Sitting of 19 April 1985

Preamble
The House met at half-past Nine o'clock
The Clerk at the Table informed the House of the unavoidable absence, through illness, of MR. SPEAKER from this day's sitting.
Whereupon MR. HAROLD WALKER, THE CHAIRMAN OF WAYS AND MEANS, proceeded to the Table and, after Prayers, took the Chair, as DEPUTY SPEAKER, pursuant to the Standing Order,

PETITION

  Buses
  9.35 am
  Mr. Alfred Morris: I have the honour to present a petition which may well be unique of its kind. It bears the common seal of the council of the city of Manchester, in pursuance of an order of the council, and thus expresses the opinion of a major city in petition form. Informed opinion has it that, if the petition is not unique, it is certainly a most unusual and important one.
  The petition is about the Government's policies on buses and states that, if implemented, they could endanger concessionary fares for elderly, disabled and other people in special need, including schoolchildren and the young employed. At present these concessions are available to assist over 200,000 people in Manchester.
  The policies will also mean, in the words of the petition,
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  that transport services required for social needs will be threatened. Of all Manchester households, 60 per cent. do not have a car (compared with 39 per cent. of households nationally), and in some parts of the Inner City this figure rises to over 75 per cent. Indeed these figures conceal that the car is not always available to the whole family in one-car owning families. For example, during the working day where the family car is used for the journey to work, the remainder of the family is deprived of the use of the car, and are therefore dependent upon public transport. It is estimated that, during the working day, the percentage of households in Manchester which either do not have a car or in which the car is not available for family use rises to 85 per cent. The impact of this falls particularly on women (who as a group make greater use of public transport than men), young people and those over the age of retirement.
  Among other criticisms of the policies, the petition states:
  that the strict safety standards needed for public service vehicles will not be upheld;
  that continuity, reliability and stability of services will end;
  many bus and rail services will vanish;
  the few services that are left will no longer connect and services will become less frequent;
  passengers will not know which services should run at what times, or what fares are to be charged;
  operators will compete with old, unsuitable buses and coaches;
  neither Users nor Ratepayers will have any say about their local public transport services;
  the vital economic activity of the City Centre in particular and Manchester as a whole will not be maintained.
  Wherefore your Petitioners pray that your honourable House will reject any legislation to implement the proposals of the White Paper on buses and the Transport Bill.
  The message of the petition is one of compelling importance for tens of thousands of my constituents and for hundreds of thousands of the citizens of Manchester as a whole. That is why it bears the common seal of a great city and I most warmly commend it to the House.
  To lie upon the Table.

Orders of the Day

  Intoxicating Substances (Supply) Bill
  Not amended (in the Standing Committee), considered; reported, without amendment.
  9.37 am
  Mr. Neville Trotter: I beg to move, That the Bill be now read the Third time.
  The Bill seeks to deal with one of the sickest crazes of the 20th century, colloquially known as glue sniffing, but which is the much wider problem of solvent abuse. It is a youthful form of self-poisoning, and the problem is, as we heard in speeches on Second Reading, found all over the country in urban and rural areas. It has been gratifying to have the support of the House for this measure. There was not one speech against the Bill on Second Reading, and support has come to me from all over the country during the intervening period.
  This is the third Bill that I have been fortunate enough to bring to this stage in the House. The other two, the Consumer Safety Bill 1977 and the Licensing (Amendment) Bill 1980, gave rise to many debates and arguments, some controversy and many amendments. I remember myself tabling over 100 amendments to one of those Bills.
  There has been no attempt to amend or improve the Intoxicating Substances (Supply) Bill since it was first brought before the House, and I find that very gratifying. I thank in particular the Under-Secretary of State for the Home Department for the assistance and wise counsel that he gave me when the Bill was being drafted. I also thank the sponsors who have supported the Bill throughout, those who took part in the Second Reading debate, and my hon. Friends and Opposition Members who are here today to speak in the debate.
  We know that the vast majority of the young people who indulge in solvent abuse do so out of curiosity. In many cases they do it as a group activity. They want to belong to a group in which sniffing is the current craze. The substances are cheap and easy to obtain and are to be found in every broom cupboard in every home.
  As well as the large number of people who indulge in the habit as a craze or out of curiosity, there are a smaller number of serious cases of chronic addiction to solvent abuse. The usual background is that they come from unhappy or disturbed families. It is a way of seeking attention or a way of escape, and it is a very serious problem.
  Those who engage in solvent abuse or sniffing only as a passing phase can, unfortunately, kill themselves in that short time. One trial sniff can lead to death, and we read about it all too often in the newspapers. They are indeed tragic events. The damage can be to the heart, to the lungs or to the brain. There is not only the problem of organs of the body being seriously or fatally damaged. Frequently accidents are caused by the intoxication resulting from abuse and many are fatal. There is the additional problem of anti-social acts done by people under the influence of solvents.
  A wide range of products can be used in solvent abuse. I shall not go into all of them, but I have a table that was produced by one of the bodies concerned with the
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  prevention of solvent abuse. It shows that 24 per cent. of the deaths in a 10 or 12-year period were due to the use not of glue—the substance most often thought of—but to gas fuels, and in particular lighter fuel. The table shows that a further 17 per cent. of the deaths were due to the use of aerosols—a particularly dangerous form of sniffing. They included fire extinguishers, anti-perspirants, air fresheners, cleaners, fly sprays, paint sprays and hair sprays—things in everyday use in every house. Glue of one form of another accounted for 27 per cent. of the deaths, and the remaining 31 per cent. were from a wide variety of products. I should not have thought that chloroform—one of the products listed—was to be found in every broom cupboard. Many others, however, such as petrol, paint thinner, plaster remover and cleaning agents, are all widely available products.
  I should like to repeat the warning about aerosols. Anything that can be sprayed from an aerosol can be sniffed, and people can kill themselves by using any of those products. It happens regularly. The message should go out from this debate that aerosols are very dangerous for young people to use in the way that I have described. Many of the tragedies are due to the abuse of aerosols, and that fact is not sufficiently appreciated by parents. Most people believe that glue is the substance to avoid, but the statistics to which I have referred show that, although the sniffing of glue gives rise to death and accident, most accidents are not due to the use of glue. I repeat that aerosols are a particularly dangerous form of abuse, and all parents should be aware of that.
  One of the suggestions made to me during the three months since the Second Reading is that there should be dummy containers of the abused products kept in shops. I do not think that that is a practical suggestion. Bearing in mind the wide range of products to which I have referred, it would not be practical for shops to carry on their shelves dummy containers for so many products. I have been in correspondence with my hon. Friend the Under-Secretary of State for Health and Social Security on the subject, and he is raising the matter with the British Adhesives and Sealants Association and the British Retail Asociation for them to consider. Perhaps some products—glue in particular—might be dealt with in that way, but I do not think it would be practical to treat so many products in the way suggested and to have only dummies on the shelves.
  Those at risk are mostly between the ages of 13 and 16. When the Bill was being drafted, it was suggested that perhaps the offence of deliberately supplying substances to youngsters should be limited to those up to 16, but the problem continues beyond the age of 16. Therefore, it seemed to me right that the limit should be 18. There has not been any opposition to that suggestion, and therefore, the age remains in the Bill at 18.
  Some young people regard the sniffing of solvents as a kids' craze, but I am told that the fact that it is totally different from what adults do gives it some attraction to young immature people.
  How many children take part in solvent abuse? No one really knows the answer. For obvious reasons, it is not practical to have a census, but it is thought by some researchers that as many as 5 per cent. of all children in the age group have sniffed solvents at some time, although in most cases it is a passing phase.
  There has been research in Newcastle by Dr. Anthony Thorley, the director of the centre for alcohol and drug

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  studies at St. Nicholas' hospital together with Brenda Davies, the senior registrar in psychiatry, and Mr. Dennis O'Connor at Newcastle university, to whom I referred on Second Reading, who runs a very successful clinic for people suffering from the problem. Those three people have produced a study which suggests that, of the 5 per cent. of 15-year-olds who engage in sniffing, 10 per cent.—one in 200 of those children —continue sniffing beyond that age into young adulthood. That is a serious factor.
  In the three months since Second Reading I have been keeping a note of developments in my area in the northeast. I do not think that that area is any different from the rest of the country. There has been a continuation of the distressingly regular series of tragedies and problems caused by solvent abuse. In February, an 18-year-old boy was convicted of indecent behaviour which was brought about by his being under the influence of glue. There have been several cases of burglary. In one of those cases the 19-year-old involved pointed a gun at a policeman. The policeman found himself with a gun at his temple held by someone in a fairly crazed condition. Fortunately, the policeman was able to seize the gun. Although it proved to be a very accurate replica, it was a worrying and terrifying incident for him. Those burglaries and other incidents have been carried out by children in their late teens, not by children in their early teens.
  There has been trouble on our splendid Tyneside metro system. A train had to come to an emergency stop because a youth, intoxicated by sniffing, was in front of it. There was a crowd of sniffers around at the time. A 12-year-old sniffer of gas went berserk when his cartridge of gas was removed from him. He ransacked his house, and the police had to be called. In February, an 18-year-old boy was found to have permanent damage to a lung as a result of sniffing. Last month an 18-year-old girl, who had been sniffing all day, collapsed and died three days later from irreparable brain damage. In March, there was a fortunate escape by a 16-year-old girl who had been sniffing for a long time and who collapsed. Fortunately, the ambulance was called speedily. She lived near the ambulance station, and within three minutes of her collapse the ambulance men were there. They saved her with seconds to spare as she was turning blue. I am told by the local ambulance service that there is now about one call a day to deal with serious cases of glue sniffing. The ambulance men find that the young people can be violent and strong as a result of the intoxication to which they have subjected themselves.
  One of the particularly worrying factors that has come out of the research by Dr. Thorley and his colleagues is the way in which a small but significant number of those who have become serious addicts of solvent sniffing go on to hard drugs. After four or five years of sniffing glue, they turn to sniffing heroin and end up injecting it. Let me give two examples.
  First, there was an 18-year-old girl who had sniffed for seven years since she was 11. At 17 she started taking LSD tablets together with solvents, and spent 12 hours a day on that activity. It is hard for us to understand how young people can spend a whole day doing that, but she did, and she took heroin whenever she could get hold of it.
  Secondly, a 20-year-old girl had sniffed for six years from the age of 14. When she was 18 she moved on to LSD and heroin.
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  To add to the tragedies caused by abuse of solvents there is the danger of the activity extending into hard drugs, with permanent effect. On Second Reading I referred to a young man who told me that he had spent 12 or 14 hours a day consuming a litre of glue. It is terribly hard to understand how anybody could absorb a litre, but it appears to be a regular occurrence for hardened addicts. I am old enough to have difficulty in understanding litres. I am one of those who nowadays never knows how much petrol I am putting into my car except by the price. I tend to think of a litre in terms of the amount of whisky that one can bring back duty free from one's holiday. However, I am not sure whether whisky is a good subject to refer to in a debate on abuse—
  Mr. Robert Kilroy-Silk: There are more people addicted to that.
  Mr. Trotter: As the hon. Gentleman says, more people are addicted to whisky.
  I understand that a litre is 1¾ pints, and a pint is something that I do understand. From my earliest days, I have known the size of a pint of milk. Therefore, a litre is getting on for 2 pints. That is the quantity of these substances being consumed daily by some people. ft is a very large amount. The substances are also relatively cheap—much cheaper than whisky.
  At present the police are powerless to prevent glue from being deliberately sold to children for sniffing purposes. On the one hand, dollops of glue in old crisp bags are sold in kits tragically known as "happy bags", and, on the other hand, hardened addicts buy and consume a litre of glue. In England and Wales, the police are powerless to do anything about it. As we know, in Scotland, under the different legal system, it has been established that the police have the power to act. The Bill simply seeks to bring into statute law in England and Wales the rules which now exist in Scotland.
  I believe that the existence of such a law will act as a powerful and effective deterrent. On Second Reading the hon. Member for Knowsley, North (Mr. Kilroy-Silk) referred to the clang of gaol doors. I like that expression. I believe that the threat of the clang of gaol doors will deter evil shopkeepers. In the House we argue about the extent to which gaol sentences act as a deterrent to criminals. I believe that that threat will be a successful deterrent against the sort of person who is deliberately selling glue for that dreadful purpose.
  Not only those who deliberately sell glue but those who are wilfully blind will be affected. It is in no way my intention to put at risk the ordinary shopkeeper. Some shopkeepers have expressed concern, but no formal representations have been made to me on behalf of shopkeepers. I think that they understand, and I am sure that they all abhor the deliberate sale of poison in that way. The ordinary shopkeeper is appalled by it, as we all are, and understands that he is not being put at risk. I fully understand the problems that shopkeepers face when a child comes in and asks for a product. If they make a genuine mistake they will not be at risk. They should use their discretion and not supply the product if they have any doubt. I hope that they do so now. Shopkeepers in my area tell me that that is their practice. If a boy who they have reason to suppose may want to use the product for sniffing comes into the shop, they do not supply it. I am sure that they are right in not doing so.

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  For those who deliberately sell glue recklessly and without regard to what it might be used for, the punishment should be gaol or a heavy fine. The Bill provides for a six month gaol sentence or a £2,000 fine. When the Bill was drafted, I wondered whether the House might wish to alter those penalties, but it has not done so. Hon. Members have agreed with my judgment and that of my hon. Friend the Under-Secretary of State for the Home Department that that is the correct level.
  We had it in mind that the penalty could be imposed in the magistrates courts. It is widely felt that such an offence should be dealt with speedily before the magistrates. If they felt that an offender had behaved in an appalling and large-scale way, and that more than six months' gaol was called for, I imagine that they could impose consecutive sentences. I cannot conceive that a case would be brought on a single incident of selling glue. We are talking about people who have a record of selling it in large quantities.
  I remind the House that in Scotland gallons of glue were sold in small corner shops when in no way could gallons of glue have been needed in the normal course of business.. Some people were buying it a litre at a time and even more were buying those dreadful happy kits, with a few spoonfuls of glue in an old crisp packet. No shopkeeper would sell glue in an old crisp packet without knowing exactly what it was being used for. People doing so will be doing it on a large scale. It is possible for the courts to impose consecutive sentences if they wish. In Scotland, two-year gaol sentences were imposed.
  The police know who is involved in and guilty of such activity. The authorities in Tyneside told me that they have been aware that a fish and chip shop has also been selling glue. A hot dog seller is also known to have provided glue. No reasonable person could suppose that the sale of glue with fish and chips or hot dogs was a normal trading activity. It is the people who do such things that the Bill is designed to deal with, not the normal corner shopkeeper who has no wish to engage in this wicked trade.
  There has recently been an interesting development on Tyneside. After four years' research, a firm called Plus Products reckons to have produced a solvent-free glue. Glue is not the only problem—most of the serious accidents are caused by other substances—but in the case of casual sniffing glue is the substance most commonly sniffed. If a successful solvent-free glue could be produced, that would be a great achievement. Mr. Perry, who runs Plus Products, tells me that one could sniff the glue for as long as one liked and it would do one no harm, and that the glue performs just as well as normal glue. If that is so, the product has a very good future. The product is called Plustex C3530. That means little to me, but it may mean something to my more technically minded colleagues. It may be more expensive than ordinary glue, but it goes much further. We must follow that development. I shall encourage Mr. Perry to the best of my ability, and I am pleased that this breakthrough is a Tyneside development.
  There is a need for education by teachers and by parents, and for education of teachers and of parents. This matter does not fall directly within the scope of the Bill, but it has been suggested to me on Tyneside that all local authorities should be required to prepare a plan to deal with the problem in their area and perhaps to report each year on what they are doing about solvent abuse. There is a
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  precedent in that authorities are already required to prepare such a plan to deal with problems of cruelty to children. I am satisfied that everything possible is being done on Tyneside to deal with the problem, but I am not sure what is being done elsewhere in the country. It may be that other areas are equally aware of the problem. Nevertheless, it might be a good idea if each local authority had to produce an annual report.
  The solvent manufacturers are at present represented by the British Adhesives and Sealants Association. The members of that body are good citizens who are very much concerned about the abuse of some of their products. They have gone to considerable lengths to assist in dealing with the problem, and I understand that they have plans for even greater efforts in the future. The subjects to which they are devoting their attention are the alleviation of the suffering arising from abuse, the education of the public about the dangers, the promotion and support of research into the problems and the dissemination and publication of the results of that research for the benefit of the public. There may also be the endowment of scholarships for the support of relevant research work. The association proposes to increase its activities. I believe that it intends to hold an international conference on the subject next year. The House will congratulate the association on its efforts.
  The Bill is deliberately short, and I hope that it will be effective. It has a very straightforward aim. I believe that it will lead to the closure of an obvious loophole in the law. It will not eradicate the problem. The substances are too readily available in every broom cupboard, bedroom and bathroom as well as in the shops. It will not deal with the social and family problems that often give rise to serious abuse. However, it will provide a weapon to be used against the evil men who deliberately profit from this sick craze. The Bill will provide a weapon that does not yet exist, and will help to reduce the supply. Each death prevented will make the Bill worth while. The sooner the Bill appears on the statute book, the better.
  10.6 am
  Mr. Robert Kilroy-Silk: Once again I congratulate the hon. Member for Tynemouth (Mr. Trotter) on his initiative in bringing forward the Bill, his good sense in restricting it to a narrow and noncontroversial area, and his expertise in steering it so successfully towards the completion of its stages in this House. It is not the Opposition's purpose to delay or obstruct the Bill. We have some qualifications about what it may achieve in practice, and there may be some problems, but we support the Bill and wish to see it on the statute book.
  Solvent abuse does not attract as much attention today as it did at the time when the hon. Gentleman first thought of the Bill. It has been overshadowed—certainly in my own area of Merseyside—by the increasing problem of the use of heroin and cocaine. Heroin is now much more readily available, and there are increasing quantities of high-quality cocaine on the streets at relatively low prices. Those much more dangerous drugs are therefore now being used by a larger number and a wider variety of young people, some of whom might otherwise have used solvents. The problem has moved away from the abuse of solvents towards the addiction to heroin and cocaine.
  To some extent, the problem of solvent abuse disappears, as the user tends to move on from that form of abuse to other in many ways much more dangerous

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  drugs, or, indeed, to alcohol. Solvent abuse is not, apparently, the problem today that it was 18 months or two or three years ago. The problem is now much more serious, and on a much larger scale. However, we all know from experience in our constituencies that solvent abuse is a considerable problem, not least for the parents of the children concerned.
  We have all had letters from, or met at our surgeries, parents who are deeply worried and upset because they have found out that their children have been abusing solvents. They feel themselves to be failures. They feel helpless to confront the problem. They do not know how to deal with it. Quite apart from the problems for the user, solvent abuse certainly creates considerable problems and much distress for his family. There are also the incidental anti-social effects that have been alluded to. Many crimes are committed, not because the person concerned is inherently criminal or would in more lucid moments have embarked on an act of criminality, but because he—or she—is under the influence of some solvent substance. He might commit indecent exposure or burglary, or some more horrendous crime of malicious actual bodily harm. There has been one widely publicised case of murder. Such crimes can occur because of the effect on young people of sniffing glue or other solvents.
  More disturbing are the deaths, of which there were 282 from volatile substances between 1971 and 1983—there were 80 in 1983 alone—72 per cent. of which were of people under 20. As the hon. Gentleman said, the addiction tends to be concentrated in the younger age group. When considering how the Bill will work, it is important to note that 31 per cent. of those deaths were accounted for by the use of cleaning agents, 27 per cent. by the sniffing of glues and 24 per cent. by the inhalation of lighter fuels and the like. It is worrying that volatile substances can be the cause of death, but it is even more worrying that there is such a massive and terrible waste of young life in such horrible and disturbing circumstances.
  It is a great pity that the Bill and its passage through the House has attracted relatively little attention from hon. Members, many of whom want at other times to make great play of the problems of solvent abuse. They seem not to take a great interest in the subject when it comes to doing something, or attempting to do something about it.
  As I have said before, the Bill does not address itself to the real problem of solvent abuse, nor does the hon. Gentleman pretend that it does. It provides no more than that it will be an offence for a retailer to supply solvents to people under 18, knowing that they are likely to be inhaled. That is a perfectly reasonable objective. Nobody should knowingly aid and abet young people in this antisocial, unhealthy and distressing practice. If anyone is prepared to take that responsibility knowingly, he ought to be regarded as having committed a criminal offence and be convicted for it.
  Nobody should profit from young people's addiction to or affliction by solvents. In that regard, the Opposition have supported and will continue to support the Bill. However, most retailers do not knowingly aid and abet the purchase of solvents for sniffing. The overwhelming majority—99·9 per cent.—of retailers would not wish in any way to aid or abet such a practice or to profit from it. As the hon. Gentleman said, there are a few evil people who profit, but the vast majority are only too willing to abide by the Government's guidelines. My evidence is that
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  those guidelines are being adhered to conscientiously arid, in many cases, enthusiastically. It is perhaps not amiss that the Bill reinforces those guidelines.
  We must ensure that the public are aware that the Bill is limited. They should not have grandiose expectations of it. The Bill is limited simply by the fact that 39 per cent. of those who abuse solvents steal them. They will not be caught as a result of the Bill. A further 33 per cent. get somebody else to buy the solvents. When the Bill becomes law, that percentage will rise because young people will not run the risk of being embarrassed in public by retailers, but will get older and unaware people to buy the solvents. Only 15 per cent. of solvent abusers themselves purchase the product. it is therefore only that 15 per cent. who could be caught. It is obvious that that figure will change.
  Some people will be caught by the Bill. Some retailers will be identified as embarking on this evil, vicious and anti-social trade and be prosecuted and convicted. Nevertheless, I suspect that, when in two or three years' time we consider how the Bill has worked, we shall find that it has had little impact. I hope so, because I hope that most retailers are law-abiding. The real need, as the hon. Gentleman began to say, is for comprehensive health and social education of children likely to be at risk, and their parents. As with drug abuse generally, it is essential to give help, counselling and education to the parents of children who might become drug or solvent abusers. It is also important to have a well-thought-out strategy of training for professionals. Many social workers, health officials and teachers are not sufficiently trained in the recognition of symptoms or the type of help that they should give a solvent abuser or a drug misuser. I am aware that much is being done, but nobody will pretend hat it is enough. We should provide far more services for solvent and drug abusers.
  The central funding initiative and the £10 million is welcome, but it is not enough, given the increasing scale of the problem. If we are to believe what the Minister is telling every radio and television station—that we are confronted with an epidemic of heroin and cocaine abuse—and if the quantities of those drugs entering the country are increasing as alleged, it is clear that £10 million, significant though that sum is, is a drop in the ocean compared with what is needed to provide additional services for those in need.
  I shall put the Opposition's anxieties on the record in the hope that they will help to inform those who have to implement the Bill and because they should be on the record for when the other place considers the Bill and what changes might be appopriate. The first concerns the phrase, "reasonable cause to believe". Retailers must refuse to supply solvents to young people if they have reasonable cause to believe that that young person is likely to inhale them. Responsibility is put on the retailer to ensure that he is not committing a crime.
  I am not jibbing at that, but the problem is that many retailers might become over-cautious when supplying solvents to those aged under 18. Many young people might be prevented from buying perfectly innocuous substances such as paint strippers, petrol, glues and cleaning fluids which they, or somebody who has sent them, want to use for perfectly legitimate purposes. If there is a great deal of police activity and public concern about solvent abuse in a particular area, individual retailers may be over-timid about selling solvents to anyone under the age of 18. It would be most unfortunate if young people were

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  discriminated against and publicly humiliated in a crowded shop by a retailer refusing to sell an article to them, with the implication that they must be disreputable drug or solvent abusers.
  That problem has been compounded by the unfortunate remarks about punks made on many occasions by the hon. Member for Ealing, North (Mr. Greenway), whom I am glad to see present today. On every occasion the hon. Gentleman has identified someone dressed like or otherwise resembling a punk as being ipso facto a solvent or drug abuser.
  Mr. Harry Greenway: That is misrepresentation.
  Mr. Kilroy-Silk: It is on the record.
  Many of the voluntary organisations with which I am associated are staffed by people who adopt bizarre and frightening clothes and hair styles which I should certainly not adopt or wish my children to adopt, yet those people are the most sensitive and hard-working and often the most cautious and timid. To tar them with the brush of solvent or drug abuse, as the hon. Member for Ealing, North has done on three occasions in the House—
  Mr. Greenway: I have never done that.
  Mr. Kilroy-Silk: It is in Hansard. It is an unwarranted slur and I fear that it will compound the problems that may occur under the Bill. We cannot have retailers automatically refusing to sell glue to anyone with orange hair or studs round his belt. That is unfair to the retailer and to the young person and it will cause great animosity and controversy, which we can well do without. I hope that it will not happen and that most retailers will have a better knowledge of young people than that displayed by the hon. Member for Ealing, North and will use the powers provided by the Bill with far more sense than he would.
  I am also concerned about the meaning of the word "substance". How are retailers to interpret that concept? For instance, they may conclude that lighter fuel is a substance which they can refuse to sell, but that a disposable lighter is not. Again, Tipp-Ex thinner is presumably a substance, while Tipp-Ex fluid is not. A host of similar anomalies will arise if retailers are asked to make definitions which no hon. Member would be able to make and which lawyers may find extremely difficult to interpret. It will be no use if the potential abuser merely buys a different product which has the same effect but is not a "substance".
  The most important caveat about the effect of the Bill in practice is that it may restrict availability of the less toxic substances. The substance most widely associated in the public mind with solvent abuse is glue. In the House, too, when discussing volatile substances we tend to talk about glue sniffing. Therefore, retailers will tend to be most cautious, nervous and restrictive about the sale of glue. If that happens, young people will turn to aerosols, cleaning products and other substances which are more likely to be supplied but which do the most irreparable damage. Those substances are the killers. No one wants to legislate to ensure that young people switch from glue to even more dangerous substances, but that could be the unfortunate and unintended consequence of the Bill, and
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  we must guard against it. Retailers must be alerted to that risk. For that reason, it will be necessary to monitor the working of the legislation very carefully.
  Most important of all, we must not over-sell the likely effect of the Bill. We endorse and support its Third Reading, but we do not want it to raise false hopes or to pretend that it is a major step towards solving the problem of solvent abuse. Solvent abuse will continue on much the same scale the day after the Bill becomes law as the day before. We must also not pretend that the Bill deals with the problem of drug abuse in any real or meaningful way. We must not allow this legislation to distract our attention from the real issue of identifying and dealing with the causes of solvent and drug abuse.
  Above all, in the polite, all-party, non-contentious atmosphere that tends to prevail on Fridays in relation to Bills of this kind, when we are all working together as we should in the interests of all our constituents and irrespective of party politics, we must never forget that the major responsibility for dealing with drug and solvent abuse rests with the Minister and the Government. It is their problem, but in many cases they are not living up to their responsibilities in the way that they should.
  We must also take into account the social and economic circumstances in which solvent and drug abuse flourish. Whatever the actual causal relationship, we know that there is a major and significant relationship between high unemployment, poverty, social deprivation and inadequate housing and the problems of solvent and drug abuse. Of course, as recent well-publicised instances have shown, some people at the top of the social scale with good job opportunities and large incomes are solvent or drug abusers. We do not deny that. Nevertheless, the largest concentration of solvent and drug abuse is in decaying inner city areas and in the decaying outer estates of areas such as mine. The Government have a great responsibility for having created those conditions, and an even greater moral responsibility to take action to eliminate those social and economic conditions and the abuses to which they give rise.
  10.27 am
  Mr. Harry Greenway: It is a pity that the reasonably well-informed speech of the hon. Member for Knowsley, North (Mr. Kilroy-Silk) included a totally ill-informed, unwarranted and disgraceful attack on me. The hon. Gentleman had the gall to claim that I classified all punk rockers as glue sniffers because on one occasion —not two or three—I thought it right to bring to the attention of the House a most distressing example that I had witnessed of glue being sold to a punk rocker. I hope that the hon. Gentleman will do his homework properly next time. I remind him of what I said on that occasion, and I stand by it. I said:
  "I went into a well-known shop the other day, and as I was being served a punk rocker came in. He asked for glue and was sold glue. A man standing next to me said to the person who had sold the glue, 'You know that glue is going to be abused.' The man behind the counter said, 'Yes, I do, but what is it to me if people choose to kill themselves in that way?' That is disgraceful. The Bill will overcome that and I welcome it in that spirit."—[Official Report, 18 January 1985; Vol. 71, c. 660.]
  That is the single example of a punk rocker that I used. I took one instance, and the person buying the glue just happened to be a punk rocker.
  When I gave that example, I was not saying that all punk rockers are likely to do the same thing in the same

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  way, just as I would not say that somebody who is dressed in a particularly slick way is a slicker and financially devious, and that all other slickers are the same. I would not bracket all City gents with the actions of one City gent, however sweet and charitable, or whatever. The hon. Gentleman has some knowledge of these matters and he is usually an honest debater, but it was unworthy of him to speak like that.
  I join in the hon. Gentleman's congratulations to my hon. Friend the Member for Tynemouth (Mr. Trotter) on his great success in bringing the Bill before the House and on the fact that it will be the third Bill that he has got on to the statute book. That is no mean achievement for a Back Bencher.
  The problem of glue sniffing relates to all ages, from tots to adults, and even people in middle age. We know that on average 10 per cent. of all children in schools sniff glue. In some schools the percentage is as high as 14 per cent. and rising, so it is a serious matter. Between 1971 and 1981 there were 169 deaths from glue sniffing. In 1981, there were 45 deaths, and in 1983, there were 80 deaths, as the hon. Member for Knowsley, North said, and the figure is still rising.
  In between the first sniff of glue or solvent and death all sorts of damage can be caused to the individual. We hope that elimination of such problems will be helped by the Bill. From the staggering around of tots who have sniffed glue to the deaths of people of all ages from glue sniffing, people can suffer the most terrible brain damage. I know about one man whose brain was so damaged by glue sniffing that, on release from prison, he was unable to lead a coherent normal life and was soon back in prison because he committed further offences.
  I hope that the Bill will go some way, although I know that it will not go all the way, towards overcoming the problem. I have presented two Bills to the House relating to the problem of glue sniffing and solvent abuse because of my long concern over the matter. I have received four petitions in two years from constituents—two from head teachers, one from a parent and another from a classroom teacher—each with hundreds of signatures and in one case with thousands. They have all pleaded for action. Effectively, the Bill is the first action that the House has been able to take since I received those petitions. The fact that they came from parents, teachers and head teachers is a sign of the particular concern felt by those who are involved in bringing up and educating young people.
  I should particularly like to see more glues of the type mentioned by my hon. Friend the Member for Tynemouth as being produced in his constituency, which are solvent-free and therefore not open to any abuse. Dunlop has produced such a glue as well, as has EVODE. I hope that all manufacturers will bend their minds to the production of such glues, because it has been shown that it can be done.
  Education is part of the answer in the long term. However, there is heavy pressure on the school curriculum, so there is not much room for a great deal to be said about the problem of glue sniffing when teachers have also to deal with drugs and so many other problems. We shall be heavily dependent upon what the Bill can do to lessen the difficulties that glue sniffers and their families are facing.
  I welcome the Bill for its limited value in making it a committable offence deliberately to supply toxic substances to young people for inhalation. That brings
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  English law into line with Scottish law, and the supply of toxic substances into line with the peddling of drugs to some extent. The two are closely related.
  Motivation is obviously an important factor. That needs to be emphasised, so that shopkeepers and shop assistants do not feel too stressed when faced with the consequences of the Bill. From my knowledge of the matter, I know that those addicted to solvent abuse can buy as much as a litre a day. If a shopkeeper or shop assistant is asked for such a quantity of solvent every day by the same youth, such an individual should become suspicious. The Bill will cover such circumstances. Therefore I welcome it.
  It is clear that those who are addicted are keen and sometimes desperate to get a regular supply of solvent, with no questions asked. Therefore, they are not likely to go to the same shop every day, once the Bill comes into force. That, perhaps, is one of its weaknesses. Mothers of addicts have written to me about their children's problems and expressed frustration about the Bill. They feel that there are so many different outlets where addicts can purchase solvents—DIY shops, department stores, local shops, Woolworth, and so on—that they need never arouse suspicion. That is especially true of large shops which have frequent staff changes, tea breaks and shifts and many different cash points.
  Much depends on where addicts live, but it seems characteristic of addicts that they are devious in pursuit of their addiction, and we need to bear that point in mind as we examine the Bill on Third Reading. Recently, I received the most harrowing letter that I have ever received, from the mother of an addict. Her son, who has indulged in solvent abuse for three years, is now 18 years old. His name is Daniel. He is a Londoner, but he could come from anywhere. The mother argues that his addiction has helped to cause the death of her husband, the loss of her addicted son's job and the break-up of the family.
  The worst part of the story is that the mother cannot get any help from anywhere. Everyone has washed their hands of this lad. While he was still legally a juvenile, the police would take him in for his own protection for being drunk and disorderly on glue, which he had been free to purchase, but which he may be less free to purchase as a result of the Bill. Other support aid agencies no longer take an interest. What is almost worse is that he is a social outcast, and unemployed. His mother thinks that he now sniffs glue almost 24 hours a day.
  Does any agency exist that can help, if prompted, in this situation? If it does, I should be glad to know of it, because this Third Reading debate gives an opportunity to draw attention to what the Bill is seeking to do and perhaps to relate other curing agencies to it at the same time. There are many such sad cases that desperately need help.
  I support the Bill strongly for its limited value. It will end the terrible, wicked situation of which my hon. Friend the Member for Tynemouth spoke when he moved the Second Reading and again today, whereby people can go into a shop and buy fish and chips and glue at the same time. That is dreadful and wicked. It is an obvious abuse with which the Bill will deal.
  I went recently to a church residential centre where a youth high on glue had cut his wrists and run amok one night. The priest in charge told me that that youth always went to the same place and had no difficulty in obtaining glue. The youth received hospital treatment, and with bandaged wrists returned to the centre a day to two later, when again he ran amok. The priest in charge and otters

  539
  had the terrifying and difficult job of trying to control, help and save him from himself while he was high on glue. It appeared that he had purchased the glue at the same place, even though it must have been obvious to the shopkeeper that he was in an unstable medical condition. The Bill will ensure that that sort of thing does not recur. I felt agonised for those who were attempting to deal with that youth. The law is weak without the amendment that the Bill will introduce. There is no referral agency that the church residential centre can call in aid.
  Surely it is right to punish drug pushers and shopkeepers who knowingly sell glues and solvents to would-be sniffers. The Bill is absolutely right in principle. Some shopkeepers have told me that they expect to face considerable pressure and stress as a result of the Bill when they refuse to sell solvents to regular clients. We should not make too much of this, but the House should face the problem and offer some advice to individual shopkeepers who will be obliged to refuse to sell glues and solvents to those who are already high on them. Shopkeepers must not panic. They should try to lecture the youngster or expect very much self-control on his part. No purpose will be served by being critical of him or by giving him lectures. I think that shopkeepers would be well advised, when faced with that situation, to call in the police or the help of social service agencies. The House must accept that difficulties may arise as a result of the Bill's enactment and should offer coherent advice.
  In the Daily Express of 18 April, and in one or two other newspapers, there were reports of the deaths recently of two glue-sniffing brothers who died within four weeks of each other while in council care. Their heartbroken mother, Mrs. Angeline Coyne, who is only 37, said:
  "If it had not been for glue sniffing, my sons would be alive today, yet no one seems to be able to do anything."
  I have spoken to medical people and there is no doubt that glue sniffing is the thin end of the wedge which leads to general drug abuse. We are aware of the seriousness of drug abuse, and the link between that and glue sniffing is clear. One leads to the other. It seems that glue sniffing is part of the general drug abuse scene. That is emphasised by the report that appeared in the Daily Express and in other newspapers.
  The chairman of the Leeds social services committee has claimed that the police are turning a blind eye to the problem, but we must recognise that the police do not have the power that they need without the enactment of the Bill. That is why I welcome it with renewed zest and enthusiasm.
  I shall conclude by reading a short extract from the letter of the mother of Danny, who, as I have said, has been a glue sniffer for three years. He is now thought by her to be sniffing glue 24 hours a day on some occasions. He has his known sources of procurement. However, he will be limited, to some extent, in that procurement because, when the Bill is enacted, he will not be able to go to the same sources. The shopkeepers know him. They know that if they serve him glue he will sniff it. Once the Bill is enacted, they will be aware that they will be breaking the law if they sell him solvents. They will be aware also of the penalties for doing so.
  Danny's mother wrote:
  "Danny got on the Youth Training Scheme—he loved it. He also went on work experience to one job learning car mechanics for three months and then to another job to do arc
  540
  welding for three months. The only time he went glue sniffing was at the week-ends and it looked like we were getting back to being a normal family again. I felt sorry for my younger son Peter, because he is a good boy and he has to live with all the misery of his mother and brother.
  The last job Danny did closed down at Christmas, and he hasn't even looked for a job since. He is probably on glue 24 hours a day. He takes it to bed with him and starts sniffing the minute he wakes up, so we have rows every morning and night now. I have told him to go out and not come back, but where can he go? We have no other family or friends. All Danny's mates have grown out of glue and ignore him now. I think he is always on his own. Last week the Careers Office 'phoned him and asked him to go and see them, and he came back and said he had an interview for a job in the Cumberland Hotel in two days' time, but he had to wear black shoes and black trousers, which he didn't have because he always wears jeans and trainers. He was so enthusiastic about getting this job as a bus boy. I went out with him and spent my electric bill money on getting him a pair of black shoes and trousers, which cost me nearly £40, but I was hoping he might get the job. He looked really smart and I was just as disappointed as he was, when he didn't get the job. So we are back to square one again.
  A few days ago, Danny came home early and locked himself in the bathroom to glue sniff. He started shouting and swearing and saying he wished he was dead."
  Danny is 18. The letter continues:
  "He was sick of this life, and me, and this house, and his brother. I tried to speak calmly to him. I was scared he might try and kill himself, when my younger son came in and tried to break the bathroom door down. I 'phoned Carter Street Police Station and asked them if there were any Police passing could they call here, because my son was a glue sniffer and he had locked himself in the bathroom and my other son was trying to break the door down trying to get him out. (No wonder nobody talks to us.) Five minutes later two Officers called and they persuaded him to come out. One of the Officers took him into his bedroom to have a talk and I helped the other to find the tin of glue. He said he would take it away. They said its a shame to see a young boy in such a state, there are so many kids on glue or drugs these days, but Danny wasn't breaking the law, its O.K. to sniff glue. They admired all his boxing trophies in the front room and asked him if he was still boxing. He said 'No', and they went. They also told me to 'phone up anytime we needed help. The next day Danny was back on glue. When I think that there are so many places for drug addicts so much help also for alcoholics and even gamblers, but people don't realise that glue is dangerous. It's only if it is in your own family do you find out all the misery and upset it can cause. We are not a family any more.
  It is so easy to buy solvents."
  This is where the Bill will help. Danny's mother adds:
  "All the DIY shops must know when a boy goes in each day to buy glue what he wants it for? Do they care? Even Woolworths sell it. It is too easy for any child to get started and end up hooked on it, just like a drug, that can cause so much heart break for a victim and his family who have to live through all this with him. We are watching him kill himself with a slow poison.
  Please do something before it is too late for my son. I don't want him to be just a memory."
  The Bill will help a little.
  10.49 am
  Mr. Ted Garrett: The hon. Member for Tynemouth (Mr. Trotter) and I represent neighbouring constituencies. We are both well aware of the scale of the problem in the north-east, especially in the Tyne and Wear area, and we are saddened and concerned about the number of our constituents who have lost children as a result of the problem.
  Oddly enough, I first raised the matter some five years ago, and it was referred to the Minister for Consumer Affairs to ascertain whether the chemical industry in particular could make a product with adhesive qualities without being dangerous. I regret that after much research the chemical industry cannnot find the right product and the adhesive manufacturers, who in the main purchase

  541
  from the large chemical companies, have also admitted defeat. Therefore, I am somewhat heartened to learn that a firm on Tyneside, Plus Products, may be moving towards some solution, or partial solution, of the problem, but it would be foolish to be too optimistic, given the scale of the problem.
  I must disagree with the hon. Member for Ealing, North (Mr. Greenway), because the Northumbria and Durham police have involved themselves considerably in this matter. In my constituency the police, in co-operation with councillors, have organised a series of public meetings and have shown the horror films on this subject. They have had good support from teachers, social workers and many youth organisations in the area, but regrettably, the problem continues on the same scale.
  In last night's edition of the Newcastle Evening Chronicle there was a report of a public meeting at Consett which was attended by over 400 people who went to hear the experts speak on the dangers of various drugs. A mother, who is not named, told the horror story of her son who is being paralysed as a result of drug abuse. I shall not give details of the particular method that he used because I do not want it to receive too much publicity.
  I also want to pay tribute to the provincial press, particularly The Journal and the Evening Chronicle, for their long, sustained and responsible campaign to highlight the scale of the problem. It is noteworthy that in this article Detective Inspector Harvey Harrison of the Durham drugs squad highlights the responsibility of parents in analysing their children's behaviour. He highlights some simple points, which it does not take an expert to observe. He says that parents should look for glazed eyes or slurred speech, tinfoil used for the smoking of heroin, minute scales used for weighing drugs, a general lack of interest in appearance and dress and, above all, whether a normal healthy child has a lack of interest in the opposite sex. Clearly, those basic symptoms should be readily observed.
  I should like to see such matters raised more publicly. A long campaign is required. The problem will not go away. I disagree somewhat with my hon. Friend the Member for Knowsley, North (Mr. Kilroy-Silk) when he says that the drug problem is superseding that of solvent abuse. The drug problem is increasing in the United Kingdom and it is causing the Minister much concern. I congratulate the Minister on his visit to America. He used valuable time during his Easter recess, and he did so wisely, obtaining good, responsible publicity thereafter. The BBC helped the Minister to highlight the problem that could arise in Britain, and the House should commend the Minister and his advisers for that initiative.
  I concur with the views of the hon. Member for Tynemouth on Newcastle university's academic staff. They have played a prominent part and have been patient and kind and considerate to me, in particular, when I have asked for information.
  This is a sombre subject and I cannot envisage any magical solution to the problem. I hope that the Government will continue to publicise the use and abuse of drugs as they have been doing in recent leaflets. I should also like to see another campaign, perhaps in a region such as the north-east, on the narrow subject of solvent abuse. If we can do that, despite the cost, we may be able to bring the question responsibly to the fore.
  I have time to make only a short speech and I hope the Minister and other hon. Members will forgive me if I have to leave shortly, but I shall be back soon. The hon.
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  Member for Tynemouth's Bill will receive my support and the wholehearted support of the people in the northern region. It is as far as we can go, bearing in mind the limit of our knowledge on the subject. Therefore, I hope that the House will give the Bill its Third Reading today and that it will have a successful passage in another place.
  10.57 am
  Mr. Tony Speller: I speak from a completely different viewpoint from that of every other hon. Member who has spoken so far today. In the first place, let me disclose my financial and personal interests on the Bill. I am a small shopkeeper and a member of several chambers of trade and commerce. I have an honorary role looking after the interests of the National Federation of Retail Newsagents — a host of small shopkeepers. I cannot but support the Bill because its principle is so good, even though it will be almost impossible to implement in practice.
  Every hon. Member who has spoken so far has said, "Yes, but". They have all said that the Bill is a good idea, but have asked whether it will work. Some of the quotes that I have jotted down this morning include, "No one knows how many take part in glue sniffing," "the official list is not complete," and "it is a bit hard on the shopkeeper because he may be in court as a result of an incomplete list."
  I was amazed to find that my own shops sold many of the substances listed. My business deals with drawing office and art materials. It had never occurred to me that a glue sniffer would come in to one of my shops, but I was told only yesterday that a young man, bearing all the signs of being, as my staff had been advised, a glue sniffer, had come in the previous week to purchase a solvent. It was a well-known proprietary brand of gum which we all use for pasting up our election literature. It must be able to be applied and removed or moved once in place. I suspect that there are many more adhesives than my hon. Friend the Member for Ealing, North (Mr. Greenway) knows about. There are low tack, high tack and many other degrees of stickiness.
  The girls in the shop, bright intelligent young ladies, had a quick conflab and agreed not to supply that young man—quite rightly. Unfortunately, it turned out that he was over 18 and the son of a local architect purchasing the glue for a respectable practice. We have lost that customer for ever and the girls have lost their commission. I do not criticise those girls, because they were right to act as they did, and I congratulate them, but that is a perfect example of how an excellently intentioned legal sledgehammer may miss the nut at which it is aimed.
  How long will we go on persecuting the small shopkeeper simply because hon. Members feel that what the House is doing may improve things? I do not deny that the Bill should make matters marginally better, but by only a jolly small margin.
  Another comment was that there is no magical solution. Of course there is not. The retail trade welcomes and supports the guidelines and principles of the Bill, but we already have voluntary guidelines, which my hon. Friend the Under-Secretary of State for Health and Social Security said some months ago in the House were working reasonably well. I do not doubt that the principle is good, but I doubt the practice. I suspect that the measure may fill the courts with small shopkeepers, but I doubt whether it will stop many round-the-corner glue sniffers.

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  I entirely agree with the hon. Member for Knowsley, North (Mr. Kilroy-Silk) that appearance does not matter a pennyworth in terms of what people will do with solvents. There are so many solvents that it cannot be fair to put this legislation on the statute book, although my hon. Friend the Minister has inserted a clause which provides for vendors who have acted reasonably and responsibly.
  A corner newsagent is busy in the early hours of the morning and evening sending out newspapers. The staff will be good people and, probably, part of the family or part-timers. How can they be expected to tell that a person is under 18? Can any hon. Member genuinely tell the age of a boy or girl? A 14-year-old who was 6ft 2in came to see me recently. I knew that, but no shopkeeper could possibly have known that. I suspect that when cases do come to court, the person alleged to have bought the solvent on behalf of the defendant will turn out not to be the buyer, because glue sniffing has almost become a party sport. That sounds horrible, but sniffing tends to be done in groups. The lad or girl who is sent to buy will look 18.
  The shopkeeper must first judge a buyer's age, but that person may be buying balsa wood cement for an aircraft kit. Which 10-year-old has not done that, let alone a 17-year-old? The shopkeeper has not made the product that he sells, but has bought it in good faith from the manufacturer. He is no chemist. He may be an expert in art, newsagency or pharmaceutical matters, but these substances are now available in almost every chemist's shop, now that chemists' shops are retail shops, as are garages these days.
  We are drawing a net with extremely large holes. I suspect that we shall catch some rather small fish, which will probably not be worth the cost of the net in the first place. That may be an extreme view. Although no hon. Member will vote against the Bill, the measure relies on the shopkeeper to make a judgment which is both onerous and unrealistic, especially regarding age.
  Many young people look older than they are, yet the seller must decide on their age. How many retailers of cigarettes, for example, are prosecuted for selling to an under-age buyer? The same applies to obscene publications. It is hard on the shopkeeper if he must make a snap judgment and someone else may be judge and jury in his case at court.
  The variety of solvents is legion. I had to write their names down because they mean nothing to me. They include toluene, hexane, acetone, amyl, acetate and benzine. Many of those items are for the home. Ladies need butane refills for the things that they use to curl their hair, and they use hair lacquer sprays. Can we expect a retailer to divine whether a normal-looking person —99.99 per cent. of the time the person will look perfectly ordinary and normal—is under a certain age and that having obtained a butane refill for mother's curling tongs will give it not to mother but to someone else?
  We must not forget that most small shopkeepers rely on repeat trade. There are two sides to that. If a genuine customer, or his son or daughter, is refused service, he will not return to the shop. That is fair enough, but not from the shopkeeper's point of view. The ordinary small shopkeeper is probably the most respectable person in society. I say that in full knowledge of the fact that there are only five shopkeepers in Parliament and many more
  544
  attorneys, accountants, schoolteachers and other folk. A small shopkeeper who finds himself in court will suffer from being taken to court. However, that is nothing to his further suffering, even if he is found innocent, as he almost certainly will be, because the burden of proof under the Bill is hard on the prosecution. He will feel the social stigma of being taken to court. If it is a small newsagent, who will mind the shop while he is in court? Will the person who minds the shop be as vigilant as the shopkeeper in watching to whom he sells the goods? If a shopkeeper misjudges the circumstances, he could literally find himself in gaol, not for criminal intent, but for a misjudgment. That is inequitable.
  On Second Reading the Minister congratulated my hon. Friend the Member for Tynemouth (Mr. Trotter), as I do, on the narrowness of the Bill, in that it is intended to get at the pusher. The more that I have considered the Bill since volunteering to serve on the Committee on the Bill and following its passage, the less sure I am that we shall catch pushers. Indeed, what would we do with an under18-year-old pusher if we caught one? Will the result be as sad as that of the case mentioned by my hon. Friend the Member for Ealing, North, in which the user merely got the supply from elsewhere? Supplies are readily available. The only answer is for the substance on the market not to be a substance that can be used. That will involve research and patents. Moreover, glues and solvents are cheap and necessary in every sector of our life. I do not see that solution arriving in the short term.
  When the Second Reading of the Bill was announced, the headline of the Evening Chronicle in the north-east, which is not a paper I normally read, stated:
  "Police set to Pounce on Evil Dealers — M.P. Tells Commons."
  Even bigger headlines referred to "Corner-shop Killers". One may say that that is over the top. The Minister may say that the Bill is loose and narrow and not intended to catch the good shopkeeper, but I wonder whether that will be the case. Following that heady headline, the editorial referred to corner shop owners who sold glue-sniffing kits to children as being evil. The editorial states that my hon. Friend the Member for Tynemouth stunned Parliament—I suspect that the House was as crowded as it is—today with a catalogue of horrors.
  The Daily Express questioned whether the proposed punishment was tough enough. The press are selective in pursuing a campaign for a perfectly good principle. None of us could deny that. However, we cannot let our national newspapers see in every corner shop a wicked man intent on making a fortune from selling a small tube of glue, probably at the recommended retail price or 2p off. Thank heaven there is no incentive for corner shop retailers to sell these products to a person who will misuse them. Moreover, the product is generally sold industrially in vast quantities; indeed, hon. Members have referred to tons of glue.
  One of the problems is the fact that there are so many types of glue. I have about 18 different types of adhesive in my business, which are used for everything from modelling, to mending bits and pieces, to mounting paper. When people think of glue, they forget that fact. We know that it is extended to hair sprays and butane refills. Who knows to what else it will be extended? I suspect that every office in this building has something which could be sniffed. I understand that even matches can be used in some circumstances.

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  Without wishing to labour the point or detain the House, I need an assurance from the Minister that the intent of the legislation is to bring down the weight of the law only on those who would make it their business to push intoxicating substances on people under the age of 18, and that it is not intended, and may not become, a charter to victimise small shopkeepers. I know that that is the intention of the House, but we are a long way from, for example, the shopkeeper who has got up the nose of the local environmental health inspector or one from the local trading standards office. It is not difficult to make a case with such blanket legislation.
  The Bill has caused great anxiety among small shopkeepers. We shopkeepers feel somewhat naked. We are aware of all the Acts and restrictions, and we try to obey them. I do not suppose that any small shopkeeper, who stands to lose his business only too easily in these days of harsh competition, wishes to promote drug pushing or the awful abuse about which we have heard. I must tell my hon. Friend the Minister and my hon. Friend the Member for Tynemouth that, although I accept the excellent principle of the Bill, I believe that in practice more shopkeepers than pushers will end up in court.
  11.10 am
  The Parliamentary Under-Secretay of State for the Home Department (Mr. David Mellor): Three months ago, during the Second Reading debate, the Bill was unanimously and rightly supported by the House. The Bill had a short and highly sucessful Committee stage, and has now returned to the Floor of the House. As I suppose is inevitable, several points have been raised now which show less than fullhearted support for the Bill. My hon. Friend the Member for Devon, North (Mr. Speller) spoke with his usual eloquence and sincerity, and the hon. Member for Knowsley, North (Mr. Kilroy-Silk) also raised one or two points of detail. The hon. Gentleman said in Committee:
  "The fact that no one wants to table amendments to it and that no organisation outside the House with a knowledge of, interest in or experience of the Bill whom I have approached over the last weeks has any caveats or qualifications to make about the Bill is again a tribute to the sense of the hon. Member for Tynemouth."
  Since then the hon. Gentleman has found a few caveats, and I shall be happy to reply to them on the basis that they were sensibly advanced and not intended as an exercise in nit-picking.
  My hon. Friend the Member for Tynemouth (Mr. Trotter) took an interest in glue sniffing for many months before he was fortunate enough to secure first place in the ballot for private Member's Bills. This enabled him to make this most useful change in the law, and I congratulate him on the skill and moderation with which he has piloted the Bill through the House, and wish it every success in the other place. The care with which my hon. Friend monitors the problem in the north was apparent from the examples that he gave today. I also wish to associate with that observation the speech of the hon. Member for Wallsend (Mr. Garrett), who is the epitome of gentlemanliness and courtesy in the House. I thank him especially for what he said about my efforts to ensure that there is responsible information and comment on these profoundly difficult related social problems of glue sniffing and drug abuse.
  Several hon. Members have said that glue sniffing has left the headlines in recent months, but there is no evidence
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  to suggest that glue sniffing is less of a problem now than when it featured largely in the headlines. Although the focus of attention has inevitably shifted towards other drugs, my right hon. Friend the Secretary of State for Social Services, my hon. Friend the Under-Secretary of State for Social Services who is responsible for the matter, and myself—I am responsible for the law and order aspects—remain especially troubled by glue sniffing and most anxious that the efforts being made by communities to resist glue sniffing should continue. The effort must not be left to the Government alone.
  It was most timely, although a tragic occurrence which one would wish had not happened, that my hon. Friend the Member for Tynemouth was able to tell the House of a coroner's inquest at Leeds this week. Tragically, two brothers aged under 16, in unrelated incidents, probably died from solvent abuse. It certainly appears that both of them were solvent abusers. The problem has not gone away.
  On Second Reading I gave the House some details of the number of deaths that can be attributed to solvent abuse. I mentioned the steep increase in recent years, from 29 deaths in 1980, to 45 in 1981, 60 in 1982 and 80 in 1983. I said then that, on the figures available for 1984, it appeared that there might be a reduction, which would be welcome, but I said that all the statistics had not been analysed. It now appears that the figures for 1984 will he broadly similar to those for 1983. That has two lessons for us. First, we might draw some hope from the fact that deaths did not increase in 1984 as they did in the years leading up to 1983. Secondly, it might suggest that glue sniffing is reaching its peak, although one would not wish to draw too many conclusions from one year's statistics.
  The fact that nearly 80 youngsters may have died in 1984 from the effects of glue sniffing is not a matter about which any of us can be complacent. It is 80 youngsters too many, and it strengthens the point that I made earlier, which was echoed by many hon. Members, that we must not let the problem of glue sniffing slip out of our minds.
  No one makes large claims for the Bill. The hon. Member for Knowsley, North recognises the narrow compass of the Bill, and said in Committee:
  "What it does is simply to plug a loophole that none of us realised existed, because none of us thought that there were such evil people around who would deliberately and premeditatively supply so-called glue-sniffing kits to vulnerable young people." —[Official Report, Standing Committee C; 30 January 1985, c. 4.]
  It is highly relevant to the speech made by my hon. Friend the Member for Devon, North that he should he aware of the dilemma caused to my hon. Friends the Members for Tynemouth and for Ealing, North (Mr. Greenway), who have taken such a consistent interest in the matter, and indeed to the Government, when the Scottish shopkeepers' case was decided at the end of 1983. Two Glasgow shopkeepers had cynically set out to corrupt children by selling them so-called glue-sniffing kits—glue and paper bags to put over their noses while they were sniffing—in return for receiving stolen goods from those children. They had plainly set out to run a Scottish version of Fagin's den, using glue as the bait with which to attract children. They had stored large quantities of glue in the basement of their shop for that purpose.
  Rightly, it was made apparent in the Scottish courts that such activities were not acceptable and were a breach of the criminal law, and those men were sentenced to long periods of imprisonment. Then came the problem. As

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  custodian of the criminal law of England and Wales, the Home Office was obliged to consider the matter, and it discovered that there was no equivalent provision to the Scottish common law which would have permitted those two shopkeepers to be brought before the English courts had they committed the offence in Tynemouth, Bideford, Knowsley, Putney or Ealing. If it had been discovered some months later that an unscrupulous shopkeeper in Ealing, Putney or Tynemouth thought that this seemed a good way of making money, and knew that he could not be prosecuted, the Government and the House would have been condemned by the public for having allowed the loophole to remain open.
  Mr. Kilroy-Silk: Although I agree with the hon. Gentleman, will he remind me about one matter, because I have forgotten? I believe that there was a case in England involving a former policeman. He was convicted of selling glue-sniffing kits to young people. Under what law was he prosecuted and convicted?
  Mr. Mellor: We have very few documented cases in England, and they did not result in any penalties being imposed. I believe that the individual referred to by the hon. Gentleman was brought before the court on matters which did not allow the court to impose any substantive penalty. The attraction of my hon. Friend's Bill is that it allows the imposition of a large fine and six months' imprisonment. Whether or not the hon. Member for Knowsley, North is right when he suggests that similar cases have come before the courts in England, our clear advice is that there is no crime known in the English criminal calendar which precisely fits the terms under which the Scottish shopkeepers were prosecuted and sent to prison for a significant period. Obviously, I cannot be expected to know of every case settled in the English criminal courts. It would be of considerable assistance if the hon. Member for Knowsley, North would write to me about the case that he has in mind.
  In passing my hon. Friend's Bill, the House is doing the very minimum that could have been expected in the wake of the Scottish case. Not to have acted would have exposed us to real criticism, but now we come to the matters raised by my hon. Friend the Member for Devon, North. Once we start to impose criminal sanctions on what hitherto has not been criminal, that cannot always be all gain. Whether an offence has been committed is never at the margins the easiest issue to unravel. I can well understand the apprehensions of shopkeepers, especially in the light of some over-coloured and rather tendentious press comments about the implications of the Bill.
  The question put to me by my hon. Friend the Member for Devon, North can be answered in the terms that he wants to hear. This is a long-stop Bill designed to deal with those who knowingly or recklessly become involved in behaviour akin to that of the Scottish shopkeepers. It cannot be used to penalise shopkeepers who make an honest mistake and in good faith sell a substance which is capable of being used to cause intoxication to a youngster who, unbeknown to the shopkeeper, subsequently abuses it. I have to say in categorical terms that no shopkeeper who acts in good faith is placed in any jeopardy as a result of the Bill.
  Mr. Greenway: This is very important. Will the Home Office issue guidelines about possible symptoms in the regular glue sniffer which might help shopkeepers? They need some sort of guidance.
  Mr. Mellor: I agree, and I am happy to tell my hon. Friend that that has been done already.
  Mr. Greenway: Can it be done again?
  Mr. Mellor: I do not know whether it needs to be redone. The information is available. What is important is that shopkeepers who require guidance should know that that guidance is available and should set out to obtain it. I am sure that the various organisations represented by my hon. Friend will play their part in disseminating this information.
  As the hon. Member for Knowsley, North knows, we have been pursuing a range of policies to try to ensure that the dangers of glue sniffing are brought to the attention of parents and children by the provision of a leaflet which can be made available. I can tell the hon. Member for Wallsend that about 500,000 copies of the Health Education Council leaflet have been produced. I shall arrange for some to be sent to the hon. Gentleman. Because we attach importance to local counselling and local efforts, one panel of the leaflet has been left blank so that it can be overprinted by local organisations to give details of local counselling groups or individuals who may be contacted. We are extremely gratified to know that 500,000 copies have been distributed, because that is a major achievement.
  A video has been produced by the Central Office of Information. It is entitled "Illusions" and is devoted to glue sniffing. In fact, it has won a prize. It is available to be borrowed and it has been borrowed on about 2,000 occasions for the use mainly of professional people, teachers, youth workers, parents and the like who wish to become acquainted with the problem. A number have also been sold. Again, if anyone wishes to make use of that film, it is available. It is regarded as one of the best information films available, and that is why it won the prize that it did. Its success has encouraged us to ask the same people to produce a similar film to help people who are trying to combat the wider implications of drug abuse in their communities.
  Mr. Garrett: I have seen the film to which the hon. Gentleman referred, and it is of exceptionally good quality. However, it underplays a very important source of these solvents, which is from industry. There is a lot of petty pilfering of solvents that are used in industry, especially in heavy industry, and it is very difficult to apprehend the pushers. More publicity in this direction would be extremely useful, not necessarily to shopkeepers, but to employers, trade unions and anyone caught taking the stuff away and passing it on to young people.
  Mr. Mellor: That is very helpful.
  I can tell my hon. Friend the Member for Devon, North that the Government are well aware of how easy it is to rush into action which proves in the longer term to have been misguided. That is why we took so much trouble, when trying to work out the appropriate steps to be taken, to consult interested organisations. In January 1983 we issued two circulars. The first one was to retailing organisations asking for their assistance in devising a set of guidelines to shopkeepers to help them restrict the sale

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  of solvents to people who should not have them and giving advice on where these products could be located and the range of products that could be abused. The second circular was sent to a wide range of community groups, magistrates' associations and groups involved in the criminal justice system generally to inquire what intervention from the criminal law would be helpful.
  I deal with the latter point first because it has turned out to be the least controversial. The almost unanimous opinion of the several dozen groups contacted on the criminal law point was that it would be wrong to make the sale of solvents to anyone under 16 a criminal offence. It would have caused tremendous problems to retailers, and we have never contemplated doing that. We were also advised that glue sniffing should not be made a criminal offence. We want to help children who sniff glue, not punish them. We do not want to drive the problem further under ground by making it a criminal offence, which might even add to its attractions for some youngsters.
  The only intervention in the criminal law that we have been minded to make is the limited intervention which, with his customary good sense, my hon. Friend the Member for Tynemouth has proposed. Rightly, my hon. Friend is making a virtue of the fact that this is such a limited intervention.
  My hon. Friend the Member for Devon, North asked for guidance to be given to shopkeepers. That guidance has now been issued. However, guidance is never a once-and-for-all process. If further points should be included and supplementary guidance is required, those are matters about which my hon. Friend the Under-Secretary of State for Social Services will want to hear.
  I think that the guidance is common sense on this crucial point of how a shop assistant doing his or her best for the business and for the community might identify a potential glue sniffer. I shall read out five or six paragraphs from the guidance to show what common sense it is, because the warning to shopkeepers is cast in these terms:
  "Watch out for any or all of the following: groups of teenagers standing around counters or areas where glue or other solvent-based products are normally displayed.
  Frequent purchase of solvent-based products and aerosols by the same individuals.
  Traces or smell of glue or solvents on the customer's clothes or breath.
  A drowsy, vacant or glazed expression in the eyes.
  Unsteadiness, slurred speech or other signs similar to drunkenness.
  Red eyes, heightened colour and reddening spots around the mouth and nose.
  Uncontrolled or excessive giggling and rowdy silly behaviour."
  On Second Reading I said that perhaps too many shop assistants should not come into Prime Minister's Question Time on that basis.
  "Purchase of plastic bags at the same time as glue or other solvent-based products.
  Obvious absence by a child from school."
  Those are common-sense points. One is not asking the impossible of shopkeepers, although one recognises the difficulties of their job.
  I believe, and I am sure that my hon. Friend the Member for Devon, North will accept, that it would be wrong, faced with the problem of glue sniffing, which has brought misery to thousands of families and caused the death of perhaps as many as 80 youngsters in the past three months, and 80 in the previous 12 months, to suggest that shopkeepers should be under no obligation to the community to do their best to restrict sales where it is plain
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  that abuse will or may take place. Most socially conscious shopkeepers would not want to be completely free of any moral obligation.
  We are trying to keep the criminal law from the outer edges of extreme and unpleasant behaviour, but to put out common-sense, practical guidelines which have been negotiated and hammered out with the retailing organisations so that any prudent shopkeeper can train his staff or himself. The organisations which represent shopkeepers will make them aware of that. That enhances the reputation of the shopkeeper as a socially responsible person.
  I am sure that we are not asking shopkeepers to do difficult things. Equally, it would be wrong for us not to recognise that there are youngsters who are plainly sniffing glue. If we could make it more difficult for them to get the substance, even if we will not prevent the problem, we shall be taking a step in the right direction.
  I should like my hon. Friend the Member for Devon, North to reflect upon what I am saying. I know that my hon. Friend the Under-Secretary of State for Health and Social Security will be more than willing to hear from hire if he feels, in the light of what I have said, that there is more that we could or should do to assist the responsible shopkeeper to run his business responsibly.
  We, as Members of Parliament, know only too well that the world is full of some thoroughly unreasonable people. Many of them write letters to us in red, black and blue ink, heavily underlined and so on, but no one—
  Mr. Kilroy-Silk: They buy the ink from your hon. Friend's shop.
  Mr. Mellor: Yes—ink which they no doubt buy from the shop of my hon. Friend the Member for Devon, North.
  If a shopkeeper or his assistant is genuinely troubled about a young man purchasing a potentially abusable substance and refuses to sell the item, I should have thought that it was outrageous for his parents to hold that against the shopkeeper. I spend much of my time in the Home Office trying to find ways to persuade people to behave sensibly and understandably in relation to a wide range of matters which go on in the community and in which they could intervene and help. It is sad to me and to all of us that many people hear noises of assaults or criminal acts and do nothing about them. If someone telephones the police and makes an honest mistake about a criminal action, it would be awful if the neighbour involved said, "I was just kicking the cat. You obviously thought that I was being murdered and rang the police." That is a thoroughly objectionable approach. It is equally objectionable—
  Mr. Greenway: He must not kick cats.
  Mr. Mellor: Of course, I am against kicking cats, but we have a number of cases where people have become aggrieved over what they regard as interference by neighbours who are merely doing their best. If people are to take a responsible attitude towards crime, they must report suspicions to the police. If those suspicions turn out to be wrong, people must understand that that is the only way that people can show good neighbourliness in their communities. The same is true here. If a shopkeeper, acting in good faith, restricts the sale to a youngster, for the parent not to recognise the pressure on the shopkeeper

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  and to hold it against him would seem to be thoroughly irresponsible and unreasonable. I hope that shopkeepers will recognise that even if they lose one customer they will gain much more respect in the community by being ready and willing to stand up in that way.
  Mr. Greenway: I know that my hon. Friend is a cat lover. On the point of the guidelines, which are so important, he will know that not all shopkeepers are as assiduous as our hon. Friend the Member for Devon, North (Mr. Speller). Will the onus be upon them to obtain the guidelines, or will they be sent to them?
  Mr. Mellor: The guidelines have already been distributed. I hope that most shopkeepers have them, but it is impossible to send the guidelines, unasked for, to every shop. One of the arrangements entered into with the retailing organisations was that they would participate in the distribution. If my hon. Friend knows of shops which do not have them, part of the common-sense role, which I am aware he plays in his community as a Member of Parliament, is to see that they are available. No doubt Members, as a result of the debate, can put in their local papers the fact that guidelines are available and advise shopkeepers to write for them.
  Most of the guidelines are simple, common-sense and straightforward things about which most sensible folk following the glue-sniffing problem will know. The guidelines are merely an attempt to assist those who wish to structure their staff training. We see that as a crucial part of our effort.
  The hon. Member for Knowsley, North can never resist a degree of partisanship and, of course, today was no exception. Having made, on the whole, a sensible speech, he sought to blame the Government for glue sniffing by saying that we had created the conditions within which glue sniffing could flourish. That suggestion is wide of the mark. Glue sniffing began in the United States in the 1950s. It came to Scotland in the early 1970s. It has been in England and Wales since the middle and late 1970s. The fact that it has grown in intensity causes us all anxiety, but to reduce the argument to one of narrow partisanship is not helpful and falls below the standards to which I am sure he normally aspires.
  The hon. Gentleman's argument was unfair in relation to his area of Merseyside because in so far as the social conditions in Merseyside facilitate glue sniffing by youngsters, I do not know that it is just this Government who need to examine their conscience. What about those who locally have considerable influence over the attractiveness of the region to employment and who have controlled, without exception, local government at metropolitan county and borough level for 20 years or more? Are they to be free of the taint of having assisted glue sniffing to flourish if, as the hon. Gentleman asserts, it is the result of economic decline? I think not. I should have thought that that was the kind of boomerang argument which strikes the hon. Gentleman as firmly on his forehead as it does me on mine.
  This has been a helpful debate. I am grateful to those who have sought reassurance, especially my hon. Friend the Member for Devon, North. It is crucial that there should be no-misunderstanding about the Bill. It is an important Bill, even though it is limited. It is not intended to make the problems suffered by small shopkeepers any
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  worse. No responsible shopkeeper has anything to fear from the Bill. Those who do are those who, for their own financial reward, trade cynically on the weakness of children. I hope that my hon. Friend the Member for Devon, North will carry back that message to the small shopkeepers whom he represents.
  11.38 am
  Mr. Trotter: With the leave of the House, I shall deal briefly with some of the points that have been raised.
  I do not accept that drugs have taken over from glue sniffing as a problem. They are an additional problem. The glue sniffing problem will be with us for some time. To deal with it we must have a continuing campaign by Government, local authorities, industry and, as the hon. Member for Wallsend (Mr. Garrett) said, the media. The hon. Gentleman referred to the efforts of the police on Tyneside, and I wholly support what he said. They are playing a very constructive role in the front line of the campaign because they come across the incidents day by day as they occur on the streets.
  There has been reference to the problem of supplies of glue from industry. Glue is used not only in mechanical industries but also in the building industry, and much of it is stolen and used by glue sniffers. I draw the attention of builders to the need to keep under safe control the large stocks of glue that they use in woodworking, in particular.
  I should like particularly to dispel the worry of my hon. Friend the Member for Devon, North (Mr. Speller) that the ordinary shopkeeper will be at risk as a result of the Bill. It is perfectly understandable that such a view should be put forward. I would not have wished to introduce a Bill which would penalise in any way the ordinary shopkeeper, whether on a corner site or anywhere else. I do not believe that any honest mistake made in good faith will lead to a prosecution.
  I have found the attitude of my local Northumbria police very sensible. I suggest that chambers of trade or commerce in every part of the country, if they are still worried after what the Minister and I have said on the subject, should talk to their local police forces. I do not believe that they will find any intention by the police to harass or attack the ordinary honest shopkeeper.
  If it had not been for the prosecutions that were brought in Scotland, many of us would have thought it beyond belief that there were people who deliberately set out to make profits from selling glue to young people to be sniffed on a large scale. However, there are such people. People are in gaol in Scotland for having done it. I have no doubt that there is a small number of such people in other parts of Britain.
  I referred earlier to the information given to me on Tyneside that it has been possible to be supplied with fish and chips and glue or hot dogs and glue. That is not the practice of an honourable trader. It is a disgraceful activity, and I do not believe for a moment that the people that my hon. Friend the Member for Devon, North represents could be included in that category.
  Mr. Kilroy-Silk: If the hon. Member has been given information that retailers, carrying out an otherwise lawful business, are supplying children with glue along with hamburgers or fish and chips, what did he do about it? It is a very serious and important allegation. Were those retailers identified? Was the information followed up? If they were identified, what happened?
  Mr. Trotter: I was advised of it by the authorities themselves, who are powerless to deal with if for the reasons that have been debated now for three months. There is no law in Britain—apart from the odd case of the policeman to which the hon. Gentleman referred—under which prosecutions can be brought.
  Mr. Kilroy-Silk: Surely a great deal could have been done. It would have been possible to publicise the names of the retailers concerned. That kind of publicity, in a decent law-abiding community, would itself be a deterrent. The retailers could have been reported to their own professional trade associations. There are clearly other legal sanctions that could be taken against such people. I believe that someone was found to be supplying glue sniffing kits and was prosecuted under the procedures dealing with breaches of the peace. I am sure that in those cases, with enough will-power and ingenuity, action could have been taken.
  Mr. Trotter: I understand that one of the traders concerned operated from a tricycle. I very much doubt whether he was a member of any trade body.
  There are at present no laws to deal with the problem. The whole aim of the Bill is to close this loophole. I anticipate that when the Bill becomes law the police will visit those who are regularly supplying the substances and knowing what they are doing. They will be warned that if they do not desist they will be prosecuted. I believe that that will stop the trade. If, however, they continue with the practice after they have been warned, they will be prosecuted and they will go to gaol, as happened in Scotland.
  Those who were prosecuted and gaoled under the Scottish law had been warned at a time when it was thought that the law also did not apply in Scotland. They took no notice of the warning. When told that they were carrying out anti-social, dangerous and wicked behaviour, they said, "We have not broken the law and there is nothing you can do." They continued to trade, but when it was found that under Scottish law an offence had in fact been committed, they were prosecuted and gaoled.
  I believe that the police will not abuse the statute. They will warn those who are regularly, recklessly and deliberately supplying poison. If those people do not desist, they will be prosecuted and gaoled. The ordinary corner shopkeeper has nothing to fear from this necessary measure.
  Question put and agreed to.
  Bill accordingly read the Third time, and passed.

