Sitting of 18 June 1984

Preamble
The House met at half-past Two o'clock
PRAYERS
[MR. SPEAKER in the Chair]
PRAYERS
  PRIVATE BUSINESS AFTER PRAYERS
    PORTSEA HARBOUR COMPANY BILL
    Considered; to be read the Third time.
Oral Answers to Questions
  TRANSPORT

    Airline Competition Policy
    Mr. Colvinasked the Secretary of State for Transport if he has yet completed his review of the interim assessment of the consultation on airline competition policy conducted by the Civil Aviation Authority.
    The Secretary of State for Transport (Mr. Nicholas Ridley): The interim assessment contains some important ideas, but it would not be appropriate for me to comment on them as its purpose is to elicit comment from the British civil air transport industry and its users. The authority should report its conclusions on the review by mid-July.
    Mr. Colvin: I thank my right hon. Friend for that reply. I gather that the final report will be out soon. Does he accept that, because British Airways is comfortably into profit and well en route for privatisation, further competition with that company on its existing routes
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    would be healthy? Does he further accept that hiving off routes that have taken British Airways some 60 years to acquire and on which it competes with about 200 companies in international air transport would be very damaging to the prospect of BA's public flotation.
    Mr. Ridley: I join my hon. Friend in congratulating Lord King and his board on transforming the airline from a heavy loss maker to a high profit earner. I cannot, however, comment at this stage on my hon. Friend's views, because the matter is before the Civil Aviation Authority for review. We should like to hear everyone's views. I am the only one who cannot give views at this stage.
    Mr. Cartwright: How does the Secretary of State intend to allay the obvious fears of independent airlines that they are likely to be steamrollered by a newly privatised British Airways, which has been built up to its present dominant position by the investment of substantial public funds?
    Mr. Ridley: That concern is at the heart of questions put to the Civil Aviation Authority. We should await its views on those topics. I am sure that the House will then want to return to the matter in the light of the Government's decision, which will be based on the authority's views. They will be put forward next month.
    Mr. Soames: Does my right hon. Friend acknowledge that these are difficult times for the employees of British Air Tours and of British Caledonian Airways, both of which are in my constituency, because of the uncertainty that is hanging over them before the publication of the CAA report? Will my right hon. Friend be able to make a statement on the report before the summer recess?
    Mr. Ridley: Change always makes for uncertainty. One of the features of modern life is that change seems to be accelerating in almost every industry. I have sympathy with those who are affected, but that is not an argument against change. I do not know how the Government will handle the CAA report, and I have to reserve my position as to when we shall make it public and give our views. The report will be made public and the Government will give their views as soon as possible.
    Mr. Robert Atkins: Does my right hon. Friend recognise the contribution to the improvement in British Airways' operations that has been created by the activities of companies such as British Midland Airways, Britannia Airways and British Caledonian Airways in raising the levels of competition and of service to the customer? When he takes into account the views about the report that will come from a variety of people, will he recognise their genuine fears about the effects of British Airways' continuing monopoly in the market?
    Mr. Ridley: My hon. Friend and I stand absolutely together on the virtues of competition in this industry, as in others. That is why I am trying to introduce more realistic competition into the European airline market as well as into domestic routes. However, I am sure my hon. Friend will agree that competition must be not only free, but fair. That is at the heart of the problem that we have posed to the CAA.
    Mr. Prescott: Has the Secretary of State seen the report in Accountancy Age, which makes it clear that British Airways' interim accounts seem to have been massaged considerably, in the interest of share purchasers rather than taxpayers?
    Mr. Ridley: I have not seen that article, but I have taken all possible care to urge the British Airways Board to ensure that all its financial reporting is based on the most accurate figures possible.

    Cross-Channel Link
    Dr. Marekasked the Secretary of State for Transport when he expects to meet the French Minister of Transport to discuss the report on finance for a fixed cross-Channel link.
    Mr. Ridley: I am in regular contact with the French Minister of Transport, and I will have further discussions with him once we have both had time to consider the report and assess reactions to it.
    Dr. Marek: Although one accepts the Government's general policy on investment, does the Secretary of State realise that such a project needs Government encouragement and commitment? Will he do all that he can to ensure that, if agreement with the various parties is achieved, construction of the Channel tunnel link will be started as soon as possible?
    Mr. Ridley: We must give the interested groups a little time in which to come forward with proposals. However, if any group has proposals which do not involve either Government funding or guarantees of an economic or commercial nature, we shall certainly consider them sympathetically and try to assist. Nevertheless, the Government have made their position clear throughout, and are prepared to give only political guarantees and to assist with such things as treaties with the French and the maritime and other risks that might be involved in construction.
    Mr. Crouch: Before my right hon. Friend gives any thought to so much as one penny of taxpayers' money being spent on that cross-Channel fixed link, will he give a little thought to the negligence of the Department and Kent county council over the delay of no less than 18 months in building a proper flyover at the Barham crossroads on the A2?
    Mr. Ridley: I shall certainly look into that matter, although it does not arise from the original question, because, as I have said, the Government are not contemplating giving one penny of taxpayers' money to the construction of the fixed Channel link.
    Mr. Wilson: As one effect of the Channel link would be to create jobs in northern France and the south-east of England, would it not be right to give priority to the improvement of transport communications generally and the provision of a common transport subsidy? That would enable firms in Scotland, the north of England and Northern Ireland to take their goods to market in the EEC without facing the crippling cost of transport. Unless a transport subsidy is given, areas in the south will be aided, to our disadvantage.
    Mr. Ridley: The hon. Gentleman cannot have too much to complain about, as there is already a cross-Firth link in the Tay bridge which serves his part of Scotland. I am not at all sure that it would be right to give advantages in the form of money or guarantees to those who wish to provide a fixed Channel link as opposed to those who wish to provide ships and ferries to carry our trade across the Channel to Europe.
    Mr. Moate: Does my right hon. Friend realise that it is generally accepted that any Channel tunnel should be a genuine private sector project? However, at some point the decision whether or not to proceed must be political, and I am sure that at an early stage the Government will want to settle all the speculation and uncertainty that have continued for so long. Can my right hon. Friend give us any idea of the time scale involved in the political decision-making?
    Mr. Ridley: My hon. Friend is absolutely right in saying that it must be a private sector venture, and the Government will need to give it statutory treaty and access facilitation on this side of the Channel.
    Mr. Robert Hughes: What does that mean?
    Mr. Ridley: It means building the roads or railways that lead to the mouth of the tunnel. We have to do that. If any group suggests a project which is viable against Government criteria, we will assist. The private sector must come forward with fully developed plans before we can work out a time scale.
    Mr. Anderson: Can the Secretary of State spell out what he means by "we will assist"? Does he mean that in no case will the Government give financial assistance and that they intend to stand aloof from the project, even at the risk of its foundering yet again?
    Mr. Ridley: It means that it will be necessary to build either roads or railways to provide access to the English side of the link. It will be necessary to agree a treaty with the French and to examine the maritime and navigational risks to ensure that they are acceptable. It will probably be necessary to give a guarantee that the project will not be interrupted by political actions beyond the control of the promoters. Beyond that the Government are not prepared to go.

    M1. (Delays)
    Mr. Jannerasked the Secretary of State for Transport what steps he is taking to reduce the delay caused by roadworks on the M1 in the east midlands.
    The Minister of State, Department of Transport (Mrs. Lynda Chalker): All possible steps to reduce delays are being taken. Roadworks are carefully phased in relatively short sections with reasonable gaps in between. Delays generally occur only in peak periods after road traffic accidents.
    Mr. Janner: Is the Minister aware that eight deaths have occurred recently because of accidents on the M1 due to road works at contraflow areas? All of them were near Leicester and the latest was yesterday. How long will this terrifying toll of tragedy be allowed to continue? While it does continue, will the Minister warn motorists to exercise extra care in contraflow areas and to keep a much greater distance behind other vehicles, including mine?
    Mrs. Chalker: I much regret the deaths that have taken place. The hon. and learned Gentleman is right to say that many accidents occur because motorists go through a contraflow section at too great a speed. Warning speed limits of 50 mph are posted. Motorists also bunch up far too closely behind the vehicles in front. Whenever that happens, there is a grave danger of an accident and, therefore, of personal injury. In every press notice that I have put out in the past two and a quarter years I have warned about the need to keep a fair distance behind the vehicle in front and for motorists to obey the warning instructions. I hope that motorists will take heed of this awful death toll.
    Mr. Higgins: Is the limit to which my hon. Friend refers legally enforceable? Will she clarify the position, because there is some doubt whether speed limits on rather unofficial-looking signs are enforceable?
    Mrs. Chalker: The speed limit written in black on a white background with a black border is advisory. Before one can introduce a speed limit on any road, one must apply for orders. An objection period is necessary and the whole process could take longer than the road works to which it applies. I have asked officials if there is any other way of enforcing such a speed limit, but I have not yet found one.

    Pensioners' Fares (London)
    Mr. Gouldasked the Secretary of State for Transport what response he has had from the London boroughs to his plans for a concessionary fares scheme for London pensioners.
    Mr. Ridley: The London Boroughs Association has welcomed the provision in the London Regional Transport Bill of a statutory reserve travel concession scheme. It has also agreed the principle of a voluntary joint scheme, based on the existing one, and is working out the details.
    Mr. Gould: Does the Secretary of State recognise that the remarkable swing to Labour in London's EEC elections represents not only a satisfactory pricking of the alliance parties, but is a clear and unmistakable rejection by Londoners of the Government's attacks on their rights?
    Mr. Speaker: Order. The question relates to concessionary fares.
    Mr. Gould: Does the Secretary of State now expect Tory-controlled boroughs in London and London Tory Members of Parliamemt, who are now living on borrowed time, to heed the electoral warning, and will he and his colleagues do likewise?
    Mr. Ridley: I agree with you, Mr. Speaker, that the European elections have no relevance to the future of the concessionary fares scheme in London. It is indicative of the Opposition's view of the matter that they should want the future of Europe to be fought on the battlegrounds of domestic legislation for London. It is typical of the Labour party, for that is the length and breadth of its vision on the great topic of Europe.
    Mr. Tracey: Does my right hon. Friend intend to accept the amendment tabled in another place, which seeks to extend concessionary fares to the evening period?
    Mr. Ridley: We do not intend to overturn the amendment on evening peak travel. Their Lordships are well aware that they have deliberately left in the relevant clause of the Bill power for London Regional Transport to change the timings without my approval or that of the House and to reinstate the eyeing period, if desirable.
    Mr. Cartwright: In the light of recent court cases, is the Secretary of State confident that the London Boroughs Association and the Association of London Authorities will sink their political differences and co-operate in negotiating the best possible concessionary fares scheme for London's pensioners?
    Mr. Ridley: The latest information is that they are more or less agreed on a scheme which closely resembles existing provisions for concessionary fares, and are working on the details now. I hope that they will succeed, because I have always been reluctant about the use of the reserve powers in the Bill. It would be better if the local authorities could agree. I wish them well.
    Mr. Parris: If the Government do not abolish the GLC, will my right hon. Friend nevertheless take London Transport under his wing?
    Mr. Ridley: Yes, Sir, and very soon.
    Mr. Prescott: Does the Secretary of State's statement mean that although the House refused to include peak time travel in the pass for pensioners, which was, however, included in the other place, his guarantee that pensioners will not be worse off than before means nothing, because London Transport can change the hours? Will that system be introduced?
    Mr. Ridley: Yes, that is the present position. The GLC can change the hours without statutory procedures, and London Regional Transport will also be able to do so.

    Road Signs (Advertising)
    Sir Anthony Meyerasked the Secretary of State for Transport whether he will encourage the introduction of commercial advertising into road signposting.
    Mrs. Chalker: No, Sir. The introduction of commercial advertising would conflict with the primary purpose of traffic signs, which is to assist road users to get to their destination in safety.
    Sir Anthony Meyer: That is a most disappointing answer. Will my hon. Friend encourage the officials in the Department, who, if anybody, are responsible for signposting in its present spasmodic and misleading form, to visit France, where they manage to combine commercial advertising with excellent signposting both in the cities and on the open road?
    Mrs. Chalker: I know that my hon. Friend is enamoured of French signposting. In Britain, we have in the past followed the august reports of a number of bodies. I have put in hand for Kent, and later for Nottinghamshire, two experiments to sign interesting historic places by means of white on brown signs, similar to those in France, of which my hon. Friend has spoken so favourably. We shall monitor those experiments and see what more can be done to ensure that those places offering objects of historic interest are made attractive and known to the road traveller.
    Mr. Freud: Before the Minister overdoes her encouragement of signposting to places of historic interest, will she bear in mind that most towns and villages are inadequately signposted? As a priority, will she look at the American system, in which all motorway exits signpost what happens if the motorist leaves at that exit, what happens when he reaches the next exit, and the distance to it?
    Mrs. Chalker: The hon. Gentleman knows that much of the signposting for towns and villages is the responsibility of county councils. However, I note what he says about displaying on the signpost exactly how far the next exit is. Our problem is that the more words we put on a signpost, the longer the motorist's attention will be distracted. I do not wish to do anything that might increase accidents, such as putting too much on signs or having too many of them.
    Mr. Coombes: Is my hon. Friend aware of the growing amount of graffiti on road safety notices, especially on motorways, in connection with pressure groups such as CND? Is she worried about this developing tendency, and does she have plans to combat it?
    Mrs. Chalker: Anyone who gets within sufficient distance of a signpost to obliterate part of it or to damage it in some other way is breaking the law by being on the side of the motorway at that point. Officials of the county councils, which are the highway authorities which look after those matters for us, seek to remove such graffiti as quickly as possible. However, it is becoming increasingly expensive to do so, and we must consider how we can make signposts less vulnerable to such attacks.
    Sir Anthony Meyer: On a point of order, Mr. Speaker. In view of the unsatisfactory nature of the reply, I give notice that I shall seek to raise this matter on the Adjournment.

    London (Road System)
    Mr. Chapmanasked the Secretary of State for Transport if he is satisfied with the level of investment by his Department in the road system in the Greater London area.
    Mr. Ridley: London is receiving considerable benefit from the Government's first priority in its road programme—the completion of the M25. Within Greater London we are already planning to spend more than £700 million during the next 10 years or so.
    Mr. Chapman: Does my right hon. Friend agree that, by any criterion, there has been gross under-investment in the capital's road system during the past 15 years? With the completion of the M25, does he agree that there is a case at least for a minimum new road-building programme
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    to remove traffic from environmentally sensitive areas, to improve road junctions and to increase the number of traffic management schemes?
    Mr. Ridley: I entirely agree with my hon. Friend. The evidence of our doing so is the figure that I mentioned of more than £700 million which we are planning to spend on London's roads within the next 10 years, apart from the M25. That motorway should take out of London traffic that need not be there, and we must then cater for the traffic that has business in London in an environmentally sensitive way as well as expediting the flow of traffic.
    Mr. Jessel: Does my right hon. Friend believe that any of his Department's investment in Greater London has been wasted by the GLC scheme to squeeze the capacity of traffic on the A4 at Cromwell road and Talgarth road, in which the Department has invested a considerable sum of taxpayers' money?
    Mr. Ridley: If one wished to discourage traffic from entering central London, and to encourage people to use public transport, the GLC's method of doing so at Talgarth road is an object lesson of how not to achieve one's aims. The concept was mistaken from the beginning and the GLC must urgently find a way to allow traffic to flow on the A4. I have urged it constantly to do so, but so far the response has been inadequate.

    Royal Docks
    Mr. Spearingasked the Secretary of State for Transport what consultations he has had with the Port of London Authority concerning continued access of oceangoing vessels to the royal group of docks.
    The Parliamentary Under-Secretary of State for Transport (Mr. David Mitchell): None, Sir.
    Mr. Spearing: Is the Minister aware that, despite its statutory responsibilities, the Connaught cut swing bridge in the royal docks cannot now be swung? Will he assure the House that the Port of London Authority will neither hinder nor prevent any future cargo operations in the royal docks, if only for the reason that more shipping in the Thames would provide it with more revenue?
    Mr. Mitchell: That is a matter for the PLA; but as there is substantial under-utilisation of alternative facilities at Tilbury and on the river, which are within the PLA area, it is highly unlikely that there would be a demand at that spot.

    Airline Tickets
    Mr. Gregoryasked the Secretary of State for Transport what recent consultations he as had on reducing prices of airline tickets from London to major French airports; and if he will make a statement.
    Mr. David Mitchell: We are pressing for the liberalisation of air fares on all European routes, and we warmly welcome the proposals for lower, more competitive, fares which are now coming forward from our airlines.
    Mr. Gregory: I welcome the initiatives taken by the Government to reduce air fares. Does my hon. Friend know of any proposals by British companies in this area?
    Mr. Mitchell: I am pleased to be able to tell the House that British Caledonian Airways is today announcing a

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    new initiative on European fares, which includes an off-peak one-way fare to Paris of £35, which is almost half the existing fare. We look forward to discussing British Caledonian Airways' proposals with the French and other Governments involved.
    Mr. Wilson: As many passengers flying to the Continent must do so by going through London airport at exorbitant additional cost, should not a greater Government priority be the introduction of inter-regional or international lines between other parts of the United Kingdom and the Community countries in order to cheapen the cost of transport, which at present is hideously expensive?
    Mr. Mitchell: We have already made it easier for interregional airport traffic to take place under an EEC directive. The problem is that not sufficient people wish to travel on those routes to make them commercially viable. We are seeking to introduce greater competition on the major routes, which should result in a significant improvement in service and a reduction in fares.
    Mr. Prescott: Is the Minister aware that the last initiative on cheap air fares by B-CAL and the Amsterdam groups, launched by the Secretary of State during the Euro-elections as something of a gimmick, has now run into the ground? Is he also aware that it has been rejected particularly by people in London, who hear the Secretary of State calling for cheap fares on aeroplanes while doing everything he can to increase fares for ordinary people on trains and buses?
    Mr. Mitchell: Far from my right hon. Friend's initiative having run into the ground, he is meeting the Dutch Minister at The Hague this Wednesday, and I am hopeful that he will succeed in completing the current negotiations.

    Divers (Insurance)
    Mr. Boyesasked the Secretary of State for Transport if he will introduce legislation to ensure that all divers are adequately insured by the company for whom they work.
    Mr. David Mitchell: Divers working from United Kingdom ships within United Kingdom waters are already covered. I am consulting about the need to extend cover elsewhere.
    Mr. Boyes: I assure the Minister that my question is based on a real case in which the diver died and his widow received a letter saying that the company had no collective insurance for either accident or death. Can he give an absolute assurance that if measures are introduced they will include foreign divers, as many British divers are resentful of the increased percentage of foreigners working in British waters because of the additional costs to companies of employing British divers? If foreign divers are not included, it would make a British diver even more costly to employ.
    Mr. Mitchell: I shall cover the hon. Gentleman's general point in the consultations to which I have referred. On his specific case, if he will write to me I shall look into it further. There is, of course, a liability on an employer within United Kingdom waters to insure against employer's liability, but in a highly paid profession it rests on the man to insure himself against an accident as opposed to relying on employer liability.

    British Rail (Industries Relations)
    Mr. Ron Lewisasked the Secretary of State for Transport when he next expects to discuss industrial relations in the railway industry with the chairman of British Rail.
    Mr. Ridley: I next plan to meet the chairman of British Rail on 2 July as part of our regular schedule of meetings. There is no formal agenda for these meetings, but if the chairman wishes to raise the subject of industrial relations I will, of course, be happy to discuss it with him.
    Mr. Lewis: Is the Secretary of State aware that as much as 70 per cent. of railway workers still receive basic rates of pay that are well below the levels advocated by the low pay unit? Is he further aware that, even after his helpful intervention with British Rail, a railwayman's basic rate of pay is now about £76? When the right hon. Gentleman next meets the chairman, will he do all he can to try to sort out the scandal of low pay in British Rail?
    Mr. Ridley: The hon. Gentleman knows that the precise nature of the pay agreement between British. Rail and its employees is for the board to negotiate. Moreover, in this particular instance, the total of the cost of the pay award was proposed by the British Rail chairman, and the Government did not intervene. I am not saying that that is a rule on all such occasions, but in the particular instance to which the hon. Gentleman refers, there was no interference by the Government.
    Mr. Gregory: In his forthcoming discussions with the chairman of British Rail, will my right hon. Friend look into the possibility that four of the six points relating to productivity that were discussed and agreed in principle with the unions in 1981 have still not been complied with and were not made a contractual part of recent negotiations?
    Mr. Ridley: Despite reports in the press, the recent settlement included four points on productivity. The unions accepted the principle of driver-only operation on the Bedford-St. Pancras line. They accepted that British Rail would bring forward extensions of driver-only operation on passenger trains within the negotiating machinery with the aim of introducing them from 1985 onwards. They agreed to resume driver-only operation trials for freight trains between Willesden and Garston. They also agreed to resume negotiations on the extension of single manning on the footplate. Those substantial improvements in productivity were included in those negotiations.
    Mrs. Dunwoody: As the Prime Minister has shown herself only too willing to intervene in the affairs of British Rail, will the Secretary of State ask her whether she would like to insist that, in future, railwaymen will not be required to work on average 12½ hours' overtime because of their appalling rates of pay, but that they should be paid at a rate that makes that unnecessary?
    Mr. Ridley: We do not on the whole interfere in the details of pay negotiations. Such a question is rich from the hon. Lady, when the Government of whom she was a member controlled every detail through a statutory pay policy, with pay clauses, and who controlled pay in the nationalised industries by statute enacted by the House.
    Mr. Forman: Is my right hon. Friend aware that it is not only industrial relations questions that he is right to

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    discuss with the chairman of British Rail? Will he also discuss with him the apparent shortage of guards in that part of south London covering my constituency, which has caused many problems for rail travellers to and from my constituency?
    Mr. Ridley: I note what my hon. Friend says, but perhaps he will agree that it would be better if he were to discuss that with the chairman of British Rail rather than me, if we are to maintain the proper relationship between the railways' responsibility and mine.
    Mr. Prescott: Will the right hon. Gentleman comment on the fact that he has just laid before the House an order giving the chairmen of the nationalised bus and rail industries an increase from £50 a week to £95 a week, which should be compared with the average of £5 a week that he intervened to give British Rail workers?
    Mr. Ridley: The hon. Gentleman will know that that is a simplistic point. He must discuss each increase on its merits. For instance, the chairman of British Rail had no increase at all. Some of the members of the boards to which he referred are working more days a week and others are being given an increase on merit because they perform very satisfactorily.

    French TGV Trains
    Mr. Adleyasked the Secretary of State for Transport if he will assess the performance achieved by, and investment involved in, the French TGV trains with a view to seeing what lessons can be learnt in the United Kingdom from French experience; and if he will make a statement.
    Mr. David Mitchell: I have followed the development of the TGV with interest and I have travelled on it myself. But I believe the most cost-effective and successful way to improve high-speed rail travel in this country is fully to exploit our existing routes, rather than to build new ones.
    Mr. Adley: Does my hon. Friend accept that if we had invested rather more on the APT than the one twentieth of the sum that the French have spent on the TGV we could have precisely what he suggests—a train that can travel at those speeds without having to build new railways? Are the Government planning to do anything to fund BR's investment programme in new technology?
    Mr. Mitchell: That is a matter for British Rail. The APT will come into service shortly on an experimental basis. It should be remembered that BR runs more trains at over 100 miles an hour than does France.
    Mr. Ron Lewis: When the experiment that the Minister talks about starts up, will he ensure that the train makes a number of stops between London and Glasgow, including Carlisle?
    Mr. Mitchell: No, Sir. I should not wish to interfere in the detailed management of British Railways.

    Rural Bus Services
    Mr. Dobsonasked the Secretary of State for Transport what action he is taking to encourage the provision of rural bus services.
    Mr. Ridley: I am giving weight to the need to improve rural transport in my current review of policy on road passenger transport. I hope to make an announcement shortly.
    Mr. Dobson: Does the Secretary of State recognise that he will have an awful lot of encouraging to do if he is to return the number of bus-passenger miles in rural bus services to the 1979 levels, bearing in mind that the National Bus Company alone has reduced its bus-passenger miles by more than 90 million a year?
    Mr. Ridley: The hon. Gentleman is wrong. It is the passengers who have reduced the number of bus-passenger miles, not the National Bus Company.

  ATTORNEY-GENERAL

    Student Unions
    Sir William van Straubenzeeasked the Attorney-General what recent representations he has received, following the issuing by him of guidance to higher education institutions about the limitations on the use of their student union's funds in the furtherance of political purposes, that the guidance is not being complied with; and if he will make a statement.
    The Attorney-General (Sir Michael Havers): I have received a number of representations that expenditure has been incurred by student unions in breach of trust. These cases are being investigated. If the allegations are substantiated I shall consider whether to take legal proceedings against those responsible. I should add that if, as a result of such proceedings, the court finds that a breach of trust has occurred, it could hold those responsible for authorising the expenditure personally liable to repay the money and could order them to pay the costs of the proceedings.
    Sir William van Straubenzee: I am obliged to my right hon. and learned Friend. Am I correct in understanding also that, assuming that payments are so made from a student union fund which is a charity, additionally it might be that those receiving money would be liable to repay it, knowing that it comes from a charitable source? Does my right hon. and learned Friend understand that he will have trenchant support for seeking to ensure that money given willingly by the ratepayer and taxpayer for educational purposes is not used to finance violence of the kind that we have seen this morning?
    The Attorney-General: My right hon. Friend is right. Where breaches of trust are established it is open to me to take whatever action I consider appropriate to recover the money improperly applied. This may include tracing the money in the hands of any person who has wrongfully received it.
    Mr. Dobson: Is the Attorney-General seriously suggesting that this is the highest priority for him and his staff? Would he not do better, for instance, attempting to track down the witness in the murder case at King's Cross who disappeared this time last year and has never been tracked down by his office——
    Mr. Speaker: Order. I do not think that that has anything to do with the question.
    The Attorney-General: There are no police offices involved in any of these investigations. They are entirely the responsibility of the Treasury Solicitor. This subject got first priority today because it was the first question.
    Mr. Lawrence: Since what my right hon. and learned Friend said has been the law for a long time, and no doubt the care with which that law is enforced has also been observed for a long period of time, is it not somewhat remarkable that money should still be being voted by student unions to striking miners who are behaving unlawfully, and to such organisations as the English Collective of Prostitutes? Is it not clear that my right hon. and learned Friend is not doing enough to bring home to the leaders of student unions precisely what the state of their indebtedness will be if they carry on behaving as unlawfully as this?
    The Attorney-General: It is perfectly right that I am not likely to know about breaches unless they are brought to my attention. Usually a breach is brought to my attention by a student. The guidelines that I published some time ago have been widely circulated. There is little more that I can do save say to my hon. and learned Friend that when these matters are reported to me, the Treasury Solicitor makes careful inquiry. A number of cases have received a lot of publicity in the past few weeks, and all are in the process of investigation.

    Coal Industry Dispute
    Mr. Canavanasked the Attorney-General whether he will meet the Director of Public Prosecutions and chief constables to discuss criteria for prosecutions arising out of incidents during the miners' strike.
    The Attorney-General: No, Sir. Offences of the kind so far involved do not have to be reported to the Director of Public Prosecutions, but I am confident that the police abide by the guidelines which I published last year describing the general criteria for prosecution. There are no special criteria for prosecution.
    Mr. Canavan: In view of the grave public concern about the paramilitary behaviour of the police, such as in today's incident at Orgreave, will the Attorney-General confirm that the policing strategy to be used during the dispute was decided well in advance at a meeting held way back in February between himself, the Home Secretary and the chief constables? Is it not about time that this Tory Government stopped using the police for the blatant political purpose of waging a vendetta against the National Union of Mineworkers?
    The Attorney-General: I attended no such meeting. The hon. Gentleman speaks of paramilitary behaviour, but those of use who listened to "The World at One" today heard of 5,000 so-called pickets. They are not. They are demonstrators and rioters. At the end of this incident, the whole road was littered with lumps of concrete, stones, bottles, and bricks taken from a wall demolished by the people whom the hon. Gentleman supports. If that is what he considers unfair treatment by the police, the hon. Gentleman should think again and realise that the paramilitary behaviour, which is military behaviour when it should not be, comes from those whom he supports, not from the police.
    Mr. Nicholls: In any talk about guidelines and criteria, will my right hon. and learned Friend remember that the
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    recommendation of the National Union of Mineworkers and the TUC on the number of pickets necessary to constitute a peaceful picket is six, and not 6,000, as are being used at the moment in the sort of incident about which we have heard complaints?
    The Attorney-General: My hon. Friend is right. Six is a reasonable number. I remind the House of what is the right of a picket—to obtain or communicate information or seek to persuade a man not to go through the line. That is all. What we have seen today, and today is perhaps one of the worst occasions that we have had, is so far removed from that that even the thought contained in the rule that has just been expressed by my hon. Friend is made nonsense of by what is going on on the front line, as it has now become.
    Mr. Spearing: Is the Attorney-General satisfied that the action taken by the Kent police at the Dartford tunnel some time ago was within the guidelines to which he has just referred? If the people concerned had persisted in going through the tunnel, under what charge would they have been prosecuted?
    The Attorney-General: If they had persisted in going through the tunnel, they would have been arrested for obstructing the police in the course of their duty. Whether that was a proper distance from the pits or not is not a matter for me, but for the courts, if they have to decide it.
    Mr. Ashby: Are not the large numbers of people who have been assembling riotously, as they did today, the real problem? Should we not re-enact something like the Riot Act, which dealt with the problem of large assemblies and dispersing them? Is that not the right way to deal with the problem?
    The Attorney-General: In September 1982 the Law Commission recommended a new type of unlawful assembly, which was to be divided into three parts, ranging from the very serious one, with behaviour such as that which obviously occurred today, down to a lesser degree, and in particular giving the option of trial by magistrates if it were agreed by both sides. One of the problems about the more serious offences of riot and unlawful assembly is that they can be tried only on indictment and therefore there is a considerable delay before the cases are heard.
    Mr. Alex Carlile: Will the Attorney-General advise the Prime Minister that one of the likely consequences of the present serious situation will be a series of long, acrimonious and divisive court cases arising from the miners' strike, and will he also advise her that the time has now passed for covert Government intervention and that we have reached a stage at which overt Government conciliation of the dispute should take place?
    The Attorney-General: If what the hon. and learned Gentleman is suggesting is that, because this is criminal conduct involved in an industrial dispute, there should be a different mode of dealing with it, I disagree. As to the remainder of his question, that does not fall within my remit as Attorney-General.
    Mr. Spencer: Does my right hon. and learned Friend agree that, in the light of the worst violence yet at Orgreave, the only thing to be done with the criminal law is to enforce it?
    The Attorney-General: The enforcing must be left initially to the police. There is no way in which the Government or any other Department should seek to influence the police as to how they conduct their operations on the ground. Once they have arrested it is a matter for the courts, but I think that it is very much to the credit of the police that, in the 12 to 13 weeks that this has been going on, the number of arrests overall in 20 different police forces amounts to fewer than 3,000.
    Mr. John Morris: Can the Attorney-General explain his role in the Government's preparation for the miners' strike? Was he consulted by the Secretary of State for Transport in the instruction given to the chairman of British Rail to avoid approaching the Attorney-General's office? What part of his duties could conceivably arise in connection with the instructions of the Secretary of State for Transport?
    The Attorney-General: I shared the right hon. and learned Gentleman's surprise when I read that passage, and I had inquiries made. There is a simple answer. The remit of the Attorney-General does not allow him to advise students, any private organisation, or even nationalised industries, and this had been made clear at a previous meeting. Therefore, although badly worded, the intention was, "Do not think that you can go and get the advice of the Law Officers—they are not entitled to give it to you." What appeared so sinister was in fact as simple as that.

    Judiciary (Training)
    Mr. Spencerasked the Attorney-General if he is satisfied with present arrangements for training both full-time and part-time members of the judiciary in their judicial functions.
    The Solicitor-General (Sir Patrick Mayhew): It is thought that a suitable foundation has now been laid for the training of all full-time and part-time judges of the crown court. There is an unmet need for formalised training of those who sit in the civil and family jurisdictions. This is at present under consideration.
    Mr. Spencer: Can my right hon. and learned Friend give us an idea of when the present system will be extended to civil and matrimonial courts?
    The Solicitor-General: The Judicial Studies Board, which has been in existence for slightly more than four years, has so far concentrated upon the criminal jurisdiction. It is too early to say when my right hon. and noble Friend the Lord Chancellor will extend it to civil and matrimonial matters. The matter is under consideration, but at the moment I cannot be more helpful.

  OVERSEAS DEVELOPMENT

    Grenada
    Mr. Spearingasked the Secretary of State for Foreign and Commonwealth Affairs what progress has been made in improving public water and electricity supplies in Grenada with aid from the United Kingdom.
    The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Mr. Ray Whitney): My right hon. Friend the Minister for Overseas Development is attending a meeting abroad, and is sorry that he is unable to be present. I have been asked to reply.
    Projects worth £180,000 and £185,000 have been approved for spare parts for the electricity sector and the water sector respectively. A further power project for the supply and installation of a new diesel engine has also been agreed at an estimated cost of over £300,000.
    Mr. Spearing: I thank the Minister for that information, but does he agree that there has been some delay in these matters, and will he examine it? Does he also agree that, in the aftermath of disaster or war, the restoration of public water supplies and electricity supplies is always, or often, a priority? Is not Britain in a good technical position to assist with that, and should not his Department or the Overseas Development Administration be geared up to deal with this as a first priority?
    Mr. Whitney: I well understand the concern of the hon. Gentleman, and I assure him that the overseas development division in Barbados has given the highest priority to the part that it can play in the restoration of water and electricity supplies. Indeed, the overseas development division has paid no fewer than 15 visits during the past six months. The progress that it can make depends also on co-operation with the local authorities.
    Mr. Bowen Wells: Is it not a fact that the contract for the replacement of the No. 7 engine in the power station in Grenada, which was out of action at the time of the intervention in October, has still not been put out to tender, and a firm order has not yet been placed for it? Through this delay, and through the Overseas Development Administration insisting on its full tendering system, the price of that replacement engine to Grenada has thereby been increased, thus making the Grenada power supply much less secure in the very insecure situation in the island, and putting up the price of electricity in the long run? Surely this is an occasion when the ODA should have acted much more swiftly and effectively?
    Mr. Whitney: I understand my hon. Friend's concern. The project for the No. 7 generator has, indeed, been the subject of careful negotiations. Detailed specifications have been drawn up and tender documents are being prepared. I understand that the new engine will be commissioned towards the end of 1984.

    Aid
    Mr. Chapmanasked the Secretary of State for Foreign and Commonwealth Affairs what proportion of United Kingdom Government's overseas aid goes direct to recipient countries; and what proportion goes via international or multinational agencies.
    Mr. Whitney: In 1983, 59 per cent. of British aid was given bilaterally, mostly on a Government-to-Government basis, and 41 per cent. went through multilateral institutions.
    Mr. Chapman: Does my hon. Friend agree that, in the generality of these things, it is far more effective for British aid to be given after direct negotiations with the Government of the recipient country than through multinational agencies? If that is so, and bearing in mind the fact that there is a role for British aid through such

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    agencies, does my hon. Friend agree that it would be greatly to the benefit of recipient countries if aid was provided direct?
    Mr. Whitney: In general we wish to give priority to our bilateral aid programmes, but, as my hon. Friend will recognise, we have extensive multilateral commitments.
    Mr. Rhodes James: Is my hon. Friend aware that my hon. Friend the Member for Chipping Barnet (Mr. Chapman) is totally wrong?
    Mr. Whitney: It is difficult for me to enter into a debate between my hon. Friend the Member for Cambridge (Mr. Rhodes James) and my hon. Friend the Member for Chipping Barnet (Mr. Chapman). However, it is true that we get good returns on bilateral aid and on multilateral aid. As is revealed by my hon. Friend's question, the computation of those returns is a somewhat complex art.
    Mr. Stuart Hollandasked the Secretary of State for Foreign and Commonwealth Affairs if, following the discussions on economic recovery at the London summit, he intends to bring about any changes in the volume or the use of British aid.
    Mr. Whitney: The Government's current plans for the aid programme take account of the global economic situation. We shall continue to explore ways by which aid can make a more effective contribution to solving the problems facing developing countries.
    Mr. Holland: By that, does the Minister mean that "the global economic situation" explains what is meant by "wherever possible" in the post-summit communiqué, which declared the intention
    "to maintain and wherever possible increase flows of resources, including official development assistance"?
    Is he aware that increasing official development assistance to 0·7 per cent. of gross domestic product would be of almost inestimable value to the South and could create 2 million jobs in the OECD countries? Was the Prime Minister among those who wished to activate a common fund for commodities? If not, why not?
    Mr. Whitney: The hon. Gentleman goes down familiar paths. The important thing that has been agreed at the summit and in previous ones, including those attended by the right hon. Member for Cardiff, South and Penarth (Mr. Callaghan) when he was Prime Minister, is that the key to recovery is keeping public expenditure under control so that the recovery of national economies will permit an increase in world trade. The vital significance of world trade for developing economies should be recognised by all of us. The hon. Gentleman will understand that we have not abandoned the aspiration to the 0·7 per cent. target, but he will remember that the Labour Government remained well short of that target as well.
    Mr. Holland rose——
    Mr. Speaker: No.
    Mr. Teddy Taylor: Would not economic recovery in the Third world be helped more if, instead of increasing
    18
    the percentage of aid, the Government tried to persuade the EEC to stop spending £100 million a week on dumping food on the world market, thereby depriving Third world countries of a decent and fair return on their agricultural produce?
    Mr. Whitney: My hon. Friend will be aware of the significant efforts of my right hon. Friends to reform the budget and, as part of it, the common agricultural policy.
    Mr. Tom Clarke: Bearing in mind that this is a familiar road, did the Government say at the summit when they expected to achieve the 0·7 per cent. target? If not, will the Minister tell us now?
    Mr. Whitney: No, Sir. As I said in reply to the hon. Member for Vauxhall (Mr. Holland), it is important to restore the economies of the developed and developing world. I draw the hon. Gentleman's attention to the fact that, for many years, Britain has exceeded the United Nations target of joint private and official aid flows of more than 1 per cent. of gross national product.

    IDA and World Bank (Resources)
    Mr. Jacksonasked the Secretary of State for Foreign and Commonwealth Affairs whether the resources available to the International Development Association and the regional affiliates of the World Bank are adequate for their immediate requirements; and if he will make a statement.
    Mr. Whitney: In the Government's view, the seventh replenishment of IDA's funds at a level of US $9 billion which has just been approved by the World Bank executive board, is inadequate to meet the needs of poor countries and we have indicated our willingness to contribute to supplementary funding to bring the total nearer the $12 billion which most donors thought appropriate.
    Mr. Jackson: I thank my hon. Friend for that answer. Does he agree that the Government deserve congratulations on the part that they have played in endeavouring to ensure that loan finance is provided on an expanded basis through the IDA to the most needy parts of the Third world?
    Mr. Whitney: I am happy to accept those congratulations and I shall certainly pass them on to my right hon. Friend.
    Mr. Budgen: Would a common fund for commodities be rather like the CAP on a world-wide basis?
    Mr. Whitney: My hon. Friend points to a danger of which all of us who are considering the project should be well aware.
    Mr. Bowen Wells: On what conditions will Britain make the additional money available to IDA? Is it contingent upon the contribution of the United States and other countries?
    Mr. Whitney: The supplementary fund is a matter for negotiation. We are closely in touch with all other donors, especially Japan and the Federal Republic of Germany. I think that, at this stage, I can go no further than that.

Mr. Speaker's Statement (Members' Complaint)
3.30 pm
Mr. Speaker: I have a brief statement to make. I have to inform the House that my attention has been drawn by three hon. Members, namely, the hon. Members for Twickenham (Mr. Jessel), for Ilford, South (Mr. Thorne) and for Surbiton (Mr. Tracey) to words spoken by the hon. Member for Newham, North-West (Mr. Banks) during the debate on the Greater London Council (Money) (No. 2) Bill on Tuesday 12 June indicating an intention to restrict the provision of new services in the constituencies of any Members m the Greater London council area who voted in favour of the instruction to the Committee on the Bill standing on the Order Paper in the name of the hon. Member for Enfield, Southgate (Sir A. Berry).
I am satisfied that this is a matter to which I ought to allow precedence: and accordingly the hon. Member for Twickenham, whose letter of complaint was received first, may table a motion at the commencement of public business tomorrow and which the House will decide.
Mr. Harry Greenway: On a point of order, Mr. Speaker.
Mr. Speaker: No point of order can arise on my statement. Is it a different point of order?
Mr. Greenway: You will remember, Mr. Speaker, that towards the end of the last Parliament the leader of the GLC made similar remarks to those——
Mr. Speaker: Order. I said that there can be no point of order on the matter. I have made a statement on it.

Social Security Benefits (Uprating)
3.32 pm
The Secretary of State for Social Services (Mr. Norman Fowler): With permission, Mr. Speaker, I should like to make a statement about the annual uprating of social security benefits which will take effect in November. Under the Social Security and Housing Benefits Act 1983, I am required to review the level of various benefits each year, having regard to the movement in the general level of prices in the 12 months up to 31 May. The retail price index for May was published last Friday and it showed a rise of 5·1 per cent. in the year May 1983 to May 1984.
As the House will know, the Government are pledged to maintain the value of pensions. Accordingly, those benefits which are revalued by the increase in the retail price index will rise by 5·1 per cent. This increase will apply not only to the pledged benefits but to the unpledged benefits, like unemployment benefit.
The 5·1 per cent. increase compares with the forecast of inflation of 4·5 per cent. for the last quarter of the year when the uprating will take place. This means that the historic method of uprating—which was introduced to replace the inaccurate forecast method of the last Government — has worked fairly for pensioners and other beneficiaries.
Supplementary benefit is increased by the rise in the retail price index, less housing costs, which are paid in full. This gives a figure of 4·7 per cent. and, again, this will be paid in full.
I should like to mention briefly the main groups who will benefit from the increases in November. First, pensioners. The standard basic rate of pension for retirement pensioners will go up to £35·80 for a single person and £57·30 for a married couple. This means that between November 1978 and November 1984, pensions will have risen by 83·6 per cent. compared with an expected rise in prices of 76·4 per cent. We will also be taking a further step towards the abolition of the pensioner's earnings rule by increasing the limit by 7·7 per cent. from £65 to £70 a week.
Secondly, the standard rates of unemployment benefit will be increased to £28–45 for a single person and £46 for a married couple. I also propose to change the basis of payment of unemployment benefit so that from later this financial year all new claimants will be paid fortnightly in arrears instead of one week in advance and one in arrears, as at present. This change will not affect the amount of unemployment benefit properly paid to claimants, but it will cut out overpayments that are caused now by people returning to work during the advance payment period.
Thirdly, to help families, child benefit will be increased to £6·85, and one-parent benefit to £4·25. This means that both benefits remain at their highest ever level in real terms. For families in work, the family income supplement prescribed amounts are being raised to £90 for a family with one child, and the maximum payment for a family with one child will go up to £23. Families receiving family income supplement will also gain from the increase in child benefit. I am, however, proposing that changes in the prescribed amounts should, like all other changes in circumstances, be taken into account only when a new

21
family income supplement award is made. As from November, therefore, the increases in these amounts will apply only to new awards.
Fourthly, the long-term scale rate of supplementary benefit will go up to £35·70 for a single householder and £57·10 for a married couple. The ordinary rates for short-term and unemployed claimants under 60 will go up to £28·05 for a single householder and £45·55 for a couple. The scale rates for children will go up by 4.7 per cent. Heating additions will be increased in line with the rise in fuel prices since May 1983, which was 3·2 per cent.
I also propose to make a significant further extension in the scope of age-related heating additions. At present these are paid automatically only to supplementary pensioners over 70. From November, these will, for the first time, become payable automatically at the basic rate of £2·10 a week to householder claimants or their dependants between 65 and 70. Also for the first time, the higher rate of heating addition of £5·20 a week will be paid automatically to householder claimants or their dependants over 85.
I also intend to make a change in the "available scale margin" from November. The available scale margin is the amount which is deducted from certain additional requirements of claimants on the long-term rate of supplementary benefit. It was first introduced in 1966 by the then Labour Government and was intended to reflect the fact that the long-term scale rates should cover nearly all additional needs. At that time it was 45p—the then difference between the long-term and short-term scale rates--and it has been changed only once since then, to 50p in 1968, even though the difference between the long and short-term scales will now stand at £7·65.
It is anomalous that the available scale margin has been maintained at 50p for so long, and I propose both to make a 50p increase in its amount and to apply it again to heating additions, which were originally within its scope. The exemption in respect of children's needs, including their heating needs, will, however, continue and will now be extended to cover children's laundry needs and boarding-out fees.
Fifthly, the housing benefit needs allowances will be going up by 4·8 per cent., apart from those for children, which will be raised by 50p more than is required to maintain their value, giving an increase of 8 per cent. The other changes already announced will take place in November, except that the increases in thresholds for high rent schemes which were due to take effect then will now be deferred until April 1985.
Lastly, public service pensions will be increased by 5·1 per cent.; so also will benefits for disabled people and war pensioners. Mobility allowance will rise to a new rate of £20. This will be exactly double the rate we inherited on taking office and will represent an increase in real terms of almost 11 per cent. since then. The war pensioners' mobility supplement will be increased to £22·25 a week and the 100 per cent. disability pension will go up to £58·40 a week.
All war widows' pensions will be increased in line with prices, but I am glad to say that I am able to make a real improvement for the older war widows, most of whom were widowed during the world wars. I shall be increasing the age allowances they receive at age 65 to £5 a week, and at age 70 to £10 a week—increases of over 15 per cent. I shall also be introducing a new rate of £12·50 for the oldest war widows—those aged over 80.
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The improvements that we are making—which are within the Government's public expenditure plans published last February — will increase the social security budget by over £1.6 billion in a full year.
The new benefit rates will take effect from the week commencing 26 November. I should make it clear that we intend that the uprating should always take place in the last week in November. Because the year is not divisible exactly into 52 weeks it means that every five or six years there is a 53-week gap between upratings unless the uprating date is to creep forward. This problem was recognised and legislated for in the Social Security Act 1980.
Even so, that timetable for implementation is still very tight. It is a tribute to the staff of my Department that it was achieved on time last year, but I must warn the House that if the strike action which is being carried out by a small number of staff in the Department's computer centre at Newcastle continues, payment of the higher benefits could be delayed.
Details of the proposed new rates, together with some minor beneficial improvements, are set out in a schedule which, for the convenience of the House, I have placed in the Vote Office and is included in the Official Report. I shall shortly lay before the House for approval the draft orders and regulations which give effect to the main uprating proposals and at the same time I shall table the usual report from the Government Actuary on the estimated effects of the changes on the national insurance fund.
All told, the improvements that we are making will increase the social security budget to £39 billion a year. Almost one third of all public spending is now being devoted to social security. At the same time, the Government's success in controlling inflation means that occupational pension and other savings now better maintain their value. In this uprating we have ensured that the basic rates of all the major benefits are fully price-protected and we have targeted the resources available to those in greatest need, such as the very elderly.
Mr. Michael Meacher: Is the right hon. Gentleman aware that once again he has demonstrated that under this Government there is one law for the rich and another for the poor? To raise pensions in line with inflation will add precisely £1·75 a week to the single pension. Three months ago the Chancellor of the Exchequer, by abolishing the unearned income surcharge, gratuitously handed out an average extra £26 a week in tax relief to each of 250,000 very rich shareholders. Under this Government, to him that hath shall be given much more, while the poor will have to put up with the crumbs that fall from the rich man's table.
Is the right hon. Gentleman aware that the principle underlying the upratings—indexing merely in line with inflation—is a mean and ungenerous one compared with the Labour Government's uprating in line with prices or earnings, whichever was the higher? Will he acknowledge that, by backtracking on Labour's formula, the Tory Government have so far shortchanged the single pensioner by £2·90 a week and the married pensioner by £4·85 a week? That is the measure of the amount that pensioners have lost under the Government.

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Is the right hon. Gentleman aware that even his predecessor, the Secretary of State for the Environment, if he still is, regarded mere price indexing as mean and inadequate? Indeed, he said that
"it remains the Government's firm intention that pensioners and other long-term beneficiaries can confidently look forward to sharing in the increased standards of living of the country as a whole."—[Official Report, 13 June 1979; Vol. 968, c. 439.]
That promise stands broken. Under the five years of the previous Labour Government, pensioners were given a real 20 per cent. increase in the value of their pensions, whereas in the past five years of the Tory Government they have had only a tiny real increase.
Is the Secretary of State aware that, apart from the inflation indexing of pensions, the real meaning of his statement is that yet again a tiny amount of extra funds is being made available to certain very small groups of beneficiaries, while at the same time very much larger sums are being cut from vastly bigger groups in receipt of benefit?
Is the Secretary of State aware in particular—this is a very important point—[Interruption.] Pensioners will regard it as a very important point. Is the Secretary of State aware that the deferring of the uprating by one week next November has cheated pensioners of £60 million to which they are entitled, and that that is a far bigger sum than the total of all the new benefits that he is now introducing?
Is the right hon. Gentleman aware that paying new unemployment benefit claimants, for the first time, fortnightly in arrears is a further unnecessary and mean hardship for the unemployed, which will severely and unfairly penalise tens of thousands of them? As the Secretary of State has now forced open—he has done it more than anyone — the difference between the long-term and short-term benefit scales to a massive £7·65 a week, as he admitted, why is he increasing the available scale margin by only a paltry 50p to £1?
Is the Secretary of State aware that there is a series of omissions from the statement which intensifies the pressure on those in poverty in Britain today, who now stand, according to the Government's own figures, at 9 million? That is 9 million in poverty in Britain today under this Government, or one in six of the whole population.
Why is there no mention in the statement of restoring to those on sickness benefit, and to those in receipt of invalidity benefit and maternity allowance, the 5 per cent. abatement of benefit which the Government so callously stole from them three years ago?
Why is there no mention of raising the £4 earnings disregard, which, if it had been restored to its real value the last time it was raised, would today be worth £11·40?
When will the Government raise the measly £30 death grant, which would be £210 today if it had kept pace with inflation since 1949?
Why has child benefit, which replaced the child tax allowance, been increased by only 5 per cent.—far less than the 12·5 per cent. Budget increase in tax allowances? How can it possibly be justified to worsen the position of children and the families of the unemployed compared with children in better-off families where the parents remain in work?
Is the Secretary of State aware that the Minister for Social Security, four days ago, as reported in Hansard, listed no fewer than 25 benefits which had fallen in real
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terms since 1979? Why has the Secretary of State not honoured the pledge, of which he made so much, to keep those benefits in line with inflation?
Is the right hon. Gentleman aware that the Parliamentary Under-Secretary of State admitted, in a written answer on 18 November 1982, that by that date this Government had made cuts of £1,500 million in social security? Is the Secretary of State aware that since that date further cuts, in the form of the changed uprating method, the chopping of housing benefit, and the continued shortfall to the pensioners, which we are seeing again today, compared with the rise in earnings, have raised the cuts immposed by the Government on the poor to £3,500 million? Is he aware that those huge cuts are not only fundamentally unjustified in principle, but that it is iniquitous that those cuts on the poor have in practice been used to finance enormous and unwarranted tax handouts for the rich?
Mr. Fowler: The hon. Gentleman's response was exactly what we would expect from him—in short, most of it was arrant nonsense.
The hon. Gentleman talked about shortchanging the pensioners. I have to remind him that he was a member of a Government who, because of the change from the historic to the forecast method, managed to defraud pensioners of about £500 million a year. I must also remind the hon. Gentleman that the Government to which he was a member presided over a rate of inflation of 110 per cent., which was devastatingly bad news for pensioners.
This is the third uprating statement for which inflation has been in single figures. Since 1978 pensions have risen by 83·6 per cent., compared to an RPI increase of 76·4 per cent. that is the record, and the hon. Gentleman does himself no justice in ignoring it. He may wish to withdraw and to reconsider his remarks on the available scale margin, as he does not seem to understand what he is calling for.
The hon. Gentleman says that we are shortchanging and that this is a mean measure. We are increasing spending by £1·6 billion, which means that the total spending on social security is about £39 billion. It means that benefits will increase in November by 5·1 per cent., compared to a 4·5 per cent. inflation rate in the autumn.
There are further changes which we must consider and which we want to look at in relation to the capital cut-off and the disregard, to which the hon. Gentleman referred. That is why we have set up a far-reaching series of inquiries into the whole of the social security budget. The hon. Gentleman has not understood our proposals with regard to the payment of unemployment benefit in arrears. No one will lose entitlement by what is proposed.
It was well understood at the time of the 1980 legislation what was proposed in relation to the uprating date. We have made it clear, and I am making it clear again today, that we want to uprate each year, in the last week in November. The hon. Gentleman may recall that in Committee the right hon. Member for Salford, East (Mr. Orme) suggested that a specific date could be given and that payments could be made around that date. That is precisely what we are doing. The uprating is fair, and I entirely reject the hon. Gentleman's attack.
Mr. Roger Sims: Is my right hon. Friend aware that his prompt statement will be warmly received

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on the Conservative Benches and also outside the House? We particularly welcome the way in which he has understood and reacted to the special problems of elderly war widows. We further welcome his treatment of those below the age of 70 who need a heating allowance. Does my right hon. Friend recall the strong campaign that emerged from the Opposition when he changed the basis on which benefits were calculated? Can he confirm that recipients have not been disadvantaged by the changes that he has made?
Mr. Fowler: Yes, Sir. That was the case that I put when we changed the basis of the uprating and moved to the historic method from the forecast method. I said then that it was a fair change. It has been established to everyone's satisfaction that that has been its effect. The improvements in pensions for war widows mean that about 50,000 war widows will benefit. I believe that hon. Members on both sides of the House will welcome that.
Mr. Frank Field: As the increase in child benefit is significantly below the increase in personal tax allowances, and as that will result in an increased relative tax burden for families, both rich and poor, which was against the specific pledges given by the Conservative party at the 1979 and 1983 general elections, and as it reverses the gains made by the Secretary of State in last year's review, can he tell us what argument the Chancellor of the Exchequer put forward in vetoing his lobbying for a full 12 per cent. increase?
Mr. Fowler: The hon. Gentleman can better even my arguments on the subject. Child benefit and, indeed, one-parent family benefit are at the highest ever level in real terms. They are even higher than the level to which the previous Labour Government managed to bring them. I have great respect for the hon. Gentleman's views on this subject and I share his aim to get help to the poorest families in this country. That is why we have set up an inquiry and are considering how to help young people and children.
Over the lifetime of this Government there have been comparable increases in child benefit and personal tax allowances. They have been roughly the same. Between April 1979 and November 1984 child benefit will have increased by 71·3 per cent., while personal tax allowances will have increased by 72·1 per cent. for single people and 73·8 per cent. for married couples. Therefore, there is rough equality of treatment. However, we shall look further at that area.
Mr. Jim Lester: I thank my right hon. Friend for his statement and welcome the fact that he has sought ways of improving the position of widows in particular. However, in view of what he has just said about wanting to help the poorest in our community, I should point out that there is grave disappointment on this side of the House at the fact that the poorest in the community—the long-term employed living on short-term benefit—have not been helped and that there has been no move towards assisting them.
My right hon. Friend can take it from me that the many letters that I have received from all over the country show that the most disadvantaged people are those trying to live on a long-term basis on short-term benefit. The descriptions speak for themselves. The Government have already accepted the principle for the over-60s, and I
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assure my right hon. Friend that the situation is worse for the over-50s and worse still for those with families. Will he assure us that he understands the position and that it will be given high priority in the Government's thinking during the next 12 months?
Mr. Fowler: I understand my hon. Friend's concern and campaign on this subject. An extension to the unemployed would cost around an extra £500 million a year on present estimates. However, the Parliamentary Under-Secretary of State, my hon. Friend the Member for Braintree (Mr. Newton), will be looking at that point, and I hope that my hon. Friend the Member for Broxtowe (Mr. Lester) will give evidence to the inquiry.
Mr. John Cartwright: Does the right hon. Gentleman accept that his extension of the scope of age-related heating benefits will be widely welcomed but that there will be some disappointment at the size of the increases? For example, 5p a week extra on central heating additions is hardly generous, given current fuel price rises. Does the right hon. Gentleman also accept that some supplementary benefit recipients who have expensive heating systems are denied estate rate heating additions, simply because they pay their heating bills along with their rent to their landlords? Will he look at that anomaly, which gives rise to a lot of resentment on many council estates?
Mr. Fowler: I shall consider the hon. Gentleman's last point. This year we expect to spend about £400 million on heating additions, and that is even taking account of the available scale margin changes which I have announced. That means about £140 million more in real terms than under the Labour Government. The benefits have been uprated because of fuel price rises, and that is only fair. The real increase in aid which the Government have given during their term of office speaks for itself.
Several Hon. Members rose——
Mr. Speaker: Order. In view of the important debate to follow, in which many right hon. and hon. Members wish to take part, I propose to allow questions on the statement to continue until 4·15 pm. If questions are kept short, most hon. Members should be able to get in.
Mr. Timothy Yeo: I very much welcome my right hon. Friend's statement, but is he aware that we are genuinely concerned about the worst-off? Will he undertake to examine with our right hon. Friend the Chancellor of the Exchequer before next year's Budget the most cost-effective way of dealing with those who fall into the poverty trap? Will he bear in mind that he should not be deterred from raising child benefit, despite the fact that it increases public expenditure, if that should turn out to be the best way of tackling the problem?
Mr. Fowler: I do not wish to go into the merits of child benefit now, but the whole purpose of the inquiries is to look at precisely that area. That is why we have set them up.
Mr. Terry Davis: Has the Secretary of State forgotten that when in opposition the Conservative party promised to increase child benefit in line with any increases in personal tax allowances, without any reservations about inquiries, discussions with the Chancellor of the Exchequer or historic statistics? Will he confirm that if that promise had been kept child benefit

27
would have been increased this year by 80p instead of 50p per week? Will he explain why the Conservatives have broken their promise to every parent in the country?
Mr. Fowler: The Conservative Government have not broken their promise of every parent in the country. Such an accusation comes ill from the hon. Gentleman when we are paying child benefit at a rate higher in real terms than that paid by the last Labour Government. If the hon. Gentleman were to examine the figures that I gave earlier for personal tax allowances and child benefit, he would see that the two are comparable.
Mr. James Couchman: I welcome my right hon. Friend's statement that the earnings disregard for those over retirement age will be raised by more than the inflation rate. Can he speculate on the possibility of abolishing the earnings limit for pensioners who continue in full-time work?
Mr. Fowler: That is the aim and intention. We want to work towards that.
Mr. Stuart Bell: Does the Secretary of State accept the serious disppointment that will be caused because the Government have not seen fit to increase the death grant? That is especially disappointing, as the Chancellor of the Exchequer in his Budget created a disincentive to taking out life assurance contracts by abolishing the tax relief on premiums. Is the right hon. Gentleman aware that hon. Members on both sides of the House receive large quantities of mail about the death grant? Will the grant be reviewed?
Mr. Fowler: The death grant is being reviewed. We issued a consultation document putting forward a number of ways in which the death grant could be changed and the aid available go to families most in need. That document was not universally welcomed. We have to look at the problem again. It is being considered.
Mr. Nigel Forman: I welcome the continuation of full price protection for pensioners and others on related benefits. Can my right hon. Friend confirm that the combination of the historic method of calculation and the falling inflation rate leaves pensioners and others better off year on year?
Mr. Fowler: Yes. The historic method of uprating is fair. We said that during the election and when we introduced it. The public can now see for themselves that it works fairly for all beneficiaries.
Mr. Gordon Wilson: What does the Secretary of State intend to do about the earnings disregard for those who are unemployed or in receipt of supplementary benefit, since one of the disregards has been fixed at £4 for a considerable number of years? When will the inquiry initiated by the Minister for Social Security on fuel allowances be completed? Is the right hon. Gentleman aware of the difficulty experienced by those who are disadvantaged by living in colder climes?
Mr. Fowler: I sympathise with what the hon. Gentleman has said about the earnings disregard. We shall see whether that can be improved and the position changed. I shall discuss the hon. Gentleman's second point with my hon. Friend.
Mr. Patrick Cormack: Is my right hon. Friend aware that, although his statement will be warmly welcomed, many of my constituents who have saved hard but have been put out of work in their fifties believe that their thrift is being penalised? Last year he did something modest to help them. Why has he done nothing this year?
Mr. Fowler: I have increased the capital cut-off. The matter is under consideration by the inquiry into supplementary benefit. I have sympathy with the argument about thrift. We shall seek to make progress and give it urgent attention in the reviews.
Mr. David Young: How much money do the Government hope to save by making the unemployment payment two weeks in arrears? Does the right hon. Gentleman recognise that that will have a traumatic effect on the newly unemployed? Is he aware that the Government have deprived 4 million people of the right to work? Is it the Government's policy that the least well-off should subsidise those in work?
Mr. Fowler: No one will lose entitlement to benefit. The savings are based upon estimates. In a full year, savings in unemployment benefit will be about £8·5 million. I stress that that is an estimate. Our survey shows that two-thirds of claimants had two weeks' or more wages when they finished work. That is one reason why we have moved to a more logical and more defensible system of paying benefit, and which is more general throughout western Europe.
Mr. Tony Favell: In the review will my right hon. Friend bear in mind the growing feeling in the country that to pay the same amount of child benefit to the best off as to the worst off is socially unjust?
Mr. Fowler: I have heard that view expressed before. Child benefit and benefits for young people are being examined. My hon. Friend's view is not the only view on the subject. We shall need to take time to consider the other arguments.
Mr. Alex Carlile: When does the Secretary of State propose to take steps to redeem an obvious injustice by extending the invalid care allowance to married women? What advice does he have to give to the many families who are poor because of the failure to increase child benefit, despite the informed advice of bodies such as the Child Poverty Action Group?
Mr. Fowler: I have nothing to add on child benefit. We are increasing child benefit, and have already increased it to an all-time record amount. I have no further plans to improve invalid care allowance, but we shall keep it under review.
Mr. Bowen Wells: I congratulate my right hon. Friend on his excellent package for uprating benefits. May I suggest that perhaps next year he should try not increasing benefits, for the parliamentary benefit of the Opposition, from whom he would hear precisely the same comments as we heard today? May we be assured that he will abolish the earnings rule for pensioners next year?
Mr. Fowler: I cannot give a guarantee that I shall abolish the earnings rule next year. However, it is the Government's aim to abolish the rule. We have made that clear. We shall do it as soon as we can afford to.
Mr. David Winnick: Why should the unemployed, who are being punished as a result of the Government's economic policy, be denied the long-term supplementary rate when they have been unemployed for 12 months or more? Will the Secretary of State bear in mind the hardship of retired people who live on limited incomes, but who are not eligible for supplementary benefit? Can heating assistance be given to such people, especially if they receive rebates on rents or rates? Do the Government intend to assist pensioners with their television licences if the licence fee is increased? Is the right hon. Gentleman aware of the concern among many retired people that they will have to pay more than they can afford for their television licence?
Mr. Fowler: Television licence assistance is not a matter for me. I have already made clear my position on the capital disregard. Making the long-term supplementary benefit available to the unemployed would cost around an extra £500 million — a substantial sum. We shall examine the case for making the change, but against that cost context.
Mr. Richard Tracey: My right hon. Friend is to be congratulated on his statement. His words will be warmly received by old people. Will he remind the hon. Member for Oldham, West (Mr. Meacher) that the last Labour Government took away the old-age pensioners' Christmas bonus? Does my right hon. Friend agree that, judged in that light, the hon. Gentleman's words are hollow hypocrisy?
Mr. Fowler: The words of the hon. Member for Oldham, West (Mr. Meacher) are certainly hollow. That comes as a surprise to no one. The last Labour Government suspended the Christmas bonus, which had an effect on pensioners, whose cause the hon. Member for Oldham, West now tries to espouse.
Mr. Ken Eastham: The Secretary of State said that there would be additions to heating allowances. Is he aware that the Child Poverty Action Group in Manchester has advised us that hundreds of families are already waiting for existing allowances and for local DHSS offices to make assessments? In my constituency about 1,900 families are waiting for heating allowances. Discounting the additions announced today, will the Minister do something to keep local offices manned properly? They are overworked and undermanned.
Mr. Fowler: I shall consider the matter raised by the hon. Gentleman. I do not accept his general point, but I shall look into his specific local problem.
Mr. Patrick Nicholls: Is my right hon. Friend aware that while the indexing of retirement pensions is welcome, many Conservative Members look forward to the time when it will not simply be indexed, but will be raised to another level from which it can be indexed? Is he also aware of the sense of lingering injustice of the old-age pension, in that even if it keeps
30
pace with inflation it provides only for the basics of life, instead of for luxuries, which people in their twilight years are entitled to expect?
Mr. Fowler: We are examining the whole question of pension provision, including the occupational pension provisions. For pensioners, one of the most significant points is that this is the third successive year of single-figure inflation. Low inflation is perhaps the best way in which the Government can look after the interests of pensioners.
Mr. Allen McKay: Will the Secretary of State tell the House why unemployment pay which was being received by ancillary workers and others in the mining industry during the present dispute has been stopped, as I understand it on his instructions?
Mr. Fowler: I need to consider the particular point that the hon. Gentleman has in mind. If he wishes to give me the details, I shall do that.
Mr. Meacher: Will the Secretary of State answer two questions which he did not answer earlier? Although child benefit may be marginally higher in real terms — by about 10p—will the right hon. Gentleman recognise that that does not compensate for the cut of about £1·70 a week in child dependency additions which the Government have imposed? Will he acknowledge that child support benefits overall have fallen substantially under this Government, and that that is the background to this lower-than-expected, and lower-than-required increase in child benefit?
Will the Secretary of State spell out the total annual value of the new arrangements or of the increases other than inflation indexing? Will he confirm that that is probably less than £10 million, which compares with the £60 million cut achieved by deferring the pension uprating by one week from November?
Mr. Fowler: I cannot give the exact figure for the hon. Gentleman's last question. As I have already made clear, the increase in spending announced today is about £1·6 billion—it is no use the hon. Gentleman shaking his head—which is a substantial sum of money, which must be financed. That shows the Government's social commitment.
For child dependency additions, the hon. Gentleman will know that it has been our policy to rely more on child benefit and to take that into account for any increase in long-term child dependency additions. We are doing that. However, nothing hides the fact, which the hon. Gentleman seeks to avoid, that under this Government child benefit has increased to its highest ever point in history—above any sum which the hon. Gentleman provided when he was at the Department of Health and Social Security.
Following are the new rates

Main Increased Contributory and Non-Contributory Benefit Rates

Existing weekly rate

Proposed weekly rate

£

£

Child Benefit

Each Child

6·50

6·85

One parent benefit

First or only child of certain lone persons

4·05

4·25

Standard rate of retirement* and widows' pensions, and widowed mothers' allowance

Single person

34·05

35·80

Wife or other adult dependant

20·45

21·50

Earnings limit for retirement pensioners

65·00

70·00

Standard rate of invalidity pension

Single person

32·60

34·25

Spouse or other adult dependant

19·55

20·55

Invalidity allowance

Higher rate

7·15

7·50

Middle rate

4·60

4·80

Lower rate

2·30

2·40

Standard rate of unemployment benefit:

Beneficiary under pension age

Single person

27·05

28·45

Wife or other adult dependant

16·70

17·55

Beneficiary over pension age

Single person

34·05

35·80

Wife or other adult dependant

20·45

21·50

Standard rate of sickness benefit:

Beneficiary under pension age

Single person

25·95

27·25

Wife or other adult dependant

16·00

16·80

Beneficiary over pension age

Single person

32·60

34·25

Wife or other adult dependant

19·55

20·55

Widows' allowance (first 26 weeks of widowhood)

47·65

50·10

Maternity allowance

25·95

27·25

Attendance allowance

Higher rate

27·20

28·60

Lower rate

18·15

19·10

Retirement pension for persons over pensionable age on 5 July 1948 and for persons over 80*

Higher rate

20·45

21·50

Lower rate

12·25

12·85

Non-contributory invalidity pension†

20·45

21·50

"Therapeutic" earnings

22·50

23·50

Invalid care allowance

20·45

21·50

Main increased supplementary benefit rates

Existing ordinary weekly rate

Existing long term weekly rate

Proposed ordinary weekly rate

Proposed long term weekly rate

£

£

£

£

Supplementary benefit

Couple

43·50

54·55

45·55

57·10

Person living alone

26·80

34·10

28·05

35·70

Non-householder-age 18 and over

21·45

27·25

22·45

28·55

age 16–17

16·50

20·90

17·30

21·90

Existing weekly rate

Proposed weekly rate

£

£

Increase of non-contributory invalidity pension and invalid care allowance for a wife or other adult dependant

12·25

12·85

Mobility allowance

19·00

20·00

Guardian's allowance, child's special allowance

7·60

7·65

Rate of benefit for children of widows, invalidity, non-contributory invalidity and retirement pensioners, invalid care beneficiaries; unemployment and sickness beneficiaries when claimant is over pension age

7·60

7·65

* An age addition of 25p is payable to retirement pensioners who are aged 80 or over.

† Non-contributory Invalidity Pension and Housewife's Non-contributory Invalidity Pension will both be replaced from November 1984 by Severe Disablement Allowance, subject to the enactment of the Health and Social Security Bill now before Parliament.

Main increased industrial injuries benefit rates

Existing weekly rate

Proposed weekly rate

£

£

Disablement benefit (100 per cent, assessment)*

55·60

58·40

Unemployability supplement†‡

32·60

34·25

Special hardship allowance (maximum)

22·24

23·36

Constant attendance allowance (normal maximum), exceptionally severe disablement allowance

22·30

23·40

Industrial death benefit

Widows' pension during the first 26 weeks of widowhood

47·65

50·10

Higher permanent rate

34·60

36·35

Lower permanent rate

10·22

10·74

* The rates for beneficiaries not over the age of 18 will also be increased.

† Invalidity allowances and increases for adult dependants and children will be the same as those payable with invalidity pensions.

‡ The amount of earnings permitted with unemployability supplement will also be increased.

Existing weekly rate

Proposed weekly rate

£

£

Any other person aged:

11–15 years

13·70

14·35

Under 11 years

9·15

9·60

Boarders personal expenses

Ordinary—couple

17·70

18·50

—single

8·85

9·25

Long term—couple

19·70

20·60

—single

9·85

10·30

Heating additions to supplementary benefit

Lower rate

2·05

2·10

Higher rate

5·05

5·20

Central heating additions

Lower rate

2·05

2·10

Higher rate

4·10

4·20

Estate rate heating additions

Lower rate

4·10

4·20

Higher rate

8·20

8·40

Main increased housing benefit rates

Existing weekly rate

Proposed weekly rate

£

£

Needs allowances

single person

43·05

45·10

couple/single parent

63·50

66·50

single handicapped person

48·00

50·30

couple (1 handicapped) or single handicapped parent

68·45

71·70

couple (both handicapped)

70·80

74·15

dependent child addition

11·90

12·85

Main increased war pension rates

All ranks receive the same increases, officers' rates being expressed in pounds per annum.

Disablement benefits

Existing weekly rate

Proposed weekly rate

£

£

Disablement pension for Private at 100 per cent. rate

55·60

58·40

Age allowance with assessments of:

40 to 50 per cent.

3·85

4·05

Over 50 and not exceeding 70 per cent.

6·05

6·35

Over 70 and not exceeding 90 per cent.

8·65

9·10

Over 90 per cent.

12·10

12·70

Unemployability allowances

Personal allowance

36·15

38·00

Increase for wife or other adult dependant

20·45

21·50

Increase for child

7·60

7·65

Constant attendance allowance

Special maximum

44·60

46·80

Special intermediate

33·45

35·10

Normal maximum

22·30

23·40

Half and quarter day

11·15

11·70

Comforts allowance

Higher rate

9·60

10·10

Lower rate

4·80

5·05

Mobility supplement

21·15

22·25

Existing weekly rate

Proposed weekly rate

£

£

Allowance for lowered standard of occupation (maximum)

22·24

23·36

Exceptionally severe disablement allowance

22·30

23·40

Severe disablement occupational allowance

11·15

11·70

Existing annual rate

Proposed annual rate

£

£

Clothing allowance

Higher rate

75·00

79·00

Lower rate

48·00

50·00

Death Benefits

Existing weekly rate

Proposed weekly rate

£

£

Widow's pension—Private's widow:

Standard rate

44·25

46·55

Childless widow under 40

10·22

10·74

Rent allowance (Maximum)

16·85

17·70

Age allowance for elderly widows

Age 65–69

4·30

5·00

Age 70–79

8·60

10·00

Age 80 and over*

8·60

12·50

Adult orphans

34·05

35·80

* New category.

Family Income Supplement

Existing weekly level

Proposed weekly level

£

£

Family Income Supplement

Prescribed amount for family with one child (income below which FIS is payable)

85·50

90·00

Increase in prescribed amount for each additional child

9·50

10·00

Maximum weekly amount for a one child family

22·00

23·00

Increase in maximum amount for each additional child

2·00

No change

Minor Improvements
Regulations will be brought before the House to provide for the following improvements in benefit entitlement rules, from 26 November 1984.
To allow periods after people reach age 80 to count towards the 10 year residence test for non-contributory retirement pension. At present people entering, or returning to the United Kingdom after age 70 are usually unable to qualify no matter how long they live in this country thereafter.
In Housing Benefit, to increase the disregard of the Manpower Service Commission's away from home allowance paid to people on training courses from £15 a week to the full amount of the allowance, currently £40 a week.
Also in Housing Benefit, to prevent a double deduction from benefit for amenity charges (eg for heating and hot water) included in the rent where people are moving to a new home and temporarily have entitlement to benefit in respect of both tenancies.

Coal Industry Dispute
4.14 pm
Mr. Tony Benn: On a point of order, Mr. Speaker. I wish to raise a matter to which you may not be able to give an immediate answer. The matter is important. I allude to the developments in the miners' dispute. Every day on television hon. Members and the public see pitched battles, involving thousands of people, which are almost scenes of civil war proportions. Many hundreds are arrested, there are many casualties, and two men have died—one just before the weekend.
The provision for debates falls into three categories. Under the Supply Day procedure the Opposition must find a proper balance of the subjects they wish to draw to the attention of the House. Standing Order No. 10, on which you, Mr. Speaker, have been unable to rule—I am not criticising you—is not an effective way of dealing with the matter. Under such circumstances, the historic precedent is for the Government to introduce emergency powers. In 1926, 1972 and 1974, the Government, who were in effect running an emergency regime, brought regulations before the House, which the House had to debate and approve.
Will you, Mr. Speaker, consider carefully how the House can bring to bear its opinions on this matter, and how the Government, who are responsible for masterminding the police operations, can be held to account by the House?
Mr. Speaker: The right hon. Member knows that I am not responsible for organising the business of the House. He mentioned numerous ways in which the matter can be raised. I think that he is wrong in saying that the Standing Order No. 10 procedure has not been operated, because it has. The question is not for me, but for the whole House, especially the Front Benches, to decide.

