Sitting of 30 October 1984

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

    PRIVATE BILLS [Lords] (SUSPENSION)
    Ordered,
    That so much of the Lords Message [29th October] as relates to the Leicestershire Bill [Lords], the Oxfordshire Bill [Lords], and the Surrey County Council Bill [Lords] be now considered.
    Resolved,
    That this House doth concur with the Lords in their Resolution.—[The Chairman of Ways and Means.]

    MERSEYSIDE DEVELOPMENT CORPORATION BILL AND ASSOCIATED BRITISH PORTS (No. 2) BILL
    Ordered,
    That so much of the Lords Message [29th October] as relates to the Merseyside Development Corporation Bill and the Associated British Ports (No. 2) Bill be now considered.
    Ordered,
    That the Promoters of the Merseyside Development Corporation Bill and the Associated British Ports (No. 2) Bill shall have leave to suspend proceedings thereon in order to proceed with the Bills in the next Session of Parliament, provided that in the case of each Bill the Agents for the Bill give notice to the Clerks in the Private Bill Office of their intention to suspend further proceedings not later than the day before the close of the present Session and that all fees due on the Bill up to that date be paid;
    Ordered,
    That on the fifth day on which the House sits in the next Session the Bills shall be presented to the House;
    Ordered,
    That there shall be deposited with each Bill a declaration signed by the Agents for the Bill, stating that the Bill is the same, in every respect, as the Bill at the last stage of its proceedings in this House in the present Session;
    Ordered,
    That each Bill shall be laid upon the Table of the House by one of the Clerks in the Private Bill Office on the next meeting of the House after the day on which the Bill has been presented and, when so laid, shall be read the first, second and third time and shall be recorded in the Journal of this House as having been so read;
    Ordered,
    That no further fees shall be charged in respect of any proceedings on the Bill in respect of which fees have already been incurred during the present Session;
    Ordered,
    That these Orders be Standing Orders of the House.—[The Chairman of Ways and Means.]

    GREATER LONDON COUNCIL (GENERAL POWERS) BILL
    Ordered,
    That in the case of the Greater London Council (General Powers) Bill Standing Order 208 (Notice of consideration of Lords Amendments) be suspended and that the Lords Amendments be now considered.—[The Chairman of Ways and Means.]
    Lords amendments agreed to.

Oral Answers to Questions
  EDUCATION AND SCIENCE

    Local Authorities (Education Expenditure)
    Mr. Boyesasked the Secretary of State for Education and Science what information his Department has received on the level of local authority spending on education in 1984–85 as compared with the level implied in the calculations used to determine aggregate rate support grant.
    The Parliamentary Under-Secretary of State for Education and Science (Mr. Bob Dunn): Local authorities' budget estimates for expenditure on education, including meals and milk in 1984–85, imply a level of spending something over 7 per cent. above the 1984–85 RSG settlement figure.
    Mr. Boyes: Is the Minister aware that many local authorities, including Conservative-controlled ones are concerned that they cannot provide adequate levels of education services because of the Government's disastrous, disgraceful and diabolical squeeze on education finances? [HON. MEMBERS: "More."] It is all very well for the public school lads on the Conservative Benches to laugh about this Even more important is that the Secretary of State's advisers, Her Majesty's inspectors, have expressed considerable concern about the education services.
    Mr. Dunn: Expenditure on schools by local education authorities has fallen far less rapidly since 1979 than pupil numbers, which declined by 50 per cent. over the period. Expenditure per pupil in real terms has risen each year and is now at a record level. It is important to spend more efficiently than to spend more money.
    Mr. Fisher: Will the Minister make a statement on the report that some Conservative-controlled authorities, which have not been providing reasonable resources for education in their budgets, are to submit a report to him criticising Her Majesty's Inspectorate?
    Mr. Dunn: That does not fall within this question. However, the effect of rate support grant settlements on education will depend on the ability of local education authorities to use their resources efficiently. Many authorities could do much more and do it so much better.
    Mr. Radice: Why has the Minister become involved in such an obviously partisan attack on HMI, which is the Secretary of State's advisory body? If the Minister wants to help Conservative local authorities by helping them to avoid the embarrassment of critical HMI reports, why does he not give them more resources?
    Mr. Dunn: The hon. Genlleman is referring to a matter which has been aired in the press. I am prepared to meet representatives from any political party on any education matter. Even the Socialist Education Association will receive a hearing from me if it has anything reasonable to say, but it will have to be reasonable.

    Schools (Parental Influence)
    Mr. Cockeramasked the Secretary of State for Education and Science what response he has received to the Green Paper on parental influence in schools.
    Mr. Flanneryasked the Secretary of State for Education and Science if he will make a statement on future legislation on the composition of school governing bodies.
    The Secretary of State for Education and Science (Sir Keith Joseph): Responses to the Green Paper have been received from over 650 individuals and organisations. The Government are now carefully considering the way ahead in the light of those responses and will make a statement in due course.
    Mr. Cockeram: Will my right hon. Friend remember that, at the end of the day, our schools exist for the benefit of our children and their families, not the unions? Will he also remember that the representations that he has received from the unions are well orchestrated and organised, whereas those from parents are diffuse and not so well organised, and will he take that into account in weighing the representations that he has received?
    Sir Keith Joseph: I agree with my hon. Friend that education is for the children. I shall certainly weigh carefully all the representations that have been made. I shall seek to find as much approval as I can for the general views expressed in the consultation paper on the composition of school governing bodies. The Government are carefully considering the representations that have been made, which, in most cases, were rather hostile.
    Mr. Flannery: Does the Secretary of State visualise the majority on the governing body being parents who, for instance, have any or all of the say on the school's curriculum? Has the right hon. Gentleman taken into account the fact that the impact on the curriculum would have definite repercussions in highly vocal areas, as opposed to areas—often in working class districts—where parents are not highly vocal?
    Sir Keith Joseph: I make no apology for the Government's view that it would be sensible to have a majority of parents on governing bodies, because we believe that the great majority of parents are trustworthy people who, if given appropriate powers as school governors—I include parents who come from the areas to which the hon. Gentleman referred — will seek to exercise those powers responsibly and for the common good. As I rather lightly said in answer to my hon. Friend the Member for Ludlow (Mr. Cockeram), the Government have found that the consultation paper has produced a rather hostile set of views against that proposition, and we are now considering those views.
    Mr. Forman: As my right hon. Friend has been asked to do so by the local education authority in the London borough of Sutton, in which my constituency is situated, will he take full account of the cost and administrative implications of some of the changes and ensure that local authorities are not out of pocket as a result?
    Sir Keith Joseph: There might be a certain amount of disagreement about the cost implications of the Government's proposals, but I shall certainly take into account the views expressed by those who have replied.
    Mr. Beith: Does the Secretary of State recognise that quite a lot of the overwhelming opposition to his idea has come from parent groups? Does he understand that many of those parents who serve on governing bodies are sick to death of local authority party political representatives trying to run the bodies with a majority block vote? They do not want parents to be brought into the same act; they would rather that schools were run as a partnership between parents, the local authority and the community.
    Sir Keith Joseph: I agree with part of what the hon. Gentleman said. I note that the Liberal party, in its response to the consultation paper, has come out against the Government's proposals, although the hon. Member for Cambridgeshire, North-East (Mr. Freud) greeted my announcement of the Government's proposals as "pure high octane Liberal policy".
    Mr. Peter Bruinvels: Will my right hon. Friend take note of the fact that already there are a number of problems with co-opted members — for instance, on the Leicestershire education authority—defeating the elected members of the Conservative group? Will there not be even more problems when parents are given additional representation?
    Sir Keith Joseph: My hon. Friend has illustrated the complexity of the issues that must be sorted out. The Government are urgently considering the replies to the consultation paper.
    Mr. Andrew F. Bennett: Would it not be better if the Government came clean, abandoned their proposals to change the 1980 Act and the tripartite approach to governors and got on with the much more serious task of ensuring that all local authorities quickly implement the 1980 Act? Would it not be better to look at ways in which parents on governing bodies can be much more responsive to other parents in the community and be elected in some genuine democratic way? Too often, a person on a governing body is simply a friend or a person persuaded to serve on the governing body by the head of a particular school.
    Sir Keith Joseph: I would have more respect for what the Labour party now suggests if it had acted more quickly on its own Taylor committee report and managed to get any legislation through before it was thrown out of office.

    Burnham Further Education Committee
    Mr. Gerald Bowdenasked the Secretary of State for Education and Science whether he will now review the membership of those teacher unions in further education, including tertiary colleges, with a view to revising the membership of the Burnham Further Education Committee.
    Mr. Dunn: My right hon. Friend the Secretary of State has no plans to review the membership of the Burnham Further Education Committee at the present time.
    Mr. Bowden: I am rather disappointed with that answer. Will my right hon. Friend the Secretary of State reconsider the position and re-examine the structure of all Burnham committees to ensure that all teachers are properly and fairly represented on the primary and secondary and further and higher Burnham committees?
    Mr. Dunn: I am sorry that I should disappoint my hon. Friend. The last review of the Burnham Further Education

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    Committee was completed in December 1981 — a relatively recent date — and no strong representations have been made since then about a further review. However, I am sure that my hon. Friend's views have been noted by my right hon. Friend the Secretary of State.

    Financial Management
    Mr. Thurnhamasked the Secretary of State for Education and Science what further plans he has for controlling resources in his Department following the "Report on Financial Management in Government Departments".
    Sir Keith Joseph: Further work in hand to improve the effective use of resources in the Department includes the application of new office technologies, efficiency studies of common service operations and the development of a financial management information system for the Department's running costs.
    Mr. Thurnham: Does my right hon. Friend agree that there is scope for the privatisation of services controlled by his Department?
    Sir Keith Joseph: The Department has already contracted out its cleaning services. Perhaps I can amend my hon. Friend's suggestion and say that there is plenty of scope for further privatisation in the local authorities' education services.

    Teachers (Pay)
    Mr. Jim Callaghanasked the Secretary of State for Education and Science if he will now agree to make additional funds available to local authorities to meet the costs of any pay increase recommended for teachers by the arbitration panel.
    Sir Keith Joseph: No, Sir.
    Mr. Callaghan: I thank the Secretary of State for that explicit reply. Is he aware that there is widespread despondency and extremely low morale among the teaching profession, which it is affecting the standard of education in schools? Does he accept that he should make the teachers an improved pay offer if he is to improve that morale and, consequently, the standard of education?
    Sir Keith Joseph: The hon. Gentleman was one of many who urged the Government to accept arbitration over the last teachers' pay claim. In reply, I constantly said that, arbitration or not, there would be no extra money available. He now urges me to find extra money and seems not to have learnt the lesson of what I said last time. To the extent that there is low morale, it must stem largely from the false expectations raised amoung teachers by the totally unrealistic pay claim put forward by their trade union leaders.
    Mr. Forth: Was it not made perfectly clear throughout to the teachers that the resources available were necessarily limited and that each extra percentage point for which they pushed would cause a reduction in resources elsewhere? Are we not now seeing the inevitable result?
    Sir Keith Joseph: I wish that I could put it as effectively and vividly as my hon. Friend.
    Mr. Meadowcroft: Does not acceptance of the legitimacy and independence of the arbitration procedure
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    entail acceptance of the need to provide the cash to meet it? Is it not cloud-cuckoo-land to assume that an increase in the largest part of the largest item of a local authority's budget will not otherwise inevitably result in fewer teachers? Is that the right hon. Gentleman's intention?
    Sir Keith Joseph: That just cannot be true where there are cash limits, as there are in this service. It is not possible to respect the interests of the whole country with regard to employment and low inflation if the Government lose control of such essential heavy items of public spending as local authority expenditure.

    Examination's (Grade-related Criteria)
    Dr. Twinnasked the Secretary of State for Education and Science what progress has been made towards the establishment of grade-related criteria for examinations.
    Sir Keith Joseph: The Secondary Examinations Council started work last month on developing grade-related criteria for a first batch of 10 subjects at GCSE. The council hopes to publish draft criteria for these subjects in the summer next year and to invite comments on them. The council plans to tackle further subjects next year.
    Dr. Twinn: Despite the misgivings expressed by some members of the teaching profession, does my right hon. Friend agree that the introduction of grade-related criteria examinations will be widely welcomed by parents, who are concerned about the introduction of absolute standards in school testing, and by employers, who need to know the value of the qualifications being offered?
    Sir Keith Joseph: I agree that grade-related criteria should motivate teachers, pupils and parents, and give more information to employers. I am very glad that the Secondary Examinations Council and the examination boards are finding it possible to embark so quickly on the task.
    Mr. Sheerman: It is important that examinations should be able properly to measure competence, but is it not also important to understand that in our schools and education establishments we must have the resources to bring people up to the competence that is then examined? Is that not the real fault in the education system under the Secretary of State's government?
    Sir Keith Joseph: Resources are certainly an essential ingredient, but it is wrong to hammer away, as the Opposition do, at the assumption that resources alone control results. That is the constant chorus of Opposition Members. Resources matter, but the effectiveness of the teachers and the motivation of the children matter even more.

    Teachers (Pay)
    Mr. Greenwayasked the Secretary of State for Education and Science if he will make a statement on the talks aimed at restructuring the pay and conditions of service of the teaching profession.
    Mr. Proctorasked the Secretary of State for Education and Science if he will make a statement on proposals for restructuring of teachers' salaries and terms and conditions of employment.
    Sir Keith Joseph: Discussions in the Burnham joint working party on salary structure were adjourned on 13 July to enable the management panel to consider a number of points made by the teachers' panel. A further meeting has been arranged for 15 November.
    Mr. Greenway: Is it not preposterously stupid that the Burnham committee has been able to discuss teachers' pay but not conditions of service for the past 20 years, due to an enactment of a previous Labour Government? Is it not now important for the structure talks to get going again, with a view to making clear to teachers their promotion prospects and the penalties for not doing their job?
    Sir Keith Joseph: I agree with my hon. Friend's conclusion, but the very fact that the joint working party on salary structure has been convened, has been sitting, and is continuing to sit, shows that the Burnham committee is not a barrier if there is a will to discuss pay and conditions of service factors at the same time.
    Mr. Proctor: Does my right hon. Friend agree that the teachers' pay claim for 1985 is totally unrealistic? Would they not be better off negotiating a revised pay structure linked to performance?
    Sir Keith Joseph: I entirely agree with both limbs of my hon. Friend's proposition. I find it worrying that the leaders of the teachers' unions seem ready to enter into negotiations with a claim which they must know is unrealistic. I am appalled by their suggestion that it may prove necessary to prosecute the claim by further disruptions of the education provided in the schools.
    Mr. Flannery: Is it not a fact that, since the fulfilment of the Houghton report after the Labour Government came into office in 1974, teachers' pay has dropped behind, to the point where all the earlier gains have been lost? Is it not true that the vast majority of teachers linger on scales 1 and 2, which are pitiful, and even less than a three-month trained policeman gets at the start? That is the reality. What does the Secretary of State propose to do about that betrayal of the teachers and the demoralisation of the teachers consequent upon that betrayal?
    Sir Keith Joseph: I hope that the hon. Gentleman will join me in totally condemning any disruption of children's education, whatever the teachers' views.

    National Body for Higher Education
    Sir William van Straubenzeeasked the Secretary of State for Education and Science when he expects to announce changes in the membership of the National Advisory Body for Higher Education.
    The Parliamentary Under-Secretary of State for Education and Science (Mr. Peter Brooke): My right hon. Friend will be announcing the full membership of the board of the National Advisory Body nearer the time of its formal reconstitution on 1 February 1985.
    Sir William van Straubenzee: I thank my hon. Friend for that reply. Does he agree that the work of the board has greatly justified itself, because there has been a new and useful influence in the area in which it works? Will he assure me that he will be giving very close consideration to the representation of industrial and commercial employers and of the professions when the reconstituted board membership is announced?
    Mr. Brooke: I am grateful to my hon. Friend for his comments about the work of the NAB. My right hon. Friend has it in mind to appoint two additional representatives of industry, commerce and the professions, and will welcome advice from interested parties, including the Confederation of British Industry.

    Young Persons (Benefits)
    Mr. Kilroy-Silkasked the Secretary of State for Education and Science what contact his Department has had with the committee reviewing welfare provision for children and young people, given its stated intention to review the present relationship between the level of benefits provided for young people and provision for those undergoing full-time education and training.
    Sir Keith Joseph: The Department has provided information to the review secretariat on financial support for students, which, as the hon. Member has noted, is one of the topics being considered by the review.
    Mr. Kilroy-Silk: Is it not absolutely crazy that so many youngsters, especially in my constituency, should be compelled through economic necessity to leave school early, even though they have clear ability and potential, and join the dole queue or youth training schemes? Would it not make more sense to support them in full-time education by providing educational maintenance grants? Will the Secretary of State ensure that those representations are made forcefully in the review?
    Sir Keith Joseph: I am not convinced by what the hon. Gentleman says; nor am I convinced that priority should be given to the very large cost involved, with its very big dead weight. I am not aware of firm evidence that large numbers of youngsters decide whether to remain in or leave education according to the benefits available to them.
    Mr. Greenway: Is my right hon. Friend aware that, during a recent visit to France, the Select Committee was surprised to find that parents have their family allowance withdrawn if children behave badly and consistently abscond from school?
    Sir Keith Joseph: I am not sure that my hon. Friend's information is wholly up to date, nor how such a system works in practice. I shall be interested to read the Select Committee's report.
    Ms. Clare Short: What has happened to the 21-hour rule, which was supposed to permit youngsters on supplementary benefit to study rather than be forced to do nothing? I find it depressing that the Department has made no progress on that matter. Are not many youngsters who want to study being forced not to do that so that they can claim benefit?
    Sir Keith Joseph: I am surprised at the hon. Lady's conclusion. I thought that there had been modest progress on that front. If the hon. Lady will send me any evidence she might have, I shall be glad to study it.
    Mr. Hind: Will my right hon. Friend consider the problem faced by many 16-year-olds who would like to undertake further education but are stuck with claiming supplementary benefit, joining a youth training scheme or, if they are lucky, receiving very small maintenance grants from local authorities? If education is to benefit that age group, is there not real scope for studying that problem?
    Sir Keith Joseph: Certainly the Government are continuously studying that problem. However, there is no strong evidence to suggest that large numbers of young people make their decisions on that ground alone. Many youngsters find it in the interests of their future prospects to continue at school and gain qualifications.
    Mr. Meadowcroft: Will the Secretary of State discuss with his colleagues in the Cabinet the possibility of the same amount of cash being made available whether people are in education training, on MSC schemes or—if all else fails—unemployed? Would that not be more beneficial than compartmentalising them?
    Sir Keith Joseph: I am interested in the hon. Gentleman's suggestion, but not clear what he means by the same amount of cash. If he cares to write to me and develop his idea, I shall consider it.
    Mr. Sheerman: Will the Secretary of State admit that if he does not begin to come out of his corner fighting for education and for the educational aspirations of youngsters people will take away the possibilities and potentials? Is it not time that he stood up for education? Otherwise, people in the DHSS, the MSC and the noble Lord Young will take it all away from him.
    Sir Keith Joseph: If the hon. Gentleman and the Labour party recognised that in many parts of the country much better use could be made of the huge sums of money already going to school education, they might do some good.

    Education Resources
    Mr. Cohenasked the Secretary of State for Education and Science if he will increase the level of education resources allocated to areas of high social need.
    Mr. Dunn: The varying social circumstances of different local education authorities are taken into account in the way rate support grant is allocated to individual authorities.
    Mr. Cohen: As the Minister responsible, does the hon. Gentleman not think it wrong that no proper account is taken of social deprivation in the distribution of the further education pool? Is the Minister not being cynical when he says that local authorities can fill this gap, when they are often hard-pressed and subject to rate-capping because of the Government's policies? When will he accept his responsibilities for east London, where we have the lowest proportion of youngsters going on to higher education, and put up the finance?
    Mr. Dunn: The hon. Gentleman shows that it is easy to demand higher expenditure in education. Opposition Members must begin to realise that higher expenditure by local or central Government must be at the expense of other sectors and services.
    Mr. Roger King: In last night's Dudley Evening Mail a Black Country employer with job opportunities is quoted as saying that standards of literacy and numeracy among those who apply for jobs are appalling. They included some people who thought that there were seven weeks in a year. Never mind about extra resources; is my hon. Friend satisfied with what he is getting now?
    Mr. Dunn: I shall undertake to read the Dudley Evening Mail every night. We are not satisfied with the
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    standards being achieved by many of our schools. The whole thrust of the Secretary of State's Sheffield speech was to highlight the need to improve standards at all levels and at all times.
    Mrs. Renée Short: Is the Minister aware that one of the most grievous results of his financial policies in the socially deprived areas is that there has been a considerable cut in the number of welfare staff employed in schools? Does he realise that in areas of high unemployment that places a considerable burden on the teaching staff and is a considerable disadvantage to single-parent families? Will he reconsider the matter and see that the resouces are made available to those areas of high unemployment, such as mine, where the level is above 16 per cent.?
    Mr. Dunn: I note the hon. Lady's sincerity and her robust views on the matter. I can only undertake to study the matter that she has raised and see what I can do.
    Mr. Stanbrook: My hon. Friend will no doubt agree that the children of poor parents in inner city areas suffer not just from a lack of parental encouragement but from the low quality of staff, discipline and buildings. If we are to promote equal opportunities for all children, how will we overcome those inbuilt obstacles?
    Mr. Dunn: The deployment of resources between different services is a matter for each local authority. Members of the local education authority have a duty to take account of the difficulties there. I must point out, however, that in inner London the GLC, ILEA and local London boroughs, rates are having the effect of driving out employers — those who seek to create work—at the expense of those who need work.

    Higher Education
    Mr. Easthamasked the Secretary of State for Education and Science what plans his Department has to review its expenditure policies on higher education in the light of the publication of "Report on Education" No. 100.
    Dr. Marekasked the Secretary of State for Education and Science if he has any plans to review his Department's policies on expenditure on higher education as a result of "Report on Education" No. 100.
    Mr. James Lamondasked the Secretary of State for Education and Science what level of resources lie expects to make available to higher education institutions to meet the level of demand for student places until the end of this decade predicted by his Department's recent "Report on Education" No. 100.
    Mr. Brooke: The revised projections of student demand in "Report on Education" No. 100 will be taken into account in the normal course of the Governments annual review of their expenditure plans.
    Mr. Eastham: Do not the Minister's figures fail to take into account the growing trend of female students? Is it assumed that there will be no increased participation by female students in the future? Why does the Minister always seem to think that higher education students will come from middle-class families and that there will not be more from working-class families? If the Department's assumption on the figures is found to be wrong, what will the Minister do to put the matter right?
    Mr. Brooke: All the comments on the earlier projections were carefully considered and the Department has produced a technical report outlining the changes that have been made as a result. I appreciate that some people may still not be satisfied, but the important thing about those projections is that, because they do not imply any immediate fall in demand, they give us time to plan and consider trends as they emerge before any action is taken. I can assure the hon. Gentleman that we shall continue to monitor events as they develop.
    Dr. Marek: Is the Minister aware that one comprehensive school in my constituency is being asked to cease teaching physics and to curtail classes in computer science from 1985 onwards? Is the Minister not at all worried about that? If he is, will he give the House an assurance that all children will have full opportunities to take advantage of the policies, such as they are, resulting from the Department of Education and Science "Report on Education" No. 100?
    Mr. Brooke: I cannot comment on the particular point that the hon. Gentleman made about his constituency, but I hope that he will write to me about it. Of course, I give an assurance that the initiatives which the Government are taking seek to respond to the demands not only in science, engineering and technology, but in the arts.
    Mr. James Lamond: Is it the Minister's intention further to reduce, in relation to the funds provided for universities, the funds for degree students at polytechnics and similar institutions? If that is his intention, will he bear in mind that if our country is ever to prosper we shall need more technically qualified young people?
    Mr. Brooke: That matter is not strictly relevant to this question, but my right hon. Friend the Secretary of State has now formally consulted the local authority associations about the size of the advanced further education quantum in 1985–86. Although final decisions have not yet been taken on student number targets for that year, present indications are that the 1984–85 planned unit of resource will be broadly maintained in real terms for 1985–86.
    Mr. Patrick Thompson: Will my hon. Friend take this opportunity to explain clearly to the House what has actually happened to student numbers since 1979?
    Mr. Brooke: In 1983–84 there were 519,000 home students in full-time and sandwich courses in higher education, compared to 455,000 in 1979–80. The numbers of full value award holders have risen in the same proportions.
    Mr. Nicholas Winterton: Does my hon. Friend accept that on the Conservative Benches there will be a warm welcome for the increased emphasis placed by the Government on technology, science and other allied courses, which are vital to the future economic prosperity of this country, and for the drift away from the humanities, social science and liberal studies? Does my hon. Friend also accept that there is a warm welcome from Conservative Members for the assurance that he gave in the debate on Friday that the Government will look again at the funding of the Open University, which provides such useful opportunities for those who could not take advantage of higher education when they left secondary schools?
    Mr. Brooke: I am grateful for what my hon. Friend said about the Government's initiatives in science,
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    engineering and technology. We are considering whether further measures are necessary in preparing our proposals for the future development of higher education. I repeat the assurance that I gave about the Open University in the debate on Friday.
    Mr. Radice: In view of the figures from the UGC and UCCA showing that at least 12,000 well qualified students are being turned away from the universities every year —it could be 15,000 this year—what is the proof for the Minister's statement on Friday that all those who are qualified now find places in higher education? Given that the "Report on Education" No. 100 shows that the number of students is likely to rise to a record level at the end of this decade, can the Minister tell the House how that justifies the planned further cuts in the universities' current grant of 0·5 per cent. a year until 1986?
    Mr. Brooke: I shall deal first with the hon. Gentleman's second question. The available evidence suggests that qualified candidates continue to be able to find a place somewhere in higher education. If there is evidence of a significant failure in that respect, we shall be prepared to review the position. That is allied to the first question that the hon. Gentleman asked. When I spoke in the House on Friday I said, despite challenges, that no candidates had been brought forward who had been unable to find places, but I acknowledge that some did not take up university places and did not choose to go into the public sector. We are investigating what happened to that group, but those people would have had the opportunity of a place in the public sector.
    Mr. Andrew F. Bennettasked the Secretary of State for Education and Science what advice he has received on higher education from the University Grants Committee and the National Advisory Body during the last three months.
    Mr. Brooke: My right hon. Friend has received advice from the University Grants Committee and the National Advisory Body for Local Authority Higher Education on the development of a strategy for higher education into the 1990s. The advice has been published and my right hon. Friend will respond to it as early as possible next year.
    Mr. Bennett: Does the Minister recall that he initiated this debate about a year ago by asking the UGC and the NAB to consider the implications for higher education if resources were cut by 1 or 2 per cent. per year for the next 10 years, a cut of about 15 per cent.? Does he accept that almost all the evidence received by those two bodies repudiated that approach, as their report now does, and is it not time that the Government repudiated it, too? When the Green Paper is published, will the Government make it clear that they are looking for increased funding for higher education and not for cuts in funding?
    Mr. Brooke: My right hon. Friend corresponded with the UGC. He referred to level funding as well as to the postulated cuts to which the hon. Gentleman refers. The Government will consider the advice received, in the normal course of our review of public expenditure. However much one sympathises with particular objectives, our priority must be to control public expenditure and to keep inflation down. My right hon. Friend will hope to make a statement about Government expenditure plans in the normal way later in the year.
    Dr. McDonald: Will the Minister make a firm commitment to put more resources into continuing education in view of the rising demand from women and mature students? Will he put that funding into the universities and the Open University as well as other sectors of higher education?
    Mr. Brooke: We were most grateful for the advice that we received on continuing education. I have no reservations about its importance or its centrality to the mission of higher education. It is an area, however, in which the prime responsibility for funding must often rest with students and employers.

    Secondary Schools (Surplus Places)
    Mr. Lordasked the Secretary of State for Education and Science what is the current figure for the number of surplus places in secondary schools; and what further number he expects to be taken out of use in the next five years.
    Mr. Dunn: Between January 1981 and December 1983 it is estimated that local education authorities took out of use some 135,000 secondary school places and that this left some 500,000 surplus places in use in January 1984.
    Mr. Lord: As surplus places often lead to closures, is my hon. Friend aware that in rural areas, especially, the schools often play a vital part in the whole life of the community, which cannot be evaluated in purely financial terms?
    Mr. Dunn: I accept my hon. Friend's point. When I receive deputations from rural constituencies, I fully acknowledge the role of the village school in other than purely educational terms.
    Mr. Pavitt: In considering the problem of falling rolls and adjudicating on possible closures, will the hon. Gentleman consider not only rural areas but inner city areas with Caribbean, Asian or other large ethnic minorities, where the closure of a school may be a disaster for community relations?
    Mr. Dunn: I assure the hon. Gentleman that when a proposal comes before the Secretary of State for the removal of surplus places or the closure or amalgamation of schools all objectors have a full and real opportunity to make their views known.

    Redundant School Property
    Mr. Ralph Howellasked the Secretary of State for Education and Science if he will take action to encourage local education authorities to sell redundant school property more expeditiously.
    Mr. Dunn: No, Sir. It is for authorities themselves to consider how best to dispose of their redundant school property, whether by sale or by alternative use. Authorities are aware of the benefits of selling redundant assets. As recently as 26 September my right hon. Friend the Secretary of State for the Environment publicly called on local authorities to maximise their capital receipts from sales of assets in the current year.
    Mr. Howell: Is my hon. Friend aware that his answer is totally unsatisfactory in view of the appalling waste in this respect, with property in Norfolk standing idle and being a target for vandals?
    Mr. Dunn: The disposal of redundant schools or assets is a matter for the local authority, but if my hon. Friend wishes to bring a constituency matter to my attention I shall ensure that it is investigated.

    Teachers (Pay)
    Mr. Hayesasked the Secretary of State for Education and Science what progress has been made in negotiations towards restructuring teacher salaries to place greater weight on expertise and competence.
    Mr. Ryderasked the Secretary of State for Education and Science if he will seek to restructure teacher salaries to introduce a greater element reflecting quality and competence.
    Sir Keith Joseph: I refer my hon. Friends to the answer that I gave earlier today to my hon. Friend the Member for Ealing, North (Mr. Greenway). I think that a primary aim of a reformed salary structure must be to relate teachers' pay more directly to their performance.
    Mr. Hayes: Does my right hon. Friend agree that restructuring teachers' salaries according to expertise and competence is the way forward for education and the teachers' unions?
    Sir Keith Joseph: Yes, Sir. I believe that large numbers of teachers agree with that proposition, even, if some trade union leaders do not.

  PRIME MINISTER

    Engagements
    Mr. Cohenasked the Prime Minister if she will list her official engagements for Tuesday 30 October.
    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. Cohen: Will the Prime Minister ponder today the role played by the Government in London, which now has the largest single concentration of unemployment in the industrialised world? Does she agree that it is nonsense to withhold £1,500 million of London's rate support grant, which has contributed to doubling business bankruptcies, has led to the closing of factories in London which then reappear in docklands, where the Government grant is just sleight of hand and has threatened the Greater London Enterprise Board, which creates jobs four times more cheaply than the London Docklands Development Corporation? When will she stop her dogmatic games, which affect the job prospects of my constituents in Leyton and of other Londoners?
    The Prime Minister: The high rates charged by the Greater London council during the past three years have contributed to unemployment. It is one of the reasons why the GLC must be abolished. The London docklands authority has done an excellent job, which was never previously achieved by combined local authorties.
    Mr. Neil Thorne: Will my right hon. Friend take time to consider what steps may be taken in the short term to prevent authorities such as the GLC from entering into

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    entirely bogus exercises and spending nearly £500,000 worth of ratepayers' money on trying to avoid their civil defence responsibilities, before their demise in the spring of 1986?
    The Prime Minister: We have gone as far as we can through legislation in curbing some excesses of the GLC. I hope that people will watch these excesses and be glad when we complete the legislation to abolish the GLC.
    Mr. Steel: Is the Prime Minister aware of the lunchtime radio interview with the new chairman of the Trades Union Congress, in which he made it clear that if Mr. Scargill continues to remain obdurate the TUC leaders will, in the interests of trade unionism and the national economy, become more involved in efforts to reach a settlement? Will she authorise the Secretary of State for Energy to talk to the new chairman? Does she recognise that the general public now believe that the sooner Mr. MacGregor and Mr. Scargill cease their useless confrontations, the better?
    The Prime Minister: The right hon. Gentleman will agree that the NACODS' settlement reached at ACAS was excellent. It was reached by two sides after prolonged negotiations. Both sides were interested in a prosperous coal industry for the future. I hope that the right hon. Gentleman will join us in putting pressure on the TUC to press the leadership of the NUM to accept the NACODS' settlement and end the coal strike.
    Mr. Tony Lloydasked the Prime Minister if she will list her official engagements for Tuesday 30 October.
    The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.
    Mr. Lloyd: Has the Prime Minister had time to consider last week's report of the European Commission on Human Rights on the use of plastic bullets and the subsequent demand by the Police Federation for the introduction of their use by all police forces in Great Britain? In the light of the clear evidence from the North of Ireland of the deaths and physical mutilation caused by these brutal weapons, will she tell the House—if she is not prepared to forbid the extension of their use to Great Britain — under what circumstances the Government would allow their use, expecially in an industrial dispute?
    The Prime Minister: So far we are discussing only the use of plastic bullets in Northern Ireland, where they are necessary for the protection of the security forces.
    Mr. John Browne: Does my right hon. Friend accept that, with sterling at or near historically low levels, it would be a great advantage for us, especially with the outlook for lower interest rates, to join the European monetary system?
    The Prime Minister: We shall reconsider that matter when we believe the time is appropriate. As my hon. Friend will be the first to appreciate, Britain is the only country in Europe that is subject to variations in the value of its currency because it is an oil country. That introduces an element into our valuation that is different from that of other European countries.
    Mr. Kinnock: From her unique position, can the Prime Minister tell us precisely what has been going on in the National Coal Board?
    The Prime Minister: The National Coal Board has done its level best to make the best offer to the miners for wages and future investment, and has given them an
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    excellent guarantee of work and excellent terms for voluntary redundancy. The board hopes that tomorrow it will reach a settlement of the coal strike with the National Union of Mineworkers on the basis of the NACODS' agreement, and I hope that the right hon. Gentleman will say clearly whether he supports the NACODS' settlement.
    Mr. Kinnock: I have been working for rather longer than the right hon. Lady to get a negotiated settlement to the dispute. She is only at the very beginning of understanding, and there is still some distance to go in her mind. Throughout the dispute I have deliberately refrained from making comments about the chairman of the National Coal Board. In the light of recent events in the conduct of the coal dispute, does the chairman of the board still command the full confidence of the Prime Minister and her Cabinet?
    The Prime Minister: With regard to what the right hon. Gentleman has or has not said, I distinctly remember him saying from the Dispatch Box as long ago as last April that a ballot was nearer in the NUM. He made no reference to it after that until NACODS had a ballot, and I hope that he will support the NACODS settlement. This chairman of the National Coal Board has given a better deal to the miners than any previous chairman. I hope that the right hon. Gentleman will join me in urging the NUM to accept the NACODS' settlement. Will he or will he not?
    Mr. Hordern: Does my right hon. Friend agree that in view of all that has happened, tomorrow's offer by the National Coal Board to the National Union of Mineworkers should be the last? Does she realise that if the National Union of Mineworkers refuses that offer, no matter how long it takes or how much it may cost, my right hon. Friend will have the full support of the country in defeating Mr. Scargill and his friends?
    The Prime Minister: The NACODS' settlement, reached after long negotiation, must be the basis of an agreement with the NUM, and that agreement must be substantially unchanged.
    Mr. Parryasked the Prime Minister if she will list her official engagements for Tuesday 30 October.
    The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.
    Mr. Parry: As the estimated cost of the miners' strike is nearly £5 billion, will the Prime Minister state who will pay for it? Will there be further increases in energy prices this winter, or will there be cuts in benefits? Is the Prime Minister aware that this Christmas thousands of striking miners, workers sacked from Cammell Laird, single-parent families and people on lower incomes will not be able to buy their children food or toys or new clothes and will tell their children that Father Christmas is dead? Is she aware that, in addition to having blood on her hands, she will go down in history as the woman who killed Santa Claus?
    The Prime Minister: I believe that the striking miners were manipulated into a strike without a ballot. I believe that if they now had a ballot the majority would wish to go back. The hon. Gentleman referred to the cost of the strike. The miners have already lost £500 million in wages, 19 coal faces have already been lost and 79 are causing concern. Much investment has also been lost. We

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    Conservatives wish that many of the striking miners would go back to work, where they will get excellnt pay and where they have a guarantee of jobs in the future or the best voluntary redundancy ever offered. The money is there to be taken. Will not the hon. Gentleman urge them to go back to work, or does the Labour party prefer people to be on strike and to encourage them to be in poverty?
    Mr. Maclean: Has my right hon. Friend thought about asking her right hon. and learned Friend the Home Secretary to ask the Metropolitan police to initiate an investigation into the sinister links between the NUM and Colonel Gaddafi, to establish the nature of those links?
    The Prime Minister: I believe that the overwhelming majority of the country was shocked at the NUM's attempt to go to Libya to seek funds.
    Mr. Skinner: What about your husband's companies?
    The Prime Minister: That does not include the hon. Gentleman, but I believe that the majority of the country was shocked that part of the NUM should go to Colonel Gaddafi, who allowed his embassy to be used for murder on London's streets. That is shocking.
    Sir John Biggs-Davisonasked the Prime Minister if she will list her official engagements for Tuesday 30 October.
    The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.
    Sir John Biggs-Davison: While applauding the efforts and lead of the Government, the RAF and the charitable organisations in relieving famine in Ethiopia, may I ask whether the Government will seek joint measures and machinery with our European and Commonwealth partners, as well as the United States, for a better disposal of food surpluses?
    The Prime Minister: I am grateful to my hon. Friend. The fact that we were fairly quick off the mark, got a good deal of aid to Ethiopia announced and were able to approach Garret FitzGerald in his capacity as President of the Community, helped with the speed of relief. However, it would have been slightly faster in relation to the aircraft had we been able to obtain visas for two of our RAF personnel to go to Ethiopia immediately. We might then have beeen able to get aircraft there to help with distribution from a ship which is carrying huge amounts of grain. We shall do all that we can to co-operate so that the maximum amount of aid can be distributed.
    Mr. D. E. Thomas: Will the Prime Minister take this opportunity to respond to the serious statements made by
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    Dr. Charles Elliott this week that the Government have been slow in releasing funds to the regime in Ethiopia, for ideological reasons?
    The Prime Minister: The Government have not been slow in releasing funds. Over the past two years British aid to Ethiopia has been worth more than £13 million, including our share of European Community support. In addition, this July we cancelled Ethiopia's debts to Britain, which were worth more than £2·5 million. As well as giving ourselves, we have been giving through the European Community, which in the last two years has also given about £22 million.
    Food shipments from Britain are arriving. A total of 14,000 tonnes reached Assab yesterday. The main problem is internal distribution. As the hon. Gentleman will be aware, lavish expenditure of about £200 million on the 10th anniversary celebrations of Ethiopia's Socialist revolution hardly helps.
    Mr. Skinner: In view of all the talk about Libyan blood money, and to remove any charge of hypocrisy, will the Prime Minister issue instructions that all those firms which have donated money to the Tory party and have had contracts with Libya should have the money sent back because she does not want the Tory party to be tainted with it? Will she tell the House directly that during the period that she has been Prime Minister none of the companies with which her husband has been associated have had any trading links with Libya whatsoever?
    The Prime Minister: The NUM's leadership went to a Government who had used their embassy for murder on London's streets. If the hon. Gentleman does not recognise the difference between that and trading arrangements, nothing will teach him. Hon. Members will have seen today's Daily Mirror, in which Mr. Windsor is reported as having said to Colonel Gaddafi:
    "We need all the money that you can send us through the Libyan trade unions."
    He apparently received the reply:
    "We shall make sure that the money is sent to you into a foreign bank account."
    Mr. Allen McKay: On a point of order, Mr. Speaker. Since the Prime Minister has failed completely to say whether she and the Government have confidence in the chairman of the Coal Board, will you consider——
    Mr. Speaker: Order. I hope that hon. Members will not raise points of order designed to prolong Prime Minister's Question Time. That is not a point of order.

Ethiopia
3.32 pm
The Minister for Overseas Development (Mr. Timothy Raison): With permission, Mr. Speaker, I should like to make a statement.
The House knows of the very deep concern felt throughout the country at the effects of famine in Ethiopia — and indeed in other countries. Last Wednesday my right hon. and learned Friend the Secretary of State for Foreign and Commonwealth Affairs announced three important further measures designed to help tackle the problem. These follow the substantial steps that we and the European Community were already taking, embracing almost £10 million from the British aid programme in the last eighteen months, including our share of over £24 million from the European Community.
The new measures were, first, the dispatch by the United Kingdom of a further 6,000 tonnes of food aid; secondly, the allocation of a further £5 million for spending on famine relief in Ethiopia and other African countries; and, thirdly, a pledge to press the European Community for additional action.
The House will wish me to report on the action that we have put in hand. On Saturday night, my noble Friend the Parliamentary Under-Secretary of State for Defence, Lord Trefgarne, and I met in London Commissioner Dawit, Head of the Ethiopian Relief and Rehabilitation Commission.
I informed the commissioner of the additional 6,000 tonnes of grain, which will be shipped within the next few days. We discussed ways of speeding up the transport and distribution of supplies through the port. I agreed that we should draw on our £5 million offer to provide dump trucks to help with unloading at the port of Assab and Landrovers and spare parts for them to help with distribution. I also agreed to supply water drilling rigs and medical requirements.
In addition, we told the commissioner of our offer of a Royal Air Force detachment of two Hercules and the appropriate support to undertake internal relief operations within the famine areas. There was some discussion about this offer, but I can tell the House that it has been agreed that we will make the detachment available for three months. The initial deployment will involve several additional flights to Ethiopia to ensure that our detachment is self-sufficient and fully equipped for the task. So far as we are concerned, the first two aircraft are ready to leave tomorrow. Two RAF officers have now arrived in Addis Ababa to discuss urgently the practical arrangements. I am sure that those aircraft will make a valuable contribution to distributing food where it is most needed.
I have also agreed to make available two further civil aircraft — one of them a Hercules — to support the voluntary agencies which are doing such a fine job in Ethiopia. Both will take our relief supplies and the Hercules will stay in Ethiopia for some weeks for use by the international committee of the Red Cross. We are also paying for some of the supplies needed. I had this morning a constructive discussion of priorities and implementation with the Disasters Emergency Committee led by Lord Hunt. All that represents a significant British contribution. In addition, the European Community is taking valuable action.
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So far this year the European Community has already made direct allocations of 53,000 tonnes of cereals and 3,000 tonnes of other products to Ethiopia. But the needs of Ethiopia are so great that we have pressed the Community to do more. Following my right hon. Friend the Prime Minister's message to Dr. FitzGerald, President of the European Council, the Council's budget committee has approved, and the European Parliament is to consider today, a special programme of food and transport assistance worth £20 million, of which the British share would be about £4·5 million.
The needs of Ethiopia and other parts of drought-stricken Africa will be further discussed by Community Foreign Ministers in Ireland at the end of the week and by the Development Council — which I shall attend — in Brussels next Tuesday.
We have been active in other international organisations. The Committee on Food Aid Policies and Programmes, the supervisory body of the World Food Programme, is currently meeting in Rome. On a British initiative the meeting is giving priority to the needs of Ethiopia. At the same time, other western donors have offered increased assistance.
The grave problem of drought in Ethiopia and other parts of Africa cannot be solved overnight or by one massive airlift. But the measures that we have announced are very valuable in themselves and have given an important lead.
Mr. George Robertson: The House is glad to hear of the Government's action to assist in the Ethiopian famine. All hon. Members believe that the images of the starving victims of the drought, which have electrified the British people into dramatic and spontaneous generosity in the past few days, matter much more than prodigal debate here. Therefore, we warmly welcome the Government's response so far in increasing both the emergency aid and, in the time available, the Hercules transport and other logistic support. However, are the Government satisfied that their aid response is yet sufficient and appropriate? Is it not still small compared with both the need and the relative generosity of countries such as Sweden and Holland?
Does the Minister agree with the British ambassador in Addis Ababa that long-term help is necessary if the same crisis is not to be repeated year after year? Is he satisfied that the aid offered—both the food on its way and that promised — will get through to the starving people, including the majority who are in rebel-held areas in Ethiopia?
Mr. Nicholas Winterton: How can my right hon. Friend guarantee that?
Mr. Robertson: Will the right hon. Gentleman arrange for the Hercules planes to take the food and logistic equipment, which I am glad to notice he mentioned, through Djibouti and Sudan, for instance, in order to get it to the people who need it?
What is the Government's response to War on Want's proposal for an independent commission to negotiate on the spot effective action—a proposal which so far has had the support of both Willy Brandt and Pierre Trudeau? Will the Government give that proposal their support too?
Will the Prime Minister and the Government bear in mind the fact that Ethiopia happens to be in today's

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headlines and on today's television screens, but that other people are starving too in famines in Chad, the Sudan and elsewhere in sub-Saharan Africa?
Will they be remembered when the publicity dies away? The famine has alerted many people throughout the world to the dreadful imbalance of life and wealth in the world. We all feel the message in a letter that I received today from an 11-year-old constituent. She wrote:
"Some people have diseases and some people die of starvation. I feel as if it was me who caused that because of all the food I get in one day. I would give them all the food I get but I can't because I don't stay there. Can you help the situation?"
We can help the situation and the Government must help it. The whole House will give them full support and assistance when they do that.
Mr. Raison: I am grateful to the hon. Gentleman for his response. I entirely agree with what he said about the profound sense of involvement of people throughout the country. He asked whether what we are doing is enough. I believe that our effort has been substantial and that our new measures make it extremely important. I also believe that the lead that we have given in the past few days has had a considerable impact in encouraging other donors to step up their efforts considerably. We shall of course continue to keep the problem under the closest review and take further steps as we feel them to be necessary.
The hon. Gentleman asked whether the aid will get through, especially to rebel-held areas. In the past few years, many people have asked whether aid is getting through in Ethiopia. Many bodies, especially the European Commission, have been involved in trying to check whether it gets through. I believe that the great bulk of it reaches the destination for which it is intended. As the House knows, our work in rebel-held areas is done essentially through the medium of the voluntary agencies. I have talked to them and they are satisfied that they are literally able to deliver the goods.
The hon. Gentleman asked whether the Hercules might take food through Djibouti and Sudan. I am not sure whether they might go through Djibouti. Two Royal Air Force officers are out there at the moment establishing the most effective way of delivering food to Ethiopia. The voluntary agencies are operating in other areas. We shall ensure that the food and resources that we make available to them reach their destination.
The hon. Gentleman asked about a proposal advanced by War on Want for an independent commission. I understand War on Want's anxiety but believe that in present circumstances it is better to use existing mechanisms than to think that the response to the crisis is to set up a new body. The hon. Gentleman properly reminded the House that Ethiopia is not alone in suffering and mentioned other countries. I have recently authorised relief for Chad. We are well aware that there are other parts of the world in which we might face substantial problems. I assure the House that I shall do all that I can, within the limit of what we can provide, to give the most effective assistance possible.
Sir Bernard Braine: May I express satisfaction at the Government's swift response to an appalling and pressing need at the diplomatic success in difficult circumstances in securing the co-operation of the Ethiopian authorities and at the decision to reinforce the splendid charities in famine areas as my right hon. Friend
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outlined? Might not the problem get worse rather than better in the year ahead? Will the Government direct their attention to the possibility of calling the international community together to consider a longer-term strategy to deal with famine, not merely in Ethiopia but in many other parts of the world and, above all, devising an early warning system, which was lacking in this case?
Mr. Raison: Again, I am grateful to my hon. Friend for his kind words. It is difficult to give categorical answers about whether the problem will get worse or better. The important thing is that we get on with the immediate relief job. Long-term issues of development and how to prevent such problems recurring, as they have repeatedly done in the past, will have to be faced. The House will understand what my hon. Friend has said about the international community working together. We have the World Food Programme and there are other bodies in Rome which operate on the same basis. I am not sure whether new bodies are the right answer. It is vital that the existing international forums should tackle the problem, which is one of enormous scope and gravity.
Mr. Roy Jenkins: Will the Minister give an undertaking that as much grain as he believes can be distributed effectively will be made available from United Kingdom and European surplus stocks, and that budgetary restraints will not be allowed to prevent this?
Mr. Raison: We are determined to make use of the reserves and the stores which the right hon. Gentleman has rightly mentioned. It will be our task at the Development Council meeting in a few days' time, and in the other Community councils, to ensure that we do all that we can to meet this terrible problem.
Mr. Michael Latham: Will my right hon. Friend give an assurance that he will do everything possible to tackle the Brussels red tape when dealing with this matter? Nothing is more offensive to our constituents than the nightly sight on their television screens of barns full of grain while millions starve.
Mr. Raison: I well understand the feeling which has been relayed by my hon. Friend. However, if it were not for the grain surpluses, the so-called grain mountains, our ability to get hold of food in the short term would be much more difficult.
Dame Judith Hart: While one appreciates what the Government are now doing, does the Minister agree that it might have been better if there had been a reaction several weeks ago, when everything was known about the forthcoming famine in Ethiopia, rather than waiting for television programmes and public pressure?
The Minister has had something to say about his discussions with the voluntary agencies this morning. There is a real problem, as my hon. Friend the Member for Hamilton (Mr. Robertson) has mentioned, of delivery to the rebel areas in Ethiopia. How much of the transport and food aid that we are now providing will go directly through Addis Ababa, or possibly Djibouti, for distribution in the Government-held areas? How much is the Minister proposing to allocate to the voluntary agencies which, as he says, are the most effective bodies to distribute supplies in the Eritrean and Tigré areas, which are rebel-held? Lastly, will he undertake to report to the

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House on what development assistance he proposes to make available for agriculture and education assistance to sub-Saharan Africa for the sake of future prevention of famine?
Mr. Raison: The right hon. Lady has asked me why we did not react earlier. She knows that we have been reacting for a considerable time, and I have given the relevant figures. A shipment would not have arrived in Assab yesterday, which takes a bit of time to arrange, unless it had been dispatched well before recent television programmes. We have been reacting and we shall continue to react.
The right hon. Lady knows that the allocation of food to rebel-held areas is a sensitive matter. There is enormous need to be met in the rebel areas. We are working closely with the voluntary agencies that are operating in the areas. I shall ensure that they receive a substantial slice of our resources but I cannot give an exact figure. I have no intention of forgetting that a great measure of the starvation exists in rebel areas.s
I shall be happy to respond to the House on the longer-term issue of development assistance. The House will have a chance to raise the matter on other occasions and I shall do all that I can to meet its requests for a debate.
Mr. Charles Morrison: The Government are to be warmly congratulated on the manner on which they have responded to the crisis. My right hon. Friend is correct to emphasise that the problem will not be solved overnight. Will he say specifically whether the Government are proposing to give any assistance in the construction of wells, which may help in the short term? To take the point of the right hon. Member for Clydesdale (Dame J. Hart) a little further, and given the fact that the scale of the disaster is infinitely worse because of the enormous population expansion in Africa, will the Government undertake to consider once again the assistance that they are giving towards population control?
Mr. Raison: On the point about water, I said in my statement that drilling rigs were one form of supply that we were sending out. We all recognise that that is of great importance. I agree with my hon. Friend that there is no doubt that one of Africa's major problems is the rapid expansion of population in some parts of the continent. My Department will certainly contribute in efforts to bring that expansion under control.
Mr. David Steel: I thank the Minister for his positive statement and for what he is now doing. I shall pursue previous questions, in view of the Minister's last statement that this problem cannot be solved overnight. Does the right hon. Gentleman recall that during his last Question Time before the summer recess, he rejected a suggestion by my hon. Friend the Member for Roxburgh and Berwickshire (Mr. Kirkwood) that he should visit the area during the summer recess? Does the Minister accept that what has really outraged public opinion is the knowledge that massive grain surpluses were sitting uselessly in Europe throughout the summer while the position was worsening? It was only a television programme that prodded the European Governments into action. Why did they not act sooner?
Mr. Raison: It really is not true that we have been doing nothing to provide grain surpluses to the area. The
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European Community has a good record in providing food from those surpluses to Ethiopia and other parts of the world. I am not, of course, saying that what has been provided is sufficient. We must press on with that provision. Well before last week's television programmes — I do not deny that they were important — the Community was heavily involved in the business of shipping grain to Ethiopia. Ethiopia is the largest single recipient of aid under the Lomé convention. I shall visit Ethiopia if that seems appropriate and necessary. I do not wish to do so in a spirit of gimmickry, but if my visit serves a purpose I shall visit Ethiopia.
Several Hon. Members rose——
Mr. Speaker: Order. I remind the House that an important debate will follow in which more than 40 right hon. and hon. Members seek to take part. I shall allow questions on this important matter to continue until 4 pm, when we shall consider the ten-minute Bill.
Mr. Robert Rhodes James: Is my right hon. Friend aware that the performance of the British voluntary organisations in Ethiopia — my right hon. Friend knows my connection with the Save the Children Fund—has been beyond all praise and has been going on for years, not just a few recent weeks? None of that assistance would have been possible without the strong support given by the Government and volunteers amounting to about £30 million spent in Ethiopia alone and 40,000 tonnes of grain sent to Ethiopia. Although it is important to look at the current crisis and the Government's response, which has been admirable, surely after this tragedy has been resolved, or at least alleviated, we can look again at the long-term problems of how to resolve the problems and assist in areas of the world that are affected in such ways.
Mr. Raison: I am grateful to my hon. Friend for what he says about the Government's contribution. I am happy to endorse what he said about the magnificent work done by the voluntary agencies. There can be no doubt that they are doing a tremendous job.
We shall, of course, have to cast our attention to the long term. It is difficult to work with Ethiopia—nobody can doubt that. There are many problems, and they have affected our policy towards that country. As I said, I think that everyone is aware that something is happening in Africa as a whole. We must find an adequate response to what is occurring and that is what my Department will do.
Mr. Max Madden: In tackling starvation and malnutrition, does the Minister understand that the overwhelming majority of the British people would like to see the mobilisation of political will and resources that we saw in the defence of the Falklands? Does the right hon. Gentleman understand that the overwhelming majority of the British people would like the £3 million a day that we are spending on the Falklands to be diverted towards combating starvation and malnutrition? Does the right hon. Gentleman understand that the overwhelming majority of the British people would like the British Government to declare war on poverty and to mobilise the resources that are necessary to combat it effectively?
Mr. Raison: I believe, of course, that what we are doing in the Falklands is essential. However, I can see similarities between the spirit shown by our people,

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perhaps particularly in the voluntary sector and their sense of deep involvement in and commitment to the problem, and the way in which people threw themselves into support of our policy on the Falklands.
Mr. Norman Buchan: Do it now.
Mr. Raison: They show that this country contains the skill, enthusiasm and human understanding that are vital if the problem is to be tackled effectively.
Mr. Tony Baldry: Is my right hon. Friend now satisfied that the food pledges from the international community as a whole will meet the estimated need of some 60,000 tonnes of grain for Ethiopia for each month between now and next year's harvest? Of course, Ethiopia is not alone—Sudan, Chad, Somalia and other African countries face famine and food shortages. Is not it time to run a sustained and co-ordinated campaign in order to assist agriculture in Africa and thus enable those countries to grow food with which to tackle hunger?
Mr. Raison: I do not think that we can possibly say that we have yet got enough food committed to solving the problem. However, there has been a substantial international response and we are making very good progress in that respect. I note that even the Communist countries seem to have been shamed into providing some sort of food aid for Ethiopia. My hon. Friend's comments on long-term agriculture are correct, and I should stress that within the Overseas Development Administration I attach great importance to the development of natural resources in Africa, and believe that we have an enormous amount to contribute. I regard that as one of my real priorities.
Mr. Donald Stewart: Although I welcome the aid that the Minister has outlined, is he aware that there is widespread feeling in the country that Government aid was minimal and lethargic until the Government were galvanised into action by public opinion? Is he further aware that the public are concerned about the EEC's grain surplus on the one hand and the starvation in Ethiopia on the other? In that respect, I welcome the Minister's assurance that he will put pressure on the EEC to release grain. Is he aware that people are now looking towards the wealthier nations of the West to assist in the long term in raising the standard of living in Third world countries permanently, and not only when there is famine or crisis?
Mr. Raison: People may accuse us of being lethargic, but the facts that I have tried to set out show very clearly that we have been involved in, and committed to, providing aid for a long time. I can only repeat that we are in a sense fortunate to have grain surpluses in the EC. At least there is a substantial supply of food available and through the EC's institutions we are doing much to ensure that that supply is available.
We all know that once we have got to grips with the short-term problem of the famine there is still an important
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long-term problem. That is why we put a very high priority on the long-term development of agriculture and natural resources in Africa and other parts of the world that may face famine.
Sir Peter Emery: Although I accept that the Government are doing a considerable amount, will my right hon. Friend make it clear that the problem of starvation in Africa is much larger than any one country can cope with? There is thus a considerable need for this Government to play a major role, along with Europe and the United Nations, in helping to resolve the problem? Will he look at the great difficulty of dispersing food when it reaches Ethiopia? This summer, I flew over the country and saw that it is almost impossible to get lorries and transport into the areas in greatest need. Does my right hon. Friend realise that this summer there were more than 24 helicopters on the airfield at Asmara, which had been provided for the Marxist regime by the Russians? Will he work on the possibility of getting the Ethiopian Government—in co-operation with the Russians—to use those helicopters to distribute food throughout the most dispersed areas of Ethiopia?
Mr. Raison: I agree that working together internationally is the only way of providing the quantities necessary. We have given a lead in that respect, but others are bound to be involved. The distribution of food in Ethiopia is very difficult. I believe that several aircraft that belong to the Ethiopian Government, but which have been supplied from Russian or Communist sources, have not been fully used in helping to resolve the food aid problem. I understand that they are changing their policy and that they will make the aircraft available, and I certainly hope that that is so.
With regard to the exact airfields from which our Hercules aircraft should operate, that is exactly what the RAF officers at present in Ethiopia are finding out, and will be reporting on immediately.
Mr. Guy Barnett: Is the right hon. Gentleman aware that what is happening in Ethiopia today is a devastating indictment of this country and of rich countries in general in not taking seriously the objectives of the 1974 world food conference? Is he aware that, during the last decade, the number of hungry people in the world has doubled, to 500 million? Will the Government do everything they can, through the United Nations and the EC, to get the problem properly tackled on an international scale?
Mr. Raison: We have been doing many things, but it is true that there is still an enormous problem to be faced. As I hope I have made completely clear already, my Department is dedicated to doing all it can to develop the proper functioning of agriculture throughout the countries which are at risk. That is our prime objective. It is shared, I think, by the World Bank and many other international and national organisations, and we must accelerate our efforts in that regard.

Green Belt Preservation
4.1 pm
Mr. Iain Mills: I beg to move,
That leave be given to bring in a Bill to preserve the existing areas of Green Belt land covered by the present regulations from a change of status which could lead to a reduction of Green Belt areas.
I am grateful for the opportunity today of moving a Bill which introduces a short amendment to the Town and Country Planning Act 1971, so that the House of Commons would be consulted formally during the decision-making process on certain major developments involving planning applications for areas of confirmed green belt land.
The precious green acres of our small and highly industrialised country are constantly under pressure for development into housing or industrial estates. We lose about 50,000 acres of green land each year and reclaim only about 10,000 acres, yet there are about 113,000 acres of derelict land in Britain, of which about 85,000 are reclaimable. Much of that land lies in the urban industrial sprawls created by the haphazard locations resulting from our first industrial revolution.
It is vital, in the present situation of a tragically high level of unemployment, to achieve the reclamation of that land and to provide jobs in the reclamation process and in the factories built on the reclaimed land. However, the ease and cheapness of developing new housing or industrial projects on green field sites creates more pressures on green belt land.
Legislation controlling development provides for restrictions through the Town and Country Planning Act 1971, but gives the Minister a final say where projects of natural or regional importance demand an apparent exemption.
After the system of planning application, refusal, appeal to the Minister against the refusal, public inquiry and the inspector's report, the Secretary of State for the Environment has the final decision on the project. He can make that decison independent of Parliament.
My proposal would insert minor amendments in section 9(4) of the Act so that after the word "person", where the Act allows the Secretary of State to consult outside bodies in considering a structure plan, my Bill would add
"and in relation to any proposed alteration of the green belt provisions of a structure plan under new section 10 of this Act, the Commons House of Parliament".
The new section 10 would impose a duty on the Secretary of State to consult the Commons, and would read:
"The Secretary of State shall not approve any proposals to alter the green belt provision of any structure plan unless he has consulted with, or considered the views of, the Commons House of Parliament in relation to these green belt provisions".
By limiting those provisions, my intention is to see them invoked in only a very few cases of major national or regional importance.
Such a project in my constituency is the proposal by the West Midlands county council to site a huge high-tech factory site in the green belt near the National Exhibition Centre. That site is confirmed in the structure plan as green belt and is in the very vulnerable 6-mile gap between Birmingham and Coventry, despite the availability elsewhere in the west midlands of about 2 million sq ft of derelict or other land.
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My hon. Friend the Member for South Hams (Mr. Steen), who is supporting the Bill, tells me that the same pressures exist in his area for development in green belt land near Plymouth. Other hon. Members tell of similar pressures, so we can be sure that it is a national problem requiring the involvement of Parliament.
The Bill would, of course, aid Ministers who, however sympathetic, sometimes have to make horribly difficult decisions. I pay tribute to the sympathy of my right hon. Friend the Secretary of State for the Environment and my hon. Friend the Parliamentary Under-Secretary of State for the Environment, who have listened to my reasoning on my own constituency matters on the site with great care. I am sure that the end decision will also be taken in the full light of the many representations made to them. I also thank my right hon. Friend the Leader of the House for being present to listen to my speech in asking leave to bring in the Bill. From the presence of right hon. and hon. Members on both sides of the House, I am fascinated to see that my Bill has commanded an even better attendance than I expected.
Let us ensure that Parliament can help the Minister and guide his decision where the balance of helping new enterprises and the creation of new jobs must be held against the need to make the green belt real and long lasting and to ensure the reclamation of land that is useless and derelict. Where there are better alternatives, such as the redevelopment of derelict, Land, our planning procedures must not encourage the easy options and obvious attractions of fresh green sites.
I have quoted an example in my constituency. There are areas in the west midlands where industry is accepted—indeed, expected—and where the infrastructure and job skills exist.
The lure of virgin sites is obvious, and where the decision is a fine balance it would seem to be more democratic for the House to debate the issue and for the constituency Member to have an opportunity to state his case, either on the Floor of the House or in Committee. To consider the release of green belt land as a mechanism for achieving a higher degree of stability ignores the evergreen—and legitimate—eagerness of developers to choose the easiest and most cost-effective solution to finding new housing or industrial sites. The green belt must be stable and absolute, and any exceptions which, by their very nature, are of special importance would, I believe, justify my proposal in the Bill that they be brought to the attention of the House.
It is my view that the House would have to consider only a small number of such projects. I should certainly be happier to sit in Committee on them rather than on the many statutory instruments that happily engage hon. Members on Wednesday mornings.
Question put and agreed to.
Bill ordered to be brought in by Mr. kin Mills and Mr. Anthony Steen.