Copyright (Computer Software) Amendment Bill
Not amended (in the Standing Committee), considered; reported, without amendment.
Motion made, and Question proposed, That the Bill be now read the Third time.—[Mr. William Powell.]
11.46 am
The Parliamentary Under-Secretary of State for Trade and Industry (Mr. John Butcher): May I begin by observing one of the usual courtesies of this House and explain to my hon. Friend the Member for Corby (Mr. Powell) that I have a pressing engagement in the midlands and therefore will not be present to hear his comments in summing up the debate. However, my hon. Friend the Under-Secretary of State for the Home Department will occupy the Front Bench and will take note of any new ideas and new issues that may emerge in the debate in order to feed that information back to the Department of Trade and Industry and to the Home Office.
I thought that it might be helpful to place before the House for the first time the results of the first comprehensive survey which has been undertaken by statisticians in the DTI into the size and performance of the computer software industry. On Second Reading, we all recognised the crucial and growing importance of the industry, but I thought it might be helpful to put that information before hon. Members so that we may have a framework against which to judge the economic implications as well as the implications for fair play and for proper protection for authors of software as proceedings are conducted through this House and the Upper Chamber.
The first survey of the computer services industry, including small as well as larger firms, shows a 20 per cent. increase in turnover in 1984, and that provisional estimate suggests that the industry—which is concerned with the development and application of software—increased its turnover from £1,750 million in 1983 to £2,120 million in 1984. The industry consists of approximately 15,000 firms, but 200 larger companies accounted for more than half its total sales. The statistics were collected from the DTI's regular quarterly survey of larger firms in the computer services industry, but during 1984 it was supplemented by a sample survey, including the smaller firms, taken from the Business Statistics Office's register.
It is interesting to note that about 30 per cent. of the firms regarded manufacturing as their primary market, 20 per cent. were mainly concerned with the distributive trades, and 20 per cent. with financial services. Of the remaining 30 per cent., about half saw the public sector as the main market for their services. A further £180 million-worth of software is also produced by companies whose main activity is in another branch of the economy —computer manufacture, computer games or computer-aided design machinery.
The combined output of computer services inside and outside the industry is therefore about £2,300 million. About £1,000 million is attributable to what can be broadly described as systems analysis, software and software maintenance. Data processing and database services represent rather more than a quarter of the total, and the balance includes consultancy, hardware maintenance and training.

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I am delighted that that information came forward only this week. This debate has provided an excellent opportunity to place it before the House, not least because there are among hon. Members, including my hon. Friends and the hon. Member for Motherwell, South (Dr. Bray), several enthusiasts who favour the industry as one of the growth points in the British economy.
Needless to say, the Bill has no enemies in the House, to the best of my knowledge. The only enemies it may have are among the pirates themselves who, no doubt, if the Bill is passed, will not be looking forward to the implementation of measures similar to those that have been so effective for video piracy.
Dr. Jeremy Bray: Can the Under-Secretary tell us where the detailed results of the survey will be published? Can he assure us that they will be published in full? His Department has an extraordinarily bad record of publishing summary reports—for example, in January after a report on research and development—whereupon there is a two-year lag before the publication of the full report.
Mr. Butcher: I note what the hon. Gentleman has said. Obviously he cannot expect me to agree with the import of what he has said. However, I hope that he will recognise that this information, as a result of an internal survey by Department of Trade and Industry statisticians, has been placed before the House before anyone else has had a chance to see or comment upon it. That is proper, and should be the case. Of course, we are prepared to provide the background to the survey, the headlines of which I have given the House this morning. A copy will be put in the House of Commons Library so that hon. Members can check its validity, the basis on which the statistics were collected, and so on. I am happy to discharge that obligation as a believer, in the case of statistical analysis, in the principles of open government.
Dr. Bray: Will the survey be published in British Business in the ordinary way and, if so, when?
Mr. Butcher: I should be surprised if it were not published in British Business in the usual way. It is a survey of major importance and significance. I do not think that I am on weak ground in predicting that the survey could figure in British Business at the earliest opportunity. However, I hope that the best way of proceeding is to make it available to hon. Members who have an interest in the industry.
I commend my hon. Friend the Member for Corby (Mr. Powell) for introducing a Bill of major importance. It is of major economic importance, and is important to those who hitherto have been penalised for deploying their ingenuity and brain power in this growth industry. I repeat that, to the best of my knowledge, the Bill has no enemies other than among the pirates.
11.52 am
Mr. Nicholas Lyell (Mid-Bedfordshire): I am delighted to congratulate my hon. Friend the Under-Secretary who, I know, must depart, and my hon. Friend the Member for Corby (Mr. Powell) and his supporters on piloting the Bill so successfully towards its Third Reading.
I was interested to hear the up-to-date figures on the size of the computer industry and the fact that the computer
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software portion is now at or approaching a billion-dollar industry. Copying in breach of copyright—as it will be — of computer software by electronic means is extraordinarily easy and profitable. It has attracted to itself the same type of wide boy and fast buck operator who, in the past, has been attracted to the video nasty and video piracy. The Bill makes it clear beyond doubt that computer software will be covered by the Copyright Act 1956 and provides for adequate criminal provisions so that pirates who indulge in that nefarious activity get their deserts. Their pirated material can be searched, they can be brought before the courts, and adequate punishments will be available.
As my hon. Friend the Minister said, computer software itself, whether for business purposes or computer games, is the result of a great deal of time, trouble, investment and ingenuity by those who take part in this important and fast-growing industry. It is quite wrong that their efforts should be stolen by those who, for example, equipped with a twin-disc drive mini-computer, can run off a copy of a floppy disc on to a blank costing £1 or £1·50 for word processing purposes, which retails at about £300. They can sell it off cheap for £100, £150 or £175 and make a fast buck for themselves. It is equally wrong that some people in legitimate activities in the computer industry should use that pirated software as loss leaders for their hardware. I am sure that the moral effects of the Bill will help to stamp that out. If it continues, they too can be brought to book under the new provisions.
I congratulate once again the Federation Against Software Theft on the careful way in which it has marshalled the evidence that has convinced my colleagues—my hon. Friend the Member for Corby and my right hon. and hon. Friends in the Department of Trade and Industry and the Home Office—and myself that this is another example of where Parliament should act swiftly. It has acted swiftly. I hope that within minutes the Bill will obtain its Third Reading. I wish it a speedy passage in another place and on to the statute book.
11.56 am
Mr. Andrew Hunter: If I recall correctly, two or three of the four or five of us now present in the Chamber sat through the heat of the debate on Second Reading on 22 February. My further recollection, which the Minister has just borne out, is that there was an all-pervading spirit of unanimity in our dealings that day. As my hon. Friend said, there was unanimous acceptance of the dire problem of software theft. There was a unanimous welcome for the Bill and congratulations, I must confess that I am somewhat tainted by personal envy of the powerful and persuasive way in which my hon. Friend the Member for Corby (Mr. Powell) presented his case. There was unanimous hope that the Bill would enjoy a speedy passage through Parliament. The reality of that hope exceeded my expectations. Delayed by the London traffic, I arrived for the Committee four minutes late to find that the proceedings had been completed.
Just as the Bill meets with widespread approval in the House so, not surprisingly, as we have heard, it meets with widespread and general support in the industry itself. On Second Reading we heard much about how software theft is a serious and immediate problem to the industry. In the intervening weeks, fresh evidence has come my way from the industry in my constituency which underlines the necessity for urgent and speedy action.

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In the computer industry throughout the United Kingdom, software theft threatens innovation, jobs and investment. On Second Reading we heard how the phenomenal sum of nearly £150 million was lost by the industry last year—a breathtaking statistic that demands an instant and urgent response. During that debate we heard much about the various forms that the theft takes. To the Jay mind, it is hard to distinguish between the terminology of that theft. There is counterfeiting, replication without permission, production of look-alike copies and so on. However, the basic point is that every aspect, area and category of a software business is affected by theft — games and micro-business software and commercial software packages. We were left in no doubt that there is a very serious problem that must be dealt with, and dealt with effectively.
In introducing the Bill, my hon. Friend the Member for Corby set it in the context of the computer software market in western Europe and Britain. He analysed the development of Government and public policy over the past decade or so to show why it is necessary to deal with the problem on its own rather than wait for more general Government legislation. Of equal if not greater significance was my hon. Friend's analysis of some of the difficulties under the present law. He spoke at length of the consequences for the industry of the present state of the law. It is that legal uncertainty that makes the present situation unacceptable and provides the justification for the Bill.
However, we must not delude ourselves that legal action on its own will solve the entire problem. Legal change is perhaps the most essential step, but there is also the whole area of technical deterrents to illicit copying. Perhaps we heard less about that on Second Reading than we should have done. I take up what my hon. and learned Friend the Member for Mid-Bedfordshire (Mr. Lyell) said, partly because it gives me another opportunity to praise the work of the Federation Against Software Theft. FAST has made much of the need for technical deterrents. I quote from one of its publications:
"No technical protection method, of itself, will prevent a determined thief from copying computer programmes and then selling them copyright-unpaid for his own profit. As the law stands there is small risk in this criminal activity. Instead, all the risk is borne by the Author and Publisher, who have made a substantial investment of skill, time and money. Unlike the thief, the Author and Publisher are potential sources of future software for the Consumer... FAST will not recommend an industry standard in this field, partly because that would concentrate the attention of would-be 'code-breakers'. However FAST is urging Authors and Publishers to investigate whether a technical protection system could reduce the vulnerability of their products, without causing an unacceptable reduction in user value or unacceptable increase in cost."
An industry that takes self-help seriously is doubly entitled to ask for the normal legal protection accorded to other forms of intellectual property. Technical deterrents clearly have a part to play, but all hon. Members who took part in the Second Reading debate acknowledged the urgent need for clarification and strengthening of the law.
The serious problem of software theft will be reduced significantly by the proposed amendments to the 1956 Act, and the effectiveness of the remedies will be increased. That is why we need the legislation. It is straightforward and not contentious, and I am sure that the House will accept it.
Clause 1 contains the simple assertion:
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"The Copyright Act 1956 shall apply in relation to a computer program …as it applies in relation to a literary work".
Nothing could be much more direct than that. In one fell swoop the clause removes all doubt, uncertainty and ambiguity. It is what the industry wants. It provides the legal protection that will help to save the industry the £150 million a year that it is currently losing. In essence, clause 1 seeks to protect the software business in the same way as the Copyright (Amendment) Act 1983 sought to protect the video business. There is evidence that the video amendment legislation has provided considerable protection.
Clauses 2 and 3 bring into effect the provision of the 1956 Act for computer software programmes. Under the legislation it will be possible to apply to magistrates for a search warrant. That is a crucial power of law enforcement. It is the same as the power now available to deal with video piracy under the video amendment legislation. That legislation appears to have been immensely successful. It is estimated that two thirds of video piracy has been eliminated. If that statistic can he duplicated in computer software, there will be many smiling faces except among the pirates, and there is every reason to hope that the Bill will have a comparable impact on computer software theft.
Clause 3 provides for the penalties. I understand that at the moment there are no criminal penalties for computer software theft. Under the Bill, the penalties will be the same as those for any other breach of the Copyright Act — imprisonment for a maximum of two years and unlimited fines. Those are substantial deterrents. We are moving a long way from the days of the £40 fine under the Trade Descriptions Act 1968. I apologise in his absence to my hon. Friend the Member for Teignbridge (Mr. Nicholls) for referring by implication or innuendo to one of his constituents without giving him prior notice.
I am still as fervent in my support of the Bill as I was on Second Reading. Reduced to the barest essentials, it provides the industry with the legal protection that it wants. It is our job to give the industry that protection. On Second Reading, I made much of the importance of the computer industry to Basingstoke. It is partly because the computer industry features so prominently in my constituency that I wish it to flourish. The Bill will help the industry to flourish, and it has my total support.
12.7 pm
Dr. Jeremy Bray: I, too, should like to congratulate the hon. Member for Corby (Mr. Powell) on his introduction and handling of a Bill that seems likely to receive the early agreement of the House. It will make a useful contribution to tackling the problems of copyright and software theft. Simply by doing so, however, it will highlight the remaining software problems.
The hon. Member for Basingstoke (Mr. Hunter) was right to draw attention to the question of technical deterrents, but I would be sceptical about how far that will contribute to the solution of the problem. It is only likely to have an effect at a somewhat low technical level. High-grade protection of systems will be extremely difficult to provide. We shall need to seek a change in practice and organisation within the software field much more akin to the openness of the results of scientific research which is an acceptable and necessary part of technical progress in other areas. We have found that, in the patent system,

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much of the problem lies in getting at information, not in locking it up. Thinking that the software solution lies in locking it all up so that it is not accessible is probably the wrong direction.
As for the size and growth of the industry, I think that the Minister was anxious to help by referring to the statistical survey, but he has probably thrown in a great deal of confusion by infringing what seems to me to be the best practice of Ministers when handling the results of statistical surveys. Guidelines were set out by Sir John Boreham, the head of the Government's statistical service, in a recent issue of Statistical News. They firmly advise separation of the first announcement of a survey's results, which should be done by officials without any comment from Ministers, any comment by Ministers should be the subject of a separate press release. That separation is intended to prevent Ministers from picking up the plums which suit them politically and because the information is in danger of being misunderstood and misrepresented if not presented properly as a professional statistician would do. The key importance of this particular information is in planning manpower policy in the computer industry, especially manpower for the software industry.
I shall examine the figures that the Minister gave more carefully, but it seems that as he presented them they offered no guide by which it would be possible to judge the adequacy of the plans that the Government have announced for the production of qualified scientists and engineers in software. The supply has been miserably inadequate. So far, the increases in expenditure have been achieved by bleeding Department of Trade and Industry Votes, and others, to support the Department of Education and Science spend on the training of computer staff. I hope that the Minister will write to me and ensure that the full results of the survey are published as soon as possible so that we have better information on which to judge Government policy, especially on the supply of manpower to the software industry.
There will have to be a substantially increased effort by the Government in the development of major software systems and standards which are freely available publicly for common use as the framework in which application areas can develop. The Government rightly turned down the proposal of British Telecom and IBM to develop their own value added network.
Mr. Deputy Speaker (Sir Paul Dean): Order. I am sorry to interrupt the hon. Gentleman, but he is getting wide of the Bill. I have allowed a little latitude because I realise that the Minister wished to make a statement which was relevant to the background to the Bill. I therefore allowed the hon. Gentleman to comment as well. Strictly speaking, however, a Third Reading speech should deal with the contents of the Bill.
Dr. Bray: I apologise, Mr. Deputy Speaker. I was about to make the link with the problem of copyright in common user systems. The problem with the common user systems is to maintain their integrity in a form in which they can be properly described, developed and applied by a wide variety and level of user. Copyright has a part to play in that in maintaining the consistency of the different standards as they are produced. If a standard is offered by different manufacturers in their equipment, a necessary part of ensuring that software will run on different types
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of equipment is that it operates precisely, to the nearest bit of information, the same system that others use so that common additional software will operate reliably. I am not sure that we shall get from this Government a coherent scheme for the development of software which will provide those wider standards which can be used in value added systems and common user systems of the future.
I hope that the industry will turn its attention to the positive aspects of copyright—means by which unwise conformity to standards can be observed in the rapid spread of computer applications.
I hope that the Bill will not run into any problems in another place and that it will provide a foundation on which the wider problem of intellectual property in computers will be tackled by the Government. I hope, however, that it will not get too lost in the general problems of intellectual property, because computers will deserve continuing attention. It is right to tackle a problem with a private Member's Bill in this case, but I suspect that when the subject next comes up in the House it will have to be dealt with in a Government Bill. I have great pleasure in supporting the Bill on behalf of the Opposition and wish it a speedy passage.
12.16 pm
Mr. William Powell: With the leave of the House, I should like to comment on what has been said. I thank those who have spoken on what has turned out to be an easy passage for the Bill so far. I thank the hon. Member for Motherwell, South (Dr. Bray) for giving the Bill the wholehearted support of the official Opposition and for what he has said in our debates. I listened with interest to and agreed with a great deal of what he said today about the future of the software industry and the developments that must occur.
I should like to thank the hon. Member for Yeovil (Mr. Ashdown), who was kind enough to tell me that he would be unable to attend this morning, for wishing the Bill rapid progress to the statute book. I thank my hon. and learned Friend the Member for Mid-Bedfordshire (Mr. Lyell), who was the first Member to take up the cause of extending copyright law to cover computer software in his ten-minute Bill in July last year, which initiated the parliamentary process which has led to this Third Reading.
I also thank my hon. Friend the Member for Basingstoke (Mr. Hunter), who made a major speech today, as he did on Second Reading, and whose interest in and knowledge of the computer industry and its ramifications is second to none.
I thank my hon. Friend the Minister, whose assistance and co-operation has enabled the Bill to be produced in a widely acceptable form. He, my hon. Friend the Minister for Information Technology and officials in their Department have been of major assistance.
None of this would have been possible without contributions from many quarters in the House and, as has been stressed, from within the industry. There has been unanimous agreement in the industry that such a Bill is necessary to secure its survival and prosperity.
This is, of course, an interim measure because in due course it will have to take its place within the context of the wider revision of copyright law which is now being contemplated and which we analysed on Second Reading. It is also an interim measure because in itself it will not be sufficient to deal with all the many problems facing the industry as it develops.

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One of the most important tasks is to educate the public to respect copyright. In an age in which the copying of materials is so easy, it is all the more important to ensure that authorship and the legitimate proceeds of authorship should be respected in computer software as much as in literary authorship and in video, to which the law was extended two years ago.
We had a very full Second Reading debate, which no doubt assisted the Bill's progress in Committee. My hon. Friend the Member for Basingstoke was, alas, all too right when he said that, due to unavoidable circumstances, he was late, but it never occurred to him that just a few moments delay would rule him out of the Committee stage which lasted all of seven seconds.
If the Bill receives a Third Reading today it will go to another place and, all being well, it will become law. But it is only a beginning. No one in the House or in the country should imagine that this is the end of the problem. I hope that the message will go forth from both Houses to pirates here and abroad that their behaviour will not be tolerated any longer. They have done immense damage to the industry and they are causing immense damage to our economy. They are doing immense damage to firms with a future that will be felt throughout the world.
This is a short, private Member's Bill, but it is surely also a major Bill which demands the approbation of the House.
Question put and agreed to.
Bill accordingly read the Third time, and passed.

Controlled Drugs (Penalties) Bill
Not amended (in the Standing Committee), considered; reported, without amendment.
12.23 pm
Mr. Keith Raffan: I beg to move, That the Bill be now read the Third time.
The Committee Stage of this Bill was not quite so succinct as that of the Bill introduced by my hon. Friend the Member for Corby (Mr. Powell). Second Reading, however, went through on the nod, so this is the only opportunity to debate this important measure on the Floor of the House and it is right that the debate should be as complete as possible. It will also allow us to impress on the country the severity of the problem of drug trafficking and our readiness to tackle it.
This is not a partisan measure. It belongs to that rare breed which commands support from every corner of the House and I am proud to say that the 11 sponsors include representatives of every political grouping and every shade and faction within those groupings in the House. The Conservative climatic season is fully represented, from bone dry to saturated wet, and the hon. Member for Birkenhead (Mr. Field) will forgive me for commenting that on this occasion the Labour party is seen not so much in harmony as in unison, with the Healyite Right and the Bennite Left for once united. I am also grateful for the full support of the Government and I thank my hon. Friend the Under-Secretary of State and his officials for all their help and encouragement, especially in providing drafting facilities.
The Bill is brief but its potential impact, I hope, will be big. Its purpose is simple and straightforward—to increase to life imprisonment the maximum penalty available to the courts in sentencing people convicted of trafficking in class A drugs, principally heroin and cocaine. The Bill is not directed at addicts who pathetically push hard drugs to finance their habit. It is directed at the big boys—the Mafia-style drug dealers and godfathers of drug trafficking who are not addicts themselves but who are out to exploit addicts for financial gain.
The Metropolitan police estimate that 23 per cent. of targeted criminals in their area are now involved in hard drugs. Ten years ago those people would have stuck to armed robbery, but they now find dealing in heroin and cocaine far more lucrative. The Bill is concerned with that category of dealer—with the most serious offences, involving the most harmful drugs.
Why is the Bill needed? Again, the reasons are simple and straightforward. The existing maximum sentence of 14 years imprisonment does not match the seriousness of the crime. Large-scale trafficking in lethal drugs is, in effect, dealing in death. To me, there is absolutely no difference between murder by shotgun in the course of armed robbery and murder by heroin for financial gain. The existing maximum sentence is also insufficient to deter traffickers who may be released after just a few years to enjoy the proceeds of their evil trade. Often a fortune awaits them because seven-figure fortunes can now be made in a relatively short time.
By increasing the maximum penalty to life imprisonment, we hope to achieve two aims—to create a far

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more effective deterrent, and to ensure that those who persist in trafficking in hard drugs will go to prison for a long time.
Mr. Robert Kilroy-Silk: Can the hon. Gentleman now answer the question that both he and the Minister were unable to answer in Committee? How many people convicted of trafficking in class A drugs have actually received 14-year sentences?
Mr. Raffan: If the hon. Gentleman will be patient, I shall be coming to that point later. It is a small number, and we are aware of that. I shall mention Lord Chief Justice Lane's guidelines in the Aramah case and his comment during that case that, sadly, few of the big fish have been caught. However, rather than break up my remarks and lose the thread, I shall deal with that later.
Sentences of life imprisonment, should the Bill be passed on Third Reading and eventually receive Royal Assent, will be buttressed by the decision of my right hon. and learned Friend the Home Secretary severely to restrict parole for drug traffickers sentenced to more than five years. I hope that the sentence will be further reinforced by the effects of legislation in the next Session to deprive drug traffickers of the proceeds of their crimes.
I read with interest of the visit made by my hon. Friend the Under-Secretary of State for the Home Department to the United States, and the comments that he made about it. He spoke of what he had learnt there and the possibility of introducing into British legislation a reversal of the burden of proof, and requiring the suspect to prove the legitimacy of his or her assets rather than those assets having to be shown to be acquired illegitimately by the legal authorities. This will be a contentious matter, but it is important that moves are made so that drug traffickers can be deprived of their assets and the astronomical amounts they are making from this evil trade. I look forward to hearing from my hon. Friend when he believes such legislation can come before the House.
The whole point of deterrence is to reduce the supply of drugs and so slow down the increase in the number of addicts. The measure of the problem can be clearly seen in the notified figures of heroine addicts for 1983. It is not melodramatic to say that we now have a heroin epidemic. In 1983, there were 3,550 notified heroin addicts, and that was 400 per cent. up on the figure for 1979. In 1983 there were 1,400 notified new addicts, which was 50 per cent. up on the figure for 1982. It is widely recognised that notified addicts are just the tip of the iceberg, and the number of regular users is much greater. It is estimated to be between 60,000 and 150,000.
The statistics may measure the problem, but they cannot measure the misery that the problem creates. I hope that the House will bear with me if I read some extracts from The Listener of January this year, following an effective programme on BBC 1, to which my hon. Friend the Under-Secretary alluded in Committee. The programme was called "Real Lives—Pushers". In that programme, two pushers were interviewed about the experience and physical effects of heroin addiction, and their feelings about selling heroin. The two pushers were called Chris and John, and when Chris was asked to tell the interviewer about the experience and physical effects, he said:
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"When you first start smoking you vomit a lot—anything you eat you just vomit back up again straightaway and, as John said, you lose your appetite anyway. All you seem to need to get you through the day is your heroin. First thing you think of in the morning is your heroin and the last thing you think of at night is your heroin. There are also changes in your personality. I mean, I'd do things for money for heroin that once I would never have dreamt of doing — stealing, shoplifting, burglary, anything, it doesn't matter what it is. You'll even rob your mother and father. Personally, I haven't stooped that low, but most of my friends have. Then there's the lying. Your whole life's a lie. From the time you wake up in the morning until you go to bed you are just telling one lie after another to con people, to get money. Heroin completely changes a person to a totally different person, a bad person."
John, when he was asked about his feelings of guilt about selling the drug, said:
"I always feel guilty. People think you do it by choice. Nobody does it by choice except the dealers who don't smoke it, the ones who are making all the money. I do it because if I didn't do this, I'd be out robbing. I don't want to rob any more because I don't want to go to prison again. But you've got to have it. I've woken up on the morning and I've started crying because from the second you open your eyes it's like someone dropping a ton of bricks on you: 'Where am I going to get the money? I've got to have it, where am I gonna get the money?"
It is those against whom the Bill is primarily directed.
Heroin addiction knows no barrier of geography, class or age. I came across a recent newspaper headline which read:
"The primary kids who fix at a fiver a time'.
It was sub-titled
"A glut in the supply of heroin has forced the pushers to seek even younger markets".
That headline does not come from some sensational Fleet street tabloid newspaper but from The Times Educational Supplement in an article last year on drug addiction among primary schoolchildren.
I shall quote from the article, because it illustrates the sheer misery caused by heroin addiction among very young children.
"Heroin dealers, anxious to dispose of a glut of the drug, began selling to younger and younger teenagers. 'They could see they're an easy market', Carole Woolley, Merseyside Drug Council's full-time advice worker, explained. Ten-year-olds are now offered 'starter packs' of low-grade heroin at £5 a time. 'The technique is usually the same', says Carole Wooley. 'A pusher will give the stuff free to a teenager three or four times running saying that it will make them feel good. When the child has got used to it, suddenly they find that they have got to pay. That is the start of the downhill slope'. As the addiction takes hold, usually over a period of weeks, children find themselves needing more and more of the drug. They may turn to shoplifting, mugging or even teenage prostitution to raise the money."
That is the extent of the problem. One of the main reasons for the dramatic increase in recent years is the change in the method of misusing heroin. There are many, especially children, who draw the line at injecting the drug but who are willing to smoke it, which is called chasing the dragon. They do so in the mistaken belief that it is less likely to lead to dependency.
It is important to impress anecdotal evidence upon the House and, I hope, through the House upon the public. I shall quote the most moving description that I have heard, from Detective Constable Brandon Barrow, of the Merseyside drugs squad of a typical routine heroin raid. It exposes the total degradation of heroin addiction and the disintegration of human lives to which it leads. The detective constable said:
"One case that will live with me for the rest of my life was just a routine raid in a house in search of heroin. I went to an address, together with another detective and a policewoman. I knocked on the front door of the house and I was allowed in by the male occupant. It was approximately 12 noon. I could see

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from his demeanour that he was under the influence of some drug. Having gained entry, we found his wife in bed, in a similar state to him. After identifying ourselves to them we started to search the premises, which consisted of two bedrooms, a lounge and a bathroom and toilet. Unfortunately for me, I chose one of the bedrooms which appeared to be not in use. I entered the room and was immediately confronted with a smell that cannot be described. The windows had been sealed with tape, in a feeble effort to stop draughts. On the windowledge lay a number of dead flies all of whom at some time had had to suffer in the stench of the filth. The room was so full of rubbish that it was near-impossible to search. I heard a noise coming from one of the corners. In a cot was a baby. Aged eight months, she was lying on her back attempting to position the teat on a sauce bottle, which contained cold tea, into her mouth. She was wearing what I can only describe as a loin cloth over her lower parts. I reached into the cot to pick her up and saw that her little arms appeared to have no strength in them, making me think that they were broken. There was a large bruise on her face. Her nappy, if that's what you could call it, had obviously not been changed for some considerable time and, not surprisingly, there was a dreadful stench in the room. The excuse given for the bruising to her face was that she was a very active child who thrashed about in her cot. I immediately took the child to a local hospital and she was taken into care. The doctors told me that the reason for the lack of strength in the child was lack of love, having rarely been lifted out of the cot or ever received the cuddles that a baby normally receives."
That description of heroin addiction is far more effective than any statistical evidence in showing the sheer degradation that the appalling drug brings to its victims and how evil the trade in the drug is.
It is true that the seizure of controlled drugs has increased dramatically. In 1973, only 3·3 kilos of heroin were seized. Forty kilos were seized in 1979 and the estimated provisional total seized in 1984 is 294 kilos. The seizure of increasingly large quantities is a great tribute to Customs and to the police. However, it confirms the severity of the problem. Despite record seizures, the street price for heroin is more or less unchanged, and its purity is still high. A plentiful supply is still available. It is impossible to say how much is still entering the country. When we discussed the issue in Committee, my hon. Friend the Under-Secretary of State rightly said that the total was unquantifiable. It is difficult to know what percentage the amount seized is of the total, but the Minister conceded that it can be only a fraction.
Other evidence of the growing problem is the number of offences involving drugs. In the area covered by the north Wales constabulary, which includes my constituency of Delyn, in 1978 there were 292 drug offences, none of them involving heroin, but in the first eight and a half months of 1984 there were 826 drug offences, half of them involving heroin.
This is no longer an inner city problem. It is no longer restricted to the great metropolitan areas or even to the peripheral suburban areas of cities such as Liverpool. I hope that the hon. Member for Birkenhead will not mind me describing his constituency in that way. The constituency of the hon. Member for Knowsley, North (Mr. Kilroy-Silk) is affected as well. Heroin addiction has spread much further into the countryside and the small towns and, indeed, the small villages of north Wales.
The sentencing of drug offenders shows the courts' awareness of the need for firmer action. The proportion of drug offenders sentenced to more than five years imprisonment has doubled since 1978, from 3 per cent. to 6 per cent. In the guideline judgment in the Aramah case Lord Chief Justice Lane made it clear that heavier sentences should be imposed and to an extent that has been followed by the courts. Lord Lane advised that in cases
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involving the importation of any amount of class A drugs a sentence should seldom be for less than four years. For trafficking and amounts to the value of £100,000 or more the sentence should be seven years or more. For amounts to the value of £1 million or more the sentence should be 12 to 14 years.
For the actual supply of any amount a sentence should seldom be for less than three years for transactions of any amount. The nearer the source the heavier should he the sentence, up to levels similar to those for importers. But Lord Lane added that unhappily all too seldom the big fish among suppliers would be caught and that most prison sentences would be two years or less. I concede that point. That is why I, with my hon. Friend the Member for Bolton, West (Mr. Sackville), who made this point effectively in Committee, believe that it is important that the powers of the police and customs officers should be increased whenever possible. They have considerably strengthened their efforts to combat drug trafficking.
In Committee my hon. Friend the Under-Secretary of State mentioned the increase from 125 to 212 in the number of customs officers dealing with heroin alone and he spoke of a further increase of 160 over the next 12 months. We are also grateful for his assurance that he would not hesitate to recommend further increases if he were satisfied that there were still further difficulties in combating the problem.
Since 1 January 1985 every police force in England and Wales has had its specialist drugs squad. There are now 1,000 officers involved in some way in the investigation of drug offences. The regional crime squads are now spending at least half their time dealing with drug conspiracies.
Two other important innovations have been the now regular annual conference of the Association of Chief Police Officers where experience and information on tackling problems of drug misuse can be exchanged. The association has set up a committee to review arrangements for drug operations. There is also in New Scotland Yard a central drugs intelligence unit, drawing officers from all over the country and disseminating information that is gathered to all the police forces. That unit also has five customs officers.
As my hon. Friend the Member for Bolton, West emphasised in Committee, it is important that liaison between customs officers and police should be improved and increased and that there should be much more coordination of their activities. A further valid point that he made was that, as in the United States, the Inland Revenue should be brought more into drug investigations. Often the only signs of criminal involvement are large unaccounted-for assets. The Inland Revenue could help the police greatly in drug investigations.
There has been and must be an increase in the effectiveness of the police and customs officers, and an improvement in the co-ordination of their investigations. All the improvements that have been made so far are essential and welcome. Fear of detection can be as great a deterrent to crime as fear of punishment.
Parliament must ensure that the efforts of the law enforcement agencies are supported and reinforced wherever possible by making available to the courts, as this Bill does, penalties that will act as a genuine and effective deterrent to drug traffickers, and sentences that match the gravity of the crime of those caught and convicted of trafficking.
12.45 pm
Mr. Robert Kilroy-Silk: I congratulate the hon. Member for Delyn (Mr. Raffan) on choosing, as the hon. Member for Tynemouth (Mr. Trotter) did, a subject in a narrow area which has all-party support, and on negotiating it successfully through the labyrinth of Parliament to Third Reading, which it will receive today. He was extremely fortunate in that there was no Second Reading debate and only a small and uncontentious Committee stage, and now we have an interesting but clearly abbreviated Third Reading debate. Nevertheless, he is to be congratulated on having had the foresight to choose a subject which would command all-party support. I am puzzled, however, about the categories into which he fitted my hon. Friend the Member for Birkenhead (Mr. Field) and myself when he described the Labour Members who supported him.
The hon. Gentleman addresses the serious problem of drug abuse. All hon. Members have attested to that problem in terms of the increase in the availability of both heroin and cocaine. Both substances are now freely and easily available, certainly in all our major cities, and almost certainly in the major urban areas. Moreover, it is available inexpensively.
As the hon. Gentleman pointed out, the number of addicts has increased considerably. We know the number of those notified as addicts to the Home Office. Since 1979, during the lifetime of the Government, there has been a 400 per cent. increase in the number of heroin addicts notified in that way. None of us knows the number of drug abusers. Official and unofficial estimates vary from 50,000 to 100,000. Certainly all hon. Members are experiencing in their constituencies an increasing number of younger addicts of heroin and cocaine.
Three years ago it would have been extremely unusual for me to come across a young person who was a heroin or cocaine addict or a drug abuser in my constituency. It used to be rare for me to receive letters or representations from parents about the paucity of facilities in my area because their children were not drug abusers. Unfortunately, it is now an everyday occurrence to hear of, to know and to meet drug abusers, and to come across the more distressing feature of their anguished parents seeking help. It has even reached the stage when the Liverpool Echo can publish photographs of newborn babies who are addicts suffering from withdrawal symptoms of heroin because their mothers were addicts.
The hon. Member for Dudley, West (Dr. Blackburn) and his wife foster children. In Committee he gave a graphic account of the way in which he and his wife had to deal with the withdrawal symptoms of a baby whom they fostered, whose mother had been a heroin addict. That is a terrifying picture of the state that we have reached.
The problem is exacerbated by the amount of heroin, cocaine and other drugs that come into the country. The fact that seizures have increased dramatically during the past few years is a tribute to the effectiveness of Customs and Exise officers, but it also suggests that they are seizing a larger amount of a bigger overall volume coming through the ports. The fact that 300 kilos of heroin were seized last year suggests that it is only a fraction of the amount that is entering the country. In Committee the Minister said that that was nearly 20 per cent. of the amount coming in, but even if we take that as a reasonable estimate—I do
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not know on what it is based—we must not forget that a considerable amount of heroin is still entering the country and is freely available.
That is aided and abetted by the reduction in customs staff. I do not wish to make too much of the point, and the Minister will no doubt say that the number of uniformed staff has been reduced but that there are many more officers engaged in intelligence work. I accept the sense and importance of that. Of course it is much more important to have trained professional officers trying to identify sources and couriers, catch them and convict them, than it is to rely only on untrained uniformed officers at the ports.
However, while acknowledging all that, it is still true that the more a person knows he is likely to be stopped and searched, even on a random basis, the more will he be deterred from bringing in heroin. Of course it will not stop the major pushers and the professional organisations, because enormous amounts of money are involved, but it may stop some of the smaller fry, who are also important in terms of the total volume of drugs entering the country. I regret that the Government have reduced our defences, inadequate as they were in the first place, so dramatically during their period of office. Given our open boundaries and the open nature of our society, we shall never prevent determined, professional, well-organised traffickers from bringing drugs into the country. We should never believe that that is possible, but the Government could have done more than they are now.
It is also true that more small-time pushers as well as addicts are being convicted of drug offences every year, and more of them end up behind bars without the services and facilities that are required. More crimes are also being committed by drug addicts, either as a result of hallucinations or delusions stemming from their addiction, or because they need the wherewithal to purchase drugs. Drug addiction leads not only to the destruction of young and adult lives, to enormous social pressures and family difficulties, but to a great increase in ordinary crime, which affects innocent, law-abiding citizens. There is also a massive increase in the cost to the Health Service, not least in terms of illness and death caused by drug addiction. Several hundred people die each year in the most horrifying and terrible circumstances.
There is a massive and increasing problem of drug abuse. Just as during our debate on the Intoxicating Substances (Supply) Bill, so it is relevant to say here that we need more education of youngsters and their families. Therefore, we need more training of social workers, teachers and other professionals, which in turn means that we need many more facilities and services, be they rehabilitation hostels, detoxification units or drop-in advice centres, than are currently available. It is a disgrace that many areas of Britain, including London, the home counties and the north-west of England, are completely bereft of facilities for drug abusers or their families. It is a disgrace that, under all Governments, we have not taken a greater interest in the deep and serious problems of drug abusers and their families and provided the necessary social, medical and rehabilitative services. As we said in the previous debate, the Government are providing about £10 million, but that is not enough. On other occasions, right hon. and hon. Members on both sides of the House have acknowledged that and made representations to the Government about it.

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More importantly, the £10 million comes to an end in two years. Whatever that money is pump-priming now runs the risk of dying when that mony from the Government stops in two years. It is clear that we need not just £10 million as a one-off payment, but a continuing Government commitment to central funding for rehabilitative services for drug abusers.
What we really need to do—and this is what the Bill addresses itself to—is to catch those responsible for bringing the substances into the country and for subverting young people into becoming abusers. We need to catch and punish the traffickers. They are evil men and women who are making huge commercial profits out of the destruction of young lives.
In that context, incidentally, it may be relevant to point out that many of us greatly regret that the Minister is not yet able to announce when legislation will be introduced enabling the courts to take the assets of drug traffickers gained in the trafficking of drugs. It is not a new idea. It was put forward a long time ago with all-party acclamation. It was received with enthusiasm by the Minister and his Home Secretary more than 18 months ago. We are still waiting for the legislation to help deal with that problem.
If and when that legislation comes, presumably it will shift the onus of proof to the alleged drug offender to show that his assets were not obtained during the course of his trafficking in drugs, and I am not sure that that will receive the support of the Opposition. That is a matter to which we shall have to come back on another occasion, but it may be useful to point out now that the Minister should not assume that such a fundamental change in our criminal justice system and in the principle of an individual being innocent until proved guilty will obtain the support of the Opposition.
Mr. Gerald Bermingham: Does my hon. Friend agree that we already have the concept of the shift of proof in taxation matters, where the man is put to proof that the money that he has received has come from legitimate and earned income sources? This is not such a fundamental shift in our principles.
Mr. Kilroy-Silk: That may be so, but because a precedent exists in one area, that does not mean that it would be appropriate in another area. However, I do not propose to get involved in an argument about the merits of our fiscal system. We are discussing a Bill dealing with a very specific area. In any event, I have no doubt that we shall have that debate across party lines, and I am sure that there will be many hon. Members on the Government Benches who will take a different view from my hon. Friend the Member for St. Helens, South (Mr. Bermingham). But that is for another occasion, and it looks like being an interesting debate.
When I mentioned, incidentally, an area that seemed to arouse controversy, I was saying that we needed to do a great deal more in terms of prevention and of detecting and catching those responsible for trafficking in drugs. There is no doubt that we need more police working full time on this problem. I know that every police authority now has a full-time drugs squad. However, the number of police officers in each police authority area actually working full time in the drugs squad varies enormously. Given the size of my own county of Merseyside and of its drug problem, there seems to be a relatively small number of officers
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working full time on drugs inquiries when compared with other areas of the country. Perhaps more guidance should be given by the Home Office to ensure that the priority that the Government and Parliament accord to catching those who traffic in drugs is recognised by our chief constables and acknowledged in terms of the resources that they put at the disposal of their drugs squads. In that context, I should like to see more liaison between police forces arid Customs and Excise investigative officers.
The Opposition do not oppose the Bill. We endorse its principle and wish to see it on the statute book as quickly as possible, though I am not convinced that it will make a major impact on the drug scene. First, I do not believe that many of those who come before the courts will receive life instead of 14 years' imprisonment. Many of those who are caught at the moment do not receive 14 years. The hon. Member for Delyn could not tell me, despite my repeated requests, how many drug traffickers had been sentenced to 14 years' imprisonment or less. The Minister could not answer that question in Committee. As he has been put on notice, he will no doubt have the answer, or an adequate reason as to why he does not have one. It is important. I do not suspect that many individuals will come into that category. Not many will receive life imprisonment, because not many receive 14 years at the moment.
Mr. Raffan: The hon. Gentleman's logic is somewhat astray—the intervention of the hon. Member for St. Helens, South (Mr. Bermingham) may have somewhat thrown him — because the fact that few maximum sentences of 14 years' imprisonment are not given at the moment does not mean that that will be the position in the future.
As my hon. Friend the Minister made clear in Committee, he expects that the Lord Chief Justice, should the Bill become law, will produce further guidelines. There is evidence that the guidelines that he produced in the Aramah case have been observed. The hon. Gentleman is being somewhat negative. He should wait and see how effective the Bill will be, rather than dismiss it before there has been a chance to implement it.
Mr. Kilroy-Silk: I am not dismissing it. If I were, I should be opposing it, and I am not. The Bill has gone through largely undebated, let alone opposed. It will go through unopposed today. It is reasonable in that context to make the point that if Parliament is saying that it wants to increase penalties it has to show that the penalties presently available are insufficient and not effective or strong enough. The only way to demonstrate that is to show that many people who should have been given life have not been so sentenced. We cannot show how many people have been given the maximum of 14 years, which is available to the courts at present. We should consider that point.
I accept what the hon. Member for Delyn says, with his convoluted logic. If we make the maximum life, it may act as a greater deterrent to drug traffickers. That is what we are talking about. We are not talking about catching more people or providing extra resources for the police and Customs and Excise. We are not doing any more on the ground. We are saying that when we have caught the drug traffickers, they may get life instead of 14 years. I do not dissent from that for the evil people about whom we are talking.
The only effect of the change of law might be to deter from drug trafficking because of the threat of life

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imprisonment some people who would otherwise have trafficked in drugs because the threat was a mere 14 years. That is not a deterrent, but it is a matter of judgment and I hope that I am proved wrong. If the Bill saves one life, or the destruction of one family, it will have been worth while. I hope that it does more than that, but I do not believe that it will.
1.3 pm
Mr. James Couchman: The hon. Member for Knowsley, North (Mr. Kilroy-Silk) has called into question the Government's determination to confront the drugs problem. I dissent from what he has said on that point, but only on that point.
I support the Bill wholeheartedly. I am sure that the introduction of draconian penalties for those who indulge in the filthy but lucrative trade of producing and supplying class A drugs will accord with the wishes of the public. I am sure that that will find a great deal of sympathy in the country. I congratulate my hon. Friend the Member for Delyn (Mr. Raffan) on introducing the Bill.
Everyone in the House must agree with the Bill in so far as it seeks to confront the enormous growth in the supply of hard drugs. As a Member of the House and as the parent of two teenage children I am worried about the possibility that my children might be dragged into that foul trade. The habit cannot be acquired or sustained without the production, supply and distribution of drugs. The dramatic increase in the supply in recent years was confirmed by the evidence given to the Home Affairs Committee this year by the customs and excise group of the Society of Civil and Public Servants.
Almost daily we read in the newspapers of dramatic seizures by the customs and excise and by the police. I pay tribute to the vigilance and success of those enforcement agencies—particularly to those dedicated and diligent officers quartered overseas who are pursuing inquiries in the countries of supply. However, I fear that the startling successes of the customs and excise merely highlight the growth of the trade.
Only yesterday customs officers at Heathrow seized 14 kilos of cocaine, valued at £2·5 million. That is thought to be the largest ever single seizure of cocaine intended for supply and sale in Britain. It is interesting that two foreign nationals—Brazilians—were arrested in connection with those offences. I shall say no more about it because it is now sub judice.
The highlighting of the big seizures merely demonstrates the extent of the problem. I understand that there are now major fears on the part of police and customs officers that cocaine abuse in Britain will explode, as it has in the United States. The latest seizure figure for cocaine in the United States, in the most recent year for which figures are available, is 33,000 lb — a growth from under 1,000 lb in a very few years. Last year customs officers in Britain seized 77 lb of cocaine, valued at £7·25 million. Yesterday's seizure tends to demonstrate that the growth in the supply of the drug is explosive.
There seems to be a view that cocaine—which has a following among those who might broadly be called the prominent people of the café society—is in some way more acceptable than the established heroin abuse. There is nothing to choose between them. The appalling growth of heroin abuse merely serves as a pointer to the potential
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growth of cocaine abuse. An increasing number of addicts are known to the police; there is an increasing amount of seizure.
Another extremely worrying factor is the apparent drop in street prices. That tends to confirm the fears expressed by the hon. Member for Knowsley, North that there is a dramatic increase in the availability of the drugs. Like the hon. Gentleman, I regret that the Bill does not include any measures to allow the seizure and forfeiture of the assets of those convicted of drugs offences. There is now a very sophisticated laundering of the illicit gains of those convicted of supplying and producing drugs, and only by seizing their assets shall we spike the laundering process.
I am also worried about the number of convictions of foreign nationals. There should be automatic deportation of anyone from another country who is convicted of the supply and distribution of class A drugs, and there should be no right of appeal.
Notwithstanding those reservations, I give the Bill my complete support. I am sure that we all worry about the drugs problem. It has no respect for social class, from the café society people that I mentioned to those in the public bars of working class pubs, this pernicious and evil trade is making its impact. I speak with some limited experience in that respect. I congratulate my hon. Friend again on introducing the Bill. I shall have absolutely no qualms about giving it my full support.
1.10 pm
Mr. Frank Field: Like other hon. Members, I congratulate the hon. Member for Delyn (Mr. Raffan) on bringing forward the Bill. I was pleased that my hon. Friend the Member for Knowsley, North (Mr. Kilroy-Silk) made that point, but he was unfair to go on to say how limited the Bill's impact would be. No one who supports the Bill pretends anything other than that it is one small measure in attempting to deal with a grave problem. When we have had the chance to debate it before, we have pressed the Government on how comprehensive their policy is to try to beat the evil disease that is racking our society. Speeches have concentrated on the need to break up the centres of production, the supply routes and gates into this country, the pushing and the need to help those who are addicted.
However, today we are dealing with one small area, which is the penalty for those who are liable to make most out of the trade. I wish to give the Bill wholehearted support because it is a matter about which many of my constituents feel strongly. It is interesting that in meetings around the constituency, drugs is now the number one issue that people wish to discuss. Constituents are worried about the level of sentencing. They have another worry, on which the hon. Member for Gillingham (Mr. Couchman) touched. If people who make considerable profit out of the trade are given light sentences, they come out of prison to rich pickings. I point out that it is significant that three quarters of the Opposition Members present are from Merseyside constituencies. That shows the importance that we attach to the matter.
I ask the Under-Secretary to give us an idea about his proposals for dealing with the assets of those who have made considerable fortunes out of the drug trade. I should like to draw his attention to the fact that one does not have to be what is typically described as one of the big boys or girls in the trade to make a fortune. Let me illustrate that point. A couple of weeks ago I had a meeting in the north

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end of Birkenhead at which the residents' association told me that one of the ordinary pushers had been given a good beating up five times by local people because they were so horrified at the role that that person was playing in pushing drugs in the area. To ordinary people like me, the threat of one beating up from the north end of Birkenhead would bring about a change in my behaviour. To risk not one but five such beatings and still push that trade tells us something about the gains that those people are making.
When I reported back on the Bill in the constituency, there was overwhelming support for it. Equally, however, people have suggested that if we are going to hand out tough sentences, we should also take measures to make sure that those who are little more than merchants of death in that trade do not profit by the horrors that they inflict on others. Therefore, my one contribution to the debate is to ask the Minister to tell us something more about his proposals and the experience that he gained in the United States, which we learnt about in The Guardian and The Times earlier this week.
1.13 pm
Mr. Gerald Bermingham: As a practising lawyer, I have come across the merchants of death in one capacity or another on several occasions. An anecdote was told to me by a friend, who is also a practising lawyer, which illustrates the moneys involved in that dirty and despicable trade. One of his clients received a sentence of five years for supplying a class A drug. The only thing that concerned that man after sentence was how he would safeguard his investments while he was in prison. It is wrong that people should make a vast amount of money—vast amounts of money are involved in the trade—cause other people misery, go to prison, and know that while they are in prison their money is being utilised, earning more and growing in size so that they come out to a fat little nest egg. I take the view—I hope that the Minister will reassure us on the matter—that those who are involved in the drugs trade, make money out of the misery and suffering of others, and are convicted for doing so, should be put to the test of having to explain where their assets come from. I refer, of course, only to those who have been convicted.
I would take issue with anyone who argued that we would be shifting the burden of proof and contravening the natural principles of justice. Do we allow the burglar, after conviction, to retain his stolen property? We do not. It is taken back. The equivalent of the proceeds of a burglary in the case of dealing in class A or class B drugs is the money received. There is no logical distinction between the drug pedlar and the burglar or car thief who has taken property that he should not have taken.
I stress that the Bill is concerned with the drug dealer, not the user, who belongs in a quite different category. We are talking about those who make money out of the sale of class A and class B drugs. If legislation were brought in to take away the proceeds of crime from the dealer after conviction, I would support it. There is no distinction in my mind between the position of a convicted drug dealer and that of a burglar, thief or fraudster who gains the property of others through criminal activity. The dealer gains the property of others—their money—by criminal activity. We should not deny the courts the right to take that money back, by putting the dealer to the test of having to reveal where his assets have come from. I suspect that
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a vast number of members of the Labour party share my attitude towards the convicted criminal and the proceeds of his crime.
Belatedly, I congratulate the hon. Member for Delyn (Mr. Raffan) on the content of his Bill. I welcome the availability of the life sentence for those convicted of class A drugs offences. For certain dealers a life sentence is the only justifiable punishment. Life sentences are available for manslaughter. They are rarely used but they are part of the armoury of the court. The Bill adds the life sentence to the armoury of the courts in the case of class A drugs. I do not expect that many people will receive a life sentence. Very few cases would merit such a sentence. However, the possibility should be there.
I welcome, too, the increase to 14 years as the maximum sentence in the case of class B drug offences. Recently I read with horror an article in Police Review advocating the legalisation of cannabis. Few people in this country would support that attitude. Cannabis is as insidious and as open to manipulation as any other drug. There seems to be an attitude of mind that cannabis is not very harmful. I invite anyone who takes that view to spend a day in Amsterdam to see what happened there when a relaxed attitude was adopted towards the drug trade. It got so completely out of hand that the police were unable to cope, and there was the spin-off effect of people experimenting with quick pleasure and rapidly turning to hard drugs. Amsterdam is now an absolute mess, as anybody who has been there knows.
People who deal in cannabis also make vast fortunes. When we hear of shiploads of £2 million or even £3 million-worth of cannabis being intercepted, we should ask why people are importing the stuff. It is because there is a market for it, and a quick profit is readily available. That profit is not taxed and it is not, at the moment, seized. If a Bill to legalise cannabis were ever introduced, I should resist it all the way, and I am sure that many other hon. Members would, too.
Drugs are addictive, manipulative and damaging, and ultimately they destroy those who use them. Drug dealers are evil and cunning and should be incarcerated for a long time. If I had my way—I hope that the Minister can give us an assurance on this—when they came out of prison they would be bankrupt. There should be no profit in the sale of substances which cause such misery.
1.20 pm
The Parliamentary Under-Secretary of State for the Home Department (Mr. David Mellor): I congratulate my hon. Friend the Member for Delyn (Mr. Raffan) on bringing forward the Bill, on securing such widespread support for it, and on the eloquent way in which he proposed its acceptance in Committee and again today. He has done an excellent job.
The problem of drug abuse is a matter of increasing concern and is central to my work at the moment. I have recently returned from the United States, where I learnt a great deal about their problems. It would be instructive for the hon. Member for Knowsley, North (Mr. Kilroy-S ilk) to make such a pilgrimage, as I am sure that his understanding of the problem would deepen if he went there.
It has been noted that the Americans are as interested in how we are tackling our drugs problem as we are in knowing how they are tackling theirs. I was told more than once that they are surprised, not that we have a bad

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problem, but at how long it has taken us to get one. America has had a serious problem with drug misuse for several decades, but it has intensified as cocaine has entered parts of the community which previous drug habits did not. The problem in some other western European countries, such as the Netherlands, Italy and West Germany, started before ours and is worse than ours. I say that not out of complacency but to put our problems in perspective.
One of the lessons to be learnt from the United States is that there is no one lever on the wall which can be pulled to resolve the drug abuse problem. The matter must therefore be addressed in many ways. There must be interventions at each link in the long chain that leads, in the case of cocaine, from South America or, with heroin, for the most part from Pakistan, to the user. We have to disrupt the supply in the country of origin, at ports and airports and as it is distributed.
Although the Americans are spending between $1·5 billion and $2 billion at federal level on dealing with drug abuse this year, 20 per cent. was the best estimate that I could get from the Drug Enforcement Agency of the amount of cocaine that it is intercepting. We must all keep trying as hard as we can to disrupt the flow of drugs, but we can never take all drugs away from customers. In a free society there will always be some people who can get around the inevitably limited restrictions on the importation of a product.
Unless one is prepared to erect the barriers of totalitarianism, one cannot check every individual entering the country, intercept every package and search every container. No free society can do that, so we must give increasing attention to taking the customers away from the drugs. That is why we have been anxious to expand facilities for the treatment and rehabilitation of long-term addicts and have made direct funds available for that purpose. [Interruption.] I am trying to answer questions put to me by the hon. Member for Knowsley, North. No doubt he put them merely for the record and is not particularly interested in the answers, but it would be a good deal easier for me to make my speech if I could have his attention.
We have sought to give impetus to treatment and rehabilitation in two ways: first, funds are available through the DHSS central funding initiative; secondly, we have sought to apply proper pressure to health authorities to ensure that in carrying out their duty to provide comprehensive health care for their communities a fair proportion of funding is directed to the treatment of drug misuse. The Department is making efforts in that regard. About £700 million in increased cash is being made available to the Health Service this year, of which some £60 million to £70 million is actual growth money, and it is right that a fair proportion of that should go to improve these facilities.
I appreciate the gravity of the problem on Merseyside, where I shall be spending all day Monday. I do not have my programme with me, but I believe that I shall be visiting the constituency of the hon. Member for Birkenhead (Mr. Field). I shall be opening a new facility provided by Merseyside regional health authority, and I know from my friendship with the chairman that that authority is deeply concerned about the situation.
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Both we and the Americans are also using prevention campaigns and trying to educate people to recognise the misery of drug abuse. My hon. Friend the Member for Delyn quoted tellingly from the extremely helpful BBC television programme and the article in The Listener. Who could read about the misery of that addict's life without feeling that no one should have to go through that, and that even a teenager feeling rebellious and disenchanted with society should not willingly put himself at that kind of risk.
However much Governments may do, as both we and the Americans recognise in the forewords to our statements of strategy—it is Government's duty to set the framework—the drug menace will be turned back only when the energies of the whole community are directed towards eradicating it. That can be done in many ways. There is a need to build better relationships between parents and teenagers so that teenagers can talk candidly to their parents about the pressures to which they are subjected. People should be prepared to co-operate to the maximum extent with the police and the authorities in making it clear that drug pushers will not be tolerated in their communities. There is far more knowledge in the community about what is happening on the drugs scene than is ever revealed to the authorities.
If we are to defeat the pushers, I believe that even the user-pusher, for whom one may have some sneaking sympathy, must go to prison, along with the more cynical pusher who is in it purely for the money. Whether the motive for spreading the habit be cynical greed or the need to feed one's own habit, anyone who is prepared to try to interest others in drug taking deserves to be taken out of the community. That is the only defence mechanism that the community has.
I wished to put our efforts in context because I believe that we are evolving a comprehensive policy. In recent months we have intervened in all those ways, and more is to come. We have expanded the capability of the customs, and we will not hesitate to increase the numbers of customs officers if the threat from heroin and cocaine continues to grow. The value of intelligence and the impetus that is put on knowing what is happening is clearly evidenced by Operation Rattlesnake, which was concluded yesterday, when 14 kilos of cocaine were seized as a result of many months of effort.
There will always be room for the random stopping of people coming through customs, because experienced customs officers, pooling information with drug enforcement authorities in other countries, will be aware of what is going on. I was delighted to learn of the high level of co-operation between the United Kingdom and the United States in these matters. Any experienced officer on duty in the green channel will have an idea of the profile of the potential drug pusher. He will always make a large find by having the experience to say that someone is behaving suspiciously.
However, in the end, if we are to get more of the people organising this, and not just the mules, who are literally two a penny and will run the stuff through an airport for a fee, we shall have to rely on intelligence. There has to be the maximum transparency between police and customs. We have not only to lay down a database from which careful exploration of these conspiracies can be made, but we must have experienced analysts able to analyse what is happening, what that tells us and how that enables us to get down to the heart of the practical job of smashing these conspiracies.