Defence
[FIRST DAY'S DEBATE]
Mr. Speaker: Before I call the Secretary of State fo move the motion, I should announce to the House that I have selected the amendment in the name of the Leader of the Opposition. I have a long list of right hon. and hon. Members who wish to speak during this two-day debate. I hope that it will be possible to accommodate them all, but it will be possible only if speeches are relatively short.
Dr. David Owen: On a point of order, Mr. Speaker. I do not wish to challenge your ruling, but will you tell the House either now or later whether you are bound only ever to choose one amendment, or whether you may choose two amendments? Does Standing Order No. 35 relate only to the debate on Her Majesty's speech? It would be helpful to hon. Members who seek to place motions on the Order Paper for vote and for debate, if you will tell us whether you have such discretion or whether we must change the Standing Orders of the House?
Mr. Speaker: I am only able to choose one amendment on an ordinary day, but I can choose two amendments for the debate on the Queen's Speech. However, I am bound to choose only one amendment for a debate of this nature, and I have done so.
4.19 pm
The Secretary of State for Defence (Mr. Michael Heseltine): I beg to move,
That this House approves the Statement on the Defence Estimates 1984, contained in Cmnd. 9227.
I believe that the White Paper provides the information on which an informed debate can take place.
I was pleased to see that this was the view of the Defence Committee in its own valuable report, to which I shall refer.
Twice this century, the peace of the world has been shattered by world war. Two weeks ago we commemorated D-Day and the sacrifices of the second of those wars. Those who survived had one profound hope to sustain them as they surveyed the wreckage of nearly six years of total war. It was the hope that such cataclysmic events should not occur again. They regarded it as their duty to themselves and to the 50 million across the world who had not survived to ensure that international tensions should in future be resolved by means other than war. In practice, across much of the globe little has changed. The use of force and of violence in the pursuit of political ends is as commonplace today as it has been throughout history. The continuing loss of human life with all the attendant destruction remains a feature of day-to-day life, uncontrolled and apparently uncontrollable. In the realities of power politics too much of the evidence points to a determination to keep it that way.
But there has been one profound achievement during the past 40 years. Despite the constant reality of East-West tension, a world conflict has been avoided. The peace of Europe has been maintained, and in western Europe at least political freedom preserved.
We cannot be prepared to rest on the mere absence of war. Peace between East and West has been preserved, first, because of a perception on all sides that the alternative is too appalling to contemplate. Peace has also

37
been preserved because great resources have been devoted to military expenditures. Of course, peace based on fear and suspicion will always be uneasy and uncertain. Of course, the task of the statesman is to move to a position where peace is based on mutual understanding and on trust, but let no one doubt that the existence of peace itself is a prize beyond previous attainment. That we have not also moved to peace in a climate of trust is a challenge, but not a disaster.
The primary purpose of NATO is to preserve the peace and security of its member nations, and this is what it has achieved for 35 years. We have made it clear that we shall maintain our defences at a level sufficient to deter threats to our peace and security. We have also made it clear that we want to talk to the Soviet Union and to achieve a meaningful dialogue on reducing East-West tension and securing arms control.
I will not disguise from the House the fact that progress during the past year has been disappointing. That has not been for want of effort on the NATO side, but one thing is certain about negotiations: it takes two to achieve success. There must be a real and genuine will on both sides to be flexible and to seek a lasting understanding.
The House will judge whether the NATO Alliance has done all it could to pursue the chance of establishing common ground. Across the range of arms control negotiations, NATO has taken initiatives and shown its willingness to hold a meaningful dialogue. At the level of strategic arms, the Americans have made it clear that everything was on the table for discussion, but the Russians are refusing to meet. The intermediate range nuclear forces talks remain suspended.
Since those talks began in 1981, the United States has made it clear that it was prepared to remain at the negotiating table for as long as was necessary to reach an agreement. The only proviso was that the large and growing imbalance between East and West in intermediate range nuclear systems could not be allowed to persist. The zero option was on the table. Failing that, the Alliance made it clear that it was prepared to accept equality at the lowest level the Soviet leadership was prepared to negotiate. The Alliance also showed flexibility on other points of concern to the East, such as medium-range aircraft. As the talks continued, the number of SS20s pointed at Europe grew from 171 in 1981 to 243 in 1983, and at that time NATO had no comparable missiles. Yet as soon as the first NATO missiles arrived in Europe, the Soviet Union broke off the talks.
The House will contrast this Soviet rigidity with the Alliance decision taken in October 1983 to reduce the nuclear stockpile in Europe to the lowest level for 20 years. When implemented, the decision will mean that since 1979 the number of Alliance warheads deployed in Europe will have been cut by one third, by one half in the case of warheads for shorter range systems.
We are also committed to seeking reductions in conventional arms and to pursuing confidence and security-building measures to reduce tension. In Stockholm, the West is negotiating to reduce the risk of an outbreak of hostilities in Europe as a result of accident or misunderstanding. At the MBFR talks in Vienna we are committed to achieving fair and verifiable conventional force reductions in central Europe, and in Geneva we are striving for a total ban on chemical weapons, but the Soviet attitude remains inflexible and unyielding.
38
Most recently at the London economic summit, Western leaders expressed their wish to see early and positive results in the various arms control negotiations and the speedy resumption of those that had been suspended. The joint declaration on East-West relations at the summit reiterated the United States' offer to restart nuclear arms control talks anywhere, at any time and without preconditions. The words were hardly offered when they were being denounced by the Soviet Union—not only denounced, but with no constructive proposals to put in their place.
Of course, there are fundamental differences between the political systems of East and West. Leaders of the Western nations know that there is an urgent and compelling imperative in democracies towards the pursuit of peace. In free societies, people can express their desire for peace and reductions in tension openly, in the press, on the streets and through the ballot box. The leaders of the Soviet Union face no such pressures. I have no doubt that the vast mass of the Russian people also want peace, but they lack the means to impress their views on the leadership in the Kremlin.
The lesson for us is clear. We must recognise that we are dealing with a cautious but calculating leadership—a leadership obsessed with the security of their state but disregarding the threat which Soviet power poses to others. Their system is premised on the certainty of the eventual ideological triumph of Communism, but it will proceed carefully towards that goal. Opportunities will be grasped, but only if the price is acceptable. It is a bureaucracy which, by its nature, is slow moving, led by men whose whole experience is to play things long. We cannot expect to make rapid progress in negotiations with the Soviet Union, but equally we must persevere, and we must articulate to Western public opinion why meaningful and lasting agreements with the Warsaw pact can be achieved only as a result of hard, slow and patient negotiations conducted from a position of strength. It would be folly to encourage unrealistic hopes of easy and rapid progress which cannot be fulfilled.
For 35 years the policy of the NATO Alliance has been to deal with the Soviet Union from such a position of strength. The Alliance has made a realistic appreciation of the aims of the Soviet Union and its strengths and weaknesses. We recognise the Russian propensity to exploit instability in Asia, Africa and central America. We see the continuing repression of eastern Europe and the continuing attempt to crush Afghanistan. Above all, we know the size and power of Soviet military capability, which continues to grow.
The leaders of the Alliance nations believe that their fundamental duty is to preserve the freedom of their peoples through the maintenance of strong defence forces capable of resisting aggression. The White Paper describes the steps that the Government are taking to this end. The British contribution to NATO defence continues to be second only to that of the United States. We are spending £17 billion on defence this year, and the figure next year will be 18 billion. Our defence contribution outstrips that of our major European allies as a total figure, as a per capita figure and as a percentage of GNP.
We are continuing with the programmes which are in hand to modernise our conventional and nuclear forces. The defence of the United Kingdom homeland remains fundamental to our national survival and to the capability of NATO to reinforce in war. For the next 20 years the

39
backbone of the air defence of the United Kingdom will be provided by the Tornado F2 aircraft, which is a highly sophisticated air defence aircraft with excellent range, loiter and stand-off capabilities. Our early warning capability will be greatly enhanced by the entry into service later this year of the Nimrod AEW aircraft and the continuing modernisation of our air defence radar and communications facilities. Hawk with Sidewinder will provide a useful additional air defence capability at a relatively low cost. We are continuing to modernise our naval forces to counter the Soviet mining threat to our offshore waters.
On the central front of Europe we have in hand enhancements which will strengthen BAOR equipment to an extent not seen in the past three decades. They include the introduction of the MCV80 combat vehicle, the multiple-launch rocket system, the LAW 80 anti-armour weapon, Javelin, the successor to Blowpipe and the new range of small arms. We have already ordered sufficient Challenger tanks to equip four regiments. I am pleased to have been able to announce today that orders will shortly be placed for a further 62 tanks from royal ordnance factory Leeds to equip a fifth regiment. Two squadrons of the Tornado GRI strike aircraft are now in service with RAF Germany. The combination of Tornado, its JP233 airfield attack weapon and the ALARM system will be a potent one in the suppression of Warsaw pact air operations in the 1990s and beyond. Our air power in Germany will be further strengthened when the advanced Harrier GR5 aircraft enters service later in the decade.
In the case of our maritime forces, which play such a vital role in the eastern Atlantic and the Channel, weapons systems in or coming into service over the next few years include the lightweight Stingray and heavyweight Spearfish torpedoes, the Sea Eagle and Harpoon anti-ship missiles. There are now 37 warships on order for the Royal Navy, including one aircraft carrier, seven type 22 frigates, four nuclear fleet submarines and the first of a new class of conventional submarines.
I am also able to tell the House today that we shall shortly be inviting industry to make competitive proposals to design and build the first class of a new type of support ship, the auxiliary oiler replenishments, or AORs. This is a new concept for the support of the Royal Navy, a "one-stop" ship which will carry in one hull all the fuel and stores needed for replenishment at sea. It is also a new concept in ship procurement, since this is the first time we are going out to competition for proposals to design and build a first-of-class ship of such importance and complexity.
In strengthening our conventional forces, we are seeking to give an increasing emphasis to our reserve forces. Not only are these cost-effective, but they provide for wider participation in the work of the armed forces, which in itself is valuable. We have already announced the expansion of the Territorial Army to 86,000 by the end of the decade and the creation of the Home Service Force, and we are looking to strengthen the role of the other reserve forces. The Defence Committee commented helpfully on these developments. We hope to do more, but the pace at which progress can be made depends upon the response within the community.
We also plan to modernise our strategic nuclear deterrent with the Trident system. I accept at once that that
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remains an object of controversy. The opponents of Trident maintain that it represents an unnecessary escalation of the arms race, that the alternatives are more acceptable, and that the cost of Trident will distort the rest of the defence programme. I do not believe that any of these propositions stands the test of analysis.
In comparing Trident with our existing force, we must take account of the deployment of Soviet anti-ballistic missile defences and the development of Soviet antisubmarine capabilities since Polaris—a system designed in the 1950s—came into service. The Trident force will be the minimum size necessary to provide a credible and effective deterrent. While we need for the 1990s and beyond a missile with a range which allows our strategic submarines increased "sea room", we chose the D5 missile because the longer-term cost advantage lay with maintaining the maximum commonality with the United States programme. But, having done so, we have made it clear that we do not envisage using the full warhead capability of the system.
It is argued that there are cheaper alternatives based on cruise missiles. This was gone into most carefully at the time and, for an equivalent weight of deterrent power, a cruise missile force was found to be more expensive to buy and to run than a ballistic force. Of course, ultimately what is required to deter is a matter of judgment. We can all change the basis of the calculation to suit us at the time.
What the Government must have in mind is that a cheap system which does not deter would be simply a waste of money, and one which was not invulnerable to preemption would invite the very attack it was intended to prevent.
There is also the question of cost. The White Paper gives an estimate of £8·7 billion at average 1983–84 prices and exchange rates, which is the common price base for the figure work in the document as a whole. As time moves on the estimate will, of course, change. The Defence Committee has quoted a higher figure in its report, and because it is a factor which can readily be isolated, it has focused attention on the exchange rate element of the equation. But, as the Committee also points out, there are other factors in the equation which could influence the estimate the other way.
I do not intend to depart today from convention and to introduce new figures on a different base. They would themselves only be overtaken in due course. The essential point is not whether the cost in isolation is £8·7 billion or some other figure, but whether this cost is affordable in the context of the defence budget as a whole. In this latter perspective, the scale of planned resources completely dwarfs marginal charges in a single project—even of the scale of Trident. We are talking of cumulative defence budget over the period of procurement of Trident of some £350 billion at today's prices.
In annual terms, Trident will cost on average, say, £500 million a year or 3 per cent. of the defence budget, but this Government have increased the defence budget by one fifth or some £3,000 million a year since 1979. In other words, the increase alone under this Government is around six times the average cost of Trident.
Trident, when it succeeds Polaris, will be one of the four main pillars of our defence programme. What I cannot understand is how a party that in government, through much of the 1960s and 1970s, maintained Polaris, and modernised it at great expense with Chevaline, now

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in opposition and without any change in the policies of the Soviet Union, can argue for a defence policy without our own last resort deterrent.
The Government are committed to carrying through the modernisation of our conventional and nuclear forces. We are also committed to getting the maximum value for money from the defence budget. Our aim is to secure the maximum output of front-line capability from the resources of money and manpower which we devote to defence.
Chapter two of the White Paper outlines the comprehensive range of initiatives which are in hand. These apply across the spectrum of manpower, money and equipment. The results, in terms of extra capability for the services, are already apparent.
For the Royal Navy, we have announced that up to eight ships which would have otherwise been placed on standby from 1986 onwards will be kept in the operational fleet. As a result, the number of destroyers and frigates available at short notice for NATO and national commitments will be increased by up to 20 per cent. compared with previous plans.
Mr. A. E. P. Duffy: Will the Secretary of State confirm that only one major surface warship and one submarine will be completed this year, the lowest number this century, and that only one additional ship—a frigate—joined the fleet last year, the smallest number since 1949? Where would the right hon. Gentleman now be without the shipbuilding programme bequeathed to him by the last Labour Government?
Mr. Heseltine: In no way do I wish to suggest that the last Labour Government did not make a significant contribution to our conventional forces. That is why at the last election I found it so extraordinary that Labour should threaten to reduce the very commitment that it had considered necessary when in government.
Mr. Duffy: Why have this Government not placed more orders?
Mr. Heseltine: I have already told the House of the number of ships under construction or on order for the Royal Navy. Those orders have been placed by the present Government, but I do not seek to diminish what the previous Labour Government did. I only wish that the Labour party consistently would follow the same policies in opposition as it did when in government.
For the Army, we intend to redeploy 3 per cent. of our manpower from the support areas to the front line. This will enable us to man the comprehensive programme of re-equipment for BAOR which is in hand. It will also allow us to strengthen our home defence forces and to improve the capability and readiness of our out-of-area forces based on 5 Airborne Brigade.
For the RAF, manpower levels will be held steady as the number of front-line aircraft increases by more than 15 per cent. over the decade.
I have announced proposals for the reorganisation of the Ministry of Defence which are designed to achieve greater efficiency in the conduct of our business. These are being worked through and I shall be announcing the results before the recess. Finally, we are committed to securing greater competition across the range of our equipment procurement and support services. Our analysis has shown that significant savings—up to 30 per cent. in some recent cases—can be achieved through competition.
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It is argued by some that this pursuit of value for money, though laudable in itself, is not significant in terms of defence policy. I know that few people want to concentrate on it—it is detailed and uncomfortable, and it challenges the pressure groups within the defence community as a whole. Instead, there is a preference for focussing on marginal increments in resources — and these are regarded as central to policy. The Government have set about establishing a level of defence expenditure appropriate to the threats which we face and have made provision accordingly, but increasing resources cannot he a process without limit. We must shift the focus from the marginal increase to addressing the output that we are achieving from the whole of a much larger defence budget.
We intend also to pursue greater international collaboration in the development and production of new weapons systems. In particular, we seek greater arms cooperation within Europe and between Europe and the United States. Greater standardisation of defence equipment across NATO boundaries has obvious benefits for the battlefield commander, and the scale and sophistication of major modern weapons systems often rules out a national solution. European collaboration is important because it demonstrates to the United States that the European allies are prepared to play their full pan in NATO defence.
We are already involved with our partners on a wide range of collaborative projects — for example, the multiple-launch rocket system, the self-propelled SP70 gun and the EH101 anti-submarine helicopter. For the future we are discussing with our partners an outline concept for a European agile fighter aircraft to meet the air threat from the Warsaw pact in the 1990s and beyond. We are studying with other nations the feasibility of introducing a standard NATO frigate design for the mid-1990s. Of course the harmonising of national requirements and priorities is not easy. There are political, military and industrial obstacles to be overcome. But I am clear that more needs to be done if we are to take advantage of the potential of improving our defence offered by the new technologies which are now coming forward.
There has been some debate recently on the European contribution to defence. it is natural that there should be such a debate within the NATO Alliance. There are those in the United States who believe that the Europeans are not carrying their share of the defence burden, just as there are those in Europe who believe that the European voice should be projected more loudly in the counsels of the Alliance.
The White Paper sets out the extent of the European contribution to the defence of the Alliance. The European allies provide some 90 per cent. of the in-place ground forces, about 80 per cent. of the tanks, about 90 per cent. of the armoured divisions, about 80 per cent. of the combat aircraft, and 70 per cent. of the fighting ships in European waters and the Atlantic.
There is already co-operation between the European allies. I am currently the chairman of the Eurogroup of Defence Ministers which aims to harmonise European views, and to ensure that the European contribution to the common defence is as effective as possible. There is scope for a more European approach in the field of defence procurement.
Mr. Dick Douglas: The Secretary of State is making a comprehensive speech but

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so far he has omitted any reference to the United Kingdom merchant marine or the NATO merchant marine. Is it his intention to look at the position of our merchant marine or the totality of the merchant marine in relation to defence?
Mr. Heseltine: That point was raised, appropriately, in the recent Select Committee report. That report has just been published and if the House will bear with me I want to deal with that important issue when the Government come to respond to the report, which we shall obviously do carefully and thoroughly.
The independent European programme group has a central role to play. Its work has been given greater impetus in recent months. European collaboration has been shown to work. The experience now exists upon which we can build. The forums exist to carry forward that co-operation. What is now needed is the political will to carry forward the harmonisation of military and industrial thinking and practice. We must have discussions about real issues with a fixed agenda and a set timetable. Against that target we have to recognise that every country has its own deeply based self-interest. None of us will negotiate from any other stand.
But if the negotiations are to move us beyond the highly fragmented industrial base and the diverse operational requirements of today, it will require a common sense and practical recognition not only of our narrow national self-interest but of the wider self-interest that cheaper and perhaps better collaborative equipment can produce. The Americans will not wait for us to catch up and we would not do so if the positions were reversed.
Those are most important issues, but they do not go to the heart of the matter—our defence strategy and the role of each of the services within it. I would be the first to accept that our defence policy must evolve in the light of changing circumstances. We as a country and NATO as an alliance must be prepared to be flexible and to adapt to changes in the threat and to the new opportunities presented by developing and emerging technology. We cannot afford to stand still.
The White Paper might have addressed those issues more fully and I intend to do so in future years, but I make no apology for offering no dramatic shifts of strategy at the national or the Alliance level. The White Paper avoids this not out of complacency but because there are no quick and easy alternatives—although I cannot help observing that the answers appear quicker and easier the further people get from the actual responsibilities of taking decisions in government.
In looking at the balance of our effort, I am enjoined by some to adopt a more flexible approach and to recast our policy to a strategy directed more to the open seas and to British interests across the world. The Government have shown their resolve to defend their wider interests in the clearest way possible. We intend to continue to strengthen the mobility and to enhance flexibility of our forces. That approach was significantly speeded up in the light of the Falklands campaign.
But there is no realistic defence policy that diminishes our concern for the threat on the European mainland. Because NATO has successfully stabilised her central front and the Soviet Union poses a threat elsewhere, it is not self-evident that we should now take steps which might lead to the destabilisation of the central front, which is at
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the heart of Europe's defences, in order to bring to bear, in unspecified ways, military power in more peripheral areas. If a policy of stabilisation in Europe requires a British contribution of 55,000 troops and the forces of the RAF in Germany, that seems to me to be a price that we should unhesitatingly pay.
In judging our contribution to the Alliance, we have to address hard realities, not simply hark back to tradition. The first is the weight of the Soviet threat and of NATO's own forces. The Soviet navy has certainly expanded hugely over the past 20 years, but the preponderance of Soviet power is still on land and in the air in Europe. On the Western side, we have to put into the balance not only the capabilities of the Royal Navy and of other European powers but also the huge American maritime effort.
There is also the dominating reality of my job, that we do not start with a blank sheet of paper. We have to address the implications of change as well as where it might lead. Given concerns in the United States about the level of the European contribution to our defence, a reduction in the British effort in Germany would seem likely to stimulate a wider process of withdrawal from commitment to shared defence on the ground, and to begin the unravelling of the very fabric of the Alliance itself. I cannot believe that the world would be a safer place without our European commitment or with fewer American troops on the ground in Europe. I cannot believe that Britain would be a safer place with a looser NATO Alliance.
Mr. Keith Speed: My right hon. Friend mentioned the considerable contribution made by the United States navy. None the less, does he agree with remarks made by the previous American chief of naval operations that the United States had a one-and-a-half-ocean fleet with a three-ocean commitment?
Mr. Heseltine: I am never unsympathetic to statements of even the most distinguished admirals who always see a task wider than their capability to meet it. That never means that we should dismiss it, but we, as my hon. Friend knows as well as anyone, are faced with the language of priorities. It is never absolutely possible to meet all requirements that are put upon one as a result of the military analysis of the situation.
Mr. Duffy: Do not run down the Navy.
Mr. Heseltine: I am not running down any of the armed services.
I stand, therefore, for the underlying basis of the 1981 Defence Review because this best secures the collective defence upon which our own security must rest.
There is a deeper strand of criticism, also fashionable, which argues that NATO's strategy of flexible response is no longer relevant in the strategic circumstances of the 1980s. We face the charge that NATO is bent on a dangerous and immoral strategy of nuclear war fighting from which the world can be made safe by the removal of the weapons involved. We face the opposite claim—but sometimes from the same people—that in an era of strategic parity NATO's nuclear strategy is incredible and that the weapons which underpin it are just not worth having.
The truth is that from the time that it was established in the mid-1960s, the strategy of flexible response involved difficult choices in terms of the reliance to be placed upon the conventional and nuclear elements of Alliance forces.

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The proposition that there might be certain circumstances in which a conflict would be escalated to the nuclear level and in which a protagonist would embark upon a chain of events with possibly awesome consequences for everyone involved was never an easy one.
In the 1960s, as now, the supreme rationalist could argue that no sensible leader would follow such a course. But then, as now, the issue to be addressed was a different one. Would a potential aggressor be confident that if he placed his opponent in desperate circumstances the only way out would be seen to be surrender? While there is uncertainty about the response that would come, there remains deterrence, and this deterrent effect applies to all war, not just nuclear war. Indeed, that is NATO's purpose in a strategy of flexible response. Too many of the Government's critics come to the wrong answers by asking the wrong question. They ask, "How do you fight a war?" We ask, "How do you prevent the war in the first place?"
It has always been recognised that there are choices over when the point is reached where conventional options start to be exhausted. A price can be paid in terms of additional conventional strength to buy additional freedom of action. I should myself be the first to extol the benefits of the doctrine of no early use of nuclear weapons, provided that it was not presented as some dramatic shift in approach which the Russians might see as a lack of confidence and will in the West to defend ourselves. That would make war more, not less, likely.
This Government are working to provide the underpinning for this strategy in the real world by strengthening the deterrent effect of our conventional forces by enhancing both their hitting and their staying power. This is not a cheap option, but it is fully consistent with the process of thinning out shorter-range nuclear weapons to the minimum needed for credible deterrence, on which, as I have said, the Alliance is already embarked.
Where I part company with some Opposition Members is over the merits of so-called nuclear weapon-free zones. Of course we must have the most stringent controls over the release of all nuclear weapons and keep to a minimum the numbers on the battlefield, but to go further by declaratory policy would not of itself remove the threat of nuclear attack in the area concerned, since many of these weapons are mobile and could be moved up in a period of tension, and systems of longer range could be targeted from further back. What such a zone might offer is a weakening of our ability to stop the concentration of Soviet conventional forces and an increased risk of Soviet pressure on some Alliance members to abandon their commitment to contribute to the nuclear element of deterrence.
It will, I know, be argued that emerging technologies offer new opportunities for putting at risk Soviet forces which would formerly have been targeted with nuclear weapons and that therefore the nuclear threshold can be raised. This is indeed an opportunity which we must grasp, but it is an opportunity for the future and not for today. We have to accept the world as we find it, and the world as we find it today is one in which there is a great deal of talk about future and not yet available opportunities and remarkably little recognition of the value of the practical steps which we have actually taken to reduce the nuclear stockpile to the lowest level for 20 years.
Some, of course, want NATO to adopt a strategy of no first use. For the reasons that I gave earlier, this strategy—
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even if it were believed by the Soviet Union—could well weaken deterrence and not strengthen it. It is not self-evidently better in political or even in the moral terms in which these arguments are so often cloaked to pursue a policy that might make war itself more likely.
But let us put that to one side for a moment. What is, I think, incontrovertible is that the logic of such a policy—if it were put forward seriously on defence grounds—is that the West would deter Soviet conventional power by the threat of a conventional response. Nuclear weapons would then essentially deter only Soviet nuclear attack.
In following through such a policy seriously, we would expect to find a commitment to large increases in conventional forces to the level needed for the job of conventional deterrence, a concern to maintain NATO solidarity and in particular the transatlantic link, and a sharing of the burden of essential nuclear deterrence. That is what the Labour party would have to proclaim.
What do we actually find from those Opposition Members who proclaim this cause with the fanaticism of the new convert? They have the clearest conference commitment to cut back on our conventional forces. They have a policy of removal of our contribution to Alliance nuclear deterrence as though this might magically square the financial circle of more conventional forces and a slashed budget. But, as always, the figures do not add up. They have in reality a policy which would strike at the heart of the NATO concept and leave this country with quite inadequate defences. They have an approach motivated more by the need to try to blend the two extreme wings of the Labour party, political expediency and the anti-Americanism of a faction of the hard Left which they try to dress up as an alternative defence strategy.
I make no apology for the fact that the statement contains no fundamental shift of strategy. Our current strategy is the right one for Britain at this time. It is based on a successful policy which has preserved the peace and security of the nation for the longest period of contemporary history. Our forces are not over-stretched, the balance of investment in the programme is satisfactory, and we have modern and effective fighting services of unequalled quality and calibre.
My task as Secretary of State is to keep our forces efficient to enable them to face the challenge of the future. I have outlined in my White Paper the ways in which this will be done. I commend it to the House.
4.57 pm
Mr. Denzil Davies: I beg to move, to leave out from "House" to the end of the Question and to add instead thereof:
`believes that the plans outlined in the Statement on the Defence Estimates 1984, Cmnd. 9227, avoid the real and fundamental issues relating to the defence and security of the United Kingdom; is convinced that the enormous and increasing cost of buying the Trident nuclear system from the United States will mean further cuts in, and a weakening of, our conventional nonnuclear forces; deplores the fact that the White Paper contains no initiatives to stop and reverse the escalating and dangerous nuclear arms race; and calls upon the Government to work within NATO for a change from its existing strategy to a strategy based on the no-first-use of nuclear weapons, to cancel Trident and to remove all nuclear bases, including cruise missiles, from the United Kingdom.".
I suppose that it is too much to expect a defence White Paper to be very lively and exciting. The Secretary of State more or less admitted that his intention was not to make it very lively, constructive or exciting. Judged by the

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turbid standards of the past, the White Paper is rather negative, like the right hon. Gentleman's speech, and unrealistic about the problems facing Britain in terms of its defence policy. It fails to say, as the Secretary of State failed to say, anything constructive about the two most serious issues facing the Government and the country. The first is the frightening nuclear arms race, which, clearly, is getting out of control. The second is the financial crunch that will fall on the defence budget over the next few years, because it is clear that the right hon. Gentleman's figures will not add up.
The right hon. Gentleman touched on the nuclear arms race. Far from showing any initiative to try even to moderate it, the Government are playing a full part in the escalation and proliferation of that arms race. They are still determined, apparently, to go ahead and buy Trident, a weapon which is massively more lethal, more accurate and more powerful even than Polaris and a weapon which even those who still want to see a second generation of British nuclear weapons believe to be inappropriate and totally unnecessary. Even Trident, with its 360 warheads—or is it more? — and its massive overkill, will not be enough to satisfy the Government's nuclear mania. We have to have a further 160 cruise missiles located on British soil.
The figures in the defence budget do not add up, and the right hon. Gentleman will need to have a further defence review. Britain's extensive commitment, stretching from the central front to the south Atlantic, combined with the massive sums needed to fund and finance Trident, a rapidly declining industrial base and with the contribution that oil revenues make to public expenditure and the balance of payments gradually getting less, inevitably mean that there will be further cuts in the defence budget and, when they come, they will fall on our conventional forces, as they have in the past, and so make us even more dependent on nuclear weapons.
Rather than facing these problems in the White Paper—apparently the Secretary of State said that he had no intention of facing them—he has done again what he has done in the past and escaped into a managerial cocoon. He has been playing with his MINIS, sticking pins into his wall charts, shuffling the top brass around and packing the Ministry of Defence with private arms manufacturers. He emerges occasionally from that cocoon to take a ritualistic bash at the peace movement, and then returns to his wall charts. He is not prepared to face the real issues.
After 1985–86, when the NATO commitment of 3 per cent. lapses, as I understand it, the commitment is that defence expenditure should barely keep pace with normal inflation—that is, inflation as worked out and calculated according to the retail price index. However, as the House knows, if inflation exceeds 4 per cent. — nobody believes that it will come down below 4 per cent.—that will mean cuts in defence expenditure even on the grounds of the estimated inflation. In addition, there is also something called, perhaps inaccurately, defence inflation. That means that the costs of defence equipment tend to exceed the general effects of inflation.
Let us call it defence inflation, although this may be inaccurate. It has been found—and there has been no denial of this—that defence inflation tends to exceed the retail price index by between 5 per cent. and 10 per cent. That means that if we take normal inflation and defence
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inflation, while ignoring for the moment the cost of Trident, even before its cost starts to bear heavily on the budget, there are bound to be cuts in the defence budget.
I shall now quote from a favourite newspaper of Defence Ministers, the Daily Telegraph. I thought that I would bring a smile to the face of the Minister of State for Defence Procurement with that. On Wednesday 16 May, under the heading "The Flaw in Defence", the Daily Telegraph said:
"the document is ultimately disappointing, even disturbing. The truth, which no amount of managerial reform can disguise, is that after next year defence expenditure may, for the first time in nearly a decade, begin to decline in real terms … Whatever economies Mr. Heseltine secures, the future appears to hold only the promise of further defence reviews and an erosion of our conventional fighting capability."
That is the Daily Telegraph talking, not the Left wing of the Labour party. It continues:
"That is a prospect which the Government has shown no sign of confronting."
The Secretary of State showed no signs of confronting it either.
Mr. Cyril D. Townsend: The right hon. Gentleman used the word "flaw", but there is a basic flaw in what he is saying. He is suggesting that there should be an increased level of defence expenditure, when his party is committed to getting down the NATO average. That would mean a one third reduction in conventional forces, which would greatly increase the chances of nuclear warfare. Perhaps the right hon. Gentleman will talk about that.
Mr. Davies: The word "flaw" comes from the Daily Telegraph. I was merely reciting the situation as I see it, and the Daily Telegraph touched on that. If the Government think differently, perhaps the Secretary of State will deny it. He has not as yet, and he knows that the crunch will come.
Mr. Heseltine: I went to some length to deny it in my speech, but perhaps I should do it specifically. There is no foundation for what the right hon. Gentleman is saying. This Government have increased the defence budget by £3,000 million a year, and that is broadly the enhanced level at which expenditure will continue. There is a vast enhancement in our defence capabilities, and there is no danger such as that to which the right hon. Gentleman is drawing the attention of the House.
Mr. Davies: The figures look different. Perhaps the right hon. Gentleman should read the public expenditure survey for the year 1985–86, which pencils in an increase of about 3 per cent. and assumes that inflation will be 3·5 per cent. I am merely going on the figures and the Secretary of State has not yet shown that those figures are wrong.
As we all know, the real Trojan horse—with which the Secretary of State went to great lengths to deal—that has been slipped into the system is Trident. The cost of Trident is out of the Government's control. The Government have little idea, at the end of the day, what the final price or cost will be. In July 1980, there was an estimate of £4·5 billion to £5 billion as the cost of Trident. In March 1982, the cost had risen to £7·5 billion—an increase of a mere £2·5 billion. In March of this year, the Secretary of State rather shamefacedly slipped a new horrendous figure into a defence question. Apparently, the cost will now be £8·7 billion. Last week, the Select

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Committee on Defence, using optimistic figures for British and American inflation, estimated that the cost will be £9·5 billion, and so it will go on and on.
In four years under this Government, and on their best case estimate — I should like to see the worse case estimate, which no doubt is locked up carefully either in the Ministry of Defence or the Treasury—over the past four years there has been a 100 per cent. increase, which is an increase of 25 per cent. a year, in the estimated cost of this missile system. That is all without a penny, or cent, being spent. This has come about under a Prime Minister who keeps lecturing the country and the House about the financial rectitude that was practised so well in that little grocer's shop in Grantham. If financial lack of control such as this had been practised in that little shop, the bailiffs would have been in with their white chalk long ago, marking the furniture.
This point was well made by Mr. Neil Collins in The Standard. I read the financial columns of the newspapers, Conservative Members may like to know. Mr. Collins is a distinguished City editor and on 15 March, just after the Secretary of State's announcement of another almost £2 billion increase, under the heading, "Trident surfaces as a £9 billion horror", he said:
"It would be some comfort if we could be reasonably confident of Mr. Heseltine's new figures. Naturally, we can't … The case for the Trident missile is not even widely accepted."
I do not think that it is on the Conservative Benches.
"The tactics employed by the Ministry of Defence to get us committed to the project are familiar enough—little public debate beforehand, gross under estimate of the cost followed by a quiet series"—
[Interruption.] I know that this is painful for Conservative Members, but as it is clear that most of them do not read the financial columns of newspapers, I shall read the article to the end. It continues:
"gross under estimate of the cost, followed by a quiet series of 'revisions' of the price to take account of 'relevant inflation'."
The Government have no idea what the final figure for the cost of Trident will be, because so much of the cost is outside the control of the Secretary of State, he well knows. Indeed, the Government do not know what kind of weapon they will get at the end of the day. In 1980, it was going to be C4 and Trident 1. Now, apparently, it will be D5. Who knows, if the Americans change their minds, it might be E6.
Mr. Nicholas Soames: No, it is ET!
Mr. Davies: There could be modifications. The Secretary of State will have to pay the cost if he wants the missile.
The Government have got themselves into an absurd position of locking themselves and one of the main pillars of their defence policy into the military technology and defence strategy of another country—at that, a superpower—over which they have no control. That is why the Government do not know what the cost of Trident will be.
I deal next with the exchange rates. The Secretary of State is coy about the exchange rates, and I understand why. We have been told by the Select Committee that the exchange rate means a 1 per cent. fall in the dollar exchange, equalling £25 million. If one goes back to 1980, the picture is an interesting one. In 1980, the estimate was based on $2·36. In 1982, it was based on $1·78. In March 1984, the estimate of the Secretary of State was on the
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basis of $1·53. The exchange rate of the pound to the dollar today is down to $1·37. That is another reason that the cost of Trident—the 45 per cent. cost in the United States—is outside the control of the Government. Not only do those figures on the exchange rate tell something about Trident, they show the rake's progress of Tory economic policy from 1980 to 1984.
Let us examine what the exchange rate might be in 1988–89. Let us say that it might be $1·20—I think that it will be lower, but let us be charitable and optimistic. That will mean another £500 million on the cost of Trident 3, all sunk apparently on the foreign exchanges. We believe that the Government decision to buy Trident will turn out to be a disaster militarily and financially, and the sooner it is cancelled, the better.
Mr. Churchill: Is it not humbug for the right hon. Gentleman to suggest that Trident is the single most expensive piece of military procurement that the country has undertaken, especially bearing in mind that, when the Labour party was in power, his Government, which he chooses conveniently to forget about, were responsible for the Tornado programme, which cost 25 per cent. more than the latest estimates for Trident?
Mr. Davies: My point is that Trident is expensive, the Government have no control over it, so much money has been spent in the United States that it is not possible to have control over it, and no estimates can be believed.
I deal next with flexible response, which was dealt with in an offhand and depressing manner in the White Paper in paragraph 124. The Secretary of State read us a long civil servant bureaucratic essay about it, but said nothing new. The Secretary of State must know—the fact that he raised it in his speech shows that he must know—that a considerable body of opinion on both sides of the Atlantic believes and argues that the strategy of flexible response is now out of date, unrealistic and dangerous, and that it should be re-examined and, over a period, gradually changed. The strategy simply means being prepared and ready in a war fought by conventional weapons—I think that the Secretary of State would agree with this—to be the first to unleash nuclear weapons in central Europe. In fact, it is a strategy of first use of nuclear weapons. The basis of the strategy was set out in a joint article in the American publication Foreign Affairs in spring, 1982. This joint article was written by Mr. Robert McNamara, Mr. McGeorge Bundy, Mr. George Keenan and Mr. Gerard Smith. [Interruption.] The hon. Member for Dorset, North (Mr. Baker), the Parliamentary Private Secretary to the Minister, shows his ignorance, because obviously he has not heard of these gentleman, or read the article. The article was written by individuals who are experienced in this matter. They are not members of CND or any of the peace groups that the Secretary of State dislikes so much. The authors traced the history of NATO strategy before flexible response, because flexible response to some extent is a jargon phrase, and not very different from what happened previously. On page 754, the article said:
"A major element in every doctrine has been that the United States has asserted its willingness to be the first—has indeed made plans to be the first if necessary — to use nuclear weapons to defend against aggression in Europe. It is this element that needs re-examination now. Both its cost to the coherence of the Alliance and its threat to the safety of the world are rising while its deterrent credibility declines. This policy was

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first established when the American nuclear advantage was overwhelming, but that advantage has long since gone and cannot be recaptured."
Indeed, the basis of the strategy—this is where it is dangerous—envisages what is ridiculously called fighting a limited nuclear war, apparently a war of controlled nuclear escalation where we start with the landmines and the shells, then go to the bombs, and then to the ultimate, flexible response weaponry—the cruise and Pershing 2 missiles. The danger is that it demands the matching of every missile against every missile, every bomb against every bomb and every rocket against every rocket. That is why we had Chancellor Schmidt's speech in London in 1977, and it is one reason that we have cruise missiles in Greenham common today. Cruise missiles are as much a product of flexible response as the landmines on the Fulda gap on the central front. Nobody is arguing that it is possible to make this change overnight, but we would like to know of some thinking by the Government — no indication of this was given in the White Paper, nor in the speech of the Secretary of State—showing that they realise what the problem is, and are prepared to move towards a policy on no first use of nuclear weapons.
Mr. Soames: Will the right hon. Gentleman say what is his assessment of the Russian plan for European battle and, if he were in the position of my right hon. Friend the Secretary of State, how he would lay his plans to respond to that threat?
Mr. Davies: I know that the hon. Gentleman has been to Moscow, and I understand that he is fairly full of it. I would be happy to discuss these matters with him, but not at the Dispatch Box. One argument that will be put forward, which was touched on by the Secretary of State, although he was not too certain of it, is, "Yes, all right, let us go to no first use, but it will mean a massive increase in conventional weapons." I do not believe that that would necessarily be the case. It will certainly mean a re-ordering of the way that defence on the central front is to be carried out, a change from a forward defence to something quite different. That I accept. However, I do not believe that it would mean such an increase in conventional weapons.
To return to the article, I stand by what Robert McNamara and others said in the article in Foreign Affairs. I know that the hon. Member for Crawley (Mr. Soames) is not interested. He is still thinking of his glory in Moscow when talking to the generals, but perhaps he should listen to what the article said. The article continued:
"Yet it would be wrong to make any hasty judgment that those new levels of effort must be excessively high. The subject is complex, and the more so because both technology and politics are changing … there is no need for crash programs, which always bring extra costs. The direction of the Allied effort will be more important than its velocity. The final establishment of a firm policy of no-first-use, in any case, will obviously require time. What is important today is to begin to move in this direction."
Mr. Peter Bottomley: Will the right hon. Gentleman now answer the question asked by my hon. Friend the Member for Crawley (Mr. Soames) — irrespective of whether my hon. Friend has just been to Moscow—and say how he would prepare against possible aggression from the Soviets? What is his answer?
Mr. Davies: I thought that I had tried to give an answer. I said that the doctrine of flexible response might once have had some validity but that, once there was parity between the United States and the Soviet Union, it was important to move away from that policy towards one of greater reliance on conventional weapons.
Mr. Julian Critchley: Will the right hon. Gentleman give way?
Mr. Davies: No — and what the hon. Gentleman writes in the Daily Telegraph is not acceptable to many of his hon. Friends.
The Secretary of State plans to increase competition in the procurement of defence equipment. Apparently there is to be more competitive tendering, more privatisation, more contracting out and more hiving off from the Ministry of Defence with the aim of getting better value for money. Like many people, I do not believe that we shall get better value for money. Speaking in another place, the noble Lord Carver said — [HON. MEMBERS: "Oh."] I am bringing him in again, but this time not on flexible response. He said of the Secretary of State:
"If he thinks that his gimmickry will make it possible for him to fund Trident without adversely affecting the conventional equipment programme, he is deceiving himself." — [Official Report, House of Lords, 14 June 1984; Vol. 452, c. 1277.]
I agree, and gimmickry is a strong word to use in another place. The irony, however, is that there will probably be less competition because there will be mergers in defence indstries. There have already been tentative moves in that direction. Is GEC to take over British Aerospace? If so, there will be a loss of competition and the Secretary of State knows it. If that merger is allowed, other defensive mergers will take place. Ultimately, the small subcontractors who are such an important part of the defence industrial base will be gobbled up. There will be a repetition of what happened to our civilian manufacturing base in the 1950s and 1960s. With all the mergers, the industry emerged weaker. The result of mergers will be a weaker industrial base and no gain in terms of price.
The Secretary of State is packing the Ministry of Defence with directors and managers of arms industries. The White Paper says that there are to be another 50 such people. That trend is disturbing and distasteful because the Secretary of State started with Mr. Peter Levene, the chairman of United Scientific Holdings. He is given the run of the Department, produces reports on the dockyards and finds out about the royal ordnance factories, which will be extremely convenient for his Alvis subsidiary if it decides to buy the tank factory at Leeds. Moreover, I see from the Daily Telegraph that he gets information and is given a public exhibition in that bazaar in Aldershot which the Secretary of State opened this morning. Only yesterday Mr. Peter Levene, chairman of United Scientific Holdings and personal adviser to the Secretary of State, wheeled Lord Trefgarne, who I understand is some form of Minister, down to the private exhibition in Aldershot and got great publicity for his Ferret 80 armoured scout car.
I shall quote the Daily Telegraph, which is careful about what it writes on these issues. It said:

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"The exception is the specially publicised politically extraordinary personal launching yesterday by Lord Trefgarne … Alvis was well-advertised as being part of United Scientific, of which Mr. Peter Levene—temporarily on loan to Mr. Heseltine …—is managing director."
The Financial Times said that Mr. Levene stood close to the Minister, just as we would expect.
Mr. Robert Atkins: The right hon. Gentleman has shown once before in a debate on this subject that he is not a great lover of the private arms industry. He shows that by describing as a bazaar the Army equipment exhibition, which contributes enormously to exports and provides the jobs that he is always on about. With regard to Mr. Peter Levene, is the right hon. Gentleman aware that people in the procurement and the defence industries have said for some time that there is a need for a mixture of the arms industry and serving officers in the Ministry of Defence and in industry? Is not what the right hon. Gentleman is saying flying in the face of that development, which should be welcomed rather than attacked?
Mr. Davies: I have regard and respect for the private arms manufacturers and do not mind poachers being turned into gamekeepers. What I object to is, after six months of being taught the art of gamekeeping, people being turned into poachers again. That is precisely what the Secretary of State is doing, but then perhaps the modern Tory party does not understand that analogy. I do not know, but perhaps the right hon. Member for Cambridgeshire, South-East (Mr. Pym) understands it.
The Secretary of State should stop running for a while. He should stand still if he can and try to muster the courage to face and tackle some of the fundamental issues that he has not tackled in the White Paper and which will have to be tackled before long. If he cannot do that, or has not the courage to do it, his successor will have to do it.
5.26 pm
Sir Humphrey Atkins: I am always pleased when the right hon. Member for Llanelli (Mr. Davies) speaks. He has a pleasant voice, to which I enjoy listening, and I always live in the hope that I shall discover what the Labour party really thinks is the proper way in which to defend the country.
The trouble is that we do not find out. We have the Opposition amendment, which is designed to be read by the Opposition's supporters to make them feel comfortable, and we have heard much material from an extraordinary variety of newspapers, but we still do not understand how the Labour party would defend Britain. We know how it used to defend the country when it was in government. Although I and others had some quarrel with it about how it did that, in principle we did not disagree that much. However, I have never yet heard what has caused the Labour party to stand on its head in regard to this issue. Perhaps the right hon. Member for Lewisham, Deptford (Mr. Silkin) will tell us in his winding-up speech.
We should like to know why the Labour party is standing on its head—other than that it perceives an electoral advantage in doing so. The Labour party should know better than that, as the arguments that it propounds receive no support on this side of the House and little support on the Opposition Back Benches. Last June showed that those arguments do not receive much support
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in the country either. We are left wondering, but perhaps we shall find out later why the Labour party pursues that course.
The Defence Select Committee published its first report last Thursday. I do not intend, the House will be glad to know, to go through all of it. Right hon. and hon. Members are perfectly capable of reading it themselves. I shall draw attention to a few parts that are of special significance. We thought and said that the White Paper was long on management but perhaps rather short on political and strategic prospects. In paragraph 3 we said that
"the White Paper confines itself to analysing the present situation and the United Kingdom response to it. We strongly recommend that future White Papers include a review of long-term political and strategic prospects, both within the NATO area and beyond."
That was the first point that we put to my right hon. Friend when he gave evidence to the Committee. He replied:
"I think the first task that one as to do on taking over the Ministry is to recognise that it is going to take quite a long time to become familiar with the workings of the Minstry and the assumptions of the policies of the Ministry and it is unrealsitic to think that a Secretary of State is going to come in from domestic political experience and very rapidly change the policy assumptions of a Ministry as steeped in its own world and its own defence environment … as the Ministry of Defence."
We all accept that as undeniably true.
Indeed, my right hon. Friend went further and said that the political and strategic aspects were satisfactory, but that he would return to them another year. I hope that he will, because the Committee has recommended that he should. We said:
"The interests which the present level of defence spending is designed to serve and protect must be clearly identified, and their prospects discussed, if the annual Statements on the Defence Estimates are to make a proper case for the size and shape of defence spending."
I am sure my right hon. Friend accepts that and that the review recommended by the Select Committee will be included in next year's White Paper.
I do not want the House to think that criticism of the White Paper means that we believe that it has no policy statements—indeed, it has plenty. Two of them repeat what we know already—the Government's decision last year not to continue after 1986 planning to increase defence expenditure by 3 per cent. in real terms each year, and my right hon. Friend's proposals — which he announced in March and mentioned this afternoon—for the development of the Organisation for Defence.
We have been promised a White Paper on the latter point before the end of next month and, no doubt, there will be an opportunity to discuss it in the autumn. I hope that the Government's business managers are listening. On the former point, the Select Committee has announced that it has begun a major inquiry into the effects of ending the 3 per cent. annual increase. The inquiry will take place during the autumn and we hope to report to the House at Christmas.
I give a special welcome to two other policy matters — the proposal for a substantial improvement in our front-line forces by tail-to-teeth transfer, and the decision to keep eight frigates in the operational fleet rather than move them into the standby squadron. That must be the right decision, provided that the training of sailors to man them does not suffer. The Select Committee was assured by my right hon. Friend's officials that that would not

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suffer. Indeed, I also welcome the decision to strengthen the Army's front line by 4,000 men and the RAF's frontline aircraft by 15 per cent.
I welcome my right hon. Friend's decision to establish an arms control unit within the MOD. It is a good decision, which is much overdue. Of course, the Foreign and Commonwealth Office takes the lead in all negotiations about the control, reduction and elimination of weapons. I have no complaint about that. I have nothing but admiration for the patient, determined and skilful way that it has gone about its task over many years — and, I greatly fear, will have to go about it for many more years.
Those who know most about weapons are to be found in the MOD. They know the capability of nuclear, chemical and other weapons; they know the conditions necessary for the operation of nuclear weapons and the preparation needed for any such operation; they are skilled at interpreting information from photographs taken from far above the earth or gained from other sources; they know the minimum requirements for ensuring that any agreements on the limitation or reduction of weapons are being kept.
Of course, the MOD has been closely involved with disarmament negotiations, but the formation of a special unit, to use my right hon. Friend's words,
"capable of advising any member of the Cabinet involved in this field, on all matters to do with arms control"
is a clear step in the right direction, and I congratulate my right hon. Friend.
It comes as no surprise that my right hon. Friend is pushing ahead vigorously with his plan to increase competition in the supply of defence equipment. It is exactly what we would expect of him and, as a believer in the benefits of competition, I have no quarrel with him. His aim is to achieve better value for taxpayers' money. Paragraph 237 of the White Paper shows that savings of up to 30 per cent. can be achieved in certain areas. We have been told that that policy is already having a marked effect. In 1982–83, only 21 per cent. of contracts were awarded on a competitive basis. One of my right hon. Friend's officials told the Select Committee that during the first four months of this year that figure had risen to 49 per cent.—so far, so good.
Others with more knowledge of defence procurement than I will no doubt make their contributions in the debate. I want to mention one doubt about taking the policy too far. A great deal is rightly being done in NATO to collaborate with our allies, especially our European allies, in the development and production of new weapons. My right hon. Friend mentioned one or two in his speech. Paragraph 315 of the White Paper lists six—the multiple launch rocket system; terminally-guided warheads; self-propelled gun; new generation of anti-submarine warfare helicopters; new generation of anti-tank guided weapons and the advanced short-range missile. I have no doubt that there will be others.
If, as we hope, that collaboration bears fruit, I fear that we may find either that competition on an equal basis becomes impossible or, if it is possible, we must recognise that British industry will not always win the orders. It may win part of the orders, but that would mean that only part of our defence industrial base would survive. I know that my right hon. Friend regards a healthy defence industrial base as vital. I can envisage an area of difficulty in
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marrying two desirable objects—increased competition and collaboration. I mention that as an anxiety in my mind which I hope will not come to fruition.
My penultimate point relates to something not in the White Paper, which should be in it — the Merchant Navy. Paragraphs 49 to 53 of the Select Committee report dealt with that point. I was glad to hear my right hon. Friend say that he would deal with the issue in his reply to the Select Committee. However, I want to go a little further now, because no one who lives in these islands can doubt the absolute necessity of there being sufficient ships in the Merchant Navy, either in peace or in war. Ninety-seven per cent. of everything that we import and everything that we export comes or goes by sea. If supplies could not come to us, our industry would come to a standstill and we would starve, just as we almost starved 40 years ago. I cannot tell, any more than anyone else can tell, whether the NATO countries will ever again be engaged in a major war. If they are, I cannot tell precisely what sort of war it will be.
It is at least arguable that if the nuclear stalemate—and the contemplation of the uselessness of engaging in a nuclear war in which everyone loses—prevents that kind of war, as it has done for over 35 years, a hostile power such as the Soviet Union, bent, as we know it is, on extending its boundaries and creed, might seek to bring us to our knees by the threat of starvation. To be sure, we have allies, but the British Government have a duty to look to our resources, too, and these are pitifully thin and getting thinner.
The Falklands conflict two years ago could not possibly have been described as a major war, yet to mount our operation there—not to supply the Falkland Islanders with food and materials, but to mount the operation—it was necessary to take up from trade no fewer than 45 merchant ships, all of which performed magnificently.
One might say that that was not a great number, because we have plenty of merchant ships. There were enough two years ago, but there are a lot fewer today. In round terms, five years ago there were 1,200 British-owned and registered merchant ships. Last year there were just over 750 and the forecast of the General Council of British Shipping is that in two years' time there will be only 400.
Those figures put a totally different complexion on the matter. If, to mount an operation the size of the Falklands campaign, we needed 45 ships and there were only 400 in all, how on earth could we contemplate engaging in anything more serious? Four years ago, when the Merchant Navy was much bigger than it is today, our predecessors as a Defence Committee said in their report:
"Given the strategic significance of merchant fleets, details of their strengths should be included in future White Papers."
The Government agreed, and that was done in 1981. It has not been done since; it was not done in 1982, 1983 or this year. I do not know why not, but it should be done, and I hope that I will be assured by the Minister at the end of today's debate that it will be done, because it is extremely important.
I should like information—if not today, soon—about another matter. The ships to which I have referred are British-owned and registered and the Government can lay their hands on them if they need to. But many British-owned ships are registered under flags of convenience, and we have all heard of Liberia, Panama and places such as that. Can the Government lay their hands on those ships

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in times of emergency and crisis? The United States Government can lay their hands on United States-owned ships registered in Liberia, either by agreement or under American law. I do not know whether we can, but we might need to if the Merchant Navy goes on diminishing.
Part of the trouble lies in the nice distinctions of departmental responsibility. Sponsorship of the Merchant Navy is the business of the Department of Transport—all of them excellent fellows, I have no doubt, but not particularly concerned with defence. The Chancellor of the Exchequer is not concerned with defence, either. He searches for revenue and for fairness in taxation, and in his Budgets makes alterations to our tax law which he knows will inflict considerable damage on our merchant fleet.
My right hon. Friend the Secretary of State, in answer to a question by a member of my Committee, said:
"At this moment I have not been advised to pursue policies involving myself in the present situation."
He should be so advised. If he is not, he should advise his advisers. The Government, to use a colloquialism, must get their act together, for it is an increasingly dangerous situation, and the Secretary of State is the right person to raise it with his Cabinet colleagues. I hope that he will do so
I conclude on a personal note. I was particularly pleased to read paragraphs 126 to 129 of the White Paper in which tribute is paid to the Regular Army, to the Ulster Defence Regiment and, by implication, to the Royal Ulster Constabulary for the work that they do in Northern Ireland.
They all have a hideously difficult time. Regular Army soldiers must act not as soldiers, which they are trained to be, but as policemen. We should be, and are, proud of the way in which they conduct themselves. I was delighted to note that—thanks, no doubt, to the increasing size and efficiency of the RUC—the number of battalions of the Regular Army in Northern Ireland has declined from 13 in 1979, when I first went there, to eight today. Furthermore, the total number of units doing a tour in Northern Ireland in any one year has gone down from 40 in 1979 to less than half that number today. That must be extremely welcome not only to the soldiers and the Ministry of Defence but to our NATO allies.
The UDR is in a different situation. It contains some of the bravest men I know. They work harder than almost anyone. They live where they work, as do their families, and everybody knows where they live. They are never off duty and they are at risk 24 hours of every day, 365 days of the year. We owe them an enormous debt, and I am glad to acknowledge it.
5.46 pm
Dr. David Owen: I cannot remember an occasion since 1966 when I have been more worried about the defence budget projections for this country. In 1966 we had a decision to cut defence spending and a refusal to cut our defence commitments. That situation was not put back into balance until 1968.
This is the first defence debate since 1978 in which we have clear evidence of the Government—for 1986–87—making an actual reduction in defence expenditure. In 1978, against a background of great difficulty in public expenditure, Europe made one of its best decisions of the last 10 years. That was the collective NATO decision to increase defence spending by 3 per cent. per year, inflation-proofed, and it is to the credit of this country that
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that decision was taken across Governments; it was taken by a Labour Government in difficult circumstances and fulfilled by this Government.
It is fair to say that we have fulfilled that commitment better than any other European country. However, the extent to which we have kept to that commitment is not as even as some hon. Members might think. We have not actually spent 3 per cent. per year. The figure has shown a great deal of variation, and if we look back over the defence budgets we see that, in terms of constant prices, in 1979–80 it increased by 5·4 per cent., in 1980–81 by 2 per cent.; in 1981–82 by 2·7 per cent.; in 1982–83 there was a substantial increase, for reasons of which we are aware, of 7·2 per cent.; in 1983–84 it increased by 3·4 per cent.; and in 1984–85 we are planning an increase of:3·5 per cent.
The assumption this year is that our spending will be on the NATO commitment target, but that is not the case. Already we have seen that 3·5 per cent. reduced by 0·9 per cent. because of the pay rise to the armed services. Effectively, therefore, we shall achieve a year-on increase in 1984–85 of only 2·6 per cent. Thus, we have already slipped this year from that 3 per cent. commitment.
For 1985–86 the Government are planning an increase of only 1·7 per cent., but if pay exceeds the guidelines and is 5·7 per cent.—rather than the 4 per cent. which is assumed for that year—we shall have zero growth. In 1986–87, unless pay is held to an average of 2·5 per cent., rather than the estimated 3 per cent., there will be no real growth.
The inflation assumptions that are fed into the Government's expenditure White Paper are ridiculous and absurd under-estimates. That is manifest for the fiscal year 1984–85. Conservative Members must face the fact that they will tomorrow evening be supporting in the Government's Division Lobby a Government who are making deeper cuts in defence spending than were ever envisaged by Sir John Nott. Whatever one's views about Sir John's proposals, within the constraints of having to accommodate the Trident expenditure, at least there was an intellectual basis for what was done. I fear that there is no intellectual basis for the Government's proposals. The Secretary of State is playing to the gallery.
The right hon. Gentleman has nominally reversed the Nott cuts. The force of three aircraft carriers has been restored. Sir John opted for two carriers. The amphibious assault ships are to be kept, when they were to be scrapped. HMS Endurance remains. The frigate and destroyer fleet will still decline from 59 to 50. The eight ships that Sir John wanted to hold in reserve will now be put on full duty, but without any increase in previously planned manpower. Overall Royal Navy manpower levels in the early 1990s will be 11,000 fewer than in 1981.
All the signs are that we are doing under the stewardship of the present Secretary of State exactly what we were warned against doing by the previous Secretary of State. We are keeping more hulls, but we are not equipping them with modern equipment and staffing them with properly trained crews. We are generally pretending to have an increased defence commitment, but not investing in weaponry was the shortcoming exposed around the Falklands. It is dangerous in modern, highly technological warfare to put ships at risk because of a lack of necessary capital expenditure. It is the capital

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expenditure programme to which we must address ourselves, and which is severely threatened by the Trident programme.
The Trident programme is not a simple and clear-cut issue, it is true, but I have always opposed it. I did so from 1977, when in government, to 1979. I opposed it on arms control grounds, but above all I opposed it because I considered it to be the cuckoo in the nest. It was clear even than that it would pre-empt valuable resources being spent on areas of defence that we needed desperately to strengthen. If we want the Trident programme, we should have it plus a 3 per cent. growth in defence expenditure.
As the Chairman of the Select Committee on Defence, the right hon. Member for Spelthorne (Sir H. Atkins), said, it is estimated that the Trident programme will cost an extra £700 million. The effect of the movement in the exchange rate alone is £400 million. These extra costs mean that in 1986–87, the year which is causing most anxiety, there will be not just zero growth, but an absolute cut of 1 per cent. If the expenditure on Trident continues, that will go forward through 1987–88 and 1988–89. The Government have given no sign that they have anything more in mind for the defence budget than to hold the planned levels for 1986–87.
The likely consequences for the defence budget are extremely serious. If we want Trident, there should be a greater increase in the overall defence budget so that we can pay for Trident and improve our conventional defences. I do not believe that it is possible for the Secretary of State, when no doubt he is off to greener pastures, to fulfill the commitments which are before us within the forward defence expenditure—[Interruption.] The pastures that await him may be green in many senses.
The question that we must face is what is likely to happen to various programmes. How is the Secretary of State going to fit in replacements for HMS Intrepid and HMS Fearless and the amphibious assault vessels? How will he finance the new replacement for Tornado aircraft, which will be starting to make an impact on the capital budget at exactly the time when the Trident budget is at its peak? How will he be able to accommodate all these items of desirable new capital expenditure?
The majority opinion is that it will not be possible for all these items of expenditure to be accommodated within the budget and that there will have to be sacrifices, which will be felt in two or three years' time. The Secretary of State can proudly boast about what he is spending now, but those who are examining the budget are anxious about what it will look like in three or five years' time. There are not enough resources to maintain the present SSN build rate, to carry on with the Saxon programme or to continue with the agile combat aircraft programme. Something will have to give and the right hon. Gentleman knows it.
The obvious answer is more expenditure in addition to what is planned or the sacrificing of Trident. If we sacrifice the Trident programme — I believe that that should be done—I do not believe that we can earmark the moneys that are saved for the Health Service or the education service, much though I would wish that to happen. The moneys will be needed to improve conventional defence forces, which we must do if we are to raise the nuclear threshold.
In the middle and late 1990s we shall have to have contingency provision for a replacement for Polaris if there
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has been no movement in arms control and no change in the Soviet-US negotiating positions. It is not unreasonable that the Secretary of State should say that if the Trident programme is stopped we shall have to have something to replace it unless we choose to go into the next century with no nuclear deterrent for the United Kingdom
The Secretary of State must face some of the realities of the action that has been taken in the United States over the Tomahawk cruise missile programme. Tomahawk missiles are being fitted now to nuclear submarines and nuclear-armed Tomahawk missiles will become operational this month. The Americans have implemented this programme because they believe that Tomahawk is an effective weapon system. In my view it would fit ideally into a minimum deterrent system if we decided to replace the Polaris system, which we shall not have to replace until the end of the 1990s. The Secretary of State currently plans that some Polaris boats should remain in service until 1997.
Tomahawk is not the most ideal or sophisticated deterrent system. It is not as good technically or strategically as the Trident system and it would be foolish to try to pretend otherwise. However, bearing in mind what we hear about the capacity to shoot down missiles in space, the ballistic missile system may not prove as advantageous in the next century as many thought. The submarine-launched cruise missile is a cheap deterrent because it can be fired from a conventional torpedo tube in existing SSNs. Only eight missiles are being fitted initially to submarines of the United States navy. There will be an extra 12 with vertical launch, to make 20 in all. Eight will be compatible with our existing SSNs. The cost will be about $1·2 million per missile at 1982 prices. The programme will not be cheap and much will depend on the SSN build rate. The maximum initial deployment would be about 100 missiles, which would be about one tenth of the cost of the Trident programme. There would be no extra refitting charges and it might be possible to increase the SSN build rate.
The Secretary of State says that there is no alternative to the Government's proposals, but he knows that there is and that it is one that I have presented to the House. It is an alternative which was considered seriously in the late 1970s. The Ministry of Defence was against it then because it wanted Trident. However, more and more senior armed service men are realising the consequences of going ahead with the Trident programme and there is a definite change of mood. I beg the right hon. Gentleman to listen to some of the younger serving officers.
Mr. Speed: Is the right hon. Gentleman aware that the Tomahawk strategic nuclear warhead could be fitted in the new SSK 2400 programme?
Dr. Owen: That is true. It could be fitted also to surface ships if we wished to do so. One way out of the political problems surrounding the deployment of cruise is to put cruise missiles to sea. Helmut Schmidt was rather too easily cast aside when he asked for maritime deployment. They need to be in Europe, but it would be much less politically damaging — and there would be fewer midnight flits from Greenham common—if they were deployed at sea. I hope that we shall come back to the question of deployment at sea at a later date.
It is extraordinary that the Secretary of State did not mention that the United States Senate is even now

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beginning to debate the possible reduction of 100,000 United States service men in Europe, phased over the next five years. That is being put forward by Senator Nunn, who has great authority. If a person of his calibre and distinction can advocate that degree of reduction, it will not be long —even if it is not voted on tomorrow—before the Senate insists on a reduction of United States forces.
For The Times at this stage to produce an editorial asking for reductions in BAOR seems to be extraordinary, but at least The Times is recognising that, under present arithmetic, the Secretary of State's forward projections simply do not add up and that we shall have to look at radical alternatives. I do not believe that it is possible to reduce BAOR, tempting though it might be, as a cut in forward defence expenditure. What I fear is that, as always, capital expenditure will be cut.
Sir Patrick Wall: It would be fair to Senator Nunn to remind the House that he advocated cuts only in order to persuade the European Governments to meet their proper defence expenditure targets. Most of them are not doing so.
Dr. Owen: The hon. Gentleman makes a fair point. There is a mood of exasperation in the United States, which has increased its final deficit, with very serious medium-term consequences for the world economy. One of the reasons for that increase is their increased defence budget. If we want the United States Government to work on reducing their deficit, it will be more credible for Europe to be prepared to fill the gap by increasing its conventional defence spending. We would then be able to make a serious suggestion to the United States to do something about its deficit and to accept some of the political problems of raising taxes.
The problem is that Europe — including the hon. Gentleman's own Government — is cutting defence expenditure by very large amounts. I urge Conservative Members to look at the question with great concern. I do not worry too much about the Labour Opposition, because they are not capable of understanding that, if they wish to be logical and consistent in their anxiety about nuclear weapons, which I share, the way round the problem is to be prepared to spend more on conventional defence.
I notice that the right hon. Member for Leeds, East (Mr. Healey) has not signed the motion in the name of the Leader of the Opposition. I hope that that is because the right hon. Member for Leeds, East is not going to vote for it [Interruption] I cannot conceive of it as possible — [Interruption.] It is not a silly point; it is a very serious point. How could anyone with the right hon. Gentleman's background vote to remove all nuclear bases from Britain? It is an extraordinary comment on the major shift of opinion that has taken place when one recalls that the right hon. Gentleman used to speak as Secretary of State for Defence in the Cabinets of previous Labour Governments.
I repeat that Conservative Members should look at this budget question with extreme seriousness. My major criticism is that the Secretary of State has produced a White Paper of whitewash. He has not faced the challenge of two or three years ahead, but has chosen to forget it. He has not drawn the attention of the House to the fact that there will, in effect, be a 1 per cent. reduction in the defence budget in 1986–87. He has not shown how he intends to grapple with that fact.
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The Secretary of State made no reference to his plans for reorganising the chiefs of staff. It is extraordinary that the other place has had a most detailed debate on how the chiefs of staff are to be organised. The statement of the Secretary of State was produced without any consultation. He has not even deigned to come to the House to explain his reasons.
I beg the Secretary of State not to deprive the single service chiefs of operational staff who can give strategic advice to the Secretary of State. I have long supported most of the other proposed changes—I think they are necessary — but if we emasculate the service chief by taking away his strategic staff, we shall greatly regret: it. I draw attention to a speech by Lord Lewin, who said:
"if the single service chiefs of staff are to continue to give valuable advice on the whole field of strategic priorities and resource allocation, which I am sure they should, they must have adequate staffs of their own."— [Official Report, House of Lords, 12 June 1984; Vol. 452, c. 1175.]
On that aspect of the Secretary of State's proposals there is an absolute need for him to modify his position, and I hope that he will do so.
Given the Secretary of State's problems with the defence budget, he has the right to look at every possible means of saving money, and I do not object to that, but I object to some of the ways in which he is doing it.
With regard to the dockyards, a new area of concern, may I remind the Secretary of State of the effort that was made to improve the efficiency of the royal ordnance factories? This House agreed that there should be a separate vote. The ordnance factories improved their efficiency and they responded to the changes that were made. It is possible in the public sector to achieve major improvements in efficiency. We have seen it with British Airways under Lord King. The ordnance factories, having responded to the specific demand to be more efficient and more commercial, were then ill-served by the decision to privatise them.
The dockyards have defeated everyone who has been concerned with them since Samuel Pepys. What does the Secretary of State do? He appoints his adviser—he is perfectly entitled to appoint people from outside industry —but he seems to be unaware that agency management of the dockyards is not a new proposal. It has been considered on many occasions. It was considered by the Mallabar committee as being
"the way to get the worst of both the commercial and Government Department worlds."
A long and detailed report on the dockyards published in 1980 by a committee chaired by the hon. Member for Ashford (Mr. Speed) expressed the view that one result of agency management would be that
"the management would have little incentive to make itself more efficient."
The Secretary of State's proposal is that the Ministry of Defence should own the dockyard, the capital equipment, and modernise it, but that somebody else should be brought in to run it. He is proposing that people who have spent a lifetime in the industrial Civil Service should no longer be civil servants, but should be employed by the private sector, presumably on five-year contracts, with the Ministry of Defence having the capacity to terminate the private contracts.
I cannot imagine proposals more destined to produce inefficiency and a bad service for the fleet, with badly fitted ships. This is taking doctrine and dogma to absurd lengths. By all means let us have a dockyard vote. I tried

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to get it myself in 1969–70 and failed. I have long believed it to be necessary. If we can get in the dockyards the efficiency that came to the ordnance factories, there will be support from many people inside the dockyards, but the agency management proposition will simply do further damage to the Royal Navy and to the refitting of the fleet.
Increasingly, the Secretary of State gives the appearance of a man who believes that he will hold his present office for only another year or so. His conduct is of someone who believes that fairly soon, with one bound, he will be free, simply leaving MINIS behind him. MINIS will not be a satisfactory legacy. I accept that the right hon. Gentleman thinks about the various problems. He made a thoughtful contribution about battlefield nuclear weapons, although I did not agree with all of it. I thought that it reflected a slight change in the Government's position, which I welcome. He knows that, with the defence cuts, he is up against it, but he should not have accepted, in his remit from the Prime Minister, that he should do something in regard to which Sir John Nott nearly lost his political reputation. The Secretary of State knows in his heart that it is wrong and that, however much management efficiency can be produced, it will not make up for the massive cuts.
I ask right hon. and hon. Members to think hard before they vote for the Government tomorrow night. This is not a defence White Paper that is deserving of support. Conservative Members should not be asked to vote for a defence White Paper which has implicit within it, because it is within the public expenditure forecast, a reduction from 3 per cent. inflation-proof spending to a minus 1 per cent. defence spend in 1986–87. If that is the new form of Conservatism, no wonder the people of Portsmouth, South voted as they did.
6.9 pm
Mr. Keith Speed: I am in considerable agreement with much that was said by the right hon. Member for Plymouth, Devonport (Dr. Owen), particularly about possible alternatives to Trident. I should like to develop that in a few minutes but, first, it would be churlish not to give a general welcome to many aspects of the White Paper, which is a substantial improvement on Cmnd. 8288, which came out in June 1981.
The recognition that we need a more powerful sharp end is absolutely right. I welcome the fact that there will be 50 operational frigates and destroyers, a number that I have always believed to be the absolute minimum requirement to enable this country to discharge obligations to NATO and, indeed, to carry out our national duties and requirements.
I am glad that it has been confirmed, to the Select Committee and elsewhere, that our ships' weapon systems, sensors, communications, and electronic counter-measures will be refitted and modernised as and when necessary to keep abreast of the threat. As the right hon. Gentleman has said, the south Atlantic conflict showed the vital importance of making sure that our capital assets are up to date and credible to the enemy. That means having sufficient industrial dockyard capacity and capability to do just that for our fleet.
However, the Select Committee on Defence, the British Maritime League and other expert commentators have noted that some areas give cause for considerable disquiet
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—for example, where there is no policy, where the policy is wrong or where the Ministry of Defence is not being frank with the House and with the country.
A frigate and destroyer force of 50 ships means, according to my calculations, an annual rate of ordering frigates or destroyers to maintain reasonably modern ships of three or four ships a year. Yet, apart from the type 22 frigates that have been ordered as replacements for those lost in the south Atlantic, we have had no new orders to replace the older type 12s and Leanders that will inevitably drop off the end as they get older. The type 12 frigates in the fleet are, for the most part, about 24 years old and the Leanders vary from 21 to 11 years old, although most of them are nearer 20 than 11, which means that it will be important to ensure a frigate ordering programme.
I hope that we shall be able to go along with the Dutch system, whereby batches of frigates are ordered. If and when we get export opportunities — I am thinking especially of the type 23 frigates—instead of saying to Nigeria, Indonesia or whatever the country might be, "You have got to wait four years for a new frigate," we should do as the Dutch do, and say, "Yes, that ship is almost complete and may even have been launched. You can have it with six months delivery." The key point is that another new frigate would be ordered immediately for the Royal Navy, so that it is tacked on to the fleet and so that the home fleet does not lose out. The Dutch have done that with their Kortenaers with considerable success, as my right hon. Friend probably knows.
I am also concerned about the ordering rate for submarines. My right hon. Friend will know that the majority of the Oberon and the Porpoise classes of diesel-electric submarines are more than 20 years old. One new type 2400 submarine has been ordered; the first of a very advanced class—probably the most advanced conventional submarine in the world. But we must do much better than that. I believe and hope that countries such as Australia and Canada will be very interested in the new boat.
I calculate that we must have an ordering rate of at least two boats a year; otherwise our Oberons and Porpoises will be very obsolete and very tired if we are to maintain the present numbers of conventional submarines.
There is an important question concerning where these submarines will be built, bearing in mind our Trident programme, the hunter-killer nuclear-powered programme, and the type 2400 submarines. It is clear that they cannot all be built at Vickers' yard. Will Cammell Laird or Scott Lithgow be re-opened, and possibly Yarrows? I know that that question worries right hon. and hon. Members on both sides of the House. We need answers fairly quickly.
I am sure my right hon. Friend is aware of the concern about orders for a further eight or nine Sea Harriers, which are needed in the next year or so to replace attrition losses and inevitable losses through accidents and other factors. The order has been long delayed and needs to be placed soon with British Aerospace. I understand that the Royal Navy is forced to rob Peter to pay Paul to keep the squadrons at sea with HMS Illustrious or HMS Invincible. That is not good, especially as HMS Ark Royal is coming into commission soon.
Several right hon. and hon. Members have mentioned Trident costs, which, as the Select Committee has reported, are steadily rising. The right hon. Member for Devonport raised the important factor of the overall cost

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to the defence budget. The Secretary of State was good enough to say in the Select Committee's evidence—it was reported in slightly obscure language at question 166 of the verbatim evidence at the end of the report—that, although the Trident programme in its peak years would account for 11 per cent. of the total equipment budget of the Ministry of Defence, it would take about 30 per cent.-plus of the Royal Navy's budget. That would be at a time when the budget was under great strain from the type 23 frigate programme, the type 2400 submarines, the follow-on to the Trafalgars in the hunter-killer submarine programme, commitments to amphibious replacements for HMS Intrepid and HMS Fearless, and the EH101 helicopter.
All those developments will come together and, quite frankly, there will not be the money to carry them through, especially if we intend to retain a 50-strong force of frigates and continue to order three frigates a year—unless we intend to continue to keep in operation the type 12 frigates and the Leanders until they are 30 or 40 years old. I do not believe that that is the intention, nor do I believe that it would be a wise course.
We must face the fact that, as procurement is going at the moment, it will take a very large chunk of the Royal Navy's procurement budget, when that budget is already very tightly stretched. The House, the Select Committee and everybody else agrees with the programme of conventional ships and forces to which I have alluded.
A report that has not been mentioned so far in the debate, but which should be mentioned, was one made last week of the apparently very successful ballistic missile interception over Kwajalein by one minuteman missile to another. These are very early days and I know that these are the first steps in a new technology. That report concerns me from two points of view. First, if the programme were carried through, it would have a newly destabilising effect on the anti-ballistic missile arrangements. We cannot ignore that.
Secondly, we must consider the technology that, for example, I found to be reported quite openly in the United States while I was there last week. The infra-red heat-seeking sensor on top of the minuteman missile is of sufficient sophistication to detect the heat from a human body at a range of 1,000 miles. This is very advanced technology. In another 10 to 15 years, where will that programme leave our existing ballistic missiles if it is carried forward?
A technical question mark hangs over the Trident programme, quite apart from the financial question marks, of which I have always had many. My preference in the past two to three years has been, reluctantly, for a submarine-launched cruise missile, to which the right hon. Member for Devonport has referred. My conversion is not a sudden deathbed repentance, because I wrote about it two or three years ago and I have voted consistently along those lines whenever the House has voted on the matter since then.
Expensive though Trident is, it is dwarfed in on-going annual costs by the sums needed to support—I stress "to support" — BAOR and our forces in Germany. The White Paper table shows that those costs stand at almost £1,000 million, all payable in foreign exchange in deutschmarks. The costs are rising steadily year by year and include the costs of maintaining 24,000 German civil
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servants, as well as schools, transport systems and roads. The German civil engineering industry is a significant beneficiary from the Ministry of Defence budget.
But none of that expenditure is improving the front-line efficiency of the RAF or, indeed, of our soldiers in Germany. Even if one does not go along totally with the editorial in today's edition of The Times, one is bound to ask whether Anglo-German relations are so fragile and whether the Alliance is in such a precarious state that we cannot at least look at the support costs. If we could halve those costs and save some £500 million, it might go a long way towards meeting the problems that the Secretary of State, or his successor, will discover when it is found at the end of the decade that we cannot fit a quart into a pint pot.
The Government should take a long hard look at that sacred cow, and we should discuss with our NATO allies whether we should be spending all those sums of money, or whether by having more mobile troops—even if the figure of 55,000 is sacrosanct—and more imaginative housing, education and transport schemes, we can make considerable savings on that Ministry of Defence real estate in Germany. At present, it costs us a great deal in deutschmarks and resources, and we cannot really afford it.
I turn to something mentioned by my right hon. Friend the Member for Spelthorne (Sir. H. Atkins), the Chairman of the Select Committee. I refer to the biggest lacuna in the White Paper — the lack of any reference to the Merchant Navy. At any time, that might be regarded as eccentric, but when the British merchant marine is facing its worst crisis since the battle of the Atlantic 40 years ago, it is very remarkable indeed.
In the circumstances, the Select Committee's strictures, which are outlined in paragraphs 49–53, are most restrained. The House will recall the words of the present First Sea Lord, who was, in July 1982, Commander-in-Chief, Fleet. Speaking of Operation Corporate, Admiral Sir John Fieldhouse said:
"I cannot say too often or too clearly how important has been the Merchant Navy's contributions to our efforts. Without the ships taken up from trade, the operation could not have been undertaken and I hope this message is clearly understood by the British Nation."
I fear that Sir John's hopes are doomed to failure, because I doubt whether the message is understood by the Government, and much less by the British nation, which shows every sign of lapsing back into the complacent indolence that existed up until April 1982. As the British Maritime League, the General Council of British Shipping and the Select Committee have graphically illustrated, the past few years have seen a dramatic decline in the number of ships in the British merchant fleet, down to about 760 merchant ships of 500 deadweight tonnes or more, as well as a dramatic decline in the number of British officers and ratings. That decline continues inexorably onwards month by month.
Unfortunately, by the end of this decade, the number of ships in the British-manned, owned and registered merchant fleet could be reduced to virtually nil. Can nothing be done to help? Are we just to accept it supinely? I agree with everything that has been said about the lack of corporate approach by the Government. Matters have not been helped by the Budget of my right hon. Friend the Chancellor of the Exchequer, although I supported its general thrust, which was quite first class. Unfortunately,

