Sitting of 20 July 1984

Preamble
The House met at half-past Nine o'clock
PRAYERS
[MR. SPEAKER in the Chair]
PRAYERS
  PETITIONS

    Health and Social Security Bill
    9.34 am
    Mr. George Foulkes: It is a great pleasure for me, Mr. Speaker, as joint chairman of the all-party pensioners' association in the House, to present a petition signed by Mr. George Dunn, the general secretary of the National Federation of Old Age Pensioners' Associations, together with nearly 74,000 signatures of members of the national federation. They are concerned at the threat to the eyesight, health and pockets of pensioners posed by the provisions of the Health and Social Security Bill, under which many old people will for the first time have to pay the full cost of spectacles. Many will have to resort to the old practice of trying to get their spectacles on the counter at Woolworth's. They feel that by the provisions of the Bill we are moving back towards the Victorian age.
    The petition concludes:
    Wherefore your petitioners pray that the Health and Social Security Bill, Clause 1, be amended to prevent a potential deterioration in standards of health care.
    And your Petitioners as in duty bound will ever pray etc.
    To lie upon the Table.

Housing Investment Programme (Birmingham)
9.36 am
Mr. Terry Davis: I wish, Mr. Speaker, to present a petition which has been signed by 380 people. Each person is a householder, and therefore I am presenting a petition on behalf of 380 families.
The people concerned live in three housing action areas which are known as the Berry housing action area, the Chartist housing action area and the Membury housing action area in my constituency.
In their petition, my constituents express their concern about the deterioration in the environment of the housing action areas. They also express their concern about the inability of the city of Birmingham council to provide the funds which are needed for essential work to be done on the homes of people who live in those housing action areas.
The petition concludes:
Wherefore your Petitioners pray that Honourable Members of the House of Commons should ask the Secretary of State for the Environment that he should increase the Housing Investment Programme of the City of Binningham Council to make it possible for this work to be done.
And your Petitioners, as in duty bound, will ever pray etc.
To lie upon the Table.

Office, Secretarial and Research Allowance
Mr. Speaker: May I say a brief word to the House about the form of today's debate? Under the business motion agreed by the House last Wednesday, the Questions on items 1, 2 and 3 on today's Order Paper, and

That, in the opinion of this House, the limit on the allowance payable to a Member of this House in respect of the aggregate expenses incurred by him for his Parliamentary duties as general office expenses, on secretarial assistance and on research assistance should be determined as follows—

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(a) for the year ending with 31st March 1985, the limit should be the amount obtained by increasing £12,000 by four-fifths of the relevant percentage,

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(b) for any subsequent year the limit should be the amount obtained by increasing the limit applicable to the immediately preceding year by the relevant.percentage (so that, if the relevant percentage for any year is nil, the limit remains the same for that year), and for the purposes of this paragraph the limit applicable to the year ending with 31st March 1985 shall be taken to be what it would have been if in paragraph (a) above the words 'four-fifths of' had been omitted.

In this Resolution 'year' means a year ending with 31st March, and for the purposes of this Resolution—

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(i) the relevant percentage for any year is the percentage by which the amount of salary (exclusive of allowances and overtime) payable for that year to a person in the Home Civil Service at the maximum point on the scale for Senior Personal Secretaries and in receipt of inner London weighting exceeds the corresponding amount for the immediately preceding year;

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(ii) any fraction of a pound in the amount obtained under paragraph (a) or (b) above for any year shall be treated as whole pound if it is not less than 50 pence, but shall otherwise be disregarded.

As you have said, Mr. Speaker, the following motions are to be debated at the same time:

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That, in the opinion of this House, the following provision should be made with respect to the rates of the car mileage allowance payable to Members travelling on Parliamentary duties and the rates applicable to the car mileage allowances payable in respect of journeys by the spouse of a Member and journeys by persons in respect of whom the 5 secretarial and research allowance of a Member is payable—

(1) The allowance payable in respect of a journey commenced in the period beginning with 1st October 1984 and ending with 31st March 1985 shall be payable—

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(a) subject to the limit specified in paragraph (3) below, at the rate per mile shown in column 2 of the following Table in relation to the engine capacity of the vehicle used for the journey; and

(b) in respect of miles in excess of that limit, at the rate per mile shown in column 3 of that Table in relation to that engine capacity.

TABLE

Engine capacity

Mileage up to Limit

Further mileage

15

1300cc or less

18p

11·3p

More than 1300cc and not more than 2300cc

25·9p

14·7p

More than 2300cc

39p

19·5p

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(2) Paragraph (1) above shall have effect in relation to journeys commenced in the year beginning with 1st April 1985 and each subsequent year with the substitution, for the rates shown in the Table, of rates calculated, on the principles exemplified in Appendix I to the Report of the Independent Inquiry, from the figures in the edition of the Royal Automobile Club's Schedule of Estimated Vehicle Running Costs published in or about the April of the year in question.

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(3) For the purpose of this Resolution the limit on the number of miles in respect of which car mileage allowance may be paid at the rate specified in column 2 of the Table shall be 10,000 miles for the period beginning with 1st October 1984 and ending with 31st March 1985 and 20,000 miles for the year beginning with 1st April 1985 and for each subsequent year.

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(4) Arrangements shall be made for ensuring that claims made for car mileage allowance in respect of miles travelled in excess of 25,000 miles in any year are supported by particulars of the journeys to which the claims relate.

(5) In this Resolution—

on the selected amendments thereto, have to be put after three hours have elapsed. I take it, therefore, that the House will agree to debate all three items together.
I have selected all the amendments on the Order Paper.
9.37 am
The Lord Privy Seal and Leader of the House of Commons (Mr. John Biffen): I beg to move,

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'the Report of the Independent Inquiry' means the Report of the Independent Inquiry into Motor Mileage Allowance for Members of Parliament to the Leader of the House of Commons (House of Commons Paper No. 469 of Session 1983–84); 'year' means a year beginning with 1st April.

That the draft Lord Chancellor's Salary Order 1984, which was laid before this House on 12th July, be approved.

There are three documents before the House for which I seek approval. They are a draft Order in Council relating to the Lord Chancellor's salary, and two motions seeking to make changes in certain allowances payable to Members of Parliament. The allowances in question are the office, secretarial and research allowance, and the car mileage allowance. The texts of those documents have appeared on the Order Paper for some days. It may assist the House, however, if I outline as briefly as I can the import of each proposed change and explain the reasoning that lies behind them.
The draft Order in Council provides for an increase in the salary payable to the Lord Chancellor with effect from 31 July and 1 November 1984. The Lord Chancellor's position is unlike that of any other member of the Government, in that he is not only a Cabinet Minister but is head of the judiciary. Accordingly, the arrangements for his remuneration differ from those for other Ministers.
The Top Salaries Review Body, taking account of the Lord Chancellor's unique position, recommended that the Lord Chancellor should be entitled to a rather higher level of remuneration than the Lord Chief Justice. The Government accepted that recommendation and gave effect to it. The Order in Council is needed to maintain that position, following the recent increase in the salaries paid to the judiciary. It mentions two separate dates, because the increase is being paid on those dates.
The second proposal for which I seek the approval of the House is a change in the arrangements for the allowances payable in respect of office equipment and secretarial and research assistance. As the House knows, the amount of that allowance has hitherto been adjusted on an ad hoc basis according to what has seemed appropriate at the time. I believe that that has not been wholly satisfactory, not least because it has required constant orders to be confirmed by Parliament. In an attempt to find a more acceptable and enduring basis for that allowance, the Government invited the Top Salaries Review Body to investigate whether an automatic method of uprating might be found. I have placed a copy of the letter from Lord Plowden, setting out the review body's recommendations, in the Library.
The review body recommended that in future the secretarial, research and office expenses allowance should be increased by the same percentage as the salary, plus London weighting, of a civil servant at the maximum point of the senior personal secretary scale. The Government accept that recommendation. The wording of the motion is not entirely straightforward, and it may be helpful if I explain the reason for it being drafted in this way. In the first place, no specific amount of money is mentioned for the amount of this year's increase. That is because the negotiations on Civil Service pay have not been concluded. That settlement will determine the amount by which the allowance will rise this year. The motion was therefore drafted with reference only to the principle of the new system, not its immediate practical effect. Under the Government's offer to the Civil Service, the limit for the
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allowance in the current financial year will increase to £12,437, and that rate will apply until 1 April 1985. That brings me to the second feature of the motion.
Mr. Eric Forth (Mid-Worcestershire): During this process of review, has any account been taken of the work load which secretarial and research assistants might normally be expected to bear for a Member of Parliament? Do the moneys proposed take into account national insurance and other payments required for such assistance? Does my right hon. Friend have a view on whether the amount proposed is adequate for most Members of Parliament?
Mr. Biffen: The review broadly took current scales and was designed to find a formula whereby they could be uprated annually without the necessity to come back for confirmation by the House, but, as I shall explain, there are provisions for the sort of review that my hon. Friend has in mind to take place from time to time so that one can relate those factors to the other considerations.
That brings me to the second feature of the motion, which may not be easy to understand at first or second glance. This year the allowance is to be increased by only four fifths of the relevant percentage. As hon. Members will be aware, the secretarial allowance has traditionally been increased on 13 June, but it is payable, under the relevant resolution of the House, for a financial year. That has involved a cumbersome calculation, and while we propose that the allowance should increase this year on 13 June, it is our intention to bring forward the date of increase in 1985 to 1 April to coincide with the start of the financial year. Thus, the 1984 limit will apply only from 13 June 1984 to 31 March 1985, and the four fifths formula in the motion is necessary to produce the same result over the whole year as would have been achieved under the old system. The motion ensures that no loss is incurred by the approach that we have adopted. I believe that these proposals represent an equitable method of regular alteration to the allowance, without the need for frequent debate and vote.
I come to the valid point raised by my hon. Friend the Member for Mid-Worcestershire (Mr. Forth). No arrangement is immutable, and this one, like others, will be subject to review from time to time. I believe that the House will wish to endorse the motion.
The motion on motor mileage allowance concerns inevitably an area of some difficulty, given the widely differing circumstances of hon. Members. Whatever judgments are struck will involve some rough justice. The House will recall that until last July rates payable to Members of Parliament in respect of that allowance were tied to those applicable in the Civil Service. During the debate on hon. Members' pay and allowances on 19 July 1983 considerable unease was expressed about that link and the changes implicit in its continuance. I undertook to have the matter examined. In the meantime, hon. Members have received the higher of the two Civil Service rates introduced on 10 October 1983.

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In accordance with my undertaking, I established an independent inquiry to determine the most appropriate means whereby hon. Members could be reimbursed the cost of their motor mileage. The inquiry was conducted under the chairmanship of my noble Friend Lord Peyton of Yeovil. I wish to pay tribute to him and the other members of the inquiry team—Lord Barnett and Mr. Richard Wilkes. They discharged a complex task with speed and imagination. I know that the whole House will wish to join me in thanking them for their efforts.
The report of the inquiry team recommends that the long-established link with the rate of allowance payable to civil servants should be severed. It proposes that in future the allowance should be calculated on the basis of the Royal Automobile Club schedules of motoring costs, with an enhanced element for depreciation, subject to an upper limit of 39p per mile for a car of 2600cc. The Government accept those recommendations.
Paragraph 7 of the report makes it clear that the 39p per mile figure is an upper limit and that where hon. Members use a smaller car and therefore incur lower costs they should limit their claim. In the interests of public accountability and of the proprieties being not only observed but seen to be observed, the Government propose to formalise that arrangement. Under the terms of the motion there will therefore be three tiers of allowance, calculated on the same basis as that used by the inquiry team. [Interruption.] I thought that the hon. Member for Blackburn (Mr. Straw) was throwing me a lifeline.
Mr. Jack Straw rose—
Mr. Biffen: It is all right. I can do without it.
The three tiers will apply to cars of up to 1300cc, between 1301 and 2300cc, and 2301cc and above. That makes more specific the principle of an allowance based on engine size put forward by the inquiry team in its report.
Mr. Peter Bruinvels: There must be some concern about the upper limit of 39p per mile for vehicles of 2600cc. Will that not encourage hon. Members to purchase more powerful cars? Will it not be a bad consideration for the public at large? Has the Fees Office been consulted throughout on the new recommendations?
Mr. Biffen: We have worked closely with the Fees Office, because it bears the onerous task of administering the scheme. I would not come to the Dispatch Box were I not tolerably happy that what has been recommended was a manageable arrangement. With regard to whether payments that are adduced by the RAC to cover motoring costs would result in hon. Members trading up, they must make their own judgment, but I should have thought that the major concern was that we should have a system whereby motoring costs were covered. The Peyton inquiry team did not think that possibility would be a significant factor in the arrangements and, I confess, neither did I. However, this is a House of Commons matter and hon. Members must make their own judgment. I notice that no hon. Member has tabled an amendment to reduce the 39p figure.
Mr. Hugh Dykes: Will my right hon. Friend explain how the Government managed to accept,
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apparently with enthusiasm, the independent recommendations for secretarial and mileage allowances when they found it so difficult on 19 July last year to accept independent recommendations on salaries?
Mr. Biffen: The House took the view that it regarded as appropriate on salaries and the Government accepted it. Moreover, I should point out that I stand at the Dispatch Box today with a sense of weary resignation, not enthusiasm. This is an intractable problem. Let there be no mistake about it. When the public monitor this they will not conclude that we have been engaged in a great exercise of self-deprivation. We should be under no illusions about that. The proposals are an attempt to strike a balance in an exceedingly difficult situation. Members have different motoring costs, largely related to the different types of constituency and it is difficult to find a simple, uniform system that is acceptable. The review committee made the recommendations in good faith and they seem to provide as good a basis as any for the House to try to resolve the problem.
Mr. Nicholas Baker: Is not the argument that the higher rate will encourage people to buy larger cars ill founded, in that only the running costs are reimbursed? To buy a large car one needs to have or to borrow more money, which is not reflected in the allowances. [HON. MEMBERS: "Yes, it is."] Depreciation is included but not the cost of the car.
Mr. Biffen: In my judgment, the scales proposed will not lead to a rash of Rolls-Royces cluttering up the Members' Car Park. I am sure the House will agree that it is important that Members of Parliament should be seen to be subjecting themselves to the same disciplines as would apply elsewhere.
Mr. Patrick Thompson: Whatever the arguments about the specific mileage allowances, does my right hon. Friend accept that the previous flat rate system was fairer and easier to explain to the public?
Mr. Biffen: That may be so—it is for the House to take a view on that—but Members were miserable with the flat rate system related to the Civil Service as soon as the formula was changed and they thought it was to their disadvantage. That is why the matter was brought into such sharp focus, to use the most neutral language possible, in last July's debate. Although I respect all the opinions being expressed, I should like to press on. Perhaps we could do a deal to the effect that any Member who interrupts me will not seek to speak later in this limited debate.
The Government's proposals will introduce rates of allowance for up to 20,000 miles per year of 18p per mile for cars up to 1300 cc, 25·9p for cars between 1301 cc and 2300 cc and 39p per mile for cars of 2301 cc and above. For mileage in excess of 20,000 in any one year, lower rates of 11·3p 14·7p and 19·5p per mile will apply.
Sir Anthony Meyer: If there are grounds for differentiating between sizes of car, why is there no differentiation on grounds of distance? Why is no account taken of the fact that some constituencies are 300 miles from London or that some Members have to drive up to 400 miles per weekend to cover their constituencies, whereas for others the entire constituency is within walking distance of a railway station?
Mr. Biffen: There is a distinction in relation to distance. The practice operates in the Civil Service and in a large number of private sector companies. Any system which broadly attempts to relate motoring reimbursement to actual costs should appeal to the sense of equity of hon. Members and make good sound sense to the public outside. The reason for the difference between the rates is that the initial rate based on the RAC schedules reimburses all standing costs and running costs less the deduction for private use. The lower rate reimburses running costs with an enhancement for extra depreciation and repair costs. In both rates, the depreciation element has been enhanced to reflect the fact that Members of Parliament generally travel more than the 10,000 miles on which the RAC schedule is based. The new rates will come into effect on 1 October 1984 and be uprated on 1 April annually with the publication of revised RAC schedules.
More fundamentally, it has been represented to me that an allowance system based on engine size represents a step backwards to the system from which the House moved to a flat rate in 1964. The inquiry, however, found that a wide range of costs related to engine capacity. It seems reasonable that Members with distant or geographically large constituencies should choose to run larger than average cars because of those factors. Therefore, I accept that there are defensible reasons in equity for a multi-tier system. It may be argued that the Government, having taken that decision, should have taken the argument to its logical conclusion and proposed a six-tier system to correspond exactly with the RAC schedule of costs. I see no objection to that in principle, but one must strike a balance between absolute accuracy and ease of administration. I believe that the three-tier system combines fairness in relating allowances to costs, while avoiding unnecessary bureaucracy.
The House will have noted that paragraph 6 of the inquiry report recommends that Members wishing to claim for distances in excess of 25,000 miles a year should furnish particulars of all journeys included in their claim. It may help the House if I outline the way in which we envisage this being applied. The 25,000-mile limit will apply only to journeys undertaken by Members. Use of the vehicle by spouse or secretary qualifying for reimbursement will be treated on a de minimis basis and exempted. Similarly, travel by car in connection with Select Committee work will not count towards the 25,000-mile total.
The limit will apply only to journeys between Westminster and home constituency and within the constituency. Under the existing arrangements, Members routinely detail all journeys between Westminster and home constituency. There will be no change in that requirement. If, however, a Member feels that he is likely to exceed 25,000 miles in any given year, he will be expected to provide fuller particulars than hitherto of journeys within his constituency. The precise form in which such particulars should be provided is being considered by the House authorities.
Mr. A. J. Beith: If a Member has more than one car in more than one band of the proposed scheme, will he have to identify which car was used for which mileage? If a Member travels by taxi, as is often necessary if one arrives by air, the cost will be
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greater than can be claimed through the mileage allowance. Will the Member concerned therefore be allowed to claim at the highest rate of mileage allowance?
Mr. Biffen: The answer to both questions is yes.
I accept at once that 25,000 is a somewhat arbitrary limit and that Members with distant or rural constituencies will reach it more easily and will thus be required to account for their mileage more closely than some of their southern or urban colleagues. Nevertheless, I felt it right to accept the inquiry's recommendation as an important demonstration that no special privilege or undue latitude is sought for Members of Parliament. I urge the House to consider the proposals in that spirit.
In conclusion, I suggest that the secretarial and motor mileage allowances must stand two broad tests. First, they must be equitable in relation to the costs borne. Secondly, they must be defensible to the wider public. I believe that the proposals meet those standards and I commend them to the House.
10 am
Mr. Alfred Dubs: I beg to move amendment (a) to the proposed motion, in line 6, leave out `£12,000' and insert '£17,000'.
The amendment is concerned entirely with the amount of money made available to us for the office, secretarial and research allowance. The purpose of the amendment is to increase the amount from the level set in the motion—£12,000—to£17,000.
My intention is not to claim any privileges for us as Members of Parliament, but solely and simply to enable us to do our job better and to do justice to our secretaries and research assistants, if we have them. If we accept the amendment, the public will not take the view that we are voting perks for ourselves. They will understand that what we are doing is necessary and essential if we are to do our job properly.
An allowance of £17,000 would enable every hon. Member who so wishes to have a staff of two—one full-time secretary and one full-time research assistant. It could, of course, also be divided between two part-time secretaries and two part-time research assistants. It would also provide a minimum sum of money to enable us to buy, repair or update our typewriters and dictating equipment. Those are the minimum services that we need.
At present, the allowance is adequate for one secretary, about 0·2 per cent. of a research assistant, and the occasional purchase of a typewriter. That is not adequate. Hon. Members who have been here longer than I will say, "What are you complaining about? It was worse when I first came here." Every hon. Member will have heard that said by some older hon. Member, regardless of party. I appreciate the fact that this House is a conservative institution as well as, at the moment, alas, a Conservative one. However, we do not have to take conservatism to that extreme.
The second argument against my proposal is seldom stated explicitly, but I often suspect that the two Front Benches are in collusion about it. They reason that if they give Back Benchers more back-up and support, those Back Benchers will be able to make their lives more difficult. They want to keep us beaten down with constituency work in our offices or corridors so that we will not cause them too much trouble. That makes life easier for the Front Benches. Back Benchers are in a majority in this place

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We have the right to make certain demands, regardless of what Front Benchers may say to us. I hope that in that spirit the majority of Back Benchers will support my amendment.
Although I have not done the detailed research, it is difficult to find any Western Parliament where the back-up is less adequate than it is here. Almost every Western Parliament provides at least a staff of two for each Member, and so do some non-Western Parliaments. South Korea — which is hardly a byword for democratic procedures and practice — gives each Member of Parliament a staff of two.
I do not want to be accused of giving us all a pat on the back, and I hope I shall not be misunderstood, but it is my contention, based upon discussions with many Members of Parliaments throughout the world, that we work harder than the Members of any other elected assembly. I cannot prove that beyond a shadow of a doubt, but all the investigations that have been carried out and the discussions that we have had with our opposite numbers abroad tend to confirm that view.
Mr. Dykes: Is the hon. Gentleman aware that a German Member of Parliament gets allowances worth £18,000, a salary of £28,000, free postage throughout the world, free telephone calls throughout the world, first-class rail travel throughout German territory and one free aircraft trip anywhere every month, subject to the approval of the relevant committee? That may seem grandiose in comparison with what we get, but I should also point out that the Bundestag processes fewer Bills per annum than we do, and yet it is a highly effective Parliament.
Mr. Tony Banks: More money for less work.
Mr. Dubs: I do not want to involve myself in an argument about the effectiveness of the Bundestag, but I am aware that we work longer hours and get through more work than our opposite numbers in Germany. In particular, we do more constituency case work. That is one of the key arguments, although not the only argument, in favour of my proposal.
Whether we like it or not, most of us have an ever-increasing burden of welfare or constituency case work, I welcome that fact. It is right that we should do that work. It keeps us in close touch with what is going on. That cannot be said of the many countries where Members tend not to do so much constituency work. However, the corollary is that we are short of time to cope with the wide range of other work for which we are responsible.
The public can be divided into two groups: those who are not aware of the poor facilities and back-up here and are astonished when we explain to them the problems that we face in trying to serve them; and those who know how poor the facilities are, but rightly say that it is entirely our own fault. They say that we need not put up with it, and that if we decide not to put up with it there are plenty of members of the public who would do the job in our place. We cut a poor figure when we moan about a lack of back-up, which is entirely our own fault.
I am not forgetting that there is an excellent Library, with first-class research staff. I pay tribute to the staff for all the work that they do for us. However, they cannot do for us all the work that a research assistant would do. It
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would be unfair of us to take to the Library all the work that we would like to take, because the staff could not cope with the burden. They have to work for all Members of Parliament. It would be helpful to have one's own research assistant, because he, or she, would understand one's approach to the job, one's problems and one's constituency.
Most of us simply do not read the bulk of the documents, circulars, White Papers and Select Committee reports which come our way. We do not have the time. Furthermore, no hon. Member would claim that his speeches or questions, or the letters that he writes to Ministers or to local authorities, are always as well thought out, researched and prepared as they should be. Civil servants must wonder why our parliamentary questions sometimes do not quite hit the mark or why the letters that we write to Ministers are rather sloppy and may not address themselves strictly to the point. The answer is that we do not have time to do such work properly.
We may also have to table a written question because we simply do not have the time to think through and draft a letter which might be more to the point. I do not agree with those who say that if all Members of Parliament have research assistants they will simply spend the time asking more questions. That would not necessarily be the outcome, but we might well ask better and more sensible questions. In any case, one of the reasons why we now ask questions is that we do not have the time to do our own digging and delving.
I hope that the House will support the amendment. It is a modest proposal that will enable us to do a better job of work for our constituents. They will therefore welcome it. It will also enable us to do justice to our secretaries and research assistants. I am sure that, sooner or later, such a change will be made and that we shall have the staff that I have talked about, so why not now?
10.10
Mr. Peter Bottomley: I am sure that we all want to give a fair wind to the third motion on the order paper which concerns the Lord Chancellor's salary. I hope that he enjoys receiving and spending it.
I do not want to follow what the hon. Member for Battersea (Mr. Dubs) said about secretarial allowances as I do not believe that this is the right day to go into that matter in detail. The first motion merely gives effect to what we have already decided. A major debate of principle in regard to the level of secretarial and research back-up should be dealt with more effectively than in an amendment. If we are examining back-up for Members of Parliament and its cost, we should take account of the cost of written questions and similar matters, as the total back-up for a Member has a cost, and it might be possible, after consideration between Back-Bench party officers, to find a means of limiting total costs of back-up rather than merely the element of those costs which Members manage.
Mr. Chris Smith: The hon. Gentleman said that now is not the appropriate time to examine the base rate for the secretarial and research allowance. Will he bear in mind that the present allowance was fixed as part of an overall package of Members' salaries and allowances at the start of this Parliament? It was voted through in the early hours of the morning, and

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there was little discussion about the allowance element of that package. Surely this morning, with three hours of debate, we have a proper chance to discuss the base rate.
Mr. Bottomley: I take the hon. Gentleman's hint. I shall not continue to make that point. Others can develop the case which I do not think is appropriate for today.
It is important to lay one or two elephant traps on car mileage. I believe that the signals in the proposed scheme will get Members doing things that they would not otherwise do. That might or might not be intended. Members who have a car, the cubic capacity of which is one or two cubic centimetres below one of the limits, will feel aggrieved, and, on changing the car, will go above the limit. That will involve extra cost without giving any advantage to a Member, except assuaging a sense of grievance. There is much to be said for a common system. I do not feel that so strongly that I shall deliberately overturn what the Government are proposing, but the sooner we get back to a system that gives Members the right signals, the better.
We should try to meet Members' costs in the form of standing charges and then provide a marginal amount for petrol and a little wear and tear. The old system did not do that. The basic cost of a motor car is so many hundreds or thousands of pounds a year, and the marginal cost, which is what we should get back for marginal motoring, can be estimated with some rough justice. As I said in last year's debate, I should have been happier if the Government had linked this with Civil Service procedures, so that we had one simple rate and we could then have argued about the number of miles. I regret that the House did not take that view, as it would have been more satisfactory than what we have. Even more satisfactory would be a lump sum and a low marginal reimbursement for the low marginal costs of motoring.
Mr. Forth: Does my hon. Friend agree with our right hon. Friend the Leader of the House that after what happened last year there was some groundswell of opinion among hon. Members against what emerged? Alternatively, does my hon. Friend agree with me that, having done what we did last year, there was broad satisfaction? That is why people do not understand why we have the present proposal.
Mr. Bottomley: The simple answer is that, when a proposal is made, those who object turn out. When the previous proposal emerged, the high mileage Members objected. Now it is probably the others who are objecting.
Mr. Biffen: Perhaps I might clarify what is clearly a misunderstanding. The groundswell of resentment occurred when the House discovered that its attachment to the Civil Service formula meant a move to a system of abating payment for the first 9,000 miles and a reduced payment thereafter. The House has little sympathy for the privilege of the top rate, and I must observe that that privilege is not as secure as it will be under the scrutiny of the Inland Revenue if it continues.
Mr. Bottomley: The House should be prepared to review whatever arrangements we decide on or do not accept today so that, in the near future, we have a system under which a Member might get £1,500 a year and 10p a mile. A Member would then be indifferent about whether he or she travelled by train or by car. We should try to achieve that indifference. At the moment, a Member can
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retrieve most of the standing cost only by doing a high mileage. That probably involves a decision to drive when it might be more convenient and sensible to use public transport. That seems so obvious that it is likely to take the House many years to adopt it, but I have never thought that I should not come to the House and state the obvious.
Mr. Gerald Bermingham: Does the hon. Gentleman agree that there are many constituencies, rural and urban, in which there is not an adequate public transport service? Because of the lack of transport, withdrawal of transport grants and other problems that have resulted from the present Government, many Members who represent constituencies in the north-west are forced to use a car to travel around constituencies and to neighbouring areas.
Mr. Bottomley: I entirely accept that point, and I thought that I had allowed for it. I am not suggesting that Members should automatically be badly off if they have to use a car for a high mileage. My point is that the system that we had was better than that which we might adopt and that the system that I am suggesting would meet most cases.
Perhaps I might make a personal point. With a London constituency and the need to use a car to get to it—a journey of about seven miles to the constituency boundary and about 10 miles in the constituency in a normal day—whatever system the House is likely to adopt will not meet my car expenses and having to have an extra car for the purpose. I do not mind that. That is rough justice, and I am one of those who do not gain under any system. Bearing that in mind, it is worth advancing sensible ideas that will lead to most Members getting most of their expenses most of the time, while avoiding the temptation to drive more often just to cover higher standing charges. Moreover, as one who has had a car with an engine capacity of 2·6 litres, another of 1·99 litres and another of 850cc, I can envisage the complications for the Fees Office and for Members of trying to make the right claim. I suspect that a bit of averaging goes on.
10.18 am
Mr. A. J. Beith: I welcome the Government's decision to index the secretarial allowance. Our staff will therefore know that if the salaries of people who do similar work in the Civil Service increase to take account of inflation Members will be able to increase the salaries of their staff. The annual wait to discover whether that will be possible was not satisfactory.
It is right that the overall rate of secretarial allowance should have been mentioned today. I do not think that this is the wrong time or the wrong day. We can quite properly discuss the matter now. I regret that it is still not possible to employ and pay properly a full-time secretary and a full-time research assistant, constituency assistant, political assistant or whichever combination of those functions is found most convenient, out of the secretarial allowance.
The review body recognises that that is the combination of staff needed by hon. Members. It is widely accepted that that is so. Not all hon. Members wish to avail themselves of that level of service, but those who do find it increasingly difficult, for the reasons that have already been given. Some hon. Members are under particularly heavy pressure. A Liberal Member has 120,000 constituents. The amount of correspondence generated by

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such a number of constituents is very great. Clearly he needs staffing support to carry out his duties. Therefore, the basis of the secretarial allowance needs to be expanded to provide a modest staff of two people. That is not an unreasonable demand when we compare our work with that of legislatures that carry less extensive responsibilities than we do.
Many other expenses must be met from the secretarial allowance. An hon. Member may have to meet the increasingly high cost of advertising constituency surgeries. In my area where there are many local papers it costs between £1,600 and £1,700 a year merely to advertise the time and place of the surgery. On top of that there may be rooms to be hired and other support costs to pay. There are stationery and office costs, which are not met from the allowance, especially if an hon. Member bases much of his secretarial work in his constituency. Some hon. Members choose to base their office work in the House and others in their constituencies. There are good reasons for either choice. However, in the latter case hon. Members must meet a higher proportion of the costs. They must pay for all telephone calls and they will not have the photocopying and other facilities that are available in the House. That should be recognised. My hon. Friends and I are therefore inclined to support the amendment moved on that matter.
Many hon. Members must travel a great deal by car to carry out their duties, especially in large constituencies and for hon. Members who must travel to and from distant constituencies where public transport is not ideal. Liberal Members represent some of the largest and most distant constituencies in the United Kingdom, and so we are not strangers to the problems involved. That has not led us to be enthusiastic about the Government's proposed solutions.
The proposition involves a high top mileage rate of 39p. That is much higher than any other rate available for others who undertake public activities, services or duties. I sympathise with the Government in that they are pressed again and again for independent reports on hon. Members' allowances, salaries and facilities and to act upon them. They never do that for our pay, but always reject the independent recommendations. Are we then wrong in chiding them for appearing to accept the recommendations of an outside body? They have not accepted the recommendations of an outside body. The outside body recommended that there should be a maximum reclaimable amount of 39p per mile and that hon. Members should claim within that maximum for the costs which they incur. The Government have proposed a banding system under which hon. Members claim at a specific amount for whatever kind of car they operate. The banding system is extremely limited.
The review body understood its recommendations to mean that hon. Members would claim at the most appropriate level and treat the 39p as a maximum—in many cases a maximum far beyond what would be claimed. The Government's proposals are not expressed as maxima. It is assumed that, whatever an hon. Member's costs are, he will claim at the rate for his particular size of car. He may have a 10-year-old 2·8 litre car whose depreciation is not as great as the sum envisaged in the mileage figures. The review body understood that, which is why it recommended a single maximum and expected
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hon. Members to claim within it, and did not recommend a banding system. Therefore, the Government cannot get away with saying that they are implementing the review body's recommendations.
We are entitled to examine the recommendations on their merits and see what their effects will be. They are way out of line with what people in other parts of the public service can claim, whether in the Civil Service or local government. They are out of line to an extent which cannot be justified by the particular circumstances of an hon. Member's use of a car. There are other problems. There are some differences between an hon. Member and a civil servant, which is why it is defensible to say that an hon. Member should be able to claim the current top Civil Service rate for a higher mileage than can a civil servant. Hon. Members' duties necessitate higher levels of mileage than are normal in most parts of the Civil Service, where civil servants are given a car allowance rather than a car. The public understand that it should be recognised that hon. Members, unless they are Ministers or Leaders of the Opposition, are not provided with official cars, but buy their own.
The trouble with the banding structure is that it becomes a direct incentive to an hon. Member to buy a car with a higher engine capacity. If he does so, he will be entitled to claim several thousand pounds a year more for car mileage allowance.
Mr. Christopher Hawkins: The hon. Gentleman's point that it will pay hon. Members to buy a bigger car cannot be true if the figures used by the independent review body are based, as they are, on the actual costs of running cars of this size as computed by the Royal Automobile Club. Therefore, the size of car will make no difference to hon. Members. The mileage rate will merely cover the running costs. The costs may be higher than those incurred by people in other public jobs, but that is because most hon. Members are doing marginal mileage on top of normal mileage. Provided one's mileage is about average, depreciation is not affected. Hon. Members' mileages massively affect depreciation.
Mr. Beith: That is not so for two reasons. First, the Government have excluded provision for one of the most frequent bands of car engine size—the range between 1,600 cc and 2·5 litres. By excluding that, many hon. Members will find that they can go for greater engine capacity without raising their costs anything like as much as the increase in the allowance they will be able to reclaim. That is why I tabled the amendment, which is designed to create an additional band covering a widespread and common size of family car. Last night I looked around the Car Park and found only two or three cars of the 39p category and about 20 cars in the middle band that I am describing.
Secondly, the higher mileage figure worked out in the RAC scales derives primarily not from higher petrol or running costs but from the higher depreciation of cars with a large engine capacity. It is clear from the RAC tables that the depreciation element makes up the larger part of the cost. An hon. Member can avoid that depreciation element if he buys a large but old car. The rate of depreciation on large old cars is minimal. An hon. Member could move into the higher-rate band at minimal increased cost and automatically become entitled to reclaim a vastly larger sum.
Mr. Bruinvels: Does it mean that there will be no incentive to keep a smaller car?
Mr. Beith: That is exactly my point. I wish to provide hon. Members with an incentive to do what I hope the whole nation will do, which is to run cars that are energy efficient, do not consume unnecessary amounts of petrol and are reasonable for the job to be done, whether to be driven around by a Member of Parliament, to transport the family or for any other purpose.
Mr. Bermingham: When the hon. Gentleman takes into account depreciation and repair costs, perhaps he should also take into account the safety factor. Does he agree that there is a direct correlation between the number of miles driven in any year and the likelihood of becoming involved in an accident? Is he further aware that for some years statistics have shown that those who drive a higher-capacity car tend to have a greater survival rate than do those who drive a lower-capacity car?
Mr. Beith: The hon. Gentleman produces a mine of statistics. I wish to encourage hon. Members not to drive in motor cars any more than they need to. There are several reasons why the Government's proposals will encourage hon. Members to drive more than they need to. If we produce an enormous differential between what can be reclaimed by driving a car and by travelling by public transport, as these proposals would, it becomes likely that hon. Members will increasingly travel in cars, partly to reclaim the greater costs, as the hon. Member for Eltham (Mr. Bottomley) said. It is injurious to Members' health to travel excessively in cars. Those of us who are forced, by the distances involved in constituency travel, to drive a great deal from late night meetings know how difficult and dangerous that is and how easily one can become so tired as to drop off to sleep behind the wheel. Hon. Members should be given every available incentive to travel by public transport wherever possible.
The banding system proposed by the Government in an attempt to increase accountability and to maintain simplicity is wrong and will penalise those who make the sensible decision to have a medium-sized car that does not have high petrol consumption. The Government and the House, which in the end will take the decision, should set an example to the nation by saying, "We shall not devise systems that encourage hon. Members to buy bigger, gas-guzzling cars." Hon. Members may have reasons for buying bigger and higher engine capacity cars—that is their business—but it would be a great mistake for us to provide a system which penalises those who do not buy such cars.
An alternative which the Government could have accepted would be to accept the review body's original recommendations, have the 39p as an absolute maximum and hope that hon. Members would not rush to claim the maximum figure. Another advantage of that is that the system being proposed will be expensive to operate. The banding system and the need to submit much more complicated forms will cause much bureaucracy; indeed, it would not be an exaggeration to say that it would require about three more members of staff in the Fees Office, at a cost of about £20,000 a year, to carry out that work. I have some sympathy with the Government's belief that they had to go further to ensure that justice is seen to be done and that there is no possibility of claiming at the wrong rate, but I believe that the banding system is wrong.
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What are the possibilities? We could return to the flat rate, retain the system that we have now and work from the top Civil Service rates and, if the Government believe it right to do so, we could choose a suitable cut-off point to move to a lower rate at which the depreciation arid standing charges are reasonably met. That would be a different rate from the Civil Service rate, because we are talking not about mileage allowance but about a car that is mainly, or even entirely, used for parliamentary activities. In many ways, that is the most attractive possibility, which is why I am tempted to throw out this proposal and to retain the present scheme, which is closer to most of the schemes in other public services, much easier to understand and explain and less expensive to administer.
However, if we must have this scheme — there is some chance that it will be passed by the House today—we must amend it so as to provide a reasonable basis for those who use medium-sized family cars to be able to claim at a reasonable rate and not to be given an incentive to claim at a higher rate. That is the precise purpose of my amendment, which draws upon the same RAC table but takes the next band down in that table. The figure of 29p is drawn by using the same calculation as the Government made to obtain the 39p figure. The Government took two bands and averaged them out to produce a much larger middle band. In doing so, they placed those who use normal family cars at a serious disadvantage.
Were we to pass my amendment, those who believe that it is essential for hon. Members to have larger cars and to be able to claim at the higher rate will not be prevented from doing so; but those hon. Members in the widespread category that I mentioned will retain a reasonable basis on which to run their cars. If the Government rely on the RAC figures, they must accept the evidence of those figures—that it costs about 29p a mile to run a car of that size. If we accept the banding scheme with a rate as high as 39p, we must amend it so as to remove the incentive to move into the higher bracket. That is a reasonable proposal, and the Leader of the House said in his opening speech that he had no objection in principle to the proposal. He believed that an extra band would add a further complication. I believe that the added complication would provide something more like rough justice. The original supposed justice of the scheme is much too rough for my liking.
I would much rather that we abandoned this proposal and returned to the flat-rate scheme which the House has operated for some years and which is more reasonable. But if that does not happen, the House must take the precaution of amending the Government's scheme to ensure that it does not encourage hon. Members to buy cars which consume more petrol and which they otherwise would not buy.
10.35 am
Sir Anthony Meyer: I agree with most of what the hon. Member for Berwick-upon-Tweed (Mr. Beith) said, but I wish to address myself to another matter.
For my money, my right hon. Friend the Leader of the House is the most intelligent as well as the most agreeable member of the Cabinet; and, to do him justice, he looked properly shamefaced when he introduced this nonsensical proposal this morning. I am talking only about the car allowances, and I shall deal briefly with one aspect of

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them, which is the arbitrary limitation, first, to 20,000 miles, after which a reduced allowance becomes payable—I do not object to that—and thereafter to 25,000 miles, after which every hon. Member is expected to account in detail for every mile that he travels on constituency work.
That is the most lunatic proposal that has been put before the House for a long time. What possible justification can there be for taking no account of the distance of an hon. Member's constituency from London, or of the size of his constituency? I am among those who will be fairly hard hit by the proposal, in that my consituency is 250 miles from London. Therefore, just by travelling backwards and forwards to my constituency on at least 40 weekends a year I clock up 20,000 miles before I even start to travel in my constituency.
Mr. Roger Gale: My right hon. Friend the Leader of the House will clarify this if I am wrong, but my understanding is that the mileage between London and one's constituency does not count as part of the mileage because it is allowable anyway.
Sir Anthony Meyer: I wish that my hon. Friend was right, but my understanding is that travel between London and one's constituency is included in the 20,000 miles and the 25,000 miles. My case is nowhere near as bad as that of some of my colleagues, including my hon. Friend the Member for Brecon and Radnor (Mr. Hooson)—who was here earlier but who, presumably, is unable to stay—and my hon. Friend the Member for Clwyd, South-West (Mr. Harvey), who could not cover their constituencies adequately unless they travelled at least 300 or 400 miles every weekend. I am sure that were it not for his ministerial duties my right hon. Friend the Leader of the House, who represents Shropshire, North, would make equally frequent visits to his constituency. When he was in opposition he was well known for the assiduity with which he visited and travelled round his constituency. Therefore, he must feel as strongly as I do that the proposition is absurd.
It is suggested that if we travel more than 25,000 miles a year we are somehow under suspicion of fiddling our travel expenses and we are required to account for each mile that we travel. Therefore, we come under pressure to make those journeys by train. It is a good idea to use public transport as much as possible, but again we run into a snag. My wife and I am sure the wives of many other hon. Members work almost as hard in the constituency at weekends as do hon. Members, but wives are limited to 15 trips a year on travel warrants. Last year I fell foul of that system. My wife had made 16 trips to my constituency by train, and I had already covered 28,000 miles by car. Once again, I had to pay for one of my wife's trips.
I do not complain about that, but I think it is absurd that there should be any limitation on the number of trips that a wife can make per year to the constituency as against the nine trips a year which a secretary is apparently allowed to make to the constituency—a privilege of which not many hon. Members will feel obliged to take advantage—so something seems to have gone wrong there.
It seems to me that some account must be taken both of the distance of an hon. Member's constituency from London and of his need to travel within that constituency
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each weekend. The present formula takes no account of that. This is one of the most stupid motions to come before the House for a very long time.
10.40 am
Mr. Clive Soley: I am pleased to intervene in the debate to support the amendment which my hon. Friend the Member for Battersea (Mr. Dubs) moved with great clarity and force.
This is an argument of immense importance. Over the five years that I have been here I have come to the view that this place is in need of fundamental reform in a number of ways, of which Members' allowances are one small but very important part. Unless we undertake some of these reforms we are in danger of being seen as less and less relevant in the eyes of the public.
A political system can be almost anything. It can be good or bad, honest or dishonest, right or wrong, but it cannot afford to be irrelevant. As it is seen to be less and less relevant, so it declines in importance, and so people tend not to take notice of it.
The allowances are important in all this. When I arrived here, like most other hon. Members I spent the first month or so trying to find any desk on which I could squat and put my papers. I was obliged to move them round from time to time, from place to place, until I was given one of the desks in the Cloisters below the House. The Cloisters are quite a nice place to be in terms of being central, but that corridor is totally inadequate as an office. One of the first disadvantages to strike me was that if I wanted to hang up a calendar I had to drill a hole in what I assumed was a 17th century wall. What became much more important was trying to run a sensible office system from there when there were many hon. Members lined up in the corridor, people passing to and fro along the corridor and groups of people having conversations there. I was supposed to run my office and my constituency and other work from that desk. It was utter nonsense.
As I became more involved in the politics of Northern Ireland, in 1980 and 1981, I began to take a more active interest in the prison system. I found, as a former probation officer, that that was relevant to my work. I knew when I came here that the general back-up support for Members of Parliament was bad. I also knew that the support services that I would get were far less and more useless than I had ever experienced in probation work or in a number of other jobs of that nature.
When the hunger strike and the dirty protest were well established in Northern Ireland and I became more and more involved, I found myself having telephone conversations from my desk in this public corridor with groups of people standing around when I was discussing matters with a considerable security content. At one stage when I was planning a visit to Portlaoise prison in Dublin, which was also dealing with a dirty protest at the time and had experienced circumstances similar to those which had led to the hunger strike in the Maze prison, I had a number of conversations with the Irish embassy about my proposed visit. I became more and more concerned about the security aspects of that, and I was aware that literally groups of people were overhearing my conversations. I got to the stage where the embassy was telephoning me and I was telling the caller to ring off so that I could go upstairs to an ordinary telephone box to phone him back.
I put it to the House that that is a disgrace. It is totally unacceptable in any modern democratic political system