GREEN BELT PRESERVATION
Mr. Iain Mills accordingly presented a Bill to preserve the existing areas of Green Belt land covered by the present regulations from a change in status which could lead to a reduction of Green Belt areas: And the same was read the First time; and ordered to be read a Second time tomorrow and to be printed. [Bill 234.]

Unemployment
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Neubert.]
4.8 pm
Mr. Neil Kinnock: Today we debate unemployment. It is wider than it has ever been before, for it now stands at 3,248,000. It is deeper than it has ever been before. for 369,000 people have been unemployed for more than three years, nearly 700,000 people have been unemployed for over two years, and 1,047,000 people have been unemployed for more than a year.
As the Prime Minister told the Conservative party conference, unemployment is the "scourge of our times". It is, indeed, an affliction and a plague. It is the dominant issue in the minds of the people, and we are told that it is a matter of major concern to the Government.
As we debate unemployment today, we have first to ask why the Prime Minister has chosen to absent herself from participation in the debate. We have had one response — the explanation offered by senior Ministers that custom and practice at Westminster mean that Prime Ministers involve themselves in such debates only if they are central to Government policy. With more than 3 million of our fellow citizens out of work, just what issue is more central to Government policy than unemployment? When unemployment has increased by 116,000 during the past 12 months and by more than 2 million since the Government first took office in 1979, I say that unemployment is not only central to Government policy; it is Government policy.
On previous occasions the Tory party has attracted the title of the party of unemployment. Today's Tory party is even worse—it has a Government with a policy of deliberate unemployment; the Government's record since 1979 proves that conclusively. Of course, they cannot afford to admit that. During the Tory party conference at Brighton the Prime Minister was emphatic in her commitment to the unemployed. She said about unemployment:
"Of course we know. Of course we see, of course we care".
Yet 18 days later the right hon. Lady does not know, see or care enough to speak in an unemployment debate in the House. She merely sits there, the proud possessor of a signed copy of the 1944 White Paper on unemployment. Her lips are as tightly clipped as her handbag.
Staying out of the debate is bad enough, but for the Prime Minister to send, of all people, the Chancellor of the Exchequer to speak for the Government is much worse. We do not get the organ grinder, we do not even get the monkey—all we get is the barrel organ. I wonder which of the tunes we will hear. Will he repeat his refrain from the last debate on 31 July that the £2,000 million cost of the mining dispute, even in narrow financial terms, represented a worthwhile investment for the nation? Perhaps we will have his magnum opus from the Tory party conference — the speech that swept the whole conference into a stupor and made the right hon. Member for Old Bexley and Sidcup (Mr. Heath) say that he was not applauding the Chancellor but moving his hands in a gesture of despair.
We might have the Chancellor's IMF theme, when he said that many of the jobs of the future will be in labour-intensive service industries that are not so much low-tech as no-tech. His international audience must have loved
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that. The House can picture them — the French, Germans, Japanese and Americans, with observers from Taiwan and Korea, listening to the British Chancellor saying, "Not high-tech or low-tech, but no-tech." They would have said to themselves in a rich diversity of international languages, "What a wally."
Not high-tech or low-tech, but no-tech—that is how we are supposed to greet the new dawn; that is the future that we are to offer to our children. All our competitors are moving into new industries, but the British Chancellor wants his country to become a shoe-shine economy. He has put that proposition continually—not high-tech or low-tech, but no-tech.
On 21 October, during an interview on "Weekend World", the right hon. Gentleman made it clear that he had nothing else to offer. He said:
"We have always made this clear, what the Government can do to create jobs … is very, very little indeed."
That was the theme that he used then, which he has used repeatedly. But have the Government really made that clear? Did the Government, who were elected on the slogan, "Labour isn't working," make it clear that they were going to do very, very little?
Last year—election year—we heard about recovery. The Chancellor was then saying on "Weekend World":
"There is every prospect that by next year we will see the start of a fall in the level of unemployment … My guess—best guess—is that unemployment may well start to fall next year, but that is my own opinion, and you can judge it, and take it for what it's worth."
Quite so—we now know what it is worth and we know what to think of his judgment on other matters.
We know what to think of what the Chancellor said in July, that nothing was going wrong. That was a great success in comparison with the present time. He said that nothing was going wrong on the day that the pound dipped to below $1·30. I suppose that everything is relevant, as we now have a pound that is significantly lower on the international exchanges.
Only six weeks ago, the Chancellor said:
"Crisis? What crisis? There is no crisis."
We know all about the Chancellor's judgment. I can tell him about the crisis, in the midst of the huge total of unemployment. It is the anxiety of parents, the hopelessness of children, the graduates taking temporary clerking jobs, the families being split and scattered as they search for work around the country—and all because of the level of unemployment. Yet the Chancellor said:
"Crisis? What crisis? There is no crisis."
There is a crisis in the poverty of an unemployed man with a wife and two children living on £61·80 a week and a housing allowance for month after month and year after year. That man and his wife know the meaning of crisis. There is a crisis when careful studies show that the death rate among jobless men is 21 per cent. higher than among their contemporaries of working age. There is a crisis when the suicide rate among unemployed men is more than twice that among employed men.
Those crises can be studied, measured and attended to academically. But there are other crises directly experienced by hon. Members. A crisis is the 17-year-old boy who said to me as he was leaving a youth training scheme, "Do you think I will ever get a job, Mr. Kinnock?" That is Britain in 1984. There is a crisis for the million 18 to 24-year-olds for whom the Government make absolutely no provision for training or employment. A crisis is the 40-year-old miner's wife in my constituency

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—a responsible and highly respected woman, someone upon whom everyone in the village depends, a calm and decent woman — who a couple of months ago said something that I never thought to hear from her. She said, "We have got to fight, Neil, to the bitter end. If the pit goes, David" — her 42-year-old husband —"will never work again." That is a crisis.
I recognised a crisis when a 54-year-old man walked into my constituency surgery earlier this year. He was a smart, intelligent, strong man who asked me to help him obtain an urban aid grant for a youth football club that he was helping to run. He put the case intelligently and fluently and with a great deal of commitment, as one would expect. In passing, I asked him what his job was. He broke down in front of me and wept. He wept, as only a man who is not used to weeping can weep. Anyone who has ever seen it knows what crisis is.
The Prime Minister says that she sees, knows and cares. If she saw that, knew that, or cared about that she would be about the business of generating work for that man. That man of 54, that miner's wife, and millions like them, are the backbone of the nation. If those people are not given an opportunity, if they are refused help in their efforts to achieve security, the Prime Minister will be breaking the backbone of the nation. It is dreadful when she cannot give support and succour to such people, who do not want to be wrapped in cotton wool or taken by the hand. They are the cream of our people. They just want a fair chance. They feel that they are being crushed and deprived of a fair chance. Conservative Members know as well as I do that the consequences can be horrific, and the costs appalling, if those people feel forsaken.
Of course, it can be said that one relates such stories and puts forward such arguments emotionally, and that it is wrong to argue from the particular to the general. I argue from emotion, but I argue from reason too. If those people feel neglected, left out and abandoned, the effect on the fabric of our society, as everyone here must know and as some Conservative Members have said, will be truly terrible. It is only reasonable to put those matters, but there is emotion as well. The House should not be embarrassed by emotion. The House of Commons is not a laboratory for clinical examination; it is the forum of this democracy. We must be analytical in our assessment of policy. We can afford to be forensic in our exchanges, yes, but in addition we must be the advocates of the people.
We must be the authentic voice of the people. That voice, against the background of unemployment, the reduction of industries and the affliction of communities, is saying to us all here, regardless of party, "We want to work. Help us so to do. You have the power. Give us the means to work."
Even if their demand is ignored, those people will not erupt with resentment. Those are not the people who will be taking to the streets. That is not their tradition or their temperament and that fact alone about the British people should attract the Government's commitment. Instead, that reasonableness and moderation receive the Government's scornful complacency. The Government show contempt for the millions of individual crises, just a few of which I have reported to the House this afternoon, and which must be familiar to almost every Member in his constituency.
Mr. Robert Jackson: The right hon. Gentleman is correct. The position for many individuals is desperate. It is true that unemployment has doubled since 1979, but it doubled during the previous five years under a Labour Government. If it is so easy to deal with the matter, why was it not dealt with then?
Mr. Kinnock: I remember the woman who is now the Prime Minister saying in a Tory party television broadcast in 1977 when unemployment reached 1·3 million that the Labour party was the national party of unemployment. She said that if her party ever let unemployment get to that total it would be drummed out of office. If the hon. Gentleman is so worried about the matter, why is he not helping to drum her out of office?
The crises are not recognised by the Chancellor of the Exchequer. They do not impress him. He goes around in a kind of coma of complacency about the country's assorted crises. In his recent Mansion house speech he said that he looked forward to next year with confidence. He said:
"I see a further good year for output in 1985."
I do not know which country the Chancellor was talking about at the Mansion house. With a "further good year" like 1984, we should be able to get back to the output growth trend for 1974–79 in 60 years. With a "further good year" such as this one, the deficit on manufactured trade will be £6,000 million next year. In 1982, as in every previous year, we did not have a deficit on manufactured trade. With a "further good year" like this one—the sooner we have television in here to see the Chancellor of the Exchequer, the better—we shall get back to the 1979 levels of employment in the year 2000. That is how long it will take us with another "good year" like 1984.
Of course, the Government have really the excuses for postponement. The Chancellor goes around carrying a quiverful of excuses. He and his colleagues told us at the outset— in 1979 —that the problems were caused by their inheritance. That was the excuse for a season or so. The next excuse was the effects of North sea oil, which disadvantaged us by overvaluing the currency. Then it was the world recession, followed by the United States economy. That was until July.
We now have two new excuses. One is the inconsiderate desire of married women who wish to work and the other is workers' wage demands.
Mr. Robert N. Wareing: Like her.
Mr. Kinnock: From what my hon. Friend says, I might be committed to selective disemployment, but I would not do it, even for the sake of removing the right hon. Lady, although we look forward to the first opportunity of doing that.
The Chancellor, in the true tradition of the Conservative party, says that the problem of our economy can be resolved if the increase in real wages is cut. That is what he has said repeatedly in his last four or five appearances. He wants people to price themselves into jobs. That is the phrase of the moment. The reality of that is plain and will be familiar. The only way that people can price themselves into jobs is by pricing others out of jobs. That might be a formula that commends itself to the right hon. Gentleman, but it does not commend itself to the majority in this country.
With that argument, the Government are telling people, especially the young, to accept the fate of being a coolie

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generation. They are demanding that people perform computer-age tasks for steam-age wages. That would be an obnoxious attitude to take at any time, but when the Chancellor advocates tax cuts for the rich and wage cuts for the rest he is saying that the rich will work only if they are made richer and the poor will work only if they are willing to become poorer. That is particularly repellent.
The "jobs for wage cuts" argument does not stand up. It is not substantiated by the international and domestic facts about wages in any case. In Germany, real wages have gone down by 2 per cent. since 1979 while over the same period the increase in the unemployment rate in Germany has been only slightly less than ours. In Japan, workers have had a 5·9 per cent. rise in real wages over that period and an employment increase of 33 per cent. Labour costs in the United Kingdom are lower than in all major industrial countries except Spain. In July the average rate of unemployment in the Organisation for Economic Co-operation and Development was 8·2 per cent. In Britain it was 13·1 per cent.
Since 1980, unemployment has doubled in Britain. Real labour costs have gone down by 4 per cent. Unemployment among young people has increased by twice as much as among adult workers, yet the average wages of young people have risen by 5 per cent. less than average adult wages. In parts of Britain where wages have risen faster than the national average, unemployment has risen less, and in parts of the country, notably the west midlands, where wages have risen least, unemployment has risen most.
We are readily told by the Chancellor that the United States economy is thriving currently because of low wages and an enterprise culture. The facts are that, from 1980 to 1982, when the American economy was being squeezed and bankruptcies were epidemic and President Reagan followed Thatcherite policies, 600,000 jobs were created. In the two years of expansionary policies from 1982 to 1984, 6 million jobs have been created. Those facts about the United States speak for themselves.
We can gain recovery by policies of stimulation backed by public expenditure. We do not have to spend proportionately as much as has been spent in the United States. We do not have to spend the money on the same things. We do not have to release demand into the economy by cutting the tax rates for the rich and cutting welfare benefits for the poor. We do not have to follow those examples, but we must expand investment and consumption, as the Prime Minister's favourite, John Maynard Keynes, wisely counselled. The Government have a duty to do just that. I do not expect them to do it with great enthusiasm or with the speed or on the scale of the strategic objectives that I would choose and that the Labour party would implement as soon as it was in government.
However, even the Government can sponsor; even they can spend sums of money; even they can undertake a basic recovery programme for this country. They can initiate a major increase in the construction and improvement of housing. That is a desperate necessity after five years in which total housing starts are 40 per cent. lower than in the previous five years and council housing starts are 65 per cent. lower than in the previous five years. The Government can make an effective commitment to renovating our blighted and decaying inner cities. They can invest in energy conservation and undertake a programme of transport development such as rail renewal,
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with electrification, new track and improved construction on a larger and more systematic scale. The hon. Member for Rugby and Kenilworth (Mr. Pawsey) is not without interest—rightly so—in these matters. If he wants to join us in encouraging the Government, we shall welcome his support. I know that it will be substantial, indeed even multiple.
Many other activities that are necessary in the national interest will be cheaper the quicker a start is made. I refer particularly to the comprehensive renovation of our aging and potentially dangerous sewerage system. It would be extraordinary for us to advocate a national economic recovery based on the sewerage system, but that proposition, like all the others relating to housing, transport and energy, could be started for a net expenditure no greater than last year's overshoot on Government borrowing of £2·3 billion. That is the sort of sum that I am asking for from the Government. Our commitment would be substantially more generous. Our use of that sum would be more strategically responsive and our purposes would be more adventurous, but I realise that I am talking to a Tory Government and asking them to wean themselves away from the policies of constriction, closure and slump. I am asking for what I think is reasonable from them, not necessarily what I think is necessary for the welfare of the nation.
I commend those proposals to the Government on the ground that, in the very act of generating employment and turning claimants into taxpayers, they would make our economic infrastructure more efficient and initiate a new impetus for technological development. Under every one of my proposals they could invest in new systems of design, communication and operation, which would give a real boost to advanced engineering and scientific industry.
Mr. Tim Eggar: If I understand the right hon. Gentleman correctly, he is arguing that the Government should spend about £2·3 billion extra on capital infrastructure projects. How many jobs would that create?
Mr. Kinnock: There would be a significant increase in employment——
Mr. Eggar: But how many jobs would there be?
Mr. Kinnock: That increase in employment would be accompanied by an improvement in our technology——
Mr. Eggar: The right hon. Gentleman does not know how many jobs.
Mr. Kinnock: If the hon. Gentleman wants an answer to his question, he had better shut his mouth for a moment.
There would be a substantial increase in the number of jobs, accompanied by the sponsorship of technology and the improvement of our infrastructure. The hon. Gentleman should respond to this and explain why he does not want to adopt my proposals. Every single job created would turn a net dependant on our national resources into a net subscriber to our national resources. I do not expect miracles. I am not talking about a huge shower of jobs on our community and our economy. I am saying that the Government must now start on that basic recovery programme or condemn the people to a further period of decay and decline as the economy gets more tawdry, our infrastructure more tatty and our economy becomes less competitive than the Tories have made it.

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I further appeal to a Government who are supposed to know, see and care about unemployment to help those most afflicted and affected by mass unemployment—the long-term unemployed. Their unemployment begets further unemployment. The longer that they are out of work, the more difficult they find it to get work. Not only does their confidence rot away but employers, for reasons that in many ways can be understood, are more likely to give preference to workers with recent work experience. Why do not a Government who know, see and care offer new training programmes for the long-term unemployed? Why do they not offer incentives through tax concessions or cash grants to employers for taking on the long-term unemployed?
I ask the Government particularly to stop more young people falling into the abyss of becoming the long-term unemployed. They should double the length and enrich the content of the youth training scheme so that youngsters have time to secure additional qualifications, a longer opportunity to experience work and the facilities to develop their scholastic and manual skills in a way that cannot be achieved in just one year, especially when they face the complex jobs market and the complex tasks of our economic future. By investing in the training of those young people, the Government would give them a better chance of securing jobs. They would also give our country a greater body of trained and educated abilities of the kind that we shall so desperately need if we are to prevail against the competition of other economies that are making a greater commitment to young people.
Why do not the Government attend to the realities of our society and accept that many older workers, if they could be assured of a decent standard of living, would gladly extend their retirement and relinquish their jobs to younger workers — without coercion, compulsion or pressure; just a straight, sensible deal between those who look to extend their active leisure and those who seek the activity of work.
Why do not the Government understand that the withdrawal of funds from local government and health services is a costly folly when minor disabilities that can and should be treated at home are turned into major illnessess needing long-stay hospital care simply because local facilities have been reduced or withdrawn?
As we have seen, the Government will respond to propositions of that kind by saying that they cannot afford them. It is not "can't" but "won't". The Government could retain a substantial part of the £11,000 million which leaves the country annually in investment capital to strengthen the economies and finance the technological revolutions of competitor countries. They could use the £10,000 million annual revenue from North sea oil to sponsor production and development. North sea oil provided a unique opportunity for improvement of our infrastructure in preparation for the future, but, as the right hon. Member for Chesham and Amersham (Sir I. Gilmour) has said, it has been used to finance not convalescence but euthanasia. The Government could give vitality to the economy. They could attract funds by sponsoring the productiveness of our country. They should be playing to our strengths—stability, hard work and inventiveness—instead of wearing the country down by policies of constant slump.
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Those are the alternatives, the real choices facing the Government. The choice is not between cost-free idleness for millions of people and an expensive system of making work. It is not between spending and not spending but between spending on development, production and training and spending on idleness, decay and decline. It is a tragedy that the Government have chosen the last, negative, retarding course. It is an outrage that they prefer unemployment with all the weakness and obedience that goes with it to sponsoring employment and strengthening the confidence of our people through sponsorship of employment and growth.
In making that negative choice, the Government evade the central challenge to modern Governments and especially to modern democratic Governments. They dodge the duty of combining the advance of efficiency with the values of humanity. Rule by efficiency without humanity is horrific. Rule by kindness without efficiency is torpid and doomed. But rule without either efficiency or humanity is what we have from the Tory Government now; and that is why they should go.
4.43 pm
The Chancellor of the Exchequer (Mr. Nigel Lawson): There is a familiar pattern to events in this House. Just three months ago we debated an Opposition motion on unemployment and the economy——
Mr. D. N. Campbell-Savours: On a point of order, Mr. Speaker.
Mr. Speaker: I hope that it is indeed a point of order.
Mr. Campbell-Savours: I have been a Member of the House for five and a half years. Throughout that period it has always been the custom on a day such as this for the Prime Minister to reply on behalf of the Government.
Mr. Speaker: Order. I appeal to the House to give the Chancellor a fair hearing, just as the right hon. Member for Islwyn (Mr. Kinnock) had a fair hearing. Points of order of the type raised by the hon. Gentleman merely take time from other Back Benchers.
Mr. Lawson: I advise the Opposition to wait for the speech of my right hon. Friend the Prime Minister during the debate on the Address. It will be well worth waiting for.
Just three months ago the Leader of the Opposition proposed a motion very similar to this one. He spoke at considerable length and said practically nothing. Today we have re-enacted those events. The right hon. Gentleman has taken the same role and delivered much the same script.
The one thing that seems to emerge from the right hon. Gentleman's prescription is that we should expand demand by some £2·3 billion. I am astonished at his new-found modesty, although the list that he gave came to many times that amount. One thing must be absolutely clear. There is a real problem, but the problem is not lack of demand. Allowing for the coal strike, money demand is rising by about 8 per cent. per year. The object of economic policy is to achieve the most favourable division of that money demand between rising real output on the one hand and rising prices on the other. That is the whole purpose of the strategy that we have been following. But look what happened under the Labour Government — [Interruption.] The Opposition are frightened now. They cannot take this! Money demand was indeed boosted under the

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Labour Government. It rose not by 8 per cent. per year, as now, but by 18 per cent. per year. Moreover, more than 16 per cent. of that was dissipated in higher prices and less than 2 per cent. was left for higher output. There can be nothing worse for jobs than to retrace that rake's progress.
The right hon. Gentleman has, however, done us two services. He has provided the opportunity for this debate, which the Government welcome, and he has eloquently expressed the concern of the House about unemployment. Large-scale unemployment is indeed one of the curses of our time. The Government would like nothing better than to see it come down and stay down, and the sooner the better. Each of us, in every part of the House, is aware from constituency experience of frustration felt by those unable to find work and the despair of the long-term unemployed. [Interruption.] This is no laughing matter. It will be noted that the Opposition are laughing at the level of unemployment.
Every one of us is aware of the despair of the long-term unemployed, to which the right hon. Gentleman alluded, of the strain on their families and of the feeling among too many of the young that society has little to offer them. We are aware of the hopelessness and the sense of rejection felt by the family man made jobless in the prime of life and unable to find new work. It is right that we should be debating this subject today, but I hope that we shall do so in a manner that befits the occasion.
The British people know full well that there is no quick or easy solution. They know that if there had been such a solution we should have implemented it long ago. They know, too, that had there been a quick and easy solution the Labour Government would never have allowed unemployment to more than double during their five years in office. The British people know, too, that unemployment has been on a rising trend for decades, not just in this country, but throughout most of the world. For example, since 1979, throughout the whole period of office of this Government, unemployment has risen faster in Germany — the strongest of all the European economies—than in Britain. Over the last year, unemployment here has increased considerably less than the European Community average. That is a fact. It is small comfort, because the number of people out of work is far too high and is still rising, but it underlines the need to see the problem in perspective and to abjure the language of slogans and political point-scoring. Anything less will do little credit to the House and will be of little service to those whom we represent.
We must understand the cause of unemployment in order to identify what the Government can do about it, and do it. Ever since we first took office in 1979 we have consistently pursued a wide range of policies, the aim of which was to enable the economy to generate new jobs. We have brought down the rate of inflation dramatically. The notion that there is a choice between fighting inflation and fighting unemployment is the reverse of the truth.
Mr. Frank Cook: Rubbish.
Mr. Lawson: I remind the hon. Member for Stockton, North (Mr. Cook) that one of my predecessors, the right hon. Member for Leeds, East (Mr. Healey), observed that inflation was the mother and father of unemployment. The record levels of inflation over which he had the misfortune to preside under the Labour Government are reflected in the record level of unemployment today.
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The scourge of high inflation has been conquered and its defeat has been followed by a period of sustained economic growth, as we always said it would be. At the same time, we have made steady progress with the other arm of our policy, which is to remove the impediments to the efficient working of the economy by allowing markets to work better and by the creation of conditions conducive to growth and employment. We achieved that through taxation, by improving incentives by cutting income lax, especially the high marginal rates, by abolishing the national insurance surcharge—the Labour party's tax on jobs — and by reforming corporation tax so that the system no longer discriminates against the employment of labour rather than of capital.
Where appropriate we have pursued our policies through public expenditure. We created the youth training scheme, at the cost of the best part of £1 billion a year. This year about 70 per cent. of youngsters leaving the scheme have gone straight into work or further training —most have gone into work. We set up the enterprise allowance scheme to encourage people without jobs to set up their own businesses, and we created the young workers scheme, which encourages employers to take on 17-yearolds at realistic wage rates.
We have encouraged the growth of new jobs by deregulation and by stimulating competition. We have reformed trade union law and removed the legal protection for the closed shop unless it is approved by a work force ballot. That comes into force this week. We have embarked on a massive and unprecedented programme of privatisation, the biggest of which, British Telecom, will be implemented in a few weeks. [Interruption.]
Mr. Speaker: Order. The Leader of the Opposition was given a fair hearing. It is unworthy of Opposition Members to deny an equally fair hearing to the Chancellor of the Exchequer.
Mr. Dennis Skinner rose——
Mr. Lawson: I shall give way in a moment. We have provided the most attractive package of any European country to stimulate new businesses.
We shall continue with these supply side policies within the overall framework of tight control of public expenditure so that we can cut taxes while stimulating new enterprises and new jobs. Inevitably, these measures will take time to have their full effect. It takes time to revive the spirit of enterprise, which is the only way to better economic performance.
Mr. Skinner: With regard to the privatisation of British Telecom, will the Chancellor of the Exchequer guarantee that, because of the Government's anxiety about blood money in Libya, they will amend the legislation to ensure that no Libyan money is invested in the shares of British Telecom?
Mr. Lawson: When the hon. Member for Bolsover (Mr. Skinner) condemns the president of the National Union of Mineworkers for sending an emissary to Libya for help, I shall answer that question.
Our policies are already bearing fruit. We are now in the fourth year of a steady economic recovery, and I see no sign of its faltering. Despite the unwelcome trend of unemployment, new jobs are being created. Between the middle of last year and the middle of this year, the number of people in work rose by 250,000. That is in sharp

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contrast to the figures for France and Germany, where the numbers in work have continued to fall. It is fully in line with the rate of increase in previous economic recoveries, but this time it has occurred without any resurgence of inflation. That is good, but it is not good enough. New jobs are not being created fast enough to keep pace with the rising numbers who either want to stay in or enter the work force.
There is a way of creating new jobs on the scale which our people need, if only we as a nation are prepared to take it. The effects of the coal strike apart, the continuing rise in unemployment is to a considerable extent the temporary consequence of cutting out overmanning, which all hon. Members have long recognised to be widespread in British industry.
That does not explain why the substantial number of new jobs that are being created has had so little effect on the numbers unemployed. The explanation of that paradox provides an important insight into the nature of the problem and of the only practical solution to it. The new jobs are overwhelmingly going to the self-employed and to part-time workers, many of whom are women who have never been part of the work force. In other words, it is the most flexible and least unionised who are getting jobs.
Mr. Wareing: The right hon. Gentleman said that married women who had never' had jobs are now getting them. Will he tell the House about the effect of the new regulations introduced by his right hon. Friend the Secretary of State for Employment in relation to the community programme, which makes it even more difficult for married women to take jobs within the community programme and which has been condemned as discriminatory by the Equal Opportunities Commission?
Mr. Lawson: The scheme applies only to recipients of state benefits. I am sure that all hon. Members will agree that it is those people who should be helped by that scheme.
The problem is that monopolistic trade union behaviour leads to the benefits of the recovery not being shared by everyone. The overwhelming majority who remain in work have seen their living standards rise steadily, no matter which measure one cares to use, but a minority are suffering because they want to work and cannot.
It must be said, quite bluntly, that those two matters are linked. The general level of pay is too high for employers to wish to employ people in anything like the numbers needed to reduce unemployment as we would all wish. That is why I said in my International Monetary Fund speech in Washington last month that the heart of the problem was the level of real wages. Other things being equal, the more that people are paid, the lower the number who will be employed. [Interruption.] I hear some disagreement from the Opposition, but the whole House must know, as does the country, that there is a link between pay and jobs. There is nothing new about it. Even Lord Wilson of Rievaulx knew it, when he said:
"One man's pay rise is not only another man's price rise: it might also cost him his job or his neighbour's job."
He thought that that was so important that he published a pamphlet and put copies of it through every letter box that he could.
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Even the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) knows it, because he said only this month:
"Unless we are both courageous and careful, wage inflation will hold back our progress towards full employment."
That is what he said, and the only person who does not know it is the Leader of the Opposition.
Dr. Jeremy Bray: Is the Chancellor saying that if wages are reduced in one industry it will gain jobs while other industries will lose them, or that if one country reduces wages it will gain jobs while other countries lose them? What gain is there to the world or to Britain from such a policy?
Mr. Lawson: The gain is a gain to the unemployed who find themselves in work, and that is what the debate is about.
The question is not whether there is a trade-off between pay and jobs—that much is common ground—but what it is and how much it matters. The answer can be found by looking across the Atlantic, which the right hon. Gentleman did, although he seemed to have something wrong with his bifocals. In the United Kingdom, and indeed in western Europe as a whole, real earnings have increased significantly during the past 10 years and total employment has decreased, whereas during the same period in the United States exactly the opposite has happened: real earnings have fallen slightly and employment has increased impressively.
Of course, there are some who, notwithstanding our disastrous experience of excessive Government borrowing under previous Governments, like to imagine that America's success in job creation is a consequence of its present massive budget deficit, but the evidence is against them. Employment in the United States has been growing during the past decade, with 15 million new jobs being created in that time. However, of those 15 million jobs, 13 million were created during the first half of the period at a time when United States fiscal policy was becoming more, not less, restrictive. So much for the view that the extra jobs are due to America's budget deficit, or that we should follow that example.
Mr. Jack Straw: Will the Minister give way?
Mr. Lawson: I have already given way several times. The true secret of America's success in creating new jobs lies in an environment that leads people——
Mr. Straw rose——
Mr. Lawson: —to price themselves into jobs rather than out of them.
Mr. Straw rose——
Mr. Lawson: I have already given way several times.
Mr. Straw rose——
Mr. Speaker: Order. The Chancellor is clearly not giving way. May I tell the House that every day I receive many letters from people referring to noise in the Chamber. I always defend robust debate, but this sort of interruption is not robust debate.
Mr. Lawson: I am always happy to give way, and I have already done so more times than the Leader of the Opposition did, so I should continue my remarks.

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The lesson from America is the lesson for us in Britain. The figures speak for themselves. The evidence suggests that in Britain—[Interruption.]—I should like the House to listen to this——
Mr. Frank Cook: On a point of order, Mr. Speaker.
Mr. Speaker: Is it a point of order?
Mr. Cook: I seek your guidance, Mr. Speaker. Are we here to discuss the problems of this nation, or those of another? I am fed up with hearing about the United States.
Mr. Speaker: If the hon. Gentleman listened to what was said rather than shouted from a sedentary position, we would all be better off.
Mr. Lawson: The evidence suggests that, in Britain, a 1 per cent. change in the average level of real earnings will, in time, make a difference of between 0·5 per cent. and 1 per cent. to the level of employment—that will mean, in all probability, between 150,000 and 200,000 jobs. Over the past two years average earnings in Britain have increased by nearly 3 per cent. more than prices, and it looks as though this year will see much the same. If, instead, average earnings had merely kept pace with prices, the number of extra jobs created would have been about 500,000 a year. Of course, the effect will not be instantaneous. It takes perhaps a few years for pay levels to have their full effect on employment levels, but once embarked on the process is cumulative. If one year of pay in line with prices, instead of rising 3 per cent. ahead of prices, eventually means an extra 500,000 jobs, two years of the same would mean an extra 1 million jobs, and three years — we have had three years of 3 per cent. real growth in earnings—would mean an extra 1·5 million jobs. That is on top of the new jobs being created as the economy expands.
The figures show merely broad orders of magnitude, but they are based on a careful investigation of the evidence. Moreover, I have not been talking about cuts in pay, merely about pay rising in line with prices instead of much faster. I have necessarily been talking in terms of averages, which in any event should be helped down by the fact that many of those who take new jobs —especially school leavers—are likely to take them at the lower end of the pay spectrum.
Even with gross pay remaining flat in real terms, take-home pay should gradually increase as taxation is reduced.
Mr. Donald Stewart: The Chancellor has given evidence of the correlation between low wages and unemployment, but is he aware that the Low Pay Unit, which conducted extensive investigations throughout the United Kingdom, found that the areas in which wages are lower than average are exactly those areas where unemployment is highest?
Mr. Lawson: That is because of the special factors that affect industries in those areas. The evidence is as I have given it to the House; if the House does not wish to accept it, it will not understand the only way in which we can reduce unemployment.
There is still one sure way to arrest our progress towards new jobs, and that is to succumb again to the British disease of futile, self-destructive strike action, which the Leader of the Opposition supports wherever it occurs. He is the striker's friend—the man responsible for creating unemployment. The current coal dispute has been expensive in terms of cash and output. Total national
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output—GDP—is currently about 1¼ per cent. below what it would otherwise be, largely because of the sharp loss of coal output. That means that growth this year will be below the 3 per cent. that I forecast at the time of the Budget, with a corresponding bounce back next year to the 3 per cent. or so that was achieved in 1983. The balance of trade has also inevitably been adversely affected on both the oil and coal accounts, to the tune of over £1½ billion so far. However, once again, the bulk of the deterioration will be of a strictly temporary nature.
Then there is public expenditure, for which the Leader of the Opposition gave a completely false figure. The public expenditure cost of Mr. Scargill's strike now amounts to a very considerable sum. The sooner the strike ends the better but if it were to continue until Christmas it would add about £1½ billion to the PSBR for 1984–85, which is well in excess of normal contingency margins. That means that the PSBR for the current year is likely to be much higher than I expected at the time of the Budget —perhaps in the region of £8½ billion. This would, of course, still be well below last year's PSBR and, as a proportion of GDP, comfortably the smallest for well over a decade. Moreover, the overwhelming bulk of this borrowing has already occurred, and, unwelcome though the addition is, it has been successfully funded. Monetary growth remains on track and I confidently expect to meet the targets that I set at the time of the Budget.
The House should be in no doubt whatever but that the Government are prepared to pay the cost of resisting this strike, however long it lasts. That makes sense in economic terms, but, more important still, no nation can ever afford to give in to violence and lawlessness, or to an attack on democracy itself.
Mr. Campbell-Savours rose——
Mr. Lawson: We regret the economic cost. We regret the human and social costs too, but they are not of our making. The strike has cost jobs as well. There can be little doubt that as a result of the coal strike unemployment today is higher than it would otherwise be. Shops and services in the strikebound areas have inevitably been affected, as have a number of suppliers to the Coal Board. All this means fewer jobs, without taking into account the indirect impact on jobs as interest rates are kept higher than they would otherwise be.
I believe that anyone—any political party—who was really sincere about wishing to reduce unemployment would point out to the striking miners that, while Mr. Scargill claims that the strike is in defence of jobs, it is actually destroying jobs. The Leader of the Opposition has boldly and rightly condemned the activities of Mr. Scargill overseas. I now ask the right hon. Gentleman at this late hour to turn his attention to home, to the jobs being lost while Mr. Scargill refuses to contemplate a settlement.
We heard nothing at all new from the Leader of the Opposition today. He has offered no solutions and proposed no measures that have not been tried before and failed. The Labour party mouths concern—indeed, I admit that it feels concern—but it has no policies for, no answers to, or no concept of, the causes of unemployment. Nor has it a coherent strategy for dealing with it.
By contrast, the Government have. Our answer is to continue the fight against inflation, to create an enterprise economy which will produce the jobs for tomorrow and to

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spend public money judiciously on training for the unemployed and on helping them to help themselves. We must present those in work with the choices that they must make if we are to bring unemployment down.
As a nation we have it in our power to see unemployment fall in the years ahead as rapidly as it has recently risen.
Mr. Campbell-Savours rose——
Mr. Lawson: The Government will play their part in keeping inflation on a downward path and in creating the conditions which will help to bring about the sort of behaviour by management, unions and workers alike which alone can exorcise the spectre of high and rising unemployment, with all its human suffering and social hazards. But in a free society the Government alone cannot determine the outcome. There is no crueller deception than pretending to the people that a government can, yet that is the deception which the Leader of the Opposition was practising today.
5.13 pm
Dr David Owen: The Leader of the Opposition spoke in moving terms about the situation that faced him at his constituency advice bureau. I suspect that at their advice bureaux very few hon. Members have not, over the last few years, increasingly heard of similar distressing circumstances. Indeed, on rare occasions, I am sure that they have witnessed the distress, so eloquently described by the right hon. Gentleman, of an adult man breaking down in tears at the consequences of unemployment.
Few of us have not heard distraught mothers who have been anxious about their children, either because of an incident involving crime or drug addiction, all of whom will relate many of these social problems back to the frustration, alienation and depression of their youngsters. Some of those young people have been out of a job for five years since they left school at 16. Some have gone through a couple of youth training schemes, yet have still been unable to use the skills acquired and to get a job.
No one can be under any doubt that the issue we are discussing is central to the nation's cohesion. It is sad that the Prime Minister has immediately left the debate. After all, only last week she said:
"If the hon. Gentleman were fully familiar with the 1944 White Paper on employment I am sure that he would agree that it has a great deal in common with the policies that the Government are pursuing". — [Official Report, 23 October 1984; Vol. 65, c. 552.]
In common with this Government? The right hon. Lady quoted from the foreword of tha: White Paper and from the last paragraph. It was a pity that the House was not made aware of the first sentence, which states:
"The Government accept as one of their primary aims and responsibilities the maintenance of a high and stable level of employment".
The second sentence stated:
"A country will not suffer from mass unemployment so long as the total demand for its goods and services is maintained at a high level".
That White Paper was presented to the House by the Minister of Reconstruction of the then coalition Government in May 1944. The Prime Minister owes it to
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the House to say whether she now accepts what all her post-war Conservative predecessors accepted—the first sentence of that White Paper.
Many people, including some Conservative Members, believe that the Prime Minister no longer accepts that obligation and responsibility of Government. Because of the rejection of that central part—that it is the task and role of Government to seek to alleviate the problems of unemployment — many Conservative Members believe that this Government are doing what Tory Governments did in the 1920s and 1930s, hanging around their neck the millstone of a party which is unconcerned about, and insensitive to, unemployment.
Mr. Tony Marlow rose——
Dr. Owen: It would be safer if I continued for a while. I shall give way when I have dealt with demand in more detail.
It is rich for the Chancellor to tell us of the consequences of the coal industry dispute when some months back he said that the costs were a good investment. It is also rich of him to do so when, as recently as 2 December 1983, in a speech to the Enderby and district young farmers club, he predicted that unemployment would fall during the general election. He said:
"I was lambasted for my 'optimism'. The bringer of good news is scarcely better treated than the bringer of bad. But the critics must be beginning to worry … In short, it looks as though unemployment is now levelling off'.
Since then unemployment, on a seasonally adjusted basis, has risen by 153,300, and it is still rising. The right hon. Gentleman knows that, yet there was not a scintilla of hope in his speech. We saw the fatalism and the government of despair which believes that there is no other alternative.
The Chancellor spoke of "the only way". I shall address myself to some of the ways in which he could change the policy. There has been much discussion about the United States. The Leader of the Labour party was right to introduce that, because there are some lessons to be learned. That type of high-tech, entrepreneurial, market-oriented economy is something to which we must aspire a good deal more than we have done hitherto. It is important to recognise that we can achieve that market orientation. But for five years this Government have consistently squeezed the British economy. One of the lessons of the American experience is that in the first two years they squeezed their economy and unemployment rose, whereas in the last two years they relaxed the squeeze and unemployment has fallen.
Mr. Straw rose——
Dr. Owen: I shall not give way for the moment.
I have just returned from California, where people are adapting to the change extremely rapidly and are absorbing the high technologies at an impressive and rapid rate. They see the challenge of Japan and the newly industrialised countries. It is to our shame that we are still resisting the inevitability of industrial change.
United States experience has shown that tight money and a relaxed fiscal policy can lead to economic expansion even with high interest rates. The United States has achieved that by fiscal tax cuts — too much for my liking—on the rich, and by increased defence spending. What of this Government? They have tight money and a tight fiscal response. That is the party that spent the 1979 election campaign promising reduced taxes.

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What have the Government done? They increased taxes from 40 per cent. to 45 per cent. of national income between 1979 and 1983. They have a tight fiscal stance as well as a tight monetary stance and they refuse to recognise that demand can be expanded while still holding a reasonably firm control of monetary policy. Somehow we have to persuade the Chancellor that there is an alternative.
In the 10 years between 1973 and 1983, British industrial workers' real hourly earnings went up by 10 per cent. and total British employment went down by 7 per cent. Over the same period in the United States industrial workers' real hourly earnings went up by 2 per cent. while total American employment went up by 16 per cent. We can learn lessons from that economy, although it is not always easy automatically to adopt the same policies here because we are more vulnerable to changes in overseas markets.
The Chancellor makes much of saying that people should price themselves into work. People do not price themselves into work, but the Chancellor can and should price people back into work by reducing labour costs to employers so that they have the incentives to take on more people. The present Chancellor and his predecessor have priced people out of work and produced few new labour market measures to cut labour costs.
One of three options can be adopted to reduce labour costs. The first, and by far the best, is to reduce taxes on jobs by restructuring national insurance contributions. The second—easily the worst and most indefensible option—is to reduce benefits. I am afraid that the Government are even now thinking of not fully indexing supplementary benefit. I hope that we can persuade the Chancellor not to take that option. The third and least effective option is to reduce wages.
I have doubts about the Chancellor's figures. No proven link exists between a fall in real wages and new job creation. Since 1980 real product wages in Britain have fallen by 6·3 per cent. even though unemployment has risen. Yet real product wages have risen by 6·1 per cent. in Japan and by 6·4 per cent. in Italy, even though unemployment has also risen.
The London Business School calculated last July that a cut of 0·5 per cent. a year in real wages in the United Kingdom would lower unemployment by only 22,000 over four years. That is a small number. There is no magic cure in that.
Mr. Bryan Gould: I am grateful to the right hon. Gentleman for giving the House the relevant American figures, which the Chancellor of the Exchequer declined to give. In addition to a modest increase in real wages in recent years, American workers have experienced not only vastly improved job prospects but a rise in living standards which they could not have expected if the job prospects had been removed. With the benefit of tax cuts as well as improved job prospects, the Americans have had a sharply different experience from that of British workers.
Dr. Owen: Increasing demand and activity has led to greater prosperity in America. American workers in industries needing lay-offs have been prepared to negotiate the holding of wages to keep up employment levels. Adjustment in America has been more flexible than here, although that flexibility is occurring here and is a welcome development.
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It would be deeply damaging to cut benefits, as I fear the Chancellor intends. I have two objections. First, it would hit the poor savagely. The Supplementary Benefits Commission's latest report shows that 1·4 million families have incomes below the supplementary benefit line and that 3·2 million people are on low wages only 40 per cent. above the supplementary benefit line—that is, about £60 a week or less. Real poverty exists in Britain. It would be indefensible if the Government were to try to solve their unemployment problems by cutting benefits.
Such a cut would not create jobs. The Supplementary Benefits Commission report said that only 5 per cent. of the unemployed were receiving more in benefits than they would in earnings if they were in work. They were primarily single men who had been unemployed for six to 12 months or more and who had low incomes and large families.
The gap between benefits and earnings has increased since 1980 owing to a fall in the real value of some benefits and the abolition of others such as earnings-related unemployment benefit.
Only 7 per cent. of those who became unemployed in 1983–84 received as much as 90 per cent. of their former earnings. The numbers who might return to work because of any cut in benefits are likely, therefore, to be very small. Unemployment would not be reduced by more than 100,000 over two years — that is an optimistic assumption—at a savage cost elsewhere.
I hope that the Chancellor will not refuse to adopt the third and best option. Total national insurance contributions for employers and employees have increased from 7 per cent. of national income in 1978–79 to 8·5 per cent. in 1984–85. That breaks down to a 1 per cent. rise for employees and a 0·5 per cent rise for employers and takes account of the abolition of the national insurance surcharge, for which the Chancellor rightly claims some credit. If one deducts the value of the surcharge, employers' net national insurance burden has risen by £700 million since 1979, adding significantly to the cost of hiring additional labour.
All that money should be used to restructure national insurance contributions so that they bear less heavily on the low paid and eliminate national insurance contributions on new jobs, particularly for the long-term unemployed. If that were accompanied by a 1 per cent. overall cut to smooth out anomalies, at a total cost of only £600 million over two years, it could create 220,000 jobs. That is the best way to deal with the Chancellor's problem which he highlighted.
We must also deal with capital expenditure. The CBI, hardly an irresponsible source of fiscal information, is demanding a £1 billion increase in capital expenditure That has to be set against what has happened in the last 10 years. The public sector share of total investment in Britain has fallen from 44 per cent. to 26 per cent. Capital spending cuts have consistently been preferred to revenue cuts by successive Governments.
The position is now bad. This year's planned total public sector spending will be £400 million less in cash terms that it was the year before. In 1986–87 the Government's planned total public sector capital spending will be $1·4 billion less. If £1 billion were spent over two years, it would create 150,000 jobs.
Capital injection does not create as many jobs as many other schemes. The alliance would like a much more ambitious scheme to be launched. We believe that if we

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were to invest heavily in the community programme by about £970 million, about 500,000 jobs could be created. I realise that the Chancellor does not intend to do that.
Mr. Lawson: What about the public sector borrowing requirement?
Dr. Owen: Whenever we talk about expansion, Ministers always say that we have to borrow, as if that were a great sin. Not an hon. Member has not borrowed, either to buy a house or to invest to help expansion in industry or commerce. The Chancellor is wrong to claim——
Mr. Straw: Will the right hon. Gentleman give way?
Dr. Owen: No, I shall not give way. The Chancellor is wrong——
Mr. Straw: The figures are wrong.
Dr. Owen: I have given the figures as I see them. They may be wrong, but let us wait to hear what others say.
I have advocated an overall expansion of the PSBR in a comprehensive programme over two years of £2·9 billion—that is, £1·5 billion a year. The Chancellor looks at me in shocked horror. He has already announced a substantial overshoot on the PSBR estimate for this year. That only adds to the overshoot that we have had in 1980–81 of £0·4 billion, in 1981–82 of £0·9 billion, in 1982–83 of £1 billion, and in 1983–84 of nearly £2 billion. The PSBR has been set by the Chancellor but it has not been met on a single occasion since the Government made it into such a totem pole.
Moreover, the Chancellor refuses to face the fact that in 1983 the nominal target of £11·5 billion without asset sales—we must remember that the Government are always taking in asset sales to reduce the figure—would, if it were adjusted to inflation, come down to £8·9 billion. Whenever we look at the asset sales we see a farce. In some tables, asset sales are assumed to reduce public expenditure. That is nonsense. They do not reduce spending, although they help to finance it. In other tables, asset sales are assumed not to reduce capital expenditure, which the Government are trying to prove is being kept high. That is nonsense. By definition, asset sales reduce the stock of public capital. We are now talking not about small sums of money. The figure for British Telecom is possibly £3·5 billion. Will such figures just be subsumed into the general Government expenditure or shall we see a conscious effort to reinvest in Britain's wealth to recreate over the next few years some of the assets which have now been sold? If there is any justification for such sales, it must be to reinvest in capital and new industries, in innovation and in areas where the country would be able to obtain a return in 15 or 20 years' time, as industrialists are already urging the Government to do.
The Chancellor owes it to any successor Chancellor in 20 or 30 years time to use the revenue from assets that he wishes to sell now in order to build up assets for the future. Nothing could be worse than to sell off the assets and just allow them to be lost in the way that we are already losing the revenues from North sea oil. It is now time to tell the Chancellor that we will not accept that there is no other way. We will not accept, and nor do many Conservative Members, that there is no other policy. There are prudent policies that would not trigger off inflation in Britain.
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The Chancellor is right to be proud of the reduction in inflation, but at what a savage price. It is perfectly possible for a more relaxed fiscal posture to inject more activity and demand into the economy without bringing on inflation. If the Government were to risk inflation, two things have to be done. Employers and trade unions have to recognise that if we are to take some risks with expansion and increased demand, they must show some restraint on wages. If it were necessary—I hope that it would not be—it would be sensible to hold in reserve an inflation tax as the final act. The Chancellor laughs, but the consequence of not doing so would be to go on watching unemployment rise. That is now unacceptable to many millions of people in Britain. They would be prepared to put up with some of the inconveniences and difficulties of a form of incomes policy. I suspect that they would feel that an inflation tax would have the least damaging impact in causing arbitrary pay difficulties which we know come from almost all centralised incomes policies.
Some restraint might well be necessary. The Chancellor knows already that the private sector is now beginning to see a pick-up in wages. He has held back the public sector, again at a savage price, and trouble is brewing there for him. It is not good enough just to talk about increasing demand if we are not prepared to face up to the necessity of some form of incomes policy. I beg the Chancellor not to scoff. He may well have to explain to us why he has had to introduce some freeze at some subsequent time. Most Chancellors have had to resort to something like that.
Alternatively, will the Chancellor allow unemployment to rise to 4 million? What figure will he accept? That is no longer a route that is open to him. The Social Democrats and Liberals believe that the Government deserve the most savage censure for the way in which they have handled the present unemployment problem. We do not presume to say that a magic wand can suddenly be waved, but if unemployment were not to rise each month, what a lift it would give to morale in Britain. If unemployment were to fall by, say, 10,000 a month for a few months, what an incredible boost that would give to the morale of the British people. The relentless increase in unemployment and the pessimism and fatalism of the Government deserve to be rejected.
5.35 pm
Mr. David Howell: The right hon. Member for Plymouth, Devonport (Dr. Owen) made an interesting speech, in which he told us about his experiences on his return from California. I do not disagree with a number of the points that he made, although he seemed to get a little bogged down at the end. And I do not agree with his last remarks. Furthermore, the latest unemployment figures in the United States show him to be a little out of date because some of the most recent statistics demonstrate that once again unemployment in America is beginning to rise, thereby bringing home to hon. Members the danger of advancing any general assumptions or theories about the link between budget deficits and unemployment. America faces its difficulties and we must be a little careful in drawing too many lessons from such a different economy.
My right hon. Friend the Chancellor has been attacked again in the House this afternoon for not producing instant answers to unemployment. I am glad that we have a Chancellor who does not resort to attempting to cook up instant answers to unemployment, which requires a far

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deeper, longer-term and calmer approach than some easy armchair critics would suggest. I am also glad that my right hon. Friend did not take the advice of the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) during the recent currency volatility, when he demanded radical policy changes. It was such radical panic policy changes in the middle of currency volatility that caused such chaos in the past. At such a time it is not complacent but courageous and wise to adhere to the main components of a policy and not to rush off in circles trying, as people say, to "do something". That would have been wrong, and I am glad that my right hon. Friend set his face robustly against such pressures.
My right hon. Friend has been criticised for adhering to the basic point that the Government have adhered to throughout their five years of office—the belief, which has been wholly justified by events, that if one seeks to lift activity by a substantial increase in Government spending and borrowing, the effect, through inflation and interest rates, will kill more jobs than it creates. That is the experience of the past. Obviously, the same experience does not apply in every age, but that is still valid and still of fundamental importance. Therefore, in that sense, there is no trade-off between inflation and unemployment.
There is no easy table of figures by which one can say that a little more inflation will create more jobs. On the contrary, a little more inflation will almost certainly kill off more jobs than it creates. Those who like to sit back on macro-economic theories and say that they can achieve what they want by giving a little boost to demand through good sharp shock reflation are asking not for more employment but, alas, for more unemployment. There is a growing view and general understanding even on the Opposition Front Bench, and I suspect certainly among the most general and disinterested critics, that those truths hold and should be observed. To undermine such a strategy now would be fatal.
The difficulty about discussing the issue, as we are doing this afternoon, in economic and financial terms—perhaps it has been the difficulty of my right hon. Friend who has been looking after the economic and financial policy front and who has then been asked to produce policies for a much wider area—is that the unemployment issue that we face in this society is not confined to economics and finance. The same goes for some of our neighbours, but it is particularly true here.
My right hon. Friend has been criticised, but he was right, candid and courageous to say that the origins of today's unemployment do not lie primarily in the economic sphere. It therefore follows that there is no economic policy adjustment—a little turn here or a little twist there—that can restore the job-creating machinery.
The origins and the cure of our unemployment lie outside economics and finance. The House will have to face these realities, which lie outside party politics. The origins and the cure lie in the entirely new social circumstances that are emerging as a result of an industrial and commercial revolution which almost dwarfs the industrial and agricultural revolutions of earlier centuries. We now face conditions that demand a much deeper and more imaginative approach and a fuller range of policies and changes in attitude in industry and employer practices than we have previously experienced. We need radicalism in order to move away from the stale remedies of reflating and seeing what happens.
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We need to move, too, away from the dispiriting approach that everything will come all right because it did in the 1930s and the 1880s. We face wholly new circumstances. As Balfour said, history does not repeat itself—historians repeat each other. Believing that everything will be all right because it was in the 1930s is no reassurance and does not reflect an understanding of what is happening to the pattern of work.
How do we address ourselves to this entirely new set of problems and an entirely new framework of employment? How do we create the right policy framework to meet them? Various strategies have been advanced, but I fear that many of them would cause a loss rather than a creation of jobs. The best recent document from the political forum that addresses itself to the policy makers is that written by my hon. Friend the Member for Beckenham (Sir P. Goodhart), with the help and on behalf of the One Nation group of Members of Parliament. I believe that he addresses the problem in the right terms for the future. Some people might mutter that I have singled out that document called "Jobs Ahead", because I am a member of the One Nation group. I admit it. But another and stronger reason is that it recognises that the framework of employment is changing and that the type of work being done now is entirely different from that done even five years ago.
"Jobs Ahead" draws attention to the fact that one in five people in work are in part-time work. Such work is growing enormously, and faster than any other form of employment. The latest edition of Social Trends emphasises that one in five people who go to work are employed part time. People ask whether that is because full-time work is not available. The evidence suggests that it is not the case that part-time work fits into the pattern of what the other half of the marriage partnership is doing and that people are increasingly looking for flexible working hours. That accords closely with the growth of the personal services sector throughout the industrialised world. Some might argue that such work is still on the fringe, but it is a big and growing fringe. Social, tax and employment policy must adapt to the growing army who want to work part-time. It is quite different from the standard career pattern of 4'7 hours a week, 47 weeks a year and 47 years of a life. The typical "100,000 hours" career is passing away.
The second new demand that we must recognise is for a pattern of retraining, or education in new techniques, more frequently during a career. People will increasingly seek retraining in new technologies during their lifetime. Already, the new information techniques present us with a vocabulary which 16-year-olds use and 40-year-olds do not understand. People will want a substantial amount of time, during which they will need an income, for retraining at various points in their lives. That is a wholly new condition, which we ignore at our peril. If we brush it aside and say that we must merely try to create jobs, we shall ignore the real needs of a new industrial society.
The economic fundamentals to which my right hon. Friend the Chancellor is sticking are the foundation on which new economic and financial policies will rest. If the foundation is weak or if the inflationary job-killing machine starts up again, nothing will succeed and our power to adapt will be undermined. But the new policies will cost money. We must think carefully about how we fit the resource demand in with available resources. "Jobs Ahead" says that it would be sensible to go further than

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removing the surcharge on national insurance contributions. Thank heavens we have at least done that. It was a dreadful tax and I do not know how the Government of which the right hon. Member for Sparkbrook was a member ever devised such bizarre fiscal legislation. "Jobs Ahead" suggests that we should consider removing the contribution paid by employers for those aged under 20. That costs money. Knocking off the gains made from no longer paying unemployment pay, my hon. Friend the Member for Beckenham suggests a cost of £325 million. It costs a lot to lower the cost of employment and to help price people into jobs. It would also take substantial Government action. I suspect that it would be welcomed generally, but it would not come cheaply.
There again, both sides of the House agree that we must reduce taxes on low wages. An amazing disincentive pattern exists which the world just cannot believe. When the marginal rate of tax in the pound earned by someone on one third average wages, taking into account loss of rebate and other entitlements, is calculated, people overseas cannot believe the size of the contribution for tax and national insurance. They also cannot believe that such a low incentive is allowed to operate. But reducing taxes on low wages will involve colossal sums of money if we are to make a substantial long-term impact. I know that my right hon. Friend wants to advance on that front, because of his remarks about tax reduction as well as tax reform.
Next, we must also phase education into work much more slowly. That means that the educational part of a career might extend into the early or mid-twenties. The period of training will certainly be extended. My right hon. Friend the Prime Minister has said that her ambition is that people under 18 should face no likelihood of being out of work. She wants unemployment not to be an option for them because there should always be training opportunities and skill training. That is the right ambition, but I suspect that it must be extended. Some continental countries face exactly the same problems as a result of the same longer-term non-economic forces.
Attention is also given in "Jobs Ahead" to the other end of the career. It is proposed that we move away from the absurd idea that, at 60 or 65, a person's career is chopped off and he or she is no longer one of the employed. That is absurd, because people are living longer and they are anxious to play a substantial part in society long after they are 60 to 65 years old. In many instances they wish to have a role in society until they are in their 70s, and that is often possible on a part-time basis. That means that a pattern of part-time work can begin much earlier and perhaps as early as 50 years of age, as in Japan. Many Japanese people retire at 50 and take up part-time work such as consultancy, contract work or fee work that is related to their previous employment.
Contrary to what the Leader of the Opposition appears to believe, the Japanese do not have a wonderful set of employment statistics. When I told a Japanese audience recently that I admired Japan for having 2·8 per cent. unemployment, I was told that I was wrong and that that was not the correct statistic. If unemployment in Japan is considered in a manner comparable to United Kingdom unemployment the result might be 9 per cent. or 10 per cent. unemployment. It seems that a great deal of unemployment is disguised in Japan because, after a certain time, the unemployed do not feature in the
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statistics. A great deal more unemployment is disguised by early retirement and the gradual movement from full-time work to part-time that I have described.
Early retirement and part-time work cost money and working people will not take up those options if their pension opportunities are damaged and there is thus a constraint on their enjoyment of resources in older age. When the time comes, they may well want to give more time to voluntary work, for example.
Any changes of the sort that I have described are expensive. "Jobs Ahead" proposes a national voluntary early retirement scheme. In effect, it would be a vast expansion of the existing job release scheme, which has faced a number of difficulties, with the result that the take-up has not been dramatic. It must be conceded that I am talking about substantial sums. It is estimated in "Jobs Ahead" that if the proposed scheme attracted a massive take-up—for example, 500,000—the cost would be more than £1 billion.
Next, we must remove some of the disincentives to the pattern of part-time work and shape the social security and tax systems to enable the disincentives to be removed. I should be failing to face the truth if I suggested that that could be done without a substantial effect both on the revenue and expenditure sides of the Budget arithmetic of my right hon. Friend the Chancellor of the Exchequer.
Capital spending has also caused a good deal of passion and excitement in the debate so far. It must be conceded, even by the greatest enthusiasts for greater employment in the construction industry, that the immediate effect on jobs of increasing Government capital spending, which I have advocated in the past, would not be especially great; but there is a case for some further movement on Government capital spending, although the figures that have been floated this afternoon are absurd and spurious in their precision. The right hon. Member for Devonport talked about £2·9 billion and we had £2·3 billion from the Leader of the Opposition. These are absurdly precise figures in an uncertain area. None the less, there is a case for more capital spending to help provide jobs and to demonstrate that all avenues and all forms of remedy are being mobilised in the face of unemployment, which is not one issue but a set of difficulties. Unemployment represents a component set of problems requiring a variety of different remedies. I urge the Government, for the psychological and employment reasons that I have described, to consider whether they can move on capital spending. I think that the construction industry argument has some validity although I hold no special brief for it.
No one has the right to say that the Government should make all the moves to which I have referred unless he can also say where the necessary resources should come from. We must be aware of our limitations and the pace at which we can move.
I rather doubt whether it is possible to separate macroeconomic policy from micro-economic policy, although I know that my right hon. Friend the Chancellor of the Exchequer has sought to do so on one or two occasions. There is a school of thought which says that we must get macro-economic policy right and aim it predominantly at curbing inflation. It is said that the route to higher employment is to be found in micro-ecomomic changes, which are described in the current and awful American jargon as supply side changes.
If half of the micro-changes I have enumerated were to be contemplated, we would be dealing with sums that

