Sitting of 9 January 1985

Preamble
The House met at half-past Two o'clock
PRAYERS
[MR. SPEAKER in the Chair]
Oral Answers to Questions
  ENVIRONMENT

    Local Authorities (Expenditure)
    Mr. Amessasked the Secretary of State for the Environment what progress has so far been made in his inquiry into the use of sections 137 and 142 of the Local Government Act 1972 by local authorities.
    The Minister for Local Government (Mr. Kenneth Baker): I hope to be in a position shortly to advise the House of the details of the intended impartial inquiry into these and other issues.
    Mr. Amess: I wish my right hon. Friend and all other hon. Members a very happy and successful new year. However, is my right hon. Friend aware that a growing number of my hon. Friends are becoming impatient at the Government's seeming slowness in introducing legislation to curb the wasting of ratepayers' money by local authorities on political propaganda? Is my right hon. Friend also aware of the seeming inability of district auditors to act in the matter, because of their very narrow remit?
    Mr. Baker: I thank my hon. Friend for his good wishes for 1985. I am sure that we shall need them all.
    The spending of money by councils on political propaganda is scandalous. My hon. Friend's own council spends money in that way. The Greater London council has already spent about £10 million and the metropolitan counties £3 million. As many hon. Members will know, Westminster city council has won the first round of a court case against the Inner London education authority, which wishes to spend £750,000 of ratepayers' money. The case is going to appeal.
    This is an area of some clouded views. If the court case does not resolve the matter, we do not preclude legislation.
    Mr. Conway: Has my right hon. Friend's Department consulted the Government Law Officers on this matter? If such consultation takes place, will he direct the attention of the Law Officers to the placing of advertisements by local authorities in organs such as the Labour Herald?
    Mr. Baker: Yes, we have consulted the Law Officers, and I shall certainly draw to their attention the point that my hon. Friend has raised.
    Mr. Mark Carlisle: Is it not a complete disgrace and an absolute abuse that local authorities such as the Labour-dominated Warrington borough council should use ratepayers' money for the support of striking miners, especially when many of those ratepayers are, through no fault of their own, unfortunately unemployed?
    Mr. Baker: There is no doubt that certain Labour-controlled authorities are using their powers under section 137 in a way never envisaged in the original legislation. That is why there is to be an impartial inquiry into that abuse and many others as well.
    Mr. Tony Banks: Will the Minister tell the House how much taxpayers'money was spent on bringing out the Conservative party propaganda leaflets entitled "After the GLC" and "After the Metropolitan County Councils"? Was the material based on the Central Office handout just released by the Department of the Environment?
    Mr. Baker: The two admirable leaflets which the hon. Gentleman is holding up are not political propaganda. They contain an explanation of the main points of the Government's proposal. It is well precedented for Governments to produce such leaflets of explanation after Second Reading. It was done in the case of the Telecommunications Bill and of the Police and Criminal Evidence Bill. The cost was about £9,600, which would not buy even half a page in the Daily Mirror.
    Mr. Straw: While the power of local authorities to spend money for information purposes is closely regulated under legislation passed by the Conservative party in 1972, is it not true that central Government have a wholly unfettered power to spend taxpayers' money, and that it is the Government who have spent money scandalously, in support of abolition proposals which have not been approved by the House, of their tendentious defence policies and of privatisation?
    Mr. Baker: The conventions regarding the spending of advertising money by the Government are well known and have been observed by successive Governments. I assure the hon. Gentleman that we have acted within the conventions that successive Governments have followed.

    Departmental Costs
    Mr. Thurnhamasked the Secretary of State for the Environment what further action he is taking to control the total running costs of his Department.
    The Secretary of State for the Environment (Mr. Patrick Jenkin): I shall continue to use MINIS and my Department's budgeting systems to keep these costs under close and regular review.
    Mr. Thurnham: Is my right hon. Friend satisfied that local authorities are doing everything in their power to control their running costs?
    Mr. Jenkin: Many local authorities are, but I draw my hon. Friend's attention to the series of value-for-money reports being produced by the Audit Commission which suggest that if all local authorities followed the precepts there laid out they could save many hundreds of millions of pounds. That would be of great value to ratepayers.
    Mr. Simon Hughes: Does the Secretary of State agree that the best judges of whether a service is good value for money are ratepayers and taxpayers? Does he further agree

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    that the best facility to enable them to make such a judgment would be for the right hon. Gentleman to announce this afternoon that his Department will support fully the Bill, which is to be introduced soon, to secure freedom of information and access to information in local government? Will the right hon. Gentleman make such a commitment and carry it through during the rest of this Session?
    Mr. Jenkin: That matter goes wider than the original question. I must ask the hon. Gentleman to await the Government's reaction to that Bill.
    Mr. Steen: Has my right hon. Friend considered closing down the public land registers, which cost his Department about £250,000 a year to maintain and which, in the past four years, have sold only 2,000 acres of publicly held land? Does he agree that the best thing would be to auction off publicly held land which is dormant, redundant and derelict?
    Mr. Jenkin: I cannot accept my hon. Friend's suggestion. The land registers have proved an immensely valuable means of bringing to the attention of builders and others the fact that public land is available and should be put on the market. Many hundreds of acres have been sold. I have now made the first orders, using my statutory powers, to oblige certain authorities to disgorge land for which they do not appear to have any valid use. That would not have been possible without the registers.
    Mr. Janner: Does the compulsory, squalid and practical asset stripping of local authorities, especially those such as Leicester which have been rate-capped, not so add to the dictatorial powers of the right hon. Gentleman's Department that the running costs of the Department are bound to increase if, as is extremely unlikely, the Government are to give any decent service to people who have been served well by local authorities?
    Mr. Jenkin: I am not sure that the hon. and learned Gentleman would want that question reported too widely in the Leicester Mercury, as I suspect that the great majority of ratepayers in Leicester are pleased that, for the first year, they are getting some relief from their rates under the rate-capping legislation. I should have thought that there was universal support for the view that land which is held by public authorities and which is not needed by them should be sold so that it can be put to good use. I am astonished that the hon. and learned Gentleman does not accept that proposition.

    Hyde Park Memorial
    Mr. Greenwayasked the Secretary of State for the Environment if he will make a statement on proposals to establish a flower garden around the Hyde park memorial to the soldiers, civilians and horses killed by a terrorist bomb on 20 July 1982.
    The Parliamentary Under-Secretary of State for the Environment (Mr. Neil Macfarlane): Eighteen thousand spring and autumn flowering bulbs have recently been planted in the vicinity of the memorial plaque which will become naturalised in the grass and provide an annual display of blooms in the area. I am grateful for my hon. Friend's help in this development.
    Mr. Greenway: I am grateful to my hon. Friend and his Department for their great co-operation in planting a
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    beautiful garden around the memorial to the 12 soldiers, six civilians and seven horses who were killed in that appalling outrage. Some of the many hundreds of subscribers to the funds that I have raised for the purpose—many are of humble means, such as pensioners—are disappointed that roses have not been allowed. I understand that there is a horticultural problem in that it is difficult for rose trees or bushes to be planted in the area, but is there any way in which that problem can be overcome?
    Mr. Macfarlane: I think that we must be guided by the advice of the bailiff of the royal parks. Each case must be considered in the context of the park. I believe that what we have now will provide a natural and harmonious display in spring and autumn. It is a most fitting and lasting tribute to those who so tragically lost their lives in July 1982.
    Dr. Glyn: As a former officer of the Household Cavalry, I had the honour, while a Member of this House, to command the Queen's Lifeguard during a Session of Parliament. I am indeed grateful to the Minister. Is he aware that the incident is recorded permanently by the carrying of swords by the Queen's Lifeguard each time it passes the scene, as it does when it passes Buckingham Palace? This is a signal honour. We are delighted that the Minister has taken so much interest in this site. We shall welcome any additions for extras that he can provide.
    Mr. Macfarlane: I am grateful to my hon. Friend for his comments. The regiment, the royal parks bailiff and officials in my Department have, I believe, provided the best and most suitable harmonious display in memory of those who lost their lives.

    Rate Support Grant
    Mr. Parkasked the Secretary of State for the Environment what representations he has received from the local authority associations in response to his rate support grant proposals.
    Mr. Patrick Jenkin: At a meeting of the CCLGF on 11 December the associations gave me their initial reactions, which, as might be expected, varied widely.
    Mr. Park: Is it not a fact that the Secretary of State has had no support from the local authority organisations? What communications, if any, has he received in support of the proposals?
    Mr. Jenkin: The hon. Gentleman is wrong. For example, the Association of County Councils welcomed improvements in targets for low spenders. Indeed, I have received a number of letters from individual authorities which have expressed their appreciation for the fact that we delivered the commitment that we made this time last year. They also welcomed the increased emphasis on GREs as a basis for grant distribution. Of course there have been criticisms from other authorities and associations, and no doubt we shall have an opportunity fairly shortly to debate this matter.
    Mr. John Mark Taylor: Will my right hon. Friend take note that one of the Government's most loyal local authorities is Solihull, which, for its good stewardship, has been penalised £2 million in rate support grant?
    Mr. Jenkin: As my hon. Friend knows, my right hon. Friend the Minister for Local Government has agreed to

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    meet him and a deputation from Solihull. We are constantly pressed by the local authority associations for improvements and changes in the GRE system, but when these changes are made they inevitably result in different effects on different local authorities because they are intended to be more accurate and and to reflect more precisely the circumstances of individual authorities.
    Mr. Nellist: Is the Secretary of State aware that his predecessor visited the north east part of Coventry—the are represented by my hon. Friend the Member for Coventry, North-East (Mr. Park) — and described the housing conditions there as among the worst he had ever seen? How does the right hon. Gentleman justify the decision just before Christmas to reduce to less than £8 million the housing allocation to Coventry? That is a third of what the city needs for its council housing, and according to council housing officials it means that it will take nearly 35 years for private housing in Coventry to be repaired and renovated to any sort of decent standard. How does the right hon. Gentleman justify these cuts?
    Mr. Jenkin: That goes wider than the original question, which was about rate support grant. We should increasingly ask ourselves how those properties got like that. It was not the tenants. Who was it? How did they get like that? I believe that the record of many local authorities in relation to the management of council housing estates is a scandal, and I have no doubt whatever that many councils could do a great deal better if they really buckled down to it.
    Mr. Robert B. Jones: When my right hon. Friend considered these representations, how did he justify the fact that a 25 per cent. discount is applied to London rateable values because they are so high, but that the same fair treatment is not applied to Hertfordshire, Berkshire or Surrey, as a result of which they lose rate support grant?
    Mr. Jenkin: I am well aware of my hon. Friend's point. It is made regularly by the home counties. I must tell him that the differentials in rateable values in the Greater London area by and large justify the variation to which my hon. Friend has drawn attention. It could not be said to apply to the counties outside London. That position has now obtained for a number of years and is built into the statement that I made in December.
    Mr. Straw: Is the Secretary of State aware that at least 16 Conservative-controlled shire counties have lost, in aggregate, £120 million of grant for next year over this year, including Essex, which has lost £19 million, Hertfordshire, which has lost £14 million, and Surrey, which has lost £16 million? Have those 16 authorities welcomed the rate support grant settlement?
    Mr. Jenkin: Many points have been made to the Government about the rate support grant settlement, but there is general recognition, especially by many members of the ACC, that there is merit in restoring the councils' accountability to local ratepayers by reducing the share of expenditure which is met by the Government. In that we are merely following the practice of the previous Government. That is the main reason why the grant to those authorities has been reduced.

    Water Supplies (Nitrate Pollution)
    Mr. Teddy Taylorasked the Secretary of State for the Environment what progress he has made in measures to reduce nitrate pollution of public water supplies.
    Mr. Macfarlane: Trials of full-scale treatment plant to denitrify water supplies have been completed satisfactorily by the water research centre and the Anglian water authority at the authority's works at Bucklesham. Other research projects are under way. My Department is establishing a group of experts, with the help of the Ministry of Agriculture, Fisheries and Food, to evaluate information on nitrates and consider action to limit nitrate concentrations in water supplies. My right hon. Friend the Minister of Agriculture, Fisheries and Food is about to publish a code of good agriculture practice designed to minimise water pollution. It will include a section on fertilisers.
    Mr. Taylor: Is my hon. Friend aware that levels are still rising? Is it not unreasonable that my constituents in Southend and many others are faced with the choice of paying much higher water rates to cover the horrendous costs of removing nitrates from water because of the health directive, or of receiving ever-increasingly polluted water supplies? Why are the Government so reluctant to curb the amount of nitrates going into water or to make the polluters pay, which happens in every other industry?
    Mr. Macfarlane: My hon. Friend must be pleased that we have set up the group of experts. The co-ordination group will hold its first meeting on 14 January. Its terms of reference are to provide a forum for the evaluation of information collected about the sources, pathways and concentrations of nitrates in water. We shall see to what extent those levels, which he claims are occurring, are developing. We have acted thoroughly and positively and that group meets next week.
    Mr. Hardy: Does the Minister accept that, in addition to a priority for research, there must be proper priority for development regarding this grave problem? Does he accept that concern should be displayed not merely for public water supplies but for the contamination of virtually every water course and every wetland area in many parts of our islands?
    Mr. Macfarlane: That is an important consideration, which is why my right hon. Friend the Minister of Agriculture, Fisheries and Food and our officials are getting together urgently to evaluate all the facts and background information.
    Mr. Key: Will my hon. Friend be talking to the water authorities about the widespread concern that exists about the condition of rivers? The finger is pointed at fish farming, but there is increasing agreement that nitrates are a major cause of pollution in rivers. There has been a sad decline in the environmental aspects of river management.
    Mr. Macfarlane: Yes, I shall also draw that to the attention of the nitrate co-ordination group.
    Dr. David Clark: Will the Minister assure us that we shall have both research and urgent action, because this is a serious matter? Only recently one of the Minister's chief scientists told me that he regarded it as the greatest environmental time bomb facing Britain. Will he also

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    assure us that when the European Community directive on clean water is introduced there will not be major exemptions for waters that are affected by nitrogen?
    Mr. Macfarlane: I must make it clear that since the beginning of last year my Department has started collecting regular information about public water supplies with high nitrate levels, and that there has been no overall increase in nitrate levels in those supplies. The group has many things to do. The House will agree that action can follow only the most exhaustive research, which is why we have responded quickly and why the first meeting takes place on Monday of next week.

    National Infrastructure
    Mr. Willie W. Hamiltonasked the Secretary of State for the Environment what action he proposes to take in response of the recent National Economic Development Office report on the state of the national infrastructure of roads, housing, the water and sewerage systems.
    The Minister for Housing and Construction (Mr. Ian Gow): My right hon. Friend the Secretary of State will be discussing this report at a meeting of the National Economic Development Council later today, at which my right hon. Friend the Chancellor of the Exchequer will be in the chair.
    Mr. Hamilton: As the report is of critical importance to every member of our community and is a devastating criticism of the Government's current policies, and as almost every independent policy review institution is now asserting that public investment is the best and the most effective way of reducing unemployment, will the Government accept the verdict of the general public, or will they wait until 5 million or 6 million people are on the dole before they see the error of their ways?
    Mr. Gow: The best and most effective way of reducing unemployment is by pursuing policies that will result in honest money and sound finance, and by creating an economy in which there is low inflation and high investment. That is precisely what is occurring.
    Dr. Hampson: Does my hon. Friend agree that if the Government's oil revenues will be £1,000 million more than expected because of the strength of the dollar, he could improve the infrastructure, especially housing, by taking a more relaxed view of how local authorities may use their accumulated receipts from the sale of council houses and other assets?
    Mr. Gow: My hon. Friend knows that that matter was debated in the House on 19 December and that the Government secured a majority of 100 in that debate.
    Mr. Merlyn Rees: Is not one of our problems that the civil servants in the Treasury, whose job it is to advise the Chancellor of the Exchequer, know nothing about the problems of our northern cities? Would it not be a good idea for the Department of the Environment to organise coach trips at the weekends to take civil servants there so that they can see the problems that many Labour Members see every day?
    Mr. Gow: My right hon. Friends and I, as Ministers in the Department of the Environment, rightly make extensive visits to all parts of the kingdom to study precisely the matters to which the right hon. Gentleman referred.
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    I have one further thing to say in response to the right hon. Gentleman's question. He was a member of an Administration — indeed, a member of the Cabinet — when the former Chancellor of the Exchequer, the right hon. Member for Leeds, East (Mr. Healey), wrote on 15 December 1976 to the then managing director of the International Monetary Fund:
    "It is … essential to reduce the public sector borrowing requirement … in order to create monetary conditions which will encourage investment and support sustained growth".
    The Government are following those policies.
    Mr. McCrindle: Has my hon. Friend seen the editorial in this morning's Financial Times under the heading of "Hard facts on infrastructure"? Does he note that the editorial concedes that a debt burden would be bad for future generations, but so, too, would a crumbling infrastructure? Leaving aside for the moment arguments about the benefits to the relief of unemployment that may flow from greater investment in the infrastructure, may I ask my hon. Friend whether he believes that, purely in terms of the infrastructure, there is a strong argument for additional investment in the very near future?
    Mr. Gow: Of course I agree with my hon. Friend that it is important to have proper investment in the infrastructure. It is precisely for that reason that expenditure in the water industry will increase from £686 million this year to £769 million next year, and as planned to £870 million in 1987–88. The House will know that expenditure on roads will increase from £806 million this year to £824 million next year, and to £870 million in 1986–87. There is a programme of increasing investment in exactly the areas which my hon. Friend described.
    Mr. Rooker: Does the Minister accept that the lack of public investment in the infrastucture back to 1976—the year which the Minister quoted—is holding up further private investment? What is his reply to the statement by that most moderate of employers' organisations, the Federation of Civil Engineering Contractors, which is responsible for 90 per cent. of the infrastucture, that
    "we are becoming increasingly fed up with the current propaganda campaign being waged by the Government to discredit the case for more infrastructure investment"?
    Mr. Gow: The hon. Gentleman will want to be reminded of some remarks by the right hon. Member for Cardiff, South and Penarth (Mr. Callaghan)—[Interruption.] I was asked about the construction industry, and I was about to quote a comment by the right hon. Gentleman, to whom we shall all want to send our very best wishes. The right hon. Gentleman said:
    "We used to think that you could spend your way out of a recession by boosting Government spending. I tell you in all candour that that option no longer exists and that in so far as it ever did exist it worked on each occasion since the war by injecting a bigger dose of inflation into the economy."
    I must tell the Opposition Front Bench that the best prospects for the construction industry are those that have been described, rightly, by my right hon. Friend the Chancellor of the Exchequer, namely, that we secure a soundly based economy. We do not intend to revert to the policies followed by the Labour Government of borrowing where they dared not tax and printing what they could not borrow.

    Rate-capping
    Mr. Chris Smithasked the Secretary of State for the Environment if he intends to make a visit to all local authority areas designated under the Rates Act 1984.
    Mr. Patrick Jenkin: No, but I and other DOE Ministers make many such visits in the normal course of our duties.
    Mr. Smith: In the course of his visits the right hon. Gentleman will doubtless have become aware of the anger of many residents in the rate-capped areas at the Government's proposals. Will the right hon. Gentleman at least say whether he is now prepared to meet a joint delegation from the rate-capped authorities? Will he also say what statutory basis, if any, exists for the date of 15 January which he has set down to the rate-capped authorities for the making of representations?
    Mr. Jenkin: The rate-capped authorities should be aware that the timetable requires that we shall very shortly be laying the orders setting out those rate and precept limits that have not been agreed. Therefore, the time left for them to exercise their statutory rights individually to seek to argue for a higher rate or precept limit is running out rapidly. I urge any which are contemplating that to do so quickly. Once the orders have been laid it will be very much more difficult to secure any change. If I have an application—and I have not yet—for representatives of all the 16 or 18 authorities to meet me collectively, I shall be very happy to see them.
    Mr. Couchman: Is my right hon. Friend aware of the great offence taken by taxpayers and ratepayers when they are assailed by notices telling them that they have entered a rate-capped, nuclear-free zone and are wished a happy festive season by such as the London borough of Lewisham, which has painted expensive notices expressing good wishes and giving some political slogans denigrating the Government's action? Does my right hon. Friend agree that this reinforces yet again, if it needs reinforcement, the action that he has taken to cap their rates?
    Mr. Jenkin: I agree with my hon. Friend, and it is a scandal. The Association of Labour Authorities in London has now voted to spend £350,000 on this campaign. The ratepayers in those authorities should know that £350,000 would buy no fewer than a quarter of a million meals on wheels. That is the alternative.
    Mr. Skinner: Is the Secretary of State aware that in some of the local authorities now facing the axe from this Government one idea being canvassed strongly amongst their leaders is that they should refuse to pay any further instalments on local authority debt? The right hon. Gentleman should not be surprised at the action that might be taken in that respect. If it is right for banks such as Johnson Matthey to be trading in an insolvent fashion and then to be rescued by the Bank of England with a nod and wink from the Government, why should not the authorities do the same? It is the only way to salvation for some of them.
    Mr. Jenkin: The hon. Gentleman studies such matters closely and he will know that debt repayments are a first charge upon the revenues of a local authority. He may or may not know that when one recent London local authority leader threatened not to pay his debt interest, his brokers
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    swiftly ran him round all the money markets to say that it was pure political propaganda. That is the reality. Of course the local authorities will pay their debt charges. The people who will suffer if they do not will be their staff, who will not be paid, and the clients of the local authority services, who will not get their services.
    Mr. Spencer: If my right hon. Friend receives representations from Leicester, will he take time to point out the impressive rejuvenation of the inner area that has already taken place under the inner area programme as a result of grants totalling more than £20 million which Leicester has received during the past four or five years?
    Mr. Jenkin: My hon. and learned Friend is right. Leicester has had much help from the Government. I have not yet had from any local authority, certainly not from Leicester, an application for an increase in the rate limit that I have set. As I said earlier in reply to the hon. Member for Islington, South and Finsbury (Mr. Smith), time has now almost run out for that. If they wish to come forward, they should do so promptly.
    Dr. Cunningham: Does the Secretary of State recognise that his statement of willingness to meet the authorities will be welcomed? Certainly I welcome it. I hope that he will not hold rigidly to the date of 15 January, especially as two of the three weeks that have elapsed since he made his statement have been taken up by the holiday period, which as every sensible hon. Member knows, is a time when local authority business, like much Government and House of Commons business, does not take place.
    Will the Secretary of State accept that his refusal in a Parliamentary answer to me of 18 December to spell out the principles on which he has exercised his discretion under the Act in fixing rates for authorities will inhibit the negotiations in which he says he is willing to engage? Will he rethink his answer?
    Mr. Jenkin: I thank the hon. Gentleman for his welcome, but I must make it clear that my readiness to meet a deputation cannot constitute an application from a local authority for a revision of the rate or precept limit. That can only be made individually by each authority. We have to proceed strictly by the legislation. It is only if there is negotiation about the limit, instigated by an application by an individual authority, that it would be appropriate, according to my clear legal advice, for me to become involved in spelling out the assumptions that have been made. If any authority wishes to object to the rate limit it must do so swiftly and individually and enter upon a discussion. The hon. Gentleman knows the parliamentary procedures, and we shall have to make the orders fairly soon.

    Housing Statistics
    Mr. Hardyasked the Secretary of State for the Environment what was the proportion of the national housing stock which was either demolished or ceased to be used for occupation in the last 12 months for which statistics are available.
    The Parliamentary Under-Secretary of State for the Environment (Sir George Young): In 1983–84 about one in a thousand of the total English housing stock was demolished or ceased to be available for housing use.
    Mr. Hardy: Does that answer not demonstrate that the Government's complacency is outstripped only by their negligence? Is it not clear that if present policies are maintained, houses built today will have to remain in a habitable condition for longer than the life of even the oldest occupied building in our islands? Do houses built today have a life expectancy of 1,000 years?
    Sir George Young: That is a rather naive question, because it does not take into account the age of the stock that we are considering. The rate of demolition has been falling for a number of years, not least because local authorities perceived the social damage that resulted from wholesale demolition in the 1960s. Under this Government the rate of demolition has continued to decline, but there has been a dramatic escalation in expenditure on improvement grants. Those trends should be commended rather than deplored.
    Mr. Cyril D. Townsend: Does not the freezing of council assets produce problems of principle out of all proportion to any theoretical benefit that the Treasury might derive? Will my hon. Friend confirm that one of the main points of selling council houses is to give to local authorities the capital that they need to meet their many and various requirements, particularly in housing?
    Sir George Young: My hon. Friend has raised a slightly broader point, which we debated at length on, I think, 19 December. For next year we have made available about £3 billion for public investment in housing. That is broadly the same amount as was available this year and, indeed, in the two preceding years. Within that figure I hope that the local authorities will be able to tackle the essential elements that need attention within their housing stocks.
    Mr. Allan Roberts: Why does the Minister pretend that he is not cutting housing investment programmes? Does he not realise that there have been massive cuts in the amount of money available for improvement grants and new house building, and that the Government's policies will lead inexorably to the return of the bulldozer and to massive slum clearances? Why has Sefton council, a Conservative-controlled authority which introduced a moratorium when the Minister requested restraint, had a massive cut in its housing investment programme, and why has it received only 30 per cent. of what it asked for? Housing will continue to decline, stocks will become worse, and yet improvement grants will not be given.
    Sir George Young: Perhaps I can refresh the hon. Gentleman's memory. In the last year of the Labour Government £90 million was spent on improvement grants, while the figure for the last year was £900 million. That puts the hon. Gentleman's figures into perspective. The major cuts in public sector investment in housing took place between 1974 and 1979, when such investment fell by 45 per cent. after allowing for inflation. The hon. Gentleman should bear in mind that the comparable figure for this Government is 17 per cent. I hope that he will redirect his criticisms.
    Mr. Powley: Does my hon. Friend agree that it is quite disgraceful that a Member of Parliament should be unable to obtain figures from local authorities for the number of council properties in their ownership that have been empty
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    for up to 12 months? Is it not incumbent upon us to know the figures and to know what problems are so that we can see how to solve them?
    Sir George Young: I agree with my hon. Friend, and that is one of the matters that may be considered by the inquiry to which my right hon. Friend the Secretary of State has referred. About 25,000 units have been empty for more than a year and it is essential that we do all that we can to bring them back into use. I regret that Norwich city council has not considered it necessary to give the Department essential information about its housing stock.
    Mr. Alton: The Minister has told us that expenditure last year on improvement grants amounted to £900 million, but why did he not go on to say—as he said in a letter to me yesterday — that this year the level of expenditure on improvement grants is likely to be £700 million, meaning a reduction of £200 million? Does that not mean the return of the bulldozer to many of our cities? What will he do to ensure that the limited housing improvement grants are used in housing action areas?
    Sir George Young: If the figure of £750 million were achieved, it would have to be compared with the figure for the last year of the Lib-Lab pact, which was £90 million. There is an element of hypocrisy in some of the questions that are directed at the Government about expenditure on improvement grants. That expenditure is at a record level.

    Basildon (Rate-capping)
    Mr. Proctorasked the Secretary of State for the Environment what representations he has received from Basildon district council on the subject of rate-capping; and if he will make a statement.
    Mr. Kenneth Baker: Basildon council has made a number of representations about rate limitation, but it has not yet said whether it accepts the proposed rate limit which my right hon. Friend announced on 11 December. The council has until 15 January to make representations about the proposed limit.
    Mr. Proctor: Does my right hon. Friend think that Basildon district council has not contacted his office because it is embarrassed over the extravagance of its earlier claims over the impact of rate-capping, or because of its embarrassment over its extravagant spending on items such as housing administration? What does Basildon district council have to hide?
    Mr. Baker: It is difficult to probe the motivations of Basildon district council. It budgeted for growth last year of 20 per cent., which is totally unrealistic. It can certainly live within the rate limit that we have set. The Audit Commission produced a report on Basildon, showing that it spends £600,000 more than the average council on its housing administration, and £180,000 on public relations.

    Rate-capping
    Mr. Cartwrightasked the Secretary of State for the Environment what consultations he has had with those local authorities designated under the Rates Act 1984.
    Mr. Kenneth Baker: None of the selected authorities applied for a redetermination of its expenditure level. In setting proposed rate and precept limits my right hon. Friend took account of a number of representations. I await comments on those proposed limits before 15 January.
    Mr. Cartwright: Is the Secretary of State prepared to delay the laying of orders under the Rates Act for as long as possible in order to encourage the rate-capped authorities to argue their case with him? If they do not seek changes in the limits, is the Secretary of State committed to making orders that confirm the rate maximum that was laid down in his statement of 11 December?
    Mr. Baker: Greenwich and the other rate-capped authorities have had since July of last year to come and discuss with my right hon. Friend and myself in the Department the actual expenditure levels. They declined to do so. Since 11 December they have had opportunities to come and discuss the rate limits. I have encouraged them to do so. I believe that the limit we have set for Greenwich is appropriate. We have used the figures that were available to us. I think that many of the ratepayers of Greenwich will welcome the rate limit, which is a reduction this year of about 19 per cent. The actual rate increases which the hon. Gentleman's constituents have had over the last three years have been 11 per cent., 59 per cent. and 20 per cent.

    Construction Industry
    Mr. Winnickasked the Secretary of State for the Environment what representations he has received over the past three months regarding the state of the construction industry.
    Mr. Gow: I continue to maintain close contact with the construction industry. My right hon. Friend the Secretary of State will be discussing with the National Economic Development Council later today its recent report on the infrastructure. My right hon. Friend and I hope to meet the Group of Eight next month.
    Mr. Winnick: When will the Government recognise the appalling housing plight of so many people who need rented accommodation, as well as those tenants who are living in pre-war council dwellings that need to be modernised? The Minister referred to the Labour Government. Is it not a fact that in 1978, the last year of that Government, well over 107,000 housing starts were made in the public sector, compared to an estimated 40,000 last year? This year the figure is expected to be even less. Why do the Government refuse to take action to help people who need somewhere to live?
    Mr. Gow: As the House knows, total public sector provision for housing in the coming financial year will be £3,055 million. Of that, £2,324 million will be made available to local authorities. I think that the hon. Gentleman will want to join in a tribute to the private sector, which in 1984 completed 150,000 houses, the highest figure for 10 years. I must remind the House of what my hon. Friend the Under-Secretary said earlier. Public sector investment in housing fell by 45 per cent. in real terms between 1974 and 1979, and between 1979 and 1984 it has fallen by 17 per cent. on the same basis.
    Mr. Heffer: Is the hon. Gentleman aware that the Group of Eight is representative of all sides of the industry and that the employers' side is as much concerned, in fact even more concerned, than other sections of the industry? Is it not clear that he should make a stand on this issue? The press has said that he thought of resigning. Can he indicate whether he has obtained any concession from the Government so that in the coming year we may see
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    positive results in the construction industry and not a further decline, such as we have seen over the last three years?
    Mr. Gow: Of course, I agree with the hon. Gentleman that on the Group of Eight there are representatives of the trade unions as well as of employers. As I said in my earlier reply, my right hon. Friend and I keep in close touch with the construction industry and are looking forward to our meeting next month with the Group of Eight. In reply to the second part of the hon. Gentleman's question, it is wise not to believe everything that one reads in newspapers.
    Mrs. Renée Short: All of us who represent industrial areas know very well that the housing stock needs to be renewed and replaced. It is not surprising that ancient houses, built 50 years ago under the first public housing legislation, are standing empty when they have not been modernised and brought up to standard. Is the Minister aware that there are 400,000 or so unemployed building workers and that large amounts of building and construction machinery are lying about unused all over the country? Why on earth does the Minister not get these people back to work and see that houses are improved, and new houses are built, for those on the long waiting lists in all industrial areas?
    Mr. Gow: It is a great mistake to believe that the best way of creating further employment is by higher public expenditure. The way in which we shall be able to create lasting jobs is by having no inflation and a more efficient economy. Certainly the prospects for revived employment depend crucially on a strong private sector.
    I want to say one other thing to the hon. Lady in response to her question. It is a continuing scandal that 25,300 houses and flats owned by local authorities—most of which are Labour-controlled—have been empty for more than 12 months. We would be able to make a significant contribution to solving our housing problems if we could bring that stock back into use.
    Mr. John Fraser: Is the Minister aware of the words of the president of the Building Employers Confederation early in December? He said that it cannot be good husbandry to pay 400,000 construction workers to do nothing while the nations's building stock slides further into decay and even larger bills for the future are run up because of lack of maintenance now? The Secretary of State must be regarded as the £5 billion Judas by the construction industry and the local authorities after putting another 50,000 people on the dole as a result of his statement on 18 December. Has the Secretary of State received one letter of support from any part of the construction industry for the savage programme of cuts which he introduced that day?
    Mr. Gow: The hon. Gentleman overlooks the truth that output by the construction industry on repair and maintenance has grown and continues to grow. In 1983 £8·4 billion was spent—nearly £500 million up on the year before. We expect output in the construction industry to continue to grow. It is a great mistake to believe that the only engine of growth is in the public sector.

    North-west Region (House Building)
    Mr. Tony Lloydasked the Secretary of State for the Environment if he will indicate how many houses were completed in the north-west region in 1979, and 1983; and how many are expected to be completed in 1984.
    Sir George Young: Dwelling completions in 1979 and 1983 were about 23,900 and 18,200, respectively. The Department has made no estimate of the 1984 total, but completions in the first three quarters were about one fifth more than in the same period of 1983.
    Mr. Lloyd: Is not that reply a disgrace to the Government? Are they not becoming the Government of slum dwellers because housing stock in the north-west is not being replaced or improved fast enough to ensure that its quality does not deteriorate dramatically? The Minister said that he did not threaten to resign. Is it not a shame that he did not take that step and so provide relief for all local authorities in the north-west?
    Sir George Young: I hope that the hon. Gentleman will consider the broader picture, in particular private sector starts in the north-west. In 1982 and 1983 there were more private sector starts than in 1979. I am confident that that figure will be exceeded in the current year. Rather than concentrate on public sector housing, one must take a broader view of what is happening in the north-west. Completions in the first three quarters of 1984 were higher than in the preceding year. I hope that we can maintain that trend.

    Enterprise Zones (Glanford and Scunthorpe)
    Mr. Hickmetasked the Secretary of State for the Environment how many new companies have set up in the three enterprise zones in the constituency of Glanford and Scunthorpe, giving their names; how many net new jobs have been created thereby; and if he will make a statement.
    Sir George Young: The best information that we have, which was provided by the local authorities, is that two firms have set up in the Glanford zone and five in the Scunthorpe zone since designation. To save the time of the House, I shall write to my hon. Friend with their names. We do not yet have details of jobs in the zones.
    Mr. Hickmet: Is it not a fact that free enterprise zones, development area status, a massive building programme by English Industrial Estates and Government assistance to Scunthorpe should enable it to reduce unemployment significantly? Will my hon. Friend bear in mind anxiety about the local authority's decision to allow a retail development covering eight acres in one of the enterprise zones, which will cause damage to the town centre?
    Sir George Young: I welcome the optimism in my hon. Friend's opening remarks. He has expressed concern to my Department about the retail development to which he refers. The evidence shows that retail developments in enterprise zones do not adversely affect existing retail projects in nearby shopping centres, not least because the economy of the area as a whole benefits from the injection of an enterprise zone. We have the matter under review and we shall be monitoring this year the new enterprise zones set up a few years ago.