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The police role against drugs needs always to be enhanced. The hon. Member for Knowsley, North took a somewhat one-dimensional view of the police role in talking only about drugs squads. Drugs squads have an important role to play at individual force level, including some of the specific work on the distribution network of drugs within the community, but the size of the drugs squad should not be taken as evidence of the commitment of the police force to the eradication of drugs, because that ignores two dimensions.
The first is the extent to which, on the instigation of Her Majesty's Chief Inspector of Constabulary, and the Association of Chief Police Officers, so much attention is being given to educating every policeman, and not just those who are in the drugs squad. This is particularly directed to the officers on the beat so that they are able to intervene helpfully in the drugs problem in their neighbourhood. It is not good enough to say that the drugs squad is the expert part of the force, and that the rest of the force gets on with other work. We all know that drugs are not a problem on their own. People involved in drugs are often involved in crime either because they are criminals or because they become criminals to feed their habit.
Secondly, major criminals who have hitherto earned their living from counterfeiting or robbing banks have moved into major drugs distribution as a way of making even richer pickings. That is why it is crucial for the House to recognise that up to 50 per cent. of the time of regional crime squads is spent investigating major drugs distribution networks. That is the way it should be. Drugs should be treated as a mainstream police activity, because it is certain that mainstream criminals are involved.
If there is to be an answer to the drugs problem, it can come about only by the will of the whole community to resist it, and the ability of people to say no. In the end, that is the key to it. It is the willingness at all levels of society — inexplicable to those of us outside — to become involved in drugs that is so frightening. The hon. Member for St. Helens, South (Mr. Bermingham) will find how desperately frightening it is when he goes to America next week. I wish him and his colleagues on the Home Affairs Select Committee all success on that visit. He will be as horrified as I was to learn of the extent to which cocaine has penetrated not just to the deprived ghetto areas, where one can argue, as the hon. Member for Knowsley, North did, that deprivation causes drug addiction, but to the achievers in society. These are successful people with a high income—the yuppies as I think they are sometimes called. The influence of such people—often bankers and executives, who go to the smart consulting rooms of the leading cocaine specialists whom I saw in New York—on the drug scene is causing the problem.
I was told that one of the leading groups telephoning the cocaine hotline consisted of airline personnel, and that makes one realise how serious is the threat to the community. That crucial personnel, whose spot-on behaviour is vital for the mechanisms of a sophisticated society, are robbed of their energies, abilities and concentration by drugs is one of the most frightening things. It is even more frightening in many ways than the fact that unsuccessful people escape from their misery into drugs, although that is troubling enough.
In erecting barriers against drugs, it is essential to have a framework of law and penalties which enable sentences of imprisonment to be visited on drug dealers which are
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commensurate with the gravity of the offence and enable a warning to be sent to those who might become involved that the courts will not overlook such behaviour and that it will be visited with severe sentences of imprisonment.
We know, as my hon. Friend the Member for Delyn has told us, that, within the existing range of penalties, the Lord Chief Justice has constructed a careful set of guidelines for the courts, which were promulgated in September 1982. I believe that the guidelines have been highly successful. In 1978, 15 people were sentenced to over seven years' imprisonment for drug offences. In 1979, the figure was 20. It was 16 in 1980 and 31 in 981, of whom three were sentenced to 14 years. There were 28 in 1982, of whom one was sentenced to 14 years' imprisonment.
In the first year after the Aramah judgment, 61 people were sentenced to more than seven years' imprisonment, of whom two fitted into the Lord Chief Justice's principal category of 12 to 14 years in prison for trafficking in class A drugs to the value of more than £1 million. However, neither of those persons received 14 years' imprisonment. One was sentenced to 13 years and the other to 12.
I do not have the figures for 1984, as they' will not be available until the summer. However, I have taken a sample of some of the cases which have been heard this year, and those who believe in stiff penalties for these offences will be encouraged to learn that this very month at the Inner London Crown court three people who were involved in one importation of 12.78 kg of heroin were each sentenced to 14 years' imprisonment. In February, at Maidstone Crown court, three principals in a heroin smuggling syndicate were dealt with following a 6 kg seizure last year. They were sentenced to 12 years, 12 years and 10 years respectively.
As recently as yesterday, an American woman who sought to import cocaine to the value of about £250,000 received eight years' imprisonment and an experienced High Court judge, Mr. Justice Kenneth Jones, made it clear that that was precisely the sort of sentence which those running drugs in from America could expect. On the same day, at Reading Crown court, an Indian involved in heroin smuggling was sentenced to seven years' imprisonment. When a circuit judge said the other day that the courts had declared war on the drug smuggler, there was much evidence — we read it in our newspapers every day — to show that he was right. I warmly congratulate the Lord Chief Justice on giving a lead, as I do the judiciary on so faithfully following it.
We are bound to make value judgments on gravity in the criminal justice system, but it is wrong that individual acts of murder, for example, or some offences not involving murder, should merit life imprisonment if drug trafficking, which involves death and misery on a large scale, does not. As my hon. Friend the Member for Delyn said, that must be the underpinning case for introducing life imprisonment for trafficking in class A drugs.
Within the 14-year tariff, the Lord Chief Justice is compelled to have a wide bracket when dealing with offences involving drugs to the value of £1 million or more. We know from the Rattlesnake operation that amounts that are worth more than £1 million are being intercepted. We know, too, that the tariffs for bank robbery and armed robbery are often higher than those for drug offences. That is because there is no restriction of 14 years for those offences. When the Bill becomes law, as I hope and pray it will speedily, those involved in offences

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in which a large quantity of drugs has been discovered will merit life imprisonment. In many instances a lot of money will be lying around and it will be clear that the Crown will not be able to take possession of it whatever effort is made to do so. Those who are now sentenced to the maximum term will be released within 10 years even without parole. A decade of one's life may seem worth while in the judgment of some if one has millions of pounds, dollars, Swiss francs or another currency stashed away to live on.
The penalty of life imprisonment and the determination of successive Home Secretaries to make that stick, enables the courts to deal for the first time with people who have cleverly salted away assets which, however hard we try, will be difficult to get hold of. It will also allow the tariff all the way down the scale to be lifted up. It is not for me to offer advice to the Lord Chief Justice, but I imagine, knowing of his identification of drugs as one of his principal worries in exercising his criminal jurisdiction, that as soon as the Bill becomes law he will take the opportunity of another case such as that of Aramah to lay down fresh guidelines. I am equally sure that his colleagues will, with equal vigour, ensure that those guidelines stick as well as they have made the Aramah guidelines stick.
This is an area in which it is crucial to make clear the good and bad aspects of the situation. If we are to get on top of the drugs problem, we shall only do so by candour and by recognising the scale of the difficulties that we face. It is clear that sending people to prison is important if they are major dealers, but that it is not the end of the exercise while we do not have the most effective way of confiscating assets.
There might be some misunderstanding about what can be done at the moment. It would be wrong, just because we are focusing on finding a new and more effective way of confiscating assets, to think that ways do not exist to deprive people of the profits of their crime. They do. As recently as the Criminal Justice Act 1972 a mechanism to make serious offenders criminally bankrupt was introduced. That was carefully thought out and went through the House, to a great deal of acclaim. It is regrettable that for one reason or another it is not much use and is regarded as a rather blunt instrument, but it is there and can be used.
The courts also now have the option of imposing unlimited fines. The confiscation of assets does not need to be by way of a confiscation order. If it is known that someone has £1 million stashed away, there is no reason not to fine him that amount and rely on the enforcement procedures. That can be done by the courts today, so it must not be thought that the courts are impotent to deal with assets.
Equally, the Inland Revenue has a role to play. Although it took a long time, it was almost certainly worth while, in the judgment of us all, that some years of pursuit of the principals in the Operation Julie case led, as I understand it, to the Inland Revenue recovering almost £500,000.
All those steps can be taken by the court today. What cannot be done as effectively as we would want is to deal with the fact that the sophisticated international criminal does not have a large deposit account in his name in a high street bank so that anybody on a moment's investigation can find it. He is involved in a sophisticated enterprise and
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the money may be in a country unaffected by the conspiracy. It may be in assets, passed to other criminals or laundered through a multiplicity of accounts, as the Americans will tell the hon. Member for Knowsley, North when he goes to the United States. We must find more sophisticated ways of tracing assets, and that is what we are directing our attention to.
In the world of fantasy which the hon. Gentleman will occupy at a moment's provocation, he seems to think that all this is easy. It is interesting to note that in goading us to find the answer he was rather short on solutions himself. Having latched on to one possible solution which appeared in the press yesterday as a result of my debriefing on my American trip—that there might be some utility in reversing the burden of proof—the hon. Gentleman, having called for effective measures, was quick to say that if that were introduced it might be too effective for the liking of the Opposition. Happily, there are independent spirits on the Back Benches in the shape of the hon. Member for St. Helens, South and others who, I dare say, will give that a fair wind.
The business of tracing assets requires a number of things. It requires the ability to find mechanisms to go through and uncover a complicated system of dealing in which the successful Mr. Big will have become involved, and a high level of co-operation between various countries. That is why we are working so hard with the Americans and through the Pompidou group—the Council of Ministers' group on the misuse of drugs, which we now chair—to find mechanisms to ensure that our orders are given effect in other jurisdictions.
Above all, there may need to be changes in banking arrangements so that there is transparency in appropriate cases. The Inland Revenue may need to be more greatly involved in the police work to uncover drug conspiracies. Those are major points. I know that when the hon. Member for Knowsley, North tries hard he is capable of being fair. He will recognise that these matters cannot be carried out at the drop of a hat. They merit careful thought. The worst step that we could take would be to rush into arrangements which we think will be successful, but which are only half thought out.
I am determined that we shall make progress on this matter. I do not regard my hon. Friend's Bill as the last word on the matter, but it is a crucial contribution to the efforts that we are all making to get on top of the drugs menace. I commend the Bill to the House.
1.45 pm
Mr. Raffan: I should like to make some brief comments on the speeches that have been made today. I wish in all good humour to apologise to the hon. Member for Knowsley, North (Mr. Kilroy-Silk) if I upset him by my description of the Labour party. I admit that it was a gross over-simplification to suggest that there were only two factions. I did not intend to do that.
I agree with most of the hon. Gentleman's comments. He made a valid point when he referred to the increased amount of heroin seized being as much a reflection of the fact that increasing amounts are entering the country as of the increasing effectiveness of the police force. There is no room for complacency. We must be eternally vigilant and do all that we can to improve the effectiveness and the co-ordination of the police and customs officers. The Bill is no substitute for that.

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It is unfortunate to play the old numbers game about customs officers. There is no doubt that my figures and the Minister's answer show that an increased number of customs officers, whatever their overall total number, are directing their efforts solely towards drug trafficking. All hon. Members must be extremely careful and responsible in their comments about customs officers. It is important that we do not say or do anything that could possibly lower their morale or raise the morale of drug traffickers. I hope that hon. Members will be responsible in that respect, because the House must give those officers every support.
I agree, as, did the Minister, with the remarks of the hon. Member for Knowsley, North about random stopping. In Committee, the hon. Gentleman referred to the three hours that it took to search a Boeing 737 and its passengers. If every plane coming into Heathrow or Gatwick were stopped and searched, there would be tiers of aircraft up to 50,000 ft. waiting to land. That would be impossible. By its nature, random stopping cannot be highly effective in the sense that it cannot stop the trade dead.
There are many other aspects of the problem, including the medical and educational aspects. Last month the Minister produced a pamphlet on tackling drug misuse, which has been most valuable and which brings everything together. He is leading a co-ordinating team of Ministers from different Departments who are considering all the different ways of tackling drug misuse. I am only sorry that the name of my right hon. Friend the Secretary of State for Wales is not mentioned, although the name of one of the Under-Secretaries of State for Scotland is. Perhaps we can bring that matter up at Welsh Question Time and find out whether he has been attending those meetings. I hope that he has.
Another important aspect raised by the hon. Member for Knowsley, North is that of sentencing and Lord Chief Justice Lane's guidelines. The hon. Gentleman is being unfair in harping on about the numbers who receive the maximum sentence. The guidelines have proved effective. Although not as many drug traffickers have received the existing maximum sentence as he would have wished, as the Lord Chief Justice said, there are great difficulties in catching the big fish. Obviously, as my hon. Friend the Member for Bolton, West (Mr. Sackville) said in Committee, we cannot sentence them until we catch them. It is a valid point, but I do not believe that sentencing is at fault.
We must detect the major dealers, and my hon. Friend the Minister made an effective point about the sophisticated methods of detection in the United States, which I have no doubt are duplicated here. The major drug dealers—the merchants of death, as the hon. Member
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for St. Helens, South (Mr. Bermingham) rightly called them—are sophisticated operators. They are not running sweetie shops. We need highly sophisticated operations and legislation to deal with them.
My hon. Friend the Member for Gillingham (Mr. Couchman) was disappointed that there is no clause in the Bill relating to the forfeiture of assets. The hon. Member for Birkenhead (Mr. Field) also believed that it might have been useful to include such a clause. We had discussions about it, but the feeling was that it would be sad to endanger the Bill by including a clause that might he contentious and inadequate.
My hon. Friend the Minister and my hon. Friend the Member for Gillingham mentioned sophisticated laundering operations. In order to deal with them, we need highly effective legislation, which should not be drawn up hurriedly, although I hope that it will be introduced in the next Session. That Bill will obviously be much longer than this one, and it must be sophisticated if it is to work. My hon. Friend the Minister referred to the present bankruptcy legislation, which is rather a blunt weapon. It would be sad if any legislation on the forfeiture of assets were also blunt.
There was an omission in my opening speech, which I wish to correct now. It might be invidious to single out any of my supporters for the help and encouragement that they have given me, but I shall do so, because the hon. Member for Birkenhead has give me considerable support and help, and I wish to pay tribute to him. His commitment to the problem is well known in the House, and he was the instigator of an important early-day motion that was tabled last autumn. I am extremely grateful to him for his assistance.
The Bill is no magic cure, as the hon. Member for Birkenhead said. The problem of drug misuse is highly complex, extremely serious and ever-growing. There would be no point in the Bill if it were seen simply as the Tory Right on a rampage of retribution. The fact that I introduced it shows that it is not a Tory Right measure anyway. The hon. Member for Knowsley, North was right to say that there are many aspects to the problem, including prevention, treatment and rehabilitation. However, as my hon. Friend the Minister said, no lever can be pulled which will suddenly, miraculously and at a stroke resolve the problem. The Bill covers just one aspect of deterrence, which in itself is just one part of prevention.
I hope that the hon. Member for Knowsley, North's suggestion that the Bill will have no impact will be proved wrong. It is unduly negative to say that now. It is a modest Bill, but it can do something, and surely we should do anything that we can.
Question put and agreed to.
Bill accordingly read the Third time, and passed.

Prohibition of Female Circumcision Bill
As amended (in the Standing Committee), considered; reported, without amendment.
1.53 pm
Mrs. Marion Roe: I beg to move, That the Bill be now read the Third time.
I am delighted that we have reached this stage of the Bill's progress because there has been pressure for such a measure for several years. I am grateful to all those who have assisted me. The purpose of the Bill is to make it clear beyond doubt that the practice of female circumcision should be illegal in Britain. Although, as the law stands, it might be argued that to perform such an operation constituted an act of actual bodily harm, there is no precedent detailing this. The degree of abhorrence of these procedures felt by all can leave no room for uncertainty. The Bill, though short, is both concise and exact and achieves that purpose.
Female circumcision is an act of mutilation performed upon young girls and women. The Bill seeks to include all the various methods adopted, from the most simple, known as sunna, to the most radical, infibulation. To achieve this, the working of the Bill, as set out in clause 1(1), has had to be of a catch-all nature. Obviously there is no desire so to leave the Bill that it interferes with legitimate medical operations, and clause 2 makes this clear. With your permission, Mr. Deputy Speaker, I shall return to that shortly.
Accordingly, any act of mutilation is included in clause 1, which creates the offence itself. This is then extended to include the aiding and abetting of another in self-mutilation. As I mentioned in Committee, this is a direct analogy with the Suicide Act 1960. No offence is committed by a person performing such a violent act upon herself. In our society, such prohibitions, echoing faintly the notion of burying suicides in unconsecrated ground, are not felt to be appropriate. But the weak need the protection of the law from those who would exploit their weakness. If these practices are to cease in this country, the law prohibiting them cannot have potential loopholes.
In accordance with the basic principle of the criminal law, the Bill therefore provides that to aid and abet the offence is also itself an offence.
The penalties envisaged underline the detestation of female circumcision in this country. The Bill does not regard the offence as one to be treated lightly.
Since the discussion of the Bill in Committee, I have received a letter from Professor Macnaughton, president of the Royal College of Obstetricians and Gynaecologists. In it he sets out the views of the college:
"Firstly, we are at one with you in seeking to prohibit female circumcision of any kind being performed in this country. However, there are a variety of surgical operations that are necessary for the physical and mental health of women, which have nothing whatever to do with circumcisions performed for traditonal or cultural reasons. I wish to make it clear that the College would be opposed to any statutory limitations on these legitimate procedures."
The operations to which Professor Macnaughton refers can be divided into two categories—those dealing with physical health, of which cancer is an example, and those dealing with mental health.
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The Bill does not seek to interfere with a patient's right to receive legitimate or ethical surgery, and therefore clause 2 excludes such operations from the scope of the Bill.
There has been some discussion of the nature of exclusions for reasons of mental health. In a very small number of cases surgery is required for reasons other than physical illness. Obviously these fall into a category which is a form of cosmetic surgery, often resulting from the distress caused by a perception of abnormality.
The problem in a previous incarnation of the Bill proved insurmountable, as the word "abnormality" was used without real regard to its definition. In practice it must be right to leave that to the judgment of the individual doctor. This consideration is essential.
There is no doubt that if a woman was deluded or imagined that there was something wrong with her, it would be good professional practice not to offer surgery but to persuade her to accept psychiatric treatment. This is a view that could adopted with all forms of cosmetic surgery, but is surely best left to the professional judgment of a doctor. Such cosmetic surgery is a long way, both qualitatively and quantitatively, from female circumcision.
The purpose of the Bill is to prevent the custom of female circumcision, not legitimate, ethical and surgical procedures. The exclusion therefore of reasons of mental health needed careful drafting. There was no point in passing a Bill that created an offence if, in a later clause, it was so poorly drafted that it allowed unlimited exemptions. Accordingly, it is worth examining precisely the offence and the practice that we find so abhorrent.
The Bill seeks to prevent the ritual mutilation of the female genitalis, hence the deliberate inclusion of the words "custom or ritual" in clause 2. We cannot create an offence and then say that the act constituting that offence is exempt from the Bill. Such legislation would be nonsense. The provisions for exemptions for reasons of mental health must ensure that reasons of custom or ritual are not justified.
We cannot allow female circumcision to occur on the ground that a woman's health would suffer if she did not conform with the prevailing custom of her community. Such an argument knows no bounds—we would have allowed suttee in this country a century ago. Would we allow it now were it still the prevailing custom in India?
The Bill has its roots in the protection of children. It stands four square behind the United Nations declaration on the rights of children of 1959, which asserts that children should have the possibility to develop physically in a healthy and normal way in conditions of liberty and dignity.
The Bill seeks to prevent an appalling practice which leads to no physical benefits and is associated with a number of health hazards, including haemorrhage, pain, shock, infection, septicaemia and long-term obstetrical problems.
We in Britain are not alone in our desire to act. Other European countries, including Sweden, have banned the practice. In Kenya, it is illegal, as are all but the simplest procedures in the Sudan.
There is no doubt that at the same time as legislation there must be a process of health education among those people who still perform the acts. I am grateful to my right hon. and learned Friend the Minister, who confirmed in

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Committee that his Department would consider sympathetically any applications for grants for that purpose, but we cannot allow that consideration to prevent the Bill from becoming law. I therefore commend the Bill to the House.
2.2 pm
Sir Geoffrey Finsberg: I congratulate my hon. Friend the Member for Broxbourne (Mrs. Roe) on her luck in the ballot and on bringing forward this important Bill. May I apologise to you, Mr. Deputy Speaker, for not being able to remain until the end of the proceedings.
I want to give the Bill my support because it concerns an issue that came across my desk when I was in the Department. It is one that I viewed with the greatest sympathy, but there were then, as my hon. Friend said, many difficulties. The medical profession was not perhaps as helpful as it has now turned out to be. The Department tried to get the matter working, but it was not possible. I am delighted that, clearly with the aid of my right hon. and learned Friend the Minister for Health, that has now been possible.
I congratulate my hon. Friend, and I hope that the Bill will rapidly become law.
2.3 pm
Ms. Jo Richardson: I also congratulate the hon. Member for Broxbourne (Mrs. Roe) on her Bill, of which I am a sponsor. She has done a good service by introducing it. I hope that today we shall see the completion of its stages in this House. As she said, the subject has had a somewhat chequered legislative career. In many respects, we all understand the problems which gave rise to the complexities of legislating on this difficult subject
There is no doubt that there is enormous abhorrence of and anxiety about the practice. At the same time, as hon. Members will know, some black women feel that clause 2(2) could be considered to have racial overtones as it forbids the use of mental stress as a reason for those who wish to have female circumcision for ritual or custom as against those who use mental stress as a reason because of difficulties with deformed or enlarged genitalia. I hope that we have been able to convince them that there is no such intention behind the Bill.
It must be put on record that even now the Royal College of Obstetricians and Gynaecologists is not, as far as I am aware, 100 per cent. satisfied with the formulation of the Bill. Indeed, it gave me a revised amendment which I tabled unsuccessfully in Committee. The Commission for Racial Equality also has some reservations about this portion of the Bill. However, I have been unable to find any other way of changing it. Perhaps the noble Lords will have a look at it.
I underline the hon. Lady's hope that the Minister of Health will confirm what his colleague the Under-Secretary of State said in Committee two weeks ago. He said that he recognised that black women face very serious pressures in all sorts of ways because of the practice in their own community, and that they needed health counselling and health education. He undertook to look at that aspect with sympathy.
It was only by chance that before coming into the Chamber this morning I saw a letter to me from the director of the Foundation for Women's Health research
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and development—the organisation called FORWARD. It is a very reputable organisation with distinguished sponsors, including Dame Josephine Barnes, Lord Kennet and Baroness Lockwood. The director, Mrs. Stella Efua Graham — who, in her correspondence with me, has welcomed the Bill—sent me a copy of the letter that she sent to the Under-Secretary of State on 18 April picking up the point that he made in Committee, when he said that he would look sympathetically at accepting
"applications from any organisations for funding to cover such activities."—[Official Report, Standing Committee C, 3 April 1985; c. 16.]
She points out that, in the name of FORWARD she asked for support from the DHSS in late 1983, but received no response.
Mrs. Graham is putting forward—as she has in the letter—three projects which could very well receive funding and support from the Department. It would help in terms of health education and health counselling, and would be seen by those who may be worried about the matter as a sensible way of having a public health programme alongside the legislation that we are discussing today.
Although I am not trying to bounce the Minister into an answer on the project, I hope that, when he has an opportunity, he will discuss the application with his hon. Friend. It would go a great way towards reassuring people who would genuinely like to outlaw the practice altogether but who see the difficulties of women, of their mothers and of their prospective husbands in dealing with a problem which has been so much a part of their culture and practice.
I reiterate my congratulations to the hon. Lady and hope that, when the legislation becomes law, the Department will deal with it in the most sensitive possible way and not in a nasty, draconian way, because the Bill will cause some problems and one would not want legislation to drive the practice underground in a way that none of us would welcome.
2.9 pm
The Minister for Health (Mr. Kenneth Clarke): I happily join in the congratulations to my hon. Friend the Member for Broxbourne (Mrs. Roe) on the way in which she has so skilfully steered the Bill through the House to its present stage. I agree with my hon. Friend the Member for Hampstead and Highgate (Sir G. Finsberg), who was a colleague of mine in the Department until recently, that it proved an intractable and difficult problem when it came to drafting legislation. My hon. Friend the Member for Broxbourne has come close to leading us to a solution.
I am sure that the Bill will be welcomed by the public because publicity about those operations has aroused general indignation. Although we believe that female circumcision has been carried out in only a handful of cases in this country, it does not mean that there are not compelling reasons for legislation to make sure that there are no more such operations here. The mutilation and impairment of young girls and women have no part in our way of life. I am glad to know that that view is shared by representatives of the ethnic minorities who live here. That is why the Government warmly welcome the Bill, and have, indeed, welcomed it throughout its passage.
I agree with my hon. Friend the Member for Broxbourne that it is arguable that the procedures known as female circumcision are already against the criminal

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law in this country, but that is by no means certain. We have not had a case to provide a precedent. I am sure that the House would prefer that we had definite legislation making it clear in statute that it is contrary to criminal law.
The problem that arose in the early stages of the Bill was to make sure that one discriminated between female circumcision and other legitimate surgery, because in straight anatomical terms there is little difference between the operation known as circumcision, or some forms of it, and other desirable medical practices. The present drafting of the Bill, as a result of work in Committee, meets that aim and will proscribe the activities that we wish to proscribe without damaging the decision of those who wish to carry out legitimate surgery on their patients.
The hon. Member for Barking (Ms. Richardson) mentioned the Royal College of Obstetricians and Gynaecologists. A copy of the latest letter sent by the president to my hon. Friend the Member for Broxbourne has been given to me. It may not have reached the hon. Member for Barking yet. My hon. Friend quoted a passage from Professor Macnaughton's letter. He concludes by saying:
"The College will be happy to comment on any amendments that are suggested and I can confirm that the College would approve of your Bill as amended by the Standing Committee."
That may mean that the college is now satisfied that any possible problems have been sorted out. While I am sure that their Lordships will wish to look at the Bill, I hope that they do not embark on amateur draftsmanship of their own and get the Bill back into complications that might run the risk of frustrating its purpose.
Like all those who have spoken so far, particularly the two hon. Ladies, I share their view that there is no question of racism in the Bill or anything of that sort. I am satisfied that it is necessary to make the references to custom and ritual for the reasons explained by my hon. Friend the Member for Broxbourne. All the sponsors of the Bill and all those associated with it are plainly not only not guilty of any racialist views, but many of them, including the hon. Member for Barking, play a prominent part in combating racism and trying to make sure that no elements of racial segregation find their way into our law. It is the need for careful drafting that caused those references, and there is no need for people to be suspicious of them.
I agree that the Bill should be seen only as a necessary part of a wider health education campaign to eradicate that practice in this country and abroad. We do not underestimate the importance of education and counselling among the communities in which female circumcision has been a custom for millennia. Groups are now at work among those communities providing just such counselling and information services. We share their aims and commend the work that they do.
The hon. Member for Barking is ahead of me in reading copies of correspondence addressed to my hon. Friend the Under-Secretary of State. He made a helpful offer in Committee that we would look at any applications for grants. We shall do so as quickly and sympathetically as possible.
I conclude by renewing my congratulations to my hon. Friend the Member for Broxbourne on her success in having brought the Bill this far. I commend the Bill to the House, and hope that its passage through another place will be equally successful.
Question put and agreed to.
Bill accordingly read the Third time, and passed.

Charter Trustees Bill
Not amended (in the Standing Committee), considered; reported, without amendment.
Motion made, and Question, That the Bill be now read the Third time, put forthwith pursuant to Standing Order No. 58 (Third Reading) and agreed to.
Bill accordingly read the Third time, and passed.

Hill Farming Bill
Considered in Committee; reported, without amendment.
2.17 pm
Mr. Robert Jackson: I beg to move, That the Bill be now read the Third time.
This is a simple Bill. It is a Bill to save the bilberry. Farmers in upland areas need to be able to burn heather and grass so that their livestock are able to benefit from fresh heather and grass. That procedure creates difficulties for wildlife in the upland areas, and it has therefore been necessary, since the passage of the Hill Farming Act 1946, to regulate the burning of heather and grass. It has been found that in practice other species may be damaged by the burning, especially bracken, vaccinium and gorse, and it has therefore been thought necessary to introduce a Bill to enable the Minister to control the burning of those species. The Bill is widely welcomed by those concerned, and I hope that hon. Members will give it their support.
2.18 pm
The Minister of State, Ministry of Agriculture, Fisheries and Food (Mr. John MacGregor): I congratulate my hon. Friend the Member for Wantage (Mr. Jackson) and thank him for introducing the Bill. As he said, the Bill will extend the powers available to Ministers to make regulations controlling moorland burning, which is very important for agricultural management.
The Bill will bring three new plant species—gorse, bracken and vaccinium, or the bilberry—into the same category as heather and grass. The need to make this change was another profit of the discussions held by the heather and grass burning working party, which observed that the burning of moorland vegetation affects adventitiously a number of other plant species which grow in close association with heather and grass. Chief among these are gorse, bracken and vaccinium.
In addition, some farmers choose deliberately to burn certain of these species either to control or to eradicate them. As the potential risks and consequences of the burning of these species are similar to those of the burning of heather and grass, the working party argued that a loophole in the present controls needed to be closed. I am persuaded by this argument and am delighted that the Bill gives us the opportunity to bring about the necessary changes. It therefore has the support of the Government.
Any system of control is meaningless unless it is backed by some sort of penalty. The Hill Farming Act already includes a fine of up to £400 for a breach of the present regulations, and my officials in the regions are under instruction to follow up reports of illegal burning. Last year there were only two such reports. We have also

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written recently to chief constables asking for their cooperation, by making sure that police officers in rural areas are aware of the legal requirements. We therefore have a mechanism for enforcement which, I am pleased to say, has rarely to be applied to the full, but which provides an appropriate back-up to our main aim, which is to encourage sensible burning through sound advice. This year, as in previous ones, our publicity campaign will include radio announcements and press notices, issued at regular intervals throughout the year and designed to achieve this end.
It is perhaps premature to talk of the type of controls that we might apply once the Bill becomes law, but we would want to use these new enabling powers as soon as the necessary subordinate legislation can be drawn up. I see here a further opportunity for consultation with the working party, since subtle differences might exist in the growing charactristics of the three new species and in how they are best dealt with. I believe that it will also be important to extend the heather and grass burning code which the working party has produced and which is widely circulated, so that suitably fuller advice on moorland burning is available. However, I do not regard these as protracted matters and I hope that subordinate legislation might be laid before the House fairly quickly once the Bill becomes law.
I am delighted to be able to commend this Bill to the House, because, although it is short and simple, it marks yet another important step towards achieving a balance between the needs of conservation and the needs of agriculture, which the Government have already done much to further.
Question put and agreed to
Bill accordingly read the Third time, and passed.

Agricultural Training Board Bill
Considered in Committee; reported, without amendment.
2.22 pm
Mr. Thomas Torney: I beg to move, That the Bill be now read the Third time.
This is a modest Bill which I hope will enable the Agricultural Training Board to offer its unique training expertise overseas to the benefit of the United Kingdom.
As many hon. Members know, the Agricultural Training Board, which was established in 1966, provides training for the commercial agriculture and horticulture industries in Great Britain. Many of the board's activities centre on short craft skills courses for agricultural workers. It has great expertise in the development of those courses and the training of instructors. It also undertakes management training and organises farming apprenticeships and other youth training. Its skills are highly regarded by the farming industry in the United Kingdom.
The board has powers under section 5 of the Agricultural Training Board Act 1982 to teach workers from overseas the methods of agriculture in the United Kingdom, but those powers do not enable the board to carry its expertise overseas. Its ability to do so would be especially useful in the involvement in major export contracts in the agricultural sector such as the installation of irrigation schemes and the setting up of other agricultural businesses, such as complete dairy units, in areas like the middle east. The training of local staff to run such new systems is a vital part of the total export package, and the participation of the board could improve the United Kingdom's chances of gaining contracts and materially helping employment in the United Kingdom.
I hope that the board will be able to operate profitably overseas and that its involvement in such work will be of great benefit to the United Kingdom. There are safeguards to that effect in the Bill. I hope also that the board will he able to use its commercial expertise and to maximise its revenue so that any profits that are generated can be used for the material benefit of training in the United Kingdom.
The Bill also has the subsidiary purpose of strengthening Ministers' formal rights of access to the board's books and records. There is already an agreement that such access will be given, but this power will bring the Agricultural Training Board into line with the current guidelines for public bodies.
The Agricultural Training Board is outstandingly effective in promoting training techniques in agriculture. I hope that this modest measure will enable the board to help to promote British agricultural expertise and business worldwide. I commend the Bill to the House.
2.25 pm
The Minister of State, Ministry of Agriculture, Fisheries and Food (Mr. John MacGregor): It is most gratifying that the hon. Member for Bradford, South (Mr. Torney) has been able to progress this useful Bill so fast. I congratulate him on introducing it and on the speed with which he has got it through the various stages so far.
As the House knows, the Agricultural Training Board was established in 1966 under the Industrial Training Act 1964, together with many other training boards in ether industries. Subsequently, the board was transferred to the

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responsibility of the Ministry of Agriculture, Fisheries and Food and its powers were consolidated in the Agricultural Training Board Act 1982.
The board provides a vital training role for the commercial agriculture and horticulture industries in Great Britain. It is largely funded by a grant in aid from the Ministry of Agriculture, Fisheries and Food, amounting to more than £7 million in 1984–85. The development of short craft skills courses and the training of instructors is undertaken by the board, while the organisation of most individual training courses is carried out by a network of 600 farmers' training groups. The strength of this group activity, and the board's expertise in organising them, is of particular interest to developing overseas countries, as the hon. Gentleman has emphasised. In addition, the board undertakes management training and organises farm apprenticeships and other youth training. The board's skills are highly regarded by the farming industry.
In 1982, the then board chairman suggested that the board's training expertise could with advantage be made available overseas. Ministers agreed in principle on the understanding that such activities would be undertaken by the Agricultural Training Board in collaboration with the private training sector and that this would not lead to any dilution of domestic training effort. That is most important. As the hon. Gentleman has pointed out, clause 1(2) of the Bill imposes on the board a requirement to act commercially in the exercise of its overseas functions so that at an early date it can show that expenditure on overseas work can be met from revenues received. That is a most important provision, as we do not wish the United Kingdom agriculture industry to suffer any diversion of funds from its training in order to meet the needs of others, however deserving, outside the United Kingdom. The board has had substantive discussions with private sector consultants through the British Consultants Bureau on this basis, and I understand that a good understanding has been reached.
The 1982 Act does not, however, enable the board to engage fully in overseas activities. The hon. Gentleman's Bill would therefore empower the board to undertake work which Ministers have agreed is desirable. It would remove the restraint on providing training for employment overseas to permit the board to provide training courses and teaching and advisory personnel as well as advice and to charge for those services. Through the requirement to keep separate accounts under clause 1(3), the Bill also provides an assurance for agriculture that there is to be no diversion of funds from the United Kingdom to overseas activities.
Although the board has not yet been authorised to do work overseas, there is considerable evidence that there would be a demand for its services. It has received requests for consultancy and training advice and activities, and there is a steady flow of orders for its publications.
I was also pleased to see that the opportunity had been taken in the Bill to incorporate a further amendment to the Agricultural Training Board Act 1982 to give the Government a formal right of access to the board's books and records. As has already been said, there is already an agreement between Ministers and the board, and it is reaffirmed every year when grant in aid is given that such access should be given.
592
The Bill is welcome. The ATB has great expertise in the sector within which it operates. As a public sector body, it must first provide a high service and value for money for its customers in the United Kingdom. It is most important that the public and private sectors collaborate in a positive fashion to promote our interests abroad. Agricultural expertise in this country is second to none and many areas of the world would benefit from it.
I highly commend the Bill to the House.
Question put and agreed to.
Bill accordingly read the Third time, and passed.

SOLICITORS (INDEPENDENT COMPLAINTS PROCEDURE) BILL
Order for Second Reading read.
Hon. Members: Object.
Second Reading deferred till Friday 3 May.

MINIMUM WAGES ETC. BILL
Order for Second Reading read.
Hon. Members: Object.
Second Reading deferred till Friday 3 May.

SPORTS FIELDS AND RECREATIONAL FACILITIES BILL
Order read for resuming adjourned debate on Question —[25 January]—That the Bill be now read a Second time.
Question again proposed.
Hon. Members: Object.
Mr. Deputy Speaker (Mr. Ernest Armstrong): Second Reading what day? No day named.

EMPHYSEMA (COMPENSATION OF COALMINERS) BILL
Order for Second Reading read.
Hon. Members: Object.
Mr. Deputy Speaker: Second Reading what day? No day named.

NORTHERN IRELAND (TERMINATION OF JURISDICTION) BILL
Order for Second Reading read.
Hon. Members: Object.
Second Reading deferred till Friday 3 May.

WORKING CONDITIONS OF GOVERNMENT TRAINEES BILL
Order for Second Reading read.
Hon. Members: Object.
Second Reading deferred till Friday 26 April.

PROTECTION OF THE RIGHTS OF THE ELDERLY IN HOME OWNERSHIP BILL
Order for Second Reading read.
Hon. Members: Object.
Second Reading deferred till Friday 26 April.

HIGHLANDS AND ISLANDS DEVELOPMENT BOARD BOUNDARIES AMENDMENT BILL
Order for Second Reading read.
Hon. Members: Object.
Mr. Deputy Speaker: Second Reading what day? No day named.

RECREATIONAL GARDENING BILL [LORDS]
Order for Second Reading read.
Hon. Members: Object.
Second Reading deferred till Friday 26 April.

BETTING, GAMING AND LOTTERIES (AMENDMENT) BILL [LORDS]:
Read a Second time.
Motion made, and Question proposed, That the Bill be committed to a Committee of the whole House.—[Mr. Greenway.]
Mr. Deputy Speaker: I draw the attention of the House to the fact that it is unusual to take the Committee stage without notice. Is there any objection?
Question put and agreed to.
Bill immediately considered in Committee; reported, withour amendment.
Motion made, and Question, That the Bill be now read the Third time, put forthwith pursuant to Standing Order No. 58 (Third Reading), and agreed to.
Bill accordingly read the Third time, and passed, without amendment.

POLITICAL PARTIES (INCOME AND EXPENDITURE) BILL
Order for Second Reading read.
Hon. Members: Object.
Mr. Deputy Speaker: Second Reading what day?
Mr. John McWilliam: With the leave of the hon. Member concerned, Friday 5 July.
Second Reading deferred till Friday 5 July.

BUSINESS OF THE HOUSE
Ordered,
That, at the sitting on Tuesday 23rd April, proeedings on the business selected in pursuance of paragraph (2) of Standing Order No. 6 (Arrangment of public business) shall, if not previously concluded, lapse at Seven o'clock and shall be counted as a half day as provided by that Order.—[Mr. Nubert]

Soccer Violence
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Neubert.]
2.34 pm
Mr. Tony Banks: I shall declare my interest in this matter while the shed end is vacating the Chamber. I have been a regular football supporter for about 30 years. The first full season that I spent watching Chelsea was the 1954–55 championship year. Under the inspired chairmanship of Ken Bates, I look forward to a repeat performance of that division one championship in the near future. As I have since moved myself to Newham, I go to watch West Ham as well as Chelsea. I am the vice-president of Clapton football club in my constituency, which is one of the oldest and most distinguished amateur football clubs in the country.
The subject of British soccer generally is of sufficient interest to merit a full parliamentary debate. When the Government produce their report, I hope that we shall get just such an opportunity.
Crowd trouble inside and outside football grounds is not a recent development and is not confined to Britain. The problem should not be overdramatised by politicians and the media. However, more people have become aware of the problem and it has increased in seriousness. The Prime Minister is far from being the first politician to express concern. The right hon. Lady's instant-response approach could create almost as many problems as it solves. If the Prime Minister had not seen the hooliganism at the Luton Millwall match on television, I doubt whether we would have had so many Ministers running around trying to find immediate solutions to deep-seated and complex problems.
I hope that the Minister has studied the report of Norman Chester's committee, which was produced in 1968, the White Paper on sport and recreation, which was produced by the previous Labour Government, the 19'76 report of the working group on football crowd behaviour, a committee chaired by the late and much-lamented Frank McElhone, and the 1984 report on football violence from the Association of Metropolitan Authorities. If the Minister can find the time to add to that reading list, he might like to read my own paper on the subject, which was written when I was chairman of the GLC's general purposes committee in 1975. This is a way of showing that the problem of crowd violence at football grounds has been analysed to death over the past 15 to 20 years. Unfortunately, successive Governments, the football authorities and the clubs have failed comprehensively to deal with it properly. There have been too many knee-jerk reactions and far too little real action.
I do not believe that there is any one identifiable cause for football violence. Different outbreaks occur for differing reasons. Local solutions based on local knowledge but with Government support are far more likely to be successful.
The problem should be confronted at two distinct levels. The long-term approach should be aimed at dealing with the decades of neglect within the sport itself. The short-term approach should be designed to contain the immediate menace of increasing crowd violence that is created by a small and unrepresentative element. There is

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disturbing evidence coming to light which shows that the most serious violence in football is being efficiently organised.
It is only comparatively recently that professional football has become aware that it is in competition with other forms of mass entertainment and, in comparison, is losing out pretty badly. Those who go regularly to football matches know that terraces open to the weather, insufficient seating and primitive refreshment and sanitary arrangements remain the rule rather than the exception. Any serious supporter knows just how appalling conditions remain in most of the 92 league clubs.
Since 1979 the Prime Minister has been to just two matches, and they were both cup finals. She was lucky to get the tickets. Perhaps she will tell me her source. I do not know how many league clubs the Minister has been to, but it is important that politicians who will be making decisions and recommendations should base those on some element of personal experience.
Virtually all football league clubs need to be modernised. That is best done through partnership arrangements between clubs, local authorities and Government agencies, together providing the large-scale funds that are needed to establish sports and social complexes based on the individual grounds.
Local authorities already give grants to a wide range of cultural bodies. I can speak as a past chairman of the arts and recreation committee of the GLC. I have never been able to see any rational argument for excluding footboll clubs, which represent a major working-class cultural activity, from receiving local authority grants. When I argued that particular case in 1975, it was caricatured as soccer on the rates. We have opera, theatre, ballet and recreation on the rates, so why not professional football?
Much could be achieved in terms of general ground improvements and the more intensive use by commuities of football grounds, but it requires imagination as well as resources. None of that is original, because closer working between local authorities and football clubs is already well under way. In Manchester, both Manchester city football club and the city of Manchester recreation department have been involved in the past five years in a football and community programme. It is probably the most highly developed scheme in the country and shows the positive benefits of a long-term relationship between football clubs and local authorities. In that particular scheme, I understand that something in excess of 100,000 people have taken part, 70 per cent. of the courses and competitions that are organised are aimed at the 8 to 18 age group and 85 per cent. of the people taking part have come from the local communities.
In London the GLC has been pushing ahead, as one would expect from a well-run Socialist and progressive authority. In the past two years we have developed several major initiatives with football league clubs. The provision of the all-weather pitch at Fulham was in exchange for the club guaranteeing a minimum of 500 hours of community use of the pitch for six years. A programme of community use is already well developed and it is used by school children, the unemployed, and people with disabilities, and there is a highly imaginative programme involving a senior citizens' club. In a short time that club has become an important resource for the local community instead of a woefully under-used facility.
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A recent scheme announced by the GLC involves close co-operation with Arsenal football club, using the club's indoor training facilities for the benefit of the local community. Such things can be done and the Government should encourage local authorities to work on those partnership arrangements with clubs. Their grounds represent an under-utilised asset within our communities where such assets are badly needed.
Public funds should not be used to reinforce private gain. Therefore, I would look for radical changes in the way in which clubs are presently owned and organised. If football clubs were owned and run by a more representative section of supporters, the problem of crowd trouble would disappear in the long run. Football should look to the way in which cricket and rugby union organise themselves. That is the way that professional football should go. It is only in football that directors can act like 19th century mill owners. Regrettably, it is the worst elements of Victorian attitudes that survive in the way that our premier national sport is run.
Those are some of the long-term problems. Let me now deal briefly with the immediate problems we face. No one can doubt that soccer crowd violence is on the increase. The bad publicity that the sport gets is clearly affecting the gates and therefore the economic ability of the game to deal with its problems. It is a reinforcing cycle. The violence is partly a reflection of our increasingly violent society. Therefore, it is nonsense to single out football violence.
I shall make some brief suggestions because I wish to give the Minister plenty of time to reply. As it is a short debate I shall make out a list and if the Minister cannot respond to them all when he replies, perhaps he will respond to me in the usual way, as he has done in the past.
First, all football league matches should be played on Sunday mornings. That would undoubtedly upset some people, but it would do much to eliminate the problems of alcohol inside the grounds. Secondly, ground, should be all seating, covered and divided into small secure sections with closed circuit television. I know that it is easy to say that, but such ground improvements and security measures would cost the game millions. If the Government are not prepared to provide the cash, they should make low or no-interest loans available to professional football clubs through a national funding agency.
Thirdly, if, as I hope, we move towards the concept of football clubs organised as social clubs, admission by club membership card would be compulsory without any erosion of civil rights, which straightforward identification cards at present represent. I read today in The Standard that the chairman of Luton football club is pushing such an idea.
Fourthly, where clubs have singularly failed to minimise the dangers, they should be penalised in a much more draconian fashion. League points should be deducted. Clubs should face compulsory relegation or even expulsion from the league if they persistently fail to deal with problems when help is being offered to them to deal with such problems.
Fifthly, I should like to see courts giving more custodial sentences and community work orders on match days for offenders. The sort of thing that gets right up the nose of the average football supporter is having to weed someone's garden when an FA cup match is being played.

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Sixthly, increased policing inside the ground should not be a charge on the clubs. Many people are not aware that in London clubs must pay the Metropolitan police for their presence inside the ground. That should not be the case. The charge should fall on the public purse. Clubs could encourage many more of their supporters to act as voluntary stewards as a form of self-policing.
Seventhly, in London the Commissioner should set up on a trial basis football community policing teams. These would be specialised police teams which would travel regularly to away games to brief the local police force and attend the game with their supporters. If the Commissioner ever gets the scheme off the ground, he may wish to enrol me as a special constable, it seems to be a good job. That would assist the police greatly in maintaining effective policing inside the grounds. Those police teams would soon get to know the regular fans and, therefore, could identify those who were attending only to cause trouble.
In conclusion, if the Government genuinely wish to eliminate soccer violence and to help restore the image of this important international sport, they must show political will and financial commitment. The Government take a lot of revenue from the game. Pools promoters, television, and Fleet street all make big money from football. As a football supporter, I believe that the clubs have a right to expect much more of the wealth that their sport creates to come back into the game for the benefit of the much-abused and vilified football supporter.
2.43 pm
The Parliamentary Under-Secretary of State for the Environment (Mr. Neil Macfarlane): I am grateful for the constructive way in which the hon. Member for Newham, North-West (Mr. Banks) has approached this important subject. I am at one with him on many of the points that he raised. I only hope that, when Hansard is published, he will circularise his speech to as many of those who are responsible for running our great national games as possible. His comments were extremely helpful in the overall context of this national problem.
I confirm that I have read all the documents which the hon. Gentleman enumerated at the beginning of his speech. However, I am oblivious of his report, which I shall certainly read if he would kindly send my office a copy. I shall sit down and study it. There is much to be read on this important topic.
I can also confirm that since I started watching football in the early 1950s—as an Essex dweller, I began at Leyton Orient—I have visited about four fifths of all first and second division football grounds at some stage or another during the past 30 years.
As the hon. Gentleman rightly said, disorder at football matches is by no means a new or recent phenomenon. The problem has been with us for many decades and it affects many countries. It is interesting to note, for example, that Millwall's ground was first closed as a disciplinary measure in 1934, and suffered the same fate in 1947, 1950 and 1978. If he were here, the right hon. Member for Birmingham, Small Heath (Mr. Howell) would acknowledge that the problem was prevalent during his two terms as Minister with responsibility for sport. He will remember some of the more serious incidents that took place during that period. In 1975, in Paris, when Leeds was playing Bayern, and in 1977, when St. Etienne was playing Manchester United, thousands of pounds worth of damage was caused inside and outside the grounds, and many
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people required hospital treatment. Again in 1977, England fans in Luxembourg caused £15,000 worth of damage to the stadium and went on a rampage through the city. All this, unhappily, is familiar reading for us.
In their book, "Hooligans Abroad", the Leicester university researchers gave some vivid examples of crowd disorders abroad not involving British fans in support of the argument that football hooliganism is not purely a British disease. In Lima, in 1964, when, in a match between Peru and Argentina, the referee refused to allow a goal to the home side, a riot followed in which 318 people were killed and more than 500 were injured. In Turkey, in 1974, fans of two club sides fought with pistols, knives and broken bottles for days after the end of a match between the two teams. Before troops restored order, cars were burnt out, 600 spectators were injured and 44 were killed. We have seen more recent examples in South America. In Argentina, the national association had to implement a nine-day ban on prfessional football.
Of course, that the problem is not new does not mean that there is an excuse for inaction. It is worth highlighting what the Government have done so far. On law and order, we have strengthened the powers of magistrates through the Criminal Justice Act 1982. The courts can now require parents and guardians to pay fines, costs and compensation for offences committed by young persons and children. The Act has also given the courts greater flexibility in the sentencing of young offenders, providing a new sentence of youth custody and doing away with the limitations on custodial sentences on young offenders. The power to impose community service orders was amended to bring offenders aged 16 or over within the scope of the scheme. We have introduced new custodial measures to deal with young offenders convicted of violent crimes, and doubled the maximum fines available to magistrates. We have also considerably increased the number of attendance centres.
I established a liaison group involving all the concerned agencies and authorities, and four Government Departments, to prepare for the three home countries' participation in the World Cup finals in Spain in 1982. A s we were successful in eliminating incidents of hooliganism through close co-operation in all the regions of Spain, I extended the remit of the liaison group, led by the Football Association chairman, to co-ordinate policy and precautions for domestic and international matches. Officials from my Department serve on that liaison group, as do officials from the Home Office, the Department of Transport and the Foreign and Commonwealth Office.
We have ensured that embassies and consulates support the Football Association and clubs in planning matches abroad. Consular staff attend meetings with the Football Association's liaison officer, together with stadium authorities, clubs' staff and the local authorities to ensure, so far as possible, that the necessary security precautions are taken. We have, through the Football League, focused league clubs' attention on the need to take precautions, highlighting the segregation of opposing supporters and the importance of pre-match planning, especially if the clubs are known to have problems.
We have agreed with the liaison group a "blueprint" listing the precautions which should be taken for domestic matches. This was circulated to league clubs last August in time for the new season. It revised existing recommendations, and for the first time ensured that

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recommendations on segregation and the movement of crowds became mandatory under the Football Association's guidelines.
Following serious incidents of violence towards the end of the 1983–84 season, the Government established a working group of officials from the Departments concerned to review what further options were available to tackle the problem. The group's report was published last August as a consultation document. With ministerial colleagues and the Football Association I have since met 17 representative organisations to discuss the report and its recommendations. The organisations, together with many other bodies and individuals, have also submitted a mass of written evidence for our consideration. The report and the consultation on it formed the basis for our most recent considerations following the serious violence at Luton and Chelsea.
Although the recent violence has focused our attention on the domestic scene, the aspect of the problem which has perhaps troubled me most since my appointment in 1981 is the effect that violence by English supporters abroad has on the good name of this country. Clearly there is more than just national pride at stake. The hon. Gentleman touched upon this. There are more tangible economic casualties both in loss of exports and contracts for British companies to carry out work abroad, and particularly if any club is banned or invited to play behind closed doors by the governing body of European football, in which case there could be serious economic loss to the club.
To help tackle this problem, the Government, through the Council of Europe, promoted the recommendation on the' reduction of football violence. In my visits to many European footballing capitals and my discussions with Ministers over the past two years I have found that all accept that this is not purely an English problem.
The recommendation calls for joint action among European countries and sets out the precautions, based on the European Football Association's ground rules, to be taken by the clubs and the authorities.
I first called for the recommendation at the informal working party of sports Ministers in Paris in January 1983, following which a working group chaired by one of my officials was set up to draft these recommendations. I also attended the informal working party of sports Ministers meeting in Rotterdam later in 1983 at which the recommendation was discussed fully and agreed. The recommendation was adopted formally by the Committee of Foreign Ministers in March 1984.
The Government have since taken the lead in the implementation of the agreement. At their fourth conference, held in Malta in May 1984, the European Ministers responsible for sport passed a resolution which I proposed in which they undertook to do all in their power to ensure the full implementation of the recommendation and to draw it to the attention of their respective national football authorities and the European Football Association.
I have also written to my ministerial colleagues abroad in advance of matches involving English clubs pointing out the potential dangers and drawing their attention to the recommendation. On the whole, efforts since have met with co-operation and constructive responses. We shall continue to take the lead on the international front in efforts to build on what has been achieved so far.
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I have mentioned briefly the most recent developments following the serious violence at Luton and Chelsea. I was present on 1 April when my right hon. Friend the Prime Minister, together with other colleagues, met representatives from both the Football Association and the Football League to discuss soccer spectator violence. I have already informed the House that it became clear from that meeting that the football authorities shared the Government's commitment vigorously to combat violence at football matches.
They agreed to re-examine urgently the Football Association rules governing discipline and the responsibility of clubs with a view to changing and strengthening them. They agreed to accelerate the introduction of closed circuit television, especially at grounds where problem matches are played. They agreed to ensure that perimeter fencing was in place and effective in those grounds. They agreed to investigate a practical scheme of membership cards for Football League, Football Association and European and international matches, in discussion with the European Football Association as necessary, reporting back to me within six weeks. They agreed to consider the introduction of more restrictions on the issue of tickets for problem matches—which should be ticket only. Should there be more flexibility, such as Sunday morning kickoffs? I am convinced that such arrangements should be considered by all those clubs. They also agreed to encourage more and better family enclosures at League grounds. They agreed to deal severely with any bad example set to supporters by players' behaviour on the pitch. They agreed, in advance of the Government's proposed legislation, to take action under existing powers to deal with the problem of alcohol at matches.
The Government will give the strongest possible support to the football authorities, and we are prepared to take action in many ways. It is clear that the Football Association and the Football League are the governing bodies of football in this country. They have to run their own sport, as all sports are run through the 140 governing bodies which we support in one way or another. They are responsible for generating their rules and for setting standards of behaviour both on the pitch and elsewhere. They must put their house in order, but we shall do all we can to help. We shall ensure that we take action in the following ways. Legislation will be introduced in England and Wales to control the sale of alcohol at grounds and on transport to grounds along the lines that have been successful in Scotland. I pay tribute to the report of the late Frank McElhone in 1976 which has become the guiding light for legislation in Scotland and for us.
Under the Safety of Sports Grounds Act 1975 designation will be extended to clubs in divisions three and four of the Football League. Initially, it will be to grounds with a record of crowd violence. The guidelines and the green code will be reviewed.
The public order White Paper based on our conclusions following the review is to be published shortly, and our proposals for legislation in the autumn. Some new proposals will assist in preventing and controlling football hooliganism.
My right hon. and learned Friend the Home Secretary will be discussing with the police what improvement can be made to their effectiveness in dealing with football violence—in particular, in obtaining evidence to bring more serious charges where appropriate.

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My right hon. and learned Friend is encouraging magistrates to make full use of their powers, including detention and attendance centre sentences. I endorse what the hon. Gentleman said about the importance of young people, who have nothing to do with watching and enjoying football—our national sport—but who seek to disrupt games. I am convinced that it would be an effective deterrent if they were certain that they would be put away on a Saturday afternoon at an attendance centre when a match was on. Many other people would perceive it to be an effective deterrent.
We shall do all that we can to ensure that everyone understands the full range of legal sentencing available. We shall encourage bail conditions forbidding attendance at matches and we are drawing attention to the Court of Appeal guidelines on sentencing violent offenders.
Mr. Banks: Is the Minister prepared to recommend to his right hon. and learned Friend the Home Secretary some examination of the idea of specialised police teams to deal with the problem of soccer violence?
Mr. Macfarlane: I shall draw that important point to my right hon. and learned Friend's attention. It is something that he would have to consider, but it may well have a part to play.
I have not heard from the Opposition parties on our spectator violence report despite my suggestion that they might make comments and observations. I told the House some months ago that 17 organisations and authorities had provided evidence and opinions. I should welcome any contribution or commitment that the hon. Gentleman could give and I would convey it to my right hon. and learned Friend.
For matches abroad, we shall consult other Governments about giving better publicity to and perhaps strengthening last year's Council of Europe recommendation on football violence which I have already mentioned. We shall review how the diplomatic service can help in identifying troublemakers. We are considering arrangements for people convicted overseas to serve their sentences in this country. We shall seek to discourage travel agents from setting up special schemes for problem matches.
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The hon. Gentleman made several points that 1 shall cover in correspondence with him. Our football clubs could become the focal point of many communities They could develop and generate facilities. The Sports Council has helped in many cases. The urban aid programme and the derelict land grants scheme, in addition to normal local authority expenditure, have helped many football clubs to develop as the focal point for young people in the community.
When I consider the number of people who attended professional football matches in the 1950s compared with the present time, I believe that the time is long overdue for urgent action. The great weight of public opinion is behind everything that we do. We must approach the problem in many ways.
I pay tribute to the tremendous contribution made by the Football Trust, which is financed by the pools promoters and the spot-the-ball competition. It has provided the better part of £20 million for ground improvements, not just under the Safety of Sports Grounds Act 1975, but for all-weather pitches for youngsters, not just for the club members but for the people within the community. Football must now somehow compete with the ever-increasing demand of public attention and competition from alternative sports.
What we are seeking to do represents a substantial package of new measures from the Government to support the new tough line that the Football Association and Football League have agreed to take. We must take urgent action with a package of measures as we approach the close season.
Those people involved in professional football and those responsible for clubs must sit down and rigorously examine what they want to do to see how they can save our great national game domestically and internationally—
The Question having been proposed after half-past Two o'clock and the debate having continued for half an hour, MR. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.
Adjourned at four minutes past Three o'clock.

Preamble
The House met at half-past Two o'clock
The Clerk at the Table informed the House of the unavoidable absence, through illness, of MR. SPEAKER from this day's sitting.
Whereupon MR. HAROLD WALKER, THE CHAIRMAN OF WAYS AND MEANS, proceeded to the Table and, after Prayers, took the Chair, as DEPUTY SPEAKER, pursuant to the Standing Order.

PRIVATE BUSINESS
FELIXSTOWE DOCK AND RAILWAY BILL (By Order)
GREATER LONDON COUNCIL (GENERAL POWERS) BILL (By Order)
LINCOLN CITY COUNCIL BILL (By Order)
YORKSHIRE WATER AUTHORITY BILL (By Order)
Orders for Second Reading read.
To be read a Second time upon Thursday 25 April.

Oral Answers to Questions
  AGRICULTURE, FISHERIES AND FOOD

    Rosemaund Experimental Husbandry Farm
    Mr. John M. Taylorasked the Minister of Agriculture, Fisheries and Food if he has any plans to pay an official visit to the Rosemaund experimental husbandry farm in the west midlands.
    The Parliamentary Secretary to the Minister of Agriculture, Fisheries and Food (Mrs. Peggy Fenner): I have no plans at present to visit Rosemaund in the near future.
    Mr. Taylor: Is my hon. Friend happy with the advice being given to farmers by ADAS on conservation generally and on the management of broadleaved woodlands on farms in particular?
    Mrs. Fenner: Advice on forestry generally is a matter for the Forestry Commission. However, ADAS does give wide-ranging advice on conservation matters, including the management of woodlands, as part of the farm enterprise.

    Agricultural Prices
    Mr. Strangasked the Minister of Agriculture, Fisheries and Food what representations he has received about the 1985 agricultural price levels.
    Mr. Deakinsasked the Minister of Agriculture, Fisheries and Food what further consideration has been given by the European Economic Community Council to the Commission's agricultural price proposals.
    The Minister of Agriculture, Fisheries and Food (Mr. Michael Jopling): My Department has received representations about the Commission's price proposals from the farmers unions in the United Kingdom, representatives of the food manufacturing industry, food retailers and consumers. The Agriculture Council discussed the proposals at its meetings on 25 and 27 March and on 1 and 2 April and discussions are expected to resume at the next meeting of the Council starting on 22 April.
    Mr. Strang: Is the Minister aware that there is a desperate need to start to tackle the problem of high sale prices and the surpluses that they create, which is why both sides of the House supported the stand that he took in our debate on this issue? Will he give the House a cast-iron assurance that in no circumstances will he agree to a price-cut of anything less than the 3·6 per cent. put forward by the Commission?
    Mr. Jopling: I agree that it is very important that the right signals are given about cereals right across the Community. We must bear in mind that when we arrive at this year's harvest we could find 15 million or 16 million tonnes of grain still hanging over from the previous harvest.
    Mr. Deakins: What attitude will the Minister adopt in the Council if, as is likely, his colleagues from the other Common Market countries alter the Commission's price proposals to increase the total cost outside the scope of the financial guideline laid down by the Heads of Government and the Finance Council?
    Mr. Jopling: The hon. Gentleman will remember the discussions that we held on the general principles on 18 March when we expressed our opinions. He will know that if it seems likely at any stage of the negotiations that the costs of the proposals will go above the agreed ceilings, there is provision for a Joint Council with Finance Ministers at a future date to thrash out the financial problems.
    Mr. Maclean: Following the representations that my right hon. Friend has received, will he assure the House that he is strongly urging the European Commission on the abolition of the co-responsibility levy and also fighting to the utmost for the retention of the beef variable premium?
    Mr. Jopling: My hon. Friend will recall that in the debate, in which he took part, I made it clear, in regard to the beef variable premium, that it was my intention to fight for the continuation of that measure, and there was broad agreement among hon. Members on that. He will also recall the proposal of the Commission to reduce the co-responsibility levy from 3 to 2 per cent. I have been greatly heartened by the discussions; in particular, by hearing the French representative say for the first time that he believed that we should be thinking in terms of phasing out the co-responsibility levy for milk—a sentiment which I strongly support.
    Mr. Nicholson: In view of the protracted negotiations that are taking place in Brussels on the co-responsibility levy, will the right hon. Gentleman consider introducing an interim measure, to take effect from 1 April, to reduce the levy by 1·5 per cent.? That would at least provide some aid for the hard-pressed dairy farmers, who have suffered much in the last 12 months, and such a step would riot in any way affect the price of milk to the consumer.
    Mr. Jopling: The hon. Gentleman will be aware that because we were not able to reach agreement in the discussions the 1984–85 marketing year was extended to 28 April. Within that arrangement we already have a further 1 per cent. reduction in the milk quota. The Commission made it clear that there would be nothing to stop the backdating of the reduction of 1 per cent. in the co-responsibility levy to 1 April.
    Mr. Body: In considering the representations. will my right hon. Friend bear in mind that agricultural price levels have been declining and that farmers' real incomes have been maintained only by increasing output? Is he aware that if restraints on output are imposed many thousands of farmers will face a great dilemma, unless there is a reversal of policy at home?
    Mr. Jopling: I am naturally concerned about the impact of these measures on farm incomes. My hon. Friend will agree, however, bearing in mind the massive over-production and huge surpluses which overlay the Community market, that it is important to put our house in order now. Otherwise, it will be infintely more difficult to do so at a later stage.
    Mr. Maclennan: What proposals does the Minister have with respect to livestock producers' incomes in the light of the representations that he has received?
    Mr. Jopling: The hon. Gentleman was present when we debated that issue on 18 March. He will remember that I said—and I repeated it today—that it was important to maintain the beef variable premium scheme. He will also recall that part of the Commission's proposals was for a move to the second stage of the introduction of the carcase classification grid for beef. I made some remarks in the debate about sheepmeat and the importance of making sure that any alterations to the sheepmeat variable premium were compensated through the annual ewe premium, or the system would be discriminatory against the United Kingdom.
    Mr. Heathcoat-Amory: Does my right hon. Friend agree that the cereals sector has not experienced the same income reductions as have been suffered by the livestock sector? Does he further agree that a cut in the price of cereals would help the livestock sector, as well as benefiting the consumer and helping to curb surpluses? What minimum cut in grain prices is he insisting on during the current negotiations?
    Mr. Jopling: My hon. Friend will recall that in the debate on 18 March I made it clear that I did not believe that the proposed 3·6 per cent. cut in cereal prices made by the Commission was adequate and that the full cut of 5 per cent., stemming from the guarantee threshold, should be applied. I have therefore been telling the Council of Ministers that, for the reasons to which my hon. Friend rightly draws attention, a 5 per cent. cut would be the correct move to make.
    Mr. Skinner: When the Minister has stripped all the jargonese from his remarks, will he explain whether the Government, in accordance with their philosophy, believe that market forces will apply to farms and that uneconomic farms will close? Alternatively, does he believe in continually subsidising farms, as is happening this year to the tune of about £20,000 per farm?
    Mr. Jopling: I do not believe that the hon. Gentleman was present in the Chamber when we debated these matters on 18 March.
    Mr. Skinner: I was.
    Mr. Jopling: I am glad to hear that the hon. Gentleman was in his place. We do not usually forget his presence.
    In France, for example, there is expected to be a major reduction in the number of uneconomic dairy farms. That demonstrates that market forces are operating much more effectively within the CAP and that the level of support is being reduced. The hon. Gentleman will remember that at the Stuttgart summit there was general agreement in the Community that we could not continue to subsidise enormous surpluses of food.
    Mr. John: Will the right hon. Gentleman take into account the fact that, even if we achieve a full 5 per cent. cut in cereal prices, there is still a danger that the rake's progress of increased cereal production will continue?
    Mr. Jopling: No one can tell, but the hon. Gentleman must remember that last year there was what amounted to a reduction in cereal prices. If we were to have another reduction, many of those who are growing what amount to surplus cereals on land which traditionally has not been used for that purpose will have to consider whether it is wise to continue to produce cereals.

    Surplus Grain
    4. Mr. Wareingasked the Minister of Agriculture, Fisheries and Food what new methods of disposal of surplus European Economic Community grain have recently been considered: and if he will make a statement.
    The Minister of State, Ministry of Agriculture, Fisheries and Food (Mr. John MacGregor): There is currently some discussion about finding new outlets for Community cereals, and the issue has been raised in this year's price fixing discussions. We would look positively at proposals into the development of any such outlets if they seemed likely to be economically viable. It remains to be seen whether this will be the case.
    Mr. Wareing: Is the Minister aware that certain elements in the EEC have made the appalling proposal that surplus food should be converted into plastic material? Surely that is an appalling proposition at a time when millions of people in sub-Saharan Africa are in need. Will the Minister give an undertaking that the British Government will not support the proposal and will seek positive ways in which the surplus can be used to feed people, which is the purpose for which it was grown originally?
    Mr. MacGregor: The hon. Gentleman will be aware that we are spending considerable sums in disposing of quite a large part of the cereal surplus as emergency food aid to the African drought countries. We intend to deliver 1·2 million tonnes from last year's harvest. However, there is still a surplus, and that is why other suggestions are being made. I have not heard the suggestion to which the hon. Gentleman referred, but there is no sense in spending vast sums to find alternative outlets. We must ensure that any such outlets are economically viable.
    Mr. John: As opposed to what has been allocated by the EEC, how much of the surplus grain has been delivered to Ethiopia and the Sudan?
    Mr. MacGregor: I do not have the exact figures immediately to hand. If the hon. Gentleman tables a question seeking that information, I shall answer it.

    Privatisation
    Mr. Thurnhamasked the Minister of Agriculture, Fisheries and Food what are the estimated savings by his Department for 1984–85 as a result of privatisation schemes.
    Mr. Jopling: No functions of my Department were privatised during 1984–85. However, new savings as a result of further contracting out of services are estimated at over £200,000 in a full year.
    Mr. Thurnham: Will my right hon. Friend ensure that small firms are given sufficient opportunities to tender for these services?
    Mr.Jopling: Yes. My hon. Friend may like to know that tenders are open to all-comers and that contracts have been placed with firms for cleaning, security guarding, press cutting, laundry, maintenance and a number of other services, including data preparation and graphic production.
    Mr. Home Robertson: As there has been speculation about privatisation in other areas, will the Minister acknowledge that the agri-chemical and fertiliser industries would have a vested interest in becoming involved in any privatised advisory or research services and that, with the best will in the world, they would be unlikely to give advice which would reduce the sales of their own products? Therefore, does he accept the overwhelming environmental case in the public interest for retaining independent advisory and research services under the auspices of his Department?
    Mr. Jopling: I have no plans for the privatisation of the functions of ADAS. I have accepted in principle that it is appropriate for those who benefit from the services of ADAS to contribute to the costs, and I am pursuing the practical implications of that. The hon. Gentleman makes a mistake if he thinks that farmers are gullible. They always look to see where the advice comes from before deciding what assessment to make of it.

    Agricultural Prices
    Mr. Torneyasked the Minister for Agriculture, Fisheries and Food what consideration he is giving to the interests of consumers and taxpayers in the farm price review negotiations; and if he will make a statement.
    Mr. Jopling: I have regard to all United Kingdom interests, including those of consumers and taxpayers, in the negotiations on CAP prices.
    Mr. Torney: Is not the best way to dispose of Common Market and our own surpluses to lower their prices and make it possible for people to purchase them? Furthermore, with the accession of Spain and Portugal to the Common Market, will the right hon. Gentleman take steps to protect our taxpayers' interests, because enormous sums of money will be needed to bring the Spanish and Portuguese agriculture and fishing industries into line wih EC regulations? Will he make sure that we do not pay more than our fair whack?
    Mr. Jopling: With respect to the hon. Gentleman, the accession of Spain and Portugal is rather wider than his
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    question. The Government have consistently pressed for a more realistic pricing policy under the CAP. The right hon. Gentleman will remember that CAP prices were reduced in 1984 for the first time and that within the past six years consumers have had an infinitely better deal than they had under the Labour Government, when, in five years, food prices rose by 117 per cent.