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that we behave in that way. At the end of the day, we all know it. Unless we are prepared to provide good services we shall go on appearing to be irrelevant to the majority of people, and that is particularly dangerous.
When my hon. Friend the Member for Battersea proposed the increase to £17,000, he spoke about the wages for two people — a research assistant and a personal assistant. I cannot remeber the full total that I pay my own personal assistant, including national insurance contributions, but it works out at about £8,000 per annum. With her qualifications and experience she could earn more elsewhere. If I am then to use some of the modern equipment that I should like to use and have just invested in in the form of an Apricot computer, I shall have cut out any real chance of having a research assistant at all. I have spent £3,500 on a computer system which makes a lot of sense in terms not only of a limited word processing facility but of a filing system which enables me eventually, when I can afford to buy the other part of the equipment, to call up files when I am in my constituency so that I can deal with the sorts of problems that my hon. Friend described so vividly rather than saying that I shall deal with them when I get back to the House, write a number of letters, and all the other time-consuming and wasteful ways of dealing with these matters.
So what do I do about research? Again, as my hon. Friend pointed out with clarity and force, I rely a great deal on the Library, but the Library cannot be asked to do the detailed work which is required, so I rely on individuals, and again I have been extremely fortunate in that a number of people have volunteered their services. For the past month or two I have had a man who is highly qualified but unemployed, despite his qualifications and an extremely good university reference. Until he gets a job he is working for me for nothing, simply because I cannot afford to pay him. Because I have already almost accounted for my allowance over the full year taking into account the salary of my personal assistant and the computer software costs, there is no chance of my paying him other than his expenses to and from work.
No modern nation of any significant size would tolerate for long a system as daft as this. Why we are bothering about the car allowance — and I have considerable sympathy with the hon. Member for Berwick-upon-Tweed (Mr. Beith) — when we have not even got the basic expenses right, I do not know. I suppose that I have an environmental advantage in that I walk nearly everywhere in my constituency, but it is a London constituency, and a small one, so that is a special case. We are concentrating on a minor part of the problem when the essence of it is the lack of resources to do the job properly. We cannot go on like this if we are to be taken seriously by the public. It is no wonder that Members of Parliament lack the effective power and influence that they should have.
In a good parliamentary system the Back Benchers should be a real power house within their parties and their constituencies. Comparing the role of Members of Parliament in this part of the 20th century with that in the last century, we see clearly that they have lost power and influence. One of the reasons is that the resources to do the job properly are no longer available to them. The circumstances have changed in such a significant way that the people who have control of information are in a powerful position. Unless we have similar access to
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information and similar back-up and support, we shall not be able to do our job as we should in any mature and responsible democracy.
I do not believe that the Leader of the House is unsympathetic to what I am saying. I ask him to think again about the figure suggested by my hon. Friend the Member for Battersea as the very minimum. There is no reason why a Member of Parliament should be without a proper office, properly equipped, and two employees. That should be the minimum available to Members if they want it. I know that some hon. Members feel that it is not necessary, and I understand that, but they do not have to take it. I shall not insist that they take it, and nor will anyone else, but that is the minimum that should be made available.
One of the problems of the House, especially because it grew up and became so successful in the last century, is that it is still seen as a part-time occupation, with hon. Members coming here in the afternoons and evenings to decide the affairs of state, having performed their normal jobs in the mornings. That is no longer relevant in the second half of the 20th century. The danger is that those who have an office as a result of their solicitor's or business practice feel that they do not have the same need for secretarial and other back-up facilities that full-time Members need. If a Member does not have his own office, that option is not available to him. That is another basic and important fact which the Government need to take into account.
From occasional conversations with new Conservative Members, it appears that a growing number recognise that point. I ask Conservative Members to respond to that over a period. I know that some of them are doing so, and the more who do so the better. We cannot go on with 19th century practices in the second half of the 20th century and expect to continue to be seen as relevant to the needs of Britain.
10.50 am
Mr. Geoff Lawler: I, too, shall address my remarks to the amendment in the name of the hon. Member for Battersea (Mr. Dubs). As one of the newer Conservative Members, I am wholeheartedly in favour of it. Not only is the time of night of the previous debate relevant, but so is the fact that some 25 per cent. of hon. Members at that time were so busy trying to find a secretary and an office, and to decide how to use the allowance, that they did not have a great deal of time to decide what size that allowance should be.
Now, with the benefit of a year's experience in this place, I find it appropriate to consider the size of the research and secretarial allowance. It has become apparent over that year that support is extremely limited. I go beyond saying that it is extremely limited, and say that A is absurdly constraining. It makes Parliament and the service given to hon. Members a laughing stock not only in Britain but to anyone from abroad. I would not argue for the sort of support that American Congressmen receive, but there must be a happy medium between the two, and we are a long way off it at the moment.
Out of the four areas of support for a Member, there is the car allowance which we are debating today, the salary — not least the salary — the cost of living allowance, and the secretarial and research allowance. The latter is the one part of the benefits available to hon. Members that gives no direct benefit to the Member. That

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is important because any extra penny that is added to that allowance goes directly to aiding our constituents and the way in which we do our job in our constituencies. We do not benefit from it one iota and it is right that we should not. The recent changes making salaries payable through fees makes sure that does not happen. For that reason, any increase that we can vote in the allowance will be completely acceptable to the public and to our constituents.
There are three constituent parts to the secretarial and research allowance. For me, and I think for the majority of hon. Members, the main part goes to paying for a full-time secretary in London. That point was recognised by Plowden in the top salaries review when he said that Members need the back-up of a quality private secretary. Therefore, we have to have an allowance in order to pay a salary commensurate with that quality.
Hon. Members also need someone in the constituency. If, like myself, an hon. Member has an inner city constituency, the constituency office receives constant demands. Literally hundreds of callers arrive there, and the phone rings continuously. Where, as in my constituency, there are many people from the ethnic minorities who have a greater proportion of problems than others, there is a heavy work load. Therefore, it is important that there is provision for secretarial allowance to provide for adequate back-up in the constituency.
It is not good enough that the service that we give our constituents at constituency level depends on the contributions raised by the voluntary efforts of members of our political parties. They are raising money not for that purpose, but to fight elections and to campaign. They should not have to raise money to provide a service to our constituents. That money should be provided by the secretarial allowance.
Another part of the secretarial and research allowance that has already been touched on by the hon. Member for Battersea is the research element. I decided that my £12,000 should be concentrated on employing a full-time London secretary and to provide help in my constituency office, but it means that I have nothing left towards providing research assistance. The only way for me to obtain research assistance is from the Library and through the voluntary work done mainly by foreign students. I know that the use of foreign students may not be entirely acceptable to some hon. Members, but I have found their work to be of a high standard. I have to rely on their services to provide the research back-up for my work as an hon. Member. They are an important element in our lives. They help us to keep in regular communication with our electorates and in the work that we do in the House in contributing to debates. Many would also like to think that eventually they contribute through that to the quality of legislation passing through the House. Again, it is patently absurd that as legislators we should have to rely on voluntary work by foreign students to enhance our work. We need proper full-time help. Certainly we need some proper qualified research assistance, and an allowance should be available for that.
Another element that has been raised is perhaps a newer dimension in terms of the history of this place, and that is
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the plethora of modern equipment that is now available to assist us with our work. The £12,000 that we currently receive probably allows us to meet two of the three or four aspects of our work. The amendment tabled by the hon. Member for Battersea would increase the allowance to £17,000. That is a somewhat arbitrary figure, given that the Plowden report recommended £13,000 plus £1,000 for equipment. However, it would be a helpful step forward in ensuring that hon. Members have quality support in their constituency, in London and in their research. We owe it to our constituents to provide just that support.
10.57 am
Mr. Tony Banks: Although I was elected a year ago at the same time as a number of Conservative Members—rather too many of them—and some Labour Members, I have still not recovered from my initial shock at the appalling working conditions that Members of Parliament have to endure in this place. Visitors, and indeed many hon. Members, may admire the many marble statues that we have around, the wonderful neo-Gothic design of Pugin, Barry's architecture and the majesty of Westminster hall, but behind that elegant facade there lurks a legislative slum.
Downstairs in the Cloisters, which my hon. Friend the Member for Hammersmith (Mr. Soley) described, Members work under conditions that defy all the office and factory legislation. The Cloisters is nothing more than a fancy name for a corridor, and hon. Members might care to reflect on the fact that it is a fire trap. In the event of that unhappy eventuality, I suggest that there would probably have to be a mini-general election because of the vacancies that would arise. I hope that, if there is a fire, it is not on our side of the corridor.
The Palace of Westminster is a seedy, rundown and thoroughly useless working environment.
Mr. Speaker: Order. I remind the hon. Gentleman that the debate is about the secretarial and research allowance, not about facilities in the Palace.
Mr. Banks: If I may say so, Mr. Speaker, it is about the allowance and about the working conditions that are linked to it.
Mr. Forth: Does the hon. Gentleman agree that one way to solve our problems would be for us to take over the GLC building?
Mr. Banks: I have alway suspected that that was one of the main reasons why the Government wanted to abolish the GLC.
Mr. Speaker: Order. We are getting on to a tack which it would be unwise to follow.
Mr. Banks: It was also suggested that county hall should be turned into a hotel for rich American visitors. That proposal was made in 1892 and no doubt—
Mr. Speaker: Order. We must get back to the subject of the debate.
Mr. Banks: I was trying to talk us through to the statement, Mr. Speaker.
It being Eleven o'clock, MR. SPEAKER interrupted the proceedings, pursuant to Standing Order No. 5 (Friday sittings).

Argentina (Talks)
The Secretary of State for Foreign and Commonwealth Affairs (Sir Geoffrey Howe): I will, with permission, Mr. Speaker, make a statement on the talks which took place in Berne on 18 and 19 July between British and Argentine representatives.
As my right hon. Friend the Prime Minister and I have consistently made clear to the House, we are not prepared to discuss with the Argentine Government the question of sovereignty over the Falkland Islands. But it is plainly in our own interests, as well as those of Argentina and of the Falkland Islanders, that we should move towards more normal relations between Britain and Argentina. We therefore sought, in exchanges through the protecting powers over many months, to establish an agreed basis for talks which would achieve that end.
After careful and detailed discussions, a clear basis was agreed which would enable talks to take place. It was, of course, very clear to us that if the talks were not to founder at the outset on the issue of sovereignty, any such arrangements needed above all to meet the different positions of the two sides on that question. Accordingly, the specifically agreed arrangement on that point was that if the Argentine representatives raised the subject of sovereignty, as they clearly wished to do, the British representatives would make it quite clear in reply that we were not prepared to discuss it. Discussion would then move straight on to practical issues of concern to both sides and would continue on those subjects. This basis was plainly agreed and clearly understood by the Argentine Government. This arrangement was also confirmed by the Swiss Government.
When the talks opened in Berne, the British side complied scrupulously with this arrangement. As foreseen, the Argentines began by raising the question of sovereignty. We replied by making it plain, again as foreseen, that we were not prepared to discuss it. We went on to suggest a number of practical issues—such as the resumption of normal commercial and financial relations, the restoration of the air services agreement between Britain and Argentina and a visit by Argentine next-of-kin to the Falkland Islands—on which there could be some prospect of agreement.
We regarded this as the best way to start restoring confidence between Britain and Argentina, but the Argentine representatives were not prepared to continue the talks on this basis, although it had been agreed in advance. They argued that discussion of any of the practical issues put forward by the British side would have to be linked to discussion of a mechanism to address the question of sovereignty. Unless this new condition was met the Argentines were not prepared to continue the talks. This was totally at variance with the agreed basis and the talks thus came to an end.
Her Majesty's Government continue to take the view that it is in the interests of all concerned to seek the restoration of more normal relations between Britain and Argentina. I am sure that the House will share my sense of regret and frustration that, after many months of careful preparation, the Argentine Government brought the talks to an abrupt and premature end by failing to proceed upon the basis that had been clearly agreed.
Mr. Denis Healey: I strongly support the Foreign Secretary's final words that it is
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"in the interests of all concerned to seek the restoration of more normal relations between Britain and Argentina."
Like the right hon. and learned Gentleman, I deplore the breakdown of the talks and share the sense of regret and frustration that has followed so many of his recent initiatives.
I warned the Foreign Secretary some time ago that the long delay in opening direct talks with the new democratic Government in Argentina might mean that Britain had missed the bus, and so it appears to have proved. Can the Foreign Secretary tell us whether it is really the case, as reported in several British newspapers this morning, that the breaking point was the refusal of the Government to say that they were not yet prepared to discuss sovereignty—that the word "yet" was the breaking point? I hope that the Foreign Secretary will recall that it is unwise ever to use the word "never" in matters of this nature. He may recall the experience of one of his predecessors, Lord Colyton, in using the word "never" in the context of a Cyprus settlement.
Does the right hon. and learned Gentleman not feel that it would have been much wiser to take the advice of his immediate predecessor, the right hon. Member for Cambridgeshire, South-East (Mr. Pym), who told the Select Committee on 11 June:
"It would be wrong to close the door on any option"
and that we must
"get back to a position where"
sovereignty
"could be discussed."
Will the right hon. and learned Gentleman seriously consider changing the basis on which the Government have so far sought to open discussions with the Argentines, recognising what everybody in the world knows to be the case — that some time or other the question of sovereignty will have to be discussed between the British Government and the Government of Argentina?
Sir Geoffrey Howe: I welcome the right hon. Gentleman's support for my general statement of the position, although I regret that he succumbed once again to the temptation to couple it with a cheap and unworthy observation.
I repudiate absolutely the suggestion that there was any long delay in these matters on our part. I remind the House: that the Government have, from an early stage, taken a series of steps designed to move towards the restoration of normal relationships. In July 1982 we lifted the exclusion zone and replaced it with a protection zone. In September 1982 I initiated negotiations at the IMF to end financial restrictions. We have supported five European Community Presidency approaches to suggest the normalisation of economic and commercial relations. In May last year we proposed the restoration of the air services agreement. We have made it clear on a number of occasions that we are prepared to accept suitably prepared visits by bona fide relatives under Red Cross auspices.
Following the October elections we welcomed the return of democracy in Argentina, and on 10 December my right hon. Friend the Prime Minister sent a message to President Alfonsin on his inauguration. In January this year we sent the first of a series of messages which initiated the months of subsequent negotiations to establish a mutually acceptable basis for official talks on the normalisation of relations.

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We have always made it clear that we are not prepared to negotiate sovereignty. However regrettable it may seem from many points of view, the Argentines have to live with the consequences of the fact that they used force and invaded, at a time when we were negotiating on that question in good faith. The war and the casualties on both sides changed attitudes in Britain and in the Falkland Islands.
It was for all those reasons that we took such care to approach the business of restoring confidence between the two countries on a basis which could start with modest, practical, useful measures. That is what we thought we had secured and agreed—that is what we had secured and agreed — and I very much regret the fact that these events—
Mr. Tam Dalyell: What about the word "yet"?
Mr. Speaker: Order.
Several Hon. Members rose—
Mr. Speaker: Order. There is no "injury time" for the previous debate, which must end after three hours. Therefore, I propose to allow questions to go on until 11.20.
Mr. Dalyell: What about the word "yet"?
Mr. Speaker: Order.
Mr. Jim Lester: We do not want to descend into mutual recrimination, so is there any way in which the intermediary in organising the talks can express a view on why there has been, to put it no higher, a misunderstanding? Or has there been a deliberate change of policy by President Alfonsin since the talks began? Can my right hon. and learned Friend suggest any other avenues which could be pursued in seeking the desirable objective that he has outlined?
Sir Geoffrey Howe: I do not think that anyone but the Argentine Government could cast light on the reasons for what has happened. There is no doubt that the basis for the talks to commence and to continue was plainly agreed. Equally, there is no doubt that that basis was not, in the event, fulfilled. We can only speculate on why and in what circumstances there appears to have been a change of heart by the Argentines. Obviously, as I have said, we still wish to make progress towards the restoration of normal relations, but we shall need to assess carefully the implications of the attitude displayed yesterday by the Argentines, which caused the breakdown.
Mr. James Molyneaux: Is the Foreign Secretary aware that we on this Bench support the Government's refusal to discuss or negotiate the sovereignty of the Falklands? Does he agree that, whether in the south Atlantic or nearer home, any sort of intrigue will always perish on the question of which nation the citizens wish to belong to?
Sir Geoffrey Howe: In the presence of my right hon. Friend the Secretary of State for Northern Ireland, I hesitate to extend the range of my responsibilities. However, I acknowledge that there is certainly some truth in the right hon. Gentleman's point.
Sir John Biggs-Davison: Double talk apart, by "discussing sovereignty" does not Argentina
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mean the transfer of sovereignty? Was my right hon. and learned Friend not quite right, therefore, to take the stand that he did, while wishing — as we all do — for an improvement in relations? Does not the unreasonable attitude of Argentina suggest that even the present Argentine Government have to defer to aggressive elements in Argentina?
Sir Geoffrey Howe: Plainly, the word "sovereignty" in this context implies the transfer of sovereignty. That is the point that has been expressed by the Argentines on many occasions. It is also clear that the Argentine Government's attitude and performance must have been influenced by some of the factors that my hon. Friend has in mind.
Mr. Dalyell: Who authorised the wrecking statements by Sir Rex Hunt before the conclusion of the talks? Did the Prime Minister know? Has not President Alfonsin taken great political risks with his infant democracy? Are we not playing into the hands of a better armed Argentine military? Is the article on the front page of The Sunday Times of last week to be believed when it speaks about Argentine missiles being put in position, with the possibility of an attack on our forces?
When the Foreign Secretary says that we should pause and reflect, are we also to pause and reflect on the £3 million a day at least which, according to The Sunday Times, is being spent on the Falklands, and, if so, for how long?
Mr. Speaker: Briefly.
Mr. Dalyell: How can we expect the Argentines to agree to the normalisation of air services and trade if the Government do not make promises on the sovereignty issue? Can we then sensibly expect them to be assured that we speak on sovereignty—
Mr. SpeakerOrder. The hon. Gentleman will have heard what I said about the time available for questions. He has already asked more than three questions.
Mr. Dalyell rose—
Mr. Speaker: Order. I think that is enough.
Sir Geoffrey Howe: The statements of Sir Rex Hunt were made to explain to the Falkland Islanders that there was no change in the frequently expressed position of Her Majesty's Government about negotiations on sovereignty. That newspaper report about missiles—
Mr. Dalyell: Did the right hon. and learned Gentleman know?
Sir Geoffrey Howe: That newspaper report about missiles had nothing whatever to do with this matter. The talks broke down because the Argentines were not willing to talk about the normalisation of relations without linking that question to the issue of sovereignty.
Mr. Bowen Wells: May I first congratulate my right hon. and learned Friend on arranging the talks in Berne? It shows a flexibility on the part of the British Government which we had been led not to expect. Will he reassure the House that he is not being too rigid about the discussions on sovereignty? Clearly, negotiations could take place by simply listening to the Argentine position, while not negotiating sovereignty. Will he reassure us that he is not being rigid in a strict interpretation of those words?
Sir Geoffrey Howe: There is no question of rigidity or intransigence on this issue. As a matter of plain common sense, at this stage—a little more than two years after the unjustified invasion of the Falkland Islands, which took place in the midst of negotiations in good faith on the very question of sovereignty—our position must be as I have stated it, that we are not prepared to negotiate about that. Given that, our position equally—as the House will recognise — must be to try to find a way of identifying other topics on which talks can commence leading towards the restoration of normal relations. It was precisely with those factors in mind that, over months, we negotiated to get a clear framework agreed which would allow talks to commence. I am grateful to my hon. Friend for what he has said about the flexibility implied in that approach. I am sure he shares my regret that it did not lead to a more successful outcome.
Mr. A. J. Beith: Does the Foreign Secretary's experience of negotiations not lead him to recognise that they are never likely to succeed if one of the subjects of greatest interest to one side is wholly excluded from the discussions? Has the Prime Minister so little faith in her negotiating team that she cannot rely on it to uphold the essential interests of the Falkland Islanders while the issue of sovereignty is featured in those discussions?
Sir Geoffrey Howe: My experience of negotiations leads me to recognise precisely that point. Indeed, it was for that very reason that we recognised that it would not be fruitful or helpful to see—as the hon. Gentleman puts it — that sovereignty was wholly excluded. We arrived at those arrangements so that the question should be raised, so that our response should be anticipated and understood and so that the parties could then move on to measures designed to begin rebuilding confidence. It was precisely with that point in mind that we reached those arrangements, and that is why I regret the outcome.
Mr. Cyril D. Townsend: May I congratulate my right hon. and learned Friend on the formula that was used to get the talks going in Berne, which at that stage seemed to be perfectly sound and sensible? Does he agree that there is far more that unites our two democracies than divides them, and that both countries could gain tremendously from proper co-operation in the south Atlantic? During the summer, will he have a real go to explain to those on the Falkland Islands that the present position is artificial and that they will gain from closer co-operation between Britain and the Argentine?
Sir Geoffrey Howe: I am grateful to my hon. Friend for his opening remarks. As I said in my statement, it was because we believed that progress towards the normalisation of relations was in the interests not only of the United Kingdom and the Argentine but of the Falkland Islanders that we set about the matter in the way that my hon. Friend has commended.
Mr. George Foulkes: May I also welcome the fact that the precedent of direct talks has now been established? Does the Foreign Secretary agree that, although the initial formula for dealing with sovereignty seems to have failed, there are other mechanisms—such as those that I have suggested to his Department — for sidelining the question of sovereignty and so on, which might be considered?
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As President Alfonsin did us the honour of sending a message containing the British proverb
"Where there's a will there's a way",
will the Foreign Secretary bear in mind a good Scottish saying, which Robert the Bruce learnt from the spider,
"If at first you don't succeed, try, try again"?
Sir John Biggs-Davison: That is what Neville Chamberlain said.
Sir Geoffrey Howe: I fancy that there is a rather larger Welsh than Scottish community in Argentina, but I cannot instantly commend any Welsh proverb to the House. However, I shall certainly bear in mind the approach suggested by the hon. Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes). The failure of our approach, after so much effort had been put into it, is bound to influence the way in which we look at the matter in future. We had designed a method which took account of the interests of both sides, but we shall obviously need to assess carefully the implications of the Argentine attitude, which led to the breakdown of the talks.
Sir Anthony Meyer: Will my right hon. and learned Friend continue undiscouraged in his attempt to find the philosopher's stone and a solution which will at the same time safeguard the long-term interests of the Falkland Islanders and take account of the extreme fragility of the democratic Government in Argentina? The Argentine Government are threatened by military hard men who would like to reassert hard-line Argentine policies towards the Falklands.
Sir Geoffrey Howe: I accept the encouragement given by my hon. Friend. One of the points that we made in our discussions with the Argentines is that, although the present Argentine Government were not responsible for what happened just over two years ago, they have to live with the consequences of that action. Of course, one recognises the importance of the establishment and maintenance of democratic government in Argentina in the context of the entire history of that country.
Mr. John Evans: Did not the talks really collapse because if they start involving the question of sovereignty the cripplingly expensive Fortress Falklands policy, which exists mainly to bolster the Prime Minister's image, will be shown for the nonsense that it is? Is it not a fact that no agreement with Argentina will ever be reached as long as the Prime Minister continues in office?
Sir Geoffrey Howe: So far as I can detect, the hon. Gentleman made two separate observations, both of which are completely invalid. They have nothing to do with the subject. All questions of sovereignty were deliberately and carefully put to one side in the formula that we designed. This series of talks has come to an end because of the Argentine's failure to follow the agreed formula.
Mr. Hugh Dykes: Does my right hon. and learned Friend agree that, while the Argentine Government are completely to blame for this breakdown after such careful preparations—he has handled this matter with great skill — none the less, this is a tremendous tragedy? This country and democratic Argentina should have well-developed friendly relations. There are 180,000 people of United Kingdom origin in Argentina who want desperately to see a solution to all these problems. There is no question of conceding the idea

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of the transfer of sovereignty if, in due course but not now, the subject of sovereignty is on the agenda if the Argentines wish to raise it.
Sir Geoffrey Howe: I fully share my hon. Friend's views about the desirability of restoring more normal relations for human, social, commercial, economic and political reasons with the people and the democratic Government of Argentina. It was for that reason that we took so much care to allow the subject of sovereignty to be raised and to allow our response, as well and frequently advertised, to be made. I am sorry that that formula did not lead us to the other subjects which would have taken us in the direction my hon. Friend has in mind.
Mr. Healey: Is the Foreign Secretary telling the House this morning that Great Britain will never discuss the problem of sovereignty with the democratic Government in Argentina? If not, will he now answer what I put to him in my opening question: why were the Government not prepared to add the word, "yet", or words such as, "now" or "at present", to the statement that they were not prepared to discuss sovereignty?
Sir Geoffrey Howe: The Government were seeking, upon the basis of a plainly stated position—that we are not prepared to negotiate sovereignty—to find a basis from which we could move towards more normal relations. The talks which started on Wednesday broke down not because of the absence of any such word in the formula, but because the Argentines, unfortunately, were not prepared to talk about normalisation without a linkage with sovereignty.

Office, Secretarial and Research Allowance
Question again proposed.
11.22 am
Mr. Tony Banks: I shall wait for the task force to disappear before resuming my speech.
I was trying to point out a little earlier that the working environment in this place militates against hon. Members doing an efficient and proper job for their constituents. My hon. Friend the Member for Hammersmith described most graphically the circumstances under which he found himself working in the Cloisters where there is no privacy, and where clearly hon. Members cannot have discussions on the telephone with constituents or others. That leads to the subject of provision for our staff. There are no facilities in the Cloisters, for example, for additional staff. I work in a small room in the Cloisters. I suppose that I should be grateful for the fact that I am in a room rather than in an open corridor, but there are four desks crammed in that room.
The hon. Member for Mid-Worcestershire (Mr. Forth) who questioned me about county hall might be interested to know that there are larger lavatories in county hall than there are rooms in the Cloisters in which we work. If the Government turn those lavatories into offices, I can think of a few suitable candidates on the Conservatives Benches to use them.
Members of Parliament do not rate highly in the public sympathy stakes. We did ourselves a grave disservice when we came to the House immediately after the June election and had a full debate on our salaries. We inflicted something of a self-injury when we discussed those salaries without fully discussing resources. We voted ourselves — not all of us but collectively — salary increases at the expense of our staff. That was disgraceful. Of all people, politicians should be aware of the need for good timing, if nothing else.
Mr. Dykes: Does the hon. Gentleman agree that the main problem in that debate in July after the independent suggestion made in June before the election was that everyone had agreed that this time round there would be no tampering with the independent recommendation? That was solemnly agreed in writing, as opposed to many occasions recently when frustrating results were produced. Bearing in mind that most other Parliaments have an automatic mechanism for increasing salaries which is outside the control of their Members, does he agree that that is the line along which we should proceed?
Mr. Banks: I believe that we have it partially right now in so far as there will be a linkage with regard to pay. The timing was all wrong. The difficulties in which the Government no doubt felt themselves by accepting the full recommendations were enormous. That could clearly be understood.
We must address ourselves to how we appear to those outside this place. It did not look good, immediately after a general election, whatever the justifications, for us all to be talking about our pay and conditions. It would have been far better timed if that debate had taken place before the election. During the course of the election campaign, we could then have answered the points that would have arisen. It seemed as if Members of Parliament were, first and foremost, looking after their own interests.

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We are not assisted by the press, which is always ready to make snide remarks about Members, some of which are perhaps justified, but many of which are not. Timing is of the essence, and I believe that the timing of our last debate was utterly wrong.
Unfortunately, because of that bad timing, we were unable to give close attention to what I believe to be the equally important matter of resources and facilities necessary to enable hon. Members to do their job properly.
Before my election to the House, I worked for the Association of Broadcasting and Allied Staffs. I should have been appalled if I had gone to that job and been told that I would have £12,000 or whatever, but that I had to find my own secretary, office, office equipment and all the other things necessary to do the job. That is what happens to Members of Parliament. It is a crazy and downright inefficient way to work.
Many people do not know what happens to the £12,000 that we receive currently. Unfortunately, some seem to suggest that it is nothing more than an addition to salary. I should like to give the 1984 budget for my office. You will be relieved to know, Mr. Deputy Speaker, that it is relatively short.
My office is based in Newham, North-West because, as one of the Conservative Members said, all problems are in the constituency, I, therefore, want my office in my constituency. I have a full-time assistant working in that office. The salary and national insurance contributions come to £8,360. I pay the rent, rates, telephone and so on, which come to £2,400. I have a photocopier, and, with paper costs, that amounts to £433 a year. A further £1,500 goes on office equipment, secretarial help and helpers' expenses. That brings me to a total of £12,693. It goes well over our present limit. The balance comes from my salary. I am not complaining about that; I am just saying that even for the relatively modest effort I can put into my office in Newham, that £12,000 is woefully inadequate. My office has to deal with hundreds of constituency matters a month because of the problems of an inner city. We cannot cope unless we have more full-time staff.
I believe that it would be dangerous to give Members of Parliament a substantial increase in cash allowances for administrative expenses. It is well known that some Members use those allowances to supplement their own incomes. Perhaps they need to do so but it is wrong and it should not be condoned. Members should be able to select their own personal staff for all the obvious political reasons, but those staff should be on the payroll of the House. All Members should have separate offices. Perhaps we should make this place a museum and build a proper purpose-built legislature somewhere else, perhaps outside London, which would provide conditions that would enable Members to work properly.
I believe that each Member should be entitled to three staff workers, which would be a mixture of researchers and secretaries. All those workers should be on properly negotiated salary scales. There are strong moves within the House to have proper negotiations for individual workers who work with Members. The range of salaries paid varies enormously and I hope that Members will realise that trade union organisation is as relevant in this place to those who work for Members as it is to those outside.
Members should be able to claim separate expenses for a constituency office and full-time staff. The disposition of staff between Westminster and the constituency should be left to the individual Member.
648
All office equipment should be drawn from the House and returned to it when a Member leaves. It should not be paid for from an annual amount. There would be many advantages in operating such a system because the House could negotiate some advantageous prices for equipment and arrange service contracts.
I have done some costings that are based on a Member having three staff and the sort of equipment that I believe would provide an efficient office. That equipment would include a computer, a teleprinter and the most advanced technical equipment. The cost would be about £45,000 per Member. When that is multiplied by 650 the total is about £27 million. I understand that that is not a figure Members would be ready to receive as an amendment to the motion. Although it sounds rather large, I put the figure to the House because I believe it is a reasonable one if we are to enable Members to have the sort of offices that they should be running on behalf of their constituents.
I do not believe in fifth-form conspiracy theories, although there are many fifth formers on the Conservative Benches. There is clearly a breadth of feeling on both sides that one of the reasons for Members not being given adequate resources is that they would become far too troublesome to their own Front Benches. That can probably be said about both parties when in government. There is a constitutional theory that Members are here to control the actions of the Executive. That might be the constitutional theory, but we know it to be constitutional bull. Individual Members do not stand a dog's chance of controlling the Executive. However, efficient and well-supported Members could keep a Government on their toes. That is why successive Governments have denied us the opportunuty to operate effectively.
We claim to know how to run the country. A few more people might believe us if we proved that we knew how to run our own affairs more efficiently. I shall be supporting the amendment and I hope that it will be supported by Conservative Members. I give notice that there will be a great move within the House among Members on both sides to start increasing secretarial and research allowances to a level which will enable us to be effective in a modern legislature.
11.35 am
Mr. Richard Holt: I welcome this opportunity to contribute to the debate, especially as new Members were almost frozen out of the debate that took place early in this Parliament on Members' salaries and allowances.
When I came to this place from industry, it was my wish and desire that my secretary, who had worked with me for many years, should come here. She was a highly paid and very efficient young lady. We could have just about managed to match her salary in industry, but when she saw the terms and conditions under which, and in which, she would have to work I was not able to persuade her that she could look forward to money and a lovely life in Parliament.
I feel sorry for my right hon. Friend the Leader of the House, because he has drawn a very short short straw. Newly elected Members arrived in this place 12 months ago and they were full of ideas. I remind the House of a well-known novel and film entitled "One Flew Over the Cuckoo's Nest". I am sure that all hon. Members will recall the plot; a perfectly sane person is taken into an

649
asylum and he finishes up more mad than the original inmates. I give notice that I have no intention of becoming one of the cuckoos in that context.
It is right that Members should be allowed to express the view that we shall not put up with the terms and conditions which have prevailed historically in this place, especially when the specious argument is advanced that if we are dissatisfied there are thousands of others who want to come here to take our places. If that argument is taken to its illogical conclusion, we would come here without pay, and we would probably pay a premium to do so, as used to be the practice in solicitors' offices and in the theatre many years ago. That would be wrong and it is wrong that we support secretaries or research assistants out of our own pockets. The state should accept that duty and responsibility.
I spent 25 years in industry, not wishing to become a civil servant. I am now a Member of Parliament, and I still do not wish to become a civil servant. I do not wish to be in any way hogtied to the Civil Service's terms and conditions of employment. I do not see why my secretary has to be adjudicated against a secretary in the Civil Service. I know many people in the Civil Service, my son works in Whitehall, and I have not seen many secretaries in Whitehall working at 8 o'clock, 9 o'clock, 10 o'clock or 11 o'clock at night as many Members' secretaries do so that they can carry out our work more effectively.
Many of us have constituencies which are a long way from London. We have oriented far too much on London. All the thinking is done within London and most civil servants live in or near London. I find that there are few of them in my patch in the north-east of England.
Our role as Members is not that of Members before the war and it is not even that of Members immediately after the war. Our role nowadays is very different. I am asked frequently, now that I have been a Member for more than a year, "How do you find life being a Member? How do you like it? Are you enjoying it?" Various questions are asked, including, "What do you do?" I agree with Lord Peyton that there is no job description for a Member of Parliament. Some Members will do more than others. However, the tendency is to have more full-time Members who are devoted entirely to working for their constituency, constituents and party. If that is to be done properly when a Member represents a constituency that is a long way from London, it is necessary to have a constituency office that is manned properly. There are inconveniences, because it is not possible properly to monitor the local radio station or the local television station if one is domiciled here with a constituency 257 miles away, as mine is. That means that I have to pay someone to monitor for me. If I cannot afford to pay my secretary a proper wage to work with me in London, there is not a great deal of money left at the end of the day to pay someone to work for me in my constituency.
The hon. Member for Berwick-upon-Tweed (Mr. Beith) mentioned advertising. We have our printing and stationery supplies. In many instances we have to pay for our postage, because we have to guard against overstepping a narrow line when we send out letters which could be judged politically wrong in the way we address people. Members of Parliament have to buy their own typewriters. I wonder how many civil servants have had to pay £1,000 to buy a typewriter for the secretaries in their
650
offices anywhere around this area. I wonder how many of them have to pay an annual premium of approximately £100 to ensure that the typewriter is maintained and serviced properly. Typewriter ribbons have to be bought and Members must put up with the inconvenience of hiring a typewriter if their own goes wrong. No civil servant does that. Why should we be welded to the Civil Service in that way?
It has been suggested that 12 months ago we had a debate in which Members' salaries and allowances and car mileage were discussed. I believe that we should have had another debate along those lines today, but this debate is about only two elements, and not about Members' salaries. We shall be in an embarrassing position as long as we have to come to the Chamber time and time again to plead to do the job that we are expected to do. Often, members of the public are misled into believing that we have a great operation, with masses of secretaries and electronic back-up. A moment ago I was handed a piece of paper telling me that I had a telephone call to take outside. If I were in industry I would have a little bleeper, and that bleeper would have bleeped. I would have been able to make a telephone call and saved an earnest and nice gentleman from running around the whole place all day with bits of paper trying to find out whether I was here. I believe that the civil servants are against such small electronic aids and therefore do not allow us to have them.
I spent 25 years in industrial relations worried about terms and conditions of employment for all sorts of people. Little did I know that one day I would have to come here and make a special plea on behalf of my colleagues. I am in a slightly advantaged position in that I am the third oldest of the Members who were elected last year for the first time. I had retired before I became a Member of Parliament. That means that I am in an independent position and can say things which some of my younger hon. Friends cannot say without the embarrassment of making special pleadings.
It is wrong that we are debating the secretarial allowances as four fifths of one relevant percentage. Next year it will be five fourths of another relevant percentage, and the year after it may be two fifths of an irrelevant percentage. All the time we have this mumbo-jumbo which defies easy reading so that we can determine what our secretaries and research assistants should be paid and how many we should have. The amount paid should be adequate to enable the job to be done properly. I do not accept the argument put forward by one of my hon. Friends that we should not equate ourselves with the American Congress. Why not? England is the mother of Parliaments, and we should be in a position to give a lead to the American Congress. If it is right for Congress to have proper resources, it is right for us to have them as well.
Historically, wives of Members of Parliament were expected to react and act rather like vicars' wives and doctors' wives or any other lady in a similar position. They had to be working consorts, without individuality. That is wrong. Some Members' wives do many jobs in constituencies for which they are not remunerated or paid in the same way as doctors' wives. That aspect should be examined.
I did not agree with my right hon. Friend the Leader of the House when he said that he felt a great swell of feeling on this measure during the debate 12 months ago. What he felt by way of a swell was the Back Benchers saying,

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"We do not want what you are seeking to impose upon us. We did not ask you to go away and find something else to impose upon us. We told you that we did not want what you told us you would do." I believe that the same circumstances apply today, and that is evidenced by the number of hon. Members who have spoken or who wish to speak in this debate. We do not want this scheme, any more than we wanted the last scheme, because all these schemes are specious.
At the moment we have a relatively equitable position. I have not heard too many hon. Members complain about the present system. If there was that groundswell of feeling, then, like all the stories that one reads in the press so frequently, I have missed out. That is unfair to me as an individual. Perhaps my right hon. Friend the Leader of the House will tell us his evidence, apart from the groundswell of revulsion against the Government's proposals 12 months ago, from Back-Bench or even Front-Bench Members on both sides of the House that they want a massive change in the way in which the car mileage system operates. I do not believe that there is that feeling. It is true that 12 months ago we rejected those proposals. This is another way of coming back at us and introducing proposals which we do not want.
I shall go into detail with my right hon. Friend the Leader of the House about his proposals. I suggest to him that if the House were mindful enough today to be silly and pass these proposals—I know that the "payroll" is here and not listening—we would do the wrong thing.
The motion refers to cars of
"1300 cc or less
More than 1300 cc and not more than 2300 cc
More than 2300 cc".
Mine is a 2·3 litre car, so I am at the top of the limit. The report recognised that fact and talked about 2301 cc or 1999 cc.
Mr. Beith: I hope that the hon. Gentleman checks his car carefully. He may find that it is 2299 cc. A great many cars are expressed in that way and fall just beyond the limits which the Government have proposed.
Mr. Holt: I am grateful for that intervention. I take as honest the figure written on the back of my car, which says 2·3 litres. I am sure that most right hon. and hon. Members would make exactly the same honest appraisal.
Mr. Forth: The real problem is that many British-made cars are expressed in that way. They say 1290 cc, and will come under the 1300 cc level. If one wanted to trade up, many might say that the best way—I do not agree—is to go for a Japanese car of 1400 cc and obtain the advantages of economy. In a sense, that might well be an incentive to buy non-British.
Mr. Holt: I take my hon. Friend's point. The serious element that I wished to point out is that those figures are specious and in many ways irrelevant. Car engines vary. Perhaps it would be better if we did not specify those figures.
My constituency is 257 miles away. It is a fairly large area, and my mileage for my first year as a Member of Parliament has been greater than 50,000 miles. That is not unusual. I identify those details only because I am more aware of the facts of the mileage I have done. Many of my colleagues represent constituencies in the north-east of England. I remind those responsible that beyond London are the north-east, the north-west, Scotland and other areas, and we should take them into consideration.
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Cars depreciate very rapidly, and people doing the mileages to which I have referred need to change their cars frequently. I do not accept the argument that it is better to buy an older second-hand car, because the maintenance charges today are excessive.
We should not have to be involved with "bull rings," mileages and "specials". As I am no longer associated with industry, I do not put myself in the same category as, for example, salesmen working for Crosse and Blackwell or Mars. The most important thing that salesmen do every day is to work out their mileage and car allowances to submit to the sales manager. That is not the way in which I want to do my job as a Member of Parliament.
I cannot believe that it is seriously intended that when I leave my garage at my home in my constituency and drive the 11 miles to my constituency office I must on each occasion write it down, and then say whether I returned home immediately or called in at the Conservative club for a drink on the way back. Who knows whether that is parliamentary business? I might have been meeting some people on quite important business [Interruption.] Always drink and drive within the limit. [Interruption.] If I were drinking and needed to be driven, as I did last night—[Interruption.] Who pays the car allowance for the person who kindly gives one a lift in that context? Does one have to ask that person to lift up the bonnet of the car to find out the cubic capacity so that one can properly fill in the return and keep busy the bureaucrats who sit in the Fees Office working out exactly what hon. Members should or should not be putting in their mileage claims?
There is nothing in the provisions for car mileage allowance that should commend itself to any thinking Member of this House. Those who go into the Lobby to support the motion will not have thought about it; they will merely have gone into the Lobby because that is part and parcel of their job. Today we have a free vote—or so I am told. Let us see some hon. Members exercising their freedom of mind when going into the Lobbies.
I find myself in a very difficult position. I cannot support the amendment tabled by the Liberal party, because I do not think it is the right amendment. We should be opposing all the proposals and telling the Government not to put such proposals before the House. This is not what we want. We want to be treated as honourable Members of Parliament. We want to be given a mileage allowance with the least possible amount of bureaucracy when we submit our claims. We do not want to have to sit down with our diaries, stopwatches and log recorders, and then have to worry about which car had been used and on what day.
Mr. Christopher Hawkins: My hon. Friend argues that we shall have to sit down with our diaries and various other aids to work out our expenses under the proposed system. How does he work out his mileage without consulting his diary? Members have to work out roughly how many miles they travel in their constituencies. I set my trip meter and record the mileage in that way.
Mr. Holt: I am sorry that my hon. Friend does not appear to understand what is involved in the proposals. At present we have a form dealing with what might be called rough mileage. When we first come to this House, we go to the Fees Office and fill in a form to determine our exact mileage, so that in future we have only to say that we have

