Sitting of 6 March 1984

Preamble
The House met at half-past Two o'clock
PRAYERS
[MR. SPEAKER in the Chair]
Death of a Member
Mr. Speaker: I regret to have to inform the House of the death of Sir Hugh Charles Patrick Joseph Fraser, M.B.E., Member for Stafford, and I desire, on behalf of the House, to express our sense of the loss we have sustained and our sympathy with the relatives of the right hon. Member.
PRIVATE BUSINESS
  STANDARD CHARTERED BANK BILL
  Read the Third time, and passed.

  BRITISH RAILWAYS (No. 2) BILL (By Order)
  Order for Second Reading read.
  To be read a Second time upon Tuesday 13 March at Seven o'clock.

Oral Answers to Questions
  EDUCATION AND SCIENCE

    Universities (Expenditure)
    Mr. Jim Callaghanasked the Secretary of State for Education and Science what is the estimated impact on the unit of resources for the universities of the Government's policies for public expenditure and student numbers for (a) 1984–85, (b) 1985–86 and (c) 1986–87 in comparison with the current academic year.
    The Secretary of State for Education and Science (Sir Keith Joseph): Compared with the current academic year the unit of resource will be about 5 per cent. higher in cash in 1984–85 and about 9 per cent. higher in 1985–86. No estimate is available for 1986–87.
    Mr. Callaghan: Does the Secretary of State agree that, in general, a lower unit of resource means a higher staff-student ratio? Is he aware that Manchester university has been told that this year it will receive a grant of £43·9 million, instead of £45·07 million? Will not that lowering of the grant affect the staff-student ratio and have adverse effects on teaching and research at that esteemed university?
    Sir Keith Joseph: The hon. Gentleman knows very well that while the Government and I take responsibility for the total allocation to the universities, the distribution between universities is, by 60 years' tradition, the responsibility of the University Grants Committee.
    Mr. Bill Walker: Does my right hon. Friend agree that many of the changes that have recently taken place at the universities, particularly those under the aegis of the University Grants Committee, were long overdue?
    Sir Keith Joseph: I hear what my hon. Friend says. I suspect that general judgments cannot be justified from this Box, but I am sure that the pressure to get good value for the taxpayers' money is on the whole healthy.
    Mr. Wilson: Since the University Grants Committee is the chosen instrument of Government policy, is the right hon. Gentleman aware that, in a circular letter dated November 1983, the UGC made the following request:
    "We would ask readers concerned with the different systems in Scotland and Northern Ireland to make the appropriate adjustments."
    That somewhat insulting reference to Scotland, though an off-the-cuff remark, appeared in a very important document. Does the right hon. Gentleman now agree that the UGC is the wrong instrument to deal with the universities, and that not only should a Scottish UGC he set up, but that responsibility for the Scottish universities should pass to the Secretary of State for Scotland?
    Sir Keith Joseph: The short answer is no, Sir, but my colleagues and I are always ready to consider arguments.
    Mr. Andrew F. Bennett: Will the Secretary of State confirm that the Under-Secretary of State got the figures wrong in his letter to The Guardian on 11 February? The Under-Secretary should have made it clear that there was a cut in resources allocated to the universities between 1980–81 and 1983–84, and that for nearly four years there has been, as a result of Government cuts, a pattern of reduced standards in universities. When will the Minister and his colleagues stand up for the universities and demand that they be given sufficient resources to do a decent job?
    Sir Keith Joseph: The answer to the first part of the question is yes, Sir. My hon. Friend the Under-Secretary explained that himself in a letter to The Guardian.
    I believe that the universities can do a very good job on the money that they have. There is level funding in 1984–85, and very nearly level funding in 1985–86, on the assumption of a 5 per cent. inflation rate in each of those financial years.

    State Boarding Schools
    Mr. Bellinghamasked the Secretary of State for Education and Science how many state boarding schools there are in Norfolk.
    The Under-Secretary of State for Education and Science (Mr. Bob Dunn): Only one maintained school in Norfolk, Wymondham college, makes provision for boarding pupils.
    Mr. Bellingham: My hon. Friend will be aware that Wymondham college is the subject of a consultative paper issued by Norfolk county council. I stress that this business is still the subject of consultation, but is my hon. Friend aware of Wymondham college's excellent academic record and its tremendous reputation? Does he agree that the pursuit of excellence should be afforded every priority?
    Mr. Dunn: I understand that Norfolk local education authority is consulting locally about the future of Wymondham college. If it concludes that the school

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    should be closed or that boarding be discontinued, it will need to publish statutory proposals which it will fall to my right hon. Friend the Secretary of State to consider on their merits and in the light of any objections that are made.
    Mr. Patrick Thompson: Will my hon. Friend encourage Norfolk county council, in any ways that he can, to use imagination as it discusses these matters with those who are looking for a future role for Wymondham college because they recognise the value of the college's tremendous achievements? Like the vast majority of right hon. and hon. Members, they recognise the value of the tradition of excellence in any state school or college.
    Mr. Dunn: The House will note my hon. Friend's comments. He will know, however, that the local authority might well make proposals that will come before my right hon. Friend the Secretary of State. I cannot therefore comment on the merits of any proposal.
    Mr. Powley: I thank my hon. Friend for his informative answers to my hon. Friends. If the proposals to change the status of the college come before my right hon. Friend the Secretary of State, will he also take into account the alternative proposals that are being formulated by the parents of the children who go to Wymondham college, as they are doing constructive work to help maintain the college?
    Mr. Dunn: As reasonable people, we are always prepared to listen to anything advanced by any group of people.

    Primary Schools
    Mr. Terry Lewisasked the Secretary of State for Education and Science what changes have been made in his Department's capital allocation criteria to capital allocations for the replacement of pre-1903 primary schools.
    Sir Keith Joseph: The allocations of prescribed expenditure made to local education authorities continue to take account of the number of pupils who are accommodated in unremodelled primary schools built before 1903. This is one of the measures of relative need which are employed for the purpose of making allocations—it is for each authority to decide how its allocation will be used.
    Mr. Lewis: Local education authorities still have significant stocks of old primary schools and it would appear that the criterion that the Secretary of State has enunciated has been left out of allocations throughout the country. When will the Secretary of State address himself more seriously to this problem? How long must we expect children, especially in urban areas, to be educated in substandard buildings?
    Sir Keith Joseph: There has been no recent change in the weighting given to pre-1903 primary schools. There is pressure on nearly all aspects of school building and capital spending except for a reduction in the requirement for basic needs.
    Mr. Robert Atkins: Does my right hon. Friend accept that when a school of such age is closed, as is happening in my constituency with St. Aidan's primary school in Bamber bridge, it would be much more sensible to make use of existing property and expand on it rather than build an entirely new school or force people to travel to another school some two miles further away?
    Sir Keith Joseph: I cannot judge the arguments for and against my hon. Friend's thought. The decision is for local education authorities, and I can only advise him to put his idea to his local education authority.
    Mr. Freeson: Will the Secretary of State bear in mind an extremely important aspect of the issue concerning capital expenditure in schools which for some time has not received the attention that it should have done? I refer to the many schools where, for whatever reason, there has been a failure over many years to establish proper planned maintenance programmes, with the result that there is a need for considerable capital expenditure to make good the deficiencies that are now appearing. That is occurring in many education authorities' areas. Will action be taken to provide the necessary capital resources?
    Sir Keith Joseph: The right hon. Gentleman put his question in the right framework, because the failure to maintain schools in some cases goes back over many years. That should, to a large extent, be revenue expenditure, and I endorse his view that more regularity should be given to maintenance.

    Adult Education
    Mr. Dormandasked the Secretary of State for Education and Science what additional grant he is making to adult and continuing education for the academic years 1984–85 to 1986–87.
    The Under-Secretary of State for Education and Science (Mr. Peter Brooke): Current expenditure plans include total direct grants for adult and continuing education of £14·7 million in the financial year 1984–85, £15·8 million in 1985–86 and £16·3 million in 1986–87. These figures represent cash increases of about 14 per cent., 22 per cent. and 26 per cent. respectively over forecast expenditure of £12·9 million in the current financial year.
    Mr. Dormand: How does the Minister reconcile the reduction of 27 per cent. in these years in the teaching cost subsidy in the university departments with the request by the Department of Education and Science to those departments to maintain the programmes at their present levels? Does not the Minister realise that the Government are destroying the valuable work being done in adult and continuing education, not least for the unemployed and for people who are desperate for a second opportunity in education?
    Mr. Brooke: In my main answer I explained that there was a net cash increase in the three years concerned, but I acknowledge, in the context of the hon. Member's question, that there is a reduction in the extramural departments. Overall, programmes need not be reduced if fees to students are increased, academic staff are used in a more cost-effective way, and course provision is rationalised. The three-year horizon gives time for careful planning.
    Mr. Squire: Will my hon. Friend confirm the recent decision to cut the £18,000 grant to the Educational Centres Association from 1985 and eliminate it by 1988? Is my hon. Friend aware that for the past 60 years or more this association has promoted adult education through student participation, also known as self-help? Is our economic plight so serious that such sums need to be cut?
    Mr. Brooke: Grants to the national associations for 1984–85 and an indication of future levels of funding will be announced by the Department later in the month. Officials have discussed grant with the ECA, which has only one quarter of the membership of education centres. The association's objectives are insufficiently central to the Department's main concerns to merit a continuation of current pump priming grant. A phased reduction will be made over three years, starting in 1985–86.
    Mr. Radice: Will the hon. Gentleman confirm that the UGC working party has said that continuing education could be as important as research and teaching in higher education, and that extra resources should be provided? Does the Minister agree with the UGC working party?
    Mr. Brooke: The UGC working party's report and recommendations have been received in the Department and are under review.

    Pupils (Mother-tongue Teaching)
    Mr. Proctorasked the Secretary of State for Education and Science if he will estimate the number of pupils in primary and secondary education whose mother tongue is not English.
    Mr. Dunn: Figures available to the Department from the 1981 language census and reports from local education authorities in 1982 show in the region of 500,000 pupils.
    Mr. Proctor: What response has my hon. Friend made in the light of the EEC directive and the pressure on the United Kingdom Government from the EEC Commission for the improvement in mother-tongue teaching in this country?
    Mr. Dunn: Local education authorities have been made aware of the requirements of the directive through the issue of a circular and other means. Mother-tongue teaching has also been promoted through the Department of Education and Science sponsorship of research and projects.
    Mr. D. E. Thomas: Does the Minister accept that there are as many speakers of mother-tongue languages other than English in England, as there are Welsh-speaking people in Wales? Is it not time that the Department spent as much resources in that direction as it does on the Welsh language?
    Mr. Dunn: Far be it from me to become involved in any argument about the Welsh language. The House will simply note what the hon. Gentleman said.
    Mr. John Fraser: Will the Minister recognise that it is a mark of a civilised and educated society to recognise that it has more than one root to its culture and that his Department ought to encourage the teaching of mother languages, whether they are Gujarati, Greek or Gaelic?
    Mr. Dunn: There is a great deal of sense in what the hon. Gentleman says. At the end of the day, it is essential that young people leave our schools being able to read and write English fluently.
    Mr. Alton: Is the Minister aware that many of the 17,000 Vietnamese boat people who came here five years ago still do not have a grasp of English? Does he not agree that there is a need to increase the provision particularly to teach those people the fundamentals of English, and, in
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    that respect, will he have a word with his right hon. Friend the Secretary of State and the Home Secretary, to try to have section 11 of the Local Government Act 1966 extended so that extra provision can be made for non-Commowealth citizens?
    Mr. Dunn: I have listened to the hon. Gentleman, and I undertake to inquire into the points that he has raised.
    Mr. Eastham: Are not the numbers in the Minister's estimate concentrated mainly in the inner city areas? Are not the Government very much curtailing the funding and support for children in this category who need such assistance?
    Mr. Dunn: If the hon. Gentleman cares to inquire, I think he will find that funding from the centre takes account of ethnic needs in inner cities, as well as those outside.

    Students (Sunderland)
    Mr. Boyesasked the Secretary of State for Education and Science how many students in the borough of Sunderland stay on to the sixth form as a percentage of the school population compared with the national average.
    Mr. Dunn: In January 1983 the proportion of pupils aged 16 years the previous autumn who stayed on beyond compulsory school age in maintained secondary schools in Sunderland was 20·7 per cent.; for England, the proportion was 28·9 per cent.
    Mr. Boyes: Is the Minister aware that the surveys being carried out by the Sunderland education authority show that the main reason for students not stopping on to the sixth form in Sunderland is cash? Sunderland has one of the highest unemployment levels in Great Britain, and many of these students have to leave school — bright, able children who should be going to university—to to take part in YTS schemes. Is it not a national disgrace that educational opportunity is indirectly related to poverty and to unemployment, and should not the educational maintenance allowance be at least doubled or trebled, so that children can stay on at school?
    Mr. Dunn: The hon. Gentleman must accept from, me that staying-on rates in the north-east tend to be rather low. In that sense, I agree with him. If he makes inquiries among other local authorities in the north-east region he will find that many local authorities succeed in obtaining a much higher staying-on rate of the children in that category.
    Mr. Greenway: Will my hon. Friend confirm that sixth-form students in Sunderland and elsewhere will benefit greatly from I-level courses? Will he say when he expects them to be started?
    Mr. Dunn: I cannot answer that question at present.
    Mr. Sheerman: Will the Minister stop talking about gimmickry, even though often he does not know what is the latest gimmick from his Department, and concentrate his mind, and his Department's mind, on the choice that young people have when they leave school? Should that not depend on their abilities and their inclinations, rather than on the pressure of the market place? Since his Government have destroyed the apprenticeship system, could he not bring in some initiative to give an incentive to young people to stay on at school?
    Mr. Dunn: The question relates to staying on in Sunderland, and not elsewhere.

    Grant Reductions
    Mr. Fatchettasked the Secretary of State for Education and Science when he expects to receive a further report from the University Grants Committee on the effects of grant reductions for the period 1981 to 1984.
    Mr. Brooke: In the summer.
    Mr. Fatchett: When the Minister receives the report, surely it will disclose the most unprecedented attack upon university education—the loss of 2,300 academic posts since 1980, and a reduction in 1983 of 5,000 admissions to our universities. Is this not the first Government in history who have deliberately, as an act of policy, cut opportunities for young people to enjoy university education?
    Mr. Brooke: Despite the increase in the size of the 18-year-old population, there should be places somewhere in higher education for all qualified young people——
    Mr. Maxton: Should be, but there are not.
    Mr. Brooke: Should be, and are, for all qualified young people who wish to enter. In 1983 there were about 50,000 more full-time home students in higher education than there were in 1979, and the age participation rate reached 13·4 per cent.
    Mr. Madel: Given the pressure for university places, cannot a case be made for much closer co-operation on funding between the University Grants Committee, the national advisory board and industrial firms, so that those who wish to partake of higher education have as much opportunity as possible to do so?
    Mr. Brooke: The Government welcome the industrial sponsorship of students reading appropriate subjects, and also welcome resources from private funding which, as it is free money, enables the universities to start new initiatives.
    Mr. Freud: Will the Minister explain why the figures that he quoted in his letter to The Guardian bore so little relationship to his answers to me in a parliamentary reply? When the UGC figures are published, will the Minister place that report in the Library? If not, will he stay behind after Question Time and vote for the ten-minute Bill introduced by my right hon. Friend the Member for Tweeddale, Ettrick and Lauderdale (Mr. Steel)?
    Mr. Brooke: The hon. Gentleman has asked me two questions. The first refers to my answer to The Guardian. It was Lord Flowers who drew attention to the error in my answer. The rector of Imperial college is one of my constituents. We enjoy frequent tutorials, but this one was rather more public than usual. In response to the hon. Gentleman's second question, I refer him to the reply to his written question which I shall give him later today.
    Sir Dudley Smith: Is my hon. Friend aware that many people believe that the grants of those who demonstrated so offensively recently at Warwick and Essex universities should be cut or ended?
    Mr. Brooke: The discipline maintained at the universities is a matter for them.
    Mr. Nellist: Is the Minister aware that if any actions at Warwick university were so demonstrably terrible legal
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    action could have been taken against the individuals concerned? Is he further aware that even the £30,000 fine that the university chancellor imposed on the students union has now been withdrawn? Is that not the real situation rather than that portrayed by the hon. Member for Warwick and Leamington (Sir D. Smith)?
    Mr. Brooke: The hon. Gentleman has asked a largely academic question, as I have already acknowledged that the issue is for the university to settle.
    Mr. Dorrell: Will my hon. Friend encourage the UGC to monitor the impact of its policies on adult education and the number of places available for mature students? Does my hon. Friend agree that changing patterns of employment mean that adult education will become more important in the coming decades, and that resources must be made available at least to maintain the number of places available for mature students?
    Mr. Brooke: Continuing education and places for mature students are very much part of the review taking place this year.
    Mr. Home Robertson: Has the Minister seen the strong representations made throughout Scotland against the proposed withdrawal of funding by the UGC from the pharmacy department at Heriot-Watt university? Given the rather bizarre circumstances whereby his right hon. Friend the Secretary of State is still responsible for Scottish universities, what guarantee can the hon. Gentleman give that those representations will be given due weight?
    Mr. Brooke: I think the hon. Gentleman will find that question No. 17 relates to that.
    Mr. Home Robertson: We shall never get there.
    Mr. Radice: I am not sure that the Minister gave a very good answer to that supplementary question. The hon. Gentleman has had the grace to admit that he made an error. However, will he confirm that although he claimed in The Guardian that funding for universities between 1980–81 and 1983–84 was roughly stable, the truth is that there was a cut of nearly 9 per cent. That is the truth and that is what he should have told the readers of The Guardian and the public when he wrote his letter.
    Mr. Brooke: I seek to reassure the hon. Member by telling him that I have written to The Guardian achnowledging the error. I agree with his figures and I apologise for the error. Committing an error in The Guardian is not yet a capital offence.

    Universities (Expenditure)
    Mr. Willie W. Hamiltonasked the Secretary of State for Education and Science what representations he has received in the last month concerning future expenditure plans for the universities; and what reply he has sent.
    Mr. Brooke: My right hon. Friend and I have received a small number of representations about various aspects of the Government's expenditure plans for universities. In response we have explained that the planned levels of expenditure for the next three financial years, announced in my reply to the hon. Member for Edinburgh, East (Mr. Strang) on 30 November, will require a measure of increased economy if standards are to be maintained.
    Mr. Hamilton: Has the Minister read the letter in The Times today from Professor Harvie referring to the Gradgrind approach to higher education by the Government, and notably to the Open University, which has suffered severely under the Government? Does he recognise that Glasgow university has had to cut by 20 per cent. its full-time staff, including more than 250 of its academic staff? Will he answer the question raised by my hon. Friend the Member for East Lothian (Mr. Home Robertson)? Will he assure us that the pharmacy department the Heriot-Watt university will not close?
    Mr. Brooke: I have spent today writing letters to The Guardian rather than reading letters in The Times. Of course, the Open University does not come under the UGC. Since I appreciate that, at the rate we are going we may not reach question 17, let me give the House the answer that I would in due course have given——
    Mr. Speaker: Order. I do not think the Minister should do that.
    Mr. Hamilton: Specifically, on the threatened closure of the pharmacy department——
    Mr. Speaker: Order. I think perhaps I interrupted the Minister. Had he given his answer? We cannot have the answer to question 17 now.
    Mr. Terry Davis: Given that there is legitimate public concern about the way in which money is spent, as well as about the amount that is available for higher education, while no one on the Opposition side of the House wants disciplinary action to be taken against students for extracurricular activities, does the Minister not think that there is a case, in view of the racist filth contained in the magazine published by students in the medical school of Guy's hospital, for someone having a quiet word with the dean of the medical school, pointing out that he is supposed to be training doctors to serve a multiracial society in this country and abroad, not doctors whose idea of humour seems to make them better fitted for employment at Auschwitz and Dachau?
    Mr. Brooke: I personally find the racist references in the magazine to which the hon. Member has referred as unpleasant as he does. However, the remedy does not lie with me. The matter falls to be dealt with under the general law relating to the publication and distribution of obscene or racist material.
    Later:—
    Mr. Home Robertson: On a point of order, Mr. Speaker. In reply to my supplementary question — I think it was in order—about the cut in grant to the pharmaceutical department at Heriot-Watt university the Minister said that he would answer my question when he replied to question No. 17. My hon. Friend the Member for Fife, Central (Mr. Hamilton) raised precisely the same supplementary question and the Minister was about to reply when you, ruled that it would not be appropriate for him to do so since the question appeared later on the Order Paper. With great respect, that seems to be a little restrictive because, if pursued to its logical conclusion, we would never again be able to ask a supplementary question on an issue that appeared in a subsequent question. Will you, Mr. Speaker, clarify the position?
    Mr. Speaker: I shall gladly clarify that. It would have been in order had the Minister not announced that he would answer the subsequent question on the Order Paper.

    Science and Engineering Subjects (Females)
    Mr. Sedgemoreasked the Secretary of State for Education and Science which local authorities are providing conversion courses for women and girls in science and engineering which will allow them to follow courses later in higher education in these subjects.
    Sir Keith Joseph: Information about such courses is not held centrally, but I welcome those that are in operation—as I do any action which serves to improve the access of girls and women to science and engineering courses in higher education.
    Mr. Sedgemore: Can the Secretary of State say how many Nobel prize winners in nuclear physics have been girls educated in British schools? How does he expect the figure to increase when his proposals for cutting expenditure by the Inner London education authority are calculated to damage the feminist and equal opportunities education programme of that authority?
    Sir Keith Joseph: I thought that the hon. Member and I might agree; perhaps we do. We are both in favour of girls and women, for their own sake, realising more of their potential in science, engineering and mathematics, but I cannot reconcile that with the second part of his question.
    Ms. Richardson: May I remind the Secretary of State that the Equal Opportunities Commission has designated 1984 as women in science and engineering year? Therefore, should the Government not behave more positively and less passively by encouraging girls and women, as the Secretary of State says he wants to do, by giving education authorities more funds? That is what they need to enable them to provide the courses.
    Sir Keith Joseph: I think that the hon. Lady is wrong on this. First, the number of girls and women taking science courses at school is rising. Secondly, the Government are supporting the year to which she referred; I have sent an enthusiastic message. Thirdly, I do not believe that money is the real problem; it is the attitudes of parents and of girls themselves.

    "Training for Jobs"
    Mr. Andrew F. Bennettasked the Secretary of State for Education and Science what discussion he has had with local education authorities about resources for further education colleges following the White Paper, "Training for Jobs".
    Sir Keith Joseph: I met representatives of the local authority associations on 31 January and 20 February to discuss the new funding arrangements for work-related courses in non-advanced further education. The associations were critical of the Government's decisions and the assumptions underlying them.
    Mr. Bennett: Does the Secretary of State realise that the White Paper "Training for Jobs" is really a disaster? It gave great offence to those who work in further education, it dismayed the local authorities, and it left the MSC with a document that may be all right for discussion, but is certainly not a blueprint for action. Will he now change the status of the document and say that it is no longer a White Paper but merely a discussion document? In that event something useful can come out of it, instead of the disaster that it has been so far.
    Sir Keith Joseph: No. The Government have announced their decisions in the White Paper. The White Paper did not represent an attack on non-advanced further education in general, but simply, the assumption—with which, I think, local education authorities on the whole agreed — that, like most other things, non-advanced further education is patchy. I very much hope that the MSC and the Government will get the benefit of the advice of local education authorities.
    Mr. Haselhurst: Is it not true that there is no threat to further education colleges themselves, and that all that my right hon. Friend and his colleagues have proposed is that there should be slightly greater emphasis on the courses that those colleges pursue?
    Sir Keith Joseph: That is so. The Government have decided that the MSC, instead of being a client for about 9 per cent. of NAFE courses, should become a client for about 25 per cent. of the courses. That seems to us to make good sense.
    Mr. Yeo: Bearing in mind the vital importance of further education in helping disabled young people to obtain employment, will my right hon. Friend clarify the obligations of local education authorities to provide full-time further education for all students, including those who have special needs, up to the age of 19?
    Sir Keith Joseph: That is a separate question. I shall send my hon. Friend my answer, giving clear guidance on the matter.

    Inner London Education Authority
    Mr. Flanneryasked the Secretary of State for Education and Science if he has finalised any decisions regarding the future of the Inner London education authority; and if he will make a statement.
    Sir Keith Joseph: The Government set out their proposals for the ILEA in the White Paper, "Streamlining the Cities". I am, of course, considering the responses to the White Paper.
    Mr. Flannery: Does the Secretary of State realise that I, from the north of England, ask this question about ILEA because of the deep admiration for the work of ILEA that exists throughout the education spectrum? [Interruption.] Will the right hon. Gentleman assure us—I am sure that we shall get no such assurance—that what is about to be done to ILEA is not doctrinaire and vindictive? Can the Minister at least assure me that the splendid work for the disadvantaged that is done in ILEA, and which needs a large number of remedial teachers, because, for instance, of the large number of ethnic groupings, will be continued and that funds will be allowed, no matter what else the Government do with ILEA?
    Sir Keith Joseph: I have already paid tribute in the House to some of the innovations and the zeal represented in ILEA. However, I can reassure the hon. Gentleman that the present standard of education—and, I hope, a better one — can be achieved while making economies, particularly in the non-teaching sector, in which ILEA is very extravagant.
    Mr. Bottomley: Will my right hon. Friend consider the 11-plus, which ILEA is still using, and will he have discussions with ILEA to see why it persists with a secret
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    test that penalises those parents whose children could do well and then find that they cannot go to the school of their choice?
    Sir Keith Joseph: I expect that the Inner London education authority will note my hon. Friend's question, but presumably it is an aspect that the hon. Member for Sheffield, Hillsborough (Mr. Flannery) admires.
    Mr. Dubs: Now that the Secretary of State has had time to consider the many adverse criticisms of the White Paper, will he explain why taking away the democratic rights of the people of inner London to vote for members of the Inner London education authority will in any way help the standards of education in inner London?
    Sir Keith Joseph: The Government are in the middle of studying the answers to our consultation paper.
    Mr. Tracey: Will my right hon. Friend reassure parents in general in inner London and condemn the scaremongering contained in literature from some local Labour party groups, and even County Hall?
    Sir Keith Joseph: Scaremongering is the right word. Economies can be made by ILEA without any damage to the quality of education.
    Mr. Radice: In view of the high standards maintained by ILEA and the overwhelming hostility to the Government's proposals, which, I believe, the Secretary of State has already admitted to the House, is it not time that the right hon. Gentleman cleared that banana skin out of the way of the Prime Minister?
    Sir Keith Joseph: I have paid tribute to the quality of ILEA's education. I pay tribute to its zeal and some of its innovations, but the quality of education does not reflect ILEA's extravagant spending.

    Appeals System
    Mrs. Rumboldasked the Secretary of State for Education and Science if he will make a statement on the operation of the appeals system as outlined in the Education Act 1980.
    Mr. Dunn: The local appeal process provides a valuable opportunity for the local resolution of school admission decisions at which parents are aggrieved. That there were about 10,000 appeals lodged in 1982, of which some 3,500 were decided in parents' favour, indicates that the arrangements are satisfactorily fulfilling their purpose.
    Mrs. Rumbold: Does my hon. Friend agree with me that, although the appeals system is fundamentally working well, there is a possibility that it can be the creature of the local education authorities that set it up? Is he planning to take any steps to ensure further independence in the cause of greater parental choice?
    Mr. Dunn: My right hon. Friend the Secretary of State has no plans to do so. He has no power to consider complaints about the conduct of independent appeal committees. These committees are subject to the general supervision of the Council on Tribunals. Individual cases of maladministration may be referred to the Commissioner for Local Administration.

    Open University
    Mr. Berminghamasked the Secretary of State for Education and Science when he will next be meeting the

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    vice-chancellor of the Open University to discuss the university's involvement in the provision of education and training for the long-term unemployed.
    Sir Keith Joseph: I have no plans to meet the vice-chancellor but departmental officials have met representatives of the Open University twice to discuss its application for grant towards the development of learning materials suitable for unemployed adults. A further meeting with the university has been arranged for tomorrow.
    Mr. Bermingham: Is the Secretary of State aware that last year the Open University ran out of funds to provide for the courses of the unemployed? This year, to extend the usage of its funds, the university has reduced from two to one the number of credits the unemployed can undertake free. Does the right hon. Gentleman agree with me that, at a time of increasing unemployment, and when education provides a way back into employment, such a reduction in credits is detrimental to the chances of the unemployed?
    Sir Keith Joseph: It was precisely because we recognised that requirement, that last year we earmarked £500,000 especially for courses for the unemployed. That amount has been increased by £100,000.
    Mr. Sheerman: What is the point of having an increased allocation to co-ordinate resources if the resources on the ground given to the Open University are decreasing and the money it can spend on new courses, which it has developed and which will do so much good for the unemployed, is being cut? What does the Minister say to that cutback?
    Sir Keith Joseph: We believe that the Open University ought to be able to obtain a greater use of the money from the taxpayer by increased efficiency.
    Mr. Walden: Will my right hon. Friend consider giving more money to the Open University in exchange for greater emphasis on technical courses?
    Sir Keith Joseph: The Open University already places great emphasis on technical courses. That is part of the guidance the Government have given to the universities as a whole.

    Young Persons (Full-time Education)
    Mr. Sheermanasked the Secretary of State for Education and Science if he will introduce proposals for incentives to encourage young people to stay in full-time education.
    Sir Keith Joseph: The hon. Gentleman presumably has in mind financial incentives. I refer him to the answer that I gave to a question from the hon. Member for Workington (Mr. Campbell-Savours) on 7 February.
    Mr. Sheerman: Is the right hon. Gentleman aware that the answer that he gave on that occasion was hardly sufficient for the purposes that my hon. Friends and I have been advocating for some time? Is he further aware that the Government should take the initiative in avoiding a choice having to be made by 16-year-olds between cash and developing their talent and aptitude? What are the Government doing to ensure that the ability of the child flowers at that age?
    Sir Keith Joseph: The hon. Gentleman fails to take into account the fact that until this year the staying-on rate
    730
    in schools was rising steadily. That must be taken into account. Moreover, there is very little evidence indeed that people fail to stay on at school for cash reasons. [Interruption.] The answer to a sedentary intervention is that in many parts of the country there are now more jobs for young people than there were.

  PRIME MINISTER

    Engagements
    Mr. Dixonasked the Prime Minister if she will list her official engagements for Tuesday 6 March.
    The Prime Minister (Mrs. Margaret Thatcher): This morning I had meetings with ministerial colleagues and others. In addition to my duties in the House, I shall be having further meetings later today. This evening I hope to have an audience of Her Majesty the Queen.
    Mr. Dixon: Is the right hon. Lady aware that the seasonally adjusted unemployment figures published last Thursday showed over 20 per cent., of men in the northern region—one in five—are out of work? With continuing job losses in manufacturing and service industries, when will the Government produce new policies to create jobs in the northern region to get us back to full employment? Or is it the Prime Minister's intention to continue with the Government's present policies and turn the north of England into an industrial desert?
    The Prime Minister: Securing new employment consists of securing new manufacturing industry, usually through small businesses, or new service industries. The number of people in work rose by 85,000 between the first and third quarters of 1983, mostly because people were making, or providing, services which other people would buy. There will, of course, continue to be problems because the population of working age and the labour force are still rising and are not expected to fall until 1990.
    Mr. Cormack: Will my right hon. Friend rake a moment to contemplate the array of distinguished talent on the Opposition Front Bench below the Gangway and agree that the sooner Parliament is televised the better?
    The Prime Minister: Not altogether. I do not think that it would add to the beauty on the screen.
    Mr. Kinnock: On the subject of industrial growth and new opportunities, I am sure the Prime Minister will share my delight at the fact that National Semiconductors is to expand its factory at Greenock. Will she say, in the interests of national technological advance, whether recent reports that the support for industry scheme is running out of funds are true? If those reports, which seem to come from authoritative sources, are true, will she give an undertaking that fresh allocations will be made so that valuable technological aid throughout British industry is properly maintained?
    The Prime Minister: There are a number of schemes under which support for industry is given, and one would need to look through them all to see how they have been progressing. They have been valuable. I am glad that the right hon. Gentleman welcomes the decision of National Semiconductors to invest £100 million at its Greenock plant. That is expected to lead to the creation of 800 new jobs by 1987. I hope that he also welcomes the success that has occurred in Wales in that, since its inception last April,

    731
    the Welsh inward investment unit has attracted 18 entirely new overseas projects, seven American, eight European and three joint ventures, with the promise of over 2,000 jobs.
    Mr. Kinnock: I am very pleased at those successes, but in Wales, for instance, it leaves only another 104,000 jobs to go until we get back to where we were in 1979. On my original question, many schemes require further examination, but it appears that the examination being made by the Department of Trade and Industry is resulting in a reduction of the funds necessary for microelectronics support and development, for robotics, fibre optics and software development—[Interruption.] While I realise, Mr. Speaker, that the more atavistic elements in the Conservative party see these matters in a cavalier light, I am sure that the Prime Minister takes them very seriously.
    In the examination currently being conducted by the Department of Trade and Industry—[Interruption]—will the Prime Minister ensure that there is no loss of funds, and not try to cover the absence of information with an interesting discussion about unemployment in the regions?
    The Prime Minister: A review of regional policy is under way in the Department of Trade and Industry, which will take some time to be completed. In the meantime, there will be a whole day's debate on public expenditure later.
    Mr. Michael Forsyth: Will my right hon. Friend deny that Britain is selling chemical weapons abroad and confirm that the United Kingdom is playing a leading role in bringing about the banning of production and use of those weapons?
    The Prime Minister: We have repeatedly made it clear to the Iranian Government that there is no truth in their accusation that the United Kingdom has supplied chemical weapons to Iraq. I am glad to reaffirm that the United Kingdom has not manufactured chemical weapons for 25 years and has destroyed stocks of such weapons. We have been in the forefront of attempts to impose a universal ban on chemical weapons, and we recently put forward new proposals to that end at the conference on disarmament in Geneva.
    Mr. Soames: Will my right hon. Friend tell the House what progress is being made in the search for an honourable and lasting peace with the Argentine?
    The Prime Minister: We proposed to the Argentine Government that we should hold talks on a number of things, such as commercial matters, to move towards greater normalisation of relations. The Argentines have replied, and we are studying their reply. We cannot, of course, have any discussions on sovereignty.
    Mr. Willie W. Hamiltonasked the Prime Minister if she will list her official engagements for 6 March.
    The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.
    Mr. Hamilton: The Prime Minister has no doubt read The Sunday Times of two days ago on the recent revelations about her problem family. Does the right hon. Lady recognise that those revelations, which were made by her own friends, simply reinforce the current opinion that she has degraded her high office—[Interruption.]— and turned No. 10 into a squalid, seedy family casino
    732
    [Interruption.]—in which each member of that family, albeit with limited capacity, seems to be on the make. Will the right hon. Lady come clean—[Interruption.]
    Mr. Speaker: Order. The hon. Gentleman must put his question succinctly.
    Mr. Hamilton: Will the right hon. Lady make a clean breast of these matters to the Select Committee on Members' Interests?
    The Prime Minister: I have answered many questions on this matter in the House, but I shall summarise them and answer the hon. Gentleman's latest accusation.
    During my visit to Oman I did not raise the interest of any individual companies that could have been interested at that stage in securing the right to negotiate on aspects of the university project. I did raise, as I was advised to do, Britain's general interest in all aspects of the project: consultancy, construction and academic. I am advised that some 400 British companies obtained orders from that contract. I wish that more right hon. and hon. Members would go abroad and sell for Britain and get more jobs for the constituencies.
    With regard to the latest article, to which the hon. Gentleman referred, the arrangements affecting this bank account were perfectly proper and are not in any sense a public matter. What should be a matter for public concern is that methods of impersonation and deception were used to obtain information about a private bank account, which was subsequently published in a national newspaper. I understand that Barclays has recently published a statement about that, in which it says that, because of evidence of impersonation and deception, it is informing The Sunday Times of the bank's intention to make a formal complaint to the Press Council.
    Mr. St. John-Stevas: Is the Prime Minister aware that the only people who are degraded are those who are pursuing this scurrilous campaign, and that the sooner they, including the shadow Leader of the House, give it up, the better for the reputation of public life?
    Mr. Speaker: Mr. Doug Hoyle.
    Mr. Shore rose——
    Mr. Speaker: Order. I did not call the right hon. Gentleman.
    Later—
    Mr. Shore: On a point of order, Mr. Speaker. I do not know whether you are in any way able to protect hon. Members from cheap and contemptible charges made against them, above all by a right hon. Member who, because he held the office of Leader of the House, should have a greater understanding of the standard of conduct——
    Mr. Speaker: Order. I look to the Front Benches to support the Chair by not seeking to continue Question Time. With great respect, I heard exactly what was going on, but frequently charges are made across the Chamber, with which right hon. and hon. Members disagree. It is just one of those things with which we must put up.
    Mr. Lawrence: On a point of order, Mr. Speaker. Is it in order for the hon. Member for Newham, North-West (Mr. Banks) to bring his bully-boy tactics to the Floor of the House and threaten Conservative Members with violence when they leave the Chamber?
    Mr. Speaker: Order. I have no idea to what the hon. and learned Gentleman refers, but I am certain that he is able to look after himself.
    Later—
    Mr. Shore: Further to that point of order, Mr. Speaker. I was simply, almost in parenthesis, answering the intervention of the right hon. Member for Chelmsford (Mr. St. John-Stevas) in seeking to raise a point of order. My point of order is a serious one. We have a right to expect reasonable openness and responsiveness to serious questions, seriously asked. Straightforward questions were put to the Prime Minister, but she has refused to answer them. It is time that she should be made aware that her failure to respond to serious questions——
    Mr. Speaker: Order. I must say to the shadow Leader of the House, and to the whole House, that we must not seek to have a continuation of Question Time beyond 3.30. It is really very unfair.
    Mr. Gareth Wardellasked the Prime Minister if she will list her official engagements for Tuesday 6 March.
    The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.
    Mr. Wardell: Can the Prime Minister explain why, when the Manpower Services Commission has been given an additional £15 million, Wales should be penalised for making effective use of the scheme by having 1,310 community places withdrawn?
    The Prime Minister: I understand that the community scheme for the older unemployed was oversubscribed and that the full amount will be restored at the beginning of the new financial year. The scheme was slow to get off the ground. When my right hon. and learned Friend the present Foreign Secretary, then the Chancellor of the Exchequer, announced £150 million for it, it was difficult to get it taken up. Recently it has proved popular, and I understand that the full amount will be restored in the next financial year.
    Mr. Hayward: Does my right hon. Friend accept that the reason for the investment by National Semiconductors and the decision by International Business Machines in Greenock is that the levels of productivity achieved in those two firms are the highest in the world? Does she agree that there is a clear message from those two firms to other companies in and around that area?
    The Prime Minister: I agree with my hon. Friend The levels of productivity both per man and per man-hour in British industry are at an all-time peak. For that reason we are securing more overseas investment in this country. Of course, we also belong to the Common Market.
    Mr. Merlyn Rees: What is going on in the Ministry of Defence?
    Mr. Boyes: A very good question.
    Mr. Rees: Is it the case that professional civil servants or other people who disagree with the Government on policy are to be removed from their jobs?
    The Prime Minister: No, Sir. I think that I detect the precise question from the general question that the right hon. Gentleman is asking. There is no question of the Ministry of Defence trying to introduce a form of vetting based on party political beliefs. The matter arose in the Ministry of Defence out of the case of one senior civil servant who, while at work, was actively and openly promoting the views of the Campaign for Nuclear Disarmament — [Interruption.] — and using official internal mail facilities to do so.
    The Government's position on the political activities of senior civil servants is no different from that of their predecessors. Indeed, the Government have not imposed any new restrictions on political activity. On the contrary, they have accepted the recommendations of the Armitage committee, which will increase the scope for civil servants to take part in political activity, subject to the nature of their work. What they do in their private time is wholly a matter for them. Obviously it does not affect the way in which they discharge their duties.
    Mr. Malone: My right hon. Friend welcomed the investment of National Semiconductors in Greenock. Does she agree that in Scotland 45,000 people are now involved in the electronics industry and that that figure exceeds that for those involved in traditional industries? Will she join me in welcoming the fact that Scotland now leads the second industrial revolution in Great Britain, as well as dominating its rugby fields?
    The Prime Minister: With regard to the latter, I congratulate all those who hail from that country. With regard to the former, congratulations are also due. Scotland has been extremely successful both in attracting electronic industries and in her performance with them. It is clear that many new jobs will come from those industries.

Select Committees (Conduct of Chairmen)
3.35 pm
Mr. Brian Sedgemore (Hackney, South and Shoreditch): On a point of order, Mr. Speaker——
Mr. Speaker: Order. Is it a point of order?
Mr. Sedgemore: Yes, Mr. Speaker. Last week I raised with you a question of contempt and privilege in relation to the conduct of the hon. Member for Wealden (Sir G. Johnson Smith). You kindly ruled that you could not give the matter precedence, and of course I entirely accept your ruling. I wonder whether it is implicit in your ruling that Chairmen of Select Committees can discuss on the radio matters that Committees are investigating.
Mr. Speaker: Order. The hon. Member raised a matter of privilege with me and asked whether it could be given precedence. I have replied to him, and he knows the answer.
Mr. D. N. Campbell-Savours: Further to that point of order, Mr. Speaker. I waited for my hon. Friend the Member for Hackney, South and Shoreditch (Mr. Sedgemore) to raise his point of order because he raises a matter which is of importance to the House—can chairmen of Select Committees go on television or the radio and issue public statements about matters which their Committees are considering in private? If that is the position, is it also in order for members of those Select Committees to have the right to go on television and radio and make similar statements? If that is the case, it means that members of the Select Committee on Members' Interests, which is currently examining the declaration of interest by the Prime Minister, are free to make public statements. I believe that the House requires a ruling on that matter.
Mr. Speaker: Order. The two hon. Members complained to me that this matter involved privilege, and I had to consider whether it should be given precedence
736
over the Orders of the Day. I looked, as the House would expect me to look, with immense care at what was said during the broadcast. I have now given my ruling on that matter and nothing further can arise on it as a matter of privilege. Although not a matter for me, I believe that people should be extremely careful about radio broadcasts.
Later——
Mr. Campbell-Savours rose——
Mr. Speaker: Order. It must be a point of order, and if it is concerned with the matter upon which I have already ruled the hon. Member must not raise it.
Mr. Campbell-Savours: As I understand it, Mr. Speaker, you have not actually ruled.
Mr. Speaker: Yes, I have.
Mr. Campbell-Savours: As I understand it, you made a statement about a letter that you sent my hon. Friend the Member for Hackney, South and Shoreditch, which is not a ruling. It is a letter, which avoids making a ruling on the Floor of the House. It is correct, is it not, Mr. Speaker, that rulings cannot be made by correspondence? Could I ask, therefore, in the light of your reply to me on my point of order, how it is possible for hon. Members to determine when they may be acting in default of the requirements and rules governing Select Committees and when they may be able to make public statements? This is surely not a matter to be left to the subjective judgment of Members. There must be clear and objective rules to which all Members subscribe. In the light of the statements that have been made, it will now be with very great difficulty that Members are able to establish when they have the right to make a statement.
Mr. Speaker: There was only one matter on which I was asked to rule. I repeat, I listened with great care, as the House would expect me to what was said in the broadcast, which I had not heard but have now had the opportunity to listen to. In my letter to the hon. Gentleman I have said that what was actually said in the broadcast was not a matter for the Committee of Privileges.

Questions to Ministers
3.37 pm
Mr. Geoffrey Lofthouse: During Question Time, my hon. Friend the Member for Stockton, North (Mr. Cook) raised with the Table a personal difficulty that had arisen, because he had, unfortunately, lost his voice. He requested in those circumstances to be allowed, if he were fortunate enough to catch your eye, to put his question in writing to be read by a colleague or have it put by the Chair. I understand that the Table ruled that that would be out of order. Will you give a ruling on that matter, Mr. Speaker?
Mr. Speaker: Order. The House well knows that I am extremely anxious to help Back Benchers, and, indeed, the Front Benches, in any way that I can. Although that may have been technically out of order, if any hon. Member loses his voice and happens to catch my eye, we would have to consider the matter again.
Several Hon. Members rose——
Mr. Speaker: Order. Let me complete this. If it was a question that was to be called, it would be a matter at which I would look sympathetically.
Dr. M. S. Miller: Further to that point of order, Mr. Speaker. In connection with your last ruling, would it be in order for a medical certificate to be granted to the individual?
Mr. Speaker: Order. We have a heavy day in front of us. I do not think that that would be necessary.

Questions to Ministers

  NEW MEMBER
  The following Member made the Affirmation required by law:
  Rt. hon. Tony Wedgwood Benn for Chesterfield.

Freedom of Information
3.43 pm
Mr. David Steel: I beg to move.
That leave be given to bring in a Bill to establish a general right of access to official information for members of the public subject to certain exemptions; to establish the machinery for enabling the right of access to be exercised by members of the public; and for connected purposes.
The Bill that I seek leave to introduce is one that is being promoted by the 1984 Campaign for Freedom of Information, a body that is supported by Members of all parties and of none. Although I accept that it is unusual for a party leader to use the ten-minute rule procedure, I have accepted the request to introduce the Bill in order to draw maximum attention to the measure itself. The Bill is supported by Members of all parties, but I must apologise to some hon. Members as more volunteered to be sponsors of the Bill than those I am allowed to name this afternoon. The text of the Bill follows closely the attempt by my hon. Friend the then Member for Isle of Ely (Mr. Freud) in the 1978–79 Session to introduce legislation, an attempt which fell with the general election in 1979.
The Bill would provide for people to have the right of access to such governmental papers as affect their lives, excluding obviously such documents as would endanger the security of the nation or be detrimental to the administration of the country Such information currently falls under the Official Secrets Act, which stipulates quite simply that everything should be secret.
My Bill proposes a total change of attitude so that everything shall be open unless specific exemption RS made. Those exemptions would include defence and security matters, relations with foreign Governments, law enforcement and legal proceedings, commercial confidences and individual privacy. One important addition to the Bill introduced by my hon. Friend is that my Bill seeks to exclude opinions or advice tendered to Ministers for policy-making purposes.
It has been suggested that if there were a dispute about which matters should be exempt the person to whom judgment would fall would be the Parliamentary Commissioner for Administration. I accept that there would have to be some enlargement of his office. Nevertheless, if open government costs money, that must be measured against the wastefulness of closed government. Events have proved that the costs of secrecy can be substantial.
We should establish a public right of access to categories of documents. Only last week we received the report of the Royal Commission on environmental pollution, which referred back to the reports of its predecessor in 1972. It pointed out that the Royal Commissioners repeatedly pressed for unnecessary secrecy to be reduced. It referred to what the 1972 commission said about the widespread insistence by industry, river authorities and local authorities on maintaining confidentiality about the types and amounts of industrial waste discharged to land, air, sea and rivers.
The commission commented:
"We doubt some of the reasons for this confidentiality … It is a practice which on occasion hinders the flow of information needed by responsible people concerned with the abatement of pollutions and it leads to risks of misunderstanding on the part of the public which may be harmful to industry and Government

739
alike … Although some progress has been made, we are not satisfied that the tasks set by the Second Report … have been tackled systematically enough or with sufficient urgency."
One clear purpose of the Bill would be to establish the categories of information that were clearly open to the public.
We should allow individuals access to information on their files held by all public authorities. For example, someone on the waiting list for a local authority house should be entitled to check that the information on his personal file is correct. People should be entitled to see information on the school reports of their children or on their personal National Health Service records. Yet none of those is currently open to the public.
I referred earlier to section 2 of the Official Secrets Act, which forbids disclosure of all but authorised information. My Bill seeks widely to extend the category of authorised information. As long ago as 1972 the Franks committee reported to the Government and the House that section 2 of the Act was in need of reform. The report concluded:
"The main offence which section 2 creates is the unauthorised communication of official information (including documents) by a Crown servant".
The report concluded:
"The leading characteristic of this offence is its catch-all quality. It catches all official documents and information. It makes no distinctions of kind, and no distinctions of degree."
I am told that even today such documents as those relating to the meetings of the NEDC are classified as restricted and that members of that body are required to sign the Official Secrets Act.
The Franks report 12 years ago concluded:
"Any law which impinges on the freedom of information in a democracy should be much more tightly drawn."
That is what the Bill seeks to do.
I hope that the Bill will receive widespread support today. I hope that testing opinion in the new Parliament will lead a Member who draws a high place in the ballot next Session to pursue the matter. Possibly Members of another place will do so. I accept that the Government of the day, whoever they happen to be, are unlikely to act in this matter.
If there were ever a subject in which the collective will of Parliament should prevail over that of the Government of the day, this surely is it. I am reinforced in that view by some words of the Home Secretary, when in opposition, in a debate on the Official Secrets Act in 1978. He said that
"that section of the Act"—
section 2—
"is simply indefensible, yet it is still there. Why is that? It is still there, in spite of the Government's assurances, because they have not had the courage to fight and overcome the strenuous rearguard action mounted in the more obscurantist corners of Whitehall. That is the real explanation."—[Official Report, 15 June 1978; Vol. 951 c. 1271.]
I do not expect the Home Secretary to join us today because it is not in the nature of Governments for their members to do so, but I believe that the Government have to be convinced that, whatever the immediate advantages to Governments of secrecy, their policies will be more fully considered, better understood, more acceptable and more readily implemented if they allow Parliament and the public greater participation in policy making.
We are fortunate in having plenty of other legislation to guide us. The United States, Canada, Australia, New Zealand, Sweden, the Netherlands and France have all
740
introduced positive laws on public information because, I believe, they have recognised that, regardless of which party is in office, the processes of government and the power of the Government over the individual are increasing all the time.
Therefore, we must look to democratic Parliaments to keep the balance in proper order. That is the main reason why we should follow, rather belatedly, those other democracies. Great Britain is at the moment quite firmly among that class of democracies in which the Government's privilege to conceal is apparently valued more highly than is the people's right to know. It is that state of affairs that my Bill seeks to bring to an end.
3.53 pm
Mr. Dennis Skinner rose——
Mr. Speaker: Does the hon. Member wish to oppose the Bill?
Mr. Skinner: I have listened very carefully to what the leader of the Liberal Party, the right hon. Member for Tweeddale, Ettrick and Lauderdale (Mr. Steel), has had to say about the fairly woolly proposal he has put forward, but I am somewhat displeased by the very narrow definition he has given of what is needed. It is mainly for that reason that I feel it necessary to oppose to some extent what he has said. Many people will want to know, after listening for 10 minutes to the right Gentleman, just what people will be able to get to know if his Bill is passed. The only specific matters that I recall the right hon. Gentleman mentioning were the waiting lists for council houses, which is admirable, and National Health Service files, which is also admirable. However, there were some other matters which he did not touch on.
Once this Pandora's box is opened, it will take some closing. I am thinking in particular about political parties and the right of the public to know what makes a political party tick and where its money comes from. The Labour party, which is struggling with its finances, is at least able to publish every year every penny that comes to it. The Tory party gets a lot of money from various companies throughout the country. Most of it is logged by the Labour party research department, because some of our friends see to that.
If the right hon. Gentleman wants to introduce a Bill about freedom of information, he must be prepared to lay it on the line that the finances of the Liberal party are all clear and above board and that every Liberal Member knows about them.
Mr. Steel: Of course they are.
Mr. Skinner: The leader of the Liberal party says "Of course they are." I remind the House that there is a slush fund in the Liberal party which only a few people know about. [Interruption.] Now we know who is doing the heckling, Mr. Speaker. Liberal and Social Democratic Members are behaving like hooligans because they do not like to hear the truth. The truth is that there is a slush fund and that only a few people in the Liberal party, including the Leader, know about it. When the previous leader had his hands on that slush fund, we know precisely what happened to some of it.
When this box is opened by a Freedom of Information Bill, I want to have a right to examine Liberal party accounts, just as people have a right to examine Labour and Tory party accounts. I also want to be able to find out

741
precisely what the Social Democratic party accounts are. Where does that party's money come from? Information has been passed to me that in the past 12 months — [Interruption.] The public has a right to know. During 1983 receipts from membership fell by £175,000 and other unspecified donations to the Social Democrats rose by £310,000. The public has a right to know what makes political parties tick. Where did those unspecified donations to the Social Democratic party come from?
Those are some of the things that the leader of the Liberal party forgot to mention and would never wish to mention. But there is another reason why I oppose the Bill. Half-way through the Session, we find ourselves dealing with a matter of great importance. Many of us would wish to support a much broader Bill, but the narrowly defined one that the leader of the Liberal party is trying to sneak through is a hit of propaganda and gimmickry. The right hon. Gentleman knows full well that it does not stand a cat in hell's chance of making any progress.
The Campaign for Freedom of Information is run by Des Wilson, who was anxious to find an hon. Member to sponsor the Bill. He carted it around Labour Members because he knew that most Labour Members—if not all—wished to support such a measure. We told him that such a Bill would not stand a chance of being passed during the present Parliament and that he would do better to use the private Member's Bill procedure. The leader of the Liberal party has ended up as Des Wilson's poodle. I have to tell him, too, that I do not believe that the leader of the Social Democratic party would have done what he has done. [Interruption.] The alliance Members are heckling again, Mr. Speaker. They cannot stand it. It is a delight to hear them jabber away, but they do not worry me——
Mr. Speaker: Order. It is not such a delight for me.
Mr. Skinner: It is too late, and the right hon. Gentleman has not defined precisely what he wants the Bill to do.
There have been some serious attempts to get such a Bill passed. The leader of the Liberal party mentioned one of them. However, on 6 February 1981, Frank Hooley, who then represented Sheffield, Heeley, introduced a Bill under the proper procedure which stood more than half a chance of succeeding, although the Tory party did its best to stop it. On that Friday, more than 100 Labour Members turned up to support my hon. Friend, but, although the leader of the Liberal party was not on a sabbatical on that day, he did not turn up to support the Bill.
Question put and agreed to.
Bill ordered to be brought in by Mr. David Steel, Mr. Jonathan Aitken, Sir Bernard Braine, Mr. Robin Corbett, Mr. Clement Freud, Mr. Bruce George, Dr. David Owen, Mr. Richard Wainwright, Mr. Kenneth Warren, Mr. Dafydd Wigley and Mr. David Young.

Freedom of Information
  FREEDOM OF INFORMATION
  Mr. David Steel accordingly presented a Bill to establish a general right of access to official information for members of the public subject to certain exemptions; to establish the machinery for enabling the right of access to be exercised by members of the public; and for connected purposes: And the same was read the First time; and ordered to be read a Second time upon Friday 6 July and to be printed. [Bill 117.]

Public Expenditure
Mr. Speaker: We now move to the public expenditure debate. I must announce to the House that I have selected the amendment in the name of the Leader of the Opposition.
4.1 pm
The Chief Secretary to the Treasury (Mr. Peter Rees): I beg to move,
That this House takes note of the White Paper on the Government's Expenditure Plans 1984–85 to 1986–87 (Cmnd 9143)
Although this debate takes place in the shadow of my right hon. Friend the Chancellor of the Exchequer's Budget statement next week, this is, or should be, a most important debate even though it follows such a coruscating exchange between the hon. Member for Bolsover (Mr. Skinner) and the leader of the Liberal party. In a sense, this debate will complement our Budget debate. The House is fortunate to have the Select Committee's report. We also have the speeches of the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley), which I hope will deepen our understanding of the Labour party's approach to these matters. We also have the return today of the right hon. Member for Chesterfield (Mr. Benn), to whom I offer my personal congratulations. No doubt he will make notable speeches in our debates, perhaps even in today's debate.
As the Chief Secretary responsible for this year's public expenditure White Paper, which covers the three years 1984–85 to 1986–87, I would not claim that it is either a brief or a particularly simple document. It fills two volumes, covers 192 pages and is replete with tables. Many people have worked for many months over it and I pay public tribute to their industry and assiduity. There are some, and I know that they are to be found in the Select Committee, who would have liked the White Paper to have been published earlier. I recognise their anxiety on this score. I have to point out that the intervention of the last general election involved the loss of at least one month in the arduous work of preparation and that with so much material to be brought together and reconciled it was just not possible to produce the document sooner. I doubt whether we shall face the same problems at least in the next couple of years.
If I had to distil two themes from the mass of facts in the White Paper, they would be transparency and stability. I hope that the first will gain the support of the leader of the Liberal party. I am sorry that he has already left his place, but I know that the matter will be taken up by others of his hon. Friends. [HON. MEMBERS: "He is here."] I welcome him back.
The Government's plans for public expenditure are all there for the world to read and, although it might surprise some people, they are in essence the same plans as were published before the general election. There was no secret manifesto and there was no secret public expenditure White Paper. At the time of the election we undertook to maintain a firm control over public spending. We said that we had published our plans for the next three years and that we intended to stick to them. The White Paper shows that we are doing just that.
In 1984–85, the planning total is £126 billion—exactly the same as the provisional figure for that year published in last year's White Paper and confirmed in the

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autumn statement. For 1985–86 we have set a provisional total of £132 billion—again broadly the same as the figure in the last White Paper. For the new year of the survey period, 1986–87, we have planned for total expenditure in cash of £136 billion. That is consistent with our general intention that public expenditure in real terms should remain broadly stable throughout the period.
Some commentators on the White Paper have suggested that the Government's objectives for expenditure are uncertain. We can argue whether they will be achieved—that is a different matter and I will come to it during my speech—but we have made our approach crystal clear. Our intention is to hold to cash plans in the White Paper and with inflation continuing downwards this should mean holding the level of expenditure broadly constant in real terms during at least the next three years.
As the economy continues to grow, public expenditure will take a decreasing share of the nation's output. This will provide the scope over time to reduce the burden of taxation. That also is the theme of the Green Paper that we shall publish next week as our contribution to the debate on long-term public expenditure and the options facing the country. I know that many of my right hon. and hon. Friends, but perhaps not so many Opposition Members, show keen interest in this subject and I should like to give them that news. By limiting the Government's need to borrow, a lower level of spending will help to keep down interest rates. Lower taxes and lower interest rates are the basis for lasting industrial recovery, I hope that the right hon. Member for Sparkbrook, who clearly believes that we can support a higher level of public expenditure, will devote at least part of his speech to this matter. I see that he is nodding. We look forward with keen anticipation to what he will say. I hope that he will move from broad generalities to numbers. He might even care to pre-empt my right hon. Friend the Chancellor's Budget by letting us know what type of public sector borrowing requirement he thinks we could support.
I have emphasised the stability that is demonstrated by our plans in two senses. We have stayed within the levels of expenditure that were originally determined when cash planning was introduced in 1982. Our cash plans, with the reduction in inflation, which has been the successful outcome of the Government's economic policies, should mean that expenditure in real terms during the period covered by the White Paper will follow a flat path. That is in marked contrast to the record of the past 20 years in which public expenditure has risen steadily in real terms and as a proportion of national output. Since 1963–64—just 20 years ago—public spending in real terms has almost doubled. Expressed as a percentage of gross domestic product, it has increased by well over one quarter. The steady upward march was halted only after the crisis of 1976, which no doubt the right hon. Member for Sparkbrook remembers with painful clarity—but the halt was only temporary. If, however, the totals are to remain stable it does not, of course, follow that the individual programmes will remain stable. Each Government must set their own priorities.
The changes since 1978–79 reflect our priorities which have been put to the electorate in two successive general elections and strikingly endorsed. For example, expenditure on defence, law and order, health and pensions has increased while housing and other subsidies have been
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decreased. I understand that the Opposition amendment will criticise us for that. The Opposition are entitled to do that but they will be appealing against the verdict of the electorate. We have based our plans for the next three years on a close control of expenditure. However, we have also kept to our other election pledges such as those on health, pensions and defence.
On health, since coming into office in 1979 we have doubled health spending—an increase of 17 per cent. above the increase in retail prices. This will no doubt come as a surprise to Labour Members who affect to imagine that we have cut NHS spending. The new plans more than meet our election commitments. Spending will be £845 million more in 1984–85 than in 1983–84 and £877 million more in 1985–86 than in 1984–85.
On defence, the provision up to 1985–86 meets the Government's commitment to the NATO aim of 3 per cent. real growth a year with Falklands costs on top. The commitment has not been extended beyond 1985–86. The 1986–87 defence budget, including the Falklands cost, will be some £600 million higher than in the previous years. We make no apology for our commitment to defence.
For social security, the plans show an increase in the programme of £1·3 billion in 1984–85 and £1·6 billion in 1985–86, and we are firmly committed to our pledge to maintain the value of pensions and linked long-term benefits. The increase in child benefits by 11 per cent. in 1983 brought it to its highest level ever in real terms. These were achievements of some magnitude in a period of economic difficulty.
In 1984–85 we are planning to spend some £2·1 billion on special employment and training measures. These measures are currently reducing the unemployment total by about 470,000, but, to reduce the level of unemployment in the longer term, we must look to more fundamental improvements that we are now seeing in the structure of the economy. I notice that the right hon. Member for Sparkbrook touches on this in his great pronouncement to his electors. No lasting improvement can be achieved simply by boosting public expenditure and public borrowing. I hope that at some point in his speech the right hon. Member for Sparkbrook will explain how he would reduce interest rates and create lasting jobs by increasing public borrowing.
We have come to await the Select Committee's reports with a mixture of expectancy and apprehension. It would be a pleasant and unusual surprise if it overwhelmed us with praise. I was grateful, therefore, for the Committee's appreciation of some of the improvements that we made in the White Paper, particularly to volume II.
I am sorry that the Committee was not satisfied with the general economic background information underlying this public expenditure White Paper. I think that it is fair to say that no Government so far have attempted to provide more information for this and other public expenditure and economic debates. This Government have, after all, introduced the autumn statement and the medium-term financial strategy, and my right hon. Friend will be bringing this up to date in a week's time. This Government are to publish next week their contribution to the long-term public expenditure debate. More fundamentally, the Committee has concluded that the plans for this year's White Paper are over-optimistic and likely to be exceeded in practice. I do not think that this can be substantiated by reference to this Government's record. Table 1.1 of the White Paper shows clearly that by reference to the March

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1982 White Paper, when cash planning was introduced, the Government were below their planning totals for 1981–82 and 1982–83 and are likely to be so for 1983–84 and 1984–85.
It could be also that the Select Committee has given too little weight to two new factors. The first is the change in the economic climate as we emerge from the recession and face the prospect of continuing growth. That is bound to reduce some of the pressures which have driven expenditure so remorselessly upwards. Secondly, we have a much larger reserve—£2·75 billion in 1984–85, £3·75 billion in 1985–86 and £4·75 billion in 1986–87, compared with £1·5 billion next year and an allowance of £1·2 billion for shortfall.
The Select Committee has also expressed doubts about the planned level of expenditure by local authorities. It is quite true that the plans imply a squeeze on local authority spending, but it is a squeeze from a base that has been inflated by local authorities' persistent overspending in the past. During our first term of office, local authority current spending grew by 9 per cent. in cost terms in England, by 15 per cent. in Scotland and by 2 per cent. in Wales. That was against the background of continued calls for restraint and measures designed to deter high spending.
The Committee doubted whether we can secure the planned improvements in the finances of the nationalised industries. It is quite true that we expect nationalised industries' requirements for external finance to fall progressively from £2·5 billion in the current financial year to under £100 million by 1986–87. It has been suggested — certainly by Labour Members — that this represents a tightening of the Government's screw on the industries concerned and will result in catastrophic price increases.
I am delighted to take this opportunity, not for the first time, to reject that apocalyptic suggestion. The expected fall in the industries' external finance requirements should be a cause for congratulation — not least for the industries themselves — rather than for sackcloth and ashes. The reduction in their net financing requirement, and so the reduction in the PSBR, heralds a marked strengthening of the industries' finances for 1986–87. I believe that this expectation is soundly based for a variety of reasons. First, we are talking not about Government Departments but about trading organisations with huge turnovers — that of the electricity industries, for instance, is over £12 billion per annum. As the economy continues to grow, their trading position and their financial results should inevitably improve. Secondly, we expect better cost control and greater efficiency, and I am sure that the management and those who work in the industries will produce just that. The figures are based on a detailed review by the nationalised industries with the co-operation of Government Departments and assume moderate price increases, but too little attention has been given to the sentence in part I of the White Paper, which I emphasise, which says:
"Overall, industries' tariffs are expected to rise at or slightly below the rate of increase of the retail prices index in 1984–85."
Bearing in mind, therefore, the prospects for growth in the economy, our success in reducing inflation and the substantial reserves that we have allowed for each year, I see no reason to think that the plans as a whole are unrealistic or that the totals will be exceeded. People may show mild scepticism, but the onus is on them to fault the totals if they can.
Mr. Tim Smith: On the credibility of the expenditure plans generally, the Select Committee said that since 1980, despite a succession of plans for either reduced or constant real expenditure, the actual outturn has invariably exceeded the planning targets by significant amounts, measured in billions of pounds. It is the past record that led the Select Committee to cast some doubts on the Government's forecast of expenditure. Why does my right hon. and learned Friend think that the next four years will be any different from the past four years?
Mr. Rees: I drew the House's attention to table 1.1, which shows that the Government's record is not as bad as my hon. Friend would have us believe. It is because recognise the anxieties that my hon. Friend has voiced that we have built in increased reserves, and I hope that he will take account of that when considering the realism of our plans.
Mr. Nicholas Budgen: My right hon. and learned Friend has been speaking about the prospects for growth, and we are led to believe that the Green Paper will be based on the proposition that we can expect 2 per cent. real growth for many years to come. On what does my right hon. and learned Friend base such optimistic hopes?
Mr. Rees: I know my hon. Friend's keen interest in the Green. Paper, and I hope that he has been reassured by the information that I have given him. I think that my hon. Friend will be better advised to wait for the Green Paper, which will be published next week. When his keen mind has had a chance to play over the pages of the Green Paper, he will find the answer to his question. It is a very good question, but it is best answered when the Green Paper is published. For me to attempt to summarise the Green Paper now might well——
Mr. Budgen: On that point——
Mr. Rees: I think that my hon. Friend will find it much more helpful and practical to await the Green Paper. In another week, he will be able to read the Green Paper, and there will be ample opportunity for what I have no doubt will be pungent, constructive and destructive criticisms of it. I shall await my hon. Friend's conclusion keenly, as I have no doubt he awaits the Green Paper.
Mr. John Townend: Does my right hon. and learned Friend not agree that, if we consider the span of the last Government and this Government, on the Government's own figures public expenditure has risen by no less than 1·5 per cent. per annum average in real terms?
Mr. Rees: I will certainly concede that expenditure has risen, and my' hon. Friend will, of course, know why. There have been some considerable increases in demand-led programmes, but there have also been certain priorities, which we as a party and as a Government set, which I have no doubt my hon. Friend endorsed. My hon. Friend cannot, as it were, pick and choose between the priorities. I have no doubt that he supported them as a whole. Therefore, we must live with the consequences. As I said, it was for that reason that I emphasised that we hope — indeed, we plan firmly — to stick to a flat public expenditure path over the next three years. I have no doubt that my hon. Friend will mobilise the full force of his oratory and commitment to support us in our objectives —[Interruption.] I have a rather long speech, and I am

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afraid that it may be a tedious speech for the House, but it might be for the advantage of the House if I press on with it.
I turn now to another feature of the plan on which the Select Committee and others have commented, the special sale of assets. There are those who persist in seeing the process as nothing more than the dissipation of valuable national assets to pay for current profligacy, although in the same breath many of them accuse the Government of meanness beyond the ordinary. I am sure that that includes the hon. Member for Thurrock (Dr. McDonald), who is so quick to intervene from a sedentary position. I do not propose to open up this debate, except to observe that exposure of the public sector to competition and market forces remains a major and continuing policy theme for this Parliament.
The White Paper more prosaically merely records these special sales of assets as negative public expenditure within the planning total. This is an entirely logical and consistent treatment and, indeed, one recommended by the IMF. As the Government buy assets, public expenditure rises. As they sell assets, public expenditure is reduced.
Mr. J. Enoch Powell: No.
Mr. Rees: The right hon. Gentleman says no, and I shall no doubt listen to a powerful contribution from him on this theme in due course. It is a point that has been picked up by the Select Committee. It would be totally asymmetrical—I know the ruthless and logical balance of the right hon. Gentleman's mind—to treat sales of assets in one way and acquisitions of assets in another way.
Mr. J. Enoch Powell: May I try? For a given level of expenditure, the finance may be produced, simplified for our purpose, in two ways, one by taxation and one by the sale of assets and the cash realised by it. There is not necessarily a relation between the total of public expenditure and the sources from which it is financed. This is a source of finance, and not a source of expenditure.
Mr. Rees: If it is a source of finance, we must surely look also to the way that the Government's revenue is disbursed. If it is the acquisition or creation of capital assets, that will presumably strike the right hon. Gentleman in a slightly different light from expenditure on current requirements. I hope that the right hon. Gentleman will develop that theme in due course. It is a point that has been picked up by the Select Committee. We are awaiting the Committee's considered conclusion, which has not yet been vouchsafed to an astonished world.
In case the House should think that special sales of assets are fundamental to the success of the Government's public expenditure plan, let me draw attention to table 1.2, which shows figures of around £2 billion for each of the three years of the period as compared with public expenditure totals of around £130 billion.
It has been widely stated that public sector capital spending has been falling for some time. I should like to deal with that. The White Paper contains a wholly new table, table 1.13, which shows, in what I hope is an intelligible and commonsense way, how much is really being spent on capital goods and construction by the public sector as a whole. In particular, compared with the
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conventional presentation, it makes no deduction for receipts from council house sales, since they clearly do not in any way reduce the public sector's demand for capital goods and construction. It includes also the capital spending of the nationalised industries and defence capital spending on ships, vehicles, equipment, buildings and so on.
This table shows that in 1984–85 the total value of public sector capital expenditure is expected to be nearly £24 billion. This figure—contrary to widespread belief — has been broadly constant in real terms since 1978–79. Of course it will be objected that we should not include defence capital spending, but defence capital spending provides work for the capital goods and construction industries, so, if business activity and jobs are uppermost in hon. Members' minds, there is no case for excluding defence expenditure. There is no practical difference to the supplying industries between a civil and a military ship or aircraft or between civil and military buildings. It is, on any normal use of language, work of a capital nature. If we are to make refined distinctions between types of spending, can expenditure on prisons, town halls or even old people's homes be regarded as adding to the productive base and capacity of this country?
I have spent some time on the points raised by the Select Committee and its report. I am sure that the House will agree that I have been right to do so. I cannot say that I accept the Committee's conclusions without qualification, but they deserve and will receive careful consideration.
I turn with less respect to the case which, judging from their proposed amendment, the Opposition will be likely to raise against the White Paper. The amendment is heavy with rhetoric but, as I shall show, rather light on facts. It alleges that the Government's expenditure plans increase unemployment and further disadvantage industry—that is the amendment's words, and not mine. If the right hon. Gentleman and his hon. Friends spent only a moment glancing at table 2.4 in volume II, they would see that in 1978–79 the total Department of Employment budget was around £1 billion, while in 1984–85 it is planned to increase to over £3 billion. Most of that sum will be spent on job creation and training measures. The table also shows that spending on scientific and technological assistance to industry in 1978–79 amounted to just over £100 million, while in 1984–85 it is planned to rise to over £360 million.
Mr. Neil Kinnock: No.
Mr. Rees: That is correct, calculated on precisely the same basis. The right hon. Gentleman should get out of his pram and have a look at the facts.
It is true that the total programme of the Department of Trade and Industry has fallen, and is planned to fall further. That reflects mainly the reduced losses of nationalised industries, British Leyland and Rolls-Royce. I would have thought it a cause for some satisfaction that BL, for example, can now survive without huge injections of public money.
More fundamentally, we believe that industry will flourish under a regime of low interest rates, low taxes and low levels of subsidy. By contrast the right hon. Gentleman and his hon. Friends presumably still believe in a regime of high interest rates, high taxes and a high level of subsidy. The right hon. Gentleman and his hon. Friends then accuse us of neglecting an acute housing