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would burst into macro-economics. Their sheer size would challenge some macro-economic figures. They would have an impact on the figuring which has lain at the heart of the medium-term financial strategy. We are in a phase in which there needs to be some revision of the figures in the MTFS. That is almost inevitable and it would be wise for the Government to consider such a revision.
The heart of the issue is whether a more flexible stance can be achieved in our economic policy without degenerating into a crude dash for growth which in the end would destroy many more jobs and undermine the prospects for many more teenagers than even the policies of the past. The issue does not turn on whether we should go for £2·3 billion-worth of inflation or £2·9 billion. A flexible stance must avoid destabilising financial markets. If the markets are destabilised, we shall end up with higher interest rates and we shall be considerably worse off.
I am glad to note that some of the economic and financial pundits in the press are stating that it is possible to introduce some fiscal relaxation. That has been obvious to some of us for quite a long time. That relaxation should be over and above what I hope my right hon. Friend the Chancellor will achieve, and what I know is the Government's aim, which is to secure a pattern of lower interest rates in future. I hope that that will be achieved, but it will be difficult to do so in the climate that is developing in the American economy for 1985.
Certain advisers and those who understand the importance of my right hon. Friend's stance against inflation and the importance of having a flexible medium-term financial strategy are now urging some fiscal relaxation. I do not know how my right hon. Friend will put all the sums together for his spring Budget and I know that he will not tell us now. We have heard rumours about new sources of taxation from value added tax and they have not been greeted with unanimous enthusiasm. The Budget will also be helped considerably by the receipts from oil taxation that are to be measured in dollars. The gross tax receipts in dollar terms that flow from the taxation of the oil companies have soared and produced some Budget leeway.
Against that, my right hon. Friend has told us of the difficulties that this year's borrowing strategy faces when having to cope with the costs of the strike by the minority of miners against their fellow miners, against the rest of the trade union movement and against the country. That strike will cause further difficulties. However, the case for some fiscal relaxation and some flexibility and change in the medium-term financial strategy is strong. I advise the Government strongly to think aloud and positively about these matters rather than fighting a series of bloody battles before finding that they have to move in any event. The second course would cause the maximum damage to confidence, which is a fragile thing.
The financial markets admire what my right hon. Friend the Chancellor of the Exchequer has done and they are now prepared to lend to the Government in ways which they would not have considered in the past. It is vital that we maintain the reputation that the nation has painfully reestablished after the bizarre and casual profligacy of previous Labour Governments. Within the limits of which I have spoken, something can be done to ease economic conditions and create support for recovery in Europe and in the United Kingdom that we need. That will avoid the strange phenomenon of jobless growth, and produce a movement towards the creation of jobs of the sort that will
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fit into the society that I have described, which is emerging outside this place far faster than most right hon. and hon. Members realise.
Several Hon. Members rose——
Mr. Deputy Speaker (Mr. Harold Walker): Order. Nearly 40 hon. Members have indicated their wish to participate in the debate. The shorter the speeches, the fewer the hon. Members who will be disappointed at the end of the evening.
6 pm
Mr. Eric S. Heffer: I agree with one point made by the right hon. Member for Guildford (Mr. Howell)—that we clearly need a more radical approach to unemployment problems. The right hon. Gentleman's approach was not particularly radical, but it was slightly better than the approach of the Government Front Bench. The fact is that the crisis of the capitalist system in which we live is getting deeper, and it is therefore clear that the old shibboleths are no longer satisfactory to deal with it. We need an immediate programme to put people back to work, such as the one put forward by the Labour party. We need a clear analysis of the long-term crisis and the measures to deal with it. That means that we need a new approach to work, working hours, the development of technology and ways of ensuring that with a smaller work force there is a greater distribution of wealth throughout Britain, the Western world and, ultimately, the world. We need a radical approach.
When I was younger, I listened to some of the old Socialists who argued that we would ultimately live in a society in which only two or three hours' work would be necessary for all of us. I thought that was going a bit far, but, provided that society is properly organised, that can become a reality. It will require a radical change in the organisation of society, and we shall certainly not get that from this Government.
The Government have been totally consistent, because they are ideological. They have a philosophy. It has been said—as was said by the right hon. Member for Plymouth, Devonport (Dr. Owen) at the alliance party conference—that the Government should be accused of incompetence. I do not think that that is a real accusation to make against the Government. Of course the Government show a measure of incompetence. The accusation involves not the Government's incompetence in reality, but their philosophy of monetarism. They think ite andthat the market philosophy is the be-all and end-all. We must charge the Government with that philosophy, not incompetence. The Government's basic concept is competition. They put profits before the interests of the people and espouse the so-called Victorian values for which the Prime Minister is so interested in arguing.
There is, on the one hand, a steady growth of wealth among a small elite and, on the other hand, a rapid development of poverty, low pay, despair and misery among the unemployed and the low paid. The Government carry out blatant class politics. They have abandoned the concept put forward by the right hon. Member for Guildford, the idea of One Nation, and the Macmillan concept of "The Middle Way", which I invite all Conservative Members to read carefully. The Government have brought in the policies of the class struggle. They accuse the Labour party and movement of being concerned

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with class. No section of this community is more concerned with the preservation and success of their class at the expense of the majority of the people than Government Front Benchers.
Unemployment continues to rise. The increased unemployment that was announced at the beginning of October was dramatic. About 13·6 per cent. of the work force are unemployed. That is an indictment of Government policy. I have said before, and I say again, that unemployment is a crime against individuals who are unemployed, their families and society as a whole. All previous Governments—even the Heath Government—believed in the concept of full employment.
Mr. Marlow: Will the hon. Gentleman give way?
Mr. Heffer: Not just now.
It is an achievement for me to say that the Heath Government had some merit, because I spent much of my time in the House fighting the Heath Government on all sorts of issues.
At the end of the second world war, every politician in the House accepted the concept of full employment because of the experience of the 1930s. Everyone hoped that we would never return to that position. We have returned to the 1930s. In some areas, such as the one from which I come, whole streets of people are unemployed. The only difference between now and the 1930s is that, until now, benefits for the unemployed have not been drastically cut, although they have been cut to some extent. Some people argue that the problem may be dealt with by cutting benefits, and then cutting them further.
Mr. Marlow: Will the hon. Gentleman give way?
Mr. Heffer: I am sorry; I shall not give way. I hope that the hon. Gentleman will forgive me. This is the first speech that I have made on the Back Benches for three years. I shall be happy to give way on other occasions, as I have done in the past.
I want to make it clear that, where there are high levels of unemployment, there is an increase in mugging, break-ins, the use of drugs and alcoholism—all manner of social evils. It is no good suggesting that unemployment and those social evils are not related. They are. One affects the other. We on Merseyside understand those problems very well because of the levels of unemployment. It was announced in September that in Merseyside county 141,482 people were out of work—21·3 per cent. of the working population. In my constituency, 10,340 people were out of work in September, 5,318 of them for more than a year. Those are the figures from one employment office. Imagine the misery that means to those people's families. I know youngsters who have not worked for four or five years and have no prospect of work. They have no opportunities, no chances. That is a great indictment of the Government. Unemployment is being used to depress the living standards, wages and security of the people.
About 250,000 Merseysiders are on poverty wages. They form a substantial proportion of the many Merseysiders who live on the margins of poverty. In just four years—in the period since February 1980—the number of those totally dependent on supplementary benefit has risen by almost 68,000 to a record 205,541. That is an increase of more than 49 per cent. Poverty
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wages are now being paid on Merseyside because of the high unemployment. Wherever high unemployment is to be found, the workers' wages are depressed.
An interesting document concerning Merseyside, which was issued by the Low Pay Unit, states:
"The overall proportion of low paid workers on Merseyside mirrors the national picture—indeed indeed the extent of low pay amongst men is more than the national average. This is because of a particularly acute problem of low pay amongst non manual workers. As the table shows, non manual men on Merseyside are 50 per cent. more likely to be be low paid than their counterparts nationally. Non manual women on Merseyside are nearly twice as likely to be earning very low wages (£50 gross per week or less) compared to in the country as a whole."
That is what is happening to our people. Unemployment leads not to more employment, but to low wages and further unemployment. That is the lesson that we must learn from this Government's policy.
Mr. Robert Parry: My hon. Friend's point about low pay is quite correct. Only last week, the National Union of Public Employees gave evidence that dental assistants on Merseyside receive less than £32 for a full week's work.
Mr. Heffer: I thank my hon. Friend for making that point.
The Government are obsessed with the law, and with regulating industrial relations. They have enacted three pieces of legislation which add up to much worse industrial relations legislation than the Heath Government brought in. It is designed to weaken and ultimately destroy the trade union movement. It is interesting that at the same time as that law is being imposed on the trade unions there is a law and order problem relating to illegal underpayment of wages on a fairly large scale. The Department of Employment has the wages inspectorate, which is responsible for policing the system of wages under the wages councils. Of course, we hear that the wages councils are likely to be abolished, because they keep wages too high for workers.
Ms. Clare Short: Shame.
Mr. Heffer: I agree with my hon. Friend that that is absolutely shameful.
It is clear that nationally the number of outdoor inspectors was reduced from 177 in May 1979 to 119 in March 1983. In the north-west, the number was reduced by one third, leaving nine outdoor inspectors, supported by six indoor staff. The incidence of illegal underpayment is extremely high on Merseyside, and it is estimated that 55·7 per cent. of those in the industries concerned receive lower wages than they should. If Conservative Members are so keen about law and order, they should use the law to deal with those who do not pay working people proper wages or provide decent conditions, according to the law of the land.
Obviously, I should like to say much more, but many hon. Members wish to speak, and it is not right to take up too much time. However, I must mention the construction industry. Today, the construction committee of the TUC lobbied the House, asking hon. Members to press the Government to ensure that something positive is done to get those 500,000 workers in the construction industry and allied trades back to work as quickly as possible. We should be doing that. The construction industry, which is labour-intensive, can put the workers back to work by putting into operation, for example, the plans of local

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authorities. It should not be said that there is no need for housing and for people to have decent homes in which to live. Every hon. Member who is honest with himself knows that he has people coming to his surgery saying that they live in overcrowded conditions, cannot afford to buy a house and cannot rent any accommodation. That is certainly true of the large industrial conurbations. It means that positive Government policy is needed to deal with the problem, and that money must be put into the construction industry so that we can begin to rebuild it.
The Labour party has put forward a pamphlet entitled "A Future That Works". I hope that Conservative Members will not just dismiss it as another example of the Labour party putting forward plans that have no reality. These have real reality—[Laughter.] They are the plans that can put our people back to work. Hon. Members may laugh because I used two words wrongly. But it does not matter. I do not give a damn. The fact that I might utter a phrase wrongly here or there does not concern me in the slightest. I am speaking for working people who, under this Government, suffer. I want them, the construction workers and those in my industry to be fully employed. That is what is important to me, not whether someone has made a slight slip in his speech. That is trivial and the sort of thing that happens in Oxford and Cambridge university debates. It is not funny; it is ridiculous.
We must deal with reality, and the reality is that there is mass unemployment and we must begin to put people back to work. I believe that our document forms the basis upon which we can do that. It is the immediate step that needs to be taken.
Conservative Members constantly pick out one person when talking about the miners' dispute, as though he had horns or wanted to undermine our British democratic system and to bring in an east European state. I have had more arguments, and possibly, in a sense, more important arguments, on serious issues within our movement with the leader of the NUM than any Conservative Member has had. But I know that Arthur Scargill speaks for his executive and was elected by his membership. The fact is that the Government are determined to crush the NUM. That is why they brought in MacGregor, who had a record of smashing a section of the mineworkers' union in America. After he had done that, he opened 12 pits, and the workers' wages were reduced and their pension rights were lost. He is trying to do the same thing here. That is why, at great cost to this nation and for a huge transfer fee, the Prime Minister invited him to Britain. I do not know exactly where the NUM is looking for money or why, but, if the union is in that situation, it is because of this Government's policy and legislation. I do not blame those workers.
Incidentally, are hon. Members aware that the Lord Mayor of Dublin instituted a fund for the miners? Would anyone suggest that the Lord Mayor of Dublin is other than an upright and undoubtedly good Catholic politician? The miners are getting money from all sections of working people in every part of the world.
Before we rush in to condemn Arthur Scargill, we should bear in mind that some Conservative Members are doing their best to put the trade union movement back into the position in which it was before the beginning of the century. They will not get away with it. Trade unionists may be pushed back from time to time, but in the end we shall have a free and independent trade union movement. [Interruption.] There is no need to mention Libya. What
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about Poland? Every hon. Member in this House knows that I have consistently argued for Solidarity. I have consistently argued for a free and independent trade union movement in Poland—[Interruption.]—and in Russia and every east European country. [Interruption.] The trouble with you is that you do not listen to what other people say. You are so prejudiced——
Mr. Speaker: Order.
Mr. Heffer: I certainly was not referring to you, Mr. Speaker.
If Conservative Members are so deeply concerned with supporting a free and independent Polish trade union movement, why are the Government importing coal from Poland to use in the fight against our miners who are members of an independent trade union?
6.22 pm
Mr. Peter Thurnham: I suggest to the hon. Member for Liverpool, Walton (Mr. Heffer) that what we want are responsible trade unions.
The tragic rise in unemployment is the most important reason why I am here, and why I have come into politics. The present level of unemployment is an enormous tragedy which could have been avoided if previous Labour Governments had followed wiser policies. The 364 economists are wrong. It is the inflationary policies of previous Governments that are the principal cause of the present unemployment crisis.
It is hard to remember it now, but unemployment was only 1½ per cent., rising to 2 per cent., when in January 1958 the then Prime Minister, Harold Macmillan, lost his entire Treasury team, including the right hon. Member for South Down (Mr. Powell), because they would not agree to inflate the economy in a vain attempt to hold down unemployment to less than 2 per cent. That was the start of a slippery slope which led to ever-increasing inflation and unemployment.
Now we are faced with over 3 million unemployed, with over 17,000 in my constituency of Bolton. There is a forecast in today's Financial Times of 5 million unemployed in three years' time if world trade peters out. I do not accept that we should tolerate such a possibility. If the forecast proved to be correct, it would mean having more than 30,000 people jobless in Bolton—a rise from 17·4 per cent. on the latest travel-to-work statistics to over 25 per cent. That is a totally unacceptable level. We must act with greater speed and vigour to counter any such threat, so that job opportunities for everyone—including my right hon. Friend and myself—do not peter out in 1987–88.
Being a firm believer in full employment, I have in my inside jacket pocket my copy of Beveridge's 1944 book, "Full Employment in a Free Society". He says that
"the successful working of a full employment policy depends ultimately on the degree of responsibility with which (union) bargaining is conducted".
He goes on to say that the Government's policy must be one of
"maintaining a stable value of money".
We now have a Government with a successful record of restoring the value of money. I regret that, despite not just one, not two, but three trade union Bills, we still have trade unions which act irresponsibly, causing Britain to have more strikes than our international competitors. From 1981 to 1983 Britain averaged nearly 300 days lost in

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strikes per year per 1,000 workers, compared with only 18 in Japan and only two in Germany. Despite our three trade union Bills, the position today is still unsatisfactory.
On Friday the CBI reported that one in 12 of current pay negotiations now involve strikes or industrial action, compared with only one in 18 two years ago. Management still has to spend too much time dealing with militant unions. A manager in the shipbuilding industry that I met recently said that he had had to spend 80 per cent. of his time dealing with unions when he had no orders left.
We are faced with union militancy not only in the pits but in our car factories, and even in town halls. In Bolton, nursery nurses have been called out on strike by irresponsible leaders of the National and Local Government Officers Association in a futile five-month strike over pay, in which it is the mothers and children—and handicapped children at that—who suffer. Such strikes only destroy jobs. There are five applicants for every vacancy for training courses for nursery nurses. More pay would only mean fewer job opportunities, and fewer places for children in nursery schools.
The results of union militancy can be seen in the woefully inadequate profits of much of British industry. British industry is constantly exhorted to do more training, but the Bank of England's recent report shows that the profitability of most of manufacturing industry is only one third of what it needs to be if industry is to afford proper training. Protected home market sectors such as retailing are profitable enough to afford training because they do not have to face foreign competition.
The results of Japanese electronic companies, published last week, show that there are sufficient worldwide profit opportunties which British companies could take if the Government would act now to cut employers' costs and reduce union pressures.
I call on the Government to consider three points to reduce unemployment, while maintaining their financial policy. First, employers' national insurance contributions should be lightened. I am glad that we have abolished the notorious jobs tax, but we should go further so that the taxes bear less heavily on the low-paid. The present £34 weekly earnings limit should not be the start of a sudden jump in costs. If earnings rise above £34, the NIC should be paid only on the excess and not on the whole. The upper weekly limit of £250 should be abolished. I speak as someone who has built up a business employing more than 500 people in saying that that measure alone would encourage employers to take on lower paid workers and encourage part-time workers to increase their output.
The shortfall in revenue should be made up by a lower level of more broadly based expenditure taxes. The change in taxes from employers to purchasers would help United Kingdom manufacturers to be more competitive, both at home and abroad, while the reduction in industry's costs would offset the imposition of expenditure taxes, so as to leave net prices stable in the shops.
Secondly, the welfare system and the personal tax system should be integrated and the unemployed given every encouragement to start earning. The present £4 earnings disregard is a disincentive and should be changed to a graduated offset. We need not only an enterprise allowance scheme but an earnings allowance scheme, so that the unemployed can seek part-time work as a way back to full-time work. The 300,000 who have been
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unemployed for over three years should be guaranteed a place on training schemes to help them sensibly re-enter the labour market.
Thirdly, the Government should bring forward further legislation to control the monopoly power of the unions. Must we wait until 1986 for the next trade union Bill? Much more needs to be done. The working miners committee has asked for legislation to enable members of a union to oust union leaders who are breaking union rules. If we are to have true democracy in the unions, the new register of names and addresses should be open to all members and not just to the union hierarchy. Even after 1 November, we should ensure that no one who works during a strike should risk losing his job.
Social security benefits paid to striking union members and their families should be reclaimed from union funds. Why should taxpayers who have to work for a living fund benefits for striking miners, when the National Union of Mineworkers has hidden its millions away? The sequestrators should be looking not for only £200,000, but for millions of pounds to cover the supplementary benefits paid to striking miners. We recently heard on the BBC "Panorama" programme of the mortgage interest payments from the DHSS going direct to the miners. I do not mind miners profiting from the rise in the value of their homes, but not at the expense of other taxpayers.
There should be no-strike agreements throughout industry. If there are no-strike agreements in Japanese factories, surely we could have them in essential services and other industries.
Such measures would lead to a reduction in unemployment of about 500,000, as was estimated by Matthew Symonds in yesterday's the Daily Telegraph. That will provide the profitable conditions in which industry can play its proper part in creating wealth and in training its employees to achieve higher productivity. That will ensure that we never see the day when 5 million are unemployed.
6.30 pm
Mr. Ted Leadbitter: During the 20 years that I have been a Member of the House I have not learnt a great deal from debates on unemployment when they have been confined to comparative studies either of time or between regions or countries. No doubt it is an interesting academic exercise, but it does not put bread and butter on the plates of the unemployed. No one outside the House is interested in who did what and why five years ago. The subject of the debate is the social and economic consequences of unemployment today. The House must rid itself of its customary exercise of looking backwards rather than forwards.
All hon. Members have certain things in common. I do not believe that any hon. Member is happy with the social and economic consequences of unemployment. If we genuinely have that in common, we are not assisting what we want to do by making charges against each other. That deprives us of the opportunity to say something real to the country. Whether an hon. Member is a member of the Conservative, Liberal, Social Democratic or any other party, the experiences we face in our surgeries create a response. What is more awful than listening to a woman saying that her husband, sons and daughters are out of work? We have all experienced such families, living off and with each other. That causes frustrations, illnesses and neuroses.

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Is it not of some significance that we live in a society that is building law courts and houses for battered wives? Is there not something wrong in the way in which we handle our affairs? It costs £7,000 a year to administer and pay benefits to each person out of work. Is there not something wrong with our national book-keeping? Do we not have the ingenuity to break through the straitjacket of past years and honestly admit that there is something wrong with the way in which we use our resources?
The right hon. Member for Guildford (Mr. Howell) said that he was pleased that the Chancellor did not attempt to produce instant answers to unemployment. He should analyse the position carefully. We complain that unemployment persists, that it has been prolonged and is deeply embedded in our infrastructure. After five years, the Government have failed to convince the country that they have an answer. Indeed, many people believe that they do not want to find an answer. The problem has been faced by all Governments since the war. We have looked for answers, but never quite found them because we have been inhibited by the traditional way of dealing with our resources. If it is more costly to keep a human being idle than in work—and we freely admit that—how do we break the pattern?
Another important question is that of attitude. Does anyone believe that the Chancellor is moved by the despair and anguish of any man, woman or youngster in continuing unemployment, by the hardship and deprivation that that has brought to them and by the fact that they have no prospect of any improvement? The Chancellor may not know it—and I do not wish to accuse him—but he gives the impression that emotion is foreign to him. More than that, he gives the impression that he has a cold disregard for anything that differs from his own rigid reasoning processes. I do not say that as a criticism of the Chancellor. We are all aware of his gifts. He may be satisfied that he is meeting his obligations as a Member of Parliament and as the Chancellor of the Exchequer. Nevertheless, the impression that he conveys causes us concern.
In Hartlepool, 35 per cent. of men are out of work. It is a region of high unemployment. There are certain things that the Government could do to help that region. They should stop insisting on not dealing directly with the problems of unemployment in the regions, and intervene directly. On many occasions my hon. Friend the Member for Easington (Mr. Dormand) has suggested transferring Civil Service offices and jobs to the regions, yet not a single office or job has been transferred since 1979.
The Northern group of Labour Members of Parliament—and I believe Conservative Members also—is anxious that the region should have a development agency. The Government are obviously satisfied with the Scottish and Welsh Development Agencies because they have increased their financial support for them. Our region needs an agency to promote further injections of investment.
I have some proposals to make, each of which is debatable. I believe that we should consider a scrap-and-build policy for the shipbuilding industry. We should have a substantial increase in housebuilding. There should be an investment programme to meet the needs of British Rail. We should avoid the considerable waste of public money already spent on the training of doctors, teachers and nurses and let them work where they are needed. We should provide a substantial programme of energy
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conservation. We should let the Leeds scheme of combined heat and power and district heating projects go forward. Our North sea oil revenues should be directed more to industrial revival. We should move away from cosmetic occupation schemes that merely postpone for young people the heartbreak that they face at the end of a year or a few months' training. We should establish genuine training programmes to open up real job opportunities.
We should monitor more stringently the abuse of some of the schemes that provide cheap labour. We should encourage local authorities to embark upon a vigorous policy of environmental improvement. We should examine more pertinently early retirement and the shorter working week. Those objectives should be not inhibited by economic argument, but vitalised by political will.
We have a problem in the north-east which causes some anxiety. My hon. Friends the Members for Sunderland, North (Mr. Clay) and for Sunderland, South (Mr. Bagier) are currently interested with the rest of the region's Labour Members in the future of Coles Cranes, a substantial employer. They have now been told by the receiver that there is to be a sell-out to a company called Grove Allan of America. I and my colleagues find that surprising. A considerable consortium was formed to take over this company. It was made up of the local authorities, the county council, the directors of the company and the employees. The Department of Trade and Industry was to inject £ 1 million. We wonder whether the receiver's change of mind will affect the national and local interests of the area. Early-day motion 1047 outlines the points clearly and succinctly. We should like the matter referred to the Office of Fair Trading and the Monopolies and Mergers Commission.
Let us be objective. Let us not look behind. Let us keep our eye on the future.
6.42 pm
Mr. Michael Latham: I intend this to be one of the briefest speeches in the debate, but it will be no less heartfelt for that.
I believe that unemployment is the gravest social evil facing this country. It is clearly not improving. Indeed, it is becoming worse. Reference has been made to the admirable pamphlet of my hon. Friend the Member for Beckenham (Sir P. Goodhart) called "Jobs Ahead". That title is the only part of the pamphlet with which I disagree. It would be difficult to envisage achieving enough "jobs ahead", although his proposals would undoubtedly help. He made the point that we need to create half a million jobs by the end of this decade simply to stand still—to stand still at 3·2 million. We all know from our constituency experience that we are not standing still.
I believe that it should now be the job of Lord Young—and my right hon. Friend—to use his considerable practical experience and the expertise of his task force to bring forward effective remedies to alleviate those fearful unemployment figures. No option should be discarded without the fullest examination, however often they have been examined in the past. Those in the Cabinet who frame policy should start from the premise that unemployment must be reduced, that there must be a specific plan to do so and time scales within which it should be achieved, that no single domestic activity can be more important, and that it will not be tolerable for the Conservative party, still

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less for the country, if such reductions are not achieved and if the Government are not seen to put their full weight behind this policy.
In that regard, I ask my right hon. Friends to bear in mind three major considerations. The first is the 1 million-plus adults who have been unemployed for more than a year. That is a giant social evil and completely disruptive of family and personal morale. Secondly, people who become redundant after the age of 55 stand little current chance of obtaining another job. Worse, if they have been thrifty all their working lives and saved over £3,000 they may face literally years of no work, no pension and no supplementary benefit. Such thrifty people have in the past tended to be the natural supporters of the Conservative party. They bitterly resent the "Catch-22 " position of no help when they most need it. We ignore that point at our peril. Thirdly, while doing anything to alleviate unemployment will cost money, so does doing nothing and watching it rise still further.
I favour, as did my hon. Friend the Member for Beckenham, four specific steps, three of which are designed to share jobs better and the fourth to create more. I do not support massive reflationary measures or wasteful make-work schemes.
First, I believe that the job release scheme should be given a major impetus at once. Persons who wish to retire at 62 should be encouraged to do so with the full job release allowance. I understand that some Ministers regard that as non-cost effective, but nothing is less cost-effective than young people being unemployed while persons of 63 have to continue to work when they would prefer to retire. The basis of the scheme is that they should be replaced by someone currently unemployed.
Secondly, I believe that the time has come to override the cost objections to early retirement on full pension. I know that that is expensive, but so are all such changes. The pension age was 70 once and people worked 55 hours a week. When we reduced them, the economy did not collapse.
The speedy rate of technological change suggests that we should act in the summer of 1985—that means at once in legislative terms—to reduce the male pension age to 64 and to try to bring it down to 60 by the end of the decade. There is widespread support for that proposal. I used to resist it in constituency discussions and surgeries on the ground of cost, but I believe that the time to accept it has now come.
Thirdly, work sharing should be pursued much more energetically. That again has a great deal of public backing and Government support, in principle, since the 1982 Budget subsidy for it. How can employers be expected to take it seriously when the Government have done nothing to adopt the scheme within their own employment? We should set a better example and give a stronger lead.
Finally, there are improvement grants. I agree with the hon. Member for Liverpool, Walton (Mr. Heffer) on this. They are the main spheres of construction nowadays which remain heavily labour intensive. I pressed strongly in the House in 1981, with many other hon. Members, for a major programme of improvement grants to help the housing stock, to take the construction industry off the floor and to prevent unemployment. My right hon. and learned Friend the Foreign Secretary, when Chancellor of -the Exchequer, produced an excellent scheme in his 1982
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Budget which assisted all those aims. Grants are now much harder to come by. They are dropping off alarmingly in numbers, and there are rumours of further action to reduce them. House improvement received a severe blow from the VAT imposition last March.
I favour a substantial expansion of grants over the next two years, with 90 per cent. ceilings again, but with fairly severe restrictions on rateable value qualifications to prevent unnecessary subsidies to well-off householders.
I believe that the best way to avoid the bureaucratic difficulties which arise for local government because of its financial years, threats of grant penalties, holdbacks, and so on, is to transfer the administration of improvement grants forthwith to the building societies. The value of the work—some £400 million this year—is about the average monthly flow of the societies. As 75 to 90 per cent. of the expenditure is reimbursed by the Government anyway, and as the building societies have now largely taken over mortgage advances—including support lending for inner city areas—from local authorities, they could perfectly well handle the improvement grant programme as agents for the Government, and do so with fewer staffing and bureaucratic traumas than the local authorities have at present.
None of those four proposals is enough to measure up to the scale of the unemployment problem, but they would all help and I believe that they are vital now. The opinion polls and the results of two general elections show that there is a great deal of public support for the Government, but Conservative Members know that their constituents, including their key party supporters, want to see the full weight of the Government placed behind a forceful and urgent programme to reduce unemployment. We look to Ministers to respond urgently and favourably tonight.
6.50 pm
Mr. Ron Leighton: It is a great pleasure to be called after such a thoughtful speech from the Conservative Benches. The hon. Member for Rutland and Melton (Mr. Latham) mentioned four points; I shall mention three.
It is high time that the House, and particularly the Government, took notice of the scourge of unemployment. If I understand them aright, the Government admit no responsibility for unemployment. They say that it has nothing to do with them and that it is not within their power. They virtually wash their hands of the problem and say that it is a matter for the markets to deal with, not the Government. In the debate we might be told whether the Government admit any responsibility for unemployment and have a policy for alleviating it.
Do the Government agree with the Beveridge principle that it should be a matter of public policy to attain a high and stable level of employment? After all, if there is good news, the Government are quite pleased to take credit for it; but if there is bad news on the unemployment front, they say that it is nothing to do with them and that it is not their fault. They did not say such things at election time, for example, in 1979 when they were seeking office. The present Secretary of State for Energy, at Harrow on 17 April 1979, said:
"The incoming Tory Government must dedicate itself to abolishing unemployment by the creation of a competitive and expanding economy."

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Many other Ministers, including the Prime Minister, said similar things. Such things were also said in the Queen's Speech in 1979.
We all know that the economy is not expanding. We know that manufacturing output has fallen by about 15 per cent. since 1979. We are importing more manufactured goods than we are exporting. Even with North sea oil we have a huge balance of payments deficit. Therefore, I contend that the Government's record has been a disaster. The deficit on trade is resulting in the export of jobs. That is the Government's main export. The charge against the Government—particularly the Prime Minister—is that they do not care. They do not care that there is unemployment. The proof of that charge is the way in which the right hon. Lady ignores the long-term unemployed.
The corrosive curse of unemployment is the main cause of pain and misery in this country. The middle-aged are being told that they are too old, that they are finished. They are humiliated as they contemplate life on the dole until they reach retirement. The hopes of the young are blighted, and many of them become anti-social. Is that surprising? If society tells them that they are not wanted, why should they want society?
There is no sign from the Government that they are in any way concerned or that they care. I do not think that the Prime Minister really regards unemployment as a problem. I suspect that she thinks of it as a solution. It is a way of weakening the trade unions.
The Government have an incomes policy. It is called unemployment. When the policy of monetarism was introduced, we were told that it would cause unemployment. Everyone admitted that. One Minister told us that unemployment was the proof that the policy was working. It was a necessary consequence, but it would be only temporary. We just had to endure it for a short while and then we would have a leaner and fitter economy that would produce jobs. I think that that is a fair summary of what we were told. Is it not clear that the policy has failed? What we now call Thatcherism has been given an exhaustive real-world test, a laboratory experiment. It is noble of us to offer this country for a laboratory test of Thatcherism. We now know that it does not work.
Unemployment is now three times higher than it was in 1979. We were told then that Labour was not working. What has happened to the promise made by the Secretary of State for Trade and Industry in 1982 that unemployment was "near the plateau", or to the Chancellor's pre-election promise that unemployment would fall this year? Obviously, they were wrong. Unemployment is getting worse.
In 1979, unemployment had been falling for two years. The Labour Government had created more jobs. In March 1974, there were 22,704,000 in employment; in 1979 the figure was 23,087,000. In other words, during the period of office of the Labour Government, when things were not perfect by any manner of means, 383,000 jobs were created. I know that the hon. Member for Horsham (Mr. Hordern) would admit that.
Mrs. Edwina Currie: Will the hon. Gentleman give way?
Mr. Leighton: I would prefer to continue because——
Mrs. Currie rose——
Mr. Leighton: I do not want to take time from other Back-Bench speakers.
The truth is, as the hon. Lady will know, that the figures for June this year show that there are 20,889,000 in employment. Therefore, the Government have destroyed 2,198,000 jobs. Surely that is an appalling record——
Mrs. Currie: Will the hon. Gentleman give way?
Mr. Leighton: It is an indictment of the Government.
Mrs. Currie rose——
Mr. Speaker: Order.
Mr. Leighton: It would help if there were some contrition on the Treasury Bench. I welcome to the Treasury Bench the new Parliamentary Under-Secretary of State for Employment, the hon. Member for Eltham (Mr. Bottornley). I hope that he will show some contrition and understanding. He has a reputation in the House for showing some human understanding. I hope that he will realise that there can be no sense of nationhood, of one people, in this country if a substantial section is ignored by the rest, shut out of society and left to rot on the dole. It must be understood that that will damage the fabric and cohesion of society.
The House cannot tolerate that situation. There must: be a new approach. The Government must attempt to think new thoughts because unemployment will not be short-term. One thing is for sure: it will last for the lifetime of the Government. While the Government exist, there will be mass unemployment. No one on either side of the Chamber can say that unemployment is the fault of the unemployed. Whatever the cause—whether the Government's policies or other factors—no one can blame the nearly 4 million people who are unemployed. Something must be done. Parliament must show that it cares. If, as I believe, this is a national emergency, emergency action must be taken. I make three suggestions.
First, the present youth training scheme is utterly inadequate. More successful competitor nations provide a far better system of education and vocational training. In Germany and the United States, young people enter the labour market at the age of 18. In Japan, they enter the labour market at the age of 20. We should do something similar. We should improve and upgrade the youth training scheme to make it a two-year course, taking people to the age of 18 and paying a realistic allowance.
Secondly, there should be a vast expansion of the community programme—the MSC's only really popular programme. With 4 million unemployed, that scheme takes a mere 160,000. It scarcely scratches the surface of the problem. Yet there is plenty of work to be done. It is absurd to suggest that nothing needs doing. I invite the new Minister to visit my constituency—indeed, the situation may be similar in his own—where a large part of the housing stock is 100 years old and falling into disrepair. As my hon. Friend the Member for Liverpool, Walton (Mr. Heffer) said, it is absurd that hundreds of thousands of building workers are unemployed when our housing stock is falling into disrepair. We have unused resources, skills and people, and vast unmet needs, both public and private. Is it really beyond the wit of our society, of Parliament, or even of the Government, to put the two together? We already have a community programme. Let us build upon that.

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Thirdly, the most worrying aspect of all is the relentless growth in the number of long-term unemployed. They now account for 40 per cent. of the unemployed—about 1,250,000. The prime injustice is that these unfortunate victims of the Government's policy or of the situation, however one cares to put it, are actually discriminated against. They are the only long-term claimants on short-term benefit. That cannot possibly be right. An increasing number have now been unemployed not just for more than a year but for two or three years. However long they remain unemployed, they cannot claim long-term benefit. This group suffers the greatest hardship, because, after a family has been without wages for a year or more, clothes, boots and shoes and household consumer durables begin to wear out and cannot be replaced. The families of the long-term unemployed are vulnerable not just to poverty, but to the transmission of deprivation across the generations. The children suffer and their life chances in turn are affected. The House should give serious attention to that.
Research shows that the living standards of the long-term unemployed are worse than those of the short-term unemployed and that the living standards of both are worse than those of the lowest paid in work. It is harder to exist for a long time on a low income than for a short time on a high income. That may seem to be stating the obvious, but the situation is the more absurd in that the Government have already exempted the unemployed over the age of 60 from this regime. If the over-60s come off the register, they receive the long-term benefit.
Why have the Government refused this elementary claim of justice to give long-term benefit to the long-term unemployed? The Secretary of State will no doubt say that it is because of the cost. If there is some other reason, perhaps he will explain it. The cost is about £500 million. If cost is the Government's only reason for refusing justice, that is shameful. If the Government cannot or will not act to prevent long-term employment increasing, they have a duty to ease the awful burden borne by the people involved.
The situation is the more intolerable in that the Government are now taxing unemployment benefit. The Secretary of State will correct me if I am wrong, but I believe that this year taxation of unemployment benefit will raise about £725 million. When he appeared before the Select Committee, he could not answer the question, but no doubt he can now confirm that that is the revenue that the Government will obtain through taxing unemployment benefit for the first time. The Secretary of State, or at any rate the Chancellor, will thus have £725 million that he did not have before. What is wrong with using a fraction of that money to give elementary justice to the long-term unemployed? I will gladly give way if the Secretary of State will explain his policy on this. If not, perhaps he will answer the question at the end of the debate. Certainly I believe that the taxation will yield more than enough to cover the modest concession that I advocate. It is the least that the Government can do to help those suffering the greatest hardship with the smallest resources. We may have to call the Secretary of State before the Select Committee again. I hope, however, that he will give us an answer in the Chamber today, because the long-term unemployed cannot wait much longer. If
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there is a test of whether the Government care, this is it. If they cannot do this, it will confirm how callous and uncaring they are.
7.8 pm
Mr. Ralph Howell: Like many others who have spoken, I believe that unemployment is the most serious problem facing this country and, indeed, the Western world. If we do not find a solution, I believe that democracy will be in great danger.
My right hon. Friend the Chancellor was correct to say in a recent television broadcast that he now accepted that unemployment would remain high for some time. That is realism, and it is an important move, because we had been deceiving ourselves that unemployment would fall. We must recognise the seriousness of the problem from the outset.
I agree with my right hon. Friend the Chancellor, too, when he says that unemployment has been rising for decades. It began to rise slowly in the 1950s and it has been rising more rapidly in the past 10 years. The House has not really addressed itself to the reason for the problem. In my view, it has nothing to do with the present Government or the Labour Government. Every gadget, every piece of modern technology, is designed to save labour. That is why the problem has arisen, and why it will continue. It is foolish for the two sides of the House to continue to blame each other for the level of unemployment. Technology is the cause of unemployment in the Western world.
However, I disagree with the Chancellor when he said in the interview that there was no solution to the problem. There is a solution. It is work fare. It has been practised in some states in America. If we had put the Beveridge report into operation, we would have work fare in this country now. There would be no long-term unemployed, because after six months unemployment benefit would cease and work would be offered. Beveridge foresaw all the problems that would develop if we did not institute that measure. All hon. Members should re-read his report, especially pages 130 and 131.
If the Beveridge report had been put into operation in full, we would not have jobcentres. They have not achieved very much. Indeed, ever since we have had them unemployment has increased. We would have work centres instead. Fewer than 1 million people would be unemployed under the six-month rule. He said that that period might be reduced at times of economic difficulty. If we operated a limit of three months, there would be fewer than 500,000 unemployed.
Beveridge also said that young people should never leave school immediately to join the dole queue and that there should be an overall system of training for them. We must take that on board. If it is right to have compulsory education, it is equally sensible to have compulsory training. Despite what the Government have tried to do with such measures as the youth training scheme, the scheme is successful only in those areas where young people, or their parents, are properly motivated. There are areas where young people are locked into idleness and do not take advantage of the voluntary youth training scheme. I urge the Government to rethink the problem radically.
To that end, some of my friends outside the House and I have established the Employment Research Centre at the University of Buckingham. Although I think that I know the answer to the problem, the centre is designed to

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examine the entire spectrum and find solutions to the overriding problem of unemployment. We are currently researching into the methods used in Switzerland, where there has been less than 1 per cent. unemployment since 1950. It would be a good thing if the Government took advantage of the facilities set up by the Employment Research Centre to find an answer to this major problem.
I listened to the contributions from the main political parties, none of which had anything fresh to offer. It is time that we found a new answer. There could he an answer if only we would take up the idea of work fare. As the hon. Member for Newham, North-East (Mr. Leighton) said, there is plenty of work to be done, it is staring us in the face, the country is getting scruffier and scruffier, and work could be offered to all the unemployed for less money than we are throwing at the problem now. I urge the Government to consider radical steps to solve the problem of unemployment.
7.14 pm
Mr. Gordon Wilson: If it had not been for the unfortunate and tragic events at Brighton, the subject of unemployment might have been treated with greater seriousness by the Government. Over the past seven or eight years one of the strange paradoxes of political life has been that unemployment has not seemed to have the political punch that many people believed it might have had. One cause may be that unemployment has, until recently, been concentrated on certain areas and has tended to breed a degree of passivity caused by depression. We must address the subject with more seriousness and ingenuity than we have in the past.
The House must accept that the British economy has been declining, that there is an imbalance in relation to manufactured products and that the protection, albeit temporary, given by the substantial production of oil from the North sea is about to be breached. Regardless of the volume of oil produced, if in future the balance of payments moves totally into the red, there will be a tax on the currency and instability in the economy such as we have not experienced since 1976. The problem of efficiency must be dealt with.
One reason why I was depressed by the Chancellor's contribution to the debate was that he did not appear to have listened to and understood the clear cries for help from many communities. Over the past quarter of a century my constituency has been ravaged by both unemployment and emigration. A test of the effectiveness of an economy is whether a country can maintain and expand its population. Between 1971 and 1981, when it was hoped that Scotland would gain great advantages from North sea oil, there was a net outflow of 100,000 people from Scotland. In 1983 the figure was 15,000, and it is estimated in the latest figures that by 2021 there will be a loss of 350,000 people. That is a scandal. I do not wish to repeat my arguments about where the guilt lies. I tend to place the guilt, and rightly so, not just on both major parties, but on the Union which affects the way in which economic policy is applied in Scotland.
In Dundee there is one vacancy for every 14 people unemployed. Between 1979 and 1983 we lost 24 manufacturing firms, 24 service industry firms and six construction firms. Although we have had some better and more encouraging news for the city recently, a great amount of activity needs to be created to replace those lost jobs.
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It is clear from current reports that the climate for the Scottish economy is poor. Unlike the United Kingdom as a whole, which has experienced an upturn during the past two years, the Scottish economy does not seem to have recovered from the depression with the same speed. People are worried about a slowing down in the construction industry and further loss of employment.
It is a pity that the Government have not suggested any proposals which might change what has been happening during the past five years. I am especially worried that, at a time when we are beginning to admit that unemployment is a serious malaise which affects the whole of the United Kingdom, the Government are on the point of making changes in industrial regional aid which could be harmful to Scotland. In an excellent article in The Scotsman, on 3 October, Alf Young points out that already a substantial amount of regional aid is going to the south of England under section 8 of the Industrial Development Act 1932, whereas under section 7 the sums coming to Scotland have declined sharply. The policy might be institutionalised when the Department of Trade and Industry makes its long-awaited and long-feared announcement.
I pay tribute to the hon. Member for Dunfermline, East (Mr. Brown), who spotlighted some of the fears that arise, and congratulate him, as a Labour Member, on hav ing spoken out. I am horrified by the silence that seems to have developed in the Scottish community during the past six months, for we know that behind the scenes in Cabinet Sub-Committees decisions have been taken that will be extremely damaging to Scotland. Any strategy relating to electronics, or other industries, that may have put a salve on some of the gaping wounds would be shattered completely by the removal of the regional development grants.
The Leader of the Opposition mentioned oil revenues, but he underestimated them. He put the revenue at about £10 billion, but it is expected to be more than £11·5 billion this year. In Scottish terms, for every £50 that we give in revenue from oil produced off the Scottish coast, only £1 comes back in industrial development grants, and, if the Government had their way, it might be reduced to 60p.
Scotland has severe unemployment problems. Despite all the optimism and the economic necromancy that seems to be practised by the Treasury, there is no recovery. Scotland is not leading the United Kingdom out of recession—indeed, it might be dragging its feet. Nor is it any comfort to us to be told that other parts of the United Kingdom suffer from increased unemployment. The Scottish National party will not accept that as the yardstick by which Scottish industrial aid should be cut.
If the problem in other areas is becoming worse, there must be change in macro-economic policy, which I would recommend, and there should be an increase in the amount of money made available for industrial development. I am talking not just about the attraction of industry from overseas, although we are in competition internationally, but about small engineering firms being given the means to get rid of old-fashioned machinery and to introduce computerised numerically controlled machines, which will provide greater flexibility and efficiency and allow those firms to expand or simply to remain in business, which is the objective of many these days.
Both in Scottish and United Kingdom terms, much more emphasis must be placed by the Government on exporting. In the 1940s, 1950s and even into the 1960s, we heard the phrase, "Export or die". If one considers that

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the United Kingdom's increase in exports during a five-year period is a miserable 4 per cent., and that during that time—even in a period of recession—exports from the Netherlands increased by 13 per cent., from Sweden by 24 per cent. and from Japan by 37 per cent., to take just a few figures, Britain is lagging far behind.
If we can sell more abroad, we shall automatically create more jobs here. That is why the SNP says—we are willing to accept ideas from other parties as well—that an export unit should be set up in Scotland so that we encourage small and middle-sized firms to become involved in exporting. The multinational companies in Scotland—especially the whisky industry—know how to sell, although the whisky industry has suffered because of changes in fashion in recent years. The small firms do not know how to become involved in exporting and they fear the jungle of shipping forms that are beyond their understanding.
The Scottish National party firmly believes that the Scottish economy will improve only when we have our own Government in full charge of economic policy. Nevertheless, I must tell this Government that they should take on board the greater importance of curing unemployment and put much more effort into exporting. If they do something to encourage an expansion of demand at home, and combine it with selling goods abroad—the decline in the value of the currency should help in that direction—they may be able to make some impression on the statistics of unemployment, which each of us knows represent individuals who must suffer conditions that each of us would not wish upon himself or his family.
7.25 pm
Mr. Piers Merchant: In my constituency there is a polling district where unemployment reaches 50 per cent. so I know from personal contact the misery that flows from unemployment. In Newcastle, unemployment is 18 per cent.; in the county it is nearer 19 per cent.; and the entire north-east region is racked by high unemployment and the structural decline that is an underlying cause of it.
The burden of high unemployment has become intolerable, leaving an area devastated industrially, but far worse, an area where thousands of people are without hope and where families live at clearly lower standards than they did a decade ago. Unemployment drains the area of public wealth and brings behind this regional tragedy a wake of wasted human resources, environmental decay, disorder, lawlessness and despair.
What those thousands of people want is not a debate to lay blame, but action to end their misery. However, it would be facile not to observe that the process of growing unemployment has continued for two decades; that the structural decline of heavy industry is not the result of Government policy but the inevitable result of world and regional economic factors, and is a phenomenon witnessed under Labour and Conservative Governments alike; that nothing was done to halt the process—indeed, it speeded up under the Labour Government; and that an area overwhelmingly represented by Labour Members of Parliament and Labour councils has shown no prospect of growth under their stewardship. The Opposition Members
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who represent the north-east have done precious little, and have little to show for their unrealistic policies and even more incoherent rhetoric.
The people of my constituency and the Northern region understood that the first priority in the battle against decline, and thus rising unemployment, was the control of inflation. Therefore, they were prepared to accept recession in order to halt inflation. That was achieved, and the Government were applauded for it, as the results of the general election in the north-east demonstrated. However, job creation must now be placed at the top of the political agenda and must be directed especially at depressed areas, not just for economic but for social reasons.
Job creation can be achieved without reversing or abandoning our long-term or short-term economic strategies. There need be no heresy in a limited and directed pump-priming of the economy by placing some Government capital orders, which are needed in any case, in a way that will benefit depressed areas. I refer to such projects in my region as rail electrification, which has already begun with an announcement on the electrification of the east coast line, and which is warmly welcomed in the region. New power stations will clearly be needed as the economy grows, and orders would benefit the large firms involved in power station manufacture, such as Northern Engineering Industries in Newcastle. A major road-building programme is needed in the north-east; the Government could provide defence orders for the shipyards; and we need major construction projects, as the hon. Member for Liverpool, Walton (Mr. Heffer) rightly said.
My proposals do not mean the invention of work simply to create jobs, but would be a sensible use of ordering policy to sustain and expand jobs where they are badly needed. This is practical support. We do not need new structures or new bureaucracies such as a northern development agency.
The hon. Member for Hartlepool (Mr. Leadbitter) seemed to think that he had the support of northern Conservative Members when he said that his group supported a northern development agency. He believed that we did as well. We do not support such an agency. Instead, we support practical help, but not new structures of government, either regionally or nationally, which are supposed to help but would not.
Mr. Nicholas Brown: Does the Conservative party support the creation of a new regional industrial executive designed to draw together the regional TUC, the CBI and others with an interest in the development of the Northern region's economy? Is he able to support that?
Mr. Merchant: I know that some discussions have taken place about the setting up of such a structure, but I have not been informed of the progress in detail. Indeed, neither I nor my colleagues in the region have received sufficient information to form a clear opinion about whether such a project would be a viable and good operation. That can certainly be considered, but at this stage at least it does not have my support.
In any case Government can do only a certain amount. We also need new investment. On that note I welcome yesterday's decision by the Grove Allan company of the United States to buy the Coles Crane company of Sunderland. That substantial United States investment will

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save 1,000 jobs. It beats me why Opposition Members have condemned that. By opposing it, they are threatening a formula which has saved jobs and brought investment. In fact, they are perpetuating an image which in the past has harmed the region so much.
New investment can come only if the area is seen to be attractive, and investment should be attracted from anywhere and everywhere. Nothing could make it less attractive than the bitter, outdated 1920s image of the region, beloved and perpetuated by so many Labour Members. Their reaction to the Grove purchase is typical.
In the light of what the hon. Member for Hartlepool said, let us be quite clear what we are talking about, because it clearly illustrates a common idiosyncrasy displayed by Labour Members. Two options existed. The first was that a booming and successful American crane company would buy up a failed British company which has just made 1,000 men redundant. It would thereby create a company ready to seize massive export opportunities and which would become a full part of a powerful international company with ready access to world markets. By doing so, it would guarantee a long-term future for the jobs involved and for the plant that already exists.
Option 2 is a so-called management buy-out, sustained only by £3 million of public money that has been pledged towards the project. That money is effectively being hijacked through rates and high taxation from profitable companies in the region and elsewhere. It is a co-operative which at this stage has little credibility and no proven track record as a company and which is probably too small to compete effectively in world markets.
Given those two options, one would automatically have thought that the better choice would have been the first, but instead Labour Members appear to have gone for the second—a madness which will put another completely unnecessary burden of £3 million on the taxpayers and ratepayers of the region.
High rates are another major disincentive to genuine job creation. If my hon. Friends want to see the effect which high rates have on jobs, they should look at the sterile economy of Tyneside and at the level of rates there, particularly in Newcastle upon Tyne, which in 1983–84 raised the highest rates anywhere in the country.
The other major policy sustaining high unemployment is that contributed mainly by the trade union movement—the inflexibility and immobility imposed on the labour market by the trade unions. Thousands of jobs in the north have been lost because of the selfishness of those trade unionists in work who have used their industrial muscle to force through high wage rises even today, the direct effect of which has been major job losses elsewhere.
Mr. Nicholas Brown: Will the hon. Gentleman give a couple of examples of that, particularly in Newcastle or the Northern region? I believe that what he has said about trade union involvement in the region is wholly wrong.
Mr. Merchant: I take it that the hon. Gentleman intends me to give examples of loss of jobs through high rates—[HON. MEMBERS: "No, high wages."] In that case——
Mr. Tony Baldry: Perhaps I can give my hon. Friend an example. Have not the mine unions in the United States accepted a pay increase over the next 39 months which averages out at 3 per cent. a year, whereas in this country the NUM has rejected a pay increase of 5·2
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per cent? Therefore, it is not surprising that American coal is much more competitive than British coal. That is but one example of the way in which trade union intransigence is pricing British commodities out of world markets.
Mr. Merchant: I am grateful to my hon. Friend. That is indeed the case. Another example in Newcastle is the present strike at the DHSS complex which is directly linked to this issue.
Mr. Nicholas Brown: With the greatest respect, my question arose directly from what the right hon. Gentleman said—that trade union bargaining and the use of trade union power in the north-east had driven up wages and created unemploymemt. I asked the hon. Gentleman for an example of that in Newcastle upon Tyne, because it has not.
Mr. Merchant: I do not intend to detain the House by giving a whole series of examples. However, I shall give the hon. Gentleman an excellent example from the heart of his own constituency. Time after time in the last 10 years in the Northern Engineering Industries company there have been examples of high wage demands which were eventually granted by the company but swiftly followed by a pruning of the labour force as it struggled to keep its wages bill down. I do not know why Labour Members are asking for examples, because the logic is so clear.
This is the "I'm all right, Jack" attitude of such trade unionists. It may be perfectly familiar, but Opposition Members would do well to reflect on the fact that every time they support another wild and unrestrained pay battle they are supporting a move which will directly throw others on to the dole. Instead of blaming my right hon. Friend the Chancellor, they would do well to look at their own friends.
Anyone who pretends that he will sweep away unemployment overnight must live in a fantasy world. Conversely, anyone who believes that nothing can be done, or that salvation lies simply with rigid economic theory, is equally wrong. That is why tonight I ask my right hon. Friend to remain consistent with his policies but also to remain flexible and, above all, to follow sympathy with action which demonstrates that sympathy.
7.39 pm
Mr. Terry Patchett: I am grateful for this opportunity to participate in the debate. I promise that I shall not make a long contribution. I have heard many long speeches on unemployment from the Conservative Benches, and we are all aware of the result.
The Government are more interested in finding ploys to disguise the unemployment problem than they are in facing it. I have in mind their revamping of the statistics and the method by which they are arrived at. The Government are happy with the publicity about other industrial problems, which has deliberately been prolonged to keep public attention away from the country's most serious problem and the Government's failure to deal with it.
Regardless of oratory in the House or of the Government's election pledges, the facts are there for all to see. The Government were elected on the promise that reducing inflation would result in a drop in unemployment. They must now accept that although inflation has

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been reduced unemployment has risen. Surely that is a clear sign of the failure of the Government's employment policies.
Many excuses have been made by Conservative Members, including the traditional Tory excuse, which now unfortunately is being repeated, that wages are too high. The Government would take great delight in reestablishing child labour as a cheap labour force for their friends and supporters in industry. The Government's mania for low wages is, I believe, the real reason for the slow recovery of British industry from the recession. The Government are happy with high unemployment levels, because they bring fear to those in work and present the ideal opportunity for the Government to weaken trade union influence. The Government make no secret of that.
I put it to the Government that their friends in private industry have failed them. A heavy profit incentive holds no loyalty or patriotism. Various regional policies have been misused. I refer to assistance with rates and so on. Firms flit in and out of the regions as the benefits start and finish. Accountants find ways of getting European assistance which appears merely to contribute to their profits. That does not take into account the youth training scheme, which in many instances has cut labour costs.
In parts of my constituency, for example in the Dearne area of the Barnsley metropolitan authority, in mining villages such as Goldthorpe, unemployment figures are already high and 124 people are seeking every available job. The Government must understand the grave concern in my constituency. I have not yet taken into account the Government's energy policy, which supports the National Coal Board's closure programme to put four pits in the area at risk.
When the Government realise the evil that they have created, they will understand the strong feelings of miners in my constituency who are attempting to safeguard future employment for their children.
I could continue, but I shall conclude so that other hon. Members might have the opportunity to speak out against unemployment as it affects their constituents.
I await anxiously the Government's response to the debate. What justification is there for the Government's policies on unemployment? They must know that their policies are an abysmal failure. I call upon them to consider the alternatives suggested today from the Opposition Benches.
7.43 pm
Mr. J. F. Pawsey: I agree with the hon. Member for Barnsley, East (Mr. Patchett) in his criticism of regional policy and when he says that firms are flitting in and out of the regions.
I am sorry that the hon. Member for Newham, North-East (Mr. Leighton) is not in the Chamber, because his attack on the Government was completely unjustified. I contrasted what he said with the thoughtful comments of the hon. Member for Hartlepool (Mr. Leadbitter). He said that no one in the House wanted unemployment and that it was a problem that had faced all Governments since the war.
I shall identify the three principal reasons for unemployment. The first is the world recession, the second the new industrial revolution and the third the lack of competitiveness in the United Kingdom.
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Between 1972 and 1982 oil prices increased sixteenfold. That single basic fact fuelled the world recession. Most countries in western Europe and in the West generally are suffering from the scourge of unemployment.
The new industrial revolution is based on the microchip, computers, information technology, robotics and plastics. That matter was dealt with well by my hon. Friend the Member for Norfolk, North (Mr. Howell). He was right to stress that machines are taking over and that there will be fewer unskilled jobs. The items to which I have referred will be in the vanguard of the new industrial revolution. The old metal industries which served the nation so well are in decline. One set of figures illustrates the decline—the figures for the steel industry.
Steel production in 1970 was 27·7 million tonnes. By 1983 it had been reduced by almost half to 14·9 million tonnes. That is just one example of the new industrial revolution. It shows that we are moving from the old methods to new technology. We are living in a period of rapid change, of painful adjustment, and considerable resentment is generated. All this is understandable because the old skills are no longer required. The old labour-intensive industries are clearly in decline. Everywhere the new technology advances and the old technology is in retreat.
We have to face the lack of competitiveness in the United Kingdom. For example, the motor cycle industry was once a major employer, but now the only motor cycles produced in the United Kingdom are intended for the museums. That is the problem. The motor industry itself is in decline. In 1970, 1,367,000 cars were produced. By 1983, production had shrunk to 870,000. That illustrates the magnitude of the problem of competitiveness.
Some of the nation's industries and factories are frankly uncompetitive. It may be useful to examine some of the reasons for that. There is too much Government interference. The motor industry was bedevilled by purchase tax changes. Purchase tax was used as a regulator, to the motor industry's disadvantage.
Regional policy does not create jobs. All that it does is shuffle them around. It is a type of musical chairs played with jobs and people. Linwood is the best illustration of the failure of regional policy. Rootes, based in my constituency, built a new factory at Linwood which did not survive. It did not create real jobs. That weakened the parent company situated outside Coventry in my constituency.
Mr. Allen Adams: The investment at Linwood was originally £20 million. To compete effectively in the motor industry at that time required an investment of about £100 million. The problems reflect the lack of trust that British investors have in Britain. In the Clyde valley the shipbuilding industry also declined. Yet there was a shipbuilding boom after the war, from which people made millions of pounds, but they did not reinvest in British factories. They exported the money abroad, and the factories and shipyards on the Clyde could not compete.
Mr. Pawsey: The hon. Gentleman has raised several topics and he will forgive me if I do not pursue them all. How can one have a production line that is 500 miles long, which is the distance between Linwood and Coventry? That is why it failed. Moreover, the components industry

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is centred on the midlands, not Scotland. Another factor was the poor labour relations at Linwood. The hon. Gentleman must take all those issues into account when he argues any case for Linwood.
Mr. George Park: I am surprised at the hon. Gentleman. He should not say that the failure was caused because Linwood was 500 miles from Coventry. Let me put him right. The equipment on which Linwood was asked to produce cars had already been worn out in Coventry. I know that because I worked on it. The men were asked to make bricks without straw. Please accept that from me.
Mr. Pawsey: I recognise the hon. Gentleman's expertise—he was a convenor at the Rootes group, which provided the Linwood factory—but he will agree with me that if that factory had been built alongside the one at Ryton it would still be functioning today and his constituents and mine would have additional work. I doubt whether he will argue with that.
Other examples of Government interference are health and safety at work legislation, job protection legislation, and the former selective employment tax. Those are the ways in which the Government grossly interfered with industry.
I return to the point made by the hon. Member for Coventry, North-East (Mr. Park). There was too little investment, but the reason for that was the high rate of company taxation. Companies could not generate profit to re-engineer themselves.
Moreover, there was too much trade union bloodymindedness—a point well made by my hon. Friend the Member for Bolton, North-East (Mr. Thurnham). We all know about the strikes and overmanning and the outdated methods that the unions insisted on retaining. We know the figures for the days lost in strikes, but I shall repeat them for the benefit of the House. In 1950, Britain lost over 1 million days in strikes. By 1970, it was almost 11 million days. By 1980, it was almost 12 million days. From January to September 1984—less than a year—almost 16 million days were lost in strikes.
Mr. David Winnick: There was the miners' strike at that time.
Mr. Pawsey: My attention is drawn to the miners' strike. If ever there was a good example of a political, bloody-minded strike, it is that. Those are the problems that industry has to face.
Another reason for the lack of competitiveness in the United Kingdom was touched on by my hon. Friend the Member for Newcastle upon Tyne, Central (Mr. Merchant) when he referred to wages. It is a fact that wages in the United Kingdom went up by 2 per cent. per annum—faster than in Germany and France—between 1960 and 1980. There was a fivefold increase in wages between 1960 and 1980. But during the same period productivity rose half as fast as that of our major competitors. That is part of the problem.
Mr. Gordon Brown rose——
Mr. Pawsey: No, I shall not give way.
I do not support the call from the Opposition Benches for major Government spending. The right hon. Member for Cardiff, South and Penarth (Mr. Callaghan) said that we cannot spend our way out of a recession. That is a lesson that some Labour Members have evidently learnt,
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but it would be good to hear more of such views coining from the Opposition Benches. Spending on sewers does not create long-term jobs, which the Leader of the Opposition was trying to argue. Spending on capital programmes must be paid for out of taxes which are paid by companies which are fighting for survival. Funds are raised by borrowing, with the penalty of higher inflation and higher interest rates. In the long term the spend, spend policy costs, not creates, jobs.
Let me give the House some of my solution:3 to unemployment. I hope that my hon. Friend the Minister will take note of at least my first point. We should amend section 8 of the Employment Act 1980 so that its conditions will apply to companies employing 50, not 20, people. That would undoubtedly help the small firms to take on additional labour. Many small companies do not have the professional expertise locked into them and they are worried that, having taken on additional labour, they may later face problems and have to shed that labour.
We should be encouraging more early retirement. The points made by my hon. Friend the Member for Rutland and Melton (Mr. Latham) were particularly well made. I agree with every word that he said. He argued that we should be increasing the funding available for early job release and that we should be going back to the old system of job release where men could retire between the ages of 62 and 64. That is much more sensible than the present situation.
We should reintroduce the small engineering firms investment scheme. That did much for engineering companies, and assisted them to buy new machine tools. It meant that their productivity increased and that they were more competitive. The sooner we reintroduce it, the better.
We should re-rate industry and discount the industrial rate by 50 per cent. I appreciate that that would be an expensive step. According to a parliamentary answer that I received last week, it would cost about £1 billion, but that could be partly funded by money from regional aid. Regional aid currently costs £715 million. It would be far better to help industry by moving some of that £715 million to halve rating for industry. Those measures would all help to set industry back on its feet and to create real jobs.
Finally, I ask my hon. Friend the Minister to persuade as many members of the British public as he can reach to be as chauvinistic as the French and to think British and buy British goods, certainly where they are as good as comparable goods from abroad.
Mr. Gordon Brown rose——
Mr. Pawsey: No, I shall not give way.
Furthermore, we should step up labelling regulations so that one can see at a glance the country of origin of any item that one is thinking of buying. If British industry secured just 1 per cent. extra of the home market, that would mean an additional 80,000 jobs. That is the scale of the problem before us, and that is the scale of the challenge that I ask my hon. Friend to take up.
I support Government action on training, particularly the youth training scheme. It was recently announced, at the Conservative party conference in Brighton, that we are now spending four times as much on adult training as in 1979 and that, not content with that, it is to be doubled next year. That is clearly good news, and I welcome it.