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made a journey from here to our home or to our constituency. It is the mileage within the constituency that is a matter of dispute or debate.
What will happen on the day when my hon. Friend the Member for High Peak (Mr. Hawkins) forgets to set his trip meter? I am sure that he will guess the mileage, just as any other hon. Member would. His intervention underlines the fallacy of the proposals.
I hope that hon. Members will not support the motion dealing with the office, secretarial and research allowance. I hope that hon. Members will support the amendment, because at least it goes in the right direction, although not as far as I should like it to go.
I hope that hon. Members will not accept the proposals concerning car mileage allowance, because they are monstrous.
Several Hon. Members rose—
Mr. Deputy Speaker (Mr. Ernest Armstrong): Order. I remind the House that the debate must finish at 12.38 pm
11.56 am
Mr. Alan Williams: I hope that the hon. Member for Langbaurgh (Mr. Holt) pays greater attention to detail in assessing his drinking limit when driving than he seems to have done in assessing the cubic capacity of his car. I would hate to find that he faces the same disappointment on the former as I know he will face on the latter when he looks at his log book.
I should like first to make a few comments on the motion concerning the Lord Chancellor's salary. I find it somewhat peculiar that the Leader of the House should be defending the preservation of those very traditional differentials that he, among others, berates trade unionists throughout the country for trying to preserve and observe. The Opposition will not oppose the motion. I only wish that the extra income to be paid to the Lord Chancellor could in some way be reflected by higher efficiency within his Department.
Not many people in this House realise the size of the Lord Chancellor's Department. The legal side of Civil Service activities absorbs twice as many civil servants as the old Department of Industry used to absorb—16,000 as compared with 8,000. If the Lord Chancellor's increase were reflected in efficiency, one would expect that perhaps the reply to the Commission on Legal Services would have emerged from that Department sooner than the four years that it took for the Government to respond to only half of the propositions that were within the commission's report.
We are being asked to vote extra money to a Minister who is not answerable to this House of Commons and is only vicariously answerable to it. The Attorney-General answers questions at the Dispatch Box allegedly on behalf of the Lord Chancellor, although the Attorney-General is not even in the same Department. Often he has to answer questions from hon. Members by saying that he will draw their comments to the attention of his noble and learned Friend.
If we are voting extra money for the Lord Chancellor, we should also try to ensure that there is a greater degree of parliamentary scrutiny. That could be done by the establishment of a Select Committee. That was at one time proposed but the proposition was carefully killed off. It is
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about time—I say this as a non-lawyer and I am sure that it is sacrilegious to lawyers in all parts of the House—that we reviewed the organisation within Parliament for dealing with our control and scrutiny of a critically important sector. I suspect that we have inherited a system that no longer matches the needs of this House in terms of parliamentary accountability.
I congratulate the Leader of the House on enabling us to have a debate on the office, secretarial and research allowance and the car mileage allowance at this time, when a considerable number of hon. Members have been able to take part. We have a tendency to want to discuss such matters sub rosa, and I can understand that. We know how embarrassing it is to have to come to this House continually to moan about our pay and about the expenses available for our secretaries and so on. At some stage, Government—of whichever party—will have to find a system that avoids the ritualistic nonsense that we find so embarrassing and leads to public misunderstanding. Sometimes that misunderstanding is fuelled by broadcasts made by hon. Members who seem to pursue publicity in these matters rather than being concerned with the accuracy of what they say.
Like my hon. Friend the Member for Hammersmith (Mr. Soley), when I first came to the House my total territorial claim on its space was one of the little cupboards in the Corridor between the Members' Lobby and the Library of the House of Commons. My first desk was obtained by my having to squat on one of the tables in the Corridor above the Aye Lobby. Eventually, by established pattern, I was then able to persuade the Serjeant-at-Arms that, since I was there continually with my papers, I should be provided with a filing cabinet so that the cleaners could do their work properly. We have faced such nonsense as we have gradually evolved a more appropriate range of expenses and services for hon. Members.
The hon. Member for Newham, North-West (Mr. Banks) referred to the Companies Acts. The hon. Member for Leicester, East (Mr. Bruinvels) says that we are lucky to be here, and that it is an honour. Of course that is true, but it does not justify ignoring for ourselves and those who work for us the factory and office laws that we have passed for the rest of the community. No one is disputing our unique privilege to be here, however transient our stay. I say that as one who has always been in a marginal seat. However, we should not allow that to deflect our attention from the fact that while we are here we should try to do our job as effectively as possible and demand the services and facilities that enable us to do so on behalf of our constituents.
I support the move to link the rate of change of pay of our secretaries to the Civil Service, although I am not sure whether we are doing them a kindness. If they had had that linkage, our secretaries would have been worse off because in the past four years the Civil Service has seen its income rise by 20 per cent. less than the rise in the cost of living, whereas in general our secretaries have managed to keep in line with the rise in the the cost of living.
I support the amendment in the name of my hon. Friend the Member for Battersea (Mr. Dubs). I congratulate him, my hon. Friend the Member for Hammersmith and Conservative Members who spoke in support of it. My hon. Friend the Member for Battersea said—I am sure that he said it jocularly—that he suspected that there was collusion between the Front Benches to deprive the

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Back Benches of information and to ensure that Back Bench Members were so busy looking for information that they had no time to be mutinous towards the Front Benches. All that I can say is that if there has been such collusion and if that were the objective, it seems to have signally failed on both sides of the House.
As my hon. Friend rightly said, we as a Parliament work longer hours and have a longer parliamentary year than any other Parliament in the Western world. Our case load would not be accepted in many other Parliaments. The requirement of a researcher in addition to a secretary that my hon. Friend specified is not a particularly immodest request. I should have thought that it was almost a basic requirement. I urge hon. Members on both sides of the House to support the amendment not because it is necessarily the right figure, as my hon. Friend said, but because it shows that we as Members are determined to do properly the job for which we were elected and want the resources and facilities to enable us to do so.
If new Members do not stand up now and protest, they will become inured to the system and battle weary, like the Leader of the House and myself. After 20 years' struggling one eventually thinks that this is the norm and the way that things should be done. If one is not careful, one becomes romantically attached to surviving in deprivation when trying to do the work for which one is elected. We are asking not for pay for ourselves but for resources to do the job that we are here to do. It is encouraging to see so many new Members in the Chamber. I hope that while they still remember what civilised conditions in industry and commerce are like, they will strike a blow for not just this generation but future generations of hon. Members.
With regard to the car allowance, some hon. Members have said that the 39p a mile upper limit is high. When I look at the congestion in the Car Park, I think that it might be a better idea to have an extra category of offering hon. Members 50p a mile not to bring their cars here. I should like to canter a hobby horse of mine. Hon. Members should be warned that their passes are not an absolute privilege. Some hon. Members show scant regard for their colleagues by parking their cars so that they prevent others from moving theirs. They also give their passes to their secretaries, so that our floors become blocked up with their cars.
I understand, as the hon. Member for Eltham (Mr. Bottomley) said, that there is a dispute about whether we should have a single or a split rate. This is a personal view. It makes sense to try to relate the expenses paid to the cost that we incur. If we look at what is implicit in the scales, we see that the RAC is saying that it costs between 18p and 39p a mile to run a car. If there is such a range, it is unjustified to overpay some hon. Members by about 7p a mile, if we take the middle rate as the standard rate, while underpaying other hon. Members by 14p a mile. That does not make sense if we are trying to establish a logical basis for our costs and expenses.
There must be bands as the scheme has to be administratively workable, as the Leader of the House rightly said. The Fees Office has had to be closely consulted because eventually it will have to administer the system. The hon. Member for Berwick-upon-Tweed (Mr. Beith) seemed to fall into a logical trap. He felt that there was a temptation to hon. Members to move up market because there were three bands for cars, and his solution was to have four bands. All that does is put more people at the margin of a band. Many more people would find it
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to their advantage to change their car and shift from one band to another. I appreciate the point that the hon. Gentleman was trying to make, but his solution does not meet in any way the requirements that he is setting.
Mr. Beith: My preferred solution is not to proceed with the scheme at all, but, if we do, it would be unjust if it were not banded in something like the way that I suggest.
Mr. Williams: I do not see that the unjustice arises, but that is a personal view. No doubt the hon. Gentleman will take the opportunity to express his concern on the matter in the Lobby.
The ceiling of 20,000 miles in respect of the allowance seems perfectly rational. The figures of 18p, 25·9p and 39p contain an element for depreciation. One reaches a stage where the mileage that one is doing more than covers the depreciation. We as Members of Parliament tend to drive abnormal mileages:in a year, so the RAC's assessment on a 10,000 mile basis would not be relevant to us because I doubt whether many hon. Members do as small a mileage as that.
Like the hon. Member for Clwyd, North-West (Sir A. Meyer), I have a constituency that is 200 miles away so that means that one often does a round trip of 400 miles in a single day. I do not go along with the argument that we should all be forced into using small cars. If we have to provide a bus service for ferrying our familes up and down the motorway, together with their luggage and the kitchen sink, it is for us to determine what car is appropriate for our work.
Mr. Bermingham: Does my right hon. Friend agree that the fatigue and safety factor should also be taken into account in deciding on the type of car needed for long-distance driving? Is he aware that research shows that the use of a larger capacity engine cuts fatigue and enhances safety in long-distance driving?
Mr. Williams: That is absolutely true. That is the ergonomics of car design. Larger cars are designed for long-distance travel. By driving to Swansea and back, I put in a full day's driving work in addition to my normal day's work. Other hon. Members have to drive even greater distances. If we undertake distances that lorry drivers must, not exceed and then begin a day's work on top of that, it is scarcely self-indulgent to wish to travel in comfort and safety.
My hon. Friend the Member for Thurrock (Dr. McDonald) asked me to draw attention to the amendment in her name, which has not been moved but about which she has written to the Leader of the House. Perhaps the right hon. Gentleman will comment on that, as some hon Members recently made car purchase decisions before they became aware of the proposed changes in allowances.
In conclusion, there has been virtually unanimous support for the Opposition amendment to increase the secretarial allowance. I hope that we shall take that unanimity to its logical conclusion and walk together into the same Lobby on this non-party, House of Commons matter.
12.11 pm
Mr. Peter Bruinvels: I find myself in some difficulty on this matter. One does not have to be old to be a rebel. It is just as easy when one is young. It is regrettable that every year we have to discuss whether

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sufficient finance is available. I should much prefer a linkage arrangement which could then be dealt with year by year along the lines of the Civil Service system.
I represent a marginal constituency, and I must confess that I find it difficult to cope within the £12,000 allowed for secretarial and research assistance. For some reason, I seem to attract 60 to 80 letters per day, so I need a full-time secretary. I appreciate that some hon. Members share secretaries because they cannot cope on the present allowance. That is very worrying. I should also like secretarial help in my constituency. I have an office there, but I do not have a secretary. I try to run things from here, but that is not satisfactory. The little help that I have in my constituency has to be paid for out of my salary. In passing, it should be made absolutely clear that the £12,000 is not an addition whacked on to our salaries. It has nothing to do with our salaries.
There is thus some attraction for me in the Opposition amendment to increase the secretarial and research allowance to £17,000. The danger about that is that if all that extra research assistance became available the Table Office would be inundated with additional written and oral questions, which is not the result that we seek. Many of us receive offers of research assistance from people at the universities, but the people whom one can really trust are surely those who work in the Library, which provides an excellent research service.
I am most concerned about how we should proceed and how to make ends meet. I understand that this is to be a free vote, but I noticed a fair proportion of the payroll vote outside the Chamber, so one may assume that the Government resolution will be passed and that at least an extra £437 will be available. Nevertheless, I hope that further improvements can be made. I do not think that every hon. Member should be entitled to an allowance of £17,000. It should be subject to full justification. Moreover, I believe that a certain sum should be set aside exclusively for secretarial help and another sum for research. Having been associated with research work in the House 10 years ago, I can confirm that there have been great improvements in research facilities, access to the Library, and so on. I recall that the payment in those days was scarcely rewarding, but that is no criticism of the Members concerned. The money was simply not available. The Opposition frequently accuse Conservative Members of having two jobs, but one can understand the reason, given the inadequacy of the current secretarial and research allowance.
There are major difficulties about the mileage allowance. As I have said many times, the House is the guardian of the public purse and we must not be seen to be taking advantage of a system from which people outside cannot benefit. I appreciate the intention behind the bandings proposed by my right hon. Friend the Leader of the House, but I am not convinced that the aim will be achieved. The allowance will cover wear and tear on the particular type of car. I believe that this will encourage hon. Members to go for gas-guzzlers—to buy up rather than to buy down. As the right hon. Member for Swansea, West (Mr. Williams) said, one needs a reliable vehicle for long journeys on motorways. Nevertheless, we should not encourage hon. Members to purchase larger cars. We should encourage the use of the middle-of-the-road type of car. [Interruption.] Hon. Members may laugh, but it is
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clear from the debate that many of them have to look at the back of their cars to discover the engine capacity. That being so, we might do better to retain the present system and have an allowance of 25·9p per mile irrespective of capacity. The mileage, of course, must always be justified, but a standard rate seems the simplest proposition.
If we adopted a linked system, we should avoid the need to come back each year, cap in hand, to see if we can do a little better. Certainly, I do not think that debates of this kind improve our standing outside. The right hon. Member for Swansea, West referred to my comment that it is an honour to be a Member of this House. I genuinely mean that. Reference has been made to hon. Members lacking proper facilities and being given just a little locker. I have such a locker. [Interruption.] I hear someone commenting that I could probably get inside it. Fortunately, however, I also have a desk. We must accept the facilities available and make the best possible use of them. We also need the best possible secretarial and research assistance.
I urge my right hon. Friend, however, to reconsider the mileage allowance. I do not believe that the Liberal spokesman, the hon. Member for Berwick-upon-Tweed (Mr. Beith), has found the right solution. I understand, too, that the Inland Revenue is waiting in the wings to jump on us if we continue with a standard rate of 25.9p per mile, but I still think that that is the best system. I repeat that it is an honour and a privilege to be here. We need a larger secretarial allowance, but we should retain the present mileage allowance system.
12.20 pm
Mr. Peter Pike: I support the amendment on the secretarial allowance. This is not additional money for Members of Parliament themselves; it is additional money to enable us to do our job properly. Many Members of Parliament feel frustrated because they cannot adequately deal with the problems of their constituencies. They do not have sufficient financial resources to do so.
It should be up to us to determine how the £12,000—or £17,000, as I hope it will be—should be used. The Member should decide whether he needs a secretary in his constituency, a secretary in the House, a research assistant, and so on. I also recognise the fact that the questions of advertising, advice bureaux and what equipment is needed will vary from Member to Member. In my view, however, £12,000, even with the marginal increase proposed by the Leader of the House, is insufficient to allow an hon. Member to do the job properly, as we all wish to do. The package of deals brought in last year did not deal with the problem properly. Unfortunately, a proposal which would have provided more money was not accepted. I hope that we will make amends today.
Hon. Members should be able to offer their staff reasonable pay and conditions. Twelve thousands pounds is not adequate to employ a full-time secretary and a part-time assistant at London rates, when one bears in mind national insurance contributions and other additional expenses. I believe that if an hon. Member is to do his job properly, a full-time secretary and half a research assistant are the minimum that he needs. Even with £17,000, we would not be over-resourced or over-provided. That would be the minimum.

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I have no objection to the proposal that the allowance should be indexed in some way so that in future years we would not need to debate these difficult issues here. Members' pay could be treated in the same way. However, we must be sure that the base is correct before we devise a formula to take account of the need for uprating each year.
The amendment would be a step in the right direction. I intend to be a full-time Member of Parliament. I have no other sources of income. I depend on my allowances to enable me to do my job. At present, I cannot do the job as adequately as I would wish, because I do not have the means to employ a research assistant.
The question of mileage allowance is very complex. Before I heard the debate I was prepared to support the Liberal amendment. That seemed to be a reasonable compromise. Having listened to the debate, I feel inclined to vote against all the proposals before us, because I do not believe that we have found the solution. If the motion and the amendment are defeated today, I hope that the Leader of the House will think again and bring forward a better system.
Mr. Beith: In case the hon. Gentleman does not succeed in finding enough hon. Members to join him to defeat both proposals, should he not take the precaution of voting for the Liberal amendment?
Mr. Pike: I shall bear that suggestion in mind.
It is difficult to find the right formula. I recognise that the situation varies considerably between constituencies, and that the question of the distance between the constituency and London is very important. Hon. Members who represent Scottish constituencies are in a far worse position than I am, with my constituency in north-east Lancashire, but London Members are in a different situation again.
Last week I looked at a map of the constituencies when I was considering the mileage limits. I had thought that my constituency was a reasonable size, but some of the constituencies in the south-west and in Scotland and Wales are considerably larger.
When thinking about the distances which hon. Members may have to travel to do their constituency business, I became somewhat concerned that the upper limit of mileage for the higher rate of allowance might be totally wrong in some circumstances.
I am dubious about the higher mileage allowance for cars of over 2300 cc. We are told that matters will balance out and that in theory a Member with a large car will not be in a better financial position than the Member with a car in the middle range. That may be so, but I know that with the higher allowance I could afford to run a car of over 2300 cc. Without that allowance, I could not afford to do so. There is an encouragement for Members, therefore, to upgrade their cars and buy a petrol-guzzler. In a time of energy conservation, it is not sensible to give Members that encouragement. We must think about that more carefully.
I would find it attractive to run a larger car than I need. My car is a 1600 cc Cortina Crusader estate. I can travel down the motorway in comfort, cruising comfortably at around the speed limit. [HON. MEMBERS: "Oh."] I chose my words with care. There is no need for me to run a larger car. I hope that the Leader of the House will think again and bring forward a more sensible proposal.
12.27 pm
Mr. Biffen: First, may I say to the right hon. Member for Swansea, West (Mr. Williams) how much I appreciated the fact that he ensured that the debate did not pass without reference to the resolution concerning the Lord Chancellor. I shall ensure that my noble Friend knows that he has the benediction of the House. I fear that he may not be too excited at the idea of a departmental Select Committee for his office, but I am pleased that the House should have seen the force of the argument in respect of that resolution.
I turn to the amendment in the name of the hon. Member for Battersea (Mr. Dubs). In my household, the secretarial allowance is a matter of more than domestic concern. I came here today feeling sympathetic but, alas, no more than that.
The hon. Gentleman and many of my colleagues have essayed a very interesting argument. A case can certainly be mounted for more facilities for hon. Members, although many people will doubt whether the provision of more facilities has a very direct impact upon our effectiveness. The matter has been debated over many years. However, the debate has now widened to include a new idea—that of improved facilities for the Member in his constituency. It might be asked why there should be a London rate for an element of a pay package which relates to help in the constituencies. I make that point only to demonstrate that we are facing a complex series of arguments which will be fiercely contested, and which cannot be resolved this morning. Although—
Mr. Tony Banks: Will the right hon. Gentleman give way?
Mr. Biffen: I have less than 10 minutes. The hon. Gentleman is a great addition to the House—I hope that that will help him.
What is being proposed is an increase in allowances of about 40 per cent. That is a rather formidable proposition for a Friday morning. We take comfort from the fact that the Government have said that they accept the Top Salaries Review Body proposal that, every four years, there should be a fundamental review of our allowance structure. Th. s morning we should console ourselves with the modest but nonetheless tangible advantages that the Government's motion offers.
Motor mileage has attracted the most protracted controversy. I understand that the hon. Member for Thurrock (Dr. McDonald) could not be here to move her amendment and I appreciate the chivalry of the right hon. Member for Swansea, West in standing in. The amendment would pay the present rate, which is higher than the proposed rate, for cars under 1·3 litres, to any person who had purchased that car before 20 July. I should be an immediate beneficiary as I do most of my constituency work in a Mini. Hon. Members have exchanged their motoring experiences this morning and I thought that I had better get mine out of the way, especially as they are so unprepossessing as compared with the experiences and styles of others—not least my hon. Friend the Member for Langbaurgh (Mr. Holt). I do not believe that that rabbit will run as it would confer an extraordinary advantage quite fortuitously according to the date of purchase and would establish a principle and precedent that would be an endless fascination to all of those who watch how we handle our affairs, not least in respect of ourselves.

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The hon. Member for Berwick-upon-Tweed (Mr. Beith) moved the amendment that provided the core of the debate. His amendment would divide into two the middle rate of the allowance proposed by the Government. One would apply to cars between 1,301 cc and 1,600 cc and another for cars between 1,601 cc and 2,300 cc. I understand the consideration that prompted him to take that view and have given it careful consideration but, on balance, I have concluded that the Government cannot accept it for two reasons. First, there is a balance to be struck between the improved accuracy of a greater number of tiers and the administrative complexity of the new scheme. The complexity would be increased if the hon. Gentleman's amendment were adopted.
Secondly, and more significantly, the amendment proposes that while the rate payable to Members who drive cars between 1,601 cc and 2,300 cc should increase, the rate for the 1,301 cc to 1,600 cc category should remain at 25·9p, as specified in the Government's proposal. That would introduce an inconsistency. The 25·9p was arrived at by applying the formula that was used by the inquiry team to engine sizes across the range from 1,301 cc to 2,300 cc and taking an average. If it is to apply only to cars between 1,301 cc and 1,600 cc it should, on the basis of that formula, be reduced to 22·9p. Failure to make that reduction would mean that Members who drive cars in that category would be reimbursed more than the cost and could therefore find themselves subject to demands for income tax on the profit element. I do not believe that that would be acceptable. That is not merely a pedantic point—it goes to the heart of our dilemma.
We are currently in line with a truncated Civil Service formula. The formula with which we were identified previously moved without difficulty. It then became a two-tier mileage formula and the automatic link was not proceeded with because the House reacted sharply against it. We have remained merely with the top figure of the Civil Service arrangements. There is a real likelihood that it would be considered taxable by the Inland Revenue in those circumstances. It is therefore essential for the House to have a system in which the cost of motoring is more or less matched by the allowance. That is why the variables of engine size and of mileage are central. The proposal is drawn from external evidence supplied by the Royal Automobile Club and is therefore entirely justifiable to the public.
We must always remember that we live in a goldfish bowl and that the arrangements that we strike in regard to our expenses will quite properly be monitored by a world outside. In that context, it is thought appropriate to have a 25,000-mile check. I have heard what the House has said and realise what deep feeling there is. As I am not in the least interested in driving bull-headed through these matters, I can give an undertaking. I should like to examine the matter again with colleagues in the light of what has been said so that we can ensure that administration of the scheme is sensible and does not bear the remotest relationship to the Star Chamber image that a few of my hon. Friends drew. I do not deny their enthusiasm. This place exists only on a sense of decent and honourable relationships. It is not intended that there should be such a scorching monitor. I take account of the strong feelings on the matter and shall examine it again.
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Over the years, we have had a multi-tier system of motor mileage and a single-rate system. I do not feel so confident that what is being advanced today will never be beyond question or recall, but the proposals before the House today are a practical attempt to resolve what could be a difficult problem for us. They have been constructed in the light of evidence that has been proffered by the Peyton report and in the light of where the effective monitoring and evidence falls with the RAC arrangements. On that basis, I think that we can be fair to ourselves and fair to the public.
Question put, That the amendment be made:—
The House divided: Ayes 52, Noes 95.

AYES

Alton, David

Hogg, N. (C'nauld & Kilsyth)

Atkinson, N. (Tottenham)

Holt, Richard

Beith, A. J.

Howarth, Gerald (Cannock)

Bermingham, Gerald

Hughes, Dr. Mark (Durham)

Bowden, Gerald (Dulwich)

Janner, Hon Greville

Brown, M. (Brigg & Cl'thpes)

King, Roger (B'ham N'field)

Bruce, Malcolm

Knight, Gregory (Derby N)

Bruinvels, Peter

Lawler, Geoffrey

Cartwright, John

Leigh, Edward (Gainsbor'gh)

Crowther, Stan

Lloyd, Tony (Stretford)

Dalyell, Tam

McWilliam, John

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

Pavitt, Laurie

Deakins, Eric

Pike, Peter

Dicks, Terry

Shore, Rt Hon Peter

Dobson, Frank

Sims, Roger

Dover, Den

Snape, Peter

Dubs, Alfred

Soley, Clive

Evans, John (St. Helens N)

Stewart, Rt Hon D. (W Isles)

Forth, Eric

Straw, Jack

Foulkes, George

Thompson, Patrick (N'ich N)

Franks, Cecil

Tracey, Richard

Freud, Clement

Wells, Bowen (Hertford)

Gale, Roger

Williams, Rt Hon A.

Galley, Roy

Young, David (Bolton SE)

Hamilton, Neil (Tatton)

Hawkins, C. (High Peak)

Tellers for the Ayes:

Hayes, J.

Mr. Tony Banks and Mr. Chris Smith.

Hind, Kenneth

NOES

Ancram, Michael

Howard, Michael

Atkins, Robert (South Ribble)

Hunt, John (Ravensbourne)

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

Jopling, Rt Hon Michael

Baker, Nicholas (N Dorset)

Kershaw, Sir Anthony

Berry, Sir Anthony

Lang, Ian

Biffen, Rt Hon John

Lawson, Rt Hon Nigel

Bottomley, Peter

Lennox-Boyd, Hon Mark

Bottomley, Mrs Virginia

Lilley, Peter

Boyson, Dr Rhodes

Lloyd, Ian (Havant)

Brittan, Rt Hon Leon

Macfarlane, Neil

Brooke, Hon Peter

MacGregor, John

Bryan, Sir Paul

MacKay, John (Argyll & Bute)

Butler, Hon Adam

Marland, Paul

Carlisle, Kenneth (Lincoln)

Mates, Michael

Cash, William

Mather, Carol

Clarke, Rt Hon K. (Rushcliffe)

Mawhinney, Dr Brian

Colvin, Michael

Miller, Hal(B'grove)

Cope, John

Mills, Iain (Meriden)

Couchman, James

Mitchell, David (NW Hants)

Currie, Mrs Edwina

Molyneaux, Rt Hon James

Douglas-Hamilton, Lord J.

Moore, John

Durant, Tony

Morrison, Hon P. (Chester)

Eggar, Tim

Needham, Richard

Forsythe, Clifford (S Antrim)

Nelson, Anthony

Fraser, Peter (Angus East)

Neubert, Michael

Garel-Jones, Tristan

Newton, Tony

Goodlad, Alastair

Nicholls, Patrick

Gow, Ian

Normanton, Tom

Hamilton, Hon A. (Epsom)

Page, Sir John (Harrow W)

Havers, Rt Hon Sir Michael

Page, Richard (Herts SW)

Hayhoe, Barney

Patten, Christopher (Bath)

Heathcoat-Amory, David

Patten, John (Oxford)

663

Percival, Rt Hon Sir Ian

Stevens, Lewis (Nuneaton)

Pollock, Alexander

Stradling Thomas, J.

Rees, Rt Hon Peter (Dover)

Taylor, Teddy (S'end E)

Rhodes James, Robert

Thompson, Donald (Calder V)

Ridley, Rt Hon Nicholas

Thornton, Malcolm

Robinson, Mark (N'port W)

Townsend, Cyril D. (B'heath)

Rumbold, Mrs Angela

Trippier, David

Ryder, Richard

Viggers, Peter

Sainsbury, Hon Timothy

Waddington, David

Scott, Nicholas

Wakeham, Rt Hon John

Shaw, Giles (Pudsey)

Waller, Gary

Shaw, Sir Michael (Scarb')

Watts, John

Smith, Tim (Beaconsfield)

Wheeler, John

Spicer, Jim (W Dorset)

Whitney, Raymond

Squire, Robin

Wolfson, Mark

Young, Sir George (Acton)

Mr. Douglas Hogg and Mr. John Major.

Tellers for the Noes:

That, in the opinion of this House, the limit on the allowance payable to a Member of this House in respect of the aggregate expenses incurred by him for his Parliamentary duties as general office expenses, on secretarial assistance and on research assistance should be determined as follows—

5

(a) for the year ending with 31st March 1985, the limit should be the amount obtained by increasing £12,000 by four-fifths of the relevant percentage,

10

(b) for any subsequent year the limit should be the amount obtained by increasing the limit applicable to the immediately preceding year by the relevant percentage (so that, if the relevant percentage for any year is nil, the limit remains the same for that year), and for the purposes of this paragraph the limit applicable to the year ending with 31st March 1985 shall be taken to be what it would have been if in paragraph (a) above the words 'four-fifths of had been omitted.

In this Resolution 'year' means a year ending with 31st March, and for the purposes of this Resolution—

15

(i) the relevant percentage for any year is the percentage by which the amount of salary (exclusive of allowances and overtime) payable for that year to a person in the Home Civil Service at the maximum point on the scale for Senior Personal Secretaries and in receipt of inner London weighting exceeds the corresponding amount for the immediately preceding year;

20

(ii) any fraction of a pound in the amount obtained under paragraph (a) or (b) above for any year shall be treated as whole pound if it is not less than 50 pence, but shall otherwise be disregarded.

Mr. Speaker: We now move to motion No. 2, which is to be moved formally.

5

That, in the opinion of this House, the following provision should be made with respect to the rates of the car mileage allowance payable to Members travelling on Parliamentary duties and the rates applicable to the car mileage allowances payable in respect of journeys by the spouse of a Member and journeys by persons in respect of whom the secretarial and research allowance of a Member is payable—

(1) The allowance payable in respect of a journey commenced in the period beginning with 1st October 1984 and ending with 31st March 1985 shall be payable—

10

(a) subject to the limit specified in paragraph (3) below, at the rate per mile shown in column 2 of the following Table in relation to the engine capacity of the vehicle used for the journey; and

(b) in respect of miles in excess of that limit, at the rate per mile shown in column 3 of that Table in relation to that engine capacity.

TABLE

Engine capacity

Mileage up to Limit

Further mileage

15

1300cc or less

18p

11·3p

More than 1300cc and not more than 2300cc

25·9p

14·7p

More than 2300cc

39p

19·5p

20

(2) Paragraph (1) above shall have effect in relation to journeys commenced in the year beginning with 1st April 1985 and each subsequent year with the substitution, for the rates shown in the Table, of rates calculated, on the principles exemplified in Appendix I to the Report of the Independent Inquiry, from the figures in the edition of the Royal Automobile Club's Schedule of Estimated Vehicle Running Costs published in or about the April of the year in question.

25

(3) For the purpose of this Resolution the limit on the number of miles in respect of which car mileage allowance may be paid at the rate specified in column 2 of the

Question accordingly negatived.
It being more than three hours after the first motion had been entered upon MR. SPEAKER proceeded, pursuant to the order [18 July] to put the Questions necessary to dispose of the motion and the motions relating to car mileage allowance and Parliament.
Main Question put and agreed to.
Resolved,
Motion made, and Question proposed,

Table shall be 10,000 miles for the period beginning with 1st October 1984 and ending with 31st March 1985 and 20,000 miles for the year beginning with 1st April 1985 and for each subsequent year.

30

(4) Arrangements shall be made for ensuring that claims made for car mileage allowance in respect of miles travelled in excess of 25,000 miles in any year are supported by particulars of the journeys to which the claims relate.

(5) In this Resolution—

35

'the Report of the Independent Inquiry' means the Report of the Independent Inquiry into Motor Mileage Allowance for Members of Parliament to the Leader of the House of Commons (House of Commons Paper No. 469 of Session 1983–84);

'year' means a year beginning with 1st April.—[Mr. Biffen.]

Mr. Clement Freud: On a point of order, Mr. Speaker.
Mr. Speaker: I would rather put the Question first. Does the hon. Member wish to move the amendment in the name of the hon. Member for Thurrock (Dr. McDonald)?
Mr. Freud: No, Sir. On a direct point of order, Mr. Speaker. You will know that when the House considered the Lloyd's Bill, members of Lloyd's were persuaded not to vote on it.
Mr. Speaker: Order. I shall deal with that matter later. Is it directly involved with this motion?
Mr. Freud: It is directly involved. In the case of the mileage allowance, will you rule whether Ministers who are supplied with cars and have no direct interest in the mileage allowance be instructed whether they are allowed—
Mr. Speaker: Order. I can put the hon. Member right on that. This is a matter of public policy and Ministers have every right to vote
I understand that the amendment in the name of the hon. Member for Thurrock is not to be moved. I call the hon. Member for Berwick-upon-Tweed (Mr. Beith) to move his amendment.
Amendment (a) proposed to the Question, to leave out lines 16 and 17 and insert—

'More than 1300 cc and not more than 1600 cc

25·9p

14·7p

More than 1600 cc and not more than 2300 cc

29p

14·7p'

Question put, That the amendment be made:—
The House divided: Ayes 15, Noes 95.

Division No. 420]

[12.49 pm

AYES

Alton, David

Leigh, Edward (Gainsbor'gh)

Beith, A. J.

Sims, Roger

Bowden, Gerald (Dulwich)

Straw, Jack

Brown, M. (Brigg & Cl'thpes)

Wells, Bowen (Hertford)

Bruce, Malcolm

Young, David (Bolton SE)

Crowther, Stan

Hamilton, Neil (Tatton)

Tellers for the Ayes:

Hayes, J.

Mr. John Cartwright and Mr. Clement Freud.

Hind, Kenneth

Howarth, Gerald (Cannock)

NOES

Ancram, Michael

Bottomley, Mrs Virginia

Atkins, Robert (South Ribble)

Boyson, Dr Rhodes

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

Brittan, Rt Hon Leon

Baker, Nicholas (N Dorset)

Brooke, Hon Peter

Berry, Sir Anthony

Bryan, Sir Paul

Biffen, Rt Hon John

Butler, Hon Adam

Bottomley, Peter

Carlisle, Kenneth (Lincoln)

666

Cash, William

Nelson, Anthony

Clarke, Rt Hon K. (Rushcliffe)

Neubert, Michael

Colvin, Michael

Newton, Tony

Cope, John

Nicholls, Patrick

Couchman, James

Normanton, Tom

Douglas-Hamilton, Lord J.

Page, Sir John (Harrow W)

Dover, Den

Page, Richard (Herts SW)

Durant, Tony

Patten, Christopher (Bath)

Eggar, Tim

Patten, John (Oxford)

Forsythe, Clifford (S Antrim)

Pollock, Alexander

Fraser, Peter (Angus East)

Rees, Rt Hon Peter (Dover)

Garel-Jones, Tristan

Rhodes James, Robert

Goodlad, Alastair

Ridley, Rt Hon Nicholas

Gow, Ian

Robinson, Mark (N'port W)

Greenway, Harry

Rumbold, Mrs Angela

Hamilton, Hon A. (Epsom)

Ryder, Richard

Havers, Rt Hon Sir Michael

Sainsbury, Hon Timothy

Hayhoe, Barney

Scott, Nicholas

Heathcoat-Amory, David

Shaw, Giles (Pudsey)

Howard, Michael

Shaw, Sir Michael (Scarb')

Hunt, John (Ravensbourne)

Smith, Tim (Beaconsfield)

Jopling, Rt Hon Michael

Spicer, Jim (W Dorset)

Lang, Ian

Squire, Robin

Lawson, Rt Hon Nigel

Stevens, Lewis (Nuneaton)

Lennox-Boyd, Hon Mark

Stradling Thomas, J.

Lilley, Peter

Thompson, Donald (Calder V)

Lloyd, Ian (Havant)

Thornton, Malcolm

Macfarlane, Neil

Townsend, Cyril D. (B'heath)

MacGregor, John

Trippier, David

MacKay, John (Argyll & Bute)

Viggers, Peter

McWilliam, John

Waddington, David

Marland, Paul

Wakeham, Rt Hon John

Mates, Michael

Waller, Gary

Mather, Carol

Watts, John

Mawhinney, Dr Brian

Wheeler, John

Mellor, David

Whitney, Raymond

Miller, Hal (B'grove)

Wolfson, Mark

Mills, Iain (Meriden)

Young, Sir George (Acton)

Mitchell, David (NW Hants)

Molyneaux, Rt Hon James

Tellers for the Noes:

Moore, John

Mr. John Major and Mr. Douglas Hogg.

Morrison, Hon P. (Chester)

Needham, Richard

Question accordingly negatived.
Main Question put:—
The House divided: Ayes 100, Noes 30.

Division No. 421]

[12.59 pm

AYES

Ancram, Michael

Cash, William

Atkins, Robert (South Ribble)

Clarke, Rt Hon K. (Rushcliffe)

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

Colvin, Michael

Baker, Nicholas (N Dorset)

Cope, John

Bermingham, Gerald

Couchman, James

Berry, Sir Anthony

Douglas-Hamilton, Lord J.

Biffen, Rt Hon John

Durant, Tony

Bottomley, Peter

Eggar, Tim

Boyson, Dr Rhodes

Forsythe, Clifford (S Antrim)

Brittan, Rt Hon Leon

Foulkes, George

Brooke, Hon Peter

Fraser, Peter (Angus East)

Bryan, Sir Paul

Garel-Jones, Tristan

Butler, Hon Adam

Goodlad, Alastair

Carlisle, Kenneth (Lincoln)

Gow, Ian

667

Greenway, Harry

Newton, Tony

Hamilton, Hon A. (Epsom)

Nicholls, Patrick

Havers, Rt Hon Sir Michael

Normanton, Tom

Hawkins, C. (High Peak)

Page, Sir John (Harrow W)

Hayhoe, Barney

Page, Richard (Herts SW)

Howard, Michael

Patten, Christopher (Bath)

Hunt, John (Ravensbourne)

Patten, John (Oxford)

Janner, Hon Greville

Pavitt, Laurie

Jopling, Rt Hon Michael

Pollock, Alexander

Lang, Ian

Rees, Rt Hon Peter (Dover)

Lawson, Rt Hon Nigel

Rhodes James, Robert

Lennox-Boyd, Hon Mark

Ridley, Rt Hon Nicholas

Lilley, Peter

Robinson, Mark (N'port W)

Lloyd, Ian (Havant)

Rumbold, Mrs Angela

Macfarlane, Neil

Ryder, Richard

MacGregor, John

Sainsbury, Hon Timothy

MacKay, John (Argyll & Bute)

Scott, Nicholas

McWilliam, John

Shaw, Giles (Pudsey)

Marland, Paul

Shaw, Sir Michael (Scarb')

Mates, Michael

Smith, Tim (Beaconsfield)

Mather, Carol

Snape, Peter

Mawhinney, Dr Brian

Spicer, Jim (W Dorset)

Mellor, David

Squire, Robin

Miller, Hal (B'grove)

Stevens, Martin (Fulham)

Mills, lain (Meriden)

Stradling Thomas, J.

Mitchell, David (NW Hants)

Thompson, Donald (Calder V)

Molyneaux, Rt Hon James

Thornton, Malcolm

Moore, John

Townsend, Cyril D. (B'heath)

Morrison, Hon P. (Chester)

Trippier, David

Needham, Richard

Viggers, Peter

Nelson, Anthony

Waddington, David

Neubert, Michael

Wakeham, Rt Hon John

That, in the opinion of this House, the following provision should be made with respect to the rates of the car mileage allowance payable to Members travelling on Parliamentary duties and the rates applicable to the car mileage allowances payable in respect of journeys by the spouse of a Member and journeys by persons in respect of whom the secretarial and research allowance of a Member is payable—

(1) The allowance payable in respect of a journey commenced in the period beginning with 1st October 1984 and ending with 31st March 1985 shall be payable—

(a) subject to the limit specified in paragraph (3) below, at the rate per mile shown in column 2 of the following Table in relation to the engine capacity of the vehicle used for the journey; and

(b) in respect of miles in excess of that limit, at the rate per mile shown in column 3 of that Table in relation to that engine capacity.

TABLE

Engine capacity

Mileage up to Limit

Further mileage

1300cc or less

18p

11·3p

More than 1300cc and not more than 2300cc

25·9p

14·7p

More than 2300cc

39p

19·5p

(2) Paragraph (1) above shall have effect in relation to journeys commenced in the year beginning with 1st April 1985 and each subsequent year with the substitution, for the rates shown in the Table, of rates calculated, on the principles exemplified in Appendix I to the Report of the Independent Inquiry, from the figures in the edition of the Royal Automobile Club's Schedule of Estimated Vehicle Running Costs published in or about the April of the year in question.

(3) For the purposes of this Resolution the limit on the number of miles in respect of which car mileage allowance may be paid at the rate specified in column 2 of the Table shall be 10,000 miles for the period beginning with 1st October 1984 and ending with 31st March 1985 and 20,000 miles for the year beginning with 1st April 1985 and for each subsequent year.

(4) Arrangements shall be made for ensuring that claims made for car mileage allowance in respect of miles travelled in excess of 25,000 miles in any year are supported by particulars of the journeys to which the claims relate.

(5)In this Resolution—

'the Report of the Independent Inquiry' means the Report of the Independent Inquiry into Motor Mileage Allowance for Members of Parliament to the Leader of the House of Commons (House of Commons Paper No. 469 of Session 1983–84);

`year' means a year beginning with 1st April.

Question accordingly agreed to.
Resolved,
Motion made, and Question put,
That the draft Lord Chancellor's Salary Order 1984, which was laid before this House on 12th July, be approved.—[Mr. Biffen.]
The House proceeded to a Division:—
Mr. Simon Hughes: On a point of order, Mr. Speaker. It seems that the hon. Member for Grantham (Mr. Hogg) is to be a Teller in a Division on a motion which is exclusively concerned with the salary of his father. That seems inappropriate, to say the least. I could say more. Is it possible for you, Mr. Speaker, to permit that situation to be changed before we vote?
Mr. Speaker: That matter was raised by another hon. The motion relates to a matter of public policy and it is perfectly in order for any Member to cast his vote.
The House having divided: Ayes 108, Noes 14.

Division No. 421]

[12.59 pm

AYES

Ancram, Michael

Cash, William

Atkins, Robert (South Ribble)

Clarke, Rt Hon K. (Rushcliffe)

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

Colvin, Michael

Baker, Nicholas (N Dorset)

Cope, John

Bermingham, Gerald

Couchman, James

Berry, Sir Anthony

Douglas-Hamilton, Lord J.

Biffen, Rt Hon John

Durant, Tony

Bottomley, Peter

Eggar, Tim

Boyson, Dr Rhodes

Forsythe, Clifford (S Antrim)

Brittan, Rt Hon Leon

Foulkes, George

Brooke, Hon Peter

Fraser, Peter (Angus East)

Bryan, Sir Paul

Garel-Jones, Tristan

Butler, Hon Adam

Goodlad, Alastair

Carlisle, Kenneth (Lincoln)

Gow, Ian

667

Greenway, Harry

Newton, Tony

Hamilton, Hon A. (Epsom)

Nicholls, Patrick

Havers, Rt Hon Sir Michael

Normanton, Tom

Hawkins, C. (High Peak)

Page, Sir John (Harrow W)

Hayhoe, Barney

Page, Richard (Herts SW)

Howard, Michael

Patten, Christopher (Bath)

Hunt, John (Ravensbourne)

Patten, John (Oxford)

Janner, Hon Greville

Pavitt, Laurie

Jopling, Rt Hon Michael

Pollock, Alexander

Lang, Ian

Rees, Rt Hon Peter (Dover)

Lawson, Rt Hon Nigel

Rhodes James, Robert

Lennox-Boyd, Hon Mark

Ridley, Rt Hon Nicholas

Lilley, Peter

Robinson, Mark (N'port W)

Lloyd, Ian (Havant)

Rumbold, Mrs Angela

Macfarlane, Neil

Ryder, Richard

MacGregor, John

Sainsbury, Hon Timothy

MacKay, John (Argyll & Bute)

Scott, Nicholas

McWilliam, John

Shaw, Giles (Pudsey)

Marland, Paul

Shaw, Sir Michael (Scarb')

Mates, Michael

Smith, Tim (Beaconsfield)

Mather, Carol

Snape, Peter

Mawhinney, Dr Brian

Spicer, Jim (W Dorset)

Mellor, David

Squire, Robin

Miller, Hal (B'grove)

Stevens, Martin (Fulham)

Mills, lain (Meriden)

Stradling Thomas, J.

Mitchell, David (NW Hants)

Thompson, Donald (Calder V)

Molyneaux, Rt Hon James

Thornton, Malcolm

Moore, John

Townsend, Cyril D. (B'heath)

Morrison, Hon P. (Chester)

Trippier, David

Needham, Richard

Viggers, Peter

Nelson, Anthony

Waddington, David

Neubert, Michael

Wakeham, Rt Hon John

Waller, Gary

Wolfson, Mark

Watts, John

Young, Sir George (Acton)

Wells, Bowen (Hertford)

Wheeler, John

Tellers for the Ayes:

Whitney, Raymond

Mr. John Major and Mr. Douglas Hogg.

Williams, Rt Hon A.

