Sitting of 16 January 1985

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

    Skillcentres and Jobcentres
    Mr. Strangasked the Secretary of State for Scotland what discussions he has had with the Manpower Services Commission in Scotland about its plans to close skillcentres and cut staff at jobcentres; and if he will make a statement.
    The Parliamentary Under-Secretary of State for Scotland (Mr. Allan Stewart): I attended the meeting of the Manpower Services Committee for Scotland on 10 September at which the development of the employment service was among the matters discussed and joined my right hon. Friend the Secretary of State for Employment and other ministerial colleagues in meeting members of the Manpower Services Commission in London on 6 December on this subject. My right hon. Friend the Secretary of State for Employment announced the Government's acceptance of the commission's final recommendations on 9 January in his reply to my hon. Friend the Member for Darlington (Mr. Fallon). The commission has not yet completed its consideration of the Skillcentre Training Agency's latest business plan.
    Mr. Strang: Is it not outrageous that, when hundreds of thousands of Scots are unemployed through no fault of their own and the Government should be providing more training and help, they are planning to close two skillcentres and three skillcentre annexes and to cut 70 jobcentre staff whose job it is to help the unemployed find work?
    Mr. Stewart: No, not at all. We are expanding the number of jobcentres in Scotland by a total of seven, including two in Edinburgh, in Corstorphine and Lady road. I emphasise that by tailoring provision to employment need, the Manpower Services Commission will assist more people. The figure this year of 9,600 will be increased to 17,000 in 1985–86.
    Mr. Millan: Will the Minister ensure that no decision is taken by the MSC or Ministers to close skillcentres before the Select Committee on Employment reports and before there is a debate in the House? Will he also ensure that the MSC does not pre-empt any decision, as it has for example in Govan, by running down courses and selling off machinery at knock-down prices? Does the Minister agree that what is happening there and elsewhere is a scandal?
    Mr. Stewart: As the right hon. Gentleman knows, debates in the House are not for me to decide. Unquestionably, there is over-capacity in the provision of the skillcentre network in the west of Scotland. I am, of course, aware of the Select Committee's investigation.
    Mr. Bill Walker: When considering the future of skillcentres, will my hon. Friend take into account whether jobs are available in the skills for which training is given? Surely it is nonsense to train people in skills for which jobs are not available. Will my hon. Friend also take into account the facilities and spare capacity in private companies and Government-owned bodies which could be used to train people? Is the MSC directing its attention to that aspect?
    Mr. Stewart: Yes, my hon. Friend is right. It is sensible for skillcentre courses to reflect what industry wants. That is my hon. Friend's point. My hon. Friend is also right to say that the MSC believes that there should be a variety of providers of relevant, cost-effective courses.
    Mr. Craigen: Will Scotland's industry Minister tell us how, with almost 350,000 unemployed, he can meekly sit back and allow skillcentres to close, especially when the Scottish CBI says that there are shortages in skilled labour? Moreover, does the Minister think it satisfactory that the jobless in Scotland should be left to rely mostly on self-selection procedures? Is that not really the nature of the new schemes resulting from the cut in jobcentre staff?
    Mr. Stewart: No, not at all. As I have already explained, there will be more jobcentres and the level of service will be maintained by travelling staff, the streamlining of procedures and modern technology.
    I should have thought that the Opposition would accept the general proposition that it is absurd to waste resources at skillcentres. There is a capacity for 1,980 places, of which 1,234 are in use. If the proposals are implemented, there will be 1,360 places. We must use resources effectively.
    As I said to the hon. Member for Edinburgh, East (Mr. Strang), the result of the proposals will be an increase in the number of people in Scotland being assisted with training.

    Teachers (Pay)
    Mr. Douglasasked the Secretary of State for Scotland if he will make a statement on the progress of discussions in relation to teachers' pay in Scotland.
    Mr. Donald Stewartasked the Secretary of State for Scotland if he will make a further statement on teachers' pay.
    Mr. Wilsonasked the Secretary of State for Scotland if he will make a further statement on teachers' pay.
    The Secretary of State for Scotland (Mr. George Younger): I wrote again on 8 January to the teachers' side of the Scottish joint negotiating committee for teaching staff in school education inviting it to give further thought to my earlier proposal that the SJNC should undertake a detailed examination of salaries and conditions of service together. I understand that the SJNC decided yesterday to

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    make a joint approach to me for a meeting. Although I have not yet received this letter, I shall, of course, be glad to meet its representatives.
    Mr. Douglas: Does the Secretary of State agree that the mantle with which he seeks to cloak himself — that of generous George — is wholly misplaced? Is it not true that under the Conservative Administration teachers' pay in Scotland has fallen far below the level that they would expect? Is it not a farce to suggest that the Government have no responsibility for ensuring that teachers' pay keeps up with rather than falls behind the level of inflation? Is he aware that he has managed to unite all the teaching forces in Scotland against his Government?
    Mr. Younger: I do not accept the hon. Gentleman's calculation and figures. However, I fully appreciate that teachers feel very strongly about what they perceive to be injustices, and about which they are currently complaining. By far the most reasonable way to deal with the problem is to ask the body set up for the precise purpose of considering pay and conditions of teachers to investigate the complaints.
    Mr. Donald Stewart: Why is the Secretary of State surprised by the action of the Scottish teachers after 10 years' erosion of their salary levels and what they have found to be the futility of dealing with Scottish Office Ministers? Is he aware that, far from playing the role of generous George, he is playing the role of General Jaruzelski in making the teachers dance to the tune of another country? The surprising factor is the forbearance of the teaching profession in Scotland.
    Mr. Younger: I cannot agree with the right hon. Gentleman. When comparing teachers' salaries since 1979 with other grades—something that they purport to do—they have had similar rates of increase to other local authority employees and civil servants. Therefore, the right hon. Gentleman does not have a strong point.
    As I keep saying, I have not turned down their complaints out of hand. I have suggested a way forward, and I hope that, rather than disrupt our schools, the teachers will accept my suggestion.
    Mr. Wilson: The Secretary of State says that he has not turned down the teachers' claim out of hand. In his letter of 11 December he said that he would consider the proposals
    "on their merits and in the framework of the Government's existing public expenditure plans"?
    Is not the reason why he cannot go ahead with an independent pay review that he has orders from the Treasury not to impede the Government's giveaway of taxation money orginally planned for Easter?
    Mr. Younger: I suppose that the teachers' employers are in exactly the same position as every other employer throughtout the country. If they are considering what they can give in wage increases to their employees, they must consider the resources that they have available. I do not see anything unusual about that.
    Mr. Henderson: Is my right hon. Friend aware that some teachers have made comparisons between increases in their pay and the pay of Members of Parliament? I have obtained from the Library the comparative figures for the 10 years from 1974. They show that, compared with the increase in the retail prices index, teachers's salaries have risen by 7 per cent. while the salaries of Members of
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    Parliament have declined by 20 per cent. Does my right hon. Friend agree that a more realistic comparison would be with teachers' pay south of the border? Does he recognise that the responsible settlement made last year by Scottish teachers should be fully taken into account, especially as the militancy in England achieved a slightly larger settlement? Should we not reward those who take a responsible attitude, rather than the militants?
    Mr. Younger: I am interested in my hon. Friend's comparisons, to which I shall not add, except to say that it might be interesting to discover the reaction of teachers to trying hon. Members' hours of work.
    Mr. Maxton: Does the Secretary of State remember that on television just before Christmas he said that to give an independent inquiry into teachers's pay would be to give a blank cheque to the Educational Institute of Scotland? Was that not an admission that the teachers' case is recognised fully by him and that is why he will not have such an inquiry?
    Mr. Younger: Not at all. A blank cheque can have any figure, high or low, put on it.
    Lord James Douglas-Hamilton: Is my right hon. Friend aware that there is concern about whether re-sits in 0-grade mathematics and English will take place in future? Will this point be borne in mind in any discussions?
    Mr. Younger: I appreciate the point that my hon. Friend makes. It is an important matter, which is under consideration, and I hope to announce a decision shortly.
    Mr. Dewar: It is no good Ministers deploring the damage that may come from industrial action when the right hon. Gentleman's obstinacy lies at the root of the problem. Leaving aside the curious comparison with so unrepresentative a grouping as Members of this House, does the right hon. Gentleman agree that his refusal to accept an independent pay review is, in a sense, a tacit acceptance that teachers' salaries have fallen behind comparable groupings and do not measure up to the responsibilities of the job?
    If the right hon. Gentleman is right in saying, as he consistently maintains, that teachers have done reasonably well out of recent pay negotiations, why is he frightened to set up an independent pay review, thus risking plunging us into a great deal of disruption and difficulty for pupils? Will he reconsider his proposition that any uprating in salary can be bought by the teachers' profession only at the expense of their terms and conditions of employment?
    Mr. Younger: I am glad to hear the hon. Gentleman say critical things today about the damaging of the service, because that seems to be an absolutely deplorable development — [Interruption.] I hope that, as we all have the interests of schoolchildren in mind, now that I have agreed to have the meeting which the Scottish joint negotiating committee has requested, I can take it that disruption of schools will stop, at least until after that meeting has taken place.
    The hon. Gentleman's supplementary question gives me an opportunity to make it clear, yet again, that, although I might have done so, I have not turned down the teachers' case out of hand. The impression has been given that I have, but I have not. I have disagreed with the method by which they asked for their case to be considered, but I have pointed to a way forward by which

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    all these matters, including conditions of service, can be looked into. Rather than bust up the education of our children. we should take that way forward and try to get this matter discussed.

    Coal Supplies
    Mr. Foulkesasked the Secretary of State for Scotland what steps he has taken since the begining of the mining dispute to ensure adequate supplies of coal for schools and hospitals in Ayrshire.
    Mr. Allan Stewart: Throughout the strike the National Coal Board and the coal trade have worked in close cooperation with Strathclyde regional council and Ayrshire and Arran health board to provide adequate supplies of coal for schools and hospitals in Ayrshire. Towards the end of last year action by pickets interrupted the movement of coal in Ayrshire and this irresponsible action led to some school closures. At no time were Ayrshire hospitals affected.
    Arrangements have been concluded between the National Coal Board and Strathclyde regional council to rebuild stocks and maintain deliveries, and I understand that coal supplies are now returning to normal.
    Mr. Foulkes: I am grateful to the Minister for that answer. Is he aware that, because I telephoned Mr. MacGregor, chairman of the NCB, on this issue, I was telephoned early in the morning by the Scottish director of the NCB to complain at my having had the audacity to phone the chairman? Quite apart from any question of privilege — there may well be one — do not serious doubts arise about the management structure when the director of the Coal Board in Scotland can say to me that he does not accept instructions from his chairman? Does that not underline our call that there is a need for an inquiry into the way in which Wheeler is running the Coal Board in Scotland, which is like that of a tinpot dictator?
    Mr. Stewart: The hon. Gentleman was floundering to a remarkable extent, even for him. It was surprising to hear some of his comments in the light of his advocacy on devolution in other contexts. I was not privy to any of the telephone calls to which he has referred, but I am sure that many people will have read press reports about the hon. Gentleman's praise for the chairman of the NCB.
    Mrs. McCurley: Does my hon. Friend agree that the best way to ensure adequate supplies for Ayrshire schools and hospitals is to exhort Scottish miners to return to work and end this futile strike?
    Mr. Stewart: I agree entirely with my hon. Friend. I can tell her that 850 more Scottish miners have done precisely that since the recent holidays.
    Mr. McKelvey: Is the Minister aware that the coal was prevented from being moved to the hospitals and schools by the pickets because the administrator of the Coal Board in Scotland, Mr. Wheeler, instructed the coal to be moved by scab lorry drivers, which was unnecessary and provocative? It was only when the local and agreed lorry drivers were allowed to move the coal that things returned to normal. Throughout the whole of the disagreement and strike, the miners, by agreement, have allowed coal to go to Ayrshire hospitals and schools.
    Mr. Stewart: It is hypocrisy to criticise the NCB and its workers for wanting to do their normal jobs and to excuse pickets who seek to prevent that from taking place.

    Teachers (Pay)
    Mr. Home Robertsonasked the Secretary of State for Scotland what representations he has received about his decision not to set up an independent review of teachers' pay.
    Mr. Norman Hoggasked the Secretary of State for Scotland how many representations he has received on teachers' pay since his decision not to set up an independent inquiry into teachers' pay and conditions.
    Mr. Allan Stewart: Since my right hon. Friend responded on 11 December to the request by the teachers' side of the Scottish joint negotiating committee for an independent pay review, he has received some 450 representations.
    Mr. Home Robertson: Will the Minister confirm that he has received a set of eminently reasonable representations from my constituent, Mr. John Pollock? Is he aware that I have received a substantial number of representations from parents and teachers in every part of my constituency and that every one of them has supported the EIS claim for a fair and independent review of teachers' pay and conditions?
    Mr. Stewart: I am interested to learn that Mr. Pollock is a constituent of the hon. Gentleman, but I do not think that that is a matter on which I should comment either way. In replying to the representations that my right hon. Friend has received, he has said that the SJNC could undertake a detailed review of pay and conditions of service. It has been established for about three years and its remit would include such a review, which has not yet been undertaken. That is a reasonable position for the Government to take.
    Mr. Hogg: As the Minister's reply confirms that there is no public support for the decision that his right hon. Friend the Secretary of State has taken — there is no support among the profession or by parents for his own much-vaunted initiative in this matter — does he agree that he has no case and that he should give instructions for an independent inquiry to take place without further delay, and thereby end any prospect of disrupton in the schools?
    Mr. Stewart: Teachers' pay has increased broadly in line with that of other local authority employees. During the four years from 1979 teachers' pay increased by 74 per cent. while social workers' pay increased by 63 per cent. I am surprised at the hon. Gentleman's statement. His former colleagues in NALGO would be surprised to hear him argue that teachers merit special and unique treatment not available to other local authority employees.
    Sir Hector Monro: Does my hon. Friend accept that it is important for this issue to be resolved as soon as possible? Will he confirm that the joint negotiating committee will be able to consider all the issues relating to teachers' pay and conditions of service? We hope that that body will report quickly to my right hon. Friend the Secretary of State, who can then reach a conclusion.
    Mr. Stewart: I confirm that the SJNC's remit covers pay and conditions of service. As my right hon. Friend the Secretary of State told the House in answer to an earlier question, he is prepared to meet the SJNC in the near future to discuss this matter.
    Mr. Johnston: Is the Minister aware that it is still difficult to understand why the Secretary of State has

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    refused to set up an independent pay review? Obviously, such a review would not be mandatory. Clearly, an objective analysis would allow a fair solution to be found more easily. Such an analysis would avoid the inflaming of feeling—suoh as we have seen already—the bust up that the Secretary of State has just criticised, and gratuitous damage to our children's education.
    Mr. Stewart: It would not be right to pass the job of making recommendations to an ad hoc group which had no responsibility for implementing them. Established machinery can undertake such a review, and I believe that that is a perfectly sensible proposition.
    Mr. O'Neill: Does the hon. Gentleman appreciate that, apart from the purely financial aspects of a strike, the Minister's intransigence is jeopardising the valuable work that has been done in developing the standard grade? That work has been done without extra salaries being paid to the teachers involved. The teachers are now saying that enough is enough and they want to be paid for the work they have done. They feel that they, as opposed to the other professions in Scotland, are entitled to be rewarded for that work.
    Mr. Stewart: My right hon. Friend has made provision for the extra work load carried in developing the standard grade. Last week we announced further extra assistance for the teachers involved in phase one. I deplore the disruption that has occurred during the introduction of the standard grade. It is ironic that the EIS asked the Government to speed up the implementation of the standard grade, and that the teachers are now disrupting reforms which are widely agreed to be desirable in the interests of Scottish people.
    Mr. Malone: Is my hon. Friend aware that it is desirable that pay and conditions should be linked in any negotiations? Is it not therefore disgraceful that the EIS has rejected out of hand an offer to discuss conditions? Will my hon. Friend clear up a misconception felt by many of my constituents—a misconception that appears to be shared by the hon. Member for East Lothian (Mr. Home Robertson)—namely that the EIS wants an independent review of pay and conditions? The EIS is interested only in pay.
    Mr. Stewart: My hon. Friend is right to say that EIS has asked for an independent review solely of pay. That request constrasts with the early-day motion tabled by some Opposition Members which relates to pay and conditions of service. I believe that it is perfectly reasonable to link pay and conditions of service and to conduct a detailed review of both within the existing collective bargaining machinery.
    Mr. Ewing: Is it not a fact that the Under-Secretary of State wants to review pay and conditions in the context of the Government's pay policy — in other words, to get the best out of teachers' conditions and to give the worst return to teachers in the form of salaries? Is the hon. Gentleman aware that the blame for the disruption in Scottish education lies firmly at his door and the door of the Secretary of State? In view of that, will the Minister confirm that when the Secretary of State goes to the SJNC meeting he will go to negotiate and not, yet again, to dictate?
    Mr. Stewart: My right hon. Friend will, of course, listen carefully, as he always does, to the points that the SJNC put to him. Disruption in Scottish schools lies firmly at the door—
    Mr. Robert Hughes: Of the hon. Gentleman.
    Mr. Stewart: —of those who are causing the disruption. I hope that Scottish teachers will realise that that disruption does not just cause damage to the education of Scottish pupils, but it cannot possibly do the teachers case any good.

    Glengarnock Steelworks
    Mr. Lambieasked the Secretary of State for Scotland if he will meet the chairman of British Steel to discuss the recent announcement on the future of Glengarnock steelworks.
    Mr. Younger: I met the chairman of the British Steel Corporation on 29 November, when we had a wideranging discussion of the corporation's activities in Scotland. I have no plans for a further meeting in the near future.
    Mr. Lambie: I appeal to the Secretary of State to meet the chairman of the British Steel Corporation again to discuss the case for retention. It will be supported at a meeting tomorrow with his hon. Friend the Under- Secretary of State, the Member for Eastwood (Mr. Stewart), by the steel workers' acting committee and councillors from Strathclyde and the regional council. It will show that Glengarnock steelworks can be viable, competitive and profitable if given a chance.
    Mr. Younger: As the hon. Gentleman will be aware, I am worried about this matter. I am glad that my hon. Friend is meeting those representatives tomorrow. I know that he is looking forward to hearing the case that they put forward.
    Mr. Corrie: If my right hon. Friend meets the chairman of the British Steel Corporation again, will he point out that it will cost more to close the works than to keep them open? Is my right hon. Friend further aware that with its new proposals the work force is pricing itself into jobs by cutting costs in line with Government policy, to its own detriment? If the British Steel Corporation is determined to close these works and get rid of Glengarnock, will he suggest that they should be kept open to give a private buyer a chance to see whether the firstclass work force can keep its jobs?
    Mr. Younger: I am grateful to my hon. Friend for keeping me so closely informed of his constituents' anxiety about this matter. The decision to close, which I greatly regret, is one entirely to be made as an operational matter by the British Steel Corporation. There is no doubt about the commitment of the work force. I am sure that the facts and figures that it will produce will be listened to with the greatest of interest by my hon. Friend and the British Steel Corporation.
    Mr. Dewar: May I take up strongly with the right hon. Gentleman the point that he made about it being an operational decision for the British Steel Corporation? If that is the Government's final view, I fear that the works may have a short future, because the British Steel Corporation seems determined, despite the far-reaching

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    and imaginative proposals which will eliminate the current deficit in the plant, to continue with its closure plans. Will the Secretary of State try to persuade his colleagues and himself, sadly, in view of what he has just said, that the Government cannot shelter behind the concept that it is a bold management decision by the British Steel Corporation, given the impact that the loss of a further 200 key jobs will have on an area of high unemployment? I hope that he will reconsider the matter, because if he does not the outlook is black.
    Mr. Younger: I sympathise with the whole position, of course. I do not accept, and nor would his own Government, the hon. Gentleman's point that this is anything other than an operational decision for the British Steel Corporation. That has always been the way that such matters have worked. We cannot appoint people to manage an industry and then second-guess them on everything that they do. For that reason the representations should be made to the British Steel Corporation, and I know that that is where they will be made.

    Dornoch Firth and A9
    Mr. Maclennanasked the Secretary of State for Scotland if he will seek to accelerate the construction of the Dornoch Firth crossing and the improvement of the A9 through Caithness and Sutherland.
    The Parliamentary Under-Secretary of State for Scotland (Mr. Michael Ancram): My Department is already proceeding as quickly as possible with preparations for the Dornoch Firth crossing and other improvements on the A9 through Caithness and Sutherland. Progress will depend upon the resolution of objections to published proposals and on the extent to which funds can be made available within the Scottish trunk road programme.
    Mr. Maclennan: Is the Minister aware that today the unemployment levels in Sutherland are higher than anywhere in Scotland? Is he also aware that the A9 road north of Tain is a woefully inadequate arterial road which needs capital expenditure urgently, that almost no spending is planned for it in the next financial year? Does he realise that by starting the Dornoch Firth building works he could cut unemployment in Sutherland and Caithness by 10 per cent. and give a filip to the long-term future of the local economy?
    Mr. Ancram: I do not know where the hon. Gentleman got his information about no projected spending on the A9. In the years 1985 to 1989 there are seven improvements planned for the A9 north of Dornoch, at a cost of about £11 million, and six improvements planned for the road south of Dornoch, also at a cost of £11 million. Obviously, the bridges will be of benefit, not only to travellers on the A9 but to local people. I hope that the hon. Gentleman accepts that it is a large and costly scheme requiring extensive design work, and that it will make a very big claim on the resources available.
    Mr. Michael Forsyth: Does my hon. Friend, in considering improvements to the A9, ensure that priority resources are given to the Dunblane bypass? Will he be in a position shortly to announce the line of route?
    Mr. Ancram: I congratulate my hon. Friend on using the opportunity to press, as he does so assiduously, the
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    interests of his own constituency with regard to that bypass. As he appreciates, we have said that that bypass will be built in due course. Obviously, we are not yet in a position to announce the line.
    Mr. Ewing: Does the Minister agree that the interest of the hon. Member for Stirling (Mr. Forsyth) in improving the bypass from Dunblane is to allow him to make a quick getaway?
    Mr. Ancram: I think that my hon. Friend's concern is to see communications improved right across Scotland. I know that that has never been of particular interest to the hon. Member for Falkirk, East (Mr. Ewing).

    Airports (Privatisation)
    Mr. Bruceasked the Secretary of State for Scotland if he will make a statement on the implications for Scotland of the privatisation of Scottish airports.
    Mr. Ancram: The Government's aim is to ensure adequate airport capacity, provided as efficiently and costeffectively as possible, to meet Scotland' s needs. Particular proposals for privatisation will be pursued with this objective in mind.
    Mr. Bruce: Will the Minister acknowledge that the management of the four main airports in Scotland by the British Airports Authority has been of considerable benefit, and that the retention of that management group and the link with the BAA will continue to be of benefit to Scottish people? Is the Minister aware that, in the particular case of Aberdeen airport, Grampian regional council — which, as the Minister knows, is Conservative-controlled—has expressed doubts as to the case for privatisation?
    Mr. Ancram: The hon. Member must be aware that no decisions have yet been taken concerning privatisation of the BAA airports in Scotland, and at this time it would be improper for me to speculate on how that might happen.
    Mr. Robert Hughes: Is the Minister aware that there is no case whatever for privatising the airports'. Will he further accept that the majority opinion is that the four major airports in Scotland should not be sold off as an entity but as a group which contains Heathrow, otherwise business will be very seriously disrupted?
    Mr. Ancram: The hon. Member is obviously trying to get me to speculate in a way that I have just said I will not do. I remind him that privatisation often creates greater efficiency and savings for those who use the services.
    Lord James Douglas-Hamilton: Will my hon. Friend bear in mind that the Sottish airports run by the CAA in the Highlands and Islands and by my constituents in the CAA headquarters in Edinburgh, West and elsewhere in Scotland are run very economically, bearing in mind the essential lifeline service that they provide, and that it is extremely unlikely that any other body could run them as economically in the circumstances?
    Mr. Ancram: My hon. Friend is also pre-empting decisions that have yet to be taken. Obviously, we shall be testing, and are indeed testing, the market for the proposition at the moment.
    Mr. Wallace: The Minister will be well aware that in a written answer given to me by the Department of

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    Transport earlier this week it was indicated that the Scottish Office, along with others, was considering proposals for six airports in the Highlands and Islands. Is there a distinction between the proposals and firm offers for sale, which were due in by 31 December last? If so, what is that distinction?
    Mr. Ancram: A number of offers and inquiries have been received and are being considered. Obviously, those offers and inquiries differ one from the other.

    British Leyland, Bathgate
    Mr. Dalyellasked the Secretary of State for Scotland if he will make a statement on his latest discussions on the future of British Leyland, Bathgate.
    Mr. Allan Stewart: As the hon. Member will be aware from the answer that I gave him last month, my right hon. Friend and I are doing everything that we can to find a successor enterprise for the British Leyland plant at Bathgate, and to create new job opportunities for the West Lothian area.
    Mr. Dalyell: Is Mr. Charles Nickerson getting every encouragement from the Scottish Office?
    Mr. Stewart: I can confirm that my officials keep in regular touch with both of the companies that have been mentioned, and have been in contact within the past few days.
    Mr. Robin Cook: When the Minister examines what he can do for job opportunities in West Lothian, will he bear in mind the fact that in 1980 West Lothian received £7 million in housing and rate support grants, and in 1986 it will receive the grand total of £700,000 from both sources? Does the hon. Gentleman not realise that that sharp drop in outside support will gravely hinder the district council in responding to the tragedy of Bathgate and mean fewer jobs in West Lothian?
    Mr. Stewart: I am a firm supporter of the Government's housing policies. I thought that the hon. Member for Livingston (Mr. Cook) would mention one of the most important factors in the West Lothian situation, which has been the outstanding success of the new town in attracting a wide range of new companies and providing job opportunities for people not just in Livingston but from elsewhere in West Lothian.
    Mr. Tom Clarke: Does the Minister agree that it is absurd that there should be any doubt about the future of the plant, in view of the demand for those vehicles in Third world countries? Does he accept that there is an urgent need for a meeting between his right hon. Friend the Secretary of State for Scotland and the Minister for Overseas Development so that a conclusion can be reached that would be helpful to the workers of Bathgate as well as those who are starving in developing countries?
    Mr. Stewart: The point is that the overseas demand for Leyland's products has declined sharply in recent years. It is true that there has been a marginal improvement in demand recently, but British Leyland has more than enough capacity at its Leyland plant to accommodate even substantially increased demand for trucks.
    Mr. Ewing: Is the Minister aware that the Nickerson proposals have the full support of the shop stewards at the British Leyland Bathgate plant? Will he give the House an
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    assurance that the matter will be brought to a conclusion as speedily as possible to remove the uncertainty, not only from the British Leyland plant at Bathgate, but from the whole of that local authority area, which is suffering badly as a result?
    Mr. Stewart: I can assure the hon. Gentleman that we are as anxious as anybody else to reach a satisfactory conclusion. I can confirm that my Department is in close touch with Mr. Nickerson.

    Rural Bus Services
    Mr. Kirkwoodasked the Secretary of State for Scotland if he will make a statement on the effect of planned Government legislation on Scottish rural bus services.
    Mr. Ancram: Under existing policies many services have been curtailed or withdrawn. Our proposals offer the prospect of better services by removing outdated restrictions and encouraging operators to offer new ways of meeting needs. To overcome any transitional difficulties a rural bus grant will be available to all operators of rural services for a four-year period and an innovation grant scheme will encourage the development of new initiatives.
    Mr. Kirkwood: Is the Under-Secretary of State aware that officials in his Department revealed recently that an internal departmental study shows that, whereas there might be savings in subsidies in the Lothians and Strathclyde, in the rural areas of Scotland local authorities will eventually have to pay more in subsidies? I challenge the hon. Gentleman to publish that survey so that we can look at the facts. Can he give the House an assurance that if, eventually, that transpires to be the case and rural regional authorities in Scotland have to pay more in subsidies, he will make sure that the finance is made available rather than allow routes to contract further?
    Mr. Ancram: The hon. Gentleman sounds as if he believes that the bus industry and the use of buses in Scotland, particularly in the rural areas, is increasing. Perhaps some of his comments on the matter would stand in a better light if that were so, but we are working against a history of decline in bus usage and in the whole bus industry in Scotland, particularly in the rural areas. I believe that by putting the subsidised routes out to tender efficiency will be increased and a better service will be provided at a better cost.
    Mr. Henderson: Is my hon. Friend aware that there has long been anxiety about the quality of rural bus services and that the announcements that he has made will be very welcome to those who live in rural areas? Is he aware that the result of an experiment in deregulation in Herefordshire was to reduce subsidy, to increase services and to reduce fares, which is surely what we want?
    Mr. Ancram: I am grateful to my hon. Friend for bringing that example to the notice of the House. If subsidised routes are put out to tender, and if they are efficiently run at present and are as cost-effective as possible, obviously those same operators will continue, but if there is a better and cheaper way of running them, tendering will provide that.
    Mr. Steel: Before the Secretary of State comes to any final conclusions on the matter, will he undertake to examine the financing of the two community bus services

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    that exist in Scotland, one in the constituency of my hon. Friend the Member for Roxburgh and Berwickshire (Mr. Kirkwood), and one in my constituency, recognise what a cost-effective and inexpensive way this is of providing a service, and Consider the assistance that he could give with replacement vehicles?
    Mr. Ancram: The right hon. Gentleman makes a good point, and it is certainly a point that was part of the White Paper published by the Government, that innovation and new ideas, particularly in rural areas, are important. Indeed, he has examples in his own constituency and in his own area of such ideas providing improved services. It is for that reason, as I have already said, that we shall be introducing an innovation grant scheme to try to encourage further such ideas.
    Mr. Bill Walker: Does my hon. Friend agree that in Scotland in particular the rural bus service has been in savage decline for 25 years? Many parts of my constituency are not served by any public transport. Therefore, to continue with the status quo could only mean fewer and fewer services being made available to my Highland constituents. The proposals that the Government are making are therefore an attempt to reverse this declining situation.
    Mr. Ancram: I am grateful to my hon. Friend for making that point so strongly. It is precisely because we have been faced with a history of decline in the bus services—and as constituency Members most of us will know from the complaints we receive that people are not satisfied with the bus services they have at present—that we believe that our proposals offer the one opportunity of reversing that trend. It has been noticeable that in all the criticism that has been made of the White Paper not one alternative idea for improving bus services has been put forward.
    Mr. Millan: The Minister said that it is his belief that the proposals will lead to an improvement in bus services. However, the fact is that neither the Minister nor his officials have ever run a bus service. It is impossible to find anyone in Scotland who has run a bus service who believes other than that these proposals will be disastrous, not only for rural bus services, but for many other bus services as well.
    Mr. Ancram: I am sure that the right hon. Gentleman will remember that almost precisely the same criticisms were made of the express coach services before deregulation. The use of those coaches has proved how wrong that criticism was.
    Mr. Craigen: What guarantee will the Minister give to the rural communities that he will save their buses? He keeps telling the House about the money that he has allocated for innovation grants. Why is it that COSLA views as an insult the amount of money that he is making available to Scotland to retain rural bus services?
    Mr. Ancram: As the hon. Gentleman knows, I met the transport sub-committee of COSLA on Monday. I made it clear to the sub-committee that throughout the United Kingdom a grant will be paid in the rural areas within the transition period of four years. That will start at a rate of £20 million, reducing on a graduated scale to £5 million in the last of those four years. When the hon. Gentleman talks of saving buses, he speaks as if that is what is happening in the rural areas. The rural areas in particular
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    have suffered from reducing bus services. These proposals at last give them a chance of seeing the sort of services that they want.

    Hepatitis B Virus
    Mr. George Robertsonasked the Secretary of State for Scotland what action he is taking to protect police officers, ambulance personnel, doctors and nurses from the risk of catching hepatitis B virus.
    The Parliamentary Under-Secretary of State for Scotland (Mr. Allan MacKay): Guidance was issued by the Scottish Home and Health Department on 3 December 1984 on precautions to be taken to protect health care personnel from the risk of contracting hepatitis B in the course of their work. We are at present considering whether guidance should be given to the police service on this matter.
    Mr. George Robertson: Does not the serious increase in cases of the deadly hepatitis B show that the increasing drug epidemic is spreading its effects to the people employed in the police, ambulance and hospital services who are obliged to deal with addicts? Is it not a fact that there is genuine concern in these services that complacency in high places has been shown because such instructions came so late in the day? Is the Minister convinced that the steps now taken will give the appropriate protection to those who come into contact with drug addicts?
    Mr. MacKay: It is indeed a serious problem, and it is worth stressing that an increase in the incidence of hepatitis B is one of the consequences of drug addiction. We are following the advice of the expert joint committee on vaccination and immunisation. We are also considering the point about police officers, in consultation with the Association of Police Officers. There is a very successful immunisation against hepatitis B which can be carried out on anyone who thinks that he has been in contact with sufferers in such a way as to be in danger of contracting the disease.

    Trunk Roads (Midlothian)
    Mr. Eadieasked the Secretary of State for Scotland if he will make a statement about his proposals with regard to trunk roads in Midlothian, and especially the A7 and A68.
    Mr. Ancram: The major schemes planned for possible starts in the period 1986–89 are the A7 Dalkeith by pass and Middleton bypass, the A68 Dalkeith bypass, and the A702 Hillend improvement. A minor improvement to the A68-A6137 junction is planned for this year.
    Mr. Eadie: Is the Minister aware that the A7 bypass is essential for industrial development in Midlothian and that the A68 bypass is urgently needed for Dalkeith? Members of Midlothian council have been told that the A7 bypass is subject of reassessment because the previous assessments were incompetently handled. How does that square with the Minister's answer? Is it not time that this bungling incompetence ceased so that the bypasses can be built?
    Mr. Ancram: For the A7 project, the last economic assessment produced a negative result. Lothian regional council, the agent authority, has been asked to carry out

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    a reassessment using different traffic assignments to see whether an economic and viable scheme can be produced. I understand that this is because in past assessments insufficient account was taken of the future effects of the Edinburgh outer city bypass on traffic flows at Eskbank. If all the work is completed we would still hope to start the scheme before 1989.

  SOLICITOR-GENERAL FOR SCOTLAND

    Trials (Tape Recordings)
    Mr. Dalyellasked the Solicitor-General for Scotland whether, in the light of the case of Sergeant Jamieson of Bo'ness, he will discuss with procurators fiscal the use of tape recordings as evidence in Scottish courts.
    The Solicitor-General for Scotland (Mr. Peter Fraser): I understand that the hon. Member's question relates to the tape recording of evidence given in summary trials in Scottish courts for use in appeals. I have no plans at present to discuss such tape recordings with procurators fiscal in the light of the case to which the hon. Gentleman refers.
    Mr. Dalyell: Is the objection based on cost?
    The Solicitor-General for Scotland: The hon. Gentleman may recall that when he first raised this with the previous Lord Advocate he suggested changes in the way in which adjustments to stated cases were put before the Appeal Court. He will also recall that those very changes were introduced in the Criminal Justice (Scotland) Act. I am satisfied that in that respect the appeal procedure is now working very much better.
    Mr. Maxtonasked the Solicitor-General for Scotland when he will meet procurators fiscal to discuss the use of tape recordings as evidence in Scottish courts.
    The Solicitor-General for Scotland: I have no plans at present to do so. After evaluation of the experiment carried out on behalf of the Scottish Home and Health Department between 1980 and 1983 in Falkirk and Dundee, and latterly also in Aberdeen and part of Glasgow, it will be for my right hon. Friend the Secretary of State to decide whether tape recordings of police interviews should be introduced in Scotland on a formal basis. Thereafter it may be appropriate for my noble and learned Friend the Lord Advocate and myself to meet procurators fiscal or to issue guidance to them.
    Mr. Maxton: Is the Minister aware that promises were made in Committee on the Criminal Justice (Scotland) Bill to the effect that the use of tape recordings would be introduced as soon as possible to provide some safeguard against the wrongful use of detention? When will that take place, or is the delay to continue indefinitely?
    The Solicitor-General for Scotland: I well recall the considerable debate that took place on tape recording and the subsequent agreement that an experiment should take place, which was then carried out. The hon. Gentleman will also be aware that my right hon. Friend the Secretary of State for Scotland has already told the House that the Government intend to publish the results of the experiment in the form of a consultation paper before any final decisions are taken about the future of tape recording of police interviews in Scotland.
    Mr. Fairbairn: Does my hon. and learned Friend appreciate that tape recording has resulted in grave difficulties in the proper presentation of evidence for the conviction of those who are guilty and that if it were introduced it would result in an impossible situation—
    Mr. Maxton: The hon. and learned Gentleman was down there on the Front Bench making the promises.
    Mr. Speaker: Order.
    Mr. Fairbairn: —in which the police would never know what evidence was acceptable or admissible or what questions were allowable but not admissible. The result would be that many guilty people would be acquitted, and the innovation would be of no benefit to the innocent.
    The Solicitor-General for Scotland: I am bound to accept that, after the introduction of the tape recording of police interviews, a number of cases came before the courts that probably made it more difficult for police officers to understand how far they could go in the examination of suspects. However, following the first reference by the Lord Advocate to the Court of Appeal, the situation has been clarified for police officers. After what was said by the Lord Justice General, I hope that police officers understand just how far they can go, what questions would be fair for them to put to suspects at the police station and which, on the other hand, would be improper.
    Mr. Maclennan: Why has so much time elapsed since the conclusion of the experiment without the Government letting us know their own views?
    The Solicitor-General for Scotland: The results of the experiment are being collated. My right hon. Friend the Secretary of State for Scotland has made it clear that those results will be published for wider public consultation in the form of a consultation paper. The experiment was first set up in two places and subsequently extended to Aberdeen and Glasgow. This is a difficult matter and the Government are proceeding in a sensible and cautious way in considering the introduction of such changes.
    Mr. Dewar: The Solicitor-General for Scotland must accept that, even by the standards of this place, and bearing in mind the movement of Governments, the time lag has been quite noticeable. Will he study the written answer in the Official Report of 10 January giving details of the favourable experiences in Leicester and, I believe, five other areas of England, where experiments have been conducted? After five or six years, we should have at least have reached the stage of formal consultation. When will the consultation paper be published?
    The Solicitor-General for Scotland: That is a matter for the Secretary of State for Scotland. As I have already made clear to my hon. and learned Friend the Member for Perth and Kinross (Mr. Fairbairn), it has taken sometime for cases to come before the appeal courts that clarify the rights and duties of police officers in conducting interviews. That being so, I do not consider that there has been undue delay in carrying out a difficult and important experiment.
    Mr. Speaker: Order. In fairness to the hon. Member for Edinburgh, Leith (Mr. Brown), whom I did not see rise, I will, exceptionally, call him now.
    Mr. Ron Brown: Will the Solicitor-General for Scotland apologise to Mr. David Hamilton and pay him the appropriate sum of compensation for the period that he spent in gaol?
    The Solicitor-General for Scotland: Mr. Hamilton was brought before the court in Edinburgh shortly before Christmas. He was allowed the opportunity of a fair trial before a sheriff and a jury, and he was acquitted. I believe that justice was done in the normal way, and that the hon. Gentleman should be satisfied.

    Coal Industry Dispute
    Mr. Foulkesasked the Solicitor-General for Scotland how many people charged with offences arising out of the mining dispute have been refused unconditional bail; and, of these, how many had previous criminal convictions.
    The Solicitor-General for Scotland: As at 9 January 1985, 20 persons had been remanded in custody after appearing in court charged with offences arising out of the mining dispute. Of the 20 persons, two were subsequently released on appeal and one immediately changed his plea to that of guilty. As some persons still await trial, it would be inappropriate to release information about previous convictions. Information on the imposition of any special conditions of bail is not available centrally.
    Mr. Foulkes: Will the Solicitor-General for Scotland confirm that it is not normal to refuse unconditional bail for first offenders and that, by doing so, the courts—especially the sheriffs courts at Dunfermline and Kilmarnock — are acting in a political manner that is quite unacceptable and are deliberately trying to intimidate pickets and limit their activities? Will he confirm that such behaviour is improper, and say what action he intends to take?
    The Solicitor-General for Scotland: The only thing that I should have thought improper is the hon. Gentleman's attempt to attack sheriffs—
    Mr. Foulkes: I am protecting my constituents from them, and the Solicitor-General should be as well.
    Mr. Speaker: Order.
    The Solicitor-General for Scotland: The hon. Gentleman knows that that is not the case. If people believe that their applications for bail should not have been refused, there is a clear and speedy appeal procedure to enable them to have the bail decision reviewed by a High Court judge. As I said in my original answer, on the two occasions when that has been done, the appeals have been sustained.
    Mr. McKelveyasked the Solicitor-General for Scotland how many prosecutions related to the coal dispute have been dealt with by Kilmarnock courts to date.
    The Solicitor-General for Scotland: As at 9 January 1985, 92 prosecutions for offences arising out of the mining dispute had been dealt with in Kilmarnock courts.
    Mr. McKelvey: Notwithstanding the answer that the hon. and learned Gentleman gave my hon. Friend the Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes), does he share the anxiety that many of us feel that there is a hint in some press reports that there has been some political collusion in regard to miners arriving at courts and being tried? There should be some form of inquiry into police activities in Ayrshire during the strike and how matters have been dealt with in court.
    The Solicitor-General for Scotland: If the hon. Gentleman is making allegations about the conduct of judges in Scotland concerning political interference in the administration of justice, he should do so through a substantive motion to be presented to the House, rather than rely on repeating broad and unfounded allegations without giving any detail of the circumstances in which such political motivation is said to have occurred.