    Cereal Production
    Mr. Home Robertsonasked the Minister of Agriculture, Fisheries and Food if he will list the alternative means of restricting cereal production which are under consideration in his Department.
    Mr. MacGregor: Decisions in that area are matters for the Community, but I accept the need to bring the cereals sector into a better balance. Restricting production directly could be one way of doing that. Others include developing new outlets, finding new ways of financing existing policies, or encouraging the greater operation of market forces through a restrictive price policy or by reducing the impact and coverage of support measures. I remain convinced that a sustained policy of price restraint is the best way of improving the balance of the cereals market.
    Mr. Home Robertson: Earlier it was said that there was likely to be a 16 million tonne carry-over of cereal surpluses into next year. Does the Minister accept that a marginal price cut, be it 3·6 or 5 per cent., will lead to pressure to increase production? Does he further accept that the draconian price cuts necessary to have the effect of suppressing production would have a devastating effect on smaller producers? Will he now take our advice and consult about contingency plans for cereal quotas, or has he learnt nothing from the shambles of the hastily introduced milk quotas?
    Mr. MacGregor: The hon. Gentleman underestimates the effect that a sustained policy of price restraint could have. We have obviously been engaged in contingency planning. Our analysis of the alternatives and awareness of the difficulties and disadvantages involved in them leads us to the view that price restraint is by far the best answer, if it can be achieved.
    Mr. Harris: Will my hon. Friend ensure that those contingency plans are ready to be implemented quickly, because our experience over milk quotas tends to suggest that when the Council of Ministers makes a final decision we shall not want to be caught on the hop again?
    Mr. MacGregor: It is important to recognise that in the current price-fixing negotiations the proposal on the table is for price restraint. That is what we are discussing. The position is rather different from that of milk last year. Therefore, it is important to try to obtain a realistic answer along those lines in the negotiations.

    Common Agricultural Policy
    Mr. Kirkwoodasked the Minister of Agriculture, Fisheries and Food whether Her Majesty's Government are prepared to co-operate with the European Economic Community Commission to produce a rationalisation of the common agricultural policy.
    Mr. Jopling: I am willing to co-operate with all concerned to ensure that the process of putting the CAP on to a more rational basis is continued.
    Mr. Kirkwood: Does the Minister accept that if the rationalisation plans inevitably lead to reduced financial expenditure, especially in rural upland areas, the Government must have contingency plans to ensure that we do not return to the bad old days in the early 1960s of rural depopulation and unemployment?
    Mr. Jopling: Certainly the Community is extremely worried about those matters. I have no doubt that within the areas which the Commission has identified such matters will be of concern. In particular, one of the groups proposed by the Commission is to study agriculture in society—that is, the position of agriculture in the rural economy.
    Mr. Latham: Regarding rationalisation, does my right hon. Friend appreciate that those of his hon. Friends who heard both Lord Peart and the right hon. Member for Lewisham, Deptford (Mr. Silkin) separately introduce expansionist White Papers when they were Ministers of Agriculture, Fisheries and Food are looking to him soon to produce a general strategy document for agriculture in the light of the new restrictionist policy?
    Mr. Jopling: At present, when so many uncertainties and matters are in the process of coming to fruition, it would not be appropriate to produce a White Paper of that sort. However, I do not rule that out. I have an open mind about it for the future.
    Mr. Maclennan: What induced the Minister to stand on its head the expansionist policy of his predecessor?
    Mr. Jopling: The answer is simple. In June 1983, within a few weeks of the general election, the European Council meeting in Stuttgart at last decided that the CAP should be brought back to reality and rationality. As a result of those sensible decisions, which should have been taken years earlier—if British advice had been followed they would have been taken years earlier—we have been able to return the CAP to a degree of realism.
    Sir John Wells: Is my right hon. Friend aware that the British hops industry, which was strong for 60 years until two years ago, is currently in a state of great anxiety? Will he take steps to ensure that there is a greater degree of rationalisation throughout the European Community regarding hops? Will he pay a further visit to hop growers, as opposed to the Hops Marketing Board, this year?
    Mr. Jopling: My hon. Friend may recall that last September, besides visiting the headquarters of the Hops Marketing Board, I visited hops farms and saw the harvesting and processing of hops. I am aware of the current position, which gives rise to many difficulties. As my hon. Friend knows, we have a problem of over-supply at present. I shall most certainly keep my eye on the matter.

    Livestock Farming (Financial Resources)
    Sir Hector Monroasked the Minister of Agriculture, Fisheries and Food what shift in financial resources he has been able to make from cereals to livestock for the year 1985–86.
    Mr. MacGregor: Discussions are currently taking place on the Commission's proposals for the 1985–86 price fixing, which would reduce the CAP support price for
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    cereals, leave unchanged the price of beef and pigmeat and make modest increases in the price support for milk and for sheepmeat from January 1986.
    As my hon. Friend knows, we are committed to trying to achieve a better balance of support between the arable and livestock sectors, and we have indicated that we feel the Commission's proposals do not go far enough in reducing the price support for cereals.
    Sir Hector Monro: Does my hon. Friend agree that much more needs to be done if lifestock farmers are to receive the same financial opportunities as cereal farmers? Can we expect an accelerating trend towards livestock farming in the coming year?
    Mr. MacGregor: My hon. Friend will know that in view of the market position, for example, in beef, the Community beef management committee recently agreed to augment the existing programme of hindquarter intervention with a short period of private storage aids. I hope that that will help. I believe that our endeavours to retain the beef premium scheme—at present it costs £2 million to £3 million a week to help producers—will undoubtedly help. We are trying to restore the balance in all those directions. However, I also believe that the recent reduction in the breeding herd will help to restore the balance and will help livestock producers in the long run.

    European Community (Portugal)
    Mr. Proctorasked the Minister of Agriculture, Fisheries and Food what representations he has received from the National Farmers Union regarding the effect of Portugal's accession to the European Economic Community on British agriculture; and if he will make a statement.
    Mr. Jopling: I am not aware of any aspect of the terms for Portugese accession which is of substantial concern to the National Farmers Union.
    Mr. Proctor: What of the problems of the soft fruit farmers of the south of England?
    Mr. Jopling: The arrangements that we have made regarding the cost of Portuguese accession to the Community budget, in view of the major uncertainties about developments between now and the end of the 10-year transitional period, should mean that the National Farmers Union need not have immediate and serious concern on this matter.
    Mr. Forth: Is my right hon. Friend not worried about the potential effect on the balance of voting in the Council of Ministers of the EC when Portugal and Spain come in and add their weight to the votes of Greece, Italy and France to swing the emphasis of CAP money to southern products, to the detriment of our farming interests?
    Mr. Jopling: My hon. Friend should consider the terms of the accession agreement, which awaits ratification and signature. With the transitional period that has been negotiated, I believe that British growers need not have serious worries.
    Mr. Bill Walker: Does my right hon. Friend agree that one reason for supporting agriculture in the United Kingdom, especially in mountain areas, is the fact that, for strategic reasons, we have learnt that we must keep livestock there, and that this could be affected substantially by the enlargement of the Community?
    Mr. Jopling: Regardless of the fact that it is proposed that Spain and Portugal should join the Community, it is unlikely that our support for the upland areas will be eroded.

    Milk Quotas
    Mr. Penhaligonasked the Minister of Agriculture, Fisheries and Food when he expects producers to be told of their positions as far as final milk production is concerned for the year 1985–86.
    Mr. MacGregor: The Milk Marketing Board for England and Wales will be notifying producers of their 1985–86 quotas within the next few weeks.
    Mr. Penhaligon: Obviously, that is an improvement on last year. Can the Minister say that the Government have finally decided not to pay farmers the full quota allocated to them through the claims made at the tribunals? Is that decision final, or will the Government rethink their position and inform the farmers at a later date that their quotas have been increased by extending the outgoers scheme so that the extra quota allocated can be paid in full?
    Mr. MacGregor: I think that the hon. Gentleman has in mind farmers with development claims who are looking for secondary quota from the tribunals. As he knows, that comes out of the reserve that we held back from primary quotas. Since the tribunals awarded the amount that they did, it is necessary this year to cut the awards by about 35 per cent. We do not yet know what the final position will be for next year, but I do not expect it to be much different. As to the outgoers scheme, the hon. Gentleman will know that, as milk producers become accustomed to quotas, they are more anxious to stay in milk production. Therefore, there is still some capacity left in the outgoers scheme.
    Mr. Ashdown: Does the Minister realise that the rough justice handed out in some cases by the quota tribunals, on their admission, as a result of the rules which they have had to operate, has meant much hardship for many farmers? Will he now confirm publicly what I understand he said privately: that he will sift through those cases to ensure that something can be done to assist such producers?
    Mr. MacGregor: The tribunal process is a judicial one, and we made it clear from the outset that it would not be possible for us to intervene or interfere in the decisions about individual producers. That remains the case, but we knew from the outset that some difficult cases could not be covered by the regulations. We have made it clear that we are reviewing those cases, but without commitment, because it depends on having additional quota available to give to those whom we think deserve it.
    Mr. Ralph Howell: Is my hon. Friend aware that a great many farmers believe that those countries in the EC which have no proper milk register are unable to operate a proper quota system? Will he tell the House which countries of the EEC have a proper overall milk register for quota system milk?
    Mr. MacGregor: We made it very clear in the Council from the outset that the new system that has been introduced in the Community must be applied fairly and equally by all member states. We continue to insist on that, and that is why we took the decision that we did earlier
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    about the payment of super levy. On the particular question my hon. Friend asked,I am endeavouring to get precise information on registers, but there is evidence that the vast majority of member states are now applying the quota system. It is quite significant that more than 20,000 dairy producers in France, for example, have come out of dairying in the past year.
    Mr. Home Robertson: Will the Minister take this opportunity to accept the specific recommendation m the report of the Select Committee on Agriculture that Government compensation should be given to farm workers who lose their jobs as a consequence of these quota schemes? Can he give us any reason why this second search which is now taking place for outgoers to release quota for needy cases should be any more successful than the first one?
    Mr. MacGregor: We shall obviously give our considered reply to the Select Committee's report, but, as we have made clear frequently in the House, the outgoers scheme is not a redundancy payments scheme and was never designed to be so. There are statutory redundancy payment arrangements, as the hon. Gentleman knows. On the hon. Gentleman's second point, it is important to recognise that we set ourselves, as the objective of the outgoers scheme, the yielding of enough quota to enable us to help all cases of exceptional hardship and all small milk producers to get back to 1983 production levels. I believe that the rate of progress we are making brings us very close to achieving that

    Beef Production
    Mr. Cohn Shepherdasked the Minister of Agriculture, Fisheries and Food if he is satisfied with the prospects for the beef sector of the agriculture industry.
    Mr. MacGregor: There is at present a surplus of beef in the Community, partly due to the increased cow cullings following the introduction of milk quotas, and producers' returns are accordingly relatively low in relation to the Community's guide prices. In view of the market situation, the Community beef management committee recently agreed to augment the existing programme of hindquarter intervention with a short period of private storage aids. The need is to achieve a better balance between supply and demand in the Community.
    Mr. Shepherd: I am grateful to my hon. Friend for that reply. Does he agree that the longer-term beef production cycle means that there has also to be commensurate longer-term confidence in the United Kingdom beef producing sector? Is he aware that his and his right hon. Friend's robust defence of the scheme is welcome, in that it does lead and will lead to the consumption of beef? Can he seek to sustain it on a longer-term basis instead of a year-by-year negotiation basis?
    Mr. MacGregor: I entirely agree with my hon. Friend about the scheme, and if we had been able to achieve that we would obviously have gone for it. Unfortunately, we were not responsible for the arrangement, which meant that it was on a one-yearly basis. My hon. Friend is right in the point that he makes about consumption. We estimate that if we had not had the beef variable premium scheme last year beef consumption would have been 8 per cent.

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    or more lower than was the case. That would have led to considerable increases in intervention, which, of course, also creates considerable problems of physical storage.
    Mr. Jim Spicer: Does my hon. Friend agree that, against the background of the figures which he has just given, the view of the Commission is so irrational as to border on the lunatic? Did he by any chance hear the representative of the Commission on the farming programme this morning declaring in no uncertain terms that it was going to see the end of the variable beef premium? Is that not absolute nonsense?
    Mr. MacGregor: We have made it very clear, as my hon. Friend knows, that we shall use every endeavour to retain that scheme this year. One of the arguments is that we estimate that without the premium 75,000 to 80,000 tonnes of beef would have had to go into intervention last year to keep producer prices at roughly the same levels. It seems to me that, with the problems of physical storage, it is very much better to have the beef going on to consumers' plates than into intervention.
    Mr. Cockeram: Does my hon. Friend accept that small, family-run farms are the backbone of the livestock industry, including the beef industry, and that in recent years the agricultural price reviews have tilted matters in favour of the large producer? This year, is it not time that the balance was tilted in favour of the small, family-run farm?
    Mr. MacGregor: I think that it is clear from the debate that we had on the price review proposals, and from the Government's response, that we agree that it is important to get a better balance between cereals and livestock. That is our endeavour in negotiations.
    Mr. Skinner: Is the Minister aware that we have reached Question 17, and that every Tory Member who has asked a question has called for more Government intervention, more subsidies of one kind or another—
    Sir John Wells: On a point of order, Mr. Deputy Speaker, I did not.
    Mr. Skinner: I have not finished yet. We have caught Tory Members at it. Every one of them wants more subsidies. Why does the Minister not—
    Mr. Deputy Speaker: Order. We are talking about beef. Perhaps the Minister will try to reply to the question as far as it has gone.
    Mr. Skinner: Where is the beef? Will the—
    Mr. Deputy Speaker: Order. I have called the Minister to answer as far as the hon. Gentleman has gone.
    Mr. Skinner: Will the Minister convey to his colleagues that if the Cabinet is prepared to intervene in the farming industry on a massive scale, to appease all these Tory Members—
    Mr. Deputy Speaker: Order. I have reminded the hon. Gentleman that the question is about beef. So far he has not referred to beef. Perhaps the Minister will now reply.
    Mr. MacGregor: Not for the first time, the hon. Gentleman has not been listening, either to what my hon. Friends have been asking or to what Ministers have been saying in reply.
    Mr. Skinner: They have been calling for more money.
    Mr. MacGregor: Perhaps the hon. Gentleman just does not understand.

    Conservation Projects
    Mr. Chapmanasked the Minister of Agriculture, Fisheries and Food if he will make a statement on the use of funds under the common agricultural policy for conservation projects.
    Mr. Jopling: As I told the House on 13 March, the Commission has agreed to bring forward during 1985 proposals for a Community-funded scheme based on the new provision for grants to environmentally sensitive areas. This represents a very successful outcome to the initiative which I put forward last year. FEOGA funding is already available for conservation work undertaken as part of an agricultural improvement.
    Mr. Chapman: I welcome the personal initiative of my right hon. Friend in this matter. What is the value of the funds, and what proportion of the total do they represent? For the benefit of the hon. Member for Bolsover (Mr. Skinner) I assure him that I am talking about the switching of funds and not about the increasing of funds.
    Mr. Jopling: I am sorry to disappoint my hon. Friend, but it is not possible to isolate a figure to show how much FEOGA spends on the conservation element of agricultural improvements. It is too early to assess the cost of our new initiative. We shall be seeking primary legislation as soon as possible.
    Mr. Campbell-Savours: Now that the Government have effectively banned the use of the pesticide dieldrin, why do they not use some of the European money for conservation purposes to ensure that that dieldrin that still remains in the supply chain within the United Kingdom is not used? Why do they not purchase it, take it off the market and protect the environment in so doing?
    Mr. Jopling: That is rather wide of the question, but the hon. Gentleman will well know—I know that he is a member of the Standing Committee that is dealing with these matters—that the Government are taking positive steps to reduce any risks from the use of pesticides.
    Mr. Mark Hughes: Can the Minister give us an assurance that there will be no reduction in United Kingdom funded aid for conservation when we get the money from the Community, so that we avoid the dreaded additionality problem?
    Mr. Jopling: The hon. Gentleman should recall that the initiative agreed during March by the Council of Ministers is, at this stage, a nationally funded scheme. We hope that, at a later stage, we can persuade the Community to embrace the scheme as one funded by Community money. We have in progress an investigation of that possibility.
    Mr. Adley: Will my right hon. Friend give the House an assurance that it is his policy, wherever possible, to conserve land for agricultural use? In view of the arguments that we hear in the House from time to time about north versus south, does he agree that it would be helpful if he and his ministerial colleagues would take on board the point that so long as we allow farming land to be eaten up for development in areas such as Dorset, we

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    are doing everything that we should not be doing if we wish to encourage growth in the less-favoured parts of the country?
    Mr. Jopling: My hon. Friend will know that a great deal of the effort of my Ministry goes in giving advice about the quality of the land that is concerned in development. He will know that over the years the Government have had a policy of trying to prevent the very best land being taken by development.

    Agricultural Prices
    Mr. Lathamasked the Minister of Agriculture, Fisheries and Food what is the lates position regarding the Common Market price fixing negotiations; and whether he will make a statement.
    Mr.Jopling: I refer my hon. Friend to the reply I gave to the hon. Member for Edinburgh, East (Mr. Strang) and the hon. Member for Walthamstow (Mr. Deakins) earlier today.
    Mr. Latham: Now that we have a regime of milk quotas, has not the milk co-responsibility levy lost all meaning? Surely my right hon. Friend ought to start negotiations in the Common Market to try to get rid of it?
    Mr. Jopling: I agree very much with what my hon. Friend says. He will know that the Commission has proposed to adjust from 3 to 2 per cent. the milk co-responsibility levy. I have said consistently that if one is to try to help dairy farmers I would much rather it were done through reducing the co-responsibiliy levy than by increasing the price.

  PRIME MINISTER

    Engagements
    Mr. Brintonasked the Prime Minister if she will list her official engagements for Thursday 18 April.
    The Prime Minister (Mrs. Margaret Thatcher): This morning I presided at a meeting of the Cabinet and had meetings with ministerial colleagues and others. In addition to my duties in this House I shall be having further meetings later today. This evening I hope to attend a banquet given by President Banda.
    Mr. Brinton: In thanking my right hon. Friend for that reply, may I ask her if she has yet had time to study the people in work figures published yesterday, which show that there were 340,000 more people in work last year? Will she also confirm that, at 65 per cent., the proportion of people in work in this country is among the highest in the major industrial nations and well above the European average?
    The Prime Minister: I am grateful to my hon. Friend for raising the subject of the increasing number of people who found jobs in 1984. If one takes the period since March 1983, one sees that some 613,000 more jobs have been created. Had we said in March 1983 that it was our policy to create 600,000 more jobs by March 1985 we would not have been believed. In fact, they have been created. As my hon. Friend has said, the proportion of the population of working age in work is higher in this country than in West Germany, France or Italy, and equal to that in the United States.
    Mr. Hattersley: Does the Prime Minister know that while she was away 39 shire counties were told that they were to receive less rate support grant than they had been promised? Does she know that the reduction in that rate support grant is the direct result of the Greater London council levying a lower rate than the Government anticipated? How does she justify penalising Kent, Lancashire and Essex because the GLC has not raised its rate as much as the Government anticipated?
    The Prime Minister: As the right hon. Gentleman knows, it is customary to give an expected rate support grant and later to correct it. In this case it was corrected because the GLC decided to agree with my right hon. Friend the Secretary of State for the Environment. In fact, in spite of all its posturings it set a rate below the limit that he had specified.
    Mr. Hattersley: That may be customary under the new system, but it is clearly absurd. I ask the Prime Minister again to explain why Lancashire should be penalised because the GLC set a lower rate than the Government anticipated. Does it not demonstrate that the present system of rate support grant is preposterous and should be abolished, and that the Secretary of State for the Environment should go with it?
    The Prime Minister: No, Sir. The GLC has bent towards my right hon. Friend the Secretary of State for the Environment. As the right hon. Gentleman knows, the system used in this respect, the corrective system, was also used previously.
    Mr. Hattersley rose——
    Hon. Members: No.
    Mr. Hattersley: As always, the Prime Minister has scored high marks for irrelevant stridency. But I ask again how she justifies Lancashire being penalised because the GLC has raised a lower rate than she anticipated.
    The Prime Minister: Because that is the system that has applied not only under this Government but under previous Governments as well. There is —[Interruption.] It does no earthly good to get excited and hysterical about it. That is the fact. The right hon. Gentleman may not like it, but it is a fact.
    Sir Hector Monro: Has my right hon. Friend had a chance to try to understand the shadow Cabinet's shambles of a policy on mortgage relief? Can she confirm that mortgage relief is safe under the Conservatives?
    The Prime Minister: I note that it is now Labour policy to abolish tax relief on mortgages. It is Conservative policy to keep tax relief on mortgages, and will continue to be.
    Dr. Owen: Has the Prime Minister seen the forecast, given by her former adviser, Sir John Hoskyns, of 10,000 job losses as a result of the national insurance changes in the Budget? Will she consider a reduction in the overall rate of the employers' contribution to offset the welcome effect of the restructuring at the lower end of national insurance?
    The Prime Minister: No, Sir. The restructuring of employers' national insurance contributions, taken across the board, was slightly

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    favourable towards employers. As the right hon. Gentleman will recall, if he looks at the figures in the Red Book, the restructuring was slightly favourable overall towards employers because they received more relief at the lower end than imposition at the higher end. Of course, it will vary from employer to employer.
    Mr. Tom Coxasked the Prime Minister if she will list her official engagements for Thursday 18 April.
    The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.
    Mr. Cox: Is the Prime Minister aware that today's statement that the Government are to get their act together in the inner city areas will be met with utter disbelief by those who live in them? Is she unaware of what her policies have meant for the inner cities? There is massive unemployment, inadequate housing and the people there have had to mount a continuous campaign to try to keep their hospitals and local social services. If she is unaware of the result of her policies, why does she not go to those inner city areas and meet not the local Tory party officials but those who live there? Why does she not do that? No amount of dressing up Tory policies will solve our problems unless the money is provided to do that.
    The Prime Minister: A statement has been put out and task forces are to be set up in certain specific city areas. No matter what the hon. Gentleman says about hospitals and the Health Service, it remains a fact that after inflation has been taken into account 20 per cent. more has been spent on the NHS under this Government——
    Mr. Cox: Rubbish.
    The Prime Minister: That is a fact. If the hon. Gentleman wishes to challenge it, perhaps he should table a question. He will find that the answer to it is exactly the same as mine today.
    Mr. Cox: Come to my constituency and see.
    The Prime Minister: This Government have a far better record on the Health Service than the Labour Government ever had, and a far better record on building hospitals and on providing doctors and nurses than the Labour Government had. That is true, despite the hon. Gentleman's shouting and hysteria, which we have come to expect from him.
    Viscount Cranborne: My right hon. Friend will no doubt be aware that the investigations into the social security system are viewed with considerable interest and that their results are also awaited with some interest. Will she give an undertaking that, when the results are considered, she and the Government will bear in mind the interaction between the social security and taxation systems, and that any reforms will be wide enough to consider including a basic income guarantee scheme, or a negative income tax scheme, or a variation thereof?
    Mr. Deputy Speaker: Order. Questions are becoming far too long.
    The Prime Minister: As my hon. Friend is aware, the results of the social security reviews are expected to be out within about two months. I think that it is better to wait until they come out before we make further comment. With regard to my hon. Friend's specific question about the interaction between social security and taxation, it was with that in mind that my right hon. Friend the Chancellor of the Exchequer reduced the employees' national insurance contributions at the lower end of the income scale.
    Mr. Coleman: Now that the Prime Minister has returned from places where democracy and working people are not of much account, will she turn her attention to visiting places in this country —for instance, the Llandarcy refinery where 750 people who are shareholders of British Petroleum have been told that they are to lose their jobs? Will she, as the trustee of the nation's shareholding in BP, tell BP that this sacking must not take place, especially as it has been suggested that it would break European Community rules?
    The Prime Minister: As the hon. Gentleman is very much aware, there is a surplus of refinery capacity over the world as a whole, as well as in this country. Nothing that either of us says can avoid that fact. I am afraid, therefore, that it is likely that corrective action will have to be taken.
    Mr. Simon Hughesasked the Prime Minister if she will list her official engagements for 18 April.
    The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.
    Mr. Hughes: Will the Prime Minister accept that the reason her support is crumbling is not least because everybody, apparently—except the Cabinet—sees the country crumbling all around her? The setting up this morning of city action teams to co-ordinate con tricks, without one penny of extra money going to the inner city areas, conceals a real cut in money for inner city areas of £150 million in the next three years and displays nothing but a complacent and callous attitude.
    The Prime Minister: The hon. Gentleman will be aware that when the Chancellor of the Exchequer announced his Budget he mentioned that public expenditure was increasing, unfortunately, despite everything that we have done. If the hon. Gentleman wants more money to be spent on the particular project he specified, can he say from whom he would take it away?
    Mr. Yeo: Is my right hon. Friend aware that the abolition of domestic rates would be one of the most popular steps that this Government could take and that her proposals to this effect are eagerly awaited in South Suffolk and by ratepayers all over the country?
    The Prime Minister: It will be some time before the detailed results of rating reform come out. When they do, they will be published for consultation and discussion in the House. I hope that they will be out in time for legislation before the next general election.
    Mr. Michie: Will the Prime Minister find time today to consider whether she is serious about imprisoning, surcharging or making bankrupt local councillors whose only crime is that they carried out their mandate and the wishes of the local electorate?
    The Prime Minister: Local councillors are subject to the law of the land, as is everybody else, and I hope that they will duly carry it out.
    Mr. Baldry: Does my right hon. Friend agree that we need to use both blades of the scissors to cut unemployment? Is not any suggestion that a return to an all-party, simplistic, Keynesian solution would cut unemployment just as fraudulent as any suggestion that one might just leave it all to the market place?
    The Prime Minister: There is no simplistic solution to unemployment. If there were, it would not be found all

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    over Europe. The solution lies in the creation of genuine jobs. I repeat that 613,000 more jobs have come into existence since March 1983, that the United Kingdom is the only major European country in which employment is currently increasing and that the proportion of the population of working age in work is higher in the United Kingdom than it is in West Germany, France and Italy.
    Mr. Campbell-Savoursasked the Prime Minister if she will list her official engagements for Thursday 18 April.
    The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago and I thank him for giving me notice of the supplementary question that he wishes to ask.
    Mr. Campbell-Savours: Is the Prime Minister aware of the great sense of outrage in the north-west of England at the decision of Scottish and Newcastle Breweries to launch a bid for Matthew Brown pubs and breweries in the north-west of England? Is she aware that Scottish and Newcastle has repeatedly refused to give undertakings
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    about the future of jobs in the breweries in Blackburn, Carlisle and Workington or about the future of the low barrelage pubs? Will the Prime Minister now intervene personally and ask the Secretary of State for Trade and Industry to put the matter to the Monopolies and Merger Commission, because we object to the proposed merger, and it is for the Secretary of State to use his powers to obstruct it?
    The Prime Minister: That was indeed the subject of which I was given notice, although the terms in which the question was asked were a little different. As the hon. Gentleman knows, this is not a matter for Cabinet decision. It is for my right hon. Friend the Secretary of State for Trade and Industry—in the light of the advice of the Director General of Fair Trading, who I understand the hon. Gentleman has met—to decide whether the proposed merger or takeover should be referred to the Monopolies and Mergers Commission. My right hon. Friend will take into account all representations, including those of the hon. Gentleman, and the decision will be made as soon as practicable.

Business of the House
3.30 pm
Mr. Roy Hattersley: Will the Leader of the House state the business for next week?
The Lord Privy Seal and Leader of the House of Commons (Mr. John Biffen): Yes, Sir. The business for next week will be as follows:
MONDAY 22 APRIL—Opposition Day (10th Allotted Day). There will be a debate on an Opposition motion entitled "The Dismantling of the Welfare State."
TUESDAY 23 APRIL—Opposition Day (3rd Allotted Day) (Second Part). Until seven o'clock there will be a debate on trade union ballots, on a motion in the names of the Liberal party and the Social Democratic party.
Second Reading of the Ports (Finance)Bill.
Motions on the Foreign Limitation Periods (Northern Ireland) Order and on the Water and Sewerage Services (Amendment) (Northern Ireland) Order.
WEDNESDAY 24 APRIL—There will be a debate on the White Paper on Financial Services in the United Kingdom, Cmnd. No. 9432, which will arise on a motion for the Adjournment of the House.
Remaining stages of the Insurance (Fees) Bill.
THURSDAY 25 APRIL—A debate on Foreign Affairs which will arise on a motion for the Adjournment of the House.
FRIDAY 26 APRIL—Private Members' Bills.
MONDAY 29 APRIL—Second Reading of the Finance Bill.
Mr. Hattersley: First, I welcome next Thursday's foreign affairs debate. I hope that the Leader of the House will agree to extend that debate beyond the usual time so that as many Members as possible can take part.
Secondly, the right hon. Gentleman will recall that it is now more than a year since a debate was first promised on the Government's Green Paper on the long-term prospects for public expenditure. I know that this is an increasingly embarrassing topic for the Government, but will they now fulfil that promise?
Finally, may we have a statement next week from the Paymaster General as to what his duties are? He said on the radio this morning that the Government had not prevented this year's GLC's elections from taking place. The House should have the opportunity to examine that statement—a statement which I fear cannot be adequately described within the rules of parliamentary language.
Mr. Biffen: I shall consider the right hon. Gentleman's point about the Paymaster General and convey to him the anxiety that he should make a statement in the House.
As for the request for a debate on long-term public expenditure, this is clearly a matter of great interest to the House and it is the subject of an investigation being undertaken by the Treasury and Civil Service Select Committee. It might be a courtesy to the Select Committee for the House to be in possession of its findings before such a debate, but I shall of course consider the matter further.
I welcome the importance that the right hon. Gentleman attaches to Thursday's debate on foreign affairs. I very much agree with him and think that there would be merit in extending the debate until midnight.
Mr. Rob Hayward(Kingswood): Will my right hon. Friend enable the House to debate rate increases some time
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next week or the week after as they have increased by 58 per cent. under Labour in Avon as opposed to 27 per cent. under the Tories in Somerset? Should we not give the Labour party an opportunity to explain the increase in Avon, as the Leader of the Opposition is unlikely to take it when the press put that question to him when he visits my constituency tomorrow?
Mr. Biffen: I appreciate that, in these delicate days ahead of 2 May, there will be a lively interest in these matters. I cannot at the moment provide what my hon. Friend asks in Government time, but I have great faith in his ability to make his case in his own way.
Mr. A. J. Beith: May we have an early statement on the Government's drastically amended Trustee Savings Bank Bill which will not undermine the independence of the Trustee Savings Banks in Scotland or the protections afforded by another place to depositors throughout the United Kingdom? Now that the Leader of the House has announced an Opposition day in our name, will he confirm that useful discussions have taken place to ensure that a fair hearing is given to issues raised from this Bench? Will he welcome the use of that time to ensure that the House debates issues which the other two parties might not want to be debated?
Mr. Biffen: It is a matter of touching observation how the Liberal party now seeks solace in the behaviour of the other place, but I assure the hon. Gentleman that the appropriate place for this House to consider the Trustee Savings Bank Bill is this Chamber.
As for Opposition time and its distribution, I am happy to confirm that, on 13 November 1984, at the conclusion of the debate on the Loyal Address, it was said that there would be a chance to consider those arrangements. I hope that the House will have a chance fairly soon to consider revised Standing Orders. It will then be able to give its authority to what has been suggested.
Mr. Richard Holt: Is my right hon. Friend aware that we all welcome next Thursday's free-ranging debate on foreign affairs? Does he recall that the House has also called for a full and free-ranging debate on law and order? Is he aware that, until we are allowed such a debate rather than the narrow things that we have had this week, we shall go on asking as people are fed up with the state of law and order?
Mr. Biffen: I note that my hon. Friend intends to keep on asking.
Mr. Dave Nellist: Is the Leader of the House aware that when, last Tuesday, the Prime Minister described next Thursday's national half day school strike as politically inspired, as the president of the campaign which has called that strike I agree with her? It was politically inspired and I am asking the right hon. Gentleman to change the order of business next Thursday because the inspiration for that national half day strike on 25 April has come from the Government's policies of using youth training schemes to massage the dole figures and to reduce young people's wages? We ought next Thursday to debate the youth trade union rights campaign demands that every youngster on a training scheme receives a minimum £55 a week—the trade union rate for the job—and is guaranteed a job at the end of the training scheme.
Mr. Biffen: The hon. Gentleman has had a good run and delivered the speech that he will be unable to make because I have no reason to think that there is a general desire in the House that the debate on foreign affairs promised for Thursday should be dropped from next week's business.
Sir Kenneth Lewis: In view of the massive Government majority last night on the BBC licence fee, may we have another debate on that issue so that we can learn the views of the Opposition? We do not know whether they want to increase it further or to have no licence at all. It is obvious that we should have a debate.
Mr. Biffen: The proceedings of this House rest upon a delicate desire not to intrude where it appears to be unseemly.
Mr. Tony Lloyd: Does the Leader of the House recognise the need for a debate about the state of the National Health Service, especially in south Manchester where decisions are being taken today that could result in the closure of many wards and the redundancy of up to 100 nurses and 200 non-nursing personnel? Does not that issue demand time within Parliament to discuss the mismanagement of the NHS by the Government?
Mr. Biffen: I should have thought that Monday's debate on what is purported to be the dismantling of the welfare state would give the hon. Gentleman exactly the opportunity that he seeks.
Mrs. Ann Winterton: Will my right hon. Friend, as an urgent priority, ensure that this House has an opportunity to discuss in full the implications of the Silberston report? Is he aware that the clothing and textile industry is the fourth largest employer in this country and that many of its employees are concerned at Silberston's prediction that if the report is accepted by the Government another 100,000 people will be made redundant?
Mr. Biffen: My hon. Friend will be aware that there were a number of demands and requests before the Easter recess to debate the textile industry. I said then that I hoped that such a debate could be arranged at some time, but I am afraid that I cannot see that happening in the near future.
Mr. Kevin Barron: Will the Leader of the House rearrange next week's business and find time, perhaps on Wednesday, to debate the proposed closure of the special steels division at Tinsley park that will cost 1,000 jobs in an already decimated area? Is the right hon. Gentleman aware that a constituent of mine who works at that British Steel corporation plant has recently been awarded the British Empire medal for his work over the past 20 years? He is now facing the possible closure of that plant.
Mr. Biffen: The hon. Gentleman raises a very serious issue for the constituencies affected by the proposed closure. I cannot alter the business set down for next Wednesday, but I shall draw the hon. Gentleman's point to the attention of my right hon. Friend the Secretary of State for Trade and Industry.
Mr. David Madel: Can my right hon. Friend confirm that, after the Second Reading of the Finance Bill a week next Monday, no more controversial Government Bills will be introduced this
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Session? As a long period of tranquillity in legislation is needed, could the Government, for the remainder of this Parliament, manage on a three-day week, leaving the other two days to Back Benchers?
Mr. Biffen: My hon. Friend has been here long enough to realise that controversiality lies in the eye of the beholder. His proposals are interesting, and I shall no doubt bear them in mind for next Session, but they could not conceivably reflect upon this Session.
Mr. Michael Hancock: Will the Leader of the House find time for a debate in a matter that is causing undoubted concern—the future of the Royal Navy, and especially the dockyards at Rosyth and Devonport, and the implications of the proposals for those two bases on the naval base in Portsmouth? Is he aware that there is an undoubted need for a wide-ranging debate on the Royal Navy and especially on the defence industries in the Portsmouth and Devonport areas?
Mr. Biffen: Siren voices below the Gangway draw my attention to the business for next Tuesday, but I would not be so cheap as to note that. No Government time can be found for the debate that the hon. Gentleman requests, but I shall draw his remarks to the attention of my right hon. Friend the Secretary of State for Defence.
Mr. Tony Marlow: In view of the Government's commitment, arising out of their Green Paper, to introduce legislation on the control and welfare of dogs, and while the contents of the next Queen's Speech are currently being considered, will it be possible to have an early debate in the House about an issue that affects many of our constituents and about which they are very concerned?
Mr. Biffen: We are running into a rather delicate period of parliamentary life—May, June and especially July—and I would not wish to add to our postbag or to the general contentiousness by raising the issue of dogs, so dogs will, therefore, lie.
Mr. James Lamond: On the subject of the renewal of the multi- fibre arrangement, will the Leader of the House treat the matter with a little more urgency because some of us think that we detect a certain reluctance by the Government even to renew it? As has already been pointed out, that would mean disaster to the textile industry and the loss of up to 150,000 jobs.
Mr. Biffen: I do not think that the hon. Gentleman is entitled to that fear. There is no complacency on the part of the Government, but I must have regard to the fact that the House will shortly have to deal with the Finance Bill on the Floor of the House, and this consideration and others must make me a little cautious as to how I answer such requests.
Mr. Nicholas Winterton: Will my right hon. Friend accept that many hon. Members on this side of the House will support the views expressed by the hon. Member for Workington (Mr. Campbell-Savours) about the proposed takeover of Matthew Brown by Scottish and Newcastle Breweries? Will he therefore request that the Secretary of State for Trade and Industry makes a statement next week on the issue and makes it clear that the matter will be referred to the Monopolies and Mergers Commission?

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My right hon. Friend may find it surprising that I support the official Opposition spokesman, the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley), in requesting that the debate on foreign affairs next week should be extended beyond the normal hour of 10 o'clock to enable more hon. Members to take part.
Mr. Biffen: I have already conceded the last point that my hon. Friend makes, and there is nothing surprising about him supporting the Opposition. My answer to his question about the proposed brewery takeover is that the Prime Minister set out clearly and precisely the exact legal situation, and I suggest that the House would be well advised to pause before asking for ministerial intervention to set aside what would otherwise be an administrative process.
Mr. Frank Haynes: Will the Leader of the House arrange a debate urgently to discuss education, bearing in mind the present dispute? I do not want the right hon. Gentleman to reply simply by telling me that we debated education and the dispute not long ago. Is he aware that in a fresh debate we might find the answer to the problem and get the Government off the hook?
Mr. Biffen: I fully endorse the observation of the hon. Gentleman about the effect that the conflict is having on the education services of our counties and cities. I shall, of course, refer the point that he makes to the Secretary of State for Education and Science.
Mr. Gerrard Neale: Has my right hon. Friend any further news about the Government's intention to make an announcement about the decision by the Joint Committee of both Houses on the Okehampton bypass? If not, will he urge the Secretary of State for Transport to make an announcement to remove doubt on the matter? Will my right hon. Friend also consider the seriousness of the inadequacies of the current public inquiry system affecting major roads, reservoirs and power stations and provide time for a debate on the subject so that we may initiate a new system which will speed up decisions, while providing time for the public inquiry procedure so that all the issues can be heard?
Mr. Biffen: As my hon. Friend says, this is a matter of acute concern to the south-west. The issue is still under consideration by the Secretary of State for Transport, but I shall remind him of the point that my hon. Friend makes about the virtue of an early announcement of a Government decision in the matter.
Mr. Laurie Pavitt: Will the Leader of the House discuss with the Secretary of State for Social Services the best way in which the House can give consideration—either by way of a statement or a debate—to the important report of the Royal College of Nursing on the future of nursing education? Is he aware that that report estimates that by the end of this decade there will be a shortage of 12,000 nurses? Does he agree, therefore, that the House should give consideration to that possibility?
Mr. Biffen: I take at once the importance of the point to which the hon. Gentleman refers, and will bring it to the attention of the Secretary of State for Social Services.
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Meanwhile, I hope that the hon. Gentleman will feel it appropriate in Monday's debate to adduce arguments about the future of the nursing services.
Mr. Teddy Taylor: Will my right hon. Friend also accept my thanks for giving additional debating time to the alliance? Many of us are finding the greatest difficulty, especially during the current elections, in establishing exactly what the alliance's policies are on any subject. Will my right hon. Friend help the people of Southend by giving the alliance a little more time next week so that we can ascertain whether it is or is not in favour of retaining Southend's excellent grammar schools?
Mr. Biffen: It is not for me to anticipate how the Chair will interpret the width of the motion on Tuesday. The issue that my hon. Friend has raised might well have to be dealt with outside the Chamber. He may well find that as a result of Tuesday's debate he will be stranded in the centre by the rightward lurch of the alliance.
Mr. Martin Flannery: I ask the Leader of the House with the utmost seriousness to approach the Prime Minister and the Secretary of State for Education and Science for the purpose of finding time for a full-scale debate on the problems facing the teaching profession and education. I have recently returned from the conference of the National Union of Teachers and I have never before seen such unity over the years that I have attended its conferences. It is clear that these moderate people will not back down easily.
Is the right hon. Gentleman aware that we are faced with long industrial action and that if we had a debate in which the grievances could be aired we could move possibly to a conclusion which would benefit education, the teachers, the parents and the children? That could well be the result if only the Government would take some action.
Mr. Biffen: I am sure that the hon. Gentleman will concur with the view that in all quarters of the House there is a strong awareness of the utmost importance of the education dispute and the factors that it embodies. I shall convey his request to my right hon. Friend the Prime Minister.
Several Hon. Members rose——
Mr. Deputy Speaker: Order. I shall try to call all those Members who have been rising in their places since the business statement was made, but it will be easier for me to do so if hon. Members ask brief questions.
Mr. Bill Walker: Will my right hon. Friend confirm that during next Thursday's debate on foreign affairs it will be in order to raise matters concerning the space defence initiative—the so-called star wars programme, which is very much misnamed—matters affecting NATO and disarmament?
Mr. Biffen: The debate will take place on a motion for the Adjournment, which is the traditional pattern for foreign affairs debates. It is recognised that such debates range widely. I am sure that the House will wish to talk about East-West relations, arms control and the Geneva talks, which will cover the very issues that my hon. Friend has in mind.
Mr. Peter Pike: Does the Leader of the House recognise the problems that have been caused to

405
local government by the changes that have been made to the rate support grant settlement after most councils have fixed their rates? Will he arrange time for this issue to be debated`? Would it not be appropriate to debate it before polling day in the county elections?
Mr. Biffen: There are no immediate plans for such a debate, but I shall consult my right hon. Friend the Secretary of State for the Environment and convey to him the hon. Gentleman's request.
Mr. Roger King: Does my right hon. Friend accept that there is growing concern for the future of the motor car industry, especially because of the delay in the announcement of the BL corporate plan? Will my right hon. Friend ask the Secretary of State for Transport to make a statement on the plan as soon as possible?
Mr. Biffen: I shall convey that request to my right hon. Friend.
Mr. Ronald Boyes: Has the Leader of the House had an opportunity to read column 202 of yesterday's edition of Hansard, in which the Minister of State, Foreign and Commonwealth Office, says that
"the Community should revert to a more normal relationship with Turkey, starting with the unblocking of the outstanding aid"? [Official Report, 17 April 1985, Vol. 77, c. 202.]
Is he aware that many peace activists in Turkey are in gaol in terrible conditions and that many other activists, including many thousands of trade unionists, are on trial? Will the Government not be losing an essential lever in persuading the Turkish Government to release these activists from gaol and to abandon the trials by urging the Community to revert to a more normal relationship with Turkey? Surely the Minister who is responsible should justify a policy change before the House instead of doing so by means of a written answer.
Mr. Biffen: I recognise that many hon. Members have taken a close interest over a long period in relations between Britain and Turkey and Turkey's domestic arrangements. I think that Thursday's debate will enable the hon. Gentleman's observations to be aired.
Mr. Michael Latham: Is my right hon. Friend satisfied that Monday's debate will provide both the time and the inclination for Opposition spokesmen to tell the 4 million mortgage payers in Britain whether they will abolish their tax relief?
Mr. Biffen: Yes. That is why I think that it will be a standing-room-only occasion.
Mr. Doug Hoyle: Will the right hon. Gentleman look at early-day motion 525 about the strike of cleaners at Exclusive Cleaning and Maintenance at the United Kingdom Atomic Energy Authority at Risley?
[That this House strongly condemns the action of Exclusive Cleaning and Maintenance at the United Kingdom Atomic Energy Authority, Risley, in reducing cleaners' earnings by 21p per hour which means that wages have been cut from £25 to £22·50 per week coupled with a reduction of holidays from four weeks to one week, and the use of blackleg labour in a sensitive area who have not received security clearance, despite this having previously been a condition of employment for cleaners; calls upon the United Kingdom Atomic Energy Authority
406
to intervene to ensure that their sub-contractors pay trade union rates and provide decent conditions, particularly in view of the high profits announced by Exclusive Cleaning; and also calls upon the Government to set up an inquiry into the commercial cleaning industry in order to protect the workers and customers from exploitation by unscupulous profiteers.]
Will he ask his right hon. Friend the Secretary of State for the Environment to make a statement to the House on why Exclusive Cleaning, an anti-trade union company, has the contract for cleaning the Houses of Parliament, particularly as it is trying to reduce the wages of 132 women by 21p an hour to £22·50 a week which has resulted in a strike that has continued for nine weeks? Will he recommend to his right hon. Friend that he should terminate that company's contract forthwith?
Mr. Biffen: That is an interesting extension of the responsibilities that I am supposed to possess with regard to next week's business. I am advised that the contract between Exclusive Cleaning and the United Kingdom Atomic Energy Authority is consistent with Government guidelines on cleaning contracts, but I shall refer to the relevant Minister the points that have been made.
Mr. Harry Greenway: Notwithstanding my right hon. Friend's announcement of a foreign affairs debate next Thursday, will he arrange for a statement to be made, before the dispatch by the Polish community of Ealing and beyond of its 100th 32-tonne truck full of food and medical aid to Poland next week, upon my right hon. and learned Friend the Foreign Secretary's most successful tour of iron curtain countries, particularly Poland, his excellent meeting with Cardinal Glemp, his most moving visit to the grave of Father Popieluwski and his talks with leaders of Solidarity? Those are most important and precious to the Polish community in Ealing and the rest of Britain.
Mr. Biffen: My hon. Friend has made generous and justified references to the recent visit of my right hon and learned Friend the Foreign Secretary to eastern Europe, and I shall draw his attention to my hon. Friend's remarks.
Mr. Alfred Dubs: Is the Leader of the House aware that, while the report on the Commission for Racial Equality on immigration control procedures may be gathering dust on Home Office shelves, many people in the House and in the country think that the issues that it raises require a debate, and pretty soon? Is the right hon. Gentleman yet in a position to say whether such a debate will ever take place, and, if so, when?
Mr. Biffen: I cannot really add to what I have said previously. I recognise the keen interest that there is that such a debate should take place. I am not yet in a position to provide Government time, but I shall bear in mind the interest.
Mr. Robert Adley: A moment ago my right hon. Friend refered to his role and powers. Is he aware that he rightly enjoys on both sides of the House a reputation for protecting the interests of Back Benchers and the House? In the light of that, will he share my concern that a statement has come from the Department of Transport to the effect that airports policy, in so far as it relates to current discussions over Stansted, Manchester, Heathrow and so forth, is to be decided, not in the light

407
of the recent debates and decision in the House, but in private quarters within the Department of Transport, and thereafter, not even referred to the House for its approval?
Is not that a disgraceful situation which is a matter of concern that has nothing to do with party politics or even partisan feelings about one's constituency? In the light of what happened over the Maplin Bill 10 years ago, will my right hon. Friend do his duty as Leader of the House to ensure that the present position is reversed?
Mr. Biffen: My hon. Friend's preliminary and good-natured remarks were misplaced. I am a shameless boss's nark and always will be. Unless I were prepared to do the job on those terms, I would not be standing at this Dispatch Box.
My hon. Friend's second point raises a matter that I should like to look into. I shall therefore be in touch with him.
Mr. Roger Stott: The Leader of the House, in announcing the business for next week, said that the Second Reading of the Ports (Finance) Bill would take place on Tuesday. I tried to obtain a copy of that Bill from the Vote Office but I was told that it was not there and it was not known when it was likely to be there. In view of the importance of that debate, will the right hon. Gentleman ensure that there is a copy of the Bill in the Vote Office in the next couple of hours?
Mr. Biffen: I shall look into that matter at once.
Mr. Peter Bruinvels: Has my right hon. Friend seen today's press announcements about the provision by my right hon. Friend the Secretary of State for the Environment of city action teams, and the towns that have been selected? Will he advise the House when we can expect a statement from the Secretary of State so that cities such as Leicester can be pleaded for by people such as me? The scheme appears to be good, and the House would like other cities to be considered favourably.
Mr. Biffen: I understand my hon. Friend's anxiety that Leicester should also have the advantage of this recent provision, I shall call the attention of my right hon. Friend to what my hon. Friend has said.
Mr. Dennis Skinner: Will Tuesday's debate on trade union democracy on a motion tabled by Liberal and Social Democratic Members, be sufficiently wide for hon. Members to refer to the fact that a great deal of hypocrisy abounds from those two parties? The leader of the Liberal party refused to accept the decision of the Liberal party conference when it held a ballot about cruise missiles and said, "Stuff the ballot", and the leader of the SDP fought on one manifesto and changed sides in midstream but has not had the guts to tell his electorate in Plymouth that he had changed his mind and there should be a ballot to endorse his membership of this House. Will the debate be sufficiently wide for such matters to be raised?
Mr. Biffen: The width of the debate is properly a matter for the Chair. However, I have such boundless faith in the ingenuity of the hon. Gentleman that I know that he will open up an aperture through which many other hon. Members will follow.

Earnings-Related Pension Scheme
4.1 pm
Mr. Michael Meacher: I beg to ask leave to move the Adjournment of the House, under Standing Order No. 10, for the purpose of discussing a specific and important matter that should have urgent consideration, namely,
"the Government's plan, which has just been revealed, to axe the state earnings-related pension scheme."
The matter is specific because the clear and explicit intention of the Government is reported in the Daily Telegraph of today in an article which is clearly based on Government briefing. It states:
"The Government has decided to scrap the SERPS."
The decision is specific in another sense. It specifically contradicts the explicit and unequivocal pledge that was solemnly given by the Prime Minister, conveniently before the general election, in a letter of 20 May 1983 to my hon. Friend the Member for Pontypridd (Mr. John). She stated:
"Nor are there any plans to change the earnings-related component of the state pension."
The matter, also, specifically and in terms, contradicts the equally binding pledge given by the Secretary of State for Social Services to the House when he said:
"My aim in setting up an inquiry is not to call into question the fundamental pensions structure that was established in the 1970s with all-party agreement, and to which I was a party." —[Official Report, 23 November 1983; Vol. 49, c. 360.]
The matter is important and, indeed, vital because it will drastically worsen the standard of living of millions of pensioners. Only the SERPS, which the Labour Government introduced in 1975, will take 2 million of the poorest pensioners above the state means-tested poverty line. The Government's alternative of private pensions will never do that. The state earning-related scheme was introduced precisely because of the failure of the private sector to provide adequate pensions in the past.
The matter is also important because billions of pounds earmarked for future funding for pensioners is now to be clawed back by the Chancellor of the Exchequer to provide a further bonanza of tax handouts for the rich. The report states that the Government claim that the SERPS cannot be afforded. It is vitally important that the matter is fully debated, especially as that claim is directly contradicted by the Government Actuary and, as the Government's Social Security Advisory Committee recently stated:
"At this distance of time we do not think there can be solid grounds for altering the scheme now for fear of all the worst outcomes occurring steadily for 40 years."
It is important that the matter is fully explored to expose the inconsistency between the Chancellor's projection of future growth of 3 per cent. —when the Government wish to crow about economic success —and the projection for future growth of the Secretary of State for Social Services of 1·5 per cent.—when the Government want the nation to believe that decent pensions cannot be afforded.
The matter is urgent because this is the first unambiguous sign that the Government would carry through by far the most serious and damaging attack yet on pensioners in the radical dismantling of the welfare state, on which the Government are now hell-bent. The SERPS is a central arch of the welfare state. It would increasingly become the sole protector of millions of pensioners against poverty and the indignity of dependence on means tests. To destroy it now—the best

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deal that pensioners have ever had—would be a sin against the British people and, therefore, I earnestly request a debate at the earliest possible opportunity.
Mr. Deputy Speaker (Mr. Harold Walker): The hon. Member for Oldham, West (Mr. Meacher) asks leave to move the Adjournment of the House for the purpose of discussing a specific and important matter that he thinks should have urgent consideration, namely,
"the Government's plan, which has just been revealed, to axe the state earnings-related pension scheme."
I listened carefully to what the hon. Gentleman said, but I do not consider that the matter is appropriate for discussion under Standing Order No. 10, and I cannot, therefore, submit his application to the House.
Mr. Michael Latham: On a point of order, Mr. Deputy Speaker. Would you confirm that if you had ruled in favour of the Opposition's submission it would have required 40 or 50 Back-Bench Members to rise in their places, yet only 26 Labour Back-Bench Members are present?
Mr. Deputy Speaker: I do not wish to consider hypothetical questions.

BILL PRESENTED
  PORTS (FINANCE)
  Mr. Secretary Ridley, supported by Mr. Secretary Younger, Mr. Secretary Edwards, Mr. Secretary King, Mr. Peter Rees, Mr. John Moore, Mr. Peter Bottomley and Mr. David Mitchell, presented (under Standing Order No. 111 (Procedure upon Bills whose main object is to create a charge upon the public revenue)) a Bill to provide for grants to be made to the National Dock Labour Board; to increase the limit on the amount of financial assistance to the Port of London Authority and the Mersey Docks and Harbour Company; to make further provision relating to borrowing by and the audit of the accounts of certain harbour authorities; and to repeal section 9 of the Harbours Act 1964: And the same was read the First time; and ordered to be read a Second time tomorrow and to be printed. [Bill 129.]
Orders of the Day

  Social Security Bill
  As amended (in the Standing Committee), considered.
  4.6 pm
  Mr. Archy Kirkwood: On a point of order, Mr. Deputy Speaker. I seek the recommittal to a Standing Committee of new clause 12. I understand that it is possible to recommit parts of a Bill for reconsideration by a Standing Committee.
  I do not wish to detain the House, but the point is important, and we must not allow it to go by default. The Government have virtually hijacked the Social Security Bill in that they have introduced substantial parts of the Budget into it, especially into new clause 12. Forty-one Government amendments and new clauses have been selected for debate today, notwithstanding the others that were also tabled for debate. That is an abuse of our procedures. There is no objection to the Government tabling proposals that derive from Committee to be properly considered on Report. However, the practice of wholesale importation and insinuation of new and substantially different proposals is out of order and a piece of procedural chicanery. As a marker for the future, we should try to dissuade the Government from future procedural chicanery of that nature. We should tell the Government that, whenever they seek to do that, we shall seek to recommit at least some of the clauses in the Bill.
  Mr. Deputy Speaker (Mr. Harold Walker): I am grateful to the hon. Gentleman for having given me prior notice that he might wish to raise this question with me. I have considered the matter and have decided, in pursuance of my powers of selection under Standing Order No. 34, that I should not be prepared to accept a motion for recommittal.

New Clause 12

  CALCULATION OF CONTRIBUTIONS
  '(1) In subsection (1)(b) of section 4 of the Social Security Act 1975 (incidence of Class 1 contributions), the words "primary Class 1" shall be substituted for the word "such".

  (2) The following subsections shall be substituted for subsection (6) of that section—

  5

  "(6) Subject to regulations under sections 128 to 132 below and to section 27 of the Pensions Act, the amount of a primary Class 1 contribution shall be the appropriate primary percentage of so much of the earnings paid in the week, in respect of the employment in question, as does not exceed the current upper earnings limit (or the prescribed equivalent in the case of earners paid otherwise than weekly).

  10

  (6A) The appropriate primary percentage is a percentage of the rate specified in subsection (6B) below as the appropriate rate for the primary earnings bracket (or the prescribed equivalent in the case of earners paid otherwise than weekly) into which the earner's earnings fall.

  15

  (6B) Subject to any order under this section or section 122 or 123A below, the 15 primary earnings brackets and their appropriate percentage rates shall be—

  Weekly earnings

  Percentage rate

  Bracket 1:

  current lower earnings limit to £54·99

  5 per cent.

  Bracket 2:

  £55·00 to £89·99

  7 per cent.

  20

  Bracket 3:

  £90·00 or more

  9 per cent.

  6C) Subject to regulations under subsection (7) or sections 128 to 132 below and to section 27 of the Pensions Act, the amount of a secondary Class 1 contribution shall be the appropriate secondary percentage of the earnings paid in the week in respect of the employment in question.

  25

  (6D) The appropriate secondary percentage is a percentage of the rate specified in subsection (6E) below as the appropriate rate for secondary earnings bracket (or the prescribed equivalent in the case of earners paid otherwise than weekly) into which the earner's earnings fall.

  30

  (6E) Subject to any order under this section or section 122 or 123A below, the 30 secondary earnings brackets and their appropriate percentage rates shall be—

  Weekly earnings

  Percentage rate

  Bracket 1:

  current lower earnings limit to £54·99

  5 per cent.

  Bracket 2:

  £55·00 to £89·99

  7 per cent.

  35

  Bracket 3:

  £90·00 to £129·99

  9 per cent.

  Bracket 4:

  £130·00 or more

  10·45 per cent.

  (6F) The Secretary of State may by order alter the number of primary or secondary earnings brackets below the highest bracket.

  40

  (6G) An order under this section may make such amendments of any enactment as appear to the Secretary of State to be necessary or expedient in consequence of any such alteration made by it

  (6H) No order shall be made under this section unless a draft of the order has been laid before, and approved by, a resolution of each House of Parliament.

  (6J) An order under this section shall be made so as to come into force—

  45

  >(a) on a date in the tax year in which it received parliamentary approval; or

  (b) on a date in the next tax year.

  (6K) Such an order shall have effect for the remainder of the tax year in which it comes into force and for any subsequent tax year (subject to the effect of any subsequent order under this section); and for this purpose the order is to be taken as receiving parliamentary approval on the date on which the draft of it is approved by the second House to approve it.".

  50

  (3) In section 7(1) of that Act (weekly rate of Class 2 contributions), "£3·50" shall be substituted for "£4·75".

  55

  (4) In section 8(1) of that Act (amount of a Class 3 contribution), "£3·40" shall be 55 substituted for "£4·65".

  (5) The following section shall be inserted after section 123 of that Act—

  "Further power to alter certain contributions.

  123A.—(1) For the purposes of adjusting amounts payable by way of primary Class 1 contributions, the Secretary of State may at any time make an order amending section 4(6B) of this Act by altering any one or more of the following figures—

  (a) the upper weekly earnings figure specified in respect of Bracket 1;

  (b) the weekly earnings figures specified in respect of Brackets 2 and 3; and

  (c) the percentage rates specified as the appropriate rates for Brackets 1 and 2.

  65

  (2) For the purposes of adjusting amounts payable by way of secondary Class 1 contributions, the Secretary of State may at any time make an order amending section 4(6E) of this Act by altering any one or more of the following figures—

  (a) the upper weekly earnings figure specified in respect of Bracket 1;

  (b) the weekly earnings figures specified in respect of Brackets 2 to 4; and

  (c) the percentage rates specified as the appropriate rates for Brackets 1 to 3.

  70

  (3) No order shall be made under this section so as—

  (a) to alter either of the percentage rates specified as the appropriate rates for Brackets 1 and 2 in section 4(6B) above to a rate higher than the percentage rate which at the time the order comes into force is specified as the appropriate rate for Bracket 3 in that subsection; or

  Brought up, and read the First time.
  The Minister for Social Security (Mr. Tony Newton): I beg to move, That the clause be read a Second time.
  Mr. Deputy Speaker: With this, it will be convenient to discuss the following:
  Amendment (a) to the new clause, in line 36, leave out `or more' and insert `£481'.
  Amendment (b) to the new clause, in line 63, at end insert
  'and
  (d) the weekly earnings figures specified in respect of Bracket 4 .'.
  New clause 22—Upper Earnings Limit for Secondary Class I Contributions—
  '(1) At the end of section 4(1) of the Social Security Act 1975 (Class I contributions—incidence) and of section 1(1) of the Social Security Pensions Act 1975 (earnings limits) there shall be added the words "except that for the purpose only of determining the maximum amount of weekly earnings in respect of which secondary Class I contributions are payable the upper earnings limits shall be as follows:

  (a) £265 from 6th April 1985 to 5th October 1985

  (b) £285 from 6th October 1985 to 5th April 1986

  (c) £335 front 6th April 1986 to 5th April 1987

  (d) £385 from 6th April 1987 onwards"

  (2) In regulation 7 of the Social Security (Contributions) Regulations 1979 for the words "the lower and upper earnings limit" there shall be substituted the words "the lower earnings and except for the purpose of determining the secondary Class I contributions payable the upper earnings limit".
  (3) Where by virtue of subsections (1) and (2) above secondary Class I contributions are payable on an amount which exceeds the amount of the upper earnings limits for the purpose of primary Class I contributions the secondary contributions on that excess shall be the normal percentage as defined in subsection (2) of the Social Security Pensions Act 1975 (contracted-out rates of contributions and benefits) of that excess and in cases to which that section applies shall be payable in addition to the contributions specified in subsection (1) of that section.'.
  New clause 23 —Changes in the Upper Earnings Limit During the Year—
  'After paragraph (5) of regulation 6A of the Social Security (Contributions) Regulations 1979 there shall be inserted the following paragraph—
  "(6) Where:
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  (a) the upper earnings limit is changed in respect of secondary Class I contributions with effect from a date in the year ("the effective date") being a date other than 6th April, and

  (b) the earnings periods for a person fall to be determined in accordance with the provisions of paragraphs (2) to (4) above

  the earnings period in which the effective date would but for the provisions of this paragraph fall shall notwithstanding the provisions of paragraphs (2) and (4) above terminate on the day before the effective date and a new earnings period shall commence on the effective date .".'.
  Government amendments Nos. 92, 93, 167, 94, 95, 96, 168, 170, 97, 98, 102 and 104.
  Mr. Newton: I shall explain the Government's purpose in proposing the new clause and the amendments as succinctly as possible and then try to pick up as fully as possible points which hon. Members on both sides of the House may wish to make during the debate.
  The purpose of the new clause and the associated amendments is to implement the changes announced in the Budget by my right hon. Friend the Chancellor of the Exchequer in respect of national insurance contributions. There are three main elements in the Government's proposal. First, there is a graduated system of contribution rates. At present, there are two uniform rates of contribution: 9 per cent. for employees and 10.5 per cent. for employers, payable on all earnings if they exceed the lower earnings limit, which at present is £35.50, up as far as the upper earnings limit, which at present is £265, above which no contributions are paid. From 6 October, we propose two brackets of lower contribution rates at 5 per cent. and 7 per cent. for employees with lower earnings, and three brackets of lower rates at 5 per cent., 7 per cent., and 9 per cent. for employers in respect of their lower-paid employees. The earnings levels at which those lower rates will operate are set out in the new clause, so I shall not elaborate them in my speech. They mean that, from October, employers will pay less in contributions on all earnings under £130 a week, and employees earning less than £90 a week will similarly pay less.
  Secondly, we intend to abolish the upper earnings limit for employers' contributions. From 6 October, they will pay the 10·45 per cent. rate of contributions on all earnings that exceed £130.
  Mr. Terence Higgins: Does my hon. Friend accept that the point he has just made raises a major issue of principle with regard to the contribution arrangements? By introducing such matters in a new clause on Report, it makes it difficult for the House to give full consideration to all the implications of what is undoubtedly a complex proposal. Had they been contained in the Finance Bill, they would have been debated in Committee. But to introduce it at this stage, when the rules of debate are extremely restricted—one can speak only once, for example—means that it is difficult to give proper consideration to what the Government propose.
  Mr. Newton: I respect the view of my right hon. Friend, but several new clauses and amendments directed towards the aspect of the Government's proposals to which he referred have been tabled, and I believe that the debate will provide a proper and adequate opportunity for anxieties such as those that may be felt by my right hon. Friend to be expressed. I shall certainly try to respond to those anxieties if they are expressed. As my right hon. Friend will understand, with his long experience and distinguished service as a Treasury Minister, it is impossible, as I understand the rules of procedure, to make amendments affecting national insurance by the medium of a Finance Bill. Indeed, it would have been necessary to introduce a separate Bill had we not had the opportunity of incorporating those proposals in this Bill.
  I hope that my right hon. Friend the Member for Worthing (Mr. Higgins) and the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood) will not overlook the fact that the proposals, which we hope to introduce in October — it will be a significant administrative task for the Department to implement them in that time—will be of significant benefit to many millions of lower-paid employees. The Government, having decided upon this policy, would have been open to considerable criticism had they not taken the earliest practicable opportunity to ensure that those proposals were implemented and the substantial benefits that they confer on millions of people put into practice.
  Mr. Higgins: Of course, I accept the point of substance made by my hon. Friend, and I also accept his technical point about the difficulties of incorporating the proposals into the Finance Bill. In that case, the right course of action should be a separate Bill with a Committee stage, or the Bill should be recommitted so that the new clauses can be given detailed consideration.
  Mr. Newton: I understand why my right hon. Friend and the hon. Member for Roxburgh and Berwickshire have raised the matter, but I believe that it is appropriate to proceed in this way. The debate this afternoon will provide an adequate opportunity for hon. Members to raise the points that they wish to raise about the upper earnings limit. I shall do my best to respond to any points that my right hon. Friend wishes to make.
  4.15 pm
  I had mentioned two aspects of the changes that we propose in contribution rates. The third is that, from 6 October, the class 2 flat rate contribution paid by the self-employed will be reduced by more than one quarter from £4·75 to £3·50 a week. There will be comparable reductions in the voluntary class 3 contributions available to those who, for a variety of reasons, wish to improve their contributions record.
  416
  Taken together, these are significant changes in the structure of national insurance contributions—possibly the most significant since the introduction of full earnings-related contributions. Despite the increased income from the abolition of the upper earnings limit on employers' contributions, the changes will have an overall cost in a full year of £450 million, made up of an £80 million net reduction in employers' contributions, a £270 million reduction in employees' contributions, and a £100 million reduction in contributions by the self-employed.
  In proposing the changes, we are seeking to advance, and I believe we shall move successfully further towards, two important economic and social objectives. The first, which I mentioned in passing, is to foster the creation of new jobs as part of what my right hon. Friend the Chancellor rightly described as a Budget for jobs. As a direct result of the changes, the cost of employing about 8·5 million workers earning up to £130 a week will fall by up to £3 a week. For the lowest paid—those earning up to £55 a week—employers' contributions will be cut by more than half. That will make existing jobs more secure, and at the same time give important encouragement to create new jobs in this part of the job market, with special advantage to the job prospects for youngsters, to which great importance is rightly attached on both sides of the House.
  The change will also reduce, for employers and employees, the distorting effect of the present lower earnings limit, which currently takes people from no national insurance contributions to national insurance contributions on their entire earnings if they pass the present £35·50 a week lower earnings limit. I accept, of course, that the proposed changes involve the acceptance of such edges at the margins between the new bands, but they are significantly less steep cliffs than the cliff edge involved in the present system. There is no doubt that the overall effect, taking account of the broad reduction in national insurance contributions as a whole, for this area of the labour market will leave us with a more sensible and rational system than the present one.
  If one of the Government's objectives is to increase employment, the other —no less important—is to improve incentives by increasing the rewards of employment at modest earnings, and to give additional help to the lower paid. The proposed national insurance changes alone will mean increases in net income ranging from £1·10 to £2·18 a week for nearly 3·5 million workers earning less than £90 a week. The effect becomes even more significant when combined with the increase in tax allowances announced by my right hon. Friend the Chancellor in his Budget statement.
  For a young person earning £50 a week the national insurance change alone will increase take-home pay by £2 a week, and there will be a further gain of £1·15 a week from lower income tax. That combined saving of £3·15 a week from tax and national insurance contribution changes is equivalent to an increase in take-home pay for that young person on £50 a week of 7·5 per cent. For a married man earning £80 a week there will be savings of £1·60 a week in national insurance contributions and £1·73 a week in income tax, giving a total gain of £3·33, or 5 per cent., in take-home pay. To give another example, which is especially striking in cash terms, although I do not pretend there will be many such examples, for a couple where the man earns £80 a week and the wife earns £50 a week, as a result of the national insurance and tax measures, their

  417
  combined take-home pay will increase by no less than £6·48 a week. I know most hon. Members in the House at the moment well enough to know that they will very much welcome the increased income which this provides to many of the low paid. It is a significant gain from these proposals.
  Alongside these changes for those who are employed, self-employed class 2 contributions fall from £4·75 to £3·50 a week, with a total benefit to the self-employed as a whole of £100 million. In addition, there is another tax measure—namely, the introduction of tax relief on that half of the class 4 national insurance contributions of the self-employed which can be roughly equated to the employer aspect of national insurance contributions. That has been very widely welcomed in all parts of the political spectrum, and certainly by the self-employed. That is a recognition of the important role that the self-employed already play in our economy and of the important part that self-employment can play in job creation, and it shows the value that the Government place on the contribution of the self-employed to economic activity in Britain.
  Lastly, I want to turn briefly to the collection of Government amendments associated with this new clause, most of which are technical or consequential on the major change. but some of which are concerned with the Government's proposals to ensure protection of the benefit rights of people which might otherwise have been affected by the changes in contributions which we are proposing.
  We intend, where the annual total of contributions notified to the Department is low enough to indicate that reduced rate contributions have clearly been paid or, indeed, are likely to have been paid, to enhance the benefit entitlement flowing from those contributions by a varying formula, depending on the contributions recorded. That will be done by regulations under powers which already exist relating to earnings factors. We shall ensure, first, that the record for flat rate benefits will not suffer at all, and, secondly, that the record for earnings-related benefits will not suffer where earnings have been at a uniform rate. Thirdly, where earnings have fluctuated, low earners will be fully protected, though a few higher earners who have had short periods on low earnings may lose very small —I emphasise "very small" —amounts of earnings-related rights. The main point that I want to make is that no one will lose rights by comparison with the contributions that they have paid. In this respect, the enhancement can only add extra benefit rights whenever they apply.
  The other very important point is that, even by comparison with earnings received, the extent to which earnings-related benefits will be enhanced will outweigh the extent of the very small losses that will occasionally be sustained by those who pay the reduced rates for short periods.
  I hope that I have said enough to enable the House to form some view on the merits of the Government's proposals. The changes incorporated in this new clause and the associated amendments constitute a major plank in our programme to promote employment, not least for young people, and to focus additional help on the less-well-off in work. I hope that the House will give them a fair wind.
  Mrs. Margaret Beckett: As is so often the case with this Government, the initial reaction to the proposal to change the national insurance contribution
  418
  system was perhaps two cheers—certainly one cheer—since it has been a very regressive system and one which penalises the lower paid far more than the higher paid. Unfortunately, even though the time for debate and consideration of these changes has been extremely limited, it has become clear that there are more problems than might at first have been imagined.
  One of the major problems is the extent to which the existing rather severe trap that is sprung when a person moves from one level of earnings to another has been replaced by several traps, perhaps slightly less severe in their effect but nevertheless just as real. It is the effect of these traps that is of particular concern to the Opposition.
  Although the Minister dwelt very much in his remarks —as indeed did the Chancellor in his Budget statement —on the effects that it is hoped will flow from these changes in terms of increased employment, most commentators have made it plain that any such effect, should it take place at all, will be very marginal and that the major effect will be to add an extra incentive to keep wages down. The Minister touched on this in his remarks but laid very little emphasis on it.
  This is a matter of very considerable concern to us because it is as dishonest as it is damaging to keep wages down at a time when there is a 12 per cent. increase in water rates owing to a Government-imposed tax, when gas and electricity bills are increasing because the Government have imposed charges on those industries, when national health prescriptions have gone up again and are, I think, 900 per cent. higher than they were when the Government came to power, and perhaps most of all when the Government are constantly talking in connection with every provision of the welfare state about people standing on their own feet, taking on themselves a greater part of the burden of their pensions, providing for themselves through more private education, more private health care, and so on.
  The Minister referred particularly to the young employed and said how much benefit they would derive from the changes that are being made in this Bill. He drew attention to the fact that it might amount to a few pounds a week. For those young employed who are in families receiving housing benefit, that might be a very small return for the almost £9 which the Government decided to take off them last year in the non-dependent deduction. They will still be paying a very severe penalty for the privilege of being in work.
  I note from the various comments on these proposals that the Institute of Directors is extremely concerned—and it appears to me that some of the amendments and other new clauses that have been tabled by hon. Members on the Government Benches also show concern—about the highest earners and the effect of these changes on them and their employers. We understand the point that they are making, but it always seems to me to be somewhat strange and certainly rather illogical that those in the Institute of Directors and hon. Members on the Tory side of the House feel so strongly that the higher earners must be allowed to earn more if they are to retain incentive, and talk about the disincentive to them of raising taxation, but believe that the lower earners must get lower wages—as will be the effect of these changes—if incentives are to be kept going. That is not an argument that I understand and it is one that the lower paid in this country find increasing difficulty in understanding.

