed to quote it—where the spokesman for the Opposition made it quite clear that the Opposition had repeatedly pressed for a debate and that the Leader of the House had said that there would be a debate but had never named the day.
Lord Fitt: My Lords, that is quite true. I think it is up to the Minister to reply to that.
Viscount Massereene and Ferrard: My Lords, may I say regarding employment that my family have always been Protestants in Northern Ireland—actually Unionists—but we did employ some Catholics. We also endowed the local Catholic Church in Antrim.
Lord Hylton: My Lords, we are debating this order at a time when Yorkshire and certain other Midland counties in England have been suffering from very severe public disorder. I am sure that all Members of your Lordships' House are concerned about these particular disorders and it is my very strong desire that every Member of your Lordships' House should also be concerned about the troubles and disorders of Northern Ireland. I say that if only because it is so essential that a democratic society should defend itself by democratic means.
The order we have under consideration is not one concerning the licensing of dogs or the better control of fish-frying. As the noble Lord speaking for the Government pointed out in introducing the order, it is very clear that this is a matter which concerns life and death. I therefore regret that it is being discussed in a thinly attended House at an unsocial time of day. I very much hope that it will gradually and eventually sink in, through the usual channels, that it is most desirable that the discussion of these orders should be promoted to what I might call prime parliamentary time.
There are at least six or seven strands of conflict which are going on all the time in Northern Ireland. One of these leads to attacks on the institutions and the personnel of government. I hope very much that the noble Lord, when he replies, will be able to point out, as Government spokesmen have pointed out on many previous occasions, that the maintenance of law and order and the prevention of terrorism are only a part of the Government's total response to the situation. There is a very great deal more involved than just this one aspect.
I should like to go on to explain why I consider that the subject matter of the order is of such importance. I do so because it seems clear by now that the whole sequence of events between the commission of a scheduled offence and the eventual release of a sentenced person has a very important bearing on community relations. It is, I think, a fact that the two sides of the community in Northern Ireland have rather different conceptions of justice. The majority has a tendency to look at it as merely the punishment of guilty persons. On the other hand, the minority tends to look at these matters in terms of fairness and equality between everyone. It is in this context that over the last five years or more there has been great interest in the whole subject of Bills of Rights and of the European Convention on Human Rights and the possibility of incorporating that convention into the law of the land.
My view is that these points which affect the rights of individuals are, of course, important but they are not the whole story. We are also concerned with the rights of minorities and of groups of people, as I attempted to point out in a letter in The Times on 13th July. We need, I suggest, the Protestant minority in the whole of Ireland and the Catholic minority in the North of Ireland to sit down, work out and make clear what they consider to be their vital interests.

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What are the things that need to be safeguarded in any situation in the future? It would be good if they could also consider at the same time whether these kinds of rights do not possibly entail corresponding duties. It would be good if we could be told what are the non-negotiable values of each minority and where they draw the border line between the values that they are not prepared to give up and those things they are interested in but are able and willing to discuss and bargain about.
Every speaker this evening has mentioned the major event of this year, which was the review conducted by the late Sir George Baker. I should like to join in the tributes that have been paid to him. All who are concerned about these matters, and particularly those who gave evidence to his review, will be grateful for the care that he showed and for the comprehensive nature of his recommendations. I was glad when I heard the noble Lord, Lord Lyell, say that there would be a debate and that the Government were in broad agreement with the recommendations. Can the noble Lord give any indication of when this debate might take place and what might be the Government's programme, timetable and intentions as regards the legislation that will be required to implement a number of Sir George's recommendations?
I should like briefly to welcome what Sir George had to say about reasonable grounds of suspicion for arrest, and, as the noble Lord, Lord Fitt, mentioned, the delays in bringing trials to court and the delays over inquests. I welcome also the recommendations about tape recording of police questioning and the descheduling or certifying out of certain offences, so that they can go forward for trial by jury. I should like to welcome what Sir George said about harmonising the Emergency Provisions Act and the Prevention of Terrorism Act and the need in Northern Ireland for something equivalent to the current British Police and Criminal Evidence Bill. I agree very much with Sir George's conclusion on young persons who are detained at the Secretary of State's discretion.
However, when we come to the matter of the future scrutiny of the two Acts, I would go so far as to dissent from the learned judge. He said, I think in paragraph 445, that Parliament is probably the best forum for scrutiny of the legislation. I would have thought that the very limited nature of the renewal debates that we have periodically, and the fact that it has been necessary to appoint two individual persons to review each of the Acts, show how unsatisfactory Parliament can be as a scrutinising body. I would much prefer the appointment of a small number of Privy Counsellors as a permanent review body for both these Acts as they affect Northern Ireland. If Privy Counsellors could be appointed in this way, they could receive classified information not available to ordinary people. They could listen to complaints from groups, rather than individuals, and they could consider issues that might be referred to them by Ministers.
If such a system had been operating in previous years, it might well have defused a number of well orchestrated campaigns that have been conducted on such divisive issues as detention, interrogation, the use of rubber and plastic bullets, prisoners' rights, shoot to kill, or the employment of super-grasses. These
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campaigns have, I think, had very wide, even worldwide ramifications. They have affected the thinking of many otherwise unprejudiced people.
I conclude with just three fairly brief questions. Can the Government say tonight that they will give the most serious thought to possible future convictions that may rely on the uncorroborated word of one person, whether this be the confession of an accused person, or the uncorroborated evidence of an accomplice? As to the use of firearms by the security forces, which is another thorny question, will the Government consider most seriously chapter 5 of the 1982–83 report of the Standing Advisory Commission on Human Rights? Finally, there is the important question of public and police liaison, touched upon by the noble Lord, Lord Underhill. Will the Government look at the committee system that has functioned on the whole extremely well over a long period of years in the city of Derry and see whether this could not be extended rather quickly to other police districts in Northern Ireland?
7.59 p.m.
Lord Lyell: My Lords, we are very grateful for the interest that has once again been shown in debating what are unique powers in the annals of our history, as pointed out by the noble Lord, Lord Fitt. Indeed, these are exceptional powers. No doubt, those of your Lordships who have been interested in these debates over the years will be accustomed to some of the answers that I shall give this evening. But I hope that I shall provide some spice and some variety in replying to some of the very interesting points that have been raised by your Lordships during the course of the debate. We are very grateful for the interest that has been shown by noble Lords who have spoken, as well as by those who merely have listened. I shall pass on to the usual channels the comments and the good wishes of the noble Lord, Lord Hylton, on the timing of these debates. I have no doubt that they will read his remarks in the Official Report.
The noble Lord, Lord Underhill, was the first to speak. We are very grateful for his support and for his kind words in relation to the late Sir George Baker. The noble Lord asked a number of questions. He, and I believe every one of your Lordships who spoke, asked about a possible debate on the recommendations, or the Government's views on the recommendations, in Sir George Baker's report. In the course of my opening remarks I stressed that the recommendations contained in Sir George Baker's report require continuous study and consultation. I am sure your Lordships will agree that some of these recommendations can be considered only in conjunction with the Police and Criminal Evidence Bill, and, indeed, can be considered only when it has reached the statute book.
Therefore, I could not give an undertaking—it would be wrong if I tried to do so tonight—as to when the Government will be able to give any response in detail to the report, let alone when any necessary legislation will be introduced. But I hope that before long there will be time to debate the report in your Lordships' House.
The noble Lord, Lord Underhill, asked one or two other questions. The first of these related to what he called cross-community work carried out by the Royal

1411
Ulster Constabulary. As he is aware, and as I have found in my short career so far in Northern Ireland, the Royal Ulster Constabulary spend much time—indeed, much of their own free time—and much effort in encouraging young members of the minority (the Catholic community) to take part in sports and all kinds of other leisure activities alongside children of the same ages, from the same areas, of the other religious persuasion—those from the majority community, the Protestant youngsters.
I am afraid that we do not have figures for this type of cross-community activity, but we are encouraged to think that the number of young Catholics involved is increasing steadily. I shall pass on to the Royal Ulster Constabulary the comments and the helpful encouragement of the noble Lord, Lord Underhill. I am sure they will be very grateful that their efforts, which of course are all part of their duties of policing and looking after the communities, are so much appreciated in your Lordships' House.
The noble Lord, Lord Donaldson, who was kind enough to pay me a brief tribute—I am very grateful for his remarks—had one query about the increase in the number of Royal Ulster Constabulary officers. I have to say to him and to your Lordships that the increase in the number of officers in the RUC will not be offset by a reduction in the number of troops. I would stress that over recent years there has been a steady decline in the number of troops. At present we are on a sort of plateau of just over 9,000 full-time troops. I stress to your Lordships that the situation is kept under constant review.
My noble friend Lord Massereene asked me two or three questions. In regard to the flow of arms, I am able to tell him that the security forces are working very closely with their counterparts on the movement of arms and explosives. I am pleased to be able to tell him that we are having increasing success. I have some statistics and figures which are quite encouraging as to the numbers; those are apart from the figures that I mentioned in my opening remarks. The statistics seem to show that we are having increasing success, above all in neutralising explosives and in discovering explosives; so that these types of crimes are cut out very much at source.
My noble friend asked about home-made bombs. My noble friend beside me was tempted to call these, "Massereene cocktails", but probably that would be libelling unreasonably my noble friend; perhaps his cocktails are better judged in the bars of your Lordships' House. The problem of the conversion of fertilisers into explosive materials—what we would call home-made explosives—is a major one. We are continuously examining this problem to see whether there can be any change in the composition of fertilisers on sale in Ireland to neutralise the harmful nitrogen element. I am not able to go into further detail on the chemical make-up of home-made explosives. Certainly I would not do so in your Lordships' House. I am not qualified to do it. Those of your Lordships who have heard me before have realised that in my time at school I was no chemist, and since then I have not progressed any further.
The noble Lord, Lord Fitt, raised the very sad case of the Castlederg murders. He will be aware, as will your Lordships, that that was not the only tragedy to
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strike at the families concerned, or, indeed, at that community. The noble Lord mentioned that his wife came from Castlederg, and those of your Lordhips who study the map will see that it is on the far side of Northern Ireland from Belfast. It goes to show that these terrible tragedies strike home all over the Province.
The noble Lord mentioned the deliberations in the 1973 debate about the possibility of providing judges with assessors. Your Lordships will be aware that Sir George Baker considered this, but for a variety of reasons he came down against the possiblity of assessors sitting with judges. I stress to the noble Lord and to your Lordships that this is a matter which we shall be considering in the context of Sir George's recommendations. We shall bear in mind what he has said, together with what was said by all the other fellow debaters of 10 (or was it 11?) years ago and by other honourable Members in other places.
The noble Lord asked about the interval between arrest and trial, particularly under the Emergency Powers Act. He will be aware, and your Lordships will be learning, that questioning under the Emergency Powers Act is limited to 72 hours. Of course, it can be increased to seven days under the quite separate Prevention of Terrorism Act. Whatever the period, there are no grounds for compensating young people who are reasonably held for questioning and possibly for charging. In these cases there is no question of improper behaviour on the part of the security forces. It would be very difficult—almost impracticable—to isolate this activity as one which might warrant compensation, and perhaps to disregard those who are prosecuted and subsequently acquitted after a period on remand. Your Lordship will be aware that in these cases the authorities are discharging their lawful duties.
The noble Lord, Lord Fitt, also asked me about the interval between arrest and trial. I take note of the long period which he mentioned, but I would stress to him that the period which he mentioned of approximately 46 or 47 weeks is not out of line with the period over the last five to six years. It varies and depends very much upon the level of terrorist activity and, above all, upon the number of cases which lead to arrests. I hope that the noble Lord will accept that we do take note of his comments, but I repeat that the figures are not out of line with what they have been in the past.
The noble Lord, Lord Hylton, who concluded the debate from the Floor of your Lordships' House—if I may put it that way—raised several very interesting questions. I shall try to answer the points which he raised—indeed, he was kind enough to give me notice of quite a few of them. The noble Lord mentioned the timing and I shall pass on his comments as regards that matter. He also brought up the question of a Bill of Rights. I do not have a very great deal of encouragement to give him this evening, but we do not have a closed mind on this particular issue. However, there are several important, practical and formidable constitutional difficulties in introducing a Bill of Rights—and as regards those difficulties, we only have to consult my noble and learned friend the Lord Chancellor. There is the question of whether there should be a Bill of Rights for Northern Ireland alone, or indeed, for the United Kingdom as a whole. The

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Government have yet to be convinced that, bearing in mind the extensive safeguards which have been introduced in recent years to protect human rights in Northern Ireland, a Bill of Rights is really necessary.
The noble Lord also mentioned various other problems one of which concerned reasonable suspicion, of which he was kind enough to give me prior notice. The noble Lord will be aware that this matter, like all the other recommendations, is under careful consideration. But I draw the noble Lord's attention to Recommendation 40 of Sir George Baker. This suggests that "reasonable suspicion" should replace "suspicion" in Section 14. We believe that there are difficulties in making a change of this nature, but we shall continue to consider what the noble Lord has said and we shall try to deal with this particular point.
The noble Lord also raised the question of firearms and mentioned Chapter 5 of the Report of the Standing Advisory Commission on Human Rights. The noble Lord will be aware that the commission has recommended that the law should be changed to make it absolutely clear what conditions must be satisfied before a firearm is used. Of course, it would be very difficult to cover all situations where the use of a firearm would be justified. One would end up with a very long list, or alternatively we would omit certain situations and that might make it an offence to open fire when such action would, in all the circumstances, be reasonable.
I would stress to your Lordships that the present test applies to all civilians, police officers and, indeed, soldiers throughout the United Kingdom. We believe that it is an important test and it is this. A person may use such force as is reasonable in the circumstances in the prevention of crime or in effecting or in assisting in the lawful arrest of offenders or suspected offenders or, indeed, of persons unlawfully at large. The noble Lord will be aware that every case differs and it is for the courts of law to assess the the reasonableness of the action in the light of each individual's personal circumstances. I am sure that the noble Lord would accept that Parliament had the interests of all parties in mind when it decided that this was the most appropriate arrangement.
The noble Lord also asked about police liaison committees. The Royal Ulster Constabulary is very much aware of the need to carry out its duties with sensitivity and it puts a great deal of time and effort into its corn munity relations projects—projects similar to those which the noble Lord, Lord Underhill, mentioned. These are always carried out at local level and a number of police liaison and local security committees are in existence in Northern Ireland to which local representations can be made. I think that the noble Lord also raised a question in connection with corroboration. I do not think that I shall be able to answer the noble Lord this evening and so, if he will forgive me, I shall write to him on that particular matter.
I hope that I have covered all the points that have been raised by your Lordships in this piece of continuing legislation. Of course, it is not entirely desirable that we should have emergency provisions year after year. But those of your Lordships who have
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listened to my opening statement will be aware of the dreadful statistics of violence. We do not live in a perfect world, but we do believe that the order that we have before us this evening is in all the circumstances necessary, and, therefore, in the light of that, I beg to move.
On Question, Motion agreed to.