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the British shipping companies and British merchant seamen, both officers and men, have been badly hit by the provisions relating to capital allowances and income tax for those who spend a considerable part of their working lives abroad. Perhaps that effect was not realised at the time, but that is what has happened. At a time when they are already on the ropes, it is almost the coup de grace.
I should like to make some positive suggestions. First, of course, we want competition and efficiency, but that competition must be fair. Soviet liners and passenger ships charge below their operating costs, which is not fair. There should be some maritime anti-dumping legislation—if that is the right phrase—and we should at least insist on reciprocity. How many British cruise liners can pick up Russians at Murmansk or Leningrad on subsidised fares? I suspect that the answer is, not very many. We must understand that not only Soviet cargo and other merchant ships, but the trans-Siberian railway as well, are part of Soviet economic policy. The Soviet Union does not regard pricing or profit and loss in the same way as the Western world does. If we have not yet understood that, we have understood very little indeed. Again, action needs to be taken so that competition is at least fair, and reasonable prices are charged.
Secondly, we should have a tax regime that encourages, and does not penalise, shipowners and their crews. Thirdly, as the Select Committee recommends, details should be published each year of the merchant ships that are available for requisition in an emergency, together with a comparison for the previous years.
Incidentally, the question posed by my right hon. Friend the Member for Spelthorne was very good and should be answered. Merchant ships that are fitted with certain defence equipment—whether involving communications, close-in weapons systems, replenishment at sea, or whatever — could qualify for annual revenue payments to keep that equipment up to date and properly serviceable. In a very modest way, the cash flows of those companies could thus be helped. In addition, the Ministry of Defence and the Department of Transport would know that at a minimal cost a whole series of ships had all the modern and up-to-date equipment needed if there was ever a "Corporate" sort of conflict or a much more serious conflict in the north Atlantic.
Instead of earmarking many skilled Royal Naval personnel, whom we just do not have — and are increasingly unlikely to have—to man merchant ships that are fitted with chaff dispensers or the new close-in weapons systems which I know the Ministry is considering, why not have a major drive on that Cinderella of reserves, the Royal Naval Reserve? In that way, we could ensure that British merchant seamen were enrolled in the appropriate lists of the Reserve and were given the training to man the chaff dispensers, and communications and weapons systems. They would be more than capable of doing that, and with their refresher training, pay and bounties, it would represent a practical way of enabling the British merchant marine to ease the load of the Royal Navy while at the same time giving a much-needed boost to the Royal Naval Reserve. I hope that I have made those suggestions in a positive and constructive way, and that my right hon. Friend the Secretary of State will discuss them with my right hon. Friend the Secretary of State for Transport so that we can meet a very serious problem.
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I do not exclude the possibility of joint funding for certain ships. My right hon. Friend the Secretary of State has mentioned the new type of one-stop ship. There could be joint funding by the Ministery of Defence and the shipping companies, perhaps even on a wet or dry lease basis, so that we have at least a basic minimum in terms of tankers, cargo ships and all the specialist ships that are required to meet our security needs as well as our commercial and economic requirements. Without that basic minimum, I fear that in a few years time Britain and the north Atlantic nations generally could find themselves deprived of their essential requirements in terms of reinforcement and re-supply. That is not just my view, or that of the Select Committee, but the view of several very senior NATO Officers to whom I spoke at the Sea Link symposium in Annapolis last week.
The Merchant Navy is now facing a crisis and time is running out. We cannot wait another year until the next White Paper to see whether anything can be done about it, so I hope that my right hon. Friend the Secretary of State will consider those matters.
I make no apology for returning to my other worry, that of resources. I think that all will be reasonably well for the next two or three years, but unless more money is available we shall not be able to fit in Trident, the major aircraft programmes and the major programmes for the Army and the Navy, at the end of this decade. We must face up to that fact, and decide what we are to cast away, or change the policy and agree to increase expenditure by 3 to 4 per cent. in real terms. Incidentally, I am not trying to anticipate what the Select Committee will discuss.
However, unless we start to take decisions now, we shall end up with the worst of all worlds. We shall spend a lot of money on developing Trident and other weapons systems so far and then, when the money runs out, we shall have to cancel, with all the cancellation charges involved. Money will have gone down the drain and the morale of the services will plummet. That will do my party no good politically and, much more importantly, it will do this country's security no good either.
6.30 pm
Mr. David Young: I regret that the Government base their defence strategy on nuclear weapons. I have never understood the argument for having an independent nuclear deterrent because it means that we must either pay a great deal of money for an expensive toy or assume that the United States has opted out of supporting the Alliance.
The Government's determination to place cruise missiles in Britain has ensured that we shall be a primary target if a war breaks out. I assume that there is no question of us surviving the United States. There is an argument for saying that both the United States and Russia would be prepared to see a limited nuclear war here rather than have one between themselves. If we view defence issues flexibly we cannot disregard that probability.
For a country with our limited resources it is incredible that we should take on board the vast and escalating costs of Trident and at the same time argue that we have the resources to support our conventional forces. In recent years Britain has been more and more involved in limited wars. The issues become clear when one considers the Falklands campaign. Now that the horse has bolted and disappeared the Government are determined to remedy some of the issues. When we fought the Falklands

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campaign we did not take on a major first-class power but a very small one indeed. If the Argentinians had launched their attack six months or 12 months later we should not have had the resources to send even a fleet, let alone anything else. When we took Port Stanley some of our batteries were down to six rounds per gun.
If we send men into limited wars we have a responsibility to ensure that they have the necessary resources. The Army equipment exhibition is now at Aldershot. I suppose that one can argue about the connection between defence equipment, employment and exports of military equipment. We should not forget that nearly all the men killed in the Falklands campaign were killed by weapons which, if not supplied by us, were supplied by our allies. All hon. Members must ask themselves how many pounds raised equals one British life lost. Politicians must examine arms sales in detail. If arms sold by us are eventually used against our own people we should all be concerned.
A major employer in the Bolton area is British Aerospace at Lostock. Supplies were being sent to Argentina within weeks of hostilities being declared. One of my major nightmares was that some Bolton lad would be killed by a missile produced in that factory. We must consider the implications of our arms sale policy. The Labour Government were also involved in such sales, but two wrongs do not make a right. We must consider our forces when we send them to do a job.
Mr. Robert Atkins: The hon. Member for Bolton, South-East (Mr. Young) understands the difficulties. What would he say to British Aerospace workers in Manchester who face the prospect of production winding down because of the Nimrod line closing? It is suggested that we might be able to sell Coastguarders to replace Shackletons for maritime patrols in South Africa. Does he think that the jobs and production lines in Manchester are more important than selling aeroplanes to South Africa, with all the problems that that involves?
Mr. Young: One must balance political judgment. I say that the problem should be considered. I do not dodge the implication. The guys who get the cash are not the guys who face an attack. It is easy to argue in favour of profit if one is not the guy who is facing an Exocet missile. That is the issue. We can be fighting ourselves. We talk about the Russian threat, but the Americans and the Common Market countries are busy feeding the Russians because of the profit motive.
We face a difficult problem. There is no neat solution. We must consider the potential danger of selling weapons that can destroy the men whom we send to fight.
No hon. Member would consider selling weapons to Ireland, but we sell them to regimes which are just as potentially dangerous and with which we could be involved. If I had a quick solution I should give it, but at least I am honest enough to pose the question.
Mr. Roland Boyes: The weapons industry has experienced some of the largest job losses in the past few years. We cannot blame peace activists for that. Management, company policy and profiteering must be responsible.
Mr. Young: About 200 jobs in Bolton were disposed of because the Government decided to go for an American system—the Harpoon—rather than a British system, the
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Sea Eagle. The workers point out to me forcibly that we lost not only the jobs but the technology. There is no neat equation.
We are forming a morality to fit our cheque books. I condemn that system. There is no easy solution and no simple party argument can be used. The argument is whether morality or cash comes before the life of the soldier. We cannot regard defence commitments without also considering foreign affairs. One of the lessons of the Falklands campaign was that there was a definitive lack of communication between the Foreign Office and the Ministry of Defence.
British forces are now committed in Cyprus. For 20 years we have made the highest commitment to UN forces there. An explosive and divisive situation on that island has dragged on for months and many of us believe that the Americans are not too sad about it. Where is the initiative of the Foreign Office on that issue? If there is a war on that island, the British contingent to the United Nations force will be involved. I agree that we back the Secretary-General's motives but as a guarantor of the treaty this House should be taking a positive step to create the circumstances that would permit the island to unite once more. We cannot go along with the events there and not speak out against the unilateral declaration of independence and, at the same time, argue that the treaty is being observed. The Government must act on that matter.
I am worried by a statistical abstract for the United States for 1982–83, which shows that the United Kingdom has moved from 10th place in 1978 to sixth place in 1981 as a major purchaser of United States arms and equipment. My great worry about British Aerospace, Lostock, and the purchase of Harpoon rather than Sea Eagle is that we are depending increasingly on American weaponry and the technology that goes with it. Will the Government review that? How can we talk about being independent if our technology and weaponry depend on those of another country, albeit an ally? American intervention in Grenada underlines that point. To be independent is a matter not merely of words but of independent resources, independent forces and complete independence from anyone who may have different interests in the same area.
Finally, I am worried that when the merger between Thorn-EMI and British Aerospace was mooted on 16 May, the Minister of State, Department of Trade and Industry seemed to suggest that the Government would stand apart. I hope that when companies merge, one company remains a major supplier of weaponry to the British forces. That is seen as important not only for commerce but for the Ministry of Defence. We cannot claim to be independent if our technology is not independent, and the companies producing that technology are not independent companies that may have foreign interests.
6.43 pm
Mr. Julian Amery: In response to your appeal for brevity, Mr. Speaker, I shall confine myself to one subject. I shall speak about the proposals of my right hon. Friend the Secretary of State for staff centralisation in the Ministry of Defence and the consequent weakening of the chiefs of staff organisation. The matter is of vital importance and I hope that the House will bear with me if I go into it in some detail.
As I understand the proposal, the chiefs of staff and the chief scientists are guaranteed access to the Secretary of State. But they are to report to him through the Chief of

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Defence Staff and the permanent under-secretary. They are to be deprived of the vice-chiefs of the individual services—that is, of the section of staff responsible for strategic as distinct from administrative policy.
I am worried about my right hon. Friend's approach to the matter. Paragraph 211 of the defence White Paper states:
"the issues which faced the authors of the 1963 White Paper on the Central Organisation for Defence still remain largely unresolved. The Ministry of Defence has survived as a federal structure, based on three largely autonomous Service Departments."
The meaning of that statement is clear. The Secretary of State dislikes the present position and wishes to move towards closer integration. But is closer integration necessary or desirable? Why has the Ministry of Defence remained federal, 20 years after Lord Mountbatten's proposals? The basic reason is the tremendous difficulty of separating strategy from administration. A basic principle of British military thinking has been that the one cannot be separated from the other. Perhaps it would be possible if we had a single service, as the Canadians tried to have, but it is not under our present system. I understand from the White Paper that my right hon. Friend adheres firmly to the existence of three separate services, so we face the problem of how strategic policy can be separated from administration.
In 1963, which is a long time ago, our military posture was very different from what it is today. We had important headquarters in the Mediterranean, Aden and Singapore, where the commander-in-chief was responsible for all three services. The action was there. The action in Kuwait involved the Army, the Navy and the Air Force. So it was in Singapore, in the "confrontation" against Sukarno, during which the right hon. Member for Leeds, East (Mr. Healey) found himself in improbable association with Sir Walter Walker in a successful campaign. Our operations then were national and tri-service. We may have more of them. The Falklands is a more recent example. It is more likely, however, that in foreseeable military operations we shall co-operate with our allies in NATO and even in those outside NATO. If the Gulf were to catch fire, we would be likely to intervene, if we intervened at all, with the United States and France.
If I am right in this, co-operation between our individual services and those of other countries could be at least as important as co-operation between our own different services. Obviously, in NATO, co-operation between the United States navy and the Royal Navy is of major importance. So is co-operation between the Royal Air Force and the United States air force. Our air forces are side by side in East Anglia. When I was in the Air Ministry, co-operation with the United States air force at professional and political levels was of vital importance.
Could it be that, since 1963, inter-allied co-operation has reduced the need for integration and strengthened the importance of co-operation between the individual British services and their foreign counterparts? If so, should we not enhance rather than downgrade the authority of the service chiefs and, in this world of fast-moving technology, of the chief scientists? I remember well the immense authority that Lord Zuckerman wielded in Washington when he was a chief scientist at the Ministry
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of Defence. There might even be a case—I throw this out for the benefit of ambitious colleagues—for reviving the service Ministers in some form.
The strength of the old system was that middle-rank officers had easy access to their professional chiefs—the chiefs of staff—and to their political chiefs. Today the pyramid at the Ministry of Defence is immensely steep and will become much steeper if the proposals go ahead. The downgrading of the service leaders could be dangerous to morale and could jeopardise civilian control. I do not say that we should return to the pre-1963 formula, but need we go further than we are at present in the direction of integration? Did not the successful Falklands campaign confirm that the formula is about right now?
Any Secretary of State has two main responsibilities. One is to make the most efficient use of the financial and human resources at his disposal and to ensure a minimum of duplication, delay and waste. For that purpose, business techniques can be extremely useful. Mr. McNamara tried to introduce them into the United States defence establishment, with varying success. Cost-effectiveness can never be a substitute for profitability, but I support what my right hon. Friend is doing with the proposed office of management and budget. His experience of business and at the Department of the Environment justifies him in going ahead with the proposals.
However, will the elimination of the vice-chiefs of staff, apart from saving a few jobs, make any contribution to the maximum efficiency of financial and human resources? Yet the loss of their advice could be felt deeply in the Secretary of State's other and greater responsibility, which is for strategy. He should play a major part in determining Britain's overseas policies. Some issues before him will be concerned only with the policies of single services. There might be arguments about whether priority should be given to surface ships or to submarines, or about the evaluation of weapons systems. Some will call for a broader defence view. Is the forward strategy in Germany for the defence of central Europe appropriate? What should our attitude be towards the threat of chemical warfare? At what point, and how, should tactical nuclear weapons be used? What will be the impact of the "star wars" programme on our present thinking and future plans?
There are also many problems at the interface of defence and foreign policies, including proposals for the reform of NATO and whether we should encourage the revival of the Western European Union. How much weight should be put on the defence of our out-of-area interests? How can we monitor the proposals for arms control? In all those areas, efficiency cannot be measured by cost-effectiveness; they are matters of judgment. Preventing or winning a war is not a matter of efficiency; the problem is how to judge the right line to take.
Every Secretary of State, even a Haldane or Churchill, is by definition an amateur, however much he may think he knows about warfare. All he can do, as the Minister in control, is choose among the options put to him or to encourage fresh thinking. There is a good French saying:
"To govern is to choose."
That is all that a Minister can do—to choose between the options or modify them. But if the options are presented by only one Chief of the Defence Staff, backed by only one staff, instead of by four chiefs of staff and the chief scientists, how much choice will the Secretary of State have?

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Lord Cameron, either in another place or in a letter to The Times, talked about his fear of a strong Secretary of State and a weak Chief of the Defence Staff. I would be more worried the other way: if we had a strong Chief of the Defence Staff and a run-of-the-mill Secretary of State, how could the latter stand up to the advice given to him? He would avoid becoming a mere public relations officer for his Department, and nothing more than that, only if the options were put before him by the different services and the chief scientists. My right hon. Friend is certainly a good public relations officer, but I hope he will be much more than that. I have much higher ambitions for him, as I hope he has for himself.
When I was at the Air Ministry, I found the arguments among the chiefs of staff extremely constructive. There were arguments about aircraft carriers as against aircraft based on scattered islands; about whether the deterrent should be seaborne or airborne; about how far it was important to have bases east of Suez or whether ships could take their place; and about how strategic tactical nuclear weaponry should be used.
It is perhaps worth recalling that in the second world war, from 1940 until 1945, Sir Winston Churchill did not even have a Chief of the Defence Staff. He had a relatively junior officer, General Ismay, to act as liaison officer with the chiefs and to report on what they were thinking, although he could not give them orders or intervene much in their discussions. Churchill was his own Chief of the Defence Staff when it was necessary, and we did not do too badly.
On the other side of the line, German commentators have often said that one reason why Hitler lost the war in Russia was that he over-centralised. Although the OKW enabled him to impose his will on the army, he was denied the choice of options that he might have had with a less centralised organisation.
I beg my right hon. Friend not to underrate the importance of his job. He is not just a manager who ensures that money is spent effectively. He is at the head of the most powerful war machine that Britain has ever had. No British First Lord of the Admiralty had anything like four Polaris submarines, let alone Trident and other new weaponry, at his disposal. At a time when the danger is great, my right hon. Friend will need the broadest spectrum of professional and scientific advice if he is to bring all this qualities to the fulfilment of his work.
In another place, my noble Friend Lord Trefgarne said that the decisions for reorganising the central staff are not final. I hope that my right hon. Friend's mind is not closed. By all means let him strengthen the Chief of the Defence Staff if he wishes to, but he should not restrict the access of the other chiefs of staff and the chief scientists to the Secretary of State. Let them come as a matter of routine, not as a special provision. If they do not, they will be relegated to a subordinate role in the eyes of the services and their allies. Let them keep their strategic vice-chiefs and staffs, and let my right hon. Friend ensure that the options are debated freely in front of him and that he has a wide spectrum of choice.
6.59 pm
Mr. Roland Boyes: I shall follow the example of the right hon. Member for Brighton, Pavilion (Mr. Amery) and speak to a single
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topic, but before doing so I wish to refer to the hypocrisy of the Secretary of State when he referred to lack of talks aimed at achieving peace.
I wish to draw the attention of the House to the Government's voting record on nuclear matters at the United Nations. In December 1983 we voted 27 times. On four occasions we voted positively, on 13 occasions we voted against resolutions, and on 10 occasions we abstained. To demonstrate how isolated we were, I take two examples at random. One of the United Nations resolutions was on the cessation of all nuclear weapons test explosions. Only two countries voted against, one of which was the United Kingdom. There was another resolution on general and complete disarmament — a review and supplement to the comprehensive study of the question of nuclear-weapon-free zones in all its aspects. A total of 146 nations voted for, none against and three abstained, one of which was the United Kingdom. Consequently, the Secretary of State's opening remarks were unconvincing and do not stand up to any serious analysis. In fact, our voting record at the United Nations, particularly on the two resolutions to which I have referred, has been shocking to say the least.
Paragraph 8 of annex A to the defence Estimates states:
"The development and deployment of long-range cruise missiles is one of the more significant developments in the past year … and deployment of sea-launched cruise missiles … on submarines and surface ships is expected from the middle of this year."
In an interesting debate on cruise missiles, in which my right hon. Friend the Member for Blaenau Gwent (Mr. Foot) made a brilliant speech, we covered in great detail the problem of ground-launched cruise missiles. However, to the problems that that causes for the British people we must now add a new dimension. Ground-launched cruise missiles took us into a new, dark area, but the problems that we shall face once there are a large number of sea-launched cruise missiles will be many and difficult.
It is expected that as many as 9,000 cruise missiles could be built, approximately half of which will be Tomahawk missiles. Many of them will have nuclear warheads. We are not exactly sure how many. but the guesstimate is between 15 and 25 per cent. In other words, 1,000 cruise missiles could be placed on surface ships and submarines.
The United States is already preparing about 76 ships and 80 submarines to be equipped with these deadly and lethal weapons. These long-range weapons can travel approximately 1,500 miles and are very accurate. They can land within 100 yards of a target, and together with Pershing 2, MX and similar weaponry, offer a tremendous first-strike potential for NATO forces.
These weapons have not yet reached their full potential and development. Given massive improvements which will make them virtually undetectable — they are extremely difficult to detect even at their present level of development—they will become more accurate. They will be fitted with a special facility to determine whether the first target has been destroyed and, if so, will be programmed to fly on to a second target. The cliché in radar terms is that this weapon has the signature of a seagull. In other words, the strength of this weapon is its virtual undetectability.
The problems for the United Kingdom will be compounded by the development of sea-launched cruise

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missiles. We do not know how many, although we have some idea of the number of ground-launched cruise missiles that will be stationed in Britain.
There is also the problem of control. The Government tell us continually that the ground-launched cruise missiles are under joint control, but those of us who have visited the Greenham common base and talked to the people in charge know full well that only the United States is responsible for determining when ground-launched cruise missiles are fired.
If sea-launched cruise missiles are stationed on American ships in British waters, they will be completely under the control of American forces. We know that about 100 ground-launched cruise missiles will operate on British territory, but there could be 1,000 sea-launched cruise missiles on ships and submarines in British territorial waters.
Mr. Paddy Ashdown: I share many of the hon. Gentleman's concerns about cruise missiles, but I was surprised when he referred to them as a first-strike weapon. It is true that cruise missiles fly very low, but they also travel very slowly and it will take them four hours to get to Moscow. Even if they avoid radar detection, does the hon. Gentleman not believe that about 100 of these weapons flying at 50 ft over the German border will wake somebody up?
Mr. Boyes: Given the work that the hon. Gentleman has done in this area, he belittles himself by asking that question. If a nuclear war were to start, it is obvious that cruise missiles would follow the Pershing 2s and other missiles that were fired first. The cruise missiles would be used in a mopping-up operation.
I shall not get drawn into the first strike-second strike argument, because that allows us to be deflected from the main danger, which is that cruise missiles have made Britain a more dangerous place in which to live. Whether they are first strike, second strike or 121st strike does not reduce that danger.
To discover whether sea-launched cruise missiles pose a danger I referred back to questions about the number of ships visiting British ports. The hon. Member for Meirionnydd Nant Conwy (Mr. Thomas) asked how many ships and submarines from the United States visited our ports between 1979 and the latest date for which information was available. It appears that American ships visit 14 different ports and that an average of 40 ships and three or four submarines do so each year. That reveals the magnitude of the dangers facing us, because we cannot possibly know how many of those ships are carrying cruise missiles.
Recently I asked the Secretary of the State for Defence
"whether he will put a limit on the number of sea-based cruise missiles that can be in British territorial water at any time".
The Minister of State for the Armed Forces gave the simple, definitive answer:
"No".—[Official Report, 7 June 1984; Vol. 61, c. 230.]
Today I have tabled further questions to ascertain what conditions, if any, American ships must satisfy before being allowed into British waters.
The Minister was vague when he answered my right hon. Friend the Member for Brent, East (Mr. Freeson). He was deliberately vague about whether the Americans would make use of facilities at Holy Loch, because there
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had been no request to bring vessels carrying sea-launched cruise missiles to the United Kingdom. Under what conditions will the Minister allow those ships into British ports?
Most hon. Members—even Conservative Members—want arms talks leading to mutual and verifiable reductions. That would make Britain in particular and the world in general a safer place. The danger with the sea-launched cruise missile is that it is impossible to verify how many there are and where they are. It is extremely difficult with ground-launched cruise missiles, because they are mobile and can be trundled around the country. Even though satellites can be used to count them, the worst has to be assumed because the Soviets cannot take into account that what appear to be two missiles in different locations is in fact one missile being trundled around the country. But there is no way that one can find out how many sea-launched cruise missiles there are. It is a small missile which can fit on almost anything from a rowing boat to an aircraft carrier. How will the Soviets or any other enemy know which ships are carrying cruise missiles, whether they are nuclear or conventional weapons and where they are at any one time? If they cannot be verified—an essential part of arms talks—how can we ever take a step along the road to peace?
By allowing sea-launched cruise missiles into our ports the Government are endangering not only Britain but the whole nuclear scene. Let us look at what some Americans have to say about that. Christopher Paine of the Federation of American Scientists called the sea-launched cruise missile
"a monstrous and wholly gratuitous complication for arms control."
The Centre for Defence Information calls it
"the greatest danger to arms control."
In other words, the development and operation of this weapon is leading to the point where arms control talks may be finished for all time.
The American Republican Senator, Charles Mathias of Maryland, said:
"if you start this particular kind of arms race"—
the sea-launched cruise missile—
"it will be absolutely impossible to get reductions. In five years, as the Russians catch up"
there is no doubt that they are well behind us at the moment—
"we will put ourselves in a position in which all the principles of arms control will be destroyed."
One of the key spokesmen in the United States, Ambassador Smith, followed that up by saying:
"it is too often forgotten that the progress we have made in nuclear arms control to date has depended very importantly on the fact that weapons systems involved have been relatively very visible to the kind of surveillance technology that we had developed. This all-important visibility may end with the deployment of sea-launched cruise missiles. The naval cruise missiles, therefore, stand a very good chance of increasing the indeterminacy of the strategic threat in the 1980s and 1990s and of undermining one of the key foundations of arms limitation agreements."
The variety of different launching platforms and military technology making surveillance impossible have put us in a nightmare position. We have moved from a difficult position, to a virtually impossible position, to an absolutely impossible position. We should look to the strategic arms reduction talks. In an important article in The Christian Science Monitor, Thomas Hirschfeld, a

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former senior arms control negotiator and a retired State Department official, put the matter as well as it could be put. He said:
"once the long-range cruise missiles are deployed, the Soviets will want to take account of them in START. Under existing rules, they will count the entire US sea-based cruise missile force as nuclear, insist on limiting their numbers, or on reducing them or getting compensation for them out of other parts of the US strategic forces."
We have got ourselves into an impossible position. The world is becoming more dangerous daily, but talks to reduce the tension and danger are getting nearer and nearer to the point of being absolutely impossible. We must get out of that vicious circle. The Government must take positive, vital and urgent action. They must work to bring some sanity to the arms talks. They must work to increase the safety of our people as a contribution to the struggle for world peace. To do that it is necessary that the Government rid our land of ground-launched cruise missiles and all our territorial waters of sea-launched cruise missiles.
Labour Members will work and struggle to rid our lands and waters of all nuclear weapons. We are the party with the real concern for the defence of our people. We realise that as long as we have cruise missiles of any kind in our land and seas we must be the first prime target for any attack by an aggressor.
7.16 pm
Mr. Julian Critchley: I shall be brief indeed. I have long believed that there is far too much oratory in this place. In another place, Lord Carver said last week that the Secretary of State should focus upon weapons procurement—presumably in Europe—and stop worrying his generals. Has he a point? I rather suspect that Lord Carver has.
Some hon. Members will know that in the Secretary of State's office in the huge Ministry of Defence hangs a superb oil painting by Orpen of David Lloyd George. I gather that the Secretary of State moves with it from one appointment to another. But why hang a portrait of David Lloyd George in the Secretary of State's office at the Ministry of Defence? My right hon. Friend and I studied history together at Oxford and I remember how conscientious a student he used to be. But surely he recalls the conflict between the soldiers and the "frocks" in the great war. Lloyd George was greatly loved, but not by soldiers. Why not put up a portrait of Hore-Belisha instead?
Will the end of the growth in defence spending coincide with the term of office of the Secretary of State at the Ministry of Defence? By April 1986 he will have been there for more than three years. If so, I do not envy his successor. Indeed, after 1986 there could be a reduction in spending, leading to a process of disarmament through inflation. Is the House aware of that prospect? Is the Conservative party in the Commons aware of that prospect? Has it thought through the implications of no real growth in defence spending after 1986, especially if we were to purchase a more expensive conventional defence, thereby raising the nuclear threshold? I do not think that we have thought this through.
Today, the editor of The Times has remounted his old hobby horse. He is calling for a major reduction in the numbers of the British Army of the Rhine. It is an editorial that he rewrites three times a year. Yet the lead story in The Sunday Times yesterday was about an amendment on
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the part of Senator Sam Nunn, to be moved in the Senate, which would link the withdrawal of 100,000 American troops from Europe with a far greater defence effort on the part of the European members of NATO. How would the Secretary of State respond to the amendment were it to be passed in both Houses of Congress, and what message has the Secretary of State for Mr. Charlie Douglas-Home?
What, then, are the most useful things that the Secretary of State can do? He can squeeze the profit margins of our defence industries—and about time. He can streamline the apparatus of the Ministry of Defence, but he must recognise that there are limits to such an exercise, and costs. He can be nice to the Western European Union.
We are witnessing the resurrection of the Western European Union—proof, as if it were needed, of life after death. In the past the French have flirted outrageously with that somewhat middle-aged body. Has Monsieur Mauroy at last consummated the affair? I have spent the best years of my life introducing reports in the Assembly of the Western European Union which no one ever bothered to read. At the recently held meeting of the Foreign Ministers of the WEU, Monsieur Mitterrand and Monsieur Mauroy—why are other people's Socialists far more attractive than our own?—put forward proposals that the Western European Union, the heart of European NATO, should organise collectively the production of arms. I hope that Her Majesty's Government support the idea. We do not wish to rely exclusively on the American arms industry for advanced technology. It used to be said in my day in Paris that one could sleep as well in the Avenue Wilson—Woodrow, not Harold—as anywhere in Paris. Perhaps that will no longer be true in the future.
Finally, I understand that a serving soldier will soon become Britain's first astronaut. Has the Secretary of State any plans for putting a woman in space? [Laughter.] If so, will he confide in us and answer some of the questions that I have raised today when he winds up this two-day debate, not this year, I understand, but next year?
7.23 pm
Mr. D. E. Thomas: I shall not attempt to pursue any of the metaphors or the parable of the hon. Member for Aldershot (Mr. Critchley). But it cannot be denied that in his opening speech the Secretary of State shot himself in the foot when he discussed deterrence.
When I began to have to take an interest in defence policy in the 1960s we always heard about "the deterrent". I noticed that some Government supporters who still think of war in 19th-century terms used that phrase today. However, in discussions with the Secretary of State and with American and Soviet strategists the term "deterrent" has now become "deterrence"—a process of deterrence.
In this debate and in the White Paper, the Secretary of State is trying to persuade those sections of the British public and the Western European public who increasingly are becoming desensitised by the appalling prospect of the arms build-up, arms sophistication and the war-fighting strategy, and the mass campaigns of the peace movement throughout Western Europe and increasingly concerned about the prospect of the reality of a nuclear exchange that, somehow, deterrence is still a stable concept and an idea which has guaranteed and can guarantee peace. The right hon. Gentleman repeated the statement that we have heard

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so often from people in his position, that it was the existence of nuclear weapons that had guaranteed the peace of Europe for 40 years.
I ask the Secretary of State one simple question, and I shall not press him to answer anything else that I ask him if he answers this question. How long does he expect the existing idea of deterrence to protect us from nuclear war?
I read the Secretary of State a quotation from Ken Booth, of the international politics department of the University College of Wales. Writing in a recent book on the dangers of deterrence, he says:
"Will the nuclear threat always protect us from nuclear war? It is doubtful, and the past is a poor guide, for less than forty years is only a moment in human history. The absence of a nuclear war in such a brief period offers little grounds for unlimited confidence about the indefinite future. The nuclear age is still in its infancy, and, in the long term, we should recognise that in the Argentinian scrap-metal workers in South Georgia, and in the wounded Israeli Ambassador in London, there lurked the ghost of Archduke Ferdinand."
I ask the Secretary of State to address himself to that question. How long do the British Government consider that deterrence can maintain peace in their terms, and how long does he consider that international security can depend on that concept?
As the Secretary of State said when he was shooting himself in the foot, it is a concept that he cannot use both ways. Either he has a credible deterrent or he has not. Paragraph 124 of the section of the White Paper, which discusses developments in NATO's defence posture, yet again throws up the contradiction at the very base of the idea of deterrence as somehow being a stable concept.
Paragraph 124 reads as follows:
"In sum, the aim of the Alliance remains to sustain an effective triad of forces—conventional, theatre nuclear and strategic nuclear—to ensure the continued credibility of the Alliance strategy of flexible response. We believe that this strategy remains the basis of a credible deterrent, and that there is no better alternative available. This is not to say that we cannot enhance our deterrent posture".
A credible deterrent, therefore, by the right hon. Gentleman's own logic and according to his own White Paper, is not a static concept. It needs to be enhanced. As a sop to the peace movement the paragraph adds:
"and reduce further the risks of conflict within the existing strategic framework."
In other words, the notion of deterrence is itself an unstable notion, and I shall try to argue briefly that the notion of deterrence is a con for a continued, escalating arms race. That is the experience of the past 40 years of the nuclear era, and it seems to be the increasingly likely experience of the next 40 years until we get that devastating nuclear exchange, with all the consequences for the biosphere, the ecosphere and the environment of which we have learnt recently.
I am not concerned about replying to some of the detailed arguments set out in the White Paper about the balance of nuclear forces other than to say that the way in which the White Paper is couched and the graphs are drawn is calculated to establish in the public mind the idea that we are aiming for some kind of balance of forces, that we have got it wrong, and that the Soviets are in the lead.
The arguments are deployed in such a way that the figures used are delivery systems and not warheads. We know that already in 1984 the United States has more than 10,000 strategic warheads and that the Soviet Union has about 8,700. There was a substantial increase in the United
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States numbers in the 1960s and 1970s, but this has levelled off, and we are moving into a position where, by 1990, the United States will have 17,500 warheads and the Soviet Union some 14,500.
We are therefore in the middle of a major strategic nuclear arms race. This is what the Secretary of State, in his sentimental affection for the concept of a stable deterrent, seems to deny, and therefore he is forgoing any move towards a negotiated reduction in that strategic nuclear arms race. He cannot have it both ways. Either hė has a stable deterrent that works or he has a deterrent that must continually be enhanced in its credibility, which can mean only one thing—a continued indulgence in the strategic nuclear arms race. If that is not the case, I should like to have it explained to me how we can have a continued stable deterrent that is not continually enhanced and therefore does not lead to an arms race. Does the Minister wish to intervene on that point?
The Parliamentary Under-Secretary of State for Defence Procurement (Mr. John Lee): No.
Mr. Thomas: Perhaps the hon. Gentleman will reply when he winds up.
The Government expect us to believe in this mythical notion of deterrence as if it were something that has been scientifically and objectively proven, or as if it has a firm scientific or strategic base. It is no use waiting to see whether it fails and then setting up a committee to find out what went wrong, because by then it will be too late.
The whole idea behind nuclear deterrence is that no one would ever dare use these weapons because they are too awful. This is the root of the problem. If they are too awful to use, the threat to use them is not credible and they are no longer a deterrent. The arms race is the result of the idea of the deterrent and is a frantic attempt to make the incredible credible. As we know, the arsenals of the super-powers are enough to turn the entire planet into a meaningless lump of rock, yet we are told in all seriousness that we do not yet have enough of a deterrent to be credible.
The problem for the military is that, after searching for centuries for yet more firepower, they suddenly find that they have so much that they cannot use it. The solution that they have developed is to threaten to incinerate the planet a second time. It is not sufficient to do the job in a couple of hour; to be credible, one must be able to use nuclear weapons in a tactical way as if they were no more significant than high explosives.
The drive of the arguments employed by strategists shows clearly the ways in which the ideas of an alleged deterrence have developed to make nuclear war thinkable and nuclear weapons usable. There is a filthy technological determination about the way in which the strategists make deterrence credible—in other words, make the weapon potentially usable. Therefore, by talking about it as strategists and defence experts do, they make it acceptable to the public that such developments should take place.
Krass, writing in the Stockholm International Peace Research Institute yearbook 1981 on the evolution of military technology and deterrence strategy, made this point. He stressed:
"the strategies of flexible counter-force and extended deterrence which have now evolved are hardly distinguishable from the coercive strategies and threat and counter-threat which have characterised the politics of the industrialised world for over a

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century … both the purpose and effect of military technological efforts since 1945 have been to overcome notions that nuclear weapons are unusable and that nuclear war is unthinkable. The 1970s in particular have produced technological solutions to many of the limitations which in past years have inhibited national leaders from using nuclear weapons as instruments of political coercion and military power."
The use of the available systems is for making nuclear weapons usable. Richard Burt, who is a senior member of the present United States Administration, said this in NATO Review in 1982 when he was talking about the evolution of the United States START approach. He said:
"Systems which threaten the other side's forces with quick, pre-emptive destruction are destabilising because they undermine the other side's confidence in its deterrent capability. In a crisis situation, this could result in a temptation to use these systems first out of a fear of losing them."
Therefore, now, instead of having the idea of safe, second-strike forces stabilising the crisis, there are increasing perceptions of first-strike possibilities making the situation even more unstable.
As the Secretary of State accepts, or appears to accept, every American strategic innovation as part of British policy and acceptable to Britain, and as he goes along with all this, what is his position on the increasing move towards usuable nuclear weapons and thinkable nuclear war? Where does he stand in terms of, in particular, the air-land battle strategy developed by the Americans? Although he hides behind the argument that this is not NATO strategy and therefore is not something for which he is accountable, America is the leading partner in the Alliance, and is therefore able to dictate its own strategies within its military exercises on the continent of Europe. Presumably the Americans are neutralising the strategy that includes the use of nuclear weapons. The Secretary of State has to disengage himself from this continual acceptance of every new war-fighting strategy that emerges from the other side of the Atlantic.
Increasingly, there has been a desperate search by the military for ways to continue to make its deterrent more credible. The result is that we now have people developing strategies, and weapons are being developed in parallel with those strategies or in anticipation of them with people believing that this can create security and stability. I tell the Conservative Members who take a sentimental interest in defence that in the history books, for every battle of Britain there is a charge of the Light Brigade and for every D-Day there is a Dunkirk, a Somme or a Suez. When will we have the nuclear Suez?
In the middle east, South America, South Africa or Europe—I am talking about countries or areas where nuclear weapons are or will be deployed—when will we get to the situation in which there will be a series of critical developments such as those we have seen throughout the history of warfare? Those of us who have tried to study history should know how wars happen. They do not happen because people believe in stable structures of deterrence but because allegedly stable structures of deterrence break down. The difference is that in our generation when those structures break down the result is the incineration of the planet and the destruction of our environment.
The Secretary of State has completely failed to address himself to the issue of his apparent policy on multilateral alternatives and multilateral disarmament. I quote again from Ken Booth, who argues strongly in the book from which I quoted earlier::
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"Multilateral disarmament on any significant scale is an illusion. It is contrary to the nature of states. Consequently, multilateral disarmament policies must therefore be regarded as a cheat — a tactic in the business of arms competition. Governments pursue such policies largely for propaganda purposes and, if successful, to enhance their own security in relation to a competitor. At present 'multilateralism' is more often than not a symbol by which the supporters of existing strategies are attempting to undermine the anti-nuclear momentum of the 'peace movement'. Multilateral disarmament negotiations are an exercise in which (a) it will be demonstrated that the adversary is unreasonable and uncooperative, and so the continuation of existing armaments policies will be justified, or (b) an attempt will be made to manouevre the adversary into accepting a disadvantageous agreement. Disarmament talks have little to do with comprehensive disarmament or international security. It is not surprising therefore that so many people are so cynical."
It is not only academic experts like Ken Booth who have arrived at the position of creative hard unilateralism, as he calls it, with his cynicism about the alleged mulitilateral position of the British and American Governments; it is the many thousands and millions of people throughout the Western world who see through the failures of the British Government and the American Government and, of course, the Soviet Government, to move towards a position of real negotiation of disarmament. As, long as we have Governments and Secretaries of State who seem to believe that deterrence is stable, all they are doing is creating the intellectual capability for megadeath.
7.40 pm
Sir Patrick Wall: This country is almost unique in that throughout its history it has pursued a combination of continental and maritime strategies. The question that we have to face today is whether we have the balance right. I believe that at present we have, but I have some fears for the future. While my contribution may be more technical than is normally the case, at least it is based in a number of years' experience in the North Atlantic Assembly.
I start with continental strategy. I am not one of those who wish to see BAOR cut down now that it has come down to its treaty limit of 55,000, but I believe that there are some weaknesses which must be remedied. Before discussing those weaknesses we must consider the Soviet technique in ground warfare, and then we can consider how it can be countered. The Soviet technique is to attack on a number of fronts and then exploit any particular breakthrough. NATO has therefore to kill 40 per cent. of Soviet armour in the first three days to bring about a reasonable balance.
Each Soviet attack is led by two divisions in the first echelon and four divisions in the second echelon on a narrow front. It is therefore necessary to attempt to kill second echelon armour when still on Soviet-controlled territory. In addition, the Soviets have what they call operational mobile groups designed for deep penetration on D1 or D2. They are brigades with helicopter and fixed-wing aircraft support. There are 30,000 men in these operational mobile groups at present in East Germany and Czechoslovakia. The Soviets also have special assignment forces, which are used before H-hour to attack key points, or carry out assassination, political or military, disguised as tourists, and dropped from Aeroflot aircraft. With that background, what are the NATO essentials for ground warfare? I suggest that there are five. First, reinforcements must be got to continental Europe before the war starts.

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Plans and successful exercises have been carried out in this respect, but, of course, it depends very much on the courage of political leaders who initiate mobilisation in a time of tension. We must remember that the vast majority of all NATO troops are not at their battle stations. It will probably take one or two days to reach them and to evacuate the civilians from western Germany.
The second essential is defence in depth, with adequate anti-tank weapon systems being supplied in much greater numbers. The Times leader today raises the question whether there will be sufficient troops to carry out the defence in depth. That is a question that we must face, but I believe that at present we probably have approximately the right balance.
Thirdly, we need new conventional weapon systems to attack the second echelon armour. The first is the MLRS, an unguided rocket, which will be followed by SMART or laser-guided weapons, such as the copperhead shell, and later by weapons of the assault breaker type, with terminally guided sub-munitions, with the objective of dealing with second echelon armour before it reaches the front line. I suggest that it is essential that we keep up to date in the development of these advanced technological but conventional weapons which will make the use of tactical nuclear weapons much less likely.
Fourthly, I suggest that there is a grave disparity between artillery anti-aircraft defence and chemical warfare potential in comparison with the Warsaw pact. Much more must be done in this field.
Lastly, there is the threat posed by Soviet armoured helicopter regiments which has not been dealt with; nor is there efficient helicopter lift in BAOR or in the 2nd Tactical Air Force.
I deal next briefly with Soviet technique by air. The first Soviet attack will come with, or prior to, the first echelon attack and will be directed against NATO's air defence systems. The aircraft then return to refuel and to rearm. In the second strike, corridors already punched in NATO's defences will be exploited. The third strike will be against nuclear weapons such as Pershing, Lance and other such nuclear weapon systems.
What, therefore are the essential requirements to be maintained by NATO? I suggest that they are to attack the advance enemy airfields between the first and second strikes so as to prevent the rearming from the second strike. At present, this will be done by Tornado aircraft armed with iron bombs. Later we will use the JP233, but even that advance weapon is not a stand-off weapon. I believe that the attrition rate of our aircraft will be enormous. What is needed is a long-range stand-off weapon, which we are promised in the White Paper for the 1990s. I believe that that is much too late. As the hon. Member for Sheffield, Attercliffe (Mr. Duffy) will know, practically every armament firm in the United States is developing its own weapon system, be it Patriot or Lance, into a stand-off weapon, which we do not yet have, and are not likely to have until the 1990s.
The alternative method of dealing with these airfields is by conventional ballistic missiles targeted on the airfields themselves, such as the counter air missile, or CAM. I believe that this is an important concept, because it is cheap and accurate, and it should be studied more than has been the case up to now. Unless these forward airfields
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are attacked and taken out, and the second echelon enemy armour is attacked by air, or/and by advanced technology guided missiles, a Soviet breakthrough is likely.
Our anti-armour defences are improving, but our air defences in BAOR for forward troops and for the rear areas are almost non-existent. We have no air defence system such as the German Mauder, and we have too few track Rapiers.
I deal now with maritime strategy. First, I wish to refer to the short war concept. There are those who say that thė war, if it ever comes, will be over in seven to 10 days so there is little need to spend money on the Navy because it will not be used. That, of course, is a useful argument for any Chancellor, but one that proved wrong in 1914 and 1939. I raised this question at SACLANT's recent symposium in Annapolis, and the NATO Secretary-General's answer was perfectly clear. If there was to be a war, it would not be a short one.
Let me illustrate one possibility. If the Warsaw pact started thinking that NATO lacked the will to fight, it is conceivable that it might pinch off the northern part of Norway to give itself elbow room for its main base on the Kola peninsula. It would then sit back and see whether NATO reacted. Thus, I suggest, a maritime war should be initiated, as indeed it was in 1940.
In any major crisis, such as a future world war 3, the battle of the Atlantic and of the Norwegian sea would be vital. However, this time it will be not against 60 German U-boats, but 190 Soviet nuclear-propelled submarines. The Greenland-Iceland-United Kingdom gap must be held, the strike fleet must be protected, patrol groups in the Atlantic will be needed to protect merchant shipping bringing reinforcements and supplies and ports will be mined and bombed. There are just not enough ships to go round. At the Annapolis symposium last week, SACLANT said publicly that he was 50 per cent. short in warships and could no longer carry out all of his tasks. He said that he would have to institute a series of priorities if the enemy permitted it.
My right hon. Friend the Secretary of State said that he thought that generals and admirals always ask for too much, but when I went on a tour of Atlantic bases with the hon. Member for Attercliffe last year we were told by every NATO commander, senior and junior, that there were not enough warships to go round — yet Britain continues to scrap or sell frigates and destroyers. One wonders whether European Ministers of Defence ever listen to those who have to do the fighting. I know that generals and admirals are apt to exaggerate, but not to that extent. The British admirals have also said that they are 50 per cent. short of shipping. That is serious. It shows that the Europeans are not doing their stuff and I do not wonder at the Americans talking about pulling troops out of Europe in order to persuade the European nations to do more about defence. The 50 old United States destroyers which were taken over in 1940 were extremely important in the anti-submarine warfare against the U-boats, but there will not be any reserves next time. We shall have to fight with what we have in the shop window.
The next five years might prove vital for several reasons. Younger men might be in control in the Kremlin, the internal situation in the Soviet Union is getting more serious, the economy is winding down and there is restlessness in the satellites. In the next five years no ships should be scrapped, but should be mothballed. We must also bear in mind the associated problem with the

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merchant fleet. As others have said, if the disappearance of British merchant shipping continues, even an operation such as the Falklands will no longer be possible.
The British people have a sense of sea power which has been born into them over the centuries. They watched Sir John Nott's reforms with alarm. The Royal Navy was saved by the Falkland Islands operation, but people are not yet satisfied that the Government will not return to the policy of cutting our anti-submarine warfare forces. That might be one of the reasons why the Conservatives lost the Portsmouth, South by-election. I hope that the Government have learnt that lesson. It is far cheaper to avoid a war than to have to fight one. My right hon. Friend the Chancellor should bear that in mind. Of course there should be economies where that is possible, but defence of the realm is the first priority of any Government and it cannot be had on the cheap.
It is not good enough for the Government to say that more warships are being built now than for several years, because many of them were ordered by the previous Labour Government as an election bribe which did not come off, and others have been ordered as replacements for the Falkland Islands casualties. If the number of those ships are subtracted from the total, it will be revealed that our building programme is lamentably small. Even against that background, however, we are talking about disposing of no fewer than 12 frigates and destroyers this year and next.
The Government are rightly concentrating on Trident, which greatly improves NATO Europe's deterrent, but how many type 23s do the Government intend to order, why is the SSN programme so slow and when do the Government intend to replace Fearless and Intrepid, perhaps with more but smaller and cheaper ships which are essential to the Royal Marines? As I said, the next five years might be vital. The Soviets have expanded all of their armed forces, but their internal problems increase. It is quite possible that when the old guard have been replaced in the Kremlin, a young man spurred on by the generals might initiate a war if he thinks that he can get away with it. It is NATO's job to ensure that that does not happen, but the responsibility lies not with NATO but with the 16 Governments of NATO to provide the wherewithal. Britain's defence expenditure, at 5·4 per cent. of gross national product, sets a good example to other European Governments, whose defence spending averages about 3·5 per cent. — half the American expenditure. It is no wonder that the Americans are getting fed up with Europe. Other European Governments must follow our example. We should spend more, but at least we are setting an excellent example. I hope that, when he meets his colleagues, my right hon. Friend the Secretary of State will back the Americans up and make it clear that we expect other European countries to do more over common defence.
Preventing war is not cheap, but war itself is much more expensive in terms of money and in terms of blood.
7.55 pm
Mr. Dick Douglas: We have heard several interesting speeches and an entertaining one from the hon. Member for Aldershot (Mr. Critchley). He referred to the Secretary of State's room in the Ministry of Defence and said that on one wall there is a portrait of Lloyd George and on another—I hope that I am not breaching the rules of secrecy —there is a great
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organisational chart which is much beloved by the Secretary of State, who considers himself something of a professional consultant on many matters.
One of the most depressing features of discussing defence is examining the relationship between defence and foreign policy. The hon. Member for Meirionnydd and Nant Conwy (Mr. Thomas) said that we are in the middle of a nuclear arms race. We have been in the middle of a nuclear arms race since 1945. One of the most depressing features of that race is the inability of the great powers to agree even on matters that would appear simple, such as measurement, and whether we should discuss warheads or launchers. Inability to agree on such relatively simple concepts has resulted, albeit inadvertently, in the breakdown of many negotiations, including the intermediate nuclear forces talks at Geneva.
We address the arms race by turning to the Trident system. There is no point in the Ministry of Defence suggesting that it is merely a replacement for Polaris. We have heard the view of the right hon. Member for Plymouth, Devonport (Dr. Owen) and the considerable view of the hon. Member for Ashford (Mr. Speed), who said that, at this juncture, he reluctantly goes against the Trident system. Trident is a costly device. It overloads our programme and, in later years, will take a substantial proportion of the procurement budget. Moreover, it will crowd out some conventional, especially naval, weaponry. We are still not sure of its cost as we have not received a clear answer from the Secretary of State. Nor are we sure how much will be procured in the United Kingdom. There is a hopeful view that we shall keep the American portion of that expenditure below 45 per cent., but that is a mere hope and there is no sign that the proportion of our defence expenditure that goes to the United States will be reduced.
I have already mentioned the Secretary of State's view that he is a management consultant. That is shown by the way in which he strives towards competition in a number of spheres. I and my hon. Friend the Member for Dunfermline, East (Mr. Brown) have approached the MOD about a number of issues, but especially about the proposals emanating from one of the Secretary of State's advisers, Mr. Peter Levene. There is nothing in the main body of the report dealing with the privatisation of the dockyards. Paragraph 239 refers to competition, and that could be a precursor to assessing certain aspects of competition within the dockyards.
No one fears reasonable comparison on efficiency and the desire to get value for money. However, the personnel in the dockyards fear privatisation through the back door, where the assets of the dockyards are leased to private concerns. The MOD has had no consultations with those working in the dockyards. I want the Minister to assure the House, and through us those working in the dockyards, that there will be full consultation before implementation of the proposals emanating from Mr. Levene. If the Government want to lease those assets, there must be an opportunity for a full debate in the House. We are considering not only the efficiency of the dockyards, but the efficiency and morale of Britain's naval fleet as a whole.
I know that the Minister may say that the allocation of time is a matter for the Leader of the House, but persuasive influences can be brought to bear. The announcement to lease assets must not be made in a written answer — there must be an opportunity for a full and frank debate.

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I know that some unions, especially the Civil Service Union, have already made representations to the Minister about their fears. Those fears are valid in view of the Mallabar report which examined leasing and the Speed report of 1981 which examined and rejected that. We must have certain assurances. What will be the position of the nuclear facilities in Rosyth and elsewhere? Will they be leased to private concerns? Are the Government capable of setting aside those facilities and leasing only conventional facilities? Those serious matters have not been fully ventilated. The Government have not fully examined the issue.
The Secretary of State wants to be as good, or as bad, a privatiser as the former Secretary of State for Energy, now the Chancellor of the Exchequer. That might be related to political ambition. Ambition resides in all politicians, but ambition that might be used to the detriment of the nation's defence is something of which we should be chary.
I intervened earlier to question the Secretary of State about the Merchant Navy. It is simply not good enough for him to say that he will examine the Select Committee report and comment on its strictures. It is just two years after the Falkland crisis, but there is no mention of the Merchant Navy in the White Paper. I declare my interest in the shipbuilding industry. Those who are concerned with maintaining the fabric of the merchant fleet, both in ships and personnel, recognise that there has been a rapid decline in the British flag fleet; the Select Committee referred to that in paragraph 52. It is not good enough for the Secretary of State to recognise the strategic importance of merchant shipping, while disregarding it when presenting the annual White Paper. That does not acknowledge the vital contribution that the merchant fleet has made and can make to defence.
If the right hon. Gentleman says that there will be further consultation with individuals in the service, he must appreciate that we are concerned not only with consultation but with obtaining detailed plans and assessment of the contribution that merchant shipping can make to the defence of Britain. Before Operation Corporate, the MOD had a list of ships. However, that is not sufficient — detailed knowledge is required of drawings and designs. We cannot get that unless the ships are British-manned under the British flag. We shall do ourselves a great disservice if we do not recognise that we allow the British merchant fleet to decline at our peril.
What about the threat that Europe faces from the Soviet Union? If we adopt the confidence-building methods emanating from Helsinki and Stockholm, NATO must not resort to an escalation of conventional war into nuclear war. We should seek access to information about the intentions of the other parties. The basic ingredient is how to remove fear. That is what the people of Europe and the world desire. I am interested in the American proposals for and the Soviet Union interest—albeit low key—in confidence-building methods. I hope that the arms control unit being established by the MOD will be useful in determining how both sides can gain notification of the intentions of the other side about troop movements and exercises.
I appreciate that this may be a Foreign Office matter, but I hope that the Minister can explain the Government's view on how we can give the Soviet Union and the Warsaw
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pact countries information about our troop movements, and how we propose to obtain relevant information from them. In my view, a nuclear war would not occur instantaneously. There would be a build-up. That is why, if we could get information about the movement of troops and navies which allayed the fears of individuals and nations, we might be able to reduce the temperature throughout Europe and the world.
I urge the Minister to take cognisance of the situation in my constituency and similar areas. He has a responsibility to provide us with detailed information about the intentions, for example, of an important employer in Fife. I hope that he will be able to give that information when he replies to the debate.
8.11 pm
Dr. Alan Glyn: I agree with what the hon. Member for Dunfermline, West (Mr. Douglas) said about detection, because that is one of the most vital elements of warfare. I also agree with him about the importance of our merchant navy.
The Secretary of State set out well how dangerous the situation is, at the same time placing importance on the need for disarmament. It is interesting to note that paragraphs 106 to 116 are devoted to disarmament. Nobody, therefore, can say that we are interested only in armament. The reason for our interest in armament is defensive, whereas our enemies have very different ideas. Ten paragraphs devoted to the subject of disarmament represents a considerable concentration on that aspect.
When I first became a Member of this House there was a great deal of agreement between the two sides on the subject of disarmament. Issue was taken over certain minor matters—that was inevitable, just as today there are minor differences between chiefs of staff and Ministers —but in principle the House had a united approach on the subject. It is sad that that has completely disappeared.
Paragraph 102 of the defence Estimates contains a good paraphrase of the build-up of Soviet forces, and paragraph 103 confirms that not only are the Warsaw pact forces vastly superior but that there is an alarming feeling that the Soviet Union
"is testing a new generation of ICBMs, the SS-X-24 and SS-X-25, and has under developmnt long range cruise missiles which can be launched from air, ground and sea platforms."
Not much is said about chemical warfare. I have always regarded that as one of the most dangerous factors in modern warfare, one for which we are the least well provided. Our policy, right or wrong, was to destroy what stocks we had and to abandon any further development. Unlike us, the Soviets are well equipped with chemicals.
At sea there has been an alarming increase among the Warsaw pact countries, not only in the number of nuclear submarines but surface ships. As my hon. Friend the Member for Ashford (Mr. Speed) and my right hon. Friend the Member for Spelthorne (Sir H. Atkins) rightly said, it is vital that we pay more attention to the merchant fleet. It is easy for iron curtain countries to subsidise their shipping, as they do, whereas for us it is less easy. As my hon. Friend the Member for Ashford said, provision should be made to enable subsidy to be given for the basic facilities to make the conversion of ships for war more easy. That view has been echoed by the Chairman of the Select Committee, and one should not lightly ignore his views.

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There has been a further increase in the build-up of SS20s, with their gradual replacement by SS21s, 22s, and 23s. Looking at the general picture, one can only feel that there is no alternative but for us to continue with the Trident programme. I appreciate that the Secretary of State has placed great emphasis on increasing the Territorial Army. Not only is that our first line of defence; it is the cheapest form of reinforcement and has many social advantages.
If, on the other hand, it is true that the United States is talking about withdrawing 100,000 men from Europe, our efforts will be only a small drop in the ocean. It has been suggested that the possibility — perhaps it is a probability—of the Americans making a reduction of that size arises because NATO is not spending enough. It may be an American method of making the NATO nations spend more on defence, but that is speculation. We can only hope that such a withdrawal does not occur because, with no sign of disarmament on the horizon, it would be extremely dangerous.
An aspect which has not been discussed in the House for a long time is that of the factors which might influence the expediting or retarding of war. In my view, the main factor is the relationship between China and Russia, and little is known about that today. That relationship has always been difficult. For example, during the Long March, the Chinese backed one side and then the other. In 1921 the Russians gave the Mongolians independence. Today, the Russians openly maintain an army of five divisions in Mongolia. The Mongolians are completely and utterly reliant on Russia and have no desire to look to China.
Poised on the frontier between China and Russia are 30 Soviet divisions. Originally, they were pulled out of Europe, but I have reason to believe that those divisions have now been replaced from other sources. If, therefore, China were to change its policy, anything could happen, and as we know from history — for example, the Ribbentrop-Molotov pact—no country wants to fight on two fronts.
At present, we do not know China's intentions, although one can postulate three possibilities. The first is that nothing will happen, that negotiations between Russia and China will come to nothing and that the present relationship will remain the same. The second — this alternative is far more dangerous — is that some agreement will be reached. It would, of course, be a territorial agreement, because since the 17th century there has been dispute about what territory belongs to China and what belongs to Russia. An agreement could release all those divisions for concentration in Europe, and that would make war more likely. The third possibility is much more dangerous. It is that, if they were to form an alliance, as distinct from an agreement, and work together, that would greatly increase the possibility of war.
The United States and ourselves are making various overtures to China. Indeed, China is becoming more open to the world. It is possible, therefore, that Chinese attitudes may change and that we shall be able to deflect them from Soviet influence. As my right hon. Friend the Member for Brighton, Pavilion (Mr. Amery) said, there could be a change in the composition of Russia's leadership. This could also be because the proportion of true Russians is going down while the proportion of non-Russian races — Georgians, Cossacks and others — is
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increasing. Those are all factors which we cannot take into account. All we know for sure is that so far there has been no agreement between China and Russia.
I would go so far as to say that we are in a more frightening position than we have been for many years in that we do not know what Russia intends to do. The Soviet Union is extremely well equipped, and every day that passes its army and navy becomes more powerful. If only we knew how the relationship between Russia and China would develop, we should be able more accurately to forecast the future. In the meantime, we must continue with our defence programme, possibly spend more on conventional defence and certainly rely on the Trident programme. Let us hope that we shall not be attacked by the Soviet Union.
8.20 pm
Mr. Paddy Ashdown: I share the concern of the hon. Member for Windsor and Maidenhead (Dr. Glyn) over the level of defence expenditure. However, there are one or two areas within the defence White Paper to which we can give a conditional welcome. The first such area is the withdrawal of the Government's announcement to reduce the number of front-line escort squadrons to 42. The need to keep the number at 50 is now recognised. That is a matter on which I spoke at some length in the previous defence debate. I welcome the Government's decision unreservedly. I hope that it signifies a reversal of the idiotic and dangerous proposal to cut the Royal Navy, which has been so much a feature of previous White Papers.
It must be borne in mind that the Royal Navy still carries about 70 per cent. of the task in the eastern Atlantic, at a cost of about 10 per cent. of the budget, while we carry 10 per cent. of the land-air burden in Europe, at a cost of about 40 per cent. of the budget. It is clear that there is an imbalance. We may recognise and welcome the new direction which the Secretary of State seems to be taking, but we must hope that he recognises that the task is far from finished. In the past four years the directed task of the Royal Navy has increased fourfold, but the number of Royal Navy escort vessels has decreased since 1980 from 65 to 50. The commitment has increased by 400 per cent., but resources have declined by 17 per cent.
I share the concern that has been expressed about the mannng of eight extra ships. Where will the crews come from and how will they be trained? It must be a matter of considerable shame for the Government, as the hon. Member for Beverley (Sir P. Wall) has said, that the Supreme Allied Commander of the North Atlantic Fleet has had cause to remark that the number of ships is insufficient to meet our NATO tasks. The Secretary of State is travelling much more in the right direction—a direction which we have urged on him for some time—but I hope that he will accept that there is a considerable distance to go.
There is no reference to the Merchant Navy in the White Paper, unlike the White Paper of 1981, but the state of the merchant fleet has been expressed pungently and powerfully on both sides of the Houe. The size of the fleet has been halved in the past seven years. There is a desperate need for the Government to start taking some action along those lines before it is too late.
A welcome must be given to the Government's proposals for air defence and the improvements that have

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been introduced, which are announced in the White Paper. One might say that they are not before time. Senior members of the Royal Air Force have said that our air defence now is worse that it was in 1939. We rely on no more than 70 aircraft, including 30-year-old Lightnings, 20 year-old Phantom F4s and Shackleton 2s—not 3s—for our airborne early warning. The Shackletons have a radar system which was brought into service in 1961 and which was used in the old Gannets, which were withdrawn from service. We welcome very much the announcement that the Nimrod will come into operation this year. I hope that the rumours that I have heard about delays both to that programme and to the air defence Tornado are untrue. If the Minister can give an assurance that those programmes will come on stream on time, it will be reassuring.
It is against the need to continue to strengthen our conventional forces that we must view the Trident decision. Before dealing with that issue I shall take up the remarks of the hon. Member for Meirionnydd Nant Conwy (Mr. Thomas) on deterrence. I regret that the Secretary of State would not allow me to intervene in his speech on this issue. I hope that others take the view that deterrence is the capacity to be able to deter our enemy by making it clear that the price which he would incur would be above that which he would wish to pay. In nuclear terms, that would be a price which would ensure his destruction. We have in our hands the capacity to destroy one another 50 times over, not merely once, and it is true that we could diminish our deterrence by 50 per cent. Indeed, I would go further than that. If we were to be incinerated a moment from now in the Chamber, the nature of the delivery system—for example, short range, medium range or long range—would be irrelevant to us. That would be a matter of no consequence.
I was delighted to hear the Secretary of State agree that it is overall deterrence that matters. He said that it is the overall capacity to deter that matters. I was delighted to hear that admission, for many of us have been wondering and worrying whether he was building up a nuclear war fighting capacity. It seems that he has dismissed that concept in the strongest possible terms, and I was reassured by his remarks.
I find it astonishing that there is a section in the White Paper which runs contrary to what the right hon. Gentleman said. He said that it is overall deterrence that matters, yet paragraph 107 the White Paper tells us that NATO must maintain
"the ability to deter aggression at every possible level".
Either we deal in overall terms or we want to match
"aggression at every possible level".
The concept of having a deterrence that matches "at every possible level" is utterly illogical. There seems to be a deep contradiction between what the right hon. Gentleman said, welcome though that was, and what is stated in the White Paper.
The White Paper tells us:
"The independent British strategic force is, and will continue to be, of the minimum size necessary to provide a credible and effective deterrent. We have no intention of increasing the capability of the force beyond that minimum."
That deterrent stands at 126 warheads. If that is all right now, why do we have to increase it to an overall potential capacity of about 960 warheads? The Government say that they do not want to use the full capacity of the system. If that is so, why should they choose to build so vastly in
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excess of our needs? Perhaps there will be 384 warheads —that is the figure that is being used—but that will still be a capacity that is 300 per cent. above what we now accept as a credible deterrent. I suggest that the proposed capacity contains an element of gobbledygook. The plans for Trident do not live up to the words in the White Paper.
I agree with those who argue that the expenditure on Trident will create a massive imbalance in our total defence expenditure. I shall not go into the details of that argument, because they have already been well covered by my right hon. Friend the Member for Plymouth, Devonport (Dr. Owen), in what was really the speech of the Leader of the Opposition in this debate. My right hon. Friend talked about increased spending on Trident and the point at which capital spending is arriving, which is the point at which we shall have to meet extra expenditure on conventional defence. The White Paper makes it clear that that will happen at a time when Government spending will stop increasing and possibly decrease under this Government, but that is the point when maximum expenditure on Trident will be reached.
I agree with Lord Chalfont, who said that this would
"emasculate continued improvement in other areas of our contribution to NATO."
I agree also with Lord Carver, who said that this is a weapon we cannot afford. I agree with the hon. Member for Ashford (Mr. Speed), who said in a telling speech that he regretfully came to the conclusion that neither the United Kingdom nor the Royal Navy can afford Trident.
Expenditure on Trident will create a vast imbalance in disarmament negotiations. We are saying that we shall not include our 120 warheads in the disarmament negotiations, but that is an unsustainable position in the long term. It must be unsustainable to maintain that position when we can secure a capacity to hit 960 Russian cities instead of 120. To refuse to put our 120 warheads on the negotiating table, especially when the plan to increase our capacity to 960 could be implemented, is to make a mockery of any idea that we are pursuing a policy of disarmament. I asked the Prime Minister whether she would consider including our 120 warheads within the negotiations and, of course, she did not provide an answer.
For what purpose are we to create such a massive imbalance in our defence expenditure in the crucial area of adequate conventional defences and to make a mockery of disarmament negotiations? Is that to be done for some spurious independence? Let us analyse this so-called independence. Shall we have the independence to launch these systems ourselves? I doubt whether we shall. What political independence shall we have? We all know that the Americans have said that any nuclear missile that is launched from Russia and which lands on any piece of NATO territory will be considered to be an attack on the American heartland. Reciprocally, the Soviet Union has said that any missile that is launched from any NATO territory and lands in Russia will be regarded as an attack from the heartland of America.
There will be massive political pressure that will stop us launching Trident in any sense independently. However, let us assume that we can overcome that pressure. The missile comes from America and we are assuming that we have bought enough of them to be able to use our capacity independently. The missiles are maintained in the United States, so let us assume that we have enough in operation to be able to use them independently, even though there will be political pressure

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on us to prevent us launching them. When do we fire the missiles? Do we wait until we can see the incoming Russian missiles? How will we be able to see those missiles? They will be shown on the ballistic missile early warning system, which is run by the Americans.
Let us then assume that we do not want them and that we wait until Birmingham goes bang before we launch our Trident missiles. We have another problem now: how do we get the Trident missile to its target? I am informed that to be able to give the Trident missile its accuracy, the submarine which launches it has to have its position fixed by the NAVSAT satellite, once again in American control.
The so-called independence that Trident gives us is spurious and it will not exist, but it does several very damaging things. First, it weakens the will of NATO, because it is a major commitment of our defence resources to an area which is not committed to NATO. There is the use of a certain amount of our defence resources which could be used in NATO and which are being used, as it were, outside. If we really believe in NATO, is it not incumbent upon us, as good partners, to use that vital resource in an area where NATO is weakest, and not in an area such as nuclear missiles where it already has a superfluity?
Some say that we need nuclear weapons because of the weakness of our conventional force strength. I would have said that the argument can be put the other way round and that our conventional force strengths are very weak because we are spending so much on nuclear weapons.
With regard to the balance of forces between NATO and the Warsaw pact, we all agree, and the Secretary of State has said, that we would like to see a move towards stronger conventional forces. General Rogers, the Supreme Allied Commander in Europe, has said:
"What we are trying to do in Allied Command-Europe is to provide for a conventional capacity by 1990 that has a reasonable prospect of frustrating conventional attack by the other side."
The Secretary of State has said that we have a very long distance to go. I think he used the expression that in order to reach an appropriate level we would have to spend a great deal of money. The conventional wisdom is that, in order to be successful in attack, one needs to have a preponderance over the defender of about 2·5:1. As the White Paper admits, in very few areas, if in any at all, does the Warsaw pact have that kind of preponderance. In tanks it is 2·3:1, in artillery it is 2·7:1, and in aircraft 2·1:1. A recent United States Defence Department study, using armoured division equivalents, covered the whole of the force spectrum, rationalised it and came to the conclusion that the Soviet Union had a preponderance of only 1·2:1.
John Mearsheimer of Harvard university centre for international relations has written:
"NATO is in relatively good shape at the conventional level. The conventional wisdom which claims otherwise … is a distortion of reality."
I do not accept that we are yet at an appropriate level to be able to operate effectively to raise the nuclear threshold and to be able to deter Warsaw pact agression on the conventional basis in central Europe, but we are not as far from that as many believe. We have a great opportunity, in the cancelling of Trident and in the harmonisation of procurement procedures, to move in that direction.
It is a fact that NATO spends more on defence than the Warsaw pact, but it gets less for its money, and I am delighted to see moves towards improving procurement. Common procurement and the cancellation of Trident could bring us close to the point of achieving the enormous
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prize of raising the nuclear threshold in central Europe —perhaps even prising the two super powers apart with a battlefield nuclear-free zone, reducing tensions and increasing conventional strengths.
I must emphasise an important point which differentiates us from the Labour party. If the cost of achieving the aims that I have mentioned — raising the nuclear threshold, with perhaps the establishment of a European battlefield nuclear-free zone — is to increase defence expenditure, that is a cost that is worth paying to achieve that prize. It is one which I would be happy to recommend to the electorate. As I said earlier, I do not think that it may be necessary, but if it is, we should do it.
We need to cancel the prestige weapons. We need stronger conventional forces. We need common procurement and the political will to pursue it. We need a new initiative in the disarmament talks. Those are the opportunities which now stand before us, and which the defence White Paper could begin to grasp. Unfortunately, it does not do so. It is a defence White Paper in which the sums do not add up, and in which the opportunity and potential to achieve stronger defence for Europe, but at the same time produce an initiative in the arms race, are not taken. In that sense it is a defence White Paper which will, I am sure, in time to come, be seen to be leading in the wrong direction, and to be very short measure in comparison with the potentials now offered to us.
Mr. Deputy Speaker (Mr. Paul Dean): The House will wish to know that the winding-up speeches are expected to begin at about 9.15 pm. That means that we have only about 40 minutes left for Back-Bench contributions.
8.35 pm
Mr. Churchill: I congratulate my right hon. Friend the Secretary of State on his White Paper, and especially on his determination to get the maximum defence value out of available resources, exemplified by his decision to put 4,000 troops in the front line, to retain eight frigates—which were previously intended to be mothballed—in the active fleet, and to deploy 15 per cent. more aircraft with the Royal Air Force in the years ahead.
I welcome the political will that has been demonstrated by the Government in the past year in securing the successful deployment of cruise missiles in the face of the unremitting propaganda campaign orchestrated by the Soviet Union. I welcome also the Government's commitment to proceed with Trident, which remains unquestionably the most cost-effective potential replacement for Polaris. Although, in terms of modern weapon systems, it is undoubtedly the most powerful deterrent to war available to us, it is by no means the most expensive of the defence programmes of the present generation.
The key factor in determining the resources needed for defence must be an accurate appreciation of the level of threat. At annex A to volume 1 of the White Paper there is a table showing the balance of forces, to which the hon. Member for Yeovil (Mr. Ashdown) has just referred. He fell into the pit of accepting that misleading table as gospel truth. I say that it is misleading because it refers to the balance of forces between NATO and the Warsaw Pact on the central front, but it specifically excludes the three westernmost military districts of the Soviet Union.
It should be borne in mind that reinforcements for NATO, particularly in tanks and troops, would have to

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come across the Atlantic and could take a considerable time, whereas reinforcement from the western military districts of the Soviet Union could be done on the basis of four armoured divisions being brought forward with transporters simultaneously. I hope that omission will be rectified in future White Papers.
Confronting the NATO alliance west of the Urals is a force of no fewer than 30,000 Soviet tanks, compared with the figure of 18,000 given in the table. Therefore, a fairer balance in tanks would be 4 to 1 against us in Europe.
Mr. Ashdown: We are, of course, dealing with somewhat abstruse matters. May I commend to the hon. Gentleman the recent British Atlantic Committee report dealing with precisely these matters? It comes to the conclusion that a Soviet attack which would be able to mobilise those reserves in any time at all would be easily discernible before it happened and would give an equivalent time in which to build up reserve capacity in Western Europe. Indeed, the ultimate conclusion of the report is very much in line with that of the United States Defence Department, that there is not such a disparity as the hon. Gentleman mentions.
Mr. Churchill: That, of course, runs directly counter to the statements made in recent years by successive Supreme Allied Commanders Europe, that the Soviets have been working to acquire a standing start capability for a conventional attack against Western Europe, which would not require such mobilisation as the hon. Gentleman referred to.
Another key parameter in assessing the level of threat has to be the dynamic in arms production on both sides, yet nowhere in the White Paper is there to be found a table showing the relative rates of build of key military weapons systems of NATO and the Warsaw Pact. Each year, the Soviet Union has been producing more than 150 medium or long-range nuclear missiles, more than 1,000 supersonic swing-wing jet aircraft and 3,000 to 4,000 tanks. Those are much in excess of anything produced by the West.
I should like to address two areas of our defences that give grave cause for concern — first, the announced intention to abandon the 3 per cent. increased commitment and, secondly, the size of our reserve force.
The Secretary of State has rightly pointed to the fact that, although there has been conflict across the globe in the past 40 years, there has been no conflict involving Western Europe and, above all, there has been no world war. A major factor in that achievement has been the heavy preponderance of Western, and especially United States, nuclear power. I must ask my right hon. Friend whether this is the moment, just when that preponderance has been lost, for Britain to slacken her efforts in defence.
The challenge from the Soviet Union shows no sign of abating, when measured either by its cynical abandonment of the disarmament talks in Geneva, by its cold-blooded destruction of KAL 007, by the repression in Poland, or by its bloody and even genocidal war against the Afghan people, which is in its fifth year.
The decision to abandon the 3 per cent. commitment from 1986 has not been taken in response to a reduction of that threat, let alone progress in disarmament negotiations. Could it be that that decision was made above all in response to the Treasury, rather than to any
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perception of threat by another quarter? We are confronted by several disturbing trends that threaten to undermine peace and security in the longer term. The first, to which I have referred, is the threat from the Soviet Union. The second is the intensifying pace of development in high technology in defence, which cannot be ignored.
When President Reagan made his much-publicised "star wars" speech just a few months ago, many smiled with derision. They thought that it was nonsense from Hollywood. I wonder whether they thought the same when they read in their newspapers last week that the United States had successfully knocked down one of its own intercontinental ballistic missiles with another one.
I welcome American research in defence technology and their determination never to allow the West to lag behind the Soviet Union in that key area, as we had been doing in the late 1970s and at the beginning of the 1980s. However, I hope that the deployment of such systems can be forestalled by a firm East-West agreement between the super powers.
A third factor with which we are confronted today is the ever-escalating cost of new generations of military equipment, which is a direct result of its greater sophistication. Such development is not unique to defence. It is seen, for example, in hospitals that have laser equipment, brain scanning devices and other equipment. All that adds enormously to the cost of providing high technology equipment.
The development of military equipment is estimated to be at a minimum of 5 per cent. above the annual rate of inflation. The Government should be congratulated on coming closer than any other European member of NATO to achieving the 3 per cent. target increase, but they must have no illusion that, once a clear real-term increase is abandoned, the defence procurement programme that the Secretary of State has outlined and to which the Government are committed, cannot be fulfilled without painful and damaging defence reviews in the years ahead. They will lead to cutbacks, to abandoned programmes or to further reductions in forces below an acceptable level.
Not only are we providing insufficient financial resources for defence in the years after 1986, but for inadequate resources of manpower. In a crisis this nation can mobilise fewer than 200,000 reserve forces, which would augment our armed forces to barely 550,000. In other words, 98 per cent. of the nation would be without weapons or uniforms, and would have no war role. Can that be prudent or wise?
That situation is born of a conviction within the Ministry of Defence that, if there were another war, it would be brief. There would be no requirement for a large pool of trained reserve manpower. Can we be sure that that supposition is correct? If it is wrong, who will guard our coastline, protect the electricity grid, the water supplies, or the railway network in the face of the Soviet special forces and airborne forces that would undoubtedly seek to penetrate this country and cause massive disruption? There is no provision at present to deal with those tasks.
The Secretary of State has announced his intention to increase the Territorials in the years ahead by 12,000 and the Home Service Force by 5,000. I warmly welcome that, but it is on a scale wholly inadequate to the level of threat. The Secretary of State admitted in his opening remarks that there is no more cost-effective form of home defence than voluntary manpower. My right hon. Friend should have as his aim not a 5,000-strong home defence corps