    Rate Support Grant
    Mrs. Clwydasked the Secretary of State for the Environment how many authorities are now likely to suffer grant holdback in 1984–85.
    Mr. Patrick Jenkin: One hundred and thirty-nine local authorities in England are incurring grant holdback on the basis of their budgeted expenditure. The final number, which I hope will be fewer, will depend on their outturn expenditure.
    Mrs. Clwyd: Why does not the Secretary of State follow the advice of the Audit Commission report and end those iniquitous penalties, which cause instability and higher rates to the tune of £400 million a year?
    Mr. Jenkin: We do not accept the view of the Audit Commission's report, and at the moment that matter is before the Public Accounts Committee. Many of the Audit Commission's recommendations were sensible, and we are acting on some of them. However, we do not accept some of the figures and reasoning. The matter is before the Public Accounts Committee, and no doubt will come before the House in due course after the Committee has reported.
    Mr. Yeo: Is my right hon. Friend aware that there is widespread support for his efforts to reduce the central Government contribution to very extravagant local authorities, but that equally, there is great dismay in counties such as Suffolk, which face the prospect of holdback although they are spending substantially below the GREA level?
    Mr. Jenkin: I know that my hon. Friend will welcome the fact that—I am speaking from memory—Suffolk Suffolk was one of the authorities which received the biggest increase in the target over this year's budget, which should have made it much less likely that it will exceed the target and so incur penalties. Our target methodology for this year for low-spending shire counties has been widely welcomed.

    Methyl Isocyanate
    Mr. Easthamasked the Secretary of State for the Environment what recent representations he has received regarding the environmental implications of the use, storage and disposal in the United Kingdom of the chemical methyl isocyanate; and if he will make a statement.
    Mr. Gow: Since the tragedy in Bhopal on 3 December my right hon. Friend the Secretary of State has received a small number of representations about the use, storage and disposal of the chemical methyl isocyanate. That chemical is not manufactured in the United Kingdom. It is used and stored by Ciba-Geigy at its factory near Grimsby, where a maximum of eight tonnes is stored in 40 drums containing 45 gallons each. I understand that in the Bhopal disaster 45 tonnes were stored in a single container. Very small quantities of the chemical are stored for research purposes at four other places in the United Kingdom. In all cases, storage is subject to strict control by the Health and Safety Executive. That chemical is included in schedule 3 to the Control of Industrial Major Accident Hazards Regulations 1984, which came into force yesterday. Before and after the Bhopal disaster, officers of the Health and Safety Executive inspected the

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    factory at Ciba-Geigy and are satisfied as to the safety of the operation. I am advised that the disposal of that chemical is not considered to be a significant problem.
    Mr. Eastham: I thank the Minister for his statement. He referred to storage, but is it not a fact that nowadays there are grave misgivings about drivers not complying with regulations, which also applies to private haulier contractors who have been contracted to pick up that material? Is it not about time that we had legislation whereby environmental health officers had some control, not only over factories and chemical works in towns and cities, but over the routes taken by those vehicles?
    Mr. Gow: I understand the hon. Gentleman's point. Of course safety is important in transit as well as in places where that chemical is stored permanently. If the hon. Gentleman has any evidence, I shall look into that and discuss it with my right hon. Friend the Secretary of State for Employment.
    Mr. Douglas Hogg: Will my hon. Friend undertake a wider inquiry and review of the relevant planning law and practice to ensure that when there are applications for the manufacture and storage of toxic materials the safety of the local community is fully ensured?
    Mr. Gow: I give my hon. Friend that undertaking. Following the amendments made last year to the general development and use classes orders and the publication of advice on planning control over hazardous development, we have consulted on proposals for strengthening those regulations and controls, and legislation will be introduced as soon as possible.
    Dr. Cunningham: Although no one wants to be alarmist, does the Minister accept that his statement is bound to cause some anxiety, not least because chemicals such as methyl isocyanate and others, which are extremely
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    toxic and dangerous, are stored in urban locations—as he said but did not name — and problems can arise, particularly at the point of change from storage to transport? Is the Minister satisfied that he can expect the public to accept Government assurances in this kind of case when the Government have presided over a rundown of almost one third of their own target for the Factories Inspectorate, the people responsible for the monitoring, checking and supervision of these important matters?
    Mr. Gow: There is no cause for public disquiet about this, because officers of the Health and Safety Executive visited the chemical plant near Grimsby before and after the tragedy at Bhopal. The officers of the Health and Safety Executive are satisfied that the operation at that factory is being carried out with full and proper regard to safety and strictly in accordance with the standards laid down.
    Mr. Madden: On a point of order, Mr. Speaker.
    Mr. Speaker: Order. Does the point of order arise directly out of Question Time?
    Mr. Madden: Yes, Mr. Speaker. I am sure that you will be concerned that, of the 35 questions tabled for reply today, only 15 were answered, primarily, in my view, because of the long-winded, ponderous replies given by Ministers. In view of the considerable expense incurred by officials and others in preparing for Question Time, and given that low reply rate, do you agree that unless Environment Ministers speed matters up next time they are in danger of being seen as an uneconomic unit?
    Mr. Speaker: Order. I cannot be responsible for the length of supplementary questions or the answers, but I have sympathy with what the hon. Member said. We should have got a little further than we did today at Question Time.

Michelin Tyre (Redundancies)
3.32 pm
Mr. Jack Ashley: 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,
"redundancies at the Michelin Tyre company in Stoke-on-Trent."
The matter is specific, because the Michelin Tyre company announced yesterday that tyre production in Stoke-on-Trent was to be slashed, and that 2,400 workers there would soon lose their jobs. It is important, because the lives of thousands of workers will be transformed. They will be plunged into the poverty of unemployment and, unless something is done about it, into the despair of long-term unemployment. They will even, tragically, be denied hope for future jobs for their children. I am pleased to see that the Minister of State, Department of Trade and Industry is present.
The matter is important also, because the dismissal of 2,400 workers shows that there is no steady economic recovery as the Government have claimed. It gives an ominous warning to the whole of British industry that if an efficient manufacturing firm such as Michelin cannot compete effectively at home and abroad, given the low value of the pound, then British firms are far more vulnerable to foreign competition than anyone has yet admitted.
The matter is urgent, because most of the workers are to lose their jobs by the end of April. The redundancies will add 2,400 to the already high unemployment total of 24,000 in north Staffordshire, giving a rate of about 13·5 per cent. It is calculated by Keele university that the knock-on effect — the kind of Maynard Keynes multiplier in reverse—will add a further 1,600, making a total of 4,000 more unemployed people in the area. If
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these figures are correct, the unemployment rate will shoot up to 14·4 per cent.—well over the national average of 13·2 per cent.
The matter it is also urgent—I address the Minister of State, Department of Industry, directly — because only a few weeks ago the Government designated areas for regional aid which excluded north Staffordshire. But in the light of these new circumstances, there should obviously be an immediate reappraisal. We need to debate the fact that the case for north Staffordshire to be given Government aid, formerly powerful, is now overwhelming and very urgent. In addition, emergency aid for north Staffordshire is now vital.
The matter is also urgent because the Michelin company needs help both to reduce the immediate job losses and to preserve tyre-making capacity for the future. We need to debate, as a matter of urgency, how the Government can advise and aid manufacturing companies such as the Michelin company, which are being crucified by foreign competition.
Unless action is taken very soon for the whole of British industry as well as for Michelin and north Staffordshire, our national manufacturing capacity will suffer a dramatic decline and we shall become a nationally derelict area. I hope, Mr. Speaker, that you will allow time to be found for an emergency debate on these vital issues.
Mr. Speaker: The right hon. Member for Stoke-on-Trent, South (Mr. Ashley) has asked leave to move the Adjournment of the House for the purpose of discussing a specific and important matter which he thinks should have urgent consideration, namely,
"redundancies at the Michelin Tyre company in Stoke-on-Trent."
I have listened with great care to what the right hon. Gentleman has said. I regret that I do not consider that the matter which he has raised is appropriate for discussion under Standing Order No. 10. I cannot, therefore, submit his application to the House.

British Embassy, Oslo (Union Information)
3.38 pm
Mr. Tony Benn: I was able to tell you, Mr. Speaker, a few moments ago, but only then, because I heard the information only at 3 o'clock, that I should like to move the Adjournment of the House, under Standing Order No. 10, for the purpose of drawing attention to a matter of urgency which should take precedence over other business, namely,
"the decision of the British embassy in Oslo to demand information from a Norwegian trade union about the extent of its financial support for the National Union of Mineworkers." [Laughter.]
Hon. Members may not laugh when they hear the implications of agreeing that foreign embassies in Britain can make direct approaches to organisations here.
The British embassy in Oslo has approached the Norwegian National Union of General Workers to demand an answer to two questions: first, "Have you provided financial support for the National Union of Mineworkers?"; secondly, "If so, how and in what form?". In my judgment, this development raises important issues, which I should like very briefly to summarise.
First, who authorised this action? Was it the Foreign Secretary, the Cabinet, the Prime Minister? Secondly, why was no report made to the House? Thirdly, what implications does this have for international relations? Is it now the view of the Government that foreign embassies in London can make demands on any organisations that they choose in pursuit of their own policies? Next, does this indicate that the Government are now a direct party to the dispute—
Mr. Douglas Hogg: No.
Mr. Benn: Well, if the British embassy in Oslo is now seeking to pursue this matter, that makes it a direct participant in the dispute.
Is the sequestrator working under the direction of the courts or of the Foreign Secretary? Is the coal board, which is a party to the dispute, responsible for commissioning the embassy to make this inquiry?
The House should debate this matter. The action of the embassy is a sign of desperation by the Government, corning on top of the failure to secure a return to work and the possibility of a rail strike and an interruption of fuel supplies. Such a debate, which would be of considerable national importance, could be easily accommodated within this week's business.
Mr. Speaker: The right hon. Member for Chesterfield (Mr. Benn) asks leave to move the Adjournment of the House for the purpose of discussing a specific and important matter which he believes should have urgent consideration, namely,
"the decision of the British embassy in Oslo to demand information from a Norwegian trade union about the extent of its financial support for the National Union of Mineworkers."
The right hon. Gentleman and the whole House know that the only decision that I have to take on these applications is whether the matter should have precedence over the business set down for today or tomorrow. I listened with care to what the right hon. Gentleman said, but I regret that I do not consider that the matter which he has raised is appropriate for discussion under Standing Order No. 10; and I cannot, therefore, submit his application to the House.

Miss Hilda Murrell
3.41 pm
Mr. Derek Conway: On a point of order, Mr. Speaker. I raised with you at midday today my intention to raise under Standing Order No. 10 a matter—
Mr. Speaker: Order. The hon. Gentleman must not say that.
Mr. Conway: On a point of order, Mr. Speaker. I seek your guidance on how I can raise a matter of particular and singular importance to my constituency. Throughout the Christmas recess and as recently as yesterday, there has been considerable national coverage of the allegations made in the House on 19 December by the hon. Member for Linlithgow (Mr. Dalyell) who has, in the view of my constituents, impeded the apprehension of the murderer of my former constituent, Miss Hilda Murrell, by giving information to the House on 19 December which the police have subsequently denied. The hon. Gentleman alleged British secret service and intelligence involvement in the murder of Miss Murrell.
It is important that the House should have the opportunity to hear the reply to the hon. Member's allegations and to urge him to cease impeding the police in their inquiries.
Mr. Speaker: First of all, the hon. Gentleman should not raise in the House matters that he has discussed privately with me. Secondly, his point of order is not a matter for me. No doubt he had the opportunity to be present for the debate on 19 December and he must find other ways of pursuing that matter.

Weather Conditions (Heating and Shelter)
3.42 pm
Mr. David Winnick: On a point of order, Mr. Speaker. Can you advise me on how issues affecting our constituents can be raised in the House today? Many elderly people desperately need assistance to pay their fuel bills and are suffering a great deal because of the bad weather.
Why has no Minister come to the House to give us a statement about what assistance, if any, is to be given to our elderly constituents? The Government have authority to make payments when there is a severe winter. That was last done in January 1982. Why has not the Secretary of State for Social Services or any of his ministerial colleagues come to the House to deal with the matter? So many elderly people live on inadequate incomes and they will not turn on their heating because they are frightened of the quarterly fuel bill that will arrive in four or six weeks. It is an appalling situation and we should have a statement from the Government.
Mr. Speaker: That is not a point of order for me. The hon. Gentleman is an experienced Member, and I need not advise him on parliamentary tactics. I am sure that he will realise, on reflection, that there are many ways in which he can raise such matters.
Mr. Eric S. Heffer: On another point of order, Mr. Speaker. Has any Minister suggested to you that the Government are prepared to make a statement about the homeless who are living on the streets in London, Liverpool and other places? Clearly, some are likely to die unless urgent steps are taken to provide shelter for them. Have Ministers given you any indication that they are taking emergency steps to deal with the problems caused by the present bad weather?
Mr. Speaker: Order. The answer to the hon. Gentleman is exactly the same as the answer that I gave to his hon. Friend the Member for Walsall, North (Mr. Winnick). There are other opportunities for raising these matters, and I have not received any such request.

Youth Charter
3.45 pm
Mr. James Wallace: I beg to move,
That leave be given to bring in a Bill to promote opportunities for young people in International Youth Year 1985 by establishing a youth charter giving rights and representation to young people: and for connected purposes.
I am pleased to be able to seek the leave of the House to bring in this Bill on the first sitting day of 1985, which is International Youth Year. At the earliest possible opportunity in the year, the House could, by giving me leave to bring in the Bill, express its concern for the problems faced by our young people, and its faith and confidence in them, by extending to them the rights and opportunities that would be contained in the youth charter that I propose.
I have referred to the problems faced by many young people. Regrettably, for many, this new year is no new dawn of hope. Four unemployed people out of 10 will be under 25 and 350,000 people will be on training schemes without the certainty of a job at the end. With 22,000 fewer university places than five years ago—equivalent to the closure of two universities the size of Cambridge — many young people will have their academic aspirations frustrated and will be denied the opportunities enjoyed by myself and my contemporaries only a decade ago. In 1985 drug abuse by young people will reach unprecedented levels, as will juvenile crime.
It is idle to expect that one Bill could remedy these many wrongs. Other political measures requiring Government initiative will be necessary. My right hon. and hon. Friends and I would welcome the appointment of a Minister to co-ordinate Government policies affecting young people. We are in danger of allowing a generation of young people to grow up many of whom feel totally alienated from the society and community of which they are members. During International Youth Year, my hon. Friends and I will try to bring before the House a series of measures which, if supported, would signal to the young people of our country our awareness of their problems and our willingness to respond to them.
In proposing a youth charter, it would be all too easy for me to fall into the trap of patronising the young or telling them what is best for them. Rather than do that, the charter would seek to establish rights and to create a framework within which young people could participate more fully in the affairs of the community and the decisions that affect or shape their lives. I hope that the charter would reflect the themes of International Youth Year: participation, development and peace.
Under the heading "participation" we would hope for greater involvement by young people in decision-making. We would propose a lower voting age and a lower age for candidature. At a time when the future of the world is in the hands of two super-power leaders in comparison with whom our own Prime Minister is a young chicken, is there any relevance in considering those at the other end of the age scale? The young have an important stake in the future, and what they lack in experience may be more than compensated for by the fresh ideas that they can bring forward. A number of causes now coming to the fore in politics — for example, environmental concern — were espoused by young people long before they gained political respectability.
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At local level, we believe that there should be a right of youth representation on a number of local committees, including health councils, school and college boards and local education authority committees. There is a precedent in the case of the churches for the inclusion of representation on local education authorities. It seems reasonable, therefore, to extend the principle to the consumers of the system.
We believe that there should be an input into the local Manpower Services Commission committees from young people on youth training schemes. Those who take part in the schemes could put forward useful proposals for their improvement. We also believe that there should be greater youth representation on the local police authority. That view is in line with the recommendation of Lord Scarman in his report on the Brixton riots. This is yet another example of how involvement, and the responsibility that goes with it, can break down the barriers of hostility and alienation which are often found in relations between young people and the police.
We also recommend democratically elected local youth councils. They would be a forum in which young people could express their anxieties to statutory bodies in their areas. The worries of young people in decaying inner cities are very different from those of young people in rural communities, and it is important that someone should represent and communicate the views of young people.
With regard to development, a young person must be able to develop his personality. He can do that inadequately if he is unemployed, insufficiently trained or educated, or poorly housed. We should establish as a right the opportunity for all teenagers between the ages of 16 and 19 to have a real choice between continuing in full-time education, taking a place on a much improved training scheme and finding employment. I admit that that would require resources, but it is not an especially new or radical suggestion. In International Youth Year, we should be prepared to look to the examples set by France and West Germany in the training and education of young people.
When young people want to take the initiative and create their own employment through co-operatives or self-employment, for example, statutory bodies such as the Council for Small Industries in Rural Areas, the Welsh Development Agency and the Highlands and Islands Development Board should have a remit to provide financial assistance and, more importantly, legal, managerial and marketing advice and expertise.
I am aware that some young people fail to develop their personalities through disadvantage, especially because of race or disability. The charter proposes a youth service which is managed substantially by young people to cater for the needs of such groups.
Development will not be confined to the individual—the wider community would benefit from the greater involvement of young people. A recent opinion poll, which was published in The Times, showed that 78 per cent. of 15 to 24-year-olds support a scheme for all young people to do voluntary community service on leaving school. Some voluntary schemes already exist. With the minimum of bureaucracy, we should like local bodies to be set up to ensure proper co-ordination between community and voluntary efforts.
The measures that I have outlined are by no means exhaustive. The third theme which ties them all together is peace.
Mr. Dennis Skinner: What about young miners?
Mr. Speaker: Order.
Mr. Wallace: It is regrettable that we cannot legislate to create peace. However, we can establish a framework and an environment which fosters and promotes peace. A youth charter would try to do just that. It would try to ensure peace of mind for a person who might be frustrated by inadequate employment, unemployment or because his academic aspirations have been thwarted. It would promote peace in communities by encouraging participation and trying to break down barriers. When the House debates the great issues of world peace we should remember that few have a greater interest in it than the youth of today.
In commending the Bill, I ask the House to support measures that will promote the cause of youth, and allow the voice of youth to be heard. Perhaps more importantly, I ask the House and politicians of the older and not so old generations to listen to the voice of youth and pay heed to their anxieties and ideals in International Youth Year.
Question put and agreed to.
Bill ordered to be brought in by Mr. James Wallace, Mr. David Alton, Mr. Simon Hughes, Mr. Alex Carlile, Mr. Malcolm Bruce and Mr. A. J. Beith.

YOUTH CHARTER
Mr. James Wallace accordingly presented a Bill to promote opportunities for young people in International Youth Year 1985 by establishing a youth charter giving rights and representations to young people; and for connected purposes: And the same was read the First time; and ordered to be read a Second time upon Friday 19 April and to be printed. [Bill 55.]
Orders of the Day

  Shipbuilding Bill
  Order for Second Reading read.
  3.53 pm
  The Minister of State, Department of Trade and Industry (Mr. Norman Lamont): I beg to move, That the Bill be now read a Second time.
  This is a short and essentially technical measure. Its purpose is twofold. First, it extends the life of the Great Britain and Northern Ireland shipbuilding redundancy payments scheme by 18 months and, secondly, it formally writes off certain irrecoverable outstanding loans made by the Shipbuilding Industry Board to Upper Clyde Shipbuilders in the period 1968–72.
  The shipbuilding redundancy payments scheme was first introduced in 1978, shortly after the nationalization of shipbuilding. In introducing the Bill on Second Reading, the right hon. Member for Manchester, Gorton (Mr. Kaufman) described it primarily as a scheme
  "to alleviate the human problems caused by any contraction of the industry".
  He went on to acknowledge that
  "shipbuilding industries all over the world are facing the inevitability of contraction"
  and that
  "this country cannot isolate itself from that trend".—[Official Report, 16 January 1978; Vol. 942, c. 173–5.]
  Those were wise words, of which from time to time we have had cause to remind him. He also emphasised the original limitation of the life of the scheme. At that time it was limited to two years. That was the period that the right hon. Gentleman then thought would take us past the then approaching slump in shipbuilding. In that regard he was perhaps less prophetic.
  I recall the occasion well because I was the Opposition spokesman who had the task of welcoming the Bill. I did so, though with a slightly different emphasis. I saw it not just as a measure to alleviate the inevitable misery of redundancy but as a tool to help smooth the path of transition to competitive manning in the industry and to help people thus made redundant to move to the industries of the future. I still hold that view. No one would dispute that the scheme has contributed significantly over the years both to the alleviation of the problems of redundancy in a contracting industry and to progress in relation to the problems of contraction itself. It has proved a valuable tool in the management of change within shipbuilding and has helped in an extremely difficult period.
  That is why in 1982 we introduced an order prolonging the life of the scheme until June this year. It was clear then that further contraction was likely. It would have been wrong to have allowed it to have lapsed during such a period of uncertainty, and prolongation seemed the sensible course. As events have shown, with the continued rapid decline in the fortunes of the industry and the consequent reduction in the work force, that was the right decision.
  British Shipbuilders has taken advantage of the scheme to a considerable extent. About 35,000 workers in British Shipbuilders have benefited under the scheme at a total cost of £130 million since it began. Today, some 7,000 people are in receipt of the weekly payments. We are now

  791
  approaching the end of that extension, and the Government have had to decide whether to ask the House to extend the scheme once again. We took the decision to bring forward the measure before the House in the light of the industry's present position.
  Merchant shipbuilding continues to face an enormously difficult market. Apart from the upturn of 1979–80, it has, for the whole period of nationalisation, fought an uphill struggle in a deep recession against highly competitive far eastern producers. The inevitable contraction, seen and accepted by the Opposition in 1977, has happened. The merchant shipbuilding sector of British Shipbuilders has halved and is now about 11,000 men, including engine building.
  Mr. Eric S. Heffer: The hon. Gentlemen refers constantly to the statement by my right hon. Friend the Member for Manchester, Gorton (Mr. Kaufman). Then we had a Labour Government who were working for an upturn in the economy. Since then we have had a Conservative Government who have allowed the shipbuilding and other industries to decline to the extent that there is now a continuing crisis. Is not that the basic reason why we are again facing this problem?
  Mr. Lamont: The hon. Gentleman is quite wrong. Shipbuilding deals in an international market, and now, as then, there has been a substantial contraction internationally. As the hon. Gentleman knows, shipbuilding contracted at that time, and the words of the right hon. Member for Gorton which I have quoted showed that he envisaged that there would be some contraction. I do not blame the right hon. Gentleman for not foreseeing that the period of recession in international shipping would last very much longer than the period thought likely to be the case in 1979.
  In the past 12 months, alongside the retrenchment, we have also seen within British Shipbuilders some encouraging signs of improving performance. British Shipbuilders is beginning to see marked improvements in throughput per man, even at a time of low work load. That is the period when productivity gains are the hardest to make.
  Nineteen eighty-four will be remembered in British Shipbuilders as the year in which common sense prevailed, when a vital agreement on flexible working practices was signed and when the Cammell Laird work force voted with its feet to defy the militants. I hope that 1985 will prove to be the year when the benefits of a positive approach by management and work force show through in vitally needed new orders.
  We must be under no illusions. British Shipbuilders still has a long way to go to achieve real stability and a firm future. It would be foolish to ignore the genuine risk that the market will force yet further rationalisation on the corporation. We must all recognise that, even to maintain its market share, it must become more competitive, which in turn means fewer people building the same number of ships.
  Meanwhile, the Government intend to push ahead with the policies of privatisation stated by my right hon. Friend the Secretary of State for Trade and Industry in July 1984. We shall seek to return as much as possible of the industry to the private sector. More immediately, we intend to sell the warship yards by March 1986. Taken with the privatisation of ship repair yards and the disposal last year
  792
  of Scott Lithgow, this means that by the end of 1986 the public sector will account for less than one-third of the United Kingdom's shipbuilding industry and will employ only 17,000 to 18,000 people — 11,000 of them in British Shipbuilders—even if no further redundancies take place either in British Shipbuilders or in Harland and Wolff.
  Dr. Norman A. Godman: Does the measure affect those formerly employed in the yards of British Shipbuilders who are now working for private companies?
  Mr. Lamont: It does not affect them, because yards that have been privatised do not benefit from the scheme. A person who is already in receipt of benefits under the scheme will not be affected by the Bill. The hon. Gentleman can rest assured about that.
  Mr. Frank Field: I wish to take the question a stage further. The Government intend to privatise some yards. What would be the fate of workers in yards which are now publicly owned and which become privately owned who may be made redundant? Would they qualify under the scheme?
  Mr. Lamont: I shall obviously outline that in my speech.
  The background to our decision about whether to extend the shipbuilding redundancy payments scheme is thus one of the continuing risk of further rationalisation in merchant shipbuilding coupled with a huge reduction in the size of the state sector that will result from the transfer back of certain yards to the private sector.
  In our view, it would be wrong in those circumstances to let the scheme lapse now. Since the last prolongation it has served well as a means of alleviating the distress of those made redundant and of enabling the corporation to achieve the inevitable contraction both smoothly and efficiently.
  While there remains a need for further rationalisation and a real risk of further contraction of merchant shipbuilding, and while the complex and difficult process of privatising the warship yards is under way, it would be inequitable and inappropriate to remove the scheme. However, we do not propose prolongation because we, British Shipbuilders or Harland and Wolff have plans for further major redundancies in merchant shipbuilding. There are no such plans. But we cannot ignore the risk that further rationalisation will be necessary. It is against that contingency that we are proposing this extension today.
  Nor do we expect preparation for privatisation to result in any further retrenchment in the warship yards. The recent job losses at Swan Hunter and Vospers were the result of a failure by those yards to achieve merchant or export orders—an essential complement to the base load of work for the Royal Navy. The impetus to efficiency that will result from the return to the private sector promises in the longer term to generate jobs rather than to lose them. We believe that the scheme should be prolonged, but at the same time we do not believe that it should be prolonged indefinitely.
  The scheme applies only to the state sector. Like all statutory schemes, it is inevitably more costly to administer than company-based arrangements.
  When the state owned most of the industry and a long period of massive retrenchment lay ahead, statutory

  793
  redundancy payment schemes made practical sense. By the end of 1986 the state will own less than one third of the United Kingdom industry. Moreover, if it is to survive, the remaining merchant shipbuilding sector will by then have had to fight its way back to a competitive position and to have found a level of reasonable stability. The need and justification for the scheme will thus have passed. We have concluded that it should be extended only this one, last, time to the end of 1986. I cannot tell the House what the cost of the scheme will be, because the cost of extending it will depend on the redundancies that take place. As a guide to what might happen and to indicate the "ball park" area, the cost of the scheme in 1983–84, when there were 7,000 redundancies—that is vastly in excess of what is likely to happen in the much smaller state-owned merchant sector—was £34 million. That covered both some payments for that year's redundancies and some payments to people made redundant in previous years.
  Mr. John Smith: It is significant that the Minister said that there would be no redundancy provisions after 1986. Presumably there will still be a British Shipbuilders in operation, building merchant ships, whatever happens to the Government's privatisation proposals. Is not the Minister in effect saying that workers who do not accept redundancy from British Shipbuilders before the end of 1986 will not receive redundancy payments? Is he not therefore placing a threat on them to complete redundancy schemes before the end of 1986?
  Mr. Lamont: Obviously, I am coming to the right hon. and learned Gentleman's point which the hon. Member for Birkenhead (Mr. Field) also raised. I shall deal with what will happen to the yards that are privatised and with what will happen in the remaining state sector after 1986. If the right hon. and learned Gentleman will let me finish my remarks, I shall address both questions.
  The Northern Ireland scheme covering Harland and Wolff has always run parallel to and on the same basis as that for British Shipbuilders. It would, therefore, make sense to maintain it for the same period of 18 months. The Bill does that. There will naturally be anxiety about what will follow the schemes. The management of British Shipbuilders, Harland and Wolff and their work forces must resolve that matter. My right hon. Friend the Secretary of State for Northern Ireland and I propose to ask both organisations, in consultation with their unions, to establish appropriate successor schemes by the early autumn of 1986. It is too early to predict the details of such schemes. They will be negotiated between the management and work force, just as in the private sector. However, at this stage there is no need to worry that the work forces may end up worse off.
  I recognise that there has always been anxiety that it is inequitable for the scheme to be available to the public but not to the private sector. Those with the interests of the present private sector in mind may argue either that the scheme should be extended to the whole industry or should be abolished now. I am quite clear that an extension to the private sector would be the wrong solution. A statutory scheme for the entire shipbuilding industry would be expensive, bureaucratic and wrong in principle. Employees of the warship yards will not be able to claim under this scheme after those yards join the private sector. They may be assimilated into an existing scheme, if one
  794
  is already provided by the new owners, or a new scheme may be established as a result of negotiations between the new owners and the work force at the time of privatisation.
  The reverse argument—that the scheme should go now — has been put forcibly by, among others, the Shipbuilders and Ship-repairers' Independent Association. I ask hon. Members who take that view to accept the Government's judgment that the interests of shipbuilding and of its work force are best served by a limited prolongation through the contribution that it will continue to make in the management of any contraction in the state sector.
  Mr. Ted Garrett: I know that the Government's policy is to keep their hands away from manufacturing industry, but will the Minister intervene to encourage the ' unions and management to reach redundancy agreements similar to those that we are talking about now?
  Mr. Lamont: I can give no such commitment. I shall ask the management of British Shipbuilders to negotiate a scheme. Equally, for the privatised yards, it will be for the unions and managements to negotiate agreements. It would be wrong for the Government to lay down conditions or to say what the benefits of any scheme should be.
  On that basis, I commend this final extension of the scheme to the House as a sensible contribution to our support for the shipbuilding industry.
  Clause 2 writes off the outstanding irrecoverable loans made between 1968 and 1972 by the Shipbuilding Industry Board to Upper Clyde Shipbuilders Ltd.—a company now in liquidation — and reduces the assets of the National Loans Fund accordingly. In the "Accounts relating to issues from the National Loan Funds" for 1982–83, published on 12 December 1983 and presented to Parliament, it was stated that parliamentary approval to write off those loans would be sought in the financial year 1983–84. No suitable opportunity arose in that year. This Bill is the first suitable vehicle affording such an opportunity. That is all that I need to say about clause 2.
  I commend the Bill to the House.
  4.12 pm
  Mr. John Smith: The Minister presented the Bill as a small technical operation designed simply to extend the redundancy payments scheme for a further 18 months beyond the period already sanctioned by Parliament. However, towards the end of his speech, as he explained the implications of the Bill, it became clear to me and to my right hon. and hon. Friends that something much more important was afoot. The Minister said that the Government had no intention of prolonging the redundancy payments scheme beyond the end of 1986 and that they do not propose to have similar schemes for the yards that are privatised as a result of the Government's privatisation policy.
  The Minister would think us naive if we did not immediately ask him some searching questions on the implications of the Government's decision not to continue the scheme beyond 1986 and not to seek similar schemes in the private sector. What will happen to workers, as we near the end of 1986, who fear that they might become redundant in 1987? The Minister says to those workers, "You need not worry. You will be no worse off because

  795
  I hope that a scheme will have been negotiated between British Shipbuilders and its work force that will give you redundancy protection." If the scheme has to be negotiated, how can the Minister say that the workers will be no worse off? The negotiated scheme could be considerably worse than the present scheme, in which case the workers would be worse off.
  The Minister cannot say that the workers will be no worse off unless he gives us a guarantee today that he will insist that any negotiated redundancy payment scheme is no worse than the scheme currently available. He signally failed to do that. I hope that before the end of the debate the Minister or the Parliamentary Under-Secretary of State will make the Government's position clear. For the purposes of our debate at present, it seems clear that the Government will not insist on similar schemes and that the Minister's statement that the workers will be no worse off is meaningless and has no validity.
  The second crucial aspect is that workers in the private sector, and workers in enterprises that will be sold over their heads to the private sector, will have worse redundancy protection than will the workers who remain in British Shipbuilders. That is undeniable. That factor will affect the thinking of the workers in the industry as they see their conditions of work worsening materially as a result of the Government's privatisation policy.
  Another and perhaps more sinister aspect arises from that. What will be the view of workers who are considering their futures in the period before privatisation? Might they be tempted to say, "It would be wise to apply for redundancy before the yard is privatised so that I can have the rights under the existing scheme. If I do not apply for redundancy before privatisation, I will lose my rights after the yard is privatised." An elderly worker who has spent all his working life in the shipbuilding industry—as is not untypical in most shipyards—will be tempted to apply for redundancy which he might not want and which it might not be in the interests of the company to give him. However, the temptation will be such that he will take redundancy to ensure that he receives as much compensation as is available at present, bearing in mind the possibility that he might get no compensation after privatisation.
  Is that not a way of reducing the work force immediately before privatisation, with the bill for redundancy being paid by the taxpayer so that the new private owner takes over a much smaller work force and has no obligation to pay the social costs of the changes in the industry? An extremely devious proposal is being put forward under the apparently innocent and generous terms of the Bill.
  I am surprised that the Minister has not interrupted me while I have been making those allegations to say that I am wrong. I suspect that I am right about those facts, and the Minister is silent because my allegations are true. That will cause anxiety throughout the shipbuilding industry for those who will remain in the public sector and even more so for those who will be affected by the Government's privatisation proposals. It is a new twist to the saga of privatisation that was not revealed until the Minister made those remarks towards the end of his speech introducing this apparently innocent Bill. No doubt those features of the proposals will command most of our attention during the debate, and I am sure that my hon. Friends will wish to ask some searching questions.
  Mr. Norman Lamont: It is not true to say that this is an entirely new development. When parts of British Shipbuilders were privatized — this is what happened with Tyne Shiprepair Group Ltd. and Scott Lithgow—workers lost their entitlement under the shipbuilding redundancy payments scheme. Compensation for that was the subject of negotiation. The state scheme applies to the state sector. It would be inappropriate for smaller state sector, employing 11,000 people in British Shipbuilders, to have the full panoply of the state scheme. That is simple common sense.
  Mr. Smith: The Minister has put none of my fears at rest. I am not sure what happened with the other privatised yards, but my hon. Friends assure me that it was not quite as the Minister described it. Compensation was given to those workers in respect of the loss of their prospective redundancy payments. I do not know whether that is proposed in the case of the privatised yards. Is the Minister saying that at Yarrows, which appears to be the first candidate for privatisation, compensation will he paid to the workers for the loss of prospective redundancy payment rights under the present scheme? If not, why not?
  If the Minister rests his case by saying that he is doing nothing different from what happened with the privatisation of the Scott Lithgow yard and compensation was given to those workers, why does he not offer compensation to the workers at Yarrows, who will lose the right to participate in the present scheme? The answer is that he will not do that. Those workers will lose out. The parallel drawn by the Minister is extremely inept. He has chosen a boomerang as a weapon.
  Mr. Don Dixon: Is it not true that the workers in Tyne Shiprepairers were each given £2,100 as a lump sum payment to come out of the shipbuilding redundancy scheme? What the Minister says is not true. It is misleading the House to say that this has happened previously, because the workers in Tyne Shiprepairers were bought out of the redundancy scheme.
  Mr. Smith: I am grateful to my hon. Friend, whose deep knowledge of the shipbuilding industry is yet again of great value to the House. That is a very good example of how the Minister was seeking to lay a false trail across our path with his reference to previous privatisation exercises.
  As a result of what my hon. Friend said, it is an odd state of affairs that some people were compensated for their loss of rights when they left British Shipbuilders, but that those who stay in British Shipbuilders after 1986 will lose rights in respect of which they will get no compensation. Their reward for staying in the state corporation is that they will lose rights. The Government's approach is thoroughly unsatisfactory and will cause a great deal of fear and worry throughout the shipbuilding communities.
  At the end of the day, it worries me most of all that it will be said to workers in yards which are to be privatised that they ought to leave soon so that they will get the benefit of redundancy pay, and that will obviously be of advantage to the incoming privatiser, because he will take over a much smaller work force, with no social obligations. Once again the taxpayer will have to foot the bill for social change, while the very large profits likely