Industrial Training (Northern Ireland) Order 1984
8.17 p.m.
Lord Lyell: My Lords, I beg to move that the Industrial Training (Northern Ireland) Order 1984, which was laid before your Lordships in draft on 24th May this year, be approved.
The purpose of this draft order is to provide an updated and comprehensive basis of legislation for industrial training in Northern Ireland. It will consolidate existing legislation dealing with industrial training boards in Northern Ireland and harmonise some of the powers of the boards in the Province more closely with those in Great Britain. The principal purpose of the draft order is, however, to establish a new body, to be known as the Northern Ireland Training Authority, in place of the existing Northern Ireland Training Executive.
The existing legislative framework for industrial training in Northern Ireland is mainly embodied in the Industrial Training Act (Northern Ireland) 1964. A feature of that Act was the creation of the Northern Ireland Training Executive to provide common administrative and secretarial services to industrial training boards. By agreement, the executive has also developed certain cross-sector training facilities for the boards. Following a review of industrial training arrangements in Northern Ireland in 1982, which paralleled a similar review in Great Britain, and in view of the encouraging support for the proposals, the Government decided that eight of Northern Ireland's nine training boards would remain and that it would be the policy to encourage on an ongoing basis voluntary training arrangements in sectors of industry both within and without the scope of the boards.
In addition, following a decision taken earlier in Great Britain, the financing of board operating costs out of Exchequer funds ceased at the end of September 1982 and the responsibility for such financing was returned to the employers. Finally, it was concluded that the proven role of the Northern Ireland Training Executive should be redefined and extended and, in recognition of this enhanced role, it would be called the Northern Ireland Training Authority.
It is the Government's intention, in setting out the functions for the proposed authority, to create a dynamic body to develop and provide advice on training in Northern Ireland. The authority will continue the executive's functions of providing central administrative and financial services for all boards and cross-sector training services. Beyond this it will have, broadly speaking, four additional functions. First, will be an obligation to keep under review all training needs, in the statutory and non-statutory sectors and to report to the Department of Economic

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Development, as well as to the sectors concerned, on its findings. The second function will be that of encouraging both cross-sector training and voluntary training arrangements in sectors of industry not within scope of a board. The authority will have the power to provide training generally, including the provisions of courses and other facilities and the payment of grants, fees and allowances. The third function relates to the field of new techniques of training and training in new technology. The authority will have responsibility for the development and promotion of and the provision of advice to the boards and others on such training. The fourth function will be to develop and maintain links with public sector training and to co-operate in the provisions of relevant training when it is requested.
The membership of the authority will reflect its enhanced role and the close relationship with the industrial training boards. It will consist of a chairman, the chairmen of the industrial training hoards as ex-officio members representing their boards, three representatives of employers, three representatives of employees, three persons with expertise in training or education, and one representative of the public sector.
There will be three sources of funding for the proposed authority. First, boards will pay for common services on a pro rata basis. Secondly, some income will be derived from the sale of services to non-statutory and public sectors. Thirdly, Government will contribute towards the costs of carrying out functions which would have a wider purpose than meeting the direct training needs of those sectors, whether statutory or voluntary, using the services of the authority, for example, monitoring training in the private sector generally, encouraging appropriate cooperation with public sector training, and encouraging key training activities in the interests of longer term development. Initially pump-priming funds will also be available to help the authority become established. The actual provisions for the Northern Ireland Training Authority are included in Articles 3 to 13 and Schedule 1.
I wish to turn briefly to the provisions relating to levies and levy remission. It should be noted that while the provisions with regard to boards, with which I shall deal later, are or, as a result of this order, will be broadly similar in Northern Ireland and Great Britain, the proposals for levies differ from the Great Britain system, which is that of exemption from paying levy through the issuing of exemption certificates. The draft order proposes to write into legislation the present administrative system of remission of levy which has been operating successfully in Northern Ireland. Individual employers who undertake training of the required standard set by an industrial training board may normally obtain permission of all or part of the remissible part of the levy depending on the range and quality of training carried out. This system is favoured by the Northern Ireland boards as it encourages regular contact between the firms and the boards on training matters, which in turn helps to ensure the quality and quantity of training being carried out. The levy remission system is particularly suited to the Province where the smaller scale of industry, along with geographical proximity, facilitates close working relationships between the boards and firms. The
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provisions for levies and levy remission are set out in Articles 23 to 26.
While the main purposes of the draft order are to set up the new training authority and to revise the provisions for levies for the industrial training boards, the opportunity is also being taken to consolidate existing legislation, with certain amendments, in order to harmonise some of the powers of the boards in Northern Ireland more closely with those in Great Britain. The remainder of the draft order is, therefore, in the main a re-enactment of the Industrial Training Act (Northern Ireland) 1964 with certain amendments.
In conclusion, I consider this to be a most important order for Northern Ireland. Not only does it bring certain aspects of industrial training arrangements into line with those already existing in Great Britain, but also it creates a new training authority which will draw together representatives from both sides of industry and from the educational sector to give a firm and dynamic lead on industrial training matters in the Province. It is a particularly important aspect of industrial policy that the workforce should be effectively trained to help it grasp the opportunities which are continually being presented by new technologies. I beg to move.
Moved, That the draft order laid before the House on 24th May be approved.—(Lord Lyell.)
8.25 p.m.
Lord Underhill: My Lords, I am grateful to the noble Lord the Minister for explaining this order. As my noble friend Lord Prys-Davies said last night when speaking to the education order, once again we have an order of 34 pages, 35 articles and four schedules—in effect, a parliamentary Bill—which is unamendable and which we have no alternative but to approve. Naturally, we wish to see the best possible schemes of training and retraining, and we must always keep in mind that after training there must be jobs. At the present moment unemployment in Northern Ireland is running at the rate of 21·6 per cent. Is there any indication that the new authority will be, to use the words of the Minister when the order was introduced in the other place, "a dynamic body" or is it to be mainly advisory, with power resting with the advice it gives to the department?
It is clear that it is a considered view of the Government that training should be left to voluntary action by industry. This is made clear in the consultative document, Training for the Future, which was issued in June 1952. It is also made clear that it is the Government's view that operating costs should be borne by industry, whether the eventual arrangements for training are voluntary or statutory. That is an assumption that emkployers alone know best what is required. It overlooks the fact that statutory training boards came into being because many employers made little or no provision for training. In fact, the Northern Ireland Committee of the Irish Congress of Trade Unions made that quite clear in its written evidence to the Northern Ireland Assembly, which considered the draft order, when it said that the ITB structure exists because of the shortcomings of employers in providing training directly.

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The committee sets out various reasons why many employers did not introduce training schemes, and hence the industrial training board scheme was introduced. Training is not a matter solely for determination by employers. Employees are involved and so are consumers—they have interests. The document to which I have referred points out that, contrary to the general desire of the Government, all but one of the present industrial training boards want to maintain their statutory position. This was also made clear in the ITB's annual reports. Neverthless, I am pleased that the Government have recognised these views and have decided that all but one of the boards shall continue. The order also contains provision for the establishment of other ITBs.
Generally, the existing boards are of the opinion that the Government should continue to meet the costs. Regrettably, the Government decided to pass these costs, which they took over in 1975, back to industry and this is included in the order. Although the order is unamendable, and although we are getting near a late hour with other business with which to deal, there is no point in discussing the order unless certain defects or criticisms can be ventilated.
I see that the membership of the authority, as set out in Schedule 1, is to include one representative of the public sector. But whereas there is consultation in connection with all the other categories, there is no provision whatever that the department shall consult with anyone regarding the person who should represent the public sector or whether one representative of the public sector is sufficient in the light of the fact that something like 46 per cent. of the working population of Northern Ireland is covered by the public sector. Incidentally, I was interested to note paragraph 5.3 in this particular document, which stresses that already a considerable amount of training provision is undertaken within the public sector.
Written evidence to the Northern Ireland Assembly was presented by the present training executive and they referred to the power in the order to be given to the department to invite other Government departments each to appoint one person to attend meetings of the authority and its committees. The present training executive has expressed the view that this power to be given to departments should not be exercised, at least without prior consultation with the authority, and preferably only at the request of the authority. That view of the present training executive appears to be a reasonable one. Membership and other matters regarding the industrial training boards are set out in Schedule 2. One sees that the chairman of each board is to be appointed by the department. Is there any case of any one of the existing boards ever having had other than an employer chairman? When that question was asked of the department officials when they met the committee of the Northern Ireland Assembly they replied that it was traditional for the chairman to be an employer.
Paragraph (2)(c) provides that,
"one or more persons … shall be apointed after consultation with the Department of Education".
Surely it would have been preferable for the number to have been defined? "One or more" is far too open.
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There is also provision in Schedule 1 that persons to be appointed to the authority shall he appointed after consultation with the Department of Education. But there is a qualification that such persons shall have "expertise in training or education". Yet I note that that qualification is not inserted with regard to the person to be appointed to the industrial training boards after consultation with the DoE. Is that an oversight, or is there some reason for it?
I have referred to the report of the Assembly in its consideration of the order. I am pleased to note that that consideration was given. I know that the noble Lord the Minister is not responsible, but it is unfortunate that only written evidence was requested of the CBI and of the Northern Ireland Trade Union Committee. It appears that the only oral evidence given to the Assembly committee was that of officials of the department, and naturally, as to be expected, they reflected the Government's views as set out in the draft order.
I note that the CBI in general supported the draft order, but the Northern Ireland Trade Union Committee were critical of a number of aspects. First, they expressed scepticism of the Government's belief that voluntary arrangements could replace the existing statutory machinery. They were concerned about the change from the present balance on the training executive to a pro-employer balance on the new training authority. I note that questions were asked of the department officials when they went before the Assembly committee, particularly by the deputy chairman. It was pointed out that, if all the chairmen of the boards were employers, only three of the 19 members of the training authority might be employee members.
The Northern Ireland Trade Union Committee are also highly critical of the proposal that industry should take over the costs. They are critical, too, in regard to the point that the non-remissible part of the levy is to be kept to a ceiling of 0·2 per cent. of the payroll. On this latter point, although an ITB may submit to the department proposals for the levy to meet costs, approval rests with the department. It is clear by Article 23 that at the end of the day it would be the department which had the last word on the order for the particular levy for a board.
Articles 25 and 26 relate to the remission of the levy where the department is satisfied that an employer is making arrangements for direct training of its own employees. The employees would appear to have no opportunity to express their views to the department. There would seem to be no provision for the new training authority to be consulted. Surely if the new training authority is to have any influence, it should have a view, and be able to express it, on an employer's proposals for training. It should be able to express a view to the department as to whether that training is satisfactory, and yet there is no provision in the order for this to be done.
Article 14 lists various bodies which the department must consult before making an order for the establishment of a new industrial training board. If the training authority is to be given any teeth at all, why is it not to be consulted? That particular point was criticised by the Assembly committee. It may be argued that one of the articles provides that the department may consult

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other bodies as it thinks fit, but surely that is not good enough. If the training authority is to be given any real power, any real exercise of authority, surely it ought to be consulted regarding the making of an order for the establishment of any other industrial training board.
I am surprised, in consulting Schedule 2, to find in paragraph 8 that the employee representatives on an industrial training board are to be excluded from voting on any aspect relating to the levy. The decision on such matters is to be left solely with the majority vote of the employer representatives. The trade union committee strongly complained about this, and I am doing so at the present moment.
Article 29 lays down that the employers in an enterprise zone are not only to be exempted from payment of the levy, but will not be obliged to provide information as may be required by either the authority or any industrial training board. The Northern Ireland Trade Union Committee disagreed with both these exemptions. Although the CBI support the exemption of the employers from payment of the levy, they also thought that firms in the enterprise zone should not be exempted from supplying the required information. Unfortunately on both these matters the Assembly report is somewhat weak. They merely express hopes that the training will be carried through by the employers in enterprise zones.
Those are just some of the points which I raise on this order, which I recognise is unamendable. The situation again shows the difficulties in which your Lordships and Parliament are placed by having the present administrative machinery run by way of orders. That is all we can have at the moment until the situation changes. The Minister may be able to reply to my points, but at the end of the day the order has either to be accepted or not accepted, and obviously we only approve orders which are passed by the other place.
8.37 p.m.
Lord Fitt: My Lords, I rise for only a few seconds to congratulate my noble friend Lord Underhill on his detailed and constructive criticism of this order. I do not myself have the research facilities which I formerly had in another capacity. Therefore I was not aware in any great detail of what was contained in this order, but having listened to my noble friend, I believe that he has asked a number of valid questions.
In relation to the Assembly discussion of the order, it is a matter for real regret that one of the major political parties in Northern Ireland, the SDLP, is not represented in that Assembly. I am certain, from my knowledge of that party, that there are a few of its members who have a working-class background and a knowledge of trade unionism. They could have given of their services to the Assembly and made it more aware of this type of legislation.
Having said that, I would be churlish if I were to disregard the order, or treat it with disdain, I think perhaps the motivation for it was well-intentioned, but Conservative Governments are not particularly widely known throughout the world for their innate interest in industrial matters. It may be that they want to project this order, but I can understand that they may not be aware of the whole of the working-class apparatus in
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Northern Ireland. I know—and it was referred to by my noble friend—that the Northern Ireland trade union movement is one of the most responsible sections of the trade union movement to be found anywhere in the world, and certainly in these islands. I should think that any criticisms that were made by that body should be taken into account by the Government.
This brief discussion that we are having on the order makes us aware, even after the discussion we had on the emergency powers, that life still goes on in Northern Ireland, and we are still trying to create a society in which there will have to be some hope and some future for the thousands of our young people who are unemployed. If the order, as at present constituted, makes some provision for training for these young people who are so desperately in need of it, then certainly it must be welcomed.
Lord Lyell: My Lords, once again we are grateful to those of your Lordships who have stayed on and who have contributed to the debate on this very interesting order. I stress to the noble Lord, Lord Fitt, that we believe that this is a very important aspect of life for young people in Northern Ireland. As he will know, and your Lordships will accept, in Northern Ireland there is a great pride in education, learning and in what we used to call trades, which have now expanded into what I was explaining: information technology, business studies and finance, which are essential to all aspects of business. We were grateful for the detailed scrutiny which the noble Lord, Lord Underhill, gave to this order and the studies of the new authority taking the place of the executive.
I shall try to reply to the points raised by the noble Lord, Lord Underhill. I shall attempt to reply to them all. If I fail I guarantee that we shall use information technology—our own eyes and our own talents—to comb what has been said tonight. We shall hope to pick up any points which I might miss.
We see the new body as being dynamic and more than purely advisory, because we believe that the functions put forward in the order for the authority, particularly the new functions, will provide the basis for that leadership and industrial training for the statutory and, above all, the non-statutory sectors which Northern Ireland will need if it is to meet the challenge of the future above all in this aspect as in the future technologies of five and 10 years ahead. Your Lordships will have noticed that the provisions in the order emphasise the importance of industry providing adequate training. That is a point which we stress.
Whether this training is achieved under voluntary or statutory arrangements and the recognition of the transferability of the many skills between the varying sections, the order emphasises the importance of the new techniques of training, especially the training in what I have to say about the new technology. The membership of the authority, including the chairmen of the industrial training boards, will ensure that all the main sectors of the Northern Ireland economy are represented. With this in mind it will ensure that the authority has full powers to provide relevant training and leadership.
The noble Lord, Lord Underhill, raised the question of the chairmen of boards normally being employers.

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There is one chairman of one board who is a retired trade unionist. Another is a retired gentleman from the education sector. We value their contributions and the variety that they bring to their chairmanship of these boards. The board chairmen were not members of the training executive, but an important feature of this new authority that we have introduced this evening is that the chairmen of all the boards will be ex officio members. This will ensure that the views of individual hoards, which will include representatives from both sides of industry, will be repesented on the authority. I stress to the noble Lord that the chairmen will be appointed to the authority to represent their boards and not any other organisation or interest with which they may be connected.
In the past board chairmen have tended to be employers, but trade unionists and educationists, as I have pointed out, may be appointed as chairmen. Your Lordships will have appreciated that the authority will comprise three representatives from the employers, the employees and the education and training interests, together with one representative from the public sector. Your Lordships will see that the new authority will have up to 19 members. To increase this size further by additional representatives would, in our view, make it more than a bit unwieldy.
The noble Lord, Lord Underhill, asked about voluntary training arrangements and hoped that the order might give the authority a duty to promote arrangements in the statutory sector. My right honourable friend in another place said in September 1982, when he announced his decision on the review of industrial training in Northern Ireland, that all the boards, except the Manmade Fibres Producers' Industrial Training Board and the footwear sector of the Clothing and Footwear ITB, would be retained. But he made it clear that he remained anxious to encourage voluntary arrangements wherever possible. We stress that. I am sure that the noble Lord, Lord Underhill, would accept it. So far as possible, we need voluntary arrangements and we are continuing to look sympathetically at all the proposals for voluntary action from many of these sectors. There will have to he basic criteria against which the proposals can be judged.
I hope that I have covered the question of trade union representation. The noble Lord also raised the question of the levy order being made against the wishes of those organisations who have been consulted. Any of these circumstances may be an exception, but if we could take one example: if a board wished to carry out training in a specific area—let us suggest new technology—this would not be supported by the majority of the industry because of the cost. We would then find the department might consider that a breach of this 0.2 per cent. ceiling of the non-remissible levy or the 1 per cent. ceiling for total levy would be justified. But I stress to the noble Lord, Lord Underhill, who asked this question about the 0.2, that it is a ceiling. In the vast majority of these cases the remissible levy will be certainly under that.
The noble Lord will be aware that there is a document called The Outlook on Training, which was published as far back as July 1980—four years ago. This considered the workings of the Employment and Training Act 1973. This estimated that for most of the
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boards in Great Britain operating costs amounted to 0.2 per cent. of the annual pay roll of firms within the scope of that particular board. After due consideration we thought that this was a feasible target by the Northern Ireland boards to cover certain costs including the operating costs. I am told that most of the boards are now within the 0.2 per cent. ceiling.
The noble Lord, Lord Underhill, also raised a question about no consultation under Article 14 with the new boards. Under Article 14 the department may consult anybody that it considers fit. It is the intention that the authority would be one of the bodies and it would be involved at an early stage.
The last point made by the noble Lord, Lord Underhill, that I can reply to this evening deals with the representatives of the public sector. A senior representative from the department of finance and personnel has been appointed. I understand that his appointment has been welcomed and we are looking forward to his contribution on the board.
I thank the noble Lord, Lord Fitt, for his contribution. I stress to him that we regard this project of industrial training as being of extreme importance to Northern Ireland, and above all to the youth. I hope that he will believe that this Government are not hardhearted on this aspect. We have training, above all, training for the future, very much at heart. I hope that I have covered most of the points that were raised by the noble Lord, Lord Underhill. I have already promised that I will comb for anything that I missed.
On Question, Motion agreed to.