Questions to Ministers
3.32 pm
Mr. Peter Hardy: On a point of order, Mr. Speaker. You might be aware, Sir, that some English hon. Members think that the Government's forestry policy is deplorable. In view of that, could you look into the new circumstances that have developed as the Government have transferred forestry responsibilities to the Secretary of State for Scotland? Is it not clear that our Scottish colleagues have quite enough to do in representing their constituencies without encouraging English Members to intervene in Scottish questions to pursue this matter? In view of the implications of the change, would you examine the matter urgently?
Mr. Speaker: The issue of who is responsible for answering questions is not for me. I noted the question tabled by the hon. Member for Wentworth (Mr. Hardy)—No. 19—and I am sorry that we did not reach it.
Mr. Willie W. Hamilton: On a point of order, Mr. Speaker. You will have noticed, Mr. Speaker, that, of the 36 questions which were tabled today for oral answer, only four were in the names of Conservative Members. As that demonstrates Conservative Members' singular lack of interest in all matters appertaining to Scotland, why do you think it worth while to call them to ask supplementary questions? They have asked 12 today on questions that they did not bother to table.
Mr. Speaker: I try to be fair to the House and am the first to appreciate that there are more Scottish Members on the Opposition side than on the Government side. If the hon. Member for Fife, Central (Mr. Hamilton) examines the Order Paper, he will see that, with the exception of those hon. Members who tabled question No. 19, which has already been mentioned, question No. 23, question No. 24, question No. 27—the hon. Gentleman's—and question No. 31, all right hon. and hon. Members present in the Chamber were called today.
Mr. Hamilton: Not me—I was not called.
Mr. Dick Douglas: On a point of order, Mr. Speaker. I hesitate to raise this matter, as I
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probably could have written to you about it, but it affects virtually every right hon. and hon. Member. You cannot have failed to notice, Mr. Speaker, that on today's Order Paper, many right hon. and hon. Members are seekers after wisdom in trying to elicit from the Prime Minister her official engagements for 29 January. There are well over 100 such questions. Would you reflect on the fact that, if there is a possibility of only the first five questions on the Order Paper being aired, it is tantamount to a lottery? Why do we not consider making a change so that Members who wish to ask the Prime Minister on a Tuesday or a Thursday open questions — that is what they are — have their names put in a lottery and Members who wish to ask specific questions are not denied the opportunity? Perhaps there might be an extension of Question Time. We have really institutionalised this practice which takes up a lot of time for Members, printers and others. The practice is unproductive, unacknowledged and not understood outside the House.
Mr. Speaker: The answer to that question is that it is entirely up to right hon. and hon. Members as to what questions they put down to the Prime Minister. [Interruption.] Well, it is. It is up to them whether they put down definitive questions or open questions. Anyway, all these questions go into what I understand is called the shuffle. To that extent it is a lottery as to whether one comes out early or late. The matter is entirely in the hands of hon. Members. If the hon. Gentleman feels strongly about it, he might well raise it with Procedure Committee.
Mr. Nicholas Fairbairn: On a point of order, Mr. Speaker. Is it in order for an Englishman who represents Central Fife, who has no residence in Scotland and who normally lives in England, to complain about the activies of Scotsmen? Is that not contradicting the legislation on racism of which he is such an adherent?
Mr. Norman Buchan: Further to that point of order, Mr. Speaker. Is it proper to say that anyone who lives in a castle is properly domiciled in Scotland?
Mr. Speaker: I will not get myself involved in this. So far as I am concerned, the hon. Members represent Scottish constituencies.

Leaseholders (Choice of Insurers)
3.36 pm
Mr. Robin Corbett: I beg to move,
That leave be given to bring in a Bill to allow a leaseholder to choose the company with whom he insures his dwelling from a list of approved insurance companies.
This is a small but none-the-less important Bill. Its purpose is to extend freedom of choice over property insurance to the leaseholders of about 1,400,000 flats and homes in England and Wales to whom this is denied. Landlords can and do dictate the company with whom leaseholders are required to insure. Certainly there is financial gain for the landlords by way of commission. It is not always the case that the commission is translated into lower premiums for the leaseholders. It may be argued that this compulsion is in the best interests of leaseholders who, where large numbers of properties are involved, can get acceptable cover for discounted premiums. That is about the best face which can be put on this dubious practice.
Let me give an example of what happens in practice, helpfully provided to me through the Consumers Association. Fountaine Freeholds Limited, which inconveniently operates from a post office box number in St. Helier, Jersey, wrote to a leaseholder saying it had bought the freehold of the property. The letter said:
"We have specific requirements as to Insurers and shall notify you of these in due course. In the meantime, and as so required by your Lease, please let us have your existing Policy of Insurance and the current receipt for premium."
A separate undated letter to the leaseholder said:
"Under the terms of your lease, you covenant with your Lessors (that is us) to insure your house and all other buildings which may be upon the land in the joint names of the Lessors and Lessees in some Insurance Office to be named from time to time by the Lessors to the full value thereof. Previous Lessors did not have a policy of directing insurance but with a view to good Estate Management, the policy of this Company is to have all freeholds owned by us insured in one office."
It then added threateningly:
"It may well be that neither you nor your Building Society will want to change insurers. We must make it very clear that no Building Society has the power to insist that you insure with any particular Company. We, as your Lessors, do have such a power"—
the next words are underlined—
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"and we shall insist that our nomination be followed."
The letter went on:
"those who fail to carry out our direction as to insurance, will commit an immediate and serious breach of covenant in respect of which we shall serve Notice upon the Lessee under Section 146 of the Law of Property Act 1925 with a view to the commencement of proceedings to forfeit the Lease."
It warned:
"Your Lease also contains a provision for the Lessee to pay all the Lessors' costs, charges and expenses which may be incurred by the Lessors in or in contemplation of any such proceedings. These costs would be substantial."
This high-handed action is all the more unacceptable in this day and age, because the cover insisted on by the nominated company was at the standard rate of 15p per £100—no bargain there for the leaseholder, but a nifty commission for the heavy-handed landlords.
As the British Insurance Brokers Association says about the lack of choice of insurers:
"Members of the public … could be forgiven for feeling that they are being forced to purchase something they do not want … They find themselves locked into a long-term financial arrangement which denies them a choice of borrowers from another institution".
This practice is outrageous, unfair and extortionate. My Bill will put paid to it by insisting that leaseholders have the choice of not less than three insurers. This will help householders, encourage proper competition and will enable brokers and insurance companies to be able to bid for business which is now cosily enforced with the threat of the loss of a home to the leaseholders of almost 1·5 million flats and houses in England and Wales.
Question put and agreed to.
Bill ordered to be brought in by Mr. Robin Corbett, Mr. Bryan Gould, Mr. Lawrence Cunliffe, Mr. Tony Blair, Mr. Frank Dobson, Mr. Mark Fisher, Dr. John Marek, Mr. Stuart Randall, Mr. Allan Rogers, Mr. Clive Soley and Mr. Ken Weetch.

Leaseholders (Choice of Insurers)
  LEASEHOLDERS (CHOICE OF INSURERS)
  Mr. Robin Corbett accordingly presented a Bill to allow a leaseholder to choose the company with whom he insures his dwelling from a list of approved insurance companies. And the same was read the First time; and ordered to be read a Second time upon Friday 1 February and to be printed. [Bill No. 59.]

Rate Support Grant (England)
3.42 pm
The Secretary of State for the Environment (Mr. Patrick Jenkin): I beg to move,
That the Rate Support Grant Supplementary Report (England) (No. 2) 1984/85 (House of Commons Paper No. 81), which was laid before this House on 11th December, be approved.
It may, Mr. Speaker, be for the convenience of the House if we also discussed the following motions:
That the Rate Support Grant Supplementary Report (England) (No. 3) 1983/84 (House of Commons Paper No. 82), which was laid before this House on 11th December, be approved.
That the Rate Support Grant Report (England) 1985/86 (House of Commons Paper No. 142), which was laid before this House on 20th December, be approved.
Mr. Speaker: Is that acceptable to the House?
Hon. Members: Aye.
Mr. Speaker: So be it.
Mr. Jenkin: Before I describe the rate support grant reports, I should like to set them in context and remind the House of some of the facts about local authority current spending. This year in England—in this debate we are concerned only with England—such spending amounts to £24 billion, more than a fifth of total public spending. Its significance to the Government's overall economic strategy is, therefore, obvious, and both we and the previous Labour Government have rightly treated local Government current spending as a crucial element within public expenditure as a whole.
To illustrate this, I remind the House of the experience of former Ministers within the Treasury and the Department of the Environment when grappling with this problem. In his book "Inside the Treasury", Lord Barnett wrote:
"For years current expenditure of local authorities had grown steadily under Conservative as well as Labour Governments. It was £5·5 billion in 1970/71 and by the time we took over it was £6.8 billion. We then proceeded to increase it substantially. By 1979, at 1975 Survey prices it was some £13 billion".
As he rightly said, that is a lot of money.
He went on:
"The main source of control was the size of the RSG. As Chief Secretary I would be arguing for as low a grant as possible—Tony Crosland for his part, while reluctantly recognising the need to cut expenditure, feared that the squeeze of a lower grant would simply lead to large rate increases."
We all know who won that argument! The hon. Member for Copeland (Dr. Cunningham) was PPS to the Prime Minister at that time, and will no doubt remember how the battle went. Cutbacks in local current expenditure began under Labour; reductions in the percentage of Exchequer grant began under Labour; the system of cash limits on RSG began under Labour. The House will listen with care to see whether the Labour party in Opposition condemns the policies which it followed in office and which it knew to be necessary.
In the 1960s and 1970s, local authority current expenditure was growing in real terms on average at 3·5 per cent. a year. Between 1952 and 1979 the numbers employed by local government had doubled. By 1979 they had reached the all-time record of 2·51 million—11·5 per cent. of the total labour force in local government.
Thanks partly to successive rate support grant settlements since then and thanks, certainly, to better management by many councils, that growth in spending
338
has been reduced to a little below 1 per cent. on average per year. Manpower levels have dropped by over 4 per cent.
It is right to pay tribute to what many councils have achieved in making themselves more efficient. It is also right that the pressure to control spending should be sustained. [Interruption.] I am astonished that the hon. Member for Blackburn (Mr. Straw) should make that comment. Does he really regard local government as a form of outdoor relief, simply to provide jobs to keep unemployment down? Of course he does not, and his party never did.
Mr. Jack Straw: The House may not have heard what I said. I said that the Secretary of State was praising local authorities for forcing up unemployment. The Secretary of State must regard local authorities as a form of outdoor relief. I believe that local authorities provide vital services, in many cases to assist those thrown out of work by this Government's policies.
Mr. Jenkin: The hon. Gentleman is trying to deny what he said. Of course, it is the job of local authorities to provide services as efficiently, economically and as effectively as possible. There is no doubt that, thanks to much better management by many councils and the pressure of the rate support grant, many councils are doing just that.
Mr. Tony Marlow: We have just seen a show of indignation from the Opposition Front Bench. The whole issue has been accompanied by indignation from the Labour party. Is it not worth noting that fewer than a dozen Labour Members are in the Chamber for this important debate.
Mr. Jenkin: That is a fair point.
Mr. Patrick Cormack: Will my right hon. Friend give way?
Mr. Jenkin: May I develop my argument?
Mr. Cormack: I am grateful to my right hon. Friend. It is important to put on record the fact that not only Labour Members are incensed, because some prudent Conservative-controlled councils with excellent records, such as mine, are suffering deeply as a result of what has happened.
Mr. Jenkin: I have no doubt that my hon. Friend the Member for Staffordshire, South (Mr. Cormack) will have an opportunity to make his point if he catches your eye, Mr. Speaker. What he says does not detract from the fact that many councils have made strenuous efforts to make themselves more efficient. The gainers are their ratepayers.
Reining back expenditure has benefited domestic ratepayers, householders and businesses. In each of the last five years the average rate increase has fallen, despite annual panic stories from the Opposition. Last year the average rate increase was only 5·5 per cent.—the lowest in 10 years.
Therefore, we have disproved Tony Crosland's fears, as recorded by the noble Lord Barnett, that a falling percentage of Exchequer grant necessarily means steep rate increases. On the contrary, a falling percentage of grant has been accompanied by a fall in the rate of growth of spending and, therefore, by a steadily reducing rate of increase in local rates. A great many authorities have

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managed to sustain or even improve the level of services by making themselves more efficient. There are still plenty of opportunities for that.
The third supplementary' report for 1983–84 adjusts block grant entitlements for that year in the light of the latest information. The second supplementary report for 1984–85 implements grant holdback for Liverpool. The House will remember that its budget came too late for last July's supplementary report. Therefore, it is a necessary adjustment.
The main interest in today's debate lies in the report setting out the settlement for next year, 1985–86. I shall deal separately with its three elements—targets, total grant and distribution of grant between authorities.
The key feature of the settlement is that all authorities budgeting to spend more than 0·75 per cent. below their GREA this year can increase their spending next year by at least 4·5 per cent. without incurring grant penalty. For the lowest spenders—those whose budget this year is at or below target as well as below GREA—the increase is slightly higher—up to 4·625 per cent. over this year's budget.
I can, therefore, claim to have set targets for the low-spending authorities and fulfilled the undertaking that I and my hon. Friend the Under-Secretary gave to the House during last year's debate. That has been recognised by many of the councils concerned. Many low-spending authorities have acknowledged that the targets are more favourable than the targets that they have been set previously.
The other side of the coin is a tougher holdback schedule for authorities that spend above their targets. It must be remembered that this year 84 per cent. of all authorities are budgeting to spend within 2 per cent. of their targets. Next year, with the more realistic targets, I hope that that figure will be even higher so that fewer ratepayers will bear the costs of council overspending. Higher current spending means higher rates, which mean lower profits for industry, which means less investment, which means fewer jobs. The connection between those facts is absolutely irrefutable.
Mr. Tony Banks: Another argument is that lower spending means fewer services and lower levels of service. The right hon. Gentleman said that the low spenders last year will be rewarded by better targets next year. Can he explain — especially to his Conservative colleagues—why the GLC, which he has always accused of being a high spender, has had a 63 per cent. hike in its target for next year over last year? I am sure that his colleagues will be interested in his answer.
Mr. Jenkin: The hon. Gentleman is, of course, seeking to throw dust in the eyes of the House. He is talking about a comparison of target over target. The real comparison, on which authorities have always focused, is based on what their spending is this year, what their budget is this year, what they expect to spend and how much they can increase on that next year. They want to know what is their margin and headroom. The GLC is, indeed, a massive overspender, and I do not expect it to be entitled to any rate support grant—or only a nominal amount—because it is so far in excess of its target. Judging by the cries of woe from county hall, I do not think that many of my hon. Friends will suspect that we are letting off the GLC lightly.
Mr. Michael Hancock: How can the right hon. Gentleman equate what he has just said with the position in Hampshire, which has stuck religiously to the guidelines set by the Government but which will suffer worse than any other county council in England next year, having about 7 per cent. less cash to spend?
Mr. Jenkin: The hon. Gentleman has misunderstood the point. Hampshire is one of those authorities which, because it is budgeting this year both below its target and the GRE, falls squarely within our definition of a low spender. It therefore has a target hike above this year's budget that is the highest of any authority—4·652 per cent.
I recognise that a number of low-spending authorities say, "That is all right for this year and we can manage for 1985–86, but we face real difficulties in 1986–87." I appreciate that a number of my hon. Friends are concerned about that. They will understand that I cannot at this stage give detailed figures for individual authorities for 1986–87, though I hope to be able to make a helpful comment.
I repeat what I have said, that I should like to be able to abandon targets and holdback. While it has undoubtedly helped to rein back the growth of local authority' current spending, I understand those who argue that, coming on top of the system of block grant and the quite sophisticated system of taper, it makes for complications and difficulties.
Much depends on the level of local authority spending in the coming year and on what alternative pressures there can be to achieve delivery of the Government's public expenditure plans. I am considering this urgently. I can say no more on that today. In what follows, therefore, I am assuming that the target system is to be retained for 1986–87.
Mr. Charles Morrison: I am grateful to my right hon. Friend, not only for what he has said but for what he has done for some shire counties, not least for mine in Wiltshire, in relation to target. Is he aware that those who represent shire counties will support him strongly in his desire to abandon targets in 1986–87 and in the battles that he may have with the Treasury, because if those targets are not abandoned, or at least considerably relaxed, the situation in the shire counties will become impossible? They are managing this year only as the result of balances. They have juggled their finances for years, but next year will be the crunch year and if there is not a major relaxation life will become impossible for them and services will have to be severely cut.
Mr. Jenkin: As to whether we shall have targets, I cannot say more than I have said today. The more favourable targets that I have given low-spending authorities for 1985–86 have been made possible because of the savings achieved from rate capping the high spenders. I made that clear last year. Rate capping will continue to produce savings in the years after next, in 1986–87 and thereafter, as we continue to bring down what we have no difficulty in recognising as the excessive spending levels of authorities selected for rate capping under the Rates Act. I repeat that low-spending authorities will benefit from that rate capping. They will benefit next year and we will want that to happen again in the year following.
Mr. Roger Gale: My right hon. Friend has said that he intends to maintain target. Does he accept

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that in Kent the gap between target and GREA is £37 million? If he is to retain target, the logical extension of that must be to abolish GREA.
Mr. Jenkin: My hon. Friend is aware that GREA is the basis of the distribution of rate support grant. I cannot take my hon. Friend's suggestion at face value, but I recognise the argument that he is advancing.
For authorities that budget in the coming year — 1985–86 — to spend at or below both their target and their GREA, the targets for the following year —1986–87—will take account of the further savings to be achieved from rate capping the highest spenders. A number of authorities have wanted me to make it clear that this is not a one-off position for this year. Rate capping will continue and that will enable us to continue to pursue the policy that I have been describing.
Sir Ian Gilmour: I appreciate that my right hon. Friend is trying to help the House. Does he agree that unless the system is changed fundamentally—that does not mean a few adjustments because of rate capping — and the target system is abolished, many shire counties will be in an impossible position? Will he undertake to ensure that the present system is not preserved into next year?
Mr. Jenkin: I understand entirely how my right hon. Friend and others feel. I have made it clear in previous debates, and I do so again today, that the Government are anxious to dispense with the target system as soon as they can. However, I cannot go further than what I have already said this afternoon. We are studying the matter urgently and if it proves possible to dispense with the target system, nothing will give me greater pleasure than to do so. However, I cannot make a commitment to the House about next year.
Mr. Simon Hughes: If the Secretary of State is saying that he is reconsidering the target system I ask him to make one other suggestion to his Department for its consideration. He will know that there is now a discrepancy in rate-capped authorities between the rate-capped limit and the target limit. Some authorities which spend up to the rate-capped limit will incur penalty because they have spent over target. If he tells the House that he considers that to be inadequate and unsatisfactory, there will be some light at the end of the tunnel for high-spending authorities which are high-need authorities, which presently have an equal if greater cause for complaint than low-spending and low-need authorities. The high-spending and high-need authorities are now facing total darkness.
Mr. Jenkin: The feature to which the hon. Gentleman has drawn the attention of the House was debated exhaustively during our proceedings on the Rates Bill. Had we not maintained the gap between target and the expenditure limit, there would have been great unfairness to other authorities which are close to the level of rate-capping but which are not being capped. They would have suffered an even greater penalty on their spending than capped authorities, and that would have been unfair.
Mr. Norman Atkinson rose—
Mr. Robert C. Brown rose—
Mr. Jenkin: No, I shall not give way. There are many hon. Members who wish to contribute to the debate and I wish to press on with my remarks.
Mr. Atkinson rose—
Mr. Jenkin: No, I shall not give way. I have given way a good deal already. We are not discussing rate capping today. There will be an opportunity to discuss the issue when we place, if we have to, the orders before the House.
If all local authorities had shown responsibility, equal to that of those on behalf of which my right hon. and hon. Friends have been intervening, and if Labour authorities had continued to follow the policy of the Labour party under a Labour Administration there would have been no need to enter into the business of targets and to have imposed some of the measures for which we are criticised by local government.
The picture is startlingly clear in the current year. Total overspend above targets is £850 million, and 75 per cent. of that overspend comes from 12 local authorities, every one of which is Labour-controlled.
I turn from targets to Exchequer grant—
Mr. Richard Holt rose—
Mr. Jenkin: I hope that my hon. Friend will forgive me for not giving way to him. I must press on. As I have said, many hon. Members wish to contribute to the debate.
The total grant figure in the settlement is £11·8 billion. That is about the same in cash terms as that for the current year. As has been said, this represents a lower percentage of next year's planned expenditure. It will be 48·7 per cent. compared with 51·9 per cent. in last year's settlement. We have reduced the grant expenditure percentage in each year since 1979 and on each occasion there have been scare stories, not least from the Opposition Front Bench, of massive rate increases going far beyond anything we have experienced. The fact is that each year the average rate increase has been lower than in the previous year.
Mr. Tony Banks: On average, yes.
Mr. Jenkin: Of course. There will be a variety of rate increases. I am not quarrelling about that. The key point is that cutting the grant percentage adds to the pressure that we put on authorities, as Lord Barnett has said, to find economies in their spending and reduce spending, which leads to lower rate increases.
In the debate on this matter which took place last year, the hon. Member for Copeland said:
"Most ratepayers would face steep rates increases in the spring as a direct result of the Government's policy".—[Official Report, 23 January 1984; Vol. 52, c. 646.]
We know what happened. The average rate increase was 5½ per cent., which was the lowest for 10 years. It is worth noting that the cut in percentage terms this year is less than the cut of four and a half percentage points which the Labour Government imposed in 1977–78. I hope that on this occasion the hon. Member for Copeland will keep his scaremongering to himself.
I repeat what I have already said to the House. If local authorities budget to meet their targets next year, the average increase at ratepayer level—I stress "average" —should be even lower than this year's 5½ per cent. I stress that that is an average figure. The figures for individual authorities are bound to vary as their grant entitlement changes.
Mr. Peter Hordern: I thank my right hon. Friend for showing his invariable courtesy. He has referred to rate support grant. Will he address himself to low-spending authorities such as West Sussex, which he told us last year would receive special attention as low spenders and whose target was considerably below GREA? The same authorities, which he assured would be treated more favourably if they went over target, now find that the penalties for doing so are to be increased substantially. Will he give some assurance to the x j 1lowest-spending authorities of all — I know of no lower-spending authority than that of West Sussex—which will have inescapably to spend more towards its target to approach what the Government believe is the proper proportion of expenditure that it should incur?
Mr. Jenkin: My hon. Friend knows a great deal about these matters. With respect, I do not think that I can go further on target for the following year than what I have already said. I have said in reply to my hon. Friend the Member for Devizes (Mr. Morrison) and other of my hon. Friends that we intend to continue the process while recognising the position of the very low spenders. I believe that they appreciate that we have done a great deal for them for next year. [HON. MEMBERS: "No."] The county of my hon. Friend the Member for Horsham (Mr. Hordern) has had one of the greatest increases in target of 4·625 per cent. That is likly to be ahead of the rate of inflation.
Mr. Charles Irving rose—
Mr. Geoffrey Rippon rose—
Mr. Jenkin: When I deal with distribution of grant, I hope to be able to show my hon. Friend the Member for Horsham that we have taken account of the position of the lowest spenders.
Mr. Rippon: My right hon. Friend talks about 1986–87 and he is talking inevitably about national averages. Does he realise that many areas are concerned about 1985–86? There are sparsely populated rural areas in Northumberland which have special problems and such authorities are not susceptible to having their problems dealt with in terms of the national aggregate.
Mr. Jenkin: I know that my right hon. and learned Friend will recognise that Northumberland is a county which could not be described as a low spender. It has not budgeted as economically as it could and, therefore, it would be entirely consistent with what I have said to other of my right hon. and hon. Friends not to give the same target latitude to such counties as that which we have been able to give to the lowest spenders. That was the pledge I gave to the House at this time last year.
I know that the sparseness of population was a matter discussed by the five local authority associations and my officials when refining the grant-related expenditure assessments. It is a question not only of the size of the grant but of its distribution. The 1985–86 settlement incorporates rather bigger changes in GREAs than have been made in recent years. Some arise from the decision by my right hon. Friend the Secretary of State for Transport to pay transport supplementary grant only on capital expenditure on roads and traffic management schemes from next year. As a result, revenue expenditure on highway maintenance and passenger transport support will, in future, be supported through block grant. There are, therefore, entirely new GREAs for those two services.
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I have introduced new and improved GREAs for the recreation service that takes more account of actual use by visitors and commuters. That point was pressed on the Government by a number of my hon. Friends. I have introduced amended GREAs for housing that reflect more accurately the support given to the housing revenue account from the general rate fund.
Of course, a number of authorities have made it clear to me that they are unhappy about the reduction in their grant entitlements arising from these GREA changes. Although I sympathise with the problems this can cause individual authorities, I must point out that it cannot be right to freeze, for all time, the GREAs in their present form simply because there are bound to be some losers as well as gainers. The changes I have made this year represent real improvements in the fairness of GREAs and, therefore, in the fairness of the system of distribution of block grant.
A further change I have made for 1985–86 is to give more of the available grant to authorities spending at or below GREA. I come now to the point made by my hon. Friend the Member for Horsham. As with targets, my objective is to recognise the achievements of low spenders. For 1985–86, spending in relation to GREA will be a more important factor in determining grant entitlements. Correspondingly, the marginal costs in terms of the taper of the grant for those authorities that spend above GREA will be higher. This reinforces our policy of targets and of recognising the difficulties faced by low spenders.
Mr. Straw: Will the right hon. Gentleman confirm the figures he has given in parliamentary answers that, if all authorities spent at GREA, many Conservative shires would suffer massive loss of grants? West Sussex would receive no grant at all for this year and Cambridgeshire would suffer a loss of £26 million in grant. Paradoxically, so-called overspending by higher needs authorities is keeping the rates lower in the lower spending authority areas.
Mr. Jenkin: I agree with the figures but not with the hypothesis the hon. Gentleman postulated. A great many authorities find that they can give their communities a perfectly adequate and acceptable level of service and can, through greater efficiency, spend lower than the GREAs. They are to be commended.
Dr. John Cunningham rose—
Mr. Jenkin: I should like to respond to the point made by my right hon. Friend the Member for Chesham and Amersham (Sir I. Gilmour).
Dr. Cunningham rose—
Mr. Jenkin: I have given way to the hon. Member for Blackburn (Mr. Straw) on the Opposition Front Bench. The hon. Member for Copeland can make his point when he makes his speech. I and many hon. Members on both sides of the House appreciate the fact that the system of local government finance has become increasingly complex. Even the terminology we must use is double-Dutch to most laymen. The important point is that, the more difficult it is for people to understand a system, the harder it is to persuade them that it is fair. I understand that, and that is not the least of the reasons why I asked my right hon. Friend the Minister for Local Government and my hon. Friend the Under-Secretary of State to

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undertake a series of studies of the whole field of local government finance. Those studies are well under way. Rate support grant settlements in England distribute almost £12 billion of Exchequer cash in support of £24 billion of local authority expenditure by more than 400 very different local authorities. Simplification is always an important objective, but so is equity. We must remember that fact.
This year, 84 per cent. of authorities are spending at or close to their targets. They include authorities of all categories and all political colours. They have managed to do so without what is sometimes described as catastrophic service cuts. Targets for next year are more favourable for most authorities than they were this year. Doubtless, we shall again be told of the services that must be slashed, but all the evidence suggests that that is nothing but wild exaggeration. The point is that the targets we have set are realistic.
Another point I should like to make clear concerns the equity between responsible authorities, which have made efforts to find economies and the minority which have not. This is an important aspect that has been pressed on the Government year after year by my hon. Friends.
Mr. Robert C. Brown rose—
Mr. Jenkin: I am coming to the end of my speech, so I shall not give way.
Three quarters of this year's overspend comes from just 12 local authorities, all of them Labour-controlled. We are now leaving behind the days when the responsible low-spending majority of authorities had to be asked to find substantial economies to compensate for the massive overspends of the irresponsible minority. We deliberately introduced rate capping to escape from that position. Selection of 18 authorities for rate capping next year should mean that actual expenditure will be £400 million lower than it would have been if the authorities had continued on their Rake's Progress of squandering as they have done in recent years. For 1985–86, I have used those savings to secure more favourable targets than ever before for low-spending authorities, and I proposed to continue to use them to help low spenders in 1986–87.
It is now for each local authority to make its budget and rating decision. This settlement sets the framework so that, if local authorities budget reasonably, they can continue to provide a reasonable level of services while protecting their ratepayers against excessive rate increases. I commend the report to the House.
4.17 pm
Dr. John Cunningham: The Secretary of State in his opening comments tried to suggest that his policy was simply a continuation of the policies pursued by the last Government. I reject that suggestion as fundamentally dishonest. When the last Labour Government left office, they were providing 61 per cent. of council current expenditure by way of rate support grant. The Labour Government had no targets, no penalties and no individual controls over local councils, and they had no punitive Rates Act to undermine the local democratic process.
Dr. Keith Hampson rose—
Dr. Cunningham: I shall not give way. I have just begun my speech.
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This is the sixth annual report on the rate support grant introduced by the Conservative Government since taking office in 1979. Each year, the most significant feature has been the reduction in grant percentage paid by central Government to local councils. In 1979–80, the Labour Government provided cash to finance 61 per cent. of current council expenditure at a time when there was much lower unemployment, a much better social climate and much better circumstances than the appalling conditions that prevail today.
The report proposes to reduce cash support to councils for the sixth consecutive year to only 48·7 per cent. of their expenditure. The proposed reduction for 1985–86 amounts to £775 million compared with the fiscal year 1984–85.
Dr. Hampson rose—
Dr. Cunningham: I am not giving way.
The curious and deliberate thing about the Secretary of State's speech was that he talked about targets for almost all of it. He never mentioned the reduction in grant and its impact on authorities, nor did he say that it was likely to cause problems, hardship or difficulties for the local authorities involved.
Dr. Hampson rose—
Dr. Cunningham: I am not giving way.
Mr. Speaker: Order. I have heard the hon. Gentleman say on three occasions that he is not giving way. Many hon. Members wish to speak, and all interventions take up time.
Dr. Cunningham: The hon. Member for Leeds, North-West (Dr. Hampson) stood up to intervene within the first minute of my speech. I should tell him that my record on giving way is much better than the Secretary of State's. I shall give way to the hon. Gentleman when I have finished the introductory part of my speech. I have not yet gone beyond the first page.
The Secretary of State's persistent and deliberate policy of making significant annual reductions in the cash support for local councils is the root cause of all the problems that the Secretary of State's hon. Friend's have been quoting to him today. It causes unemployment, undermines the quality of community and public services, such as education, transport, meals on wheels, concessionary fares, and help for elderly and disabled people and for families who are suffering deprivation. That is the real impact of his policy and that impact will be continued as a result of his report.
Dr. Hampson: I rose immediately because the issue of whether the percentage rises or falls is at the heart of the hon. Gentleman's case. The Labour Government immediately raised it from 60·5 per cent. to 66·5 per cent. They found that that was unsatisfactory and reduced it progressively to the 61·5 per cent. about which he is now boasting. Even before that, during the Wilson Government, it was as low as 54 per cent. They have had it all ways. The hon. Gentleman should know better than to argue as he has.
Dr. Cunningham: My first response to the hon. Gentleman is that he is talking about two different systems. My second response is that in each year of the previous Labour Government, the percentage paid by that Government was higher than it has been in any one year of this Administration. That is the fundamental difference.

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Ratepayers will again face increases in the coming year—there is no point in trying to disguise that—because the persistent and deliberate reduction in grant is the biggest factor and the most important reason why average domestic rates—that is what the right hon. Gentleman and his predecessors have talked about—have more than doubled since 1979. Average domestic rates have increased by 108 per cent. since the Conservative Government came to office.
Those burdens are a direct result of the Prime Minister's policies. It is significant, although not surprising, that she never attends these debates. She is never present to support the right hon. Gentleman, even in his most difficult times—and there have been many of those—because she has comprehensively betrayed the ratepayers by doubling rates and ratting on her promise, twice made, to abolish domestic rates.
Like young people who were promised work and real jobs by the Prime Minister—perhaps the biggest and most cynical betrayal of all — ratepayers will never forget the Prime Minister's promise to them, which was repeated in two general elections, that she would relieve them of the burden of domestic rates. After six years, she has succeeded in more than doubling rates, and the increase will continue.
In addition to the reduction in cash support for councils and ratepayers, the most important features of the report are the harsher financial penalties for councils which used their own money to uphold the quality of their services and to protect their communities; changes again in the principles used to construct the Whitehall-imposed targets for the fifth successive year; inadequate application of the Secretary of State's use of disregards; and the persistent and continued use of data which even the Audit Commission—the right hon. Gentleman's own creation —has described as open to serious question.
It is important to examine those matters in detail and, not least, to contrast their impact with the promises made to local government by the Secretary of State and his predecessors. The way in which councils' spending targets have been constructed by the Government means that 85 per cent. of the metropolitan councils will be required to make real cuts in expenditure.
Many of the areas with the greatest social need are again being asked to make the biggest cuts and to carry the heaviest burden. The Secretary of State, in paragraph 7 on page 4 of his report, when talking of expenditure provision, claims:
"This should enable the Government's policies for individual services to be broadly maintained."
At best, that is an ambiguous statement. At worst, it is dishonest. Government policy is to reduce cash support for councils.
The two supplementary reports for 1983–84 and 1984–85, which are before the House, remove yet more grants from local councils through the operation of an increasingly punitive penalty system based upon arbitrary spending targets. For 1983–84 another £281 million passes to the Treasury. That is more than in the previous supplementary report. For 1984–85, the Treasury's windfall is £455 million—an increase of £3 million on the supplementary report approved in July 1984.
How can councils maintain their services in the face of persistent cuts in the real value of Government grant? They can do it by spending more of their own money raised
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from the rates, by increasing rates to increase their revenue, or, as the Secretary of State suggested, by trying to improve their own efficiency.
Demands on council services are increasing because of the appalling social and economic consequences of the Government's policy. As the House is aware, millions more people today face hardship, deprivation and poverty compared with 1979. No improvement in the management of services could hope to offset the combined effects of major increases in demand and the cumulative withdrawal by the Government of more than £12 billion in real terms from council finances since 1979.
The Secretary of State seeks to impose his ceiling on every council budget as his authoritarian attitudes expand and engulf all aspects of policy. He reduces grants; imposes more drastic fines and penalties on councils which spend above his arbitrary Whitehall view of their necessary expenditure; and controls their rates. The outcome of that cannot be the maintenance of services. He does it regardless of the councils' performance or efficiency.
I give two examples to illustrate that point — one Labour, one Conservative. For three years the Stevenage council held the rate level. Last year it was reduced by 7·2 per cent. Despite that performance, the council now faces a loss of over £500,000 in grant because of changes in the methodology of calculating its entitlement. That council is spending at target. It is not profligate. It has not forced up rates year after year.
Sevenoaks district council is Conservative-controlled. The leader, Councillor Garner, has written to the hon. Member for Sevenoaks (Mr. Wolfson), and sent a copy of his letter to every member of the council, including Labour members. He said:
"We have just received notification from the Department of the Environment that our block grant is to be reduced this year from £2,054,000 to £1,674,000 … a staggering reduction of 18·5 per cent. This means we will be forced to increase our rates by almost 20 per cent. next year, an increase which is entirely caused by central Government decisions."
He goes on:
"Mr. Jenkins is reported as projecting average rate rise 'in low single figures'. Against such statements, how are we expected to explain to our ratepayers that their rate increase of 20 per cent. is entirely due to the capricious decisions of Mr. Jenkins' own department?"
He adds a postscript to his letter:
"Mark—we have had enough!"
That is the comment of the Tory leader of Sevenoaks district council, and that is increasingly widely recognised by council leaders of all persuasions up and down the country.
The scope and quality of public services are undermined, provision is cut, redundancies occur, and vacancies are not filled. Those are, in reality, the aims of Government policy. In consequence, our towns, cities and boroughs begin to suffer neglect. Transport is threatened in rural areas. Education — surely a country's best investment — is undermined. The Government are increasingly enforcing a run-down, often second-class and inadequate public provision by their inadequate and increasingly incompetent administration of local government, and Conservative Ministers are determined to impose their view, regardless of the wishes of local communities as expressed in local council elections.
Councils trying to resist and to respond to the legitimate wishes and aspirations of the people who elect them are not only penalised but often subjected to petty abuse and

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vilification. Elected councillors are increasingly and knowingly prevented from meeting their statutory obligations and duties by this Conservative Administration. That is true of a wide range of services, such as housing, planning, building control, public health, education, and provision for disadvantaged people. But a blind eye is turned to all those services by Ministers and their supporters in the House. Meanwhile, Ministers abuse their powers and act unlawfully.
Recently, the Secretary of State for Transport deliberately and unlawfully robbed the Greater London council of more than £50 million. Is he to be surcharged? Is he to be removed from office? The Secretary of State for the Environment does not have a very good record either in that respect, because he ignored his duties in respect of the GLC development plan. When the courts found against him, he ignored them, too, and changed the law. He is currently hiding behind the dubious interpretation of the Rates Act to disguise from the House his use of its powers to fix budgets for councils which he has quite deliberately "fitted up" to suit his own political purposes. It is squalid behaviour on the Secretary of State's part that he does not tell the House about his assumptions in the application of a highly contentious and fundamentally important Act of Parliament.
The Secretary of State's claim that the Rates Act is designed to protect ratepayers had a very hollow ring when contrasted with his proposal today to reduce by £775 million the support that the Government are providing to them. His argument that rates increases would be in single figures ignores the real impact of what he is doing and is contradicted by the Association of Metropolitan Authorities, the Association of District Councils and the Association of County Councils, all of which condemn the report. The Secretary of State also misleads when he pretends that rates can be held down without serious consequences for jobs and services.
The effect of trebling penalties is punitive in the extreme. For spending of just 1 per cent. above an arbitrary and imposed ceiling, councils will be clobbered. Currently, 110 authorities spend at just 2 per cent. over target, and altogether 138 authorities—about one third of all councils — are being penalised because they choose not to accept a Whitehall-imposed ceiling on their budgets. Ironically, the savage increase in penalties, as the hon. Member for Horsham (Mr. Hordern) pointed out, will affect low spending councils worst of all. In addition, those extreme penalties on councils further blur local accountability by placing elected councillors in the invidious position of determining policies not by assessing local needs and desires, but by reference to the punitive extra cost enforced by central Government.
The dubious use by the Government of grant-related expenditure plumbed even new depths when Ministers' manoeuvring over council housing finance, using the so-called "E7 factor", came to light as a result of a leaked document a few months ago. Those calculations are crucially important for many housing authorities. In the leaked document last September, the Under-Secretary of State, the hon. Member for Ealing, Acton (Sir G. Young), described his own civil servants' study of the issue as "political dynamite", because it showed that the
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Department had been unfair to several authorities. A cover-up then followed, and the full picture was never revealed, either to the local authority associations or to the House of Commons.
Mr. Patrick Jenkin rose—
Dr. Cunningham: I shall give way to the right hon. Gentleman, although today, as on the last occasion that he spoke, he refused to give way to me.
Mr. Jenkin: I absolutely refute the hon. Gentleman's charge that there was a cover-up. On the contrary, the documents were circulated widely to the local authority associations. The hon. Gentleman tries to pretend that some copies of the document were leaked. They were to be found in the offices of every local authority association in England. The hon. Gentleman's comment is a damp squib. The authorities welcomed the changes in GRE that we have introduced. Is the hon. Gentleman saying that we should not have studied that reaction?
Dr. Cunningham: I question what the right hon. Gentleman has just said to the House, because copies of the leaked document were not available in that form to local authorities; nor were the written comments of the right hon. Gentleman's junior Minister, describing the document as "political dynamite", available to the local authority associations.
The point is worth developing a little further. In 1984–85, Hackney borough, the most deprived borough in England, was allocated £11·4 million by the use of the E7 factor. The leaked document said that Hackney should have received £20 million. When the local authorities were finally consulted, that figure had become £16 million. Following further discussion, Hackney was allocated £7 million for 1985–86, but the council has finally ended up with £13 million.
Ministers continue to pretend that GRE is an objective and unbiased test of needs — a claim that is totally belied by the events that I have just described. They illustrate all the symptoms of political chicanery and political dishonesty at their worst. But it is on the basis of Government manipulation of those allegedly fair calculations that the iniquitous Rates Act is applied to override local democracy and accountability.
The report, and Government policy underpinning it, stands condemned by all national local authority associations. The Tory-controlled Association of County Councils has been bitterly critical of the report because of its impact on the shire counties. A few weeks ago—this was repeated to me in a letter that I received on Christmas Eve and mentioned again today—the Secretary of State said that the settlement shows that
"I am, thanks to our rate limitation policies, now in a position to stop asking prudent authorities for real terms cuts to counter the excesses of the high spenders."
The fact is that 65 out of 77 metropolitan authorities, 11 out of 39 shire counties and 113 out of 296 district councils face real terms cuts in their grant as a result of the right hon. Gentleman's policies. He has consistently promised help to his shire county friends and said that the report fulfils his pledges and those given by the Under-Secretary of State, the hon. Member for Bristol, West (Mr. Waldegrave). In reality, 38 out of 39 shire counties have spending ceilings below their GRE—below what the Government say is our objective test of what they should spend. That is a worse situation than in the current

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financial year. Things will he worse next year than this year. Sixteen shire counties suffer grant loss even if they spend at target as a result of the report. Essex will lose £19 million, Hampshire £15·5 million, Surrey £15·7 million, Hertfordshire £14 million and Berkshire, the very shire county that the Secretary of State chose to speak about in his statement in December—what we might call the Berkshire factor—will lose £10·4 million in grant if it spends at target next year. Oxfordshire will lose £10 million.
In his statement on 11 December, the Secretary of State mentioned Berkshire as an example of a county given favourable treatment. Now we know the result—a loss of grant of over £10 million next year for spending at target. The reality is that, in exchange for a minuscule increase in a target that is arbitrary anyway, a massive loss of cash results. As the ACC says, the 10 shires that benefit from the additional 0·125 per cent. increase in targets are allowed, in total, to spend an extra £2·7 million of their own money between them on total targets of £2·42 billion. That is a measure of the right hon. Gentleman's generous help to his friends. As a consequence of his decision, those same authorities will lose cash grant of £46 million in the process. That is how the Secretary of State has helped the shire counties. That is the true nature of the right hon. Gentleman's help, if it can be called that, to the shires; and it remains the case that lower spending authorities receive lower than average target increases in the report.
If in 1985–86 shire counties spend at their GRE, they will lose £1·5 billion in grant penalties under the present system. The right hon. Gentleman hinted at getting rid of targets and replacing them with GRE. That would be worse for the shire counties than the present situation, because they would catastrophically lose grant. That is a measure of the ferocity of the Government's policies.
The ACC and the Association of District Councils confirm, as has the Secretary of State for Education and Science, that the Rates Act, far from benefiting the shires, has greatly restricted their share of the total available increase in targets and their receipt of grant. The Rates Act does not help the shire counties—quite the reverse.
The ACC calls on the Government to recognise that Government policy has resulted directly in the equivalent of a 38p national rate increase since 1980–81 before any excess spending is allowed for. The ACC believes, as we do, that those policies lead to instability, incomprehension and a further loss of local accountability.
It is worth referring to some of the comments by shire county leaders in the Tory party. Councillor Roger Parker Jervis, for one, wrote to The Times and said:
"Right across the country prudent Conservative councillors know their targets are unrealisable and ridiculous, and that to spend above them is inevitable if local services are not to break down or become the subject of derision. Thus penalties will, as in Buckinghamshire, increasingly fall heavily on the same hapless ratepayers for whom the Government claims to stand champion.
I am not willing to countenance such injustice."
The Tory leader of Oxfordshire, Councillor Eric Bond, predicted
"a steep rate rise in the county next year".
Mr. Bond has called for a meeting with the Secretary of State to discuss the implications of the report. He made it clear that
"Oxfordshire councillors had been stung be Mr. Jenkin's claim on Tuesday that 'our undertakings to the shires have been met to the letter'".
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Going on to discuss the implications of the report, Councillor Bond said:
"This contradicts Mr. Jenkin's claim that people will be delighted with the Government's attempts to control rates."
The Conservative leader of Oxford city council, Councillor Janet Todd, said:
"Councillors are being made whipping boys for the defects of the rating system."
Even the chief constable of South Yorkshire, Mr. Peter Wright, has said that his police authority is caught in a vice between the Home Office and the Department of the Environment. One report says:
"The Home Office always said that extra resources must be found from existing manpower and finance, said Mr. Wright. 'That is one side of the vice, and the other is provided by the Department of the Environment … Having gone through a recent budget trimming exercise, I know that any further cuts mean losses in manpower'."
That is the sort of thing that is being said about the rate support grant. I learnt today that even the Tories in Bradford are seeking legal advice about the implications of the report for them and their authority.
The Audit Commission, set up by the Conservative Government, has produced a damning indictment of Government policy towards local government finance. The report contains fundamental contradictions of all that the Secretary of State has been saying about the effect of Government policies on local councils. It demonstrates the futility of those policies. It demonstrates the futility of Government claims to be improving the efficiency of local government, with their systems of penalties and Whitehall interference. The Audit Commission's report makes it clear that rates in England are now higher than they would otherwise have needed to be, as a direct result of Government policy. The commission estimates that rates over the past three years have been higher than they need to be by some £1,200 million. Government-imposed targets are also shown to be confusing and based on inaccurate and inadequate information about the situation in our towns, cities and counties. Whitehall interference has undermined local accountability and management, and confused ratepayers.
That is what the Audit Commission says. Its report not only vindicates and substantially underlines what the Labour party and I have been saying about the ineptitude of Government policy, but makes it clear that Government policy is creating an appalling situation and making difficulties for local councils very much worse. That view is shared by every major local authority association, many professional bodies, the trade unions and the academic world.
Mr. Robert C. Brown: Does my hon. Friend agree that the policies of the Government are multiplying the problems in the inner cities? Does he agree that councils, such as Newcastle city council, have to spend more money on the problems of the inner cities, but the more inner city partnership money they spend, the nearer they are brought to being rate-capped? Is that not a monstrous injustice to the inner cities?
Dr. Cunningham: Yes, I agree with my hon. Friend. The reality is that the Government are in the ridiculous position of giving extra resources to partnership authorities with one hand and taking those resources away from them with the other.
The Secretary of State used to speak favourably about the Audit Commission. At a conference in Wembley last year, he said:

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"The Audit Commission has provided councillors with a powerful new weapon in their fight to keep costs down and so keep their rates down."
He went on to say that it would help them to improve their efficiency. However, when the first major report of the Audit Commission on the Government's own system of local government finance was published, the right hon. Gentleman changed his tune. He said:
"The Government's immediate reaction to this Report is that whilst most of its recommendations seem reasonable, they are based on a number of wrong-headed arguments."
The Secretary of State is the only person who believes that to be the case.
The Secretary of State ignores all criticism, advice and evidence, and staggers on into the quagmire of his own creation. Promises and undertakings are cynically cast aside and all the arguments in favour of good local government and better and more efficient public services go unanswered. They are cast aside—throughout my speech the right hon. Gentleman has made a series of running sedentary interventions—rather in the way that the Under-Secretary was cast aside after his performance on the Rates Act in the House and in Committee. The behaviour of the right hon. Gentleman has been very nasty, if he does not mind me saying so.
Government policy is inconsistent, incoherent, incomprehensible and incompetent. In these matters—local services, education, housing, social services, transport — there is worse to come from this most criticised of Governments.
In these matters, too, the gulf between the Labour party view and Tory policies is vast and increasing. We are concerned to enhance local democracy. This Government destroy it. We are committed to better quality public services. This Government undermine them.
We condemn the report as mean, vindictive, biased and incompetent. It is typical of the gerrymander philosophy that the Government have expressed throughout their local government policy. I urge the House to reject it.
4.53 pm
Mr. David Howell: There can be no doubt that the system of holdback, targets and block grant based on grant-related expenditure and grant-related poundage is one of the most miserable inheritances that any Secretary of State has ever had the ill fortune to receive. It has now reached a degree of complexity, as my right hon. Friend conceded today, which compares with the way in which the administration of the Austro-Hungarian empire was conducted, when it was said, hon. Members will remember, that items were put in an, endless series of pigeon holes and never recovered. It is in fact a machine without direction. I share the hope of my right hon. Friend that it should go as soon as may be and, indeed, the wish of others of my right hon. Friends that it should go as soon as possible.
I was never, I concede, a fan of the great complexity involved in the system and I must confess to my right hon. and hon. Friends on the Front Bench that I am not totally uninfluenced in my renewed views about this by the fact that the borough of Guildford has received news of a 73 per cent. cut in its grant in 1985–86. This tends slightly to colour my views. I understand that this is called "a search for overall fairness", but it is a little difficult to see exactly how that fairness works out. There is also the difficulty
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that this news has been received two months before the rate is made by the borough. I know it has been a continual difficulty over the years that the basic arithmetic on which local authorities, both district councils and county councils, have to plan tends to get dumped on them impossibly close to their major decisions on planning their expenditures on services and, indeed, their longer-term projects.
This brings me to the substantial point that I wish to make, and which I think my right hon. Friends have already accepted—namely, that we simply must handle these issues in future in a more strategic, systematic and long-term way to make any kind of sensible economising and to make the drive for higher efficiency sustained and sustainable.
It is perfectly true—this must fairly be conceded to my right hon. Friend—that his undertaking that the target situation for the low-spending authorities will be improved has been met. If I may refer again without apology to my own borough of Guildford, the target of what it may spend of money raised in one way or another has substantially increased. For the coming year, I think that it is something approaching 6 per cent. However, what has not increased, but, as I have already said, gone dramatically the other way, is the grant. It has been cut by 73 per cent., and that announcement reached the borough council about which I am speaking two months before it has to make a rate.
I say to my right hon. Friend — here I depart strongly from the histrionics that we have heard from the hon. Member for Copeland (Dr. Cunningham) and the general view of the Labour party—that I am not against a strategy of reducing the central Government taxpayer support for local government spending. I think that that is a worthy strategy. I can never really understand the modern Labour party's view that more and more taxes should be taken from often very low income taxpayers and families in straitened circumstances to finance substantial expenditure by local authorities, which does not necessarily go the poorest people of all. This is a sort of mad redistribution in reverse of the kind that only the unthinking group of people which the Labour party today is comprised of, could possibly espouse. If it is to be the pattern—I believe that it is right—that we reduce the grant support element to local authorities over the years, it must be done in line with a strategy. It is virtually impossible if it is done by the sort of hiccups and sudden moves that have been operated in recent years.
Why has this difficulty arisen? Again the mechanics are obvious. Each year a terrific fight takes place in Whitehall, and people are so exhausted by the settlement this year that it is in the interests of no party to go on and try to work out a settlement for next year. The Treasury does not want to settle it because it hopes that it might get a still tougher settlement, and the spending and sponsoring departments, the local authorities, do not want to come immediately to a conclusion because they hope, always with fingers crossed, that there will be some better prospects for next year.
Thus, there is no strategy and no one has been able to say over the years to the local authorities—particularly those which seek to economise and co-operate and to be, in the words used by the Minister for Local Government to describe Guildford borough council — a model authority—"Over three, four, or five years the grant

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element will be reduced by so much and you can plan accordingly." Therefore, they have not been able to plan and have been thrown into these great difficulties.
Behind this lies a much bigger question, of which my hon. and right hon. Friends on the Front Bench are well aware. There is no strategy for reducing grant year on year, because there is no strategy yet established of what that grant should be for, what the source of finances should be for local authority functions, and, indeed, what the pattern of local authority functions itself should be.
The Committees and groups that have been formed by the Department of the Environment will have to address themselves to that aspect and make some radical decisions if, as I passionately believe, the amount of taxpayers' money going from central Government to local authorities is to be radically reduced and the independence of local authorities increased in the way that I and many Conservatives wish. If that is the aim, we need a major re-examination of the vast range of functions now financed by local government and inevitably requiring huge injections of central Government funds.
Mr. Laurie Pavitt: The hon. Gentleman's generalisations seem to ignore the fact that ratepayers are also taxpayers, and vice versa. Moreover, he seems to assume that all taxpayers are poor and all ratepayers are rich. In my area the reverse is usually the case.
Mr. Howell: I am making no such assumption. I am simply seeking greater independence for local authorities. I am sure that the whole House will agree that a great deal of the difficulty and bad blood under successive Governments has arisen because of the transfer of taxpayers' money from central Government through the processes of local government into a certain range of functions. I do not expect this to be generally agreed, as I do not believe that public policy makers have yet thought the matter through, but I believe that we shall have to face the question of the largest consumer of local government funds handled through local authorities—education. If teachers' salaries were centrally funded, we might at last begin to move towards the stage at which rate support grant was no longer needed — except for a certain equalisation across the country, the admitted complexities of which are as nothing compared with the vast difficulties and visible injustices of the present system.
The difficulty for Ministers at present is that they are under pressure from the Treasury to reduce the rate support grant each year—from 51 to 48 per cent, and so on down—but the reallocation of functions which would allow a really radical reduction is not yet in place. That vital part of the strategy is not yet established because the breakthrough in thinking has not yet occurred to enable major reform of the range of functions that local authorities are allowed to conduct. When that takes place we shall begin to return to the independence of local government, with local activities financed from the rates, with a certain amount of equalisation grant for areas in greatest need, which was always the intention in earlier days and from which we have departed.
Until that basic difficulty is solved we shall remain in the quagmire of complexities in which Ministers currently have to struggle amid great difficulties, making very little progress and facing a storm of criticism at every turn. The latest attempt to achieve the "overall fairness" to which I
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rather cynically referred earlier takes the form of a new type of grant-related expenditure calculation, with some very bizarre elements.
A great deal of this seems to relate to the amount of money that local authorities are allowed to spend on leisure facilities. If I have this wrong, I hope that I shall be corrected, and I shall value any comment on this aspect. The new arrangements appear to mean that the greater the charges imposed by local authorities for entry to leisure facilities such as parks and swimming pools, the less grant they will receive, but the less grant they receive, the more they will of course have to charge for entry to those facilities. That merely adds to the great complexities already inherent in the system.
I shall not detain the House further on that aspect, as I believe that we have now all realised that that is the fundamental problem. Until we get the question of functions straight, we shall not get the finances straight.
There is, however, an additional factor, which we debated before Christmas — what local authorities are allowed to do with capital receipts. Here, too, much more fundamental reforms are required. In this context, the right hon. Member for South Down (Mr. Powell), who is not in the Chamber, in one of his fascinating speeches suggested that the Government were wrong to seek to control expenditure of capital receipts, which belonged not to the authorities but to the ratepayers—it is easy to fall into collectivist language and imply that the institutions own the funds—but should instead examine the control and administration of local authority borrowing. He went on to say, amid cheers from the Opposition—erroneous, in my view, as I do not believe that they fully understood the right hon. Gentleman's point — that if local authorities had full control of their capital receipts, but had to raise loans on their own security rather than on the credit and security of central Government, that would be a logical and rational approach to increase the independence of local government.
I do not think that I have distorted the right hon. Gentleman's point. I am sure that many of the authorities now moaning for more access to capital receipts to supplement their budgets do not for one moment envisage having to raise loans and borrow on their own security, and many of them would have great difficulty in doing so.
Mr. Patrick Jenkin: I, too, heard the comments of the right hon. Member for South Down (Mr. Powell), but I do not entirely follow the point that my right hon. Friend the Member for Guildford (Mr. Howell) is making. It is important to put it on record that local authority borrowing is not guaranteed by the Government. I think that that has become more widely known in recent months as some authorities faced with rate-capping have threatened not to pay their debts. That being so, I am not sure that the right hon. Gentleman's point had quite the force that my right hon. Friend suggests.
Mr. Howell: I am interested to know that. If local authorities borrow on their own security and not on that of central Government, that is a desirable state of affairs which should lead to greater independence of local authorities without their activities constantly undermining the Government's economic and financial strategy, which has been a constant difficulty in the past. The question of capital receipts is very much part of the jigsaw and requires further reforms and improvements.

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I end this somewhat one-tracked contribution by repeating what I said at the beginning. We shall have no peace, no clear basis and no feeling of fairness among local authorities, even the low spenders, until we have clearly established what their functions should be and how the rate support grant can fairly be reduced in line with the reduction in the functions on which local authorities are required to spend money.
5.8 pm
Mr. Norman Atkinson: I wish to comment briefly on some of the conclusions reached by the right hon. Member for Guildford (Mr. Howell). The policy of non-payment of debt to which he referred was reached collectively by the authorities concerned when they were thinking of pursuing a policy of non-compliance with the Government's wishes. That has now changed considerably. No doubt, as the debate develops, we shall hear what is the current position on how those authorities can best seek to defend their services and employment responsibilities.
I agree with the right hon. Member for Guildford that the whole miserable system should go and I believe that majority opinion favours that. The curious thing is that the Government have lived with it for five years. Despite their constant references to the inherent injustice of the system, they have merely added to the injustice and are now making it even worse. As the right hon. Gentleman said, the Government's proposals are bizarre—even when one considers the major influences that have driven the Secretary of State to make his decisions and to reduce the aggregates in the way that he has done.
Someone receiving a meal from the meals-on-wheels service would find it incomprehensible if he were told by the person delivering the meal that the reason for his saying, "I am sorry, love, but there is no meat today," was that to all intents and purposes, Britain now had an oil economy and an oil currency, that there had been a row in the Gulf, or a run on the pound, and that the interest rates were worrying the Treasury. Decisions about the quality of local authority services are dictated by external events in no way related to this country's attempts to maintain a welfare system which recognises the priorities to which Conservative Members continually refer.
I want to consider the difficulties created for the London borough of Haringey by Government policy, and the difficulties with which it will have to contend in attempting to protect the local people. The Secretary of State has now taken on the role of sequestrator. Philosophically, he is using the same methods and mechanism as the sequestrators who are tackling the trade unions. In relation to authorities such as Haringey, his functions seem to be identical to theirs.
The right hon. Gentleman was once a member of the borough council of a constituent part of Haringey, and was at one time, I believe, the chairman of finance.
Mr. Patrick Jenkin: Housing.
Mr. Atkinson: I thought that the right hon. Gentleman had been the guru in charge of Hornsey finance. The right hon. Gentleman is familiar with some of the problems of the borough, and I am amazed that he can gloss over so easily the difficulties that now beset Haringey as a normal London borough.
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First, there is the formula which the right hon. Gentleman has used in setting targets and in deciding the amount of grant. We hear constant references to the local authorities' spending ceilings and general expenditure limits. As I understand it, the right hon. Gentleman will not legally enforce any expenditure limit except for the purpose of imposing penalties. If a local authority wishes to spend above its target, or above the spending ceiling to which the Department refers, the right hon. Gentleman will not prevent it from doing so as long as the money is not drawn from rate revenue. If the money is found from other resources controlled by the authority—from any savings which the authority may have made—it may use such resources to enable it to spend more than its ceiling in order to maintain services. I take it that the right hon. Gentleman's silence means that I am right and that there is no such thing as a legal ceiling on local authority expenditure.
Mr. Patrick Jenkin: What the hon. Gentleman says is broadly correct. The expenditure level of which we gave notice last July was intended to make clear the basis of the rate limit that I announced in December. It is the rate limit which the House will shortly be invited to confirm, and which will be the legal limit. If Haringey or any other authority has other funds tucked away which it wishes to spend in order to maintain a higher level of spending, it will be free to do so. That will be its choice. The rate limit is designed to potect the ratepayers. It is an upper limit on the amount that an authority can raise from the ratepayers.
Mr. Atkinson: That is a most important statement. It clarifies the Minister's thinking. He is concerned about extracting more penalties out of savings, as he will do if the authorities exceed their ceilings. The penalties inflicted under the present ceiling arrangement will increase the right hon. Gentleman's revenue.
Haringey now has no savings and depends entirely upon the money that it receives from rate revenue. In fixing the maximum amount to be collected in rates the Secretary of State ignores the fact the last year Haringey spent the money that it saved. In rate-capping Haringey at a certain level, the Secretary of State has ignored totally the fact that Haringey had to spend all its savings last year in order to stand still. That has created serious problems for the authority.
Mr. Patrick Jenkin: This is an important point. If Haringey believes that because we have not taken account of the state of the borough's reserves the rate limit that we have set requires of it greater savings than we have estimated, the legislation provides the remedy. However, the borough must get a move on, because I shall very soon have to confirm the limit and lay the order. The borough has a remedy. It may ask for the limit to be raised. I have said so again and again. If it refuses to do so, it must be satisfied with the limit that I fix.
Mr. Atkinson: It is not too late for all the rate-capped authorities to talk to the Secretary of State about such problems.
Mr. Patrick Jenkin: Where are they?
Mr. Atkinson: There is every chance that they are on their way to talk to the right hon. Gentleman about their problems. The implied unemployment is now becoming a

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real factor, as is the unfairness that arises where there is a difference of millions of pounds between the savings of one authority and those of another.
The right hon. Gentleman referred to the statement that he made on 24 July. He has also said that there would be only a minimum reduction on the amount that Haringey was to be allowed to collect via the rates. But that is not so. According to the right hon. Gentleman's figures, Haringey must cut its expenditure by nearly 14 per cent., rather than the 3·5 per cent, which the right hon. Gentleman mentioned on 24 July and subsequently. Because, last year, in order to maintain its services and its employment levels, Haringey had to dip into its savings and clear out the cupboard, the borough is now being heavily penalised by the massive reduction being imposed by the Minister. This is an astounding situation and is contrary to everything that the right hon. Gentleman has said.
According to the figures now produced by the right hon. Gentleman, Haringey will receive a total grant of £20·8 million. That is an amazing reduction from 1979–80, when the Government funded 56 per cent, of total expenditure in the borough. The grant has been reduced from 56 per cent, of permitted expenditure to 14 per cent, of budgeted expenditure for next year. The Secretary of State is suggesting that Haringey should restrict its expenditure to £128 million next year, but Haringey says that merely to provide the same services as were provided last year it will need £148 million.
Of the £148 million, the grant is worth only £20·8 million. That is an astounding reduction. It is not a wild exaggeration to say that that is punitive for the people whom Haringey is trying to protect — the most vulnerable. It is one of the most heavily populated areas of London and suffers some of the most severe social deprivation. We have 16 per cent, unemployment—the level is still higher at my end of the borough. Nevertheless, the Government are insisting on reductions in Haringey's expenditure. That will result in massive job losses in the authority. The Government's figures suggest that between 2,100 and 2,300 employees will have to leave.
The block grant system is also grossly unfair because the formula for grant-related expenditure means that there is a maximum variation of only 4·5 per cent, between good and bad authorities in terms of social conditions, not expenditure. That is astounding. Haringey is dealt with exactly like Doncaster and Wakefield, although the unit cost of providing services in such Yorkshire authorities is far lower than in Haringey—far less than 4·5 per cent. The figures that the House is considering show that the differences that affect allocations are insufficiently taken into account.
Mr. Michael Shersby: I have listened to the hon. Gentleman's argument carefully. What is the population of the London borough of Haringey?
Mr. Atkinson: It is 201,000. Although I understand that the number has come down recently, it is comparable with the areas to which I have referred. The variants that are built into the numbers are insufficient.
Mr. Pavitt: Much of what my hon. Friend has said applies to the London borough of Brent, which has a population of 250,000. Ethnic changes have had a substantial impact. Half of the population being from ethnic minorities requires many differences in rate support
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considerations to enable us to have a multiracial community. Does he agree that such considerations seem to be missing from the documents before us?
Mr. Atkinson: My hon. Friend is right. The problem is not that the differences are not recognised, but that the variants are insufficient to take account of those social differences.
We should register our dissatisfaction, from a London point of view, with a system that does not take care of our needs. Government grant represents just 14 per cent, of Haringey's budgeted expenditure. Haringey has mandatory commitments involving between £58 million and £61 million. The Secretary of State might shake his head and say that that is irrelevant, but it is an important consideration. When total Government grant is only £20 million and mandatory commitments involve about £60 million, it is clear that if we are to achieve the savings on which the Secretary of State insists—from £148 million to £128 million — the majority must come from job losses. The Secretary of State is coolly telling the House that the great bulk of the savings will come from pushing people on to the dole queue. That does not seem to worry him. No doubt he thinks that some other Secretary of State for the Environment will pick up the tab and that, in the meantime, such savings will solve his problem. The social consequences of such action are enormous in areas such as mine. That part of the argument seems to have been glossed over.
There are many ways in which savings can be made. I do not claim that everything that the public sector does is the epitome of efficiency. There are many criticisms —we all know what they are—but most local authority money is spent sensibly. All of those whom local authorities employ are accountable and contribute to social welfare in the authority's area. If, because of mandatory commitments, so much of the money that must be saved has to come from job losses, the Secretary of State is saying that Haringey must reduce its work force by about 2,000 to 2,300.
That is an enormous cut. The Secretary of State has said that he does not think it possible to cut by more than 5 per cent, in one year, yet here he is demanding a cut of 14 per cent.—nearly three times what he believes is attainable. That is what he is imposing upon an authority that is driven almost spare by the pressures upon it. If that is not upside-down leadership, I do not know what is.
From now on there can only be misery — cuts in services, in jobs and everything else that the Haringey authority provides. Who will benefit? Certainly the people of Haringey will not, nor will the Government. If we consider the aggregate, the Government will be the loser, because it will cost more to get rid of those people than to increase grant support.
We have four requests. There should be a removal of holdback. Secondly, the 1984–85 slope should be retained. The Minister has said with a great deal of pride that he has increased the slope. That is damaging for inner London authorities, because, as the slope is increased, so things will become increasingly difficult. Thirdly, the GREAs should be improved in line with the recommendations of the Association of London Authorities. Fourthly, grant percentage should be restored.
London authorities, particularly those like Haringey, do not want increases in expenditure limits or matters like that to be discussed. What they want is money. They want

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more from the Secretary of State than he is proposing to give them. That is where the damage is being done. Surely he does not want to go down in history as the person who cut Haringey's services and denied so many people not just the inheritance that he has talked about in welfare services but their jobs. He will be the biggest butcher of jobs of all time in Haringey if this policy is pursued. Let us hope that it is not too late for him to give hope to people in Haringey by revising the figures.
5.32 pm
Mr. Michael Shersby: For the past seven months or so I have spent much time discussing the effect of the rate support grant settlement on the London borough of Hillingdon, in which my constituency is situated, and upon the domestic and business ratepayers. During that period I have attended numerous meetings with the leader of the council and his colleagues and I have made the strongest possible representations to my right hon. Friend the Secretary of State and the Minister for Local Government about the way in which the block grant system is operating most unfairly against prudent Conservative-controlled local authorities, particularly in outer London.
The reason for all the activity in which I have been engaged, together with my hon. Friends the Members for Ruislip-Northwood (Mr. Wilkinson) and for Hayes and Harlington (Mr. Dicks), is that by last summer the leader of the council and his colleagues were keenly aware that, unless the calculations upon which the grant is distributed took account of their excellent performance since they came to office some six years ago, it seemed certain that the grant would be too small, the target out of reach and the penalty in terms of grant loss such as to result in a rate increase of over 40 per cent, or massive reductions in public expenditure to maintain existing services at their present level.
The House, and particularly my hon. Friends, will agree that this is serious for a good Conservative-controlled authority which has already reduced expenditure considerably over some six years. It is extremely depressing for the hard-working councillors who have carried out Conservative policy and for the ratepayers who are concerned about what is happening. They are particularly concerned because Hillingdon has, for the past six years or so, delivered an annual rate increase which has been little, if any, more than the rate of inflation. That is a very good record which is appreciated by the business community. In other words, both the domestic and the business ratepayers in Hillingdon have had a good deal from their council and they expressed their confidence in that council at the last election by providing the Conservative party with a substantial majority to continue its policies. One of the key elements of those policies is the control of public expenditure, which has substantial support within my borough, as has been made known to me by residents' associations, business men and many others.
What is the problem that faces Hillingdon and a number of authorities which, like Hillingdon, are not rate-capped? To answer the question it is necessary to examine the grant-related expenditure assessment. Since the 1981–82 First Supplementary Report which set GREA for England at £17·2 billion there has been an increase of 23·4 percent.
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in the settlement to £21·22 billion for 1985–86. The GREA for outer London boroughs in the same period has increased by 17·4 per cent, to £1·71 billion. The Hillingdon GREA has increased from £71·7 million by 16·2 per cent, to £83·3 million. That means that outer London has received an increase in GREA which is less than three quarters of the national increase for England as a whole, but Hillingdon has been treated to an even lower increase. Why?
One explanation which has some validity is that Hillingdon provides certain services which were introduced by the previous Labour-controlled council which was in office for some years and which was succeeded by the present council in 1978. Those services relate mainly to education and social services. It has been suggested by some of my colleagues that perhaps we are spending too much on, for example, adult education, the rising-fives programme and nursery education.
If my right hon. Friend feels that we are spending too much on those services, I cannot do better than to draw his attention to the remarks of my right "hon. Friend the Prime Minister in the House on 19 February 1973 when, as Secretary of State for Education and Science, she was introducing the White Paper entitled "A Framework for Expansion". She said:
"Dealing with nursery education, the first major proposal in the White Paper was that within 10 years nursery education should become available without charge to children of three or four whose parents wished them to have it." — [Official Report, 19 February 1973; Vol. 851, c. 42.]
Hillingdon implemented that policy. Many people in my constituency find nursery education to be a great advantage, and I share their view.
In regard to social services, we have 12 old people's homes, we provide a subsidised meals-on-wheels and home-help service, and we pay special attention to the needs of the mentally and physically handicapped. I am sure that my right hon. Friend will recognise that if Hillingdon did not provide those services to that extent it would probably not exceed its GREA. If Hillingdon and other authorities are being told to change their expenditure on such services, at least it would be sensible to provide notice and some material help to achieve that objective.
Let us consider the block grant. The first calculation for the 1981–82 financial year was £29·9 million for Hillingdon. The computation for 1985–86 is £17·9 million — a reduction of 40 per cent. I stress that the 40 per cent, reduction has nothing to do with the borough council's spending plans. However, it has a great deal to do with the distributive mechanism for block grant. The reduction for 1985–86 brings the safety-netting process into operation to protect Hillingdon against loss of grant. Hillingdon is not alone. For example, nearly one half of the 146 non-metropolitan districts are in the same position.
Hillingdon is, however, in that select group of eight authorities—with Cumbria and Durham county councils, Chester-le-Street and Forest Heath non-metropolitan district councils, Salford metropolitan district council, Tower Hamlets and Richmond upon Thames London borough councils—which have been safety-net protected against grant loss for each of the five settlements between 1981–82 and 1985–86. Is that not curious? Does my right hon. Friend agree that to require safety-net protection in each of the five settlements suggests that something

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fundamental is wrong with the figures that he has set for each of those authorities from the outset of the block grant system?
Surely my right hon. Friend must accept that the order has to apply safety-net protection against grant loss for 161 authorities — approximately 40 per cent, of local authorities in England—which is more than the previous highest number of 142 in 1982–83. That demonstrates beyond argument the instability and manifest unfairness of the system which prevents the proper forward planning of services which Parliament has authorised, and, indeed, encouraged the authorities to provide.
Mr. Patrick Jenkin: I am listening carefully to my hon. Friend's case. As I said in my speech, this year we made more adjustments in the GREAs to take account of representations by local authorities and local authority associations about unfairnesses that existed before. We have recognised them and made changes. Of course, as my hon. Friend says, the safety-net procedure exists to minimise the impact on local authorities which lose grant. I should have thought that my hon. Friend would have recognised that the safety-net procedure is designed to protect authorities such as his from what might have been a greater impact as a result of changes in GREAs.
Mr. Shersby: I do not question the safety-net provision. It is there to avoid excessive losses caused by changes in grant methodology. However, I question the efficacy of a system that necessitates such protection for a large number of local authorities. The system is far from perfect.
Let us consider the effect that this unjust system has upon my constituency. The continuing reduction in base grant, the 15 per cent, increase in grant-related poundage slope and the swingeing effects of the massive increase in penalty—up 250 per cent, from 2p to 7p for 1 per cent. over target—will require the council to slash its services if it is to continue with its previous record, which I have been proud to support, of containing rate rises to the level of inflation, in spite of the adverse effect of excessive grant settlements.
The decision about what action to take rests with the Hillingdon councillors alone. Let me make the options clear to the House. They are a rate rise of over 40 percent, or service reductions of 15 per cent., equivalent to £11 million, to produce, say, a 5 per cent, increase in line with inflation. They are the two extremes facing local councillors. I do not envy them their task of having to find an acceptable solution. I hope that they will find a compromise somewhere between the two extremes.
I remind my right hon. Friend that I am speaking about an authority which, according to the 1984–85 Audit Commission profile, spent £27, or 6 per cent., per head less than the outer London local government family average. Even after the disastrous effects of grant which pushed rateborne expenditure to £71 or 30 per cent, above that local government family average, it still managed to levy a rate in 1984–85 below that local government family average.
Why, after all the representations by my colleagues and myself, do the Government intend through the rate support grant system to mete out such treatment to a borough such as Hillingdon? Why should I be expected to support a settlement which, at the same time as having a devastating effect on my local authority, can increase the entitlement
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of one of its rate-capped neighbours by 11 per cent.? I am sorry that the hon. Member for Brent, South (Mr. Pavitt) is no longer in his place, because I am sure that those figures would be of particular interest to him.
I must tell my right hon. Friend that I cannot and will not any longer support a settlement which is so manifestly unjust and which cannot operate with sufficient sensitivity as to take into account the success and achievement of my local authority which is of such a high order that it was described by one of his predecessors in office as one of the blue chip authorities.
I am most grateful to my right hon. Friend and the Minister for Local Government for their constant courtesy and willingness to meet me, councillors and local business men to consider Hillingdon's plight, but I cannot accept that my right hon. Friend has been able to make any real impression on the rigidity and inflexibility of a system which cannot and should not continue.
My right hon. Friend has said today that he hopes in due course to bring forward some proposals for change. I hope that they will be significant and that he can make some meaningful changes for next year.
I have to ask myself what is my duty to my constituents tonight. I am clear that it is to express in no uncertain terms to my right hon. Friend and his colleagues my constituents' grave concern about his inability to meet the reasonable expectations of one of the best local authorities in Britain. I very much regret, therefore, that I shall not be able to support the motion to approve the report.
5.48 pm
Mr. John Cartwright: This is the fifth rate support grant settlement since the Government started to try to control local authority spending under the Local Government, Planning and Land Act 1980. It must take the doubtful prize of being the most complicated settlement yet. It has been made more complicated because it is the first settlement under the new rate-capping regime set up by the Rates Act 1984.
The Secretary of State accepts that the complexity of the settlement makes it almost impossible for anyone to understand it. That must undermine the accountability that is so vital to local government. In the past Ministers have argued that complexity is necessary to achieve accuracy in assessments, but Ministers frequently tell us that grant-related expenditure settlements involve a broad brush approach and a rough approximation.
In fact, we have the worst of both worlds — a complex system based on somewhat dubious assessments. Ultimately, that must become self-defeating. If GREAs cannot be understood, changes in grant cannot be understood. That makes it impossible to explain to ratepayers why their rates vary, which makes the defence of local accountability very much more difficult to mount.
The other major feature that has become all too obvious about this settlement is that the Secretary of State has achieved the dubious distinction of having upset virtually everybody. The metropolitan authorities are unhappy because they are being asked to make real cuts in spending when the majority of the shire authorities are not. The shire authorities are equally unhappy because extra block grant and extra leeway in targets have gone to the so-called overspending rate-capped authorities and not to the more prudent ones.
The Association of Metropolitan Authorities has argued that, on the basis of the Government's inflation figures,

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real cuts in spending are being asked of 65 metropolitan authorities, which is 85 per cent, of the total. In the non-metropolitan areas, real cuts are being sought from only 11 counties, which is 28 per cent, of the total, and from 113 districts, which is 38 per cent, of the total. Not only are the targets generally unfavourable to metropolitan authorities, but the revisions to the target methodology have not helped. Of those authorities that have had their targets increased, only 13 out of 213 are metropolitan authorities. That is the case for the metropolitan areas.
The Association of County Councils argues that the 18 authorities due to be rate-capped have target increases of nearly 21 per cent, and that those authorities alone have taken up 43 per cent, of the total increase in targets available. In a judgment that cannot be very good news for the Secretary of State, the Conservative-controlled Association of County Councils states:
"The introduction of rate-capping, far from benefiting lower spending authorities, has very greatly restricted their share of the total available increase in targets."
That, of course, is not the prospect that was offered by Ministers when they were seeking to encourage their Back-Bench supporters to go through the Lobby in favour of rate-capping, but that is what has become all too clear in this settlement.
As we have heard in the debate already, some of the loudest screams of pain and bewilderment have come from those authorities which have actually done what the Government asked them to do—cut their spending and kept to their targets. As a result they do not find that they are being rewarded in any major way by the Government. The concession that has been granted to the lowest spending authorities is minimal. Those who try to follow what the Government dictate are still being penalised.
My hon. Friend the Member for Portsmouth, South (Mr. Hancock) intervened in the Secretary of State's speech to point to the problems being experienced by the Hampshire county council. Its chief executive said that he regards the concessions being given to authorities such as his as only minimal. He said:
"The gap between the target and the Government's own assessment of Hampshire's needs as reflected in the Grant Related Expenditure Assessment is widening and now stands at £29 million. If the County Council were to spend up to the level of assessed need it would incur penalties of £94 million involving a rate precept increase of a further 40 per cent. So far as Hampshire is concerned the purpose of GREA appears to have been lost."
That loyal Conservative authority clearly feels that it has not been given a proper reward for having stuck so closely to the Government's guidelines.
The same pattern has been clear in London, as the hon. Member for Uxbridge (Mr. Shersby) made clear. The Tory-controlled London Boroughs Association points to the fact that all of its 24 authorities budgeted within 5 per cent, of their target for 1984–85. All but two of them were within 2 per cent, of their targets and 10 were actually at or below targets. Yet in 1985–86 those councils—with the exception of Westminster—will be required to make real cuts ranging from 0·7 per cent, in Kensington and Chelsea and the City to 5·9 per cent, in Hounslow.
The London Boroughs Association, with commendable loyalty to the Government, said that it hoped that its member authorities would endeavour to meet their targets.
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However, it pointed out that that would be a difficult task, especially in view of the stringent economy that most of the boroughs had exercised for many years.
The system is clearly rigged to keep low-spending authorities as low-spending authorities. Back in what appears to be the almost halcyon days of 1983–84, a 1 per cent, overspend resulted in a loss of grant equivalent to a 1p rate. In 1985–86, a 1 percent, overspend means the loss of grant equivalent to a 7p rate. It is, therefore, very much more difficult, both politically and financially, to raise spending levels. The new draconian system means that lower-spending authorities suffer most from penalties in relative terms.
The Association of County Councils has pointed out that if its members has overspent their targets in 1984–85 by an average of 1 per cent, the penalty grant loss would have been £68 million. If the same overspend were to take place in 1985–86, the penalty grant loss would be £240 million—an increase of more than 250 per cent. That shows the way in which the small overspenders will be substantially penalised in the settlement before the House.
Together with hon. Members from both sides of the House, I believe that that underlines once again the inadequacy and unacceptability of the whole complex system of targets and GREAs. The whole system is failing to make sense. GREA was originally introduced as an independent measure of what an authority needed to spend to produce a standard level of service. As other hon. Members have said, many authorities have budgets fixed well below the GREA level and are forced to keep them that low by Government targets and by the punitive system of penalties.
We have already heard that three shire counties— Berkshire, East Sussex and West Sussex-would lose all their block grant in penalties if they spent to the GREA level — the level which the Government suggest they need to spend to provide an acceptable level of service. Another four counties — Buckinghamshire, Dorset, Norfolk and Surrey—would lose 85 per cent, of their grant if they spent to GREA level. That undermines the whole case that has been presented during the past five years, that GREA is a useful objective assessment.
I wish briefly to deal with rate capping. I remain convinced that it is an unacceptable interference in the affairs of local government. It is obviously interference in the affairs of the rate-capped authorities. It is now becoming all too clear that it also interferes in the affairs of the non-rate-capped authorities, because they are losing grant which they might otherwise have had if it had not been diverted to the rate-capped authorities.
The effects of rate capping are clearly much greater than the Government originally thought. That results from the distortions that are produced by the whole system of targets and penalties. In earlier years a number of the rate-capped authorities understated their budgets to qualify for more grant, which now has an impact on their expenditure limits.
The expenditure limits which the Secretary of State announced on 24 July did not, at first sight, appear unreasonable. He was asking for a cash freeze in 15 authorities and a 1·5 per cent, cash reduction in the GLC, the ILEA and my borough of Greenwich. Closer analysis shows that the expenditure limits were much tougher than that. The Secretary of State has taken a very narrow view of expenditure in 1984–85. He has chosen to ignore expenditure being financed from special funds and a

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variety of other what are now called creative accounting devices which councils have been forced to adopt to minimise grant penalties. The effect of that was to turn what was claimed to be a cash freeze into an average real cut of 11·9 per cent, for the rate-capped authorities. Individual councils face real cuts of between 6 and 28 per cent, to get down to the expenditure limits.
The Government on the one hand, and rate-capped councils on the other, are taking part in a damaging game of political brinkmanship, and what is at stake is the quality of services provided to local people. I fear that the local people will be the losers in this battle. Rate-capped councils should stop their political posturing and negotiate with the Secretary of State. Meanwhile, the right hon. Gentleman should be as flexible as possible to correct what are clear errors in the original expenditure limits that he fixed. We should accept that this is not a private fight between Conservative Ministers and Labour councillors. We are talking about extremely important services on which many of our constituents depend.
Mr. Tony Banks: Is the hon. Gentleman aware that, by their actions, the Government have turned this into a party political fight? The decisions now being made by Ministers are based, not on a rational assessment of need, but on party political spite. What other response does the hon. Gentleman expect Labour-controlled authorities to give?
Mr. Cartwright: If the rate-capped authorities have a good case—I do not accept it in its entirety, though I accept it to the extent of believing that the expenditure limits imposed by the Government are sometimes based on faulty information—I cannot understand why it should not be argued with all the power at their disposal before the Secretary of State. That is what councillors were elected to do, but they fail in their duty if they simply sit on the sidelines trying to extract political benefit from the brinkmanship that is now going on.
We have in Britain a rating system that is unloved and unreformed. Not only are rates an inappropriate tax to carry the heavy burden that is placed on them, but rateable values are wildly out of date and the Government have not fulfilled their promise on revaluation. In the White paper, entitled "Rates", Cmnd. 9008, of August 1983, the Government said about non-domestic rates:
"Significant changes have occurred in the relative values of some categories of property since the 1973 revaluation."
The Government accepted that that had
"distorted the tax base. As a result, rate bills for some categories of property are much higher or much lower than they ought to be. In particular, the relative rental values of large, old buildings, occupied by labour-intensive industries, many of them in the Midlands and the North, have in general declined substantially since 1973."
The Government also said:
"These distortions should be rectified. The Government propose to set in train the work required for a non-domestic revaluation."
Referring to domestic values, the White Paper said:
"The Government are considering urgently the case for a domestic revaluation and will issue a consultation document as soon as possible."
Those clear commitments were given 18 months ago, but we have seen no indication of what will be done as a matter of urgency to deal with the distortions in the system of rateable values.
I agree with hon. Members who argue that changes are needed in the system of local government finance, but we
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need a more radical change than some have in mind. There is no lack of evidence on and results of research into the problem. It is more than eight years since the Layfield committee presented its report based on two years of detailed expert work. The Government undertook their own consultation exercise in the last Parliament. Yet now we are promised another series of inquiries and studies into the whole problem of local government finance.
We need no more research and study, but the political will to change the system. We must accept that there is no ideal system, one that is proof against every possible criticism. I remain convinced that Layfield was right when it recommended that the only way forward was the introduction of a system of local income tax to replace or supplement the system of rating. The computerisation of the Revenue has made that a more practical proposition than it was in 1976. The sooner we get on with the job, the better for the ratepayers and the health of local government in Britain.
6.5 pm
Mr. Churchill: I agree with the hon. Member for Woolwich (Mr. Cartwright) that low-spending authorities are boxed in should they seek to increase their expenditure.
I have great sympathy with the Secretary of State. Those, if there be any, who would present him with bouquets are significantly absent from the Chamber, whereas those who wish to belabour him with brickbats are here in force, and I regret to tell him that I find myself in that latter category.
Last year the Secretary of State undertook to assist low-spending authorities. Much has been said about the plight of the shire counties, but not only those counties are suffering. As the representative of part of the metropolitan borough of Trafford in Greater Manchester, I assure my right hon. Friend that we suffer the same problems with a vengeance.
The Secretary of State claimed to have honoured his pledge, given last year, to assist the low-spending authorities on the basis of the 4·625 percent, increase. In consequence of that increase, Trafford has benefited to the extent of £267,000 in the current settlement but, regrettably, because Trafford is labelled a high-resource authority it will lose £56,000 of that in grant if it spends the extra money, for we suffer from what is known in my right hon. Friend's department as a negative marginal rate of grant. As a result, we lose 21p in every pound. While, therefore, I am sure it was not my right hon. Friend's intention to mislead the House, his opening remarks today were not accurate in the case of Trafford borough council.
Thus, while the net benefit from this special dispensation for low-spenders is barely £200,000. in almost the next breath my right hon. Friend is again removing £2 million in grant from Trafford. Our grant is being cut from £20·5 million this year to £18·5 million next year, and we have recently been informed that we have lost a further £1·05 million on notifications of adjustments on previous years.
Mr. Straw: The hon. Gentleman says that his authority's grant has been reduced from £20·5 million to £18·5 million. Does he appreciate that that grant this year would have been only £18·5 million but for the fact that his authority was given grant that was taken away from so-called overspending local authorities? In other words, his

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borough is the classic example of a lower-spending Conservative authority benefiting through the grant system from alleged overspending by Labour authorities.
Mr. Churchill: I am all in favour of the borough of Trafford benefiting from the excellent rate-capping policies of the Government. My complaint is that we do not seem to be benefiting. The bottom line for my constituents is that, in spite of the Secretary of State's promises and the £250,000 added to us for being a low-spending authority, Trafford is this year losing £3 million, or 15 per cent, of its rate support grant, and that is an unacceptable level of penalty.
I regret to say that this is not a one-off situation. Last year we lost £2·5 million, and the year before that £1·9 million. In the preceding year we lost £2 million. If we take a 10-year perspective, it is estimated that at current prices, and allowing for the transfer of part of the grant to the Greater Manchester council, Trafford's 1975–76 grant would be worth £40 million. If the 26 per cent, overall reduction nationally in rate support grant is applied, Trafford's grant this year, on the basis of the 1975 settlement, would be £29·6 million. That means that Trafford has lost £11 million over and above the national reduction.
I am sure that my right hon. Friend the Secretary of State will concede that no local authority could have followed the Government guidelines more closely than Trafford. In each of the past four years it has been within £2,000 of the low side of the Government's guideline, with the exception of 1983–84, when it undershot by £1·75 million. I believe that Trafford should be congratulated on the responsible way in which it has budgeted and sought to remain within the Government's guidelines. However, it has been losing about 10 per cent, of its rate support grant year in and year out.
This year the Government have excelled themselves. Trafford's loss this year, including the clawback of £1 million in respect of previous years, is about 15 per cent. What is the Secretary of State's purpose? Why does he insist once again on kicking in the teeth his most loyal supporters? I freely exonerate my right hon. Friend from any charge of malice. However, following his remarks in opening the debate, about the complications of the formulae and the abstruseness of the acronyms that are involved, we must wonder whether he and his ministerial colleagues begin to understand the system, let alone its unfairnesses.
Trafford suffers from being labelled a high-resource area. One of the key reasons for that is that it encompasses the vast industrial area of Trafford park. As is recognised in a recent White Paper, which was referred to by the hon. Member for Woolwich, the industrial areas of the north of England are seriously overvalued and, therefore, overrated. The Government's failure to proceed with a rating revaluation—there has not been one since 1973— means that my constituents are being penalised in each RSG settlement.
Trafford is not alone in being labelled a high-resource area. London is in the same boat. However, unlike London, Trafford does not have its difficulties acknowledged by the Government. The London boroughs benefit from the effect of the so-called multiplier. Paragraph 9 of the rate support grant White Paper states:
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"Multipliers are a device for adjusting grant entitlement. They can be used for a number of reasons—for example, to … discount part of the rateable resources in a particular area eg in London".
Why should all the privileges and cash go to London? Why should an industrial northern area such as Trafford not be entitled to benefit in the same way and to be protected from being, allegedly, a high-resource area?
Mr. Simon Hughes: I appreciate the problems which the local authority within the hon. Gentleman's constituency has to face, but the implications are the same when a London borough has suffered a reduction in its share of the budget from 16 to 15 percent. If that happens, we may reach a similar conclusion. I hope the hon. Gentleman will agree that he cannot conclude that London must be happy because it is a net beneficiary of the readjustments of which he is complaining, because it is not.
Mr. Churchill: London has benefited for a long time from the multiplier effect. Its effect is to enable most London boroughs to enjoy a discount of 30 per cent. I believe that Tower Hamlets receives a 45 per cent, discount. This obviously has a bearing on the resources available to it. If this system were applied at the London level in the Manchester borough of Trafford, the resources that it receives from central Government would increase by £12 million to £15 million. I ask my right hon. Friend the Secretary of State to take into account the clear bias and unfairness that exists because there has been no proper rating revaluation. This has had an adverse effect on industrial areas in the north. Secondly, high-resource areas such as London are discounted, whereas Manchester is not.
Last year I and my hon. Friend the Member for Altrincham and Sale (Sir F. Montgomery) took on trust the assurances of my right hon. Friend the Secretary of State and his ministerial colleagues that positive steps would be taken to help low-spending authorities. I cannot accept that to give Trafford £211,000 with one hand and to take away £2 million with the other is an acquittal of that promise. As a strong supporter of the Government's policies across the spectrum, it will give me no pleasure whatever to be unable to support the Government when the House divides later this evening.
6.17 pm
Mr. Peter Pike: During the election campaign prior to the Conservative Government taking office in 1979, Conservative party candidates promised to give more freedom to local government. They promised also to abolish the rating system. Local government has not been given more freedom. Indeed, it has been subject to increasing restrictions year after year.
I was involved in local government until last year. At the time when I was elected to this place, I thought that local government had seen the worst of the Government's impositions. Unfortunately, local government finds itself in an even worse position. The controls that the Government have placed on capital and revenue expenditure have tied down local government and made it impossible for councillors to do the job for which they are elected. I often wonder now why members of the public stand for election as councillors. If elected, they will be unable to do the job that they wish to carry out on behalf of those whom they represent.