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but, as a minimum, a defence force 250,000 strong. We would still have smaller armed forces than Switzerland, Sweden or even tiny Finland.
We have a unique opportunity to arm such a force for free with the impending replacement of self-loading rifles by newer equipment. I trust that the Government will heed the recommendation of the Select Committee on Defence that the self-loading rifles should not be scrapped or sold abroad at knockdown prices, but retained against future reserve force requirements.
The time has come when we in Britain should have, in addition to our existing forces, a citizen army that could be mobilised for home defence as required. Nothing would do more to signal to the Soviet leadership the resolve of the British nation to defend our homeland, come what may. Such a demonstration of resolve can only reinforce deterrence and the sinews of peace.
8.48 pm
Mr. Gavin Strang: This debate may turn out to be an historic milestone in the development of a British defence policy that renounces the use or threatened use of nuclear weapons. I say so not because of anything that the Secretary of State said in opening the debate—far from it—but because for the first time, the Labour Opposition have tabled an amendment, to be voted on tomorrow night, which calls for the removal of all nuclear bases from British territory.
In the course of the past year, some important new evidence has come to light about the likely climatic effects of nuclear war, not of an all-out nuclear war but of even a relatively small nuclear war—if such a phrase is not a contradiction in terms. I refer to the work of Soviet, and particularly American, scientists, who have found that even a relatively limited nuclear exchange could lead to a "nuclear winter" and, as a result, the future of human life on this planet could be at risk. It would probably have little chance of survival.
As time is short, I shall simply quote from a very important article which appeared in last winter's edition of the Foreign Affairs journal. Professor Carl Sagan said:
"In summary, cold, dark, radioactivity, pyrotoxins, and ultraviolet light following a nuclear war — including some scenarios involving only a small fraction of the world strategic arsenals—would imperil every survivor on the planet. There is a real danger of the extinction of humanity. A threshold exists at which the climatic catastrophe could be triggered, very roughly around 500–2,000 strategic warheads. A major first strike may be an act of national suicide, even if no retaliation occurs."
It is only two or three years since we had arguments in the House on the report of the British Medical Association on the effect of a nuclear attack on this country. Among other things, it brought out just how pathetic it was to pretend that out medical services could in any way cope with the immediate consequences of such an attack. Research on the effects of nuclear weapons shows that there would be no way in which one could cope with the immediate effects of an attack — that is, during the following days or weeks—and that the survival of the human species would be at risk. Indeed, it is highly unlikely that life would be worth living on these islands if there was anything approaching a significant exchange of nuclear weapons between the United Kingdom or the United States of America, and the Soviet Union, which involved British territory.
Given that, one might have expected some progress on the negotiations that have been taking place between the
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two nuclear super-powers of the Soviet Union and the United States, but the opposite is true. This debate is being held at a time when the limited talks—which is what they were—on intermediate nuclear forces have broken down. Neither START nor the INF talks are now taking place on the need to control or reduce the nuclear arsenals of East and West. The West must bear the major share of responsibility for the breakdown in the INF talks and for the situation in which we find ourselves.
The difference between those of us who support the Opposition's amendment and those who oppose it is that we believe that the threat of nuclear war is not only very serious, but is increasing. Of course we want to defend this country, and if time allows I shall tell the House how we should do so. But the real division between us is that we believe that we cannot go on holding talks and so on year in year out, when the underlying reality is that there is a dangerous escalation in the nuclear arms race.
As hon. Members on both sides of the House may agree, the threat of nuclear war is increasing for a whole host of reasons. There is a growing threat of proliferation as new countries develop their own nuclear weapons. According to the research to which I have referred, the whole planet could be threatened if there was a nuclear war, even if it did not involve the super-powers. Furthermore, there is a growing threat of a nuclear war taking place by accident. That must be obvious to anyone who has read the literature and seen accounts of some of the false alarms in recent years. Above all, the policy of deterrence or of mutually assured destruction is being undermined by counter-force weapons.
Against that background, many people believe that the nation can no longer continue to tag along, sometimes —although not usually—taking part in talks. We need bolder unilateral initiatives. Just as the process of nuclear escalation takes place not be agreement but by national initiatives, so I believe that the time is now ripe for us to make real progress towards nuclear disarmament, and we must do so by taking real unilateral initiatives.
Mr. Robert Atkins rose——
Mr. Strang: I shall not give way, as there is not enough time.
Of course, we do not believe that the Soviet Union would automatically follow up such an initiative, or that we would in that way somehow opt out of all danger. But by taking that decision we can give a real lead to the campaign to resist proliferation and to get nuclear weapons out of part of Europe, and ours can become a real voice for sanity in the world.
The defence White Paper refers to unilateral disarmament and to one-sided disarmament, as if we still had to conduct the argument at that sort of level. However, the vast majority of countries do not have nuclear weapons, and no one suggests that they do not try to defend themselves or that they do not have defence policies. Of course we want a defence policy. I find myself in some agreement with some of the things that the hon. Member for Davyhulme (Mr. Churchill) said in this respect. Of course we should be concerned about defending these islands. The Labour party's policy is to make an effective contribution to NATO, but a non-nuclear contribution. As we spell out in our amendment, we want to change the NATO strategy.
Some Conservative Members want us to jump into a commitment to increase the overall level of defence

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expenditure, but the amount that we spend on defence must relate to our commitments. We still carry on as if we were a world power. Paragraph 132 of the defence Estimates gives the game away in a revealing phrase:
"Recognising that we can no longer afford to make military activity on a global scale a main priority of our defence effort".
We want a radical break with our imperial past. We should be concerned with defending these islands, making a contribution to the Western Alliance and only contributing to UN peacekeeping forces outside the NATO area. That means a radical change in foreign policy.
Mr. Nicholas Baker: What about the Falklands?
Mr. Strang: There must be an end to fortress Falklands. The Falklands illustrates the case for negotiating our way out of all the world commitments that we can no longer justify or afford. Although I am opposed to the Government's policy, the real criticism to be made is not of this Government's policy but of that of previous Governments. In the 1960s, Argentina had a democratic regime. A response should have been made to the UN resolutions, and the best deal possible should have been negotiated for the Falklanders. They should have been told to accept that there was no longer any commitment to defend them, and that they could receive compensation or return to the United Kingdom. The same approach should be adopted to other British commitments around the world. It is nonsense to spend so much money on that aspect of our defence.
Conservative Members say that the Labour party does not want a defence policy, but that is not true. We want a real and effective defence policy but we also want a Government who will take an initiative towards halting the drift towards nuclear annihilation.
8.58 pm
Lord James Douglas-Hamilton: The hon. Member for Edinburgh, East (Mr. Strang) will not expect me to agree with what he said about unilateral initiatives. If I had to sum up my views in one sentence I would quote the words of Dean Inge, who said that it was no use for sheep to pass resolutions about vegetarianism when wolves are about who like mutton.
I shall address myself to two interrelated matters in which the hon. Member for Edinburgh, East has an interest. I have an interest as an Army reservist and I wish to speak about Ferranti and the European fighter aircraft. Last year Ferranti's orders from the Ministry of Defence involved more than £100 million. In many respects its technology is the most advanced in the world. It has been valuable to Ferranti to find a way forward with the Sea Harrier radar and the Blue Kestrel programmes and I thank the Minister. That has not only ensured continuity of employment, but reflected confidence in the work by the company in earlier years. In the electro-optical sphere Ferranti is demonstrating its own good faith by putting up substantial sums. I hope that early decisions will be made on aircraft refits and updates which may include new equipment in time.
Ferranti is already fitting navigation systems into the Tornado, Jaguar, Sea Harrier and Nimrod. It is pleased to have received the order for the Harrier GR5 map display. We look forward to further moves by the Minister on
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British avionics in that aircraft. We hope that the Minister will take the Ferranti inertial navigation system for the GR5 since that equipment is compatible with carrier operations in future out-of-area operations because of the special featuring on-deck alignment equipment.
The order is of great importance to increasing the prospect of the Ferranti inertial navigation system being taken for the European fighter aircraft. I thank the Minister for seeing an all-party delegation on that matter. We hope for a successful outcome before long.
The Secretary of State played a key role in advancing Britain in the Ariane project. He recently made a decision to use the United States space shuttle to launch the forthcoming United Kingdom communication satellites rather than the European launcher, Ariane, in which the United Kingdom has a share. Ferranti provides the launch guidance for that.
If the Ministry of Defence had opted for launching satellites through Ariane it would have required further European launchers with Ferranti launch guidance systems and consequently more orders. I hope that, at least, the Government will retain a continued commitment to the Ariane programme in which Ferranti plays such a vital part.
Looking further ahead, I shall deal with a larger subject —that of Ferranti having a worthwhile British share in avionics equipment in the European fighter aircraft. I refer not only to inertial navigation equipment, but to the airborne radar, the cockpit display equipment, and the electro-optic and laser equipment. It is essential for the project to be launched quickly so that the fighter has a large export market before orders are made for other aircraft. British Aerospace wants equality of partnership between the countries concerned — Britain, Germany, France, Italy and Spain—or at least it wants a genuine partnership which it considers to be of vital importance. It follows that we should finish up with an aircraft with the technology and performance to match any potential threat in central Europe. That aircraft should have a performance and a price that makes it competitive in the export market. The aircraft must be available within the right time scale since about 30,000 jobs in Britain hang in the balance. After all, the Tornado production line, in which Ferranti and many others are involved, will run out at the end of the 1980s.
Mr. Robert Atkins: Does the House realise that the last Tornado for the Royal Air Force and other air forces has already left the drawing board?
Lord James Douglas-Hamilton: That is right. A few export orders may be forthcoming, which could last until the early 1990s, but by the mid-1990s there will be no further prospects of the Tornado being pursued further. It is therefore hoped that the European fighter aircraft, a single-seater twin-engined fighter will replace the Phantoms in the German air force, the Phantoms and Jaguars in the Royal Air Force, the Starfighters in the Italian air force, the Jaguars in France and that Spain will also build up its air force. About 800 aircraft will be required. That figure has provisionally been agreed by the chiefs of the air staffs of the five countries—Britain, Germany, France, Italy and Spain.
I stress a matter of key importance in relation to Britain's export potential and to the thousands of jobs involved. The longer we wait for the European fighter

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aircraft, the more exports are likely to be conceded to the American and French aviation industries. I refer to United States aircraft—the F15, F16 and F18, and particularly to the French Mirage 2000. Such aircraft will be available for the aircraft market in competition.
We should never forget that Britain, Germany, Italy and Spain have a common interest, but that the fifth country — France — has a conflict of interests. France will not only be involved with the European fighter aircraft, but will wish to sell the Mirage 2000. France does not have the same sense of urgency to send the European fighter aircraft on its way because both aircraft will compete for the same market.
On the other hand, Britain, Germany, Italy and Spain have a sense of urgency. I hope that the Minister will impress upon his right hon. Friend the Secretary of State the need to agree in his discussions with the French Defence Minister, Mr. Hernu, that the five European countries involved should give priority to the European fighter aircraft.
The matter is of critical importance, not only for my constituents in Ferranti and for the working men in British Aerospace, but for the five European countries involved. It is the last chance for the European aviation industries to get their act together and produce a military combat aircraft which will satisfy European defence needs. The European fighter aircraft will be the only military aircraft to be produced by Britain for the remainder of the century.
9.6 pm
Dr. John Marek: It is clear that many hon. Members wish to speak and that there is not sufficient time. I shall pick up some points made by the Secretary of State when he opened the debate. I may not quote him word perfect, but I have the sense of what he said.
He said that NATO has kept the peace for 35 years. It is arrogant to state that NATO alone kept the peace. Some hon. Members said that NATO forces were supreme at times and that in the 1970s or early 1980s the Warsaw pact forces were superior. It could be then that the Warsaw pact played a part in keeping peace in Europe. The truth is that wars were exported, and not fought in Europe. They were fought in Vietnam, Africa and central America. The Secretary of State is wrong to mislead the House and the public by saying that NATO alone is responsible for keeping peace for 35 years. As the hon. Member for Meirionnydd Nant Conwy (Mr. Thomas) said, sooner or later that peace will break down.
The Secretary of State said categorically that the Russians were refusing to talk, as if that was their fault. Both he and the public know that the Russians are not talking because of the siting of cruise missiles in Europe and, more important, because of the elections in the United States of America. The Russians do not want to help President Reagan to be re-elected. If the Secretary of State were in the Russians' position, he would do the same. Everybody knows that no progress in disarmament talks will be made until after the presidential elections.
The Secretary of State said that NATO warheads in Europe would be cut by a third, but he did not say that many of those warheads were out-of-date and dirty, and would have to be replaced. If he told the truth and said that that was the real reason why the warheads were being reduced and replaced and that the new warheads would be more accurate and effective, we would have more respect
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for him. When he seeks to massage public opinion by making such grandiose statements, he does not deserve the country's respect.
The Secretary of State referred to the continued oppression by the Soviets of the people of Afghanistan. I am sorry to see it, because it is wrong, but why does he not consider the oppression of the people in E1 Salvador and balance the two cases and his argument? The West and NATO have a good point, but we do our cause an injustice by playing the game in this way.
The Secretary of State said that he wants to talk to the Soviet Union, but that it takes two to have a dialogue. Here again I accuse him of arrogance. Britain is no longer a super-power. Two super-powers play the European stage — America and the Soviet Union—and Britain is not included. Was the Secretary of State saying that Britain was one of the two super-powers that wished to have a dialogue with the Russians, or was he speaking for President Reagan? He did not make it clear. It is time that the Government realised that we are no longer a superpower; we are a European power and we should tailor our defences appropriately.
I am not pro or anti the USSR or the United States of America, but I am prepared to go a little further than the Secretary of State did. He said that he believed that the Russian people wanted peace. I know that they want peace, as do the American people and the British people. It was wrong for the Secretary of State to be churlish and to make the grudging admission that he was persuaded that the Russian people wanted peace. It is an affront to human nature and dignity to say anything else. It is the responsibility of Governments to ensure that they have peace, but, as Opposition Members have said, the Government's policies in that regard are wrong. Eventually we shall have war and for the first time we can reduce our planet to a heap of cinders with no life remaining.
Deterrence is breaking down and will break down. The Opposition will not accept the misleading and slick statements of the Secretary of State, at least not while President Reagan is responsible for the largest and most costly build-up of weapons that the world has seen. He was aided and abetted in that by the Secretary of State, who said that Britain's defence expenditure has increased by 20 per cent. since 1979. We must reverse that build-up and adopt a truly defensive defence policy instead of an offensive one. One way of doing that would be to cancel Trident and to remove cruise missiles. It is becoming clear in the country at large that the Government, certainly under the leadership of this Prime Minister, are not electable for a third term. That gives me hope. If we are still here when the next election comes, we will remove Trident and cruise missiles.
9.12 pm
Mr. Michael Colvin: I am grateful to the hon. Member for Wrexham (Dr. Marek) for speeding up his remarks, and I shall try to be as quick as he was.
May I add a few words to what has already been said about the importance of the Merchant Navy to the nation's defences, and comment on the new star wars scenario, which raises some major questions about our independent nuclear deterrent?
I am fortunate to represent a constituency with a strong maritime tradition. Its connection with the sea was

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highlighted on 1 June, when the memorial to commemorate those Royal Fleet Auxiliary officers who lost their lives in the Falklands conflict of 1982 was dedicated at Marchwood. I remind the House that some of the names of those in the service of the Crown that are recorded on the memorial are Chinese, so let us not forget the debt that we owe to Hong Kong when we decide its future.
Although the statement on the defence Estimates referred briefly to the Royal Fleet Auxiliary, it did not mention the importance of the Merchant Navy. In its report on the White Paper the Select Committee on Defence commented, rightly, on that serious deficiency. The previous Select Committee said in 1980 that merchant shipping had a strategic defence significance in peace time as well as in time of war. That was accepted by the then Secretary of State for Defence, who agreed to include details of the strength of our merchant fleet in future statements on the defence Estimates. That promise lasted for only one year, since when, in the Falklands campaign, we have seen the invaluable role of ships taken up from trade.
The Merchant Navy will clearly have a vital role to play in whatever sort of war Britain may be engaged, and in however long or short a period precedes its outbreak. NATO's planners have obviously considered the range of contingencies and prepared measures to respond to them. The size and shape of the merchant fleet, which does not depend directly on the Government but on the decisions of shipping companies and consortia, must be examined continually. I hope that there is no reason to suppose that either the Alliance or our Government have failed to take account of the state of our shipping industry in their strategic planning. Indeed, it is sobering to note that our registered deadweight tonnage has fallen.
It is, however, worth asking whether, in the event of an emergency, power of requisition can be exercised on all UK-registered vessels whether or not they are owned by British companies.
Having the ships is one thing—ensuring that they are able to fulfil their defence function is another. The Falklands war showed the need for merchantmen to be adequately armed. As the number of destroyers and frigates available for escort duties falls, the need for defensive equipment to be made available for merchant vessels rises.
First, there is the threat from anti-ship missiles that must be met either by kits for throwing out chaff to divert them or by containerised anti-missile batteries mounted on merchant ships. Secondly, more vessels should be equipped with gear for replenishment at sea. Thirdly, no one would dispute the need for air cover for convoys in the north Atlantic. This could be done by strengthening the decks of container ships and providing them with lifts to enable Sea Harriers or helicopters to be parked below the main deck. I believe that the capital cost of such measures should be borne by the state in return for restrictions on the right to "flag out" without Government sanction. By flagging out I mean registering abroad.
Fourthly, we have seen great technological change in our ships over the past few years, which has now almost eliminated shipboard cargo-handling equipment. In conventional war, therefore, an enemy could paralyse our domestic container terminals and those in the rest of
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western Europe without much difficulty, and our shipping would be unable to unload. It is therefore vital that the Government carry out a study of emergency anchorages and ensure that we have a sufficient number of floating cranes and emergency lifting gear to unload container ships in the event of hostilities. We should be prepared to face up to the additional cost of stockpiling such equipment.
These are precautionary steps which should be supplemented by greater co-operation between the Royal Navy and the Merchant Navy, with more training of civilian crews on the vessels likely to be requisitioned in the event of conflict. Perhaps more exercises such as Teamwork '84 should be undertaken.
It is impossible to prepare for every contingency. It is the unexpected conflict that poses the most awkward challenge. But of one thing we can be absolutely certain —Britain must be ready to respond rapidly and flexibly to any sudden challenge. I believe that the Merchant Navy will have a vital role to play. As our fourth arm of defence, it must receive full coverage in future defence Estimates.
I wish to comment briefly on the star wars issue, which has given a new dimension to the debate on Trident. Some Conservatives have never been 100 per cent. certain that the Trident decision was the right one. The problem is that while we accept the need for an independent nuclear deterrent it is difficult though not impossible to find acceptable alternatives that are credible.
Hitherto, the main argument against Trident has been the cost and the growing share of our defence budget that it will use up, to the detriment of our conventional forces. I am not in that lobby. My main criticism of Trident is that it gives us only one delivery system, so that all our new nuclear eggs are in one basket. That ignores two important principles of war—defence in depth, and flexibility.
The French have certainly understood those principles and rejected Polaris, when it was offered to them, in favour of their Triad system of deliveries.
We now have a situation where, by the mid-1990s—the time when Trident should come into service—the Soviet Union may well be able to zap those weapons with ballistic missile defence systems, or BMDs.
Even before the United States succeeded in shooting down a minuteman missile, I had decided to suggest in this debate that the development of BMD systems by the Russians, urged on by President Reagan's speeches and American developments, could mean that our single basket of Trident eggs would look far from credible by the time they came into service, and would certainly lose credibility before they went out of service in 40 years' time.
Sir John Nott, making the Trident announcement in 1982, said:
"Ultimately, deterrence in the face of nuclear weapons has to rest on the possession of an indestructible second strike capability". — [Official Report, 29 March 1982; Vol. 21, c, 24.]
We may have that now, but will we still have it in the face of a Russian ballistic missile defence system in future? The answer is that we simply do not know.
But there is no doubt that the East-West balance of power which has been based on the appropriately named acronym MAD—or mutually assured destruction—will count for nothing once star wars BMD systems are operative. As The Times pointed out last week, both we and the French have every right to feel uneasy because of

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this new round of defensive technology, which could destroy the ability of our smaller nuclear forces to get through and thus invalidate their deterrent power.
The star wars issue is serious. Of one thing we are certain, and that is that it will raise another question mark over the decision to go for Trident II and force us to look again at the credibility and costs of alternative systems, which might be a better way of preserving the peace and defending the realm.
9.20 pm
Mr. A. E. P. Duffy: In the past, security meant the active defence of the home territory, but with modern weapons even defence is no longer enough. The aim has to be the prevention of war. The enemy now is war itself. Public opinion has demonstrated that and become more active and pronounced. Therefore, we must attempt to channel current public interest and anxiety in constructive ways. We need to explain clearly the choices before us in setting forth a defence policy which both reassures the public and deters potential adversaries. Yet there is no mention in the defence Estimates of any money spent on defence publicity.
At the same time, we must demonstrate through the serious and vigorous pursuit of arms control negotiations that the members of the Atlantic Alliance are dedicated to lower levels of armaments. Yet the Government's record of arms control and disarmament is unconvincing, to say the least.
That is why chapter five, entitled "The Services and the Community" could have made a vital contribution. Why was the absurdly brief paragraph 501 not expanded with a statement on how the people are being educated on the role of the armed forces as they affect their lives? To swing from a four-line paragraph into a 23-line paragraph, 502, all about how the Army helped the Northampton Youth Clubs Association build a dock, is frankly fatuous. It is as fatuous to list such activities—with the greatest respect to Northampton — above the protection of offshore resources, search and rescue and bomb disposal. For hydrography to be mentioned even lower than that is unbelievable. Not only is it vital to our naval operations and a first-class money-maker; it is probably an essential contributor to our survival in the long term.
The Soviets do not make that mistake. They are clearly well aware of the potential of the seas. While the picture of Soviet naval new build presented in annex A is awe-inspiring, perhaps the most telling phrase used is:
"Meanwhile, the centrally-controlled Soviet merchant and fishing fleets are being steadily upgraded".
However, there is not one word about the security of our food or the raw materials necessary to our survival as they pass on the seas. Nor is there mention of the decimation of the British merchant and fishing fleets, as my hon. Friend the Member for Dunfermline, West (Mr. Douglas) pointed out. We take for granted our ships to be taken up from trade.
I fear that we are already living in a fool's paradise. British shipowners are in business to make a profit, not to subsidise Government plans. It is impossible realistically to discuss our naval capability without discussing STUFT — ships taken up from trade. I beg hon. Members to insist on a detailed account of the status quo and the way ahead.
Nor can hon. Members allow themselves to be fooled by operational surface fleet numbers as they are presented,
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following the powerful speech by the hon. Member for Beverley (Sir P. Wall). They have only to look at current and fairly recent shipbuilding programmes, to ask the Secretary of State what orders he proposes to place and to subtract the numbers being withdrawn from the operational fleet this year and next to become as alarmed as some Government supporters are, as we have heard during the debate.
It is vital to get into the enemy's mind in any threat analysis. Only thus can we provide the best defence. Equally, unless we appreciate his point of view, as we heard from my hon. Friend the Member for Wrexham (Dr. Marek), the prospects of arms control and disarmament are lessened.
I do not find these fundamental truths adequately spelt out in the threat section of the statement. The people of a democracy must be convinced on the whys of defence. That could have been done most appropriately in paragraphs 102 to 105, dealing with the challenge facing NATO. As it stands, the section is about a military challenge. The more general threat, including the political challenge, should have been explained.
Taking up paragraph 106 and those following it on arms control, if we accept the view that it is vital to keep ourselves in the enemy's mind, we must ask whether the Soviets will ever allow a balance to be created in Europe. The immediacy of the threat on the central front is to the Soviets — as the immediacy of the threat was to the Americans when the Soviets tried it on in Cuba in 1962. Small wonder that the Soviets have dug in their toes over Pershing deployments.
There is a temptation to think of INF as tactical weaponry. However, figure 1 shows that SS20 deployments in western and eastern Russia cover in range the whole of Europe, the whole of continental Asia and Japan, plus the whole of north Africa. Does that threat exist because we are trying to match the Soviet capability on the European front? Will the Soviets ever allow us to catch up? Is the situation in the European hinterland thus arguably less stable rather than more so and the possibility of disarmament lessened?
If arms control is to be pursued realistically, each side must have a clear idea of its adversary's perception of its will as well as its capability. There is virtually no discussion along these lines in the defence statement.
Paragraph 116 speaks of Soviet chemical war capabilities. Overt Soviet writings, plus press reports. on Afghanistan, suggest that they consider such weapons to be a routine part of their armoury. Does the West have to respond with like for like?
As for paragraphs 213 to 216 on the combined Defence Staff, I need not rehearse the arguments for and against any arrangements which diminish the professionalism of the single service staffs. We heard the critique from the right hon. Member for Brighton, Pavilion (Mr. Amery). Moreover, we have read the discussion in the correspondence columns of The Times by past chiefs of the defence staff and some past heads of single services. Their consensus is that the Chief of the Defence Staff is best served by healthy inter-service competition, with himself as umpire.
Yet, no matter how often we read paragraphs 213 and 214, I do not see how, in the light of the constraints placed on them in paragraph 213, the chiefs of staff could possibly perform the roles required of them in paragraph 214. It is as though a hospital administrator said to a

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surgeon, "You reckon the operation is necessary. Get on with it, and I will decide how many swabs, instruments and bandages you can have." The right hon. Member for Pavilion thought that that sounded wet, as did the right hon. Member for Plymouth, Devonport (Dr. Owen). So did I. Active service people will think it wet, too, and will lose faith in higher defence management.
If the proposed reorganisation takes place, it is bound to make the Ministry of Defence a more introverted place, thinking small, whereas it should be thinking more broadly. For example, the Navy must co-operate with the Foreign Office, the Department of Trade and Industry, the General Council of British Shipping and the supporting industries. It should get on with it, without having to explain to Colonel X or Group Captain Y why it must get on with it.
If the Ministry of Defence is thinking small on defence, and there are no single service Ministers, how is Parliament to think big? They were some of the questions that were addressed to the Secretary of State, in his absence, by his right hon. Friend the Member for Pavilion.
In paragraph 234 and those that follow, on industrial competition, it seems that the policy of providing the services with the right equipment and support has been subordinated to party dogma. For example, it is difficult to equate the ideals set out in the defence statement with the realities that were shown on the recent "World in Action" television programme on British Shipbuilders.
The objective set out in paragraph 205, of avoiding a budget
"committed up to the hilt with expensive and inflexible programmes for several years ahead",
is hardly a philosophy to lend itself to private enterprise. It will not want a track record littered with cancelled contracts as plans change.
With regard to the plans for private yard refitting of naval vessels, the statement makes little mention of the accumulation of expertise available to the royal dockyards, or of the fact that refits are notoriously hard to keep to time. Breakdown, accident or war will change the pattern. The royal yards can cope with this requirement for flexibility, but can the private business man afford to wait around?
If private enterprise be the key phrase, why should the royal dockyards not provide a money-making service to users other than the Crown? It would be those secondary users who would have to accept any possible delay, not the fleet.
Paragraphs 301 to 321 deal with defence equipment procurement, but the tail must not be allowed to wag the dog. For example, I am not sure of the value of what paragraph 304 calls "promoting a dialogue" with industry without setting a staff target. When any of us goes shopping, it is to purchase what we want to buy, not what the shop wants to sell us.
One of the effects of the public debate over the role of nuclear weapons in the Alliance strategy has been the emergence of broad-based support for the conventionalisation of NATO strategy. As doubts about the moral legitimacy and military utility of the threat of first use of nuclear weapons have grown, so has the interest in reducing NATO's reliance on nuclear weapons through improving non-nuclear forces and, where possible, harnessing an emerging technology.
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The search for financially feasible and politically sustainable options for enhancing conventional deterrence constitutes a critical—for some people the most critical —Alliance challenge for the 1980s. Despite that, how much and in what way NATO's conventional forces could and should be strengthened as a non-nuclear option is completely neglected in this year's defence Estimates. The Secretary of State's reference to first use this afternoon, fascinating though it was, has been heard before. It related to yesterday's argument. We have all heard that before, but we have moved on. That was reflected in the debate, and it is on the record.
Several new issues could and should have been addressed in this statement, as my hon. Friend the Member for Houghton and Washington (Mr. Boyes) said. How much is enough in conventional capability to maintain deterrence without invoking the threat of early first use of nuclear weapons? It is questions such as these that should have been posed. To what extent would improved conventional capability increase the prospect for a protracted or regionally limited conventional conflict in central Europe? What means of improving conventional defence would be most cost-effective? Is the Alliance prepared to devote additional resources to conventional forces? If additional resources are not available, what trade-offs or reprioritisation within current force plans make most sense? What role may arms control play in achieving stability in Europe at lower levels of conventional armaments?
These questions are being discussed by hon. Members on both sides of the House, who are facing up to the challenge of the late 1980s and how to preserve the peace and present a reasonable and convincing deterrent without having to resort to the nuclear option. There are others, such as how to explore emerging technology on behalf of conventional deterrence. What possibilities is new technology opening up for non-nuclear defence? How far away can we push that nuclear threshold? They are the questions to which the Secretary of State should have addressed himself. The Government's defence White Paper, I am bound to conclude, does not resolve those anxieties that have been raised repeatedly in the debate about the formulation and implementation of defence policy.
I cannot resist quoting from today's Times. The explanation offered for this unsatisfactory defence statement is
"the poverty of ministerial thinking on strategic issues … We can do better for the security of Europe, and at a lower running cost, if only Mr. Heseltine could look up from his management toys and focus on the big picture of the future."
It is true that the defence statement makes a gesture in the direction of conventional forces, promising more men and more equipment in the front line, but we have heard all that before, and both political parties when in government have been doing precisely that for the last 14 to 15 years. Even the Secretary of State cannot avoid doing too little, and at the expense of a reduction in support services. The equation "more up front, fewer at the back" will not convince, and will only sound like skimping, whereas, as The Times says, what we are all looking for now is radical and innovative change. There is an absence of any serious attempt by the Secretary of State to look beyond the managerial minutiae, not only at the scale of Britain's strategic priorities, but at the possibilities that

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exist, especially given his present chairmanship of Euro group, for reinvigorating strategic and tactical thinking within the Alliance. In the words, again, of The Times:
"The prize of innovation and radical thinking would be considerable."
However, at the time when there is a need for the most clear-sighted debate about future defence policy, the Government are moving to neutralise the individual service chiefs, and to halt all inter-service argument. What a time! This cannot be good, and the right hon. Gentleman has not convinced his hon. Friends. Such argument as is called for cannot be sterile. Administrative efficiency is to be prized, but, in the Ministry of Defence, not at the cost of creative thinking.
The truth is that, after next year, defence spending may, for the first time in nearly a decade, begin to decline in real terms. Above all, after that, Trident will begin to bite deeply into the cash available for new equipment programmes. The assumption is that further management savings will fill the gap, but that is mere wishful thinking. The real danger is that, by concentrating spending on Trident, Britain's conventional forces will be weakened just when opinion is moving in favour of deterring any possible aggression in future by improving the conventional balance not merely in Europe, but even further afield, and encouraging other people to look towards conventional forces, thereby minimising the risk of a nuclear war. This anxiety has been expressed by every Opposition Member who has spoken. Whatever economies the Secretary of State secures now, as my right hon. Friend the Member for Llanelli (Mr. Davies) warned earlier, the future appears to hold only the promise of further defence reviews, and an erosion of our conventional fighting capability.
My right hon. Friend quoted the Daily Telegraph. What the Secretary of State must know, because he has his press cuttings, is that he got a bad press. He cannot mention one newspaper, never mind one serious newspaper, that gave an unqualified welcome to the defence statement. Most newspapers came out hard against it, and the Daily Telegraph is not alone. When the Daily Telegraph uses the kind of language that it did on 16 May, the Secretary of State must ponder and ask himself whether he can easily dismiss the criticism in today's Times.
Britain is at a crossroads in defence policy and many people, including the hon. Member for Ashford (Mr. Speed), who made a telling and authoritative speech, believe that we cannot go two ways at once—but the Government are trying to do just that. Even among those who accept the desirability of an independent nuclear deterrent, there is a growing number who see the successor to Trident — the minimum which is credible and effective, so the Government tell us—as a millstone. It is a fact that defence policy is constrained by what the nation can afford. If we face the choice between a minimal nuclear deterrent and efficient conventional forces, a growing number of British people will feel more secure with the latter.
9.40 pm
The Parliamentary Under-Secretary of State for Defence Procurement (Mr. John Lee): We have reached the end of the first day of a two-day debate on the defence Estimates. In the remaining few minutes I shall endeavour to deal with some of the detailed points that have been raised. The debate has been marked by the genuineness of
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the speeches. They have ranged from the anti-cruise unilateralist speeches of the hon. Members for Houghton and Washington (Mr. Boyes) and for Meirionnydd Nant Conwy (Mr. Thomas) to the speech of my hon. Friend the Member for Beverley (Sir P. Wall), who asked for a significant increase on defence expenditure. We have covered the range of defence attitudes.
With the possible exception of the Merchant Navy, Trident has taken up most of our time. It was mentioned by the right hon. Members for Llanelli (Mr. Davies), and for Plymouth, Devonport (Dr. Owen), by the hon. Member for Yeovil (Mr. Ashdown) and by my hon. Friend the Member for Ashford (Mr. Speed) in a questioning and probing sense. We also heard speeches in strong support of Trident from my hon. Friends the Members for Beverley and for Davyhulme (Mr. Churchill).
The fundamental question which the Government faced when considering the replacement of the Polaris force was whether the possession of an independent and invulnerable strategic deterrent would make an attack, conventional or nuclear, by the Soviet Union on us and our allies more or less likely. The Government's view, which five successive Governments have shared, is that possession of an independent nuclear force enhances deterrence and prevents war by showing that the risks involved in starting a way are seen by a potential aggressor to outweigh any possible gain that it might hope to achieve. Against that background, there is no alternative to planning for a successor to the present force, which has served the country well by maintaining a continuous deterrent patrol since 1969. To our knowledge, the Soviet Union has never found one of our Polaris submarines on patrol.
The remotoring of the missiles and the Chevaline programme has ensured that the force remains effective until the mid-1990s, but it is wishful thinking to imagine that the life of the Polaris force can be extended indefinitely. The right hon. Member for Devonport conceded that. The choice of a submarine-launched ballistic missile such as Trident was not automatic. Other options were rigorously examined, as the open government document which was published in July 1980 made clear. However, the combination of a submarine-launched system, which can effectively be made invulnerable to attack, and ballistic missiles, which, unlike aircraft or cruise missiles, are not vulnerable to enemy air defences, represented the most cost-effective solution for a minimum credible deterrent force.
The right hon. Member for Devonport and my hon. Friend the Member for Ashford queried whether a national nuclear deterrent force based on ballistic missiles would remain effective into the next century, in the light of likely anti-ballistic missiles defences. As my right hon. Friend the Secretary of State made clear, such likely developments were among the issues which were considered when the decision was taken to purchase the Trident system. It is precisely because we believe that the Trident system offers the best possible means of ensuring the continued effectiveness of our national nuclear deterrent and overcoming possible developments in defensive systems, that it was chosen. It was also suggested that a force of sea-launched cruise missiles would be be less expensive. Studies have shown that such a force, of camparable effectiveness, would be more rather than less expensive than Trident.
The unit cost of a cruise missile is less than that of a ballistic missile. However, as a cruise missile carries only

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a single warhead, much larger numbers are required to provide a deterrent equivalent to a ballistic missile force. A cruise missile force would require many more submarines — the most expensive component of our strategic deterrent.
I hope that what I have said will put the cost of Trident into perspective. Its cost represents a considerably smaller proportion of the defence budget than any of the other major roles. The current Polaris force represents, on average, less than 2 per cent. of the defence budget. Over the period of procurement Trident will, on average, cost only 3 per cent. of the defence budget and 6 per cent. of the equipment budget.
Mr. Ashdown: The Minister spoke about a credible deterrent, and compared like with like. How many missiles comprise a credible deterrent?
Mr. Lee: I am not prepared to be drawn on that point. However, four Trident submarines, each with 16 missiles tubes, mean that a considerable number of warheads—as yet to be decided — can be deployed. It is an extremely effective and substantial system.
The latest estimate of the cost of Trident is £8·7 billion. The increase over the previous estimate is wholly attributable to inflation and exchange rate variations. I freely concede that, with 45 per cent. of expenditure in dollars, the cost is bound to vary with exchange rate movement and fluctuation—either up or down. It was suggested that Tomahawk missiles could be fitted to SSNs or even to surface ships. Again, those options have been considered, but to have a strategic missile parcelled out among the conventional fleet would produce an unacceptable conflict between the fleet's conventional and nuclear roles. Indeed, it could weaken our conventional deterrent.
Sir Antony Buck: Does my hon. Friend agree that one reason why the Government have chosen Trident is exactly the reason that caused the now Opposition to update Polaris by the creation of Chevaline? However, we are doing it openly and having a proper debate, whereas the Opposition did it in a wholly different way.
Mr. Lee: My hon. and learned Friend is right. I did not want to repeat the point, which he has made consistently and which embarrasses the Opposition.
A number of hon. Members asked about the size of the fleet, and specifically about the ordering of the type 23. The first-of-class order for the type 23 will be placed later this year. As is usual, there will be a gap of about a year to enable the shipbuilder to gain experience of the new design before further orders are placed. Subsequent ships will be ordered at a rate of about three a year. That was the objective set by Sir John Nott in July 1982. The detailed pattern of ordering has yet to be decided; it may vary a little from year to year to take advantage of batch ordering. As yet, we have not decided on the precise number of type 23s.
Currently, we have 55 escorts. It remains the Government's objective to maintain a front line of 50 destroyers and frigates in the longer term, all of which will be in the front line, and none in the standby squadron. A number of hon. Members praised the decision to run on eight ships.
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In the 1990s, destroyers and frigates will, on average, be newer than they are today. They will also be more capable. Most will carry point defence missile systems and all will carry surface-to-surface guided missiles—either Exocet or Harpoon. An increasing number will be fitted with towed array sonars and all will be capable of carrying a helicopter, either Lynx or the new EH101.
Apart from those escorts, current plans are that the submarine fleet will remain at its present size, but there will be an increased proportion of the more capable nuclear submarines. The three carriers will continue in service into the next century. The existing specialist amphibious ships will reach the end of their lives in the 1990s and we are examining their replacement. Mine warfare forces will continue to be modernised with a third new class, the single role mine hunter being added to the two already under construction.
The hon. Member for Sheffield, Attercliffe (Mr. Duffy) intervened early in the speech of my right hon. Friend and raised the question of the number of ships currently on order. He endeavoured to make the point that the majority had been ordered by the Labour Government. Of the 37 ships currently on order, seven were ordered by the Labour Government and are still building. The remaining 30 were ordered by the Conservative Government. In addition to those 30, six ships ordered by the Conservative Government have already been completed and accepted.
The Select Committee report was referred to by many hon. Members and was gone through in detail by its Chairman, my right hon. Friend the Member for Spelthorne (Sir H. Atkins), who welcomed the change in the tail-to-teeth ratio, in the arms control unit and in the whole concept of more competition and collaboration. He asked a number of questions about the possibility of substantially increasing competition.
A problem that we have at present, when we are utilising 90 to 95 per cent. of the procurement spend within the United Kingdom, is that we have a substantial number of monopolies or near-monopolies, companies such as Rolls-Royce, Westlands, Marconi Torpedoes and, to a great extent, British Aerospace. As we spend substantial sums with them each year, in prime terms it is not always possible to obtain competition, so there is a substantial drive within the Ministry of Defence to establish the maximum level of competition among subcontractors. That is one of our substantial aims. Nevertheless, competition policy is having a number of successes, and the figure of 30 per cent. has been mentioned as being the savings in certain instances.
Most hon. Members have commented on the whole question of the size of the Merchant Navy and its decline in recent years. We are extremely conscious of the situation, but I can only say at this stage that we are examining closely and in great detail with the Department of Transport the defence implications of the present and future size of the merchant fleet. I assure the House that the matter is under serious and active consideration. We are not unaware of the implications.
Sir Humphrey Atkins: I asked for an assurance that in the next White Paper, unlike this one, we should once again have what the Ministry of Defence used to provide, namely, a report on the size of the merchant fleet available to the Ministry of Defence in times of emergency. May I have that assurance?
Mr. Lee: I cannot personally give that assurance, but I assure my hon. Friend that the subject will be looked at most carefully.
On the subject of the merchant fleet and the sustainability of our naval force at sea, I draw the attention of the House to the announcement by the Secretary of State earlier that we intend to invite proposals shortly for a new class of support ship for the Royal Fleet Auxiliary. I do not run down the importance of the merchant fleet, but the first line of support must be the Royal Fleet Auxiliaries.
The auxiliary oiler replenishment is a new concept for the Royal Navy. It is a one-stop ship, which means that a frigate or destroyer can replenish at sea its fuel, ammunition and stores from a single ship, whereas at present three separate operations might be required. The savings in valuable operating time must be obvious. Perhaps less obvious, but most important, is the fact that at the time of the Falklands, as the loss of the Atlantic Conveyor showed, it is vital not to concentrate high-value support items in too few ships. With the AORs, it will be possible to spread the risk — of the ammunition holdings, for instance—over more hulls.
The ships will also provide vital support to the major weapon system of the type 23 frigate — its antisubmarine helicopters. They will also be fitted with the means of self-defence, including the vertical-launched Sea Wolf system. These ships will enter service towards the end of the decade and a presentation will shortly be made to industry by the controller of the Navy. The intention is that the first batch of these AORs should number six.
Mr. D. E. Thomas: In that context, will the Minister give an assurance that there will not be a repeat of the appalling disaster at Bluff cove?
Mr. Lee: I sympathise fully with the emotion and sentiment behind the hon. Gentleman's question, but I cannot give a complete assurance that such a disaster will never happen again. It would be improper for me to give a flippant answer from the Dispatch Box.
Mr. Speed: When I questioned my right hon. Friend the Secretary of State for Defence at a sitting of the Select Committee on Defence on 22 May, he said that the Government were watching the position of the Merchant Navy and at that stage had not gone beyond that. Is my hon. Friend saying now that the Government have moved beyond that stage, or are they still watching the position?
Mr. Lee: When we respond to the Select Committee's report, we shall deal with that issue. It is safe to say that the issue is being considered by Ministers with considerable urgency.
My right hon. Friend the Member for Brighton, Pavilion (Mr. Amery) and other hon. Members talked about reorganisation. My right hon. Friend apologised to me for not being able to remain to listen to the Front Bench replies. It would not be appropriate at this stage in the debate to reply to questions on reorganisation. I shall draw the attention of my right hon. Friend the Secretary of State to the remarks that have been made. I understand that it is my right hon. Friend's intention to present a White Paper to the House on reorganisation in July, when he can be fully questioned upon it.
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The hon. Member for Dunfermline, West (Mr. Douglas) raised a genuine constituency interest when he talked about the royal naval dockyards. I know that the hon. Member for Dunfermline, East (Mr. Brown) would have done likewise if he had been able to catch the eye of the Chair. The hon. Member for Dunfermline, West asked about the Levene report. When we reach a definite decision that changes will offer advantage, we shall fully consult the trade unions. I am sure that a statement will be made to the House. The hon. Gentleman knows that I have seen union delegations from Rosyth. I asked the members of those delegations to submit their proposals, counter-proposals and suggestions to me for consideration. That offer remains open.
Mr. Douglas: I take it that a statement will be made in the House and that it will not be presented in a written answer.
Mr. Lee: That has to be a matter for the business managers of the House and not for me personally. There is no intention not to have full debate on the issue.
My hon. Friend the Member for Windsor and Maidenhead (Dr. Glyn) made a number of interesting comments. He drew our attention specifically to the possible implications of a change in the Sino-Russian relationship and how that could affect us militarily.
The hon. Members for Houghton and Washington (Mr. Boyes), for Meirionnydd Nant Conwy and for Edinburgh, East (Mr. Strang) made anti-cruise and unilateralist speeches. I cannot deal with their arguments in any detail in the limited time that is available to me. We have had ample opportunity in separate debates to discuss cruise and unilateralism.
My hon. Friend the Member for Davyhulme praised our attempts and successes in increasing the size of the reserve forces, but wanted us to go even further. My hon. Friend the Member for Ashford referred to naval reserves and asked whether we could do more to bring their training more up to date. My hon. Friend the Member for Edinburgh, West (Lord James Douglas-Hamilton) raised a number of extremely important matters concerning Ferranti, a company in his constituency, for which he tries always to fight. He seeks to press home every advantage of the company whenever the opportunity arises.
In a democracy, it is right that there is a healthy debate on the extent of defence expenditure, on the balance between the services and on the balance between conventional and nuclear forces. The Opposition argue that, in a nuclear era, without mutual disarmament it makes sense to eradicate all nuclear weapons and bases from United Kingdom soil. We find that concept entirely unacceptable. One has only to look at the relentless buildup of Soviet chemical weapons to see that one-sided disarmament achieves nothing.
I freely acknowledge that certain Labour speakers tonight genuinely believe in substantial conventional arms expenditure, but they are increasingly in a minority as the harder Left within the Labour party takes hold. [Laughter.] The hon. Member for Kingston upon Hull, North (Mr. McNamara) may laugh. Let us await the resolutions put and passed at this year's Labour party conference. We shall watch with interest.
We believe that the defence Estimates that we have submitted to the House are sensible and realistic, given the

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threat as we perceive it, given the resources that are available, and given the fact that, regrettably, we have not so far achieved the balanced disarmament that we all seek. I commend the Estimates to the House.
It being Ten o'clock, the debate stood adjourned.
Debate to be resumed tomorrow.

Land Use Survey
Motion made, and Question proposed, That this House do now adjourn.—[Mr. David Hunt.]
10 pm
Mr. John Heddle (Mid-Staffordshire): I am most grateful to you, Mr. Speaker, for having selected, as the subject of tonight's Adjournment, Britain's wasted acres and the case for a national land use survey, particularly on an evening when the House will be allowed to adjourn at a relatively early hour. I am also grateful to my hon. Friend the Minister for having taken the time and the trouble, after a very busy day, to come here and respond to the debate.
The timing is particularly fortuitous for two other reasons. The first is that five days ago, as the House will recall, the Select Committee on Environment under the able chairmanship of my hon. Friend the Member for Hornsey and Wood Green (Sir H. Rossi), published its report on green belt and land for housing. My hon. Friend the Chairman of the Select Committee very much regrets that constituency business prevents him from being able to be in the Chamber this evening.
The timing is fortuitous, secondly, because, four days ago, as you will recall, Mr. Speaker, the House debated — and the reply was given by my hon. Friend the Minister—the subject of the arts and the heritage. I was unable to be here on that day, but I read the Official Report over the weekend, and not once did any hon. Member, on either side of the Chamber, refer to our land as being part of our heritage.
I submit that Mark Twain got it half right when he said:
"Purchase land. They ain't making it any more."
If he had been here in this Chamber in the latter half of the 20th century, I think he would have said: "Preserve land. Not only ain't they making it any more, it's our most valuable natural national resource." Yet, despite that, we as a nation seem to take land for granted. We cause it to become derelict and we despoil it. We ignore it and its maximum use at our peril.
I yield to no one in my admiration for what my right hon. Friend the Secretary of State and his ministerial colleagues in this Parliament and in the last have done to alert the nation's attention to the fact that there are many thousands of acres which, before our very eyes, are left derelict, despoiled, neglected and unwanted.
I yield to no one in my admiration for what the Government have done in bringing that land forward—as far as they are able to do so—for development, in encouraging that development with urban development grants and derelict land grants, ensuring that the owners of public land do not take that land for granted, as perhaps we, as pedestrians or drivers, have done, and compiling land registers.
If time permits, I propose to make one or two criticisms of the implementation of the vacant land registers. But I ask my hon. Friend whether, perhaps, as a nation, we may be guilty of squandering land as though we lived in the middle of some vast undeveloped continent instead of on a small and crowded island. Is not much of our countryside becoming destroyed and fragmented? Are not the hearts of our cities in part becoming rotten and decayed? Has there not been a chain reaction of destruction, not so much because we are wicked and destructive, but rather because as a nation we have become neglectful and wasteful?

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The tragedy is that we have only incomplete and incompatible records of what is happening before our very eyes, of how much land is being used and of how those uses have changed over the years, whether or not in the context of industrial change that has taken place with them. I cite as an example the M25 motorway box, which was no doubt assembled by stealth with ministerial consent to provide easy access for traffic wanting to skirt the metropolis. Is there anyone within the Department of the Environment who is able to assess the demand for industrial development, factory and warehouse space, distribution space, for housing and the attendant facilities such as schools, shops or offices within the motorway box, based on the information, statistics and data that are at his fingertips?
The motorway is the responsibility of the Department of the Environment and the adjacent development is the responsibility of the adjacent county planning authorities which devolve their powers to some extent to adjacent local planning authorities. I wonder whether we can have an overall picture as a result. I submit that, in the age of the computer, there can be no excuse for not having such information available at the touch of a button, or at the flick of a finger.
Let me give the House one or two statistics to show how prodigal we have been in the recent past. In the five years between 1975 and 1980 our nation lost about 500,000 acres of grade I or II productive agricultural land to some use or other. That area is equivalent to the county of Gloucestershire.
Wasteland that lies idle, derelict, dormant or despoiled in our cities and towns, and even in our villages, is still increasing. By the end of the 1970s we had enough wasteland on which to rebuild, if we had wanted to, all of the 34 new towns that the House, in its wisdom, has created in times past, with space left to spare.
Let me put it another way. The wasteland that has been identified in vacant land registers is about 250,000 acres. I am sure that the amount of vacant land is substantially more than that because land registers deal only with land of more than one acre in size. I am certain that most of the local authorities that contribute the information to land registers have incomplete records of what they own. Those 250,000 acres are sufficient to cater for 5 million families, and to provide homes for 15 million people.
I must ask my right hon. Friend whether we are reinstating the land that county planning authorities designate for mineral extraction purposes. I believe that a condition is imposed by local planning authorities on granting licences to mine for whatever purpose, to the effect that the licence holder, the freeholder or leaseholder must reinstate the land after it has been worked. But how many mineral operators leave those areas almost completely mined, but not quite and so avoid the necessity of reinstating the land to its former use as agricultural land, or to leisure or recreation purposes or for housing?
I understand that the Department of the Environment has identified about 350,000 acres that has been mined but not yet put back into an unspoiled and non-derelict state. Other estimates put the acreage of wasteland due to mineral operations at about 700,000 acres, or the equivalent of the whole of the curtilage of my county of Staffordshire. There is a great difference between 350,000 and 700,000 acres. There are two different views, neither
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one nor the other being necessarily correct. In the absence of a national land use survey, it is impossible to quantify the amount of land that is so despoiled.
We have what we might call "bufferland": the sterile interface land between industry and other urban or rural activities. It is blighted, underused or vacant because of its former industrial use, its close proximity to an airport or motorway or because it is close to land with an existing industrial use and is perhaps subject to fumes or toxic waste. Estimates of such blighted wasteland vary from 750,000 acres to well over 1 million acres. However, in total we are talking about the staggering figure of 2·5 million acres, for which we have no national record as to its past, present or future use. I am talking about 5 per cent. of our total land surfaces, or an area equivalent to the combined counties of Gloucestershire, Wiltshire and Hampshire that is lying derelict, despoiled, underused and idle.
I hope that my hon. Friend the Minister will acknowledge that there is widespread and growing concern about that huge loss and its social and economic consequences. Of course, there are many organisations concerned with parts of the total problem, and with conservation of particular areas at risk, with the loss of a hedgerow or of a species of butterfly. They do a marvellous job, but we and they must never lose sight of the total picture of national land loss. There is a danger that that will be overlooked because of purely local worries.
One organisation that persuaded me to accept its fine of argument and provided me with a number of the statistics that I produce for the House tonight was the Land Council, which has made a submission to my hon. Friend the Minister and to the Select Committee, which reported last week. My hon. Friend is as aware as I am of the Town and Country Planning Act 1947, although he will be much better acquainted with the details of it. It sought to implement a rational use of land. It is the envy of many other countries, particularly in Europe, but it has not helped to implement that rational use of land. There is still no agreed knowledge as to how we currently use our land nation-wide. Neither that Act nor any subsequent Town and Country Planning Act has provided the resources to enable us to find out.
Is nothing, then, being done? My hon. Friend will be aware of the commission, recently announced, to ask the Ordnance Survey to undertake what will amount to reporting land use change. But I submit that the enterprise will be hampered by two particular drawbacks. First, it will have no ability to measure changes in land use, as there is no common, agreed baseline or classification system from which to measure. Secondly, the surveys will be partial and random, and accurate results from the whole country cannot be extrapolated from such sample surveys. There is, too, a project being run by the Countryside Commission and the Nature Conservancy Council to monitor some aspects —but only some — of landscape change.
Random surveys that are based on arbitrary classifications will not fit the national bill, however useful they may be to individual organisations locally. My hon. Friend may argue that derelict land registers will surely provide the answer that I seek. As I have said, I welcome the registers, and if we had them earlier we might have headed off some of the inner city problems, because private capital might have been prepared to invest.

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However, it has not done so, because it was not aware that the land was lying, derelict, despoiled and neglected before our very eyes.
I should stress that I am talking about a national survey that is specifically related to land use. No part of my proposal refers in any detail to the proposition put forward by Dr. Alice Coleman that there should be a national survey of land ownership. My hon. Friend will be aware of the first report of the Environment Committee, which was published last Wednesday. Indeed, I paid tribute to it earlier. It recommends that a pilot study should first be commissioned using a number of methods
"including that proposed by the Land Council and the results evaluated against the results of the Ordnance Survey-based project already commissioned by the Department".
I hope that my hon. Friend will consider the cost of setting up a pilot study to provide the records that I believe that the Department will require to monitor the change of land use in future. I believe that it will cost about £250,000 to fund such a study.
Funds could be made available from two Euro-sources. What better time to dwell upon those than in the aftermath of last week's elections to the European Assembly. I refer to the ESPRIT fund, which is designed to explore information systems, and the DG fund which is specifically related to the environment and consumer protection.
As populations have risen so has the destruction of land. A population census every 10 years enables us to understand the forces acting upon it. What could be more logical and valuable than to institute a decennial land use survey to complete the national picture of our island, of its land—its most valuable national resource—and its people to enable us henceforth to use our land sensibly so that we are not profligate with such a vital and irreplaceable resource?
10.15 pm
The Parliamentary Under-Secretary of State for the Environment (Mr. Neil Macfarlane): I am grateful to my hon. Friend the Member for Mid-Staffordshire (Mr. Heddle) for raising this important subject and for demonstrating that he has had a wide and varied interest in this important issue for a long time. He has identified the wider interest outside the House. My hon. Friend has described the versatility and importance of the whole subject.
The debate on a national land use survey is related closely to the concerns of the recently published report of the Select Committee on the Environment. I pay tribute to its work. It dealt with the need to protect green belts, to encourage urban regeneration and to make adequate land available for development.
The Government's commitment to these aims is enshrined in the circular advice which my Department gives to local authorities in the exercise of their planning functions. I agree that a new comprehensive land use survey, repeated at regular intervals, would be a most useful indicator of how far we are succeeding in our pursuit of these aims and in the preservation of the countryside in general. I endorse what my hon. Friend said about our priceless asset.
The Environment Committee's report on green belt and land for housing was received last week and is being
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studied. My hon. Friend will appreciate that I cannot make a fuller comment at present. The Government will respond to the report in due course.
The report includes comments on the draft green belt and land for housing circulars published for consultation in February. My right hon. Friend expects to publish these circulars shortly, having taken account of the Committee's comments on them.
Going out on the ground to complete such comprehensive surveys is labour-intensive and therefore costly, especially if they are to be completed in a short space of time and we need to be confident about their accuracy. My Department has therefore for some time been considering other possibilities ranging from ground sample methods to the employment of the new remote sensing devices carried by aircraft or satellite.
Some provide information which can be stored in digital form and processed automatically. Regrettably, in spite of the technical advances which have been made in recent years, I am advised that none of the remote sensing methods available at present offers images with a clarity of resolution sufficient to interpret changes in the extent of urban land use categories with acceptable accuracy. This is especially the case for the survey of the fringes of urban areas where they intermingle with the surrounding countryside.
My Department has also turned to other statistical means of gaining land use information. At present, for net changes out of farmland and into a broad urban use category, we rely on the data supplied by the Ministry of Agriculture, Fisheries and Food from questions asked of farmers in their annual June census. But the statistical reliability of this source is such that the data are made available only at the national level and as annual averages over five years.
Although they are limited in scope, these figures have provided useful measures of the success of our policies guarding against unnecessary loss of agricultural land. These losses should be placed in perspective. About 75 per cent. of English land, where the population pressures are greatest, is still in farming use and another 6 per cent. is under forestry or woodland. These percentages are even higher for Wales and the United Kingdom as a whole.
The Ministry of Agriculture's figures for transfers from agriculture to urban development go back to the 1920s. They show that the average loss to urban development, following the introduction of the town and country planning system, is substantially lower than it was pre-war. The downward trend is best illustrated by the estimates for England and Wales, where the figures are the most complete. They show that transfers from agriculture to a wide range of urban developments, including roads and quarries, averaged about 42,000 acres for each year between 1965 and 1970. But that is compared with yearly averages of 62,000 acres in the 1930s, when there was a boom in house-building. The latest figures available, up to 1981, show much lower averages of 19,000 acres.
I wish to show no complacency. The recession of two or three years ago may well have lowered the figures. Our policies must continue to ensure that only the minimum of agricultural land, preferably of the lowest qualities, is taken for development and that no land is so damaged that it cannot be used, eventually, either for development or farming.
My hon. Friend has been a diligent questioner about the success of the land register initiative in securing the release

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of unused public land. I share his view entirely. It is true that there is no room for complacency. Some 112,000 acres of idle land are on the registers, and nearly half of it appears to be suitable for development. We cannot afford to let assets lie fallow in this way. But I must beg to differ slightly from my hon. Friend when he says that land registers are not working as they should. Since the scheme began, 9,315 acres of registered land have been sold and a further 4,276 acres have been removed from the registers because the land has been brought into use in the public sector. The six-monthly return for 1 January showed in fact a marked acceleration in this turnover. Moreover, over a third of the land which remains on the registers is available for disposal. The power to direct the disposal of a particular land register site has not been used yet, but my right hon. Friend is ready to use it when he is satisfied that it would be justifiable to do so in relation to a particular site.
In the past, for the three years from 1975 to 1978, statistical information on land use changes was sought from local authorities. It looked to be a promising approach, but most authorities proved unable to supply the information required. On taking office, we reached the conclusion that the results were inadequate in relation to the effort involved and we asked officials to investigate improvements urgently.
My Department has been fortunate in having free access to complete air-photo cover of the country flown by the Royal Air Force in 1969. During the 1970s this was analysed in land use terms by consultants and the results were published in 1978. Unfortunately, such are the limitations on the interpretation of aerial photographs for small areas of development, that the results, although comprehensive in national coverage and giving a very good idea of the broad extent of urban development some 15 years ago, provide use categories which are not relatable in any direct sense to the other sources of land use, stock or change data.
So far, I have referred to the past efforts made by my Department in this direction because it is important to understand them. I am also aware of the considerable work by notable academics in achieving surveys and estimates of urban and rural land use. A first effort at a survey of the whole country was undertaken by Professor Stamp in the 1930s, but that concentrated on rural land utilisation. Estimates of the total urban area, at that time, were derived from it. I am also aware of the work done by Miss Alice Coleman of King's college, London, which my hon. Friend mentioned, in directing a survey on a roughly comparable basis during the 1960s. Inevitably, that also took a long time to complete.
Currently, the Land Decade Educational Council, a private body, has as one of its aims the promotion of further land utilisation surveys at regular intervals. It would like the first one to be completed in 1986—the 900th anniversary of Domesday. But in this connection perhaps I can emphasise the point that neither we nor the council as far as I know, is interested in registers of property holdings on the lines of the original Domesday Book.
The current interest is in what is happening to the broad patterns of the use of our land—for example, its use for housing or industry or agriculture, the scenic patterns of the landscape, and its coverage of fields, woodlands and natural features — all of which my hon. Friend mentioned — to provide policy indications for the
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Government, its agencies, such as the Countryside Commission and the Nature Conservancy Council, and the local authorities of how far planning and conservation policies are guiding change.
With this aim very much in our minds, and taking note of constructive comments from outside bodies, the Department has recently undertaken some further initiatives in the development of methods for monitoring change and periodic survey. For the past two or three years, departmental efforts in this direction have been devoted mainly to the possibilities of gaining up-to-date information about change in urban land use, especially developments on agricultural land, and about changes to rural landscape features. We have taken the view that a better understanding of the rate and pattern of change appears to offer the most effective means of providing early results for evaluating our policies rather than seeking the full picture of our stock of land uses or landscape coverage.
Those two main initiatives on land use and landscape change are related but are seeking to measure different things. From studies of alternative methods of getting statistics on changes to urban land use initiated by my right hon. Friend the Secretary of State for Employment, when he was Minister for Local Government and Environmental Services, it emerged that the most economical approach would be to build upon the map revision work of the ordnance survey. I am not sure that I carry my hon. Friend entirely with me on this subject, but the revision is being undertaken consistently and continuously and, naturally, it is done in a most professional way. The survey programmes are devised on the basis of intelligence received from several sources, including local authorities, about change on the ground. Some areas and some kinds of change—mainly the urban extensions—are surveyed more frequently and therefore kept more up to date than others. But over time the whole country is covered
Pilot studies have been completed, and I am proposing to seek a contract with the ordnance survey for it to record and supply land use change information on a regular basis for an initial period of three years starting in January 1985. The costs of the raw data will be small, as the ordnance survey will be charging only the marginal cost of noting, on our special form, locational references and changes to parcels of land use as they are being surveyed for map revision.
Information on some 19 categories of urban and rural land use will be collected from those data. We would expect within two years of the starting date to have a good demonstration of the broad patterns of changing land use at national and regional level. Later, when we have received more observations, we would expect to give fuller details, possibly down to county level and for special areas such as green belts and national parks, of changes between the most important individual categories of land use.
Our other initiative has been to examine ways of improving information on rural landscape change in conjunction with the Countryside Commission. This type of monitoring is important because there is no ready-made surveying process like that of the ordnance survey.
Proposals were invited from survey firms, research centres and Government agencies to establish the current, past and future distribution and extent of important landscape features. A methodology is now being developed by the chosen contractor with advice from other

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interested agencies and Government Departments. It uses a sampling frame based on previous work done by the Forestry Commission. Within the sample areas, the coverage of landscape features will be determined using a mixture of aerial photography, satellite imagery and ground survey.
By "features" I mean land, cultivated or under grass, woodlands, trees, walls, hedges, and so on. The sampling method is expected to provide statistics on the stock of such features at national, regional and possibly county levels, for 1981, 1971 and 1961, so that change can be assessed at a known level of statistical reliability.
Perhaps I should mention that we are also looking to the Nature Conservancy Council for information regarding the change in extent of habitats of nature conservation importance. My officials are in close contact with the NCC survey, which will provide complementary information to the landscape study. The two departmental monitoring initiatives will be to a great degree complementary. One deals with aspects of change to the coverage of countryside features and the other is primarily concerned with current changes to urban land use—that is, "development".
However, such change data, despite their immediate value for policy purposes, can provide only year-by-year comparisons of how land is changing use. They provide no sign of what percentage of land in a use has changed. To achieve that, data on the present stock of land are needed and my Department is also at present considering ways of achieving this.
I have mentioned that the Land Decade Education Council has for some time been promoting its ideas for a national land utilisation survey. It has been in touch with my Department, and, I understand, with the European Commission, which may provide financial support.
Full ground surveys are expensive. I note that the recent report of the Select Committee on the Environment quoted
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a sum of £7 million for a wide survey. It also recommends that a study of alternative methods should be undertaken. I am happy to say that we are already considering such a study as the next step.
What seems to be required first is an examination of all the latest developments. The study should cover ground surveys, remote sensing, which is already under consideration for the landscape monitoring project, and the interpretation of ordnance survey maps. It should consider the possibilities of both full and sample surveys. The prime aim would be to produce a stock survey compatible in terms of definitions and areas with the land use change monitoring exercise. It may become apparent through the study that there are fruitful was of merging data from various sources which could be tested in field trials.
I am therefore commissioning such a study. Among other things it will, I hope, give us a better idea of the likely cost so that we can then decide whether what we get—with whatever data limitations are involved — would represent good value for money.
In conclusion, the case of a national land use survey is under urgent consideration by the Government. My hon. Friend's contribution this evening will be of great benefit to us, and I hope that we can maintain close contract so that we can use his advice and experience, and that of other sources. The contribution of improved land use information to policy-making is already recognised, but to technical problems are complex and the costs could therefore be prohibitive. However, we have taken some tentative but constructive first steps to explore ways of overcoming the major problems that have dogged past attempts to establish comprehensive and reliable statistics on urban land use and landscape coverage.
The debate has been constructive, and I am most grateful to my hon. Friend.
Question put and agreed to.
Adjourned accordingly at half-past Ten o'clock.

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  Internal Audit
  Internal Audit
  Construction Industry (Capital Moratorium)
  Construction Industry (Capital Moratorium)
  Low Hauxley (Coast Protection)
  Low Hauxley (Coast Protection)
  Construction (Local Authority Expenditure)
  Construction (Local Authority Expenditure)
  Bed and Breakfast Accommodation
  Bed and Breakfast Accommodation
  Housing (London)
  Housing (London)
  Housing (Basildon)
  Housing (Basildon)
  Pollution
  Pollution
  Departmental Staff (Supplementary Benefit)
  Departmental Staff (Supplementary Benefit)
HOUSE OF COMMONS
  Staffing Inspector
  Staffing Inspector

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

UK Oil and Gas Developments: Orders
The Earl of Lauderdale: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what percentage of orders for oil and gas development work and supplies for the United Kingdom continental shelf in 1983 was placed with companies based in the United Kingdom.
The Parliamentary Under-Secretary of State, Department of Energy (The Earl of Avon): My Lords, in 1983 the total value of orders reported by operators for oil and gas development work on the United Kingdom continental shelf was £2.61 billion. United Kingdom-based companies won 72 per cent. (worth £1.88 billion) of these orders.
The Earl of Lauderdale: My Lords, may I thank my noble friend for that, on the whole, encouraging Answer? Would he not agree first of all that the Government are to be congratulated on the success of their arm-twisting of oil companies to the extent that sometimes the companies are forced to accept British tenders for jackets and platforms at prices 10 per cent. above that of unsubsidised continental competitors? Will he not also agree that many of the British companies are not showing sufficient initiative and zest in going after the orders that are available?
The Earl of Avon: My Lords, I am happy to agree with my noble friend that there is satisfaction, of which the Government take a percentage, on the
2
excellent results coming from the North Sea. But, as he rightly says in the second part of his supplementary question, there should be no holding back, and we should continue to persevere in this field.
Lord Stoddart of Swindon: My Lords, I do not wish to belittle in any way the achievements of the British industry; but will the noble Earl confirm that over the next decade or so 50 per cent. of all oil discoveries are likely to be offshore, and therefore the British industry should be in a very good position to take advantage of all the export trade that will flow from that—£20 billion worth of it? Is he aware that in our view the United Kingdom industry will not be able to take advantage of it unless the Government give a real lead and not mere exhortation? Can I have the noble Earl's assurance that the Government will give that lead?
The Earl of Avon: I very much hope, my Lords, that the noble Lord will agree that the Government, particularly the offshore office—which, I think, does exceptionally well in this field—are already doing so. The United Kingdom share of the market represents the value of the contracts and the main sub-contracts stemming from them, and these are placed with companies which through employment, manufacturing and subcontracting make a substantial contribution to our economy. I should also like to agree with the noble Lord that there is a lot of further work which we call do abroad on this, and that this should become an export market as well.
The Earl of Lauderdale: My Lords, will my noble friend not agree that it is very sad that the United Kingdom proportion of the expenditure on development drilling is this year down 11 per cent. as against last year, and that the participation, exploration and appraisal drilling is down to something like 34 per cent? Is it not the case that the terrible scandal of the Scott Lithgow affair has cast a blight over the whole industry and foreigners' appraisal of what our industry can do?
The Earl of Avon: My Lords, I very much hope that what my noble friend says at the end of his supplementary question is not the case. I believe that our North Sea oil industry has a great reputation. We

3
are at the moment building a great number of platforms and suchlike to help our oil industry progress. I hope very much, too, that the industry will continue to do so. I have no confirmation of my noble friend's figures.
Lord Ezra: My Lords, in the light of the very encouraging report that the noble Earl gave us, would be agree, in view of the fact that the peak of our activities in the North Sea is likely to be reached very soon, that it should be the objective of the Government to see that this becomes one of the growth industries of Britain worldwide, that we do not limit ourselves purely to our own shores but that we go out for business on the basis of a very determined plan?
The Earl of Avon: My Lords, I appreciate what the noble Lord says which, in part, is what I replied to the noble Lord, Lord Stoddart. In fact, both my right honourable friend the Secretary of State and the Minister of State in the Department of Energy have been abroad to China and India to promote our export trade in this field.
The Earl of Lauderdale: My Lords, will my noble friend not agree that it is disappointing that even the service aspect of our interest in the North Sea, such as the support of personnel offshore, is now at a relatively low ebb—I think it is at about 50 per cent—and that surely is something which ought to be higher than it is at the present time?
The Earl of Avon: My Lords, I have no figures to substantiate what my noble friend has said. When I have been abroad I have been very impressed by the number of our own people working there in offshore industries.

Glue Sniffing
2.42 p.m.
Lord Gridley: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what action they intend to take following recent evidence suggesting that the rate of glue sniffing among young people is growing.
The Parliamentary Under-Secretary of State, Department of Health and Social Security (Lord Glenarthur): My Lords, it is difficult to obtain reliable evidence of the extent of solvent misuse. The Government's policy through education and persuastion, is to help parents and the relevant services use existing skills, resources and powers to co-operate more effectively to discourage the habit of solvent misuse. My honourable friend the Parliamentary Under-Secretary of State for Health announced on 15th December 1983 a package of measures designed to tackle the problem, including the funding of a post at the National Children's Bureau to collate and disseminate good practice, the production of training
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materials for professionals and the preparation of a leaflet for parents, teachers and others; and the commissioning of research, and further consultations on guidelines on voluntary restraint on retail sales. My right honourable and learned friend the Home Secretary has issued guidance to the police and has announced support in principle—subject to consultations—for the creation of an offence in England and Wales of knowingly selling substances to under-16s when they are likely to be inhaled to achieve intoxication.
Lord Gridley: My Lords, I thank my noble friend the Minister for that very full Answer, which is appreciated and is reassuring. Has my noble friend any evidence of addiction with regard to glue sniffing, and, if so, is any action contemplated by the Government to deal with this problem?
Lord Glenarthur: My Lords, as I said in my original Answer, the extent of the problem in terms of addiction is difficult to measure. It is not actually addictive in the same way as drugs or cigarette smoking are; it is more of a dependency. We have no firm information on numbers, but all the indications are that, of all those who sniff, 95 per cent. give it up and only 5 per cent. require special help.
Lord McCluskey: My Lords, the Government will undoubtedly be aware of the recent case in Scotland in which, without legislation, the High Court of Justiciary held that it was a crime at common law to sell glue sniffing kits to children. One notes from the Minister's reply the intention to introduce legislation covering England and Wales, but do the Government not think that it is somewhat unsatisfactory that in Scotland there is such a crime, the penalties for which might indeed be two, three or five years' imprisonment, whereas in England, no doubt, the legislation would introduce much smaller penalties? Do the Government not think it desirable that any such legislation should apply uniformly throughout the United Kingdom, so that the courts on both sides of the border are given guidance as to penalties which is to the same effect?
Lord Glenarthur: My Lords, the noble and learned Lord will be more familiar than I am with the differences between Scottish law and English law, but the fact is that the common law in Scotland does allow the imposition of a penalty in the way that he described. But so far as legislation is concerned, the Solvent Abuse (Scotland) Act 1983 states that the misuse of volatile substances is grounds for a referral for compulsory care, whereas in England and Wales the existing legislative framework under the Children and Young Persons Act 1969 allows for a child or young person below the age of 17 to be detained in a place of safety if his health is being avoidably impaired or neglected, or if he is being mistreated.
Lord McCluskey: My Lords, on that point may I just say that in asking my question I am not concerned about the children—though, of course. I am very concerned about the children—but about the penalties on the suppliers, which should be uniform on both sides of the border?
Lord Glenarthur: My Lords, I am sure that in his consultation my right honourable friend will take note of that point.
Baroness Macleod of Borve: My Lords, does my noble friend the Minister agree that, so far as smoking and glue sniffing are concerned, young people are more likely to indulge in both of these to the extent that it might become a habit if the Government tell them that they should not?
Lord Glenarthur: My Lords, my noble friend may have a point. That is why I think it is important that these things are tackled gently, and not in too harsh a fashion in the way suggested by those who say that immediate legislation might solve the problem.
Baroness Phillips: My Lords, to offset the case mentioned by my noble friend, is the Minister aware that an informal campaign initiated by the National Chambers of Trade has issued notices to very many shops? This is an entirely voluntary action on behalf of shopkeepers which I think should be applauded.
Lord Glenarthur: My Lords, I was not aware of that but I think it sounds an excellent idea and I certainly commend it.
Lord Auckland: My Lords, is my noble friend the Minister aware that it is not only glue which is highly dangerous and may be lethal? Has my noble friend's attention been drawn to a recent survey which includes petrol and other solvents? Will he really take notice of the very disturbing figures which are constantly published?
Lord Glenarthur: Yes, my Lords, there are a great many substances of which we are aware which have the same effect, and we shall certainly note what my noble friend has said.
Lord Mishcon: My Lords, does the noble Lord the Minister agree that the principle enunciated by his noble friend Lady Macleod, who usually voices very welcome principles in this House, is a little dangerous? Does he agree that, if we are dealing with things which can harm young people, to keep silent upon them because young people might wish to be rather difficult and do just the opposite would lead us to no action at all? In the circumstances, does he think that to encourage some programmes on the media pointing out how dangerous this habit can be to young people might be a useful addition to the measures which he has announced to the House?
Lord Glenarthur: My Lords, I am sure that the media can help in this respect, but I think we have to await the results of the initiative which my honourable friend the Parliamentary Under-Secretary of State for Health announced last December.
The Lord Bishop of Norwich: My Lords, will the Minister tell us whether the Government are doing any research into a possible correlation between the glue sniffing problem among young people and the availability of cheap heroin among young people? Will he tell us whether it is becoming clear that the linkage
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of those two together relates to the ports of our country and the big cities close to the ports? Is there any research on this particular aspect of glue sniffing and cheap heroin and the areas near the ports where there is some evidence that this is going on? Are the Government looking at that?
Lord Glenarthur: My Lords, I do not know specifically whether any direct correlation between the two has been investigated. I am sure there is merit in looking at it, and shall draw my right honourable friend's attention to what has been said.
Lord John-MackieMy Lords, I think the noble Baroness, Lady Macleod, had a very good point, but, if she will excuse me for saying so, I think she put it badly. It is not saying "No" to it: it is the publicity it gets which makes children inquisitive.
Lord Glenarthur: My Lords, that may well be true.
Baroness Gardner of Parkes: My Lords, could the Minister inform me whether a record is kept of fatalities due to solvent abuse, including glue sniffing, and, if so, whether he has figures available?
Lord Glenarthur: My Lords, yes. The information is that deaths totalled 80 in 1983 as against 60 in 1982, but the increase should not necessarily be interpreted as an increase in the practice because there are all sorts of compounding variables. For example, it may be that more deaths are reported because of a greater awareness of the practice which has been brought about through media coverage.
Lord Leatherland: My Lords, may I ask the Minister whether the Government, in their propaganda on this subject, might not merely take the negative attitude of saying, "Don't sniff glue", but take the positive attitude of saying, "If you want to sniff something, sniff snuff, which is less harmful"?
Lord Glenarthur: My Lords, we debated snuff and smoking last week, and I am sure that noble Lords had an opportunity then to discuss this matter.