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Conservative Members are concerned about unemployment. We deplore it just as much as anybody sitting on the Opposition Benches. We understand the misery of unemployment just as much as they do. We have surgeries in which we see our constituents, and therefore we clearly understand the problems. But it must be remembered that unemployment did not start in 1979. The Government are taking positive action, but real jobs come from industry, not from the Government. Unless that is understood, unemployment will continue to rise.
7.59 pm
Mr. George Park: I am glad of the opportunity to follow the hon. Member for Rugby and Kenilworth (Mr. Pawsey) as he was guilty of giving us some of the formula replies. The first is strikes. Such an apportionment of blame falls easily from the lips of Conservative Members but, to show that they should examine the matter more closely, I ask the hon. Gentleman to make inquiries at the factory that he talked about. He will discover that, for the five years during which I was the senior convenor, there was not one strike. He should have a thought before blindly blaming strikes for unemployment. They are much more rare than would be imagined from listening to the Government's supporters.
Mr. Pawsey: Has the hon. Gentleman seen today's issue of The Times which says of a car strike call:
"leaders of 28,000 Austin Rover car workers rejected an improved pay offer and urged their members to strike from Monday."?
Mr. Park: I thought that the hon. Gentleman might raise that one. Perhaps I might remind him of a statement made by a previous secretary of the National Union of Railwaymen. It was typically blunt and offended many people. He said that if the Government believed in the philosophy of the pig trough they must not be surprised if the workers wanted to get their snouts in the trough as well.
I welcome the opportunity to speak about unemployment in the heart of England. It took some time to convince the House that we are not in a little dip out of which we will climb quickly but that we are in deep structural trouble. In case anyone still harbours such notions, I should like to draw attention to the fact that, in the county of West Midlands, unemployment increased by 11,000 to 225,000 between August and September this year. At 17 per cent., that is 3.5 per cent. above the national average. Job vacancies fall, redundancies continue and time out of work increases from one year to three years and beyond. In parts of my constituency, unemployment is as high as 35 per cent., in spite of falling wage levels. To walk around my constituency and to see factories that once gave employment to thousands reduced to rubble is like walking around Coventry after the blitz, but this time it is the result not of bombs but of Government economic policy, which is not concerned with the social consequences.
In every recession, one of the first casualties is training for skill. It is the seedcorn of the future, yet apprenticeships have been slashed. As we heard on Friday, thousands of young people with qualifications have been denied entry to higher and further education, and universities such as Aston in Birmingham have had their
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grants from the University Grants Committee cut by nearly 40 per cent. in the past four years. Lanchester polytechnic in Coventry has been told that it must have fewer lecturers. It estimates that it needs £3·5 million for developments that it has in hand but, because of Government policy, the local authority can allocate less than £1 million. The skills shortages committee, which is chaired by the Minister who has responsibility for the west midlands, agreed that there is a shortage of thousands of graduates in information technology. Hundreds of places on Manpower Services Commission schemes in the west midlands have been cut. It is no surprise, therefore, that employers are now saying that they cannot get people with the requisite skills.
Coventry and West Midlands county have taken many initiatives in the search for jobs, but 500 jobs in small businesses make little impact when we have lost 20 times that number from major factories.
Mr. Winnick: I am aware of the devastation in many parts of the west midlands. Does my hon. Friend agree that all the publicity that surrounded the appointment of the Under-Secretary of State for Trade and Industry as the so-called Minister for the west midlands has not produced any jobs? During the two years of his new appointment, unemployment has continued substantially to increase in the area. Was not his appointment just a gimmick?
Mr. Park: As I said, just from August to September 11,000 more people became unemployed in my area. I have some sympathy for the Minister with responsibility for the west midlands, as he has been asked to make bricks without straw. He has no money. What money have the Government given him to take initiatives? Such initiatives as he has been able to take have had to be assisted by chambers of commerce and local authorities.
The Minister of State, Department of Employment (Mr. Peter Morrison): The hon. Gentleman said that MSC schemes—the youth training scheme and adult training schemes—have been slashed in the west midlands. Can he give some evidence of that?
Mr. Park: The evidence that I have been given shows that we have lost 745 places in the MSC's TOPS shops scheme.
Mr. Morrison: The what scheme?
Mr. Park: TOPS shops.
Mr. Morrison: Does the hon. Gentleman mean TOPS?
Mr. Park: Yes. Does the Minister not know the names of schemes? If the figures that I have given are wrong, they are wrong.
In addition to the lack of initiatives to provide skills training in the west midlands of the necessary depth, quality and quantity, the Government do not show much imagination in their policies. For example, my local authority applied to the Department of the Environment for derelict land clearance status to clear an old gasworks site. It is an eyesore and would provide an excellent industrial site in a badly hit part of the city. That application has been turned down flat. No grant is forthcoming because, says the Department of the Environment, looking at the city as a whole the site is not warranted. We are not asking the Department to look at the city as a whole. We are asking it to look at the bad bits. We do not want it to look at the Conservative bits where the Minister who has responsibility for the west midlands gets his votes.

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The Government are proposing to abolish the West Midlands county council. People are worried that the enterprise board will disappear as well. It has taken some valuable initiatives and has provided jobs much more economically than the Government's schemes. Investment is always necessary if industry is to remain competitive. It has been sadly lacking in the west midlands for many years. Another vital ingredient is confidence. I am not sure how confidence can be generated when the majority of young people know that there is no job for them when they leave school and when, at ever earlier ages, men and women are told that they are too old. Some are now told that they are too old at 40.
How can parents motivate their children when they can see no future for them? There is work to be done in the country and the longer we leave it the more expensive it will be. It merely requires a different attitude from the Government. As my right hon. Friend the Leader of the Opposition said, the Government could initiate carefully costed schemes to regenerate our infrastructure. I am talking not about throwing money at a problem but about putting schemes out to tender, perhaps accepting the lowest and getting the job done. When the hon. Member for Rugby and Kenilworth says that such schemes would not create long-term jobs, he is merely showing that he has not been to the black country and seen the hundreds of miles of sewers that need replacing. There are jobs there for years.
The Government could abandon their attempts to drive trade unions into the wilderness, sit down with them and management and work out what can and should be done. When the unions approach management for a shorter working week, the immediate reaction should not be one of horror. There should be a recognition that advancing technology makes a shorter working week possible and that we cannot continue to have a nation of haves and have-nots. Such initiatives could generate the necessary confidence and provide hope where at present there is none.
8.10 pm
Mr. Richard Holt: I cannot believe that any hon. Member enjoys participating in a debate on unemployment. None of us likes unemployment, and neither side of the House has a monopoly of care for the unemployed.
Mr. Roy Hattersley: Do the Government care enough?
Mr. Holt: Does the right hon. Gentleman wish to intervene?
Mr. Hattersley: I was merely observing that the Conservative Government clearly do not care enough about unemployment. That, I fear, is obvious. If they did care enough, they would do something about it.
Mr. Holt: There do not appear to be many Labour Members who care either at this moment. There are not many in their places.
Two weeks ago, millions of people were starving in Ethiopia. That fact must have been known to some in the Government and to one or two journalists, yet nothing very much was done or said about it. There was a harrowing situation in Ethiopia, yet only when the BBC reported it,
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and the stark reality appeared on our television screens, did the country rise and say as one, "Something must be done about it."
There is a massive job famine in my constituency. Like Ethiopia and its famine, the job famine in my constituency would make a good television programme. I hope that it will not be necessary for that programme to be made before sufficient action is taken to enable the unemployment to be reduced.
If we were to have a television programme on unemployment, the scenario would be that which has been outlined in the contributions to the debate from Members on both sides of the House. We would be shown the young disillusioned, the middle-aged struggling for a year or two after becoming unemployed and the desolation of those aged 50 or more who know that they will never find employment again. We would recognise throughout that programme that in the north of Britain, as in Ethiopia, there is a real problem with which we must deal.
The creation of jobs for the future is not the only problem. I do not think that it has been said so far in the debate that there are many jobs in the south and south-east of England. I was the leader of Wycombe council in Buckinghamshire until I came to this place in 1983. Last week I read the local Wycombe newspaper and found eight pages of job advertisements. That employment was being offered in one town in the Thames valley. It is a town and a region which I know well. I am now learning that there is a difference between the north and the south and that it is not properly recognised by the Government. The Government have not taken on board the necessity to try to assist those who are out of work in the north by enabling them to take some of the jobs that are offered in and around the London conurbation and the Thames valley area.
It is not good enough to say, "On your bike". There are few who are snails and can take their homes with them. There is a major problem. Earlier this afternoon, a ten-minute Bill was introduced to try to deal with problems affecting the green belt. The council which I led could not build any more houses in and around the Thames valley area because of green belt constraints, and there are jobs galore which cannot be taken up because of a lack of housing. Nearly 400 jobs were advertised last week in one local newspaper that appears in the Thames valley area.
The number of vacancies registered in the three unemployment offices in my constituency on the last occasion were 26, 13 and 62. If the Minister of State's staff took the trouble to read one local newspaper in the Thames valley area, they could extract many more jobs and place them on boards in jobcentres in the hope that some people would be able to travel. Our jobcentres are not geared to arrangements whereby people can move around the country and to carry out liaison between local authorities and builders, for example. Only 10 families managed to move from Langbaurgh by means of the mutual exchange of council houses.
Cleveland has the highest unemployment rate. According to Tyne-Tees television, Loftus in my constituency has the highest concentration of unemployment in the United Kingdom, apart from Strabane. Unemployment in Loftus has reached 45 to 50 per cent. My surgery is constantly full of constituents who ask, "What do the Government intend to do about it?" After five years of Conservative Government, we should be biting into the problem. I commend some of the views

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which have been expressed by my hon. Friends in outlining ways in which something could be done to alleviate unemployment.
Many are to blame for the unemployment. I agree with the hon. Member for Hartlepool (Mr. Leadbetter) that it does no good throwing brickbats at each other while observing who did what historically. Apart from demonstrating who has the best memory, that does not prove very much. That sort of conduct creates no jobs, does not assist in increasing mobility of labour and will provide no assistance in future.
Governments have created many employment problems, and my hon. Friend the Member for Rugby and Kenilworth (Mr. Pawsey) and others have outlined some of them. If an employer wants to take someone on he has to complete far too many forms, and he has too many forms to complete once he has taken someone on. There are far too many forms to complete when employers want to get rid of employees. We have not tackled the employment bottlenecks that have been caused by Government intervention.
When I was a practising personnel officer, every year I had to obtain a certificate of exemption because my company, along with almost every other company in the country, did not employ sufficient registered disabled to meet the quota. There are not enough registered disabled to meet the quota overall if every one of them is in a job, yet every year I and others had to go through the task of completing a form and sending it to the Department. When it reached the Department, a worthy civil servant would take time to read the form and would send me a certificate stating that my company was exempted from employing the requisite number of registered disabled. It would be so much better to have a real figure and to stop the exemption procedure. Such a system would boost employment for the disabled and give some meaning to the various forms and certificates.
I do not believe that there is very much liaison between the Department of the Environment and the Department of Employment when it comes to jobs and housing. If there is liaison between the two, I cannot understand how some policies have evolved. It seems that there are many individuals in many different offices going about their own affairs and failing to realise where the winning post is which so many are trying to reach.
A similar charge can be laid against those who are responsible for training people adequately and properly for jobs now and in future. I have yet to find evidence that there is any groundswell of change within the education system that will change outlooks and bring technician training into schools instead of leaving it until those who receive that sort of training are well beyond the optimum age for it. I do not believe that we have put those two things together.
I appreciate having caught your eye, Mr. Deputy Speaker, and I know that you are seeking to give every hon. Member a fair crack of the whip. I suggest to my right hon. and hon. Friends that we in the north want a commitment by the Government. Time and again since I became a Member of Parliament I have asked for the A1 to be uprated to an M1 motorway all the way to the north of England. I have to say to many people, "If you are coming to the north, I apologise for the fact that we do not have a motorway all the way to the north-east of England."
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The A1 is being resurfaced at Dishforth. It takes between one and one and a half hours to drive 1½ miles. That is the sort of problem that industry in the north-east has to circumvent, simply because there has not been sufficient capital investment in the infrastructure for that road to be completed to a proper standard.
Why was Teesside not made a free port when all the goodies were handed out? That is the region with the highest unemployment in the country. When free port status for airports was decided, Teesside was overlooked once again. There is a crying need to accelerate the hospital building programme in the north-east of England, but the programme has been decelerated. The programme should be brought forward more urgently than almost anything else.
Threats have been made to take the Sleipner oil line from Teesside and give it to Scotland. For more than 12 months we have had the festering sore of the possibility of nuclear waste being dumped at Billingham. I and Opposition Members have been seeking to persuade the Government to remove that blot so that firms are induced to go to the north-east and builders such as Barratts, which ceased building an estate of houses, go back to build houses and give some life to the area.
I began by saying that no one had a monopoly on compassion. That is right. I listened attentively to hear whether the Socialists could put forward anything that would be in any way a gem to which we could listen. Regrettably, they looked only backwards in everything that they said today. We refought the class war with the hon. Member for Liverpool, Walton (Mr. Heffer). We refought all sorts of nonsenses. The people of Cleveland look to the Conservatives to assist them in alleviating the problems. Only last week at a by-election for Cleveland county council the Conservative candidate took the seat from the Labour party and thereby increased our position on the council. That shows where the people up there have their hearts—in the Conservative party. Please do something to assist them in return.
Several hon. Members rose——
Mr. Deputy Speaker (Mr. Paul Dean): It might help the House if I say that the Front Bench speakers hope to catch my eye at 9 pm. I appeal for even more brevity from subsequent speakers.
8.23 pm
Dr. Jeremy Bray: I know the constituency represented by the hon. Member for Langbaurgh (Mr. Holt), as I used to live and work next door. I know Loftus. I believe that the hon. Gentleman has some thinking to do. If he thinks that he can run away from all the mainstream issues in the Government's economic policy and take refuge in the trivia about which he talked in his speech, he will not represent his constituency for much longer.
The Chancellor of the Exchequer commits three cardinal errors. First, he tries to stabilise the money supply, with the consequence of destablising the exchange rate and competitiveness. That is the most important price in the economy. The aim of monetary policy is to stabilise prices and so make them predictable, make transactions calculable, and make trade possible. By destabilising the exchange rate, the Chancellor destroys the whole objective of his monetary policy. In case the Chancellor tries to

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flannel his way out of this, I shall quote the Governor of the Bank of England. Last Friday, during a lecture delivered at the University of Kent, he said:
"There are even those who still insist that we have some kind of exchange rate target. How they can still think this after the exchange rate movements in both directions which have occurred in recent years and months—not only against the dollar but also against the generality of currencies—defeats me. Let me repeat without qualification that we do not have an exchange rate target."
Secondly, the Chancellor pursues the single objective of stable prices, instead of a balanced pursuit of stable prices, full employment and the growth of real incomes. There is no guarantee that even if the Chancellor succeeded in his objective of achieving stable prices that would provide growth in real incomes or the jobs that we need to return to full employment. That does not depend on whether there is a simple trade-off between inflation and unemployment. It would be even more true if there were no relationship beftween them.
The third cardinal error that the Chancellor commits is that he pursues an autarchic national economic policy with no search for international economic co-operation or any concept of what it means. If Britain leads in the world today, it leads the collapse into torpid international anarchy.
The Opposition have a constructive set of proposals. During the summer my right hon. Friend the Member for Birmingham, Sparkbrook (Mr. Hattersley)—I am glad that he is present to hear me say this—made a series of agenda-setting speeches. They meant that the Chancellor, when speaking today, could not allege that the Opposition have a vacuum of policy. My right hon. Friend grasped the nettles. He set out the problems, and therefore put us in a position to take advantage of the mainstream developments of present economic thinking and planning—whether in the research department of the Federal Reserve Board in Washington or in the University of Warwick macro-economic centre which was created by the Research Council which is headed by the former economic adviser to No.10, Sir Douglas Hague.
My right hon. Friend the Member for Sparkbrook—I hope that he will forgive me if I anticipate his speech, but perhaps he has to knock the Government about a bit—has set himself several causes. Let me commit some of my hon. Friends to those causes. My right hon. Friend set out a greater concern with the exchange rate. It is not all one way. It is possible to go too far. It is necessary to find the right level consistent with the fundamentals and sustainable by reasonable expectations. He accorded public expenditure its proper economic and social role. He supported the adoption of indicative planning—not with the Government doing all the indicating, but with industry and the unions doing their share. My right hon. Friend fostered social enterprise not only with the Morrisonian corporation but with the development of civic and cooperative enterprise. He called for the operation of an effective competition and prices policy, and recognised the extra benefits of a national agreement on incomes, if it can be obtained.
Some Conservative Members who think more deeply about this matter than the hon. Members for Langbaurgh and for Rugby and Kenilworth (Mr. Pawsey) feel that there is something too good to be true about that combination of economic policies of the Opposition because they contain no constraint. I believe that they are mistaken. There is constraint. The constraint is the maintenance of
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balance in the pursuit of objectives—that course which will achieve the fastest possible return to full employment. Constraint is imposed upon the things that can be clone today. It is an effective constraint in all the aspects that I mentioned, where we would like to move faster, if it were not for the fact that, as a consequence of that faster movement, we would face disaster round the corner. That concept of balance is foreign to the Government. It is a restoring and healing concept which the country sorely needs and to which it will respond.
8.28 pm
Mr. David Amess: The constituency that I represent is potentially one of the most exciting towns in the country. It is the largest new town, and has excellent communications, such as the M25. It also has a loyal, hard-working and dedicated work force. Many of them are east enders like me. However, there is one human tragedy that blights our town—unemployment. It is spread fairly evenly throughout the age groups. Thus, we have a large potential work force, yet not enough jobs for all those viho wish to work. At present, 7,043 people are without jobs and of them 2,694 are called the long-term unemployed. That is the highest figure in Essex, if not in the south-east of England. However, I have only given numbers, and they fail to convey the full tale of human discomfort and misery.
The town was originally built with the intention of people being able, by and large, to work locally. However, the very nature of the type of employment has changed and during that transitional period unemployment has grown. It is not very funny when someone loses his job. A. job represents not only someone's livelihood, but also his pride and self-respect. Indeed, some people live for their jobs.
I have listened to many speeches on this subject today from Opposition Members. I do not for one minute doubt their sincerity but I detect a certain smugness or detachment. The message from Opposition Members is clear. They say that unemployment is our fault, or the Government's fault, and that we do not really care. I would not be standing here as the Member of Parliament for Basildon if all those people without jobs blamed me or the Government. I have a totally different reaction from my constituents. They refuse to be used as a political football to score party political points. Instead, they genuinely seem to appreciate the problems and to support the Government in their attempt to restore prosperity to the nation.
Our low point in Basildon came at the beginning of the year when the closure of Carreras Rothman was announced, with the loss of 1,100 jobs. That was a devastating blow to Basildon. However, since then the Government have taken several initiatives which have considerably helped the situation. The youth training scheme has proved most successful in Basildon, and I have been round to meet the young people on that scheme. Local employers offered 839 mode A places, and the total of those receiving training is almost 700. A further 91 are expected to start training in November. So all the young people who left school last summer are guaranteed a place on the youth training scheme.
Last year's entrants have nearly completed their training. More than three quarters of them—76 per cent.—have now obtained jobs, nearly all with local employers. Some local employers who ran schemes have

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achieved a 90 per cent. success rate. I am particularly pleased with the news that I have been given tonight by the MSC concerning a number of local initiatives that will affect my constituency. It has been decided to set up a local collaborative project to examine local training needs for the new Basildon shopping centre, which will be the largest covered shopping centre in Europe; to establish a new adult training strategy with specific grants to local employees in order to improve training for existing employees; to aid the recruitment and training of new employees; and to increase the provision for information technology.
In Basildon there will be an expansion of the skillcentre training provision for the unemployed which is designed to meet the need for the new skills that are required. There is to be a new type of training programme for new technology and high-level technician training for 18-yearolds. It will be the only one in Essex. There is to be a new course—called a wider opportunities course for the development of women—to enable women to return to work more easily. A new pilot programme—again, the only one in Essex—to examine how to improve the skills of those undertaking a community programme, in order to develop them and help them gain valuable jobs, has also been agreed locally. The Government, via the MSC and the Department of Trade and Industry, have financed an information technology centre to a very high level.
Further good news is the announcement that Access is expanding its operation in Southend and is taking over the old Ilford Films building in Basildon. That will eventually create 1,100 jobs. Some firms, although wishing to come to Basildon, have been put off by the high rates that they would have to pay. Indeed, some firms have left the area because of the high rates. High rates destroy jobs and that is why so many people welcome the rates Act, the fact that Basildon's rates will be capped next year and the fact that the business ratepayer will now be consulted before any rates are set. That is excellent news for Basildon and for future job prospects.
Only last week I visited the unemployed workers centre in Basildon, which was built by the development corporation and is now staffed by MSC placements on the community programme. I listened to various people telling me about their difficulties in finding employment, and I pay tribute to those dedicated people who run the centre trying to help people to regain their confidence to obtain another job.
My constituents have faith in the Government's economic policies to create greater and more equal prosperity. The Government, I believe, will not break that faith.
8.35 pm
Mr. David Penhaligon: One of the disadvantages of being second in line to speak after the leader of the SDP is that one is called much later than usual. However, one of the advantages is that one is forced to listen to the entire debate. Perhaps all Members should have to experience that. It has been rather good and I have been more encouraged than I ever dreamt I would be.
With one exception, no hon. Member has behaved as if he had a complete solution to the problem. The exception was the hon. Member for Rugby and Kenilworth
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(Mr. Pawsey) who seemed to think that he had a solution, but when he came up with that devastating idea of reforming section 8 of the Employment Act we all knew how much weight to put on it.
There are 3 million unemployed people, but on the old criteria the figure would probably be 3·75 million. Clearly, the situation is becoming worse on two fronts. First, every month the number of unemployed increases. Secondly, the period during which the least fortunate have been unemployed becomes longer and longer. The number of those unemployed for more than a year is now registered as 1·25 million. It is worth remembering that only those who have succeeded in claiming benefits and who have been unemployed for more than a year are registered in the current statistics.
I have mentioned before the plight of those in their fifties who have been unemployed for more than a year, who may have run a small business, have accumulated £2,000 or £3,000 and who see the fruits of their lifetime's efforts being eroded until they eventually succeed in claiming supplementary benefit. The situation was bad before, but it is now becoming worse. Therefore, we look to the Government for a solution, or at least to tell us what will be done to prevent things becoming even worse.
The Chancellor of the Exchequer's presentation to the House was weak and offered those seeking employment little more than despair. There is constant talk of recovery. I accept that there has been some recovery, but, given the magnitude of the recession in 1980–81, some recovery is not all that surprising. Indeed, that recovery does not take us anywhere near the levels of 1974 or 1979.
The latest line from the Treasury concerns pay settlements in the private sector. There is an element of truth in the allegation that they are part of the problem, but I do not know that I would go as far as the Chancellor, who argues that they are a prime cause of the rise in unemployment. It would be interesting if the Chancellor would tell us whether he believes that such pay settlements prove that monetarism does not work. After all, monetarism was supposed to solve the problem of pay rises in the private sector without having a pay policy. On the other hand, perhaps it is his view that his policy has not yet worked. Clearly, he must believe in one or the other. If it is the latter, when does he believe the policy will start to work? If it is the former, what does he intend to do?
Pay policy is the long-term key to the levels of employment in the past, now and in the future. Hon. Members must find a satisfactory way of persuading those in work not to demand and obtain a little more than the real increase in their output justifies. Somehow we have to persuade them that that tendency, which has existed for many years, is a cause of unemployment within our society. It should be noted that I was referring to the increase in their income. I do not believe that low pay as such will solve unemployment. For proof of that one has only to look at my own county, which has the lowest pay in the United Kingdom. It is clear from the figures that low pay has not solved our unemployment problem in Cornwall. The present figure of 18 per cent. will probably grow to 25 per cent. by January.
What are we to do? To a very large extent, it is easier to say what not to do than what to do. I do not believe that there is any future for Britain in allowing overmanning. That is not the solution to our unemployment. I do not believe that there is any point in refusing modern work

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practices. I accept the Government's view that in the long-term modern work practices create employment; they do not destroy it. There is no future for us in propping up inefficient industry, or parts of inefficient industry, because in the long term that policy destroys more jobs than it creates.
Britain, in splendid isolation, probably has no complete answer within its own powers, but clearly we can do more to solve the problem than we are doing now. In part, the solution must be investment in the infrastructure of our society. On the subject of roads, one hon. Member complained that he did not have a motorway going right to his constituency in Cleveland. I live 91 miles from the nearest motorway, and to me it is a considerable improvement to have a motorway coming into the next county.
Clearly, our railways need investment, as do our water and sewerage services. The point hardly needs making. Obviously, we must have decent water and sewerage systems if we are to live in a civilised society. There can be no future for any part of the country which cannot supply itself with water throughout the year.
We need to invest in housing. I recognise that there are some limits to the money available to the Government, but they do some very peculiar things. One of the local authorities in my area has, with great enthusiasm, sold its council houses and now has million in the bank. That council wanted to use £2 million of its money to build some houses this year, but the Government stopped it doing so. I cannot imagine what lunatic contribution the Government believe that is making to our infrastructure, our employment and our housing. How can it help our recovery to prevent that council from spending money that it has in the bank?
We must, of course, invest in training, and I am glad to hear the general view developing in all parts of the House that the youth training scheme needs extending and building into a two-year programme. Those who have helped to build the YTS and have supported it must find that encouraging. If people want more of it, that must be some indication that it is useful.
We have to consider our general approach to the social services. The elderly in our community represent one of the greatest growth areas. They will need more and more care as the years go by. The size of the Government's budget for keeping people in old people's homes is frightening. Indeed, I understand that the DHSS is reviewing the position. Money can never be wasted on home helps, because the use of home support can keep people out of old people's homes, which are largely financed by the Government. A massive use of extra labour could be deployed in that area.
There is a limit to what Britain can do on its own. Many hon. Members have mentioned the United States. One of the obvious differences between our economy and that of the United States is that the United States' economy is much bigger than ours. Our dependence on imports is also much greater than that of the United States. It is true that if we stimulate our economy imports begin to be a problem. Sometimes we forget that we are part of the European Community, and the EC's economy is roughly the size of that of the United States. What we can do on our own is part of the solution, but a second and important part is what we could do in co-operation with our European partners. I say "could" because it would take a conversion
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equivalent to that of Paul on the road to Damascus to see our Prime Minister going to Europe and looking for cooperation in solving our unemployment problem.
Other areas requiring our urgent attention are working hours, retirement and the number of people in training. All of us, as time goes on, will have more leisure time, but the progress towards it must be slow and sensible. It would be catastrophic to try to do it overnight, but a drift in that direction would not be a bad thing.
The alliance believes that the Government could do better. There are plenty of jobs to be done, and plenty of people wishing to do them. It is a matter of the Government organising our economy and their own affairs rather better than they have done so far.
I recognise that there will not be a general election for at least two years, but the single most encouraging feature to me is that, as an Opposition Member, I can detect, on the fringes of the Conservative party, a realisation of the seriousness of the problem. It is beginning to get through to some Conservative Members. It is the duty of those Members—some of them have a great deal of unemployment among their constituents—to put pressure on the Chancellor of the Exchequer, and the Secretary of State for Employment and other Ministers to do rather better than they have done hitherto.
I plead with those on the periphery not to let the Government scrap development aid. That would be an unmitigated disaster. Without any development assistance to Scotland, Wales or the far south-west, it would be easier for the south-east to solve some of its employment problems, but the unemployment problems in the southeast are minor in relation to those in the peripheral areas, which deserve greater assistance than they are getting. I look to Conservative Members in those areas to ensure that the coming review does not result in a substantial reduction in aid. That would leave the remote areas of Britain even more exposed, and even more forgotten and ignored, than they are now. There can be no future in encouraging such sentiments in parts of our nation.
8.48 pm
Mr. Bill Walker: With regard to regional aid, the hon. Member for Truro (Mr. Penhaligon) will, I am sure, accept that I represent 2,000 square miles of what can only be described as Scottish highland area. I see very little help and assistance coming into that area through the regional aid policies. In fact, the bulk of my constituency is excluded altogether from aid. The question of aid has to be examined very carefully.
The Select Committee on Scottish Affairs, in the course of a recent investigation of the Highlands and Islands Development Board, visited Norway to see how the Norwegians were dealing with unemployment in the northern part of their country. As hon. Members will be aware, the northern part of Norway is very far north, so the problems are unique. We were surprised to find that unemployment there was very low. We discovered that in what we in Scotland would call the crofts—the very small farms—the people had their income supplemented by central funds to bring it up to the national average wage of the industrial worker.
In Scotland we have an entirely different, and a very clever and cunning, way of arriving at the same answer. We pay unemployment benefit to the crofters in the Western Isles. They live on their crofts, they work their crofts, they do not look for work anywhere else, and at the

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same time they are paid unemployment benefit. If we do that, we produce horrendous statistics, yet Norway produces statistics that look encouraging. That is not the answer to unemployment, but we must be careful to compare like with like.
I agree with my right hon. Friend the Chancellor on an important and fundamental factor. I do not believe that Governments create many jobs. However, they can create some jobs. I also accept that customers create jobs. If we are to encourage the sale of our goods, both abroad and at home, we must be price competitive. To do that requires a compound of many things—unit labour costs, rates, interest on borrowing and many other variable factors. We must persuade the Government to control certain areas, but to leave the market, the British people and management free to compete.
An earlier speaker drew attention to the many factors that had bedevilled the car industry. In the past, Governments used the hire purchase regulations to govern car and furniture production. I have experience of that because I have run department stores, and we regularly had to revise our projections for sales with the changes in hire purchase regulations.
I was surprised when my district council told me that, because of its aggressive and progressive view on the sale of council houses, it had sold more than £5 million worth. That is quite something in a highland area. I then discovered that the council could spend that money only in the year that it sold the houses because there was no rollover provision. That authority is sensible in its approach and would like to use the money to update its existing properties and add to its stock.
I was also surprised to learn that, during the last four months of the year, the Strathclyde direct labour organisation had £14 million available to spend, but could not spend it because it was not geared to do so in that time scale. It could not organise the architects, planners and others to decide what was required in Strathclyde. Very little, if any, forward planning has occurred. Consequently, it is not allowed to spend that £14 million. The Government should adopt the same business approach in that area as they have adopted in other areas and recognise the benefits of allowing a roll-over of money that has not been spent. That would help to deal with the unemployment problem. There is no simple answer, but there are ways in which the Government can approach the problem in a positive manner.
I care deeply about youth training, having spent most of my adult life in the training machine. I care deeply about the way in which we prepare our youngsters for their future careers. I was very encouraged when the Government introduced the youth training scheme because, at long last, they grasped the nettle that had eluded us since Bismark when he introduced training for German youths. We must consider how to make the one-year scheme a two-year scheme and, eventually, a three-year scheme. We must prepare our youngsters for the real world of tomorrow—not the airy-fairy world of theory and academia, but the world where job opportunities will be created by having the right people in the right place producing the right goods at the right price. That task will not be easy, but I have every confidence in the
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Government's approach to training. It is the beginning of the long road towards making Britain as competitive now as it was in the last century.
8.55 pm
Mr. Robert Parry: I had wished to speak for 10 minutes, but I see from the clock that I now have less than five minutes.
I support the remarks made by my hon. Friend the Member for Liverpool, Walton (Mr. Heffer), who put a good case on behalf of Liverpool and Merseyside. Can the Minister give any reason why there are such shocking levels of unemployment in the inner city areas and regions, but little or no unemployment in the salubrious south-east? The figures issued by the Library show that, after the redistribution before the last election, unemployment in my constituency was 36·4 per cent. I know that in other areas such as Toxteth and Vauxhall unemployment is between 55 and 60 per cent. That is intolerable.
My constituency has an unemployment level of 36·4 per cent., while the bottom of the league is Wokingham, with 3·8 per cent. My area has 10 times the unemployment of the affluent south-east. I live in my constituency and hold surgeries every week. Since the redistribution I now represent Toxteth. Does the Minister want to see more violence on our streets as our people search for jobs? Tens of thousands of youngsters in Liverpool roam the streets without any possibility of finding work. They are involved in all kinds of crime such as muggings and burglary. There has been a tremendous increase in the abuse of drugs, especially hard drugs such as heroin. A previous Home Secretary, Lord Whitelaw, agreed that rising crime was linked with high unemployment. I recently met the Merseyside chief constable and discussed heroin addiction on Merseyside, and he agreed that it was caused partly by the massive unemployment.
In Liverpool and Merseyside during the past few weeks 37 working-class men went to gaol for fighting for their jobs. They wanted to protect them for future generations—[Interruption.] The Minister knows nothing about unemployment. For a short time he was the Minister with responsibility for Merseyside, so he should have some idea of what is happening there.
I am sick and tired of trying to fight for jobs. I shall defend and support any workers who take any industrial action. I shall be involved in any extra-parliamentary campaigns to save jobs in Liverpool and on Merseyside.
8.58 pm
Mr. Roy Hattersley: I suppose that a man of more compassion would not mention the Chancellor of the Exchequer's speech at all, but since the Prime Minister lacks sufficient courage to defend her record or policies it is his response to the unemployment crisis that I must examine.
Let me make this clear to the Chancellor, even in his absence. [HON. MEMBERS: "Where is he?"] The Chancellor is behaving with his usual courtesy. There is a growing sense of outrage in the country that the unemployment level is the highest in history and seems certain to rise even further. More than that, there is growing anger that the party which came to office promising to cut unemployment from 1·25 million increased it to 3·25 million, even on its own doctored figures. On the more honest calculation, the calculation that the Government abandoned because it was

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inconvenient, there are 3·75 million men and women now out of work. When we include those unemployed who so despair of ever finding a job that they do not even register as unemployed, the total figure for men and women out of work is now over 4 million.
The unemployment crisis is now so widespread and prolonged that even the conscience of the Tory party is beginning to stir. Some honest and honourable souls managed to mention it during the Tory conference and the right hon. Member for Guildford (Mr. Howell), having spoken for half an hour, concluded with one or two looping runs which enabled him to utter the magic but terrible words that there needed to be a measure of reflation in the economy.
The Prime Minister chooses not to speak on this subject and the Chancellor—[HON. MEMBERS: "There he is."]—chooses to respond to the crisis with second-rate party polemics.
I have watched seven Chancellors of different parties and persuasions in the House. Not one of them would have demeaned himself as the Chancellor constantly demeans himself by exhibiting a frenzied determination to talk about anything except his own policies. Hansard will confirm tomorrow that within two minutes of the opening of the Chancellor's speech he had abandoned any attempt to defend what he had done or to describe what he was going to do, and had begun to discuss the Labour Government's record.
Since that is what the Chancellor wants, let us at least for a moment bow to his wishes and consider the comparative records on unemployment of the previous Labour Government and the present Government. That is what the Chancellor asked me to do, and to that request I respond at once. In our five years we increased national output by 12 per cent.; in the five Tory years national output has increased by 0·28 per cent. Under the Tories, despite all the talk about job creation, the total number of men and women employed in this country has fallen by 2 million; under Labour it rose.
It was not the Labour party that created the record number of company liquidations; it was the Conservative party. It was not the Labour party that created the first deficit on our manufactured balance of payments since the industrial revolution; it was the Conservative party. Under this Government, the annual tax bill has risen by £22·5 billion and the level of unemployment has risen by over 2 million. I have given the record of the Government in which I had the honour to serve. As the Chancellor is so determined not to put those facts on the record, I am delighted to do it for him.
I spoke a moment ago of two achievements—tax up by £22·5 billion and unemployment up by 2 million. I wish to examine each of them. The massive tax increase is the result of incompetence. The massive rise in unemployment is the direct, intentional, premeditated product of Tory policy. That is why we in the Opposition are sceptical to the point of anger. When we spend an afternoon listening to the laments of Conservative Members that they care too and they too have compassion and concern, we know that the simple truth is that they have neither sufficient care nor sufficient compassion to press their Government into taking the action that would reduce unemployment.
If we did not already know that unemployment would get worse, and even if the Government's friends, the London Business School, were not telling us that, we
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would know from the Chancellor's statement this afternoon that the rate of unemployment will continue to increase. We are back on the old merry-go-round. We are £1·5 billion off course. We warned the Chancellor about that in the summer. In June I asked the Prime Minister about demands on the contingency fund. She did not know what I meant. When her spokesmen spoke to the press about it later in the afternoon, they said that there was no pressure, no risk, no concern and no problem. Now, that all amounts to £1·5 billion, which will be followed by the same dreary formula—another round of public expenditure cuts already being leaked to the newspapers, further deepening of the depression and even more unemployment.
That is what the Chancellor prophesied this afternoon, and I fear that it is what will happen—for this simple reason. For all the high-falutin' language, bogus philosophy and elevated talk about limitations in the growth of money supply, M3 to M0" depending on the calculations, and despite all the calculations about the public sector borrowing requirement and all the new economics, the Government's economic policy has done no more than constantly deepen the depression and prolong the slump.
I hope that it is parliamentary language to say that any fool can hold down inflation by collapsing the economy. In 1933, the year that I was born, there was zero inflation because there was virtually no economic activity. The Government have created that situation again. That is why, under this Government, unemployment has risen by 1,940,000 to 3,280,000, according to the Government's own figures. That is an increase of 144 per cent., which has taken place under the party that produced a poster saying, "Labour isn't working", and promised that it would put Britain back to work.
We are required to address the following question: Who is to blame? The Prime Minister changes her mind from time to time. Sometimes it is the world recession, sometimes it is the local councils and sometimes it is the trade unions. There was one moment of hysteria when the Prime Minister blamed President Reagan, but that heresy was quickly recanted. If we go on like this, it looks as if the Prime Minister will be the first party leader to stand for re-election on the slogan, "Don't blame me, it all seemed a good idea at the time."
Of course, the Chancellor has taken similar refuge behind whatever cover he can find. But being the man he is, he has invented a bizarre variation on the Prime Minister's abdication of responsibility. When unemployment seems likely to fall, he claims the credit, thus accepting, by clear implication, that the Government can influence the level of unemployment. However, when unemployment starts to rise again, he rejects all the blame and insists that putting Britain back to work is beyond the power of any Government. Therefore, I should like to ask the Secretary of State for Employment a simple question to which I hope he will give me a simple and categoric answer: Do the Government believe that a reduction in unemployment is within their power?
I intend to give the Chancellor the opportunity to comment on some of his published utterances about whether it is within the Government's power to solve the crisis that we are now debating. The Secretary of State for employment will then have to tell us whether we are to believe the Chancellor in his manic or in his depressive mood.

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The Chancellor's manic mood was best represented by his speech to the young farmers of Leicestershire last December. If the Secretary of State would like the full text I will let him have it. I quote one of the better passages:
"At the time of the General Election Campaign the recovery had not yet been reflected in the unemployment figures, which were still rising. Nonetheless I predicted that in 1984 they might begin to turn. I was lambasted for my optimism … But the critics must be beginning to worry … It looks as if unemployment is now levelling off."
The punchline—the opinion for which the whole buildup had been prepared—was as follows:
"There is one main reason. We have held firmly to our policies. The strategy is on course."
In one particular, the Chancellor was right. In 1984 the unemployment figures indeed began to turn—sharply upwards. They increased by 200,000 in nine months.
Ingenious as ever, therefore, the right hon. Gentleman revised his whole economic philosophy. Two weeks ago he told Mr. Brian Walden on "Weekend World":
"What the Government can do to create jobs is very little, very little indeed … to fall into the error of thinking that the government can determine the level of employment is totally false".
Which is the truth? Which is the tablet of stone brought down from the Spectator magazine? Is it the truth as revealed to the young farmers of Leicestershire or the truth as revealed to Mr. Brian Walden? I will tell the Chancellor the answer. The truth is what he said in Leicester.
The lie to the assertion that the Government cannot influence the level of employment is given by their own record. When in 1982 it was convenient for them to do so, the Government stimulated demand, increased economic activity and thus reduced unemployment in the following year. In anticipation of the general election which they rightly thought would follow, they relaxed consumer credit, increased Government spending, intentionally overshot their public sector borrowing requirement targets and for one brief moment genuinely reduced unemployment. In five and a half years, the Government's only success in fighting unemployment was the brief moment when they abandoned Tory party policy and began to operate the policy of the Labour party.
I see the Secretary of State studying his official text. I ask him once again, is it or is it not his view that the Government can influence the level of unemployment? If they cannot, why does the Chancellor continue to hint, as he did this afternoon, that good times are just round the corner? We have been approaching that corner for five and a half years. If the Secretary of State echoed the Chancellor's view that we have only to wait a little longer and everything will turn out all right, will he tell us how long that little longer will be and when the end will be in sight? If the Government can influence the level of employment, why do they not do so? If they cannot, why did they pretend that they could during two successive general election campaigns?
If the Chancellor's words are true and the Government cannot create jobs, why have they appointed Lord Young? When the Prime Minister appointed him, she announced that his job was job creation. I have not had the privilege to meet the noble Lord, so I cannot even guess whether he realises his true purpose. He is a gimmick made flesh. His real responsibility is the creation of smokescreens, the
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invention of diversions and the construction of lame excuses. That is not a wholly honourable role for a peer to undertake.
I understand that even now he is negotiating a new and spurious scheme with the Manpower Services Commission, under which men and women will be given bogus jobs and paid subsistence or lower than subsistence wages simply to remove them numerically from the unemployment statistics. [Interruption.] Is that not true? I hope that it will not come as a shock to the noble Lord when I say that, in the lifetime of this Parliament, he will not create sufficient genuine jobs to compensate for the loss of employment in the single month which was reported to us three weeks ago. He will not create 168,000 new jobs. He will not make up that one month's economic deficiency in terms of policy and effective demand.
However, Lord Young may contribute to this Government's great growth industry—the statisticians who manipulate and polish the figures, change the calculation of unemployment to make it look slightly better than it is, make the guesstimates about the number of people in work to make them look better than the position is, and help the Chancellor of the Exchequer in that earlier dispensation to create a new prices index to make prices look better than they are. The idea that new jobs will be created in anything like significant numbers is part of a dream world unless there is a radical alteration to the basis of Government policy.
Nevertheless, we can create real jobs. Because the Labour party knows that to be possible, we resent the crocodile tears which have been shed this afternoon. Conservative Members such as the hon. Member for Langbaurgh (Mr. Holt), who is entering the Chamber now, have constituency interests which they must defend. I understand the difficulties that they face when, having been elected on a promise to reduce unemployment, they discover that unemployment in their constituencies is rising faster than ever. Their duty is not to come to the House and wring their hands with counterfeit concern. Their duty is to put pressure on the Government which will force them to change their policy. The people of Cleveland or the north-east will not be impressed by the fact that the hon. Member for Langbaurgh said how much he worries about their future. They would be more impressed if he were prepared to vote with his feet and demonstrate his concern for the future. They would be a little more impressed if he and people like him would bring the pressure to bear, which Back-Bench Members can bring, to require the Government to change course.
I shall give two examples of how that can be done—examples related to the speech and the analysis given by my right hon. Friend the Leader of the Opposition earlier today. When the Labour Government are elected in two or two and a half years' time, there will be once more in Britain 1 million families who need decent houses but who do not have them. They will be living with in-laws, in multi-occupation dwellings, in single rooms and in unfit houses.
Mr. Wilson: Yes, the ones who were disappointed by the previous Labour Government.
Mr. Hattersley: When the previous Labour Government were defeated, there were just more than 200,000 such families—[Interruption.]
Mr. Kinnock: We got a Tory Government because of the hon. Gentleman.
Mr. Wilson: On a point of order, Mr. Speaker. Is it in order for the Leader of the Opposition to accept responsibility for the breakdown of the previous Labour Government which he destroyed when he opposed devolution for Scotland?
Mr. Speaker: That is not a matter for me.
Mr. Hattersley: I shall try once more to interest the Scottish National party in unemployment. By the time of the next general election, 1 million families who need decent housing will not have it, yet more than 350,000 construction workers will be on the dole. Does it not make elementary common sense to point those construction workers at the homeless families, simultaneously end a social crisis of proportions that we have not seen for 20 years, and put a quarter of a million men and women back to work?
We all know that the Chancellor's great ambition is to cut taxes. If the Government had to choose between lower taxes and more jobs, which would they choose? The Institute of Fiscal Studies, backed by the London Business School, has demonstrated that £1 billion spent on tax cuts produces 30,000 new jobs; £1 billion invested in public expenditure produces 185,000 new jobs. Which would the Chancellor choose? We know which we would choose, and we have made it clear. My right hon. Friend, in his package of reflation, could not have been more precise when talking about such expenditure. I ask the Chancellor again to say, through the Secretary of State for Employment, which he would choose, which the Government would choose and, for that matter, which alternative all the shedders of crocodile tears on the Back Benches would choose. Would they vote for reduced unemployment or for something different, or would they do what we know them to be doing today?
The Government's policy in this area is easily described: they are looking for excuses and attempting to avoid the blame. Their frenzied desire to blame someone else was typified by the Chancellor on television about 10 days ago. He was asked by Mr. Brian Walden about Government responsibility—about the duties of Government and the Administration's obligations under the constitution to do what they can about unemployment—and the Chancellor offered this noble sentiment, this edifying comment, that typifies his sincerity and the dignity of the entire Government:
"I don't think that we should carry the can and I don't think that we will".
What a sentiment for a Chancellor of the Exchequer who ought to be less concerned about his personal reputation, or at least what is left of it after the Tory party conference, than about the 4 million men and women who are now on the dole.
I end with a final point—a confession which I unashamedly make to my right hon. and hon. Friends. In my inner city constituency, in the Sparkbrook Division of Birmingham, the northern wards have tonight officially registered male unemployment of 49 per cent. It is expected that when Thursday's figures are announced, unemployment in the Sparkbrook and Sparkhill wards in my constituency will rise to more than half of the total male population. Every other man will be on the dole. We thought that such a situation was inconceivable five, six
1240
or seven years ago. The nature of my confession is that when I see that constituency and the deprivation and suffering which has been caused by public expenditure cuts, the humiliation of the black British and Asian British and, above all, the unemployment that they now face in both wards, I feel ashamed that the Labour party allowed the Tory party to operate its heartless incompetence. Tonight, as well as exposing the weaknesses of their policies and offering a real alternative, we are promising that what has happened in wards, constituencies and cities throughout the country will never be allowed to happen again.
9.27 pm
The Secretary of State for Employment (Mr. Tom King): We have listened to two similar speeches from the Leader of the Opposition and the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley). In fact, certain identical lines reappeared, not least from the speech of my right hon. Friend to the Leicestershire young farmers. The House will have judged whether two speeches which consisted in large measure of a number of jokes and a certain amount of windy emotion at the end was the correct response of an Opposition. I wonder whether that is what the House and the country would have expected in a debate of this seriousness and importance.
I enjoyed the speech of the right hon. Member for Sparkbrook, and some of his jokes were very funny indeed. However, I wonder whether on reflection he thinks it was the proper time to make that sort of speech. He was unable to appreciate the biggest joke of all. When he made what I assumed was meant to be a joke about the Labour party being elected in two and a half year's time, he was unable to see the funniest part—the look of absolute horror and amazement on the faces behind him.
Most of us have been able to attend most of the debate, but I appreciate that the right hon. Gentleman has many responsibilities and may have missed it. We heard speeches from the hon. Members for Truro (Mr. Penhaligon) and for Hartlepool (Mr. Leadbitter), from my right hon. Friend the Member for Guildford (Mr. Howell), and from my hon. Friends the Members for Rutland and Melton (Mr. Latham), for Basildon (Mr. Amess), for Langbaurgh (Mr. Holt) and for Bolton, North-East (Mr. Thurnham). The debate was characterised by a seriousness and real concern with which the Opposition Front Bench speeches were in stark contrast.
I hope that I shall carry the House with me when I say that the issue affects every constituency in the country. Not one right hon. or hon. Member, no matter how lush the pasture may appear to be, has escaped the problem. My right hon. Friend the Prime Minister, in her memorable speech at Brighton, referred to unemployment as the scourge of our times. I endorse that sentiment. There is no doubt that unemployment is the most serious of problems and that it deserves a serious approach.
I have an advantage over some right hon. and hon. Members, in that I sit on the Council of Ministers dealing with social affairs in the European Community. That Council consists of Socialist, Liberal, Christian-Democrat and Conservative Ministers. In private discussions I notice that Socialist Ministers, faced with the responsibility of government and with the difficulties of tackling the problems, do not talk with the facile ease of Opposition spokesmen in the House.

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We shall not tackle the problem in the way everyone expects unless we understand some of the reasons why we have reached the present position and the background to the problems. The industrial decline was referred to by the hon. Member for Hartlepool. I do not think that the Leader of the Opposition can have heard him. He talked honestly about the problem which Governments of all parties had failed to tackle in the last 30 years and about the particular problems in his part of the country.
Let us examine the decline of the great industries. I have the production figures for our car industry. In 1960 Britain was producing 1,350,000 cars a year. Twenty years later, how far forward have we gone? We have gone backwards. Now we produce barely more than 1 million cars a year. The Labour party shares full responsibility for that. In France, car production in 1960 was 1·1 million. Twenty years later the French were producing 3 million cars a year.
I have referred to my first experience in the House as Parliamentary Private Secretary to Chris Chataway at the time of the decline and collapse of the British motorcycle industry. We used to lead the world, but competitive production declined. The same applies to shipbuilding and steel.
Let us consider the background and the disease that Britain faced. Between 1970 and 1980 we paid ourselves 320 per cent. more to produce 17 per cent. more. We became steadily less competitive and jobs were lost in their hundreds of thousands. We were slow to change and slow to adapt to the challenge.
My hon. Friend the Member for Rugby and Kenilworth (Mr. Pawsey) referred to the challenge of technological change. I recalled in particular the steel industry when I listened to Opposition Members trying to put all the blame on the Government. I recalled the plan in the 1973 White Paper. The Opposition went forth to campaign against that White Paper which was intended to give a chance while there was still time to restructure that steel industry.
What happened? The Opposition used every device that they could to prevent that reorganisation until it was far too late, and when the change came it was traumatic in the extreme. The Leader of the Opposition is starting to talk to his neighbour because he knows that I am going to quote to him his own words. He said:
"We did not avoid the responsibility of acknowledging the unavoidable need for manpower reductions … Those outside the industry who pretend that steel can survive without very major changes are indulging in the most callous falsehood in the hope of instant popularity."
In that condemnation he neatly packages his right hon. Friend the Member for Chesterfield (Mr. Benn) and his noble Friend Lord Beswick who with the full support of the Labour party campaigned up and down the country. That was
"the most callous falsehood in the hope of instant popularity."
We reached the position where so uncompetitive was the steel industry that we were producing 14 million tonnes of steel in 1979, with 166,000 people. That is the amount of steel that we are now producing with a work force of 71,000. The steel industry is now competitive and offers some prospect of jobs in the future. The deceit of the Labour party did nothing to help that transformation.
Of course, I could point to the problems that we face. We were slow to change. Other countries face the same problems. The unemployment figures——
Mr. Straw rose——
Mr. King: I just want to finish the point.
I could quote the unemployment figures, but, as has been said, they are of little comfort. In Spain, Belgium, Holland and Ireland, unemployment is a lot higher than it is here. It is bad for all, but in some ways it has been worse for us because of the uncompetitive position in which we found ourselves at the start of this most difficult period.
The Leader of the Opposition said that creating unemployment was the object of the Government's policy, but in the past year unemployment in Britain has increased by 4 per cent. over the previous year. In Italy it has increased by 7 per cent., in Ireland by 9 per cent., in Spain by 12 per cent. and in France by 16 per cent. The House may have noticed that those four Governments are all Socialist Governments. Did the right hon. Gentleman say that creating unemployment was the Government's policy when he spoke to Signor Craxi? Is that what he said to Dr. FitzGerald? Is that what he said to Senor Gonzalez? Is that what he said to President Mitterrand?
Mr. Straw rose——
Mr. King: Mr. Speaker——
Mr. Straw rose——
Mr. Speaker: Order. If the right hon. Gentleman does not give way, it is no good persisting.
Mr. King: I shall give way.
Mr. Straw: The Secretary of State knows very well that, despite those rises, unemployment in Britain is by far and away the highest of any major industrialised country and has been so since 1979. When the right hon. Gentleman has finished this unctuous catalogue of hand-washing and of blaming others for Britain's ills, will he address the central question put to him by my right hon. Friend the Shadow Chancellor, which is: what responsibility do the Government accept for the present levels of unemployment, and is he responsible for getting them down? When will he answer that question?
Mr. King: As I said at the beginning, it is important to understand the background. It does not help the House or the country not to recognise the problem in its true perspective. I have discussed the problem, some of the background and the circumstances in other countries. It is important to recognise the progress that we have made as well as the seriousness of the difficulties. Between 1979 and 1983 we suffered a huge haemorrhage of job losses. The House will have noticed that last year that haemorrhage was stopped. For the first time since 1979, the trend has been reversed. Whereas 1·5 million jobs were lost in the four years to 1983, 250,000 jobs were created last year.
The right hon. Member for Birmingham, Small Heath (Mr. Howell) might be puzzled, but others have identified the problem that, although there are more jobs, we still have a slightly rising level of unemployment. The problems of demography meant that we had to accommodate an extra 400,000 people in the four years after 1979. In. addition to the creation of new jobs, the House will have noticed that we now have the highest level of vacancies for the past four and a half years. That shows that matters are improving. We can take some encouragement from that.
Britain's economy is now stronger and more competitive.[Laughter.] As I am about to answer some

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of the questions posed by the right hon. Member for Sparkbrook, I am not sure that laughter is the appropriate response to the anxieties of millions of citizens. Inflation is also down. I hope that nobody will criticise the importance of reducing inflation. My right hon. Friend the Chancellor quoted what the Labour party said in 1975. Its proudest hope was to get inflation down to 10 per cent. I am proud that we have reduced it to 4·7 per cent. Productivity, output, investment and inward investment have all increased. When searching for a solution to unemployment, it is important that we do not throw away the gains that we have made.
I am sure that the House shares my pleasure at our having attracted inward investment. A list of companies have determined that Britain is their favourite location for investment in the European Community. That means many jobs. The House should be aware that 1983 was the best year for inward investment for seven years—it was 60 per cent. up on the previous year. As regards high tech, low tech, no tech—attracting Mitel, Hewlett-Packard, Wang, Commodore, Hyster, Nissan, Sharp, Nippon Electric, National Semiconductors, Parrot, Shin Etsu Handotai, Acrian Corporation, Tatung and Alps Electric, all of which offer thousands of jobs, is not exactly low tech. It is extremely encouraging high-tech investment.
Dr. David Clark: I represent the constituency with the highest level of unemployment in England and the Northern region has recently lost some of its most advanced high technology firms. Will the right hon. Gentleman tell the House how many of those firms have come to the regions of England other than the golden triangle? Can he give a message of hope to the one in four in my constituency who do not have a job and who seem not to have benefited from the economic bonanza about which I am hearing for the first time?
Mr. King: I am the first to accept that the inward investment of high technology companies on its own will not be a pervasive and complete answer to the problems of unemployment. The hon. Gentleman will know that much of the high technology investment in "silicon glen" has made a significant contribution to the Scottish economy, which was one of the more depressed economies. With the support of North sea oil it is now one of the more successful. I understand that there is a high level of unemployment in the hon. Gentleman's constituency and I think that everyone in the House appreciates something of the difficulties of South Shields and the problem that it faces.
Against the background of the gains that we have made, I hope that the House will not seek to criticise inward investment and the jobs that it represents. Secondly, I hope that it will not criticise the more competitive nature of the British economy and industry, which is extremely important. We must build on the jobs that we have and then consider how we can produce the resources to try to establish a higher level of employment.
I come now to the measures that we are taking and the further steps that we shall be taking. The House is aware of the programme of special training and employment measures on which we have embarked. The right hon. Member for Sparkbrook wants to see the greater use of resources. I can tell the House that we have quadrupled the resources that we devote to those measures. There are
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slightly fewer than 700,000 who are covered by the various training and employment measures. I am grateful to the hon. Member for Truro——
Ms Clare Short rose——
Mr. King: No, I shall not give way. I must go on.
I am grateful to the hon. Member for Truro for his implicit support for the youth training scheme. There is no doubt that the 350,000 youngsters who have entered the scheme in the past year have appreciated the benefit of it. I am encouraged above all by the increase in the number of youngsters coming on to the scheme this year. That is the clearest possible testimonial to the quality of the scheme.
Many young people are undoubtedly joining the scheme because of the good reports of the number who are getting full-time jobs after leaving it. About three quarters of the youngsters go into full-time jobs or further education and training after leaving the scheme. We hope that the figure will improve, but it is encouraging as it stands. Slightly more than 60 per cent. go into full-time jobs, 13 per cent. move on into further education and training, and we intend to build on that. We intend to build on the best schemes, some of which have been putting 90 to 95 per cent. of their youngsters into full-time jobs. We can take great satisfaction from that.
There is a need for improved training. I am keenly aware that, even at the present level of unemployment, it is an appalling fact that we still face serious skill shortages. Those shortages are increasing in some of the new technologies. It is appalling that there should be still shortages when 3 million are unemployed. There is every sign that they are holding back the expansion of some of the firms in the newest technologies.
We are about to launch a major new training campaign. I hope that we shall work closely and in co-operation with the CBI and the TUC. The MSC under its new chairman will be leading that campaign. We need to unlock the resources of everyone in industry involved with training. One of the most recent studies by the NEDC shows that, whereas the Government's contribution to training compares favourably with what happens in other counties, in recent years we have lost the amount of investment that came from companies. I hope—I trust that the House will support this—that when companies examine capital investment they will not think only in terms of plant and machinery. That is easy to do. We must increasingly recognise that the most important investment is in the people who will operate the new technologies. We intend to work closely with industry to develop training in those technologies.
We shall develop our own adult training campaign. We intend to double—I hope that the Opposition will appreciate this—the number of people who can receive adult training. We are building up the Open Tech, which we expect to handle 50,000 people in the coming year—twice as many in the previous year. We shall develop the community programme, which is specially designed to help the long-term unemployed. For the first time, we shall incorporate a training component so that those who have been unemployed for some time are given help to return to work.
Ms. Clare Short rose——
Mr. King: We intend to build on the enterprise allowance scheme. A considerable number of the people who take advantage of that most successful scheme come from the ranks of the long-term unemployed.
As I said recently in my speech at Brighton, we shall put jobs first. We must look hard at the range of protections, restrictions and procedures. We must look again at the balance of advantage between the 87 per cent. who are in work and the 13 per cent. who are not not. There is a real problem, in that it is understandable that management will negotiate for those in their employment and unions will negotiate for their members. There is a real risk that, as a result of those negotiations, the balance will be tilted in favour of those in employment, to the disadvantage of those who are unemployed. That raises some difficult issues for trade unions, which negotiate continually for higher increases than may be justified, greater employment protection, wages council protection, closed shops and restraints on productivity. In many ways, the unions may be blocking new opportunities to get people into jobs. As a Socialist Minister in Europe said to me, if we continue to increase the obligations on employers, we may in a real sense be driving up unemployment.
I am not surprised at the reaction of the Opposition. The Leader of the Opposition said, "Price people into jobs and you price other people out of jobs." Does he really believe that that is true? I give him one illustration. We would all like more training. We would all like more apprenticeships, whether under the old or new style of apprenticeship. The starting rate for an electrical contracting apprentice is £41·63 a week. In 1982–83, there were 850 apprentices. The union went to the employers and said that there were not enough apprentices, to which the employers replied that with a starting rate like that for the first year they would not take them on. That union agreed to reduce the starting rate for new apprentices to £27·88 and this year there are 2,650 apprentices in that industry instead of 850.
The right hon. Gentleman must ask himself whether he wants to keep these wages at a level that satisfies his conscience and ensures that there is the minimum number of apprentices, or to put them at a level that will ensure that the maximum number of young people obtain training. The House and the Government must look at the ways in which they can challenge some of those established prejudices and genuinely put jobs first.
Several of my right hon. and hon. Friends have given us suggestions. They spoke about the national insurance contribution and ways in which that could be adjusted to help either the long-term unemployed or young people. Others have talked about the job release scheme, the part-time job release scheme, the job-splitting scheme and ways in which we could give such schemes a more effective punch. I think that it was only two days ago that my right hon. Friend the Prime Minister spoke about unemployment not being an option for the under-18s. r j 10–1Faced with the gravity of the problems that exist over unemployment, we must be prepared to consider all those possibilities——
Mr. Hattersley rose——
Mr. King: I am——
Mr. Hattersley rose——
Mr. Speaker: Order. There are five minutes left for the debate, and I appeal to hon. Members to allow the Minister to continue his speech.
Mr. Hattersley rose——
Mr. King: I am sorry, but if the right hon. Gentleman had risen earlier, I should have given way to him.
My right hon. Friend the Member for Guildford rightly said that we must see how we can combat this situation with measures that do not lead to an acceleration of inflation or to a further rise in interest rates, otherwise every step that we take will be self-defeating. I stand here as the Secretary of State for Employment—[Interruption.]—and I and the Government recognise quite clearly the responsibility that we have to play our part. But everybody in the country can make a contribution, whether they be employers, trade unionists or Opposition Members, who can play a bigger part than just baying like banshees——
Mr. Straw rose——
Mr. King: What we need is not baying and shouting but an intelligent and constructive approach. No one can opt out of the problem. It is a responsibility that we have. It is a duty that we will not duck. It is no good hon. Members pretending that there is some easy solution or simple wand that can be waved. We all face the challenge. It will not be easy, to quote the right hon. Member for Sparkbrook, to tackle these problems.
I was asked by the right hon. Member for Plymouth, Devonport (Dr. Owen) whether we had noted the first sentence in the 1944 White Paper. We have noted it, and I assure the House that we certainly want to see the highest possible employment level in this country, and that that will be our clear determination.
Question put:—
The House divided: Ayes 189, Noes 264.

Division No. 478]

[10.00 p.m.

AYES

Adams, Allen (Paisley N)

Clarke, Thomas

Alton, David

Clay, Robert

Anderson, Donald

Clwyd, Mrs Ann

Archer, Rt Hon Peter

Cocks, Rt Hon M. (Bristol S.)

Ashdown, Paddy

Cohen, Harry

Ashley, Rt Hon Jack

Concannon, Rt Hon J. D.

Atkinson, N. (Tottenham)

Conlan, Bernard

Bagier, Gordon A. T.

Cook, Frank (Stockton North)

Banks, Tony (Newham NW)

Cook, Robin F. (Livingston)

Barnett, Guy

Corbett, Robin

Barron, Kevin

Corbyn, Jeremy

Beckett, Mrs Margaret

Cowans, Harry

Beith, A. J.

Craigen, J. M.

Benn, Tony

Crowther, Stan

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

Cunliffe, Lawrence

Bidwell, Sydney

Cunningham, Dr John

Blair, Anthony

Dalyell, Tam

Boothroyd, Miss Betty

Davies, Rt Hon Denzil (L'lli)

Boyes, Roland

Davies, Ronald (Caerphilly)

Bray, Dr Jeremy

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

Brown, Gordon (D'f'mline E)

Deakins, Eric

Brown, Hugh D. (Provan)

Dewar, Donald

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

Dobson, Frank

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

Dormand, Jack

Brown, Ron (E'burgh, Leith)

Douglas, Dick

Bruce, Malcolm

Duffy, A. E. P.

Buchan, Norman

Dunwoody, Hon Mrs G.