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shortage in many parts of the country. It is true, as set out in a table in volume I, that in 1978–79 the Government spent over £3·5 billion on housing while in 1984–85 we plan to spend just under £2·5 billion net, and I emphasise "net". I should point out, however, that the figure is reduced by sales of council houses of around £1·6 billion, so that the gross figure spent on housing is over £4 billion. But here, of course, there is a great philosophic divide between the two parts of the House. I believe it is right that provision should be switched from the public to the private sector in this field. So far, 650,000 council houses have been sold. The housing starts in the private sector in 1983 were the highest for 10 years, at 167,000.
The amendment next accuses us of preventing
"any improvement in public services".
I know that the White Paper is a long and complex document, which has already defeated the right hon. Member for Islwyn (Mr. Kinnock). However, the Opposition as a whole cannot have spent any time on it. To help them, I refer them to table 2.9.9 of volume II. If they had looked at that table they would have seen that between 1979 and 1983 police numbers rose by 10 per cent. and are due to rise further. If they had looked at the same table, they would have also seen that the number of probation officers and ancillary staff rose from 5,400 in 1978–79 to almost 6,400 in 1983–84 and is due to rise to 6,600 next year.
Again, if the Opposition had looked at the health tables to see how the hospital and community health services had improved, they would have seen in table 2.11.8 of volume II that, by reference to any test, the performance of the hospital services and community health services has increased steadily year by year since 1978. Before claiming histrionically that the Government have destroyed the finest creation of Lord Beveridge, Aneurin Bevan and Lord Attlee, the Opposition would do well to ponder the facts set out in those tables, uncomfortable though they may be for them.
Finally, the Opposition accuse us of making a further attack on the living standards of all through increased energy prices. Again, they show a cavalier disregard of the facts. Electricity and gas prices did not rise in 1983. Electricity prices are due to be increased by 2 per cent. from April this year. However, it is two years since the last increase, and the increase is far less than that in the retail price index over the same period. Gas prices have been increased by 4·3 per cent. from January. The Opposition, and in particular the right hon. Member for Sparkbrook, might also reflect that between 1974 and 1979 industrial gas prices went up by 291 per cent. and domestic gas prices by 73 per cent. In addition, industrial electricity prices went up by 134 per cent. and domestic electricity prices by 169 per cent. No wonder, as Lord Barnett records, the right hon. Member for Sparkbrook—who was once Secretary of State for Prices and Consumer Protection—was a little uneasy about those increases.
The Opposition might also recall that we are currently spending £350 million on aid for heating costs within the social security budget. That helps 2 million gas and 1 million electricity consumers—half of whom are old-age pensioners. Our policy is neither to tax nor to subsidise consumers through prices, and these public expenditure plans have been constructed on that basis.
I also think it right to observe that the right hon. Member for Sparkbrook had the privilege—if that is the appropriate word — of serving in the Labour
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Administration between 1974 and 1979. Under that Administration, this country was exposed to the humiliation of a rescue operation by the IMF, because he and his colleagues could not reconcile their public expenditure plans with the resources available to meet them. The right hon. Gentleman will also recall that in 1976 the Administration of which he was a member introduced some sharp—very sharp—cuts. He did not resign then, so presumably he approved of them. Perhaps he would like to share with the House the conclusions that he drew from that melancholy chapter in our country's history. He might also care to admit that his party has a long way to go before it re-establishes credibility in this area, as in others. I assume that his party chose the right hon. Member for Islwyn because, although that right hon. Gentleman is not yet out of his political pram—as he did not have any governmental experience of or responsibility for the disasters of that Labour Administration—he is regarded as carrying rather less lead than the right hon. Member for Sparkbrook.
The real questions facing the House in such a debate are few but important. Are the totals in the public expenditure White Paper sustainable by the country? Without anticipating what my right hon. Friend the Chancellor of the Exchequer will say next Tuesday, I shall merely draw attention to the declining share of our gross domestic product that our projected public expenditure will take. Our next question is whether the priorities within these totals are right. That is, of course, a matter of political judgment. But our priorities were clearly put to the electorate in 1979 and 1983, and were strikingly endorsed by it.
The next question is whether the mechanisms for control are adequate. I would be complacent in the extreme if I were to suggest that I was completely satisfied with every aspect of public expenditure control. There is, of course, room for improvement — particularly in forecasting—but our record shows that with rigorous cash planning we have achieved in the past four years a striking measure of control during a period in which the country was hit first by inflation and then by the worst recession since the war. The final question must be whether the plans themselves are realistic. With the marked decline in inflation, the vigorous upturn in the economy and, above all, the firm political determination to contain expenditure within these plans, I suggest to the House that they are.
I therefore have no hesitation in commending this public expenditure White Paper to the House.
4.36 pm
Mr. Roy Hattersley: I beg to move, at the end of the Question to add:
"but deplores the fact that it increases unemployment, further disadvantages industry, neglects an acute housing shortage in many parts of the country and prevents any improvement in public services; and through increased energy prices makes a further attack on the standard of living of all, but especially the unemployed, the sick and disabled, pensioners and families living in poverty.".
Having enjoyed, as I am sure the House has, the Chief Secretary's normal bravura performance, I am happy to say that I can agree with at least one of the assertions on which he based his speech. I accept that the White Paper is an integral part of the Government's economic strategy. It is a continuation of the policy that they have pursued and executed for the past five years. The Chief Secretary said

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that it was the very same plan and policy that the Government had published before the last general election. He then said that it was wholly consistent with all that had been promised and done since the 1979 general election.
None of us would argue about the consistency of approach. Today we are again debating a policy which has produced 2 million extra unemployed and a level of national output which, five years after the Conservative party took office, is still less than it was when the Conservatives were elected to Government. The message from the Chief Secretary is "Do not worry, we're still on course. The Titanic is moving in its predestined direction."
To claim the glimmering of a recovery is to say that the Government do not regard as essential to it either the preservation of the quality of public services or a reduction in the levels of unemployment. I must tell the Chief Secretary now, as I propose to tell him and the Chancellor of the Exchequer many times, that a definition of recovery that does not include putting Britain back to work is not a definition acceptable in a civilised society. The right hon. and learned Gentleman will not be surprised to learn that the strategy inherent in the White Paper is unacceptable to us. It has been discovered from some of the questions that he signally failed to answer that it is not acceptable either to many of his own Back Benchers. Thus, as well as failing by our standards, the strategy has failed by the standard that the Government have set themselves.
The Government have not achieved their economic targets or fulfilled their election promises. The country was promised two things directly relevant to today's debate. It was promised a reduction in public expenditure and, consequent upon that, massive tax cuts. We shall debate the virtue of those promises next week, but it is beyond argument that neither of them has been fulfilled. Indeed, the Government have achieved what, until they came to power, would have generally been considered to be beyond the wit of man.
The Government's unique achievement has been to damage, and in some cases actually destroy, the public services at the same time as increasing the level of public expenditure. To do both at the same time is an extraordinary achievement on which I congratulate the Chancellor and his predecessor. Public expenditure is higher in real terms and as a percentage of gross domestic product than it was in 1979. While all that has happened, taxes have risen to over £17 billion more than they were when the Government came to power. The Government's public expenditure policy has failed completely by their own standards, as well as by the standards of those of us who want to preserve a high level of public service.
For instance, the right hon. and learned Gentleman tells us that we are wrong to complain about what has happened to the Health Service over the last five years and to conclude that it has declined and deteriorated. I know very well the figures that he quotes, but does he not know that throughout the United Kingdom the level of provision for the Health Service has declined tragically and disastrously? The Government claim constantly, by recourse to figures of the sort that the Chief Secretary quoted today, that a decline has not taken place, but the facts are that education provision, Health Service provision and housing provision have declined. The only
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reason why right hon. and hon. Members on the Government Benches shake their heads is that they do not take advantage of or exercise their rights to enjoy the public services; therefore, they do not realise what has happened to the services that ordinary people have to endure.
The Government's strategy has failed partly because the principle on which it is based is wrong. The Government's economic strategy intentionally depresses the economy and reduces national income. It doubles or trebles the number of recipients of unemployment, housing and supplementary benefits. Therefore, in itself it increases public expenditure when that amount of money could be used much more fruitfully and productively in another way.
Government policy is also a failure because, as the Chief Secretary demonstrated again today, it is based on an obsession with numbers rather than with an understanding of economic realism. Having achieved the figure of £126·4 billion at the bottom of one column in the table of public expenditure, the Government believe that that in itself is a sort of victory, even though in the real world the targets by which the Government have set such store are unlikely to be achieved.
Few outside observers believe that the White Paper targets can be maintained. Even the Government have doubts. Upstairs, the Secretary of State for the Environment blandly announces that amounts in Government White Papers have always
"had to be increased simply to recognise the realism of particular spending patterns.—[Official Report, Standing Committee G, 21 February 1984; c. 570.]
I have no doubt that the Secretary of State for the Environment is right. The Financial Times, echoing the same theme, describes the White Paper as a triumph of hope over experience. Despite the cliché, the thought is right, because the White Paper is based on five implausible assumptions.
The first implausible assumption is the Treasury's inflation figure, which is at least 1 per cent. below the average of other forecasts. If the forecast of Liverpool university is excluded—and it is believed by nobody except the Treasury and Liverpool university — the Government's inflation target is nearly 2 per cent. lower than the average of all the independent forecasters. Secondly, the Government are relying on holding down rises in public sector pay to 3 per cent., producing even on their own inflation estimates three years of real wage cuts for public sector workers, some of whom are amongst the lowest paid men and women in the country. That is a wholly disgraceful objective which does not deserve to be realised, and will not be realised.
Nor, if the Secretary of State for the Environment is to be relied upon, will the third implausible assumption be realised. Local authorities are told that they must impose a 13 per cent. real cut in spending. That is after a reduction in annual receipts from central Government of something like £2·8 billion and after the rate support grant has dwindled from 61 per cent., when the Government came to power, to 52 per cent. That order of reduction in local authority spending is not possible. I do not believe that the Government even anticipate bringing it about. It is all part of the propaganda exercise which they hope will help to justify their rate-capping proposals and their assault on

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local government. That may stand them in good stead at the Conservative party conference, but it will not help to bring about the predictions of the White Paper.
There is a fourth implausibility. If the pattern of the last two months is to be repeated, the assumption of the Government that unemployment will remain at its present level will look optimistic as well as callous. The Government seem to believe that somehow they have climbed on to a plateau of virtue by holding unemployment in realistic, undoctored figures at 3·5 million to 4 million. If the pattern of the last two months is to continue, that figure will increase. If it increases, the White Paper figures are as nothing.
The fifth contradiction in the White Paper's assumptions is that the only way the reduced external financing limit of public utilities can be met is by overcharging for gas and electricity. To make in 1986–87 the £2 billion from privatisation which the Government intend, they may have to sell off the capital assets from which the extra revenue is being milked.
For all those five reasons, the legitimate doubts about the validity and veracity of the White Paper are bound to increase. Scepticism is increased by the discovery that we are to have a new major public expenditure review, dressed up as a Green Paper, introduced next week. If public expenditure is under control, as the Chief Secretary says, what is the new exercise about? Perhaps more important than that, how far is the exercise to go? Are any programmes to be exempt? For instance, is it certain that the present level of pensions, even in their reduced form, will be safe? How much of the Health Service might yet be sold off? Could there be further cuts in housing benefit? Are all these things to be put in jeopardy again?
If the Chief Secretary lived in the real world of ordinary people, he would know that all these services that are vital to their happiness and day-to-day welfare have deteriorated over the last five years. I do not believe that the country, let alone the House, would tolerate for a moment further reductions in all the services that make Britain a civilised place.
Mr. John Townend: The right hon. Gentleman has made great play of the reduction in the level of services. Does he not agree that the teacher-pupil ratio is greater than when the Conservatives came to power in 1979, and also that there has been a substantial increase in the number of doctors and nurses? If services have declined, is he saying that teachers, doctors and nurses are not as productive as they were?
Mr. Hattersley: No. I do not think the hon. Gentleman was here six years ago. When we made the same point we were always referred to the pupil-teacher ratio in connection with the size of the school population. If hon. Members consider the real figures for education and the analyses that have been done, they will see that the school sector is certain to be disadvantaged by the White Paper. I thought for a moment that the hon. Gentleman was agreeing with me. [Interruption.] I have just said to the hon. Gentleman, and I am delighted that the Chancellor and I agree, that when there is a change in the school population there is a change in these matters. If he believes that in many areas the provision of education is of the same quality as it was two, three, four or five years ago, he has forgotten the profession from which I believe he came.
I want to say why I think the Government continually get themselves into this dilemma. They are obsessed with
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the idea of pursuing the figures which they have conjured out of the air and then called the medium-term economic strategy. The Chief Secretary is obsessed with the pursuit of mystic numbers, which are the magical symbols of the monetary mumbo-jumbo. Year after year targets are set, targets are missed, targets are changed, and then targets are missed again.
That is the view of the Treasury Select Committee, which said, significantly, that since 1980 — it made no reference to the years before the Government were elected—
"the actual outturn has invariably exceeded the planning targets".
The appendix to the Select Committee's White Paper says something even more significant. Paragraph 4, evidence submitted to the Select Committee, describes the public expenditure White Paper as
"a sophisticated example of presentational manipulation in order to gloss over unpleasant facts".
That, I fear, is a fair description of a constant feature of Government economic policy.
I shall give another example, which involves the nationalised industries' external financing limits. Every time these have been mentioned by me, or dismissed in passing by the Chief Secretary, the Chancellor of the Exchequer has expressed his disapproval of the criticisms that have been levelled against him because of the way that he has behaved in this particular.
I know that the Chancellor of the Exchequer agrees that the contribution of the gas industry to the Treasury is to increase from £43 million to £100 million, and that the contribution of the electricity industry will increase from £590 million to £750 million. The alteration in the external finance targets of those fuel industries, and the price increases that accompany them, have nothing to do with either depletion policy and conservation or with prudent management. Those price increases are a tax — a disguised tax, a badly disguised tax, but a tax nevertheless.
Not all hon. Member will have heard the Chancellor cry "Rubbish". Those who missed it will, I hope, remember that the Chief Secretary described the attitude that this is a tax as a
"cavalier disregard of the facts."
I am not sure about the propriety of a member of the Cabinet addressing himself to a Select Committee in such language. Perhaps he has not read—at least, he does not seem to have assimilated—what was said in the Energy Select Committee's first report. Paragraph 53 of that report said on the subject of the electricity price increase:
"It is not justified on the grounds of either the industry's Financial Targets or the Government's economic pricing policy. The only plausible reason for it is the Government's desire to raise extra revenue."
By any normal standards, that makes it a tax. I wish that we had a Chancellor who possessed the grace to accept that, with everyone apart from him insisting on the economically obvious, he should capitulate and accept that that is why he has done it.
I shall give the Chancellor another reason why we know he acted in that way, going back to my period as a member of the previous Government. 'The Treasury changes little. It put a similar proposition to us. When I was Secretary of State for Prices and Consumer Protection, the Treasury produced a paper which said that one could always get disguised taxes by increasing fuel prices more than was necessary, and the Government whom I was privileged to serve had the good sense to turn down the proposal. The Chancellor of the Exchequer has not behaved with such

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common sense. It would do him and his office great credit if he were at last to admit that we have a fuel tax in this country, that it falls on some of the poorest of our people, and that it is a crucial disadvantage to industrial costs and our exports. The Opposition will return to the matter in later debates.
We shall also return to a related subject, also mentioned in the White Paper—the sale of national assets. The White Paper forecasts sales of £1·9 billion in 1984–85 and £2 billion in 1985–86 and 1986–87. May I ask the Chief Secretary, or whoever is to wind up the debate, whether the Government intend to continue selling national assets at knock-down prices? We hear that Inmos is valued at £200 million and is likely to be sold for about £45 million. Wytch Farm is valued at £350 million to £400 million and is likely to be sold at £160 million. Today, the share value of the companies which the Government have sold off is £400 million greater than the capital that the Government acquired by selling them at quite the wrong moment.
If the Wytch Farm and Inmos sales go ahead as suggested, they will make the Hamilton college affair—a scandal in itself—look like an extraordinary example of Government profiteering. How does the Chief Secretary justify selling national assets in this way? If the companies were part of the Chief Secretary's private fortune, he surely would not dream of selling them off in this way, so why are his private and public standards so different?
The Government's standards are clearly different from ours, and that can be instantly demonstrated by examining the detailed programme. Let us compare housing, which is down by 9·6 per cent., and defence, which is up by 8·4 per cent. It is clear that the Government, as epitomised by the Prime Minister, are much more interested in building airfields in the south Atlantic than in building houses in the north of England. Public housing starts are reduced by about 10 per cent. each year. Total housing spending has been virtually halved since the election. The attack on public sector housing is an attack on the people who most need, most want and are least able to acquire a house of their own. Now, assistance to local authority tenants at £2·5 billion is rather less than the help that is given to owner-occupiers through mortgage relief. They receive £2·8 billion. I look forward to investigative journalists on the Daily Express and the Daily Mail reporting on life in the stockbroker belt and asking whether families whose housing is so highly subsidised should own Jaguars and have holidays in the south of France.
By manipulating the programmes in the way that the Chief Secretary has done, and by exercising his bias against and hatred of the public housing sector, fewer and fewer houses are available to the people who most need a decent home. As a result, council waiting lists grow longer. They are longer today than they have ever been. As a result, council property is becoming daily more derelict. I fear that all that is part of the pattern of Government policy and Conservative philosophy. The one thing that characterises and has characterised the Government's conduct since the day they were elected is that they have constantly, consistently and intentionally made the rich richer and the poor poorer.
The worst aspect of that intention is reflected in the White Paper's paragraphs on social security. Item 123 lists unemployment benefit at £1,528 million, rising to £1,700 million in 1986–87. When the Government took office the
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total was £632 million—barely a third of what it is soon to become. In the lifetime of this Government, the total bill for unemployment benefit expenditure has increased to £4·8 billion. It is in that area, of course, that real savings could and should be made. That massive increase in expenditure does not represent a growth in the size of benefits; it represents a growth in the number of beneficiaries. That money could be used to create jobs. It could be used to stimulate national income. It could be used to encourage productive companies which could contribute to Government revenue.
Perversely, the Government continue to finance unemployment, rather than to finance jobs. The increasingly long-term unemployed could be put back to work in jobs that directly benefit the whole community. The local authority services, which are being destroyed, could be reinvigorated—including the meals-on-wheels and home help services, nursery classes and school meals, all of which are declining and should be expanding. The 400,000 construction workers who are unemployed should be set to work building the houses the country desperately needs.
We stagnate and decline, not for any rational reason but because the Government believe in redemption and recovery by an assault on public services and a continual depression of the economy. We can continue making cuts and damaging the welfare of half Britain, but the Government will not learn, despite the evidence of this and previous White Papers, that the formula cannot and does not work. The Government are beyond improvement and must be defeated.
5.1 pm
Mr. Terence Higgins: The Chief Secretary to the Treasury began by stressing that this was an important debate. As it covers expenditure this year of about £120 billion, excluding debt interest, no hon. Member would dissent from that view. This is not normally regarded as a great parliamentary occasion. It is curious that the Budget has always taken pride of place in our economic debates. We have always been concerned more with what we shall pay than with what we hope to receive. Sometimes this debate tends to concentrate on rather technical matters. We should constantly remind ourselves that the figures, which may seem rather complex, technical and dreary, reflect matters of the greatest importance for our constituents.
The timing of this debate in the financial year has varied from, I believe, early autumn to late spring. The House should consider that point. On this occasion, this debate anticipates the Budget debate. The character of the debate has radically changed because of the establishment of the departmentally related Select Committees; and, therefore, hon. Members are better informed than previously. The Committees, especially the Select Committee on the Treasury and Civil Service, have the task of monitoring the Treasury.
We have two reports from the Select Committee on the Treasury and Civil Service as an aid to the debate. That Committee has a dual role in respect of the Treasury. It has an external role in that it provides better information for the House by giving an analysis, which may be open to discussion, and revealing the evidence it takes. The Committee has an important role internal to the Treasury in ascertaining whether the Treasury's decisions are made on a sound basis.

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The Select Committee made a unanimous report on the White Paper. The report on the Chancellor's autumn statement — the report was belated because of the process of setting up the Select Committee — is of considerable relevance to this debate also. The report on the White Paper deals with improving the quality of the analysis and the basis on which the calculations in the White Paper are made. In the light of the evidence we received from the Chancellor, officials and others, we have grave doubts about the present basis of calculation. There is no doubt that the position is much better than in previous years, and we should pay tribute to the Treasury for that, not least for the extent to which the Government have been frank about certain respects. The Financial Times headline of a short time ago "A whiter White Paper" was justified, especially when comparing last year's White Paper, as many of us had grave doubts about some of the calculations.
The economic forecasts for the first year with which the White Paper deals are out of date, because they were not updated at the time of the autumn statement. That ought to be done. In the period beyond the first year—the Americans refer to the out years—we have no technical economic forecasts on which to base our remarks but only assumptions which appear in the medium-term financial strategy. I hope that that position is improved. There is no reason why that should not be done. The Select Committee is especially worried about whether the Treasury makes reasonable forecasts for those out years on which the figures provided to the House are based. The Committee is worried about the lack of information to the House and has doubts about the analysis carried on inside the Treasury. I hope that our report will improve the position in both respects.
We have no inflation forecast for the out years and, therefore, it is difficult to establish the Government's view of the future in real as against cash terms. The Government are refusing to make the adjustments on, for example, debt interest, national insurance surcharge, changes in housing benefit and asset sales, which are necessary when comparing one year with another. That must be the basis on which hon. Members debate matters, if we are to have a proper perspective on what is happening to the economy.
Previous Government statements have always said that finance ought to justify expenditure. Our report refers to a specific quotation that that is Government policy. I hope that the Minister will state whether that is the case. If that is true, we are worried about the fact that there are no revenue projections for the later years on which the expenditure plans have been based. Despite that apparently being the declared policy, there is reason to doubt that that is the way the mechanism works in Whitehall.
The cash levels vary a great deal from the level of real resources. We are interested in both. I supported the innovation of cash limits introduced by the Labour Government. We must face the fact that that measure is a much better way of controlling public expenditure if inflation is rising rather than falling. A Department may obtain resources that the Government did not originally intend to allocate to it. That is merely a reflection of what happens to inflation and the amount of cash available. The Government, although preoccupied with cash figures, have not taken that point sufficiently into account.
It has often been said in the House—
Mr. Tim Eggar: Will my right hon. Friend develop that point? it seems that one of the thrusts behind the move in emphasis to a cash basis is that Departments should be able to decide how they want to allocate their resources within a definite budget. Surely, if inflation is falling, Departments should be allowed to make their decisions and take the benefit from that decrease.
Mr. Higgins: That may be argued, but the trouble is that there can be an arbitrary allocation of resources, depending on how prices have moved within the structure between different Departments. That point needs further analysis.
Mr. Budgen: Surely, the problem arises only if inflation is falling faster than anticipated.
Mr. Higgins: The White Paper does not reveal the Government's expectations with regard to other than the first year, and that is part of the problem. It is often said that priorities are the essence of politics, and I believe that is true. The Government's assessment of priorities should go further than the Chief Secretary did. He made it clear that the Government have clear priorities on, for example, defence, law and order and pensions. We all know that the internal process involves a series of bilateral meetings between the Chief Secretary and other Ministers. Battles ensue, and one side or another wins to a greater or lesser extent. If the battle is especially fierce, it escalates through the usual machinery, and finally the Cabinet decides the outcome. The press often reports widely what is occurring, although we do not know whether those reports are accurate.
If that is still the process—perhaps the Minister will confirm whether it is—I am concerned because at the end of it nobody sits back, looks at the whole picture and asks, "Is this a sensible allocation of resources?" Considering the outcome of all the deliberations which appear in the White Paper, I have some doubts on that score.
For example, in relation to agriculture, in the evidence which was taken before the Select Committee we were told that the figures were based on a "stylised assumption" of what would happen in the negotiations with the EEC. We queried what was meant by that. The answer that we received was somewhat puzzling, as one might have expected.
However, one cannot deny that what happens in the EEC negotiations may change radically the allocations of resources from the point of view of the White Paper. It is also clear that there are likely to be massive increases, for example in the allocation of resources towards agriculture, if we do not succeed in those negotiations.
I am worried lest we may be allocating, say, £450 million a year extra to the EEC on the one hand while, on the other, we are cutting back on the provision of National Health Service spectacles to groups other than those who are protected, to save less than £15 million, or on housing benefits to save £185 million, yet at the same time we are making massive allocations of expenditure in the other direction. I am not convinced that, once all the negotiations inside Government have taken place and are then reflected in the White Paper, anybody asks, "Is this a sensible overall allocation of resources, or are there some areas where the matter should be reopened?"

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Another point that worries me greatly is the question whether, having made the allocation of resources, there are then, within a short time, radical changes in the amounts that are allocated. For example, I am happy to say that we shall, under the new procedure, be debating on Thursday an unexpected increase of about £290 million to the coal industry.
Again, one must weigh that against the cut in, say, housing benefit, and it is far from clear, despite what the Chief Secretary said about keeping public expenditure under control and how we could have confidence that that would be so, whether that £290 million was taken into account when the White Paper was prepared. I am not sure that it was. Sudden unexpected increases of substantial amounts should be taken into account by the House.
We analysed in some depth in our report on the autumn statement the question of asset sales, but there are certain aspects of the issue on which, as a Select Committee, we have not yet come to a firm conclusion. It seems clear from the point of view of debates in this House, in particular Budget debates, that, if the sequence of figures from year to year is not to be distorted in an arbitrary way, then—as I understood the right hon. Member for Down, South (Mr. Powell) to say—the proceeds of asset sales should be taken as a source of finance rather than be given the bizarre definition of "negative spending," because that gives a distorted view of the overall picture of Government involvement.
It is an all-party unanimous report, which is not surprising, because, although there may be radical differences of opinion between hon. Members on what the amount of public expenditure in total should be, I do not think that hon. Members on either side think it a good thing if, having decided what the planned total should be, distortions are found to be taking place as a result of the targets being exceeded.
I do not accept what the Chief Secretary said about the extent to which the Government have been successful in controlling public expenditure during the last five years, if one carries out the adjustments which I and my colleagues in the Select Committee believe should be made. In particular, we have expressed doubts about the nationalised industries—of which the coal overspend, to which I referred, is an example — or the question of local authorities in the light of the rate-capping proposals.
The Chief Secretary argued cogently — I go along with much of what he said—the case for reducing the public sector size, once one has adjusted to see whether that is happening, rather than some manipulation. The reason for that is understandable in terms of reducing the size of the public sector, encouraging enterprise and so on. But we—in particular Conservative hon. Members—must recognise that, if that happens and if the extent of privatisation goes ahead on the lines that the Government have proposed, we shall still have a problem regarding the regulation of monopolistic and oligoplistic practices.
The Chief Secretary justified the policy on the grounds of more competition, but we have yet to hear, in relation to privatising some sections of the nationalised industries, how that competition will be achieved. Clearly, that is the other side of the coin; it is no good simply transferring things from a public monopoly, which has some degree of
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control, to a private monopoly where adequate provisions are not made to ensure that the benefits of competition are achieved.
The point that the Chief Secretary made about the need to restrain public expenditure to achieve tax cuts or a reduction in borrowing and interest rates is important, though one must not be misled by the pure cash figures. One must also take into account what is happening with real resources. There, a constant theme of the Treasury Select Committe has been the need to increase the level of investment, and we welcome the new table 1.13 which has been produced in the White Paper which sets out the extent of Government capital expenditure.
We have doubts, in particular, on two points which we mention as examples. One is the question of defence expenditure and the other that of industrial investment grants. The Chief Secretary said that defence expenditure was obviously capital expenditure from the point of view of the creation of jobs. That may be argued, but one must also consider whether the figures in table 1.13 are right in relation to increasing the productive potential of the country, and in that context one should not necessarily treat it as investment. Similarly, investment grants. While there may be one figure for the total of investment grants, it does not necessarily follow that that is all changed into net capital formation of the same amount; some of it may be dissipated in other ways.
We also stress the need to look at the whole issue of depreciation in considering whether we are keeping up with the level of depreciation in the public sector. As for the allocation of resources, it is important that we manage to achieve that and increase the level of public investment, for the reasons I have given.
Overall, the White Paper is a significant improvement technically, although it has a number of deficiencies to which the Select Committee has drawn attention. I hope that the Government will take those into account. I hope that in future we shall be given a better economic background against which to appraise the Government's decisions and that the machinery for taking decisions within Government, and the debate on those decisions in this House, will be improved still further in the future.
5.19 pm
Mr. Tony Benn: Having served in 11 Parliaments, it would be difficult to describe this as a maiden speech. It would be like Elizabeth Taylor appearing at her next wedding in a white gown. Therefore, I do not ask for the indulgence of the House for what I have to say, but I assure hon. Members that I shall stick to my normal practice of being wholly non-controversial.
I should like at the beginning to record my thanks, first to my old constituency of Bristol, South-East, which I was prevented from representing by the actions of the Boundary Commission, and, secondly, to the electors of Chesterfield, who chose me from amongst 17 candidates, or 18 if we include Mr. Rupert Murdoch. I should also like to thank my comrades in the Chesterfield Labour party, the trade unions, the parliamentary Labour party, the Shadow Cabinet, and the Leader, under whom I am proud to serve, for coming to Chesterfield to assist there.
I must also record the thanks of the people of Chesterfield to Eric Varley, who served them in the House for 19 years. He held every office that the Labour movement could offer him: a seat in Parliament, a seat in

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the Cabinet, the treasuryship of the Labour party. He has now retired from politics but will long be remembered in Chesterfield for his work for the town.
It is appropriate, and in this case especially relevant, to say something about the constituency that I now have the honour to represent, having followed two former hon. Members, George Benson, with whom I sat in the House for 14 years, and Eric Varley, to whom I have referred.
A very ancient town, Chesterfield received its charter the year before the Model Parliament met. It is famous for its crooked spire, brought about by cuts in public expenditure to pay for the war with France. The crooked spire will be in many ways familiar to my hon. Friends because looked at one way it lurches to the left and looked at the other way it lurches to the right. Everybody has been predicting that it will fall down but, like the Labour party, it will last for 600 years.
I remind the right hon. Member for Worthing (Mr. Higgins), especially in the light of his managerial speech, to which I have listened over many years, that the thinking of a nation, certainly that of the people of Chesterfield, is not changed by statistical comparisons between one year and another. The thinking of the people of Chesterfield has been shaped by religion and trade unionism over many years. That religion was preached where people were judged not by whether they made a profit for anyone but according to their need and responsibility to their fellow men. Trade unionism was an attempt to reflect those principles in industrial organisations within society, and, of course, morality and democracy are the foundation of Socialism. If I do not follow the right hon. Gentleman into the finer points brought out by the Select Committee, showing that table 1.13 is not as good as he had hoped, it is because that is not what life is really about.
I turn, therefore, to the town of Chesterfield and how its thinking was shaped. Coal was found at Wingerworth in 1250. For 700 years coal has been the foundation of the prosperity of Chesterfield. After coal came the canals, the railways, steel, engineering and chemicals; but coal and industry have been the foundation—under more inspired Governments—of full employment, the funding of the National Health Service and other essential services needed by the people of Chesterfield.
I believe that the town is called the centre of industrial England and was once called the gateway to industrial England. What is seen by the people of Chesterfield is what others are beginning to see, too. The industrial base upon which our prosperity was built is being eroded by the effects of market forces, to which the Government adhere with an ideological passion that exceeds that of almost any other Government of the Western world, and which has been accelerated by deliberate cuts imposed by the Government and concealed in the White Paper.
My predecessor but one, George Benson, whose maiden speeh I looked up, spoke in November 1929, as the first Labour MP for Chesterfield, about the failure of the Lancashire textile industry to re-equip and provide itself with new plant and equipment. When Eric Varley made his maiden speech in 1964, which I believe I heard, and have just read again, he referred to the threat to steel and coal.
The industrial base of this country is being deliberately eroded by the Government. It is inconceivable for me, as a former Energy Minister, to appreciate that the Government should be spending every penny of the oil revenues on dole payments so that none of the North sea
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oil revenue is funding our development. Every other oil-producing country uses it to build an industrial base. It is being used here to destroy the industrial base. That charge cannot be rebutted by taking another bit of advice from the Stock Exchange or the Financial Times.
I travelled to many countries as Energy Minister and in each one I was told, "We know that the oil will not last for ever and therefore we intend to use it to build our industrial base." That was said in Iran, Saudi Arabia, Mexico, Venezuela and Algeria. Yet we are using the oil revenue by lifting exchange controls and by various other devices to export the country's wealth in order to import cheaper goods that destroy our industrial base. When the oil runs out, we shall be left with selling whisky, tweed and tourism. There will be mass emigration, as there was from Ireland in the 1840s. That is the charge that the Government Front Bench will face.
All that has brought about an erosion of living standards. The town that I am proud to represent has almost 12,000 unemployed, but there were fewer than 5,000 when the Government came to power. The crime of youth unemployment concerns many who have never voted Labour and whose instincts and interests might have led them to other loyalties. They are incensed that their young people are not able to work when fully qualified. I met a business man whose daughter had qualified as a nurse among 60 trainees, only six of whom had been employed. Fifty-four qualified nurses, including his daughter, were without work.
The youth training scheme is a fraud. It is a fraud to take young people off the register. It is not even cheap labour but, a free labour scheme that allows employers to get workers for nothing. it reduces youth wages and substitutes for adult workers, but there is no work for them afterwards.
It is no good talking about more money going into the Health Service in real terms if 8,000 qualified nurses are out of work. There is no point in saying, "The Health Service is safe with us," when 3,000 doctors will be out of work by the end of the year and it is uncertain whether the new Calow hospital can be manned at a level to provide the care needed in the area. During the election campaign a little caravan was towed to the Crown and Anchor in Sheffield road for Chest Care Ltd., and its representatives frightened women into paying £23 to have an X-ray to check whether they had breast cancer. That is no way to discharge Government responsibilities.
Major cuts have been made in the housing programme, and about £800,000 was taken off Derbyshire's education budget this year. The living standards of old-age pensioners have been reduced, and cuts in the housing benefit also strike at pensioners, who are also faced with the taxation of gas and electricity and the possibility that the television licence fee will increase. Pensioners say candidly—I have never heard this said before—"We shall have to give up the television if the licence increases and they go on squeezing us."
Money is poured into nuclear weapons. The Chief Secretary talked about discharging our obligations, hence the 3 per cent. increase that will be poured into luclear weapons and the south Atlantic base, tax cuts and the export of capital.
However convincing the Chancellor's arguments may be — I take it that the Conservative Benches loyally support the Government — the right hon. Gentleman cannot persuade the people that we are a poor country. We

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are not a poor country. We are an old industrial country and the only country outside Norway to be self-sufficient in energy. We have a thousand years of coal ahead, which will survive Mr. MacGregor and the directives given to him.
Chesterfield was producing engineering goods 200 years ago when the French were mainly farmers, when the Germans were brewing beer and the Americans were cowboys, as some of them still are. We are a very old industrial country.
What people want and what they are entitled to expect from any Government is a minimum meeting of requirements for jobs, where there is much to be done, and for homes. There are enough bricks on the ground to build a town the size of Derby without producing another brick. We need proper health care, education and dignity in retirement.
If what the Minister said today were read by people around the country, including those in my new constituency, they would know that it was false. They know what is happening. They know that this is a Government backed by capital, helping capital, to hammer labour. They know that it is a Government supported by the wealthy who tax the poor. That is exactly what it is about. They know what is happening in the assisted places scheme. Every pensioner in Chesterfield who buys 10 cigarettes is helping to finance public schools through the assisted places and other schemes, which cost a million pounds a day.
This is a Government representing the strong and attacking the weak. No Conservative Members should be surprised at that. If they stop a minute, they will realise that that is why they are supporting it. That is what they are about. That is why some people think that the Chancellor is doing a good job, because the Government represent capital, the strong and the wealthy as compared with the people that my right hon. Friends and I seek to represent. The policy is carried through deliberately by the use of fear. [Interruption.] Does the House honestly imagine that people at work are not terrified that the unemployed will be used to replace them if they seek to maintain their own living standards or working conditions? Time and again the employers, from Sir Michael Edwardes to Mr. MacGregor, use naked fear to hold people down. That is the policy.
Of course, there are some problems for the Conservative party. Although I have not been in the House, I have followed the reflections, some public, some private, some hinted at and some just leaked, about the way that the Cabinet is going. The oldest Conservative answer is that the presentation of the party's policy is not good enough. The Conservatives produced a man called Willie Whitelaw. I think that he has gone to another place. He was to look after presentation. But the Government's problem is that the better they present their policy, the less popular they are. If people understood what they were doing, the Government's support would fall. Therefore, one cannot solve the problem that way.
The Government said that they were rolling back the frontiers of the state. That is the sort of thing designed to appeal to old-fashioned Manchester school Liberals, of whom there are a few about. However, the Government
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are not rolling back, but advancing, the frontiers of the state. They are crushing local democracy and the trade union movement. Therefore, that is not a sound argument.
I am told that the Conservative party is worried about Right-wing infiltration, but the right hon. Lady is the Prime Minister and what is one to do if that is the problem of principal concern? The most difficult argument for the Government to try to get over to the public is that there is no alternative. One should ask anybody in the streets whether there is no alternative to spending the oil money on paying productive people to do nothing. Is this party of business men boasting that they are using this legacy from nature to pay people to do nothing? Is there no way that we can use the unemployed to meet our needs or in which we can divert our resources from other uses to do so? We need a fresh start. We need to plan resources to rebuild our industrial base and to extend the public sector and public services.
If the Conservative party depends on the arguments that we have just heard from the right hon. Member for Worthing and the Chief Secretary, it will not get far. No one is interested in a view of society or the economy that suggests that, if one has a good head for figures and a calculating machine, the way ahead becomes clear. No society in the world has ever proceeded by handing itself over to the abacus men who tell the people how they should proceed. Forecasts, cash limits and even public opinion polls—dare I mention them—are an attempt to extract from real life something that little minds can grasp, whereas real life is about meeting people's needs. It is about hope and not fear, about democracy and not autocracy. We have had struggles for many centuries on those great questions.
The Prime Minister said that we were going back to Victorian England, as if that settled the matter. I met one man in Chesterfield who went down the pit in 1899 at the age of 12, who remembers Victorian England. His is an interesting case. He is a Scot, who moved to Chesterfield. His son has work, and his grandson has a Ph.D in zoology, but he is unemployed, and they all live in a council house. People do not have to be told about Victorian England when they and their forebears struggled so hard to escape from it.
I warn Conservative Front-Bench Members that, whatever century they choose to fight us in, we have better men and women than they do. If Conservative Members want to go back to Victorian England and say that they have Adam Smith, we have Robert Owen, William Morris, Charles Kingsley, Karl Marx and Anna Wheeler — much better people than the Conservative Front Bench. If Conservative Members want to resuscitate Edmund Burke, my predecessor in Bristol, we have Tom Paine, who was a much better man than Edmund Burke. If they want to go back to the 17th century and the Prime Minister claims the divine right of Prime Ministers, we have John Lilburne and William Walwyn. If they go back to the peasants' revolt and the City of London is to be reorganised under Lord Mayor William Walworth, we have Wat Tyler and John Ball.
I remember vividly the 1931 election. I was six, but I remember it because my father was a member of the MacDonald Cabinet. I remember being told that Philip Snowden said—he was a former Labour Chancellor—that the then Labour party was "Bolshevism run mad". I canvassed in the 1935 election in the Abbey division of Westminster, in which the House of Commons stands, for

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a Mr. Kennedy, when Labour gained 100 seats. I canvassed again and worked in 1945 in the Abbey division of Westminster, too young to vote at 20 but old enough to fly an aircraft and drive a loudspeaker van for the Labour candidate. I remember Winston Churchill saying, "If you vote Labour you will get the Gestapo."
However, what happened in 1945 was significant. The British people turned their backs on the brutality and divisiveness of mass unemployment that had been implemented in the 1930s by a Government just like this one. They elected Clement Attlee, a leader who made a start in turning away from those policies. My experience over the past few weeks has convinced me that it will not be long before my right hon. Friend the Leader of the Opposition resumes the task that Clement Attlee began and the Conservative Government will be swept into the dustbin of history.
5.57 pm
Mr. Nigel Forman: I am sure that both sides of the House will be glad to welcome back the right hon. Member for Chesterfield (Mr. Benn), no doubt for different reasons. None the less, we are glad to see him back. There was nothing bashful or non-controversial about his speech. We would not have expected that from him, of all people. He laid claim to an extravagant range of historical antecedents for the Labour party. It is interesting to reflect on what the state of politics might be if political arguments were decided in that way and if people said, like the right hon. Gentleman, that they would swop Edmund Burke for Tom Paine.
The right hon. Gentleman's voice is one of the authentic voices of British politics that should be heard in the House. Whatever may happen to the right hon. Gentleman in future — I hope that he has a long and successful political career ahead of him—I believe that historians will say that he had more influence on his period in active politics than any other major figure who never became party leader or Prime Minister. One has only to think of his involvement in the Peerage Act or his direct involvement in the EEC referendum and the politics that led to that and, most of all, of the constitutional changes in the Labour party, to see that there is some force behind the forecast that I have made. Therefore, I hope that the right hon. Gentleman will speak frequently, and Members on both sides of the House look forward to hearing him again on many occasions.
The same complimentary tone would not be appropriate for the remarks made by the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley). He called into question the assumptions which he thought lay behind the White Paper on public expenditure. First, he claimed that the Government's assumption on inflation was unrealistic and unlikely to be fulfilled, yet if one examines the record one sees that the Government's supreme achievement in economic policy has been in reducing the rate of inflation. If one looks at the evidence, there is good reason to suppose that we shall continue to reduce it, which I am convinced is what the majority of British people would like to see happen.
The second assumption that the right hon. Gentleman questioned was on public sector pay. He must know from observing the chain of events during the past few years that the Government have been, and remain, strongly committed to a firm policy of public sector pay control.
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That is absolutely right because of the considerable part which public sector pay represents in total public spending.
Thirdly, the right hon. Gentleman cast doubt on the assumption that we could achieve a 13 per cent. real cut in local authority spending. He cannot have taken sufficient account of the Government's determination to force local authorities—whatever institutional difficulties they face—to give the highest priority to maximum efficiency in the large sums of money they spend and to achieve the best possible value for money. I am convinced that there is still room for improvement, especially in the spendthrift authorities, which are at present controlled by the Labour party.
Fourthly, the right hon. Gentleman suggested that the unemployment figures that underlie these projections are unrealistic. However, if the recovery proceeds alt the present welcome pace—between 2½ per cent. and 3 per cent. compound — it is difficult to see a substantial increase in the overall total for unemployment. If one examines the evidence, one sees that it is not so much that employment is not increasing as that the sectors in which employment is increasing are different from those of the past. Employment is being displaced from one sector to another, rather than unemployment being created indefinitely. I hope that with the economic growth, to which the White Paper is designed to contribute, we shall see a recovery on a level and a scale which will enable us to make a serious dent in the unemployment figures.
Finally, the right hon. Gentleman questioned the validity of the assumption behind the Government's policy for the nationalised industries and the control of their spending. I echo what I said earlier: in spite of the institutional difficulties of controlling the spending of nationalised industries, if we can use the available mechanisms — the Monopolies and Mergers Commission, external financing limits, cash limits and limits on borrowing—to achieve the maximum possible value for money and to get this gospel instilled into the nationalised industries, we shall be successful at least in containing, if not in seeing a real reduction in, their spending as a proportion of the total.
An interesting and heartening point about the White Paper is that the Government appear to have overall public spending under control. One must immediately enter the caveat, however, that that is only in the sense that the outturn figures are more or less in line with the Treasury's plans. That is only by dint of the fact that the Government have had to cut back on programmes to make room for increases in demand-driven spending. Again, the future position is vulnerable for these reasons, which is why I welcome the generous size of the contingency reserve in each of the next three years.
For the period covered by the White Paper, it is clear that the Government are assuming a declining rate of inflation over the next three financial years—decreasing to about 3½ per cent. in about three years' time. Equally, the declining rate of increase in public sector pay is a major contribution to achieving that declining rate of inflation. It will be clear from what other right hon. and hon. Members say that the assumptions may be a trifle optimistic, especially when one considers the present and likely future growth of private sector earnings, which is running at between 6 and 10 per cent., depending on how they are measured. The danger is that the failure to reduce current spending because of the demand-driven

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phenomenon may curtail the funds available for much-needed capital expenditure. How often have we seen that in the past? Evidence of that has been especially visible in local government spending.
It is possible to slice up the total of public spending in many different ways and to consider it from many different angles—by programme, economic category, spending authority or function. The most interesting way to consider it is by function. If one is to do that reliably and get a clear picture, one must examine the national account figures for 1982, which show that Government overheads constitute 38 per cent. of the total, total transfer payments 36 per cent., public goods 20 per cent. and support for trading activities 3 per cent. Less than a quarter of total public spending goes to the public benefit, from which all can gain. The rest of public spending, in varying degrees and ways, is involved in the process known in the Organisation for Economic Co-operation and Development as "churning", or the costs of the public sector in general.
Those percentage figures illustrate one or two interesting points. The first is the great and continuing importance of controlling public borrowing and public sector pay precisely to contain that large slug of overheads that constitutes 38 per cent. of the total. Secondly, as the right hon. Gentleman said, public expenditure has an absolutely essential role as one half of the redistributive mechanism in society, designed to help the least well off. That has been a part of public expenditure since the days of Lloyd George and it continues to be so, whether for individuals, sectors or regions.
Thirdly, we have, unfortunately, a limited contribution of public spending to public goods. Public goods were the original justification for public spending in the 18th century. They included lighthouses, roads and bridges. In more recent times, the way in which capital spending has so often had to take second place to current spending is merely a reflection of this sad decline in the importance of public goods within the total.
Fourthly, limited support has been given by Governments recently to the trading and the wealth-creating activities of the economy through public spending. Some of my right hon. and hon. Friends labour under misconceptions about this point and underestimate the extent to which the public sector can be a revitalising force for the private sector in the economy. In that respect two figures are of interest. The health of the private sector is benefited by the public sector to the tune of £9 billion worth of purchases which the public sector made, according to the latest year for which figures are available. Equally, the public sector sells some £11 billion worth of goods and services to the private sector. Therefore, the inter-penetration and mutual dependence of the two sectors must be recognised.
In the longer term we should be considering how we intend to approach some of the more fundamental problems which underlie the questions highlighted in the public spending White Paper and, particularly, some of the problems which lie just over the horizon of the time scale used in the White Paper. It is a characteristic of all public expenditure White Papers — I have spoken in all the debates on this matter since I have been in the House—that many of the interesting questions are left for the time just beyond the period chosen by the Government.
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One has to consider only defence spending, for example, when the 3 per cent. per annum real increase is not to be extended, as we understand, beyond 1985–86. One merely asks the rhetorical question: what implications is that likely to have for our defence commitments at home and further afield?
To take housing, which was mentioned by the right hon. Member for Sparkbrook, I believe that it is almost certain that our housing spending on the capital side will prove to be inadequate over a period for the new and varied needs of the late 1980s and early 1990s. I have some evidence from my constituency to support that in the way in which single persons' housing, sheltered housing and all sorts of special categories of housing are not receiving the capital support that they need.
With health spending, to take another example, all right hon. and hon. Members will be aware of the implications of an ageing population, the impact of new technology and the professional pressure from doctors and patients for the latest treatment. When studying social security, one recognises that there may be no immediate problem but that in perhaps 20 or 30 years, when I and others might hope to be drawing our pensions, there will be increasing difficulty caused by the proportion of the elderly in the population, the diminished number of contributors and the full implementation of a rather expensive state pension scheme deriving from the 1970s. Although demographic forecasts are the most unreliable of all economic or social forecasts, one must be cautious and prudent when considering some of these longer-term questions.

There are also the institutional problems of public spending which perhaps cause the greatest difficulties not just now but in the distant future. I have already mentioned the obvious difficulty, which other right hon. and hon. Members have mentioned, about the nationalised industries, where the support from the Exchequer, we have been told, is planned to be reduced from £2·5 billion this year to nearly zero in 1986–87. We are aware of the reservations that the Select Committee has already expressed on that matter.
There is no doubt that this kind of turn-around in the nationalised industries assumes great efficiency improvements and an unimpeded and sizeable privatisation programme which, in a strange way, could also undermine the contribution made from the residual public sector. It assumes, probably, administered price rises somewhat in excess of the rate of inflation, unless those efficiency improvements can be dramatic. That is a matter of great anxiety to my constituents.
When one considers the other institutional problem, which is the one posed by local government, one sees that, despite rate-capping and the tough rate support grant settlements introduced by the Government, there are bound to be pressures for increased spending to meet growing demand-driven needs. No one should be under any illusion that much of what local government has to cope with comes fairly and squarely into the category of demand-driven need, whether it is personal social services, public housing or education and so on. There is a tendency also for central Government, without thinking too carefully, to increase time and time again the statutory responsibilities placed upon local government without necessarily giving the guarantee that the money will be clearly and unambiguously forthcoming to meet those extra responsibilities.

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The problem is compounded by the fact that in a pluralistic, diverse society such as ours there will always be times when local government, or significant parts of it, is under the political control of the opposition party of the day. There will always be an understandable temptation to see what one can do to foul up the Government's macroeconomic policy simply because one is in opposition. All these matters cause serious difficulties for controlling total public spending, but control it we must because of the importance of doing so.
I am tempted to observe that in both those areas of control—the nationalised industries and local government — the control of public spending is rather like trying to force a fat woman into a tight corset. However hard one tries to achieve an acceptable overall figure, she always manages to leak out in unexpected and unacceptable places.
For the longer term, I look forward to the document which has been mentioned by my right hon. and learned Friend the Chief Secretary and which I understand is to be published next week. I hope that my hon. Friend the Member for Wolverhampton, South-West (Mr. Budgen) and others will enjoy discussing it in great detail. I am sure that it will be the subject of many full debates for a long time to come.
In the more immediate future, before we reach the questions involved in that document, it is important that in the interests of the sensible management of public spending we should abide by one or two useful guidelines. I suggest a few to my right hon. Friends on the Front Bench. The first is that cash limits, wherever and whenever possible, should not be altered during the course of the financial year. The second is that the contingency reserve should always be large enough to deal with all foreseeable contingencies. I welcome the fact that we have built in a generous contingency reserve for the next three years.
Thirdly, we should adhere to the policy introduced not so long ago by the Chancellor of flexibility in capital programmes at the end of the financial year. That must be right, so that effective and efficient spending authorities can carry forward some of the benefits of their efficiency into future years, as already happens, as my right hon. and learned Friend knows, with certain forms of National Health Service spending.
There needs to be flexibility. It is not just a matter of carrying forward savings which an authority has been able to make in a given year and ploughing them back for future services and public benefit in a subsequent year; there should also be flexibility in the other direction. I shall mention one particularly important and poignant small example—that of the BBC external services and world service. I wonder whether my right hon. and learned Friend knows, for example, that for the consideration of a mere £1 million it would be possible to bring forward work to be done on two vital relay stations, one in the Seychelles and one in Hong Kong. Such investment would enable that excellent aspect of the BBC's services to be fully audible in Japan, northern China and east Africa. That must be important for British influence overseas. It is a good example of the benefits which can flow from the introduction of flexibility.
I believe that the strategic position of public spending as a percentage of GDP is much more a function of economic growth, or the lack of it, than it is a function of public expenditure control, important though that control
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is. While only about 40 per cent. of total public spending is directly cash limited, and 60 per cent. is, effectively, outside those controls, for whatever reasons — institutional reasons, demand-driven reasons or whatever it might be—the Treasury will be largely at the mercy of social expenditure in any recession and rising expectations in any recovery. Those are perfectly understandable social phenomena. It is right and natural that the British public should look at things in that way.
I suggest to my right hon. friends on the Front Bench that it is vital that our other economic policies, macro and micro, should be as sound as possible in order to create the conditions for us to achieve the growth which will enable us to afford the levels of public spending that we all want. Provided that we can afford it, no one in the House could argue that it cannot be beneficial and desirable.
5.58 pm
Mr. Richard Wainwright: I join the hon. Member for Carshalton and Wallington (Mr. Forman) in warmly congratulating the right hon. Member for Chesterfield (Mr. Benn), who is in his familiar place above the Gangway and is also resuming his invigorating contributions to our debates. How right he was to emphasise with great eloquence that both the official White Paper and the rather better version that the Select Committee has offered underline the miserable fact that the riches of North Sea oil have been, are being and, alas, will continue for a year or two to be frittered away with nothing permanent to show for them. I go along with that criticism entirely.
My one concern at the right hon. Gentleman's eloquence is lest he has diverted, or will divert, attention from the rather important constitutional fact that, as always, this public expenditure debate is only a take-note debate. As the right hon. Member for Worthing (Mr. Higgins) said at the beginning of his speech, this is never a great parliamentary occasion. The Government, however, say the opposite. Through the mouth of the Secretary of State for the Environment, the Government have, since last October, been telling local councils up and down the country that this very debate, and any Divisions which may or may not take place at the end of it, is prime evidence that Britain is a unitary state and has always, says the Secretary of State, settled local government spending and asserted parliamentary authority over the way in which local councils spend their money.
That is a caricature of the constitutional position because we have always had merely take-note debates. Furthermore, it is not very long since the Government to which the right hon. Member for Chesterfield belonged were defeated on the pubic expenditure take-note debate and quite rightly carried on next day as though nothing had happened. That is a constitutional fact, and it is a great pity that the Government have been distorting the facts to unsuspecting local authorities for the past six months in a lame attempt to prop up their interference with local government.
Throughout, I shall refer to the preferred and alternative version of the White Paper that the Select Committee has offered because it presents the facts in much more comparable and relevant terms. The White Paper's main message is that severe deflation is a very expensive policy and will continue to be so. The mounting costs of social security, especially unemployment benefit, of national debt interest and of bailing out nationalised industries

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depressed by deliberate and continued recession greatly outweigh all the sad cuts in public and social services. What is more, this enforced expenditure on keeping so many people unemployed crowds out vital public capital investment, as the Select Committee report so clearly shows.

That is undeniably true of the recent past and the Select Committee is right in foreseeing that it is likely to be true over the next three years as well, because it could find nothing in the White Paper to convince it that these optimistic assessments or projections of Government expenditure will be achieved. Public spending has risen by 12½ per cent., that is, one eighth, since 1979 with very little of permanence to show for that increase. Furthermore, the White Paper this year finally destroys the Government's proud statement of two years ago—and I quote from the evidence to the Select Committee in January 1982 — when the Treasury said with a great flourish:
"Finance must determine expenditure and not expenditure finance."
How can they possibly sustain that proud and rather boastful claim when they produce a White Paper which, beyond the first year, contains no reference to any forecast of the economic prospects for those two years, let alone any forecast of likely revenue for those two years? The Government, therefore, in spite of priding themselves on good housekeeping and all those rather irrelevant domestic virtues about which we continually hear, lay before the House stupendous figures of public expenditure for two years up to 1987 with nothing to show how they are to be financed. The strictures of the Select Committee on the Government putting before the House such terrific expenditure with no suggestion that means of financing it have been worked out are well deserved.
The costs of recession and unemployment, including, for instance, the enormous cost of the Manpower Services Commission's employment programme, and the other costs to which I referred earlier have overwhelmed the Government's financial strategies. In the early days they appeared to believe, or, at any rate, deceived the country in thinking, that all this deflation would be just a quick spasm and that market forces would then adjust, real wages would come down, inflation would remain very low and all the adjustments would be made.
It is now quite clear that that was a wholly false prospectus and that this agony goes on year after year. All aspects of the Chesterfield by-election result indicate that the public are beginning to rumble this and are quite properly asking,
"How long, 0 Lord, how long?"
They are given a very poor answer by the public expenditure White Paper.
As a result of the prodigal cost of deliberate unemployment, the following miserable reductions are going to take place, in terms of cost, in some of the most important programmes for which the Government are responsible. Taking the projections for 1986–87 and comparing them with the year that is now coming to an end, 1983–84, the White Paper shows a decline in education spending of at least 8 per cent., a decline in environmental services expenditure of 15 per cent., in public transport expenditure, already quite inadequate, a decline of 8 per cent., a decline in expenditure on all these
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public items in Scotland of 5 per cent., with a similar amount in Wales, coming to what I regard as the most depressing reduction of all, the fact that next year capital spending, even on the Government's own rather shaky definitions, is to drop by 2·7 per cent.
Evidence from Treasury officials made it quite clear to us that it is likely that all this projected capital expenditure will do little more—if it actually does as much—than keep pace with the annual depreciation, wear and tear and obsolescence of our public assets. Incidentally, the Select Committee has asked that in future the vital question of how much capital has been consumed in the year be recorded in the White Paper. The fact that all this capital expenditure—all that is left after we have paid for the unemployed—is, at best, only keeping pace with the deterioration in our national assets is an appalling reflection, especially when compared with the positive capital development in countries which are our competitors.
There are so many aspects where the deterioration of vital public assets is no longer just a matter of mental calculation but one of physical collapse. Some of the most important and best known bridges are literally dropping to pieces. There are said to be about 100,000 older bridges throughout the country that are likely to be out of service in two or three years' time at the present meagre rate of repair expenditure.
One other example is topical, the state of no less than 1·5 million dwellings, mostly in the public sector, that were system-built with concrete when the technology of building in concrete was very imperfectly understood. There are 1·5 million dwellings where the concrete is absorbing moisture and where it is only a matter of time before this moisture reaches the metal reinforcements, rust occurs, expansion takes place and the concrete disintegrates and falls off. It is a sad fact that that technological immaturity of the past affects 1·5 million dwellings.
I am sure that many housing managers are painfully aware of, and would like the resources to tackle, the need to arrest the moisture before it reaches the metal reinforcement in the concrete. But such is the snail's pace of housing improvement allocations that at the present rate it will be between 25 and 30 years before the backlog is cleared. During that time a great deal of the metal reinforcement will have rusted and the problem will be four or five times more expensive to correct. I understand that the dwellings, in their present state, need about £7 billion spent on them to correct the problem.
Although our amendment was not selected, it encapsulates what I have been attempting to say. We believe that the huge cost of the Government's persistent policy of deliberate and acute deflation is proving far more expensive than the economy can bear—in both human and cash terms. The tragedy is that the nation has nothing to show for it. I am afraid, too, that we are nowhere near the end of it.
6.11 pm
Mr. David Howell: When the Procedure Committee was considering the handling of the debates on financial affairs at the end of the 1960s, its advice was that the debates on the public expenditure White Paper should take two days, be as early as possible in the new year and be of equal importance to the debate on the other side of the Budget, the taxation proposals. Matters have not

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worked out in that way. The public expenditure debate has been rather overshadowed by the more glamorous media event of the Budget—which, this year, is next week. However, our debate today had had its media rating a little improved by the return of a colourful character to the House, the right hon. Member for Chesterfield (Mr. Benn). I welcome him.
As this is the beginning of the season of finance debates, I want to say how much we are deprived of another colourful character, the late Sir Hugh Fraser, who represented Stafford. We was a friend of many hon. Members and a wise and courageous man. We shall all miss him.
The Government have again clearly set out their strategy today. It is to reduce public expenditure as a proportion of gross domestic product, thereby making room for tax cuts. We especially look for tax cuts for those on lower incomes—which we regard as repellently high. Listening to the right hon. Member for Chesterfield and other Opposition Members, I gather that that view is not shared by them. On the contrary, we have heard today an appeal for higher public spending, meaning higher taxes and heavier burdens on people on low incomes. That is the Labour party's position. Conservative Members are more interested in expanding the earning and property-owning democracy through tax cuts.
However, success clearly depends upon the Government making their plans stick. The plans broadly involve stabilising expenditure during the next three years, although that must be supplemented by asset sales. Some of my hon. Friends say that the Government should go further and that it is time for additional real cuts in the major public expenditure programmes. My hon. Friends may want that to happen, and may call for it, but it will not happen. Although it is fashionable to deride the word "realism", in the real world the unfolding pattern will show that it will be a major effort simply to hold major public spending programmes, let alone cut them.
Let us consider the component parts of the great eaters-up of public funds—defence, social security, education and health. There will be enormous pressures on the demand for these services — whether tax financed or privately financed. It will he a herculean task to hold such programmes in real terms and to keep them under control.
The Government will have to fight four major enemies to control their public expenditure plans so that they do not slide away, as my hon. Friends serving on the Select Committee fear. The first enemy is inflation. Every 1 per cent. of inflation automatically adds about £400 million to social security benefit through indexation and potentially adds a similar sum to public sector pay unless strong efforts are made to counter that. Therefore, the upward pressure of a one percentage point movement in the retail price index has a devastating effect on public expenditure plans.
Is that as serious a threat today as it was three or four years ago? I do not think so. Inflation is now much smaller. throughout the Western economic system, primarily because the period of oil price shocks has, for the time being, passed. Of course, if it returned there would be vast inflationary and recessionary pressures. For the moment, it appears that oil prices will remain soft, whatever the upheaval in the Arabian Gulf. That will take the Western countries into a period of relatively mild international inflation. It will still be possible for countries to pursue
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profligate policies and go against that trend but, overall, the really fearsome inflationary forces are no longer with us.
It must be recognised that the difficulties of managing public expenditure with inflation at 21·9 and 22 per cent.—as it was in May 1980—are different, in degree, from the problems of managing public expenditure when inflation is moving down to 5 per cent., 4 per cent. or even lower levels.
The second enemy is unemployment — every additional 100,000 people above the figure projected by the Government as a working assumption costs £200 million. We have heard considerably higher estimates. If the pattern of unemployment continues to develop unfavourably, and if there is difficulty in generating new jobs and new businesses, that will pose a severe threat to keeping the public expenditure strategy on line.
I think that the Government and many people outside the House — although not the Labour party — are beginning to understand the different component causes of unemployment and, therefore, to understand the need for different remedies for the different parts of the unemployment problem. That variety of policies, brought together, will help to ameliorate the problem. It will be a slow process—yet if the pace is too slow that will also gravely damage public expenditure projections.
The third enemy of success could be pay excesses. If pay settlements go far above the 3 per cent. pay factor which the Government have put in for this coming year, that will undermine the entire strategy, with grave consequences for higher tax on the wages of people who can ill afford to have them. I do not know whether the 3 per cent. public sector pay factor is a reasonable one. Some say it will never be held. However, we have only to look around the world to see that in West Germany, for instance, the aim for this coming year is a zero increase in public sector pay, and other economies whose position is not all that different from ours are aiming for very rigorous control indeed on the pay side with the aim of creating room for tax cuts and stimulating economic expansion.
The fourth enemy in this area is the old one of inefficiency and waste, which can still seize hold of public sector programmes and blow them up out of all proportion and any connection with value for money. I believe chat the Government deserve more credit than they have had for the progress now beginning to be made in getting value for money, defining the objectives of public sector programmes and seeing how they can be achieved more efficiently. It has taken a very long time. It was in the beginning of the 1970s that some of us were engaged in persuading Whitehall to adopt systems of programme analysis and review—which is a fancy way of saying that people in government, after years of spending money because the political climate indicated that it was a good thing to do, should stop and ask what objectives they are trying to achieve, whether they could be achieved more cheaply in different ways, or whether they could be delegated to separate organisations or pushed out into the private sector and maybe achieved considerably more effectively.
That was the beginning of the doctrine of privatisation, which was first developed in the late 1960s and was introduced in the early 1970s. These things take a very long time to grow, and political winds change — sometimes favourably, sometimes unfavourably. But it

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can be said now, 13 years later, that there has at last taken root in Whitehall a concern to ask constantly what the purpose of expenditure is and whether that purpose can be achieved more efficiently — possibly outside the Government altogether. The same spirit is beginning to spread into local government as well, although in a very patchy way, but at least it is an advance on the past.
Those are the threats, and they are very serious indeed. I believe that they can be warned off, but any one of them could undermine the success of this whole strategy, which is part of the main strategic development of the Government's entire economic policy.
There is one area in which I believe that the approach to public expenditure could be modified somewhat, and that is in capital spending. The Government have brought forward these capital spending new tables. The right hon. Member for Chesterfield said that we should not be too concerned with tables on capital spending, but if he and others were to pause and consider for a moment they would realise that behind these dry figures lie very important issues. This is specially true as regards those living in the old industrial towns in northern and central England, Scotland, Wales and Northern Ireland, where there is no question but that we need a vast new infusion of capital expenditure financed in one way or another. I suspect that we have major advances to make in organising the methods of finance, both public and private, for this purpose.
In the White Paper the amount of fixed capital spending by the Government for the coming year which could go into construction is, I calculate, down by about 1 per cent. in cash. That disguises some modest increases in a number of areas, which are set against a substantial decrease in the housing area, because it is Government policy—and I think it is the right policy, although it certainly needs more exposition — to move the provision and supply of housing out of the public sector into the private sector. This is partly because people want to be home owners and to move out of the era in which they were tenants of a sometimes quite tyrannical local authority. So that is a right move in social terms, and it is hidden in these capital expenditure tables. I am glad to see also from those tables that the roads programme is still on the expansion path which was initiated a little while back.
All the same, an overall fall of 1 per cent. in cash, even making allowances for the trade-off between housing and other programmes, is not very encouraging. We ought to be doing substantially better. The danger is that with the cash planning that was introduced three years ago there is always a tendency to underspend on capital projects. It is endemic in the system. It was that, of course, that led to the somewhat forlorn exhortations to local authorities by Ministers in the previous Government, of which I was a member, two autumns ago to spend their capital allocations, which they were failing to do. Local authorities were and remain very reluctant to do this because of the revenue implications of capital spending programmes.
I do not know whether the Government have applied their minds to ways of overcoming this dilemma. Obviously they wish to place maximum restraints on the current spending profligacy of local authorities, but at the same time it seems wrong not to enable local authorities to spend up to levels which have been budgeted for. I ask
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the Government whether they have considered making interest on debt incurred for some of these capital projects exempt from grant penalties. If they are concerned about the pattern of capital spending, that may be the kind of measure they should now introduce.
I believe that there is room for flexibility on the capital spending side at the present stage in our affairs, for a number of reasons. We could see a bigger Government capital spending budget without any risk at all to overall strategy and without any threat of any kind concerning inflation, the sterling exchange rate or anything else. This is possible because we have reached a juncture at which the dollar is weakening rapidly. It is possible because, although I wholly support the broad aim of a low borrowing requirement, since that way lies the chance of lower interest rates and the lower taxation which we all want, there is no direct economic link between public sector borrowing and interest rates in an economy such as ours, although in a continental economy there might be. There is a danger of overdoing the argument—that the precise size of the PSBR as forecast will have automatic consequences for interest rates. That is not and has not been so. The PSBR is an important tool, but it is not a very precise one. There is an enormous margin or error in PSBR calculation and in the gap between forecast and outturn, as we have seen in recent years.
I therefore believe that the Government should not be too concerned about the precise PSBR forecast figures in any one year. It is not a reliable concept. I believe that it is perfectly safe for the Government to consider new methods of accelerating and bringing forward investment that is always going to remain in the public sector, because it never will be commercial or have a major social element, or combining with private enterprise to develop other kinds of capital projects.
Of course, talk of this kind can be easily shot down with cries of "Concorde" and "steel mills". It has to be recognised that in the past there was substantial incompetence in the Government's cavalier approach to public sector investment. While that argument is right and persuasive, it should not lead people to dismiss all public expenditure investment, saying that either something is commercial and should be done commercially or that it is in the public sector and should not be done at all. We need a balanced assessment of how to boost public spending without in any way endangering the overall strategic requirements of Government. I believe it can be done.
My final point is this. If we are to go for public spending controls and to overcome the four enemies that I have mentioned, that control must not be an end in itself. It must not rule out reform. There is substantial room for reform in the pattern of the major programmes. For instance, the National Health Service is full of dedicated people who are working extremely hard, but the statement that the National Health Service is safe with us does not encourage or impress me at all. In the next few years we must be prepared for a substantial increase in health provision — for increased demand and for supply of health services of all kinds. There will be vastly increased expenditure, and we must rapidly work out ways of harnessing public and private finance to meet that increase.
I should like to see far more autonomy for local health teams and a much greater variety in forms of finance for health provision above a basic level. We must not allow our thinking to stagnate at the point of merely having

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controlled overall expenditure. We must not, at that point, sink back and say that nothing more can be done. We have to reform the pattern of finance for the growing health provision that a modern society will require.
The Government are fundamentally right, over the two or three-year prospective, and should stick to their guns. In the 1970s people were in revolt against excessive state spending, trade union power, inflation and high taxation — against all the things that the right hon. Member for Chesterfield has come back from the past, as it were, to remind us of today. A great new constituency of people rose up against such talk and against the oppression and the grandee trade union bossdom that it involved. However, that was years ago. The right hon. Gentleman's speech has been a peep into the past.
In the mid-1980s there is a new generation, and there are wholly new industrial and commercial conditions, aeons away from the employment and industrial structure of seven or eight years ago. Those living in the new situation have new needs. Their voices must be heard. They will have different views both about public spending and about tax priorities from those of a few years back, when the monster of inflation threatened to devour us all. The White Paper reflects some of these changes—as far as it goes—but more hard analysis and hard reflection on new policies will be needed. It is my hope that in the Green Paper that we expect to see in a week's time there will be definite signs that this new thinking is under way.
6.35 pm
Mr. Sean Hughes: One of the problems in debates such as this—indeed, in all general debates on finance — is that speeches and newspaper comment can become so bogged down with the minutiae of economic management that they will give people the impression that we are light years removed from their experiences.
The right hon. Member for Guildford (Mr. Howell) said that much lies behind the complicated tables, and I take his point, but it is important that we should speak in simple language that people can understand. Many of the statistics that have been referred to will have little meaning to people. The concept of £126·4 billion has no immediate relevance to an unemployed school leaver on £16·50 a week or to a single parent on £34·10. However, few debates could demonstrate more clearly the political divide between the two sides of the House. Beneath all the statistics and economic jargon, the debate makes plain the political philosophy of the Conservative party.
Reference has already been made by hon. Members on both sides to Edmund Burke. He said that
"Government is a contrivance of human wisdom to provide for human wants."
It would appear that that is no longer the case. I have never been one for hyperbole. I have always held that exaggerated political slogans devalue the language of political debate. However, in parts of the country now — in constituencies such as mine — people have the impression that, at best, the Government do not know of their conditions or, at worst, they do not care. The Government seem to have drawn a veil around areas such as Knowsley — or, indeed, Merseyside as a whole—because they do not want to see what is happening. The right hon. Member for Guildford said that people were in revolt some years ago. Many of us fear that more people will be in revolt in the corning years.
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In an article in The Guardian on 14 February, Victor Keegan said:
"One of the problems is that the Government has yet to convince its critics that it is not using economic arguments as a decoy for what is essentially a political decision — the reordering of expenditure priorities."
That is the nub of the argument. The Government are making financial leeway for abolishing stamp duty on security transactions but they cannot find the leeway to increase housing benefits.
Three areas of expenditure are social security, education and housing. I make no apologies for referring to my constituency; I want to highlight the problems as they have manifested themselves in Knowsley. Nationally, social security expenditure is forecast to rise by 5·5, 4·5, and 4 per cent. over the next three years. As my right hon. Friend the Member for Birmingham, Sparkbrook (Mr. Hattersley) said, that is money for keeping people unemployed. I wonder whether the Government have any comprehension of what that means to people — not people in the Cabinet Office or the Treasury building but people on the large housing estates and in homes in areas such as mine.
Unemployment in my borough averages 27 per cent. Within the borough there are black spots where the percentage is horrifically higher. My right hon. Friend the Member for Chesterfield (Mr. Benn) referred to the fraud of the youth training scheme. Combining the young unemployed with those on one-year Government schemes, we arrive, in areas such as mine, at a figure of 85 per cent. As a percentage of all economically active males and females between the ages of 16 and 64, unemployment is higher in Knowsley than in any other metropolitan district.
If the White Paper were compulsory reading on the breakfast tables in my borough, and if its contents were more easily digestible, there would be acute disappointment and, indeed, despair. The Government's expenditure plans for 1984–85 and beyond do not envisage any change in direction. There is no acknowledgment of present misery. There is not even a genuflexion towards such an acknowledgment. There will be four more years—or three or two — of the same policy. Even medieval surgeons knew that there came a time when it was no use bleeding a patient any more. I am reminded that Matthew Prior said:
"Cured yesterday of my disease, I died last night of my physician."
The figures for housing are just as depressing. The 1984–85 reduction of £490 million must be translated into its human cost. The 1977 report on housing need on Merseyside by the Centre for Environmental Studies showed that 39·9 per cent. of Knowsley residents lived in areas of acute social stress, at a time when the national average was 2·1 per cent. I believe that the latest figures will show further deterioration. Faced with the enormous housing problems, and with the physical deterioration of housing estates—itself evidence of a collapse of morale—the Government consider that it is a matter for self-congratulation that they are reducing public expenditure in that area.
Nationally, 54 per cent. of public housing investment resources comes from capital receipts from the sale of council houses. In Knowsley it is a massive 66 per cent. That means that Knowsley will face more problems and have less income to meet its costs. Most of the estates which comprise the area that I represent were built to rehouse young people and young families from Liverpool.