Dr. and Mrs. Sakharov
2.51 p.m.
Lord Molloy: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they will make representations to the Soviet Government, and encourage other governments to do likewise, concerning their treatment of Andrei Sakharov, the Nobel prize-winner, and his wife Yelena Bonner.
The Minister of State, Foreign and Commonwealth Office (Baroness Young): My Lords, we have repeatedly made clear to the Soviet authorities our concern at the treatment of Dr. Sakharov and his wife, Mrs Yelena Bonner. My right honourable and learned friend raised the question with Mr. Gromyko in

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January. On his recent visit to Moscow, my right honourable friend the Minister of State for Trade spoke to a senior Soviet Minister of British concern about the latest disturbing developments. We remain in close contact with other like-minded governments. Following an initiative of the United Kingdom, in the Ten, the Presidency made a démarche to Mr. Gromyko in May. We will continue to seek ways of helping Dr. and Mrs. Sakharov.
Lord Molloy: My Lords, is the noble Baroness aware that is a most welcome and encouraging response to the Question that I put down, which will give great encouragement not only to Dr. Sakharov and his wife but to all decent people thoughout the world? Is she further aware that Dr. Sakharov at this moment in time is being forcibly fed, and that his wife, who has a serious heart condition, is being refused medicament from the people other than Russians? This attitude of the Soviet Union is devoid of any sense of compassion and, what is more, is bereft of any civilised behaviour of ordinary people throughout the world. Would she not agree it is right that our Government should progress and make further representations so that this appalling situation and treatment of these two human beings—one being a Nobel prize-winner—should be brought to an end, and that they should be afforded normal, civilised attitudes.
Baroness Young: My Lords, as I indicated in my original Answer to the noble Lord, we have repeatedly made clear to the Soviet authorities our concern about the treatment of Dr. Sakharov. As I am sure the noble Lord will appreciate, it would not he appropriate for me to disclose any particular points of an agenda which my right honourable friend the Foreign and Commonwealth Secretary might raise when he visits Moscow in July; but clearly my right honourable friend will have these developments in mind.
Lord Jenkins of Putney: My Lords, is the noble Baroness aware that, as she has said, any abuse of human rights is to be condemned wherever it occurs? But is it not the case that it is even more offensive when it occurs in parts of the so-called free world? Would she not agree that the gross abuse of human rights in Turkey, a NATO country, is equally strongly to be condemned? Are the Government taking similar action in these cases?
Baroness Young: My Lords, I have made clear in your Lordships' House on several occasions that Her Majesty's Government condemn the violation of human rights wherever this may occur.
Lord Molloy: My Lords, is the noble Baroness aware that her last remark will be welcomed very much indeed, and that one cannot claim to be a standard-bearer of civilised behaviour if it only applies to one particular part of the world and not to others? Is she further aware that if her right honourable friend the Foreign and Commonwealth Secretary can make representations to the Soviet Union on behalf of these two people, of all those millions in the world, then perhaps they will make representation in other parts of
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the world whenever civilised human behaviour is threatened, abused and savaged?
Baroness Young: My Lords, I am not absolutely clear that I followed the precise question the noble Lord has asked; but we have, in the case of Dr. Sakharov and Mrs. Bonner, followed events very closely and we have repeatedly made our views known to the Soviet authorities.
Lord Molloy: My Lords, is the noble Baroness aware that it would be welcome if the Foreign Secretary were to make representations to the Soviet Union on behalf of these two human beings, and then later, if necessary, to any other part of the world which denies its people the standards which we enjoy in Great Britain?
Baroness Young: My Lords, in answer to the noble Lord's first supplementary question I think that I did make clear that although it would not be appropriate to disclose the detailed points of an agenda in advance of the visit to Moscow by my right honourable friend, I have no doubt that he will have in mind the developments that have been raised by the noble Lord.

Unemployment Figures
2.56 p.m.
Lord Dean of Beswick: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what are the latest unemployment figures, and what conclusions can be drawn from them.
The Minister of State, Privy Council Office, and Minister for the Arts (The Earl of Gowrie): My Lords, the seasonally adjusted level of unemployment increased by 18,000 to 3,029.000 in May, following a fall of 1,000 in April and a rise of 7,000 in March. These increases must be considered in the context of recent productivity improvements, demographic factors and the encouraging growth in employment in the last nine months of 1983.
Lord Dean of Beswick: My Lords, I am grateful to the noble Earl for that reply, but is it not a fact that one conclusion transcends any other in these figures—namely, that the plight of the long-term unemployed continues to increase both in depth and numbers? Is it not a fact that, apart from the young people employed in youth employment training schemes, anybody at present being made unemployed has a far greater chance of joining those long-term unemployed figures than was the case 12 months ago?
The Earl of Gowrie: My Lords, I am not sure whether the latter conclusion could be drawn, particularly as we do have an encouraging sign in the very significant increase in employment. About 200,000 more people are now likely to be in jobs this year than last year. The labour market is also growing. However, I agree strongly that the plight of the long-term

9
unemployed, now over one million, is very serious indeed, and of course the big structural and technical changes in industry are largely responsible for this.
Lord Kilmarnock: My Lords, when the noble Earl talks about the growth of employment, would be not agree that in fact there has been a growth in the labour force and that therefore the greater employment is not necessarily going to narrow the gap between those in employment and those who are unemployed?
The Earl of Gowrie: My Lords, I am very grateful the the noble Lord. That was my very point: it is certainly gratifying and encouraging that there has been a growth in the numbers of people working as well as in the growth of the labour force.
Lord Cledwyn of Penrhos: My Lords, would the noble Earl not agree that the quarterly report of the Manpower Services Commission, which was published over the last few days, reveals some extremely disturbing figures? In addition to the figure he has just quoted of over a million people out of work for over 12 months, is it not the case that the number of those who are employed in manufacturing jobs is reduced and that full-time employment is continuing to fall seriously? Is he aware that what the whole House wants to know is what specific steps the Government are proposing to take to help? Are they proposing now to invest in capital schemes so as to provide work in road building, bridge building, school building and hospital building, which many economists say would not necessarily affect the Government's policy with regard to inflation? Is it not high time that the Government took some concrete steps to help these people, especially the young school-leavers, who are out of work?
The Earl of Gowrie: My Lords, on help for young school-leavers, as the House will be aware from recent debates and from some of the answers that I have given lately, the Government are spending nearly £2.000 million in total this year. We are currently bringing direct help through special schemes to nearly three-quarters of a million young people and we are seeing some encouraging signs that this policy is bearing fruit. On the point about capital projects, as I know from my experience in Northern Ireland, there is no evidence whatsoever that intensive expenditure on capital projects brings about a sustained growth in employment.
Lord Diamond: My Lords, will the noble Earl be good enough to give us the Government's estimate of what the number to be added on to the figures he gave in his first answer is in respect of those available for work, in addition to those whom he has already described? If he does not have that estimate, can he tell us when these figures will be available?
The Earl of Gowrie: My Lords, I should have to take advice on both of those points and could then, either in correspondence or by a separate Question, answer the noble Lord. But I could add—which might be helpful—that there is also an increase in the seasonally adjusted level of vacancies. We have had the third
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successive monthly rise and the level in May was no less than 15 per cent. above the May 1983 position. So that is another encouraging factor.
Lord Bruce of Donington: My Lords, is the noble Earl aware that the figures he gave in regard to the increase in employment are statistically suspect; that they have been the subject of some adjustment that remains still to be detailed and explained? Is he aware that, of the total unemployed at this time, over 1,400,000 have been out of work for over a year, that, of that total, 310,000 have been out of work for over three years and that that total of 1,400,000 includes 330,000 people of under 25? Does the noble Earl agree that the time has now come really to take some positive and concrete action in order to break the whole figure of long-term unemployment which at the moment appears to be absolutely intractable?
The Earl of Gowrie: My Lords, what is in no sense suspect is the encouraging sign that, though the workforce has been growing in this country, so has the number of people going into real and sustained employment. The noble Lord must be aware that the United Kingdom has a large workforce relative to our continental competitors. We have 66.2 per cent. of our working age population in work, as against some 45 per cent. in Spain, 54 per cent. in Italy, 55 per cent. in Ireland, 60 per cent. in France and 61 per cent. in Germany. So, while we have a larger scale of problem on the one hand, you could put it that we have greater success on the other.
Lord Dean of Beswick: My Lords, does the noble Earl the Minister not recall telling me last week that political decisions do not make jobs and employment? Will he have regard to what has taken place since last Thursday in this country, bearing in mind that most responsible people accept the view that 50 per cent. of present unemployment in this country is a direct result of Government policies? Is it not time for the Government to review their policies in their own interests, in view of the election results that are now coming through?
The Earl of Gowrie: My Lords, I would point out to the House that the party of the Government remains by far the largest victor in the recent European elections. But, on the point connected with employment which the noble Lord raised, I urge him and all of your Lordships to be very responsible in this respect. Any politician who says that policies rather than customers can create sustained employment is misleading people.
Viscount St. Davids: My Lords, since the advance of technology now seems to show that full employment in the old sense is unlikely to be attained—certainly not in the immediate future—is any thought being given to a world in which we may be living in a post-full employment situation, and in which different moral considerations and different methods of financing this world might exist? Is any thought being given to this?
The Earl of Gowrie: My Lords, thought is, of course, given by my department on these issues. But as I said in answer to a previous supplementary question, the fact that we have 66.2 per cent. of our working age population in work is encouraging, and my firm belief is that, if we can go on increasing our competitiveness, and if we can maintain a stable financial climate, we can improve greatly on that figure.

Business
Lord Denham: My Lords, it may be for the convenience of your Lordships if I announce that the Committee stage of the Trade Union Bill will be adjourned for dinner at approximately 7 p.m. for approximately one hour. During this adjournment, the Report stage of the Video Recordings Bill will be continued. If the Report stage is not completed within the hour, it will be resumed at the end of today's business at approximately 10.30 p.m.
London Transport (Tower Hill) Bill [H.L.]
Read a third time, and passed, and sent to the Commons.
British Railways (No. 2) Bill
Read a second time, and committed to an Unopposed Bill Committee.

London Regional Transport Bill
3.7 p.m.
Read a third time.
Clause 2 [Provision of passenger transport services for Greater London]:
Lord Ennals Lord Ennals moved Amendment No. 1:
Page 2, line 45, at end insert ("and, where necessary, including the provisions of special transport facilities for people with particular disabilities.")
The noble Lord said: My Lords, this amendment concerns the problems of meeting the needs of disabled people under the new authority. The noble Earl, Lord Avon, tabled an amendment at Report stage which was warmly welcomed not only by myself but, I believe, by the whole House, in that it clearly placed a responsibility upon London Regional Transport, and he set out his explanation of the implication of his amendment. He said:
"It makes it absolutely clear that LRT's general duty extends to disabled people, and this point is important in relation to some of the other amendments which we are discussing today."
He then went on to say that the term "public passenger transport services" covers,
"those people who are slightly disabled or who have some difficulty in using the buses and the Underground…the term also applies to those who need wheelchairs and ramps in order to travel; in other words those who cannot use the usual public transport services at all. So LRT will have a general duty to have due regard to the needs of all those people, including those who depend on special services such as dial-a-ride." [Official Report, 7/6/84; cols. 797–798.]
The reason I am quoting from the noble Earl, and will do so again, is that when I moved an amendment in identical terms at Report stage he gave these assurances and a number of others and suggested that we should see whether, in the light of what he had said and what the Bill contained, we were satisfied not with the Government's position on those who could use buses and Tubes, but on those who could not use buses and Tubes. He went on to say, (still in col. 798):
"The Government are quite satisfied… that Amendment No. 6"—
that is, the Government's amendment—
"backed up by provisions of Clause 34, which requires LRT to include in its annual report to the Secretary of State a specific statement of the action it has taken in relation to public transport provision for disabled people, will ensure not only that needs of disabled people are not overlooked but, much more positively, that LRT will have a clear remit to work towards developing and improving those services."
That was a very important statement. It was the kind of assurance that one wanted to hear—particularly those of us who are concerned with those who have special disabilities, some of which are being met by dial-a-ride and other organisations like it, to which very warm tribute was paid, quite rightly, from all parts of the House at the Report stage. It is fair to say that there are tens of thousands of disabled people who are dependent upon such schemes and who, without them, would be housebound—unable to visit their relatives, unable to go to any forms of entertainment, tied to their houses. We have a responsibility to ensure that schemes like this. which are now steadily expanding and which will, it is hoped. eventually expand to all parts of London, will be absolutely safe.
The noble Earl asked that we should, as I said, read his assurances in order to see just how things were going to work out. But later in his speech, at col. 802, the noble Earl said something totally different. When I read it again it concerned me greatly. I consulted widely to see whether others who are involved were or were not satisfied. It is for this reason, after consultation, that I have tabled this amendment. At col. 802 the noble Lord said:
"…we did not believe it appropriate to impose a duty. on LRT either to prepare proposals or, in point of fact, to give effect to them".
At that point we were referring to those severely disabled people who are unable to use normal bus and Underground services. The noble Earl went on to say:
"… it is the local authorities who should have the responsibility for identifying the need for such services and for organising and financing them as part of a more general provision which they make to help severely disabled people. It is not a duty which the Government believe we should place on a body charged with providing public transport services for the capital".
I believe that any fair noble Lords—and we are all fair—would accept that that statement is totally different from the assurance that had been given by the noble Earl. I fully accept that he went on to say:
"I fully accept that LRT may be able to assist with technical and other expertise".
I hope that they will do so hut, frankly, that is not enough. It does not provide any guarantee that the funds will be made available. The assumption that paying for this is a responsibility which will fall upon the local authorities does not stand up to examination. I have the exact figures of the commitments for this

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year from the Federation of London Dial-a-Rides. The GLC has approved funding of £1,603,469. The sum available from local authorities will be £120,435. That is, 6.8 per cent. of the total will come from local London authorities and the remainder from the GLC.
When one looks at which authorities have paid, there are only three. At least two of them are supposed to be on the hit list for rate capping. It is very interesting that the largest contributions come from Islington and from Lambeth. They make up about 70 per cent. or 80 per cent. of the whole modest total from local authorities. If that be the situation, the noble Earl has not given an assurance. If he is confident that London Regional Transport should fulfil this responsibility, as he said in the passages which I quoted, it is very difficult to understand why that commitment should not be written into the legislation. Simply to leave it to chance when we are talking about the needs of severely disabled people is not good enough.
I received a letter only this morning from the Royal Association for Disability and Rehabilitation, in which they say:
"Great support was given to the amendment during the debate".
The association were referring to the amendment which I moved.
"It is doing no more than writing into the Bill the continuing verbal commitments made by Government Ministers throughout the passage of the Bill. Unless this is done, disabled people will not have protection of the law in maintaining special transport services in future. We do not underestimate the present Government commitment to continuing such services but without the amendment, disabled people will continue to be entirely dependent on the goodwill of successive governments. Able-bodied people will not be in this invidious position and it is quite unreasonable that disabled people should be."
I say, in conclusion, in moving the amendment that, however welcome the noble Earl's assurances are, unless something is written into the Bill which ensures that London Regional Transport have a responsibility, many of us will feel that this House and this Parliament have let down those who need transport most; namely, disabled people and especially those who are confined to their wheelchairs. I hope the amendment will be accepted by the Government Front Bench but, if not, I hope the House will accept the amendment, because that is our responsibility to disabled people in this country. I beg to move.
Baroness Darcy (De Knayth): My Lords, I, too, should like to support the amendment. I have put my name to it because I feel it is essential that something about special transport services should be clearly stated in the Bill, despite the noble Earl's assurances. My noble friend Lady Masham of Ilion, who cannot be here today, says that she feels the same. I should like to make two points. The first is from the noble Lord, Lord Bancroft, who has had to leave the Chamber. He very much wants to have assurances about the future of the taxis of the new, accessible design when, in two years' time, they start to come into operation. He seeks only the simple Government assurance that the London Regional Transport authority will use its powers to subsidise disabled people's journeys by taxi. He makes the point that this would give London the best, most flexible and, in public expenditure terms, the cheapest system of public transport for disabled
14
people anywhere in the world. The noble Lord says that there is already a lot of interest in other countries in the new British design of taxi which makes this possible.
I was also going to quote a good deal from col. 802 which contains the noble Earl's words. However, I should like to refer to the last quotation from the noble Earl by the noble Lord, Lord Ennals. The noble Earl said:
"It is not a duty which the Government believe we should place on a body charged with providing public transport services for the capital".
I find that statement amazing, because LRT is precisely the right body to deal with transport services, whether special or otherwise, for the disabled inhabitants of London. We must move away from what is a very old-fashioned attitude; namely, that the local authority knows best. This is a very "nannying" point of view.
We should listen to what the Federation of London Dial-a-Rides say on this point. They know best; they are the experts. They say:
"London-wide services are the only way of providing us with the special services that many of us need and with the integration that all of us need, and on the basis of a lower overall cost than fragmented borough services. We need public transport services at public transport fares, not an approach which regards us as social service cases".
If LRT does not accept responsibility for special transport services, they may well founder. As the noble Lord, Lord Ennals, has said, disabled people will he left stranded in their homes without any means of transport. The amendment is mild and is very reasonable. It is only to "have due regard to", and I feel that it is necessary. I hope that the noble Earl may even agree.
Lord Somers: My Lords, I should like to support the amendment. We have here, surely, one of the problems that invariably arise when one breaks up an organisation that has been responsible for certain activities and then expects that responsibility to be accepted without question by a whole group of smaller organisations which, in fact, may or may not accept it. There is nothing to compel them to do so; and, therefore, this is what happens. One cannot expect matters to run as smoothly as they have in the past—though I am not holding for a moment that the GLC is without its sins, as none of us is. But in breaking up such an organisation one has to realise that, somehow, the various responsibilities which it has had have to be firmly fixed elsewhere, so that those who are without any kind of defence will not suffer.
Lord Tordoff: My Lords, if I may I would join in from these Benches in the absence of my noble friend Lord Banks, who was active during the earlier stages of the Bill on this issue. The amendment has our strong support. In a sense it is the price that the Government have to pay for the way in which they have gone about organising London Regional Transport. I shall say more about that generally at a later stage this afternoon. It cannot be left to chance, and I detect that it is the mood of your Lordships' House that it cannot be left to chance in the hands of this great patchwork of local authorities in London. With the best will in the world they cannot put together in present

15
circumstances the same sort of cohesive practice which London Regional Transport ought to be putting together in the absence of the umbrella of the GLC.
The Government tell us that they are to remove the GLC. We shall see about that later. In the meantime, they have gone down this road of London Regional Transport, which, as I have said many times, is the road of fragmentation. I believe that this issue, among all the other issues, is one where there should not be fragmentation and where the disabled should be properly catered for in the Bill and not merely by assurances from the Government Front Bench, however attractive they may be.
Viscount Ingleby: My Lords, briefly. I should also like to support this amendment. The dial-a-ride services are vital and ought to be provided on a London-wide basis, and not by each individual local authority.
The Earl of Avon: My Lords, I said at Report stage that if any anxiety still remained after the assurance I gave I would be happy to look at the matter again. I have now had discussions with my honourable friend the Minister of State at the Department of Transport, as, indeed, has my noble friend Lady Lane-Fox. We have thought seriously since then about how best we could ensure that we were not leaving disabled people with doubts and worries. After due consideration we believe that our proposal is the right solution, and I shall now try to persuade the House to agree.
I should like to thank the noble Lord, Lord Ennals, for the rational way in which he put his views, and I shall try to do the same. I believe that I have made it clear that in substance there is nothing between us. We all want dial-a-ride and other things to continue progressing, as things are progressing now, and we hope they will progress in the future. I should like to make clear that the words "public passenger transport services" as used in the Bill cover special transport services for the disabled. That is already on record, but I am happy to put it on record again.
I fully appreciate the concern expressed about the future of funding the services like dial-a-ride. We do not want to leave anything to chance, any more than the rest of the House. We should not lose sight of the fact that the money the GLC is using to fund these services currently has been obtained from the boroughs through the GLC precept. If the GLC, as the noble Lord, Lord Tordoff, suggested, ceases to exist, that money will be available to the individual boroughs to allocate on the basis of their own assessment of need or priorities. It is clear that if such services are to have a long-term future they must have the same regard to efficiency and cost as every other part of the public transport system. I believe it is right that in future boroughs will be able to look across the full range of their priorities and to allocate funding as they think best within those priorities.
The Government have already made their contribution to help dial-a-ride achieve a sounder basis for the future through the announcement of the setting-up of a London branch of the National Advisory Unit for Community Transport. As I told the House at an earlier stage in our discussions, the
16
Government will be setting-up and funding this branch as an off-shoot of the national advisory unit, whose excellent work in the community transport field will already be well known to many in the House. The London branch should be coming into operation within a matter of weeks now, and will be concerned specifically to work with local schemes to ensure that they are developing along sensible and cost-effective lines. They will be giving guidance and advice on a wide range of financial and operational issues to all those in London who are concerned with the provision of transport for the disabled.
I have already told the House at an earlier stage of the clear undertaking given by my right honourable friend the Minister of State, Department of Transport, on the provisions to be made for disabled people. She said very clearly that instructions would be given to LRT by the Secretary of State to work towards improving their own vehicles and infrastructure with the needs of the disabled in mind. It has also been made absolutely clear that the London Regional Passengers' Committee, the consumer body for LRT, will include at least one person specifically to represent the needs of the disabled, and that that person would also be invited to join the Minister of State's panel of advisers on disability at the Department of Transport.
I appreciate that none of this alters the strongly-held view of the Government that those best placed to identify the particular needs of the disabled are those closest to them; that is, the local authorities. I hope that the House will recognise this point. We must never forget that we are not concerned here only with the articulate disabled, who might well be able to make their demands known to a London-wide organisation. We are most concerned with the majority of disabled people, who are not so articulate, such as the frail and the elderly. Unless they are looked after by someone with the closest possible local knowledge and understanding, they will, quite simply, be overlooked.
I believe that it would be counter-productive to refer to the provision of special services in this Bill. There is a real risk that the intentions of the Bill will be misinterpreted. People will inevitably infer that LRT would then be responsible for identifying, and funding, these special needs. What we want LRT to do is to co-operate at a practical level with those who are much better placed to identify the real needs. As has been said many times during the passage of this Bill, that is what we propose for LRT and that is what we intend to see happen. What we want LRT to do is to co-operate at a practical level with those who are much better placed to identify the real needs. As has been said many times during the passage of this Bill, that is what we propose for LRT and that is what we recommend to the House.
We have devoted much time today, and in previous debates, to discussing the merits of services like dial-a-ride and the subsidised taxi scheme. I endorse their value. These services have undoubtedly opened up opportunities to disabled and elderly people which they have never had before. Steps taken over recent years are to be applauded. It is equally important to ensure that such schemes are not simply a temporary phenomenon. We need to ensure that they have a sound basis in economic reality. I hope that noble

17
Lords will feel that the way we provide is the right way forward, and, with the assurances I have given, the best of the options which are open to us. Our reluctance over this amendment stems not from any lack of concern or understanding but, on the contrary, from the the belief that we are doing the best we can in this way to ensure that disabled people's needs are not overlooked.
Lord McCluskey: My Lords, I rise to make one brief point, and that is to support and underline the point made by the noble Baroness, Lady Darcy. All this amendment seeks to do is to include in the duty of the authority a duty to "have due regard to" the needs for these facilities. That is all it is. It merely says that, in law one should not take a responsible decision without having regard to these needs. If the Government cannot accept that, one will be left in the greatest doubt about the sincerity of the words which the noble Earl, himself certainly sincere, has just uttered.
Lord Ennals: My Lords, I am very disappointed in the reply given by the noble Earl. I do not for one moment doubt his sincerity. He has been kind enough to consult his colleagues and he has told us the conclusion, which is that our proposal is the right way. He has consulted his colleagues. May I ask him what consultation there has been with those organisations which exist for the sole purpose of representing disabled people, and which know the interests of disabled people on a day-by-day basis? What consultation has there been with bodies such as RADAR, and the joint committee on mobility for the disabled? I would guarantee that if the noble Earl had had consultation with any of them—the Spastics Society, or the rest—they would also have said that they need not just a ministerial assurance, or two ministerial assurances, as he has said; they need it written into the Bill. It is not good enough simply to say, "We will leave it to the London boroughs".
At the Report stage the noble Earl at column 803 of Hansard said:
"We believe that services such as Dial-a-Ride, which, as the House well knows, we welcome, fall properly within the responsibility of local authorities in a general context; and we believe that that is where they should remain".
In the light of the record so far of the performance of local authorities in financing schemes such as Dial-a-Ride, where they have paid only 5 per cent. or 6 per cent. over the years and have not pledged more for the future, bearing in mind that many of them will, rightly or wrongly, have their expenditure heavily restricted, how can the noble Earl be satisfied that the needs of disabled people who cannot use London Transport will be met? He referred to Clause 2(7) which is about public passenger transport services. Nowhere does it state that the special needs of disabled people need to be even considered, let alone met.
If this amendment is not put into the Bill, it could well be that there will be no way in which the noble Earl can give an assurance that London Regional Transport will carry the burden which until now has been carried by the GLC. We should then be faced with the possibility either that the scheme, which is growing well and is giving a marvellous service, would fall apart, or that we should have to go around with
18
collecting boxes, as all the other societies which are represented on RADAR and the other bodies have to do, collecting money voluntarily. If the Minister believes that London Regional Transport has a responsibility in this regard, there can be no logical reason why that commitment should not be written into the Bill. I believe that we must press the Minister, or rather, since he has not made any concession, that we must press this matter to a vote.
3.34 p.m.
On Question, Whether the said Amendment (No. 1) shall be agreed to?
Their Lordships' divided: Contents, 86; Not-Contents, 101.

DIVISION NO. 1

CONTENTS

Airedale, L.

John-Mackie, L.

Allen of Fallowfield, L.

Kilmarnock, L. [Teller.]

Ardwick, L.

Leatherland, L.

Attlee, E.

Listowel, E.

Aylestone, L.

Lloyd of Kilgerran, L.

Bernstein, L.

Longford, E.

Beswick, L.

McCarthy, L.

Birk, B.

McCluskey, L.

Boston of Faversham, L.

McGregor of Durris, L.

Brockway, L.

Maybray-King, L.

Bruce of Donington, L.

Mayhew, L.

Burton of Coventry, B.

Mishcon, L.

Carmichael of Kelvingrove, L.

Munster, E.

Chitnis, L.

Oram, L.

Cledwyn of Penrhos, L.

Phillips, B.

Collison, L.

Plant, L.

Darcy (de Knayth), B.

Ponsonby of Shulbrede, L.

David, B. [Teller.]

Porritt, L.

Davies of Leek, L.

Reilly, L.

Dean of Beswick, L.

Roberthall, L.

Denington, B.

Rochester, L.

Diamond, L.

Sainsbury, L.

Elwyn-Jones, L.

Seebohm, L.

Ennals, L.

Sefton of Garston, L.

Ewart-Biggs, B.

Somers, L.

Ezra, L.

Spens, L.

Fisher of Rednal, B.

Stallard, L.

Gaitskell, B.

Stamp, L.

Graham of Edmonton, L.

Stewart of Alvechurch, B.

Grey, E.

Stewart of Fulham, L.

Grimond, L.

Stoddart of Swindon, L.

Hale, L.

Stone, L.

Hampton, L.

Strabolgi, L.

Hanworth, V.

Taylor of Blackburn, L.

Henderson of Brompton, L.

Taylor of Mansfield, L.

Hooson, L.

Tordoff, L.

Howard of Henderskelfe, L.

Underhill, L.

Howie of Troon, L.

Wallace of Coslany, L.

Howard of Troon, L.

Wedderburn of Charlton, L.

Hunt, L.

Wells-Pestell, L.

Ingleby, V.

Wigoder, L.

Jacques, L.

Wilson of Reivaulx, L.

Jenkins of Putney, L

Wootton of Abinger, B.

NOT-CONTENTS

Airey of Abingdon, B.

Bruce-Gardyne, L.

Alexander of Tunis, E.

Cairns, L.

Allerton, L.

Caithness, E.

Ampthill, L.

Campbell of Alloway, L.

Auckland, L.

Campbell of Croy, L.

Avon, E.

Cockfield, L.

Bauer, L.

Cottesloe, L.

Belhaven and Stenton, L.

Craigton, L.

Bellwin, L.

Cullen of Ashbourne, L.

Beloff, L.

Daventry, V.

Belstead, L.

De Freyne, L.

19

Denham, L, [Teller.]

Merrivale, L.

Denning, L.

Molson, L.

Derwent, L.

Mottistone. L.

Donegall, M.

Moyne, L.

Duncan-Sandys, L.

Murton of Lindisfarne, L.

Ebbisham, L.

Norfolk, D.

Eccles, V.

Northchurch, B.

Effingham, E.

Norwich, Bp.

Elton, L.

Nugent of Guildford, L.

Faithfull, B.

Onslow, E.

Fanshawe of Richmond, L.

Orr-Ewing, L.

Fraser of Kilmorack, L.

Peyton of Yeovil, L.

Gardner of Parkes, B.

Plummer of St. Marylebone, L.

Gibson-Watt, L.

Glanusk, L.

Polwarth, L.

Glenarthur, L.

Rodney, L.

Gowrie, E.

Romney, E.

Gray of Contin, L.

St. Davids, V.

Gridley, L.

Saint Oswald, L.

Grimthorpe, L.

Saltoun, Ly.

Hailsham of Saint Marylebone, L.

Sandford, L.

Savile, L.

Halsbury, E.

Semphill, Ly.

Hayter, L.

Shaughnessy, L.

Henley, L.

Skelmersdale, L.

Home of the Hirsel, L.

Strathcona and Mount Royal, L.

Hornsby-Smith, B.

Hylton-Foster, B.

Sudeley, L.

Killearn, L.

Swansea, L.

Kilmany, L.

Swinton, E.

King of Wartnaby, L.

Terrington, L.

Kinnaird, L.

Teviot, L.

Lauderdale, E.

Thomas of Swynnerton, L.

Long, V. [Teller.]

Trefgarne, L.

Lovat, L.

Trenchard, V.

Lucas of Chilworth, L.

Trumpington, B.

Lyell, L.

Vaux of Harrowden, L.

McAlpine of Moffat, L.

Vickers, B.

McFadzean, L.

Waldegrave, E.

Macleod of Borve, B.

Whitelaw, V.

Margadale, L.

Maude of Stratford-upon-Avon, L.

Resolved in the negative, and amendment disagreed to accordingly.
3.41 p.m.
Clause 6 [Obligations to invite tenders]:
Lord Carmichael of Kelvingrove Lord Carmichael of Kelvingrove moved Amendment No. 2:
Page 7, line 9, at end insert—
(" ( ) In carrying out their duties under subsection (3) above London Regional Transport shall have due regard to the general conditions of service and wages exercised by persons submitting tenders.")
The noble Lord said: My Lords, the purpose of this amendment is to ask for a little more assurance from the Government that when work is subcontracted by London Regional Transport the conditions of employment shall be reasonable and fair to the employees and ultimately to LRT. In Committee I tabled an amendment in which I asked that work under a tender should be carried out in accordance with recognised wages and conditions—wording to which the noble Earl, Lord Avon, took exception because he felt that it was too firm, too strong, and too inhibiting on LRT. The noble Earl said that an attempt could be made to find slightly different words, and the words in the present amendment ask merely that LRT, when calling for tenders, have,
"due regard to the general conditions of service and wages".
20
of the people in the organisation which has been asked to tender.
The point was made previously that we do not want cowboy operators and that it is important to look at the general conditions of service and wages, rather than merely the wages because, as I pointed out, frequently cowboys are paid very high wages for doing a job but all the other conditions are missing such as the assurance of decent working conditions, or even insurance while working on a job. All these points are omitted. When a big job is to be put out to tender by organisations as responsible as LRT they make very sure of the background and the bona fides of the firm they are asking to tender. In fact, if the job is sufficiently big, there will be a special list of only two of three firms that will be acceptable. It is often difficult for sub-contractors to get on those lists because there are required contractors of which the firms have had experience and which the firms believe will be able to return an honest tender and, if selected, do a good job.
All this amendment asks is that for the medium to smaller jobs LRT makes itself aware of the status of the firm which it is asking to carry out the sub-contract work and that it shall have due regard to the general conditions of service and wages paid by the firm. It is a minimum requirement which does not tie down LRT in any way. We ask merely that LRT informs itself in a little detail of the type of firm it is dealing with and does more than just use the Yellow Pages—if ever LRT would do that.
It is asking very little. It would be wrong, on such a mild amendment for the Minister to say, "Of course LRT would do this", as he said on the previous amendment. We should like the words "due regard" to be inserted. I believe that the case is just as strong for this amendment and that the Minister should accept that London Regional Transport should have "due regard" to the type of firm it is dealing with as regards wages and service. I beg to move.
The Earl of Avon: My Lords, I am grateful to the noble Lord, Lord Carmichael, for again introducing us to this topic; I believe that it is the third time we have gone over it. I appreciate that the noble Lord has made an attempt to meet my earlier criticisms of the drafting, but I still do not think that he has made a case for the substance of the principle of the amendment.
In our earlier discussions I sought to emphasise that Clause 6 provides LRT with a discretion to determine what activities carried on by it might appropriately be put out to tender. Having identified such an activity, LRT is then required to invite other people to submit tenders to carry on those activities. The invitation to tender may specify the period during which the activity is to be carried on, and the basis on which it is to be carried on. LRT is then obliged to accept a tender where the result would be to have the activity carried on in a satisfactory manner and at less cost. Those duties are equally applied to LRT's subsidiaries.
The noble Lord's amendment seeks to add a further rider. LRT would be obliged to,
"have due regard to the general conditions of service and wages exercised by persons submitting tenders".

21
I hesitate to comment on the noble Lord's drafting, but I must say that I find his reference to "general conditions of service" somewhat imprecise; and I am not sure that either conditions of employment, which I think is his meaning, or wages can in themselves be "exercised".
Be that as it may, as the noble Lord said, the thinking behind the amendment is clear. It is aimed at securing fair competition on equal terms. I believe that I, in my turn, made the Government's position clear in our earlier debates. We are keen to encourage competition. We believe that it holds the key to obtaining a better service. We are not anxious to insert unnecessary obstacles.
I sympathise with some of the noble Lord's remarks, but as I have said before (in particular in response to the noble Lord, Lord Tordoff, at an earlier stage) we do not believe that Clause 6, as drafted, will in any way encourage cowboy operators. LRT must be satisfied that the activity in question will be carried out both in a satisfactory manner and at less cost. It will be in its own interests to ensure that it does not enter into contracts with disreputable or unscrupulous employers. It will be in its own interests to ensure that the person submitting the tender can be relied upon—
Lord Tordoff: My Lords, the noble Earl makes the point that LRT should not grant tenders to unscrupulous employers. If there is no obligation written into the Bill how will LRT know whether they are unscrupulous?
The Earl of Avon: My Lords, the noble Lord interrupted me in mid-flow of a marvellous sentence. But to go hack to where we were before, I should say that equally "general conditions of service" is so imprecise in itself. How would you identify that? What would that mean? As I was saying, it would be in LRT's own interests that the persons submitting the tender could be relied upon to provide continuity of supply and a satisfactory level of service throughout the period of the tender. We simply do not believe that LRT should be under a statutory duty to have regard to the conditions of employment, or the level of wages, of other employers. LRT must surely be allowed to exercise its own commercial judgment in these matters, subject to the constraints already written into Clause 6 to provide the impetus for contracting out. In fact, I do not think that it is very flattering to LRT's future mangement to suggest that it would do otherwise than what I have said.
I can only repeat that in our view the amendment would tend to frustrate, rather than to encourage, competition. LRT must be prepared to measure itself against the commercial market. It ought not to be shielded from outside competition if that would help to bring down its costs.
Finally, I reiterate that Clause 6 is not new. It simply follows the provisions which already apply to London Transport and the passenger transport executives by virtue of the Transport Act 1983. We have no evidence, and no evidence has been produced, that this has caused problems in practice. We therefore cannot see any need to depart from the framework laid down in that Act.
Lord Carmichael of Kelvingrove: My Lords, the noble Earl will not be surprised if I say that his reply is disappointing. We are not concerned with trying to stop competion; we are concerned with stopping unfair competition. After all I said in earlier discussions on the subject, I had hoped that he would realise that it is perfectly possible to have a cheaper, but satisfactory, job done and—he may not like the phrase "general conditions of service"—one which is, nevertheless, carried out by people who are bad employers. I would think that there are legal precedents for the use of the definition, "good employer". I need to check on that, but I am sure that the Minister is aware that there is a classification of what are considered legally to be good employers.
It may be asked why we have produced the proposal now; the provision was in the 1983 and earlier Acts. As a party, we have always tried to have competition, but based on decent conditions of service and wages. Undoubtedly—and this is a political point, particularly in the present year—there has been great expansion of subcontract work for local authorities and hospitals, and especially the hospital laundry service. A great deal of it has been unsatisfactory. Many of the contractors are now proving themselves not to be good employers. The picture is now becoming sharper partly because bad conditions and poor wages are showing up in areas where they never occurred before. Local authorities and other public bodies always dealt with reliable people. I am not by any means saying that all contractors who take on direct labour work now are bad employers, but there is great scope for that. There are instances where contracts have been taken away from people because of the totally unsatisfactory nature of their work and also because it was discovered that their employees had not been treated fairly.
I am very disappointed in the Minister. After what has been said today I hope that he will take the opportunity to refer this to his department, and perhaps some change may be made in the other place when the Bill goes back there for consideration of our amendments. As the Minister is obviously unwilling to move on this point, I beg leave to withdraw this amendment.
Amendment, by leave, withdrawn.
Clause 43 [Regulation of London bus services under control of London Regional Transport]:
Lord Lucas of Chilworth Lord Lucas of Chilworth moved Amendment No. 3:
Page 41, line 32, leave out ("the route") and insert ("any part of the route in question or (as the case may be) the").
The noble Lord said: My Lords, it might be convenient for the House if in moving Amendment No. 3 I also discussed Amendment No. 4.
Amendment No. 4: Page 41, line 39, leave out from beginning to ("London") in line 46 and insert—
("(b) London Regional Transport propose not to renew any agreement entered into by them by virtue of section 3(2) of this Act for the provision by any other person of any bus service which is being so operated or to agree to the discontinuance of any such bus service currently provided in pursuance of any such agreement;
Then, before any decision is taken to that effect,").
Both these amendments correct minor errors. The first brings the wording of subsections (4) and (5) into

23
line in their treatment of parts of routes in order to put beyond doubt that every local authority affected by any proposal will be consulted, even if only part of the route in question runs through its area. The second amendment revises subparagraph (b) of subsection (5) in order to reflect more accurately what will happen in practice if the question arises of discontinuing a bus service which is being provided by another operator under a Clause 3(2) agreement with LRT. The substance remains exactly the same. I beg to move.
On Question, amendment agreed to.
Lord Lucas of Chilworth Lord Lucas of Chilworth moved Amendment No. 4: [Printed above.]
On Question, amendment agreed to.
Clause 44 [Application of Public Passenger Vehicles Act 1981 in relation to services in Greater London]:
3.56 p.m.
Lord Lucas of Chilworth Lord Lucas of Chilworth moved Amendment No. 5:
Page 42, line 33, leave out ("they apply") and insert ("well as").
The noble Lord said: My Lords, I think that it will be for the convenience of the House if in moving Amendment No. 5 I also discuss the related amendments, Amendments Nos. 7 (which is a new clause to be inserted after Clause 44), 17 and 18.
Amendment No. 7: After Clause 44, insert the following new clause:
("Excursions and tours with stopping places in Greater London
.—(1) The following section shall be inserted in the Public Passenger Vehicles Act 1981 immediately after section 35 (grant of road service licences for certain excursions or tours)—
"Excursions and tours with stopping places in Greater London
35A.—(1) If, in the case of any application for a road service licence made to the traffic commissioners for the Metropolitan Traffic Area—

(a) the traffic commissioners are satisfied as mentioned in section 35(1) of this Act; and

(b) they are also satisfied that the proposed service involves the use of any place in Greater London as a stopping place;

the following provisions of this section shall apply in relation to the application and to any licence granted on it instead of section 35(1).
(2) In this section "stopping place" means, in relation to any service, a point at which passengers are taken up or set down in the course of that service.
(3) Section 33 of this act shall not apply in relation to any application for a road service licence to which this section applies or in relation to any licence granted on any such application, and sections 31 and 32 of this Act shall so apply subject to the modifications provided by the following provisions of this section.
(4) The interests of the public falling to be considered under any provision of section 31 or 32, as that provision applies by virtue of this section, shall be confined to the interests of the public in securing that only places which are suitable for use as such are used as stopping places for the service in question in Greater London.
The reference above in this subsection to the service in question is a reference to the proposed service or the service provided under any road service licence granted on an application to which this section applies (as the case may require).
(5) For the purposes of this section a place is to be regarded as not being suitable for use as a stopping place for any service if the traffic commissioners are satisfied that its use as such would be prejudicial to the safety or convenience of the public.
24
(6) Section 31 shall apply with the omission of—

(a) paragraphs (a and (b) of subsection (3); and

(b) subsection (4);

and subsection (3)(c) of that section shall apply only in relation to objections or representations made by the commissioner or commissioners of police concerned or by any of the local authorities affected.
(7) In subsection (6) above "commissioner of police" means—

(a) in relation to the metropolitan police district, the commissioner of police of the metropolis; and

(b) in relation to the City of London, the commissioner of police for the City of London; and for the purposes of that subsection the local authorities affected are the Greater London Council and any of the following councils, that is to say, the councils of the London boroughs and the Common Council of the City of London, in whose area any stopping place for the proposed service is situated.

(8) Section 32 shall apply with the omission of subsections (1) and (2), but the traffic commissioners in granting a licence on any application to which this section applies may attach to the licence such conditions of a description within section 32(1)(c) as they think fit, having regard to any objections or other representations that fall to be considered in relation to that application by virtue of section 31(3)(c) as it applies by virtue of this section, for securing that only places which are suitable for use as such are used as stopping places for the proposed service in Greater London.
(9) Any condition attached to a road service licence under subsection (8) above shall be treated for the purposes of the references in section 30(7) and 32(5) of this Act to a condition attached under section 32 as having been attached to the licence under that section.
(10) Subsections (2) and (3) of section 35 of this Act shall apply in relation to a road service licence granted in pursuance of section 31, as section 31 applies by virtue of this section, as those subsections apply in relation to a road service licence granted in pursuance of section 35."
(2) In section 35(1) of that act, at the beginning there shall be inserted the words "Subject to section 35A of this Act".
(3) In section 54(4) of that Act (procedure of the traffic commissioners in certain cases)—

(a) in paragraph (a), after the word "Act" there shall be inserted the words "or (as the case may be) as mentioned in section 35(1) of this Act and also as mentioned in section 35A(1)(b) of this Act"; and

(b) in paragraph (b), for the words "so satisfied" there shall be substituted the words "satisfied as mentioned in section 34(1) or 35(1), other than an application in the case of which they have determined that they are also satisfied as mentioned in section 35A(1)(b)".

(4) Nothing in this section shall apply in relation to an application for a road service licence made before this section comes into force.")
Amendment No. 17: Clause 71, page 71, line 23, leave out ("subsections (3) to (5) below") and insert ("the following provisions of this section").
Amendment No. 18: Clause 71, page 71, line 37, at end insert—
(" ( ) Section (Excursions and tours with stopping places in Greater London) of this Act shall come into force at the end of the period of two months beginning with the day on which this Act is passed.").
I shall concentrate on the new clause, but I will deal with the other amendments towards the end of my remarks. It would be difficult to improve on the advocacy of my noble friend Lord Teviot in introducing at Committee stage the amendment on which our own new clause is based; indeed, it would be difficult to improve on his description of the proposals themselves. But I should like to comment on the problem with which the new clause seeks to deal and to describe the new clause itself. Copies of the department's note on the clause have of course been made available in the usual way, which I hope has been helpful to noble Lords.
The purpose of the clause is to give the metropolitan traffic commissioners power to control the use by vehicles operating excursion and tour services of stopping places in Greater London. These services are one of the three types of bus service defined for licensing purposes in the Public Passenger Vehicles Act 1981, and they are dealt with by Section 35 of the 1981 Act. At present, the traffic commissioners have very limited powers under that section to refuse a road service licence for an excursion or tour.
Over the last two years, the growth in the number of sight-seeing tours which pick up and set down passengers in London has caused traffic management problems at a few central London locations, in particular Piccadilly Circus, Trafalgar Square and Victoria. The reason, as my noble friend explained, is that there is already heavy traffic at these places and very limited scope to provide bus standing facilities. As I made clear at Committee stage, the Government agree that these traffic management problems are sufficiently serious and that the licensing system should he able to take them into account in considering applications for road service licences to operate excursions and tours.
We have, therefore, provided in the new clause that, where the service which the applicant proposes to provide would involve picking up or setting down passengers in Greater London, the metropolitan traffic commissioners must judge whether the application is against the interests of the public. This test is not imposed on applications under the existing Section 35. In order to judge whether the application under the new clause is against the interests of the public, the traffic commissioners must consider only whether the proposed stopping places for the service are suitable; and a stopping place is not to be regarded as suitable if they are satisfied that its use for that purpose would be prejudicial to the safety or convenience of the public.
The new clause gives local authorities and the police for the areas to be covered by any new service the right to make objections or representations on grounds of prejudice to the safety or convenience of the public. It gives the traffic commissioners power, in granting a licence to which the new clause applies, to attach such conditions as they think fit, having regard to the objections or representations, in order to ensure that passengers are picked up or set down only at specified points, or are not picked up or set down between specified points. It also gives the traffic commissioners power to alter, remove or attach additional conditions.
I should make it clear that the new clause is not intended to undermine our commitment to competition under the 1981 Act. The traffic commissioners will not have power to consider whether there is a need for a service, nor will existing operators he able to object to applications for new services. We are merely responding to representations from the police and from highway authorities on grounds of safety and of disruption to traffic, including buses.
Finally, perhaps I may say a few words about the amendments to Clauses 44 and 71, which have been grouped here for discussion with the new clause. The amendment to Clause 44 simply modifies the
26
declaratory statement in sub-section (1) of that clause in order to take account of the fact that the new clause introduces another difference between Greater London and the rest of the country.
The amendments to Clause 71 provide for the new clause to come into effect two months after the Bill receives Royal Assent. That is in order to give all concerned a suitable opportunity to prepare themselves for the new system.
I am sorry if I have taken rather a long time to explain this series of amendments, but I hope it will be welcomed, not only in order to meet a promise given at Report stage to my noble friend Lord Teviot, but as a practical measure to deal with the traffic problems caused at a very few places in central London by excursion and tour services. I beg to move.
Lord Teviot: My Lords, I am most grateful to my noble friend for his kind remarks about myself and for his detailed explanation of the new amendments, from which the whole House has benefited. I am sure that they are absolutely justified. I have nothing to add. I shall read the proposals very carefully. I am quite sure that the whole industry—not only London Transport, but also the existing competitors—will benefit.
Baroness Gardner of Parkes: My Lords, may I just ask the Minister to clarify one point on this matter. I know that when London Transport was asked to allow stops to be used by the privately run yellow culture bus, which we see going around town at the moment, there was great resistance for a long time, but in the end they agreed and they are allowing their stops to be so used. The Minister made the point that what is proposed is not intended to oppose any competition, but will he assure me that it will not be so prejudiced in favour of London Transport as to be at the expense of other operators? I am strongly in favour of London Transport, but not if there is any risk to other operators.
Lord Lucas of Chilworth: My Lords, I am quite happy to give my noble friend the reassurance she seeks.
Baroness Gardner of Parkes: My Lords, I thank the Minister.
On Question, amendment agreed to.
Lord Underhill Lord Underhill moved Amendment No. 6:
Page 42, line 43, at end insert—
("( ) In subsection (2) of section 31 (grant of road service licences) the following sub-paragraph shall be added before paragraph (a)
(a) shall, in respect of any application for a licence to operate a London bus service as defined by section 43(6) of the London Regional Transport Act 1984, send copies of that application and supporting information to the London Regional Passengers Committee;"
( ) In subsection (3) of section 31 (grant of road service licences) the following sub-paragraph shall be added after paragraph (c): "and
(d) in respect of any application for a licence to operate a London bus service, any representations made by the London Regional Passengers Committee.".")
The noble Lord said: My Lords, you will recall that a similar amendment was introduced at Report stage. That was the first occasion when this particular

27
principle had been considered in this House. I would remind noble Lords of what I said on that occasion—that the principle of the amendment had the full support of the National Consumer Council. The consumer council take the view that the passengers committee should be in a position to represent users of all public transport and that they cannot carry out this responsibility effectively if bus services provided by independent operators are not fully included in the scope of the passengers committee's responsibilities.
Whereas those who are operating under agreement with LRT will come within the scope of the passengers committee, other services licensed by the traffic commissioners are to be excluded by the Bill as at present worded. The amendment seeks to amend the Public Passenger Vehicles Act 1981 to provide that when an application is made to the traffic commissioners for a licence to operate a bus service, details of that application shall be sent to the passengers committee to be set up under the Bill and that the passengers committee shall have a statutory right to make representations.
When this principle was considered on Report, the noble Lord, Lord Lucas, expressed the view that the Government saw no grounds for giving the passengers committee a particular role in relation to independent operators. He argued that the committee's role is to represent the views of services provided by a nationalised industry. The noble Lord added that it would be quite wrong to put the passengers committee in a privileged position is so far as traffic commissioners should be required to have particular regard to representations that may be made involving the passengers committee.
On that occasion I said that I would seek further advice and would no doubt come back at Third Reading, and, accordingly, I withdrew the amendment. Since then I have again consulted the National Consumer Council. Their view is still that they consider. it essential that the passengers committee should be able to act for all transport users. Services provided by the operators under road service licences could certainly affect the pattern of services provided by London Regional Transport. Should that lead to LRT withdrawing from certain routes, it would mean that passengers on some routes would not be represented only because the service was being run by a different operator.
The passengers committee should not be hindered in its representations on behalf of users of all bus services. Whether the services be public or independent surely is irrelevnat. The commissioners have powers to grant road service licences in Greater London. From various debates on this Bill, it is clear that the Government wish to encourage the maximum position—as they call competition—in regard to independent operators. Recent reports indicating the attitude of the Secretary of State in wishing to move towards scrapping local bus controls suggest that we could be faced with a greater number of independent operators in Greater London. If the Bill says that that should be the position, then surely the passengers
28
committee must have a statutory right to consider matters relating to independent operators as well as to LRT itself.
I hope that the Minister will see that the Bill will not restrict the passengers committee in carrying out their duties. The amendment I have moved will ensure that that will not he the case. Although we discussed this at Report, I hope the Minister will now see fit to accept this amendment because, without it, the work of the passengers committee will be severely restricted.
Lord Tordoff: My Lords, I am not going to use the forbidden word, but I shall talk about co-ordination. It seems to me that this is one of the last backstops of co-ordination in the patchwork of transport which we shall have when independent operators become more usual in London. I believe that if we have regard to the needs of the passengers in Greater London, then the passengers committee should he put into a position where they have a statutory right to look at the whole of this patchwork and not just that part of it which is controlled by London Transport.
It may be that I have the picture distorted in some way, but it seems to me that the noble Lord, Lord Underhill, has a very important point here and that the passengers committee could be the last remaining mortar between the bricks, as it were, in this edifice which is going to grow over the next few years. So certainly on the basis of what I have heard so far this amendment has our very full support.
Lord Lucas of Chilworth: My Lords, as the noble Lord, Lord Underhill, said, we debated an identical amendment at Report stage. I thought that I had then explained the Government's position quite clearly. We have now had a number of debates in which wet have explained why we see no grounds for giving the passengers committee a particular role in relation to independent operators.
My noble friend Lord Avon has also written to the noble Lord on this matter. The noble Lord, Lord Underhill, says it is an important matter. I quite agree. But we take a fundamentally different viewpoint on the merits of the argument. As I have said before, the passenger committee's role is to represent the interests of the users of services provided by LRT, or provided under their control. It is not intended as a consumer watchdog to comment on passenger transport provision at large in the London area. If we accepted the spirit of this amendment, we would run the risk of diverting the passengers committee from their main task. I make no apologies for repeating this. We would then be encouraging them to consider, and comment on, matters which are essentially for the judgment of the traffic commissioners. We would be giving them a role in discussion of matters such as the relative sizes of the publicly and privately owned bus transport industries, and this surely is a matter for political judgment.
Perhaps I may remind your Lordships that, as my right honourable friend the Secretary of State said in another place, there is no reason why public transport must be provided by a publicly owned body. Where services are provided by public sector bodies in a relatively closed market, it is surely right for users to be given a means by which they can make their views

29
known or air their grievances. The consumer often does not have a real choice in the sense that he can take his custom elsewhere. That is the real reason for the nationalised industry consumer councils.
It is, I suggest, an entirely different matter when we are talking about operators applying for a road service licence to operate independently of LRT or even in competition with them. They are choosing the rigours of the open market on the basis of their ability to deliver a service that the public want and are willing to pay for. If they do not provide the right service, the traveller will make his choice accordingly. He does not need a consumer body to make his views known. He can take the direct and positive action of withdrawing his custom. It makes no difference whether the alternative service is being provided by a private operator or by a publicly owned body such as the National Bus Company.
I would emphasise again that the passengers committee will be able to keep themselves informed of applications to the traffic commissioners for road service licences by, as I have already said, subscribing to "Notices and Proceedings" in the usual way. They will be able to make representations where they feel that there are issues relevant to LRT's services. Those representations will have to be given due regard by the commissioners if they are made in the prescribed manner.
The amendment in itself may not look too unreasonable but what it really represents is a completely different approach. It would put the passengers committee in a privileged position where they, uniquely, are to be sent copies of applications for road service licences together with all supporting information. What possible grounds can exist for favouring them in this way? Moreover, and perhaps more importantly, it would further remove the traffic commissioners' discretion to determine whether any representations received from the passengers committee were relevant. The traffic commissioners would be obliged to have regard to their representations in any event. That cannot be right. We believe that it would be quite wrong to give the committee such powers. I invite the House not to agree to the amendment.
Lord Underhill: My Lords, I must confess that I am somewhat amazed that the Government are not moving at all on this issue. The Minister has simply repeated that the amendment would direct the committee from its main task. But what is its main task? Surely, as the Bill lays down, the main task is to look after the interests of users of London's transport. That cannot be separated into one operator that they can look into and another operator that they cannot look into. We are not arguing that the committee should be able to deal with the political issue of whether there should be more public transport or more independent operators. That is not the argument: it is the argument that the Government put forward. It is not an argument that I have ever advanced. Nor do I do so in this amendment.
To propose that the passengers committee should only deal with nationalised bodies and not with other bodies suggests that you could have imperfect services in one area. The Minister has not dealt with the case
30
that I put forward. The position could arise where, because of the restrictions placed upon them, and the financial restrictions, LRT might find it necessary to withdraw from certain routes. If that meant that there was only an independent operator, it is no good the Minister saying that the user can decide not to use that transport. There is no other service. There is only the independent operator. This means that there are no grounds at all for the passengers committee to make representations in that case.
We considered this matter last time at about twenty minutes past ten at night, and for that reason we did not divide the House. There is so much business before the House today—not just on this Bill but on other Bills—that, again, we do not propose to divide the House. But there is a deep principle here. I should like to ask that the Minister, between now and the Bill going hack to the other place—it has to go back because there are a number of amendments to various clauses—will consult with the National Consumer Council in order that the council may amplify the views that I have advanced. The Minister might also consult with the present passengers committee. I believe that the committee would emphasise the view that I have put.
I am afraid that the Government are taking very much the political angle. We are not. We are looking into the interests of the transport users. There should be an organisation that can look into all representations, whether in regard to the publicly-owned body or the independent body. Having put our case, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Lucas of Chilworth Lord Lucas of Chilworth moved Amendment No. 7:
[Printed earlier.]
On Question, amendment agreed to.
4.15 p.m.
Clause 46 [Orders for transfer of functions, etc., within London Regional Transport group and between that group and Railways Board group]:
Lord Lucas of Chilworth Lord Lucas of Chilworth moved Amendment No. 8:
Page 45, line 42, at end insert—

"(a) any reference to a transfer by or a vesting by virtue of that Act shall be read as a reference to a transfer by or a vesting by virtue of the order in question; and

(b) ")

The noble Lord said: My Lords, this is a minor amendment which remedies a small omission in subsection (9) of Clause 46. The clause is concerned with orders transferring functions between London Regional Transport and British Rail. An order can also provide for the transfer and vesting of property associated with the functions. Subsection (8) of the clause applies Schedule 4 to the Transport Act 1968 to any such property transfer. The schedule provides the powers which are necessary to ensure that detailed arrangements for the allocation of property can be made as necessary. The amendment simply provides that wherever Schedule 4 refers to a transfer by or vesting by virtue of the Transport Act 1968, it is to be read for our purposes as a reference to a transfer by or vesting by virtue of the Clause 46 order. I beg to move.
On Question, amendment agreed to.
Clause 49 [Travel concessions on journeys in and around Greater London]:
Lord Underhill Lord Underhill moved Amendment No. 9:
Page 50, line 23, at end insert—
("( ) It shall he the duty of the Secretary of State to ensure that arrangements made for travel concessions under this section enable persons eligible to receive them in accordance with subsection (7) above to travel, as a minimum standard, during identical hours of the day as are provided for the reserve free travel scheme under section 50 of this Act.")
The noble Lord said: My Lords, this amendment deals with the travelling hours in connection with concessionary fares. It may be recalled that at Report stage I proposed an amendment seeking that as a minimum standard travelling hours in relation to concessionary fares should be identical to those hours in any scheme that may be in being prior to the appointed day. We had in mind that the hours should be those in the amendment agreed to in Committee for the reserve scheme. On that occasion, the noble Earl, Lord Avon, said that a scheme should be flexible, it must preserve the discretion of local authorities as to what travel concessions should be provided and that the boroughs must agree on the uniform scheme. If they did not, the statutory reserve scheme would come into effect. The noble Earl said that it would still be possible for local authorities to provide benefits on top of any statutory reserve scheme.
I should like to recount the history of this amendment. The noble Baroness, Lady Gardner of Parkes, on a previous occasion—I am pleased that she is here again today—agreed that a minimum standard was needed but said that she would give definite support to the amendment that had been moved in connection with the reserve scheme by my noble friend Lord Pitt. The noble Baroness said that the wording of the amendment brought forward on that occasion would mean accepting the additional half hour on buses in the early morning contained in the present GLC scheme. I agreed with that criticism. I gave notice that I would bring forward an amendment at Third Reading which would provide that the hours for any borough scheme should be identical to those that the House had agreed for the reserve scheme.
I hope that the Government's attitude will not necessitate a Division on this matter. The House has said what should be the travelling hours for the Government's own reserve scheme if a reserve scheme should be required. It will only be required if there is not a uniform borough scheme. We are saying that any borough scheme must surely have the same travelling hours as this House has said that it wants for the Government's own reserve scheme. I need not argue the case. It was put so well by my noble friend Lord Pitt on the occasion of the reserve scheme. I hope that the Government will accept it.
Baroness Gardner of Parkes: My Lords, on first reading the amendment I thought that it only applied to paragraph (c) of subsection (7). Perhaps the noble Lord, Lord Underhill, will clarify this as I think now he is saying that it would apply to the total concessionary' fares scheme. Is that correct?
Lord Underhill: If I may, my Lords. The purpose of the amendment is that it would come under any
32
borough scheme, any local authority scheme, because we have already made the decision on the reserve scheme.
Baroness Gardner of Parkes: My Lords, I did not mean that. I meant that, as it is worded, the amendment says:
"Page 50, line 23, at end insert—".
Therefore, I thought it was a continuation of paragraph (c) of subsection (7), but really it is a new paragraph to go in there. Therefore. I shall speak to paragraphs (a), (b) and (c).
I do not support the noble Lord in this amendment, although I can see that we agree on many things about concessionary travel. The reason I do not support it is that the whole purpose of this House agreeing a reserve scheme was to have a means whereby we could produce a minimum, but it was not to take over the situation which the boroughs already operate or would wish to operate. They operated in the past, in the days when the boroughs operated concessionary fares directly.
Under this new arrangement, as I understood it, it was for the boroughs first to come up with a scheme, which we hoped would be every bit as good or better but which would give the boroughs the freedom of making that decision. If instead we accept this amendment, as I understand it, the reserve scheme would be completely pointless because we should already have taken the reserve scheme and inserted it here as a mandatory scheme. I cannot quite understand that.
In regard to blind persons, I understand that it is the boroughs that operate the concessions for blind persons. They are not operated by the Greater London Council; they have always been operated by the boroughs, and I believe that that is still the case. I think their hours of travel are considerably better than the reserve scheme would offer to other people such as those covered in paragraph (a). As I understand it, this amendment is either unnecessary or an attempt to take away any power from the boroughs, if we are insisting upon what they should do: whereas the other way, if the boroughs do not agree, as the noble Lord has said, we have the fall-hack position of our reserve scheme. On those grounds I do not consider this amendment to be necessary.
Lord Tordoff: My Lords, I have no doubt that the noble Lord. Lord Underhill, will respond at the end, but, if I may say so. I think the noble Baroness, Lady Gardner, is wrong on this. The reserve scheme is there if the boroughs fall down. What this amendment is saying is that there should be certain minimum standards within any scheme that the boroughs put together, and that one of the minima that should be included in the boroughs' scheme which we all hope will be put together (although I think some of us are less sanguine than others about the possibility) is a criterion in relation to hours that is the same as in the reserve scheme. I believe that is all it is saying.
It is not taking away from the boroughs the right to get together and put together a scheme which one would hope would be better than the reserve powers, but is saying that in this particular case there should be a minimum standard, which the boroughs should be

33
obliged to adopt, in relation to the hours for which these schemes operate. That is my understanding. I see the Labour Party Front Bench agreeing with that. On that basis, certainly I would support the amendment, and I hope that the noble Baroness, Lady Gardner, can reconsider.
Baroness Gardner of Parkes: My Lords, before the noble Lord sits down, perhaps he would allow me to say this. Is it not possible that if any one borough insists on a standard not less than the minimum in the reserve scheme, then, automatically, the situation would exist where the boroughs did not agree? It requires only one in disagreement for the boroughs not to be agreeing, and therefore we should be back to the reserve scheme.
Lord Tordoff: My Lords, since the noble Lady addresses me before I have sat down, perhaps I had better remain standing and say a word. It seems to me that, if a borough wishes to have a better standard, then it would be up to it to persuade the other boroughs to adopt that better standard. With this written into the Bill, as I see it, one borough standing out for a better standard would not wreck the whole scheme. This would be the minimum which Parliament had agreed was the acceptable minimum, around which the boroughs could agree. As I say, there may be a chance of having better provisions in the voluntary scheme, as it were. But at least within the voluntary scheme there would be a fall-back position which at the moment does not exist.
The Earl of Avon: My Lords, as I have emphasised throughout the debate on this subject, it has been the policy of successive Governments that local authorities should have discretion over the provision of concessionary fares schemes. That is why Clause 49 basically re-enacts the existing law, enabling local authorities in and around Greater London to make their own voluntary arrangements with LRT, British Rail and other operators in their area, as they wish. In these circumstances, we think it would be wrong to impose on local authorities a particular form of scheme.
I recognise that the amendment by the noble Lord, Lord Underhill, differs slightly from the one we discussed at Report stage, but I do not believe that that should affect our general view. Nevertheless, for reasons of which I am sure the House is fully aware, at the instigation of the noble Lord, Lord Pitt, we have provided in the Bill, to come into operation in Greater London, a compulsory reserve scheme which includes this particular time-scale. As we all know, if the London boroughs fail to agree on a uniform scheme to replace the GLC-operated scheme, this reserve scheme will come into operation.
As I have said before, for the first time the Government are embodying in statute a specific concessionary fares scheme which the local authorities in London will be obliged to finance if the conditions are such that the scheme automatically comes into operation. We have had very much in mind the need to balance the interests of, on the one hand, pensioners and disabled people in London, and, on the other hand, the ratepayers. We simply do not think it right
34
to impose on the boroughs the cost of financing concessionary travel on the same basis as the reserve scheme unless it is absolutely clear that they cannot agree to a voluntary scheme of their own.
We continue to take the view that the best approach is to maintain the right of local authorities to decide the scope of the travel concessions they provide. Under the Bill, they must agree on a uniform scheme. If they do not, the statutory scheme will automatically come into effect. But even if that happens, it will still be possible for local authorities to provide additional benefits to residents of their area, on top of the statutory scheme. In this way we acknowledge that local authorities are in the best position to judge what provision, if any, should be made to suit special local needs over and above any uniform scheme agreed for all boroughs.
I repeat that the Government accept the decision of this House on the amendments agreed to at Committee stage. I should like to point out just one other thing. I believe that an unacceptable consequence of the amendment for the areas around Greater London would be as follows. The enabling powers under Clause 49 to arrange concessionary travel on LRT's services are not limited to local authorities within Greater London. Therefore, the effect of the noble Lord's amendment would be that if any local authority outside Greater London wished to make arrangements with LRT for concessionary travel it would be required to do so in accordance with the benefits envisaged under the reserve scheme in Clauses 50 to 52.
Thus, for instance, Hertfordshire County Council, which currently provides for the elderly in its area concessionary travel at child fare rates on London Transport services, would be obliged to provide free travel on LRT services. We believe that that would be a quite unreasonable imposition on the authorities outside Greater London; and it could discriminate in statute between the concessions to be provided on LRT's services and those which can be provided on the services of other, and sometimes more extensive, operators in the country.
I have been over this ground before with the noble Lord, Lord Underhill. I hope he does not feel he has to press his amendment. There is little between us, because what he actually wants is in the reserve scheme, anyway. I do not think we really need it in this general scheme.
Lord Underhill: My Lords, I should like to deal first with the last point which the noble Earl raised and which referred to the question of outside bodies. We are not dealing in this amendment with what charges shall be made. We are not dealing with whether or not an authority wants free fares or fares at the children's rate. We are dealing with a minimum standard as regards identical hours. That is what the amendment is dealing with. It deals with that and with nothing else, and I hope that the House will treat it on that basis.
It is suggested that we are going to take away freedom from the boroughs. As the noble Lord, Lord Tordoff, has said—and I am again grateful to the noble Lord for his support, which I expected on this matter—we are discussing minimum standards. I do

35
not want to go into all the arguments as regards the case put forward by my noble friend Lord Pitt, but your Lordships realised that what he was saying had great force. We do not want to have a situation where old people have to start their journeys before 4.30 and where they have to keep looking at the clock. It is no good the noble Earl shaking his head; that is the argument put forward.
The amendment carried by your Lordships in Committee was that journeys will be able to start during the period 4.30 p.m. to 6.30 p.m. That is what your Lordships agreed upon. We say that such a provision should apply to any other scheme. We must always remember that journeys do not stop at borough boundaries and that most people who travel cross boundaries. I suggest that it would be wrong if we had one borough with certain hours, because it is prepared to "go additional" and because we have not laid the hours down in a general borough scheme, and another borough with contrary hours. Surely that would make nonsense of the decision which your Lordships made in Committee, when your Lordships agreed that it was absolutely vital that the reserve scheme should have the hours that are now laid down in the Bill. All we are saying is that, if that is right for the reserve scheme, then common sense suggests that those hours must he right for a general scheme. That must be one of the points of uniformity upon which this House must insist.
Lord Tordoff: My Lords, will the noble Lord give way? Surely the noble Lord is slightly wrong about that. If there were a common voluntary scheme, then there would have to be the same hours across the board. In other words, it would not be possible—would it?—to work a system where people who were benefiting from a voluntary scheme in one borough were given different times from people in another borough. The result of that—and this is where I support the noble Lord—is that we should get the lowest common denominator and, therefore, that the scheme which was brought in could well be below the minimum standards that we have suggested are required in the back-up scheme.
Lord Underhill: My Lords, I think the noble Lord is correct. I referred to the possibility of different borough schemes because the Minister said that, even if there were a uniform scheme, a borough authority must be free to buy in extra time if it wished to do so. It may be that an authority will want to buy in the extra travelling period. I do not know. The travelling period which applies in my outer London district is totally different from that which applies elsewhere. I come back to the argument. We should insist on minimum standards for a borough scheme in the interests not of LRT, but of the travelling public—in this case, aged persons. I hope that the House will agree that, having made a decision on the reserve scheme, it is common sense that we should make the same decision on a minimum standard, and I hope that the House will support the amendment.
4.34 p.m.
On Question, Whether the said Amendment (No. 9) shall be agreed to?
Their Lordships divided: Contents, 79: Not-Contents. 118.

DIVISION NO. 2

CONTENTS

Airedale, L.

Jeger, B.

Allen of Fallowfield, L.

Jenkins of Putney, L.

Amherst, E.

John-Mackie. L.

Ardwick, L.

Kilmarnock, L.

Attlee, E.

Leatherland, L.

Aylestone, L.

Listowel, E.

Bernstein, L.

Lloyd of Kilgerran, L.

Beswick, L.

Longford, E.

Birk, B.

Lovell-Davis, L.

Blyton, L.

McCarthy, L.

Boston of Faversham, L.

McCluskey, L.

Briginshaw, L.

Mayhew, L.

Brockway, L.

Mishcon, L.

Bruce of Donington, L.

Molloy, L.

Burton of Coventry, B.

Northfield, L.

Carmichael of Kelvingrove, L.

Oram, L.

Cledwyn of Penrhos, L.

Phillips, B.

Collison, L.

Pitt of Hampstead, L.

David, B.

Plant, L.

Dean of Beswick, L.

Ponsonby of Shulbrede, L. [Teller.]

Denington, B.

Diamond, L.

Reilly, L.

Donaldson of Kingsbridge, L.

Rochester, L.

Donnet of Balgay, L.

Sainsbury, L.

Ennals, L.

Seear, B.

Evans of Claughton, L.

Stallard, L.

Ezra, L.

Stamp, L.

Fisher of Rednal, B.

Stewart of Alvechurch, B.

Gaitskell, B.

Stewart of Fulham, L.

Gallacher, L.

Stoddart of Swindon, L.

Graham of Edmonton, L.

Stone, L.

Grey, E.

Strabolgi, L.

Grimond, L.

Taylor of Mansfield, L.

Hampton, L.

Tordoff, L. [Teller.]

Hanworth, V.

Underhill, L.

Harris of Greenwich, L.

Wallace of Coslany, L.

Hatch of Lusby, L.

Wedderburn of Charlton, L.

Houghton of Sowerby, L.

Wells-Pestell. L.

Howie of Troon, L.

Wigoder, L.

Jacques, L.

Wootton of Abinger, B.

NOT-CONTENTS

Ailesbury, M.

Denham, L. [Teller.]

Airey of Abingdon, B.

Denning, L.

Alexander of Tunis, E.

Dilhorne, V.

Allerton. L.

Donegall, M.

Ampthill, L.

Ebbisham, L.

Auckland, L.

Eccles, V.

Avon, E.

Ellenborough, L.

Bauer, L.

Elles, B.

Belhaven and Stenton, L.

Elton, L.

Bellwin, L.

Faithfull, B.

Beloff L.

Fanshawe of Richmond, L.

Belstead, L.

Fortescue, E.

Bessborough, E.

Fraser of Kilmorack, L.

Brookeborough, V.

Gardner of Parkes, B.

Broxbourne, L.

Gibson-Watt, L.

Bruce-Gardyne, L.

Glanusk, L.

Cairns, E.

Glenarthur, L.

Caithness, E.

Gormanston, V.

Campbell of Alloway, L.

Gowrie, E.

Campbell of Croy, L.

Gray of Contin, L.

Cockfield, L.

Gridley, L.

Cottesloe, L.

Grimthorpe, L.

Craigton, L.

Hailsham of Saint Marylebone, L.

Croft, L.

Cullen of Ashhourne, L.

Halsbury, E.

Daventry, V.

Hemphill, L.

Davidson, V.

Home of the Hirsel, L.

37

Hood, V.

Peyton of Yeovil, L.

Hornsby-Smith, B.

Plummer of St. Marylebone, L

Hylton-Foster, B.

Inglewood, L.

Polwarth, L.

Kinnaird, L.

Porritt, L.

Kitchener, E.

Renwick, L.

Lane-Fox, B.

Rodney, L.

Lauderdale, E.

Romney, E.

Long, V.

St. Davids, V.

Lucas of Chilworth, L.

Saint Oswald, L.

Lyell, L.

Saltoun, Ly.

McAlpine of Moffat, L.

Sandford, L.

McFadzean, L.

Savile, L.

Macleod of Borve, B.

Sempill, Ly.

Mancroft, L.

Shaughnessy, L.

Margadale, L.

Skelmersdale, L.

Marsh, L.

Spens, L.

Maude of Stratford-upon-Avon, L.

Strathcona and Mount Royal, L.

Merrivale, L.

Sudeley, L.

Molson, L.

Swinton, E. [Teller.]

Mottistone, L.

Teviot, L.

Mowbray and Stourton, L.

Thomas of Swynnerton, L.

Munster, E.

Trenchard, V.

Murton of Lindisfarne, L.

Trumpington, B.

Norfolk, D.

Tweedsmuir, L.

Northchurch, B.

Vaizey, L.

Norwich, Bp.

Vaux of Harrowden, L.

Nugent of Guildford, L.

Vickers, B.

Onslow, E.

Waldegrave, E.

Orkney, E.

Westbury, L.

Orr-Ewing, L.

Whitelaw, V.

Pender, L.

Wynford, L.

Penrhyn, L.

Young, B.