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  The Minister also mentioned the effect of these changes on the self-employed. We recognise, of course, that these are welcome changes for that group. What greatly concerns us—particularly in the context of his and the Chancellor's speeches—is that it appears that the extent and nature of the changes for the self-employed go back to the myth, which the Government are always peddling, that that is the way to get new jobs. The present situation has nothing to do with the Government, nothing to do with the problems that the Government have created, and there is nothing that they can do to solve them. The best thing to do, it is said, is to have, like the Americans, lots more small businesses, and encourage people to become self-employed, because that is where employment will come from.
  We often hear members of the Conservative party quoting the number of new jobs in small companies in, for example, the United States. What they do not quote, however, is the number of those companies and jobs that disappear within a year or two, or the net effect on job creation, which is extremely small. I seem to recall that in his Budget statement the Chancellor referred to the self-employed as
  "a sector of the economy where an increasing proportion of the jobs of the future is likely to be found."—[Official Report, 19 March 1985; Vol. 75, c. 798.]
  That may have more to do with where all the other jobs are going than with the net increase in the self-employed.
  We are concerned that in giving this assistance to the self-employed the Chancellor has chosen to be extraordinarily generous to the better-off self-employed. If I understand correctly the changes that the Government are making—and that is no mean feat—it appears to me that even self-employed people, who are perhaps quite wealthy and certainly earn substantial sums, will pay only £3·50 a week to retain their entitlement to the basic pension. That is good value in anybody's terms and certainly a lot better value than is got by many people who are employed but earning substantially lower incomes. That means, as does this reduction, that to some extent the state is subsidising this improvement for the self-employed.
  4.30 pm
  I have one or two questions for the Minister about the proposed changes. One of the effects of these changes is that more people will be pushed into part-time employment, and perhaps into more than one part-time job. What will be the effect on them? At present, if both of those part-time jobs are below the lower earnings limit, the person does not have to pay any contribution. Will this apply in the future? What will happen if the sum of the earnings in the two jobs adds up to the level that brings them into a different contribution band? What will be the position of an individual with more than one job to which different contribution rates apply?
  We looked with interest at amendments Nos. 94 and 95 and wondered what the Government had in mind. Both the Minister and the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood) spoke about the difficulties in debating these things. The Minister then said casually that much of this will be done through regulations, so that the Government will have to come back to the House with the regulations, so that we can see what they have in mind. That is a bit of a cheek.
  420
  The Minister referred to the earnings factor. This was something on which I wanted to question him. I did not understand much more after his remarks. As I understand it, the theory is that entitlement to benefit is set by the earnings that occur between the existing lower and upper earnings limit and not by the rates of contribution that are paid. Entitlement also relates to earnings over the whole year. We recognise that there is not always a simple and clear relationship between contributions paid and earnings, but as a general rule the differences have been comparatively slight. With the new, much more complicated and wide-ranging changes, we wonder what the effect on benefit entitlement will be.
  We suspect—and if the Government feel injured by this they have only themselves to blame because this is wholly characteristic of their behaviour—that amendment No. 95(b) which says:
  "The Secretary of State may prescribe circumstances in which pensioners' earnings factors for any relevant year may be calculated in such manner as may be prescribed."
  is the Department giving itself a get-out. It does not have the faintest idea how this will work and does not know what people's entitlement to benefit will be and how it will be assured. Which genius will devise a computer programme to work it all out and throw out the cases that do not look correct?
  Someone could pay different rates of contribution during the year—the Minister referred to that possibility —for the same total level of earnings, or he could have different earnings during the year and still end up having paid the same rate of contribution. How will this work and what will it do to benefit entitlement? The Labour party is left with the unworthy feeling that a decision was taken in the Treasury to make a change in the basis of national insurance contributions because the Chancellor thought that it would look good in terms of job creation and particularly because he hoped that it would help to keep wages down. However, nobody thought through what the effect of the entitlement to benefits would be. The amendment has been drafted to catch up with the fact that later on somebody will have to work out what all this will mean for benefit entitlement.
  The Minister suggested that there would be opportunities for enhancement and that nobody would really lose. We have heard these assurances from Ministers and the Department before, but things have not always worked out as they have suggested. Overall, we are looking at a complicated package of changes. The Labour party suspects that even the Government do not understand how it will work out or what problems it will cause. Most of all, we fear that the disadvantageous effects of these changes will keep wages down, whereas the job creation advantages that the Minister has sought to present will not materialise.
  In the shadow Budget, the Opposition proposed that there was a need to look at the changes in the national insurance contribution system and we suggested a variety of ways in which such changes might be carried out. We did not go for any one particular formula because such changes need extremely careful working out, consideration and thorough debate. That is precisely what these changes are not having.
  Mr. Roy Galley: All Conservative Members will no doubt welcome the basic principles of new clause 12 and the fact that we are to have a more graduated system of national insurance contribution, with a considerable

  421
  reduction at the lower end of the scale which will ease unemployment problems for many people, particularly younger people. Therefore, it is exceedingly surprising that it should have had such a cool reception from the hon. Member for Derby, South (Mrs. Beckett). The Labour party is constantly bleating about unemployment, but when specific proposals to improve employment prospects are put forward it simply pours cold water on such constructive ideas. That is amazing.
  I took particular exception to the hon. Lady's statements about the self-employed. She gave the impression that all the self-employed are rolling in money and do not make a great contribution to our society. She did not recognise the levy without benefit that was placed on them by the Labour Government in the late 1960s that we are seeking to mitigate. In many parts of Yorkshire and in my constituency, the self-employed are a vital part of our employment scene and of the growth and revival of new industries.
  A number of problems on one or two specific matters arise out of new clause 12, and I should be grateful if my hon. Friend the Minister would give sympathetic consideration to them. The fact that there is no longer an upper earnings limit for employers' secondary contributions is one of them. Setting such a limit is the basic principle in amendment (a) tabled by my hon. Friend the Member for Northampton, South (Mr. Morris) and myself. It is causing growing concern to many sectors of industry. That concern has escalated in the past few days, when minds have been concentrated, so rapidly after the Budget statement, by the legislation that is to put it into effect. There will be an increased pay bill for certain types of firm, and no doubt other hon. Members who may catch your eye later, Mr. Deputy Speaker, will elaborate on different sectors of the economy where this will be a problem.
  The problem will affect not only firms of highly paid solicitors, people in the City and so on, or high technology firms. It will affect many firms with a high proportion of skilled manual labour, with people who are earning now, even in the supposedly depressed north, more than £265 a week. A particular point of concern is that often part of those earnings is bonus and productivity payments. The fact that there is no upper earnings limit for employers makes such deals less attractive to the employer. There will be some problems, many of which could affect a certain number of firms across the board in the economy. Most other countries, particularly in western Europe, that have an insurance contribution system have an upper limit. In West Germany, which in Bismarck's day was the pioneer of the insurance system, has a limit of about £20,000 on employers' contributions.
  Another concern is that the contributory system is such that benefits depend on the amount of national insurance contribution paid in the appropriate year, but there is a ceiling on the benefit paid. As I understand it, this applies to all contributory benefits. My hon. Friend may argue that that does not matter because the Government are retaining an upper earning limit for employees. However, employers will be paying substantially higher contributions and the employees to whom those contributions relate will receive no improvement benefit. That will add to the gradual erosion of the contributory principle that we have experienced in recent years. Increasingly there is less relationship between what one pays into the system and the benefit one receives from it.
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  It is to be welcomed that national insurance contributions are becoming a less regressive tax, but we are simply replacing a regressive employment tax with a progressive employment tax. It is becoming more and more an employment tax and little else.
  Mr. Higgins: Unfortunately, because of the timing of the debate, it has not been possible for many hon. Members to see the evidence which the Chancellor of the Exchequer gave to the Select Committee on the Treasury and Civil Service on this very point or, indeed, the note that was provided by the Treasury on it. The fact is that the evidence given to the Select Committee suggests clearly that the employers' contribution will confer no benefit right whatsoever.
  Mr. Galley: My right hon. Friend is right. The changes will make it more and more a taxation system. We perhaps should avoid the hypocrisy of saying that the contributory principle is important and must be retained because it has some relationship with benefits, because in this case it has not.
  Mr. Frank Field: Does the hon. Gentleman realise where his argument is leading him in regard to the whole principle of graduated contributions? The argument seems to be that, because we are abolishing the ceiling in respect of employers' contributions and giving no extra rights to employees, it is a bad system. One could argue equally that it is wrong to have graduated contributions because as one moves through the salary scale and pays a greater sum, although only the same percentage, in national insurance contributions, one is only getting the right to certain specific benefits. The much more interesting point is the one made by my hon. Friend the Member for Derby, South (Mrs. Beckett) about the right to benefit. The hon. Member for Halifax (Mr. Galley) is putting forward a totally misleading argument.
  Mr. Galley: I do not accept the hon. Gentleman's point. It is still valid to say that this is becoming increasingly a tax which goes further from the contributory principle which has been held as important by Governments of all shades for many years.
  Another important point relates to people who are contracted out of the state earnings-related pension scheme and who enjoy a rebate on their contributions between the lower earnings limit and the upper earnings limit because their occupational pensions will provide their earnings-related pension. There is an abatement for employees of 2·15 per cent. and for employers of 4·1 per cent. As I understand it, that abatement will cease for employees above the upper earnings Employers will be paying more and employees will receive no additional benefit through contracting out.
  When firms decided to provide their own scheme, it was a factor that there would be a rebate on employers' contributions. That may have been an important consideration in the financial equation that they had to consider. Surely it is fair that the rebate system should be extended to apply to all earnings, including those above the upper earnings limit, for contracted-out employees.
  Mr. Frank Field: I support new clause 12, but for somewhat different reasons from those put forward by the Minister. His first reason for commending the clause to the House was that it would have an important effect on job creation. There is a real danger of hon. Members on both

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  sides of the House taking up unreal positions. Hon. Members on the Government side may say that certain costs are all-important in determining whether jobs are created, while Opposition Members may ignore those costs completely. I should be surprised if many jobs were created by these changes. The Minister was on somewhat safer ground when he said that the changes may protect jobs already in existence. That is the first, though not the major, point that I wish to make.
  4.45 pm
  I join the Minister in the other reason that he put forward for commending the new clause to the House. He said that it is an important reform for lower-paid workers. The reform will be paid for by lifting the ceiling on employers' contributions. As someone who has said for many years that the ceiling should be raised, it would be churlish of me not to welcome that change. Although I tried to pay careful attention to the arguments put forward by the hon. Member for Halifax (Mr. Galley), I do not think they carry much weight.
  In opposition to this change some people have said that instead of having one poverty trap we shall have three poverty traps as a result of the change. We have to accept that, but we must remind those people who put this argument of two major changes that will be brought about by the Bill. Surely it is better to pay a 5 per cent. or a 7 per cent. contribution and then a 9 per cent. contribution rather than a 9 per cent. contribution from the beginning. It seems better, too, to have that tiered system at the higher income thresholds laid down by the Government.
  I welcome the proposed changes. They are not perfect and there will be difficulties, but the new clause should be supported by the Opposition for two reasons. First, the new system will be better than the present one. It will reduce the contribution made to the national insurance scheme by lower-paid workers. Opposition Members have often called attention to the regressive nature of the national insurance scheme.
  Secondly, it is terribly difficult to make major changes in the national insurance scheme because of the costs involved. My guess is that if a Labour Government were proposing changes, they would have come up with a similar scheme.
  Mr. Neil Hamilton: wish to give qualified support to new clause 12. Of course, every hon. Member will applaud the reduction in the national insurance burden on the low-paid. Indeed, it was a matter to which I devoted some attention in a speech in the little debate that we had on 1 March on the tax and benefits system. It is rare that the Government are so swift to respond to suggestions made in debate. I am grateful to them for taking on board the points that I made and for transplanting them into legislative form.
  However, certain difficulties will be created by the clause in its present form. It is for that reason that I have tabled two new clauses. New clause 22 proposes, instead of abolishing the upper earnings limit, to increase substantially the limit on the employers' contribution and to phase in that increase over three years. The effect would be that for the six months from 6 April 1985 the limit would be £265 per week or £13,780 per annum; from 6 October it would be £285 per week or about £15,000 per annum; from April next year it would be increased fairly
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  substantially to £335 per week or £17,500 per annum; and, finally, from 6 April 1987 it would be increased to a maximum of £385 per week, which is equivalent to about £20,000 per annum.
  There are several reasons for taking that approach rather than completely abolishing the limit, as the Government propose. It would seem that the limit is being abolished purely to pay for the reductions in the national insurance contributions at the lower end of the scale. Thus, the reason must be one of expediency. It is unfortunate that this way of doing things has been chosen, because a question of principle is involved. I naturally bear in mind what my right hon. Friend the Member for Worthing (Mr. Higgins) and my hon. Friend the Member for Halifax (Mr. Galley) have said about the lack of any benefit attaching to the employers' contribution. However fraudulent the system is—and it is a fraud, because it is a tax and it is not greatly related to the benefits that employees will ultimately derive—the fiction has been perpetuated by Governments over the years.
  We are seeing a change of principle under the guise of expediency, but I think that the wrong way has been chosen for bringing about such changes in the social security system. Therefore, we must consider the scheme as a method of funding and discuss whether there are better ways of doing it. The beneficial effects of reducing the national insurance contributions at the lower end of the scale will, to some extent, be diminished by the disincentives to wealth creation that the abolition of the upper earnings limit will bring in its train. In the long term, I believe that some jobs may be sacrificed in order to increase the number of jobs at the lower end of the scale. Therefore, the net effect may not appear to be as great as the Government claim.
  I understand that the national insurance burden overall is to be reduced by about £350 million through these changes. We all applaud that, and it is very good, but it disguises the massive redistribution of the national insurance burden among companies in different industries. Of course, some companies, such as those in the retail and textile trades, and those involved in local government will be better off and will welcome that. However, some firms will be much worse off as a result of the changes. Not all of them will be able to bear easily the burden placed upon them. Reference has already been made to high technology companies, and one could also mention North sea oil operators, those involved in financial services, and exporters as well as much of manufacturing industry.
  I shall point out, in particular, the disproportionate effects that will be experienced by small companies with few employees who are, on the whole, well remunerated. Jobs will undoubtedly be lost in some areas. The London Business School has estimated that although 250,000 jobs will probably be gained at the bottom end of the scale —it differs from the hon. Member for Birkenhead (Mr. Field), who claims that the effect will be negligible—100,000 jobs will be lost at the top end. That represents a significant diminution in the real value of the changes.
  Large high technology companies must be tempted to cut the number of unskilled staff in order to pay for the extra cost of the national insurance contribution on skilled staff, whilst at the same time they must maintain their capital investment and research and development programmes to protect their profitability. That is to be deplored. Many small high technology companies probably do not employ any unskilled staff. As a result of

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  these changes, those companies may fail or face a great disincentive to continue in business. In many cases that disincentive will correspond to a 10 per cent. increase in the major part of one of their biggest costs, and could, at the margin, wipe out their profits altogether. In this rapidly growing area of the economy, salaries are competitive on a worldwide basis. Thus, we are also looking at salary scales and costs in the United States, Germany, Japan and in the countries of all our major competitors.
  The abolition of the upper earnings limit will have a very deleterious effect as a result. Small North sea companies will be particularly hard hit, and that is to be deplored. Indeed, I believe that the abolition of the upper earnings limit represents a tax on business leadership. It reduces a company's ability to increase salaries at the top of the scale. Senior executives, who are in charge of hiring and firing and who know about the costs that arise in addition to salaries, are bound to know that, and to that extent it is bound to be demotivating in so far as they look to increased profitability to bring about increased remuneration for themselves.
  Higher rate thresholds were increased in the Budget this year, but only by the rate of inflation. However, the increase in personal allowances went beyond the amount needed to account for inflation. Thus, although we may not be hitting those parts of the economy upon which we depend for increasing the national income and for wealth creation, we are not greatly benefiting them. We are also allowing a tax on exports. The cost of employing exporters has increased substantially during the past two years, because the phasing out of the 25 per cent. income tax deduction for days worked overseas contained in the Finance Act 1984, combined with the proposed national insurance changes, will increase the cost of employing an exporter by 20 per cent. if he spends a quarter of his year abroad and by 30 per cent. if he spends half of his year abroad. That cannot be ignored, and the Government should address themselves to that point.
  The measure is also a tax on invisible exports, such as financial services and advertising. One thinks, perhaps, of Saatchi and Saatchi and of its incursions into the American market—to pluck just one example out of the air. But it makes things more difficult for those exporting such services. One agency that has come to my attention supplies British managers, consultants and engineers for United Kingdom and overseas projects. It calculates that it must increase its base charging rate to the client by more than £2 an hour, thereby making it uncompetitive with German and American companies. At present, the contracting industry is in the doldrums. Although United Kingdom engineers should be encouraged to earn some foreign exchange and to pick up know-how and experience abroad, they will not be led in that direction.
  We are also seeing a tax on performance-related pay. The Government have rightly encouraged remuneration by way of share option and incentive schemes. That is an excellent development, but in some instances cash bonuses are the most appropriate incentives, either in conjunction with option schemes or on their own.
  Some firms cannot offer incentives by means of option schemes. I think, for example, of unincorporated businesses and of non-profit-making bodies. Indeed, there is no more typical non-profit-making body than the Government. Why penalise these firms at the expense of those that can offer incentive schemes in other ways?
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  One of the most disturbing effects of the changes is that they will encourage remuneration through perks. In successive Finance Acts the Government have rightly set their face against benefits in kind. But the changes proposed will go against the whole trend of Government policy in that respect. The administrative costs of the Department and of businesses will be increased, although that is contrary to the Government's intentions as manifested in the recent paper entitled "Burdens on Business", which proposes major reductions in such burdens.
  I wish to refer to the complications which will result from the change to the rules in October. Under the post-1975 system, there is no established procedure or precedent for making such a change, because the system is geared to the annual cycle of the tax year. It will create a major complication both for companies and for the Department. It will create particular hardship for companies which entered into contracts before Budget day and which will extend beyond 6 October 1985. Those companies cannot, for competitive reasons, readily change their prices at short notice, even if their contractual arrangements do not extend beyond 6 October. Contracts for high-paid personnel will be particularly adversely affected.
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  My conclusion, therefore, is that, while the changes to the national insurance contributions rightly concentrate upon job creation, this method of bringing them about is calculated to damage the wealth-creating capacity of the economy. Although the overall net effect will be beneficial, I wish that other means could have been found to finance the changes so as to maximise rather than minimise their effect.
  New clause 23 affects, in particular, company directors. This is a technical point rather than one which relates to general policy. Since 1983 the rules relating to company directors have provided that national insurance contributions should be levied on the first earnings of directors—first in a chronological sense—up tc the annual maximum, which is 53 times the upper earnings limit. Consequently, no special provision is made for what happens when the upper earnings limit is changed with effect from a date during the tax year, because in the past this has never been contemplated by any Government. The abolition of the upper earnings limit could mean that if a director is on a monthly salary of twice the annual maximum, his national insurance contribution will be paid on the full £14,000 in the six months to 5 October and also on the full £14,000 in the remaining six months of the year. That will be a particularly penal provision.
  Even if my hon. Friend the Minister is not minded to accept the more radical proposals contained in new clause 23, I hope that he will take on board the points that have been put to him in this respect. This new clause would override the relevant part of the existing regulations. Instead, it would provide for a new earnings period to commence on the effective date for the upper earnings limit change. Therefore, it divides the year into two, with the annual maximum apportioned pro rata to each period. If the upper earnings limit is abolished on 6 October, it will mean that the employers' national insurance contribution in the first earnings period to 5 October will be payable only on the earnings in that period up to half the annual maximum. I believe this to be an equitable solution. I

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  cannot believe that the Government intended the inequitable way in which new clause 12, as drafted, will apply. Therefore, I hope that my hon. Friend will be able to provide some relief.
  Mr. Charles Kennedy: I find myself in the uncharacteristic and curious position, after the extremely well-informed and well-argued speech of the hon. Member for Tatton (Mr. Hamilton), of giving, on behalf of my right hon. and hon. Friends and myself, a slightly greater welcome to this set of proposals than did he. The restructuring of the thresholds is a positive step forward, although, as my hon. Friend the Member for Roxburgh and Berwickshire (Mr. Kirkwood) and the hon. Member for Tatton have pointed out, it is not altogether ideal that something which is just as much a political as a practical issue should be tacked on to the front of a significant piece of legislation. However, I appreciate the reason for this, as was outlined by the Minister in his speech.
  The Government's approach is surely right. They are trying to reduce the distortion and to ease the burden upon the encouragement of employment. Any step that will encourage new employment, including youth employment, is to be welcomed. However, to be fair, this must be set in context. Although the Chancellor made it clear that he is most concerned about the unskilled labour force and youth unemployment, there is no doubt that many of the changes that have been outlined will also encourage part-time employment. We do not wish to discourage part-time employment, but it is quite clear that the National Federation of Self-Employed and Small Businesses Ltd. would like more full-time employees to be recruited if only the economy, in terms of demand, were better, and if only some of the financial conditions under which they have to operate were more satisfactory. To introduce measures that will probably extend the scope of part-time employment cannot be a satisfactory or adequate response or solution to the problem. On this point I agree with the hon. Member for Birkenhead (Mr. Field). Therefore, the improvements, although welcome, are likely to be felt only at the margin. I echo what has been said by the Child Poverty Action Group. It welcomed the restructuring of contributions
  "insofar as it reduces the burden of national insurance on the lowpaid without disenfranchising them from entitlement to national insurance benefits."
  This has to be a key element in a change of this nature.
  It is also significant that on the evening of Budget day the BBC television programme "Newsnight" visited a part of the country that is suffering some of the most severe problems caused by the recession and unemployment. On that programme a local business man who might have been expected to benefit from these changes said that it was unlikely that he would be able to create more full-time, long-term employment. He believed that the abolition of the upper earnings limit might discriminate against the profitability and competitiveness of his company. I believe that this is a genuine cause for concern.
  The hon. Member for Tatton referred to North sea oil-related companies. Given the geographical location of Ross, Cromarty and Skye, hon. Members will appreciate that oil-related industries are a significant factor in their economy. Certain firms that are seeking to expand those
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  activities and at the same time to encourage local employment may face difficulties at the top of the scale over their higher-paid employees.
  All this, however, clearly falls within the Government's broader intention to move towards a more flexible and, certainly to some extent, more low-waged economy, with which I very much disagree. The Highlands and Islands Development Board recently commissioned a survey that showed that average earnings in its area were about 10 per cent. below the national average. Yet, for typical economic reasons, and for some cyclical reasons related to oil and tourism, unemployment is extremely high—well over 20 per cent., and more than 30 per cent. in some parts of my constituency. It is clear, therefore, that one cannot go too far in seeking to relate low wages to the encouragement of employment because, persistently and historically, the situation in my area has shown the opposite to be the case.
  Mr. Frank Field: I agree that the Government are putting undue emphasis on the creation of low-paid jobs, but I am genuinely puzzled as to how anyone can interpret the proposals in new clause 12 as part of that policy. I do not see why raising the earnings threshold for national insurance contributions from £33 to £55 and then starting at 5 per cent. and tapering up to the full 9 per cent. at £90 per week will increase the number of low-paid jobs.
  Mr. Kennedy: Curiouser and curiouser—I began by agreeing with a Conservative Member and a Labour Member is now defending the Government against me. We welcome the restructuring, but the changes must be seen in the context of the general approach outlined elsewhere in the Budget. I have grave doubts about the Government's broad approach. As the hon. Member for Birkenhead has said, the proposals before us are unlikely to have a resounding impact if they are set within that broad framework. I hope that the hon. Gentleman will agree that that is a fair point.
  We are happy to welcome the changes, especially to the extent that they may herald moves towards full integration of the tax and benefit systems, which I believe would command broad support throughout the House. We congratulate the Government on their initiative in that respect, albeit tempered by qualifications arising from other aspects of their general economic policy.
  Mr. John Watts: I welcome the restructuring of national insurance contributions especially warmly, not least because in the employment debate earlier this year I urged my right hon. Friend the Chancellor to deal with the problem of national insurance contributions at the lowest earning levels. I welcome the significant boost that the changes will give to the take-home pay of the lowest paid, the incentive for employers to offer relatively low-paid employment and the incentive for potential employees to accept such employment. I also welcome the scope for further modification to the brackets and to the rates, which I hope foreshadows more radical changes in the system of levying and collecting national insurance contributions, so that the system moves in stages, like the income tax system, rather than from one bracket to another.
  Like my hon. Friends the Members for Halifax (Mr. Galley) and for Tatton (Mr. Hamilton), I have received representations from companies in my constituency about the removal of the upper earnings limit for employers'

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  contributions, the non-availability of contracted-out rebate above that limit and the non-cumulative basis on which employers' contributions are to be calculated and collected.
  5.15 pm
  Taking new clause 12 as a package, I believe that the importance of the benefits given at the bottom of the scale is so great that if the only way to fund it is to remove the upper earnings limit, companies employing predominantly higher-paid staff will have to live with that burden. Overall, there is a modest reduction of about £80 million in the total burden of employers' contributions, but the cost is redistributed according to the pay profile of the employees concerned. Naturally, I have sympathy for companies that will be hit especially hard by the removal of the upper earnings limit, but the value and impact of the benefits at the lower end of the scale in my view justify that burden.
  As for the contracted-out rebate, I understand that there is a limit to the earnings taken into account for the accrual of earnings-related pension. That being so, it is logical that any rebate should apply only to that level of earnings which would otherwise qualify for the state earnings-related pension because the rebate is a recognition of the fact that by providing a scheme with benefits equal to or better than those of the state scheme the employer is relieving the public purse of certain costs. Therefore, although this is also a greater burden for companies operating contracted-out schemes, it is logical that rebate should not extend beyond the upper earnngs limit.
  The non-cumulative basis on which employers' contributions are calculated and collected, however, presents real problems for companies operating incentive and bonus schemes. I hope that my hon. Friend the Minister will address his thoughts to that rather narrow point. A company operating a contracted-out pension scheme and incentive bonus schemes, where employees' normal earnings are below the upper earnings limit, will benefit from the contracted-out rebate, but if an incentive bonus is paid in one lump the earnings in that week or month may exceed the upper earnings limit for that period and push the employer's contribution up to the full 10·45 per cent. rate even though the employee's earnings over the year may still be below the £13,000 limit.
  It would be sad if these imaginative restructuring proposals had the unintended side effect of discouraging employers from offering incentive bonus schemes. I hope that my hon. Friend will give further consideration to that problem and, if possible, seek a remedy that will remove the possible adverse impact on incentive schemes, as I am sure that all Conservative Members wholeheartedly support such schemes.
  Mr. Kirkwood: We have always said that national insurance contributions constitute a tax that bears disproportionately on the poor, so we welcome the restructuring proposals. However, I hope that the Minister will pay attention to the circumstances that employers now find themselves in. High earners and their employers have enjoyed a slightly anomalous privilege as a result of the upper earnings limit, and they naturally resent losing it. I should have preferred more time to have been spent in consultation with industry about what will result from the change. Nevertheless, the change is necessary in the public interest.
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  There is a danger and a suspicion that high earners and their employers will get round the change and try to mitigate the impact of it by shifting the emphasis from salaries to perquisites. The Minister has an opportunity to say that, if companies and employers do that, the Government will seriously consider tightening the tax regime that applies to perquisites.
  Employees' national insurance contributions should be integrated fully with income tax. That would involve applying the combined rate only above a personal allowance threshold—which threshold might have to be lowered to compensate for the loss of national insurance contributions currently levied—on all income from the first pound. We should like a move to be made towards the tax credit scheme that we have adumbrated for many a long year.
  The Government could have approached the matter in other ways. I should have liked them to have considered the redistribution to low-paid employees in the forni of employees' national insurance contributions throughout the earnings range above £35·50 a week being levied only on earnings above, say, £10 a week instead of on all earnings. That would have given some benefit to everyone rather than being directed entirely at low earners, and it would have been simpler to administer and have avoided the anomalies that we now have in many poverty traps.
  We support the changes in the employees' national insurance contributions, but the House should recognise that the clause will introduce parts of the poverty trap in other ranges of income. The high marginal rates will be reduced by a few per cent., but at the expense of moving them still closer to the discontinuities introduced by new clause 12. I understand that some of the calculations that have been done show that, for a 1p increase in salary, sums of up to £1·77 can be lost. That must be a disincentive.
  We fear that the encouragement of employers to take on more low-paid workers as a small contribution to reducing unemployment might be marred by a tendency to lock many people, especially women, into wages just below the £55 or £90 a week level, just as many part-timers are now locked into wages below £35·50 a week to avoid national insurance contribution liability. Except in that latter regard, these objections do not apply to the stepped structure for employers' national insurance contributions, which is generally welcome for its redistributive and job promotion effects.
  I should like the Minister to give the Government's view about the emphasis being shifted from salary to perquisites.
  Mr. Higgins: It is completely wrong that we should debating new clause 12. When the Bill was given a Second Reading, such a clause was not generally envisaged. The important principles involved in the clause were therefore not considered at the stage at which it is normally appropriate to consider them.
  These are highly complex matters which deserve detailed scrutiny such as can be given only in Committee. My hon. Friend the Member for Slough (Mr. Watts) mentioned the effect on employees who are contracted in and on those who are contracted out. That matter deserves detailed examination, preferably specific amendments, when hon. Members can speak more than once. On Report, an hon. Member can make his point only once, as has happened with my hon. Friend the Member for Slough. If he does not like the Minister's reply or if the

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  Minister does not understand what the argument is about, there is no way in which my hon. Friend can come back, as he could in Committee. This clause should have been the subject of a separate Bill or, at least, it should have been recommitted so that it could receive the consideration and attention that it deserves.
  These measures were clearly part of the Budget. I fully understood my hon. Friend the Minister's reply to my intervention, when he gave the technical reasons why these measures could not rightly be incorporated in the Finance Bill procedure. Nevertheless, the measures were clearly part of the Budget, and it is therefore right that the Treasury and Civil Service Select Committee should have given careful attention to them.
  The Select Committee has taken evidence from Treasury officials, my right hon. Friend the Chancellor of the Exchequer, the Governor of the Bank of England, the Confederation of British Industry and the Trades Union Congress. We took evidence from the TUC and the CBI only last Monday. I understand that, fortunately, I am able to refer to that evidence as it was all taken in public and has been reported to the House. It would not be right for me to quote it because the official published report has not yet been corrected. The House has not had the opportunity to consider evidence which is directly related to what we are debating today before reaching a decision. That is extremely unsatisfactory.
  The broad point about the changes in the lower end of the contributions scale and the effect that they will have on employment is a matter that the House is likely to welcome. I do not think that there is a division of opinion on that. However, that does not mean that the changes do not raise some difficult technical problems which ought to be discussed in detail. It is likely that we agree about the beneficial effect of the changes on employment.
  Studies made by the Institute for Fiscal Studies suggest that, of the 270,000 people who are affected by the poverty trap, even at the 75 per cent. effective marginal rate of tax level, only 10,000 will be taken out of the poverty trap by my hon. Friends proposals.
  We should spend a little time considering the implications of contributions on both employees and employers. We run immediately into the vexed question of the contributory principle. I was deeply worried about that principle when I made my maiden speech because official obeisance to it over the years had ruled out from any benefit as of right the people who were over a given age when the scheme was first introduced. That gave rise to great anomalies. I introduced a private Member's Bill on the matter and I am happy to say that the first thing that the previous Conservative Government did on coming into office was to put the matter right. The over-80s, as they were generally known, got that part of the national insurance pension which was not covered by contributions. Even on the employees' side, the contributory principle has to a large extent been pure myth. The problem is even more difficult on the employers' side.
  We are substituting three separate scales for the poverty trap scale. That creates problems, especially in regard to overtime.
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  5.30 pm
  I understand that I can refer to the evidence given to the Select Committee, but cannot directly quote from it—although when the words are published, they will be seen to be cogent. Last Monday we took evidence from Sir Terence Beckett on this very issue, and he made a number of specific points on removing the upper limit on employers' contributions. He mentioned the interesting point—and the CBI has evidence from those able to analyse the position carefully—that, because of the increased costs at the upper end of the scale, employment may be reduced at the lower end of the scale. That may not be the general case, but Sir Terence appears to have specific evidence on this matter.
  Sir Terence made the important point that the effect of increasing the burden at the upper end of the scale would inevitably make many high technology industries less competitive both at home and in export markets. He said that we should be moving towards the bigger value added end of the production scale. In reality, the effect of the proposal will be to deter those who are contributing significantly to increasing the amount of value added either in competition with imports or for export markets.
  In further evidence, Sir Terence spoke about the various anomalies likely to arise, especially with regard to overtime. I understand that the scheme is to work on the basis of the weekly pay packet. Apparently, a number of firms are concerned that the £1 that employees earn in overtime at particular parts of the scale may actually make them £3 worse off. That is nothing to do with the "why work?" syndrome or the poverty trap. It is a question whether people should work overtime when both the employer and the employee think it justified. Some people will work overtime under the scheme but be worse off, which is clearly absurd. If we were in Committee, we could be banging the issue back and forth, seeing the extent of the problem and trying to find a solution. Concern is being expressed about the effects of the removal of the upper limit for employers' contributions.
  On the so-called contribution principle for employers, if it ever existed it most certainly will not exist if we agree to the new clause. In evidence to the Select Committee, the Treasury made it absolutely clear that if we accept the new clause there will be no link between the contributions paid by employers and any benefit that they or anyone else might recieve. In short, the scheme is a payroll tax, and let us have no doubt about that. Moreover, it is a graduated payroll tax with the adverse effect of working against the encouragement of high technology, not low technology, projects and against making us competitive in world markets.
  In answer to questions about the employers' contribution, my right hon. Friend the Chancellor of the Exchequer accepted that a contributory principle was not really involved. I do not know whether my hon. Friend the Minister has had an opportunity to study the Chancellor's evidence. Perhaps he will tell us whether he has. It is relevant for the House to know the views of the Chancellor on this new clause. I regret that there is no Treasury Minister present to illuminate us further. It is sad that we should come to this. It is a straight payroll tax at the upper end of the scale. Although I welcome the amelioration at the lower end of the scale, we must be concerned about the effects of the ending of the upper limit.
  Many of us campaigned for a long time for the abolition of the national insurance surcharge—a tax on jobs

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  imposed by the previous Labour Government. I am glad that it has now been abolished. However, for employers employing people at the upper end of the scale, the effect of that abolition will be offset by the proposals in the new clause. I hope that my hon. Friend will answer a specific question. At what level of income is the abolition of the national insurance surcharge wholly offset by the proposals?
  I do not intend to oppose the new clause. It is a curate's egg. We can welcome its effects on the bottom end of the scale while having grave reservations about its effects on the upper end of the scale. If my hon. Friend is in his usual good debating form, he will no doubt legitimately say that if we do not want to agree to the change at the upper end of the scale, we must tell him how to raise the money to pay for that. We could have a long debate about the general economic situation, and I presume that that would be in order. We could debate general fiscal and monetary policies and so on, but I do not want to go that far. We must take for granted the fiscal stance that the Chancellor has put before us. However, I still think that there are better ways to save money than the proposals in the new clause that affect the upper end of the scale.
  To be specific, I believe that it is a mistake to increase the own resources to the EEC. No case has been made to the House on why we should give more money to increase agricultural production, when we all know that there are obscene surpluses in many areas of agriculture. Therefore, I am happy to suggest that as an alternative to removing the upper limit.
  We have had very little time to debate this matter; and we have had no time to bandy it back and forth. I hope that my hon. Friend will agree to drop at least the part of the new clause that relates to the upper end of the scale.
  Mr. Tim Yeo: I wish to give the warmest possible welcome to new clause 12. Prior to the Budget I strongly advocated the changes that it incorporates and I am delighted to see that they have been included in the Bill. It is an important step towards improving the incentives for low-paid work. I do not share the reservations expressed by the hon. Member for Birkenhead (Mr. Field). At the very least, I believe that reducing the employers' contribution is a far better way to promote tow-paid jobs than raising tax thresholds.
  Reducing the employees' contribution has the further advantage of making it more attractive for employees to take low-paid work because of the increase in their take-home pay. The combination of those two measures will be beneficial in promoting prospects for youth employment.
  I do not share the concern expressed about the abolition of the upper earnings limit. The money that we shall gain from that will be used on something much more worth while. However, I was glad to hear my right hon. Friend the Member for Worthing (Mr. Higgins) mention an alternative source of funding the £800 million that will be gained. I agree with his point about own resources. I should like that money to be saved in addition to the money saved in abolishing the upper limit.
  I wish to make three brief points. The new clause drives a complete coach and horses through the idea that national insurance is any longer either an insurance or a contributory system. I happen to believe that that is very welcome. It is an overdue acknowledgement by the Government that the contributory basis is completely bogus.
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  I hope that we shall hear no more of that argument because it has been used to obstruct all sorts of reforms in the national insurance system over the years. We have seen contributions at the lower end reduced. As a result of the new clause, contributions at the higher end will be increased, but there has been no change in the benefit to which people are entitled. Thus, there is no insurance principle at stake here.
  Mr. Frank Field: A number of hon. Members have said that a coach and horses has been driven through the national insurance system. Will the hon. Gentleman reflect on the position of our constituents when they come to claim benefit? Many of them are denied benefit on the basis of inadequate contributions. For them, therefore, the contribution principle remains intact.
  Mr. Yeo: I appreciate the point that the hon. Gentleman makes as it affects those who have been paying in the past. I am simply pointing out that for those who think that they have been buying a benefit by their contributions and who are suddenly told that, because they are higher earners they must pay two, three or four times as much without any increase in benefit, there is no insurance principle, and the same applies at the bottom end of the scale.
  I acknowledge that the perception of many people who have paid national insurance contributions has been that they have been buying an insured benefit. Let us disabuse them of that perception as quickly as possible. The new clause will help to do that.
  The distortion will continue, though to a lesser extent because the rate of contribution is payable on total earnings. Thus, when one moves through the thresholds, one has a marginal rate of what I would call tax of well in excess of 100 per cent. That is unfortunate, but it is not as serious as it was, and we should continue to try to refine the system to avoid that disincentive effect, which will, to some extent, apply to employers as well as to employees.
  I hope that the new clause is only the first step to the complete integration of national insurance contributions with income tax. Once we have recognised that we are no longer dealing with an insurance system, and once we have acknowledged that national insurance is, in effect, a tax, we are ready to integrate the two systems.
  Employees' national insurance contributions could easily be merged with their income tax. We have the ironic consequence, as a result of the changes made by the new clause and last year with the abolition of the investment income surcharge, that investment income is now effectively taxed at a lower rate than earned income. I see no reason why that situation should continue.
  If we merged employees' national insurance contributions with tax, there would be some disadvantage initially for pensioners, but that could be dealt with by raising the age allowance. Employers' national insurance contributions have always been a payroll tax, and they should be further reduced in future years.
  The right hon. Member for Plymouth, Devonport (Dr. Owen), during Prime Minister's Question Time, raised a point which seemed to be critical of the changes that are now proposed. However, I was glad to hear his hon. Friend the Member for Ross, Cromarty and Skye (Mr. Kennedy) supporting the changes. It is a comfort to those of us who like to see familiar sights to have the SDP facing in opposite directions at the same time. I hope that that will

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  not deter the Government from moving ahead eventually to the complete abolition of national insurance and its integration with tax, which would result in considerable administrative savings.
  I do not always have cause to congratulate the Government on the effect of their fiscal and financial policies on the voluntary sector. However, since, on the whole, voluntary organisations have an above average proportion of low-paid workers, they will be substantial beneficiaries of the changes that are being made. The large charities, of which I have close personal knowledge, will experience a considerable saving in their wage bills as a result of this measure.
  5.45 pm
  Mr. Michael Morris: I apologise to the House for being delayed, and I apologise in particular to the Minister for not being present to hear him move the new clause.
  I recognise the broad strategy behind the new clause, and I support it. However, I wonder, in relation to its implementation and bearing in mind the removal of the employers' upper limit, whether the Government have understood the full implications of what they are doing. My right hon. Friend the Member for Worthing (Mr. Higgins) did the House a service in referring to some areas that were troubling him. I agree that as detailed a new clause as this warrants the careful attention of hon. Members.
  The House will note amendments (a)and(b) to the new clause which stand in my name and that of my hon. Friend the Member for Halifax (Mr. Galley). My hon. Friend represents a northern seat and I represent an industrial seat in the midlands. The reason for our choice of £25,000 in respect of amendment (a) was that it seemed logical to have an upper limit. After all, while our European partners do not have identical schemes, they are similar; for example, the French have had an upper limit for many years. It is a variable limit—depending on whether the contributions are for pension, unemployment, health or sickness—of about £11,000 depending on the pound-franc exchange rate. West Germany, which is perhaps the closest analogy to the United Kingdom, has an upper limit of £20,000. Therefore, before we rush away from the idea of having an upper limit, we should think of our relative competitiveness with out continental partners. That was one of our motivations in tabling that upper limit.
  Our second purpose was to try to have some relationship with the other guides that we have in Britain, and the one that my hon. Friend the Member for Halifax and I chose was that at which people no longer get tax relief when they are made redundant. If one is unfortunate enough to be made redundant and one has a tax benefit payment, it is tax-free up to £25,000, and beyond that it is taxable. That was the logic behind the figure that we chose.
  In choosing that figure, we were not aware of the question that had been tabled by my hon. Friend the Member for Croydon, South (Sir W. Clark) on 15 April, in which he asked for the cost of what we propose. It was made clear in the answer, at column 40 of the Official Report for that date, that the cost would be the substantial sum of £275 million. However, I was cheered as I journeyed south this afternoon to hear that the outturn from
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  the public sector borrowing requirement was a good deal better than the Chancellor had forecast at the time of the Budget. In other words, that £275 million has probably been saved.
  Amendment (b) may appeal to the Minister. It would allow him, should he wish to do so at a future date, to put on a top limit—that is, if he is not persuaded today that £25,000 would be the right figure. In other words, it would give him a degree of flexibility to meet many of the points that have been made today. I look forward with interest to hearing his reply on that point. It is true that the days have gone when a limited contribution produced a limited benefit. I take the point of the hon. Member for Birkenhead (Mr. Field) that it is conceivable that a man or woman who is short of contributions at a certain stage may make good, make an enormous contribution to the national insurance fund, and still be ineligible for the basic pension because of an insufficiency of contributions. That is an anomaly to which my hon. Friend the Minister for Social Security should address himself. Those who find themselves in that position will feel aggrieved, and rightly so.
  Only four weeks have passed since the Budget but calculations have been made by four companies in Northampton which show that, if the proposed levels of contribution are implemented, a medium-sized company that tends to operate in the high-tech area will pay more than it will save from the national insurance surcharge. That seems to be the wrong approach. I suspect that we shall find that many medium-sized companies are adversely affected. It is the growing, medium-sized company that we want to prosper, and such companies should be given every encouragement.
  It is a fact that national insurance contributions are paid for up to 52 weeks for an employee who is working overseas. When that rule was introduced it was the norm for employees to go abroad for 18 months or two years. That was the normal tour. That was reduced to about 15 months. However, there has been a further change and the bulk of expatriate Britons in the middle east or far east, where my right hon. Friend the Member for Worthing has been recently, are abroad for nine months. As the cost of living abroad is higher than it is here—that is usually the position—salaries have to be enhanced and employers will find themselves having to pay enhanced national insurance contributions. That will produce an additional on-cost for those whom we want to be more competitive in the market.
  My right hon. Friend the Chancellor of the Exchequer and his ministerial colleagues have rightly placed great emphasis on share incentive schemes over the past few years. This is to be applauded, but we must recognise that such schemes are likely to be attractive to middle management and top management. If someone is on the shop floor or is a member of lower management and he receives an annual bonus, which in many ways is comparable to a share option scheme, which will attract medium and top management, he will find himself in the top bracket for contributions if the bonus is paid in any one week. That is an unnecessary disincentive. It will not encourage better employer-employee relationships and it will negate the benefit of having good involvement between men and management.
  Sir Brandon Rhys Williams: I support my right hon. Friend the Member for Worthing (Mr.

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  Higgins) in his complaints about the introduction of the clause at this stage in the Bill's passage through the House. It is clear that we have an important new clause before us, but the Bill was intended originally to be much smaller in scope. It was not envisaged that it would involve the enormous implications that will undoubtedly flow from the new clause.
  It is sad when a Department uses a Bill which is a minor measure when set against the provisions contained in the new clause as a vehicle for placing additional legislation on the statute book quickly without giving Parliament the opportunity of a proper Second Reading debate or the opportunity fully to examine in Committee the measures proposed in the new clause.
  It is wrong that this new clause should have been presented in this way. The provisions contained in it should have appeared before us in a separate Bill. Parliament has a duty to consider what the Executive are proposing for the taxation of individuals. The new clause will apply to virtually the entire population at one time or another; and yet we shall let it pass after an hour or two's debate without any proper consideration of the implications.
  We have had a number of interesting Second Reading speeches and some hon. Members have attempted to do the work that they would have done if they had had the opportunity of considering the Bill in Committee. The introduction of the new clause at this stage is an abuse of parliamentary procedure. If we allow this to happen and Departments learn that they can treat the House in this way, they will do it again. We shall all suffer as a result, but the nation will suffer most of all. As a consequence, Parliament will be treated increasingly by Departments as a dead letter or a rubber stamp. I support my right hon. Friend the Member for Worthing in his complaints, speaking as he did with the authority of being Chairman of the Select Committee on the Treasury and Civil Service. When the Minister for Social Security replies, I hope that he will give us an assurance that this is an experiment which his Department does not intend to repeat.
  We all accept that national insurance contributions had to be related to earnings and a number of years have passed since the earnings-related system was introduced. There is no good reason for keeping the national insurance contribution separate from income tax, especially as it is collected through the pay-as-you-earn mechanism. The identification of national insurance contributions as something separate from income tax is a survival of a bureaucratic notion which should be brought to an end.
  I accept that it is right to carry the contributions to the national insurance system up to the top ranges of earnings, but what justification then remains for keeping higher-rate tax at the same time? That retention becomes increasingly dubious. I appreciate that many of my right hon. and hon. Friends would not join me in this approach, but a few weeks ago I turned up the reports of the debates in Committee during the consideration of the Finance Bill of 1971. I looked them up for another purpose but I found that at that time I recommended strongly that we should bring to an end the higher rate of tax as it did no one any good. I only regret that I have not said it more often since then. The economy would be in much better heart now if we did not have a system which attacks those who earn the most and who contribute most to the creation of wealth.
  In moving towards higher rate contributions to the national insurance scheme we are, if anything,
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  accentuating the evil effects of retaining the higher-rate tax. The House should ask itself who gains from discouraging the enterprise of those with the greatest earning potential. Secondly, who would lose if higher-rate tax were abolished? I believe that in a short time revenue would actually increase if it were abolished. When Sir Stafford Cripps halved the duty on wine, he doubled the yield in a very short time. If we did not have the higher-rate tax, taxpayers would pay much more within a short time in national insurance contributions and income tax at the standard rate. Much less effort and ingenuity would be wasted on tax avoidance, which is a major national industry.
  We would help also to end the senseless distortion of salary structures. The sharp increases in salary that are sometimes received by senior management, especially in the private sector, are seen by some sections of public opinion as offensive; but the net effect of these increases still does not bring British levels of earnings within the range that is considered normal for top people in other countries.
  Equally, we would take the unwanted burdens from companies of retaining the people that they need for the continuation of their business regardless of the enormous expense of paying the tax which goes along with paying the necessary gross salaries. If, in the enterprise economy, we ended discrimination against the most energetic and creative elements, everyone would gain and no one would lose. I hope that I shall have the opportunity to say the same thing again, because it is a point which needs to be made, if not by anyone else, then by the hon. Member for Kensington.
  We have now had earnings-related contributions for a number of years. We still have no explicable relationship between contributions and benefits in national insurance. Employers' contributions should have a specific purpose and a definable, calculable end result. The recommendation that I would like my hon. Friend to consider is that the employer's contribution to the national insurance system should become a form of deferred pay which would go straight into a personal money-purchase scheme for each employee. The employer's contribution ought riot simply to be lost in the fund, but should be retained as a personal entitlement of the employee in respect of whom it is paid. It should be allowed to accumulate on money-purchase principles to provide for his retirement as a form of deferred pay.
  I do not like the employer's contribution going into what is, in effect, a final salary scheme. Final salary schemes have a redistributive or money transfer effect from the low to the higher paid and from early leavers to long stayers. That last point may not be a fair criticism of the state earnings-related pension scheme arrangements, but I support those who think that the state earnings-related pension system should be wound up as soon as possible. I should like the employers' earnings-related contribution to be retained and identified as the property of the individual employee, and for it to go towards the provision of his retirement income.
  If employers made a 10 per cent. pension contribution, it would not be enough to give everybody all that they hope for in retirement, but it would certainly be the basis of a satisfactory retirement income and it would be possible to calculate how it had been arrived at.

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  I accept that employees' contributions cannot purchase specific benefits if the payments into the scheme are earnings-related but the benefits are flat rate. Equally, the benefits which people have learnt to expect from national insurance are related to their families' circumstances but there is no reflection of family circumstances on the contribution side. That is another anomaly.
  I accept that there is inevitably a redistribution of income where employees' contributions are concerned, but that really has the effect of making national insurance contributions into a citizenship entitlement. It is not an insurance scheme in any acceptable sense of the term and the proposal before the House today takes us no further in clarifying the underlying relationships between contributions and benefits in the national insurance system.
  National insurance is a citizenship entitlement with unacceptable gaps, as hon. Members have pointed out. Because of deficiencies in the contribution records which are held to exist in certain cases, some people are not entitled to claim against national insurance when they fall into need, and we then have to have a supplementary benefit system instead which gives them virtually the same entitlements. But that alternative simply clouds the moral basis for the redistribution of income and at the same time creates tremendous administrative difficulties.
  In the years of the decline of the Holy Roman Empire, it was said that they legalised anarchy and called a constitution. The redistribution of income in Britain is in the last stages of decline and must be abolished and reconstructed in one way or another. This Bill legalises the extension of income tax and calls it a contribution. It is not really a joking matter; it is a system which urgently needs to be revised. I hope that my right hon. and hon. Friends are thinking seriously of what comes after the Bill. We know that studies are being made on the reform of the redistribution of income; but are they sufficiently radical to do away with the problems that have beset national insurance since it went over to an earnings-related contribution basis?
  There is a strong element of hyprocrisy and muddle in this Bill. It has no place in the redistribution of income in a fair society and is a heavy brake on enterprise. We are entitled to expect from my right hon. Friends the Secretary of State and the Chancellor a rational, comprehensible and transparently moral system for the redistribution of income. The new clause is not enough.
  Mr. Newton: I find myself in the strange position of having had the least equivocal welcome for the new clause from the hon. Members for Birkenhead (Mr. Field), for Ross, Cromarty and Skye (Mr. Kennedy) and for Roxburgh and Berwickshire (Mr. Kirkwood), with whom I might, if I dare, couple my hon. Friend the Member for Suffolk, South (Mr. Yeo) and, very nearly, my hon. Friend the Member for Slough (Mr. Watts). I hope that they will not think that I am doing too much damage by adding them to the company in which they have found themselves this afternoon. Having said that, and recognising that several cautionary remarks have been made and questions asked by many other of my hon. Friends, I want to thank them for the balanced and constructive way in which they put their points.
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  I agree with the hon. Member for Birkenhead that it is nonsense to put forward the proposition that the new clause is directed towards promoting low-paid employment at the expense of other forms. The Government's proposition is that there has been an unduly heavy additional Government burden of tax and national insurance contributions in that part of the labour market which has inhibited employment there. That is not at all the same as saying that it is part of a deliberate plan to stimulate low-paid employment. The hon. Member for Birkenhead made that point particularly well in an intervention.
  The hon. Member for Derby, South (Mrs. Beckett) asked me about the position of people with two part-time jobs. They will each be dealt with separately to determine the initial liability, but when all annual contributions are received in Newcastle the enhancement which we intend as part of the other arrangements to which I referred will be applied if appropriate. I can assure the hon. Lady that people with two or more jobs will not be in any way disadvantaged in comparison with those earning the same amount in a single job.
  The hon. Lady asked about earnings factors. As I hope I said, we intend to use a formula to boost earnings which will ensure that the earnings factor broadly reflects actual earnings. If it errs at all, it is likely to err on the side of generosity to the beneficiary. The only people who might lose a small amount of additional component will be those with a few weeks of lower rate contributions where their normal earnings were generally considerably higher. Even they would receive additional component commensurate with the contributions paid. I hope that that gives her some reassurance on the points that were causing her concern.
  My hon. Friend the Member for Tatton (Mr. Hamilton) referred to his new clause 23 and the consequences of the changes in the limits in the middle of the year. As he explained, his new clause is aimed at company directors whose annual earnings period would straddle any change in contribution liability arising from a mid-year change in the employers' upper earnings limits. Because of that, the actual contributions required from them could be significantly affected by the precise method chosen for applying a mid-year change in liability. We are not yet in a position to say what that method will be, although I know that directors and others similarly placed will want to know soon how they will be placed personally. The Institute of Directors, as is well known to those who read newspapers, wrote to my right hon. Friend the Secretary of State last week. He has agreed to meet the institute to discuss this and wider points arising from the Budget changes in national insurance contributions. I hope that my right hon. and hon. Friends will be encouraged generally that that meeting it to take place and at which some of the points they raised will be discussed.
  I assure my hon. Friend the Member for Tatton that it will not be necessary to amend the Bill to implement whatever solution is reached in consultation with those affected on the issue that is the subject of new clause 23. There are already sufficient powers to make the necessary changes to regulations, both in the existing primary legislation and in the transitional provisions in the Bill. I hope that that response to his constructive remarks will reassure him.
  Much has been said about the contributory system. My hon. Friend the Member for Halifax (Mr. Galley) raised the matter first, and it was echoed by my right hon. Friend the Member for Worthing (Mr. Higgins) and my hon.

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  Friends the Members for Northampton, South (Mr. Morris) and for Kensington (Sir B. Rhys Williams), who dealt with the matter in his own inimitable wide-ranging style. Many of the issues raised about the contributory system, especially by my hon. Friend the Member for Kensington, such as the inter-relationship with taxation and the future of the social security benefit and taxation systems, range too wide for me to hope to respond to them in such a debate. Indeed, it would not be appropriate for me to seek to respond to them while the Government are considering the conclusions of the social security review, and as my right hon. Friend the Chancellor of the Exchequer announced in his Budget speech proposals to introduce a Green Paper on personal taxation. However, I shall ensure that my right hon. Friends the Secretary of State and the Chancellor have their attention drawn to the remarks made during the debate.
  Exaggeration was displayed in suggestions that the changes in the new clause would result in a dramatic erosion of the contributory system and suddenly change the world overnight. My right hon. Friend the Chancellor made it clear in the Budget that the essential features of the contributory principle would be preserved. We have certainly sought to do that regarding people's benefit rights through our amendments and my assurances to the hon. Member for Derby, South.
  Mr. Higgins: What are the essential features of the contributory system?
  Mr. Newton: I am thinking of the fact that people acquire benefit rights by the payment of contributions, especially employees' contributions. I have read what my right hon. Friend the Chancellor said to the Treasury Select Conunittee when he gave evidence to it about this matter. I would not want to pretend that the argument can be presented completely in black and white. However, the present system already involves redistribution from the better paid to the lower paid, for example, by giving 100 per cent. pension return on earnings up to the lower earnings limit, but only 25 per cent. pension return on earnings between the lower and upper earnings limits. Our proposal merely extends the redistribution which already takes place within the national insurance system.
  My right hon. and hon. Friends may not regard that as good, and that is a matter for argument. I think that the move is sensible as part of our package. However, it is straining the point to suggest that there has been a dramatic change compared with the structure of the national insurance system which has existed since the move to earnings-related contributions nearly 10 years ago which suddenly calls into question the basis of the contributory principle in an entirely new way. I hope that my right hon. and hon. Friends will reflect a little on that before they suggest that the change is as great as they implied in their speeches.
  Mr. Higgins: I am sorry to interrupt again, but my hon. Friend has not answered my question. What are the essential features of the contributory principle for employers' contributions?
  6.15 pm
  Mr. Newton: I hoped that I had at least answered my right hon. Friend's question by implication, but I shall now seek to answer it more explicitly. There has been no clear contributory principle for employers' contributions for a
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  considerable time. I do not believe that the proposals in the new clause dramatically change that. I have the greatest respect for my right hon. Friend and hope that he will not think that I seek to dodge his question. I am not sure whether he has said before—many of my hon. Friends on many previous occasions have done—that the contributory principle is now virtually meaningless. If they hold that view, I hope that they will accept that the proposals make no great difference.
  The nature and extent of the contributory principle. the weight placed on it in the past, and the extent to which it was changed in the mid-1970s are matters of argument. However, as a matter of record, I wish to state that the Government did not propose, and do not see these changes as marking, a dramatic departure from previous principles.
  Mr. Michael Morris: I am listening carefully and understanding my hon. Friend, but does he accept that this is the first time that an upper limit has been removed, and that that is a significant change? We are the only member of the European Community to have removed an upper limit. That is surely a significant change.
  Mr. Newton: I do not wish to make heavy weather of this matter. I am not suggesting that this is not a significant change. The Government have placed a proposal before the House, which is significant for various reasons, including those that I made clear in my initial speech. However, I question whether it is a significant change in the basic principles of the national insurance system as it has been operating since the move to earnings-related contributions nearly 10 years ago. I assure my hon. Friend the Member for Halifax that contracting-out rebates will remain as at present, that is, 2·15 per cent. of earnings between the lower and upper earnings limits for employees, and 4·1 per cent. for employers. To have extended the rebates above the upper earnings limit would have been to change the contracting-out agreement when the present pension scheme was put in place.
  I am anxious not to delay the House unnecessarily but to deal with as many specific points as I can. I assure my hon. Friend the Member for Tatton that the amount of additional administrative burden for employers will not be as significant as he suggests because we shall provide them with tables designed to make their task little or no more difficult than the existing system.
  Some of my hon. Friends expressed reservations about the effects on higher paid employment. I echo the comments of my hon. Friend the Member for Slough (Mr. Watts) in explicitly recognising that this is a package. My right hon. and hon. Friends would rightly think me foolish if I were to attempt to meet all their points by dismissing them or pretending that they had no validity. Obviously there will be problems about some aspects of the new margins between the different bands of earnings. However, they must be considered against the significant problems of the existing huge cliff edge that arises at the existing lower earnings limit.
  Some firms with heavy concentrations of highly paid employees may not be happy and may suffer some difficult consequences from the rise in national insurance contributions. However, I am certain that many more firms which employ millions more people and must also compete in foreign markets—often in even more competitive markets where sheer skill and ability are not as much part of the sales package—will gain a

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  significant advantage through reductions in labour costs as part of the package. I do not run away from saying that there are disadvantages, but they must be weighed against the advantages in the package as a whole.
  Within that perspective, the measures deserve the support of the House. They will help to create new employment, especially in areas where opportunities have been most difficult to find, and they will improve the health and strength of the British economy while at the same time bringing important additional social help to those in lower-paid employment who have an especially strong claim on our help. I hope that we shall have the support of the House in carrying through the proposals.
  Question put and agreed to.
  Clause read a Second time.
  Question proposed, That the clause be added to the Bill.
  Mr. Higgins: I must express some doubts as to whether we should take the step that the Question suggests. Before we decide to add the clause to the Bill, may I ask my hon. Friend, in relation to his statement that tables will be provided to show that the changes in this new clause will be easy to administer, whether that will take account of the point about people working overtime. How will the tables cope with that?
  Another point about which I have grave doubts relates to the position of employers who are contracted in or contracted out of the scheme. Is it the case that those who have been contracted out will effectively be paying at the contracted-in rate? If that is so, what will my hon. Friend do about it?
  Mr. Newton: It is entirely right that my right hon. Friend should have pressed me about the tables, since I acknowledged in my remarks that there was some validity in his comments about the effect of having several cliff edges at points on the incomes scale, which I believe is what he has in mind when referring to overtime. I thought I had acknowledged that I do not dismiss the point, but that it must be put in the context of the substantial disadvantages of the existing lower earnings limit, with the especially acute cliff-edge effect that it has on people earning small amounts of additional money.
  The tables with which we shall provide employers to operate the new proposals will be related, as the existing tables are, to what employers should pay on the given amount of earnings in one week. That will necessarily be the amount of contributions due on the total earnings, including overtime. That is how the present system works. The employer looks at the tables to determine from the earnings of his employee in any week what the contribution should be, and I envisage no change in the method of operation.
  Mr. Higgins: I am grateful to my hon. Friend for clarifying that point. Is it true, as has been asserted in evidence and elsewhere, that those who work overtime may discover that, under this scheme, they receive less as a result of working overtime than if they do not?
  Mr. Deputy Speaker (Mr. Ernest Armstrong): Order. I hope that the Minister will reply briefly, because in no way must this be an extension of the debate on the
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  Question, That the clause be read a Second time. We are talking about adding the clause to the Bill; we must not discuss the principle of the new clause.
  Mr. Newton: I should be grateful for your indulgence for a moment or two, Mr. Deputy Speaker, because I would not wish to end the debate in a way that denied my right hon. Friend the opportunity to press me on the points that he wished to raise. I must acknowledge—I thought I had already done so twice—that I do not dismiss my right hon. Friend's point, but I wish to place it in context. Just as it is acutely the case, in relation to the present lower earnings limit, that a small increase in earnings can precipitate a large increase in deductions, so to a lesser extent that must necessarily be the case with the other steps being introduced into the system. But at each of those steps, the effect will be less than it is at the existing lower earnings limit. Therefore, to some extent, it will have the effect that my right hon. Friend mentioned. Clearly, that cannot be denied, and I have no intention of trying to deny it.
  Nevertheless, taking account of the large anomaly in the present system, what we are doing to reduce that anomaly, together with the other advantages of the broad reduction in national insurance contributions for the lower paid in the package as a whole, means that the disadvantage to which my right hon. Friend drew attention is worth having. It will also be true that, whatever may be the effect at those margins, the national insurance contributions being paid will still be lower than those which would be paid at the same levels of earnings at present because of the overall reduction in national insurance contributions.
  I hope that I have answered my right hon. Friend's query on that point, but whether I have satisfied him is another matter altogether.
  Mr. Frank Field rose——
  Mr. Deputy Speaker: Order. What I feared is about to happen, and we are having an extension of the debate on the Second Reading of the clause.
  Mr. Newton: It sounds as though I have exhausted your indulgence, Mr. Deputy Speaker. I am grateful for it, in that it helped me to assist my right hon. Friend. I continue to believe, as I have said on several occasions, that, taking the advantages and disadvantages together, there is a strong case for what the Government propose in the new clause, and I hope that the House will accept it.
  Question put and agreed to.
  Clause added to the Bill.