NOES

Alton, David

Leigh, Edward (Gainsbor'gh)

Atkinson, N. (Tottenham)

Lloyd, Tony (Stretford)

Banks, Tony (Newham NW)

Marlow, Antony

Bottomley, Mrs Virginia

Millan, Rt Hon Bruce

Brown, M. (Brigg & Cl'thpes)

Miller, Dr M. S. (E Kilbride)

Bruce, Malcolm

Pike, Peter

Bruinvels, Peter

Sims, Roger

Corbyn, Jeremy

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

Dalyell, Tarn

Stevens, Lewis (Nuneaton)

Dicks, Terry

Stewart, Rt Hon D. (W Isles)

Field, Frank (Birkenhead)

Straw, Jack

Forth, Eric

Thompson, Patrick (N'ich N)

Freud, Clement

Young, David (Bolton SE)

Hayes, J.

Holt, Richard

Tellers for the Noes:

Hughes, Simon (Southwark)

Mr. A. J. Beith and Mr. John Cartwright.

Knight, Gregory (Derby N)

Lawler. Geoffrey

Division No. 422]

[1.10 pm

AYES

Amess, David

Holt, Richard

Ancram, Michael

Howarth, Gerald (Cannock)

Atkins, Robert (South Ribble)

Hunt, John (Ravensbourne)

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

Jopling, Rt Hon Michael

Baker, Nicholas (N Dorset)

King, Roger (B'ham N'field)

Berry, Sir Anthony

Knight, Gregory (Derby N)

Biffen, Rt Hon John

Lang, Ian

Bottomley, Peter

Lawler, Geoffrey

Bottomley, Mrs Virginia

Lawson, Rt Hon Nigel

Boyson, Dr Rhodes

Leigh, Edward (Gainsbor'gh)

Brittan, Rt Hon Leon

Lilley, Peter

Brooke, Hon Peter

Lloyd, Ian (Havant)

Bruinvels, Peter

Macfarlane, Neil

Bryan, Sir Paul

MacGregor, John

Butler, Hon Adam

MacKay, John (Argyll & Bute)

Carlisle, Kenneth (Lincoln)

Marland, Paul

Cash, William

Mates, Michael

Clark, Dr Michael (Rochford)

Mather, Carol

Clarke, Rt Hon K. (Rushcliffe)

Mawhinney, Dr Brian

Colvin, Michael

Miller, Hal (B'grove)

Cope, John

Mitchell, David (NW Hants)

Couchman, James

Molyneaux, Rt Hon James

Currie, Mrs Edwina

Moore, John

Dicks, Terry

Morrison, Hon P. (Chester)

Douglas-Hamilton, Lord J.

Needham, Richard

Durant, Tony

Nelson, Anthony

Eggar, Tim

Neubert, Michael

Forth, Eric

Newton, Tony

Fraser, Peter (Angus East)

Nicholls, Patrick

Garel-Jones, Tristan

Normanton, Tom

Goodlad, Alastair

Page, Sir John (Harrow W)

Greenway, Harry

Page, Richard (Herts SW)

Hamilton, Hon A. (Epsom)

Patten, Christopher (Bath)

Hamilton, Neil (Tatton)

Patten, John (Oxford)

Havers, Rt Hon Sir Michael

Powley, John

Hawkins, C. (High Peak)

Rees, Rt Hon Peter (Dover)

Hayes, J.

Rhodes James, Robert

Hayhoe, Barney

Robinson, Mark (N'port W)

Heathcoat-Amory, David

Rumbold, Mrs Angela

Hind, Kenneth

Ryder, Richard

670

Sainsbury, Hon Timothy

Townsend, Cyril D. (B'heath)

Scott, Nicholas

Tracey, Richard

Shaw, Giles (Pudsey)

Trippier, David

Shaw, Sir Michael (Scarb')

Waddington, David

Sims, Roger

Wakeham, Rt Hon John

Smith, Tim (Beaconsfield)

Waller, Gary

Spicer, Jim (W Dorset)

Watts, John

Squire, Robin

Wells, Bowen (Hertford)

Stevens, Lewis (Nuneaton)

Wheeler, John

Stevens, Martin (Fulham)

Whitney, Raymond

Stradling Thomas, J.

Wolfson, Mark

Sumberg, David

Young, Sir George (Acton)

Taylor, Teddy (S'end E)

Thompson, Donald (Calder V)

Tellers for the Ayes:

Thompson, Patrick (N'ich N)

Mr. John Major and Mr. Douglas Hogg.

Thornton, Malcolm

NOES

Atkinson, N. (Tottenham)

Lloyd, Tony (Stretford)

Beith, A. J.

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

Bruce, Malcolm

Snape, Peter

Cartwright, John

Stewart, Rt Hon D. (W Isles)

Corbyn, Jeremy

Young, David (Bolton SE)

Dalyell, Tam

Foulkes, George

Tellers for the Noes:

Freud, Clement

Mr. Peter Pike and Mr. Tony Banks

Hughes, Simon (Southwark)

Question accordingly agreed to.
Mr. Simon Hughes: On a point of order, Mr. Speaker. May I just briefly pursue the matter that I raised during the Division? I cast no reflection on the hon. Member for Grantham, who plainly finds himself in a difficult position, as he is the duty Whip. I am sure that when the matter was arranged he did not know that he would be on duty. Hon. Members sometimes find themselves called to vote upon or adjudicate upon the vote—in this case it was someone in the Aye Lobby — on matters which affect them personally, which this clearly does, because under the laws of inheritance the hon. Member will benefit from his father's increased money. It is a matter that can arise in relation to a few Members of the House during this Parliament and I am sure that it arises in other Parliaments as well. There is some anxiety as to whether such Members should vote, and it would be helpful if your guidance could be given now or at a convenient time.
Mr. Speaker: I can give it to the hon. Member now, and I give it in the serious tone in which he raised the matter. On any matter of public policy it is perfectly in order for any hon. Member or Minister to cast his vote. On the previous matter when the hon. Member for Cambridgeshire, North-East (Mr. Freud) raised the subject of the car mileage allowance, I ruled that this was a matter of public policy. That is the answer to the hon. Member. He will find the reasons for it set out fully in "Erskine May".

Greenland (Withdrawal from EEC)
1.20 pm
The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Mr. Ray Whitney): I beg to move,
That this House, while stressing the importance of maintaining continued close links between Greenland and the Community, recognises that the proposed change in the status of Greenland has wide support; and takes note of European Community Document No. 5064/84 transmitting legal texts providing for a change of the legal status of Greenland and fishery arrangements with regard to Greenland.
In its fifteenth report the Select Committee on European Legislation recommended that the House should consider further the draft legal texts concerning the withdrawal of Greenland from full membership of the European Community and its addition to annex IV of the treaty of Rome, which lists the overseas countries and territories—OCTs—of member states. These texts were deposited with explanatory memorandum 5064 on 10 February 1984. The five draft texts, which are intended to be taken as one package, comprise: (i) the treaty removing Greenland from membership of the EEC and the European Coal and Steel Community and conferring OCT status on Greenland; (ii) the protocol to the treaty granting Greenland duty-free access to the Community market subject to a satisfactory arrangement on fish, and also making provision for any necessary transitional arrangements; (iii) a regulation providing for a framework fisheries agreement establishing the principles governing Community fishing in Greenland waters; (iv) a regulation providing for the introduction of a five year protocol laying down specific conditions for Community fishing in Greenland waters based on the principles set down in the preceding regulation; (v) a regulation laying down procedures under which the Community may act in the event of the overall agreement being disturbed.
Because of negotiating restraints at the time it was not possible to deposit the draft legal texts with the Select Committee sufficiently far ahead for a debate to be held before the texts were adopted by the Council. The Select Committee was most helpful over these difficulties and agreed that its recommendation for a debate need not delay adoption of the texts, which were subsequently adopted by the General Affairs Council in February and formally signed at the next General Affairs Council in March. Nevertheless, it is right and proper that the House should now have the opportunity to consider the wider implications of these arrangements and we are grateful to the Select Committee for its careful scrutiny on behalf of the House.
There are certain differences between the texts as deposited with the Select Committee and as finally adopted by the Council. In the first place, the Community agreed that the treaty amending Greenland's status should be extended to include Euratom as well as the EEC and ECSC.
Secondly, an additional article was added to the fisheries agreement text, which identifies the quotas set in the first implementing protocol and the way in which fish stocks develop, as constituting the reference base for fixing future possibilities.
Thirdly, in the protocol on Community fishing in Greenland waters, the Community eventually agreed to pay Greenland 26.5 million ECU—about £15 million—a
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year in order to maintain the existing Community quotas, an increase on the 18.5 million ECU proposed in the draft as submitted to the Select Committee. I shall have more to say about that later.
It may be helpful to the House if I describe briefly the background to Greenland's desire for a change of status. The population of Greenland is 45,000, of which over 80 per cent. are of Eskimo origin. Greenland has been a Danish colony since 1721, but became an integral part of the kingdom of Denmark only in 1953, with the right to elect two representatives to the Danish Parliament.
The desire of the Greenlanders for greater local autonomy goes back to 1972 when the Greenland Provincial Council first requested self government. At that same time, in the referendum in which Denmark voted to accept membership of the European Community, 70 per cent. of the Greenlanders voted against membership. But as a part of the kingdom of Denmark—unlike the Faroe Islands, which already had home rule and remained outside the Community—Greenland was obliged to join the Community with the rest of Denmark. Later, following a referendum in January 1979 among the Greenlanders in which 70 per cent. voted in favour, a substantial degree of home rule was devolved upon Greenland. Subsequently, in the elections for the Greenlandic Assembly in April 1979, a party opposed to Community membership won a majority and followed this up in June 1979 by winning the single Greenland seat in the European Parliament.
The Greenlanders have objections to the application to Greenland of the Community regime. Apart from their view that fisheries—which account for half their exports—should be under Greenland's control, opposition to Community membership was seen as a logical extension of Greenland's long campaign for home rule.
A second referendum on the membership issue was therefore held in February 1982, when the Greenlanders opted by a small majority — 52 per cent. — for withdrawal and asked to be granted associated status under the Community's OCT arrangements. Under the constitution there can be no withdrawal of Greenland without Danish approval, but the Danish Prime Minister had pledged to negotiate with the Community whatever new status the Greenlanders required. The Danish Government therefore submitted a memorandum to the Council in May 1982 designed to arrange that Greenland should cease to be within the geographical scope of the European Coal and Steel Community and the European Economic Community treaties and be added to the overseas countries and territories listed in annex IV to the EEC treaty.
In February 1983, in its opinion to the Council, the Commission confirmed that it favoured arrangements of the kind proposed by Denmark. But, as the treaties contained no provision for the withdrawal either of a member state or a part thereof, such as Greenland, the necessary arrangements had to be negotiated.
The subsequent negotiations continued for almost a year, focusing principally on working out acceptable arrangements for future fishing rights for the Community in Greenland waters.
In December 1983 the Council of Ministers agreed that the Council should work to a deadline which would enable Greenland to leave the Community on 1 January 1985, the date set by the Greenlanders for their change in status to take effect. The Commission therefore embarked on a

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series of bilateral discussions with member states in order to bring the negotiations to a conclusion. As a result of those efforts, the Commission was able to submit draft legal texts to the Council. It is those texts which were laid before the Select Committee. Following the inclusion of certain textual amendments, the most significant of which I have described, the texts were finally agreed at the February Foreign Affairs Council and formally adopted at the March Foreign Affairs Council.
The agreement on fisheries has several interlocking elements which balance the interests of Greenland and those of the Community. Greenland for its part will continue to benefit from duty-free access to the Community market for her fish and fishery products in return for her commitment to a 10-year fisheries agreement with the Community. This does not, however, mean that the Community's fishing rights in Greenland's waters will end at the beginning of 1995. Provision has been made within the framework of the agreement for renewal for successive six-year periods. This approach provides a solid basis upon which both Community and Greenland fishermen can plan for the future.
Mr. George Foulkes: The Under-Secretary of State has described how the agreement on fish is beneficial to the Greenlanders, on the one hand, and the Community as a whole, on the other. I think the hon. Gentleman will agree that the agreement is especially beneficial to German fishermen. How beneficial will it be to British fishermen? Will the hon. Gentleman admit that, in reality, it will be of no great benefit to them?
Mr. Whitney: The reality is that this is a fair agreement for British fishermen and fishermen from all member states of the Community. We believe that it is fair also for the Greenlanders. I shall return to that point in my concluding remarks. As I understand it, there will be no loss or damage to British fishing interests from this agreement, and our wider interests are likely to benefit.
It was considered that a longer period subject to a rigid structure would not allow for the inevitable changes which will occur as a result of biological and management induced variations in fish stocks and those changes in policy arising from economic and social factors within the fisheries sector and wider afield.
The protocol to the fisheries agreement sets the initial quotas for Community fishermen for the first five years. Taking into account catches by Greenland vessels, the basic quotas represent an overall level virtually equivalent to the quotas set by the Council of Fisheries Ministers for 1984 for all the major Greenland fish stocks. The Community is not being asked to alter its current fishing opportunities significantly. These quotas will be allocated between member states, including the United Kingdom, in accordance with the normal procedures and criteria, after deducting any allocations to Norwegian vessels. These last help to establish the balance between the reciprocal fishing possibilities of the Community and Norway which, as the hon. Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes) knows, is an important element for our own industry
The agreement with Greenland also includes limited quantities for Faroese vessels under the Community's fisheries agreement with the Faroe Islands. All in all, the
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Community's fishing opportunities in west and east Greenland waters, including those quotas which may be allocated to Norwegian and Faroese vessels under the relevant reciprocal fisheries agreements, amount to some 100,000 tonnes of cod equivalent—mainly cod, redfish, Greenland halibut and shrimps.
These opportunities are balanced by the annual payment to Greenland from the Community budget of 26·5 million ECU—about £15 million—to which I referred earlier.
Mr. Teddy Taylor: My hon. Friend has used the word "balanced". What is the value of the fisheries in Greenland waters which will continue to be available to EEC countries? Does my hon. Friend agree that the figure last year was about 60 million ECU? That is not balanced, but is an amount well in excess of the payment received.
Mr. Whitney: We must see how this works in practice. I believe that the balance is struck by taking account not only of the fisheries but of the payment's relevance to the Community budget and the general relationship that Greenland will have with the Community. The Community's annual payment to Greenland during the first five years of the agreement, for which initial quotas have been set, will not vary unless fish stocks increase and the Community takes up any Greenland offer of additional quotas.
Built into the fisheries agreement are consultation procedures concerned with the functioning of the agreement. Should consultations fail to resolve any difficulties in the operation of the agreement, recourse may be made to the internal procedure provided for in the implementing regulations. This "safeguard clause" procedure allows for urgent action to be taken by the Commission in the first instance. Such action may take the form of adjustment or suspension of the trade arrangements for Greenland fish and fish products to protect Community markets from disruption. At the request of one or more member states the Commission's decision may be referred to the Council, which may amend or cancel the decision. This special procedure to safeguard the Community interest is similar to the arrangements that already apply to the bulk of imports into the Community from most third countries.
We naturally regret the Greenlanders' decision but we respect it. We believe that, taken together, the package negotiated between Greenland and the Community is a fair and balanced one, in which the interests of the Community and of the United Kingdom are adequately safeguarded.
1.35 pm
Mr. George Foulkes: Like the Minister, the Opposition welcome the opportunity to debate the withdrawal of Greenland from the European Community. We also welcome the suggestion of the Select Committee that the matter should be debated on the Floor of the House.
I am very pleased that my hon. Friend the Member for Linlithgow (Mr. Dalyell) is present, because I know that he has taken an interest in the matter. I am also pleased to see the hon. Member for Southend, East (Mr. Taylor) who, from his earlier intervention, would seem to be here to represent the interests of the Greenlanders. No doubt he will have the opportunity later of speaking for himself.

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On 1 January 1985, when all the Parliaments of the Community agree to the withdrawal of Greenland, the Community will lose half of its land area. On my way here this morning I was wondering what Oscar Wilde might have put into the mouth of Lady Bracknell about the way in which the Community had neglected its responsibilities by enabling half of the land area of the Community to be lost. Nevertheless, as the Minister said, there are in Greenland only 45,000 people—a very small percentage of the population of the Community. However, I would caution any hon. Member — I suspect that the hon. Member for Southend, East might be one of those needing such a caution — about using the withdrawal of Greenland from the European Community as any kind of precedent for the withdrawal of a member state.
Greenland is not a member state of the Community, but, as the Minister rightly said, is and will remain part of the kingdom of Denmark, which will continue to be a member state of the Community. Greenland, as an autonomous part of the kingdom—and one which, as the Minister said, achieved home rule in 1953, having been a colony since 1721 — would provide a rather awkward precedent if it does provide one, for the hon. Member for Southend, East and my hon. Friend the Member for Linlithgow if it were to be used. It would not be a precedent for the withdrawal of a whole member state, but it might be used as a precedent for the withdrawal of a small autonomous part of a state if that were granted, or sought and achieved, home rule during the course of the state's membership of the European Community.
As the Minister rightly said, it was a Left-wing home rule movement in Greenland which sought and ultimately achieved Greenland's withdrawal from the European Community. With respect to my hon. Friend the Member for Linlithgow, it would be the kind of argument that might be sustained by some of his opponents in Blackburn, West Lothian, rather than by some of our supporters in Blackburn, Lancashire, if I may use his own argument against him. [Interruption.] Although the Opposition do not consider it to be a precedent, we must face the fact of the withdrawal, but, unlike the Minister, who regretted Greenland's decision, we would not use the word "regret". We accept and respect the decision of Greenland.
We must accept the fact that Greenland's relationship with the European Community has been an uneasy one. As part of the kingdom of Denmark, it has been a member of the European Coal and Steel Community, yet it has neither coal nor steel. Its membership has served merely to provide high steel prices in Greenland. It has been party to the common agricultural policy, yet there is no farming in Greenland. I am sure that even the hon. Member for Southend, East would agree with that. The CAP has served merely to provide Greenlanders with high food prices.
Mr. Teddy Taylor: But the hon. Gentleman will accept that Greenland had a coal industry until recently.
Mr. Foulkes: I accept that. It is not my information, but if the hon. Gentleman assures me of it, I shall accept it. I am sure he will agree that Greenland has no agriculture, so the CAP is not relevant, but merely provides the country with high food prices.
Most difficult and uneasy of all is Greenland's membership of Euratom. As my hon. Friend the Member for Linlithgow will know, the Greenlanders are passionately anti-nuclear, yet as members of Euratom they have been forced to mine and develop their uranium.
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We respect the decision of the Greenlanders in their referendum and we understand their position particularly because the Faroes, having achieved their independence or autonomy in relation to Denmark, were in different circumstances.
Perhaps unlike what I suspect the hon. Member for Southend, East will say, the Opposition would like to congratulate the Greenlanders on the deal that they have obtained for their withdrawal from the Community. Our Government could learn a thing or two from the way in which the Greenlanders have achieved a great deal in the negotiations. One commentator unfavourably referred to the Greenlanders, in their negotiations with the European Community, as men in oilskins and hairy sweaters negotiating with smooth Eurocrats. On the Opposition's assessment, the men in oilskins and hairy sweaters have done a lot better than those in pinstripe suits from Whitehall as well as the Prime Minister in her stridency.
What the United Kingdom has achieved in the budget negotiations — I am sure that the hon. Member for Southend, East will not disagree with me—is a limited deal of limited duration which will have to be renegotiated after a few years and provides much less than we demanded, without any real reform of the CAP or of the budget, which we demanded. Ultimately we are paying more through our value added tax contributions. That is a pretty poor deal achieved by our diplomacy, yet the men from Godthab and Copenhagen achieved a great deal more — a 10-year deal automatically renewable every six years thereafter.
Perhaps this is the answer which the Minister should have given to his hon. Friend. Greenlanders have free access for the fish that they catch and all other products to all the Community markets, which is a valuable concession. Best of all—I do not think that this is a trivial amount — during the negotiations the Greenlanders upped the amount from 18·5 million to 26·5 million ecu—more than £15 million according to my calculations, but I am open to correction. That is £300 for every man, woman and child in Greenland, which is not a bad deal. In addition, there is £300,000 a year from the European development fund. The Minister and some of his colleagues might like to take a trip to Godthab to find out how the Greenlanders did that, so that the next time round we know how to get a better deal out of the Community.
Perhaps the Minister will take the opportunity of this debate on the contraction of the Community to comment on the prospects for expansion, especially in relation to Portugal, whose prospects of accession may well have deteriorated as a result of the Fontainebleau deal.
In an earlier debate my hon. Friend the Member for Livingston (Mr. Cook) asked about the accession of Spain. Perhaps I could pursue that specifically in relation to Euratom.
Mr. Deputy Speaker (Mr. Harold Walker): Order. The motion refers to Greenland, not Spain. Perhaps the hon. Gentleman will confine his remarks to Greenland's membership of or secession from the Community.
Mr. Foulkes: I accept everything that you say, o f course, Mr. Deputy Speaker. I merely hoped that as Greenland was leaving the Community and Spain was hoping to enter it you might allow me to ask about the difficulty that might arise if Spain becomes part of

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Euratom without having signed the non-proliferation treaty. It would certainly be most helpful if you would allow the Minister to comment on that.
The deal obtained by Greenland from the EEC should be a great lesson to the British Government. Central to the agreement is the deal on fish, which we feel is not good for Britain. The Germans are grumbling, but they still have a substantial fleet of long-range vessels and their quotas will remain roughly the same. The Greenlanders have achieved a very good arrangement. Like the Icelanders, they will have control of their own fishing arrangements, which will no doubt help them as much as it has helped the Icelanders. In addition, they will have access to Community markets, including United Kingdom markets.
Perhaps the Minister will seek advice on this so that when he replies to the debate he can tell us whether there is any way in which the agreement will help the United Kingdom fleet as I understand that our fleet has contracted so much due to the common fisheries policy and to the policies pursued by the Government that we shall be unable to take advantage of the deal with Greenland. In other words, we do not have the resources to fish in their waters, but our markets will be open to them as well as to the Germans and the rest.
We wish the Greenlanders well after 1 January 1985. My hon. Friend the Member for Cumbernauld and Kilsyth (Mr. Hogg) endorses and approves this view. We wish the Greenlanders well in their new relationship with the Community and we look forward to co-operating with them in their new role and status.
1.48 pm
Mr. Teddy Taylor: It is depressing, to say the least, to note that, although a great many hon. Members were present an hour ago to discuss secretarial and motoring allowances for Members of Parliament, only five of us have remained to debate the withdrawal from the European Community of the second largest island in the world. As the hon. Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes) rightly said, Greenland also represents half the land mass of the Community, although the number of people involved is small.
I have four specific questions. First, my hon. Friend the Minister will agree that, judging from the papers that he and the Department kindly made available to us, the formula adopted to arrange Greenland's withdrawal from the EEC is a highly complicated one. There is a very good reason for that. There is no clear procedure in the treaty for the withdrawal of a part-member state or indeed a member state. In view of our experience with Greenland, is there not a case for saying that the Common Market should consider its rules and treaties with a view to providing a clear arrangement for the withdrawal of member states which wish to withdraw, if other member states agree?
The Common Market seems to be becoming more controversial, and may face a major crisis towards the end of the year. That being so, is it right that the treaty should treat all member states as if they were in a prison from which there is no way out? The complexity of the formula which we have been obliged to adopt in order to enable Greenland to leave the Common Market shows the need for a clearer procedure.
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I can think of no other international agreement from which withdrawal is so complex and difficult. Indeed, in this case, withdrawal seems to be almost impossible in law. Even bearing in mind the difficulty, within the treaty, of enabling a member state to withdraw, does the Minister feel that overseas territory status is the right answer? Most of the overseas territories are former or current colonial territories which are not yet independent. Greenland is not in that position.
The Parliamentary Under-Secretary must be aware that a number of practical problems arise in connection with countries with overseas territory status. I can provide an example from Southend—a long way from Greenland. Under the arrangements for reciprocal medical treatment, if someone breaks a leg in Southend's high street while visiting this country and goes to Southend hospital, the hospital is now obliged to ask him where he comes from. If he is an overseas visitor, the hospital must charge a rate of, I believe, about £90 a day. However, if the answer to the question, "Where do you come from?" is "Guyana" the hospital then has to ask, "Which part of Guyana?". If the man comes from what was British Guyana, he will have to pay £90 a day. If he comes from French Guiana, he will automatically get free treatment because French Guiana is an overseas territory of France and is regarded as part of the EEC. Similar ridiculous situations arise in a number of other instances.
Does the Minister feel that it is wise to create more overseas territories — particularly bogus overseas territories — when to do so creates so many silly anomalies? I have drawn the attention of the Foreign Office to the anomalies connected with Guyana. The situation is an outrage.
There are also problems in connection with the fishing arrangements. We are continuing to pay the Greenlanders every year in recognition of the fish which Europeans—mainly the Germans — are securing. Britain will be paying a substantial part of the sum, but sadly, it is the Germans who will catch the fish.
Is this arrangement really favourable for the Greenlanders? The fish that they are giving up to the Germans are worth about 60 million ECU a year at 1982 prices. That is much more than the amount secured in compensation for them.
What guarantees are the Greenlanders to have? The hon. Member for Carrick, Cumnock and Doon Valley applauded the fact that the Greenlanders had a guaranteed right to get their fish into the Community tariff-free. However, the Government have supplied a statement—the translation of a letter—issued in Brussels on 17 February this year. Page 5 lists factors to be considered.
Among them are:
"on Greenland's side:
—the advantages yielded by preferential access to the market for fishery products. These advantages depend on the potential export volume and on the preferential margin actually granted as compared with the rates accorded competing non-member countries".
It would be helpful if my hon. Friend the Minister could clarify whether Greenland gets completely free access for its fishery products or whether there are reservations, as seems to be suggested in the Common Market paper. I refer to the advantages that depend on preferential access. Even that advantage depends on potential export volume and a preferential margin being granted.
My fourth question is extremely important. We must ask ourselves why the Greenlanders want to leave the

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Community. I have read quite a lot about the arguments during the referendum, and it appears that the major factor was that the Community rules were consistently being broken. For example, the fisheries agreement, which the Greenlanders thought provided some protection, was being driven through by German and other Community fishing vessels which disregarded them. It is understandable that the Greenlanders felt outraged. As my hon. Friend will be aware, in February 1980, two German trawlers that were fishing illegally were captured and their skippers were fined in Nuuk. That is just one example of many complaints that arose during the referendum campaign which elicited the response front the Greenlanders, "Why on earth should we carry on with these agreements when they are not being abided by?" Throughout the campaign, much emphasis was put on examples of abuse by the Community — especially German fishermen — of fishing licences within Greenland's 200-mile economic zone, which was then part of EEC waters.
Is my hon. Friend worried about the serious anxiety that we might cause more and more disagreement in the Community because agreements are not being applied? Britain is well aware of what is happening in the steel industry. Under a Common Market agreement, we have halved the number of people who are employed in the steel industry, yet it appears that other member states have given little more than promises. Indeed, the Italians are increasing their steel capacity, despite an agreement for substantial contraction. I believe that we shall have the same problem with the milk regulations that we debated recently. I know that we shall abide by those agreements but it is becoming clear, as my right hon. Friend the Minister of Agriculture, Fisheries and Food rightly said, that there is a real danger that other member states will not. I wonder whether Greenland's decision to withdraw because agreements were not being observed properly might lead to a major problem which could lead to a further rise of anxiety in Denmark, where there is a substantial movement to withdraw.
There is a lesson to be learnt from the Greenland episode and the fact that membership of the EEC is becoming less popular throughout the Community, as was demonstrated clearly in the recent elections for the European Assembly. The ridiculously low poll in Britain was similar to a turnout for a parish council election on a wet Tuesday. People are fed up and apathetic about the EEC, as they believe that they are being taken for a ride and that the rules are not being implemented. In view of the unfortunate circumstances facing the EEC and Greenland's decision to leave, I wonder whether we should look to Iceland and the Fames for guidance. The European Free Trade Association has enjoyed remarkable success. That organisation is appropriate for Greenland and other comparable countries. Instead of constant disputes such as we have in the EEC which drive countries against each other, the opposite is true of EFTA. Members of EFTA work together peacefully and harmoniously, simply on reducing trade barriers. I believe that the secret of its success is that it does not spend money. There is no EFTA common agricultural policy, social policy or regional policy. It leaves such decisions to member states. That works extremely well. We can learn from the Greenland episode that whereas we have squabbles between the British, the French and the Germans about the distribution of resources — those squabbles will get
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worse as we increase resources — EFTA achieves harmony and friendship by concentrating simply on reducing trade barriers.
There are many complex rules comparable to the ones on fishing which affected Greenland and led to its withdrawal. The other organisation has no intention of trying to create a giant Euro super state, as do some Euro bureaucrats, including British ones. We should try to adjust the EEC to being a non-spending organisation. It should not be an organisation which tempts the Government to become involved in silly Socialist schemes, which the country rightly rejects. We could at least ensure that we shall not have a series of documents such as this one, which will cause other members of the Common Market to seek to withdraw.
We must learn from the Greenlanders' decision to withdraw from the EEC. They withdrew because they were fed up with having agreements broken. We must look to the future of the EEC and see whether we can achieve more than we are achieving to prevent countries such as Greenland from withdrawing. Instead of giving more money to the Common Market, as the Minister will shortly ask us to do, it might be better if we asked ourselves why the Community wants to spend money.
We should also ask ourselves whether it is helpful to friendship and co-operation between European states to go ahead trying to get so-called union in that way. There would be far more harmony at the Community if we had a sensible organisation of countries, which sought to reduce trade barriers and to increase political co-operation, and thereby to increase harmony.
I hope that the Minister will consider the bureaucratic aspect, which also infuriated the Greenlanders. We have more than 12,000 civil servants and about 10 languages in the EEC. In EFTA there are 70 civil servants based in Geneva and they operate in one language.
We wish Greenland well, hope that it will continue to prosper and develop, and that relations between Greenland, the United Kingdom and the EEC will be satisfactory. I hope that we shall learn a lesson from the Greenlanders' decision. They pursued it thoroughly and effectively and they now have an opportunity to get away from the nonsensical bureaucracy and silly businesses of the EEC. We should learn from that and try to adjust and amend the EEC so that countries will not want to leave it.
2.4 pm
Mr. Whitney: I am happy to agree with the final comments of my hon. Friend the Member for Southend, East (Mr. Taylor) that we should continue to work for the adjustment of the EC so that no country will wish to leave it. That is precisely what we are debating today. This debate is a manifestation of the flexibility which the EC has achieved, and continues to achieve, and which enables it to accommodate the particular circumstances of Greenland.
My hon. Friend will not be surprised to learn that I believe that the flexibility to leave is not one which we should seek to enjoy or employ, because it would be against the interests of the British people. Therefore, the parallel which he sought to draw and which wandered far from the shores of Greenland does not stand up to serious scrutiny.
I shall deal, first, with the precise questions raised by my hon. Friend before I return to the points made by the hon. Member for Carrick, Cumnock and Doon Valley

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(Mr. Foulkes), who covered broader territory. My hon. Friend asked for a set of rules for leaving the Community, but that would be an unnecessary waste of resources and negotiating power. My hon. Friend complained, with some justification, about the number of bureaucrats employed by the Community. I am sure that he would not wish more time to be taken up by amending rules and rewriting the treaties so that member states could leave the Community.
No member state has any intention of leaving the Community, and none of the peoples has any intention of asking their Governments to leave it, as support for the Community makes clear. I agree that the turnout for the European elections was disappointing, but the recognition in Britain and in all member states that it would make no sense to leave is widely and deeply held. My hon. Friend is ploughing a lonely and increasingly narrow furrow.
Mr. Teddy Taylor: Had there been a clearer way for member states to depart, we would have saved much expense, bureaucracy and unnecessary meetings to try to reach a formula to enable them to leave. Does my hon. Friend agree that if the treaty had made the position clear, there would have been a great saving in time, meetings, bureaucracy and negotiations?
Mr. Whitney: Nations are seeking not to leave but to join the Community, which creates understandable problems for us. But they are problems for the future. We must concern ourselves with accession to the Community. There is no demand, except from a small and decreasing minority of British people and from a few people in other member states, to leave the Community. This arrangement for Greenland and its relationship with Denmark has given rise to the need for special provision, and we should congratulate the EC on demonstrating such flexibility. Membership of the OCT was carefully considered, and it was decided that that would be the appropriate mechanism to maintain a link with the Community without maintaining Greenland under the full Community regime. We have found an appropriate balance, taking into account all the factors.
My hon. Friend the Member for Southend, East compared French Guiana with the former British Guyana. As he knows, the constitutional positions are fundamentally different, hence the differences in treatment of French Guianese citizens arriving in hospitals in Southend and of citizens of the independent and sovereign state of Guyana.
The Community has made a good deal on access to fish products. The value will depend upon how much Greenland can export to the Community, which could increase as the fishing industry develops, and on the tariffs applied to other third country exports such as cod and shrimps—the tariffs that Greenland would have to pay if it had no preferential access. Of course, the tariffs will vary according to the products.
My hon. Friend's major point about the observance of Community agreements by member states is not well taken. There have been problems in the observance of steel quotas and other agreements, which my hon. Friend would be only too happy to raise. This is a question of making the Community work better. None of us would claim that it is in a state of Utopian perfection. We recognise that there is a job to do. The turnout for the European elections was disappointing, although I am glad to say that the
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balance of seats was very satisfactory. Some small gains were made by the Labour party, and I understand that, in its present parlous state, Opposition Members had to welcome them as a victory.
Mr. Deputy Speaker: Order. I have heard about Spain, Guyana, steel, and now the European elections in Britain. It is a long way from Greenland. I hope that the Minister will turn his eyes northwards.
Mr. Whitney: I shall do my best to do so, Mr. Deputy Speaker. I am sure that the hon. Member for Carrick, Cumnock and Doon Valley would also like to return to Greenland's pleasant shores or icy mountains.
I was a little confused by the hon. Gentleman's reference to Lady Bracknell, but I was glad that he recognised the rights of Greenland to withdraw. He mentioned his respect for Greenland's position. That is exactly the word that I would use. Her Majesty's Government respect it.
The hon. Gentleman claimed that the Greenlanders had a good deal, and he tried to make play with how much more the Greenlanders had achieved than we had. Let me emphasise that the negotiators from the British side obtained a deal with which we are extremely satisfied and which offers us a very good arrangement with our partners in the Community. It gives us all a chance now to go forward along the lines that my right hon. Friend the Prime Minister set out so that we can complete the common market. It means that we can give our industries the opportunities and the market of which they must take advantage and develop co-operation between member states in new areas, including defence and security.
The example of Greenland is by no means one for us to follow. Our future is in the Community, as are the interests of our people. We recognise the pressures—
Mr. Foulkes: Before the Minister sits down, I hope that he will answer my question about British fishermen. I have asked it twice already. I ask it a third time. What benefit will British fishermen get out of it, or am I right in asserting that they will get no benefit?
Mr. Whitney: I thought that I had answered that question already. The United Kingdom quotas in Greenland waters are preserved. But I should point out that last year our fleet did not manage to catch the fish available to it. It may be that our fishermen have little expertise in this type of fishing. By this arrangement, the balance between member states has not changed. I accept what the hon. Gentleman said about German fishing. But it so happens that the fishing opportunities off Greenland are more important to Germany than to the United Kingdom. This reflects the historic interests of the member states in that fishery. The United Kingdom quotas in Greenland waters agreed under the common fisheries policy have been protected.
The route that Greenland has chosen is not one for the United Kingdom. But we respect the motives which led the Greenlanders to take the decision that they did. We wish them well and hope that the new arrangements which have been settled will work to the advantage of the Greenlanders, of the Community as a whole, and, of course, of the United Kingdom.
Question put and agreed to.
Resolved,
That this House, while stressing the importance of maintaining continued close links between Greenland and the

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Community, recognises that the proposed change in the status of Greenland has wide support; and takes note of European Community Document No. 5064/84 transmitting legal texts providing for a change of the legal status of Greenland and fishery arrangements with regard to Greenland.

Pharmacists
2.15 pm
The Minister for Health (Mr. Kenneth Clarke): I beg to move,
That this House takes note of European Community Documents Nos. 4692/81 and 4465/84, draft proposals for Directives and a Decision on the right of establishment for certain activities in the field of pharmacy, and the Explanatory Memorandum from the Department of Health and Social Security dated 16th July 1984; endorses the view that the instruments are necessary; and welcomes the United Kingdom's endeavours to encourage the adoption and implementation of these measures which will give pharmacists the same freedom of movement within the Community already afforded to the other health professions.
This debate was recommended by the Select Committee on European Legislation, which was apparently of the opinion that the draft instruments raised questions of political importance and should be further considered by the House before decisions were taken in the Council of Ministers. There probably is some political importance in the proposals but I hope that I shall discover that they are completely devoid of controversy. We are asking the House to take note of securing freer movement for qualified pharmacists within the EC of the kind that is already afforded to the other health professions.
There have been occasions in the past when proposals for the free movement of pharmacists in the Community were controversial. The House may recall earlier proposals that were published in 1969 and 1972 but they were eventually withdrawn by the Commission. Those proposals covered only self-employed pharmacists. They were wide-ranging in their implications and that is why they gave rise to so much debate.
The proposals now before us are much more modest in scope than their predecessors and are better adapted to the present state of Community integration. They are confined to measures necessary to facilitate the free movement of pharmacists within the Community and to provide for the definition of the standard minimum requirements for the exercise of the profession with regard to the pharmacist's field of activity and to the conditions of his education and training.
There are two directives. The first is known as the co-ordination directive and requires the approximation of national laws in order to give the necessary confidence among member states about the qualifications and competence of professional people engaged in pharmaceutical activities. It defines not only the characteristics which pharmaceutical training must have in all member states but the common core of the pharmacist's field of activity.
The second proposed directive is known as the mutual recognition directive and it has two objectives. First, it draws the logical conclusions from the approximation of the laws of member states — required by the first directive—by ensuring the recognition in all member states of the training courses in each country which meet the minimum criteria that will be laid down. Secondly, apart from the field of training, the proposal in the second directive contains a number of provisions intended to facilitate the exercise in practice of the right of establishment of people who wish to move to countries to practise their profession.
The amendment to the second directive proposed by the Commission in January 1984 — document 4465/84 —

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contains an important safeguard which the House will welcome. It is designed to limit the scope for unbalanced movement between countries by pharmacists suddenly going to practise in one of the member states. That safeguard will permit host member states not to recognise diplomas recognised by other member states so far as they are relied upon for the establishment of new pharmacies open to the public or the takeover of such pharmacies which have been in operation for less than two years. The draft council decision is designed to establish a committee responsible for ensuring a high level of training in pharmacy. Similar committees have already been established for other health professions.
The Government have carefully considered the package that is now beginning to unfold. In our opinion if the proposals are adopted they will present no serious policy or financial implications for the United Kingdom. The provisions in the co-ordination directive preserve the comparability of pharmacy diplomas throughout the United Kingdom. They also ensure that, irrespective of whether those diplomas are awarded by English, Welsh, Scottish or Northern Irish educational establishments, they will be recognised by other member states in precisely the same way as they are recognised in the United Kingdom, as being equivalent one to the other. Therefore, there is no question of any United Kingdom country having to meet the expense of extending or modifying its first degree courses as a result of implementing the proposals.
With the freedom of movement gained under the proposals some pharmacists from other member states might seek to practise in the United Kingdom but they would have to compete with our nationals for situations in pharmacies, whether retail pharmacies or hospital pharmacies.
We do not expect that any substantial flow of people who wish to come to Britain is likely or that they would succeed in coming if they tried. If at any time we should wish to prevent any immigration of self-employed pharmacists or to control the numbers of such pharmacists coming in, that can be done by using the safeguard provisions that I have already mentioned.
We have discussed the matter with the professional and academic organisations and, in general, they do not oppose the proposals. They regard them as an improvement on the earlier proposals and find nothing controversial in the provisions dealing with the mutual recognition of qualifications. The professionals and the academics both welcome the plan to set up the advisory committee on training.
The Pharmaceutical Society of Great Britain is the primary representative body of the profession and the statutory registration authority for pharmacists. The society is reasonably satisfied that the proposals reflect the policies that it has evolved in recent years as a result of its involvement with other member states.
Therefore, the Government are satisfied that the United Kingdom's interests are adequately protected and that implementing the changes suggested by the Commission and the Council working party will not have any adverse effects on our NHS pharmaceutical services. Our main anxiety throughout has been to make sure that our very high standards of pharmaceutical service are not damaged or even threatened. It is an important safeguard for patients that they should know that the dispensing or prescribing
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of medicines is carried out by fully qualified professionals who guard to the maximum possible extent against mistakes or errors and against dangerous medicines being wrongly dispensed.
We feel that the proposals meet that test and, having satisfied ourselves of that, we think that it is no more than fair that pharmacists should have the same freedom of movement and right of establishment throughout the Community as is already available to doctors, nurses, midwives, dentists and veterinary surgeons.
2.21 pm
Mr. Frank Dobson: I am grateful for the Minister's lucid explanation of the documents. When I received a note about the debate, it was headed "Established Pharmacists" and I pondered why we were to talk about chi-chi chemist shops in Jermyn street. It was a relief to discover that the proper title was:
"Right of establishment for pharmacists."
The Minister has explained that the professionals and the professional examining body are satisfied with the proposal. However, having browsed through the documents and the related EEC documentation, I am not sure whether a pharmacist who wishes to come here will need to have a grasp of English, which would seem to be a useful qualification for a pharmacist wishing to serve people in this country. I hope that somewhere in the maze of documents there is an obligation on pharmacists to be able to speak and to understand English. We would not want drugs to be dispensed by people who did not understand what was being said to them or could not make themselves understood when dispensing those drugs.
Although pharmacists from this country or any other member state can in theory establish pharmacies in France, Belgium, Holland and Denmark, they will, in practice, find it difficult, because there is strict control on the location of pharmacies in those countries. Many pharmacists in this country regard that system as superior to our freedom-to-go-where-you-like arrangement. If there is a surplus of pharmacists in an EEC country, their opportunites for establishing themselves in France, Belgium, Holland or Denmark will be negligible and their opportunities for establishing themselves here will be greater because we do not put restrictions on where people can set up a pharmacy.
The Minister told me during the Committee stage on the Health and Social Security Bill that in the past year or so there had been an increase in the number of pharmacies in this country, which had previously been declining. However, I think that most people are worried about the areas where there are no pharmacies. I have since been given some detailed statistics showing that in the last six months for which figures are available, well over half of the 237 pharmacies that opened in England were within 400m of an existing pharmacy. Thus, they were not filling a geographical blank but were rather doubling up with facilities that were already in existence. However, of the 108 pharmacies that closed, 81 were within 400m of an existing pharmacy. Therefore, the bulk of new pharmacies in this country have been established close to existing ones and they may be undermining each other's incomes. Very shortly—perhaps incited by the changes that the House is likely to endorse today—we may have to contemplate some restriction on the right of establishment of pharmacies to ensure that there is a good spread of them.