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We have seen no change in the rating system since 1979. I recognise that the present system is an easy and cheap form of taxation and that it is difficult to agree on an alternative system that would not produce more anomalies and problems. However, the Government have failed to meet their promise to abolish the rating system.
A considerable burden has been transferred from the Government to local ratepayers since the Government were elected in 1979. The RSG settlements since 1980–81 show that a massive burden has been transferred from central Government to local ratepayers. That would be so even if we assumed that there had been no inflation and that the costs of running local government during that period had remained static. The 1980–81 RSG settlement was 61 percent. In 1981–82 it was reduced to 59 per cent., in 1982–83 to 56–1 per cent., and in 1983–84 to 52·8 per cent. For the current year it is 51·9 per cent., and we are talking of 48·7 per cent, for the following year. That means that an additional burden of 13 per cent., which would have been borne by the Government if the settlement were still 61 per cent., has been transferred to local ratepayers. At the same time, additional burdens and tasks have been thrown on local government by central Government.
The Government admit that they cannot assess the costs borne by local government. It is extraordinary that the Government can introduce policies without fully knowing the cost implications to local government in terms of staff and revenue. It is clear that, even without taking account of holdback and penalties, the Government are responsible for most of the rate increases in recent years.
The Secretary of State referred to rate increases next year in single figures, yet the Association of District Councils forecasts that 67 shire district councils will need rate increases of more than 20 per cent, and 164 district councils will need increases of between 10 per cent, and 20 per cent., with the average increase likely to be 11·7 per cent. The ADC is certainly not a Socialist-controlled body, yet it says that this year's RSG settlement is harsh, and I certainly agree.
My hon. Friend the Member for Copeland (Dr. Cunningham) said that 38 out of 39 shire counties had cash targets below their grant-related expenditure assessment level. Lancashire is in that position. If Lancashire county council were to spend up to its GRE figure, it would incur penalties of £46 million. The GRE is, however, the level considered to be necessary to provide a typical standard of service, according to the Government's criteria. That level is not determined by the local authorities; it is the Government's basis for determining what a council should spend.
Lancashire's GRE is just over £532 million and £22 million over its cash target figure. Expenditure above that level results in the council incurring a penalty. That is nonsense. To maintain its present level of services next year, Lancashire would need to increase its precept by 46 per cent. I do not envy the councillors' unpleasant task of dealing with their budget in the months and years ahead. The council really needs to spend more on education and social services, and surely it cannot be expected to cut fire, ambulance or police services.
I am annoyed about the way in which we allow subsidies to be provided for private residential homes for the elderly. There has been a massive growth in the number of those homes. Would it not be far better to allow those Government subsidies to be transferred to local
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government to provide care for the elderly than to permit profit to be made from them? If the Lancashire county council does not make economies, the ratepayers will be heavily penalised by the Government. That is wrong. The Government must think again about their proposals.
The position of the borough of Burnley differs from that of the county of Lancashire. The borough's cash target is higher than its GRE. The GRE assessment for the year ahead is £5,422,000, which is £50,000 less than this year. We are not certain why the figure is lower. The cash target has increased by 3·75 per cent, on this year's target to £8,481,000—much higher than GRE. During the current year, the council is budgeted to spend slightly over its cash target. If the council budgets in 1985–86 to spend at target, what will happen as a result of the Government's proposals for next year's RSG? The reduction in grant alone will cost Burnley ratepayers £510,000, or the equivalent of a 6p rate on top of this year's 40p rate. Just to spend at target, the council will have to increase the rate by 8p to 52p. That is what will happen without inflation and extra services.
At the top end of spending on this basis, the rate of grant will be down by 12·5 percent. That is the penalty incurred for having a cash target higher than GRE. Once a council spends above its GREA, the rate of grant decreases. When a council spends at the threshold level, RSG decreases again. That causes a considerable difference at the top level of 12·5 per cent. That is what the measures will mean to Burnley next year.
Burnley council feels that its GRE is far too low. That point has been made on many occasions to Ministers, but there has been no reaction from them. It is nonsense for Burnley to experience such a large difference and to receive such a large part of its grant at the lower rate once it has gone above GRE. The ratepayers of Burnley must, therefore, meet a much higher percentage of the cost, and that is wrong.
The Government recognise Burnley as a deprived area according to its designation in the Inner Urban Areas Act 1978. In 1983, Burnley was designated as a deprived area. Because expenditure arising from Burnley's designation is not disregarded and because there has been no adjustment in GRE, there have been revenue implications. Burnley can, therefore, incur further penalties, and that is wrong.
Burnley has not yet finalised its budget for 1985–86. At this stage, its estimates are well above target. Burnley council is not a high spender or overspender. Burnley is an old industrial town. It is like other towns in Lancashire, such as Preston and Blackburn, on which this country's wealth was built during this century and the last. Those towns, which have experienced industrial dereliction, must deal with many problems. Inflation has caused some increase in expenditure, because the inflation rate is higher than the increase in target.
I am worried about the fact that, year after year, the Government fail to recognise that capital allocations have revenue implications. Many people, on noting housing investment programme allocations, tend to think that that money is handed on a plate to local government. They do not think of HIP as permission to local authorities to borrow money or of the revenue implications. Capital allocations affect staff and thereby revenue.
Each year, Burnley council has great difficulty in ensuring that revenue demands are containable within the budget. Our HIP allocation is totally inadequate. Indeed, next year's allocation has been decreased by £1 million. We cannot deal with the housing problems facing us in

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Burnley. Burnley and many other towns are heading in the near future for a housing crisis in the public and private sectors, but that is a subject for another debate. It is appropriate to consider the revenue implications of the HIP allocation in today's debate.
When I was chairman and leader of Burnley borough council I believed that the grant portion of the HIP allocation had only a small revenue implication and that the council should spend more of the grant in the private sector because the revenue implication was less than new build of sheltered housing or improvement of council houses. However, the 10 per cent, revenue implication for Burnley on meeting the debt charge for improvement in the private sector is now running at about £250,000 which is equal to a 3p rate.
Mr. Straw: Does my hon. Friend accept that there are indirect as well as direct revenue implications from HIPs in boroughs such as his and mine upon all the current services of the borough and Lancashire county council from not solving the mounting housing crisis due to the additional burdens that will be placed on the social services?
Mr. Pike: I accept that point. The burden on social and other services will increase rapidly. In the long run, the cost to central Government will be high because we will reach a stage where we can no longer improve the housing stock but will face demolition and clearance, which is far more costly.
Ministers often imply that council balances are too big and that they should reduce them. As I have said more than once, a balance can be used only once. Once it has gone, the implication has to be met the following year. It also reduces revenue because interest is obtained on investments.
Next year only 20 per cent, of capital receipts can be used. That has serious implications. This year Burnley will have spent the 40 per cent, permitted. That will reduce the income to the housing revenue account from the money that has been invested and held in reserve. I utterly oppose the reduction. Capital receipts supplement the capital programme. If the council can pay from capital receipts, there are no revenue implications. Councils should have been permitted to continue to spend at the present level of their capital receipts.
Burnley is not an overspender. That applies to all Labour-controlled councils which are referred to continually as overspenders. They are trying to provide services for the elderly and transport for those who need public transport, to improve industrial requirements to maintain jobs, and to clear industrial dereliction and take their boroughs and citizens into the next century in the type of environment to which they are entitled. They are not overspenders. I challenge the Secretary of State to come to north-east Lancashire to see its towns. If he believes that we are overspending, let him tell the public what he would want to cut and where we could save money. I am opposed to the Government's proposals for next year's RSG.
6.33 pm
Mr. Robin Squire: Unlike most speakers, may I begin with a kind word for my right hon. Friend the Secretary of State? [Interruption.] I have no interest in the Secretary of State. My kind word arises from
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the outcome of the 1984–85 settlement. It is worth putting that on record, because we were told then by many prophets of doom that rate increases would be 15 to 20 per cent. They turned out, as my right hon. Friend said, on average to be 5 per cent., and some were even reduced.
My right hon. Friend has also said that he believes that the picture will be similar for the 1985–86 settlement. I join him in hoping that that will be true as I need no convincing that high rates are damaging to employment prospects and industry generally.
I hope that my right hon. Friend who is to reply to the debate will take it in good part if I devote the rest of my speech to analysing the 1985–86 settlement with, I hope, constructive suggestions of how we may proceed a little better.
It is perhaps stating the obvious that no one but the Treasury seems to welcome the RSG. This year is no different from any others. There seems to be a growing tendency for so-called high and low-spending authorities to claim piously that they, more than any other group of authorities, have been treated worse by the settlement. A moment of thought will convince us that both groups cannot be right. It is a consequence of the complexity of the system, which, in fairness, my right hon. Friend the Secretary of State has acknowledged, that all groups of authorities sooner or later find themselves out of sympathy with one or other of the many complex ways in which the settlement operates.
I shall consider, first, the rate-capped authorities. I fear that one consequence of the system will be the reduced accountability of rate-capped authorities to their electorate. The Government's stated intention is to have low rate rises and lower expenditure in real terms. In broad terms, I applaud that. As a consequence of the settlement, some authorities have received more grant and many have received easier targets. Let us consider the example of the Islington people's republic. It did not receive any grant in 1984–85. It has now been rate-capped and is scheduled to receive £25 million in 1985–86, and, because targets are based broadly on 1984–85 budgets, its target will be only 1·5 per cent, down on that figure, which, in relation to other London boroughs, was comparatively high.
I accept that penalties for overspending have been made considerably more severe in this settlement, although they are predominantly—
Mr. Jeremy Corbyn: How much grant is Islington due to receive in the next financial year under the settlement announced by the Secretary of State?
Mr. Squire: As I said to the House a moment ago, according to the figures that I have, Islington is scheduled to receive £25 million in 1985–86. No doubt if I am wrong the hon. Gentleman will give us another version.
The effect of raising penalties on overspending will be felt proportionately more by the marginal overspenders than by the large overspenders. It is difficult to get away from the feeling that at least some of the wages of sin are high grants.
The key point is that the total of the grant adjustments and various assumed spending level adjustments affect rate demands by much more than adjustments in local authorities' spending levels. That worries me a great deal. I believe—I hope that my right hon. Friends accept this —that we should be moving towards greater accountability of local authorities to their electors, rather than

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appearing at times to be moving in the opposite direction. I contrast that with the position of low-spenders. This year—this is welcome—they received an improvement in their target figures of 4·5 or 4·625 per cent. on their 1984–85 budget.
However, the system, in effect, underplays the cumulative effect of years and years of overspending or underspending. Regardless of one's political view, that means, as we have already heard today from other hon. Members, that many so-called low-spending authorities face massively steep cuts in Government support. I can give a few examples. The royal borough of Kingston falls from £15·7 million to £14 million; Surrey county council falls from £46·5 million to £36·2 million—at that rate it will receive no grant in another three years—and Essex county council goes from £147 million to £132 million. They are all low-spending authorities. I know that my right hon. Friend, when he replies, will say that it is an unavoidable consequence of the system, arising from its treatment of high resource authorities, but it comes a little hard on such authorities when they compare that treatment with the treatment apparently meted out to the high-spending authorities.
I will use my own authority, the London borough of Havering, to illustrate what I think will happen in London. If I get it wrong, I am sure that my right hon. Friend will point me in the right direction. The London borough of Havering, like most outer London boroughs, is a responsible authority. As I understand it, the GLC capped precept for 1985–86 will be under 1 per cent. less than the current year, so we can probably assume that there will be approximately the same precept for the coming year as for the current year.
In addition, outer London boroughs will need to find the LRT precept of 10·8p. There is an overall reduction—we all know about it—of central Government grant, and clearly London will take its share of that reduction. All boroughs must also find money to fund the inflation-adjusted cost of their existing services, plus the inevitable improvements in some services. I do not believe that it is possible to find all that money without having a rate increase higher than the rate of inflation. I say that with some sadness, because I hope that we would seek to have rate increases at or about that level, but I am worried that it would be difficult, if not impossible, for that to be so in outer London.
I should like briefly to put down a marker for the settlement for next year. I noticed that it was done in the debate last year, albeit in a different context. My short and simple point concerns the financial arrangements for the abolition of the GLC. The present proposal is that certain functions will be charged to the boroughs on the basis of population, whereas in the past they have been charged on the basis of rateable values. I am the first to accept that in theory, by the time that we have passed through the equalisation process and all the other measurements, everything will turn out to be exactly the same, but that is in a perfect world. In this respect, perhaps more than in most others, I submit that we do not live in a perfect world. There is real concern in outer London boroughs that they will suffer as a result of the proposed new basis. I hope that my right hon. Friend will consider that problem in time for next year's settlement.
I should like to place on record the importance of the continuation, for much of London and the London boroughs, of the equalisation scheme whereby the inner
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London high resource authorities fund the rest of London. Much of that resource is generated by the activity, in employment or shopping terms, of outer London residents, and it is only fair and proper that they should continue to have some share of that benefit in the future.
With regard to grant-related expenditure, I should like to follow some of the interesting points made by my hon. Friend the Member for Uxbridge (Mr. Shersbyl, who is not at present in the Chamber. I welcome the improvements which have been made in refining GRE statistics, although there are still one or two bugs in the system. The two largest areas of expenditure are education and social services. The GRE figures for London boroughs show that no more than two or three of the outer London low-spending boroughs can come down to anywhere near the level of their GRE figures. I shall need some convincing that that is because they are wild overspenders and not because there are inherent faults within the system of measurement which, I am sure, also apply outside London. It seems unlikely in the extreme that all the otherwise very responsible authorities should consistently find themselves way above the figures for grant-related expenditure. If targets are to be abolished some day, and if GRE is to become virtually the sole source of control and measurement, reform will become even more essential because of its higher elevation within the system.
I welcome—as I am sure almost every hon. Member must—the recent announcement of a review of the system of funding local authority expenditure. However, there is some danger of the announcement that there is to be a review of local authority finance becoming the equivalent of, "Your cheque is in the post." None the less, we cannot have everything in life. Above all, I assume that my right hon. Friend will confirm that there cannot realistically be a prospect of a new system being in place before the next general election. Therefore, we shall be looking at at least three settlements—or perhaps more—the basis of the present system. That is why it is so important to improve it.
The present system relies on rateable values that are now 12 years out of date. It relies on a total rate support grant that has fallen below 50 per cent. On the basis of the principle that he who pays the piper should call the tune, now that local authorities are meeting more than half the expenditure, will my right hon. Friend, as a starter, consider removing the existing targets and controls from low-spending authorities, as they are already paying, in virtually every case, more than half the cost of their services? That suggestion at least seems to be worth looking at.
I remain convinced, as I think several hon. Members know, that the only real solution is a major long-term reform which above all recognises the social revolution that we have experienced. The old concept of one rateable unit and one wage earner in a household has long gone out of the window. The fact is that several earners within a home are competing, so to speak, with those homes with only one earner and it is the central fault of the present system. That is the only reason why putting still greater weight on local expenditure, as against income tax, must remain a little suspect until the necessary reform is in operation.
In essence, the whole problem with targets and penalties is that, the more we have, the more we seen to need. Perhaps it is a consequence of pressure building up. The more we seek to stop pressure here and there, the more

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we seem to need it. It is almost a form of addiction—a sort of local government bondage. The more controls we try, the harder it is to give up the habit.
Years ago the last Labour Government—it was years ago, fortunately — successfully managed to shovel largesse to their friends quite shamelessly year by year. Today, despite a vast amount of human and computer effort, and consequent expense, we simply cannot do that. That may be a gain or a loss, depending on how people look at it, but it is a reality. Perhaps, until we get the necessary reform, the safest thing for all of us to accept is that virtue in general will be sparsely rewarded, and that those seeking to achieve anything better than that will have to look forward to the long-awaited outcome of my right hon. Friend's review.
Several hon. Members rose—
Mr. Speaker: Order. Before I call the next speaker, I should tell the House that I understand that the first Front Bench speaker would like to rise at about 9 o'clock. I estimate that if those who are in the Chamber now speak for approximately 10 minutes each, I shall be able to ensure than everyone who wishes to participate in the debate will be called.
6.50 pm
Mr. Jeremy Corbyn: There is a common theme to debates on local government matters—that, in the many hours intervening between the time when the Secretary of State opens the debate and the Under-Secretary replies, there are no speeches in support of Government policy either from Tory or Opposition Benches. That is because every hon. Member is under great pressure from his own local authority or from people in his area, concerning local authority services and the way in which Government funding is continually taken away from local authorities.
With glee, Tory Members ritually attack the inner city authorities, the Greater London council, the metropolitan counties and all the others, and have voted through the Rates Act and with it rate capping. They will rue the day that they did that, because the Government are fundamentally attempting to destroy democracy for local government. They have been doing so since 1979. The political principle on which they have operated is sheer selective vindictiveness against the poorest people in the country. Every inner city area has been penalised by the Government because the Government's notion of overspending is that, if a council tries to provide services that go some way towards meeting some of the needs and aspirations of the poorest people, they kick the council in the teeth. If a council continues to do that, despite the Government's blandishments, it does not get kicked in the teeth, but has its head cut off and suffers an unprecedented media barrage inspired by the Government. If one looks at any inner city area, one finds that disgraceful pattern.
The Government's policies are not only unpleasant and vindictive but, in their own economic terms, very shortsighted. If all those councils made the cuts that are requested by the Government, what would be the cost in economic terms of paying redundancy money, unemployment benefit and supplementary benefit, and of the loss of tax income, rate income and all the other incomes that would be lost from those deliberately made unemployed
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by Government policy? There is a circular effect. The Secretary of State for the Environment might not care to reflect on that side of it, but when his term of office ends, as I hope it will soon, he might care to reflect that, during his time as Secretary of State for the Environment, he has done more damage to local government than any of his predecessors, without exception, because he has sought to destroy the very basis on which local government was set up.
Mr. Nicholas Baker: I have great respect for the hon. Gentleman because I know that he has some knowledge not only of inner cities but of Dorset. However, can he modify his strictures a little? Under the system, a county such as Dorset, which has followed the Conservative Government's guidelines, comes out worse, so it is said, than many other local authorities, particularly in inner city areas.
Mr. Corbyn: I thank the hon. Gentleman for his intervention, because it illustrates my point.
I represent an inner city area that has suffered badly at the hands of the Government, on rate support grant. It must be said that Islington borough council has not sought to follow the Government's guidelines on spending and has been penalised. However, county councils, shire counties and others that have followed the Government's guidelines are now also being penalised and the Government seem unable to recognise that a county council has services to maintain, often at great expense, as do councils in rural areas—something which, again, is not understood by the Government.
Tory Members might rub their hands with glee at the attack that the Government are making on Islington and other councils like it, but the time will come when the same attack will turn on them. There is an inexorable logic in the Government's process of destroying all local authority independence and democracy as they proceed over the years. Therefore, I hope that tonight there will be a large rebellion by Tory Members against the report, because it will destroy all forms of local government as the Government carry on destroying the welfare state.
I should like to refer to the effect of the Government's cuts on my constituency and Islington borough. I shall try to demonstrate to the House that, had the Government not changed the rules on local authority spending and not so shamelessly attacked certain borough councils, this year the ratepayers of Islington would not face large rate bills but there would be a cut of about 50 per cent. in those bills. That would have happened if the Government had played by the rules under which the current borough council in Islington was elected in 1982. The same could be said of many other local authorities.
The Secretary of State has said that the borough of Islington's budget should be £85·6 million. The council carefully examined all the costs of its services, the needs of the poorest people whom it represents and the implications of the manifesto on which it was elected in 1982. It feels that the budget should be £94 million. That argument can be supported in detail by the borough council. If the Secretary of State wishes, he is free to visit the borough of Islington and find out for himself what is going on there. I renew my invitation to him to come to Islington and join in a public debate on why he selected it for such vindictive treatment. I understand that the last time that he visited Islington he took part in a dinner of the Conservative association—
Mr. Tony Banks: Has it got one?
Mr. Corbyn: The borough has a Conservative association, but it keeps behind closed doors.
The Secretary of State proposes a cut of £8·4 million in the budget of the borough of Islington. The effects of the cut would be felt by everybody in the borough. There would be a loss of around 800 jobs, the closure of several important facilities and cuts in the street sweeping services, the library service, services to help those with disabilities, day centres for the elderly, and home help services. With that tale of misery, a further 800 people would be in the dole queue in a borough where the unemployment rate is already well over 20 per cent. In the two Department of Health and Social Security districts that cover most of my constituency, there are already over 34,000 registered claimants. Therefore, by any stretch of the imagination, it is an area of high unemployment and enormous, grinding poverty.
The Government's solution is to take money away from my borough and my constituency by cutting rate support grant and health spending and by rate-capping the other two authorities that are of great assistance to us—the Inner London education authority and the GLC. Therefore, we are not just rate-capped but tri-capped by the Government. I hope that the Minister for Local Government, for one, will begin to understand—he has some experience of local government—exactly what the effect of all that is.
If the Government had not altered the rules on holdback of grants, the borough of Islington would be £23 million better off. If they had not altered the slope, we would be £28·1 million better off. If they had not changed the rules on the GRE formulae on housing expenditure, we could have a budget of £94 million, which is what is needed for this year, and there would be a rate reduction this year of 40 per cent. for the ratepayers of Islington. That is the truth, which the Government are not prepared to listen to or concede. They are guided in their proposals for local authorities not by notions of efficiency or of the way in which local authorities should be run, but simply by vindictive action against the poorest inner city areas. That is what the rate-capping proposals are about. That is what the abolition proposals are about. That is what the rate support grant cut is about.
In examining each local authority's performance, instead of penalising those which attempt to provide for the needs of the elderly and single people and the housing problems in inner city areas, the Government should look at the high unmet need in any inner city area. I happen to represent Islington. Its needs are not that different from those of any other inner city constituency. We would like more home helps working for the council, more day centres for the elderly and better facilities for the physically and mentally handicapped, because in all those areas there are waiting lists, not at the wish of the council but simply because the Government treat our local authority in the same way as every other.
I believe that we are now coming to the end of the period when local authorities were in a position to argue with the Secretary of State and, if necessary, raise the rates in order to maintain services. That is a painful process that local authorities have gone through every year since 1979. But since the announcement of the rate-capping proposals
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and the further cuts in the rate support grant, we are reaching the end of the road on which local authorities can negotiate their way out.
The Secretary of State has succeeded in uniting a large number of local authorities of differing areas and in some cases differing needs, uniting all the local authority trade unions in support of those authorities' policies, but also uniting a huge volume of public opinion against the Government because people in the poorest inner city areas realise that public spending through local authorities matters, it is important, and it is a way of redressing some of the imbalances that are endemic in society as it is currently organised.
Mr. Tony Banks: Is not the point that my hon. Friend is making further support to the point that I tried to make to the hon. Member for Woolwich (Mr. Cartwright) when he suggested that Labour authorities should go and argue their case with the Secretary of State? The Secretary of State is not interested in listening to a rational case. All the evidence on local government restructuring in the country is against what the Government propose, but the Government wilfully ignore it. What is the point of listening to people who have open mouths but closed minds?
Mr. Corbyn: Precisely. The Secretary of State continually says that the local authorities on his hit list should come and negotiate with him and talk to him. Frankly, they have had nothing but attacks from him for the past five years. Why should they assume that anything will be different now? Why should they assume that he wants to do anything but try to destroy the unity that has been built up between those authorities and the trade unions that support them?
The Secretary of State has created a monster in his rate support grant proposals and his rate-capping proposals. He has created the most enormous opposition to himself and the Government. The Government may well squeeze this nasty little measure through the House tonight, but the opposition that they have created will live for a long time. The unity of that opposition will live for even longer. It will destroy him, his Government and this kind of attack on democracy, and it will lead to the election of a Labour Government committed to the restoration of genuine local democracy that has been so shamelessly destroyed by the Government.
7.2 pm
Mr. Mark Wolfson: I shall endeavour to respond to your call for brevity, Mr. Speaker.
In following the hon. Member for Islington, North (Mr. Corbyn) — I am aware, having fought my first parliamentary election in that constituency, that Sevenoaks is an area with very different conditions from those of north Islington—I wish to bring to the attention of my right hon. Friend the Secretary of State the way in which the rate support grant settlement has affected the Sevenoaks district council.
The council has done all that the Government have asked of it. I believe that three examples will suffice to demonstrate this fact. First is the record on rates. Expenditure has increased by only 8 per cent. over the last five years against an inflation rate in that time of some 50 per cent. Rate increases in Sevenoaks have gone up by 4·6 per cent. in four years. As to staffing, in the council there

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were 779 full-time staff in April 1981 and by October 1984 the numbers were down to 559, a drop of 28 per cent. in three and a half years. This has required major reorganisation of management, of structure, of staffing and of working methods. Nevertheless, the council has continued throughout 1984 to plan further economies, further streamlining of services and further productivity increases. At least some of these schemes are unpopular with ratepayers and politically difficult, but in my view they have been right and proper decisions courageously taken by councillors who are determined to achieve value for money for their ratepayers. I will not labour the point, but by any standards this is a record to be proud of. I believe that my right hon. Friend would not disagree.
However, financial planning for 1985–86 is made nonsense by the announcement by the Secretary of State last December of the rate support grant as it affects Sevenoaks and other district councils. Without adequate warning, this year's grant to Sevenoaks has been reduced for 1985–86 by a staggering 18·5 per cent. Of this reduction, one third had been anticipated by the council and taken into account in its proper and prudent budgeting, but the other two thirds comes as a bolt from the blue, far too late for the council—if, indeed, it has any further scope to do so—to make additional cost reductions in time for next year. This means, therefore, as night follows day, a rate increase way above the Secretary of State's guidelines and what the district council wished or deserved to have to levy.
I want to make it clear that neither I nor the Conservative-controlled council is disputing the necessity for the Government to achieve a reduction in the overall level of Government support for local authorities on current spending. That policy has my approval and support. What I do complain about most forcefully is the way in which the rate support grant settlement has continued to penalise the prudent and in some cases to reward the profligate. My hon. Friend the Member for Uxbridge (Mr. Shersby) has given another example on a far larger scale, as has my hon. Friend the Member for Davyhulme (Mr. Churchill).
From my discussions with my hon. Friend the Member for Bristol, West (Mr. Waldegrave) and his advisers, it is clear that two factors in particular cause part of the problems for my district council. These are the change of criteria for assessing the recreational requirement of district councils and the fact that the spending of town and parish councils within the district is not subject to any overall control.
Parish precepts in recent years have increased by between 10 and 12 per cent. annually. In my view the grant-related expenditure factor for total parish precepts bears little resemblance to actual expenditure, despite the statement that GREs take special characteristics into account. I put it to my right hon. Friend that parish precepts should either come into both target and GREs on an actual basis or be excluded altogether. I ask for his assurance that this point will be considered further by his Department.
I return to the main complaint which I wish to put to my right hon. Friend in the strongest terms. Here is a council that has done all that the Government have asked of it. Prudent budgeting has been penalised and forward planning has been made impossible by an unexpected and
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heavy blow delivered at the eleventh hour. The rate support grant system is still a very blunt instrument. Further refining is essential and such refining must surely result in a very much greater reward for those councils that do what is asked of them. We were given assurances about that last year, but it still has not happened. This year's settlement, although necessary for the nation as a whole, is still far from satisfactory in its application to my own and other careful authorities.
7.9 pm
Mr. William O'Brien: As I listened to the Secretary of State's presentation of the reasons why he believed that the House should accept the proposals, I thought on more than one occasion that it resembled something out of the well-known series, "Yes Minister".
The hon. Member for Sevenoaks (Mr. Wolfson) brought in a new dimension when he pointed out that parish precepts were not covered by the legislation. If he is suggesting that parish council rates should attract rate support grant—he will be aware that at present they do not—I am sure that he will have the support of many Opposition Members. I hope that he will press his right hon. Friend on that.
In addition to 1985–86, the year under discussion, the Secretary of State advised the House that he could not envisage any relaxation of control or rate-capping for the following year, 1986–87. There are already problems this year. The right hon. Gentleman said that, although last spring there were claims that the rate support grant then proposed would mean rate increases of 15 to 20 per cent., rates had in fact been kept down. He boasted that that proved the success of the Government's restrictions, but rates have risen by only 5 per cent. or so because local authorities have had to cut their services. If they had been allowed to maintain services at their previous level, rates would indeed have risen by 15 to 20 per cent., and to provide that same level of services in the future would mean that the 5·2 per cent. increase proposed by the Secretary of State would in fact amount to a reduction of 0·05 per cent. in the money allowed for the provision of local government services.
The Secretary of State said that high rates contributed to high manufacturing and industrial costs, leading to a loss of employment. He said that rate increases were being kept to a minimum to ensure that hardship would not be caused to industry and commerce. If he genuinely means that, why does he not apply the same philosophy to the regional water authorities, which also levy rates? The Yorkshire water authority has imposed increases of 19 or 20 per cent., but rate-capping does not apply to that precept. If the Secretary of State is sincere in the belief that he must control high-spending authorities, he should apply the same rules to regional water authorities, which are creating the same problems for ratepayers as he claims Labour-controlled local authorities are creating in their areas. Incidentally, the chairman of the Yorkshire water authority has laid the blame for those increases above the rate of inflation fairly and squarely at the door of the Secretary of State. I hope that we shall have an explanation from the Government on that, as it seems very strange that there should be two sets of rules in the same game.
Mr. Tony Banks: It would also be interesting to hear an explanation from the Secretary of State as to why rate-capping does not apply, for example, to the Metropolitan

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police precept or to that levied by London Regional Transport since that area of authority was taken away from the GLC.
Mr. O'Brien: I am grateful to my hon. Friend for drawing attention to those other anomalies. It is clear that the Government wish to attack only Labour-controlled authorities providing the services required by the people in their areas. The cut in rate support grant has created further problems for local authorities seeking to provide the necessary services for the people whom they represent. Having served in local government for 30 years, and having witnessed the recent actions by the Government, I am glad that I am now out of that area so that I do not have to explain to people that education, recreation, planning and social services can no longer be provided adequately because of the cuts in rate support grant and the rate-capping measures introduced by the Secretary of State.
There are also problems in the joint financing system involving local authority social service departments and area health authorities. In Wakefield and Leeds — I represent people in both ctities—the joint financing so necessary to provide the services required by an aging population and to meet the needs of the mentally sick and the disabled have been seriously affected by the cuts and restrictions imposed by the Secretary of State, so that the people most in need are being denied those services as a result of Government action. I ask for some special consideration to be given to the jointly financed schemes.
Mr. Patrick Jenkin: In order to keep my speech short I did not talk about the disregards. However, I have made it clear that next year we will repeat the disregard for penalty for authorities' increased expenditure on schemes jointly financed with health authorities. The arrangements that apply this year will apply next year, too.
Mr. O'Brien: I am grateful for that intervention. A number of hon. Members are very concerned about jointly financed schemes. I hope that the problems facing social service departments which have jointly financed schemes will be given serious consideration—problems connected with the aging population and the care of the mentally sick and the mentally handicapped.
Other hon. Members have referred to the rating system, to the anomalies that exist in the system and to the problems inherent in it. I share the concern that has been expressed. The valuations are 12 years old. The Secretary of State has said that there is to be a review of the financing of local government. If rates are still to be levied on rateable values, I urge the right hon. Gentleman to consider updating the valuations on which rates are levied. The system is 10, 12 or 15 years out of date. When those whose rates have been assessed on those out-of-date levels appeal against assessment, they have to refer back to the value of the property 12 or 15 years ago. That is most confusing. I am sure that the Secretary of State could ease the problems by dealing with some of the anomalies in the system. I appeal to him carefully to consider doing so.
As there are anomalies, and as services are to be cut in many areas, and in my own area in particular, I ask the House not to accept the report. Some Conservative Members have, on behalf of their constituents and local authorities, described problems similar to those described
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by my hon. Friends. There is some unity about the problems facing local authorities. I hope that those hon. Gentlemen will join us in rejecting the report.
7.22 pm
Mr. Michael Lord: I am grateful for the opportunity to say a few words about the rate support grant settlement in general and its effect on Suffolk.
If the House stands for anything, it stands for justice and fairness. I am not entirely convinced that, in this settlement, Suffolk is given a fair deal. I support fairness. That is why I support rate-capping and welcome unreservedly the Secretary of State's hope that he may be able to abandon targets next year.
I understand only too well the almost impossible dilemma in which my right hon. Friend finds himself in bringing back under control the runaway expenditure of local authorities in toto. He has the difficult responsibility of controlling local authority expenditure as a whole while, if we are not careful, some hon. Members are tempted to concern themselves solely with their own local problems. I also understand how difficult it is to cut back the wildest spending authorities as quickly and harshly as would be appropriate without causing a degree of hardship and perhaps unrest that would be too high a price to pay.
My right hon. Friend makes no secret of the fact that this is a national problem. It is a problem that we all share. Indeed, some sensible local authorities may have to suffer to some extent as the highest spenders are brought under control. However, that is seen by many people — certainly in Suffolk—as rough justice. In their view, the Government are robbing Peter to pay Paul; and in the past, that has sometimes led the Government to reward profligacy and penalise prudence.
Suffolk county council has a history of managing its affairs carefully and sensibly, yet it now finds itself in a difficult position. In the current year the difference between its GREA and its target is £5·6 million. Next year — 1985–86 — the gap will widen to £12·4 million. In 1985–86 the council will try to use reserves to bridge the gap, but if the situation continues into 1986–87 that will be increasingly difficult to do. Burdens on services will increase and there will be excessive rate increases. For example, the growth in the number of old people in Suffolk far exceeds the national average, yet the number of residential places is below the national average, as is the number of home helps and the provision of meals on wheels, even though I am sure the social services departments are doing their best to manage their services with great care.
The Government may assess the financial needs of a local authority carefully and in detail, taking into consideration all the factors involved, in order to establish its GREA. They may then, by setting a target, deny it the necessary finance. They may do so not because of the behaviour of the authority concerned, but because of the behaviour of other authorities over which they have no control. That cannot be right. I was therefore delighted to hear of the Secretary of State's intention to end targets as soon as possible.
My right hon. Friend has my sympathy in dealing with an intractable problem. However, I return to the question of justice and fairness. The present system cannot be regarded as fair. If, when he replies to the debate, my hon. Friend the Under-Secretary of State is able to confirm my

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right hon. Friend's suggestion about abolishing targets next year, I am sure that the whole House will be delighted.
7.27 pm
Mr. Tony Banks: One day soon, I hope to find myself discussing in this House something other than local government business. Local government matters seem to be gradually taking over our entire proceedings. Indeed, the Government seem determined to turn this place into a mega town hall and all hon. Members into souped-up councillors—although the material on the Government Benches is not promising.
We discuss the rate support grant every year but, to an increasing extent, the Government are attempting to force the House into interfering with and attempting to control the day-to-day affairs of local government. Hon. Members on both sides have pointed out how arcane the system of local government finance has become. Few hon. Members fully understand it. It is clear that the Secretary of State is not among them. The Prime Minister does not understand it either. A few weeks ago, attempting to answer a question during Prime Minister's Question Time, the right hon. Lady became completely confused between GREAs and targets. I do not blame her for that, but I see her as the spectre behind her Ministers, pushing them into doing things about which they are unhappy. If Ministers are unhappy about what they are doing, they know what—in all honour and integrity—they should do about it. However, I doubt whether we shall see much of those qualities.
The subject has become confused and difficult to understand. That might explain why so few right hon. and hon. Members on either side are present. That has been true for all this important debate. Hon. Members are getting fed up to the teeth with being required to discuss and make decisions on matters that should be left to locally elected councillors. That is why hon. Members decide to take their pleasures elsewhere. We elect councillors to deal with these issues. Why do the Government want to interfere in the day-to-day running of town halls and county halls.
We have heard that the level of rate support grant for next year is to be nearly £12 billion. That sounds a lot of money, but the percentage of Government funding of local authority expenditure has decreased from 60 per cent. in 1978–79 to the 48·7 per cent. of next year. That represents a massive switch of tax burdens from the Government to local government. It is no great surprise that local authorities — Conservative and Labour-controlled — are beginning to rebel.
The grant-related expenditure that the rate support grant proposes for the Greater London council shows a need to spend GREA of £549 million — an increase of £32 million on the settlement for 1984–85. However, if we allow for London Regional Transport and the transport supplementary grant, it represents an increase of about 18 per cent. That leaves a substantial gap between the council's basic budget of £853 million and the £549 million "need to spend" assessment. We can therefore see the great problems that the GLC will face.
The Secretary of State has told us that GREAs have been altered. The GLC was surprised and pleased to learn that there was an increase of £27 million in its GREA for
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the housing revenue account. We need to know whether the GREA figure for the housing revenue account for last year contained the large error that we understand it to have contained. We have to explain the great differences in the figures. It does not surprise me that miscalculations are now rife in Marsham street, as civil servants struggle to understand the system — just like Members of Parliament.
I asked the Secretary of State why the GLC's target had increased so remarkably. Far be it from me to complain about that, but I need to know the Secretary of State's reasons. Last year, the GLC was accused of being one of the so-called overspenders but, even after allowing for the removal of London Transport, the increase in the GLC's target for next year is a 63 per cent. hike on last year's settlement. The GLC would like to know why there has been such an increase. I should have thought that many of the right hon. and hon. Members who should be sitting behind the Minister would be interested to know why there has been a 63 per cent. increase for what the Government say is one of the highest spending authorities in the country.
I believe that the increase merely shows that the figures are infinitely manipulable and that the Government can change them at whim. That merely makes the system even more uncertain. Moreover, the GLC's targets for last year were the very targets that were used to criticise that council's expenditure levels. Indeed, they were given, in part, as a reason for its abolition. The Government owe the House an explanation for these dramatic changes.
London's total rate support grant has been eroded steadily in real terms since 1979–80. Had the total been maintained at that level, London would have received about £3·3 billion more grant from 1981 to 1985–86. That estimated loss is based on the assumption that London local authorities will spend in line with their targets in 1985–86. If those targets are exceeded, the loss will be greater. When the Government start talking about the level of rate increases in London, they should remember that, since 1979–80, they have filched £3·3 billion from London ratepayers. That is yet another example of the massive switch of tax burdens from central to local government.
The Secretary of State said today that if all local authorities had shown equal responsibility in spending, there would be no need for these levels of targets. In his defence, I should add that he said that rate support grant had steadily decreased since 1979–80 and that the average level of rate increase has also decreased. However, he said that those are only averages. They cover up all of the big differences between local authorities in different parts of the country. The figures do not tell us about the level and quality of services that are now provided in different local authority areas.
It is easy and cheap for the Secretary of State to talk about over-spending local authorities. It becomes a matter of how the Government manipulate the figures, as I said in regard to the 63 per cent. increase in the GLC's target.
Overspend or underspend is what the Secretary of State decides it will be. They depend on the figures that he manipulates in Marsham street. It must occur to the Secretary of State in his more reflective moments that overspending also comes with local authorities concentrated in urban areas, where the problems are greatest—as we heard in yesterday's debate on infrastructure, investment and unemployment. The greatest concentration of problems is found in our great urban areas. It is no