Financial Provisions (Northern Ireland) Order 1984
8.51 p.m.
Lord Lyell Lord Lyell rose to move, That the draft order laid before the House on 29th June be approved.
The noble Lord said: My Lords, this is a further order in a series which has been enacted at intervals of one or two years to deal with miscellaneous matters of a financial nature, the previous one in the series being the Financial Provisions (Northern Ireland) Order 1983. The main purpose of these orders is to increase as necessary, statutory limits imposed by Northern Ireland legislation on certain financial transactions and to deal with other matters with a financial content. The orders do not deal wih appropriation of cash for public services.
I shall now deal briefly with the content of each of the main articles. Article 3 deals with issues which may be made from the Northern Ireland Consolidated Fund in respect of expenditure by the Northern Ireland Housing Executive. The issues have a statutory limit placed upon them which presently stands at £1.3 billion—and I am using the American style, representing £1,300 million; and it is anticipated that this limit will be reached by August 1985. It is estimated that the proposed new limit of £1.6 billion will accommodate expenditure in this field until early 1987.
Article 4 deals with another statutory limit and proposes an increase from £25 million to £30 million in the aggregate amount of loans and grants which may be made to harbour authorities by the

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Departments of Economic Development and Agriculture for harbour works. The present limit is likely to be exhausted by spring 1986 and we feel that it is prudent to seek a revision now as the next Financial Provisions Order may not be proposed until mid-1986.
Article 5 deals with the NI health and social services hoards, which make loans to general medical practitioners to assist in the provision, improvement and equipment of premises in which they conduct their practices. The Department of Finance and Personnel guarantees the repayment of principal and payment of interest on these loans. The present statutory limit on the aggregate amount of principal which may be guaranteed by the Department of Finance and Personnel in this field is £1.2 million. As a result of a sustained high rate of applications in recent years, it is anticipated that this limit could be reached in the current financial year of 1984–85. The proposed revised limit of £2.5 million should accommodate expenditure until late 1986.
Finally, Article 6 makes provision for the Department of Finance and Personnel to offer loans at variable rates of interest to local authorities. It is envisaged that such rates of interest would be reviewed at three-monthly intervals. At present, loans can be made only at a fixed rate of interest. This proposal will bring Northern Ireland into line with practice in Great Britain. For the third time this evening, I commend an order to the House.
Moved, That the draft order laid before the House on 29th June be approved.—(Lord Lyell.)
Lord Underhill: My Lords, the noble Lord the Minister and other noble Lords will be delighted to know that I will not use this opportunity to discuss in detail the proposal of the three services to which three of the articles relates. The proposal for the increase is seen as common sense and acceptable and we are particularly pleased to see that the variable rates of interest are to be brought into line with the position in the United Kingdom as regards the local authorities. Therefore, this order is one to which we shall give our support.
Lord Lyell: My Lords, I am grateful to the noble Lord, Lord Underhill. I, too, have some interesting views on the variable rate. I understood that neither the department nor the local authorities seemed to win too often one against the other. It depended upon the rise and fall of interest rates. Doubtless, the noble Lord and I will be able to study closely the Financial Times and the marvellous LIBOR (the London Inter Bank Offer Rate), which is the base for the variable rates. We are very grateful for the noble Lord's interest and for the interest shown generally by noble Lords.
On Question, Motion agreed to.

Housing Defects Bill
8.56 p.m.
Lord Skelmersdale: My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.
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Moved, That the House do now resolve itself into Committee.—(Lord Skelmersdale.)
On Question, Motion agreed to.
House in Committee accordingly.
[The EARL CATHCART in the Chair.]
Clause 1 [Designation of defective dwellings]:
Lord Stallard Lord Stallard moved Amendment No. 1:
Page I, line 15, leave out from ("which") to ("is") in line 16 and insert ("is a building in a class designated under this section and where defects attributable to "the qualifying defect" have become evident and are substantial").
The noble Lord said: I beg to move, on behalf of my noble friend, the amendment standing in our name on the Marshalled List. It seems to us that the clause as it stands is far from clear. If anything, it would mean in our view exactly the opposite to what it ought to mean. The present clause—and it is worth reading it—says,
"Any dwelling which a building in a class designated under this section consists of or includes is referred to in this Act as a 'defective dwelling'; and in this Act in relation to such a dwelling"—
and so it goes on. That would appear, in our view, to mean that any building in a class designated under this section would qualify. Our amendment would make it clear that local authorities are expected to give assistance where the dwelling is actually defective and not simply because it is in a class designated as defective. It is quite a different interpretation. We feel that if this amendment is not made, local authorities will be inundated with applications even though no defect has yet emerged and there is no need yet for assistance.
Under the Bill as it stands resources would be directed to dwellings where little or nothing is wrong with them at the expense of other priorities. In our view, the amendment is consistent with Government's thinking. Ministers in another place and here have said that defects may not emerge for as long as 10, 20 or even 30 years and they have said that local authorities will be able to spread the financial burden over a number of years. This being the case, no assistance should be given until it is necessary to give it.
If the Ministers remain concerned about those owners who wish to move—and that may be in the Minister's reply—but where the class of dwellings is unmortgageable, then we should be invited to make a further amendment which makes it clear that the assistance is for reasons of mobility and not because of the defects. I hope that the Minister will consider that point. If the Government consider that to be the case then a further amendment should be forthcoming from the Minister himself to say that these provisions are being made for reasons of mobility, because then repurchase could be undertaken by the local authorities with full compensation if that were the case.
It seems to us perfectly reasonable to move an amendment couched in the terms that we propose to clarify the situation, as I said at the beginning, because it seems that otherwise local authorities will be in real trouble far earlier than necessary. I beg to move.
Lord Skelmersdale: No, my Lords. I am afraid that I must tell the noble Lord, Lord Stallard, that this amendment is not consistent with Government

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thinking on this Bill. Indeed, the amendment undermines the fundamental purpose of the Bill. It is true that the prefabricated reinforced concrete dwellings with which we are concerned in this Bill may well not show visible or evident signs of structural defects for perhaps 20 years or more and that the dwellings will continue to provide good housing during the intervening period. In terms of structural stability and safety there is no immediate problem. But the amendment closes its eyes to the cardinal point that there is nevertheless an immediate problem for owners of these dwellings.
The findings of the Building Research Establishment indicate that the houses which use prefabricated reinforced concrete load-bearing components—which we have said we intend to designate under the Bill—are all subject to deterioration which will inevitably lead to serious structural damage well within the period of further life which the building societies require if they are to lend on mortgage. The effect is not overnight to render the dwellings unsafe, but to reduce overnight substantially their value. This is the problem which faces the owner and which the Bill is designed to deal with.
It matters not that the damage has not yet appeared; the owners of these dwelling will have bought them in good faith from the public sector on the basis of a defect-free value. Often they will have sunk all their resources into the venture, and indeed will have committed themselves for the next 20 years or so in terms of mortgage repayments and so on. They now find their homes are worth substantially less than they paid for them because of the discovery of those defects in their design and construction. The houses are unmortgageable, certainly at anything like their defect-free value. For people who are required to sell their homes, perhaps to move to another area for employment reasons, it is nothing short of disastrous; they either cannot sell their homes or only at a defective value, incurring a considerable loss on the price they originally paid and—I say it again—through no fault of their own.
In this Bill the Government, on behalf of the public sector which originally sold the dwellings, are recognising their responsibility towards these people who purchased in good faith. The Bill provides that the basic criteria should be that the dwelling is defective by reason of its design or construction in that its value has been substantially reduced, as a result of the defects becoming generally known. Having said that, I must say that this is my first reaction to the noble Lord's amendment, and I shall most certainly want to read carefully what he has said in moving it.
Lord Stallard: I am very grateful to the Minister for his last statement. Until then I thought I had opened the Committee proceedings on a reasonable note by saying that I thought I understood the Government's thinking. I obviously did not. I had hoped I understood any reasonable Government's thinking. If they were saying the defects would not appear for 10, 20 or 30 years, why then erect a panic situation where people will be demanding their compensation long in advance, perhaps, of its being necessary? Would it not have been far more sensible had the Government been thinking, as I anticipated or accused them of
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thinking—God help me!—that it may have been easier to allow local authorities and tenants to plan this matter on a phased basis, or some other basis, but certainly not to rush in on a panic basis and create what could well be a chaotic situation so far as local government finance is concerned?
I shall have to read carefully what the Minister said; he read it fairly fast, and I am not criticising him for that, but I got the impression that there were a number of contradictions in his reply in relation to the clause and amendments. I would certainly want to read his reply and I reserve my position for the next stages of the Bill. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Stallard Lord Stallard moved Amendment No. 2:
Page 2, line 38, at end insert—
("() No designation or variation or revocation of a designation shall take place under this section unless there has been full and proper consultation with the local authority Associations and such other persons and bodies as the Secretary of State thinks fit.").
The noble Lord said: This amendment seeks to insist on or enforce some consultation with the local authority associations and such other persons and bodies as the Secretary of State thinks fit before any designation or variation or revocation of a designation takes place. Again, it would seem to us a very sensible thing to do, because at least 90 per cent. of the defective dwellings are in local authority ownership, and in some cases many more. Only 10 per cent. of these dwellings have been sold, and therefore it is the local authorities who are most aware of the extent of the defects and the necessary remedial works.
With regard to the prefabricated reinforced concrete dwellings which the Secretary of State has announced he is designating under this Bill, there has been no formal consultation with local authority associations, nor, therefore, with the local authorities themselves. We have not been given the opportunity either inside or outside this House to say whether the dwellings should be so designated. The Building Research Establishment has conducted a random sample of these dwellings, but this is small in relation to the total number and takes little account of the relative priority of these dwellings compared with other types in local authority ownership.
Local authorities are, of course, extremely worried about future designations; of course, there is no certainty that the Building Research Establishment will undertake any sort of survey on any new types. Whether or not this work is done by the BRE, we feel on this side of the Committee that it is essential that local authorities are consulted and allow the opportunity to give details of the extent of the defects of the dwellings in their ownership and of those that they have recently transferred.
Surely, to make a designation without consultation is not only unreasonable, it is almost verging on the irresponsible, because the Association of Municipal Authorities, in reports both in 1983 and in 1984 which noble Lords will have read, examined this situation and came to the conclusion that a more thoroughgoing and comprehensive study is now needed.
Having listed a whole number of faults and defects that local authorities had found in existing structures, I felt that this was a case needing urgent consultation. The local authority experience, the experience of thousands and thousands of tenants, the consultations that have taken place with those tenants and residents and their organisations and with the voluntary organisations, Shelter and other people who have been involved in this, must be tapped. There must, in our view, be consultation if we are to get the best solution possible for everybody concerned. Therefore, before any further dwellings are designated, we think it is a perfectly reasonable thing to have this kind of consultation. I beg to move.
Lord Graham of Edmonton: In order to be helpful to the Minister, who I know wants to be helpful to the Committee and to those who are concerned, may I make an additional comment to augment those made by my noble friend Lord Stallard? What we are worried about in this clause, and also in these amendments, is, quite frankly, the dilemma which faces not only the Government but particularly local authorities. We made the general case at Second Reading that the designation places an unfair burden on local authorities. We shall have arguments and perhaps more news about that later. The dilemma for local authorities, quite frankly, is this. While they are not looking for trouble, when people are in trouble—like the Minister on this particular point—they are anxious to try to meet the case.
Perhaps I may remind the Minister of the case that I raised on Second reading in respect of my honourable friend Mr. Terry Davis, the Member for Hodge Hill. This was about the Smith houses, and the fair point that was made by the Minister. Not only were they not designated, but, in order to merit, one also has to be satisfied that there was not only a local circumstance but a national circumstance, or certainly more than a local circumstance. I want to say that, in the diligent way in which my honourable friend Mr. Terry Davis goes about his work, he draws my attention to a Question for Written Answer that was put down in the other place on 5th July by a political friend of the Minister, Sir Reginald Eyre. He asked the Minister to list the constituencies in which Smith houses have been reported to have defects. The constituencies that were listed then were: Birmingham, Hall Green, Hodge Hill, Northfield and Yardley, Ashfield, Amber Valley, Leicester East and Cardiff West. That is a fair geographical spread: it covers Birmingham, the Midlands, and down to Cardiff. My honourable friend Mr. Terry Davis also mentions the constituency of Aldridge-Brownhills, if that is the right designation. The point I want to make is that there is a dilemma and a maximum need for consultation in that particular way.
In addition, I should like to ask the Minister to take on board the question for consultation, because I have a letter here, written by the Deputy City Housing Officer of the City of Birmingham, referring to the problems facing an authority in this matter. The letter was written to my noble friend Lady Fisher, who had intended to be present, but unfortunately has suffered a broken ankle—she is out on a limb, not for the first
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time—otherwise she would have been taking part in the debate. However, she has sent on her letter, and this is what Mr. Clive Pickering wrote to her:
"In many ways, what is more alarming, is that many other properties, not classified so far by the Secretary of State, are in the same, if not worse, condition than those which have been recognised. For example, the Bill ignores what, to us in Birmingham, is a far greater problem—that of Smith's Construction houses. There were 1,525 of these properties built in Birmingham, of which 550 have been sold. The properties are constructed of concrete blocks"—
And then he goes into details of the construction, of which we are well aware. The letter then continues, giving a list of what the City of Birmingham Housing Department would like. It certainly wants consultation but it wants,
"The ability of the Local Authority to classify properties as being defective and described within the Bill and to receive the same funding arrangements as identified in the Bill."
They also want:
"Additional capital resources allocated separately by the Government to enable Local Authorities with such structurally defective properties to effect repairs in the same way as is envisaged for owner occupiers."
I can assure the Minister that we shall spend some time on a limited number of these amendments and others we shall skate through: but this is a crucial point. There is satisfaction, from the local authority's point of view, that the HIP allocations in the future take fully on board any additional burden which flows from their obligations to complete the Bill. Those are the points from Birmingham.
Earlier this evening I was speaking to my honourable friend Mr. Jack Dormond, the Member for Easington. He was immediately agitated in the knowledge that your Lorships were discussing this Bill. When I was in another place, I spoke on the new towns for the Opposition, and that context I was made well aware of the enormous problems which have come to new towns as a result of defective buildings over the 1950s and 1960s—houses built by new town corporations which, when the transfer of properties took place, meant that they were saddled with enormous burdens. I can say that the Minister's honourable friends in another place recognised part of the problem, but new towns have got a major burden.
My attention as been drawn to a body that goes under the pseudonym of PROBE (Private Residents Overlooked by Easington). I do not know whether "overlooked" means a geographical location or whether it means that their views are not taken fully into account. These residents in fact are in the same kind of circumstances. I also plead in aid the problems of owner occupiers whose houses are not designated, and the houses that we are talking about in that case are called Skarne Pre-cast Reinforced Concrete—not yet designated, but the problem might come. I know many members of the Easington District Council and I know they are very diligent, very concerned and anxious to help; but they have their own problems and their own priorities. The Chief Executive, Mr. Conyers Kelly, has written to Mr. Dormond, and he says:
"In recent months the Council have had a number of letters from owner/occupiers in Peterlee again asking if any form of financial help can he offered."
As your Lordships know, the council cannot offer any help. In the supporting document, Mr. Kelly says:
"In recent times the bad design and construction problems have been aggravated by the discovery of asbestos in a large number of

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houses. The cost of the removal of the asbestos alone will average 1,500 per dwelling. Again no special financial help has been offered to either the Council or owner/occupiers."
Another paragraph reads—and this is most important for the Minister and his advisers, so I should like them to take particular note—
"With the continuing high unemployment in the area and the Council embarking upon its approved programme of remedial works to its own properties, the inability of some owner/occupiers to afford to carry out remedial works has quite apart from the financial plight of owner/occupiers created a visually detrimental effect in the Peterlee New Town."
I am asking for the understanding of the Minister when the HIP allocations are made. I hope that the Minister will understand, by the care we have taken to draw these illustrations, the need for consultation. Whatever there has been in the past—and we are making no point about that—it is crucial in the future. The Minister should consult before adding to his list, which will be an easement to owner/occupiers, but a burden to the council and the generality of the ratepayers and other tenants. We are simply asking the Minister in these two amendments: please take on board consultation with the proper associations and recognise that, if a further burden is to be laid upon local authorities, the money must be provided, or there must be access to the money over a period of time, in order that they may discharge their responsibilities.
Lord Skelmersdale: I should like to start by conveying the Committee's regards to the noble Baroness, Lady Fisher, and regretting that on this of all subjects she is not here to join us in our deliberations today. I should also like to make the general point that the Government, as represented on this occasion by myself, have no horror at all of consultations with the local authorities. I do not want to make political points on this subject any more than the noble Lord, Lord Graham, does, but I have said before, and I am quite ready to say it again, that we are prepared to consult on any occasion with anybody who wants to consult with US.
It is a little unfair for the noble Lord, Lord Stallard, to say that there has been a lack of consultation so far on the provisions of this Bill or on the subject with which it deals. Throughout the preparation of the Bill—and in setting up the discretionary scheme of assistance for owners of Airey houses which preceded this Bill—there have been continual and I must say constructive consultations with the local authority associations and others.
I refer in this connection to the consultative document issued to all local authority associations on 10th November 1983, and the outcome of the responses from this consultation paper is the Bill before your Lordships today. The proposals themselves were put to the local authority associations following the Government's announcement. To illustrate to your Lordships that this consultation has not merely been a matter of form, I point out that the Exchequer contribution in repurchase cases of 75 per cent., as the Committee will know, of the difference between the price paid to the owner and the defective value of the dwelling was introduced only after
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representations by the associations. Our original intention was that there should be no Exchequer contributions in repurchase cases.
There have been meetings between Ministers and representatives of the local authority associations on the question of resources—these were very properly referred to by the noble Lord, Lord Graham—and the Committee will be aware of the Government's discussions with the Building Societies Association and the National House Building Council.
So far as the specific problems of HIPs are concerned, the noble Lord, Lord Graham, knows as well as I do that HIPs are based on the planned spending of local authorities. Of course, there is always argument between what the local authorities as a group want and what the Government as a provider of resources are prepared to give in any one year; and this depends, of course, on the general economic situation.
But where local authorities already had definite plans for spending on these houses and on other defective dwellings, such as some Bison schemes, the department's regional controllers took these into account in distributing the local discretionary element of HIP resources at the regional level. We have said that when we know exactly what local authorities want to do—and we will know this only as a result of consultations with them—we will take account in our future HIP provisions of the planned spending that they intend to make. I really cannot go any further than that.
While I am answering the noble Lord, Lord Graham, I should say that, so far as Smith houses are concerned, I cannot at this moment stand at this Dispatch Box and say that they will be added to the list of 28 houses which I mentioned in my Second Reading speech on this Bill. But the noble Lord knows, because I said it on Second Reading, that we are considering this matter urgently with that possible end in view.
Lord Graham of Edmonton: Shortly.
Lord Skelmersdale: Exactly. The noble Lord has a good memory, as well as being able to read. I have given examples of what the Government have done so far by way of consultation in the preparation of the scheme. This illustrates the importance which we attach to the co-operation of all interested parties in the operation of the scheme. It is our intention to continue along the path we have already taken in this respect. I cannot give an absolute, categorical assurance that there will be discussion with all parties on every aspect of a particular designation, simply because there are occasions when central Government not only can move with the speed of light, but actually do move with the speed of light. It might well be appropriate to have a special, urgent designation where there simply is not time for consultations. However, apart from that, consultations will continue to be entered into.
Lord Stallard: I have listened very carefully to what the noble Lord the Minister and my noble friend have said. We are at cross-purposes. My amendment seeks