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With time, the composition of that population will change, and soon an area such as mine will witness a significant increase in its elderly population, yet it will not have the resources to adapt the housing stock to their needs.
I should like now to consider expenditure on education. The White Paper tells us that expenditure on education will fall from £12·323 billion to £12·054 billion between 1984 and 1985. When the Secretary of State for Education and Science talks about "bold and ambitious" plans to raise school standards, I am left wondering whether he bothered to tell the Chancellor about that. One would have thought that expenditure plans would have reflected them. I note the planned increase in expenditure for 1985–86 to £12·410 billion, but that is only £97 million more than the present figure, which is about to be cut. The present sum will prove utterly inadequate in areas such as mine.
The consequence and the stark human fact is that children in Knowsley are not being given a fair chance. In the Department of Education and Science "Statistical Bulletin" for 1982, Knowsley was shown as the education authority with the highest proportion of disadvantaged children in socio-economic terms. According to an HMI report for 1983, that
"is reflected in the ability range of the school population, which is skewed downward. Average attainment on entry to secondary school is about one year below the national average".
I have already argued several times in the House, and shall continue to argue, that there is no immutable law of nature that has decreed that children in my area are any less academically gifted, intelligent or talented than children in more prosperous regions.
We return to the fundamental political divide that becomes evident in debates such as this: that the physical conditions around children prevent them developing as they could. The Opposition believe that it is the Government's responsibility to alter those circumstances. The expenditure proposals show no awareness of the extent of the problem and, not surprisingly, no commitment to begin to tackle it.
6.43 pm
Mr. Roger Freeman: The right hon. Member for Chesterfield (Mr. Benn) referred to my right hon. Friend the Member for Worthing (Mr. Higgins), who is the Chairman of the Treasury and Civil Service Select Committee, as an abacus man. My right hon. Friend is well able to defend himself, but Conservative Members who support him in that Committee and others who take interest in financial affairs, in marked contrast to the Opposition with one or two notable exceptions, might interpret the remarks of the right hon. Member for Chesterfield with some pleasure. It is only by the application of sound and prudent government of national finance that the Government have reduced inflation with great success in the past six years.

I want to concentrate exclusively on capital expenditure. I declare an interest in that for the past 20 years as an accountant, a banker and a director of several companies I have been responsible for helping the flow of private capital expenditure and know how important it is. Like my right hon. Friend, the Member for Worthing, I welcome the new table 1.13 in the public expenditure White Paper which gives more information about gross public sector capital expenditure. As the House knows,
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although it goes out only one year, not three, it corrects the earlier table, which gave net public capital expenditure, by giving gross council house construction expenditure, by adding in defence expenditure and by giving gross investment by the nationalised industries. We are now looking at gross investment. That is a big advance on previous White Papers.
I hope that my hon. Friend the Economic Secretary to the Treasury will have had the chance to read the Select Committee's report. I assume that he has had a chance to look at table 6 in appendix 1 where one of the advisers to the Committee draws attention to the fact that, in real terms, in 1984–85 — the coming fiscal year — gross investment is scheduled to fall, in cost terms, by 6 per cent. Our advisers have made some adjustments to the Government's figures, notably by taking out a large amount of defence expenditure and industrial investment grants. The reasons are set out clearly in the report. Nevertheless, on that basis, adjusted for the privatisation of British Telecom, it shows a sharp fall in gross public sector investment in the next fiscal year.
My right hon. Friend the Member for Guildford (Mr. Howell) has referred to the fact that investment in public housing is scheduled to fall next year. He gave several reasons for that. I think that his remarks can be interpreted as meaning that he supported that reduction, but there is clear evidence in the White Paper that public expenditure in local transport, in buses and certain road programmes, for example, shows a sharp reduction next year, although it must be said that, for nationalised industries, gross expenditure is not scheduled to fall at the moment. Indeed, the reverse is modestly true especially for the British Steel Corporation and British Rail.
The House should be mindful of the fact that, with the 5 per cent. year-end flexibility scheme which I am sure right hon. and hon. Members on both sides of the House support, when we consider the outturn for 1984–85 we might well find that expenditure on capital items is higher than forecast in the White Paper because of the effect of carrying forward expenditure into the next fiscal year. That was not previously available. Nevertheless, we should look at the fundamental flow of capital expenditure. I am worried about the projected fall in the White Paper in capital investment in gross terms as adjusted by the adviser to the Select Committee. I strongly agree with keeping the lid on total public sector spending but am anxious that, inevitably, with a lid on total spending and the continuous upward pressure on current expenditure, the one category of expenditure that has suffered in the past will suffer again in the future. I refer, of course, to capital expenditure.
When Chancellor of the Exchequer, my right hon. and learned Friend the Foreign Secretary said on 16 March 1981:
"It is important to recognise that investment for capital purposes is more virtuous than expenditure for current purposes, but it must still be profitable and well directed."—[Official Report, 16 March 1981; Vol. 1, c. 100.]
There might well be examples of profitable and well-directed capital expenditure in nationalised industries, and within the Government that will be crowded out during the fiscal year by a tight lid on total public expenditure and the inexorable pressures, some demand-led, on current expenditure.
I shall direct three suggestions to my hon. Friend the Economic Secretary, and I should appreciate it, if he has

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time at the conclusion of the debate, if he would comment on them. My first point concerns the financing of nationalised industries. The aggregate external financing limit for all the nationalised industries shows, under the Government's projections, a sharp fall over the next three years. The Select Committee was told that the fall would not be achieved at the expense of capital expenditure plans that could be justified by each individual nationalised industry. My fear is that the Treasury could force postponement or cancellation if there is slippage in the programme of achieving virtual balance in the aggregate EFL of all nationalised industries over the three-year period.
There is a case for greater freedom for borrowing by nationalised industries without Government guarantee. I am aware of the trap into which one could fall by advocating that nationalised industries should borrow without Government guarantees. In many cases, if it is subordinated borrowing for general purposes, the markets, when lending money to nationalised industries, regard the Government as the ultimate guarantor for practical purposes. I am talking about a much more limited experiment in project finance, in parts of which nationalised industries could have joint ventures with the private sector for capital. The results of borrowing—it might not be in the form of debt but might be quasi-equity — would not show as public expenditure or have any repercussions on the public sector borrowing requirement because it was truly private sector capital working with the public sector.
If that happens, for example, for the rail link or links from London to the Channel ports, or as help in schemes for the generation of heat and light in those nationalised industries, so be it, as long as the projects can be justified as profitable. If the Minister has not had a chance to read it, I commend to him the report "The Financing of State Owned Industries" by the Hundred Group of Chartered Accountants, which was published in December 1981 and which contained some excellent recommendations on the financing of nationalised industries.
I agree with what the hon. Member for Colne Valley (Mr. Wainwright) said about capital consumption. There is no comment in the White Paper about estimated capital consumption, about how fast our public assets are depreciating or about gross public expenditure on those assets. There are suggestions in the blue books but not in the White Paper, and the Treasury Select Committee has asked next year that the Government make some comment abut capital consumption.
The Institute for Fiscal Studies in its series 8 report, "Public Finances in Perspective", on page 23, gives an interesting table on the estimated public capital net addition or reduction using asset life assumptions ranging from 40 years for public dwellings to 10 years for plant and machinery in the nationalised industries. We may quarrel with the assumptions about asset lives but it is an interesting table and it shows that over the past decade, under Labour and Conservative Governments, we were consuming our public assets, through depreciation or depletion, faster than we were restoring them or replacing them.
The acceleration was worse under the Labour Government between 1973 and 1978 than under the present Government. However, the fact that there was a constant rate of depreciation and a steady decline in our
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restoration and replacement of public assets gives no cause for comfort to Conservative Members, whether it happened under a Labour or Conservative Government.
My third suggestion to the Minister is that in the next White Paper there should be some commitment on capital expenditure, both as to the amount and proportion in total public expenditure and also as to its continuity. I shall deal 'first with the amount and proportion of public expenditure. I have already said that the Select Committee has recommended that some statement should be made in the next White Paper about whether we are depleting or adding to public assets. It is important that the Government should seek to protect the capital expenditure as a category of expenditure over the coming fiscal years by some form of political commitment, to resist the inevitable pressures on Government and the inevitable pressures on the Chancellor to cut or postpone capital expenditure projects due to the inexorable rise of certain categories of Government expenditure.
As to continuity, we have seen in the construction industry the paradox that over the past few years there have been savage cuts in expenditure on construction in both the private sector and the public sector in years of recession and the reverse in years of recovery when perhaps it should have been the other way round.
I hope that my hon. Friend will take this point on board and will affirm to all Conservative Members that the capital expenditure component should be taken far more seriously in future years.
6.55 pm
Mr. Mark Fisher: Over the past five years, the Government have made their policy of controlling and cutting public expenditure into an article of faith. As the Chief Secretary said, the Government campaigned and won the general election on this policy, so it is they who have made public expenditure into a test of their competence. On the evidence of the White Paper, they have failed the test miserably.
The first function of the White Paper must be to give some statement to the country of what political answers the Government have to its needs and to likely future problems. They are wholly inadequate in that. It appears from the White Paper that the Government's answers to these problems are, "No, we shall not spend public money to resolve public problems."
The second function of a White Paper is an explanation of how those answers are arrived at, and in that, too, the Government are deficient. Children learning maths are always taught, as I was, to "show their workings." In this White Paper, the Government do so at great length and in great detail, but not convincingly. If we were charitable, the Opposition would give the Government nine out of 10 for effort because they have shown such detail, but a great many of the tables simply repeat the same information in a different form. However, it would be generous to give them more than two or three out of 10 for content. The omissions and the false assumptions are legion. They make words such as "fudge" and "mudge" seem overprecise. I shall look at one or two of these omissions and assumptions.
Factors that hon. Members on both sides of the House might consider helpful in evaluating the White Paper are absent. One looks in vain for something simple such as the Government's interest rate policy, a pricing policy in the public sector, or pay projections on which the figures for

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public sector wages are based. No allowance is made in the capital figures for depreciation, although those figures exist and are published elsewhere by the Government. There is nothing on growth, and when the Chief Secretary was asked how he defended his 2 per cent. growth figure he said frankly that the White Paper does not attempt to do that and we shall have to wait for the Green Paper next week.
The White Paper undervalues and devalues the figures that we have been given. Most crucially, there is nothing beyond the first year that shows any working out by the Government of their future revenue. It was a slight impertinence of the Chief Secretary to chide my right hon. Friend the Member for Birmingham, Sparkbrook (Mr. Hattersley) for not producing revenue figures when in their own White Paper, at a time when they control taxation as a policy for the future, the Government produce no figures for revenue after the first year. Most crucially, there is no indication beyond the first year of the Government's workings on inflation, and this is stated only implicitly in one or two specific areas. That makes an appalling catalogue of omissions in the White Paper.
Indeed, it has to be asked how useful to the House, to the Government, or to the public are figures shown in the White Paper on a cash plan basis only, unadjusted for inflation, for reduced national insurance surcharge payments, for huge asset sales or for net debt interest—in other words, figures that are unadjusted for the real world. I hope that the Minister of State, when replying to the debate, will explain some of these omissions. I hope, further, that he will say that the Government intend to rectify them in future years.
It is a question not just of the omissions but of the phoney assumptions on unemployment and on public sector pay awards, most notably on local government spending. Do any hon. Members on either side of the House actually believe that public local authority spending will fall by 7 per cent. in 1984–85 and, after that, by a steady 1·5 per cent. per year for the next two years? I cannot believe so.
The Chief Secretary termed this as a squeeze from an inflated base. If the Chief Secretary knew anything about local authorities, he would know that that is nonsense. He complained that local authority expenditure had risen, but he said nothing about the demand on services in local authorities.
Let us consider the assumptions written into the White Paper on external financing limits in the public industrial sector. Does any hon. Member believe that EFLs will actually fall from £2·5 billion in 1984–85 to £90 million in 1986–87? I suspect that only the hon. Members who believed in the 1980–81 White Paper, which forecast that EFLs would fall from £2·5 billion—rather conveniently the same figure — to £50 million in 1983–84, will believe it this time, but nobody else will.
Since the public industries and, therefore, external financing limits are the centre of the Government's privatisation plans, I shall look at this aspect in slightly more detail. The targets in the public expenditure White Paper are impossible of achievement if, as the Chief Secretary claims—and it is a claim that we welcome—public sector price rises on energy, for instance, are marginally below the rate of inflation throughout the period covered by the White Paper. They are impossible
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of achievement if the Government continue to milk the public sector by backdoor taxation, as the Select Committee on Energy showed clearly last week on cash and electricity prices. The only way that these EFLs can be achieved is if there are huge rises in profitability—that is, huge negative EFLs in future — which is unlikely, if there are substantial price increases in the public sector, or if the Government sell off all the unprofitable nationalised companies. However, the Government are doing the very opposite in attempting to sell all the profitable nationalised concerns.
The Minister of State, in replying to the debate, will have his work cut out to justify these EFL forecasts. If he cannot justify them, and I do not believe that he can, the figures for external financing limits are fantasies. They are as phoney as a £2 note and they are inconsistent.
The public expenditure White Paper expects us to believe that nationalised industries will meet all their investment by internally generated profits and funds. The irony is that that is exactly what British Telecom has been doing in the last two or three years, yet it is precisely that reason that the Government give for their decision to sell off BT. The Government say that they do not want it to be limited by having to find its capital expenditure for internally generated funds. They want to free it so that it can go and raise money in the market. Their policy is wholly inconsistent with their arguments for their privatisation programme.
Where in the White Paper is allowance made for the capital reconstruction that goes with the Government's privatisation plan and with those asset sales that are shown in table after table, sales which so disingenuously disguise the deficit in the PSBR? Each sale, such as that of British Telecom or of the royal ordnance factories, demands a capital settlement of the pension funds, running up to hundreds of millions of pounds each time. Each sale can be made only at a discount of the real value of the company's assets.
In the case of British Telecom, that discount—and we wait to discover it — could well run to over £1 billion. Each sale involves expensive advertising and commission, and in BT's case a huge and rather surprising 24 per cent. increase in the depreciation policy in the year prior to sale.
In table 1.9, and, indeed, in other tables, asset sales are shown as gross revenue. Nowhere does the public expenditure White Paper show recognition of the real net benefit of these sales to the Government. Of one thing hon. Members on both sides of the House may be certain: the gross revenue will not be the benefit to the Government, once the capital of these companies has been reconstructed prior to sale.
In short, these figures and the assumptions in the White Paper are inconsistent and, to say the least, unsafe, where they are not downright misleading and massaged. The Chancellor of the Exchequer must take responsibility for his own White Paper, and I must observe that it is a pretty woeful performance for his first attempt. However, it may be suggested that we should play his little games and let him adjust his figures, because nobody believes that the forecasts in the White Paper will be realised. All hon. Members know that public expenditure will rise. Not one Conservative Member believes in his heart of hearts the figures given for a fall in public expenditure. We all know that public expenditure will rise. The facts are there and have been for the past four years—40·1 per cent. Of

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GDP in 1978–79, and 44 per cent. in 1981–82, and the Government have scraped it down, at huge social cost, to a projected 42 per cent. in 1984–85. The City of London knows that inflation will not fall. If the City believed otherwise, there would be a rush to buy gilts and other fixed interest stocks, which is not the case. The world knows that inflation will almost certainly rise next year. The United States' rate of inflation will rise, and so, too, will ours.
The really important aspect of the public expenditure White Paper, however, is what it reveals of the Government's intentions—what the Prime Minister and Chancellor intend to be the effect of this economic policy on people in the real world. It is a depressing, crabbed and mean picture. A chill must go through anyone reading the public expenditure White Paper who next year wants to get a house, to be housed, to start a business or to expand a business, who might be so thoughtless as to be inconveniently ill next year, who is approaching old age or who is leaving school. The White Paper has no message of hope for any such people. Instead, the Government's message is, "We will not spend money on your needs."
Using the Government's own RPI projections, the Treasury and Civil Service Committee report at page xiv, table 2, shows that public expenditure will remain substantially unchanged in cost terms over the next three years. Even during the recession of 1978–79, up to the present day, there was an average real growth in public expenditure of 1·5 per cent. per year. The White Paper is saying, therefore, in relation to the years of so-called recession, that the Government are going to cut still further over the next three years. That is a horrific prospect for the elderly and the sick in society.
Reference has been made to the figures on housing, overseas aid and health. The Chief Secretary tried to claim that there had been an increase in health expenditure in real terms, but the figures show that it will be frozen in real terms. Anyone who knows anything about health knows that an increase of at least 1·5 per cent. per annum in real terms is necessary just to stand still, much less to bring about any development. The Chief Secretary made no reference to the demand of an ageing population for health care.
An examination of the increases shows that, in defence, since 1978–79 there has been a 27 per cent. increase in expenditure, the largest increase ever in peacetime. In 1984–85 it will be up by 8 per cent. Most tellingly, and inevitably, unemployment benefit on these figures is up 166 per cent. in real terms over the next three years.
The Chief Secretary surpassed himself in finding a new euphemism for unemployment when he described it as a "demand-led programme". What a sick expression that is for the 3 million-plus people who are part of that "demand-led programme". The Chief Secretary ought to face up to the fact and call it unemployment, and unemployment created largely by his Government.
However, the two most damning areas are not those to which I have referred but the plans in the White Paper for trade and industry and for capital investment in general. The Government's response to the manifest collapse of our manufacturing base is to cut investment in trade and industry. Table 2.4 shows that, in total, expenditure is down from more than £3 billion in 1981–82 to £1,300 million in 1986–87. That is an enormous cut at a time when we desperately need to rebuild our industrial base. Regional development grants are down from £659 million
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in 1982–83 to £385 million in 1984–85. Selective assistance to industries remains virtually static over that period.
How on earth can the Government do that? Are they incapable of seeing how far our industrial and manufacturing industries lag behind? When the Chief Secretary and the Chancellor of the Exchequer visit companies in their constituencies, do they not see the old and—to use their words–non-competitive machinery or the decaying plant? Equally stupidly, capital investment is, throughout the White Paper, savagely cut, while current expenditure staggers forward. It is a sane world gone mad. Whom do the Government think they are fooling? Are they really fooling themselves that they have made an intelligent and reasonable response to the industrial needs of the next few years?
In the middle of a manufacturing crisis it is sheer insanity to cut investment, sell assets and pretend that all is well. Even the CBI says that capital investment in infrastructure is far too low. The head of the British Institute of Management, Roy Close, said:
"How can industry cope with the recovery and hope to compete while working with clapped out roads, rail and other services?"
But in table 1.14 the Government say that transport spending will be radically reduced.
Their plans are quite inadequate to deal with the problems facing us. Someone trying to assess how the Government were coping with capital expenditure needs would expect to find something in the White Paper about obsolescence and depreciation. The Government publish depreciation figures, but there is no adjustment for, or appreciation of, depreciation in the White Paper, and in the absence of firm depreciation figures it is difficult to see the precise capital investment needs. However, it is obviously not the intention of the White Paper to face up to reality.
In its implications for the real world, the White Paper is nothing but a declaration of deflation. The Chief Secretary said that the White Paper was transparent, and it is. He said that it was stable, and it is. It is the stability of stagnation. The White Paper is a statement of stagnation that fails to rise to the challenges of the future in which there will be more elderly people and more demands for health care.
We need more industrial skills if we are to expand our industrial base. Allowances should be made to cope with young people leaving school who desperately need to contribute to society. However, not one of the challenges that awaits us in the next four years has been met in the White Paper. Every weekend hon. Members return to their constituencies and see the needs that exist in their hard-pressed hospitals and housing estates and in the state of their roads. If they visit the schools, they will see the potential. There is enormous potential in our young people and local industry, and they have the ability to work together to develop the country. However, to do that, the Government must give some financial and economic encouragement. We desperately need growth, but the White Paper offers no such prospect.
The Opposition do not accept what the Government consider to be the inevitably pessimistic message of this White Paper — that there will be no growth in the economy and that there is nothing to look forward to. We believe that the country can go forward and grow, but that

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that can be achieved only by public sector investment and public expenditure intelligently applied to develop the economy as it should be developed.
7.14 pm
Mr. David Evennett: I am pleased to be able to contribute to this important debate on the Government's public expenditure plans for 1984–85 to 1986–87. Great issues have been raised today by both sides of the House about the technicalities of public expenditure, and I welcome that. I also welcome the Select Committee's report and consider it an extremely valuable document.
However, for once in my life I agree with the right hon. Member for Chesterfield (Mr. Benn). I never thought that that would happen, but I agree with him in that it is the principles rather than the technicalities that are important to the public. The nation looks at the principles of public expenditure rather than at the technicalities.
I support the Government's White Paper and endorse their commitment to aid our nation's economic recovery by controlling public expenditure. The economic policies of the recent past are now truly bearing fruit, and the expenditure proposals before the House today are merely a continuation of the policies of the past four years that were instrumental in achieving a dramatic improvement in our economic fortunes.
The sound expenditure policies of the Government were overwhelmingly endorsed last summer by the electorate, and that should not be overlooked in any debate on public expenditure and the management of the economy. The proposals under discussion are also in line with the autumn statement of my right hon. Friend the Chancellor of the Exchequer, and between the present and 1986–87 the level of public expenditure is expected to remain broadly unchanged, after allowing for inflation. That must be right, and I welcome the plans not only because they show the Government's determination to continue on their chosen course but because they should allow for tax cuts as the economy grows over the next few years.
I realise that public expenditure is always an emotional subject for debate, as we have seen this afternoon. However, I regret the hysteria that we have seen from some Opposition Members, which seems to colour so many of our debates. To reinforce their views, they would seem to need a considerable amount of mythology. Two prominent myths have been reiterated this afternoon. Opposition Members seem to mention them every time that public expenditure is debated, presumably in the hope that if they are stated often enough someone somewhere will believe them.
I am sorry that the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley), the shadow Chancellor of the Exchequer, is not here to listen to my next comment. He often repeats the myth that the Government are dominated by dangerous economic radicals who delight in wielding a big axe on public expenditure and who, not content with cutting down the dead wood, are like crazy axe men or women, destroying all the trees in sight. However, the facts tell quite a different story. Expenditure for the current financial year is greater than ever before and is more than was planned last year. Next year it is expected to increase again. Therefore, that myth is destroyed by the
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facts. I know that the facts are often unpopular with the Opposition, but more money is being spent this year than ever before, and that is indisputable.
The second myth that is often perpetuated is that if the Labour party were given the chance to govern it could work miracles. It is said that a Labour Government could and would spend more money on just about everything. Indeed, the hon. Member for Stoke-on-Trent, Central (Mr. Fisher) has just intimated as much. A Labour Government would either borrow more money on a massive scale or would tap the mythical pool of wealth that always seems to be ready and waiting for their expenditure plans. Of course, such economic nonsense is always trotted out in the knowledge that they will never have any chance of putting it into effect, at least in the foreseeable future. Indeed, we hope that they will not have such an opportunity for a long time, if ever.
That myth can be nailed by looking at the Opposition's alternative strategy together with their record when they were in power. We have heard the same old policies trotted out time and time again. They would continue with the policy that they had when they were in Government, when the public sector borrowing requirement rose dramatically. I take the House back to 1974–75, when their forecast of £2·7 billion became £7·6 billion and the amount continued to rise until 1976. What happened? Did unemployment fall because of this vast increase in public expenditure? No; it continued to rise. Inflation began to rise and the pound began to slide, so much so that the International Monetary Fund had to be called in to bail out the Government.
We have heard criticism of capital expenditure. What did the Labour Government do in the '70s about capital expenditure? They slashed it by some 45 per cent. between 1974 and 1978. When one listens to Opposition Members, including their economic spokesmen, one finds that they sound like the Bourbons: they learn nothing and they forget nothing. It appears, too, that they have not shifted one inch since their overwhelming rejection last June. Recently The Economist, dealing with Opposition economic policies, said that the shadow Chancellor
"had killed economic debate in Britain today by piling cliché on fallacy with all his customary fuss and flourish".
That sums up what he said this afternoon. The second myth is therefore disproved.
Turning from the negative to the positive—the White Paper is positive—I believe that the proposals contained therein must be faced with a sense of reality, as they are. I do not agree with the hon. Member for Stoke-on-Trent, Central. It is reality we are considering. The great strength of the Government since assuming power in 1979 has been their endeavour to bring a sense of reality to the economy.
The Government say that the public sector takes too large a share of the national cake, that taxation, particularly of the lower paid, is too high and that real jobs can be created only when companies produce at competitive prices the goods that people want to buy. These are all common sense. I congratulate the Chief Secretary on continuing this commonsense approach.
The overall picture that the Chief Secretary presented to us of stable real spending disguises some big changes in the expenditure programmes of individual Departments. That must be right. Times change. Expenditure programmes have to be changed. There will be substantial increases in the expenditure of some Departments. Social security expenditure will go up, of course. Already it is 29

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per cent. of central Government expenditure, but there will be an increase of nearly £6·3 billion in three years, as is right.
The hon. Member for Knowsley, South (Mr. Hughes), referring to education, said that there will be less spending in cash and real terms from April 1984, and the Chancellor agreed. This is because the school population will fall by 2 per cent. in the coming year. There has been a considerable increase in expenditure during the last five years in real terms when the school population has been falling.
The expenditure of more and more money does not mean better education or better services. It depends on how the money is used. Those of us who have lived in, worked in and represented London constituencies know that ILEA has proved the point that the expenditure of more and more money does not improve education provision. Nothing has been achieved by greater expenditure in the past and nothing will be achieved by more and more expenditure in the future. The important point is how the money is used.
Despite the claims of the Opposition, I believe that there is no alternative strategy to that advocated in the White Paper. Spending is expected to fall from 43 per cent. of the national product this year to 40 per cent. by 1986–87. This is welcome. It proves the point that what is proposed is hardly the destruction of the public sector or public sector services. The public will not fall for the kind of nonsense they hear from the Opposition, which is empty and emotional rhetoric. The public are well aware of the true situation and they will support Government strategy on public expenditure.
However, there are two important needs to which the Government must turn their attention in the next few years. As we have heard from some of my hon. Friends, there is a real need for tax reform and tax cuts. The system has become so complex and people are so overburdened by tax that there is a justifiable demand for change.
After the Government's hard struggle to get public expenditure under control, which has been attained, I am confident that the goals they have set can be achieved. Therefore, it is time for the Government to get to grips with longer-term planning for public expenditure, priorities in expenditure and the economic effect. I look forward with considerable interest to the publication next week of the Green Paper.
It is time for the Government to go forward to the next stage with the necessary radicalism and confidence and establish a fundamental reappraisal of Departments' responsibilities and expenditure in the long term. Undoubtedly there will be some hard choices and decisions, but we all know in our heart of hearts that they have to be made. The people accept that and will go along with it. Therefore, I hope that the debate will begin now so that by the time of the next public expenditure White Paper it will be well on its way to conclusion.
7.26 pm
Dr. Jeremy Bray: It is a pleasure to welcome my right hon. Friend the Member for Chesterfield (Mr. Benn) back to the House and to hear him in such excellent form after the splendid by-election that he fought. He and I had jolly times buccaneering in the Ministry of Technology in the past, as I hope we shall again in similar roles in future.
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The hon. Member for Erith and Crayford (Mr. Evennett) struck me as a well-meaning loyalist, doing his best for the Front Bench and, alas, a man sadly deluded, who in a few years' time will have to eat all his words, though not perhaps with the speed with which the last Tory party conference had to reverse its clapping from one day to the next. If Government Back Benchers are not living utterly in another world, they are reaching crisis point in the suspension of their beliefs between the reality that they see in their constituencies and the phoney PR front which they try to put down to public relations inadequacies, the exposition of party policy and so on. That is his problem.
The problem we face today is that of public expenditure and the White Paper. There ace two arguments underlying the debate. The first between the parties is about whether public expenditure should for its own sake be reduced or whether it should be increased, whether there is a role in the spending of money or in the using of resources for community need, or whether all resources are best left to the private individual to spend in whatever way he likes. That is an argument that takes us into social policy where I believe the arguments are overwhelming for a large and increasing element in communal provision today. That is the mood in the country.
I should like also to stress the role of public expenditure in what Tory hon. Members so misleadingly call the production of wealth. We all produce wealth, but I refer particularly to the producers of traded goods. I spent a most refreshing morning with my old friend Ian Barron, the managing director of Inmos, in Bristol and Newport. When I was in the Ministry of Technology, as my right hon. Friend the Member for Chesterfield will remember, we were advised to strangle Ian Barron. The production of small computers was to be concentrated on Ferranti and one other firm. Ian Barron came to see me and said that he did not want any Government orders or subsidy; he just pleaded that we should not knock him but should allow him to sell his product. With the generosity that is typical of the man, he asked me to open his first factory, Computer Technology Limited.
My right hon. Friend rightly pointed to the loss that we would face if the Government were so foolish as to sell Inmos. The £200 million that my right hon. Friend mentioned will, I am sure, be seen within a short time as a gross under-valuation of Inmos. For the Government even to have considered an offer from AT and T was lunatic, but for them to sell it at all, at a time when its profits are increasing as rapidly as they are, would be the height of irresponsibility. It would put Hamilton college into the shade for sheer financial mismanagement. There is no reason why the efficiency of investment achieved in Inmos should not be repeated in many parts of the economy and industry today. The opportunities for investment, innovation and development are immense, and the City of London still is not organised to support them properly.
However, there is a third argument with which the Government are principally obsessed, and it is the reduction of public spending—not in the social sphere or in industry, but to reduce public sector borrowing. The Government believe that if there is large public sector borrowing it will send money supply for a burton and we shall be off into an inflationary spiral. Here, I believe, that the Government are in a muddle.
If new Conservative Members want to understand the Government's economic policy, I commend to them the

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Treasury Select Committee report on monetary policy in the last Parliament. We wrote it at a time when sterling M3 — the chosen measure of broad money which the Government were targeting — was going all over the place. That was put down, first, to removing the corset. Then it was put down to complications and innovations in financial markets, and so on. In fact, there was such chaos with the effect on the exchange rates, interest rates and so on, that continuous targeting of sterling M3 from year to year was effectively abandoned. It was rebased between years, and targets during the year were infringed with impunity. So chaotic was the effect on sterling M3 that it has effectively been abandoned as a measure of monetary policy.
The interest rate effects on sterling M3 were found to be dynamically unstable. In other words, one gave interest rates a jerk and money supply responded. Then it would bounce the other way, so one reversed interest rates and found oneself in an increasing oscillation. That makes nonsense of a control system of any kind, and the Treasury model today has no absolute interest rate term in it at all to explain sterling M3. It has been abandoned, and no longer plays a part in rational targetry.
So the hunt is on for a substitute. Clearly, the new M2 is important, because building society deposits now outnumber bank deposits. They were totally left out of sterling M3. We do not have a time series going back far enough to make M2 modified a viable target, because we do not know how it behaves. Attention has turned, therefore, to the cash in our pockets. We are counting the notes, coins and paper clips, and adding to that the current accounts in banks in an effort to see whether that offers a basis for controlling the economy.
The Treasury published a fascinating document in February — Treasury working paper No. 28, "The demand for non-interest bearing money in the United Kingdom" by R. B. Johnston. It is hilariously funny. It is also rather mathematical, so hon. Members perhaps need an interpreter, and I hope that the Treasury and Civil Service Select Committee will oblige. Technically it is an admirable piece of work. It follows conscientiously the best practice in current time series analysis, and looks sensitively and objectively at the actual effects on non-interest bearing deposits recently and in the past. One does not have to read far to discover that one has to consider financial innovation in what has been happening. Financial innovation and structural change sound all very grand, but they mean simple things, such as the fact that the number of wage packets has fallen drastically. As a result, there is less money in the country. As a proxy to that, one uses unemployment—believe it or not—as a measure of the number of wage packets that one no longer has. Then, not the total amount of money in current accounts, but the number of current accounts is another factor in structural change, as well as the number of building society accounts and the number of cash dispensers in banks. In the past, people were too shy to go to the counter to withdraw anything less than £10, or even £20 nowadays, but they cheerfully go to a cash dispenser to draw out a fiver to tide them over a Saturday night. That has been a major effect on structural change.
The number of credit cards is also used as an explanatory factor by Mr. Johnston. Here we get really close to home. Here is last year's and next year's Visa
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card. For my sins, I used to think that one needed an American Express Card, but not so. I am sure that hon. Members other than I find that the House of Commons pass is a good credit card on appropriate occasions. As a long-term credit card with the Almighty, there is nothing better than this kidney donor card—"I would like to help someone to live after my death". That is a credit card with a difference. All these are worth exploring for their effects on what people do with money.
In Mr. Johnston's admirable work, he comes to the conclusion that these simple, practical and common-sense influences on the changing ways in which people use money are very important, and affect the amount of money in circulation and its relationship to income, and thus to inflation. Mr. Johnston's conclusion is that to explain notes and coins on non-interest bearing deposits one has to have some measure of transactions, and volume of transactions in the previous month is an adequate measure. One has to have a variety of bank interest rate terms. However, it is not just enough to have the bank lending rates; one has to have building society rates, and so on, and the measure of financial innovations required, the number of current accounts, the number of building society accounts, and so on.
The importance of that is seen in the fact that the innovation effects in the monetary system increase the velocity of money by about 3 per cent. It means that the real rate of growth of money supply is not the 11, 12 or 13 per cent., as published, but 14, 15 or 16 per cent. If one is to compensate for that with higher interest rates to bring down the effect on incomes and inflation, one will be into savagely deflationary and depressive interest rates and into an over-valued pound as well.
The other joke is that in the past those reasonable, obvious explanatory factors on the behaviour of money were explicable, but how does one predict the number of building society accounts in 1985, 1986 or 1987? If that cannot be done, nothing can be said about the velocity of money and, therefore, targets. Present conditions, which were admirably, lucidly and hilariously spelt out by Mr. R. B. Johnston, make nonsense of what the Chancellor is trying to do.
Those points have established what better people with a more reasonable perspective or argument thought all along. There is no tangible, firm, measurable element to which we can hitch our wagon and, therefore, remain on a straight path and clear of inflation, allowing the economy to look after itself and generate employment. To run the modern economy sensibly, an examination must be made of objectives, the rate of growth, balance of payments and the exchange rate. The basis of modern economic policy is the need to keep the ship on an even keel, despite the many dimensions involved. Once that strategy is set within the nation, the raw material can be used to build international economic co-operation. We can measure the trade-offs between America bringing its budget deficit under control and Britain bringing its gross budget surplus under control. If the Treasury and Civil Service Select Committee had its way and the corrections for public expenditure were produced, the most important correction would be cyclical. Such a correction would turn the public sector borrowing requirement into a huge budget surplus. The Government are pursuing fiscal and monetary policy in a savagely reflationary policy.
Perhaps it is a mercy that the Government's economic thinking is such that they are incapable of negotiating any

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economic co-operation with the Americans. Although mistakes may be made about the way the American economy is being allowed to develop in its medium-term perspective stretching beyond the presidential election, by screwing up interest rates, the dollar, and so on, those factors are nevertheless, a peccadillo by comparision with the long, sustained deflation from which this country has suffered.
The mumbo-jumbo of monetarism which underlies the total of public spending and the public sector borrowing requirement began as a star in a stormy night when the world faced a huge oil price increase and exchange rates were going all over the place. Nations needed something on to which they could hang. That need turned into a political excuse for many depressive and repressive policies. In the present phase, that policy is rapidly becoming a laughing stock. The sooner the honourable, faithful and loyal people such as the hon. Member for Erith and Crayford realise the laughing stock they are defending, the sooner this country will return to sanity.
7.43 pm
Mr. John Townend: Earlier this afternoon I was amazed to hear the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley), attacking nurses, doctors and teachers and making great play of the drop in the quality of services. He graciously gave way to me and accepted that under this Government the number of nurses had increased substantially by 46,000, that the number of doctors and dentists had increased by 6,000, that the teacher-pupil ratio had improved significantly from 18·9 to 18, and that there had been a real increase in spending per pupil. In view of those statistics and if the quality of education and health care has declined, the right hon. Gentleman must be questioning the efficiency, effectiveness and productivity of nurses, teachers and doctors.
The White Paper could be considered a progress report on the Government's achievements since 1979. I remind hon. Members, and especially my right hon. and learned Friends on the Front Bench, that we said in our manifesto:
"The State takes too much of the nation's income; its share must be steadily reduced … any future government which sets out honestly to reduce inflation and taxation will have to make substantial economies".
However those words were interpreted, there was a clear feeling among the electorate, which supported us and returned us to power in 1979 and 1983, that there would be cuts and reductions in real terms in public expenditure.

From a departmental point of view the White Paper can be said to give the state of play in the continuous war between the Treasury and spending Ministers. I compliment my right hon. and hon. Friends in the Treasury. As guardian of the faith, the Treasury has manfully been trying to honour the 1979 manifesto. It is regrettably clear, however, in the White Paper that the Treasury has lost a major battle. There is no longer any commitment to reduce public spending in real terms during this Parliament. We must be thankful for small mercies, that the Treasury is continuing to do battle with the spending Departments. The White Paper invites us to believe that, based on the planning totals, public expenditure in real terms will remain almost the same until 1986–87. On the face of it, the Government still intend to hold spending down.
The Select Committee made two qualifications, to which my right hon. Friend the Member for Worthing (Mr.
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Higgins) alluded. The Chief Secretary made a point about the transparency of the White Paper. I challenge that, because our first reservation and qualification is that the figures are set out in such a way that expenditure cannot be compared from one year to another on a like basis. The distortions are significant and, therefore, the comparison of the planning totals from year to year does not disclose the extent of the substantial rise in departmental spending.
To obtain a correct comparison the Select Committee made adjustments and produced a table removing the following distortions: the reduction in national insurance surcharge, which is a reduction not in spending but in taxation and is a contra item; the change in the method of administrative arrangements for housing and sickness benefit; asset sales, to which a number of hon. Members have referred; and interest payments net of receipts. which were excluded from planning totals.
As an accountant, I remind the House that any public limited company that produced figures that did not make clear changes in the basis of accounting used from one year to another would probably be in breach of the Companies Acts and would certainly be severely criticised by financial journalists. It is clear from the White Paper that one cannot judge the success or failure of the Government's efforts to control expenditure merely by the planning totals.
Dr. Bray: Does the hon. Gentleman agree that, following good accounting practice, the Government should distinguish between current and capital expenditure? Has he examined the corrections that are made to the United States budget deficit by the council of economic advisers in Washington? Is he aware that if the Treasury Select Committee took that as its standard it would turn the Budget deficit in this country into the huge surplus to which I referred?
Mr. Townend: I have not read that document. but I agree that there is a good case for our dealing with capital and current spending in a way similar to the way in which it is dealt with in industry, and that brings in the whole sphere of depreciation.
The second reservation of the Select Committee was based on the performance of the Government. Based on their past performance, what chance have the Government of keeping within their spending plans? Despite a succession of plans since 1979, both to cut expenditure and to contain it, the Government have never achieved what they set out to do. Even if one considers the Government's figures—which we say are somewhat distorted—since 1978–79, one sees that Government expenditure in real terms has risen on average by 1·5 per cent. per year.
When the figures are adjusted to allow for distortions, that increase in real terms becomes 2·5 per cent. per year. That is a significant increase in public expenditure. Indeed, in the current year the Government have been particularly unsuccessful. Departmental spending — excluding increases in asset sales—was about £1 billion more than planned, and this in a year when inflation turned out to be lower than forecast, and therefore we should have expected expenditure to be below that estimated.
In evidence to the Select Committee, one Treasury official admitted that lower inflation had allowed departmental spending to rise in cost terms by no less than £1 billion. That is damning evidence of the Government's failure to control Departments. A fall in inflation to below

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the level forecast should have resulted in large underspendings. That would have happened in the private sector.
If one does a budget for a company in the private sector based on the rate of inflation and the rate of inflation turns out to be lower, by and large that money is not spent but goes straight into net profits. We are aware of the great difference between the constraints in the private and public sectors. In this case, Departments readily seized the opportunity to increase their spending in volume terms.
What has happened this year has highlighted a weakness in our present system of cash limits. As I said, in a period when inflation is rising faster than forecast, cash limits act as a curb on volume spending, and to those of us who want to see spending controlled, that is welcome. However, when the opposite happens, Departments have the opportunity to increase their spending. If the Government expect us seriously to believe that they are committed to controlling spending, if the rate of inflation in future years falls faster than the rate forecast, they should move in quickly and revise departmental budgets downwards.
I apologise to the occupants of the Government Front Bench for being sceptical of their plans. We still need to reduce public spending in real terms if we are to honour our commitment to reduce taxation. There is still a great need to reduce the burden of taxation on industry. The national insurance surcharge is a tax on jobs that we cannot afford at this time, and if we are to abolish that tax, as we should, we must find the money from somewhere.
I regret that the Government seem to have lost their will to take action to reduce spending. What really worries me is that when one looks into the future—towards, say, the next two decades—we shall be faced with a decline in North sea oil revenues, with the rising cost of an aging population and have the time bomb of earnings-related pensions ticking away. Then the need to cut spending will be imperative. Otherwise, we could be faced, not with reducing taxation, but with the probability of increasing it.
For that reason I look forward to the presentation of the Government's Green Paper on future expenditure plans. I hope that we shall not be told that all our problems will disappear by a mythical percentage rate of growth year after year, for while one might accept that for two or three years we could achieve a growth rate of 2 or 3 per cent., one would have to be an optimist to believe that we could achieve that rate of growth continuously until the end of the century.
Sacred cows must no longer be protected. The largest of those sacred cows is the Department of Health and Social Security, which by 1986–87 will account for 43 per cent. of total departmental spending. I question whether we can go on year after year increasing every benefit in line with inflation. In the last Parliament, in one year, the Treasury won a minor victory and secured a 5 per cent. abatement in short-term benefits. That victory was short-lived. As the result of pressure from Opposition Members and some of my less enlightened hon. Friends, a couple of years later the DHSS succeeded in clawing it all back.
I question whether some benefits which are universal should remain universal. Do the affluent really need to receive child benefit? I question whether earnings-related pensions should be dealt with by the state. Should we not
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consider the state merely providing the basic old-age pension, with earnings-related pensions being dealt with and funded by the private sector?
On the health side of the Department, is it sensible that not one penny of the savings from improved efficiency and privatisation — which, over the years, could run into millions, if not hundreds of millions, of pounds—should be returned to the Treasury and on to the taxpayer?
Many people say that overseas aid must not be touched. But do we need, and is it in our interest, to spend £1·25 billion a year in that way? To other people the arts are a sacred cow. Should we be spending £600 million a year on the arts, much of it going to subsidise the minority interests of wealthy people?
Many commentators are saying that the Government's momentum is slowing down, that they are losing the reforming zeal which was a major cause of our success at the polls in 1979 and last year and that they are becoming a Government of consolidation rather than of change, of restructuring and of radical reform. I regret that the White Paper lends considerable evidence to that view, because we see in particular the stabilising, rather than the reduction, of state spending.
Thatcherism caught the imagination of the people with its promise to roll back the frontiers of the state and restore individual initiative, to return power to the people and to let them keep more of what they earn. The Government are undoubtedly going some way along that road. They have had significant successes in implementing their policies of privatisation and in trade union reform.
We cannot, however, achieve what we originally set out to do without cutting expenditure in real terms. I must tell my right hon. and hon. Friends on the Treasury Bench that many Conservative Back Benchers, indeed many millions of people outside the House, urge them once again to do battle with the spending Ministries and achieve real cuts. It is only by getting out the hatchet that we shall be able to make significant cuts in taxation.
8.2 pm
Mr. Fred Silvester: I refer first to some of the difficulties that the country will face, to which my hon. Friend the Member for Bridlington (Mr. Townend) has just referred. We shall see a growth in the number of old people and in the earnings-related benefits scheme, at the same time as a decline in North sea oil. It is well recognised that that lies in wait for us. My hon. Friend concluded that the only way to tackle it is to cut public expenditure dramatically, to be able to pay our bills.
My conclusion, however, is to the contrary. I put this to my hon. Friend because there is a danger that we shall continue to fight battles of former times. Looking into the future, I see the three problems mentioned by my hon. Friend, as well as the possibility that we shall face the future with declining manufacturing capacity. That will make it more difficult for us to reach our goals.
If in the year 2000 I reconsidered our discussions on the 1984 White Paper, would I be able to say that we had used the time between now and then wisely? At present, the answer would be no. We would have been facing problems of growing current expenditure, which would have had to be paid for from many sources, but basically by having built up industrial, commercial, and service capacity to

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bear the load of those costs. They will not go away, and must be paid for out of what has been built up in the meantime.
I am greatly concerned that the industrial structure upon which we rely has been substantially weakened and eaten away. I should like to turn the question on its head. Would we not do better to spend our time in public expenditure debates asking how best to use those funds to strengthen that structure? I doubt whether we are getting it right.
I am not one of those who, like the hon. Member for Motherwell, South (Dr. Bray), advance the case that totals of public expenditure would be able to stimulate the economy if they were sufficiently increased, and would thus generate growth. This concept has been discussed many times in the House. That argument, although it still has great force, has become somewhat tarnished over time. We tend to see the matter too much in terms of total public expenditure, probably because public expenditure debates are related closely to accountancy. The important factor, however, is how public money is spent. One serious problem is that we tend to regard it simply as a total, and do not look underneath at what really matters.
We are considering public expenditure, among other things, as a means of producing a dynamo for public and private industries. That has been mentioned many times in our debate. I apologise for having had to pop out of the Chamber for half an hour earlier. One of my hon. Friends quoted £9 billion expenditure by public bodies in the private sector. In other words, the public system is buying £9 billion-worth of private production. That is right; many other examples can be given of the way in which public expenditure can be used to strengthen our industries.
We must study public consumption most carefully. I question whether we have grasped that nettle, even in the White Paper. A table in the White Paper has been much referred to, in trying to show that capital expenditure has been more or less on a plateau since 1973. It depends how it is defined, but let us not go into the technicalities. Even that table, however, does not show that public expenditure has been put into the part of capital expenditure that is likely to encourage the most productive elements of industry. We must put the money there.
I shall not be hidebound and say that the Vote of the Department of Trade and Industry for regional development grant should stay the same. I have grave doubts whether that sort of expenditure is the best way to approach the problem. We shall be in grave danger, however, if it is taken away and not replaced. Perhaps one should look at the Department of Transport Vote to see whether we should put the money into roads.
Mr. John Townend: Does my hon. Friend agree that an alternative way of helping industry would be to reduce the burdens of, say, the national insurance surcharge and rates? I question whether the only way to help industry is to give it handouts from the Department of Trade and Industry.
Mr. Silvester: My hon. Friend says two things that are commonly heard. He says that they are alternatives and that it is not possible to bring them in simultaneously, which is fundamentally wrong. Some of the changes that he espouses, such as tax cuts and reductions in national insurance surcharge, are important for stimulating industry. That does not mean that we cannot consider
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simultaneously ways of using public expenditure to stimulate industry. It is important for us to remember that such changes must carry on in parallel.
My hon. Friend further referred to "handouts" from the Department of Trade and Industry, which slightly offends me. Some of us from the north-west—I know that my hon. Friend also represents a northern constituency — find that offensive. Over the years, the south-east has received a higher proportion of public expenditure than the north. One of the functions of capital expenditure is the recycling of funds so that public expenditure does not always rain over the south. I do not regard such payments as handouts but as forming a natural balance in an over-centralised country. Some of the money should be recycled, although that is a matter for further discussion.
Mr. Alfred Morris: The hon. Member has made some important points about the balance between public and private expenditure, and speaks in accents quite different from the majority of Ministers. Is it not banal for Conservative Members to speak, as they often do, as if the public and private sectors were mutually exclusive? They imply that the public sector is wealth-consuming and that the private sector creates wealth. Is it not true to say that we can help private industry only if we are prepared to increase public investment? Would it not be good for the private sector of the building industry to have more public investment in housing?
Mr. Silvester: I do not recognise the hon. Gentleman's description of my right hon. and hon. Friends. I have not heard that view expressed. It is self-evident, however, from the information available to us, that some public expenditure is helpful to private industry, which no one doubts; indeed, that point was made earlier. I am merely trying to judge the public expenditure White Paper in terms of our present position, and suggest the direction in which we should go.
I believe, further that the Minister put forward a strong argument on the White Paper, so that people fully recognise the importance of containing the total of public expenditure. The Government however, have also maintained such a strong desire to keep down their borrowing that they have made it difficult to carry Dirt the secondary arm of the operation, which I am anxious to see, in developing the strength of British industry.
Few people believe that the increases in public borrowing that we are now contemplating would be such as either to raise interest rates substantially or to have a dramatic effect on inflation. If we wait for room to be made in current expenditure for the things that I am talking about, we shall never get there. They simply will not happen. Therefore, we shall be sitting on our hands from 1984 to 1986 waiting for the turnround from current to capital expenditure, which will not happen, and missing the time when we should invest money in the things to which I have referred.
I accept most of the philosophy underlying the White Paper. If one sits on the Public Accounts Committee, one can see that there is masses of public expenditure that should not be made. However, the Government should not be so concerned about the grand total and the inability to borrow more that, while they are waiting for control of current expenditure, they cannot begin to put more into the

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capital infrastructure, which is needed. That is a small plea. I know that it is not universally accepted, but it should be considered now.
8.12 pm
Mr. Stan Thorne: I ask the hon. Member for Manchester, Withington (Mr. Silvester) to forgive me for not going down the path to which he addressed himself. I am much more concerned about the comments made by the hon. Member for Bridlington (Mr. Townend). I shall make a point of sending my brother and his family, who are constituents of his, a copy of Hansard because I think that they should have the pleasure of reading the views that he expressed.
The hon. Gentleman showed that he is in business to protect present society in all its forms. He tended to suggest that present Treasury Ministers are a little wet in that they do not appear to be pursuing the so-called reforming zeal that appeared to exist when the Government were re-elected in 1983. "Reforming zeal" is a curious way to describe the policies that have been pursued by the Conservative Government since 1979. I do not know how reforms have been part of the policies that have passed through the House. I am sure that if the hon. Member for Bridlington visited some of the deprived areas of Preston, Greater Manchester, and the north-west in general, he would find that people regarded the policies that he enunciated as unacceptable. That is to put it politely.
My right hon. Friend the Member for Manchester, Wythenshawe (Mr. Morris) put his finger on this point. When we consider public expenditure, we immediately think about what provision is being made for the people in respect of housing, health, services to the disabled and the sick and education—a variety of things, which are included in the White Paper. However, what do we see and have we seen over the past five years, when we examine those services? I admit that the process began earlier than five years ago, to my regret. It could be argued that there has been a steady decline in services to the community over the past seven or eight years. That is particularly disturbing.
In Preston we have a major housing problem. Many people, still with young children, are living in multi-storey blocks of flats. In some parts of Preston the housing is not fit for human habitation. In one road two families might be living in two houses, but the rest of the houses are boarded up because they are sub-standard dwellings. Estimates have been made by the Preston borough council with effect that in the immediate future, the council hopes, there will be expenditure from £3 million to £5 million on repairs alone so that such houses can be made reasonably habitable. Obviously, we shall not receive such money, as is known from previous debates on the rate support grant. The prospects for building new houses in Preston are almost non-existent. The housing committee and the finance committee have had to accept that it is impossible for them to put any money at all into early planning for new houses.
I am sure that I am not the only Member from the north-west or the north-east who receives mail telling stories about individual hardship arising from the lack of community health care. There is not much community health care in Preston due to cuts over some years. When
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one goes into the new Royal Preston hospital, one is initially extremely pleased about what has been provided until one addresses oneself to some basic problems. For example, patients with heart disease have to travel to my right hon. Friend's constituency in Wythenshawe in the hope that they will get surgery. However, my right hon. Friend knows better than me that even that hospital has serious doubts about its ability to continue to provide such care and operative treatment because of the cuts in resources.
Care of the elderly is one factor that is considered when setting up public expenditure plans. I and, I am sure, other hon. Members, have received complaints from organisations such as Age Concern and Help the Aged that are trying to grapple with problems of elderly people living on low fixed incomes, who are faced with the prospect of increased electricity and gas charges, against a background of housing benefit cuts and other factors that have reduced their ability to face the present cost of living with any optimism.
Pensions is a subject that the hon. Member for Bridlington brushed aside, suggesting that we might be overpaying certain sections of the community in benefits. That approach is appalling. It is clear that a major review of the subject of benefits to people such as the elderly, the sick and the disabled, who rely on them, is long overdue.
One of the things that the Government have completely failed to grapple with is the continually growing problem of the outflow of capital from Britain. No guidance backed by legislation has been or is being given by the Government to those who have the capacity to invest in British manufacturing industry. One is forced to the conclusion that the Government have no confidence in British manufacturing industry, without which we cannot possibly create the wealth to pay for the public services that we so desperately need. Private capital still dominates the economy, whether it is in the form of the multinational companies, the banks or the insurance companies. We need the mobilisation of public wealth, correctly deployed. I am thinking, in particular, about North sea oil revenues, which we continue to use to pay unemployment benefit rather than to invest in the public sector services, such as housing. A massive amount of investment is required in British Rail. We have the power to make that investment, but it is not the Government's policy to do so.
If we take the bull by the horns and invest in public services, the multiplier will enable manufacturing industry to create the wealth necessary to continue to support those public services. Keynes was right to approach our economic problems in that way. Historical evidence shows that, if a Government are prepared to invest in the public sector, whether in housing, rails, roads or other needs, the multiplier will be effective and our economic problems will begin to be solved. Public ownership is vital for that, which is why Opposition Members will continue to oppose every measure of privatisation.
8.21 pm
Mr. Timothy Yeo: I am glad that the right hon. Member for Chesterfield (Mr. Benn) has returned to the House, and I congratulate him on that. He delivered his speech with a passion and sincerity, which I have no doubt reflect his convictions. His speech was, however, remarkable in that it made no mention of the public expenditure White Paper. That may be explained by his recent need for an all-purpose by-election speech,

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but I suspect that the real reason lies in the fact that those who, like him, espouse woolly Socialist rhetoric and relive the battles of the 1930s, do not want to face the economic realities of the 1980s. The right hon. Gentleman conveniently forgets that the hospitals, houses and school, of which he speaks so lovingly have to be paid for. To ignore that is to take a short cut to the economic chaos in which socialist France now finds itself.
The right hon. Gentleman departed farthest from reality when he said that he wanted to save the coal industry from Mr. MacGregor. Those hon. Members with a genuine concern for jobs in the coal industry and therefore, of necessity, for the industry's customers, know that the most urgent task is to save the coal industry from Mr. Scargill. In that process of salvation we are more likely to have the support of the miners of Chesterfield that is the right hon. Gentleman.
The format of the White Paper was elegantly analysed by my right hon. Friend the Member for Worthing (Mr. Higgins). The White Paper deserves a warm welcome because it represents substantial progress in the presentation of our spending plans in a much more meaningful form. We are at last getting comprehensible and relevant information, and credit must be given where credit is due. However, I hope that further improvements will be made in future years.
First, the assumptions for inflation and growth for the years covered by the White Paper should be stated explicity and should not have to be guessed at from the figures. The summary of the economic prospects for the period should be included because assumptions for the latter must have been made when the estimates of the costs of social security payments were arrived at.
Secondly, we still seem to be discussing expenditure without reference to how it will be financed. A reference to the revenue-raising implications is desirable, and an analysis of the cost of specific tax concessions would be helpful — for example, the cost of mortgage interest relief. The effect of that on the public sector borrowing requirement is the same as actual spending on housing.
Thirdly, there should be a better breakdown of capital expenditure — a point already referred to during the debate. I am unhappy about the treatment of some items included in capital expenditure, notably those relating to defence.
Fourthly, the exclusion of debt interest from the totals is unsatisfactory. It is not satisfactory to argue that the Government lack control of debt interest, because that applies equally, as the Treasury and Civil Service Committee pointed out, to the demand-led programmes. However, overall progress is encouraging.
It is good that the outturn for 1983–84 will be close to the figures quoted earlier for the financial year, because it suggests that controls are improving. The projected total, which remains roughly unchanged in real terms for the next three years, strikes the right balance. There is no reason to attempt to make a further overall cut in public spending, especially at a time when the economy is experiencing a sustained and satisfactory rate of recovery. In that respect I differ entirely from my hon. Friend the Member for Bridlington (Mr. Townend).
The White Paper must finally nail the lie that the present Government are bent on the destruction of the welfare state. The expenditure on health and personal social services is planned to grow slightly faster than the apparent assumption for inflation. I welcome that, and
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again, I differ from my hon. Friend because I do not see that section of the spending targets as a suitable area for further cuts.
Those features—combined with the emphasis, which is properly being placed, on improving efficiency to ensure that we get value for money from the enormous amount spent on health and social security—will permit the growth necessary to maintain care, while taking into account the growth and aging of the population.
The ending of the commitment to an increase in real terms of 3 per cent. per annum in defence spending is welcome. We must be realistic about the resources that we can afford to devote to defence. I hope that my right hon. Friend the Secretary of State for Defence is making progress in ensuring that his Department pays attention to achieving value for money.
My principal concern with the expenditure plans is the extent to which the public sector capital formation is still being constrained. Many of my hon. Friends referred to that point. Investment in the nation's infrastructure must increase in the long term. In any organisation it is tempting to balance the books for the short term by cutting back on items, such as maintenance and other similar, apparently hidden items, but a short-term solution inevitably produces serious trouble in the long term.
When significant national resources are under-utilised—most notably the work force—every possible effort must be made to put them to good use. I hope that when the Minister winds up, he will be able to assure us that consideration will be given to trying to find methods of expanding capital investment by the public sector.
I deal finally with the credibility of the White Paper's projected figures. The history of spending controls does not offer much encouragement on the record of the past few years. The consistent overshooting of targets in the past is bound to provoke a fair degree of scepticism in appraising the prospects for sticking to the figures contained in the White Paper.
There is some evidence that controls are becoming more effective. That is supported by our experience in the current year. The higher reserve that has been built into the White Paper's figures will help. I believe that there are some problem areas, including local authorities. I must question, particularly in the light of the Energy Committee's report on the electricity price increases, whether the assumptions for price increases by nationalised industries close to the rate of inflation will be acceptable.
Those and other reservations apart, I feel that there is a better chance of hitting these spending targets than some of those set in the past. I believe that the White Paper is a good document. I hope that in future years it will be refined into an even better document. We have come a long way since the days when the previous Labour Government were regularly going cap in hand to the International Monetary Fund.
The Government deserve support for their continuing efforts to keep spending under control. I hope that success in that regard will not be purchased at the cost of excessive restraints on public sector capital formation. I trust that progress on the expenditure side of the equation will be matched next week by progress on rationalising the income side.
8.31 pm
Mr. John Maples: Opposition speeches seem to have divided into two categories. In one category was the speech of the hon. Member for Motherwell, South (Dr. Bray) who took us down the esoteric byways of monetarism. I sometimes think that he and the Chancellor of the Exchequer are the only people who understand it. The other speeches were all emotional pleas for increased public expenditure solely on the basis of need. None of them put the need into the context of an overall economic policy of the resources that would be required to pay for that additional public expenditure or the effect that it would have on the economy if it were raised and spent.
I should like to try to put the matter in the context of an economic policy. We are in a serious recession. The overwhelming objective of economic policy over the next few years must surely be to foster a virtuous cycle of low inflationary growth. With that objective, resources will have to be used to reduce costs and improve investment in the market sector so as to increase competitiveness, and thereby markets and employment.
We have the beginnings of that virtuous cycle. Inflation is well down. We are seeing some growth. We must do everything possible to foster it, and if in the pursuit of that objective public or private consumption has to wait, then so be it.
Those who talk glibly about massive increases in public expenditure should reflect on what happened in the mid-1970s and the effect that such increases will have on competitiveness and output. If the increases are to be paid for by increased borrowing, what will that do to interest rates and costs? If they are to be paid for by increased taxation, who will pay the taxes and what effect will that tax increase have on output and employment? I hope that when the hon. Member for Birmingham, Hodge Hill (Mr. Davis) replies to the debate he will put the proposals for increased public expenditure in the context of an overall economic strategy. It is not reasonable to say that we should spend more on this or that, without saying how the money is to be raised and what effect he thinks that will have on the operation of the economy, output and employment prospects.
If we are to foster the recovery, we will have to restrain public expenditure at least for a few years to allow industrial costs and investment to improve. A growing economy would be able to pay for the improved public services that we all want to see. A stagnating or contracting economy can do that for only a limited period, after which those public services must inevitably deteriorate.
In that context, the public expenditure White Paper commitment, effectively, to zero growth for three years is to be welcomed, but past performance does not provide encouraging omens. On the Treasury's figures, the growth in public expenditure in real terms over the past five years was 7 per cent. On the figures as adjusted by the Treasury and Civil Service Select Committee, it was 12·5 per cent. Public expenditure targets have been consistently exceeded and the apparently inexorable rise continues. Even this Government's commitment to control public expenditure does not seem to have been successful.
I sometimes think that the acid test of a Conservative Chancellor's success will be his control of public expenditure. Someone once said that the definition of a
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successful man is one who can earn more than his wife can spend. Perhaps the definition of a successful economy is one that can earn more than the Government can spend.
If there are to be no real increases in public expenditure for the next few years, we will have to do something different from what we have done over the past five years. I hope that the Minister will tell us why and how we will succeed over the next three years in achieving an objective which has unfortunately eluded us in the past.
Thes areas of public expenditure where savings might be made, are extremely limited even to someone of a Conservative persuasion like myself. One studies the major areas of expenditure, such as defence. The commitment to 3 per cent. real growth goes after next year, but it is unlikely that we shall see any falls. I suspect that the pressure through the increased cost of Trident and increased demand for more conventional forces will lead to rises.
If unemployment decreases we may see some diminution of social security expenditure, but there will be no reduction in the number of pensioners. In the long term, I am sure we all agree that most social security benefits should be raised. They have been held down to the level of inflation, although some have done slightly better. Benefits are by no means generous. There will be pressure for an increased social security budget. There will be the same problem with the National Health Service. The combination of an aging population and advances in medical technique will lead to pressure for more spending, not less.
We have achieved some savings in education, but they are largely a combination of one-off savings and savings that have resulted from falling school rolls, and that will not continue. Within the next seven or eight years they will come to an end and there will be pressure for increased expenditure.
As we are all aware, those four programmes account for two thirds of total Government expenditure. There does not seem to be room for saving much in any of the items in those programmes. If one studies the other public expenditure programmes for savings, one sees that there are few where there is a real chance of effecting reductions in the Budget.
I want to consider briefly three areas where one might make savings. We spent £4·5 billion on transport. There has been no fall in real terms since the Government took office. Of that, £2 billion is effectively a subsidy to British Rail and bus services. I should have thought that there was room for savings there.
We spent £2 billion directly on supporting agriculture, and at the same time it has generous tax concessions. The price support mechanism is thought by farmers to be worth an additional £2 billion. Perhaps we could find a few savings there.
A total of about £6 billion is being spent on the trade, industry, energy and employment budget. There has been a small increase in real terms since 1978–79. Economic growth in the next few years may help with the nationalised industries' financing requirements. I hope that it will, but it seems to me that we could adopt a rather tougher attitude in that area. Although it is easy and tempting to offer help to industries that are in serious trouble, with the possibility of saving them and making them profitable and successful again, it is always done at huge cost to the rest of the economy.