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wonder that socially responsible Labour-controlled local authorities are attempting to protect their ratepayers from the impact of the Government's economic and social policies. The Government's manipulating the figures pushes them into so-called overspending, whereupon the Government systematically attack them, in alliance with their poodle press in Fleet street.
The Secretary of State said that local authorities can now plan their budgets for 1985–86. That is a joke. How can the GLC or any other responsible local authority plan its budget now for 1985–86? The first reason why local authorities cannot budget is rate-capping. We shall have a long and, I suspect, acrimonious debate on rate-capping in a few weeks time. When considering the timetable that the Secretary of State has set, the GLC consulted counsel. Mr. Roger Henderson, QC, advised the GLC that the Secretary of State's rate-capping timetable can be challenged on the grounds of irrationality and procedural impropriety. Mr. Henderson also said that the Secretary of State is acting with unreasonable haste to implement rate limits which are based on faulty arithmetic.
We know how faulty the arithmetic is. The Secretary of State has estimated that the GLC has about £71 million in reserves. According to the GLC's official estimates, given by professional officers to elected members, the GLC's reserves stand in the range of £2 million to £12 million, depending on the outcome of litigation. As we all know, the GLC is perforce in and out of the courts these days to try to defend itself against the attacks of central Government. No information is given by the Secretary of State about how he arrived at the calculation of the GLC reserve of £71 million. How can a responsible local authority plan its budget when it is clear that it is operating on completely different figures from those that the Secretary of State makes up as he goes along? Therefore, the GLC must use the courts to proceed against the Government on rate-capping.
Rate-capping, and the influence it has on trying to make a budget in line with the gratuitous advice of the Secretary of State, is compounded by what Mr. Justice MacNeill said in a judgment in the High Court on 11 January on the demand of the Secretary of State for Transport for at least £50 million more from the GLC than he was entitled to ask in support of London Regional Transport. Mr. Justice MacNeill said that the Secretary of State for Transport had acted
"unlawfully, irrationally and procedurally improperly".
In that case, costs were awarded against the Secretary of State for Transport. As my hon. Friend the Member for Copeland (Dr. Cunningham) said, despite the fact that the Secretary of State for Transport acted illegally, he will not be surcharged for what he did, because surcharging does not exist for incompetent central Government Ministers. It exists only to penalise democratically elected local authority members who try to defend their services. The difference in approach and in scale of values as between local government and central Government is deplorable.
Mr. Straw: Is my hon. Friend aware that the Public Accounts Committee of the House roundly condemned the present Minister with responsibility for consumer affairs, then a junior Minister in the Scottish Office, for selling off Hamilton college of education at a loss to the taxpayers of £5 million? If he had been a councillor, he would have
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been surcharged and discharged from office. Because he was a Minister, all that happened was that he was promoted.
Mr. Banks: It would appear that Government Ministers can act with total disregard of the laws that they or previous Parliaments have made. That is grossly unfair. Surely all hon. Members on both sides of the House must accept that standards are different for the conduct of central Government Ministers and of locally elected councillors. The dice is loaded heavily in favour of central Government. The Government come along like a bunch of bully boys and stamp all over town halls and county halls; they declare that their mandate is so much greater than that of democratic local councils that they can do what they want. I believe that hon. Members on the Government Benches are beginning to realise how unfair it is.
When the Secretary of State for Transport demanded that extra £50 million from the GLC, I do not believe that he was acting out of sheer incompetence. We know that he is more than capable of that, but in this case I think he was doing it deliberately to make it difficult for the GLC to keep to its budget. Of course, he has been found out and he will have to get his fingers out of the till.
All this makes it much more difficult for a responsible council like the GLC to proceed with its budget making for 1985–86. How can my council make a budget when there is so much uncertainty and so many legally dubious decisions by incompetent and vindictive Ministers? Labour-controlled local authorities and councils are discussing extensively what they can do. Law-breaking comes into it. The Secretary of State for the Environment, in regard to the Greater London development plan and the Secretary of State for Transport, in regard to the excessive demand from GLC for London Regional Transport, are not setting a good example for law-abiding councils because they have both been prepared to break the law.
The Government are gradually forcing local authorities into a position where they must choose between bad and vindictive laws or the services that they were elected to preserve. The Secretary of State for the Environment is criminalising democratically elected and responsible councillors. Sooner or later, someone will have to give ground. I am convinced that it will not be the majority of Labour-controlled local authorities. I am reminded of the words of George Lansbury in 1921. He was not a head banger. He would not be described as an ultra-Left member of today's Labour party or, indeed, of the Labour party of the 1920s. He held firm Christian beliefs. He said that wicked laws ought to be broken. When Poplar council was resisting unjust laws he also wrote:
"The question is not whether what we are doing is legal or illegal but whether it is right or wrong."
That question is as relevant in 1985 as it was in 1921.
Labour councils would be well advised to decide whether they should set rates at all. As an option, they should now think about refusing to pay debt charges of any sort. When Third world countries got themselves into financial problems over debts owed to the industrialised world they decided that they would not pay and, of course, rescue operations were mounted. Some Labour local authorities might decide to emulate that example during 1985–86. Local authorities might also decide to defy the Secretary of State and set illegal budgets.
These are real options. I would support and advocate a combination of such measures. I believe, like George

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Lansbury, that wicked laws ought to be broken. If laws are to be party political and if this place is to be used to force through bad administrative law which is clearly based on party political spite, it will become a duty rather than a crime for democratically elected Labour local authorities to defy the Government. From that defiance, we will be able to mobilise the sort of support that is needed to throw the Government out of office.
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Dr. Michael Clark: I might talk about Essex county council or Rochford district council, because both have suffered as a result of the rate support grant. There are 15 other Members of Parliament who could speak for Essex county council so I shall confine my remarks to Rochford district council.
Rochford is a well-run council which has never before taken issue with the Department of the Environment on rate support grant calculations, even though those calculations leave a lot to be desired. Rochford has supported the Government in all their objectives to reduce public expenditure. It was the first council to consider privatising refuse collection. Although in the end it did not go ahead with it, its refuse collection costs compare favourably with neighbouring Southend, which has privatised its refuse collection service. In recent years Rochford has cut its staff by 15 per cent., even though it was tight on staff compared with other councils of a similar size. It sold off surplus buildings and centralised offices. In its policy on council house sales it was well in advance of Government legislation.
As a result of these prudent policies Rochford has, over the last nine years, kept its rate increase every year to single figures. Generally, rate increases have been about 6 or 7 per cent., but in 1979, the year in which the Government were returned to office and inflation was 28 per cent., Rochford district council reduced its rate by 7 per cent.
During the past nine years, Rochford's rates have risen by 52 per cent. while the retail price index has risen by 170 per cent. That has been achieved by effective use of balances and capital receipts and by identifying long-term savings well in advance so that they could be realised and taken into account. Auditors' reports on Rochford show that, in almost every area, its spending is lower than the spending of other councils in the same family of district councils.
At a council meeting before Christmas and before the RSG settlements were known, the council proposed to increase its rates, for two reasons. First, it proposed to increase them by 5 per cent. to allow for inflation and, secondly, by 7 per cent. to allow for the expected reduction in RSG. That 7 per cent. was to take into account a transfer from central taxation to local taxation which would have to be borne by the people of Rochford. The plan to increase rates by a total of 12 per cent. would have meant that it would be the first time in the history of Rochford district council that rates had been increased in double figures.
When the RSG settlement was known, the grant was cut by 19 per cent. more than the council officers and councillors had expected. There had been a major cut of £263,000. That might not appear to be a great deal of money compared with the money referred to by the hon.
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Member for Newham, North-West (Mr. Banks), but it is a great deal of money for a small council like Rochford. The cut meant that the rate had to be increased by 24 per cent., and we must bear in mind that the highest previous increase during the past nine years had been 9 per cent.
If we look back, the block grant from central Government to Rochford district council in the four years to 1984 actually paid for 44 per cent. of the council's revenue expenditure; last year, it paid for 36 per cent., and this year it will pay for 26 per cent. There has been a major cut in the financing for Rochford from central Government.
The 24 per cent. rate increase that is now a possibility in Rochford—although we hope that it can somehow be avoided—will come about despite Rochford spending in line with Government targets and no grant penalty being incurred. Rochford will have to increase its rates because it has followed and adhered to all the guidelines set by the Government.
One has to ask what the reasons are for that. We are told that one reason is that the method of grant distribution has been amended and that Rochford's GREA has been reduced by 3 per cent. in 1985–86 even though nationally GREA has been increased by 6 per cent. We all know that GREA is calculated on a variety of factors—the number of people in an area, the physical features, the cost of providing services, social and environmental problems and recreational requirements. Of those factors, the number of people in Rochford has increased, the physical features have not changed, the cost of providing services has risen in line with the rate of inflation, the social and environmental problems have got no less, and recreational requirements are ever increasing as people expect more to fill their leisure time.
Why is Rochford facing such a cut? I do not understand it, Rochford district council and its officers do not understand it, and I have no doubt that the people of Rochford do not understand it.
The second reason we are given for the cut is that there is a change in the calculation. I must tell my right hon. Friend that there is no change in the income of the Rochford ratepayers, nor in the services that they expect. I want to draw his attention to the shire areas, counties and districts that will receive a lower share of the grant. That appears to be inconsistent with my right hon. Friend's claim that the shire areas will be treated better.
When we asked the Department of the Environment to give reasons for the cut in Rochford's allocation, it said:
"The main reason for the loss of GRE for recreation is a major change in the methodology"—
a lovely word—
"designed to take account of the differential use of recreational facilities by different groups in the population, the demands placed on city centres and resorts by commuters and visitors."
Rochford prides itself on its recreational facilities, and it has a right to the same recreational facilities as any other district council.
I wonder whether the Department has looked at its map and realised that Rochford is adjacent to Southend—only half a dozen miles away. Many of the summer visitors to Southend use Rochford's recreational facilities, as do Southend's residents.
I want to ask my right hon. Friend a few questions. Is he aware that the Association of District Councils estimates that, as a result of the RSG calculation, 231

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district councils will have to increase their rates by more than 10 per cent., 67 by more than 20 per cent.—that includes Rochford—and 18 by more than 30 per cent.
Does my right hon. Friend accept that a 24 per cent. increase in the district rate is acceptable and that an authority making such an increase is not necessarily being irresponsible? What advice does he give to a local authority that has met every one of the Government's requirements, yet finds itself in the same position as those councils that have ignored them? I echo the comments of my hon. Friends the Members for Davyhulme (Mr. Churchill) and for Sevenoaks (Mr. Wolfson) on that point.
My hon. Friend the Member for Devizes (Mr. Morrison) asked what guarantees there were for 1986–87. If Rochford exhausts its balances or reduces its services, what assurances are there that next year a further adjustment in the methodology will not occur that will once again disadvantage Rochford? I hope that my right hon. Friend will accept that the rate support grant calculations are so complex that few people understand them. We had budgets that were replaced with GRE, we have GRE that is qualified by targets, and the Government choose the figure, the title, the word or the set of circumstances that best suit their purpose.
District councils do not know where they are. They cannot plan for the future. They are in the frustrated state of not knowing how to establish or to begin a three-year, let alone a five-year, plan. I believe that as a result of these complications, people will begin to reject local democracy because they reject that which they they cannot understand. Local democracy is now in the first stage of being rejected. To a large extent, it is being ignored, as the hon. Member for Newham, North-West pointed out. That is shown by the low turnout at local elections.
I fear that it will not be long before local democracy moves from being ignored to being rejected, and that would be a dangerous precedent for democracy both for the country and for this place. I ask my right hon. Friend to attempt to simplify the whole of the structure that finances local government.
I regret that it is unlikely that I shall be supporting the Government tonight. If the Minister's reply persuades me, I shall be happy to support them, but, as things stand, it is unlikely that I shall support the Government.
I ask the Secretary of State, in the short term, to review the system and its injustices, and in particular to review Rochford's case. In the medium term, will he abolish the current incomprehensible rate support grant calculations and replace them with a simpler system that facilitates long-term planning, demonstrates fairness and, above all, encourages understanding of and support for local democracy?
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Mr. Simon Hughes: It is notable that, one after another, year in and year out, Government Back Benchers, make the same claims and ask their Government to try to do something about local government finance and to deliver that which clearly has not been delivered in the past.
My hon. Friend the Member for Isle of Wight (Mr. Ross) took his place in the Chamber a few minutes ago. He has been a Member for 11 years and within seconds of arriving in the Chamber tonight he said, "We hear the
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same speeches every year." That is evidence that it is about time that the Government did something. Promises, words and hopes for the future are not enough.
Exactly 51 weeks ago today the House was asked to consider the Government's proposals for the current financial year's rate support grant settlement. The Government were under enormous pressure, particularly from their own Back Benchers. They were under even more pressure than they are today.
The Government were repeatedly told that low-spending authorities were not able to spend what they needed to spend without penalties because their targets were below the Government's declared expenditure. On that occasion, the Secretary of State laid great store by two matters. The first was the efficiency and accountability of local government. I have no doubt that the phrase "the magic of the market place" was in his mind, although not uttered. In that context he praised the Audit Commission's work.
The second was the effect of the Rates Act, implemented late last year. The Secretary of Stare did not concede that the system was ramshackle and needed to be replaced. He simply said that he would try to reward the low spenders.
Those of us who live in high-spending authority areas—because they have high need levels—thought that it was a simple, political buying-off operation. We thought that we were witnessing a crude political device to buy support in the Lobby. The Secretary of State succeeded to some extent by persuading some of his colleagues not to vote against him, but to abstain, so he reduced the number who voted against the order.
Unfortunately, logic and the Chancellor of the Exchequer have made it impossible for the Secretary of State to fulfil his promise. Public expenditure levels have been set and the Chancellor has said that in real terms this year local government expenditure will be cut by 3 per cent. We protest about that.
If the Secretary of State was to do what he promised and give low spenders the benefit of low spending for this year, he had to fiddle with the arbitrary targets and arbitrary penalties for the high-spending authorities with the biggest needs. Unfortunately, he failed on both counts. He is still being criticised by his back benchers who say that the system is still inadequate and has not met their needs. Essex is a good example of a Tory-controlled shire county. The urban areas are equally unhappy, not least because they have been rate-capped.
The hon. Member for Davyhulme (Mr. Churchill), who represents the area covered by the Tory-controlled Trafford authority in Greater Manchester, makes it clear that the system has not worked. That is because in theory the system is fundamentally flawed and in practice hopeless—and it is becoming worse.
Since last January, 51 weeks ago, there has been a 3 per cent. cut in central Government's contribution to local government expenditure. The much-lauded Audit Commission produced a stinging report in August which said that the system was responsible for adding £1,200 million to the rates bill. The Government were so sure of their ground that the Secretary of State's response was that the Government would not examine the report in detail. The Secretary of State praised the Commission last January and now hides from its conclusions.
Under the Rates Act, for the 18 rate-capped authorities—16 Labour-controlled, one hung and one, Portsmouth,

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Conservative-controlled—the squeeze comes from both ends. The Government's contribution to them is being reduced but they are told that they cannot raise the money by putting up rates because that is illegal and such rates would be invalid. They cannot meet their expenditure requirements.
Many obligations imposed upon such authorities are statutory. The Government do not now even believe in accountability. In the context of education, they say that people should be allowed to vote with their feet and take their children out of school A into school B. They say that that is the principle of the market economy. The Government do not apply that principle to local government. They do not say that the results of local elections should be determinative. They do not think that locally elected councillors, many of whom are members of the Conservative party, should be able to make ultimate decisions.
The only ray of light is that at the Tory party conference last year we were assured again — 10 years on—that there would be consultation about reform of local government finance. We welcome that, provided it produces results.
Consultations were referred to by the Minister for Local Government in Committee recently. I hope that the consultations that he offered the hon. Member for Copeland (Dr. Cunningham) and the Labour party will be offered to all other party spokesmen in the House.
Our view does not parallel that of the Labour party. We do not believe that the problems of local government will be solved by increasingly funding local government from central Government through block grants. We believe that local government should be made more accountable. That means reducing the money that comes from central Government and raising more money locally. As my hon. Friend the Member for Woolwich (Mr. Cartwright) said, that means local income tax in addition to rates.
We have to have reform to make local government more accountable. I hope that real progress will be made before next year and that we shall not have to listen to ever more plaintive cries from more and more hon. Members.
The only way open to people outside the House who want to protest is to vote against the Government at every opportunity. They will have that opportunity this May in the shire county elections and next May in the London borough elections. I hope that in their thousands they will vote against this ridiculous imposition of central Government policy on their local councils by their Conservative Government and reject them and all their works.
The Guardian yesterday made it clear that the local authority settlement that we are being asked to approve tonight threatens to cause big rate increases in most of the Tory counties only a month before they go to the polls in the four-yearly county elections. It says that, unless the councils are able to raise their balances, they will be forced to raise rates significantly higher than inflation, even if they keep fairly constant in real terms.
The effect will be even more severe in the districts, as the hon. Member for Rochford (Dr. Clark) said. A whole list of counties will be affected — Berkshire, East Sussex, Essex, Gloucestershire, Hampshire, Hertfordshire, Surrey, Warwickshire, West Sussex and Wiltshire. I quoted the example of Warwickshire last year
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when it said that it had done everything possible but still could not meet the targets. That is still its position. It also applies to other Labour, Tory and Liberal-controlled county councils.
We have heard that, except for Bedfordshire, all the shire counties have targets below GREA. Avon, a Labour-controlled council, has reached the stage at which, because its GREA is £6 million higher than its target, it would incur a penalty of £18 million if it spent up to its GREA. I was told that the people of that area are saying that they must empty the cocoa tins and use all possible reserves to avoid cutting services. Allowing even for that, because of Government policy, next year it will need a 19p rate increase if the system is not altered.
My hon. Friend the Member for Berwick-upon-Tweed (Mr. Beith) has received a letter from the chief executive of Northumberland county council, sent with the approval of the political leaders of that area. In that Labour-controlled council—just: it has a majority of one—the settlement continues to be poor; it follows a series of poor settlements for that area. The letter to my hon. Friend points out that the Government make insufficient allowance for inflation, continue their policy of transferring the burden from the taxpayer to the ratepayer and impose policies the implications of which are that if the council was able to contain its spending to last year's level, allowing for the Government's assessment of inflation, the authority would receive £5 million less in grant in the coming year than it received last year, which would represent a 10 per cent. reduction. In fact, it would be much worse because of pay settlements, which would mean the authority losing £7·5 million more.
There is insufficient assessment of the needs of such counties, which have huge rural areas. In Northumberland's case, it has been greatly depopulated, particularly for educational assessment purposes. It is clear that the Government's calculations do not work. Northumberland has had to reduce highways manual staff from 580 10 years ago to 307 and has had to reduce the number of teachers from more than 3,000 to 2,500. It cannot do more.
Northumberland, looking at the whole situation from a different perspective from, say, the Isle of Wight, says that, while it might do well out of a particular alteration —in Northumberland's case, the changes in rules about transport grant benefit the authority, whereas the Isle of Wight does badly out of that alteration—nobody wants a system under which proper assessments cannot be made because one decision goes in their favour and the next goes against them. They do not know where they are.
Northumberland serves also to illustrate an important constitutional point. It says that the effect of Government policies is driving out the people who were in control of the area — the same applies in other areas — the moderates in the Labour party, to be replaced by extremists. In other words, the Government are forcing people to take extreme positions by making extreme proposals, and that cannot be good for the future of local government.
The Isle of Wight, on all definitions, has been a low-spending authority. It has been Liberal-controlled for a long time and, I hope, will remain so for even longer. It cannot begin to do what the Government expect of it. The Isle of Wight has probably the highest percentage of population over pensionable age, plus 17 per cent. unemployment. It is told, nevertheless, that it cannot even

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have the money that is needed to carry out a fundamental service such as providing facilities for the disposal of waste. All the holes in the Isle of Wight where waste could be deposited have been filled, and the authority is not being given the money to put the waste elsewhere. What is it supposed to do, remembering that the disposal of waste is a statutory duty?
Further, the Isle of Wight wants to deal with its unemployment problem, but instead of being allowed the money to buy land to develop for industrial purposes, it is not even given central Government assistance by way of area status. The Isle of Wight is in a hopeless position, all because of the Government's policies. There should be no friends of the Government in that island.
I could go on giving examples. Consider Bedfordshire, which is having to reduce the number of old people's homes and even police overtime; this Government of law and order are forcing their colleagues in Bedfordshire to cut the services of law and order.
In Cheshire, a hung council, for the first time in 93 years the Tories cannot produce a budget. They say that they could make savings of £12 million to meet the Government's requirements, yet they are not producing a budget. Thus, not just Labour and Liberal authorities, but the Government's supporters too, are in difficulties. In other words, Cheshire's example shows that local Tories cannot cope and take the strain.
Cambridgeshire is likely to incur a penalty of £19 million. Things got so bad in Somerset that the Tory education sub-committee proposed making a charge on youngsters for the water they consumed while eating packed lunches. The full committee rejected that idea, but the council did decide that the local authority could not afford to buy any fiction for local libraries. Perhaps one can say that the facts are so appalling that to add fiction would be a distraction.
The shire counties are in a desperate position, but the urban areas are in an even worse state. I made the point earlier that the distribution of block grant means that London has had a reduction of 1 per cent., even though GREAs have been increased, that many London authorities will not be able to meet their targets and that the penalties for overspending are being increased enormously.
In Southwark, the method of calculating GREA for the social services is inadequate. It does not reflect changes in the needs of the population. We have one of the highest calls for social services in the country and, of the 12 inner London boroughs, we are first in the list with the largest number of blind, deaf, and handicapped people; we are fourth highest in the number of social workers; we are top of the league in the number of elderly; third in the number of young people who are handicapped and in care; fourth in the number of mentally handicapped; and second in the number of children boarded out in care.
Only about two thirds of those factors are recognised by the Government. The GREA data for social services are out of date, too few factors are taken into account and simple population figures dominate the assessment of social service needs, leaving out the social isolation of people—for example, the elderly are not taken into account—with the population at risk not being sufficiently considered. I understand that next year the Government are to set up a working group of officers of
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local authorities and the Department of the Environment. I hope that something will be done to meet the needs of the social services.
The Government promised to do something last year and they have failed to deliver. They have not rewarded prudence—Conservative Members are telling them that—and they have not made an objectively accurate assessment of profligacy. They have misjudged. Some councils, however hard they try, will not be able to preserve essential services within the financial constraints, the straitjacket, that the Government are imposing on them. The Government will have to concede that people may be forced into breaking the law. Unless there is a realistic concession that adapts policies to people's needs—not formulae from Marsham street—the Government will be running themselves and local government into disrepute.
Mr. Stephen Ross: Is my hon. Friend aware of another problem that is looming up fast? I refer to the White Paper on buses, remembering that we have been promised a Bill a fortnight from now. Evidence from Kent county council is being taken tonight by the Select Committee on Transport. It is reckoned that what is proposed in that Bill will cost that authority an additional £2·5 million, which will immediately put it into penalty, in that it will not be able to meet that expenditure without going into penalty.
Mr. Hughes: My hon. Friend reiterates the point that we are making constantly. It is that the Government must say, "Enough of the old system." If we in this House insist on imposing duties on local government—for example, relating to buses—we must at least compensate local government. Authorities cannot be expected to provide local services without the necessary resources. Central Government hold the purse strings. If local authorities are not permitted to raise money elsewhere, they cannot be expected to find the cash out of the air. Conservative Members are fond of telling people that money does not grow on trees.
I urge the Government to think again. I warn them that, if they do not, the electors will go on voting even more consistently against them at local elections and will increasingly withhold their support, even in the traditionally Tory shire counties, which are becoming less and less traditionally Tory. Until the Government return to what we were led to believe were traditional Conservative views, and lay off local government—returning accountability to local government—they will find resistance in Parliament to this and all similar measures.
8.20 pm
Mr. Richard Holt: I tried to make an intervention this afternoon during the speech of my right hon. Friend the Secretary of State for the Environment. My right hon. Friend did not allow me to intervene, so I shall make a speech instead.
Many of us have been concerned recently about surrogate motherhood. The issue has not crept up suddenly on the House, but it is with us. The Government have formulated no policies or plans to deal with it. The same can be said of local government. Local government issues are creeping up on central Government and they are not making proper plans to ensure that the type of scaremongering that is indulged in by the hon. Member for

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Newham, North-West (Mr. Banks) is treated in the way that it deserves. I notice that the hon. Gentleman has had the good grace to make his speech and leave the Chamber. He seems always to fail to listen to those who speak after him. I always thought that it was a tradition of the House to remain in one's place to listen to succeeding speeches. Of course, the hon. Gentleman is not a traditionalist. Indeed, he seeks to abolish this establishment altogether—[Interruption.] If any Opposition Member wants to intervene, I shall be glad to let him do so.
I was first elected to local government 22 years ago, and much of what I have listened to so far has caused me a sense of déjà vu. However, I must compliment my right hon. Friend the Member for Guildford (Mr. Howell), who made an excellent contribution, as did several of my hon. Friends subsequently. I have been disappointed by the contributions of Opposition Members, especially by that of the hon. Member for Southwark and Bermondsey (Mr. Hughes), who spoke on behalf of the Liberal party. The hon. Gentleman talked about local income tax as though it were a wonderful panacea and a workable solution. That must be a broad-brush strategy, and I invite the Liberal party to address itself to the attendant detail.
The Conservative party has been giving local income tax considerable thought for a long time and it is clear that there are many questions to be asked. For example, who will pay the local tax? Will it be paid by the unemployed man or old lady? Will it be received by a head office or at the place where we happen to live or in which we work? Where will a travelling seaman pay his local income tax? If local income tax is the best policy that the Liberal party has to offer for reforming our rates—it is the only one that it has produced this evening—it is clear that it has nothing to offer that will be meaningful in future.
Mr. Simon Hughes: The hon. Gentleman may not know that for many years the Liberal party has been putting forward detailed proposals for local income tax. I assure him that we are ensuring that our proposals are brought up to date and made even better in time for the next general election. The hon. Gentleman will be able to pass judgment upon them when they are placed before the electorate.
Mr. Holt: I am grateful to the hon. Gentleman, but I have not been much encouraged by his intervention. It was a bit of flannel to cover up the fact that the Liberal party has been rumbled.
I think that most hon. Members will agree that GRE is a lottery. Several of my colleagues have already drawn attention to the way in which it is formulated. I doubt whether many members of the general public have delved into the White Paper for the purpose of bringing out some of the statistics with which local government is expected to grapple and to understand. I was a councillor for 22 years, and I never understood exactly how local government was financed.
Mr. George Park: Huh!
Mr. Holt: I doubt whether many Members of this place including the hon. Member for Coventry, North-East (Mr. Park), ever understood how it was done.
Mr. Park: Perhaps the hon. Gentleman does not know
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that I was the chairman of a local government finance committee for many years. I thought that I understood how local government was financed. That is why I said, "Huh!"
Mr. Holt: The hon. Gentleman may think that he understood it. As he was a Labour chairman of a finance committee, that suggests to me that he did not. No Labour chairman understands financing fully.
I shall refer to the details under which we are supposed to work. This is what prompted me to try to intervene during the speech of my right hon. Friend the Secretary of State. As I have said, he refused to allow me to do so. I think that many members of the general public would be thrown into a sense of wonderment if they knew the details with which councillors and hon. Members have to grapple when dealing with GRE.
I do not know—I am willing to allow my right hon. Friend the Minister to intervene to explain this to me—whether the Treasury sets a global figure for all time and whether everyone within the Department of the Environment has to work within that constraining figure. Alternatively, is someone confronted with all the statistics and indices which are contained in the White Paper and required to work with them carefully and diligently in coming to a conclusion? There is every chance that the person who does that will find that he has overshot the Treasury target by several thousand millions of pounds.
The hon. Member for Southwark and Bermondsey referred to the figures in the White Paper and said that there were too few of a fine-tuning nature. An example of detail is to be found on page 66 where, under the heading,
"Children aged 5–17—factor for residential care",
We are told that
"(X6) is calculated as the number of children aged 5–17 in the area of the authority, multiplied by the sum of the factors below:

(i) a constant of-0·0033014;

(ii) Indicator X4 as defined above, multiplied by 0·000028512;

(iii) Indicator X5 as defined above, multiplied by -0·000016818;

(iv) the proportion of children aged 5–17 in households that contain a lone-parent family as estimated by the Secretary of State on the basis of the 1981 Census, multiplied by 0·04786."

Mr. John Wilkinson: Is that why my local ratepayers are facing a rate increase of up to 42 per cent. this year?
Mr. Holt: I am not qualified to answer my hon. Friend's question. However, if those who are setting the rate within my hon. Friend's constituency even understand the formulae, they are doing extremely well. That is only one of the marvellous elements which, when combined, produce GRE at the end of the day.
We are told at the beginning of annex K that GREs have been calculated by means of
"a formula which is a development of that used for"
previous years. However, the marginal indicators are minus 0·000 something. What happens if the sum total overshoots or undershoots the Treasury target? Does someone have to revise the noughts, the pluses, the minuses and the indices so that local government can understand exactly what is happening? It would not be too bad if these nonsensical figures were themselves understood to be of relevance in assessing rates in a local area. They do not take sufficient notice of whether an area is in the north or the south.

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Another interesting section is to be found on page 55. B12 is followed by the heading
"Weather adjustment factor for road maintenance".
The first subsection states:
"the annual average number of days of snow-lying during 1979/80 to 1981/82 as estimated by the Secretary of State for Transport, multiplied by 7·10522."
That is followed by
"the annual average number of days of frost during 1979–80 to 1981–82 as estimated by the Secretary of State for Transport, multiplied by 0·77115."
That is the road/weather adjustment factor for maintenance purposes that is supplied by the GRE assessors for local government departments.
Mr. Terry Dicks: Does my hon. Friend agree that the scheme or system was invented by idiots and applied by fools for the benefit of no one in particular?
Mr. Holt: I suggest that I am not qualified to answer my hon. Friend's question. That is an issue on which everyone should make up his own mind. A factor in which we are all interested is unemployment. C9, which is headed "Total unemployment", states:
"The number of persons who were in receipt of unemployment benefit at May 1984 as estimated by the Secretary of State on the basis of information supplied to him by the Secretary of State for Employment."
There is no factorising there. No account is taken of whether unemployment is long-term, short-term, medium-term or permanent. That is one more example of the calculative methods by which GRE is put together.
I do not feel sorry for my colleagues on the Government Front Bench, for they are big enough to look after themselves. I am not sorry for Opposition Members, because I do not have much time for the majority of them in any event. I feel sorry for the civil servants. They must work with and understand these methods. I do not know how they cope with the mass of figures which no one else understands.
Mr. Simon Hughes: Does the hon. Gentleman accept that if this system has become the law of the land, one should not have any sympathy with the civil servants? They obviously are the power in the land, because they have in their captivity all those who do not understand the system. They will not let those people be free, so they must struggle out. The sympathy of the good Conservative Members behind the hon. Gentleman for the people who may well be the GRE assessors is probably a little out of place. We should have more sympathy for the rest of the people, who are their prisoners for a long time.
Mr. Deputy Speaker (Mr. Ernest Armstrong): Order. I remind the House that Mr. Speaker appealed for brevity. Interventions make speeches even longer. A number of hon. Members are still waiting to catch my eye.
Mr. Holt: I accept your stricture, Mr. Deputy Speaker.
I come to the real reason why I wished to intervene in this debate. We have had all the fine tuning and figures. This morning I recevied a missive from Cleveland county council. There are six Members of Parliament from Cleveland, five of them Socialists. Not one of the five Socialists has been in the Chamber at any time during the debate. Perhaps that reflects the fact that the Tory party is to take over in Cleveland shortly and the Labour party has already washed its hands of it.
That is possibly why I received that missive, which asked me whether I would draw to the attention of the
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Secretary of State the fact that Cleveland was upset, not by the GREA machinations, but by the fact tha: between last year and this year, according to the civil servants who do not make the mistakes to which the hon. Member for Southwark and Bermondsey referred, the county of Cleveland has shrunk. It may well be that the population has moved, but it takes some believing to accept that a geographical land mass change is sufficient reason to justify an alteration in GREA.
The letter from the chief executive of Cleveland county council stated:
"The error has been pointed out to the Department of the Environment. The Department accept that the area used is wrong".
Mr. Wilkinson: Coastal erosion.
Mr. Holt: There is a little, but not that much. The Department is using a different ordnance survey from the one used last year. The result is that £221,000 has been wiped off from Cleveland's GREA. The Cleveland council is a profligate Labour-controlled authority, and I have little brief for that body in that respect. The council is, however, entitled at least to the honest effects of the rules as long as those rules exist.
My right hon. Friend the Secretary of State is to move the GREA and the grants, but he is moving the goal posts by changing the land mass area of Cleveland during the 12 months. Worse still, having admitted the error, the Department is not prepared to correct it until some time in the future. Because of a simple error by the Department of the Environment, every ratepayer in Cleveland will have to pay extra next year. I hope that, if nothing else comes from the debate today, my right hon. Friend will take on board the need for something which is so complex and misunderstood as the current system to be urgently reviewed. I shall vote with the Government, but I shall do so out of loyalty and not conviction. Next time, I might change my mind.
8.33 pm
Mr. Stan Thorne: A number of hon. Members have said that they served their apprenticeship in local government, and I am no exception. During the 1960s and early 1970s, there was some concern about the services that local authorities were providing. Looking at the services provided by local authorities attempting to meet social needs—whether in social services, housing or education—one must feel that councillors taking on the responsibility of local government do so with a definite commitment. As the hon. Member for Langbaurgh (Mr. Holt) attempted to suggest, councillors may have had an education that is not adequate to equip them to deal with the responsibility of local government in terms of finance and so on, and that is understandable. The Labour and Conservative parties have failed to give the type of training and skills to our local councillors that should have been provided. Generally, councillors attempt to meet their responsibilities and commitments. They do so not lightly, but in their determination to oppose cuts in services that are not in accordance with their views on what local authorities should be providing.
The Government are changing the word "needs" to "targets". Those targets are to be determined by central Government, thereby reducing local authorities to mere instruments of Government policy. It is no wonder that the Government see elections in Greater London as

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superfluous. Local government is a major aspect of our form of democracy. I use the word "democracy" with some trepidation, because it is almost non-existent in Britain today.
The rate support grant measures, far from protecting ratepayers, will mean cuts in jobs and services. Certain jargon appears to be relevant these days when debating expenditure by local government. Reference is made to low and high-spending authorities. It is fairly clear, especially when listening to Conservative Members, that low-spending authorities are apparently responsible bodies according to the Government's Victorian values. The Secretary of State or other Ministers have given no specific examples of what irresponsible spending is. Is it irresponsible to provide bus passes for the elderly, old people's homes, sheltered accommodation, community centres for young people, meals on wheels, and nursery facilities and to adapt property for disabled people in need? We in Lancashire seek to meet those needs as far as we are able, given the resources available to us.
The rate support grant in Lancashire will be £24 million less than if the current year's percentage had been maintained. That is equivalent to a precept of 17p in the pound. Grant penalties could ensue to the county council if it spends up to the Government's GRE formula, as my hon. Friend the Member for Burnley (Mr. Pike) said. The penalties would have to be met from the rates. Some local authorities may find it acceptable to reduce services and to create further unemployment, but they have a responsibility to defend the interests of their local residents. The statutory political and moral obligations of local authorities are held by many local Labour councillors as serious responsibilities to uphold, and rightly so. To protect the elderly, the sick, the young and the disabled is the responsibility of local authorities. Many of them will not accept the Government's clear dictates directed towards ignoring those responsibilities. In essence, local authorities are asked to collect more in rates and to provide fewer services.
Yesterday we debated unemployment. Today we do not hear from the Government how they intend to reduce unemployment; we hear the direct opposite. An increase in unemployment of between 70,000 and 80,000 will be the product of the Government's rate support grant proposals. The Government have been trying to get across the idea that they care about unemployment, but this measure proves beyond doubt that unemployment is an instrument of economic control for the Government to which they are fully committed. The people of Britain may appear to be slow to grasp that fundamental point, but I am convinced that unemployment will yet be the basis of the Government's ultimate downfall.
8.40 pm
Mr. Warren Hawksley: I do not wish to follow the line of the hon. Member for Preston (Mr. Thorne); I wish to be unashamedly parochial. Most speakers have been parochial today and that is right on an occasion such as this. I also hope to be brief, but as I served on a county council for 12 years, I think that I can offer some explanation of why Shropshire county council feels bitter about the way that it has been treated under the orders that we are discussing.
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I served for four years as chairman of Shropshire county council's general purposes sub-committee. During that period it was a responsible authority. During the period of the previous Labour Government when the IMF had to come in and bail them out and we saw even greater public expenditure cuts than we are seeing today, Shropshire county council, then a Conservative-controlled authority, responded to the Government's demands and cut its expenditure in line with Government requests. Ever since, Shropshire county council has responded to the needs and requests of Government, yet today it finds itself with problems. It is unfortunate that by these orders we should again appear to be hurting those authorities which have shown prudence in recent years. It is paying a heavy price for the responsibility that it has shown.
Irresponsible authorities which have occasionally spent money as if it were going out of fashion even today can possibly find room for further cuts, but responsible authorities do not have that option. By using the year that the Government use as the base for their calculations, they are creating problems for those authorities which were responsible when it was not fashionable to be so. The Government should not penalise the authorities which were good boys in those days.
The Government are right to tackle overall local government expenditure. They should not increase the total amount of local government expenditure; they should consider carefully the way in which they allocate the money that they have available.
My arguments on the rate support grant order will not be about the total amount of money available, as Members on both sides have argued. My arguments will not lead me to vote against the Government or abstain, like some of my hon. Friends. That is not because I think of the orders as great support for local government but because the Department of the Environment and the Government generally have supported Shropshire and Telford in other ways. They have supported the new town of Telford, given us a new motorway, a new hospital, regional aid and an enterprise zone, but with a 22 per cent. unemployment rate, the rate support grant should also be used to help councils in the area. It is not enough to suggest that all the other aid can, by itself, respond to our needs.
Shropshire is the fourth hardest hit of the shire counties. Its social services are running at 75 per cent. of the national norm. That has been the case for some years. We do not complain about that; we are happy to run them more cheaply than some other areas. It shows that we have tried to run local government as cheaply as we can.
Last year, as has been mentioned, we were given a pledge by the Secretary of State in the RSG debate. It is right that the House should hear the wording in which it was given. He said:
"I would expect in 1985–86 and thereafter to be able to set targets which take greater account of GREs and thus recognise the efforts which low-spending authorities have made."—[Official Report, 23 January 1984; Vol. 52, c. 642.]
What has happened in Shropshire? Last year, the gap between GREA and target was 5·4 per cent. This year it is 8·9 per cent. The move has been in the wrong direction. Despite the 4·5 per cent. spoken of by the Secretary of State when he started the debate, the anomalies of the responsible low-spending authorities have not been tackled this year. I hope that when my right hon. Friend replies he will tackle the problems that will arise. Although I shall support the Government tonight, the

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problems will be even greater next year if we do not have a stronger and clearer commitment than the one we had last year, so that there can be no getting out of what last year we thought was a commitment. Shropshire based its budgeting on the assumption that there would be action.
Mr. Barry Porter: I hope that my hon. Friend realises that his speech is one that I should have made if I were going to be called. If for Shropshire one reads Wirral district council, I should have made exactly the same speech. Does he accept that the only way that we will solve this ridiculous problem, whether it be in Shropshire, Cleveland or Wirral, is by a fundamental review of local government finance? If we have to go through this procedure time and time again, the Government will have to accept that those of us who are loyal to their macro-economic policy will lose patience.
Mr. Hawksley: I agree with my hon. Friend's comments, but I do not think that that is relevant to the debate today. As the Inland Revenue computer centre is in my constituency, I should encourage the idea of moving to local income tax to replace the rates. That has been advocated by other hon. Members.
About nine months ago, Shropshire county council expressed anxiety at the lack of capital for educational work. I took a delegation to my right hon. Friend the Secretary of State for Education and Science. As a result, he sent one of his officials to Shropshire to see what the position was. He reported to my right hon. Friend and as a result the capital allocation for education in Shropshire was increased from £2·1 million to £3·9 million but—this is the important point—no allowance has been made in the rate support grant for the extra revenue which is necessary to go with that capital. One Secretary of State accepts the need, so I hope that my right hon. Friend the Secretary of State for the Environment can work in tandem to provide the necessary resources. The cost to the revenue is about £250,000, which is a large sum to a small rural county. I ask the Secretary of State to repeat with greater strength the commitment that he made last year.
Problems also arise at district council level. Wrekin district council is Labour-controlled. The county council has no overall political control. The Labour authority shouts along political lines even before it is affected, made dire forecasts of its rate increase. Its target is way below its GREA, which I gather is common for district councils in areas which have new towns. I wonder whether the needs of the new town possibly throw out the GREA calculation in some way. There would seem to be the possibility of some problems in that respect. Perhaps in reply the Minister will say whether the GREA for new towns in district council areas is accurate.
Wrekin district council has suffered through the reduction in the block grant this year, but before I support its protestations I suggest that, as a fairly high spending Labour council, it should put its own house in order. I will give some examples of its expenditure. The council has a lottery in the neighbourhood which is supposed to help with, for example, appeals and social services. This year resources have been allocated from that lottery to the striking miners—of whom, I am glad to say, there are very few in Shropshire. Resources have also been allocated to the local Anti-Apartheid organisation, which does not have much relevance to the electors of the Wrekin area.
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The council has a public relations department which employs three officers full time, as far as I can see, on Labour party political propaganda. Our county council, which has a budget of about £150 million, recently discussed whether it needed a public relations officer. It decided that it did not. Some of the Socialists on the county council led the attack against the proposal. The district council's budget is about one twentieth of that of the county council, yet the district council is employing three such officers. The county council reckons that the cost of a public relations officer would have been about £30,000. The district council must therefore be spending about £100,000 on political propaganda.
The district council prints a broadsheet, the "Wrekin Report", which could be produced, I should have thought, by Transport house. It has nothing to do with providing information to the electorate; it is purely and simply a political document. Until such time as the district council is prepared to cut out those frivolous expenses, my support—however hard the council has been treated under the block grant—will not go to it.
I finish where I started, by appealing to the Secretary of State to think again and to make sure that the shire counties have a better settlement, and the GREA is used as a basis for targets. The problems that the treasurer, the members of the Shropshire county council and I foresee as being even worse next year should not be allowed to develop. It is important to be fair to those authorities which have been so good over the years.
8.52 pm
Mr. Bill Michie: I do not suppose that anything that has been said during the debate will make much difference to the outcome. However, I am amazed that from all parts of the House—from the Conservative, the Labour and the Liberal parties—there has been a very good coverage of the criticisms of GREA and the way that the rates are assessed by each county borough or county council. Although, as I have said, it will not make much difference to the outcome, surely the Minister in his reply, and in the coming months, must look seriously at the anomalies, discrepancies and injustices created by GREA throughout the country.
We all compare our own areas with similar areas. Many anomalies have appeared within the area that I represent, and they have still to be dealt with by the Government. The Minister and the Government have been asked why they have produced a rate settlement such as the one before us.
The 1985–86 GREA for Sheffield has been assessed at £187·1 million—an increase of 3·5 per cent. on 1984–85—yet the national average is 6·7 per cent. Perhaps it is thought that Sheffield does not have problems connected with unemployment, the environment or the elderly, but that is not so. Although we are to some extent getting used to the difficulties which arise from the reduction of grant from central Government, the situation is getting out of hand. The city council has been accustomed to adverse RSG settlements. It has been calculated that the combination of all overall grant reductions, cash limiting and distributional charges caused by GREA, as well as tapering and penalties, has cost the city £151 million since 1980–81—in other words, that money has been taken from the Sheffield ratepayers.
I cannot understand why Conservative Members are always criticising the high spenders when areas such as Sheffield could, if it had not been for so many penalties