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Having said that, I do not think that we—looking at the Benches behind me, I see that I overstate—I, have any violent objections to the EEC document. I certainly shall not vote against it.
2.25 pm
Mr. Roger Gale: The future of community and rural pharmacies in this country will be the subject of an Adjournment debate on Monday or perhaps a debate in the small hours of Tuesday 31 July. I do not wish to pre-empt that debate, or to go too far down the road of parallel imports or generic prescribing, but I should like to trail it.
I hope that my right hon. and learned Friend will bear in mind that drugs that are prescribed and manufactured in this country, and that are understood by our chemists, are not necessarily the same as those carrying the same name that are imported into Britain. If we are going to allow people from other countries to practise pharmacy here, we must also exercise rigid quality controls over the drugs that they are enabled to prescribe.
2.26 pm
Mr. Kenneth Clarke: I am grateful to my hon. Friend the Member for Thanet, North (Mr. Gale) for trailing his Adjournment debate. I know that my hon. Friend the Parliamentary Under-Secretary of State is very much looking forward to replying to his main points on rural pharmacies. I accept the force of what he said about drugs that are imported into this country—whether they are parallel imports or otherwise. I know that my hon. Friend has followed the steps that we have recently taken that have satisfied us that we are now importing only drugs that in every way come up to the safety standards that we require, and that are correctly identifiable by those who prescribe and dispense them here. However, we shall, of course, continue to take an interest in that subject.
The hon. Member for Holborn and St. Pancras (Mr. Dobson) bears the whole burden of representing the Opposition today. I accept the relevance of the point about proficiency in the English language. There is a maze of subordinate legislation, including Orders in Council and regulations, that will be required if we reach agreement on the directive and have to implement it here. Again, I think that it will all be non-controversial, but it will include
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changes that will enable family practitioner committees to seek satisfactory evidence of proficiency in the English language from pharmacists who want to enter into a contract with them. That will be in line with measures that have already been taken following the adoption of a similar directive relating to doctors. Thus the hon. Gentleman made an entirely valid point.
The hon. Gentleman also asked about the distribution of pharmacies, and I accept that there is a genuine issue at stake, to which we must continue to address ourselves. However, I do not think that any significant number of people will come from Europe to have any effect on that. We take pleasure from the fact that there has been some increase in the number of pharmacies in recent years. However, they tend to be clustered in very popular places, close to each other, and that is not always in anyone's interest. We have a problem in ensuring that there is a satisfactory spread of the service, across rural areas in particular. However, we have the essential small pharmacy scheme at the moment which endeavours to do just that.
At present we are in negotiations with the representatives of the pharmacists—for this purpose, the Pharmaceutical Services Negotiating Committee—about the whole nature of the pharmacists' contract. Coupled with those negotiations are further discussions with them about how far we can ensure in a contract, and in our other dealings with the profession, that we get the spread of service that the patient and public require. I am not altogether satisfied that we have got that at present.
Subject to that, I think that the directive has desirable and not undesirable consequences for all our problems in the pharmaceutical world, and I am glad that those who have spoken in the debate have welcomed it.
Question put and agreed to.
Resolved,
That this House takes note of European Community Documents Nos. 4692/81 and 4465/84, draft proposals for Directives and a Decision on the right of establishment for certain activities in the field of pharmacy, and the Explanatory Memorandum from the Department of Health and Social Security dated 16th July 1984; endorses the view that the instruments are necessary; and welcomes the United Kingdom's endeavours to encourage the adoption and implementation of these measures which will give pharmacists the same freedom of movement within the Community already afforded to the other health professions.

Student Travel Grants
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Lang.]
2.30 pm
Mr. John Powley: I am grateful, Mr. Speaker, for the opportunity to speak in my first Adjournment debate on a subject of importance not just to my constituents but to students in other parts of the country and at universities other than the University of East Anglia. I am also grateful to the Minister for coming to the House on a Friday afternoon to answer the debate.
It is appropriate that I should be moving the Adjournment debate on student travel costs, as we discussed at some length earlier today hon. Members' travel costs. The amounts involved in Members' travel costs substantially exceed those involved in student travel costs.
My right hon. Friend the Secretary of State for Education and Science announced on 4 April 1984 that there would be changes in the method of paying student travel costs. It quickly became apparent that the change might affect some students and universities. I say "some" to emphasise the point, because not all students and universities will be affected. I shall deal with the effects during the course of my speech.
I applaud the efforts of the Department of Education and Science and local authorities to try to streamline the administration of the system and so concentrate more of the available resources on helping students and using less of the resources on bureaucracy.
Under the old system of reimbursing student travel costs, £50 was included in the annual student grant whether the student lived at home or away. A student claimed from his local authority reimbursement of the necessary additional costs that he was obliged to incur. In reality, that meant claiming a return journey once a term from the student's home to the university or college and daily journeys to and from the college. The system, in which it was difficult accurately to predict the costs, involved some £46 million, with an average travel award in 1982–83 of £63.
The figures that I obtained from Norfolk county council showed that for the academic year 1983–84 there were 4,152 mandatory award holders. The total expenditure to those mandatory award holders for travel costs was £260,000. That is for travel in excess of the £50 which is included in the grant calculation. Under the new scheme introduced for the 1984–85 year, students will receive a flat-rate sum as part of their grant to cover travel costs. Students studying at home will receive £160 and those studying away will receive £100. Provision has been made for those existing students with exceptional and unavoidable high travel expenses more than £150 above what they would normally receive to claim reimbursement of the excess.
At first sight, the idea is commendable and the averaging of costs may seem an economical way to deal with the matter. The Minister said that there was an element of rough justice in the system, which of course there is. However, I suggest that there are other factors to consider, and that is part of the reason why I have raised the matter today.
Until now there has been a uniform system of student travel grants throughout England, Northern Ireland, Wales
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and Scotland. That made sense. It did not matter where one lived or came from, because the system was the same. With the proposed change, there will be a difference between Scotland and the rest of Great Britain. Scotland keeps the existing system, as was announced by the Secretary of State for Scotland on 13 February this year, while everyone else changes. I do not see why or how there can be so much difference between Scotland and the rest of Great Britain to warrant a difference in travel grants.
It cannot be questioned that some colleges and universities are more accessible than others. Some are in more remote areas of the country. Such an area in Norfolk and such a university is the University of East Anglia. My hon. Friend the Member for Norwich, North (Mr. Thompson) and I have explained on several occasions the difficulties that are involved in getting up into Norfolk because of the lack of dual carriageways and the relative inaccessibility of Norwich.
Travel costs to and from such places are much more expensive than those to and from universities in large cities in more central areas. When a student is deciding which college or university is suitable for him, he may use the travel costs that are involved as one of the deciding factors, when the decision should be based on education only. That is something that worries me and many others. It may be said that parents should make a contribution to these costs, but many do not do so, for a wide variety of reasons. Travel costs to and from university and home are a factor, and another factor is the situation of the university and the availability of student accommodation.
I have received about 650 letters, cards and representations of various sorts from students in my constituency. The pile of cards on the bench beside me is well over 6in high. Most of them are from students, but some are from parents of students who realise that extra travel costs will be involved. They have written to tell me how difficult it will be for them to help their children.
What are the extra costs that will be incurred? How many students will be affected? What are the knock-on problems? It must be admitted that some students will be better off. They will be students with less-than-average travel costs, and no doubt they will count themselves lucky. The National Union of Students calculates that the change will mean some form of hardship to one third of all students. It says that the change will affect 47 per cent. of home-based students and 32 per cent. of away-from-home students. It calculates that, over the spectrum of student travel costs which were reimbursed in 1982–83, 39 per cent. had excess costs of more than £100, 26 per cent. had excess costs of more than £150 per annum and 2 per cent. had excess costs of more than £450 per annum.
I have been in touch with students at the University of East Anglia and I am grateful to them for their help. Tim Quint is such a student and he lives at Hook Green, Kent. He has provided me with a breakdown of his travel costs. His British Rail student railcard costs £10. The Norwich citywide bus pass costs £48 per term and £144 annually. His rail travel from home to university costs £16 a term and £48 yearly. The grand total for his travel costs last year was £202. If the £50 that is already included in the grant is deducted, he was entitled to receive £150. I have a copy of his actual grant from Kent county council, which was £144.80. If this pattern of costs is repeated under the new system, my constituent will be about £52 a year worse off.

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Another constituent tells me that his bus and rail costs and his railcard cost him £279 and that after the deduction of the £50 and £100 flat allowance he is £129 worse off.
The knock-on effect is not easy to determine. As in all walks of life, some students are less responsible than others. Some students waste some of their money and then complian that they are broke and cannot afford certain items. Others behave in a responsible fashion and budget as you and I, Mr. Speaker, budget our income and expenditure. Could it be that the money needed for travel costs, which some students will now get, will have to come from moneys allocated to meet normal living expenses? Could it be that the money needed for travel costs will have to come from moneys allocated for the purchase of books and equipment? Will a potential student have to take account of possible travel costs before deciding which university to attend? Could it be that a student will have to pass by a course which his talents dictate he should go to and take a different course which is based at an establishment within his travel allowance?
There is a problem for a large number of students who have to travel long distances between where they live in town while at a university and the university. At the University of East Anglia in my constituency, the residence belonging to the univserity at Fifers lane in the constituency of my hon. Friend the Member for Norwich, North is four or five miles away and the current costs of travel between the two is more than £120 per year. My hon. Friend the Member for Norwich, North has apologised to me for not being here for this debate, but I assure my hon. Friend the Under-Secretary of State that he fully supports the arguments that I am putting forward.
The University of East Anglia was deliberately sited away from the major centre of population on the periphery of Norwich, and that will now work to its disadvantage. The position is even more marked in some other parts of the country, and Lancaster and Warwick are good examples. During the past few days colleagues have mentioned examples from their own constituencies. It is possible for universities to be selected for their geographical location rather than their academic qualities. That would put universities such as the University of East Anglia at a disadvantage.
The new system of travel grants will force students to keep their travel costs between their residences and their universities as low as possible. That factor will in turn put pressure on living accommodation in the near vicinity of the university. That will cause problems of overcrowding, sharing and multiple occupation of dwellings. One could say that students should in any case keep their costs down, and one would be right. With claims having to be submitted and scrutinised as they are now, abuses are kept to a minimum. Some universities provide specialised courses which, to make them viable, need to attract students from a wide area. It could be that because of the travel implications those courses could not be offered, and consequently the variety of courses offered could diminish and our overall education standards could drop.
On 15 May 1984, in reply to a question asked by my hon. Friend the Member for Norwich, North, the Under-Secretary of State said:
"However, I am confident that it will be possible on a local basis to find enterprising solutions to the problem that my hon. Friend has described." — [Official Report, 15 May 1984; Vol. 60, c. 136.]
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I hope that my hon. Friend the Under-Secretary of State will expand on that statement and say what he had in mind.
I have been in touch with the vice-chancellor of the University of East Anglia about the problem. He made a suggestion which I put forward for serious consideration.
He asked:
"Is it possible to classify students either as living on campus with a lower rate of travel grant; or as living off campus whether at home or in lodgings or in University residences and to award this category a higher rate of grant?"
The question that must be faced in the future with travel costs being integrated into the total grant is: what happens when an uprating occurs in future years? Under the present system, if fares are increased by British Rail or a local bus company, the student is no worse or no better off, because he claims the cost of the journeys actually made. In future, if no change is made in the present proposals and the travel costs increase by more than the percentage increase in total grant, somehow those extra costs must be borne. That means that those students who have higher than average costs will be faced with an even greater disadvantage than they are now.
Will my hon. Friend the Secretary of State give an assurance that in future, if no change is forthcoming, the increases in travel costs will be accurately reflected in the uprating of total grant? I hope that my hon. Friend will take my point seriously and consider the wider implications of the changes that have been proposed. I hope that he will seriously reconsider those proposals in the light of the examples that I have quoted and the longer-term effect which these changes in the travel grant could have.
2.44 pm
The Parliamentary Under-Secretary of State for Education and Science (Mr. Peter Brooke): I am grateful to my hon. Friend the Member for Norwich, South (Mr. Powley) for raising an important issue in such a constructive way. Students at the University of East Anglia are indeed fortunate to be represented by a Member who clearly has their interests so closely at heart and is able to present their case in such a lucid and eloquent manner. He has, if I may say so, been more eloquent than the identical postcards which arrived in profusion from his constituents.
In order to explain why the new arrangements are necessary, I think it might be helpful to describe the present arrangments for travel costs. At the moment, there is an element within the student grant—currently £50—which is intended to cover expenditure on travel. For very many students—in fact, more than half—that allowance more than covers their travel need, but those who spend more than that are entitled to claim reimbursement of any expenditure necessarily incurred over and above that in attending their course. It includes the cost of three return journeys a year between the student's home and his place of study when he is studying away from home, and the cost of daily journeys to and from his place of study from his term-time residence. The essence of the present arrangements is that each student is reimbursed individually any excess travel cost that he incurs on the basis of separate specific travel claims.
That approach has two major drawbacks. First, it is administratively cumbersome, and therefore expensive. In the academic year 1982–83 — the latest for which information is available—local education authorities

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received claims for reimbursement of excess travel expenditure from about 180,000 students, for about 43·5 per cent. of all full-value award holders. Each of those claims has to be processed individually and checked not only for its arithmetic, but, more importantly, for the accuracy of the number and length of journeys claimed, and the bus and rail fares quoted. The process is, therefore, inherently expensive in terms of manpower, and thus of cost. The difficulties are exacerbated by the fact that up to 90 per cent. of the claims handled by a paying local education authority relate to areas for which it is not responsible and with which it may not be familiar.
Secondly, the arrangements effectively represent an uncontrollable and open-ended commitment to public expenditure. The sums paid by local education authorities in respect of excess travel claims will naturally reflect the number of claimants and the size of the claims made, and those cannot be precisely estimated in advance. While I do not believe that students necessarily travel by more expensive modes than they need to, the present arrangements offer little incentive to students to choose the most economical practical means — for example, by using coach rather than rail, or by sharing cars. The new arrangements axe designed to overcome those two major drawbacks by introducing flat rates.
It is surely wrong to continue a system which is administratively expensive to operate and does not ensure that public money is under as close control as it could be. I was encouraged to learn that the vice-chancellor of the university of East Anglia, Professor Michael Thompson, sympathised with the rationale of the proposed changes, even though he expressed concern about the new rates. I shall return later to his suggestion which my hon. Friend mentioned.
Under the new arrangements, as my hon. Friend said, the present allowance within the grant for travel will be increased from £50 to £100 for those studying away from the parental home, and to £160 for those studying from the parental home. A limited number of categories of student will continue to be eligible for reimbursement, but the majority of students will not. Those incurring travel costs in excess of the amount allowed in the grant, because they are required to spend part of their courses abroad—such as those following the American studies course at the university of East Anglia — or away from the main establishment, will continue to have the relevant travel cost in excess of the amount provided in the grant reimbursed in full. Disabled students, who incur excess travel costs in respect of attendance on their course as a result of their disability, will also be entitled to claim reimbursement.
My hon. Friend has discussed in some detail the position of students at the University of East Anglia who will be made worse off as a result of the new arrangements. We have always acknowledged that the new arrangements would inevitably involve a degree of rough justice, and my hon. Friend quoted me in that respect. That is an inevitable consequence of any departure from a system which treats each student individually. But, equally inevitably, many students will gain; indeed, more will gain than lose. In the academic year 1982–83, 56·5 per cent. of all full-value award holders — about 235,000 students — made no
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claims for excess travel, and under the new arrangements all those students will gain £50 or £110, depending on where they study from.
Many students at the University of East Anglia will gain under the new arrangements. I understand that about 1,500—or more than one third of the university's population—live on University Plain. Those students should not normally face day-to-day travel expenses and so are likely to gain under the new approach. The position of those living in the city or at Fifers lane, about whom my hon. Friend spoke so eloquently, is less clear-cut, and will depend on the particular circumstances of the individual. Some who do not face high term-end travel costs, or who are able to benefit from cheap means of daily travel, may still gain, but I readily concur that inevitably some will find themselves worse off.
Students are, by their nature, intelligent and flexible people, and I am confident that "creative solutions" — again, my hon. Friend picked up that quotation—can be found to most of the particular problems that have emerged. It will, of course, be for individual students to decide how best to deploy the resources available to them. Where they consider the cost of public transport to be too high, I am sure that there is scope for private enterprise on the part of students themselves, their student unions, or institutions to act collectively to provide cheaper means of travelling to and from their places of study—to take just one example, by operating car-sharing schemes. Such solutions have not been sought before because the open-endedness of the present arrangements never encouraged them. I believe that it will be a positive bonus of the new arrangements if students are encouraged to think more carefully about how they travel to and from college.
We have also acted to take account of the real and well-founded concern expressed to us during the consultative period about some students already on courses who have exceptionally high travelling costs and little real possibility of changing their circumstances in mid course. We listened sympathetically to those concerns, and in response we announced that provision will be made for existing students whose unavoidable travel costs are more than £150 above what they will receive in grant to claim reimbursement of the excess. That should alleviate the worst of the difficulties that the introduction of the new arrangements would otherwise have created for existing students.
My hon. Friend made several related points to which I should like to respond. He referred to the Scottish situation. The provisions of the students' allowance scheme in Scotland have never been identical in all respects to the awards system in England and Wales. The decision by my right hon. Friend the Secretary of State for Scotland to retain the present travel arrangements for Scottish students took account of the special circumstances that he considered would have made it inappropriate at present to adopt the flat-rate approach. That divergence in approach is an inevitable consequence of the devolution process.
My hon. Friend referred to the suggestion of his vice-chancellor, which I have already mentioned. The vice-chancellor said that those who studied away from home but also had daily journeys from their term-time residence should become a special category. I appreciate the attractions of that suggestion, but I am afraid that it runs wholly counter to one of the main purposes of the change that we are introducing, which is to simplify rather than

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complicate the present arrangements. I understand why the suggestion has been made, but I can hold out no hope that such a scheme will be entertained or implemented in future.
My hon. Friend asked me whether I would consider the matter again and contemplate special arrangements for hardship cases. In the latter instance, I have already referred to the alleviation scheme that we are introducing for existing students, but overall at this stage one can do no more than speculate on what effect, if any, the new arrangements will have on particular institutions and individual students. Should any hard evidence emerge in future years, we would be prepared to consider it. Consequently, we shall follow developments.
The new arrangements represent an important change in practice. Inevitably, a change of this magnitude involves both benefits and costs, but I believe that the benefits, which I have outlined, outweigh the costs. Our proposals involve a degree of rough justice but I do not believe that they imply an unacceptable degree. The
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majority of students will be better off under the new arrangements and we have taken steps to limit the losses for existing students.
The proposals will bring under closer control an important area of public expenditure on which the taxpayer and the ratepayer will probably spend £39 million this year — by no means an insignificant sum — and will significantly simplify local authority administration. No decision has so far been made about the separate uprating of travel grant, but I recognise the force of my hen. Friend's argument.
I am sure my hon. Friend will agree that it is in the interests of everyone — students, local authorities, institutions, taxpayers and ratepayers—to have a cost-effective student award system. I think that our proposals work towards this, but I am most grateful to my hon. Friend for giving me the opportunity to respond to the debate this afternoon.
Question put and agreed to.
Adjourned accordingly at four minutes to Three o'clock.

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

Cot Deaths
Baroness Vickers: 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 will take, in view of the fact that cot death syndrome claims the lives of up to 1,800 babies each year, to aid further research into ways of preventing these tragic deaths.
The Parliamentary Under-Secretary of State, Department of Health and Social Security (Lord Glenarthur): My Lords, we are of course concerned about the incidence of cot deaths and the need for more information, but the latest figures we have about sudden infant deaths suggest that the numbers are not as high as the noble Baroness suggests. The department has sponsored, at a cost of over a quarter of a million pounds, research aimed at identifying those babies most at risk and isolating any avoidable factors which may have contributed to known cot deaths.
The Medical Research Council is the Government's main agency for the promotion of medical research and it supports work which may be relevant to cot deaths through its research grants scheme.
Baroness Vickers: My Lords, while thanking the noble Lord the Minister for that reply, may I ask him whether he knows that every day in the United Kingdom there are five cot deaths? The babies die suddenly, silently and unexpectedly, with no known reason. Intensive research into the causes of cot deaths and the prevention of them is being carried out by an organisation which is funded by the Foundation for the Study of Infant Deaths. It is an independent and voluntary organisation. We should like the Minister to encourage the health authorities to collaborate with this fund in its research to help identify children at risk and to provide extra primary health care to those at greatest risk.
Lord Glenarthur: My Lords, certainly I share all my noble friend's views on how awful it is for all those who are concerned with cot deaths. The Foundation for the Study of Infant Deaths plays a key role in promoting research into sudden infant deaths, and the department encourages the foundation in its work. To help the foundation cope with an increased demand for its welfare and counselling activities, we have awarded a grant of £10,000 towards the cost of appointing a full-time professional officer. I hope that my noble friend will find that encouraging.
Lady Saltoun: My Lords, I know of a case where a cot death was prevented by prompt action. I should like to ask the noble Lord whether he would not agree that the apparent increase in cot deaths in recent years may be due to the fact that babies sleep less and less in the same room as their parents and more and more in separate rooms, which was not possible in the old days of overcrowded housing.
Lord Glenarthur: My Lords, that may be true in regard to a small proportion of sudden infant deaths. The fact is that there is no precise cause of cot deaths, or at least none which has been isolated so far. In fact, there may be several associated factors.
Baroness Gardner of Parkes: My Lords, I should like to ask the noble Lord the Minister whether, in this matter, there is any particular relationship in terms of areas, in the same way as there is in perinatal deaths. Is there any particular known distribution, or any factor of that type, which might have an effect in this matter?
Lord Glenarthur: No, my Lords, I do not think there is. Perinatal deaths are another matter, but in regard to cot deaths, there does not apppear to be any particular geographical disposition.
Lord Ennals: My Lords, the Minister referred to the Medical Research Council, which of course has the main and central responsibility for research into this very disturbing problem. Is he aware that Professor John Davies and Dr. Colin Morley of Addenbrooke's Hospital, Cambridge, submitted three projects for support from the Medical Research Council, costing, in all, £225,000? They received a grant of £4,500, which was a drop in the ocean. As I understand it, that was because of the inadequacy of DHSS funding. They are highly reputable researchers. Would not the Minister, together with his right honourable friend, look at this with some sense of urgency, because here is a problem the answer to which he himself admitted is not clear? Here are highly qualified people prepared to launch research in this field.
Lord Glenarthur: My Lords, Dr. Morley's current work is in the field of infant lung coatings and respiratory distress syndrome among premature babies, rather than in the field of what is commonly referred to as cot deaths. The Medical Research Council declined to fund his recent application to pursue a hypothesis linking this work with cot deaths. That decision was made on scientific grounds. It is unfortunate that the current Medical Research Council funded work should have been so firmly identified in the media with cot deaths. I think there has been misrepresentation to some extent.
Lord Ennals: My Lords, with respect, and following on from that, as I mentioned, there were three projects, and the Minister has referred to only one of them. Is he aware that the Medical Research Council was prepared to fund the other two had funds been available?
Lord Glenarthur: My Lords, I am afraid that the noble Lord is not correct on that. The fact is that the three proposals were not connected with cot deaths. One was merely linked with them.
Lord Ferrier: My Lords, is it not a fact that there is talk in Edinburgh of the discontinuance of some very guid-going research into this problem by the Edinburgh Medical School, due to financial shortage?
Lord Glenarthur: My Lords, I am not aware of that. but certainly I shall look into it.
Lord Dean of Beswick: My Lords, would the noble Lord not agree that if one goes back to the statistics regarding infantile deaths in the period before the last local government reorganisation, when the medical officers of health for the local authorities used to submit their annual reports, one sees that the horrendous figures for infantile deaths then arose mainly from the overcrowded and deprived areas of the inner cities? Is it not a fact that we have moved away quite a lot from the horrendous figures of that era?
Lord Glenarthur: My Lords, as I said in answer to the noble Lady, Lady Saltoun, there are many factors which lead to these deaths, and I dare say that the factors to which the noble Lord has referred are included. But a great deal of important data has been brought together on the subject, and officials at the Department of Health are considering with a team at Sheffield how the material can be best further analysed and exploited. Following their report, which is expected by the end of the year, the department is intending to sponsor a seminar to discuss possible future studies based on the information which is now available.
Lord Morris: My Lords, is my noble friend aware that in the case of premature and frail babies the monitoring of breathing is standard practice by means of a very simple electronic device? Would my noble friend be good enough to look into this matter and find out whether it would be possible for Her Majesty's Government to encourage the production and distribution of this very simple device to mothers who have a problem monitoring the condition of their children?
Lord Glenarthur: My Lords, with respect, I think that that is possibly another question, because when it comes to sudden infant deaths, if the child is not well anyway then presumably he will be under the care of his own doctor.
Baroness Masham of Ilton: My Lords, I should like to ask the Minister whether some of the research has shown that cot deaths have been contributed to by overheating and by the babies being cocooned in bedclothes and not being able to move, or by the fact that they have been too cold? Is the importance of temperature control and the right temperature passed on to prospective parents?
Lord Glenarthur: My Lords, that may well be one of the factors that contribute to some of these cot deaths, but we do not really know. So far as passing on that
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type of information to parents is concerned, that is something which should be done by the people who look after the mothers and the children concerned, and I am sure that they will note the remarks which have been made by the noble Baroness.
Lord Ferrier: My Lords, I believe that the Edinburgh inquiry to which I referred is concerned with the question which the noble Baroness has asked.

Toys and Electrical Appliances: Safety
11.15 a.m.
Lord Auckland: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government how many children's toys and electrical appliances have been imported into this country since 1980; how many accidents and injuries due to faults in imported toys and electrical appliances have been reported; and whether they are satisfied that the relevant safety regulations currently in force are adequate.
Lord Lucas of Chilworth: My Lords, the total value of imports of domestic electrical appliances from 1st January 1981 to 31st March 1984 was £1,651 million. The total value of imports of toys was £694 million for the same period.
The accident figures collected by the Home Accident Surveillance System of the Department of Trade and Industry do not separately identify accidents involving imported products. The total number of accidents reported on a sample basis to that unit between November 1980 and November 1983 involving electrically powered appliances was 9,681, and the number involving toys was 3,033. From these figures it has been estimated that in the one year, 1982, some 42,000 accidents involving electrically powered products and some 13,000 accidents involving toys occurred in England and Wales. The Government are not wholly satisfied with the adequacy of safety legislation at present, and we have just published a White Paper (Cmnd. 9302) with proposals for improving the safety of consumer goods.
Lord Auckland: My Lords, I thank my noble friend for that helpful reply, which will need very careful and serious study. First, I declare my interest as a non-executive vice-president of RoSPA, and I should like to ask my noble friend whether his attention has been drawn to page 3 of the June edition of Care in the Home, published by RoSPA, which shows an Autobang car made in Spain which has a mousetrap-like mechanism and which, if a child catches his fingers in the trap, can severely damage them? Also, has my noble friend's attention been drawn to last Sunday's "That's Life" programme, where rubber rings were displayed—made, I think, in the Far East—which overturned in the sea and which, unless there was some adult close at hand, the child had no hope whatever of righting? Finally, is my noble friend aware that in paragraph 28 of the White Paper there is an indication that Her Majesty's Customs have no

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power of seizure of these imported toys? Will my noble friend give an assurance that these matters will be very carefully looked into?
Lord Lucas of Chilworth: My Lords, I am grateful to my noble friend for his reference to RoSPA, and, of course, I am glad to confirm his interest in their work. I am sorry I have no knowledge of the page 3 item to which he referred, but I shall look into it. But I do have some knowledge of the rubber ring which was the subject of the "That's Life" programme last weekend. The department's safety unit has looked into this matter and we feel that there is no case here for banning that particular item. However, as regards all children's toys, particularly beach toys or toys that are used in swimming baths or in the sea, one would look for a great deal of parental supervision.
As regards my noble friend's last question, on paragraph 28 of the White Paper, I would point out that the Customs and Excise do not have powers to seize goods of this kind, and that is precisely why the White Paper has been produced—to seek the views of all interested parties in order that adequate and proper controls can be formulated for the future.
Baroness Gaitskell: My Lords, I should like very briefly to support the noble Lord, Lord Auckland, on this most important question. Would it not be a good idea if we started to deal with imported bad toys, and then went on to deal with our own toys, some of which are no good at all and whose manufacture definitely ought to be stopped?
Lord Lucas of Chilworth: My Lords, toys and other electrical products come from countries right across the world. It would be difficult to single out any particular one. But the safety unit in the department is made aware of such cases and acts very quickly, as of course do the trading standards officers who have the responsibility under the various consumer protection Acts.
Lord Mulley: My Lords, while not wishing to underrate the importance of safety, does not the noble Minister's answer reflect another serious problem—namely, that as a manufacturing country we are importing such a vast amount of toys? Can he give us figures for the toys that we export? Is not the lack of our manufacturing capacity and our ability to pay our way a cause for further concern?
Lord Lucas of Chilworth: My Lords, I take the point that the noble Lord, Lord Mulley, makes but I very much regret that I do not have those figures, as the subject of the export of toys is rather wide of the original Question.
Lord Ennals: My Lords, bearing in mind the safety standards that are supposedly required for home-produced toys, should not these same standards apply to toys imported from abroad, particularly in view of the fact that quite obviously there has been a substantial increase in the number of dangerous toys being imported into this country? Is not this a rather urgent problem?
Lord Lucas of Chilworth: My Lords, of course the problem is urgent but, as the noble Lord, Lord Ennals, will know, only a number of goods are regulated. Most of the goods to which my noble friend's Question refers are non-regulated goods. Therefore, until we alter our regulations—and that is the whole purpose of the White Paper—it is difficult to impose controls at the point of entry, as distinct from the selling point, which is the responsibility of the trading standards officers.
Lord Leatherland: My Lords, does the noble Lord the Minister have any evidence to show whether there is any danger in the use of electric razors? I appreciate that he has no interest to declare.
Lord Lucas of Chilworth: My Lords, as the noble Lord, Lord Leatherland, will observe, I have no knowledge of razors.
Baroness Masham of Ilion: My Lords. to bring this discussion back go a more serious topic, is the Minister aware that in Peterlee, which is one of our new towns, there is a splendid Fisher Price toy factory which is giving excellent employment facilities to many of our people, and that the toys are of very good quality and very safe?
Lord Lucas of Chilworth: My Lords. I am most grateful to the noble Baroness for that information. I did not know of that particular factory, but I am very glad to hear what she says about British produced toys.

Miners' Dispute
11.23 a.m.
Lord Molloy: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what further meetings are envisaged at Cabinet level with the chairman of the National Coal Board in an endeavour to resolve the miners' dispute.
The Parliamentary Under-Secretary of State, Department of Energy (The Earl of Avon): My Lords, settlement of the dispute remains a matter for the NCB and the NUM. I believe that we in this House all share the aim of seeing an early conclusion to it.
The National Coal Board has put forward reasonable and constructive proposals, and Mr. MacGregor has stressed his readiness to continue negotiations at any time. It is a matter of the deepest regret that the leadership of the NUM has shown no positive interest in negotiating a settlement to this damaging and senseless dispute.
Lord Molloy: My Lords, is the noble Earl aware that it is equally distressing, and damaging, that a person brought to this country because this Government were of the opinion that no Britisher could run the National Coal Board should cause such offence to so many people in the mining industry? However, there now

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seems to be progress towards a settlement. It would also appear that there has been private intervention by the Prime Minister herself, if I may put it that way. Therefore, the matter must have been discussed at Cabinet level. So, if this present negotiation was initiated at Cabinet level, why cannot the Cabinet continue to try to help to resolve this disastrous problem which faces not merely the mining industry, but also our whole nation?
The Earl of Avon: My Lords, if the noble Lord reads the Hansard report of the Prime Minister's Question Time, he will realise that what he says is not true. As regards the noble Lord's remark about the chairman of the National Coal Board, Mr. MacGregor's first point in his programme for the coal-mining industry says:
"We will continue a major investment programme far greater than that of the coal industries of the whole of the rest of the European Community, an investment programme which will provide Britain with the most effective and efficient coal industry in Europe".
I am sure that that is what we all want.
Lord Boyd-Carpenter: My Lords, is my noble friend aware that the suggestion contained in the Question of the noble Lord, Lord Molloy, would be utterly futile inasmuch as the continuance of this strike has been declared by the leadership of the miners' union to have political aims, including the destruction of the Government? Therefore, is it not for the miners themselves to take a hand and stop it?
The Earl of Avon: Indeed, my Lords, one would welcome a ballot of the mineworkers, so that they can make their own decision.
Lord Jenkins of Putney: My Lords, is it not the case that if we are to use terms such as "the enemy within", they would be better applied to Mr. MacGregor than to Mr. Scargill?
The Earl of Avon: No, my Lords, certainly not; and any reasonable person who has read what the coal hoard has put forward would entirely disagree with the noble Lord.
Lord Renton: My Lords, is my noble friend aware that some years ago when the Labour Party asked Parliament to nationalise the coal mines they insisted that the National Coal Board should be constitutionally independent?
The Earl of Avon: My Lords, I am grateful to my noble friend for bringing that point to the attention of the House.
The Earl of Lauderdale: My Lords, will my noble friend not agree that, so far from blaming Mr. MacGregor, we should all look to the affront to democracy and, indeed, to the brotherhood of man, constituted by a strike which has no democratic basis? Should we not bear in mind that no man is an island to himself?
The Earl of Avon: Indeed, my Lords; as I said in answer to an earlier question, the mineworkers who are working did ballot, whereas those who are not did not have a ballot.
Lord Stoddart of Swindon: My Lords, the noble Earl's reply to my noble friend's original Question was singularly and uncharacteristically unhelpful. At the present time we need an emollient, rather than the opposite. Is it not a fact that Mr. MacGregor would be very happy—indeed, anxious—to settle the present dispute but for the Prime Minister's insistence on having total victory over the National Union of Mineworkers, and Mr. Scargill in particular? Indeed, her Falklands mentality is, unfortunately, continuing, to the detriment of the mining industry and of the country as well.
However, I should like to be helpful. Indeed, the Labour Party wants to be helpful in this particular dispute. May I, therefore, return to the suggestion which I made earlier and ask—
Noble Lords: Speech!
Lord Stoddart of Swindon: My Lords, I am prefacing my question with some apt remarks, and it is useless asking questions which are not understandable to noble Lords. Therefore, perhaps I may return to the suggestion that I made a week or two ago and ask the noble Earl the Minister whether he would suggest to his right honourable friends that they should offer to both sides in the coal dispute the opportunity to have a court of inquiry which would be able, quite impartially, to examine the reasons for the dispute and the future of the coal mining industry. Would the noble Earl listen to that suggestion and perhaps pass it on?
The Earl of Avon: My Lords, I think that the noble Lord will find that I am reasonable, but, on the other hand, unhelpful questions are rather apt to receive unhelpful answers. What I should like noble Lords opposite to do is to back to the best of their ability the nine-point plan which the coal board has put forward, and to ask the mineworkers who are on strike not to intimidate those miners who wish to work. I believe that if they were to do that, we would see a speedy conclusion.
Baroness Seear: My Lords, is the Minister aware that we on these Benches want as much as anyone to see a quick, peaceful settlement of this dispute, but that we are also very much of the view that the dispute must be settled by sensible negotiations and not as the result of capitulation to what amounts to force?
The Earl of Avon: My Lords, I am aware of the views expressed by the noble Baroness's party, with which of course I agree.
Lord Molloy: My Lords, is the noble Earl aware that the Question was raised in order to be helpful? Among the most responsible elements of the British press and the CBI there are indications that there has been some form of meeting between Mr. MacGregor, or his representative, and the Prime Minister. Perhaps that

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started this round of negotiations. If we in this House can make a contribution, let me concede that I believe that it would have been a good thing if there had been a national ballot.
Secondly, despite there having been no ballot, there is massive support for the miners, which has been exhibited by their wives and children more than by anyone else. Is the Minister aware that it does not help us to try to make a contribution to resolving this dispute if we spit venom and hatred towards Britain's coal miners, their wives and their children? We also ought to have the courage to say that the image of our police in carrying out their difficult task is not enhanced by the behaviour of some of them. If we can therefore say—
Noble Lords: Speech!
Lord Molloy: My Lords, it is a speech, but there is a great deal of importance attached to this question. If we can encourage both sides now to get together with the geologists—not just with the financiers such as MacGregor—who understand coal mining, in order to resolve the question of pit closures, that will be the way to peace within this mighty industry of ours.
The Earl of Avon: My Lords, I should like to make one remark about the noble Lord's speech, and that is that there are a lot of pits working, and we are here talking about only a part of the industry. One of the sadnesses is that the industry is split in half. The other comment I should like to make, in regard to his second point, is that at the moment there is very little difference between the two sides; the interpretation of the word "beneficial" is one of the differences, and I hope very much that this can be resolved.
Lord Cledwyn of Penrhos: My Lords, is the noble Earl aware that we on this side of the House desire nothing more than a fair and equitable resolution of this unhappy and disturbing dispute? Does he not believe that, given the amount of violence which exists in the country, not only in this sphere but in others as well, it is at this time very much in the public interest that the Government themselves should take an initiative? Is he aware that if such an initiative were now taken it would be greatly appreciated by all the people of this country, and it would certainly be preferable to what is by way of developing into an obstinate refusal to do anything at all to seek a resolution? If the noble Earl is not able today to comment on the proposal of my noble friend that the matter should be referred to an independent public inquiry of some kind, would he be good enough to discuss it with his right honourable friend, who would in turn discuss it with the Prime Minister?
The Earl of Avon: My Lords, I must again put to the noble Lord the point that this dispute is now on a very small issue indeed, and we very much hope that that will be settled. But in the meantime Her Majesty's Government have made available a massive investment and have quite clearly laid it on the line that they want the most efficient and effective coal industry in Europe.
Lord Oram: My Lords, is the noble Earl aware of the tremendous, patient and diplomatic efforts that have been made by my right honourable friend Mr. Stanley Orme, the spokesman for these matters in another place, to bring the two sides together? Would it not have eased the situation considerably if a spokesman of Her Majesty's Government had joined in those efforts?
The Earl of Avon: My Lords, I am aware that the right honourable gentleman, Mr. Orme, did indeed help in getting the National Union of Mineworkers to the table. I am delighted to say, as I said earlier, that the National Coal Board's door is open at any time.

Bank Rate Rise: Effect on Industry
11.34 a.m.
Lord Beswick: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what is the estimated annual increased cost to British industry of each 1 per cent. increase of the bank rate.
The Chancellor of the Duchy of Lancaster (Lord Cockfield): My Lords, the effect of each 1 per cent. increase in base rates is to increase the net interest payments of industrial and commercial companies by about £250 million a year.
Lord Beswick: My Lords, does the noble Lord agree that this is a serious imposition upon industry? On the CBI estimate, it will mean another £500 million a year extra to industry. Has the noble Lord seen the Financial Times Marplan poll published this week which said that 66 per cent. of company directors say that the recent increase in bank rates would be damaging. or very damaging, to the economy? In these circumstances ought we not to find a much more sensible way of controlling the money supply?
Lord Cockfield: My Lords, I join with the noble Lord, Lord Beswick, in regretting the increase in interest rates. There is nothing between us on that at all. As he refers to the effects on industry, perhaps I may refer him to what Sir Terence Beckett, speaking on behalf of the CBI, in fact said. He said:
"The latest rise is unwelcome but inevitable in the circumstances. The underlying situation is one of good steady growth and low inflation. We are confident that this will reassert itself".
As the noble Lord, Lord Beswick, knows, the immediate cause for the rise in interest rates was primarily the trend of interest rates in the United States of America. That, unfortunately, is something we cannot insulate ourselves from.
Lord Beswick: My Lords, I saw what Sir Terence said, and I know that Sir Terence tends sometimes to say, things which reflect the feeling of the Government. Would the noble Lord look at his own figures from the Central Statistical Office, which show that manufacturing output in this country at the beginning of this year, before the miners' strike started, was 11.5

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points below that of 1979 when this Government took over? In those circumstances is it sensible to impose this extra burden upon industry?
Lord Cockfield: My Lords, the noble Lord is now straying wide from the original Question.
Lord Stoddart of Swindon: It is relevant, though.
Lord Cockfield: Perhaps the noble Lord would kindly wait to hear the rest of the answer. The fact of the matter is that total output in this country is now higher, not lower, than it was in 1979. But the simple truth of the matter is that there are some matters which are outside the control of any government. We cannot insulate ourselves from what goes on in the United States of America. The United States of America accounts for 24 per cent. of the GNP of the world, and therefore it is one of the facts of life which must influence what goes on elsewhere.
The rise in interest rates in this country was not due primarily to domestic circumstances, over which we do have some control and where our policies have been directed to keeping interest rates down. The rise was primarily a reflection of what is happening in the United States of America. We have on many occasions over the last two years drawn the attention of the American authorities—and so have other Western leaders—to the deleterious effects of the large rise in American interest rates. In these matters there is nothing whatever between the noble Lord and myself. We both regret this rise in interest rates. The important thing is to ensure that, in so far as matters are within our own control, we follow the sort of policy which will keep rates down and not force them up.
Baroness Seear: My Lords, would the Minister consider that a moderate further fall in the value of sterling would do less damage to British industry than an increase in interest rates?
Lord Cockfield: My Lords, we are now moving from interest rates to exchange rates, but the fact of the matter was that the rise in interest rates was not the result of a policy decision to try to fix the rate of sterling at any particular point. We do not target the exchange rate. The rise in interest rates was due to the feed-through effects on the money markets of the rise in American interest rates.
Lord John-Mackie: My Lords, does the figure the noble Lord quoted include agriculture?
Lord Cockfield: My Lords, the Question relates to industry, but if the noble Lord's question is whether the output of agriculture has increased since 1979 I should have thought that it had increased substantially.
Lord Mulley: My Lords, while I appreciate the Minister's comment that we cannot insulate ourselves from external effects, would he not agree nevertheless that it is difficult to get people to invest in industry when they can earn such high sums by merely lending their money? Secondly, is not the interest rate a
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reflection of the low opinion held internationally of our own economic circumstances which results from our frittering away the oil revenues instead of spending them on good investments?
Lord Cockfield: My Lords, the latter part of the noble Lord's statement is quite incorrect. So far as the earlier part of his question is concerned, perhaps I may ask him to repeat it. He rather diverted me with his long diatribe.
Lord Mulley: My Lords, I assure the Minister that I can deliver as long a diatribe as he is capable of if he tempts me. He has been in business and I ask him how he can expect people to invest in, for example, the new issues that the Government intend to put on the market to sell off our own nationalised industries. How can he ask people to support that when they could receive more money by merely lending it to the banks?
Lord Cockfield: My Lords, the noble Lord will be surprised to know that I agree with his basic thesis. This is why our policies have been directed to getting interest rates down in this country. I am glad of his support for the Government's general financial policy.
At the same time, the earnings of industry have been increasing. Profits last year were up by 25 per cent. compared with the year before. The way to have a healthy expanding industrial section is to have a higher level of profitability and a lower level of interest rates. I entirely agree with the noble Lord on that point.
Lord Morris: My Lords, my noble friend suggests, and I am sure it is so, that it is not possible for the United Kingdom to insulate itself from the possible effects of what has happened in the United States of America. Would he not agree that it is therefore increasingly important to continue to put as much pressure as possible on the United States of America to be aware of the effects of their economic moves upon Europe as a whole?
Lord Cockfield: My Lords, I agree with my noble friend. We have on many occasions drawn the attention of the United States Administration to these matters.
The Minister of State, Ministry of Agriculture, Fisheries and Food (Lord Belstead): My Lords, I am sure all your Lordships' Benches are enormously interested in listening to this exchange of views. On behalf of my noble friend the Leader of the House, who is not here today, I would remind your Lordships that we have breached our own Standing Orders to the tune of 16 minutes. We have, in fact, taken very nearly double the length of time that the Companion to Standing Orders recommends that Questions should last. May I therefore suggest that we take the question of the noble Lord, Lord Bruce, and then move on to other business?
Lord Beswick: My Lords, may I suggest that if the noble Lord wishes to control Question Time he should have got up earlier? It is not right to control the fourth Question and not the others.
Lord Bruce of Donington: My Lords, is the noble Lord aware that his statement that the Government have no target for exchange rates is one that will be received with considerable interest? Is he also aware that his own statement that the Government have no control over interest rates goes completely against the quite willing, disastrous and aggressive rise in interest rates in 1979? Further, if he says that the Government have no control over interest rates, can he state what justification there is for his right honourable friend the Chancellor of the Exchequer to express the view that the existing interest rates are only temporary? How can he know? Or does the word "temporary" imply that there might be a further rise in interest rates within a fortnight?
Lord Cockfield: My Lords, so far as the first supplementary question asked by the noble Lord is concerned, the statement that I made that the Government do not target the rate of exchange is one that has been made on numerous occasions by Government spokesmen and it represents the position.
So far as his second supplementary question is concerned, the noble Lord was endeavouring to place certain words in my mouth when he referred to controlling the rates of interest. The position is that Government policy has a very important influence on domestic interest rates. This is why we pursue the responsible fiscal and monetary policy that we do. Apart from that, there are external influences on the internal economy. If the noble Lord cares to turn up the budget speeches of the late Dr Dalton, who subsequently became a Member of your Lordship's House, he will find these matters spelt out very clearly some forty years ago.
Lord Belstead: My Lords, on behalf of the Leader of the House may I say that we are now within a minute of having taken double the length of time that Questions would normally take. Of course, I understand that the noble Lord, Lord Beswick, having asked the original Question, would like to ask the last question. Of course, I understand that. But there is no such right in the Companion to Standing Orders. The accepted custom in this House is that the noble Lord who asks the first question then asks the first supplementary and after that other questions are asked. But there is no right to ask the final question. Therefore, I feel that on this occasion this is the moment when we should pass on to other matters.
If the noble Lord, Lord Beswick, persists in asking his question, the noble Lord will of course be listened to with courtesy in the customary way of this House, but without sympathy.
Lord Beswick: My Lords, I heard what the noble Lord said: the reference is to "normally". Standing Orders are adhered to normally. Friday is a rather unusual day. Secondly, in this case the other Questions took up rather a long time and I suggest that it would not be right to adhere to the 20 minutes by squeezing out the final Question. I want to ask, if I may, without the sympathy of the noble Lord, does the noble Lord, Lord Cockfield, expect the recent rise in interest rates to have any effect on the flotation of British Telecom and British Airways shares in the near future?
Lord Cockfield: My Lords, that is a totally different question from what appears on the Order Paper.