Callaghan, Jim (Heyw'd & M)

Eadie, Alex

Campbell, Ian

Eastham, Ken

Campbell-Savours, Dale

Ellis, Raymond

Carter-Jones, Lewis

Evans, John (St. Helens N)

Cartwright, John

Ewing, Harry

Clark, Dr David (S Shields)

Fatchett, Derek

1247

Fields, T. (L'pool Broad Gn)

Oakes, Rt Hon Gordon

Fisher, Mark

O'Brien, William

Flannery, Martin

O'Neill, Martin

Foot, Rt Hon Michael

Orme, Rt Hon Stanley

Foster, Derek

Owen, Rt Hon Dr David

Fraser, J. (Norwood)

Park, George

Freeson, Rt Hon Reginald

Parry, Robert

Gilbert, Rt Hon Dr John

Patchett, Terry

Godman, Dr Norman A.

Pavitt, Laurie

Golding, John

Pendry, Tom

Gould, Bryan

Penhaligon, David

Gourlay, Harry

Pike, Peter

Hamilton, W. W. (Central Fife)

Powell, Raymond (Ogmore)

Hancock, Mr. Michael

Prescott, John

Hardy, Peter

Radice, Giles

Harman, Ms Harriet

Randall, Stuart

Harrison, Rt Hon Walter

Redmond, M.

Hart, Rt Hon Dame Judith

Rees, Rt Hon M, (Leeds S)

Hattersley, Rt Hon Roy

Richardson, Ms Jo

Heffer, Eric S.

Roberts, Allan (Bootle)

Hogg, N. (C'nauld & Kilsyth)

Roberts, Ernest (Hackney N)

Home Robertson, John

Robertson, George

Howell, Rt Hon D. (S'heath)

Robinson, G. (Coventry NW)

Hoyle, Douglas

Rooker, J. W.

Hughes, Roy (Newport East)

Ross, Ernest (Dundee W)

Hughes, Sean (Knowsley S)

Rowlands, Ted

Janner, Hon Greville

Sedgemore, Brian

Jenkins, Rt Hon Roy (Hillh'd)

Sheerman, Barry

John, Brynmor

Shore, Rt Hon Peter

Jones, Barry (Alyn & Deeside)

Short, Ms Clare (Ladywood)

Kaufman, Rt Hon Gerald

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

Kennedy, Charles

Silkin, Rt Hon J.

Kilroy-Silk, Robert

Skinner, Dennis

Kinnock, Rt Hon Neil

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

Kirkwood, Archy

Snape, Peter

Lamond, James

Soley, Clive

Leadbitter, Ted

Steel, Rt Hon David

Leighton, Ronald

Stewart, Rt Hon D. (W Isles)

Lewis, Ron (Carlisle)

Stott, Roger

Lewis, Terence (Worsley)

Straw, Jack

Litherland, Robert

Thomas, Dafydd (Merioneth)

Lloyd, Tony (Stretford)

Thomas, Dr R. (Carmarthen)

Lofthouse, Geoffrey

Thompson, J. (Wansbeck)

Loyden, Edward

Thorne, Stan (Preston)

McCartney, Hugh

Tinn, James

McDonald, Dr Oonagh

Torney, Tom

McKay, Allen (Penistone)

Wainwright, R.

McKelvey, William

Wallace, James

Maclennan, Robert

Wardell, Gareth (Gower)

McNamara, Kevin

Wareing, Robert

McTaggart, Robert

Weetch, Ken

McWilliam, John

Welsh, Michael

Madden, Max

Wigley, Dafydd

Marek, Dr John

Williams, Rt Hon A.

Maxton, John

Wilson, Gordon

Maynard, Miss Joan

Winnick, David

Meacher, Michael

Woodall, Alec

Meadowcroft, Michael

Wrigglesworth, Ian

Michie, William

Mikardo, Ian

Tellers for the Ayes:

Morris, Rt Hon J. (Aberavon)

Mr. James Hamilton and

Nellist, David

Mr. Frank Haynes.

NOES

Adley, Robert

Best, Keith

Aitken, Jonathan

Bevan, David Gilroy

Alexander, Richard

Biffen, Rt Hon John

Alison, Rt Hon Michael

Biggs-Davison, Sir John

Amess, David

Blackburn, John

Arnold, Tom

Blaker, Rt Hon Sir Peter

Aspinwall, Jack

Bonsor, Sir Nicholas

Atkins, Rt Hon Sir H.

Boscawen, Hon Robert

Atkins, Robert (South Ribble)

Bottomley, Peter

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

Bottomley, Mrs Virginia

Baker, Nicholas (N Dorset)

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

Baldry, Tony

Bowden, Gerald (Dulwich)

Banks, Robert (Harrogate)

Boyson, Dr Rhodes

Batiste, Spencer

Braine, Sir Bernard

Bendall, Vivian

Brandon-Bravo, Martin

Benyon, William

Bright, Graham

1248

Brinton, Tim

Key, Robert

Brittan, Rt Hon Leon

King, Roger (B'ham N'field)

Brooke, Hon Peter

King, Rt Hon Tom

Brown, M. (Brigg & Cl'thpes)

Lamont, Norman

Browne, John

Latham, Michael

Bruinvels, Peter

Lawrence, Ivan

Bryan, Sir Paul

Lawson, Rt Hon Nigel

Buck, Sir Antony

Leigh, Edward (Gainsbor'gh)

Budgen, Nick

Lennox-Boyd, Hon Mark

Bulmer, Esmond

Lester, Jim

Burt, Alistair

Lewis, Sir Kenneth (Stamf'd)

Butler, Hon Adam

Lightbown, David

Butterfill, John

Lilley, Peter

Carlisle, John (N Luton)

Lloyd, Ian (Havant)

Carlisle, Kenneth (Lincoln)

Lloyd, Peter, (Fareham)

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

Lord, Michael

Carttiss, Michael

Luce, Richard

Cash, William

McCrindle, Robert

Chalker, Mrs Lynda

MacGregor, John

Channon, Rt Hon Paul

MacKay, Andrew (Berkshire)

Chapman, Sydney

MacKay, John .(Argyll & Bute)

Chope, Christopher

Maclean, David John

Clark, Dr Michael (Rochford)

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

Clark, Sir W. (Croydon S)

Malins, Humfrey

Clarke, Rt Hon K. (Rushcliffe)

Maples, John

Cockeram, Eric

Marland, Paul

Colvin, Michael

Marlow, Antony

Conway, Derek

Mates, Michael

Coombs, Simon

Mather, Carol

Cope, John

Maude, Hon Francis

Corbyn, Jeremy

Mawhinney, Dr Brian

Corrie, John

Mayhew, Sir Patrick

Couchman, James

Merchant, Piers

Critchley, Julian

Meyer, Sir Anthony

Crouch, David

Miller, Hal (B'grove)

Currie, Mrs Edwina

Mills, Iain (Meriden)

Dickens, Geoffrey

Mills, Sir Peter (West Devon)

Dicks, Terry

Miscampbell, Norman

Dorrell, Stephen

Mitchell, David (NW Hants)

Douglas-Hamilton, Lord J.

Moate, Roger

Dover, Den

Montgomery, Fergus

du Cann, Rt Hon Edward

Moore, John

Dunn, Robert

Morris, M. (N'hampton, S)

Durant, Tony

Morrison, Hon C. (Devizes)

Edwards, Rt Hon N. (P'broke)

Morrison, Hon P. (Chester)

Eggar, Tim

Moynihan, Hon C.

Emery, Sir Peter

Mudd, David

Evennett, David

Neale, Gerrard

Eyre, Sir Reginald

Needham, Richard

Fallon, Michael

Nelson, Anthony

Flannery, Martin

Neubert, Michael

Forman, Nigel

Newton, Tony

Fox, Marcus

Nicholls, Patrick

Franks, Cecil

Norris, Steven

Galley, Roy

Onslow, Cranley

Gardner, Sir Edward (Fylde)

Oppenheim, Phillip

Glyn, Dr Alan

Oppenheim, Rt Hon Mrs S,

Gorst, John

Page, Sir John (Harrow W)

Gower, Sir Raymond

Page, Richard (Herts SW)

Grist, Ian

Patten, John (Oxford)

Grylls, Michael

Pattie, Geoffrey

Gummer, John Selwyn

Pawsey, James

Hamilton, Neil (Tatton)

Peacock, Mrs Elizabeth

Hannam, John

Percival, Rt Hon Sir Ian

Hargreaves, Kenneth

Pollock, Alexander

Hawkins, C. (High Peak)

Porter, Barry

Hayhoe, Barney

Powell, William (Corby)

Heathcoat-Amory, David

Powley, John

Heddle, John

Prentice, Rt Hon Reg

Hickmet, Richard

Price, Sir David

Hill, James

Prior, Rt Hon James

Hogg, Hon Douglas (Gr'th'm)

Proctor, K. Harvey

Holland, Sir Philip (Gedling)

Pym, Rt Hon Francis

Holt, Richard

Raffan, Keith

Hordern, Peter

Rathbone, Tim

Howarth, Gerald (Cannock)

Rees, Rt Hon Peter (Dover)

Howell, Rt Hon D. (G'ldford)

Renton, Tim

Howell, Ralph (N Norfolk)

Rhodes James, Robert

Jopling, Rt Hon Michael

Rhys Williams, Sir Brandon

Kellett-Bowman, Mrs Elaine

Ridley, Rt Hon Nicholas

1249

Ridsdale, Sir Julian

Stevens, Martin (Fulham)

Rippon, Rt Hon Geoffrey

Stewart, Allan (Eastwood)

Robinson, Mark (N'port W)

Stewart, Andrew (Sherwood)

Rossi, Sir Hugh

Stradling Thomas, J.

Rowe, Andrew

Sumberg, David

Ryder, Richard

Tapsell, Peter

Sackville, Hon Thomas

Taylor, John (Solihull)

Sainsbury, Hon Timothy

Taylor, Teddy (S'end E)

St. John-Stevas, Rt Hon N.

Temple-Morris, Peter

Shaw, Sir Michael (Scarb')

Thatcher, Rt Hon Mrs M.

Shelton, William (Streatham)

Thomas, Rt Hon Peter

Shepherd, Colin (Hereford)

Thompson, Donald (Calder V)

Shepherd, Richard (Aldridge)

Thompson, Patrick (N'ich N)

Shersby, Michael

Thome, Neil (Ilford S)

Silvester, Fred

Thurnham, Peter

Sims, Roger

Townend, John (Bridlington)

Skeet, T. H. H.

Townsend, Cyril D. (B'heath)

Smith, Sir Dudley (Warwick)

Tracey, Richard

Smith, Tim (Beaconsfield)

Twinn, Dr Ian

Soames, Hon Nicholas

van Straubenzee, Sir W.

Speed, Keith

Vaughan, Sir Gerard

Speller, Tony

Viggers, Peter

Spencer, Derek

Waddington, David

Squire, Robin

Walden, George

Stanbrook, Ivor

Walker, Bill (T'side N)

Steen, Anthony

Walker, Rt Hon P. (W'cester)

Stern, Michael

Waller, Gary

Stevens, Lewis (Nuneaton)

Walters, Dennis

1250

Wardle, C. (Bexhill)

Wolfson, Mark

Warren, Kenneth

Wood, Timothy

Watson, John

Woodcock, Michael

Watts, John

Yeo, Tim

Wells, Sir John (Maidstone)

Young, Sir George (Acton)

Whitfield, John

Younger, Rt Hon George

Whitney, Raymond

Wiggin, Jerry

Tellers for the Noes:

Wilkinson, John

Mr. Tristan Garel-Jones and

Winterton, Mrs Ann

Mr. Archie Hamilton.

Question accordingly negatived.

BUSINESS OF THE HOUSE
Ordered,
That, at the sitting on Wednesday 31st October, the Motions relating to Procedure and Short Speeches may be proceeded with, though opposed, for one and a half hours after the first Motion has been entered upon, and the Motion relating to All-Party and Parliamentary Groups may be proceeded with, though opposed, for one and a half hours after being entered upon; and at the end of each such period, Mr. Speaker shall put any Questions necessary to dispose of the Motions and of any Amendments moved thereto which have been selected by him.—[Mr. Biffen.]

Education (Mandatory Awards)
10.12 pm
Mr. A. J. Beith: I beg to move the motion which stands in the name of my right hon. Friend the Leader of the Liberal party:
That an humble Address be presented to Her Majesty, praying that the Education (Mandatory Awards) Regulations 1984 (S.I., 1984, No. 1116), dated 27th July 1984, a copy of which was laid before this House on 1st August, be annulled.
I declare an interest as a member of and adviser to the Association of University Teachers.
I am glad that at long last the House of Commons has an opportunity to debate the 1984–85 student grant settlement. We should have had the opportunity long ago, before the new regulations were put into effect. I am glad to have the support of the Labour party for this motion and the knowledge that in recent debates and at Question Time recently there has been considerable support from the Conservative Back Benches for some of the criticisms that I wish to make tonight, particularly those relating to the travel grant proposals. I hope that all that support will be assembled in the Lobbies at 11.30.
Before coming to the main part of the debate, I must record with satisfaction the fact that the Government have at last implemented the undertaking that they gave to me before the 1983 general election to give home student status to refugee students who do not come under the United Nations convention but who have been granted exceptional leave to remain in Great Britain. Ministers have been trying to evade that commitment for over a year. I am pleased that they have now recognised their responsibility, and the new regulations on this point are in precisely the form that we asked for in 1983. We are grateful for the fact that that has been done.
The most controversial aspect of the new regulations for most people has been the Government's extraordinary change in the system of travel grants. Until these regulations were introduced, students could claim reimbursement of the cost of travel to their colleges and universities in excess of £50 a year. Now it is to be assumed that all students have the same travel costs. All students who live at home will receive £160 a year and those who live away from home will receive £100 a year. Although there are some transitional provisions to help students already on courses, they will not even help students who started their courses this September, having already decided where to study when the regulations were brought in.
The main two categories of students who face high travel costs are those who live in the remoter parts of the country and have to travel long distances to reach their university or college, and those who, because of student housing problems, have a long and expensive daily journey into their college. Some students fall into both categories. A student from a distant part of the country might be studying in London, and travelling a long way daily to his college.
In reply to a previous debate on travel grants, the Parliamentary Under-Secretary said in defence of the scheme that students who do not normally face high day-to-day travel costs will gain at least £50 from his proposals. What is the justification for giving public money to help with travel costs to the very students who
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do not suffer those costs rather than to the students who do? Ministers call it rough justice, a concept that I have never found attractive. It makes me think of the Minister at the head of a short-sighted lynch mob, dispensing rough justice to whoever happens to come in sight.
The Minister has talked as if there were scope for choice and change in what students do to meet this difficulty. He is overlooking what I am convinced is now the situation. There is no flexibility in the budget of many students and no opportunity to make changes in their housing or other arrangements that would remove high travel costs.
The National Union of Students estimates that 39 per cent. of mandatory award holders will be out of pocket, 35,000 by at least £150 a year and 7,000 by more than £350 a year. Particularly badly hit will be students in several places such as London, where travel costs average £200 a year. That is twice what will be afforded to students in the grant for travel purposes.
Students in several new universities that were built on sites out of towns will suffer. Many students at Lancaster travel daily from Morecambe. At Warwick, students travel from Leamington; at Kent, students travel from Herne Bay and Whitstable. There are also problems in the older universities, for example, in Newcastle where students travel from Whitley Bay. Several universities have long-established arrangements with other places in which students stay. The local economies in places such as Morecambe, Leamington and Whitley Bay will be drastically affected by the departure of students who will not be able to afford to stay there.
The other side of the coin is that the pressure on housing in the centre of cities such as Newcastle and London will be even greater. My hon. Friend the Member for Southwark and Bermondsey (Mr. Hughes) has drawn attention more than once in the House to the mounting student housing crisis. At the beginning of the university term in Newcastle, 200 students were sleeping on mattresses in common rooms. There were also problems in the polytechnic. The Minister must be aware of how serious the crisis is, particularly in inner city areas, and of how much worse it will be when students cannot afford to stay at the traditional out-of-town centres of accommodation that they used in the past.
It cannot be reasonably argued that the proposed arrangements will help or encourage students who choose to live at home. At times the Government have implied that they would like more students to live at home and go to the local university. I have some sympathy with that view, although I would not wish students to be put under financial pressure to do so. The Government are suggesting that students could choose the local university more readily, but in fact the amount of travel grant that they are allowing does not make that option feasible. In what area of the country will commuting costs of £1 a day make it possible for students to travel long distances to their local university? Nowadays one has to live very close to the city centre to be able to commute in and out for £1 a day. That will not help the Government's apparent objective of getting more students to go to local universities.
In some city areas travel costs are relatively lower than in other parts of the country, but that is because of policies pursued by local transport authorities to which the Government are overtly opposed and which they are trying to get rid of. If students can travel more cheaply to colleges

1253
in south Yorkshire or Merseyside, that is due to policies which are in direct contravention of the Government's wishes and which the Government are taking steps to change by central decision.
The Government have admitted that they did no research on the consequences of the change in the travel grant system. The Scottish Office, in contrast, carried out research and quickly established that the new scheme would cause serious problems and would be virtually unworkable. Scotland therefore stuck to the earlier system. But where does that leave students in the area that I represent? Two students, one whose home is in Scotland and the other whose home is in England, may take the same train from Berwick station to Kent or East Anglia university. When they arrive, they face the same high costs of getting to college each day. The Scottish student can put in an application for the additional travel costs incurred, but the English student will have no such right. That anomaly shows clearly that the Scotttish decision is right and the English decision is wrong.
The change is utterly contrary to reason. It is not a sensible or justifiable way of disbursing public money. The Treasury ought properly to question why the Government seem to have a policy objective of giving public money to the very students who have not made out a case for specific travel assistance and denying it to those who have. The scheme should be withdrawn and the Government should go back to the previous basis.
There are other ways of reducing the administrative problems that the Ministers says resulted from the previous system. The universities and colleges could play a greater part in validating claims, as some already do, and thus make it easier for local authorities to know that they are paying out on proper and justified claims.
Quite apart from the cuts in travel grant, the main rate of grant has fallen to 90 per cent. of its real value in 1979–80 compared with the retail price index. There are many resons to suppose, however, that students' costs are rising even more quickly than the retail price index. Student housing costs are notoriously high, not just in the private sector but also in the halls of residence. Books have increased dramatically in price and if the Government put VAT on the cost of books the problem will be exacerbated. There are thus compelling reasons to reconsider the main rate of grant and the policy underlying it.
How do the Government regard student grants? Do they regard them—I certainly do not—as a student wage? If so, the Government might in some way be justified in regarding student grants as covered by pay policy and considering them in relation to public sector pay settlements. The grant, however, is not and has never been regarded as a student wage. It was conceived from the beginning as a maintenance award taking fully into account the costs of undertaking higher education. On those grounds, the Government stand convicted because they have not undertaken the kind of survey necessary to underpin a maintenance award. If they contend, as I believe that they must, that the grant continues to represent a maintenance award, they must carry out a proper cost survey and a review of the way in which the grant is calculated. The NUS has made a very detailed submission on this to which I hope that there will be a very full Government response. We have muddled on from year to
1254
year applying external reductions to the real value of the student grant without regard to the true cost to students of remaining in higher education.
We cannot omit from this debate a discussion of the minimum grant and the parental contribution. When the Prime Minister was in opposition she said that when she formed a Government a full review of student grants would be undertaken and she would give "the highest priority to a reduction in the parental contribution." That was a very surprising commitment to make. I certainly could not give an undertaking that an Alliance Government would give the highest priority to a reduction in the parental contribution, because that cannot be the first claim in an attempt to put student grants on a better footing. However, she made that commitment clearly and explicitly. Yet during her term of office the share which parents take of the costs of students in higher education has increased and that of the Government has decreased. She has neither undertaken the thorough review not done anything to reduce the parental contribution.
The regulations halve the minimum grant and change the tapering system for the parental contribution. Under the previous regulations the taper was £1 in £7 for each pound of parental income above £7,200. The threshold has been updated for inflation but the regulations introduce a higher rate of £1 in £6 for income above £9,700. Those changes increase the relative burden placed on parents. The parental share of higher education maintenance has increased from 22 per cent. to 39 per cent. of student financial support, while the Government's share has decreased.
At the same time the cut in the minimum grant, which may not seem of great consequence, has a severe effect on many students whose parents do not cough up their share. The number of students who receive less than the whole parental contribution is large. There is a particularly unfortunate group of students whose parents refuse to fill in the assessment form in the first place. Some of those parents are deeply opposed to their children taking part in higher education and other are estranged from their children. Those students might be eligible for a grant, but they do not get it. They can get only the minimum grant, which has now been halved. More should be done to provide a better system of hardship payments for students in that category.
There are other undesirable features. The treatment of mature students and those who marry is very odd. Under the regulations it will continue to be assumed that one is dependent on one's parents until one is 25 unless one has been employed or has received unemployment benefit for three years. In almost all other ways one is regarded as an adult at the age of 18, and in some respects at an even younger age than that. If a mature student marries while on a course, he will be treated as a dependant of his parents. How can that be an acceptable or reasonable way to proceed? Where does it put the Government's supposed assumption if, when such a student marries, he puts himself at a disadvantage? The Minister should reconsider that feature of the regulations.
We cannot consider these regulations without considering their failure to do anything about the problem of funding 16 to 19-year-olds. Many Government Departments are involved with that problem, and these regulations form only one part of it. There is extremely widespread support for the concept of an educational maintenance allowance for students between the ages of

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16 and 19. The House of Lords report on unemployment supported the proposal. When the House of Lords Select Committee on the European Communities looked at education and training, it pointed out that decisions at 16 may be distorted by financial circumstances and the varying levels of funding available. There are pleas from all directions for a change in the system which a previous Minister described as a tangle.
The logic of the case is overwhelming, but once again the Government have failed to respond to it, and to initiate the necessary inter-departmental discussions which would be the prelude to organising a proper 16-to-19 system. That is part of the background against which we must view the regulations.
To return to the main issue of the support of students in higher education, those of us who went to university in the earlier days of student grants should reflect for a moment on how much better off we were then than students are now. Those of us who, like me and I suspect the Leader of the Opposition, went into higher education with the benefit of the full grant, because we came from homes with low incomes, lived in relative comfort and security compared with the lot of students today. We underestimate the extent to which we are allowing market forces, so beloved of the Government, to keep people out of higher education.
By the regulations, the Government have turned the system of travel grants into not only a mess but a source of real hardship and discouragement to many students. The grant system itself has lost any rationality and is not properly related to student costs. The Government have made the student more than ever dependent on his parents, and they distort the choices which people should be making about what sort of education is good for them by the application of such financial pressures. We shall pay a high price for that in years to come.
10.30 pm
The Parliamentary Under-Secretary of State for Education and Science (Mr. Peter Brooke): Debating the awards regulations is a regular pastime of the Opposition. That is not surprising. Mulling over ways to spend other people's money is a pleasure for some. As the signatories to the prayer show, this was a major preoccupation of the Labour party when it was in power; as for its temporary allies of tonight, they have never been in power during the life of student grants, and are not in a position to profit from the exposure to the real world that Governments must face. But I am glad to say that we have a realistic Government who are determined to restrain public expenditure in order to sustain their success in reducing inflation. That is an essential condition for regenerating the economy on which the future prosperity of the country depends. At the same time, the Government are concerned to give students a fair deal, which they have done.
The hon. Member for Berwick-upon-Tweed (Mr. Beith) spoke about the NUS demands for 1985. Our prime concern in this debate is the 1984–85 grant settlement, and I shall restrict myself to that, except to repeat the statement made in another place that no decisions have been taken yet on next year's award settlement.
I shall begin by saying a little about each of the changes introduced by the regulations, and I shall show that this year's settlement is fair. Grant rates have been increased by 4 per cent. That increase represents, as it has always
1256
done, a compromise between students' aspirations and needs and the total sum that it is reasonable to expect taxpayers and ratepayers to provide. We are talking about the maintenance support of a privileged group of young people, many of whom will go on to earn enhanced salaries after graduation as a result of their publicly funded studies.
I appreciate that the increase was not as generous as some students and their representatives would have wished; nevertheless, I was heartened to learn from the NUS survey that the majority of students were generally satisfied with their grants. It is a simple fact, and one that many students seem to appreciate more clearly than do their representatives or Opposition Members, that the taxpayer—including many parents of students—does not have a bottomless pocket. I am sure, too, that most of them understand that they cannot be expected to be insulated from the economic facts of life. Given our success in reducing the rate of inflation, I believe this year's settlement to be a fair one for students, whose needs should continue to be met for the period which the grant covers, and for parents, taxpayers and ratepayers, who foot most of the bill.
The Government have also sought to provide a fair settlement in relation to parental contributions. The parental contribution scale has been indexed so that about the same number of parents will be assessed for contribution this year as last. We have also sought to protect families earning less than the average income from the real increases resulting from the new parental contributions scale by retaining the lower part of the scale at its previous rate. However, we have chosen to steepen the slope of the scale for families earning more than average incomes. The result is a progressive scale.
We have also decided to halve the minimum award from £410 to £205. We knew that that decision would not prove universally popular, but unlike Opposition Members we do not shy away from decisions when they confront us. It was difficult decision, but we concluded that it would be inequitable to insulate higher income families from increased contributions when larger contributions would be assessed from parents whose incomes are lower.
None of these decisions was taken lightly. The savings resulting from them form part of a package necessary to keep public spending below the limits that we had set. Faced with the need to make savings in higher education, hard decisions had to be taken. We judged it preferable to make savings on student awards rather than, for example, in the provision for universities or for science.
We were also faced with the equally difficult problems of how to achieve savings in the student awards. One possibility was to keep down the main rate of grant. We rejected that because it would have been regressive and would have hit hardest students from least well of background. It would also have run counter to our general policy of encouraging wider access to higher education from all social groups.
Mr. David Steel: How does the Minister square that with the statement by his leader on 16 August 1978 in a letter to the chairman of the Confederation of Conservative Students, in which she said that the Government would review student grants and that the highest priority would be given to reducing the

1257
parental contribution? How does an increase in the parental contribution square with that pre-election promise?
Mr. Brooke: I remind the right hon. Gentleman that the correspondance relates to a previous election period. A review has been carried out during the life of this Government and their immediate predecessors. Given that the student loans issue is one of the causes put forward by bodies outside the House and others, I am surprised that there is such enthusiasm on the Opposition benches about our resistance to the suggetions.
Mr. Michael Meadowcroft: What advice would the Minister give to students whose parents refuse to pay the parental contribution and who therefore find it difficult to maintain themselves?
Mr. Brooke: I shall deal with that later. Faced with the real world, I am sure that any responsible Minister would reach the same conclusion that we reached.
It is said that the change will result in more students suffering hardship because their parents fail to make up their assessed parental contribution in full. It is too early to say whether that will be true, or whether Opposition Members are simply crying wolf. I have urged all parents, as have Ministers of successive Governments, to act responsibly in the interests of their children and to make up their assessed contributions in full. I do so again now, and I shall continue to do so.
I was pleased to learn from the National Union of Students' survey of undergraduate income and spending that non-payment of assessed parental contribution is now a less widespread problem than it was a decade ago and that 71 per cent. of students receive their grant in full or are short by less than £1 a week. I am sure that most parents appreciate the need to make up their contribution in full and will continue to do so. I am sure that they will not overlook the help which deeds of covenant can offer.
Mr. Tony Marlow: At the age of 18, a person becomes adult with the right to vote. How on earth can the Government sustain the argument that any parent anywhere should make a contribution in this sense? The European convention on human rights states that there shall be no fear or favour about education and that everybody should be entitled to it. It also states that there shall be no discrimination and no advantage to anyone because of birth. How does the Government proposal stand up before the European convention on human rights?
Mr. Brooke: My hon. Friend's enthusiasm tonight for matters on the continent is somewhat different from that which I normally hear from him. The principle relating to grants, individuals and their parents has existed under Governments of all colours.
The hon. Member for Berwick-upon-Tweed referred to the arrangements to deal with student travel.
Mr. Christopher Hawkins: Does my hon. Friend accept that students who do not get a parental contribution because the parents refuse to give one will not turn up in the figures because they will simply not be able to afford to go on in higher education? Even if the figure in the official statistics for students being paid less than the full amount is zero, it still does not answer the question of what advice we should give to constituents who say that
1258
their parents will give them nothing towards the cost of going to university. It is interesting that the policy on student loans, which many regarded as vicious and extreme right wing, is kinder to the students who have this particular problem because they can go to university even if their parents will not pay. What shall we say to constituents who say that their parents simply will not pay?
Mr. Brooke: I take my hon. Friend's point. The participation rate within the age group is continuing to rise and the NUS survey demonstrated that parents are paying a larger proportion of the contribution than they were 10 years ago.
We have dealt with a number of the criticisms of the new arrangements for student travel made by hon. Members earlier in the year. An Adjournment debate on the subject was initiated by my hon. Friend the Member for Norwich, South (Mr. Powley) before the recess, although such was the depth of concern on the Opposition Benches that not one hon. Member turned up. None of the points made today have altered my conviction that the changes that we have made are right. The old arrangements, under which students can claim reimbursement of expenditure which they have incurred in travelling to and from their place of study, were administratively cumbersome and inefficient and therefore inherently expensive. They gave no incentive to students to seek the most economical way to travel, as they knew that the taxpayer would ultimately foot the bill.
Furthermore, the old arrangements implied an open-ended commitment to public expenditure and to a significant amount of public spending. It is worth stating that this year the Government will be spending some £39 million on student travel, not an inconsiderable sum. I am sure that even the Opposition hold no brief for an inefficient and expensive system and that the money should be disbursed wisely and with adequate control.
Mr. Max Madden rose——
Mr. Brooke: I have given way about five times.
The changes seek to do just that. Under the new arrangements all students studying from the parental home will receive an additional £110 in grant, while those living away will receive an extra £50. Those sums are additional to the 4 per cent. increase that I have already referred to, and will significantly benefit the majority of students.
In 1982–83, the latest year for which figures are available, some 56 per cent. of full value award holders—around 235,000 students—made no claim for reimbursement of excess travel expenditure over and above the basic £50 element. All those students will therefore gain under the new arrangements, the amount depending on where they live. Of the remainder, those who would have claimed less than the £50 or £110, will gain too.
We were naturally concerned to minimise the scale of losses for those who might have become worse off under the new arrangements and we also sought to protect the interests of particular groups of claimants whose travel requirements could not easily be catered for under a non-reimbursement system.
Special provision has therefore been made for those studying abroad or away from the main place of study, and for the disabled. Furthermore, in response to representations made to us during a consultative period earlier this

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year, we made special arrangements for those on courses before 1 September this year who face unavoidably high travelling expenses.
Mr. Roy Beggs: I want to place on record our great concern that the rough justice that has been handed out to students in Northern Ireland does not reflect any concern on the part of Government to ensure that there was fair treatment for students in relation to travel awards.
Mr. Brooke: It is fair for the hon. Gentleman to say that, but the awards in Northern Ireland do not fall under the regulations.
Although it is inevitable that any change from a system under which costs are reimbursed to a more broadly-based approach will mean that some students gain while others lose, it is important to see the change in its proper perspective. We have been urged to think again about the new system. As I said in an Adjournment debate earlier this year, we are prepared to examine any new evidence of hardship that results from the new arrangements. If insurmountable local problems arise it would clearly not be sensible to tackle them with an across-the-board increase in the provision for travel.
Mr. David Crouch: My hon. Friend is about to be helpful. He knows that I have several thousand student constituents at the university of Kent. Because many of them live a long way from the university—perhaps 20 miles—and are in college only one year out of three, they are in great hardship. On Friday I said that some of them are suffering a loss of as much as £200 a year. That is money that they do not have. I must confess that I have misinformed my hon. Friend. The figure is more like £300 a year. Their number is not counted in thousands, but there are some. There are cases of hardship.
Mr. Brooke: I take my hon. Friend's point. We have never denied that there are some plces where there are special difficulties. I repeat the pledge that I gave earlier.
Mr. Paddy Ashdown: Has the Secretary of State advised the Minister that even in Leeds the cost of travel from the largest student hall to the university exceeds the amount provided?
Mr. Brooke: I am prepared to take a series of local points, but we are administering a national policy.
There are three other important improvements in the regulations.
Mr. Madden: Will the Minister give way?
Mr. Brooke: No.
Mr. Madden: The Minister gives way only to Liberals and Official Unionists.
Mr. Brooke: Not at all.
We have listened sympathetically to the case for an increase in the allowance for extra weeks of study, especially by medical students. I do not want to encourage anyone to think that we can go further than the level that we have so far reached, but the extra weeks allowance has been increased by £2·80 a week. That is incorporated in the regulations. We have also listened sympathetically to representations that all periods when a student is available for work should be counted for the purposes of establishing independent status under the awards regulations on the basis of three years' self-support before the start of the
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course. These regulations give effect to that. The regulations have been amended significantly to increase the sum that a student may receive by way of sponsorship from his employer, or prospective employer, without losing grant. Those details were announced just before the recess. It is to be hoped that the increased sponsorship levels will attract more students to courses that relate to the wealth-creating parts of the economy.
Since 1962, when the present mandatory awards system was introduced by a Conservative Government, successive Governments have striven to give effect to the principles that were set out in the report of the inquiry chaired by Sir Colin Anderson. The present Government are no exception. The number of full value award holders has risen since 1979 from 370,000 to 440,000 this year—an increase of almost one fifth. These are major achievements. My hon. Friend the Member for Northampton, North (Mr. Marlow) who introduced a European element to the debate, should note that the award arrangements in Britain are without question the most generous in the West. Our awards system continues to be generous. The regulations and the changes that they embody have been governed by the principles of equity and efficiency. There is therefore every reason why hon. Members should not oppose them.
10.50 pm
Mr. Andrew F. Bennett: Those who have listened to the Minister, and students who read what he had to say in the days to come, will be profoundly disappointed. There was not one word of concern about or compassion for students who find it increasingly difficult to manage on their grants. The Minister seemed to have great concern for the taxpayer. Has he forgotten that many of today's taxpayers enjoyed student grants in their turn? I should think that almost all of them would be willing to contribute through their taxes at least to ensure that the level of grant now is as good as that which they enjoyed. It is unfortunate that we are fast moving to a position where the student grant will be at its lowest level since 1962. Most of those who enjoyed grants in the past will have enjoyed a higher level of grant than those who are currently students or to become students.
The Minister claimed that there is no evidence that students are unable to move into higher education because they cannot persuade their parents to pay their contribution to the grant. He said that the age participation rate is higher now than ever before. I remind him that the qualified participation rate has been falling, which suggests that some students who achieve good A-level results are not moving on into higher education.
The Government's policy on student grants appears to be in a shambles. There seems to be no overall policy and no clear direction. Instead, the Government move from one hiccup to the next. They seem to have no idea of the problems that are involved in trying to live on a low income. Earlier there was an effort to produce a scheme for student loans. That was followed by a proud announcement that student loans were to be abandoned. However, the Government know that they are forcing more and more students to use a backdoor method of getting loans. More and more students end up completing their courses with substantial overdrafts. There is clear evidence that some of them are unable to take up professional training because of the level of their overdrafts and the need to clear them.

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Much has been made of the Prime Minister's promise shortly before the Conservative party won the 1979 election. She said that there would be a major review. What major review has there been? There have been some departmental efforts to examine policy, but there has been no major review. It was said that the highest priority would be given to reducing the parental contribution, but there has been no review after five years of Conservative Government and the parental contribution has steadily been increased. The minimum grant was halved this year.
The Government say that no decision has been made about this year's grant. I would hope so, because in theory the Government are still to meet the National Union of Students to discuss grant levels. There seem to be persistent leaks that the Treasury has insisted that the minimum grant will be abolished for next year. The Government should look to the source of the leaks. If there is no truth in the leaks, it is amazing that so many have been convinced that the Government have reached a policy decision.
There must be a full and independent review of student grants. We should return to an Anderson-type inquiry. The students are pressing for such an inquiry, and the Government should remember that the Anderson inquiry was set up by a previous Conservative Administration and that its recommendations were implemented by a Conservative Administration. That Administration set student grants at a level that was 30 per cent. higher than it is now. Surely we have the right to ask for a full and independent inquiry to consider whether students should be independent. I am sure that the majority of people will consider that they should be at 18 years of age. It should consider also whether the present level of grant is adequate in any way.
The case for independence has been well made already. Once a person is 18 years of age, he has every right to be treated as an independent individual. He should not be expected to ask his parents to make up his grant. We are aware that many parents fail to make up the grant or, worse still, apply strings to the money that they hand over. Some parents say that they will make up the grant only if the student takes a course of which they approve or if he behaves in a particular way.
Many students do not ask their parents for the full contribution because they feel that it will cause hardship to other members of their family if they do so. There are many students who struggle by without the full amount. They suffer hardship and do not derive full benefit from their courses. It is high time that we set up a full and independent inquiry.
The grant has been eroded by between 10 per cent. and 14 per cent. since 1979, and the Government have worsened the problems of various students. The Minister talked about medical students and their longer term. He told us that the Government have given them an extra £2·80 a week. Is that right? Many medical students have travel costs and the change in the travel arrangements will cost many of them more than £2·80. Many medical students have a daily travel cost of at least £1 and it is obvious that that works out at more than £2·80 over a week.
The Under-Secretary of State said that some students have benefited from the changed travel arrangements. I believe that a large number of students have lost out. It is
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important that we have a full review of the system and ensure that the students have an adequate income so that they can get the full benefit from the higher education system.
The loss of money to students means that not just students but local communities suffer. Many students look for part-time jobs. Most of them find it extremely difficult to obtain vacation work, but some manage to get part-time jobs which would otherwise have gone to others in the community—people who now have to sign on as out of work. Groups such as landladies, local shopkeepers and those who run various forms of local entertainment are disadvantaged if students have less money to spend. Student travel around the country well illustrates that change. In Morecambe the landladies are disadvantaged because some of the students feel that they can no longer live in reasonable accommodation in Morecambe. They press to live close to the university. The same happens at Herne Bay, Whitley Bay and elsewhere. Students have less money to spend, so they must either press the landladies to keep rents down or move closer to the campus. The local community therefore loses out.
There is about £8·5 million less for students in London. That means that they have £8·5 million less to spend in the centre of London—perhaps £8·5 million taken from transport. I have a nice illustration of what is happening at the university in Manchester. A fortnight ago, I saw large numbers of students walking—that may be good for them—while much of the public transport going down the road by their side was unused. Instead of students contributing towards keeping the public transport system going, a little less money is going into that system.
There will be a distorting effect. The Under-Secretary suggested that over a period students should change the places to which they go and aim for those universities with accommodation close to campus. That is small consolation to places such as Manchester and Kent. When the universities were built, buildings were supposed to be on a site that took into account the availability of accommodation in some of the neighbouring holiday resorts. I would not like students' choices of the universities and polytechnics to which they wish to go to be overinfluenced because of the change in the travel regulations. We should be giving a fair deal to those universities and polytechnics where there is a distance between campus and accommodation. The Government certainly are not doing that.
It has been pointed out that the Government carried out a survey into travel costs based on last year when more local authorities had a cheap fare policy. If the Government force out the cheap fare policy, the results of their survey will be out of date. The real indictment of the Government is the fact that the Scottish Office carried out a careful survey and came down against introducing this system. We now see the unfairness of a Scottish student placed side by side with an English student and receiving different support for travel expenses.
The Government claimed that the travel changes would save administration costs. The National Union of Students and many hon. Members could have offered the Government alternatives. If the Government had taken the simplest alternative and doubled the travel grant, they would have substantially reduced administration. To avoid imposing hardship on students, it would have been worth continuing the old system.

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There will be increased pressure on higher education institutions to provide more accommodation on campus. The travel changes are affecting lodging costs. Representations have been made to me by Oxford and inner London polytechnic students to the effect that already those lodgings that are close to campus are tending to put up their prices.
Because of the danger of rate-capping, local authorities are finding it harder and harder to pay discretionary awards. Some postgraduates on career courses and students who have to repeat their courses due to having suffered genuine illness are finding it very difficult to obtain discretionary awards. It is highly regrettable that there is nothing in the regulations about making grants available to 16 to 19-year-olds, so that they can move on to higher education.
For the past three years these regulations have been debated in Committee or during a very brief debate in the Chamber. If the Government are not prepared to give the NUS a full review, they should find time for a proper debate to be held in the House, lasting a full day, so that hon. Members can debate all the problems that students bring to us. For some crazy reason, the Government have decided that they want to reduce the demand for higher education, and are doing so by reducing the level of student support. We believe that we should be expanding higher education and ensuring that there is adequate support for students to enable them to benefit fully from it. We shall, therefore, be joining the alliance in voting against the regulations.
11 pm
Mrs. Elaine Kellett-Bowman: Not surprisingly, I wish to address my remarks entirely to the question of student travel costs. I am very well aware that the Minister has limited funds at his disposal and must do his best to distribute them fairly and to ensure that the maximum number of young people who are suitably qualified can go on to further education. Presumably, these grants have in the past been calculated on the basis of a student's needs in order that he may effectively pursue his academic studies neither in opulence—which we would not wish—nor in penury, which we would not wish either.
I would not complain if students, in common with most other sectors of the community in almost every country of the world, had to bear their share of the sacrifices that the current world recession is enforcing on everyone. I have certainly never pretended to my students that I would put their claims above those of the pensioners, without whose efforts in war and in peace, there would be no universities, and certainly no free universities. However, I complain when one particular group of students is singled out for more than its fair share of this burden.
When the proposals for student travel were first put forward for consultation, my hon. Friend the Minister was inundated with protests. I give him credit for the fact that he listened, and altered the draft regulations to take account of some of the hardship that would have been caused by his original proposals. But I represent a middle distance university. We are not assisted in any way by those alterations. I do not share the view of the president of the NUS or of the hon. Member for Denton and Reddish (Mr. Bennett). Indeed, I resent an hon. Member getting up and speaking for my students. I know exactly what the
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housing situation is in Lancaster and Morecambe, and I can speak for my students without any assistance from the hon. Member for Denton and Reddish.
I do not agree with the president of the NUS or the hon. Gentleman, who have suggested that students will no longer go to universities such as Lancaster. I believe that the reputation of our university is so firmly established that the young will wish to continue to attend it. But during their stay, they will have a significantly harder time than other students. In the letter sent to me on 31 January by my hon. Friend the Minister, he says that the new flat rate will reduce the administrative costs of local education authorities. I am sure that he is aware that, since then, the Committee of Vice-Chancellors and Principals has offered to bear all the administrative costs of the present refund system. Thus that argument goes out of the window.
In a reply to an adjournment debate initiated by one of my hon. Friends—who are generally much more interested in this subject than Opposition Members—my hon. Friend the Minister suggested that students should seek creative solutions. Mine did: they tried to start a cheap bus service, only to find that they needed an operator's licence. It is perfectly true that the proposals of my right hon. Friend the Secretary of State for Transport may help, but at the moment the best that the student union executive has managed to achieve is an eight-days bus card for £8 or a monthly commuter card for £76 return, which is about to go up. But even before the rise it leaves him £128 a year worse off. The Minister calls that rough justice. I call it rough, but it is certainly not my idea of justice.
The Minister said—I was delighted to hear him say it; he almost melted me—that he will look at new evidence in particular areas. He will have to look at my area, but since that is merely a hope for the future, and these statutory instruments are not amendable, I cannot support the Government on an overall package 'which includes what I believe to be real injustice.
11.5 pm
Mr. Dave Nellist: I oppose the regulations, and in particular the reduction in the travel reimbursement to that element which it is now proposed to include in the grant—£100 or those who study away from home in the first year as a student and £160 for those who stay at home to study.
Yesterday, in a written answer to a question—it was repeated this evening—the Minister who spoke for the Government said that if any clear evidence of real hardship were to emerge in future years the Government would be ready to reconsider the new arrangements. Tonight there have already been some examples—I intend to give some more—of that real hardship emerging. I shall give them not in the hope that the Minister will this evening decide to withdraw the regulations but, to demonstrate to him the scale of the changes and their effect on many thousands of students.
When the Department of Education and Science announced the changes, it said that it would be up to the students to decide how best to arrange their affairs in the light of the total resources available to them. That statement was made after the closing date of applications to universities, which also affects student's choices of polytechnics. Is the Minister aware of such minor details? Is he aware that students must choose, on the grounds of the courses offered, and qualifications obtained and

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required, the type of institution they want, whether it is industry-based or pure academic work? Is he aware that not all institutions have considerable accommodation in cheap halls of residence close by on campus, and that the demand for places in higher education has increased to the point where even interviews are no longer held, as in one department at Coventry polytechnic? How can students arrange their affairs according to the resources available? How can they do this when they do not even know what their daily travel costs will be until after they start at the institution?
Is the Minister aware that the changes to travel costs will raise the rent levels for students in certain areas of towns and cities, as we have already seen in the inner city areas of Coventry, where students are trying to cut down their costs of daily travel by trying to secure private rented accommodation in areas surrounding universities and polytechnics? Is the Minister aware that if student travel costs are above £100 a year those costs have to be met out of the maintenance grant? Thus, it is a cut either in the living standards of the students or a cut in the purchasing of books and materials, and thus a danger to academic standards, or both. If the students do not pay the costs, their parents or guardians must, regardless of the parents' ability to pay. The House can well imagine the discrimination against parents with low incomes. It is not a trivial matter.
At Coventry polytechnic, in the heart of Coventry, South-East, there is a student who has travel costs of over £600 a year. As a first-year student, he would have to find £500 of that; as a continuing student, in the second, third and fourth years, £150. That is a clear cut of £5 a week in the living standards of a second, third or fourth-year student, and for a first-year student a cut of £16 a week. That is not trivial; that is evidence of real hardship which the Minister should take into consideration.
Their are other effects which have already been seen in the city of Coventry. Five or eight weeks before the beginning of this term at the polytechnic we had second, third and fourth-year students returning well before the start of term to look for accommodation within walking distance of the polytechnic because of the changs in the travel costs and allowances. The student union welfare bureau at the polytechnic has already been informed of many increases in rent charges, even in substandard accommodation. During the induction week at the polytechnic we had 2,000 new first-year students. The polytechnic considers accommodation in the halls of residence, based on the polytechnic campus site, only for those who come from a long distance away. Such long distances do not include Birmingham, Wolverhampton, Leicester, Rugby, Stratford and Leamington. Those students are told to commute and find their accommodation later in the term. They have to pay high costs for travel in the meantime.
I am still a serving member of the West Midlands county council, and while it continues to exist students can obtain travel cards for £3·25 a week. But even if those cards are used, students living considerable distances from Coventry would have only £8 to £10 a year to travel to and from home to college.
There is another implication, which I do not think the Minister has even remotely considered. It is the effect of the changes on ethnic minorities. Coventry polytechnic
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has at least 20 young Asian girls who come from Walsall, Birmingham and Wolverhampton. Because of their parents' views on family life, they can study at Coventry only if they return home each day. They are not allowed to live on their own in Coventry. With the changes, either the parents will have to contribute more, or the girls will be told to withdraw. The next time a Minister talks of equal opportunities and opening the doors of education to all, no matter what race or creed, that will sit a little strange, when the changes will put at risk the courses of at least 20 girls at Coventry polytechnic.
There are other implications which I cannot detail because of time. The abolition of the West Midlands county council, the metropolitan counties and the GLC will mean that the present arrangements for travel that lessen the burden will be put at threat. Part of the rationale behind the Government abolishing them is the privatisation of bus services and the raising of prices and profits. The students, with their lower grants, will suffer.
I wish to cite one or two examples of students at Coventry who live in Leicester, Rugby and other areas. One student who lives in Leicester and travels by the cheapest means has costs of £400 a year, £12·50 a week. He will be hard hit by the changes in the regulations. One who lives in Banbury has costs of £59·50 a month by the cheapest method—£476 a year. One who lives in Rugby has travel costs of £31·50 a month by the cheapest form of train season ticket—£252 a year. There are many other such students at Coventry and other institutions throughout the country. Those are the examples for which the Minister asked in his reply to a written question yesterday.
I do not have time to discuss student grants in detail. Already, under the Tory Government of 1984, many students in higher and further education have a weekly income that is less than the poverty allowance paid on the youth training scheme. It is forcing students to chose between fares and food, between heating and books. That is no way for anyone to live, let alone the students whom the Government claim are the future of the economy. Students face a constant financial worry, which is no aid to passing examinations. The House should end means tests and parental contributions and pay full mandatory grants to all students.
Everyone talks of making students financially independent. The Government argue that case in respect of YTS allowances. The regulations reverse any trend towards that. Grants should be equal for all levels of education, both further and higher. I am in favour of the abolition of the tier system of higher and further education.
Grants should be linked to a cost of living index which reflects the things on which students spend their money—rents, food, fares and basic goods. Inflation often affects them differently and at a higher rate than that shown in the retail price index. I hope to see a Labour Government who will institute grant levels that will enable workers to leave their occupations and industry and go into education without suffering a 70 or 75 per cent. fall in their take-home pay.
The Minister spoke of students paying the penalty for the real world and the Government's policies. He said that the money needed to maintain or improve students' grants and allowances could not be found. The House knows that the money exists, but it is not used in the directions that it should be. That is because we have a Government who allow £32 million a day to leave the country and go to

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South Africa, Korea, Argentina and Brazil to seek higher profits from poverty, low wages and the absence of trade unions. The Government are prepared to waste £4 billion in an attempt to break the National Union of Mineworkers. They are in favour of spending £1·5 million a day on membeship of the Common Market, the institution which has stockpiled 3,700,000 tonnes of wheat, which would be sufficient to save the lives of those in Ethiopia who are suffering malnutrition and starvation for six years.
The list could go on. The money is there. Rather than spend it on higher and further education, the Government want cuts in public expenditure to pay for tax cuts for the rich and super rich. The political lessons to be learnt from the Government's actions are clear. They are being absorbed by more and more students. There is a need for the National Union of Students to affiliate to the Trades Union Congress and the Labour party, to fight for a genuine Socialist education policy. When that day dawns, this Government's policies will be consigned to the dustbin of history.
11.16 pm
Mr. Patrick Thompson: I shall not fall into the temptation of commenting upon the stream of irrelevancy we have just heard from the hon. Member for Coventry, South-East (Mr. Nellist).
I should like to refer briefly to travel costs. They are something about which I, like many of my colleagues, am distinctly unhappy. I fully accept that my hon. Friend the Minister is right to resist the overall package demanded by Opposition Members. No doubt during the coming weeks they will continue to press for an impossible cornucopia of goodies in this sphere and all others.
Only the other day I met a lobby from the National Union of Students. When its demands are added up, they come to the incredible figure of £900 million. We must move away from the unrealities which are spoken of by the Opposition.
I hope that my hon. Friend will think again about travel costs, and that he will take into account, as he has hinted today he will, the special problems faced by universities such as the university of East Anglia. I support what my hon. Friend the Member for Norwich, South (Mr. Powley) said in an Adjournment debate in July this year when he spoke on behalf of the students at that university and criticised, rightly in my opinion, the travel costs scheme that we are debating.
The university residences of Fifers lane are in my constituency. The bus fares for the students to go to the university regularly will be £120 a year after a recent increase. Of course, that sum does not include the travel costs which will be incurred when they go from their homes to the university at the beginning and end of each term.
I hope that the Minister will agree that the system is distinctly unfair, because other students at the university of East Anglia have admitted to me that they will be receiving about £100 which they do not need. I oppose this part of the statutory instrument because itis inequitable. I therefore hope that the Minister will take account of what my hon. Friend the Member for Norwich, South said and will reconsider the system and go not for a more expensive system—I am not asking for that—but for a fairer system.
11.19 pm
Mr. Fred Silvester: The Minister knows my views on travel grants. I listened with great care to his speech. He will forgive me if I say that I found it marginally unconvincing that the Government's economic policy depends upon depriving students in my constituency of £100 a year.
The basic facts of the matter are simple. We are proposing to give students an increase of 4 per cent. next year. For a considerable number of students, that will not be true. We shall be taking sums of money away from them, and that will leave them worse off than they are now. I think that it is true to say that it is possible for sums of up to £150 to be lost, which would be 8·5 per cent. of a student's grant. If we in the House were suddenly asked to drop 8·5 per cent. of our income, we would not be too pleased. Some of us will remember the debate on the parliamentary mileage allowance and the views expressed on that occasion.
I make a simple point to my hon. Friend the Minister. His proposals are very unconvincing. On his own figures, under half of the people are involved in the administrative costs. We have heard many suggestions of the way in which the administrative problems could be dealt with, and some of us who have been around in politics for some time get pretty cynical about the view that administrative problems are necessarily important in dealing with matters of justice. We have had no figures for the administrative savings that would accrue.
The suggestion was also made that there is an open-ended commitment. Governments have to face many open-ended commitments. What matters is the size of the commitment. There is no large-scale open-ended commitment on this matter. The Government should face the fact that we have put forward a proposal that is giving money to people who have no justification for receiving it, and taking money from people who have a justification for receiving it. I am sorry to put it so simplistically, but that is what it boils down to. Why on earth should we make such a proposal when there seems to be no gain in either equity or public expenditure?
I am sorry to have to say to my hon. Friend that I shall support the Opposition prayer. It is sad to have to do that because, if we face the truth, we see that there is little to gain in the proposal.
In conclusion, I should like to refer to a letter from the senior warden of some halls of residence in my constituency, which emphasises once again the fact that this is not a little matter in areas that are not campus universities, but rely upon halls of residence or digs at some distance from the university. As the senior warden said, the matter concerns no fewer than three quarters of the people in his halls of residence at Manchester polytechnic. There are 765 students in six halls of residence. It is ridiculous to ask us to go through this hoop unnecessarily for what will be a minuscule saving, which, in the end, we shall have to repeal at some stage.
11.23 pm
Mr. Brooke: With the leave of the House, let me add a word in response to what has been said in the debate and to what I said earlier about travel costs and the future.
I want to give the new system a chance to settle down with changing patterns of travel. I said earlier that we would look at any new evidence put to us of hardship in

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particular areas resulting from the new arrangements. I do not envisage changes that would complicate the regulations or make the jobs of local education authorities more difficult in administering them, as that runs against our purposes this year. However, if hardship is proved and a means available to overcome any problems is available in an administratively efficient way, I can assure the House that we shall look at that.
11.24 pm
Mr. Beith: I have listened carefully to what has been a very useful debate and I have been struck by the fact that every hon. Member who has spoken has strongly criticised some aspect of the regulations. Criticism was directed mainly at two aspects—travel costs and parental contributions.
On travel costs, the Minister said that he wanted to give the new system a chance to settle down. We do not wish to give it a chance to settle down—I am sure that many of the Minister's hon. Friends agree with us—because it is not just and does not deserve to be allowed to settle down. It involves giving public money to people who, on the Minister's own evidence, do not require it for the purposes for which it is given at the expense of those who need it and will be deprived of it. I do not see why a system which has that as its major feature should be given any opportunity at all to settle down.
The Minister claimed as a merit of the scheme that it gave a windfall benefit to students who hitherto had made no claim for additional travel costs—presumably because they saw no need to do so. That is not an advantage of the scheme. It is a shameful criticism of it and the Minister's Treasury colleagues should seize upon it as not being a proper use of public money.
The Minister described the previous system as inefficient and expensive. That implies strong criticism of his Scottish Office colleagues who propose to continue that very scheme on the grounds that it is not inefficient, that the expense is reasonable in relation to the task to be carried out and that at least the money spent will go to those who need it.
The Minister does not have to wait for hardship to be proved. It has already been proved. He could have gone a long way to appreciate the amount of concern shown by saying that he would set about returning to the previous system.
The Minister might also have taken a good deal more notice of the comments made about the parent contribution. I clearly implied that I did not expect him to make any radical changes to the benefit of parents making contributions in the present circumstances. Nevertheless, the Minister failed to recognise how far he has departed from the objectives set for the Government by the Prime Minister when she was Leader of the Opposition.
Having failed to convince the House that there is logic and sense in two crucial parts of the regulations, and especially in one of them, the Minister does not deserve the support of the House or of his hon. Friends.
Mr. Brooke: In relation to the parental contribution scale, is the hon. Gentleman arguing that we should not
1270
move from the regressive scale that we inherited from the Labour Government to the progressive scale proposed in the regulations?
Mr. Beith: I favour a progressive system, but the net effect of the changes being made—and the effect is cumulative over a period—is that the share of the cost of higher education to be borne by parents is increasing drastically while that borne by the Government is declining. That is so far from the original objective set for the Government that the Minister should have done more to explain it, especially to those of his hon. Friends who have been so critical of the parental contribution system. As I have said, I do not believe that the Government can achieve miracles in this respect at this juncture, but they have been trying to pull the wool over everyone's eyes and pretending that they are lightening the load for parents when in fact for parents as a whole they are making it heavier.
The greatest weakness of all, however, has been shown to be the travel costs aspect. As that is the major change introduced by the regulations, and as it is so patently absurd and so patently a misuse of public funds, I hope that Conservative Members will feel in no way obligated to support the regulations but will join us in the Division Lobby.
11.28 pm
Mr. Tony Marlow: At 18, our young people attain the age of majority and are entitled to vote and to fight and die for their country; they are independent—unless they opt for higher education.
If young people go into higher education, their independence depends on the income of their parents, a matter over which they have no control but which may determine their future financial viability. That is wrong, unjust and inequitable.
What happens to a young person who does not get on with his parents and has no communications with them? Is he not entitled to a university education? What happens to a young person whose parents are not inclined to fill in the necessary forms? What happens to the young person whose parents are not able to fill in the forms? What happens to a young person whose parents have difficulty providing the full parental contribution, which often happens when there are other children in a family and the parents have to concentrate support and finance on the education and upbringing of the younger children, having previously spent a vast sum bringing up the older children?
The Government's scheme is unfair, unjust and unsustainable. We should do away with it.
Question put:—
The House divided: Ayes 137, Noes 210.

Division No. 479]

[11.30 pm

AYES

Adams, Allen (Paisley N)

Beggs, Roy

Alton, David

Beith, A. J.

Anderson, Donald

Benn, Tony

Ashdown, Paddy

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

Bagier, Gordon A. T.

Bidwell, Sydney

Banks, Tony (Newham NW)

Blair, Anthony

Barnett, Guy

Boothroyd, Miss Betty

Barron, Kevin

Boyes, Roland

Beckett, Mrs Margaret

Brown, Gordon (D'f'mline E)

1271

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

Leighton, Ronald

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

Lewis, Ron (Carlisle)

Bruce, Malcolm

Lewis, Terence (Worsley)

Callaghan, Jim (Heyw'd & M)

Litherland, Robert

Cartwright, John

Lloyd, Tony (Stretford)

Clark, Dr David (S Shields)

Loyden, Edward

Clarke, Thomas

McCartney, Hugh

Clay, Robert

McDonald, Dr Oonagh

Cocks, Rt Hon M. (Bristol S.)

McKay, Allen (Penistone)

Cohen, Harry

McKelvey, William

Concannon, Rt Hon J. D.

Maclennan, Robert

Conlan, Bernard

McNamara, Kevin

Cook, Frank (Stockton North)

McTaggart, Robert

Cook, Robin F. (Livingston)

McWilliam, John

Corbett, Robin

Madden, Max

Corbyn, Jeremy

Marek, Dr John

Cowans, Harry

Maxton, John

Craigen, J. M.

Maynard, Miss Joan

Cunliffe, Lawrence

Michie, William

Cunningham, Dr John

Mikardo, Ian

Dalyell, Tam

Nellist, David

Davies, Ronald (Caerphilly)

O'Brien, William

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

O'Neill, Martin

Deakins, Eric

Owen, Rt Hon Dr David

Dewar, Donald

Park, George

Dobson, Frank

Parry, Robert

Dormand, Jack

Patchett, Terry

Douglas, Dick

Pavitt, Laurie

Dunwoody, Hon Mrs G.

Penhaligon, David

Eadie, Alex

Pike, Peter

Eastham, Ken

Powell, Raymond (Ogmore)

Evans, John (St. Helens N)

Prescott, John

Ewing, Harry

Radice, Giles

Fatchett, Derek

Randall, Stuart

Fields, T. (L'pool Broad Gn)

Rees, Rt Hon M. (Leeds S)

Fisher, Mark

Richardson, Ms Jo

Flannery, Martin

Roberts, Allan (Bootle)

Foster, Derek

Robertson, George

Fraser, J. (Norwood)

Robinson, G. (Coventry NW)

Gilbert, Rt Hon Dr John

Ross, Ernest (Dundee W)

Godman, Dr Norman

Rowlands, Ted

Golding, John

Sheerman, Barry

Hamilton, James (M'well N)

Short, Ms Clare (Ladywood)

Hancock, Mr. Michael

Silkin, Rt Hon J.

Hardy, Peter

Silvester, Fred

Haynes, Frank

Skinner, Dennis

Heffer, Eric S.

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

Hogg, N. (C'nauld & Kilsyth)

Snape, Peter

Home Robertson, John

Steel, Rt Hon David

Howell, Rt Hon D. (S'heath)

Straw, Jack

Hoyle, Douglas

Thomas, Dr R. (Carmarthen)

Hughes, Roy (Newport East)

Thorne, Stan (Preston)

Hughes, Sean (Knowsley S)

Warden, Gareth (Gower)

Hughes, Simon (Southwark)

Wareing, Robert

Janner, Hon Greville

Welsh, Michael

Jenkins, Rt Hon Roy (Hillh'd)

Williams, Rt Hon A.

John, Brynmor

Winnick, David

Jones, Barry (Alyn & Deeside)

Kaufman, Rt Hon Gerald

Tellers for the Ayes:

Kennedy, Charles

Mr. Michael Meadowcroft and

Lamond, James

Mr. Archy Kirkwood.

Leadbitter, Ted

NOES

Adley, Robert

Blackburn, John

Alexander, Richard

Blaker, Rt Hon Sir Peter

Alison, Rt Hon Michael

Boscawen, Hon Robert

Amess, David

Bottomley, Peter

Arnold, Tom

Bottomley, Mrs Virginia

Baker, Nicholas (N Dorset)

Bowden, Gerald (Dulwich)

Baldry, Tony

Boyson, Dr Rhodes

Banks, Robert (Harrogate)

Brandon-Bravo, Martin

Batiste, Spencer

Bright, Graham

Bellingham, Henry

Brinton, Tim

Bendall, Vivian

Brooke, Hon Peter

Benyon, William

Brown, M. (Brigg & Cl'thpes)

Best, Keith

Browne, John

Bevan, David Gilroy

Bruinvels, Peter

Biffen, Rt Hon John

Bryan, Sir Paul

Biggs-Davison, Sir John

Buck, Sir Antony

1272

Bulmer, Esmond

Mills, Sir Peter (West Devon)

Burt, Alistair

Mitchell, David (NW Hants)

Butler, Hon Adam

Moate, Roger

Butterfill, John

Montgomery, Fergus

Carlisle, Kenneth (Lincoln)

Morris, M. (N'hampton, S)

Carttiss, Michael

Morrison, Hon C. (Devizes)

Cash, William

Morrison, Hon P. (Chester)

Chalker, Mrs Lynda

Moynihan, Hon C.