New Clause 7

  MEDICAL EVIDENCE
  'In section 17 of the Social Security and Housing Benefits Act 1982 (provision of information: general) —the following subsection shall be inserted after subsection (2),
  "(2A) The Secretary of State may by regulations direct

  (a) that medical information required under subsection (2) above shall, in such cases as may be prescribed, be provided in a prescribed form;

  (b) that an employee shall not be required under subsection (2) above to provide medical information in respect of such days as may be prescribed in a period of incapacity for work.". '.—[Mr. Newton.]

  Brought up, and read the First time.
  Mr. Newton: I beg to move, That the clause be read a Second time.
  Mr. Deputy Speaker: With this it will be convenient to discuss Government amendment No. 22.
  Mr. Newton: The purpose of this clause is to introduce a new subsection into section 17 of the Social Security and Housing Benefits Act 1982 so that rules can be made about medical evidence for statutory sick pay purposes.
  To he entitled to statutory sick pay an employee has to be incapable of doing work which he can be reasonably expected to do under his contract of service by reason of illness or disablement. This requirement is similar in many respects to the incapacity condition which applies to state benefits such as invalidity benefit and severe disablement allowance. To establish entitlement to these state benefits the sick person is required by regulations made under the Social Security Act 1975 to produce medical evidence of incapacity for work. A standard form of doctor's statement is specified by regulations for use by general medical practitioners and rules about its completion are set down.
  There are at present no parallel provisions applying to statutory sick pay. An employer is required to decide whether an employee is entitled to receive statutory sick pay and can ask him to provide any reasonable evidence in support of that entitlement. The nature of that evidence is not specified. The employer can decide what evidence he will accept. This is only proper in relation to a scheme which employers have the prime responsibility for administering.
  In practice, many employers ask an employee who is ill and away from work for any length of time to provide medical evidence. The Department supplies doctors with a standard form of statement. known in the trade as form Med 3, to issue free of charge for social security and statutory sick pay purposes. The clause is intended to enable the form's use for statutory sick pay purposes to be based on prescribed enforceable rules instead of the informal administrative arrangements that have existed until now.
  We intend that the regulations to be made under the powers being sought in the clause will be similar to the regulations about medical evidence for social security benefit purposes. We have consulted the British Medical Association about our proposal and we have its concurrence.
  Amendment No. 22 is simply a technical amendment providing that this provision and the statutory sick pay entitlement provisions will come into force together on 6 April 1986.
  6.30 pm
  Mrs. Beckett: In the light of the extension of statutory sick pay, about which, as the Minister knows, we have expressed some reservations, it seems logical that, instead of employers just deciding ad lib what evidence they require, there should be some standard procedure and forms. In that sense, we are prepared to accept this clause.
  Question put and agreed to.
  Clause read a Second time, and added to the Bill.

New Clause 7

  POWER TO EXTEND PNEUMOCONIOSIS ETC (WORKER'S COMPENSATION) ACT 1979
  'In the Pneumoconiosis etc. (Workers' Compensation) Act 1979—

  (a)in section 1—

  446

  at the end of subsection (3) there shall be added the words "and any other disease which is specified by the Secretary of State for the purposes of this Act by order made by statutory instrument"; and

  the following subsection shall be added. after subsection (4)—

  "(5) No order shall be made under this section unless a draft of the order has been laid before, and approved by a resolution of, each House of Parliament."; and

  (b)in section 4(4)—

  the words "other than a disease specified in an order under section 1 above," shall be inserted after "applies," in paragraphs (a) and (b); and

  the following paragraphs shall be added after paragraph (b)—

  "(c) in the case of a person disabled by a disease specified in an order under section 1 above, means the date on which disablement benefit first became payable to him in respect of the disease or the date of the coming into force of the order, whichever is the later;

  (d) in the case of the dependant of a person who, immediately before he died, was disabled by a disease specified in an order under section 1 above, means the date of the deceased's death or the date of the coming into force of the order, whichever is the later.".'—[Mr.Peter Bottomley.)

  Brought up, and read the First time.
  The Parliamentary Under-Secretary of State for Employment (Mr. Peter Bottomley): I beg to move, That the clause be read a Second time.
  Mr. Deputy Speaker: With this it will be convenient to take Government amendments Nos. 139 and 107.
  Mr. Bottomley: We seek to be able to extend by order, the list of diseases in the Pneumoconiosis etc. (Workers' Compensation) Act 1979.
  In March 1984 the Secretary of State for Social Services accepted a recommendation of the Industrial Injuries Advisory Council that two additional asbestos-related diseases should be covered by the industrial injuries scheme.
  We acknowledge that the Pneumoconiosis etc. (Workers' Compensation) Act 1979 should also be extended. The Act does not at present provide for adding to the list of diseases. The purpose of this amendment is to put that right.
  The amendment will not itself add these two further diseases to the list given in the Act. It will enable the Secretary of State to extend the list by making an order under the Act after it has been laid in draft and approved by a resolution of each House of Parliament.
  I commend the new clause to the House.
  Mrs. Beckett: We do indeed welcome the provision that the Government are making. It seems sensible to allow additions of this kind to be made as medical reactions change.
  Question put and agreed to.
  Clause read a Second time, and added to the Bill.

New Clause 8

  HOUSING BENEFITS—SUBSIDY
  In section 32 of the Social Security and Housing Benefits Act 1982 (subsidy)—

  the following paragraphs shall be substituted for paragraphs (a) and (b) of subsection (2)—

  (a)in the case of an authority granting rebates or allowances under the statutory scheme during that year or any part of it, the rebates or allowances so granted, subject to any prescribed deductions;

  (b)in the case of an authority granting rebates or allowances under a local scheme during that year or any part of it, the rebates or allowances which, if the local scheme had not been in force, would have been granted by the authority under the statutory scheme during that year or that part of it, subject to any prescribed deductions; and";

  (a)at the end of that subsection there shall be added (but not as part of paragraph (c) the words 'but shall be subject, in so far as it falls to be calculated in accordance with paragraph (a) or (b) above, to deduction of any amount which the Secretary of State considers it unreasonable to meet out of money provided by way of subsidy under subsection (1) above'; and

  (b)at the end of subsection (3) there shall be added (but not as part of paragraph (c)) the words "after any deduction has been made by virtue of subsection (2) above or an order under that subsection".

  (2)The amendments made by subsection (1)(b) and (c) above shall be deemed to have come into force on 1st April 1985.'. —[Mr.Whitney.]

  Brought up, and read the First time.
  The Parliamentary tinder-Secretary of State for Health and Social Security (Mr. Ray Whitney): I beg to move, That the clause be read a Second time.
  Mr. Deputy Speaker: With this it will be convenient to take Government amendment No. 138.
  Mr. Whitney: The reason for this new clause is very simple: the Secretary of State needs the power to prevent exploitation of the arrangements for and the legislation governing the housing benefit subsidy scheme. It is, of course, regrettable that we should find it necessary to introduce this new clause.
  A concerted effort has been made by one local authority, Sheffield, to increase its revenue at the expense of the housing benefit subsidy system. I will not delay the House with the sorry details of the various schemes which the council has devised or the steps the Department has taken to prevent this abuse. But the House will recall from its consideration of the 1984 subsidy order and the subsequent amendment that we had to make to it that Sheffield's various schemes have involved charging higher rents to tenants on housing benefit than are charged to tenants not receiving the benefit. The subsidy implications are obvious. I do not want to comment further on Sheffield's current scheme, because my Department's refusal under the terms of the 1984 subsidy order to pay the additional subsidy claimed by the council is now the subject of legal proceedings.
  However, we made it clear when last year's subsidy order was discussed that we are not prepared to tolerate this kind of ploy. I am afraid that the efforts that Sheffield has continued to make to exploit the subsidy system have forced us to conclude that the Secretary of State needs the power to refuse to pay part of a subsidy claim in these
  448
  circumstances. We really cannot put up with a time-wasting cat-and-mouse game in which an authority tries to find loopholes in the subsidy arrangements in order to exploit them. Nor do we intend to waste the House's time in making and amending subsidy provisions to close each possible loophole.
  The new clause will not alter the existing arrangements whereby the Secretary of State will pay benefit subsidy on the basis of rebates and allowances granted by authorities under the housing benefit scheme. We shall continue to list the items that will always be excluded from benefit subsidy—such as rent-free weeks awarded to tenants—in the subsidy order, so that authorities know where they stand. We have, in fact, taken the opportunity to enable the subsidy order to be drafted in a much more straightforward way, so far as these exclusions are concerned, than at present. Although the new power to make an order will have exactly the same effect as the existing power, it should mean that the subsidy order will be more comprehensible. That is certainly to be hoped. However, the amendment will also give the Secretary of State a new power to exclude items which it is clearly not reasonable to meet out of the money voted by Parliament for the housing benefit scheme. I assure the House that this power will not be used lightly, but it will be used to prevent blatant attempts at exploitation of the subsidy arrangements from succeeding.
  Amendment No. 138 is consequential.
  Mrs. Beckett: I listened with interest to what the Minister had to say. We recognise that the Government have been upset by the activities of, in particular, Sheffield. If one wanted to be unkind, one could say that, as in the previous debate, part of what the Minister was suggesting was that it was convenient to be able to do things without the inconvenience of having to keep bringing orders and Bills before the House of Commons.
  lthough the Minister identified correctly the fact that there has been a need over the past couple of years to make changes in subsidy orders because of changes which local authorities have made in their schemes, there was, if I heard his remarks correctly, one important omission, and I hope that it was an inadvertent one.
  At present, because the changes to which the Minister referred have to be made by subsidy order, the Government are under a statutory duty to consult local authority associations about the ways in which they propose to meet any changes that they might decide needed to be made. But this does not always operate in quite the way that we might hope, to put it mildly.
  To take one recent example, when the Housing Benefits Amendment (No. 4) Regulations were brought before the House, the local authority associations were given five days to respond to the regulations without even being sent a draft of them, which might be thought to have made the situation even more difficult. Indeed, they have taken the Government to court about the matter. It is an interesting comparison that the Government were given seven days by the court to respond to the complaint and were unable to do so within that time. Indeed, I understand that they have not responded to it so far and have on a number of occasions sought to have the matter adjourned on the ground that they cannot possibly respond within less than a few weeks to the sort of arguments that they expect local authority associations to respond to within five days.

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  The point I am making is that, even with the statutory duty to consult the local authority associations written into the legislation, the Government manage to honour it more in the breach than in the observance. If it is the case—as it appears to be from this new clause—that, because we are no longer discussing orders but powers which the Secretary of State will have in perpetuity, the associations will not have the benefit even of that statutory duty, ineffective though it may be, that is a matter of very considerable concern to those associations and indeed to the Opposition.
  I therefore ask the Minister to give an assurance that it was an inadvertent error on the part of the Government that they omitted from the Bill the statutory duty to consult local authority associations, and that they will seek to amend it at a later stage.
  Mr. Whitney: The hon. Lady has sought to take the debate a good deal further than it should go. Of course we have followed and will always follow the provisions laid down in the housing benefits regulations and other appropriate regulations relating to consultation with local authorities. I shall certainly not be drawn into the issues that the hon. Lady has sought to raise regarding the Housing Benefits Amendment (No. 4) Regulations, which as she says, have been the subject of judicial action. I emphasise the essential requirement of this measure and I hope that the hon. Lady will feel able to agree that it is in the interest of the House that the housing benefits regulations, as agreed by the House, should not be the subject of the sort of time-wasting cat-and-mouse game which has been inflicted on the taxpayer by the Sheffield council.
  I commend the new clause to the House.
  Mrs. Beckett: With the leave of the House Mr. Deputy Speaker, I may say that this is completely unsatisfactory, and I am quite certain that the local authority associations will not only be dissatisfied but will not let the matter rest there. It would have served the Minister better, if he had been prepared to acknowledge that the local authority associations should be consulted about these matters. If consultations were not necessary, we should not be debating the 50 sets of Government amendments and new clauses that we are debating today.
  Question put and agreed to.
  Clause read a Second time, and added to the Bill.

New Clause 9

  PENSIONS AND GRATUITIES FOR MEMBERS OF CERTAIN BOARDS
  (1) The following subsection shall be inserted after subsection (3) of section 12 of the Betting, Gaming and Lotteries Act 1963 (Horserace Totalisator Board)—
  "(3A) The Board may pay such pension or gratuity to or in respect of any member of the Board as the Board may, with the approval of the Secretary of State, determine .".

  (2) The following subsection shall be inserted after subsection (6) of section 24 of that Act (Horserace Betting Levy Board)—
  "(6A) The Levy Board may pay such pension or gratuity as the Board may, with the approval of the Secretary of State, determine, to or in respect of the chairman and any other members appointed by the Secretary of State.".

  (3) The following paragraph shall be inserted after paragraph 5 of Schedule 1 to the Gaming Act 1968 (provisions as to Gaming Board for Great Britain)—
  450
  "5A. The Secretary of State may pay such pension or gratuity to or in respect of any member of the Board as the Secretary of State may, with the consent of the Treasury, determine .". '—[Mr.Whitney.]

  Brought up, and read the First time.
  Mr. Whitney: I beg to move, That the clause be read a Second time.
  Mr. Deputy Speaker: With this, it will be convenient to take Government amendments Nos. 140 and 108.
  Mr. Whitney: The Bill makes important improvements in various aspects of the pensions provisions. The purpose of the new clause is to fulfil a clear commitment to provide occupational pensions for the chairmen of three boards — the Horserace Betting Levy Board, the Horserace Totalisator Board and the Gaming Board for Great Britain—for which my right hon. and learned Friend the Home Secretary is accountable. Successive Governments, since at least 1978, have agreed that it is unfair to ask people to take on the chairmanship of these boards without any prospect of receiving a pension. The Bill provides an opportunity to put this straight. I hope that the House will agree that the opportunity should be taken, and will approve the new clause.
  The position at present is that the relevant statutes—the Betting, Gaming and Lotteries Act 1963 and the Gaming Act 1968—provide for the members of the tote board, the levy board and the gaming board to receive remuneration, but they say nothing about pensions for members. The same statutes provide for employees of these boards to receive pay and pensions. We believe—and I do not think there can be much quibble about this —that the important obligations which are attached to the chairmanship of these boards, together with the heavy commitment of time which these jobs demand, make it inappropriate for the legislation to preclude the payment of a pension. The task of running the tote's pool betting and bookmaker business demands a full-time commitment. The chairmanship of the levy board and of the gaming board each calls for three days a week.
  Another consideration which points to the unfairness of the present position is the long service which the office holders are likely to give. All three posts require a close knowledge of the way betting or gaming operates on the ground in this country. So experience is particularly valuable, and tends to lead to people being asked to continue in office for more than one term of appointment. The present chairmen of these boards have already served a total of about 20 years. I hope that the House will agree that with posts calling for this sort of commitment, it is only reasonable that the post should be pensionable. I should perhaps make it clear that, although the new clause provides for the possibility of pensions being paid to board members other than chairmen, it is not envisaged at present that pensions would be paid to other board members, as their commitment is far less than that required of the chairmen.
  Under the new clause, the arrangements for determining the pension, and paying for it, would be the same as apply now for the salaries of the members of the boards concerned. It will be for the tote and levy boards to determine what, if any, pension they believe is appropriate for the chairmen of the respective boards, but their determination must be approved by the Secretary of State. There will be no call upon the public purse because the funds will be found, as with all the other expenses

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  connected with these boards, from the boards' own resources. With the chairmanship of the gaming board, it will be for the Secretary of State, with Treasury consent, to decide upon pension, and public funds would be involved in the payment of any pension appropriate for this post.
  We believe that these provisions remove an unfair and inapt restriction on the terms and conditions of the chairmen of three significant boards while retaining an appropriate mechanism of control, and I ask the House to support the new clause.
  Mrs. Beckett: This is an extraordinary clause to find in a Bill of this nature, and it is perhaps a little offensive.I understand from the Minister of State, Home Office, that he, rather than the Under-Secretary, is to blame for this being included in the Bill, and that any strictures that we wish to hear should be heaped upon his head. I think that they should be so heaped.
  At a later stage—I do not wish to go out of order but it is appropriate to mention this—we shall be depriving 1,100 people with invalidity pensions of £7·50 a week because of the changes that the Government are making which will affect some people who are receiving the maximum amount of invalidity allowance. For the Government to choose, with a remarkable sense of priorities, in the same Bill to give pensions to these three gentleman is astonishing. The three gentlemen are respectively Lord Allen, a former permanent secretary at the Home Office, Sir Ian Trethowan, whose name may be familiar to the House, and Sir Woodrow Wyatt, who is no doubt receving a pension for his services to the Labour party.
  6.45 pm
  It is extraordinary that the Government should bother to introduce this provision. It is wholly inconsistent with the many remarks that the Prime Minister has made recently about how people should be encouraged to make their own provision for pensions. I assume that Lord Allen has some pension provision as a former permanent secretary at the Home Office, and that Sir Ian Trethowan has a pension from his public service. Sir Woodrow Wyatt was never short of a penny or two, even before he started to write columns in the newspapers. All these gentlemen can more than afford to provide a pension for their retirement.
  The Minister said that some of these gentlemen had been in the service for nearly 20 years. Will this clause have any retrospective effect, and is it therefore intended to provide a more substantial pension on top of those that two at least already enjoy? It has been suggested in the press today that the Government intend to abolish the state earnings-related pension scheme, thereby setting people free to provide their own pension. Providing pensions for these three persons is extraordinary timing by the Government.
  Mr. Whitney: I repeat that this measure has been agreed for some time, and certainly from 1978, when the Labour Government were in office. This measure will make significant improvements in many pensions. Therefore, it is not totally inappropriate that the new clause should be part of this Bill. The details and arrangements for the pensions will be the responsibility of the boards.
  Question put and agreed to.
  Clause read a Second time, and added to the Bill.

New Clause 10

  MANAGERS OF SCHEMES
  '(1) The Secretary of State may by regulations provide who is to be treated as a manager of an occupational pension scheme for any of the purposes—

  (a) of the Social Security Acts 1975 to 1985; or

  (b) of the Social Security Act 1973.

  (2) Section 166 of the Social Security Act 1975 shall apply to the power to make regulations under subsection (1) above as it applies to powers to make regulations under that Act.

  (3) Regulations made under this section shall be subject to annulment in pursuance of a resolution of either House of Parliament.

  (4) In this section "occupational pension scheme" has the meaning assigned to it by section 66 of the Social Security Pensions Act 1975 2.'.—[Mr. Whitney.]

  Brought up, and read the First time.
  Mr. Whitney: I beg to move, That the clause be read a Second time.
  Mr. Deputy Speaker: With this it will be convenient to take Government amendments Nos. 100 and 101.
  Mr. Whitney: This is essentially a technical and clarifying clause that gives power to prescribe who the managers are in a pension scheme which is not set up under trust law. Various duties under this Bill and earlier Acts fall to the trustees of a pension scheme or, in the case of a scheme not set up under trust and therefore having no trusteeism, to its managers. Almost all private sector schemes are set up as trusts—they need to do so to gain tax approved status—but the statutory schemes for public service employees, and a few others, are not. In these cases, it will not always be clear who should be treated as the manager and this would be particularly important if, for example, such a scheme did not comply with requirements to disclose information to its members and the members wished to enforce these requirements.
  The amendments are consequential on the new clause.
  Mr. Michael Stern: I accept what my hon. Friend says, but there has been a proliferation of pension schemes, and many are written under somewhat odd trustees, particularly smaller schemes. Many of us hope that that proliferation of schemes will be greatly increased by legislation to be introduced at a later date. Therefore, should not my hon. Friend take the power, at the same time as he is taking the power to define who are managers of these schemes, to define who are the trustees of these schemes? Sometimes this is not entirely clear. No amendment is called for at this stage, but I hope that my hon. Friend will bear this point in mind in case an amendment needs to be introduced at a later date.
  Mr. Whitney: I shall consider carefully my hon. Friend's point, because I know that he has great knowledge of these matters. My instinctive reaction is to go carefully. As he will recognise, while we need appropriate safeguards, we also need to avoid overburdening schemes and pension trusts unnecessarily.
  Question put and agreed to.
  Clause read a Second time, and added to the Bill.

New Clause 11

  MISCELLANEOUS AMENDMENTS RELATING TO STATUTORY SICK PAY
  'The enactments specified in Schedule [Miscellaneous amendments relating to statutory sick pay] shall have effect subject to the amendments there specified.'.—[Mr.Whitney.]
  Brought up, and read the First time.
  Mr. Whitney: I beg to move, That the clause be read a Second time.
  Mr. Deputy Speaker: With this new clause it will be convenient to discuss Government amendments Nos. 24, 105 and 106.
  Mr. Whitney: This new clause gives effect to the new schedule on miscellaneous amendments relating to statutory sick pay. If it is for the convenience of the House, I will refer briefly to the proposals in the new schedule, but, if the House wishes, I will go into more detail. The proposals are no more than a tidying-up operation to correct defects or ambiguities which have been identified in the existing legislation.
  Paragraph 1 of the proposed schedule provides for an amendment to be made to the Attachment of Earnings Act 1971 so that payments of statutory sick pay are treated as earnings for the purpose of that Act. Paragraph 2 closes a technical loophole whereby we might have been unable properly to determine the date of maternity allowance claims. Paragraph 3 brings severe disablement allowance into line with contributory sickness and invalidity benefit by providing that the allowance cannot be paid at the same time as statutory sick pay.
  Paragraph 4 relates to a possible ambiguity in section 3(6) of the Social Security and Housing Benefits Act 1982 relating to the linking period. As presently drafted, it creates the possibility of uncertainty about the liability of a new employer to pay for any period of sickness before the effective date of employment. Our proposal puts beyond doubt that in these circumstances the period of entitlement begins with the first day of incapacity in the currency of that employment contract.
  Paragraph 5 relates to the repeal of provisions regarding overpayments. When we introduced the statutory sick pay scheme it was intended that regulations would be laid to enable overpaid state incapacity benefits to be recovered from statutory sick pay, and vice versa, if payments under one scheme were erroneously paid because entitlement was properly due under the other scheme. However, legislating for that concept proved too complicated and in the event it was decided that employers would be responsible for recovering the statutory sick pay they had overpaid, and that the Department would apply existing rights of recovery of state benefits if incapacity benefit had been paid when statutory sick pay was payable instead. The provisions in the 1982 Act have, therefore, been made redundant and it is desirable that they should be repealed.
  Paragraph 6 relates to the definition of an employer. One consequence of the present definition is that it has brought into SSP people who come to work in Great Britain but who technically remain non-residents either in Great Britain or in a member state of the EC. There is no liability for national insurance contributions by or in respect of such employees for the first 52 weeks of their stay in Britain. It was never intended that such people would be entitled to SSP. Amendment No. 24 will restore what was intended.
  454
  The other two amendments are consequential. As I have said, this is a tidying-up operation to correct defects and ambiguities in the current legislation.
  Mrs. Beckett: I wish to make only one brief comment since we recognise that these are technical and tidying-up amendments. I note with interest that the Minister is dealing with the recovery of overpayment of statutory sick pay, but I note with sorrow that it has still not proved possible for the Government to do anything about people whose SSP has been underpaid and who have to take their own cases to court if they want to get the money.
  Question put and agreed to.
  Clause read a Second time, and added to the Bill.

New Clause 13

  ENTITLEMENT OF MARRIED WOMEN TO CATEGORY A RETIREMENT PENSIONS
  '(1) Paragraph 11 of Schedule 1 to the Social Security Act 1979 (by virtue of which the additional conditions for the entitlement of a married woman to a Category A retirement pension imposed by section 28(2) of the Social Security Act 1975 continue to apply in relation to any woman who attained pensionable age before 6th April 1979, notwithstanding the repeal of that subsection) is hereby repealed
  Subsection (1) above shall be deemed to have come into force on 22nd December 1984.'.—[Mr.Newton.]
  Brought up, and read the First time.
  Mr. Newton: I beg to move, That the clause be read a Second time.
  Mr. Deputy Speaker: With this new clause it will be convenient to discuss Government amendments Nos. 21, 99 and 103.
  Mr. Newton: I hope we can take it that the strictures of the hon. Member for Derby, South (Mrs. Beckett) about an earlier clause, whose purpose was to extend pension rights to certain individuals, will not be repeated in relation to this new clause which extends pension rights to an estimated 25,000 married women who were previously disadvantaged by the residual effects of something, which I shall not attempt to explain in too much detail, known as the married women's half test — namely, an additional contribution condition which married women had to fulfil over and above the normal national insurance conditions before they could enjoy a pension in their own right. That additional condition entailed them having paid the relevant amount of national insurance contribution, or having received the relevant amount of credits, for half the years between the time at which they were married and the time at which they reached age 60.
  To a significant extent that rule was abolished in 1979 for all women reaching age 60 after 6 April 1979, but it has continued, and will continue, to apply, unless the amendments are passed, to women who reached age 60 before that date. In practice, the vast majority of such women will not now be suffering any financial disadvantage, because they will have picked up what are known as category B retirement pensions on their husbands' insurance when their husbands retired, but there are still some who may be disadvantaged. Most of them, because their husbands have not yet reached age 65, can receive neither a pension on his insurance nor the pension to which they would otherwise be entitled on their own insurance.

  455
  As I said, we estimate that there are 25,000 women in that category, together with some minor categories that I shall not attempt to cover in detail. Having reviewed the matter, and considered again the European Community's equal treatment directive and its possible application, we have decided that it is proper to seek to abolish the half test for all those women to whom it still applies, with effect from the date on which the directive came into effect —22 December 1984.
  As soon as the legislation is passed, we shall undertake an exercise to identify and contact all the married women who might gain, with a view to inviting claims from them and paying to them the pension to which they would be entitled. We estimate that in benefit terms that exercise will cost about £25 million in the current financial year, but the cost should fall to nil by the end of the decade.
  I hope that the House will regard this as unequivocally good news. I merely ask that those who have any influence in these matters should seek to encourage the married women who think they may gain not to contact us in a flood, but to rest on the assurance that we shall be getting in touch with them as soon as we can under the proposals that I am putting forward. If they all write to us, it will make it even more difficult to deal with this in an orderly fashion and to get the pensions into payment as soon as possible.
  With those relatively few words, I warmly commend the proposals to the House in the happy spirit of a Minister for Social Security who, for once, is able to stand at the Dispatch Box and propose something which everyone in the House will regard as well deserved and generous.
  Ms. Jo Richardson: I warmly welcome the acceptance by the Government of the need to make this change in the legislation. It is right for the Minister to smile and to feel self-congratulatory. However—and I am not being niggardly—the 25,000 women who have been on the half test, many of whom have contacted hon. Members on both sides of the House with great resentment over the years, may feel that it is a little tardy. Nevertheless, the change will be most welcome. I take this as further evidence that the Government are complying, generally speaking, with all the conditions, implicit and explicit, in the EC directive on equal treatment of both sexes in regard to social security.
  I shall try to ensure that people in my area do not all pound the Minister's door down at the same time, although it will be difficult to stop them. I am not sure whether I heard the Minister aright, but I think he said that he would be advertising or making it known that this change would be made. I hope that he will ensure, for example, that citizens advice bureaux as well as DHSS offices have ample supplies of leaflets. I have had many queries on this subject from CABs, and I know that they would welcome that. It might help if the Minister explained to them that they should ask women to wait until they are contacted. I only hope that it is not too long before they get the money.
  7pm
  Mrs. Edwina Currie: I speak briefly as I have raised one or two of these cases for my constituents. I warmly welcome the comments of my hon. Friend the Minister.
  456
  The abolition of the half test is extremely welcome. It caused great misunderstanding and resentment on the part of older women who are married to slightly younger men. They could not see why they should not be able to claim pensions in their own right, much as their sisters and sisters-in-law have done. Only married women were affected, and women were discriminated against. Indeed, I think that hon. Members on both sides of the House now feel quite strongly about that. But married women were discriminated against, since I understand that the test did not apply if the lady was living with a man and was not married to him. I doubt whether many ladies of that generation went in for that sort of thing, but it still was not right or fair.
  Abolition, presumably at the cost of a comparatively small amount, will not show up much in the social security accounts where we shall spend some £40 billion this year. I warmly welcome the measure, and I look forward to similar statements on other parts of the Bill on other discriminatory elements involving married women.
  Mr. Galley: My hon. Friend the Minister is to be warmly congratulated on getting rid of an injustice that has lasted for some time. It must be a unique experience for him, as the Minister for Social Security in this Government, to be congratulated by the Opposition. I should like to raise one point. If I am well off beam my hon. Friend the Minister will no doubt put me right in his normal polite fashion.
  Having dealt with the half test anomaly, it seems appropriate to mention the difficulties that are now coming to the fore of the one quarter test whereby on a putative working life of 44 years so many women must have paid contributions for a quarter of their working lives. I understand that in many cases married women worked perhaps during the war years and paid a full stamp, and then married and worked only sporadically thereafter, paying half a stamp. I understand that they will not be helped by these proposals, and that the financial effects of helping those caught in the one quarter test are considerably greater. But, as things stand, there are injustices about the operation of the one quarter test.
  Mr. Kirkwood: For the sake of completeness, and as I do not wish to be left out, I wish to speak briefly on what must be a unique occasion, because the Minister has introduced a welcome proposal. We also give our support and congratulations to the Minister—[Interruption.] I speak for the alliance, and have not forgotten my hon. Friend the Member for Ross, Cromarty and Skye (Mr. Kennedy).
  The half test was a pernicious piece of legislation which we have been labouring under for a long time. We will be well rid of it, and I congratulate the Government on the step that they have taken.
  Mr. Newton: What can I say except "Thank you very much." However, I should like to resist the idea that this is a unique occasion and that it is the first time that I have done any good work. Nevertheless, I am grateful to hon. Members on both sides of the House, even if I suspect that some of them have half an eye on the women's vote. I certainly do not want to draw a dividing line between the two halves of the alliance in their appeal. Nor do I want to give my hon. Friend the Member for Derbyshire, South (Mrs. Currie) the impression that I have been frightened

  457
  into action by my desire not to discriminate against her.I have certainly taken note of her representations in the past, and I thank her for her remarks.
  Before coming to the more serious point raised by the hon. Member for Barking (Ms. Richardson), I should say that I will consider further the point raised by my hon.Friend the Member for Halifax (Mr. Galley) about the so-called quarter test. The point is that a minimum pension is 25 per cent., and anything less than that does not qualify. But with home responsibilities protection being available to married women in certain circumstances, 25 per cent. does not seem to be too unreasonable. However,I shall consider my hon. Friend's remarks.
  On the question of publicity, I should point out to the hon. Member for Barking that I have a feeling that the mere announcement has done a good deal. This morning my officials told me that the first inquiry came in seven minutes after I had answered a parliamentary question on Tuesday. We have already had inquiries from citizens' advice bureaux and other quarters. This morning I did an interview, which I presume will be used, with the BBC's "Money Box" programme. It will no doubt give more publicity to that point. We shall be writing to all those—it will be most of them—whom we can identify from the computers. I do not want to promise a very elaborate publicity campaign beyond that at this stage, but we shall want to engage in further general publicity once we have contacted all those whom we can identify, with a view then to contacting those whom we have not been able to identify.
  We shall certainly do everything possible to ensure that those who can claim successfully under the new clause are made aware of their entitlement, and that they are dealt with as soon as possible.
  Question put and agreed to.
  Clause read a Second time, and added to the Bill.

New Clause 17

  DOCK WORKERS
  (1) In section 4(7) of the Social Security Act 1975 (power to make regulations providing for reducing secondary Class 1 contributions in respect of persons to whom section 81 (redundancy payments) of the Employment Protection (Consolidation) Act 1978 does not apply) after the word "reducing" there shall be inserted the words "primary or".

  (2) In regulation 133 of the Social Security (Contributions) Regulations 1979 (reduction of primary Class 1 contributions of dock workers) for "0.35" there shall be substituted "O.25"

  (3) Subsection (2) above shall be deemed to have come

  Mr. Whitney: I beg to move, That the clause be read a Second time.
  Mr. Deputy Speaker (Sir Paul Dean): With this, it will be convenient to take Government amendment No. 136.
  Mr. Whitney: New clause 17 takes us into rather different territory and brings us to the question of contributions by dock workers. The new clause repairs a recently discovered defect in the powers of my right hon. Friend the Secretary of State to vary by regulation the special rate of national insurance contributions paid by registered dock workers.
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  Both mariners and dock workers have their own redundancy schemes. The mariners in question pay a special rate of national insurance contributions because it is abated by that amount which other earners pay through their national insurance contributions into the state redundancy scheme. We have recently discovered that the detailed powers to alter the contributions paid by mariners and dock workers are not the same. I shall not go into the details unless the House wishes me to do so. However, subsection (1) of the new clause repairs the defect, and subsections (2) and (3) make the necessary changes to the existing regulations to reflect what has happened since April 1984, with dock workers paying the same rate as similarly placed mariners.
  As I have said, the new clause, while repairing a defect in the law by removing a discrepancy in the legal provisions affecting similarly placed mariners and dock workers, will not in practice affect the amounts now being paid by dock workers; nor will it require any action by their employers.
  Question put and agreed to.
  Clause read a Second time, and added to the Bill.

New Clause 18

  SPECIAL HARDSHIP ALLOWANCE
  'In section 60 of the Social Security Act 1975 (increase of disablement benefit for special hardship)—

  (a)the following subsection shall be inserted after subsection (1)—
  "(1A) The Secretary of State may by regulations provide that in prescribed circumstances employed earner's employment in which a claimant was engaged when the relevant accident took place but which was not his regular occupation is to be treated as if it had been his regular occupation.";

  (b)in subection (2)(a), for the words "of his" there shall be substituted the words ", except to the extent that it falls to be treated as including such an occupation by virtue of regulations under subsection (1A) above,";

  (c)in subsection (6)—

  after the word "above", in the first place where it occurs, there shall be inserted the words "and to subsection (6A) below,"; and

  for the words "his regular occupation within the meaning of subsection (1) above" there shall he substituted the words "the relevant occupation"; and

  (d)the following subsections shall be inserted after that subsection—

  "(6A) A person who is entitled to an increase of pension under this section by virtue of regulations under subsection (1A) above shall not be paid such an increase for any period during which he would not normally be engaged in full-time employed earner's employment.

  (6B) In subsection (6) above "the relevant occupation" means—

  (a)in relation to a person who is entitled to an increase of pension under this section by virtue of regulations under subsection (1A) above, the occupation in which he was engaged when the relevant accident took place; and

  (b)in relation to any other person who is entitled to an increase of pension under this section, his regular occupation within the meaning of subsection (1) above.".'.—[Mr.Newton.]

  Brought up, and read the First time.
  Mr. Newton: I beg to move, That the clause be read a Second time.
  I hope that this new clause will be regarded as my second bit of good work for the evening. However, the real

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  credit for it belongs to the hon. Member for Derby, South (Mrs. Beckett). I hope that she will get her reward, and that this new clause will become known as the Beckett amendment. It arises from some correspondence that I have had with the hon. Lady. I am afraid that it was accompanied by one or two hiccups, but I am glad to say that it has had a happy outcome in the appearance of this new clause.
  The hon. Lady drew my attention, over a particular case, to the undesirable consequence of one aspect of the provisions governing the payment of special hardship allowance. That allowance compensates people who have suffered a reduction in earnings as a result of an accident at work. The rate of the allowance is based on the difference between present earnings and earnings in the claimant's regular occupation before the accident. An unfortunate effect of that condition is that people without a regular occupation, such as students doing vacation work, cannot qualify for the allowance.
  The new clause allows us to make regulations that will enable certain types of pre-accident work to be prescribed and treated as though they had been regular occupations. Part-time and vacation jobs done by students or school children are examples of what we intend to cover.
  The result will be an increase in benefit of up to £23·36 a week for the small number of disabled people who were injured at work before they had a chance to establish themselves in regular occupation. We shall be concerned primarily with those in full-time work, whatever occupation it may be.
  I am very grateful to the hon. Lady for raising the matter. It is great credit to her that she pursued it in the way that she did. I hope that she is pleased that the Government have been able to respond in this way.
  Mrs. Beckett: I feel that I ought almost to declare an interest in this new clause. I am extremely grateful to the Minister, in particlar for what he has done for the young man to whose case I drew his attention. I also thank him for his kind observations on the case. Fortunately, it is the kind of case which happens infrequently. In this case a schoolboy was properly working on a farm. When he left school he intended to be a full-time farmworker and the farmer had every intention of employing him. That was agreed at his appeal by the commissioner. Only the phraseology of the legislation prevented him from being given what everybody agreed was the compensation that he deserved for an unforeseen accident.
  I am extremely grateful to the Minister for making this change. I am also sure that the young man involved, whose name is Timothy Pallister, will be grateful. So, indeed, will my union, the Transport and General Workers Union. To receive its thanks may be an even more rare event for the Minister.
  Question put and agreed to.
  Clause read a Second time, and added to the Bill.

New Clause 19

  AMENDMENTS RELATING TO PROTECTION OF PENSIONS
  In subsection (1) of section 41A of the Social Security Pensions Act 1975 (protection of earners' pensions), the following words shall be substituted for the words from "than" to the end—

  "(i)in a case where by virtue of paragraph 9(2)(b) of Schedule 16 to the Social Security Act 1973 a pension is provided by way of complete substitute for short service benefit, than the weekly rate of that pension; and

  in other case, than the relevant aggregate.".

  (2)The following subsection shall be inserted after subsection (1B) of that section—

  "(1C) In subsection (1) above "the relevant aggregate" means the aggregate of the following—

  (a)the relevant sum;

  (b)the excess mentioned in subsection (1)(c) above; and

  (c)any amount which is an appropriate addition at the time in question.".

  (3) In subsection (1) of section 41B of that Act (protection of widows' pensions), the following words shall be substituted for the words from "than" to the end—

  (i) in a case where by virtue of paragraph 9(2)(b) of Schedule 16 to the Social Security Act 1973 a pension is provided by way of complete substitute for a widow's pension, than the weekly rate of the pension so provided; and

  (ii) in any other case, than the relevant aggregate.".

  The following subsection shall be inserted after that subsection—

  "(1A) In subsection (1) above "the relevant aggregate" means the aggregate of the following—

  (a)the relevant sum;

  (b)the excess mentioned in subsection (1)(c) above; and

  (c)any amount which is an appropriate addition at the time in question.".

  (5)In subsection (3) of that section, for the words "assumption specified in subsection (4) below" there shall be substituted the words "prescribed assumptions".

  (6)Regulations under that subsection may be framed so as to have effect as from 1st January 1985.'.—[Mr.Whitney.]

  Brought up, and read the First time.
  Mr. Whitney: I beg to move, That the clause be read a Second time.
  Mr. Deputy Speaker: With this it will be convenient to discuss Government amendments Nos. 129, 130, 131, 134 and 135.
  Mr. Whitney: With this new clause we enter the mysterious world of franking. Anybody who takes a regular interest in occupational pension matters will recall just how complicated these provisions were in the legislation that was passed in 1984. We found that there were certain defects in the provisions. This caused us to try to remedy those defects. Inevitably they are of a technical and complicated nature, but I shall be as brief and clear as possible about what is inevitably a very complex subject.
  Sections 41A to E of the Social Security Pensions Act 1975 were inserted by last year's Health and Social Security Act. That legislation overrode scheme rules, which means that it had a direct effect upon schemes. Certain scheme rules were not overridden. These are known as protected provisions. Included in these was the rule that early leavers could be provided with an alternative to what is described as short-term benefit, by which is meant the preserved pension entitlement due to the early leaver under section 9(2) of the 1973 Act.

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  The intention was that in these cases schemes would give the alternative and not have to provide any extra anti-franking benefit at state pension age. Beneficiaries would be able to ensure that any increased value in their benefit rights was reflected in the alternative, because generally these alternatives can be given only with the member's consent. We now find that where the alternative is a pension in the same scheme—for example, a smaller pension paid earlier—there is still a requirement to provide at state pension age an anti-franking increase. That was never our intention.
  The new clause will ensure that in these cases no anti-franking increase need be paid when the member reaches state pensionable age. Our intention is that the increased value required to give protection against franking should be reflected in the amount of pension put into payment in the first place.
  Further minor problems are dealt with in the new clause. Section 41B of the 1975 Act requires the schemes to make an assumption to enable them to calculate the amount of widow's pension due, but it is drafted in a restrictive manner to prevent other assumptions being made. The new proposal allows for a relaxation of that restriction so that other assumptions can be made in the calculation of the benefit. I commend the new clause to the House.
  7.15 pm
  Mrs. Beckett: I am afraid that we are back to our usual slightly less charitable mood. I noted with interest the Minister's remarks that those who follow our debates will get regular doses of anti-franking. That is not quite how he put it, but that is what is involved.
  These proposals were first discussed in Committee on the Health and Social Security Bill of 1984. They were amended on Report. They were amended during the proceedings in Committee on the present Social Security Bill. They are being amended again on Report, and no doubt they will be amended again in another place as the Government seek to get their legislation right. However, we are becoming inured to the fact that these proposals are perpetually to be found in Social Security Bills.
  I make only one other observation. If I understand correctly the clause and the amendments that go with it, the Government are at least being consistent about their proposals for personal portable pensions in removing the protection of a guaranteed minimum pension and encouraging people to stand on their own feet. The alternative formula gives them freedom, but it conveys the idea that they are being given the freedom to lose rather than to gain benefits. However, it is obviously quite consistent for this to be part of the anti-franking measures. From that point of view, we do not question it.
  Question put and agreed to.
  Clause read a Second time, and added to the Bill.

New Clause 20

  ENTITLEMENT TO BENEFIT DEPENDENT ON CLAIM
  'The following section shall be inserted immediately before section 166 of the Social Security Act 1975—
  "General provision as to necessity of claim for entitlement to benefit
  165A.—

  Except in such cases as may be prescribed, no person shall be entitled to any benefit unless, in addition to any other conditions relating to that benefit being satisfied—

  (a) he makes a claim for it—

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  (b)made under any enactment before the expiry of the period of six months beginning with the commencement of section [Calculation of contributions] above and contained in a statutory instrument which states that it contains only provisions consequential on that section or such provisions and regulations made under section 4(6A) or (6D) or 13(5A) of the Social Security Act 1975 or section 6(5A) of the Social Security Pensions Act 1975;

  (c)made under section 15A of the Social Security Act 1975 or section 2(3A) or 3(4A) of the Social Security and Housing Benefits Act 1982 before the expiry of the period of six months beginning with the commencement of section 9 above;

  (d)made under any enactment before the expiry of the period of six months beginning with the commencement of section 9 above and contained in a statutory instrument which states that it contains only provisions consequential on that section or such provisions and regulations made under any provision inserted by it in the Social Security Act 1975 or the Social Security and Housing Benefits Act 1982;

  (e)made under section 9(1A) of the Social Security and Housing Benefits Act 1982 before the expiry of the period of six months beginning with the commencement of section 10 above;

  (f)made under any enactment before the expiry of the period of six months beginning with the commencement of section 10 above and contained in a statutory instrument which states that it contains only provisions consequential on subsection (1) of that section or such provisions and regulations made under section 9(1A) of the Social Security and Housing Benefits Act 1982;

  (g)made under section 22(8) of the Social Security Act 1975 before the expiry of the period of six months beginning with the commencement of paragraph 2 of Schedule [Miscellaneous amendments relating to statutory sick pay] to this Act;

  (h)made under any enactment before the expiry of the period of six months beginning with the commencement of paragraph 2 of Schedule [Miscellaneous amendments relating to statutory sick pay] to this Act and contained in a statutory instrument which states that it contains only provisions consequential on the exercise of the power conferred by virtue of that paragraph or such provisions and regulations made under section 22(8) of the Social Security Act 1975;

  (j)made under section 165A(1) of the Social Security Act 1975 before the expiry of the period of six months beginning with the commencement of section [Entitlement to benefit dependent on claim] above;

  (k)made under any enactment before the expiry of the period of six months beginning with the commencement of section [Entitled to benefit dependent on claim] above and contained in a statutory instrument which states that it contains only provisions consequential on that section or such provisions and regulations made under section 165A(1) of the Social Security Act 1975;

  (l)made under section 17(2A) of the Social Security and Housing Benefits Act 1982 before the expiry of the period of six months beginning with the commencement of section [Medical evidence] above;

  (m)made under any enactment before the expiry of the period of six months beginning with the commencement of section [Medical evidence] above and contained in a statutory instrument which states that it contains only provisions consequential on the exercise of the power conferred by virtue of that section or such provisions and regulations made under section 17(2A) of the Social Security and Housing Benefits Act 1982.' —[Mr.Newton.]

  Brought up, and read the First time.
  Mr. Newton: I beg to move, That the clause be read a Second time.
  Mr. Deputy Speaker: With this it will be convenient to take Government amendment No. 142.
  Mr. Newton: The new clause simply provides that regulations made under powers taken in the Bill are not to be referred to the Social Security Advisory Committee or to the Industrial Injuries Advisory Council if made within six months of Royal Assent or of the operative date of the relevant clause. If that sounds in any way disturbing, I should point out that, as I am sure the hon. Member for Birkenhead (Mr. Field) is aware, this is normal procedure when the basic purposes of the proposals are set out in the primary legislation and discussed by the House. In those circumstances, it is normal for the subsequent regulations not to be referred to the SSAC or the IIAC.
  I should state specifically, however, that the first set of regulations about dependency increases will be subject to the affirmative resolution procedure. In the ordinary way they would be subject to the negative procedure, but as the House has not had the opportunity to discuss the details in this instance it will have that opportunity to do so when we bring forward the proposals.
  Question put and agreed to.
  Clause read a Second time, and added to the Bill.

New Clause 1

  DEFINITION OF THE TERM 'PRESCRIBED'
  'Where in any provision of this Act (including provisions amending other Acts) the Secretary of State is empowered to prescribe any thing he shall do so by regulations made by statutory instrument; and no such instrument may be made unless a draft of it has been laid before, and approved by resolution of, both Houses of Parliament.'.— [Sir Brandon Rhys Williams.]
  Brought up, and read the First time.
  Sir Brandon Rhys Williams: I beg to move, That the clause be read a Second time.
  I have already made a number of fairly strong observations about the way in which the Bill is being handled by the Department and I need not repeat them now. We alluded several times in Committee to the complexity of the matters covered by the Bill and to the wide-ranging effects of many of the provisions in the Bill or clearly in prospect.
  In this complex field, it would be quite wrong for the House to abdicate responsibility for supervising what the Department is doing, especially in relation to occupational pensions. I have campaigned for many years for reform of the law in this area, but the Department has not made any strong response to the arguments advanced by me and by others far better qualified to do so. That being so, I am not satisfied that the Department's intentions and the pace of reform are in line with public opinion. I therefore regret that throughout the Bill powers are taken to allow the Department to take charge of the legislation when, in practical terms, Parliament will have withdrawn from the scene.
  The newspapers today confidently predict that the state earnings-related pensions scheme is to be abolished. I do not disagree with such a policy, but if the state scheme is abolished private sector schemes will bear the whole burden of earnings-related provision. In those circumstances, it is even more important that the law relating to such schemes should be thoroughly satisfactory. I do not believe that the law will be satisfactory unless Parliament—or at any rate those Members who are seriously interested in the subject, which may not be very many—has the opportunity to scrutinise and comment upon the Department's activities in this respect.
  466
  The present state of the law is most unsatisfactory. Many contributors pay good money in over a lifetime of work but get bad money out because of currency depreciation. Pension funds could protect contributors to a far greater extent, but they are not called upon to do so and the Department has shown itself to be quite satisfied with that very disappointing situation. In many cases, early leavers are obliged to sacrifice a large part of their entitlement because the rules of the scheme of their employer in the first instance have not been amended. The fact that early leavers do not get a fair deal under present legislation has been talked about for years, but nothing of substance has been done to put things right and the Bill only begins to deal with it with effect from the present year.
  On the other hand, the people who remain in occupational schemes are obliged very often to participate in final salary schemes which have the effect of transferring resources from lower-paid to higher-paid members of the scheme. That is intrinsically wrong and should not be countenanced by Parliament. I appreciate that in many schemes, and in public sector schemes, the employer's contribution is so generous that the employees have no cause for complaint, whether the calculations are made on a final salary basis or on the personal build-up of entitlement; but in far too many schemes the low paid subsidise the higher paid, and that should not be allowed to continue.
  If the Bill goes through as drafted, I am not confident that all the references it contains to the Department having power to take responsibility will lead to any significant improvement in the near future.
  Our economy rests on the belief that saving is worthwhile. Parliament must not allow a general belief to grow up to the effect that there is no point in saving because one either loses one's resources through depreciation or people who are cleverer than oneself will use them to suit themselves and not give one a fair deal. It is quite wrong for Parliament to allow such an inadequate and unfair situation to continue.
  I should not like it to be thought that I regard all occupational pension schemes as inadequate and unfair. Many employers make handsome contributions to their employees' retirement pensions. Nevertheless, a very large number of schemes are entirely inadequate and the rules protecting the rights of employees are utterly insufficient. Somebody must protest if Parliament is asked to hand over power to deal with that situation to a Department which lacks the drive and the energy to put matters right. Parliament must not leave such matters to the Department without having a proper opportunity to supervise and discuss what the Department has it in mind to do.
  Mr. Newton: I hope that my hon. Friend the Member for Kensington (Sir B. Rhys Williams) will not take it amiss if I say that I am in some difficulty as to whether to reply to what the new clause says or to the rather broader thrust of his arguments about occupational pensions generally. I hope that you, Mr. Deputy Speaker, will forgive me if I comment briefly on the broader issue. I think that it is a little unfair to accuse the Department of being essentially inert and not to take account of the substantial changes that have taken place in occupational pensions legislation—not least those in the Bill—many

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  of which are in the direction urged by my hon. Friend for some time and reflect considerable credit on his effort and application in this area over many years.
  It is not for me to predict in this debate, any more than in earlier debates, the outcome of the Government's current review of social security provision and financial provision for retirement generally, but my hon. Friend may rest assured that his views do not go unremarked in our consideration of these matters. I hope that he will understand if I cannot say much more about the general issues.
  The new clause essentially concerns whether the regulations required to implement the proposals in the Bill —the primary legislation —should be subject to the affirmative rather than the negative resolution procedure. Knowing my hon. Friend's views on this and having listened carefully to him in Committee, I considered the possibilities open to us to move in that direction on Report, and it is with some reluctance that I find myself unable to move towards him—not because I believe that he has made an overwhelming case, but because my natural inclination is to try to please him, and indeed all hon. Members, if I possibly can. I regret, however, that in this instance I cannot do so.
  I have before me several passages reproduced from the report of the Joint Committee on Delegated Legislation in the 1972–73 Session. I shall not weary the House by reading them out, unless I am pressed further, but those passages, with other precedents that I have examined, persuade me that we are acting entirely properly and in line with precedents over a long period in proposing that the regulations should be subject to the negative rather than to the affirmative procedure and that my hon. Friend the Member for Kensington is being somewhat unfair in suggesting that this in some way overrides the normal way in which the Government should deal with Parliament. Nevertheless, in acknowledgement of my hon. Friend's strength of feeling, I should like to tell him that, whenever I am able to meet him on this issue, I shall try to do so. I am afraid that I cannot do that today for a variety of reasons, most of which are practical.
  Sir Brandon Rhys Williams: I thank my hon. Friend for his reply. He was conciliatory and, because I am confident that his mind is moving in the right direction in regard to occupational pensions, I do not wish to say more. I beg to ask leave to withdraw the motion.
  Motion and clause, by leave, withdrawn.

New Clause 4

  POWER OF SECRETARY OF STATE TO AWARD INCREMENTS TO SMALL FIRMS
  The Secretary of State may award additional adjustable payments to firms with less than 20 employees for the purpose of financing their statutory sick pay schemes. —[Mr. Kennedy.]
  Brought up, and read the First time.
  7.30 pm
  Mr. Kennedy: I beg to move, That the clause be read a Second time.
  Although this issue is not insignificant, I appreciate the practical limitations within which Ministers must work and
  468
  I merely wish to draw attention to a problem which was highlighted by a recent report entitled "Burdens on Business." Any relief from the administrative complexities facing small businesses is welcome.
  The Secretary of State's original announcement came as a bolt from the blue for many small business men and the National Federation of Self Employed and Small Businesses. It was proposed to extend statutory sick pay to 28 days. Having had discussions with those affected, the Secretary of State was able to announce relief from national insurance contributions for 12 months from the passing of this legislation. That was in recognition of the extra burdens—[Interruption.] I do not know whether the ringing of Division bells indicates a split in the alliance. I do not know whether the bell tolls for me or for the Minister. We shall see. It is a more musical accompaniment than we are used to.
  The relief that the Government announced was welcome. I am now seeking additional relief for small businesses. I am the first to admit that my definition is arbitrary.
  In January 1984, my hon. Friend the Member for Gordon (Mr. Bruce) wrote to the then Minister for Social Security inquiring whether the Government planned to extend statutory sick pay from eight weeks to 13 weeks. The Minister replied that he could give an assurance that there were no plans to extend the period covered. I realise that one Minister cannot bind another, but when my hon. Friend the Member for Orkney and Shetland (Mr. Wallace) wrote to the Parliamentary Under-Secretary of State for Trade and Industry in February this year about the extension which had by then been announced and which ran contrary to what the Government said one year earlier, the Minister replied:
  "the DHSS maintain that the extension has several advantages. They consider that it will further reduce the overlap of some employers' contributory sick pay schemes with State sickness benefit; further reduce the effect of the anomaly whereby State sickness benefit is not taxable; and finally, produce valuable public expenditure savings together with some savings in DHSS staff. As you will know, a major element of our economic strategy is to control the size of the public sector in order to free resources to the private sector."
  The difficulty for small businesses, especially self-employed small businesses, is that the statutory sick pay scheme involves considerable extra paperwork. I have in mind the type of business which is prevalent in my constituency. The absence of a member of staff can leave just one person with all the additional work and the administrative work for statutory sick pay. The arrangements can create a bad cash flow in winter, there can be bureacratic complications, and they can work against the interests of the chronically sick.
  I am aware that the Minister might not be able to accept the wording of my new clause. As I said, I would not go to the wall about the level being set at 20 employees. I am merely raising a genuine problem and trying to decrease the administrative burden on small businesses. I suggest reimbursement for the paperwork involved as more than 90 per cent. of small businesses probably have 10 or fewer employees and are run by self-employed employers. Such people would benefit from the new clause.
  Two other means of highlighting the problem were suggested to me. One was to draw up bands of exemptions for those who would not have to do the administrative work. Such a system immediately creates anomalies. The other was to exempt all self-employed employers from the

  469
  statutory sick pay scheme. There are problems with both suggestions, and I do not pretend that mine is perfect. I hope that the Minister will be constructive and express his thinking on this matter.
  Mr. Whitney: I listened with interest to the hon. Member for Ross, Cromarty and Skye (Mr. Kennedy), not least through the problems of the bell. As he asked the question, I remind him:
  "never send to know for whom the bell tolls; it tolls for thee."
  I cannot accept the new clause. The Government are deeply conscious of the importance of not putting extra and unnecessary burdens and controls on employers. The hon. Gentleman was kind enough to refer to the report which has recently been published entitled "Burdens on Business," which makes several important recommendations about removing burdens on businesses, especially small businesses.
  This is an area that has been pursued with great vigour by the Government—a campaign in the charge of my right hon. and noble Friend the Minister without Portfolio, who is leading a co-ordinated initiative that the Government will follow up. That examination will include the operation of the SSP scheme. No decisions have been taken at this stage, but I assure the hon. Gentleman that we shall be consulting employers' representatives and others in due course on the matters affecting SSP in that report.
  I hope that the House will understand, therefore, that we are not unsympathetic to the case that the hon. Gentleman has advanced. However, some problems arise from the hon. Gentleman's proposition. He set the limit at those firms with fewer than 20 employees. That would cover 80 per cent. of employers, which would be a burden.
  Mr. Kennedy: They are voters.
  Mr. Whitney: The hon. Gentleman may need votes, but our intention is to take a sensible decision about lightening the burden on businesses and getting the balance right.
  An employer's major expenditure on SSP is, of course, the amount that he actually pays out. But, as the hon. Gentleman knows, the whole of that is recoverable. The employer simply deducts any SSP he has paid from the total payment of national insurance contributions, or, if necessary, PAYE tax, which he makes to the collector of taxes each month. It is a very simple system, which I believe has worked extremely well.
  I founded a small business and operated it before I joined the Government. Therefore, I can confirm that the scheme did not cause anything like the problems that we expected. I believe that that has been the reaction of most businesses, large and small, throughout the country.
  We believe that the impact of the extension from eight to 28 weeks will not be anything like as great as some people have suggested. Almost 90 per cent. of all sickness spells last for less than eight weeks and are already covered by the present scheme. The average amount of sickness per employee is only about 10 days per year, so the additional work for most employers will not be extensive.
  However, in recognition of the extension of the burden on employers we propose to compensate them for the cost of the secondary insurance contributions that they pay on SSP. That will apply not only to the extended part of SSP, but to the whole period for which SSP is paid. The calculation is that that will be worth up to £60 million a
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  year to employers. That is a very significant concession, and we do not believe that there is a justification for making additional payments to selected employers, depending on their size, who may or may not experience some extra cost as a result of the extension. The proposal is that the compensation payment will operate retrospectively from this month—a full year ahead of the extension. That will help all employers with their costs and it is the fairest course to take.
  We believe that the burden has not been as great as was originally feared. The majority of employers have got down to operating the SSP scheme and have found it a great deal simpler than they expected.
  While sharing the spirit in which the hon. Gentleman moved his new clause—that we must do all we can to maintain the lightest possible burden on employers, great and small, for the employment benefits of which we are all conscious—I do not believe that there is any justification for going further than the Government have proposed.
  Mr. Kennedy: I thank the Minister for his constructive response. I was interested to learn that he started out as a small business man who is now in very big business.
  In view of his comments and assurances about the Government recognising the burdens on small businesses and the administrative and financial burdens that can result from operating the SSP scheme, I am happy to beg to ask leave to withdraw the motion.
  Motion and clause, by leave, withdrawn.

New Clause 5

  EXCEPTIONALLY SEVERE WEATHER PAYMENTS
  (1) The Supplementary Benefit Commission, in exercise of their power under section 3(1) of the Supplementary Benefits Act 1976, shall pay single payments to meet the fuel costs of any assessment unit where they are greater than the amount which has been put aside to pay for them because a period of exceptionally severe weather has resulted in consumption greater than normal; having regard to any available information in previous levels of consumption.

  (2) The amount payable under subsection (1) above shall be the cost of the amount of excess over normal consumption.

  (3) Single payments paid under subsection (1) above shall be calculated for all regions of England, Scotland and Wales on a common trigger-point established with reference to the data compiled by the meteorological office for the weather station at Plymouth.—[Mr.Kirkwood.]

  Brought up, and read the First time.
  Mr. Kirkwood: I beg to move, That the clause be read a Second time.
  7.45 pm
  The Minister, having studied the new clause for two or three months, will realise that some of the points of the clause have disappeared since the weather has changed. Indeed, in politics we are often accused of changing our policies with the weather. I understood that the Bill would be reported to the House some weeks ago. Indeed, I expected it to be reported just at the time when there was the stramash about the trigger point being reached in the southern and western parts of the country for exceptionally severe weather payments.
  I tabled the new clause because I wish to draw attention to the absurdity that has caused a tremendous amount of heartache and distress in the northern reaches of the country about the perceived injustice of certain parts of the

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  country being paid different levels of grant and having different trigger points for exceptionally severe weather payments, depending on the ambient temperatures.
  People in the north and in Scotland felt that the fact that they were expected to endure much lower consistent annual ambient temperatures than people in the south was entirely unfair. The Minister knows that that has been referred to frequently in the House in Adjournment debates, questions to the Prime Minister and questions to the Minister who is to reply to this debate. I wish to take this opportunity to reinforce the antipathy that was expressed when the trigger points for exceptionally severe weather payments were reached. I accept that there are deficiencies in the new clause, and I shall be happy to ask leave to withdraw it when I have heard the Minister's reply.
  The position has been compounded by the Prime Minister saying that the Government are spending more than ever on heating additions. Many figures have been bandied about. People in the north and in Scotland are well aware that more money has been spent on heating additions, but the reason for that has been that more people than ever before have qualified for them. That has put salt in the wound.
  In addition, some weeks ago it became clear that the electricity and gas industries, because of the external financing limit policy being imposed by the Government, were paying more than necessary for the energy required to heat homes. That produced a great deal of bad feeling in the north and in Scotland. I hope that the Government recognise that and will take the opportunity this evening to say so.>I recognise that there are many difficulties in trying to achieve a sensible and equitable exceptionally severe weather payment scheme —such as humidities, wind forces and seaboard as opposed to inland locations. I am certain that that is fiendishly difficult. However, I hope that the Minister will accept the principle that low temperatures are low temperatures wherever they are. If the scheme is to continue, it must recognise that.
  I hope that the Minister will say a few words about the position when such schemes as this are buried not only in the detail of secondary legislation but in the S manual procedures. When I began to study what was happening with these payments, I found myself among the pages of the S manual. It is difficult when primary legislation produces secondary legislation which spawns regulations buried in the S manual. I hope that there will be no need in future schemes for anything of that sort.
  Will the Minister say, albeit retrospectively, how the exceptionally severe weather payments scheme has worked in practice? He may not be able to say how much was given in, say, the west country and the home counties and how many applicants overall received payments, but it would be helpful to have information of that type so as to know whether the scheme could be salvaged.
  I am sure that the Minister will have studied the terms of the Social Security (Cold Climate Allowance) Bill, introduced by the hon. Member for Dundee, East (Mr. Wilson). I was happy to be a sponsor of that measure, which was designed to deal with the cold climate situation in the north and in Scotland.
  The new clause was designed to highlight a discrepancy that existed at the time when I thought Report and Third
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  Reading would take place, before the Chancellor of the Exchequer put the Bill in cold storage, so to speak, until he could include the national insurance contributions aspect. Nevertheless, it has been useful to rehearse some of the arguments on the subject. I hope that the Minister will comment on any proposals he may have to change the arrangements for the exceptionally severe weather payments scheme.
  Mr. Kennedy: Given the geographical location of my constituency, I cannot allow this opportunity to pass without speaking in full support of the remarks of my hon. Friend the Member for Roxburgh and Berwickshire (Mr. Kirkwood).
  I agree with my hon. Friend that if the Government were not aware of the fact when they embarked on the scheme of trigger payments, it must have come home to them by now that few issues could have caused such massive nationalistic—I use the word in its best sense rather than in any political way—sentiment across the political spectrum in Scotland. The odd exception may have been the moving of football matches at short notice, but that is not this Minister's problem.
  It has been nothing short of scandalous the way in which severe weather payments have been made available in some parts of the country and not in others. A Conservative Member, who had better remain nameless, told me of a classic case that occurred in his constituency, which is also towards the north of Scotland. An elderly lady went to the south of England to spend a few weeks with her married daughter. Her pension was transferred so that she could collect it during the weeks of her holidays on the south-east coast of England.
  When the weather turned severe, she arrived at the post office to collect her pension, and was also given a severe weather allowance. She was given that allowance in the south of England, where it was about 10 degrees warmer than in her home town, where—had she been there—she would not have received a penny. That was crazy. The Government have accepted that it was a bizarre situation and needs review.
  I endorse what my hon. Friend said about the scheme's review. We hope that in trying to improve it, the rumours that have been circulating—one suspects at the behest of the Treasury—to the effect that a change will merely mean the scheme being scrapped or suffering a considerable clawback will prove to be unfounded. I hope that our fears about that can be allayed.
  The Minister has said on several occasions that there is a difference between an exceptionally severe weather payment and a cold climate allowance. As my hon. Friend and I have been sponsors of the Social Security (Cold Climate Allowance) Bill on the two occasions when it has been introduced—I was also a member of the delegation which saw the Minister on the subject—I hope that, while I appreciate that a distinction exists, the Minister will have some encouraging words to say tonight.
  The fact that the meteorological office for the weather station at Plymouth has been chosen for this proposal is, I am sure, pure coincidence and is not an example of organised politics at work.
  Mrs. Beckett: We, too, are concerned about the many problems that exist for people who need recompense for their heating bills.The operation of the exceptionally

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  severe weather payments scheme has been the most recent, most inexplicable and perhaps most scandalous example of such problems.
  It is clear that more and more people are having difficulty meeting their fuel bills. As the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood) pointed out, the problem has been exacerbated by the deliberate policy, both before and since the last election, of forcing up gas and electricity charges, despite Conservative assurances that that would not happen.
  Reference has been made to the anger that has been caused, particularly in areas such as Scotland, by the operation of the severe weather allowance. The hon. Members for Roxburgh and Berwickshire and for Ross, Cromarty and Skye (Mr. Kennedy) will agree that just as much anger has been felt by pensioners over the operation of the available scale margin deduction, under which many pensioners became entitled to heating allowance, only to discover that, having managed to satisfy the conditions to receive allowance, some of it was removed from them.
  In recent weeks there has been a reduction in the standing charge concession which had been given to pensioners and small users of gas and electricity. Wherever we look we seem to see a retrenchment, rather than an expansion, in the help that people are given to meet their heating costs at times when their needs increase.
  I echo the hope of the hon. Member for Ross, Cromarty and Skye that rumours that the social security review will simplify the procedure essentially by abolishing most of the help that has been available will prove to be unfounded and that, when the review is published, we shall be able to welcome the action that the Government are taking.
  Mr. Whitney: I note with interest that this is one occasion when hon. Members speaking on behalf of the Liberal party and the SDP are in agreement, and on this issue they are in agreement with the hon. Member for Derby, South (Mrs. Beckett), speaking for the Labour party.
  I agree with the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood) that this has been a matter of great concern in Scotland. It would be an insensitive Sassenach —certainly an insensitive Minister in my Department—who was not aware of that. I am glad, therefore, to put yet again the facts of the case, and I hope that they will be noted, especially by the people of Scotland.
  The first point to get into perspective is that the major help for those on low incomes to cover their day-to-day expenses, including fuel expenses, is given through the supplementary benefits system. I remind the House that the scale rates for that benefit increased in real terms by about 6 per cent. between November 1978 and November 1984. In other words, for pensioners and others on supplementary benefit, there has been that increase, of which the Government are justifiably proud.
  The hon. Member for Ross, Cromarty and Skye (Mr. Kennedy) spoke of the heating addition. We take pride in the fact that there have been increases in the heating addition payments. Those payments have reached £400 million a year, representing an increase in real terms of £140 million above that spent in the last year of the Labour Administration, of which the hon. Member for Derby, South was a member.
  Reference has been made to fuel charges. I agree that they have increased, but those increases pale into
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  insignificance compared with the increases in fuel charges that we suffered under the last Labour Government. Against the increases in fuel prices that have taken place during the period of this Government, increases in heating additions in real terms have amounted to 20 per cent. It is important to set the exceptionally severe weather payment system against the background of the important and real increases in support to low-income families that the Government have provided.
  8 pm
  The exceptionally severe weather payment system was an attempt to even out the exceptional budget problems of those on low incomes and tight budgets and was not related directly to actual temperatures. That was the objective system that we sought to establish. Earlier systems had been subjective and complicated and it was thought that something that established objective criteria would be more easily understood and more easily accepted. Of course there are differences in average ambient outside temperatures throughout the country. I believe that I am right in saying that for the purposes of the exceptionally severe weather payment system Birmingham or Suffolk has to be colder than Glasgow. There is no victimisation against Scotland. We have attempted to use objectively the scientific data available.
  The Government have accepted that the system has not been understood and we accept that it is not satisfactory. As I said to the House on 12 March, we have decided that changes should be made before next winter. It is too early for me to say what those changes will be, but I repeat that assurance to the House.
  Mr. Kirkwood: I beg to ask leave to withdraw the motion.
  Motion and clause, by leave, withdrawn.