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and cuts, have provided the same services last year without any increase in rates. I do not think it is fair for the Minister to say that the Government are looking after the ratepayers' interests when the Government have made the position worse than it need be. Indeed, in some cases the situation would not have been at all bad. The problem seems to be related to the complications of GREA itself, as many hon. Members have said.
The Minister should endeavour to convince the House that the system is fair. In the Sheffield area, in regard to museums and arts, the GREA element is calculated according to shopping and floor space. Obviously, there is no direct relationship between the authority's function in providing museums and arts and the area of shopping floor space. Over 50 per cent. of the Sheffield GREA is calculated by reference to school pupil numbers. The calculation assumes that expenditure changes result from changes in pupil numbers occurring within 18 months. The Department of Education and Science knows and recognises that such is not the case; thus, the calculation is wrong. The cost is 10 per cent. of the education budget in Sheffield, and there is a reduction of £5·5 million in 1985–86.
With regard to education for people over 16—a statutory obligation—the GREA assessment is made by reference to the number of pupils in education at the time in question. But that is only half the calculation, because the demand for that sort of education is much higher. It is estimated that another 600 full-time places could be filled if the city council could provide the facilities. Obviously, with the present restrictions, it cannot do so. Ironically, because the places cannot be created to meet the demand, the city is penalised even further in GREA, to the tune of £1·2 million.
I should like to refer to the Library service. Everyone has libraries, but in the calculation no consideration is given to the fact that we are a major polytechnic and university city. Thousands of students who use the facilities are not brought into the calculation. I refer also to environmental health. No calculation is made of the special circumstances of industrial decline over the past 10 years. We also have problems of air, water and land pollution that are not given fair consideration when GREA is calculated. Finally, I refer to the elderly. Sheffield has one of the highest numbers of elderly of the major cities, yet that is not properly calculated for in the GREA.
Whether hon. Members vote for or against the report, the Minister must justify carrying on without taking into consideration all the points that have been made. It is hardly fair on authorities, whether they are considered good or bad, to have to struggle on year after year with this crazy system of GREA.
9 pm
Mr. Jack Straw: I thought for a moment that the hon. Member for The Wrekin (Mr. Hawksley) was going to be unique in the debate and complete a whole speech from the Conservative Benches without uttering a single word of criticism of the Government. However, he did not break ranks, as I originally thought he would. With his contribution, speeches from Conservative Back Benchers were completed with not a single Member speaking in full support of the Government. Not one Opposition Member spoke in support of the Government
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either. Conservative Members will make up their minds whether to drag their feet or sit on their hands in the Chamber when we vote, but there is virtually no support on either side of the House for the settlement.
We have had some excellent speeches from the Opposition. I show no favouritism when I commend in particular my hon. Friends the Members for Burnley (Mr. Pike) and for Preston (Mr. Thorne). I note the fact that all three Labour Members representing Lancashire have spoken—or are speaking—in the debate and that not a single Conservative Member from Lancashire has even deigned to be present during a debate of critical importance for our county.
I welcome the Minister of State to what I think will be his maiden speech on the rate support grant. Perhaps this is yet another occasion on which he wishes that he was back in the calm waters of the Department of Trade and Industry or anywhere but enveloped by GREA—an animal to be found only in the zoo.
Over the past five years we have witnessed the application of an ever-tightening vice over local authorities by the Treasury and the Department of the Environment. Long-standing conventions—which were respected by both sides—governing the relationship between the Government and local authorities and operated by both parties over many decades, have been unilaterally jettisoned. The Conservative party, once the champion of local democracy and choice, has become its destroyer. Sir Winston Churchill's famous injunction to "set the people free" has been turned upon its head to "set the people free to do as this Administration tells them." Even the much more recent pledge, under which all members of the Conservative party were enjoined to roll back the frontiers of the state, has been torn up. Instead, an ever larger and more monstrous leviathan has been unleashed, in the form of the Secretary of State, the Chancellor of the Exchequer and the Prime Minister, to devour local freedoms and arrogantly and autocratically to replace the decisions of 24,000 councillors and 500 separate communities by central diktat. The haunting spectre, the nightmare raised by the present Lord Chancellor that a Government with a large majority could become an elective dictatorship has, in large part, turned into reality.
In terms of their principles and claim to be the party of freedom, the Government have extracted a heavy price from their supporters in the country for their policies towards local government. The question that many wiser counsels on the Government Benches may ask—and, I suspect, even the Secretary of State in one of his rare moments of peace—is whether all this has been worth it. What exactly has been achieved in return for the destruction of the hallowed principles, the conventions governing the relationship between the Government and local authorities, and the destruction of some ministerial reputations besides?
If there has been a major shift in power between town hall and Whitehall over the past five years, there has also been a major shift in Whitehall itself, from the headquarters of the Department of the Environment in Marsham street to the corridors of the Treasury in Great George street. Local government has been sacrificed and the Department of the Environment Ministers sometimes nearly crucified upon the alter of pseudo-monetarism. What that one true believer, the Chancellor, has asserted and will assert is that controlling the totality of local

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authorities' current and capital expenditure is central and essential to the cause of the Government's economic policy.
What I have to say to the House—I address my remarks particularly to Conservative Members—is that, even within the criteria set by the Chancellor for the success of this policy, the case for controlling local authority expenditure in the present way is wholly unjustified. It is that case that I first wish to examine by reference to our own recent history and by reference to the current practice of other countries more successful than we are
Local authorities, as the Secretary of State told the House earlier today, spend £24,000 billion each year. It is a large sum, of which just under half is met by central Government and the other half from local revenue—principally the rates, charges and rents. What local authorities spend in totality is classed as public expenditure. The Pavlovian response of the Chancellor, when challenged upon this, is to say that unless all public spending is strictly controlled, the whole of the Government's economic strategy will be knocked off course.
I am self-evidently not a monetarist economist—there are very few of these, and it is an ever-diminishing breed —but, even for those who are, control of public expenditure is not an end in itself but a means to the end of controlling the things about which monetarists worry—the money supply, the public sector borrowing requirement and, they say, through both of those, the rate of inflation.
The Government's fundamental error is to believe that what local authorities spend from their own local revenue can have any significant effect upon public borrowing or through that upon the money supply, interest rates and the rate of inflation. Local authorities are not allowed by law to borrow to finance their current spending. That means that except in the most marginal and indirect way what local authorities spend out of their own current resources cannot affect the monetary aggregates upon which the Government—not we—say that their policy should be judged.
In short, the Government have made a rod for their own back by seeking to control that which there is no need directly to control, even within the terms of their own policy.
Mr. Patrick Jenkin: Perhaps I may cast the hon. Gentleman's mind back to the passage from the memoirs of Lord Barnett in which he explained that the Labour Government took a totally different view and in fact insisted on regarding local authority current spending as part of total public spending.
In those circumstances, is the hon. Gentleman now saying that the Labour Government got it all wrong and that the Opposition are going to pursue an entirely different policy?
Mr. Straw: I am happy to reply to the point raised by the Secretary of State. Indeed, I anticipated it in my speech.
There is a fundamental distinction in terms of practice between this Government and the last Labour Government, and that concerns the control that the Government are exercising. This Government have viewed all items within the public expenditure survey
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operation as items which have to be directly the subject of control. I fully accept that in terms of public expenditure conventions the die was cast in 1962 when the Plowden committee recommended the present system of public expenditure survey committee. The fundamental difference is that, even though Plowden recommended, and Otto Clarke implemented, that all local authority public expenditure should be classed as public spending, initially that was only for the purposes of indicative planning by the Treasury to give it an idea of what was happening elsewhere in the economy, not for the purpose of control.
I accept that the last Labour Government introduced cash limits over their expenditure. I have no objection to that; nor do I have any objection to cash limits over rate support grant. It is the duty of any institution with responsibility for public money to ensure that it spends that money wisely and efficiently, and cash limits in my judgment are one way of ensuring this. We have never questioned—and neither did Mrs. Margaret Hodge, the leader of Islington council, who appeared recently on television, dispute—the right of central Government to close-end and cash limit what they gave to local authorities. We will argue about the amount as we are doing tonight, but none of us has said that central Government are not entitled to say, "That is the amount, and no more."
Mr. Patrick Jenkin: This is very important. The hon. Gentleman's argument simply will not wash. My quotation from Lord Barnett makes it abundantly clear that the Labour Government used the rate support grant not just to close-end the amount of Government grant to local authorities, but to reduce the percentage so as to reduce local authority current spending. I shall not read the quotation again. That is what Lord Barnett said and that is what the Labour Government were trying to do.
Mr. Straw: The Secretary of State ignores the fundamental difference in the relationship between central and local government before 1979 and now. I anticipated all those questions. Of course central Government have sought in the past and will seek in the future to influence what local authorities do, just as local government seeks to influence what central Government do, but there is a fundamental difference in terms of the democratic balance of power between seeking to influence what an institution does and seeking directly to control it. Since 1979, the Secretary of State and his predecessors have sought to break the convention that Governments should control what they give to local authorities and to seek in various ways to influence what authorities do and to say that in future central Government should wholly control all local authority spending, leaving the authorities no discretion whatever. If the Secretary of State thinks that the present system is the same as that operated by the Labour Government, he should ask the local authorities themselves. Conservative and Labour-controlled authorities and the Association of County Councils will tell him that there has been a fundamental change and that they want the old system back.
Mr. Norman Atkinson: The Government, and especially the present Secretary of State, have said that they have no objection to local authorities selling off their assets to fund their services so long as they pay their penalty to the Government. The Government deserve even

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more condemnation if they are not just seeking to control local authority expenditure with certain qualifications but actually encouraging local authorities to do their own asset stripping to fund their services.
Mr. Patrick Jenkin: I did not say that.
Mr. Straw: My hon. Friend the Member for Tottenham (Mr. Atkinson) is quite right. There are all kinds of anomalies, even in the present public expenditure conventions.
We must deal with the fundamental argument here. I have taken part in more debates on this than I care to recall. The Secretary of State has constantly claimed that local government expenditure is part of public expenditure and must therefore be controlled in totality, but he has never answered our point, with which some Conservative Back Benchers agree, that what local authorities spend out of current resources does not and cannot affect the things that the Government regard as the test of their economic policy—the money supply, the public sector borrowing requirement and interest rates.
It is essential that the Government address themselves to that point. Let them consider the example of other countries. The United States and West Germany have both to some extent been following monetarist policies—certainly until 1982 in the United States, and until now in West Germany. Both those countries are more successful than ours, but neither seeks centrally to control local authority expenditure. The Secretary of State may argue that they are federal countries. Constitutionally that is so, but they are as unitary in economic terms as this country. If they do not find it necessary to control local authority expenditure but still have more successful economies than ours, why is such control so necessary here?
Ten years ago, the Prime Minister, when she was the Shadow Environment spokesman, promised to abolish domestic rates. That promise was repeated in the 1979 Conservative manifesto. Worn down by utter failure in that respect, the Prime Minister has sentenced the Minister for Local Government to the purgatory of seeking to redeem her pledges. If he succeeds, no doubt the right hon. Lady will claim the credit. If he fails, his efforts to reach the Cabinet Room will be thwarted—at least under the present Prime Minister.
After four major Acts, GREAs, targets, rate-capping and endless Green and White Papers, we are now to have a fundamental review of local government finances. We wish the Minister nothing but well, and look forward to the results. However, unless the review addresses the central economic question, it will not lead to the removal of the fetters on local democracy, which Conservative councillors seek as ardently as do the Opposition.
The Minister must not deceive himself into believing that there is a middle way. The hon. Member for The Wrekin and the Association of County Councils have suggested that the local authorities' tax base should be broadened to include a local income or sales tax and that the central Government grant should be correspondingly reduced from half—as it is today—to, say, a quarter. In fact, the broadening of the local government tax base would not make the slightest difference to the Treasury's present case for controlling every penny spent by local government. The Treasury and the Chancellor wrongly, but powerfully, believe that every pound of local
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government expenditure must be controlled by the state, whatever its source. The proof of that lies in the fact that, contrary to the conventional wisdom of Layfield and many others, control has increased as the contribution of central Government has decreased.
Central Government's control is greatest where its contribution is tiniest. Central Government now seeks control of the total expenditure of Islington, Camden, the GLC and ILEA, while those authorities have received not a penny from central Government or from the Treasury.
If the Minister is to spring out of the trap in which he and the local authorities are currently imprisoned, he must first fundamentally challenge the accounting conventions which are the gaoler. It is often assumed that those conventions are God-given, permanent and value-free. They are not. They are man-made and politically weighted, and they can be changed.
The Secretary of State referred to the example of the Labour Government. In 1976, the present right hon. Member for Glasgow, Hillhead (Mr. Jenkins), a member of that Government, made a speech in Llangefni in which he said that with public expenditure crossing the boundary of 60 per cent. we were close to the frontiers of social democracy. Six months later the Treasury reworked the conventions, and it appeared that public spending was not 60 per cent. but 47 per cent.
Mr. David Howell: The hon. Gentleman says that the convention that all local authority spending should be controlled is man-made. Would he agree that the conventions were established by the Labour Government in 1976?
Mr. Straw: Perhaps the right hon. Gentleman was not present during my exchanges with the Secretary of State at the beginning of my speech. As I have said, there is a fundamental distinction between the practice of previous Governments of both major parties, who sought to influence the level of local government expenditure, and the practice of the present Government. If I seek to influence an institution, I respect its right to do something different if it disagrees with me. That principle is fundamental to the democratic balance. The present Government seek to control local authorities and, in doing so, to take away their democratic rights altogether.
In short, there is no economic justification for this monstrous system of controls. However, the system is doubly damned because it has not even worked out as Ministers intended. Ministers have claimed to be anxious about rate increases, but their policies have led directly to rate rises which have been far faster than the general rate of inflation. No doubt the Minister for Local Government will rattle through a list of figures showing how, year by year, the rate of increase in rates has declined. He will not say, however, that, year by year, rate rises have been far higher than the rate of inflation. Since 1978–79, rates have increased by 141 per cent., whereas prices have risen by 50 per cent. The Tory-dominated Association of County Councils has said that the reason for the increase in rates above the rate of inflation is the direct responsibility of the Government in cutting grant.
We must also consider the fairness of the system. The ACC has damned the settlement, complaining that it is the most complex ever in a system that is renowned for its complexity. It has challenged the Under-Secretary of State for the Environment, who prayed the ACC in aid in favour

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of reducing grant. The Government will seek any alibi. So incensed was Mr. John Lovill who, as far as I know, is not known to be a rabid Socialist, by what the Under-Secretary of State said, that the ACC wrote to him saying that it was quite untrue that it supported such a reduction in the level of rate support grant and that it was unacceptable when accompanied by constant accusations of local authority overspending and a refusal to allow the deficiency in income to be made good from other sources.
The inequity, unfairness and sheer insanity of the present system derives from the ever more frenetic efforts of Ministers to second and third-guess decisions which should sensibly be left with councillors. It also derives from their trying to substitute bizarre mathematical formulae for individual judgments, as the hon. Member for Langbaurgh (Mr. Holt) said. He should know because I understand that he used to be in the bookmaking industry, as it is delicately described, before coming to the House. It is ironic that the modern, extremist Conservative party has become the arch practitioner of rigid central planning and control. It is ironic that, while we are opening our ears to the need for greater decentralisation and more local sensitivity, the Conservative party is closing its ears. It is extraordinary that the Conservative party, above all, should have ignored the warnings of Karl Popper—that although it is possible to centralise power, it is not possible to centralise the knowledge needed to exercise that power widely. Popper, drawing on the Tories' favourite guru, Hayek, said of the central planner:
"Unable to ascertain what is in the minds of so many individuals, he must try to simplify his problems by eliminating individual differences…But this attempt to exercise power over minds must destroy the last possibility of finding out what people really think…Ultimately, it must destroy knowledge; and the greater the gain in power, the greater will be the loss of knowledge."
As much of what is intellectually respectable among modern Right-wing Conservatism derives from Popper and Hayek, it is time that some Conservative Members took notice of their philosophies.
Virtually every social and economic need from the cradle to the grave is now measured by GREA, but so detached have Ministers become that even the apparently simple issue of the demand for cemeteries and crematoria has not been measured, until this year, by reference to the number of people who are expected to die but by the number of people who are expected to go on living. It took the local authority associations four years to persuade the Department of the Environment—the hon. Member for Langbaurgh will know that this is the E8 factor—that a better measure of the demand for cemeteries and crematoria, far from being the number of people who are likely to carry on living, is the number of people who are likely to die. It is no wonder that we are in a mess.
GREA is bad enough, but now, quite contrary to the undertakings that have been given, it is used not merely to allocate grant but as a means of control. In addition, we have target, which is based on separate yardsticks and is inconsistent and in conflict with GREAs. One measure tells authorities what they need to spend and the other tells them what they will be allowed to spend. Of the 39 shire counties, 38 find that their target is below their GREA and that they will therefore be penalised heavily by the Government if they do no more than spend the Government's own assessment of their needs. The
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Government have consistently sought to hit at Labour authorities working in areas of serious social and economic need. The settlement will do so again.
Some authorities have been rate-capped and their position is worse. All face cuts. Some, like Hackney and Haringey, face catastrophe. Some, like Leicester, have been told that they have got to cut their rate by 50 per cent. even though, if the assumptions were correct, that would lead to a doubling of their rate next year.
I have not been in the Chamber all day so I did not get this at first hand, but I understand that rate-capped and high penalty authorities have decided today to seek a collective meeting with the Secretary of State to put forward representations about the dire problems they face. The hon. Member for Devizes (Mr. Morrison) spoke of the impossible position of Conservative authorities. Labour authorities are in the same difficulty. It is the hope of all my hon. Friends that that meeting will be fruitful and that the Secretary of State will recognise that he is pushing authorities into a corner from which they may not reasonably be able to extract themselves.
In regard to the shire counties and Conservative authorities, last year Environment Ministers staved off a major Back Bench rebellion only by giving promises to the right hon. Member for Cambridgeshire, South-East (Mr. Pym) of better things to come. The hon. Member for Bristol, West (Mr. Waldegrave) gave a categorical "yes" when asked by his right hon. Friend:
"from 1985–86 and thereafter, will the Minister be fairer to the low-spending authorities than his statement suggests?—[Official Report, 23 January 1984; Vol. 52, c. 737.]
I remind the Minister and Government Back Benc hers that that promise has not been met.
Mr. Bowen Wells: Hear, hear.
Mr. Straw: That "Hear, hear" came from the hon. Member for Hertford and Stortford (Mr. Wells) on the Government's Back Benches.
Hon. Members need not take this from me. They should have listened to the comments of their hon. Friends and of the Association of County Councils. The hon. Member for Uxbridge (Mr. Shersby) described the settlement as manifestly unjust. The hon. Member for Davyhulme (Mr. Churchill) said that his authority had been kicked in the teeth. We have heard many similar epithets about the settlement.
The final absurdity about the system, if it can be adorned with that name, that the Government have created, is that the Government claim that they have had to hit Labour overspenders so as to help Conservative underspenders. Some hon. Members on the Government Benches understand this, but it is so bizarre that most people turn off when it is explained to them. So crazy is the system that Conservative underspenders have only escaped even more massive cuts in grants and increases in rates because of overspending by Labour authorities.
If the Government's policy for Labour authorities works, if those authorities sack staff by the thousand and make massive cuts to meet the Government's targets, who will benefit? Not the low-spending shire authorities—quite the reverse. As expenditure came down in the high-spending Labour authorities, they would earn more grant. As the Treasury will not give the Secretary of State more total grant, the additional grant for the Labour authorities

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would come from Conservative authorities. Hon. Members do not need to take it from me; it is in the Official Report.
When Government Back Benchers go through the Lobby tonight they should appreciate that they are voting for higher rates in their own areas. If Labour authorities meet the Government's targets, Berkshire will lose £35 million in grant and have a 20 per cent. increase in rates. The right hon. Member for Cambridgeshire, South-East is not here, but before he goes into the Lobby he should weigh with care the fact that Cambridgeshire would lose £26 million in grant and its rates would go up 21 per cent. Essex would lose £35 million in grant and its rates would go up by 25 per cent. Kent would lose £90 million in grant and its rates would go up by 35 per cent. Wiltshire would lose £80 million in grant and its rates would increase by 22 per cent. West Sussex would lose so much that its rate would go up by 44 per cent. and it would get no grant at all; it would be in the same position as the GLC.
It is said that those whom the gods wish to destroy, they first make mad. This is a mad, crazy system in which the Secretary of State has imprisoned himself and the other authorities. If he were kicking the guts out of Labour authorities, one would have thought that at the very least Conservative authorities would benefit, but not a bit of it. If that policy works, and Labour authorities sack thousands of people, the result will be cuts among Conservative authorities and massive rate rises. That is written in the Minister's own answers.
The Government's policy towards local government is bereft of compassion, comprehension and common sense. The system that they have created defies rational analysis or explanation. It savages authorities which spend too much and impoverishes those which spend too little. Above all, this system has already destroyed local choice and freedom in pursuit of an utterly bankrupt economic policy. If carried through, it will destroy thousands of jobs and undermine the quality of life for millions of our citizens. That will be the consequence if this report is approved. That is why the Labour Opposition condemn it utterly and will vote against it tonight.
9.31 pm
The Minister for Local Government (Mr. Kenneth Baker): As the hon. Member for Blackburn (Mr. Straw) said, this is my maiden speech in a rate support grant debate. In the years that I have been in the House, when I have looked in on such debates, I have soon found that on the whole hon. Members keep away from them unless they have been alerted to attend by their local authorities. Rates debates are occasions when the disgruntled speak to the disenchanted in front of the disbelieving. Every system of rate support, including the one which existed in the 1960s and 1970s, is well nigh incomprehensible and is understood only by the initiated. Thankfully, few hon. Members wish to be initiated.
I accept that the system is byzantine in its complexity and that it is probably fully comprehended only by those who have a taste for scholastic theology. I can only recall the remarks of Palmerston on the Schleswig-Holstein question last century, when he said that only three people understood it—himself, a Danish professor who was in an asylum and a third who had died.
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I appreciate that it is exceptionally difficult to explain our system and that in double quick time, in attempting to discuss it, one sinks into a jargon which Mr. Edward Pearce of The Daily Telegraph referred to as
"the verbal sludge of municipal speak".
Therefore, I have every sympathy with those on both sides of the House who are impatient with this system and want to see one that is more easily understood and more predictable in its effect.
My right hon. Friend the Member for Guildford (Mr. Howell) made that point in his speech when he called for a more strategic, systematic and sustainable way of running our affairs. My right hon. Friend the Member for Chesham and Amersham (Sir I. Gilmour) also made that point, as did my hon. Friends the Members for Hornchurch (Mr. Squire) and for Langbaurgh (Mr. Holt). They welcomed the review that I am undertaking. So did the hon. Member for Blackburn, who, in an elegant and interesting speech—it was a pity that more of his hon. Friends were not present to hear it—addressed himself to some of the fundamental issues which I shall have to include in the review. In that review it will be possible to cover some of the points raised by my hon. Friend the Member for Davyhulme (Mr. Churchill), who referred to the extreme differences in rateable resources. Inevitably, such questions will have to be considered in the review.
I noted the points made by my hon. Friend the Member for Rochford (Dr. Clark) who pressed me to consider the fundamental changes that are needed.
Mr. Bowen Wells: Will my right hon. Friend give way?
Mr. Baker: I hope that my hon. Friend will allow me to press on for a moment, because I should like to answer the points that have been raised.
My hon. Friend the Member for Uxbridge (Mr. Shersby) spoke about Hillingdon. I very much appreciate the efforts made by Hillingdon council to reduce the high level of spending that it inherited. I regret that in a year when we have provided more favourable targets for most authorities, we have not been able to do as much as it would have liked.
Mr. Wilkinson: I appreciate, as always, my right hon. Friend's generous sentiments, but I must vote against the settlement. Last year my hon. Friend the Under-Secretary of State for the Environment made some reassuring remarks to my right hon. Friend the Member for Cambridgeshire, South-East (Mr. Pym). We were led to expect a better settlement than this, and for that very good reason I shall not be able to support the Government.
Mr. Baker: I understand. My hon. Friend the Member for Ruislip-Northwood (Mr. Wilkinson) has made his position clear to me. Accompanied by his colleague the hon. Member for Hayes and Harlington (Mr. Dicks), he brought a delegation to see me. I shall deal shortly with the commitment on targets that was made in last year's debate. The target was directed towards low spenders.
I did not hear the speech by my hon. Friend the Member for Sevenoaks (Mr. Wolfson), but I have been told what he said. I was aware of his view because he, too, brought a delegation of councillors to see my hon. Friend the Under-Secretary. I shall certainly examine the important matter of the parish council precept for his area.
My hon. Friend the Member for Langbaurgh, apart from supporting the review, said that apparently some

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acres of Cleveland county had been overlooked. If we have lost bits of Cleveland, I assure him that they will be discovered and the appropriate changes will be made.
Mr. Holt: When they have been discovered, will we receive the correct rate support grant, which we have so far been denied?
Mr. Baker: If the areas have been lost and they are discovered, justice will be done.
I enter a note of caution about the review. Any system which seeks to distribute £12 billion to over 400 local authorities by way of grant must be complex. The attempts to recognise the different resources and expenditure needs of different areas adds a great deal to the complexity. Attempts at trying to be fair in that distribution of central Government grant make the system complex.
The system which preceded that which now operates was equally complex and equally difficult to understand. It was based upon what mathematicians call regression analysis, which meant that the more one spent, the more grant one received. That gave a great boost to the continual high spenders.
One of the advantages of the present system is that it has broken the link, but it is complicated. The old system required 14 variable step-wise multi-variate regression analyses. In the late 1970s that could be done only on a computer in America. I say that because to find a system which is transparently simple and clear might be difficult. I have no shadow of doubt that I have to try to point the way towards a system which more people can understand and explain.
It is alleged that the complexity of the system increases the tension between central and local government. The real reason for so much tension about rate support is that since 1979 we have tried to restrain the total level of local authority spending. If one examines the pattern over the last 20 years, one sees that local authority spending in the 1960s and 1970s was rising by about 3·5 per cent. a year in real terms. Since we have been in office it has risen by about 1 per cent., or slightly less, in real terms per year.
The first Minister who tried to put the handbrake on local authority expenditure was Tony Crosland when, in 1976, he went to Manchester city hall and made a grave speech saying that the party was over. It was over for about a year, and then the high-spending pattern revived and we inherited a very high level and increasing rate of growth of local authority expenditure. Since 1979 we have been trying to reverse the trend, and we have had some success. However, I do not underestimate the difficulty that that imposes upon local authorities, whether Labour or Conservative.
The Government continue to keep a tight control on local authority expenditure. We have been able to set targets for 1985–86 which assist and reward the low-spending authorities. That fulfils the commitment given by my right hon. Friend and my hon. Friend the Under-Secretary during the debate a year ago.
Those authorities spending just below GREA have been allowed to increase their spending by 4·5 per cent. A few authorities — those spending not only below GREA but close to target — can increase their spending by 4·625 per cent. That is much better than has been possible for the past two years. For those authorities, there should be no real cuts. I am aware that many of those authorities still feel hard done by, and some believe that the targets set for next year are still too easy for the high spenders.
Mr. Churchill: It is not correct to say that all low spenders will receive the 4·625 per cent. increase. Some, such as Trafford, are having it clawed back under the negative marginal rate. It is clear that that is not a fulfilment of the pledge given last year, because Trafford is being given £200,000 but will have £2 million taken away. For that reason I—and I am not alone in this— will have no choice but to vote against the settlement.
Mr. Baker: I appreciate my hon. Friend's point, but it is on a different part of the system. I am talking about the targets set for expenditure. The 4·625 per cent. increase applies to Trafford next year. My hon. Friend is referring to grants.
I am aware that many of the low-spending authorities still feel that the high spenders are getting away with it. That has been expressed by the leaders of some of the shire authorities. I have told them that the high spenders are not getting away with it. Targets set for overspending authorities spending above GREA have been tough. As Opposition Members have said, that has involved real reductions in expenditure—in some cases as much as 6 per cent.
The targets that we have set do not favour the high spenders, and the controls on them are threefold. First, there are tougher targets for them. The hon. Members for Burnley (Mr. Pike) and for Sheffield, Heeley (Mr. Michie) made that point. Secondly, there are higher penalties in the amount of grant that is lost if the targets are exceeded. The level of penalty has been criticised, but those who overspend their target this year will suffer a very severe cut in grant. Thirdly, the 18 high spenders have been rate-capped.
I appreciate that the low spenders feel that their regard for Government policy during the past four years has been inadequately recognised. That has been the burden of many of the comments from hon. Members from both sides of the House. My hon. Friend the Member for The Wrekin (Mr. Hawksley) made the case for the county of Shropshire and my hon. Friend the Member for Suffolk, Central (Mr. Lord) made the case for Suffolk. I re-emphasise the point made by my right hon. Friend during his speech. I repeat again that we would like to abandon targets and holdback altogether, but that depends on the level of local authorities' budgets — how much they spend in the next year, 1985–86—and on the alternative pressures which can be brought to bear to achieve the delivery of the Government's public expenditure plans. We are considering various alternatives urgently to see whether they would be operable.
Mr. Charles Morrison: As my right hon. Friend began by speaking of targets with reference to tight controls and notes of caution, will he give a guarantee, looking further ahead — this is important in relation to an intervention of mine when the Secretary of State was speaking — that, whatever happens, the situation facing shire counties in 1986–87 will be better than it is now?
Mr. Baker: I remind the House that my right hon. Friend said earlier that the more favourable targets which we have been able to give low-spending authorities for 1985–86 have been possible only through the savings which have been achieved in public expenditure terms by rate capping the highest spenders. Rate capping will

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continue to produce savings in 1986–87 as we continue to bring down the excessive spending levels of the high spenders.
Thus, low-spending authorities will benefit from rate capping. For authorities which budget in the coming year, 1985–86, to spend at or below both target and GREA, targets for the following year, 1986–87, will take account of those further savings to be achieved from rate capping the highest spenders. To answer my hon. Friend's intervention, these low spenders' targets in 1986–87 will therefore be both more favourable than they would have been but for rate capping, and more favourable than for authorities which budget this year to spend above either target or GREA.
Mr. Eldon Griffiths: As one who will be supporting my right hon. Friend in the Lobby tonight, may I remind him that many of us will be doing so because of the prospect that has been held out of targets being got rid of altogether? That cannot come too soon. I appreciate the Government's difficulty in giving commitments against the changing background of public expenditure. Nevertheless, will my right hon. Friend give to shire counties, or at least to low-spending counties, some incentive which will enable them to assist the Government to get rid of targets that have been unjust?
Mr. Baker: I shall consider what my hon. Friend has said. The undertaking that we have given is to set targets which recognise low spending by the shire counties.
Dr. Cunningham: That question was asked in last year's debate, when many Conservative Members went into the Lobby in support of the Government on the basis of the assurances that they were then given. The outcome, according to the Association of County Councils, is that the average target increase for shire counties is 4·6 per cent., compared with the national average increase in target of 6·8 per cent. It remains the position, therefore, even under the present White Paper, that the lower-spending authorities receive lower average target increases. That is the reality of the situation, so what is the right hon. Gentleman's assurance worth?
Mr. Baker: I shall tell the hon. Gentleman what it is worth. I regret that we become involved at this stage in a great deal of what I described earlier as the verbal sludge of municipal speak. The hon. Gentleman is seeking to make target-to-target comparisons, but the real measure is the target-to-budget comparison. What was said a year ago about the low-spending authorities has been met. The low-spending authorities below GRE have had increases of 4·5 per cent. The increases for the very lowest spending authorities have been 4·625 per cent. The undertakings that my right hon. Friend the Secretary of State and I have given during the debate have been explicit. The leaders of the Tory shire counties have made it clear again and again that they expect recognition to continue of their efforts to keep spending low.
The hon. Member for Blackburn made an interesting and important comment. I was delighted to hear from him that the Labour rate capped authorities are now prepared to discuss the Rates Act 1984. My right hon. Friend said last week that if they wished to meet him collectively he would be happy to see them, and the Government stand
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by that. The earlier the meeting, the better. However, as the circumstances of authorities vary greatly, any decision to change the rates limit of a particular authority must take account of its circumstances. I hope that the authorities will come to the meeting ready, if they wish, to make clear their views on their proposed rate limits in their respective financial positions. My right hon. Friend will be able to consider any new information before reaching his final decision.
Rate capping has been mentioned on several occasions during the debate. I remind the House that there will be other opportunities to discuss the matter, as the orders applying to the precepting and rating authorities will have to be debated. The help that we have been able to provide for the low spending shire counties this year depends essentially upon our rate capping proposals.
The proportion of local expenditure which central Government have funded through grants will fall next year from 51·9 to 48·7 per cent. That was very much the main thrust of the speech of the hon. Member for Copeland (Dr. Cunningham). The RSG has dropped from 61 per cent. since the Conservative Government took office in 1979. We have taken this course to increase the accountability of local authorities. It is the main reason for the drop in grant to the shire counties and districts this year.
I am aware of the campaign that has been run by many of the high-spending Labour authorities against the Government's policy. They are demanding that they should be given back the grant which they would have had if the level of Government funding had remained at 61 per cent. The hon. Member for Copeland said, in effect, "When you came in, Government support was 61 per cent. It has been reduced progressively to 48·7 per cent." It is claimed by many, including many Labour Members, that the moneys which have been made available belong to the high-spending authorities. They advance the argument that the Government have stolen their grant. Some authorities seem to imagine that they have an inalienable entitlement to taxpayers' money. They imagine that they have the right to put their municipal fingers into taxpayers' pockets. It is fanciful to claim that the Government have stolen local authority grant. It is not their grant, and there is nothing special or sacred about 61 per cent.
The grant percentage is calculated each year and authorities have no right to expect their grant in any particular year to be based on what they received in any previous year. The Labour Government reduced the percentage from 66·6 per cent. in 1975–76 to 61 per cent. in 1977–78 and 1978–79. That cut, which was introduced by the then Chancellor of the Exchequer, was by far the largest ever made. If one counted up all that money, one would find that by the time the Labour party left office £1·4 billion had been forgone. I never heard arguments from any Labour Members that this money should be given back.
Mr. Straw: The right hon. Gentleman should not try to mislead the House about the record of the last Labour Government. When Labour came into government the rate of grant was set at 61 per cent., and it was 61 per cent. when Labour left office. The rate was increased to 66 per cent. to cover the exceptional increase in the cost of the Houghton recommendations in 1975. The last Labour Government's record was one of maintaining the grant at above 60 per cent., and this Government's record is of cutting the grant every year, year by year.
Mr. Baker: The hon. Gentleman's figures are correct. The rate started at 61 per cent., and went up to 66 per cent. The largest single cut of central Government support to local authorities was made by the Labour Government. We believe that we have been right since 1979 to continue to reduce that grant.
Mr. Simon Hughes: We certainly accept the proposition that local authorities have no inalienable right to taxpayers' money. In return, the right hon. Gentleman must accept the proposition that, when central Government impose duties on local authorities, and when services have to be provided, money must be found from somewhere. Establishing a system which does not allow that is not justifiable by anyone's reckoning.
Mr. Baker: The present system seeks to do that, and it does so. It seeks to measure the expenditure needs of different authorities. We have heard that many hon. Members are dissatisfied, and I accept their criticisms. The system is by no means perfect. We have been right in protecting the taxpayer by reducing the amount of central Government grant to local authorities. It is often said that the consequence is an increase in the level of rates. I remind the House that the average level of rate increase has fallen during the past four years, as the hon. Member for Blackburn reminded the House. In 1980–81 there was an average increase of 27 per cent. It fell to 23 per cent., to 16 per cent., and then to 13 per cent. In the last year the average increase in domestic rate has been 6·4 per cent.—the lowest for 10 years. I hope that my right hon. and hon. Friends will note that fact.
What policy on local government expenditure would the Opposition follow? Would they allow expenditure to go through the roof and force up rates? That idea was implicit in the speech of the hon. Member for Blackburn. Would the Opposition increase the central Exchequer grant to local authorities? That would be bound to increase taxes.
Local government expenditure can be financed from only two sources, because local authorities cannot borrow for their current spending. Local government expenditure can be financed from either rates or taxes. Several hon. Members have rightly said that it cannot be satisfactory to have rates as the single tax base because that places too great a burden on too few shoulders. Each year, a smaller number of householders pay rates. My hon. Friend the Member for Hornchurch made that point, and that is one matter that I shall have to study carefully in my review.
The ratepayers know only too well which party protects their interests. This Government's record should leave them in no doubt. We have reduced the seemingly inexorable growth in spending, without unacceptable reductions in services. We have abolished supplementary rates, which has prevented ratepayers from being caned twice in one year. We have obliged all authorities to consult properly and fully with their industrial and commercial ratepayers. We have set up the Audit Commission, with a new emphasis on value for money in the provision of services. We have introduced selective rate capping to protect the ratepayers of the highest spending authorities, including the GLC, from the extravagant waste of money by those authorities on political propaganda. As my hon. Friends know, £10 million was spent by the GLC on that propaganda. What would that money have bought in terms of meals on wheels or home helps?
420
That is the kind of unacceptable expenditure against which we are acting. It has nothing to do with services; it is purely political. If anyone seriously believes that ratepayers would have seen such achievements under a Labour Government, I suggest that he looks again at the history books. Average rate increases have fallen in each of the past five years. That is what ratepayers want, and that is what the Government have given them. It is what the 1985–86 settlement will achieve if local authorities behave responsibly. I commend these documents to the House.
Question put and agreed to.
Resolved,
That the Rate Support Grant Supplementary Report (England) (No. 2) 1984/85 (House of Commons Paper No. 81), which was laid before this House on 11th December, be approved.

Rate Support Grant (England)

  RATE SUPPORT GRANT (ENGLAND) (No. 3) I983/84
  Resolved,
  That the Rate Support Grant Supplementary Report (England) (No. 3) I983/84 (House of Commons Paper No. 82), which was laid before this House on 11th December, be approved.—[Mr. Patrick Jenkin.]

  RATE SUPPORT GRANT REPORT (ENGLAND) 1985/86
  Question put,
  That the Rate Support Grant Report (England) 1985/86 (House of Commons Paper No. 142), which was laid before this House on 20th December, be approved. — [Mr. Patrick Jenkin.]
  The House divided: Ayes 343, Noes 211.

  Division No. 67]

  [10 pm

  AYES

  Adley, Robert

  Butcher, John

  Aitken, Jonathan

  Butler, Hon Adam

  Alexander, Richard

  Butterfill, John

  Alison, Rt Hon Michael

  Carlisle, John (N Luton)

  Amess, David

  Carlisle, Kenneth (Lincoln)

  Ancram, Michael

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

  Arnold, Tom

  Carttiss, Michael

  Ashby, David

  Cash, William

  Aspinwall, Jack

  Chalker, Mrs Lynda

  Atkins, Robert (South Ribble)

  Channon, Rt Hon Paul

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

  Chapman, Sydney

  Baker, Nicholas (N Dorset)

  Chope, Christopher

  Baldry, Tony

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

  Banks, Robert (Harrogate)

  Clark, Sir W. (Croydon S)

  Batiste, Spencer

  Clarke, Rt Hon K. (Rushcliffe)

  Bellingham, Henry

  Clegg, Sir Walter

  Bendall, Vivian

  Cockeram, Eric

  Bevan, David Gilroy

  Colvin, Michael

  Biffen, Rt Hon John

  Conway, Derek

  Blackburn, John

  Coombs, Simon

  Blaker, Rt Hon Sir Peter

  Cope, John

  Body, Richard

  Corrie, John

  Bonsor, Sir Nicholas

  Couchman, James

  Bottomley, Peter

  Cranborne, Viscount

  Bottomley, Mrs Virginia

  Critchley, Julian

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

  Crouch, David

  Bowden, Gerald (Dulwich)

  Currie, Mrs Edwina

  Boyson, Dr Rhodes

  Dickens, Geoffrey

  Braine, Rt Hon Sir Bernard

  Dorrell, Stephen

  Brandon-Bravo, Martin

  Douglas-Hamilton, Lord J.

  Bright, Graham

  Dover, Den

  Brinton, Tim

  du Cann, Rt Hon Sir Edward

  Brittan, Rt Hon Leon

  Dunn, Robert

  Brooke, Hon Peter

  Durant, Tony

  Brown, M. (Brigg & Cl'thpes)

  Edwards, Rt Hon N. (P'broke)

  Browne, John

  Eggar, Tim

  Bruinvels, Peter

  Emery, Sir Peter

  Bryan, Sir Paul

  Evennett, David

  Buck, Sir Antony

  Eyre, Sir Reginald

  Bulmer, Esmond

  Fairbairn, Nicholas

  Burt, Alistair

  Fallon, Michael

  421

  Farr, Sir John

  Kershaw, Sir Anthony

  Favell, Anthony

  Key, Robert

  Fenner, Mrs Peggy

  Kilfedder, James A.

  Fletcher, Alexander

  King, Roger (B'ham N'field)

  Fookes, Miss Janet

  King, Rt Hon Tom

  Forman, Nigel

  Knight, Gregory (Derby N)

  Forsyth, Michael (Stirling)

  Knight, Mrs Jill (Edgbaston)

  Forth, Eric

  Knowles, Michael

  Fowler, Rt Hon Norman

  Knox, David

  Fox, Marcus

  Lamont, Norman

  Franks, Cecil

  Latham, Michael

  Fraser, Peter (Angus East)

  Lawler, Geoffrey

  Freeman, Roger

  Lawrence, Ivan

  Fry, Peter

  Lee, John (Pendle)

  Gale, Roger

  Leigh, Edward (Gainsbor'gh)

  Galley, Roy

  Lennox-Boyd, Hon Mark

  Gardiner, George (Reigate)

  Lester, Jim

  Gardner, Sir Edward (Fylde)

  Lewis, Sir Kenneth (Stamf'd)

  Garel-Jones, Tristan

  Lightbown, David

  Gilmour, Rt Hon Sir Ian

  Lilley, Peter

  Glyn, Dr Alan

  Lloyd, Ian (Havant)

  Goodlad, Alastair

  Lloyd, Peter, (Fareham)

  Gorst, John

  Lord, Michael

  Gow, Ian

  Lyell, Nicholas

  Gower, Sir Raymond

  McCrindle, Robert

  Grant, Sir Anthony

  McCurley, Mrs Anna

  Greenway, Harry

  Macfarlane, Neil

  Gregory, Conal

  MacGregor, John

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

  MacKay, Andrew (Berkshire)

  Griffiths, Peter (Portsm'th N)

  MacKay, John (Argyll & Bute)

  Grist, Ian

  Maclean, David John

  Ground, Patrick

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

  Grylls, Michael

  Major, John

  Gummer, John Selwyn

  Malins, Humfrey

  Hamilton, Hon A. (Epsom)

  Malone, Gerald

  Hamilton, Neil (Tatton)

  Maples, John

  Hampson, Dr Keith

  Marland, Paul

  Hanley, Jeremy

  Marlow, Antony

  Hannam, John

  Marshall, Michael (Arundel)

  Hargreaves, Kenneth

  Mates, Michael

  Harris, David

  Mather, Carol

  Harvey, Robert

  Maude, Hon Francis

  Haselhurst, Alan

  Mawhinney, Dr Brian

  Havers, Rt Hon Sir Michael

  Mayhew, Sir Patrick

  Hawkins, C. (High Peak)

  Mellor, David

  Hawkins, Sir Paul (SW N'folk)

  Meyer, Sir Anthony

  Hawksley, Warren

  Miller, Hal (B'grove)

  Hayes, J.