Argentina: Talks
11.46 a.m.
The Minister of State Foreign and Commonwealth Office (Baroness Young): My Lords, with the leave of the House, I shall now repeat a Statement on Argentina—Talks, which is being made in another place by my right honourable and learned friend the Secretary of State for Foreign and Commonwealth Affairs. The Statement is as follows:
"I will, with permission, Mr Speaker, make a Statement on the talks which took place in Berne on 18th and 19th July between British and Argentine representatives.
"As my right honourable friend the Prime Minister and I have consistently made clear to the House, we are not prepared to discuss with the Argentine Government the question of sovereignty over the Falkland Islands. But it is plainly in our interests, as well as those of Argentina and of the Falkland Islanders, that we should move towards more normal relations between Britain and Argentina. We therefore sought, in exchanges through the protecting powers over many months, to establish an agreed basis for talks which would achieve that end.
"After careful and detailed discussions, a clear basis was agreed which would enable talks to take place. It was of course very clear to us that if the talks were not to founder at the outset on the issue of sovereignty, any such arrangements needed above all to meet the different positions of the two sides on that question. Accordingly, the specifically-agreed arrangement on that point was that if the Argentine representatives raised the question of sovereignty, as they clearly wished to do. the British representatives would make quite clear in reply that we were not prepared to discuss it. Discussion would then move straight on to practical issues of concern to both sides and would continue on those subjects. This basis was plainly agreed and clearly understood by the Argentine Government. This arrangement was also confirmed by the Swiss Government.
"When the talks opened in Berne, the British side complied scrupulously with this arrangement. As foreseen, the Argentines began by raising the question of sovereignty. We replied by making it plain, again as foreseen, that we were not prepared to discuss it. We went on to suggest a number of practical issues—such as the resumption of normal commercial and financial relations, the restoration of the air services agreement between Britain and Argentina, and a visit by Argentine next-of-kin to the Falkland Islands—on which there could be some prospect of agreement.
"We regarded this as the best way to start restoring confidence between Britain and Argentina. But the Argentine representatives were not prepared to continue the talks on this basis, although it had been agreed in advance. They argued that discussion of any of the practical issues put forward by the British side would have to be linked to discussion of

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a mechanism to address the question of sovereignty. Unless this new condition was met, the Argentines were not prepared to continue the talks. This was totally at variance with the agreed basis and the talks thus came to an end.
"Her Majesty's Government continue to take the view that it is in the interests of all concerned to seek the restoration of more normal relations between Britain and Argentina. I am sure that the House will share my sense of regret and frustration that, after many months of careful preparation, the Argentine Government brought the talks to an abrupt and premature end by failing to proceed upon the basis that had been clearly agreed."
My Lords, that concludes the Statement.
Lord Cledwyn of Penrhos: My Lords, we are grateful to the noble Baroness for repeating the Statement. We support the Government's readiness to join in these talks and we deeply regret the breakdown. We hope that this is merely temporary as it is very much in the interests of Argentina and ourselves that we should return to normal relations as soon as possible and we hope that further efforts will be made to resume negotiations. I wonder whether the noble Baroness can tell us if there is any expectation that talks will be resumed with the Argentine representatives. While I accept that the Argentine representatives went back on the agreed mechanism for dealing with sovereignty, is it not the case that the formula was a fragile one from the start? A formula which enables the Argentine Government to raise the subject of sovereignty and then allows the British representatives to, say that they would not discuss it, with an expectation that the Argentines would be prepared to drop it and discuss other matters, on the face of it seems very facile; although I do not doubt that that was the agreed basis. But it seems to have been a very shaky basis from the start.
Would the noble Baroness not agree that a very much firmer basis for discussion is needed, especially bearing in mind the undoubted domestic difficulties facing the new Argentine Government? Would the noble Baroness not agree also that there is a case for referring the question of sovereignty to a third party—preferably the International Court of Justice—provided that the Argentine Government are prepared to commit themselves to accepting the findings of that court as we should have to do? Is she further aware that we fully support the practical issues which the Government had in mind as an agenda for these talks and that we hope that some way can be found of returning to these practical matters at an early date as their settlement is very much in the interests of the Argentine people, the Falkland Islanders and ourselves?
Lord Gladwyn: My Lords, we, too, should like to thank the noble Baroness for repeating this important Statement and to express our dismay at the fact that the talks, so evidently necessary, have now (for whatever reason) broken down. The first question that I should like to ask the noble Baroness is this. Was the specifically agreed arrangement, as it is called, that sovereignty should not be discussed formulated in
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writing? If so, could the necessary document or documents be produced so as to make it absolutely clear that the Argentines did go back on their word? That is point one.
The Government perhaps may be aware that in my last speech on this subject some months ago I suggested that if and when talks with the Argentine started it should be agreed that the question of the political future—and not sovereignty, which is a highly tendentious term—should not be excluded from the talks, though it will be approached only if and when progress has been made in other urgent fields. That is what I suggested. Could such a formula still prove to be acceptable and the negotiations eventually resume?
Thirdly, I note—and I may be wrong—that the Argentines do not seem to have insisted that sovereignty itself should he discussed in the talks; but rather that there should be discussion of a mechanism to address the question of sovereignty, which seems, to me at least, to be rather different. If so, is not this a mechanism for discussing eventually the question of sovereignty—or indeed the political future, as I would say—of the islands? Is this not a possibility? If the political future of the islands is ever to be discussed and if it is ever to be the subject of negotiations—and after all it was the subject of negotiations for years and years before the war—surely the negotiations should not be confined to the Argentines and ourselves but should have other participants unless, as the noble Lord has just said, a decision is made to take the whole question to the court. I hope that the noble Baroness will be able to reply to these I hope rather pertinent questions.
Baroness Young: My Lords, I should like to thank both noble Lords, Lord Cledwyn and Lord Gladwyn, for the reception of this Statement. The noble Lord, Lord Cledwyn, has said that he regretted the breakdown of the negotiations, as indeed do Her Majesty's Government. But I was glad to hear him say that he supports the practical issues on which we have sought to have better bilateral relations with Argentina. He asked what the next moves are; and whether are we to resume negotiations; I think that the noble Lord would agree that at the present time the need is to pause and reflect over these matters.
He asked whether the formula on sovereignty was not a very fragile one. The fact was (as he himself has agreed) that it was a formula that was agreed with the Argentine Government. And I can confirm to the noble Lord, Lord Gladwyn, that it was an arrangement in writing. Both noble Lords have raised the whole question of sovereignty. We are confident of our position on sovereignty. We have made our position on this matter abundantly clear on a number of occasions. The fact of the matter is that the Argentines have to live with the consequence of the fact that it was they who used force and invaded the islands while we were negotiating on this matter in good faith.
The noble Lord, Lord Gladwyn, suggested a formula in which we might discuss not sovereignty but the political future of the islands. I have already indicated the Government's clear view on the matter of sovereignty and we would not wish to enter into negotiations in which we would be misleading the

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Argentines on this matter. On the question of whether or not the Argentines might say that they wish to discuss a mechanism to address the question of sovereignty when raising a separate point, the fact of the matter is that we entered into these negotiations on an agreed basis with a formulation as I have described it. We believe that this was a way in which we could have moved forward. It is a matter for regret that the Argentines have not kept to it.
Lord Gladwyn: My Lords, I wonder whether the noble Baroness would agree to publish the documents in which the agreement was arrived at.
Baroness Young: My Lords, as I have indicated, these matters are in writing and I will certainly consider what the noble Lord has said.
Lord Home of Hirsel: My Lords, is it not clear that the wounds of war are far too raw for the Falkland Islanders to discuss the question, or to raise the question of sovereignty at all or even the political future which must contain the item of sovereignty? This is particularly raw when the Argentines continue to refuse to state that the state of war is at an end. I should not have thought that there was any practical future in discussing or even raising the question of sovereignty now.
Baroness Young: My Lords, I am grateful to my noble friend for his intervention. He has raised of course the most important point on this matter. As I have indicated, we are not prepared to negotiate sovereignty.
Lord Molloy: My Lords, would the noble Baroness not agree that the wounds of war were not too savage just 12 months ago for this country to make a substantial financial loan to the Argentine Government, and that that ought to hold us in very good stead? Our present Government in their last endeavours have made something very worthwhile which ought to have been seized upon by the Argentine Government for negotiations to continue. They have done very well indeed, and it is to be regretted that their endeavours have not been properly appreciated.
My last question is this. Is the noble Baroness not aware that if we were to divide the subject matters and to say that we should have further discussions on economic issues which can be of benefit to both countries; and that to be followed at a later agreed date on the political issues that divide us; and that if there are two separate meetings or conferences, first, on the economics and that to be followed at a later stage by the political element, then the atmosphere could change to make it a possibility of there being a reality?
Baroness Young: My Lords, the record will show that Her Majesty's Government have taken a number of steps since July 1982 to try to improve relations with Argentina. In answer to the second point that the noble Lord has raised, it is precisely because we wish to get into more normal relations with Argentina that we have been searching diligently over the past six months to find a way in which we could do so. It is therefore a matter of regret that the talks have now broken down.
Lord Ferrier: My Lords, in sympathising, as I think we all do, with the Government in the present situation, is my noble friend aware that there are a large number of people in this country—and I include myself—who would prefer not to hear the word "sovereignty" mentioned again until such time as the Caribbean. Central America and the Panama Canal are made secure to the free world?
Baroness Young: My Lords, I think I have made the Government's position on the question of sovereignty quite plain, and I note the other point which the noble Lord has made.
Lord Cledwyn of Penrhos: My Lords, while it is regrettable that it was not possible to discuss the crucial, practical matters to which the noble Baroness referred, including, I think, the cessation of hostilities and also the exclusion zone, nevertheless, is it not the case that sovereignty is an issue that will not go away? Will the noble Baroness deal with my suggestion about a reference to a third party, such as the International Court of Justice at The Hague, as one possibility that should be considered over a period of time?
Baroness Young: My Lords, we are confident of our position on sovereignty, and we do not consider it necessary to refer this matter to the International Court of Justice.
Lord Cledwyn of Penrhos: My Lords, with respect to the noble Baroness, and I do not dispute what she said. the more confident we are, the more ready we should be to go to the International Court of Justice.
Baroness Young: My Lords, I note what the noble Lord has said. but I believe that the whole House will recognise what our position on sovereignty is, and will recognise that, although before 1982 we were in fact negotiating on this point, the truth of the matter is that the Argentine Government have to live with the effects of the invasion and the consequences of it.
Lord Boyd-Carpenter: My Lords. arising out of the last answer of my noble friend, is she aware that the Argentine Government's direct and clear repudiation of a recently made agreement cannot fail to be noted by those from whom Argentina is trying now to borrow money?
Baroness Young: Yes, my Lords, I take the point of my noble friend.
Lord Boston of Faversham: My Lords, have the Government made any estimate of whether the security needs of the area have changed at all as a result of the breakdown of the talks? Are we as capable of fulfilling our commitments to the Falklands and in that area now as we were before the talks took place?
Baroness Young: My Lords, the answer to the first part of the question of the noble Lord is that it really is too early to say; but the answer to the second point is that we believe that we are capable of fulfilling our obligations to the Falkland Islanders.
Lord Morris: My Lords, may I ask my noble friend where are those who presume to think that the people of the Falkland Islands and indeed the people of this country are so stupid that they do not recognise sovereignty under a different name? Furthermore, if the Argentines cannot he trusted to stick to an agreed agenda, what hope is there for trust in the Argentine Government generally?
Baroness Young: My Lords, we greatly regret the fact that the talks have broken down. We greatly regret the implications of this as indicated by my noble friend.

Dairy Produce Quotas Regulations 1984
12.5 p.m.
Lord Belstead: My Lords, I beg to move that the Dairy Produce Quotas Regulations 1984 be approved, and to speak at the same time to the Dairy Produce Quotas (Definition of Base Year Revision Claims) Regulations 1984.
The House will recall the very valuable debate on the Common Agricultural Policy which the noble Lord, Lord Plowden, introduced some four months ago. It was very striking that on that occasion virtually every noble Lord who spoke placed the greatest possible emphasis on the need for urgent action to tackle the Community's surpluses. Undeniably, drastic action over the milk surplus has been taken. The regulations before your Lordship's House today are evidence of the radical nature of the decisions taken in Brussels on 30th and 31st March, only a few days after the debate on the report of Sub-Committee D in your Lordships' House.
Before I offer a brief description of the arrangements for the milk quota system in these two statutory instruments, your Lordships may wish for a brief word about the background against which the supplementary levy has been introduced. For a number of years there has been a steady growth in the milk surplus in Europe. Efforts have been made to find outlets both within the Community—for example, by the use of skimmed milk for livestock feeds—and on the world market, by the use of export refunds and by offering milk products as food aid. However, these measures have not matched the increases in production and they have involved massive expenditure.
Last year, we reached the point at which expenditure on the milk regime was about £3 billion, or one-third of all expenditure on the CAP, and the Community budget, as this House knows so well, could no longer absorb these growing costs. Although a guarantee threshold and a co-responsibility levy were introduced in 1982, it had become clear that if the same kind of regime were to continue, a cut of as much as 12 per cent. in the 1984–85 milk price—this year's milk price—would be needed to offset the additional expenditure arising just from the 1983 milk surplus. Some member states favoured the option of a much increased and graduated co-responsibility levy, but we opposed the idea strongly as it would have been a disastrous option for the United Kingdom, entailing a particularly high rate of levy on larger enterprises and a disproportionately high United Kingdom share in
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the burden of the levy because of the levels at which thresholds would have had to be set.
This left only two options: a quota system, or drastic price cuts. We urged the Commission and other member states most strongly last autumn to go down the road of price cuts as this would have avoided the complex and difficult arrangements needed to operate a quota system. However, by December it had become clear that the scale of price cuts needed to curtail production quickly enough to make the necessary savings would not gain the acceptance of other member states. We therefore had to work vigorously to ensure that the quota system being introduced would operate in such a way as to meet essential practical requirements.
We have been able to achieve two major improvements to the Commission's proposals. The first is that supplementary levy should be paid on direct sales as well as on wholesale deliveries. To have exempted direct sales would have led to a flood of producers taking advantage of the gap and selling directly on to an increasingly unstable market, and thus jeopardising existing business and undermining the levy system itself. The second change we achieved is the provision in the regulations to ensure that quotas can take account of the special circumstances of individual producers.
A quota is calculated for each holding on which milk production was taking place on 2nd April 1984. For wholesale producers, this will generally be their deliveries in our chosen base year (1983) less 9 per cent. Because of the way in which the Community legislation is drafted, direct sellers have a different base year of 1981 deliveries plus 1 per cent.
Because the Community had to introduce the system immediately, special rules are needed for producers who are not in production throughout their base year. These rules really are of some complication and they are to be found on pages 27 and 46 of the regulations. Later on, if your Lordships wish me to try to go into them further, I will certainly do so. All I would say now is that so far as producers who are not in production throughout the whole of their base year are concerned, I do feel that the rules which are on those two pages have achieved as fair a basis as possible on which to calculate their quotas.
The main complexity of the quota system comes in handling the special cases of producers who have, for example, suffered from exceptional events in their base year of production or who were engaged in expanding production before the quota system was introduced at all. As your Lordships know, the Community legislation provides for six exceptional events to be taken into account, including natural disasters, the illness of the producer or disease among his cattle, and therefore for such producers to have their quota calculated from a different base year.
In addition, producers who before 1st March 1984 had entered into a development plan under the Community structures directives, or who have otherwise committed themselves to making capital investments aimed at increasing their production, are able to obtain extra quota at the member state's discretion. It is clearly important that this "special case" treatment should be given only to producers

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who have been seriously affected in their base year by one of the six exceptional events, or who have committed themselves to a significant increase in their productive capacity.
In order to decide which special cases deserve extra quota and to ensure that justice is seen to be done to the individual producer, the draft regulations provide for the setting up of three Dairy Produce Quota Tribunals—for England and Wales, for Scotland and for Northern Ireland—and, except for Scotland, where the tribunal will sit as a number of panels to hear special case claims, in England and Wales these claims will initially be sent to divisional offices to establish whether they are, prima facie, eligible. If so, the claims will be forwarded for decision to the local panel, which will also consider appeals against rejection in the initial sift by the agricultural divisional offices. If a producer disagrees with a local panel's decision, he will be able to appeal finally to the tribunal.
If your Lordships approve these regulations, my right honourable friends will be appointing the noble Lord, Lord Grantchester, who has indicated that he will be willing to act as chairman of the tribunal for England and Wales. Indeed, in that event we shall be most grateful to the noble Lord, who has very distinguished experience of tribunal work.
We have also taken account of the argument that producers covered by the special case provisions are not the only ones who deserve some extra quota. We are well aware that small specialist dairy farmers on a restricted acreage could be particulary hard hit by the quota system, as they generally lack the possibilities open to larger dairy farmers to alter their method of milk production or to adopt an alternative farming enterprise. So my right honourable friend, together with his right honourable friends, has established the outgoers' scheme to buy up 2¼ per cent. of the total quota for Great Britain: that is, almost as much as the initial reserve for special cases. This will mean payments of about £650 per cow for those who now wish to quit dairying altogether. Of this, we intend to use about 1¼ per cent. to help small producers—that is to say, those who produce less than about 200,000 litres annually or, broadly speaking, those with fewer than 40 cows—by restoring their quota to their 1983 level of production. We also expect to have enough to give some more immediate help to producers who have suffered special hardship but who are not covered by any of the exceptional events set out in the Community legislation.
The draft regulations provide for a limited amount of quota to be allocated to help producers who had entered into transactions or made arrangements before 2nd April 1984 which would result in their now being unable to obtain as much quota as they need to sustain their businesses. I say quite openly to your Lordships that this extra element in the special cases was added after my right honourable friend had listened to the debate in another place some 10 days ago.
Although most of the quota surrendered by outgoers will not be available until later in the year, some will become available sooner and we propose to use this to deal first with these exceptional hardship cases which I have just described. It would be premature at this stage to decide which other categories of producer
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might benefit from the quota given up by outgoers. This is something we shall be considering very carefully in the coming months. I would add that the outgoers' scheme arrangements for Northern Ireland will be rather different, and of course my noble friend Lord Lyell has the responsibility within the Northern Ireland Office and in your Lordships' House for these matters.
Because of the larger proportion of small farmers in Northern Ireland, many of whom farm land on which alternatives to dairying are limited, and because of the more rapid rate at which production there had been expanding, the outgoers' scheme will aim at buying out 5 per cent. rather than 2¼ per cent. of quota, which may then be used in rather different ways than in the rest of the United Kingdom.
I have heard a number of comments before today's debate on the inflexibility of the quota system. We are, of course, severely limited in what we can do because of the way in which the Community legislation is framed. However, our regulations do include two provisions which will go some way towards making for a more flexible system. First, we recognise the problems facing the producer who supplies some of his milk to the Milk Marketing Board and sells the rest direct to consumers, and whose pattern of sales tends to change over time. We have therefore allowed for exchanges of quota between direct sales and wholesale deliveries by means of swaps between producers: so that if one has more wholesale quota than he needs he can exchange it for the direct sales quota of another producer who is in the opposite position. All these exchanges, of course, will have to be properly recorded with the Milk Marketing Board.
Secondly, we have tackled the problem of the producer who moves to a new farm and wishes to take his quota with him. What we have been able to do in the regulations is to allow such a producer to agree with the Milk Marketing Board, provided that all parties with an interest in his original holding agree, that the quota should go to his new holding.
If I may, I should like to conclude by emphasising that it was only with reluctance that the Government accepted quotas as the only effective means of Community action to deal with the ever-growing milk surplus. But I believe that for dairy farmers these draft regulations provide the most equitable solution that can be achieved in a difficult situation within the very real constraints of the Community legislation, and that we have done a great deal to ensure that the application of quotas is fair both to the majority of producers as a whole and to individuals. I therefore commend the draft regulations to your Lordships' House, and I beg to move.
Moved, That the draft regulations laid before the House on llth July be approved—(Lord Belstead.)
12.20 p.m.
Lord John-Mackie: My Lords, the noble Lord, Lord Belstead, has put these instruments before us and has done a tremendous lot to explain them to us. We are very grateful to him for that, because they are by no means simple in any shape or form and, as he knows, they have been altered quite often over the past couple of months. I am not sure that we yet have the final

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version. We had another one only this morning—the Milk (Supplementary Levy) Outgoers' Scheme, which the noble Lord mentioned. I have only managed to look at it, but it is not as clear as it might be.
The NFU were very pleased when the instrument came out last week, and they said that the regulations will resolve some of the difficulties which farmers have, but there are still a number of vital issues to be settled. The Minister has gone into quite a few of them, and I do not want to duplicate what he has said. I think we all agree with him, with the Government and with the Commission that we could not go on with the enormous surpluses of milk products that have built up over the years. The noble Lord mentioned some of the details, which I shall not go into, but the projected figure for this year is between 106 million and 108 million tonnes of milk. We all know that consumption is only 86 million tonnes, which gives us a 20 million tonnes surplus of milk this year. Over the years, stocks of over 1 million tonnes of butter and something like 1,200,000 tonnes of milk powder, etc., have built up, and, in spite of the efforts to get rid of some of these, the figures are still very high indeed.
There is no question that something had to be done, and we farmers (dare I declare my interest, though I am not a milk producer?) were well warned. I do not think anybody can complain about that. I think it is six years since the then president of the Commission, Roy Jenkins, opened the Royal Show and gave a very stern warning to farmers of what the situation was. He said that sooner rather than later, something would have to be done. I asked him what he meant by "sooner", and he said. "So far as I can see, it will have to be done next year". Other presidents have given the same warning since.
As the noble Lord, Lord Belstead, said, we in Sub-Committee D have consistently given warnings, and I have the latest three of them here. As he said, the noble Lord, Lord Plowden, reiterated the warnings in this House a few months ago, so I do not need to repeat them. I should just like to quote what we said on supply controls:
"Urgent action is required to reduce the mounting surpluses of key commodities and to contain the resulting expenditure".
We said virtually the same thing on the last two price reviews; so I do not think we can complain that we were not warned, and we cannot criticise the Commission and the Government for taking what the noble Lord called drastic action.
Like the noble Lord, I am not in favour of quotas and levies, but that was the way chosen and we must go along with it. But what we can criticise is the method, the timing, etc. If the system of quotas and levies works on the basis of a 9 per cent. cut, that will still leave 13 million tonnes of milk to be dealt with for the next five years if production remains roughly the same. During those next five years, the surpluses that we are so worried about will be added to. Surely, it would have been much better to tackle the whole lot over nine or 10 years, starting at, perhaps, 2 or 3 per cent., and not 9 per cent., which is a very high figure indeed, and upping it by 2 million tonnes a year. The great advantage of that is that we would not have had the shock tactics of the major cut that has taken place and which has so upset—I emphasise the word "upset"—the dairy farming community.
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My other criticism is that the Government did not think the scheme through. I believe the noble Lord said that they decided that they had to accept a quota scheme in December. That was seven months ago, and four months before the scheme came into operation in April. Therefore, they had time to think the scheme through better than they in fact have. There is no question that there are a lot of schemes that this Government have not thought through, and which have led them into difficulties, but this is not the time or the place to discuss those. Considering that the problem of the surpluses will not be solved overnight, it would have been better if the Minister had taken a month or two to get the scheme right, rather than, as I said to him the other day, have dairy farmers waking up on 2nd April and finding that nearly 10 per cent. of their milk would not be paid for.
Over the following three months the Minister, both in another place and in public places, catalogued events. On 3rd July in another place he started by saying:
"I wrote to all registered producers on 10th April explaining the arrangements… On 25th May I announced that I intended to make quotas available as quickly as practicable… On 12th June a letter was sent to all registered milk producers in England and Wales giving guidance on the types of special case which can be considered under the rules of the scheme… On 19th June a notice was issued to milk producers who sell direct to the public". [Official Report, Commons; cols. 162–3.]
Then he said that the draft regulations were laid before the House on 27th June. In the middle of all this, he announced £50 million of help to hard cases. Then two days ago we had the regulation on going out of milk.
So it is no wonder that farmers were confused, and time should have been taken to get it together so as to satisfy them a little more than they have been. The Minister admitted later in his speech that there was a great deal to do, and he can say that again. A great deal of work is ahead of us, and farmers would like to be satisfied about the position.
All this has confused and angered farmers. I have never had so many letters from farmers. I had one this morning from a Somerset farmer's wife, who is very bitter about the whole situation. Also of course we have been lobbied by all the various bodies, and the agricultural press has been full of what has been happening, with stories about frustrated farmers pouring milk down the road, and so on. Because of this uncertainty many farmers sold their cows too quickly. Now that they see more clearly what is going to happen they regret it. It would have been much better it they had waited. I blame the Minister for not putting it all in one block for the farmers. They would very much have appreciated it.
There are great worries about hardship cases. The Minister said what is going to be done about them. The fact is that 40 per cent. of the dairy milk producers are below the 40 cow figure and produce about 13 per cent. of the milk. I do not know whether there will be sufficient cash from the sale of quotas to cover the enormous number of producers. I hope that there is and that the hopes of these farmers will not be dashed because there is insufficient money. Hardship cases will be settled by local panels. Farmers will be able to appeal to a tribunal. I believe that not hundreds but thousands of cases will be brought before the panels.

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Who will man these panels? The chairman of the tribunal has been appointed but what about the other members? How will they be appointed? I am sure that these questions are being asked.
The Minister mentioned direct sales. This is a very real problem. I do not know whether there is sufficient flexibility. The Minister also mentioned the transfer of quotas. There will be many difficulties, for tenant farmers in particular. I know of one farmer who is giving up his farm, but the landlord is unwilling to let him give it up because he wants to sell his cows and take a golden handshake. One can see the landlord's point of view. If he wants to sell the farm or re-let it, there will be no milk quota, although the farm is equipped for producing milk. Who is right? Is it right that that tenant should be able to sell his cows, or is it right that the farmer should be able to sell or let the farm to a neighbour?
There is also the question of whether these levies and quotas will be applied as rigidly elsewhere as it is obvious that they are going to be applied here. How will they be monitored? For some reason, we do not trust the French. A friend of mine has French cousins who are completely immoral about it: if they can "do" the Government, it is considered to be perfectly legitimate. Farmers will need to be satisfied about this.
The Welsh small farmers consider that they are in practically the same position as the Irish small farmers. They do not believe that they are receiving the same treatment as the Irish small farmers. It is no wonder that the Welsh small farmers have formed an organisation to fight this as hard as they can. Something should be done for them.
I could speak at length about the various difficulties and doubts which confront farmers today, but I am sure that many other noble Lords who are to speak will have cases to mention. I understand that the noble Lord, Lord Monk Bretton, has a very interesting case to put to your Lordships. We look forward to hearing what the noble Lord has to say.
My noble friend Lord Blease, who unfortunately had to leave the Chamber in order to catch a plane, asked me to put the case for Northern Ireland. He says that farmers in Northern Ireland believe that Northern Ireland is being badly treated. The Minister referred to what is happening in Northern Ireland and gave the reasons for it. However, I am not sure that his explanation will satisfy Northern Ireland farmers. I should like the Minister to take note of what they have said. They have written to the Minister on the subject. According to my noble friend Lord Blease, the reason given for deducting the 57.7 million litres does not satisfy the Irish farmers. The increase to 63.1 million litres results in an increase of only about 6 million. Again I look forward to hearing whether the Minister is satisfied that that is a fair solution of the Irish problem.
Turning to the other Irish problem, I have in my hand cuttings from the Northern Ireland press. One matter which is worrying many people is milk smuggling. Eire farmers have urged the EEC to clamp down on milk smuggling. This subject was mentioned when Irish representatives came before Select Committee D. It was said in evidence that there are informal routes across the border. It was a rather
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euphemistic way of putting it! Something must be done about this problem. I see in today's copy of The Times that something is being done about it.
Turning to the large farmer who goes out of dairying, there is the very real problem of staff redundancies. One hears of £50 million being paid out to farmers. Will anything be paid out to dairymen? They are skilled men. Will they be given any help at all? Something should be done for them because there will be many redundancies on the large farms—not on the small farms, because they do not employ labour—which will be going out of milk production.
There is no doubt that the small farmer is in a quandary. As the noble Lord said, many farms are of no use except for producing milk. That is particularly true of farms in the less favoured areas. They cannot get out of milk production. The farmer is equipped only for milk production. I have made some calculations which I believe will interest your Lordships. The small farmer, with 35 cows producing 1,150 gallons per cow, will lose an income of £2,000 a year. That is a very high figure. I have the figures of sales of cows in February. The difference between the price of milking cows in February and the price of milking cows last week was £160. I did not take only one market for comparison but a whole range of markets in the farming press. This means that the dairy farmer's collateral to the bank has probably dropped between £5,000 and £6,000.
Furthermore, the price of culled cows has gone down by anything up to 6p a kilo. This makes a difference of between £20 and £30, depending on the market. All this adds up to very hard times for those farmers with 35 cows.
Apart from anything else, there has been an increase in the sale of fatted cows. Again I have looked at the market. The considerable increase during the past few months in the sale of culled cows has affected the fatstock market. I must declare an interest. I am selling fatted cattle, and during the past few months the price has gone down for a 500 kilo bullock by nearly £30. Therefore everybody is being affected. The only bright spot is the price for calves. The dairyman is getting a very high figure—over £100—for his calves. There is therefore some compensation. but how long it will last I do not know.
I should like to mention the Co-op. They have 5,000 cows, and are retailing an enormous quantity of milk over and above what they produce themselves. I have spoken to the Co-op farms manager and the dairy manager. They believe that they will be tied down to the quota because they are a corporate body and because their books are open to the public. They cannot see how the hundreds, if not thousands, of producer-retailers can be monitored in the same way. It is a very real problem.
I have said plenty to show that although we agree that something has to be done, we do not consider that the Government have handled this matter as well as they should have done. I have had details of two schemes sent to me. One was from a dairy farmer in Aberdeenshire, who devised it in co-operation with a dairy farmer in Yorkshire. Another scheme came from a dairy farmer in Suffolk. They both considered that their schemes would be better than this one and,

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frankly, I agree with them. I am sure that the Minister has received details of these schemes, but of course it is now too late. This shows how farmers are thinking and that they are unhappy with the present arrangement.
I shall close by saying that the Minister really must produce a plain farmer's guide to the whole scheme. The Minister said that justice would need to be seen to be done. If only the Government had made everything ready to put before the agricultural community, rather than present this scheme in a piecemeal fashion, as has been done, then justice would have been seen to have been done. Meantime, let us have a guide, and let justice be seen to be done.
12.41 p.m.
Lord Sainsbury: My Lords, I shall be brief. No one can have been taken by surprise by what has happened in the Community to supplies of milk and milk products. There have been countless warning signs that Community production would reach unmanageable proportions, and yet the Council of Ministers have refused to grasp the nettle, and they have chosen to ignore these clear warnings in past farm price fixings.
The Government can hardly claim to have followed a "prudent price policy" when, as recently as 1982, they agreed to milk prices being increased by 10.5 per cent., which was well over the United Kingdom inflation rate for that year of 8.6 per cent. As a result, we are in a situation in which production needs to be curtailed drastically and quickly.
This has meant, perhaps inevitably, the introduction of a quota system. In different circumstances we may have been able to adopt the, to my mind, infinitely more preferable solution of reducing target prices. Early action on prices would have avoided the complexities and costs of administering the quotas. As it is, quotas seem to be the only realistic means of curbing production immediately.
It is also to be deplored that farmers have had to accept a very major change in their circumstances in such a short time span. Foresight and courage combined would have enabled the Community to introduce a graduated policy to curb milk production over four or five years.
As I have said before in your Lordships' House, farmers must be given a more predictable environment in which to make their planning decisions. This also applies to all those ancillary industries whose businesses will be affected by milk producers' attempts to reduce output. The National Farmers' Union has stressed that the uncertainty surrounding milk production should be cleared up as soon as possible, so that farmers can make the necessary management and financial decisions.
It is hardly surprising that there are some very harsh feelings among dairy farmers when one considers that, until very recently, farmers were given grants to invest in dairy production and were being encouraged to do so. Under the draft regulations, farmers are entitled to claim for additional quota on the basis of capital investments, either made, or committed to be made, before 1st March 1984. This seems a poor substitute
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for a consistent Government policy, especially when, as the Minister stated in the Commons debate on 3rd July, only part of farmers' additional investment will be taken into account.
Some producers will certainly not be able to adapt to the quotas and survive. For example, those in many parts of the West of England and Wales have no alternative but to produce milk. It is to be welcomed that quotas released from the outgoers' scheme are to be transferred to a reserve pool to be redistributed to hardship cases. However, there is concern that this reserve is too small to meet the needs of the many small specialist dairy farmers. As to the outgoers' scheme, it is certainly not generous compared with, for example, the comparable scheme in Germany.
In conclusion, may I commend the amendments made to the draft regulations as a result of the Commons debate on 3rd July, especially regarding the interchangeability between direct sales and wholesale quotas. Lastly, may I press the Government to ensure that other member states implement. and strictly adhere to, the quotas.
12.48 p.m.
The Earl of Kinnoull: My Lords, the noble Lord, Lord John-Mackie, appealed to my noble friend to produce a plain farmer's guide. I only wish that such a guide was with us today because we are faced with a labyrinth of regulations on this new milk quota system, which must be, in my view, the most backward, old-fashioned legislative measure and the most complicated, not fully digested, set of regulations ever to have been inflicted upon the highly modern and efficient British farming industry.
The only two redeeming features on this rather gloomy Friday, as my noble friend has said, are, first, that this scheme was not the Government's first choice; and, secondly, that my noble friend moved this Motion in his usual skilful fashion. He presented these diabolical regulations with great aplomb, and I think that it takes the resourcefulness of a farmer to achieve that.
I do not think anybody has argued—at least, not in recent times—the seriousness of the decision that had to be taken on the over-supply of milk. As other noble Lords have said, it is an overwhelming case. But the criticism of the Community—I stress the Community rather than the Government—is that its reaction to this problem has been too slow. The noble Lord, Lord John-Mackie, said that we were being warned of it five years ago. It has now chosen the worst of all options to achieve a policing of the producers by a cumbersome bureaucratic machine with harsh inflexible rules. They will be harsh and they will be inflexible rules. It takes no great skill to forecast that these regulations will cause many wholly undeserved cases of hardship, financial anxiety and uncertainty to farmers. Worse still, there will be unavoidable cases of unfair treatment to the producer/retailers.
I feel completely hostile to these regulations; not so much as to their objectives but to the manner in which they have been presented to the dairy industry. I think it is an intolerable state of affairs that the dairy farmers were told summarily on 2nd April that agreement had been reached and, forthwith, their production had

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been slashed by 9 per cent. under the new quota system. That was four months ago and this system, which affects their livelihoods, is so clouded with uncertainty that no one, not even the Milk Marketing Board, can advise with any confidence about the effects of the regulations on their personal businesses.
The incompetence in planning by the Commission—and I am suprised that the noble Lord, Lord John-Mackie, never mentioned this—is a scandalous and appalling state of affairs. One learns that it took the Commission seven weeks to work out the basic ground rules of this scheme, even after the agreement was announced. It took a further four weeks to issue the final arrangements for direct sales because the Commission had got its sums wrong. To what was all this delay due? I cannot believe the Commission is understaffed. Certainly if one goes to Brussels one never gets that impression. I hope that my noble friend, along with other members of the Community and Ministers responsible for their industries, will insist on an inquiry into this incompetence and ineptitude. Indeed, they should publish the reasons for these long delays.
One of the disappointments that I feel today in discussing these regulations is that we can of course only in truth rubber-stamp these regulations. The House missed an opportunity to seek and support constructive amendments to the original draft regulations, which was achieved very effectively in another place last week. In fact, I think it is a great credit to my noble friend and his department that they reacted so swiftly to the comments that were made. I do not accuse the Opposition of not doing their job, but I think that when this House has such a multitude of experts in agriculture some provision should have been made to have a similar debate in this House, as in the other place, before these regulations have our approval.
When one tries to envisage which of this multitudinous pack of regulations in this 80-page document could have the most damaging effect on the industry, whether it be young farmers entering into milk production. tenant farmers who wish to leave the industry or the producer/retailer, it is, I think, the latter case which suffers far the most patently absurd arrangements. The producer/retailer will be allocated two quotas. He will be allocated a quota for production and a separate allocation for his retail trade. Both will have different periods. I ask my noble friend: why should there be different periods?
The Milk Marketing Board breathed reality into the plight of the producer/retailer when it forecast that the system will lead to many individuals being allocated direct sales that they do not want or need, yet fail to give sufficient wholesale quotas, and vice versa. I doubt whether the Government's well-intentioned amendment in new Regulation 8 will give much practical flexibility or relief to the difficulties faced by the producer/retailers. It seems a very punitively heavy-handed imposition to force a retailer to cut back on his hard-won competitive markets. It is patently unfair, and I hope that my noble friend, when he winds up this debate, will be able to say that he intends to keep this under review.
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The regulations deal with the transfer of quotas in Schedule II and I suspect that that part of the regulations will be a minefield of argument. As the quotas are to go with the land, we now understand, I doubt whether any landlord—as the noble Lord, Lord John-Mackie, has already said—will willingly give up his quota on tenanted farms. It is a plus value to that investment, but to the tenant it might be a minus value, with seven days a week, production falling and costs rising. I ask my noble friend what happens if the tenant, for good economic reasons, decides to alter his sytem of farming from dairy to, say, arable and the landlord says no? Perhaps even the tenancy agreement forbids it. Is that a ground for notice to quit? If the landlord agrees verbally with the tenant, but not in writing, is the farm to lose its quota?
I turn briefly to the plight of the small farmers under these regulations and my noble friends' outgoers' scheme. This, I am sure, is a most helpful, encouraging and sensible scheme to provide compensation for those who wish to retire and, at the same time, to be able to redistribute their share of their quotas to those who wish to remain. I anticipate that this scheme, as the noble Lord, Lord John-Mackie, suggested, will receive a very active reaction. With £650 as compensation for each cow—the noble Lord, Lord John-Mackie, is getting less than that at present, and I suspect he might be looking to that scheme —my noble friend will be swamped with applications for retirements. One wonders whether the £50 million allocation will prove sufficient. I certainly hope that it will.
Another aspect of this retirement scheme is the reallocation of the quotas to those remaining in the industry. I hope that my noble friend will be able to devise patently fair rules as to how these quotas are redistributed. I have a small-producer friend and neighbour on the Isle of Wight who has worked for 25 years without any full-time help or a single holiday. He has built up a herd of 45 to 50 Jersey dairy cows, all home bred. He has been hit very hard by the quota system; not only by the production loss, as have other farmers, but also by the slump in the value of his stock and young followers, on top of this year's shortage of grass. My question to my noble friend regarding this friend and neighbour is this: if my friend has 45 or 50 cows, does he come into this scheme which, as I understand it, may be limited to only 40 cows? How rigid is this scheme? That is an important point which I hope my noble friend can answer today.
There are many other questions with which I should like to plague my noble friend; but I confine myself to two more. First, who pays for the Milk Marketing Board's costs of operating the levy scheme—will it be Brussels, the Government, or the producers? What is the estimated cost of this work? Secondly, how formal will be the tribunal hearings? Will producers require legal aid? What sort of people will make up the tribunals and the panels? Again, what is the anticipated cost of running these quasi courts?
My final plea to my noble friend concerns the milkman. Milkmen are one of the few unsung heroes who give a service to our communities. They offer a vital service. They are inevitably cheerful, helpful people, who work very unsocial hours, and they are often very kind to the elderly. Along with postmen,

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they have a very special place in our society. Any threat to the future of the milkman, whether from importing long-life milk or from some repercussion from these awful regulations, will, I hope, be strongly resisted. I hope that my noble friend, who has an above average quota of the milk of human kindness, will assure us that he equally values the place of the milkman and the great service that he gives to society.
1 p.m.
Lord Stanley of Alderley: My Lords, despite the comforting words of my noble friend Lord Belstead, it is not possible for me to congratulate the Government on the way that they have handled the problem of milk surpluses. The action that they have taken—or, to he charitable, that they have been forced to take by the Commission—is a disaster for the dairy industry and has undermined the confidence of the whole industry in the Government and, in particular, in my right honourable friend the Minister. In imposing this quota, one could say retrospectively, the Government (or perhaps they would prefer me to say the Commission) have broken the golden farming rule, which is to give time to adjust—a point repeatedly made by your Lordships' Sub-Committee D, and also made this morning by the noble Lords, Lord John-Mackie and Lord Sainsbury.
However, it is no good crying over spilt milk—if that is an apt phrase—and I shall therefore support the Motion before your Lordships' House. But I have the following questions to ask my noble friend. The outgoers' scheme, although generally acceptable, is totally unacceptable to tenants in England and Wales —perhaps less unacceptable to tenants in Scotland. Although the contract will be between the Minister and the producer, the terms of the contract state that the tenant must have his landlord's consent. I fully accept the interest that the landlord has over what happens on his farm, but this consent effectively means a veto on the tenant applying for the outgoers' scheme, for what responsible landlord would allow his farm to lose its quota?
Wearing another hat, as a trustee, I should consider that I was in breach of trust if I allowed a tenant to apply for the outgoers' scheme. I note with interest that the contract is different in Scotland, where I believe that the consent of the landlord is determined by the tenancy agreement. That is fairer, though not complete, but it gives my noble friend a place to start to make improvements. Tenants may very well need that outgoers' scheme more than owner-occupiers. There is a cash problem in our industry, and tenants have no collateral in the form of land. There is also, of course, the knock-on effect. If tenants do not release their quota, from where will the Minister get his spare quota to help special cases, particularly the small producer, who has rightly been mentioned by my noble friend Lord Belstead this morning?
My second question concerns ownership and transfer of quota as it applies to the tenant. That has been referred to briefly by my noble friend Lord Kinnoull and the noble Lord, Lord John-Mackie. I recognise, and welcome, the recent concession that quota belongs to the producer and may follow him from farm to farm, with, of course, the consent of the incomer. But, again, the Minister has given the
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landlord the right of veto; and, again, as a trustee, I say that I should be in breach of trust if I let the tenant take it with him. So again the tenant is ruled out. I implore my noble friend to look at that point very carefully.
Thirdly, I must ask my noble friend to look at the long-term effects of the quota, with a view to modifying them. There is the danger of locking quota onto particular farms ad infinitum with the creation of no new dairy farms, leading, I believe, to ossificaton of not only the dairy industry, but also the whole of agriculture. There is the danger of what is called the "sleeping" quota, which, although it could be temporarily released, could come alive again and cause chaos. Frankly, I do not know the answer to that third queston, but the idea of buying and selling quota should be examined. I hope that my noble friend will give an undertaking to discuss the long-term problems with the industry. I realise that my third question is a matter for negotiation with the Commission.
I shall say a few words, very quickly, about direct sales. It is a matter which has been touched on by my noble friend Lord Kinnoull, and I hope it will be expanded on by my noble friend Lord Monk Bretton. I fear that the concession does not go far enough, because quota cannot be exchanged between direct sales and board sales by the individual concerned. I believe that it will encourage direct sellers to break the law. How can a farmer say to a direct sales customer on his doorstep that he cannot have a bottle because that bottle, or portion of milk, is on his hoard quota and not on his direct sales quota? I implore my noble friend to look at that problem again. Of course I realise that we do not want fiddling (if I may use the word) by our European partners, but I am led to believe that, since they have examined that regulation, or part of the regulation, they have more sympathy with the British Government's view—which I believe it is—than they did originally.
I appreciate my noble friend's problem of giving due weight to the landlord's interest, but I think that on the first three points that I raised he has forgotten the tenant. Bearing in mind the extraordinarily good way that my noble friend handled the passage of the Agricultural Holdings Bill through your Lordships' House, I am sure that it is not beyond his powers to put those matters in perspective.
Finally, will the Government make sure that in future the industry is given more time to adjust to any cuts or new ideas controlling agriculture, and not just those applying to milk?
1.8 p.m.
Lord Graham of Edmonton: My Lords, perhaps I may begin, as have all other speakers, by thanking the Minister most sincerely for the care he has taken in preparing for the debate and for the lucid manner in which he has explained a matter which, frankly, as one who is not as attached to the farming industry as are many other noble Lords, I found baffling when I read through the regulations. Judging from my contacts, I believe that the Minister has fairly described what he has presented to us as drastic action of a radical nature.
The Minister took time to explain the background, which all of us fully understood. There is no dubiety about the need for action. I thought that it was particularly fair of him to point out the Government's