New Clause 14

  INVALID CARE ALLOWANCE FOR MARRIED WOMEN
  'In the Social Security Act 1975, in section 37(3), leave out "and a woman shall not be entitled to any such allowance if—

  (a)she is married and either—

  (i) she is residing with her husband or

  (ii) he is contributing to her maintenance at a weekly rate not less than the weekly rate of such an allowance; or

  (b)she and a man to whom she is not married are living together as husband and wife.".'.—[Mrs. Beckett.]

  Brought up, and read the First time.
  Mrs. Beckett:I beg to move, That the clause he read a Second time.
  The Opposition decided to table the new clause before we were aware of the new clause that the Government intended to introduce on the same issue. However, the two new clauses on the half test go neatly side by side. As I understand it, the Government were not obliged by the European directive to take the action that they did on the test. Both the half test and the invalid care allowance test are discriminatory against women generally and married women especially. We hope that the precedent that the Government have set will be one which they will be eager to follow.
  The Minister sought to argue in Committee that the invalid care allowance was not covered by the directive in the same way as the half test. He may have been mistaken in saying that. He argued that looking after an invalid was

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  a risk which was not covered by the directive because it was only one's own direct invalidity to which the directive could possibly apply. If invalidity is incurred by someone other than the potential recipient of the invalid care allowance, the directive does not state that invalid care allowance is thereby excluded or that carers should not be covered. That is the conclusion which the Minister drew from the way in which the directive had been drafted.
  The basis of the directive and of the judgment which we feel that the Government should make is that invalidity interrupts capacity to work. That applies to the person who is made an invalid and to the person who is in the position of having to draw the invalid care allowance.
  I draw the Minister's attention to an appeal which was upheld on 1 March. I understand that the tribunal was chaired by the new president of the social security tribunal. The Minister commended him to us as a man of sound judgment when we were in Committee last year, so I am sure that he will be only too happy to accept his judgment. Under the president's chairmanship the tribunal ruled that the equal opportunity directive covers the invalid care allowance. It awarded the benefit to the lady who brought the case, Mrs. Drake.
  I believe that the chief social security commissioner has chosen to refer the hearing to the European Court. I want to know what the implications are for Government policy and what the Government now have in mind. How many women are now thought to be eligible for the invalid care allowance? I should like the Minister to give us the latest figures that are available to him. What does he anticipate will be the cost of extending the allowance to those who are now barred from claiming it? It has been suggested since the Drake case—we believe that this should be publicised—that women should make a claim in anticipation of a decision from the European Court. Of those women who are eligible to make a claim, how many have done so? That is relevant in the light of an earlier new clause in which reference was made to the McCaffrey case, in which it was made clear that the date of the claim was crucial in determining entitlement. The Government are taking steps to ensure that people are not able to claim the allowance merely because they are entitled to it. We advise anyone who thinks that he or she might be eligible to claim the allowance now.
  Caring for an invalid involves substantial cost. It is suggested that it costs about £4,000 a year to care for a mentally handicapped child. It was suggested even five years ago that it cost £6,000 a year to care for a demented elderly person. That does not take account of the fact that such individuals often lose state benefits to which they might have been entitled if they had to move in with members of their family because of invalidity.
  Against the background of these costs and pressures on families, we ask the Government to tell us what action they propose to take if, as seems likely, the European Court's judgment goes against them.
  Mr. Galley: Concern about the invalid care allowance is shared by many of my right and hon. Friends. I know that my hon. Friend the Minister for Social Security is aware of this, but it seems appropriate to reiterate the fact in the hope that he will seek to tackle the anomalies in the spirit of reform in which he has approached his job.
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  One of the most startling injustices remaining in our social security system is that the invalid care allowance is not available to married women regardless of for whom they care while it is available to all other carers. This places an unfair burden on a dedicated group. There is an increasing unfairness because more and more married women are working. It is essentially an earnings replacement allowance.
  My right hon. Friend might reasonably say that that would not be an applicable argument in every case, but it is right that many married women who care for invalid spouses or others are forgoing earnings and should be entitled to the allowance.
  We are trying to develop initiatives for caring in the community. Care involves a wide variety of options and one of them is care at home. It is right that many of those who are mentally ill or mentally handicapped, or invalids for other reasons, are much better off by staying at home and receiving care than by being in an institution. We must seek to make it easier for these people who stay at home if that is at all possible. The fact that the invalid care allowance is not available to married women causes more people to go into institutions. I do not wish to advance my main argument on a financial stance, but the economic considerations must be considered. It may cost the Health Service less if more money is put into invalid care and extended to married women.
  I understand that the latest estimate of the cost of extending the invalid care allowance to married women is £85 million. This week my hon. Friend the Minister has found a fairly substantial sum of money to deal with the half test. Last year he found a reasonably substantial sum of money to deal with anomalies in the housewives' noncontributory invalidity pension scheme and improved that by the severe disablement allowance. Therefore, he has a good record of reform and I hope that he will give this matter some considerable priority as his next step.
  We all have our favourite shopping list within the social security budget for change and reform. I should like to see this reform accepted by my hon. Friend as being pretty well near the top of the list. He might consider it when he looks at the whole matter of social security and the making of savings in other areas. To right that injustice should be a priority when new resources become available as a result of reviews.
  Mr. Kennedy: In the same spirit of all-party support that greeted some of the announcements made by the Minister this evening, may I complete the all-party pressure on the Minister to come forward with further good news? If he cannot do that tonight, I hope that he will at least give us a sign that he is moving in that direction.
  I fully agree with the hon. Member for Derby, South (Mrs. Beckett) and with her new clause and with the hon. Member for Halifax (Mr. Galley). Surely the case now is overwhelming for the extension of invalid care allowance to married women. It is worth emphasising that all too often we take for granted within the welfare state the fact that, without the informal network of care, often free from institutions or direct institutional production or support mechanisms, we would indeed be talking about a crisis in the welfare state of a proportion that no hon. Member would suggest exists at the moment. Heaven knows, we argue enough about the welfare state and about the dangers and problems that it faces. The last part of that informal

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  network clearly comes from the role of married women in caring for dependent, elderly, partly disabled or handicapped relatives, and so on.
  I remember speaking last year at a meeting of a careers organisation at which the Department was represented by the Earl of Caithness. He explained on that occasion why, mainly because of revenue implications, the Department could not come forward with the extension of the allowance at that point. None the less, I hope that, now that we are a bit further down the track, the Minister will be able to be a bit more forthcoming tonight, particularly as a review of social security has just been completed. It would be extremely encouraging to think that one of the things that was reviewed and decided in that process was that this anomaly should be rectified and that that benefit should be, and will be, made available. If the Minister can give us any hints or otherwise in that direction, they will be gratefully received with the same all-party welcome that other contributions have been received.
  Mr. Newton: In view of the warmth with which the House greeted some of my earlier remarks, I knew that my luck had to run out sooner or later, and I think that it just has. I fear that I am unable to answer on the invalid care allowance for married women in as forthcoming a fashion as I was able to on earlier matters, in particular, on the married women's half test.
  The hon. Member for Derby, South (Mrs. Beckett) asked her questions in a reasonable way. She asked for the current estimate of the number of married women who would stand to benefit from the extension of invalid care allowance, were such to occur. Our best estimate at present is about 70,000. She asked what it would cost and the up-to-date answer has already been given by my hon. Friend the Member for Halifax (Mr. Galley). The up-to-date estimate of the net cost, after allowing for savings in supplementary benefit and so on, would be around £85 million.
  The hon. Lady asked how many married women had claimed since the judgment in the case of Mrs. Drake. About 300 claims from married women have been received since the Drake case was published. That is about four times the number of such claims usually received in the same period. Those claims are being put on ice. They are being acknowledged, but adjudication will await the judgment of the European Court and the subsequent decision of the social security commissioners.
  8.15 pm
  I can confirm, as the hon. Lady said, that in early January the Drake case was put to the independent adjudicating authorities with the ultimate aim of securing a judgment from the European Court on the application or otherwise of the directive to invalid care allowance. As I have said on previous occasions, our legal advice was and remains that the directive does not cover invalid care allowance. I understand that the Commission shares that view but, as I have also said on a number of occasions, ultimately it is clearly a matter for the European Court, and, as the hon. Lady said, the social security commissioners have referred the case to the court and a judgment will be made in due course at which time the judgment will have to be considered by the Government.
  There is not a great deal more than I can usefully add to the views that I have already expressed in Committee and on a number of other occasions on the Floor of the House on the issue. It will come as no surprise to hon.
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  Members to know that, were resources not a problem, I should like to see this change. But resources are a problem. Even were this amount of money to become available there would be a real issue as to its ranking order alongside a number of other social security claims, arid, not least, the claims of other disabled people. I spent part of yesterday afternoon at the annual general meeting of the Middlesex Association of the Blind where I was once again fairly heavily lobbied on the issue of a blindness allowance. We can all think of extensions of benefit that would be attractive to many people.
  There is the other problem of whether money would not in some circumstances be at least as well spent in supporting disabled people and their carers by additional expenditure on home helps and other forms of care in the community. I do not want to labour any of those points. I have put them before the House and the Committee before as reasons for my hesitation in responding En the way that hon. Members would wish.
  Ms. Richardson: I know how difficult it is, given all the competing claims, when there is only so much money, but is there not a double disadvantage in the case of the invalid care allowance? It is not only that the carers need the money but the present position is discriminatory in the sense that married women cannot claim while single women and men can. Should not that aspect be taken into account?
  Mr. Newton: It cannot be denied that it is discriminatory in the sense that there are manifestly special rules for married women in relation to the claiming of invalid care allowance. The hon. Lady and the hon. Member for Derby, South and other hon. Members have been kind enough to refer to the record that we have acquired in making progress towards equal treatment over the past two or three years. That is certainly something in which I take pride but a problem remains here because it is our legal advice that this matter is not within the terms of the directive. Clearly, that can only be decided ultimately by the European Court and I am simply rot in a position to say to the House tonight that I can suddenly make £85 million available for the extension of benefit now.
  It sounded from what the hon. Member for Derby, South said that I might conceivably have misled her. She referred to the fact that our action on the married women's half test had been taken without regard to the directive. I wish to make it clear that our advice had become that the residual effects of the married women's half test were probably in contravention of the EC directive. Rather than argue further about that, we felt that it would be appropriate to introduce the change of which I spoke earlier and to backdate it to 22 December 1984—the date on which the directive finally took effect. That is not quite on all fours with invalid care allowance, either regarding the amount of money or our present Legal advice.
  My hon. Friend the Member for Halifax referred to the money involved in the half test. I admit that it is fairly significant although it is only about one third of the sum involved in ICA. The one significant difference is that the money in the half test will rapidly decline to nil because the effects have already been working out as a result of its abolition for all those who became 60 after 1979. It was a diminishing problem. The same could not be true of ICA

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  in view of its association with attendance allowance, the demand for and take-up of which has been rising sharply. Therefore, there is not a complete parallel between the two, even in financial terms.
  I am genuinely sorry not to be able to say something more to the taste of hon. Members who have spoken, but I hope that I have made the present position reasonably clear.
  Mrs. Beckett: I wish to make only two further brief comments on the issue. First, the Minister suggested that the Commission accepted that the invalid care allowance was outside the scope of the directive. Although I recognise that some remarks have been made about the fact that usually one is referring to the person who is made an invalid, and although it has been admitted that there is no directly comparable benefit in Europe to ICA, the directive states that
  "it would be desirable … not to exclude the benefit in question from the scope of the Directive."
  That appears to suggest that the matter does come, or should come, within the scope of the directive.
  I shall leave the Minister with one final thought to consider about the European Court's decision. I wish to press him on the date when people will be given the allowance, if the Government decide to do this, or are forced to do so. I noted with interest that when the Government introduced their new clause to abolish the half test, they made it retrospective to the date of implementation of the directive. Therefore, it would clearly be desirable, logical and would follow precedent to implement ICA from the date of the directive. If ICA is introduced, it should at least be from the date of the judgment on the Drake case rather than from the date on which people make individual claims, as it is at present. If it is right to abolish the half test from a consistent date, it is right to do so in abolishing the discrimination in ICA, should that happy day come. We all hope that it will, perhaps even in the next year. Tonight we have sought to clarify the Government's intentions and, therefore, I beg to ask leave to withdraw the motion.
  Motion and clause, by leave, withdrawn.

New Clause 16

  REMOVAL OF DISCRIMINATION IN OCCUPATIONAL PENSION SCHEMES
  'The Social Security Pensions Act 1975 and the Social Security (Miscellaneous Provisions) Act 1977 shall be amended to provide that all references to widows in these Acts shall now read "male and female spouses". '.—[Ms. Richardson.]
  Brought up, and read the First time.
  Ms Richardson: I beg to move, That the clause be read a Second time.
  I do not wish to detain the House long with this probing new clause. The House will know that in 1983 the European Community produced a draft directive on equal treatment in occupational pension schemes. It provided for equal treatment in access to schemes, entry ages, benefits, reimbursement of contributions, retirement ages, contribution rate, transfers, preserved benefits, and so on. However, there was a significant exclusion clause in the draft directive, which recognised the link with the provision of statutory state schemes. It permits the
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  deferment of compulsory application of the principle of equal treatment in retirement ages and benefit to a surviving spouse, until they are equalised at state level.
  Last year an amendment was tabled in the European Parliament, which was carried, to delete that clause. That has now gone to the Commission for consideration. I understand that the matter is still with the Commission, and I should be interested to hear from the Minister, who may have been involved, what progress has been made within the Commission about that. I hope that the Government are not dragging their feet. Although I have heard rumours about that, I await the Minister's reply.
  We seek to help the Government consider the amendment from the European Parliament. We have decided to table this new clause to the Social Security Pensions Act 1975—I am not sure whether the new clause is defective or whether it achieves my aim—to equalise benefits in the state scheme and, therefore, to pave the way for equalising treatment in occupational pension schemes in general.
  There is a genuine difference in the treatment of widows and widowers in pension schemes. In pension schemes in both the private and public sectors, the number of pensions provided for widows of male members rose sharply in the 1970s, but the provision of pensions for widowers did not rise so sharply. A recent study commissioned by the Equal Opportunities Commission showed that by 1979 89 per cent. of male members had such an entitlement to benefits for their spouses, but that the provision for female members' spouses was less universal. By 1983 only 33 per cent. of schemes automatically provided a widower's pension on death in service, and 55 per cent. did so only when the widower showed that he had been dependent on his wife. As society has traditionally viewed the wife as being dependent on her husband, it must be difficult for many men to feel that they are regarded as dependent on their wives. They should not have to do that.
  In many cases the widow of a male member receives not only a widow's pension, but a lump sum benefit. Therefore, it is extremely discriminatory in both the private and public sectors of pension schemes. Throughout the schemes in both sectors is the issue that widowers shall qualify only if they can show themselves to have been dependent on their late wives.
  We live in a different age, and it is time that we came to grips with the question of differentiation and discrimination in pension schemes, which, curiously, causes great resentment in both males and females. Female members of pensions schemes resent paying into a scheme and not being able to nominate their spouse, and their spouses feel resentful that they cannot qualify.
  8.30 pm
  The main argument for many years has been one of cost and of the difficulty of equalising schemes in the non-state sector. However, I am sure that the Minister will have seen a document published last month by the Equal Opportunities Commission called "Model of Equality." It was prepared for the Commission by Duncan C. Fraser and Co., Actuaries, and it is,
  "A Consulting Actuary's Report on the methods and costs of equalising the treatment of men and women in occupational pension schemes."
  The final comment is:

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  "We have also shown that equality of treatment in the provision of surviving spouses' pensions can be provided at relatively low cost."
  I hope that the Minister, who must have seen and studied the document, will consider carefully—although perhaps not through the new clause, which is probably not the right way to do it—how he can ensure in discussions with the Commission, or in any other way, that occupational pension schemes make equal provision for both sexes.
  Mr. Whitney: I can add little to the information that the hon. Lady has already given to the House. As she said, the equal treatment of women and men in occupational pension schemes continues to be under active consideration, and the European draft directive which aims at preventing discrimination in occupational pension schemes —not just contracted-out schemes —is being discussed in Brussels and in the House. She referred to the decision of the European Assembly to change the provision on the relationship between state schemes and occupational pension schemes. The matter is still being discussed at an official level committee in Brussels. It is too early for me to say what the outcome of those discussions will be.
  The Occupational Pensions Board believes —the Government agree with its view—that, although there are differences between survivors' benefits, mainly for widows and widowers in the state scheme, occupational pension schemes should not be required to introduce equality in those areas. Of course, there is nothing to prevent those responsible for occupational pension schemes from introducing equal treatment for men and women, and some schemes already make such provision.
  We recognise that there is a long way to go, but it must be accepted that all occupational pension schemes are set up voluntarily by employers. That point applies to many other matters that we have discussed during our consideration of the Bill. The voluntary element of the establishment of such schemes is important. The employer must decide whether new arrangements can be introduced and bear in mind all considerations, including possible additional expenditure. I recognise the hon. Lady's quotation from the report that there would be relatively low costs, but costs there would be.
  As my hon. Friend the Minister said, the Government support in principle the idea of equal treatment in all areas, including this one, so we have welcomed in principle the draft European directive. But at this stage it is more appropriate to pursue that objective by voluntary action than by legislation. I hope that, in the light of those remarks, the hon. Lady will accept that it would be premature to take action now.
  Sir Brandon Rhys Williams: I rise to support the new clause, and I apologise to the hon. Member for Barking (Ms. Richardson) for not being here at the beginning of her speech. I thought that she would make an extremely competent case and indeed she did. She does not need my support, but I wish to express some disappointment at what I just heard my hon. Friend the Minister say. Once again, the Department seems to be falling over backwards to emphasise the fact that employers introduce occupational pension schemes on a voluntary basis and, therefore, can be allowed to run them in a way that is contrary to the general movement of public opinion.
  One of the irreversible changes of the 20th century—it is certainly irreversible in the time scale that we can
  482
  contemplate—is the emancipation of women and the desire that they should be treated on an equal basis with men. That should certainly be the case, if possible, in their cash relationships with their employers. An occupational pension scheme should treat male and female contributors on a precisely unisex basis. As I said in Committee, it would be possible for that to be done, without distorting actuarial principles, if a little ingenuity were applied. It does not even require a tremendous extension of the cost of the scheme to treat male and female contributors on the same basis. Matters can be balanced in ways which I mentioned in Committee and which I shall not repeat now.
  I ask my hon. Friend the Minister to realise that, if the Government are to rely wholly on private occupational pension schemes to look after the earnings-related element of pension provision, these schemes must be in line with public opinion. If they continue to defy public opinion on the equal treatment of the sexes, that will be a nail in the coffin of the private occupational pensions movement. Women have votes and they should have justice in relation to their pensions.
  Ms. Richardson: I could hardly have replied to the Minister better. I welcome the hon. Member for Kensington (Sir B. Rhys Williams) to the feminist movement. I hope that in areas other than occupational pensions, in which he is a renowned expert, he will add his voice to complaints against discrimination.
  I am not happy with what the Minister said, because it seems that this will be one of those areas which are always hushed back. We are talking about unfairness and injustice, and I hope that the Minister realises that we do not intend to leave the matter there. There will be opportunities, now that the matter is with the Commission, for us to press the Government to find out what is happening and at least to ask the Government to take a positive stance in the Commission. The Minister did not say that they were doing so, but I hope that at least they will do that.
  On the understanding that we shall not let this matter go until the Government change their mind, I beg to ask leave to withdraw the motion.
  Motion and clause, by leave, withdrawn.

Clause 5

  ABATEMENT OF INVALIDITY ALLOWANCE, ETC., WHERE BENEFICIARY ENTITLED TO ADDITIONAL COMPONENT IN PENSION OR TO GUARANTEED MINIMUM PENSION
  Mrs. Beckett: I beg to move amendment No. 3, in page 2, line 24, after '(2B)', insert
  'Provided that nothing in this subsection shall empower an additional component to widow's pension to be deducted from the rate of invalidity allowance;'.
  I should say at once that if this amendment is not defective I shall be greatly astonished. All that we are doing here is trying to cast a little more light on what the Government are doing in this part of the Bill. When we debated these matters in Committee, the Government argued that it was legitimate to offset invalidity allowance against an earnings-related invalidity pension because the two were basically the same thing, and were granted on the same basis and for the same reason. We disputed that. We argued that the invalidity allowance was in place of

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  earnings ability lost, whereas the earnings-related component was for money that had been earned before disability occurred.
  It has been drawn to my attention since our debates in Committee that the people who will be most harshly and immediately affected by the change are widows. Although it is not likely, for the reason that I gave in Committee, that invalidity allowance and the earnings-related component are related to two different matters, that makes it all the more likely that no individual would have substantial sums on both, which militates against the effect of the change. However, a widow might have the maximum invalidity allowance on her own account and a substantial additional component on her husband's earnings. In that case, we are dealing with two completely different people and two completely different circumstances.
  The case that has been drawn to my attention is of a lady who receives £4·61 on her husband's earnings, which she will lose under the terms of the Bill. It has been put to me that other widows may lose more.
  The Government have a simple and logical choice here. They can say that our argument and the logic of our argument stand, that they really believe that these two things are the same and represent the same problem and therefore it is right to offset them against each other, and that they accept the case raised in this amendment and will not do anything to widows and will bring forward legislation accordingly; or they can say that, irrespective of the logic of the case, because what they are trying to do is to save money—as we on the Opposition Benches suspect—they will continue with the Bill as drafted, with its effect on widows.
  Mr. Newton: I certainly would not dream of accusing the hon. Lady of tabling technically defective amendments and, even if I had been advised that her amendment was technically defective, I would not seek to use that as an argument.
  I am in some uncertainty about the precise point that the hon. Lady has raised. It is not possible for a recipient of a widow's pension to have title to invalidity allowance unless she also has title to invalidity benefit or, if over retirement age, has elected to retain widow's pension rather than receive retirement pension. We certainly do not see any reason for treating widows in a way different from other people if they are in receipt of invalidity allowance and additional components, as there would be no material difference in the circumstances as between a widow and any other person who happened to be in receipt of both invalidity allowance and additional component.
  If I have understood the hon. Lady's remarks correctly, she is postulating a case in which the widow may be in receipt of additional component earned not by herself, as it were, directly, but by her husband and may in some way have at the same time retained entitlement to invalidity benefit on her own contribution and the result of her own work record. Moreover, that must have happened at such an early stage as to have entitled her to some significant amount of invalidity allowance, bearing in mind that the higher rates of invalidity allowance entail being disabled substantially at a very early age.
  I think that what I can most sensibly say is that I will look further at this point in the light of what the hon. Lady
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  has said. I am not persuaded immediately that there is something we ought to do to change the proposals here, but, since it is not a matter which I have had the opportunity to consider carefully, I should like to look at it, without commitment but in the spirit in which I always look at any point which the hon. Lady raises.
  Mrs. Beckett: I think it would be helpful if I sought further details of the case that was raised with me and passed them on to the Minister, and I will do that. In the light of what the hon. Gentleman said, I beg to ask leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  Mr. Newton: I beg to move amedment No. 5, in page 3, line 15, after 'component', insert
  'after any increase under section 9(3) of the Pensions Act but'.
  Mr. Deputy Speaker (Mr. Harold Walker): With this it will be convenient to take Government amendment No. 6.
  Mr. Newton: Essentially this is a technical amendment accompanied by a consequential drafting amendment. I shall say more if hon. Members wish, but otherwise not.
  Amendment agreed to.
  Amendment made: No. 6, in page 3, line 17, leave out 'the Pensions' and insert 'that'.
  8.45 pm
  Mr. Newton: I beg to move amendment No. 109, in page 6, line 4, leave out from 'Where' to end of line 17 and insert
  'a person—

  (a)is entitled immediately before the commencement of a provision contained in this section ("the amending provision") to a benefit specified in subsection (8) below ("the relevant benefit"); and

  (b)continues to be entitled to the relevant benefit after the commencement of the amending provision,

  until the relevant date the amending provision shall not operate in relation to him, so long as he continues to be entitled to the relevant benefit, in such a way as to reduce the total weekly rate of any benefits specified in subsection (8) below to which he is for the time being entitled to a rate lower than the total weekly rate of such benefits immediately before the commencement of the amending provision.

  (7) Where—

  (a)the conditions mentioned in subsection (6)(a) and (b) above are satisfied in relation to a person; and

  (b)he ceases to be entitled to the relevant benefit after the commencement of the amending provision; and

  (c)he subsequently becomes entitled to it again; and

  (d)the interval between the date of his ceasing to be entitled to it and the date of his becoming entitled to it again is eight weeks or less; and

  (e)the date of his becoming entitled to it again is earlier than the date in 1985 on which an order under sections 124 and 126A below comes into force,

  until the relevant date the amending provision shall not operate in relation to him, during any periods for which he is entitled to the relevant benefit in such a way as to reduce the total weekly rate of benefits specified in subsection (8) below to which he is for the time being entitled to a rate lower than the total weekly rate of such benefits immediately before the commencement of the amending provision.

  (8) The benefits mentioned in subsections (6) and (7) above are—

  (a)invalidity benefit;

  (b)Category A and Category B retirement pension; and

  (c)unemployability supplement,

  including any increase in respect of a dependant.

  (9) In this section "the relevant date" means, in relation to any person, the first date on which there comes into force an order under sections 124 and 126A below whose effect, taken with the effect of the amending provision, is more beneficial to him than the effect of subsections (6) and (7) above.".'.

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  This is a little more than a technical amendment, but it is not quite as horrifying as it looks from its length. It is concerned with tidying up the provisions which we debated in Committee at least as much as with changing them. There are two changes. One is the result of an undertaking that I gave in Committee, and one is the result of an awkwardness which we identified and wished to prevent.
  The hon. Member for Derby, South (Mrs. Beckett) will recall that when we discussed this in Committee I told her that if we were to introduce the overlap provisions at any time other than an uprating I would wish to respond to her suggestion to consider the arrangements for the period between introduction and the date of the first uprating. Although the Bill does not lay down a precise date of commencement for clause 5, there is certainly a possibility, perhaps even a likelihood, that we shall decide to implement this change a month or two in advance of the uprating. In those circumstances, I have thought it right to extend the transitional protection to include people who were in receipt of benefit at the date of introduction, who subsequently ceased to be so entitled but then became sick again before the date of the uprating and within eight weeks of the previous spell's ending. I think that is the point which the hon. Lady was concerned with in Committee, and subsection (7) of the amendment brings this into effect.
  The other change since Committee stage relates to the occasions when we shall operate the overlapping provisions for existing beneficiaries. As I have made clear, this will occur only when a person's total weekly benefit rate is due to be increased. This would normally be at an uprating, but there could be other occasions when a beneficiary receives an increase—notably when he or she became entitled to a dependency increase. Our original intention was to take account of the overlap on other occasions as well, but we concluded that this could lead to some difficulties, which again I will explain if need be, and we have decided to restrict the operation of the overlap provision for existing beneficiaries to uprating times only. That is achieved by various changes in subsections (6) and (7) as defined in subsection (9).
  Mrs. Beckett: I welcome what the Minister has said about seeking to give effect to discussions which we had in Committee. I take the opportunity of the tabling of this amendment to comment, mainly because our amendment which sought to delete the clause was not selected, although I do not criticise that decision, that it is worth drawing again to the attention of the House the fact that because of the operation of this clause, even with the improvements which the Minister has outlined, we shall be making a net saving on invalidity pensioners. Apart from the net saving that we make because we offset the increase given to them in one part of the Bill with the money removed in this part of the Bill, there will be a further net saving because of the delay which the Government intend to impose in paying the benefit by paying it in arrears. It would not be right to allow this part of the Bill to pass without pointing out again how strongly we disagree with such moves.
  Amendment agreed to.

Clause 7

  PENSION INCREASES IN RESPECT OF ADULT DEPENDANTS —EQUAL TREATMENT FOR MALES AND FEMALES ETC.
  Amendment proposed: No. 7, in page 7, leave out lines 4 to 9 and insert—

  (a)in subsection (1)(b), for the words "conditions specified in" there shall be substituted the words "requirements of either paragraph (a) or (b) or; and

  (b)the following subsections shall be substituted for subsection (2)—

  (2) The requirements referred to in subsection (1)(b) above are—

  (a)that the pensioner is residing with her husband;

  (b)that the pensioner is contributing to the maintenance of her husband at a weekly rate not less than the specified amount, and her husband is not engaged in any one or more employments from which his weekly earnings exceed that amount.

  (3) Regulations may provide that, for any period during w hich the pensioner is residing with her husband and her husband is engaged in any one or more employments from which he has earnings—".'—[Mr. Newton.]

  Mrs. Beckett: I should like to take this opportunity to ask the Minister whether the Government have yet made up their mind what they propose to do about equal treatment of earnings, what level the rule will operate at, whether it will be a cliff-edge rule or a graduated rule, and so on.
  Mr. Newton: I am sorry; obviously I ought to have sent the hon. Lady a copy of the answer to the parliamentary question which I answered earlier this week in which I said that our intention is to introduce the equal treatment earnings rule in this field at what seems to me to be the appropriate level—that is, the level of unemployment benefit, £28·45 per week, which the person in question would receive if he had been in work and became entitled to national insurance benefit in his own right. That is somewhat more generous than the existing rule applying to the husbands of invalidity benefit wives, but somewhat less generous than the rule currently applying to wives of invalidity benefit husbands. It is our intention, in the interests of simplicity, that it should be a cliff-edge rule.
  Amendment agreed to.

Clause 8

  INVALIDITY PENSION
  Amendment made, No. 8, in page 9, line 6, leave out 'that Act or the Social Security Pensions Act 1975'
  and insert
  'this Act or the Pensions Act'.—[Mr. Newton.]

Clause 9

  PERIOD OF ENTITLEMENT
  Mrs. Beckett: I beg to move amendment No. 9, in page 9, line 37, leave out 'any' and insert 'all'.
  Mr. Deputy Speaker: With this it will be convenient to take Government amendment No. 10 and amendment No. 11, in page 9, leave out from line 41 to line 7 on page 10.
  Mrs. Beckett: Amendments Nos. 9 and 11 make slightly different points. Amendment 9 is another of these amendments where one bungs down any old thing to raise an issue. Through it, I am seeking to clarify the assurance

  487
  given to me in Committee at various stages by both the Under-Secretary and the Minister for Social Security. It was to the effect that, although statutory sick pay is not payable over the same number of individual days as sickness benefit used to be, nevertheless the same period of time that would be involved in the 168 days of sickness benefit would be covered by days of statutory sick pay. That would be a smaller number of days although they would cover the same period of weeks, because there would be no difference in the period of time that enabled one to draw invalidity benefit as between sickness benefit and statutory sick pay. I hope that I have not made that too confusing. Both Ministers assured me that it was the Government's intention that there should be no such differences, and that the Bill would allow that.
  On a number of occasions, and from a number of different quarters, I have had representations from organisations, trade unions, charities and people who deal with this sector to say that, whatever the Government's intention, the Bill does not allow that. Once again, I ask the Minister and the Department, which, in all charity, has sometimes, as one can see from all these amendments, not got the drafting right, to look at this issue again because, while the Government may be convinced of what the Bill says, nobody else is.
  Amendment No. 11 raises a different point, but one that we wish to raise again with the Minister. It concerns the way in which the statutory sick pay is treated. Here again, there is some difficulty. The argument that the Minister puts against deleting this clause, as we wish to do because that would remove a number of anomalies, is twofold. First, it is because people should arrive at invalidity benefit in the same way, and second it is to do with whether statutory sick pay should be treated as earnings or benefit.
  It is possible and logical to make a case for treating statutory sick pay as earnings, or to make a case for treating it wholly as a benefit. Moreover, it is not possible and logical to treat it as earnings on one occasion, when it is advantageous for the Government to do so and disadvantageous to the claimant, and to treat it as benefits on another occasion when it is advantageous for the Government to do so and disadvantageous to the claimant. The Government consistently do that.
  We wish to press the point and to ask the Minister to look again at deleting this clause. We dealt with the attachment of earnings earlier in the debate, and the Under-Secretary advised me that it was not right or proper to make changes in the Law Reform Act. The Department in that case advised that statutory sick pay should be treated as earnings. We are anxious to help the Government to achieve consistency in their treatment of this payment.
  The Minister also argued that it is a matter of equal treatment that people should arrive at the invalidity benefit under the same circumstances, whatever the circumstances of their previous illness. However, they are not in the same circumstances necessarily as those who are on statutory sick pay and then, having been ill for 28 weeks, become entitled to invalidity benefit. Throughout that period, they have continued to pay national insurance contributions and perhaps tax. As they have made extra payments, it is not wholly unjust that they should have extra entitlement at the end.
  488
  We accept the Minister's argument that young people starting work may not be as effective as we thought at first, but we still believe that married women who return to work, particularly those who paid reduced contributions at one time and who have now gone back to work and are paying full stamp, will be affected. The Minister accepts that the other anomalies that we raised in Committee exist, but he does not think that they are serious enough to make it worthwhile to do anything about them. We do not accept that.
  Once again, we ask the Minister to look at the principle that we raise throughout the amendments and to make sure that the anomalies that we identified in Committee are removed. That is more important than being able to say that we are treating people in exactly the same way for invalidity benefit, when they are not under the same circumstances.
  Mr. Newton: Amendment No. 9 may have resulted from some misunderstanding of why the Government have tabled amendment No. 10. Our amendment is a drafting amendment, designed to avoid possible ambiguity in the existing wording. It does not affect the aim of the provision as drafted. However, we think that the amendment tabled by the hon. Member for Derby, South (Mrs. Beckett) would, taken with the provisions of section 15A(2), have the effect of disadvantaging certain young people and other recent entrants to the national insurance scheme by preventing them from qualifying for invalidity benefit. I am sure that that is not what the hon. Lady intends. I can perhaps best explain why amendment No. 9 has that undesirable effect by setting out what led us to table amendment No. 10.
  Section 15A(1) enables regulations to be made to provide that days of entitlement to statutory sick pay may be deemed to be days of entitlement to sickness benefit and thus count towards the 168-day qualifying period for invalidity benefit. The regulations will spell out precisely which days of SSP can be treated in this way. The intention will be to ensure that an employee who has been sick for 28 weeks in the same period of entitlement will become eligible for invalidity benefit, subject to the requirement in the following section 15A(2) that he satisfies the contribution tests for sickness benefit.
  Our advice is that the existing wording of "any days" might be construed as meaning precisely what the hon. Lady's amendment provides, that is that all the days on which there was entitlement to SSP will automatically be deemed under the regulation as days of entitlement to sickness benefit. We do not intend or want this to happen. Although in most cases all days of SSP entitlement will be deemed in this way, there will be occasions when regulations will need to provide that only part of the period on SSP will be so deemed. This is to cater for young people and recent entrants into national insurance who may only satisfy the first contribution test for sickness benefit as a result of the national insurance contribution conditions they have paid on the SSP itself. Hon. Members who have served on the Standing Committee will recall that we gave the assurance that these people would not be excluded from invalidity benefit and would be eligible for the special credits to get them on to state sickness benefit in the same way as at present. I am happy to repeat this assurance. This will be provided for in regulations.
  If the hon. Lady's amendments were accepted, it would mean that some of these new entrants would not be

  489
  covered for invalidity benefit because they would fall foul of the provision contained in section 15A(2) that the employee must have satisfied the contribution conditions for sickness benefit on the first of the days deemed to be days of entitlement to that benefit. He might not have satisfied that test on the first day of SSP entitlement but would do so during the course of such entitlement.
  9 pm
  I hope that I have said enough on this extremely complex matter at the very least to persuade the hon. Lady that it is not not quite as clear-cut as she sought to suggest and to make it clear also that the Government are acting with good will and with intended generosity in the prosposals which they have put forward. I think I have now spoken to amendment No. 10 as much as I need to in the course of speaking to amendment No. 9.
  In regard to amendment No. 11, I considered carefully the extremely well set out and argued letter that the hon. Lady sent me recently and to which I responded as fully as I could two or three days ago. There is some difference of opinion between us about the importance of different considerations. She has raised a number of possible difficulties on one side of the balance. I have emphasised our concern to ensure fair play between those in receipt of sickness benefit and those in receipt of statutory sick pay on the other side of the account.
  I am not at the moment persuaded any more than I was when I read the hon. Lady's letter that we should change the legislation, but I would not rule out considering a change at some time in the future if she can persuade me that she is right and I am wrong. As she has come close to doing so on at least one issue that we discussed earlier this evening, she should not lose all hope. I am afraid I cannot more completely fulfi I those hopes at this point in our discussion.
  Mrs. Beckett: I may not have made myself completely clear. Amendment No. 9 was tabled before I had the opportunity to see amendment No. 10. In my opening remarks I suggested that amendment No. 9 might be defective but that I simply wanted to use it as an opportunity to raise the issue of whether the Bill was correctly drafted with regard to the way in which SSP days would be considered. I hope that the Minister is right. No doubt if people still think that the Bill is not adequately drafted they will come back to both of us on that point. Having said that, and recognising that on amendment No. 11 we continue to differ, I beg to ask leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  Amendment made: No. 10, in page 9, line 37, leave out 'any days' and insert
  'such days as may be prescribed'.—[Mr. Newton.]
  Mrs. Beckett: I beg to move amendment No. 12, in page 10, line 12, leave out 'larger'.
  Mr. Deputy Speaker: With this amendment it will be convenient to consider amendment No. 13, in page 10, line 12, after 'weeks', insert 'not less than 13'.
  Mrs. Beckett: These are simple amendments by which we hope to extend the linking period in statutory sick pay. Even if the Minister cannot accept the amendments, which we believe have merit in that they would restore the original linking period of 13 weeks which was in force before the Social Security Act 1980, I hope that he will at
  490
  least be able to tell us what the current position is with regard to the Department's proposals. So far as I recall, the Department in its consultation paper believed that we should retain the existing eight week linking rule, but it had not put that in the Bill in case it received representations that the period should be reduced.
  We sought in Committee, and we do so again now, to encourage the Government to retain the period of eight weeks and preferably to consider restoring the 13-week period. Certainly they should not reduce the period, as I believe some people might have been urging them to do.
  Over the period that the Government have been in office they have made a substantial number of reductions and cuts in sickness and invalidity benefit entitlement. I can think of the abolition of earnings-related supplements, the cuts in industrial injury and sickness benefit, the abatement of 5 per cent. in sickness benefit and the phasing out of additions for children. None of those has been restored.
  To go back to the 13-week linking period, which was of assistance to people in linking separate periods of sickness, would mean that people would less often have to serve fresh waiting days. There would be a substantially shorter period before people who have frequent spells of sickness would become entitled to qualify for invalidity benefit.
  This would be a beneficial change. The Government have made so many disadvantageous changes that they could well make at least one beneficial change. We hope that they will use this opportunity to tell us that they do not intend to make a further reduction in the period in the legislation.
  Mr. Whitney: I am sorry that the hon. Lady referred to the disadvantageous changes that she alleges the Government have made when she seems to have spent quite a lot of time this evening congratulating my hon. Friend the Minister of State on the generosity shown by the Government on some matters.
  We accept that there is a strong case for extending the linking period from the present two weeks. We do not think a 13-week period would be justified. As the hon. Lady knows and as my hon. Friend the Minister of State said in Committee, the Government have a strong preference for eight weeks. It is important to consult carefully. The consultations which are continuing should not pre-empted. I am not in a position to say more at present than that we are still in consultation with the appropriate parties. We certainly believe that the 13-week period proposed in the amendment would not be justified.
  Mrs. Beckett: I must, of course, accept that the Minister was unlikely to accept the restoration of the 13-week period. But I am sorry that he still cannot tell us whether the Government intend to stick to eight weeks. I hope that they will do so. However, I beg to ask lease to withdraw the amendment.
  Amendment, by leave, withdrawn.
  Mr. Whitney: I beg to move amendment No. 14, in page 10, line 14, at end insert—

  '(4A) The following subsection shall be inserted after subsection (4) of section 3 of that Act (period of entitlement)—

  "(4A) The Secretary of State may by regulations —

  (a) specify circumstances in which, for the purpose of determining whether an employee's maximum entitlement to statutory sick pay has been reached in a period of entitlement as between him and an

  491
  employer of his, days falling within a previous period of entitlement as between the employee and any person who is or has in the past been an employer of his are to be counted; and

  (a)direct that in prescribed circumstances an employer shall provide a person who is about to leave his employment, or who has been employed by him in the past, with a statement in the prescribed form containing such information as may be prescribed in relation to any entitlement of the employee to statutory sick pay."..

  The amendment arises out of one of the proposals contained in the consultation paper that the Department issued to employers in employees' interests at the end of last year. It enables regulations to be made to define the circumstances in which periods of entitlement to SSP with different employers are to count as one in calculating the employee's maximum entitlement of 28 weeks. It also enables the regulations to lay down the circumstances in which the employer is required to issue to his employee, at the time he leaves, a statement about the period for which he had entitlement to SSP.
  I commend the amendment to the House.
  Amendment agreed to.
  Mrs. Beckett: I beg to move amendment No. 15, in page 10, line 26, at end insert —

  '(6) Leave out section 7(1) to that Act and insert —

  "(1) Statutory Sick Pay shall be payable by an employer at the weekly rate of —

  (a)£54.80, in a case where the employee's normal weekly earnings under his contract of service with that employer are not less than £68;

  (b)£46 in a case where those earnings are less than £68, but not less than £50.50;

  (c)£37 in any other case.".'.

  Mr. Deputy Speaker (Mr. Harold Walker): With this, it will be convenient to discuss amendment No. 16 in, page 10, line 26, at end insert —
  '(7) In section 26(2) of the Act leave out "in the relevant period" and insert "over the 24 weeks prior to the beginning of the period of illness or the eight weeks so prior, whichever gives the higher sum.".'
  Mrs. Beckett: In these amendments we seek to improve the rates of statutory sick pay and to find out whether it is possible to get the Government to agree to changes in the way that normal weekly earnings are assessed.
  I have already mentioned the disadvantageous changes. I am sorry if I hurt the Under-Secretary of State's feelings, but the Government's record is there for all to see. The Government have made disadvatageous changes in sickness and invalidity provision. As a result of those changes, people have lost quite substantially in the recompense available to them when sick. Therefore, we thought that we now had a good opportunity to raise the issue of the inadequacy of rates of statutory sick pay. We recognise that there are people who are low paid or who are single and who might, in some circumstances, be better off under SSP than under sickness benefit. But unfortunately those who are likely to be worse off are those who are most vulnerable, or those with families.
  In our amendment we suggest that the top rate of SSP should be raised to the married rate of invalidity pension, and we have made similar adjustments in the proposal for the other levels of statutory sick pay. Amendment No. 16 refers to the assessment of normal weekly earnings. Although I do
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  not expect much change from the Minister over amendment No. 15, I hope that he will agree to consider the issues raised in amendment No. 16. What was perhaps not wholly desirable but liveable with in terms of statutory sick pay extending over eight weeks becomes much more difficult and an injustice when dealing with statutory sick pay paid over 28 weeks. As things stand, the level of statutory sick pay to which one becomes entitled is governed by normal weekly earnings. They are worked out according to what someone receives in the eight weeks before he becomes ill. At any time there will be occupations that involve people being on retainers. For example, dinner ladies in the school meals service may spend a substantial period of time on retainers, when their earnings are not only nowhere near their normal level, but very low indeed. As we move more and more towards short-time and part-time working, there will be greater variations in the level of earnings that someone might receive immediately before becoming ill. The situation is not very good at the best of times, but given that we are talking about someone who might be receiving this level of statutory sick pay for six months or for the full period before he becomes entitled, say, to invalidity benefit, it is a serious matter.
  I understand that the TUC has put forward a proposal involving a perhaps more sensible period of 24 weeks that would provide a fairer basis for calculating normal weekly earnings. But we thought it right to put forward either eight or 24 weeks, depending on which is the more beneficial figure for the claimant. That would make a change from the way that most things work under the Government, and it would be a beneficial change too. I hope that the Minister will look seriously at this issue because it is causing problems now and the Bill will cause much more serious problems.
  Mr. Whitney: Amendment No. 15 proposes that there should be an increase in the statutory sick pay rates from April 1986 of over 23 per cent. The rates set out in section 7(1) of the 1982 Act were carefully selected so as to ensure that at the start of the scheme employees as a group would receive broadly the same extra income from the SSP scheme after the deduction of tax and national insurance contributions as they would have received by way of sickness benefit had that been taxed. I estimate that the hon. Lady's proposals would result in an additional cost of about £100 million in a full year. These changes in the rates would disrupt the financial relationship between statutory sick pay and sickness benefit and would mean that we were treating differently people in much the same situation when sick for short periods.
  As for the second amendment, I believe that it would have unfortunate effects that were not intended. We believe that eight weeks is a reasonable period. It is long enough to give a fair indication of what average earnings are but it is not so long as to put any further and onerous problem of accounting on to the employer. If employers are to stand a chance of operating the scheme correctly and if employees are to get the right amount of money, it is a consideration that has to be borne in mind. I believe that the eight week period is entirely justified. The 24-week period would have undesirable effects, including the imposition of an unnecessary burden upon employers.
  Mrs. Beckett: I cannot accept the Minister's argument. He cannot properly have considered the effect on these groups of workers. Although there may not be many of them, the effect upon them will be serious when they find

  493
  themselves in circumstances in which they are given a retainer for a period of weeks. However, since we are unlikely to make any headway with the Minister on this point, I beg to ask leave to withdraw the amendment.
  Amendment, by leave, withdrawn.

Clause 10

  RIGHT OF EMPLOYERS TO AMOUNTS IN RESPECT OF CONTRIBUTIONS
  Mrs. Beckett: I beg to move amendment No. 17, in page 10, line 27, leave out clause 10.
  Mr. Deputy Speaker: With this, it will be convenient to discuss Government amendment No. 18, and No. 19, in page 11, line II, leave out subsection (2).
  Mrs. Beckett: By proposing the deletion of this clause we are seeking to draw attention to the Government's proposal to recompense employers by the rebate of a whole year's contribution for the burden that they say they are putting upon employers by increasing statutory sick pay to 28 weeks. A remarkable feature of the Bill is that on the one hand the Government argue that it is no trouble at all to employers to extend SSP to 28 weeks; they are all highly efficient and are managing very well. On the other hand, out of the kindness and generosity of their heart, the Government have decided to give to employers a year's worth of rebate.
  We do not wish to speak against employers having the rebate, but we wish to speak very much aginst the different treatment of employers and employees. While employers will receive a rebate, employees will continue to have to pay the full amount and will get no benefit whatsoever. I would remind the Minister of what was said by his predecessor, the hon. Member for Hornsey and Wood Green (Sir H. Rossi), in 1982 about the payments due from employers and employees:
  "The earnings related contribution schemes are geared to the basic concept of employers and employees both paying contributions on all assessable earnings. It is alien to the scheme's structure to expect employees but not their employers to contribute on one type of assessable earnings."
  We agree entirely with that judgment. We think that it still stands and that the Government are making a mistake.
  Mr. Whitney: The hon. Lady makes a very unconvincing case in seeking to compare what is happening to employers and to employees. There is no damage whatever to the interests of employees. Those interests are very well preserved. Like hon. Members in all parts of the House, we recognise that the extension and operation of the SSP scheme will place burdens on employers, and we are taking cognisance of that burden by offering compensation. I therefore reject amendment No. 17. For the same reasons, I reject amendment No. 19 which would preclude retrospective application of the compensation arrangements from 6 April 1985.
  9.15 pm
  Government amendment No. 18 is purely technical to take account of the fact that reimbursement to the employer of the cost of secondary national insurance contributions on SST may in practice be carried out by the Inland Revenue on behalf of the DHSS rather than by the DHSS itself.
  Mrs. Beckett: I beg to ask leave to withdraw the amendment.
  494
  Amendment, by leave, withdrawn.
  Amendment made: No. 18, in page 10, line 44, after 'State', insert
  'or by the Commissioners of Inland Revenue on behalf of the Secretary of State'.—[Mr. Whitney.]

Clause 11

  REGULATIONS
  Amendments made: No. 129, in page 12, line 4, leave out 'or'.

  No. 130, in page 12, line 11, at end insert —

  '(g) made under section 41B(3) of the Social Security Pensions Act 1975 before the expiry of the period of six months beginning with the commencement of section [Amendments relating to protection of pensions] (5) above; or

  (h) made under any enactment before the expiry of the period of six months beginning with the commencement of section [Amendment relating to protection of pensions] (5) above and contained in a statutory instrument which states that it contains only provisions consequential on that subsection or such provisions and regulations made under section 41B(3) of the Social Security Pensions Act 1975: .—[Mr. Whitney.]

Clause 15

  EXTENT
  Mr. Whitney: I beg to move amendment No. 20, in page 13, line 3, after 'paragraphs', insert '0,'.
  Mr. Deputy Speaker: With this it will be convenient to take Government amendment No. 65, amendment No. 66, in schedule 2, page 31, line 26, leave out from 'at' to end of line 27 and insert
  'the offices of the Inland Revenue Superannuation Funds Office'. and Government amendments Nos. 73, 90 and 91.
  Mr. Whitney: Amendment No. 65 substitutes a new version of section 56B in schedule 2 which provides for the establishment of a register of occupational pension schemes. In particular, the new version provides that the registrar may be a body corporate rather than an individual and that some of the work may be privatised. The other amendments are consequential in various degrees of detail.
  We are listening very carefully to the points raised about the proposed register. As it is such an important issue, I must detain the House for a few moments on it. There is fairly general support for the aims behind the proposal, but there is widespread doubt as to whether a full-blown public registry is justified or needed to achieve the aims which are generally recognised. We told the Committee that we should be considering all the options with an open mind, and that is what we are doing. If. for example, rather than setting up a new institution we cart develop the role of one or more existing bodies to encompass the required functions, we shall consider that Again, if a registry can be provided economically on our behalf by the private sector, that would also be considered. The amendments give us full flexibility, once the decision has been taken, as to how to operate any register that is to be run. The nature and extent of its functions are also left open to subsequent decision in the light of more detailed consideration of the options.
  We have set up an official steering group to make proposals about the way in which the register would work. The detailed task of identifying and evaluating options has

  495
  been given to a small project team under the joint leadership of an independent management consultant, Thornton Baker Associates, and an official of the Department. The terms of reference for the project team emphasise, among other things, the need for economy in the use of staff and the need to avoid placing unreasonable burdens on schemes. We shall examine very carefully the possible problems of confidentiality which a public register might encounter.
  At this stage, we have no preconceptions about how our aims, which are very clear, may best be achieved. The decisions can be made only in the light of the detailed evaluation of the various options which is now in progress. Our overriding concern is to identify an efficient and cost-effective solution which does not put undue costs and problems on the pensions industry which, as we all agree and as my hon. Friend the Member for Kensington (Sir B. Rhys Williams) emphasised, is an important part of our activities.
  Mrs. Beckett: I am more than a little astonished at what the Minister has said. I had understood from the amendment that this was probably yet another attempt to privatise something from which somebody could make a profit. I was more than a little amazed to hear the Minister say that it might be good for the registrar to have agents rather than there to be a fully public register in the interests of confidentiality. I thought that the whole point of having a register was that it would be public and readily available.I note that the Government are deleting some of the original and detailed descriptions in the Bill.
  We are deeply unhappy about the suggestion that the registrar's functions might be privatised and have grave doubts about the registrar appointing agents. That seems to suggest that information might be scattered all over the place, thus making it difficult for the Government, let alone anyone else, to use it. As it seems from the Minister's comments that that is the whole idea, I wonder why the Government are bothering to go ahead with rules for the registrar.
  I do not wish to nit pick, but I have read amendment No. 73 at least eight times. It is utterly meaningless and perhaps should not exist. It suggests that we leave out subsection (2) and insert subsection (10), and yet the amendment is in subsection (10) and refers to subsection (2). There might be an error there. It might be me, but I think it might be the Department.
  Mr. Galley: The redrafting is to be greatly welcomed. In Committee, I mentioned the possibility of the register being operated by the Occupational Pensions Board or by the superannuation funds office of the Inland Revenue, or a combination of both as they operate from the same building and apparently have all the knowledge and expertise needed to run a register. Is that option still open to consideration? Will my hon. Friend confirm that the Government have set themselves firmly against a new Department with about 100 civil servants?
  Mr. Whitney: The hon. Member for Derby, South (Mrs. Beckett) should not get too excited. The amendments give my right hon. Friend the greatest flexibility when considering carefully the outcome of the consultations which we are convinced are important because of their inevitably long-standing nature which is
  496
  inherent in the pension scheme. I understand that the word "privatisation" sends bad vibes down the spines of Opposition Members. No decisions have been made. The research and consultations are continuing. I must extend the same reply to my hon. Friend the Member for Halifax (Mr. Galley). None of the options is closed.
  The essence of these provisions is to secure safeguards for pension scheme members. The hon. Lady must understand that considerations of confidentiality are important to those who operate pension funds. I understand that the drafting problem to which she referred is a correction of a cross-reference in section 56C back section 56B, but if there is any remaining confusion I shall be happy to write to the hon. Lady.
  Amendment agreed to.

Clause 16

  COMMENCEMENT
  Amendments made: No. 21, in page 13, line 18, at end insert
  'section [Entitlement of married women to Category A retirement pensions]:'.
  No. 131, in page 13, line 18, at end insert
  'section [Amendments relating to protection of pensions] (5) and (6);'.
  No. 136, in page 13, line 20, at end insert 'section [Dock workers]:'.-[Mr. Whitney.]
  Mr. Whitney: I beg to move amendment No. 137, in page 13, line 20, at end insert 'section 10;'.
  Mr. Deputy Speaker: With this we may discuss Government amendments Nos. 141, 143 and 144.
  Mr. Whitney: These amendments are concerned with commencement. They make the provisions mentioned come into effect on Royal Assent.
  Amendment agreed to.
  Amendments made: No. 138, in page 13, line 20, at end insert
  'section [Housing benefits-subsidy] (1)(b) and (c) and (2);'.
  No. 139, in page 13, line 20, at end insert
  'section [Power to extend Pneumoconiosis etc. (Workers' Compensation) Act 1979];'.
  No. 140, in page 13, line 20, at end insert
  'section [Pensions and gratuities for members of certain Boards];'.
  No. 141, in page 13, line 20, at end insert 'section 11;'.
  No. 142, in page 13, line 20, at end insert 'section [Other regulations];'.
  No. 143, in page 13, line 20, at end insert 'section 12;'.
  No. 144, in page 13, leave out line 21.
  No. 161, in page 13, line 34, at end insert
  '(2A) The following provisions of this Act—

  section [Entitlement to benefit dependent on claim];

  section 13(1), so far as it relates to paragraphs 3C, 3D and 4D of Schedule 4;

  section 13(2), so far as it relates to the repeals in sections

  79, 82 and 90 of the Social Security Act 1975, shall come into force at the end of the period of 6 weeks beginning with the day on which this Act is passed.

  (2B) If a person—

  (a)was entitled to benefit (as defined in Schedule 20 to the Social Security Act 1975) in respect of a period before the date on which the provisions mentioned in subsection (2A) above come into force or was treated as having been so entitled; and

  (b)would nothave been so entitled or, as the case may be, treated as so entitled, if those provisions had then been in force; and

  (c)claims benefit in respect of a period beginning on or

  497

  after the date on which those provisions come into force; and

  (d)the question of his entitlement to the benefit which he claims depends on whether he was previously entitled or treated as entitled to that or some other benefit, the provisions mentioned in subsection (2A) above shall be disregarded for the purpose of determining whether he is entitled to the benefit which he claims.'

  No. 22, in page 13, line 35, leave out 'Part III of the Act' and insert
  'Section 9 and [Medical evidence] above'.
  No. 23, in page 13, line 38, leave out 'provision' and insert
  'and consequential provision' (including provision modifying any enactment contained in this or any other Act)' .—[Mr. Whitney.]

New Schedule

  MISCELLANEOUS AMENDMENTS RELATING TO STATUTORY SICK PAY
  Attachment of Earnings Act 1971 (c.32)

  (1). In section 24(1) of the Attachment of Earnings Act 1971 (meaning of "earnings"), the following paragraph shall be inserted after paragraph (b)—

  "(c) by way of statutory sick pay.".

  Social Security Act 1975 (c. 14)

  (2). In subsection (8) of section 22 of the Social Security Act 1975 (maternity allowances) after the word "above" there shall be inserted the words "and Schedule 3, Part I, paragraph 3".

  (3). In section 36 of that Act (severe disablement allowance), the following subsection shall be inserted after subsection (4)—

  '(4A) A person shall not be entitled to a severe disablement allowance for any day which as between him and his employer falls within a period of entitlement for the purposes of statutory sick pay.

  Social Security and Housing Benefits Act 1982 (c. 24)

  (4). The following subsections shall be inserted after subsection (6) of section 3 of the Social Security and Housing Benefits Act 1982 (periods of entitlement)—

  "(6A) In a case where the employee's contract of service first takes effect between two periods of incapacity for work which by virtue of section 2(3) of this Act are treated as one, the period of entitlement begins with the first day of the second of those periods.

  (6B) In any case where, otherwise than by virtue of section 4(2)(b) of the principal Act (exclusion of liability where earnings are below the lower earnings limit), an employee's earnings under a contract of service in respect of the day on which the contract takes effect do not attract a liability to pay secondary Class 1 contributions subsections (6) and (6A) above shall have effect as if for any reference to the contract first taking effect there were substituted a reference to the first day in respect of which the employee's earnings attract such a liability.".

  (5). The following provisions of that Act (which relate to certain payments wrongly made)—

  (a)section 24; and

  (b)paragraphs 7 to 11 of Schedule 2,

  shall cease to have effect.

  (6). —(1) In subsection (1) of section 26 of that Act (interpretation) the following definition shall be substituted for the definition of "employer"—

  "'employer', in relation to an employee and a contract of service of his, means a person who under section 4 of the principal Act (liability to pay Class 1 contributions) is, or but for subsection (2)(b) of that section (exclusion of liability where earnings are below lower earnings limit) would be, liable to pay secondary Class 1 contributions in relation to any earnings (within the meaning of that Act) of the employee under the contract;".

  (2) Sub-paragraph (1) above shall not have effect in relation to periods of entitlement (within the meaning of section 3 of that Act) beginning before the commencement of this paragraph.

  498

  7. In section 26(2) of that Act for the words "his average weekly earnings in the relevant period" there shall be substituted the words "the average weekly earnings which in the relevant period have been paid to him or paid for his benefit".'.

  Brought up, read the First and Second time, and added to the Bill.—[Mr. Whitney.]

Schedule 1

  TRANSFER AND REVALUATION
  Mr. Whitney: I beg to move amendment No. 25, in page 15, line 13, leave out 'ceases' and insert
  'has ceased, whether before or after the commencement of this section,'.
  Mr. Deputy Speaker: With this we may discuss Government amendments Nos. 26 and 27.
  Mr. Whitney: These amendments are technical. We want a transfer premium to be payable even if either or both of the events mentioned in subsections (1)(a) or (b) took place before section 44A comes into operation. That is not achieved at present; these amendments will ensure that it is.
  Amendment agreed to
  Amendments made: No. 26, in page 15, line 16, leave out 'is' and insert 'has been'.
  No. 27, in page 15, line 28, leave out from 'person' end of line 29 and insert
  'within a prescribed time after the prescribed event'.
  Mr. Whitney: I beg to move amendment No. 28, in page 15, line 34, leave out from 'under' to end of line 38 and insert
  'section 44 above, except that —

  subsection (6) shall be disregarded; and

  the Secretary of State shall apply the actuarial table prescribed for the purpose of calculating the amount of an accrued rights premium in such manner as may be prescribed.'.