Resolved in the negative, and amendment disagreed to accordingly.
4.42 p.m.
Clause 51 [Supplementary provisions with respect to the free travel scheme]:
Lord Underhill Lord Underhill moved Amendment No. 10:
Page 53, line 19, at end insert—
("( ) Each issuing authority shall he obliged to make arrangements with the Post Office for permits to be issued from each Post Office or sub-Post Office in the area of that authority.").
The noble Lord said: My Lords, it may be recalled that at the Report stage an amendment was moved which was in two parts. One part dealt with the fact that permits for concessionary fares should be issued without charge, terms, limitations or conditions; the second part suggested that arrangements be made for permits to be issued from post offices. Because of the arguments advanced at that stage I withdrew the amendment, and it will be noted that on this occasion the amendment before the House deals only with the one item—that the issuing authority should issue permits through post offices or sub-post offices in the area of that authority. I had hoped that there would be no need to argue the case, but I think that I had better put forward one or two points.
Under the GLC scheme post offices are used for the issue of permits. It was argued at the Report stage that authorities may wish to use council offices. On that occasion I put forward what happens in my own district council area, which is outside Greater London, where a council sub-office is used. Even from where I live, which is not the distance which many people have to travel, it means that my wife has a long walk. She is very able-bodied and can walk, but others cannot make the journey and have to wait for transport
38
facilities. Very few boroughs will have an adequate number of offices or sub-offices. Often the person has to walk quite a distance, and frequently some mode of transport is involved. Also, because of the limited number of council offices in an area, there could be quite a waiting time for the issue of a permit. That is what happens in my own area; because there is a substantial number of aged people in the area, there is always a fair wait at the council sub-office for the issue of a permit. We want to avoid that wait.
Post offices and sub-post offices are manned every day of the week except Sundays. They provide reasonable access for the great majority of people. They are a great help to pensioners, because the majority still use post offices to collect their pensions and therefore pensioners could apply for permits at the same time as they get their pensions. The staff of the post office know the procedure and are well used to it, As I mentioned on Report, many of the staff often know the applicants personally.
This is a common-sense provision. If it is not included in the Bill and if we have separate authority schemes, some authorities may not use post offices. I believe that it is essential that we lay down, as we do in this amendment, that:
"Each issuing authority shall he obliged to make arrangements with the Post Office for permits to be issued from each Post Office or sub-Post Office".
I hope that we shall not be told again—as we were when we discussed the last amendment—that this procedure should be flexible, that each council should be able to decide for itself. Some councils are mean-minded and we must always remember that. We want to ensure that particularly the aged person receives fair treatment, and that means that he or she ought to be entitled to use post offices. Post offices are a public institution and there should be this co-operative effort between local authorities giving concessionary schemes and the public institution of the post office. I beg to move.
Baroness Gardner of Parkes: My Lords, again—and I am sure that the noble Lord, Lord Underhill, will expect it of me—I rise to oppose this amendment. I do not think that there should be a compulsion on local authorities to use the post office. When we talk about that we imagine that we can use post office services for nothing. However, that is not so. There is a charge for using the post office. As time goes by we have no way of knowing how the post office might vary that charge. Councils may find that to use the post office might involve them in very major expense. The fact that they have a choice means that they are in a stronger position to negotiate favourable terms with the post office than if, under this amendment they are obliged to use the post office.
Again, a council might think it preferable in terms of social services to be able to see the people who are applying for the passes and to make a social services contact with them at the time. We have no way of knowing how the councils will think. I believe that many councils would use the post office. They would negotiate a good price with the post office and would use it because it is a convenient and efficient way of providing this service. But if we write this into the Bill,

39
it puts the post office in a monopoly situation where it can demand anything it wants for the issuing of these passes. When we hear—as we did during the previous stage—about the noble Lord's own difficulty with his pass outside the London area, we tend to be carried away by the thought that one applies for something like this once a week. At a maximum it would be applied for only once a year. Like the issuing of driving licences, there is a tendency to issue such passes for longer and longer periods. If the post office charges a high price or it costs a great deal to issue these permits, then I believe that as time goes by they will be valid for longer periods.
I do not think there is a case for writing into the Bill the compulsion to make arrangements with the post office. I am putting aside entirely the fact that post offices are not always open. I know that in the last couple of weeks a number of them have been closed in some sort of protest, and this can be extremely inconvenient to the public. However, putting that point aside (because I do not think it is important) I believe that councils should have a choice as to how to go about this matter so that they can consider the economics of it. One man's mean-minded council is another man's careful, thrifty council, and they will have to weigh up one social service expense against another, because this concessionary fares scheme is a very major social service. I should not like to see this amendment written into the Bill.
Baroness Phillips: My Lords, it is important that when older people apply for concessionary fares they should be able to do so with the greatest degree of dignity. I find it abhorrent to see older people lining up to have their photographs taken, because this condition has now been imposed. The noble Baroness, Lady Gardner, stressed that it would be a monopoly if the issuing of these passes was left to the post office. It would equally be a monopoly if only local authority establishments were allowed to issue them because establishments are few in number, are usually centralised and are much larger buildings. It is mainly the elderly who apply for permits for concessionary fares, and they are easily confused. They know their local post office and. as my noble friend has said, they are used to going there for their pensions. In particular, sub-post offices are very friendly and helpful to these older people. We must recognise that this is not a question of money. If we are going to save money, let us not be saving money at the expense of the older people among the population.
Lord Pitt of Hampstead: My Lords. I am sorry that the noble Baroness, Lady Gardner, felt the need to oppose this amendment. We have to think of the convenience of the elderly people getting their passes. They have been going to the post office for the last eight years, proving their identity, proving their address, and getting their permits. I should have thought that we would want them to be able to continue to do just that.
Whatever slightly increased cost there might be—and I am not doubting that there might be some increased cost—it is outweighed by the convenience of allowing them to use their local post office, as they are
40
now accustomed to doing. I stress that point because it is important in this context. I hope we shall not have to troop through the Lobbies. I hope the Government will accept this. It is a sensible and useful addition. It is not even an addition, because these people already have it. It is merely safeguarding a privilege that the old people now have. I hope that the Minister will accept this amendment.
Baroness Macleod of Borve: My Lords, I agree with my noble friend Lady Gardner and with the reasons that she gave. Some time ago I had to deal with gas, when people wanted to get stamps for gas through the post office. They were not able to afford it: it was so expensive. It is not a small sum at all that the post office will charge. As the noble Baroness said, they might charge increasing amounts for giving out these passes. As she rightly said, if it is open-ended and left to the local council they will know what their local people want and the most convenient place for the people concerned. I would rather leave it to them.
The Earl of Avon: My Lords, I am grateful to my two noble friends for their support. I can assure the noble Lord, Lord Underhill, that I have taken out my little sentence about flexibility, as he obviously did not want me to read it again. May I say to the noble Baroness, Lady Phillips, that it is not a question of money here: and may I say to the noble Lord. Lord Pitt, that it is not a question of changing the custom. We are not against this idea at all, but purely of making it a statutory imposition and imposing it on the boroughs.
As I said in our previous debate, I appreciate the convenience for all concerned of travel permits being issued by the post office. As I said at that stage, it is our understanding that the London Boroughs Association have this possibility very much in mind in seeking to devise a workable uniform voluntary scheme. Just as the noble Baroness, Lady Phillips, and the noble Lord, Lord Pitt, said. I am sure that they will want to adopt the best possible arrangements. I also had to say then that it would be difficult in practice to make such an arrangement work in some cases, because if some boroughs choose to impose different terms and conditions on the issue of travel permits, as they would be free to do, it could cause difficulties. I am sure that the House would recognise this. In the circumstances, I do not think that it would be helpful to pre-empt the outcome of further discussions by the boroughs and to fix a particular arrangement rigidly in the statute.
I am rather surprised that the noble Lord is so opposed to giving the local authorities discretion in this matter. We simply see no benefit in imposing a particular arrangement on all the boroughs before they have had an opportunity to devise their own arrangements. We are not saying that there will be any change. All we say is that surely the London boroughs can be left to adopt the best arrangement in the circumstances, and we should not prescribe this in the Bill. There is no difference between us that the post offices are very useful. The difference between us is that we should like to leave it to the boroughs to make up their minds.
Lord Underhill: My Lords, the noble Earl, Lord Avon, thanked his two noble Baronesses for their support, but it is clear that there is a difference of opinion on his side of the House. The noble Earl said that it is not a question of money, His two supporters advocated particularly the possible saving of money, and said that that was why we should not commit ourselves to the use of post offices. It was emphasised that they are in a monopoly situation and could make charges; in other words that they could take the boroughs "to the cleaners". Therefore, I am surprised that the noble Earl is grateful for their support on this and then says that it is not a question of money.
The noble Earl said that there is no way of knowing how the councils will think on this. We want to be assured, irrespective of what the councils may think, that the scheme is in the interests of the pensioners. If it is not going to be the post offices, where else could it be? The number of councils which have a sufficient number of council sub-offices with trained staff available at proper hours will be limited. We want the post offices because the post offices are fairly accessible in most areas, and particularly in Greater London.
I should like to think that in this matter we are considering not merely what the borough councils feel they ought to do. We must remember that the borough councils are going to be pushed on the question of money in relation to a Bill we shall be discussing shortly after we have finished this Bill this evening. We want to ensure that somebody is going to ask what the pensioners want. You will find that the pensioners will opt overwhelmingly for collecting their permits from the post offices.
We are in a difficult situation here. Those of us who feel strongly on this feel that we ought to divide the House. But may I be completely honest: if noble Lords will not go into the Lobbies to support proper travelling hours for aged persons, then they will not go into the Lobbies to support us on post offices. It is regrettable, but that is the position. Therefore, if there is to be a borough scheme I can only hope that the Secretary of State will use all his good offices and ensure that he urges, or his staff urge, that the post office system should apply and continue as at present. We believe that that is essential in the interests of the pensioners. It is only because of the result of the last vote that I beg leave to withdraw this amendment, because I do not believe that noble Lords will be prepared to support it in view of their vote on the previous amendment.
Amendment, by leave, withdrawn.
Clause 53 [Penalty fares]:
Lord Lucas of Chilworth Lord Lucas of Chilworth moved Amendment No. 11:
Page 57, line 26, leave out ("lower than the fare properly payable") and insert ("appropriate in the case of another category of traveller but lower than the fare properly payable by the person in question").
The noble Lord said: My Lords, before I move Amendment No. 11 may I remind your Lordships that this is one of a short series of amendments to Clause 53 and is in accordance with the undertaking I gave on 12th June at Report stage, when I said that if
42
any of the matters contained in what is now Clause 53 could be improved I would give your Lordships an assurance of my determination that this would be done. This is such an amendment, as are a number of others that I shall seek to move.
This is a technical amendment designed to clarify the situation as regards an adult who over-rides. Subsection (9) of Clause 53 sets out what fare has to be taken to be multiplied by 10 to arrive at the penalty fare. Paragraph (b) of that subsection is intended to cover a person who over-rides. In that case the penalty fare is 10 times the excess distance travelled, treating the excess distance as a separate journey. Paragraph (c) of that subsection is intended to cover a young adult who travels on a child's ticket. In that case the penalty fare is 10 times the difference between the adult's ticket and the child's ticket.
In view of the present wording of paragraph (c), it might be possible for a person who over-rides to claim that he comes within that paragraph rather than paragraph (b). In that event he would be liable only to a penalty fare calculated on the difference between the fare which he should have paid and the fare which he has paid. This would probably be lower than the fare calculated under paragraph (b). It is obviously unsatisfactory that there should be any lack of precision in the subsection. The effect of the amendment will be that paragraph (c) will clearly be relevant only to the young adult who travels on a child's ticket.
I hope that your Lordships will agree that it is essential that we reduce the risk of dispute between the inspector—the "authorised person", as we have hitherto called him—and the passenger as to the amount of the penalty fare. This amendment seeks to do that.
On Question, amendment agreed to.
5 p.m.
Lord Underhill Lord Underhill moved Amendment No. 12.
After Clause 53, insert the following new clause:
("Information as to liability
At the time an authorised person requests the payment of a penalty fare under section 53 of this Act the authorised person shall have the duty to inform the person who has become liable under section 53 of this Act to pay a penalty fare of his obligations under the Bill and, in particular,

(a) that the penalty fare shall be payable within the period of twenty-one days beginning with the day following the date on which the journey was completed,

(b) that the payment of a penalty fare is not, of itself, an admission of intent to avoid payment of the correct fare,

(c) that the person shall not be liable to pay the penalty fare in a case that falls within subsection (4) or (6) of section 53 of this Act.").

The noble Lord said: My Lords, perhaps it will be for the convenience of the House if, in moving Amendment No. 12, I speak also to Amendment No. 13.
Amendment No. 13: After Clause 53, insert the following new clause:
("Interpretation of payment
. Any payment of a penalty fare under section 53 of this Act shall not be deemed to be an admission of intent to avoid payment of the correct fare.").
I reflected on the speech of the noble Lord, Lord Lucas, when he introduced the new clauses for the penalty fares provisions and also the various points raised in the useful debate on that occasion.
Although from these Benches we echoed the view throughout the House of general support to these provisions, it will be recognised that we must ensure that they operate fairly and with full regard for the rights of individuals. All that the amendment seeks is that when an authorised person requests payment of a penalty fare, at the same time the traveller should have the right to be informed of all his obligations. These are listed under heads (a), (b) and (c) in the amendment. Amendment No. 13 lays down that the payment of a penalty fare is not to be regarded as an admission of that person's intent to avoid payment. We think that it is in the interests of the person that that should be done. I ought to thank the noble Lord the Minister for kindly writing to me on this and putting his point of view. I believe it is important that we should have the views expressed to the House so that they can be on the record. I beg to move.
Lord Denning: My Lords, may I say a word on this because these penalty fares are a new introduction into our English law. There still remains the old law of 1889, with which I was familiar: that a person is guilty of a criminal offence if he travels on the railway without having previously paid his fare and with intent to avoid payment thereof. If he did not give his name and address he was liable to be arrested. That is the law still; that Act still remains on the statute book. This concept of a penalty fare is in no way criminal, it is only obtainable either on demand if the traveller admits his liability or by an action in the civil court if he is proved to be liable.
The position is this. If a ticket collector goes up to him and asks him for his ticket and he has not got one and he has not paid his fare, there is a danger that the ticket collector may then just say to him: "I must ask you for the penalty fare. I must ask you to pay the £5 or 10 times the multiplier"; whereas the man has a perfectly good defence if he says, "1 did not have the chance of getting my ticket, I was rushing for the train". Or he might say that the booking office was closed. This is a perfectly good answer and he is not liable for the penalty fare. Indeed, the ticket collector ought to know that: But ought he not also to ask the traveller, before he demands the penalty fare, "Did you have a chance of getting a ticket?" If the man says "I did not", then that is a perfectly good defence.
It is interesting to see that there is an amendment on this coming along at Amendment No. 16, where the Government are saying, quite rightly, that it is for the plaintiff—the company or the board who are claiming the penalty fare—to prove that the traveller did have the opportunity of getting a ticket. They recognise that the burden is on the claimant to prove that he did have that opportunity. It seems to me in fairness to the individual traveller that when the ticket collector goes up to him and asks him (as he may well do) for the penalty of £5, the man should be told, "You are not liable to pay if you did not have a chance of getting the ticket". He ought to be told the legal position. Although this amendment is a little bit elaborate—I would not think it necessary to go into all the detail about it—I think that the substance of it should be told to the traveller by the ticket collector or by whoever is collecting the penalty fare so that the man knows what
44
his rights are. I would support the amendment in principle, so that the traveller should be told what his position is. If he has a good answer, that he did not have a reasonable opportunity of getting a ticket, then he is not liable for the penalty fare. On the whole, I would support this amendment.
Lord Inglewood: My Lords, may I try to get clear one small point which may be clearer to others. The "authorised person" is referred to in this amendment but I am not quite sure who is the authorised person. Presumably, every constable would be an authorised person. May he be also a constable of a force other than the British Transport Police? Again, there are members of the staff of the railways who, I believe, have limited powers of arrest outside the powers of an ordinary citizen. Unless it is made really clear in this Bill who are or are not the authorised people, then we can have quite a lot of unnecessary ill-feeling and argument at the end.
Baroness Gardner of Parkes: My Lords, I should like the benefit of the wisdom of the noble and learned Lord, Lord Denning, on the words under paragraph (b) of the amendment and also on the similar words in Amendment No. 13. In the situation of a civil matter—and I understand that this would be a civil contract, whether you bought a standard ticket or a penalty ticket—I thought it unusual that someone should say to you that in paying the penalty fare you were not admitting an intent to avoid payment of the correct fare. As a lay person, I am not clear how often someone who is not committing any form of criminal offence is told that they are not committing it. Surely, in the course of doing ordinary things in ordinary life we would not expect everyone to be saying to us such things as: "By crossing the road here you are not committing a criminal offence".
So I am slightly puzzled by paragraph (b) and also by its repetition in Amendment No. 13. I wondered whether, instead, it would be more practical on the ticket or receipt that the person is given to have printed something to the effect that payment of this amount discharges the full liability for the travel—or whether there is some other way to cover it rather than what seems to me this very unusual method. I do not know whether the noble Lord is able to comment before I sit down—which I suppose is the procedure at this stage because he is not allowed to speak again.
Lord Lucas of Chilworth: My Lords, I think it would help my noble friend if she understood that in practice the noble Lord. Lord Underhill, who is moving the amendment, has the right of response at the end of the debate.
Baroness Gardner of Parkes: My Lords, if the noble Lord will allow me to say so, it was Lord Denning's legal view on this matter that I was seeking. It was not a point that he went into in his contribution.
Lord McCluskey: My Lords, I hesitate to step into the shoes of the noble and learned Lord, Lord Denning, but I think that the noble and learned Lord might offer the explanation which I would humbly offer to the noble Baroness, Lady Gardner of Parkes:

45
that although the new system substitutes strict civil liability for a potential criminal liability, it does not do so entirely in respect that, under Clause 56 of the Bill, certain offences survive, and therefore it is conceivable that a person not only fails to pay the correct fare—and so becomes liable to pay the penalty fare—but is a person who deliberately intended not to pay. If he commits the offence, it looks to me, subject to what the Minister will say to the House, that a person could face a criminal prosecution under the surviving criminal provisions which are kept in force, I think, by Clause 56.
5.10 p.m.
Lord Lucas of Chilworth: My Lords, it would seem to me that we are moving into a number of amendments all at once. I think it might be better if I dealt just with this particular one at this stage. As I made plain at the outset of the debate, we are sympathetic to the underlying purpose. The Government accept that when a person becomes liable to a penalty fare he must be provided with information as to his rights and obligations. The Government have every intention of ensuring that this will be done.
Unfortunately, the amendment of the noble Lord poses a number of problems because in the first place it does not make clear how such information should be provided. I am sure your Lordships will agree that it would be most unsatisfactory for this to be done by word of mouth alone, because this would leave too much scope for discretion or for matters to be left out inadvertently. Then, as I am sure the House will also appreciate, if the requirement to provide certain information were to be written into the Bill in this way, it could well open up an area of potential dispute as to whether the information had been provided; as to how, where, when and by whom it was provided; I do not think I need elaborate further on that point.
A further point to bear in mind is that, while being well intentioned, the amendment may leave out a number of matters which should perhaps form part of the information to be provided. As I said in my opening remarks, we have every intention of ensuring that information as to rights and obligations is provided to those who become liable to a penalty fare. What the Government propose is that the form of notice issued by the authorised person will be subject to approval by the Secretary of State under his general powers in relation to London Regional Transport. In this respect I think the House can accept my assurance that the points which noble Lords may make, and certainly have made, will be taken care of in the framing of that particular notice.
My noble friend Lord Inglewood will see on page 58, Clause 54(3), that an
" 'authorised person' means a person authorised by the person providing the service in question".
Lord Inglewood: My Lords, will my noble friend help me? I did not get the reference.
Lord Lucas of Chilworth: My Lords, it is page 58, Clause 54(3). The "authorised person" is defined there. It means that only one of these authorised persons who is a special inspector specially trained will have the authority of the provider of the service to
46
make an alleged fare dodger liable to a penalty fare. So I do not think the question of constables of any force arises.
The noble Lord, Lord Underhill, also spoke to his Amendment No. 13, the purpose of which was to ensure that,
"Any payment of a penalty fare under section 53...shall not be deemed to be an admission of intent to avoid payment of the correct fare".
I understand the purpose of the noble Lord in wishing to place the point beyond any doubt, but I do not think the amendment is going to be necessary and I do not think in any case it would be very helpful to those whom he is seeking to protect. I have made clear throughout the discussions on these clauses that their purpose is to introduce a new civil liability, the point which both the noble and learned Lord, Lord Denning, and I think the noble and learned Lord, Lord McCluskey, sought to underline in their interventions. As such, there can be no suggestion that in discharging the civil debt incurred any admission of intention to avoid paying the proper fare is involved. As I think the House is aware, the purpose of penalty fare provisions is largely to stand in
I am sure your Lordships will appreciate that these clauses have been drafted in such a way as to avoid any suggestion of intent to avoid payment. What is involved here is a simple arrangement where a passenger either pays the ordinary fare, or, if he cannot show that he has done so, he pays the higher penalty fare. The reasons for him not having paid the ordinary fare do not enter into it at all.
I hope the House will agree that in these circumstances to insert a reference to an admission of intent to avoid payment, albeit in the negative, would draw attention to a possibility which the clauses are, by definition, framed to avoid. I hope that on reflection the noble Lord will not find it necessary to move either of these two amendments.
Lord Teviot: My Lords, I hesitate to come in here but I think there is one point which has not been covered in this wide-ranging discussion. What we are talking about especially is the train side of it. The train side of it will not be started until the Minister of State is convinced that London Regional Transport has everything correct for it to go forward. One point has arisen: where the passenger was unable to get a ticket at a particular station. We did not mention it, I am afraid to report, but it has to be mentioned now and if I am wrong my noble friend will interrupt me. The point is that, at each of the stations, if for any reason the booking office is closed there will be opportunities for passengers to obtain a ticket, or for a machine to provide a ticket, to prove the station where the journey started. I do feel that explaining this should alleviate doubts in some people's minds as to the fairness of this whole proposal.
Lord Underhill: My Lords, may I thank both the noble and learned Lord, Lord Denning, and my noble and learned friend Lord McCluskey, for generous support in principle. When as a layman one is dealing with legal matters one needs to have support of that kind. I am very grateful to the Minister for the general

47
sympathy he has given to the points of the amendment and I readily recognise the deficiencies in the amendments to which he has referred.
I am particularly pleased that in his sympathetic response he said there is every intention that persons shall be informed of their rights and obligations, and that the Secretary of State will have to approve the forward notice which will have to be prepared in connection with these new clauses. We are prepared to accept those assurances and we are grateful for them; and it is very good that we have had this short debate and placed those statements on record. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 13 not moved.]
Clause 55 [Supplementary provisions with respect to penalty fares]:
5.18 p.m.
Lord Lucas of Chilworth Lord Lucas of Chilworth moved Amendment No. 14:
Page 59, line 34, leave out subsection (1).
The noble Lord said: My Lords, in moving Amendment No. 14 I should like also to speak to Amendment No. 15:
Page 59, line 42, leave out subsection (2).
These two amendments arise directly from a point raised by the noble and learned Lord, Lord McCluskey, during our debate last week at Report stage. I have written to the noble and learned Lord about the matter he raised, and indeed so seized was he of the urgency of the matter that he has in fact responded to me.
The point of the noble and learned Lord was that, since the penalty fare provisions are a new civil liability, it was wrong in principle to extend the powers of arrest which currently apply to contravention of regulations carrying a criminal sanction—the point which I think the noble and learned Lord, Lord Denning, has made on two occasions. Having considered the matter, we concluded that this point is quite justified, and in the spirit in which I introduced the provisions I have accordingly tabled these two amendments.
Your Lordships will appreciate that our original purpose in including the subsections was to ensure that adequate means were available for obtaining the name and address of people liable to a penalty fare. In practice it is likely that people who are liable to a penalty fare may be in contravention of the existing regulations governing the conduct of passengers. Nonetheless, it is important that sanctions which apply to matters involving a criminal sanction should not appear to extend to civil liabilities. I therefore think it right for the avoidance of doubt that these two subsections should be deleted. I beg to move.
Lord McCluskey: My Lords. I am certainly grateful to the Minister for the promptness with which he has considered the matter and for the readiness with which he decided to change the provision, and in particular also for his courtesy in advising not only myself but my
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noble friend Lord Underhill and the noble Lord, Lord Tordoff, of the changes he proposed to make. I think the change is wise and the action taken is right. For myself, I thoroughly approve it. I do not think the Government are entirely out of the wood in this respect—and your Lordships may wonder what a Scots lawyer is doing in the Bill at all—but having gone into the field I wonder whether or not Part III of the Police and Criminal Evidence Bill (and in particular Clause 25) is apt. No doubt those in the Box will be passing views on to the Home Office that they ought to be looking at Part III of the Police and Criminal Evidence Bill. If that is not done, I shall certainly raise the matter at an appropriate occasion some other time: but in the meantime I would express my thanks to the noble Lord.
Lord Denning: My Lords, I, too, would agree very much that it is a very good thing to omit these subsections.
On Question, amendment agreed to.
Lord Lucas of Chilworth: My Lords, I beg to move Amendment No. 15.
[Printed above.]
On Question, amendment agreed to.
Lord Lucas of Chilworth Lord Lucas of Chilworth moved Amendment No. 16:
Page 60, line 11, leave out subsection (3) and insert—
("( ) In any action for the recovery of a penalty fare payable under section 53 of this Act it shall be for the plaintiff to show that any relevant exception provided by subsection (4) or (6) of that section does not apply.").
The noble Lord said: My Lords, the purpose of this amendment is to reverse the effect of the existing provision. Subsection (3) of Clause 55, as it appears in the Bill, places the onus of proof on the passenger to show that he had no reasonable opportunity to pay the fare or buy a ticket. That was a point which interested a number of your Lordships throughout our discussions on these clauses, and my noble friend Lord Teviot also raised it when we were discussing an earlier amendment this afternoon.
Our original purpose in including this provision was that if a passenger wished to claim exception to the payment of a penalty fare on the grounds that he could not buy a ticket, then it was not unreasonable for him to have to prove that that was the case. Having reflected further on this point, we now consider that since London Regional Transport will be the plaintiff in any civil action for the recovery of a penalty fare, the more reasonable course is for the LRT to have to show if a passenger chooses this line of defence, that the exception provided of being unable to buy a ticket does not apply. As I think your Lordships will appreciate, the effect of this amendment is to restore certain rights to the individual, and as such I trust that it will meet with the House's approval.
This is not to suggest in any way that London Regional Transport will not be required to satisfy my right honourable friend the Secretary of State that adequate machinery and adequate facilities are placed at the disposal of travellers so that they can pay the proper fare or a deferred authority ticket can be

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obtained before a journey is undertaken. Nevertheless, we think, as I say, that this restores the rights of the individual, which I am sure the House would agree with. I beg to move.
Lord Denning: My Lords, again I would support this amendment. It really puts the burden on the right place—it is on the railway company to prove and to get its penalty fare. I should like to take this opportunity of saying how much I appreciated what was said, that there will be proper training of the authorised officers, and further that there will be a proper record of instruction and notice given so that the individuals themselves will know what their rights are. In particular, I should imagine there will be a question on it: "Did you have an opportunity of getting your fare or not?"—because this is part of the record which I gather is going to be prepared for the sake of the authorised officers.
On Question, amendment agreed to.
Clause 71 [Short title, commencement and extent]:
Lord Lucas of Chilworth: My Lords, I beg to move Amendment No. 17.
[Printed earlier: col. 24.]
On Question, amendment agreed to.
Lord Lucas of Chilworth: My Lords, I beg to move Amendment No. 18.
[Printed earlier: col. 24.]
On Question, amendment agreed to.
Schedule 2 [Operating powers of London Regional Transport]:
Lord Underhill Lord Underhill moved Amendment No. 19:
Page 79, line 18, after ("may") insert ("manufacture and").
The noble Lord said: My Lords, I beg to move Amendment No. 19 and I hope that it will be for the convenience of your Lordships if I speak to Amendment No. 20 as well as to Amendment No. 19.
Amendment No. 20: Page 79, line 20, after ("of') insert ("manufacturing or").
These amendments may seem familiar, but there are good reasons why they are brought forward again at the Third Reading stage. Your Lordships will recall that at the Report stage I dealt with the Ministerial reply at the Committee stage, and particularly the statement made that the London Transport Executive accepted the restriction written into the Bill of their present manufacturing powers. At the Report stage I quoted from a letter sent by the solicitor to the London Transport Executive to the Department of Transport as recently as the 5th June, a copy of which the Board had asked the solicitor to send to me. I shall not weary the House by reading that again, but the letter makes clear two points. London Transport Executive as such had never been of the view that London Regional Transport should not have manufacturing powers and that the LRT should have such powers, subject to constraints. That was a unanimous confirmation of the view taken by the board meeting of London Transport on 5th June.
Having read very carefully what the noble Lord, Lord Lucas, said in comment on that letter, particularly regarding the discussions between London Transport officials and the Department during the preparation of the Bill—it is stated quite clearly in Hansard in column 1039 on 12th June, by the noble Lord, Lord Lucas:
"London Transport was able to tell us that the proposals as they appear in the Bill would not cause any serious problems".
The solicitor to London Transport was asked to write to me further because he has seen that reply. It is so important to get the matter right that I shall not attempt to paraphrase the further letter, but I will quote extracts from it. These are as follows, from the solicitor to London Transport in a letter dated 18th June, a copy of which I understand has been sent to the Department of Transport.
"While the Bill was in draft form the Executive was told that it was intended that L.R.T. would have very restricted powers to repair and no powers to manufacture. We explained to the Department that rather wider powers were needed and persuaded them to put into the Bill the provisions which now appear in paragraph 9 of Schedule 2. It is true that we did say that we could live with that formulation, and indeed we can since the amount of use we make of the repairing power for third parties is very limited. It was against the background of a determination by the Government to restrict our manufacturing powers that we made the comments we did.
It remains true that the Executive would like to have wider manufacturing powers (subject of course to restrictions currently imposed on us—consent to engage in the activities and the certainty that public money would not be needed) but it has to be admitted that it is unlikely that any vast amount of manufacturing for third parties would take place if the power was available."
In conclusion, if I might just mention a few brief points, the view of London Transport is now clearly set out. They would like to have the powers which are proposed in the two amendments which I have put forward. LRT, under the Bill, is to be permitted to manufacuture for itself. The obvious question is: why not also manufacture for third parties if there is available capacity? Under the Bill LRT may undertake repairs for third parties and supply parts and components. The obvious question again is: why not extend to manufacture for those same parties?
As I said at the Report state—and this was supported by a number of noble Lords—there is only a very thin line between manufacture and repairs. If LRT has spare engineering capacity it is surely in the best interests both of LRT and of third parties that we should make the maximum use of that capacity.
I close by saying that, in the words of the Government, we are going to have a managerial board. Surely it should be left to the managerial and common-sense decisions of the board. It is wrong to lay down in advance that the board shall not have these powers. Your Lordships have heard from the letters I have quoted that the London Transport Executive believes that these powers should be given to LRT. The Bill provides that the Secretary of State has reserve power to approve any such proposals, to modify such proposals or to tell LRT to discontinue any such activities. Therefore, if at any time the board of LRT wished to extend manufacture on behalf of third parties, the board would have the opportunity to put the justification for its managerial and commercial decisions before the Secretary of State. That seems the right approach to make. The decision whether or not

51
to approve would rest finally with the Secretary of State. That is what the amendment would still continue. What the amendment suggests is what the London Transport Executive has said ought to be put into the Bill and I hope, despite the previous discussion we have had, that the Government will now recognise that this is a common-sense managerial and commercial matter and that these proposals in the amendment should be agreed to. I beg to move.
Lord Lucas of Chilworth: My Lords, I am not very surprised to see that the noble Lord, Lord Underhill, has returned to this point. However, we have discussed it twice already in the House and I am just a little disappointed that he felt it necessary to raise it again, particularly as he was not able to advance any new argument in support of his amendment. Therefore, he will not be at all surprised to hear me say that our position remains completely unchanged. We do not believe that LRT should have wide manufacturing powers either for themselves or for outsiders, as these amendments propose. I repeat what I have said on two, if not three, previous occasions. The job of LRT is to run buses and trains and not to make them for themselves or for anybody else.
The noble Lord made great play in our earlier discussions— and he reminded us of it today— with the recent letter which London Transport had sent to the department. That letter was written on 5th June. It conveyed the unanimous view of the executive that they, the executive, had never accepted that they should not be able to manufacture for third parties. The Bill was published on 2nd December last year. Both London Transport and the GLC have had over six months to consider the Bill in detail and at no time have we received representations from them on this matter. They now come forward at this very late stage with a protest, almost as if some major injustice had been done to them. I am afraid that their protest is not at all convincing at this late stage.
The noble Lord, Lord Underhill, read out most of the letter of 18th June which was addressed to himself and signed by the solicitor to the executive. He did not, however, read out the last paragraph, which states:
"I should also explain that this letter is not written as a result of any Board decision but merely as an explanation of the background of the present wording of the Bill".
So I do not think that that is tremendously helpful in support of the amendment.
The fact of the matter is that London Transport's wide powers of manufacture have been little used in recent years. We sought a reassurance well before the Bill was published with regard to there being, or not being, any significant difficulty if we draw the powers, as we have done, more narrowly. Recent discussions with London Transport have not changed that view, which was expressed then and which we understand is the real view at this time.
Of course the executive's view was unanimous, but I may say that not even the professional members of the executive make Government policy. I might draw your Lordships' attention to the disclaimer which the chairman of London Transport felt obliged to write with regard to the three-year plan which the board set
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down a short while ago. There are fundamental differences between us and I do not see any possibility of bridging that gap. Our very firm view is that London Regional Transport do not need, and should not have, powers to set up a manufacturing base for themselves or for outside bodies. The powers in the Bill will enable them to manufacture spare parts and components for their own operations and for their own servicing, where necessary, and to make sensible use of their resources to carry out this kind of repair and manufacture for other people. We do not believe that those are unreasonable constraints on a nationalised industry, supported by public funds, whose prime function is to provide a public transport service. Therefore, we shall have to reject the amendment and I invite the House so to do.
Lord Underhill: My Lords, the noble Lord, Lord Lucas, said that there are no new arguments in support of this amendment. There are no new arguments in support of the principle, but I advanced new arguments to justify bringing the amendment forward again this afternoon. The noble Lord implied that he could not understand why these points of London Transport should be made at this late stage, but let us see what the history is. The letter which I quoted at Report stage was dated 5th June. It was the unanimous view of the board that these restrictions should not be placed on London Transport. It was the unanimous view of the board that these manufacturing powers should he given to LRT. Because of the comments made at Report stage, the solicitor wrote to me again and pointed out exactly what took place during the discussions. I read the letter in full, so that I could not be accused of paraphrasing it.
I am certain that, on reflection, the noble Lord, Lord Lucas, will agree that it is not good enough to say that this letter of 18th June was not written because of any board decision. It was written by the chief executive because he felt that he ought to explain exactly what took place during the discussions between the officials and the Department of Transport. That is what he set out to do, as any competent official would do, so as to put the matter right, and I believe that we have put the matter right by mentioning these points tonight.
The Minister said that there are fundamental differences and I regret that that appears to be so. He rightly pointed out that under the Bill LRT will have power to manufacture for themselves components and certain other items of equipment. The amendment would make it possible to say, "Right. There is spare capacity. Let us manufacture those same items, if necessary for third parties." It is commercial and business common sense, but there are these fundamental differences. We have put the position of London Transport quite clearly. It is a decision taken not only by politicians but by professional men, who believe that this is an essential power. I shall not put the issue to a vote, having made the position quite clear for the record. My Lords, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 20 not moved.]
Schedule 4 [Operation of enactments relating to former London Board functions]:
Lord Lucas of Chilworth Lord Lucas of Chilworth moved Amendment No.21:
Page 90, line 30, leave Out from second ("to") to second ("of") in line 31 and insert ("any wholly owned subsidiary").
The noble Lord said: My Lords, this is a minor amendment to paragraph 6(4) of Schedule 4, and it corrects an error in the description of paragraph 7(1) of Schedule 16 to the Transport Act 1968. I beg to move.
On Question, amendment agreed to.
Schedule 5 [Transitional provisions and savings]:
5.40 p.m.
Lord Lucas of Chilworth Lord Lucas of Chilworth moved Amendment No. 22:
Page 99, line 13, after ("to") insert ("any service or services provided in pursance of").
The noble Lord said: My Lords, I beg to move Amendment No. 22. With the leave of the House, perhaps I may speak also to Amendment No. 23.
Amendment No. 23: Page 99, line 15, leave out from ("40(4)(b)") to ("of") and insert ("and 50(3)(e)")
Both these amendments affect paragraph 11(4) of Schedule 5, which makes arrangements for bus services provided under existing London bus agreements or consents. The amendments correct two small mistakes. The first ensures that the references to which the Bill applies are references to bus services rather than to the agreements under which they are provided. The second amendment omits an incorrect reference. I beg to move.
On Question, amendment agreed to.
Lord Lucas of Chilworth Lord Lucas of Chilworth moved Amendment No. 23:
[Printed above.]
The noble Lord said: My Lords, I have already spoken to this amendment I beg to move.
On Question, amendment agreed to.
Schedule 6 [Minor and consequential amendments]:
Lord Lucas of Chilworth Lord Lucas of Chilworth moved Amendment No. 24:
Page 108, line 7, leave out from ("(i)") to ("any") in line 10 and insert ("after the word "include" there shall be inserted the words "in the case of those mentioned in paragraph (a)" and at the end there shall be added the words "and in the case of London Regional Transport,"")
The noble Lord said: My Lords, this is a technical drafting amendment, in that section 38 of and Schedule 4 to the Animal Health Act 1981 provide that the London Transport Executive and wholly owned subsidiaries must, if directed by the Minister of Agriculture, provide food and water at stations. It goes on to say when the food and water must be supplied and who must pay for it. The Bill as drafted makes the necessary consequential amendment to Section 38 of the Animal Health Act so as to refer to LRT and any subsidiary of theirs, but it does not make clear the
54
application of the related Schedule 4 to that Act. The amendment remedies this defect. I beg to move.
On Question, amendment agreed to.
Lord Lucas of Chilworth Lord Lucas of Chilworth moved Amendment No. 25:
Page 109, line 14, at end insert—
("The Food Act 1984
30.—(1) In section 11(4)(a) of the Food Act 1984 (vehicles whose detention by an officer of a council is not authorised under that section), for the words from "Boards" to "subsidiaries" there shall be substituted the words "transport authorities mentioned in subsection (4A)".
(2) the following subsection shall be inserted after section 11(4)—
"(4A) The transport authorities referred to in subsection (4)(a) are—

(a) the Boards established by the Transport Act 1962 and any wholly owned subsidiary of any of those Boards; and

(b) London Regional Transport and any subsidiary (whether wholly owned or not) of London Regional Transport (within the meaning of the London Regional Transport Act 1984).".

31. In Schedule 11 to that Act (repeals and revocations), after the entry relating to the Health Services and Public Health Act 1968 there shall be inserted the following words—

1968 c. 73.

Transport Act 1968.

In Schedule 16, paragraph 7(2)(d)."")

The noble Lord said: My Lords, with Amendment No. 25 I believe that it would be helpful to the House if I spoke also to Amendment No. 27.
Amendment No. 27: Page 115, line 58, at end insert—

("1984 c. 00.

The Road Traffic Regulation Act 1984.

In Schedule 13, paragraph 8.

1984 c. 00.

The Food Act 1984.

In schedule 10, paragraph 16.")

My Lords, both these amendments are technical amendments to take account of consolidation Bills. They involve no change in the law. The first amendment refers to the Food Bill. This is a consolidation Bill which is expected to receive Royal Assent with the London Regional Transport Bill. It consolidates and repeals, among other things, Section 11(4) of the Food and Drugs Act 1955. We are also repealing, by means of the second amendment, a provision in the Road Traffic Regulation Act which makes a textual amendment to Section 1 of the 1969 Act. That section is of course repealed in this Bill, so the amending provision becomes redundant. I beg to move.
On Question, amendment agreed to.
Schedule 7 [Enactments repealed]:
Lord Lucas of Chilworth Lord Lucas of Chilworth moved Amendment No. 26:
Page 113, line 38, column 3, at end insert—
("the Common Council").
The noble Lord said: My Lords, this amendment corrects a minor error in the Bill. The Bill as drafted mistakenly repeals the definition of "the Common Council" in the 1969 Act. That definition is still needed for Section 30 of the 1969 Act, which deals with development control on metropolitan roads and which is not repealed by this Bill or by the Road Traffic Regulation Bill. The amendment therefore saves it from repeal. I beg to move.
On Question, amendment agreed to.
Lord Lucas of Chilworth Lord Lucas of Chilworth moved Amendment No. 27:
[Printed above.]
The noble Lord said: My Lords, I have already spoken to this amendment. I beg to move.
On Question, amendment agreed to.
5.45 p.m.
Lord Lucas of Chilworth: My Lords, I beg to move that this Bill do now pass. We now approach the end of our deliberations on a very important Bill. First, I should like to thank my noble friends Lord Avon and Lord Trefgarne for the very great contribution they have made to these debates on behalf of the Government. May I also thank the noble Lords, Lord Underhill and Lord Tordoff, for the very courteous and constructive way in which they have spoken for the Opposition parties. Let me not forget, either, the very substantial contribution made by the noble Lord, Lord Carmichael of Kelvingrove, who I believe was speaking from the Opposition Front Bench for the very first time on transport matters. May I thank, too, all other noble Lords and noble Baronesses on all sides of the House who have taken part in our debates. Thirty-three of them have taken part in those debates during the last few weeks. I am glad that we have been able to accept the spirit of at least some of their proposed changes, and have thus improved the Bill.
When my noble friend Lord Trefgarne introduced the Bill at Second Reading on 1st May be dealt with two major points of principle. The first was the importance, for reasons of transport policy, of bringing the organisation of bus, Underground and rail services in London more closely together. In the Government's view, this on its own justified the need for a Bill of this kind. The other major area discussed by my noble friend was that of accountability. Opposition parties, both here and in another place, have consistently argued that the new arrangements will adversely affect local democratic accountability.
I do not expect to convert at this late stage those who remain unconverted to the Government's point of view on these matters. If the debate on these aspects of the Bill has been a little sterile at times, this may perhaps reflect the somewhat abstract nature of the ideas and (dare I say it?) the way in which they have been affected by other topical aspects of local government reform. But if there has been an unexpected but welcome feature of the Bill it is the way in which a good deal of the debate has focused on issues at a more personal and humane level. Much time has been spent on the transport problems faced by the disadvantaged: those who are elderly, frail or disabled. I think all noble Lords will be grateful, both to my noble friend Lord Avon particularly for the sympathetic and understanding manner in which he dealt with these clauses, and also to the noble Baroness, Lady Lane-Fox, whose input was of such importance.
We have introduced, very largely at the instigation of my noble friend Lady Gardner of Parkes, some innovative and, I believe, generally welcomed clauses dealing with measures to combat fraudulent travel. I am most appreciative of the expeditious manner in which these clauses have been dealt with, introduced
56
as they were at such a late stage in the Bill. In these two particular areas I believe that the Bill has been substantially improved in its passage through Parliament.
I wish to take up the rest of this very short speech by dealing with one of the other pervasive themes of our debates. It concerns finance. Noble Lords opposite have criticised the way in which the Bill emphasises the primacy of LRT's financial duty. The Government have never argued that in setting financial targets for London Regional Transport people's needs for public transport will be ignored. Indeed, we have established in the Bill a regime for planning and consultation quite unparalleled in nationalised industry legislation. We have done this precisely to ensure that the financial targets and constraints within which LRT will have to operate do take proper account of London's needs. The primacy of the financial duty simply means that once financial targets have been set on the basis of all the relevant considerations then LRT must live within them. There is nothing draconian or sinister in this. It is no more than the good husbandry proper to any major corporation, just as it is to every family household.
But there is more to it than that. London Transport has for many years now been run on the principle of high subsidies and low fares. There is nothing wrong with low fares per se. There is nothing wrong with low prices generally, provided that they are not achieved at the expense of massive amounts of ratepayers' money. If low prices are the results of efficient production, that is fine; but as has been shown time and time again when public subsidy is freely available, especially when it is available to monopolistic suppliers, efficiency suffers and costs rise. That leads to ever higher subsidy, and so the vicious circle continues.
I believe that with this Bill we now have a new chance to break out of this circle. We shall achieve it by encouraging competition where that is possible and by introducing stronger financial and management disciplines. That will be to the benefit of those who travel and those who provide the finance. This is a Bill which I believe spells new hope for those who live and work in London, the capital city, and also those who visit London, I believe it merits your Lordships' support, and I beg to move that the Bill do now pass.
Moved. That the Bill do now pass.—(Lord Lucas of Chilworth.)
Lord Underhill: My Lords, I am grateful to the noble Lord, Lord Lucas of Chilworth, for his kind references, particularly to my noble friend Lord Carmichael of Kelvingrove, who, as the Minister rightly said, has been dealing with a transport Bill with me for the first time. I am also grateful to my colleagues and noble friends who moved amendments and made contributions during the passage of this Bill.
I should also like to reciprocate, not just formally but meaningfully, to thank the three noble Ministers— Lord Lucas of Chilworth, Lord Trefgarne and Lord Avon— for the courteous way in which they have handled all the debates during the passage of this Bill through its various stages. I also thank them for the attention they have given when they have promised to take matters back to look at them. They

57
have done so, and have written to a number of noble Lords to show that they have carried out their undertakings. It is unfortunate that those kindly attitudes did not have a better Bill on which to be exercised.
Although we have made some useful amendments to the Bill, it still remains a Bill in which London Regional Transport will be isolated from other highway matters, traffic management and planning, and. frankly, isolated from all the other services which a local authority has to provide and which should be considered while discussing transport matters.
As the Minister said, there are fundamental differences. There is a difference of attitude to public transport. The main criterion is to be financial primacy. We have not said that we shall not take account of financial matters. Of course we have to do so; but the question is how we approach it. The Government have refused at all stages to write into the Bill a duty to meet needs. There has been a refusal to write into the Bill social benefits. That is the same sort of opposition we had throughout consideration of the Transport Act 1983, when none of this was written into the Bill at all. One cannot have an efficient transport system unless regard is paid to needs; otherwise, there will be minimum standards and the financial primacy will be the thing that matters.
I shall not go into the argument on the benefits of low fares, although the noble Lord the Minister referred to it. Figures show that low fares not only benefit the passengers but also affect non-travellers; they affect commercial undertakings because they affect staff getting to work; and they affect the big stores in city centres because they affect people travelling there. These are the social benefits that must be considered. They were rejected on this Bill as they were on the 1983 Bill.
We regret, too, that there is no local authority input into the work of the new LRT board. That is unique in any nationalised undertaking: that two-thirds of the costs of work in which the local authorities have no input has to be met by the local authorities. No reference was made to that when the Minister moved the Motion, That the Bill do now pass.
The board will be appointed by the Secretary of State, and we have been told quite clearly that he will have who he wishes. It is to be managerial and commercial, yet we have shown in amendments that this managerial and commercial board will not be allowed to decide its own attitude to establishing separate companies for buses and separate companies for the Underground, and will not be able to take its own decisions on tendering or on manufacturing. These have been written into the Bill in advance. A self-respecting managerial board might query having to undertake them, but this is laid down and the Bill does not give them freedom to take decisions.
There are too many indications in this Bill and in speeches made by the Ministers to encourage independent operators on road service licences. These are in line with reports of further deregulation from the statements made by the Secretary of State and reported in the press. We should remember that London Regional Transport has a duty to operate on principles that will be determined by the Secretary of
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State. With his declared intention to encourage further deregulation, naturally we are worried about the effects on London Regional Transport. That is reflected also in the refusal, as we had this afternoon in an amendment, to permit the passengers' committee to look at the whole of London Transport services— those provided by LRT or bodies with which it is in agreement, and those which are promoted by independent operators.
We are grateful for the assurances given by Ministers on various matters, but I must repeat what I have said before: that it would be far better if assurances were written into the Bill. Present Ministers may not be in their present posts— I hope they will not be there too long— and a different attitude might prevail upon even other Conservative Government Ministers. We must reckon— and I am certain that any noble and learned Lords here will agree— that the courts will always say, "We do not care what Ministers have said: we do not care what Hansard has said; what matters are the words written into the Bill". While we appreciate the statements and assurances given on many matters by the Ministers, they are not good enough. That is why we went to the vote today on the question of the disabled. I am only, sorry that the amendment was not carried.
We agree with the Minister that it is good that we have had the penalty fares amendments brought forward. Fortunately, it has worked out all right, but the introduction of those seven pages of amendments at Report stage could have presented problems. Fortunately, the wording was such that there is general acceptance for them. That shows the value of a second Chamber, that after having gone all the way through the other House we have seven pages of amendments on a really important matter and on which we are all agreed.
On these Benches we are worried about the future development of LRT to meet transport needs. Of course we want efficiency, but needs have to be met and what we have to do as citizens is to decide how much we are prepared to pay so that the needs shall be met. We should not decide in advance before we know what the needs are.
Lord Tordoff: My Lords, I am conscious of the fact that there is much heavy business for noble Lords to deal with later, but I feel I must say a word or two at this stage. May I join in the thanks to the Government Front Bench for the extremely courteous way in which they have handled this Bill, The quantity of their response, as well as the quality, has been impressive. I do not mean that in any cynical way at all. I remember a year ago, when we were dealing with the 1983 Bill. Because of other pressures upon the Government Front Bench at that time, such as a pending general election, there was a tendency for them to have to press things through against an unspoken timetable.
The contrast this time has been very impressive. We are all grateful to the three Ministers who have dealt with the Bill and who have given the House the courtesy of their attention. Perhaps it is a pity that the Back-Benches are fuller at this time than they have been at any time during the discussions on the Bill. I suspect that if noble Lords had had a chance to listen to the arguments we have had on some of the

59
amendments we might have come somewhat closer to winning one or two of those we should like to have won. We have, however, improved this Bill only very slightly. I think that the noble Lord, Lord Teviot, is to be congratulated on raising the whole question of stopping places. It was a very important point to raise and I am glad that the Government were able to deal with it.
We have made progress on cheap fares for the elderly and disabled in relation to the reserve provisions within the Bill, and the House must be grateful to the noble Lord, Lord Pitt, for the work he put in on those amendments.
The penalty clauses came, as everybody has said, at a very late stage. I hope that, thanks to interventions by the noble and learned Lord, Lord McCluskey, and others, we have now got them right. It is worrying that on a subject as important as that, where individual rights are concerned, we perhaps have not had as much time as we should have liked to deal with those matters, and perhaps people outside your Lordships' House have not yet had their eyes turned towards some of the problems that could occur within the penalty clauses. However, I think we have given them as clear a scrutiny as we could, and so far as one can see, they are as right as we can make them. Certainly I think we all agree on the need for the penalty clauses and I consider the Government have been wise to introduce them into the Bill.
I congratulate the noble Lord, Lord Underhill, and his noble colleague Lord Carmichael on the amount of work that they have put into all stages of this Bill. It has been a marathon task. I think that he has perhaps deserved better on some of the amendments that were put down. Nevertheless the amount of work that they have put into this Bill, as the noble Lord himself said, supports the need for a second Chamber, as does the fact that, after a long period in another place, there is still a need for 65 amendments at the Committee stage, all of them carefully debated and carefully responded to.
But we have not, I am afraid, had much movement. We have had assurances on the dial-a-ride. I sincerely hope that in practice those assurances will provide the degree of support needed for the disabled sectors of our community in Greater London. I am afraid that I really have my doubts, since I think something should definitely have gone into the Bill there.
We have had no movement on the dreaded integration question, and that saddens me because it is worrying that, underlying this Bill—as I have said so many times, and I say again now—is a tendency towards fragmentation. I referred to it as disintegration of London Transport. That is perhaps a little strong; but there is a danger of fragmentation when the private sector is to be allowed to tender in respect of various parts of the undertaking where there is separation of the bus and Underground management. All these things seem to me to move away from the ideal of having a properly integrated London passenger transport system which, as the noble Lord, Lord Underhill said, is also integrated into other facets of local government activity in Greater London.
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We have had no movement at all on the question of duties which should be written into the Bill. I was unable to get any movement on the question of bringing the National Bus Company into various clauses of the Bill. I am extremely worried about the Government's attitude to that because I fear that coming events may be casting shadows before them and that before we are very much older the National Bus Company might be before the court of privatisation to a greater degree that it is at the moment. I think that would be extremely sad in terms of the integration of the activities of the London country bus services with London Transport.
We were unable to move the Government on the question of enforceability before the courts. On the questions of planning and co-ordination, we obtained very little movement. On the passengers committee I fear that, as I said at Second Reading, it will be a toothless watchdog not able even to watch over the whole of the London Transport area, as we saw with the amendment that was defeated earlier this afternoon.
Of course, if you accept the Government's concept of London passenger transport, these things are inevitable. I think that that concept has become much clearer as we have gone through the Committee, Report, and now Third Reading stages of the Bill. It is a concept which is totally foreign to the one we have on these Benches and, similarly, to the one that is held in the Labour Party, though at the end of the day we should probably put up different models. Very frequently, I have spoken in this Chamber in support of amendments by the noble Lord, Lord Underhill. That does not mean to say that at the end of the day the model for London Transport which would be produced by him and the one that would be produced by my party would be identical: they would not. But I think that they would have in common a belief that the services of a public passenger transport system should not be totally dictated from the Treasury, in terms of finance.
I believe that the picture which the Government see is not a pretty view. Certainly we all have a belief in having a more efficient public transport system. I do not think anybody, in any part of the House, would suggest that at the moment London Transport is as efficient as it could be. Introducing a degree of competition is something with which I would not quarrel. What we want at the end of the day, because of the relationship between public transport and the whole quality of life in London, is a public transport system which will encourage the maximum number of people to use it so as to get them out of their motor cars and so reduce the congestion on the streets of Greater London. Instead of that, the Government have made it clear that they regard cost as the overriding criterion, despite the fact that they must know that the level of subsidy in London, though not insignificant— it is a very large amount of money— is nothing like as high as subsidies in other capital cities of the world.
I suppose the point which will astonish supporters of the Government outside is that in order to create efficiency in London Transport they have gone down the road of nationalisation. It seems to me there is something a little ironic about that. But it is due to going down that road of nationalisation that the

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checks and balances that we had in the 1983 Act will not apply to this Bill when it becomes an Act. Because of that the access of the public to facts will be more restricted than it would have been had one of the amendments of the noble Lord, Lord Underhill, been carried. We are retaining the myth that somehow members of another place are going to provide a reasonable check on what is happening regarding London Transport. Frankly, I do not think that that will happen. The number of London MPs are overwhelmed by people from outside London and, on a practical basis, the amount of time that is needed to challenge the power of the Secretary of State in this matter is simply not available in the House of Commons.
The Government are obviously using this as a route to further privatisation and, as I have already said, the problem of fragmentation immediately comes to mind. I fear the disintegration of London Transport. I fear failure of co-ordination. I fear rises in fares which will make London passenger transport increasingly unattractive to the travelling public, and that, in turn, will mean more cars, more congestion. This Bill is an opportunity missed, and I am sad to see it go on its way in this state.
Lord Plummer of St. Marylebone: My Lords, perhaps I may say a few words. When I was Leader of the GLC I took London Transport into the reluctant arms of the GLC, but I never felt that it was absolutely right that it should be kept there. I believe that in the end this Bill will make an improvement to London Transport and that the staff of London Transport, together with the managerial staff, who have been constantly interfered with over a number of years, will now have the opportunity to see that the undertaking runs in the right way. Now that the Government have the responsibility for public transport I hope that it will be accompanied by improvements to the road system in London. I congratulate the Ministers on the way in which this Bill has gone through.
On Question, Bill passed, and returned to the Commons with the amendments.

Rates Bill
6.10 p.m.
Read a Third time.
Clause 1 [Power to prescribe maximum rates and precepts]:
The Minister of State, Department of the Environment (Lord Bellwin)The Minister of State, Department of the Environment (Lord Bellwin) moved Amendment No. 1:
Page 2, line 10, after first ("to ") insert ("(a)").
The noble Lord said: My Lords, in speaking to Amendment No. 1, I should like to refer also to Amendments Nos. 2, 25, 26, 27, 28 and 29.
Amendment No. 2: Page 2, line 12, at end insert—
(b) a levy made on the rating authority under section 13 of the London Regional Transport Act 1984.").
Amendment No. 25: Schedule 1, page 15, line 41, leave out ("the London Transport Executive") and insert ("London Regional Transport").
Amendment No. 26: Schedule 1, page 16, line 45, leave out ("exercise by a transport Board") and insert ("exercise—
(i) by the British Railways Board or the British Waterways Board").
Amendment No. 27: Schedule 1, page 16, line 47, at end insert—
("; or
(ii) by London Regional Transport of any powers conferred by paragraph 9(2) or 12(1) of Schedule 2 to the London Regional Transport Act 1984.").
Amendment No. 28: Schedule 1, page 19, line 16, leave out ("and").
Amendment No. 29: Schedule 1, page 19, line 18, at end insert—("; and
(c) paragraph 3 of Schedule 4 to the London Regional Transport Act 1984.").
I must ask for the indulgence of the House, since all these amendments assume that the London Regional Transport Bill has been enacted. Since that Bill has now had its Third Reading and now been passed by your Lordships' House, I trust that I am not presuming too much.
The purpose of the two amendments to Clause 1 is to regularise the position concerning London boroughs as regards the levy to be imposed under that Bill by my right honourable friend the Secretary of State for Transport. As your Lordships will know from the debate we had earlier, LRT is to be funded partly by Exchequer grant and partly by a levy issued to all the rating authorities in London: that is, all the London boroughs.
I am sure your Lordships will agree that it would not be right to expect the LRT levy to be funded from within a rate limited authority's expenditure level or rate limit, and these amendments to Clause I will allow that levy to be excluded from any maximum, thus putting it on a par with the precepts of the major precepting authorities and the Receiver of the Metropolitan Police.
The other amendments (all to Schedule 1) are consequential upon the setting up of London Regional Transport in place of the London Transport Executive and do not, therefore, need further explanation. I beg to move.
Baroness Birk: My Lords, I am rather worried about one of the comments made by the Minister. The second amendment refers to,
"a levy made on the rating authority under section 13 of the London Regional Transport Act 1984".
I know that the Bill has now been passed by this House, but it appears to me that this amendment is already assuming Royal Assent, which the Bill certainly has not yet received.
Lord Bellwin: My Lords, that is why, in introducing the amendments, I asked for the indulgence of the House in the obvious interest of not presuming Royal Assent, but on the basis that the Bill had received a Third Reading and had now been passed.
Baroness Birk: Yes, my Lords, I heard and understood what the Minister said. It seems to me that it is a very dangerous precedent which is probably occurring more and more. The fact that there is a tremendous Government majority in the Commons which takes all this for granted is rather disturbing. The Minister explained it— and I am not blaming him for it— but I think it is a worry that it should be so

63
assumed. Asking for indulgence is not the same thing as assuming that the Bill has received Royal Assent, or that it will receive Royal Assent, but I still maintain that the Bill has not received Royal Assent. This should have been managed in a different way and, if necessary, the amendment should have been put in when the Commons consider the Lords' amendments. That is the place for it, not here in this House.
Lord Bellwin: My Lords, I understand that the Public Bills Office would not have admitted this if there was anything improper. I say again that I put the matter to your Lordships in what I hope was a proper way. It is on that basis that I ask your Lordships to accept the amendment.
On Question, amendment agreed to.
Lord Bellwin Lord Bellwin moved Amendment No. 2:
[Printed above.]
The noble Lord said: My Lords, I have already spoken to this amendment. I beg to move.
On Question, amendment agreed to.
Clause 2 [Designation of authorities]:
Lord Bellwin Lord Bellwin moved Amendment No. 3:
Page 2, line 37, leave out front beginning to ("subject") in line 39 and insert—
(" (3) If the total of relevant expenditure as estimated for the purposes of the Rate Support Grant Report for any financial year (other than the first) in which this section is in force is greater or smaller than the total of relevant expenditure as estimated for the purposes of the Rate Support Grant Report for the previous financial year, the Secretary of State shall by order substitute for the amount for the time being specified in subsection (2)(a) above (whether £l0 million or an amount previously substituted under this subsection) an amount which is proportionately greater or smaller except that any substituted amount may be rounded to the nearest £100,000.
(3A) The power to make an order under subsection (3) above shall be exercisable by statutory instrument.").
The noble Lord said: My Lords in speaking to this amendment I should like to link it to Amendment No. 24, which is consequential.
Amendment No. 24: Clause 19, page 13, line 10, after ("1980") insert ("and "relevant expenditure" has the meaning given in section 54 of that Act").
The amendments provide for the £10 million cut-off level for exclusion from the selective scheme to be updated annually. Your Lordships may remember we discussed a similar amendment, tabled by my noble friend Lord Sandford, at Report stage. I said at the time that although I accepted the principle, I could not accept my noble friend's amendment because I believed that the timing implicit in that amendment was wrong, and also because the formula proposed to calculate the amount of the updating would be dependent upon the continuation of expenditure targets.
This present amendment, Amendment No. 3, is the result of the undertaking I gave to my noble friend Lord Sandford to bring forward an amendment which met his objective of providing for the routine updating of the £10 million limit that is both workable and is based on expenditure definitions which are intrinsic to
64
the rate support grant arrangements in the 1980 Act. This amendment provides that after the first year of operation when the limit will be £10 million, thereafter that limit would be adjusted annually in proportion to the increase or decrease in the total of relevant expenditure as detailed in succeeding rate support grant reports. The increase or decrease would be rounded to the nearest £100,000, thus preserving a feature of the amendment of my noble friend Lord Sandford, to avoid unnecessary precision in setting the cut-off level.
By accepting this amendment the value of the present value of the £10 million exemption will be maintained. The large number of smaller authorities will therefore continue to be excluded from rate limitation. This will meet the Government's objective of continuing to ensure that scarce resources are not devoted to rate limiting authorities which made only a tiny impact on the total overspending of local government. And we shall reassure those authorities who were concerned that the value of the £10 million exemption would be eroded by inflation.
Amendment No. 24 is consequential and provides that the definition of relevant expenditure is included in the Bill. I beg to move.
Lord Sandford: My Lords, I am most grateful to my noble friend for these two amendments. They are the last in a series of amendments which we have considered and debated at each of the previous stages of the Bill. My original amendment was designed to have the effect of ensuring that the £10 million threshold continued to have the same effect on the smaller local authorities after the passage of the Bill as it had when the Bill was presented to Parliament. I think that is the effect it now has.
If I may say so, the result is that the great majority of the district councils will be exempted from the operation of Part I, which is welcome in itself. It is also welcome because, as my noble friend says, it will have the effect of not wasting a lot of the officials' time in the Department of the Environment and in local government by going over the affairs of these smaller authorities.
Perhaps I may correct something which my noble friend said. The spending of the Association of District Councils has no effect, or has not for the last two years, on the economic policies of the Government because in aggregate they are not overspending at all.
Baroness Fisher of Rednal: My Lords, can the noble Lord give us an example of an authority which will come into this category: and how many will come into it? Can be give us one or two names so that we know what it is all about? It is a little bit woolly. When we are talking about the metropolitan counties, everbody knows who they are. But may we have an instance of districts to which it might apply, and also how many he thinks that it will apply to?
Lord Bellwin: My Lords, the noble Baroness gives me quite a task! I understand that it is all the shire districts in the country, apart from 21. As the song says, "Where do I begin?" I think that is really the point the noble Baroness is seeking: it is all but 21. If

65
my memory serves me right, the total is 296, and it is all but 21 of those; so it affects a great number of authorities. If the noble Baroness would like me to, I can have a shot at reeling off the names of some of the shire districts; but I think that she is probably satisfied with what I have said.
Baroness Fisher of Rednal: My Lords, with the indulgence of the House, may I ask the noble Lord to name some of the 21?
Lord Bellwin: My Lords, that it not too hard. They include authorities such as Leicester, Nottingham— dare I say it?— Portsmouth and Plymouth. It is that kind of authority.
Lord Sandford: My Lords, may I congratulate my noble friend? That is a very good effort.
On Question, amendment agreed to.
6.21 p.m.
Baroness Birk Baroness Birk moved Amendment No. 4:
Page 3, leave out line 4 and insert ("the subject of an order under section 4 of this Act specifying a maximum rate for the financial year in which a report is laid under subsection (1) of this section").
The noble Baroness said: My Lords, this amendment and Amendment No. 7 deal with aspects of Amendments Nos. 4 and 13 tabled by the Government on Report.
Amendment No. 7: Page 3, line 31, leave out from ("been") to end of line 32 and insert ("the subject of an order under section 4 of this Act specifying a maximum rate for the financial year preceding that in which a maximum determined under subsection (1) of this section is to have effect").
The House will remember that on Report I drew attention to the fact that these were very important and substantial amendments, although they had been put down rather late on the Marshalled List. The most important thing was the effect of them. The Minister apologised for the lateness of their being put down. He said that he would rather have the provision in the Bill and then, if he felt that there was any change he could make, he would do so and let me know. That put me in the position of not being able to do much more about it at that stage, although, as I am afraid I rightly suspected, no joy came from the very polite letter that he then wrote to me.
The whole Bill is so complicated that it is difficult to make anything appear easy or clear. The position now is that if an authority has been designated in the previous year, special rules may apply to it for the purposes of designation the following year and for determining its expenditure limit. On Report, where the provision arrived very late, I expressed concern which was echoed by the noble Lord, Lord Kilmarnock, from the Alliance Benches.
This enlargement in the number of sets of principles available to the Secretary of State to designate authorities gives him powers even wider than the Bill already contained before the amendments were introduced. Unfortunately, the amendments are now part of the Bill. The new situation is undesirable, as the previous panoply of powers open to the Secretary of State had already been the subject of a great deal of criticism and concern from all sides. What those changes do is to facilitate a permanent hit list by the
66
extension of discretion. Whatever an authority does, it cannot escape the Government's shackles. Any loophole has now been closed.
Even if the Government were correct in saying that equity demanded that different rules should apply to those authorities which had reduced expenditure because they were forced to do so, the criterion to adopt should not be designation, as the amendment moved on Report stipulated, but final rate limitation. These amendments deal only with this last point. The question is whether it should be designation or forced rate limitation that makes an authority subject to special rules in the following year. We believe that it should be the enforced rate limitation.
When he wrote to me on 11th June, the Minister said:
"Whilst designation is the first step in the process of rate limitation, it is the point at which it becomes clear that an authority will be required to reduce its spending".
The point is that it is not clear at that stage, because designation is the first step in rate limitation. At that stage the Secretary of State will use principles to determine those authorities whose expenditure appears to him,
"to be excessive having regard to general economic conditions".
which are stated in the Bill. One safeguard— perhaps the only safeguard— of acting in accordance with principles is that the Secretary of State will have to use only the information available to him in budget returns, and so on, to arrive at the conclusion that an authority's spending is prima facie excessive.
The Bill recognises that designation is very much a first shot by establishing the process of redetermination in Clause 3, under which a designated authority may put to the Secretary of State its case for a higher expenditure limit. The Secretary of State may then take into account the peculiar circumstances of that authority; for instance, why it is that the City of London, if it were to be designated, spends at 247 per cent. above GREA compared with neighbouring Hackney and Islington which can provide services at only 79 per cent. and 50 per cent. above GREA.
As a result of derogation, the Secretary of State may give an authority a higher expenditure limit— perhaps one involving no reduction in expenditure at all. But even if a designated authority were to be let off, it must still be the subject of a rate limitation notice. The only way then of defining those authorities against which the case for overspending is more than prima facie is by reference to the authorities which would be the subject of a rate limitation order under Clause 4. That is why the power to redesignate in accordance with special principles should be not according to whether or not the authority has been designated but according to whether or not the authority has been the subject of a rate limitation order.
I apologise to the House for that rather lengthy explanation, but it really is the fault of the way the Bill is drafted and also of the amendments which were put in on Report and which many of us find so objectionable. I beg to move.
Lord Bellwin: My Lords, these two amendments seek to modify the changes we made at Report stage of the Bill, as the noble Baroness said. At that time we

67
argued that, where authorities had been designated for rate limitation in one year, the Secretary of State should be able to use different principles in the following year to decide whether to designate those authorities and to decide on how to set an expenditure level for them. The problem for which we were providing was that in the second or subsequent year of the selective rate limitation scheme, authorities which had been limited in the previous year would have had their expenditure restrained as a result of having been rate limited. For example, we would expect them to spend at or close to their expenditure target; and, if we wanted to have regard to spending against targets as one of the criteria of selection in the next year, those authorities might then evade rate limitation because of a short-term improvement in their performance which had been forced on them rather than because their spending had been reduced to a significantly lower level or because they were making efforts on their own account to improve their performance.
We do not think it would be sensible to remove from rate limitation those authorities simply because of the evidence of a single year when, on the evidence of the GRE test, for example, it remained a high spender or it had a recent history of systematically increasing its spending over a run of years.
The case for having a power to use different principles in setting expenditure levels for previously designated authorities was slightly different. If reselected, authorities would enter rate limitation with a history of having made some economies. Those authorities may, therefore, find it more difficult to achieve further savings than authorities selected for the first time.
We wanted to be able to take account of that when setting the expenditure level. The amendments now before us would allow the use of different principles only in cases where a designated authority had been set a rate or precept maximum by order under Clause 4(4). This would be the circumstance where, after considerable discussion, the Secretary of State and the authority cannot agree on the final rate limit and it has to be put to the House of Commons to be determined in a statutory instrument.
The argument is that where the authority acquiesces in the limit proposed by the Secretary of State it should be treated as if it was the same as all other authorities which have not been rate limited. I do not accept that argument. It is not the way in which the rate limit is imposed which sets such authorities apart from other authorities, but the fact that a limit has been set. It is, of course, possible that not all the designated authorities will have a rate limit imposed on them by order. Indeed, once any discussions between the authority and the Secretary of State about the expenditure level have been settled, it may be possible for many of the designated authorities to accept a conversion of that expenditure figure into a rate figure, since that would be largely mechanical. The operative decision which will affect the way in which selection for a subsequent year is approached will be the setting of the expenditure level.
I have listened to the noble Baroness and her argument that designation in itself should not be sufficient to justify the use of different principles. That
68
argument rests on the fact that the designation reports will not be approved by the House of Commons. We have debated at length the question of whether the decisions of the Secretary of State should be subjected to some specific statutory approval or whether— as I have argued throughout— the procedures of the other place to oversee the actions of the Executive are adequate for this purpose. The act of designation is a first step in the process of rate limitation. Once designated authorities have a rate limit set for them, it is that fact which will set them apart in considering their expenditure performance in the future.
It has been argued that only authorities which have had a rate limit set by order are actually being forced to make savings— other authorities in acquiescing in the Secretary of State's rate limit, should be entitled to take credit for the savings which result. I do not agree with that and I have explained why.
I cannot accept these amendments. I think that, in resting on the designation procedures, we have chosen a clear and unambiguous point of reference for deciding when it is appropriate to treat one group of authorities as substantially different from another for these purposes. With that explanation, I hope that your Lordships will understand why we cannot accept the amendment.
Baroness Birk: My Lords. I found the Minister's reply very unsatisfactory. To say that this is clear and unambiguous I thought was really using way out language to describe any part of this Bill and certainly these amendments. When they were moved on Report and I saw them on the Order Paper. I was extremely concerned about them. When the Minister said he had looked at them. I hoped, as I said earlier— although without much hope— that he might do something about them, but he has not. As I said before, what this has done is shackled authorities with an ever tighter noose. Therefore I shall do what, in order to enable the Minister to have another chance, I did not do on Report: I will press this to a Division.
6.33 p.m.
On Question, Whether the said amendment (No. 4) shall be agreed to?
Their Lordships divided: Contents, 79; Not-Contents, 108.

DIVISION NO. 3

CONTENTS

Airedale, L.

Elwyn-Jones, L.

Amherst, E.

Ennals, L.

Ardwick, L.

Evans of Claughton, L.

Attlee, E.

Fisher of Rednal, B.

Aylestone, L.

Gaitskell, B.

Barnett, L.

Gallacher, L.

Beaumont of Whitley, L

Gladwyn, L.

Beswick, L.

Graham of Edmonton, L.[Teller.]

Birk, B.

Blyton, L.

Grey, E.

Boston of Faversham, L.

Hampton, L.

Brockway, L.

Hanworth, V.

Brooks of Tremorfa, L

Harris of Greenwich, L.

Bruce of Denington, L

Hatch of Lusby, L.

Cledwyn of Penrhos, L

Hirshfield, L.

Collison, L.

Houghton of Sowerby, L.

David, B.

Howie of Troon, L.

Dean of Beswick, L.

Jacques, L.

Denington, B.

Jeger, B.

Diamond, L.

Jenkins of Putney, L.

Donnet of Balgay, L.

John-Mackie, L.

69

Kilmarnock, L.

Rochester, L.

Lovell-Davis, L.

Seear, B.

McCarthy, L.

Sefton of Garston, L.

McCluskey, L.

Stallard, L.

McIntosh of Haringey, L.

Stewart of Alvechurch, B.

Mayhew, L.

Stewart of Fulham, L.

Meston, L.

Stoddart of Swindon, L.

Mishcon, L.

Stone, L.

Molloy, L.

Strabolgi, L.

Northfield, L.

Taylor of Blackburn, L.

Ogmore, L.

Taylor of Mansfield, L.

Oram, L.

Tordoff L.

Peart, L.

Underhill, L.

Phillips, B.

Wallace of Coslany, L.

Pitt of Hampstead, L.

Wedderburn of Charlton, L.

Ponsonby of Shulbrede, L. [Teller.]

Whaddon, L.

Winterbottom, L.

Rea, L.

Wootton of Abinger, B.

Rhodes, L.

Young of Dartington, L.

Roberthall, L.

NOT-CONTENTS

Airey of Abingdon, B.

Lucas of Chilworth, L.

Alexander of Tunis, E.

Lyell, L.

Allerton, L.

McAlpine of Moffat, F.

Auckland, L.

McAlpine of West Green, L.

Avon, E.

McFadzean, L.

Bauer, L.

MacLehose of Beoch, L.

Belhaven and Stenton, L.

Macleod of Borve, B.

Bellwin, L.

Mancroft, L.

Belstead, L.

Margadale, L.

Brabazon of Tara. L.

Massereene and Ferrard, V.

Bruce-Gardyne, L.

Maude of Stratford-upon-Avon, L.

Caithness, E.

Campbell of Alloway, L.

Minto, E.

Campbell of Croy, L.

Molson, L.

Chelwood, L.

Mottistone, L.

Cockfield, L.

Morton of Lindisfarne, L.

Cottesloe, L.

Napier and Ettrick, L..

Crathorne, L.

Nugent of Guildford, L.

Croft, L.

Onslow, E.

Cullen of Ashbourne, L.

Orkney, E.

Davidson, V.

Pender, L.

De La Warr, E.

Penrhyn, L.

Denham, L. [Teller.]

Peyton of Yeovil, L.

Dilhorne, V.

Platt of Writtle, B.

Eccles, V.

Renton, L.

Ellenborough, L.

Renwick, L.

Elles, B.

Rodney, L.

Elton, L.

Romney, E.

Fairfax of Cameron, L.

St. Aldwyn, E.

Faithfull, B.

St. Davids, V.

Fanshawe of Richmond, L.

Saint Oswald, L

Fortescue, E.

Saltoun, Ly.

Fraser of Kilmorack, L.

Sandford, L.

Gainford, L.

Savile, L.

Gardner of Parkes, B.

Sempill, Ly.

Gibson-Watt, L.

Shannon, E.

Glanusk, L.

Shaughnessy, L.

Glenarthur, L.

Skelmersdale, L.

Gowrie, E.

Spens, L.

Grantchester, L.

Strathcona and Mount Royal, L.

Gridley, L.

Hailsham of Saint Marylebone, L.

Swinton, E. [Teller.]

Teviot, L.

Halsbury, E.

Tranmire, L.

Hankey, L.

Trefgarne, L.

Hayter, L.

Trumpington, B.

Home of the Hirsel, L.

Vaizey, L.

Hood, V.

Vaux of Harrowden, L.

Hornsby-Smith, B.

Vickers, B.

Hylton-Foster, B.

Waldegrave, E.

Ingrow, L.

Westbury, L.

Kitchener, E.

Whitelaw, V.

Lane-Fox, B.

Windlesham, L

Lauderdale, E.

Wynford, L.

Lindsey and Abingdon, E.

Young, B.

Long, V.