  Mills, lain (Meriden)

  Hayhoe, Barney

  Mills, Sir Peter (West Devon)

  Hayward, Robert

  Mitchell, David (NW Hants)

  Heathcoat-Amory, David

  Moate, Roger

  Heddle, John

  Monro, Sir Hector

  Henderson, Barry

  Moore, John

  Heseltine, Rt Hon Michael

  Morrison, Hon C. (Devizes)

  Hickmet, Richard

  Morrison, Hon P. (Chester)

  Hicks, Robert

  Moynihan, Hon C.

  Higgins, Rt Hon Terence L.

  Mudd, David

  Hind, Kenneth

  Neale, Gerrard

  Hogg, Hon Douglas (Gr'th'm)

  Needham, Richard

  Holland, Sir Philip (Gedling)

  Neubert, Michael

  Holt, Richard

  Newton, Tony

  Hordern, Peter

  Nicholls, Patrick

  Howard, Michael

  Norris, Steven

  Howarth, Gerald (Cannock)

  Onslow, Cranley

  Howe, Rt Hon Sir Geoffrey

  Oppenheim, Phillip

  Howell, Rt Hon D. (G'ldford)

  Oppenheim, Rt Hon Mrs S.

  Howell, Ralph (N Norfolk)

  Osborn, Sir John

  Hubbard-Miles, Peter

  Ottaway, Richard

  Hunt, David (Wirral)

  Page, Richard (Herts SW)

  Hunt, John (Ravensbourne)

  Parkinson, Rt Hon Cecil

  Hunter, Andrew

  Parris, Matthew

  Hurd, Rt Hon Douglas

  Patten, Christopher (Bath)

  Jackson, Robert

  Patten, John (Oxford)

  Jenkin, Rt Hon Patrick

  Pawsey, James

  Johnson Smith, Sir Geoffrey

  Percival, Rt Hon Sir Ian

  Jones, Gwilym (Cardiff N)

  Pollock, Alexander

  Jones, Robert (W Herts)

  Porter, Barry

  Jopling, Rt Hon Michael

  Portillo, Michael

  Joseph, Rt Hon Sir Keith

  Powell, William (Corby)

  Kellett-Bowman, Mrs Elaine

  Powley, John

  422

  Price, Sir David

  Taylor, John (Solihull)

  Prior, Rt Hon James

  Taylor, Teddy (S'end E)

  Proctor, K. Harvey

  Tebbit, Rt Hon Norman

  Pym, Rt Hon Francis

  Temple-Morris, Peter

  Raffan, Keith

  Terlezki, Stefan

  Raison, Rt Hon Timothy

  Thatcher, Rt Hon Mrs M.

  Rathbone, Tim

  Thomas, Rt Hon Peter

  Rees, Rt Hon Peter (Dover)

  Thompson, Donald (Calder V)

  Renton, Tim

  Thompson, Patrick (N'ich N)

  Rhodes James, Robert

  Thorne, Neil (Ilford S)

  Rhys Williams, Sir Brandon

  Thornton, Malcolm

  Ridley, Rt Hon Nicholas

  Thurnham, Peter

  Roberts, Wyn (Conwy)

  Townend, John (Bridlington)

  Robinson, Mark (N'port W)

  Townsend, Cyril D. (B'heath)

  Roe, Mrs Marion

  Tracey, Richard

  Rossi, Sir Hugh

  Trippier, David

  Rost, Peter

  Trotter, Neville

  Rowe, Andrew

  Twinn, Dr Ian

  Rumbold, Mrs Angela

  van Straubenzee, Sir W.

  Ryder, Richard

  Vaughan, Sir Gerard

  Sackville, Hon Thomas

  Viggers, Peter

  Sainsbury, Hon Timothy

  Waddington, David

  Sayeed, Jonathan

  Wakeham, Rt Hon John

  Scott, Nicholas

  Waldegrave, Hon William

  Shaw, Giles (Pudsey)

  Walden, George

  Shaw, Sir Michael (Scarb')

  Walker, Bill (Tside N)

  Shelton, William (Streatham)

  Walker, Rt Hon P. (W'cester)

  Shepherd, Colin (Hereford)

  Waller, Gary

  Shepherd, Richard (Aldridge)

  Walters, Dennis

  Silvester, Fred

  Ward, John

  Sims, Roger

  Wardle, C. (Bexhill)

  Skeet, T. H. H.

  Warren, Kenneth

  Smith, Tim (Beaconsfield)

  Watson, John

  Soames, Hon Nicholas

  Watts, John

  Speed, Keith

  Wells, Bowen (Hertford)

  Speller, Tony

  Wells, Sir John (Maidstone)

  Spence, John

  Wheeler, John

  Spencer, Derek

  Whitfield, John

  Spicer, Jim (W Dorset)

  Whitney, Raymond

  Spicer, Michael (S Worcs)

  Wiggin, Jerry

  Squire, Robin

  Winterton, Mrs Ann

  Stanbrook, Ivor

  Winterton, Nicholas

  Stanley, John

  Wolfson, Mark

  Steen, Anthony

  Wood, Timothy

  Stern, Michael

  Woodcock, Michael

  Stevens, Martin (Fulham)

  Yeo, Tim

  Stewart, Allan (Eastwood)

  Young, Sir George (Acton)

  Stewart, Andrew (Sherwood)

  Younger, Rt Hon George

  Stewart, Ian (N Hertf'dshire)

  Stokes, John

  Tellers for the Ayes:

  Stradling Thomas, J.

  Mr. Robert Boscawen and

  Sumberg, David

  Mr. Ian Lang.

  Tapsell, Sir Peter

  NOES

  Adams, Allen (Paisley N)

  Brown, Ron (E'burgh, Leith)

  Alton, David

  Bruce, Malcolm

  Anderson, Donald

  Buchan, Norman

  Ashdown, Paddy

  Caborn, Richard

  Ashley, Rt Hon Jack

  Callaghan, Jim (Heyw'd & M)

  Ashton, Joe

  Campbell, Ian

  Atkinson, N. (Tottenham)

  Campbell-Savours, Dale

  Bagier, Gordon A. T.

  Canavan, Dennis

  Banks, Tony (Newham NW)

  Carlile, Alexander (Montg'y)

  Barnett, Guy

  Carter-Jones, Lewis

  Barron, Kevin

  Cartwright, John

  Beckett, Mrs Margaret

  Churchill, W. S.

  Beith, A. J.

  Clark, Dr David (S Shields)

  Bell, Stuart

  Clarke, Thomas

  Benn, Tony

  Clay, Robert

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

  Clwyd, Mrs Ann

  Bermingham, Gerald

  Cocks, Rt Hon M. (Bristol S.)

  Bidwell, Sydney

  Cohen, Harry

  Boothroyd, Miss Betty

  Coleman, Donald

  Boyes, Roland

  Concannon, Rt Hon J. D.

  Bray, Dr Jeremy

  Cook, Frank (Stockton North)

  Brown, Gordon (D'f'mline E)

  Cook, Robin F. (Livingston)

  Brown, Hugh D. (Provan)

  Corbett, Robin

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

  Corbyn, Jeremy

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

  Cowans, Harry

  423

  Craigen, J. M.

  Harrison, Rt Hon Walter

  Crowther, Stan

  Hart, Rt Hon Dame Judith

  Cunliffe, Lawrence

  Hattersley, Rt Hon Roy

  Cunningham, Dr John

  Haynes, Frank

  Dalyell, Tam

  Healey, Rt Hon Denis

  Davies, Rt Hon Denzil (L'lli)

  Heffer, Eric S.

  Davies, Ronald (Caerphilly)

  Hogg, N. (C'nauld & Kilsyth)

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

  Holland, Stuart (Vauxhall)

  Deakins, Eric

  Home Robertson, John

  Dewar, Donald

  Howells, Geraint

  Dicks, Terry

  Hoyle, Douglas

  Dixon, Donald

  Hughes, Dr. Mark (Durham)

  Dobson, Frank

  Hughes, Robert (Aberdeen N)

  Dormand, Jack

  Hughes, Roy (Newport East)

  Douglas, Dick

  Hughes, Simon (Southwark)

  Dubs, Alfred

  Janner, Hon Greville

  Dunwoody, Hon Mrs G.

  John, Brynmor

  Eadie, Alex

  Johnston, Russell

  Eastham, Ken

  Jones, Barry (Alyn & Deeside)

  Ellis, Raymond

  Kaufman, Rt Hon Gerald

  Evans, John (St. Helens N)

  Kennedy, Charles

  Ewing, Harry

  Kilroy-Silk, Robert

  Fatchett, Derek

  Kirkwood, Archy

  Faulds, Andrew

  Lambie, David

  Field, Frank (Birkenhead)

  Lamond, James

  Fields, T. (L'pool Broad Gn)

  Leadbitter, Ted

  Fisher, Mark

  Leighton, Ronald

  Flannery, Martin

  Lewis, Ron (Carlisle)

  Forrester, John

  Lewis, Terence (Worsley)

  Foulkes, George

  Litherland, Robert

  Fraser, J. (Norwood)

  Lloyd, Tony (Stretford)

  Freeson, Rt Hon Reginald

  Lofthouse, Geoffrey

  Freud, Clement

  McCartney, Hugh

  Garrett, W. E.

  McDonald, Dr Oonagh

  George, Bruce

  McGuire, Michael

  Gilbert, Rt Hon Dr John

  McKay, Allen (Penistone)

  Godman, Dr Norman

  McKelvey, William

  Golding, John

  Mackenzie, Rt Hon Gregor

  Gould, Bryan

  Maclennan, Robert

  Gourlay, Harry

  McTaggart, Robert

  Hamilton, W. W. (Central Fife)

  McWilliam, John

  Hancock, Mr. Michael

  Madden, Max

  Harman, Ms Harriet

  Marek, Dr John

  424

  Marshall, David (Shettleston)

  Sheerman, Barry

  Mason, Rt Hon Roy

  Sheldon, Rt Hon R.

  Maxton, John

  Shersby, Michael

  Maynard, Miss Joan

  Shore, Rt Hon Peter

  Meacher, Michael

  Short, Ms Clare (Ladywood)

  Meadowcroft, Michael

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

  Michie, William

  Silkin, Rt Hon J.

  Mikardo, Ian

  Skinner, Dennis

  Millan, Rt Hon Bruce

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

  Miller, Dr M. S. (E Kilbride)

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

  Mitchell, Austin (G't Grimsby)

  Snape, Peter

  Montgomery, Sir Fergus

  Soley, Clive

  Morris, Rt Hon A. (W'shawe)

  Spearing, Nigel

  Oakes, Rt Hon Gordon

  Steel, Rt Hon David

  O'Brien, William

  Stott, Roger

  Orme, Rt Hon Stanley

  Strang, Gavin

  Owen, Rt Hon Dr David

  Straw, Jack

  Park, George

  Thomas, Dafydd (Merioneth)

  Parry, Robert

  Thomas, Dr R. (Carmarthen)

  Patchett, Terry

  Thompson, J. (Wansbeck)

  Pavitt, Laurie

  Thome, Stan (Preston)

  Pendry, Tom

  Tinn, James

  Penhaligon, David

  Torney, Tom

  Pike, Peter

  Wainwright, R.

  Powell, Raymond (Ogmore)

  Wallace, James

  Prescott, John

  Warden, Gareth (Gower)

  Radice, Giles

  Weetch, Ken

  Randall, Stuart

  Welsh, Michael

  Redmond, M.

  White, James

  Rees, Rt Hon M. (Leeds S)

  Wigley, Dafydd

  Richardson, Ms Jo

  Wilkinson, John

  Roberts, Ernest (Hackney N)

  Williams, Rt Hon A.

  Robertson, George

  Winnick, David

  Robinson, G. (Coventry NW)

  Woodall, Alec

  Rogers, Allan

  Wrigglesworth, Ian

  Rooker, J. W.

  Ross, Stephen (Isle of Wight)

  Tellers for the Noes:

  Rowlands, Ted

  Mr. James Hamilton and

  Ryman, John

  Mr. Sean Hughes.

  Sedgemore, Brian

  Question accordingly agreed to.

Rate Support Grant (Wales)
10.16 pm
The Secretary of State for Wales (Mr. Nicholas Edwards): I beg to move,
That the Welsh Rate Support Grant Report 1985–86 (House of Commons Paper No. 100), which was laid before this House on 12th December, be approved.
I think that it would be for the convenience of the House to discuss also the second motion:
That the Welsh Rate Support Grant Report 1985–86 (Amendment) Report (House of Commons Paper No. 147), which was laid before this House on 10th January, be approved.
Mr. Speaker: If the House agrees, so be it.
Mr. Edwards: The amendment report corrects minor errors in some of the expenditure guidance and associated figures in the main report which arose from a programming error. I am sorry that these errors occurred, but the changes involved are very small. The largest decrease in an expenditure target is only £4,000 in a target of over £200 million. However, it is only proper that, having been identified, these errors should be corrected.
This is the fifth main Welsh rate support grant report that I have put to the House. I will first examine briefly how far the Government's objectives for local authority expenditure in Wales have been achieved and the prospects for local government expenditure in the future.
I have to make the point that, despite all the assertions to the contrary, local authority current expenditure in Wales has certainly not been slashed. On the contrary, it has grown faster than the increase in costs in the economy as a whole.
I do not under-estimate the problems that local authorities face in trying to meet the many demands made on them. They have difficult choices to make. I acknowledge as well that many authorities in Wales have made considerable efforts to contain their spending. Although some authorities are overspending against targets, the general picture taking all local authorities in Wales together is one of current expenditure now broadly under control. I hope that we can build on this and continue to release resources for capital expenditure because of the relatively good performance on current account. Clearly local authorities, if they are to achieve that objective, must continue a vigorous search for improvements in efficiency, effectiveness and economy.
In circumstances where additional resources are not available, authorities are under an obligation continually to examine in a critical and searching way the services they provide, and to check whether the pattern of services developed in the past continues to be appropriate to present and anticipated conditions. This must involve authorities in a willingness to consider alternative ways of providing services, not least through utilising the competitive power of private enterprise.
A few authorities have avoided taking the hard decisions that are necessary and have taken the easy way out, using special funds to offset against expenditure—a method sometimes known as the creative accounting route. Using special funds in this way, of course, reduces an authority's total expenditure which counts against its expenditure target, but it is only a cosmetic adjustment. The use of these special funds only puts off the day when difficult decisions about expenditure have to be taken.
Dyfed is an example of an authority now facing unnecessarily severe difficulties because it has followed
426
such a course and deferred necessary changes over a number of years. Individual schools in Dyfed now face constraints in resources and in some cases inadequate capitation because, during the period in which school numbers were falling by 5,000, the necessary rationalisation of services was not tackled and teacher numbers were actually allowed to increase. Expenditure on education in current price terms has varied very little in the county over seven or eight years of falling school rolls and if individual schools now find themselves short of resources it can only be because Dyfed has been putting off the necessary changes that would make the most effective use of its resources.
Mr. Geraint Howells: Is the Secretary of State saying that the education authority should have closed more small local schools than it has in the past four or five years?
Mr. Edwards: I am saying that, if there are 5,000 fewer pupils, about the same amount of money in real terms to spend and a capitation problem for individual schools, the authority should be making changes in the structure over a period of years to adjust to the new pattern. If it fails to do that, it will face quite unnecessary problems. Of course it will involve closing some very small village schools. In the part of Dyfed where I live, one school is down to 10 pupils. When pupil numbers decline very fast, there comes a moment when the education authority faces inevitable decisions about changing the pattern of education.
It cannot be argued that Dyfed has been particularly short of total resources. Its target per head is below that of super-sparse Powys, which has the same problem of village schools or the geographically difficult county of Gwynedd, which also has the problem of rural schools, but it is nearly 8 per cent. higher than that of Northumberland, 9 per cent. higher than that of Cumbria and 14 per cent. higher than the figures for north Yorkshire and Cornwall. Its target this year is 4·6 per cent. higher than its reported adjusted budget for 1984–85, so it cannot be said that Dyfed is a county starved of resources and the authority must take at least some share of responsibility for not having faced the necessary changes in the patterns of education.
Mr. Alex Carlile: As the Secretary of State has now admitted what we all knew already—that he is in favour of closing very small schools—will he tell us what he regards as a very small school and which schools we should expect to be closed? Will he also give a commitment that in future when small schools are closed he will ensure that money is made available to pay for transport to the alternative schools, as that is not the case at the moment?
Mr. Edwards: Clearly there comes a point at which local education authorities must balance the choices before them — maintaining very small schools, changing the pattern of education or having inadequate capitation in existing schools. The authority must make those choices in the light of the situation that it faces. It must decide whether it wishes to allocate the available resources to transport or to maintaining the existing school premises.
With the aim of helping authorities in their forward planning and to avoid this kind of situation repeating itself, I have issued indicative expenditure targets for authorities

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for 1986–87 and 1987–88. These figures should provide helpful guidance at the individual authority level. In aggregate, they show that on average the cost reduction sought by 1987–88 is about 2 per cent. That would bring current expenditure back to the level reached in 1979–80. Authorities spending at or below target will have an easier task than others in securing these reductions.
If 1985–86 budgets show that authorities, both individually and collectively, are on course to spend in line with the Government's expenditure plans, I will be prepared to consider, with the local authority associations, whether an alternative means of containing expenditure and encouraging moderate rate increases is possible for future years, rather than continuing with the present regime of individual authority expenditure targets and grant holdback penalties.
I have made no secret of my hope that it will be possible to remove individual targets from the system. Notwithstanding that, no one should doubt my determination to retain guidance figures if it was likely that, if we abandoned them, expenditure would exceed our plans and one or two irresponsible authorities would be enabled to act in such a way that they unduly penalised others.
I turn now to the details of the 1985–86 settlement. Any unbiased observer would agree that the settlement is fair. Indeed, the Welsh office of the Association of District Councils goes a long way towards saying so in the document issued to hon. Members. After allowing for the abolition of the national insurance surcharge on local authority employers from next April and the greater role of the Manpower Services Commission in particular areas of further education, total relevant expenditure, at £1,514 million, is about 5 per cent. more than authorities' budgets for the current year. Within this, current expenditure is about £46 million, around 3·5 per cent. higher.
Aggregate Exchequer grant, at just over £1,014 million, is almost £50 million or 5 per cent. higher than the amount that authorities have included in their budgets for the present year, after once again making due allowance for the abolition of NIS and the MSC-related changes next year. It is the increase in the amount of grant from that assumed by local authorities in the current year that is the key element when councils consider what rate or precept they need to levy next year.
For the individual authority expenditure targets, I have retained the basic method used in previous years, although I have increased the weight given to GRE. As in previous years, I have tried to balance the need to give the maximum increase to low-spending authorities, against the need to provide higher-spending authorities with realistic expenditure targets that it would be possible for them to achieve. Thus, no authority has an increase in current expenditure of less than 2 per cent. or, generally, of more than 4 per cent., although authorities spending at or below target also have a 0·5 per cent. "bonus". In other words, a good number of authorities have been offered a 4·5 per cent. increase in current expenditure, which is in line with prospective inflation.
Deciding what the upper and lower limits should be involves difficult judgments. There is, of course, no way of satisfying everyone, but experience this year, when 31 of the 45 authorities have budgeted to meet their expenditure targets, suggests that we are not likely to be far out in our judgment.
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The grant-withholding penalties have been increased for 1985–86, and at the same time the limit on grant holdback for low rateable resource authorities has been slackened. I make no apologies for these tougher measures. If an authority is an overspender in a particular year then, all other things being equal, it must be rating for the resources needed to cover the amount of grant withheld. If grant-withholding penalties were not increased, the incentive to such authorities to reduce expenditure or at least ensure that it is not increased in the coming year would be that much weaker. Authorities spending at or below target continue to be completely exempt from both grant holdback and close-ending. Such authorities have a good degree of grant certainty. and that is a very important aspect of the present grant arrangement in Wales.
Mr. D. E. Thomas: One matter of great importance to my own constituency is the supplementary grant for national parks. How did the right hon. Gentleman arrive at the figure of £2·7 million in respect of this expenditure?
Mr. Edwards: The amount that we have allocated to the parks this year is generous and above the average that has been allocated elsewhere. Perhaps I might respond to the hon. Gentleman's question in more detail later.
I should like to say something about rates. In recent years, Welsh authorities generally have kept their rate increases down, although there have, on occasions, been glaring exceptions. Between 1981–82, which was the first year of the separate Welsh rate support grant settlement, and the present year, the average general rate poundage in Wales has increased by 12·3 per cent. whereas the rate of inflation for the same period, as measured by the GDP deflator, is somewhat more at 16·6 per cent. Notwithstanding this record, Opposition Members have consistently predicted average rate increases that are very much higher than, in the event, they have turned out to be. The indications that I have previously given of likely rate increases have turned out to be pretty accurate, and much more in line with what has happened than what the Opposition suggested.
As to next year, I said in December that with an increase in grant and relevant expenditure of about 5 per cent. over this year's adjusted budgets, and the continued moderation of the great majority of authorities, it should be within their power to keep rates down to levels generally comparable with inflation. Indeed, the House will have noted from an answer that I gave on Monday to my hon. Friend the Member for Brecon and Radnor (Mr. Hooson), that if, in 1985–86, every authority were to spend in line with its expenditure target and apply, where it is able to do so, the same amount of balances as in the current year, the all-Wales average rate increase would be about 3 per cent.
Of course, there will be variations around the average. Indeed, rate reductions are possible in some authorities, particularly in the heavily rated county areas of Mid and West Glamorgan. There could well be increases above the level of inflation in other authorities, especially cases such as Dyfed where, as I have said, special funds have been applied in the past artificially to reduce total expenditure, and where such funds are no longer available. The general picture should be one of an average rate increase below the level of inflation, and I see no reason why I should not be reporting that to the House later in the year.
Mr. Allan Rogers: Would the right hon. Gentleman like to outline, for the people of Wales, what effect his prescription will have on services that are provided for them rather than indulge in the money juggling to which his party is so accustomed?
Mr. Edwards: If the hon. Gentleman had been listening, he would have heard that local authorities are this year getting rather more than the rate of inflation. In setting out the targets and the reasonable expectations for rates that I have given, there is no reason to suggest that there should be such cuts in services as he envisages.
I repeat what I said when I announced the details of the settlement in December. I regard the settlement as very fair. That this is so reflects to an extent the restraint which has been exercised this year by most Welsh authorities. There need be no slashing cuts or horrendous reductions in services if authorities generally continue to act responsibly. They can maintain and improve key services and offer us a route away from expenditure targets. Not least important, the settlement offers the prospect of rate increases which, on average, should be below the likely level of inflation. That was never in prospect under the Labour Government. I commend my proposals for the 1985–86 Welsh rate support grant settlement to the House.
10.33 pm
Mr. Barry Jones: The Secretary of State confessed to a blunder with regard to some of the inaccuracies in the report, and he is contrite. When the Welsh local authorities exceed their targets, the full majesty of the Secretary of State's penalty system crushes them. Welsh local authorities pay far too heavily for their errors on targets. I hope the right hon. Gentleman has not vented his spleen for this error upon his officials, because they operate a system of great complexity. Local authorities have consistently warned him of this. Surely with this system he is straining to the limit a Department which may be insufficiently staffed.
When I was thinking about how the error happened, I came across a press release entitled "Minister to meet brewers" which said that the Minister of State, Welsh Office would tour the Whitbread brewery in Gwent. It further said:
"He will also discuss the brewing industry's campaign for liberalisation of the licensing laws."
Of course, the Minister of State is a very sober man, but we are perplexed as to how the error happened.
The right hon. Gentleman paid tribute to Welsh local authorities for restraining their expenditure. Nevertheless, an extremely harsh grant penalty regime has been introduced. The grant holdback scheme is to be twice as severe. The overall rate of Government grant is to be cut. The Government continue the policy of transferring the burden from the taxpayer to the ratepayer. Our local authorities are anxious about the allowances that may be made in next year's settlement with regard to the effect of pay awards. Some awards for last year, I believe, have still to be settled.
In regard to penalties, the right hon. Gentleman referred to the holdback limiter. To sharpen further the effect of penalties he has proposed to halve what is described as the limiter. As the House knows, this device modifies the penalty system for low resource authorities. It helps them because they need help. I have calculated that Mid-Glamorgan is one of the most disadvantaged
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local authorities in Wales. Its average rateable value is very low. Its share of grant-related expenditure has gone down. The authority is discontented. This initiative by the right hon. Gentleman will not help local authorities with economic and social problems such as Mid-Glamorgan has to contend with.
The Welsh districts have a good spending record. Only two overspent their targets in the last year. They seek stability. They are concerned at the large variations in targets and in grant-related expenditure figures. I ask the right hon. Gentleman to justify neighbouring authorities having such large differences in grant-related expenditure figures. I give as an example the county of Dyfed. South Pembrokeshire has an increase of 19·7 per cent. in grant-related expenditure, whereas neigbouring Carmarthen has only 2·8 per cent. increase. Again, I ask the right hon. Gentleman to justify neighbouring authorities having such differences in targets. In Gwent, Blaenau Gwent has a 19·2 per cent. increase, but Torfaen has a 10·5 per cent. decrease.
I also ask the right hon. Gentleman to commit himself to announce his intention to remove penalties and targets from the Welsh scene in 1986–87. There is no record in Wales of spendthrift, profligate local authorities. They do not deserve harsh treatment. They face major economic and social problems. Our councils have to tackle those problems. It is against this background that local government in Wales displays restrained responsibility. The councils are not irresponsible.
With regard to the quality of services in the counties, the Government have had five years in office, and this settlement and settlements preceding it have had an injurious effect on the quality of services provided by the shire counties. It is not simply a matter of social services being cut back; it is worse. Social service departments cannot expand to meet increasing demands caused by high unemployment and the pressure on the social fabric of our communities.
There is now demoralisation and bitterness. The shire counties find it increasingly difficult to meet their requirements. Having made a series of visits to authorities in north and south Wales, I can state categorically that as quangos such as the Arts Council and the Wales Tourist Board face financial problems, they look to the shire counties to compensate their central expenditure. It is not surprising that tensions have risen.
It is no exaggeration to say that councillors and officers are demoralised by the Government's financial policy towards local government in Wales. It is not a soft option to transfer the cost to ratepayers when the economy is so depressed. The prospect is that there will be increasing bitterness between the elected councils and the electorate. Central Government's policy introduces tension into the processes of local government.
It is perhaps in education that the counties face the most severe pressure. It is there that the greatest anxieties lie. I believe the right hon. Gentleman to understand that. Hence, his defensive series of remarks about the local education authority in his own county of Dyfed.
The Welsh counties tell me that they expect reductions in primary and secondary school numbers, in the number of temporary teachers, in capitation allowances, and in school swimming facilities. It is expected that the cost of school meals will go up; that the loyal army of school meals attendants will have lesser, revised terms of

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contract; that adult evening classes will be more costly; and that further education establishments will have to wait for the equipment needed to teach the new technology.
To make my point, I wish briefly to quote from an assessment by Her Majesty's Inspectorate — not a politically biased organisation — of the impact of financial stringency on education in Wales. under the heading "Premises", it states:
"this continues to be a cause of considerable concern in a majority of LEAs … The interval between redecoration is lengthening … The net effect is a slow but persistent decline in the quality of the learning environment".
It continues:
"The replacement of damaged and broken furniture is unsatisfactory in many schools … Replacement tends to be piecemeal and in small quantities. The effect is further deterioration in pupils' general learning environment".
Under the heading "Capitation", the report says:
"the replacement of worn and outdated stock is being postponed … pupils' learning experiences are impoverished as a result".
It adds, in my view humiliatingly:
"As textbooks wear out there is increasing dependence on worksheets … Parents continue to make a substantial contribution through school funds to the purchase of a wide range of equipment and materials. In only a minority of schools are parental contributions any longer restricted to the purchase of additional rather than essential items. In some schools the sums contributed are very large, in many cases they are equivalent to a substantial proportion of the schools' capitation and they actually exceed it in some cases."
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This revealing document points a finger at the policy of the Department and the Government. It adds:
"the drab appearance of many buildings does little to enhance the learning of pupils in schools where pressure on resources has already led to some impoverishment of experience."
This settlement has missed a golden chance to quicken the pace of the economy and to tackle unemployment. If the Treasury had released its brutal hold on local government finance, we might now be planning to tackle rotten housing, the still awesome problems of environmental dereliction and the stubborn, long-term unemployment totals in Wales.
Would not it be better to fund our local councils more generously than to ladle out tax cuts to the better off? We could get our construction workers off the dole by a programme of house building and environmental renewal. We could better prepare the boys and girls in our schools for the challenge of the high-tech revolution. Even at this late stage, I urge the Government to think again because I believe that the Welsh people deserve a much better deal.
Several Hon. Members rose—
Mr. Deputy Speaker (Mr. Harold Walker): Order. There is but an hour's debating time left and I can see about 25 Welsh hon. Members, most of whom seem to want to take part in the debate. If many of them are not to be disappointed, speeches should be brief.
10.46 pm
Mr. Keith Raffan: In yesterday's debate on unemployment the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) said:
"To the Opposition, a reduction in unemployment is an objective towards which every aspect of economic policy should be directed."—[Official Report, 15 january 1985; Vol 71, c. 197.]
If Opposition Members are true to that, they should welcome this settlement wholeheartedly. It is not only fair, representing as it does a 5 per cent. increase in expenditure grant, more than inflation; it is more much more than that. It will help keep the average rate increase below the inflation rate. Surely Opposition Members can welcome that. Surely they must welcome it if they are true to what the shadow Chancellor said.
Mr. Alex Carlile: In welcoming the settlement wholeheartedly, does the hon. Gentleman welcome Delyn district council facing a target reduction of 5·6 per cent.? Does he welcome all the cuts in services that will occur in his district as a result of the settlement?
Mr. Raffan: I am delighted to inform the hon. and learned Gentleman about my constituency. I spoke to the chief executive of Delyn borough council this afternoon and I can tell the hon. and learned Gentleman that no such cuts are expected. If he waits, he will be pleasantly surprised by the rate that is set for Delyn. I shall let him know when it is set. I have a good idea what it will be. No such cuts in services will be necessary. The hon. and learned Gentleman should concentrate on his own constituency instead of interfering in mine.
Opposition Members blithely speak about Britain being reduced to a one-commodity economy. They must therefore realise the importance of keeping local government expenditure under control so as not to increase the rate burden on industry. If we let local government spending rip, dramatic rate rises will greatly increase industry's costs. Indeed, industry's costs will soar. That will lead to either of two alternatives. Industry will have to reduce costs, including declaring redundancies — Opposition Members do not want that—or it will have to increase the price of products, which will give a further edge to foreign competition, increase imports and create jobs in foreign countries. Opposition Members do not want that.
I can do no better than to quote my right hon. Friend the Member for Old Bexley and Sidcup (Mr. Heath), who said yesterday:
"That must be plain even to the simplest mind."—[Official Report, 15 January 1985; Vol. 71, c. 227.]
The labour party has made clear its desire for direct job creation. Surely it wants to avoid indirect job destruction, but that is exactly what would result from allowing local government spending to rip.
We do not really need the Opposition tonight because we know their reaction to this rate support grant settlement or to any rate support grant settlement. All that we need is a tape recording of their response to last year's settlement, or to the settlement the year before. Out come the same insipid clichés—"harsh treatment", "draconian measures", "slashing cuts in services", "putting local authorities under intolerable strain". They show scant respect for the English language, let alone the hard evidence. The Opposition always prefer wild rhetoric to the hard evidence.
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The Welsh office of the Association of District Councils has caught that infectious disease. In its submission on the settlement it said:
"Unless certain councils are able to make substantial cuts in service costs … they will have to make substantial increases in their part of next year's rate bills."
No doubt many county councils would take a similar view, but there is a real alternative — reordering priorities, streamlining administration and concentrating on statutory obligations.
We all know that the last people administrators will cut are themselves. That was brought out clearly in the Audit Commission's profile on Clywd county council for 1984–85. The section on staffing shows that as at March 1984 the number in the chief executive, legal and secretarial departments was 176; 108 more — 250 per cent. more than the average number of staff in similar departments in directly comparable authorities.
The architectural department numbered 163; 72 more, or more than 100 per cent. more than the same department in directly comparable authorities. No private architectural practice would survive financially relating that level of staff to the level of work undertaken. The capital projects that are the responsibility of Clwyd's architectural department average a value of between £6 million and £6·5 million. A well-known Liverpool architectural practice undertakes capital projects of £30 million with just half the staff of Clwyd—just 80 people.
Clwyd county council must get its priorities right. What does it think it is doing, buying and trying to develop Bodelwyddan castle as a tourist centre and a palace for culture? The educational part, TVEI, could easily be placed elsewhere. Why does it have to contribute £2,000 towards a sculpture in Mold bus station? It is not by a Welshman, the hon. Member for Rhondda (Mr. Rogers) will be sad to hear. It is not even by a Scotsman—it is by somebody from Sussex.
The council has no need for a dramatic cut in its services provided that it concentrates on its statutory obligations and streamlines its administration. To that end, earlier this year I and leading Conservative county councillors called for independent management consultants to be brought into the county council. The officers strongly opposed that, without giving any reason. If, as they said, their administration was devoid of waste and efficient, they should surely have welcomed independent management consultants with open arms, because they could have vindicated them.
The recent controversy over the education budget confirms my view that the sooner independent management consultants go into shire hall, the better. I am glad that I am supported in that view by the teachers union, NAS/UWT. I was also delighted to hear that at the education committee meeting on Tuesday 13 November Councillor Broderick—the vice chairman of the policy, finance and resources committee, and a Labour member — called for a detailed examination of Clwyd's base budget, something which I and Conservative county councillors have been continually calling for.
If Clwyd needs an excellent example of how to manage its affairs, it need look no further than from Mold to Flint. Delyn borough council — as the hon. and learned Member for Montgomery (Mr. Carlile) will be glad to hear —is currently examining its loss-making activities with

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a view to reducing the burden that they impose on the rates. It intends doing that by more effective management of resources and by trying to generate fresh income.
Many will watch with interest when the two authorities come to set their respective rates. We can then judge which council—in the words of the Audit Commission—has
"made proper arrangements for securing economy, efficiency and effectiveness in its use of resources."
10.53 pm
Mr. Donald Coleman: Having listened to the hon. Member for Delyn (Mr. Raffan) denigrate the county that he represents, I wonder why he ever sought to represent it in this House.
Although we are discussing the Welsh RSG settlement for 1985–86, we cannot get away from the central fact of the Government's strategy for expenditure by local authorities which has been set out by the Association of Metropolitan Authorities in its briefing to hon. Members in respect of RSG settlements in these words:
"The RSG Report maintains that the Government's expenditure figures should enable the Government's policies for individual services to be maintained."
However, those figures imply a massive cut from the level of services provided by local authorities in 1984–85. For current expenditure—wages, goods and services—a cash reduction of 0·5 per cent. is demanded, which represents a real cut of £700 million.
All debates on matters affecting rate support grant, concerning England, Scotland or Wales, must be approached from a common standpoint — that the Government are determined to interfere in the activities of those who have a direct responsibility towards those who elected them. The public must accept that if the services provided by local authorities are cut, those cuts are the responsibility of the Secretary of State for Wales and his Cabinet colleagues. It is no use the Government trying to take it out on local councillors. The responsibility lies squarely on the occupants of the Treasury Bench.
The RSG settlement for Wales fails to take account of the need for economic regeneration in all parts of the Principality, the increase in total expenditure being only 5·4 per cent., which is 4·5 per cent. for current costs. The shortfall of 1·5 per cent. in the 1984–85 RSG provision has not been taken into account in the figure for 1985–86. It is reasonable to assume that the right hon. Gentleman, who has praised local authorities for their efforts in cutting costs in the last five years, should have taken account of that.
The Chancellor of the Exchequer seems glued to the idea of making cuts in income tax for the better off sections of society. If there is room for some relief, it should be used to spread the burden more widely. One way to achieve that would be to give a better deal to local communities. In the latest RSG settlement we are told that there will be a reduction in the aggregate Exchequer grant of 2·2 per cent., from 69·2 to 67 per cent., which is the equivalent of an average rate increase in Wales of 11p in the pound, or 6·5 per cent.
The block grant, which is the main rate support for Welsh local authorities, has been increased by only £12 million, or 1·5 per cent., which, when measured against the increase in the total expenditure provision, is a reduction of £30 million, or 3·5 per cent. — the equivalent of a 6 per cent. increase in rates in Wales for 1985–86.
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So persuasive have the Government been in influencing local government expenditure, and so great is their confidence in that influence, that they have resorted to setting targets enforceable by penalties. Those penalties have been retained in this RSG settlement. Indeed, they have been increased, from 40 per cent. and 90 per cent. of excess expenditure in 1984–85 to an average of 150 per cent. in 1985–86—namely 100 per cent. for the first 1 per cent. excess, 200 per cent. for the next 1 per cent. and 150 per cent. thereafter—while the limiter on the effect of penalties for low rateable value authorities has been halved. As my hon. Friend the Member for Alyn and Deeside (Mr. Jones) said, that is resented by local authorities.
There is much more that could be said on this subject, but the time available to us in the debate is limited. In fairness to my hon. Friends who wish to make contributions, I shall bring my remarks to a conclusion. In this matter, as in so many others for which he has responsibility in Wales, the Secretary of State is failing Wales and the Welsh people. How much longer have we to wait before he goes?
11 pm
Mr. Ian Grist: Little would one have thought from the speech of the hon. Member for Neath (Mr. Coleman) that after deducting the national insurance surcharge from the Manpower Services Commission's contributions to the higher education budget, the grant has been increased by about 5 per cent. I do not think that he has spotted that, although it was referred to by my right hon. Friend the Secretary of State at the outset of his remarks.
It is worth looking back to last year's debate on the same issue, which continued for rather longer than, thankfully, this one will. Labour Members gave terrible warnings to the people of Wales during that debate of what would happen in the following 12 months. Most of their predictions fell flat on their faces. Rates did not rise to the extent that we were promised and old people's homes were not closed as they threatened. People were not left without a meals-on-wheels service, although we were told that that would happen. None of these things occurred. However, we were not warned of the devastating effect on the economy of Wales, especially south Wales, of the miners' strike, which is ardently supported by most Labour Members. The strike has damaged local life and the capacity of the British community to raise finance, because it has deducted 1 per cent. from the growth of the nation in the past 12 months. That 1 per cent. of growth could have been used to fund the causes which we all want to support—
Mr. Ron Davies: Can you advise me, Mr. Deputy Speaker, whether the comments that the hon. Gentleman is making on the miners strike—
Mr. Grist: Is this a point of order, or is it an intervention?
Mr. Deputy Speaker (Mr. Harold Walker): Order. Mr. Grist.
Mr. Grist: The hon. Member for Caerphilly (Mr. Davies) obviously has a sore conscience on this issue, and it is one that he well deserves.
The settlement that we are debating will be a major contributor to reducing inflation and inflationary

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expectations. That will be its major contribution to the future of the Welsh economy and the people of Wales. We must reject the idea that 5 per cent. is a reasonable rate of inflation. At 5 per cent., the value of the pound halves in 14 years. If inflation is 10 per cent., its value will be halved in seven years. We must realise that 5 per cent. is a sharp level of inflation and one that a few years ago we would have considered a disgrace. We must reject the expectation of high inflation and the consequent costs. If we can hold down inflation to 3 per cent. this year, 1 per cent. next year and a flat rate the year after, so much the better for pay claims, the attraction of Wales to foreign industry and our own industry and the support of jobs in our constituencies.
I hope that my right hon. Friend the Secretary of State will be pleased to hear that the rate poundage in Cardiff is not likely to rise by the 5·5 per cent. which his figures suggest. We might very well undershoot 5·5 per cent., and Cardiff is one of the areas that is predicted to have an inflation rate that is slightly above the average. If the rate poundage does not rise by the percentage that is predicted, so much the better for the capital of Wales.
The hon. Member for Alyn and Deeside (Mr. Jones) was remarkably moderate in his speech. He did not belch the flames that he tried on us last year. Unfortunately, he picked, as did the hon. and learned Member for Montgomery (Mr. Carlile), on the education budget. That budget must take account of problems associated with demographic change. We all know of the figures showing that pupil-teacher ratios have been improving, despite decreases in the number of teachers. Studies should show also that movements in population and demographic shifts must lead to changes. Every hon. Member believes that, unless he is a populist who simply wants to gain every available vote. Everywhere the opening of new schools and the closing of old schools helps us to recognise population movements and structure changes. That process must be carried on.
Because elections will be held next year, some authorities and all political parties are sitting on their hands. I speak as a parent with children in local schools, and I believe that, unless our children have fairer opportunities with a better spread of subjects, some schools, even in the cities, will have to merge. The savings can be considerable, and we must examine that aspect.
Some of the difficulties in schools involving books, pens and paper have been the result of the National Union of Teachers urging higher pay awards than provided for in the original budgets. It is clear from the negotiating position of all parties involved in considering teachers' pay that extra pay above last year's 4·5 per cent. guideline would come straight from the education budgets. That money would otherwise go towards assisting pupils in schools. The penalty must be paid for union intransigence, supported by the Opposition, who always envisage a large political buck being gained from supporting union pay demands. If we can keep down the demands of populists and can lower inflationary expectations — part of the effect will show up in pay rises—so much the better for local authorities, the people they serve, the economy and jobs for our young people.
11.6 pm
Mr. Alex Carlile: I remind the Secretary of State, of something said in 1980, at paragraph 103 of the report on the role of the Welsh Office by the Select Committee on Welsh Affairs. The Committee said:
"Our conclusion at the end of the inquiry is that, notwithstanding the actions taken by Government, there exists in Wales not a jobs gap but a jobs chasm into which the economic and social structures of large parts of Wales are in danger of falling. Only a sustained programme of Government assistance to the Principality can prevent this."
That Committee had a majority of Conservative Members. There is a strong feeling in Wales that that advice, based on long and considered evidence, has been totally ignored and that the Secretary of State and his colleagues, while they swan around opening showpieces, do not look at what is really happening—in housing, transport, education, industry, employment, agriculture and items such as the collection of refuse, water and sewerage. They just do not know what is going on.
It is a disgrace to hear the Secretary of State for Wales supported tonight by the hon. Member for Delyn (Mr. Raffan), whose constituency has been so severely damaged by this settlement. Furthermore, it is apparent that the Welsh Office is not averse to being subtly disingenuous about what is happening in Wales. In answer to a question that I asked some days ago about the proposed development of pre-school and nursery education in Wales, the Minister of State said:
"Provision for under-fives by local education authorities in Wales is at a high level, some 85 per cent. of 3 and 4 year-olds being catered for."
So far, so good. We are proud of that record. But the hon. Gentleman went on to state:
"and Government policy assumes that provision will continue at this level."—[Official Report, 14 January 1985; Vol. 71, c. 23.]
It is absolute humbug to suggest that the Government really believe for one moment that the provision for nursery education could continue at that level with this settlement in mind.
The Powys director of education, in writing to parents who have complained to him about the declining standards in schools and nursery education, is telling them openly that the quality of education in Powys is bound to suffer because of the financial stringencies placed upon it.
I do not believe that the Welsh Office or the Secretary of State could justifiably accuse the Powys education authority of being profligate or of doing anything other than trying to husband its money well and providing a reasonable standard of education. That responsible, nonpolitical education authority is telling the truth about what is happening to education in Wales as a result of this settlement. Standards are being made to fall.
District councils face receiving about 17 million in real terms less than the total of the Welsh district councils' block grant in 1983–84. In real terms total targets have been reduced by 3 per cent. within the past two years. Some of the variations between Welsh local authorities are causing confusion, consternation and a feeling of rank injustice as between one local authority and another. The bottom line of the story is that we have seen a continuous regression of services in Wales since 1981 because of the Government's failure to recognise the conclusion correctly reached by the Select Committee in 1980 to which I referred earlier.