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If we could have all the money that has been invested in British Steel, British Leyland and the National Coal Board over the last 10 years and invest it in the industries of the future, we should be looking at a different economic picture today.
We may also receive a bonus from falling inflation on the debt interest. The net figure is about £7·5 billion. If inflation fell, one would expect interest rates payable by the Government to fall. As the debt is funded over a fairly lengthy period, the benefit would not be immediate. The room for saving on programmes is limited. Whatever limited room there is, I suspect that the Government will find that they will need it to make up the inevitable increases forced on them in other programmes.
We could look for some savings in Government consumption; on the actual goods and services purchased and paid for by the Government. Their total cost has risen from £11 billion in 1972 to a projected £65 billion next year. They constitute 50 per cent. of total public spending. We could look for some serious savings here. On the Treasury Select Committee's figures, total expenditure on Government-purchased goods and services rose by 18 per cent. in real terms from 1978–79 to 1983–84.It will be interesting to hear if the Minister can explain why there has been such an increase. Undoubtedly, part is due to an increase in the defence budget. Nevertheless, there is room for saving in this area.
As to the public sector wage bill, a large element of that, about £40 billion this year, or £60 billion if nationalised industries are included, represents a tax burden of either £60 or £90 a week for every family of four in the country. This element, therefore, is a candidate for careful examination, because very small percentage increases in it translate into very large increases in public expenditure.
The Government's manpower targets are to be welcomed. They have achieved notable success in reducing Civil Service numbers, but this success is not mirrored in the National Health Service or in local authorities, where we originally saw a drop of some 90,000 but where the figure has started to creep up again. There is overwhelming evidence that large areas of the public service could do what they are doing now with fewer people and without reducing the output or quality of service to the public. I suggest, therefore, that we concentrate on the efficiency of the public sector simply to enable us to achieve the target of holding still in real terms.
To do this we need modern management techniques. We need people with the ability, the skill and the will to take tough decisions and to manage the large organisations of which the public sector consists. Civil Servants will have to become managers rather than administrators. They will have to have budgets for which they are responsible, and their incentives and the training that they undergo must be geared to that end.
Two ideas emerge from the Select Committee's report. We need more and better output criteria so that we can measure what the Government achieve with the money that they spend. We also need more, and more extensive, unit cost comparisons. Those published by the Health Service are very useful. Would it be possible to extend them to other areas of Government activity, because they provide a measure of efficiency, or lack of it? Could we not have a Rayner-type team in every part of the public sector, looking for genuine savings? They should not seek
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ways of cutting services, since these are political decisions and we do not wish to see that anyway, but they could look for more efficient ways of doing what is done.
The Minister will tell us if what I am about to suggest is already the case. If not, could we not have a junior Minister in each Department actually responsible for the efficiency of the Department, promoting it and seeing that it is improved? That is an area where we can find substantial savings, but where proper and effective management will be needed to make them.
Members on both sides of the House want better public services, particularly in the National Health Service, pensions, education and social services, none more than a Member like me, who represents an inner-city constituency where these problems, which are all too easy to see, will almost certainly be cured only by Government spending. Such an improvement, however, can come only from a growing, healthy, productive economy. Priority must be given to achieving that growth, or we will end up with poorer public services. I welcome the commitment to no real rise in public expenditure in the next three years, but I am not sanguine about the prospect unless the public sector becomes much more efficient and we find further areas of saving.
8.43 pm
Mr. Tim Eggar: The central message of the public expenditure White Paper is the one that has been referred to least: that, just as the Government have decided that public expenditure is not going to rise in real terms, neither is the reverse going to happen: it is not going to fall. Anyone who asserted in 1980 that a Conservative Government elected on the 1979 platform would be happy to settle for public expenditure in real terms of the current level would have been heavily criticised; a good deal of surprise would have been expressed.
The contrast between this White Paper and that of 1980 could not be greater. Practical experience and political reality have won the day. The political will for a reduction in public expenditure has gone, rightly in my view. Unfortunately, my hon. Friend the Member for Bridlington (Mr. Townend), is not in the Chamber. but I am bound to say that he is re-fighting yesterday's lost battles.
It is one thing for the Government to plan for public expenditure to remain constant in real terms, but it is another to achieve such an aim. Apart from healthy optimism about the rate of inflation, which I consider a reasonable assumption, two major factors cast doubt on the Government's ability to achieve the plans set out in the White Paper. The first is that any reduction in expenditure planned in the White Paper is in just those areas where the Government have least control, namely, local authority spending — we all know, and the Treasury Select Committee have pointed out, the difficulty there — nationalised industry — with EFLs and the historical development there; again we need only to make a comparison with the 1980 White Paper — and asset sales, where the record of the Government in meeting the timetable for the disposal of assets has been rather poor. A question mark must, therefore, be put against those three areas.
I also doubt that the Government can achieve their aim in the Department with the largest expenditure, the DHSS. The expenditure is planned only to take account of

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demographic changes. The plans assume that both recipients of social security benefits and National Health Service and Government employees will be satisfied with constant real incomes during the life of this Parliament. Yet we all expect that the real growth in the economy that we are forecasting for the next two or three years will lead to real increases in the earnings of those outside the public sector. Can we really sustain a position during the life of this Parliament where social security benefits are constant in real terms and where Government employees have constant income levels in real terms and where everyone else in employment sees his real income rising? I have a feeling that the strains thus created over a period of three or four years will inevitably lead to an increase in the planned totals.
If I am right, it is possible that the Front Bench will point out that there is a large contingency reserve. Indeed there is. However, one has only to point to the way in which that large contingency reserve was gobbled up in 1980 to see the dangers that exist for the Government in resting their case on the size of the reserve. I doubt whether we shall be able to keep to the current plans.
Even if we accept, for a moment, Government's ability to keep public expenditure constant in real terms, we must ask how we are going to deliver the additional services that our constituents will inevitably require from us. The answer lies in shifting our focus from a concentration on the quantity of public expenditure to a concentration on its quality, trying to improve the value that we receive from the constant total of public expenditure. Shifting the focus is the only way in which we can hope to deliver both the improved services that we all want and even a minimal form of tax reduction.
Large savings in the public service are possible. The Rayner scrutinies have shown up ways of making them. the achievement of manpower targets has been significant and the MINIS system has undoubtedly been successful. Further improvement in the quality of public expenditure and value for money will be ever more difficult to achieve. There must be a real commitment to improve efficiency by both Ministers and permanent secretaries. Neither have management expertise by nature or training. Ministers see themselves as taking political decisions; civil servants see themselves as giving policy advice.
Good management requires devolved decision-taking. We must push decisions down the line within the Civil Service. Yet its whole tradition militates against that, and the way in which we look at public spending in the House militates in favour of centralised spending and centralised analysis of expenditure. We must have devolved decision-taking.
Within the House and through the media, Ministers and their Departments traditionally have been judged on their policy initiatives and on the quantity of funds they command at the end of the PESC process. It is time that the media and we in the House looked much more carefully at the value Departments obtain for the money they are allocated. We should try to judge ministerial performance on how their Departments carry out these objectives.
I recognise that the PAC is moving in the right direction. Unfortunately, we are not prepared to get down
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to the nitty-gritty analysis of value for money. We still concentrate far too much on the global quantity of expenditure.
The electorate at the next election will expect a reasonable standard of public services, even if personal taxation has been reduced. We all want more capital expenditure, yet few of us can see ways of reducing current expenditure. The gap can be bridged only by improving the quality of public expenditure and value for money.
The challenge facing the Government is whether Ministers can manage their Departments successfully so that they carry through policies, which were largely decided during the last Parliament, in the most effective and efficient manner. That is an extraordinarily boring task. To be a good manager does not make headlines in the newspapers. It is not something that the electorate will understand readily. But we must strive in that direction if we are to deliver the joint aim of constant and improved services coupled with reduced taxation.
8.54 pm
Mr. Peter Bottomley: The major problem is not simply ministerial performance or the task of permanent secretaries. It is a political problem. As I have said on other occasions, my amendment to Lord Butler's definition of politics as the art of the possible is that the real job of the politician is to make possible what is right.
Most things that Ministers would choose to do are blocked by sacred cows on both sides of the House. We can make party political speeches about the Labour party's difficulties with the National Graphical Association and other trade unions. The same applies to the Conservative party, especially relating to the tax or expenditure aspects of the public sector borrowing requirement.
For example, my constituency provides the equivalent of £1·5 million a year to the National Coal Board, and almost the same amount to British Rail. We need to spell out the enormous sums of public expenditure as they relate to constituencies and constituents. Only then can we generate sufficient public awareness of where the money is going, while at the same time offering any prospect of replacement jobs that must be justified by what people will pay.
I shall not spend much time on the DHSS budget. My hon. Friend the Member for Bridlington (Mr. Townend) is not here. I must tell him that, if he spent as much time discussing tax expenditure as he spent discussing child benefit, we might move forward rather than backward. My hon. Friend asked whether child benefit should go to the rich. Would he prefer to return to the previous position of child tax allowances which gave greater help to the rich than to the poor? Indeed, the very poor did not receive any help from child allowances because at that time many of the working poor were below the tax threshold. Child benefit as part of tax credits gives as much help to the poor as it does to the rich.
I shall now raise the sacred cow with which Brian Walden nearly dealt in his article in The Standard. If he wants to take the debate further, I am not available this Sunday, but I might be free the following Sunday if he wants me to appear on "Weekend World". He accused the Government of starting to kick some of their own supporters. We should start explaining to some of our supporters what we are doing on certain matters. For example, with mortgage interest tax relief it is wrong for

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someone on the highest rate of tax, with a mortgage at the £30,000 limit, to receive three times the help of someone with an average mortgage of £10,000 on the standard rate of tax. If my tax rate is 75 per cent., and I have a £30,000 mortgage, why should I receive an additional £50 a week to spend? If I were in a different stage of my life cycle with a mortgage rate of £10,000 and paying the standard rate of tax, I would receive only £800 a year in help.
That is a massive distortion of the way in which people might use their additional resources. It is far better to encourage them to use their disposable resources in a way that generates jobs. We must not become hooked on the idea that because we created a mortgage interest relief system in the days when only one in eight of us were buying a home, it is still appropriate. It is not.
One small caveat is that I do not want to see instant and massive change. During the next 20 years we can deliberately, openly and justifiably move to a system where we concentrate housing help at the time of family formation. Whether one is a wet—as I am—and wants to see help concentrated on those most in need, or on the dry side—I sometimes think that I can argue better than my dry colleagues—we can openly argue for a system that makes far more sense. It should be a matter of public debate in advance of Government decision.
Thus I would pick up from the Treasury Committee's report the idea of green budgets. Although I do not go along with the idea of forecasts more than a year ahead, because I think that the uncertainty has become too great, we can ask for projections—which if they do not come in response to the Treasury Committee's request, certainly ought to come as part of the Green Paper which we are expecting at the time of the Budget on the long-term future of public expenditure—on what, for example, is likely to happen to the time bomb of the cost of mortgage interest relief as the average mortgage doubles from £10,000 to £20,000, as I predict it will within over the next 10 years, at a time when more and more people at the time of household formation will be inheriting the value of the home from their parents or grandparents.
It seems to me that those who argue—as my hon. Friend the Member for Bridlington did — for the abolition of the national insurance surcharge are wrong. This is not the time to do anything substantial in further reducing that surcharge. All the evidence is that pay settlements are higher than the sort of settlement which would be consistent with generating greater wealth in this country and continuing to lower inflation and unemployment.
We are at the most critical time of this Parliament for the future of the economy of this country. I see signs that pay settlements are going to hold at about the present level, which appears to be about 7 per cent., and are likely to grow. I believe that the reason for this is that more employers feel that they can afford increases of that sort. The wrong message would go out to employers—who are the people who agree pay settlements, although they do not formulate pay claims—if the national insurance surcharge were abolished in the forthcoming Budget. I suspect that we would then see higher pay settlements, which would be counter-productive for the unemployed, counter-productive for the country and, most important of all, especially counter-productive for low-income earners at a time when they have family responsibilities.
I would therefore argue to my right hon. Friend the Chancellor of the Exchequer, through my hon. Friend the
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Minister of State, Treasury, that it is necessary to have a tough Budget and to say openly that the national insurance surcharge will be seriously reduced only when it is clear that pay settlements are being reduced again. so that people will know that there are bonuses to come if they take individual decisions which are consistent with the economic prosperity of this country.
I would go a stage further. In terms of any possibility of rate relief for businesses, I would not go down that line for the time being. There is no evidence that employers are briefing their employees on the rates burden on their job. Until that happens, we are not going to get sustained local community pressure which will make possible the achievement of the Government's target for local government spending.
It can be seen from the Committee report—which is very valuable and helpful to all of us—that two of the most doubtful elements of the public expenditure forecasts are nationalised industries' cash requirements and local government spending. I do not believe that we are going to see local government spending under control until both domestic ratepayers and the people at work realise what the burden is to themselves. We have got to enlist more people in the army of those who support what the Government are trying to achieve and whose involvement is necessary if it is to be achieved.
I have not got time to develop all my themes in this debate, but perhaps in this half-speech I can say publicly to you, Mr. Speaker, that I shall be hoping to catch your eye in the Budget debate in order to make the other half. I hope that I have said enough, however, to make it plain that, whatever differences there may be between hon. Members on the Government side or between hon. Members on either side of the House, it is important to try to tackle some of the issues which have been swept away because it has apparently been politically impossible to discuss them openly. It is only by open discussion of the options and the issues, and the pressures on Ministers, whether from Government supporters, other people in the country or members of the Opposition, that we are likely to set this country on a consistent course towards not only greater prosperity but greater and more rational matching of resources and needs over the family or individual life cycles.
Most of the arguments about income transfers and most of the discussions about taxation are not between two static groups within the community but are between each of us with our different financial positions, our ability to contribute and our needs for extra resources at different stages of our own lives. So I hope that when the Green Paper comes from the Treasury on time bombs, or long-term expenditure and revenue forecasts we are going to be able to consider those issues in the way in which I have tried to tackle public expenditure this evening.
9.4 pm
Mr. Terry Davis: It is unfortunately necessary for me to begin on a sad note. I should like to associate the Opposition with what was said by the right hon. Member for Guildford (Mr. Howell) about the loss of Sir Hugh Fraser today. We all express our sorrow and send our sympathy to his family.
Turning to a more pleasant task, I welcome back my right hon. Friend the Member for Chesterfield (Mr. Benn). I can imagine his feelings on 10 June when he found that he had lost his seat after representing the city of Bristol for

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almost 30 years. However, he has shown by his speech today that he will be an outstanding representative for Chesterfield, and a worthy successor to Eric Varley.
My right hon. Friend would agree that he has not made a maiden speech. He could not make a maiden speech three times. He has the distinction of having stood as a candidate in more by-elections, I believe, than any other Member of the House, and he has been victorious in every one.
I must say that I think my right hon. Friend was hard on the right hon. Member for Worthing (Mr. Higgins). He accused him of being too managerial in his approach. I would expect my right hon. Friend to agree that we need good management as well as passion if we are to build the caring society that he and I and all our hon. Friends want to see.
I must make one personal comment about the right hon. Member for Worthing who is Chairman of the Treasury and Civil Service Select Committee. Having made his speech, he remained in the Chamber for most of the debate. That was much appreciated on the Opposition Benches as well as his own. The courtesy of the Chief Secretary in remaining for almost all the debate has also not gone unnoticed.
My right hon. Friend the Member for Chesterfield will no doubt find that there have been several changes in his absence, and that some of them are changes for the worse. For a start, we have a new Chancellor of the Exchequer. Unfortunately, we have not had any change in the Government's policies. My right hon. Friend will have noticed that, at first sight, there do not even appear to have been any changes in the Government's plans for public expenditure. We are still discussing the total of £126·4 billion for 1984–85, as we were when he last sat in this place. That is significant.
A White Paper was published in February 1983 by the Chancellor's predecessor, the present Foreign Secretary. That was the first time that we heard the magic figure of £126·4 billion for 1984–85, but I doubt whether anyone—not even the then Chancellor himself—realised the fateful significance of that figure. It was clear at the time that the then Chancellor did not expect that figure to be treated as though it was written on tablets of stone—unalterable, untouchable and inflexible. After all, he drew attention to the fact that the figures for 1984–85 and 1985–86 were planning totals. He said that they should be regarded as provisional. He promised the House that they would be reviewed later in 1983.
That Chancellor has gone. Gone, too, is all thought of flexibility. The right hon. Member for Blaby (Mr. Lawson) has all the flexibility of an iron maiden. There is no question of provisional figures. As last year's White Paper contained the figure of £126·4 billion for public expenditure in 1984–85, £126·4 billion it will be. It was called a planning total, and a planning total it will still be called. Such inflexibility gives planning a bad name. It is not planning. It is a fetish. The Chancellor is obsessed with the public expenditure figures that he inherited from his predecessor.
It does not matter to this Chancellor what changes have taken place at home or abroad during the past 12 months. It does not matter to him whether unemployment is lower or higher than was forecast at the time that the figure was published. It does not matter to him that the Government
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have failed to reduce the cost of Common Market support for agriculture. Above all, it does not matter to this Chancellor whether the economy has done better or worse than was expected a year ago. Whatever happens, it makes no difference. Public expenditure will be £126·4 billion next year simply because that is what the Chancellor's predecessor said it would be one year ago. The magic number of £126·4 billion must appear at the bottom of the page.
It is not just the forensic skills of the Chief Secretary to the Treasury that have been called in aid; every possible accounting skill has been pressed into service to ensure that the sacred figure remains untouched. We had testimony to that effect this afternoon from the Chief Secretary himself. He told us that many people had worked for many months to keep the figure at £126·4 billion. To serve that idol, no sacrifice is too great for other people. No sacrifice is too great for the unemployed, for the sick and disabled, for pensioners or for the homeless. All must be turned away because the Chancellor believes with the unreal and unreasoning passion of a witch doctor that public expenditure must not be allowed to exceed £126·4 billion.
Everyone knows that the figure is bogus. I do not think that anyone really believes that total public expenditure will really be £126·4 billion. There is one possible exception. From his speech, I think that the hon. Member for Carshalton and Wallington (Mr. Forman) believes it, but we need not take him too seriously. After all, he understands so little of his Government's economic policy that he still believes that it is their policy to increase public expenditure as and when the increase can be afforded. That is what he described as the aim of the Government. He has not read the White Paper and has not even listened to the Chief Secretary, who assured us that that is not the aim at all. The aim is to keep the total "broadly stable".
The Chancellor's obsession with the total of £126·4 billion has other consequences. In the real world, the real costs of real Government programmes change in response to what is really happening and, as it is inevitable that the cost of some of the Government's programmes change, it is equally inevitable that, as a result of the Chancellor's grand obsession with the £126·4 billion, he must rob Peter to pay Paul.
If the cost of implementing the common agricultural policy is £400 million more than the Government anticipated one year ago, the Chancellor sells off another £400 million-worth of public assets to keep the magic figure of £126·4 billion at the bottom of the page.
If more people are unemployed than the Government expected one year ago and the Department of Health and Social Security must therefore pay out more in social security benefits to the tune of £1·3 billion, the Chancellor must make cuts elsewhere. Therefore, he has chosen, yet again, to cut the budget for housing and to force the gas and electricity industries to increase their prices to pay for their own investment programmes and those of the National Coal Board and British Rail. It matters not to the Chancellor that the money might be readily available in the money markets to finance the capital expenditure of those public corporations, and that such capital expenditure would produce a handsome return on investment in the energy supply industry. It matters not that such price increases will impose further hardship on the pensioners, the families of the unemployed and the families of the low-paid. It matters not that they will increase the costs of

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British industry which is fighting to beat foreign manufacturers that import into Britain and to win export orders abroad. It matters not that they are directly inflationary for everyone, industry and domestic consumers alike. It matters only that they help to keep the magic figure of £126·4 billion at the bottom of the page.
We must not allow the Chancellor's obsession or the details of the White Paper to distract us from the truth about the Government's policies. Like the amount of public expenditure, the pattern of public expenditure is as much a matter of politics as of economics. The hon. Member for Manchester, Withington (Mr. Silvester) drew attention to that. My hon. Friends the Members for Knowsley, South (Mr. Hughes) and for Preston (Mr. Thorne) also pointed out that the pattern of public expenditure is related to political philosophy.
We had a glimpse of Conservative political philosophy from the hon. Member for Bridlington (Mr. Townend), who demanded even greater cuts in public expenditure, in direct contrast with some of his hon. Friends such as the hon. Member for Suffolk, South (Mr. Yeo). The hon. Member for Bridlington particularly argued for cuts in health and social security, but in his haste to defend the Government he got his figures wrong. He claimed that there were far more nurses than have actually been employed under this Government, and wrongly accused my right hon. Friend the Member for Birmingham, Sparkbrook (Mr. Hattersley) of attacking nurses, doctors and teachers. It is worth stressing, for those who did not hear him, that the hon. Member for Bridlington was questioning whether the people who depend on social security benefits should be protected against inflation. He did not take the time to identify the groups that he had in mind or to say whether he meant pensioners, the sick, the disabled, the unemployed or families with children.
Unlike the hon. Member for Lewisham, West (Mr. Maples) and possibly the hon. Member for Enfield, North (Mr. Eggar), who were, I think, arguing that the present levels of pensions and benefits are not sufficient, the hon. Member for Bridlington was asking the Government to consider the possibility of real cuts in pensions, sickness benefits and the rest.
Against this background, it is worth saying that the only thing offered by the Government to pensioners is protection against rises in the cost of living. There is no prospect in this White Paper of any improvement in the standard of living for pensioners during the next three years, or any prospect that they will be given protection against price increases. They will not share in any improvement in the standard of living of the population as a whole. Once retired, they are to be forgotten. Their contribution to the economic recovery will never receive its reward, according to the White Paper published by this Government.
Housing is an item of public expenditure that was mentioned by several of my hon. Friends and, to be fair, some Conservative Members. Next year, this Government will spend less in cash terms than in 1979–80. If we allow for the effect of inflation, the housing capital budget has been reduced by half in real terms under this Government, as my right hon. Friend the Member for Sparkbrook pointed out. As my hon. Friend the Member for Knowsley, South said, this will create misery for thousands of families and individuals.
The hon. Member for Colne Valley (Mr. Wainwright) pointed out that there was need not only for more capital
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expenditure to increase the housing stock, but for more capital expenditure to correct the defects built into a large proportion of the housing stock during the 1960s. He pointed out that there are 1·5 million dwellings — I cannot confirm his figure but I am happy to accept it—for which it would cost £7 billion to deal with the problems of system-built housing. That will not be financed by the provisions of this White Paper and will not receive any money for the next three years.
Above all, there will not be an adequate supply of new housing in the next three years.
When the Chief Secretary replied to my right hon. Friend the Member for Sparkbrook this afternoon, he lost my personal respect. I have had great respect for the right hon. and learned Gentleman in the past, but he made a blatantly misleading point today. He conceded the accuracy of the figures given by my right hon. Friend the Member for Sparkbrook in describing the decline of public expenditure on housing, but he claimed that this simply reflected the switch from the public to the private sector. He sought to reinforce his point by telling the House that starts in the private sector are now higher than they have been in any year for the past 10 years. As far as that goes, it is true, but it is misleading.
Let us put on one side the entirely valid point made by my right hon. Friend about the people in greatest need, and the people with lowest incomes, being served by the public sector with regard to housing. Let us approach the issue without any reference to the argument about the rival merits of public or private ownership, or any disagreement as to whether housing should be owner-occupied or rented. What matters is the total of housing starts with the private sector and the public sector added together.
There has been a catastrophic fall in the number of starts in the public sector since 1978, and the private sector has failed to fill the gap. The total for all starts—the total of public and private sectors added together— is not only lower than 1978; it is lower than it was 10 years ago, and it is lower than in any year between those dates. In fact, the total is lower than it was in every year during the 1970s. It is only higher than the previous three years of 1980 to 1982 under this Government. When one considers completions, the figures for last year were even worse. The Chief Secretary must be desperate to stoop to such a misleading point in order to try to defend the Government.
If the Chief Secretary made a misleading point about housing, I must tell him that the White Paper comes pretty close to deception in its section on the Health Service. The White Paper, volume II, at page 76, referring to the Health Service budget, states:
"On the Government's projections of price and pay movements this provides scope for real growth in resources of some 1 per cent."
However, the same White Paper admits elsewhere that the effect of demography is estimated to average just under 1 per cent. The fact is that the impact of demographic change is equal to the increase in the budget for the Health Service given in the White Paper. By the Government's own statement, there is no real growth in resources for the National Health Service. As my hon. Friend the Member for Stoke-on-Trent, Central (Mr. Fisher) said, an increase is needed just to stand still. To argue otherwise is tantamount to claiming that there is a real increase in the social security budget of the same Department, because the provision is increased to take account of increased

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numbers of elderly people and unemployed people. Not even this Government are suggesting that the increase of £1·3 billion in social security is anything other than keeping pace with the number of people dependent on social security benefits.
The social security budget is accepted to be what the Chief Secretary calls "demand-led". I must say that "demand-led" is a funny phrase, as if thousands of people throughout the country were demanding to be treated as unemployed, but I will let that pass. For the sake of discussion, let us use the Chief Secretary's language, and ask the Minster of State to explain why the Treasury accepts that the increase in the social security budget of the Department is demand-led, because there are more children and more elderly people than previously, but then claims that the increase in the health budget is a real increase when it is due to that same increase in the number of children and elderly people.
However, we cannot leave the budget for the National Health Service there. Any hon. Member who takes an interest in the Health Service knows that the budget needs to be increased by another 0·5 per cent. to take account of more expensive forms of treatment — what the Department calls technological change. There is no provision for technological change in the public expenditure White Paper. It is not simply that there will not be an increase in provision, as claimed by the hon. Member for Suffolk, South and urged by the right hon. Member for Guildford. Indeed, a real cut in the budget for the National Health Service will be experienced in the next three years.
However, the cut in public expenditure for social services is even greater. The White Paper boasts that next year spending on the personal social services — the services on which the elderly, children in the worst possible family circumstances and the disabled depend—will be £39 million more than was proposed a year ago.
It fails to note that this amount is £3 million less than is being spent in the current year. Thus, there is a cut in cash terms, despite the fact that everywhere the White Paper forecasts inflation running at 5 per cent. That is to happen despite the same demographic factors as affect the NHS and social security budgets. If the NHS needs an extra 5·7 per cent. to stand still, the personal social services need the same increase. In practice, the effect of the White Paper is to cut spending on social services by more than £100 million.
I apologise to those hon. Members I have not mentioned but who spoke in the debate. In particular, I apologise to the hon. Member for Lewisham, West, who made the thoughtful speech that we have come to expect from him in such debates. He put several questions to me, but I do not have time to answer them now. Instead, I look forward to debating the issues with him in the future because I respect the way in which he approached those questions. I shall certainly do my best to answer them in our future debates.
But it is the Government who should really apologise—they should apologise for the White Paper. The truth is that it is a miserable White Paper, which means misery for thousands of pensioners with no prospects of any improvement in their standard of living; misery for thousands of parents trying to bring up children in flats that
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have no gardens, and who have no prospect of moving into council houses; misery for thousands of people who will suffer or even die as a result of ill health that is directly related to all the inequalities catalogued in the Black report entitled "Inequality in Ill Health"; and misery for the thousands of people who are waiting for the help that they are entitled to receive from the social services. That is why the Labour party will vote against the White Paper.
9.27 pm
The Minister of State, Treasury (Mr. Barney Hayhoe): The hon. Member for Birmingham, Hodge Hill (Mr. Davis), began by expressing sentiments that I think are shared by all hon. Members. First, he referred to Sir Hugh Fraser, whom many of us have known for many years. I knew him when I was a young Conservative, and he was exceptionally kind to me long before I came to this House. No doubt many others could cite similar experiences. He also played a great part in many of our financial and economic debates.
The hon. Member for Hodge Hill also referred to my right hon. Friend the Member for Worthing (Mr. Higgins) and to the way in which, as Chairman of the Select Committee, he had stayed close to the debate. Like the hon. Member for Hodge Hill, I also thought that the new Member of Parliament, the right hon. Member for Chesterfield (Mr. Benn), was a little less than fair in his comments about my right hon. Friend's speech.
However, the debate has been useful, and much more wide-ranging than the two previous debates in which I was privileged to take part. Several hon. Members made highly technical speeches, while the right hon. Member for Chesterfield, on his return from the by-election, made a deeply emotional and passionate speech—if that is the appropriate description. I may have something to say about his contribution later.
However, my right hon. Friend the Member for Worthing was unfairly criticised by the right hon. Member for Chesterfield, who seemed to imply that the figures did not matter. My right hon. Friend began his speech by drawing attention to the enormous sums that we are dealing with. The White Paper shows total public spending this year at a little over £120 billion and next year at £126 billion. In other words, the public expenditure there described amounts to about £40 per week for every man, woman and child in the country. We are talking about very substantial sums. When we talk of them in millions and billions, they mean very little to people, but when one sees them in terms of £40 per week for every inhabitant of the country, one gets a better appreciation of the amounts involved. Expenditure 20 years ago was only £3 to £4 per week. The contrast between the figures shows not only the ravages of inflation but also a near doubling in real terms of spending by central and local government over the last two decades.
My right hon. Friend the Member for Worthing spoke of the difficulties over the timing of these debates. I agree with much of what he said. With the Budget only a week away, with people obviously interested in the first Budget of the new Chancellor and with the Green Paper on long-term public expenditure being promised for publication next week, this debate has been made more difficult. Some essential elements in speeches about the economy and about public spending and all the implications associated with it require information which will not be available until next week.

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Some of the answers about revenue projection and economic forecasts, and answers to questions that have been properly raised by the Select Committee in its report, will be given by my right hon. Friend the Chancellor in his Budget Statement, but I must hasten to make it clear that in no way am I anticipating, prejudging or preempting what he may say from the Dispatch Box next Tuesday. The Government will, of course, study the Select Committee's recommendations and the further work which the Select Committee has decided to undertake, and will be responding in due course.
I should like to say something about overspending, which has been referred to by quite a number of right hon. and hon. Gentlemen who have taken part in the debate. The Select Committee commented:
"despite a succession of plans for either reduced or constant real expenditure levels, the actual outturn has invariably exceeded the planning targets—by significant amounts."
For the last three years, our plans have been based upon cash. We no longer work in real terms in regard to public expenditure plans. We are not dealing with funny money, as we used to, but with cash planning. We are following and, indeed, building upon the first steps which were taken by the right hon. Member for Leeds, East (Mr. Healey) when he was Chancellor of the Exchequer.
As a result of the switch to cash planning, the main reason for the real increase in the value of the plans has been our success in getting inflation down faster than anyone expected. One of the benefits is that the cash provided this year will buy more. The public are benefiting as a result, as they do in so many other ways, as we succeed in bringing inflation under control.
For each year from 1981–82 to 1984–85 the new plans are within the cash totals published in 1982, the first year of cash planning, as is clearly shown in table 1.1 of volume I of the White Paper. It is worth noting that a variation of 0·5 per cent. in the forecast rate of inflation is worth £1 billion of expenditure in cost terms. We cannot fine-tune the plans to this degree of accuracy. If we clawed back modest increases, surely then we would be expected to increase the cash when inflation was higher than expected. In other words, we would be undermining the whole principle of cash limits and cash planning. That would seriously weaken the disciplines that those regimes imply.
The planning and control of public expenditure is not simply a matter of allocating funds to certain programmes. We are equally concerned to secure value for the money made available. The Civil Service is already smaller by 100,000 than it was in April 1979, and some of my hon. Friends referred to our success in achieving the target of 630,000 for the Civil Service that was set by my right hon. Friend the Prime Minister in July 1979. The White Paper now shows that we plan a further rundown of nearly 40,000 by 1988. The reductions so far represent a saving of about £600 million a year in the Civil Service pay bill — a very considerable saving. It underlines what my hon. Friend the Member for Enfield, North (Mr. Eggar) said about the successes that can be achieved by improving efficiency in the Civil Service. He referred to the Rayner reviews which, together with other parts of the centrally organised efficiency programme, yielded savings in excess of £450 million between 1979 and 1983. I pay tribute, as I have done in the past, to all the help that we have been given by civil servants, who share our aims of improving efficiency and effectiveness in the public service.
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Good progress is being made in strengthening financial management in Government Departments. A report on the plans announced last September will be published in the White Paper in July. I am grateful to my hon. Friend the Member for Lewisham, West (Mr. Maples), who spoke convincingly on this sphere of our activities. We are looking for comparable improvements in efficiency in the other public services. So far, local government has reduced its manpower by only 4 per cent. since 1979, and the figures are beginning to rise again. This is most disappointing, and I hope that the trend will soon be reversed. Manpower reductions are the key to reducing local authority spending.
The National Health Service is also expected to introduce major efficiency savings to provide improvements in services and to reduce waiting lists. The Griffiths report recommends ways of transforming the management of the NHS and will make it easier to secure such savings.
My right hon. Friend the Member for Guildford (Mr. Howell) spoke about future medical needs. I am sure that he shares my hope that the promise of the Griffiths report of greater efficiency and effectiveness will be achieved, and that this will provide initial resources for patient care. The hon. Member for Hodge Hill took no account in what he said about public expenditure plans over the coming years of any change in efficiency. That is wholly unrealistic, because, unless we can get improvements in efficiency and effectiveness in the public service, just as they are now being achieved in the private sector, there is no chance of our economy growing steadily in the future.
My right hon. Friend the Member for Guildford referred also to the 3 per cent. pay factor, as did the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley), who said that the figure was unrealistic. I want to make it absolutely clear that the 3 per cent. pay factor is not a pay norm, as the right hon. Gentleman seemed to think. It applies only to central Government pay, not to the nationalised industries or to local authorities, which are not directly controlled by central Government. Of course, in 1984–85, as in earlier years, there is a clear presumption that the additional cost of any settlement above the pay factor will be found from within the existing provision. While recourse to the reserve in such circumstances is not absolutely ruled out, there can be no easy assumption that it will be allowed.
I hope that no one will take the Select Committee's comments in paragraph 28 of its report as implying that there will be easy and ready access to the reserve to cover pay increases in the coming year. I am glad that my right hon. Friend the Member for Worthing, the Chairman of the Select Committee, assents to that proposition. I am sure he would be quick to repudiate any such idea. I confirm that the Government are committed to genuine pay negotiations with the Council of Civil Service Unions, and I hope that an agreed settlement will be reached this year as it was last year.
Mr. Hattersley: I am sure that the Minister was trying to be helpful, but he has left many of us more confused than before. Will he tell us in simple and precise language whether he is expecting the pay negotiations in the relevant public service to which he has referred to come out at 3 per cent? Is that his intention?
Mr. Hayhoe: I am expecting the pay negotiations in the relevant public service to be genuine, and I trust that

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we will get agreed settlements. I certainly will not be conducting those pay negotiations over the Table in the House of Commons. The right hon. Gentleman shows how far removed he is from reality by making such a suggestion. [Interruption.] Those involved in negotiations, who know what they are talking about, recognise that in recent years settlements have been a little higher than the pay factor and have generally been absorbed within the cash limits, although some additional provision was made from the reserve in 1982–83 and 1983–84 for the National Health Service.
I endorse the statements of my right hon. Friend the Member for Guildford about the damaging effect if the pay negotiations within the public services, as with anywhere else in the economy, are not conducted with great responsibility by all. There is, of course, a link between pay and jobs, and surely by now that is understood in the House and elsewhere. Unrealistic pay increases will destroy jobs. I hope that will not be forgotten by all involved in pay bargaining during the coming months in the public and private sectors.
Having referred to that link, it is right to refer to unemployment, which the right hon. Member for Sparkbrook mentioned. I saw his comments when the White Paper was published. He criticised the assumption of 2·85 million unemployed which, as he should know, is used to calculate the social security programme. The right hon. Gentleman knows that no Government, including those in which he served, have forecast a level of unemployment. However, a figure is needed to construct the plans for social security, so the convention is adopted of assuming for the forward years the unemployment level of the current year. That procedure is not invariably adopted, but broadly speaking——
Mr. Hattersley rose——
Mr. Hayhoe: It was certainly adopted for five years ahead in the last White Paper produced by the last Labour Government. There have been minuscule changes away from that procedure, but, broadly speaking, that convention has been followed. It is no more than a convention. The actual level of unemployment will, of course, depend on a mass of factors at home and abroad, all of which affect the economy and, hence, the unemployment levels. I make it clear that the Government are not forecasting 2·85 million unemployed to 1986–87.
In 1984–85 we are planning, as the White Paper makes clear, to spend about £2·1 billion on special employment and training measures, which will help provide people with the training needed for jobs as well as help those hardest hit by the recession and its aftermath. As my right hon. and learned Friend the Chief Secretary said earlier, we must look to more fundamental improvements in the structure of the economy to reduce the level of unemployment in the longer term. We need to create real jobs in profitable industries. They are the only jobs that will be of lasting benefit to the economy. That has meant maintaining sound financial policies, including containing public expenditure.
Creating the conditions for sustainable growth and employment does not, of course, preclude direct measures, and the Government have, for example, done much to help small businesses because small firms are indispensable to the creation of jobs and wealth in the
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economy. In giving direct help, we have switched industrial support away from subsidising loss-makers and towards encouraging the industries of tomorrow.
We plan to spend £280 million next year supporting innovation and the application of new technology. This compares with less than £40 million—it is seven times as great in cash terms — spent by the Labour Government in their last year in office. Projects such as the expansion of National Semiconductors at its plant at Greenock means that "Silicon Glen" is becoming a reality, and that is good for Scotland and the United Kingdom.
There has been a lot of other good news in the last few days. The Secretary of State for Trade and Industry has announced launch aid for the British Aerospace Airbus project; we have had the United States Army order for aircraft from Shorts in Belfast; and the Prime Minister was talking at Question Time today of a number of investment projects in Wales. All this is extremely good news.
I suppose that the same can be said of the return of the right hon. Member for Chesterfield, although, as I looked on the faces of Labour Members, I was not sure that the welcome was quite so wholehearted on the Opposition Benches as it was on the Conservative Benches.
The right hon. Member for Chesterfield treated us—I mean that literally—to a vintage rhetorical performance. His campaigning zeal, as he came to us direct from the hustings, was clear for all to see, and his message, "Never forget the people," will, I hope, be echoed and understood by hon. Members in all parts of the House. It was important that he should refer to the very roots from which we in Parliament draw our democratic power.
However, when the right hon. Gentleman went on, as the detailed proposals flowed from his experience in that by-election, to say that he had now decided that the way out of our difficulties was an extension of the public sector—more nationalisation—one had to wonder with whom he was in touch. Increased public services, apparently regardless of whether they could be afforded, and the imposition of exchange control; and no doubt he complains that the exchange rate is too high and should be lower so as to achieve a better competitive position. He believes in clobbering the rich and doing what the trade union bosses tell him to do.
Mr. Stuart Bell rose——
Mr. Hayhoe: The hon. Gentleman has not been here all day, whereas the right hon. Member for Chesterfield has.
All the plans of the right hon. Member for Chesterfield represented precisely what his colleagues and he were doing at the time of the 1974 Labour Government. Where did that land them? It landed them after a couple of years right in the arms of the IMF. Yet there came not a word from the right hon. Gentleman about the 1976 economic crisis. Surely he has not forgotten living through those troubled days when he shared—presumably he shared—collective responsibility for all the decisions that were then taken. After all, he stayed in the Cabinet and did not resign.
Mr. Bell: What was the exchange rate of the dollar in relation to the pound in 1976 and what is it today?
Mr. Peter Tapsell: $1·54.
Mr. Hayhoe: I think that it was not far off being within the range of 10 per cent. I do not carry those figures in my

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head. No doubt the hon. Gentleman does. For Ministers who were involved at that time and who went through the searing experience of having followed policies which led them into the arms of the IMF, such figures should be indelibly marked on their consciences and minds, whereas it is not in the same way memorable to my hon. Friends and me.
Mr. Tony Favell: Does the Minister recall that in 1976 the then Chancellor of the Exchequer went on television to warn the nation that, if the IMF did not come up with the goods, there would be rioting in the streets, which would have been similar to the recent Liverpool disturbances?
Mr. Hayhoe: I sincerely hope that there will be no more rioting on the streets of Liverpool and that enough members of the city council will adopt a responsible attitude with regard to votes on the city budget.
The right hon. Member for Chesterfield accused the Government of imposing taxation through the back door by means of energy prices. It would not be very kind to remind the right hon. Gentleman of the principles that he set out in 1978 when he was the Secretary of State for Energy, and when the right hon. Member for Sparkbrook was Secretary of State for Prices and Consumer Protection. However, the right hon. Member for Chesterfield said in the 1978 Green Paper on energy:
"The principle that prices should reflect the costs of supply on a continuing basis while providing an adequate return on capital is now firmly established … the relevant cost is the cost incurred or saved in expanding or contracting supplies in the present or in the future, rather than an average of past costs."
The prices, the rate of return and the EFLs are set broadly on that principle for the energy industry and other nationalised industries. It is absurd to suggest that something has gone wrong if a nationalised industry makes a profit. I know that nationalised industries are often incapable of making profits, but when they do so it is right for a reasonable return to be achieved. By those standards, based on comparisons between the public and private sectors, profits in gas and electricity are, if anything, on the low side. The private sector has been making profits equivalent to a 5 per cent. real return on investments, and the British Gas Corporation is making about 4 per cent. and the electricity industry about 2 per cent. profit. No reasonable person could argue that that is backdoor taxation. Although the Government will be giving careful consideration to the points in the Select Committee's report, I hope that there will be a robust response to some of the report's suggestions.
Opposition Members who refer to electricity prices being so high—when we know that domestic electricity prices are going up by only 2 per cent. for the first time in two years, compared with a 2 per cent. rise every six weeks when the Labour Government were in office—should keep a discreet silence.
The hon. Member for Hodge Hill and many of my hon. Friends referred to the need for more capital expenditure, especially on construction. My right hon. and learned Friend the Chief Secretary referred to that in his opening speech. I am happy to confirm that we are always ready to encourage worthwhile capital projects.
The word "worthwhile" is important. A sane person would not suggest that we should undertake capital projects irrespective of their merit just to keep up the figures for capital spending. There is no right overall level
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of spending, which is why we have no overall target. The essential prerequisite is that the total for replacement, improvement and new investment should be genuinely needed, earn an adequate return and be appropriate to the public sector. We shall be happy to consider any project on its merits against those general criteria.
It is worth drawing attention again to table 1.13 of the White Paper, which has been generally welcomed on both sides of the House. It shows that public sector capital spending has not shown the downward trend that so many presumed, but has remained roughly level for a considerable span of years.
Mr. Wainwright: Will the Minister be a little more precise as to what he means by "worthwhile"? Does the Minister regard it as worth while to tackle now the problem of 1·5 million system-built dwellings, before they become irreparable?
Mr. Hayhoe: I am sure that my right hon. Friend the Secretary of State for the Environment, who has made statements on some aspects of the problem, will have it closely in mind. As the hon. Gentleman knows, a regime of improvement grants has been available, which comes to an end in March this year. It was instituted to give a substantial boost to the construction industry, and I think that it has done a great deal to restore the fabric of much housing.
We are often accused by a number of Opposition Members of wasting North sea oil. One hears that charge from time to time, but the benefits of North sea oil to the balance of payments have helped us to transform the nation's overseas balance sheet in the past five years. In 1976—[Interruption.] Opposition Members may laugh, but when the Labour Government were in office, overseas borrowing, which they incurred when they had to go to the IMF in 1976, had risen to a level roughly equivalent to cancelling out all the overseas assets owned by this country in every part of the world. Since then, as a nation, we have added to our overseas assets to a point where at the end of 1982 we had net assets of over £40 billion. There has been a £30 billion net improvement since the end of 1978. Since mid-1979, official foreign currency debt——
Government borrowing abroad—has been reduced. We have reduced the debts incurred by our predecessors from $22 billion to a figure approaching $12 billion, the lowest figure since the war in relation to overseas trade.
The benefits of those improvements are spread among millions of people who have investments in insurance companies and pension funds. No doubt the National Coal Board pension fund is benefiting. That will provide a continuing benefit to the nation in overseas earnings after the value of North sea production has begun to decline. Therefore, that valuable asset, far from being wasted, is being put to good use and, with proper management, will be to the continuing benefit of future generations.
My right hon. and learned. Friend the Chief Secretary posed some simple though searching questions to the right hon. Member for Sparkbrook. I listened carefully to the right hon. Gentleman's speech because I wanted to hear how he proposed to remedy the deficiencies of the Opposition's policies that he had so clearly perceived in the heat of his bid for the leadership of the Labour party in the summer and early autumn of last year. At that time he wrote:

823
"The idea of 'borrowing to expand' proved crucially unpopular. The British people—not being stupid—realised that the whole strategy lacked two essential ingredients: a coherent plan for investment and a scheme to combat inflation."
We would all say amen to that, except perhaps the new right hon. Member for Chesterfield, and some of his friends. However, we are still waiting for coherent answers from the right hon. Member for Sparkbrook to his own questions about Britain's real problems. The omens are not encouraging. Anyone who continues to think, as he does, that they can increase Government borrowing and reduce interest rates at the same time will not convince the British people now, any more than the right hon. Gentleman and his colleagues did at the general election. Whereas the Government are planning for stability in public expenditure, the Labour party stands for instability. Whereas the Government want to keep public spending steady in real terms, Labour, according to its election manifesto, wants to increase it by £20 billion.
Whereas inflation has been brought under control and should continue on its downward path, the economic policies of the Labour party would send it soaring again. I ask the House decisively to reject the amendment.
Question put, That the amendment be made:—
The House divided: Ayes 199, Noes 301.

Division No. 183]

[10.00 pm

AYES

Adams, Allen (Paisley N)

Cowans, Harry

Alton, David

Cox, Thomas (Tooting)

Anderson, Donald

Craigen, J. M.

Archer, Rt Hon Peter

Crowther, Stan

Ashdown, Paddy

Cunliffe, Lawrence

Ashley, Rt Hon Jack

Cunningham, Dr John

Ashton, Joe

Dalyell, Tam

Atkinson, N. (Tottenham)

Davies, Rt Hon Denzil (L'lli)

Bagier, Gordon A. T.

Davies, Ronald (Caerphilly)

Banks, Tony (Newham NW)

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

Barnett, Guy

Deakins, Eric

Beckett, Mrs Margaret

Dewar, Donald

Beith, A. J.

Dixon, Donald

Bell, Stuart

Dormand, Jack

Benn Rt. Hon. Tony

Douglas, Dick

Bermingham, Gerald

Dubs, Alfred

Bidwell, Sydney

Duffy, A. E. P.

Blair, Anthony

Dunwoody, Hon Mrs G.

Boothroyd, Miss Betty

Eadie, Alex

Boyes, Roland

Eastham, Ken

Bray, Dr Jeremy

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

Brown, Hugh D. (Provan)

Ellis, Raymond

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

Evans, John (St. Helens N)

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

Fatchett, Derek

Brown, Ron (E'burgh, Leith)

Faulds, Andrew

Bruce, Malcolm

Field, Frank (Birkenhead)

Buchan, Norman

Fields, T. (L'pool Broad Gn)

Caborn, Richard

Fisher, Mark

Callaghan, Jim (Heyw'd & M)

Flannery, Martin

Campbell, Ian

Foot, Rt Hon Michael

Campbell-Savours, Dale

Forrester, John

Canavan, Dennis

Foster, Derek

Carlile, Alexander (Montg'y)

Foulkes, George

Carter-Jones, Lewis

Fraser, J. (Norwood)

Cartwright, John

Freeson, Rt Hon Reginald

Clark, Dr David (S Shields)

Freud, Clement

Clarke, Thomas

Garrett, W. E.

Clay, Robert

George, Bruce

Cocks, Rt Hon M. (Bristol S.)

Gilbert, Rt Hon Dr John

Cohen, Harry

Golding, John

Coleman, Donald

Gould, Bryan

Concannon, Rt Hon J. D.

Gourlay, Harry

Cook, Frank (Stockton North)

Hamilton, W. W. (Central Fife)

Corbett, Robin

Hardy, Peter

Corbyn, Jeremy

Harman, Ms Harriet

824

Harrison, Rt Hon Walter

Parry, Robert

Hattersley, Rt Hon Roy

Patchett, Terry

Healey, Rt Hon Denis

Pavitt, Laurie

Heffer, Eric S.

Pendry, Tom

Hogg, N. (C'nauld & Kilsyth)

Pike, Peter

Holland, Stuart (Vauxhall)

Powell, Raymond (Ogmore)

Home Robertson, John

Prescott, John

Howell, Rt Hon D. (S'heath)

Radice, Giles

Howells, Geraint

Randall, Stuart

Hughes, Dr. Mark (Durham)

Redmond, M.

Hughes, Robert (Aberdeen N)

Rees, Rt Hon M. (Leeds S)

Hughes, Roy (Newport East)

Richardson, Ms Jo

Hughes, Sean (Knowsley S)

Roberts, Allan (Bootle)

Jenkins, Rt Hon Roy (Hillh'd)

Roberts, Ernest (Hackney N)

John, Brynmor

Robertson, George

Jones, Barry (Alyn & Deeside)

Robinson, G. (Coventry NW)

Kennedy, Charles

Ross, Ernest (Dundee W)

Kilroy-Silk, Robert

Rowlands, Ted

Kirkwood, Archibald

Sedgemore, Brian

Lambie, David

Shore, Rt Hon Peter

Lamond, James

Silkin, Rt Hon J.

Leadbitter, Ted

Skinner, Dennis

Leighton, Ronald

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

Lewis, Ron (Carlisle)

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

Lloyd, Tony (Stretford)

Snape, Peter

Lofthouse, Geoffrey

Soley, Clive

Loyden, Edward

Spearing, Nigel

McCartney, Hugh

Steel, Rt Hon David

McDonald, Dr Oonagh

Stewart, Rt Hon D. (W Isles)

McGuire, Michael

Stott, Roger

McKay, Allen (Penistone)

Strang, Gavin

McKelvey, William

Straw, Jack

Mackenzie, Rt Hon Gregor

Taylor, Rt Hon John David

Maclennan, Robert

Thomas, Dafydd (Merioneth)

McNamara, Kevin

Thomas, Dr R. (Carmarthen)

McTaggart, Robert

Thompson, J. (Wansbeck)

McWilliam, John

Thome, Stan (Preston)

Madden, Max

Tinn, James

Marek, Dr John

Torney, Tom

Marshall, David (Shettleston)

Wainwright, R.

Martin, Michael

Wallace, James

Mason, Rt Hon Roy

Wardell, Gareth (Gower)

Maxton, John

Wareing, Robert

Maynard, Miss Joan

Weetch, Ken

Meacher, Michael

Welsh, Michael

Meadowcroft, Michael

Wigley, Dafydd

Michie, William

Williams, Rt Hon A.

Mikardo, Ian

Wilson, Gordon

Millan, Rt Hon Bruce

Winnick, David

Miller, Dr M. S. (E Kilbride)

Woodall, Alec

Morris, Rt Hon A. (W'shawe)

Wrigglesworth, Ian

Morris, Rt Hon J. (Aberavon)

Young, David (Bolton SE)

Nellist, David

Oakes, Rt Hon Gordon

Tellers for the Ayes:

O'Brien, William

Mr. James Hamilton and Mr. Frank Haynes.

O'Neill, Martin

Orme, Rt Hon Stanley

NOES

Adley, Robert

Berry, Sir Anthony

Aitken, Jonathan

Bevan, David Gilroy

Alison, Rt Hon Michael

Blaker, Rt Hon Sir Peter

Amess, David

Bonsor, Sir Nicholas

Ancram, Michael

Boscawen, Hon Robert

Arnold, Tom

Bottomley, Peter

Ashby, David

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

Aspinwall, Jack

Bowden, Gerald (Dulwich)

Atkins, Rt Hon Sir H.

Boyson, Dr Rhodes

Atkins, Robert (South Ribble)

Brandon-Bravo, Martin

Atkinson, David (B'm'th E)

Bright, Graham

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

Brinton, Tim

Baker, Nicholas (N Dorset)

Brittan, Rt Hon Leon

Baldry, Anthony

Brooke, Hon Peter

Banks, Robert (Harrogate)

Brown, M. (Brigg & Cl'thpes)

Batiste, Spencer

Bruinvels, Peter

Beaumont-Dark, Anthony

Bryan, Sir Paul

Bellingham, Henry

Buchanan-Smith, Rt Hon A.

Bendall, Vivian

Buck, Sir Antony

Bennett, Sir Frederic (T'bay)

Budgen, Nick

Benyon, William

Bulmer, Esmond

825

Burt, Alistair

Hordern, Peter

Butcher, John

Howard, Michael

Butler, Hon Adam

Howarth, Gerald (Cannock)

Butterfill, John

Howell, Rt Hon D. (G'ldford)

Carlisle, John (N Luton)

Hubbard-Miles, Peter

Carlisle, Kenneth (Lincoln)

Hurd, Rt Hon Douglas

Carttiss, Michael

Irving, Charles

Chalker, Mrs Lynda

Jackson, Robert

Chapman, Sydney

Jenkin, Rt Hon Patrick

Chope, Christopher

Jones, Robert (W Herts)

Churchill, W. S.

Jopling, Rt Hon Michael

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

Kershaw, Sir Anthony

Clark, Dr Michael (Rochford)

King, Rt Hon Tom

Clarke, Rt Hon K. (Rushcliffe)

Knight, Gregory (Derby N)

Clegg, Sir Walter

Knight, Mrs Jill (Edgbaston)

Cockeram, Eric

Knowles, Michael

Colvin, Michael

Knox, David

Conway, Derek

Lamont, Norman

Coombs, Simon

Lang, Ian

Cope, John

Lawrence, Ivan

Cormack, Patrick

Lee, John (Pendle)

Corrie, John

Lennox-Boyd, Hon Mark

Couchman, James

Lester, Jim

Cranborne, Viscount

Lewis, Sir Kenneth (Stamf'd)

Crouch, David

Lightbown, David

Dickens, Geoffrey

Lilley, Peter

Dorrell, Stephen

Lloyd, Ian (Havant)

Douglas-Hamilton, Lord J.

Lloyd, Peter, (Fareham)

Dover, Den

Lord, Michael

du Cann, Rt Hon Edward

Luce, Richard

Dunn, Robert

Lyell, Nicholas

Durant, Tony

McCrindle, Robert

Dykes, Hugh

McCurley, Mrs Anna

Edwards, Rt Hon N. (P'broke)

Macfarlane, Neil

Eggar, Tim

MacKay, Andrew (Berkshire)

Eyre, Sir Reginald

MacKay, John (Argyll & Bute)

Fairbairn, Nicholas

Maclean, David John.

Fallon, Michael

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

Favell, Anthony

Major, John

Fenner, Mrs Peggy

Malins, Humfrey

Finsberg, Sir Geoffrey

Malone, Gerald

Fletcher, Alexander

Maples, John

Fookes, Miss Janet

Marland, Paul

Forman, Nigel

Marshall, Michael (Arundel)

Forsyth, Michael (Stirling)

Mather, Carol

Forth, Eric

Maude, Hon Francis

Fowler, Rt Hon Norman

Mawhinney, Dr Brian

Fox, Marcus

Maxwell-Hyslop, Robin

Franks, Cecil

Mayhew, Sir Patrick

Fraser, Peter (Angus East)

Mellor, David

Freeman, Roger

Merchant, Piers

Fry, Peter

Meyer, Sir Anthony

Gale, Roger

Mills, lain (Meriden)

Garel-Jones, Tristan

Mills, Sir Peter (West Devon)

Glyn, Dr Alan

Miscampbell, Norman

Goodhart, Sir Philip

Mitchell, David (NW Hants)

Goodlad, Alastair

Moate, Roger

Gorst, John

Monro, Sir Hector

Gower, Sir Raymond

Montgomery, Fergus

Grant, Sir Anthony

Moore, John

Greenway, Harry

Morrison, Hon C. (Devizes)

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

Moynihan, Hon C.

Grist, Ian

Mudd, David

Ground, Patrick

Murphy, Christopher

Grylls, Michael

Neale, Gerrard

Hamilton, Hon A. (Epsom)

Needham, Richard

Hampson, Dr Keith

Nelson, Anthony

Hannam, John

Neubert, Michael

Hargreaves, Kenneth

Newton, Tony

Harris, David

Nicholls, Patrick

Hawkins, Sir Paul (SW N'folk)

Normanton, Tom

Hayhoe, Barney

Oppenheim, Philip

Hayward, Robert

Oppenheim, Rt Hon Mrs S.

Heddle, John

Osborn, Sir John

Henderson, Barry

Page, John (Harrow W)

Heseltine, Rt Hon Michael

Page, Richard (Herts SW)

Hicks, Robert

Parkinson, Rt Hon Cecil

Higgins, Rt Hon Terence L.

Parris, Matthew

Holland, Sir Philip (Gedling)

Patten, Christopher (Bath)

826

Patten, John (Oxford)

Stokes, John

Pawsey, James

Stradling Thomas, J.

Peacock, Mrs Elizabeth

Sumberg, David

Pink, R. Bonner

Tapsell, Peter

Pollock, Alexander

Taylor, John (Solihull)

Porter, Barry

Taylor, Teddy (S'end E)

Powell, William (Corby)

Tebbit, Rt Hon Norman

Powley, John

Temple-Morris, Peter

Prentice, Rt Hon Reg

Terlezki, Stefan

Proctor, K. Harvey

Thomas, Rt Hon Peter

Raffan, Keith

Thompson, Donald (Calder V)

Rathbone, Tim

Thompson, Patrick (N'ich N)

Rees, Rt Hon Peter (Dover)

Thornton, Malcolm

Renton, Tim

Thurnham, Peter

Rhodes James, Robert

Townend, John (Bridlington)

Rhys Williams, Sir Brandon

Townsend, Cyril D. (B'heath)

Ridley, Rt Hon Nicholas

Tracey, Richard

Ridsdale, Sir Julian

Trippier, David

Rifkind, Malcolm

Trotter, Neville

Roberts, Wyn (Conwy)

Twinn, Dr Ian

Robinson, Mark (N'port W)

van Straubenzee, Sir W.

Roe, Mrs Marion

Vaughan, Sir Gerard

Rossi, Sir Hugh

Viggers, Peter

Rost, Peter

Waddington, David

Rowe, Andrew

Wakeham, Rt Hon John

Rumbold, Mrs Angela

Waldegrave, Hon William

Ryder, Richard

Walden, George

Sackville, Hon Thomas

Walker, Bill (T'side N)

Sainsbury, Hon Timothy

Wall, Sir Patrick

St. John-Stevas, Rt Hon N.

Waller, Gary

Sayeed, Jonathan

Walters, Dennis

Scott, Nicholas

Ward, John

Shaw, Giles (Pudsey)

Wardle, C. (Bexhill)

Shaw, Sir Michael (Scarb')

Warren, Kenneth

Shelton, William (Streatham)

Watson, John

Shepherd, Colin (Hereford)

Watts, John

Shepherd, Richard (Aldridge)

Wells, Bowen (Hertford)

Shersby, Michael

Wells, John (Maidstone)

Silvester, Fred

Wheeler, John

Sims, Roger

Whitfield, John

Smith, Sir Dudley (Warwick)

Whitney, Raymond

Smith, Tim (Beaconsfield)

Wilkinson, John

Soames, Hon Nicholas

Wolfson, Mark

Speed, Keith

Wood, Timothy

Speller, Tony

Woodcock, Michael

Spicer, Michael (S Worcs)

Yeo, Tim

Squire, Robin

Young, Sir George (Acton)

Steen, Anthony

Younger, Rt Hon George

Stevens, Lewis (Nuneaton)

Stevens, Martin (Fulham)

Tellers for the Noes:

Stewart, Allan (Eastwood)

Mr. David Hunt and Mr. Douglas Hogg.

Stewart, Andrew (Sherwood)

Stewart, Ian (N Hertf'dshire)

Question accordingly negatived.
Main Question put and agreed to.
Resolved,
That this House takes note of the White Paper on the Government's Expenditure Plans 1984–85 to 1986–87 (Cmnd. 9143).

Public Expenditure

  MATRIMONIAL AND FAMILY PROCEEDINGS BILL [LORDS] (COMMITTAL)
  Ordered,
  That the Order of the House [15th February] relating to Matrimonial and Family Proceedings Bill [Lords] (Committal) be amended in line 6 by leaving out '28' and inserting '40'.—[Mr. Donald Thompson.]

  MEMBERS' INTERESTS
  Ordered,
  That Mr. Michael McNair-Wilson be discharged from the Select Committee on Members' Interests and Mr. Paddy Ashdown and Mr. Patrick McNair-Wilson be added to the Committee.—[Mr. Donald Thompson.]

Elsted Primary School
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Donald Thompson.]
10.13 pm
Mr. Anthony Nelson: I am delighted to have this opportunity of raising an issue which has aroused considerable feeling in my constituency and which has implications for villages in rural areas elsewhere, namely, the proposed closure of Elsted village school.
There has been a school in Elsted since 1820. For over 160 years Elsted primary school has provided generations of pupils with a solid foundation in basic numeracy and literacy as well as a happy environment in which to learn and develop. It was, therefore, a thunderbolt for this village and for the surrounding community to learn that their school was threatened with closure, not for academic reasons, nor because of inordinate cost, but so that it could be merged with a smaller school in the nearby village of Harting. On 24 February the West Sussex county council passed a resolution to close not only Elsted school but the Cocking primary school—another village school in my constituency, with only 17 pupils.
Under the Education Act 1980, proposals for school closures must be submitted to the Secretary of State. I was anxious to take the first opportunity to acquaint my right hon. and hon. Friends with my strong objections to the closure of Elsted school and my conviction that there are special considerations that justify a rejection of the local education authority's proposal.
I wish to tell my hon. Friend the Minister a little about Elsted school, and also a little about the village—which is far from the madding crowd and set in a most delightful part of my rural constituency. I had the pleasure of visiting Elsted school only last weekend with governors and parents. The school presently has 27 children on the roll, although the number will rise to 32 at the beginning of the next academic year and will continue to rise over the next few years.
The school has always provided a high standard of education and has attracted pupils from surrounding villages such as Treyford, Didling, Trotton, Minstead, Steadham and Hurst as well as South and East Harting. There has always been strong parental involvement in the school. Equipment purchased by the parent-teacher association is too numerous to mention in full but includes the BBC computer, part of which was financed by funds raised by the pupils in a cross-country run. The equipment includes a coloured television, a tape recorder and various sports equipment. A major item that has been provided by parents is a swimming pool, which is also used after school hours and during holidays.
The school is situated in the centre of Elsted village. It has an excellent headmistress in Mrs. Anne Day. The school is a focal point of local community activities and a significant patron of the village hall. The parents reflect a cross-section of the community, including agricultural workers, one-parent families and professional groups, all of whom appreciate that a small mixed ability class can create a good social, emotional and educational atmosphere for children.
The headmaster of Midhurst intermediate school, which many of the pupils subsequently attend, is quoted as saying:
"In our experience over a number of years, we would rate Elsted School as a first class example of what a village primary
828
school should be … Well taught groundwork has enabled Elsted pupils to take the transition to this school in their stride. We feel that it would be a great pity to close a school that we recognise as a fine example of its kind."
The same sentiments are shared by county councillor Dr. Derek Stephenson, who made an impassioned and compelling speech when the subject was debated at the West Sussex county council meeting. That view is shared also by the action committee to save Elsted school, representatives of which came to the House today to present me with a petition. It is shared also by the school governors, by the Sussex rural community council and by the parish council of Elsted with Treyford and Didling. How could the closure of such a school be contemplated?
Apparently, advice was received that a combined school at nearby Harting would achieve economies of scale. I think we have heard that before. Coming from one of the low-spending authorities which has consistently followed Government strictures on local government expenditure, I am the first to appreciate that all potential areas of saving money must be explored. However, the closure of Elsted school will make neither financial nor educational sense.
New facts have come to light to support this view and I ask my hon. Friend to take full account of them. First, on the financial front, a merger will prove more, rather than less, costly per pupil. The council's estimate of the running costs of Elsted school is some £35,688 a year, but this is based on amortising building maintenance over a relatively short period. In fact, it has been estimated that if the cost is spread over 10 years and the increase in intake in September is taken into account the running cost per pupil will work out at £1,062 per annum. This is less than the average running cost of small rural schools in West Sussex, which is currently about £1,200 per pupil. It may also be significantly less than the cost per pupil at the new merged Harting school, because, in a survey conducted by the action committee against the closure of Elsted school, all but one of the parents with children currently at Elsted school indicated their intention of sending their children to schools other than Harting if Elsted is closed.
While my hon. Friend may feel that a survey collected by such a group is somewhat biased, even allowing for a measure of error, I still feel that it is a very significant factor, which has not been taken into account, that, with freedom of parental choice, not all the pupils of Elsted school will necessarily be sent freely by their parents to the new merged school in Harting. This must necessarily affect very substantially and directly the average cost of education per pupil at such a new school. While that may not undermine the feasibility or continued viability of any school based at Harting, I believe that this comparative exercise justifies the continued existence of Elsted school.
Furthermore, no capital receipts will accrue to the education authority or, as far as I am aware, to the Church through the disposal of the present Elsted school building. This is because the school was originally provided in trust for the education of local villagers, and the property will revert to the trust and not the local education authority. There is no crock of gold, therefore, for the local authority through the disposal of the capital asset.
I would add and urge my hon. Friend to consider as well that my understanding is that in the course of the last year not insignificant sums of money have been spent by the local education authority on refurbishing Elsted school and improving the oil heating facilities there, presumably at

829
great cost to local ratepayers and taxpayers. It does seem rather extraordinary that within such a short space of time, a matter of months after spending such capital moneys, the local education authority and the county council should recommend to the Secretary of State that that money be effectively written off, the school closed and the children moved elsewhere.
Secondly, much has been made of the argument that the population of Harting is larger than that of Elsted and that this justifies closing the latter school and merging it with the former. However, a significant number of children in the Harting catchment area, especially in the north and the east, go to schools other than Harting, notably Rogate and Elsted. This is the parents' choice, and I had always understood that parental choice was a criterion which the Government upheld.
Thirdly, it has become increasingly clear that the motive underlying proposals for the closure of Elsted school and its merger with Harting is not so much educational or financial efficiency as a false assumption that Elsted school enjoys some middle-class snob appeal. The governors of Harting school, in a document setting out their views, said:
"Regrettably, it has to be stated that there has long been a social cachet attached to attending Elsted school … A merger would end this situation once and for all."
Indeed, in a letter to me the rector of Harting and, I believe, chairman of the governors of Harting school, the Reverend K. L. Masters, said:
"One of the divisions that has festered in this local community has been the separation of children into attending either Elsted or Harting school. That is a problem of which I was made aware even before being instituted as Rector. It has been aggravated over a long time by the efforts of Elsted School parents to persuade any new middle class families in Hafting to send their children to Elsted School without even looking at Harting School. To merge the Schools will be an important step towards overcoming that division."
I have a high regard for the rector of Harting. Not for a moment do I question his sincerity or that of his fellow governors. He, understandably and rightly, is concerned to do what is best for his parish, best for the children and best for the parents. However, social engineering is a less than compelling reason for closing a long-established school. Since when were academic excellence and positive parental choice justifications for closure?
I fully appreciate the views of Harting parish council and the governors and parents of Harting school, most of whom support the idea of a merged school. They believe that it would end the uncertainty over the future of the two schools and perhaps lead to a higher average standard of education for the children of both communities. I share those objectives, but I resent the suggestion — presumably promulgated by the local education authority—that one school must close if the other is to survive.
That view pits community against community in a way that might be convenient for the education authority, because it wants the closure proposal to be supported, but it is debilitating for the people affected, who feel threatened and protective towards their community school. The right course should be to preserve both schools, to recognise the wishes and choices of parents in all the parishes affected, to devote the resources necessary to provide comparable and high standards of education, and to preserve the identity and community spirit of rural villages.
I recognise that it is not economic to keep some schools open, especially at a time of falling rolls. My hon. Friend
830
will be the first to remind me of that. Nevertheless, he will recall the pledge that our party made at the general election, that
"the Government is concerned to ensure that small village schools are not closed, wherever such closures can be avoided."
Elsted is just such a case. I would not claim the same for Cocking primary school, whose closure was recommended in the same council resolution. Many councillors recognise this, even though they voted on a composite motion at the county council meeting to close those schools. It is significant that, despite the clear initial view in favour of the closure by the education subcommittee, when the motion came before the full county council the vote was much narrower than had been expected. It was 37 to 28. Considering that county councillors come from all over the county, including areas less familiar with the merits of Elsted school, that was a relatively fine vote and would justify the Secretary of State in taking on board the real concerns that I and others have expressed.
In the light of the further information that I have provided, I hope that my hon. Friend will reprieve the school permanently and not refer the decision to West Sussex county council for further consideration. Mergers have not always achieved the financial or educational results intended. In this case, I am persuaded that the best course is to keep both schools open and distinct.
My hon. Friend is a man of judgment and sensitivity. I have every confidence that he will take on board the points that I have made. If there is one testimony above others which should remove any remaining doubt in my hon. Friend's minds it is that of my constituent Mr. W. F. Perret, whose spastic daughter Sonia passed through Elsted school with flying colours. Mr. Ferret writes:
"I have been informed that Elsted school might be closed for good. My wife died in September, and now I have to look after my daughter, who went to this school to learn as she is partially handicapped. The teachers and school helped her such a lot that she is now going to Lord Mayor Treloar's college at Alton, Hampshire, and, as you might know, this school helps youngsters to grow up in our society and environment, which has decreased a lot.
Our daughter has benefited from going to Elsted school, so why should not other youngsters be able to do the same and learn at a better school rather than grow up to be on the streets, on the dole and fighting each other? It is up to you and your partners to help out to keep one good school open. We all know that the Government is trying to cut costs, but why a small school which helps youngsters around here to grow up and learn a lot?"
The postscript to that story is that Sonia, who came to Elsted hardly able to walk, feed herself or cope in any way, is now, after seven years of constant help and encouragement from staff and pupils, an articulate girl who can read, write and compute well above average standard. At the end of tern she conducted the leavers' service in front of a full church congregation. No words of mine can match the moving experience of Mr. Ferret and his daughter Sonia. I implore my hon. Friend to save Elsted school.
10.31 pm
The Under-Secretary of State for Education and Science (Mr. Bob Dunn): I congratulate my hon. Friend the Member for Chichester (Mr. Nelson) on obtaining the Adjournment debate on the possible closure of Elsted school. I am pleased to be able to reply to him. He has spoken tonight about a subject in which many hon. Members on both sides of the House have taken a close

831
interest recently and, in doing so, has shown again the keen and diligent way in which he represents his constituents' interests.
My hon. Friend has referred to the possible closure of Elsted primary school. I shall come to that in a moment, but there are a number of important educational and financial considerations which underlie the closure of any school, rural or urban, which need to be considered. I shall try, in the time available, to discuss those, too. Finally, there are particular considerations that apply to village schools, and I would like to say something about them.
With regard to Elsted primary school, I was careful to talk of its "possible closure". There are detailed procedures enshrined in law that have to be observed before any school can be closed, but, in the case of Elsted school, these procedures have yet to be set in train. Before going on to discuss the underlying considerations I mentioned earlier, perhaps I might outline the statutory procedures that are set out in section 12 of the Education Act 1980. When a local education authority decides that it wishes to cease to maintain a school—whether it be a county school or a voluntary one — it must publish locally notice of what it is proposing and submit the proposals to my right hon. Friend the Secretary of State. There then follows a two-month period when objections may be submitted to the local education authority. Those who have a statutory right to object are defined in the Act as 10 or more local government electors, the governors of any voluntary school and any local education authority that might be affected by the proposals.
If there are objections, the authority must send them to my right hon. Friend within one month of the expiry of the notices with its observations and my right hon. Friend must then consider the proposals on their merits and make his decision accordingly. If there are no objections, the authority may, in the case of county schools, determine to implement the proposals without reference to my right hon. Friend unless he has informed the authority that he wishes to decide the proposals irrespective of whether objections have been made. This power to call in proposals was always intended to be used sparingly.
In the case of voluntary schools — Elsted is a voluntary school—any proposals to cease to maintain a school automatically require the approval of my right hon. Friend, whether or not there have been objections. I have noted all that my hon. Friend the Member for Chichester has said about the Elsted school, but it is not possible for me to make any comment about its future at the moment. Proposals under section 12 for its closure have yet to be published, although I understand that the West Sussex education authority intends to do so before long. I trust that my hon. Friend will have taken careful note of the Secretary of State's role—it is a quasi-judicial one, and I must be careful today that anything I say will not prejudice the decision which may be his to make.
Let me just say that when my right hon. Friend considers any proposals before him he has to take account of all the relevant factors. These factors include the educational and financial merits of the proposals, the statutory objections and the edcuation authority's comments upon them and his own general policies on education as set out, for instance, in circulars 2/80, 2/81 and 4/82. I might also add, as an aside, that representations are sometimes made in favour of particular school
832
closures. Surprising though this may seem at first sight, some deputations brought by hon. Members on both sides of the House support the local education authority's view that a school should be closed so that other schools can achieve the viability of pupil numbers which would result. My right hon. Friend will also take account of such representations when they are made. His decision is taken only after the most careful consideration of all the relevant issues.
Let me say a word or two here about the amalgamation or merger of schools. There is in fact no specific provision within the Education Acts to effect an amalgamation. Such an effect can and frequently is achieved, however, by proposals to cease to maintain two schools, and to establish one new school in their place. The new school will have a new legal identity, a new instrument and articles of government.
My hon. Friend the Member for Chichester referred to the decline in school population. What is frequently overlooked is that by end of the decade the size of the school population will have fallen by a quarter, and demographic changes on that scale inevitably present new challenges and problems for the education service. Furthermore, even on the highest assumptions of numbers of births, the present school population will not be reached again — if at all — before the very last years of this century. This fall in the birth rate compounds the effects of the quite separate demographic changes affecting the rural population.
It is sometimes alleged that it is Government policy to close village schools. That is not so. We believe that there are strong arguments on many fronts for taking out of use surplus places and for taking advantage of falling rolls by rationalising primary and secondary school stock. Circular 2/81 put these arguments to LEAs and emphasised my right hon. Friend's belief that they apply in urban and rural areas alike. It is for each local education authority to review its own provision in the light of its own needs and priorities and to make such statutory proposals as it judges necessary. It is then, where appropriate, for my right hon. Friend to consider such proposals on their merits.
Let me repeat that proposals for the closure of Elsted primary school have yet to be submitted by the West Sussex education authority. If and when the proposals are published and submitted to my right hon. Friend, there will be, as I said earlier, two months from the date of their publication for objectors to lodge their objections with the authority. Since Elsted is a voluntary school, the proposals will come before my right hon. Friend the Secretary of State for decision. There will, of course, be opportunties for my hon. Friend to bring deputations and for them to put their point of view. I assure him and his constituents that all their arguments will be carefully considered by my right hon. Friend, along with the other considerations that will weigh in this case, before he reaches his decision. For the present, it would not be right for me to offer any opinion or further comment on this case lest I be thought to be prejudicing any decision that my right hon. Friend may have to make.
I end, as I started, by congratulating my hon. Friend the Member for Chichester on his success in obtaining this debate and on placing on record his views about this proposal.
Question put and agreed to.
Adjourned accordingly at nineteen minutes to Eleven o'clock.