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consultation, but not on a general basis. I accept that there has been some consultation, but we are asking for consultation before the designation of any new classes or before any revocation of a designation under this clause. That is slightly different. The Minister said at the end of his remarks that he could give no guarantee. He mentioned that the Government sometimes move at the speed of light. Not many people would agree with that statement. The speed of light has certainly slowed down, according to the Minister's interpretation, unless he is referring to GCHQ, where the Government move at a much faster pace than they do in local government.
I am far from satisfied with the Minister's assurance. He has not assured me that there will be what we consider to be essential consultation with the people
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most directly involved; namely, the local authorities and the associations representing the tenants and the thousands and thousands of people who will remain in these kinds of dwellings, irrespective of what happens to the Bill.
I do not intend at this stage to go down the road the Minister travelled in connection with financial resources. These are the subject of further amendments, and I have no doubt that my noble friend Lord Graham of Edmonton will return to that aspect. I shall consider what the Minister has said. He has not moved in any way towards the kind of consultation we are seeking before any new designation or variation is made under the Bill. Therefore, reserving again my position for the future stages of the Bill, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
9.23 p.m.
Lord Stallard Lord Stallard moved Amendment No. 3:
Page 2, line 38, at end insert—
("() No designation under this section may be made unless the Secretary of State and local authority Associations have agreed that local authority resources are adequate to cope with the additional requirements, or such other additional resources are made available as appropriate.").
The noble Lord said: I beg to move the last amendment in a group of three amendments. It refers to the resources which were touched on by the Minister in his reply; but he did not reply specifically to this amendment. According to our reading of the Bill, it is based upon the assumption that only 28 types of prefabricated reinforced concrete dwellings will be designated. The Government have estimated that the cost to local authorities will be £250 million. During the Second Reading debate I mentioned that this is not the general understanding of the Association of Metropolitan Authorities and others. The problem will be much bigger than that. In this connection may I quote from Shelter's document which deals with the Bill. They say:
"Even within its own terms, the Bill is partial. The Government says, that 16,500 owners will be eligible for assistance—suggesting that it sees the Bill's provisions as limited to 26"—
I assume they mean 28, but I am not quite sure—
"house types it has already named as potentially defective. Yet the Association of Metropolitan Authorities has identified 167 house types dating from the same period (the 1940s and 1950s) which could also suffer from design and construction faults. Will these other house types be excluded?
They continue:
"In all, the number of 'non-traditional' and industrialised dwellings in the country has been put at 1·5 million. Over 300 different types of construction technique are involved. Although not all these dwellings may be defective, the figures give an indication of the scale of the problem. If the Housing Defects Bill is only to deal with 16,500 dwellings, its impact on the defective housing problem will be minimal. The Government must back up the Bill with adequate resources and special measures to help tenants as well as owners".
The Bill, however, deals only, as has been said, with 16,500 dwellings in private ownership and then does not deal with the costs of repairing the dwellings once they have been transferred back to the local authorities, which is another major problem. The costs therefore only refer to the giving of the reinstatement grants and the cost of the limited repurchase grants to local authorities. We shall develop that in further amendments.
However, there will still be 150,000 prefabricated reinforced concrete dwellings remaining in local authority ownership and probably most of the 16,500 currently in private ownership will be transferred back to local authorities. On this assumption, therefore, and using the Department of Environment's own figures for the cost of reinstatement, local authorities will incur expenditure of no less than £1.5 billion in the future as dwellings deteriorate and need to be repaired. The very existence of this Bill is a recognition of the central role played by all governments in the development of these dwellings and an acknowledgment of the problems that were so created. I enlarged on that at Second Reading. I do not intend at this stage to rehearse the way in which these problems were created and the kind of encouragement that governments gave to local authorities to embark on
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these programmes. But it must therefore be reasonable in the light of all those circumstances to accept the case for adequate financial assistance to be made available to local authorities confronted with these problems. The discrimination in this Bill therefore cannot be justified.
Unfortunately this Bill is being discussed at a time when housing investment has been put under even more stringent control. The noble Lord the Minister mentioned HIP. He did not say that these programmes are being quite drastically cut in many instances and subsidies are being reduced. We know that rate capping has been introduced to make the situation worse still, so much so that—as we pointed out in Second Reading—many local authorities are experiencing great difficulties in funding the cost of repair and remedial programmes of existing stock within their HIP allocation. We gave examples again from research documents supplied to noble Lords on that score.
The Association of Municipal Authorities has estimated that the cost of dealing with defects in the post-war housing stock will be at least £10,000 million. Bearing in mind the prefabricated reinforced concrete dwellings built before 1960 will cost at least £1.5 billion, our estimate is unlikely to be excessive. Therefore we know that more and more designations will have to take place under this Bill in the future. That is perfectly obvious to all of us who have discussed these matters with local authorities and have some experience of the problems that have existed and have been created. It is almost certain that more and more dwellings will have to be designated. But the Bill fails to acknowledge the size and enormity of the problem. Obviously we on this side are extremely concerned that the provision has only been made for £250 million (and that is not absolutely certain; there seems doubt about that sum) but it may ultimately entail much greater expenditure for which no provision has been made. This amendment would therefore make the provision of such resources a statutory responsibility. I beg to move.
Viscount Hanworth: I think on the whole I would support this amendment. Our problem today is that we just do not have enough money to do what we would like in the housing field. It is no use preferring one section of housing people to another. This amendment is really saying that if a local authority cannot afford to cope, and the situation is not extreme, and the Government are not willing to help, then perhaps one cannot undertake this at that moment at all. That is what I understand by this amendment. If I am right, then I think the amendment is reasonable.
Lord Skelmersdale: The noble Lords are quite right. We can justify at the moment only 28 types, to which I have already referred, but the Bill is deliberately drawn wide enough to include others, if necessary. The other side of the Committee have asked, "How do we know that funds will be available for this purpose?". I have explained already that HIP funds cannot be made available until there is a planned expenditure by local authorities; not before then will the matter be considered and will my honourable friend the Minister for Housing take it to his other Government colleagues.

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I know that at the moment discussion is going on. I have no idea what will be the result. It might be appropriate (and I know that my honourable friend is very much of this view) that the general needs index of local authorities should be revised to take account of the problems we have just been discussing in this Committee. I can give absolutely no clue as to how that consultation is progressing. I can say that consultation is progressing, but obviously I cannot prejudge the outcome, even if I knew what it was.
I take the basic point. The basic point of Amendment No. 3 is not for the Bill at all; it is for any extra work that local authorities may have to undertake for any purpose. It might not be through a designation of central Government. It might be a sudden crisis with their own housing stock, which has absolutely nothing to do with central Government.
The real question is this: in those circumstances, can the local authorities afford it? I have already referred to the special notice we are taking of the need for extra resources under this Bill. So far as the Bill is concerned, I cannot go any further than the Bill does. But the noble Lords are absolutely right when they say that this is a matter for general discussion, and it is being taken forward.
Lord Stallard: I am again grateful to the noble Lord for his reply and I am glad to hear that this matter is being taken forward. However, I was a little worried by his remark that there may well be another 50 or more types, "if necessary". He said that it might be necessary to designate another 50 types.
Lord Skelmersdale: I am sorry, but the noble Lord really did mishear me. I said that we can justify only 28 types at the moment, but that the Bill is deliberately drawn wide enough to include others, if necessary. I did not mention a figure; not one, not 50, not 80.
Lord Stallard: That makes it worse. The figure could be anything up to 187 types, or 300 types, necessary to be designated. When the noble Lord uses the words "if necessary" I assume that they mean, if the Treasury agrees. In the previous amendment the noble Lord seemed to pour cold water on the consultative process with local authorities and to reserve the right for simply the Secretary of State and, no doubt, the Treasury to deal with the question of further designations.
Again, for the noble Lord to say that it would give local authorities carte blanche is, if I may say so with respect, to misunderstand the amendment. The amendment is quite specific. We propose adding to the end of Clause 1 the words:
"No designation under this section may be made unless the Secretary of State and local authority Associations have agreed that local authority resources are adequate to cope with the additional requirements, or such other additional resources are made available as appropriate".
That is fairly specific.
We are saying that there ought not to be further designations until the resources are available. That again is a perfectly reasonable expectation to those of us who understand local authorities and how they function. To say the least, it is irresponsible, and
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certainly unreasonable, to expect local authorities to do otherwise than see that the resources are available before they embark, or are forced to embark, on massive works of the nature specified by the Bill.
In withdrawing the amendment, I again express my disappointment. I shall read carefully what the Minister has said and, if necessary, raise the matter again at the next stage. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 1 agreed to.
Clause 2 [Eligibility for assistance]:
9.35 p.m.
Lord Skelmersdale Lord Skelmersdale moved Amendment No 4:
Page 3, line 25, at end insert—
(" (3A) A person who holds a relevant interest in a defective dwelling is not eligible for assistance in respect of the dwelling at any time when that interest is subject to the rights of a person who is a protected occupier within the meaning of the Rent (Agriculture) Act 1976 or a statutory tenant within the meaning of that Act.").
The noble Lord said: With the leave of the Committee, I should also like to speak to Amendments Nos. 18, 19, 20, 21 and 22 in Clause 8.
Amendment No. 18: Clause 8, page 13, line 31, leave out from ("tenancy") to ("and") in line 33.
Amendment No. 19: Clause 8, page 13, line 42, leave out paragraph (b).
Amendment No. 20: Clause 8, page 14, leave out lines 9 and 10.
Amendment No. 21: Clause 8, page 14, line 13, column 2, leave out from ("Act") to end of line 14.
Amendment No. 22: Clause 8, page 14, leave out lines 16 and 17.
As the Committee will be aware, certain agricultural workers enjoy protected occupancies or statutory tenancies under the Rent (Agriculture) Act 1976. They are usually associated with their terms of employment.
As drafted, the effect of the Bill would be, in the case of a repurchase of such a dwelling by a housing authority, to remove the protection offered to such occupiers by the 1976 Act. On the other hand, the housing authority would be obliged to offer them a secure tenancy. But the terms of the secure tenancy (especially as regards rent) are likely to be less advantageous than those enjoyed under the 1976 Act—in particular, the rent might be much higher without any necessary compensating increase in wages—and there could be complications involving other terms of the worker's employment, with which we do not think it right that we should interfere.
It is also clear that the farmer who has let a dwelling as tied accommodation has done so for the purposes of a business. Our purpose in the Bill is to assist the owner-occupier, or his trustees or personal representatives, and not businesses.
We propose, therefore, that owners of dwellings which are subject to protected occupancies or statutory tenancies under the Rent (Agriculture) Act 1976 should not be eligible for assistance under the Bill. It would of course still be open to a farmer who owned a defective dwelling as an individual, and not through, for example, a limited company, to obtain assistance under the Bill if he obtained vacant possession of the dwelling in question: for example, by

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providing alternative tied accommodation for his employee. Other solutions would, as I have said, be very much more complicated.
I hope that I have managed to explain the purpose of these amendments. I beg to move.
On Question, amendment agreed to.
Lord Graham of Edmonton Lord Graham of Edmonton moved Amendment No. 5:
Page 4, line 36, leave out paragraph (b).
The noble Lord said: The amendment seeks to place a tenant in a position on all fours with the owner-occupier of a house which could very well be designated by type, so that the tenant of a council house would have the same rights to reinstate his house to a satisfactory condition as the owner-occupier. This is another route to get rid of the disparity that exists between the 16,500 owner-occupiers who will benefit from the Bill—and we do not cavil at that—and the generality of council tenants.
I must admit that the amendment is a device for a short debate and an invitation to the Government to express their views in respect of tenants' rights. At present, tenants are entitled to improvement grants, although it is acknowledged that relatively few exercise that right. In my view, a reinstatement grant is similar in concept. There is no justification for specifically excluding council tenants from that entitlement.
We recognise that the Bill deals specifically with assistance to private owners and that the deletion of the subsection will not achieve our aim of making reinstatement grants generally available to tenants. But, before we let this clause pass, we want an explanation from the Government. In many instances a tenant may live next door to an owner-occupier whose house may be reinstated with public money. The council tenant will therefore be put in what I would say is an invidious position. I beg to move.
Lord Skelmersdale: The amendment in itself would be of little benefit for the purpose which the noble Lord, Lord Graham, has in mind; and he explained it to the Committee. It would, if accepted, make only very few local authority tenants eligible for assistance under the Bill—those who are secure tenants and who fulfil the conditions of Clause 2(8) of the Bill. There are probably very few such cases, but it is possible for them to arise in the case, for instance, of certain leases terminable on death where the tenants have not purchased their interests.
The noble Lord, in moving the amendment, has made a case for extending the Bill for those who have remained as tenants of these defective dwellings. It is an issue which has already been debated at some length in another place and it is an issue we touched upon at Second Reading. I must again repeat that there is no need in this Bill to take steps to provide assistance for local authorities, or their tenants, or indeed other public sector tenants who live in buildings of a designated class. Such tenants and the buildings in which they live are the responsibility of the landlord authorities. There is no reason why such authorities should not continue to maintain these buildings through regular and considered programmes. I have already said that considered
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programmes are the basis for the HIP allocation. Repeated assurances have been given on the availability of resources in determining the overall total for housing capital expenditure and individual HIP allocations. As I have said, the Bill is designed to deal with a quite different problem.
I know that this theme is going to recur throughout the Committee stage and perhaps it may save a little time if I say now that the Government are fully seized of the problems and the points that have been made by noble Lords as far as HIP allocations are concerned with respect to defective dwellings. It will only weary the Committee if I go on again and again saying that when we have the properly formulated plans of local authorities that will be the time to consider increasing the HIP allocations for this purpose.
Lord Graham of Edmonton: I am grateful to the Minister for repeating that more than once. I promise I shall try to avoid the necessity for him to do it again. It is interesting that the authorities we consult say that although when discussions take place their point of view is taken on board, they are baffled when the allocations are made. They are unable to identify within the global sums allocated to them a figure which takes account of any particular circumstance.
For example, I am prepared to believe that there would be sympathy when the authorities say that there are so many thousands of houses they wish to take account of and they look at each individual council's needs and requirements and they make their plea. There are generalities in allocation and there is great difficulty in the authority being able to arrange precisely that there is built into their global figure a precise overlay to take account of a special problem. In fact, what happens, as the Minister knows, is that each local authority is given its global sum which is made up on assurances and programmes and it is up to the local authorities to decide how much to spend on improvement grants, how much to spend on buying land, how much to spend on building houses and how much on improving council estates, and so on. We are fearful that, in order to meet this additional obligation, some of those other heads will suffer.
I am satisfied with the Minister's reply at this stage and I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 2, as amended, agreed to.
Clause 3 [Entitlement to reinstatement grant or repurchase]:
Lord Skelmersdale Lord Skelmersdale moved Amendment No. 6:
Page 4, line 42, after ("below") insert ("and section [modification of Act in relation to shared ownership leases](3) of this Act")
The noble Lord said: This amendment is a minor paving amendment to the new clause to be inserted after Clause 16 (Amendment No. 49) to which with the leave of the Committee, I shall address my remarks. There are also two consequential amendments to Clause 17 (Nos. 50 and 52).
Amendment No. 49: After Clause 16, insert the following new Clause—
("Modification of Act in relation to shared ownership leases.
—(1) The Secretary of State may by regulations provide for this Act to have effect, in its application to any case in which a

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person is eligible for assistance in respect of a defective dwelling and his interest in the dwelling is either—

(a) a shared ownership lease, or

(b) the freehold acquired under the terms of a shared ownership lease,

subject to such modifications as may be specified in the regulations.
(2) Regulations under this section may (without prejudice to the generality of subsection (1) above)—

(a) require an authority receiving an application under section 3 of this Act by a person who—

(i) is eligible for assistance in respect of a defective dwelling, and

(ii) holds an interest falling within paragraph (a) or (b) of subsection (1) above,

to determine under that section that he is entitled to assistance by way of repurchase, and
(b) make any provision that may be made by an order under section 3(6A) of this Act.
(3) An authority shall not entertain an application under section 3 of this Act by a person whose interest in the defective dwelling concerned falls within paragraph (a) or (b) of subsection (1) above unless regulations under this section are in force at the time of application in respect of that interest.
(4) In this section "shared ownership lease" means—

(a) a shared ownership lease within the meaning of Part I of the Housing and Building Control Act 1984,

(b) a lease of a dwelling-house granted otherwise than in pursuance of that Part which contains provision to the like effect as that required by paragraph 3 of Schedule 3 to that Act,