Channon, Rt Hon Paul

Mudd, David

Chapman, Sydney

Neale, Gerrard

Clark, Dr Michael (Rochford)

Needham, Richard

Clark, Sir W. (Croydon S)

Nelson, Anthony

Clarke, Rt Hon K. (Rushcliffe)

Neubert, Michael

Colvin, Michael

Newton, Tony

Conway, Derek

Nicholls, Patrick

Coombs, Simon

Norris, Steven

Cope, John

Onslow, Cranley

Corrie, John

Oppenheim, Phillip

Couchman, James

Ottaway, Richard

Currie, Mrs Edwina

Page, Richard (Herts SW)

Dickens, Geoffrey

Patten, John (Oxford)

Dicks, Terry

Pattie, Geoffrey

Dorrell, Stephen

Pawsey, James

Douglas-Hamilton, Lord J.

Peacock, Mrs Elizabeth

Dover, Den

Percival, Rt Hon Sir Ian

du Cann, Rt Hon Edward

Pollock, Alexander

Dunn, Robert

Powell, William (Corby)

Durant, Tony

Powley, John

Edwards, Rt Hon N. (P'broke)

Prentice, Rt Hon Reg

Eggar, Tim

Proctor, K. Harvey

Emery, Sir Peter

Raffan, Keith

Evennett, David

Rathbone, Tim

Fallon, Michael

Renton, Tim

Forman, Nigel

Rhodes James, Robert

Fox, Marcus

Rhys Williams, Sir Brandon

Franks, Cecil

Ridsdale, Sir Julian

Gardner, Sir Edward (Fylde)

Robinson, Mark (N'port W)

Grist, Ian

Rossi, Sir Hugh

Grylls, Michael

Ryder, Richard

Gummer, John Selwyn

Sackville, Hon Thomas

Hamilton, Hon A. (Epsom)

Sainsbury, Hon Timothy

Hamilton, Neil (Tatton)

St. John-Stevas, Rt Hon N

Hargreaves, Kenneth

Shaw, Sir Michael (Scarb')

Hayhoe, Barney

Shelton, William (Streatham)

Heathcoat-Amory, David

Shepherd, Colin (Hereford)

Heddle, John

Shepherd, Richard (Aldridge)

Hickmet, Richard

Sims, Roger

Hill, James

Skeet, T. H. H,

Hogg, Hon Douglas (Gr'th'm)

Smith, Tim (Beaconsfield)

Holland, Sir Philip (Gedling)

Soames, Hon Nicholas

Holt, Richard

Speed, Keith

Howarth, Gerald (Cannock)

Spencer, Derek

King, Roger (B'ham N'field)

Squire, Robin

King, Rt Hon Tom

Stanbrook, Ivor

Latham, Michael

Steen, Anthony

Lawrence, Ivan

Stern, Michael

Leigh, Edward (Gainsbor'gh)

Stevens, Lewis (Nuneaton)

Lennox-Boyd, Hon Mark

Stevens, Martin (Fulham)

Lester, Jim

Stewart, Allan (Eastwood)

Lewis, Sir Kenneth (Stamf'd)

Stewart, Andrew (Sherwood)

Lilley, Peter

Stradling Thomas, J.

Lloyd, Ian (Havant)

Sumberg, David

Lord, Michael

Tapsell, Peter

McCrindle, Robert

Taylor, John (Solihull)

MacGregor, John

Temple-Morris, Peter

MacKay, Andrew (Berkshire)

Thatcher, Rt Hon Mrs M.

MacKay, John (Argyll & Bute)

Thomas, Rt Hon Peter

Maclean, David John

Thompson, Donald (Calder V)

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

Thompson, Patrick (N'ich N)

Major, John

Thorne, Neil (Ilford S)

Malins, Humfrey

Thurnham, Peter

Maples, John

Townend, John (Bridlington)

Marland, Paul

Townsend, Cyril D. (B'heath)

Mates, Michael

Tracey, Richard

Mather, Carol

Twinn, Dr Ian

Maude, Hon Francis

van Straubenzee, Sir W.

Mayhew, Sir Patrick

Vaughan, Sir Gerard

Merchant, Piers

Viggers, Peter

Meyer, Sir Anthony

Waddington, David

Miller, Hal (B'grove)

Walden, George

1273

Walker, Bill (T'side N)

Winterton, Mrs Ann

Waller, Gary

Winterton, Nicholas

Walters, Dennis

Wolfson, Mark

Wardle, C. (Bexhill)

Wood, Timothy

Warren, Kenneth

Woodcock, Michael

Watson, John

Yeo, Tim

Watts, John

Younger, Rt Hon George

Wells, Sir John (Maidstone)

Whitfield, John

Tellers for the Noes:

Whitney, Raymond

Mr. Tristan Garel-Jones and

Wilkinson, John

Mr. Peter Lloyd.

Question accordingly negatived.

Southampton Container Port
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Lennox-Boyd.]
11.42 pm
Mr. James Hill: It was inevitable that one day this debate would take place. To my distress, it relates to the demise of a great port covered by the Dock Work Regulation Act 1976—Southampton container port, which is the most modern part of the port complex. The 1976 Act promised to regulate the allocation and performance of cargo handling in the ports round Great Britain. It can do no such thing, and the reasons are obvious: a world recession; a vast reduction in the number of British ships; new and aggressive shipowners from the far east; the need to have accurate costings at a minimum cost; and, most importantly, the need to have a reliable work force able to give continuity of service at a price that ship owners can afford.
To give the recent history of the port, 1981 was a disastrous year for labour relations. We should all bear in mind the fact that there are six unions in the port; in 1981 they were all jealous of each other's conditions of work and pay, and leapfrogged each other until the harmony disintegrated. A general dock strike became inevitable because of the 1976 Act.
Not only the stevedores will suffer because of the port's demise, but many ancillary workers, including the Trinity House pilots. The Southampton area has 47 self-employed pilots, whose earnings have been slashed by half. Among the many others who will suffer are the men who operate tugs, the men who operate businesses such as freight forwarders and provisions suppliers, the checkers, crane drivers and manual workers, the maintenance and repair workers and taxi drivers. The well-being of the port is essential to the city.
The catalogue of disaster is long. On 26 June this year the port director addressed the staff. He pointed out some of the commercal realities. For a considerable time shipowners have been saying that the port at Southampton, particularly the container port, had become uncompetitive in terms of price and reliability of service. Associated British Ports has held regular meetings with staff groups to push home that message. A mass meeting of all groups of workers was held on 26 June. They were told about the seriousness of not heeding the message. The meeting was well attended by about 1,200 staff. The message was that business would be lost if performance at the port was not improved.
The foremen's dispute from 16 June to 27 June brought the port to a standstill—but only temporarily, because the foremen and the dock labour force did not always see eye to eye. Indeed, the Southampton dockers took the bombshell decision to cross the foremen's picket lines.
Then came the first dockers' national strike, called because of fears that the Government were planning to rethink the Dock Work Regulation Act 1976. After a few days the Government, through the Secretary of State for Transport, made the concession that they were not planning any review or abolition of that measure and the dispute was settled. The workers at Felixstowe came out on strike during the first national dockers strike.
The second national dockers strike was in support of the general principle of solidarity with the National Union of Mineworkers. It started on 28 August and lasted until 18

1275
September 1984. It was a tragedy for Southampton. The workers there were among the first to go out. They picketed Portsmouth and Poole, but their chief rivals at Felixstowe were working normally. People in the shipping industry began to think that Felixstowe was perhaps the better bet.
A further strike started on 20 October over manning and conditions of work. The main issue is whether there should be two men for the van caniers—the straddlers who lift the containers—or whether, as the Associated British Ports director says, only one. This may seem a small matter for dispute, but it is estimated that, if ABP does not get its way, it will cost about £1½ million.
Therefore, many people have lost faith in the port of Southampton. United States Lines has lost faith, although I always felt that it was not as tightly glued to Southampton as has been suggested. The Dart Containerline, the Mediterranean Shipping Company (East African Service), BHLR (South American Service) and now finally the South African container traffic, have left. Today the container port is empty. The Trio line, the far eastern container service, comprised of German, Japanese and British interests, is still there, but for how long?
In all fairness to the trade unions, they realise at long last the seriousness of the situation. They have been showing Associated British Ports a certain amount of good will in the way of savings. Unfortunately, Associated British Ports is insisting that it cannot compete, certainly with a contract being offered by the South African container service. It cannot compete with other ports such as Felixstowe.
Much of the blame is to be put on the Dock Work Regulation Act 1976. It has given the dock worker a false sense of protection because he feels that he has a job for life, as the Act says, and because he thinks that that will take him through any economic storm. We are now seeing that it is impossible in the real world to protect men from redundancies, or, indeed, in the case of many ancillary workers, unemployment, by an Act of Parliament. Real jobs are created and kept by putting forward a far better proposition to the shipowners than they have enjoyed in the past.
The port of Southampton has the highest costs in this part of Europe. Mr. Ray Williams, president of the Southampton chamber of commerce, who is also a shipping agent, said:
"There are lots of trade effects that spread throughout the city when this sort of thing happens. When a ship does not dock the whole city suffers."
A well-known haulage firm, Pitters, gets about £200,000 worth of business a year from the Dart contract. A spokesman confirmed that there might have to be redundancies.
A top Japanese business man, Mr. Sadoo Oba, said that poor industrial relations in Southampton docks could rule out the new freeport's hope of attracting money-spinning Japanese companies.
Mr. Christopher Chope: The freeport is just within my constituency. I know that both my hon. Friend and I lobbied hard to get the freeport to Southampton. It was the first freeport to open in the country. The sad thing is that since it opened it has hardly done any business because of a row over the national dock labour scheme and whether work that is carried on within the freeport is the job of registered dockers or other
1276
employees. Does my hon. Friend agree that that is a further example of the way in which the national dock labour scheme is destroying jobs in Southampton?
Mr. Hill: So far, the freeport of Southampton has handled one container. The dispute concerns the trade unions' wish to pack and unpack containers occasionally. The dock management board and the union should meet to establish guidelines for when a container has to be handled by the stevedors.
Mr. Richard Ottaway: Will my hon. Friend accept it from someone who spends quite a lot of time in the shipping industry that it is precisely this sorry catalogue of incidents in trade union relationships in the port of Southampton that makes many shipowners unhappy to use the port? In spite of involvement with the dock labour scheme, until the unions make a gesture, serious shipowners will not return to the port.
Mr. Hill: I agree. There must be good will on both sides. The present dispute is nothing to do with a national one. It concerns shift patterns and whether one or two men can work a van carrier. On the basis of such issues the port of Southampton can be brought to a standstill. A joint committee of the unions has been formed. That is a good step forward. The management is apparently unable to discuss two small points with the unions. First, a judgment will have to be made about whether a freeport is part of the national dock labour scheme and the second is too complex for hon. Members to decide. We cannot say whether it is a one or two-man operation to work a van carrier. That is not our job. The two bodies concerned are near a solution.
I hope that shop stewards of the Transport and General Workers Union, the joint committee and the Associated British Ports director will be able to get together to solve some of the irritants. Southampton does not enjoy this catalogue of despair. Nobody enjoys seeing the port empty. In view of our great past and what we could become, I hope that my hon. Friend the Minister will give my hon. Friend the Member for Southampton, Itchen (Mr. Chope) and me a little hope. We realise that it is a private company, that it is no longer under the auspices of the British Transport Docks Board, that private companies can become insolvent and that docks can be put to other uses. That would be a retrograde step, however, and I sincerely hope that all sides can come together and find a solution so that shipowners will be reassured and return to Southampton.
12 midnight
The Parliamentary Under-Secretary of State for Transport (Mr. David Mitchell): My hon. Friend the Member for Southampton, Test (Mr. Hill) has raised an important and disquieting matter. It is important and disquieting for his constituency, about which he has spoken eloquently, and for the country generally. My hon. Friend the Member for Southampton, Itchen (Mr. Chope) has intervened to draw attention to the interrelationship between the issues raised by my hon. Friend the Member for Test and the free port in his constituency.
What is happening in Southampton is a tragedy for the city, the port, the county and, not least, the 3,000 whose jobs are closely related to the port. What is more, it is entirely unnecessary. The port has natural advantages as

1277
a container port. There are the famous double tides, deep-water access without the need to pass through locks, ample good, flat back-up land for containers and good, fast road and rail communications to important centres of population and of industry. I think especially of the A34 and the improvements that have been made to it as it comes down from the midlands. Southampton has the potential to be one of the great ports of Europe but for the moment a few muddle-headed, short-sighted and stubborn men seem determined to chuck away all that promise and hope for the future.
If a container port is to be in business and provide secure jobs, it must offer its customers a good, quick and cost-effective service. It is in the same position as any other service industry. Customers will not continue to go to a shop, be it a newsagent's or a grocer's for example, if they never know whether it will open. In 1981–82, the port of Southampton was strike bound for the best part of a year because of a dispute over shiftworking arrangements and relativities. More recently there have been the two national strikes, referred to by my hon. Friend the Member for Test. During one of them, as he said, there seemed to be an enthusiasm in Southampton to be out in front and in support of the National Union of Mineworkers. Then, when it became known that Associated British Ports could not get an agreement on realistic manning levels, can any thinking man be surprised that the customers pushed off elsewhere?
The tale that my hon. Friend told was like a death toll. Since the end of the second national dock strike in mid-September the following major customers have gone: the United States Line, the Dart Containerlines, the Mediterranean Shipping Company, Blue Star, Houlder Bros., Lamport and Holt and the Royal Mail Consortium. The loss of the South Africa-Europe Container Service is hoped to be only temporary. The result of losing these customers is that the huge berths 201 and 202 have ceased operating.
In these circumstances one would have thought that every effort would be made jointly by men and management to make the port efficient and cost-effective. Indeed, one would think that common sense would demand that. My hon. Friend has described the circumstances which led to the work force's refusal to cooperate with the new manning scales introduced by ABP on 21 October and the company's subsequent decision to close the container port. My information is that the rest of the port is working normally.
The dispute is about manning scales. Southampton, like other old ports, is switching over to modern and less labour-intensive methods of handling cargo and it has had to reduce the size of its work force. It has already made large reductions in the force. Port work is a competitive business, especially in the handling of containers. If a port is not able to bring down its costs to the minimum, its trade will go elsewhere.
Management has tried hard to cut costs, and reduced manning is the most significant key to doing so. I am given to understand that the stumbling block is the manning of the straddle carriers. It is a classic case of an attempt to spread work, with the understandable aim of increasing employment, but in reality it is pricing everyone out of any job. Southampton Containers will not stay in business
1278
unless it cuts its costs and is able successfully to compete. I am aware that that is a painful process, but if adjustments are to be made they must be made as quickly as possible. I entirely agree with my hon. Friend that the port management and work force must jointly find a solution to the dispute, and quickly.
I have referred to the shipping lines which have decided in the last few weeks to move their business from Southampton to other ports. Most of those moves took place before the dispute reached its present critical stage. No doubt, shipowners, mindful of Southampton's record and of its dockers' full participation in the two recent national dock strikes, were fearful of what might happen and felt that they must have a more reliable and trouble-free British base for their operations. One of the container terminals had already lost all its business before the management decided that it had to close the container port. The longer the dispute goes on, the less likely can it be that Southampton will see its container business return.
My hon. Friend the Member for Test referred in trenchant terms to the national dock labour scheme in connection with not only the harbour but the free port. My hon. Friend the Member for Itchen referred to that point as well. I would say only this. The ports industry, employees as well as employers, must be seen to make the scheme work. If it is to provide the benefits which its champions claim for it, it must be seen to provide those benefits—not just for some interests, but for the whole of the industry. What is happening now at Southampton demonstrates only too clearly and sadly what will happen to dockers, and to others working in or closely associated with the ports business, if dockers misuse the privileges that the scheme gives them. I deliberately mention people closely associated with a port as well as those working in it, because it is often forgotten that in addition to those directly employed by a port authority there are many others who are engaged in providing essential back-up services or whose trade and commercial activities hinge on the existence and effectiveness of the port. As my hon. Friend the Member for Test said, his friends in the Southampton chamber of commerce have drawn attention to that fact. It is as true of Southampton as it is of anywhere else.
Lest anyone should think otherwise, let me make it quite plain that the Government have no power or influence to bring to bear on this dispute. Like all industrial disputes, it can only be settled between the management and the work force. The responsibilities for ports of my right hon. Friend the Secretary of State do not and cannot extend to the industrial scene. He would have been powerless if ABP were still the nationalised British Transport Docks Board. He is equally powerless now that it is wholly owned by Associated British Ports Holdings. The Government are not among those shareholders.
If the Government have no formal position, I very much hope that what I have had to say this evening and the points that have been so eloquently and forcefully put by my hon. Friend will be taken to heart by the work force in the port of Southampton and especially by its leaders. What is happening there is a tragedy for the town and the port, and it lies in the hands of those who work there to prevent that tragedy from continuing.
Question put and agreed to.
Adjourned accordingly at seven minutes past Twelve o' clock.

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Preamble
The House met at half-past two of the clock: The LORD CHANCELLOR on the Woolsack.
Prayers—Read by the Lord Bishop of Chelmsford.
Earl Howe—Sat first in Parliament after the death of his cousin.
Lord Harmsworth—Took the Oath.

Jamahiriya School: Security
Lord Chalfont: My Lords, I beg leave to ask the first Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they are still of the opinion that the Libyan presence at a school in Chelsea poses no threat to security.
The Minister of State, Home Office (Lord Elton): My Lords, I understand that the Jamahiriya School at Chelsea is a bona-fide educational establishment. If there were any reason to suppose that this establishment posed a threat to security, the police would take whatever action was necessary.
Lord Chalfont: My Lords, is the Minister aware that at any given time upwards of six cars with diplomatic number plates can be seen parked in the playground of this school, and that there is a constant coming and going of people whose appearance leads one to suppose that they have only a tenuous connection with the education of small children? Will the Minister assure the House that these premises have no form of diplomatic immunity and that there is in force a security operation which would give us early warning if the premises were being improperly used?
Lord Elton: My Lords, I cannot comment on the appearance of the people going in and out of the building. I am aware that a number of cars belonging to Libyan diplomats who were formerly resident in this country are parked at the Chelsea school pending their eventual disposal. The police pay close attention to the situation, but I understand that there is at present no reason to believe that there is anything untoward about the presence of the cars which are not, as the noble Lord rightly says, on diplomatic property.
Lord Boyd-Carpenter: My Lords, can my noble friend express similar confidence about the Libyan presents to the National Union of Mineworkers?
Lord Elton: My Lords, I am obliged to be strict about the rules of order and what is on the Order Paper, no matter how strong is the temptation to break them.

"Generals For Peace" Organisation: Security
2.38 p.m.
Lord Chalfont: My Lords, I beg leave to ask the second Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they are aware of the activities of the organisation known as "Generals for Peace"; and whether they are of the opinion that these activities are consistent with the maintenance of security in the free world.
The Minister of State, Foreign and Commonwealth Office (Baroness Young): My Lords, we are aware of the activities of this organisation, which originated in discussions at Sofia during a World Peace Council Congress in1980. The collective views of Generals for Peace and Disarmament are contrary to those of the Government and our allies. The Government's policy is of course to preserve the security of the United Kingdom and the countries of the Western Alliance.
Lord Chalfont: My Lords, while thanking the noble Baroness for that Answer, may I ask whether the Government are aware that of the eight founder members of this organisation, which purports to consist of NATO generals, four are members of the World Peace Council, a notorious Soviet front organisation? Is she further aware that the founder and controller of this organisation until very recently was Dr. Gerhard Kade, who is a senior figure in the Soviet propaganda apparatus? Is it not a matter of grave concern that an organisation posing as NATO Generals for Peace might be the instrument of disseminating Soviet disinformation?
Baroness Young: My Lords, we are fully aware of the close links between four of the original sponsors and five of the current 14 members of the so-called generals group and the World Peace Council. Dr. Gerhard Kade, their co-ordinator until last year, is also an official of the World Peace Council in Helsinki and of its subsidiary, the International Institute for Peace, in Vienna.
Lord Home of the Hirsel: My Lords, is my noble friend aware that I can remember as far back as 1938 and a famous Secretary-General of the Communist Internationale giving instructions as to how to recruit people into the Russian peace organisations? His words, I remember, were, "One sympathiser, a writer of reputation or a retired general is worth more than 500 poor devils who know no better".
Lord Brockway: My Lords, is the Minister aware that this is an organisation of ex-generals and admirals of both the West and the East, and even those who have commanded United Nations forces? Is she further aware that its purpose is to prevent a nuclear war, with all its threat to mankind? Is that not the stated purpose of the Government, and therefore should not this organisation be welcomed?
Baroness Young: No, my Lords. These retired officers from NATO countries in no sense represent

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the alliance or their countries. They claim, in fact, that they are working for disarmament, but they have been strongly critical of Western strategy. They have particularly attacked the deployment of Cruise and Pershing II missiles. They have endorsed the Warsaw Pact disarmament proposals, and have wholly failed to protest at the Soviet Government's recent stationing of nuclear missiles in Czechoslovakia and East Germany.
The Earl of Kimberley: My Lords, would my noble friend agree that the danger of this type of Soviet disinformation is enhanced when two national newspapers like the Guardian and the Observer publish accounts of Generals for Peace without any mention of their connections with the Soviet Union? Is she also aware that when this evidence was produced for the Observer the editor categorically refused to print it?
Baroness Young: My Lords, I am aware of the point that my noble friend has made. The fact is that in this country we have a tradition of responsible newspapers printing relevant facts, and any lapses from such a high standard would be regrettable.
Lord Cledwyn of Penrhos: My Lords, is the Minister aware that the British officer among these generals is an officer with a distinguished record, whatever may be his views about strategy or armaments? Would it not be quite wrong to give the impression in this House that we all regard him as a mole, a red under the bed, or a communist stooge? Is he not entitled to his views on these matters without being so branded?
Baroness Young: My Lords, in a free society the officer in question is as entitled to express his views as anybody else. But it is a dangerous matter when the suggestion is made that these people are speaking on behalf of NATO or the NATO allies, or are writing on their behalf when, in fact, they are retired generals.
Lord Cledwyn of Penrhos: My Lords, the Minister is right to say that this officer is as entitled to express his view as everyone else in this country. Is he also not entitled to be excluded from being described as a communist, a traitor, a red under the bed, or any other unpleasant name which people direct at him? Will the noble Baroness be quite clear in what she says about that?
Baroness Young: My Lords, I do not think that in any of the exchanges that have taken place across the Floor of the House this afternoon anyone has described Brigadier Harbottle in those terms. What the noble Lord, Lord Chalfont, drew attention to was the link between this organisation and the World Peace Council which I have supported.
Lord Cledwyn of Penrhos: My Lords, I am glad that the noble Baroness mentioned Brigadier Harbottle, but was it not quite clear from the implication of what was said by her and others that he was so regarded? Would she not agree that he is a distinguished ex-officer with a good record?
Baroness Young: My Lords, we are not discussing the record of any particular person. The point that has been made in this exchange is that there is a link between this organisation and the World Peace Council.
Viscount Trenchard: My Lords, is my noble friend aware—she seems to be very well aware of a great many of the activities of this organisation—that ex-General M. H. von Meyenfeldt, who I understand is presently chairman of this posse of generals, wrote in the journal of the World Peace Council in October 1981:
"The foreign policy of the USA is aimed at retaining its position of strength and returning to its old plans of world domination"?
Does my noble friend agree that while we must be careful of spotting any particular reds under beds, we should also be careful of wolves in sheep's clothing and possibly even of bears in doves' plumage?
Baroness Young: Yes, my Lords, I would agree with my noble friend.
Lord Jenkins of Putney: My Lords, is the noble Baroness aware that if, instead of listening to this somewhat inflammatory Question and Answer, noble Lords would read the document Generals for Peace and Disarmament, which may be obtained in the Library, they would discover that the policies put forward by the Generals for Peace are almost identical in many respects with those of Her Majesty's Opposition?
Noble Lords: Oh!
Lord Jenkins of Putney: My Lords, in these circumstances is it not highly undesirable that the defence committee of this House should be under the control of people who take such a biased view of the whole situation?
Baroness Young: My Lords, it is not for me to show that the policy of Generals for Peace and the policy of Her Majesty's Opposition are the same. I should have thought that there were divided views on that matter. I would hope that that was the case.
Baroness Cox: My Lords, is my noble friend the Minister aware that the organisation called the Centre for International Peacebuilding, which houses Generals for Peace and whose director is their administrator, has set up a registered charity called the Caroline Gourlay Trust? Might this matter not be brought to the urgent attention of the Charity Commission, in view of what many people regard as the blatantly pro-Soviet propaganda distributed by these organisations?
Baroness Young: My Lords, there are very strict rules regulating the conduct of registered charities, particularly regarding activities of a political character. The points that my noble friend has made, if valid, are no doubt for the consideration of the Charity Commissioners or for my right honourable and learned friend the Attorney-General.
Lord Chalfont: My Lords, is the noble Baroness the Minister aware that I am grateful for the robust answers that she has given to my Question? Is she also aware that I accused no one of being a traitor, least of all the British member of this strange organisation? Is she aware that in my view the links between this organisation and the Soviet propaganda organisation are a matter of concern? Would she not agree that the fact that ex-NATO generals who held very high positions should now be meeting serving Soviet generals to discuss strategy in Western Europe is a matter of the gravest concern?
Baroness Young: My Lords, I agree with the points that the noble Lord, Lord Chalfont, has made. In fact, the meetings which have taken place, and the third meeting which has recently taken place in Vienna, have in many respects been gifts to Soviet propaganda. In practice these meetings have been stage managed by the Soviet-controlled International Institute for Peace—the Vienna counterpart of the World Peace Council in Helsinki—from whose former offices it operates.
Lord Jenkins of Putney: My Lords, may I trespass for one moment?
Lord Denham: My Lords, I wonder whether the noble Lord, Lord Jenkins, would give way? We have been nine minutes on this Question. Perhaps the House might agree that after the noble Lord, Lord Jenkins, has put his question and my noble friend has answered we should move on.
Lord Jenkins of Putney: My Lords, I am most grateful to the noble Lord. I merely wanted to ask the noble Baroness whether she was aware that what I am about to quote is from the pamphlet issued by Generals for Peace. This quotation will commend itself to the whole House:
"One must recognise the wisdom of the wartime slogan: 'Know your Enemy'."
Baroness Young: My Lords, I am sure that we all agree that we should know our enemies.

Electricity Prices: Consumer Representations
2.50 p.m.
Baroness Burton of Coventry: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether, in view of their answer on 17th May last (col. 1504) and subsequent letter of 4th June to the Baroness Burton of Coventry concerning the right of the London Electricity Consultative Council to make further representations to the Secretary of State for Energy, they will indicate the present position on this matter.
The Parliamentary Under-Secretary of State, Department of the Environment (The Earl of Avon): My Lords, I understand that the London Electricity
438
Consultative Council, following its representations to the Electricity Council about the increase in domestic electricity prices last April, has not chosen to pursue the matter with my right honourable friend the Secretary of State for Energy.
Baroness Burton of Coventry: My Lords, does the Minister recall that the central point at issue in all this was that the electricity industry was being required to make a separate grant to the Treasury in 1984–85 of £360 million over and above the £380 million which would have been consistent with the financial target for that year? Does he also recall that the chairman of the Electricity Council, Mr. Jones, said that the £360 million was necessary neither on economic pricing grounds nor in order to meet the industry's current financial target? Furthermore, would the Minister accept that this was not an agreed figure but one imposed without any consultation at all?
The Earl of Avon: No, my Lords, I would not agree with what the noble Baroness says. We are now going back over the ground covered in April. At that stage a 2 per cent. increase in domestic prices was the subject of a challenge by the London Electricity Consultative Council, and the consultative council exercised its rights under statute formally to appeal. This rise of 2 per cent. was agreed by the Electricity Council and duly came into force.
Baroness Burton of Coventry: My Lords, is the Minister aware that I should like to know where he disgrees with me? It may be in the past; it relates to last February; but, certainly, what I stated is correct. I wonder if I might ask him whether he is denying that Mr. Jones, the chairman of the Electricity Council, did say that the charges were imposed without consultation and that the council gave way afterwards.
As we are on this point, may I ask the noble Earl whether he is aware that the Government's attitude towards consumers is causing acute puzzlement and dismay among consumers? Does he recall that Mr. Alex Henney was not reappointed as chairman of the London Electricity Consultative Council in August and that many of us feel that Mr. Henney was not appointed because he was being a nuisance as he was endeavouring to give teeth to the council and was pursuing the Government on this particular matter?
The Earl of Avon: My Lords, the Electricity Council proposed the 2 per cent. increase across the board which took place in the spring. Mr. Alex Henney was not reappointed. A new chairman has been appointed, a Mr. Bourne, and we wish him well.
Lord Bruce of Donington: My Lords, will the noble Earl use this occasion to confirm to the House the unequivocal statement that he made to your Lordships' House last December that the Government had neither the power nor the wish to increase electricity or gas prices?
The Earl of Avon: My Lords, I am happy to confirm what the noble Lord has said I said. I am delighted that he put it in a letter to The Times.
Baroness Seear: My Lords, would the noble Earl not agree that when a very well-informed critic such as Mr. Henney is not reappointed to his position it at least raises the suggestion that the Government are not interested in informed criticism on behalf of the consumers?
The Earl of Avon: My Lords, I appreciate what the noble Baroness has said, but I personally was very stimulated by Mr. Henney's words and what he produced for the Government and would welcome his reappointment if he wished to serve on the national council. As far as the London council is concerned, at the end of his three years he was not reappointed.
Lord Avebury: My Lords, the noble Earl the Minister has denied the assertion by the noble Baroness that no consultation took place, but he omitted to deal with her point that the chairman said that there had been no consultation. Would he care to reply to that point now?
The Earl of Avon: My Lords, it is very difficult, when the noble Baroness produces a whole lot of sentences, to know to which particular sentence one is replying. As far as I am concerned, the consultative council is at the moment in consultation with the Ministry, and I am sure that this will be to the benefit of all concerned.
Baroness Burton of Coventry: My Lords, is it in order, before asking another supplementary question, to ask the noble Earl to repeat the beginning of the last remark of his because I did not catch it?
The Earl of Avon: My Lords, I am afraid that the noble Baroness will have to wait for Hansard tomorrow.
Baroness Burton of Coventry: So, my Lords, not waiting for Hansard tomorrow, may I ask the Minister whether he recalls that last week in this House we discussed telephone charges which were being imposed with no consultation with the consumer organisation? Now we are discussing electricity charges which, equally, have been imposed without consultation. Is the Minister aware that consumer organisations just do not believe that the Government have any use for consumers at all except to call them in aid as a public relations exercise?
The Earl of Avon: My Lords, all I can say to the noble Baroness is that, as far as I am concerned, when I was there, she is totally wrong. I initiated talks with the consumer councils, with the chairman, Mr. Hatch, and I understand that my successor is continuing these discussions.

European Monetary System and the UK
2.56 p.m.
Baroness Seear: 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 the circumstances are now right for the United Kingdom to join the European monetary system; and if not, why not.
The Chancellor of the Duchy of Lancaster and Minister for the Arts (The Earl of Gowrie): No, my Lords. When your Lordships last debated fully the question of sterling's participation in the exchange rate mechanism, my noble friend Lord Cockfield identified the difficulties created by the very different effects of uncertainty about the dollar and oil markets on European currencies, notably on sterling and the deutschemark. Both sources of uncertainty are clearly still affecting exchange markets at the present time.
Baroness Seear: My Lords, I thank the noble Earl the Minister for that reply. Is it not very disappointing that for so long we have been told that at the right moment the Government will become a full member of the EMS? What is really holding it up at the present time?
The Earl of Gowrie: My Lords, I do not think that it is quite as disappointing as the noble Baroness makes out, because strictly speaking we are already a member of the EMS. We contribute 20 per cent. of our gold and dollar reserves to the European Monetary Co-operation Fund, and we participate in realignment conferences. The pound is also included as a component of the European currency unit. Sterling does not participate in the exchange rate mechanism because, as a petro-currency, it rises and falls with oil prices, while other Community currencies do precisely the opposite.
Lord Barnett: My Lords, does the noble Earl mean that there are no circumstances in which we shall join the exchange rate mechanism?
The Earl of Gowrie: No, my Lords—I dare not. As I said, I think that the time is not ripe mainly because our currency, unlike the European currencies, is linked to the rise and fall in oil prices.
Lord Bruce-Gardyne: My Lords, as a congenital waiverer on this issue, may I put a question to my noble friend? Does not past experience suggest that outside the exchange rate mechanism sterling tends to weaken less than the member currencies in the exchange rate mechanism when the dollar is strong, and to strengthen less than the member currencies in the exchange rate mechanism when the dollar is weak? Might this not suggest, given that so much of our own imports are actually denominated in dollars and given that if sterling were to strengthen substantially against the dollar this would assist in the abatement of inflation expectations, the moment at which we might contemplate joining the exchange rate mechanism would be the moment at which we had concluded that the dollar was finally turning turtle as at some stage it will, always supposing that we can identify that moment?
The Earl of Gowrie: My Lords, I am rather entranced by my noble friend's suggestion that he is a congenital waiverer about anything. It is certainly the case that membership of the exchange rate mechanism does not provide immunity from the effects of dollar strength on European currencies. Experience suggests that when the dollar shifts significantly downwards then the exchange rate mechanism comes under strong

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pressure. Since my noble friend and I both hope that this shift in the dollar will happen within the next six months or so, I think that my point is reasonably well taken.
Lord O'Brien of Lothbury: My Lords, on the assumption that Her Majesty's Government see the advantages of exchange rate stability, and that they say they will join the exchange rate mechanism of the European Community when the time is ripe, and having heard the Minister talk about the difference between sterling and the European currencies because sterling is a petro-currency, may I ask whether there is any early prospect of the Government's joining the exchange rate mechanism? I should have thought that that was a more or less permanent situation.
The Earl of Gowrie: My Lords, I think that the point I made in my first supplementary to the noble Baroness is the one that the noble Lord, Lord O'Brien, with all his experience in these matters, could perhaps take notice of: that we are already a very considerable participator in the European monetary system. The difficulty and the argument is about our participation in the exchange rate mechanism. It is not, I think, so much a question that this will be out of issue; that it will not be possible while we have oil assets. It will be more a question of Europe perhaps coming in line with a currency system that is less linked to oil assets.
Lord Diamond: My Lords, is the noble Earl aware that he seems to have gone back on the attitude of Her Majesty's Government with regard to this important issue? Would he care to make it absolutely clear that the Government are still in favour in principle of taking this further step? Is he further aware that there are many authoritative voices—we have just heard one most authoritative voice and there are many others—who take the view that it is extremely appropriate now to take that further step? If he is not in agreement with that as to timing, when can we look forward to the Government ending this question mark over their policy and making a clear decision?
The Earl of Gowrie: My Lords, it was, in fact, in your Lordships' House in November of last year that the Government gave their most recent and fully authoritative view of this position in a debate which enjoyed the maiden speech of the noble Lord, Lord Barnett. That was the point at which my predecessor my noble friend Lord Cockfield set out the position most authoritatively. He stated quite categorically that we were in favour of participating in the EMS—and I have dealt with that point—and that it would be in an ideal world a good thing to involve ourselves in the exchange rate mechanism, but that the timing was not right because of uncertainties in international currencies through their relationship with oil prices, which particularly affected ourselves.
Lord Bruce of Donington: My Lords——
Lord Denham: My Lords, if the noble Lord will give way for half a minute, we have been 26 minutes on Questions already. We were two minutes on the first Starred Question, which means that we have had an average of eight minutes on the others. I understood
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that his noble friend behind him was speaking from the Front Bench opposite, but if the noble Lord, Lord Bruce, would like to put his question quickly and if my noble friend would reply, perhaps we could then move on.
Lord Bruce of Donington: My Lords, I am most grateful to the noble Lord for his courtesy. May I ask the noble Lord whether the Government's apparent uncertainty in this matter is perhaps due to the fact that the Government's prime objective may be that which was talked about by his right honourable friend the Prime Minister in March 1980, when she burst with pride when the dollar was standing at 2·40 to the pound and said that the high exchange rate was a matter of national pride?
The Earl of Gowrie: My Lords, it is always a matter of national pride when one's national assets are fetching very large sums of money. But in the real world in which we live the prices of raw materials fluctuate.

Business
Lord Denham: My Lords, at a convenient moment after 3.30 this afternoon my noble friend Lord Trefgarne will, with the leave of the House, repeat a Statement that is to be made in another place on famine relief in Ethiopia.
It may be for the convenience of the House if I announce that dinner will be available at 7.30 this evening.

Bournemouth Borough Council Bill [H.L.] London Transport (Tower Hill) Bill [H.L.] Nottinghamshire County Council Bill [H.L.]
The Chairman of Committees (Lord Aberdare): My Lords, I beg to move the first Motion standing in my name on the Order Paper and, if I may, speak also to the second. These are two further procedural Motions similar to those that I moved yesterday in connection with the Private Bills mentioned on the Order Paper to enable them to continue their way through Parliament in the next Session.
Moved, That the Promoters of the Bill have leave to suspend any further proceedings thereon in this Session, in order to proceed with the Bill in the next Session of Parliament, notice of their intention to do so having been deposited in the Office of the Clerk of the Parliaments;
That such Bill shall be deposited in the Office of the Clerk of the Parliaments not later than three o'clock on or before the third day on which the House shall sit after the commencement of the next Session of Parliament, with a declaration annexed thereto, signed by the Agent, stating that the Bill is the same in every respect as the Bill at the last stage of the proceedings thereon in this House in the present Session;
That the proceedings on such Bill shall, in the next Session of Parliament, be pro forma only in regard to

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every stage through which the same shall have passed in the present Session, and that no new fees be charged in regard to such stages;
That the Standing Orders by which the proceedings on Bills are regulated shall not apply, in the next Session of Parliament, to such Bill in regard to any of the stages through which the same shall have passed during the present Session.—(Lord Aberdare.)
On Question, Motion agreed to, and it was ordered that a Message be sent to the Commons to acquaint them therewith.

Dartmoor Commons Bill Greater London Council (Money) (No. 2) Bill London Docklands Railway (No. 2) Bill
Lord Aberdare: My Lords, I beg to move the second Motion standing in my name on the Order Paper.
Moved, That this House do concur with the orders made by the Commons set out in their messages of 31st July and 24th October.—(Lord Aberdare.)
On Question, Motion agreed to, and it was ordered that a Message be sent to the Commons to acquaint them therewith.

Rent (Scotland) Bill [H.L.]
Bill returned from the Commons earlier this day agreed to with an amendment; the amendment was printed pursuant to Standing Order 48.
The Lord Advocate (Lord Cameron of Lochbroom): My Lords, I beg to move that the Commons amendment be now considered.
Moved, That the Commons amendment be now considered.—(Lord Cameron of Lochbroom.)
On Question, Motion agreed to.

Rent (Scotland) Bill [H.L.]

  COMMONS AMENDMENT
  [References are to [Bill 214] as first printed for the Commons]
  Clause 85, page 58, line 12, leave out ("tribunal") and insert ("assessment committee").
  Lord Cameron of Lochbroom: My Lords, I beg to move that the House do agree with the Commons in their amendment. This amendment is necessary to correct an oversight in the Bill. Put shortly, the Bill includes reference to the rent tribunals. The functions of the rent tribunals were transferred to the rent assessment committee by an Act of 1980, but, unfortunately, this matter was, by oversight, not contained in the earlier Act of 1971 and it was not accordingly changed. In these circumstances, I beg to move that the amendment be considered and accepted. I should say that the amendment has been seen and approved by the noble and learned Lord, Lord Brightman, who is the chairman of the Joint Committee on Consolidation Bills. My Lords, I beg to move that the House do agree with the Commons in their amendment.
  Moved, that the House do agree with the Commons in the said amendment.—(Lord Cameron of Lochbroom.)
  On Question, Motion agreed to.

Ordnance Factories and Military Services Bill
3.7 p.m.
The Parliamentary Under-Secretary of State for the Armed Forces (Lord Trefgarne): My Lords, I beg to move that the Commons Reason for disagreeing to one of the Lords amendments be now considered.
Moved, That the Commons Reason for disagreeing to one of the Lords amendments be now considered.—(Lord Trefgarne.)
On Question, Motion agreed to.

Ordnance Factories and Military Services Bill

  COMMONS REASON
  [References are to Bill (230) as first printed for the Lords. The Commons Reason is printed in italics.]
  1 Clause 1, page 1, line 6, at beginning insert—
  ("Subject to an affirmative resolution of each House of Parliament")
  The Commons disagreed to the amendment made by the Lords in page 1, line 6, for the following Reason:
  Because it could result in unnecessary delay in transferring property, rights and liabilities in accordance with the Act.
  Lord Graham of Edmonton Lord Graham of Edmonton rose to move, That this House do insist on Amendment No. 1 to which the Commons have disagreed.
  The noble Lord said: My Lords, the outcome of this debate is concerned with the rights of Parliament. The single central issue to be decided by your vote is not whether this Bill shall pass. That is not in dispute. It is not the principle underlying the Bill to place a public asset—our ordnance factories—into private hands. That is unchallenged. That principle, although opposed, is not in dispute.
  What is at issue is the right and the duty of Parliament to be given the opportunity to consider the details of the prime instrument transferring those powers contained within a scheme or schemes. It is the refusal by this Government to provide both Houses with that opportunity before such a scheme is started that is in dispute. Quite simply, opposition to our amendment denies proper parliamentary scrutiny. Those who believe that this House has a part to play in exercising proper parliamentary scrutiny will support the amendment. The issue is as simple as that.
  In another place, the Minister in charge of the Bill called the scheme nothing more than
  "conveyancing machinery for transferring property from the Secretary of State to the new company".
  He chided my honourable friends for being concerned with the details of the scheme. What reason do the Government give to your Lordships' House for asking it to reject the amendment which we in this House passed but three months ago? I quote: "Because it could result in unnecessary delay". I ask your Lordships to note that it is not "delay", but "unnecessary delay". I ask the question in all seriousness. Surely it will be a sad day if the proper accounting to Parliament by Government and the proper scrutiny of that accounting to Parliament is viewed as unnecessary. In a saga stretching over many months, even years, what would be unnecessary? It could be as little as hours of parliamentary time—hours, my Lords, not days or weeks.
  The truth is that the Government will not tolerate or brook any delay by anybody, including either or both

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  Houses of Parliament. That is the measure of the Government's desperate and intolerable haste. What do the Government want no unnecessary delay to interfere with? I quote again:
  "with transferring property, rights and liabilities in accordance with the Act".
  We have no details of substance relating to land, buildings, machines, intellectual rights, valuations. There is no conclusion to the protracted negotiations with the trade unions on pension rights, redundancy terms, negotiating rights. Yet the Government seek approval to proceed, come what may.
  What awkward questions do the Government think Parliament can ask, and why do they deny to Parliament the right to ask those questions? I tell this noble House that if a Labour Government came to either House, said that they wanted to take an industry into public ownership and asked for the principle of that decision to be agreed by the House without giving details of compensation, organisation or the transfer of liabilities, there would be a tremendous outcry from the Conservative Benches—and rightly so. Labour would be accused of riding roughshod over Parliament. We should be told, in the words of the noble and learned Lord the Lord Chancellor, that we had an elective dictatorship.
  Noble Lords do not have to take my words. When we debated and determined this very issue in your Lordships' House on 19th July of this year the noble Lord, Lord Diamond, said at col. 1635:
  "In all my experience of legislation … I have never seen a Bill which consults Parliament so little, and indeed which scorns Parliament in the way it gives all power to the Government and to the Minister and none to anybody else".
  That was a devastating indictment. We shall hear that there is no time, that deadlines have to be met, that all has been revealed, that the Minister has nothing to hide; yet for more than nine months Parliament has been fobbed off with promise after promise after promise.
  Where is the memorandum of understanding? Where are the articles of agreement? Three months ago we were told that they were in final draft. Where are they now? Where are the details of the intellectual property rights? The Minister said in February, nine months ago, that they would be produced in three months' time. Six months after that promise, where are they? The noble Lord, Lord Lloyd of Kilgerran, and the noble Lord, Lord Mayhew, have repeatedly asked for details. Those details have been promised but have never been given. The noble Baroness, Lady Vickers, and the noble Lord, Lord Carver, have asked questions time after time, but in vain. We have asked for details of the valuation of assets. All we have been promised in the scheme is a statement of the principles of the valuations.
  What will be the capital structure of the company? We do not know. How will assets be transferred? We do not know. The scheme is the heart of the Bill, yet it is the intention of the Government, in Clause 3(9), not just to lay a copy of the scheme and allow for no debate upon it but to do so up to one month after—I repeat after—the scheme has come into force. Surely this cannot be right. Surely it lacks courtesy to Parliament. Surely it is undemocratic.
  Let me repeat, in order to reassure those who share my concern over constitutional proprieties, that the amendment which I move seeks to provide both Houses of Parliament with an opportunity to exercise their duty and their rights. It is designed to enable proper parliamentary scrutiny. It is not a challenge to the principle of the Bill. It is not a wrecking amendment. It is not a delaying device. It will force the Government to treat Parliament not as a rubber stamp but as a responsible element in our legislative procedures. By supporting this amendment, noble Lords are doing no more than is their duty. We cannot do less. I ask your Lordships to support the Motion.
  Moved, That this House doth insist on Amendment No. 1 to which the Commons have disagreed.—(Lord Graham of Edmonton.)
  3.16 p.m.
  Lord Diamond: My Lords, I understand that it would be more convenient if I said what I have to say now rather than after the Minister has responded to the noble Lord, Lord Graham of Edmonton.
  I am most anxious to do everything I can to satisfy your Lordships that this is not a party or partisan matter. That was the principle of the Bill and it has been disposed of. Both Third Reading and the Question, That the Bill do now pass have been settled in both Houses of Parliament. We are concerned solely with whether we should insist upon Parliament being consulted. We are not asking for power to alter any detail. Merely do we insist upon Parliament being consulted in circumstances in which the Government have chosen to introduce an enabling Bill which, as I said on a previous occasion, is enabling with a capital "E".
  The Bill gives to the Minister, and only to the Minister, enormous powers to privatise, as everybody knows, part of the supply of materials which affect the security of this country. This has continued for 400 years or more and has never been in hands other than those of the Crown. The Government are doing it by means of an enabling Bill which has only one effective clause: the power to make a scheme. We know very little indeed about what the scheme will contain. I put it to all noble Lords that it is no less than minimum courtesy and a matter of reasonable consultation with both Houses of Parliament for the Government at least to say what is in the scheme before, not after, it has become effective.
  The Government do not dispute that Parliament is entitled to know. They say that the scheme will be published within one month after it has become effective. There is no dispute about that. We are all agreed that Parliament should know. The issue is when Parliament should know. Should it know at a time when it can express its view, at a time when the Government would have to justify—this is at the heart of democratic proceedings—and persuade all Members of both Houses that the course they have taken is reasonable?
  If the Government had given to Parliament adequate details of what is to be included in the scheme, we should not be pursuing the matter. The details are important. There is no question that many of the most important details are still open—details

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  affecting the employment, redundancy conditions, pension rights and other rights of a huge labour force which was totally loyal and totally strike-free until the introduction of the Bill. They are concerned about the prospect of up to 1,600 people being declared redundant in any week. Whether that will be before or after the scheme is introduced, one does not know. They do not know for certain what their future will be. Nor do the Government.
  The Government say, very properly, that certainty can be obtained only by consulting the courts. That is a reasonable statement, but surely it is reasonable for Parliament to be given the opportunity to know the Government's proposals on a number of vital issues. How is the company going to be run? That is called a memorandum of understanding. What it means is, how is the company going to be run? It is going to be wholly owned by the Secretary of State. How is he going to exercise his powers? Answer: under a memorandum of understanding. What is the memorandum going to say? We do not know. Time and time again the Government have promised to produce it, but they have not produced it for the best of all reasons; they have not yet decided what the memorandum of understanding is going to say. One can continue in this way on a number of most important issues.
  A whole series of assets is going to be transferred? Which assets? I am sorry, but neither the Government nor I can tell you, because the Government have not yet decided. How are the assets going to be valued? I am sorry, but neither the Government nor I can tell you, because the Government have not decided what are the principles of valuation. They decided earlier that there was a principle, which they promulgated, though I had never heard of it before, notwithstanding having spent a lifetime in my profession. It was the principle of usefulness. That did not last long, and they have withdrawn from that. I can only help your Lordships by saying which principle will not be adopted; but I cannot be more constructive and say which principle will be adopted for valuing the assets, nor which assets will be transferred, nor, when they are transferred, how the business will be run.
  Good heavens! Have I not put before your Lordships sufficient information to establish the point that it is reasonable that Parliament should be consulted before the event, and not after it, so that it can express its views? We all know that Parliament can express its views only when dealing with an affirmative resolution, which takes half a day in another place (and that is the amount of the delay involved) and perhaps half a day in your Lordships' House; a total of one day. That is what we are talking about—whether that is a price worth paying to consult Parliament.
  The Government are saying that that is a price not worth paying and that it is unnecessary to incur that delay. I am inviting your Lordships to take quite the opposite view and say the other place should consider on this procedure—an affirmative resolution—whether the Government have filled in these vitally important question marks reasonably; or if not, what suggestions they have to make. As we all know, there is no question but that the Government, commanding the majority which they do, will get their
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  way. The Government must, and should, get their way at the end of the day, after Parliament has been consulted. There is no difficulty about that position. There is no difficulty about the constitutional position, the procedural position or any of those matters. It is simply an issue of whether that kind of delay can be described as unnecessary.
  I hope very much that your Lordships will accept my assurance that I have tried to take out of my mind completely the fact that every opposition party in both Houses, as well as ex-Secretaries of State and distinguished ex-Chiefs of General Staff have all opposed this Bill. I have tried to take out of my mind the point that when this very amendment was being considered in another place not one Member spoke in support of the amendment against this amendment and in support of the Government. Certainly they voted in support of it, and the noble and learned Lord who sits on the Woolsack will not be surprised at that. He has described this pattern of voting in language which I would not attempt to improve upon.
  The issue is not whether the Government can get their majority at the right time in another place; of course they can. And once they have voted on a Motion of this kind, we in this House—and certainly we on these Benches, for whom I speak with authority—would not dream of opposing by a vote that which the other place has decided, because we would then be challenging the other House in such a way that it could not think again. That is not the function of your Lordships' House.
  We are absolutely on safe ground in respect of the constitutional, procedural, and other considerations. We are not damaging the Bill in a central way at all. We are asking the Government to reconsider and to do what everybody who has spoken has asked them to do: please consult Parliament before, and not after, the event.
  Baroness Vickers: My Lords, I shall say only a few words. I had down two amendments concerning this proposition in Committee and at Report stage. It is a very great experiment after 300 years completely to change the lives of the people who are working in these factories. I should like to say that they have done a wonderful job. Now they are not going to be civil servants and they will have a different type of master. They will have a different type of life, and we still do not know what pensions they are to receive. We have a rough idea, but we do not know. I really think it is essential to receive reports from the Ministry and I should like to suggest that if we cannot get this amendment through, we put down Unstarred Questions from time to time in order to get the information we require.
  I hope that we shall stick by our feelings on this matter, even if this Bill goes through. I have worked in these factories and have some knowledge of what is done there and what has been done there in the past. When I was working in them I did not always feel that the arrangements were satisfactory. Conditions may become a little better now that the factories will be subject to different health and safety Acts. But if we are going to let this Bill go through, we want to be quite sure that certain matters are going to be put right and

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  that the people working there will have a better life and a better living.
  I support what has been said by the noble Lord who spoke for the Opposition and I wish to say that I would be prepared to put down an Unstarred Question so that we can learn more about what is happening in these factories in the future.
  3.27 p.m.
  Lord Trefgarne: My Lords, the other place has given as its reason for disagreeing with this amendment that,
  "it could result in unnecessary delay in transferring property, rights and liabilities in accordance with the Act".
  The delay would clearly be appreciable. Arrangements for the necessary debates could not be made until all work on the scheme had been completed, since it is implicit in the amendment that the scheme must be approved in the form in which it will ultimately be made.
  The scheme would need to be laid before Parliament well before the debates were to take place, in order to allow honourable Members in another place, and your Lordships here, time to consider it. The Government would have to take into account the possibility that one House, or both Houses, might withhold approval to the scheme. It would therefore not be possible to fix a definite date for vesting day until both debates had been held. On the other hand, the need to plan ahead would require the setting of a provisional date, with the hope of being able to keep to it. Probably, in order to cater for all eventualities, delay between the finalising of the scheme and vesting day would have to be in the order of months rather than weeks.
  There is much to be done to weld the existing organisation into a coherent, independent, commercial entity. No real progress can be made in this direction until total independence is achieved by vesting day. The sooner the company can get going, the sooner it can start to build on the success of the ROF trading fund and begin to achieve some of the aims we would expect of it. Unnecessary delay in reaching vesting day would incur the risk of diluting the enthusiasm which now exists within management, lowering the morale of both management and workforce, and jeopardising early attainment of the Government's objectives.
  That risk should be incurred only for sound reasons. Such reasons are, of course, said to exist in this case. The Government are said to be abusing the democratic process in not subjecting the scheme to parliamentary scrutiny and approval before it comes into effect. I find that a curious charge after the numerous debates we have held, both in your Lordships' House and in the other place; the Questions which have been put to us and answered; and the explanations we have given of our future intentions. It really is not credible to suggest that the Government's intentions have not been revealed, or subjected to detailed examination.
  Much of the criticism that is made of the Government in this respect comes, I think, from a mistaken idea of what the scheme will contain. It was described in the other place by my right honourable friend the Minister of State for Defence Procurement as a conveyancing document. This description was
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  somewhat scathingly received there by the Opposition. But the fact of the matter is that it is a conveyancing document. It is a mechanism for transferring property from the Secretary of State to the new company more easily and more conveniently than the usual legal instruments. I wonder whether, if the property were being transferred in the normal way, there would be the same wish to approve the various deeds of conveyance and leases, drawn up by the lawyers, before they came into effect. I very much doubt it.
  The truth is that the scheme will contain little or nothing concerning the matters in which Parliament has, quite rightly, expressed the greatest interest. The scheme will be a very limited document consisting mostly of lists of property and other assets to be transferred, stating the number of shares which are to be issued in consideration of the transfer and setting out the conditions on which certain property, most notably intellectual property rights, is to be held by the new company. There will be nothing in it which we have not already made abundantly clear to Parliament on many different occasions, and Parliament's knowledge of the issues will not be advanced in any significant degree by the scheme when it is published.
  The matters of greatest concern to Parliament, such as the value of the new company, the details of the new company pensions schemes, the policies of the Ministry of Defence towards the new company and the plans which the Government have for privatisation will be nowhere mentioned in the scheme. But these, and other matters like them, are the things in which Parliament is really interested. A debate purporting to be on the scheme would inevitably turn into a general debate on these topics. But it is the Government's case that we have had sufficient debate of that kind already and that there is no advantage in discussing the matter further which is sufficient to compensate for the damage which additional delay would cause to the company and the implementation of the Government's plans. The Government are not abusing the Parliamentary process. They are trying to determine the balance of convenience between competing courses of action. It is our belief that Parliament has had, and will have in the future as my noble friend Lady Vickers so rightly pointed out, all the information it has wanted concerning our intentions.
  We shall lay the scheme before Parliament. We shall publish the opening balance sheet of the new company. We shall make statements of our intentions at the appropriate time. All this will enable Parliament to ask questions and make points about what we are doing and intend to do. I ask your Lordships to be content to leave it at that, and not introduce the prospect of additional and unnecessary delay in reaching vesting day by insisting on this amendment to the Bill.
  Lord Diamond: My Lords, before the noble Lord sits down, can he add, in fairness to the House, what he means when he says that the scheme will be put before Parliament? When will it be put before Parliament?
  Lord Trefgarne: My Lords, we have had a long debate on these and related matters. Perhaps I could say in parenthesis that the articles of association, in which I know the noble Lord, Lord Stoddart, is

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  particularly interested, have now been placed in the Library of your Lordships' House, save for one particular clause which will have to be added at a later date and which is not appropriate at the present time. The time at which we were proposing to publish the scheme is immediately after vesting day, and I hope that the noble Lord will regard that as satisfactory.
  Lord Campbell of Alloway: My Lords, before my noble friend sits down, may I ask whether he can confirm, as much has been said about the constitutional position, that the constitutional position is the same for enabling Bills, whether they have a large "E" or a small "e", as for all other Bills, and whether he can assure the House that there is no constitutional impropriety involved?
  Lord Trefgarne: My Lords, I hasten to give my noble friend the assurance for which he asks. Of course there is no constitutional impropriety in this Bill. The Bill has now passed effectively through both Houses save for the small remaining matter we are discussing today. Therefore, I hope that in due course it will become the law of the land.
  Lord Graham of Edmonton: My Lords, I begin by saying to the noble Lord who has just spoken that there is no challenge from this side that there is any constitutional impropriety in what the Government are doing; and we were at pains to point out that there is no constitutional impropriety in what we are seeking to do. In other words, we are saying to the Government that in this debate we have not sought to argue the, merits. We have argued, and we have lost. The parliamentary arithmetic stands up pretty well in both Houses. We are not arguing about the principle: that has gone. We are arguing about the opportunity which the Government have, and which they decline to take, of taking Parliament into their confidence, treating it with a little more respect and simply saying to us, "Although we are intending to do something, before we do so this is what we intend to do."
  The Minister says "within one month", and the Bill says, in Clause 3(9):
  "Within the period of one month beginning with the day on which a scheme comes into force".
  In other words, we are going to be told within one month after a scheme comes into force. It might be one week, two weeks or three weeks, or it might be four weeks. We are saying to the Government that that is a tiny price to pay in order to keep the confidence and satisfaction of the House on their side.
  I am grateful to the noble Lord, Lord Diamond, who quite properly stressed that there is no challenge to the principle of the Bill. He pointed out that it is an enabling Bill with enormous powers. We are not talking about the transfer of fish or fruit, or anything like that: we are talking about the transfer of assets which at the moment form part of the national security of the state. I appreciate that the Minister has told us that safeguards have been written in, but this is an enormous transfer of assets of what I say are a unique kind.
  The Minister alluded to the information that has been given over the period by his good self and his
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  parliamentary colleagues in another place. I have not argued that from the time the Bill received its First Reading in another place until now there has not been adequate time for debate. The problem of those who asked the questions is that they received promises, promises and more promises as to when they were going to see a little more flesh on the bones, but we have not seen it. I remember that it was nine or 10 days ago that my noble friend Lord Stoddart asked if he could sight something, and he was told that it was available. We are told it is available now. It might have been available for a longer period than that. I do not believe that my noble friend Lord Stoddart has had an opportunity to see that document.
  I take very kindly the reference by the noble Baroness, Lady Vickers, that if the Government do not accept our amendment there are other legitimate devices that we can use. Of course there are, but we ought not to adopt guerilla warfare tactics in order to get what Parliament ought to be given freely. We ought to be able to say to the Government, "Trust us. Trust us and give us the information." I think that the noble Lord, Lord Diamond, hit the nail right on the head. The Government are literally making it up, not as they go along, because there are problems, but they are not yet in a position to produce the finished goods. We are saying, "Right; but when you do produce the finished goods simply consult us before going on".
  I am grateful for the support that we on these Benches have received all round the House, not only today but at other stages of the Bill. I beg the Minister seriously to recognise the deep feelings which have been expressed and to reflect on the enormity of the actions which are contained in the enabling powers. The Government intend to take those powers, and they are entitled to, but it will take out of the public domain an organisation—the Royal Ordnance Factories—which has served the nation faithfully and well for more than 400 years.
  All that we are asking for in this simple amendment is an opportunity for debate in both Houses of Parliament before that dissolution of public assets takes effect. The noble Lord, Lord Diamond, was absolutely right. The price that we are asking the Government to pay is one three-hour debate in each House. Surely that is a small request. What have the Government to fear? Why incur the wrath of the workforce and damage the Government's democratic integrity for such a tiny price? Why imply that neither House of Parliament, nor any of their Members, is capable of offering suggestions to improve the details of the scheme by not giving them the opportunity to comment before this change comes into effect?
  Earlier this year the Grant to Redundant Churches Fund Order 1984 was approved by Parliament and this Government. That is subject to the affirmative procedures which I seek in this amendment. I cannot believe that it is right to treat our ordnance factories with less dignity and respect than redundant churches. I ask the House to support the Motion.
  3.41 p.m.
  On Question, Whether this House doth insist on their amendment to which the Commons have disagreed?
  Their Lordships divided: Contents, 104; Not-Contents, 130.

  DIVISION NO. 2

  CONTENTS

  Ailesbury, M.

  Carr of Hadley, L.

  Airey of Abingdon, B.

  Cathcart, E.

  Alexander of Tunis, E.

  Chelwood, L.

  Allen of Abbeydale, L.

  Constantine of Stanmore, L.

  Allerton, L.

  Cork and Orrery, E.

  Avon, E.

  Cornwallis, L.

  Bauer, L.

  Cottesloe, L.

  Belhaven and Stenton, L.

  Craigavon, V.

  Bellwin, L.

  Craigmyle, L.

  Belstead, L.

  Croft, L.

  Berkeley, B.

  Daventry, V.

  Bessborough, E.

  Davidson, V.

  Boardman, L.

  De Freyne, L.

  470

  Boothby, L.

  De La Warr, E.

  Boyd-Carpenter, L.

  Denham, L. [Teller.]

  Brabazon of Tara, L.

  Dilhorne, V.

  Bridgeman, V.

  Dormer, L.

  Broxbourne, L.

  Dudley, E.

  Bruce-Gardyne, L.

  Effingham, E.

  Buckinghamshire, E.

  Ellenborough, L.

  Caithness, E.

  Elliot of Harwood, B.

  Cameron of Lochbroom, L.