EDUCATION AND SCIENCE
  Nursery Education
  Nursery Education
  Technical Vocational Educational Initiative (Expenditure)
  Technical Vocational Educational Initiative (Expenditure)
  Heriot-Watt University Pharmacy Department
  Heriot-Watt University Pharmacy Department
  Derbyshire (Expenditure Cuts)
  Derbyshire (Expenditure Cuts)
  Youth Service and National Youth Bureau
  Youth Service and National Youth Bureau
  Students (Travel Costs)
  Students (Travel Costs)
  Truancy
  Truancy
  University Grants Committee
  University Grants Committee
  Youth Training Scheme
  Youth Training Scheme
  Microcomputers (Primary Schools)
  Microcomputers (Primary Schools)
  "Training for Jobs"
  "Training for Jobs"
  Overseas Students
  Overseas Students
  ILEA (Nursery Education)
  ILEA (Nursery Education)
  Technology Courses (Females)
  Technology Courses (Females)
  Muslim Schools
  Muslim Schools
  Examinations
  Examinations
  Unemployed Persons
  Unemployed Persons
  School Curriculum
  School Curriculum
  Inner London
  Inner London
  Ministerial Speech (Sheffield)
  Ministerial Speech (Sheffield)
  North-East London Polytechnic
  North-East London Polytechnic
  School Buildings (Expenditure)
  School Buildings (Expenditure)
  ILEA (Inspector's Report)
  ILEA (Inspector's Report)
  Assisted Places Scheme
  Assisted Places Scheme
  Teachers (Compulsory Redundancies)
  Teachers (Compulsory Redundancies)
  Peace Studies
  Peace Studies
  Young Persons (Vocational Training)
  Young Persons (Vocational Training)
  Pupils (Unit Costs)
  Pupils (Unit Costs)
  Open University
  Open University
  Ethnic Minority Language Teaching
  Ethnic Minority Language Teaching
  TVEI (Pupil-teacher Ratio)
  TVEI (Pupil-teacher Ratio)
  Science and Engineering (Females)
  Science and Engineering (Females)
  Multicultural Society (Policy)
  Multicultural Society (Policy)
  University Teachers (Scotland)
  University Teachers (Scotland)
  Spina Bifida
  Spina Bifida
  Communications Industry (Graduates)
  Communications Industry (Graduates)
  UGC (Grant Awards)
  UGC (Grant Awards)
  University Students (Statistics)
  University Students (Statistics)
  Student Travel Awards
  Student Travel Awards
  "Streamlining the Cities"
  "Streamlining the Cities"
  Sociology Graduates
  Sociology Graduates
PRIME MINISTER
  Engagements
  Engagements
  Supplementary Benefit Appeal Tribunal
  Supplementary Benefit Appeal Tribunal
  Oman (Ministerial Visit)
  Oman (Ministerial Visit)
  A Power for Good Ltd.
  A Power for Good Ltd.
  Acid Rain
  Acid Rain
  Commission on Energy and the Environment
  Commission on Energy and the Environment
HOUSE OF COMMONS
  Visitors
  Visitors
DEFENCE
  Territorial Army
  Territorial Army
  Naval Visits (Australia)
  Naval Visits (Australia)
  Voluntary Organisations (Grants)
  Voluntary Organisations (Grants)
ENVIRONMENT
  House of Commons (Works of Art)
  House of Commons (Works of Art)
SOCIAL SERVICES
  Phenylbutazone and Oxyphenbutazone
  Phenylbutazone and Oxyphenbutazone
ENERGY
  Coal Mining (South Warwickshire)
  Coal Mining (South Warwickshire)
  British Gas Corporation
  British Gas Corporation
NATIONAL FINANCE
  School Meals (Private Contractors)
  School Meals (Private Contractors)
  Investment Income
  Investment Income
  Banks (Negligence)
  Banks (Negligence)
  Discharge of Debt
  Discharge of Debt
  European Assembly
  European Assembly
  European Community (Youth Unemployment)
  European Community (Youth Unemployment)
  Court of Auditors (Recommendations)
  Court of Auditors (Recommendations)
  Investment Income Surcharge
  Investment Income Surcharge
  House of Commons (Stationery Costs)
  House of Commons (Stationery Costs)
  Beer (Tax Yield)
  Beer (Tax Yield)
  Newspapers (VAT)
  Newspapers (VAT)
  Banks (Recognition)
  Banks (Recognition)
TRADE AND INDUSTRY
  Import Tariffs
  Import Tariffs
  Clothing (West Germany)
  Clothing (West Germany)
  Trade Statistics
  Trade Statistics
  Small Firms
  Small Firms
  Correspondence
  Correspondence
  Newspapers (Support)
  Newspapers (Support)
  Manufactured Goods
  Manufactured Goods
  "Made in Britain" (Criteria)
  "Made in Britain" (Criteria)
  Motor Car Industry
  Motor Car Industry
  Brewers (Tied Houses)
  Brewers (Tied Houses)
  Trade Descriptions Act 1968
  Trade Descriptions Act 1968
  Voluntary Organisations (Grants)
  Voluntary Organisations (Grants)
  Electric Road Vehicles
  Electric Road Vehicles
  Pirate Radio Stations
  Pirate Radio Stations
  Telecommunications Licences
  Telecommunications Licences
  Steel
  Steel
SCOTLAND
  Drug Squads
  Drug Squads
  Women's Health
  Women's Health
  Rolls-Royce Ltd
  Rolls-Royce Ltd
  Crime Statistics
  Crime Statistics
  Elderly and Disabled Persons
  Elderly and Disabled Persons
  Meals on Wheels
  Meals on Wheels
  Home Helps
  Home Helps
  Disabled Persons
  Disabled Persons
  Public Expenditure
  Public Expenditure
  Voluntary Organisations (Grants)
  Voluntary Organisations (Grants)
ENVIRONMENT
  Housing (Southwark)
  Housing (Southwark)
  Housing Lists
  Housing Lists
  Environment Ministers Council
  Environment Ministers Council
  Oil Fuel (Sulphur Content)
  Oil Fuel (Sulphur Content)
  Voluntary Organisations (Grants)
  Voluntary Organisations (Grants)
  Local Government Reform
  Local Government Reform
  Newham, North-West (Representations)
  Newham, North-West (Representations)
FOREIGN AND COMMONWEALTH AFFAIRS
  El Salvador
  El Salvador
  Passports
  Passports
  International Labour Organisation Conventions
  International Labour Organisation Conventions
  Hong Kong (Refugees)
  Hong Kong (Refugees)
  Uganda
  Uganda
EEC
  Financial Arrangements
  Financial Arrangements
EMPLOYMENT
  Youth Training Scheme
  Youth Training Scheme
  Skillcentres
  Skillcentres
  National Training Qualification
  National Training Qualification
  Wages Councils
  Wages Councils
  Manufacturing (Statistics)
  Manufacturing (Statistics)
  Labour Statistics
  Labour Statistics
  Adult Training Strategy
  Adult Training Strategy
  Skill Training Courses
  Skill Training Courses
  Young Workers Scheme
  Young Workers Scheme
  Job Splitting Scheme
  Job Splitting Scheme
  Youth Unemployment
  Youth Unemployment
  Training Schemes
  Training Schemes
  Voluntary Organisations (Grants)
  Voluntary Organisations (Grants)
  Lead Industries
  Lead Industries
HOME DEPARTMENT
  Animal Research
  Animal Research
  Licensing Hours (Airports)
  Licensing Hours (Airports)
  Statutory Forms (Welsh Language)
  Statutory Forms (Welsh Language)
  Lenient Sentences (Review)
  Lenient Sentences (Review)
  Durham Prison
  Durham Prison
  Misuse of Drugs Act
  Misuse of Drugs Act
  Opium
  Opium
  Drug Addicts
  Drug Addicts
  Official Secrets Act 1911
  Official Secrets Act 1911
  Mr. Edward Coulston
  Mr. Edward Coulston
  Prison Rules (Directions)
  Prison Rules (Directions)
  Prisoners (Medical Service)
  Prisoners (Medical Service)
  Remand Centre, Risley
  Remand Centre, Risley
  Court Escort Duties
  Court Escort Duties
  Licence Applications
  Licence Applications
  Crime Statistics
  Crime Statistics
  Television Licence Evaders
  Television Licence Evaders
  Bingo
  Bingo
  Joint Police Authorities
  Joint Police Authorities
  Voluntary Organisations (Grants)
  Voluntary Organisations (Grants)
EDUCATION AND SCIENCE
  School Meals
  School Meals
  Graduates (Employment)
  Graduates (Employment)
  School Admissions (Hertfordshire)
  School Admissions (Hertfordshire)
  Burnham Further Education Committee
  Burnham Further Education Committee
  Student Demand
  Student Demand
  Students Unions
  Students Unions
  Universities (Submissions)
  Universities (Submissions)
  University Grants Committee (Report)
  University Grants Committee (Report)
  Voluntary Organisations (Grants)
  Voluntary Organisations (Grants)
  Student Loans
  Student Loans
  Adult Literacy and Basic Skills Unit
  Adult Literacy and Basic Skills Unit
AGRICULTURE, FISHERIES AND FOOD
  Common Agricultural Policy
  Common Agricultural Policy
  Whirling Disease
  Whirling Disease
  Voluntary Organisations (Grants)
  Voluntary Organisations (Grants)
  Knacker Meat
  Knacker Meat
WALES
  Voluntary Organisations (Grants)
  Voluntary Organisations (Grants)
  Kidney Patients
  Kidney Patients
TRANSPORT
  Voluntary Organisations (Grants)
  Voluntary Organisations (Grants)
  Fuel Duty Rebate
  Fuel Duty Rebate
  Bus Industry (Subsidies)
  Bus Industry (Subsidies)
  Road and Rail Services
  Road and Rail Services
  Municipal Bus Operators
  Municipal Bus Operators
  British Rail
  British Rail
  Concessionary Fares
  Concessionary Fares
  Transport Supplementary Grant
  Transport Supplementary Grant
  A19
  A19
SOCIAL SERVICES
  Young Unemployed Persons (Benefit)
  Young Unemployed Persons (Benefit)
  GCHQ, Cheltenham
  GCHQ, Cheltenham
  Patient Care (Transfer)
  Patient Care (Transfer)
  Drug Addicts
  Drug Addicts
  Orthopaedic Waiting Lists (Leeds)
  Orthopaedic Waiting Lists (Leeds)
  Childminders
  Childminders
  World Health Assembly
  World Health Assembly
  Supplementary Benefit
  Supplementary Benefit
  Housing Benefit
  Housing Benefit
  Meals on Wheels
  Meals on Wheels
  Ophthalmic Opticians
  Ophthalmic Opticians
  NHS (Hospital Facilities)
  NHS (Hospital Facilities)
  Attendance Allowance
  Attendance Allowance
  Psychiatric Services
  Psychiatric Services
  Hospital Closures
  Hospital Closures
  Community Care
  Community Care
  Spinal Cord Injuries
  Spinal Cord Injuries
  Hospital Waiting Lists
  Hospital Waiting Lists
  Welfare Benefit Information System
  Welfare Benefit Information System
  Retirement Pensioners
  Retirement Pensioners
  Pension Increases
  Pension Increases
  Voluntary Organisations (Grants)
  Voluntary Organisations (Grants)
  Non-steroidal Anti-inflammatory Drugs
  Non-steroidal Anti-inflammatory Drugs
  Griffiths Report
  Griffiths Report
  Rent and Rate Rebates
  Rent and Rate Rebates
  Black Report
  Black Report
NORTHERN IRELAND
  Roads (North Belfast)
  Roads (North Belfast)
  Royal Ulster Constabulary
  Royal Ulster Constabulary
  Foreign-owned Plants
  Foreign-owned Plants
  Economic Subvention
  Economic Subvention
  New University of Ulster
  New University of Ulster
  Ulster Polytechnic
  Ulster Polytechnic
  House Building
  House Building
  Factories (Antrim and Newtonabbey)
  Factories (Antrim and Newtonabbey)
  Agricultural Training
  Agricultural Training
  Cereals, Feeding Stuffs and Fertilisers
  Cereals, Feeding Stuffs and Fertilisers
  Cross-border Trade
  Cross-border Trade
  Domestic Energy
  Domestic Energy
  Student Travel
  Student Travel
  Student Grants
  Student Grants
  Abortion
  Abortion
  Terrorism (Young Persons)
  Terrorism (Young Persons)
  Agriculture and Forestry
  Agriculture and Forestry
  Magilligan Prison
  Magilligan Prison

Preamble
The House met at half-past two of the clock: The LORD CHANCELLOR on the Woolsack.
Prayers—Read by the Lord Bishop of Lincoln.
The Marquess of Ely (Lord Loftus)—Took the Oath.
Earl Brooke and Earl of Warwick—Sat first in Parliament after the death of his father.

Small Businesses and Form-Filling
Baroness Sharples: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government how many forms relating to small businesses were abolished between 1979 and 1983.
The Minister of State, Ministry of Agriculture, Fisheries and Food (Lord Belstead): My Lords, figures on Government forms prior to 1982 are not available, but in the year February 1982 to February 1983, 4,705 of the estimated 17,000 Government administrative forms to business and industry were reviewed. Of these, 640 were abolished and a further 658 redesigned. Many of these would have been sent to small businesses.
Baroness Sharples: My Lords, I thank my noble friend for that reply. May we hope that this trend will be accelerated? Can my husband—I apologise: can my noble friend please see that these forms are sent out not in gobbledegook but in plain English?
Lord Belstead: My Lords, I thank my noble friend for her very friendly supplementary question! I hope it will be good news to my noble friend that the VAT leaflets have won plain English awards, so I am advised, in two of the last three years; and that, as I am also advised, the new Inland Revenue income tax return has become simpler and less forbidding as a result of the reviews which have been going on. Yes, I can reply to my noble friend's other point. I do not know about the trend being accelerated, but we shall certainly press on.
Lord Avebury: My Lords, while commending the efforts of the Government in relieving the load on small businesses, does not the arithmetic of the noble Lord's Answer indicate that 16,360 forms may still be sent to these people? Do they not have an enormous amount of work to do in trying to comply with the demands of the Government, even after the efforts of the year for which he has given figures?
Lord Belstead: My Lords, with respect to the noble Lord, that does not mean 16,000-odd too many. This
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is about more than just cutting out waste. The whole thrust of our policy is to give good service and good value for money, and that is what we are trying to do.
Lord Wells-Pestell: My Lords, can the noble Lord indicate how many small businesses have gone into liquidation since 1979?
Lord Belstead: My Lords, I cannot answer the noble Lord's question in the way that he put it. I can tell the noble Lord that 20,000 more small businesses started up than went out of business between 1980 and 1982.
Lord Stoddart of Swindon: My Lords, will the noble Lord confirm that between 1979 and 1983 some 70,900 small businesses were either made bankrupt or went into liquidation, and that many of those 20,000 new businesses to which he referred were among those bankruptcies and liquidations?
Lord Belstead: My Lords, if we are going to talk about the legacy of the previous Government, I will admit to the House, quite openly and frankly, that there were very great difficulties in this country in 1979. But I have to repeat to the House that between 1980 and 1982 there was a net increase in the number of small businesses.

Common Fisheries Policy
2.40 p.m.
Baroness Elliot of Harwood: 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 aspects of the common fisheries policy have yet to be agreed.
Lord Belstead: My Lords, there are currently no major aspects of the common fisheries policy awaiting agreement in the Council of Ministers. The operation of the policy is, however, a continuing process and there will no doubt be further matters for decision at future meetings.
Baroness Elliot of Harwood: My Lords, I thank my noble friend very much for the Answer to my Question. It is encouraging that the extremely difficult problems of fishing have now reached the point at which they are being tackled very satisfactorily. It is also encouraging that our proportion of the fishing has gone up to 37 per cent. and I congratulate the Government very much on what has happened.
Lord Belstead: My Lords, I am grateful to my noble friend. In her supplementary question my noble friend mentioned a percentage. I think that the percentage is taken from the agreement that was struck when my right honourable friend the previous Minister of Agriculture was in office. My right honourable friend the Minister was, of course, negotiating on behalf of the United Kingdom at the recent meeting. I think it is fair to say that the effects of my noble friend's words have been continued in that latest agreement.
Lord John-Mackie: My Lords, at the time of the last Statement there was considerable questioning about the fact that all the inspectors had not been appointed and that the log books had not been printed. I wonder if the noble Lord can tell us whether this has now been rectified and whether the inspectors have all taken up their work. Is it not a fact that the Scottish fishermen are not too pleased with the closing of the mackerel box in the south-west of England, and that they have produced figures to suggest that this is not necessary? I wonder whether the noble Lord would like to comment on that. I think the argument is that hand-liners will be able to supply the demand, but I understand that they produce only about 3 per cent.
Lord Belstead: My Lords, so far as enforcement is concerned, the United Kingdom was instrumental in the setting up of the inspectorate. It is fair to make that claim. My right honourable friend the Minister has been pressing for the early introduction of log books. Once these two key areas are fully operational—and I have to say to the noble Lord quite openly that they are not—we expect the standards of enforcement within the Community to be very greatly improved. May I say that the Government and the Opposition agree on this. Let us get on with it as quickly as possible. We shall continue to press for it. The closing of the south-west box is a conservation and management matter which we believe is desirable. The south-west box was closed at midnight on 4th March. I think I am right in saying that this is the latest date at which it has been closed during the last five years.
Lord Boothby: My Lords, does the noble Lord realise that the fisheries agreements which have been negotiated with the countries of Western Europe are the best that we have ever had and that this is primarily due to the diplomatic skill with which they were negotiated in Brussels by Mr. Peter Walker, as Minister of Agriculture, Fisheries and Food, with staunch support from the Secretary of State for Scotland? At every stage the fishermen and their leaders were consulted and agreement was reached. Does the noble Lord not agree that his example might be followed by the Government over the wider field of industry? It proves that consensus, when it can be arrived at, pays off far better than confrontation.
Lord Belstead: My Lords, I do not in any way disagree with what the noble Lord said in the second part of his supplementary question. As to the first part, I know that Scottish Ministers, my right honourable friend and previous Ministers will be extremely grateful to the noble Lord, with his enormous experience of this subject, for the words he has spoken. But the point is not what redounds to political parties and politicians but what is beneficial for people's livelihoods. There is no question but that the agreement of last year and the new agreement which was hammered out only five or six weeks ago are for the future good of the fishing industry in this country.
Lord Cledwyn of Penrhos: My Lords, will the noble Lord agree that the setting up of an inspectorate has been the continuing objective of all political parties, and that we welcome what has been achieved? Given that it is very important for the British fishing industry
140
that the inspectorate should be at full strength as soon as possible, could the noble Lord indicate the obstacles which now stand in the way and also say when we may expect the inspectorate to be fully operational?
Lord Belstead: My Lords, most of the inspectors are now in post. It is hoped that log books and landing returns will come into force this summer. When pressed by my right honourable friend at the last Council of Fisheries Ministers on 31st January, the European Commission could not give an exact date for this, but I can say to the noble Lord, Lord Cledwyn, that the text and format for log books and landing returns have been completed and are now going out to tender for printing.

Hamilton College of Education: Sale
2.47 p.m.
Lord Taylor of Gryfe: 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 a statement on the sale of Hamilton College of Education in the light of the report of the Public Accounts Committee.
The Minister of State, Scottish Office (Lord Gray of Contin): My Lords, the Public Accounts Committee report is being carefully studied. In accordance with long-standing arrangements, the Government will respond to the committee in due course by means of a Treasury minute. It would be a breach of the undertakings given to the Public Accounts Committee by successive Governments for me to comment at this stage on the content of the report.
Lord Taylor of Gryfe: My Lords, in view of the great public concern about this particular transaction, can the Minister indicate to the House when this minute might be produced and whether it will provide an opportunity for a discussion in this House, or in another place, on the facts which have been revealed by the Public Accounts Committee? Can the Minister confirm that in the Public Accounts Committee it was established that the Chief Valuer put a value of £6 million on these properties, that they were subsequently sold for £600,000 and that the Chief Solicitor has declared in the Public Accounts Committee evidence that the properties were not adequately exposed for sale? In view of these facts, can the Minister expedite the preparation of the Government's comment?
Lord Gray of Contin: My Lords, the Government's comment, by way of a Treasury minute, will be prepared and delivered as soon as possible. I am sure that the noble Lord will appreciate that my position is such that I cannot comment on his other questions.
Lord Ross of Marnock: My Lords, surely the Minister of State will be aware that the Minister who was fairly closely connected with this matter has already commented? How does that square with the

141
Minister's own statement today that the Government cannot say anything about it? Is it not clear that a valuable public asset was disposed of to the private sector in a way which was contrary to the Government's own advice and at a price that was contrary to what could have been expected if the sale had been properly carried out? Would the Minister care to change the statement that he made to me on 1st December, of which I have a copy? The Minister cannot comment now, evidently.
Noble Lords: Question!
Lord Ross of Marnock: This is the question. Is the Minister aware that he said:
"As to the final decision, the noble Lord knows only too well that the Secretary of State is always made aware of the situation when such a sale takes place. The Secretary of State would not necessarily approve it but he decided not to hold up the sale"?—[Official Report, 1/12/83; col. 799.]
Does the Minister agree with the statement made by the secretary of the Scottish education department, who said that the sale took place at the direction of the Secretary of State; that there was a working party set up in which the SED was involved; and that the Secretary of State finally approved of the sale? Is it not a grave dereliction of ministerial duty to have allowed this to happen?
Lord Gray of Contin: My Lords, the noble Lord, Lord Ross of Marnock, needs no coaching from any other noble Lord as to how to make his points in the most appropriate way. But the noble Lord cannot expect me to be led down the path he seeks to lead me down. I am not prepared to comment any more at this stage.
Lord Glenamara: My Lords, is the noble Lord aware that he has put forward what amounts to a new sub judice rule today? He is saying in effect that a Minister cannot comment on anything which has been discussed by the Public Accounts Committee until the Government have issued a Treasury minute about it. This is a new theory. If the noble Lord cannot comment on the report, can he at least comment on the sale of the college?
Lord Gray of Contin: My Lords, noble Lords who have served in another place are trying to divert me from my brief. On this occasion I can assure noble Lords that I am not going to be diverted. I am not prepared to make any comment. The noble Lord, Lord Glenamara, who is a very experienced parliamentarian, is as aware as I am of the conventions in this matter.
Lord Boyd-Carpenter: My Lords, is it not the fact—and as a former chairman of the Public Accounts Committee I can confirm that it is—that fair-minded people, when the Public Accounts Committee has reported, await the reply of the Government to the minute and then form a view; and they do not seek to form an opinion or to influence opinion by going off at half-cock on half the evidence?
Lord Gray of Contin: My Lords, my noble friend, as he so often does, has made a very valuable contribution to our deliberations.
Lord Mishcon: My Lords, is the noble Lord the Minister aware that in some parts of this House the feeling is that this matter cannot be shrugged off with general words? Will the Minister accept that in some parts of this House this would prima facie be deemed a first class scandal? Would he therefore not agree that instead of merely giving the reply that the Treasury note will be available as soon as possible it is incumbent upon the Government to fix a very near date when that Treasury note will be available?
Lord Gray of Contin: My Lords, I do not recall from the past a precedent for a firm date being agreed in advance. I shall certainly pass on the noble Lord's comments; and I am sure that it will be the Government's intention to make their views known at the earliest date.
Lord Carmichael of Kelvingrove: My Lords, is the Minister not aware that this is a very special report? With all due respect to his noble friend who spoke as a distinguished former chairman of the Public Accounts Committee, it is a very special report because this matter is causing great distress and suspicion, if I may put it that strongly, in Scotland. A date for the Government's reply to the Treasury minute ought to be fixed fairly soon. Also, it must be a time when the House will have an ample opportunity to consider and debate it in depth.
Lord Gray of Contin: My Lords, in view of the seriousness of the matter to which the noble Lord has made reference, I am sure he will agree with me that it is better that the Government consider very carefully their response before making it.
Lord Taylor of Gryfe: My Lords, I have not had the privilege of the parliamentary experience gained by most noble Lords who have spoken, and perhaps I could have some guidance from the noble Lord the Minister on the subject of the Treasury minute. There are issues of public accountability and ministerial responsibility which go back a long time—since Crichel Down. I wonder whether the Treasury minute is the appropriate vehicle for dealing with these two matters.
Lord Gray of Contin: My Lords, I do not consider myself to be in a position to give guidance on such an important issue. If we are to go by precedent, it has always been accepted as the appropriate way of dealing with the matter.
Lord Cledwyn of Penrhos: My Lords, in view of the general concern and, indeed, disquiet felt in many parts of the House, will the noble Lord be good enough to ask his right honourable friend the Secretary of State whether he will consider as a matter of urgency making a Statement in another place when the Government have reached a view on the Treasury note—a Statement which will, of course, be repeated in this House?
Lord Gray of Contin: My Lords, I shall certainly pass on the noble Lord's comment to my right honourable friend.

Housing and Voluntary Bodies
2.55 p.m.
Lord Hylton: 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 consider that the experience of voluntary bodies is, or will become, relevant to the development of national housing policies and local tactics, and if so, what consultations they have held or will hold.
Lord Skelmersdale: My Lords, the Government consider that the experience of voluntary bodies can play an important part in the development of national housing policies, and welcome their views on such matters. We also accept that they can make a valuable contribution at a local level. In the latter case, however, it is for local authorities to decide how far to consult and involve them.
Lord Hylton: My Lords, I am grateful to the noble Lord for his very helpful reply. Does he agree that innovation is one of the main justifications for voluntary bodies? Does he accept that, today, homelessness and sub-standard housing are two of the most acute problems that we face? Is it not true, therefore, that voluntary innovations in adapting unlettable properties and in making use of short-life housing urgently need to be copied in the public sector?
Lord Skelmersdale: My Lords, the Government have no monopoly of good ideas, and they recognise this. There will inevitably be gaps in the statutory and local provision for housing which, with its experience, the voluntary sector is very successful at plugging. Some schemes have been taken over by the public sector in the past and I have no doubt that others will be in the future. Whether they will be concerned with homelessness or with short-life use is difficult to say.
Baroness Jeger: My Lords, why does the noble Lord say that the Government recognise the importance of voluntary organisations in the housing field at a time when the Government are making it more difficult for local authorities to contribute to those schemes and more difficult for voluntary organisations to carry out the work that he says is important? Does he not agree that public contributions to the special housing for which most voluntary associations are responsible will be discouraged if potential donors feel that the houses they help to provide will be sold off?
Lord Skelmersdale: My Lords, I do not believe that the Government are putting difficulties in the way of local authorities in the manner that the noble Baroness suggests. We are changing the particular body which provides a particular fund to a particular voluntary sector housing association. In answer to the noble Baroness's second point, we have today a long debate on the subject of housing—the second of three allocated days—and I have no doubt that we shall be able to pursue this aspect a good deal further.
Lord Wallace of Coslany: My Lords, will the noble Lord accept my congratulations on his original reply? But, bearing in mind the Government's interest in and devotion to voluntary organisations, will he not accept that the decisions taken here on the Housing and Building Control Bill are decisions taken—with the exception of the Government Front Bench—by a voluntary body? I hope, of course, that those decisions will be respected.
Lord Skelmersdale: My Lords, I thought that we were discussing voluntary bodies which are partly funded by public moneys. I do not think that your Lordships fall into that category.

Business
Lord Denham: My Lords, it may be for the convenience of the House if I announce that the Committee stage of the Housing and Building Control Bill will be adjourned for dinner at approximately 7.30 p.m. for a short period. During this adjournment the Committee stage of, the Disabled Persons Bill will be taken.

Computers: Sub-Committee
The Chairman of Committees (Lord Aberdare): My Lords, I beg to move the Motion standing in my name on the Order Paper.
Moved, That the Sub-Committee on Computers appointed by the Select Committee on House of Lords Offices shall have power to join with any Sub-Committee thereof that may be appointed by the Select Committee of the House of Commons on House of Commons (Services); and
That any such Sub-Committee shall have leave to agree with the Commons on the appointment of a chairman for any joint meeting.—(Lord Aberdare.)
Lord Shinwell: My Lords, if I intervene on this item it is because I had contemplated putting down a Motion on the principle involved. I welcome the Motion. If the Chairman of Committees will permit me to offer an opinion—not advice, but an opinion; and I have every confidence in the Chairman of Committees—I welcome further consultation with those in another place. We ought to utilise the wisdom and also accept the authority of the other place; but they also have to recognise the wisdom and ability that resides in your Lordships' House. The more frequent are the meetings between both sides the better it will be for parliamentary democracy.
Lord Aberdare: My Lords, I am sure the whole House will have heard with approval the words spoken by the noble Lord, Lord Shinwell. We would all welcome co-operation between the two Houses. On this occasion the initiative came from the other place, which invited the Lords committee to meet them over problems concerned with computers. The Lords subcommittee has been anxious to accept, and if your Lordships agree to this Motion it will be able to do so.
On Question, Motion agreed to; and it was ordered that a Message be sent to the Commons to acquaint them therewith.

Road Traffic Regulation Bill [H.L.]
3.1 p.m.
The Lord Chancellor (Lord Hailsham of Saint Marylebone): My Lords, I rise to move that this Bill be now read a second time. This consolidation Bill seeks to re-consolidate that part of the law relating to road traffic which was last consolidated by the Road Traffic Regulation Act 1967. Since 1967 this area of the law has been heavily amended by successive Acts, notably the Transport Act 1968, the Transport (London) Act 1969, the Heavy Commercial Vehicles (Controls and Regulations) Act 1973, the Road Traffic Act 1974 and the Transport Act 1982.
In order to produce a satisfactory consolidation, it is necessary to make a number of recommendations which are set out in the Law Commission report on the Bill laid before this House on 21st February. If your Lordships give this Bill a Second Reading it will be referred in the usual way to the Joint Committee on Consolidation Bills. I beg to move.
Moved, That the Bill be now read a second time.—(The Lord Chancellor.)
Lord Underhill: My Lords, I should like to express appreciation to the noble and learned Lord the Lord Chancellor for this consolidation Bill. As the noble and learned Lord explained, a vast number of changes have taken place since we had the last Bill. This Bill will be much appreciated by everyone involved in road traffic regulations. We express our appreciation.
The Lord Chancellor: My Lords, I am grateful indeed to the noble Lord for his kind words. Of course, the work of consolidation is something for which we ought constantly to offer our congratulations to the Law Commission.
On Question, Bill read a second time, and referred to the Joint Committee on Consolidation Bills.

Food Bill [H.L.]
The Lord Chancellor: My Lords, I rise to move that this Bill be now read a second time. Again, this Bill is purely consolidation, consisting of the Food and Drugs Acts 1955 to 1982 and certain other measures which contain between them most of the legislation relating to the preparation, advertising and sale of food for human consumption. If your Lordships give this Bill a Second Reading it will be referred in the usual way. I beg to move.
Moved, That the Bill be now read a second time.—(The Lord Chancellor.)
On Question, Bill read a second time, and referred to the Joint Committee on Consolidation Bills.

Mental Health (Scotland) Bill [H.L.]
Report received.
Ullapool Harbour Order Confirmation Bill
Considered on Report.

Housing and Building Control Bill
3.5 p.m.
The Minister of State, Department of the Environment (Lord Bellwin): My Lords, I beg to move that the House do now again resolve itself into Committee on this Bill.
Moved, That the House do now again resolve itself into Committee.—(Lord Bellwin.)
On Question, Motion agreed to.
House in Committee accordingly.
[THE LORD ABERDARE in the Chair.]
Clause 23 [Grounds and orders for possession]:
Lord Sandford Lord Sandford moved Amendment No. 43:
Page 24, line 9, at beginning insert—
(" () After subsection (3) of section 30 of the 1980 Act there shall be inserted the following subsection—
"(4) It shall be the duty of the person or persons claiming to succeed the deceased tenant to notify the landlord within three months of the tenant's death."
and in the paragraph (c) of Ground 13 of Schedule 4 to that Act after the words "the date or there shall be inserted "notification of".")
The noble Lord said: On behalf of my noble friend Lady Faithfull, I beg to move the amendment standing in her name on the Marshalled List. We come now, in this Bill, to the other rights of secure tenants and, in particular, to the grounds and orders for possession. This is only a probing amendment. As the Committee will recall, Section 30 of the Housing Act 1980 provides for succession to take place on the death of a secure tenant but does not provide for any requirement to notify the landlord. Ground 13 of Schedule 4 provides for recovery of possession in such cases where the dwelling is under-occupied as a consequence, subject to suitable alternative accommodation being offered.
However, such proceedings for recovery must be exercised within time limits. If the landlord is not notified of the tenant's death, the time limits might have expired before the landlord learns of it. This amendment provides for the successor to notify the death of the tenant to the landlord within three months and for Ground 13 to be exercisable within the existing time limits but counting from the date of such notification.
I hope that my noble friend will feel that a provision along these lines is reasonable in all the circumstances. I hope that he will indicate either that an amendment such as that proposed can be accepted or that the situation is provided for in some other way. I beg to move.
Lord Bellwin: As far as I am aware, this is the first time that there has been any call for such an amendment, and I was interested in what my noble friend Lord Sandford had to say. There are always questions that need to be considered closely, and I can see difficulties in this. Perhaps I may explain. Let me take, first, the question of succession. For good reason, there is no provision in Section 30 for any minimum or maximum time in which to decide who shall succeed, and an alert landlord will quickly know when there has been a succession. In most cases, there will be no doubt about who is to succeed, but if a person is qualified to succeed and wishes the landlord to choose

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between him and other people who are equally qualified it is obviously in his own interest to approach the landlord quickly.
I suggest that there is no need for a three-month limit. However, if, for example, the purpose of the amendment is that the deceased's spouse, who is qualified to succeed, has to notify the landlord of the succession, that is another matter. Provided the conditions in Section 30 are met, the provision gives spouses and other family members a right to succeed. The wording of Section 30 is:
"the tenancy vests by virtue of this Section".
There is no question of a successor claiming the tenancy or of the landlord having power of veto. We therefore have to be very careful that making notification a statutory requirement would serve a useful purpose. I must admit to being concerned about whether there should be sanctions, and, if so, about how sanctions which are workable and acceptable could be devised against successors who failed simply to notify their landlords within the statutory period.
I turn to the second limb of the proposed amendment. At present when a secure tenant has died and been succeeded by a member of the family other than the spouse, and the dwelling-house is under-occupied, the landlord can seek repossession. The landlord can do so in the period more than six months but less than 12 months after the date of the previous tenant's death. This six-month period was carefully chosen. It gives a new tenant six months to get over the death and allows the landlord to seek repossession before the new tenant gets too settled.
However, this proposal would effectively extend the period during which the landlord could seek possession by up to three months, so that notice could be served on the tenant up to 15 months after the former tenant's death, instead of 12 months or possibly even longer, where the tenant had failed to make notification within the specified time. If a landlord intends to seek repossession, surely there is time enough at present to make this decision. Fifteen months after death would keep the successor tenant cruelly in suspense. I think that this would be a retrograde step.
However, I am prepared to take a closer look at the question, though I cannot assure my noble friend that we shall end up with an amendment that he will like. But, on the assurance that I am willing to look at it, perhaps he will feel able to withdraw the amendment.
Baroness Birk: Before the noble Lord, Lord Sandford, replies, may I just make one brief comment? I thought that the Minister's explanation was extremely clear. He made out a well-balanced case, but it seems to me that there is one practical point about this. There could be a certain amount of doubt or argument about the date of notification. The authority may correctly have down one date; the person concerned may have made a mistake and believe that it is another date. The date of death is definite. When the Minister is considering this matter, perhaps he ought to take that into consideration.
Lord Sandford: I am most grateful to my noble friend the Minister particularly for saying that he is
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willing to look at the matter again. If I may say so, I think that that would be as well. Although I was grateful to my noble friend for what he said in the main part of his reply, I do not, if I may say so, think it bore exactly on the point that I was making. At the beginning he said that the housing authority would quickly get to know about the death of a tenant. I suppose that in the great majority of cases that would undoubtedly be true, but it might not be true. In so far as time limits are set in the Housing Act 1980 for the operation of the procedures to which this amendment relates, it is important that the housing authority should be certain of being made aware of the tenant's death for the reasons that I gave in moving the amendment. Regarding a fixed moment, I entirely take the point made by the noble Baroness, Lady Birk, about the definitive date on which death occurs.
However, I am more than content with my noble friend's agreement to look at the matter again, and I shall read carefully what he has said. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Bellwin Lord Bellwin moved Amendment No. 44:
[Printed earlier: col. 1267.]
The noble Lord said: This amendment was taken together with Amendment No. 42. I beg to move.
On Question, amendment agreed to.
Lord Bellwin Lord Bellwin moved Amendment No. 45:
[Printed earlier: col. 1267.]
The noble Lord said: This, too, was taken with Amendment No. 42. I beg to move.
On Question, amendment agreed to.
3.14 p.m.
Baroness Fisher of Rednal Baroness Fisher of Rednal moved Amendment No. 46:
Page 24, line 30, leave out from ("words") to end of line 31 and insert (" "grounds 1 to 6" there shall be substituted the words "grounds 1 to 6 and 9A" ")
The noble Baroness said: I move this amendment because I am concerned that certain problems may arise in the case of ILEA. The position is similar to that which the noble Baroness, Lady Faithfull, mentioned in connection with other categories of possession.
Lord Bellwin: In speaking to Amendment No. 46, is the noble Baroness speaking also to Amendments Nos. 70, 71 and 143?
Baroness Fisher of Rednal: I apologise to the House, and I am grateful to the noble Lord the Minister. I should have said that originally.
Amendment No. 70: Clause 29, Page 30, line 27, leave out ("paragraph 3 shall be omitted and")
Amendment No. 71: Clause 29, Page 30, line 42, at end insert—
("2C. A tenancy is not a secure tenancy if the tenant or his predecessor in title was in the employment of the landlord and

(a) the dwelling-house was let to the tenant or predecessor in consequence of that employment;

(b) the dwelling-house is held by the landlord for the purpose of any of its functions under the Education Act 1944; and

(c) the dwelling-house forms part of a building held for those purposes or is within the curtilage of such a building." ")

Amendment No. 143: Schedule 11, Page 90, leave out line 55.
We are trying to envisage the problem that will arise, particularly in ILEA. It is a point similar to that which the noble Baroness, Lady Faithfull, raised. In pursuit of educational needs and functions under the Education Act 1944, ILEA has certain problems regarding tenants. It is important for the running of the educational establishments that on an employee's retiring or otherwise leaving, ILEA should be able once again to take control of the property. So far as I can see—and I would wish the noble Lord to correct me if I am wrong—paragraph 3 of Schedule 3 to the Housing Act 1980 safeguarded that position. The person employed was never a secure tenant because the tenancy related to the employment. In this Bill there seems to be some doubt about that.
Our chief concern is that in such cases eviction procedures might have to be taken to remove the people from the properties. That is not something which we should relish. The amendment takes a wider view of the issue. ILEA is in the same category as a county council, which is not a housing authority, and it may be placed in great difficulties. The educational establishments would be in the various boroughs, and that would affect the evictions. The amendments would extend the safeguards that the noble Baroness, Lady Faithfull, was asking for to these clauses, I ask the Minister to give us the same consideration. I beg to move.
Lord Bellwin: The noble Baroness, Lady Fisher of Rednal, has tabled four amendments which variously modify the proposed provisions governing dwellings let to employees which are within the curtilage of educational buildings. In fact the amendments would affect educational authorities as a whole, but I note that the noble Baroness has specifically referred to ILEA. The department is in touch with the authority about certain aspects of what she has said. It might be helpful if I explained the situation in more detail and perhaps picked up the points that the four amendments raise. I believe that similar arguments underlie each of them. I should make it clear straight away that I accept that there is a point of substance here which I feel must be considered further.
The noble Baroness referred to paragraph 3 of Schedule 3 to the 1980 Act. It is not correct to say that under that paragraph the tenancy was never secure. In fact it provides that a tenancy is not a secure tenancy if, first, the dwelling forms part of or is within the curtilage of a building held for education or social service purposes; and, secondly, it has been let to an employee on terms which provide for the tenancy to terminate on cessation of his employment.
Clause 29(2) proposes the repeal of paragraph 3 of Schedule 3. It is to be replaced by a new provision excluding paragraph 3-type dwellings from the right to buy (but not, incidentally, from security of tenure) but going wider than paragraph 3 in that, first, it covers dwellings within the curtilage of all operational buildings; and, second, it covers all relevant dwellings let to an employee in consequence of his employment, regardless of the precise terms of his tenancy. This provision is in Clause 2 of the Bill.
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There is also to be a corresponding new ground for possession, enabling landlords to obtain possession of such dwellings where they are required for letting to a new employee. That is Clause 23. Amendments Nos. 46, 70 and 71 modify these proposed provisions in slightly different ways. Amendment No. 71 provides that there should be a new additional exclusion to security of tenure, relating only to dwellings within the curtilage of educational buildings, but going wider than paragraph 3 of Schedule 3 in that it will apply to any such dwelling let to an employee in consequence of his employment. The Government would not be happy with this amendment—partly because there seems to us little logic for a provision which relates exclusively to educational buildings and partly because it would, in effect, deprive some existing tenants of the statutory security of tenure conferred on them by the 1980 Act.
Amendments Nos. 70 and 143 provide simply for the retention of paragraph 3 of Schedule 3. If the Committee want to press the case for that, I should certainly be happy to reconsider. But my feeling at the moment is that what the Government are proposing, coupled with the additional provision to which I will refer in a moment, provide for a better and fairer balance between the rights of tenants and the operational needs of landlords. Under the Government's proposals, a landlord will be able to obtain possession of a building within the curtilage of an operational building if it is required for letting to a new employee, provided that the tenant (who will be a former employee or a successor to an employee) is offered suitable alternative accommodation, and this is what our proposal in Clause 23(1) amounts to.
The opposition Amendment No. 46 would modify this provision so that the landlord could obtain possession without ensuring that the existing tenant was provided with alternative accommodation. The noble Baroness, Lady Fisher, said that some bodies to which this provision will apply are not housing authorities and may therefore be in some difficulty in ensuring that suitable alternative accommodation is available. Such authorities will need to co-operate with the housing authority, or with another local landlord, in ensuring that alternative accommodation is available. Surely it would not be right to provide that a former employee tenant should be evicted without any provision to ensure that he has a new home to which to go.
However, having said that, I accept that the noble Baroness has raised one point of real concern: there will be cases—I hope very exceptional ones—in which a teacher or other employee is dismissed from employment as a result of behaviour which may put at risk the safety of children or indeed of other clients which an establishment is intending to serve. In such circumstances, it will be important that the dismissed employee does not continue to reside within the curtilage of the school or other operational buildings. In my view we may well need an initial ground for possession, perhaps tailor-made to apply in these circumstances. We are in touch with the local authority associations on the point and I hope to bring forward a relevant amendment at Report. I hope that in view of that, the noble Baroness will feel able to withdraw her amendment.
Baroness Fisher of Rednal: I thank the noble Lord for a very full answer to us and for the thought that he has given to it. The noble Lord has spelt out quite clearly that the 1944 Education Act is a very wide Act regarding employment of all kinds of people. I did not go into it; but as the noble Lord said, it is not just school caretakers, it is all kinds of people that very often have to be removed from their jobs because of difficulties of employment in education and, as the noble Lord said, of providing suitable accommodation. It is true that in most local authorities they are housing authorities; but I think it is the same principle that is arising in the shire counties, where they are not housing authorities; and the ILEA find themselves in difficulties. In view of what the noble Lord has said, I hope that the deliberations that he has with the associations will be fruitful and will bear out what we are trying to achieve and I think what the noble Lord is aware are the difficulties.
Amendment, by leave, withdrawn.
Lord Bellwin Lord Bellwin moved Amendment No. 47:
[Printed earlier: col. 1267.]
The noble Lord said: This was taken with Amendment No. 42. I beg to move.
On Question, amendment agreed to.
Lord Bellwin Lord Bellwin moved Amendment No. 48:
[Printed earlier: col. 1267.]
The noble Lord said: This was taken with Amendment No. 42. I beg to move.
On Question, amendment agreed to.
Lord Bellwin Lord Bellwin moved Amendment No. 49:
[Printed earlier: col. 1267.]
The noble Lord said: This was taken with Amendment No. 42. I beg to move.
On Question, amendment agreed to.
Lord Bellwin Lord Bellwin moved Amendment No. 50:
[Printed earlier: col. 1183.]
The noble Lord said: This was taken with Amendment No. 5. I beg to move.
On Question, amendment agreed to.
Lord Bellwin Lord Bellwin moved Amendment No. 51:
[Printed earlier: col. 1183.]
The noble Lord said: This was taken with Amendment No. 5. I beg to move.
On Question, amendment agreed to.
Clause 23, as amended, agreed to.
Lord Graham of Edmonton Lord Graham of Edmonton moved Amendment No. 52:
After Clause 23, insert the following new clause:
("Additional ground for court order for possession.
The following amendments shall be made to the Housing Act 1980—
(a) In section 34—
(i) after subsection (2)(c) shall be inserted—
"(d) on ground 14 unless conditions 3(a) and (c) are satisfied";
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(ii) after subsection (3)(b) shall be inserted—
"(c) that the court is satisfied that suitable accommodation will be available for both partners when the order takes effect"; and
(iii) in subsection (4) for the words "for a tenant" there shall be substituted the words "and, for the purposes of ground 14 only, includes a sole tenancy of the dwelling house which is the subject of the proceedings.".
(b) In Schedule 4, after ground 13 shall be inserted—
"Ground 14
The dwelling house has been occupied by partners and one of the partners has notified the landlord in writing that either—

(a) she or he no longer wishes to live with the other partner as husband and wife; or

(b) the partners have ceased to live together as husband and wife.

For the purpose of this ground, partners means spouses or former spouses of a man and a woman living together as husband and wife,".
(c) In Schedule 4. paragraph 2, after paragraph (f) shall be inserted—
"(g) the location of the accommodation if one of the partners (as defined for the purposes of Schedule 4 ground 14) or a member or members of his or her family has suffered violence or threats of violence from his or her partner or a member of his or her partner's family.".").
The noble Lord said: We have just listened in the earlier debate to a series of circumstances which quite clearly are not happy and very often are exceptional. I am very pleased indeed that the Minister—and I believe it was no surprise to the Committee—recognises and sympathises with the circumstances, and was prepared to see whether anything can be done. I stand at the Box to ask him about, if not a comparable set of circumstances, a situation in which there are some unhappy people born out of housing situations that I believe are well known to many people in this place, but also I think even more to those who have served in another place and at constituencies and who have had surgeries where they have had to face up to the realities.
At the end of the day, the Minister will be able to tell the Committee that this amendment has had a good run for its money, not once but twice—and not twice but sometimes three times in the other place by the time one looks at Report stage as well. So it may be that for the benefit of the Committee I do not need to say a great deal except in essence. What we are faced with in many circumstances is the break-up of a marriage or a partnership (these days in housing we have to look at the circumstances whereby two people who are living together invariably are married but not always so, they are cohabiting). For one reason or another—and the prime circumstance that has been drawn to my attention is that of violence by one partner to the other—quite frankly, they are unable to live together. The Minister and Members of your Lordships' House will have noted the crux in paragraph (ii)(c) where in effect we are suggesting an amendment to the Bill that both partners will be provided with accommodation when the order takes effect.
In simple terms, we are faced with the situation of two people who are unable to live together in one unit and the solution to their problem could very well be to have two units, so that they can live separately. No one on this side of the Chamber, nor I believe on any side, will take lightly any interference with priorities and needs when it comes to housing people. More often than not it is asked, "How is it possible to begin to

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justify the case of two people with one unit of council accommodation requiring two units when there are many families who have no units at all?" Certainly, I am not wanting to make the case here on the grounds of priority or necessity.
In a debate in another place at the Report stage, on 21st December, as reported at col. 504 of the Official Report, the Under-Secretary of State said—I consider quite fairly—
"Instead of the couple occupying one dwelling house the new clause would require the landlord to find two dwelling houses. Many people would simply regard that as queue-jumping".
That may very well be the view of many people.
This amendment is born out of the experience of a number of bodies which, on behalf of the community and, I would suggest with all temerity, on behalf of your Lordships' House, have to deal with these unhappy circumstances and try to resolve the problem. The amendment is supported by the National Consumer Council, the National Council for One Parent Families, Shelter, the National Housing Aid Trust, the Women's Aid Federation, and the London Tenants' Organisation.
What we are attempting to secure is a method whereby the very painful circumstances of the breakup of a partnership are resolved in a way in which the innocent party is not deprived of accommodation. Members of your Lordships' Committee may feel that that is not possible if, as happens at present, the issue is referred to the courts which then determine it. However, there are circumstances in which a couple may not be prepared to be the subject of either a divorce or a judicial separation, but where it is quite impossible for the partnership to continue. The clause that we are suggesting would create an additional ground for possession by local authorities of council accommodation and would allow them to transfer the tenancy at the request of one of the joint tenants or tenants living together. That would enable the authorities to take possession proceedings when a relationship breaks down, allow them to transfer the tenancy to one of the parties, and, if there is violence, to rehouse the woman elsewhere for her protection. The new clause seeks to protect the rights of both married and cohabiting couples and to ensure that neither party is left homeless as a result.
Many people, whether they are married or cohabiting, joint or sole tenants, with or without children, victims of domestic violence or not, face legal difficulties and long delays in obtaining separate accommodation when their relationship breaks down. The resultant emotional stress does not need to be spelt out. I am sure that, like me, the Minister will have seen well documented cases, in regard to which we would not demur, concerning the emotional circumstances in which one of the two partners has to wait for an extraordinarily long period for a legal ruling, and because of violence is very often faced with no alternative but to leave the home or unit, thereby depriving herself or himself of any rights she or he may have.
I raise the matter without in any way saying that one would call this a high priority case, bearing in mind the kind of dreadful circumstances which your Lordships recently considered when debating housing. But I should be very grateful if, first of all, the Minister
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would express sympathy and understanding regarding the circumstances. If he is unable to accept the amendment, I wonder whether he could include the point behind it on a list of matters which clearly call for consultation from time to time with the local authorities and which require joint attention.
This is not a new circumstance; it has existed for some time. No doubt during his local government experience the noble Lord the Minister came across such a problem, attempted to solve it. and was beaten by it, as has happend to many of us on both sides of the Committee over the years. So the Minister is no stranger to the problem. Quite frankly, I do not really expect him to be able to concede the principle of what we are asking for in the amendment, but this is a good case and I shall withhold further comment until I have heard what the Minister has to say. I beg to move.
3.36 p.m.
Lord Bellwin: The noble Lord makes his point extremely well, if I may say so, and very persuasively. I say at once that I am not without sympathy for what he says. Yes, I know of the type of situation that he describes. But as he very fairly says, there are problems about what the new clause proposes. It is concerned with a couple who either have parted or wish to part, and one of them notifies the landlord of this. The landlord can then go to court and accommodate both partners separately. So far, so good. But what happens in practice is that it will not be the tenant who notifies the landlord. If the tenant no longer wishes to live in the family home, he or she can simply surrender the tenancy and there would then be no need for any new ground for possession. Alternatively, he or she may be able to assign the tenancy to the other partner.
In simple language the new clause deals with the situation where, though the tenant may want to stay in the family home, a man or a woman, a joint tenant or a non-tenant, wants the tenant to be evicted. Why? The victim may very well have done nothing wrong as a tenant. None of the 13 grounds for possession in Schedule 4 to the Act may apply. It is clear from the new clause that it is envisaged that the couple may no longer be living together when one of them notifies the landlord, and therefore the new clause could simply be a way to provide a means of getting a tenant out, with the consequent loss of the right to buy the dwelling. What happens then? Instead of the couple occupying one dwelling-house, as the noble Lord fairly said, the landlord (presumably the local authority) then has to find two dwelling-houses for them.
I shall not talk about queue-jumping. I think that this matter is perhaps serious in another way. It would lead to certain situations which would be difficult for the landlord authority. I prefer to consider the matter strictly on humanitarian grounds on its own merits. I am sure the noble Lord would agree that even if the landlord felt sympathetic there would be a problem with other people who were on the waiting list who would object if what is being proposed were done. I should have thought that there would be a great difference between the landlord authority statutorily, obligatorily and compulsorily being required to accommodate both partners separately and a situation where the authority may voluntarily want to do so if accommodation is available.

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As the noble Lord fairly said, the objections to the proposal (which have been voiced several times in the past) remain unaltered. They are that an innocent secure tenant can be ousted from the family home by his or her partner, and that the issues at stake are not ones of housing management and are best dealt with not by housing legislation but by matrimonial legislation in the courts, where the question can be settled as part of the whole division of property on divorce. I see the noble Lord shaking his head because obviously that argument has previously been put to him and I suppose he is not too surprised that I put it forward.
Of course I realise that matrimonial legislation has very little effect on cohabiting couples. But that legislation is essentially the responsibility of my noble and learned friend the Lord Chancellor, and I hope that the noble Lord is aware that it is being reviewed by a committee chaired by Mrs. Justice Booth. I am not sure whether the noble Lord knew that. If he did not know, I hope that he will be encouraged by it.
I am always willing, however, to consult the Law Commission on this matter, and I think we must make quite sure that we have an input into those considerations now. I assure the noble Lord that I will make sure this is put in. As I said, I know this is not an easy matter. He knows this is something you cannot solve just like that. That does not mean to say we can all turn away as if it will not happen any more. With those assurances, perhaps the noble Lord will feel able to withdraw his amendment.
Lord Simon of Glaisdale: I was going to voice a slight word of demur. Although the noble Lord who moved this amendment has identified a very real problem, on the whole when it comes to evicting one spouse, the matter is very much better left to a court which is seized of the human and the property problem. As the noble Lord the Minister said, the Booth Committee is at the very moment seized of this difficulty.
The other thing that I felt was relevant in my experience was that the local authority frequently looks to the court for guidance in these matters. It is difficult for a local authority—as the noble Lord put it—to allow someone to jump the queue; but if they have a lead from the court (even an initial informal inquiry through the court welfare officer) it is often very much easier. As the noble Lord the Minister is considering this problem further, he would perhaps bear these points in mind.
Lord Bellwin: I will indeed. I am grateful to the noble and learned Lord for those comments.
Baroness Birk: There is one brief point that I wish to make. I am sure the Minister will remember we considered this ground last year and I think his noble friend Lord Skelmersdale replied then. At the Report stage in another place the Minister said that this was of course under consideration. I take very much what the noble and learned Lord has said, but this does seem to have been going on a tremendous amount of time and the examples of hardship have, unfortunately, increased rather than diminished. We and those
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bodies who are particularly concerned with this problem would like to hear whether there will be some time limit to this and whether there can be some speed about it because it is a growing problem and the considerations seem to be taking an awful lot of time.
Lord Bellwin: At the moment I do not have any information on that but I will try to ascertain the current situation of the Booth Committee and will notify the noble Lord. Lord Simon of Glaisdale, the noble Baroness, Lady Birk, and the noble Lord, Lord Graham, accordingly.
Lord Graham of Edmonton: I do appreciate the manner in which the Minister has responded. I certainly understand that he is unable to say more than he has done bearing in mind the complex situation. It is a matter which could either he resolved by the courts or by a housing department if in actual fact there were no other constraints. If there were ease of supply of housing and one was able simply to make two unhappy people less unhappy by providing an alternative, I am sure there would not be a problem. But the noble Lord the Minister and the noble Lord. Lord Simon of Glaisdale, I think, touched upon another aspect: that very often it is the innocent person, the secure tenant. But if the innocent person is the subject of violence and they have children, they literally cannot stop and insist upon their rights to their secure tenancy; they have got to get out of the place because the man or woman (whoever is the agressor) makes it physically impossible within the constraints of not getting himself or herself into too much trouble and drives the other person out. That person has then made himself either homeless or has given up his rights.
I do take from the Minister that there is, if not some hope, some deep consideration going on in another place. Certainly, I was unaware personally of the initiative that the Minister has drawn to the attention of your Lordships' Committee that there is a committee sitting under Mrs. Justice Booth. As far as I am concerned, I take the Minister's point that he will feed into that the experience of his department and himself in an unhappy situation. In those circumstances, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Sandford Lord Sandford moved Amendment No. 53:
After Clause 23, insert the following new clause:
("Other rights of secure tenants.
. In subsection (1) of section 35 of the 1980 Act (subletting and lodgers) at the beginning there shall be inserted the words "Subject to subsection (1A) hereof"; and after subsection (1) there shall be inserted the following—
"(1A) In every secure tenancy of a dwelling-house of the type described in paragraph 4 of Schedule 1 hereto it is by virtue of this subsection a term that the tenant shall not allow any persons to reside as lodgers in the dwelling-house without the written consent of the landlord." ").
The noble Lord said: I beg to move Amendment No. 53 standing in the Marshalled List in the name of my noble friend Lady Faithfull. This is another probing amendment which deals with the question of the tenants of sheltered accommodation taking in lodgers and waiting to get their landlord's permission before doing so.
Section 35 of the Housing Act of 1980 gives freedom to secure tenants to accommodate lodgers in their dwellings without any reference to their landlords. This includes the secure tenants of sheltered accommodation. I put it to the Committee that in such cases difficulties could arise from the use or abuse of special accommodation and facilities provided specially for the elderly by people other than those for whom that accommodation was originally and specially provided. I think the Committee would also agree that there could be problems relating to succession on the death of such a tenant: for instance, where the lodger was an elderly person from another district, he or she, on the death of the secure tenant, might gain a secure tenancy of sheltered accommodation over the heads of elderly people on the waiting list of the landlord and gain priority over other elderly people with equal or greater need. It is for reasons such as these that it is considered it would be reasonable to require tenants of sheltered accommodation—only sheltered accommodation—to seek the landlord's approval before admitting lodgers. That is the purpose of this amendment and I would be glad to hear—and I think the Committee would be glad to hear—my noble friend's reaction to it.
Lord Bellwin: Secure tenants have had the right to take in lodgers without needing their landlord's consent since 1980, and so far as I know this is the first rumbling of discontent—if I can put it that way—with this provision. I was interested in what my noble friend Lord Sandford had to say. The tenants charter gives a range of rights to council tenants' and others and enables them to have a greater say in housing matters concerning their homes. The right to take in lodgers is one such right where a tenant is judged to know best whether to take advantage of the opportunity. The lodger might be a relative or a friend and would doubtless contribute or perhaps contribute towards the rent. In addition, tenants who take in lodgers can be helping to solve another person's accommodation problem. Lodgers present no problems for landlords since the secure tenant is not parting with possession of any part of his home. There seems to be no good reason why tenants in sheltered accommodation should have their rights limited while they are actually living in the dwelling even if they should not be given the right to buy. If, as a result, a dwelling were to become overcrowded within the meaning of the 1957 Act, the landlord might in the last resort decide to have recourse to Ground 7 of Schedule 5 to the Act (the overcrowding ground) to seek repossession.
My noble friend referred to problems related to succession of sheltered accommodation, but I wonder if this is a real issue. Only close family members who have lived with the tenant for the preceding 12 months can succeed whether or not they are lodgers, and if successors do not have the special needs for sheltered accommodation the landlord can seek possession of the dwelling under Ground 12 of Schedule 4 to the 1980 Act provided the court considers it reasonable and provided suitable alternative accommodation is available. I think that I understand my noble friend's arguments in this area, especially in view of the fact—if my noble friend will allow me to say so—that the amendment also appears in the name of my noble
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friend Lady Faithfull whose knowledge in this whole area is such that one has to give great consideration when she raises points of this kind.
So it is not lightly that I say that, at the moment, I am not convinced by the argument for treating secure tenants in sheltered housing differently in this respect from other secure tenants. It may be that I am missing something here, in which case of course I shall want to read carefully what my noble friend has said. But at the moment I think that that is the attitude that the Government will take on the matter.
Baroness Birk: Before the noble Lord, Lord Sandford, responds to the Minister's comments, I should like to point out that we find ourselves at one with the Minister as regards this particular amendment. There is another point to bear in mind. The noble Lord, Lord Sandford, was concerned about the question of overcrowding or what was happening to sheltered accommodation. However, paragraph 4 says that sheltered accommodation is somewhere where there are social services or special facilities provided in close proximity to a group of dwelling-houses. Therefore, I should have thought that what goes on in sheltered housing, and the number of people living there, can be far more easily found out than similar information relating to almost any other type of housing.
Lord Sandford: I am grateful to my noble friend for what he has said. It is of course the case that this amendment stems to some extent from the housing authorities, one association of which I have the honour to represent as president. But it also, as my noble friend indicated, stems from the experience of my noble friend Lady Faithfull with a lifetime's background in the social services of the county councils. If the fact is that my noble friend would find it easier to see the force of this argument if he were able to study a few case histories, then I will see what can be done in the way of providing them. But I am grateful to him for what he has said, and for the time being I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 24 [Assignments and other disposals of secure tenancies]:
3.52 p.m.
Lord Bellwin Lord Bellwin moved Amendment No. 54:
Page 25, line 32, after ("is") insert ("made").
The noble Lord said: I beg to move Amendment No. 54 and I should also like to refer to Amendment No. 59 which arises after Clause 24.
Amendment No. 59: After Clause 24, insert the following new clause:
("Rent not to increase on account of certain improvements
. In section 39 of the 1980 Act (rent not to be increased on account of tenant's improvements) for paragraph (b) there shall be substituted the following paragraphs—
"(b) if he has died and on his death the tenancy vested under section 30 above, at any time whilst the person in whom the tenancy so vested is a secure tenant of that dwelling-house; or
(c) if he has assigned the tenancy and the assignment was made as mentioned in paragraph (a) or (b) of section 37(1) above, at any time whilst the assignee is a secure tenant of that dwelling-house; or

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(d) if the tenancy has been transferred to his spouse or former spouse by an order under paragraph 2 of Schedule I to the Matrimonial Homes Act 1983, at any time whilst the transferee is a secure tenant of that dwelling-house".").
This amendment fulfils an undertaking when the Bill was earlier discussed in another place. The Government accepted in principle the argument that the benefit of Section 39 of the Housing Act 1980, whereby a landlord must disregard improvements carried out by a secure tenant in determining any increase in rent, should not be confined to the tenant and, on his death, to his successor spouse. This amendment, therefore, extends the benefit of Section 39 to members of the family of the tenant who carried out the improvement, so that when one of them becomes a secure tenant on succession or on assignment he will have the right to enjoy the former tenant's improvements without a consequent increase in rent. The amendment also provides that the benefit can be enjoyed by the spouse or former spouse of a tenant who carries out the improvements to whom the secure tenancy has been transferred on divorce in pursuance of an order under paragraph 2 of Schedule 1 to the Matrimonial Homes Act 1983.
The reasoning behind the amendment is that as the landlord did not pay for the improvement, he should not be entitled to an increase in rent attributable to it so long as the tenant and his family are enjoying the benefit of the improvement. The minor amendment to Clause 24 is consequential. I commend the amendment to the Committee.
Baroness Birk: We on these Benches welcome this amendment and think that it is an improvement on what has been the rather loosely worded Section 39 of the 1980 Act. It makes the situation clear and it is also much more equitable.
On Question, amendment agreed to.
Lord Bellwin Lord Bellwin moved Amendment No. 55:
[Printed earlier: col. 1267.]
The noble Lord said: This amendment was taken with Amendment No. 42. I beg to move.
On Question, amendment agreed to.
Lord Bellwin Lord Bellwin moved Amendments Nos. 56, 57 and 58:
[Printed earlier: col. 1267.]
On Question, amendments agreed to.
Clause 24, as amended, agreed to.
Lord Bellwin Lord Bellwin moved Amendment No. 59:
[Printed earlier.]
The noble Lord said: This amendment was taken with Amendment No. 54. I beg to move.
Lord Graham of Edmonton: So far as we are concerned on this side of the Committee, we support the amendment.
On Question, amendment agreed to.
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Clause 25 [Right to carry out repairs]:
Baroness Denington Baroness Denington moved Amendment No. 60:
Page 27, line 12, after ("a") insert ("model")
The noble Baroness said: I beg to move Amendment No. 60 and to speak also to Amendments Nos. 62 and 63.
Amendment No. 62: Page 27. line 24, at end insert—
("Provided that the right of a secure tenant to carry out repairs shall not arise unless the landlord has failed to carry out repairs within such reasonable periods of time as may be prescribed by the Secretary of State.").
Amendment No. 63: Page 27, line 28, at end insert—
("() The model scheme made by the Secretary of State may be varied by agreement between landlords and secure tenants.").
We are now dealing with the rights of secure tenants to do their own repairs, as regards which the Government issued preliminary proposals in the autumn for discussion. I must say that I greatly welcomed the remarks of the noble Lord, Lord Bellwin, on Second Reading, when he said that the Government's ideas were not yet absolutely firmly fixed and there was still room to listen to other people's ideas on the subject. Those comments were exceedingly welcome to me because originally some of the authorities were not too happy about what was being proposed. However, I beg the Minister and his friends to be patient, because with a little flexibility there can be reconciliation and everybody can be behind the basic proposals that the Government are putting forward and with which we have no quarrel. I repeat: we have no quarrel with the basic proposals at all. We are in agreement with the Government that some tenants have suffered abominably from lack of repairs and dilatoriness as regards repairs and that is what the Government are trying to cure. So, with a little patience and just a weeny bit of flexibility, everybody can be happy, and that surely is what we all want—we want it to work properly and well.
I have spoken about "flexibility" and that is the reason why I have proposed the insertion of the word "model" in the clause. We might be able to arrive at not a scheme hard and fast in every single detail, but a model from which in certain respects there could be slight deviations. After all, the authorities who will have to work this scheme are very varied. They vary in size and responsibility. What is good for one authority is not always good for another. I can think of a small housing association that may have less than 20 dwellings. That is a very small association and it ought perhaps to be able to have some modified, very simple scheme as regards the detail. I am talking about detail, but I am not going to suggest the detail. However, that was what was in my mind when I put forward the word "model".
I am speaking also to Amendments Nos. 62 and 63. Amendment No. 62 really states the principle that the repairs are the landlord's responsibility. I notice that the Government are not departing from that at all and surely cannot, because, as I understand it. tenants pay in their fair rent a sum towards the maintenance of their dwellings. That sum, for the tenant of a new dwelling, is £170 a year and for a "rehab"—which needs a lot of maintenance—£330 a year. That must clearly establish that it is the landlord's responsibility: he is receiving that money in the rent to carry out the repairs. So that principle ought to go in.
First, we should like all the repairs to be done by the landlord speedily and efficiently, but, failing that, the tenant must have the right to come in and do them himself. That is where the flexibility argument arises. I should like to propose that if a tenant is a DIY enthusiast, and he does things about the house as a hobby and gets satisfaction from it, he should be able to go to the landlord without having to wait the appropriate period of time in which the landlord may do the repair, and say "I love doing this kind of job, I am absolutely competent, you can come and see other things that I have done, but please let me have a go at it". That is what I mean by flexibility. Perhaps I may describe it as "statutory schemes that are human".
In circumstances where the landlord fails to carry out the repair and the tenant wants to do it and the landlord agrees that he can, the landlord should have an approved list of contractors so that he can tell the tenant to go to one of the contractors on the list because he is known, trusted and has done many routine jobs and the landlord knows roughly what it will cost. This will speed up the whole operation and the landlord will be satisfied and so will the tenant because they know that the contractor is reliable.
Of course, in such proposals there is always the possibility of cowboy operators. This is what worries some of my friends in local authorities. We want to keep out the man who knocks at the door, offers to do a job and asks for payment in cash, because this would encourage the black economy, and surely we cannot have any legislation that encourages or helps the black economy in any way. That is why I put forward the suggestion that local authorities should have a list of approved contractors so that the cowboys are kept out.
I should like to raise one other point which is not referred to in my amendments, but which arises in Clause 25. It says there that if any query arises on the scheme between the authority and the tenants, the matter should be referred to the county court. I wonder whether it is possible to think of some alternative to the county court, which will involve everybody in waiting time and in costs. Perhaps there could be an arbitrator. I do not find it easy to make suggestions because I do not know exactly what to suggest, but there must be an alternative to the county court which could be more useful.
I put these three amendments forward in a spirit which I hope is helpful to the Government and which might also be helpful to tenants and local authorities who have to work the new scheme. I beg to move.
Lord Evans of Claughton: Briefly, I warmly support the amendment that the noble Baroness, Lady Denington, has moved. As she said, we agree with the principle that the Government want to establish, that tenants can carry out their own repairs and not have to wait for the cumbersome machinery of the local government housing repairs section. We can all think of cases where people have waited not months but literally years for very important repairs to be carried out. The system which the noble Baroness seeks to amend is cumbersome, can be very expensive and, with all the inspection procedures involved, would probably cost more than the small amounts referred to in the Bill.
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I hope that the Government will give very serious consideration to the amendments which the noble Baroness has put forward, which are supported by the Association of Metropolitan Authorities and by the Institute of Housing. I hope and believe that the Government will take them seriously because at the end of the day I believe that they will do what the Government want done in a more efficient and more humane way.
Lord Campbell of Alloway: Briefly, I should like to support the spirit of the amendment and express the sympathy which I certainly feel for everything which the noble Baroness, Lady Denington, has mentioned. But surely it is questionable whether these amendments are appropriate or, indeed, necessary. I say that because, after all, Clause 25 as it stands is a hare affirmation of principle, leaving implementation to regulations to be made by the Secretary of State. There are many details to be dealt with in those regulations. The noble Baroness has, indeed, referred to some which require a very great degree of flexibility.
For example, in the case of a local authority, the cost to the landlord will he less than the tender cost of builder to tenant and greater than the cost of materials plus do-it-yourself—a point very well taken, if I may say so with respect. Secondly, an application under the scheme would in many cases require a specification of works and an estimate of costs, and in other cases it would not. The local authority must surely be entitled to consider whether the repairs are needed, and there must be safeguards as to standards of work and fair compliance with standards to the reasonable satisfaction of the local authority before payment is made. Again we come to the problem of the cowboys.
All this machinery has to be worked out, and these are only some aspects of this implementation machinery. But surely one has said enough fairly to suggest that the county court is the appropriate forum for the resolution of the type of dispute that one could envisage might arise. We are all agreed that this type of implementation machinery should never encumber a statute but should find its place in regulations.
Perhaps I may ask my noble friend the Minister to help a little on the following point. The regulation is to be made under the proposed new Section 41A(2) of the Housing Act 1980. Is this to be laid before either House of Parliament or both Houses of Parliament for approval? If so, is it to be subject to affirmative or negative resolution, or is this just to constitute some delegated exercise of ministerial discretion which is not subject to challenge either in Parliament or in the courts? I merely seek clarification, for I truly do not know. For if Parliament is afforded the opportunity to debate the form and content of any proposed legislation, the veto could, of course, be exercised and, if that be the case, it is not understood why a model scheme, or the proposals in the amendment, would carry the matter any further or secure any preferable result.
I support the broad structure of the clause which, as I think we are all agreed, is wholly in accordance with the policy in the Bill. However, the question of delegation of exercise of permissive ministerial power, which after all is the crux of, the implementation machinery, would surely require your Lordships'

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attention before finally disposing of the point of principle.
4.10 p.m.
Lord Skelmersdale: The noble Baroness, Lady Denington, has obviously read and understood the Government's proposals. However, if only to clear my own mind, I think it would be appropriate to run through them briefly to put this series of amendments in context. I must, however, in doing so, make it clear that today we are discussing not the regulations that may subsequently be made—they will be laid before Parliament and be subject to negative resolution, to answer my noble friend Lord Campbell—but Clause 25 itself.
At the outset, I can confirm as my noble friend remarked on Second Reading, that the answer to the question whether the Government's ideas are fixed in this respect is, of course, "No". We are still consulting. I undertake to include any debates that we subsequently have on this clause in our consultation process. It is important to bear in mind that the right to repair will be entirely optional for tenants. The Government are not seeking to shift any additional responsibility on to tenants. The right to repair scheme would simply provide an additional resource for the carrying out of repairs that are the landlord's responsibility.
Under our proposals the scheme will be limited by an application of cost thresholds to promote cost-effectiveness and practicability. Repairs which would cost the landlord less than £20 or more than £200 to carry out would he excluded. Repairs to the structure of blocks of flats and maisonettes and to the exterior of such buildings will also be excluded. Landlords will have a prescribed time—we suggest three weeks—in which to respond to a tenant's notification of the works he proposes to carry out. They may grant consent either unconditionally or possibly subject to certain reasonable conditions as to the nature and quality of the work to be done.
In any consent the landlord must specify the amount that he will pay the tenant. The amount to be paid must, under our initial proposals, be at least 75 per cent. of what it would have cost the landlord to do the work himself. A larger proportion could, of course, be paid at the landlord's discretion. Landlords will be able to withhold consent only on specific grounds to be set out in the regulations. Disputes about a landlord's refusal, or the amount the landlord was prepared to pay, could be referred to a county court for determination.
I took very strongly the point made by the noble Baroness in introducing this amendment, and I shall have to look at it carefully, but my initial reaction is to think in terms of arbitration. I recall, at the back of my mind—I am sure that the noble and learned Lord, Lord Simon, could confirm whether I am right or wrong—that legal aid is payable only in courts of law and not in courts of arbitration. Therefore, I would have to think a little further along the lines that the noble Baroness proposes.
The proposed scheme, anyway, contains two default provisions. First, if a landlord were to withhold consent because he intended to do the work himself
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but then failed to do it, the tenant would be entitled to carry out the repair himself, provided that it was otherwise within the scheme and to recover 100 per cent. of what would have been the cost of the landlord's doing it. Secondly, if a landlord failed to respond to a tenant's repair notice within the prescribed period, or failed to specify the cost to himself of carrying out the repair, then the tenant might also carry out the work himself. In this case, he would be entitled to recover 100 per cent. of his own costs provided that they were otherwise within the scheme's cost limits. I think that the flexibility that the noble Baroness was asking for is included in the scheme that we are currently consulting about.
Now let me turn to the amendments themselves. If the intention is that the model scheme will be binding on no one, it certainly does not require legislation, either primary or secondary. The Secretary of State could issue a model scheme if he wanted to, but there would be no onus on landlords to introduce schemes in their areas if they decided not to give tenants these rights. If, on the other hand, the intention is that the model scheme should be binding unless it is varied by agreement, this would still seriously weaken the right of tenants and could produce undesirable differences between one area and another.
I agree with the noble Lord, Lord Evans, and the noble Baroness, Lady Denington. I felt, however, that the noble Baroness was talking about an ideal world. The noble Lord, Lord Evans, certainly knows, and the noble Baroness, Lady Denington, probably knows, and I think I know, that, in the relationship between the public sector landlord and public sector tenant, there is not an ideal world. In some cases, the relationship works very well; in others, it works appallingly.
Frankly, I have been led to the view that there is general agreement that, on the whole, tenants do not get a satisfactory repair service from their landlords (although there are notable exceptions, as I have just said) and that tenants do need stronger rights in this field. We may and probably will differ on how such rights should he translated into practice, but I submit that these amendments could seriously limit tenants' rights, and seem to be somewhat retrograde.
The third of the amendments raises a different issue. The Committee has the benefit of having had an opportunity to see the Government's initial proposals. Among others, a tenant will be able, subject to certain limitations, to claim his right to repair at the same time as notifying his landlord of the defect, and a landlord will be able to refuse consent on certain grounds. One of the options proposed was that landlords should be able to refuse consent when they intended to carry our repairs themselves within 28 days.
Superficially, that proposal would not appear very different from the amendment, but the right to repair will not arise until some time, as prescribed, has elapsed. I have to tell your Lordships that there are fundamental differences which, if the amendment were adopted, would work against the tenants' interests. The amendment provides scope for unwelcome procrastination on the part of landlords. I am sure that the Committee will agree with me when I say that it is not sufficient for tenants to have to wait