  797
  to be made in the warship yards will go to private sector employers who will take them over, perhaps at knockdown prices, with almost no social responsibilities.
  This is a much more significant Bill as a result of what the Minister said in his closing remarks than appeared on a first reading of it. To the extent that the Minister has revealed the Government's devious intentions, I suppose that we ought to be grateful to him because we are now forewarned about what is to happen.
  The reason why we have to discuss redundancies at all is the crisis in the shipbuilding industry. We debated this on 27 November last year, in official Opposition time, when we drew attention to the deepening crisis in the industry. There has been very little improvement since then, and the worry in the industry is growing.
  I had the opportunity just before Christmas to take part in a conference of shipbuilding workers in Newcastle, organised by the General, Municipal, Boilermakers and Allied Trades Union, representing nearly all the workers in the shipbuilding industry in Tyne and Wear. I was left in no doubt about the very substantial worries and fears in the industry amongst the work force, many of whom have given most of their lives to that industry. They are acutely aware of the problem which Sir Robert Atkinson mentioned in a speech only a few months ago, which is that the real worry and fear in the shipbuilding industry, particularly on the merchant shipping side, is that one yard will close after another. The more that one listens to the Government's plans, the more it becomes clear that they are unconcerned about whether one yard closes after another.
  The fact that the former chairman, Sir Robert Atkinson, speaks in those terms is extremely interesting. He can hardly be accused of being a Labour sympathiser. He has described himself as a great admirer of the Prime Minister, but he said that it broke his heart to see what had been done to the shipbuilding industry in recent years. We know that the crisis has deepened significantly over the last two or three years, and not just as a result of the decline in orders internationally.
  The Minister will be acutely aware of perhaps the most significant comment by Sir Robert Atkinson. He said that during his period in charge of British Shipbuilders he was never asked by Ministers about research and development and about the future of the industry. He added:
  "But if I talked about closures or redundancies, their eyes shone."
  That is the former chairman of British Shipbuilders talking about the Government's attitude to the vitally important shipbuilding industry, and I repeat it because it is worth listening to again:
  "But if I talked about closures or redundancies, their eyes shone."
  Presumably the Minister of State was one of those whose eyes shone on these occasions.
  Sir Robert went on to describe the Government's privatisation policy as "political dogma." He said:
  "The Government wants rid of British Shipbuilders."
  Given that context of Government policy, it is no surprise that we have had more redundancies recently, and it looks as though there may be more in train. What the Minister said today about the redundancy terms of the Bill makes us worry that, either by inducement or by fear, there will be the acceleration of a large number or redundancies in the yards which are about to be privatised.
  798
  I hope that the Government will think carefully about the terms of the Bill. I hope that they will think carefully about the foolish decision not to extend the redundancy scheme beyond 1986. They ought to think carefully about having a fair relationship between those in the privatised sector and those remaining in the public sector so that, as far as can be achieved, justice is done, and on the same basis, to everyone who works in the shipbuilding industry.
  Even more important than that, there must be a real effort to try to save the shipbuilding industry. It is not just an ordinary industry to be looked at from the point of view that some industries rise and other industries fall and that we have to accept that almost as we accept the fates. The shipbuilding industry is extremely important to the United Kingdom because of its close connection with the shipping industry, which itself is a crucial industry, for vital reasons of trade and defence.
  No maritime nation such as Britain can be without a proper shipping industry. As was made clear in a recent debate, we know the worry and concern in all parts of the House about the decline of our shipping industry, which is running down at the rate of about two ships a week. From having one of the largest merchant shipping fleets in the world, Britain is rapidly slipping down the league table to the point where it will probably be impossible for us again to mount a merchant shipping back-up for a military expedition such as the Falklands.
  It is also crucial for a country which depends on trade for so much of its national wealth to have an adequate shipping facility, because for the foreseeable future most of our trade will be carried by sea.
  It is therefore crucial to have a shipbuilding industry to back up that shipping industry. I recommend to the Government once again the idea of a national maritime strategy, which has been urged not just from the Opposition Benches but from all parts of the House, whereby the Government decide that there must be a real incentive to maintain a British shipping industry and that in turn there must be real incentives not only for ships to be ordered but for ships to be built in British shipyards.
  The Japanese shipbuilding industry was rescued by a large order by the Sanko shipping company of Japan. Despite the fact that a one third price discount is available to Japanese shippers if they buy their ships from Korean yards, not one Japanese shipping company has put an order outwith Japan. I wish that we could say the same about the British shipping industry.
  Whatever the attitudes of British shippers, they should be given the maximum incentive, and the disincentives introduced in the 1984 Budget by the Chancellor of the Exchequer are having a bad effect. I hope that in 1985 the Chancellor will rethink his position so that we start having fiscal as well as other policies which will support a national maritime strategy.
  I hope, too, that the Government will end this folly of privatisation. We saw another evil aspect of privatisation revealed in the Minister's speech. Let me remind the House about what is proposed. The most profitable section of British Shipbuilders, the part of the industry which is almost the pensioner of the Government because it fulfills only Government orders and operates generally on a cost-plus basis — that jewel in the crown from the profitability point of view—is to be sold off to the private sector, apparently with as few obligations attached to it as possible. The rest of British Shipbuilders has to survive as it may without the help of any cost subsidy from

  799
  the profitable section. We shall be left with beleaguered merchant shipping yards open to the fierce winds of competition, and they may very well close one after another. We shall be left with a warship building capability dependent on Ministry of Defence orders and a merchant shipbuilding industry which may have almost vanished. In those circumstances, to hand over those assets and to allow the others to wither, or for there to be an obligation for the others to be picked up by the state, is nothing short of ludicrous folly.
  The extension of the period of tender seems to have resulted in industrial bloodhounds sniffing around those yards which are to be privatised, looking for some easy pickings. We know from experience that some British companies are adept at seeing what can be got from declining industries at the cheapest possible price. They then start new and profitable businesses out of investment which was made previously by the public sector in businesses which are available to them at knockdown prices. I hope that the Government will take great care to avoid that. I am told that there are already considerable fears among, for example, the work force at Yarrows over the number of bidders that there may be for that yard. Yarrows and Hall Russell appear to be the first in the privatisation stakes.
  Finally, let me make a special plea to the Government to deal with the consequences of redundancies in the shipbuilding areas in a more imaginative way than simply by continuing, even for a limited period, the redundancy payments scheme. In many industries the Government are under the illusion that it is sufficient to compensate people for the loss of their individual jobs. They fail to understand that, although the individual may be compensated for his redundancy, the job is lost for ever to the community. It is not enough in the mining industry, the shipbuilding industry, the steel industry or any of our heavy industries where redundancies have occurred to think that the book can be closed from a social point of view when a certain amount of money has been paid to a person who has been made redundant. The community in which that person lives and his descendants will have lost the opportunity of employment.
  In part of the constituency of my hon. Friend the Member for Newcastle upon Tyne, East (Mr. Brown), about 49 per cent. of those on the unemployed register are skilled workers. That must be a unique situation in the United Kingdom. We know the loss that that community has suffered. Will the Government consider giving special help to those areas affected by the rundown of the shipbuilding industry? I am sure that the situation that I have described in Newcastle can be found in other areas where there has been a heavy concentration of shipbuilding.
  It is folly at this time to devalue the regional policy instruments which were previously available to such areas. Under regional policy changes there has been the abolition of the special development area incentives. When one cuts through all the waffle of the Government's statement, that is the most important change, apart from the cutback in the amount of money committed to regional development.
  I hope that in the near future we shall have an opportunity to debate these matters at great length. I merely say now that of all the times to take such steps in areas affected by the rundown of shipbuilding, this seems to be the most stupid. Therefore, I ask the Government to consider providing some special help for those areas. This
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  has been achieved in other industries; for example, by British Steel Corporation industries, and such provisions have been talked about for the coal mining industry. I do not know whether it will be suitable to give such help under the aegis of British Shipbuilders, or whether it should be given by some other Government task force mechanism, but I hope that the Government will give serious consideration to a special regime which can be introduced into those shipbuilding areas which have experienced redundancies so that communities, as well as individuals, receive some assistance. It is not good enough to look at the matter in terms of individuals. We must think of the individuals who have yet to come and others dependent on the industries in the community.
  The rundown in some parts of the shipbuilding industry in Britain has been savage and severe. It has been as savage and severe as anything that has been suffered in any other part of the country by any other industry. Other areas and industries have received special help and I can see no good reason why the shipbuilding areas should not do so as well. Instead of bringing the shipbuilding redundancy payments scheme to an end in 1986, I hope that the Government will think more seriously about much more imaginative measures, such as those that I have suggested.
  We cannot accept the Minister's speech today with complacency or with a feeling of satisfaction. He has raised many serious fears and he will have to come to the Dispatch Box a few more times before those fears are finally relieved.
  4.34 pm
  Sir David Price: I wish to intervene briefly on a modest and useful little Bill. The right hon. and learned Member for Monklands, East (Mr. Smith) went wide, as he is entitled to do on Second Reading, and I am tempted to follow him further. However, I have spoken in previous debates on shipping and shipbuilding and I shall not, immediately after Christmas in our first debate of the new year, break a rule that I have set myself to be extremely modest in my contributions in the House. I know that one can tax the patience of one's colleagues beyond endurance, so I shall be brief.
  My hon. Friend the Minister did not go far enough in his comments on clause 1. What is his timetable for the privatisation of the warship builders? I declare a constituency interest because I have one such yard in my constituency. I have received a clear message, from both the management and the work force—if the yard is to be privatised, for heaven's sake get on with it. I think that both sides of the House will agree that the worst position is to be in a state of limbo, both from the point of view of a yard's customers and the obtaining of orders, and also from the point of view of morale within a yard. Therefore, if our local yard of Vosper Thornycroft is to he sold, as I gather it is, for heaven's sake get on with it and tell us when it is to be sold and on what terms. I know that the Labour party disagrees with the Government's policy, but, given that it is the policy, I think that even the right hon. and learned Member for Monklands, East will agree that there is a great advantage in speed in the despatch of such matters.
  I know that the right hon. and learned Gentleman, coming from the part of the country that he does, has an interest in Yarrows, as a lead warship yard. He will agree that the degree to which compensation to redundant workers will be necessary in the warship yards depends on

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  the extent to which the Ministry of Defence places orders. I and the hon. Member for Birkenhead (Mr. Field) have time and again raised in the House the question of the type 22 frigates. That is not even a Treasury matter. The Ministry of Defence does not have to extract money from the Treasury. It has been in all the estimates. But when will orders be placed for the two type 22 frigates for which the hon. Member for Birkenhead and myself are waiting? The delay has gone on for 15 months.
  That raises the wider issue. Can we not get out of the Ministry of Defence an agreement that there should be a programme of future naval ordering that is generally known within the industry? It does not mean that it need commit itself on every order to a particular yard because it can be argued that if such a commitment were made years ahead a yard would go soft, and so on. One knows the arguments. But, given the five-year programming of Government investment — we have an annual White Paper on that—I see no reason why there cannot be a five-year programme for naval ordering by the Ministry of Defence.
  That does not seem to raise any ideological issues; it just means prudent forward thinking. The House will notice that I forbear to use the word "planning". It may be unacceptable to some of my right hon. Friends. I simply use the words "forward thinking". I see no reason why that cannot be done. All the evidence from such relations as I have with the armed services is that that would be acceptable to the Ministry of Defence at the operating level. That again would assist us on the issue of the labour force within the remaining warship building yards. I offer it as a positive proposition upon which I see no reason why there should be any disagreement in the House.
  My hon. Friend the Parliamentary Under-Secretary of State who will reply to the debate is a supplicant in this, because, of course, the Ministry of Defence is the relevant ordering Department. Indeed, I notice that no one from that Department is present. But why cannot the Ministry of Defence have an even naval ordering programme? Some years ago a White Paper—I cannot remember which—agreed with that theory. However, in practice there is no such even ordering. We always hear that great phrase "the lessons of the Falklands". Those lessons were to be written into every new naval order, but in practice they have led to few orders.
  The Ministry of Defence is very complex, and perhaps those involved are unable to agree among themselves, but I cannot see why we cannot have a proper annual ordering programme. We should all tell the Ministry that we must have an annual ordering programme that is given at least three years ahead, and preferably five years ahead. I am sorry that the right hon. and learned Member for Monklands, East is no longer in the Chamber, as he suggested that there were easy profits to be made by the warship yards out of the Ministry of Defence. If that is so, that is a problem for the Ministry. But the difficulty of the warship yards is that they have a near-monopoly buyer—the Ministry of Defence.
  It is often said that the way out for warship yards is export orders, but most of us with any experience of defence ordering know that it is very difficult to sell defence equipment abroad—whether for navy, air force or army — unless our own forces are buying it. Therefore, unless a naval warship builder obtains an order,
  802
  particularly a first-of-type order from the Ministry, it will find it very difficult to persuade any foreign buyer, however admirable the proposition may be on paper, to place an order in practice.
  The Ministry of Defence may tell a yard, "I am sorry that we are taking so long to make up our minds, but I hope that you will understand our difficulties. You go off and find an export order." But that is not good enough, because the yard will not obtain an export order if it is known that the Ministry is not placing an order. That point must be generally accepted, and relates to clause 1 and the number of redundancies likely on the warship building side.
  I have spoken in the House before about the Merchant Navy, and, as the House knows, I am not in entire agreement with the Government. I have some sympathy for what the right hon. and learned Member for Monklands, East said about a more general maritime policy. A maritime policy as such almost sounds too particular, and slightly pompous, to some of us. However, we must look across the board and consider the effect of one decision upon another in different Departments and sectors of the economy. To that extent, I am of course in favour of a maritime policy, but I would not put it quite as grandly as the right hon. and learned Gentleman did. But that is why I sit below rather than above the Gangway.
  Dr. Godman: Given what the hon. Gentleman has just said about the need for the enactment of a maritime policy, has not the time come for setting up a Royal Commission to examine the shipbuilding, shipping and maritime service industries?
  Sir David Price: I have great sympathy with the motive behind the hon. Gentleman's intervention, but I prefer the House to Royal Commissions. It is an old-fashioned prejudice of mine. I have been here for 30 years and still think that the House is a better instrument than a Royal Commission. But then, I am very old-fashioned in these matters and I do not think that we can duck problems by passing them to Royal Commissions. We should deal with them here in the House. We are perfectly capable of doing so. Incidentally, I am a great supporter of Select Committees. In the last Parliament, I won third place in the ballot for private Member's Bills and tried to implement a proposal of a Select Committee, of which I was not a member, on the flexibility of pensions.
  I believe that we should make the House of Commons work. We run ourselves down, but I believe that we are capable of doing much more and of having much more influence on Government than at present. Thus, although I am sympathetic to the hon. Gentleman's question, he should talk about not Royal Commissions but the House.
  I may disagree with the right hon. and learned Member for Monklands, East because I believe that the shipbuilding industry is one of our old industries and that it is on the way down. I do not think that it will be eliminated, but the question is at what point it bottoms out and begins to take off again. For those involved, there are three priorities. First, I should like to see earlier retirement. That was the object of a Bill that I tried to promote during the last Session. Unless the state old-age pension is made more flexible, it will be harder for industrial redundancy schemes to accommodate earlier retirement. The basis of the approach to pensions on the part of Governments of both parties has been that retirement income has two elements: the state old-age

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  pension and the occupational pension. Men suffer particularly because they do not receive their old-age pensions until they are 65, whereas women do so at 60. The lack of equality between the sexes is offensive. There is a strong case for earlier retirement in the old heavy industries, but we must get the retirement terms right. Given the conditions in which people used to work and sometimes still do work in the shipbuilding industry, it is only right to draw attention to that point.
  Secondly, there is a case for job sharing between older workers. We have not begun to put our minds to that whole new area. But one social reaction to the second industrial revolution must be a degree of job sharing. Thirdly, I always believe in generous redundancy terms. In the long run, that is not only socially right but cheap at the price.
  I noticed that the right hon. and learned Member for Monklands, East paid little attention to a point relating to clause 2. In 1967 there was a debate about putting public money into Upper Clyde Shipbuilders. I was then sitting where the right hon. and learned Gentleman now sits, on the Opposition Front Bench, and I remember that the right hon. Member for Chesterfield (Mr. Benn), who was then Minister of Technology, had shipbuilding within his brief. At the time, I criticised the choice of Upper Clyde Shipbuilders, but not the principle. It was not wrong at that time to put public money into British shipbuilding and, indeed, into Scottish shipbuilding, but the choice of the upper rather than the lower Clyde was wrong. We should have gone for the lower Clyde and for building a brand new closed yard, under cover, so that the workers were not exposed to the weather. It could have been built on the lines of the Swedish and Japanese yards, but that did not happen. The lesson to be drawn from the demise of Upper Clyde Shipbuilders is not that in principle it is always wrong to put public money into industry, but that the recipient of that investment should be chosen very carefully and in relation not to industrial history but to one's judgment about future trends in technology and markets.
  The right hon. and learned Member for Monklands, East spoke about the desirability of cross-subsidisation between merchant and warship yards. That is a highly questionable proposition. Accountancy as between one yard and another in a large organisation or in any great industrial empire is not that precise. There is also a clear distinction between the two types of yard. It could well prejudice naval ordering and the future of the naval yards if they were to cross-subsidise the merchant yards.
  The right hon. and learned Gentleman spoke about the loss of jobs and was concerned not only that those who lost their jobs should be compensated but that the areas in which they lived should be compensated, too. In principle, we can all see the social consequences of the closure of a yard. As the House knows, at one time I was the Minister who had to deal with regional development. In principle, of course, one cared passionately about the strategy, although how far any of us got the tactics right is questionable.
  I offer the House this thought. In the old Board of Trade, where I was dealing with these matters, we were running a tight control on industrial development and had incentives to attract industry to favoured areas. It is arguable whether we achieved much. What came out clearly was that investment in transportation and in the
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  public infrastructure was a great deal more important than trying to put pressure on individual firms to go or not to go where we in Government wanted.
  My answer to the right hon. and learned Gentleman is that I accept strategically the point he has made but I do not believe that it is most effectively achieved tactically by direct Government intervention in individual firms. To put our money and the public's money into the investment infrastructure is better than to put it into specific projects. I leave that thought with the House.
  4.51 pm
  Mr. Bruce Millan: The hon. Member for Eastleigh (Sir D. Price) always makes an interesting and thoughtful contribution to our shipbuilding debates and his speeches are always made out of genuine concern for the shipbuilding industry, a concern which is not, unfortunately, shared on the Government side of the House. I agree with some things that he said, particularly about the naval ordering programme, but on other matters I disagree with him. As I am a Member representing one of the shipyards on the upper Clyde, the hon. Gentleman would not expect me to agree with what he said about the upper Clyde. I do not wish to debate some of the points he made; rather I should like to deal with the Bill.
  As my right hon. and learned Friend the Member for Monklands, East (Mr. Smith) said, redundancy is not a cause for rejoicing even when there are generous redundancy payments. There is a tendency on the part of the Government to consider it a great victory when, as they would say, workers are queueing up for redundancy in a shipyard or a factory. I consider that a defeat not only for the shipyard or the factory and the locality but for the whole of manufacturing industry. Therefore, it is not a sufficient response to the problems of the shipbuilding industry to provide for adequate or even generous redundancy terms.
  If there is to be redundancy—unfortunately, we have suffered a good deal of redundancy in the shipbuilding industry in the past year — it is important that the redundancy arrangements should be adequate and, indeed, generous. I do not believe that the statutory scheme for shipbuilding is generous compared with other schemes such as that for the steel industry and that now proposed for coal mining.
  It is disturbing that even the statutory scheme for the shipbuilding industry is to be ended on 31 December 1986. There was absolutely no warning of this. The Bill was published only on 3 January during the Christmas recess. When we left for the recess we had no idea of what was in the Bill. The press notice put out with the Bill on 3 January gave us no information about the Bill and did not explain its implications which only became clear in some of the explanations that we had from the Minister of State this afternoon.
  Like my hon. Friends, I am opposed to the ending of the scheme in December 1986. The Minister said that we should not worry because he was confident that before that date British Shipbuilders would be able to negotiate at least as favourable terms with the trade unions for the part of the industry that stays under British Shipbuilders; that is my understanding of the Minister's speech. If the terms for the remaining part of British Shipbuilders turn out to be at least as good as the present terms — the trade unions will accept nothing less—there is no purpose in stopping the scheme at the end of 1986 because the cost

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  to British Shipbuilders and, therefore, ultimately to the Government, the owner of British Shipbuilders, will be the same.
  If the scheme is to continue in a non-statutory form for the remaining part of British Shipbuilders, there is no purpose in ending the statutory scheme. It would be much more sensible and would not cause the anxiety that undoubtedly the Minister's statement today will cause among the workers in the industry at the decision to end the scheme in December 1986.
  An interesting question arises as to what happens to the bits of the industry that will be privatised. What the Minister said about that this afternoon is not accurate, as was pointed out in an intervention about Tyne Shiprepair. At the time of the privatisation of Tyne Shiprepair compensation was offered to the workers for the loss of their redundancy arrangements.
  Mr. Norman Lamont: Compensation was negotiated as part of the sole arrangement. Compensation could be negotiated when the warship yards are privatised. Company schemes could be negotiated. Obviously, a state statutory scheme by definition does not extend to the private sector. When Scott Lithgow and Tyne Shiprepair were privatised, the entitlement to the statutory benefit was lost. Compensation was paid, not as a right but as a result of negotiation. I assure the right hon. Gentleman that the position is analogous between the privatisation of warship yards in the future and the privatisations that have happened in the past. There is the possibility of negotiated compensation if there is no scheme.
  Mr. Millan: I shall come in a moment to the further privatisation proposals about which I want information that we have not yet had from the Minister or any other source.
  First, in regard to Scott Lithgow, my hon. Friend the Member for Greenock and Port Glasgow (Dr. Godman) may want to say more about that as the constituency Member if he is fortunate enough to catch your eye, Mr. Deputy Speaker. In a written answer on 19 December, the Under-Secretary of State for Trade and Industry informed me that when Scott Lithgow was sold to Trafalgar House part of the contingent liability taken on by British Shipbuilders and, therefore, taken on by the Government, because they are the paymaster, was
  "benefits, equivalent to the shipbuilding redundancy payments scheme, to a maximum of 1,600 workers who might be made redundant within a year of the sale." — [Official Report, 19 December 1984; Vol. 70, c. 252.]
  In other words, the workers in Scott Lithgow were protected. Incidentally, they did not negotiate that. There was no trade union negotiation with Trafalgar House or anyone else. It was part of the deal that there was protection for a maximum of 1,600 workers under the shipbuilding redundancy payments scheme for at least a year after the sale of Scott Lithgow in March 1983. The cost of redundancies at Scott Lithgow will be borne not by the new owners but by British Shipbuilders and, ultimately, by the Government. Redundancies costing £400,000 have already taken place. The new owners have not taken on responsibility for redundancies. The Government, through British Shipbuilders, have maintained that liability.
  Trafalgar House did not pay for the yard in full. It was sold for much less than the asset value. We should like to
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  know the details of the financial deal. The cost did not fall on the new owners of the yard. The Government and Trafalgar House negotiated the sale through British Shipbuilders.
  Documents which represent offers for sale have already gone out in respect of Yarrow, Hall Russell and other yards which are due for privatisation. The documents have not been made public. Public assets are being sold on the basis of offers for sale which have not been made public. Even hon. Members cannot obtain copies of the offers for sale.
  Mr. Norman Lamont: They are available.
  Mr. Millan: If so, I should like to obtain copies. I hope that the Minister will send me copies of all the offers for all the yards that are to be privatised. I understand that the documents have not been made available publicly. I understand that interested parties hold the documents on the understanding that they will not disclose their contents to any other party, however genuine, including workers in the yards. Assets are to be sold and the workers are not to be told the contents of the offer for sale documents.
  What do the documents say about redundancy obligations under the new ownership? Redundancy obligations will make a difference to the price that a genuine buyer might offer for a yard. Purchasers of the naval yards—we are opposed to the sale of such yards—who want a quiet life must take on an obligation to provide a redundancy payments scheme by agreement with the trade unions. If they do not, they will have a heck of a lot of difficulty with the trade unions.
  The Government have always said that, whatever else happens when an industry is privatised, pension arrangements and conditions will not be adversely affected. Unless the new owners continue a similar redundancy scheme workers' conditions will be adversely affected. The new owners, whoever they are, will be foolish not to take on similar obligations.
  Such obligations will influence the amount of money that a purchaser is likely to offer for a yard. The Government and the taxpayer will, therefore, foot the bill. For the Government to say that negotiations have nothing to do with them is misleading because the money will come from the public purse.
  If privatisation goes ahead, despite our opposition, it must be on terms that are not detrimental to the workers. If the new owners do not accept such obligations workers will want to accept redundancy before privatisation while the present terms are still available. That is not a sensible way to run an industry, whether publicly or privately owned. In too many cases, people have been willing to accept redundancy, leading to the permanent loss of jobs for the community. In areas of high unemployment that is disastrous.
  It is better to avoid redundancy. To do that we need more orders, for the merchant yards in particular. Has there been any progress in the negotiations within the European Community on the intervention fund? I refer to the Minister of State's remarks on 27 November 1984 during our last debate on shipbuilding. In column 838 of Hansard the Minister was full of good intentions. I accept that the Government want the scheme to operate more flexibly. At present, the scheme operates on an ad hoc basis, which is unsatisfactory. I hope that the Minister can say that progress has been made with our Common Market colleagues.

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  The Minister knows Govan Shipbuilders in my constituency because he has visited it. He has acknowledged in the House and elsewhere that it is an excellent yard with a good industrial relations record. The yard has a good productivity level and excellent management/trade union relationships. Co-operation there is positive and the yard's delivery record is excellent.
  Even that yard is runninhg out of work. It is working on the three colliers for the CEGB. The contract has proceeded smoothly and the vessels are being completed. By the middle of this year the yard will run out of steel-associated work. In 1986 work will run down completely. Redundancies are inevitable unless additional orders are obtained.
  The yard has an active and energetic managing director in Mr. Mackie who has been busy trying to obtain orders for the yard. Among the orders in which he is interested is one for five bulk carriers for a Turkish shipping company. The negotiations have received some publicity, which is not always helpful. The negotiations are well ahead, although I am not sure exactly how far they have progressed. The negotiations are important for Govan's future. The orders would be useful for the engine-building facility in the constituency represented by my hon. Friend the Member for Greenock and Port Glasgow (Dr. Godman).
  I do not expect the Minister to go into detail this evening because negotiations are still in progress, but I hope that he will be able to say that he and his Department are fully aware of them and that they stand ready to give every possible assistance to Govan so that it obtains the order. Without it, even that yard with its record will have a troubled time in the next year or so. If that is true of Govan, it is also true of the merchant shipbuilding industry elsewhere in this country. Our general complaint is that the Government have not had the necessary commitment to that industry to enable it to survive in a difficult international situation.
  On first reading, the Bill looked perfectly innocent and even desirable because it was extending the redundancy scheme for 18 months. Not untypically, it has turned out to have some disagreeable aspects, which is why, as my right hon. and learned Friend the Member for Monklands, East said, we shall want to explore several matters and obtain assurances and, I hope, amendments to the Bill before it reaches the statute book.
  5.11 pm
  Mr. Malcolm Bruce: The Minister of State introduced the Bill as a technical measure, but it raises several issues, some of which have been touched on and some of which have not.
  In shipbuilding debates, the Minister consistently seems to show a negative attitude towards shipbuilding and shipping. He gives the impression that he regards shipping and shipbuilding as a Victorian hangover that is in decline, and that inevitably we must accept the decline, whether in shipping or shipbuilding. So far we have heard the view of just one Conservative Back Bencher, the hon. Member for Eastleigh (Sir D. Price), but across and outside the House there is a feeling that the Government should say what they regard as the strategic level of shipbuilding and shipping that we should retain in the United Kingdom. If they do not, they will preside over the demise of this major industry. Many people are afraid that that is what is happening. I say this seriously and not in
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  a combative way. In due course the Minister must show a more positive attitude towards the industry than he has on every occasion on which he has addressed the House on this subject.
  Presumably the prime reason why, in the short run, we are extending the provision for redundancies is that we are expecting a great many more redundancies. Therefore, it is understandable that there is concern about the Government saying that there is a final date. Is it when they expect the industry to reach the minimum level of employment that will be retained as the strategic core? If the Government tell us that by the end of 1986 they are sure that the industry will have reached its minimum and will be looking for expansion thereafter, and that is the reason why they are not extending the scheme, we might have a little more confidence than we have now.
  After all, the United Kingdom is an island nation and a trading nation. Surely it is a requirement that we have British-owned shipping capacity and indigenous shipbuilding capability. It would be ironic if we moved into the 21st century without having a significant stake in these two vital lifelines for this country. Regrettably, under this Government our trade has diminished and our export of manufactured goods is now in net deficit, but presumably we expect to go on trading as an island nation. Even the fact that more of our trade is in ferries does not give us a great deal of encouragement, because most of them are built in foreign yards, and although most of the ferry companies are British, increasingly there is an encroachment of foreign owners in this strategic lifeline.
  One area which is not only of constituency interest to me but of strategic importance to the United Kingdom as a whole is the development of North sea oil. It is an offshore industry by definition, and the marine and maritime component of the industry is substantial. Britain's maritime technology should play a much bigger part in the development of the North sea than it does. Let me be more specific. At present we have a record number of drilling rigs operating in the North sea. Virtually all of them are foreign-owned and foreign-built. The exploration rigs and production platforms are serviced by a variety of offshore support and supply vessels, nearly all foreign-built, and a high proportion foreign-owned.
  I wonder whether any other maritime nation like ourselves, with such an important growth industry which offers development opportunities of new technology out of our traditional capabilities, would tolerate such a high level of foreign operation in its territorial waters. I am sure that the Japanese would not. We know that the Americans do not. The Norwegians certainly do not. It is time that the Government had a policy which required that more of the ships that we need for United Kingdom purposes were built in United Kingdom yards.
  The Government propose to privatise warship yards. I do not wish to repeat what has already been said, but in the last financial year those yards made a profit of £33 million, and any profit that they make is made because they secure orders from the British taxpayer. However, once they have been privatised, any profit that they make will go to the private owners and will not benefit the taxpayer. Therefore, at least £33 million will not be available for the benefit of the remainder of British shipbuilding. I am not suggesting that there will be no benefit, but, by definition, it will be a reduced benefit.