Resolved in the negative, and amendment disagreed to accordingly.
Clause 3 [Expenditure levels]:
6.43 p.m.
Lord Ennals Lord Ennals moved Amendment No. 5:
Page 3, line 27, after ("State") insert ("which shall include a Statement exempting from calculation any expenditure on social services to those groups which the Secretary of State for Health and Social Services shall define from time to time as priority groups, but which shall include people with mental disorder, as defined in section 1 of the Mental Health Act 1983, and elderly people over 75").
The noble Lord said: My Lords, I believe that it will be for the convenience of the House if, together with this amendment we take Amendments Nos. 9, 11 and 12.
Amendment No. 9: Page 4, line 14, after ("requirements") insert ("including the expenditure on priority groups as set out in subsection (9) below.").
Amendment No. 11: Page 4, line 26, at end insert—
("( ) In making a decision under subsection (5) above the Secretary of State shall have regard to the extent (if any) to which the authority's proposed expenditure is to consist of contributions to charities registered, or excepted from registration, under section 4 of the Charities Act 1960. ").
Amendment No. 12: Page 4, line 26, at end insert—
(" ( ) The Secretary of State shall exempt from calculations all expenditure by a local authority on social services to the priority groups, including services provided by registered charities as its agents. The local authority shall raise the rate as agreed with the Secretary of State under subsection (I) above and in addition a rate at the local authority's own discretion to cover its expenditure on the priority groups.").
Amendment No. 11 is a Government amendment, and Amendment No. 9 is linked with Amendment No. 5. Amendment No. 12 is a little different. I want to concentrate on Amendment No. 5 and examine the two subjects of the amendment, which are closely linked.
Baroness Fisher of Rednal: My Lords, I intervene only to ask whether all those amendments are being taken together, because I did not catch the numbers.
Lord Ennals: My Lords, I am sorry that I did not make it absolutely clear. The four amendments being taken together are Amendment No. 5, standing in my name and that of the noble Lord. Lord Kilmarnock; Amendments Nos. 9 and 12 also standing in the names of myself and the noble Lord, Lord Kilmarnock: and Amendment No. 11, standing in the name of the noble Lord, Lord Bellwin. Obviously, I shall not move Amendment No. 11; the noble Lord will do that himself. It is, however, part of the same debate.
It will be recalled that at the Report stage the noble Baroness. Lady Faithfull, on behalf of herself, the noble Lord, Lord Kilmarnock, the noble Lord, Lord Seebohm, and myself, moved an amendment that sought to protect charities in the rate-capping operation. In her very first sentence at column 518 on 5th June, the noble Baroness, Lady Faithfull, said:
"this amendment means that voluntary organisations registered with the Charity Commission would be outside local authority rate-capping".
I shall not take the quotation further than that. The noble Lord, Lord Bellwin, was extremely responsive to an excellent speech made by the noble Baroness and said that he accepted the principle, that he would take the issue back and that he would come back with an amendment. That appears as Amendment No. 11,

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which he will, of course, explain himself. This brought some joy to the House. All of us appreciate the work of charitable organisations; and all of us recognise the deep fear of some charities that their work in the community, and particularly in the social services and the information field— by "information" I refer to the Citizens Advice Bureaux— might suffer unless there is some sort of exemption for them. I was therefore delighted, as I know were my colleagues, that the noble Lord. Lord Bellwin, decided to table Amendment No. 11. I must say that I do not absolutely understand the implications of it. I think that I do, but I would prefer to have the noble Lord's interpretation of exactly what the amendment means, and its implications, rather than put my own gloss on it.
The amendment standing in my name and that of the noble Lord, Lord Kilmarnock, is identical to an amendment that we proposed at Report stage. I was then tremendously encouraged when the noble Lord, Lord Bellwin, said at column 529 on 5th June, in debating the amendment moved by the noble Baroness, Lady Faithfull:
"When the noble Lord, Lord Ennals, comes to the amendment, he will know that he does not have to press the case very hard".
The noble Lord said later:
"I shall accept that put forward by the noble Lord, Lord Ennals, for the reason I have given, to the extent that I shall want to take it away and see what I can come back with, hoping that it will be satisfactory".
My hope was, of course, as great as his, but it turned out to be frustrated. Although the noble Lord was generous enough to have consultations with me, he was not able to bring back any amendment at all in relation to the amendment which I had withdrawn because of the assurance given by the noble Lord.
The purpose of this amendment, which is identical to the amendment on the Marshalled List at Report stage, is to discount expenditure on priority groups in the social services set by the Secretary of State for Social Services. That means the elderly. I was going to say the very elderly but you do not have to be very elderly to be 75 and over. Some of the brightest Members of your Lordships' House are aged 75 and over. But there are some people of that age who cannot be so described. They are considered by the Secretary of State for Social Services, in his wisdom, to be priority cases together with the mentally disordered; namely, the mentally handicapped and the mentally ill. This is not an amendment linked specifically with charitable organisations. We recognised that it would be impossible for local authorities to push on to charities all the work connected with the care and welfare of these priority groups— the mentally ill and the mentally handicapped, and the elderly needing a great deal of assistance.
Even recognising the keenness, the enthusiasm and the mental ability of those aged over 75 in this House, nevertheless, in the country, the demands made on the health service by those over 75 are now of the order of eight times these applying to the rest of the population. All of us recognise that with an ageing population there is a need for more work to be done, particularly in the context of health and social services policy, to keep people in the community for as long as possible, to discharge them into the community as early as
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possible if they have been in hospital and to develop care in the community rather than having people subjected excessively to hospital treatment.
Last week, in a Starred Question, we looked at the possible closure of a psychiatric hospital, with several hundred beds, and of a geriatric hospital. Both closures would impose enormous burdens upon one local authority, namely, Lambeth, which is one of those that one understands is on the hit list; one should be surprised if it were not on the Minister's hit list of 12 or so.
We believe that the priorities which have been set by the Secretary of State for Social Services, namely, these two categories, are ones that your Lordships would not wish to undermine in any way. No one could disagree that, wherever we can, we must give priority to community needs, but it cannot be done simply by the charitable organisations. Very often skills and training as well as professional staffs are needed to assist with these particular groups.
As I have said, before the time came to move the amendment on the last occasion the noble Lord gave me the good news that he was going to take it away, and so I did not press my arguments at all. I was delighted, because I thought we were going to have two victories, and not simply one. We are now talking about what we would have been talking about at Report stage; that is, to ensure protection for the social service provision for the priority groups of the very elderly and the mentally disordered. Even though the Minister did not understand my two amendments, he is certainly not a hard-hearted man; no one could say that of him. I hope that he has had time to reflect, since we had the opportunity of meeting, and will accept this amendment. I beg to move.
Lord Kilmarnock: My Lords, obviously I should like to support this amendment, to which my name has been added. At the last stage of the Bill, the noble Lord, Lord Bellwin, spelt out some of his objections to what, in shorthand, I may call the priority groups amendment; they were mainly financial objections. But those objections do not help us to know how the Government's own policy of care in the community is to be carried out. I have said before, and. at the risk of boring your Lordships, I repeat, that there is a contradiction between the Government's policy to return suitable long-stay patients to the community, thus making it possible to close uneconomic, old hospitals, and the constraints imposed on local authorities, who have a large role to play in the implementation of this policy. As I see it, that is an essential contradiction between two branches, or prongs, of the Government's policy.
We are very glad to see on the Marshalled List the noble Lord's amendment, Amendment No. 11, to which he will shortly be speaking, and in which he has gone some way to meet the noble Baroness, Lady Faithfull, in her plea for the exemption of all genuine charities from rate capping under this Bill. But it seems to me that there are still going to be quite considerable hurdles for voluntary bodies and local authorities to surmount. I understand they will have to use the redetermination procedure to apply under the Government's new proposal.

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What I should like to put to the noble Lord is that, if he is not happy about the main priority groups amendment which the noble Lord, Lord Ennals, has moved, when he comes to speak to his own amendment, Amendment No. 11, he should give local authorities and voluntary organisations some clear signals as to the types of bid which might expect some success under the new procedure, which we welcome, that he is proposing to bring into the Bill.
I would argue with him— I think he would partly accept my argument; at least, I hope he would— that the Government should make a substantial exception in favour of charities aiding local authorities to carry out their responsibilities for care in the community. As the noble Lord, Lord Ennals, explained, these are the groups which are identified in the Government's own consultation document on this subject and subsequently referred to again in the DHSS circular suggesting how local authorities should proceed as regards the groups. As the noble Lord, Lord Ennals, has said, they are the mentally ill, the mentally handicapped, and the elderly— in his amendment, people over 75, which is the age at which the National Health Service costs for elderly people begin to escalate to an enormous extent.
If the Government are not happy and do not want to accept the group of amendments of the noble Lord. Lord Ennals, then I think that the least the noble Lord the Minister can do is put on record that the Government will look favourably on bids for these purposes; that is to say, the purposes mentioned by the noble Lord. Lord Ennals, and actually backed by the Government in their own care in the community policy.
It would be a great help to voluntary organisations to know more or less where they stand on this front. After all, during the course of the last Administration, as well as during the time of this Administration, the Government have encouraged voluntary organisations actually to expand on a county-wide basis in order to carry out some of these responsibilities. Some of them are very unhappy about the uncertain ground on which they now stand. I am sure that the noble Lord will be able to help them a great deal when he comes to speak to his own amendment.
I would say, finally, that though the age of 75 is specified in this amendment, the problems really begin at 65, which is what one might call the official age at which these elderly long-stay patients begin to become a charge on the National Health Service. I very much hope that the noble Lord will be able to help us when he comes to make his own speech.
6.57 p.m.
Lord Bellwin: My Lords, I hope I can help. I am well aware that throughout the attempts I have made to meet your Lordships on this question I have not been able to go as far as has been wished. But let me see whether I can develop the points, as quickly as I can, though at the same time it is important that the record should be complete. I take the point made by the noble Lord, Lord Kilmarnock. I know it is the view also of the noble Lord, Lord Ennals. I am grateful for the opportunity to put on record the Government's thinking on the implications of this Bill for local funding for charities. We have discussed the matter
74
several times, and, as I say, I am grateful to all who have brought this forward.
We have before us a group of amendments tabled by the noble Lords, Lord Ennals and Lord Kilmarnock, and also the Government amendment. I should like again to put on record the Government's recognition of the valuable work done by voluntary bodies, complementing and supplementing statutory services across the whole spectrum. That support runs throughout the Government, from the top down. The Government's own support of the voluntary sector— grants to the tune of £150 million in 1982– 83, and a massive collaboration through MSC programmes— is perhaps the most tangible evidence of our commitment, but we value also the partnership of local authorities and the voluntary sector, which underpins so much of the work of voluntary and charitable organisations locally.
I should like also to register the Government's understanding of the importance of the work which local authorities themselves do in the field of local social services. Our own expenditure plans have provided for a 39 per cent, increase in spending on local personal social services since 1981– 82. That compares with a 22 per cent. increase for local authority spending generally. I hope that demonstrates the extent of the financial backing which underlies the various Government policy intiatives in the field, such as care in the community.
There are two basic principles which underlie this legislation. First, our objective is to control the spending and the rating of the minority of the highest spending authorities. We are not, therefore, talking about authorities who are already strapped for cash, as the saying goes. Secondly, it would be wrong for this legislation to encroach on the freedom of local authorities to decide their own priorities locally for spending within their overall limits. I am sure that those in your Lordships' House who have personal knowledge of local government would support us strongly in this objective.
It is against this background that I have looked at the very fair arguments put forward by noble Lords. Let me explain the problems that I see in some of their proposals and say why those considerations have led me to the solution proposed in my amendment, Amendment No. 11. Much of the concern that underlies the amendments put forward by others is that authorities will be so restricted in their expenditure level that they will be unable, or possibly unwilling, to fund properly voluntary organisations or charities, or their own social services. I have already pointed out that we are here talking about only the most excessive spending authorities; no more than 12 to 20. As I have said so many times before, the expenditure levels we set must be reasonable and cannot seek unattainable cuts.
Given those two factors, I think that it is wrong for voluntary organisations— whose work is generally valued in the local community— to be pessimistic. Grant giving is a tiny proportion of the cost of the main local authority services. Social services grants, for example, were some £50 million in 1981– 82 against social services spending of £2,321 million. So all the evidence of variations in the cost of main line

75
services suggests that local authorities which find themselves rate capped will have scope for the necessary savings elsewhere without slashing their support for worthwhile voluntary sector activities.
We must keep a sense of perspective. Of course it may be possible for an authority to decide to cut back on its support for these organisations. But I repeat that we are talking only of the 12 to 20 highest spending councils, and it is inconceivable that all of those would take that same negative attitude. The maximum extent of the problem envisaged may be no more than two or three authorities. But I accept at once that the concern expressed by charities and voluntary bodies is genuinely felt.
Two solutions have been put forward. First, the amendment tabled by my noble friend Lady Faithfull at Report stage sought to leave spending on charities out of account when fixing the expenditure level. But such an amendment would have the perverse effect of reducing the amount of money available to the authority and would make it more difficult for it to maintain its support for charities. Unfortunately therefore I do not think that there is a solution down this road, and I am confident that on reflection my noble friend will agree.
Secondly, the noble Lord, Lord Ennals, and the noble Lord, Lord Kilmarnock, have pursued a different road by suggesting a split in the rate of an authority. One rate would be limited and the other rate, for defined priority services, would be unlimited. I have difficulty with that approach. Without power to direct what authorities spend their money on— which I do not believe your Lordships would want— it would be possible for an authority to levy a substantial rate nominally for priority group spending, but in reality to spend it in whatever way it wished. And frankly that would drive a coach and horses through the legislation.
The amendment of the noble Lord, Lord Ennals, also goes wider than charities and refers to spending on priority services, some of which would be provided by the authority itself. The distinction is not between for whom the service is provided, but who is providing the service. Grant aid to charitable organisations is in a different category. Because grants are often small and short term they may seem easy to cut; but to the organisations which rely on them, and whose scope for savings may be very limited, they can be far more damaging than cuts in larger services.
That brings me conveniently to the amendment which I have tabled. In thinking about what we ought to do, it seemed clear that what was needed was some way of giving special prominence to local authorities' funding of charitable organisations, but which stopped short of central direction of the authority's spending. For the reasons I have given, it is not possible to achieve this objective through changes in the expenditure level system. But it is possible to do something at the later stage at which an authority applies for a redetermination of its expenditure level. That is the stage at which the authority makes its case to the Minister for a higher level of expenditure to be allowed. At that stage the Minister is allowed to depart from general principles in order to take account of the authority's particular circumstances.
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At present the Bill does not give any guidance to the Secretary of State on how he should decide applications for redetermination. The Government's amendment proposes that in making decisions he should
"have regard to the extent (if any) to which the authorty's proposed expenditure is to consist of contributions to charities registered, or excepted from registration under section 4 of the Charities Act 1960".
I think this is an important step forward. I was very glad to see from the newspapers that the NCVO have welcomed it. The amendment would have the effect of giving charitable organisations a clear status on the face of the statute. The words, "shall have regard" are unambiguous. There can be no doubt that the Secretary of State will have to do that when considering applications and could be challenged in the courts if he did not. Moreover, in order to fulfil the requirement, the Secretary of State will specifically have to ensure that he has the necessary information from authorities about their proposals in relation to charities.
I should perhaps stress here— because we have not discussed in this House how the Secretary of State will consider applications— that of course his decision will be taken in the light of advice from his service colleagues about the issues raised and how they are related to the priorities of the Government generally, say for services to mentally handicapped people or, in another field, to support for work among the ethnic minorities.
It may also be asked what would happen if' the authority made no application for a redetermination. Of course that would be a matter for them. But I put it to your Lordships that where an authority was considering cutting its support to charities because of the pressures of the expenditure level, the charities concerned would be in a strong position to press the council to apply for a redetermination simply because of this amendment. And if the authority should then apply for a redetermination, it would be possible for the charities in that area to write to the Secretary of State to support their case, or, to make an independent case if the authority was proposing to reduce their support. The Secretary of State would have to take these representations into account.
It might also be asked why the amendment is limited to registered charities. I think that I have already explained why I do not believe that local authorities' own services ought to be covered by any special arrangements. In our earlier debate we noted that talk about voluntary bodies at large would cast our net too wide. I think that there was a large measure of agreement on that. That is why we have tightened up on the proposition which was originally put to us by my noble friend Lady Faithfull. I think that is helpful and it is right, when we are establishing a specially advantageous position in the legislation to be confident that it does not extend too widely.
I have to be frank however that there is no way in which we could force local authorities to spend money in a particular way. The amendment will not therefore compel any particular level of support to charities in any area. That of course is the existing position. Having said that, I find it difficult to believe that authorities— once we are past what I would call the

77
sabre rattling stage— would want to cut off funds to charities, knowing that a case could be made to the Secretary of State under the terms of this amendment.
I have spoken at length and I do not want to say any more except to raise one matter. The amendment of the noble Lord, Lord Ennals, refers to "people with mental disorder", and to the elderly. Those groups will be covered by the Government amendment in so far as they are provided for by registered charities of which leading examples are MENCAP, MIND and Age Concern. I have also explained that applications for redetermination will be taken in the light of advice from those Ministers responsible for particular services who will want to ensure that the Secretary of State is fully aware of the Government's priorities for particular items of spending.
I do not want to say any more. I apologise for the length of my explanation; but I think that everyone felt that it was important that the record should show the Government's thinking on this matter so that those concerned can look at and understand clearly where we stand. I hope that the noble Lord and my noble friend Lady Faith full will feel that we have gone, if not all the way— and I know that they would have wanted us to go further— at least a long way to try to recognise the great concern which they have very fairly expressed.
7.9 p.m.
Baroness Faithfull: My Lords. I should like to speak to both Amendments Nos. 5 and 11. As regards Amendment No. 5, naturally I have the deepest sympathy for the amendment for the reasons that have been put forward by the noble Lord, Lord Ennals, and the noble Lord, Lord Kilmarnock. However, a number of us in the social work field did not altogether agree with the priority groups that were noted in the circular that went out to the local authorities. In different parts of the country there are different problems. For instance, many of us at that time were very worried about the problems of the single parent family; the homeless; and families with children. There was also the question of the citizens advice bureaux. Therefore, as regards Amendment No. 5 I would be a little unhappy if priority were to go into the Bill. That is not to say that I am not very sympathetic to and very understanding of the reasons why the two noble Lords have tabled this amendment.
I turn to Amendment No. 11, which is the Government's amendment in response to the general amendment. First, I should like to thank my noble friend the Minister for the great care and consideration that he has given to the amendment which we put forward last time. I am particularly grateful to him. I met with him and then the three of us whose names were down to the amendment met him. We are very grateful for his thoughtfulness and kindness, and for his very deep appreciation and understanding of the great value of the voluntary organisations with charitable status.
I should like to ask the Minister about two matters. They concern the question of administration. If a local authority turns down the application of a charitable organisation, and the charitable organisation then applies to the Minister (and I understood the Minister
78
to say that that would be the procedure), will this be dealt with expeditiously? Local authorities and voluntary organisations must plan ahead financially; they must know a good 12 months in advance what will happen— first, in order to formulate their policies; secondly, in order to know what they can spend the money on; and, thirdly (and this is very important from the point of view of the morale of staff) the staff must know whether or not they are to continue with the work. This is a vitally important situation.
Therefore, I ask my noble friend the Minister whether it would be possible for his department to issue guidelines, both to local authorities and to voluntary organizations, enjoining both to act expeditiously and not least of all his own department when the applications come in, so that there is not a time lag which makes for very great inefficiency and difficulty over the administration of the voluntary organisations. Having said that, again I should like to thank my noble friend for this amendment and for his consideration of the great value of the voluntary organisations.
Baroness Fisher of Rednal: My Lords. I listened with great interest to what the noble Baroness, Lady Faithfull, has said. One of the problems affecting housing associations, which was raised when we dealt with housing benefits, was the debts that have accrued because the money is not forthcoming when it is needed. So I fully sympathise with the point that the noble Baroness. Lady Faithfull, makes about making quite sure that payment is made as quickly as possible.
The noble Lord the Minister spoke about redetermination. I am concerned because at present the paving Bill for the abolition of the metropolitan councils and the GLC is before the House. A tremendous amount of money is being spent by the GLC in particular on many charities— many of them the same charities as have been mentioned this afternoon. It is very difficult for us to discuss redetermination when we know very well of the great bulk of the money— I think it even runs into millions of pounds— which the GLC donates to charities. Will the redetermination be in the boroughs; will they have the money which the GLC now give out? Many of those authorities are now the high-spending authorities which spend a tremendous amount on services and charities. Will they have to apply for a redetermination or will they be excluded because they are a rate-capping authority?
Lord Bellwin: My Lords, by leave of the House and very quickly— my noble friend Lady Faithfull asked whether the department would issue guidelines. I should like to look into that to see whether that can be done. I should also want to consider the other points that she made. I take her point that the staff need to know. That is very important. Perhaps I may respond to her by saying that I should like to take a close look at that matter, and of course I shall come back to her on it.
The noble Baroness, Lady Fisher, was concerned whether the boroughs would receive the money that at present goes to the GLC. The position regarding the money for these various causes that goes to the GLC through the various processes would be the same.

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They will have the money. It will be for them to decide what to do with it. Concern is being expressed by the noble Lords, Lord Ennals, Lord Kilmarnock, and others, because they say that one authority may have one policy and others might have a different policy. This is why the Government take the line that they are taking about registered charities. We do not want them to be disadvantaged in any way. We are putting them in a special position: we are writing them onto the face of the Bill. We do not want them to be worse off, and I am confident that they will not be.
Baroness Fisher of Rednal: My Lords, with the leave of the House, perhaps I did not make myself clear. Will some of these authorities which are already on the rate-capping list be able to apply for a redetermination?
Lord Bellwin: My Lords, the answer to that is: absolutely. They will be able to bring forward their expenditure on the registered charities when they apply for a redetermination, and that will be taken into special consideration.
Lord Ennals: My Lords, in winding up this debate and as the mover of the amendment, I should like to repeat what the noble Baroness, Lady Faithfull, said. I thank the Minister very sincerely for the trouble that he has taken, and I greatly appreciate the amendment which he has tabled. We may still find that discussion about its application may be helpful later on. I also agree that guidelines will be necessary, not only for local authorities but for voluntary organisations. Until they are told exactly what this will mean, I do not think that they will be at all clear about the situation. As citizens advice bureaux are registered charities, I presume that they will be included, and are not omitted from the Minister's amendment.
On these Benches we feel deeply about the need to protect the two priority groups— the elderly in our population and the mentally disordered. The Minister has not been able to give us anything in this respect at all (and he admitted this), and I honestly do not think it would be right for me to withdraw the amendment.
7.18 p.m.
On Question, Whether the said amendment (No. 5) shall be agreed to?
Their Lordships divided: Contents, 70; Not-Contents, 103.

DIVISION NO. 4

CONTENTS

Airedale, L.

Cledwyn of Penrhos, L.

Ardwick, L.

Collison, L.

Attlee, E.

Darcy (de Knayth), B.

Aylestone, L.

Dean of Beswick, L.

Barnett, L.

Diamond, L.

Beswick, L.

Elwyn-Jones, L.

Birk, B.

Ennals, L.

Boston of Faversham, L.

Evans of Claughton, L.

Broadbridge, L.

Fisher of Rednal, B.

Brockway, L.

Gallacher, L.

Brooks of Tremorfa, L.

Gladwyn, L.

Bruce of Donington, L.

Graham of Edmonton, L.

Carmichael of Kelvingrove. L.

Grey, E.

80

Hampton, L.

Peart, L.

Hanworth, V.

Phillips, B.

Harris of Greenwich, L.

Pitt of Hampstead, L.

Hatch of Lusby, L.

Ponsonby of Shulbrede, L. [Teller.]

Hirshfield, L.

Howie of Troon, L.

Rhodes, L.

Ingleby, V.

Rochester, L.

Jacques, L.

Seear, B.

Jeger, B.

Stallard, L.

John-Mackie, L.

Stewart of Alvechurch, B.

Kilmarnock, L. [Teller.]

Stewart of Fulham, L.

Kirkhill, L.

Stoddart of Swindon, L.

Lloyd of Kilgerran, L.

Stone, L.

Lovell-Davis, L.

Taylor of Blackburn, L.

McCarthy, L.

Taylor of Mansfield, L.

McCluskey, L.

Tordoff, L.

McIntosh of Haringey, L.

Underhill, L.

Mayhew, L.

Wallace of Coslany, L.

Meston, L.

Wedderburn of Charlton, L.

Mishcon, L.

Whaddon, L.

Molloy, L.

Wootton of Abinger, B.

Ogmore, L.

Young of Dartington, L.

Oram, L.

NOT-CONTENTS

Airey of Abingdon, B.

Lauderdale, E.

Ashbourne, L.

Lindsey and Abingdon, E.

Auckland, L.

Long, V.

Avon, E.

Lucas of Chilworth, L.

Bauer, L.

Lyell, L.

Belhaven and Stenton, L.

McAlpine of West Green, L.

Bellwin, L.

McFadzean, L.

Beloff, L.

MacLehose of Beoch, L.

Belstead, L.

Macleod of Borve, B.

Brabazon of Tara, L.

Mancroft, L.

Brougham and Vaux, L.

Margadale, L.

Broxbourne, L.

Maude of Stratford-upon-Avon, L.

Bruce-Gardyne, L.

Buckinghamshire, E.

Minto, E.

Buckmaster, V.

Monson, L.

Caithness, E.

Montagu of Beaulieu, L.

Campbell of Alloway, L.

Mottistone, L.

Campbell of Croy, L.

Murton of Lindisfarne, L.

Carnock, L.

Norwich, Bp.

Chelwood, L.

Nugent of Guildford, L.

Cottesloe, L.

Onslow, E.

Craigavon, V.

Orkney, E.

Craigmyle, L.

Orr-Ewing, L.

Crathorne, L.

Pender, L.

Croft, L.

Penrhyn, L.

Davidson, V.

Peyton of Yeovil, L.

Denham, L. [Teller.]

Platt of Writtle, B.

Dilhorne, V.

Reading, M.

Eccles, V.

Renton, L.

Elles, B.

Rodney, L.

Elton, L.

Romney, E.

Faithfull, B.

St. Aldwyn, E.

Fanshawe of Richmond, L.

Saint Oswald, L.

Fortescue, E.

Saltoun, Ly.

Gainford, L.

Sandford, L.

Gardner of Parkes, B.

Savile, L.

Glanusk, L.

Sharples, B.

Glenarthur, L.

Shaughnessy, L.

Gowrie, E.

Skelmersdale, L.

Grantchester, L.

Swinfen, L.

Gridley, L.

Swinton, E. [Teller.]

Hailsham of Saint Marylebone, L.

Teviot, L.

Tranmire, L.

Halsbury, E.

Trefgarne, L.

Hankey, L.

Trumpington, B.

Henderson of Brompton, L.

Vickers, B.

Henley, L.

Waldegrave, E.

Hornsby-Smith, B.

Westbury, L.

Hylton-Foster, B.

Whitelaw, V.

Inglewood, L.

Windlesham, L.

Ingrow, L.

Wynford, L.

Kitchener, E.

Young, B.

Lane-Fox, B.

Resolved in the negative, and amendment disagreed to accordingly.
7.26 p.m.
Lord Bellwin Lord Bellwin moved Amendment No. 6:
Page 3, line 29, leave out ("section 2(5)") and insert ("subsection (5) of section 2").
The noble Lord said: My Lords, if I speak to Amendments Nos. 6 and 8 I shall not detain your Lordships for very long.
Amendment No. 8: Page 3, line 31, leave out ("section 2 above") and insert ("that section").
These are technical amendments and merely seek to improve the wording of an amendment which your Lordships accepted during Report stage on principles applying to authorities previously selected. I beg to move.
On Question, amendment agreed to.
[Amendment No. 7 not moved.]
Lord Bellwin Lord Bellwin moved Amendment No. 8:
[Printed above]
On Question, amendment agreed to.
[Amendment No. 9 not moved.]
Lord Graham of Edmonton Lord Graham of Edmonton moved Amendment No. 10:
Page 4, line 26, at end insert—
("and within 28 days of the date of such service as aforesaid he shall cause an abstract of such notice as aforesaid to be published on at least one occasion in a newspaper circulating in the area of the authority concerned and in the London Gazette").
The noble Lord said: My Lords, we come to Amendment No. 10. The Minister will quickly tell us, quite rightly, that this is not the first time that words relating to this particular amendment have been discussed in this place, and indeed they were also discussed in another place. I need, for the benefit of your Lordships, to turn not to the words on the Marshalled List but to the main clause from which they stem, which is Clause 3 on page 3. The House will be aware that this relates to expenditure levels.
Under Clause 3(2) the Secretary of State has power on these matters in respect of a designated authority, which,
"shall be exercised in accordance with principles determined by the Secretary of State".
The words "principles determined by the Secretary of State", are the first point I wish your Lordships to bear in mind. Then we turn to page 4, Clause 3(5). In the middle of subsection (5) there are the words:
"either confirm his original determination or re-determine the level at a greater or smaller amount".
I stress the words, "at a greater or smaller amount".
Then we come to subsection (8). It is at the end of that subsection that the words I have moved are to be added. Subsection (8) is important.
"The Secretary of State's decision under subsection (5) and any requirements imposed by him under subsection (6) above shall he stated in a notice served by him on the authority concerned."
When my noble friend Lady Nicol moved this amendment at an earlier stage, the Minister promised, when it was not proceeded with on a vote, to write to her. May I say that throughout the stages of this Bill, and all others the Minister has been prolific in writing to Members of the House to whom he promised that
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would write. I am grateful for the care he has taken to make sure that anything that was left unresolved at Committee stage was, to the best of his ability, cleared up by letter.
The terminology that he uses in the letter to my noble friend Lady Nicol helps, in my view, to make the case for our amendment. In the second paragraph of the letter of 11th June, the Minister writes:
"You were suggesting that unless the report were to be laid before the House of Commons giving details of redetermined expenditure levels, the considerations underlying them and any requirements imposed on selected authorities, the Secretary of State could show undue favour"—
and I want to stress the words "undue favour"—
"to an authority without Parliament being aware of what was being done".
The Minister said:
"I am afraid I do not accept that line of argument. Secretaries of State do not act in that way. I very much agree with the sentiments expressed by Lord Harmar-Nicholls, when he said in Official Report Col. 501– 502. 'We have to have confidence in those who attain the position of Minister of State. We cannot frame every piece of legislation on the basis that any Minister might want to abuse a position of trust'."
I want the Minister to understand fully that no one from these Benches is accusing any Minister of either abusing his powers or certainly abusing a position of trust. But we are politicians, and we have Ministers with a broad remit— that is, to make the Bill work. What we are concerned about deeply here is what happened in another place when, for instance, the Bill relating to the rates went through that House and the five authorities were in effect designated and listed and the order-making process and the procedures that we are involved in now went through.
In fact we do not need to look into a crystal ball as to what will happen with this Bill in the future: we can actually read the book. The book that we are concerned about is the matters which have happened here, when, in fact, a comparable situation took place in respect of Scotland. The Minister is aware that what we are doing in this Bill relates to a great deal of what has already taken place in respect of Scottish legislation. May I remind the Minister and the House that, at column 576 on 21st July 1983, the Minister said that five authorities were involved and had received their letters. Those authorities were Lothian Regional Council, Shetland Islands Council— I stress that— Kirkcaldy, Stirling and Glasgow. Those authorities were invited to make representations to him.
The quite extraordinary thing is that the Minister was then able to tell the House that the Shetland Islands authority apparently were able to bring to him at that stage certain facts that were unknown, or failed to be taken into account, when drawing up the guidelines. For instance, this is in fact what Mr. Younger, the Secretary of State, told the other place at column 577. Appreciate the scenario, my Lords: We now have a Government which have issued not only designations and guidelines but have actually said that here is an authority that is going to be designated because it has failed to carry out the legal requirements; and one assumes that the Ministry and the civil servants are fully aware of all the factors that need to be taken into account.
As I have mentioned, Mr. Younger said this in another place at column 577:
"There are a large number of unique circumstances arising from North Sea oil which carry with them special financial consequences".
So we were asked to believe that the incidence of North Sea oil and the special consequences from North Sea oil were things that needed to be brought to the attention of the Minister and the civil servants at that particular time. The Minister said that as a special item heavy lorries involved in the construction of oil facilities had to be taken into account. There was almost a unique expansion of the population of about 20 per cent. between 1978 and 1981.
My Lords, it is stretching credulity to the limits to believe that the Minister was actually listening for the first time to special reasons as to why Shetland Islands ought to be excluded and that these were factors that had to be taken into account. My honourable friend in another place, Mr. Bruce Millan, said in column 585 on 21st July 1983:
"Shetland is unique because it has been budgeted further beyond the guidelines—46 per cent.—than any other authority in Scotland".
Then he goes on to say:
"I never expected the Secretary of State to implement the Shetland penalty. He knows that if that were to happen, the Shetland authority could make life difficult for him in respect of oil development".
We are very uneasy on this side of the Chamber that, apparently, in what I consider a capricious manner, the interpretation by the Secretary of State can be applied in situations of this kind. Our amendment is simply asking the Minister, once he has decided that there are special reasons why he is going to increase or decrease the figure, that he should publish on one occasion in a newspaper circulated in the area the precise reasons why. They may be laughed at; they may be ridiculed; they may be held in disrepute. But at least if they are circulated that allows those who wish to challenge them and to make publicity out of them to bring them to the attention of people in your Lordships' House and another place.
The Minister has given very little in the realm of publicity. Consultation, yes; he told us about consultation. What we are about here is not to rely on the Adjournment Debates and the Early Day Motions and other things. What we want is the publication in a local place of the reason why that local council is going to have its limits increased or decreased. I beg to move.
Lord Bellwin: My Lords, I am well aware of the argument that the Secretary of State should be as accountable as possible for his decisions, and we would not want to shirk the responsibility for decisions taken under rate limitations—quite the contrary. What we are opposed to is the provision of over-elaborate safeguards which we have considered at various stages. Let us be realistic. When an authority has been designated, when the Secretary of State has prescribed an expenditure level for them, and if the authority has applied for a redetermination, can we really believe that all this would happen without comment and press coverage? Certainly it would not happen where I come from: I give an absolute
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assurance of that. I am certain that all these issues will be followed very closely by local reporters. The level of local rates is a constant source of local newspaper stories. Sometimes I wonder what they would do without that kind of publicity. I do not agree that a formal notice placed by the Government in a local newspaper is necessary at all.
The details of the Secretary of State's decisions and any requirements imposed would be communicated to the authorities. We have accepted that this is necessary; and that the amendment moved in Committee by my noble friend Lady Gardner improved the Bill. It is the authority which needs to know the formal details. What local people will need to know in a formalised way is the validity of the rate finally levied by the council. This is what Clause 7 provides, when it requires the local authority to publish a certificate stating in a local newspaper that its rate is valid.
While I would expect a stong case to be made for any amendment tabled in your Lordships' House, I think it goes too far to suggest that we shall require the Government to publish decisions in a newspaper because we think they would act dishonourably otherwise. If a future Secretary of State were to act in such a way, he would be found out soon enough. It is not a contingency for which we feel there is a need to make any special provision. All of us who have worked in local government know that, whatever else you get or do not get, publicity is almost the life blood of the publications in the area. In all large authorities there is a full-time civic reporter on muncipal affairs. I understand the points that are being made and indeed the Scottish experience to which the noble Lord, Lord Graham, referred. Of all the many fears which have been expressed, I should have thought that in practical terms this is the one which should least concern your Lordships.
Lord Graham of Edmonton: My Lords, I appreciate the care that the Minister has taken but no one here is imputing ulterior motives to the Government. I believe that the Minister used a term which could have implied that we felt that something could be hidden. What we are saying is, "Publish and be dammed". If the Minister and his colleagues take a decision in the light of representations to reduce or increase the limitation, what we are saying—we are talking about not more than 21 authorities or up to 12, 15 or 20—is that there are literally hundreds of provisions on the statute hook which cause governments and departments to publish statements and notices. Although the Minister is quite right, all we are saying is that local people will be very interested in the story, the editorial, and the statement by the leader of the council and so on, and that this will go some way to publishing the matter immediately to a wider audience than the council. The Minister will know about the Shetlands. Very few people know the precise reason why the Minister took his actions in the Shetlands. We know the action that he took—to take them off the list—but there has been very little publicity as to why. That is what we are asking for. But we can see that we shall make no progress, so I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Denham: My Lords, in moving the dinner adjournment, I think I had better make a brief business statement because the proceedings are very complicated indeed. I only just understand them and after I have explained them to your Lordships, I very much doubt whether your Lordships will.
The difficulty we have tonight is that it was expected that by this time we should have reached the Trade Union Bill and so therefore the order of the business on the Order Paper enabled the dinner hour business, which is the Video Recordings Bill, to come at some point within the Trade Union Bill. The only way that we can keep within the rules of order and still get the dinner adjournment during the Bill before— the Rates Bill— is to adjourn the Third Reading of the Rates Bill until after the Video Recordings Bill. The House will then go into Committee on the Trade Union Bill and will immediately he adjourned until after the Third Reading of the Rates Bill. This will have the effect of bringing the dinner hour business into the earlier business.
I beg to move that further proceedings on the Third Reading of the Rates Bill he adjourned until after the Video Recordings Bill.
Lord Ponsonby of Shulbrede: My Lords, perhaps the noble Lord could at the same time indicate that we would not return to the Rates Bill until 8.30 p.m.
Lord Denham: Yes, my Lords. I am so sorry, not earlier than 8.30 p.m. I am most grateful to the Opposition Chief Whip.
The Deputy Speaker (Lord Hayter): The Question is that this debate be adjourned. As many as are of that opinion will say, "Content"?… To the contrary, "Not-Content"?… The "Contents" have it.

Trade Union Bill
Lord Denham: My Lords, on behalf of my noble friend Lord Gowrie, I beg to move that the House do now resolve itself into Committee on the said Bill.
The Deputy Speaker: The Question is that this debate be adjourned and taken later this day. As many as are of that opinion will say, "Content"?… To the contrary, "Not-Content"?… The "Contents" have it.
Lord Harris of Greenwich: My Lords, could the Chief Whip help us? Two different Questions appear to have been put. The Motion was moved by the noble Lord, Lord Denham, and apparently a different issue was put to the House a few moments ago. Perhaps the noble Lord, Lord Denham, can help us.
Lord Denham: Yes, my Lords. It has been done in a slightly different way to the way that I prognosticated, but I am assured by the Table that it has the same effect.

Video Recordings Bill
7.46 p.m.
Further considered on Report.
Clause 21 [Forfeiture.]
Lord Houghton of Sowerby Lord Houghton of Sowerby moved Amendment No. 48:
Page 15, line 35, at end insert ("and destroyed").
The noble Lord said: My Lords, the House will be glad to know that I do not intend to complicate matters further. I sincerely hope that we can complete the Report stage of this Bill within the next 45 minutes or an hour. I have certainly no intention of having it further considered later on tonight.
In moving Amendment No. 48, however, perhaps I may for the convenience of the House indicate what my plans are. I do not propose to move Amendment No. 50, which is an amendment of substance. I will defer that to the Third Reading where I think it is more appropriate because it proposes to limit the tenure of the Bill. I think it is better taken then than now, especially as I attach quite a lot of importance to it. The next thing is that I do not have to do anything with Amendment No. 51 because that was dealt with previously, and the schedule has already been printed in the Official Report, so I will take any guidance that is available as to how to deal with that one.
So I come back to the only amendment for which I shall be responsible in this debate; Amendment No. 48, which is really exploratory. I could not be more benign upon it than I am at this moment. It is however a matter of some importance. Section 3 of the Obscene Publications Act 1959 has provision for obscene publications to be seized and held by the police without necessarily being the subject of any charge under that Act, but submitted for the consideration of a court as to whether the material seized should be forfeited. So there can be a forfeiture of alleged obscene material which is not the subject of a charge, as well as material seized that could be or would be the subject of a charge. As I understand it, there is no such provision in this Bill.
Clause 21 states:
"Where a person is convicted of any offence under this Act, a court may order any video recording—

(a) produced to the court, and

(b) shown to the satisfaction of the court to relate to the offence, to be forfeited".

That suggests to me that only if there is a conviction under this Bill would an order be made for forfeiture of the recordings held by the police. In that respect this Bill differs from the main substance of the Obscene Publications Act to which I have referred. If that is clear then the question I ask is: what happens to them when they are forfeited? I have not been able to do all the research necessary to find out what happens to things that are forfeited under the order of a court. I presume that they are disposed of in some appropriate manner, which usually would be destruction. But there are aspects of this material which I think contain distinctive potentialities for difficulty. One is that they are all standard in size, in shape. They are easily put in the pocket; they have an acknowledged exchange

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value of roughly the same amount; they are almost currency in a world of their own.
Some people will allege that those responsible for affairs at times cannot resist anything except temptation, and I am anxious to be satisfied that the videos that are forfeited do not get into the wrong hands. I am not going to be associated with a lot of wanton criticisms of the police, reflecting upon their integrity and so on, but I hear far too much about what is going on at the present moment to feel comfortable. One wonders what actually happens to videos that are forfeited, apparently without any order of the court as to what is to happen to them. That may be another of the matters that are more relevant to the Police and Criminal Evidence Bill than to this one. But here we are; we are dealing in this Bill with a special material and, as I say, it can be of some special importance.
There is the risk of planted evidence. There is the problem of how long a person who has been raided has to wait before he gets a list of what has been taken, so that he can check it against his stock or his possessions in order to feel satisfied that it is a true and correct list. There is the question of the length of time these things are retained, and all the rest of it. I think that in regard to this material, when the court has decided that it should be forfeited, and when all the appropriate periods of time have expired during which an appeal might he lodged, then the finality of the matter should be that the material is destroyed.
I omitted to mention one thing; that is, of course, that this prohibited material is easily reproduced, and that adds to the danger, because copies can be made quite easily. I just do not know. All I can say is that, having served with some noble friends in this House on the Royal Commission on Standards of Conduct in Public Life, we were very concerned indeed regarding what we heard about the vice squad in London and elsewhere. There was a good clean-up operation carried out at that time. I have often said— and I firmly believe it— that pornography has corrupted more police than it has citizens; and that is a danger we have to guard against. If the stuff is destroyed, that does at least minimise the risk of abuse.
That is really my case. I am addressing myself to the Minister because, though I do not care who replies, with great respect, I should have thought that the Minister would know more about this than would the noble Lord, Lord Nugent. After all, he cannot be an expert on everything in this Bill, much as I respect his capacity for research into and exposition of the obscurities of the Bill: but there we are.
I hope I shall be content to receive an answer about the treatment of forfeited material under this Bill, or under any other enactment, which will enable me to be satisfied that goods forfeited are not put into circulation and sold on the side, and that there is no other misuse of material of this kind. I beg to move.
Lord Nugent of Guildford: My Lords, while I do not claim to be an expert on this, or indeed any, aspect of the Bill— though I am bound to say that during the course of its passage I am becoming much better informed— I think I know enough about this particular problem to be able to answer the noble Lord. First, I
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would say that I am 100 per cent. with him, for once, that the right thing to do with these tapes is to destroy them. I am glad to be able to assure him that the power already exists in Section 140 of the Magistrates' Court Act 1980, which requires that upon a conviction any article forfeited shall be sold or otherwise disposed of as the court may direct.
One thing we can be quite sure of is that they would not be selling this material, and therefore I would think in most circumstances the court would order it to be destroyed. So the powers are available, and it is not necessary to amend the Bill in this respect in order to ensure the very splendid end which the noble Lord requires. I hope that he will feel completely reassured by that answer.
Lord Monson: My Lords, before the noble Lord sits down, is it not the case that the powers are not compulsory but are optional?
Lord Nugent of Guildford: My Lords, that is so. I think it is desirable for them to be optional because one does not know for how long material is to be held, and in what circumstances. As long as the powers are there, I think we can leave it with some confidence to the courts to see that destruction follows where appropriate.
Lord Houghton of Sowerby: My Lords. I want to be satisfied about that reply. Perhaps the noble Lord will answer just one question. The powers are there. Does this mean that if the powers are not exercised, then forfeited material remains, as it were, in the air? Is there a finality to it, or has there to be a positive decision on destruction? That is the point.
Lord Beswick: My Lords, before the noble Lord replies, may I ask him to be a little more explicit as to what would be the disadvantage of accepting these two words?
The Lord Bishop of Norwich: My Lords, perhaps I may make a brief reference to the discretionary matter. I think the amendment is ill drawn, because in Clause 21, on page 15, at line 31, it says only that the court "may". So it is a discretionary clause, and even if we added the words of the amendment, it would still not make it other than discretionary. So although I also have sympathy with the tenor of the speech of the noble Lord, Lord Houghton, the amendment he suggests would not in fact strengthen the position all that much, because we are told that the court "may" order, not that the court "shall" order.
The Parliamentary Under-Secretary of State, Home Office (Lord Elton): My Lords, perhaps it may be best if I reply to this point because the conventions of the Report stage suggest that my noble friend should not longer be drawn into the fray. May I say to the noble Lord, Lord Houghton of Sowerby, first of all that the right reverend Prelate is absolutely right. His own amendment is just as permissive as the Bill, as it now stands. However, may I address myself to the point he intended to make; namely, that it should not be permissive. The fact is that the power exists in law for the court to dispose of these undesirable objects by

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either destruction or other means. I should say that the power to dispose of them otherwise exists in another Act which, as my noble friend says, is the Magistrates' Court Act 1980, which applies to anything which the magistrates may confiscate, if that is the term. If we put in a requirement that they should so do in this Bill, I am given to understand that it would cast doubt on other legislation where the power remains permissive. The assumption is I think warranted that the courts, which have this material under their direct control, will not allow it either to gather dust or to be disseminated among the public for the profit of the employees of the court.
I hope the noble Lord will be satisfied with my explanation, and that the noble Lord, Lord Beswick, will accept that to put this amendment into this Bill would cast doubt on the vires, or the correctness, of other Acts already on the statute book.
Lord Mishcon: My Lords, the last thing in the world I want to do is to interfere with the pious intention of my noble friend Lord Houghton that this stage of the Bill should be completed during this dinner hour. But, in sheer frankness, I must rise because I do not think that the right reverend Prelate has quite got the point, nor do I believe that the Minister has.
I thought what was being suggested by my noble friend was that there was a permissive power in the court to forefeit; that if the court exercised that permissive power it was saying, "Please, at the same time, see that it is destroyed". The court would not just have the right to decide that it should be forfeited; the court would have also to say if it decided to forfeit, that it should be destroyed. If I may say so— I may be wrong, and it would not by any means be the first time— the answer to that is that there would be many occasions when the court would want to forfeit quite properly but would not want an article destroyed because further inquiries might have to be made as to the source of that article, when further inquiries might have to be made as to its distribution, and without the exhibit, as it were, those inquiries might be very difficult. That is why it is wrong to link the power to forefeit with the injunction that, if you do exercise that power, then you must destroy as well.
Baroness Macleod of Borve: My Lords, surely, as my noble friend the Minister has said it is left to each individual court and each individual case. When things which are highly obnoxious have been put before me on my desk—things like long sheath knives which have done a great deal of damage to young people—I order them to be confiscated and destroyed. That is within the power of the court, and I do not think it should be written into the Bill. I do not think that that is a necessary part of it.
Lord Houghton of Sowerby: My Lords, I am sure that the matter has gone as far as is possible now, and I am as content as one can be in this difficult problem. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn
Clause 23 [Short title, commencement and extent]:
8.3 p.m.
Lord Monson Lord Monson moved Amendment No. 49:
Page 16, line 32, after ("Recordings") insert ("(Regulation)").
The noble Lord said: My Lords, the effect of this amendment would be to change the Short Title of the Bill so that it read Video Recordings (Regulation) Bill. I am certain that I need not emphasise that this is in no sense a wrecking amendment, nor will it in any way weaken the Bill if it is accepted. Your Lordships may recall that at Committee stage I moved an amendment, with the able assistance of the noble Lord, Lord Houghton of Sowerby, to change the Title of the Bill so that it would read Video Recordings Censorship Bill. That amendment was opposed by the noble Lord, Lord Nugent, the noble Lord, Lord Elton, my noble and learned friend Lord Simon of Glaisdale, and others, chiefly on the grounds that there was no censorship involved in this Bill. Frankly, I found that assertion difficult, indeed impossible, to accept. However, I took the point, which was well made by the noble Lord, Lord Nugent, that censorship forms only a part of what this Bill does and that only a minority of videos submitted for classification will be banned outright or required to have bits snipped out of them, so naturally we withdrew the amendment.
The same objection can hardly be made to this amendment. I have lost count of the number of times that the noble Lord, Lord Nugent, and others have said that the purpose of this Bill is to regulate the sale and hire of video recordings. Indeed, the Daily Telegraph today revealed that distributors of old Walt Disney films like Donald Duck will have to pay between £400 and £600 to get a classification for their films, even if they swear on oath that the films have not been tampered with since they were first made 30 or 40 years ago, upon pain of a fine of up to £20,000. Incidentally, the Long Title of the Bill, which is an unusually short Long Title, describes it as:
"An act to make provision for regulating the distribution of video recordings and for connected purposes".
What would the existing cryptic Short Title, Video Recordings Bill (or, as it will be, Video Recordings Act), mean to the average individual who has not been following these debates in the same way as your Lordships have, either now or even more so in two, three, four or five years' time? Somebody coming across the existing Title for the first time might easily suppose that it refers to video copyright; to the fire resistance qualities, or the absence of fire resistance qualities, of the cassettes in which the recordings are contained; to whether such cassettes have jagged edges which might cut children's hands; to resale price maintenance or the abolition of resale price maintenance where video recordings are concerned; or to any number of other things.
In Committee, I suggested that if at some future date the popular press became agitated about what they might well term "folio nasties", and if, in consequence, some latter-day Lord Nugent of Guildford were to introduce a Bill to control the sale and hire of explicit or violent material featuring the printed word, it is inconceivable that he would entitle it the Books and Magazines Bill, or, I might now add, the Books, Periodicals and Posters Bill. Needless to say, I was not contradicted, for obvious reasons.
I submit that in a participatory democracy the Short Title of an Act of Parliament should never be vague or ambiguous. Members of the legal profession often complain to me about the difficulty of finding their way through the mass of legislation which has cascaded out of the Palace of Westminster in recent years, but it is not only lawyers that we should be concerned about. Any member of the public, whatever his level of education, should be able to walk into a public library at any time in the future and say, "I should like to see that law about video nasties which they brought in three or four years ago", and the librarian should be able to run her finger down a list of self-explanatory titles and pick out the right one with the minimum of fuss and bother.
The sponsors of this Bill are obviously proud of it and what it sets out to do. In consequence, they should not wish its light to be hidden under a bushel. If the noble Lord is in two minds about accepting this amendment, may I suggest to him that another place ought at least to be allowed to have a look at it? If they were then to reject it, there would be absolutely no question of your Lordships insisting upon it. My Lords, I beg to move.
Lord Nugent of Guildford: My Lords, as the noble Lord rightly said, this is a subject which we have debated before at Committee stage, when we had an interesting debate on the point as to whether the word "censorship" should be introduced into the Short Title. I recollect, as the noble Lord, Lord Monson, has said, that we had a difference of opinion. but he accepted the point then that "censorship" was inappropriate because it would apply to only a very small part of the total material. But we had quite a range over the whole subject: and I recollect the intervention by the noble Lord, Lord Houghton, as well. But the contribution which impressed me most was from the noble Lord, Lord Mishcon, who has played such a splendid part in these debates, when he said:
"This is the Short Title of a Bill of Parliament. It is not suggested that any Short Title encompasses all the things that a Bill is supposed to do. What the Short Title does is to give an indication of what the Bill is about, and this Bill is about video recordings. Therefore, it is an extremely accurate and uncontroversial title".—[Official Report; 18/5/84; col. 1658.]
Pretty well everything else that the noble Lord, Lord Monson, has said would be relevant if there were other video Bills. But there are not. This is the only one, so anyone who is interested in video legislation either now or in the future has only got to look at the alphabetical index for "V" to find "video", and they will come straight upon it. So it really is a completely adequate title to describe what the Bill is about so that anybody who wishes to know can find it without any difficulty.
It is a mistake to add words to any Short Title. This goes for all the parliamentary Bills which I have seen during the past 30 to 40 years. The shorter the title the better. It is convenient for everybody, so long as it adequately describes what the Bill is about. Other explanatory words are needed only when there are other Bills on the same subject. I am sure it is better parliamentary practice not to put further words of any
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kind into the Short Title of the Bill. It is a mistake to add anything to the Short Title of a Bill that is not absolutely essential. Therefore I hope that the noble Lord. Lord Monson, and the noble Lord. Lord Houghton of Sowerby, who have put their names to this amendment will withdraw it. The noble Lord, Lord Houghton of Sowerby, with his very long parliamentary experience, will be as aware as I am that the principle which I am enunciating is the basic principle for all short titles. They are kept as short as they can be. Extra words are needed only when there are other Bills on the same subject. I hope that the noble Lord will be convinced by these arguments.
Lord Winstanley: My Lords, I listened to the brief debate at the Committee stage on the earlier amendment moved by the noble Lord, Lord Monson, when he sought to insert the word "censorship" into the Long Title. I understood the arguments against it. Therefore I thought the noble Lord was right to withdraw the amendment. Having studied this amendment— which I did most carefully before I came here— I wondered whether this amendment was necessary: but having heard the reply of the noble Lord, Lord Nugent of Guildford, I am bound to say that I think perhaps it is. I find it difficult to understand why he should be so suspicious of the mere interpolation of this single word which seeks to demonstrate more clearly precisely what it is that the Bill seeks to do. The noble Lord, Lord Nugent of Guildford, has said that this is the only Video Bill and that there will never be another Video Bill.
Lord Nugent of Guildford: My Lords, I said nothing of the kind. I said that if there is another Video Bill, that will be the time to add additional words, if they are needed, to describe the nature of it. However, when there is only one Bill of this kind, the word "video" is sufficient to describe it.
Lord Winstanley: My Lords. I am most grateful to the noble Lord. I withdraw what I said if I misunderstood him. However, I understood the noble Lord to say that at the moment it is unnecessary to have this amendment because there is no other Video Bill. I believe it is absolutely certain, as sure as night follows day, that there will have to be other Bills. There will have to be another Bill to deal with the copyright of video films. There will have to be another Bill dealing with the pirating of videos. As the noble Lord, Lord Nugent of Guildford, said, it is quite right that when that time comes we can put in words and have legislation to alter the Title of the Bill or, indeed, the other Bill. But since this simple word which the noble Lord, Lord Monson, seeks to insert merely makes clear what is the purpose of the Bill, I find it very difficult to understand why the noble Lord, Lord Nugent of Guildford, should oppose it.
On the last occasion when this matter was discussed it was pointed out that it would be inappropriate to insert the word "censorship" because there would be many occasions on which video recordings would be regulated without in any true sense being censored. If the noble Lord, Lord Nugent of Guildford, objects to the word "regulation" being inserted, one wonders whether his intention is perhaps a little different from

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the mere regulating of videos. Perhaps the noble Lord does want them to be censored. I do not know. I find it difficult to understand why he does not accept this very simple amendment which makes the Short Title of the Bill infinitely clearer than it would otherwise be. The noble Lord, Lord Nugent of Guildford, asked the noble Lords, Lord Monson and Lord Houghton of Sowerby, to withdraw the amendment. I hope they will not.
Lord Mishcon: My Lords, the noble Lords, Lord Winstanley and Lord Monson, and my noble friend Lord Houghton of Sowerby, are reasonable men. Although the corpse of Caesar is not before us, may I make it clear that they are also honourable men. I wonder whether I can answer the noble Lord, Lord Winstanley, in a sentence or two. It would not be an accurate description. This Bill in no way regulates video recordings. This Bill regulates the distribution of video recordings. Therefore it would be a completely inaccurate and misleading title.
Lord Houghton of Sowerby: My Lords, perhaps a little more research is desirable into the pedigree of titles of Bills so as to get at the truth of the matter. I started this the other day when I asked the Library if I could see the Licensing Act 1662. No one would suspect, from the title of that Act, that it was an Act for preventing the frequent abuses in printing seditious, treasonable and unlicensed books and pamphlets and for the regulating of printing and printing presses. On the basis of what the noble Lord, Lord Nugent of Guildford, has said, I suppose that the time to bring "books" into the Title would be if there were another licensing Act to follow the Act of 1662 that did something else with books. Then it would be the Licensing (Regulation of Books) Act.
This is a fascinating topic. I am sure that there ought to be a book about it. Then we should probably wonder why we were a little more explicit in 1955 when there was a Bill entitled Children and Young Persons (Harmful Publications) Act. The noble Baroness, Lady Faithfull, will also remember the Protection of Children Act 1978. In both of those cases there was a moral purpose to get into the Title: to convey to somebody that this was a good thing to do. It was not neutral. It was purposeful; it was moral; it was almost divine. But here we are hiding it all under this neutral title.
Baroness Faithfull: My Lords, there was nothing moral about the Protection of Children Act. The main purpose of the Bill was to safeguard the well-being of children.
Lord Houghton of Sowerby: My Lords, so we could go on! But I promise not to go on. My little bit of entertainment can finish here and now.
Lord Elton: My Lords, I am sure that we shall view that with a certain poignant regret. I of course see the attractions which the noble Lord, Lord Winstanley, sees in the amendment standing in the name of both noble Lords, in that they feel it directs the attention to something in the Bill which they regard as of paramount importance. However, as the noble Lord, Lord Mishcon, has very ably told your Lordships, that
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is not actually what the Bill is about. Therefore it would be more misleading than not to give a narrower definition.
There is another aspect. We have here the child of whom the parents are in another place. It has been christened the Video Recordings Bill and it is widely known as the Video Recordings Bill. There would be a certain discourtesy in giving it at this late stage a new name, as it were, by deed poll without discussing it with the parents, when that name is entirely misleading as to the character of the child. So I hope noble Lords will not think that my noble friend is being pernickety or splitting hairs when he asks your Lordships not to pass this apparently innocuous amendment, because in fact it would be misleading and just faintly discourteous.
The Lord Bishop of Norwich: My Lords, theologically, the Minister is right, because once a child is christened he is never re-christened. So I agree with the Minister.
Lord Monson: My Lords, theology apart, I think the other place should have a chance to consider our suggestion, which may not have occurred to them. I am disappointed with what the noble Lord, Lord Nugent of Guildford, has said. I do not believe that the Title gives a true indication of what the Bill is all about. I do not believe that members of the general public will get a true impression, either, particularly in a few years' time when, as the noble Lord. Lord Winstanley, (for whose support I am most grateful), has said, there may be many other Bills with titles involving the word "video". The noble Lord has suggested that it will make the Title clumsy to add the word "Regulation", a 10-letter word. I am sure that he cannot be seriously suggesting that it would have that effect. The noble Lord is surely carrying to unusual lengths his distaste for that which is explicit when he apparently wants a fig-leaf to mask the essential purpose of the Bill.
I have not moved this amendment in any lighthearted manner. I am strongly convinced that acceptance of the amendment would be to the public benefit in the short-term and, particularly, in the long-term. Although I do not intend to ask anybody to march through the Division Lobbies after this long afternoon that your Lordships have had, I shall adopt the suggestion of the noble Lord, Lord Winstanley, and ask your Lordships to indicate verbally what you feel about this amendment.
On Question, amendment negatived.
[Amendments Nos. 50 and 51 not moved.]
Baroness Trumpington: My Lords, I understand that consideration of amendments on the Third Reading of the Rates Bill was adjourned until 8.30 p.m. Therefore, I beg to move that the House be now adjourned during pleasure until that time.
Lord Mishcon: My Lords, we accept with pleasure anything which the noble Baroness moves.
Moved accordingly, and, on Question, Motion agreed to.
[The Sitting was suspended from 8.22 to 8.30 p.m.]

Rates Bill
Consideration of amendments on Third Reading resumed.
Lord Skelmersdale Lord Skelmersdale moved Amendment No. 11:
[Printed earlier.]
The noble Lord said: My Lords, my noble friend has already spoken to this amendment in the group of amendments beginning with Amendment No. 5. I beg to move.
On Question, amendment agreed to.
[Amendment No. 12 not moved.]
Clause 4 [Determination of maximum rate or precept]:
Baroness Birk Baroness Birk moved Amendment No. 13:
Page 5, line 20, insert—
("Provided that such an order does not—

(i) relate to authorities in more than one of the classes set out in section 2(5) of this Act; and

(ii) relate both to authorities which respectively have and have not been designated under section 2 of this Act in the previous financial year.").

The noble Baroness said: My Lords, what I am attempting to do in this amendment is to ensure greater parliamentary invigilation of the final stage of rate limitation. Unfortunately, previous attempts to get separate reports for authorities have failed. The last time we voted on this at Report stage the amendment was lost by six votes only and it had tremendous support from all sides of the House.
This amendment which I am bringing forward tonight requires separate reports by class of authority. In this context class means those classes listed in Clause 2(5) of the Bill: councils of metropolitan counties, non-metropolitan counties, metropolitan districts, inner London boroughs, and outer London boroughs. This means that the classes will be listed, plus dividing each class according to whether or not the authorities have been designated in the previous year. Therefore separate reports will be made, for example, for previously designated metropolitan counties, non-metropolitan counties, and so on. This would mean that there would be 12 categories plus separate reports for the GLC, ILEA, the City of London, and the Isle of Scilly. It also takes account of what the noble Lord, Lord Boyd-Carpenter, said on 5th June, at columns 557– 8 when we were discussing the previous amendment. He said:
"There will be no basis of comparison. It will not be possible to say, for example, that the GLC has been badly treated compared with South Yorkshire, or whatever example one may give, because one will not have the South Yorkshire figures for comparison."
This amendment would allow comparisons within the different classes. My argument is that at each step of designating authorities and determining their expenditure limits the Government may have recourse to 16 different sets of principles. Those I have worked out. They are the six which you double between non-designated and designated, and the four others. These principles are not required to be approved by Parliament when they are used. The Government have restricted parliamentary approval to only one state of rate limitation: the final step.
Given the misgivings expressed in the House about principles and the potential abuses of them they should require parliamentary control. This amendment, if accepted, would ensure that the different sets of principles used by the Government to discriminate against previously designated authorities would be subject to scrutiny. It would also enable the other place to accept or reject the case for the rate limitations against each class of authority, and thus it would provide for a little more discretion than the present approach of an omnibus report.
I should have thought that this would have been a more attractive proposition to the Government than the original amendment on a separate report for each authority which, as I pointed out, was lost by only a very slim margin. I hope, therefore, that in reply the Minister will be able to say, just briefly, that, yes, the Government accept this. I beg to move.
Lord Skelmersdale: My Lords, Hope springs eternal. In considering this amendment it is only fair, I think, to point out that this is well trampled ground. We have debated several times the parliamentary procedures for imposing rate limits on authorities with which the Secretary of State cannot come to an agreement. I believe that earlier amendments at successive stages on this particular point have been withdrawn without debate.
This amendment would require rate limits to be specified in separate orders for separate classes of authorities under both the selective and the general scheme. It would also require separate orders for authorities which had been designated in the preceding year and for those which had not.
I recognise the argument that the disagreed rate limit order is the point in the procedure at which Parliament has its principal opportunity to scrutinise the Government's proposals. But I believe that this can be done adequately within a composite order procedure. Although the Secretary of State will be looking at authorities' individual circumstances in considering applications for derogations, he will nevertheless have to take all his decisions on a basis that is generally consistent for all authorities. If two authorities had the same individual circumstance in some particular respect, the Secretary of State could hardly allow for that circumstance in different ways. I am sure that Parliament will be concerned especially with scrutinising this aspect of the handling of the procedures. In other words, the Secretary of State would otherwise be in trouble. The other place will want to ensure that there has been fair and balanced treatment between authorities. It seems to me this is the proper supervisory role of the other place, rather than the substitution of their individual judgments for those of the Secretary of State.
The procedures of the other place provide that orders must be approved or negatived as a whole. But I am not convinced that the procedure under Clause 4 would prevent proper discussions. As my noble friend has previously noted, that is certainly not the experience on the rate support grant report debates in the other place. That covers a far larger number of authorities than the 12 to 20 that could at most be

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involved under the selective scheme which is what we are talking about here. Yet individual views are able to come through clearly. Often debate is concerned with general principles, as illustrated by the case of particular authorities, rather than with the detailed circumstances of those authorities.
I recognise, naturally, that this is a compromise proposal. The supporters of the amendment have accepted that it would be impractical to have separate orders for each authority. They seek, nevertheless, to provide for some limit on the number of authorities covered by each order. But it is an unsatisfactory compromise. It increases the number of orders to be considered; but to what end? It does not allow individual circumstances to be separately considered; and there is no more reason to believe that the circumstances of all authorities in the same class will be identical to the extent that their rate limits should stand or fall together.
The order-making power allows the other House the opportunity to consider the circumstances and the decisions of the Secretary of State as a whole and to satisfy themselves that he has acted reasonably, consistently and fairly in exercising his statutory discretion. Erskine May describes the affirmative order procedure as being intended to be used where "special scrutiny" of subordinate legislation is appropriate. Under the Bill, the Secretary of State is not required to make composite affirmative orders, but I believe that, if he does, the procedure as it stands is an adequate safeguard. I hope that the noble Baroness will see that my noble friend and I have studied this with enormous care but still regret being unable to suggest that your Lordships accept the amendment.
Baroness Birk: My Lords, it is not really very much comfort to know that the noble Lord and his noble friend have discussed this and considered it with great care. When replying, the noble Lord said that I and my supporters recognised that to have a report for each authority was not satisfactory. That is absolutely not true. I will reiterate that we consider that that is by far the best, most important and safest way to have parliamentary scrutiny. That was entirely supported by the very large vote and the very near miss when we put this to a Division on Report. The only reason I have not put it hack is, partly, the convention that one does not put down exactly the same amendment when it has been voted on at a previous stage and partly because it is clear from the size of the House at the moment that I should not win it if I did so.
The compromise was also intended to meet some of the Government's objections. I thought that the contribution from the noble Lord, Lord Boyd-Carpenter, which I brought in aid, was very much on the lines of the amendment I put forward. It is clear that once again the Government have no intention of increasing the amount of parliamentary scrutiny that is essential if these rather dreadful propositions are put into practice. Therefore, I withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 9 [Power to introduce general control]:
Lord Henderson of Brompton Lord Henderson of Brompton moved Amendment No. 13A:
Page 8, line 16, after ("shall") insert ("(a)").
The noble Lord said: My Lords, we now come to the first of the amendments on Third Reading to Part II of the Bill. My Amendments Nos. 13A and 13B are extremely simple and I can explain their purpose briefly.
Amendment No. 13B: Page 8, line 18, at end insert—
("; and
(b) after such consultation, lay before Parliament in a White Paper the text of the draft Order which he proposes to lay under subsection (3) below, in sufficient time for both Houses of Parliament to take it into consideration and to suggest amendments thereto.").
However, before doing so I should like, if I may, to thank the Secretary of State, Mr. Patrick Jenkin, and the noble Lord, Lord Bellwin, for giving me the time to talk over with them an earlier amendment which I had in mind; a time limiting amendment designed to give a greater degree of parliamentary control over Part II, but which they found unacceptable. I should like to say that the Secretary of State himself voluntarily explored another way of strengthening the affirmative resolution procedure— a way which I had not thought of and he did— but found that that would be too complicated a change at this stage of the Bill.
It is those consultations for which I believe the Secretary of State and the noble Lord, Lord Bellwin, should receive credit, if I may say so, but which have caused a delay in my tabling these amendments for which I apologise to the House. These amendments have now come forward and, as I said, they are simple and uncomplicated and I hope that the House will understand the reason why they are so late.
I should also like to say that I put these forward from an entirely non-party political stance and I ask that there be a party political truce while they are considered— if such a thing is possible. I will refrain from all consideration of the merits of Part II and I shall be delighted if others who follow me on this amendment will refrain likewise.
My amendment seeks to amend Clause 9 so that, after the consultations by the Secretary of State with the local authority associations, as mentioned in subsection (2), and before the Secretary of State lays a draft order for affirmative resolution to activate Clauses 10 and 11, there shall be interposed an extra requirement on the Secretary of State so that there is an opportunity for both Houses to consider the text of the draft order which he proposes to lay under subsection (3) in sufficient time for both Houses to consider that text and, if they feel it desirable, to suggest amendments to it. My submission is that, unless this is done, Parliament will be presented with an order which it will have very little time to consider and no power to amend, or even to suggest amendments.
I think that it is indisputably the case that the local authority budget cycle is such that, when an order is presented to Parliament for approval under Clause 9, for all practical purposes it would be impossible to reject such an order. It would be impossible for the Government even to make any adjustments to the order in the light of parliamentary debate. The local authority budget cycle is such that most major decisions are taken between late December and mid-March; perhaps earlier in the case of county councils. I am sure the House is full of experts on local

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government and if I say anything wrong about the budgetary cycle I shall no doubt be corrected at once. This timing arises because final decisions cannot be made until the rate support grant settlement is made in December. The process for settling the maximum rate level for a year under Part II may not be completed in time for an authority to set its rate or precept. In that case there is provision for an interim maximum rate and I believe that is to be set under Clause 5. At a later date, after 1st March, a final maximum rate would be set.
Only when all the final maximum rates or precepts have been set could an order be laid under subsection (3) of Clause 9. If there is even one straggler, as in the case of Liverpool this year, that could cause delay in the laying of the order until after the start of the financial year. If the order were to be laid even as early as late March— and, as I have already explained, the Secretary of State may well find it difficult to be able to do so that early— it would be impossible for the Government to accept any adjustments whatever to the order without throwing the budgets of the local authorities into uncertainty, to say the least.
I draw a distinction between orders under Clause 9 and the rate support grant process, which is well established, where there is sufficient time for adjustments after the annual debate in another place in January each year and the beginning of the ensuing financial year.
Thus, for all practical purposes, Clause 9 as drafted would box Parliament in and make it impossible for either House to comment effectively, if only because the financial year to which the order relates will already have started. For that reason, the purpose of my amendments is to allow both Houses an early opportunity to discuss what the Government propose to do after they have consulted with local authorities, and thus to give both Houses, if they so wish— not to require them— time in which to debate the text of the order and to suggest amendments.
I would ask the House to note that my amendments place no obligation on Parliament whatsoever. It is nearly always undesirable for an Act of Parliament to lay down parliamentary procedures other than those that are well known and follow prescribed forms. What another place would do if it had the kind of opportunity which I hope these amendments would present to it by the White Paper procedure is entirely a matter for that House. Equally, this House might just decide, if it was satisfied with the text of the proposals in the White Paper, that it might be prepared just to look at it and not to take it into consideration. But if it wished to take it into consideration, it could well have a debate on it; and it might even, if it wished, invoke Standing Order No. 60, whereby this House can go into Committee on a Motion, and that would give an opportunity for amendments to be suggested.
Just in case there are those who think that suggested amendments are a new concept unknown to Parliament, I remind the House of Section 2(4) of the Parliament Act 1911, where there is a suggested amendments procedure. It is in a proviso. It is highly complicated— far too complicated for me to attempt to explain it to the House in a short time, let alone at
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this hour of the night. I may say straight away that my proposals contain no such complications as exist in that proviso.
I have argued the case for these amendments on purely parliamentary, procedural and practical grounds, and, I hope your Lordships will agree, in a low key and without discussing the merits of Part II of the Bill at all. I hope that the amendments are acceptable to individual Members of the House on all sides and not least to Her Majesty's Government. I cannot see any reasonable arguments against them. No doubt the Minister will attempt to adduce such arguments: but, if he could agree to these amendments, or perhaps send them to the House of Commons, where they might be slightly modified if there were some technical detail which was wrong in them (which the House of Commons would be perfectly capable of doing), well, then, I think that in this year of what the Speaker calls "The Frustration Parliament" this Parliament would, at least for the remainder of the Session, be a little less frustrated than it has been hitherto. I beg to move.
8.54 p.m.
Baroness Birk: My Lords, the amendments moved by the noble Lord, Lord Henderson of Brompton, are an extremely ingenious way to deal with a problem that has been troubling us all. He is quite right when he says that they are purely non-party amendments. Obviously what they seek to do is to improve parliamentary invigilation of the implementation of the general scheme of rate limitation. The noble Lord is absolutely right. He explained the position thoroughly, so it does not need very much more explanation from me or from anyone else.
Although the affirmative resolution of both Houses, which is at present in the Bill, is a major step, it does not offer very much opportunity for Parliament to change the Government's mind when it wishes to do so. The noble Lord's amendment introduces a White Paper stage, and that would mean that things could be more easily changed if Parliament were to express the view that the general scheme was wrong. That proposal seems to me to be a more than adequate halfway house towards what we have been trying to get from the Government and the Government have been totally resisting. It would enable discussion to take place and opinions to be given. It would be a very much more flexible procedure. Another place would also be able to comment on the scheme generally if it felt that amendment was necessary or the Government had gone wrong. I and my noble friends would certainly support these amendments.
Lord Chelwood: My Lords, the noble Lord, Lord Henderson of Brompton, has put some powerful arguments to the House. I, for one, strongly support his amendments. I hope that he will not feel I am breaking the party-political truce in any way by supporting him. I think that Amendments Nos. 13A and 13B march pretty obviously with Amendment No. 13C, because they deal with the question of parliamentary control and influence over Part II of the Bill. I see these amendments, therefore, as a last line of defence to try to avoid a breach of long-standing and widely accepted parliamentary practices.