  This is a technical amendment. It is intended that transfer premiums should be calculated in the same way as accrued rights premiums except that section 44(6) should be disregarded. There is, though, a difference. Transfer premiums can fall due many years after contracted-out employment has ended. We therefore need to be able to relate the premium to the date the application to pay it is made. This means that the amount of the premium will be related to the time the member exercises his transfer option and not to when his pensionable service ended.
  Amendment agreed to.
  Mr. Whitney: I beg to move amendment No. 34, in page 18, line 2, leave out 'to provide the amount' and insert
  'so far as what they were liable to provide is'.
  Mr. Deputy Speaker: With this we will discuss Government amendments Nos. 36 and 37.
  Amendment No. 40, in page 19, leave out from beginning of line 11 to end of line 10 on page 20, and Government amendments Nos. 41, 42 and 43.
  Mr. Whitney: This is another technical amendrnent because the Life Offices Association pointed out the differences between the words "benefit" and "amounts". I shall give further details should the House wish that.
  Amendment No. 37 results from a point made by my hon. Friend the Member for Kensington (Sir B. Rhys Williams). We propose to make a regulation giving the

  499
  power to deal with the problems that he raised. One of them is that the sums paid under policies can be paid only to people for whom the scheme provided for payment. The problem arises when the proceeds of the policy exceed the maximum benefit levels permitted by the Inland Revenue for tax approval. At present any excess can be used to provide benefits for other people or returned to the scheme. The Bill as drafted would not permit that, which means that the insurance company would retain any excess. I congratulate my hon. Friend on bringing that point to my attention.
  Amendment No. 40 has the effect that new section 52D provides that people who choose or consent to a buy-out should, in the event of the insurance company failing to bear any resulting loss—I am sorry, this is an Opposition amendment.
  Amendments Nos. 41, 42 and 43 are technical amendments.
  9.30 pm
  Mrs. Beckett: The Minister has already half moved or half replied to our amendment. We wished to draw attention again to the fact that in certain cases a member of a scheme will not have his or her shortfall in guaranteed minimum pension underwritten by the Department; when, as the Minister said, the member has consented to a buyout and the insurance company has failed. Then, a portion of the guaranteed minimum pension might not be covered by the Policyholders Protection Act or by the Department. We recognise that such cases will be rare and that the amounts of benefit involved will be small. For that very reason we hope that the Government can do something about such cases.
  Mr. Whitney: We recognise that people should be given as much choice as possible. However, part of that principle is that they should take some of the consequences of their own decisions. The amounts concerned in the shortfall to which the hon. Lady referred are small, as she said. The Policyholders Protection Act will safeguard 90 per cent. of the guaranteed minimum pension, so that we are talking about a maximum of 10 per cent. of the guaranteed minimum pension rights. We believe, therefore, that the Opposition amendment should be rejected.
  Amendment agreed to.
  Amendments made: No: 36, in page 18, line 3 leave out from beginning to 'secured' in line 4 and insert —
  '(3) In this section "appropriately secured" means'.
  No. 37, in page 18, line 22 after 'that', insert
  'except in such cases as may be prescribed,'.-[Mr. Whitney.]
  Mrs. Beckett: I beg to move amendment No. 39, in page 18, line 38, after 'widow', insert
  'and of any other contingent beneficiary who can be identified at the time the policy is effected.'.
  Mr. Deputy Speaker: It will be convenient for the House to consider at the same time Government amendments Nos. 154 to 160.
  Mrs. Beckett: We raised this issue in Committee, when we asked for cover for contingent beneficiaries and not just for widows and widowers. We wanted them to have their interests taken into account when somebody was deciding to make changes in their pension provision. It was said in Committee that the Department would look
  500
  into the matter to see whether something could be done. We are now providing the Minister with an opportunity to say on what grounds it was decided not to take any action.
  Mr. Whitney: As the hon. Lady said, we promised in Committee to look at the whole subject, and we have done that. We have some sympathy with the points that the hon. Lady made, but our purpose in this provision is to ensure that the legal position on buy-out is clear. It does not make radical changes to what is a permissible buy-out. We are concerned, I emphasise, only with benefits above the guaranteed minimum pension level.
  Guaranteed minimum pensions are already adequately protected on buy-out. To impose the requirement suggested by the amendment would involve administrative expense for the schemes, even if the whereabouts of existing beneficiaries were known. The need to obtain consent could, moreover, prevent buy-outs, even if the same contingency benefits were provided by the policy.
  Buy-out usually means that benefit rights change, and it would be unreasonable to prevent a buy-out simply because a contingent beneficiary preferred one benefit to another. We have considered the proposition but, for the reasons I have given, I urge the House to reject it.
  I come to amendments Nos. 155 to 160. At present, the Bill requires the revaluation of widow's benefit when the member dies after pension age. This group of amendments extends the requirement to include dependants' benefits provided by the scheme. This means that all benefits which must be preserved in accordance with the Social Security Act 1973 are also covered by the revaluation requirements in the Bill.
  Mrs. Beckett: I beg to ask leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  Amendments made: No. 41, in page 19, line 12, after 'pensions', insert
  'provided for a member or his widow'.
  No. 42, in page 19, line 13, after 'been', insert 'wholly or partly'.
  No. 43, in page 19, line 32, leave out 'guaranteed minimum pensions' and insert 'amount secured'.
  No. 154, in page 20, line 37, leave out 'his widow' and insert
  'any other person in respect of the member'.
  No. 155, in page 21, line 5, leave out 'his widow' and insert
  'any other person in respect of him'.
  No. 156, in page 21, line 27, leave out
  'any widow he may leave'
  and insert
  'to any other person in respect of him'.—[Mr. Whitney.]
  Amendments made: No. 110, in page 21, line 37, leave out from beginning to 'and' in line 44 and insert
  'any notional pensionable service which is credited to the member by the scheme;'.
  Amendments made:.
  No. 111, in page 21, line 47, at end insert
  "(3A) For the purposes of sub-paragraph (2)(b) and (c) above, any notional pensionable service which is credited to a member by a scheme shall be taken to have ended immediately before the member's actual pensionable service began.'. —[Mr. Whitney.]
  Mr. Whitney: I beg to move amendment No. 112, in page 22, line 4, leave out from 'any' to 'calculated' in line 6 and insert
  'benefit the rate or amount of which is'.
  Mr. Deputy Speaker: With this it will be convenient to discuss Government amendments Nos. 113 to 116, 119 to 123, 132, 125, 126 and 128.
  Mr. Whitney: These amendments are the result of suggestions by my hon. Friend the Member for Slough (Mr. Watts) as a result of representations from the Institute of Acturies. I am extremely grateful to my hon. Friend and the institute for their help. The amendments are all of a technical nature and I shall not delay the House by going through them unless that is the wish of the House.
  Amendment agreed to.
  Amendments made: No. 113, in line 8, leave out 'scheme' and insert 'benefit'.
  No. 114, in line 9, leave out 'scheme' and insert 'benefit'.
  No. 157, in line 13, leave out 'his widow' and insert 'to any other person in respect of him'.
  No. 116, in line 19, leave out 'member's retirement benefits are' and insert 'benefit is'.
  No. 158, in line 27, leave out 'his widow' and insert 'to any other person in respect of him'.
  No. 117, in line 29, after 'include' insert—'(a)'.
  No. 118, in line 31, at end insert 'and

  (b) any amount which is for any reason credited to the member by way of salary notionally earned.

  (6) For the purposes of the application of this paragraph to a case where a member is credited with an amount by reference to salary notionally earned over a period of time of a particular length that period shall be taken to have ended immediately before the member's actual pensionable service began.'.

  No. 119, in line 31, at end insert—

  '3A. —(l) This paragraph applies to any benefit the rate or amount of which is calculated by reference solely to the member's length of service.

  (2) A benefit to which this paragraph applies is referred to in this Schedule as a "flat rate benefit".

  (3) Subject to the following provisions of this Schedule, if the revaluation condition is satisfied, any flat rate benefit payable to the member or his widow is to be revalued —

  by revaluing the benefits which have accrued to him during the period mentioned in paragraph 1(2)(a) above in any way in which they would have been revalued during it if he had remained in the same pensionable service; or

  (a)by the method specified in paragraph 2 above.

  (4) The method by which a benefit is to be revalued under this paragraph is whichever of the methods mentioned in subparagraph (3) above appears to the trustees or managers of the scheme to be appropriate.'.

  No. 120, in line 32, leave out from 'any' to end of line 36 and insert
  'benefit the rate or amount of which is calculated by reference to payments made from time to time by the member, or by any other person in respect of him.'.
  No. 121, in line 37, leave out 'scheme' and insert 'benefit'.
  No. 122, in line 38, leave out 'scheme' and insert 'benefit'.
  No. 123, in line 39, leave out 'scheme' and insert 'benefit'.
  No. 124, in line 41, leave out 'contributions paid' and insert 'payments made'.
  No. 159, in line 44, leave out 'his widow' and insert 'any other person in respect of him'.
  No. 132, in page 23, line 3, at end insert—
  '4A. Nothing in paragraph 2, 3, 3A or 4 above is to be construed as requiring the revaluation of any pension or other benefit provided by virtue of paragraph 9(2)(b) of Schedule 16 to the Social Security Act 1973 by way of complete substitute for another pension or benefit.'.
  502
  No. 133, in line 15, leave out from 'if' to end of line 21 and insert —

  (a)there were omitted—

  (i) from paragraph (a), sub-paragraph (ii) and the word "or" immediately preceding it;

  (ii) from paragraph (b), the word "and"; and

  (iii) from paragraph (c), the words from "authorised" to the end; and

  (b)there were added at the end of paragraph (c), the words "and

  (d)any provision of a scheme whereby—

  (i) no pension, or a pension at a reduced rate, is payable to a widow whom the earner married not more than six months before his death;

  (ii) the whole or any part of a pension is not paid to a widow, but instead comparable benefits are provided for one or more dependants of the deceased earner: or

  (iii) no pension, or a pension at a reduced rate, is payable to a widow (or, where a provision such as is mentioned in subparagraph (ii) above operates, to another dependant of the deceased) who was more than ten years younger than he was".'.

  No. 160, in page 23, line 24, leave out 'his widow' and insert
  'for any other person in respect of him'.
  No. 125, in line 23, leave out
  'other than a member of a money purchase scheme'.—[Mr. Whitney.]
  Mr. Whitney: I beg to move amendment No. 145, in page 24, line 25, after 'equivalent', insert 'at the relevant date'.
  Mr. Deputy Speaker: With this it will be convenient to discuss Government amendments Nos. 146 to 148.
  Mr. Whitney: As drafted, the Bill bases the transfer value on the cash equivalent of accrued benefit at the time that service ends. We now think that it should be related to the value of accrued benefits either when service ends or when the application for transfer is made. Application could be made some years after service ends. We believe that it is important to ensure that the value reflects the current worth of the member's accrued rights.
  Amendment agreed to.
  Amendments made: No. 146, in page 24, line 30, leave out 'terminated' and insert 'terminates'.
  No. 147, in page 24, line 31, leave out 'sub-paragraph (1) above' and insert 'this paragraph'.
  No. 148, in page 24, line 42, at end insert—
  '"the relevant date" means the date when the member's pensionable service terminates or the date of the relevant application, whichever is the later; and
  "the relevant application" means any application which the member has made under paragraph 15 below and which he has not withdrawn.'.
  No. 126, in page 25, leave out lines 14 to 22.
  No. 48, in page 25, leave out lines 33 and 34 and insert 'another scheme'.
  No. 49, in page 25, line 36, at end insert 'and which satisfies prescribed requirements'.—[Mr. Whitney.]
  Mr. Whitney: I beg to move amendment No. 149 in page 26, line 7, leave out 'In any case where' and insert 'Where—(a)'.
  Mr. Deputy Speaker: With this it will be convenient to take Government amendments Nos. 150 and 151.
  Mr. Whitney: The amendment results from arguments advanced in Committee by my hon. Friend the Member for Kensington (Sir B. Rhys Williams). He suggested that

  503
  when a scheme buys out guaranteed minimum pensions with an insurance company after other benefits have been transferred under the provisions in part II of the schedule, members should be able to choose the company. We have not been able to go quite that far. There could, for example, be difficulties if there was insufficient money to provide guaranteed minimum pension rights with the company of the members' choice. We think that when there is a transfer to a scheme that is not contracted out the member should be able to decide that his guaranteed minimum pension right should be secured with a company of his choice. This is a small but desirable increase in freedom of choice. I am grateful to my hon. Friend, with whom my hon. Friend the Minister and I had some differences earlier this evening, for pointing the way.
  Amendment agreed to.
  Amendments made: No. 150 in page 26, line 9, leave out 'only to have transferred to that scheme' and insert 'to have transferred to it only'.
  No. 151, in page 26, line 11, after 'pensions', insert 'and

  (b) the member has not required them to use the portion of his cash equivalent that represents guaranteed minimum pensions in either of the ways specified in sub-paragraph (2)(b) and (c) above,'. —[Mr. Whitney.]

  Mrs. Beckett: I beg to move amendment No. 50, in page 26, line 20, at end insert —

  '(7) A member who has exercised an option as in subparagraph 2(b) above can subsequently require the insurance company or friendly society to provide the then cash equivalent of the annuity purchased to be reapplied as in sub-paragraph (1) above.'.

  Mr. Deputy Speaker: With this it will be convenient to take amendment No. 51, in page 26, line 20, at end insert —

  '(8) A member who acquires a right to a cash equivalent, as in sub-paragraph (2) above, will have a subsequent right within 6 months to reverse his decision.'.

  Mrs. Beckett: We wish to raise here two important issues. In Committee we talked about the freedom that is being given to members of occupational pension schemes and we are anxious to extend those freedoms by means of these two amendments. First, we seek to allow members, once they have transfer value, not merely to move out of an existing occupational scheme and into perhaps some insurance-based scheme, but also, should they wish to do so, to move back out again. We see no reason why such burdens should be placed on occupational pension schemes in the interest of giving freedom to members, whereas insurance companies are allowed to continue without having to accept similar burdens.
  We recall that in Committee the Minister argued that if those freedoms were desirable and necessary market forces would make insurance companies act in that way so that there was no need to put such a requirement in the Bill. It seemed to us then, and it seems to us now, that on that argument there is no need for almost all of this part of the Bill. If market forces will always force insurance companies and occupational pension schemes to do what is desirable and what their members want, there would never be any need for statutory compulsion. As there is such a need, there is a Bill and it would be better to be more even-handed between occupational pension schemes and insurance companies.
  504
  Amendment No. 51 seeks to raise the issue of a cooling-off period in explicit terms. We are not wedded to the period of six months suggested in the amendment but a specific cooling-off period should be allowed for three reasons. First, it was suggested that that would be a perfectly practicable proposal for portable pensions. Therefore, if it is practicable for portable pensions, why is it not practicable now? Secondly, it has been found to be practicable for life insurance policies, so why is it impracticable now?
  Thirdly, although we recognise that the Goverment are in favour of some sort of cooling-off period and have taken steps elsewhere to deal with such a period, to put it mildly, theirs is a rather woolly proposal. They say that as long as a person has thought about what he proposes to do and as long as he has changed his mind before the transfer value has gone through and all the arrangements made, that is fine and he can withdraw. I understand what the Government are trying to do in that respect, but as the different occupational pension schemes in different companies are likely to move at different speeds the Government are really saying that a person will have to try to find out how quickly, given the particular circumstances, a transfer might go through and that that will tell a person how long a period he has in which to change his mind. That is not satisfactory. Cooling-off periods exist in other circumstances and the Secretary of State has commended them to the House and told us how possible they are for portable pensions. Obviously, we believe every word that the Secretary of State tells us and we are sure that the Minister will tell us tonight that the same can be done in these circumstances.
  Mr. Whitney: I fear that the hon. Member for Derby, South (Mrs. Beckett) will not be surprised to hear me advise the House to reject the amendments. At the moment, annuities covering preserved pensions, including guaranteed minimum pensions, cannot be assigned or surrendered. We are proposing to allow assignment or surrender in prescribed circumstances. The appropriate powers are at paragraphs 3 and 11 of schedule 4. But we do not think that we should go further than that. We are confident that if there is a demand for policies which allow further transfer options, insurance companies will meet it. People will thus be able to shop around and buy the policy that they want and that best suits them.
  As the hon. Lady will be the first to recognise, our view of the efficacy of market forces and their importance for pension scheme holders and applicants for insurance funds is much stronger than hers. She shows a complete lack of comprehension of the efficacy of market forces.
  We have some sympathy with amendment No. 51. Indeed as she said, we promised in Committee to reconsider our position. As a result, we have brought forward amendment No. 64. That allows the application to make a transfer to be withdrawn at any time up until the scheme is committed to make payment to another scheme or insurance company. That will, in effect, provide a cooling-off period. Before deciding that they want a transfer, members will have to find out what the transfer value is. They will then need to shop around to decide how they wish to use it. Only then will they tell the scheme that they wish to have a transfer and how it is to be applied. So we have a built-in cooling-off period.
  I recognise that that will not go as far as the hon. Lady might wish. We considered the road that she has invited

  505
  us to take, but concluded that we could not reasonably require schemes to take back a transfer value after it had been paid. We could require schemes to delay making transfer payments, but that would be unfair to people who know what they want and had considered the position carefully before making their choice. We therefore believe that the best way to meet the point, which we agree is a good one, is by giving the right that we have already proposed under amendment No. 64.
  Mrs. Beckett: We accept that the Government have to some extent moved on this matter, although perhaps not as far as we would have wished. In that light, I beg to ask leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  9.45 pm
  Mr. Newton: I beg to move amendment No. 152, in page 26, line 24, at end insert—
  '(lA) The power to make regulations conferred by subparagraph (1) above includes power to provide that cash equivalents are to be calculated and verified in such manner as may be approved in particular cases—

  (a)by prescribed persons; or

  (b)by persons with prescribed professional qualifications or experience; or

  (c)by persons approved by the Secretary of State.'.

  Mr. Deputy Speaker: With this it will be convenient to take Government amendments Nos. 76 and 77.
  Mr. Newton: We wish to have the power to provide that cash equivalents must be calculated and verified in a way that is approved by actuaries. In practice, that would normally happen without a statutory requirement. However, in this case we feel that the calculation of transfer value is too important a subject to leave any room for doubt. We have therefore tabled the amendment to remove the doubt.
  Amendment agreed to.
  Mr. Tim Smith: I beg to move amendment No. 52, in page 27, line 8, at end insert—
  (4) Regulations shall provide that the cash equivalent mentioned in paragraph 10(1) shall not be less than the aggregate—

  (a)of the contributions under the scheme paid by a member or on his behalf; and

  (b)of any investment yield and bonuses which have arisen out of those contributions.'.

  I make no apologies for raising again the question of the calculation of transfer values. I am glad to see that my right hon. Friend the Secretary of State is present. He will recall that on Second Reading he gave a clear undertaking that, if progress was not made on the question of a formula for calculating transfer values, the Government would introduce a measure. We all know that that is second best, and I have not been encouraged by what I have read about the progress since Second Reading.
  The fact that the Bill will leave the House in that state disappoints me. All the provisions on transfer values will be of little benefit to early leavers if there is not a clear formula. My amendment merely seeks to underpin whatever that formula may be. In paragraph 11 on page 25 there is a clear formula for a calculation of transfer values in relation to money purchase schemes. That is not the case for ordinary final salary schemes. My amendment merely seeks to introduce the same formula as a minimum for final salary schemes. That should be inserted into the Bill so that there is at least a guaranteed minimum.
  At present there is nothing in the Bill about the formula for the calculation of transfer values, yet that goes to the heart of the entire objective of that part of the Bill.
  Sir Brandon Rhys Williams: I support my hon. Friend the Member for Beaconsfield (Mr. Smith). I have given the matter of the valuation of the early leavers' rights in final salaries schemes a good deal of attention, and 1 have had the benefit of first-class advice. It is a difficult problem to solve. The most practical approach to it is to encourage occupational pension schemes to build up an earnings-related money-purchase entitlement in relation to each employee within the envelope, if necessary, of the final salary scheme. In that way, even if it is difficult to assess what the final salary scheme would give the early leaver, there is a concrete and substantial fall-back, which has been built up on conventional money-purchase lines, assisted by an appropriate measure of indexation.
  On Budget day The Times published a letter which I submitted in which I recommended that in the requirements on which the Government propose to insist for the registration of all occupational schemes the element which is funded on behalf of individual beneficiaries should be identified separately from that element of the fund which is held by the trustees but which is not allocated to individuals. There is misuse of the tax provisions relating to occupational pension schemes by corporate treasurers who, when they have funds available, put them into the occupational pension fund so that they will increase without taxation.
  Obviously, these funds cannot then be allocated to individual beneficiaries. If, however, the Government insisted that, in reporting to the registrar, the trustees or managers of schemes should separate that element of the fund which is identifiable as belonging to individuals from the other elements which are not allocated to individuals, the trustees could see the advantage in allocating the maximum, instead of the minimum, to individual beneficiaries. That would be a step in the right direction.
  We had long discussions before the Budget on the taxation of occupational pension schemes. After taking first-class advice, I came to the conclusion that it would be entirely wrong to introduce taxation of the build-up of that element which is allocated to individuals; but I believe that the Government would be within their rights to introduce taxation of the income that arises from the unallocated fund. If they did that the trustees or managers of the schemes would choose to allocate the maximum to individuals because it would suit them to do so. When the individual's entitlement was valued because he chose to move to another scheme, he would get something much more like his real entitlement instead of, as now, a ridiculous and insulting pittance.
  Mrs. Beckett:Like the hon. Member for Beaconsfield (Mr. Smith), I wish to hear a comment from the Minister on the Government's reaction to the proposals that the actuaries have made, which, as I understand them, are more a statement of principles than anything that we could conceivably call a set of comparable tables. I, too, recall the assurance given by the Secretary of State that a satisfactory measure would be introduced. Although it has been suggested to me that the actuaries' proposals will do away with the grossest abuses, it is not certain that:hey would meet the argument that people should be given, the

  507
  transfer value for a given benefit, or something like it, which is what most hon. Members were expecting to get from the Bill.
  Mr. Newton: There is little difference among us on this issue. I should make it clear to the House that the discussions to which my hon. Friend the Member for Beaconsfield (Mr. Smith) referred are making good progress, and that the actuarial profession is close to issuing its draft guidance. When it does, it will be followed as soon as possible by the Government's proposals for regulations, which will be subject to full consultation. I hope that that will give him some of the encouragement that he seeks. The matter has not been forgotten or ignored. On the contrary, we are as anxious as he is to make progress, because it is crucial to fulfilling the Government's intentions in respect of this part of the Bill.
  I hope that my comments will also sound reasonably satisfactory to the hon. Member for Derby, South (Mrs. Beckett) in view of the helpful attitude that she has displayed throughout the evening. Unless I am pressed further, that is probably as much as I can sensibly say now.
  Mr. Tim Smith: What about my amendment?
  Mr. Newton: I had hoped that my hon. Friend would enter into the spirit of happy co-operation that has pervaded our proceedings this evening —[Interruption.] I do not wish to be barracked from the alliance Benches, although I suppose I could not hope for much better.
  Mr. Kennedy: I was getting at him.
  Mr. Newton: As long as the hon. Gentleman is getting at my hon. Friend, not at me, I am prepared to put up with it.
  My hon. Friend has fairly asked for a further explanation. The transfer provisions in the Bill will give early leavers the cash equivalent of their accrued rights under the scheme. That includes the value of any revaluation under the Bill and any increase due from the anti-franking provisions in last year's Act. Details of how the cash equivalent is to be calculated will be set out in regulations. Money purchase benefits will be treated largely on the lines suggested by my hon. Friend. What we intend here is that the transfer value should be the product of what the invested contributions are worth less any administrative expenses. Therefore, what we intend and what my hon. Friend proposes amount more or less to the same thing.
  Where I differ from my hon. Friend is when we consider defined benefit schemes. Average and final salary benefits, as their name implies, are calculated in relation to salary and length of service. They do not directly reflect the individual value of contributions paid either by the employer or the employee. There is a considerable element of cross-subsidy in these schemes; for example, benefits for younger members cost less to provide than those for older members. While, notionally, employers make the same contribution for all members, what they are in fact doing is providing sufficient money, expressed as a percentage contribution for each member, to enable the scheme to meet its benefit promises. If we were to require these schemes to give transfer values based on contributions paid by employers and employees, we should in effect be destroying the cross-subsidy or pooled risk element inherent in them.
  508
  We believe that transfer values should reflect the value of preserved benefits in schemes. That is what the Bill seeks to do and we shall reinforce that in our proposals for regulations. I think that we have got the basic concept right and I hope that what I have said will be sufficient for my hon. Friend to accept the broad principle that we have followed.
  Mr. Tim Smith: I do not want to get into a complicated debate now about cross-subsidies, so, in the light of what my hon. Friend said earlier about the good progress that has been made, I beg to ask leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  Mr. Newton: I beg to move amendment No. 127, in page 27, line 34, leave out from 'to' to end of line 38 and insert
  'provide benefits to which the cash equivalent related'.
  As drafted, when a member takes a transfer the Bill removes liability from schemes for guaranteed minimum pensions and benefits required by present legislation. This amendment goes further than that and removes liability for all benefits to which the transfer related. This is a point that was made in Committee and also by people outside the House. We have considered it and we accept that it is logical and are therefore implementing it.
  Amendment agreed to.
  Amendments made: No. 53, in page 28, line 5, leave out from 'proceedings' to 'it' in line 8 and insert
  'or proceedings before a court have been commenced against a member at any time before the expiry of the period of twelve months beginning with the date when his pensionable service terminates; and
  (b)'
  No. 54, in page 28, line 13, after 'duty', insert
  ',subject to the following provisions of this paragraph,'.
  No. 55, in page 28, line 21, leave out from 'may' to end of line 23 and insert
  'grant an extension of the period within which the trustees or managers of a scheme are obliged to do what is needed to carry out what a member of the scheme requires—'.
  No. 56, in page 28, line 24, at end insert 'in the opinion of the Board'.
  No. 57, in page 28, line 25, leave out 'a' and insert 'the'.
  No. 58, in page 28, line 26, leave out 'or'.M
  No. 59, in page 28, line 27, leaveout first 'a' and insert 'the'.
  No. 61, in page 28, line 30, leave out 'a' and insert 'the'.
  No. 62, in page 28, line 32, leave out from 'what' to end of line 34 and insert
  'is required within that period'.
  No. 63, in page 28, line 34, at end insert
  'or
  (iv) the member has not take all such steps as the trustees or managers can reasonably expect him to take in order to satisfy them of any matter which falls to be established before they can properly carry out what he requires;
  (b) in any case where the provisions of section 49 above apply; and
  (c) in any case where a request for an extension has been made on a ground specified in paragraph (a) or (b) above, and the Board's consideration of the request cannot be completed before the end of that period.
  (5A) A request under sub-paragraph (5) above may only be made by the trustees or managers.
  (5B) The Board shall have power, if they are satisfied that there has been a relevant change of circumstances since they

  509
  granted an extension, or that they granted an extension in ignorance of a material fact or on the basis of a mistake as to a material fact —

  (a)to direct that the extension shall end on a date earlier than that on which it would otherwise have ended; or

  (b)to revoke the grant of the extension.'.

  No. 64, in page 28, line 38, at end insert—

  '15A.—(1) Subject to sub-paragraph (2) below, a member of a scheme may withdraw an application under paragraph 15 above by giving the trustees or managers of the scheme notice in writing that he no longer wishes them to do what is needed to carry out what he previously required.

  (2) Such a notice shall be of no effect if it is given to the trustees or managers at a time when, in order to comply with what the member previously required, they have already entered into an agreement with a third party to use the whole or part of the member's cash equivalent in a way specified in paragraph 12(2)(a), (b) or (c) above.

  (3) A member who withdraws an application may make another.

  (4) A notice to the trustees or managers of a scheme under this paragraph is to be taken to have been given if it is delivered to them personally, or sent by post in a registered letter or by the recorded delivery service.'.

  No. 128, in page 29, leave out lines 24 and 25 and insert—

  (b) any benefit is an average salary benefit, a flat rate or a money purchase benefit.' [Mr.Newton.]

Schedule 2

  INFORMATION ABOUT AND REGISTRATION OF OCCUPATIONAL PENSION SCHEMES
  Amendments made: No. 65, in page 31, leave out lines 25 to 36 and insert —
  'The registrar of occupational pension schemes
  56B.—

  (1) The Secretary of State may appoint a registrar of occupational pension schemes.

  (2) The registrar may be a body corporate.

  (3) The Secretary of State may set up such offices and appoint such staff as he thinks necessary for the registrar.

  (4) The registrar may appoint an agent to perform functions on his behalf, other than excluded functions, and in this section "registration agent" means an agent appointed under this subsection.

  (5) In subsection (4) above "excluded functions" means—

  (c)functions under any of the following provisions of this Act—

  (i)section 56D(5) to (7);

  (ii)section 56H(2) and (3);

  (iii)sections 56K to 56M;

  (iv)section 56O;

  (b)functions under any Northern Ireland enactment corresponding to a provision mentioned in paragraph (a) above.

  (6) An appointment under subsection (4) above shall be on such terms as the Secretary of State, with the concurrence of the Treasury, may approve.

  (7) The Secretary of State may, if he thinks fit—

  (a)remove the registrar from office; and

  (b)direct that the appointment of a registration agent be terminated.

  (8) The amount—

  (a)of any salaries for the registrar and his staff; and

  (b)of any sums to be paid in respect of expenses incurred by the registrar in performing his functions,

  shall be fixed by the Secretary of State with the concurrence of the Treasury.

  (9) The expenses referred to in subsection (8) above include payments falling to be made to a registration agent.

  (10)The Secretary of State may by regulations—

  (a)give the registrar additional functions; and

  (b)provide for the manner in which the registrar is to perform any of his functions.

  (11)In relation to functions of the registrar that are being performed by a registration agent, references to the registrar in this Part of this Act or in any corresponding Northern Ireland enactment are references to the registration agent.

  510

  (12) If the registrar or a registration agent is a body corporate, this Part of this Act and any corresponding Northern Ireland enactment shall have effect in relation to that body subject to any necessary modifications.'.

  No. 67 in page 31, line 42, leave out 'of any document comprising the scheme' and insert —

  (i) of the trust deed constituting the scheme, if it is constituted by such a deed; and

  (ii) of any document constituting the scheme, if it is not constituted by a trust deed;'.

  No. 68, in page 31, line 44, leave out 'such document' and insert
  "trust deed or other document which falls to be lodged under subparagraph (i) or (ii) above'.
  No. 69, in page 32, line 1, after 'amends', insert 'or supplements or wholly or partly supersedes'.
  No. 70, in page 32, leave out lines 15 to 34.
  No. 71, in page 33, line 11, after 'time' insert
  'and in such manner'
  No. 72, in page 33, line 13, leave out from 'scheme' to end of line 16.
  No. 73, in page 33, line 18, leave out '(2)' and insert '(10)'.
  No. 74, in page 34, line 27, leave out 'trustees and managers of occupational pension schemes' and insert 'the trustees of an occupational pension scheme or, if there are no trustees, the managers'.
  No. 75, in page 34, line 33, at end insert 'not later than the end of such period as may be prescribed'.
  No. 76, in page 34, line 44, leave out 'define' and insert 'prescribe'.
  No. 77, in page 34, line 45, leave out 'and' and insert
  'or

  (b)provide that the persons who may so act shall be—

  (i) persons with prescribed professional qualifications or experience; or

  (ii) Persons approved by the Secretary of State.

  (3A) The Secretary of State may by regulations'.—[Mr. Newton.]
  Mr. Newton: I beg to move amendment No. 78, in page 35, leave out lines 28 to 41.
  Mr. Deputy Speaker: With this it will be convenient to take Government amendments Nos. 79, 86 and 89.
  Mr. Newton: This is an amendment of which I am rather proud, as a simplication of our original proposals. For some unearthly reason we had tried to specify the paper, the colour of the paper and various other things in relation to documents lodged with the registrar. This seemed to me so absurd that we have taken it out.
  Amendment agreed to.
  Amendment made: No. 79, in page 35, line 44, leave out 'material other than a document' and insert 'other material;.—[Mr. Newton.]
  Amendment proposed: No. 80, in page 36, leave out lines 41 to 44 and insert—
  '(a) fees which, on performing a duty imposed'. —[Mr. Newton.]
  Mr. Deputy Speaker: With this it will be convenient to take Government amendments Nos. 81 and 82.
  Mrs. Beckett: We do not see any reason why, under amendment No. 81, the trustees and managers of the scheme should pay the registrar out of the resources available for the purposes of the scheme. There are many circumstances in which employers would normally pay such fees rather than their coming out of the resources of such a scheme. I ask the Minister to consider this.
  Mr. Newton: The hon. Lady is right. The amendments make it clear that any registration fees will be payable by

  511
  the scheme trustees or managers out of the scheme's resources and not out of their own pockets. We agree that they should not be expected to pay them out of their own pockets, and that it is reasonable that the charges necessary for the proper operation of the scheme in the public interest should be met by the scheme.
  Amendment agreed to.
  It being Ten o'clock, further consideration of the Bill stood adjourned.
  Ordered,
  That, at this day's sitting, the Social Security Bill may be proceeded with, though opposed, until any hour.—[Mr. Neubert.]
  As amended, again considered.
  Amendments made: No. 81, in page 36, line 47, at end insert
  'the trustees or managers of an occupational pension scheme are to pay the registrar out of the resources available for the purposes of the scheme'.
  No. 82, in page 37, line 1, leave out 'by any' and insert 'fees which are to be paid to the registrar by a'.
  No. 83, in page 37, line 32, leave out from 'if' to 'shall' in line 36 and insert
  'any of the requirements—

  (a)of section 56C above or regulations under that section; or

  (b)of regulations under section 56E(1)(c) above,

  is not complied with in relation to a scheme, every person who immediately before the end of the period for compliance was a person whose duty it was to comply with it'.
  No. 84, in page 37, line 42, leave out
  'their first conviction for it'
  and insert 'the conviction'.
  No. 85, in page 37, line 43, leave out from beginning to end of line 3 on page 38 and insert —
  '(2) Where a person is charged with an offence under subsection (1) above in respect of any requirement, subject to subsection (2A) below, it shall be a defence for him to prove

  (a)that the commission of the offence was due to a mistake or to reliance on information supplied to him or to the act or default of another person, an accident or some other cause beyond his control; and

  (b)that he took all reasonable precautions and exercised all due diligence to avoid the commission of such an offence by himself or any person under his control.

  (2A) If in any such case the defence provided by subsection (2) above involves the allegation that the commission of the offence was due to the act or default of another person or to reliance on information supplied by another person, the person charged shall not, without leave of the court, be entitled to rely on that defence unless, within a period ending seven clear days before the hearing, he has served on the prosecutor a notice in writing giving such information identifying or assisting in the identification of that other person as was then in his possession.'.
  No. 86, in page 38, leave out lines 4 to 19.
  No. 87, in page 38, at end insert
  'or regulations under that section'.
  No. 88, in page 38, line 40, at end insert—
  '(A) The Secretary of State may by regulations specify forms for notices under subsection (1) above.'.
  No. 89, in page 39, leave out lines 19 to 21.—[Mr.Newton.]

Schedule 4

  MINOR AND CONSEQUENTIAL AMENDMENTS
  Amendments made: No. 90, in page 42, line 25, at end insert—
  '0. In subsection (1)(b) of section 66 of the Social Security Act 1973 (Occupational Pensions Board) after the word "advisory" there shall be inserted the words "or other."
  No. 91, in page 42, line 26, leave out 'the Social Security Act 1973' and insert 'that Act'.
  No. 92, in page 43, line 21, at end insert—
  '3A. In subsection (3)(b) of section 1 of the Social Security Act 1975 (outline of contributory system), for "120 and 122" there shall be substituted "4, 120, 122 and 123A".'
  No. 93, in page 43, line 21, at end insert—
  '3F. In section 122 of that Act (additional power to alter contributions), —

  (a)in subsection (1), the following paragraphs shall be substituted for paragraph (a)—

  "(a) the percentage rate for primary Class 1 contributions specified as the appropriate rate for Bracket 3 in section 4(6B);

  (aa) the percentage rate for secondary Class 1 contributions specified as the appropriate rate for Bracket 4 in section 4(6E);" and

  (b)in subsection (4), for the words from "4(6)" to the end there shall be substituted the words "4 of this Act by altering—

  (a)the percentage rate for primary Class 1 contributions specified as the appropriate rate for Bracket 3 in subsection (6B);

  (b)the percentage rate for secondary Class 1 contributions specified as the appropriate rate for Bracket 4 in subsection (6E).".'.

  No. 162, in page 43, line 21, at end insert —

  '3C. The following subsection shall be added at the end of section 18 of that Act (duration of unemployment benefit)—

  "(4) Regulations may provide for treating a person for the purposes of this section as having been entitled to unemployment benefit for any day if he would have been entitled to it but for—

  (a)failure to make a claim; or

  (c)failure to make a claim within the prescribed time;

  but a person is not to be so treated where he shows that he did not intend, by so failing, to avoid the necessity of requalifying for benefit.".'.
  No. 163, in page 43, line 21, at end insert—

  DISQUALIFICATIONS DISREGARDED FOR CERTAIN PURPOSES
  '3D. The following section shall be substituted for section 83 of that Act —
  83. Regulations may provide for a person who would be entitled to any benefit but for the operation of any provision of this Act disentitling him to that benefit to be treated as if entitled to it for the purposes of any rights or obligations (whether his own or another's) under this Act which depend on his entitlement, other than the right to payment of the benefit.".'.
  No. 167, in page 43, line 21, at end insert—

  '3B. In section 13 of that Act—

  (a)in paragraph (a) of subsection (5) (earnings factors), after the word "rise" there shall be inserted the words ", subject to subsection (5A) below,"; and

  (b)the following subsection shall be inserted after that subsection—

  "(5A) The Secretary of State may by regulations make such modifications of subsection (5)(a) above as appear to him to be appropriate in consequence of section 4(6B) above.".'.

  No. 164, in page 43, line 23, leave out 'the Social Security Act 1975' and insert 'that Act'.
  No. 94, in page 43, line 25, at end insert—

  '4A. In section 134(4) of that Act (national health service and employment protection allocations)—

  (a)for "determined", in each of the paragraphs defining "the appropriate national health service allocation" and "the appropriate employment protection allocation" there shall be substituted "estimated"; and

  (b)for the words from "and in this subsection" to the end there shall be substituted the words "and in this subsection "estimated" means estimated by the

  513
  Secretary of State in any manner which after consulting the Government Actuary he considers to be appropriate and which the Treasury has approved".

  4B. In section 167 of that Act (parliamentary control of orders and regulations)—

  (a)in subsection (2), for "120 or 122" there shall be substituted "4, 120, 122 or 123A"; and

  (b)in subsection (3)—

  (i) after "section" there shall be inserted "4,"; and

  (ii) after "122" there shall be inserted ", 123A".

  4C. In paragraph 1 of Schedule 1 to that Act (Class 1 contributions where earner employed in more than one employment)—

  (a)in sub-paragraph (1A), the following words shall be substituted for the words from "the amount" to the end—

  (a)the amount of the primary Class 1 contribution in respect of the aggregated earnings shall be determined in accordance with sub-paragraph (1B) below; and

  (b)the amount of the secondary Class 1 contribution in respect of the aggregated earnings shall be determined in accordance with sub-paragraph (1D) below."; and

  (b)the following sub-paragraphs shall be inserted after that sub-paragraph—

  "(1B) The amount of the primary Class 1 contribution shall be the aggregate of the amounts obtained—

  by applying the rates of primary Class 1 contributions that would apply if the aggregated earnings were all attributable to contracted—out employments—

  (i) to the part of the aggregated earnings attributable to any such employments, or

  (ii) if that part exceeds the current upper earnings limit, to so much of that part as does not exceed that limit; and

  (b)if that part is less than that limit, by applying the rate of primary Class 1 contributions that would apply if the aggregated earnings were all attributable to employments which are not contracted—out to so much of the remainder of the aggregated earnings as, when added to that part, does not exceed that limit.

  (1C) In relation to earners paid otherwise than weekly, any reference in sub-paragraph (1A) or (1B) above to the lower or upper earnings limit shall be construed as a reference to the prescribed equivalent of that limit.

  (1D) The amount of the secondary Class 1 contribution shall be the aggregate of the amounts obtained—

  (a)by applying the rates of secondary Class 1 contributions that would apply if the aggregated earnings were all attributable to contracted-out employments to the part of the aggregated earnings attributable to any such employments; and

  (b)by applying the rate of secondary Class 1 contributions that would apply if the aggregated earnings were all attributable to employments which are not contracted—out to the remainder of the aggregated earnings.".'

  No. 165, in page 43, line 25, at end insert—
  "'Entitled' and cognate expressions.

  '4D. In Schedule 20 to that Act (glossary of expressions) the following definition shall be inserted after the definition of "Employment"—

  In relation to any benefit, see—

  (a)the provisions specifically relating to that benefit;

  (b)in the case of a benefit specified in section 12(1), section 13; and

  section 165A.".'.

  No. 95, in page 43, line 26, at end insert—

  '4E. In section 1(1)(b) of the Social Security Pensions Act 1975 (earnings limits), the words "primary Class 1" shall be substituted for the word "such".

  4F. In section 6 of that Act (rate of Category A retirement pension)—

  514

  (a)in subsection (5), for the word "References", in the first place where it occurs, there shall be substituted the words "Subject to subsection (5A) below, references"; and

  (b)the following subsection shall be inserted after that subsection—

  "(5A) The Secretary of State may prescribe circumstances in which pensioners' earnings factors for any relevant year may be calculated in such manner as may be prescribed.".

  4G. In section 27 of that Act (contracted-out rates of Class 1 contributions), at the end of subsection (1) there shall be added the words "and

  (c) in the case of a secondary Class 1 contribution, the normal percentage of so much of those earnings as exceeds the current upper earnings limit.".'.

  No. 96, in page 43, line 27, leave out
  'the Social Security Pensions Act 1975'
  and insert
  'that Act'.
  No. 134, in page 44, line 13, at end insert—

  8A.—

  (1) In section 41A of that Act (protection of earners' pensions)—

  (a)in subsection (1), for "commencement of payment", in the third place where those words occur, there shall be substituted "relevant"; and

  (b)the following subsections shall be inserted after that subsection—

  (1A) In subsection (1) above "the relevant date" means, subject to subsection (1B) below, the commencement of payment date.

  (1B) In the application of subsection (1) above to a case where a scheme makes such provision as to any part of a pension as is mentioned in section 33(4) above, the reference to the relevant date is to be construed, in relation to the part of the pension as to which such provision is made, as a reference to the date on which by virtue of it that part of the pension commences to be paid.".

  (2) Sub-paragraph (1) above shall be deemed to have come into force on 1st January 1985.

  8B. The following further amendments of that section shall also be made—

  (a)in subsection (2), "(1C)" shall be substituted for "(1)"; and

  (b)in subsection (6), "subsections (1)(c) and (1C)(b)— shall be substituted for "subsection (1)(c) and (ii)".'

  8C. In section 41B of that Act (protection of widows' pensions)—

  (a)in subsection (2), "(1A)" shall be substituted for "(1)"; and

  (b)in subsection (5), "subsections (1)(c) and (1A)(b)" shall be substituted for "subsection (1)(c) and (ii)".'.

  No. 168, in page 44, line 13, at end insert—
  '4H. The following subsection shall be inserted after section 43(1) of that Act (calculation of contributions equivalent premium)—
  "(1A) Where an earner's earnings paid in any period—

  (a)exceeded the lower earnings limit; but—

  (b)were not such that primary Class 1 contributions within Bracket 3 fell to be paid in respect of them,

  it shall be assumed for the purposes of subsection (1) above that his earnings paid in that period were such that, taking the rate specified in Bracket 3 as the appropriate rate, the same amount of primary Class 1 contributions fell to be paid in respect of them as in fact fell to be paid in respect of them.".
  No. 169, in page 44, line 31, at end insert—

  '4J. In subsection (2) of section 44 of that Act (premium on termination of contracted-out scheme)—

  (a)in paragraph (a), after the word "arrangements" there shall be inserted the words "and have not been disposed of so as to discharge the trustees or managers of the scheme under paragraph 15 of Schedule 1A to this Act"; and

  (b)in paragraph (b), for the words "so subject" there shall be substituted the words "subject to approved arrangements .".'

  No. 170, in page 44, line 31, at end insert—

  515
  '4K. The following subsection shall be inserted after section 47(2) of that Act (calculation of certified amount)—
  "(2A) Where an earner's earnings paid in any period—

  (a) exceeded the lower earnings limit; but

  (b) were not such that primary Class I contributions within Bracket 3 fell to be paid in respect of them, it shall be assumed for the purposes of subsection (2) above that his earnings paid in that period were such that, taking the rate specified in Bracket 3 as the appropriate rate, the same amount of primary Class 1 contributions fell to be paid in respect of them as in fact fell to be paid in respect of them.".'.

  No. 153, in page 44, line 36, at end insert—
  '10A. The following subsection shall be inserted after section 47(9) of that Act (prohibition of recovery or retention of state scheme premium)—
  "(9A) Nothing in subsection (9) above affects—

  (a)the right of the trustees or managers of a scheme, in a case where an accrued rights premium or a pensioner's rights premium has been paid, to reduce the pension of the person in respect of whom the premium has been paid by the amount of his guaranteed minimum pension;

  (b)the right of trustees or managers, in a case where a limited revaluation premium has been paid, to recoup it—

  (i) out of the resources of the scheme, in so far as they derive from contributions; or

  (ii) in prescribed cases, out of payments made to them in respect of an earner's transfer to their scheme from some other scheme;

  (c)the right of trustees or managers, in a case where a state scheme premium has been paid, to make the deduction for which paragraph 12(6) of Schedule 1A to this Act provides when they calculate the cash equivalent to which the earner in respect of whom the premium has been paid has a right under Part II of that Schedule.".'.

  No. 97, in page 45, line 45, at end insert—
  'Social Security and Housing Benefits Act 1982 (c. 24)
  16A. In section 20 of the Social Security and Housing Benefits Act 1982 (offences and penalties) "3(4A)(b)" shall be inserted after "section".'.
  No. 98, in page 46, line 4, at end insert—
  'Social Security (Contributions) Regulations 1979 (S.1. 1979/591)
  18. In regulation 98(c) of the Social Security (Contributions) Regulations 1979 (amount of Class 2 contribution of share fishermen) "6.30" shall be substituted for "7.55". ' .—[Mr. Newton.]

Schedule 5

  REPEALS
  Amendments made: No. 99, in page 46, line 10, column 3, at beginning insert—
  'Section 28(2) so far as unrepealed.'
  No. 166, in page 46, line 12, column 3, at end insert—
  'Section 79(1), (2) and (4).
  Section 82(1) and (2).
  In section 90(3), the reference to subsection (1) of section 79.'.
  No. 135, in page 46, line 21, column 3, at end insert—
  'Section 41B(4)'.
  No. 100, in page 46, line 24, after '66', insert 'in subsection'.
  No. 101, in page 46, line 25, at end insert 'and subsection (5)'.
  No. 102, in page 46, line 25, column 3, at end insert —
  'In Schedule 4, paragraph 36(b).'.
  No. 103, in page 46, line 30, at end insert—
  '1979 c. 18. Social Security Act 1979. In Schedule 1, paragraph 11.'.
  No. 104, in page 46, line 34, at end insert—
  'Social Security Section 1(5).(Contributions) Act 1982.
  In Schedule 1, paragraph 1(3).'.
  No. 105, in page 46, line 42, column 3" at end insert—
  'Section 24.'.
  No. 106, in page 46, line 44, at end insert—'and paragraphs 7 to 11'.—[Mr. Newton.]

  Title
  Amendments made: No. 107, in line 2, after 'pay', insert—
  'to empower the Secretary of State to extend the Pneumoconiosis etc. (Workers' Compensation) Act 1979;'.
  No. 108, in line 2, after 'pay', insert—
  'to make provision for pensions and gratuities for members of the Horserace Totalisator Board, the Horserace Betting Levy Board and the Gaming Board for Great Britain;'.— [Mr. Newton.]
  Order for Third Reading read—[Queen's Consent, on behalf of the Crown, signified.]
  Motion made, and Question proposed, That the Bill be now read the Third time.
  10.4 pm
  Mrs. Beckett: All I will say is that we have discussed tonight with remarkable good humour 47 sets of Government amendments. If the Bill comes back from another place with 47 sets of amendments there will be blood on the Floor.
  Mr. Newton: All I want to know is whose blood it will be.
  Sir Brandon Rhys Williams: I abstained on the vote on Second Reading. Should there be a vote now, which seems unlikely, I would abstain again. This measure does not meet the needs of the early leaver and does not do what is required for the reform of national insurance. It does not make the changes in the law that have been called for for so long in relation to occupational pensions.
  I believe that tonight we have marked another stage in the decline of Parliament, because we have abdicated from our responsibility to deal with matters that concern the entire population in terms of cash. It is not just small sums of money that are involved. One can only fall back on a famous poem of Arthur Hugh Clough and bear in mind that there is always another stage.
  The protection of personal savings and the relationships between citizens in terms of cash are matters where clarity and moral principles are vitally necessary. In the provisions of the national insurance system and in the operation of occupational pension schemes we have neither. This places a burden on my right hon. and hon. Friends. I hope they recognise that, and that we shall not have to wait long for further measures from their Department which will put these vital matters right.

  517
  There is much that is useful in the Bill, but there is so much still to be done that one can only give it a very halfhearted welcome.
  Question put and agreed to.
  Bill accordingly read the Third time, and passed.

  SELECT COMMITTEES
  Mr. Deputy Speaker (Mr. Paul Dean): If the House agrees, I shall put together the motions on behalf of the Committee of Selection.

  SOCIAL SERVICES
  Ordered,
  That Mr. James Couchman and Mr. Tony Lloyd be discharged from the Social Services Committee and Mr. Tony Favell and Mr. Terry Patchett be added.—[Mr. Fox, on behalf of the Committee of Selection.]

  EDUCATION, SCIENCE AND ARTS
  Ordered,
  That Mr. Terry Lewis and Mr. George Walden be discharged from the Education, Science and Arts Committee and Mr. Malcolm Thornton and Mr. Jack Thompson be added.—[Mr. Fox, on behalf of the Committee of Selection.]

  TRADE AND INDUSTRY
  Ordered,
  That Mr. Teddy Taylor be discharged from the Trade and Industry Committee and Mr. Barry Porter be added.—[Mr. Fox, on behalf of the Committee of Selection.]

  AGRICULTURE
  Ordered,
  That Mrs. Marion Roe be discharged from the Agriculture Committee and Mr. Andrew Hunter be added.—[Mr. Fox, on behalf of the Committee of Selection.]

  ENVIRONMENT
  Ordered,
  That Mr. Reg Freeson and Mr. Julian Critchley be discharged from the Environment Committee and Mr. Peter Pike and Mr. Andrew MacKay be added. —[Mr. Fox, on behalf of the Committee of Selection.]

  HOME AFFAIRS
  Ordered,
  That Clare Short be discharged from the Home Affairs Committee and Mr. Tony Lloyd be added.—[Mr. Fox, on behalf of the Committee of Selection.]

  ENERGY
  Ordered,
  That Mr. Michael Morris be discharged from the Energy Committee and Mr. Geoffrey Dickens be added.—[Mr. Fox, on behalf of the Committee of Selection.]

  Local Authority Contracts
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Lang.]
  10.7 pm
  Dr. Brian Mawhinney: I am grateful for the opportunity to raise this matter tonight. Historically there has always been a substantial degree of co-operation between central and local government, each respecting the contribution which the other has had to make. My hon. Friend knows better than most that that historic cooperation has broken down in recent years. In fact, he and his right hon. and hon. Friends in the Department have had to spend a disproportionate amount of their time trying to combat the influence of the political Left-wing in the country who have, apparently without compunction. been willing to undermine that historic co-operation for their own political ends.
  Even more important, such people have showed a willingness to put their political ideology before the common law fiduciary duty which English courts have established that councillors have to their ratepayers and the recipients of their services. We all know that the Greater London Council has been one of the main offenders in this regard. That, or course, was one of the reasons for the Government introducing a measure to ensure the GLC's abolition.
  So far, that Left-wing influence has been generally perceived to be confined to the large metropolitan areas. One reason for this debate is that I wish to make the House aware of the fact that that influence is now spreading to provincial cities, such as the one that I have the honour to represent, Peterborough. I assure the House that in the comments that I make tonight I have the strong and explicit support not only of my hon. Friend the Member for Huntingdon (Mr. Major), who represents part of the city, but of my hon. Friend the Member for Cambridgeshire, South-West (Sir A. Grant). The reasons for that will soon become apparent.
  Another reason for this debate is to ask my hon. Friend the Minister to take some action. Peterborough used to be a mecca of moderation. Indeed, it was just such a mecca until relatively recently, or more precisely, until the Left-wing of the Labour party obtained a majority in the Labour council group. That happened at the same time as a number of Left-wing so-called libertarians were elected as Liberal councillors.
  We first noticed the change at the time of the miners' strike. A motion was presented to Peterborough city council congratulating the Cambridgeshire constabulary on its moderate, sensible and restrained behaviour. When the motion as put forward for debate, the mayor of the council, Councillor Palmer, a Socialist, got up and walked out of the council chamber taking the whole Labour group with him. That slur will long be remembered by my constituents. The Liberals, stressing their commitment to free speech, stayed and then voted against the motion. That slur will also be long remembered by my constituents.
  Then some weeks ago, setting aside all the regular procedures, the Labour group made it possible for CND to acquire a headquarters for rent in my constituency so that it could advise those who wished to demonstrate at

  519
  Molesworth on how to evade and break the law. Again, that was done to the great dismay of the majority of my moderate constituents.
  But the most serious decision took place at the council meeting held on 6 March. A Liberal councillor, Mrs. Day, not only on her own behalf but on behalf of the Labour group, introduced a motion that had the effect of instructing the council's general purposes committee to amend standing orders in order to permit the council
  "to delete from the approved list of contractors"
  any firm that had been, or intended to be, involved in preparatory or other work for the deployment of cruise missiles at Molesworth
  "provided that the list thereafter includes a sufficient number of firms willing and able to carry out the type of work required by that section of the list."
  Secondly, the motion had the effect of not adding to the approved contractors list any company known to be so involved.
  Needless to say, that motion was opposed by the Conservative councillors but was carried by a combination of Labour and Liberal votes. In the motion it was made clear that that absurd and damaging decision would be purportedly taken in order to reduce the threat of nuclear war to Peterborough. That is so manifestly absurd that I am not at all surprised that my hon. Friend should laugh. Most people would laugh, if the matter was not so serious. It is quite clear that the motion's intent is to break the council's fiduciary duty to provide the most cost-effective service to my constituents. I do not treat that lightly. Thirdly, its effect will be to threaten the existence of firms and consequently the jobs of those who are employed by firms that depend upon council work for their existence. Fourthly, it quite clearly opens the door to any other extreme Left wing threat which the Labour sub-group which meets in secret, apart from the rest of the Labour group and before any meeting of that group, may even, as we speak, be dreaming up.
  Having taken this foolish step, one might have expected the council to decide to rest on the gesture, but not so. It has written to 174 firms, and understand that the firms which have received letters are greatly outraged. Complaints from such firms and, indeed, from colleagues have been made to me. Until a few days ago, only one firm had replied. The electricity board made it clear that it intended to supply electricity to Molesworth. It said effectively, "So what?" I suspect that even my council cannot face the prospect of 10,000 council houses without electricity. But the fact remains that we do not know what pressure the council will bring to bear on these firms and businesses in order to seek to force them, without any legal basis, to conform to the political prejudices of a few councillors.
  As I have demonstrated that this insidious effect is spreading from the metropolitan to the provincial areas, I therefore ask my hon. Friend the Minister what the Government intend to do about it. I have received a letter from the Chief Executive of the city council in which he says:
  "I know that my council is most unlikely to change its position until it is compelled to do so."
  May I refer my hon. Friend to the consultative paper, with which undoubtedly he is familiar, entitled "Competition in the Provision of Local Authority Services." Paragraph 16 says:
  520
  "The Government therefore proposes to include in legislation provision the effect of which would
  a. in relation to any local authority contract or invitation to tender for the supply of goods or services declare void any term or condition which is not directly related to the required performance by the contractor, his sub-contractors, or suppliers, in respect of the quality, timing or cost of the specified goods or services …
  b. in relation to activities which are subject to statutory competition requirements enable the Secretary of State to take action against authorities which, in his view, unreasonably either set aside or negate the results of competition or act in such a way as is intended or likely to limit competition. This provision would apply both to activities covered by the existing DLO legislation and to the new proposals contained in this paper."
  As I understand it, that paragraph covers precisely the point I am pressing on my hon. Friend. Therefore I welcome the consultative paper. Rather than write to my hon. Friend, let me tell him here and now that I am in favour of those proposals.
  Secondly, I affirm the need for those proposals. It is the only way to stop this pernicious political cancer from spreading. I object not on political grounds, because we can win the political battle easily against such opponents, but on the ground that the ratepayers and constituents whom I represent need legal protection.
  Thirdly, I welcome the proposal on behalf of moderate Labour and Liberal supporters in my constituency, and indeed a few councillors. I know that some Labour councillors, especially, are embarrassed and perhaps even ashamed at having voted for that motion. We understand why they did it. They were whipped into supporting it with the threat of deselection, as we see every day in the behaviour of Labour Members in this Chamber. The threat of deselection overcame their basic decent instincts.
  I pay tribute to my hon. Friend the Minister. He and his colleagues have worked tirelessly with skill and imagination to combat the problems posed by the political Left wing in local authorities throughout the land. My hon. Friend will speak for himself, but I suspect that he shares my distaste for what has happened in my constituency. The consultative paper makes clear his determination to tackle the problem at its roots.
  I wish to make two simple requests to my hon. Friend the Minister. First, I ask him to condemn the decision of Peterborough city council and those Labour and Liberal councillors who, by passing it, displayed contempt for their constituents. Secondly, I ask him to commit the Government to introducing legislation based entirely on the paragraphs that I have quoted from his own consultative paper and to give a commitment that that legislation will be introduced in the next Session of Parliament.
  I am grateful to my hon. Friend the Minister for the courteous and intense consideration that he has given to my comments.
  10.21 pm
  The Parliamentary Under-Secretary of State for the Environment (Mr. William Waldegrave): My hon. Friend the Member for Peterborough (Dr. Mawhinney), with his customary force and eloquence, to which I have listened with respect on a number of occasions, has brought before us today a very telling example of what a recent pamphlet produced under the aegis of a number of people working in local government described as "The New Corruption" in local government.
  The history of local government in this country does not go so far back into the mists of time as is claimed whenever

  521
  we make any change. Modern local government in this country really dates from the early decades of the 19th century. The situation in the 1830s and 1840s, though different, was in some ways comparable with the situation today. In those days there was the turtle soup scandal. The old municipal boroughs—non-elected, or at any rate self-elected from small self-selecting bands—were accused, not without justice, of spending borough revenues on turtle soup which the councillors consumed for their own benefit. Today we have a perhaps even less attractive form of that scandal—what might be described as turtle soup ideological politics, the creation and consumption of private caucus-based extremist politics using the leverage and the all too weak accountability of local government, a fundamendal problem which my right hon. Friend the Secretary of State and his colleagues have been trying to reach. Using those all too weak mechanisms of accountability, gangs of people can succeed in foisting on their electorates policies which I do not believe that the electors want for one moment.
  The kind of practice to which my hon. Friend the Member for Peterborough has rightly drawn attention is becoming all too common. He used the phrase "a cancer" and talked of it spreading from some of the metropolitan areas to places which all of us hoped and believed were immune from such things.
  I know my hon. Friend's fine constituency town quite well, because I have to visit it on account of my other responsibilities, and I do so with great pleasure. Looking at the sensible citizens there, as I did recently when walking through the city on a fine day, I did not believe that they are behind such action. They are going about their ordinary daily business and cannot be expected, with the mechanisms available to them at the moment, to be full time on the qui vive to see that their councillors are not up to some nonsense. They trust in the system that Parliament provides for them and, in these matters, we have not provided enough protection.
  In the 1830s and 1840s, Parliament had to invent the doctrine of ultra vires expenditure to put an end to the scandals of turtle soup and to tell those municipalities, "Look here, your ancient statutes might give you the right to spend money on turtle soup, but you have a greater duty, of which we are reminding you, to look to the benefits of your citizenry as a whole." We are now right to say that some of the mechanisms of accountability have become so weakened that we should step in from time to time to correct them.
  Local authorities are a vital and ancient part of the plurality of decision-taking and we need them. Nobody is more committed to a decentralised and pluralistic system of decision-taking than I am, but local authorities are the creations of the statutes of Parliament and, if they have run a little out of control, it is right for Parliament to intervene.
  The misuse of contractual power such as my hon. Friend described is becoming one of the standard ploys of these student-type —well, I shall not insult student politics by speaking about it in that way. Not all that long ago I was a student myself, and my hon. Friend the Member for Welwyn Hatfield (Mr. Murphy) was involved in such matters with me. I think that we conducted ourselves in a rather more dignified way. We certainly won our elections with a great deal of decision. Some of these caucuses are involved in juvenile politics. The London Labour party is the worst offender, but it is
  522
  spreading. We have seen what has happened in Liverpool. The misuse of contractual power is one of the worst aspects of such politics.
  The British people would be relatively grateful to local authorities if they ran their affairs with the commitment and efficiency which the best of them employ and did not take it upon themselves to stick their noses into all sorts of other organisations which might be serving the country rather better.
  There is an arrogance in the type of performance that my hon. Friend described. It is unfortunate that Peterborough city council has said that it will lay down the law about the morality of defence policy. I suspect that that council was elected to keep the streets of Peterborough in good order, to provide decent housing aid to provide the services that it is empowered and required to provide. It has quite enough to do in those respects without wasting money and causing unnecessary inconvenience to the inhabitants of Peterborough. That inconvenience will be much diminished if we can return a proper council under proper Conservative control, as I am sure we shall do in due course.
  We have had some absurd examples from London. The recent Kit Kat snub is a good example. Greenwich council has produced lists of absurd requirements from all those who seek contracts with it. I shall not weary the House by reading it, but the list enables the council to call for all manner of papers and information concerning matters that are nothing to do with it. In today's The Times there was a wonderfully absurd example concerning an unfortunate supplier of sandwiches to a council who had been forever blacklisted by the council because he provided sandwiches to what was described as the occupying army of the police during the miners' strike.
  Dr. Mawhinney: It was Chesterfield.
  Mr. Waldegrave: I am grateful to my hon. Friend for reminding me. As my hon. Friend said when I laughed when he gave an account of Peterborough's behaviour, it would be funny if it was not sad. It is not funny for that small business man if he is prevented from providing a perfectly good catering service and, as a result of a childish decision, might be put out of business.
  My hon. Friend asked me for some assurances, and I am happy to give them to him. He correctly quoted from the consultative paper. I assure him that the Government fully intend to take action, through legislation, to put a stop to the sort of action that he has brought to the attention of the House. The consultative paper contains two relevant proposals. This is against the background of a further drive to introduce into the provision of local authority services as a whole a further degree of competition, which I strongly believe is right. Other countries in Europe, even Socialist countries, do not assume that all services must be provided by local authorities, but that the duty of local authorities is to ensure that the services are provided at the best cost and efficiency. They must not all be done in-house. That is the drive of the Government's policy.
  Within that consultative process we have made two proposals. The first is that we should include a provision to declare void any term or condition of a contract that is not directly related to the required performance by the contractor, his subcontractors or suppliers in respect of the quality, timing or cost of the specified goods or services. This is, of course, very widely drawn. However, it is not

  523
  intended to undermine the contractor's duty to comply with any statutory requirements, for example, on health and safety or other employment legislation. However, it is certainly intended to cover what I call the Peterborough condition. Our intention is that that provision would apply to all local authority contracts, whether or not they were subject to the existing compulsory tendering provisions of the 1980 Act or the extended provisions that we are now proposing.
  We also propose to take action to prevent, as far as we are able, action by local authorities that is quite clearly designed to distort or negate the results of fair competition under the 1980 Act. That is not directly relevant to what my hon. Friend ?aid, but it is important because we know that they can make it impossible for competition to work properly if they bend the rules and do not give reasonable time for tenders.
  On timing, my right hon. Friend has already indicated —and I confirm this tonight—in his reply to a question
  524
  from my hon. Friend on 3 April that we propose to legislate in the next session. Subject to the will of this House and another place, we hope to have legislation on the statute book within the next 12 or 15 months.
  I hope that what I have said tonight will demonstrate to my hon. Friend that we take these matters exceedingly seriously. It is a misuse —and corruption is not too strong a word—of the proper functions of local authorities. It is not a laughing matter—it is serious. Jobs are being lost unnecessarily and services are not as good as they should be and are more expensive because of that sort of behaviour. It would be quite wrong of the Government in 1985 to stand back from this, just as it would have been wrong for Governments in the 1840s to stand back from the turtle soup scandals.
  I am very pleased to thank my hon. Friend for bringing this matter to the attention of the House and also pleased to give him the reassurances that he desires.
  Question put and agreed to.
  Adjourned accordingly at twenty-seven minutes to Eleven o'clock.

DEFENCE
  Australian Royal Commission Hearings (Transcripts)
  Australian Royal Commission Hearings (Transcripts)
  Demonstrators (Complaints)
  Demonstrators (Complaints)
  Head of Defence Sales
  Head of Defence Sales
TRANSPORT
  Car-Bicycle Accidents
  Car-Bicycle Accidents
  Local Authorities (Grant Bids)
  Local Authorities (Grant Bids)
  Vehicle Excise Licence Campaign (Bromley and Camden)
  Vehicle Excise Licence Campaign (Bromley and Camden)
  "The Bicycle and the Environment"
  "The Bicycle and the Environment"
  Local Government Reform
  Local Government Reform
  Stansted Airport (Inquiry)
  Stansted Airport (Inquiry)
  Singapore Airlines
  Singapore Airlines
  Bicycle Schemes
  Bicycle Schemes
  Roads (Expenditure)
  Roads (Expenditure)
NORTHERN IRELAND
  "Studying our Past"
  "Studying our Past"
  Armagh Prison (Strip Searches)
  Armagh Prison (Strip Searches)
SCOTLAND
  Morbidity (Lenihan Investigation)
  Morbidity (Lenihan Investigation)
  Housing Statistics
  Housing Statistics
EDUCATION AND SCIENCE
  Voluntary Schools
  Voluntary Schools
  University Students
  University Students
  Nursery Education
  Nursery Education
  Ethnic Minority Pupils
  Ethnic Minority Pupils
  Ethnic Minorities (Departmental Appointments)
  Ethnic Minorities (Departmental Appointments)
  Nursery School Places
  Nursery School Places
  Handicapped Children
  Handicapped Children
FOREIGN AND COMMONWEALTH AFFAIRS
  EC (Spain and Portugal)
  EC (Spain and Portugal)
  El Salvador
  El Salvador
PRIME MINISTER
  Argentina (Trade Sanctions)
  Argentina (Trade Sanctions)
  South-East Asia Visit (Cost)
  South-East Asia Visit (Cost)
  Energy Efficiency and Conservation Policy
  Energy Efficiency and Conservation Policy
EMPLOYMENT
  Labour Statistics
  Labour Statistics
  Crown and Non-Crown Workplaces
  Crown and Non-Crown Workplaces
  Health and Safety Executive
  Health and Safety Executive
  Hospitals (Kitchens)
  Hospitals (Kitchens)
  Health and Safety
  Health and Safety
  Mr. Paul Dixon
  Mr. Paul Dixon
NATIONAL FINANCE
  Mortgage Interest Tax Relief
  Mortgage Interest Tax Relief
  Construction Contracts
  Construction Contracts
THE ARTS
  Kelmscott House
  Kelmscott House
ENERGY
  Energy Efficiency
  Energy Efficiency
AGRICULTURE, FISHERIES AND FOOD
  Third World Countries
  Third World Countries
  Young Farmers
  Young Farmers
  Research and Development
  Research and Development
HOME DEPARTMENT
  London Joint Board for Fire
  London Joint Board for Fire
TRADE AND INDUSTRY
  Marple Dale Hospital, Stockport
  Marple Dale Hospital, Stockport
  Satellite Broadcasting
  Satellite Broadcasting
  Multi-fibre Arrangement
  Multi-fibre Arrangement
SOCIAL SERVICES
  Vaccine Damage
  Vaccine Damage
  Mr. T. J. Buckle
  Mr. T. J. Buckle
  National Health Service
  National Health Service
  Food Irradiation
  Food Irradiation
  Mrs. Doris Woodland
  Mrs. Doris Woodland
  Medical Aid for Poland Fund
  Medical Aid for Poland Fund
ENVIRONMENT
  Cleethorpes Borough Council (Fun Park)
  Cleethorpes Borough Council (Fun Park)
  West Midlands Region
  West Midlands Region
  Short-life Council Dwellings
  Short-life Council Dwellings
  Thamesmead
  Thamesmead
  Redundant Farm Buildings
  Redundant Farm Buildings
  Local Government Reform
  Local Government Reform
  Local Authority Services (Competition)
  Local Authority Services (Competition)
  Local Authorities (Government Communications)
  Local Authorities (Government Communications)