(c) a lease of a description specified by the regulations, or

(d) a lease determined, or falling within a class determined, by the Secretary of State to be a shared ownership lease;

but where a lease becomes a shared ownership lease by virtue of regulations under this section or a determination under paragraph (d) above, that shall not affect the operation of the provisions of this Act in relation to a person who is eligible for assistance in respect of a defective dwelling if application for assistance in respect of the dwelling has previously been made by him under section 3 of this Act.
(5) Regulations under this section may make different provision for England, Scotland and Wales and for different descriptions of shared ownership lease.")
Amendment No. 50: Clause 17, page 21, line 1, after ("order") insert ("or regulations")
Amendment No. 52: Clause 17, page 21, line 7, at end insert—
("(2A) A statutory instrument containing regulations under section (modification of Act in relation to shared ownership leases) of this Act shall be subject to annulment in pursuance of a resolution of either House of Parliament.")
The purpose of the new clause is to enable the provision of the Bill to be applied in cases where the owner of a defective dwelling who is eligible for assistance in fact holds a shared ownership lease of the dwelling or has acquired the freehold by means of shared ownership leases and where the acquisition of shares in that lease has straddled the cut-off date. The Committee will recall from our recent consideration of what was then the Housing and Building Control Bill, the complexities of provisions dealing with shared ownership leases.
As the Committee would imagine, it would be very complicated to tailor the Bill to provide for a solution where the form of assistance is by way of reinstatement grant, and we believe the appropriate solution would be that, like owners of flats, owners of shared ownership leases should be assisted only by way of repurchase. Where such dwellings are repurchased, the provisions of the Bill will need to be adapted, for example, to relate the purchase price to the fact that some shares may have been purchased at defective value and others not, and, given the complicated
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nature of the modifications required and the likelihood that very few, if any, shared ownership leases of PRC houses will have been granted, we propose that the Secretary of State should be given a power to adapt the provisions of the Bill by order subject to negative resolution as and when cases of this kind emerge, which we fully expect to be very rare.
In the circumstances, I am sure that this is the right way to approach the complex question of shared ownership leases and the application of the Bill in such unfortunate cases. I beg to move.
On Question, amendment agreed to.
9.46 p.m.
Lord Stallard Lord Stallard moved Amendment No. 7:
Page 5, line 19, leave out sub-paragraph (ii).
The noble Lord said: The reasons for the amendment are simple. We say that sub-paragraph (ii) should be deleted because it is impossible for a local authority to say that an individual acquiring a freehold would be likely to be able to arrange a mortgage. Building societies are outside the control of local government and local authorities. As we know, they have been reluctant to lend on any of these properties. Certainly, local authorities have no control over building societies.
As we know—the Minister has already referred to this in reply to a previous amendment—some discussions have taken place between the building societies and Department of Environment officials. There have also been discussions, I understand, with the National House Building Council. However, what the Minister did not say was that those discussions had failed to produce any agreements. It would seem to us that the Government are therefore now attempting to put the onus onto local authorities in this regard. In view of the fact that local authorities will be completely unable to say that an individual is likely to arrange a mortgage, most private owners will be able to insist that the local authority repurchase the dwelling under the provisions of Clause 3. If this subparagraph remains, the vast majority of tenants will be able to insist on repurchase, and the cost to local authorities of repurchase and subsequent improvements will rise substantially.
The only way, in our view, that this matter can be resolved is through an agreement with the building societies at national level. It is therefore a matter on which the Minister and the Government should take the initiative. In the meantime, in our view, this subparagraph should be deleted. I beg to move.
Lord Skelmersdale: The Committee will be aware that it is not the Government's intention to encourage the re-acquisition by the public sector of houses sold into the private sector. I am sure that it is right that, wherever possible, these houses should remain in the private sector; that is what the great majority of owners will want, provided that they can be sure that when repaired, their houses will be saleable at full value and hence become mortgageable for the new owners. We have therefore decided that the main form of assistance under the Bill should be grant-aided towards the cost of reinstating the defective dwellings wherever the dwellings concerned can be satisfactorily repaired.

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Equally, noble Lords will be as aware as I am that the key requirement, if reinstatement is to be an effective means of assistance, must be to ensure that the owner of the house can sell it at a defect-free value once the repair is completed. Without this, the problem which confronts the private owner—namely, the devaluation of his asset—will remain, and the primary purpose of the Bill will be frustrated.
We have therefore provided in paragraph (b)(ii) of subsection (4), which the amendment which we are discussing seeks to delete, that, unless the authority making a grant is satisfied that the reinstatement work to be grant-aided is likely to make the house mortgageable in the private sector, it shall purchase that house. That seems to me a perfectly reasonable provision.
The noble Lord also misunderstood the onus on the local authorities when he said that they had to decide whether individuals were unlikely to arrange a mortgage. Clause 3(5) provides for the local authority to repurchase the house where it is unreasonable to expect the owner to arrange or wait for reinstatement; in other words, what I was talking about earlier this evening, and indeed on Second Reading—that the need to move is much more a criterion than the possibility of arranging a mortgage. It is this assessment which the local authority has to make.
Viscount Hanworth: I oppose this amendment. It seems to me that the Opposition is really tumbling over to help the local authorities. Surely we have got to strike a balance between their interests and those of the tenant. In this case I should have thought that the Government are right in what they have said, and we should give the benefit to the tenant. Therefore, this amendment should not be accepted.
Lord Graham of Edmonton: We are not talking about a tenant; we are talking about an owner-occupier. If we are concerned about the interests of tenants, then, of course, we are concerned about the local authority, because the people we are concerned with in this Bill are people who once were tenants. They exercised their right to buy. They did so in the knowledge of caveat emptor—let the buyer beware. They find that the property they bought, which at the time was valued at £20,000 but which they bought for £10,000, by virtue of the discounts, has now got defects which neither they nor the authority knew about at the time.
The Bill provides a very satisfactory outcome to the dilemma they have come across as owner-occupiers, not as tenants. They have ceased to be tenants. I take to heart what the noble Viscount, Lord Hanworth, said about the need to be concerned about tenants. In this situation the tenants are the tenants of the authority who, on the margin, will have to bear some of the cost of helping to bale out the previous tenant, who becomes an owner-occupier. To that extent, I am grateful for the support which the noble Viscount has given us on this point.
Lord Stallard: I, too, am grateful for what the Minister has said, and for the remarks of the noble Viscount, Lord Hanworth. I can assure him that we are very conscious of the need to maintain this balance. As my noble friend Lord Graham has pointed
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out, we are very much concerned with the owner-occupiers, and, of course, with the tenants, and therefore with the local authorities. In view of the reply the Minister has made, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Skelmersdale Lord Skelmersdale moved Amendment No. 8:
Page 5, line 45, at end insert—
("(6A) The Secretary of State may by order amend subsection (4) above (whether as originally enacted or as previously mended under this subsection) so as to modify any of the conditions there mentioned or to add or substitute for any of those conditions other conditions; and an order under this subsection—

(a) may make different provision for different classes of case,

(b) shall not affect the operation of this section in relation to applications made under this section before the order comes into force.")

The noble Lord said: In moving this amendment, I should like to speak also to Amendment No. 51.
Amendment No. 51: Page 21, line 3, at end insert—
("(1A) No order shall be made under section 3(6A) of this Act unless a draft of the order has been laid before and approved by a resolution of each House of Parliament.")
These two amendments are designed to provide a sort of safety net against unforeseen circumstances in the operation of the scheme of assistance provided by the Bill. Entitlement to reinstatement grant under the Bill is normally to be dependent on the conditions set out in Clause 3(4). There are particular cases in which these may not produce the intended result; in particular, they may lead to money being spent on reinstatement grant when it is not a sensible use of public money.
For example, where a compulsory purchase order has been made which affects the defective dwelling, an application for assistance, if pursued, could lead, under the existing conditions, to the conclusion that reinstatement was the means of assistance, but such reinstatement would entail expenditure if compulsory acquisition was to take place within a relatively limited period thereafter. This problem could be overcome by amending the conditions provided for in Clause 3(4) for such circumstances.
We think, therefore, that it would be prudent to take a power to amend the conditions by order so that we can take steps to make the scheme work more effectively in those cases. We have provided that such an order should be subject to affirmative resolution of both Houses, so that the closest scrutiny can be given to any proposals the Secretary of State may have in mind to amend the conditions in Clause 3(4). I should have thought that that would be something that would be welcomed by your Lordships. I beg to move.
Lord Graham of Edmonton: I shall be brief and I do not expect the Minister to reply. I certainly take the point not that we are covering uncharted territory, but that there will be circumstances which the Minister and his colleagues anticipate and some which they do not anticipate. I listened very carefully to the Minister when he said that there may well be cases in respect of which matters will not work out as they intend. I asked the Minister for an illustration and he gave the illustration of the compulsory purchase order where the follow through was not the purpose for which the Bill

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was designed. Therefore, what we are being asked to approve here is that, in the light of the need to seek variations, the Minister will come forward with an order which will need to be argued in the light of the then experience, in which case we shall have the opportunity of recognising that it is fair and equitable. In those circumstances we shall certainly not oppose the amendment.
On Question, amendment agreed to.
Clause 3, as amended, agreed to.
Clause 4 agreed to.
Clause 5 [Reinstatement grant]:
Lord Skelmersdale Lord Skelmersdale moved Amendment No. 9:
Page 9, line 11, leave out subsection (6).
The noble Lord said: I beg to move Amendment No. 9 and, with the leave of the Committee, I should also like to speak to the new clause which the Government propose should be inserted after Clause 12, and that appears as Amendment No. 25.
Amendment No. 25: After Clause 12, insert the following new Clause:
("Reinstatement of defective dwelling by appropriate authority
.—(1) Where a relevant interest in a defective dwelling has been disposed of by a public sector authority, then (without prejudice to any of their other powers) the appropriate authority may before the end of the period within which a person may seek assistance under this Act in respect of the dwelling enter into an agreement with any person holding an interest in the dwelling or any person who is a statutory tenant of it to execute at his expense any of the work required to reinstate the dwelling.
(2) For the purposes of subsection (1) above, a disposal by or under any enactment of an interest in a dwelling held by a public sector authority is to be treated as a disposal of that interest by the authority.
(3) In this section "statutory tenant" is to be construed in accordance with section 2 of the 1977 Act or, as the case may be, section 3 of the 1971 Act.")
Clause 5(6) of the Bill already provides that the local authority may by agreement do works for a person entitled to assistance at his expense. But there will be cases where the owner of a dwelling which is a defective dwelling under the Bill is not entitled to assistance, or where there is a statutory tenant of the dwelling, and it would be in his interest for the authority to be able to do works on his behalf by agreement at his expense. We have received representations on this issue from a number of Members of Parliament—including the honourable Member for Pontefract and Castleford, whom noble Lords opposite will know well, and also from local authorities. There are doubts in the minds of some authorities about their powers to do such works.
The new clause puts the question beyond doubt and provides that local authorities may undertake works by agreement as agent on any defective dwelling so long as the agreement is made before the end of the period during which owners may seek assistance under the relevant designation under the Bill. The present Clause 5(6) therefore becomes superfluous and is deleted by Amendment No. 9. I beg to move.
Viscount Hanworth: In general we must be thankful to the Government for having shown flexibility in this Bill, which is not always apparent. However, having said that, I think that one can draw only two
1444
conclusions: either that there was inadequate consultation or thought by the Government beforehand, or that those whom they consulted did not give serious consideration to the matter beforehand, because we should not really have this amount of change at this stage of the Bill. Nevertheless, I hope that that does not spoil my congratulations to the Government for at this stage being flexible enough to alter the Bill in this way.
Lord Graham of Edmonton: Like the noble Viscount Lord Hanworth, we consider this amendment helpful, but I wonder whether we can pursue the possibilities? I am very much concerned with the opportunity for a council's direct labour organisation to be involved in these matters. Can the Minister and his advisers address themselves to the situation of a council which has a direct labour organisation which is carrying out work to one of its own properties which is next to a council house which comes within the provisions of this Bill—in other words, which has been sold and which requires reinstatement work to be carried out? Can the Minister deal with that situation?
As I understand it, the power to carry out work as an agent clearly envisages the possibility of a council's direct labour organisation being involved in these matters. The Minister is aware of the prohibition currently on councils' direct labour organisations to undertake work which is not part of their own work—in other words, it is private work, and as I understand it, outwith the powers.
If we can be assured that the point which was raised by Mr. Lofthouse is fully met by this amendment we shall be satisfied. As a result of a little research, my information is that the illustrations which bothered Mr. Lofthouse in another place and which caused the Minister and his advisers to see whether the point could be met, are not fully met. I should be grateful if the Minister could help me.
Lord Skelmersdale: Perhaps I can encapsulate the answers that were given on this subject in another place, because I understand that it is somewhat complicated. The rule about direct labour organisations is that they can do anything which the local authority has power to do itself. This Bill gives them the power to operate under certain circumstances. Therefore, if the circumstances are fulfilled, the direct labour organisation in the case cited by the noble Lord can do the work.
On Question, amendment agreed to.
Clause 5, as amended, agreed to.
Clause 6 [Repurchase]:
Lord Skelmersdale Lord Skelmersdale moved Amendment No. 10:
Page 10, line 20, after ("Act") insert ("(except paragraph 3B)")
The noble Lord said: With the leave of the Committee, I should also like to speak to Amendments Nos. 11, 54 and 59.
Amendment No. 11: Clause 7, page 11, line 41, leave out ("paragraph 4") and insert ("paragraphs 3A and 4")
Amendment No. 54: Clause 20, page 24, line 30, after ("21") insert ("and paragraph 3A of Schedule 2")

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Amendment No. 59: Schedule 2, page 30, line 34, at end insert—
("Effect of acquisition.
3A.—(1) Where an interest acquired in pursuance of section 6 of this Act is or includes a dwelling in relation to which a grant has been paid under Part VII of the Housing Act 1974—

(a) any conditions imposed under or by virtue of that Part of that Act as conditions of the grant shall cease to be in force with respect to the dwelling with effect from the time of disposal of the interest, and

(b) the owner for the time being of the dwelling shall not be liable to make in relation to the grant any payment under section 76 of that Act (repayment of grant on demand following breach of condition) unless the liability to do so arises from a demand made before the time of disposal of the interest.

(2) In sub-paragraph (1) above—
"dwelling" has the same meaning as in the Housing Act 1974; and
"owner" has the same meaning as in Part VII of that Act.
3B.—(1) Where an interest acquired in pursuance of section 7 of this Act is or includes a house in relation to which a grant has been made under Part I of the Housing (Scotland) Act 1974—

(a) observance with respect to the house of any of the conditions specified in section 9 of that Act (conditions to be observed with respect to a house in respect of which a grant has been made) shall cease to be required with effect from the time of disposal of the interest and paragraph 7 of Schedule 2 to that Act (requirements as to records when observance of conditions ceases to be required) shall apply as it applies in the case there mentioned; and

(b) the owner for the time being of the house shall not be liable to make in relation to the grant any payment under Schedule 2 to that Act (consequences of breach of conditions) unless the liability to do so arises from a demand made before the time of disposal of the interest.

(2) In sub-paragraph (1) above—
"house" has the same meaning as in the Housing (Scotland) Act 1966; and
"owner" has the same meaning as in Part I of the Housing (Scotland) Act 1974.").
There will be cases where a person who has received a repairs, improvement, or intermediate grant under Part VII of the Housing Act 1974 in respect of a dwelling is eligible for assistance by way of repurchase of that dwelling under the Bill. The authority making the grant may under Part VII of the 1974 Act impose certain conditions relating to the use of the dwelling, for example, on availability for letting. Breach of such conditions may render the owner for the time being liable to repayment of the grant: this liability runs with the land and could arise, say, if the house were sold again under the right to buy after repurchase and repair.
The purpose of these amendments is to provide that, upon acquisition under the Bill, any such conditions shall cease to have effect and to prevent any liability to repayment from arising (by reason of a demand made after the acquisition) in respect of a breach of the conditions before acquisition. The amendments operate on both Clauses 6 and 7 reflecting the different repurchase provisions applying in England/Wales and Scotland. I beg to move.
On Question, amendment agreed to.
Clause 6, as amended, agreed to.
Clause 7 [Repurchase in Scotland]:
Lord Skelmersdale Lord Skelmersdale moved Amendment No. 11:
[Printed above.]
On Question, amendment agreed to.
Clause 7, as amended, agreed to.
Lord Skelmersdale Lord Skelmersdale moved Amendment No. 12:
After Clause 7, insert the following new Clause—
("Purchase of certain land by authority possessing compulsory purchase powers.
.—(1) In any case where—

(a) there was a disposal of an interest in a defective dwelling, being an interest held by a person (in this section referred to as the "owner") who immediately before the time of disposal was eligible for assistance in respect of the dwelling,

(b) the disposal was made to an authority possessing compulsory purchase powers otherwise than in pursuance of section 6 or 7 of this Act,

(c) on the disposal, the authority acquired an interest in any affected land, that is to say, the defective dwelling and any garage, outhouse, garden, yard and appurtenances occupied with and used for the purposes of the dwelling or any part of it, and

(d) the amount paid as consideration for the disposal did not include any amount attributable to the owner's right to apply for assistance in respect of the dwelling,

the owner is entitled, subject to subsection (4) below, to be paid by the housing authority the amount (if any) by which ninety-five per cent. of the defect-free value exceeds the amount of compensation for the disposal.
(2) For the purposes of this section, the amount of compensation for the disposal is—

(a) the amount that would have been the proper amount of compensation for the disposal (having regard, where any relevant determination has been made by the Lands Tribunal or the Lands Tribunal for Scotland, to that determination), or

(b) if greater, the amount paid as the consideration for the disposal,

but excluding any amount payable for disturbance or for any other matter not directly based on the value of land; and in this section the "defect-free value" means the amount that would have been the proper amount of compensation for the disposal (excluding any amount so payable) if none of the defective dwellings to which the designation in question related had been affected by the qualifying defect.
(3) For the purposes of this section—

(a) it is to be assumed that the disposal occurred on a compulsory acquisition (in cases where it did not in fact do so), and

(b) where the compensation for the disposal fell to be assessed by reference to the value of the land as a site cleared of buildings and available for development then, for the purpose of determining the defect-free value, it is to be assumed that the compensation did not fall to be so assessed,

and, for the purposes of subsection (1) above, the amount of compensation for the disposal shall be reduced by the amount of any payment made in respect of the defective dwelling under section 30 or 60 of the Housing Act 1957 or section 30 of the Housing (Scotland) Act 1974.
(4) A housing authority are not required to make a payment to any person under this section unless he makes a written application to them for the payment before the end of the period of two years beginning with the time of disposal.
(5) Where a housing authority refuse an application for a payment under this section on the grounds that the owner was not eligible for assistance in respect of the defective dwelling at the time of the disposal, they shall give to the applicant a notice in writing stating the reasons for their view.
(6) Any question arising under this section as to the amount of compensation for a disposal or defect-free value shall be determined by the district valuer if the owner or the housing authority so require by notice in writing served on the district valuer.
(7) Before making a determination in pursuance of subsection (6) above, the district valuer shall consider any representation by the owner or the authority made to him within four weeks from the service of the notice under that subsection.
(8) A person serving a notice on the district valuer under subsection (6) above shall serve notice in writing of that fact on the authority or, as the case may be, the owner.
(9) In this section—
"authority possessing compulsory purchase powers" has the same meaning as in the Land Compensation Act 1961 or the Land Compensation (Scotland) Act 1963;
"district valuer" has the same meaning as in paragraph 3(1) of Schedule 2 to this Act; and
"housing authority", in relation to a defective dwelling, means the housing authority in whose area the dwelling is situated.
(10) In this section—

(a) references to the owner include a reference to his personal representatives; and

(b) the reference to appurtenances occupied with and used for the purposes of a dwelling or any part of it is, in Scotland, a reference to pertinents belonging to or usually enjoyed with the dwelling or any part of it.")