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  Therefore, it is difficult to see how privatisation will help the merchant yards that are left at the core of British Shipbuilders.
  When he replies to the debate, the Under-Secretary should tell us what the Government's thinking is on the future of the merchant yards. I hope that it is positive, because many hon. Members fear that there will be no publicly owned shipyards and that the remaining yards will not be transferred to the private sector because the losses will not enable that to happen and the orders will not come, for the reasons that I have given. Therefore, we shall see the loss of valuable and strategically important yards in the British economy.
  There is also concern about the implications of the redundancy scheme. We need to extend the scheme now, because the industry is contracting, but there will be a particular need to do so when a finite date is put on the eligibility for redundancy. It does not matter whether that date is when the scheme is due to end because the Government have said so, or whether it ends because the yard is transferred to the private sector, which may or may not have a comparable scheme.
  There is an inevitable consequence that the individual working in the yard will say, "I had better take the money and run while I can." Some hon. Members may have noticed an article in The Guardian on Monday, which was entitled:
  "Willing victims baffle unions".
  Those are the thousands of shipyard workers in Swan Hunter who have applied for redundancy.
  Mr. Garrett: The actual figure is 2,000.
  Mr. Bruce: I am grateful to the hon. Gentleman. The report states that the company's industrial relations and personnel director, Mr. Denis Shadbolt,
  "concedes that workers may be leaving the company while Swan Hunter remains part of state-owned British Shipbuilders rather than wait for inferior redundancy terms when the yards are privatised later this year."
  There will be a problem not only for the individual but for the management, which is faced with the problem of who should be made redundant and which workers management cannot afford to lose. The Government must consider, if the yard is being privatised, whether there is a danger that good workers will be lost before privatisation and will not be available to the private owner thereafter. That may weaken the skill and strength of the work force within the yard.
  The yard of Hall Russell is of interest to me and to the neighbouring constituency. It is likely to be among the first to be privatised in the present round. As the Minister is aware, I was part of a delegation which saw him some weeks ago. I subsequently had sight of the offer document. I agree with the point made by the right hon. Member for Glasgow, Govan (Mr. Millan). It would be helpful for Members to see what was involved in such a sale. The privatisation presents uncertainties. I am confident that Hall Russell has been a good yard. It has been profitable in public and private ownership, and there is no reason why it should not be successful as a private yard. One wonders, however, whether it benefits from being kicked in and out of the public sector as quickly as it has been.
  The document states that the company had the advantage of British Shipbuilders' central services, for
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  which it pays a management fee of £252,000. The prospectus confidently states that the cost of buying those services elsewhere is unlikely to exceed that amount. That may be a statement of faith. We must consider the cost of the management team pulling out of the services that it has developed during the past two years and having to find comparable services elsewhere. It is not just the economic cost; it is the cost in time and energy, which might be better directed towards winning orders and organising the yard's production.
  Ultimately, the success of that yard and its ability to remain as a shipbuilding yard, which the Minister knows is the prime interest of the people of Aberdeen, who, in overwhelming numbers, have signed a petition asking that the yard be retained as a shipbuilding yard, will depend upon the Government ensuring that Ministry of Defence orders go to the yard, because they will be the core of its business. That will determine whether the yard is retained as a shipbuilding yard. The Minister has given assurances that he wishes to see that yard retained as a shipbuilding yard. I hope that he will speak to his colleagues in the Ministry of Defence and let them know that he has given those assurances and that they should back him in that objective.
  The idea that the yard might be taken over sooner or later by an interested party who might, for example, use it for offshore purposes might seem superficially attractive. It might employ a few more people, and it might be more profitable, but it would reduce the diverisity of employment and industry within the community. The north-east of Scotland has prided itself on remaining relatively problem-free, by economic and industrial diversity. We are not a one-industry area. It would be a disadvantage to us if the oil industry were to expand at the expense of the traditional industries, but it has already happened.
  That is not to suggest that we are not grateful for and are not responding enthusiastically to the challenge of the oil industry, but it is why people feel that Hall Russell should be retained as a shipyard. It is also important in the national interest that we retain that strategic capability. Shipbuilding is extremely important for the people of the United Kingdom, both now and in the future.
  Mr. Norman Lamont: The hon. Gentleman started his speech by castigating the Government for not identifying a core level of capacity that we could guarantee. He has now been speaking for 10 minutes. When will he tell us what his core level of capacity is? Is it 200,000 or 300,000 compensated gross registered tonnes? How will he guaranteee it?
  Mr. Bruce: One would have thought that the Minister could tell the House what the Government's objective is. The hon. Gentleman has the advantage of a Department which should be working on the problem and coming up with the answers. He should be able to deliver the answers. We are going below the strategic level now, and if the decline over which the Minister has presided continues for the next year or two, it will be below the critical level.
  I have identified for the Minister's benefit where we should be achieving greater United Kingdom penetration—specialised offshore vessels and ferry services to and from the United Kingdom. I should like the Minister to tell us what he and his Department are proposing to do to ensure that British shipyards obtain a higher proportion of

  811
  such orders. He cannot just talk in terms—as he is prone to do—of his ideological preference for the free market, because the Japanese, the South Koreans and the Americans operate a selective market. It is not to our advantage for Britain to operate a free market when the rest of the market is not free.
  It is time that the Government told us what their bottom line is. At the moment, they are presiding over the dissolution of shipbuilding. It is a demoralised industry. The Government should return to the House with some positive ideas of how they will retain capacity and what that strategic capacity should be. I have identified matters to which the Government should address themselves. I and other Members would be more confident if the Government showed any inclination to do so.
  5.25 pm
  Mr. Bob Clay: When we came to take part in the debate today, the picture was depressing. Those of us who were thinking about the points we wanted to make if we were lucky enough to catch your eye, Mr. Deputy Speaker, wished that we did not have to talk about redundancy schemes but rather about orders and saving the industry.
  I agree with my hon. Friends who have already spoken, who said that the revelation contained in the Minister's speech that there would be no Government scheme after the end of 1986 confirms what we were sure about already. I hope that it confirms for others in the north-east and in shipbuilding communities, who had any doubts, that the Government are planning systematically to close down the rest of the state shipbuilding industry.
  The Government are not just privatising warship yards; they are closing or privatising merchant yards. For anyone left in the industry, in Sunderland Shipbuilders or Austin and Pickersgill in my constituency, the message clearly is, "If any of you had any illusions or hopes that the Government were eventually going to do something to produce orders and save those yards, give up and get out now, because there will be no redundancy scheme left worth talking about by the end of next year."
  In the light of what the Minister said, it is relevant to talk, as some of my hon. Friends have done, about the general position of the industry. We had a debate not long before Christmas, when various points were made. We received inadequate answers and explanations from the Government. The position has not improved. As the weeks go by it becomes worse. Austin and Pickersgill still has no orders. The Government still have not decided what to do about the export credit for the Ethiopian order, despite pleas from the Opposition Front Bench and by my hon. Friend the Member for Sunderland, South (Mr. Bagier) and myself in the previous debate, and despite all the correspondence. Nothing has been done about that, and nothing has been done about the St. Helena order.
  Mr. Parker is off around the world once again saying that he is looking for orders for SD14s. We are always being told that orders are about to materialise for them, but they never do. Redundancies have been announced for 21 January and more redundancies will follow in March. Realistically, unless an order turns up within a limited number of days, there will not just be further redundancies in March, but a closure in March or April. There is nothing left for the yard to do; it is out of work.
  The Minister and the Government have for months been castigating hon. Members like myself and my hon. Friend
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  the Member for Newcastle upon Tyne, East (Mr. Brown) for being alarmist and putting around scare stories. It was hypocritical of the Government to point the finger at me and my hon. Friend when they were cynically preparing for the yard to close. They did not need to produce contingency plans relating to the closure of the yard. All they had to do was sit there and not provide any assistance. We know that there is a recession and that the industry faces problems, yet, as has been said time and time again on this side of the House, whenever there is the possibility of an order which British Shipbuilders is trying to obtain in competition with other shipbuilding nations it slips away.
  During the last year there has been a list of possible orders for Austin and Pickersgill. Each one has slipped away. The Orlendorf order slipped away for a price gap of £2 million. The Government could have stepped in and done something about it. They could have provided a direct subsidy or an improved financial package. That order for two or three ships, which would have given the yard a breathing space, was allowed to slip away. The Ethiopian order is being allowed to slip away. Every other order is being allowed to slip away. The more that these orders appear, only for other countries to obtain them, the more I am convinced that the problem is not that there are no orders to be gained but that the Government do not have the will to assist British Shipbuilders and individual yards to gain those orders.
  Could the Minister comment on the suggestion made to me that the Indonesian Government are planning over the next 10 years to renew their inter-island fleet and that, in the not-too-distant future, the Indonesian Government will begin to negotiate contracts for a total of 280 merchant ships? The Sanko order in Japan, which was referred to earlier by my right hon. and learned Friend the Member for Monklands, East (Mr. Smith), was a staggering example of how Governments can intervene to assist their own industries. I wonder whether it is true — I understand that it is — that the Indonesians intend to bring about this massive renewal. We are talking about hundreds of ships. Does the Minister intend to leave it to the Koreans, the Chinese and perhaps the Japanese to pick up those massive orders, or does he believe that the shipbuilding industry of this country should try to obtain part of that work?
  Unless the Government say very soon that they are prepared to act quite differently to assist merchant yards to obtain the available orders, nobody should be in any doubt that the intention of the Government is to bring about the systematic rundown of British Shipbuilders. Its former chairman, Sir Robert Atkinson, has consistently accused the Government of this. It is also the view of nearly everybody who is associated with the shipbuilding industry, apart from those who sit on the Government Front Bench.
  The Government need to take action to convince us that this is not their intention. Why does the Minister not come clean and be honest about it? Why does he not put an end to the agonising in the shipbuilding communities and announce that this is the Government's intention? Then we shall know what to do about it.
  An even more desperately urgent matter which involves the many people who have already been made redundant and those who face redundancy is British Shipbuilders' engineering and technical services which are situated in my constituency. It is a classic example of the

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  hopelessness, the pessimism and the wilful vandalism of Government policy. The general view of large parts of the international marine engineering industry was that it was a crazy decision to put an end to the development and manufacture of Doxford engines. This decision was categorically denied month in and month out by the Government, British Shipbuilders and everybody else until shortly before the manufacture of Doxford engines came to an end. But at least the facility was there for research and development, there was the capacity for spares and other engineering work and there was the hope that eventually it might be the basis for the rebirth of marine engineering on Wearside, where the Doxford engine at one time dominated the marine engineering industry.
  The former chairman had faith in the industry and wanted to do something about it. There was investment in the industry but now British Shipbuilders, for the most absurd logic, it seems to me, has decided to close it. That announcement was made some time ago. During recent months anybody who has any interest in the industry has rallied round and tried to persuade the Government to change their mind. All kinds of people believe that there is a potential for this engineering industry. The "United Kingdom Marine Engineering Audit" — not a Labour party body publication but issued by the Institute of Marine Engineers—states:
  "Although manufacture of engines ceased at Doxford Engines Limited in 1980, their design of opposed piston engines is a strong contender for the ships being ordered today and in the future; work on this has reached a relatively advanced stage at BS(ETS) Limited, a subsidiary of British Shipbuilders, which could be integrated into the project."
  The project referred to is a major marine engineering project, a total propulsion machinery system.
  "The engine design would be based on existing expertise and such a project could lead to an upgrading of the marine engineering capability in the UK. . . The participants for such a project should include: shipowners, shipbuilders, classification societies, the Departments of Trade, Industry and Transport, engine and equipment manufacturers, professional institutes, polytechnics and universities. They would all be expected to contribute to the project financially or in kind…
  A company, with directors drawn from the industry and universities, should control, plan and monitor the project which, ideally, should be located adjacent to a shipbuilding centre and a university."
  There is no place that better fits that job description than the existing BS(ETS) facility in Sunderland. Any intelligent Government with a commitment to the industry would ask that those proposals ought to be developed and that money ought to be put into them. Indeed, the Government would be putting money into those proposals. Instead, the Government have stood aside and allowed the closure to take place. They have allowed the work force to be bludgeoned bit by bit by British Shipbuilders by threats, by cajoling, by bribes into volunteering for redundancy to the extent that now only 30 or so brave manual workers are determined to try to keep that engine works going, despite the determination of the Government and British Shipbuilders to close it. Lloyd's List, which is not a Socialist publication, carried an article on 3 January which referred to BS(ETS) and concluded:
  "Even now, as Members of Parliament and local authorities concerned with reviving employment on the river Tyne and Wear are fighting to retain or revive Doxford engine prospects, it seems that the engine and its development team will be moved out of Sunderland. The logic of successive British Shipbuilders' heads
  814
  continues to be difficult to comprehend. Even as the engine was being prematurely buried, Canada and other countries were desperately seeking elusive BS executives in the hopes of placing further engine orders. A number of those responsible for abandoning the engine have now left BS with sadly tarnished reputations".
  I suspect that the Minister of State, the management and the chairman of British Shipbuilders, who are determined to kill the engineering works, will also end up with tarnished reputations.
  Nothing can be done in a few days or a few weeks, but companies have said that they would be interested in taking over the works if BS were not willing to keep it open. Companies are talking about developing the engine, perhaps in conjunction with British Shipbuilders, local authorities are prepared to provide money for research and there is a strong will to keep the works open, partly to develop a new engine, but also to develop the last of the Doxford engines for new types of fuel, involving coal as well as oil. That has enormous export potential for power stations in the United States and one would think that a Government with any interest in maintaining an industrial nation would be interested in such a project.
  However, because no company has yet made a concrete offer, the Government and British Shipbuilders are not prepared to allow a stay of execution and to keep the works open. The Minister of State seems to think that it is as easy to sell a works when it is closed as when it is open. He ought to remember that not only physical assets are involved. We must also consider the skills of the workers, the traditions of the works and the teamwork. All that needs to be kept going.
  Unless the Government take action in the next few days they will be responsible for the death of a great national asset which could have been the basis of a rebirth of a British domestic engine. That would be shameful and, even at this late stage, I urge the Minister to reconsider the closure.
  As has been said, when talking about redundancies we have to accept that no one has the right to sell his job. It is not his job to sell; it is the job of his son or daughter and the job of generations to come.
  I beg the Minister of State to think about what will happen in my community if the huge merchant yards are closed. There is massive youth unemployment in Sunderland—it is almost as bad as the rate in areas such as west Belfast. In the east end of Sunderland, unemployment is over 55 per cent.
  The Minister should ask himself where young people in Sunderland will get skilled or even unskilled work if the shipyards close. The town is being decimated; there is nothing left. We must be approaching the worst crisis faced by a town the size of Sunderland since the war.
  Shipbuilding is the key. If thousands of redundancies take place on the river Wear and the jobs are lost, the unemployment rate will be devastating. Some pockets of Sunderland already have unemployment rates approaching 50 per cent. and there is no hope there for young people. Those pockets will spread widely and the town will become a disaster area.
  Mr. Richard Holt: Does the hon. Gentleman agree that one reason why Nissan went to Sunderland was that there was a reservoir of skilled and untrained labour available there? That was an attraction. There is decline, but new industries are going to the area and are attracted by the available labour market.
  Mr. Clay: I am grateful to the hon. Gentleman for intervening, because I wished to conclude with a reference to Nissan. Whatever our views about Nissan — the disadvantages, the benefits, the effect on the rest of the British car industry and so on — even if we take an enthusiastic view, we must realise that, given that the first stage of the Nissan development will provide only 400 or 500 jobs, we shall need a Nissan every six days to match the redundancies already announced in the north-east.
  Even if phase 2 of the Nissan project goes ahead, and we get 2,000 jobs—though without the sort of spin-off that comes from shipbuilding — we shall need three Nissans to make up for the loss of jobs that directly depend on shipbuilding on the Wear.
  Virtually everyone who works in the shipyards on the Wear lives within a mile or two of the river. Many workers live very close to the yards. The workers at Nissan will be drawn from a wide catchment area and some will probably come from as far away as the constituency of the hon. Member for Langbaurgh (Mr. Holt). The hon. Gentleman made a valuable point, because it showed how desperate we are in the north-east. Even phase 2 of Nissan will be only a marginal compensation for the industrial holocaust that Wearside faces. I urge the Minister to consider the consequences of allowing this madness to go ahead.
  5.47 pm
  Mr. Frank Field: I underline the point on which my hon. Friend the Member for Sunderland, North (Mr. Clay) ended. It is difficult for us to convey in the House the feeling in our constituencies about unemployment. Somehow, trying to explain the horror and destruction of unemployment numbs our debates.
  My hon. Friend the Member for Sunderland, North did a service to the House, to his constituents and to many others by bringing us back to the desperate situation that many people already face or may have to face unless the Government change their policy towards the shipbuilding industry.
  As on previous occasions, I agreed with part of the speech of the hon. Member for Eastleigh (Sir D. Price). I was much attracted by his idea that stability would be given to our industry if the Ministry of Defence could be persuaded to establish a five-year rolling programme of defence orders. I know some of the difficulties involved. For example, the relative price of defence equipment is rising faster than the general level of prices, and that would have to be taken into account, but I sympathise with British Shipbuilders in the difficulties that it has faced over recent years in not knowing what defence orders would be placed in the near future.
  I expressed that sympathy with the directors of British Shipbuilders despite the fact that I and other Wirral Membrs are less than happy with the lack of support that British Shipbuilders seems to be giving to Cammell Laird. The scheme proposed by the hon. Member for Eastleigh would be even better if it included a provision for some orders to be earmarked for Cammell Laird. But perhaps I ask too much.
  Dr. Godman: In connection with Ministry of Defence orders for the warship yards, is not one of the difficulties the elongated lead time demanded, or argued for, by the Ministry between the building of the first vessel of a new type and the placing of subsequent orders? Would not a reduction in the lead time help the warship yards?
  Mr. Field: It certainly would. One of the difficulties with defence ordering at present is that, understandably, the Ministry wants to get as good value for money as possible. That policy can penalise the lead yards in that they incur the initial cost of developing an order, while other yards can bid for subsequent orders at much lower cost. Getting value for money creates real difficulties in terms of stability for the lead yards. That is an important matter, but one that I cannot deal with in this short speech.
  My right hon. and learned Friend the Member for Monklands, East (Mr. Smith) asked the Minister whether he could be given information about the terms of sale for our various yards, and the Minister kindly agreed to send him that information. I would be grateful if I, too, could be given details not only of the Cammell Laird sale but of the sale of other yards too.
  Although, Mr. Deputy Speaker, you have rightly allowed us, because of the urgency of the matter in our constituencies, to draw the terms of the debate somewhat widely, there is a specific measure under discussion. I was puzzled by a fault of logic in the Minister's presentation of clause 1. He painted a picture of the difficulties of continuing the scheme under the Government's privatisation measures. Not possessing the skill of writing shorthand, I did not write down the Minister's exact words, but his image was one of a growing problem of redundancy, a big scheme and a large bureaucracy. He suggested that those were not conditions that the Government would wish on the industry that they mean to privatise. It is difficult to square that image with the growth that the Government tell us will result from privatisation.
  Mr. Norman Lamont rose—
  Mr. Field: I will happily give way in a moment. If the Government are confident that their privatisation measures will be good for the industry and that our share of the world market will increase, there should be less need for a redundancy scheme than there is now and it should be easier to apply a national scheme.
  Mr. Lamont: The hon. Gentleman seems to have misunderstood me. He seems to be referring to what I said about the scheme in relation to the state sector. I said that with a very small remaining state sector — 11,000 employees in British Shipbuilders — it would be inappropriate to retain a statutory scheme rather than settling one within the industry. My remarks did not apply to the private sector. The scheme has never applied to the private sector, and if it were to do so it would first have to be amended.
  Mr. Field: I accept that as the scheme was designed at a time when the industry was wholly in the public sector, it obviously did not apply to the private sector. However, the Minister's logic is still at fault. There will be far less difficulty in fitting the private companies into a national scheme, by putting a levy on them, if they are successful, than there would be if they were not so successful.
  I was troubled by another of the Minister's remarks. We all accept the sad need to extend the scheme. In his defence of doing so the Minister said that the Government were not at fault, because the industry was dependent or the world market. To some extent, we would agree with that. However, if, unlike some other industries, shipbuilding is

  817
  dependent on the level of world trade, is it not more important to protect the workers in that industry with adequate redundancy schemes than workers in industries that are not open to international competition? If the Minister bases his defence of the extension of the scheme on the existence of a situation that is largely outside Government control, surely the Government have a bigger duty than they would otherwise have to make sure that the workers in that industry are adequately protected?
  When referring to Cammell Laird, the Minister said that the moderates had voted with their feet and defied the militants. I consulted the men and women who work for Cammell Laird about what I should say in this debate. They wish me to address three questions to the Minister and to report his replies. First, there is a feeling that the Department of Industry "has it in"—in the words of the employees—for Cammell Laird. In the way that people pick up such information, they have heard that the Department of Trade and Industry takes the view that there is at least one yard too many and that one should close. They have also picked up the idea that the Government feel that it would be difficult to sell Cammell Laird in its present state and that it would be better to run it down, so that there is no work force there, before selling it. Are those the views of the Department? The reason why those ideas have currency in our town is that the work force believes that the Department is blocking the decisions on where the type 22s should go. I hope that the Minister can tell me how the Department views the future of Cammell Laird.
  Secondly, if that is how the Department of Trade and Industry intends to fight its corner over the future shape of the industry, the employees would like the Minister to consider that that view is at odds with that taken by other Government Departments which have shown confidence in the area. It is not so long ago that the Lord Chancellor fought his corner in Cabinet and succeeded in persuading his Cabinet colleagues to place the Land Registry in Birkenhead. The effect of that welcome move, which was an attempt to stem the rising tide of unemployment in the Birkenhead area, would be more than wiped out if the Department closed Cammell Laird. Does the Minister understand how other Departments have backed the area? Why do people have those feelings about the attitude of the Department of Trade and Industry to their future?
  The third question takes up the point made by my hon. Friend the Member for Sunderland, North about the level of unemployment in the area and what the Government have said about how to beat the apparently ever-rising tide of unemployment. The workers feel that by walking back to work, implementing the flexibility agreement, negotiating with the tug men to achieve the rig out of the dry dock and making sure that the type 42 will be finished before the scheduled date, they are doing all that the Government have asked them to do. They believe that, that being so, if the Government do not give them one of the type 22 orders, it will be the Government who are walking away from the area. The Government will have made the cruel choice that one of the yards that they wish to be closed prior to privatisation is Cammell Laird.
  I should be grateful if the Minister could answer those three questions asked by the men and women of Cammell Laird, and allay their anxieties.
  5.59 pm
  Mr. Nicholas Brown: The key issue in this debate is where the Bill takes the industry. The inescapable conclusion is that it takes us towards contraction, closure and the ruination of shipbuilding communities. All that the Government have done in their consistent approach to the industry strikes another blow at the nation's industrial base. The blow will work its way through other industrial sectors and into the service sector and will further weaken the industrial, commercial and employment base of the British economy. We are today discussing an issue which is wider than the arrangements for reducing British Shipbuilders.
  The Government's approach to Britain's industries is completely wrong. The future of service sector industries such as ancillary engineering industries is entwined with those of our great primary industries. Just because banks, insurance companies, lawyers and suppliers to shipyards can take their profit margins and thus call themselves profitable, that does not mean that they will still be able to take their percentage when there are no primary industries for them to take a percentage from. The Government persistently ignore that strategic fact, which overshadows the debate. I have never heard them answer that issue convincingly. They seem to think that, after the industrial sector has been trimmed, the service sector will remain and survive on foreign revenue. That is an absurd belief.
  The Minister said that the industry was contracting. Everyone involved in the industry knows what is happening. The argument is not about what is happening but about what we do about it. Instead of protecting the industry in a world crisis, the Minister is introducing a Bill to facilitate its contraction. He has chosen today's debate to tell us, for the first time, that the Government envisage all the warship yards being privatised by March 1986. I am sure that the Minister will correct me if I misheard him. The current ordering requirements of the Ministry of Defence are less than the total capacity of the warship yards, or those yards which are now designated as warship yards. Swan Hunter has a history of warship construction, yet it has not been regarded as a purely warship building yard. It is now to be privatised, on the assumption that its future is overwhelmingly as a warship yard. In other words, there is no future for merchant shipbuilding at Swan Hunter—that is the logic of the Minister's plans. Equally serious is the Government's intention to leave to the private sector the choice about which warship yard stays open. Some yards will be purchased for use as warship yards and others will not.
  The Minister must be candid with us about the future of yards which the private sector does not want. I shall willingly give way if the Minister wants to explain the Government's view. He is reluctant to do so. The key fact is that there is only one major customer—the Ministry of Defence— and at the moment there is not enough work to go round. The Government have complete control over that. They are deliberately holding up work, such as the two outstanding type 22 orders, to encourage redundancies and facilitate privatisation with small labour forces. The Minister said that no further redundancies are contemplated but that the scheme is being extended to December 1986 just in case. Just in case? If the two type 22 orders do not go to Swan Hunter soon, there will be a further round of redundancies of between 800 and 1,000

  819
  men. However, if the work goes to Swan Hunter, there will be redundancies at the two other yards which are bidding for the same order.
  By saying that the redundancy scheme will end by December 1986, the Minister is encouraging people to leave the industry before privatisation. To that end, the industry is deliberately being starved of work. To that end also we are told that the British Shipbuilders redundancy scheme will not be continued into privatisation. There is no respect in that for people's accrued rights in employment and no sympathy for the special nature of shipbuilding communities. In the four shipbuilding local government wards in my constituency, 49 per cent. of the unemployed men are time-served skilled men. Do we hear from the Government about alternative employment initiatives? We do not. Quite the reverse—assistance to the region is to be reduced. The unemployed and the displaced must be offered a future, or the pressures on the social fabric of the community, as shipbuilding Members of Parliament have warned before, will become unbearable. Young people who looked to Swan Hunter for employment and apprenticeships have no future in alternative employment. They did not have such a future last year and the Bill says that they will have none next year.
  The Minister gave us his view of circumstances in merchant shipbuilding but, significantly, he did not say what level of merchant shipbuilding capacity the Government are committed to retaining. It is not enough to ask the parliamentary Liberal party for its view—we want the Minister's view. If the era of combined yards such as Swan Hunter is at an end, the Minister should explain what size merchant shipbuilding industry the Government will retain through British Shipbuilders and whether that is being calculated in money terms, tonnage, or the numbers of people employed. They should also tell us whether the issue is to be left to the Government's mythical concept of a free market. In successive debates on this subject, I and other Labour Members have said that there is no free market in world shipbuilding, least of all in world merchant shipbuilding. The Government have a duty to respond to that fact by rescuing and protecting the industry, not by killing it off.
  The redundancy scheme is no longer generous. It was originally designed to run by the side of national redundancy payment entitlements and to encourage older workers to leave the industry, almost by taking a form of early retirement. However, they were to leave an industry which it was planned would survive and have a future. The scheme's cash value has not kept pace with inflation and its original purpose has been lost sight of. It is now being used cynically to restructure the industry—the profitable parts being in the private sector and the labour force being dramatically reduced.
  At Swan Hunter, British Shipbuilders managers are hoping to become private owners. At the moment, those managers have a duty to British Shipbuilders, which is their employer, and to their shareholders—to us, the British taxpayers. They cannot sneak away from that duty. They are in a difficult position when they say publicly that they want to be part of a private consortium which hopes to take over Swan Hunter's assets. My fear is that, if there is industrial trouble at Swan Hunter, whether about privatisation or any other issue, it will be provoked by the management before privatisation so that the state bears the cost. That would be deeply wrong.
  820
  I issue a clear warning to the management of Swan Hunter: if they challenge individual representatives of the work force, such as a convenor, in a dispute about disciplinary matters and try to provoke industrial confrontation, they will find that they are opposed by every trade unionist on Tyneside. They will not be forgiven for putting the local industry through that extra pain.
  I am deeply saddened by what the Government are doing and by the fact that there is no recognition of the special problems of shipbuilding areas. Like others, I have warned that the social fabric of our shipbuilding communities cannot take much more of this. The Government must respond or we shall find that the social fabric has torn under the strain.
  6.9 pm
  Mr. Ted Garrett: It is not often, Mr. Speaker, that I participate in a debate when you are present. Therefore, rather belatedly on the ninth day of 1985, I wish you every health and happiness and a less troublesome year.
  The key to this debate is difficult to discern. Since the general election, my hon. Friend the Member for Jarrow (Mr. Dixon) and I have on at least nine occasions spoken on the Floor of the House about shipping and shipbuilding. As I said just before Christmas, it is difficult to come up with any new ideas.
  I refer the Minister to an article in the Daily Telegraph by John Petty, the shipping correspondent, whose advice, knowledge and information are second to none. He says that British and European shipowners have agreed to link up in an attempt to survive against the collapse of markets, bankruptcies and increasing competition. The Minister and his civil servants are now aware of that simple proposition, but we have been aware of it for the last 15 or 20 years and have made such statements time and again.
  That article names four companies which are going into bankruptcy or liquidation. A European company called Gazocean, the principal shareholder of which is Gaz de France, is likely to go bust, as is the Kotka Line, which operates a service from Finland to Immingham. Our friends across the Irish channel also have a company which has gone into liquidation.
  With the exception of the first, these are not large companies, but they are examples of a continuing decline in shipping, both in the United Kingdom and in Europe. Therefore, I hope that I understand the scale of the problem facing the Government, just as I understood the scale of the problem facing the previous Labour Government. The method of approaching the problem is still open to question and debate, and while privatisation may be a short-term profitable answer, it is not the answer in the long term.
  For the 2,000 people in question in my constituency and the constituency of my hon. Friend the Member for Newcastle upon Tyne, East (Mr. Brown), the Government say that there is no answer. Consequently, the number asking for redundancy has exceeded the number expected to be made redundant. I and my Labour colleagues in the northern group of Labour Members were prepared to mount a massive "Save our Shipyards" campaign in conjunction with the local authorities, but the scale of defeatism is such that that campaign cannot be mounted unless the workers have a will to fight and to recognise that there is a future, not merely for themselves, but for the

  821
  society in which they live. That is the scale of the tragedy. Morale has gone, and consequently the will to win has diminished to the point of no return.
  Many of these men thought that they had a working life ahead of them. All of them possess various skills, such as designers and naval architects. Many others have university degrees. They have devoted much thought and time to the skills which even now make our ships the envy of the world—for example, the dual-purpose Atlantic Conveyor. Those men have lost their enthusiasm. They want to leave the industry and, if possible, to start a new career. They will probably join the drift from the northeast and other areas to the already over-populated south, and, given their skills and knowledge, these people should have a better chance of a job in the south than in the regions.
  So far, no Labour Member has mentioned clause 2, which relates to money. The average redundancy payment will be just over £5,000. Is it fair, honest or equitable that such a sum should be offered from state funds when miners are being offered £1,000 per year of service? The offer to the miners is reasonable. Equally, is it fair that farmers going out of milk production should receive more generous payments relative to what will be offered to men of equal, and in many cases superior, skills, who have served their country in an equal capacity?
  Mr. Dixon: And dockers.
  Mr. Garrett: I agree with my hon. Friend. Somehow, we have got ourselves in a position in which we are not offering fair compensation terms to men in the shipbuilding industry.
  The Redundancy Payments Act 1965 was introduced by Mr. Ray Gunter, then Minister of Labour. He understood labour problems, and to the memory of his name I should add that he was a first-class Minister of Labour. I well remember the speeches that he made, and he always emphasised that the Redundancy Payments Act was designed merely to tide people over until they got another job. However, it is no longer easy to get another job or to move from one occupation to another, so the financial terms under that Act and the terms that are now being offered are completely inadequate. When this Bill goes to Committee, I hope that Committee members will consider more reasonable terms.
  I do not intend to say whether the £1,000 per year of service to miners is adequate or not, but had Lord Gormley still been president of the NUM he would not have been involved in a strike but would have argued from the start that the £1,000 per year of service for redundancy should be used as the basis for negotiation. Something different might have emerged. Regrettably, that has not happened. We cannot even accept as a basis for negotiation the present terms offered to those who must leave the shipbuilding industry. I hope that when my hon. Friend the Member for Jarrow replies he will encourage the Committee, on an all-party basis, to consider more adequate terms of compensation. If I am lucky enough to be a member of the Committee, that will be a main theme in my contributions to it.
  6.20 pm
  Dr. Norman A. Godman: First, I echo the sentiments expressed by my
  822
  right hon. Friend the Member for Glasgow, Govan (Mr. Millan) about the Turkish order for five vessels. If the order materialises for Govan Shipbuilders, as I am sure it will, it will be a marvellous shot in the arm for Clark-Kincaids, the engine builders in my constituency. Kincaids built the engine for the Atlantic Conveyor. The workmanship and delivery times were a delight to the directors of Cunard. Kincaids could, with the assistance of British Shipbuilders, easily take on the task of reengining the QE2. There is much press speculation about that now, and Cunard should give the order to Kincaids.
  As both the Minister and my right hon. Friend the Member for Govan mentioned Scott Lithgow and as it is wholly and exclusively in my constituency, I also have a right to mention it. I sincerely and fervently hope that the contingent liability of British Shipbuilders in respect of 1,500 employees of Scott Lithgow being made redundant within a year of the sale will not have to be honoured.
  Business is going well at the yard and the Government could help further by placing Ministry of Defence orders with Scott Lithgow. I think principally of follow-up orders for the SKK 2400 conventional patrol submarine. I hasten to add for the benefit of my colleagues that that vessel will not carry nuclear missiles. I am confident that offshore orders will be placed with Scott Lithgow. The directors of Trafalgar House have assured me about local employment, especially selection and training issues, and I believe that they are men of their word. Under its new owners, Scott Lithgow deserves the warm support of all, not merely of those in Scotland.
  The provisions in clause 1 should and must be extended beyond December 1986. The Minister's comments will dismay many employees of British Shipbuilders. As my right hon. and learned Friend the Member for Monklands, East (Mr. Smith) said, much more needs to be done for those communities which have suffered from the decline of this once-great industry. Although I warmly welcome the continuing developments in the information technology industry, especially the expansion of IBM and National Semiconductor, we must remember that male unemployment is at a dismally high level—about 23 per cent. Investment is necessary both for the infrastructure of a savaged, wounded region and for the industries there.
  The debate takes place at a most gloomy time for the shipbuilding and shipping industries. Almost everywhere we see, if not a continuing and remorseless decline, the dismantling of a great industry.
  Mr. Roy Farndon, editor of Lloyd's List, put two questions to a meeting of the Greenwich Forum in 1983. He asked:
  "Can London sell its shipping and ship management and shipping finance skills as the size of the British-owned fleet—let alone the British-registered fleet—continues to decline? … And with the stupefying contraction of British and European merchant shipbuilding and repair, it can be asked whether London's skills in shipbuilding finance, classification and design, can prosper independent of the economic host."
  The Government are failing in their duty if they stand aside while the contraction continues. Mr. Farndon's questions emphasise the importance of shipbuilding and shipping to the maritime service industries. Sometimes we overlook the importance of shipbuilding and shipping to the marine equipment industries and to many finance houses and merchant banks in the City.
  As some hon. Members know, shipbuilding, shipping and ancillary services are of crucial importance to my constituency. Clark-Kincaids is the only merchant engine

  823
  builder on the Clyde today. It has an important interdependent relationship with the Govan shipyard and other British Shipbuilders yards. It is essential that that marine engine building capacity is maintained, not only for the people directly involved on the lower Clyde but for the entire British shipbuilding industry.
  The yard of Ferguson-Ailsa is also in my constituency. It has a fine management-worker relationship and it builds first-class vessels, especially smaller vessels. The yard is fighting hard to gain a foothold in export markets for offshore support vessels. In line with what my right hon. Friend the Member for Govan said about the Turkish order for Govan, I hope that the Minister and his Department are giving every assistance to Ferguson-Ailsa of Port Glasgow and Troon in the important area of offshore supply vessels.
  Scott Lithgow is not now owned by British Shipbuilders, but it is rapidly improving its market image in offshore construction and, I hope, soon will again become the best yard for the building of conventional patrol submarines. I should like to see Scott Lithgow and Vickers sharing the building of the SKK 2400 conventional submarine. As the hon. Member for Eastleigh (Sir D. Price) said, there is potentially a marvellous export market for that vessel.
  British Shipbuilders can compete with other western European yards. However, European yards cannot hope to compete with yards in Japan or South Korea. There are no easy answers on the international scene. Both those countries now have huge shipbuilding industries. An idea of the size of the Japanese industry can be gained when one discovers that the Sanko order of 111 bulk carriers represents just four months' work for the Japanese industry. Japan is becoming worried about the growth of the South Korean industry.
  There is an unbridgeable gap between the prices offered by South Korean yards and those offered by western European yards. James Davis, a director of Kleinwort, Benson Ltd., spoke at a meeting of the Greenwich Forum about a visit that he and other western European industrialists made to South Korea, and about the attitudes of shipbuilding directors there. He said:
  "The best way of describing their attitude is perhaps by describing the extreme answer we got from one of them, Mr. Hong of Daewoo. He said that of course we all came from halftime Europe. That was an opening remark and we asked him what he meant by it. He told us that his men expect to work six-and- a-half days a week, unless there was a big job on, in which case they could not take all that time off … They work intensively. He said, 'the trouble is now it is a time of comparative advantage. It is Korea's turn. You had your turn in Europe. Japan has had its turn. Now it is our turn."
  The international circumstances are extremely difficult, but they will be worsened by the growth of the Republic of China as a shipbuilding nation and by the continuing growth of Brazilian shipbuilding.
  In an age of protectionism, Government intervention and subsidy, it is rubbish to talk about free markets and the freedom of international trade. The Government must defend our maritime industries with the same zeal that they display for the privatisation of public corporations and services. Much more is required than the payment of redundancy cheques to those who are forced out of what the Minister called this contracting industry.
  The continuing decline of the merchant shipbuilding industry must be halted. A depressed home market has a dreadful effect not only on the communities within which
  824
  the shipyards are situated but on industries and communities far removed from our maritime communities.
  Mr. T. W. Bewsey, director of the British Marine Equipment Council, said recently:
  "At the present moment the situation on the home market is bad and shows no sign of improving in either the short or the long-term. This is because the depressed state of the world shipping market will continue for several years and as a result the level of orders for new tonnage will continue to be very low … If the UK is to retain a merchant shipbuilding industry in the overall national interest, with particular regard to defence considerations, then the Government must continue to consider seriously what means are necessary for survival; otherwise the industries concerned will disappear, never to be replaced."
  Given the gloomy economic circumstances of shipbuilding, shipping and maritime services, the time has arrived for a Royal Commission on the British maritime industries. Such a commission could assess the present and future circumstances of our maritime industries perhaps more adequately than could a Select Committee. The idea of a Royal Commission was mooted last year by the editor of Lloyd's List, and I heartily commend the proposition to the House. I say that despite a reprimand that I received from the hon. Member for Eastleigh (Sir D. Price), who reminded me in a conversation outside the Chamber that a former Labour Prime Minister said that setting up a Royal Commission to examine an issue puts back the policy decisions on that issue by four years. I accept the hon. Gentleman's strictures, but although it is essential for the House and its Select Committees to examine the needs of our maritime industries, I believe that we also need a Royal Commission.
  The Government must also encourage the development of a buoyant home market. That is especially true of the offshore oil and gas industries. Traditional maritime industries have an important role to play in oil and gas, not only on the United Kingdom continental shelf but elsewhere. There are no easy answers, but no Government should ignore the continuing contraction in shipping and shipbuilding.
  6.35 pm
  Dr. David Clark: The Bill has a short title and when I first saw it—my right hon. Friend the Member for Glasgow, Govan (Mr. Millan) had the same impression — it seemed to be innocuous and modest. However, as the Minister of State moved the Second Reading today, it became clear that the Bill has many implications. It was almost as though the Minister had opened a can of worms. My right hon. and learned Friend the Member for Monklands, East (Mr. Smith) said that it could be inferred that the Government wished to stop redundancy payments as that would shift the burden of labour before privatisation and thus make the shipyards more attractive financially to their friends. I hope that the Under-Secretary of State will explain that to the House when he replies to the debate.
  It was staggering to hear the Minister talk about a contracting industry and then to explain, right, that he could not give the House an overall costing of the scheme because it depended upon the number of people who were made redundant. I understand the logic of that, hut the Government must have some idea of the long-term size of the British shipbuilding capability, both merchant and naval. Can the Minister give us some idea of the