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a length of time, as prescribed by the Secretary of State, before they can start the process of claiming their right to carry out the repairs themselves.
In many cases, tenants will be able to carry out repairs more quickly and more cheaply than the landlord, and this amendment would simply add delay and expense. We should never forget that it is the tenant who has the major interest in getting the repair attended to. We have already had more than enough complaints of repair delays sent to the department. I submit that the amendments would produce many more. Speedy repair is what the Government's proposal is all about. For the good of tenants, and the relationship between landlord and tenant to the advantage of both, I ask the Committee to reject these amendments.
Baroness Denington: I am absolutely astonished by what I have just heard. These amendments were never meant to work against the tenant. They were meant to establish a flexibility between the landlord and the tenant that could help the tenant and the landlord, and help the whole process. I shall not pursue the amendments now. I shall withdraw them, but I would be glad if the noble Lord would agree that we could perhaps have some conversation. I may have worded the amendments badly, but, obviously, their intention is not understood at all. I think that there is nothing much between the Government and ourselves. We want a little flexibility rather than a hard-and-fast scheme in every single detail. It is not beyond the Government to bring that in, without hurting anybody, either the landlord or the tenant, and it could make things easier.
With regard to the noble Lord, Lord Campbell of Alloway, there are, of course, repairs and repairs. I dare say that a good deal of what I was thinking about related to those repairs where costs are so astronomical these days that £20 does not go anywhere. But where there are repairs that cost a little more than £20 and you know, for instance, that the builder will do the work for £25 or £30, it is simple. Anything more complicated, however, introduces the need for a specification and is of another order altogether. I do not think there is room for flexibility there. We are in agreement. I shall withdraw the amendment and hope, however, that we can understand one another.
Lord Skelmersdale: Before the noble Baroness withdraws her amendment, I most certainly undertake to have conversations with her whenever and wherever she desires. As to whether the amendments were meant to have the effect that I have identified, I am prepared to believe the noble Baroness, of course, that they were not meant to have this effect but I am advised that that is the effect they in fact have. This is the point.
Baroness Fisher of Rednal: Before my noble friend asks leave to withdraw, perhaps I may say that I was a little disappointed in the noble Lord's reply. As my noble friend clearly spelt out, she is aware, as well as anybody sitting in this Chamber, of the problems about repairs in public housing. We are all aware of these, especially those of us who have served on local authorities. We know that there are problems with
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repairs. As one noble Lord said, there are some repairs and some other kinds of repairs. Some repairs on council property are delayed for lengthy times because they do not know how to solve the problems. With much industrialised building it is difficult to find the source of the problem when the roof is leaking on a flat-roofed dwelling. How do they find where to cure the problem? All this kind of thing causes excessive delays.
What is worrying me about the clause is that it does not place a limit on a tenant's ability to call on the right to repair in a financial year. Can he call upon it two, three or four times? Will a limit be placed and the local authority have to tell a tenant that he has had as much as he can from the pool of repairs allocations? With the right to repair for a tenant there must also be the right to repair for those who will not be able to afford to start the repair in the first place. Their interests must be safeguarded.
It amazes me that the Minister uses a facial expression which I find difficult to understand. We find that 60 per cent. of tenants in public housing receive housing benefits. Where will they get the money from initially to start to do the repair, then asking the local authority to reimburse them? The majority of tenants will not be able to benefit from the clause anyway. What concerns us particularly is that such tenants should not be neglected. We must ensure that those people who can afford to do the repairs will not be taking more than their fair share out of the housing pool to do the repairs. The noble Lord has not really satisfied us on that point, which was what my noble friend was trying to bring out.
There are categories of tenants who will benefit over and above others. It is important that we are fair to them. It is important for the Government to recognise that adequate financial provision must be made. My noble friend Lady Jeger has just sat beside me. Only last week she was speaking on housing benefits. It is no good our having a housing Bill when we need a much more comprehensive housing scheme than we have. It is all bits and pieces. The Government are making it even more so.
My noble friend Lady Denington raised a particular point about cowboys. All of us are well aware of the cowboys. The West Midlands county trading standards officers have just issued a new pamphlet relating to property repairs which tells tenants to beware of the man who says that their roofs need mending and to beware of the man who calls to say that their electricity is not up to standard. Everybody is aware of these people who will move in. The good local authorities have tried their best as to repairs with the limited amount of finance they are able to spend. They have set up district teams on housing estates, trying to keep repairs under control. That is not always satisfactory, I agree, but those maintenance teams employed by local authorities can easily be ousted to the detriment of those people who will not be able to afford to pay for the repairs in the first place.
We are afraid that this will be another form of privatisation where the maintenance teams employed by local authorities will gradually lose more and more work to the 40 per cent. who can afford to carry out repairs, to the detriment of the 60 per cent. of people on housing estates who cannot afford it. We are

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concerned about the privatisation aspect, which will mean that the maintenance teams might easily disappear in the future.
Baroness Denington: I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
4.28 p.m.
Baroness Vickers Baroness Vickers moved Amendment No. 60A:
Page 27, line 12, after ("tenants") insert ("who have obtained a report on the condition of the dwelling-house from an environmental health officer").
The noble Baroness said: I realise that the Government attach importance to the tenants' charter for the public sector because they believe that secure tenants should have the same privileges as exist in private accommodation, consistent with the landlords' responsibilities. However, I should like to suggest that the Bill is an extremely complicated way of doing it.
I understand that a number of local housing authorities are already operating schemes which allow tenants to carry out a certain amount of repair work, and they can be reimbursed or have the work done if the landlord has not carried out the repairs within a specified time. However, I know that many people have no knowledge of how to bring their needs to the notice of the local authority. For this reason, I have put down this amendment to give secure tenants the same rights as private tenants. I realise that there are agencies that can give advice, such as Shelter and the National Housing Aid Trust. However, the environmental health officer is the expert readily available to all tenants. I agree with what the noble Baroness, Lady Denington, said: that he has knowledge of the contractors and can advise who are not cowboys and who would do a good job. I should like tenants to be able to contact the environmental health officer to get the necessary form and advice on how to fill it in.
Many of us who have been in the other place and who have had surgeries know how difficult people find filling in forms of any kind, and a great deal of time is spent trying to give them advice. The environmental health officer can visit the person applying and see that the real interests of the tenant are met. I hope that they will receive the list that I have seen of nine reasons why tenants can be refused action. The list also explains how the applicant is to know whether the cost will be under £2 or over £200 when making the application.
I understand that the view of the Department of the Environment is that the administration costs should be included. Are they to go on to the administrative cost of repairs or will it be money allocated by the local authority? It is also difficult to relate the grant given for improvements and the money given for this scheme. Many people will not know the correct one to apply for. This is another reason why the environmental health officer can help. I understand that, in claiming, the tenants themselves serve a notice on the local authority and on the landlord with particulars which will include an indication by the tenant of how best it is proposed to remedy the disrepair. It will be difficult for them, unless they happen to have special knowledge, to know exactly how a defect is going to be remedied. And then they have only 21 days for the
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refusal. I think that it takes far longer to go through these applications than a period of 21 days. There are so many details in this complicated scheme and there are also 15 works which the tenant may elect to carry out. This information was given to me by the Institute of Housing.
Therefore, I should like to suggest that the local authority takes full advantage of the environmental health officer's ability to arrive at expert and full advice on the defects which, if they exist, the council may see for themselves. Also this will help them to prepare the necessary repair work if they wish. I think that the amendment that I have put down will be a real help to the tenants and also to the local authority. I beg to move.
Lord Skelmersdale: I am well aware that my noble friend Lady Vickers has had consultation and correspondence with the environmental health officers on this matter. I should like to say at the outset how well those particular council officers do their job but I should like to point out to my noble friend that they are of course council officers and it may well not be appropriate for one particular group of council officers, with their particular expertise, to do this job. In many cases, what you actually need is an administrator rather than a specialist. I think that we are still in danger of misunderstanding the kinds of repairs to which the proposed scheme is addressed. The right to repair, which this amendment again would seriously affect, is designed to enable tenants to carry out their own repairs and to receive payment from their landlords when they have done so. As I have said earlier, the details have yet to be finally worked out, but when they are worked out draft regulations will be issued for further comment.
However, the main purpose of this right is for tenants to be able to get relatively small repairs done quickly and economically. At present, it is clear that tenants often suffer delays in having necessary, simple and straightforward repairs done. Environmental health officers do not need to inspect homes and produce reports when all that is at issue is, say, a cracked window pane or a leaking hand basin or a damaged door frame; nor, I suspect, would they want to. Environmental health officers would, in my view, rightly regard their involvement here as a waste of time. But without their involvement tenants would, under this amendment, not be able to exercise their right to repair.
Indeed, the sort of repairs to defects which might be relevant, to environmental health officers would be those which would probably be excluded from the scheme anyway, because they would cost more than the £200 to which I referred earlier. I am well aware that the Institution of Environmental Health Officers has recommended that central government should consider giving tenants the right to obtain reports from them on the condition of their homes, and this would apply whether the right to buy was in prospect or not or, indeed, whether the right to repair was in prospect or not. I can only say that my current view is that that recommendation is misdirected. If the institution feels that action along those lines is justified, the environmental health officers themselves should first persuade their employers to make it available to their tenants. There is nothing to stop them preparing reports on the

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condition of homes if they want to. It only needs the tenant to set off the process with an approach to the council and for the council to be sympathetic. To give tenants a right constrained by this amendment would, I fear, be gravely detrimental to the right to repair scheme.
My noble friend brought up the very serious point of the understanding of forms. This is something which I must confess I have not yet considered in detail and, certainly, fully intend to take on board. Normally, advice is available on the filling in of forms from such organisations as the Citizens' Advice Bureaux, but it may well be that some form of advice should be provided by the council. However, as I said at the outset, I do not feel that an environmental health officer would be the right person to choose for this job.
Baroness Vickers: I should like to thank my noble friend for that reply but I am not at all satisfied with it because I do not think that it will help the tenant in any way. I think that we are all worried in this Committee about the tenants themselves, what advice they will get and how they will get the most out of this Bill. They need something that will make them feel reassured that they are not being done out of something that they think will now become their right. There is an alternative that could be thought of: and that is to have a legal duty upon the local authority and the environmental health officers to investigate complaints from council tenants and to submit reports to the responsible council committee, charging them to ensure that remedial works are carried out. That might be a safeguard.
On the other hand, I really cannot understand why my noble friend the Minister said that these officers cannot go round the houses and that they need an administrator. What type of administrator are we going to have? What is the problem going to be for the local authorities? I should have thought that where you have these able, highly-trained and qualified people, it will be much better to use their advice and their interest in and knowledge of the neighbourhood, rather than bring in an administrator. I should be very glad to know what he meant by "administrator".
Lord Skelmersdale: What I meant by an administrator is someone who is not a highly-trained specialist such as the environmental health officer to whom the amendment refers. It is somebody who is adept, if this is the problem, in interpreting the forms for the applicants to use.
Baroness Vickers: I thank my noble friend for his reply, which I do not think is a very satisfactory one. I will now withdraw my amendment and hope to discuss it in the future.
Amendment, by leave, withdrawn.
Lord Skelmersdale Lord Skelmersdale moved Amendment No. 61:
Page 27, line 20, leave out from ("sums") to ("as") in line 23.
The noble Lord said: This amendment removes the upper limitation on the amount which landlords may reimburse tenants satisfactorily to carry out repairs under the proposed right-to-repair scheme. Clause 25, as drafted, would entitle tenants to recover from their landlords any such sums as may be determined under
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the scheme, subject to their not being greater than the costs that would have been incurred by their landlords in carrying out the repairs. This amendment removes that proviso. The Government recognise that there could be circumstances under which it would be quite proper for tenants to receive payment for carrying out a repair which was higher than the landlord would have incurred in carrying out the repair.
The department's consultation documents recognise the need for such provision in cases where the landlord defaulted under the proposed scheme. The circumstances envisaged were where a landlord had failed to respond within the prescribed time to a tenant's application to carry out a repair and had failed—that is, the landlord had—to specify the cost to him of carrying out that repair. If the tenant went ahead with the repair in ignorance of the amount that he would he reimbursed, he could be out of pocket even to the extent that his own costs could exceed the landlord's. He should be entitled to recover them in full provided that they were otherwise within the terms of the scheme.
Ministers in another place undertook last November to come forward with a suitable amendment in the light of the responses to the consultation. Undertakings have already been given elsewhere—and I am glad to repeat them today—that the draft regulations will be put out for further comment before they are laid before the House. I commend this amendment to the Committee. I beg to move.
On Question, amendment agreed to.
[Amendments Nos. 62 and 63 not moved.]
Clause 25, as amended, agreed to.
Clause 26 agreed to.
4.41 p.m.
Lord Evans of Claughton Lord Evans of Claughton moved Amendment No. 64:
After Clause 26, insert the following new clause:
("Tenants' participation in management.
. After section 41B of the Housing Act 1980 there shall be inserted the following section—
"41C.—(1) Secure tenants shall be entitled to direct, manage, participate in and supervise together with those other secure tenants who are likely to be substantially affected, any scheme of improvement, maintenance, modernisation or rehabilitation costing in excess of £10,000 per house or dwelling-houses in which the tenant is a secure tenant, which the landlords propose or intend to carry out.
(2) Regulations under this section may make such procedural, incidental, supplementary and transitional provision as may appear to the Secretary of State to be necessary or expedient." ").
The noble Lord said: I beg to move Amendment No. 64, which seeks to add another clause to the Bill dealing with rights of tenants to be consulted about major improvement schemes and with their participation in the management of the housing estates in which they live. An increasing proportion of money that is at present spent by local authorities is being directed towards improvement schemes rather than new building, and that is a trend which we would all support. Much of this is going towards the renewal of properties built since the war which, sadly, have proved very unsatisfactory, unsightly and unpopular with tenants. In almost every part of the country,

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particularly in urban areas, we can think of such unsatisfactory, unsightly and unpleasant buildings.
The money was spent unwisely when these places were built. Architects were allowed to put forward designs which suited their imaginations as they were at that time but which had no bearing on the reality of what tenants seemed to want. I can remember very clearly in the area that I used to represent as a councillor a block of flats known as Oak and Eldon Gardens in Birkenhead, which has since become notorious. That was put up during the late 1950s and early 1960s and it was greeted as the most wonderful example of mass housing of that period.
Right up to the time when they were in course of demolition, those flats were still being used by the architects who designed them and the builders as an example of the ideal form of local authority municipal housing. That was at the point when they were being demolished at a cost of millions of pounds. So it is not unfair to say that much of the building that was done in the period after the war was, apparently, done at the best levels of architectural design at the time, but without any concern for what the people wanted.
It is probably facile to suggest—as a lot of people do—that local authorities have since learned their lesson. Many lessons have been learned, but money is still being spent on improvement schemes which are out of line with tenants' wishes. Public money is being wasted, in a fashion, because local authorities still tend to rely solely on the views of professional architects and fail to consult the people who will live in the properties. This amendment is aimed at preventing that waste and at giving tenants the right to be consulted about how improvements are to be carried out, which will mean that they subsequently have an interest in protecting the work to which they have subscribed.
There are those—I hope not in your Lordships' House—who take the view that ordinary people cannot have any useful ideas which will assist in the improvement and design of dwelling houses, and they cannot see how ordinary people can work with professional architects. But this approach is refuted by the architectural profession itself and in their own magazine, the Architects Journal, the experience of architects working with council tenants to design entirely new houses, quite apart from improving existing houses, is widely praised. I could quote many examples from the architectural journals of the truth of this view, which has emerged over recent years.
If tenants can work with architects to design new houses—and very superior ones at that—they can certainly work with them to modernise existing properties. A good example of where this has worked is Hackney Council. Tenants there have worked very successfully with the architects in modernising a tower block of flats, in which, understandably, they then have a much greater interest and pride than they would have had if they had not been consulted. There can also be long-term financial advantages from such arrangements.
But we on these Benches believe that even more important than the financial advantages is the fact that tenants are put in a position where they have some
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control over the surroundings in which they live and where, by encouraging them, we can look to a greater sense of belonging, of involvement and of responsibility among tenants towards their homes. I genuinely believe, too, that there will be a reduction in the volume of vandalism and a strengthening of the social bonds in cities, where life can be very grim, and is very grim, in the absence of any sense of community.
I very firmly believe that a greater involvement of tenants in the design, in the improvements and in the alterations of their houses would give them that interest, which they often lack at the moment, and understandably lack, because very often they are still warehoused and not housed. If the Government could accept the terms of the amendment, to involve tenants in this way more than they are at present, it would have benefits not only financial but of a very important social kind. I beg to move.
Lord Graham of Edmonton: May I from the Labour Front Bench support the principles and the philosophy behind this new clause? Those of us who have had experience in local government are well aware of the syndrome of the estate which, at one time, was a matter of pride to the people who lived there. I am thinking of pre-war council estates which were given little attention, because of a shortage of money which the council finds from some source, primarily central Government.
But then, after years and years, the council decides that there will be a major improvement scheme. People who had been living there for many years were put off by the reason that the council were not going to waste money this year or next year, but that in two or three years' time the whole job would be done. Then the council announces that it has the right scheme and will install central heating, add extensions, fit new window frames, and so on. Certainly in my experience in Edmonton there were schemes costing on average £10,000 or more, and they would be covered by this amendment.
Then, for the next 18 months, all hell is let loose, because of the carrying out of the scheme—because of the manner of it. the order of it, the totality of it or the execution of it. The tenants then realise that although a lot of money is being spent, it is very often wasted. They would have liked a chance to intervene with some muscle—not merely to make suggestions. I am not certain whether, even if a council had the patience of Job and took a long time to consult the tenants, that they would be any better off by the time the job was finished. That is because there are always those who will be churlish and will refuse, even if they are consulted, and who will wait until something has gone wrong. However, the principle underlying the amendment is very sound.
I should like to draw attention to some of the words which the Minister will need to look at, if he agrees to take back the amendment. We cannot cavil at the word "participate". However, we need to be very careful about the words,
"to direct, manage, participate in and supervise together with those other secure tenants who are likely to be substantially affected".
As I read these words, it is perfectly possible for council officials not to be very greatly involved.

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Although I am a passionate believer in co-operatives and tenant co-operation, it could be that very large sums of money which need to be spent upon major improvements would be handled by people who know what they want but who would nevertheless make technical mistakes in managing, supervising and directing the carrying out of the work. We agree with the movers of the amendment about improvement, maintenance, modernisation and rehabilitation.
So far as subsection (2) of the new clause is concerned, the noble Lord, Lord Evans of Claughton, has provided that:
"Regulations under this section may make such procedural, incidental, supplementary and transitional provision as may appear to the Secretary of State to be necessary or expedient".
His proposed new subsection ought, I believe, to be strengthened along the lines I have suggested.
This is an amendment with a very serious purport. We are trying to stem the tide of dissatisfaction and disillusionment. The noble Lord, Lord Evans of Claughton, was perfectly fair not to mention the Government. He simply said that, over many years, dissatisfaction had manifested itself because of the manner in which councils and governments had carried out developments and improvements about which there had not been full consultation. The Minister may say that there is no need for the amendment in order to carry out its purport. If the noble Lord, Lord Evans of Claughton, is prepared to withdraw the amendment, I hope that the Minister will try to strengthen it.
The Minister realises that primary legislation of this kind is seldom passed and that we seldom have the opportunity to write words into Bills which we wish them to contain, words which confer very real powers. If the Minister agrees with the sense of the amendment and is prepared, even if the words are suspect from the point of view of good, sound, strong legislation, to take it back, we shall be grateful. If, however, the noble Lord, Lord Evans of Claughton, feels sufficiently strongly about his amendment, we shall be prepared to listen carefully to his arguments as to why the views of the Committee should be tested.
Lord Skelmersdale: While I agree with the noble Lord. Lord Evans of Claughton, about the mass municipal schemes to which he referred when moving his amendment, schemes which were erected in the 1950s and 1960s for the conditions which were thought to be in existence at that time, I have to say to him that the country has moved on since then. As a result of current knowledge and experience, we now know that those schemes were misconceived. None the less, it is easy to be wise after the event. I am the first to accept that the noble Lord, Lord Evans of Claughton, has the germ of a good idea which I should be willing to talk to him about. However, as the noble Lord will appreciate, there are problems about consulting in advance of the original letting, because we do not know which members of the housing list will be put into the scheme that has been built. With that proviso, if the noble Lord is speaking about a scheme which is currently occupied and which will be changed for one reason or another, I should be very interested to talk to him about it.
The noble Lord, Lord Graham of Edmonton, hit the
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nail somewhat obliquely on the head, and I shall explain why. The Government, like everybody in the Committee, are in favour of the involvement of tenants in proposals to upgrade their homes. The tenants' charter already places a duty on landlords to consult those of their secure tenants who would be substantially affected by any housing management proposals, including plans for maintenance and improvement works. We have also had direct and repeated experience of consultation in practice in our priority estates project, which we have recently extended for a further three years. However, this may not be enough, and I shall be interested in the ideas of the noble Lord, Lord Evans of Claughton. The noble Lord has gone a little far, though, and I am not persuaded that this far-reaching proposal is a helpful way of promoting such involvement.
The essence of such a scheme lies in co-operation and communication between all the interests concerned, not in setting one interest against the other. Before the noble Lord, Lord Evans of Claughton, leaps to his feet, perhaps I ought to say that I suspect that this is not the intention of the amendment, but I am advised that it is the practical effect. If tenants are unhappy about the manner in which they are consulted or about the extent to which their views seem to be taken into account, they should take up the matter with their landlords or, if they are council tenants, with their elected representatives. It is quite another matter to say that they should be entitled to take control of expensive and complex projects. This was, I believe, the point made by the noble Lord, Lord Graham of Edmonton. Apart from the contractual and legal difficulties of management work of this kind, it is rash to assume that tenants will have the collective will to resolve their own inevitably diverse views and to provide effective and co-ordinated arrangements for managing the work. I am not happy with the amendment in this form, but, in the near future, I should enjoy talking to the noble Lord, Lord Evans of Claughton, about it.
Lord Evans of Claughton: When one has reached my girth, one does not leap to one's feet. Nor did I feel like doing so. While the Minister's head may be in the wrong place, his heart is probably in the right place. I am not suggesting that this wording has come down on tablets of stone from Mount Sinai. I am willing to concede, with the reputation that we on these Benches have for radicalism, that possibly some of the words should be slightly tempered. I have in mind in particular the remarks of the noble Lord, Lord Graham of Edmonton, about the words in the first subsection. The difference between us is that we believe—I hope the Goverment will concede this point—that we in this country have moved on from the 1920s and 1930s, and even from the 1940s and 1950s, when local councils, architects, or the government believed that they always knew best. There is a growing feeling in the country' that people, whether they be council tenants, residents of housing estates, or people affected by trunk roads, should have the right to express an opinion. Sometimes those opinions are expressed in too robust a way. The spirit of the country today is that tenants, or groups of tenants, should be consulted about the conditions in which they live.
I took the liberty of mentioning—because it was

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such a good example—a block of flats of which I have close and intimate knowledge in the area I represented on the local council; namely, Oak and Eldon Gardens. I concede, that, when the flats were built and opened by the then Labour Member of Parliament for Birkenhead, they were welcomed as a kind of new Jerusalem and that, whatever party we represented, we all said "Hallelujah". Everybody at that time thought that they provided the best housing conditions anybody could ever hope for, and compared them with the luxury blocks of skyscraper flats in which the rich lived. Subsequently, we discovered that under-floor electric heating was of a kind which the average tenant could not afford. The tenants were not consulted about this, or about the general management of the flats. Gradually, therefore, a block in which everybody living there felt great pride deteriorated into a place which was hard to let.
Eventually, it became almost impossible to let. That was partly because the views of the tenants, although they were very well-organised, were ignored by the local council. The experience in Hackney which I mentioned shows how much better it is to say, "We have here a block of flats which is not satisfactory. What do you suggest could be done to improve it? Should there be a caretaker sited at the entrance, or should there be an improvement in the heating system?" Attention to matters of that kind would give people a pride in the property because they will think, "I have some stake in the management of the estate".
I accept what was said by both the noble Lords the Minister and Lord Graham of Edmonton, that there are some people for whom one cannot do anything. We are all aware that some tenants' associations are taken over by extremists and become highly politically-motivated—but that should not put us off the general principle that 'the more responsibility one gives people, the more likely they are to be responsible.
Although I understand why the Minister cannot approve of the proposed clause as it is drawn—and I would not suggest that it is the ultimate in perfection in terms of draftsmanship—I will willingly take up the Minister's offer to discuss this matter. He was not quite so effusive with me as he was with the noble Baroness, Lady Denington; he said that he would meet her any place, any time! Still, I assume that he is well-intentioned and I accept his invitation. At this stage, I beg leave to withdraw the amendment.
Lord Graham of Edmonton: Before the amendment is withdrawn, may we look forward to those conversations taking place before Report stage? If there is need at Report stage to take further action, then we shall of course feel free to take such action.
Lord Skelmersdale: I do not intend to be dilatory.
Amendment, by leave, withdrawn.
5.2 p.m.
Lord Evans of Claughton Lord Evans of Claughton moved Amendment No. 65:
After Clause 26, insert the following new clause:
("Tenants' co-operatives.
. After section 41C of the 1980 Act there shall be inserted the following section—
"41D.—(1) Thirty or more secure tenants who have
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registered as a co-operative society in accordance with section 1(2)(A) of the Industrial and Provident Societies Act 1965 shall be entitled to apply to the landlord for an agreement within the provisions of section 139 of the Housing Act 1980, and it may not be refused without good reason.
(2) Regulations under this section may make such procedural, incidental, supplementary and transitional provision as may appear to the Secretary of State to be necessary or expedient." ")
The noble Lord said: I apologise to your Lordships for moving three proposed new clauses on the trot. The Committee can be fairly sure that I will be comparatively silent for the rest of the day, having got these amendments off my chest. This amendment concerns the rights of tenants—along the same theme as the previous amendment but going a little further—to take over the management of the block of flats or the housing area in which they live. We on these Benches recognise that housing—and this is something of a cliche—is not just a matter of bricks and mortar. It is not even entirely a matter of ownership. It is fundamentally a matter of those who control the housing in which they live or in which other people live.
The Labour Party has been the greatest advocate of central control of housing in the past—be it by the state or by the local authority. It is widely recognised that many problems in the large cities are caused by the existence of enormous municipal housing estates over which, until now, the tenants have had no control whatever and which are managed in some cases in a manner that is remote, insensitive, unaccountable, unhelpful and little concerned with the average resident. I regret to say that the Labour Party in some parts of the country still persist in arguing that all that is needed is to spend more money to right the problems. I will not spend the rest of my speech insulting the Labour Party because I am obviously going to look for their help and support.
I concede that more money does need to be spent on public sector housing, but the tenants should have, in so far as it is possible, a greater say in how that money is spent. Alongside more expenditure on housing there should be a radical change in the way in which rented homes are controlled. In other words, the way in which money is spent and control is organised needs to be determined at the lowest possible level and not at the highest and most central level.
Those of your Lordships who were up late last night will be aware that we had a debate about the problems of the City of Liverpool. I do not wish to re-open any of those particular wounds today. All the accusations and counter-accusations which have been flying about in respect of that whole unhappy area have tended to obscure the very much brighter aspects of much that goes on in the City of Liverpool. For instance, it has the largest and most flourishing housing co-operative movement in the whole of the country. Between 1980 and 1983 more than 18 new housing co-operatives were established in Liverpool—all by existing council tenants for the purpose of building new estates of rented homes. These co-operatives were formed by local people and were given the full support of the administration which then ran the City. I leave your Lordships to guess of which party that administration was, and which provided the money to build those new houses. Those co-operatives have proved a dramatic

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success and have been described in one professional journal as:
"Public sector housing Mark II".
It is a system where the tenants are firmly in charge. Were it not for the present council's unhappy total opposition to the co-operatives they would be expanding still. I hope that in the months to come a change of heart or a change of control will be seen so that the co-operative system can continue to expand.
I do not believe that Co-operatives can be created by politicians. As noble Lords commented earlier, the people who live in the houses must want them and must he a party to them. The politicians' role is to create the climate in which such initiatives will flourish. The Government recognised this and the potential of self-help when they drew up the Housing Act 1980. Sadly, there are many councils up and down the country which would seek to prevent tenants from taking control of estates in the way envisaged in the 1980 Act. Liverpool is one example of what is occurring in many areas, where the local authorities will not recognise the advantages to be gained by encouraging tenants to run their own affairs. It may be that there is a genuine fear that tenants will make a mess of the job and that the local authority will be left to clear up for them. It may be that they are just frightened of the unknown. Nevertheless, I hope that your Lordships will give every encouragement by supporting this amendment to the Housing Act 1980 philosophy of encouraging greater co-operative management by tenants.
Allowing tenants, properly and legally organised, to take charge, will ensure that public money is spent in the most effective way. It will ensure that caretaking is performed properly, that repairs are carried out efficiently, that rent is paid on time, and that ordinary residents will feel a strong sense of responsibility towards their homes and towards their neighbourhood. The Conservative Party locally and the Government nationally have consistently supported the concept of co-operatives. They did so under the 1980 Act and at local authority level—for instance, in Liverpool. The principle I am propounding is already enshrined in the Act. I hope that principle can be further advanced today by seeking your Lordships' support for my amendment. I beg to move.
Lord Graham of Edmonton: We on these Benches fully support the sense of every word which appears in the amendment on the Marshalled List. We are grateful that this initiative is before us and for the opportunity of debating it this evening.
Goodness knows that the Government have enough on their plate not to want suggested further opportunities; but here they have a special opportunity to review the way in which the whole milieu of housing in this country is changing. The right-to-buy legislation and the initiatives which flow from that are certainly traumatic in the field of public housing. One cannot cavil at that, but it so happens that because there is a ferment relating to the tenancy and management of public housing—even to the extent of taking public sector housing out of public management when people buy—new opportunities do occur.
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Together with some of the Members of your Lordships' House, and other places, last week I attended a co-operative trade fair not very far away from here. We saw what I call the new emerging cooperative movement, as compared to the old. I am very proud on this and other occasions to acknowledge my close identity with what one could call the traditional existing consumer co-operative movement. The past 20 years have seen successive governments, by the creation of the housing co-operatives, by the establishment of the Co-operative Development Agency and by other initiatives at a local level—I am thinking of the Greater London Enterprise Board and many others throughout the country—respond to what are genuinely heartfelt needs of ordinary people to play just a bigger part in their own affairs. We are talking here about what are called management cooperatives, where the people have a greater say in actually managing.
Very wisely, the mover of the amendment has subsection (2) in his new clause which takes account of a great many other matters that need to be dealt with and provides the Government with the opportunity of recognising that this is a proper aim and that one can take it on board. It still then leaves, when looking at subsection (2), a range of matters which they can take time to work out. Alternatively, they can say to the mover of the amendment. "We have some sympathy and some problems but, even if not on Report, we are prepared to see how far we can go".
One important action the Government can take is to lay very heavily upon people who believe that it is a simple process to move from being a tenant to being an owner or to being a tenant of a management cooperative, and that there is something simple about it; that all one needs to do is to form a committee. We know that there is far more to it than that. One needs to understand the responsibilities and the philosophies. One needs to understand the penalties that sometimes arise from it. There is an enormous educational job to be done. That is where the Cooperative Development Agency, which has been in existence for 4 to 5 years (its terms were renewed only recently) has a great contribution to make in providing advice and guidance and also opportunities for people to attend courses and to become better co-operators, better managers and better citizens—and certainly better neighbours to the co-operative.
Whether the proposed figure of 30 is right, or whether it is too much or too little, and whether or not other words would be better, the philosophy behind this amendment is absolutely sound and modern. I believe the amendment will be welcomed by a great many councils who will be looking for variations from the straightforward proposition that one either wholly publicly owns all the housing or one sees it taken away through the right-to-buy provisions. There may be some other way in which the council can retain, tenuously, some control with the management of the co-operatives, and which will allow the council opportunities of nomination into the co-operative as vacancies occur. Therefore, I hope that the Government will show some sympathy to what I believe is a very well drawn and much needed amendment.
Baroness Denington: I, too, give the warmest possible support to this amendment. Until recently I have been a member of a secondary housing cooperative which was originally financed by the GLC, and also by the boroughs. Its object has been to start up co-operatives in conjunction with London boroughs. In one instance it was new housing—a very large GLC development in Islington—part of which was half built. The other half was still being built and we were invited by the GLC to see whether we could "co-operatise"—if one may use that horrid word—the part that was not yet built. This was very large, consisting of over 100 houses. We managed to split that down. We could not alter the plans but were able to split it into four different and separate co-operatives which are still there and flourishing.
We worked with the Wandsworth borough council which had estates on which it wanted to form co-operatives. We did the educational work. I support what my noble friend Lord Graham of Edmonton said. It is not easy. People have a lot to learn when they intend running their own affairs. We had to teach them, for instance, how to conduct committees. One must start from the very beginning and long before the co-operatives get going one must do almost 12 months tutorial work to get them established; otherwise, they do not know their responsibilities, as my noble friend said. We did work at Hillingdon, and all over London.
I refer now to tower blocks, of which we have far too many in London. Each one of those would be an excellent unit to he turned into a co-operative. They could run their own affairs. They could be responsible for matters such as their own entry phones. The co-operatives that my organisation was sponsoring were allowed by the borough councils to be responsible for choosing their own tenants provided they came from the council housing list. I have to say that they were very responsible about it. They did not merely choose the best, well-off tenants. They chose a proportion of coloured tenants. There was a whole mixture. They were quite remarkable and earned my great admiration.
Therefore, I give this amendment my warmest possible support. I should like to see the Government, when they have got some of their present problems off their chest, turning their mind to perhaps trying to run a conference and encouraging authorities throughout the country to have more co-operatives in their public housing.
Lord Dean of Beswick: I have listened with interest to the previous speakers to this amendment. I do not want to give the impression that I am speaking against the amendment because I am not. But if someone can tell me that it is a simple exercise even to establish co-operatives within the present housing structure in this country, I can only say that they have never dealt with the situation. First, if "X" number of houses, or tenants and their families, in those houses decide to become a co-operative, where does the extra funding come from for the improvements that they may decide they want? Will they try to implement the separate rent structure from the total pool of housing in their city? I suggest that people are interested in housing co-operatives because they want to cast their sights a little higher than their existing facilities.
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I know, as an ex-chairman of a local housing authority and I am sure other noble Lords know, that it is very difficult to start apportioning where the areas of priority lie. It can be a very successful operation to start apportioning priorities in terms of spending and it can also he a disaster area. I saw a recent example of a very successful operation and I have no doubt the Minister is aware of it. It took place in Leeds where, because last year the Government made "X" millions of pounds available, suddenly there was a problem in the constituency I represented where some rationalised, or semi-industrialised houses, which had been built about 15 years ago needed totally re-roofing. I believe the cost was about £10,000 for each house. I think the noble Minister knows the area I am talking about. It is an estate in West Leeds.
The local authority handled this situation well by holding tenants' meetings because it was a crash programme. Anyone who is involved in local authority housing will know that when one starts on an improvement scheme of any dimension, whether re-wiring re-plumbing or a total refurbishing of the house to bring it up to modern standards, it is the most difficult exercise in which any local authority can become involved.
If it is a major operation you first have to consider whether the people will be prepared to put up with the terrible conditions they would need to endure while the operation is carried out or whether to adopt a policy of decanting. A group of tenants who have set themselves up as a co-operative housing association may be in houses in the public sector which are 30, 35 or even 40 years old. They may want total inside renewal or improvement at perhaps £10,000, £15,000 or even £20,000 per house. Where will the occupiers be moved to? A large local authority will probably already be short of housing stock and will not even be able to accommodate the waiting list. That is where one difficulty will come in in this type of exercise.
Quite a number of local authorities have a housing stock of about 100,000. A local authority may feel that it has done a good job on paper and 10,000 of its tenants have formed themselves into co-operatives of varying sizes. The associations will have various schemes to which they aspire. With a severely restricted housing investment programme, which prevents it even in summary cases from carrying out an adequate basic maintenance programme, how is a local authority to deal with the priorities? Who will the people in the co-operatives blame when they cannot get the money they ask for? We are talking about a lot of money—perhaps £10,000 or £15,000 per house. The local authority will have to say, "We have let you set up the co-operative. We think it is an excellent idea. But if you take that course, there is no way that we can find from our housing investment programme the finance to make your pipe-dream come true". That is where the difficulty will appear.
I do not want to speak against housing co-operatives. In principle, I am in favour of them. But anyone who thinks that by putting through this measure all the kinks will be ironed out, people will be queuing up to form co-operatives, and in five, six or seven years time all the problems will be dealt with is living in cloud cuckoo land.
5.22 p.m.
Lord Skelmersdale: Some 20 minutes ago the noble Lord, Lord Evans of Claughton, was at it again—not jumping to his feet but being too radical. I welcome the importance given in the amendment to tenants' management co-operatives, but the entitlement that it proposes cuts across the voluntary principle on which they simply must be established. In any eventuality, I cannot support coercion.
The noble Lord, Lord Dean of Beswick, spoke about running co-operatives. I have never run a housing co-operative, but my first post-graduate job was to run a vegetable growing co-operative in Zambia. That threw up problems which were widely outside my experience and I suspect rather outside the noble Lord's, too, even with the experience to which he has admitted. I very much take the point that co-operatives are difficult things to handle. Nonetheless, as I said, I welcome the importance that has been given to them by this amendment.
As the noble Lord, Lord Evans of Claughton, said, these agreements under Section 139 and Schedule 20 of the Housing Act 1980 are intended as a means of facilitating arrangements entered into voluntarily by both parties. The terms of the agreement could not be imposed by one party on another. I take for an example the suggestion that it would not he right to allow 30 tenants on an estate to choose procedures for collecting rent arrears, whereas it might well be very pertinent for them to examine and have discussions with the landlords on other things.
The other day I had the opportunity to go round a large Haringey estate of 1,000 units of flats, including two tower blocks, housing some 5,000 people. I went there not so much because of the condition of the units—because I was not able to go inside one of them—hut to see exactly what was going on in the tenants' association. I do not know whether this was a co-operative association within the meaning of the noble Lord's amendment, but I was incredibly impressed. I would go even further than that: I was actually thrilled to see what this tenants' association had been able to do in the way of a youth common room, sporting facilities and a complaints procedure which could be used by all the tenants on the estate, irrespective of whether they belonged to the tenants' association.
There is nothing between us on the principle, but the amendment, as written, has certain practical defects. It would apply only to local authority and new town tenants. Furthermore, it is normally necessary that a housing co-operative should represent all the tenants on the estate. As I understand the amendment, it would apply only to some, albeit a minimum of 30. What occurs to me is what happens if it is a very small estate with only 20 tenants. The condition that a certain minimum number of tenants should have this entitlement is, therefore, I suggest, misconceived. While I agree with the principle behind the amendment, I really cannot support the idea of coercion, and that is why I cannot support the amendment.
Lord Evans of Claughton: I think that coercion is probably rather too strong a word. In my opinion it is preferable that every possible encouragement should
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be given to further concepts and ideas of co-operative management of housing. As so many authorities have not taken advantage of the 1980 Act, my proposal would give them the boost, or the kick in the pants, to encourage them to give their tenants every opportunity to do this kind of thing.
I take the point made by the noble Lord, Lord Dean of Beswick, that if there is no money not an awful lot can be done and there will be a great deal of disappointment. But if there is no money, whether it is a tenant co-operative or the management is done in some other way, it still will not be done. Local authorities may make the money available for re-roofing or major repairs—which are examples that the noble Lord gave—as they have done in Liverpool and elsewhere. It is not a question of co-operative ownership but of the co-operative managing the use of the money where it is available, rather than a solution being imposed on them by the housing department and the architects that it employs. In a sense it follows on from the previous amendment which I withdrew in order to have discussions with the noble Lord the Minister.
The point that I am trying to establish is that if we really are looking to a change in the drab and unhappy aspect of many of our municipal housing estates, we must encourage this kind of development much more robustly than has heretofore taken place. The system has worked exceptionally well in pockets. I do not want to see the development only in pockets; I want to see it spread all over the country. I agree that I may not be as radical as the noble Lord the Minister. Thirty may be too high a figure; perhaps it should be less. Those advising me picked 30 as a reasonable figure in order for that kind of organisation to take off.
I very much follow the point made by the noble Baroness, Lady Denington, about the learning and training process. This is terribly important not only in order to be part of a co-operative but to lead a fuller and more active life, to be more involved in the community and to get your feelings and ideas over to other members. I think that possibly training in committee work is one of the most important aspects of the whole idea. I am conscious of the fact that I am holding up your Lordships. On this point I feel sufficiently strongly, and sufficiently discouraged by the noble Lord's attitude, to test the feeling of the House.
5.30 p.m.
On Question, Whether the said amendment (No. 65) shall be agreed to?
Their Lordships divided: Contents, 114; Not-Contents, 130.

DIVISION NO. 1

CONTENTS

Airedale, L.

Blyton, L.

Ardwick, L.

Boston of Faversham, L.

Attlee, E.

Bottomley, L.

Aylestone, L.

Briginshaw, L.

Banks, L.

Brockway, L.

Beaumont of Whitley, L.

Brooks of Tremorfa, L.

Beswick, L.

Burton of Coventry, B.

Bishopston, L.

Carmichael of Kelvingrove, L.

Blease, L.

Chitnis, L.

183

Cledwyn of Penrhos, L.

McIntosh of Haringey, L.

Collison, L.

Mackie of Benshie, L.

Darling of Hillsborough, L.

McNair, L.

David, B.

Mar, C.

Davies of Penrhys, L.

Mayhew, L.

Dean of Beswick, L.

Melchett, L.

Denington, B.

Milford, L.

Diamond, L.

Molloy, L.

Donaldson of Kingsbridge, L.

Monson, L.

Donnet of Balgay, L.

Mulley, L.

Elwyn-Jones, L.

Nathan, L.

Evans of Claughton, L.

Nicol, B.

Ezra, L.

Ogmore, L.

Fisher of Rednal, B.

Oram, L.

Foot, L.

Peart, L.

Gaitskell, B.

Phillips, B.

Gallacher, L.

Ponsonby of Shulbrede, L.

George-Brown, L.

Prys-Davies, L.

Gladwyn, L.

Rathcreedan, L.

Glenamara, L.

Rhodes, L.

Graham of Edmonton, L. [Teller.]

Roberthall, L.

Rochester, L.

Greenway, L.

Ross of Mamock, L.

Grey, E.

Sainsbury, L.

Grimond, L.

Seear, B.

Hall, V.

Serota, B.

Hampton, L.

Shackleton, L.

Hanworth, V.

Shinwell, L.

Harris of Greenwich, L.

Stallard, L.

Hatch of Lusby, L.

Stedman, B.

Houghton of Sowerby, L.

Stewart of Alvechurch, B.

Hunt, L.

Stewart of Fulham, L.

Irving of Dartford, L.

Stoddart of Swindon, L.

Jacobson, L.

Stone, L.

Jacques, L.

Strabolgi, L.

Jeger, B.

Taylor of Blackburn, L.

Jenkins of Putney, L.

Taylor of Mansfield, L.

John-Mackie, L.

Tordoff, L. [Teller.]

Kilmarnock, L.

Underhill, L.

Kirkhill, L.

Wallace of Coslany, L.

Kirkwood, L.

Wells-Pestell, L.

Lawrence, L.

Whaddon, L.

Leatherland, L.

White, B.

Listowel, E.

Wigoder, L.

Llewelyn-Davies of Hastoe, B.

Wilson of Rievaulx, L.

Lloyd of Kilgerran, L.

Winchilsea and Nottingham, E.

Lockwood, B.

Lovell-Davis, L.

Wootton of Abinger, B.

McGregor of Durris, L.

Young of Dartington, L.

NOT-CONTENTS

Airey of Abingdon, B.

Elliot of Harwood, B.

Allerton, L.

Elton, L.

Ampthill, L.

Enniskillen, E.

Auckland, L.

Faithfull, B.

Avon, E.

Fanshawe of Richmond, L.

Belhaven and Stenton, L.

Fortescue, E.

Bellwin, L.

Gainford, L.

Beloff, L.

Geoffrey-Lloyd. L.

Belstead, L.

Glanusk, L.

Bessborough, E.

Glenarthur, L.

Bolton, L.

Glenkinglas, L.

Brookes, L.

Gormanston, V.

Broxbourne, L.

Gowrie, E.

Bruce-Gardyne, L.

Gray, L.

Caithness, E.

Gray of Contin, L.

Campbell of Alloway, L.

Gridley, L.

Campbell of Croy, L.

Grimston of Westbury, L.

Camegy of Lour, B.

Hailsham of Saint Marylebone, L.

Cathcart, E.

Chelwood, L.

Halsbury, E.

Cockfield, L.

Harmar-Nicholls, L.

Coleraine, L.

Harvington, L.

Cork and Orrery, E.

Hayter, L.

Craigavon, V.

Henley, L.

Croft, L.

Home of the Hirsel, L.

Cullen of Ashbourne, L.

Hunter of Newington, L.

Daventry, V.

Hylton-Foster, B.

Denham, L. [Teller.]

Ilchester, E.

Dilhome, V.

Inglewood, L.

Drumalbyn, L.

Ingrow, L.

184

Killearn, L.

Peyton of Yeovil, L.

Kilmany, L.

Portland, D.

Kimberley, E.

Quinton, L.

Kinloss, Ly.

Rankeillour, L.

Kinnard, L.

Rawlinson of Ewell, L.

Lane-Fox, B.

Renton, L.

Lauderdale, E.

Rochdale, V.

Lewin, L,

Romney, E.

Long, V.

St. Aldwyn, E.

Lucas of Chilworth, L.

St. Davids, V.

Luke, L.

Saltoun, Ly.

Lyell, L.

Sandford, L.

McAlpine of West Green, L.

Selkirk, E.

McFadzean, L.

Sempill, Ly.

Mackay of Clashfern, L.

Sharples, B.

Macleod of Borve, B.

Skelmersdale, L.

Mancroft, L.

Soames, L.

Margadale, L.

Stamp, L.

Marley, L.

Stodart of Leaston, L,

Massereene and Ferrard, V.

Sudeley, L.

Maude of Stratford-upon-Avon, L.

Suffield, L.

Swansea, L.

Merrivale, L.

Swinton, E. [Teller.]

Middleton, L.

Terrington, L.

Milverton, L.

Teviot, L.

Molson, L.

Thomas of Swynnerton, L.

Morris, L.

Tranmire, L.

Mottistone, L.

Trefgarne, L.

Mowbray and Stourton, L.

Trenchard, V.

Murton of Lindisfarne, L.

Trumpington, B.

Norfolk, D.

Tryon, L.

Nugent of Guildford, L.

Vaux of Harrowden, L.

Onslow, E.

Vickers, B.

Orkney, E.

Vivian, L.

Orr-Ewing, L.

Westbury, L.

Pender, L.

Whitelaw, V.

Resolved in the negative, and amendment disagreed to accordingly.
5.39 p.m.
Lord Evans of Claughton Lord Evans of Claughton moved Amendment No. 66:
After Clause 26, insert the following new clause:
("Tenant's access to landlord's files.
. After section 41D of the 1980 Act there shall be inserted the following section—
"41E. At the request of any person who is a secure tenant, the landlord shall permit him access at all reasonable times and without charge to any file kept in connection with his tenancy or the construction, financing or repair of his dwelling house." ")
The noble Lord said: I beg to move the amendment standing in my name on the Order Paper, to insert the new clause to give tenants access to landlord's files. In another place today my right honourable friend the Leader of the Liberal Party introduced a Bill under the Ten Minute Rule to provide more general freedom of information. I am not moving this amendment in order to curry favour with him, but merely because I think that it is a good way to start down this very important path of rights of access to information—and what information is more important to an individual than information about the house in which he lives?
The amendment seeks to allow secure tenants the same rights to information about their homes as is available to an owner-occupier. The noble Lord the Minister's honourable friend the Under-Secretary of State for the Environment has already declared in another place that he agrees in principle with the amendment and that in his view the matter could be best introduced by way of guidelines. To us on these Benches that is not good enough. We believe that the rights of tenants to know about the details of their

185
tenancy, the history, structure, rehabilitation, and state of repair of their homes is not a matter for guidelines, but is a fundamental entitlement in our society, and should be legislated for.
In some cases tenants who have bought homes under the terms of the Housing Act 1980 have been denied complete access to the relevant files on the property only to find out too late that it suffers from some structural fault which is not immediately apparent on a survey. The forthcoming data protection legislation, which your Lordships have been dealing with, will, as I understand it, mean that access will be available to information stored on computer files of whatever kind. It will then be the case that a tenant in a computerised district—that sounds rather ghastly, very Nineteen-Eighty Four—or a district which has computerised its processes, will have the right of access to information, while a tenant in a less progressive, or more old-fashioned, authority will still be denied the right to see the records stored on paper, because the Data Protection Bill, when it becomes an Act, will not apply to that kind of information.
As I have said, the Government have supported the concept in principle in terms of guidelines, which we think does not go far enough. In previous discussions on earlier legislation the Labour Party has supported an amendment couched in these precise terms. So with my usual optimism I look forward to wholehearted support from all sides of the Chamber for what I very seriously believe would be an important extension of the freedom of secure tenants to enjoy the knowledge that they are entitled to have about the whole history of the house in which they live. I beg to move.
5.42 p.m.
Lord Graham of Edmonton: I rise from the Labour Front Bench to support the amendment. I am sure that this comes as no surprise, in particular since those noble Lords astute enough to read further ahead on the Marshalled List will have seen Amendment No. 88A, which relates to the provision of a manual. I would hope that the Minister finds unexceptionable most of the amendment that we are now debating; that is the part of the amendment which relates to the file on "construction, financing or repair". By and large those points would be covered by our Amendment No. 88A, in which we talk in terms of the purchaser or the tenant of a house having the right to a manual, which from the very beginning will reveal precisely how the building was built, whether there were any structural problems, what one can anticipate, what one can be fearful of, and so on.
I appreciate that the nub of the reservation which we might hear will relate to a tenant having the right to look at a file on his tenancy. The response may very well be that these are very sensitive documents and that they are used in order to record all kinds of information. If it were said that that information was highly confidential or was strictly confidential to the members of a sub-committee, I would acknowledge that that has been the past practice.
However, I think the Minister must be aware that there is a wind of change and a mood for more information to be made available. At the same time this of course places a great onus of responsibility on
186
those who actually enter the items of information on the file. If before a person who is to enter details on a file puts pen to paper he realises that upon request the file may be opened, that would not be a bad thing. I am not arguing that the file would be less colourful or less useful or that it would be doctored. But I believe that in the context of the 1980s, and bearing in mind the Ten-Minute Bill in the other place this afternoon (to which the noble Lord, Lord Evans, has referred), there is a general desire to ensure that this kind of information should be available. The information can affect all kinds of matters including credit ratings and a person's standing in the community. A person ought at least to be aware of the information and ought to be in a position to challenge its authenticity and to verify its veracity.
We are aware of the great argument that is going on regarding school files and records and of what I would simply call the movement that there is for people to know more about what has hitherto been kept in secret by banks and various bodies and organisations. Here is an opportunity for the Government to show some sympathy for the matter. If there is to be a blanket refusal from the Government, it is likely that the noble Lord, Lord Evans, will repeat the performance of a minute or two ago. But if the Minister is able to show some sympathy with the point and, as he did on the previous amendment, can indicate that conversations, if they would not resolve the matter, could well go some way towards producing a formula that is acceptable, then we on this side of the Committee would certainly not wish to support the pressing of the matter to a vote. But if the noble Lord, Lord Evans, does not feel satisfied, we on these Benches would certainly support him in a Division.
Lord Skelmersdale: The noble Lord, Lord Evans, has referred to the discussion in another place on giving tenants access to files about themselves and their homes. The Government then undertook to see how secure tenants could be given the information they want, and I of course understand the noble Lord's anxiety to find out what progress has been made.
Equally, I am sure that the noble Lord recognises that the proposal that he has put to the Committee is complex. It is not simply a matter of tenants having access to files about themselves but also about their property and the financing of it. That, I suggest, is the difference between the issue that we are now discussing and the similar issue which has been raised, and is continually raised, on the Data Protection Bill. There would be many questions to be answered about what would be reasonable information to which tenants should have access.
Even so, I am hound to tell your Lordships' Committee that the Government do not accept that there is a strong enough case for tenants to have a right of access to files which would leave the landlord with no discretion whatever as to whether to withhold information—information that could harm either the landlord or the tenant. The Government take the view that the burden that would be placed on landlords would be out of all proportion to the benefits which might accrue.

187
The noble Lord, Lord Evans, referred to the reply of my honourable friend the Parliamentary Under-Secretary and so I think that I must repeat what he said; namely, that the Government's inclination in this matter is to proceed not by legislation, but by guidance or circular. These questions need the fullest consultation with interested bodies. Even if at the end of the day we were to consider primary legislation for this matter, there would need to be very thorough consultation indeed. We are already considering the issues carefully, but it would be wrong to rush this question.
I can assure the noble Lord that we support the principle of tenants having greater access to information, but I have to recommend the Committee to reject the proposal before it for a wide-ranging, statutory right on which much thinking still has, very rightly, to be done. So I am afraid that I cannot accept the amendment.
5.50 p.m.
The Earl of Caithness: I quite like the thoughts behind this amendment but I really did think it was put over in a way which would frighten everybody in any aspect of having a secure tenant.
If one approaches a landlord or his agent in a reasonable way and says: "Could you give me the background history to this? What are the structural conditions underground or in the building? What repairs have been done in the last 20 years?" the agent for the landlord or the landlord himself will in a great majority of cases provide that information and it is quite right that the tenant should be given the opportunity to get that.
What this amendment does is to take into account the wretched word "financing", which opens up a whole new ambit of personal relationships between the landlord and financiers because it does not specify what aspect of finance the noble Lord, Lord Evans of Claughton, wants available—and I think this would create enormous difficulty from the point of view of running an agency and looking after landlords who have got secure tenants. To have this provision imposed upon us would probably mean considerable extra time and staff, because one can imagine the number of tenants queueing outside, whereas this could easily be done by negotiation in a letter form giving the information which the noble Lord, Lord Evans, seeks without any of the hassle of having it in the Bill.
Lord Evans of Claughton: I am afraid I do not share the noble Earl's feeling of optimism about the information the landlords would provide. In a large number of cases landlords are helpful; in a small minority of cases they are grotesquely unhelpful, and the noble Earl is probably aware of it as I am. It is the whole point of information which enables people to control their affairs much more than living in an atmosphere where they know very little about what is going on with the property they occupy.
I am a little surprised—and I should have thought there might be some objection from noble Lords on all sides of the Committee—about the concept of information regarding people's personal records. I
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have often thought to myself that when I come to write a reference I might be a little less frank if I thought the referee was going to see what I had written. But in the case of a house it is either falling into a coalmine or it is not; it is either constructed in a certain way or it is not. I concede the point which the noble Earl, Lord Caithness, made about the financing side of it. I agree that is a slightly more controversial point, but I really cannot see why a secure tenant should not know the whole history of his house in the same way as an owner-occupier can learn the history of his house through its records and through the history of its title and all those kinds of things.
You see, I am trying my best to see that the Government has a good side to it, but I am afraid I am failing. Quite frankly, I would have thought that in these days and in the atmosphere in which we live—as the noble Lord, Lord Graham, said—there is a continuous movement towards people having the maximum information to assist them in living their lives more fully, to know what is going on around them and to have the power to control their own destinies to that extent. I think the days of confidentiality about this kind of thing, people knowing very little and only as much as is good for them—as we used to say when I was a child—have changed, and I think the whole ethos of our society today is moving towards greater knowledge and greater information about people's lives. I think this is true particularly about houses in which people live.
It is with great regret that I feel the reply given by the noble Lord the Minister is not satisfactory, although I hope that at some point this discussion will help him to persuade his colleagues to introduce primary legislation. At this stage I think it would be useful to test the feeling of the Committee on this subject, which to me is of very great importance.
The Earl of Caithness: Before the noble Lord sits down, he has acknowledged the point that the word "financing" is going to cause problems. My noble friend the Minister did say he was in sympathy with the proposal. I have said I am in sympathy with some of it. I apologise to my noble friend: he is not sympathetic to all of it. Why does not the noble Lord, Lord Evans of Claughton, withdraw this amendment, go to the landlords and say, "What information can we produce?" It is not going to be done in four lines; it is going to be a schedule relating to various aspects. This is surely the wrong way to approach it. I do ask him to withdraw his amendment.
Lord Graham of Edmonton: I wonder whether the noble Lord the Minister can help the Committee by indicating the precise stage the consultations, which I believe he referred to as taking place, have reached and the extent of the detail. I appreciate the problem of the noble Lord the Minister in being able to respond straightaway. The fact is that I do not believe that the noble Lord, Lord Evans of Claughton, is anxious to press matters to a vote if he is able to make progress on the principle. We recognise that we are not going to change legislation overnight. What we want is satisfaction from the noble Lord the Minister that there is a process going on, and quite clearly not only property owners (that is, landlords) but local authorities—and there may be other bodies—can

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make a useful input. If the Minister were to indicate that—and I am not talking about coming back on Report or anything of that kind—and we can be satisfied that there is genuine progress along those lines towards the principle, I am prepared to accept the good faith of the Minster. But, in the light of his earlier reply, which was somewhat bleak, I can fully understand the intention of the noble Lord, Lord Evans of Claughton.
Lord Campbell of Alloway: Before the noble Lord sits down, very briefly is not one of the crucial problems this business of what is in the file? I ask the noble Lord, Lord Evans of Claughton, to consider that if we could devise the feeding of information on two sections of the file, one which related to the house—and I take his point about what is structural—and the other which related to personal matters (whether the tenant has too many parties at two o'clock in the morning and so on and so forth, which are personal matters and matters of conduct) one could perhaps then make a hit of progress. On this side of the Committee we are faced with a situation where—speaking only for myself—if you could separate the files, I could open my mind, but, with the system we have got, I cannot.
Lord Skelmersdale: I am grateful to both my noble friends. I think the key to all this is in what the noble Lord. Lord Evans of Claughton, said. He said something to the effect that it was his desire to give the maximum opportunity to people to learn about the things which affect them. We have now heard six different speeches on six different points, which is why I suggest to the Committee that consultation is a very real and necessary thing in all this.
To answer the noble Lord, Lord Graham of Edmonton, directly, consultations have already begun this afternoon in your Lordships' House—consultations which it was suggested to me I should tell the Committee were at a very early stage; so early in fact, that they are beginning soon! If the noble Lord, Lord Evans of Claughton, has done nothing else, he has prompted some very serious consultations, and I have been as honest with the Committee as I possibly can be.
Lord Evans of Claughton: I hope I have done one or two other things besides that, but that in itself is a major feather in my cap and I shall remember this for the rest of my life.
In the light of the fact that the noble Lord the Minister has said that consultations are beginning and there is the possibility, I gather, of primary legislation being considered in the future, and in the light of the remarks made by the noble Lord, Lord Campbell of Alloway, and the noble Earl, Lord Caithness, and to show how flexible we are and how reasonable we shall be when shortly we form the Government, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
5.59 p.m.
Clause 27 [Housing Association grant]:
On Question, Whether Clause 27 shall stand part of the Bill?
Lord Bellwin: May I take the unusual step of begging to move that Clause 27 shall not stand part of the Bill and, in saying that, to speak to Amendments Nos. 67 and 72, in which it will be found that there is a new clause which is a division of technical provisions in Clause 27, which it replaces?
Amendment No. 67: after Clause 28, insert the following new clause:
("Housing association grant.
.—(1) The Secretary of State may pay housing association grant under section 29 of the Housing Act 1974 (in this Part of this Act referred to as "the 1974 Act") to an association registered under section 13 of that Act in cases where, after a tenant has exercised or has claimed to exercise the right to buy or the right to be granted a shared ownership lease, the association carries out to the dwelling-house or to the building in which it is situated works of repair or improvement.
(2) Where in a case falling within subsection (1) above a housing association grant is made after the tenant has exercised the right to buy or the right to be granted a shared ownership lease, the Secretary of State may reduce the amount of the grant.").
Amendment No. 72: Clause 31, page 31, line 34, at end insert—
(" "the 1974 Act" means the Housing Act 1974;").
The new clause deals with housing association grant payment powers in cases where the right to buy is claimed or exercised while major repairs or improvement projects are under way and the association might make a loss on the sale if HAG is not paid in respect of those repairs. The new clause provides a limited extension of the powers to pay grant so that it may be paid on repairs or improvements where a tenant has already claimed or exercised the right to buy or the right to a shared ownershp lease. That appears in subsection (1). The new clause also provides for grant to be reduced to take account of the proceeds of sales which are completed before grant is paid over. That appears in subsection (2).
The new clause will enable the Secretary of State to ensure that there need be no loss and also that no undue profit is made by housing associations as a result of these transactions, and I commend it to your Lordships.
It might be convenient also if I speak to the amendment to Clause 31 which is a minor and consequential amendment to ensure that references to the Housing Act 1974 are correctly interpreted. The first reference to the 1974 Act is made in this new clause. I beg to move.
Clause 27 disagreed to.
Clause 28 agreed to.
Lord Bellwin Lord Bellwin moved Amendment No. 67:
[Printed above.]
The noble Lord said: I have already spoken to Amendment No. 67. I beg to move.
On Question, amendment agreed to.
Lord Bellwin Lord Bellwin moved Amendment No. 68:
After Clause 28, insert the following new clause:—
("Repayment of housing association grant.
.—(1) In section 30(3) of the 1974 Act (repayment etc. of housing association grant in certain circumstances), after paragraph (a) there shall be inserted the following paragraph—
" "(aa) there has been paid to the association in respect of any land to which the grant relates an amount payable in pursuance of—

(i) the covenant required by section 104B of the Housing Act 1957 or section 8(1) of the Housing Act 1980

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(covenant for repayment of discount) or any other provision to the like effect; or

(ii) the provision required by paragraph 3, 6 or 7 of Schedule 3 to the Housing and Building Control Act 1984 (terms of shared ownership lease) or any other provision to the like effect;".".

(2) If, after a housing association grant has been made under section 29 of the 1974 Act to an association registered under section 13 of that Act—

(a) there is such a disposal as is mentioned in paragraph (a) of subsection (3) of section 30 of that Act; or

(b) there is made such a payment as is mentioned in paragraph (aa) of that subsection,

the association shall notify the Secretary of State of the disposal or payment and, if so required by written notice of the Secretary of State, shall furnish him with such particulars of and information relating to the dispoal or payment as are specified in the notice.
(3) Where a housing association grant has been so made, the Chief Land Registrar may furnish the Secretary of State with such particulars and information as he may reasonably require for the purpose of determining—

(a) whether there has been such a disposal as is mentioned in paragraph (a) of subsection (3) of section 30 of the 1974 Act; or

(b) whether there has been made such a payment as is mentioned in paragraph (aa) of that subsection.")

The noble Lord said: This clause will bring the Secretary of State's powers to recover grant in respect of HAG-funded projects into line with the full range of circumstances which may now arise in respect of payments associated with the disposal of housing association dwellings, either outright or on shared ownership terms.
This does not represent a change in the general policy on the recovery of housing association grant. Section 30(3)(a) of the Housing Act 1974 allows recovery for a reduction of grant where any land to which the grant relates is disposed of, up to the historic level of that grant. Where dwelling-houses are sold at a discount or only a share in the dwelling is acquired, either under the right to buy or under the voluntary scheme, the capital receipt may occasionally be insufficient to meet a repayment of all the grant attributable to the dwelling. In such circumstances the Secretary of State will abate the recovery of grant to avoid the association making a loss.
A tenant may, however, decide to sell the house he has bought under the right to buy within the statutory period which requires him to repay a proportion of the discount. Or if he has a shared-ownership lease he may purchase an additional share or the whole of the rented portion of the dwelling. In either event there will be a further capital receipt for the housing association. There is currently no power to recover any outstanding balance of housing association grant in these circumstances. The new clause will provide it. I beg to move.
6.5 p.m.
Lord Bellwin Lord Bellwin moved Amendment No. 69:
After Clause 28, insert the following new clause:
("Provisions as respects certain tenants of charitable housing associations etc.)
.—(1) This section applies to any tenant of a publicly funded dwelling-house who, but for subsection (1) or (2)(a) of section 2 of the 1980 Act (exception for cases where landlord is a charitable housing association etc.), would have the right to buy; and a dwelling-house is publicly funded for the purposes of this section if housing association grant has been paid under section 29 of the 1974 Act in respect of a project which included—
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(a) the acquisition of the dwelling-house;

(b) the acquisition of a building and the provision of the dwelling-house by means of the conversion of that building; or

(c) the acquisition of land and the construction of the dwelling-house on that land.

(2) The Secretary of State may pay housing association grant under section 29 of the 1974 Act to an association registered under section 13 of that Act in cases where the association first acquires a dwelling-house and then disposes of it at a discount to a tenant to whom this section applies.
(3) Where an association registered under section 13 of the 1974 Act contracts for the acquisition of a dwelling-house and, by way of sub-sale, disposes of its interest to a tenant to whom this section applies, subsection (2) above and the following provisions, namely—

(a) section 122 of the 1980 Act and sections 104B(2) to (9) and 104C of the 1957 Act as applied by that section (disposals by housing associations);

(b) section 2 of the 1974 Act (consent of Housing Corporation to disposals); and

(c) section 9(2) of that Act (loans by Housing Corporation), shall have effect as if the association first acquired the dwelling-house and then disposed of it to that tenant.

(4) A housing association which is a society registered under the Industrial and Provident Societies Act 1965 may have among its objects that of effecting the transactions falling within sub-section (2) above without preventing the association being or, as the case may be, remaining registered under section 13 of the 1974 Act.
(5) In this section "dwelling-house" includes a house within the meaning of the 1957 Act.")
The noble Lord said: This new clause provides the machinery to give effect to the new home ownership scheme for tenants of charitable housing associations which the Minister for Housing and Construction announced in outline on 21st December 1983 in another place. These are enabling powers and I will not dwell long on their detail. Their purpose is to enable the Secretary of State to pay housing association grant so that tenants of publicly-funded dwelling-houses, excluded from the right to buy because of the charitable status of their landlord, may purchase a house, or a share of a house, on the open market, on similar terms to the right to buy. This will also free the publicly-funded charitable dwellings for re-letting to people with families with the type of housing need the charity was established to meet.
The outline of the scheme is familiar to your Lordships from the announcement made by my honourable friend the Minister for Housing and Construction on 21st December in another place. I should like first to say something about the people whom the scheme is designed to help and how it will operate to help them. For myself, I have to say that I am disappointed that your Lordships' House was not prepared to give this category of tenant the right to buy as the Government proposed in the original Housing and Building Control Bill. But the Government accept that these properties should be retained in the ownership of the charitable housing associations and, as I made clear at Second Reading, we have no proposals in this Bill to give the right to buy to the tenants of charitable housing associations.
However, the arguments put forward against the right to buy for charitable housing associations were mainly concerned with the effects on the housing associations, the landlords. But I do not believe that anyone has argued that it would be wrong to help the people, the tenants of those properties, who would like to buy a home of their own. Why should they be

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denied help to become home owners? Even if the charitable properties they live in are to remain permanently in the rented sector, it does not follow that the tenants should be forced to remain permanently as tenants and denied in perpetuity an opportunity similar to the right to buy which applied to tenants of other public sector properties. The Government have always recognised the overwhelming case to deal fairly with these people and to help those who want to take on and who can afford to take on—and I accept that they may not be very many in number—the benefit and responsibilities of home ownership. That is why we have come forward with this scheme.
I should like to stress that the powers in the Bill are only enabling powers. The details of the scheme will be administrative and not legislative, but there are a number of matters of concern that have been expressed about the scheme which I would like to explain, and I hope that this will reassure the Committee that we have already taken account of the type of points that were worrying your Lordships at Second Reading. Of course, we shall consider any further points that your Lordships make in working out the details of the scheme.
It might be helpful to the Committee if I outline the circumstances in which we would expect the scheme actually to operate. I do intend to go into some detail, because I hope that in so doing, if your Lordships will bear with me, I shall be able to assuage all the concerns which have been expressed. I know that your Lordships will take careful note of what I say, especially those noble Lords who may have doubts about the scheme.
First, grant would normally be reserved to cases where the charitable landlord had refused to sell to the tenant the house in which he was living on terms equivalent to those that would be available under the right to buy. Secondly, the home selected by the tenant would be expected to fall within the value limits operated under the, "Do it yourself shared ownership" scheme. Those limits are £40,000 in Greater London, £35,000 in the home counties, and £30,000 elsewhere. Grant would be available on outright purchases, or on shared-ownership leases, but in the case of shared-ownership the minimum share that the tenant purchased would need to be 50 per cent. Shared ownership will normally be available only to those tenants who cannot obtain a sufficient mortgage to cover outright purchase, subject to the usual requirements associated with income and the security of the property being purchased.
My noble friend Lord Selkirk made the point on Second Reading that it is important for people not to be tempted by discount alone (particularly as regards shared ownership) into committing themselves beyond their ability or willingness to take on the responsibilities associated with home ownership. The same points and the same safeguards as regards the security of the property and the income of the tenant purchaser apply to the new scheme.
Another point that has caused concern is the way in which the discount is to be calculated. I should like to explain this in great detail because it is most important. The basis for determining the discount
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entitlement eligible for grant purposes is intended to be broadly similar to the right to buy. It will depend on length of tenancy in the public sector and the value and cost of provision of the existing charitable dwelling. In the case of a purchase at or above the value of the rented dwelling, the discount under the scheme will be the actual amount of the discount the tenant would have received if he had bought his rented dwelling. If he buys a house with a lower value than his rented dwelling, he would get a percentage discount on the value of the purchase. The percentage would be the same percentage discount he would have received under the right to buy.
These proposals will meet the concern that people will be able to use the discount—and many people have referred to the £25,000 discount, which is the maximum under this scheme and the right to buy—to buy a house outright without having to contribute anything themselves. The method that we are proposing to use for working out the discount entitlement will not enable this to happen. I repeat, this will not happen. I think that I can best illustrate this by giving one or two examples.
Let us consider the case of a tenant with 20 years of public sector tenancy who is entitled to a 50 per cent. discount. The rented dwelling in which he lives is valued at £20,000. The actual discount on the open market purchase may depend not only on the value of his existing dwelling, but also of the house he purchases. If the market value of the house the tenant chooses is £20,000, the discount would be £10,000, exactly as it would have been for the right to buy were he able to buy his present home. If the market value of the house he chooses is more than the value of the existing dwelling, but I stress still within the price limit of the scheme, the discount will still be £10,000. The critical point is that he is not entitled to more discount than he would get if he could buy his existing dwelling. When the tenant chooses to buy a dwelling worth less that his existing rented dwelling his discount entitlement will reduce in consequence. In those cases the percentage discount, not the actual sum, will be applied. The tenant will not be able to obtain a larger percentage discount than he would have obtained if he was to buy his existing dwelling under the right to buy. I shall refer again to the same example of an entitlement to 50 per cent. discount on a rented dwelling worth £20,000. If the house or flat the tenant chooses is worth £15,000 then the discount will be 50 per cent., that is £7,500, not £10,000.
The cost floor will also apply, so the maximum discount will depend on the cost of provision. The effect of the cost floor will also be carried through if the tenant buys a cheaper dwelling than the value of his present rented dwelling.
Finally, there is the question of discount on the acquisition of initial and additional shares under shared-ownership leases. For the purchase of the initial share it is intended that the discount entitlements I have just described will be applied pro rata to the size of the share being purchased. So a discount entitlement of £10,000 on a house chosen by the tenant that is worth £30,000 will give rise to a discount of 33.3 per cent. on the value of the share he is purchasing. A discount entitlement of 50 per cent. a house, chosen by the tenant, worth £15,000 will give

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rise to a discount of 50 per cent. of the share he is purchasing, and so on. It is also intended that for the purchase of additional shares, the leases should enable discounts to increase in the ordinary way by 1 per cent. for each year of occupation under the lease from the base provided by the discount on the initial share up to a maximum of 60 per cent. So if a tenant bought an initial share with an effective discount of 33 per cent., three years later he could buy an additional share at a discount of 36 per cent.
I realise that that takes some taking in just listening to it—I might add that it takes some taking in preparing it. But nevertheless with careful thought, if nothing else, it illustrates the fact that it is carefully thought through; it is not there to give an undue advantage, it is not silly, it is not giving anything away. It is exactly in line with the proposals under the existing right to buy for other public sector dwellings.
It is understandable that there has been some concern about the resources to fund the scheme and the effect on the rest of the Housing Corporation's Approved Development Progrmme. I commented at an earlier stage in the Committee's proceedings on the far-fetched suggestion that the scheme could cost £600 million. We gave our own estimate of £10 million. There is somewhat of a difference. I understand that the National Federation of Housing Associations has suggested a slightly higher average annual figure over five years of £l4 million. I do not either dissent or agree with that figure. The actual figure will depend upon the take-up by people who were in necessitous circumstances when they took up their tenancies and many of whom may well wish not to move. However, I think the fact that the National Federation of Housing Associations' estimate is £14 million and that our estimate is £10 million shows that the estimate of £600 million is, let us say, slightly ludicrous.
As I said on Second Reading, the resources for the scheme are to come from the Housing Corporation's Approved Development Programme. Allowance has been made for it within the gross programme of £687 million and the cash limit of £617 million for 1984–85. We shall also take account of the resources required for this scheme in future years. I recognise the concern that housing associations' other projects should not suffer from the operation of the scheme. As your Lordships know, the programme is set from year to year and no decisions have therefore been taken for future years, but the corporation will continue to consult the NFHA in the normal way before discussions with Ministers, and there will be ample opportunity for the movement to make its views on the shape and size of the programme known to the corporation and the Government, precisely as it always does and in the most helpful and valuable way.
There is one other concern about the scheme that I should like to mention. This is that some sort of market in the qualifying dwellings may emerge and that this will be encouraged by the right to exchange that we are introducing. I do not think this is likely to happen in practice. The major safeguard lies in the charitable rules under which charitable housing associations operate. They are able to let within those rules only to tenants whose housing needs accord with their objects. The proposals for the right to exchange will not override this requirement.
We are also proposing to include a further safeguard in the rules of the scheme which will prevent the successive movement of existing tenants to a particular dwelling to enable them to take advantage of the scheme. What we are proposing is that for tenancies which begin after the start of the scheme, the tenant should be required to have lived in the house for a reasonable period before participating in the scheme. The period we have in mind is one of about two years. There is of course no requirement under the right to buy for a tenant to have lived in a particular dwelling before he buys it, provided he has already sufficient public sector tenancy to qualify for the right to buy. But I think that such a requirement is appropriate for this scheme to ensure that tenants are not allocated to a particular dwelling just because it will give rise to a discount that will enable the tenant to buy a house with the help of this scheme. A requirement for tenants to have lived in the dwelling for at least two years before participating in the scheme should prevent tenants moving or being moved to particular dwellings at frequent intervals to take advantage of higher discounts.
I have given an outline of the way in which we intend the scheme to operate. We are however still considering the details of its operation. I assure your Lordships that we shall be prepared to take account of any points that are made in the debate on the clause today in finalising the scheme. I hope that I have said enough to convince your Lordships that this scheme is a valuable way of helping this category of tenants to become home owners.
Before I sit down, I think that I ought properly to refer to the article published in today's edition of The Times (and if I do not, your Lordships will) urging your Lordships to vote against this proposal. I hope that I can demonstrate that the arguments in the article are quite misconceived. Let me just pick a few out. The main argument that the article uses is that charitable landlords have a special legal status and that this is more important than the need to treat public tenants consistently. But surely your Lordships will accept that we have done a great deal to recognise the special legal status of charitable housing associations, and that is why we have not reintroduced the old Clause 2 which would have conferred the right to buy on tenants of charitable housing associations whose dwellings were provided with public funds.
This new scheme is designed to help the tenants of charitable housing associations who would have received the right to buy under the old Clause 2. I see no reason why this group of tenants, whose homes were provided with public funds in just the same way as the houses of council tenants of non-charitable housing associations, should be denied the sort of help to move into home ownership that is provided under the right to buy.
Indeed, many of these tenants would have been housed by a charitable housing association under nomination rights by the local authority. In other words, it would have been a matter of pure chance that they were housed by a housing association rather than by a local authority. So I ask, can it really be right that such a matter of chance should permanently deny them the opportunity to become home owners?