  Elton, L.

  Campbell of Alloway, L.

  Energlyn, L.

  Campbell of Croy, L.

  Enniskillen, E.

  Carnegy of Lour, B.

  Faithfull, B.

  Fanshawe of Richmond, L.

  Middleton, L.

  Ferrier, L.

  Molson, L.

  Fortescue, E.

  Monk Bretton, L.

  Fraser of Kilmorack, L.

  Montgomery of Alamein, V.

  Gardner of Parkes. B.

  Mottistone, L.

  Glanusk, L.

  Moyne, L.

  Glenarthur, L.

  Munster, E.

  Gormanston, V.

  Murton of Lindisfarne, L.

  Gowrie, E.

  Nugent of Guildford, L.

  Gray of Contin, L.

  Orkney, E.

  Gridley, L.

  Pender, L.

  Hailsham of Saint Marylebone, L.

  Peyton of Yeovil, L.

  Polwarth, L.

  Halsbury, E.

  Porritt, L.

  Harmar-Nicholls, L.

  Renton, L.

  Harvey of Prestbury, L.

  Renwick, L.

  Harvington, L.

  Rochdale, V.

  Henley, L.

  Rodney, L.

  Home of the Hirsel, L.

  Rotherwick, L.

  Hornsby-Smith, B.

  Sandford, L.

  Hunter of Newington, L.

  Sandys, L.

  Hylton-Foster, B.

  Selborne, E.

  Ilchester, E.

  Sharples, B.

  Inglewood, L.

  Skelmersdale, L.

  Ingrow, L.

  Soames, L.

  Ironside, L.

  Somers, L.

  Kaberry of Adel, L.

  Southborough, L.

  Kilmany, L.

  Spens, L.

  Kimberley, E.

  Stamp, L.

  Kinnaird, L.

  Stodart of Leaston, L.

  Lane-Fox, B.

  Swinton, E. [Teller.]

  Lauderdale, E.

  Terrington, L.

  Lindsey and Abingdon, E.

  Teviot, L.

  Lloyd-George of Dwyfor, E.

  Thomas of Swynnerton, L.

  Long, V.

  Todd, L.

  Lucas of Chilworth, L.

  Tranmire, L.

  Luke, L.

  Trefgarne, L.

  Lyell, L.

  Trumpington, B.

  McAlpine of Moffat, L.

  Ullswater, V.

  McAlpine of West Green, L.

  Vaux of Harrowden, L.

  McFadzean, L.

  Vickers, B.

  Mancroft, L.

  Vivian, L.

  Margadale, L.

  Ward of Witley, V.

  Marley, L.

  Westbury, L.

  Marshall of Leeds, L.

  Whitelaw, V.

  Maude of Stratford-upon-Avon, L.

  Wynford, L.

  Young, B.

  Merrivale, L.

  Young of Graffham, L.

  Mersey, V.

  NOT-CONTENTS

  Airedale, L.

  Falkender, B.

  Amherst, E.

  Fisher of Rednal, B.

  Ardwick, L.

  Fitt, L.

  Attlee, E.

  Gallacher, L.

  Aylestone, L.

  Galpern, L.

  Banks, L.

  Gladwyn, L.

  Barnett, L.

  Glenamara, L.

  Beswick, L.

  Gosford, E.

  Birk, B.

  Graham of Edmonton, L.

  Blyton, L.

  Gregson, L.

  Boston of Faversham, L.

  Grey, E.

  Bottomley, L.

  Grimond, L.

  Briginshaw, L.

  Hall, V.

  Brockway, L.

  Hampton, L.

  Brooks of Tremorfa, L.

  Hanworth, V.

  Bruce of Donington, L.

  Hatch of Lusby, L.

  Burton of Coventry, B.

  Hayter, L.

  Caradon, L.

  Hunt, L.

  Carmichael of Kelvingrove, L.

  Irving of Dartford, L.

  471

  Cledwyn of Penrhos, L.

  Jacques, L.

  Collison, L.

  Jeger, B.

  David. B. [Teller.]

  Jenkins of Putney, L.

  Davies of Leek, L.

  John-Mackie, L.

  Dean of Beswick, L.

  Kaldor, L.

  Diamond, L.

  Kilmarnock, L.

  Donaldson of Kingsbridge, L.

  Kirkhill, L.

  Donnet of Balgay. L.

  Kissin, L.

  Elwyn-Jones. L.

  Lawrence, L.

  Ennals, L.

  Leatherland, L.

  Ewart-Biggs, B.

  Llewelyn-Davies of Hastoe. B.

  Ezra, L.

  Lloyd of Kilgerran, L.

  Lockwood, B.

  Shackleton, L.

  Lovell-Davis, L.

  Shepherd, L.

  McIntosh of Haringey, L.

  Shinwell, L.

  McNair. L.

  Stallard, L.

  Mishcon, L.

  Stedman, B.

  Molloy. L.

  Stewart of Fulham, L.

  Monson, L.

  Stoddart of Swindon, L.

  Morris of Grasmere, L.

  Stabolgi, L.

  Mulley. L.

  Taylor of Blackburn, L.

  Nicol. B.

  Taylor of Mansfield, L.

  Northfield. L.

  Tordoff, L.

  Ogmore, L.

  Underhill, L.

  Oram. L.

  Wallace of Coslany, L.

  Peart, L.

  Walston, L.

  Ponsonbv of Shulbrede, L. [Teller.]

  Wedderburn of Charlton, L.

  Wells-Pestell, L.

  Raglan, L.

  Whaddon, L.

  Rhodes, L.

  White, B.

  Rochester, L.

  Wigoder, L.

  Ross of Marnock, L.

  Willis, L.

  Sainsbury, L.

  Winchilsea and Nottingham, E.

  Scanlon, L.

  Seear, B.

  Winstanley, L.

  Serota, B.

  Wootton of Abinger, B.

  On Question, Motion agreed to.

  Resolved in the negative, and Motion disagreed to accordingly.

Ethiopia: Famine Relief
3.50 p.m.
Lord Trefgarne: My Lords, with your Lordships' permission, I should now like to repeat a Statement being made in the other place by my right honourable friend the Minister for Overseas Development about famine relief for Ethiopia. The Statement is as follows:
"The House knows of the very deep concern felt throughout the country at the effects of famine in Ethiopia—and indeed in other countries. Last Wednesday my right honourable and learned friend the Secretary of State for Foreign and Commonwealth Affairs announced three important further measures designed to help tackle the problem. These follow the substantial steps that we and the European Community were already taking—almost £10 million from the British aid programme in the last 18 months, including our share of over £22 million from the European Community.
"The new measures were: first, the despatch by the United Kingdom of a further 6,000 tonnes of

455
food aid; second, the allocation of a further £5 million for spending on famine relief in Ethiopia and other African countries; and, third, a pledge to press the European Community for additional action.
"The House will wish me to report on the action we have put in hand.
"On Saturday night, my noble friend the Parliamentary Under-Secretary of State for Defence, Lord Trefgarne, and I met in London Commissioner Dawit, head of the Ethiopian Relief and Rehabilitation Commission.
"I informed him of the additional 6,000 tonnes of grain, which will be shipped within the next few days. We discussed ways of speeding up the transport and distribution of supplies through the port. I agreed that we should draw on our £5 million offer to provide dump trucks to help with unloading at the port of Assab and Land Rovers and spare parts for them to help with distribution. I also agreed to supply water drilling rigs and medical requirements. In addition, we told him of our offer of a Royal Air Force detachment of two Hercules aircraft and the appropriate support to undertake internal relief operations within the famine areas. There was some discussion about this offer, but I can tell the House that it has been agreed that we will make the detachment available for three months. The initial deployment will involve several additional flights to Ethiopia to ensure that our detachment is self-sufficient and fully equipped for the task. So far as we are concerned, the first two aircraft are ready to leave tomorrow. Two RAF officers have now arrived in Addis Ababa to discuss urgently the practical arrangements.
"I am sure that these aircraft will make a very valuable contribution to distributing food where it is most needed.
"I have also agreed to make available two further civil aircraft—one of them a Hercules—to support the voluntary agencies, who are doing such a fine job in Ethiopia. Both will take out relief supplies and the Hercules will stay in Ethiopia for some weeks for use by the International Committee of the Red Cross. We are also paying for some of the supplies needed. I had this morning a constructive discussion of priorities and implementation with the Disasters Emergency Committee led by Lord Hunt.
"All this represents a very significant British contribution. In addition, the European Community is taking valuable action.
"So far this year the European Community has already made direct allocations of 53,000 tonnes of cereals and 3,000 tonnes of other products to Ethiopia. But the needs of Ethiopia are so great that we have pressed the Community to do more. Following my right honourable friend the Prime Minister's message to Dr. FitzGerald, President of the European Council, the Council's Budget Committeee has approved and the European Parliament is to consider today a special programme of food and transport assistance worth £20 million, of which the British share would be about £4.5 million.
456
"The needs of Ethiopia and other parts of drought-stricken Africa will be further discussed by Community Foreign Ministers in Ireland at the end of the week and by the Development Council—which I shall attend—in Brussels next Tuesday.
"We have been active in other international organisations. The Committee on Food Aid Policies and Programmes (the CFA), the supervisory body of the World Food Programme, is currently meeting in Rome. On a British initiative the meeting is giving priority to the needs of Ethiopia.
"At the same time, other Western donors have offered increased assistance.
"The grave problem of drought in Ethiopia and other parts of Africa cannot be solved overnight or by one massive airlift. But the measures we have announced are valuable in themselves and have given an important lead."
My Lords, that concludes the Statement.
Lord Oram: My Lord, I should first like to thank the noble Lord for repeating the Statement made in another place. On behalf of my noble friends I wish to express satisfaction that arrangements have now been made for providing air transport to help with this rescue operation in Ethiopia.
Should I take it from the Statement that the difficulties that were first encountered with the Ethiopian representative, in respect of the air transport, have now been overcome?
We appreciate the fact that the Government have now made an increased offer of aid in response to the very great public concern that has arisen about this tragic situation. However, are there not two important lessons to be derived from the experience of the last few days? The first is that the existence of voluntary agencies, such as the Save the Children Fund, Oxfam and War on Want, is a tremendous asset in these situations, and that they are therefore worthy of the fullest backing by both the public and the Government. Indeed, not infrequently they lead where governments follow.
Secondly, should we not realise that this is not a crisis which has suddenly come upon us? Warnings have been given by the voluntary agencies over many months. I recall that in a debate which I initiated in your Lordships' House some 18 months ago my noble friend the Leader of the Opposition gave a specific and urgent warning of the developing crisis and urged that appropriate action should then be taken.
I welcome what the Statement says about initiatives being taken within the European Community and in other international bodies. However, should not those bodies not only be concerned with measures to meet the present emergency situation, but also be planning for the long term, so as to avoid repetitions of this tragedy time after time in the months and years ahead? It should not be a matter of a month's effort; it should be a long-term and continuing effort.
Lord Walston: My Lords, I, too, am grateful to the noble Lord for repeating the statement and to the Government for their response to the public's demand

457
for more help to famine-stricken Ethiopia. It certainly is welcome that they have now worked generously and fast in giving this aid. I hope I shall not appear to be carping if I express regret that the Government have taken so long to respond to the requests which have been put to them over many months, as I understand it.
I am glad that the noble Lord paid tribute to the voluntary agencies. In that connection I should like to ask him when it was that the Government first received warnings from any of the voluntary agencies, such as Oxfam, Christian Aid, and War on Want, as to the state of affairs which had already arisen many months earlier in Ethiopia and which inevitably was going to escalate at a terrifying rate, as we have now seen.
Secondly, would not the Minister agree that valuable though this help is—in particular not only the supply of grain, but also the transport to move the grain to where it is needed—the amount that is given will very soon be exhausted and in the months ahead there will be a need for yet more aid, especially in the supply of grain?
Would the Minister not also agree with this? Both this country and the Community as a whole have now enjoyed the heaviest cereal harvest that they have ever reaped, so that they now have a surplus running into many millions of tonnes. Are the Government thinking in terms of making some of this available to meet the continuing needs of both Ethiopia and other countries, either directly from this country or preferably through the Community?
Finally, may I remind the noble Lord—if, indeed, he needs reminding—that this is not just one urgent short-term need? No matter what happens to the weather, no matter what happens to the civil war and no matter what happens to the internal government in Ethiopia, the need will inevitably exist for at least another 12 and probably 18 months, and thereafter there will be need for a different form of aid through different forms of voluntary agency, such as, for example, Voluntary Service Overseas and the Commonwealth Development Corporation, which the noble Lord, through his handling of these matters, knows well. Will the Government consider increasing the funds available for those two organisations so as, in the long term, to prevent a recurrence of the types of famine we are now hearing about?
Lord Trefgarne: My Lords, I am obliged to both noble Lords. I can confirm to the noble Lord, Lord Oram, that some initial problems in connection with the aircraft have been overcome and that our offer has been gratefully accepted. As for the voluntary agencies, I wholly agree with the noble Lord, Lord Oram, that they play an invaluable role in situations of this sort. Of course, they often have access to these places and to information to a much greater extent than governments. That is why we support them as much as we can whenever we can.
The noble Lord, Lord Oram, said that this was not a sudden crisis but that it had been with us for some considerable time. That was also much in the mind of the noble Lord, Lord Walston. It is indeed the case that we have for some time been very anxious about
458
the situation in Ethiopia. But, contrary to misleading reports, we have been helping that country for a number of years. While it is true that we have only a very limited development programme there, British aid from 1973 to 1981 averaged over £2 million a year, rising in 1982 to £5·6 million, of which £5·2 million was given as food aid in response to the effects of the drought, then in its early stages.
Over the past two years British aid to Ethiopia has been worth more than £13 million, including our share of European Community support. We are not making a belated response to the drought: we have done much already. Indeed, as recently as this last July we cancelled Ethiopia's aid debts to Britain, which at that time were worth more than £2·5 million. I think it is right to say that this is, indeed, a long-term problem which will need long-term solutions. But, on the other hand, there is clearly an immediate short-term problem as well, and that is why we have moved as we have.
Lord Chelwood: My Lords, a great deal of attention has been focused on the large-scale tragedy in Ethiopia during the last week or 10 days. Indeed, my noble friend's Statement has been almost entirely about the starvation and near starvation on a large scale in Ethiopia. However, as he said three times in his Statement, similar tragedies are being experienced in other countries in Africa, without looking beyond that continent. Can my noble friend assure the House that, so far as this is possible to arrange, there is a fair division of aid given from voluntary and governmental sources among all those countries in Africa where there is starvation or near starvation on a large scale?
Lord Trefgarne: My Lords, we shall certainly do our best to assist in situations like those to which my noble friend refers. That is why my right honourable friend said in his earlier statement last week that the £5 million for spending on famine relief would be available in Ethiopia and, indeed, in other African countries, although I must say that in present circumstances I anticipate that the lion's share will go to Ethiopia.
Baroness Hylton-Foster: My Lords, is the noble Lord aware that the British Red Cross is very grateful to the Government for supplying them with a Hercules aircraft which will enable them to take to the disaster area vehicles, shelters, tents and blankets? Will the noble Lord also agree how fortunate we are to be working with a very efficient and splendid Ethiopian Red Cross Society, which is working with the International Committee of the Red Cross, with the League of Red Cross Societies and with our own society; which is itself supplying nurses and doctors to look after the sick; and which is also very busy helping to feed at the feeding centres the pregnant women and nursing mothers, who represent over 50 per cent. of the population? Is the noble Lord aware that, because of the overcrowding, there is still a very terrible problem there?
Lord Trefgarne: My Lords, I am sure that the noble Baroness is right. The Government were very pleased to be able to assist the International Committee of the Red Cross in the way that we did. We have provided

459
for them, or paid for, a civil Hercules aircraft. That is not, of course, one of the RAF ones.
Lord Somers: My Lords, will the noble Lord observe that while the difficulties which have been set up by the Ethiopian Marxist Government have now been largely overcome, many of us who wished to give a contribution to some of the voluntary organisations have been told that it was no use because it simply was not getting there? I do not know whether that is no longer the case.
Lord Trefgarne: My Lords, there are really two separate aspects to the present problem. The first is to ensure that there are sufficient supplies of food in particular available in or near Ethiopia. The second is to distribute those supplies within that country. Frankly, the quantities of grain either available or shortly to arrive in Ethiopia are quite considerable. The principal problem, now, I think, is to ensure effective distribution throughout that country.
Lord Maude of Stratford-upon-Avon: My Lords, while no one would doubt the need for considerable quantities of food aid to Ethiopia and other countries in Africa and elsewhere, is my noble friend aware that this is a problem that will be with us year after year after year, and possibly over an increasing area of Africa, unless something is done effectively about short-sighted methods of agriculture and inadequate policies of aforestation and irrigation? Will he say what the international agencies are doing to grapple seriously with this problem in the long term?
Lord Trefgarne: My Lords, I think that my noble friend has probably put his finger on the essence of this problem. The long-term solution is certainly, I think, in the direction that my noble friend points. We are therefore working vigorously with the agencies concerned to try to see that that can happen.
Lord John-Mackie: My Lords, further to the point made by the noble Lord, Lord Maude, about there being a short-term problem within a long-term one, is the Minister aware that the noble Lord, Lord Walston, mentioned a period of 12 to 18 months, while I would put the long-term problem at 12 to 18 years? The period to which the noble Lord, Lord Maude, referred, I would put nearer to 50 years. When you consider that it took us from 1935 to the present day to achieve a 150 per cent. increase in our food production, it would take just about as long, if not longer, bearing in mind the conditions in these areas. So we have really three problems: the short-term, the 18-month one of feeding these hungry people: the long-term one of meeting the needs of 400 million people in the world who are below the level of proper nutrition; and then the very long-term one. I recall that when I first came into this House there was a debate on this subject when the noble Lord, Lord Renton, made this very point. It has taken us a long time to take real cognisance of the point.
Lord Trefgarne: My Lords, the noble Lord is, I think, quite right to point to the long-term nature of the problem. The problems arise from the difficult
460
terrain in that country, poverty, a civil war, a growing population which, in recent years, has increased very dramatically and, I have to say, a collectivised system of agriculture, introduced some years ago, which has not contributed to the solution of the food shortage.
The Earl of Halsbury: My Lords, may I reinforce the questions put by the last two speakers? When I was chairman of the Meteorological Office I was aware that, for many years past, there had been climatic changes going on in the Horn of Africa and that we must expect them for the time being to continue more or less indefinitely. What sort of temporal perspective is the noble Lord applying to the situation created by these long-term climatic changes?
Lord Trefgarne: My Lords, perhaps I would need to reflect a little on the particular climatic implications of the noble Earl's question. But the fact of the matter, as the noble Earl rightly says, is that there has been a drought situation emerging in Ethiopia for 20 years at least, which I imagine goes back at least as far as the time when the noble Earl was concerned with these things.
Lord Cledwyn of Penrhos: My Lords, I warmly welcome the rapid action taken by the Government over the last few days and the action taken by the voluntary organisations. May I warmly support the proposals put by the noble Lord. Lord Maude, and my noble friend Lord John-Mackie, and press the Government to take some initiative in regard to longer-term action? Would the Minister not agree that the agencies do exist, through the United Nations and in other forms? The problem, for political and other reasons, is to get the Governments of Africa, of the countries which are affected by this constant annual drought, lasting over a very long period, to co-operate.
Does the Minister not believe that the time has come for Her Majesty's Government to take a very positive and constructive initiative through the agencies concerned? They have taken a short-term initiative now with the Committee on Food Aid Policies and Programmes. I do not ask the Minister necessarily to give an answer now, but I should like him to give an undertaking that he will discuss this matter with his right honourable friend and in due course give us some indication what initiatives he thinks might be profitable.
Lord Trefgarne: My Lords, I am grateful for the noble Lord's response to the rapid arrangements that we have been able to make in this matter. Perhaps it is worth saying that I think we are the first Western Government to announce precisely what we are doing in this tragic situation, although other governments, I believe, are close behind us. As to the long-term solution—if I may say so, so much in the minds of your Lordships at this moment—I certainly agree that we need to be looking to create an effective programme, probably through the international agencies, for the solution of this problem in the long-term; and my right honourable friend will be thinking very hard about that.

Police and Criminal Evidence Bill
Bill returned from the Commons earlier this day with certain of the Lords amendments agreed to; with certain other Lords amendments agreed to with amendments; with another Lords amendment disagreed to, but with an amendment proposed in lieu thereof: and with the remaining Lords amendment disagreed to with a reason for such disagreement; and the Commons amendments and reason were printed pursuant to Standing Order 48.
4.12 p.m.
Baroness Trumpington: My Lords, I beg to move that the Commons Reason and amendments be now considered.
Moved, That the Commons Reason and amendments be now considered.—(Baroness Trumpington.)
On Question, Motion agreed to.

Police and Criminal Evidence Bill
  COMMONS REASON FOR DISAGREEING TO ONE OF THE LORDS AMENDMENTS, COMMONS AMENDMENTS TO CERTAIN OF THE LORDS AMENDMENTS AND COMMONS AMENDMENT IN LIEU OF ONE OF THE LORDS AMENDMENTS
  [References are to Bill (225). The Commons Reason and Amendments are printed in italices.]

  LORDS AMENDMENT
  1 Clause 1, page 1, line 7, after ("constable") insert ("in uniform").
  2 The Commons disagreed to the above Amendment because it would unduly restrict the circumstances in which a constable might exercise his powers.
  Lord Elton: My Lords, I beg to move that this House doth not insist on their Amendment numbered 1, to which the Commons have disagreed for the Reason numbered 2.
  When this Bill came to your Lordships' House from another place it was received by a number of your Lordships with a good deal of suspicion. This was because a number of your Lordships believed that it gave new powers to the police, that these powers affected the civil liberties of individuals towards whom they might use those powers, and that the safeguards which the Bill provided for those liberties were not adequate to balance them.
  The whole of our lengthy and painstaking treatment of the Bill has turned again and again upon this question of balance—the balance between, on the one hand, the power of the police to protect the public from criminals, and, on the other, the need for the law to protect the fundamental liberties of those the police suspect of being criminals.
  The first debate on that central issue emerged on the first day, on this amendment of the first clause. The clause, as it came to us from another place, proposed a power for any police constable who had reasonable grounds for suspecting that a person or a vehicle was carrying stolen property, or articles intended for use in the process of acquiring other people's property by illegal means, or offensive weapons, to stop them and search them for these things. This was a power short of arrest which had been available to a number of police forces for a long time and which recent Scottish
  462
  experience had proved to be beneficial in the fight against crime.
  Nonetheless, your Lordships were suspicious of it. Noble Lords opposite were suspicious of it on the general grounds I have already mentioned and they sought to limit it beyond the limitations as to place and circumstance already in the Bill. Those limitations included the requirement that before he began the search the constable should identify himself with his name and the name of his police station; that he should tell the suspect what he was looking for and why he was looking for it; that he should inform him that a written record would be available to him, on request, of the object and grounds for the search; of the date, time and place of the search; of what, if anything, was found by the search; of any injury or damage resulting from the search; and, of course, of the identity of the person carrying out the search. The Bill also prevented a constable, in conducting a search, from requiring a person to remove more than his outer coat or gloves.
  The safeguards written into the Bill included everything recommended by the Philips Royal Commission, and more besides. Those fairly substantial safeguards were not enough to settle your Lordships' anxiety, and after 14 columns worth of debate your Lordships persuaded the House to limit the power further and substantially. This was done by an amendment moved by the noble and learned Lord, Lord Elwyn-Jones, evidently very persuasively, to the effect that the power should not be given to every police constable but only to police constables in uniform.
  That amendment was passed against the strong advice both of the Government and of the Philips Royal Commission, whose opinions on other matters noble Lords opposite regarded as being more sacrosanct. It would be fruitless for me to wheel out again all the arguments I fired off at this amendment at Committee stage. Suffice it to say that the amendment took from the police a power which both we and they believed to be of great importance to law enforcement and without which both off-duty men and policemen on duty in plain clothes must either arrest a suspect or let him go unchallenged. This has serious implications for essential planned operations such as those against shoplifting, which in some places is very serious indeed. It also means that no beat policeman can search someone he meets unexpectedly and while he is not on duty, who he believes may be on the way from a burglary, if he is not wearing his uniform, unless he first arrests him and enters upon the procedures which the Bill already lays upon him for an arrest. Noble Lords, it seems, felt that they would rather the innocent suspect was arrested, and presumably taken to the police station, than have his innocence quickly demonstrated on the street.
  Noble Lords were not reassured by the requirements already in the Bill that a constable not in uniform must produce documentary proof that he is a constable before he embarked on a search; nor were they impressed that exercise of this power in the past had not produced the general disquiet they now told us to expect. We had argued that the balance between suspect and police was evenly struck. It was very much a question of balance, and in the end your Lordships

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  decided against the Bill, the Government and Philips, and in favour of the noble and learned Lord's amendment, and did so by two votes; so the balance in that case was very nearly even.
  The practical and operational arguments against taking that course are the same today as they were on 25th October, and if I were to advance them again in the same circumstances, we ought, other things being equal, to get the same result. But other things are not equal. Two things have changed; both of them are very relevant, and I ask your Lordships to give due and considerable weight to them. The first is that we have since agreed to subject the whole of the stop and search provisions of the Bill to the operation of a code of conduct. Breach of that code will be a disciplinary offence which the courts are empowered to consider in any case involving the search. That code has been published in draft. It is available to your Lordships and I think your Lordships will agree that it does add significant weight to the safeguards of individual rights embodied in the Bill.
  Indeed, the view of noble Lords opposite may now already be that of the leading article in Thursday's Guardian newspaper—a paper which I understand is very much read by noble Lords opposite. That paper says:
  "Accepting the Lords' amendment would mean accepting that a plain clothes police officer, on duty to prevent and detect crime, must ignore deeply suspicious behaviour. That would not reduce crime. Stop and search creates apprehension because it is open to police abuse. Mindful of that, the Government has introduced a stop and search code. It is the strength and rigorous enforcement of that, rather than the Elwyn-Jones amendment, which will best serve the twin interests of justice and civil liberty".
  On those grounds alone I believe that the voting balance, so narrowly tilted one way, can now fairly be tilted the other. But it is not the only change in circumstances. There has been another. The other is that the elected House of Parliament, having considered that balance, and having taken note of that additional safeguard, has come down on the side of the Bill as drafted and against the amendment.
  I believe that the proper thing for your Lordships now to do is not to insist on your Lordships' amendment. The arguments against it when it was first moved were such as to give only the narrowest majority for it. It was agreed on the grounds that the safeguards in the Bill were inadequate—they have since been reinforced. It is the decided opinion of another place that in these new circumstances the amendment is no longer merited. I respectfully suggest that your Lordships might now agree with them.
  Moved, That this House doth not insist on their Amendment No. 1 to which the Commons have disagreed for the Reason numbered 2.—(Lord Elton.)
  Lord Elwyn-Jones: My Lords, in spite of the persuasiveness—if I may return the compliment—of the noble Minister, I invite the House to insist on your Lordships' amendment which was carried, albeit by a small majority, as the noble Lord has said, but with support from all quarters of the House. Indeed, that was quite a remarkable feature of the debate.
  This is an important amendment which, of course, is why we are endeavouring to insist upon it. As the
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  noble Lord has indicated, it arises from Clause 1 (2) of the Bill. Whereas subsection (1) of that clause, giving powers to the police, states that it may be exercised only by "a constable in uniform", subsection (2) gives the power of stop and search to a constable simpliciter and that means that he need not be in uniform when he stops a member of the public and searches him or any vehicle at any time of the day or night in any public place—or other places as well—anywhere in England and in Wales if he has reasonable grounds for suspecting that he will find stolen or prohibited articles. "Prohibited articles" are defined to include offensive weapons and of course any article in the possession of an offensive person can easily be construed as an offensive weapon. But that is the mischief that is sought to be exposed and attacked.
  We on this side of the House are not challenging the need for the police force to have the power of stop and search. What we are challenging is their power to do so in plain clothes—that is the sole and crucial issue that arises on this amendment. The value of stop and search powers in terms of protecting the community is in any case very small. Yet if the Bill as it now stands receives Royal Assent and if the practice in London—where there are a million stops and searches in a year—is extended throughout the country, it may well mean that 7 million or 8 million of our fellow citizens may be stopped or searched on the streets in many circumstances and on many occasions by plain clothes constables. The huge majority of that vast number of our fellow citizens will be innocent. They will have done nothing wrong and will have no cause to be stopped or searched. Unfortunately, a disproportionate number of those will be youths and particularly members of the ethnic minority. I think it is significant that a recent report of the Policy Studies Institute on the metropolitan police indicates that only 3 per cent. of the stops and searches carried out by the police resulted in arrests—three out of 100. We do not know in how many of that limited number of cases there were subsequent charges or how many charges resulted in conviction.
  To be stopped and searched even by a police constable in uniform is not an experience to which the public take kindly especially—as will be the case with most of them—when they are innocent. I submit that they will take even less kindly to being stopped and searched by someone of whose credentials when they are stopped they are not sure.
  The matter was put with great force by the noble Baroness, Lady Macleod, when she spoke in our debate on 26th June. Incidentally, we hope that she will be back among us again soon. I do not think that the noble Baroness will mind if I quote her. She said:
  "I am only a common citizen who might be stopped. I would prefer to be stopped by an officer in uniform. An officer in uniform carries more weight and much more authority … I am thinking specifically of the young. They need to have confidence in the people who might in the future stop and search them. It is important that the young person involved should be able to see the [constable's] number and know, because of the uniform, that there was a perfect right to stop and search them. That is followed by confidence, and in turn will be followed by communication between the two. That will do both sides a very great deal of good."—[Official Report, 26/6/84; col. 794.]
  With that I respectfully agree, and in a way it goes to the heart of what we have to decide this evening.

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  The Minister has properly and not surprisingly relied on the safeguards which exist in Clause 2 of the Bill and which he has described. But while those safeguards are good as far as they go, the difficulty will be that the constable has quickly and immediately to convey the information set out in that rather elaborate clause, and the danger is that the communicated information will come too late. The critical point which we are dealing with in the circumstances which could arise concerns the first minutes, or seconds even, after the stop and the attempted search. The probable reaction in many cases would be resistance or an attempt to escape, followed by a chase and then other succeeding charges.
  We do not think that the safeguards will create certainty in the mind of the person stopped or searched that the person seeking to stop him and search him is indeed lawfully entitled as a member of the police force to do so. At the end of the day the important question as we see it is this: will giving the power to stop and search to plain clothes police constables enhance the police service, or will it be liable to increase the friction between the general public and the police? The ordinary citizen if approached by a constable in uniform has the natural reaction to co-operate with the police, but approached by someone not in uniform the reaction may well be very different.
  If the police are to succeed in combating crime—and it is very important that they should do so for they are and should be in the front line of the action against crime—they must retain the public confidence. That is an absolute necessity in the struggle against increasing crime, and alas that is not happening. Giving power to the police in plain clothes dressed like any ordinary citizen, or perhaps even in some curious so-called ordinary clothing, to stop and search a citizen in the street, maybe at night in a secluded place, will be liable not to increase confidence in the police force but rather to diminish it. I beg to move the insistence on the amendment.
  The Lord Chancellor (Lord Hailsham of Saint Marylebone): My Lords, I am in a little difficulty. I thought that the Question was, That the House do not insist on their Amendment No. 1 to which the Commons have disagreed for Reason No. 2.1 have no brief as to what I say now, but I thought that the Question would be "Content" for the noble Lord's Motion and "Not-Content" for those who disagree with him.
  Lord Elwyn-Jones: My Lords, I took too much upon myself, perhaps not for the first time. The noble and learned Lord is of course right.
  4.31 p.m.
  Lord Donaldson of Kingsbridge: My Lords, I shall not delay the House for long. Up until now I have had the powerful support of two noble friends, one Liberal and one SDP, who are prominent criminal lawyers, and in speaking as a layman one must be very careful. There are two serious dangers here, one on each side. One of the dangers has been well described by the noble and learned Lord. It is the growing distrust of the police—and it is still growing in certain areas—felt by
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  in particular youth and ethnic youth. The second evil is the feeling of the police that without these powers they cannot do their proper job.
  These are two important points, and it is difficult to decide quickly between them. The issue is much narrower than one at first thinks. The PSI figures, which the noble and learned Lord quoted, show that out of a million stops and searches in the metropolitan area, only 5 per cent. were done by policemen in plain clothes. Therefore, whereas we are talking in general in regard to this clause about a million stops and searches in the metropolitan area, we are talking in this case of only 5 per cent. of that.
  If you are stopped by a man who is obviously a policeman, you will not react violently unless you know he has got you and you are wrong anyway. But if you are stopped by somebody who is not obviously a policeman, and if you come from the world where you strike somebody very early in an argument—and these people live in that world, make no mistake about it—you are liable to strike a plainclothes man and then be had up for resisting the police.
  I cannot quote figures, but there are many cases where this has happened, where the person has got into trouble not through refusing to be searched by a policeman, but through having an argument with somebody he thinks, or likes to think, is not a policeman. It is a difficult decision. I am advising my noble friends on these Benches to vote the way we voted last time and support the noble and learned Lord, but I think that it is a narrow decision.
  The Earl of Dudley: My Lords, perhaps I may say one word, because I feel so strongly on the subject. The noble and learned Lord, Lord Elwyn-Jones, referred to the young. I have a number of young children. We have in our midst a terrible affliction which threatens our young every day, and that is drugs. I can visualise circumstances in which it might be necessary for the fight against drugs to be undertaken by a policeman in plain clothes. It might be necessary for policemen in plain clothes to stop and search people for drugs. This seems to me to be so important that I cannot visualise that it would be right to remove this option from our police.
  Lord Elwyn-Jones: My Lords, may I briefly intervene on that point? I think I am right in saying that the drugs legislation expressly gives the police those powers in or out of uniform.
  Lord Inglewood: My Lords, I should like to say a few sentences in support of the Government. We ought not to read too much into some of the theoretical arguments which we have heard deployed in this House. We have to remember that individual policemen will be out alone, often late at night, and through the small things they may see and think unreasonable, they can be on the way to discovering quite considerable crime.
  This power is practical, so far as I can see, but it is not sinister. It is used, by tradition, in certain districts more than in others. Like many police powers, it can be abused, but where powers are abused it is the business of the supervisory grades to be sure that that

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  abuse is in fact corrected. A discreet and correct use of this power may greatly help with the normal routine duties that fall the way of every constable and stolen property is frequently recovered as a result. It is best for us to delete the words "in uniform" so that this wider power remains in the hands of the individual policemen who will proceed and who, under the proper supervision of their seniors, will be doing a most important job on the streets of the cities of this country.
  Lord Mishcon: My Lords, I, too, promise to be brief, and I shall keep my promise. In the course of his remarks to the House in support of the views expressed by another place, the noble Lord the Minister said that certain factors had supervened since the debate in your Lordships' House. With great respect, I must tell him that I have read with the greatest of care the debate which took place elsewhere, and there is no question at all but that precisely the same arguments and considerations that came before your Lordships came before that place and no additional factors were there in that argument whatsoever.
  To say, for example, that there is a code of practice and that that code of practice now forms part of a Bill does not affect in any way the matter that your Lordships have to decide today, and have decided on a previous occasion. To be practical for one moment, one can well imagine that if any police officer—and I admit that this is true both in uniform and without uniform—says against a person who has no witness whatsoever that he gave all the particulars and said all the things that he ought to have said, and there is merely a citizen complainant who will put his word against that of a police officer, it will be extremely difficult for any disciplinary board, however fair it may want to be, to find against the police officer concerned.
  There is one central issue in this matter. My noble and learned friend put it with his usual clarity and, as the noble Lord the Minister said, persuasiveness. He was right in this point. It is that the one essential thing that we have been trying to safeguard throughout our consideration of this Bill is the relationship of the police with the community. To give the power to a police officer not in uniform, be it in the open street late at night when nobody else is there, or be it in some alleyway, to come up in plain clothes and to say "I am going to stop and search you", is to invite trouble of a completely honest kind so far as any of our citizens is concerned. Does one really imagine that, without adequate lighting and in the agony, as it may be, of that moment, every citizen will be able to say, "Yes, thank you very much. I will put my glasses on, I will inspect your identity card as a police officer. I have noted the number you have been kind enough to give me and now let us proceed with the whole affair"?
  Life is not like that. What will happen is that on a number of occasions there will be resistance because the citizen concerned will not know whether he has been properly stopped. That is something that will never occur with a uniformed officer.
  There can be as much debate as your Lordships like in another place or in this place. That was the central issue we debated last time: that is the central issue now. When we start talking in terms of certainty on
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  one side or the other, I find myself in so much agreement with the noble Lord, Lord Donaldson. It was a difficult decision to take, but we took it. Reference was made to the Royal Commission. One member of the Royal Commission recommended that indeed it should be only officers in uniform.
  When your Lordships debated this matter I can remember so well the words of the noble and learned Lord, Lord Denning, who is not known these days for disagreeing with the Government. Upon that occasion he definitely said that he was swayed one way and then the other and did not quite know where to land. That, with the brain of the noble and learned Lord, Lord Denning, is saying to your Lordships that we should be very careful before we disagree with that we decided on a previous occasion.
  Lord Campbell of Alloway: My Lords, briefly may I support the Government on this? I suggest that it would be wrong to insist on this Lords' amendment. I respectfully question the assertion that power to stop and search under Clause 1 is of scant value. It obtains for places to which the public has access; this, without exercising the power of detention under Clause 2, both powers under both clauses are requisite. One example of the planned type of operation might be drugs, on which my noble friend has already spoken. Another might be using places for prostitution of the very young. There are such places to which the public has access in London.
  A watch has to be kept by a plain clothes officer, for obvious reasons. By the time a police officer in uniform has arrived the suspect one would have wished to search may have left in a vehicle which one would also have wished to search. That is a reasonable situation. It would be wrong, in the overall interest of justice, to tip the balance too far against the police in their protection of the public.
  Lord Elton: My Lords, the number of things which noble Lords opposite have said with which I agree is remarkable in this respect—that it is so different from the number of conclusions which they have reached therefrom with which I agree.
  The noble and learned Lord, Lord Elwyn-Jones, was right to say that there was support from parts of this House other than the part in which he sits. To that, I can only say that I address my arguments with the greatest of fervour to those who have strayed furthest into the lobby in which he voted on that occasion. He was wrong if it was his intention to imply that the description of an officer as a constable simpliciter in Clause 2 in any way reduces the limitations imposed by this amendment to Clause 1, upon which it depends. But he did not make much of that and nor shall I. He was right to say that those who are stopped by plain clothes policemen will, in many cases, be absolutely innocent. I wonder why therefore he insists that arrest shall be the only means of establishing that innocence in future. He is right to say that the numbers of searches are large. That is why substantial cautionary words are in Section IB of the code of practice.
  He and the noble Lord, Lord Donaldson, were both right to say that these stops and searches easily can and often have had a bad effect on the confidence of the

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  people searched. That is why we have in the code—I will read the briefest excerpt—that,
  "It is … important to ensure that the powers are used responsibly and sparingly. Over use of the powers is as likely to be harmful to police effort in the long term as misuse. It is also particularly important to ensure that any person searched must be treated courteously and considerately"—
  and not in a manner that can be mistaken as an assault in a back alley—
  "if police action is not to be resented".
  The whole of this code will guide and inform the supervisory grades, who, my noble friend Lord Inglewood rightly reminded us, will be seeing that the junior ranks behave themselves as they should in carrying out these operations.
  My noble friend Lord Dudley, rightly highlighted the importance of drugs. To the extent that these items can be searched for by constables under another Act of Parliament, this amendment is an anomaly and superfluous. But shoplifters do not usually steal drugs: muggers do not use drugs as offensive weapons against their victims: burglars do not use drugs to open other people's windows, and these are the matters that we are concerned with.
  The noble Lord, Lord Mishcon, was right to say that there was one dissentient voice on the Philips Commission, but I think he might have mentioned that there were 15 other voices altogether who agreed.
  I come in conclusion, because your Lordships wish to conclude this matter, to the question of public confidence to which the noble Lord, Lord Mishcon—persuasively as always—rightly drew your Lordships' attention. We believe that public confidence in the police is essential in a free society. We do not believe that the public can maintain confidence in a police force to which Parliament denies rights to carry out their essential functions in uniform or out. We believe that those who are stopped and searched, now that the code is in existence, will be less numerous and far less alarmed than they have been in the past. We believe that the powers we ask your Lordships to leave in this Bill are essential to good order, safety and public confidence in the police service.
  4.48 p.m.
  On Question, That this House doth not insist on their Amendment No. 1 to which the Commons have disagreed for their Reason numbered 2:
  Their Lordships divided: Contents, 145; Not- Contents 108.
  Resolved in the affirmative, and Motion agreed to accordingly.

  LORDS AMENDMENT
  3 Clause 29, page 24, line 36, at end insert—
  ("(1A) Subject to subsections (1B) and (1C) below, the police station to which an arrested person is taken under subsection (1) above shall be a designated police station.
  (1B) A constable who is working in the area covered by a police station which is not a designated police station may take an arrested person to any police station unless it appears to the constable that it may be necessary to keep the arrested person in police detention for more than six hours.
  (1C) Any constable may take an arrested person to any police station if—

  (a) either of the following conditions is satisfied—

  (i) the constable has arrested him without the assistance of any other constable and no other constable is available to assist him;

  (ii) the constable has taken him into custody from a person other than a constable without the assistance of any other constable and no other constable is available to assist him; and

  (b) it appears to the constable that he will be unable to take the arrested person to a designated police station without the arrested person injuring himself, the constable or some other person.

  (1D) If the first police station to which an arrested person is taken after his arrest is not a designated police station he shall be taken to a designated police station not more than six hours after his arrival at the first station unless he is released previously.").
  The Commons agreed to the above amendment with the following amendments:
  4 Line 5, leave out from ("constable") to ("may") in line 6 and insert ("to whom this subsection applies").
  5 Line 9, at end insert—
  ("(1BB) Subsection (1B) above applies—

  (a) to a constable who is working in a locality covered by a police station which is not a designated police station; and

  (b) to a constable belonging to a body of constables maintained by an authority other than a police authority. ").

  Lord Elton: My Lords, I beg to move that this House doth agree with the Commons in their Amendments Nos. 4 and 5 to the Lords Amendment numbered 3.1 shall also, with your Lordships' leave, be speaking at the same time to Lords Amendment No. 6 and the Commons amendment to it numbered 7.1 have before me an explanation of this small but complicated issue which these amendments resolve. The difficulty is one which was spotted only at the last moment. If your Lordships wish, I will expand on what I now say after noble Lords have shown that they wish me so to do.
  But your Lordships may be contented if I merely say that an accidental result of the way in which the Bill was drafted when it left us was that constables who are members of non-Home Office police forces were prevented from taking suspects to their own police stations when those stations were within the area served by a Home Office police station always. The intention and the effect of these amendments is to remove that anomaly so that people like the British Rail police can still handle offenders and suspects in the way that they have done without, of course, escaping the provisions of the custody officer and so on which are required if there is an arrest for a serious arrestable offence.
  Moved. That this House doth agree with the Commons in their Amendments Nos. 4 and 5 to the Lords Amendment numbered 3.—(Lord Elton.)
  Lord Elwyn-Jones: My Lords these would appear to be sensible and desirable amendments and we do not oppose them.

  LORDS AMENDMENT
  6 After Clause 33, insert the following new Clause:
  Custody officers at police stations.
  (" .—(1) One or more custody officers shall be appointed for each designated police station.
  (2) A custody officer for a designated police station shall be appointed—

  (a) by the chief officer of police for the area in which the designated police station is situated; or

  (b) by such other police officer as the chief officer of police for that area may direct.

  (3) No officer may be appointed a custody officer unless he is of at least the rank of sergeant.
  (4) An officer of any rank may perform the functions of a custody officer at a designated police station if a custody officer is not readily available to perform them.
  (5) Subject to the following provisions of this section and to section 37(2) below, none of the functions of a custody officer in relation to a person shall be performed by an officer who at the time when the function falls to be performed is involved in the investigation of an offence for which that person is in police detention at that time.
  (5A) Nothing in subsection (5) above is to be taken to prevent a custody officer—

  (a) performing any function assigned to custody officers—

  (i) by this Act; or

  (ii) by a code of practice issued under this Act;

  (b) carrying out the duty imposed on custody officers by section 37 below;

  (c) doing anything in connection with the identification of a suspect; or

  (d) doing anything under section 8 of the Road Traffic Act 1972.

  (6) Where an arrested person is taken to a police station which is not a designated police station, the functions in

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  relation to him which at a designated police station would be the functions of a custody officer shall be performed—

  (a) by an officer who is not involved in the investigation of an offence for which he is in police detention, if such an officer is readily available; and

  (b) if no such officer is readily available, by the officer who took him to the the station or any other officer.

  (7) References to a custody officer in the following provisions of this Act include references to an officer other than a custody officer who is performing the functions of a custody officer by virtue of subsection (4) or (6) above.
  (8) Where by virtue of subsection (6) above an officer who took an arrested person to a police station is to perform the functions of a custody officer in relation to him, the officer shall inform an officer who—

  (a) is attached to a designated police station; and

  (b) is of at least the rank of inspector,

  that he is to do so.
  (9) The duty imposed by subsection (8) above shall be performed as soon as it is practicable to perform it.")
  The Commons agreed to the above amendment with the following amendment:
  7 Line 45, ("officer") insert ("of a force maintained by a police authority")
  Lord Elton: My Lords, I beg formally to move that this House doth agree with the Commons in their Amendment No. 7 to the Lords Amendment numbered 6. I have already spoken to these amendments.
  Moved, That this House doth agree with the Commons in their Amendment No. 7 to the Lords Amendment No. 6.—(Lord Elton).
  Lord Mishcon: My Lords, perhaps I may copy the benevolent remarks made by my noble and learned friend and say that we do not object to these amendments. They appear to be very sensible.
  5 p.m.

  LORDS AMENDMENT
  8 After Clause 71, insert the following new Clause
  Improperly obtained evidence.
  (" .—(1) If it appears to the court in any proceedings that any evidence (other than a confession) proposed to be given by the prosecution may have been obtained improperly, the court shall not allow the evidence to be given unless—

  (a) the prosecution proves to the court beyond reasonable doubt that it was obtained lawfully and in accordance with a code of practice (where applicable) issued, approved, and in force, under Part VI of this Act; or

  (b) the court is satisfied that anything improperly done in obtaining it was of no material significance in all the circumstances of the case and ought, therefore, to be disregarded; or

  (c) the court is satisfied that the probative value of the evidence, the gravity of the offence charged, and the circumstances in which the evidence was obtained are such that the public interest in the fair administration of the criminal law requires the evidence to be given, notwithstanding that it was obtained improperly.

  (2) For the purposes of this section, evidence shall be treated as having been obtained improperly if it was obtained—

  (a) in breach of any provision of this Act or of any other enactment or rule of law; or

  (b) in excess of any power conferred by or obtained under this Act or any other enactment; or

  (c) in breach of any provision of a code of practice issued, approved, and in force under Part VI of this Act; or

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  (d) as a result of any material deception in obtaining or exercising any power under this Act or any other enactment.")

  The Commons disagreed to the above amendment, but proposed the following amendment in lieu thereof:
  9 After Clause 73, insert the following new Clause
  Exclusion of unfair evidence.
  (" .—(1) In any proceedings the court may refuse to allow evidence on which the prosecution proposes to rely to be given if it appears to the court that, having regard to all the circumstances, including the circumstances in which the evidence was obtained, the admission of the evidence would have such an adverse effect on the fairness of the proceedings that the court ought not to admit it.
  (2) Nothing in this section shall prejudice any rule of law requiring a court to exclude evidence. ")
  Lord Elton: My Lords, I beg to move that the House doth not insist on their amendment numbered 8, to which the Commons have disagreed, and doth agree with the Commons in their amendment numbered 9 in lieu thereof. At the Report stage of our proceedings on this Bill your Lordships decided to insert a new clause after what was then Clause 71. The scheme of the new clause, which was moved by the noble and learned Lord, Lord Scarman, is that a court shall not allow evidence to be given unless certain requirements are met. Once it is plausibly suggested to the court that evidence may have been obtained improperly, the court has no choice under the new clause but to apply the tests set out in the subsections.
  It is, I think, both clear and generally agreed that this provision will result in a significant increase in the numbers of trials within trials, and that they will be long and complex. But that does not seem to us to bring any benefit to the process of justice. This is one of the considerations which has led the Government to dislike the new clause.
  That is not to say that the court should never hold such a trial within a trial; nor is it to say that the court should not have a discretion to exclude unfairly obtained evidence if the admission of it would render the proceedings unfair. Nor, indeed, is it to say that the discretionary power should not be written into the statute book. In all this we are on common ground with the noble and learned Lord and his supporters, and that is why, in a moment, I shall be asking your Lordships to agree with an alternative amendment which gives this discretion to the court. I must, I think, say what are the other reasons we have for disliking what the noble and learned Lord proposed, and your Lordships agreed, and for seeking an acceptable alternative, but I shall do so only briefly because we are on familiar ground.
  Much has been made, especially in another place, of the clarity and precision of the drafting of the new clause. The court would know what to do, it was suggested in another place, because Parliament would have told it what to do. As a layman, I found myself a little surprised sitting there in the Gallery. I recalled the seven tests in the clause, and I also recalled the very trenchant things said about them by my noble and learned friend the Lord Chancellor. I should reassure those of your Lordships who feel that you have come to a play in which the understudy is in a principal role, by saying that my noble and learned friend will reply to your Lordships' remarks.

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  But my noble and learned friend the Lord Chancellor, who is about as far from being a layman as it is possible to be, pointed out that the amendment as drafted invited the court to accept a different and apparently lower standard of proof in cases involving a very grave offence from those involving trivial ones. He asked whether that was the intention of sub-section (1)(c). He asked what sort of significance the court was to take as being "material significance" in the subsection before it. He asked what standard of certainty was required by the words,
  "If it appears to the court… that any evidence … may have been obtained improperly",
  with which words the whole process of testing is initiated.
  All these seemed to me, as a layman, very pertinent questions. They are open questions, and they are questions which a court must answer before it is able to obey the direction laid on it by this clause. The fact that they are questions at all—and my right honourable friend asked them in much the same terms in another place—makes it clear that the court is invited to make a series of value judgments about matters on which the clause cannot be precise at all. They must remain in doubt, and doubt seems to arise in this clause more readily than one might wish of anything we put on the statute book.
  But of one thing I think there is no doubt. All of your Lordships, I believe, wish to see justice done, and done fairly. We want to see the guilty fairly convicted and the innocent fairly acquitted. What we do not want to see is the guilty being unfairly acquitted. Yet as my right honourable friend the Home Secretary pointed out in another place, the new clause could lead to the acquittal of a guilty man, not because of a confession that has been wrung from him by oppression, nor as the result merely of a fair trial, but simply because evidence has been obtained in breach of the law or of the codes of practice.
  Many noble Lords who supported this new clause did so, I believe, because they wished to prevent misconduct by the police. I will not now recite yet again the impressive battery of safeguards against such misconduct that we have already erected both in the Bill and in the codes of practice, because your Lordships know them all too well. The point I now wish to make is that if misconduct nevertheless does occur, then the effect of the clause is to punish not the police, but the public. Punishment is exacted from the public by turning the guilty, and perhaps dangerous, man loose among them. That does not seem to us what your Lordships would, on reflection, wish to do.
  I will not dwell longer on our objections to this new clause. They were put cogently on the record by my noble and learned friend for all to read at the last stage here. But while we discussed that amendment, my noble and learned friend had another on the Marshalled List. His proposal was to give the judges a discretion to exclude unfairly obtained evidence, and to make the basis of that exclusion the fact that not to exclude it would upset the fairness of the trial. That amendment remained on the Marshalled List here and the noble and learned Lord's amendment went, on a majority of seven votes, with the Bill and down the corridor to another place. In another place, it was
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  rather less successful and the elected House of Parliament decided against it. That, I submit to your Lordships, would alter the case even if we now offered your Lordships an amendment in exactly the terms of that which was on the Marshalled List at Report, but that is not what I propose we should do.
  In discussion at an earlier stage the noble and learned Lord, Lord Scarman, brought two points home to us with considerable force. He reminded us that the term "prejudicial", which we had used to describe the effects of evidence which might cause it to be excluded, had been invested by the courts with a much stronger meaning than was appropriate in the context, and we have removed it, thus considerably altering the impact of our proposed new clause. He also pointed out that, in all fairness, what we proposed to do for evidence gained from the accused ought to be done for evidence gained from any other person. Again, we were persuaded, and we have changed the amendment accordingly.
  The amendment as drafted gives the court discretion in criminal proceedings to refuse to allow any prosecution evidence to be given if it appears to the court that, having regard to all the circumstances, including the circumstances in which the evidence was obtained, the admission of the evidence would have such an adverse effect on the fairness of the proceedings that the court ought not to admit it. It simply allows the court to exclude evidence if the fairness of the proceedings would be adversely affected, and explicitly requires the way in which the evidence was obtained to be addressed in any such decision.
  In enlarging the effects of the clause in response to the suggestion of the noble and learned Lord, Lord Scarman, we have taken the opportunity to embrace evidence given in a confession. Our amendment is therefore intended to provide a framework for considering the fairness of admitting all forms of evidence on which the prosecution proposes to rely in any case brought before the courts.
  We believe that this amendment will achieve the fairness that all want to see established: fairness to the accused, because decisions on admissibility of evidence against him should not depend, for example, on the charge he faces; fairness to the public, because evidence will not be excluded purely for some reason lying outside the question of the guilt or innocence of the accused; and fairness to the court, because the number of disputes over the admissibility of evidence will be reduced by this amendment, so it can devote itself effectively and efficiently to its proper function—providing a fair trial for the accused.
  I believe that this amendment is preferable to the present clause. The underlying principle is there, but our proposal will also simplify procedures on the exclusion of evidence; will reject evidence whose use is unfair for whatever reason; and will include all relevant and good evidence in the best interests of justice—and that means in the best interests of us all. My Lords, I beg to move.
  Moved, That this House doth not insist on their amendment numbered 8, to which the Commons have disagreed, and doth agree with the Commons in their amendment numbered 9 in lieu thereof.—(Lord Elton.)
  Lord Scarman: My Lords, as the one who moved the amendment which found favour with your Lordships' House, I think I owe it to the House to indicate at once my position upon the Message from another place. I confess that the longer I listened to the delicate shafts directed by the noble Lord the Minister towards what I would impertinently call "my amendment" the more I became determined to change my mind and have a fight for the original amendment. I have resisted that temptation. I do so not because I share the noble Lord's dislike of your Lordships' amendment. I still think that it has great virtues and that it is preferable to that which has emerged from another place. I do so for two reasons. First, I see the virtues and qualities in the amendment which has come from another place. I believe that it has absorbed those virtues and qualities from a certain ministerial study of your Lordships' amendment. It is certainly an amendment which will provide the judges with a useful exclusionary rule where it is right and proper that evidence should be excluded, by which I mean where improperly obtained evidence should be excluded.
  Secondly, bearing in mind what has been achieved in another place—largely, I suspect, due to the imaginative and determined work of this House—I suggest that this is not an issue upon which we should enter into an argument with the elected House of Parliament. I attach great importance to the constitutional argument. Questions of principle will arise in which the constitutional argument cannot be allowed to prevail; but when the question is, as here, a choice between two proposals, each of them having merit, the fact that I may happen to think your Lordships' proposal has greater merit than that from the other House is no reason for rejecting the other House's view, they being the elected House, if there is quality in their proposal, too. I should not advise the House to insist upon the House's amendment.
  Lord Mishcon: My Lords, I am perfectly sure that the House would always want to follow the guidance of the noble and learned Lord, to which we have just listened. I therefore rise merely in order that the record should be clear. My noble and learned friend Lord Elwyn-Jones and I—I add my own name with all due humility—have studied both amendments and have listened to the arguments about the limitation of the amendment coming from another place relating to the case within a case and we do not have the slightest doubt but that the amendment which is now before the House for acceptance will widen the area of debate, argument and dispute.
  The original amendment of the noble and learned Lord laid down very clear guidelines upon which the court could act. We now have an amendment under which all the circumstances in which the evidence is obtained—broad terms, general terms—can be taken into account by the court. In those circumstances, one can imagine every advocate appearing for a defendant thinking that he has not done his duty if he has not asked the court to explore every single avenue relating both to impropriety and to the grounds of admissibility or non-admissibility. That is because the amendment which we are now considering is in such general and vague terms.
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  As I have already mentioned, I put this on record as the view which my noble and learned friend and I take about this amendment by way of tribute to the original amendment which was passed by your Lordships. However, in view of what the noble and learned Lord has said about what he rightly called his amendment, I have nothing further to add.
  Lord Elwyn-Jones: My Lords, may I be permitted merely to add a tribute to the noble and learned Lord, Lord Scarman? It was he who initiated this fascinating and, I believe, extremely important discussion which has produced the compromise result we have arrived at today. Before I sit down, may I also pay tribute to the noble and learned Lord for his initiation of the important amendment regarding racial discrimination and express our pleasure that the Government thought it right yesterday to support the decision of your Lordships' House.
  Lord Campbell of Alloway: My Lords, having opposed the amendment of the noble and learned Lord, Lord Scarman, in its various forms at various stages of the Bill, may I be allowed to associate myself with the tribute which has been paid by the noble and learned Lord, Lord Elwyn-Jones? Without the initiative of the noble and learned Lord, Lord Scarman, we could never have arrived at this broadly acceptable situation, which fuses the good aspects of both sides of the debate. I merely wish to acknowledge that fact.
  Lord Donaldson of Kingsbridge: My Lords, if the noble and learned Lord, Lord Scarman, is content with the present situation, we on these Benches will say no more about it.