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dilemma in recent times in having the very difficult choice as to how to put forward a solution to the problem of milk surpluses—either a drastic reduction in the prices that farmers get for their milk, or a quota of this kind. I was glad to hear the Minister speak more than once about built-in flexibility, though I am bound to say that other noble Lords made the point that perhaps there was not so much flexibility.
The Minister concluded by saying that, regrettably, if there is a villain of the piece, it is the constraints of Community legislation. In other words, the Government may very well not have moved along those lines, but we are members of the Community, this is Community legislation, and we have to do this.
I was very pleased indeed to listen to my noble friend Lord John-Mackie who from his experience, which we all respect, and from the contacts that he has received, spoke of the bitterness of farmers. I was very impressed by the references that have been made by others. My noble friend Lord John-Mackie also told us about the farmers not being very happy. He gave us some illustrations of farmers who are suffering a great deal.
I want to declare a multiple co-operative interest in these matters. The co-operative interest in this situation straddles many aspects. The Co-operative Wholesale Society is the largest farmer in Britain. It ultimately farms on behalf of 10 million consumers. Those consumers are organised in businesses which take almost £5 billion across their counters. Of direct interest in this short debate is the fact that co-operative milkmen deliver more than 25 per cent. of the milk that is consumed in Britain. I have the privilege of being a director of the Enfield and St. Albans Cooperative Society. Co-operative societies employ more than 100,000 people. I ask the Minister to listen very carefully to the views of the Union of Shop, Distributive and Allied Workers, with whom I declare an association.
I cannot help questioning whether Britain has got a good deal from these quota arrangements. Quite frankly, I believe that they are a bad deal for Britain. I speak after having consulted the Dairy Trade Federation on this particular point. It is clear that these quota arrangements will put the availability of milk in jeopardy and are certain to affect the price of milk delivered to the doorstep. Bluntly, this is a bad deal for the British farmer, the British milkman and the British consumer.
In Britain for more than 40 years we have had a unique doorstep delivery. I was most grateful and appreciative of the kind words of the noble Earl, Lord Kinnoull, in respect of the value of the consistent service to the nation and the consumer which is given by milkmen employed by many distributors. With our doorstep delivery system the price of milk has been lower in this country than in most competitive Western countries. The consumer, the producer and the milk industry have all had a good deal from previous arrangements. They have not any more.
As has been so clearly demonstrated Britain's milk producers have never shirked a challenge but these orders will severely strain some producers' ability to survive. To be fair to the Minister, the base year order and provisions in the principal order ameliorate the
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worst effect of some of the provisions. However, it is still a poor deal. I hope the Minister will understand the strong feeling in many quarters on the issue of levy payments. I think he will have the support of the whole House for stating that he would find it wholly unjustifiable to enforce and collect a levy in this country while other countries took no action at all. It is a prime imperative of the milk industry to preserve investment and to protect jobs. I think we ought to be deeply concerned at the effect on jobs as a consequence of this quota. It is clear that as a result of a cut in production more British workers will be thrown on the dole.
Let me give your Lordships an illustration. At the Milk Marketing Board Dairy Crest butter and powdered milk creameries more than 400 redundancies have been declared. Additionally 40 drivers' jobs have gone. Those workers and their representatives will fight for their jobs. Mr. Garfield Davies, the Union of Shop, Distributive and Allied Workers' national officer has said:
"If there is less milk to move, any cuts needed only affect contract drivers, not Milk Marketing Board staff. When the British Government agreed to the EEC quota system it knew that the 10 per cent. cut in production would be a stab in the back for dairy farmers, farm workers and milk workers. Well"—
said Mr. Garfield Davies—
"our members are determined to preserve their jobs now and in the future".
This is not a matter which affects just farmers. I fear that there will be detrimental spin-offs, potentially damaging to workers and consumers.
I was pleased to hear the words of the noble Lord, Lord Sainsbury, who, from his wide experience in the retailing and distributing field, quite rightly pointed out some of the spin-offs which would affect not merely farmers but the distributive and retailing chain as well. Milk is not the only sphere in which Ministers have urged a course of action in one direction, only to leave trusting individuals to pick up the pieces. Earlier this week I had to remind the Minister for local government that the Prime Minister had urged councils to spend up to the hilt on capital projects in 1982, only to be told to stop it this very week.
Does the Minister recall that not many years ago Mr. Peter Walker, the then Minister for Agriculture, was urging the milk industry to produce more and more milk? Does the Minister fully understand what such exhortations led to? Would he have expected an increase in investment, plant and machinery at productive and processing levels? Of course he would, because the Minister was urging that course. The noble Lord, Lord Sainsbury, quite rightly alluded to that dilemma.
Let me give the House an illustration. The CWS has built a cheese producing factory at Llandirnog in Wales. It produces only cheese. It employs 220 people. There was an investment in excess of £5 million. That investment and those jobs are now at risk. That factory is required to work to capacity. Anything less is not only wasteful but inviable.
How does the Minister answer claims of being led up the wrong garden path by his ministerial colleagues? Will the Minister say more about his use of spare quota arising from special cases and from the Outgoers' Scheme? The Minister must be aware of the

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regional imbalance in connection with processing capacity. May we be assured that such reallocation of spare capacity will not be exercised with a regional bias, for instance favouring eastern areas over western? I hope that an even-handed approach will be exercised by the Minister.
In regard to milk and milk products for export, can the Minister be more helpful to the House and to the milk industry to say more on this crucial aspect of the orders? The overall national interest is involved here. We must have greater clarity from the Minister. The new quota arrangements, taken with the recent prohibition on export prices for milk sold by the Milk Marketing Board, have put this particular aspect of the trade at risk. What plans has the Minister to solve this particular problem? What is there in these regulations to inspire confidence among milk producers and processors to go for export? What special steps has he in mind to encourage export sales? I want to ask the Minister directly to widen his remit born out of this impost on the milk industry. I want to ask him to consider the changing and changed circumstances in the relationship between the Milk Marketing Board and the industry, which I believe has become much too uneven of late.
In conclusion, having raised what I consider are serious points affecting our producers, processors and consumers, and accepting that the Government and the country have to get on with it, I want to ask the Minister what consideration is being given by the Government to the consequences of these orders on the milk industry? Let me spell it out. Workers will be made redundant. Earlier I referred to the Milk Marketing Board workers. What special redundancy conditions, terms and arrangements have the Government in mind to help workers and companies grapple with these aspects of the quota—less milk; less capacity; fewer lorries and fewer workers? What are the Government going to do about easing this particular burden?
What plans do the Government have to help the industry on the liquid milk side, which will be left with spare capacity, which means unviable plant, as a direct result of Government action by means of these orders? Surely there is a very strong case for the establishment by the Government of a special compensation fund to meet these special problems. If the Minister could say something helpful and constructive on this matter, it would go some way towards creating a happier atmosphere than exists at the moment in the milk industry.
1.20 p.m.
Lord Wise: My Lords, we must all recognise that there is over-production of milk within the Community and that some form of limitation is necessary. It has been decided, I think regrettably, that this quota system is the way in which it has to be done, but it is inevitable that quotas will cause unemployment, not only in the industry but, as the noble Lord, Lord Graham, has said, in all other ancillary industries as well. The effect could be calamitous to small family farms in areas where milk production is the only possible means of livelihood.
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Interim cash payments must be made to small producers in order to keep them in business until their quotas can be made up. It is inevitable that considerable time must elapse before hardship cases can be assessed adequately.
One hears of so many cases of farmers who in the past have been encouraged to produce more, have invested heavily in stock and equipment and are now obviously greatly indebted to the banks. They have planned their projected cash flow on X number of cows producing a given quantity of milk, and, as such, their businesses were viable. Then, almost overnight, their quota became X minus Y number of cows producing a smaller quantity of milk, and obviously their businesses are no long viable, through no fault of their own. There is only one answer, unless they receive help.
I want to follow my noble friend Lord Stanley in speaking about the problems confronting tenant farmers and the question of the ownership of the quotas. I do not think that if a tenant gives up his quota and possibly takes the golden handshake. the landlord should necessarily be compensated. Obviously land with a quota will be worth more, but without the quota it will not be worth less than probably it is at the moment. It has the quota only by virtue of the decision of the tenant to produce milk on the holding during 1983. It seems unreasonable for the landlord to benefit from a management decision of the tenant.
For instance, what is the position on a large estate where perhaps some tenants have ceased producing milk? Are they going to he penalised for giving up milk and thereby now depriving the landlord of the quota? How can they be? They were able to sell their cows at their full value, whereas the poor unfortunate tenant who is still milking has seen the value of his stock, which he has to sell, decreased by maybe 30 per cent. Obviously the only interest the landlord has in the quota is if he has provided or improved buildings for dairying, without increasing the rent accordingly. Taking the golden handshake is the only way that tenants who wish to give up dairying can reinstate their financial position. I should like to see tenants being given priority, because owner-occupiers have at least the cushioning effect of the capital value of their land and assets.
Again following my noble friend Lord Stanley, I want to say that I understand the Ministry is against saleable quotas. I should like to see consideration given to the question of buying and selling. It is a difficult question, but, then, these regulations are pretty complex. There could well be tenants who would wish to retire but now are unable to do so because, almost overnight, their capital has been devalued by, again, up to 30 per cent. If they were able to sell their quotas, it might enable them so to do. Again, if the landlord has a claim on the value, surely it could be valued according to his capital input.
There are many things that could be said about these regulations, but a lot has been said already. I hope that we will approve them in order to clear up all the misunderstandings and in order to make the system work as fairly as possible for everyone concerned.
1.27 p.m.
Lord Monk Bretton: My Lords, I should like to congratulate my noble friend the Minister on his comprehensive introduction to the regulations; it helped to clarify matters. From the briefs I have seen, I gather that most of the questions that remain unanswered are not those that are dealt with by the regulations, but those yet to be dealt with. I regard this as a good sign—a sign that what the Government have done is to make a slow and perhaps somewhat piecemeal approach, rather than a hasty effort to be comprehensive, which might have got things wrong. I believe it is absolutely right to have proceeded in this way, given, all the time, that we had to acquiesce in accepting the quota system.
I believe, therefore, that it is right to pass these regulations. while asking the Minister to keep an open mind on both what has been done and what is yet to be done. After all, we cannot amend the regulations. They are, indeed, complicated—so complicated that it is a difficult matter declaring an interest. I shall do the best I can by saying that I am a partner in a mixed farming enterprise producing wholesale milk, with several landlords, including myself. I happen to own the bulk of the dairy buildings, but not so much of the dairying land. So for several reasons I have an interest in knowing whether a tenant can move his dairying around, to the detriment of one owner and the advantage of another—the problems to which my noble friend Lord Wise has been referring.
I fear that, in the end, someone may get an unlettable farm out of this, and that will lead to further problems. I refer particularly to those areas where land is not adaptable to other enterprises. In that connection, typically, I am thinking of our problems in the Sussex Weald, where I live. There is something which the regulations do not take directly into account, and I do not know what will happen about it; that is, the desirability of keeping dairying in areas where the land is less adaptable to other enterprises.
I gather that the question of whether or not producers should he able to lease out unused quota to other producers is still under consideration. This is something which might well have landlord and tenant support and which would at any rate be a palliative to some of the problems to which my noble friend Lord Wise referred.
I should like to talk particularly about special cases. I am very concerned about what is going to happen to those dairymen, usually pedigree dairymen very much in the van of dairy cattle breeding, who biennially, or perhaps triennially, have a draught sale or who sometimes have a "production sale", which means that they are going to sell a considerable portion of their milking stock. There are probably about 100 of these men who will have done that in 1982 with fairly calamitous effects upon the quota that they have been given. I am wondering how they will fare. It is most important that their position should be assured, because we must remember that they are not necessarily very large farmers, but that they are most important to our cattle export trade—in fact they are the leaders in this field, and they very often proceed by having draught sales biennially or triennially. They may be in a difficulty and I do not think that the
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National Farmers' Union is at all convinced that their position is satisfactory under the regulations.
I hope also that the Minister will bear in mind so far as hardship cases are concerned, that the NFU asked that where there was a drop of around 10 per cent. because of hardship. it should be taken into consideration. I think that my noble friend said that 15 per cent. is what is proposed. I hope that my noble friend has stretched as far as possible what we are allowed to do by Brussels as regards that particular matter.
I have promised—indeed, I have already been in receipt of a trailer on it—to say something about direct sales. I agree that the Minister has tried to help over this matter. But I know that the NFU is still anxious that the Government should continue to press Brussels about our particular problems here in the United Kingdom. If we have a producer who is selling 30 per cent. of his milk direct and 70 per cent. wholesale to the board, he will receive two quotas. His direct quota will be cut by 6 per cent. and the other one will be cut by 9 per cent. So he starts off 6 per cent. short for his direct customers, anyway.
Let us suppose that this particular producer can see a very good chance of opening further direct sale outlets. What may he do? May he ask the board whether he may reduce his wholesale deliveries and increase his direct sales? The answer is, no—and this is what has been decreed by Brussels. One does, indeed, wonder whether he will necessarily find it very easy to be entirely honest about this. I can just imagine a customer saying, "Look, don't let me down this morning".
As I understand it, what he can do is ask a direct selling neighbour if he has some unused direct sale quota to spare. He can do that, but there is likely to he the problem that that particular neighbour is also 6 per cent. short in satisfying his customers, and he will find that he does not have milk available. In fact, it will not work quite like that, because what will happen is that there will be a direct sale quota pool and that pool will receive the quota of those who are giving up. It is hoped that it will then be available to those who wish to expand direct sales. It seems to me that it is likely to be an inadequate source of supply, certainly at the outset, and it may well be so thereafter.
I gather that the Commission is terrified that if we can do a direct swap between our wholesale and direct sale qutoas, there will be a fiddle. I am afraid that the result will he the usual one that we get from Brussels. It will be a most negative result for improving opportunities to increase the sale of the product. It has happened so often, and it is a very great pity. I believe that in the United Kingdom the chance of abuse is so much less. We have always had rigid rules and rigid policing of those who attempt to sell milk off contract. Because of that I believe—and, I wish that Brussels could be convinced—that the board really does have control. It may not be so in other countries, but it is in this one. If we could get Brussels to move on this matter, there would be less danger of abuse than there would be if we continue with the position as at present proposed.
I should like rapidly to conclude with a word of advice to the politicians about dairy farmers and also

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a word of comment about the future. I am sure that the one thing that we should not say to dairy farmers is that they have only themselves to blame for what has happened. Nothing is more enraging to them. They have known for a long time that quotas were on the cards. They have known that our milk production has not increased as rapidly as it has in the rest of the Community. They have known that if quotas came, then cutting hack beforehand on their own farm would simply be financial suicide from their point of view. They feel very hard done by indeed, and they are worried about the future.
So far the EEC has only halved its surplus. What next? Are there to be further cuts? Can dairy farmers look to our Government to defend their interests more successfully in the next round? The feeling among dairy farmers is that the large cut that we have now indicates that the next time round it should be the turn of others. But, above all, as has been said by other speakers, they need to know in time. Brussels, and everyone, needs reminding that the gestation period of a cow is nine months and that orderly planning of this business revolves around that fact, if waste is to be avoided. It hits hard financially to have to sell off plain cows heavy in calf and it is also an unpleasant trade. Can we, therefore, yet be enlightened any further? If not, how soon may we be enlightened?
1.40 p.m.
Lord Mackie of Benshie: My Lords, I must confess that, in ploughing through the 80 pages of the regulations. occasionally I fell asleep. I cannot claim to have a precise knowledge of every word, and I am indeed sorry for the Minister, who has obviously studied long into the night—and his pale looks come from the studies that he has had to undertake. One always has a great wish to be nice to the noble Lord the Minister because, even if he is cutting your throat, he is always nice to you. I shall endeavour to curb my feelings of being too nice to him, but we have had a quite extraordinary succession of, I shall not say mistakes, but failures, to get a sensible policy into Europe generally or into the Council of Ministers.
However, I agree with the previous speaker that the Commission are also to blame. It was quite extraordinary that, after five years of trying to get the Council to be sensible, in 1982 they actually proposed a very large rise in prices. It was quite against their previous policy, which mainly came from their desire to play politics and to forestall the politicians. They should not do it. The Commission should seek to do what is practical and give good advice, instead of trying to play politics, which they do so often. They must take account of practical political measures, of course, and what they can get through, but in 1982 they went far too far and, without doubt, did a great deal of longterm harm to farmers.
Several noble Lords, including the noble Lord, Lord Monk Bretton, in particular, stressed the fact that if you can see a quota system coming there is a strong practical reason for the policy of producing as much as you can in order to get a bigger quota when the blow falls. It is rather like drinking too much in order that you may feel more virtuous when you stop, although in practice it may not do you a lot of good. I am never
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very sure about these matters. However, instead of having what the Milk Marketing Board, with a great deal of common sense, wanted and what some of my younger relations wanted—that is, a pricing policy which, though hard, would at least be sensible and would at least enable the Milk Marketing Board and the other industrial concerns, which the noble Lord, Lord Graham, mentioned, to have enough milk in order to prosecute their affairs—we are landed with a quota system.
At this point, I should like to ask the Minister whether the allocated quota to the country as a whole will be enough to satisfy the aspirations of our export industry and the Milk Marketing Board, how much investment will be redundant and how many machines will be disposed of. In other words, what will be the decline in the industry because of the quota which we have had to accept? Bearing in mind the fact that we are the only country, apart from Italy, which is not yet self-sufficient in all milk products, I do not think that the quota which we have been allocated is perhaps as good as it should be.
Given all that, and given the criticisms which I think are just about the way in which the Government have gone about this, we are now into a system of quotas, with all the 80 pages of regulations necessary to amplify the other pages of regulations which the Commission is issuing, and I suppose that we have to make the best of it. I hope that this will not last for ever, because without doubt it will do harm to the industry, and other speakers have mentioned this. It will freeze the ability of farmers to shift; it will spoil relatonships between landlord and tenant. I hope that in the long-term we shall try to get out of this quota system and return to a system based on the sensible regulation of price in order to allow farmers to plan ahead, which is what we need to do.
I should like to talk a little about what help farmers will be allowed to give under the regulations. From the figures already quoted, it appears to me that we drink or eat 86 million tonnes, or whatever the figure is, and that we are producing 90-million-odd tonnes, so something positive must be done about reducing the amount of milk produced in the Community as a whole. We must ensure that it is fairly done, but we must bear our share. There appears to me to be only one fair way, and that is to buy out people. At the moment we are offering £650 a cow. I understand that the Germans are offering £1,600 a cow. There appears to be a fair disparity here.
However, it is bound to be profitable for the industry as a whole to get any reluctant or inefficient producer out of business. The scheme which my noble kinsman mentioned, which was put forward by another kinsman of ours and another kinsman of the noble Baroness, Lady Elliot, was a very simple one. It was to allow the Milk Marketing Board to set up among their own producers a scheme to levy the ones who wanted to stay in, and to buy out the ones who wanted to go out. I should like to ask the Minister whether this could be allied to the present scheme. Would it not be very sensible for farmers who go into this scheme to get as many reluctant or inefficient producers out, so that others could have a fair crack of the whip? If that was carried out to a sufficient extent, a situation could be reached where, if the quota was

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reduced to the required figure, there could be a much more efficient set-up in the manufacturing industry, particularly the manufacturing industry of the board. I should be very grateful if the Minister could tell me whether that is possible, or whether it could be made possible by negotiation within the Commission.
Like my noble kinsman, I was also impressed by what the noble Viscount, Lord Brookeborough, said, who asked me to mention Northern Ireland as he could not be present today. I have received a very good brief from the Ulster Farmers' Union, which appears to make a number of extremely good points. I do not quite understand why we let Eire get away with it. I congratulate Eire on their skill in getting an increased quota, but there is a very strong social case for Eire being allowed to keep the quota for the amount that they are now producing which is so important in their run-down economy, because a much greater proportion of their total GNP comes from agriculture as compared to that of any other country in Europe.
However, I cannot understand why on earth they received a 4·5 per cent. increase. It appears to me that we should not have let them get away with this, and it will he interesting to hear the Minister's comments on it. I understand that this is why, as my noble kinsman has already mentioned, certain sources are pouring milk into Eire at 40p a gallon along these informal channels, which, if it continues, I suspect will certainly be formalised into a sort of pipeline, so that the lorries do not need to cross the border at all. However, it is a ludicrous situtation and one which the Government must watch if farmers in this county are not to feel a great deal more aggrieved than they are now.
It is true that in Europe there is a suspicion that more skill is applied in getting round Commission and Common Market regulations than we apply here. In fact, there is suspicion that, while we are honest about it, the avoidance of the results of Common Market policy is actually encouraged by the Governments of these countries. We have seen it now institutionalised in the German Government's payments to farmers.
I should like the Minister also to try to explain to me what a producer/retailer is going to do. It is inconceivable that a producer/retailer is actually going to refuse to sell milk to his customers. It is not only inconceivable, it is impossible. Is he going to be levied if he fills his quota, but if, due to drought, which we have, the Milk Marketing Board in that area has not imposed a levy, does he then get away with it?
It is an extraordinarily complicated equation and I should like to know whether the Government see a way around this, because I certainly do not. It would be interesting to hear how they think all these individuals—and there are a large number—are going to try to cut the number of pints they sell to their hard-won customers. It is not possible. Therefore, I should like to hear what we are going to do and how we are going to look at that.
I have a lot of other points that I should like to make but I want us to get on. When we come to redundancies my noble kinsman mentioned the dairyman. Their position is strikingly different from the case of the steel workers, who apparently can get up to £25,000 without paying any tax. There are the farmers who go out and their workers who are put out,
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and I hope that, if the farmers get decent redundancy payments, they will make proper payments to the dairyman who loses his job. The concession made in another place that in fact the nice Government are going to make the farmers' compensation subject to whichever tax he wants to pay—capital gains tax or income tax—is perhaps less than generous, and they might well think again and simply make a payment for going out free of tax.
There are many other points, but I raise only one, and that is that the farmer has only five weeks immediately following the day the scheme comes into operation to give information on the application for payment. I should like to be assured that the forms will be ready for the application. It is a simple point but perhaps it is one that the Minister can answer.
The real lesson to learn out of this complicated situation is that quotas are absolute hell. In the other price cuts that are coming, and must come, in the surplus areas, I hope that the Government will fight against quotas and try to give us a simple price cutting scheme spread over a number of years, rather than having to come on all together as this quota scheme has done. Also, it is not only a quota scheme: there is going to be a heavy price cut as well. I sympathise with the Minister, but that will not stop us being as hard on him as we can be.
1.54 p.m.
Lord Belstead: My Lords, I should first like to say that I am genuinely grateful to all your Lordships who have spoken in this debate on these two statutory instruments for the constructive approach and the many suggestions which have been made. Of course your Lordships have been critical; I did not expect that your Lordships would be otherwise. But I think that in the last hour and a half there has been a recognition that this is a subject which affects the whole country —taxpayers, as well as producers. Having said that, I accept in the work that I do that it is the Government's and the Community's task to strike the right balance between the interest of producers, which are so enormously important, and the interests of taxpayers.
In beginning to reply I would say that after many years of urging by British Ministers, the European Community at last accepted in March of this year that the cost of the milk surplus really had to be tackled. I join with the noble Lord, Lord John-Mackie, who, at the beginning of this debate, expressed the wish that the realisation had been accepted a great deal sooner, and not least had been accepted within the Community a great deal sooner, for of course by that time the magnitude of the surplus was so enormous that any effective steps to deal with it would inevitably be painful.
In opening this debate I attempted to make clear that the Government agree with the noble Lord, Lord Sainsbury, that action on prices would have been much better than the complications of the quotas to which the noble Lord, Lord Mackie of Benshie, finally referred in his speech. But let us be clear: if we needed a 12 per cent. price cut just to deal with the surplus which had accrued during 1983, the level of price cuts which would have been needed, the level of action on prices which would have been needed, to try to deal

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with this situation and not just to stand still, would have been very great indeed. Although I believe that the British Government were right to press for action on prices, it did not come entirely as a surprise that our Community partners were not prepared to face that particular road and eventually went for the quota option.
Perhaps I may now turn to the matters under debate. Several of your Lordships—and I think my noble friend Lord Kinnoull in particular spent a few minutes on it—wanted to know whether the special case percentage would go round. This is not an easy decision. On balance, we decided that 2·5 per cent. of total quota ought to be enough for this purpose. Indeed, we fixed the 9 per cent. deduction with this in mind. Anything more would have had to have come from the generality of producers, so that instead of 9 per cent. we would have needed to have a 10 per cent. or 11 per cent. cut, or even more.
If the tribunals and the panels should wish to award much more, then I am afraid that all these special cases will have to have their extra quota scaled down, perhaps heavily. The same applies to the quota for exceptional hardship cases. But I very much hope that we have this as near to being right as possible.
I referred just now to special hardship cases. I wonder whether I may pick up a point which my noble friend Lord Wise made when he spoke in essence of a particular case he had in mind of someone who was committed to a particular level of production before quotas were imposed. I do not know whether what I am going to say will in fact fit that particular case. I must make that clear. But it is right to put on the record that the way in which the new exceptional hardship provision will work is that my right honourable friend will decide how much quota is to be set aside for exceptional hardship cases and the quota coming from the amounts given up by outgoers, and not from the 2.5 per cent. initial reserve for special cases. The tribunal will look at all the exceptional hardship claims and will decide a notional amount of extra quota for every applicant who meets the conditions.
If these notional extra allocations add up to more than the amount of quota set aside by the Minister, they will have to be reduced by a percentage to ensure that the ceiling is not exceeded. Anybody who wishes to be considered as an exceptional hardship case must be engaged in farming as his main occupation, and must have made some form of commitment before the 2nd April of this year as a result of which his quota, if any, is less than is required to sustain his business. He is eligible only if, when he made the commitment, he intended to continue in, or take up, dairy farming.
Your Lordships have been generous—although you have been critical—in recognising that my right honourable friend has genuinely tried to meet the points which were put forward in the debate in another place some 10 days ago. What I have just mentioned was indeed one of those points, and I repeat that I very much hope that we have it as right as we can have it.
I wonder whether I might refer to a matter to which I think only one of your Lordships referred; that is the question of the tax of payments to outgoers. I refer to it briefly. I believe it was Lord Mackie of Benshie who
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mentioned this. The noble Lord was good enough to refer to the option which has now been announced publicly by my right honourable friend that the payments under the outgoers' scheme can come to the farmer who has decided to go out either as a capital payment or as an income payment. This is a valuable facility. I hope that it will be widely recognised as such by milk producers in a scheme which, when all is said and done, is not a redundancy scheme, because some of the outgoers—indeed, many of them—may choose, while going out of milk, as they will be bound to do, to turn to some other form of operation on their holding: their quota released going, as we are determined, to the smaller farmers who are on holdings where it is so difficult to have an alternative operation.
I will, if I may, add one other thing about the tax treatment of milk producers in this whole area. I would remind your Lordships that the "herd basis", as it is called, of tax will be available for farmers who are selling their herds. That means that on 20 per cent. or more of the herd no tax will be payable on those sales. I understand that many producers are already on what is called the herd basis, but for those who are not there is now an opportunity to elect for such tax treatment under the special arrangements offered under Clause 48 of this year's Finance Bill which will allow farmers to elect for the herd basis and to apply for profits for a period of accounts straddling the budget. This should ensure that any disposal of a herd brought about by quotas will be tax free in the farmer's hands. I should say, therefore, before leaving the subject of tax, that I believe—indeed, I claim—that my right honourable friend has done the very best that he can to try to help the farmers who may, with the greatest regrets and in difficult circumstances, be deciding to go out of milk production at the present time.
Several noble Lords talked about the landlord/tenant situation. My noble friends Lord Kinnoull and Lord Stanley and my right honourable friend had exhaustive discussions with the interested organisations to see whether there were any circumstances in which an outgoer's application could go ahead without the landlord's consent. But it has not proved possible to get all sides to agree to any alternative arrangement in England and Wales. We therefore have no option but to require the consent of landlords in all cases. It is fair to say that the National Farmers' Union proposed that the sole obligation on the tenant ought to stem directly from his tenancy agreement, and that if the agreement does not mention quotas or staying in milk production the tenant should be free to enter the outgoers' scheme.
My Lords, if my noble friend Lord Kinnoull will forgive me, I do not think I can today go into whether or not notice to quit should come into this matter, but the crucial point is that giving up the quota may affect the earning capacity of the holding and hence the value of the land. The Government felt that it would be wrong to allow such a decision to be taken unilaterally, even though in many cases the landlord's position would be adequately protected.
May I add two rather more constructive things to that negative reply? Although it is not possible to find a solution which is completely fair to all, and we cannot cover all possibilities, I say to my noble friend Lord Stanley of Alderley that we continue to urge all

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concerned—landlord, tenant and farm worker—to consult together to try to recognise all the interests and to act accordingly. We have seen (dare I say it?) that as far as Scotland is concerned it has been possible to steer a way through this particular thicket, but the Scottish landlord-tenant situation is not quite on the same footing. I am simply expressing the hope that it still may be possible through agreement to try to find ways in which tenants can avail themselves of the scheme if they wish to do so.
My second point is that my noble friend Lord Monk Bretton raised the question of the leasing of unused quotas by producers. The Government agree with my noble friend that there would be considerable advantage in allowing the leasing of quotas, but Community legislation does not provide for this at present. I should like to express the hope that it may be possible at some time in the future to seek agreement in Brussels to a more flexible system. This is the first of a list of several things where I say to your Lordships, in answer to the question whether we shall try .to bring this to the notice of the Commission, which has been put to me again and again: yes, we shall; we shall certainly try to do our best.
Lord Stanley of Alderley: My Lords, I wonder whether my noble friend will give way while he is dealing with the question of the landlord and tenant problem. I am grateful for the remarks he has made, but the Minister put in the proviso that it has to have the landlord's consent. In these discussions, which he and I very much hope will continue, would he make himself or his ministry available to help in those discussions, as they are very much part and parcel of it?
Lord Belstead: My Lords, I do not think that my right honourable friend would ever wish it to be said that the ministry would not try to help when we are saying that we want to find our way through this difficult problem. My right honourable friend has taken up a definite position on this, that at the moment it is necessary for the tenant to have the landlord's consent; that is quite clear. But if there is any way to try to improve the situation for all concerned, I feel sure that the ministry would not wish simply to stand aside.
There is another question which was put to me by the noble Lords, Lord John-Mackie, Lord Sainsbury and Lord Graham of Edmonton. It was this. What about the situation in other member states who do not collect the levy? I think it is fair for me to say that my right honourable friend has made it clear in the Agricultural Council that we attach the highest importance to all member states applying the supplementary levy according to the agreed rules. My right honourable friend pressed the Commission at this week's Council meeting in Brussels to produce a report on progress being made in the different member states. I am glad to be able to tell your Lordships' House that the commissioner undertook to provide a comprehensive report for the Council meeting in September.
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This will mean that we shall know what progress has been made before any payment of levy becomes due in this country; because payment of levy, as your Lordships will remember, comes 45 days after the end of September. I am sure that if it became clear that some member states would not be meeting their obligations within the timescale laid down, the Commission, either through disallowance or through an approach to the European Court, could take appropriate action. I repeat what has been said before by my honourable and right honourable friends in another place; that it would be unacceptable for producers to be required to pay the levy if arrangements were not applied elsewhere.
Your Lordships have asked a great number of further questions and if you will bear with me for a few more minutes I shall attempt to answer at any rate some of them. My noble friend Lord Monk Bretton put specifically the case of the pedigree breeders who sold stock hack in 1982, with a very marked effect on their quota. Somebody who carried out such a transaction as the sale of stock before 2nd April 1984 as a result of which his quota entitlement is less than it would otherwise have been and who needs a bigger quota to sustain his business may—and I have to underline that it is only "may"—he able to benefit from the revision for special hardship cases which we have introduced. If my noble friend thinks that this is the position in a particular case that he knows of, perhaps he will draw this to the attention of those concerned to see if they can consider an application for the tribunal to consider.
The noble Lord, Lord Mackie of Benshie, at the end of his speech asked in more general terms about cutbacks in the industry rather in the same way as did the noble Lord. Lord Graham, in his speech. I have to say straight away that, with less milk to process, plants producing milk products will not be needed on the same scale as in the past. Obviously, with less milk going into Community butter and skimmed milk stockpiles, the factories which were doing the processing of those particular things may find that they have less work. This means that those factories which were partly dependent upon intervention as a production outlet will probably find that they bear the brunt of any cutbacks.
It gives me no pleasure to say that. However, I have to remind the House that, with something in the region of, I believe—and I am speaking off the cuff—140 days' supply of butter in intervention stores in this country and with something between about 640 and 650 days' supply of skimmed milk powder in intervention stores in this country, this was almost an inevitable consequence of what has finally happened in the Community.
Lord Graham of Edmonton: My Lords. I believe that, regrettably, many outside this House will have to accept the logic of what the Minister has said. Would the Minister not also take on board that, as a consequence not least of exhortations from Ministers in all governments—and we are talking about the recent past—considerable sums of money have been invested? What I am asking the Minister to do—not, of course, from the Dispatch Box today—is to consider very carefully the idea that I put forward that. where

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capital has become unproductive and costly and where jobs are going to be lost, some special consideration should be given to those hardship cases in the same way as hardship cases among farmers are being looked at. I put up the suggestion of a special compensation fund because I believe that the distributive chain will look very carefully at any exhortations in the future if they have been left alone and unaided to meet the consequences of the quota.
Lord Belstead: My Lords, I will certainly draw what the noble Lord has said to the attention of my right honourable friend and of the Secretary of State for Trade and Industry. I think that today, in the context of this debate, that is as far as I wish to go; but I assure the noble Lord, Lord Graham that that is what I shall do.
My noble friend Lord Kinnoull, in speaking about the tribunals and panels, asked about the costs of the panels, the question of legal aid and whether the hearings will be oral or otherwise. The cost of the proceedings before tribunals and panels is inevitably uncertain until we know how many people are going to apply. The basic principle is that producers should bear their own costs but not be asked to contribute to the costs of the panels. Beyond that, the tribunal itself and the Council of Tribunals will be looking at the rules on procedure, and I expect that hearings on appeal will be oral hearings. As to whether or not they will be with legal representation, that will be a matter for the tribunal to decide.
I hope that your Lordships will forgive me because I am afraid I am taking these points somewhat at random although not, I hope, totally at random. My noble friend also asked about the position of producers with about 35 cows and whether they will be able to benefit from reallocation quotas. The critical point is not really the number of cows but the amount of milk produced. Perhaps I have been guilty of talking about numbers of cows because it is easy shorthand. We are looking at producers with 200,000 litres of milk which at a yield of 5,000 litres per cow is equivalent to roughly 40 cows. It is those producers who we believe are most at risk because of the introduction of quotas. It is those we had first of all in mind when we decided that what we needed was an Outgoer's Scheme.
My noble friend Lord Kinnoull, together with several other noble Lords including the noble Lords, Lord Stanley, Lord Monk Bretton and finally Lord Mackie of Benshie, spoke with varying degrees of warmth about the undoubted difficulty which has been presented by the regulations as they have come out of the Commission, with regard to the inflexibility of direct quotas and wholesale quotas. It is very important to remember that, if direct sales had not been covered by the supplementary levy, it would have provided a serious loophole—and I guess a very much greater loophole in other countries than in this country, but nonetheless a loophole here which would have been for the convenience of no one. The effectiveness of the whole scheme would have been undermined if that had happened. Recognising the problems for direct sellers in managing their businesses within the quota system, my right honourable friend the Minister discussed this with the agriculture commissioner earlier this week. The
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commissioner is studying the problem, and we shall be pressing for a solution to ease the constraints to which your Lordships have very understandably drawn attention.
My noble friend Lord Kinnoull also asked: what kind of people will serve on the tribunals? The tribunals will comprise people with a number of different backgrounds—legal, farming and land agency—so that a wide range of experience can be brought to bear in the deliberations of the tribunals.
I have one or two other questions to answer but I feel that perhaps your Lordships have had about enough—
Lord John-Mackie: My Lords, I thank the noble Lord the Minister for giving way. He laid stress at the beginning of his reply on the point that a 12 per cent. cut in price, which would be disastrous, would be required to reduce production. If he studies the figures very carefully, as I have just done with the aid of my calculator while he has been speaking, he will find that 12 per cent. cut in prices on 5,000 litres comes to £86. The drop in the quota is £65. The drop in the price of cows and the drop in the price of culled cows is difficult to quantify into price per litre, but the two figures are nearly the same. I do not think it is a very good argument for accepting quotas.
Lord Belstead: My Lords, I should like to look closely, as indeed I always do, at the remarks of the noble Lord, Lord John-Mackie. I mean that quite genuinely. But there is one misunderstanding here, and again I am speaking off the cuff without looking back at my notes. What I thought I said, and indeed meant to say, was that I have been advised that we would have been facing something in the region of a 12 per cent. cut in the price of milk in order to have made good the enormous surplus of milk which has been incurred during 1983. If we had wanted what is so often called "action on prices" to try to put right the surplus in Europe one would have been talking about a price cut way above 12 per cent. I do not know exactly where it would have gone to, but we would probably have been talking about a cut much nearer 20 per cent. If I may, I will look at the remarks of the noble Lord in that light.
I end as I began. Your Lordships have been critical, and I understand why. At the same time your Lordships have been constructive, and for that I am grateful. Perhaps I might try to end on a constructive note. I believe that the introduction of the Outgoers' Scheme and the special hardship cases taken together with the provision for special cases will go a considerable way to help producers. I accept, however, that there are still matters which need to be pursued in the Council and with the Commission. In particular—if I may repeat it—the one which sticks in my mind as a result of this debate is the need for greater flexibility than we have at present, especially between the wholesale and direct sales. In saying that, I am not forgetting that your Lordships have referred to transfer, leasing and indeed the marketing of quotas.
Perhaps I may just pick out the very last of the remarks made by your Lordships. The noble Lord, Lord Mackie of Benshie, referred to a suggestion which I believe comes from none other than Mr.

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Maitland Mackie, chairman of the Aberdeen and District Milk Marketing Board, that the boards would be able to buy out quotas from individuals wishing to give up dairying. I think that that very interesting suggestion would involve buying and selling, which, as things stand, is not allowed under the Community regulations. That point, too, falls within the tenor of the answers I am giving, in that we are looking at it closely, and if we can bring any pressure to bear upon the Community, I promise the noble Lord that we shall do so. Meanwhile, I believe that the moment has now come when producers want to get on with dealing with their own situation. I think that is one of the messages that has come to me this afternoon.
If your Lordships approve the regulations, full explanatory notes will be sent at the beginning of next week to all producers with applications for special case claims, for the Outgoers' Scheme and for direct sales. Perhaps I may say in answer to the noble Lord, Lord John-Mackie, that a guide to the regulations is also being prepared and detailed advice will also be available from the Ministry's divisional offices.
I ask for your Lordships' support to get on now with the arrangements which are ready to be put into effect, and for the agreement of your Lordships' House to the Statutory Instruments which are referred to on the Order Paper.
On Question, Motion agreed to.

Dairy Produce Quotas (Definition of Base Year Revision Claims) Regulations 1984
Lord Belstead: My Lords, I beg to move that the draft regulations laid before the House on 16th July be approved. I have spoken to this Motion, which is really an addition to the main regulations.
Moved, That the draft regulations laid before the House on 16th July be approved. —(Lord Belstead.)
On Question, Motion agreed to.