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Surely, it is not wrong, as The Times suggests, to want to treat all tenants whose dwellings have been provided with public funds as consistently as possible?
It was also argued in The Times that the fact that many tenants may not be able to afford to take advantage of the scheme makes the plan worse. I must say that this seems to be trying to have one's cake and eat it. Only just over a week ago the same newspaper was claiming that all eligible tenants would take advantage of the scheme, and that it would therefore be prohibitively expensive. Now that that argument has been shown to be totally groundless, it claims that the fact that not many tenants will be able to afford to take advantage of the scheme makes it worse. What possible basis can there be for such an argument? No one ever suggested that all council tenants would take advantage of the right to buy. So far, about 11 per cent. of public sector stock in England and Wales has been sold to tenants since 1979. Does the fact that this is a relatively small percentage prove that the right to buy is a bad scheme? I think not. Nor, I suspect, do the hundreds of thousands of ex-tenants and their families who have bought under the right to buy.
The other main point that The Times leader today totally ignores—it is surely the point I should make to my noble friends who. I know, have been so concerned about the position of the charitable housing associations and the dwellings which they manage and let—is that every time a tenant buys a house on the open market with the aid of a discount under this scheme, a house or flat is freed for the association to allocate to someone else in acute housing need. This is something that has been noted, and I think welcomed, by the National Federation of Housing Associations. It is a crucial element of the scheme that is totally ignored by The Times article. Even if the average discount works out at £6,000, the figure quoted by The Times on 25th February, I would hope that your Lordships would recognise that this is a much cheaper way of making rented accommodation available for the charities to let than new provision.
I hope I have said enough to convince your Lordships that the criticisms in The Times are not justified. My view is that this scheme represents a useful, if modest, means of helping this group of tenants to achieve home ownership. As I have repeatedly made clear in this Committee and in your Lordships' House, I cannot stress too much the importance I attach to treating these people fairly by giving them, if they wish—and only if they wish and are able to take it—the chance to have a home of their own.
This is nothing more than an attempt to recognise the concern of the charitable housing association movement to retain the ownership and letting facility of its dwellings and, at the same time, to meet the aspirations of such of their existing tenants as wish to, and can afford to, buy their own homes. It disadvantages no one. It is a truly worthy objective, and I hope that your Lordships will accept it. I beg to move.
[Amendment No. 69A, as an amendment to Amendment No. 69, not moved.]
6.25 p.m.
Baroness Nicol: The Minister has given us a great deal of information, but he has not by any means
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answered all the questions. I hope that the Committee will forgive me if a large part of what I offer this evening is in the form of questions, because there are still a fair number to be dealt with. We seem to have come a long way from the beginning of this exercise, which was to allow people to buy their homes—the homes in which they lived, where they had perhaps brought up their families, and certainly, where they intended to stay.
There seemed to me quite a strong argument in favour of doing this. Indeed, there were a great number of people up and down the country of all political persuasions who felt that this was the right thing to do, although they questioned in some ways the way that it was done. However, we are now saying that, in order to pursue this dogma through to its end, we are going to give the people, excluded last week by your Lordships from the right to buy, a hand-out so that they can go into the open market and buy the house of their choice, or at least persuade their association to do it on their behalf. I shall return to that in a moment.
The great injustice achieved by this, to which the noble Lord the Minister referred, althogh he does not seem to think it very important, was the harm done to other young couples who are trying to gather together enough money to buy their own homes. Most of them are having to do so in conditions of great discomfort. They are having to work very hard, to scrimp and to save, to get a deposit to put down on a house, usually a modest house to begin with—the sort of house most likely to be available to the tenants of charitable housing associations.
The result of what is being proposed is bound to be inflationary. Even if there was no feeling of injustice, which there undoubtedly will be among these young people, the effect, when people have a good deposit ready to put down without any argument, is bound to be to increase the demand for the houses and therefore the price. This is an injustice, and it is one which we should not consider supporting in this Committee.
The Minister refers to this as enabling legislation. Does he mean that the charitable housing associations may not take part in it if they do not want to? Is this what he means by "enabling"? There is nothing in Amendment No. 69 to say that they must do so. If they have to do so, are they to bear the whole cost of the exercise? Forgive me if I have this wrong, but your Lordships must admit that the information given to us is rather slight to begin with. If the tenant expresses a wish to buy a particular house in the open market having first registered his wish to buy his own and been refused, as I understand it, the housing association will then be required to go and buy this house and resell it to the tenant. Who bears the cost of that exercise? We all know how expensive it can be.
The questions about discount on the property purchased have been answered. There was quite a lot in the reply and I shall need to study the Minister's statements carefully before I come back on that. The time spent as local authority tenants will, I understand, also count towards discount. This puts an entirely different complexion on the exercise, which, again, one will need to look at carefully. Will the tenant be able to use the money to buy in another area? If someone is moving from town A to town B, can he buy a house in another area and require his association to

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pay for it for him? This is something that does not apply under council tenancies, and therefore it is a new question to be answered. If he can, will there be a distance limit or can he move north, south, east or west as he chooses?
The article in The Times was dealt with to a certain extent by the Minister; but it raised a number of points which strike a chord in the hearts of many people here. I draw your Lordships' attention to the beginning of it. I am sure most of those present will have read it, as it was freely available in the Library today. It says:
"What if a minister of the Crown were today to rise from the front benches and promise a cash gift of thousands of pounds to each of a group of citizens, 100,000 strong, whose location and circumstances he would be at pains to describe and whose individual merit had not entered his calculations?"
That is exactly what he has done and nothing that he has said, either before today or during his discussion here this evening, has persuaded me that this is the correct line for him to take. I propose to read carefully what he has said, to listen to the rest of the discussion and to return to it at a later stage.
Lord Moyne: Before the noble Baroness sits down, might I ask her whether the young couple she envisaged not being able to find a house because houses were being bought under this clause would not more easily he able to afford to move into one of the charitable trust houses set free by the moving out?
Baroness Nicol: Yes, indeed, that would he possible if there were enough of these dwellings. But there are enormous waiting lists for them, as the Minister is well aware. We are talking about a possible turnover of only a percentage of those dwellings. The feeling of injustice that this provision will arouse is not to be lightly taken. It may outstrip the size of what happens, but it will create a feeling of injustice.
Viscount Hanworth: If I have understood it correctly, the Minister's case is largely based on the fact that it is a matter of chance whether somebody seeking accommodation finds it with a housing association or with the council. He is therefore trying to he fair to see that people who find it with a housing association are not prejudiced. That is all very well in its way, but we also have to consider that the possibility of housing with a housing association is small because there are enormous waiting lists. Whereas he is trying to ameliorate one problem, there are those who have to find their accommodation outside—which is the vast number—who will receive nothing of this and can be even more upset by it. If one is faced with a situation such as that. I think one is entitled to look at the financial costs, bearing in mind that we can never afford what we would all like to do. What I fear will happen is that the Treasury will not honour the cost of doing what is down in the Bill, and where will the money come from?
The money will come from the housing grants. There will be fewer houses. I find it extraordinary that the Government should be so concerned with this little problem when unfairness, I fear, is far greater in the wider field.
Lord Moyne: As one of those who spoke against
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giving the right to buy their own dwelling to tenants of charitable trusts—declaring my interest as a trustee of one of them—I should like to support the principle underlying the proposed new clause. It fulfils the Government's promise not to reintroduce the old proposal which would have been so hard on the trusts. I understand that it ingeniously gives an equivalent subsidised opportunity for publicly-funded trust tenants to buy on the open market. I say "ingeniously" because of the point which has not been mentioned but comes out of what is in the clause, because of the mechanism devised of using a non-charitable association to channel housing association grants subvention to do a job outside the scope of charitable trusts. The Minister may like to say a word about this presently.
Trustees must welcome the advantage for their tenants, particularly the fact that vacancies will be created to he filled from their long waiting lists. But they must have anxiety about the long term effect on HAG funds available for future building development. The Minister has made up the funds to take account of the expected purchases and it is to be hoped that he will keep an eye on this aspect as time goes on.
I am bound to say that I find the drafting of the clause far from crystal clear. It says nothing, except by reference to previous Acts of Parliament, of the trust tenants' opportunity to secure financial support from HAG funds in purchasing an outside house, only that the Secretary of State is permitted to pay housing association grant to a non-charitable housing association which buys and re-sells a house to a trust tenant. The clause reads almost as if the housing association might have to go out to do the house-hunting, but surely the intention must be for the housing charity to tell the tenant how much would be forthcoming in discount towards his proposed purchase, so that he could find a house that suited him and which, with the discount, he could afford. As I understand it, the discount would be calculated by the charitable housing association, but the transaction would be seen through by the non-charitable association.
I wonder whether it should not be made clear beyond peradventure that charitable tenants on acquiring outside houses should have to vacate their existing dwellings. Assuming that the complicated wording of the clause is necessary to set in motion the financial mechanics of the purchase on the open market, would not the Minister consider inserting on Report something that tenants could more easily understand? Could not the clause begin by describing the opportunities to be given to publicly-funded tenants of charitable housing associations for HAG-supported purchases on condition of their moving out when their new dwellings became available for occupation? While finding the present drafting of the clause a little obscure, I very much welcome the principle which lies behind it.
Baroness Denington: I should like to answer the point raised a few minutes ago about whether the young couples who are struggling to raise the deposit on their first house could not go into the charitable houses left vacant by the people able to move out of those. I can only speak from my knowledge of my

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membership for a number of years of the Sutton housing trust, which is a charitable trust. The Sutton housing trust has a rule which it holds to rigidly that it may only take into its dwellings people who are really poor, who are very poorly paid and who are among the lower and more unfortunate members of our society. The trustees hold to that; but they also regularly review the position because about every two years a new trustee may ask about the people in the dwellings who have got on well in life and who now have money. The trustees consider whether we ought to turn them out of our charitable dwellings. The trustees regularly consider the matter deeply and decide that they cannot really turn them out.
These are the people who, if this is passed, will take up the Minister's offer. They will buy in the open market. But the point I am trying to correct—and one or two of your Lordships were rather carried away by the thought that the dwelling would be empty for someone else to come into—is that the dwelling will only be empty for someone very poor to come into. It will not help the young couples who are in a position to be gathering their mortgage. It will, of course, help somebody lower down but not the young couples.
The Earl of Enniskillen: Before the noble Baroness sits down, is that not the precise point that we are trying to get to?
6.40 p.m.
Lord Molson: In view of the fact that I voted on each occasion against the Government on the last occasion, I think that perhaps I ought to say a few words to explain my position this afternoon. I did not think that the Government were wise in introducing this provision in another place after having accepted the decision of your Lordships' House that the right to buy should not apply to the tenants of charitable housing trusts. I largely agree with the views expressed in the article in The Times today. I do not think that there is justice in making these contributions, these charitable gifts, to a selected number of tenants. On the other hand, I have listened with close attention to the speech of my noble friend the Minister.
I said in reply to a question from the noble Lord, Lord Northfield, last Tuesday that, in drafting our amendments, the noble Lords associated with me and I myself were not influenced by considerations about the discount. We were solely concerned about trying to preserve housing which was specially suitable for disadvantaged classes in the community. I want to stand entirely by that statement that I made on behalf of the noble Lords, some on the other side of the Committee and some independent Cross-Benchers and myself.
Without changing my view that the Government were unwise in introducing this special machinery to enable the tenants of charitable trusts to go out into the open market and use money paid for the by the taxpayer in order to acquire houses in the general market, I feel that my noble friend the Minister has drawn a very clear distinction between the preservation of the houses for disadvantaged people and the provision of money in order that the disadvantaged people occupying those particular houses should be able to find alternative accommodation. I am also very much influenced by a very careful study that I have
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made of the indications made by my noble friend in his various speeches of the willingness of the Government to look sympathetically at the amendments which we moved. I would point out to him that these concessions, these hints at concessions, were made only towards the end of his speeches when it was impossible for one to consider to what extent he had gone to meet the points of substance which we had put forward in or our speeches.
I am waiting anxiously to know how far the Government are prepared to go in order to meet points which he was good enough to say he regarded as substantial. I feel that if the Government are prepared to go a considerable distance in order to meet the point which we sought to establish by our amendments, then perhaps I ought to go as far as I can in supporting a new clause with which I am not entirely in agreement, but to do so in the general interest of trying to arrive at an agreed settlement upon this matter.
The noble Lord has mentioned on two occasions that he has not been convinced of the wisdom or justice with which your Lordships rejected the proposal that there should be a right to buy in the case of tenants of charitable trusts. At the same time, while saying that he does not accept the justice of that, he has responded and the Government have responded to the decision of this House by not seeking to reintroduce and have promised not to try elsewhere to reintroduce a provison of that kind.
Naturally, I speak only for myself and not for anybody else, but while saying that I do not approve of the new clause which is being moved, as the Government have indicated that they are prepared to go a considerable distance, although we do not know how far, in order to meet the points of substance which we have made in seeking to preserve the dwellings of disadvantaged people—and, I would also add, in treating specially the charitable trusts—just as they were prepared to meet us over the question of houses occupied by tenants from charitable trusts, I hope they will also be prepared to carry this principle of special treatment of charities as far as we asked for in the amendment which was moved by my noble friend Lord Selkirk and which was carried by such a large majority in your Lordships' House. I hang in the balance as to where honour rooted in dishonour stands and as to whether I should abstain; but, on the whole, and in the hope of a generous response from the Government to our amendments which were carried last week, I am prepared on this occasion, against (shall I say?) my own prejudices, to go into the Lobby in support of the Government.
Lord Dean of Beswick: The noble Lord the Minister said when he moved this clause that it was a very detailed one and one which would require some understanding. I must pay my respects to him in saying that I think he tried to explain it in detail, but he must not be surprised if the whole exercise is viewed with cynicism by some people involved. This is the second time that this piece of legislation has been before another place and this Chamber, and it seemed strange in another place when, after a substantial number of hours had been taken on this Bill in Committee, this new measure—which is an implementation of the existing policy, but by another

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method—was introduced at the eleventh hour, when there was no time at all to debate the very complex problems which the Minister has explained today.
While there may he some justification for saying that nobody will be hurt in the process, it seems odd that under this system people can go into this type of house and, after two years' tenancy, pick up £6,000 for having been a tenant in a house which has been provided mainly by public funds. It seems an odd set of priorities, when we have youngsters—and I have youngsters of my own as, I have no doubt, have other noble Lords—who are struggling to get money together for a down payment on their first, perhaps very modest purchase, to have a measure like this being brought in at the end of protracted discussions on the Bill.
One point which I should like to put to the Minister is the question of finance. I think I heard the Minister say that finance will come from the Housing Corporation's allocation. May I ask him whether the Housing Corporation was consulted about the fact that its annual global sum would be diminished by the money required to finance this scheme, or was it just told about the measure? Lastly, can the Minister give an undertaking that further deliberations in this Chamber may take place in order to look into a very complex financial problem?
Lord Broxbourne: May I—
Lord Monson: Despite the many reassurances given by the Minister this afternoon, particularly on such matters as the discounts applicable when a cheaper house than that which he or she already lives in is bought on behalf of the tenant under the scheme, and which marginally improve the amendment in relation to how it originally appeared to a layman, I am afraid that I still think that The Times got it more or less right today.
The noble Lord. Lord Bellwin, said on 28th February at cols. 1230–31 of the Official Report in reply to the noble Lord. Lord Molson, that he thought that, in practice, grants would be more like £10 million than £600 million. There are two points to be made here. First, would the Minister not agree that, in theory, the £600 million figure could be reached? Statute law must surely cater for what might happen in consequence of legislation, as well as for what is expected at this particular moment to happen. Secondly, if the Government are right about the £10 million, then mathematical calculations lead one to suppose that only a lucky 1½ per cent. of charitable housing association tenants—that is, the richest 1½ percent.—will be able to benefit from this largesse; largesse which is bestowed, indirectly, by the taxpayer.
Very well; but is it right that this 1½ per cent. of tenants in England and Wales—because, for some reason, the scheme does not apply to Scotland—should be placed in such an advantageous position, not only vis-á-vis their poorer neighbours in charitable housing association accommodation, but also vis-á-vis aspiring owner-occupiers, particularly young couples and first-time buyers who are struggling to save for a deposit, and visa-á-vis council tenants and tenants of non-charitable housing associations,
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who cannot enjoy the triple benefit of a cash bonus together with both choice of property and choice of location?
At a time when the Government are so hard up, evidently, that postmen are now being required to pay tax and national insurance on non-existent Christmas boxes, would it not save public money, and be altogether fairer, if the cash sum to which certain tenants would be entitled under this amendment were to be reduced by, say, 20 per cent., so that the maximum would reduce from £25,000 to £20,000? They would still be getting a very good bargain, as I am sure the Minister will agree. Would the Minister consider withdrawing this amendment this afternoon and resubmitting it at Report stage in a modified form, to make it more acceptable to the House and to the public at large?
Lord Broxbourne: May I start what will be a mercifully brief intervention by expressing my apologies to the noble Lord, Lord Monson? I hope that he will acquit me of any apparent discourtesy in not giving way to him more promptly and will attribute it, as is the fact, merely to my ignorance of the practice of this place. I hope not to make that particular error again. I was glad that I did not challenge the noble Lord because of the excellence of his speech in addition to the question of the practice of this House.
Like my noble friend Lord Molson, but with much less hesitation, I certainly intend to support this new clause. But I should like to ask one question of my noble friend in the context of one of the main criticisms to which this proposal has been subjected. The short point about the article in The Times to which so much reference has been made, if I interpret aright its stately and sonorous language—if it is possible for stately and sonorous language to have a short point—is that there are two related criticisms here; first, the looseness and complexity of the drafting and, secondly, the vulnerability of the public purse. It is in regard to that second matter that I wish to raise a question with my noble friend the Minister.
The question of the safeguarding of the public purse seemed to be in the mind of Parliament when they enacted the principal statute, the Housing Act 1974, in the machinery which Section 29 prescribes for the determination of grants. By Section 29(5), there is, as my noble friend so well knows, a power of ministerial determination of maximum grants and more than that cannot be paid. That provides an inbuilt statutory protection for the public purse which even The Times, I think, would recognise.
I am not heeding the exhortation in The Times of the House of Lords to smoke out Lord Bellwin; I should not dream of embarking on so unnecessary and disrespectful an exercise. I think the Committee will recognise that he has done a very considerable self-fumigatory exercise in his notable speech, and in the detailed and helpful explanations this afternoon, for which I am sure we are all most grateful; I certainly am, and I will study them more closely in print. But a determination made under Section 29(5) becomes part of the statute law and is binding. I am wondering therefore whether the Minister has considered in this case making a determination, because determinations can, as he knows, be either general or particular in

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their content. The Minister may consider that it is unnecessary or that it will not fit the mechanism of this particular case. Because of his much greater knowledge of the matter, I certainly accept his judgment on that point, but he may think that there would be advantage, particularly in view of the criticism which has been expressed by The Times and others, in at least exploring the possibility of a determination. As the Minister knows, a determination requires, under the Housing Act 1974, prior consultation with bodies which appear to be representative of the housing associations—in this case, I would assume, the federation. That itself, I should have thought, would have certain advantages in the context of this matter. I apologise for having put my question at some length, but at least I have asked only one in contradistinction to the noble Baroness opposite with her quiverful of questions.
Lord Northfield: I wonder whether the noble Lord, Lord Bellwin, recognises that there is a certain illogicality about part of what he has said to the Committee this afternoon. He said that he accepted the sensitivities of the charitable housing associations and recognised to some extent their anxiety about keeping their stock at its present level and not having to reduce it, so that they can continue to cater for the particular classes of people whom they house. The noble Lord said that because he recognised the sensitivities and the needs of the charitable housing associations he had found some extra money.
The noble Lord who spoke from the Liberal Benches has not noted what the noble Lord, Lord Bellwin, said at Second Reading. He said that he would offer extra money to the housing corporations, which he would provide through the mechanism of this clause, in order to solve their problem. They will not have to sell their houses in the way that they fear and their stock will therefore be kept intact. This is precisely the case I put to the noble Lord last week about old persons' dwellings. I said to him that if he would only offer to ensure that money was provided in some form in order to prevent the stock of old persons' dwellings being reduced we should all be very happy to go into the Lobby with him. I said that the Minister ought to say that as fast as houses are sold he would make sure there is a really energetic programme for housing elderly people through the public sector, where housing is needed, and that he would find the extra money with which to keep up the stock.
I freely admit that the noble Lord did not reply to that, but in ignoring what I said—I am not charging the noble Lord with anything, as I am sure he will accept—I suspect that he was dismissing my argument. I have to put it to the noble Lord that, if he had made that offer last week, he would not, I believe, have lost the Division. If he had said that he fully understood the need to keep up the stock of old persons' dwellings, everybody in the Committee would have been happy to let his original proposals go through.
A noble Lord: Not everybody.
Lord Northfield: No, perhaps not everybody, but most people would have been happy. I get some support from my noble friend on one side, if not from
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everybody. All I am saying is that there is a certain illogicality in the position adopted by the noble Lord, Lord Bellwin, and I hope he will respond to this point.
Nevertheless, let us look at the prime point which the noble Lord is making in this amendment. It is worth stating again that the noble Lord is saying that the Government's aim is not to disadvantage people who have, in effect, got their money through the Government. This is public sector provision of housing in another form. The Government do not want to discriminate against somebody who has obtained his money through a housing association and who would have had the right to buy if, by accident, he had instead been the tenant of a council dwelling. That is an overwhelming argument. In other words, it follows through the logicality of saying that where public money is involved the Government need to complete the totality of their policy by giving these people the right to buy. That, so far as I am concerned, overwhelms all the other arguments and for that reason my sympathies are with the Government.
Lord Hylton: The noble Lord the Minister and the Committee know that I have very considerable reservations of principle both about the 1980 Act and about this Bill. I shall mention only one reservation. The 1980 Act took away from local authorities and non-charitable housing associations all discretion whatsoever over the right to buy. The Government now propose to take away all discretion from charitable associations. However, that is not the main point I want to make tonight. Instead I wish to look at the detail of the amendment. My concern is that it is going to place a considerable administrative burden and extra costs upon the charitable associations, which may, I fear, divert them from their main purposes. The larger associations employ paid staff. They are very capable and qualified people, but on the whole they are under extreme pressure and already are very highly stretched. The smaller associations, on the other hand, rely to some extent—and some of them to a great extent—on voluntary staff. They will have to face even greater problems.
The noble Baroness, Lady Nicol, mentioned legal fees. There will be two sets of legal fees: one on the purchase, the other on the resale. Who will hear those fees, I wonder? The distance from the original dwelling of the qualifying tenant has also been mentioned tonight. The further away he is encouraged or allowed to buy the greater will be the administrative problems that follow. It would be very much better if, instead of the amendment as drafted, there were an amendment which put the whole onus upon the tenant, first to find the property and secondly to arrange to finance it, and only then would he receive the benefit of the discount money, which could be paid to his solicitor after exchange of contracts.
I should also like to follow up the point raised by the noble Lord, Lord Moyne, about whether or not housing trusts are covered by subsection (4) of the amendment as well as industrial and provident societies, which are mentioned in the text.
The Earl of Selkirk: I am grateful to the Government for not trying to put back the clause which we took out last time. I do not deny that it is a rather clumsy way of getting round it. The essence of

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the problem was expressed by the noble Baroness, Lady Denington. She asked: what are we doing here? We are putting out of charitable housing associations those who can afford them. That is right. It is right because charitable associations deal directly with the homeless—those who demand most from us and who deserve most attention from us. They put out those who can afford this housing. Not very many of them can. There are some, like single parents, who marry well. This does happen. They can go out, and it is right that they should go out; they should not remain in these associations. That is not what they are there for. I hope, therefore, that the Committee will support the amendment. Whether or not we make amendments to it I do not know. I do not believe that this will happen very frequently. I do not know what the figures are. However, I guess that the number of those who take advantage of this amendment will be comparatively small. Nevertheless, this is a genuine effort to meet what we had in mind, and on this occasion I hope the Committee will support the Government.
Lord Bellwin: The problem always is how to respond in a reasonable period of time to the many points which have been made. In doing so, one always disappoints some of those who have made contributions. I am grateful to everybody who has spoken. The debate has been of a particularly high order. I ask in advance to be excused if I do not cover all the points which have been made. If I miss any important points I shall write to noble Lords and carry the debate further outside the Committee.
The noble Baroness, Lady Nicol, said that this was a great injustice and would do harm to others who were trying to get money to buy their own homes. She spoke about the effect on house prices and said that it would lead to inflation. What are we talking about? We are talking about some 100,000 eligible tenants and the likelihood, as my noble friend Lord Selkirk has just said, of perhaps 2,000, 3,000 4,000 or 5,000 of them buying. Is it seriously proposed that even 5,000 purchases will create inflation over the whole of the country in the housing market? I do not believe that at all.
The noble Baroness asked a number of questions which would take me some time to answer. I will pick up on one or two of them but will answer the others in writing. There will not be a geographical limitation on the movement of tenants to other areas, and they will have to find their own homes. This was a point raised by several noble Lords. As to the rest of the detail, if the noble Baroness will bear with me, I will pick up her points in writing.
The noble Viscount, Lord Hanworth, said that the Treasury will not honour the arrangement, and he asked where the money is to come from. The noble Viscount was not listening. The noble Viscount is not in his place, but he cannot have been listening to what I was saying. I was at great pains to explain exactly where the money was to come from, and I will return to that point in a moment.
I am very grateful to my noble friend Lord Moyne and thank him for his support. I know how deeply he felt, together with other noble Lords, when we discussed Clause 2 of the old Bill. I am especially
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grateful to him and to my noble friend Lord Selkirk for saying what they did about what is now proposed. I take the point which he and my noble friend Lord Broxbourne made about the drafting of the clause. The clause as drafted provides no more than an enabling power primarily concerned with the Secretary of State's grant-paying process. It does not set out to show how the scheme will work. That will be done administratively. I hope that I explained in my opening remarks how I expect that to operate.
My noble friend Lord Moyne absolutely picked up the point made by several noble Lords and by the noble Baronesses opposite. He made for me the point that is fundamental to this whole argument. While protecting the housing associations' accommodation, we are seeking at the same time to give those tenants who are disadvantaged because we would not go forward with Clause 2 an opportunity to buy. That is what it is all about, and no more. I take my noble friend's point about making this clearer on Report. I shall try through conversation and correspondence with him to clear up that aspect.
The noble Baroness, Lady Denington, spoke about the people who are poorly paid and asked about those who have got on; she asked about turning them out. She said that the dwelling will only be empty for someone who is very poor. But that is the whole essence of charitable housing accommodation. If it is not for people who are very poor and who have difficulty in finding other accommodation, then who is it for? If that is not the definition, then it is nothing. I respect the views of the noble Baroness on this subject, even if I do not agree with her, but I believe that her argument falls on that point.
I was grateful to my noble friend Lord Molson. I know of his reservations about certain matters that we discussed on the first day of Committee. I try to raise points which are raised in Committee and I will go on trying to do so as best I can. The Committee knows I try to do so with all the legislation I take through. I am grateful to my noble friend for his support, despite the reservations I know he may have.
The noble Lord, Lord Dean of Beswick, said that there had not been enough time to discuss this aspect in another place. I cannot take the responsibility for that, as I am sure he knows. As the noble Lord put a question, I should like to answer it and make this point clear to all noble Lords. The £10 million is additional money. When the discussions were taking place with the Housing Corporation, it was made quite clear that this would be additional money. I give the noble Lord that assurance. If the wants to pursue this point with me in detail after, I shall be pleased to do so.
The noble Lord, Lord Monson, still persists with his figure of £600 million. I wish that I were a betting man because I could make a pretty penny by working out some shade of odds there. The noble Lord says £600 million and I say £10 million. The federation says that it will be £14 million. I will split the figure with the noble Lord at £20 million. Let us be serious. The noble Lord said that this was largesse for the richest of the tenants. By definition, if one is a tenant of a charitable housing association how can one be described as "rich"? Have we lost all sense of proportion? These people are not rich; they are people who aspire to have

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something and to use part of what they have towards a home of their own. That is all they are, and I see nothing wrong in that.
My noble friend Lord Broxbourne questioned the looseness of the drafting. I hope he will feel that what I said to my noble friend Lord Moyne to some extent answers his point, too. He asked specifically about the maximum discount. I followed exactly what he was saying. We intend to tie the maximum discount to that available under the right to buy. We propose that the maximum grant shall be £25,000. We do not propose to make a specific further determination under Section 29(5) of the 1974 Act but we are prepared to consider this point. If my noble friend would like to pursue it later, then I should be very glad to do so with him.
The noble Lord, Lord Northfield, picked up a point made in debate last week. Was it last week?—it seems a long time ago to me. The noble Lord said that if only we would give extra money for the old persons' dwellings he and his noble friends would have gone through the Lobbies with us. I have to say that I doubt it. I see from the nodding of heads opposite that I am more right than is the noble Lord. Let us acknowledge the fact that there is a clear division of thinking about the right to buy. Let us not be ashamed of saying what it is. The noble Baroness, Lady Birk, said the other week that we are obsessed with our determination to further the right to buy. The noble Baroness is right. Just as noble Lords opposite are equally obsessed with denying the right to buy. That is the real issue and that is what we are really talking about.
In reply to the noble Lord, Lord Hylton, the onus will he placed on the tenant to find the property, and that is what we intend as a result of what is in the Bill. The noble Lord said this will place an extra administrative burden on housing associations. I can only say that this is one of the purposes to which they will put some of the extra money they will be getting for this purpose.
I am very grateful to my noble friend Lord Selkirk because I know that, like my noble friend Lord Molson, he, too, has reservations. But this whole argument is about the principle of the right to buy. Noble Lords opposite do not like what we are proposing. They do not want us to give the elderly the right to buy. I do not know where that is going to end up. They did not want us to give the disabled the right to buy. They do not want us to give the tenants of non-charitable housing associations the right to buy. The top and bottom is that they do not want people to have the right to buy. I respect that point of view even if I disagree with them. I hope that noble Lords will support the Government's proposals. I believe that they are merited in all justice and in all equity.
Lord Graham of Edmonton: May I first apologise for the absence of my noble friend Lady Birk, who has to be elsewhere. If she had been here, I believe my noble friend would have shared in the views of the Minister when he said that this had been a fine debate. But I do not believe the Minister would be sensing the mood aright if he were to say that there was certainty and complete unanimity even on his own side over this issue. What in fact emerged, even from the remarks of his noble friends, was perhaps grudging acknowl-
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edgement that somehow or other he had escaped from the decisions on charitable housing that had been taken earlier.
Words such as "astute", "clever" and "he managed to find a way to look after these tenants" have been used. As far as we are concerned on this side of the Committee, we are far from satisfied that what the Minister proposes in this new clause is right, just or equitable. The Minister seems to be besotted by the fact that there is a class of person in our community entitled to preferential treatment. That class of person consists of the tenants of public housing. If one is a tenant of a council house, ipso facto one is entitled not only to the right to buy but to pay half the price of that which you want to buy. If one is a tenant of a charitable housing association, not only is one entitled to buy, and entitled to buy at half price but one is also entitled to buy the house of one's choice—
Lord Mottistone: Is it right for a noble Lord, from whatever Bench, to speak after the Minister who is moving the amendment has made his final speech? It seems to me to be most unusual.
Lord Graham of Edmonton: I certainly bow to any noble Lord in this Committee who clearly has longer service than I have—and that includes almost everyone. However, I have been an assiduous watcher of procedure in this place since coming here and I would say to the noble Lord, Lord Mottistone, that my observation is different to his recollection of how these things proceed. I get the sense of the Committee that I am doing nothing wrong even though there will be some dubiety about what I am going to say.
We, on this side of the Committee, fail to see why tenants of charitable housing are to be given what has been described more than once as a free handout—£4,000, £5,000, or £6,000—and then be able to go on to the open market. The Minister and his supporters may believe that this will be a mere ripple and that it will not disturb the market at all. I can tell him that that will not be the case. Whenever there is a house for sale for, say, £30,000 which a young couple who are after the house, are struggling to pay, along will come the tenant of a charitable housing trust able to say. "Yes, that is the house I want. I know it costs £30,000 but I am well able to afford it. Didn't you know, I have a grant of £4,000, £5,000 or £6,000 towards it?" Does the Minister believe that, once the detail has emerged and the reality is established—with a special class of house-hunter on the market containing those who have been fortunate enough to be tenants of charitable housing for 10 or 20 years, who have had good landlords because their landlords have been charities and who, in addition, have in their pocket a cheque potentially worth £5,000 or £6,000—it will not have any effect? If the Minister believes that this will not disturb the social equilibrium, then his justice and his view of what will happen is different to mine.
As far as this side of the Committee, is concerned, we are not prepared to support, as many of his noble friends are, the words which appear on the face of the amendment. When my noble friend Lady Nicol spoke, she indicated that there was a range of details which the House had not heard; general principles, yes, but a range of details that had yet to be placed before us.

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Although there are people who have heard them and agree with them, we on this side of the Committee have a great many questions that remain to be answered. What action we take on Report and the amendments that we move at that stage is another story. As far as we are concerned, we are not prepared to vote for this amendment.
On Question, amendment agreed to.
Lord Skelmersdale: I hope that the Committee will consider this an appropriate moment to break for supper and to go on to other business. I see the Opposition Chief Whip looking at me and I suggest that we do not return to this current business until twenty minutes past eight o'clock, if that is convenient to the Committee.
I beg to move that the House do now resume.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.

Disabled Persons Bill [H.L.]
7.25 p.m.
Lord Campbell of Croy: My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.
Moved, That the House do now resolve itself into Committee.—(Lord Campbell of Croy.)
On Question, Motion agreed to.
House in Committee accordingly.
[The LORD HAYTER in the Chair.]
Clause 1 [Constitution and proceedings of the Commission]:
Lord Kilmarnock Lord Kilmarnock moved Amendment No. 1:
Page 1, line 8, leave out ("four") and insert ("eight").
The noble Lord said: I think it might be for the convenience of the Committee if I speak also to Amendments Nos. 2 and 3 which are all part and parcel of the same purpose.
Amendment No. 2: Page 1, line 9, leave out ("six") and insert ("ten")
Amendment No. 3: Page 1, line 9, after ("members") insert ("(of whom not less than four shall themselves be disabled and whose various disabilities are those to which the Act applies) who shall be")
I have not previously spoken on this Bill. I was unable to be present on Second Reading so I could not, at that time, express my general sympathy for it, Despite that general sympathy, I have one or two reservations about the drafting. As at present drafted, the Bill makes no suggestion as to the composition of the Disablement Commission except in Clause 1(3) which specifies:
"Members of the Commission shall be appointed in their personal capacities and not as representatives of particular organisations."
This may be designed to ensure that organisations representing the disabled do not dominate the commission and there is no doubt a case can be made out for that. The noble Lord, as a former Secretary of State, doubtless has great experience in this field. However, if organisations are to be excluded as such,
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it would seem to me highly desirable that some disabled members should be included "in their personal capacities", to use the phrase in the Bill. I also believe that it is important that disability should not just be talked about but should be made apparent in the physical presence of disabled members on the commission.
The small size of commission, suggested by the noble Lord, Lord Campbell of Croy, in the Bill, while not making it impossible for the Secretary of State to appoint one or more disabled members, rather inhibits the choice from among the disabled and also the range of disabilities. The amendment would permit a membership of eight eventually to be picked by the Secretary of State and allow an equal balance between disabled and non-disabled. There are precedents for such an arrangement. As the noble Lord, Lord Campbell of Croy, will recall, there once existed what was called the Minister of Health's Advisory Committee on the Health and Welfare of Handicapped Persons. A number of handicapped persons served on that committee. It was disbanded in 1971 with the advent of the Personal Social Services Council; a much larger and more representative body with a much wider brief which accomplished a whole range of personal social services and which also included some disabled members. Regrettably, the Government in their first quango hunt killed off the PSSC along with a number of other perhaps less deserving bodies.
To many people "discrimination" is just a word embodying a concept which it is hard to pin down. Such people might find great difficulty in judging in what circumstances discrimination occurs and even greater difficulty in assessing what for the purposes of this Bill is termed "unjustifiable discrimination". Who better, therefore, in my submission, to serve as members of the commission than a few people who, because of their own disability and their experience, know exactly what discrimination against the disabled means and can assess whether or not such discrimination might be justified.
I want to be constructive. This is a matter of judgment. I am not claiming that I have the balance immutably right. But I hope very much that the noble Lord, Lord Campbell of Croy, the promoter of the Bill, will think carefully about what I have said as it proceeds through its stages and perhaps be inclined to favour the amendment in some measure. I beg to move.
Lord Campbell of Croy: I think that it would be convenient if I spoke now to indicate what my intentions have been in the Bill. I think that the noble Lord, Lord Kilmarnock, was speaking to Amendments Nos. 2 and 3 as well as to Amendment No. 1. I see that his first two amendments, which would have the effect of making the commission larger, are in fact related to his third amendment, which requires that at least four members of the commission be disabled persons. I have no difficulty in accepting amendments which would make the commission a bit larger. As I think your Lordships know, my intention had been that the commission should be small and inexpensive. A number of the objections which were raised on Second Reading and

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on other occasions were that people did not want a new large commission. Mine certainly is small, as in this Bill.
I would draw attention to Clause 1(3) which makes it clear that there is no question of the members of the commission having to be representative of the chief bodies in this field. Once you accept representation of the many bodies which are concerned and active, you would have claims which might bring the number to 30, 40 or more. In subsection (3) it is absolutely clear that it is to be a small commission, naturally with wide experience and ability, but not one which was trying to represent particular bodies.
I now come to Amendment No. 3. If the total number of members on the commission was to be eight, under Amendment No. 3 half that number would have to be disabled persons. That might well fit in. But to require at least four members—and half, if the commission is to have eight members—to be disabled persons places a restriction on the composition of the commission. In certain circumstances I believe that it would hamper the Secretary of State in achieving the best possible group of members.
We cannot now foresee the possible combination of talents and experience which might be available when the commission is being established. It could be that the Secretary of State and the country might have to lose the chance of an eminently suitable person who was available and prepared to offer his or her services being made a member of the commission because the quota of able bodied persons had already been used up. It there were to be a requirement such as that put forward, for at least four of the members being disabled persons—and from the drafting of the amendment they would have to be people with serious disabilities—I would suggest a figure of two rather than four. If at least two members were disabled, that should be enough to provide at least the practical experience which the commission would need. That would be particularly so if they were of different categories of disability, perhaps one a wheelchair person and the other a person with a quite different disability. But I think that to stipulate that at least four of the members have to be disabled persons would cause an unnecessary restriction.
I shall say no more now. When we come later to amendments concerning the membership of the commission I wish to say something about giving the Secretary of State and the other Ministers concerned as wide a discretion as possible to secure the services of the most suitable people and therefore get the best possible commission. But I think that to provide that as many as four members have to be disabled persons would perhaps be going too far.
Lord Ennals: I had hoped perhaps that the noble Lord. Lord Campbell of Croy, would have accepted the amendment proposed by the noble Lord, Lord Kilmarnock. I do not at all take his view that it would be a restriction on the Secretary of State. After all, on CORAD, of which Mr. Peter Large was chairman, roughly half the members—whether it was exactly half or slightly more I am not certain—were disabled people. In many organisations—and I am thinking epecially of Motahility—the contribution of disabled people and their various abilities are outstanding. The
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Secretary of State would have no difficulty at all in finding four people who would he representative of a wide variety of interests and different types of disability.
Lord Campbell of Croy: I was not suggesting that it would not be possible to have four disabled members. The Secretary of State may be able to appoint six or eight members who are disabled persons. I just say that in certain circumstances the provision might be restrictive. There is nothing to stop the Secretary of State from appointing a commission every member of which was a disabled person. But the restrictions might mean that in certain circumstances he could not achieve the best possible combination of talents and experience.
Lord Ennals: If the Committee wants there to be a rough balance between able bodied and disabled people, the best thing is to say so in the Bill. If the amendment was not accepted, it would he perfectly possible for whichever Secretary of State it is—and we shall come to an amendment on that in a moment—to appoint only able bodied people. I think that that would be a mistake. I hope that before we come to the Report stage the argument put forward by the noble Lord, Lord Kilmarnock, will he seen to find favour with the promoter of the Bill.
Baroness Darcy (de Knayth): I should like to speak briefly in support of the amendment of the noble Lord, Lord Kilmarnock, as it reads at present. But I wonder whether otherwise there might possibly be a compromise. I think that in the Chronically Sick and Disabled Persons Act, when dealing with the representation of disabled people on committees, mention is made of the desirability of having members who are themselves disabled. I wonder how the noble Lord, Lord Campbell of Croy, would look upon that.
Lord Campbell of Croy: I should be very happy to accept that. As I have indicated, I should be happy to put down an amendment at Report stage in the terms of that of the noble Lord, Lord Kilmarnock, but with the figure two rather than four, simply because once the provision is in the Bill it has to be followed. But there is nothing in the Bill to stop the Secretary of State from appointing four or more disabled persons if in his opinion that seems to be the sensible thing to do.
Baroness Masham of Ilton: I should like to ask the noble Lord, Lord Campbell of Croy, exactly what powers the commission will have. I rather agree with him that one does not want to impose a limitation. If the commission's powers are to be quite strong, it might be important to have on it people with legal experience to sort out any problems. That is the point which I should like him to answer.
Lord Campbell of Croy: This point really comes up under Clause 2, but I entirely agree with the noble Baroness, Lady Masham, that there would certainly have to be at least one member of the commission—and probably more than one—who, among other things, had the legal knowledge to help the commission.
Earl Attlee: I should like to support my noble friend Lord Kilmarnock. The commission may have to look at important business, and with a small commission of only four or six members, there need only be illness, pressure of business or holidays and the odds would be against there being a sufficient number to carry out the business. That is all that I wanted to say.
Lord Campbell of Croy: If I may just recapitulate, I am pefectly happy to accept Amendments Nos. 1 and 2, which is the point that the noble Earl, Lord Attlee, has just been speaking on, and I just have this reservation about putting in the fixed number of as much as four in Amendment No. 3.
Lord Kilmarnock: I am grateful to all those who have spoken and to the noble Lord, Lord Campbell of Croy,in particular. As I said in my opening remarks, this is really a question of balance and judgment. The noble Lord referred to greater restriction and to hampering the Secretary of State. The Secretary of State would undoubtedly get a great deal of advice on the formation of a body of this sort and he might in fact appreciate some guidance in the Bill.
I think the best thing to do—and I have listened to the noble Lord, Lord Campbell, who says that he is prepared to bring forward an amendment at the Report stage—and the most practical thing for us to do would be for us possibly to get together and see whether we can agree a joint amendment in which possibly the noble Baroness, Lady Darcy (de Knayth), would also like to participate. I have also listened to the remarks of the noble Lord, Lord Ennals, on the CORAD Report. In those circumstances, I think it would be appropriate for me not to move Amendment No. 3, which is the amendment specifically concerned with the disabled members of the commission. But the noble Lord, Lord Campbell of Croy, has expressed his willingness to accept Amendment No. 1, and on those grounds I beg leave to move this amendment.
On Question, amendment agreed to.
Lord Kilmarnock Lord Kilmarnock moved Amendment No. 2:
[Printed earlier: col. 211.]
The noble Lord said: I have already spoken to this amendment. I beg to move.
On Question, amendment agreed to.
[Amendment No. 3 not moved.]
Lord Campbell of Croy Lord Campbell of Croy moved Amendment No. 4:
Page I, leave out line 10 and insert ("the Home Department, after consultation with the Secretaries of State for Scotland, Wales, Northern Ireland and Social Services")
The noble Lord said: I beg to move Amendment No. 4 standing in my name. Like my other amendments, this is to meet criticisms which were voiced at Second Reading and in discussions elsewhere. With this Bill, I am aiming to provide a more acceptable alternative to the Chronically Sick and Disabled Persons (Amendment) (No. 2) Bill which has been sponsored by the noble Earl, Lord Longford. Within reasonable limits, I would be prepared to put down amendments to meet substantial points that have been made. The other Bill did run into doubts
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and objections. For example, the question whether making discrimination illegal is the most practicable way of proceeding, given the difficulties of defining both discrimination and disablement. The Government have seen objections to the other Bill on that score and I share some of those objections. My object therefore is that this Bill should be a vehicle for making progress against discrimination, and disadvantages suffered in general by disabled people, which can command the widest support.
In the Second Reading debate, and in many of the talks which I have had with people concerned, there was a preference shown for the apppointing Minister to be the Home Secretary, and my first amendment brings that about. This is not simply a health subject but involves the rights and equality of disabled people and others, and humanitarian matters in general. The Home Secretry is the Minister who appoints the Equal Opportunities and Race Relations Commisssions. I have proposed that this be done in consultation with other Ministers concerned. I regard this as important, first because the Secretary of State for Scotland is the Minister for both home affairs and health in Scotland (the Home Secretary's writ does not run there) but he is not responsible for social security. On that, the Secretary of State for Social Services is responsible, both north and south of the Border.
There are aspects of the existing system of administrative devolution which must be kept in mind. This is best illustrated as follows. In the debate on the Second Reading of both Bills on 16th December, my noble friend Lord Glenarthur assured us that the Minister for the disabled had a mandate to cover the whole of the United Kingdom, and I was very glad of that assurance. However, during the International Year of Disabled People, when I was the chairman of the international year for Scotland, the then Minister for the disabled Sir Hugh Rossi announced, in a debate in the other place on 3rd July, a competition including a panel of judges which was part of the international year. From the reading of Hansard and the press reports, it seemed clear that everybody who took part in that debate thought that it covered the whole country but I was suspicious because I noted the judges all came from England. So I wrote to Sir Hugh Rossi on the 20th July 1981 and made inquires. Of course, I then received the answer that it applied only in England. Also in his reply he went on to say that because of the separate health departments, the separate finances for the health departments in Scotland, England—and I think Wales—in this case and in other cases he could only take initiatives and do direct dealings in matters affecting England although he could influence the other parts of the United Kingdom. I give that as an example because that is why the amendment which I am moving makes the Home Secretary responsible but requires him to have consultations with other Ministers who are responsible for home affairs and health in other parts of the country. I beg to move.
Lord Ennals: If it is of any relief to the noble Lord, Lord Campbell, I shall support every other amendment that he has tabled, but I do not want to support this one. In fact, I want to put forward some arguments to seek to change his mind, although I must say that if the noble Lord, Lord Glenarthur, were to

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leap to his feet—which he has not been doing very much of in these debates—and to say that the Government would accept this Bill, because of the amendments tabled by the noble Lord Campbell, then of course I would immediately sit down and say that I would take anything if the Government would accept it. But there is no sign of the noble Lord leaping to his feet. So, in spite of the discussions that the noble Lord has had, quite clearly he has not managed to persuade his noble friend the Minister. So I think it is far better that it should he done by the Secretary of State for Social Services, though I fully agree that he should consult with the Secretaries of State for Scotland and Wales and, of course, the Secretary of State for the Home Office, and I would have thought with the other Government departments that have an interest. There are about nine other Government departments that have an interest one way or another in disabled people, such as the Department of Transport in connection with the organge badge scheme; the Department of Employment, the Department of Education—I need not run through the whole list. But of course he should consult as widely as possible, and maybe the noble Lord would think that it would he wise to have an amendment which says that he should consult. But we are looking at who should take the initiative, and if one looks at the role of the Secretary of State for Social Services, it seems to me that he is the most appropriate Minister.
Most of the provisions for disabled people are the results of DHSS initiatives. This is whether it is in the field of cash benefits, which later amendments will, I think quite properly, remove from the Bill; whether it is the assistance that is given by health authorities to disabled people often in their own homes and with particular types of equipment and aids; whether it is the provision of social service benefits and the assistance of social workers and again under the Chronically Sick and Disabled Persons Act the many forms of assistance that local authorities can provide, and if one also recognises that the Minister for the Disabled is of course a DHSS Minister.
The very fact that Sir Hugh Rossi got it wrong and made a boob is no reason why there should be an amendment. Certainly, in my day as Secretary of State for Social Services, when Mr. Alf Morris was the Minister for the Disabled, not only did he consult other Government departments, but he was also the chairman of the interdepartmental committee involving all the Government departments which, in one way or another, were concerned with disabled people. I am not so much in touch now with how things work in the department. Perhaps this would be a moment for the noble Lord to enlighten us. I hope however that that interdepartmental committee still operates and that it is not a form of quango that has been abolished, as was the Personal Social Services Council. One of the best ways to look at all the needs of disabled people is to have one person who is especially concerned and then to consult all the other Government departments which have a special interest.
I believe that I have certainly proved that the Secretary of State for Social Services, with his Minister for the Disabled, is in the best possible position to know the people who would best serve on the
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commission. It was to the Secretary of State that the CORAD committee reported, and, as I am certain the noble Lord will recognise, most of the initiatives that were taken during the International year were taken by the Secretary of State for Social Services. So I hope that there will perhaps be an amendment to ensure that there is maximum consultation with other departments. But I hope that if it is to be a choice between the Home Secretary and the Secretary of State for Social Services, it will be borne in mind that it is the Secretary of State for Social Services who has the natural responsibility for the welfare of disabled people in this country.
Baroness Masham of Ilton: In a way, I rather feel able to support the noble Lord, Lord Campbell of Croy, because I think that the noble Lord, Lord Ennals, has made a very good point in that he has illustrated that the present DHSS is not interested in disabled people; and sadly there are no Lords a leaping from the ministerial Bench. Perhaps if the responsibility lay with the Home Office—and I know personally the Home Secretary, who is an exceedingly hardworking person—disabled people in this country might he better off.
Lord Campbell of Croy: Well, I make no further comment on that at this stage. I am not surprised that the noble Lord, Lord Ennals, should be taking this line, because he was a distinguished Secretary of State for Social Services and he knows how much there is to be done in that department and no doubt he considers that this responsibility should lie there. But, certainly in the Second Reading debate, there were voices which suggested that the responsibility should lie with the Home Secretary in preference to the Secretary of State for Social Services. But the Secretary of State for Social Services was my first choice, and, indeed, my amendment was put down in order to bow to what seemed to be overwhelming opinion of another kind.
In case there was any misunderstanding, I must point out that what Sir Hugh Rossi was telling me at the time related to departmental budgets and the difficulties of moving money if there is a scheme with prizes which is going to cost money. I am sure that he was co-ordinating on committees and doing all those things. But when one gets to projects and schemes, one runs up against barriers that are no doubt set up by the Treasury. That is why I think, as the noble Lord, Lord Ennals, agrees, it is necessary to bring in other Ministers and ministries.
I do not know whether any other noble Lords wish to speak on the amendment; no other noble Lord seems to be rising to his feet. But if there is an objection from the Opposition Front Bench, I can certainly take away the amendment and think about it, since I could put it down again at the Report stage.
Lord Ennals: I was present during the Second Reading debate and I was not really aware that there was a mass of opinion saying, "We want the Home Secretary". I do not know whether the noble Lord can give any arguments in favour of it; he has not yet done so.
Lord Hylton: Before the noble Lord, Lord Campbell, replies, I should like to put a point to him. Clause 6 states that,
"This Act shall not extend to Northern Ireland"
though I now understand that that is being changed. It had made me wonder why the noble Lord wanted the Secretary of State to be consulted. I am delighted that the Bill is to extend to Northern Ireland, where there are many disabled people, where there is general poverty, and where needs are very great.
Lord Campbell of Croy: The question of the Bill not extending to Northern Ireland (which I propose to explain when we reach the relevant amendment) involved a financial matter, covering the question of pensions and benefits when, in fact, they were in the Bill. But that situation will not continue, since I hope that my amendment to extend the Bill to Northern Ireland will be passed when we reach it.
In view of what has been said from the Opposition Front Bench, I certainly will not press this amendment. I noted some comments made during the Second Reading debate. I have also had many comments from people who took part in the Second Reading debate, as well as from people who are concerned with the subject, who did not take part in the Second Reading debate, but who, in meetings upstairs and elsewhere, have told me that they would think the Bill better if the Home Secretary were the appointing Minister. In particular they referred to the Home Secretary's role (which I mentioned right at the beginning) with the race relations commission and the Equal Opportunities Commission, on the basis that this type of discrimination question comes into that kind of category. I shall not start an argument about that, and I think that at this stage the best course would be for me to withdraw the amendment so that I shall be able to talk about it to those concerned and then consider whether I should table it again at the Report stage. I see that the noble Lord, Lord Banks, is rising to his feet.
Lord Banks: I wish to say only a few brief words and to support what the noble Lord, Lord Campbell of Croy, said when he described what took place during our Second Reading debate. I was certainly one of those who suggested that it might be better for the power to be exercised by the Home Secretary, on the very grounds that have been given by the noble Lord, Lord Campbell. On that day, since we were also considering the Bill brought forward by the noble Earl, Lord Longford, we were concentrating on discrimination and outlawing discrimination, and it seemed that there was a case for having all of the Government apparatus (if I may so call it) dealing with that under one roof and that it should be within the Home Office.
I believe that there is still a case for that, though this particular Bill is in a way divided between discrimination and disadvantages; and, of course, disadvantages go much further and may be linked to considerations other than those which moved us when perhaps we had the other Bill in the forefront of our minds. However, I think it is worth considering the matter further and bearing in mind the desirability of having all powers dealing with discrimination handled by the one Minister.
Lord Campbell of Croy: I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
7.59 p.m.
Baroness Darcy (de Knayth)Baroness Darcy (de Knayth) moved Amendment No. 5:
Page 1, line 15, after ("the") insert ("chairman and").
The noble Baroness said: This amendment was originally no more than a probing amendment to learn a little more about the kind of people whom the noble Lord, Lord Campbell of Croy, envisaged having on the commission. I put down the amendment long before the noble Lord, Lord Kilmarnock, put down his amendment to extend the size of the commission. Under the Bill as at present drafted, only the deputy chairman has to be full-time, though the other members can be full-time. I feel that now that the commission is to be larger, perhaps we should have two full-time members, and perhaps the noble Lord, Lord Campbell, will agree. I do not feel that one of them should necessarily be the chairman, though perhaps he would be the most suitable. I look forward to hearing what the noble Lord, Lord Campbell, thinks. I beg to move.
Lord Campbell of Croy: I am grateful to the noble Baroness for raising this point for clarification. I think that it would be useful if, at this stage, I indicated the purpose of the Bill. I am perfectly willing to listen to views and to make changes. What occurs to me immediately is that an amendment which might be more suitable (and which could be tabled for the Report stage) would be one that proposed that the deputy chairman and one other member of the commission should be full-time, particularly in view of its enlargement. I should like to suggest that the chairman should not be tied to being a full-time member. It leaves the option open for securing the best available person and the widest choice. As the noble Baroness has indicated, there is nothing to stop it: the word "may" is there. The chairman could be full-time but there are technicalities which arise about full-time and part-time when members are appointed to Commissions of this kind. They have to give up all directorships, partnerships and other occupational and business interests. When that happens it eliminates some of the most suitable of the people who would otherwise be available—especially the younger ones.
I must remind the House that I was a Secretary of State who had to make many appointments to various bodies and boards, including chairmen. I found that when I had to try to find a full-time chairman—because the statute required him to be full-time—it was exceedingly difficult. The first 10 people suggested from all quarters had to be crossed off because they could not give up everything; they could give up good deal, but one or two things were their life and they could not give them up—even something which met only twice a month. So there are these technicalities which have the effect of removing well-qualified people from consideration.
I also add that in my experience I found it particularly difficult when it came to approaching women to be appointed as chairmen. I had a record of appointing

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quite a number of women as chairmen and members of bodies when I was a Secretary of State, but it was particularly difficult when it was a full-time job because many women could do a very good part-time job as members or chairmen but found it difficult when it was written into the statute as full-time, either because they had some interest which they could not give up or because they simply did not have the time to do what was described as a full-time job. Instead of excellent candidates in their forties or fifties, one very often had to rely for full-time chairmen on people who were retired completely and were in their late sixties or seventies. So I hope we will not put a restriction of this kind on a commission where we want to try to secure the best possible available group, including the chairman.
Lord Ennals: We are a hit short of executives. I entirely agree with every word of that former Secretary of State, the noble Lord, Lord Campbell of Croy.
Baroness Darcy (de Knayth): I should like to thank the noble Lord, Lord Campbell of Croy, for his full reply, and I totally appreciate his point about not wanting to limit the choice of chairman to someone who should be full-time because the best person may not he able to give his service full-time. I am glad he agrees that we can have one more full-time person, and I think his suggestion of putting down an amendment of "and one other" on Report is a very good one. I have no hesitation in withdrawing the amendment.
Amendment, by leave, withdrawn.
On Question, Whether Clause 1 stand part of the Bill?
8.4 p.m.
Lord Campbell of Croy: Perhaps I could just say something first on Clause 1 stand part. I see the noble Earl, Lord Longford, rising but I simply want to indicate that I am perfectly willing, as a result of representations that have been made to me, and also because of what was said in the debate I think by my noble friend Lady Lane-Fox, that one's mind should be open to the possibility of some existing body doing the job that is now set out for the commission and thereby not have to establish a new commission. Certainly some misgivings have been expressed about bringing into existence yet another new commission. I should point out that in the Bill the commission is a small and inexpensive body, even though it has been slightly enlarged by the amendments we have just made.
Provided that there is an existing body—perhaps a voluntary organisation which has been concerned with disabled people for 20 years of more—and it clearly has the resources, or resources specially buttressed for this purpose, I should like to indicate that I would not close my mind to that. But I must make this clear: if a voluntary organisation which is normally financed entirely by voluntary contributions were to be suggested, I feel most strongly that this part of its work should be carried out with grants from the Government. It would surely be wrong for the work of investigation and reporting on alleged discrimination to be financed by the haphazard system of responses to
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letters from appeal committees and similar arrangements with which many of us are familiar. This would be another way. It would be a less expensive way of making progress outside Government departments and offices than a new commission.
That is a very important point because I know the Government's attitude in recent times has been that the work of a commission can all be done within the Government machinery. I and others, I think, know only too well that many of the complaints of discrimination which come to us are about Government departments and Government offices, and there can never be complete satisfaction that such complaints can be seen to be investigated fully and with impartiality when it is done by the same Department or a sister Department. After all, that was the reason for the setting up of an ombudsman to look into the question of maladminstration.
I just want to make the point that if there is to be investigation by a body outside the Government machinery, and if there are overwhelming objections to a Commission, then I would be perfectly happy—but I think it would be less satisfactory—for some existing voluntary body (if it were really qualified to do it) to take on this task.
The Earl of Longford: The noble Lord, Lord Campbell of Croy, very courteously refrained from criticising my Bill when it was going through the Committee stage, and I therefore feel the least I can do is to follow his example and remain as silent as the noble Lord, Lord Glenarthur. I will make sure that on this occasion the best is not the enemy of the good. I think my Bill is better but I think there is a great deal to be said for the Bill of the noble Lord, Lord Campbell, and, as the noble Lord, Lord Banks, pointed out, in some respects it would confer benefits on the disabled which are not covered in my Bill. All I can say to the noble Lord, Lord Campbell of Croy is that I wish him well.
Viscount Ingleby: May I say a brief word here and ask the Minister this. When handicapped people experience difficulties or, indeed, something which they might call discrimination, does he feel that the existing channels of communication are adequate, bearing in mind his statement on Second Reading about the offer by the Minister for the Disabled to act as a channel in this regard? He stated that at that date only 21 enquiries had been received.
Baroness Masham of Ilton; I should like to ask a question of the noble Lord, Lord Campbell of Croy. Under this Bill, if there is an obvious case of discrimination—for example, not calling a disabled person for a job interview solely because he is disabled even though he is qualified with excellent references, and all other external factors are suitable—and if it is very obviously a case of discrimination, what would the commission do about it? If they attempt to conciliate and fail, what recourse does a disabled person have and what power has the commission?
I support the noble Lord, Lord Campbell of Croy, when he says that the Commission ought to be independent. So many voluntary bodies are worried about raising funds, and they spend so much of their

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energy raising funds and worrying whether they can carry on. As he has so rightly said, so many of the problems are right across the board with many different government departments being involved.
I have been attending the all-party disablement committee today and there was great concern from the Spastics Society because of the move out of the large mental institutions by mentally handicapped people into the community, where some local authorities and health authorities are not coming together and adequately planning this move. It is felt that there may be some very severe problems which need to be dealt with. The ghetto situation, which arises when the places where they are living are sometimes far from suitable, is becoming a problem. Therefore, more than ever before I think that there is a need for an independent commission.
The Parliamentary Under-Secretary of State, Department of Health and Social Security (Lord Glenarthur): The noble Lord, Lord Ennals, need wait no longer for me to rise to my feet. I have been waiting for a suitable opportunity to speak on the Question, Whether Clause I shall stand part of the Bill. But the Committee will be aware, as my noble friend Lord Campbell of Croy said, of the Government's position regarding the Bill. I stated it as clearly as I could during the Second Reading debate in December. That basic position has not changed. Of course my noble friend Lord Campbell of Croy has himself suggested deleting some references to benefits and pensions, thus removing some obvious pieces of duplication between his proposed commission and the work of an existing body, the Social Security Advisory Committee.
However, the point remains that such a commission would be expensive to establish and run, and would duplicate work already going on elsewhere both in the voluntary and the statutory sectors. One of the most obvious examples is that of access. That is generally acknowledged to be one of the main causes of disadvantage suffered by disabled people, and would undoubtedly also be a major concern of a disablement commission, such as that proposed by the Bill. But a national access committee for England is being set up with funding from the Government, and is about to start its work. It would be more sensible to see what impact this has in tackling this major problem before establishing yet another national body.
In answer to the particular question raised by the noble Viscount, Lord Ingleby, let me point out that there have been one or two further complaints since I spoke during the Second Reading debate on the Bill. I do not have the exact number; all I am able to tell him now is that there have been one or two. But the existing channel for communication is working well. My honourable friend the Minister for the disabled is well aware of many of the issues which have been discussed. Indeed, they have been discussed outside your Lordships' Chamber during the passage of this Bill and the Bill of the noble Earl, Lord Longford. In the light of what I have said about the Government's position as regards the Bill, I have to say to the Committee that I do not propose to comment now one way or the other on the amendments which have been proposed to it.
Baroness Masham of Ilton: Before the noble Lord sits down, I should like to ask him a question about the access committee which I wholeheartedly welcome and whose chairman I know. What will the access committee do when it is faced with matters of discrimination? I hope that it may tackle the problem of fixed rails at London Airport which stop any wheelchair-bound person using the facilities.
Lord Glenarthur: I had hoped that I had just explained to the noble Baroness that the access committee is being set up and is about to start its work. We shall have to see how it goes before I can answer the question which has been raised by the noble Baroness.
Viscount Ingleby: Will the Minister be kind enough to consider a little further the point that I raised? He mentioned that there have been one or two more inquiries, which I think would bring the total up to 22 or 23. On that evidence, surely the explanation for the fact that the Minister has only received 23 inquiries is either that disabled people are not suffering disadvantage or discrimination, or that disabled people do not feel that this is a satisfactory way in which to raise their difficulties?
Lord Glenarthur: I cannot really comment any more than I have already. I made the Government's position perfectly plain on Second Reading. We believe that the situation as it stands is the best way in which to cope with the problem. I shall certainly read the noble Viscount's comments; but beyond that I have nothing further to say.
Lord Ennals: I cannot say that I am disappointed with the noble Lord because I knew that he was going to be as negative as he has been. Of course one welcomes the access committee, but the supposition that the only disadvantages and discriminations that disabled people face are those of access, is one that I could not for a moment accept. However, I do not intend to proceed with an argument about that.
The figures regarding those who have registered with the Minister their concerns or their complaints, mean nothing. Indeed, I can add one further case to those figures, because I have just written to the Minister today enclosing a letter from someone else who made a complaint. But it is not normally to a Minister that people write, especially to a Minister who has many other functions. The Minister for the disabled is also the Minister for all sorts of other matters and he carries out his duties very well. But dealing with disablement is only a part of his job. Most people would not naturally write to a Minister if they were concerned. It may be that they think that the Government are not doing their job right. Thus there is advantage in having an independent body.
So, in general, I welcome the initiative taken by the noble Lord, Lord Campbell; but I have to say that in my view his is a pretty modest proposal compared with that of my noble friend Lord Longford. If one had to make a choice between the two Bills, I know that I would strongly support the Bill, as it has so far been amended, that has been moved by my noble friend Lord Longford. But if we have to find a fallback position, if the Government decide to use the same

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powers in another place as they used to prevent the same Bill getting a Second Reading, and if there is a possibility of this modest proposal coming through, then I would rather have a modest proposal than nothing at all. It is in that mood that I am most grateful to the noble Lord, Lord Campbell, for bringing forward what I consider to be a long stop alternative.
Lord Campbell of Croy: I should like to reply very briefly to the points that have been raised. The noble Baroness, Lady Masham, raised a case concerning employment. In my opinion, in that type of case, if the person accused had legal proceedings brought against him, he would undoubtedly get off with a good lawyer—even with an adequate lawyer—because he would be able to plead various other reasons for not having employed the person concerned. The commission proposed under the Bill is limited to investigating, reporting—and the reports would be to Parliament—and to publicising, because the reports would be public. It does not try to bring the person concerned to a court, but in my opinion it would be more effective.
I am grateful to the noble Earl, Lord Longford, for the kind words which he said. Of course I should be very grateful if he did want to comment on or criticise the Bill. I maintained silence during the discussion on his Bill because the points that I am dealing with now were more appropriate to raise today.
I thank my noble friend Lord Glenarthur for again expressing the Government's attitude, which I do understand. However, there is one matter that I should like to raise. My noble friend referred to the access committee. I hope that I am not being mischievous when I state that I heard him referring to it as a national access committee established for England. That brings out my point, because my noble friend is briefed to tell us what is happening for England, but I want to hear what is happening for Scotland, Wales and Northern Ireland as well. The DHSS is the Health Department for England and this is the "Rossi syndrome" which I mentioned earlier.
But an access committee is not the same as a commission like the one proposed. The access committee will look into all the problems of getting into buildings for public use. To illustrate what I mean I will mention one point which I mentioned on Second Reading. As regards access, possibly the perpetrators of some of the worst obstacles in the country are churches of all denominations, because they have so many steps and difficulties. An access committee does not necessarily deal with discrimination; an access committee would be trying to find all the ways of improving access to churches in the most inexpensive way for the congregations, et cetera, but it would not start treating that as a matter of discrimination. Therefore, I see the role of the commission as quite a different one.
Of course, access is a matter that will arise in certain allegations of discrimination, but an access committee has very much wider work to carry out. I hope that the noble Baroness, Lady Masham, will not mind my mentioning an event which took place when I was chairman for Scotland in the International Year for Disabled People. I am sure that she will correct me if I am wrong. During the year a ceremony was held in
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St. Paul's Cathedral and one of the administrative problems was getting the noble Baroness, in her wheelchair, into that cathedral for the service. There were no easy methods of doing so, and one has only to think of the front of St. Paul's to appreciate that. There were no easy methods round the back either. I give that as an illustration because certainly Sir Christopher Wren and others were not trying to discriminate against disabled people. However, that is the kind of thing with which an access committee would deal. It is not the kind of thing which I regard this commission as being brought into existence to deal with.
Lord Glenarthur: Before my noble friend thinks that I made his point rather better for him than he made it himself, he might like to know that the other three countries of the United Kingdom have already established access committees.
Lord Campbell of Croy: Thank you.
Viscount Ingleby: May I just inform the noble Lord, Lord Campbell, that there is now a splendid lift at St. Paul's?
Lord Campbell of Croy: I was aware that it was installed, I think as a result of the incident to which I referred.
Clause 1, as amended, agreed to.
Clause 2 [Duties of Commission]:
8.23 p.m.
Lord Campbell of Croy Lord Campbell of Croy moved Amendment No. 6:
Page 2, line 8, after ("disadvantages") insert ("experienced").
The noble Lord said: This is a straightforward drafting amendment. Somehow in the printing of the Bill a word was omitted. This amendment would put it in. I beg to move.
On Question, amendment agreed to.
Baroness Darcy (de Knayth)Baroness Darcy (de Knayth) moved Amendment No. 7:
Page 2, line 9, leave out ("deliberate").
The noble Baroness said: This amendment would enable the commission to look at cases of unintentional discrimination as well as at deliberate cases. I think that we are all agreed that, in fact, 90 per cent.—and probably much more—of cases of discrimination stem from ignorance, thoughtlessness and lack of imagination. Very few people actually set out to discriminate against disabled people in the first place. Indeed, the noble Lord, Lord Campbell of Croy, himself said on Second Reading at column 421 of Hansard of 16th December 1983:
"The large majority of situations in which handicapped people are at a disadvantage and could be thought to be discriminated against are not intentionally created or contrived".
However, in Clause 2(1)(a) the commission is to consider only cases of deliberate discrimination. From the debate at Second Reading when he was dealing with the noble Earl's Bill, the noble Lord, Lord Campbell of Croy, seemed to fear that the rural bus service would rapidly disappear and that the churches would become impoverished if they had to be made

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accessible. But I do not think that he need have worried because there was, of course, the concept of "reasonableness" written into the noble Earl's Bill, and we see that my noble friend Lady Masham is seeking to embody the concept of "reasonableness" in this Bill with Amendment No. 11.
I must also be honest and make it clear that, like the noble Lord, Lord Ennals, I prefer the Bill of the noble Earl, Lord Longford. We are in this very difficult situation of both Bills going through the House at the same time. But in case the noble Earl's Bill fails, I think that we must strengthen the Bill of the noble Lord, Lord Campbell.
There are many cases of unintentional discrimination that should and can be rectified. There is the example of guide dogs not being admitted to restaurants under the no-pets rule. This is really due to lack of understanding about the way in which guide dogs behave in restaurants, which is not like other dogs. There is the pedestrianisation of shopping areas, which can be a boon to the wheelchair disabled and also to the ambulant disabled if there are parking places provided nearby, but otherwise can turn these areas into a nightmare of inaccessibility.
With a bit of thought, such problems could easily have been solved in the first place. Bearing in mind that it is only unreasonable behaviour and barriers about which we are talking, I hope that the noble Lord, Lord Campbell, will think that he can accept this amendment. I beg to move.
Viscount Ingleby: I should like to support this amendment. Like the noble Baroness, I think that the vast majority of cases of discrimination are not deliberate.
Lord Campbell of Croy: It would perhaps save time if I spoke immediately. For myself, I see no difficulty about accepting this amendment, but, in reply to the noble Baroness, Lady Darcy, who moved it, I must explain that subsection (1)(a), which was to consider disadvantages experienced by disabled people, was meant to cover the kind of discrimination which is intentional, because I wanted the discrimination to be looked into here to be those forms of discrimination which appear to be deliberate.
I am, in the hands of your Lordships' Committee as to whether or not to accept this change. I note that in Amendment No. 11 the noble Baroness, Lady Masham, has proposed a definition of "discrimination". I think that we should take that into account as well. However, I should he satisfied to accept the amendment which is now before us, though I should be perfectly ready to listen to any views expressed in the other direction.
Baroness Darcy (de Knayth): I am delighted to hear the noble Lord's words because, although it is a very small amendment, it is really quite important and I think it strengthens this Bill a great deal.
On Question, amendment agreed to.
Lord Campbell of Croy Lord Campbell of Croy moved Amendment No. 8:
Page 2, line 12, leave out paragraph (b).
The noble Lord said: I beg to move this amendment and with it I suggest that Amendments Nos. 9 and 10 might be considered.
Amendment No. 9: Page 2, line 16, leave out ("under paragraphs (a) and (b) above").
Amendment No. 10: Page 2, line 36, leave out from ("1970") to end of line 40.
Amendment No. 10 has a star against it, but it has been down for several days. It is simply that, unknown to me, the form has been changed. It makes no difference to the words that are taken out. When I first presented a Bill on these lines in another place after I had been successful in the annual ballot there, the question of pensions and benefits was a most urgent subject. Since then, and, felicitously, when I was a member of the Cabinet in the early 1970s, the principal allowances for disability were introduced. So, while there is still a need for these matters to be kept under review, I do not believe that they need be in this Bill.
There is also now an advisory committee in existence, and this brings me to a further point. If your Lordships' Committee agrees with me on this and believes that the advisory committee can cover the whole area, then personally I should be ready to drop subsection (2) of Clause 2 as well. That would mean that the commission would not have any responsibilities for looking at the financial emoluments of disabled people. However, I should prefer to hear the views of the Committee before proposing to table that amendment before the Report stage. If I was satisfied that everybody agrees that the advisory committee should and can do all this work, then that would be an amendment which I should add to these that I am moving today. I beg to move.
Lord Kilmarnock: I was about to suggest to the noble Lord, Lord Campbell, that, if he removes subsection (1)(b), as I think he rather implied, in fact, subsection (2) is also unnecessary, and perhaps the whole of Clause 3 as well. I must confess that I think the Bill is running into difficulties here. I understand the noble Lord's thinking that the Social Security Advisory Committee has been established and is already keeping under review all pensions and benefits for disabled persons. If the noble Lord wants to go down that road, and if he is going to rely on the SSAC, it seems to me logical that he will need to drop subsection (2) of this clause and also Clause 3, which also becomes superfluous.
Lord Campbell of Croy: As regards subsection (2), that is what I was suggesting, but not Clause 3. Clause 3 is an important clause, which requires the Secretary of State within one month to place before Parliament reports which would be made under what is at present paragraph (c) in Clause 2.
On Question, amendment agreed to.
Lord Campbell of Croy Lord Campbell of Croy moved Amendment No. 9:
[Printed earlier.]
On Question, amendment agreed to.
On Question, Whether Clause 2, as amended, shall stand part of the Bill?
Lord Ennals: I hope that the noble Lord, Lord Campbell, will take out subsection (2) when we come to Report stage. Any reference to a review of the pensions and benefits is inappropriate in the Bill.
Baroness Masham of Ilton: Before the noble Lord, Lord Campbell of Croy, replies, may I say that I was delighted to hear a, "Content" from the Government Bench—from the noble Lord, Lord Lyell—which was so nice.
Lord Campbell of Croy: On Clause 2 stand part: that was a voice from the Opposition Front Bench that I was glad to hear in favour of dropping subsection (2), which is what I was asking for opinions on. I shall certainly be tabling an amendment to take out subsection (2) at Report stage. The noble Baroness, Lady Masham, asked me a question about functions of the commission which I said would be more appropriate for Clause 2 stand part, but I think I answered her question when she raised the case concerning employment. Therefore, I do not think that we need pursue that again.
Clause 2, as amended, agreed to.
Clauses 3 and 4 agreed to.
Clause 5 [Interpretation]:
Lord Campbell of Croy Lord Campbell of Croy moved Amendment No. 10:
[Printed earlier.]
On Question, amendment agreed to.
Baroness Masham of Ilton Baroness Masham of Ilton moved Amendment No. 11:
Page 2, line 36, at end insert—
(" and
() "discrimination" against disabled people means imposing conditions which will adversely affect them to an unreasonable extent.")
The noble Baroness said: During 1970 when Members of both your Lordships' House and another place were working together in a committee on the Chronically Sick and Disabled Persons Bill I showed the Bill to my noble kinsman, the late first Earl of Swinton. Some of your Lordships may remember the noble Earl, as I do, as a Member of your Lordships' House with immense parliamentary experience and having a clear, legally trained mind. The noble Earl said that the Bill should have a definition of "disability". I took that message to the committee, who agreed, and a definition was incorporated.
I find that in this very reasonable Bill of the noble Lord, Lord Campbell of Croy, "discrimination" is not defined. Therefore, I bring before your Lordships what I hope your Lordships will agree is an amendment which will benefit the Bill. I feel that it is useful to have "discrimination" defined, as I hope it brings with it a message that I believe to be the wish of everyone, disabled people and able-bodied people alike, that we should all work together to smooth our problems and help these unfortunate people who sometimes feel that the difficulties of life, because of their disabilites, are so great that the odds against them are insurmountable. I beg to move.
Viscount Ingleby: I should like to support this amendment. It seems to me to be admirably clear and simple. May I also express my preference for the phrase "handicapped people" rather than "disabled people".
Lord Campbell of Croy: I am grateful to the noble Baroness, Lady Masham, for having raised this matter. I remember her noble kinsman the late Lord Swinton, and I would regard his advice as very wise advice, but in these situations I have often received legal advice which conflicts. It is a good thing to have a definition in some cases, but in other cases it is much better not to have a definition where the subject is a difficult matter to define.
I think I rather prefer to have a definition, having seen this one. It was circulated to me only yesterday, but I have been able to get some quick advice from at least one legal mind in your Lordships' House. He said that he could not be here at this moment but he is interested in these matters, and he thought that this looked a good definition. I agree to it in principle, but if there is any question of the word "handicapped" going in instead of "disabled" I should like to suggest that perhaps we leave it to Report stage, when there will have been more time to get some advice on the exact wording.
Baroness Darcy (De Knayth): May I say a few words here, because I totally support my noble friend on the principle. I think it is necessary to define "discrimination" and to embody the concept of "unreasonableness". However, I am not sure whether she would cover all the aspects of discrimination. Indeed, I do not think that she would cover the instance she gave earlier where the disabled person was discriminated against when applying for a job. I do not think it covers the circumstance where a disabled person is treated less favourably than an able-bodied one would be in identical circumstances. Therefore, I hope that she might reconsider the wording of this amendment.
Baroness Masham of Ilton: I thank all noble Lords who have spoken and given advice. With the noble Lord, Lord Campbell of Croy, and others I shall take it away and try to get something of satisfaction to everyone, and to see that it covers everything that is necessary. What I wanted to do was to keep it simple because this is a fairly simple, straightforward Bill and I did not want to complicate it. I shall certainly do that, and I have pleasure in withdrawing this amendment.
Amendment, by leave, withdrawn.
Clause 5, as amended, agreed to.
Clause 6 [Short title and extent]:
Lord Campbell of Croy Lord Campbell of Croy moved Amendment No. 12:
Page 2, leave out line 42.
The noble Lord said: I am advised that there is no difficulty with the Bill as amended, and, in present circumstances, in extending it to Northern Ireland; and that is the effect of this amendment. I know it will give pleasure to the noble Lord, Lord Fitt, who raised as his only objection to the Bill at Second Reading that it did not extend to Northern Ireland. I beg to move.
On Question, amendment agreed to.
Clause 6, as amended, agreed to.
Schedule [Constitution of the Disablement Commission]:
On Question, Whether the schedule shall be the schedule to the Bill?
Lord Campbell of Croy: As there is nobody speaking to the Schedule, may I simply thank all who have taken part in this Committee stage and made such contributions to improving the Bill. May I say to my noble friend Lord Glenarthur that I hope that when the final version appears, after all this assistance, it will commend itself to the Government.
Schedule agreed to.
House resumed: Bill reported with the amendments.