  825
  manpower requirements that the Government envisage in the immediate and medium-term futures? The Minister must have those figures; or he certainly should have them.
  When we talk about redundancies, we are talking about human beings. As so often in shipbuilding debates, we talk about orders and yards and tend to forget that in those yards there are individuals. I endorse what my hon. Friend the Member for Wallsend (Mr. Garrett) said about massive payouts not applying to shipbuilding. My hon. Friend the Member for Newcastle upon Tyne, East (Mr. Brown) said that an average payment of £5,000 was not much compensation for losing one's job.
  The problems that we have heard about today from Labour Members—most of those who have spoken in the debate are Labour Members — are similar. The problems of Tyneside are echoed on Wearside, on the Clyde and on Merseyside. There is shameful unemployment in those areas, which are economic blackspots. Redundancies of 2,000 or more have a tremendous effect on communities. When a shiprepair yard in my constituency was privatised, there were massive lay-offs. I now share a travel-to-work area with my hon. Friend the Member for Jarrow (Mr. Dixon), and it gives me no pleasure to say that we experience the highest level of unemployment in England. When we hear of the further redundancies in shipbuilding on the Tyne — because many people from south Tyneside go across the river to Swan Hunter or they work in the Jarrow and Hebburn areas — we wonder how much longer our communities can survive.
  I want to press the point made by my right hon. and learned Friend the Member for Monklands, East. Is it not about time that the Government realised that it is not just individuals who are affected, vitally important though they may be? Communities are also affected. Does the Minister appreciate the loss in rateable value to communities such as south Tyneside, north Tyneside, Glasgow and Sunderland resulting from shipbuilding closures? It runs into millions of pounds, and it makes the problems of the local authorities in those shipbuilding redundancy areas even more acute.
  I know that there is the EEC scheme, but, just as the Government's shipbuilding redundancy scheme is far less generous than those operating in the mining and steel industries, so the EEC scheme is literally peanuts compared with what is offered to the coal and steel closure areas. When the Government are discussing shipbuilding redundancies, I urge them strongly to pay particular attention to the communities affected.
  I realise that the men who work in the shipbuilding industry and who perhaps are contemplating accepting redundancy have made Herculean efforts to increase productivity. We have the Ark Royal being built on the Tyne, and it is months ahead of schedule. We had the Atlantic Conveyor launched recently only a few days after the rescheduled delivery date, and the managing director and the chairman of Cunard paid tribute to the quality of the work.
  My hon. Friend the Member for Wallsend touched on a pertinent point when he reminded us that we are discussing a shipbuilding Bill concerned with redundancy at the very time when morale in the shipyards is at its lowest ebb ever. One has only to listen to people talking in the pubs and clubs of Tyneside to understand the extent
  826
  of the desperation and despondency among them. That is one reason why people are queuing up to take redundancy. It is out of sheer desperation, and it is a tragedy for the country, because those skilled men are vitally needed in our nation. If we lose their skills we shall live to regret it.
  We saw only two years ago during the Falklands crisis how men worked night and day to meet the Government's deadlines and managed to help the victory that we sought. But it was a very close run thing, and I doubt whether we could mount the same operation today. Even then we got through only by chartering Scandinavian vessels. At one time the Government were trying to buy a Danish vessel because there were not enough British vessels. That is how desperate the situation is, and that is why as a nation we cannot afford to allow these redundancies to go ahead and the shipbuilding industry to run down.
  Does the Minister not appreciate that his proposals for privatisation are the raison d'etre for the demoralisation among members of management teams as well as the work force? The proof of the pudding is in the eating, because we see it in the private yards already. Those who work in the industry see privatisation as casualisation. When they hear talk about the market place, they see it as appearing on a Monday morning and two men being selected out of 50. They see those bad days coining back again, and it is impossible to build a life and a community based on that amount of uncertainty. That is one reason why there is so much demoralisation.
  How can we get across to the Minister this point about the market? It is not the market place where labour is hired and fired. How can we get it across to him that there is no such thing as a free market in shipbuilding? Shipbuilding is concerned with strategy and with strategic decisions taken by the Government about the size of the industry. That is why I laid so much stress at the beginning of my remarks on trying to press the Government to say what they saw as the size of our shipbuilding industry. There is no such thing as a free market, and it is about time that the Government recognised that, as an island nation and a maritime power, we need not only British-owned ships to carry goods, but the facilities to build those ships.
  I make one final plea. The Government are always exhorting the entrepreneurial nature of British industry. Some of the private yards in the ship repair industry have worked very hard to get jobs. A lot of the work comes from the Soviet Union, especially in the north-east of England where there is easy access from the Baltic and the north Arctic. I understand that currently the Government are negotiating with the Soviet Union with a view to excluding Soviet vessels from the river Tyne. I have had a partial assurance from them that this will not be pursued, but I hope that the Minister will bear it in mind, look into it, and realise how important it is for our shipbuilding industry that we retain that trade with the Soviet Union.
  6.45 pm
  Mr. Don Dixon: We have had a number of shipbuilding debates since 1979, as my hon. Friend the Member for Wallsend (Mr. Garrett) reminded us. Unfortunately, they have been about either the curtailment of borrowing powers or the extension of redundancy scheme payments. It is bad when my hon. Friends have to welcome the extension of a redundancy payments scheme. However, those being thrown on the scrap heap

  827
  have a right to be cushioned financially, albeit not as well cushioned as some others being thrown out of work by the Government.
  When we discuss clause 1, we are talking about bribing people into idleness. In the Tyne and Wear area the 2,100 workers being made redundant by Swan Hunter will never work again. It is criminal that the skills of these shipyard workers, learnt over many years, should be thrown away, bearing in mind especially that we are a maritime country. In 1982–83, the number employed by British Shipbuilders fell by 22 per cent. to a low of 48,550.
  Unfortunately, I had to leave the debate for a time because the Employment Select Committee was meeting to discuss the closure of 29 skillcentres in areas such as my own, where 2,100 shipyard workers are to be thrown on to the streets. That is why I missed the speeches of the hon. Members for Gordon (Mr. Bruce) and for Eastleigh (Sir D. Price), and that of my right hon. Friend the Member for Glasgow, Govan (Mr. Millan), as well as the end of the remarks of my right hon. and learned Friend the Member for Monklands, East (Mr. Smith).
  At the beginning of his remarks my right hon. and learned Friend put his finger on this so-called innocuous Bill about the extension of redundancy payments, because he drew attention to one or two extremely important aspects of it. Those who are to be privatised will lose their redundancy payments under British Shipbuilders' redundancy scheme. The Minister tried to say that this was no different from the position of those who had been privatised before. However, as my right hon. Friend the Member for Govan reminded us, on 1 February last year I asked:
  "If Scott Lithgow is taken over by a private company will the Minister ensure that all the workers receive their full entitlement from the British Shipbuilders redundancy scheme?"
  The Minister replied:
  "I think that that assurance can be given. They will be eligible for the redundancy scheme."—[0fficial Report, 1 February 1984; Vol. 53, c. 352.]
  The Minister also said that no one previously received anything from the British Shipbuilders redundancy scheme after it had been privatised. In the same debate I made the point that Tyne Shiprepairers, which had been taken over by its directors, had received £4·2 million in a buy-out from the redundancy scheme. How does the Minister square that with his statement to the House tonight? He obviously misled the House tonight when he said that in future companies would not be dealt with any differently from those in the past. That is not true.
  Mr. Norman Lamont: As I recall, some people who were made redundant at the time of Scott Lithgow may have qualified for payment under the scheme when the company was part of British Shipbuilders, but when a company enters the private sector the redundancy payments scheme does not apply to it. As the hon. Gentleman said, it is true that in some situations where companies such as Tyne Shiprepairers have been privatised compensation has been paid, but that compensation has been paid not as of right, because there was no statutory right, but as a result of negotiations.
  When the warship yards are returned to the private sector, they are in the same position as other companies in the private sector. There may be an opportunity to negotiate compensation; there may be an opportunity for them to join schemes in those companies; there may be an opportunity for new schemes to be negotiated; but there
  828
  is no statutory right, and there never has been, with this scheme. If it were to apply to the private sector there would have had to be a specific provision in the legislation. [Interruption.] It may or may not be the case that I should have included such a provision, but Labour Members cannot claim to be surprised, because it manifestly is not there, and the position on the scheme is as it has always been.
  Mr. Dixon: The Minister says that the companies have no right. The Act implicitly says that when people leave the employment of British Shipbuilders they are entitled to the benefits of a redundancy scheme over and above the national scheme. If a firm is privatised, those people will no longer work for British Shipbuilders, and under that Act they are entitled to their redundancy scheme. That was the reason why Tyne Shiprepairers was bought out. That was the reason why that was negotiated. That was the reason why, when members of Tyne Shiprepairers accepted £2,100 as part of the buy-out from the shipbuilding redundancy scheme, they also had a guarantee of 12 months' employment with the new company. At the time the payment under the British Shipbuilders redundancy scheme worked out at about £10·7 million, compared with £4·2 million under the buy-out.
  At that time I asked the Minister what was happening to the other £6·5 million. Had the shipyard not been privatised, the Government would have had to finance British Shipbuilders to pay that money. There are rumours at the moment about pits being privatised. I wonder whether the miners working in those pits will receive redundancy payments under the mineworkers' redundancy scheme which is on the table at the present time. However, as the Minister says, that aspect can be debated in Committee.
  My hon. Friend the Member for Sunderland, North (Mr. Clay) talked about the effects of unemployment in parts of Sunderland. He referred to the fact that East End ward has an unemployment rate of 65 per cent. That is possibly true of many areas in Tyne and Wear, and probably in Scotland and Birkenhead. My hon. Friend the Member for Birkenhead (Mr. Field) told the Minister about the level of unemployment in his area. He also asked some specific questions which were reiterated by my hon. Friend the Member for Newcastle upon Tyne. East (Mr. Brown).
  My hon. Friend asked what had happened about the orders for the type 22 destroyers which had been promised. They were promised before the summer recess. They were promised again in September, November and December. When my hon. Friend the Member for South Shields (Dr. Clark) and I went to the Ministry of Defence in December, we were told that they would possibly come at the end of January. One is suspicious when such orders are held back at a time when shipbuilders are to be privatised. One wonders whether such orders are deliberately held back because the privatisation scheme is on the board.
  My hon. Friend the Member for Newcastle upon Tyne, East also mentioned the possibility of victimisation. I can give the Minister some idea of what happens in the shipbuilding industry in that regard. I was sacked from my job as a shop steward in the shipbuilding industry, and I could not get a job in that industry for a considerable time. Tory Members and Ministers talk about secondary picketing. We have heard a lot about that during the miners' strike. However, the employers do not need to put

  829
  anyone outside a gate to stop a worker going to work. They pick the phone up and tell the personnel officer not to employ a particular person under any circumstances. That is what happened to me.
  My hon. Friend the Member for Greenock and Port Glasgow (Dr. Godman) mentioned the problems and anxieties of Scott Lithgow and Clark-Kincaid. My hon. Friend the Member for South Shields mentioned redundancy pay, the level of manpower and how long we will have redundancies in the shipbuilding industries. He also mentioned another important point. Both he and I have had letters from constituents about the rumour that Russian vessels will be prohibited from using the river Tyne. Our ship repairers have always had several Russian vessels to work on. I hope that the Minister will throw some light on that rumour. We shall certainly take the matter up with the Ministry of Defence, which is possibly where the answer lies.
  We have heard during the debate about redundancies and problems in the shipbuiiding industry. If they are international problems, the Government can help out. One can find little good to say about Mr. Graham Day, the chairman of British Shipbuilders, other than that he carries out to the letter his instructions from the Government. In Shipbuildng News in December he said:
  "A number of countries operate domestic preference schemes which secure the dual objectives of sustaining a national fleet and enabling a hard pressed shipbuilding industry to restructure on the back of a workload, albeit reduced."
  He suggests there that some countries give preference to their shipbuilding industry which Britain does not. That is certainly worth quoting, coming as it does from Mr. Graham Day. It is a pity that he did not take a few more lessons from his predecessor, Sir Robert Atkinson, who used to fight the corner of British Shipbuilders. Unfortunately, Mr. Graham Day is doing what he was instructed to do—to cut the shipbuilding industry down to virtually nothing.
  As my hon. Friend the Member for Wallsend said, since 1979 shipbuilding workers have been demoralized because they have had nothing but redundancies. There was the first corporate plan from Sir Robert Atkinson, who talked about a 400,000 tonne throughput. Incidentally, that is the nearest that British Shipbuilders ever came to breaking even. The year that it had a 400,000 tonne throughput was the year that it came within £19 million of breaking even. That is the best year that British Shipbuilders has had. Now Mr. Graham Day talks about a throughput of less than 200,000 tonnes. That is the reason for the present reduction in manpower in the shipbuilding industry.
  Most of my hon. Friends who have spoken tonight belong to the Tyne and Wear area. Like me, my hon. Friends the Members for Wallsend, for South Shields and for Newcastle upon Tyne, East are concerned about that area. At the height of the shipbuilding boom 100,000 men were employed in the Tyne and Wear area, but today fewer than 12,000 work there, and that is without the present redundancies. There have been redundancies at Swan Hunter and BS(ETS). Indeed, this morning I was told that Palmers Hebburn of British Shipbuilders is to be put in moth balls. This morning the management told the shop stewards that the yard was going on to care and maintenance. A couple of years ago that yard was
  830
  employing 2,000 men. That is the scale of the unemployment in that area. Hon. Members should bear in mind that for every man who works as an assembler in the yard, another three men work in supplying the industry.
  Our area is being hit in particular because in the northern region male employment has been 25 per cent. dependent on industries such as heavy engineering, coal mining and shipbuilding. That compares with a figure of 8 per cent. for the rest of the country. Thus, with the decline in heavy engineering, the area has been badly hit. In the Jarrow and Hebburn area, male unemployment amounts to 31·3 per cent., without taking into account the present redundancies at Swan Hunter. In south Tyneside as a whole 15,529 people are unemployed, and of them 11,120 are men. That means that 29·5 per cent. of the male population of south Tyneside are out of work. Yet those people have contributed to the local budget.
  There has been a reduction in rate income, because if a shipyard closes less money goes to the local authority. Indeed, that point was raised by my hon. Friend the Member for South Shields. The young and active who take the advice of the former Secretary of State for Employment, now Secretary of State for Trade and Industry, and get on their bikes do not take the old people's homes, community centres or local authority facilities with them. Therefore, those facilities have to be provided by the remaining elderly population. That has a tremendous impact on areas such as ours.
  The task force has been given various degrees of welcome, but I am told that it is only for partnership authorities. South Tyneside, which I represent, is a programmed authority. We have as many problems as—if not more than—some of the partnership authorities. Therefore, I hope that the Minister will at least consider an extension of the areas so that the task force can take over and include some of the programmed authorities. I also hope that he will get on to the Ministry of Defence and get those type 22 destroyer orders placed as soon as possible.
  I have seen a press statement about £100 million of special aid for areas affected by the decline in the steel, shipbuilding and textile industries. Indeed, £10 million was for the shipbuilding industry. I hope that the Minister will make representations to get the amount increased. The amount of money for the Tyne and Wear area was £3·2 million, which is nothing compared to the devastation being wrought on it through the redundancies that we face.
  I shall deal now with clause 1 and the redundancy extension. The Minister gave the game away when he said that 35,000 workers had benefited from shipbuilding redundancy payments. The Government seem to feel that a worker benefits from getting the sack and being thrown on the streets, perhaps for the rest of his life. That shows what they think about unemployment. To suggest that 35,000 people have benefited from being made redundant gives us some idea of the Government's thinking on unemployment.
  The calculations for redundancy payments have not been mentioned. Both you, Mr. Deputy Speaker, and I sat on the same Committee and you will remember the free riders' charter and clause 1 of the Employment Bill 1982. The Government gave retrospective payments to all those who decided that they would not be members of trade unions in closed shops. The Government gave £2 million

  831
  retrospectively in order to compensate them. That free riders' charter calculation has now been increased from £145 to £154 per week.
  I have little to add to what my right hon. and learned Friend the Member for Monklands, East said on clause 2. The Geddes report set up the Shipbuilding Industry Board and, of course, Upper Clyde Shipbuilders received a loan. I have spoken before about the Geddes, Paton and BoozAllen reports. They were all produced when the shipbuilding industry was in private hands. To judge from what is said by Tory Members and Ministers, one would think that the shipbuilding industry had problems only when it was nationalised. When it was in private hands, the Geddes report led to the setting up of the Shipbuilding Industry Board, and that is why Upper Clyde Shipbuilders had to have that loan. When the shipbuilding industry was in private hands it was in a terrible mess, and that is one reason why the Labour Government nationalised it in 1977.
  We shall not vote against the Bill tonight. With some reservations, we welcome the fact that the shipbuilding scheme is to be extended. I hope that some of the problems and anxieties expressed by my right hon. and hon. Friends will be thrashed out in Committee. Indeed, I hope that the Minister will take them into consideration and that when we go through the nuts and bolts of the Bill some amendments will be made. But we are rewriting history when it comes to clause 2. The Government once lent money to Upper Clyde Shipbuilders because private industry had made a mess of it, yet now the Minister will hand the same shipbuilding industry over to the same people who made such a mess of it before.
  7.7 pm
  The Parliamentary Under-Secretary of State for Trade and Industry (Mr. John Butcher): Many questions have been asked during this serious and reasoned debate, and it may be convenient if I try to answer as many as I can, particularly those from Opposition Members, who have quite legitimately pursued the interests of the industry and of their constituencies. In addition, my hon. Friend the Member for Eastleigh (Sir D. Price) would like some clarification on the position of the type 22 frigates.
  The hon. Member for Jarrow (Mr. Dixon) has a constituency with a very noble history in affairs of industrial relations and in the way that it has reacted to the scourge of unemployment. He should be aware, as he no doubt is, that total aid for the northern region since 1972 stands at more than £1 billion. The aid package, in terms of regional assistance, that is going to those areas where shipbuilding is one of the predominant industries has amounted since 1979 to about £640 million.
  I hope that we can deal once and for all with the accusation that the Government are not mindful of the interests of those parts of the country that have been affected by structural unemployment, particularly in the heavy engineering sector and in the shipbuilding industry.
  Mr. Nicholas Brown rose—
  Mr. Butcher: I shall deal with the hon. Member's points in detail but I wish first to finish this observation. The interesting suggestion about the application of the task force to the area represented by the hon. Member for Jarrow will be noted carefully. He will appreciate that this idea has been discussed in the press but has yet to have
  832
  formulation in the full interdepartmental discussions which necessarily have to take place within Whitehall. I shall bring his observations to the attention of the appropriate Ministers in Departments other than the Department of Trade and Industry.
  Mr. Nicholas Brown: Will the Minister tell the House where he obtained the figures?
  Mr. Butcher: If the hon. Gentleman kept a close eye on Hansard he would have seen a question about how much regional aid had gone to the northern region since 1972. If he checks Hansard, I think that he will find the detailed data in a copy published three or four days before the Christmas recess. I shall send him the appropriate column.
  Mr. Brown: What I am asking is where the figures that were quoted in Hansard came from originally — the source of the figures.
  Mr. Butcher: The source was the records available to the DTI. It keeps records of section 7 assistance, regional selective assistance. We monitor the amount spent. If the hon. Gentleman wants to find the source of those figures within the Department of Trade and Industry I can only say that this Administration, like Labour Administrations, places explicit and implicit trust in its officials to keep the records accurately. We report faithfully the information to the House when it is requested in a parliamentary question. I cannot see the hon. Gentleman's point.
  The hon. Gentleman made three major points which were interesting in that there was a practical philosophical element in each of them. He raised yet again an issue which I thought we had dealt with comprehensively in two previous debates on industrial policy, and not least in the last debate on shipbuilding — the importance of the manufacturing sector and manufacturing industry as opposed to service sector activity. I think it is worth repeating what I said, because I did not hear any disagreement on the last occasion. If we examine manufacturing activity we find that 80 per cent. of output is internationally tradeable. By contrast, some 18 per cent. of service sector activity is internationally tradeable. Although we have to recognise the magnificent contribution that the service sector has made to job creation, with some 280,000 extra jobs being created in the service sector in the last 18 months of the recession, we must recognise also that the wealth creation engine, the core and heart of wealth creation, will always remain within manufacturing. We have to make things which are exportable in international trading circumstances.
  Mr. Brown: I agree with all that. Surely the logic of that argument supports my point and not the Minister's.
  Mr. Butcher: In that case, I am not sure what the hon. Gentleman's point is. I hope to demonstrate in my response to the detailed debate that we have not been tardy or unhelpful in the assistance given to the manufacturing sector. Certainly we have not been unhelpful to the shipbuilding industry. The House will be all too familiar with the £1 billion support for shipbuilding by this Administration in the previous Parliament and in this one. I resent bitterly the accusation that we have been prejudiced against the manufacturing sector. The hard cash figures as reported to the House disprove that theory.
  The hon. Gentleman posed legitimately a question which should exercise the House—is the shipbuilding

  833
  industry operating in a free international market? On this occasion, as on previous occasions, we have conceded that over the years a market that is decidedly not free has developed in shipbuilding and that there has been an unhelpful and, some would argue, totally unnecessary subsidy race by various shipbuilding nations to get business. Some industries and some nations are more efficient than others; therefore, they may need less recourse to subsidies. But in the main the European Community, through the intervention fund and other proposals, has had to connive in the unfortunate corrosion of the free market in shipbuilding.
  As a free market does not exist, we have tried to give our domestic industry the chance to compete in that distorted market. Therefore, the answer to the question whether the world shipbuilding industry is operating in a free market is no. The Government, recognising the reality of the situation, have to give sufficient support to domestic industry to put it back in the race.
  The hon. Gentleman obviously queries the source of our information. We can do no more than quote the data compiled accurately by those who work for the Government. He seemed to imply that we were prejudiced or were not helping sufficiently to overcome the special problems of shipbuilding communities. I repeat that £1 billion has gone to one key region and £640 million to other areas in which shipbuilding is a major element in job preservation. I hope that that shows that our spending patterns do not indicate a lack of concern.
  In regard to the observations delivered, as ever, in a serious and measured manner by the hon. Member for Wallsend (Mr. Garrett), I should have liked to offer him in this Second Reading debate the sort of assurances that he was seeking on the level of redundancy payments, but I hope that he will agree that these payments, which are not being changed either in character or in manner of compilation, are at least considerably more generous than the basic requirements in other industries. What fascinated me was that I had heard similar remarks eight or nine months ago in Durham in a working men's club in which I had the privilege to spend some time.
  There was great concern in that Club and Institute Union club about the very generous payments available to members of the National Union of Mineworkers, should they wish to become redundant. It was claimed that we were creating a two-tier work force. Those payments were genuinely resented by members of the Transport and General Workers Union. They felt that miners were being treated hyper-generously. Shipbuilding employees do not get anything like those payments. Men driving lorries delivering coal to the power stations could not expect anything other than basic redundancy payments. There is strong feeling among workers about this. The Government are being generous enough to shipbuilding workers in regard to redundancy.
  Mr. Garrett: The Minister tempts me very much to debate elitism. I shall reserve my remarks for the Committee stage, when I can prove that the elitism at the bottom end of the scale is not as important as the elitism at the top end, where civil servants and other people get excellent redundancy payments.
  Mr. Butler: Within whatever elite the hon. Member wishes to call the vanguard of the proletariat—I suppose
  834
  these days Arthur Scargill sees that as the National Union of Mineworkers — even within the various classes of working people or within what sociologists would call socio-economic groups, an elite has emerged — those who work in the mining industry. It causes resentment among other workers in industries which are more hard-pressed than mining on redundancies. We should hold on to the payments which we propose for shipbuilding employees.
  The hon. Member for Birkenhead (Mr. Field) asked a number of interesting questions. The Department does not lack sympathy for Cammell Laird or for Merseyside. The area continues to receive the maximum regional assistance backed by the Department's best efforts. Birkenhead has received £174 million in regional aid since 1979. Ministers do not prefer any one shipyard to another.
  Mr. Field: I was not asking for details of the aid going to Birkenhead. If I wanted that information, I would table a question. I was putting to the Minister the feeling in the yard about orders which are to be placed shortly. It appears that the Department is arguing against the interests of Cammell Laird. I wanted a yes or no answer.
  Mr. Butcher: No. We want the contracts to be awarded on a fair and objective basis. We want them to go to those yards which are best equipped and which can deliver on time, within the budget. The House should be familiar with those requirements. We have no preference for any shipyard. The future of Cammell Laird, like that of any other yard, depends upon the ability of the work force to deliver the goods on time.
  Mr. Field: I understand that to be part of the Government's policy, but the Government have also stressed that one of their aims is to change industrial attitudes. Some people, the Minister included, have said that attitudes have changed at Cammell Laird. Is the Minister now saying that that is of no concern to the Government when they place orders?
  Mr. Butcher: Attitudes are changing in all major shipyards. There has been a great improvement. Of course those factors are taken into consideration when we consider placing orders. Is the hon. Member for Birkenhead saying that the change of attitudes in his constituency is greater than anywhere else and that therefore the order should be placed there? Some of his hon. Friends may also assert that admirable proposition. The orders will be placed objectively, on merit, in the yards which the Ministry of Defence believes can best satisfy its contracts.
  The hon. Member for Birkenhead and the right hon. Member for Glasgow, Govan (Mr. Millan) asked about distributing sale documents to hon. Members. They asked to see copies of the warship yard documents. Those documents cannot be widely distributed, because they are not full prospectuses. It would be illegal to distribute them to members of the public. However, there is no reason why they should not be seen by hon. Members with constituency interests in warship yard privatisation. We shall write to hon. Members accordingly. One could say that that is tonight's exercise in open government.
  The hon. Member for Sunderland, North (Mr. Clay) asked a raft of questions. Before I answer them, I shall deal with Swan Hunter and Vosper Thornycroft. British Shipbuilders' decision on redundancies is the unfortunate

  835
  reflection of the declining workloads in those yards and the continuing failure to obtain export orders. It is in no way connected with privatisation. British Shipbuilders would have had to declare the redundancies even if the warship yards had not been privatised. The decision makes no assumption about where the orders for the next type 22 frigates will be placed.
  The redundancies at both yards will follow a progressive rundown pattern. At Swan Hunter, employment levels will fall by 2,100, to 5,250, by the end of February 1985. At Vosper Thornycroft, employment will be down by 790 to 3,600 by the end of April 1985. British Shipbuilders will, of course, try to achieve as many as possible of the redundancies by voluntary means, including transfers and retraining for other jobs. The hon. Member for Newcastle upon Tyne, East (Mr. Brown) asked about that.
  Mr. Brown rose—
  Mr. Butcher: I must press on, so I ask that the hon. Member for Newcastle upon Tyne, East be the last Opposition Member to intervene.
  Mr. Nicholas Brown: Can the Minister explain why the Government have delayed placing the orders for the type 22?
  Mr. Butcher: If the hon. Gentleman will contain himself for a further three or four minutes, I shall deal with that in my own main remarks instead of in this question and answer session.
  The right hon. and learned Member for Monklands, East (Mr. Smith) raised the spectre of a plot to ease people out of the industry in order to fatten the balance sheets of the industry for denationalisation. It is legitimate for Opposition Members to probe and ask questions of the Government. That is their time-honoured role. However, the right hon. and learned Gentleman indulged in scaremongering. By putting a warped interpretation on the details of this innocuous Bill he hoped to raise a spectre. There is no reason at present to believe that British Shipbuilders will need to declare deck-clearing redundancies in the warship yards. Redundancies, including those recently announced at Swan Hunter and Vosper Thornycroft, are caused by the absence of orders.
  The right hon. and learned Gentleman also raised fears about the position of those in the warship yards as privatisation approaches. He said that employees would have an option to take redundancy before privatisation and that they would rush to do that. That is nonsense. Employees can take redundancy only when volunteers are called for. Employees cannot take advantage of redundancy if it is not offered.
  The right hon. and learned Gentleman asked whether British Shipbuilders' employees would be worse off after 1986. There is no reason to suppose that they will. Employees will negotiate terms with the management and I presume that they will aim to equal or better the present terms. We cannot say tonight what the outcome of negotiations will be. As elsewhere in industry, the outcome will be the result of negotiation. We shall be asking British Shipbuilders and Harland and Wolff to set the negotiations in hand in good time.
  Mr. John Smith: Does the Minister accept that employees in British Shipbuilders must be worse off after 1986 because they will not have the guarantee of the
  836
  scheme which will be stopped in 1986? The Minister has accused me of raising false fears about the future of the shipbuilding industry. Can he guarantee that no redundancies will be declared prior to privatisation in any of the yards which are to be privatised? In the absence of any solid guarantee from the Minister, I shall persist in making the allegation which I was entitled to make.
  Mr. Butcher: Does not the right hon. and learned Gentleman agree that, if he were at the Dispatch Box, he could not give that guarantee? He has been in the House and in high office long enough to know that it is impossible to give such a guarantee. No Labour Minister could have done it, and no Conservative Minister can do it. We cannot look into a crystal ball and know now what the order position will be. However, we can say that we shall encourage British Shipbuilders to come to its arrangements by negotiation with the work force for whatever scheme it wishes to see continued after the deadline for this scheme. That is a perfectly reasonable and legitimate proposition to place before the House. No doubt Opposition Members will wish to test it in Committee when we have more detailed debates on this small Bill.
  With regard to extending the shipbuilding redundancy payments scheme beyond 1986, I hope that Opposition Members will deploy their arguments later, but tonight I hope that I can assure hon. Members on both sides of the House that there is no plot to produce a flood of redundancies against any time scale and that, as ever, redundancies — those sad decisions — are made predominantly in the light of the position of order books, the health of the site and its objectives for the future.
  What about the right hon. and learned Gentleman's point about fairness to the private sector? Frankly, I found it particularly galling. It is strange that he should take that line when it was his Administration who decided in the first place that there would not be provision for the private sector. It has not been a mark of Labour party concern in the past to see the full-blooded health of private sector competitors to publicly owned industries. However, when the scheme ends, there will be full equality between the public sector and the private sector. There is pressure from some of my hon. Friends to bring about that equality at a much earlier date. It will happen, and it will happen because we shall have a rationalised industry on which we can consolidate, hoping that the recession in shipbuilding orders will come to an end.
  The right hon. Member for Govan referred to the intervention fund. As the House knows, on 2 November the Industry Council agreed to the extension for a further two years, until the end of 1986, of the fifth directive on aid to shipbuilding. That means that we have overcome a major obstacle to our efforts to secure the Commission's approval to an enhancement of the intervention fund regime. However, we could not reach a satisfactory agreement with the outgoing Commission on our application to increase the level of intervention fund support, so my hon. Friend the Minister of State will soon be knocking on the door of the new Commissioners to re-emphasise our reasonable and sensible proposals.
  Two hon. Members referred to the type 22 frigates in a slightly different context. I say again to the House that my right hon. Friend the Secretary of State for Defence is considering the tenders for those vessels and hopes to announce his decisions shortly. We fully recognise the importance of those orders to the three contending yards

  837
  —Cammell Laird, Swan Hunter and Vosper Thornycroft. We equally recognise the concern in each at the time that it has taken to reach a decision, but it is essential that in reaching it we take fully into account all the factors, including the requirements of the Navy, the cost to the taxpayer, the performance of the yards and their need for work. No doubt the factor mentioned by my hon. Friend the Member for Eastleigh will be uppermost in the minds of all three yards. Of course we welcome the dramatic improvement in the atmosphere and the sense of responsibility in Cammell Laird, but we cannot tell the House tonight the precise date on which that decision will be made, although it will be shortly.
  Mr. Nicholas Brown: We must be clear about this matter. Is the Minister telling the House that the decision on where the orders for those two type 22s are placed will not be based solely on commercial considerations?
  Mr. Butcher: The decision will be based on the judgment of the Secretary of State for Defence of the ability of the yards to complete those ships on spec, on time and within the contract price. In other words, it will be an objective decision on merit, and on commercial grounds, if the hon. Gentleman wishes to call it that.
  At long last, I come to the raft of questions raised by the hon. Member for Sunderland, North. He had the courtesy to write to my hon. Friend the Minister of State requesting that the closure of the BS(ETS) manufacturing facility be postponed for three months while the current investigation into the alternatives to closure is completed. My hon. Friend replied that, while that was primarily a management matter for British Shipbuilders, he had looked into the position. He assured the hon. Gentleman that only those assets that British Shipbuilders needed to keep for its Wallsend site would be removed from BS(ETS), that British Shipbuilders intended to sell the unit as a whole if a buyer could be found, and that closure would not seriously prejudice the chances of a new operation starting up there. The House will agree that British Shipbuilders is going out of its way to be as helpful as possible on the issue and is acting with a judicious blend of commercial and social responsibility.
  The hon. Gentleman also referred to the development of the Doxford engine and said that there was a recent suggestion in Lloyd's List that British Shipbuilders is secretly continuing development work on the engine. I am assured by the corporation that that report is wrong. Work on the new engine stopped 18 months ago. It was clear that there was insufficient demand to justify the investment, and British Shipbuilders tried to interest private sector companies in sharing the risk or taking over the work. I regret to inform the House that no one was prepared to do so.
  I refer to the general question of the future of BS(ETS). We all naturally regret the closure of the crankshaft and engine-building operation and the redundancies that that has meant, but those were strictly commercial decisions that were forced on British Shipbuilders. The investment in the crankshaft facility was, with hindsight, an error of commercial judgment on the part of management at the time. British Shipbuilders has never achieved, nor is it likely to achieve, the levels of engine throughput that would justify such a facility, and the only sensible thing to do was to close it and, in its view, stop throwing good
  838
  money after bad. I know that that will seem a harsh observation to the hon. Member for Sunderland, North, but those are the realities as advised to us before the debate.
  I am sure that the hon. Gentleman will draw some encouragement from the interest shown by Tyne and Wear county council. Since the decisions were made several parties, including the hon. Gentleman and the county council, have been active in seeking support and funds to enable all or part of BS(ETS) to continue. British Shipbuilders is extending what help it can to the advisers acting for the group in evaluating the possibilities. I hope that something will emerge from that approach, but I also hope that it will be a commercial solution with a long-term future and not an uncommercial rescue operation funded solely by the ratepayers of Tyne and Wear.
  Mr. Clay: Does not the Minister accept that if those efforts, which he recognises, are to have any chance of coming to fruition, the work force must still be there? The workers are capable of developing the works in the way that various companies might want to develop them. It is not true that British Shipbuilders is assisting. It has taken a long time to get the Department of Trade and Industry and British Shipbuilders to take any interest in the approaches that have been made. There has been little co-operation, and it does not help potential buyers if the workers who are left are being either threatened or bribed out of the works, and if British Shipbuilders' management seems to have an interest in nothng but closing the works. The picture that the Minister presents of the interest being shown by companies is true, but the picture of co-operation that he is presenting is not.
  Mr. Butcher: I shall have to agree to differ on that point. It would appear from the level of activity that is reported to the Department that genuine attempts have been made to resolve the problem, but hard commercial facts have intervened. That particular site apparently cannot obtain the amount of business required for either existing or future management to survive.
  Mr. Clay rose—
  Mr. Butcher: I must press on.
  I should like to deal with the hon. Gentleman's fifth question, about the Ethiopian order. I gave an undertaking to write to him personally, and I shall discharge it as soon as I can. I can say tonight that British Shipbuilders is proceeding as quickly as possible to put together a financial package acceptable to the customer for an order for two general-purpose cargo vessels from Ethiopia, and if successful it would go to Austin and Pickersgill.
  British Shipbuilders is also pursuing a number of other prospects for the yard, but I am bound to say that, in view of Ethiopia's economic position, export credits in respect of that country present certain difficulties. With my Department's support, however, British Shipbuilders has identified arrangements which could offer means of resolving the problems. British Shipbuilders is pursuing that matter urgently.
  There are three options for St. Helena—an SD14, a small ship or continued use of the existing ship. I regret to inform the House that, contrary to the views that were put forward in our recent debate on shipbuilding, it is not just a question of another SD14 being ordered or not, or

  839
  of any particular time scale. There are as yet unresolved options. My right hon. Friend the Minister for Overseas Development is considering these options.
  I appreciate the urgent need for orders for Austin and Pickersgill, but of equal importance to St. Helena is a decision which will suit its requirements. Nevertheless, I shall continue to press the urgency of the matter upon my right hon. Friend.
  The proposal to extend the shipbuilding redundancy payments scheme embodied in the Bill—
  Mr. Millan: I asked about the Turkish order for Govan Shipbuilders. I hope that the Minister can give an assurance that, if necessary, the Government stand ready to achieve that order for Govan Shipbuilders.
  Mr. Butcher: The short answer is yes.
  The Bill should have the support of both sides of the House. It is, to use my hon. Friend's words, an innocuous Bill. In effect, it continues a policy launched by Opposition Members. I hope, therefore, that the Bill will receive the support of the House.
  Question put and agreed to.
  Bill accordingly read a Second time, and committed to a Standing Committee pursuant to Standing Order No. 42 (Committal of Bills).