Airline Competition Policy
5.16 p.m.
Baroness Burton of Coventry Baroness Burton of Coventry rose to ask Her Majesty's Government whether they will make a further statement on the White Paper Airline Competition Policy (Cmnd. 9366) prior to any debate in Parliament.
The noble Baroness said: My Lords, in rising to ask the Question which stands in my name on the Order Paper today, perhaps I may remind the House that just before we rose for the Summer Recess we were indebted to the noble Earl, Lord Kinnoull, for initiating a debate on the report of the Civil Aviation Authority which had been requested by the Government. Unfortunately, the noble Earl, Lord Kinnoull, is abroad on Parliamentary business. We all regret his absence today.
Since that debate, we have had the response of the Government to the report of the Civil Aviation Authority. Some of the decisions and judgments many people find puzzling. I have tried to word my question accordingly. Before there is any general debate in Parliament I, for one, should like to raise several points which I find, shall we say, peculiar. Following our discussion tonight, it may be that we shall better be able to discuss in full parliamentary debate the issues and judgments inevitably called into question. I am most grateful to those who are to take part in the

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debate. It is quite obvious to anybody who knows anything about aviation that we are very fortunate in the speakers we are to hear tonight. They have a depth of experience which certainly could not be exceeded in another place.
The reasons why I have raised the matter as soon as possible are these. I was unhappy and disturbed by the White Paper on Airline Competition Policy published by the Government in reply to the report of the Civil Aviation Authority. To begin with, I was most concerned about the antagonism which surfaced in the period preceding the Government's decision, even allowing for the importance of the issues involved. This antagonism of course was not the fault of the Government: but for those of us, in this House and outside, who were deeply interested but not wishing to take sides with one airline against another and who saw the problem as greater than the attitude of any individual airline, it was a most disagreeable factor.
What has worried me throughout and what, I suggest, has worried many people has been the question of the airline industry itself. My major concern is that the Government have failed to grasp this opportunity to deal with the obvious imbalance in the United Kingdom aviation market. A restructuring could have brought in a new era for the industry lasting into the next century, and it seems unlikely that such an opportunity will recur for many years to come.
A second reason for concern is that the many complex questions and problems affecting the airline industry should not be dealt with piecemeal, on an ad hoc basis, but considered as a whole. This would have been possible by a general restructuring.
Take, for instance, the following examples—all of which are pending. There is the inspector's report on the Stansted/Heathrow issue for a third London Airport: the report of the Select Committee on transport dealing with the organisation, financing and control of airports in the United Kingdom; the consultation document on air transport movements at Heathrow Airport. To these must be added, I suppose, privatisation of the British Airports Authority and its airports.
My third major concern arises from my belief that the Government have erred in the weight they have given to Treasury opinion. I want to ask whether it really is for the good of the industry, the airlines and the passengers that all such considerations should be submerged under Treasury demands for the privatisation of British Airways in the spring of next year. Would it not have been better for all concerned—and perhaps even of long-term benefit to the Treasury itself—if these matters had been considered and dealt with as a whole, deferring any privatisation date for British Airways until this had been done?
The response of the Government in the White Paper is to state in their first two paragraphs, paragraphs 14 and 15, that:
"Uncertainties affecting the privatisation of British Airways must be resolved. The Government has decided that there will be no forced reduction in British Airways' size relative to the rest of the industry".
But is this the right decision? However fair and scrupulous British Airways may be in its dealings,
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there can be no doubt that its high share of the airline market—namely, 65 per cent. of total United Kingdom airline output and 81 per cent. of output on scheduled services—presents a considerable imbalance.
In paragraph 15 the Government state:
"The independents have grown despite British Airways and should continue to be able to grow, given fair competition, provided sufficient opportunities are available to them and provided they have the resources to take advantage of these opportunities".
This same paragraph admits the imbalance in its last sentence, when it states:
"If these conditions can be met, the independents will be able to grow so as to reduce further the imbalance in the industry".
These are, of course, impeccable statements, or even judgments, but the imbalance is hereby admitted. There remains the crucial question: have we got these essential sufficient opportunities?
I, for one, have always recognised and agreed that British Airways must remain our dominant and major airline. But I confess that I find myself disturbed by the comments of Mr. Neil Forster, chairman of Air UK, that this White Paper had entirely confirmed a privatised British Airways in its overwhelmingly powerful position in the United Kingdom aviation scene. I am afraid that I accept that point of view.
If we are correct in this feeling, it means that we are to be faced with the prospect of the transition of a near public monopoly into a private monopoly. I myself regard any privatisation of British Airways in a purely pragmatic sense—in other words, what is best for all concerned, but not the transition of one type of monopoly into another.
At least I was heartened that the Government commit themselves to the principle of dual designation of many routes, but these rights (if that be the correct word) have to be negotiated with foreign governments, and that is a very different story. In the past foreign governments have been most uncooperative in granting rights to a second British airline. The noble Lord the Minister will correct me if I am wrong, but I believe I am correct in saying that BCal has licences to fly in competition with British Airways to Vienna, Milan and Helsinki but cannot do so because the countries concerned refuse to accept the dual designation principle.
There are other examples, as the Government know. Is it not true that the West German Government have blocked similar rights to Cologne, Hamburg, Hanover and Stuttgart, even though the Civil Aviation Authority has granted BCal the United Kingdom licences? Let us not run away with the idea that dual designation is an immediate panacea.
The House knows my views on Gatwick. Paragraph 17 of the White Paper mentions the development of Gatwick as a major centre of international operations. Certainly there is the space at Gatwick for this. For myself, I do not believe that Gatwick can be developed to its full potential without a second runway. I was glad to note that I was supported in this belief by the Civil Aviation Authority, when one of its senior figures stated in September that Gatwick must choose between a second runway or failing to reach its projected growth target. Of course, support from the Civil Aviation Authority may not count for much with the Government today, but many of us believe that the

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authority is both experienced and well informed, and that its professional opinions are less prejudiced than many others.
What seems to me to be so utterly wrong (and it is why I keep on about this) is that decisions of this nature—a second runway—are taken not on the merits of the matter, but on the underground politics concerning Stansted and political considerations of voters around Gatwick, rather than on the future of the airport itself. It is so much wasted breath to talk about developing Gatwick as a hub-and-spoke airport of the future and to deny what is obviously necessary. Also, it is dishonest.
I have in my hands a copy of Airport News (the journal of the British Airports Authority) for 22nd October. The banner headline across the top of the front page reads, "Don't stifle success". The opening paragraph states:
"Any move to stifle the development of London's airports could jeopardise the successful privatisation of British Airways and put at risk the future of independent carriers like British Caledonian, BAA chairman Norman Payne told a meeting of Conservative MPs during their conference at Brighton".
Mr. Payne went on to say:
"Heathrow is already close to the ceiling of 275,000 movements due to be imposed by the Government next year and the Government has recently confirmed that Gatwick will remain a single runway airport, so there will be a capacity problem ahead".
I would ask your Lordships to note those words:
"Gatwick will remain a single runway airport, so there will be a capacity problem ahead".
Arising from this refusal to look at the future of Gatwick and this inability to develop its full potential is the question of what is to be the future position of European charters. This is a highly efficient sector of British air transport to which I paid tribute in our debate of 30th July. We were then discussing the report of the Civil Aviation Authority which, in its paragraph 12, spoke of the substantial demand for charter seats which was being satisfied from Gatwick. Furthermore, it went on to say that to rule that charters should increasingly be operated from some other airport was,
"to substitute the planner's judgment for the proper working of the market place".
It strengthened this point in paragraph 18 when it stated:
"The aim of Gatwick must be the development of a strong and sustainable network of scheduled services such as the Government and this Authority has striven to build and sustain over many years. If the price of developing the scheduled service network at Gatwick was progressively to squeeze charters out, this would be to render a major disservice to a substantial category of public demand".
Under present proposals in the White Paper, this is what I believe will happen. I think that the charters will indeed be squeezed out.
I wonder how many people read the letter in The Times on 31st August from Mr. Davison, the Chairman and Chief Executive of Britannia Airways, saying that in this year, 1984, some 8 million holiday makers would benefit from the low costs and high standards offered by charter flights. I think that I would be prepared to accept the point made by Mr. Davison that this social revolution by which ordinary people have benefited over the past 20 years would not have occurred under a one-airline policy, or even under a two-airline policy. The charter business
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believes it happened because of intense competition in the private sector in a truly competitive market place.
Moving on to the problem of the regional airports, exemplified by Birmingham and Manchester, it must be obvious to all that this is difficult to solve on an ad hoc basis. Surely, and obviously, so much must depend on the decision relating to London's third airport. Are we to see Birmingham and Manchester emerge as more than what has been called tertiary international airports? In other words, might we have not a third London airport but one in the North? This is a further illustration of the Government's error in not embarking on major reconstruction embracing the many problems involved.
The point should be made that the proposals from the Civil Aviation Authority had Manchester very much in mind. In a letter to The Times on 28th August, Mr. Ray Colegate of the CAA stated that Manchester was an excellently run airport and a major hub which should be developed. The proposals of the CAA were intended to give the smaller operators the opportunity to develop their own European services at major provincial airports in competition with London. I think that few well-informed people would disagree with the fact that many of these routes are too thin to accommodate three airlines; that is, two British and one foreign.
As ever, tributes are paid to the consumer by the Government. The consumer is always in favour until he either wants something or attempts to remedy what he sees as an injustice to the consumer. Nobody knows that better than I do. So, in the White Paper a refusal to deal with the admitted imbalance in the airline industry is said to be of benefit to the consumer.
Concerning the role suggested for the Office of Fair Trading, we shall have to wait for the Government to lay the necessary statutory instruments before Parliament. Although I have the strongest admiration for the Office of Fair Trading and for its Director-General, Sir Gordon Borrie, I do not think that this is the way to deal with these problems. To begin with, cases can take a long time, inquiries can take longer still, while predatory pricing is most difficult to define. How does one distinguish between a predatory price and a tough business one? That would keep the lawyers occupied for years.
I have found all this tonight difficult. Probably others have, too. There has been a great deal of personal antagonism, as I said at the beginning of my speech, and it is not easy to avoid taking sides. We all know the old maxim that he who stands in the middle of the road gets run down. Well, on this aspect I shall just have to be run down. But making no commendations seems unappreciative—as though one did not realise all the effort put in by the industry. I do, indeed, appreciate the superhuman effort made by British Airways in pulling itself round; the superhuman effort made by British Caledonian which, over the last eight years, lost money in only one year; the superhuman effort made by the charter sector which accounts for 33 per cent. of all passenger miles flown by the independent airlines and British Airways put together.
Obviously, it is not possible to deal with all the points in the White Paper. Most of us still need time to reflect on what is suggested, and the outcome. But during the past waiting period, as we know from our

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own debates, different accountants, different airlines, different media all had different answers and interpretations to what were apparently the same facts and figures.
I submit that it is not for us to take sides—anyway, there are a great many sides. This is not just about British Airways and British Caledonian, but about all the airlines and all the passengers. Indeed, it is about the airline industry itself. My regret is that the Secretary of State, Mr. Nicholas Ridley, was unable to muster sufficient support for what I believe should have been done and what he himself wanted to do; namely, to restructure the airline industry in the United Kingdom.
5.38 p.m.
Lord Boyd-Carpenter: My Lords, the House and, I think, the civil aviation industry are both indebted, not for the first time, to the noble Baroness for raising this matter on an Unstarred Question this evening. Indeed, I hope I may be allowed to say, from some experience going back over a number of years of the work of the noble Baroness, that I know of no person who has done more for the airline traveller than the noble Baroness, going on from her indefatigable work years ago as a member of the Airline Users Committee, which I very well remember.
I hope that my noble friends on the Front Bench will not feel that this brief debate tonight is all that this House should contribute to discussion of this matter. I very much hope that in the new Session we shall have a full-scale debate on the very serious issues of policy which are raised both by the Civil Aviation Authority's report and by the Government's own equally interesting White Paper. I hope they will treat tonight's debate as what I used to call hors d'oeuvre but what now in most restaurants are referred to as starters.
There is a very big issue here, but the difference which exists between the Civil Aviation Authority and the Government seems to be one of emphasis and degree rather than of principle. As I understand it, both bodies accept the need for more competition in the British civil aviation industry. In parenthesis, those of your Lordships who use the shuttle services to Scotland will have already experienced one very substantial result of competition—the admirable breakfast now served on both airlines. In the days when only one airline operated the shuttle there was no breakfast at all. That is in every sense a very substantial argument in favour of competition, and of benefit to the airline traveller.
But, of course, the question of competition revolves around: competition between who? If one competitor is too big and too powerful, we can talk about competition until we have talked our heads off, but there will not be any, because one will dominate the market. What I think the Civil Aviation Authority was seeking to do, and what in more modest degree the Government, I think, were seeking to do, was to alter somewhat the balance between the two biggest British airlines so that competition should not be just a formula—not just a phrase—but a reality.
If one has to judge between the views of the Government and the department concerned—and in
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parenthesis may I say how glad I am that that department is once again the Department of Transport and not, as it was unfortunately for some years, the Department of Trade—and the views of the Civil Aviation Authority, your Lordships will not perhaps be wholly surprised if my bias is in favour of the Civil Aviation Authority, where I had the honour to serve for its original five formative years.
But that is not sheer prejudice. Your Lordships will be aware that in the CAA there are concentrated most of the really experienced public experts on this industry, headed by a very distinguished and able chairman, with a fine industrial record, and with its economic division headed by Mr. Ray Colegate, to whom the noble Baroness referred and whose services to the British civil aviation industry over the years have been quite extraordinarily valuable and seem to me to merit considerable recognition. Comparisons, I know, are odious, but we have there far more expertise and knowledge on this difficult and highly complicated subject than in the department, or indeed anywhere else. Therefore if your Lordships are to be called upon to exercise a judgment between the decisions of the Government and the decisions of the CAA, I think that most people would be inclined to let their views go in favour of what is the more authoritative and the more expert body.
I appreciate that the Government have been in a difficulty over this—a difficulty of timing. The fact that this report, for which they called, should come forward in the period when they are proceeding, in my view very properly, with the privatisation of British Airways obviously creates a difficulty. If the Government were to proceed drastically to reduce the scale of British Airways' operations, they must necessarily prejudice in some degree the success of the privatisation operation and therefore the benefit which the British taxpayer can expect to obtain from it. I think that there is an inherent difficulty of timing here.
Therefore it is perhaps a very difficult exercise of judgment to decide how much more it is necessary to transfer to British Caledonian and to the rest of the independent sector from British Airways in order to make sure that there are strong enough competitors with British Airways for a reality of competition to be created, not merely on the shuttle but on international routes. This is the serious issue that lies behind this whole matter. It is obviously impossible to deal with it seriously and fully on an Unstarred Question, and that is the major reason why I have already appealed to my noble friends to see to it that this matter is fully debated early in the new Session, which is, after all, a period when your Lordships' House is more likely to have time available than our experience last summer suggests it is later in the Session.
That is the major issue, but there is one immediate question that I should like to direct to my noble friend. It deals directly with competition policy. British Airways, British Caledonian and the two major American airlines recently sought to make a substantial reduction—a reduction of about £40—on transatlantic fares, and they have been forbidden by the Government so to do. It seems difficult to reconcile that with the Government's general policy in favour of competition and the market. I know that there is a fear that the ridiculous excesses of the American anti-trust

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legal system might be incensed by this; and that an equally ridiculous proceeding to that being instituted by the liquidator in the United States concerning Laker Airways might complicate the matter. But if we are really to allow reasonable commercial enterprise, of benefit to the consumer, to be restricted by those fears, it is difficult to see how one is pursuing a competitive and effective airline policy at all.
I should be particularly grateful to my noble friend if he would answer the question as to whether the suggestion made in the press that the 100,000 or so passengers who have already booked their passages across the North Atlantic on the four airlines concerned at the reduced price are to be surcharged on arrival at the airport on the instructions of the Government. If that were so, I think it would be a most inappropriate action and not least, of course, would cause great congestion, discomfort and hardship at the airport. I hope that at the outcome of this debate we may have an effective denial from my noble friend of that statement.
The only other matter that I want to raise relates to the airport facilities available. We cannot have competition, whether on internal or external routes, among British Airways, British Caledonian and the other airlines if insufficient facilities are available at the major airports which everyone wants to use. On this again I should like to press my noble friend about the proposed 275,000 movements a year restriction planned to be imposed on the operation of Heathrow. I know that this is argued on the grounds of aircraft noise and the nuisance to those who live near; but if people already live near an airport, with 275,000 movements a year—which, if my mathematics are right, which is highly unlikely, amounts to something like 750 movements a day—I cannot believe that it will make very much difference to their life if those movements go up to 350,000 or 400,000 a year. The noise, such as it is, is continuous.
There is, of course, a further fact, of which my noble friend is well aware, that because of international agreement on acceptable noise levels of aircraft from, I think, 1986 the noisier aircraft will be excluded from Heathrow, as indeed from all the other major international airports of the world. It would therefore seem, if the individual aircraft are to be quieter, and if the numbers are already to be at 275,000, that it really is a pity to cripple Britain's major airport, and the airport with more international movements than any other airport in the world, by a purely arbitrary, and it seems to me misconceived, restriction.
I was glad to hear the noble Baroness press a point which my noble friend knows that I have pressed on him so frequently as to try even his monumental patience; but it is nonsense to have mutilated the original plan for Gatwick by excluding the second runway. I have a bias here to declare. I was the Minister of Transport and Civil Aviation who, as long ago as 1954, approved and started the Gatwick project. Like that of all airports planned to be a large airport, the plan allowed for two full-scale runways. A most unfortunate undertaking was given by the then chairman of the British Airports Authority to confine it to only one. Indeed, my noble friend will recall rebuking me in his usual charming way when I said that that undertaking was given to a pressure group.
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He pointed out that it was given to the West Sussex County Council—who for the purposes of civil aviation policy are no more than a rather insignificant pressure group. My noble friend has made it clear that the Government have never accepted that they are bound by that foolish and uncalled-for undertaking.
My noble friend knows, because he answered the Question about it a few months ago, that, in the light of the planned capacity of Gatwick of 25 million movements a year, there is no other airport in the world which has anything like that number of movements and has only one runway. If therefore Gatwick is to be developed as a second hub airport—and indeed, I cannot see how effective airline competition can be developed in any other way—particularly with some restriction at Heathrow, then I hope the Government are going to be brave and point out to all concerned, including the West Sussex County Council, that the development of Gatwick Airport in a time of general depression and in employment has put wealth, full employment and great activity into the Gatwick area and that it would be a great mistake to cripple its further development.
In parenthesis, your Lordships may be interested to know, in these days of unemployment, that last year I was invited to open a housing development at Gatwick for the reason that there were more jobs available in the Gatwick area than there was accommodation for the workers to live. That is a healthy and cheering aspect of things to see in this day and age. It really would be a pity to spoil the concept because of an undertaking of this sort which does not bind the Government and which must cripple—as indeed the Civil Aviation Report indicates—the development of Gatwick.
Finally, relating to Stanstead, I should say this. I think the Stansted inquiry merits the description once given by a learned judge of certain proceedings which went beyond time and encroached upon eternity. It is 20 years since the Government of which I was a member approved the Stanstead project. We have gone from public inquiry to public inquiry, to the benefit of nobody except, if I may say so, members of my own profession who have been employed professionally almost continually over that period to take part in the inquiry. If the public system is not to be wholly discredited, it is necessary to bring the Stanstead decision to an early and effective end.
Those are simply short preliminary points on a subject which, as I have said, I hope your Lordships will have the opportunity of debating in full in the new session. However, I should like again to thank the noble Baroness for giving this opportunity at least to provide what I hope to my noble friend on the Front Bench are not unpalatable hors-d'oeuvres.
5.53 p.m.
Lord Beswick: My Lords, I should like to agree with the noble Lord, Lord Boyd-Carpenter, on two points. First, I agree with him when he says that it is quite absurd to have a one-runway limitation on a major London Airport. I accept everything that he says about that and will try to underline it. I have only one reservation. That is when he said that in his position as Minister of Transport in 1954 he agreed the two-runway principle at Gatwick. Looking back, I thought

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that when I was at the Ministry of Civil Aviation in 12950–51 we agreed that we should have a two-runway airport there.
Lord Boyd-Carpenter: My Lords, would the noble Lord allow me? I think it is the fact that the wisdom which he left behind, in that respect at any rate, remained in the Ministry when we came to the moment of decision of 1954, and I am sure we were very indebted to him.
Lord Beswick: My Lords, then my desire to agree with the noble Lord is enhanced.
The other point on which I agree with the noble Lord is when he offered his very generous words of praise to the noble Baroness, Lady Burton. The noble Baroness opened the discussion. She posed her Question in a typically informed, fair and balanced manner. I agree with the greater part, if not all, of what she has said. Certainly I agree with her that the Government's policy on civil air transport appears to revolve around, and to have to fit in with, the determination to sell off British Airways, rather than the sale (if so required) of that airline having to fit into an overall policy which includes a determination of the future of not only airlines but airports.
However, I am not going to go over the ground which the noble Baroness covered so well. I want to intervene very briefly. I intend to take a little further the question that I put forward yesterday. I then asked if British Airways was still asking that the Government should use taxpayers' money to write off all or part of British Airways' dollar loans. The answer that I was given by the noble Lord who now sits on the Front Bench was an absolute model of courtesy. However, it fell short of complete clarity. The first reply was that no recent proposals had been made. I suppose I was expected to understand from that that the possibility of payment had now been dropped. But then on further questioning it seemed that it was still a matter for decision. I want the Minister to tell me what are the principles involved in this consideration. On what criteria will a decision eventually be made?
I try to follow these matters, I hope without undue prejudice. But I find it difficult or impossible to justify any payment of my money or the money of other taxpayers as an inducement to the City to buy British Airways shares. Listening to Ministers so far, I hear them emphasise the merits of competition. While I have said on other occasions that deregulation and the open skies policy can be carried too far, and while I accept the merits of a breakfast on the Scottish shuttle, there are questions of air safety which should also come into these issues. While I accept also that there is some merit in competition, it does not necessarily improve the service, the reliability, the safety of the development of that air service.
However, the Government have stated that putting British Airways in the private sector will mean fair competition. The Minister, the noble Lord, Lord Trefgarne, said last week that British Airways will be placed,
"on the same footing as private sector airlines".
But will this be true if the privately owned British Airways are operating aircraft which have been paid for by the taxpayer? Is that fair competition? I have
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looked at this matter from the viewpoint of the present management of British Airways. I read very carefully what they have to say. It seems that they too applaud competition within the private sector. I read in last week's British Airways News that the new chief executive of British Airways was saying—and again I quote:
"Leaving the comfortable confines of Government and going into the hard world of commercial reality was probably the best thing that could ever happen to British Airways".
Those are very brave words. There are some who would agree with them. But I find it impossible to reconcile that apparently robust spirit with a plea that I and other taxpayers should pay for their aircraft before they try to compete in the hard commercial world about which they speak. Would the Minister not agree that there can be no question of any gifts to British Airways disguised as capital reconstruction if those words of the British Airways chief executive are to be taken seriously?
There is another factor involved in this. British Airways have sought, in their very expensive propaganda, to put over the idea that they are offering to help with finance any small airline that wishes to compete against them on the continental routes. But apart from the most practical questions of licences and traffic rights which would be involved in such competition, if this is a genuine offer, may I ask the noble Lord. Lord Trefgarne, who is to answer: whose money are British Airways going to use? Is it their own? Or, again, is it a matter of using taxpayers' money? I look forward to hearing what the Minister has to say in his customary straightforward replies to those questions.
There are just two other points on which I should like some information. As I have said, I believe that de-regulation can be overdone in this business of air transport. But service to the passenger can be improved, and national resources can be more fully utilised by sensible encouragement of competition. That brings me to the future of Prestwick airport. I understand that the future of Prestwick has been considered doubtful. There is an argument—I have heard it over the years—for closing down Prestwick. But there is also a very good argument for maintaining it as an international airport and also as a manufacturing focus.
I am glad to think that there is a lot of activity now going on around Prestwick—making aeroplanes—with which I was at one time associated. But my understanding is that a new service out of Prestwick could tip the balance into profitability. There is apparently an operator, the Highland Express, prepared to operate a transatlantic service from Prestwick. Can the Minister tell me if a licence for such a service would meet with Government approval and be within the policy of competition that they have announced? I hope that he will say that all unnecessary delays in coming to a decision about that will be eliminated.
Similarly, I would have thought that the application of the People's Express airline to operate from Stansted would be in keeping with this need to develop the services out of that airport. Can the Minister tell me what is happening to that application? The airports authority, the Government, or, indeed. Britain as a

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whole, are going to have problems with the forthcoming saturation of Heathrow and Gatwick. Those problems would be set back, if not eliminated, if we could have a proper runway system at Gatwick—two parallel runways at that airport. But if we cannot have that, any encouragement of services at Stansted or Prestwick would, I think, fit into a rational air transport policy. I hope that the Minister will be able to tell me that he will accede to my request that unnecessary delays are cut out.
6.3 p.m.
Lord Polwarth: My Lords, it is rather intimidating to attempt to follow the three previous speakers: a former Minister with responsibility in this field, not to mention an erstwhile aviator himself; a former chairman of the Civil Aviation Authority; and, of course, that doughtiest of champions of the travelling public, the noble Baroness, Lady Burton, to whom we are deeply indebted for raising this subject once again. I hope that your Lordships will not take it amiss if, by and large, I support practically all that they have said. I have no doubt that before the debate is over there will be an opportunity for some contrary views.
When we last debated this subject on 30th July, much of this ground was covered at great length. But the Government were inhibited in their reply because they were clearly in a dilemma, knowing that they had a tiger by the tail and not knowing quite in what direction to get rid of it. Since then, we have had the White Paper which we are talking about. I must say that it seems to me that it is a smack in the face for the Civil Aviation Authority and nearly an insult to the Minister who commissioned it and who, I am sure, must have fought hard to get it accepted. It is sad, I think, that when such an experienced body as the Civil Aviation Authority came up with a new pattern of unblemished pedigree in direct descent from the Edwards report of 1969, the Government chose finally merely to throw a few morsels to the independents rather than to seize a great opportunity to increase competition in the interests of the traveller.
Admittedly, there have been some switches. British Caledonian have been given a swap of some currently profitable routes in place of some currently unprofitable ones. This will, indeed, help their profits to the tune of some £18 million a year. We have this remarkable arrangement by which British Airways are supposed to shell out £450,000 to anyone wanting to open up a route from a provincial airport, whether or not in competition with them. It raises some most intriguing possibilities. The noble Lord, Lord Beswick, has referred to this. We shall watch with great interest to see how it evolves. However, these are very small steps towards giving the independents a broad and strong enough base to compete with what remains an immensely powerful organisation, one soon to be freed of some of the restraints inherent in Government ownership.
It is this question of the breadth of base and the strength of base that is much more important than any question of direct competition on individual routes. David has fought Goliath, and this time divine intervention in the form of the Government has not been on David's side. The battle has gone to the strong, at any rate so far, thanks undoubtedly to the
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Treasury's determination to get its spoils and (one must pay him tribute) to the heavyweight in-fighting of the noble Lord, Lord King, backed, we are told, by threats of resignation. I do not blame him. I think that he would not have been doing his job if he had not done precisely that. But if the Government are not susceptible to further argument, we must face the future as it is. We are told that British Airways and British Caledonian have agreed to the route transfers proposed, although one is bound to suspect that it was a case of, "Agree or else".
I hope that the Government and the Civil Aviation Authority will do all in their power to help speed this process of transfer with a view to the new operators being in place, at the latest, in time for the summer schedules next spring. There will be a lot to be done: new links and loyalties to be forged in the respective territories, and staff to be transferred and looked after. I hope that our official representatives in those countries will give every possible help to both airlines in establishing themselves in their new roles. At least I think we can be thankful that the White Paper recognises the need for strengthening the safeguards against anti-competitive and predatory behaviour, although I tend to agree with one of the previous speakers that it is very difficult to define when behaviour does become predatory and it is very difficult to act speedily to deal with it. I am sure that the noble Lord, Lord King, would never dream of knowingly or intentionally indulging in such a thing. But size and strength cannot be other than they are. A predator, particularly a large and strong one, can easily create considerable havoc before it can be stopped. I hope, therefore, that those invested with the powers—the CAA and these other bodies which are to have a say in it—will be constantly watchful and will not hesitate to act effectively and speedily.
One word about airports. Already, we have had the subject of Gatwick raised. I make no apology for raising it myself. Heathrow, with all its facilities, remains British Airways' main preserve, with its monopoly of British overseas flights to and from it. Gatwick, by and large, will remain the home, and will become increasingly, we hope, the home and centre, of the independents. If they are to flourish and grow, as the Government say in the White Paper that they hope they will, then Gatwick must have facilities comparable with those at Heathrow. It has a number of advantages already—a terminal layout which is much less of a mess than Heathrow and much easier for the traveller to manoeuvre through, although I make a strong plea for travellators to the remoter gates. Sometimes I feel as if I am walking all the way to Edinburgh. The new train service to Victoria is a splendid piece of work—a great deal faster, more comfortable and more convenient than the Underground to Heathrow.
But its one great deficiency, as other noble Lords have said, is this lack of a second runway. I will not go into the details; other noble Lords have done that well and I strongly support them in the view that no truly major international airport can exist and develop on the basis of a single runway. No undertaking can be given for ever, and I am glad that the Government have not accepted that that is binding. I hope they will again look very seriously at this possibility.

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In conclusion, I would simply say we must never forget that it is the traveller who must come first—the traveller and the shipper of goods by air. I was going to say that I speak only as the man on the Clapham omnibus, but I think it would be more correct to say the man on the Edinburgh Shuttle and the North Atlantic run. I do a very considerable mileage and go through a great many airports in the course of a year. It is for those of us who travel, and all the others for whom air travel is now becoming a possibility, although it was not in the past, that we must seek to ensure a prosperous and competitive air transport industry; and so I join my noble friend Lord Boyd-Carpenter in hoping that we have not had the last word but will have a further opportunity really to thresh out this extremely important subject.
6.12 p.m.
Lord Graham of Edmonton: My Lords, the phrase "airline competition policy" is reasonably precise, and the report from the Civil Aviation Authority dealt substantially with a range of matters understood to be contained within that phrase. But, as has been demonstrated by previous speakers—notably by the noble Baroness, Lady Burton, who time after time serves the best interests not only of this House but of millions of other people who are the travelling public—it is not just a question of privatising or not, of route allocations, of market penetration, of predatory or monopolistic pricing. It is, in its effect, very much about the welfare of passengers—the consumers of airline services. Of all the groups or categories of air passengers carried by our airlines in both the domestic and international spheres, all of whom are entitled to protection and value for money, none stand in greater need of protection than those whose sole use of an aircraft is for their annual package holiday.
Of course, there are issues at stake within the covers of the report of the CAA, and the response by the Government, affecting substantial financial empires. I would not cavil at the Government's response. My contribution to the debate centres on appendix 4, at page 38 of the CAA Report—Competition policy in the United Kingdom—and in particular that section dealing with anti-competitive practices. I take this with the response by the Government to the references on page 10, paragraphs 28 and 29, to, "Safeguards against anti-competitive behaviour", which were referred to by the noble Lord, Lord Polwarth.
A key office in these matters is that of the Office of Fair Trading. A crucially important officer is the Director-General of Fair Trading. On page 39 the CAA Report spells out the enlarged powers given to the director under the competition Act 1980. It underlines that it is within his powers to initiate reviews of—and I quote:
"the carrying on of commercial activities in the United Kingdom, in relation to the supply of goods and services".
The Office of Fair Trading has the main initiating role within both the judicial system—in this case by taking cartel agreements to the court for judgment—and the discretionary system, in this case by taking monopoly and anti-competitive practice problems to the Monopolies and Mergers Commission, and advising Ministers on whether particular mergers should go to the MMC. In this context, I note with particular
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interest a reference made in respect of holiday companies. I await with interest the outcome of that.
Further down on page 39 we are told that among areas of special concern to the Office of Fair Trading is that of potential monopoly situations. We are told that particular attention is paid to the economic performance of larger firms—I stress "larger"—together with information on price levels and movements, profits and market behaviour; I stress the words "market behaviour".
I noted with appreciation the definition, on page 40, of anti-competitive practices:
"An anti-competitive practice is the pursuit of a course of conduct in the course of business which has, or is intended to have, or is likely to have, the effect of restricting, distorting or preventing competition in connection with the production, supply or acquisition of goods, or the supply of services in the United Kingdom or any part of it".
I am a firm believer in keeping as low as possible the cost to the consumer of travel and package holidays, consistent with business integrity and fair dealing. I trust that the Government are mindful of the need to see that anti-competitive practices, wherever they can be discerned and proved, are tackled with the utmost vigour. When all else fails, the last line of defence for the consumer must be a vigilant government and their regulatory agencies.
The package holiday business does not lack watchdogs set up by either the industry or governmental decisions. By chance, I listened to the chairman of the Association of British Travel Agents on the radio on Saturday morning. He impressed me with his views and with his authority as well as the good sense of what he said. He was commenting on the appalling and dreadful plight of many thousands of users of British aircraft companies. I recall his saying that the holiday package was a unique concept in that so many distinctive and separate businesses were elements within the package. Yet to the public, it is the travel agent who is seen as the front man—the body through whom they buy their holiday.
He told us that last year 10 travel companies had gone bust, and that already this year there were 13 who had gone the same way. I was particularly alert when I thought I heard him say that the CAA should be more concerned to ensure that the holiday business is better organised. I ask noble Lords to bear in mind that this was said in the context of the distress caused to innocent working people who invest a fair amount of their savings to enjoy their holiday.
I ask the Minister the straight question: are the Government satisfied that the self-regulating machinery within the travel business is adequate to deal with the current disasters, and perhaps with others? Reputable and experienced travel operators can look after not only themselves but also their customers. They will take care to look at the choice by the main holiday companies of all the elements in the package—the contractors, the airlines, the hotels. But if the main spokesman for the travel agents—the chairman of ABTA—tells us that the CAA should ensure that the holiday business is better organised, what are the Government going to do about that?
So while I recognise the complex nature of the major issues within the covers of both the CAA report and the Government's response, and while I appreciate that the Government seem to have made proposals

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with which all parties can live, I return to my main concern—that is, concern for the consumer. I echo the unease expressed by the noble Baroness, Lady Burton, in an excellent speech that, as good as the Office of Fair Trading is—and I endorse her appreciation of the work of the Director General Sir Gordon Borrie—it is essential that it has the resources and the back-up to produce its reports in far quicker time than it is able at present. The noble Baroness, Lady Burton, drew our attention to both time and the time that inquiries take. Surely these can be speeded up with more adequate financial support from the Government.
I also share the view of the noble Baroness that consumers are very often found to be in favour until they start to make demands and become nuisances by, for example, wanting protection from bad businesses and shady businessmen involved in the air-carrying business Caveat emptor may have been good enough as the basis for consumer protection once; it is not any more. We want stronger Government action, and we want it now.
6.21 p.m.
Lord Bruce-Gardyne: My Lords, let me begin by apologising to the noble Baroness, Lady Burton, for not having heard the beginning of her remarks. I had been watching closely for the commencement of the debate, but nevertheless I am afraid that I managed to miss the beginning thereof and I apologise to the noble Baroness and to the House. I should also like to join with all those who have complimented the noble Baroness on raising this subject tonight and on her own great personal record in the promotion of the interests of the travelling consumer.
It would be fair to say that the White Paper that we are discussing tonight has received what I might describe as mixed notices from both sides of the House. My noble friend Lord Polwarth described it as a smack in the face to the Civil Aviation Authority. I confess that I am less clear than some noble Lords that as regards this matter the Government faced a very wide choice of options. On the one hand, they were confronted by the threat, the possibility, of the resignation of the board of British Airways, at a rather crucial moment in the history of that institution, if they were to follow the recommendations of the Civil Aviation Authority. On the other hand, if they did not achieve some measure of satisfaction for the major independent airline, British Caledonian, there was the possibility of British Caledonian continuing to apply for routes which the Civil Aviation Authority in some cases would have recommended that it should have had and there would have been the prospect of continuous litigation, which equally would have interfered with the flotation of British Airways.
Therefore, it seems to me that my right honourable friends were caught in a rather narrow straitjacket. Under all the circumstances I suspect that my right honourable friend the Secretary of State for Transport extracted rather more crumbs from Lord King's table than perhaps my noble friend Lord King had originally intended to offer. However, I am not so sure, as my noble friend Lord Polwarth said, whether a great opportunity was thereby missed.
I venture to suggest that if one analyses the CAA report, one finds that, while the rhetoric of
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competition is strongly present, in practice what the CAA was really talking about was a shuffling of the pack rather than the introduction of new cards. We were talking about the transfer of a monopoly service on one route from British Airways to a monopoly service to be provided by British Caledonian. In the international arena there was no actual enhancement offered in the CAA report as regards the broadening of competition to the end consumer, and, of course, that was for reasons which nobody knows better than my noble friend Lord Boyd-Carpenter. The problem that arises is that so many of the international routes, particularly those to Western Europe, are governed by pooling arrangements between governments which are not within the power of the CAA or the British Government to abrogate unilaterally and yet which, of course, are a complete denial of the whole concept of competition.
Therefore, under those circumstances personally I do not feel convinced that there was a great opportunity lost. However, I wonder whether there might not have been something to be said for being prepared to witness some delay in the privatisation of British Airways to enable more progress to be made in the opening up in particular of the European routes to the forces of competition by dual designation, recognising that that could not come about except by international negotiation and that it would take time. I am delighted to see that my right honourable friend the Secretary of State for Transport has now embarked upon that task and has made headway with it. However, it is bound to take time before a major breakthrough is achieved because of the need for international agreement thereon. I am inclined to feel that there might have been something to be said for delaying the privatisation of British Airways until it could come to the market in a genuinely competitive environment.
That leads me to perhaps the one real anxiety I have about the White Paper; namely, I should have thought that there was something to be said for requiring British Airways to separate its air tours operation for separate flotation in order to make sure that within the arena of package tour operations—and as the noble Lord, Lord Graham, has pointed out, it is highly competitive; indeed, one might almost say that it is a cut-price market—there could not be a legitimate claim by other operators that British Airways was indulging in cross-subsidisation.
The key to this seems to me to be a separate flotation for British Air Tours. It was my impression that that was a proposition upon which British Airways might have looked with, if not favour, at least some indulgence. Perhaps the reason such a proposition was not included in the White Paper was the fear that it might have diminished the "take" for the Treasury from the proceeds of privatisation. In that context—particularly if one considers the nature of the sources of finance for privatisation and bears in mind the importance of the institutions which might otherwise be buying Government gilts—the significance of the contribution which privatisation actually makes to reducing the public sector borrowing requirement seems to be, frankly, a somewhat secondary consideration. I venture to wonder whether the Treasury would not be well advised to be

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somewhat less impatient to obtain the proceeds of privatisation than it has displayed itself to be as regards the last few cases and perhaps in the case of British Aerospace.
I do not wish to delay your Lordships because I want to make only a brief intervention. I rather doubt whether a major opportunity has been missed in this instance. It is so much more important that we should press ahead with the unscrambling of the pooling arrangements and establish dual designation routes which alone can offer the airline customer a real choice.
Before I sit down I want to reiterate the points so ably made by my noble friend Lord Boyd-Carpenter. It would be very helpful at this juncture if my noble friend, in replying to the debate, could say something about the present battle that has apparently arisen between the Department of Transport and the American authorities. Like my noble friend Lord Boyd-Carpenter, I must say that the prospect of Her Majesty's Government being engaged in the business of surcharging passengers on the transatlantic routes is not one that should have a great appeal to your Lordships' House.
6.30 p.m.
Lord Underhill: My Lords, it is with some trepidation that I speak from the Front Bench on behalf of the Opposition in the light of the experienced and well-informed persons who have taken part in this debate. However, I too should like to thank the noble Baroness, Lady Burton, for giving us the opportunity not only to have a preliminary canter around the Government White Paper but also because this is the third opportunity which we have had in recent months to discuss the policy of civil aviation.
At the end of June we discussed the matter on the CAA's interim assessment before they issued their report. At the end of July we were discussing it on the CAA report in the absence of any policy direction from the Government. On that occasion I reiterated what the noble Baroness said—that it was a pity that we were not discussing the matter in the light of all the other reports, many of which are still awaited. Now we have the opportunity to discuss the matter as a preliminary canter with the Government White Paper on the CAA report. I, along with other noble Lords, wish to avoid going over the same arguments that we used on the previous occasions, but some points must be made.
Paragraph 3 of the Government White Paper points out that historically most sectors of air transport have been heavily regulated and protected by the state, and that that is still the position in many countries. It emphasises that the Government have to take account of that in bilateral relations. This was a point that some of us made in the previous debates, and one reason why some of us put forward the point that Britain's national flag carrier must not be weakened in any way because of this international situation.
Paragraph 5 of the White Paper states:
"The Edwards Committee report of 1969 set the pattern for Britain's airline industry over the last decade."
It points out that the committee supported the development of a competitive multi-airline industry,
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but it is significant that there was one glaring omission, and a glaring omission to which I referred on the CAA report. I drew attention to the fact that not only did the Edwards Committee say what the Government have said but they also made clear that aviation policy must include a public sector; that there was no case whatever for denationalisation of BOAC and BEA, which were the then predecessors of British Airways. Edwards said that those publicly-owned airlines should be confirmed as the major operators. It is strange that the CAA made no reference to that. It is strange that, although the Government give an historical account, they leave out that important historical point.
The Labour Party policy remains as it was when the Edwards report was produced. There must be a strong public sector airline as the national flag carrier, and it is essential in Britain's interests that we should maintain that in order to keep our position in world aviation, and also that we accept the desirability of a smaller second force. So far as the opposition is concerned, we wish to retain BA as our pre-eminent airline but also to encourage the development of BCal as our second force.
We stand by the Edwards report. Everyone has given praise to the recent development of British Airways I would remind you—within the public sector. Without diverting too much, it is strange how the Government seem to look at various industries. There is BL, saved by the public sector; Rolls-Royce, which had to be brought into the public sector; British Telecom, one of the most successful industries in the world, and yet the Government are getting rid of it; Cable and Wireless, which was very successful. Transport Docks was one of the highly profitable industries, and the Government decided to get rid of it; the National Bus Company, which everybody admits is an efficient undertaking, and the Government now wish to dispose of under their buses White Paper. We have praise lavished on British Airways, and yet the Goverment wish to take it out of the public sector.
However by and large we welcome the decisions in the White Paper in so far as they affect British Airways. I should like to feel that those decisions were solely in the interests of civil aviation policy. However the CAA was not asked to review civil aviation policy, it was asked to review the implications of privatisation for competition and development of the British airline industry. It had to take the threatened privatisation into account.
Paragraph 14 of the Government's White Paper refers to the uncertainty of the industry about the outcome of that review. It says that,
"Uncertainties affecting the privatisation of British Airways must be resolved."
When we move to paragraph 24 we find that the White Paper observes that even the limited exchange of routes which has been agreed between BA and BCal will mean that the Exchequer will recieve less on privatisation of BA than would otherwise have been the case. It is clear that the Government were concerned that any major transfer of routes would seriously affect the future flotation of British Airways.
The noble Lord, Lord Bruce-Gardyne, referred to the conflicting aims of the Secretary of State. The

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Times leader of 8th October said that the Secretary of State was,
"caught between conflicting demands for greater long-term competition and for speedy privatisation of British Airways at a good price".
Some of us have stressed throughout this controversy that it has little to do with competition. We have to take into consideration the effect of bilateral agreements; that there are few opportunities for multiple designation; that there is the important question of international agreements between governments; and that there is little opportunity for head-to-head competition. What the argument has been about has been the compulsory transfer of routes between what would be two private airlines. That has little to do with real competition as such.
We had the massive advertising campaign. We have heard talk of advertising campaigns of other public bodies, and we have had a massive advertising campaign. On 7th October the Sunday Times Business News in its Comment Column, referring to the CAA review, said:
"No one expected it to degenerate into the grubby horse trading of the past few weeks."
I agree with the noble Baroness that we have no desire to support a private monopoly, but we have to face the situation as it is and we must support the Government view that the CAA proposals could be disruptive of British Airways if carried out, and that there must be no weakening of Britain's national airline. I shall not go into all the arguments, but for all the international reasons it is important that there should be no weakening.
Therefore, we welcome the decision for no enforced reduction of British Airways' size and no compulsory transfer of routes, not in the interests of shareholders of the future privately-owned British Airways, but in Britain's interests as a leading aviation nation and also in the interests of passengers. We welcome also the decision of the Government published in the White Paper in favour of the continuation of British Airways' scheduled international services from Gatwick. That we believe is in the interests of our flag carrier as such, and also in the interests of the future development of Gatwick.
We have argued, especially in the last debate, that British Airways should retain its scheduled European services from Manchester and Birmingham Airports. I am pleased that the Government have decided to reject the CAA recommendation that those services should be given up by British Airways and transferred to independents. We welcome that decision, again in the interests of our national airline and also in the interests of the regional airports of Birmingham and Manchester. The airport authorities of both those airports expressed considerable concern about the CAA proposals and we are pleased that the Government have decided that BA should continue its European services from those airports.
We hope that that will be the final position because not only have those authorities faced that possibility in the CAA report, but they and other airports are being affected by the proposal for the abolition of the metropolitan counties, which will affect the airports under the control of some of the county councils.
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I regret that there is nothing in the White Paper dealing with airport policy as such, except the one reference to the limit on flights out of Heathrow. Naturally, we shall await with keen interest the consultation which is taking place on the future of the Scottish lowland airports. We shall await with keen interest, as will every other noble Lord, the final report, when it comes, on Stanstead and the possible fifth terminal at Heathrow. I hope that the Government will be able to state quite categorically that they will not proceed with their threatened privatisation of the British Airports Authority. On the grounds of efficiency, there is no case whatever; it is an efficient public undertaking. On the grounds of meeting its financial targets, there is no argument; it is meeting what the Government require. What can be gained by taking the British Airports Authority out of the public sector? Nothing whatever except following Government political dogma.
We await not only the reports to which I have referred but the results of the consultation paper about the future of the permitted flights from and to Heathrow. I was concerned in the consultation paper to see that the view of the Department of Transport was given as favouring the maximum use of market mechanisms rather than regulatory intervention. Perhaps the Minister will tell me what that means. Does that mean that it will be determined by an increased price for the users of Heathrow? That will obviously have some effect upon the passengers. That is put in the consultation paper as being the view of the department.
I am not sure whether it is an offer, but reference has been made to British Airways giving financial support to the independents who may wish to have flights to the Continent from six of the regional airports. I wonder whether that was an offer or another piece of arm-twisting in this game which has been going on. One thing made quite clear in the White Paper is that, even if that proceeds and the Government go ahead with the comparative deregulation of domestic air services, the CAA will still have to continue to regulate an entry to most of the routes. It makes it quite clear that there can be no complete deregulation of domestic services because of the need to control access to practically all the British airports. That is a view that most of us would accept.
We are also pleased that the Government are not proposing any additional powers for the Civil Aviation Authority. We want it to remain, as I said on the last debate, as a regulatory body; that is its function and one which it does extremely well.
Before I close, I emphasise what other noble Lords have said about paragraphs 28 and 29—the safeguards against anti-competitive behaviour. It is strange that those who want the utmost market competition suddenly get worried when a big fish comes among them. It is strange, also, as we found in the Financial Times of 24th October, that the public interest is likely to be damaged since a privatised concern would exploit its monopoly power more aggressively. That surely is another argument for leaving BA where it is, successfully within the public sector.
As some noble Lords have asked, and I shall ask the Minister again, what is "predatory competition"? When does competition become predatory? What is

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"unfair competition"? The noble Baroness referred to a communication received from Britannia. I also received a communication. It said at one point that British Airways' use of spare planes on charter flights at week-ends is unfair. But, surely, is that not efficiency? If an undertaking has spare planes because they are not used at that particular time, surely using them on another section of the business is in the interests of passengers, is right and proper and should not be criticised. It is the same as the National Bus Company through its subsidiaries, using spare stage carriage vehicles on express coach services because it can use the interplay. Surely no one will say that that is unfair competition; yet at least one of the airlines is saying that it is.
The Government have endorsed the recommendations of the CAA that BA cannot be kept out of the charter industry. It would have been a travesty for those who have the pressure of market competition if the Government had not supported the CAA in that attitude. Incidentally, I remind noble Lords of what I said during the last debate. After the BAA's own air tours charter section, the other four mainline British charter airlines are not exactly independent. They are all owned by travel operators, which brings in the point that my noble friend Lord Graham raised.
The conclusion, paragraph 36 of the White Paper opens up a considerable argument. The Labour Party does not believe that simple reliance on competition and market forces will achieve a sensible distribution of air transport services. The CAA report was, in effect, an argument for "regulated " competition, not competition. If one reads the White Paper very carefully, despite its claim in a few lines in paragraph 36, it cannot be said that it is arguing for open competition.
I hope that the Government will take a careful look at the whole situation, decide not to proceed with damaging the British Airports Authority, and realise, when they have considered all the arguments that have been put forward, that British Airways might, in the interests of this country and its passengers be left where it is successfully in the public sector.
6.48 p.m.
Lord Trefgarne: My Lords, as I think every noble Lord has rightly and properly said, we are most grateful to the noble Baroness, Lady Burton, for giving us this early opportunity of considering the recent White Paper on airline competition policy. This debate has illustrated the wide interest in the Question and, dare I say, the widely differing views held about it. Ever since the CAA published its report in July, much—some might say too much—of the public discussion has focussed on the sensitive issue of route transfers. The White Paper rejected the idea of transfers and I shall deal with them later. But it is important to remember that the Authority's proposals for transfers where never an end in themselves. They were only the means to an end.
The CAA was concerned in its report to promote a strong and competitive multi-airline industry and the Government warmly endorse that basic strategy. The objectives set out in paragraph 4 of the White Paper make this abundantly clear. The cornerstone of our
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airline policy, consistent with maintaining high safety standards, is the promotion of competition wherever it makes sense.
The White Paper also sets out three further objectives intended to ensure that competition really happens. A necessary pre-condition for true competition, but not a guarantee of it, is the privatisation of British Airways. We are still on target for privatisation in early 1985. For the first time since the pioneering days of the industry, now nearly half a century ago, all Britain's airlines will be competing on an equal footing and none will be insulated by the state from the rigours of the market place. But privatisation alone is not enough to guarantee competition. That is why the Government have also spelt out in the White Paper their commitment to a sound and competitive multi-airline industry, strong enough to compete wing tip to wing tip with foreign airlines. Finally, but no less important, competition must be fair, and I shall return to this in a moment.
I shall not dwell on the steps which the Government have taken since 1979 to promote competition. The record can speak for itself. Suffice it to say that those who travel regularly between Heathrow and Edinburgh, Glasgow and Belfast, between London and Hong Kong and, most recently, to the Netherlands can all testify to the improved levels of service which liberalisation and competition have brought about. We can expect further liberalisation both at home and abroad. The Government have already welcomed the CAAs proposals to introduce, as a two-year experiment, an area facility allowing airlines to serve any domestic routes except those to Heathrow and Gatwick, which have to be excluded for capacity reasons, and perhaps some life-line routes to remote communities. The authority is also proposing to cease regulating domestic air fares although they will still need to be filed so that the authority can intervene, where necessary, to prevent predatory or monopoly behaviour.
Internationally, most of the opportunities for competition between British airlines lie in the short-haul routes to Europe where traffic is sufficient enough to support a number of carriers. It is our belief that on many European routes it is not enough simply to have one British and one foreign airline. Without a second British carrier on the route, the vital irritant will be missing and it is all too easy for the incumbents to perpetuate a relationship which is cosy for them, if not for the consumer. Wherever we can negotiate suitable arrangements with European countries—or indeed, other countries overseas—we will designate any British airline willing and able to compete on a route.
Our intentions in respect of dual or even multiple designation are quite firm. What we must, of course, secure are adequate opportunities for competition. The best of them lie within the European Community. For that reason, we welcomed the Commission's modest proposals for a common policy earlier this year even though they do not go far enough. We very much hope that the high level group examining the case for liberalisation will recommend significant and rapid progress. Other member states, we believe, are beginning to recognise the advantages of such a liberal policy. Indeed, in the short term, perhaps the best

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prospects for liberalisation lie in bilateral negotiations with other, like-minded member states. But opportunities for competition are not by themselves sufficient. Airlines must also be strong enough to take full advantage of them.
This brings me to what some have seen, I think mistakenly, as the core of the CAA's recommendations; namely, route transfers.
Lord Beswick: My Lords, I wonder if I may intervene. The noble Lord has spoken a lot about liberalisation. As an airline pilot, he has not once mentioned the need to ensure air safety.
Lord Trefgarne: My Lords, I shall be making a reference at least to that later. But the noble Lord knows, I am sure, the importance that the Government have always attached to that matter, as indeed have all previous governments. Nothing in our policy must be taken as in any way departing from that particular position. Of course, that is a matter for the Civil Aviation Authority and it is a matter that they take with the utmost seriousness.
The motive behind the proposal—and I am returning now to the route transfers proposal—was not simply that routes should be transferred for their own sake. In the authority's view, transfers were necessary to strengthen British Caledonian and other independent airlines so that they might then be able to compete more effectively with British Airways and foreign airlines.
The White Paper accepts both the motivation behind the CAA's proposals and their spirit. It is not some sort of victory for British Airways as the ill-informed have claimed. On our calculations, British Caledonian comes out of the bargain some £18 million a year better off in terms of pre-tax profits. That is more than the airline has ever earned in any year of its entire existence. The route exchange leaves British Caledonian financially stronger and far better placed to take advantage of dual designation opportunities in the future.
But as your Lordships have asked, why an exchange and not a simple transfer; and why £18 million? Why not more? There are several reasons why we decided against transfers and, let me be frank about one of them, transfers needed legislation. Not only would legislation have been contentious; it would have delayed the privatisation of British Airways, one of the foundations of our policy for greater competition. But there were other reasons for rejecting compulsory transfers. They would have been very disruptive to British Airways. Its network would have been dislocated and quite significant numbers of staff affected. Nor would there have been any stimulus to direct competition.
Furthermore, so far as British Caledonian is concerned, in our view the CAA's proposals went further than was necessary to build it up financially. We judged that £18 million is just about right and is sufficient for British Caledonian to take advantage of the opportunities likely to be available soon for new services in competition with British Airways. In a way, it was more difficult for the Government to decide on the CAA's recommendations for the transfer of British Airways' regional routes to Europe. As the White
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Paper recognises, the CAA advanced some cogent arguments for such transfers. On the other hand, the airports concerned were bitterly opposed to the idea and saw the loss of Britain's largest carrier on European routes as potentially very damaging to their standing as alternatives to the London airports. On balance, we decided against transfers, particularly as they would have added nothing to direct competition. Instead of transfers, British Airways has offered to help the independents develop a limited number of new services from the regions to Europe with financial assistance and other support. The offer applies just as much to independents wanting to introduce services in competition with British Airways on its existing routes as to completely new services. We believe the offer will genuinely lead to new services which the independents would not otherwise be able to introduce because of their development costs.
I said at the beginning that it is essential that competition is fair. The White Paper fully recognises this fact. We considered very carefully whether the CAA's existing powers are adequate to promote competition and to act, if necessary, against anticompetitive or predatory behaviour. We concluded that they are and that the authority can attach suitable conditions to air transport licences and curb such behaviour where it can be demonstrated. The CAA is therefore to remain the principal agent for action against anti-competitive behaviour and should be able to act sufficiently quickly through the licensing system when called upon. At the same time, we plan to extend the Director-General of Fair Trading's role in relation to civil aviation. In addition to his present power to look at domestic services under the Competition Act 1980, he will also be empowered to look at charters under that Act and to refer monopoly questions concerning both domestic and charter services to the Monopolies and Mergers Commission for investigation under the Fair Trading Act 1973.
The Government believe it right that as air transport is liberalised it should in this way be brought more into the mainstream of competition legislation as it applies to industry generally. The position with international scheduled services, however, is complicated by air services agreements, and consequently that is not to be brought within the Director-General's remit. But the Government will retain their present powers to refer monopoly questions concerning such services to the Monopolies and Mergers Commission.
May I turn now to some of the points that have been raised during the course of this evening's debate? The noble Baroness, Lady Burton, in her admirable opening speech, asked about the liberalisation of services to West Germany. We hope to announce before long progress towards more liberal air service arrangements with West Germany. Talks with the Germans are continuing, and we are encouraged by the agreement reached earlier this month on the introduction of new excursion fares for the winter. In many cases, these are 40 per cent. below those previously available.
My noble friend Lord Boyd-Carpenter asked about a number of matters, particularly about the North Atlantic winter fares, and my noble friend Lord Bruce-Gardyne was concerned with that matter, too. The Department of Transport considered it necessary to

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seek reassurance from the United States Government that the proposed new fares would not be used as the basis for future anti-trust actions, even though we do not accept that such actions would be consistent with Bermuda 2. Since the United States Government did not provide that reassurance, the department, very reluctantly, turned down the filings from United States airlines for lower winter fares. As a result, I am afraid to say, tickets sold on the basis of these lower fares are not valid and passengers must therefore buy new tickets at the higher approved fares before they can travel. My noble friend——
Lord Bruce-Gardyne: My Lords, will my noble friend allow me to intervene before he leaves that point? Surely, as one understands, there are many tens of thousands of supposedly valid tickets which are in issue and in circulation. What happens about them?
Lord Trefgarne: My Lords, the position is—I am speaking from memory on these matters, and my noble friend will forgive me, therefore, if I do not get it quite right—that the tickets were sold, or should have been sold, subject to the condition that the fare had not yet been approved. The fact is, therefore, that those who seek to travel on those tickets will have to surrender them for new tickets and pay the additional element of the fare that is now required.
Lord Boyd-Carpenter: My Lords, will my noble friend allow me to intervene on this point? Is he really saying that a person who turns up at the airport with a ticket bought in good faith at the lower rate will be told that that ticket is valueless unless he puts up another £40?
Lord Trefgarne: My Lords, I am sorry to say that that is the case. My own view—and I am speaking personally here—is that the tickets should really not have been sold when there was some doubt as to whether the fare would be authorised, because that must have been clear to the airlines when they chose to sell the tickets at the lower fare for which they had not received approval. I hope your Lordships will allow me to emphasise that point.
Lord Boyd-Carpenter: My Lords, my noble friend is very good in giving way again. I hope that the Government will give further thought to this point. Accepting that, it may be, the airlines ought not to have sold the tickets, they were sold and they were purchased in good faith. Is it not really very serious indeed to face people, who may not have been able to afford any more, with the alternative of abandoning their tickets and what they have paid or paying more than they may be able to afford? Cannot the Government give further thought to this; and would even the American system cause any trouble if they were allowed to travel on the earlier fare, even if other people are not allowed later on?
Lord Trefgarne: My Lords, I can understand the concern which my noble friend expresses in this matter, and I am bound to say that I share that concern; but I have to say that the position is as I have described it. I very much regret that position, but it was not a position of the Government's making.
Lord Beswick: My Lords, may I follow this point a little further? The noble Lord has made it clear that the fault appears to be that of the airlines. Suppose the airlines said, "We have made a mistake. You will have to pay the proper fare, but we will advance you the difference between the fare you have paid and that which you will have to pay. We will pay that as compensation for our mistake". Would they then be contravening any regulation?
Lord Trefgarne: My Lords, the noble Lord asks me to comment on the legal implications of a hypothetical situation. I hope he will forgive me if I do not do that. But, naturally, anything that can be done to relieve the distress of the would-be-travellers is something which I would welcome, provided that it fell within the ambit of the regulations.
My noble friend Lord Boyd-Carpenter also asked me about airport matters more generally, and some of these points were in the mind of the noble Baroness, Lady Burton and others as well. Your Lordships will wish to know that the inspector's report on the Stansted inquiry is now expected very shortly. I clearly cannot comment on the cases made at the public inquiry. I can also say that my right honourable friend the Secretary of State is currently considering the response to consultations on how to implement the 275,000 ATM limit at Heathrow. I cannot yet say how it will be implemented, but I have to say that imposed it will be when Terminal 4 comes into use next year.
Lord Boyd-Carpenter: My Lords, will my noble friend allow me to intervene? He said that his right honourable friend is considering how to implement the 275,000 limit. Does that mean that he has rejected entirely the proposal to increase it?
Lord Trefgarne:, My Lords, I have to say that the 275,000 ATM limit will be imposed at that level when Terminal 4 comes into use next year. That would be honouring previous undertakings, and not to impose it would certainly reopen the basis of the Stansted and Terminal 5 inquiries. But my right honourable friend has also said that he may be able to review the limit once we have experienced it in operation. With regard to the second runway at Gatwick, I doubt whether I have anything much to add to what I have said in the past on that matter on a large number of occasions. Suffice it to say that the Government's position has not changed.
The noble Lord, Lord Beswick, asked about licences for Highland Express at Prestwick. This is a matter, in the first place, for the Civil Aviation Authority. The Secretary of State would only become involved if there were an appeal. Because of the potential appellate role, I could not comment on the merits of the Highland Express application. My right honourable friend is also still considering an application from People's Express in connection with their service from Stansted.
The noble Lord, Lord Graham, referred to the regulation of the holiday industry. This is a complex business, and is not one directly concerned with airline competition policy. There is an element of regulation via the Civil Aviation Authority; it is not just a self-regulating industry. There is a good deal of complicated stuff available on that. I wonder whether the noble Lord will allow me to write to him on the

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matter, which I shall be very happy to do. It is certainly something which has most recently given rise to a great deal of thought.
Lord Graham of Edmonton: My Lords, I am most grateful.
Lord Beswick: My Lords, the noble Lord appears to have left the question that I asked, Is he not going to give me any information about the moneys for which British Airways have asked to wipe out their outstanding loans for the American aircraft.
Lord Trefgarne: My Lords, the noble Lord asked a question on that yesterday and received what I consider was a very effectively delivered reply from my noble friend Lord Brabazon. But I think that the noble Lord is in something of a misunderstanding over all this, because in almost every case British Airways have bought their aeroplanes—I think this is the point he was making—on a commercial basis, the main exception to that being, of course, the Concorde purchase which was subsequently written-off, as the noble Lord will know.
Lord Beswick: My Lords, they borrowed money in the United States to buy American aircraft and they are asking the British Government for taxpayers' money to wipe out that loan. I am asking what criteria will be applied in making a decision as to whether or not they should be given this money.
Lord Trefgarne: My Lords, I am not aware of any such request for taxpayers' money to wipe out the loan, as the noble Lord says. We are still thinking about the terms of the British Airways flotation and I really cannot add to what my noble friend had to say on this matter yesterday.
My noble friend Lord Bruce-Gardyne asked about the possibility of a separate privatisation of British Air Tours, which is the main charter arm of British Airways. British Air Tours has only about 15 per cent. of the charter market, and so it is nowhere near even a statutory monopoly. Hiving it off, or even banning British Airways from whole plane charters, would not benefit competition, or the consumer. The solution is to ensure that there are adequate safeguards against anti-competitive behaviour in the charter market. I believe that the steps which we are proposing will achieve that aim.
Competition is the heart and soul of this Government's airline policy. That is why we asked the Civil Aviation Authority in the first place to review the implications of privatising British Airways for competition and the sound development of the industry. Far from rejecting the authority's report, we have warmly endorsed the steps it proposes to take to develop competition.
For the Government's part, the White Paper shows that much of the spirit of the authority's report has been met. Financially, British Caledonian will be a much healthier airline than hitherto and will be better able to compete with British Airways. The other independents now have a major opportunity to grow further in the regions, aided by British Airways, which is offering to help them to develop just about as many new regional services to Europe as it operates itself. We have made sure that the safeguards against anti-
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competitive behaviour are adequate. Above all, we have reaffirmed in the White Paper the Government's commitment to competition and to getting the best possible deal for those who travel on Britain's airlines.

Co-operative Development Agency and Industrial Development Bill
Returned from the Commons with the amendments agreed to.
Greater London Council (General Powers) Bill
Returned from the Commons with the amendments agreed to.
Leicestershire Bill [H.L.] Oxfordshire Bill [H.L.] Surrey County Council Bill [H.L.]
A message was brought from the Commons that they concur with the resolutions of this House of yesterday.

Merseyside Development Corporation Bill Associated British Ports (No. 2) Bill
A message was brought from the Commons that having considered so much of the Lords message of 29th October as relates to the Bills, they have come to the following resolutions:
That the Promoters of the Bills shall have leave to suspend proceedings thereon in order to proceed with the Bills in the next Session of Parliament, provided that in the case of each Bill the Agents for the Bill give notice to the Clerks in the Private Bill Office of their intention to suspend further proceedings not later than the day before the close of the present Session and that all fees due on the Bill up to that date be paid;
That on the fifth day on which the House sits in the next Session the Bills shall be presented to the House;
That there shall be deposited with each Bill a declaration signed by the Agents for the Bill, stating that the Bill is the same in every respect, as the Bill at the last stage of its proceedings in this House in the present Session;
That each Bill shall be laid upon the Table of the House by one of the Clerks in the Private Bill Office on the next meeting of the House after the day on which the Bill has been presented and, when so laid, shall be read the first, second and third time and shall be recorded in the Journal of this House as having been so read;
That no further fees shall be charged in respect of any proceedings on the Bill in respect of which fees have already been incurred during the present Session;
That these orders be Standing Orders of the House.
House adjourned at eleven minutes past seven o'clock.

  TERRIERS: ILLEGAL ACTIVITIES
  TERRIERS: ILLEGAL ACTIVITIES
  TURKEY: TORTURE ALLEGATIONS
  TURKEY: TORTURE ALLEGATIONS
  EASTERN CARIBBEAN STATES' COASTGUARD FACILITIES
  EASTERN CARIBBEAN STATES' COASTGUARD FACILITIES
  NATIONALISED INDUSTRIES: CONSULTATION ON TARIFF CHARGES
  NATIONALISED INDUSTRIES: CONSULTATION ON TARIFF CHARGES
  UK MANUFACTURES: COMPETITIVENESS
  UK MANUFACTURES: COMPETITIVENESS
  STEEL LEGHOLD TRAPS: EXPORT
  STEEL LEGHOLD TRAPS: EXPORT
  DANGEROUS GOODS: IMPORT PREVENTION
  DANGEROUS GOODS: IMPORT PREVENTION
  FIREWORK INJURY STATISTICS
  FIREWORK INJURY STATISTICS
  WAGES INSPECTORATE STATISTICS
  WAGES INSPECTORATE STATISTICS
  CONSTRUCTION INDUSTRY TRAINING LEVY
  CONSTRUCTION INDUSTRY TRAINING LEVY
  WEED RESEARCH ORGANISATION
  WEED RESEARCH ORGANISATION
  PRIVATELY IMPORTED CARS: CUSTOMS CHARGES
  PRIVATELY IMPORTED CARS: CUSTOMS CHARGES