The noble Lord said: I hope that in moving this amendment I do not get the same side swipe from the noble Viscount, Lord Hanworth, as I did on a previous one. With the permission of the Committee, I should also like to speak to the consequential amendments, Nos. 26, 27, 29, 31, 32, 33, 41, 43 and 45.
Amendment No. 26: Clause 13, page 18, line 10, after ("1(6) ") insert ("(Purchase of certain land by authority possessing compulsory purchase powers) (6) ")
Amendment No. 27: Clause 14, page 18, line 32, after (" 1(6) ") insert ("Purchase of certain land by authority possessing compulsory purchase powers (6) ")
Amendment No. 29: Clause 15, page 19, line 6, after ("authority") insert ("(a)")
Amendment No. 31: Page 19, line 9, at end insert—
("or
(b) in making any payment under section (Purchase of certain land by authority possessing compulsory purchase powers) of this Act.")
Amendment No. 32: Page 19, line 13, leave out ("as the case may be")
Amendment No. 33: Page 19, line 14, after ("completed") insert ("or in which the payment under section (Purchase of certain land by authority possessing compulsory purchase powers) of this Act was made, as the case may be")
Amendment No. 41: Page 19. line 27, after ("given") insert ("or payments made")
Amendment No. 43: Page 19, line 39, leave out ("and")
Amendment No.45: Page 20, line 5, at end insert—
("and
(c) in the case of any payment under section (Purchase of certain land by authority possessing compulsory purchase powers) of this Act, the amount of the payment")
The purpose of the new clause, which is to be inserted after Clause 7, is to make provision in the Bill for cases where defective dwellings are acquired by compulsory purchase or by agreement where a compulsory purchase order would otherwise have been made. As the Bill and the relevant compensation provisions stand at present, the terms on which properties are acquired compulsorily would mean that the owner of a defective dwelling will be compensated on the basis of the defective value of the property, and, wherever the value element of the compensation is less than 95 per cent. of defect-free value, the intervention of purchase under the compensation code would have the effect of depriving the owner of assistance under the Bill. These amendments are designed to protect that owner's position. I am sure that within the general
1448
framework of the Bill, which I have already outlined, the Committee will approve of them. I beg to move.
On Question, amendment agreed to.
Clause 8 [Secure tenancies]:
Lord Skelmersdale Lord Skelmersdale moved Amendment No. 13:
Page 12, line 10, leave out ("with") and insert ("immediately before").
The noble Lord said: Amendments 13, 24 and 57 are all pure drafting amendments—if you can have such things.
Amendment No. 24: Clause 11, page 16, line 38, leave out ("or grants").
Amendment No. 57. Schedule 2, page 29, line 11, leave out ("the landlord's") and insert ("pay for outstanding").
I beg to move.
On Question, amendment agreed to.
10.6 p.m.
Lord Skelmersdale Lord Skelmersdale moved Amendment No. 14:
Page 13, line 8, after ("shall") insert ("except where the circumstances fall within paragraph 2 of Schedule (Alternative accommodation) to this Act,").
The noble Lord said: With this amendment I should like to take also Amendments Nos. 15, 16, 17 and 61.
Amendment No. 15: Page 13, line 8, leave out from ("be") to first ("the") in line 10.
Amendment No. 16: Page 13, line 11, leave out from ("period") to end of line 14 and insert ("and where the circumstances fall within that paragraph shall be another dwelling-house which, so far as is reasonably practicable in the case of that authority, affords accommodation which meets the requirements for suitability set out in paragraph 3 of that Schedule.")
Amendment No. 17: Page 13, line 21, at end insert—
(" (7A) An authority receiving a request under subsection (7) above shall, as soon as it is reasonably practicable to do so, give notice in writing to the person making the request stating—

(a) whether or not in their opinion the circumstances of his case fall within paragraph 2 of Schedule (Alternative accommodation) to this Act, and

(b) if their opinion is that they do—

(i) which of the Cases specified in that paragraph is applicable to those circumstances, and

(ii) the effect of subsection (6) above and Schedule (Alternative accommodation) to this Act.")

Amendment No. 61: After Schedule 2, insert the following new schedule.

ALTERNATIVE ACCOMMODATION
Interpretation
1. In this Schedule—

(a) "dwelling-house" has the same meaning as in section 8 of this Act,

(b) "prospective tenant" means the person who is to be granted a tenancy under that section, and

(c) "current dwelling-house" means the dwelling-house which, on the assumption that the circumstances do not fall within paragraph 2 below, would be required to be let to the prospective tenant under that section.

Cases where change of dwelling-house is necessary
2. Circumstances fall within this paragraph if either of the following Cases is applicable to them—
Case 1
By reason of the condition of any building of which the current dwelling-house consists or of which it forms part, the dwelling-house may not safely be occupied for residential purposes.
Case 2
The appropriate authority intend, within a reasonable time of the completion of their acquisition of the interest concerned—

(a) to demolish or reconstruct the building which consists of or includes the defective dwelling in question, or

(b) to carry out work on any building or land in which the interest concerned subsists,

and cannot reasonably do so if the current dwelling-house remains in residential occupation.
Suitability of accommodation
3. The suitability of accommodation is to be assessed by reference to the following matters, that is—

(a) whether it is similar as regards extent and character to the accommodation afforded by the current dwelling-house;

(b) whether it is reasonably suitable to the means of the prospective tenant and his family; and

(c) whether it is reasonably suitable to the needs of the prospective tenant and his family having regard to proximity to place of work and place of education.")