SHIPBUILDING BILL [MONEY]
Queen's Recommendation having been signified—
Resolved,
That, for the purposes of any Act resulting from the Shipbuilding Bill, it is expedient to authorise—

(a) any increase in sums payable out of money provided by Parliament under any other enactment attributable to extending the period in respect of which schemes under the Shipbuilding (Redundancy Payments) Act 1978 have effect from eight years to nine years and six months, and

(b) the extinguishment of all outstanding liabilities in respect of the loan made by the Shipbuilding Industry Board to Upper Clyde Shipbuilders Limited under section 4 of the Shipbuilding Industry Act 1967.—[Mr. Lang.]

New Towns and Urban Development Corporations Bill
As amended (in the Standing Committee), considered.
New Towns and Urban Development Corporations Bill
  New Clause 1

    UNDERTAKINGS ON DISPOSAL
    'Where the Commission disposes of land which is or is likely to be used for commercial or industrial purposes:

    (1) It shall obtain from the transferee and its successors in title an undertaking that the transferee shall:

    (a) act reasonably and fairly towards any person who is a tenant of such land; and

    (b) That in particular the transferee will not:

    (i) seek to enforce any covenant to repair where the repair involves the reparation of an inherent defect in the construction of the building erected by the Commission or its predecessor in title;

    (ii) impose or enforce any rent review clause in such a way as to demand a greater amount of rent than would be awarded by a court on the renewal of lease under Part II of the Landlord and Tenant Act 1954.

    (iii) enforce any liability against an original lessee who has assigned his interest with the consent of the reversioner;

    (iv) unreasonably refuse consent for alterations or a change of user;

    (v) seek any new direct covenant from an assignee as a condition of a licence to assign;

    (vi) seek from any tenant an undertaking to be responsible for the lessor's costs whether a matter proceeds to completion or not.

    (2) It shall first offer to dispose of the land to the tenant.'.

    —[Mr. John Fraser.]
    Brought up, and read the First time.
    7.42 pm
    Mr. John Fraser: I beg to move, That the clause be read a Second time.
    This Administration's aim is to achieve the naked state. When I say "naked state", I do not mean something that is like the Garden of Eden. I mean the naked state that is more appropriate to the Government's lack of any sense of shame. I mean it in the sense that it is stripped of any public assets. The Bill is part of a striptease process, because it facilitates the disposal by the Commission for the New Towns of its public assets.
    The new clause addresses itself to the way in which the Commission for the New Towns disposes of its industrial and commercial land and to whom. One great difference between public and private ownership is accountability. If the Commission for the New Towns, or any other public landowner, abuses its position or power it can ultimately be called to account in the House of Commons, it can be examined by a Select Committee, and Ministers can be questioned and have to justify their decisions to the House of Commons. A local authority has to justify its decision to its electors. However, a private owner—the Bill talks about handing over commercial land to private owners—of commercial, industrial or residential land is under no obligation to consider any kind of public accountability. His obligations are towards his shareholders or investors and not to the tenant, the community or any wider industrial or commercial interests.
    A good example of that point is St. George's hospital. When St. George's hospital at Hyde park corner was

    841
    owned by the National Health Service, we could ask questions in the House about the use of that land and its value to the community. When the lease lapsed and it went into the hands of the Duke of Westminster and the Grosvenor estate, there was no longer any opportunity for Members to ask in the House about a valuable public asset in the centre of London which remains empty and unused. That is a good example of the difference between public accountability and private ownership. The lack of accountability of the private landlord and the institutional investor needs to be counterbalanced by legal obligations.
    There are three dangers inherent in the Commission for the New Towns handing over its commercial land to private hands. First, there is the danger that properties will be sold over the heads of those tenants who wish to buy. The Government are in favour of the right to buy for residential tenants. We shall not go into that issue this evening. I am in favour, as are many other hon. Members, of the right of the commercial tenant, whether he is a small shopkeeper, a factory owner or large institution, to have the first offer to buy his reversion from the Commission for the New Towns before the land is sold to a property company or anyone else.
    If it is the judgment of the commercial tenant that his business or the production of goods or services is better served by the industrial or service producer owning the freehold, I believe that his judgment should be paramount, provided that he can find the money and pay the market value, and that there is no loss to public funds. He should have first option of buying his reversion before it passes into any private landlord's hands. Part of the new clause deals with that issue.
    The country's future does not lie in property companies owning land; it lies in the production of wealth by way of goods and services. If the private tenant, whether he is a small shopkeeper, industrialist, professional or provider of services, wants to buy and believes that that is in the interests of production, he should be allowed to exercise that right.
    Mr. Warren Hawksley: I do not see anything in the new clause to say that the sale should be at market value. Perhaps we can have clarification of how the valuation should be arrived at for a tenant to purchase.
    Mr. Fraser: I thought for a moment that the hon. Gentleman was afraid that the Government might do another British Telecom with the commission's land. It is implicit in the new clause that the land will be sold at market value. There is no deviation from that general principle.
    If the commercial tenant wishes to be free of the tedious supervision, restrictions and extraction of fees, charges and rent by his landlord, he should have the opportunity to buy his reversion. If a commercial tenant in a new town wants a private landlord off his back, and if he is prepared to pay good money for that purpose, he should be allowed to do so. I hope that when he replies to the debate the Minister will give an undertaking—this matter can be achieved by an undertaking—that he will require the commission, before it disposes of its commercial land assets, to give first offer at market value to the commercial tenants who occupy the land. That would deal with the danger of the land being sold over the heads of private tenants.
    842
    There is a second danger inherent in the sale of new towns land. There is a risk that new towns could become private company towns, with one or two private landlords only wielding monopolistic powers. Once again the Minister could deal with that problem by giving an undertaking that under no circumstances will a few private landlords be allowed to purchase the commercial assets of any new town.
    We understand from a cutting from the Birmingham Evening Mail of 28 December 1984 that the Government have prevented or persuaded Redditch development corporation not to sell its commercial assets to one or two companies only. There is a fear that a great many commercial assets could be put into the hands of one or two small property companies. I hope that the Minister will give an undertaking that that danger will be avoided.
    Mr. Eric Forth: The hon. Gentleman may not be aware that Redditch is in my constituency and that I have taken a close interest in the matter to which he has referred. The Government's position, as I understand it, is that there is no objection in principle to the disposal of assets at an acceptable price and valuation to one, two or however many bidders. It is up to the individual bidders to make acceptable, reasonable and fair bids for assets in new towns for them to be accepted. Therefore, I do not believe that the result of the transaction referred to by the hon. Gentleman is as he suggested.
    Mr. Fraser: If that is not the case, I am giving too much credit to the Government. There ought to be other considerations, apart from price. It is wrong that the predominant amount of land in a new town should be in the hands of one or two private companies. I am not in favour, in principle, of selling off the land, but if it is to be sold it is wrong that there should be a single, private, unaccountable company controlling the commercial land in that area. It would be very much better, if the land is to be sold, for the Commission for the New Towns to wait for bids for different parcels of land, so that there is at least a variety of private landlords and some degree of choice as between one commercial letting and another. It should not be put into the hands of one single estate. One knows of the risk of abuse which has arisen in the past as a result of large land ownerships by, for example, the Church Commissioners or the Grosvenor estate.
    Mr. Forth: May I also clarify this point. In Redditch, the example which has been taken, the shopping centre has already been disposed of at a fair and agreed price to a different set of landlords. The development corporation has had a disposals programme under way for many years. Large parts of the town are already owned by many different holders. I ask the hon. Member to clarify how he defines the parameters of what he is suggesting—one, or a few, or not too many, the whole town or part of the town. I do not believe that what the hon. Gentleman says has any meaning, because Redditch is a good example of the approach which he has suggested.
    Mr. Fraser: In such a short space of time I cannot lay down a universal rule, but what I am arguing is that there should not be a sale by the Commission for the New Towns of the land in any new town to a small number of landlords. If the hon. Gentleman says that in Redditch there is a wide variety of landlords, one welcomes that, but

    843
    what one is trying to do is to continue to have a choice and, if it exists, some degree of competition among the commercial landlords. That is the point that I am making. I believe that our future lies in having, not a nation of landlords, but a nation of people who are producing goods.
    I deal next with the third danger that flows from the disposal of lands by the Commission for the New Towns. This is the way in which commercial tenants will be exposed to the abuse of power inherent in ownership by large property companies, including the insurance companies, investment trusts and other trust funds — what I call, in shorthand terms, the institutional landlord. The new clause would protect tenants from some abuses by institutional landlords. I believe that the balance between the commercial landlord and the commercial tenant is unfairly weighted in favour of the landlord and that landlords are sometimes—though not universally so—arrogant and insensitive and abuse the imbalance of power which exists between an institutional landlord and a commercial tenant. Incidentally, I am not dealing with the transfer of residential land which would normally be passed to local authorities.
    The whole purpose of an intitutional, commercial landlord is to squeeze every possible penny which he can get out of his tenant. The process of production has nothing very much to do with the commercial landlord. Indeed, people could go to shareholders' meetings or to meetings of a pension fund and complain that the institutional landlord had not extracted the last possible advantage out of his tenants. That is the whole purpose of his existence. A landlord could be accused of dereliction of duty by not extracting the greatest amount that he could get from his tenants.
    I believe it is wrong that institutions in Britain prefer to invest only in the safest and most secure factor of production, instead of putting their money into all factors of production. We see more and more money going into the ownership of land and buildings, instead of the institutions taking the whole spread of risks involved in the production of goods and services.
    The new clause tries to deal with some of the abuses, which, in my view, are on the increase. For instance, it will impose upon an institutional landlord or upon anybody who acquires land from the Commission for the New Towns the duty to act fairly and reasonably towards any tenant of that land. I believe that that ought to be the overriding obligation of a landlord. He needs a return on his capital, but he ought to have regard to general standards of fairness and equity as between the landlord and the tenant. Therefore, there should not be a fastidious enforcement of repairing covenants, which often amount to little more than a surveyor's bonanza to obtain money out of the tenant of commercial premises.
    Secondly, when the Commission for the New Towns sells its commercial land it should obtain an undertaking from the purchaser not to seek to enforce any covenant to repair where the repair involves reparation of an inherent defect. Let me give the House an idea of the abuses that take place. There have been a number of cases where a commercial landlord has built office buildings or other industrial buildings with external cladding, so the reponsibility for the erection of the building is solely that of the institutional landlord. The premises are then let on a full repairing lease to a commercial tenant. After a while the cladding begins to fall off. Sometimes the cost of reparation will amount to millions of pounds, yet the
    844
    courts have decided that because of the way in which our property law works the obligation to repair belongs not to the landlord who built an inherently unstable structure but to the tenant.
    There have been other cases where institutional landlords have erected buildings with unsafe heating systems. They have contained asbestos fibres. Despite the fact that the landlord has not delivered the goods, the consequences of that failure are then visited upon the tenant. I feel strongly about this, because I assisted the passage through the House of what is now the Unfair Contract Terms Act 1977. Under that Act, if one is dealing with goods rather than with land and buildings, one has to deliver one's promise. It is not possible, with some limitations, to contract out of one's basic liability that the goods supplied should be of merchantable quality and reasonably fit for the purpose for which they are required.
    With landlords, it is a different matter. Institutional landlords—indeed, landlords generally—have escaped almost entirely from their obligations, without tenants having any recourse to law. As between those who are trying to produce goods or services in this country and who are having a pretty hard time of it during a world recession, and those who have a vast amount of money to invest in reversions to industrial properties, the balance of advantage ought to lie with the tenant who takes the risk rather than with the landlord who takes very little risk. The most extreme case is the one where the landlord is responsible for an inherent defect in a building and yet visits the consequences of his own neglect upon the tenant. Part of the new clause would prevent that from happening—at any rate in those cases where property had been acquired from the commission.
    Another abuse is when a landlord introduces a rent review clause into a commercial lease. Even though the lease may have only three or four years to run at the time of the rent review, the landlord insists upon having the rent fixed by an arbitrator on the assumption that the period of the lease will be 21 years, whereas in reality the unexpired period of the lease is only three or four years. When the lease comes to its complete end, the tenant is able, by way of arbitration, to go to the county court to have the rent fixed at a fair market value under the Landlord and Tenant Act 1954. I see no reason why rent review clauses as they are now being developed should circumvent the will of the House as laid down in the Landlord and Tenant Act 1954. That is the reason for a further limb of the new clause.
    Another unfair abuse, is the visiting of a liability upon an original lessee. For example, there may be a small business man who, perhaps 20 years ago, took a workshop on an industrial estate on a 21-year lease and set up in business as a small business man, and was successful. As a result of that success, perhaps after three or four years, he assigned his lease to another industrialist and went into bigger premises because his business had grown. Yet 21 years later, if the final occupant of the premises defaults on his obligations, either by non-payment of rent or by failure to repair, the liability that accrues 21 years after the lease was granted and 17 years after the original lessee has left the building can nevertheless be visited on the original lessee. That is an unfair balance between the landlord and the tenant.
    The rule that an original lessee is liable throughout the whole lease for payment of rent and observance of

    845
    performance of the covenants should be swept away. We have an opportunity to do that at least in respect of land that is disposed of by the commission.
    8 pm
    In a society where industrial processes are changing and public taste changes more rapidly than ever, there is no reason why a landlord should unreasonably refuse a change of use or an alteration to premises. There might be justifiable reasons, but if a man who has been manufacturing, say, manual calculating machines finds that the market for them has declined and he wants to develop another product, there is no reason why the institutional landlord should be able to hold him to ransom and demand a premium as a condition of agreeing to a change of use of the premises or the making of an alteration.
    There is also no reason why there should be a bonanza in professional fees following licences to assign becoming unduly lengthy and fees being demanded from tenants who are allowed to assign leases.
    Those are all general abuses and I should like to see all of them removed. We should right the balance between the commercial tenant and the commercial landlord.
    At least we can deal with some of the abuses in the sale of public land covered by the Bill, where the Government have the power to set a higher standard. If the Government reject the new clause, they will show that their sympathies lie not with commercial tenants or those who are trying to innovate and produce to increase the wealth of the country, but with the commercial landlords who play a much smaller part in the process of production than do those who have the hard job of paying the rent and trying to run a business.
    The Minister for Housing and Construction (Mr. Ian Gow): It may be convenient if I comment first on what the hon. Member for Norwood (Mr. Fraser) said about Redditch. He was correct in saying that the Government have decided that the sale that had been suggested should not be proceeded with in the way proposed.
    My hon. Friend the Under-Secretary of State for the Environment wrote to the chairman of the Redditch development corporation on 13 December:
    "The Government attaches great importance to ensuring that tenants have the opportunity to buy the property which they rent … in spite of what the prospective purchasers said, a risk must remain that this opportunity would be less than would be offered by an agency under direct Government control."
    I also remind the House of what my hon. Friend said on Second Reading. I repeat the assurance that he gave:
    "there are several safeguards for which Ministers would look before they gave their consent. For example, existing tenants of industrial and commercial property would want to continue to have good opportunities to buy their premises. We would insist on that."
    The hon. Member for Norwood expressed anxiety about the possibility of a single purchaser being able to acquire substantial blocks of property from the commission. That has not happened. Since 1979, about £500 million of commercial and industrial assets have been sold. About £300 million of the sales were made by the commission and the other £200 million were made by the development corporations. Those sales have involved many individual transactions. The £50 million realised by
    846
    the commission in 1983–84 was the product of about 180 separate sales, two thirds of which were to sitting tenants or other local interests. Five of the sales were to consortia of tenants, involving about 50 tenants.
    The hon. Member for Norwood will have read the report of the commission for 1983–84 which said that if properties are to be offered to the investment market, the commissioners, as a matter of policy, ensure that their tenants are informed three months in advance, with an indication of the approximate sum expected by the commission's agents, so that they have a reasonable opportunity to negotiate finance or consortium arrangements and to seek to reach agreement with the commission.
    We are bringing into the property market the forces of a true market place. On Second Reading, Opposition Members criticised my phrase
    "magic of the market place"—[Official Report, 20 November 1984, Vol. 68, c. 163–230.]
    but it is that magic, within the framework of the general law, which will provide the best protection for present tenants of the commission. I repeat that the Government have required the commission to give tenants the first opportunity to buy the freehold of their properties. Alternatively, they can remain as tenants under existing leases, and if they remain as tenants and the freehold is sold, the landlord will have a clear incentive to continue to let on reasonable and fair terms. The investor will want to ensure that his investment keeps its value. Much of the value depends on having a thriving tenant who is able and willing to pay the rent. No purchaser wants to buy a series of law suits with unwilling tenants. Therefore, it is in the purchaser's interests to make sure that the tenant receives fair treatment.
    The intention of the new clause is misconceived. Rather than attempt to fetter the discretion of the commission in realising the assets, we should recognise that the general law on landlords and commercial tenants, and the forces of the market, apply in new towns as much as they do elsewhere. There is no reason to single out former tenants of the Commission for the New Towns for special treatment.
    The new clause ignores the truth that every tenancy is the result of a separate commercial negotiation. The lease records the bargain struck by the two parties in the light of all the circumstances. Neither party can alter that agreement unilaterally. If the commission sells a property subject to a lease, the tenant remains entitled to the protection of the lease into which he has entered or to which he is the assignee. In particular, he will be able to take advantage of independent arbitration to settle the level of any rent review that cannot be agreed, since that is the normal basis of the commission's leases. It is not sensible to attempt to rewrite those leases with a few words of statute, because the leases reflect a vast variety of circumstances.
    Even if there were no other objection to the new clause, it would not achieve the objective of its supporters. My hon. Friend the Member for Mid-Worcestershire (Mr. Forth) mentioned subsection (2):
    "It shall first offer to dispose of the land to the tenant."
    There is nothing there about open market value. The clause also says:
    "the transferee shall … act reasonably and fairly towards any person who is a tenant of such land".

    847
    That is an invitation — which the hon. Member for Norwood and I should not be the first to complain about—for more work to be put the way of the lawyers.
    The new clause would require the commission to obtain undertakings from any purchasers of property. No doubt the commission would be able to enforce such undertakings, at least against the original purchaser, but tenants would not be parties to the agreement. Consequently, their locus to enforce such undertakings would be extremely doubtful. We should not change the normal law simply in the case of purchasers from the commission.
    For those reasons, I cannot advise the House to accept the new clause.
    Question put and negatived.

  Clause 12

    FINANCIAL LIMIT FOR URBAN DEVELOPMENT CORPORATION
    Mr. Peter Shore: I beg to move amendment No. 1, in page 13, line 16, leave out '"£600 million"' and insert '"£550 million"'.
    I tabled amendment No. 1 for two reasons. First, it gives us an opportuniy to focus our attention upon a somewhat anomalous part of the Bill—the single clause that deals with the urban development corporations, of which there are only two. I am myself concerned mainly with the London Docklands development corporation. Within the wider framework of a Bill dealing with the new towns commission, the urban development corporations might well be overlooked. That would be a great mistake. It is right for us to seize any opportunities to consider how the urban development corporations are carrying out their redevelopment functions in the London and Liverpool docklands.
    Secondly, by changing the figure from £600 million to £550 million we would bring forward the time when it would be necessary for the Secretary of State to seek an affirmative resolution in order to gain for the UDCs the additional sums of money that they will require.
    In connection with accountability and the affairs of the UDCs, we should remember that the LDDC, at least, is quite distinct from all the previous new town, expanded town and other corporations set up in the past, especially in that the proposal was from the beginning strongly opposed by the local councils. No agreement was worked out with them, as it was in the case of Peterborough, Northampton or other established towns on to which new town corporations were grafted. Nor can the corporations be compared in any sense with the new town corporations set up in earlier post-war years on green field sites. There is still a strong feeling of resentment within the communities, and people are anxious that Parliament should exercise its powers of scrutiny, whenever possible, over the affairs of the LDDC. This is such an opportunity.
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    I shall not consider the whole range of the LDDC's work. Its annual report was published last June or July and gave some account—though it was a glossy document designed with public relations in mind—of what the corporation had been up to during the preceding year.
    There are some developments that I welcome. I welcome the advance, in agreement with the GLC,
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    towards a light transit system which would greatly improve communications in an area that suffers badly from lack of communications. I am thinking not just of my own borough of Tower Hamlets, but of the adjacent boroughs of Newham and of Southwark and Lewisham to the south.
    We would all welcome that development, but other areas are more controversial. For instance, there is the proposed development of the STOLport. We await the result of the inquiry. The findings were set before the Secretary of State some months ago, but I understand that he has subsequently asked certain questions of the parties concerned. Whether by doing so he has made it necessary to reopen the inquiry is a matter on which I look forward to hearing the views of the Minister.
    The area of LDDC policy that is of the greatest concern to my constituents in Tower Hamlets and above all to people living in the dock area and Wapping is housing in which there has been a truly remarkable development. New town or development corporations have been set up in many areas, and it is generally been not only the stated claim but the generally accepted view that in promoting house building the corporations were serving the needs of local people. In the case of Wapping, such a claim would have to be seriously scrutinised. It may well be—the situation is almost unique—that of the many attractive and desirable houses that will be built virtually none will be available for the people who live in Wapping or in the rest of Tower Hamlets. The reason is not that people do not wish to buy the houses — which are, of course, overwhelmingly, built for sale. It is that they cannot afford to buy them at the prices that will be demanded.
    I have engaged in lengthy arguments with the LDDC's chairman and chief executive about their policy of building houses for sale in Wapping. As a result of pressure brought to bear upon the LDDC by myself and others, it conducted a survey, and a report entitled "Living in Wapping" was published in July 1984. In response to my request that the LDDC should attempt to find out whether people in Wapping would be able to buy the houses which it proposed to build—especially in the Western dock area, the first large tranche of new house building—it carried out a substantial survey. It discovered that 70 per cent. of the people in Wapping would like to buy if they could. Of those, some 47 per cent. would be able to buy if they did not have to pay more than £150 a month. If they had to pay as much as £250 a month in mortgage and rate payments—in that area of Wapping, rent and rates are aggregated together—only 6 per cent. would be able to buy.
    One has only to consider the cost of house building in dockland and the price of houses there to see that the people are faced with a major problem.
    Mrs. Elaine Kellett-Bowman: Will the right hon. Gentleman elucidate one point? How can he say that, in private accommodation, rent and rates are aggregated? If the development is to be a private one, why are those amounts aggregated? If sky-high rates are imposed by an inefficient local authority, of course costs will be high.
    Mr. Shore: I merely aggregated the amount in the terms of a survey of affordability that takes account of rate payments as well as payments for servicing the mortgage. As today there is a tendency to pay the rent and rates together, the sums were taken together. That is simply a point of explanation.

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    That is the background against which one must consider the prices of the houses being built in Western dock. Although the corporation has done its best to maintain that people are queuing up to buy houses in Beckton and Surrey docks — my hon. Friend the Member for Newham, South (Mr. Spearing) may wish to comment on that—the corporation admits that in Wapping the situation will be a damn sight more difficult. According to the annual report,
    "because of its location immediately to the east and within walking distance of the City, the corporation has always known that prices in Wapping would be higher and, without action, probably out of the range of the sort of local people who have been buying elsewhere".
    It can say that again about the houses being out of range.
    It is unlikely that a house will be built in the Western dock area for less than £40,000. The corporation uses that figure in its annual report. I am informed that someone who wanted to get a mortgage for £40,000 would probably have to pay 11·75 per cent. interest. Allowing for a tax rebate, that would mean monthly payments of about £330 over a 25-year term. I remind the House that only 6 per cent. of those people who wanted to buy a house in the area are able to afford £250 a month. That should be compared with the £330 a month required to service a mortgage of £40,000. I fear therefore that very few people from Wapping or Tower Hamlets will be able to buy the houses.
    That is a scandal and a tragedy. When the docks moved down the river towards Tilbury and beyond and the old enclosed dock systems became available for other uses, the borough of Tower Hamlets and other dockland boroughs were presented with a historic opportunity to deal with some of the worst housing problems in Britain. At last land was becoming available. We had every hope and expectation that such problems would be solved by using a substantial part of the land that had become free. However, we are still saddled with a serious, and increasing, housing problem while the free housing land has been transferred by vesting orders to the LDDC, which is knowingly building houses at prices which are beyond the reach of the people of the borough.
    The extra sums of money which are being made available to the development corporations in London and Liverpool contrast most unfavourably with the continued reduction in the residual housing investment programme money for building houses for rent, for repairs and for modernisation which is available to borough councils. At constant prices, the housing investment programme has fallen in the past five years from £20 million a year to £11·6 million a year in Tower Hamlets. That reduction is occurring when there are large numbers of homeless families, often Bengali, who must live in bed and breakfast accommodation and seedy hotels in west London or Islington. We also have vast new problems of disrepair in our housing stock such as have been revealed by the discovery of deterioration in Ronan Point type buildings in Tower Hamlets. Moreover, we have the growing problems of asbestos being found in many buildings while ordinary repairs are being carried out.
    Mr. Forth: The right hon. Gentleman is drawing a fascinating distinction between the resources that are available to development corporations and those which are available to local authorities in housing. Would he care to relate his comments to the argument that the hon. Member
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    for Norwood (Mr. Fraser) deployed about accountability and discuss accountability for funds that are available to development corporations and their use?
    Mr. Shore: My hon. Friend the Member for Norwood (Mr. Fraser) made the point succinctly. He said that the purpose of public ownership of land and resources is to ensure that its use is accountable and that the matter can be brought before the House. New towns have always enjoyed special status but they are accountable, as are urban development corporations. Some are less accountable than others. Because urban development corporations have no master plan and had no public inquiry before they were set up, they are perhaps less accountable and have gone through less scrutiny than new towns such as Redditch which the hon. Member for Mid-Worcestershire (Mr. Forth) represents. Nevertheless, we have had opportunities. This is such a one and we must seize it to insist on public accountability of urban development corporations' actions.
    There is a need for radical change in housing policy in the LDDC area. There is also a great need for a change in the balance between building for rent and building for sale. The balance is much too heavily tipped towards building houses for sale. Pursuing such a policy in the pretty secure knowledge that negligible assistance will be given to easing the housing problem of people who live in the area is utterly irresponsible and worthy of censure.
    I hope that there will be a rethink. We now have a survey and will therefore be able to check the take-up of houses in the Western dock development by people who live in the borough. If, as I suspect, the numbers are negligible, I hope that Ministers, in spite of their almost obsessive interest in private development, will reconsider and give new instructions to the LDDC.
    Mr. Nigel Spearing: I endorse everything that my right hon. Friend the Member for Bethnal Green and Stepney (Mr. Shore) said about the effect of the London Docklands development corporation. My constituency is not quite as close to the City, but we have had similar experiences. I shall show how the LDDC works to even greater disadvantage in my area.
    In this first major debate on the progress of the LDDC since it was set up under the Local Government Planning and Land Act 1980, it is appropriate to read from section 136 of the Act:
    "(1) The object of an urban development corporation shall be to secure the regeneration of its area.
    (2) The object is to be achieved in particular by the following means (or by such of them as seem to the corporation to be appropriate in the case of its area), namely, by bringing land and buildings into effective use, encouraging the development of existing and new industry and commerce, creating an attractive environment and ensuring that housing and social facilities are available to encourage people to live and work in the area."
    As my right hon. Friend said, there was much argument about an urban development corporation. There was a three-month hearing by a Select Committee of another place before the necessary statutory instrument was laid before this House. Despite the fact that Newham covers half of the LDDC's area and although I represent half the area, the legislation is so draconian that I was not able to participate in the debate which established the LDDC. The Minister will therefore understand if my remarks take longer tonight.

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    The Select Committee of another place made a number of recommendations and observations, and its findings were published in paper 198 in 1980. I particularly draw attention to paragraph 8.7 because it exercises an acid test which I shall use later:
    "This leads the Committee to a final point. It is obvious—and the Chairman designate fully recognised—that if a UDC is to be a success it is essential that it establishes and maintains good relations with the local authorities and their officers, and avails itself of their advice and expertise. The Code of consultation, provided for under section 140 of the Act, should ensure that this is so. The UDC must also win the confidence of local organisations. It must always let the Docklands Forum know what it is thinking of doing, so that they can express their views on any proposal and it must make it clear that such views, even if not accepted, are always seriously considered."
    The Docklands Forum has said that it does not believe that it knows what the LDDC is doing. Indeed, as I shall demonstrate, in many instances I do not know what the LDDC is up to in my own constituency. As the Secretary of State is accountable to hon. Members, he will appreciate that it is difficult for outside organisations to know what is going on.
    The Chairman of that Committee, Lord Cross, made some additional remarks—I think in a judicial capacity—when the constitution order was debated in another place. On 1 July, at column 214, of Hansard, he said that the preponderant need in dockland was for publicly owned housing. However, we all know that that is not what the LDDC has in the end emphasised in that area of housing for which it is responsible. My right hon. Friend the Member for Bethnal Green and Stepney has already illustrated that in the context of Stepney.
    Vast areas of Newham were available for development. That land, instead of being made available for up to 20,000 people in mixed tenancies—about two thirds public to about one third private and housing association—was drastically changed to more or less all private. The terms of the land value transaction were not entirely clear, despite Sir Laurie Barratt's remarks in the Evening Standard, nor have they been since. But I am obliged to the Minister for some clarification of this matter in a letter that he sent me in relation to his reply of 25 October 1984 when I asked what adjustments were made by the LDDC to the market price of land sold to house builders. This is a fundamental point.
    The LDDC can purchase land compulsorily and sell to private developers who then sell to freeholders. In his reply by letter, the Minister said:
    "The value of the land was determined by setting prices for the dwellings and deducting development and overhead costs. The residual value was attributed to the land".
    The Minister may be unable fully to amplify that when he replies, but I hope that he will be able to do so at some stage. Not only was most of that land taken for private development, but the price of the land to the developer was not made clear, at least not to the people of the area at the time, and it has remained something of a question since.
    The idea was that many of the people who came into these private developments would contribute to the life of the area, and many have. Many hon. Members and many members of the Labour party own their own houses. We do not disagree with that. But the people of Newham object to the change in the proportion of land to be used for certain development, because the need for publicly owned and housing association dwellings is very great.
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    That need was subsequently increased—the Minister knows this only too well—as a result of the difficulties with Ronan Point and Taylor Woodrow-Anglian blocks.
    The LDDC almost reversed the priorities. Had this been changed by 30 per cent. one way or the other, the same concern would not have been expressed. I am glad to say that the LDDC has apparently now offered five acres of land to the Newham borough council. The former chairman, Sir Nigel Broackes, made it clear that he would be willing to give more, provided the council had the cash to undertake the building. That, of course, depended on HIP allocations and so on, as a result of which the council on many occasions was unable to build.
    Planning applications, although not overall strategic planning, were in the hands of the LDDC. It was the prime planning authority, and it is here that the borough made its main objection. It said, "The dockland area will be organised by the LDDC but we in Newham want it to integrate that planning with the rest of the borough. We want to balance our shopping and recreational facilities to serve the whole community, and Newham, being bounded by river valleys, commons and the River Thames itself, is very much a community. But if we have two planning authorities operating on different criteria, there will be difficulty." That was one of the main objections which the able chief executive made in his evidence to the Select Committee.
    Lo and behold, there have been planning difficulties. The London borough of Newham gave planning authority to supermarkets in the dockland area, and the LDDC has now gone further and given more planning authority in a formerly industrial area for retail markets. That may affect the balance of planning and shopping opportunity in the rest of the borough. I could go on from there, because the criteria on which the LDDC operates will not be that of the borough, particularly in respect of industry.
    On 7 June last year, I asked a number of questions about the policy of the LDDC in relation to small firms and industrial relocation. Given the Government's proper emphasis on small private enterprise, one might have thought that the LDDC would have gone out of its way to ensure that any necessary displacement was dealt with sympathetically and that it would lean over backwards to do what it could. It may have done so in certain respects, but it is wrong that a Member for Parliament should—as I was on a number of occasions—be brought in to deal with relocation for small firms in his constituency when the mighty operation of the LDDC was available. Unfortunately, such was the case.
    The Minister has given some figures on employment, but he will know that a great deal of employment in the dockland area is brought in from outside—for example, in the constituencies of my right hon. Friend the Member for Bethnal Green and Stepney and my hon. Friend the Member for Bow and Poplar (Mr. Mikardo). I am told that, in the enterprise zone, rents have evened up to take account of the fact that there are no rates.
    Therefore, the landlord gains. In the debates on the enterprise zone legislation, some hon. Members predicted that if the magic of the market operated, that would happen. Sure enough, it did. Therefore, the employment figures are not as good as they seem. When the Minister replies, I hope that he will give his estimate of the number of genuine new jobs that have been created which