Social Security Benefits Up-rating Order 1984
Pensioners' Lump Sum Payments Order 1984
Child Benefit (Up-rating) Regulations 1984
Family Income Supplements (Computation) Regulations 1984
Supplementary Benefit Uprating and Additional Requirements Regulations 1984
Supplementary Benefit (Requirements and Resources) Amendment Regulations 1984
Housing Benefits (Increase of Needs Allowances) Regulations 1984
2.24 p.m.
Lord Glenarthur: My Lords, I beg to move that the draft Social Security Benefits Up-rating Order 1984, be approved. The order is accompanied by a report from the Government Actuary on the effects of the up-rating on the National Insurance Fund and by a statement on the uprating of mobility allowance.
With your Lordships' permission, I will at the same time deal with the remaining Motions standing in my name on the Order Paper. The report of the Social Security Advisory Committee, including the Secretary of State's reply, on the statutory instruments which were referred to them, has been printed as Cmnd. 9296 and is before the House. The effect of this package of instruments is to put into effect the up-rating of benefits which my right honourable friend the Secretary of State announced in another place on 18th June; to provide for payment of the £10 Christmas bonus; and to make certain other changes.
I should perhaps mention that the social security up-rating order takes no account of the changes which are proposed in the Health and Social Security Bill which your Lordships passed last Tuesday. When that Bill is enacted, the 15p a week child dependency additions which are paid with short-term benefits will be abolished. Also a new benefit, severe disablement allowance, will replace non-contributory invalidity pension and housewives non-contributory invalidity pension. Neither of these changes is reflected in the up-rating order, since it would not have been appropriate to anticipate the main legislation. But both changes should take place on up-rating day, 26th November, and when they come into effect they will automatically modify what appears in the up-rating order. In other words, the 15p short-term child dependency additions should cease to be paid from November 1984 and severe disablement allowance should be paid at the rate shown in the order for noncontributory invalidity pension, which is £21.50.
I do not wish to rehearse the detailed changes in individual benefits since these are set out in the tables which appear in the statutory instruments. I propose to confine myself to the main features of the up-rating, and of the more important changes. The majority of benefits will be increased by 5·1 per cent., in line with the movement in the retail prices index to May, while the supplementary benefit scale rates will he increased by 4·7 per cent., in line with the retail prices index, excluding housing costs. The housing benefit needs allowances will be increased by 4·8 per cent., reflecting changes in the supplementary benefit scale rates and the average levels of local authority rents, and rates and water and sewerage charges. The needs allowance for a dependant child will be raised by a further 50p on top of the general increase, and by a further £1 in April 1985. This will mean a total rise of 16 per cent. since November 1983, giving real help to low income families with children. As in 1983, this up-rating is based on the historic movement in prices in the 12 months to May, which is an improvement over the old haphazard forceast method. In total, this up-rating will add over £1½ billion to the social security budget in a full year, taking it to £39 billion—almost one-third of all public spending. The cost of up-rating the retirement pension alone is £780 million in a full year;

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that is, the extra cost on top of what we are now paying.
In November 1984 pensions will have increased by 83·6 per cent. since this Government came into office against an expected rise in prices of 76·4 per cent. At the same time, more and more people are benefiting from the build up of the earnings-related pension scheme. The maximum earnings related addition for a newly-retired person is now £15·42 per week. The last Labour Government presided over inflation of 112 per cent. between 1974–1979: inflation under this Government is currently 63 per cent. Runaway inflation is a disaster for pensioners and for anyone with savings or living on a fixed income and the continuing improvement in controlling price rises is the most important achievement of this Government in relation to pensioners.
As well as the benefits which we are pledged to protect, we will this year maintain the value of all the main benefits, including family income supplement and mobility allowance, and the supplementary benefit scale rates. Child benefit will maintain its highest ever level in real terms. The retirement pension earnings rule will again incease by more than inflation—from £65 to £70 a week. Following last year's incease of 14 per cent. this is an earnest of our intention to abolish the limit when resources permit.
The up-rating this year will take effect on 26th November, which is 53 weeks after the last up-rating. We must have an interval of 53 weeks every few years or the up-rating would slip forward gradually until it moved right out of November into October; in 50 years' time we would be up-rating in mid-summer. We have always intended to up-rate in the last full week in November and that is what we shall be doing this year.
As your Lordships will know, a strike by a number of computer staff at the department's central office at Newcastle is currently disrupting payment of retirement pension, widow's benefit and child benefit. I deplore this action which is causing concern and anxiety to pensioners and other beneficiaries. We remain ready to resume negotiations, which the unions broke off to take strike action, and I therefore welcome a recent initiative by the Advisory Conciliation and Arbitration Service to bring both sides together, which the Government gladly accept. I hope that this initiative will also be welcomed by the unions involved and that a speedy settlement can be achieved. Given an early return to normal working, I am confident that the up-rating will be completed broadly on time. I can however assure your Lordships that whatever happens no pensioner will lose any of the increase as a result of the dispute, and that every effort will be made to pay the increases with as little delay and inconvenience as possible.
Two of the statutory instruments which we are debating go further than simply up-rating the benefits and I should like to mention these in a little more detail. First, the Supplementary Benefits (Requirements and Resources) Regulations make a number of technical changes to the scheme of which I need only refer to one; that is that people on supplementary benefit will in future be able to claim reimbursement of fares to visit relatives in residential homes and
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hostels. Until now, fares have only been payable for visits to close relatives in hospital, and this extension represents a further step in the Government's commitment to community care, by ensuring that a person discharged from hospital to a residential home or hostel can continue to receive visits.
The Supplementary Benefits Uprating and Additional Requirements Regulations provide for the increases in the scale rates, but they also increase the available scale margin. Perhaps I could explain briefly what this so-called margin is, and then indicate why we believe that some changes are now overdue. In some cases, a supplementary benefit claimant may get an extra weekly payment on account of special expenses such as special diets or heating needs. In 1966, a higher scale rate was introduced for the normal living expenses of certain long-term claimants. One reason for this higher rate was to reduce the need for those claimants to claim additions to their benefit for special expenses and so to reduce the need to ask detailed questions about special expenses. It was therefore decided at that time that the whole of the difference between the long-term and the short-term scale rates, which in 1966 was 45p, should be offset against any additional amount for special expenses of people on the long-term rate, thereby avoiding double provision for the same expense. The amount to be offset is known as the "available scale margin".
Since 1966 the difference between the long-term and the short-term rates has steadily increased. From November 1984, for example, a couple on the long-term rate will be £11·55 better off than they would be on the ordinary rate. But the amount of this extra benefit which is deducted from additional payments for special expenses—the available scale margin—has not been increased since a Labour administration put it up to 50p 16 years ago. It therefore seems reasonable, and arguably long overdue, that we should increase the margin to bring it up to the relatively modest level of £1. Nor is there any logical reason why the margin should not be offset against heating additions, as indeed it was until 1973.
At the same time as proposing changes to the available scale margin, we are also planning to extend the scope of heating additions. We propose to introduce new automatic heating additions at the higher rate of £5·20 for supplementary pensioner householders over 85: about 90,000 pensioners will gain from this. We are also extending automatic heating additions to all supplementary pensioner householders over 65; about a further 80,000 pensioners will gain as a result. I should like to remind your Lordships that it was the Conservative Administration which in 1979 introduced automatic heating additions for householder claimants with children under five and for supplementary pensioners aged 75 or more. In 1980 we reduced the qualifying age for supplementary pensioners to 70. We have therefore considerably increased the range of people entitled to heating additions.
We have also increased their real value. Between November 1978 and November 1983 we increased the basic rate by about 140 per cent. compared with a rise in fuel prices of about 100 per cent. Heating additions are therefore worth more than ever before.

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We expect to spend about £400 million on heating additions this year after allowing for the savings from applying the available scale margin to heating additions. This is about £140 million more in real terms than was spent in the final year of the last Labour Administration.
I have mentioned some of the more controversial changes which will take place in November but I should also like to remind your Lordships about another improvement which we will be making. I am particularly glad that we are able to direct some additional help to elderly war widows. These are mostly widows whose husbands fought in the First or Second World Wars. We propose to increase the existing age allowances by over 15 per cent. and to introduce a new rate of £12·50 a week at age 80. Some 50,000 war widows will benefit from these improvements, which will be brought into effect by an Order in Council.
In conclusion, this year's uprating package is fair both to those who receive benefits and those who must pay for them. Many of those who are in work are having to learn that pay rises must be earned by increased productivity. It is right that during a recession we should be particularly concerned about those who are most in need, but we have to strike the right balance. This up-rating will maintain the real value of all the main benefits and scale rates and concentrates some small but worthwhile improvements in areas where help is most needed. My Lords, I beg to move.
Moved, That the draft order laid before the House on 9th July be approved;
That the draft order laid before the House on 9th July be approved;
That the draft regulations laid before the House on 9th July be approved;
That the draft regulations laid before the House on 9th July be approved;
That the draft regulations laid before the House on 9th July be approved;
That the draft regulations laid before the House on 9th July be approved:
That the draft regulations laid before the House on 9th July be approved. —(Lord Glenarthur.)
2.34 p.m.
Baroness Jeger: My Lords, I should like to thank the noble Lord, Lord Glenarthur, for putting these complicated matters so clearly before the House. The fact that it is Friday afternoon and that the majority of your Lordships have found it agreeable to go to fresh fields and other pastures does not exempt those of us who are here from putting one or two points which affect hundreds of thousands of people in this country.
The first question I want to put to the Minister relates to the point that whereas the majority of benefits are to go up in line with the retail price index as it was in May—that is, they are to increase by 5·1 per cent.—supplementary benefit is to increase by only 4·7 per cent., in line with the RPI but excluding housing. In view of the recent news about an increase
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in the mortgage rate and the fact that many council rents and other rents are being increased, and in view also of the muddle surrounding housing benefits, I am wondering whether we are being fair to supplementary benefit applicants. I hope that the noble Lord the Minister can help us on that matter.
In respect of the Social Security Benefits Up-rating Order, we of course welcome what improvements there are. But we have to ask particularly about the death grant, in which there is no increase made. It is generally thought that the death grant is £30, but I remind your Lordships that between the ages of 18 and 55 in the case of a man, or up to 50 in the case of a woman, the death grant payable is only £15. It seems that all the promises made by the Government that they will look at this matter have not been fulfilled. I would have thought that today was a suitable moment to give some news on that point.
With regard to flat-rate retirement pensions, we welcome that change. but we do not welcome the fact that for the long-term unemployed there is no long-term benefit; there is no improvement for the long-term unemployed in relation to long-term benefits. I know that the noble Lord will have to tell us about the economy of the country and what we can and cannot afford, but I hope he can explain one matter which, in my innumeracy, I cannot understand.
I have read very carefully the reports by the Government Actuary on the draft Social Security Benefits Up-rating Order, and I find that the surplus in the national insurance fund has been increased from £518 million last year to £932 millions this year. The Government Actuary—not I, because I would not dare to say anything about figures—states that 26 per cent. of benefit is kept in the fund. This seems to me more than is necessary. In 1983–84 the amount was 23 per cent. In 1982–83 it was 21 per cent. We are increasing the balance in the National Insurance Fund at a time when we are saying that we cannot afford to do certain things which many noble Lords consider would be helpful and useful, such as assisting the long-term unemployed.
I do not have to refer to the fact that the Christmas bonus is staying at £10, but I must say a word about the Child Benefit (Up-rating) Regulations. Child proverty is at the heart of family poverty in this country. We will never be able to make a real attack on family poverty until we deal more generously with child benefit. I accept that the rates are going up, but I remind the noble Lord that it was the Conservative National Women's Committee who made a statement not long ago saying:
"Child benefit should be increased in line with any increase in tax allowances, remembering that child benefit has replaced the former system of child tax allowances".
But personal tax allowances have increased by between 13 and 14 per cent. and child benefit is being increased by only 2·7 per cent. If the same criteria applied, surely the figure for child benefit should be in the region of £7·60, and not £6·85. I must ask the Minister whether there cannot be at some time a more generous approach taken to this important problem.
On the question of the Supplementary Benefit (Requirements and Resources) Amendment Regulations, there is some problem about the

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definition of a boarder. I am referring particularly to people who live in hostels and bed and breakfast accommodation—which is an increasingly used way of dealing with the problem of homeless families. I very carefully read paragraph 13 of the Report of the Social Security Advisory Committee, which states:
"Whatever the merits of the proposed amendment in principle, it is plain from the points made above that it would cause quite disproportionate problems, for hostels, their residents and for local authorities, and would moreover have a substantial impact on community care and voluntary projects of the kind the Government have been seeking to encourage".
Lower down, in paragraph 14, it states:
"We hope that it will prove possible to devise a simple and workable criterion to identify hostel-dwellers who could reasonably receive the householder scale rate instead of the board and lodging rate".
I shall not go into greater detail on that, but I leave with the Minister the thought that the Government's own advisory committee has some hesitation about that part of the regulations, and I hope it can be looked at again.
I must ask a specific question on the Supplementary Benefit (Requirements and Resources) Amendment Regulations. I understood that there was a capital disregard of £3,000 for people applying for supplementary benefit. Recently I read in the press, as many other noble Lords must have done, about two cases where children's pocket money was taken into account. In the case of one family it was found that their nine-year-old son had £63 in his piggy bank, and in the case of another family the child had saved £33. This was reported in the Standard on 11th July. It was not, as it were, "sudden" money; it was money which the children had saved over the years from Christmas and birthday presents. It seems extraordinary that these amounts were taken into account when their parents applied for supplementary benefit.
I should like to know under what legislation the contents of children's money boxes are counted when, as I understand it, the law is that there is a disregard of £3,000 for savings. If the Government are setting their supplementary benefit officers to go round counting what children have in their money boxes, no wonder there is a strike at Newcastle; and I cannot imagine where else there will not be some trouble soon. Therefore, if the Minister cannot answer that today, I hope he will, as usual, take on the mantle of St. Paul and send me an epistle, a copy of which I shall send to the Standard and to anyone else interested, in particular the families concerned. The facts about these two families have become public but one wonders how many more examples there are which we do not know about.
As regards housing benefits, all I can say is that there is total muddle, confusion and despair. The fact that the Government themselves are having another review of the question indicates that they also know that what they are doing is not meeting the requirements of the people in greatest need, especially, as I mentioned earlier, in view of the increase in mortgage payments and all the problems which follow from that.
I am sorry to have mentioned so many points, but this is the only opportunity I have before the Summer Recess to make them. I do not apologise for doing so at a quarter to three on a Friday. When I started work
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in the Civil Servie many years ago we worked even on Saturday mornings, and so working on Friday afternoon is for me no great penance.
2.44 p.m.
Lord Banks: My Lords, I should like to join in thanking the noble Lord, Lord Glenarthur, for the way in which he introduced these orders this afternoon. As he made clear, the orders provide the necessary up-rating to keep benefits in line with prices. I think that it is fair to say that there is no significant improvement over and above that, except the extensions which he mentioned to the scope of the age-related heating additions and also what he said about war widows.
Of course, the long-term national insurance benefits would have increased by more but for the breaking in 1980 of the link with earnings. We have to wait and see how inflation in the period May to November 1984 compares with that in the period May to November 1982 before we can say whether there is a loss suffered as a result of the move to the historic method last year. We discussed that last year at some length, and I shall not go into it again. I have a letter from the noble Lord, Lord Trefgarne, agreeing that what I have just said is correct.
The Government always say that there is not money for any additional benefits which may be proposed, but it seems to me that that does not apply to the National Insurance Fund, which provides over 60 per cent. of the benefits. Earnings have been increasing faster than prices, which has meant that revenue has been increasing by about 7 per cent. and outgo by about 5 per cent. As the noble Baroness, Lady Jeger, pointed out, that is one of the reasons why the annual surplus is now anticipated for the year 1984–85 at £932 million, according to the Government Actuary's report. That compares with an estimated figure of £200 million last November. The total surplus is rising as a percentage of annual outgo, and that is a reversal of trend, since it was moving for a number of years in the opposite direction.
That has occurred in spite of the reduction from 18 per cent. of contributons to 11 per cent. in the Treasury supplement. I understand that that reduction is fully effective in the year 1984–85. That means that contributors are paying a higher proportion of that increased revenue—employees paying nowadays 9 per cent. as against the 6.5 per cent. when the Government took office.
The recent Department of Health and Social Security publication, Population, Pension Costs and Pensioners' Incomes, assumed an earnings rate of increase in the future of 1½ per cent. higher each year than prices. If that should prove correct, will that not mean an increasing surplus in the National Insurance Fund in the years immediately ahead? If so, will it be used to increase benefits or to reduce contributions? Can we he assured that there will be no further decrease in the Treasury supplement?
Of course we cannot ignore the long-term increase in the burden that will be placed on the National Insurance Fund to cope with the maturing earnings related pension sheme. I have suggested ways in which that could be reduced. I will not go into that in any detail now, except to say that it involved the abolition

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of the earnings-related pension, putting everyone on contracted-in contributions and increasing the basic pension by 25 per cent.
The Government's proposals for personal pensions will have an effect, too, upon the burden on the national insurance scheme. In talking about that I must declare an interest, since I am an insurance broker specialising in pensions. I should like to welcome the proposals in the Government's consultative document to provide a contracted-out pension alternative to the earnings related pension and the guaranteed minimum pension. The principle of an employee contribution to a personal pension plan has been accepted by the Government. I first put that idea forward as a means of assisting those not in occupational pension schemes in an article in the News Chronicle in October 1958. So I am encouraged to find at last that the Government are making a move in that direction. In so far as those in contracted-in occupational schemes and those not covered by occupational schemes effect contracted-out personal pensions, the future burden on the National Insurance Fund will be lessened.
I should like to ask the noble Lord if he can say what the Government intend in order to deal with the problem highlighted both by the Select Committee on the Social Services in another place and by the Social Security Advisory Committee in their second report; namely, the position of those already retired with little or no earnings-related pension. The gap between them and younger pensioners is going to open up and increase in the years ahead. Both the bodies to which I have referred have said that resources must be found to assist those people. What about the 5 per cent. abatement in invalidity benefit, maternity allowance and sickness benefit? When do the Government envisage that being restored?
The noble Baroness has referred to the death grant. I wonder whether the Government have yet made up their minds as to what they intend to do about that? It stands at £30 but should be something like £210 if its value were restored. As the noble Baroness has said, the pensioners' Christmas bonus lump sum is to be continued this year but of course it is gradually losing value. Eventually critics will say to the Government that this is a derisory amount to give to pensioners. It will become so. The Government will say in reply that it would cost too much to restore its value. This is happening too often to benefits. My view is that benefits should be maintained and up-rated every year unless Parliament decides that they are no longer required.
The noble Baroness spoke about child benefit. I notice that the Secretary of State said in another place that he would look further at this particular question. The income tax allowances, which child benefit replaces, increased by 12.5 per cent. this year, yet child benefit is to increase by 5 per cent. I think there is a very strong case for a higher increase in child benefit. The noble Baroness quoted the figures provided by the Child Poverty Action Group, which suggest that the increase in the real value of personal allowances roughly during the period the Government have been in office was much higher than the real value increase in child benefit.
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Turning to family income supplement, the prescribed amount has been raised to take account of inflation. I should like to ask the noble Lord what the take-up now is on family income supplement. I am not altogether happy about the fact that it is proposed that in the future there should be no change during the year of assessment for any up-rating. It has been the practice in the past to apply an up-rating immediately, even though there were no other changes during the year. It may be possible to make a logical case for what the Government propose in these orders but I wonder whether that is wise and whether it will not just be seen by everybody as making another cut—another saving in benefit.
On supplementary benefit, I share in the regret that the long term benefit is not yet available for the unemployed. The Social Security Advisory Committee have described that as wholly unjust. Again, I wonder whether the noble Lord could say what the take-up now is for supplementary pensions for those retirement pensioners who are eligible for them? I am a little concerned about the available margin proposal to which the noble Lord referred, the increase from 50 pence to £1 in the sum deducted from the additions to the scale long-term supplementary benefits. Is it correct that that will save £86 million in a year? Again, it may be possible to make out a logical case for this; but, even more than in the previous case, will not the effect be just to make a cut in long-term supplementary benefit?
In regard to housing benefit, the order before the House merely increases the needs allowances to take account principally of inflation. The orders embodying the cuts in housing benefit are not before the House, but I should like to ask the noble Lord what is the final figure for the cut from housing benefit caused by the reductions imposed in the last year. When we consider housing benefit, as the noble Baroness said, we are considering something of very great complexity. A national survey carried out by the citizens' advice bureau has found miscalculation of housing benefit in 25 per cent. of the cases, and three-quarters of these were cases of underpayment; and this after 15 months of operation.
I am glad that the Government have in progress a review of the whole operation of this benefit. By the time we discuss the next up-rating order, next year, no doubt we shall have heard the outcome of the various social security reviews. I hope they will have devised a means of unifying, simplifying and improving the complicated, diverse, and often inadequate and contradictory social security and tax systems which we have in this country today.
2.57 p.m.
The Earl of Longford: My Lords, the noble Lord, Lord Banks, has declared an interest, because he is an insurance broker specialising in pensions. I am an old-age pensioner specialising in the receipt of insurance benefit or any other benefits that are available. I hold in one hand my rail card and in my other hand my bus card; therefore I am declaring that kind of interest.
I want to say a few words in support of my noble friend Lady Jeger, and to put this matter in a rather longer perspective. I remember that before the war,

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when I was a city councillor in Oxford, I asked an elderly gentleman what .he was living on. In fact, he was living on an old-age pension of 10 shillings a week. He had been a friend of Billy Morris—Lord Nuffield, as he became. Nuffield had offered him the chance of going into business along with him. But my friend stuck to what he called the horses; I mean the horse and cab. He said to Nuffield, "You'll never beat the horses". It did not work out that way, and my friend was on 10 shillings a week and Nuffield was a multimillionaire. My friend said, "I don't envy him particularly; I'm told his stomach isn't too good". I must say that I should like more than 10 shillings a week.
Since then, there have been great improvements, hut, if I may say so, they were not brought about by the party opposite; definitely not. During the war I worked with Sir William Beveridge for three years. He produced plans which were put into effect by the Labour Government after the war. Sir Winston Churchill would not meet Sir William Beveridge —they knew him of old—because he did not like the Beveridge plan. So it is no good pretending that in this respect there has been any kind of parity with the Liberals. After all, Sir William became a Liberal. I thought he was mistaken to do so, but eventually he became a Liberal. The Labour Party and the Liberals have pressed for these great improvements, which were effected in substance by the end of the first Labour Government after the war.
We now come to the present situation. The Conservative Party is represented, very ably and charmingly, by the noble Lord opposite. I do not hold him responsible for the whole of the party's philosophy, but, still, he is their spokesman. They stand for a reduction in public expenditure. Is that right? I do not know how they are going to bring that about except by reducing the social services. If they say that they have some other cunning way of doing it, by some mysterious economies or by a reduction in waste, then let us hear about it. But that is their policy, and it is an understandable view that this country is spending too much on the social services. And so we do not expect much from them. I am merely asking the noble Lord—and I am not going to go on any longer, because we all like him and, therefore, do not mind twisting his tail—
Lord Stone: T-A-L-E!
The Earl of Longford: My noble friend says "T-A-L-E". I am asking the Minister: how does he harmonise the Conservative policy of reducing expenditure with the idea of looking after the interests of the old?
3.1 p.m.
Lord Kilmarnock: My Lords, we must be grateful to the noble Earl for introducing a less solemn and technical mood into this annual debate on the up-ratings. I am afraid I have one or two slightly more technical questions that I should like to ask the noble Lord, Lord Glenarthur. In the first place, both the noble Baroness, Lady Jeger, and my noble friend Lord Banks have referred to the management of the National Insurance Fund. Therefore, it would be
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superfluous for me to go into any further detail. But I think they have put their fingers on a very important point. In point of fact, the balance in the fund at the end of the current year is estimated at £4,541 million, and for the coming year at £5,473 million; so nearly a £1 billion advance in the balance of the fund is projected for the end of next year. That, of course, reads rather oddly along with the explanation which was given by the Government Actuary in Section 8 of his report, in which he says:
"A number of factors are responsible for this change but it is due mainly to higher contribution receipts and to lower expenditure on retirement pensions than were previously expected".
Those two matter make rather a strange contrast.
There is also, of course, the point that the percentage of balance in the fund has been building up from 21 per cent. in 1982 to an estimated 26 per cent. in 1984–85. Those points have been partly covered already, but they are extremely important and I hope that the noble Lord will be able to say something about them.
Another matter which is perhaps a little nearer the bone is the shift—although it is not strictly covered in the regulations—to the payment of unemployment benefit fortnightly in arrears. This is more than administrative tidying up, because before fortnightly signing was instituted claimants signed weekly and were paid weekly in arrears. When fortnightly signing was instituted, the "one week in advance and one in arrears" policy was a careful move to ensure that claimants were not worse off as a result of the change which, in any case, saved the department considerable amounts of money.
As regards what the Government propose, although in theory a person beginning work at any point between his fortnightly signing days will he able, by contacting his local office, to obtain his arrears, in practice most people, realising that they do not owe the department anything, will simply fail to sign on their next signing day. This is what happens on a large scale at the moment. But the difference is that under the new system claimants could, by so doing, be losing up to a fortnight's benefit, whereas under the old system either the claimant or the department were only "out" by a few days—and if it was the department, they could always recover it if the person signed on again.
One of the reasons advanced by the Secretary of State in another place for shifting to fortnightly in arrears appears at column 28 of the House of Commons Hansard for 18th June, when he said:
"Our survey shows that two-thirds of claimants had two weeks' or more wages when they finished work"—
and that, presumably, is the rationale behind his wanting to shift on to this fortnightly in arrears system. I should like to ask the noble Lord from where the Secretary of State obtained those figures, and what about the other third who do not have two weeks' wages in their pockets when they become unemployed?
My noble friend Lord Banks has already referred to family income supplement. I should simply like to support him and ask what is the latest news on take-up (because the situation has always been rather disappointing in that field) and what efforts the noble Lord's department has been making.

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On the matter of long-term supplementary benefit, we are certainly grateful to the noble Lord for his explanation of the available scale margin, which, as a result of his explanation, I think I now understand for the first time. However, I think that the Government have missed an opportunity (I have raised this matter before and make no apology for raising it again) to use these regulations as a vehicle for extending the long-term rate to those over the age of 55 who have been unemployed for more than three years. The noble Lord knows that I have proposed this to him before. There are 64,000 such people and he has given me a calculation of some £10 million cost. It seems to me that that is rather good value for money in relation to other savings that the Government have recently been making in the social security field.
On the question of heating additions, the noble Lord told us by how much those over the age of 80 would be better off, but my information is that only a 5p a week increase on central heating additions will be the norm for those who are not among the very elderly, which hardly seems to me to be a generous increase. Does the noble Lord not accept that some supplementary benefit recipients who have expensive heating systems are denied the state rate heating additions simply because they pay their heating bills along with their rent to their landlords? Will he look into that anomaly, which I am told gives rise to much resentment on many council estates?
Finally, because it is a Friday afternoon and because I am sure that we do not want to keep the House, I should like to raise only one more matter. I apologise for raising it, but on the other hand this is the last occasion on which I can do so before we return in the autumn. It concerns 16 to 19 year-olds during the school holidays which have already begun. In Command Paper 9296, which is referred to in the explanatory note to the Supplementary Benefit Amendment Regulations, this matter is raised. It concerns clarification of the number of hours of study allowable to 16 to 19 year-olds in non-advanced further education compatible with receiving supplementary benefit. I shall not go into any detail; I simply want to point out that at pages 50 and 51 the Social Security Advisory Committee's report says:
"It is … very difficult for claimants wanting to study during the initial qualifying period to be sure—unless their course lasts only a few hours a week—that they are not going to be determined as entitled only to child benefit".
In the final paragraph on page 55 the committee says:
"we continue to feel that the various rules and conditions surrounding education for unemployed young people could be improved and rationalised to remove the existing awkwardnesses. The problem is one which goes beyond DHSS responsibilities and requires a concerted examination by the various Departments which deal with young people in the years between achieving the minimum school-leaving age and beginning independent work. We hope very much that the recently announced review of benefits for children and young people will provide the impetus to tackle this vexed area".
I very much hope that the Secretary of State's review of this area will take that into account. According to the department's response to the Social Security Advisory Committee, the present situation is that it appears to be the department's aim to base amending regulations on 12 hours of supervised study, and the
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intention is to bring the new regulations into effect in time for the 1984–5 academic year. I may be wrong, but that would appear to me to be more restrictive than before. I should like to ask the noble Lord to bring to the attention of the appropriate review body which the Secretary of State has set up the urgency of shedding light on this grey area, which is a source of puzzlement and confusion to many young people. I simply raise this now because there will be no opportunity to raise it again until probably late in the autumn.
3.10 p.m.
Lord Glenarthur: My Lords, as the noble Baroness, Lady Jeger, said, this is the last opportunity to discuss these rather complex matters in this Session. I have to say that there was an opportunity, which was not taken up, to go through the subject when the up-rating statement was made. If I am unable to answer all the points that have been raised on the seven Motions, I shall follow them up in correspondence.
I shall begin with the noble Baroness's first question as to why the up-rating for housing cost will be the RPI less housing; that is, I should say, for the purposes of supplementary benefits. The RPI less housing costs is used to up-rate supplementary benefit scale rates because supplementary benefit claimants have their housing costs met separately. It has been used in this way since 1982, and in 1982 it resulted in a smaller increase than would have resulted from the use of the full RPI, but in 1983 it resulted in a greater increase. On this occasion it has resulted in a smaller one. The housing benefits needs allowances have been up-rated in accordance with the normal formula.
The noble Baroness mentioned mortgage interest rates and the treatment of those on supplementary benefit and housing benefit. Supplementary benefit makes full allowance in the assessment for mortgage interest. Housing benefit, which gives help with rent and rates, has been up-rated in accordance with the normal formula. It would be inappropriate to up-rate housing benefit needs allowance in line with RPI, which includes mortgage interest.
So far as tax allowances and child benefit are concerned, the argument being that tax allowances have gone up by about 105 per cent. and child benefit by only 71 per cent., in 1979 this Government inherited a child benefit rate of £4. In November the rate will go up to £6.85. This is a raise of 71.3 per cent., which is 2.8 per cent. in real terms, since 1979. It is a considerable achievement. Child benefit is an expensive benefit, as the noble Baroness will be aware, because it is universal. It is non-means tested, and it is non-taxable, as well. Each increase of 10p costs £50 million a year net. Increasing tax allowances is in any event a better way of reducing the poverty trap than is increasing child benefit.
The noble Baroness, Lady Jeger, and the noble Lord, Lord Banks, raised the question of the death grant. As they will know, a consultative document was issued in March 1982. There were three options for an increased grant, to fewer recipients, but there was no conclusive response to it. Most respondents wanted an increased grant payable to all, but even if the money

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were available, there are higher priorities for social security spending. I think there is general agreement that the people who really need help ought to get it. It ought to be targeted right.
But in any event, as my right honourable friend the Secretary of State said when announcing the social security reviews on 2nd April, we shall want to consider the death grant together with the whole of social security over the coming years. That matter will be taken into account and perhaps the reviews will produce a result in regard to the problem to which the noble Baroness and the noble Lord refer.
So far as long-term scale rates of supplementary benefit to the unemployed are concerned, we have discussed this once or twice, or possibly even three times, over the last few weeks. We are aware of the arguments for extending the long-term scale rate in the way suggested. The cost would be £480 million, or £220 million if the extension was limited to those with children. It would be very considerable. On those grounds alone it must be ruled out at present.
The noble Lord, Lord Kilmarnock, again asked me about the over 50s.
Lord Kilmarnock: My Lords, it is the over 55s—I think they are 64,000 in number—who have been unemployed for over three years. I understand that an extension involving them would cost nothing like the astronomical figure which the noble Lord has mentioned. I think it would be in the region of £10 million.
Lord Glenarthur: My Lords, I have a feeling that I gave the figure to the noble Lord before. It was the figure I was given. I will certainly check on it and if it was wrong or misleading I will come back to him in writing. I should say to the noble Baroness that since we came into office we have managed to increase the real value of the scale rates by some 5 per cent. Those with children have done even better, with an increase of some 27 per cent.
To turn to the Government Actuary's report on benefits, the question put to me by the noble Baroness—which I think was implied also by the noble Lord, Lord Banks—was whether rates will be increased in view of the size of the surplus in the National Insurance Fund. Benefit rates have always been set by the Government taking the view of what levels seem justified and affordable having regard to overall economic and social policies. I shall return to the general questions put to me by the noble Earl, Lord Longford, in due course; but the short term surpluses and deficits on the National Insurance Fund have never been a factor in setting benefit rates.
Lord Banks: My Lords, I will detain the Minister for only a moment. I am most grateful to him. He says that they have never been a factor. Perhaps the noble Lord would just say again that last sentence when he was referring to the factor.
Lord Glenarthur: My Lords, what I said was that the short term surpluses and deficits on the National Insurance Fund have never been a factor in setting benefit rates.
Lord Banks: My Lords, I do not think my question was about benefit rates. It was whether new benefits would be considered in some of the various proposals that are put forward from time to time, if there is a surplus increasing in the fund because earnings are continually running ahead of prices.
Lord Glenarthur: My Lords, it really turns on the general question which was asked by the noble Earl, Lord Longford, and that was, if I understood him correctly, that this Government, in the noble Earl's words, seek to reduce public expenditure. The fact remains that there are a number of benefits which are being reviewed by my right honourable friend at the moment, with a view, it is hoped to trying to make them less complex, which will probably help all of us in this House and others as well. But money does not grow on trees and the important point is to target the benefits in the right direction. They are very expensive. As I said when I moved the orders. they account now for a total bill of £39,000 million a year. That is a considerable sum of money.
Lord Bruce of Donington: My Lords, I am grateful to the noble Lord. Would he kindly explain to the House what he means by "a short term balance" or "a short term surplus" on the fund? From my information, the surplus seems to be quite a permanent factor over the years and has gone up by some £300 million in the current year or in the year under review. What does he mean by "a short term surplus"?
Lord Glenarthur: My Lords, perhaps I may return to that question in a moment becase it is a complex area and one in which I should like to be particularly certain that I give the noble Lord the right answer.
Reverting to the question asked about the use of children's piggy banks, which was raised by the noble Baroness, in the supplementary benefits scheme urgent need payments are made as a last resort under more stringent conditions than the normal benefit payments. All capital that can be made available in time to meet urgent need, including readily realisable childen's capital, is therefore taken into account. But the point is that this has always been the case. It is not anything new or something that has been introduced by the present Government. The fact is that the rules are different. When a claim for supplementary benefit under the normal or the urgent need provisions is made, the claimant is asked for details of any savings which he, his wife or his children have. So far as normal benefit is concerned, capital up to £3,000 is disregarded, but if the capital exceeds that figure, benefit is not payable. I should not like the noble Baroness to think that that is something new or something which is in any way unusual—
Baroness Jeger: My Lords, can the noble Lord make clear how it works? I appreciate his explanation; but if a child hides his money box under the bed, or lends it to his grannie, or something of that sort, how do the insurance officers find out? Is it only the honest parents who produce their children's money boxes who are penalised, while other children might go off and buy a stereo or, as I have said, hide their money? I am asking because I am worried about the officers concerned. How do they hope to go around finding out what has happened to childen's money boxes?
Lord Glenarthur: My Lords, I think that perhaps the noble Baroness reads rather too much into the report in the Standard. She quoted from it and I think it only fair that I come back on it. There tends to be an exaggeraton in all these things. I really cannot think that anyone imagines—and I am glad to see that the noble Lord, Lord Bruce, agrees with me—that people go around, crawling under beds, looking for piggy banks, or wondering whether or not a particular child, of whatever age, has spent on a stereo the money that he or she has saved. The fact is that it is something that has gone on for a long time and, in the general run of things, significant amounts of capital genuinely available have to be taken into account. I think that all this has been wildly exaggerated.
On the question of boarders, which I think was a point also raised by the noble Baroness, the proposal to amend the definition of "boarder" was withdrawn in the light of the comments made by the Social Security Advisory Committee. It is the Government's view that the current definition is too wide in its scope and that there is a good case for amending it. We shall be examining the possibilities further in the light of the committee's helpful comments. I hope that that is reassurance for her.
I revert to the question of the short-term surplus and why should not the contribution rates be reduced, which, I think was a point made by the noble Lord, Lord Bruce. Short-term surplus is a surplus for one year, as I understand it; short-term balance is a surplus over a number of years. Perhaps that answers that specific question that he asked. On the question of reducing the contribution rates, the aim of the Government, taking one year with another, is to maintain a balance on the fund. Surpluses or deficits are likely to occur from year to year, but we do not alter contributions in a year as a result.
The contribution rate was set last November. It will be reviewed again, for 1985–86, next November, and the surplus will be one of the factors to be taken into account at that stage. So far as what happens to the surplus is concerned, it is invested in Government stock and the interest credited to the fund. It therefore helps to finance the PSBR—
Lord Bruce of Donington: My Lords, may I come back on this? The noble Lord treats what he terms the long-term surplus with some lightness of hand. It is five and a half thousand million pounds. The short-term surplus, on his own statement, is some £932 million. Does he not think there is any scope at all for any amelioration as a result of this continually increasing surplus? I am well aware of the ordinary fiscal constraints imposed by the PSBR, which have a virtually nil correlation in relation to inflation, but I do not see why this should affect the issue at all, aside from a slavish adherence to an outworn theory concerning the nature of the PSBR.
Lord Glenarthur: My Lords, there is something to be said for being in credit rather than being in debt. The fact is, as I have said, that this is invested in Government stock. We have to maintain a balance in the fund. It is taken into account, as I said, when the rates are looked at. I agree that it is a highly technical area, and one in which the noble Lord, in his wisdom
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as an accountant, is much more expert than I am. The fact is that the amount of that surplus is looked at year on year when we look at the question of up-rating contributions. Having said that, I think I might leave that subject and turn to the Christmas bonus to which reference was made by the noble Lord, Lord Banks.
The payment of the Christmas bonus is now enshrined in legislation, which previously it was not, and, when it was convenient on a couple of occasions for the party opposite not to pay the Christmas bonus, then they did not pay it. In 1983 the cost was £109 million plus £1·1 million in administrative costs. A £20 bonus would cost £109 million and each £1 extra costs about £11 million. The cost is considerable but the bonus is not taxable. If we talked about increasing it in the way suggested by the noble Baroness it would mean that it would have to be taken into account when considering other benefits for perhaps more worthwhile and sensitive parts of the social security system.
The noble Lord, Lord Banks, referred to the FIS up-rating and asked why it should not be reviewed at a different time. There are expected to be about 210,000 families receiving family income supplement in November, and the assessment of their claims is staggered over a 12-month period. It is not a practical proposition to reassess all their incomes, in the way the noble Lord suggests, over the comparatively short period concentrated around the up-rating date. It would also be inconvenient and irritating for employers to receive a large number of inquiries about earnings over this period. The sensible alternative is to reinforce the general FIS rule so that awards run for 52 weeks based on income assessed at the date of claim.
Lord Banks: My Lords, is not the position at the moment that, with regard to up-ratings, this applies immediately during the year but under the orders will cease to do so? That was the point to which I was referring.
Lord Glenarthur: My Lords. if I have the noble Lord wrong. I will study his particular remarks and come back to him.
With regard to the gap between the older and younger pensioners—a point which was raised by the noble Lord, Lord Banks—this is a matter which the inquiry of my right honourable friend into the provision for retirement will be considering, and note will be taken of what the noble Lord has said and of other representations made on that topic.
On the question of the method of FIS up-rating perhaps I may return to the point made by the noble Lord, Lord Banks, as this may answer his question. He asked: why change the up-rating method now? The answer is, because of the pressure on public expenditure, the need for savings and because the present approach is out of line with the realities of a significant proportion of the cases. Therefore it is an area in which savings can be made without undue hardship. The noble Lord. Lord Banks, also asked about take-up for FIS. The latest official estimate is that about half of those eligible do claim FIS, and that is based on the Family Expenditure Survey conducted from January 1981 to December 1982.

1805
I turn now to the 5 per cent. abatement on invalidity benefit to which reference was made. On 10th March 1981 my right honourable and learned friend the Chancellor of the Exchequer stated that, in part because of pressures on Civil Service staff numbers, the plan to bring invalidity benefit into tax from 1982 was postponed. I have to say that no new date has been set. But my right honourable and learned friend has given an unqualified assurance that, when invalidity benefit comes into tax, the 5 per cent. abatement made at the 1980 up-rating would be restored. I do not think that I can go much beyond that.
The noble Lord asked what was the take-up for supplementary pensions. The answer is that it is estimated that the take-up in 1981 was around 70 per cent. I am sorry that these figures are rather out of date but we have to wait for more recent data before we can up-date them accurately. The noble Lord also asked whether it was correct that changes to the available scale margin will save £86 million a year. The total savings in a full year from changes to the available scale margin will be £86 million. The net savings in a full year, after taking account of the cost of new automatic heating additions for supplementary pensioners, will be £63 million a year.
The noble Lord asked about losses from housing benefit cuts in the last year. As I am sure your Lordships will appreciate, the relevant regulations concerned primarily with that are not before us today because they are subject to the negative procedure; but I can tell the noble Lord that, as a result of the April 1984 and November 1984 measures, about 2 million people will have lost an average of 91 p from the taper and minima rule charges. The average loss for pensioners is about 69p. The Government designed their proposal so that most people—about 4¾ million households, including 2¾ million pensioner households—will not be affected. Those on supplementary benefit and those with incomes below the needs allowance need not be affected by the changes.
Baroness Jeger: My Lords, would the noble Lord just make clear whether the figures he mentioned are per week? He referred to people losing 69p: is that per week?
Lord Glenarthur: Yes, my Lords, per week. The noble Lord, Lord Kilmarnock, inquired about unemployment benefit payments in arrears. The fact is that at the start of a claim most people have just finished work and they have money in their pockets. This change, with extra money at the end of the claim, will mean that fewer people need to claim supplementary benefit for deferred earnings. The only exceptions are people who are now over-paid, and they will lose the over-payments. So the only losses are the overpayments which are stopped. That is the meat of it, my Lords; at most, one week's benefit per person or about £45, and the average loss is likely to be around £15. The fact is that when a person starts his period of unemployment he is more likely to have money in his pocket than he is at the end of the period. That is why this change, which is essentially an administrative one, has been carried out.
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The noble Lord, Lord Kilmarnock, also asked about the child benefit regulations and the definition of full-time education, in the comments raised by the SSAC. Supplementary benefit is not an appropriate means of support for those who are continuing full-time education. It is therefore necessary to distinguish between committed students and young people who are genuinely seeking work who want to occupy their time constructively while doing so. The proposed definition is in terms of hours of supervised study, since a number of difficulties have been caused by the inclusion of homework within the 15 hours allowed. I hope that is a source of comfort to the noble Lord.
As to estate rate heating additions for those who pay a fixed charge rent, I should like to study the noble Lord's comments and write to him. The noble Lord asked about the 90,000 pensioners over 85 who will gain from an extension of heating additions and will receive only 5p extra, I think he suggested, and especially those with central heating additions. In fact, they will gain up to £2.60. As for the central heating addition, at the higher rate this will be £4.20 from November and the new higher rate, going automatically from November to the over-85s, will be £5.20 a week.
If I may revert to a question which the noble Lord, Lord Kilmarnock, asked about FIS take-up, in support of the noble Lord, Lord Banks, perhaps I can expand on that a little. As I said, the latest figure for take-up is 50 per cent. The take-up was lowest among those potentially entitled to less than £2 a week. The Government are disappointed at this figure, but have taken steps since December 1982 to improve the position, and from April this year have introduced a free-phone service which should help to improve recognition of in-work benefits.
I am sure that there are a number of questions which I have not answered, because there have been a great many to get through, but I shall certainly study what your Lordships have said. The noble Earl, Lord Longford, asked one particular question about pensioners, and referred to the increase in pensions since 1979. The cost of 716,000 additional pensioners was approximately £1 billion in 1983–84, but despite this we spent 6·6 per cent. more per capita in real terms on retirement pensioners in 1983–84 as compared with 1978–79.
So far as concerns the noble Earl's general point about the Government's policy towards a reduction in public expenditure, I stand by what I said. The growth in social security spending is considerable. It is important that the best targets (if that is the right overall term to use) receive the benefits which are available. Within the limits which we can all afford—because they must be paid for by somebody—we strive to eliminate waste wherever it occurs. The noble Earl referred to the elderly. The elderly are affected by many things including, for example, the National Health Service, though that goes wider than the subject that we are talking about today. But, as I said, we strive for efficiency in that and to eliminate waste wherever it occurs.
But the most important thing is that at last rampant inflation is under control, maintaining the real value of benefit for the elderly and for all those who need the

1807
care which the social security system can provide. It is one of the achievements which I think we can sincerely be proud of, and I hope that this situation will continue and be maintained, for only by controlling public expenditure in all its forms will we achieve what, in the end, will be best for the elderly as well as the younger members of society.
On Question, Motion agreed to.

Capital Transfer Tax Bill [H.L.]
Returned from the Commons agreed to with amendments.
House adjourned at twenty-two minutes before four o'clock.

  ARMITAGE REPORT: IMPLEMENTATION
  ARMITAGE REPORT: IMPLEMENTATION
  HISTORIC HOUSE MUSEUMS IN LONDON: MANAGEMENT
  HISTORIC HOUSE MUSEUMS IN LONDON: MANAGEMENT
  PRISONERS: MEDICAL OFFICERS' VISITS
  PRISONERS: MEDICAL OFFICERS' VISITS
  ALBANY PRISON: SUNFLOWER SEEDS
  ALBANY PRISON: SUNFLOWER SEEDS
  CABLE AUTHORITY: LICENCE APPLICATIONS
  CABLE AUTHORITY: LICENCE APPLICATIONS
  STOP AND SEARCH POWERS: CODE OF PRACTICE
  STOP AND SEARCH POWERS: CODE OF PRACTICE
  BIRDS: CONSERVATION
  BIRDS: CONSERVATION
  MEAT AND LIVESTOCK COMMISSION
  MEAT AND LIVESTOCK COMMISSION