These amendments are, in part, in response to a point made in the proceedings on the Bill in another place by the honourable Member for Norwood about the extent of local authority discretion contained in the Bill. They are also intended to clarify the position of the owner in repurchase cases and the criteria to which the authority must have regard when granting him a secure tenancy under Clause 8 of the Bill.
As drafted, Clause 8(6) gives the authority discretion as to whether the secure tenancy should be of the dwelling of which the applicant is the occupier or of another dwelling, and discretion as to what constitutes a suitable alternative dwelling if that route is chosen. These decisions could not be reviewed in the county or sheriff court under Clauses 13 or 14 respectively. Normally, we would expect the repurchased dwelling to be suitable for continued occupation for a number of years, and assuming of course that the applicant wishes to take a secure tenancy—he may well opt to buy in the private sector with his proceeds of sale—he should normally be allowed to remain in that dwelling.
In most cases it will have been the family home for a number of years. We propose therefore that the applicant should be granted a secure tenancy of the repurchased dwelling-house except where, first, the state of the defective dwelling is such that there is a risk to the life or limb of the occupier in question and other persons living in the dwelling; or, secondly, the appropriate authority intends, within a reasonable time of repurchase under the Bill, to demolish or reconstruct the defective dwelling, or to carry out work on that defective dwelling being acquired under the Bill, and cannot reasonably do so with a tenant in possession of the defective dwelling under a secure tenancy.
If the applicant is to be granted a secure tenancy of another dwelling, that other dwelling should be, as far as practicable, similar in extent and character to the house being purchased, and be reasonably suitable to the means of the person to be granted the tenancy and of his family, and to his needs and those of his family as regards proximity to place of work and education. In other words, the ex-owner and new tenant is to be in circumstances as similar as previously as the wit of man and the local authority can devise. I am sure that this is fair all round. I beg to move.
Lord Graham of Edmonton: There is only one point I should like to raise. Will the Minister recall the illustrations I gave of the Southcote Residents' Association in Reading, who have been in touch on a range of matters? I am sure that they will have seen some relief in this Bill. I recalled, as the Minister was speaking, that one of the points they raised dealt with the situation of a person who has to leave a property while it is being reinstated and the costs he faces through having to leave. It may well be that the person would be housed in some other council accommodation, but even if he were, consequential costs could fall on him. The Minister is painting an attractive picture to the effect that if a person buys a £20,000 house for £10,000 and finds it is defective, under the Bill he is entitled to plead with the authority for either reinstatement or repurchase. The Minister is saying that in certain circumstances a person having lived in a reasonable house ought to be reasonably well looked after.
Are the Minister and his advisers saying that there is any element in the understanding—it may be part of the Bill, or an interpretation of it—whereby the additional but not punitive costs legitimately incurred, and which can be validated by an occupier who is an owner-occupier who is in this transitional period, can be met by the council, by the Government, by a grant or in some other way?
Lord Skelmersdale: Whenever one moves house, whether from a rented dwelling to a rented dwelling, from a rented dwelling to an owned dwelling or vice versa, costs are inevitably incurred. The consequential costs mentioned by the noble Lord, Lord Graham, are not included in this Bill because it would be unfair to do so. On this occasion, it is unfair to the local authority to do this at the expense of other occupiers of property, whether owner-occupiers or tenants, who would not have the same resource to draw upon.
On Question, amendment agreed to.
Lord Skelmersdale Lord Skelmersdale moved Amendments Nos. 15 to 17 en bloc.
[Printed above.]
On Question, amendments agreed to.
Lord Skelmersdale Lord Skelmersdale moved Amendments Nos. 18 to 22 en bloc.
[Printed earlier: col. 1436.]
The noble Lord said: I spoke to these amendments with Amendment No. 4.
On Question, amendments agreed to.
Clause 8, as amended, agreed to.
Clause 9 agreed to.
Clause 10 [Designation under local schemes]:
Lord Graham of Edmonton Lord Graham of Edmonton moved Amendment No. 23:
Page 16, line 12, at end insert—
("(10) Where a designation has been made under this section by a housing authority and subject to (6)(a) and (b) above the Secretary of State shall make available to the housing authority an additional contribution to expenditure under Clause 14 of this Act.")
The noble Lord said: Local authorities may designate classes of dwelling within their own area as defective, but, in so doing, should be able to ensure that the appropriate resources are made available by central Government. I do not want to go over the allocation argument. The Minister has satisfied me that it is his intention that that be done.
Central Government have already agreed, by virtue of this Bill, to make available resources for the PRC dwellings. Therefore, if they accept that local authorities can designate further types as defective, they should also be willing to meet the costs. It should be borne in mind that under Clause 10(6), the Secretary of State has the right to veto a local authority's designated scheme within 28 days. Therefore, if he does not accept that a local authority is acting reasonably, he can take appropriate action. In other words, if the local authority does not wish to designate for a multitude of reasons—which can all be summed up in the one word "money"—then the Minister can take action. We are therefore only asking for additional financial help in circumstances where the local authority is seen to be acting reasonably by responding to defects in its own area. This could be the circumstance of the Smith houses and others that we referred to. I beg to move.
Lord Skelmersdale: To cut my response short, the question at issue is whether the Secretary of State should contribute towards the cost of repurchasing dwellings designated locally under Clause 10. The question is the proper balance of responsibility. The power of local authorities to make local designation under Clause 10 is designed to enable them to give assistance to owners who have bought dwellings which are now found to be defective by reason of design or construction faults that are peculiar to dwellings in that authority's area or in the area of only a few authorities—in other words, where there is no national problem. It must follow that those faults are the results of decisions taken at a local level as to the design or methods of construction of particular dwellings. In those circumstances, it is right, in principle, that the costs of giving assistance to owners to help them with consequences of those local decisions or practices should be borne locally and should not fall on the central taxpayer. It is this principle that is reflected in Clauses 10 and 15 in the Bill as drafted. I do not think that we should depart from it.
As a matter of fact it would be consistent with this basic principle if the Secretary of State were not to make the contributions under Clause 15 towards reinstatement grants given under local schemes made under Clause 10. We are not pressing that principle to that point and propose to take power in Clause 15 to make contributions towards expenditure on giving grants under local schemes. Reinstatement grants under this Bill have a family relationship with repairs grants under the Housing Act 1974 generally. In view of that, we think it right that we should not try to distinguish between reinstatement grants given in pursuance of a designation under Clause 1 and those given in pursuance of a designation under Clause 10.
Where grants are given under Clause 10, the Secretary of State will make a contribution to the local
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authority's expenditure at a rate of 90 per cent. This is a generous arrangement. If, as we hope, reinstatement is the main means of assistance under the Bill, the Secretary of State will contribute substantially to expenditure incurred as a result of local designations. As I said at the beginning, we do not believe it to be right for the central taxpayer to bear the entire responsibility for decisions taken at a local level. I hope the amendments will be withdrawn. If not, I must invite your Lordships to reject them.
Lord Graham of Edmonton: The noble Lord tempts me at this time of night. But I have been round the tea rooms quietly and there are more of them than there are of us—and there are very few of them. It is an interesting proposition that many local authorities who genuinely accept the equity of the need to designate where the Minister has not designated will be literally torn in their discussions as to their need to look after their local people and the additional burdens that will be borne upon them. The Minister rests on this on the premise that the houses that have the defects were taken on a narrow local basis, and therefore the local people, 20 or 30 years later, as the general taxpayers in need of housing, will have to pay more of the burden. It is rather sad and it is one of the unhappy aspects, because although the right to designate locally is provided for in the Bill, because of the need to look after other interests as well as the shortage of money I forecast that very few authorities will add that additional burden to the load they are already carrying. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 10 agreed to.
Clause 11 [Notices]:
Lord Skelmersdale Lord Skelmersdale moved Amendment No. 24:
[Printed earlier: col. 1448.]
The noble Lord said: I beg to move this amendment. I spoke to it with Amendment No. 13.
On Question, amendment agreed to.
Clause 11, as amended, agreed to.
Clause 12 agreed to.
Lord Skelmersdale Lord Skelmersdale moved Amendment No. 25:
[Printed earlier: col. 1443.]
The noble Lord said: I beg to move this amendment. I spoke to it with Amendment No. 9.
On Question, amendment agreed to.
Clause 13 [Jurisdiction of county court and rules of procedure]:
Lord Skelmersdale Lord Skelmersdale moved Amendment No. 26:
[Printed earlier: col. 1447.]
The noble Lord said: I beg to move this amendment. I spoke to it with Amendment No. 12.
On Question, amendment agreed to.
Clause 13, as amended, agreed to.
Clause 14 [Jurisdiction of sheriff in Scotland]:
Lord Skelmersdale Lord Skelmersdale moved Amendment No. 27:
[Printed earlier: col. 1447.]
On Question, amendment agreed to.
Clause 14, as amended, agreed to.
Clause 15 [Secretary of State's contribution to expenditure]:
Lord Graham of Edmonton Lord Graham of Edmonton moved Amendment No. 28:
Page 19, line 4, leave out ("may if he thinks fit") and insert ("shall").
The noble Lord said: Clause 15 begins:
"The Secretary of State may if he thinks fit"—
there are draconian powers and there is real power—
"in any case contribute towards the expenditure incurred".
We really want to probe the Minister. May I remind the Minister that, in discussions that we had with him outside the Committee, I was concerned to understand fully the circumstances in which the Minister, if he thought fit, would withhold his permission. What we are seeking here to do is to say that the Secretary of State shall in any case contribute; because, as we are under the impression, once a designation has been made and once the conditions under which the reinstatement grant or the repurchase can take place are fully met by the authority and the prospective seller of the house to the council, there ought to be no circumstances in which the Secretary of State is capable of withholding his authority.
We shall be satisfied if the Minister can tell us that this is a stop-gap, one cannot envisage any circumstances in which it would take place. But we certainly want the Minister to tell us under what circumstances, when his draftsman drafted this amendment, he could see it was possible for the present statutory right to be varied so that the Secretary of State would exercise his discretion.
We really want to know whether there is any need for this amendment and whether the Minister would assist the local authorities and others to help him to carry out the provisions of the Bill and certainly ease the minds of prospective sellers of houses. People may be advised that they conform in every circumstance, but some estate agent or solicitor, or some council, may say, "Well, it's all very well; you have gone as far as you can; but it is quite possible that the Secretary of State, for some reason that we don't know, might withdraw this power". We really want to know under what conditions that could occur.
Lord Skelmersdale: This is an issue which occurs in practically every Bill which comes before your Lordships, albeit in not quite such a form. I remember in the past having voted on such Bills as the Bees Bill to turn "may" into "shall", and I am sure we shall be doing the same sort of thing again.
Clause 15(1) provides that the Secretary of State "may if he thinks fit" make a contribution towards expenditure incurred by local authorities under the Bill. The noble Lord has expressed concern that this contribution should not be left to the discretion of the Secretary of State but should be mandatory; and this of course is the effect of the amendment, as he said.
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I have already explained to the noble Lord outside the Chamber, and I am happy to do so today, that Clause 15(1) is drafted in the form of a discretionary power, but this is the customary form of such provisions. The drafting is based on Section 78(1) of the Housing Act 1974, which I need hardly remind the Committee was enacted by a Labour Government and which gives the Secretary of State power to contribute towards expenditure by local authorities in making grants under Part VII of that Act. Indeed, in response to an earlier amendment, I mentioned that same Part VII.
I am happy to give the noble Lord the assurance I believe he is seeking from the Government this evening, namely, that it is the Government's firm intention that the Secretary of State should make contributions under Clause 15 towards expenditure incurred by local authorities under the Bill. In view of this, I hope the noble Lord will be able to see his way to withdrawing the amendment.
Lord Graham of Edmonton: I am most grateful to the noble Lord. I picked up very carefully that it is the Government's "firm intention", and I understand that the noble Lord is unable to accept the amendment because it changes the very nature of the commitment from being discretionary. But in effect the Minister has defined "discretionary" in such a way that I am sure those outside the Committee will understand that there will be very rare exceptions, if any at all, under which an exception would be involved. I am not putting words into the Minister's mouth; I am using those words myself. I am very happy indeed to accept the reassurance that the noble Lord gives, that the fears which have been expressed to me may very well be groundless. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Skelmersdale Lord Skelmersdale moved Amendment No. 29:
[Printed earlier: col. 1447.]
On Question, amendment agreed to.
[Amendment No. 30 not moved.]
Lord Skelmersdale Lord Skelmersdale moved Amendments Nos. 31 to 33.
[Printed earlier: col. 1447.]
On Question, amendments agreed to.
10.25 p.m.
Lord Skelmersdale Lord Skelmersdale moved Amendment No. 34:
Page 19, line 19, leave out ("and")
The noble Lord said: In moving this amendment, I think it would be appropriate if I confessed to a sin. I am frequently asking your Lordships not to ask me to pre-empt decisions and discussions that are being made by my colleagues in Government, and I regret that inadvertently I have pre-empted remarks which may or may not be made by the noble Lord, Lord Graham, and indeed by my noble friend Lord Sandford. In speaking to this amendment I think it would be appropriate if I spoke also to Government Amendments Nos. 35, 36, 38, 39 and 40.
Amendment No. 35: Page 19, line 20, after ("repurchase") insert ("or of any payment under section (purchase of certain land by authority possessing compulsory purchase powers) of this Act, being a case in which there has at any time been a disposal of a relevant interest in the defective dwelling concerned by the housing authority or any authority being their predecessor")
Amendment No. 36: Page 19, line 20, at end insert— ("and
(c) in any other case of repurchase or payment under that section, 100 per cent.
Amendment No. 38: Page 19, line 21, leave out ("either case") and insert ("any of those cases")
Amendment No. 39: Page 19, line 23, leave out ("or any class of assistance") and insert ("or payments, or any class of assistance or payments")
Amendment No. 40: Page 19, line 24, after ("given") insert ("or made")
I also think it would be helpful to the Committee if, with this group, we could discuss Amendments Nos. 44 and 46, standing in the name of the noble Lord, Lord Graham of Edmonton.
Amendment No. 44: Page 19, line 43, leave out from ("Act") to the end of line 5 on page 20.
Amendment No. 46: Page 20, line 5, at end insert— ("and
() in the case of repurchase of dwellings owned previously by a public sector authority, not being the present housing authority or predecessor to that authority, the price paid for the acquisition of the interest concerned, together with any amount reimbursed under section 9 of this Act.")
All these amendments are concerned with the operation of the percentage of expenditure incurred by local authorities to be met by the Exchequer under Clause 15.
As I have said, I do not wish to anticipate what noble Lords may wish to say in speaking to their amendments, but I would hope that they might see their way not to move them, in the light of what the Government amendments propose.
Under Clause 15, subsection (5) limits, the Exchequer contribution to local authorities' expenditure in cases of repurchase would be a contribution equal to 75 per cent. of the price paid to the owner, less the defect value of the dwelling repurchased. The amendments tabled by noble Lords opposite seek to remove the defective value of the dwelling repurchased from the calculation of the Exchequer contribution: in other words, they seek to make that contribution 75 per cent. of the amount paid to the owner.
The first Opposition amendment, No. 44, would apply to all cases of repurchase and the second amendment only to repurchases of dwellings not sold originally by the housing authority: for instance, a house originally provided and sold by the National Coal Board.
The Government cannot accept these amendments. In both cases they ignore the fact that the housing authority will be acquiring an asset worth the defective value of the dwelling they repurchased. While that asset is retained, it will usually be capable of gaining rent without anything having to be spent on it for some years. It is right, therefore, that that value and stream of income should be taken into account in deciding the appropriate scale of the contribution by the taxpayer.
I would also remind the Committee that where the housing authority originally sold the dwelling, they
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will often have received a capital receipt from the sale. We do accept, however, that this will not have happened in those cases where they are purchasing dwellings originally sold by another public sector body. I quoted earlier the example of a National Coal Board house.
We feel that a strong case was put to me on Second Reading and subsequently followed up in discussions between myself, the noble Lord, Lord Graham, and representatives of the Association of Metropolitan Authorities and the Association of District Councils. We feel that this has great merit. The Government amendments have been brought forward in the light of those discussions. They provide that, where housing authorities are obliged under the Bill to repurchase a dwelling which was originally sold by another public sector body, the Exchequer contribution under Clause 15 will be 100 per cent. of the difference between the amount paid to the owner and the defective value of the dwelling repurchased.
I think the Government have gone some considerable way towards meeting the concern of local authorities in this matter, and I hope that noble Lords will recognise that where the local authorities put up a genuine and reasoned case they will be listened to. I hope that noble Lords opposite will agree that we have taken a reasonable attitude and, as I have suggested, will not move the amendments tabled in their names. But I shall be most interested to hear their reactions to what I have just said in moving my amendment.
Lord Sandford: Before the noble Lord, Lord Graham, indicates what he wishes to do with his amendment, may I say, on behalf of the Association of District Councils, that we welcome the Government's recognition of the special case that arises where the local authority is having to deal with houses which were provided in the first place by other public bodies such as the National Coal Board, the Atomic Energy Authority and so on?
In those cases, there really is no case for the local authority having to meet any part of the cost, and I was glad that my noble friend did not claim to have gone all the way to meet us, because if he had done so he would also have accepted the case that there is for the local authority being paid a fee for dealing with these particular houses. There are cases, in mining towns in particular, where these properties, which were provided in the first instance by the Coal Board, have to be dealt with quickly, because this is an urgent matter in the case of private owners. They cannot be part of the local authority's planned expenditure, because the houses have nothing to do with their housing stock. They have to be dealt with while there are other houses designated as defective, and therefore felt by their tenants to be defective, which cannot be dealt with because the authority is acting as agent in respect of these houses provided by other public authorities. I am sorry that my noble friend was not able to go that far, because this still leaves the housing authorities with something of a problem. But he has met the main point, which is that there should be 100 per cent. grant in these cases, and we are grateful to him for that.
Lord Graham of Edmonton: I want to say immediately that I fully share the satisfaction of the noble Lord, Lord Sandford, with the manner in which the Minister and his colleagues have sought to go a considerable way on this aspect of the Bill. I think it has been done genuinely, on the basis of looking at the special inequity that would flow to authorities who, through no fault of their own—not having bought the houses, and not having had any capital receipts—are faced with what we consider to be some of the liabilities.
I am very grateful to the Minister for Housing himself, who took a special interest in this matter and who arranged for very fruitful discussions to take place with the Association of District Councils and the Association of Metropolitan Authorities, together with the Minister and myself. The outcome of those discussions was the move towards the present situation. When I look at the authorities which are likely to be assisted, I see that some will be assisted considerably. For example, when I look at the document which was issued by the department last November (the blue book) I see, so far as the known extent of the problem is concerned, under the heading "Owned by other Public Bodies" that in Leeds there are 210, in Rotherham 361, in Wakefield 230, in Mansfield 144, in Colchester 130, and in Huntingdon 462. There are other statistics which clearly indicate that some authorities will be substantially benefited by the movement that the Minister has made.
Therefore I am not inclined to be churlish—I am certainly not churlish at any time—or to be dog in the mangerish about some other matters for which we should have liked to see some easement. The Minister has satisfied many people, not least the authorities and the councils that they represent. Certainly, he has assisted the passage of the Bill and therefore we are very pleased indeed not to move our amendments. So we are very grateful to the Minister for the action he has taken.
Lord Skelmersdale: I am most grateful to both noble Lords. I am reminded of Pooh, who always wanted more honey, of Oliver Twist, who asked for more, and of the young girl who went home and assured her mother that she had not gone all the way. So far as a fee to local authorities is concerned, which was raised by my noble friend Lord Sandford, this would involve a precedent which I have a feeling local authorities themselves would not like in other parts of their relationship between local and central government. So it might be appropriate at this moment if we left the discussion there.
On Question, amendment agreed to.
Lord Skelmersdale Lord Skelmersdale moved Amendments Nos. 35 and 36:
[Printed above.]
On Question, amendments agreed to.
10.35 p.m.
Lord Graham of Edmonton Lord Graham of Edmonton moved Amendment No. 37:
Page 19, line 21, leave out ("other") and insert ("higher").
The noble Lord said: If the Minister can reassure us on this matter, we shall be happy to withdraw the amendment. We are talking in terms of the percentages which are applicable and are saying that page 19, line 21, of the Bill should read:
"or such higher percentage as (in either case) the Secretary of State may with the consent of the Treasury by order specify".
We are uncertain about the percentages which will be engraved upon the hearts of borough treasurers and individuals who seek advice and guidance. If there is no intention to reduce the figure, we are saying that if there is a variation it can only be increased. In times of financial stringency, or for any other reason, we should not want there to be a watering down or a dilution of the benefit which appears on the face of the Bill. I beg to move.
Lord Skelmersdale: I have already given half of the assurance for which the noble Lord was looking on a previous amendment. I can assure the Committee that the Government have no intention of reducing the percentage contribution from that stated on the face of the Bill.
Lord Graham of Edmonton: With that assurance—which I accept is very fair and clear—I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Skelmersdale Lord Skelmersdale moved Amendments Nos. 38 to 40:
[Printed above.]
The noble Lord said: I beg to move Amendments Nos. 38, 39 and 40 which were spoken to with Amendment No. 34.
On Question, amendments agreed to.
Lord Skelmersdale Lord Skelmersdale moved Amendment No. 41:
[Printed earlier: col. 1447.]
On Question, amendment agreed to.
Lord Graham of Edmonton Lord Graham of Edmonton moved Amendment No. 42:
Page 19, line 30, at end insert ("provided that such provision is at all times higher than that described in subsection (3) above")
The noble Lord said: I beg to move Amendment No. 42 which gives to the Minister the opportunity to repeat the assurance which he gave on Amendment No. 37: that there is no intention to do other than give effect to what appears on the face of the Bill. I should like to hear the Minister say that again, because the words are lovely‡
Lord Skelmersdale: To save time, perhaps I might say "Ditto".
Lord Graham of Edmonton: I beg to leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Skelmersdale Lord Skelmersdale moved Amendment No. 43:
[Printed earlier: col. 1447.]
The noble Lord said: I spoke to this amendment with Amendment No. 12. I beg to move.
On Question, amendment agreed to.
[Amendment No. 44 not moved.]
Lord Skelmersdale Lord Skelmersdale moved Amendment No. 45:
[Printed earlier.]
The noble Lord said: I spoke to this amendment with Amendment No. 12. I beg to move.
On Question, amendment agreed to.
[Amendment No. 46 not moved.]
Lord Graham of Edmonton Lord Graham of Edmonton had given notice of his intention to move Amendment No. 47:
Page 20, line 5, at end insert—
("and
() in all cases of repurchase, the cost incurred by the housing authority in rectifying the qualifying defects and associated works; the costs incurred in design, supervision and administration; and all other reasonable costs.")
The noble Lord said: In rising to say that I do not intend to move this amendment, I should point out that this is part of the HIP allocation syndrome. We are saying that councils should have reimbursed to them the cost of repairs after repurchase. However, the Minister has satisfied me that the intention is to make provision for this, and that the money required for the purpose will be taken into account when the HIP allocations are made. All I wish the Minister to do is to raise his eyes and nod his head. He has done so and the record will show that the Minister has indicated that my understanding is at one with his.
[Amendment No. 47 not moved.]
Lord Graham of Edmonton Lord Graham of Edmonton had given notice of his intention to move Amendment No. 48:
Page 20, line 16, at end insert ("save that for the avoidance of doubt it is hereby declared that payment by the Secretary of State under this section shall be payable notwithstanding that the Housing Revenue Account of the recipient authority is not in deficit.")
The noble Lord said: This amendment is on a par with the earlier amendments. Therefore I do not intend to move it.
[Amendment No. 48 not moved.]
Clause 15, as amended, agreed to.
Clause 16 agreed to.
Lord Skelmersdale Lord Skelmersdale moved Amendment No. 49:
[Printed earlier: col. 1439.]
The noble Lord said: I spoke to this amendment with Amendment No. 6. I beg to move.
On Question, amendment agreed to.
Clause 17 [Rules and orders:]:
Lord Skelmersdale Lord Skelmersdale moved Amendment No. 50:
[Printed earlier: col. 1439.]
On Question, amendment agreed to.
Lord Skelmersdale Lord Skelmersdale moved Amendment No. 51:
[Printed earlier: col. 1442.]
On Question, amendment agreed to.
Lord Skelmersdale Lord Skelmersdale moved Amendment No. 52:
[Printed earlier: col. 1439.]
On Question, amendment agreed to.
Clause 17, as amended, agreed to.
Clause 18 [Expenses]:
Lord Stallard Lord Stallard moved Amendment No. 53:
Page 21, line 15, at end insert ("and the expenses incurred by the Secretary of State under this Act and any increase attributable to this Act shall be in addition to the Housing Investment programme allocation made available to local authorities for 1984–85 and additional to the published expenditure plans for future years").
The noble Lord said: Notwithstanding the atmosphere that has prevailed for the past few minutes, I think that I ought to move this amendment, however briefly, in the hope that the noble Lord the Minister will repeat some of the assurances he has already given us. In moving this amendment it is appreciated that it can never be certain that any monies made available through the housing investment programme are genuinely additional.
However, the clause as it is worded gives us no assurance whatsoever that the money incurred by this Act will in any way be additional. Indeed, on the investment programme allocations for 1984–5, and those proposed for future years, the Government have continued to cut the housing capital programme, and the money provided for defective dwellings is simply having to be made available by local authorities from the expenditure which would have gone on other heads. We have already mentioned a number of these aspects in previous amendments. Unless additional resources are made available therefore other areas of housing activity will suffer. Bearing in mind that housing investment programmes have already been cut by the present administration by 45 per cent. since 1979 in real terms local authorities are simply unable to cope with any additional responsibilities without additional resources.
We know already that new housebuilding has suffered and suffered quite dramatically in many areas. Council repair programmes have been sadly neglected and the results of this can be seen in any inner city; and certainly in London. Great areas in London stand neglected because of this. In the present 1984–5 HIP negotiations I understand that the Government have shown a willingness to redistribute resources between authorities, and that is completely different to giving additional monies. As I understand the situation, it is simply a redistribution of the existing monies between local authorities.
But the Association of Municipal Authorities have found in their discussions with local authorities that authorities with known large defects problems have actually received a decrease in allocations. In other words, this redistribution has resulted in some authorities with huge problems receiving less in their HIP allocation than they are entitled to. Our purpose therefore in moving this amendment is to ensure that not just a redistribution takes place but more additional resources outside the existing framework is necessary if local authorities are going to have to take on the extra duties and burdens provided for in this Bill. I beg to move.
Lord Skelmersdale: There is really very little, if anything, that I can add on housing investment