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    otherwise would not have existed. It may be a small figure; I have yet to hear any estimate from the LDDC or the Government.
    If one wishes to make one's views known as a resident of Newham and not as a privileged Member of this House, to whom does one go? The Secretary of State appoints the LDDC board. Whatever its members' experience, occupation or office, they sit on the board as his nominees. Some continue and some do not. They are hired and fired by the Secretary of State. Sometimes we are not given a great deal of notice about who those gentlemen are.
    Both the leaders of the London boroughs of Newham and Tower Hamlets participate, albeit differently. A press release on 12 November named a gentleman, whom I shall not name but who is no doubt an admirable person, who was being appointed by the Secretary of State to the LDDC. It is precisely five lines and tells us little about him except that he is involved in electronics and computers. I am not saying that there should not be someone with those qualifications on the board, but I complain that that is all we know about him.
    It is not adequate for an organisation with planning powers of considerable strength, powers of compulsory purchase and powers of vesting of land—during the past six months there have been propositions which have been difficult for the communities to sustain — to meet in private and to publish an annual report which is partial. The annual report did not even quote the basic statute to which I referred earlier. Therefore, it is difficult for people to have confidence and trust—that word was used in the Select Committee's report—in such an organisation.
    Sometimes it is difficult for hon. Members to have confidence and trust even regarding routine matters. In the past I have had the privilege to coach London youngsters on the river Thames. For seven years I coached rowing and water sports. When I went to Newham I thought that we could use the docks. The Port of London Authority provided difficulties, but when the docklands joint committee took them over I thought we were on our way. We had an Amateur Rowing Association regatta in 1983. The London borough of Newham and the LDDC got together and decided to have a young people's boating centre on the west part of the Royal Victoria dock. Negotiations went ahead for leasing a shed there. Everything went well, until I happened to visit the Library and while idly looking through Motor Boat and Yachting saw a familiar scene in an advertisement that stated:
    "The London Floating Boat Show … comes to the Royal Victoria Dock, London, May 3–6, 1985."
    The illustration showed the shed where I thought my young people were to have a boating centre. I checked the matter and indeed the plans had been changed. As I understand it, the London borough of Newham was to hear of that through my happening to see that advertisement in the Library.
    That is not the right way to proceed. I know that another centre, perhaps an even better one, on another part of the dock has been offered. I hope that it will be both good and permanent. The water is there and is fine. But that is not the way to proceed.
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    What is worse is the position of the voluntary associations in Newham, which are the responsibility of the LDDC. When the dockland joint committee operated,
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    there was assistance to organisations in and adjacent to the area, such as the Mayfair youth club. When the LDDC came into being, that was restricted. Some of the grants made by the LDDC were reduced and the London borough of Newham picked up the tab.
    Despite the injunctions of the Select Committee report, there were reports that an outside organisation was being interviewed and requested by the LDDC to organise voluntary activities in the area. It was said that about £200,000 would be available, which was the amount being provided by the LDDC to existing voluntary agencies in Newham. I wrote to the chief executive of the LDDC to find out what was happening because some of the voluntary agencies, under a well-arranged voluntary agencies council in Newham which has a docklands committee and has been in contact with the LDDC for many years, were distressed. I have not yet received substantive information from the LDDC.
    I also wrote to the Minister. In his letter of 2 January he stated:
    "There have been some recent meetings between LDDC, the London borough of Newham and Newham Voluntary Agencies Council. I gather that the results of these are that Newham are to write to the Corporation setting out their views for consideration by the Corporation's Executive Board when the project application is discussed. If the project is approved, LDDC intend to seek the views of the Newham Voluntary Agencies Council on each scheme that Inter-Action put forward as part of their consultancy."
    Consultancies have a place in life, whether in civil engineering, housing or publicity. There is certainly plenty of consultancy in publicity. In a written answer on 3 July 1984, the Minister told me that the LDDC provision for publicity provision was £1,857,000.
    Consultants for local voluntary organisations are a different issue. Some may argue that the matter has not yet been agreed and that, if it is agreed, individual projects will be submitted. Today I received a folder entitled:
    "The Inter-Action Community Calendar 1985. London Docklands Young People Look At A Computer Future."
    Attached to it was a paper called:
    "Inter-Action Trust, Royal Victoria Dock, London."
    It is complete with telephone number, and is divided into headings including, "Resources", "Training and Consultancy: General"., "Computers: Training and Consultancy".
    Many other things are going on, with which local organisations already deal. It appears that projects are already in train. They are apparently unknown to the Minister because he said that, if consultancy was agreed and if projects went forward, they might be put in train. If that is so, why has that folder been printed and distributed in my constituency? The matter is out of control.
    The leader of Newham council is criticised for being involved in the LDDC. The concept is not without controversy, but what does he do? It puts him and the Minister in a difficult position. The voluntary agencies council has not been consulted on the way in which money for voluntary activities should be distributed in the area.
    Are the exhortations of the Select Committee being followed? I suggest not. The objectives that it set may be followed in some respects, but bearing in mind the enormous resources available, the LDDC has not behaved in a way deserving of the trust and co-operation of the local people.
    Mr. Ian Mikardo: My right hon. Friend the Member for Bethnal Green and Stepney (Mr. Shore) drew attention to the anomaly that spatchcocked into a Bill nearly all of which is about new town corporations there is a clause dealing with urban development corporations. That anomaly shows clearly the muddled thinking about urban development corporations that has been characteristic of the Government's attitude towards them since they were proposed. The Government have never been able to draw a distinction between setting up a new organisation with wide powers in a green field, where there is no population whose wishes must be taken into account, or enlarging small villages such as Milton Keynes and bringing in a new population, and setting up a development corporation with enormous powers in an area that is already densely populated. Many people live there cheek by jowl, some of them in rundown housing. They have many problems and strong views on what should be done about their problems, but they have discovered that they are being ruled by a body that is not in the least accountable to them.
    The great change in the lives of the people who live in the area covered by the LDDC is that, in the past, if they did not like what the people who ran their area were doing, every few years they had a chance to chuck them out and to bring in some new people. They have now been deprived of that right. The body that governs them can ignore their wishes, and does, can evade all responsibility to consult them, and does, can treat them almost with contempt, and does, and they have no sanction. They can do nothing about it.
    More than 50,000 people live in the area covered by the LDDC. When the development corporation was set up, 25,000 people were living on the narrow strip of land from Tower bridge to the Blackwall tunnel, including the Isle of Dogs. They had many problems, because it is a rundown, poor area. Unemployment there is as high as it is in the worst areas of Scotland, the north of England and Wales, and is almost as high as it is in Northern Ireland. Many of the inhabitants live in council flats which were built more than half a century ago, and which are, therefore, rundown. Many others live in private properties which were built a century ago and which are also rundown.
    The development corporation is supposed to enrich the lives of those people, but it does nothing of the sort. The two things that are vital, not merely to enrich their lives but to provide a decent standard of living, are the provision of homes and the provision of jobs. I need add little to what my right hon. Friend the Member for Bethnal Green and Stepney said about the provision of homes. Such homes as are being provided are being sold to people who come from outside the borough—people who are not included in the 25,000.
    My right hon. Friend mentioned the cost of the houses and flats being built in the area. He quoted from the corporation's report of about six months ago. I shall update his facts. I have a cutting from the local newspaper, the East London Advertiser, of 5 January 1985, from which I shall read a short passage:
    "In…Tower Hamlets, docklands, property prices are comfortably into six figures, with top-of-the-range riverside penthouses commanding a heady £350,000."
    That sounds good to my constituents who live in rundown Shadwell gardens, either unemployed or working for relatively low wages.
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    The article continues:
    "Four-bedroom houses in St. Katharine's Dock costing up to £125,000 look modest compared with properties along Wapping High Street. Three-bedroom flats on St. John and King Henry's Wharves cost £295,000 and penthouses on Gun Wharf a sky-high £350,000."
    I draw attention to the next paragraph, which includes a fresh point which I shall develop because I believe that the Minister should take it into account. It states:
    "Gun Wharf is the first property in a wall of private homes built in Wapping, a wall cutting off the local community from the river."
    We have here a riparian community which, for as long as I can remember—I have known the area for more than 60 years—has been denied access to the river. That stretch of the north bank has always been used commercially much more than the south bank. They were cut off by docks and, where there were no docks, they were cut off by wharves. There was little access to the river, and the little that was provided was very much welcomed and very much used.
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    When the docks went downstream and those wharves shut down, there were to be fresh developments, and a corporation was set up to make life rich for the people of the area. One expected that the first piece of enrichment would be that they had access to the river, but they are denied access to the river by what this newspaper rightly calls a "wall" of private housing giving access to the river only to the privileged people who have £200,000 to spend on a riverside property, and cutting off all those 25,000 inhabitants from their access to the river.
    In our last debate I was able to refer only briefly to the Shadwell basin development. I was in the time-limited part of the debate, unfortunately. Perhaps I might be forgiven for mentioning it again, because another wall that is being built, in addition to the wall round Gun wharf, is the wall round Shadwell basin.
    My hon. Friend the Member for Newham, South (Mr. Spearing) spoke with feeling, because he was personally involved in the project, of the desirability of river sports and access to the river for young people. The Shadwell basin project is tremendously exciting, and 2,000 people are taking part in it. To give due credit, Shadwell basin was developed with the help of the docklands development corporation and others, including the borough council, as a water sports area, and 2,000 people use it. It is by far the biggest water recreational exercise and training area in London. People sail there, they canoe, they windsurf and so on.
    Now the corporation has proposed a project, which has been fiercely rejected locally, to build high-rise flats—some four storeys high and some five storeys high—round the edge of this project, not only to cut off access to the basin, but to cut off the wind. It stops more than 50 per cent. of the wind getting into the basin, so there will be little sailing and no windsurfing. This terrific project, which is of so much value, giving so much exercise, pleasure and training to 2,000 people, will be destroyed if this vandalistic corporation gets its way.
    So much for homes, but what about jobs? The corporation makes great claims about the employment that it has created. I have my criticisms of the corporation, but it is terribly good at one activity. I have never found any institution in my long life so good at pinning medals on its own chest. If the members of the corporation were half as good as they think they are, they would not need to

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    spend nearly £2 million a year on public relations and consultancies. Good wine needs no bush. A man who pins medals on his own chest generally does it because his valuation of himself is a good deal greater than other people's valuation of him.
    The claims that the corporation makes of providing employment put in everything but the kitchen sink, and then put in the kitchen sink. The corporation counts in all the jobs in enterprises whose introduction into the area was created by its predecessors, the London Joint Docklands Committee and the council of the London borough of Tower Hamlets. It adds in the employment in the Daily Telegraph in Billingsgate and in News International, but the docklands development corporation did not bring those into docklands. They would be there now regardless of whether the docklands development corporation was set up, but the corporation still counts them and claims credit for them. It claims credit for all other relocations. As my hon. Friend the Member for Newham, South said, many of the jobs that it says it has created are relocated and not created at all.
    A few weeks ago the Poplar jobcentre had a youth week. I pay tribute to the staff of that jobcentre. They did a splendid job in getting the local community, employers, schools and everybody else interested in the problems of employment for young people in the area. I talked to careers officers there. They said that the corporation was a dead loss and that nearly all the youth jobs were relocated.
    I have received today a reply from the Under-Secretary of State, the hon. Member for Ealing, Acton (Sir George Young), about how many jobs were created and how many were relocated. He probably does not remember his answer at this moment. It is partial and out of date, but despite those two defects it still shows that relocation accounts for a great part of what the corporation claims as creation.
    I said just now that if the corporation were half as good as it says it is it would not need to spend so much money saying so. If it were half as good as it says it is at job creation there would not be today, as there is, 30 per cent. unemployment on the Isle of Dogs, its main industrial area. The proof of the pudding is in the starvation in relation to jobs on the Isle of Dogs. That is the real test of the London Docklands development corporation.
    The corporation's relations with the local people are appalling. It has the same idea of consultation as a Pittsburg iron master. It decides what it wants to do, then tells people that it is going to do it, and if they kick it is too bad because it can claim to have consulted them simply by virtue of having said something to them. The only consultation it ever does is ex post facto. It only ever discusses the shape of a die after it has been cast, and never before the casting process.
    I beg the House to believe that it is no exaggeration to say, as I did a little while ago, that the corporation treats the 50,000 people in the area — including those in Newham and Bermondsey—with something approaching contempt. It gives a certain amount of largesse to social projects in the area, and that is welcome. I, for one, am glad of it, and so are many others, but it would be better if it consulted the people about what objects of largesse they would like to have, instead of deciding that in its cosy little offices. In any event, the giving of a bit of social
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    largesse to the local population does not compensate for the corporation's failure to consult them and to take their wishes into account. It is like a father who spends no time with his children for 364 days of the year and gives them a present on Christmas day. That is not good fatherhood, and it is not good social behaviour for a public corporation whose decisions affect the lives and welfare of 50,000 people.
    We have all too little power to call the corporation to account. We have little opportunity even of talking about it in this place. But, as my right hon. Friend the Member for Bethnal Green and Stepney said, if the amendment is carried the corporation will have to come along a bit sooner than it otherwise would to ask for some money, or the Minister will have to come along to ask for some money on its behalf. Then we can start asking questions about what is being done with the money, in a way that the local people cannot. We could even begin to fulfil our duties as Members of Parliament. Our rights and duties are severely limited by the great autonomy given to the corporation and by its unwillingness to impart information.
    My hon. Friend the Member for Newham, South described how he was treated in his search for information, not for his benefit—as he will not get anything out of it — but for the benefit of his constituents, and that showed just how the democratic rights of people, as expressed by their right to make and unmake this House, have been eroded by the corporation, its powers and the way in which it exercises them. I for one do not want glibly to give money whenever it is asked for. If the local authorities had been provided with the money given to the corporation, they would have done all that the corporation has done, and much more, without spending £2 million a year saying what good fellows they are. The corporation should give an account of itself and I am glad of this opportunity to demand some account from it.
    Mr. Simon Hughes: When the Under-Secretary of State replied to the Second Reading debate, he confirmed that one purpose of the clause that allowed the urban development corporations to have more money was to be able to hold this debate. He said:
    "The fact that the limits are being increased is not a criticism but is to give the House a regular opportunity to debate the matter."— [Official Report, 20 November 1984; Vol. 68, c. 231.]
    I welcome and support all the comments that have already been made and now complete the quartet of Opposition Members who are all elected Members of Parliament and who represent between them all the area of the development corporation in London. I sincerely hope that our comments will at least elicit from the Minister tonight an acceptance of the fact that most of those who live in the areas that we represent and that are covered by the corporation are desperately concerned. The corporation set up by the 1980 Act does not have the confidence and trust of the people, and is not properly accountable either through Ministers to the House, or to the people for whose benefit it was set up.
    The hon. Member for Newham, South (Mr. Spearing) rightly quoted the words by which the corporations were given their mandate. They were given the most simple of mandates. In section 136, they were given as their object the securing of the regeneration of their areas. As the hon. Gentleman said, that was amplified with examples. One

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    of the duties imposed on them was to ensure that housing and social facilities were available to encourage people to live and work in the area. Surely the first obligation must be that those facilities encourage the people already there to live and work in the area.
    It is no good encouraging people from outside if the communities already there are driven out. But the whole effect of the corporation's activities has been to bring in people and to ignore the people, communities, traditions, and employment and social characteristics of the areas covered. I am not saying that they have not learnt or that the individuals concerned are malicious or malevolent. I am not saying that the community officers are not trying to listen to, and to communicate the concerns and aspirations of, local people, but they are not achieving that communication.
    I shall give some examples that worry our communities. I shall ask Ministers to think again about some of the matters that the Local Government, Planning and Land Act 1980 allows them to think about or to pass on our concerns to those running the docklands corporation. Some of the points have been touched on. We have all been speaking specifically about the London Docklands development corporation because that is the one we are concerned about and about which we know most. The value of land on both sides of the Thames has escalated enormously. The LDDC has vested land which belonged to other public authorities; in every case it has been vested without the consent of those authorities. We accept that the value of such lands is established by the district valuer.
    9.15 pm
    I shall give the example of the Cherry Garden site by Cherry Garden pier, which is the subject of present discussion. In December, the LDDC chairman told me and other local community representatives that the corporation will insist that that land he sold at a price that will take into account the cost of sharing the river wall, adding in approximately £1·5 million to make the resale value over £2 million, although it was bought for less than £1 million. If the docklands are to be regenerated, expenditure on river banks and walls should not necessarily be passed on as part of the cost to anyone who wishes to develop housing, if it is in the public sector, by a housing association or by a voluntary agency. Yet that is what the corporation is insisting on as an on-sale cost.
    Nothing in the Act requires that. Nothing in the Act defines what should be added to the land valuation. Nothing in the legislation passed by the House defines that. The Government should, informally — or, under their powers in the Act, formally—give directions to the LDDC that, if it is to meet the housing needs of the docklands communities, it should do so in a way that does not impose unjustified costs on them.
    The problem is that the Government's attitude has always been that development should take place in the private sector because of statistics from the census. In my constituency, for example, council occupation was over 80 per cent. and owner-occupation was only 2·5 per cent. I do not know the statistics in the constituencies of my neighbours. The Government's attitude is illogical. It depends on what people need, want and can afford. The Under-Secretary quoted figures. A few hundred people who were council tenants in Southwark bought the first houses. The hon. Member for Bow and Poplar (Mr. Mikardo) quoted prices of £300,000. In my constituency,
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    flats which command wonderful riverside views are going for over £225,000. That is the going price of the river view that used to be and should be, as it were, the heritage of those who worked on the river to make the city great. It means that, if the people want to buy under a shared ownership scheme, a form of co-operative occupancy, or housing association development, they cannot have it. There was one one-off scheme. The World of Property Housing Trust, as a special deal, built houses to transfer tenants from downtown estates, but as yet there is no commitment to more.
    There is no way we can control the operation of this wretched corporation, because it is out of anybody's control. There are no criteria to define how it should work apart from the generalised provisions in the legislation. We urge the Government to ensure that it must first meet the housing needs of the communities. If the people want to stay and buy, that is fine, but it should be at prices they can afford. The corporation is examining ways of doing that more sensitively under its new chairman than under his precedessor. It is considering giving loans to local people. I hope that these will not have to be paid back, because they would act as a charge on the sale price of the house in the same way as happens on the break-up of a marriage. In reality, a person always has the house for as long as he wants it. If the price is £50,000, £60,000 or £70,000, a small loan will make no material difference. The 1980 Act allows the Government to intervene if they wish. The docklands corporation is also allowed to intervene. We urge that intervention.
    There was a boom in the cheap, build-for-sale properties. Houses in the Surrey docks and on the north side of the river went like hot cakes, primarily to local people. However, the second phase of the development involved much more expensive property. The cheaper property was the taster, and now, in places such as Elephant lane in Bermondsey and in Rotherhithe, houses are much more expensive. The figures do not present the case accurately.
    I urged my predecessor, the vice-chairman of the corporation and chairman of its housing committee, to do what he could to bring prices down, but I have to come here for action. People of all political parties in my constituency and elected Liberal representatives and those not of my political persuasion believe that the only way that we can make the docklands corporation meet the needs of the people — until we can amend its constitution so that it is more accountable—is to ask that, under section 136(5), the Secretary of State should
    "contribute such sums as he with the Treasury's concurrence may determine towards expenditure incurred … by any local authority or statutory undertakers".
    The housing authorities — Southwark council in my area and Newham and Tower Hamlets—have a statutory duty to house local people. The docklands corporation has the power, with the Secretary of State's consent, to use the £600 million which it can borrow to house local people. I refer in particular to young local people and to one of the two riverside estates. Over 1,000 young people have applied for single bedroom accommodation and are on the waiting list of one of the districts concerned.
    I urge the Government to think seriously about whether, since they have always smiled benignly on development corporations, money can be set aside to provide local housing at a cost that people can afford.

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    I ask the Minister to invoke two other provisions in the 1980 Act. The Secretary of State can require the development corporation to exercise powers to ensure that its primary duty is to retain employment and to facilitate the housing of existing communities. I also ask the Secretary of State to take another step which has not yet been taken. We have asked the LDDC to provide housing for local people. It argues that it is not a housing authority. It says that it can spend money on environmental improvements but not on an estate such as the Swan road estate.
    Hon. Members may have visited the Mayflower pub, near the site from which the pilgrim fathers' ship went to America. That site cannot be refurbished with money from the LDDC because the LDDC is not a housing authority. The most that it can do is renovate the outside. That is no consolation to people with flats which need to be repaired inside. A building which looks beautiful across the river is no consolation to the resident of a substandard property. I ask the Minister at least to undertake that he will consider, with his colleagues, invoking the powers in that Act to allow the LDDC to become a housing authority.
    One other aspect has been mentioned by colleagues from the dockland boroughs. The lack of accountability has some appalling implications. An architectural competition was held for the development of Cherry Garden pier site. The contract was awarded to the developers who came third in the competition, in which there was a joint second prize and no first prize. There is an enormous protest. The hon. Member for Bow and Poplar said that a wall is to be erected on his side of the river. Under the Cherry Garden development, we were to have seven seven-storey blocks of flats where there is now space and a view of and access to the river.
    So far only one significant concession has been made, as a result of a request for recommendation by Lovell Farrow, the developers. Of course, the LDDC is its own development control authority. It asks itself for permission. If it is not happy, it can advise itself on how to ask for planning permission. Then permission is granted and the development goes ahead. The only concession is that there will be one fewer block of flats. There will be less crowding on the site. However, the nature of the development will be substantially the same. Not only is it dishonest to hold an architectural competition and give the contract to the winners of the third prize, but only the third prize winners have had a chance of submitting another planning application.
    Assurances were given to elected members of the local community that no further steps would be taken until there was further consultation, but we have discovered that an application for another site has been submitted and planning permission has meanwhile been given. That has happened despite a request by me and others that we be given notice of planning applications. I made that specific request and received a letter saying that I would get notice of planning applications, but I have heard no more. The hon. Member for Newham, South and the right hon. Member for Bethnal Green and Stepney (Mr. Shore) and, I have no doubt, the hon. Member for Bow and Poplar have the same problems. We are not being told what is going on. If elected representatives, whether borough councillors, Greater London councillors or hon. Members, are not being told, what accountability is there?
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    The situation is highly unsatisfactory. The intention to regenerate those communities is not being fulfilled. Jobs are not being created — the new jobs are mainly relocated jobs. The net result so far, some three years into the development corporation's life, is that it has not stemmed in any way the drift away from central London of families and communities. In my constituency, 20 per cent. of those people moved out of inner London in the 10 years before the LDDC was set up. That trend has not changed. People still are not able to stay; their needs are not being met and communities are being broken up. If what the Financial Times called the greatest piece of real estate left in Europe cannot have a better destiny with more imagination and humanity than that, it is a sad lot and a sad day.
    It is not yet too late, but it will soon be too late. The speculator and the investor will have moved in and the jobs and the people will have gone. The old communities will not be regenerated. In part, there may be a different community, but the form of change is not something that any accountable and democratic group of people can permit without severe protest. Whatever good intentions the Government may have had, the expectations have not been fulfilled. They must sit down with the LDDC and all hon. Members who have spoken in the debate and think about the strategy. I say, I believe on behalf of all of us, that we would be happy to enter into a regular and more accountable dialogue to make sure that the people whom we represent in the part of London whose heritage we fight for get a good deal and not the poor and ever-worsening deal that they have got over the past few years.
    9.30 pm
    The Parliamentary Under-Secretary of State for the Environment (Sir George Young): The amendment, moved rather unusually from the Back Benches by the right hon. Member for Bethnal Green and Stepney (Mr. Shore), has provided a useful opportunity for a wide-ranging debate about the LDDC, although the clause also relates to the Merseyside development corporation. I cannot help noting a paradox in that the bulk of the Bill is about new towns, and there the thrust of the Opposition's criticism is that we are winding up too quickly those publicly created bodies accountable to Ministers. They say that we should have more new towns and allow the existing ones to continue for even longer.
    When we come to the UDCs, which are, in effect, new town corporations in the inner cities, the criticism is the reverse—we should not have set up those bodies and we should not continue their operations. Opposition Members have an inconsistent approach to those two matters.
    The second paradox is that we are always being asked by Opposition Members to spend more public money; to invest in the infrastructure, and to do something about the inner cities. Clause 12 does that. We are increasing the financial limit available to the urban development corporations. To have listened for the past one and a half hours to the debate, which has been unmitigated criticism of the Government, one would not think that that is what the LDDC is doing. It is investing in the infrastructure of a decaying part of the city; it is reversing decades of decline; it is creating jobs and homes; and it is succeeding where the local authorities' conventional structure has completely failed.
    Despite what Opposition Members have said, we do not intend to arrest or reverse the excellent progress that has

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    been made by the LDDC. They say that they speak on behalf of their electors, and I am sure that they do, but the former Member for Bermondsey, Mr. Bob Mellish, takes a view that is diametrically opposed to that of the hon. Member for Southwark and Bermondsey (Mr. Hughes) when it comes to the way that we should tackle the problem in docklands. It is not for me to adjudicate upon which of them speaks the truth. It shows that there is an element of doubt as to whether the view put forward by the hon. Member for Southwark and Bermondsey is the only view.
    I have spent a great deal of time in docklands and have talked to the people who live and work there. The right hon. Member for Bethnal Green and Stepney said that there was a strong feeling of resentment there. That view is changing. If one talks to the people in the boroughs involved, one finds that their initial view of complete hostility is now being tempered as they see what is happening. They are shopping at the Asda store that has been built at the Isle of Dogs. Some of them have jobs in the firms that have been set up. I detect a shift in public opinion in the boroughs involved as a result of the excellent progress that has been made by the LDDC.
    I shall pick up some of the points that have been made. I take seriously some of the criticisms. First, there was one about housing made by the right hon. Gentleman, which was picked up by his hon. Friend the Member for Bow and Poplar (Mr. Mikardo), that the new housing was not available to those who live in the area. At Nelson's reach five phases of new housing have been released for sale since July 1983. Each time people have queued overnight. More than 90 per cent. of the 118 homes have been sold to or reserved by local people, and at Mayflower court, a competition-winning scheme by the riverside, the pressure was so great that the developers decided to release the whole scheme within days. Of the 76 homes, I understand that 18 have been reserved by council tenants. The picture is not as dramatically one-sided as was put forward by the two speakers.
    If one studies the structure of housing in Southwark, Tower Hamlets and Newham, one sees that there is a dramatic imbalance. It is far too heavily weighted against owner-occupation. There is a preponderance of publicly owned stock there. In 1981, only 5·3 per cent. of the houses in docklands were in owner-occupation. The figure is now 12 per cent., and the target is 30 per cent. That represents a shift in the right direction. It would be wrong for there to be further investment in public sector stock in that area. We are moving towards a much fairer balance which will encourage people to live and work in the area.
    On unemployment there was a debate as to whether the jobs created in the area—some 4,129—were new jobs or relocated jobs. The economy in London is very mobile. Docklands has not been getting any jobs—either new or relocated ones. As a result of the enterprise zone firms are setting up in the Isle of Dogs, where they were not setting up before. I should have thought that that ought to be welcomed by those who represent the area.
    As for Inter-Action, I shall write to the hon. Member for Newham, South (Mr. Spearing). The LDDC has contacted my Department for a decision, but a decision has not yet been made. I shall write to the hon. Member about the advertisement that he mentioned.
    As for voluntary organisations, again one would not have thought, from listening to the debate, that the LDDC actually spends £750,000 each year on these organizations
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    and that the Government have recently increased the maximum that it can spend. I have a long list of organisations in Newham which receive funding from the LDDC. For example, the Beckton park residents association receives £1,500 and the docklands canal boat trust receives £5,000. So it is not the case that the LDDC is not doing what it can to help voluntary movements in the area.
    Mr. Spearing: I think the Minister will agree that I did not say that it is not doing so. I said that the LDDC is not taking account of certain matters. In order to put the record straight, I do not believe that I quoted an advertisement in respect of Inter-Action. It was in relation to the boat show. The quotation related to a programme sheet which purported to show that Inter-Action is already committed to programmes in the docklands area. No permission has yet been given and no moneys have yet been voted.
    Sir George Young: I believe that that is the correct understanding. The corporation has submitted a project application to my Department, but we have not yet taken a decision on it.
    The right hon. Member for Bethnal Green and Stepney asked me about the STOLport. As I believe he knows, the reopening of the inquiry is a matter for litigation, but the Government will take whatever steps are necessary in the light of court proceedings.
    The right hon. Gentleman referred to houses in Wapping about which he has spoken in the House on previous occasions. The corporation is pledged to ensuring that a substantial proportion of the housing schemes on its land is within the means of people earning average London incomes. On the other hand, the corporation has to ensure that it does not set house prices so artificially low that those who buy them can make a windfall profit by selling them on at their true market price. The corporation has introduced shared ownership schemes in order to bring housing within the reach of people on average incomes, but at the same time has tried to ensure that they do not sell them at artificially low prices.
    Mr. John Fraser: What will be the final proportion of houses to let in shared ownership schemes on the one hand and houses for sale — figures amounting to up to £330,000—on the other?
    Sir George Young: As I said a few moments ago, the objective of the LDDC is to ensure that roughly 30 per cent. of the homes in docklands are owner-occupied, as against about 5 per cent. when it started. Even 30 per cent. would be under half what it is for the country as a whole. Therefore, I cannot accept the criticism that it will move to a position where owner-occupation is at too high level. The right hon. Member for Bethnal Green and Stepney welcomed the light transit railway system. I wonder whether we should have had that system had it not been for the LDDC. I wonder whether Tower Hamlets, for example, and the other boroughs through which it runs would have found the money to go ahead with the railway. The GLC had the resources, had it so wished, to go ahead with the light transit railway system but it did not do so. The LDDC is putting up half the money for that system. London Regional Transport is finding the other half. I wonder whether that scheme would have gone ahead had it not been for the establishment of a single-minded

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    development corporation such as the LDDC with a commitment to the area, which has taken the decision to go ahead.
    Mr. Mikardo: May I make two points to show that what the Minister is saying is nonsense. First, the main initiative came not from the London Docklands development corporation but from London Transport. Secondly, the proposal was put forward by the docklands joint committee before the LDDC was formed. If it had had the money that the LDDC has received it would have done the job.
    Sir George Young: The argument for a body such as the GLC is that it can take strategic decisions on projects that would take a relatively small proportion of its budget. The GLC did not do that; half the money came from London Transport and half from the LDDC. My view is that we would not have got the project without a body such as the LDDC.
    Mr. Mikardo: That is not my view.
    Sir George Young: We shall have to agree to disagree.
    Much of the argument has been about accountability and answerability. The criticisms of Labour Members have been the same as those that I hear from my hon. Friends about the new towns—that they are appointed by Ministers, that they do not have to answer questions, and so on. If one sets up organisations such as the LDDC or the new towns, it is inevitable that there will not be the same accountability as there is with a local authority. Against that, the local authorities could not have coped with the new towns development and did not and could not have coped with the problems in docklands. One has to accept the downside — less accountability and answerability—for the upside, which is the progress that has been made in docklands and the revitalisation of the area.
    Hon. Members did not speak to the amendment, which would reduce to £550 million the financial limit at which a further debate in the House would be necessary. The arrangements in the Bill are in line with previous arrangements for the new towns and the LDDC. It is reasonable to calculate the limits so that such debates occur, on average, every two or three years.
    The limits were originally set in 1980 and we have had one debate on the order to increase the limit. We are now debating the primary legislation, which will increase the limit and renew the power to increase the limit. That will give rise, on present plans, to another debate in about three years. That is reasonable and I see no reason to advise the House to accept the amendment.
    If I have not answered matters raised in the debate, I shall write to the hon. Members concerned.
    Amendment negatived.
    9.42 pm
    Mr. Gow: I beg to move, That the Bill be now read the Third time.
    The Bill provides for the completion of the winding up of the new towns programme in England and Wales. It changes the purposes for which the Commission for the New Towns exists. While retaining its task of making the best use of the property transferred to it, the commission is given the new primary function of disposing of that
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    property as soon as it considers it expedient to do so. The Bill also provides for the winding up of the commission when its purposes have been substantially achieved.
    Some features of the Bill contain nothing novel. The Labour Government wound up new town development corporations when their tasks were done. They set target dates for the winding up of others, and some of the dates set by the Labour Government when they were in power were earlier than those to which we are working.
    Since 1979, we have continued the task of bringing the new towns to completion. Four development corporations—for Harlow, Stevenage, Corby and Bracknell—have been wound up and, as the House knows, five more—for Northampton, Redditch, Skelmersdale, Basildon and Central Lancashire—are planned to be wound up this year. I will announce shortly a final decision about the north-east new towns, two of whose distinguished representatives are present on the Opposition Benches.
    The Bill enables us to build on what has been achieved and to take the process through to completion. The Commission for the New Towns has done, and is doing, an outstanding job, both in its general task of disengagement and, as we have seen at Corby, in its role of promoting a town that faced special difficulties. I wish to pay special tribute to the work of the chairman of the commission, Sir Neil Shields.
    The Bill gives the commission a remit for completing all its tasks, both in the towns that it currently manages and in those where it has yet to assume responsibility. It also puts the remaining development corporations on a sound financial footing. There will be no forced sales of assets, nor any sales contrary to the best professional advice. The decision made by the Under-Secretary in the case of Redditch is proof positive of that. Our aim is an orderly and responsible disengagement at a pace consistent with the market, to the magic of which I again pay tribute.
    Once the commission has completed its tasks, there is no reason why it should remain in existence, so the Bill provides for it to be wound up when that stage is reached. For the reasons that I have just given it would be wrong to put any fixed time limit on that event, but I can assure the House that we will progress as quickly as we can, with responsibility, towards that goal.
    The Bill also allows the two UDCs to press on with their task of revitalising their areas after years of delay and neglect. The neglect that there had been in the areas where the two development corporations are now in operation is a massive condemnation of years of Socialism in those areas. The Government are building on the well-tried approach of a development corporation. Our approach is sensible, practical and consistent—precisely what one might expect from Her Majesty's present Ministers. The two UDCs have already made substantial progress in tackling the problems, in co-operation with the private sector. The Bill enables further progress to be made.
    The Bill provides a sound basis for the completion of the new town programme and the further important work of the development corporation, and — at the earliest sensible moment—the dissolution of the commission. I commend this enlightened Bill to the House.
    9.48 pm
    Mr. Harry Cowans: I do not think that I have heard a more modest speech in all my years in the

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    House. In reality, the Minister is in danger of becoming black and blue all over from throwing bouquets at himself. I seem to have heard the phrase
    "the magic of the market"
    about a hundred times. It is indeed a magic market place that cannot find work for 4 million people. The word "magic" can just mean a trick. Sometimes the trick requires help. A volunteer joins the magician on stage and the magician makes one of his possessions—not one of the magician's— disappear. That picture sums up the meaning of the phrase
    "the magic of the market".
    I am a super-optimist. I had hoped that in Committee we would make some progress and bring about some alterations to the Bill, but it was apparent from the beginning that there were substantial differences between the two sides, and that is even more apparent now. I have heard nothing tonight to change my opinion. I agree with the Minister that when the new towns were set up the intention was that they would be wound up when they had completed their tasks. However, one of the fundamental distinctions between the Government and the Opposition is over the stage at which the new towns can be considered to have completed their task.
    I want to tell the Minister about a situation of which I have just been informed. Had I known about it when the Bill was in Committee, I should have told him about it then.
    I apologise to whoever is the hon. Member responsible for Hemel Hempstead. I understand that the hon. Member is a Conservative. Hemel Hempstead used to be a constituency in its own right. I have tried to find out where it is now and whose constituency it is in, and I have singularly failed. I apologise to the hon. Member concerned. Had I been able to establish who represents Hemel Hempstead, I should have informed the hon. Member that I intended to refer to it.
    I return to the business of having completed a task. I quote:
    "When the Hemel Hempstead new town was planned, a brand new hospital was promised and 24 acres of land purchased by the Development Corporation to pass to the Health Authorities when they were ready to build."
    Hemel Hempstead new town was taken into the commission in 1962. Presumably it was thought that the new organisation would continue what the new town had started. Part of the hospital was completed, but now money to complete the hospital and to buy the land on which to build it is not available because the Department of the Environment insists on the full current commercial price. I suggest that the new town had not completed its task, because the hospital had not been completed. If the new town had not been wound up, the problem would not have arisen. That is just one example.
    Labour Members of the Committee can congratulate themselves on their religiously latching on to the argument about new towns' close co-operation with local authorities. We argued the case of the company town. I am grateful to Councillor Walter Stranz of Redditch, who has written about the proposed sale of assets by Redditch development corporation. He said that
    "the best start to the New Year we could have had"
    was the news that it would not become a company town.
    I pay credit to the Minister. My problem is that he is administering just what Labour members of the Committee advocated. The only difference between us is that we want such action to be written into the Bill. The
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    Minister would not allow that. With regard to Redditch, he has, for the time being, stopped it from falling into the trap of becoming a company town. However, I have one or two quarrels with the Minister. It is not too late to put these matters right.
    An article of 28 December said:
    "The Minister, who is responsible for new towns, said the bids had been carefully examined but it was felt that they were not acceptable."
    That is our point. Nobody tells us why they are not acceptable. We cannot challenge the Minister on the Floor of the House. We wanted such provision written into the Bill but did not get it, and yet the Minister is doing exactly what we want. I applaud that, but the sting is in the tail. Mr. Norman More, the director of Redditch development corporation, has said that he is not happy with the Minister's views and will be back in the new year, presumably to try to change his views. That, too, will not come before the House.
    There would have been no problem if what we had asked had been written into the Bill. If the Minister is doing what we ask, there can be no harm in writing such actions into the Bill. It is not too late. The Minister obviously believes that this is the right approach, so why will he not write such action into the Bill? He might not be here next time. Someone quite different might adopt a completely different attitude.
    It is not too late to do this in order to safeguard the situation— [Interruption.] If at this stage the Minister wants to say that he will do it in another place, I shall be delighted to give way to him. There seems to be some frivolity about this, but if that leads to an amendment in another place, I shall laugh with everyone else. However, there is no forward movement to the Dispatch Box to suggest that it was anything other than frivolity. It is not frivolous for those outside this House.
    Another fundamental difference in Committee related to the powers in the Bill. My hon. Friend the Member for Bow and Poplar (Mr. Mikardo) referred to this in the context of urban development and said that it was muddled thinking. I have news for him — it is all muddled thinking. There are many double standards.
    The Minister has rightly written into the Bill provisions to prevent the Commission for the New Towns from doing certain things, but he has inserted another clause which allows him to do so under special powers. That is a nonsense in any terms.
    We warned about the number of occasions when the powers of the House and of Members of Parliament are taken away and left purely in the hands of the Secretary of State. I again warn that such powers are available to any Secretary of State, not just to the present holder of that position. Again, it is not too late to alter this provision. It means that the Secretary of State will become the sole arbitrator of practically everything in the Bill. Whether or not the new towns have completed their task, he will become the sole judge, jury and executioner.
    The Minister mentioned in passing the position of Washington, Newton Aycliffe and Peterlee. He did it so quickly that one of my hon. Friends dashed to the Opposition Front Bench to check whether he had mentioned it. I assured him that the Minister said "northeast", after which his remarks became clouded. We are, however, grateful for the fact that these new towns still exist. They are vital, and even this Government are beginning to realise that, but it must be apparent to the

    869
    Minister that without some decision on their future, all those who live and work in those areas must do so from day to day.
    On a number of occasions my hon. Friends the Members for Houghton and Washington (Mr. Boyes), for Easington (Mr. Dormand) and for Bishop Auckland (Mr. Foster) have received promises that some kind of decision would be forthcoming, but the Government have not said in which year that promise would be kept. If the Secretary of State were now to say that these new towns will continue for the next 10 years we would be grateful, but some decision is necessary, and he should realise that the continuation of these new towns is vital to the areas affected. So far we have had promises, and it would be nice if we had a final—we hope, positive—decision.
    Both in Committee and on Second Reading great concern was registered about the job creation functions of the new towns. They are vital. Although the Minister may think that a new town has fulfilled its function, for example, towards housing and building, there are classical cases where he could not take that view about its present job creation function. That is particularly relevant to Washington, Newton Aycliffe and Peterlee. Obviously other new towns will be in the same position.
    In Committee the Minister kindly provided me with a letter which he had promised me. He honoured that promise.
    It being Ten o'clock, the debate stood adjourned.