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Part II of the Bill is of course a very different kettle of fish from Part I. The attempt to delete Clause 9 during the Committee stage failed only rather narrowly. I think that the vote was 140 to 130, so the Government had a narrow squeak. Part II, as your Lordships know, can be activated only by affirmative orders which cannot be amended, which would not be negatived in present circumstances in another place and which should not be negatived in the Upper House— although it seems to me where this last point is concerned that we have been put in a false position by the Government.
At the very least, therefore, I feel that the Government ought to accept these two amendments and the following one. If they are not passed, I feel that we shall be forging a weapon that could all too easily be fired by a Government with extreme views, who were not sufficiently interested in democratic niceties, at targets for which it was never intended. Therefore, I feel that, without these amendments, Part II is setting a dangerous and bad precedent. The classic excuse for shooting the wrong person has always been, "I didn't know it was loaded". But Part II, unamended, I think, is heavily loaded. I feel very strongly indeed— and I believe that many noble Lords in all parts of the House would agree with me— that loaded weapons should not be left lying around indefinitely.
There was a very important all-party committee which reported to Parliament in 1932. It was the Scott Committee, of which Lord Donoughmore was a distinguished member. Its view was that discretionary powers given to Ministers through delegated legislation can all too easily threaten the sovereignty of Parliament and the jurisidiction of the courts. The committee recommended that a time limit of one year should be the limit for what it called— and what have often been called before and since— "Henry VIII clauses". Clause 9 is surely a "Henry VIII clause". I should be very grateful indeed to my noble friend Lord Bellwin when he comes to reply if he would comment on that point.
After all, the following amendment, which marches with these two, is asking only that Parliament should review those powers in five years and, if it does not pass affirmative orders, that those powers should lapse. That is not asking very much. It is asking only for a review after five years and not one year. If the noble Lord, Lord Henderson of Brompton, will forgive me for saying so, Amendments Nos. 13A and 13B are a device, but Parliament perhaps has to resort to falling back on devices when normal procedures seem to be being short-circuited.
The noble Lord said in moving these amendments, and I want to emphasise, that there could be no rush to activate Part II if Part I had failed or looked likely to fail during the next four years, or perhaps it might be seen to be failing in three years. There would be ample time, in either the 12 months or the two years available, for consultation to take place on the widest possible scale. That is something about which I am sure my noble friend will be telling us more, because some of us are anxious about the scale of it and how it would take place. There would be ample time for a White Paper to be published, as is suggested, on which both Houses could express their views and suggest amendments; and there would also be ample time for the laying of affirmative orders.
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So, rather than speak too long at this hour of the night, I shall skip some other remarks I had thought of making and come to my conclusion. When the White Paper was presented on 1st August last year we were told by the Secretary of State that it had green edges. There was something in that, because where Part II is concerned there have been two valuable smallish concessions made— not all that smallish, but valuable concessions— one with regard to charities, which today is something that I think noble Lords in all parts of the House welcomed, and one about low-spending councils, a promise being made, as far as that is concerned, in another place. Surely now is the time for another minor concession; in other words, the acceptance of these three amendments.
Throughout part II my noble friend Lord Bellwin has put up a doughty defence for what I frankly regard as the indefensible. No one could have done it better than he has, and I admire him for what he has done. I cannot quite see it from here, but if his brief says "Resist" I am going to ask him to take it out of that red file and tear it up, now that he has heard the arguments of the noble Lord, Lord Henderson of Brompton, and is about to hear the arguments of my noble friend Lord Sandford on the next amendment. I ask him to tear it up and to agree to these minor procedural suggestions, which I think are very important. I therefore beg the Government to treat parliament with the respect that it deserves by accepting these three amendments.
Lord Mottistone: My Lords, perhaps I might briefly intervene to say that the principle of the amendments of the noble Lord, Lord Henderson— and I am not talking about the third one— seems to me to be very necessary to this House. Like the noble Lord, Lord Henderson, I am not talking about principles: I am talking on an all-party basis as far as I can. However, I think we have all found it most frustrating that you cannot amend orders. I think there should be an intervening stage at which it can be. wherever it is introduced. The noble Lord, Lord Henderson, is seeking to introduce it in this Bill, but I am not particularly arguing for that. I think it is worth all of us giving encouragement to the thought that there is a way of resenting an order so that it can be amended. It does not happen all that frequently. I have felt it very strongly, and so have several of my noble friends, when we have been in opposition, let alone when we are in Government on the Back-Benches.
I think it is very important to have, as it were, an intervening stage which enables one to amend an order. I think we should encourage that. Whether my noble friend will produce a good argument against not encouraging it in this particular Bill, I am not sure; but I think the principle that the noble Lord, Lord Henderson, with his great knowledge and experience, has introduced is absolutely splendid. I hope we shall have other opportunities for including it in Bills in appropriate places.
Lord Bellwin: My Lords, before I go any further, may I say to my noble friend Lord Chelwood that a Henry VIII clause is generally understood to provide a general power by subordinate legislation to amend primary legislation. Part II of this Bill is not, therefore, a Henry VIII clause. Before I comment specifically on

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the amendments, perhaps I should say one or two words about the policy thinking behind Part II and the safeguards that are built into it. I want first to make it clear that this Bill represents a single Government policy. The selective and general schemes on rate limitation are complementary. They represent a single policy for combating excessive local authority spending and rating. That policy was included explicitly in the manifesto on which we were elected.
The Government have always acknowledged that the implementation of the powers in Part II would be a significant change in the balance between central and local government. That is why we have always said that we would much rather never implement those powers. We would far prefer it if the operation of selective rate limitation on the small number of the highest spenders, together with the pressures which are already exerted on spending through the grant system and through targets, were adequate to ensure that our public spending policies were achieved.
There is not a case at present for introducing the general scheme. Nevertheless, as I have said in earlier debates, there are scenarios in which we could need the general powers in Part II, and need them quickly. In those circumstances we could not afford the time that it would take to process fresh legislation and then implement the scheme. While we were going through those steps, local authority spending might again be going out of control. That is the basic reason why we have thought it right to include Part II in the Bill and to discuss it in Parliament together with the powers in Part I. That is the straightforward thing to do. The powers are then on the statute book as a reserve basis, available if needed. Furthermore, they act as an influence on local authorities which might otherwise start spending.
We are not here talking about powers that impose penalties in retrospect on people who do not behave as desired. What we are talking about here are powers held ready in reserve in case the situation changes. There is a good analogy with the default powers included in many pieces of legislation but rarely used. They are there as an essential long stop in case the basic policy proves inadequate or is ignored by those concerned. For example, in the housing or education field there are general default powers that enable the Secretary of State to step in and carry out certain functions if a local authority itself fails to carry them out.
Of course, no Government would want to use such powers. Indeed, they are only rarely used; but it is generally recognised that any prudent and far-sighted Government should take steps within the statute, to cater for the situation where the law is not obeyed. That is really what we are about here. We hope that selective limitation will prove adequate, and under present circumstances we believe that it will. But circumstances might change and other authorities might begin to spend. We need reserve powers in order to be able to cater for that situation.
Although the noble Lord, Lord Henderson, has, I know, severe reservations about it, I want to stress the safeguard of the affirmative resolution procedure in both Houses. I know that there is at the present time
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a large majority in the other place, and that your Lordships do not by convention vote against subordinate legislation agreed by another place. Nevertheless, I am sufficiently old-fashioned, if you like, to believe that a debate and vote in either House of Parliament is a genuine way of measuring opinion on an issue and that if the powers sought are thought not to be justified either House might well find ways of making that position clear. Surely, the effectiveness of this check on the Government does not actually rely on the determination of the House to vote an order down but in the fact that the Government must bring the order to the House in the first place.
I think I can also say not unreasonably that there is nothing unparliamentary or undemocratic about a large majority in another place. It represents the will of the people. That is part of our democratic system. That is why we abide by that decision. All this convinces me, first, that the powers in Part II are not unparliamentary, and, secondly, that they are thoroughly hedged about with suitable safeguards which, I believe, in practice. would be meaningful. To argue that the safeguards are not meaningful is in a sense to argue against our whole system. There is nothing unprecedented about reserve powers. All this explains why I am satisfied with the safeguards in the Bill regarding the introduction of Part II.
The noble Lord, Lord Henderson, as I would have expected, put his case extremely fairly and reasonably. But his amendments would appear to add a further safeguard, as I think he would be the first to say, by requiring the Government to issue a White Paper incorporating the draft order under Clause 9(3). I am not sure whether such a provision, which at least would be unusual, would add to the accountability within the Bill. I have already explained that I believe that the affirmative resolution procedure represents a very real safeguard. Certainly, consultation with the associations is a further safeguard, but since such consultation could hardly be held in private it amounts to ensuring a degree of public debate about any intention to make the major move of introducing Part II.
I can assure the House, and do, that the Government would not seek to conduct such consultation in a secret way; so there would be opportunity to discuss publicly the principle of introducing Part II without the amendment. Let me clarify the timing problem. There is a practical concern about the amendment. We would not know in a given year until we had the budget of authorities for that year whether or not there were signs of major overspending. If there were, and we therefore needed to introduce the general scheme for the next year, we would need to move quickly in order to be able to announce proposed expenditure levels before the summer holidays. There is time to consult the associations, but I doubt whether there is time to issue a White Paper and hold a more formal consultation exercise. There is therefore a danger of missing a whole year of rate limitation, during which spending could get further out of control.
It is further the case that the draft order required under Clause 9(3) would not contain anything surprising. It is, in effect, a commencement order for Clauses 10 and 11 of the Bill. In itself, therefore, the

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draft order does not contain important material. It is unlikely that amendments would be appropriate. Its importance is that it is the trigger for the affirmative resolution procedure debates on the principle. Those are the real parliamentary safeguards and the source of accountability on this issue.
I recognise the concern of the noble Lord, Lord Henderson, about a possible precedent for other Bills. As I have said, I believe that these provisions are like the default powers, for which there are already many precedents. I do not think that the amendment which the noble Lord has moved would in practice increase the degree of accountability that is already povided for within the Bill, or the degree to which the Secretary of State would have to convince both Houses of Parliament of the wisdom of his proposal to implement the general scheme.
I have listened carefully to what the noble Lord has said both today and during the discussions to which he has again, typically and fairly, referred. I have also listened to my noble friends who have spoken on the issue. I respect their views as well in the matter. However, to interpose at this stage yet a further step in the proceedings would have a disadvantageous effect which, I know, is not the intention of the noble Lord, Lord Henderson. I feel, though, that it would have that effect. I feel also that there is scope for debate. After all, what are we actually talking about? We are talking here about the possibility of the implementation of Part II— a general scheme. We have said again and again that this would be a most major measure which would have a significant effect on the change in the relationships between central Government and local government. We would not embark upon that without the most careful and exhaustive of debates and consultations. It would be a major measure.
While most certainly I understand and respect the concern and vehemence with which my noble friend Lord Chelwood put it, I believe that here we have a situation where in those circumstances— and that is what this amendment is about— the whole issue would be such that the requirement here would not be necessary, but if we had it in this way it could have a really disadvantageous effect. It is not because of what it says on the paper in front of me, but because of those arguments, that I feel unable to accept the amendments.
Lord Bruce of Donington: My Lords, before the noble Lord sits down, will be answer one question? Albeit perhaps unknowingly, he has raised a very important constitutional matter. He has referred repeatedly to the affirmative resolution procedure through both Houses as being a safeguard. On at least two occasions he has said that it would require the approval of both Houses of Parliament. Are we to take it that if we on these Benches, together with noble Lords on all sides of the House, were to vote against an affirmative resolution, it would be acceptable to the Government and would not be regarded by them as a breach of the ordinary rules by which the House is governed?
The Lord President of the Council (Viscount Whitelaw): My Lords, I think it is important for me, as Leader of this House, to answer that particular question. We had this question which came up once
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before on another order. I answered it then and I shall answer it now. It has been the case, I understand— I am a novice in these matters, as I consistently say, and it is important for me to say it— that normally your Lordships have decided not to vote directly against orders. That has been a convention which is thought to be right. Therefore, in answer to the noble Lord, I have to say that normally that would be regarded to be the position.
Both parties have accepted this over a period of time, and there are considerable problems if that were to be changed. So I would hope that it would be regarded that, while this House is totally entitled, I understand, to do so, nevertheless, as a matter of convention, it has not done so. If it has thought to do so, it has done it by expressing an opinion on the order, without actually going any further. I understand that has been the position and I think that, probably on both sides of your Lordships' House, it would be thought that was a reasonable position for us to be in.
Lord Henderson of Brompton: My Lords, I must confess to being disappointed with the Minister's answer. I do not really believe— and I doubt whether the House believes— that he really addressed himself to my important point about the local authority budget cycle and the constraints which it imposes upon the parliamentary time table. Under this procedure I fully recognise that in ordinary circumstances, the affirmative resolution procedure for bringing Part II of the Bill into operation is quite formidable; but in this particular case it suffers from the very grave disadvantage that it is constrained by the local authority budgetary cycle. That may mean, especially under the provisions of this Bill, that the affirmative resolutions cannot come before either House of Parliament until either just before or immediately after the beginning of the new financial year. In those circumstances, the affirmative resolution procedure has no value whatsoever. If either House chose to vote against it or had any kind of delaying tactic it would be pretty well tantamount to a vote of no confidence in the Government, and local authority finances would be in a state of chaos. It is that which makes me regard this as of special importance in this particular case.
I value very much the support which I received from the noble Lord, Lord Chelwood. He used arguments which I would not care to deploy, because they have a party political connotation. He is worried about long-term considerations of one sort and another. I am grateful also to the noble Lord, Lord Mottistone, for what he said. I am not asking for any kind of general power for an amendment to be introduced for affirmative resolutions or delegated legislation as a generality. But in this particular instance, because of the local authority budgetary cycle, I think there is a special case for the interposition of a White Paper consultative stage for Parliament. On those special grounds I would ask the House to support me in this amendment, irrespective of where Members of the House may sit.
9.20 p.m.
On Question, Whether the said amendment (No. 13A) shall be agreed to?
Their Lordships divided: Contents, 57; Not-Contents, 75.

DIVISION NO. 5

CONTENTS

Airedale, L.

Irving of Dartford, L.

Attlee, E.

Jeger, B.

Aylestone, L.

John-Mackie, L.

Barnett, L.

Kilmarnock, L.

Bernstein, L.

Kirkhill, L.

Birk, B.

McCarthy, L.

Briginshaw, L.

McCluskey, L.

Brockway, L.

McIntosh of Haringey, L.

Brooks of Tremorfa, L.

Bruce of Donington, L.

Northfield, L.

Carmichael of Kelvingrove, L.

Onslow, E.

Chelwood, L.

Pitt of Hampstead, L.

Cledwyn of Penrhos, L.

Ponsonhy of Shulbrede, L.

Collison, L.

Rochester, L.

Darcy (de Knayth), B.

Sandford, L.

David, B.

Seear, B.

Dean of Beswick, L.

Shaughnessy, L.

Denning, L.

Stewart of Alvechurch, B.

Evans of Claughton, L.

Stewart of Fulham, L.

Faithfull, B.

Stoddart of Swindon, L.

Gladwyn, L.

Stone, L.

Graham of Edmonton, L.

Taylor of Blackburn, L.

Grey, E.

Tordoff, L.

Hampton, L.

Underhill, L.

Hanworth, V.

Vickers, B.

Harris of Greenwich, L.

Walston, L.

Henderson of Brompton, L.[Teller.]

Wedderburn of Charlton, L.

White, B.

Houghton of Sowerby, L.

Winstanley, L.

Howard of Henderskelfe, L. [Teller.]

NOT-CONTENTS

Airey of Abingdon, B.

Beloff, L.

Avon, E.

Belstead, L.

Bauer, L.

Brabazon of Tara, L.

Bellwin, L.

Brougham and Vaux, L.

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Broxbourne, L.

Hood, V.

Bruce-Gardyne, L.

Hornsby-Smith, B.

Buckinghamshire, E.

Inglewood, L.

Caithness, E.

Ingrow, L.

Campbell of Alloway, L.

Kitchener, E.

Campbell of Croy, L.

Lane-Fox, B.

Carnock, L.

Lindsey and Abingdon, E.

Cockfield, L.

Long, V.

Coleraine, L.

Lucas of Chilworth, L.

Colwyn, L.

Lyell, L.

Cottesloe, L.

McFadzean, L.

Craigavon, V.

MacLehose of Beoch, L.

Craigmyle, L.

Macleod of Borve, B.

Crathorne, L.

Mancroft, L.

Croft, L.

Margadale, L.

Davidson, V.

Murton of Lindisfarne, L.

De La Warr, E.

Orr-Ewing, L.

Denham, L. [Teller.]

Pender, L.

Dilhorne, V.

Penrhyn, L.

Elles, B.

Peyton of Yeovil, L.

Elliot of Harwood, B.

Renton, L.

Elton, L.

Rodney, L.

Fisher, L.

Saltoun, Ly.

Fortescue, E.

Savile, L.

Gardner of Parkes, B.

Sharpies, B.

Glanusk, L.

Skelmersdale, L.

Glenarthur, L.

Swinton, E. [Teller.]

Gowrie, E.

Tranmire, L.

Grantchester, L.

Trefgarne, L.

Gray of Contin, L.

Trumpington, B.

Greenway, L.

Vaux of Harrowden, L.

Gridley, L.

Waldegrave, E.

Hailsham of Saint Marylebone, L.

Whitelaw, V.

Wynford, L.

Resolved in the negative, and amendment disagreed to accordingly.
9.29 p.m.
[Amendment No. 13B not moved.]
9.30 p.m.
Lord Sandford Lord Sandford moved Amendment No. 13C:
Page 8, line 21. at end insert—
("( ) This Part of this Act shall continue in force until the end of the period of 5 years from the passing of this Act and shall then expire but at any time before the expiry of this Part the Secretary of State may by order, to be approved by a resolution of each House of Parliament, direct that it shall continue in force for another period of one year.").
The noble Lord said: My Lords, I beg to move Amendment No. 13C. Your Lordships will see from the text of this amendment that it is the last in a long series of amendments of many different kinds moved from many different parts of the House, all of which have been designed to set some limits on the duration or the operation of this part of the Bill. I should have much preferred this amendment to be an amendment moved by Her Majesty's Government. During the whole of the period between Report stage and this stage I had some reason for hope and expectation that it would turn out to be that way.
The noble Lord, Lord Henderson, has indicated to your Lordships some of the discussions that were going on last week which gave grounds for that hope. It was only last Thursday that my noble friend who sits on the Front Bench spoke to me on the telephone and explained that although he and his colleagues—the Secretary of State and others—had been searching for a formula of this sort, they had not been able to arrive at one. In those circumstances, I felt obliged to put down this amendment. Your Lordships will see that it is in the mildest possible terms. It is far milder than anything that has been moved hitherto. It allows this part of the Bill— which the House has already agreed is necessary— to operate for a full period of five years, and even then to be extendable by reference to Parliament.
There are two separate sets of argument that can be advanced in favour of this amendment. One is the kind of argument which the noble Lord, Lord Henderson, used to support his amendment just now; namely, the appropriateness, or otherwise, of the executive asking for, and Parliament giving to the executive, powers as extensive, unlimited, unfettered and untrammelled as the ones for which they are asking. The House has already agreed that they should have these powers and I do not want to go over the arguments for that at all. What I suggest is that there are arguments for setting some limits to them.
Those arguments are not ones that I am going to advance. I believe there are others of your Lordships' House who will want to do so. The other set of arguments are that these powers in the whole of this Bill— and in Part II in particular— are needed because the state of local government finance has sunk to such a low ebb that powers of this sort are required in order to prevent anything worse going wrong and until such time as local government finance can be properly reformed.
Everybody can see that it is the lack of accountability of the councillor to his electorate, the lack of responsibility among the electorate who can vote for all sorts of expensive schemes without having to pay
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for them (thanks to a whole variety of situations in local government finance, which again we need not go into) which make it necessary for that reform to be carried out, and if it is carried out properly none of this legislation in Part II will be needed, and that is why I am moving this amendment. It is to give the Government time to introduce those reforms and then, after that lapse of time, to take what will then be a redundant piece of legislation off the statute book.
It is possible to argue that five years will not be enough. If it is not enough then this amendment provides for the Secretary of State to come back to Parliament and explain why it has not been long enough and to ask for more time. I do not think I need say any more. All the subsidiary arguments have been rehearsed over and over again at different stages of the Bill. It is for those two main reasons— and particularly from the latter point of view— that I want to move this amendment. My noble friend Lord Ridley, who is president of the Association of County Councils and who would wish to have been here, has asked me to say that this amendment has his strong support also from his position as president of that association. I beg to move.
Lord Northfield: My Lords, the noble Lord, Lord Bellwin, knows that I have not been hostile to this Bill. Indeed, as he knows, I firmly recognise the problems which the Government have with certain high-spending local authorities. At Second Reading I ventured to suggest that any Government would have had to rein back the expectations that we had built up in the 1970s about local government activity and local government spending. I suggested that I was shocked that many of these high spenders have not used LAMSAC, the local authority management body, to get their costs under control. I said that I could not find that the rate capping of 12 authorities out of 450 was some kind of constitutional scandal.
But while I said that, I also said— and perhaps the noble Lord will recall this— that I thought that we needed a clearer understanding about the powers, duties and finances of local government to take us on to the next stage. When at the Report stage we looked at the issue of limitation I pointed out that in a Legislature we need some prodding of the Government to get on with the business of reviewing these matters and getting them right. I shall come to that in a moment.
Secondly, I said at Second Reading that I found it unacceptable to have this kind of legislation in Part II permanently on the statute book since, while it is not exactly unconstitutional, it upsets the understanding underlying our constitution, it upsets the balance and the dispersal of power— and the noble Lord said that himself in his speech replying to the amendment of the noble Lord, Lord Henderson— and it would be wrong, in my view, to see that kind of power on the statute book, available in the future to wrong hands, to be misused. That is the important point that I want to make.
It is a power that we could perhaps trust for the moment. I am not trying to say that I particularly trust

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any Government at any time, but it certainly ought not to remain a power way into the distant future when there exists any kind of elective dictatorship, as the noble and learned Lord the Lord Chancellor called it. We must look at this issue rather carefully.
After we had exchanged some views about this at the Report stage, the noble Lord, Lord Bellwin, wrote to me, and I know that he will not mind if I quote what he said in parts of his letter. He said that he regards Part II as reserve powers and— and I go on to quote him:
"this is important as a deterrent to the sort of behaviour which might make their use necessary. A time limit on the duration of those reserve powers would simply undermine the credibility as a deterrent and that is at the heart of our resistance to the idea of time limitation".
My Lords, we answer that point very simply. It is a deterrent because the Government can continue to renew the power. It is no longer, under this amendment, a power that automatically and finally lapses. They would have the power by order to continue the Bill for a further period. So I hope that we have scuppered that argument which the noble Lord put to me in his letter.
In his second and third paragraphs, the noble Lord wrote:
"I understand the argument you make that time limiting of the powers might hasten a broader review of the rating system. But I do not accept this. I have acknowledged that the possibility of a full review of local government finance cannot be ruled out for all time.".
If I may say so, those of us who have been in Whitehall for a long time would recognise the phrase, "Cannot be ruled out for all time" as meaning, "We've not the slightest intention of doing anything about it for quite a long time". With the greatest of respect to the noble Lord, that phrase almost betrays the remainder of the letter. It indicates no sense of urgency on the part of Government on this issue and it must arouse fears in all parts of the House.
I come back to the second point that I made at Second Reading; namely, that we need something to prod the Government. If the Government continuously came forward under this amendment to renew the legislation, it would be for Parliament in both Houses to say, "Well, what are you doing about the reform of local government powers and local government finance?" That is the importance of it— not for the Government, but for Parliament to have the opportunity to say, "We shall not continue to renew these powers unless within a reasonable time you come forward with a real reform."
My last point is that I regard Part II as emergency legislation, and I think it should be regarded as such. It is not right to leave on the statute book for all time a Bill which in effect gives civil servants wide powers over the fixing of rates and thus the powers, the duties and the activities of local authorities. That is what would begin to happen. The balance of power, the shift from the pluralistic society that we have in these matters, would be more marked than ever if it got into dangerous hands. For all these three reasons— that we can meet the point of the noble Lord about its being a
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deterrent because it can be renewed; that we do need to be able to prod by refusing or debating each year if the Government do not bring forward the reform that is needed; and because it really is emergency legislation— I support this amendment.
9.41 p.m.
Lord Evans of Claughton: My Lords, I feel very strongly that this amendment and the previous one are of crucial importance, even for people who broadly agree with the thrust of the legislation, in trying to put it in a more acceptable form; a form which will enable people in local government to have some hope that their future so far as finance is concerned will not be governed by Whitehall civil servants. That is what is happening at the moment, with the fixing of GRE, with the fixing of targets, and so on. Decisions are being made by central Government in Whitehall of a kind which up to now have been made and should be made by local authority councillors, aided and advised by their treasurers and directors of finance. It is significant that the local government accountants are totally opposed to this legislation.
I am speaking as one who is totally opposed to Part II of the Bill. I think it is an outrage. But it is important to realise that even people who have admitted that they are not totally opposed to Part II still feel that there should be some restraint, and some carrot, as it were, to the Government to do something about the legislation. As long as local government finance is dependent on rates, so long will local government be dependent on hand-outs and grants from central Government. Consideration has been given to this for many years. and if one takes the number of years that the reform of local government finance has been considered and add five years to it, one has had something like 20 to 25 years for civil servants and Ministers to come up with some kind of additional revenue for local government.
As I have said frequently in your Lordships' House, I have been on working parties and on other bodies of my own party, aided by the advice of experts. and we have had indicated to us that there is no reason at all, if there is the will, why a form of local income tax coupled with rates should not be the main way of financing local government in the future, thereby reducing local government dependence on central Government grants to a manageable and healthy 30 per cent. or even less. They manage these things on the continent; and I have always taken the fairly chauvinistic view that we should be able to manage our finances at least as well as foreign countries, and should be able to set them an example. In countries such as Denmark, tiny little local authorities the size of parishes have a local income tax to assist them in financing themselves.
This amendment is moderately worded and is put forward with great moderation; it is supported by the noble Lord. Lord Northfield, with great moderation; and it is put forward by the president of one local authority association supported, in his absence, by the president of another local authority association,

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neither of which is famous for its dominance by the extreme Left-wing but are broadly speaking representative of Conservative-led authorities. Why in heaven's name are the Government proposing to do this? Perhaps they are not; I may be speaking too soon. The noble Lord, Lord Bellwin, is smiling happily there, and perhaps he is about to give way to the entreaties of the noble Lord, Lord Sandford. But on the assumption that he is not and will not— and I think I am entitled to make that assumption from the way he has behaved up until now; I was almost going to say "the pigheaded way", but I will not; I will keep that for my speech at the end, on the Motion, "That the Bill do now pass"— in the belief that perhaps he may be willing to consider this last opportunity to do something to moderate the effect of Part II of the Bill, I hope that the entreaties he has already heard and those that he will hear in the next few minutes will enable the Government to give serious consideration to this very modest but very useful and important amendment.
Baroness Birk: My Lords, following what the noble Lord, Lord Evans, has just said, I should also like to stress that this is an extremely moderate and mild amendment which has been very moderately moved by the noble Lord, Lord Sandford, and my noble friend, Lord Northfield. Personally I prefer the amendment in the names of myself and my noble friends that I moved on Report, which covered a time limit for both parts of the Bill, because I think there is a strong argument for Part I also having a time limit, just to see how it works out, especially as we have been unable to get from the Government any idea of the numbers that they consider will be among those in the first part of the selective scheme.
I would also be rather happier with a three-year trial rather than with five years. Nevertheless, any amendment that limits part of what could become an extremely damaging course which is being pursued by this Bill and which has been opposed by many people all over the House, and in particular Part II, which has been opposed quite strongly by many Members opposite, is better than none. Therefore the time-limiting of any part of the Bill must be a "good thing", so to speak, in what is a not very happy Bill (to put it at its mildest and being very mild and moderate myself at this moment) or indeed a good Bill at all.
Also, I think the time-limiting factor would be an incentive for the Government to think about the longer-term review of local government finance, which was mentioned in one particular context by the noble Lord, Lord Evans. Therefore this amendment, I should have thought, ought to have all-round support. It is something on which I fear I rather take the view of the noble Lord, Lord Evans, that the Minister does not look as though he is going to accept it— on the basis that, if he were, he would have jumped up rather quickly or indicated to the noble Lord, Lord Sandford, before hand.
This is something which I think really is not a very great concession for the Government to make. It is restricted to Part II of the Bill and does not interfere with Part I, which they evidently consider to be sacred. It gives them another two years, compared with the three years suggested in the amendments which have
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been moved during the passage of this Bill, which have come from all over the House and not just from these Benches. I think it is a generally held feeling, that the Government really must get down to considering once again the whole question of local government finance, and this will act as an incentive. My noble friends and I certainly support this amendment.
Baroness Faithfull: My Lords, I rise very briefly to support this amendment. In dealing with Amendment No. 11, moved by my noble friend, Lord Bellwin, he said that there were two aims underlying this Bill: the restraint of high spenders and at the same time the retention of local authority freedom of decision. The present world recession has forced the Government to restrain high spenders, but we sincerely hope that the world recession and the need to enforce rate capping will, in the years to come, diminish and perhaps disappear. Therefore it seems to me that we should have written into this Bill a review of the situation, so that ultimately local authorities will be given back their freedom of decision.
Lord Henderson of Brompton: My Lords, I wonder whether I may speak before the noble Lord the Minister replies. I would not have spoken if my amendments had been successful, but I feel compelled to do so as they were not. I attempted to have a time limit put on to this Part II for many of the reasons— but, in addition, some others— adduced by the noble Lords, Lord Sandford and Lord Northfield. I must say that if this general scheme in Part II had been, as seemed to have been envisaged at the time of the White Paper, activated more or less forthwith in the event of the selective scheme not working, that would have been in accordance with precedent— the sort of thing one would have expected and that one is perhaps used to.
But what I find unprecedented and find very difficult to accept, except in times of emergency, is this extraordinary business of legislating for cold storage. You put this on ice and then, suddenly, at some time in the future you take it out of the ice box and warm it up by statutory instrument, perhaps years later when the circumstances might have changed remarkably. That really goes against the Donoughmore Committee's Report of 1932 which should be required reading for everyone nowadays, as it used to be.
Here there is no time limit of any sort, and as I think has been said by the noble Lord, Lord Chelwood, this represents a very dangerous precedent, which, in the hands of an extreme government, could be a most convenient instrument. I regard this Administration as very moderate. Let me say that I am not speaking in qualitative terms; I am speaking in terms of the political spectrum and I regard them as fairly near the middle.
Another point that I should like to make at this stage is in answer to the noble Lord, Lord Bellwin, on my previous amendment. He said that Part II is the equivalent of a default power. I think that that is stretching the concept of a default power beyond what is commonly accepted in ordinary parliamentary parlance. This is a far more far reaching and searching reserve power than anything I have known as a default power. If he can give me examples of an equivalent,

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then I should be very happy to hear of them in one sense, though not happy in another. As I say, I know of no substantial piece of legislation of a non-emergency nature— and Ministers have gone out of their way to stress that this is not an emergency piece of legislation and therefore not suitable for time limitation— that is expressed to come into operation at an indeterminable date in the indeterminate future and in circumstances which cannot be foreseen. I would be very unhappy that this should go on the statute book without any form of time limitation, and for that reason I should like to support the amendment of the noble Lords, Lord Sandford and Lord Northfield.
Lord Bellwin: My Lords, if we are talking on the broader front— and it seems as if we are— may I just say that we ought to consider how we reached this position in the first place. We reached this position because, despite the attempts by not just this Government but previous governments to exhort local government for years and years to say— remember, was it Crosland?— "The party's over", the fact is that current spending in local government has been running out of control; quite the opposite to the capital spending side. It is a question of what can be afforded, and local government simply refused from 1979 to do anything about it. I am talking not of the majority of people in it— quite the contrary. I am talking of perhaps 20 per cent., but as it happens that 20 per cent. are among the largest spenders and the impact of what they do tells for all. Did we not say many times during the debates we have had that, perhaps, 16 authorities have accounted for—
Baroness Birk: My Lords. I am sorry, but it does not seem to us that this has anything to do with the amendment that is before us. The amendment that is before us is a time limitation on Part II of the Bill. It is not to do with the selective scheme or rate capping generally.
Lord Bellwin: My Lords, I sit for hours and hours and days and days and virtually never interrupt anyone. My fate seems always to be interrupted. The fact is that it was not I who started talking about the background to this amendment. The noble Lord, Lord Evans of Claughton, spoke about it. I wrote down what he said. He talked about the future not being governed by Whitehall and about handouts and grants from central government. I was doing the very same thing and commenting on that. I do not see why I should be taken to task for trying to do that when presenting my reasons for not being able to accept the amendments. That is a perfectly proper thing to do.
We are talking about the time— that is the purpose of the amendment— when this legislation will not be required. Therefore I am entitled to say that just how we got into this position in the first place is a clue as to how we shall get out of it. That is a perfectly proper point to make. We got into this position because there was overspending to an extent which, it was felt, could not be afforded. It was felt to be an imposition upon the ratepayers of very many authorities. The way to get out of it in future may well be, as the Secretary of State said, if we never say never. That is right. However, we have to get to the situation where the totality of
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spending by local government is within the bounds of what can be afforded. One way to do that would be through the selective scheme. That tackles the very authorities which have got us into this position. It is not wrong to make that point. It is perfectly proper.
Turning to the amendments, I have to resort basically to the same arguments as I used when responding to the noble Lord, Lord Henderson of Brompton. The fact is, as has been made clear throughout the passage of the legislation, the Government recognise the very wide-ranging implications of the general powers. As I said before, to introduce them would bring about a change in relationships. That is why we have made it clear that we hope they will never have to be introduced. But the Government are also aware that their hopes in the past for achieving their objectives in respect of local government spending have not been realised. We tried the grants system. We tried targets. We tried a whole new panoply of names. I never heard such names in the years that I was in local government. Now we have it all. The only way to get out of it will be when we get onside— to the level which can be afforded and where spending is at reasonable levels, and rates likewise.
Therefore, the general powers which are included in the Bill are emergency ones justifying a time limit. They are there to guard against overspending on a wider scale and therefore to provide a deterrent against such a change in the behaviour of local authorities. They form a kind of default power. However, these powers will be of no use unless they are available. It is for that reason that the powers are included in the Bill. If they were not on the statute book and ready for use, there would be a substantial time delay before they could be introduced. This would give time for substantial overspending and for the exploitation of ratepayers.
For the same reason the Government have resisted any form of time limitation on the powers either before their introduction or on their duration. Any such limitation would substantially weaken the effects of the powers by giving local authorities a clear indication either that the powers are not available for use or that in two, three or five years' time the Government will no longer have the powers available, so local government need only wait for that period of time before they begin to spend up.
The degree of overspending by some authorities is such that it is bound to take several years to retrieve the situation. One cannot return to reasonable levels of spending in some of these authorities within a year, or even two. Their spending is so way above what any similar authority spends that to expect them to do it in the short term is not practicable. We could be challenged in the courts if we were to give them targets that were unattainable. That is why it is so hard to try to impose time limits. Even if the five-year period were capable of being extended, as has been suggested, by affirmative resolution, such a provision must cast doubt on the long-term need for the availability of the general powers and would give an indication that the Government are not full-hearted in their desire to maintain the downward pressure on spending and rates.
The Government are clear that their basic strategy requires the presence of these powers on the statute

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book. Their use will be greatest if they never have to be employed. In our view, to put any kind of time limit on the power will, paradoxically, increase the likelihood of its being used. These are the reasons why I cannot accept the amendment. I say that not without some reluctance because I understand exactly what my noble friend is trying to do. I am not without sympathy as to where, at the end of the day, he wishes to be. I would want to be in the same position, but I feel that we have more likelihood of being there if the provision remains in the Bill without a time limit. Let us earn the point where we can say that we are entitled to look at something else.
Lord Peyton of Yeovil: My Lords, I hope that my noble friend will forgive me if, briefly, I make one or two comments on the reply that he has just given. The Government have persuaded themselves and many of their supporters, including me, that because some local authorities persistently break the rules, they must resort to some extraordinary measures. I accept that. But I also find it very difficult to disagree with the arguments of the noble Lord, Lord Northfield, that this is emergency legislation in some shape or form.
The assumption that some local authorities, no matter what the circumstances are, will continue to break the rules is, I believe, unacceptable pessimism. We must try to improve upon that by one of two ways. The first way is by introducing, at long last, some more satisfactory ways in which local government can be financed. In all the years that I have been in Parliament I cannot recall any sortie into the area of local government by central government which has been particularly helpful to the common weal, or indeed, has forwarded the cause that the Government of the day had in mind.
The second alternative— and one which is offered by this amendment— is that this temporary provision should have its life extended by a resolution of both Houses of Parliament. That seems to me to remove so much of the force which would otherwise have been behind the arguments of my noble friend who, as a Minister, has spoken on behalf of the Government.
I hope that he will think again about this question. I speak as one who has little sympathy with that minority of local authorities which have thoroughly misbehaved, which have outraged both the rules and the basis of consent on which, in a free country, all our affairs have to be conducted. I believe that a Government with a very substantial majority ought still to show some restraint and care before they behave in the same way to those who outrage every canon of democracy.
Lord Chelwood: My Lords, perhaps I may make a brief comment on my noble friend's reply, which I found extremely disappointing. All that the amendment is seeking is something quite simple— that the Government of the day should come to Parliament in five years' time if they wish to renew these powers; nothing more, and nothing less. Assuming that these powers are necessary— I do not think they are, and I have explained why during the committee stage, and again today— why are Her Majesty's Government not willing to accept an amendment which asks simply that they should be renewed in five years' time if they
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are still needed? My noble friend has not answered that point; he did not address himself to the amendment. I shall vote for it without any hesitation at all.
Lord Sandford: My Lords, my noble friend said at the beginning of his remarks that local government finance was running out of control; and so it is. One of the reasons is that there are certain units of local government which are being led by irresponsible, defiant and extravagant leaders. Another of the reasons is that successive governments, ever since 1974, have failed to keep local government financial arrangements a match for the situation with which they have to deal. We are now in the position where the local electorates— who are the right people to control local government finance— do not have the mechanisms available with which to do so. It is that which has to be put right.
I agree with my noble friend, Lord Peyton when he says that to enact legislation on the assumption that it is impossible to put power hack into the hands of the local electorate is really to sink to depths of pessimism which are not justified. It will be difficult to reform local government finance. It is not going to be impossible. But I believe it is necessary for Parliament to introduce some mild spur, on government, central government, whichever party it might be, to get on with the task and make a proper job of it.
The second point that my noble friend makes is that it is necessary for him, and other Ministers in the Government, central government, to have an essential longstop to operate behind Part I of this Bill; to have some sort of nuclear deterrent— those were the words he used at Committee stage— to have an ultimate sanction which can be brought out from cold storage and into action. I think all those phrases are unfortunate because in a democracy there is surely only one ultimate sanction, only one nuclear deterrent, only one essential longstop: that is the ballot box. We are introducing the ballot box for the control of industrial relations. We rely on the ballot box to decide which Government will be elected, and we ought to be relying on the ballot box to decide how the finances of local government should be controlled.
It is because my noble friend gives no hope that the Government are in earnest in getting on with this essential reform, and because I have had nothing but support from the entire House, that I feel I must press this amendment to a Division.
10.7 p.m.
On Question, Whether the said amendment (No. 13C) shall be agreed to?
Their Lordships divided: Contents, 51; Not-Contents, 66.

DIVISION NO. 6

CONTENTS

Attlee, E.

Collison, L.

Aylestone, L.

David, B.

Bernstein, L.

Dean of Beswick, L.

Birk, B.

Elliot of Harwood, B.

Brooks of Tremorfa, L.

Evans of Claughton, L.

Broxbourne, L.

Faithfull, B.

Bruce of Donington, L.

Graham of Edmonton, L.

Chelwood, L.

Grey, E.

Cledwyn of Penrhos, L.

Hanworth, V.

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Harris of Greenwich, L.

Rodney, L.

Henderson of Brompton, L.

Sandford, L. [Teller]

Houghton of Sowerby, L.

Seear, B.

Howard of Henderskelfe, L.

Sharples, B.

John-Mackie, L. [Teller]

Shaughnessy, L.

Kilmarnock, L.

Stewart of Alvechurch, B.

McCarthy, L.

Stewart of Fulham, L.

McCluskey, L.

Stoddart of Swindon, L.

McIntosh of Haringey, L.

Stone, L.

MacLehose of Beoch, L.

Taylor of Blackburn, L.

Molson, L.

Tordoff, L.

Northfield, L.

Underhill, L.

Onslow, E.

Vickers, B.

Peyton of Yeovil, L.

Walston, L.

Pitt of Hampstead, L.

Wedderburn of Charlton, L.

Ponsonby of Shulbrede, L.

White, B.

Rochester, L.

NON-CONTENTS

Airey of Abingdon, B.

Grantchester, L.

Avon, E.

Gray of Contin, L.

Bauer, L.

Hailsham of Saint Marylebone, L.

Bellwin, L.

Beloff, L.

Hood, V.

Belstead, L.

Hornsby Smith, B.

Brabazon of Tara, L.

Ingrow, L.

Brougham and Vaux, L.

Lane-Fox, B.

Bruce-Gardyne, L.

Lindsey and Abingdon, E.

Caithness, E.

Long, V.

Campbell of Alloway, L.

Lucas of Chilworth, L.

Campbell of Croy, L.

Lyell, L.

Carnock, L.

McAlpine of West Green, L.

Cockfield, L.

Macleod of Borve, B.

Coleraine, L.

Margadale, L.

Colwyn, L.

Maude of Stratford-upon-Avon, L.

Cottesloe, L.

Craigavon, V.

Mottistone, L.

Craigmyle, L.

Murton of Lindisfarne, L.

Crathorne, L.

Orr-Ewing, L.

Croft, L.

Pender, L.

Davidson, V.

Penrhyn, L.

De La Warr, E.

Renton, L.

Denham, L. [Teller]

Saltoun, Ly.

Denning, L.

Savile, L.

Dilhorne, V.

Skelmersdale, L.

Elles, B.

Swinton, E. [Teller]

Elton, L.

Tranmire, L.

Fisher, L.

Trefgarne, L.

Fortescue, E.

Trumpington, B.

Gardner of Parkes, B.

Vaux of Harrowden, L.

Glanusk, L.

Waldegrave, E.

Glenarthur, L.

Whitelaw, V.

Gowrie, E.

Wynford, L.

Resolved in the negative, and amendment disagreed to accordingly.
10.16 p.m.
Lord Ponsonby of Shulbrede: My Lords, before we take the next amendment, I wonder whether the Government Chief Whip could make a statement as to whether it is proposed to commence the Committee stage of the Trade Union Bill this evening.
Lord Denham: My Lords, I am most grateful to the noble Lord, Lord Ponsonby. I think that it has been generally agreed, having consulted various channels outside that it would probably be inappropriate to proceed to the Trade Union Bill this evening, as we have a full day for it tomorrow. We shall of course be finishing the business that we are on at the moment, but after this present item of business is over, we shall be adjourning the House for the evening.
Clause 10 [Authorities subject to general control]:
Lord Evans of Claughton Lord Evans of Claughton moved Amendment No. 14:
Page 9, line 4, at end insert—
("Provided that where, in any financial year, the Secretary of State has, pursuant to sections 57(1) and 61(3) of the Local Government, Planning and Land Act 1980, made two or more determinations of an authority's grant-related expenditure, for the purposes of this subsection account shall only be taken of the higher or highest amount so determined.")
The noble Lord said: My Lords, I should like in considering this amendment also to consider Amendment No. 15, as they are on the same problems.
Amendment No. 15: Page 9, line 9, at end insert—
("disregarding any expenditure by that authority, which, by virtue of section 8(4) of the Local Government Finance Act 1982 is to be disregarded for the purposes of the said section 59(6)(cc) of the said Act of 1980 and section 8(3)(c) of the said Act of 1982.")
The first amendment seeks to provide that, of the number of GREs issued to an authority in respect of any year, the highest GRE shall count as the only one for the purpose of deciding whether an authority's expenditure is within its GRE and thus whether an authority becomes eligible for exemption from the general scheme of rate limitation. For the year 1981– 82, it is possible that an authority would have had five different GREs. I shall not bore your Lordships by going through them, because, with my sensitive ear to your Lordships' House, I feel that noble Lords are now anxious to be getting home after all the earlier excitements and disappointments.
There are very good reasons for there being possibly five different bases for a GRE. Some depend upon actual expenditure data— education poolings; others depend upon interest rate charges, and so on— contributions to the housing revenue account, amended supplementary reports to reflect boundary changes, and so forth. In our submission, it is right for the purpose of grant distribution that GRE should continue to be updated for some time after the end of the year to which it refers. Local authority treasurers can at least anticipate those changes and account for them accordingly.
But the point at issue in the first amendment comes from the fact that, among all those changes, there will be gainers and there will be losers. Some authorities will find that they end up with a higher GRE and others with a lower one. Without this amendment, an authority could find itself in the position of planning to spend just below its GRE, or even closing its expenditure accounts on the basis of spending just below it, and then being presented in a late supplementary report from the Government with a lower GRE which had turned it into an overspender, as it were, overnight. That does not seem equitable.
There is a precedent for adopting that approach. For 1982– 83 an authority which spent above target but below GRE was, as the noble Lord the Minister knows, not penalised. In defining GRE for that purpose, the Government used the highest of any GRE given in a main or supplementary report. Therefore, it is a precedented use for resolving what count be extremely unfortunate circumstances, impossible 'to predict, for some local authorities which are doing

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their best to comply with the Government's targets, and so on. The second amendment which I said I would speak to relates to the concession granted by the present Government in respect of the general scheme of rate limitation. That concession means that either a four-year run of complying with the expenditure target; or a four-year run of complying with grant related expenditure, would secure an exemption from the general scheme or rate limitation.
Therefore the point of this amendment is to make it clear that disregards— a very unpleasant non-word which relates to items of expenditure on which local authorities are not penalised— are taken into account when determining compliance with the target for the purposes of this Bill. The Government say, and I think the noble Minister has said, that disregards will be taken into account, but this has not been made clear in the Bill itself. It is for this purpose that the second amendment has been put down.
I hope, with that optimism which keeps Liberals going over the years, that on this occasion the Minister will gracefully say how much he admires the superb way in which I have delivered this very boring speech, and that he will give way and incorporate my proposal in legislation. I beg to move.
Lord Pitt of Hampstead: My Lords, before the Minister replies I think this is a good occasion on which to raise the whole question of the grant-related expenditure assessment. Most noble Lords will remember that during consideration of the 1980 Bill I expressed concern about the grant related expenditure assessment. Everything that has happened since has worried me more.
Yesterday I picked up the Observer and I saw on the front page that there were 15 suggested authorities for possible rate capping. Eight of them were in London, in addition to the GLC and the ILEA. What is more, six of those authorities I well know are in very deprived areas. It seems to me quite incredible that authorities in very deprived areas should be accused of spending too much in order to look after their areas. Therefore I wonder about the criteria that are used for the grant-related expenditure assessment.
We have not yet reached the stage of passing this Bill, but it will in fact give much greater authority in regard to GREA than was first proposed when it was merely intended to be a rough guide for the rate support grant award. I want to hear what the noble Lord the Minister has to say about this. I want to ask the Minister whether the Government will look again at the criteria that are used for determining grant related expenditure assessments.
I notice that another of the boroughs that I regard as being very deprived was also named as a possible rate capping area. So if seven of the most deprived areas are being rate capped, there must be something wrong. I should be glad if in his reply the Minister would take this point on board.
Lord Bellwin: My Lords, if the noble Baroness, Lady Birk, will promise not to question my speaking so off the subject, I should be very glad to comment on what the noble Lord, Lord Pitt, has said. But first I must have at least a nod of acquiescence from her that
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indicates that this is all right, because I should like nothing better than to respond to the last points made.
But, before I do so perhaps I may just say to the noble Lord, Lord Evans, who earlier referred to me in a certain way, that I rather liken him to General Custer at this stage, because it looks to me as if this is his last stand on this matter.
The noble Lord, Lord Pitt, is of course right to raise the question of GREs. The fact is that what the noble Lord, Lord Pitt, refers to as the deprived areas, those in the greatest need, are exactly those that have the highest GREs. As I pointed out in debating the Bill in Committee, the personal social services GRE factor, for example, in Hackney is four times higher than in like authorities. It is, I think, the highest in the whole country. That is exactly why it has the highest GRE.
As to the complaint about why such authorities come to be within the rate capping areas, the reason is that, despite the extra amount they receive through having the highest GREs, their spending is still way above that of like authorities. To find out why it is so high you have to be willing to examine what they spend their money on. Then you begin to get the answers to your own question. It is at that time that you find things that no one in this House would try to justify.
Among authorities that are short of resources, where are the priorities? Are the priorities in the large personnel departments and in the public relations departments? Or are they with people who need better housing, repairs and improvements? That is what the noble Lord should be concerning himself with, not the system. The system is all right. Perfect, it is not. There has never been a perfect way to distribute ₣ 12 billion or ₣ 13 billion of grant in order to equalise payment among like authorities. At least, however, it is a darned sight better than anything we had before. The noble Lord will know that there is the option at any time within the grants working group to make those GREs better, You can lay them out, the 63 or so that there are, and improve them. I am for that, by all means. But do not blame the system because there are people who work outside it and abuse it. That is where matters go wrong.
Lord Pitt of Hampstead: All right, you have given them four times the GRE for personal services—
Noble Lords: Third Reading!
Lord Denham: My Lords, will the noble Lord give way? It is not in order for any noble Lord to speak more than once on a Third Reading Motion.
Lord Pitt of Hampstead: I am not speaking, my Lords. I am putting a question to the noble Lord. What is wrong with that?
Lord Denham: My Lords, if the noble Lord, Lord Pitt, will use the formula "Before the noble Lord sits down" he will then be in order.
Lord Pitt of Hampstead: My Lords, he was not sitting down: I am sorry. I am not accepting that; he had not finished. He was in the middle of his speech. I was asking a question.
Lord Denham: My Lords, if that is the case, I can only beg the noble Lord's pardon for misunderstanding him.
Lord Pitt of Hampstead: My Lords, I was merely asking a question. The noble Lord said that he has given Hackney— he chose Hackney— four times the GRE for its personal social services that he has given other territories. I am saying that he should have possibly given it six times more. That is all that I am saying.
Lord Bellwin: My Lords, clearly, I should love to debate this issue, but your Lordships will expect me to answer some of the other points, so I cannot do so tonight. I must deal with amendments, specifically despite the latitude that the noble Baroness gave me. These amendments are designed to stretch the benefit of the concessions that we have made.
I do not wish to detain the House with some of the finer points of the RSG system. One really needs to look at why GREs may change after the year has started. There are three principal reasons. First, the GREs include an element which is intended to reflect the cost of financing the allocation of capital expenditure made to each authority in relation to that year. In practice, it has always proved impossible because of timing difficulties to incorporate into the RSG settlement the figures for actual capital expenditure. It has been the practice, therefore, to make the settlement on the basis of estimated allocations and to update those at a suitable later date in a supplementary report. The noble Lord, Lord Evans, is aware of this. He has known the system for long enough.
The second reason why GREs change is that the grant system still allows for the fact that interest rates vary throughout the course of the year. GREs and grant go up if interest rates increase, and vice versa. Again, these changes are made from time to time in supplementary reports. The third reason for some changes lies in simple computational errors made either by the department or by local authorities themselves. That is quite a mixture of reasons, and each has different implications. Unless the noble Lord wishes me to do so, I will not go into depth on each of those: I do not think they call for that.
In my view, Amendment No. 14 is too heavily conditioned by the uncertainties which arose in the early stages of the new grants system. The later record is much more stable and should give no difficulty to an authority which keeps a close watch on its spending. The real answer to the problem of variability in GREs is to find ways to further reduce the scope for mid-year variation. We are very interested in such possibilities, and would welcome discussions with the associations. That is something to which we might look forward.
Amendment No. 15 seeks to ensure that any expenditure disregarded for the purposes of expenditure targets under the 1982 Act should also be disregarded for the purposes of deciding whether or not an authority has complied with its expenditure target, and thus is entitled to exemption from rate limitation under the terms of Clause 10. I think the noble Lord will be interested when I say that this amendment is unnecessary. My advice is that Clause
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10, as drafted, already provides for disregarded expenditure to be allowed for in decidng whether or not an authority has complied with its expenditure target for these purposes. The amendment is unnecessary because it would only duplicate an existing provision in the Bill. With that explanation, I hope the noble Lord will feel able to withdraw his amendment.
Lord Evans of Claughton: My Lords, with practically any explanation I would probably not proceed any further with these amendments at this hour of the night. I must say that I think they are both important points. What the Minister said about the second amendment, Amendment No. 15, will cover the matter adequately, because we can wave his Ilansard speech at him in future if he tries to go back on it. He said— I hope he is right— that it is already covered in the Bill.
On the first point, I understand why there are different GREs. As I said, there were up to five in 1981– 82. All I was trying to persuade the Minister to agree was that it is fairer, more equitable and more understandable if the local authority knows that it is going to have only one of those— the highest— upon which it has to rely, and does not continually find itself having a different GRE against which it has to make its target.
I consider that, on the whole, the purpose of moving the amendments— to find out the views of the Government, and particularly their belief that the second one is covered— has been met and is sufficient ground to enable me to ask your Lordships' permission to withdraw Amendment No. 14.
Amendment, by leave, withdrawn.
[Amendment No. 15 not moved.]
Clause 14 [Provision of information to ratepayers]:
10.33 p.m.
Lord Underhill Lord Underhill moved Amendment No. 16:
Page 11, line 13, after ("to") insert ("or levy imposed upon")
The noble Lord said: My Lords, on behalf of my noble friend Lads' Birk I rise to move Amendment No. 16, which is supported also by the noble Lord, Lord Evans of Claughton. It will be convenient for the House if I speak also to Amendments Nos. 17 to 22.
Amendment No. 17: Page 11, line 16, after ("to") insert ("or levies imposed upon")
Amendment No. 18: Page 11, line 18, after ("precepts") insert ("or impose levies")
Amendment No. 19: Page 11, line 22, after ("issued") insert ("or levies imposed")
Amemhnent No. 20: Page 11, line 28, after second ("to") insert ("or impose levies upon")
Amendment No. 21: Page 11, line 33, after second ("to") insert ("or impose levies upon")
Amendment No. 22: Page 11, line 34, after ("precepting") insert ("or levying")
Clause 14 was added to the Bill in Committee by Government amendment. The clause extends the Secretary of State's power to make rules governing what shall be contained in the rate demand note. The clause provides that the demand note shall include clear information as to how the rate bill is apportioned between the rating and precepting authorities. It will also cover information relating to expenditure,

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financing and changes in the rate or precepting levels. To the extent that this increases accountability, this clause is to be welcomed.
The noble Lord, Lord Bellwin, said that this kind of information on the demand note will be particularly useful in ensuring accountability of the proposed new joint hoards. He said on 8th May, at col. 896, that this is important,
"because ratepayers will be less well acquainted with the role of these upper tier authorities".
I hope that that will be kept in mind when we are considering the purpose of the amendment. That led my noble friend Lady Birk to inquire whether the relevant Ministers will provide similar information on the Metropolitan Police and the London Regional Transport precepts for inclusion in the rate demand notes. It has become very clear from subsequent correspondence between the noble Lord, Lord Bellwin, and my noble friend that the new levy from London Regional Transport will not be included in the ambit of the information to be given to ratepayers. In fact, the Minister stated in his letter that the clause did not apply to that:
"because it is a levy and not a precept".
It is surely only right for London ratepayers to be given the same information in respect of their payments towards public transport, as is given to ratepayers in the rest of the country. If the Government's proposals for abolition are approved it will include joint boards acting as public transport authorities in those particular conurbations.
It will not be good enough for the Government to argue that London Regional Transport will be a nationalised undertaking. As we have debated for many hours on the London Regional Transport Bill, up to two-thirds of the cost will fall upon the ratepayers of London. Therefore, there is no reason why this information should not be given in the rate demand note.
The Minister also argues that the order for the London Regional Transport levy will be the subject of an affirmative resolution in both Houses and therefore the Government do not consider it appropriate to include the LRT levy within the scope of Clause 14. That is no argument for not giving ratepayers information. I ask your Lordships to remember the quotation that I gave regarding what the noble Lord, Lord Bellwin, said at the last stage of the Bill. The noble Lord said that ratepayers will have little information on these top tier authorities. It can also be said that ratepayers will have little information about the expenditure and financing of London Regional Transport as regards which they will be meeting up to a maximum of two-thirds of the cost. The same argument could be advanced for the rate determination of authorities designated under Part I. There is an order for the maximum rate, which will also be the subject of affirmative procedure. Therefore, one can argue— using the Minister's argument— that there is no need therefore to give that information on the rate demand note.
We want the maximum information. The inclusion of the London Regional Transport levy will be in keeping with the spirit in which the Government have put forward Clause 14. The amendment will require
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that the rate demand notes to ratepayers shall include information on levies, such as that as regards LRT, as well as precepts. I hope that the Minister will feel that this is a simple, common-sense amendment which does not touch on party politics at all. It gives the ratepayers the maximum possible information, which is something that we all want. I hope that the Government will accept this amendment.
Lord Bellwin: My Lords, this is indeed a question of accountability. Under the LRT Bill my right honourable friend the Secretary of State for Transport is seeking powers to recover from London's ratepayers, by means of a levy, up to two-thirds of the grant which he will pay each year to LRT to support London's public transport services. Certainly— and I make no hones about it— he must be required to account for that levy, and there is nothing between us in that respect. The question is: to whom?
Constitutionally, my right honourable friend the Secretary of State is accountable to Parliament. Clause 13 of the London Regional Transport Bill requires him to lay an order each year in another place specifying the amount in the pound to be levied, the factors which he has taken into acount in fixing the levy, and the means by which it has been calculated. As the noble Lord, Lord Underhill, rightly mentioned, I referred to the fact that this annual order is subject to an affirmative resolution. So there is likely to be a full debate on all aspects of the ratepayers' levy, including the policies which underlie it. This means that my right honourable friend will have to account to Parliament fully and specifically for this levy each year.
Clause 14 of the Rates Bill is intended to apply to rating and precepting authorities, which are accountable to ratepayers and not directly to Parliament. I hope that the noble Lord will accept that the constitutional position of my right honourable friend the Secretary of State for Transport is quite different and that appropriate provision is being made for him to account for the levy for LRT in another place. For this reason I do not consider that it would be appropriate to extend the provisions of Clause 14 to enable my right honourable friend to make rules about the provision to ratepayers of information on levies, a power which, for the reasons that I have outlined, he would not in any case wish to use.
Here we must be sure that we are getting accountability. The type of accountability that we are discussing through this levy and through the parliamentary proceedings is a far greater and more exposed kind than anything we get in any of the other procedures that pertain. Although I entirely accept the point that the noble Lord, Lord Underhill, makes as to desirability (I am all for it and with him on that), I believe that in this case the amount of accountability will be much more— and there is no harm in that— than anything we might have had under any other method.
Lord Underhill: My Lords, I am disappointed with the Minister's reply. He puts the question: to whom shall the Secretary of State be accountable? He argues the case that the affirmative resolution procedure is sufficient. But surely under Clause 14, when we talk

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about accountability we mean accountability to the ratepayers, bearing in mind that the ratepayers are to meet two-thirds of the cost of LRT. Therefore, they should have information as to how that money is being spent. That is all we are asking for. Bearing in mind what I said in my opening remarks, the maximum rate to be determined by the Secretary of State under Part I is also the subject of the affirmative resolution procedure.
However, that information is to be given on the rate demand note. Why should not that apply as regards LRT? Obviously, at 10.40 at night I shall not divide the House on an amendment of this kind; but I believe that common sense is on the side of the amendments. There is no other stage in this House when we can debate this matter; but I hope that the Government will recognise that we are not just putting forward amendments for the sake of putting them forward. We are concerned that the maximum amount of informamation should be given to ratepayers. In the circumstances, I have no alternative other than to beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 17 to 22 not moved.]
Lord Mottistone Lord Mottistone moved Amendment No. 23:
After Clause 15, insert the following new Clause:—
Hereditaments for storage.
(" . There shall be inserted after paragraph 2(f) in Schedule 1 of the principal Act—
"(g) the hereditament is held for the purpose of being available for the storage in the course of any trade—

(i) of goods or materials which are to be used in the manufacture of other goods or materials, or

(ii) of goods or materials which are to be subjected, in the course of a trade, to any process, or

(iii) of goods or materials which, having been manufactured or produced or subjected, in the course of a trade. to any process, have not vet been delivered to any purchases. or

(iv) of goods or materials on their arrival by sea or air into any part of the United Kingdom.".")

The noble Lord said: My Lords, the purpose of this amendment is to remove from a local authority the right to levy rates on empty warehouses. As your Lordships know, I am advised on this point by the CBI. I welcome the recent order which has removed the right of local authorities to charge rates on empty industrial premises. However, I do not believe that this goes far enough to alleviate the burden on business. Rates can continue to be required to be paid on empty warehouses, which is contrary to that basic concept of rates as a tax on beneficial occupation.
The rating of empty warehouses, even at the present maximum of 50 per cent. of the full rate, has caused considerable financial hardship for many businesses, particularly those in areas hardest hit by recession. On average, rates represent about 10 per cent. of the total cost of running a warehouse; but in some cases they are as much as 30 per cent. This is a heavy burden to face at a time when the ability of firms to pay rates has been reduced and at the same time the demand for premises has fallen and it has become increasingly difficult for warehouses to be let or sold.
I believe that perhaps the major consideration that influenced the Government to limit suspending empty property rating to industrial premises alone was concern at the loss of revenue that was caused for local authorities. It is difficult to know what the loss would be if the suspension was extended to cover warehouses, because it is estimated that it could be as little as ₣ 10 to ₣ 15 million in terms of actual lost revenue, given that about half the local authorities— and I think that includes my noble friend's late local authority of Leeds, as he has told us in the past— already exercise their discretion not to levy empty-property rate. Compared with the total local authority income of ₣ 25 billion, this loss of revenue to councils will be tiny, under 0.05 per cent., yet the benefit to the businesses concerned in the jobs they do, and could provide, would be considerable.
The amount that the Government or local authorities will lose is tiny, but the important thing is that the benefit to individual businesses, particularly ones which may be hard hit or ones which may be in areas where they are being rated in such a way, can be proportionately very high. It is the unfairness of the spread, and the amount that it may hit the individual company as compared with the amount that the Government as a whole might forfeit, which makes it seem to me reasonable that this amendment should be accepted.
It is unfortunate that it is late in the stages of the Bill and that the wording may not be perfect, but I hope that perhaps my noble friend might have some way in which he can sort this out and work in my direction. Unfortunately it is so late that it may be that I cannot have the support from all sides of the House that I was hoping for, but perhaps I may get a little just to show my noble friend that it is a point which is widely accepted as being reasonable. I beg to move.
Lord Evans of Claughton: My Lords, very briefly, I should like to support the amendment set down in Lord Mottistone's name and in my own name. In his excellent speech he has said nearly all that needs to be said. All I need to do, I suppose, is to declare an interest in that I am president of the National Association of Warehouse Keepers, and they are completely, 100 per cent., in support of this amendment.
I think that the noble Earl. Lord De La Warr, and possibly one or two other noble Lords, may wish to speak on this debate, and all that I need to add is that in addition to the difficulties that the noble Lord, Lord Mottistone, described, many warehouses and hereditaments of this kind are in areas adjacent to the new free ports and the enterprise zones, where they are being confronted by competitors having rate-free occupation while they have to pay a rate, which seems unfair in view of the Government's generosity to industrial premises generally.
In view of the small cost it would be to the Government and of the great benefit it would be to the hard-pressed owners and tenants of these buildings, I should have thought that it would be in the Government's interests to encourage the industries to embark on a more prosperous period again by giving them the same kind of benefits as their competitors

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often enjoy just across the road. I support the amendment.
Earl De La Warr: My Lords, I, too, should like to support my noble friend's amendment. Today, when manufacturing industry is still heavily pressed, there is a great need for increased profits and, more than that, for increased capital formation so that industry may do its best to reinvest, particularly in places where it is needed. It is for that reason that I am interested in this amendment.
If it be true— and I have no doubt that it is— that on average the cost of warehousing can be 10 per cent. of the costs and sometimes up to 30 per cent., that cost is part of industry's prices. That is what they have to charge the customers, and that is why it would be a good thing, in view of the minimal cost to the country, if my noble friend could accept this modest but important little proposition.
Lord Rochester: My Lords, the noble Lord, Lord Mottistone, has asked for support, and if the House will forgive me, as I have not once spoken during the course of this Bill until this almost last moment of the Third Reading, I should like to say just a word in support. I am sure that it is true that in some cases the cost to individual businesses of the rating of these warehouses can be crippling. As the noble Lord, Lord Mottistone, and my noble friend have said, the loss of revenue to the Government is relatively small, and I should like to add my voice to those who have urged the Government, even at this late stage, to accept this amendment, if they possibly can.
Lord Bellwin: My Lords, certainly, I am in considerable sympathy with the point that has been raised. The warehouse industry, in particular, in circumstances such as those described by the noble Lord, Lord Evans, has had problems and has been making overtures for a long time. The amendment, as such, is seriously defective because the definition of the property to be covered seems to be likely to be unworkable. I could say much more about this, but the hour is late.
However, in all the circumstances, because the Government sympathise with the case in point, what I can do is to undertake to consider again whether we can do anything to help by way of extending our 1984 regulations to cover also those properties which are concerned, perhaps in the next rating year. I think this is a way in which I could make a move which would be helpful. I gladly undertake to have a look at that matter in that way and, perhaps, with that, my noble friend will feel able to withdraw his amendment.
Lord Mottistone: My Lords, I am indeed grateful that at this late hour my noble friend should be concessionary and should be prepared to take us a long way. I hope that he is successful with his inquiries and will get the matter in question into his order for next year. With that, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 19 [Short title, interpretation and extent]:
Lord Bellwin Lord Bellwin moved Amendment No. 24:
[Printed earlier: col. 63.]
On Question, amendment agreed to.
Schedule 1 [Miscellaneous amendments and repeals]:
Lord Bellwin Lord Bellwin moved Amendment No. 25:
[Printed earlier: col. 61.]
On Question, amendment agreed to.
Lord Bellwin Lord Bellwin moved Amendment No. 26:
[Printed earlier: col. 62.]
On Question, amendment agreed to.
Lord Bellwin Lord Bellwin moved Amendment No. 27:
[Printed earlier: col. 62.]
On Question, amendment agreed to.
Lord Bellwin Lord Bellwin moved Amendment No. 28:
[Printed earlier: col. 62.]
On Question, amendment agreed to.
Lord Bellwin Lord Bellwin moved Amendment No. 29:
[Printed earlier: col. 62.]
On Question, amendment agreed to.
10.54 p.m.
Lord Bellwin: My Lords, I beg to move that the Bill do now pass. It is a controversial measure which has raised strong feelings, but I am glad to say that, despite the controversy, the debates have been very much up to the highest standards of your Lordships' House. Perhaps I may say to our opponents that I suppose this is one issue on which we shall certainly have to differ. But I beleive that over the next two years the proof of the pudding will be in the eating. There is no doubt that a small minority of authorities have oppressed their ratepayers, and the object of this Bill is to protect them through limiting the rates, in regard to that small number. I do not want to make a long speech, but I think it would be wrong to let the Bill leave this House without, very briefly saying, a word of thanks to my noble friends Lord Avon and Lord Skelmersdale for their help in sharing the burden of presenting the Bill to your Lordships' House. I have benefited greatly, as always, from their help and advice. Perhaps I may also thank noble Lords on the Front Bench opposite, who have been fair minded, while they have presented their arguments in a telling and eloquent way. It would be an understatement to say that this is not the first time I have been opposed by the noble Baroness, Lady Birk, whose efforts have brought zest, enthusiasm and not inconsiderable skill to the presentation of her arguments— and, one day, she will let me conclude mine, I am sure. Nevertheless, I am grateful to her.

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Also, I would thank the noble Baroness, Lady Nicol, and the noble Lords, Lord Underhill and Lord Graham, for their own brand of opposition. They have, as always, been persistent and doughty opponents, and yet their mixture of insight and courtesy has done much to enable us to pilot through the Bill.
There are others I should mention: there is my noble friend Lord Sandford, with whom I never seem to get through a Bill on local government matters, without at least one or two Divisions. He and my noble friend Lord Ridley always put their cases extremely well. Lucky indeed are the associations to have them as advocates. I should like to thank my noble friend Lady Gardner, who always helps me, for her many interventions in the Bill. I should like also to thank my noble friend Lady Faithfull, who also at times feels obliged not to let me go through with everything that I do. But she is never less than helpful and it is always a pleasure, if I may put it this way, to do business with her. I should like to thank in his absence my noble friend Lord Broxbourne for his legal expertise and, as always, my noble friend Lord Mottistonc. I am glad that at the very last gasp it looks as though we might be able to do something to help him.
I should like also to thank the noble Baroness, Lady Stedman, and the noble Lord, Lord Evans, and also, in his absence, the noble Lord, Lord Kilmarnock. I am sorry that I have not been able to be more helpful to them. On the Cross-Benches, of course, I should like to thank in his absence the noble Lord, Lord Marsh, who was a great support to us. I was appreciative of that. Finally, I am grateful to all who have taken part in what has not been an easy Bill to take through your Lordships' House. I say again that I am sure that in the course of time it will do all that we hope of it. While I recognise the concern that has been expressed, I think that we now have to see what the Bill produces at the end of the day.
Moved, That the Bill do now pass.— (Lord Bellwin.)
Baroness Birk: My Lords, at this late stage— today it has certainly seemed as though we were spending all day on rate capping, and indeed I think we were— I should like to thank the noble Lord the Minister for his cheerfulness and courtesy and even his long suffering when I tried— this time it was on only one occasion— helpfully to keep him to his point. I thought I was helping him and enabling him to undress what he was trying to save from the clothing that had been supplied, no doubt, by the department— I am sure not by himself. I am also very grateful for the help of the Front Bench team over here and for the help of other noble Lords who have supported us in our opposition to the Bill.
As we come to the end of its passage through the House, I really must express great disappointment and frustration in our having achieved practically nothing right across the House, despite the unity of the three local authority associations and their dislike of the Bill, despite the criticism not only from these Benches, from the Alliance and from the Cross-Benches, but also from the many Tories whose loyalty to their party has never been in doubt but who obviously felt very strongly about the Bill.
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Very little in it has been changed. Indeed, when the Minister starts off by saying, "I am in considerable sympathy", my heart sinks because I know that that is another turn down and he is saying it with courtesy. I hope that sometimes he is saying it with regret because I should like to feel that there are parts of the Bill which he has disliked perhaps as much as we have. Indeed, the more we have examined the Bill in detail, the more seriously we are worried about one unhappy aspect of it: the accretion of power to the Secretary of State. Our concern is not just with the power being given to the Secretary of State at the expense of local councillors, although that is worrying enough, but with the lack of accountability of the Secretary of State in the exercising of his power. One theme running through very many of the hundred or so amendments which we have unsuccessfully tried to make to the Bill is that very accountability. It ill befits the Government to berate local authorities for lack of accountability when the Government themselves resist all attempts to increase the Secretary of State's accountability.
Time and again the Government have refused amendments which would have inserted more parliamentary approval and more explicit reporting to Parliament into the Bill without in any way cutting across their own objectives, even though those might be objectives with which we do not agree. This evening we had two outstanding examples. First, there was the amendment moved by the noble Lord, Lord Henderson of Brompton, which was a clever, careful and moderate way to deal with supervision by Parliament of the Bill. Then there was the amendment— there was a Division upon it— moved by the noble Lord, Lord Sandford, and supported by my noble friend Lord Northfield. Again, there was this very moderate amendment which received a response of very great feeling and some passion from many Peers opposite, which was reflected in the voting figures.
Furthermore, we have not managed to improve the drafting, which on the whole I must say is absolutely ghastly, but having been a Minister myself I know that Ministers are not responsible for the drafting and often have to mouth the un-understandable for the incomprehensible muddle— anyhow, it is very, very bad indeed. For example, I need not remind the House of the mental gymnastics we have had to perform to understand what is meant by "principles" and the logical paradox of how many different "principles"' are needed to ensure equal treatment. I use the word "principle" with quotation marks, since this Bill really debases the hitherto accepted meaning of that word.
Another leit-motif has been the need to do something about local government finance. No one is happy with the present mess, which will be exacerbated rather than helped by this Bill. In the space of four years the Government have prescribed three different spending reforms for a local authority: GREA, target and expenditure limit. How many councillors, let alone electors and ratepayers, will be able to understand these?
This Bill is a child of the Treasury, nurtured by the Department of the Environment and not, in this context, a very healthy heritage: yet the Government have resisted all attempts to establish a review of local government finance or the rating system. The

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argument used was that a further review would impede the progress of this Bill. If it had, what a good thing that would have been, even though our amendments scrupulously avoided any element of delay. I have said enough at this time of night, so I will just finish by saying that the Bill is ill-judged, hugely unpopular, probably unworkable and a disgrace to parliamentary and local democracy.
Lord Evans of Claughton: My Lords, may I be associated briefly with the remarks that have been made. The thing that pleased me most about the debates during the various stages of the Bill was that I was able to go away for a holiday to Ireland in the middle of it all, which I could not get out of. I am very glad that they did move the dates for the debates on part of the Bill to a date on which I had already arranged to be away— because one feels that this has been going on for ever and I must say, with all seriousness, that I have been very heavy-hearted over many parts of the Bill. I have had a very great deal of support from my noble friends here, particularly from the noble Baroness, Lady Stedman, who is now away and also from many other noble friends. I think we have worked constructively with the main Opposition party and with many Cross-Benchers. One has felt at times that, however rational and reasonable was the proposal one was making, it was falling on deaf ears.
I do not blame the noble Lord the Minister for that. He has a job to do and I think that within the limitations of his remit he has done it very fairly and reasonably and as kindlily as he can. I have to say this in view of the concession that we have enjoyed in the last minutes. I suppose it is only a coincidence that the noble Lord's right honourable friend the Secretary of State is our guest of honour at the National Association of Workhouse Keepers annual luncheon this year? I was going to withdraw it if he had not made some kind of concession there. To be fair, there have been one or two other concessions made— but very, very few. Even people who are used to accepting crumbs, like Members from these Benches, have been virtually starved during the course of the past few weeks. What concerns us are the matters which other noble Lords and Peeresses have mentioned— for example, the appalling nature of the withdrawal of responsibility from local authorities.
I am not one of those who believe that the high-spending local authorities are without blame. I am a ratepayer in Liverpool, and I know the kind of problems there. The cleansing services in Liverpool cost 29 per cent. more than the same services cost in Sheffield— another Labour-controlled authority. So I am not unaware of the position. But as the noble Lord the Minister will know, I think that the way they have gone about it has done what I fear is irreversible harm to the balance between central Government and local government, and I hope that some future Government (perhaps of the complexion of my party: who knows?) will do something to undo many of the worst features of this legislation.
I wish it well in one respect. I wish it well in the respect that I hope it creates a sense of responsibility among some of the less responsible local authorities; but I feel that this could have been done in a more constructive and less brutal way. I only wish that I
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could be more warm in my good wishes to the Ministers. I wish them well for the way they have presented the Bill and for the way they have tried not to answer our questions. But I really cannot give an ounce of support to the general tenor or philosophy of the Bill, and I fear that Her Majesty's Government will in the future regret the damage and the injury that they have done to local government.
Lord Sandford: My Lords, the Minister has done his best throughout the passage of this Bill, but I think, so far as the two Conservative presidents of the Associations of District Councils and County Councils are concerned, the less said about the Bill the better. The Secretary of State is coming to our annual conference next week, and I think I shall leave it till then.
Lord Henderson of Brompton: My Lords, may I say a final word about Part II of the Bill, which has agitated Members of both Houses of Parliament during its passage? There were two notable speeches during the Second Reading debate in the House of Commons, one by a former Prime Minister and one by a former Secretary of State for the Environment, Mr. Geoffrey Rippon. They both expressed extreme unease as to the parliamentary propriety of proceeding by way of Part II for the general scheme. That unease has been echoed in this House and re-echoed right to the very last stage, and the Government have not seen fit to agree to any of the many alternative proposals which have been put forward. That is regrettable. But I must once again express my gratitude to the noble Lord, Lord Bellwin, and the Secretary of State himself, for at least considering carefully all the suggestions which have been put before them.
I wonder whether I might make a last plea to the Secretary of State, in view of all the criticisms which have been made from start to finish, not against the Bill itself but about parliamentary impropriety— I put it no higher than that; I do not use grand words like "unconstitutional"— and the dangers of proceeding as the Government are proposing in Part II of this Bill. If it is necessary in the future to bring in general limitation, will be consider bringing it in by fresh legislation, instead of by activating Part II of this Bill? This would show strength, not weakness, on the part of the Administration, and it would not in any way go against the Government's commitment in their manifesto.
If you read that manifesto commitment, and if you read the speech of Mr. Tom King, which he made in Bridgwater soon after the manifesto was published, and which was put out officially by the party, you will see that it could well be taken that it is the Government's intention to legislate, first, for selective limitation and, secondly, when the time comes, if necessary, for general limitation.
So if the Government could be big enough to accept that there is parliamentary impropriety in proceeding as they are now proposing to do by way of Part II, they could retrieve it, if unfortunately it is necessary to bring in general limitation, by legislating afresh instead of activating Part II.
On Question, Bill passed, and returned to the Commons with the amendments.

Trade Union Bill
Lord Denham: My Lords, on behalf of my noble friend Lord Gowrie, I beg to move that the debate on the Motion, That the House do resolve itself into a Committee on the Bill be further adjourned until tomorrow.
Moved accordingly, and, on Question, Motion agreed to.

Road Traffic Regulation Bill [H.L.]
Returned from the Commons agreed to.
Food Bill [H.L.]
Returned from the Commons agreed to with an amendment.

Mental Health (Scotland) Bill [H.L.]
Returned from the Commons agreed to with amendments.
House adjourned at ten minutes past eleven o'clock.

  Dr. BRIAN RICHARDS
  Dr. BRIAN RICHARDS
  TURKEY: HUMAN RIGHTS
  TURKEY: HUMAN RIGHTS
  TERRITORIAL SEAS
  TERRITORIAL SEAS
  EXCLUSIVE ECONOMIC ZONES
  EXCLUSIVE ECONOMIC ZONES
  COASTAL STATE JURISDICTION: CONTIGUOUS ZONES
  COASTAL STATE JURISDICTION: CONTIGUOUS ZONES
  CANADA: POLLUTION CONTROL ZONE
  CANADA: POLLUTION CONTROL ZONE
  CONTINENTAL SHELF EXPLORATION RIGHTS
  CONTINENTAL SHELF EXPLORATION RIGHTS
  COASTAL STATES: SCIENTIFIC RESEARCH
  COASTAL STATES: SCIENTIFIC RESEARCH
  "DUTY FREE SHOP": TRADE DESCRIPTIONS ACT 1968
  "DUTY FREE SHOP": TRADE DESCRIPTIONS ACT 1968
  LIBRARY BOOKS: EXPENDITURE
  LIBRARY BOOKS: EXPENDITURE
  LIBRARY STOCKS
  LIBRARY STOCKS
  LIBRARY USE
  LIBRARY USE
  LIBRARY BOOK FUNDS
  LIBRARY BOOK FUNDS
  BOOK PRICES AND THE RPI
  BOOK PRICES AND THE RPI
  COIRE CAS— COIRE NA CISTE: LINK ROAD
  COIRE CAS— COIRE NA CISTE: LINK ROAD
  CAIRN GORM: SKI SLOPES ROAD
  CAIRN GORM: SKI SLOPES ROAD
  CAIRN GORM ESTATE
  CAIRN GORM ESTATE
  "RURAL AREA DESIGNATION"
  "RURAL AREA DESIGNATION"
  STUDENT TRAVEL COSTS
  STUDENT TRAVEL COSTS
  RIVER PERRY: PROPOSED DRAINAGE WORKS
  RIVER PERRY: PROPOSED DRAINAGE WORKS