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programme allocations and the local authorities' expenditure which has not been said before. What I think I can say is that I am horrified—and I am sure the noble Lord, Lord Sandford, who regrettably has left the Committee—by the suggestion—I think it was originally from the noble Lord, Lord Graham—that there should be divisions into sections of the global HIP. I cannot believe that any sane local authority would want this because it would mean that they were not able to transfer the money to where they very properly feel it needs to be used in their own area after the HIP allocation has been given to them.
I do not believe that this is appropriate. If I was the Minister for Housing—noble Lords will welcome the fact that I am not, and I rather think that I might join them—then I should say that this was a non-starter. When there is something that I can add to what I have said on HIPs—not just in respect of this matter but generally—then either I or my noble friend Lord Bellwin will come to the House and tell your Lordships.
Viscount Hanworth: There is only one thing that can be said about this. It seems that the Government are introducing legislation—the Housing and Building Control Bill was another instance—which requires extra expenditure, all of which presumably comes out of the same Vote in the end, without any guarantee that this Vote will be increased. One must point this out again and again and again.
Lord Graham of Edmonton: May I respond to what may very well have been a misunderstanding arising from my earlier remarks? When the HIP allocation is made, the Ministry (which means the officials) need to be satisfied what it is that the bid is designed to meet. There may be a bid of £10 million, for instance. They will need to ask, "What do you intend to spend the money on?" The council may reply that it has a problem with three big council estates which need completely rewiring, and that together with work on two other estates, £6 million is needed for that. The council may also have a need to take account of other repairs and to build certain houses. In this instance, the council may need to take account of the fact that it has so many houses which are defective. The council may need £15 million for those purposes. In addition, it may need to make allowance for improvement grants.
One of the problems in Birmingham which I well recognise is that there is an enormous backlog of improvement grant demands. When the council in Birmingham calculates its needs, it has to ask, "How do we satisfy the needs of a growing list of people who want legitimately to tap a legal source of public funds to improve their houses?" One of the problems which Birmingham will have to face is that there will be an additional head under which to start to built up the council's case for the global sum involved.
The Ministry then has to make a decision in the light of its overall restrictions. It will say, "Here is an authority that needs £15 million and which has a case for £15 million. But we are going to allocate £9 million because that is fair in our view". What I am really saying is that of course it is right that the Ministry do not have to allocate that sum and say that £4 million
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is for one purpose and £3 million is for another. An authority is free to exercise virement across the board. It has the £9 million and can spend it all on one of its needs rather than on another. But we are saying that the authority needs to be satisfied that there is a sum of money which has been clearly given, and which is understood by both the authority and the Ministry as being designed to meet this additional burden.
Having said that, a local authority might very well decide that it was not going to meet its commitment under a certain head because, as I believe the Minister said, no one has an absolute right to insist that the authority shall give them a reinstatement grant, et cetera. All we are saying is that the Minister should take on board the problem that an authority which wishes to meet all its obligations has; that there will be a further problem in addition to all the problems it has now.
Lord Skelmersdale: Yes, but what I was saying was that if the local authorities go too far along that road, as the balance, if one likes, there will have to be a direction from central government that the local authority will at the end of the day spend that money on those particular projects. It is that which I suggest is not in the interests of local authorities. But I take the point that the noble Lord has made.
Lord Stallard: I have listened to the Minister. We have repeated in a number of the amendments the question of the HIP allocations. I do not doubt that we shall return to that at a later stage of the Bill. I think that it represents one of the two most controversial elements—the discriminatory nature and partiality of the Bill and the lack of adequate resources. The noble Viscount, Lord Hanworth, underlined that fact perfectly well. The Government seem intent on introducing new measures at a time when local authorities are probably suffering the most stringent financial controls that they have ever suffered. We have listed the restrictions, cuts and restraints on local authority expenditure. As I have said, I have no doubt that we shall return to this issue at later stages of the Bill. For the time being, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 18 agreed to.
Clause 19 agreed to.
Clause 20 [General interpretation]:
Lord Skelmersdale Lord Skelmersdale moved Amendment No. 54:
[[Printed earlier: col. 1445.]
On Question, amendment agreed to.
Clause 20, as amended, agreed to.
Clause 21 agreed to.
Clause 22 [Short title, commencement and extent]:
Lord Graham of Edmonton Lord Graham of Edmonton moved Amendment No. 55:
Page 26, line 40, after ("appoint") insert ("but not earlier than 1st April 1985").
The noble Lord said: This amendment may well have been overtaken by earlier amendments and particularly the concession that the Minister has given

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us, for which again I express our appreciation. In this amendment we are concerned to try to rationalise the period that the authority will need before beginning operations. For instance, an allowance cannot possibly be built into the HIP allocation for the current year to take account of that. The Bill will go from this place to another place, and then receive Royal Assent. One assumes that within a matter of weeks after that it will be enacted; the appropriate orders will begin to flow, and then the moneys to be made available by central government and the local authority will need to be found.
We seek to make the Bill effective from 1st April next year, when an HIP year begins. If the Minister can tell us that, if the Bill comes into operation before that, there is a mechanism built-in, if not retrospective, at least for next year's allocations, to make provision to meet the financial obligations, I am sure that that will satisfy those outside who asked me to put forward the amendment. I beg to move.
Lord Skelmersdale: I can tell the noble Lord that the first alterations that may be necessary to HIPs are already under discussion. Indeed, the few dwellings that will be involved in the remaining months up to 1st April have already been taken into account in setting this year's HIPs, so we are in advance of the situation that he warns us of.
Further than that, as I have said again and again, the real point of the Bill is to help poor, unfortunate people who are in this position through absolutely no fault of their own. The sooner that we can get it onto the statute book, the sooner they will be helped.
Lord Graham of Edmonton: I appreciate that. When a local authority asks me where it is to get the money from. I shall answer, "You have already had it." If it was built into this year's HIP and it was possible to forecast the extent to which it was needed then, in effect, local authorities have already had in this year's HIP a notional figure based on a hypothesis. Let us hope it was right. In that circumstance there is no need for this amendment. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 22 agreed to.
Schedule 1 agreed to.
Schedule 2 [Repurchase]:
10.56 p.m.
Lord Stallard Lord Stallard moved Amendment No. 56:
Page 28, line 32, at end insert (", less the discount given against the price paid upon disposal of the dwelling by the housing authority or other public sector authority concerned.")
The noble Lord said: It appears that the amendment as printed on the Marshalled List contains a typographical error in that the word "than" after "less" should not be there. In other words, the amendment should read:
"less the discount given against the price paid upon disposal of the dwelling by the housing authority or other public sector authority concerned".
The word "than" should not be in the amendment, as it gives it totally the opposite meaning.
I think the purpose of the amendment is reasonably obvious. We say that the discount should be repaid. It was given in the first instance to encourage tenants into owner-occupation and if they return to rented premises, the discount should be returned. It seems perfectly reasonable to suggest that.
The cost-flow provisions of the Housing Act 1980 and the second discount entitlement provisions of the Housing and Building Control Act 1984 are not adequate protection against financial exploitation, particularly if the dwelling is repurchased in the future by another member of the household. We shall develop that point in a number of other discussions.
We suggest, too, that if the amendment is successful—and I hope the Minister will accept it—perhaps the Minister himself might move a further amendment to allow a tenant a completely new and unfettered discount in the fresh circumstances on any new or subsequent purchase. I would also point out that this amendment will give an incentive to the present owner to buy another house and remain in owner-occupation, rather than exercise his easy option of becoming again a tenant paying rent. For those obvious reasons, I beg to move.
Lord Skelmersdale: I must say I am rather surprised by the amendment moved by the noble Lord, Lord Stallard. It is so uncharacteristic of him. It is sniping at a small section of those people who have exercised their right to buy which has been given to them after, I should be the first to admit, quite a struggle in debates in Parliament on two occasions—in 1980 and again this year.
What the noble Lord is seeking to do is to disadvantage the ex-owner of the defective house which is repurchased by the local authority at the expense of another owner who is very much better off and who can sell his non-defective house, which he has bought under the right to buy, on the open market and then apply to become a tenant again. Obviously he will not go into a high position on the council waiting list, but there is no earthly reason why he should not get on to the council's waiting list and start the process again, if that is his wish. In this I think that the noble Lord's amendment is, as I said, disadvantaging the ex-owner of a defective house as against somebody in the open market. I do not think that is what the noble Lord intended.
Lord Stallard: I certainly had no intention of sniping. That is not our intention, but I take the point the Minister makes. In the amendment that I shall be moving in a few seconds' time, the motive will perhaps be clearer. In the meantime, I beg leave to withdraw this amendment.
Amendment, by leave, withdrawn.
Lord Skelmersdale Lord Skelmersdale moved Amendment No. 57:
[Printed earlier: col. 1448.]
On Question, amendment agreed to.
Lord Stallard Lord Stallard moved Amendment No. 58:
Page 29, line 22, at end insert—
("(f) that a reduction in value be made where, in accordance with section 2(3)(c) of this Act, the price for disposal took some account of the presence, or latent presence, of the qualifying defect.")
The noble Lord said: This is a slightly different argument. I am sure that the noble Lord the Minister will notice the difference without my making a long speech. Where the original disposal has taken some account—even though it may not be adequate—of the defective nature of the type of dwelling, that part should be reimbursed. This is a fairly straightforward amendment. If the price was reduced to some extent by the public sector authority because of the defects, the value upon repurchase should be reduced by a commensurate amount. I beg to move.
Lord Skelmersdale: As the noble Lord explained, although not quite so specifically as I shall, Clause 2(3)(c) provides that one of the conditions of eligibility is that the price paid by the owner should not have taken any, or any adequate, account of the defect. It is theoretically possible that an owner will be eligible for assistance and that the price paid by him took some account of the defect. I say "theoretically" because I think that that is so rare a possibility that one can for all practical purposes discount it.
The condition in Clause (2)(3)(b) provides that the owner must have been unaware of the defect when he purchased the dwelling. If he knew of the defect he is not eligible, so I see no scope for abuse of the provision. We have, however, included the provision in Clause 2(3) (c) to cater for the possibility that the price may have been agreed at a level which reflected, to some extent, the existence of, perhaps, what was considered to be superficial damage but in reality has emerged to be a serious structural fault that we have been talking about throughout our consideration of the Bill. The reduction in purchase price would obviously be totally inadequate to deal with that major defect. Obviously, in such cases, it would be right to reduce the repurchase value under the Bill.
I think that we have covered, albeit in a slightly different way, the point that on this occasion has been worrying the noble Lord. I hope that in those circumstances he will feel able to withdraw the amendment.
Lord Stallard: I am grateful to the noble Lord for that reply. When he says that these will be exceedingly rare circumstances and, therefore for that reason he cannot accept the amendment, I would have thought that if they are to be that rare he could equally accept it. I am prepared to read what he says and take advice on it because he has covered different ground. Perhaps we shall then come back to the matter at the next stage. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Skelmersdale Lord Skelmersdale moved Amendment No. 59:
[Printed earlier: col. 1445.]
On Question, amendment agreed to.
Lord Stallard Lord Stallard moved Amendment No. 60:
Page 31, line 1, leave out paragraphs 5 to 9.
The noble Lord said: This part of the schedule—the start of the word "schedule" would be pronounced as
1466
"sk" where I come from, but that is another matter—runs entirely contrary to all established practice and imposes an unacceptable obligation on local authorities to discharge all existing charges that would have been created by the private owner. All of us know the existing situation and that local authorities have never been expected to accept this burden previously.
In normal circumstances, when a purchaser is buying a house, it is up to the existing owner to discharge his responsibilities for mortgages, legal expenses and so on, whereas this Bill expects local authorities to take such responsibility. While the owner would retain a personal liability, the local authority would have to pursue this against him without any security at all. This runs contrary to all existing practices and procedures that have lasted for a long time. With those few remarks, I hope that the noble Lord the Minister will be able to accept our proposal. I beg to move.
Lord Skelmersdale: The noble Lord, at the last moment of tonight's Committee stage, has hit upon a very complicated problem. I hope therefore that he will not mind if I spend a little time on my answer. The purpose of Part II of Schedule 2 is to ensure that an interest in land acquired by an appropriate authority is unencumbered by any charge—typically a mortgage—to which that interest was subject immediately before its acquisition. Many of the dwellings acquired in pursuance of Clause 6 will be mortgaged. Some bought under the right to buy will also be subject to a charge to secure the repayment of discount. Where an interest in land subject to a mortgage or other charge is being sold, there are two possibilities: either the mortgagee or the chargee can release that interest from the charge, on payment of the sum due, before the sale takes place, or the interest passes to the new owner subject to the mortgage or charge which binds the interest in the hands of the new owner.
Further, where an interest in a defective dwelling is acquired in pursuance of Clause 6, it could as a result of various actions by the owner he mortgaged for an amount which exceeds the price payable under Part I of Schedule 2. In such a case the mortgagee or chargee—or more than one of them if there are several charges—may not on the sale be able to recover all the money owed to him. The purpose of Part II of the schedule is to ensure that a mortgagee cannot prevent or delay an acquisition in pursuance of Clause 6, that an interest in land acquired under Clause 6 is free of any such charge in the hands of the appropriate authority, and that the purchase price is applied in paying off the charges according to their priority.
It is possible that, where a mortgage or charge is discharged by virtue of these provisions, a mortgagee will find that the interest in land is discharged from his interest and that he receives less than the sum due under the mortgage. However, the mortgagee will have received more money than he could have expected had he exercised his power of sale; and, indeed, more money would be available for the redemption of charges than the security is actually worth. Even after the charge on the interest in land has been discharged, the mortgagee would still have an action to recover the debt against the mortgagor on his contract.

1467
In a conventional sale of a dwelling-house under English law the mortgagee is represented when the transaction is completed, and on payment of the sum due to him he releases his charge on the land. Nothing in Schedule 2 will prevent this happening where agreement can be reached. Paragraph 8 of the schedule preserves the position in this respect.
Paragraph 6 of Schedule 2 secures the discharge of an interest from a relevant charge. Paragraph 7 ensures that the purchase price is paid to the mortgagees for the purpose of redeeming the charges rather than to the mortgagor, so the mortgagor cannot simply disappear with the money; and if the authority do not either apply the money in redeeming the charges or pay it into court under paragraph 9, the charge on the land is not discharged. The effect of paragraph 8 has already been described. Paragraph 9 deals with the case where it is difficult to ascertain how much is payable, or to whom, in relation to any charge; in such a case the money or part of it may be paid into court.
These provisions are complicated, as I said, but I hope the Committee will agree that the policy is desirable and that they do justice in a case where there may not be enough money to go round. The provisions are not unprecedented—surprise, surprise‡ There are similar provisions in the Leasehold Reform Act 1967 relating to the discharge of charges on the landlord's interest.
Part II does not apply to Scotland. Instead, Clause 7(3) requires that the seller offers a good and marketable title to the defective dwelling. This is the normal conveyancing position in Scotland and it is not necessary to devise similar provisions for Scotland.
I do not possibly expect noble Lords opposite to take a decision tonight on this matter, but I hope they will read very carefully what I have said; and, if necessary, I shall come back to them in correspondence.
Lord Stallard: I am grateful to the noble Lord the Minister for that explanation. He will not be surprised if I say that I expected him to say that. I daresay that all noble Lords present will have understood completely and totally the burden of his reply. Certainly we will read with great care what the Minister has said; and no doubt, as he will accept, we will return to this at later stages of the Bill. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Schedule 2, as amended, agreed to.
Lord Skelmersdale Lord Skelmersdale moved Amendment No. 61:
[Printed earlier: col. 1448.]
The noble Lord said: I spoke to this amendment with Amendment No. 14. I beg to move.
On Question, amendment agreed to.
Schedule 3 agreed to.
House resumed: Bill reported with the amendments.

Dartford Tunnel Bill [H.L.]
Returned from the Commons with amendments; the amendments considered and agreed to.

Shrewsbury and Atcham Borough Council Bill [H.L.]
Returned from the Commons with amendments; the amendments considered and agreed to.
House adjourned at ten minutes past eleven o'clock.

  IMMIGRATION AND NATIONALITY DEPARTMENT
  IMMIGRATION AND NATIONALITY DEPARTMENT
  PRISONS: CONTROL REVIEW COMMITTEE REPORT
  PRISONS: CONTROL REVIEW COMMITTEE REPORT
  PRISONER No. B27158
  PRISONER No. B27158
  CORONARY ARTERY BY-PASS SURGERY: COST
  CORONARY ARTERY BY-PASS SURGERY: COST
  GAS AND ELECTRICITY RETAIL AND SERVICE ORGANISATIONS: PRIVATISATION
  GAS AND ELECTRICITY RETAIL AND SERVICE ORGANISATIONS: PRIVATISATION
  MR. IAN MACGREGOR
  MR. IAN MACGREGOR
  INTERNATIONAL YEAR OF PEACE (1986)
  INTERNATIONAL YEAR OF PEACE (1986)
  BRITISH CITIZENS OF VOTING AGE RESIDENT IN OTHER EEC COUNTRIES
  BRITISH CITIZENS OF VOTING AGE RESIDENT IN OTHER EEC COUNTRIES
  UNESCO: CORRESPONDENCE
  UNESCO: CORRESPONDENCE
  HELSINKI FINAL ACT: IMPLEMENTATION
  HELSINKI FINAL ACT: IMPLEMENTATION
  CONFIDENCE AND SECURITY-BUILDING MEASURES
  CONFIDENCE AND SECURITY-BUILDING MEASURES
  CO-OPERATION IN THE FIELD OF ECONOMICS, OF SCIENCE AND TECHNOLOGY AND OF THE ENVIRONMENT (BASKET II)
  CO-OPERATION IN THE FIELD OF ECONOMICS, OF SCIENCE AND TECHNOLOGY AND OF THE ENVIRONMENT (BASKET II)
  CO-OPERATION IN HUMANITARIAN AND OTHER FIELDS (BASKET III)
  CO-OPERATION IN HUMANITARIAN AND OTHER FIELDS (BASKET III)
  CO-OPERATION AND EXCHANGES IN THE FIELD OF CULTURE AND EDUCATION
  CO-OPERATION AND EXCHANGES IN THE FIELD OF CULTURE AND EDUCATION
  TRADE UNIONS: ANNUAL RETURNS
  TRADE UNIONS: ANNUAL RETURNS