  BUSINESS OF THE HOUSE
  Ordered,
  That, at this day's sitting, the New Towns and Urban Development Corporations Bill and the Mineral Workings Bill may be proceeded with, though opposed, until any hour,—[Mr. Neubert.]

New Towns and Urban Development Corporations Bill
Question again proposed, That the Bill be now read the Third time.
Mr. Cowans: That gave me quite a shock. I forgot that it was 10 o'clock. In his letter, the Minister said of job creation functions:
"There is no reason why a completed new town should be treated differently to other towns."
With the greatest respect, that was the very reason for setting up the development corporations in the first place. The fact that they were given job creation functions flies in the face of what the Minister said. A town may be completed in a physical sense, but the work of the development corporation on economic matters may be far from finished, especially in the areas that I have mentioned.
It is easy to consider such matters in isolation, but we cannot do that for this legislation. The job creation function is vital because unemployment is a black spot. We must remember that when considering the large amount of finance that has been taken from those areas under the Government's regional aid policy. The budget of one of the development corporations for job creation in my area is about £7 million this year. If one assumes that the other two budgets are approximately the same, we are
870
considering a figure of about £20 million, which is coming from areas such as Washington, Newton Aycliffe and Peterlee. That could have disastrous effects. I hope that the Minister will bear those facts and figures in mind when he comes to make a decision.
The Bill is ill-conceived, it places far too many decisions solely in the hands of the Secretary of State, and it moves undemocratic bodies, such as development corporations, even further from the people, because, when they are wound up, people must go to the commission, which is miles from them. I plead with the Government, even at this late stage, to take the legislation back to the drawing board, make a serious and considered reexamination of it and return with more realistic legislation which takes less power from Members of Parliament and takes account of the existence of areas of high unemployment, although other parts of new towns are completed.
Even now I hope that if the legislation goes to another place it will be altered to be more reasonable and more constructive. I could not support it on Second Reading, and nothing that I have heard or seen since has changed my mind.
10.4 pm
Mr. Roland Boyes: In May 1984, the Department of the Environment issued a discussion document entitled, "Review of the Target Wind-Up Dates for New Towns Development Corporations in the North-East of England." As part of the consultation process, the Government asked local authorities to consider whether the English Industrial Estates Corporation should take over the job promotion element of the new town development corporations.
I shall use as my example Washington new town. My hon. Friend the Member for Easington (Mr. Dormand) will deal with Peterlee. Washington development corporation has been established for more than 20 years. During that time, the industrial promotion element has been vital to the people of the north-east, but no more vital than it is at present, when we are suffering high unemployment and a rapid loss of jobs, especially in our basic industries. Washington new town is part of the borough of Sunderland, where about one in three males is unemployed. The most tragic illustration of the problem is that 2,675 school leavers are unemployed while only 29 jobs are on offer at the careers office. If we add the number of youngsters on youth training schemes who will soon be looking for permanent jobs, we can see the magnitude of the economic problems of the north-east.
We need a job-creating agency that is not only experienced but part of the area in which the economic crisis is occurring.
It is interesting to note that the Department of the Environment agreed to meet a delegation from each of the three north-eastern new towns. The delegation included representatives of the local authorities and the development corporations, and Members of Parliament. It represented three different locations, different political parties, and different interest groups. Yet the Ministers who were present, including the Secretary of State, must have been impressed by the logic of the case presented and by the fact that there was no dissension from the main argument that the job-promoting aspect of the new towns

871
must stay with the development corporations for at least another five years before the Government carry out another review.
To obtain such unity, all the representatives of the delegation must have been, and were, convinced that the retention of the development corporations would benefit not only the new towns but the entire region. Even the Department of the Environment paid tribute in its discussion document to the work of the corporations. Paragraph 11 states:
"The development corporations have achieved a considerable success at promoting industrial growth in their areas, even in adverse economic circumstances."
A powerful case was made in a leader in The Times on Christmas eve for the retention of the job-creating function of the new town corporations—
Mrs. Kellett-Bowman: On a point of order, Mr. Speaker. Is this relevant on Third Reading?
Mr. Speaker: It is a fairly wide debate on Third Reading, and I believe that it is relevent.
Mr. Boyes: Thank you, Mr. Speaker.
The Times stated:
"The corporations of the New Towns of the North East form a component of regional aid, seeking employment for and promoting Aycliffe, Washington and Peterlee."
We agree that the corporations are vital components in the life of the area.
May I briefly illustrate why I believe that the job-creating function of Washington corporation should continue? When it was established in 1964, there were about 6,000 jobs in the area covered by the new town. Nearly all those jobs have now disappeared, especially with the tragic closure of Cape Insulation just before Christmas. By September 1984, 20,000 new jobs had been generated in the town. These did not only come from the immediate area. Much has been said about the capture of Nissan for Washington, but I remind hon. Members that in Washington—
Mrs. Kellett-Bowman: On a point of order, Mr. Speaker. Is this really in order at this stage of the Bill?
Mr. Speaker: The hon. Lady must not challenge my earlier ruling.
Mrs. Kellett-Bowman: This is a different point.
Mr. Speaker: Order. The hon. Lady knows that in a Third Reading debate it is perfectly legitimate to debate what is in the Bill. I think that that is what the hon. Gentleman is doing.
Mr. Boyes: I am grateful, Mr. Speaker.
A number of factories have already come from other countries to Washington because their companies recognise the expertise of the workers, and much more perhaps than some other people in Britain they recognise that the north-east is a super place in which to live and work and provides a good environment in which to establish new factories. Philips has arrived from Einhoven, Danavox has come from Denmark, Littelfuse has come from Austin, Texas, Cooper Tools has come from Houston, Canadian General Electric has come from Quebec, NEK has come from Norway, Nike has come from Oregon, and Rayovac has come from Wisconsin in the United States.
Of the many new companies that have established factories in Washington, 325 have been attracted by the
872
job-creating agency, the Washington development corporation. I am informed by the corporation that there are 166 current live inquiries. Given such an achievement amid the difficulties in the north-east, and with 166 live inquiries on the table at the moment, is this an appropriate time for the corporation to be wound up? Would not it be a tragedy if some of those 166 companies were lost because the delicate negotiations taking place broke down following an announcement that the corporation was to be wound up in a few months and another, totally different organisation — I do not criticise English Industrial Estates, but it is a different organisation—would have to start many of the delicate negotiations again?
I have appealed to the Minister a number of times to consider what the decision is doing to the staff. The staff working for the development corporations are loyal, hardworking people who cannot possibly know what is to happen to them. We have been continually told that the decision would be made in the near future. When we met in July it was expected that the decision would be made at least by October, and we always had a closing date of 31 December because that was when notices had to be given to the staff, with a closure date of 31 December 1985.
We have not yet had an announcement, and I can tell the Minister that morale amongst the staff of the new town development corporations is decreasing all the time. The absence of an announcement is having a catastrophic and depressing effect. The people there are working and existing on rumours. As might be expected at such a time, a number of rumours about the future are flying round the corporations, but no one will give an exact date on which an announcement will be made.
At present, a Standing Committee is considering a Bill proposing the abolition, among others, of the Tyne and Wear county council. I can assure the Minister that that council's employees are taking careful note of the way that the staff of the new town corporations are being treated.
I have two simple questions to put to the Minister. I should like to know what is causing the hold-up. I hope that it is not just a matter of saving a few pounds because one organisation is a bit cheaper than another. People's lives and jobs cannot be measured in those terms. It may be a few pounds cheaper to run English Industrial Estates compared with the development corporation, but the long-term effects must be considered.
The Under-Secretary of State for Trade and Industry, the hon. Member for Edinburgh, Central (Mr. Fletcher), who is described in a Scottish Office press release as Scotland's industry Minister, said:
"It remains the Government's view that the new towns should continue to maintain their important contribution to industrial growth and increased employment opportunities and that none of the development corporations should be wound up before the end of the 1980s."
I am pleased that he said that about the development corporations in Scotland, but I wish that the Minister would make the same announcement about the development corporations in the north-east of England.
10.15 pm
Mr. Jack Dormand: I shall be brief indeed in dealing with three points which arise from the Bill. The Under-Secretary of State is probably aware that I have spoken in every debate on the new towns since I came into the House. Therefore, he knows my views well and I shall not repeat them.

873
My first point arises from a genuine desire for knowledge. What is to be done about possible direct payment to owner-occupiers in new towns—this is dealt with in the Bill — where faults have been found in properties after purchase and after what can be called a reasonable survey of the property? I mentioned that on Second Reading and the Minister has written to me with his usual thoroughness. He sent me a two-page letter but, in all fairness, I must tell him that I have been studying it for most of the day and I cannot understand it. That is untypical of the Minister.
I thought that I had better raise the matter again today. Perhaps the Minister will write me another two-page letter, or possibly even a three-page letter. I say that in all seriousness, because there are people in the new town in my constituency who feel sufficiently strongly to form an organisation. I am trying to help and advise those people. Frankly, I have not had a satisfactory answer. My hon. Friends raised the matter in Committee and the Minister for Housing and Construction did give a reply, but I must say, in all fairness and seriousness, that I was not satisfied with that. I was not a member of the Committee, as the Minister is aware.
There is a lot of feeling about that matter in the new towns, because many people are affected. Will the Government consider issuing a circular to local authorities spelling out clearly the position. If that is done, perhaps he will send me a copy.
Another important matter was raised by my hon. Friend the Member for Tyne Bridge (Mr. Cowans). He referred to the possibility of land being retained or sold where it is intended to have a hospital. I have exactly that position in my constituency. I have been endeavouring for well over a decade to have a community hospital provided for Peterlee. Last week the Durham health authority issued its strategic plan for the decade 1985 to 1995, and I find that there is a possibility of that happening towards the end of the decade. My goodness, that is another 10 years. Therefore, we are talking about 20 or 25 years. However, that is not my main point.
I should like an assurance from Ministers tonight that there will be no pressure from the Government on Peterlee development corporation to dispose of the land which it has held, much to its credit, because it knows the overwhelming need for a hospital for the area, not just for the new town. I may be doing the Government an injustice, but I should like an assurance that there will be no pressure from them on Peterlee development corporation, or any other corporation, as a matter of principle, to dispose of land. That is a matter for local people and local authorities.
Finally, I underline everything that my hon. Friend the Member for Houghton and Washington (Mr. Boyes) has just said. I have said it many times, but I shall say it again, because there is a new factor. There is an absolute need to retain the development corporations in the north-east—that includes the one in Peterlee—because of their work as job-finding agencies. The record speaks for itself. It is known, and I need not repeat it.
I have said that there is a new factor, and that is that there are 12,000 miners working in my constituency, and the Government are proposing to close pits. That will lead the utter devastation of the mining communities about
874
which Opposition Members and the NUM have been talking. In my constituency, the only other job-finding agency is the Peterlee development corporation.
It is foolish in the extreme— I have used stronger words before in the House — for the Government to consider, particularly now, abolishing the corporation on the last day of this year. The record has been proved over and over again and is a repetition of what is happening in Washington and Aycliffe. I know the staff of the development corporation well. They are dedicated people. Men and women in their 30s and 40s, and at a critical time in their careers, are wondering what on earth will happen to them.
We are talking about perhaps another five years. The unemployment problem in the north-east will not be solved in another five years, so we are making a very restrained and moderate appeal. About two months ago the Under-Secretary of State first promised me a decision. It is also on the record in Hansard that a second promise was made that a decision would be reached before the Christmas recess. As has been said, the Minister then rather rushed it, and I think that I have his assurance on that point. But the decision has been put back again. That puts us in something of a dilemma. As Ministers have taken so long, they are becoming wiser all the time. I put it to them that it is such an important matter that they should take another five years to consider it, and then perhaps we can have a decision.
In present circumstances—I have to put it bluntly, although I have been trying to be neutral—abolition would be pure doctrinaire Toryism. I know that the two Ministers involved are far too intelligent and sensible to do that.
10.22 pm
Sir George Young: The hon. Member for Tyne Bridge (Mr. Cowans) urged the Government at this late stage to think again. But, with respect, he produced no compelling new arguments to persuade the Government to alter their view. I should point out that the House gave the Bill a Second Reading with a majority of 135, and at that stage we made our views quite plain and said why we felt that it was the right Bill for the new towns. Nothing has happened to alter that perception.
However, I shall deal briefly with the point that has been raised about the new towns in the north-east. The hon. Member for Easington (Mr. Dormand) said that I promised to do something. Ministers give promises very reluctantly, and I see from Hansard that I said:
"I hope to announce a decision before the House rises for the Christmas recess." — [Official Report, 20 November 1984; Vol. 68, c. 234.]
I regret that it was not possible to fulfil that hope.
It has been alleged that our consultations last year were a formality to rubber stamp our views. On Second Reading, the hon. Member for Easington said that we had a doctrinaire approach. But I think that Opposition Members will agree that we have not been doctrinaire. Clearly, the decision is difficult, but we want to take it as soon as possible. However, it is worth waiting a little in order to get the right decision.
It is worth pointing out that the Labour Government proposed to wind up Washington development corporation on 31 December 1982. That puts into perspective some of the criticisms about our action in not renewing it from 1985. Nevertheless, I realise the impact on morale as well

875
as the good work that has been done. We are quite clear that a firm decision is required. We must either confirm the target date as 31 December 1985 or replace it with a later date which is not subject to review. The corporation and its staff have been hanging in the balance for long enough. We must not prolong that period. But proper consideration of the issues and the alternatives available has taken longer than any Ministers in the Department would wish. We shall issue a decision on the future of these towns as soon as we have reached the right conclusion. I give the House that assurance. In the meantime I can only ask hon. Members who have spoken to be patient and we shall come back to the House the moment we have some news.
Question put and agreed to.
Bill accordingly read the Third time and passed.

Mineral Workings Bill
As amended (in the Standing Committee), considered.
Mineral Workings Bill
  Clause 5

    FINANCE FOR FORESTRY
    The Parliamentary Under-Secretary of State for the Environment (Mr. Neil Macfarlane): I beg to move amendment No. 1, in page 3, line 32, leave out from 'purposes)' to end of line 34 and insert—
    'where the rate of the payments is one determined by the Commissioners after consultation with the British Steel Corporation and the Ironstone Royalty Owners' Association.'.
    I have introduced this amendment, in acknowledgment of the representations made to me in Committee by my hon. Friend the Member for Kettering (Mr. Freeman), that the Ironstone Royalty Owners' Association, as well as the British Steel Corporation, should have a statutory right to be consulted about the rate of the special afforestation grant, because the association represents the landowners to whom the grant will be paid. The association, as I made clear on Second Reading and in Committee, has already been given an informal undertaking that it will be involved in the consultation, and I am happy to seek to formalise its position by means of this amendment.
    My hon. Friend also sought to have enshrined in the legislation a requirement that the rate of the special grant should be subject to an annual review. I warned him that this might present technical difficulties, and I am afraid they have proved insuperable. I hope my hon. Friend will be content to accept the assurance which I now give that, notwithstanding the absence of a statutory provision in the Bill, the rate at which the special afforestation grant is paid between 1 April 1985 and 31 March 1990 will be subject to an annual review.
    Amendment agreed to.

  Schedule 2

    THE IRONSTONE DISTRICT
    Mr. Macfarlane: I beg to move amendment No. 2, in page 10, line 33, at end insert—

    '1974 c.7

    Local Government Act 1974.

    In Schedule 6, paragraph 9.'.

    Mr. Speaker: With this amendment it will be convenient to take Government amendments Nos. 3 and 4.
    Mr. Macfarlane: These are technical amendments to tidy up the list of repeals in schedule 2.
    Amendment agreed to.
    Amendments made: No. 3, in page 10, leave out lines 34 and 35.
    No. 4, in page 10, line 38, at end insert—

    '1981 c.65.

    Trustee Savings Banks Act 1981

    In Schedule 7, in paragraph 12 the reference to paragraph 1 of Schedule 5 to the Trustee Savings Banks Act 1976.'. — [Mr. Macfarlane]

    Motion made and Question, That the Bill be now read the Third time, put forthwith pursuant to Standing Order No. 56 (Third Reading), and agreed to.

    877
    Bill accordingly read the Third time and passed.

  BUSINESS OF THE HOUSE
  Ordered,
  That, at the sitting on Thursday 10th January, Standing Order No. 3 (Exempted business) shall apply to the Motion in the name of the Prime Minister relating to European Community Fisheries Arrangements for 1985 with the substitution of One o'clock or three hours after it has been entered upon, whichever is the later, for the provisions in paragraph (1)(b) of the Standing order.—[Mr. Boscawen.]

Maternity Units
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Boscawen.]
10.27 pm
Sir John Farr: The purpose of my debate is to raise the subject of the small peripheral maternity units in some of the smaller hospitals in Britain. Very often in our major debates on the Health Service in England and Wales the smaller unit, which often gives better value to the public than the larger, more impersonal unit, is overlooked. I am compelled to raise this matter with my hon. Friend because I am concerned about what is proposed for Market Harborough general hospital maternity unit, which has 11 beds.
The value of this unit is recognised not only by the more than 5,000 people who have signed a petition to save it but by Leicester area health authority, which in February 1984 produced an admirable document entitled
"Strategic Intentions 1984 to 1994".
In this the authority saw the need to keep until 1994 the 11 maternity beds in Market Harborough. The document was entitled, "For consultation". Naturally, this met with total local support. Therefore, it was with considerable dismay and surprise that I learnt that a further document had been produced by Leicester health authority in October 1984, this time called
"A Strategic Plan for the NHS in Leicestershire 1984–94"
and described as a "draft for consultation". The proposal is to reduce by almost half the maternity provision for Market Harborough—from 11 beds to six. Eleven beds provide a professional unit; six provide emergency treatment only.
The House might ask what happened between February and October to change the area health authority's proposals. Was it a sudden surge of public opinion expressing itself instinctively, to which the health authority reacted? As the representative of Market Harborough and the surrounding villages, I assure the House that that was not what happened. Between February and October last year one of the most remarkable expressions of public opinion that I have known took place. Out of about 15,000 persons in the general hospital's catchment area, over 5,000 signed the SOBBs petition — that is the petition to "Save Our Babies Beds". I was overwhelmed by letters protesting about the rundown of beds. Between March and October I received only one letter in favour of the rundown. It was from the community health council.
The Leicestershire community health council does an excellent job, but in this case it is out of touch. For example, it has recently conducted a mass canvas of local people about organ donors. The Minister is a pioneer in this respect. He may recall my modest endeavour when I introduced a Bill designed to secure the anonimity of organ donors.
As my hon. Friend knows, the supply of organs is insufficient. The community health council has an excellent public consultation scheme. Nearly 3,000 people have been approached to find out what they think of the organ donor scheme and how it can be improved. The results, which have been sent to the Minister's office, show that the majority do not want a change in the scheme.
I have told the secretary of the Leicestershire community health council, Brian Marshall, that I support

879
what he is doing to promote the availability of organs but that the council should conduct the same public relations exercise for the Market Harborough maternity unit.
The community health council is the only supporter of the area health authority's sudden change of view. Public opinion did not cause the sudden change by the health authority. What did change it? In 1982 I was concerned about possible threats to the future of that highly successful unit. I wrote to the excellent lady chairman of Leicestershire health authority in May 1982, and Mrs. Margaret Galsworthy replied on 24 May 1982 to the effect that the authority had no plans for any closure of maternity beds in Market Harborough hospital, so far as could be foreseen.
The House will be interested to know that in the Leicester area alone it is the intention to slash the peripheral general practitioner maternity bed provision from 94 beds at the moment to 37 in 1994, a reduction of over 60 per cent. The figures include a reduction from 11 to six in Market Harborough.
I am convinced that behind the change of heart by the Leicester health authority is pressure from Trent region to centralise births. It has declined to provide new replacement GP units in the Trent region and is apparently determined to extinguish the peripheral GP maternity units altogether. In a recent leaflet it gives that as the policy of what it called its regional medical committee and backs that up by saying that it means a lower mortality rate for babies. The House accepts that priority must be given to securing the lowest possible mortality rate of babies. It is a most important factor; in fact, it is the most important factor that can be taken into consideration.
Trent region goes on to say that in the region in 1970, for instance, there were 23 baby deaths per 1,000, and that that figure had been improved to 13 per 1,000 by 1980. However, the single staggering fact, to which I call the attention of the House tonight, is that in the Market Harborough maternity unit, where it is proposed to halve the number of beds, compared with the 13 mortalities per 1,000 nationally, and 6·1 mortalities per 1,000 in comparable units, the figure is 0·67 per 1,000 deliveries. That is a remarkable statistic. It shows that the mortality level in that excellent unit is 20 times lower than the national average, yet Trent says that the unit is too small, does not work and should be closed because it is not wanted.
In the past 10 years, the unit in Market Harborough, in co-operation with consultants, has provided facilities for no fewer than 2,972 patients, of which 1,650 were delivered. During that time only two infants have died in the ward. One of them, delivered in a consultant unit, died unexpectedly of severe cardiac abnormalities, and the other was stillborn — no foetal heart was audible on admission in labour. The perinatal mortality rate of 0·67 per 1,000 deliveries compares with an average of 6·1 per 1,000 in comparable units and 13·3 per 1,000 in all maternity units. Any major change in the facilities available will lead to a deterioration in that record.
My hon. Friend is a busy, well-respected and much-admired Minister, but he should make time to rush to Market Harborough to see what is there. He should come and admire the unit. He would find a part of the National Health Service that is universally loved, admired and respected. He, like me, believes in the NHS. We want to
880
make it successful. In Market Harborough we have a small maternity unit which is an example of how we would all like the NHS to be.
We must remember that it is the mothers' opinions that count. It may be of interest to my hon. Friend to know that there is a practice at Bowden house, Market Harborough, conducted by eight doctors who work at the Market Harborough general hospital. In a recent letter they said to me that over 90 per cent. of their patients request delivery in Market Harborough hospital and that that is a conservative estimate. They said that:
"we would be unable to guarantee a bed should these cuts be made. We believe that a significant number of women would not accept delivery in Leicester, and this would result in an increase in the number of home confinements and of deliveries on the way to hospital, thereby increasing the demands on the Flying Squad and already over-stretched Ambulance Services."
My hon. Friend is aware that I have been writing to him regularly on this subject since August, and I have been approaching you, Mr. Speaker, regularly for an Adjournment debate. I have come out top of the ballot this year, for which I am grateful. That I did not introduce the debate earlier was not due to lack of interest or urgency. The matter is important to local people.
My hon. Friend wrote a courteous letter to me on 25 October. He said that
"should any closure proposals emerging from these current discussions be opposed by the CHC, these will come to the Secretary of State for final decision."
These proposals are flying in the face of public opinion, the wishes of the mothers and of expert medical opinion. The CHC is completely alone in supporting the proposals and I invite my hon. Friend to investigate the CHC's attitude, which makes it unique.
10.42 pm
The Parliamentary Under-Secretary of State for Health and Social Security (Mr. John Patten): I have listened with great care to my hon. Friend the Member for Harborough (Sir J. Fan), who has been pursuing his constituents' interests in this matter with considerable assiduity over recent months. We have had a correspondence. I am well aware of my hon. Friend's views and no one could have represented the interests of his constituents more powerfully in advance of any plans for closure or partial closure.
I hope that my hon. Friend will accept an apology at the beginning of my speech. I cannot tonight answer a number of the interesting and detailed local points that he has raised, because my right hon. and learned Friend the Minister for Health and I have to play a quasi-judicial role from time to time in cases referred to us where closure has been suggested by a district health authority. I have to reserve my position and that of my right hon. and learned Friend in case that should happen with regard to the hospital that my hon. Friend has talked about. I hope that my hon. Friend appreciates that. I am grateful for the assent that he has just indicated.
That will not stop me from expressing my opinions on the important national points that my hon. Friend has mentioned, and trying to be as helpful as I can when referring to as many of his local points as I reasonably can, subject to the proviso that I have just given.
Should any proposal such as my hon. Friend and some 5,000 of his constituents fear come forward and be accepted by the district health authority, and should that decision be endorsed by the regional health authority, my

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door and that of my right hon. and learned Friend will be open for my hon. Friend to bring representatives of his constituents to see me or my right hon. and learned Friend at the earliest opportunity. I am happy to give my hon. Friend that pledge.
In the time available to me I should like to pick up at substantial length a number of the national points that arise from the remarks of my hon. Friend and then to deal, in slightly less time, with some of the Leicestershire points. Perinatal and neonatal mortality is a subject that has concerned the House over a substantial period. The Social Services Committee has reported on a number of occasions on the problems of perinatal and neonatal mortality, the safety of mothers and the consumer interest of mothers. The Committee first looked at length in the last Parliament at the factors which may be linked with comparatively high perinatal mortality rates and considered in particular the importance of the place of birth and the facilities available at the place of birth. The all-party view to which the Committee came after taking extensive evidence, not just from professional interests but from consumer groups, was that
"an increasing number"
of mothers should
"be delivered in large units; that selection of patients"
should
"be improved for smaller consultant units and isolated general practitioner units; and that home delivery"
should be
"phased out further".
Those were the conclusions of the Social Services Committee in its second report of 1979–80.
In its reply to that report the Government welcomed the importance that the Committee gave to an increase in the number of deliveries in large units. Clearly my hon. Friend feels that the Government are unfriendly towards small units and are in favour only of large units. That is not the case and I shall seek to illustrate why. By and large, it is the Government's view, and it remains their view, that women should be encouraged to have their babies in the larger and properly staffed consultant units of district general hospitals, which can offer the whole range of obstetric, paediatric and supporting services necessary to cope with any emergencies at the time when the life of the infant is most frail and when the life of the mother may be threatened.
This view was also shared by the maternity services advisory committee, whose second report—a fascinating report — on care during childbirth was published in January 1984. However, the committee recognised that in some localities geographic factors will require the availability of what it termed "isolated" maternity units and recommended that such units, where geographic factors were a powerful influence on the provision of health care, should be equipped to a standard to cope with any of the complications that might have to be dealt with on site.
In July 1984 the Social Services Committee published its follow-up report and again recommended that the
"DHSS should do more to encourage regions, in the light of evidence available to them, to rationalise their maternity services in order to promote better standards of care as well as economy".
Again the Government concurred with that view. However, while it is our overall view that the larger unit, with the acute medical care that is available there, is likely
882
to be a factor promoting the health and welfare of mother and child, or of mother and children in the case of multiple births, it is not for the Government to make an absolute prescription for all places at all times in England.
In recent years there has been a considerable increase in the proportion of maternity beds provided in units on hospital sites — either in consultant or general practitioner units — but we must have an element of flexibility and planning. Therefore, I agree with some of the remarks made by my hon. Friend. Health authorities must strike a balance between the interests of rationalisation and centralisation in order to try to provide the most cost efficient forms of care while at the same time—which is the most important point—helping mothers and their children and, on the other hand, providing the services that are necessary for more isolated communities. They must pursue the objectives of further reducing perinatal mortality and handicap and improving the safety of their services. They must also keep under review—I am sure that the Trent region is enjoining health authorities to do this—how far policies of concentrating staff and resources in large general hospitals match the needs and wishes of mothers who use the services.
In some communities, social and geographic factors—distances, difficulties of travel, particularly in winter, and so on — strongly favour the retention of smaller maternity units for low-risk cases. It is not true that my right hon. and learned Friend the Minister for Health and I have always approved health authorities' proposals to close smaller maternity units. I can think of at least two cases in the past six months in which units were kept open after careful consideration by my right hon. and learned Friend.
If the best use is to be made of the facilities of both smaller and larger units, we need an agreed booking policy that takes into account the needs of mothers, the nature of local GP obstetric care and the availability of essential medical staff. We need an integrated booking system between the smaller and larger hospitals, so that mothers who need more acute care, as well as those who prefer to go to larger units, can go to those larger units, while mothers perhaps on their second, third or subsequent births can go into smaller units closer to home. The best decisions must be made about where mothers are to go to get the best care at the time of birth.
It is because of the care that most district hospitals and doctors devote to the system that it may appear that smaller hospitals are "safer" than larger hospitals. Perinatal mortality rates appear to be higher in large acute general hospitals. As the right hon. Member for South Down (Mr. Powell) would say, it is something of a conundrum. The reason is that generally only the mothers least at risk are put into the smaller hospitals. Reports do not usually take into account instances where the mother or baby has had to be transferred to a larger hospital because complications have arisen.
Generally, only mothers whose medical history and the progress of whose pregnancies have suggested that complications are unlikely are booked into smaller units. That is a matter of clinical practice which goes some way to explaining the apparently surprising figures quoted by my hon. Friend.
Sir John Farr: I accept what my hon. Friend says, but it does not hide the fact that the Market Harborough unit is still 12 times better than the national average for comparable establishments.
Mr. Patten: I assure my hon. Friend that such matters will be considered carefully if a decision on the hospital comes to Ministers.
Although the emphasis in recent years has been on improving the safety of maternity services by centralising — and there has been a dramatic fall in perinatal mortality rates—we must always remember the welfare and interests of the mothers. I welcome the growing awareness among health professionals that the new technology and clinical procedures that have been introduced to make labour and delivery safer for mother and baby, primarily in the larger units, should not displace the traditional concept of a healthy natural birth and the fundamental human values implicit in childbirth.
It is now widely recognised that the onus is on those practising the most up-to-date techniques of ante-natal and obstetric care to ensure that such techniques are just as acceptable to mothers as the traditional practices that they replace. However, it is critically important to realise that large units can very often provide just as homely and caring an atmosphere as the smaller hospitals. Many mothers who have been cared for in large maternity units in large hospitals speak highly of the homely and intimate quality of the care that they received there. Certainly, by
884
and large, bigger should mean safer, but bigger should certainly not, in terms of the care offered to mothers, mean more impersonal.
I was most interested to hear of the consultations in which my hon. Friend the Member for Harborough has engaged in Leicestershire. I was also grateful for the information that he gave me, in the margins, about the organ donor scheme. I agree that the health authority has published a document setting out its proposals for health care services until 1994. As my hon. Friend will be aware, any plans for closures or significant changes in use which are opposed by the local community health council must be referred to my Department for ministerial decision. However, Ministers may also call in decisions for scrutiny on their own account, even if they are not opposed by the local community health council. That has frequently happened in the past.
If at the end of the consultation process the matter is referred to the Department, we shall certainly approach with an open mind the complicated issue that my hon. Friend has raised and give full weight to the views expressed by all interested parties. I repeat my pledge that after—not before—decisions have been taken locally, my right hon. and learned Friend and I would welcome the opportunity to discuss the issues further with my hon. Friend and with constituents, doctors, mothers and representatives of interest groups in his constituency.
Question put and agreed to.
Adjourned accordingly at four minutes to Eleven o'clock.

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