Housing and Building Control Bill
8.40 p.m.
House again in Committee.
Clause 29 [Meaning of "secure tenancy"]:
Lord Skelmersdale: I think I can help the Committee. Amendment No. 70 was spoken to by the noble Baroness, Lady Birk, with Amendment No. 46, as was Amendment No. 71.
[Amendments Nos. 70 and 71 not moved.]
Clause 29 agreed to.
Clause 30 agreed to.
Clause 31 [Interpretation of Part I]:
Lord Skelmersdale Lord Skelmersdale moved Amendment No. 72.
[Printed earlier.]
The noble Lord said: This is a simple drafting, clarifying amendment. I beg to move.
On Question, amendment agreed to.
Clause 31, as amended, agreed to.
Clause 32 [Giving and acceptance of an initial notice]:
Baroness Nicol Baroness Nicol moved Amendment No. 73:
Page 32, line 34, at end insert ("or if a notice has previously been given for the same work (or any part of it) and has been cancelled for the reason specified in section 37(1)(c) below").
The noble Baroness said: Amendment No. 73 extends the local authorities reasons for refusal of an initial notice to include certain circumstances in which an original initial notice had been cancelled. I am also speaking to Amendment No. 92.
Amendment No. 92: Page 40, line 43, after ("notice") insert ("(except where section 37(1)(c) applies) ").
Clause 37(1) will require an approved inspector to withdraw from this role, either if he feels that he is, or will become, incapable of fulfilling it or if, under paragraph (c) of that subsection, he is of the opinion that there has been a contravention of the building regulations and has given notice to the builder or developer to rectify that contravention and the builder or developer fails to do so.
In such a case the approved inspector must withdraw his involvement and notify the local
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authority. But there is nothing in the Bill to stop the builder or developer from shopping around to find another, perhaps less conscientious, inspector, to take over the work, so the builder or developer could continue to flout the building regulations.
Clause 37(1)(c) demonstrates an essential weakness of the new system, in that an approved inspector will lack the teeth to enforce the building regulations. These amendments seek to prevent a series of initial notices being issued where the first has been cancelled either because the approved inspector feels that he is incapable of fulfilling his functions or where there has been a breach of building regulations and the approved inspector has not been able to bring about compliance. In that case, the supervision should revert to the local authority for it to use its enforcement powers. It should not be left to the builder or developer to shop around for a more amiable approved inspector. I beg to move.
Lord Broxbourne: Unless I have failed to understand the amendment, it seems to involve an unnecessary duality. As I understand it, it would make mandatory under Clause 32 the rejection of an initial notice by the local authority when the notice has already been cancelled by the inspector under Clause 37(1)(c) on the grounds that a builder has failed to remedy defects within the three months' statutory period. That involves an unnecessary duality and, in a statute that will necessarily be as long and complex as this, we should be at pains to try to avoid that. I think that, on reflection, noble Lords opposite may feel it to be a case of overkill and may wish to withdraw the amendment.
Viscount Hanworth: In a way, this amendment is a paving amendment for Clause 37. I cannot help going back to the Second Reading debate. It seems to me doubtful whether all these provisions for outside inspectors are necessary or whether the system could not be left as it was. However, I do not think at this stage that this is very important except to say that it seems that the Government are pursuing a doctrinal policy. It is a doctrinal policy with utter disregard for the side effects. It is these side effects on which the Government have been defeated three times in this Bill. It is strange that they should be so purblind as not to look at the issues with common sense.
We are dealing here, and in subsequent amendments, with something which is quite as important as anything that we have had before. It appears that these inspectors can be sacked by the contractors, just like that. If they do not like the inspector, after a little backwards and forwards, they get another one.
I challenge the Government to say whether this is not an absolute charter for dishonesty and corruption. Without amendments in the Bill that is exactly what it will be. I cannot understand how a responsible Government can so ignore the side effects of their legislation as they seem to do in this area.
We might remember one other matter; that is that in trying to see whether something conforms to building regulations is on-going. Once it is covered up nobody knows until possibly the building gets damp or, in an extreme case, it falls down. But this is absolutely

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monstrous unless something is done to amend it. This is only one of the small amendments; the first, which may be unimportant on its own merits, but it is vital to see that we do not land in a similar situation which we know has happened before with Poulson and others. I cannot conceive how any responsible Government can imagine that this will not happen.
Lord Irving of Dartford: Like the noble Viscount, Lord Hanworth, I feel tempted to make a Second Reading speech, but I should declare an interest as a vice-president of the ADC, as a member of a local authority with 32 years' experience and as a member associated with NALGO which has 4,000 control officers in membership and a large number of ancillary workers who all feel under threat.
Lord Broxbourne: I am grateful to the noble Lord for his characteristic courtesy. Will he repeat, spelling it out fully, the organisation which has the advantage of his vice-presidency, I could not identify it?
Lord Irving of Dartford: Yes, indeed, vice-president of the ADC, the Association of District Councils. I am glad to join with the noble Lord in this as in many other enterprises. The Secretary of State for the Environment, Mr. Heseltine, at the beginning of this piece in 1979 talked about national standards nationally enforced. Everything the Government have done since then has sought to fragment the service and, in my view, to disrupt a well-trained, well-established and independent service, to threaten standards, and to weaken the protection for owner and public alike. It will establish, alongside the present local government system, a class of inspector known as an approved inspector who can be chosen by the builder, who, as has already been said, can shop around and find an accommodating inspector if he does not like the actions of his particular approved inspector. There are none of the safeguards which apply in local government. I should like to remind your Lordships how strict they are. Every local government building control officer is subject to conditions that he must have no conflict of interest; that he must have no pecuniary interest that he does not declare; that he must not get involved in any kind of politics—and all these are subject to disciplinary sanctions if he defaults in any way.
The approved inspector will be exposed to all the commercial pressures without any of the protections available to the owner and the public today. If the approved inspector does not please he will not be appointed again. This could be a threat to the whole system of protection for which and to which the service is devoted at the moment. If this protection fails, the Government's action in providing compensation to owners who are injured or killed will be of little consolation. I should like, and I hope perhaps even at another stage, to explore the implications of this whole wretched measure in greater detail—but not tonight.
8.52 p.m.
Lord Skelmersdale: I had hoped before the noble Viscount, Lord Hanworth, spoke that I should be able to respond to the amendment as briefly as the noble Baroness, Lady Nicol, moved it. I am afraid that that
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is not to be. Clause 32 provides the essential legal framework for enabling an approved inspector to undertake the functions of inspecting plans and supervising building work in place of the local authority. The noble Lord, Lord Irving, with all his experience of local authorities—and I hesitate to be drawn into the argument of whether that matches that of my noble friend Lord Broxbourne or not; they can settle it out of court, so to speak—said that the local authority officers in this respect are well-trained, well-established and working well. Well-trained, I would agree with, well-established, I would agree with; working well—how does he know? He has nothing to compare it with. I think this is the point. The noble Viscount, Lord Hanworth, talked about doctrinal measures of this kind, or words to that effect.
With respect I do not again want to engage in a semantic argument with the noble Viscount but where do ideas come from? Sometimes, on rare occasions, ideas get translated into primary legislation or, on occasions, secondary legislation evolves from a general consensus of opinion; but this is very rare. I would suggest to him that all measures of all Governments have most of their foundations in some degree of doctrinality—if that word serves the purpose.
I should point out, going back to the Bill in hand, that this proposal of the Government will be an optional alternative available to a developer. He and his approved inspector will be able to serve a notice on the local authority which it will only be able to reject on limited grounds which will be set out in regulations. On acceptance of the notice the local authority's duty to enforce the building regulations will be suspended.
The inspector will then be responsible for seeing that the work secures the standards of health and safety required by the building regulations and will in due course issue a final certificate when the work is completed to his satisfaction. We will come to this later. If however the inspector considers that the work contravenes the regulations—and I think this is the point of the amendment—Clause 37 provides that he must give the developer a notice specifying the contravention. Our draft regulations require that the notice also specifies the measures required to remedy it. The developer then has a prescribed period (three months) in which to remove or remedy the offending work. At the end of the three months, if the work has not been put right, the approved inspector must cancel the initial notice.
This gives the developer a reasonable time in which to remedy a contravention and advance warning that the approved inspector might cancel the initial notice. Even though inspectors will not have the criminal enforcement powers of local authorities, they have this powerful sanction against developers who disregard their opinion and refuse to remedy what their inspector believes to be a contravention of the regulations. Cancellation and withdrawal in such circumstances would put the developer at serious risk of expense and delay.
If nonetheless the developer refused to alter the work, the inspector would have to cancel the initial notice. The local authority would then take over responsibility for the work unless the developer had been able in the meantime to find a second inspector prepared to take it on and give a second initial notice.

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I have painted the worse possible case—I hope it is to the advantage of the Committee—because these are the sort of things which have given grounds for suspicion to certain members of the Committee.
Lord Irving of Dartford: If, in the example that the noble Lord has given, the inspector virtually withdraws and the local authority is left with the job of controlling that development, is it not left with an impossible task, with no plans, with no supervision of the early work, of the foundations or of anything else? Then he has to deal with a situation which is quite intolerable and the local authority will have to do it with what could be in some respects an open-ended liability.
Lord Skelmersdale: No. This is untrue. The approved inspector is responsible for the work up to the point where the disagreement arises. If the disagreement has not been put right, then either the local authority or the first approved inspector or the second approved inspector would have the authority to get it put right for the development to continue beyond that point. I do not think it is an impossible situation. The original approved inspector would be totally liable in law for all the interim certificates given for the work up to that point.
Lord Irving of Dartford: What I am saying is that if, in fact, the inspector withdraws or has to withdraw) in the circumstances that the noble Lord indicates, how is he to know whether the early certificate was a valid one in the sense that the work was carried out effectively? They will have to proceed with the rest of the work without knowing about the foundations or other parts of the building and therefore could pile on to an original fault work that might then be at risk.
Lord Skelmersdale: No. The whole objective of the system is to break down into sections the building work on the development and a certificate must be issued at the end of the last section before the next section can be undertaken by the developer: so that we have this safeguard built into the scheme all the way along. If there is a row and a default on one side or the other, the inspector's certificates up to that point not only remain in force—because he will have been satisfied; otherwise he would not have signed the certificates—but, as I have said, he will be liable in law should his work subsequently prove to be defective or negligent.
However, perhaps I can now get on to the amendment. I am not sure whether the noble Lord, Lord Irving, is convinced; but perhaps he will read what I have said and then perhaps he can come back to it later on. As far as these two amendments are concerned—and I am very grateful to the noble Baroness for talking to both of them together—I am certain that my noble friend Lord Broxbourne is not correct about duality. I am advised that, on the contrary, these amendments would prevent a second certifier taking over supervision of the building where the first certifier had withdrawn because he considered that the work contravened the building regulations and the builder had not altered or taken down the work in the prescribed period. It would follow that the local authority would always take over responsibility in such cases. The Government do not believe that this would be right.
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A difference of opinion about work on the site could arise between a builder and his certifier, and the view of one certifier might not always coincide with the view of another. It is possible for there to be honest differences of view about the interpretation or application of the building regulations. Indeed—I am sure that the noble Lord, Lord Irving, would bear me out—such differences are not uncommon now between local authorities, and what is permitted in one local authority from time to time is not necessarily permitted in another.
It has been suggested—not yet here, but I am sure that the suggestion will arise sooner or later, so I may as well deal with it—that a developer will be able to shop around until he finds a second approved inspector, who is prepared to certify work where the first inspector alleges contravention. I think that, in practice, this ruse is most unlikely to succeed. If the second inspector whom he approaches agrees with the first that there is a contravention, the chances of a third or fourth disagreeing will be slight, to say the least. In any case, we must remember that the approved inspector who took over from the first would be taking over responsibility for the work supervised by his predecessor. He would not do this lightly and I do not see the justification for precluding take-over whenever this situation arises, given that there is scope for genuine differences of opinion.
Therefore, the Government's view is that we must continue to allow for the possiblity of such genuine differences in professional views, and that it would be unfair to deprive the builder of the chance to engage a second certifier who would be prepared to certify that, in his view, the work complied. I do not see any justification for obliging the local authority to take over responsibility in every case where this situation arises. I also doubt—again, I am prepared to take advice—whether many local authorities would welcome that obligation. I therefore invite the noble Baroness to withdraw the amendment.
Viscount Hanworth: Before the noble Lord sits down, I should like to make one or two points. First, I realise that when I used the word "doctrinal" I was being a little unkind to the Government. What I mean is carrying forward what may well be a perfectly good policy into areas where it is just not applicable. I used the word "doctrinal" to refer to that.
The noble Lord has done something over my real worries about dishonesty, which go right through these clauses. But he has not gone as far as we must go, because, if the contractor sacks his own inspector, he is still at liberty, without consulting anybody or the council, to take on another more pliable inspector—and such inspectors will undoubtedly exist.
Perhaps the noble Lord would take away the worries I have raised and see what the Government think can be done in this direction. If the inspector has been sacked, as opposed to retiring, the council could be consulted, or something of that sort. If the noble Lord would only go away and see the point I have been making—without any undertaking—and will consider whether he can do anything, while realising that there is a problem in this area, then I shall not go on harrying him with subsequent amendments. That is a very decent promise.
Baroness Nicol: Before the noble Lord replies, may I deal with two points in one go? First, this is the first occasion on which the Minister has even suggested that there was anything unsatisfactory in the application of building control up to this point. In fact, he is on record, on two occasions at least, as saying that building control has been carried out very satisfactorily by the local authority; that was on the Second Reading of this Bill and of the earlier one. I am sorry that I did not bring the Official Report with me, but I did not expect this point to be raised. But it has been generally agreed that the system of building control by local authorities has been satisfactory, and it was the Government's wish to bring an element of competition into it that gave rise to this set of clauses.
Secondly, I must reiterate what my noble friend has said. We are not really concerned with the honest developer and the honest inspector, of whom there are many, and we make no bones about that. The vast majority of the people concerned will be honest and wish to do their jobs properly, and they probably will do their jobs properly. But in building as in almost no other industry in this country, we have been plagued wih cowboy builders and cowboy operators of all kinds, and it is against that kind of operation that we wish to defend ourselves and the general public.
For this reason, when an inspector leaves, for any reason other than illness, or for some perfectly acceptable reason—perhaps because of a row with his employer—then there should be no shopping around for a second approved inspector. It should then become the responsibility of the local authority to see the job through. Perhaps the Minister could take those points on board.
Lord Broxbourne: Before my noble friend replies, he said that there would be no duality, but could he identify how this can be so, since the initial notice is clearly cancelled and the two forms referred to in his draft inspector's regulations do not make any reference to the subsequent position after that? Once the initial notice has been cancelled, I should have thought—I am open to correction and conviction on this point—that there would be no point in taking the action proposed in the amendment, because the matter is already dead, so to speak, by reason of the cancellation.
It may well be that there should be further provisions, providing for a right of challenge to the cancellation and the various circumstances that ought to be provided for in that regard. But I do not see them in the Bill and in these voluminous documents at present. Perhaps my noble friend could identify them—if not now, at any rate on some occasion—or I should be equally happy to have the information from the noble Baroness opposite.
Lord Irving of Dartford: Would the noble Lord allow me a few sentences before he replies? He outlined a series of dramatic situations in which withdrawal might be appropriate; the conflict then arises as to whether you get another inspector or go to a local authority. But even if he ties up all these loopholes, is he not aware that the pressure could be much more subtle? An inspector completes one job, but he is found to be too tough. So there is no question
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of conflict—it is just that the next time he is not appointed. Therefore, there is no way in which the protection which the Minister has talked about could apply. This is one of the points we are worried about in terms of the integrity of inspectors.
Lord Skelmersdale: I do not believe that the noble Lord, Lord Irving of Dartford, can possibly be right. The complaints that I have received are not that the inspector will he too tough but that in carrying out his duties he will be too lax.
Lord Irving of Dartford: He will be too tough in terms of the builder, which may be a different criterion from the one which the noble Lord or I would apply.
Lord Skelmersdale: It is surely in his own interests not to be too tough so far as the builder is concerned. As the noble Lord says, he will want to get another job on another development. It has been suggested to me that he will be too lax from the point of view of the local authority, in which case the local authority will get to know very quickly and the next time round will refuse him an initial notice.
While on the subject of initial notices, the noble Viscount, Lord Hanworth, asked me exactly where in the Bill it is stated that the local authority will be informed in the event of the sacking of the first approved inspector. The answer is on page 40, in subsection (7) of Clause 38:
"The fact that an initial notice has ceased to be in force shall not affect the right to give a new initial notice".
In other words, if there is another inspector there is another initial notice. I hope that that explanation will satisfy the noble Viscount.
I must apologise to my noble friend Lord Broxbourne for the fact that he and I were talking at cross purposes. When I referred to duality I was talking about duality of the amendment, which does not exist. My noble friend was, I believe, talking about duality of the amendment with the Bill, which I accept would exist. Since we are not, I hope, going to agree this amendment, I hope that point will not arise.
Viscount Hanworth: The Minister said that if an inspector was too lenient the local authority would sack him. This could occur only in extreme cases. We are thinking about collusion between an inspector and a builder. If there is collusion it is very easy quite quickly to cover up shoddy work. What the noble Lord has said does not, therefore, cut very much ice. We still come back to the point that something must be done to ensure not only that there is no open invitation to collusion but also that there is no open invitation to all sorts of bribes for the inspector.
Lord Skelmersdale: I should have thought that collusion would result in negligence, which is an offence under a later clause of the Bill, to which I cannot turn at the moment. Since this is obviously a very complicated issue for the noble Viscount, perhaps we might with advantage discuss it outside in the near future.
Viscount Hanworth: I certainly agree to that proposal.
Baroness Nicol: The discussion has been fairly confusing for a number of noble Lords. The best course to adopt will be to read what has been said, to look again at the Bill and then to decide whether we wish to bring it back at a later stage. In those circumstances, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
9.13 p.m.
Lord Graham of Edmonton Lord Graham of Edmonton moved Amendment No. 74:
Page 33, line 35, leave out ("may") and insert ("shall").
The noble Lord said: One of the aggravations we have to face is the pressure on time, because this is one of a handful of most crucial issues that we are now beginning to debate. The sparse attendance in the Committee does not reflect the importance of this issue, which is the kernel of the basis by means of which the Government intend, in Part II of the Bill, to change the present system of building control and inspection, which is designed to prevent difficulties, to one which is underwritten or underpinned by an insurance system which will provide compensation after a tragedy or event has taken place. I begin by quoting the words of the Secretary of State in another place. When these matters were being discussed, he said:
"If there is no satisfactory insurance there will be no approved inspectors".—[Official Report, Commons, 15/11/83; col. 664.]
It is as simple as that. The kernel of the argument we shall deploy is that for more than five years the Government have sought agreement by consultation, by variation, among a range of people—not least those in the insurance industry. After five years, we stand here tonight, I will not say no further forward, because clearly some progress has been made, but with the insurance industry saying to the Government, "What we have seen is not an acceptable basis upon which we can say to the Government that a market can be created and the terms of the Bill can go forward". This is a lamentable situation. When one considers the time, the energy, the emotion, the disturbance and distress which has been caused in a range of fora by the Government's intentions, it is nothing short of scandalous.
Let us examine precisely what it is that the Government intend to do. The present situation is one whereby the public are protected from the event of dereliction by those who are charged with inspecting the footings, the buildings, the materials, the aspects and the range of qualities which need to he provided. The public are protected because at the moment there is a perfectly satisfactory system of inspection. It is a system of inspection carried out by approved inspectors. Those inspectors are the building control officers who have been approved by the system and by time. If the public, through the developer, pay a fee—and there are prescribed fees relating to the value of the development or the house—they then get a service. Up till now that service has satisfied the public. I do not wish to speak in complete unanimity because tragedies do occur and odd corruptions are revealed. But we are talking about the totality of the system, and the public are satisfied that the public inspector is able to give a satisfactory service.
The Government have indicated on page 33 of the Bill, line 35, in Clause 32(7):
"Building regulations may prescribe for the purposes of this section the insurance cover which is to be provided in relation to any work which is specified in an initial notice and is not work to which an approved scheme applies and may, in particular, prescribe the form and content of policies of insurance".
Amendment Nos. 74 to 77, to which I speak, cover the totality of those arguments.
In preparation for these debates, my noble friend Lady Nicol and I have not merely relied on our experience of serving on committee upon this Bill in the past. In order to refresh our minds, we sought meetings with a range of people representing a number of bodies with whom certainly the civil servants, who served the Minister well in his department, have met and consulted. I say this with no disrespect to the Minister, but he himself may not have met the individuals we are talking about—although when consultations take place, the Minister may be there, too, Certainly I am well aware that consultations have taken place.
We have held discussions with the Association of Consulting Engineers, the Society of Architectural and Associated Technicians, NALGO, the National Federation of Building Trade Employers, the British Insurance Brokers Association, the British Insurance Association, the Institute of Building Control Officers, the District Planning Officers' Society, the unattached architects, the National House Building Council, the District Surveyors' Association and the Royal Institute of Structural Engineers.
We did not meet them all in the same morning, not all on the same day, not all in the same week. But as a credential, we simply say that we have relied neither on prejudice nor on a brief for our memory or for our reading. We said to all of those organisations, "Tell us what you think about how the Bill looks now in the light of your experience and in the light of consultation papers". When we have asked the Minister, he has been kind enough to let us have consultation papers; sometimes we have obtained copies without asking him for them. I refer to the consultation papers of August, September, November and February.
We are not arguing abut the endeavour of the Minister to satisfy his imperative. His imperative is simply to produce a scheme that will work. What they have told us—without wishing to put words into their mouths—is that the scheme as at present on the table will not work. They have told us that it will not work. But that does not mean to say that it is not capable of being made to work by further consultation and improvement. I simply want the committee to stand aghast at the fact that after five years of an idea which most people said had grave difficulties the Government have yet to produce a basis.
Looking at the reality of parliamentary arithmetic, in a matter of months the Bill will become an Act and will be on the statute book with a range of triggers as to when various things can or cannot happen. Frankly, the Committee should be appalled at the emotional energy—if I may use that term—that has been generated in a range of forums, and at the alarms and depressions, let alone the steps that local authorities have to take on what is to happen. That is nothing short of a disgrace.
I want to stick strictly to the insurance aspect and the current situation. I rely very heavily on an opportunity I had when I attended a conference. I know that there are others not a thousand miles away from where I stand now who have responsibilities in these matters, who attended the same conference and who heard an eminent member of the insurance broking profession speaking to perhaps 200 people who will carry some responsibility in the inspection field. I am referring to the public sector as well as the private sector. The conference took place last week. Those people and their association invited this man, from his knowledge and sense of what is happening, to tell them, as he saw it, his impression of the present situation. I simply want to ask the Committee to listen to the words that I heard. I paraphrase them because I did not have a tape recorder and do not possess a verbatim record of what was said. One of the first things he said was:
"In the case of the Bill the demand is as yet unknown".
So we have the unusual situation of the importance, or even the success, of the Bill revolving around an insurance capacity which currently does not exist in the commercial insurance market. That was said by someone who, from his credentials, I respect although I have never met him. The Minister will be advised by his advisers that this person is an authority in that respect. I think it is a little disgraceful, in what I would say are the latter stages of the Bill, that that is the situation. He then went on:
"Whenever an insurance proposition is put to the market the response will depend heavily on the answers to two questions: one, full details of requirements; and, two, the likely demand".
Both questions are at present unanswered.
If we have a situation where the whole underpinning of a piece of legislation—the words of the Minister—is without adequate insurance arrangements there will be no Bill. It is as simple as that. I invite the Minister to comment on that situation.
I know that the Minister will tell us that the insurance arrangements are not complicated but that they relate to different categories of housing. There are the low rise, residential developments where the National House Building Council is likely to be the body that will look after that situation. I am delighted to see my good friend the noble Lord, Lord Broxbourne, in his place. He is well equipped not only to defend, which is not the point, but to speak about the work and record of the National House Building Council.
We then have to consider the length of time, the amount, the certainty, the escalation and the protection that the insurance company needs to give in the light of what are, quite frankly, the very strict criteria which the Government are laying down. One problem is that the Government take very much on board the need for protection comparable to that which the public already enjoy. They are asking insurers to cover for a length and certainty similar to that which they presently enjoy, and the insurance industry is having grave doubts.
Another thing that this eminent person said last week was:
"How can one persuade an insurer to commit himself to a 15-year term on an escalating sum insured at a reasonable premium without a guaranteed flow of business and the spread of the risk? The backing
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of a substantial bulk of business would be essential".
I come now to what I think are that person's most damaging observations. He said:
"The Bill seeks consumer protection when inspection work is transferred to private authorised inspectors but only in respect of domestic buildings. It does nothing to protect the owners of other buildings, and from the insurance viewpoint it may as well be called the 'Housing Control Bill'. At this stage it is difficult to see why any authorised private inspector will wish to undertake this work, as the cost of insuring his liabilities would appear to be uneconomical when related to his fee income for his work".
We need to respect that opinion. When that person talks as frankly as that about what we consider to be a central point of the Bill, we should ask the Minister whether he is prepared to tell his colleagues that, as there is no certainty about the arrangements that can be made, we should not burden local authorities and the world of architects, engineers, surveyors, planners and others with a situation that may never come about. The Minister may respond by saving that they do not have to be involved in the business; the developer need not go the private route, as there is always the public route. What a scandal that five years of parliamentary time, all the energy of the department, and, I repeat, the emotional energy outside, may have been wasted simply to leave that as an option. When we are told by people who know their business that the cost of insurance will he two, three or sometimes even four times as high as it is now, quite frankly it is no wonder that the proposal for an approved inspector is not likely to get off the ground.
We want the approved inspector to carry a certificate of full insurance cover against any claim that may be made against him or his estate in respect of any works carried out under the initial notice. That is precisely the position at the moment. A developer is covered by the responsibility and insurance of the local authority. If the local authority insurance cover is insufficient to meet the amount that a court might lay down as being due to an aggrieved person because of the negligence of the council's building inspector, because the council is a body of substance and permanence, it will have to make up the difference through the rates. Although, as a ratepayer, one might wince, that is the present system, and what we are being invited to do is to produce a weaker system for the protection of the public. The amendment that we make is the only way in which we can say to the public whatever other reasons the Government have got, in future you will be protected as much as you have been in the past. I beg to move the amendment.
Lord Broxbourne: Before the noble Lord sits down, in the concluding part of his very interesting observations the noble Lord made reference to the local authority position, and quite correctly said that there was insurance against negligence. The insurance contemplated, as I understand it, by these draft insurance regulations, which I am sure the noble Lord has studied, is that there shall be two forms of insurance covering two different periods, the 10 year period, which is the so-called no fault period, and the 15 year period, the longer period, where negligence has to be established.
My understanding of the local authority position is that only the first type of insurance applies and that negligence has to be established. It will of course be a very substantial advantage to have the no fault period

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introduced. The noble Lord was good enough to refer to the National Housebuilding Council of which I am a quondam amateur chairman. I think the idea does in fact derive from the practice there where they do operate—and I see, from the nodding of his head, that the noble Lord knows—to have the no fault period as well. I do not know whether the noble Lord would like to comment on that before he sits down. I am sorry that my intervention has been a little long, but mercifully I think it will save the Committee from any further contribution from me on this particular matter.
Lord Graham of Edmonton: I do appreciate and want to respond helpfully. It is a fact that the understanding in the industry is that the first part of the insurance proposals, which relate substantially to what I would call the National Housebuilders' Council insurance building type, is likely to be the one that will get off the ground and the other one will not—not least because of the difficulty of matching up to providing the cover. One of our concerns, which we will express later, is that clearly, because the National Housebuilders' Council already in existence has been favoured—and this is not denied by the Government—as a proper body, in fact is likely be the only body that is going to be not just interested but benefit from and grow and expand as a result of these proposals. I am not arguing against their system. It is in writing; there is experience; one can look at it. I have seen cases of distress and grievance, but this happens in all occupations. What I am saying is that we are likely to go through the whole trauma of creating a system when in effect the Government ought to have done their homework, even if that took years and years. Our charge is that in order to get something on the statute book that looks good, the privatisation of building control, they are falling over themselves to try to make arrangements which will not work.
Lord Skelmersdale: Oh dear, my Lords, "the privatisation of building control"! I really cannot agree with that. It has got nothing to do with it. What it does is give an option which is not available at the moment to a developer and why on earth should he not have such an option? The noble Lord also talked about a scandal. May I remind him that the lead time for nuclear power stations is in the order of from 15 to 17 years. I equally cannot accept his definition of a scandal in this case. We are working concurrently on consultation papers with the production of a Bill and all governments have done it at all times and will continue to do it at all times in the future. There is nothing improper in that. But I would accept one thing that the noble Lord, Lord Graham, has said: this is a key issue. I feel sure that both sides of the Committee agree that some form of insurance is necessary to protect the owner of a certified building in the event of defects occurring at a later stage which result from an approved inspector's negligence. Let us remember that this is what we are talking about: we are talking about negligence, and not some other reason for a building falling down, a collapsed wall, a collapsed roof or whatever. It is the inspector's negligence that we are talking about. Such cases should be rare, just as they are under the present local authority system.
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Nevertheless provision must be made for them. A local authority is always there to be sued and has resources to meet claims for damages arising from their own negligence in inspecting a building possibly many years ago.
An approved inspector, on the other hand, who is found negligent many or may not be able to meet a claim for damages. If he has a professional indemnity insurance policy in effect at the time when a claim is made, there should be no problem, but there is no way of guaranteeing that his annual insurance premiums will continue to be paid indefinitely.
The purpose in approving insurance schemes under Clause 32(6) of the Bill is to ensure that a person suffering damage attributable to non-compliance with the building regulations will be able to obtain redress for a reasonably long period of time. In order to be certain that the cover will be available, we have suggested that it should be provided on payment of a single premium at the construction stage.
As the noble Lord well knows, we are currently consulting on draft guidelines for schemes, and it may help the Committee if I explain the kind of insurance requirements that we have in mind. In the case of domestic buildings we feel that owners should be assured of redress without themselves having to take out insurance. An approved scheme would, under the proposed guidelines, give a house buyer a 10-year warranty against defects, whether or not they resulted from the negligence of the approved inspector. In addition, it would give further cover for another five years; that is 15 years in all against any damage which could be shown to result from an inspector's negligence.
The National House Building Council has said that if approved as a certifier of low-rise housing, it would provide a scheme on these lines, incorporating an improved version of its existing warranty; and the Government are grateful for that. This scheme will have a number of significant advantages over the present position with local authority building control. Local authorities do not give any sort of warranty. If a defect occurs in the first 10 years in a local authority supervised house, therefore, the houseowner has to prove that the local authority has been negligent. Taking the council to court is not something that an ordinary householder can do lightly or easily, but it might be his only means of redress. If the local authority were not found negligent, the houseowner would have incurred considerable expenditure to no avail, and would still be faced with the problem of putting right a defective house. Under the insurance scheme that we are proposing the owner would not have to prove negligence in the first 10 years but would be protected by a warranty from an insurance company.
So much for the first 10 years. During years 11 to 15 the two houseowners will be in exactly the same position; we are back to negligence again. After 15 years the owner of the privately certified house will still be able to sue the approved inspector for negligence. At this point, however, there would be no guarantee that if negligence were established, damages should be forthcoming. Nevertheless, I think it very unlikely indeed that a body such as the NHBC would be unable to meet such a claim, Furthermore, the likelihood of a

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defect not coming to light within 15 years is itself fairly remote. I think, therefore, that an owner of a certified house who has the benefit of a scheme such as the NHBC has offered will be at least as well protected as one whose house was subject to local authority building control.
The noble Lord very properly asked about commercial property. It has been suggested to us that owners can be relied upon to look after their own interests in this respect. Consequently, in the present draft guidelines for insurance schemes, on which we are currently consulting, the only obligatory requirement is for insurance cover to meet claims from injured third parties. Our concern here is to protect members of the public from the consequences of negligence on the part of an approved inspector.
As the Committee is aware, the Law Reform Committee is currently considering the question of time limitation of liability in negligence cases involving latent damage and is expected to report in the near future. Its recommendations may well have considerable implications for these matters, but of course we cannot anticipate them.
Clause 32(7) provides for a possible alternative approach to the matter of insurance requirements. It enables the Secretary of State to prescribe by means of regulations the insurance cover which is to be provided in cases where work is not covered by an approved scheme.
For the time being at least we see the approval of schemes under subsection (6) as the more promising approach, and regulations under subsection (7) have not been drafted. Any system of regulations would have to be watertight in all situations, and this could be difficult to achieve in the short term.
I now come to the specific amendments, Nos. 74 and 76. Their intention, in altering the word "may" to "shall" in subsection (7) is evidently to make certain that regulations imposing requirements for insurance are made before certification is introduced. I can understand the concern of noble Lords on this very important point, but I think I can reassure them. Certification under Clause 32 will not and indeed cannot begin until either insurance regulations are made prescribing the cover to be required, or a specific scheme (or schemes) has been approved for the purpose by the Secretary of State.
This is because subsection (1) of this clause requires that an initial notice will have to be accompanied by prescribed evidence of insurance. Failure to provide such evidence will be one of the grounds on which the local authority will have to reject the notice, so there can be no chance of an inspector supervising work without the necessary insurance. So again, to that extent the noble Lord, Lord Graham, is quite correct. Amendments Nos. 74 and 76 are therefore unnecessary. They are also undesirable—they would force us to make insurance regulations and to prescribe the form and content of insurance policies at the outset.
I have already explained that for the present we propose to rely on approved schemes. When the market has developed we may be able to make regulations, but we are not at that stage yet.
The effect of Amendment No. 75 would not I think
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be helpful when we came to draft such regulations. It would actually limit the kind of insurance requirements which might be prescribed to cover for the approved inspector. The essential point in any insurance requirements or approved schemes is that the protection is primarily for the owner and subsequent owners of the building. There may be ways of achieving this which depend on cover for the approved inspector but there are problems in this approach. More direct protection for the building owner is the surer method. If the inspector personally is insured, satisfactory redress for the building owner would depend on his taking action against the inspector—probably by suing him; on the other hand, if the policy relates to the inspector's work—the building—the owner would then have direct access to the insurer and to the benefits of the policy. We do not wish to limit ourselves exclusively to one or other method. Both could work, but there is no merit in restricting choice unnecessarily.
Amendment No.77, which adds a new subsection to Clause 32, would require something which the insurance industry cannot provide; namely, insurance cover for a certifier covering his own negligence for an indefinite period, regardless of the fact that there is no way of ensuring that premiums will continue to be paid. It would be impossible for an inspector to produce a certificate of the kind envisaged in the amendment.
It is of course always open to an owner to sue an approved inspector for as long as the law permits; and, conversely, in the interests of an inspector, or any other professional person for that matter, to insure himself against such an eventuality, but we cannot require people to do the impossible.
The noble Lord, Lord Graham, in fact wandered very naturally away from the insurance point during the course of his speech, and he mentioned something which caught my ear, which was the shift from prevention to compensation in this respect. Not so. Emphasis remains on prevention of defects; hence the stress on inspector's qualifications and experience, which is another subject which I suspect we shall come on to later. Insurance for inspectors is only a fallback, as it is for local authorities, which also insure and pay out heavily every year.
The noble Lord also placed great reliance on his panel of experts. I note that I was not included in that panel of experts although I did have somewhat brief discussions with him prior to the Bill. The insurance expert is the one who concerns me now. I would say that the report of the noble Lord, Lord Graham, on last week's conference at the Incorporated Association of Architects and Surveyors is substantially correct. The burden of the insurance brokers' message was, as the noble Lord said, that the insurance industry would find it hard to respond because it is a new market, a new kind of insurance and because they do not know how much business there will be.
He also said that the insurance guidelines suggested for consultation would provide building owners with very much more protection than they get from local authorities. But the fact is that the one insurance body with experience in this field, the NHBC is ready to provide an insurance scheme of this sort. So it is

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erroneous for the noble Lord to suggest that all is already lost.
The Bill will enable inspectors to certify any type of building, but the draft insurance guidelines would require more extensive insurance for domestic buildings than for commercially-owned buildings. To quote, I hope, from our current set of discussion papers on this, the reason for the distinction is that the Government believe that owners of domestic buildings should be able to rely on the availability of redress in the event of defects occurring which are attributable to contraventions of the building regulations, without themselves having to take out insurance. Owners of other buildings can be expected to make their own commercial judgments as to how far they wish to insure them, but third party cover will be obligatory. For those reasons—which I accept are very complicated and perhaps we cannot go into them in much greater detail now—I would invite the noble Lord to withdraw the amendments to which he has spoken.
Lord Graham of Edmonton: I should like to respond by saying that I am grateful to the Minister and to his advisers for clearly anticipating the importance of this debate and for preparing themselves quite fully to respond to the very predictable points which have been around for a long time and which, I suspect, will be around for a great deal longer. I take from the Minister the point that has been made by myself and the noble Lord, Lord Broxbourne, that there is already something upon which can be grafted the Government's ambitions, and that is the operations of the NHBC. I am prepared to believe that provided it works and provided it is supported that particular kind of construction is likely to be taken care of.
But the Minister failed to respond—and quite rightly, because he would have been in difficulty—to some of the detailed worries of not just the insurance industry, but of those who will have to rely upon it. For example, the element of inflation needs to be taken into account. I am an amateur but a keen observer in these matters. I am bound to tell your Lordships that, besides reading the information which I receive—and the briefs clearly have a vested interest—last week I spoke to some of my own contacts in this field. They are very worried indeed.
I must repeat that the revolution in this particular field of local government responsibility is based upon a system of insurance. The insurance industry and the brokers are distinct and separate—and I understand the difference—from the insurance companies that will actually write the insurance. They are all saying that at the moment they cannot see it getting off the ground. But in the meantime the local authorities have to make their manpower decisions. They have to decide whether in 1985 or 1986 their existing complement of 40 or 50 building inspectors will be required. If they decide to keep them and a lot of their
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work goes away, then they will be charged by this Government and others for having been overstaffed, et cetera.
Lord Skelmersdale: Will the noble Lord give way? The noble Lord cannot have it both ways. He suggests, on the one hand, that the local authority panel of inspectors is doing so well that the developer would not take up the option, and then he suggests, on the other hand, that when the developer does take up the option there is the threat of—I was going to say "dismissals", but that is the wrong word—
Lord Graham of Edmonton: Redundancies?
Lord Skelmersdale: Yes, the threat of redundancies in the local authority team. Those two ideas are totally incompatible.
Lord Graham of Edmonton: Of course I can have it both ways, because either circumstance is possible. We just do not know. The local authority, the chief officer and the committee are charged with trying to manage their affairs in the best way they can. If in 12 or 18 months' time things begin to get off the ground, then they will need to tailor the number of building inspectors they will need. What concerns me is that all that I have heard from people in the business is that the approved inspector system is not likely to make very much progress, if any progress at all. But people just do not know. I am not prepared to weary the Committee any more at this time. There is some more business to be pursued.
Lord Irving of Dartford: Will the noble Lord give way? On a point that he is making, is he aware that already the uncertainty of the last five years has inhibited recruitment to this profession in a way that has made control of building sites and property that much more difficult?
Lord Graham of Edmonton: My noble friend has great experience and many contacts in this matter, and I can well imagine that that is true. It is the uncertainty that has been created that worries me. I believe that that will continue for a very long time. I am grateful for the opportunity that we have had to air the fears and worries of people outside this place who are looking to us to produce a satisfactory system. We intend to return with other opportunities at other stages of the Bill, but at this stage I beg leave to withdraw this amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 75, 76 and 77 not moved.]
Clause 32 agreed to.
Clause 33 agreed to.
Clause 34 [Approved inspectors]:
9.52 p.m.
Baroness Nicol Baroness Nicol moved Amendment No. 78:
Page 35, line 13, leave out paragraph (b), and insert ("(b) by the Council.")
The noble Baroness said: I rise to move Amendment No. 78 and to speak to Amendments Nos. 81, 84, 86, 94, 95, 108, 109 and 110.
Amendment No. 81: Page 35, line 30, leave out paragraph (c).
Amendment No. 84: Page 36, line 1. leave out paragraph (f).
Amendment No. 86: Page 36, line 27, after ("person") insert ("provided that any person who carries out an inspection under this subsection is suitably qualified in accordance with the appropriate regulations of the Council").
Amendment No. 94: After Clause 38, insert the following new clause:
("Building Control Council
.—(1) There shall be established a body to be called the Building Control Council (in this Act referred to as the "Council") which shall be a body corporate with perpetual succession and a common seal.
(2) The Council shall consist of such persons as shall be appointed by the Secretary of State and shall have the functions conferred upon them in this Act and as shall be prescribed.
(3) The Council shall be established and maintain a register of approved inspectors containing the names, addresses and qualifications; and such other particulars as shall be prescribed, of all persons who are approved by the Secretary of State or by the Council under section 31(1) of this Act and any person may inspect that register during office hours without payment.
(4) All other matters relating to the conduct and proceedings of the Council shall be such as shall be prescribed.").
Amendment No. 95: After Clause 38, insert the following new clause:
("Practising certificates
.—(1) The Council shall, as soon as reasonably practicable, issue a practising certificate to a person who applies for one, if they are satisfied that—

(a) he has been approved under section 34(1) of this Act;

(b) his name is on the register maintained by the Council; and

(c) he continues to be suitably qualified in such a manner as shall from time to time be prescribed.

(2) A practising certificate shall be valid for such period, not exceeding one year, as the Council may specify in that certificate and may be cancelled or suspended by the Council on such grounds as may be prescribed.").
Amendment No. 108: Clause 42. page 43, line 28 at end insert—
("() Any person who wilfully pretends that he is—

(a) an approved inspector, or

(b) the holder of a valid practising certificate issued by the Council under section (Practising Certificates) of this Act, shall be guilty of an offence.").

Amendment No. 109: Clause 42, page 43, line 29, after ("(1)") insert ("or (2)").
Amendment No. 110: Clause 43, page 44, line 10, at end insert—(" "Council" has the meaning assigned to it by section (Building Control Council) of this Act").
For good measure, I should like to include the new Amendment, No. 78A, which can conveniently be discussed with these others.
Amendment No. 78A: Clause 34, page 35, line 15, at end insert—
("() The body designated by the Secretary of State in accordance with subsection (1)(b) above for the architectural profession shall be the Architects Registration Council for the United Kingdom (ARCUK).")
All these amendments are aimed at the quality and the form of the body of approved inspectors who will operate the new system. To prevent sectional interests
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taking advantage of the new system, we think that a separate body corporate should be established, which, apart from the Secretary of State, would be the only body capable of approving building inspectors under paragraph (b) of Clause 34(1). A building control council would ensure a consistent level of expertise in all geographical areas and grades of inspector.
The amendments and new clauses would establish such a body, to be known as the Building Control Council, whose members would be appointed by the Secretary of State and which would, under the first of the above amendments, have the function of appointing building inspectors. The first new clause would require the new council to maintain a register of all approved inspectors which would be available for public inspection free of charge. The new clause would also enable the Secretary of State to confer by building regulations all other appropriate functions to enable the new council to take a major part in securing the proper operation of the new system.
We consider that provisions should be written into the Bill to require non-local authority building inspectors to be issued with practising certificates by the new council along the lines of those issued to solicitors. The practising cerificates would be issued only in cases where the council was satisfied that the applicant should be so certified. The new practising clause would provide for the system of certification, and amendments would make it a criminal offence for any unqualified person to pretend either that he was an approved inspector or that he had held such a practising certificate.
Clause 34(8) allows inspectors to appoint others to carry out inspections. It is accepted that an approved inspector would not need to carry out all inspections—not all would need the same level of expertise. But we are concerned that the clause as presently drafted would enable approved inspectors to send out inexperienced and untrained personnel. We think that anybody who carries out inspections must have the experience and training appropriate for that level of inspection.
The proposed council would provide arrangements and guidelines for training and qualifications of anybody involved in building control and would ensure all inspections are carried out by trained personnel. In response to these amendments and new clauses, the Government will no doubt use two arguments. We have been over this ground before, and I am sorry to put the Minister through it again. I expect the Minister to say that such a body will just be another quango, and secondly, that all the professions will get together and sort the matter out between them.
The reason why I am so confident of the Minister's response is that he was kind enough to write to me in May of last year, and I was careful enough to keep the letter. He says in fact: "there is really very little between us on this issue."
He goes on rather surprisingly
"We do not want to create another quango for this purpose, and we agree with you that it would he an excellent solution if all the relevant professional bodies were to co-operate in setting up and running some kind of joint committee…We see no point, however, in restricting ourselves at this stage to "a single body". Let us see first if the professions can agree".

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That was a truly intelligent letter from the Minister in May last year.
We have waited since May of last year, and the various organisations concerned have held many discussions since May of last year among themselves and with the Department of the Environment, with a certain Mr. Watson, who appears to have called conference after conference with very little success.
The result of all these consultations is that the bodies cannot agree, or at least a majority of them cannot. A number of them are quite willing to have a joint organisation and the others are not. We do not seem to be any nearer a solution approaching it from that point of view. Therefore, our feeling is that the organisations will not co-operate without a legal requirement to do so. We are asking the Minister to bring in that legal requirement.
In speaking particularly to the new Amendment No. 78A, I should like to mention the possible composition of that council. It obviously should have representatives from many of the professional bodies who have been taking part in the consultations with the Department of the Environment. I shall not weary the Committee with the list, which is quite a long one, but there is one particular aspect of the composition of the council which we need to think about.
It is being assumed, quite naturally, that architects would wish to be included on the list of bodies from whom approved inspectors would be appointed. This is quite right and proper, though there is indeed some question about whether the training as an architect will in itself qualify them for being building inspectors. It may well be that they will have to submit themselves to some further specialised training before they can be approved. However, to be an architect is to be well on the way to being an approved inspector.
However, it seems that the Government are confining themselves to discussions with the RIBA. The RIBA is an excellent body and all its members are highly qualified, but they are no more highly qualified than many other architects who are in fact members of the Registered Council of Architects known as "ARCUK". I have here a copy of the register, which contains many thousands of names, all of qualified architects. Something like one-third to a half of them have chosen to join the RIBA. The rest of them have not, but they are not any less qualified, or any less good, architects on that account. They have simply chosen not to pay the extra fee which is required to join the RIBA.
It is our contention that, if we are to say that some of the inspectors are to come from the architectural profession, then they should be capable of coming from among all registered architects and not simply from those who have joined the RIBA. For the benefit of your Lordships who do not necessarily know it, there is no examination qualification for joining the RIBA. It is simply a matter of paying your subscription and becoming a member. I do not wish in any way to belittle that particular exercise, but many well qualified architects have chosen not to do it. That accounts for Amendment No. 78A. We feel that when the Government are considering the inclusion of
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architects they should draw them from the whole registration council and not simply from the RIBA. I hope that the Minister will deal with that point.
In the same way as my noble friend Lord Graham of Edmonton and I have had discussions with the insurance industry, so we have had many discussions with various other professional bodies who would be likely to wish to appoint approved inspectors. It is quite clear that a number of them who have attended the various conferences are well qualified to produce approved inspectors. But there was also some agreement from some members that it would be necessary to institute a separate training programme for approved inspectors and that there are certain levels of expertise, certain bits of nous, that need to be imparted to people before they set out on building control if they have not already done so. There are people who have done it in one way or another and are well qualified. We ask the Government to consider the setting up of this council and that the council should have some form of selection process through which all applicants would need to go before they could be considered as approved inspectors. I beg to move.
Lord Broxbourne: I wonder whether the noble Baroness would be good enough to give her attention to one point to which she did not refer. She told the Committee that my noble friend on the Front Bench told her some time ago that this body was likely to be a quango—a conclusion to which I had independently come myself. One of the characteristics of a quango and one of the things that involves it in criticism is expense. Nothing in the amendment nor in the speech of the noble Baroness referred to, analysed or defined the costs of setting up this council, administering it and operating it. Would the noble Baroness say a word about that before she finally resumes her seat?
Baroness Nicol: I do not know how to define a quango, but since last May we seem to have become quite good at setting up quangos for other purposes. Perhaps the resistance to it is not quite as great as it was. Where will the money come from? All the approved inspectors will be required to pay fees. I do not know what level of fees will be set, because they have yet to be "prescribed"—in the famous word which occurs throughout the Bill. But that is one source of income. One does not anticipate that the quango will be sitting permanently. One assumes that it would be a body which met at irregular intervals whenever the need to approve or disapprove of new inspectors arose.
I should enlarge a little on the disapproval element. One of the questions asked during Second Reading was who would inspect the inspectors. I seem to remember that the noble Earl, Lord Selkirk, was eloquent on this subject. The establishment of a council such as this would answer that question because the council would give and it would also take away. I do not anticipate it sitting as a permanent quango. I would assume that its meetings would he irregular, not necessarily expensive and I would not expect any of the bodies concerned to want to charge heavily for their services because it would be in their interests to see that their members were able to enjoy this new career which was being opened up to them.
10.5 p.m.
Lord Skelmersdale: May we first dispose of my May 1983 letter? It surprised me that it was produced in evidence and waved before my face. However they have an expression of the west coast of Scotland, which I am sure the noble Baroness knows, which is "We think better later". I may have been intelligent then, but my thoughts and those of my respondents have clarified as a result of consultation. I should say that there is yet more to come before we achieve total purity.
This group of amendments would effectively remove the power of the Secretary of State to designate bodies for the purposes of approving inspectors and would instead empower a new statutory body or council to do so. It would also introduce a number of related constraints. The proposed council is defined in Amendment No. 94 as a building control council which would be a body corporate, consisting of persons approved by the Secretary of State with functions to be prescribed. It would be a quango, although that is not the total of our objection to it. We do not see the case for this system of achieving objectives. As the Committee are aware, we have been consulting the main professional institutions whose members have a claim to he approved inspectors. I will get on to those about whom the noble Baroness is doubtful in a minute.
Their response so far has been helpful and constructive, indicating a considerable measure of agreement on the main principles of approval; that is to say, professional qualifications, relevant practical experience coupled with some specific demonstration of knowledge of the building regulations. Many of the institutions have said that they wish to become designated bodies and they are continuing their discussions on these standards and possible grades of inspectors with a view to reaching agreement among themselves. Again, all is not yet lost. In particular, they agree the need for a common syllabus on which candidates for approval will be tested on their knowledge of the various regulations and approved document. Our consultation with these institutions will continue and we have no intention of doing away with the powers of the Secretary of State to designate those whom he considers appropriate.
There is always a danger with a long list of linked amendments that there will be a slip up. I can only assume that Amendment No. 81 was put in in a sense of exuberance. This would remove the Secretary of State's power to make regulations requiring the withdrawal of approval in certain circumstances. The latest draft regulations require that any inspector convicted of the offence of giving a false certificate should immediately have this approval withdrawn and I fail to see why the Opposition should object to this. Amendments Nos. 81 and 84 are I think largely consequential. Amendment No. 86 relates to a particular aspect of certification.
Clause 34(8) of the Bill provides that an approved inspector may delegate work to another person; for example, another member of his firm or a specialist in some aspect of construction work. But an inspector will not be able to delegate the giving of a plans certificate or a final certificate. Only the approved
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inspector will be able to give such certificates and he will be liable by statute for any negligence on the part of a person to whom he delegates the work. It follows that an inspector will only entrust such work to a person whose technical qualifications and experience he can completely rely on.
Another important consequence of this provision is that in the event of defect occurring there would be only one approved inspector who would be answerable to the building owner. Amendment No. 86 would prevent an inspector from delegating work to anyone other than a person approved by the council. The criteria for such approval are not apparent but if this means another approved inspector, it would he very restrictive and if it does not it implies the need for separate approvals in each discipline. Either way the case is not made. Given the responsibility which the approved inspector carries, he can be relied on to exercise it in delegating work to others.
Amendment No. 108 would create an apparently new offence; namely, that of wilfully pretending to be an approved inspector or the holder of a certificate given by the council. However, there is no need for such a provision because Clause 42(l) already makes it an offence knowingly or recklessly to make a false statement in a notice or certificate. That would include a false claim to be an approved inspector. Amendment No. 109 is consequential.
Finally, in this first group of amendments which we are considering, Amendment No. 95 aims to define the manner in which the proposed council would issue so-called practising certificates to inspectors who applied to them for approval. Such certificates would only be valid for one year. The council would have the power to cancel a certificate after a shorter period, but no power to extend it beyond a year. I really cannot, if I were to go along the noble Baroness's route—which I am not—see any justification for such complicated and bureaucratic procedure quite apart from my objection to the idea of the council itself. We doubt the need for approval to be subject to annual renewal. Inspectors will be responsible professional people, whose qualifications and probity do not need to be re-established every year. However, as a result of our discussions with the professional institutions, the Government have concluded that a period of five years would be appropriate for approvals, in order to ensure that inspectors did not become out of touch with developments in building and the building regulations. The Committee will shortly be considering the Government's amendment to Clause 34, to allow regulations to prescribe a period for approval, and our latest draft regulations anticipating this provision state that approvals will last for five years.
We now get to the thorny problem of unattached architects. As I have said, the department has been consulting, and is continuing to consult, professional institutions on the procedures and criteria for the approval of inspectors. The Architects Registration Council of the United Kingdom (ARCUK) indicated at an early stage that it did not feel that it would be possible to involve itself in this matter, which could better he dealt with by the professional bodies. We have continued to keep ARCUK informed by sending them copies of our consultation documents, but I

255
understand that the council's view remains that it is not a job for it.
It is true that some of the functions of ARCUK in maintaining standards and keeping a register have something in common with those of a designated body under the proposals of the Bill. However, ARCUK's functions are set out in precise detail in the architects' registration Acts and the Government do not propose to amend this legislation to widen its role. In our consultation documents we have frequently pointed out the need for arrangements for the approval as inspectors of unattached architects, who prefer not to belong to professional institutions, inviting suggestions as to how this might be done.
It is not our intention that membership of an institution shall be a prerequisite for approval. Furthermore, there is no reason, in principle, why a designated body's power to approve applicants should be limited to its own members. I hope that this will provide quite a lot of comfort to those who have been advising the noble Baroness. I have much more that I could say, but I hope I have said enough to explain to the noble Baroness why, although there are some worries behind her amendments, I do not think they are justified and therefore I could not support them.
Viscount Hanworth: Before the noble Lord sits down, can he answer one or two questions? First, can he give some indication as to how many bodies are likely to be designated to approve the inspectors? If, as I imagine, there are a considerable number, does he suppose that they will co-ordinate what they are doing without somebody—maybe the Government themselves—co-ordinating or helping to co-ordinate? Secondly, who will deal with the discipline and the complaints, because throughout professional bodies we always have someone who takes complaints—possibly not effectively, as we consider, with the solicitors; but. at least, there is somebody. Who on earth will do it in this instance? I suggest that, unless they appoint a council or keep the designated bodies to a minimum, somebody—it may be the Government or perhaps they can persuade one of the bodies—will have to perform the co-ordinating function. Clearly, the system will not work with more than, say, four designated bodies, unless that is done.
Lord Skelmersdale: In answer to those two questions, 18 to 20 are being consulted at the moment, but not all of them will be approved. As regards discipline, which I think may be the more important of the noble Viscount's two points, the professional bodies will police the people whom they approve, because it will be in the professional bodies' interests so to do. Otherwise, by definition, they will lose the respect of everybody, which is to nobody's advantage.
Viscount Hanworth: The Minister must realise this. If there are 12 or even more bodies, Heaven help the consumer who has to find out which body to approach, all of which will have different arrangements, unless there is co-ordination. The Minister simply has not satisfied anybody that this is a sufficiently thought-out scheme which is sufficiently co-ordinated to work.
Baroness Nicol: The noble Viscount is quite right. This seems to me to be a very ill thought-out scheme. The Minister raised one or two points. First, we welcome the fact that the Government will look outside the professional institutions for other approved inspectors. I apologise for pressing the point about ARCUK, but can the Minister assure me that when they appoint representatives of the architectural profession they will not require members of ARCUK necessarily to make their application through the RIBA? Will they be able to go straight to the Secretary of State? Secondly, the council of ARCUK, which made the decision that they would not wish to be one of the bodies to be consulted because they do not possess the machinery, had a majority of members of the RIBA on the board and present at the meeting when the decision was made. And it was not a unanimous decision. I hope that the Minister will take that into account when he makes his further investigations.
The Minister said about our amendments that the Secretary of State's powers to appoint would be excluded. They are not. They are left in the Bill. The Secretary of State and the council will have the power to approve inspectors. We have no intention of curbing the power of the Secretary of State.
Lord Skelmersdale: At this stage this must be the last question that I answer on this amendment. I am not being unhelpful to the Committee but I feel we have given the amendment a pretty good run. I fully intend to write to every Member of the Committee who has spoken, because obviously there are many matters which continue to worry people. To answer the question of the noble Baroness, Lady Nicol, theoretically the Bill would allow the unattached architects to be approved directly by the Secretary of State. But we do not intend this to happen. Nor do we intend to request architects to be approved by the RIBA, a point which I understood the noble Baroness to say worries some of them. There are two other possible designating bodies which would be able to approve architects. These go under the acronyms FAS and IAAS.
Baroness Nicol: I understand the Minister's wish to bring the proceedings to a close, but I really must protest—
Baroness Trumpington: Order! The Minister has given an assurance that he intends to write to those noble Lords who have spoken and that he understands the worries which have been expressed. We have spent 27 minutes on this amendment. If noble Lords wish to continue the discussion they may, but I hope that the noble Baroness will consider the Committee.
Baroness David: Could I remind the Minister that this is the Committee stage and that there is no limit to the discussion. Because it happens to be after 10 o'clock and noble Lords opposite perhaps want to go home to bed this does not prevent my noble friend from asking questions and expecting to receive positive and respectable answers. The interruption was not justified.
Baroness Nicol: It is not my intention to pursue the matter much further. However, our view is that three matters of great importance are to be found in this part of the Bill. This happens to be one of them. It is not our choosing that it is being considered at this time of night. Therefore, we shall return to it at Report stage. I hope that the answers which the Minister has promised will be received in good time before Report stage. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 78A not moved.]
10.20 p.m.
Lord Skelmersdale Lord Skelmersdale moved Amendment No. 79:
Page, 35, line 23, at end insert—
("() There shall be paid on an application for any such approval as is referred to in subsection (1) above—

(a) where the application is made to the Secretary of State, such fee as may be prescribed by building regulations;

(b) where the application is made to a body designated by him as mentioned in that subsection, such fee as that body may determine. ").

The noble Lord said: On behalf of my noble friend, I wish to move Amendment No. 79 and speak also to Amendments Nos. 80, 82 and 83.
Amendment No. 80: Page 35, line 25, leave out paragraphs (a) and (b) and insert—
("(a>) contain provision prescribing the period for which, subject to any provision made by virtue of paragraph (c) or (cc) below, any such approval as is referred to in subsection (1) above shall continue in force;").
Amendment No. 82: Page 35, line 31, leave out ("so referred to") and insert ("referred to in that subsection").
Amendment No. 83: Page 35, line 33, at end insert—
("(cc) contain provision authorising the withdrawal of any such approval or designation as is so referred to;").
These amendments make detailed changes to the procedure for improving inspectors and reflect the discussions we have been having with the professional institutions which are interested in becoming designated bodies. The effect of Amendment No. 79 will be that each designated body will be able to fix its own fee for considering applications for approval rather than having them prescribed by the Secretary of State. This of course was the statement in Command Paper 8179, paragraph 30, that approval arrangements will be expected to be self-financing. Where application for approval is made to the Secretary of State the fee will be prescribed in regulations.
The effect of Amendment No. 80 will be to enable approval to be limited to a prescribed period, renewable upon application. There was strong support for this proposal from professional institutions and the current draft of the approved inspectors, et cetera, regulations, in providing that approval shall cease to have effect for five years after it is given, anticipates this amendment to the Bill—I hope, correctly. Amendments Nos. 82 and 83 are consequential. I beg to move.
Lord Graham of Edmonton: Despite the possibility of incurring the wrath of the noble Baroness, Lady Trumpington, I have the temerity to believe that I ought to ask some questions even at this time of night.
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May I be clear that what is proposed is the possibility that if there are 15 designated bodies, there could be 15 different fees for the same kind of work? If I read the amendment correctly—and I have been known to misread an amendment—that will be so if every separate designated body is allowed to set its own fees.
For instance, one knows that if one wants to get a certain job done by the local council there is a scale of building fees to be paid. Whatever the quality of the work, the fee prescribed for one dwelling house is £32. The fee for 10 dwelling houses is £214. If it is a building having a value below £100,000, the fee is £411. If the value of the building is below £500,000, the fee is £1,458. If the building is valued at under £1 million, the fee is £2,169.
Is it being proposed that where a developer looks at the range and totality of his responsibilities and asks, "To whom shall I go regarding an approved inspector?", he will then look at the field and see that it includes the cost of going to one body or another. The register is kept at the local authority, and when he asks for the list he will see that, according to whether one is a member of one professional body or another the fee is different. Will this not lead to the possibility that when a profession sees that it is being consistently priced out of the market, it will then decide to lower its fees? That may lead to a lowering of efficiency. If I am wrong, I shall be grateful to be put right.
Lord Skelmersdale: The noble Lord has got it wrong and I am equally sure it is my fault for rather gabbling through my explanation. The fees in question are the fees a body would charge its members for approval. We are not talking about the fees that the inspector charges the developer for the certification work he is going to do.
Lord Graham of Edmonton: I did get it wrong, but one is left with this intriguing point: in order to be an approved inspector, if one is an architect the fee might be £100—because that is perhaps what the RIBA decides to charge its members. But if one is a structural engineer, that profession's designated body might be charging its members £200 or £25. In effect, to be an approved inspector one may be paying different rates according to one's profession. Will that not lead at least to the comment that in order to be an approved inspector one looks at how much it costs. One is then beginning to see a different scale and grade of the value and quality of the approved inspectors themselves.
Lord Skelmersdale: The noble Lord forgets about the magic word "competition". I have no doubt that fees in this respect will be broadly equal across the full range of designated bodies.
On Question, amendment agreed to.
Lord Skelmersdale Lord Skelmersdale moved Amendment No. 80:
[Printed earlier.]
On Question, amendment agreed to.
[Amendment No. 81 not moved.]
Lord Skelmersdale Lord Skelmersdale moved Amendments Nos. 82 and 83:
[Printed earlier.]
The noble Lord said: I beg to move these amendments en bloc.
On Question, amendments agreed to.
[Amendments Nos. 84 to 86 not moved.]
Clause 34, as amended, agreed to.
Baroness Trumpington: I beg to move that the House do now resume.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.

Derwent Valley Railway Bill [H.L.]
Reported from the Unopposed Bill Committee without amendment.

London Docklands Railway Bill
The Queen's Consent was signified; Bill reported from the Unopposed Bill Committee with amendments.
House adjourned at twenty-seven minutes past ten o'clock.

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