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A large part of the problem has arisen from the Welsh Office's reliance on grant-related expenditure assessments as a measure of need. GRE is no longer, if it ever was, a realistic measure of need. It is interesting to note that, while the Government will latch on to anything that the Audit Commission says which enables them to make cuts, they have conveniently sought to avoid the Audit Commission's expressed doubts as to the method of calculation of GRE. The result of the way in which GRE is calculated is that local communities have lost the right to choose through local democracy, as represented in their councils, the balance that they wish to choose between rates and services.
We no longer have local democracy in Wales because of the parameters which are placed upon county and district councils by the Welsh Office and this settlement. In 1980, the Select Committee feared for the state of Wales then. Today, nearly five years later, we must fear seriously for what will be the state of Wales at the end of this Government's term of office.
Surely the time must come soon—though one doubts it with this Secretary of State—when there will be a radical review of the Welsh economy, and when local government will be recognised as one of the realistic means through which the Welsh economy can be revitalised. Surely the time will come when the Welsh Office will be forced to recognise that the limping Welsh economy will have to be regenerated by increased local government support.
We could have debated many issues tonight, but time does not permit us to do so, because many other hon. Members wish to speak. I wished to highlight the truly desperate problem of education. It is high time that we heard the Conservative party confess honestly that it means by its policies, as surely it does, to reduce the quality of education in Wales so that it becomes a second-rate system.
11.13 pm
Mr. Peter Hubbard-Miles: I wish to highlight the subjects that the hon. Member for Alyn and Deeside (Mr. Jones) highlighted. He was correct to highlight education, which is by far the largest element in local authority budgets. He was right to single out Mid-Glamorgan, which is the largest shire county in Wales with the largest education budget. He was wrong in portraying Mid-Glamorgan as a county that is disadvantaged in its education budget and lacking in its resources, because Mid-Glamorgan only recently boasted about its expenditure on education, and pointed out that per head of population it spends 10 per cent. more than the average English and Welsh county spends on education. In certain fields it spends vastly more per head of population than the average English and Welsh authority. For example on nursery education it spends 250 per cent. more per head of population than the average English and Welsh county; on primary education it spends 38 per cent. more; on secondary education it spends 11 per cent. more. So the idea that Mid-Glamorgan education is somehow disadvantaged is absolute nonsense.
If Opposition Members are claiming that Mid-Glamorgan is disadvantaged, they are accusing Mid-Glamorgan of gross incompetence and mismanagement of its resources. That may well be the case but, far from being short of resources, in this year the Mid-Glamorgan county council has managed to find £668,000 out of its
440
educational budget for non-educational purposes — in other words, for supplying free school meals to the children of striking miners. That has been shrouded in the idea that it is for the children of disadvantaged parents, but I wonder whether the free school meals will continue to be provided for those people after the miners' strike is ended. It will be interesting to see whether Mid-Glamorgan continues providing its free meals for all disadvantaged children.
The hon. Member for Alyn and Deeside is somewhat optimistic in suggesting that in the future there will be no need to penalise counties for overspending, because Mid-Glamorgan county council is now deliberately intending to overspend in order to create a sort of mini-Liverpool situation in Wales; in fact, this year it is taking £3 million from its capital account to subsidise its revenue account, and has been warned by its chief officers over the past four years of the need to make reasonable economies in its budget to avoid a serious situation. Only in recent weeks it has been warned that unless it is prepared to accept certain cuts in its budget, next year it will face a very severe situation.
Therefore, far from being disadvantaged and far from not having resources, the Mid-Glamorgan county council's education budget has the resources, but of course it will continue to pretend that it does not have them.
11.17 pm
Mr. Ron Davies: May I first make it clear to the hon. Member for Bridgend (Mr. Hubbard-Miles) that Labour Members understand the problem that exists in Mid-Glamorgan. They understand the scale of deprivation and the problems that Mid-Glamorgan has to tackle as an education authority. The very fact that it spends more than the average means that it has greater needs than the average. That is the sole reason for that additional expenditure.
Let me assure the hon. Member for Bridgend that Labour Members do not want to see anyone starving. They do not want to see the children of miners starving. We regard it as a proper charge on the public purse that the children of striking miners should be prevented from the form of starvation that the hon. Gentleman wishes on them.
Dr. John Marek: It is really a question of representation. My hon. Friend has hit the nail on the head, because I have a press release from Clwyd county council which states:
"Mr. Raffan"—
the hon. Member for Delyn—
"in particular must know that making and repeating misleading statements does not disguise the real truth."
There we have it. Conservaative Members make misleading statements to disguise the privation in the Principality.
Mr. Davies: I welcome that point. With regard to misinterpretation, I should like to take issue with the Secretary of State because I believe that his statement today and his suggestions on Monday have done a disservice not only to the people of Wales but to local government in Wales. I noticed with interest that in the Western Mail on Tuesday this week he suggested that five of the six local authorities in Mid-Glamorgan would be able to reduce their rates. On Tuesday evening he had a dusty reply from the treasurer of Mid-Glamorgan. The South Wales Echo said:

441
"Mr. Ray Lacey, treasurer to Mid-Glamorgan county council, described the Secretary of State's announcement as a 'theoretical exercise which will only serve to confuse ratepayers … What Mr. Edwards does not know—and Mr. Edwards knows that he does not know—is the special circumstances in each local authority.
When the Secretary of State calls in aid independent assessors or objective judgments, perhaps he will accept the advice of the treasurer of the largest local authority in Wales.
With regard to the individual problems of our valley communities, I should like to draw the attention of the Secretary of State to the problem that we have in Rhymney valley. I remind him that between the two years from 1982–83 to 1984–85, the amount of rate support grant that the local authority received per 1,000 head of population fell from £66,750 to £57,000, a reduction in real terms in the amount of money received by that local authority. There was a marginal increase for the county authority. The grant rose from £264,000 to £268,000 over a three-year period, when no provision was made for inflation. Mid-Glamorgan is facing a crisis, which forced it at the end of last year to discontinue swimming instruction for young children. That is the nature of the society that the Secretary of State is creating for us in the valley communities in Mid-Glamorgan.
I should like to refer again to Rhymney valley, because I believe that the Secretary of State is misleading us. I refer him to the figure for 1984–85, the current year. He stated that the coming year's settlement for 1985–86 was good. He realises that it might be an easier settlement than the current year's settlement, but he knows that that settlement was the most punitive that we have seen in local government, certainly in the time that the right hon. Gentleman has been in that office down in Cardiff.
The expenditure in Rhymney valley during the current year will be about £8·417 million. The target set by the Secretary of State for next year, 1985–86, is £8·521 million — a marginal increase. However, if the right hon. Gentleman compares the expenditure that that local authority is likely to incur in 1985–86 on the basis of its expenditure in the current year, he will realise that there is a shortfall approaching £500,000. If the local authority attempts to meet that shortfall, if it goes 3 per cent., 4 per cent. or 5 per cent. over target, the right hon. Gentleman will take a further £500,000 of rate support grant away from it, thus forcing it into a crisis.
The Secretary of State may say that it is easy enough for the local authority to make adjustments, that it can trim a bit here and a bit there, but the fact is that it cannot do so, because local authorities have been forced to cut back time and again, year after year, by the successive settlements from the right hon. Gentleman. We are no longer cutting back on luxuries—we are cutting back on essentials. Therefore, the local authority in Rhymney valley, with 60 per cent. of expenditure on personnel and related matters, is forced to take the decision to sack people if it wishes to meet the targets. If it sacks people, it will achieve two things. It will increase the level of unemployment in our valley and it will mean that we have fewer services. That is the accusation that the Secretary of State has to answer.
I make one further accusation against the Secretary of State. The relationship between central and local government has been based on a contract that local
442
government's responsibility is to improve services and central Government's responsibility is to help local government to meet the bill. The Government have broken that contract, and the responsibility for that rests on the shoulders of the Secretary of State.
11.26 pm
Mr. Dafydd Wigley: District councils throughout Wales have an enormous problem arising from this settlement, which relates once again to the lack of finance to abide by the promises made for renovation grants for houses. People who will be waiting for another year, two years or three years can thank the Secretary of State for that.
Some councils such as the Dwyfor council in my constituency have enormous problems with capital allocation. To meet their statutory responsibilities, they will have to spend the entirety of their capital allocation on refuse disposal equipment, and they will have nothing left for anything else. That is the magnitude of the problem.
I want to concentrate on the situation facing the counties, particularly Gwynedd. I want to concentrate on the 10 years from 1974 to 1984. In this period, the gross expenditure of the county has increased by only 211 per cent. compared to an expenditure of almost 300 per cent. by central Government. In the same period, the grant from central Government has increased by only 177 per cent. and the ratepayer has been left with an increase of 319 per cent. That is the outcome of the Government's policies. The county has lost the equivalent in current money terms of £9 million in grants from central Government since 1974.
I want to put to the Secretary of State the point that I have put to him before—the unresolved issue of the continuing privations suffered by Gwynedd county council through the formula. The grant-related expenditure generated for Gwynedd is £97·1 million. The target for 1985–86 is only £94·4 million, so the target is £2·5 million less than the Welsh Office recognises to be Gwynedd's needs.
The Secretary of State has repeatedly defended this on the basis that, before he took office, the county did not maintain such a level of services as was shown by the GRE to be justified, so why should it sustain them now? But the Secretary of State knows very well why Gwynedd could not sustain that level of services: it simply did not have have the money. He knows that those services were needed. That is clear from the speeches that he and the hon. Member for Conwy (Mr. Roberts) made during the 1970s when they were in opposition. Gwynedd lost some £4 million between 1974 and 1978. The Secretary of State referred to this with regard to the cuts that were taking place in 1976. As the hon. Member for Pembroke, he said:
"In terms of social need and stress, problems are as severe in some Welsh counties as in some metropolitan districts. The rural areas have fared particularly badly. Dyfed and Gwynedd suffer from low incomes, poverty and high unemployment … They also suffer from sparsity of population and have to cater for an annual influx of tourists for which sufficient allowance is not made in the present formula. Yet these counties are among the worst sufferers under the system of distribution that the Government have imposed."
In other words, the Secretary of State at that stage recognised the need for greater expenditure on services in a county such as Gwynedd. But what did he do? When it came to the rates, he said:

443
"To many, this further imposition of rates will come as a final straw, and they will go out of business."—[Official Report, 22 December 1976; Vol. 923, c. 840–2.]
He fought hard against the increase of rates.
If one needs the services and one cannot have the increase in rates, there is only one logical conclusion: the money has to come from central grants. It is that logic that Gwynedd is putting back to the Secretary of State now. In order to get the money that is needed to sustain the services that he and the Government recognise as being necessary through the GRE, there must be a great contribution from central Government.
The hon. Member for Conwy repeated this plea in 1977. He implored the counties not to exceed the 10 per cent. ceiling in rate increases at that time because of the effect that it would have on other people. He said that
"even though that will probably mean cutting services to the bone"— [Official Report, 15 December 1977; Vol. 941, c. 1021.]
he wanted a reduction in rate increases. That is fair enough, but if these services are needed and the counties cannot get them from anywhere else, provision should be made for them from central Government money.
That could have been achieved this year if the 4 per cent. limit had not been applied to the increase in target from 1984–85 to 1985–86. Gwynedd could then have increased the £94 million to £96·2 million and been much closer to target. I implore the Secretary of State yet again to ensure in the next 12 months that the target and GREA for Gwynedd are the same so that we can achieve the services that we need.
11.29 pm
Mr. Roy Hughes: Having listened to the Secretary of State today, I tend to agree with the Welsh Office of the Association of District Councils that the settlement must be regarded as a lost opportunity to provide resources to revitalise the Welsh economy.
In the Secretary of State's handling of these matters the weakest invariably go to the wall. For instance, his favourite target is Mid-Glamorgan—an attitude in which he seems to be supported by the hon. Member for Bridgend (Mr. Hubbard-Miles)—which is probably the most deprived county in the whole of Great Britain, with astronomical unemployment figures, appalling housing which has affected life expectancy, an ageing population and social services strained to breaking point. With all those difficulties, the county might reasonably have expected a sympathetic hearing from the Government, but all that it gets are exhortations to cut the rates and threats of new and further penalties if it does not.
Thousands of disabled people are waiting for specialist conversion work on their homes, but Government cuts have left local authorities too short of money. In Newport alone more than 500 disabled people are now waiting for adaptations to their homes, ranging from stairlifts and bathroom conversions to ramps and handrails, but the cash is simply not available due to the Government's Scrooge-like attitude. That situation applies throughout Wales. It is no wonder that Mr. Joe Hennessy, secretary of the Wales Council for the Disabled, has written to the Secretary of State demanding urgent action.
Councillor Lloyd Turnbull, leader of Gwent county council, wrote to the Secretary of State on 10 January—I understand that the chief executive, Mr. Perry, has written in similar terms—complaining about the jiggery-pokery involving £4·6 million that the authority believes
444
is due to the county. Councillor Turnbull expressed surprise at the statement by the Secretary of State in December that, taking everything into consideration, rate increases should be about 4·5 per cent., as Gwent will actually receive less grant in cash terms in 1985–86 than it received in 1984–85. If the block grant is calculated at the same percentage as in 1984–85, however, the county would receive an additional £4·6 million. As that loss is equivalent to 10·5p in rate precept requirement, how can the council be expected to keep the rate increase down to 4·5 per cent. when services have already been cut to the bone?
The rate support grant provides the wherewithal for local government to carry out its essential functions in the community. Our local authorities realise that the Government are engaged in a cost-cutting exercise. Recently, for instance, in answer to a parliamentary question from my hon. Friend the Member for Alyn and Deeside (Mr. Jones), the Secretary of State was forced to admit that since 1981–82 the amount received by our local authorities in rate support grant had declined by £65·7 million. That financial stringency has posed all manner of problems for our local authorities, which have to provide and operate the essential services.
Criticism is no longer confined to Labour-controlled local authorities. Only last week Councillor Parker, leader of Monmouth district council, which is heavily dominated by the Conservatives, warned his own Government of a coming revolt among Conservative councils over what he called the horrendous situation in local government. He asked, "What the hell are the Welsh Office and the Government doing to us?" I have no wish to embellish those words. To do so would be to gild the lily.
Finally, I endorse the criticism of the Secretary of State's presentation of the settlement. The fact that a second document, amending the first, had to be circulated is almost without precedent. It adds to the failure of the Secretary of State in so many other areas. In the eyes of the people of Wales, the right hon. Gentleman stands condemned.
11.37 pm
Mr. Nicholas Edwards: The hon. Member for Meirionnydd Nant Conwy (Mr. Thomas) asked me about national park grant. National park supplementary grant has been increased by 5·25 per cent., and the overall level of accepted expenditure on which grant is paid has been increased by 6·8 per cent. in the current year.
The hon. Member for Caernarfon (Mr. Wigley) referred to Gwynedd. I have just written to him on the subject. I have pointed out that because of the problems to which he referred, Gwynedd, at £406 a head, has the fourth highest target of any authority in England or Wales. Its share of the Welsh rate support grant system has been increased, and it has been able to increase its current expenditure since 1981–82 by more than the rate of general inflation. Those are all signs that are moving towards meeting some of the problems of Gwynedd.
The hon. Members for Alyn and Deeside (Mr. Jones) and for Neath (Mr. Coleman) and the hon. and learned Member for Montgomery (Mr. Carlile) said a great deal about the contribution that local government could make to the economy and about the Welsh share of that contribution. If they argue that the settlement fails to take account of the need for economic regeneration, I am entitled to point out various facts. The settlement

445
represents a 5 per cent. increase in expenditure and grant above the expenditure rate. The target per head in Wales is 21 per cent. higher than the target per head in England, because of the problems of the Principality. The net capital provision per head is 50 per cent. higher than it is in England, because there is in Wales a better record of control of expenditure by local government in Wales. We are likly to produce average rate increases of not much more than the general level of inflation, and that will make a substantial and significant contribution to economic recovery.
Mr. Gwilym Jones: If I were to tell my right hon. Friend that the rate in Cardiff is likely to be the lowest in Wales, and possibly the lowest in Britain, would he agree that that is the best possible advertisement to encourage people to relocate there?
Mr. Edwards: Yes. My hon. Friend the Member for Cardiff, Central (Mr. Grist) made the same point. That is the real contribution that can be made to the recovery of the economy.
The hon. Member for Alyn and Deeside complained about rotten housing, but the Government of which he was a member spent £58 million on housing improvement in Wales in five years, whereas we spent £107 million in one year. His record is no basis on which to make such criticisms.
We have heard much about the problems of Mid-Glamorgan. Because those problems are understood and recognised, it has the third highest target per head in England and Wales. If it was setting out to tackle the problems that were described, it should not have increased its manpower by 1·8 per cent. since 1981.
We have heard many complaints about transferring the burden of supporting local government from the taxpayer to the ratepayer. However, I note that the Committee of Welsh District Councils does not dissent from the Government's policy of reducing the taxpayers' contribution, and I welcome that.
The hon. and learned Member for Montgomery and the hon. Member for Caerphilly (Mr. Davies) talked about education. I am entitled to tell the hon. and learned Member for Montgomery that, in primary education, expenditure per head in Powys has increased by more than 13 per cent. since 1979–80 and that expenditure on secondary pupils has increased by more than 11 per cent. during the same period. There has therefore been a substantial increase in expenditure in real terms in Powys. Exactly the same is true for Mid-Glamorgan. The hon. Member for Rhondda (Mr. Rogers) recently tabled a question asking for information about expenditure per head in the counties of Wales and I gave him the answer. Expenditure has increased in Mid-Glamorgan as well, and is now at its highest level ever.
Mr. Allan Rogers: If the Secretary of State wants to quote figures to the House, will he say on what basis the figures are calculated? Are they calculated on a 1979 basis, or on some other one?
Mr. Edwards: They are calculated on the basis on which the hon. Gentleman asked his parliamentary question. I answered that question. They are expressed in 1983–84 prices. Expenditure per head on primary school
446
pupils in 1979–80 was £639, and £788 in 1983–84. For secondary education it was £880 per pupil in 1979–80, and £979 in 1983–84. We should not therefore have all this nonsense about the devastation of education.
My hon. Friends the Members for Cardiff, Central and for Delyn (Mr. Raffan) rightly emphasised the importance of low rates to industrial recovery. My hon. Friend the Member for Delyn was criticised by the hon. Member for Neath for daring to make some critical comments about his county council and suggesting that it might call in consultants to improve efficiency. The hon. Member for Neath has an odd concept of the role of a Member of Parliament if he believes that his sole duty is to act as a mouthpiece for his county council.
The hon. Gentleman complained about interference with local government, but I think I am entitled to point out that the taxpayer still produces 67 per cent. of the cost of local government in Wales. Partly because of our low rateable values, and partly because of the good record of local government in Wales, that share has fallen by less than the reduction in England, where the contribution from the central taxpayer is 48·7 per cent. Once again that gives the lie to the allegation that in some way I or the Welsh Office have failed the people in Wales.
The Welsh Office of the Association of District Councils has admitted that this is a fair settlement. It is a good settlement, and I commend it to the House.
Question put:—
The House divided: Ayes 318, Noes 179.

Division No. 68]

[11.45 pm

AYES

Adley, Robert

Butterfill, John

Aitken, Jonathan

Carlisle, John (N Luton)

Alexander, Richard

Carlisle, Kenneth (Lincoln)

Amess, David

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

Ancram, Michael

Carttiss, Michael

Arnold, Tom

Cash, William

Ashby, David

Chalker, Mrs Lynda

Aspinwall, Jack

Channon, Rt Hon Paul

Atkins, Robert (South Ribble)

Chapman, Sydney

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

Chope, Christopher

Baker, Nicholas (N Dorset)

Churchill, W. S.

Baldry, Tony

Clark, Dr Michael (Rochford)

Banks, Robert (Harrogate)

Clark, Sir W. (Croydon S)

Batiste, Spencer

Clarke, Rt Hon K. (Rushcliffe)

Bellingham, Henry

Cockeram, Eric

Bendall, Vivian

Colvin, Michael

Bevan, David Gilroy

Conway, Derek

Biffen, Rt Hon John

Cope, John

Blackburn, John

Corrie, John

Blaker, Rt Hon Sir Peter

Couchman, James

Body, Richard

Cranborne, Viscount

Bonsor, Sir Nicholas

Crouch, David

Bottomley, Peter

Currie, Mrs Edwina

Bottomley, Mrs Virginia

Dickens, Geoffrey

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

Dorrell, Stephen

Bowden, Gerald (Dulwich)

Douglas-Hamilton, Lord J.

Boyson, Dr Rhodes

Dover, Den

Braine, Rt Hon Sir Bernard

Dunn, Robert

Brandon-Bravo, Martin

Durant, Tony

Bright, Graham

Edwards, Rt Hon N. (P'broke)

Brinton, Tim

Eggar, Tim

Brittan, Rt Hon Leon

Emery, Sir Peter

Brooke, Hon Peter

Evennett, David

Brown, M. (Brigg & Cl'thpes)

Eyre, Sir Reginald

Browne, John

Fairbairn, Nicholas

Bruinvels, Peter

Fallon, Michael

Bryan, Sir Paul

Farr, Sir John

Bulmer, Esmond

Favell, Anthony

Burt, Alistair

Fenner, Mrs Peggy

Butcher, John

Finsberg, Sir Geoffrey

Butler, Hon Adam

Fletcher, Alexander

447

Fookes, Miss Janet

Latham, Michael

Forman, Nigel

Lawler, Geoffrey

Forsyth, Michael (Stirling)

Lawrence, Ivan

Forth, Eric

Lee, John (Pendle)

Fowler, Rt Hon Norman

Leigh, Edward (Gainsbor'gh)

Fox, Marcus

Lennox-Boyd, Hon Mark

Franks, Cecil

Lester, Jim

Fraser, Peter (Angus East)

Lewis, Sir Kenneth (Stamf'd)

Freeman, Roger

Lightbown, David

Gale, Roger

Lilley, Peter

Galley, Roy

Lloyd, Ian (Havant)

Gardiner, George (Reigate)

Lloyd, Peter, (Fareham)

Gardner, Sir Edward (Fylde)

Lord, Michael

Garel-Jones, Tristan

Lyell, Nicholas

Gilmour, Rt Hon Sir Ian

McCrindle, Robert

Glyn, Dr Alan

McCurley, Mrs Anna

Goodlad, Alastair

Macfarlane, Neil

Gorst, John

MacGregor, John

Gow, Ian

MacKay, Andrew (Berkshire)

Gower, Sir Raymond

MacKay, John (Argyll & Bute)

Grant, Sir Anthony

Maclean, David John

Greenway, Harry

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

Gregory, Conal

Major, John

Griffiths, Peter (Portsm'th N)

Malins, Humfrey

Grist, Ian

Malone, Gerald

Ground, Patrick

Maples, John

Grylls, Michael

Marland, Paul

Gummer, John Selwyn

Marlow, Antony

Hamilton, Hon A. (Epsom)

Marshall, Michael (Arundel)

Hamilton, Neil (Tatton)

Mates, Michael

Hampson, Dr Keith

Mather, Carol

Hanley, Jeremy

Maude, Hon Francis

Hannam, John

Mawhinney, Dr Brian

Hargreaves. Kenneth

Mayhew, Sir Patrick

Harris, David

Mellor, David

Harvey, Robert

Meyer, Sir Anthony

Haselhurst, Alan

Miller, Hal (B'grove)

Havers, Rt Hon Sir Michael

Mills, Iain (Meriden)

Hawkins, C. (High Peak)

Mills, Sir Peter (West Devon)

Hawkins, Sir Paul (SW N'folk)

Mitchell, David (NW Hants)

Hawksley, Warren

Moate, Roger

Hayes, J.

Monro, Sir Hector

Hayhoe, Barney

Montgomery, Sir Fergus

Hayward, Robert

Morrison, Hon C. (Devizes)

Heathcoat-Amory, David

Moynihan, Hon C.

Henderson, Barry

Mudd, David

Hickmet, Richard

Murphy, Christopher

Hicks, Robert

Neale, Gerrard

Higgins, Rt Hon Terence L.

Needham, Richard

Hind, Kenneth

Neubert, Michael

Hogg, Hon Douglas (Gr'th'm)

Newton, Tony

Holland, Sir Philip (Gedling)

Nicholls, Patrick

Holt, Richard

Norris, Steven

Hordern, Peter

Onslow, Cranley

Howard, Michael

Oppenheim, Phillip

Howarth, Alan (Stratf'd-on-A)

Oppenheim, Rt Hon Mrs S.

Howarth, Gerald (Cannock)

Osborn, Sir John

Howell, Rt Hon D. (G'ldford)

Ottaway, Richard

Howell, Ralph (N Norfolk)

Page, Richard (Herts SW)

Hubbard-Miles, Peter

Parkinson, Rt Hon Cecil

Hunt, David (Wirral)

Parris, Matthew

Hunt, John (Ravensbourne)

Patten, Christopher (Bath)

Hunter, Andrew

Patten, John (Oxford)

Jackson, Robert

Pawsey, James

Jenkin, Rt Hon Patrick

Percival, Rt Hon Sir Ian

Johnson Smith, Sir Geoffrey

Pollock, Alexander

Jones, Gwilym (Cardiff N)

Portillo, Michael

Jones, Robert (W Herts)

Powell, William (Corby)

Jopling, Rt Hon Michael

Powley, John

Joseph, Rt Hon Sir Keith

Price, Sir David

Kellett-Bowman, Mrs Elaine

Proctor, K. Harvey

Key, Robert

Raffan, Keith

Kilfedder, James A.

Raison, Rt Hon Timothy

King, Roger (B'ham N'field)

Rathbone, Tim

King, Rt Hon Tom

Rees, Rt Hon Peter (Dover)

Knight, Gregory (Derby N)

Renton, Tim

Knight, Mrs Jill (Edgbaston)

Rhodes James, Robert

Knowles, Michael

Rhys Williams, Sir Brandon

Knox, David

Ridley, Rt Hon Nicholas

Lamont, Norman

Roberts, Wyn (Conwy)

448

Robinson, Mark (N'port W)

Thomas, Rt Hon Peter

Robinson, P. (Belfast E)

Thompson, Donald (Calder V)

Roe, Mrs Marion

Thompson, Patrick (N'ich N)

Rowe, Andrew

Thornton, Malcolm

Rumbold, Mrs Angela

Thurnham, Peter

Ryder, Richard

Townend, John (Bridlington)

Sackville, Hon Thomas

Townsend, Cyril D. (B'heath)

Sainsbury, Hon Timothy

Tracey, Richard

Sayeed, Jonathan

Trippier, David

Scott, Nicholas

Twinn, Dr Ian

Shaw, Giles (Pudsey)

van Straubenzee, Sir W.

Shelton, William (Streatham)

Viggers, Peter

Shepherd, Colin (Hereford)

Waddington, David

Silvester, Fred

Waldegrave, Hon William

Sims, Roger

Walden, George

Skeet, T. H. H.

Walker, Bill (T'side N)

Smith, Tim (Beaconsfield)

Waller, Gary

Soames, Hon Nicholas

Walters, Dennis

Speed, Keith

Ward, John

Speller, Tony

Wardle, C. (Bexhill)

Spence, John

Warren, Kenneth

Spencer, Derek

Watson, John

Spicer, Jim (W Dorset)

Watts, John

Squire, Robin

Wells, Sir John (Maidstone)

Stanbrook, Ivor

Wheeler, John

Stanley, John

Whitfield, John

Steen, Anthony

Whitney, Raymond

Stern, Michael

Wiggin, Jerry

Stevens, Lewis (Nuneaton)

Wilkinson, John

Stevens, Martin (Fulham)

Winterton, Mrs Ann

Stewart, Allan (Eastwood)

Winterton, Nicholas

Stewart, Andrew (Sherwood)

Wolfson, Mark

Stewart, Ian (N Hertf'dshire)

Wood, Timothy

Stokes, John

Woodcock, Michael

Stradling Thomas, J.

Young, Sir George (Acton)

Sumberg, David

Younger, Rt Hon George

Tapsell, Sir Peter

Taylor, Teddy (S'end E)

Tellers for the Ayes:

Temple-Morris, Peter

Mr. Robert Boscawen and

Terlezki, Stefan

Mr. Ian Lang.

NOES

Adams, Allen (Paisley N)

Cook, Frank (Stockton North)

Alton, David

Cook, Robin F. (Livingston)

Anderson, Donald

Corbett, Robin

Ashdown, Paddy

Corbyn, Jeremy

Ashton, Joe

Cowans, Harry

Atkinson, N. (Tottenham)

Craigen, J. M.

Banks, Tony (Newham NW)

Crowther, Stan

Barnett, Guy

Cunningham, Dr John

Barron, Kevin

Dalyell, Tam

Beckett, Mrs Margaret

Davies, Rt Hon Denzil (L'lli)

Beith, A. J.

Davies, Ronald (Caerphilly)

Bell, Stuart

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

Benn, Tony

Deakins, Eric

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

Dewar, Donald

Bermingham, Gerald

Dixon, Donald

Bidwell, Sydney

Dobson, Frank

Boothroyd, Miss Betty

Dormand, Jack

Boyes, Roland

Douglas, Dick

Bray, Dr Jeremy

Dubs, Alfred

Brown, Gordon (D'f'mline E)

Dunwoody, Hon Mrs G.

Brown, Hugh D. (Provan)

Eadie, Alex

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

Eastham, Ken

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

Evans, John (St. Helens N)

Brown, Ron (E'burgh, Leith)

Ewing, Harry

Bruce, Malcolm

Fatchett, Derek

Buchan, Norman

Faulds, Andrew

Caborn, Richard

Field, Frank (Birkenhead)

Callaghan, Jim (Heyw'd & M)

Fields, T. (L'pool Broad Gn)

Campbell-Savours, Dale

Fisher, Mark

Canavan, Dennis

Flannery, Martin

Carlile, Alexander (Montg'y)

Forrester, John

Cartwright, John

Foulkes, George

Clark, Dr David (S Shields)

Fraser, J. (Norwood)

Clarke, Thomas

Freeson, Rt Hon Reginald

Clay, Robert

Garrett, W. E.

Clwyd, Mrs Ann

George, Bruce

Cohen, Harry

Gilbert, Rt Hon Dr John

Coleman, Donald

Godman, Dr Norman

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Gould, Bryan

O'Brien, William

Hamilton, James (M'well N)

Orme, Rt Hon Stanley

Hancock, Mr. Michael

Parry, Robert

Harrison, Rt Hon Walter

Patchett, Terry

Hart, Rt Hon Dame Judith

Pavitt, Laurie

Hattersley, Rt Hon Roy

Pendry, Tom

Haynes, Frank

Penhaligon, David

Hogg, N. (C'nauld & Kilsyth)

Pike, Peter

Holland, Stuart (Vauxhall)

Powell, Raymond (Ogmore)

Home Robertson, John

Prescott, John

Howells, Geraint

Radice, Giles

Hoyle, Douglas

Randall, Stuart

Hughes, Robert (Aberdeen N)

Redmond, M.

Hughes, Roy (Newport East)

Rees, Rt Hon M. (Leeds S)

Hughes, Sean (Knowsley S)

Richardson, Ms Jo

Hughes, Simon (Southwark)

Roberts, Ernest (Hackney N)

Janner, Hon Greville

Robertson, George

John, Brynmor

Rogers, Allan

Johnston, Russell

Rooker, J. W.

Jones, Barry (Alyn & Deeside)

Ross, Stephen (Isle of Wight)

Kaufman, Rt Hon Gerald

Rowlands, Ted

Kennedy, Charles

Sheerman, Barry

Kirkwood, Archy

Sheldon, Rt Hon R.

Lambie, David

Shore, Rt Hon Peter

Lamond, James

Short, Ms Clare (Ladywood)

Leadbitter, Ted

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

Leighton, Ronald

Silkin, Rt Hon J.

Lewis, Ron (Carlisle)

Skinner, Dennis

Lewis, Terence (Worsley)

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

Litherland, Robert

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

Lloyd, Tony (Stretford)

Snape, Peter

Lofthouse, Geoffrey

Soley, Clive

McCartney, Hugh

Spearing, Nigel

McDonald, Dr Oonagh

Steel, Rt Hon David

McGuire, Michael

Stott, Roger

McKay, Allen (Penistone)

Strang, Gavin

McKelvey, William

Straw, Jack

McTaggart, Robert

Thomas, Dafydd (Merioneth)

McWilliam, John

Thompson, J. (Wansbeck)

Madden, Max

Thorne, Stan (Preston)

Marek, Dr John

Tinn, James

Marshall, David (Shettleston)

Torney, Tom

Maxton, John

Wallace, James

Maynard, Miss Joan

Wardell, Gareth (Gower)

Meacher, Michael

Welsh, Michael

Meadowcroft, Michael

Wigley, Dafydd

Michie, William

Williams, Rt Hon A.

Mikardo, Ian

Winnick, David

Millan, Rt Hon Bruce

Woodall, Alec

Miller, Dr M. S. (E Kilbride)

Mitchell, Austin (G't Grimsby)

Tellers for the Noes:

Morris, Rt Hon A. (W'shawe)

Dr. Roger Thomas and

Nellist, David

Mr. Lawrence Cunliffe.

Oakes, Rt Hon Gordon

Question accordingly agreed to.
Resolved,
That the Welsh Rate Support Grant Report 1985–86 (House of Commons Paper No. 100), which was laid before this House on 12th December, be approved.

Rate Support Grant (Wales)

  WELSH RATE SUPPORT GRANT REPORT 1985–86 (AMENDMENT)
  Resolved,
  That the Welsh Rate Support Grant Report 1985–86 (Amendment) Report (House of Commons Paper No. 147), which was laid before this House on 10th January, be approved.—[Mr. Nicholas Edwards.]

Wildlife (Northern Ireland)
11.57 pm
The Parliamentary Under-Secretary of State for Northern Ireland (Mr. Chris Patten): I beg to move,
That the draft Wildlife (Northern Ireland) Order 1984, which was laid before this House on 22nd November, be approved.
This order, like the other which the House is to debate this evening, has benefited from the Assembly's scrutiny. A number of changes for the better have been included in it as a result.
I am particularly pleased to bring forward this proposal, as it represents the first comprehensive wildlife law for Northern Ireland. Northern Ireland's geographical separation from the rest of Europe has obviously been a constraint on the variety of its wildlife. It is therefore essential to protect what we have. The provisions will protect many species of wildlife. These correspond to the Wildlife and Countryside Act 1981 which brought the law in Great Britain into line with four international agreements entered into by the Government of the United Kingdom—the EEC directive on the conservation of wild birds, the Berne convention on the conservation of European wildlife and natural habitats, the Ramsar convention, which is concerned with the establishment and protection of internationally important wetlands, and the Bonn convention on the conservation of migratory species of wild animals. Part I of the Wildlife and Countryside Act and the Deer Acts 1963 to 1980 are the main sources of the draft order.
The order is in four parts. The first is procedural and deals with the title and commencement of the order. Part II relates to the protection of birds and other wild creatures and plants. The provisions relating to wild birds cover articles 4 to 9. The EEC directive contains the basic premise that all birds, their nests and eggs shall be fully protected and that requirement is achieved in article 4. Control of bird species is obviously essential, for example, in relation to pest birds which can be damaging to activities such as agriculture, and the birds which have traditionally been used for sport or food or both. The necessary exceptions can be found in article 5, although inhumane methods of killing and taking of such wild birds are banned by virtue of article 6, which restates the existing law on wild birds' protection in relation to the prohibition of traps, snares, hooks and nets and includes several new methods proscribed under the EEC directive. An additional provision has been added since the proposal was published for consultation, making it an offence for a landowner to permit or allow the use of these prohibited methods on his land. That provision is repeated later in the order in connection with wild animals.
Article 7 deals with the sale of live or dead wild birds. The sale of any live wild bird is prohibited entirely and only one species of dead wild bird may be sold—the wood pigeon. Regulations will be made, however, to permit certain individuals—taxidermists in the main—to trade in dead species. There is a later similar article on animals.
Under article 9 it will be an offence for any person to be involved in any event where captive birds are freed to be shot or hunted by trained birds of prey immediately after their liberation. That offence is a substantive change made since the proposal was published. The practice is apparently growing in some European countries and this

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provision, which is not included in the Wildlife and Countryside Act 1981, is designed to prevent its spread to Northern Ireland.
Provisions on the protection of other animals begin with article 10. Creatures such as the badger, pine marten, otter, red squirrel and certain butterflies are protected for the first time. A full list of protected creatures is contained in schedule 5. There must, of course, be exceptions—allowed for in article 11 — to safeguard domestic livestock, crops and other forms of property. In article 10 there is a further change from the published order. The protection afforded to structures or places used by wild animals for shelter has been extended to cover also anything that conceals or protects them. That change was made in the light of the difficulty experienced by the Nature Conservancy Council in interpreting the corresponding provision in the 1981 Act.
Article 12 prohibits the use of inhumane methods of killing and taking wild animals, and the ban on the use of self-locking snares has been reinforced by a new provision prohibiting their sale.
The special protection of plants is contained in article 14. In view of the possible difficulties in enforcing these particular provisions, it is my firm intention that there should be the widest publicity to impress on the public the importance of leaving the countryside as they find it. the provision is not entirely restrictive. The picking of wild flowers, apart from those in the specially protected category, is still permitted, but for obvious reasons it is an offence to uproot or destroy any wild plant.
Article 15 deals with the introduction of new species. There are two main reasons why introductions require strict control. First, foreign species may thrive and spread rapidly because of the lack of competition. Like the grey squirrel and the mink, they may then cause damage to trees, livestock or other forms of property. I think that that has been a problem in parts of County Tyrone. Secondly, they may cause the number of our native species to decline by competing for their food and space. The presence of American mink in Northern Ireland is an expensive reminder of how an introduction can be harmful both to property and to wildlife. The penalties for an offence under this article are high and reflect the need for tight controls on non-native species of plants and animals.
Article 16 deals with the establishment of wildlife refuges under which, for example, bird sanctuaries may be designated by order. The provisions of this article will not override the existing statutory rights of landowners as designations will only be through agreement.
The licensing provisions of the order are contained in article 18. There is a substantial list of activities that may be carried on that are otherwise in contravention of the provisions of the order, provided they are done under and in accordance with a licence issued by the Department of the Environment. It is intended that the administrative costs of issuing licences will be partially offset by a suitable charging system.
In this article there is a further change from the published order in that a licence relating to the killing of a species will require to specify the particular species which may be killed and the person authorised to do so. This tighter control is felt to be justified in such circumstances.
Part III of the order covering articles 19 to 23 relates to deer. During the late 1970s, several unsuccessful Deer Bills were introduced by various private Members at
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Westminster, each including the protection of deer in Northern Ireland. The final version. the Deer Act 1980, turned out to be a truncated version of earlier Bills and did not, unfortunately, embrace Northern Ireland. An undertaking was then given by one of my predecessors that the protection of deer would be included in any subsequent wildlife measure in the Province.
Until now, Northern Ireland has had the unenviable distinction of being the only country in western Europe not to have national laws for the protection of deer. The present proposals closely follow those contained in the Deer Acts 1963 to 1980 and cover items such as close seasons, nightly shooting times, prohibited weapons, poaching and the purchase and sales of venison.
Certain exceptions have been provided which will allow for the veterinary treatment of deer and the killing of deer out of season by an authorised person on certain agricultural land and garden grounds. The exceptions provided for deer farmers and for the purpose of protecting any person threatened by a deer have been limited in the former case to specified acts, and in the latter to circumstances where there is an immediate threat and by the application of a standard of reasonableness to the act carried out. This, again, is a change introduced following the consultation process.
Part IV of the order contains the miscellaneous provisions and deals with standard items such as enforcement, summary prosecutions, penalties and forfeitures and regulations, orders and notices. The level of penalties emphasises the gravity with which any breach of the laws on wildlife is and should be regarded.
I am confident that hon. Members will welcome this order as a necessary measure to protect the wildlife heritage of Northern Ireland. It places Northern Ireland on at least an equal footing with the rest of the United Kingdom and gives us a comprehensive code that will meet the requirements of various international agreements to which the United Kingdom is party.
I commend the order to the House.
Mr. Stuart Bell: I commend the Minister on taking us so carefully and succinctly through the order. Hon. Members who represent Northern Ireland constituencies will be as anxious as I am to ensure that provisions which offer protection to additional fauna and flora should be the same in Northern Ireland as they are on the mainland.
The positive aspect of this order is that while it is somewhat overdue — the bird section, for example, should have been in force by April 1983 to comply with the EEC directive on the conservation of wild birds—it offers protection to fauna and flora that were previously unprotected in Northern Ireland.
As the Under-Secretary said, the order brings us into line with our international obligations. Though it is sometimes overlooked, if not forgotten, these apply as much to Northern Ireland as they do to the mainland. Some of these obligations are imposed on us by the EEC, and we are dealing tonight with one such obligation which arises from the application of article 4 of the European directive to which I referred.
Those who take a strong interest in these matters in Northern Ireland are broadly satisfied with the provisions for the protection of the species. Their concern, however, is that the provisions should be fully implemented and that the powers, such as those which exist in article 4(10) to

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enable Northern Ireland to join in the special protection measures for, for example, quarry species in cold weather—measures which are currently in force in Great Britain—will not be weakened by any lack of resolve on the part of the Department of the Environment in Northern Ireland. We join the Minister in commending the order to the House.
12.10 am
Rev. Martin Smyth: I give a general welcome to the order and share the opinion of the hon. Member for Middlesbrough (Mr. Bell) that we should appreciate the manner in which the Minister presented it. The Minister talked about the need to preserve wildlife because it may be in peril. I am happy that a similar order was not in force at the time of Patrick, who is alleged to have cleared the snakes out of Ireland. Many of us would like him back with us.
The Assembly has recommended that action should be taken to preserve the Irish hare. I do not think that that was a nationalistic or a Unionist ploy; I believe that the recommendation reflected the concern of the people of Northern Ireland.
The Minister has assured me in a letter that action would be taken on what he described as a "running sore" in Northern Ireland, which is the live coursing at Crebilly. In the Minister's response to the concerns of the people of Northern Ireland, we were told that it was not intended to legislate for the protection of the Irish hare as that came under gaming legislation. However, the hope was expressed that something would be done as soon as possible. Can the Minister say when such a measure might be brought before us? If there was a sense of urgency in bringing the order before the House because of the European directive, there should be an equal sense of urgency to respond to the will of the majority of the Ulster people on an evil form of sport of which few have spoken in support, irrespective of class, politics or creed.
12.13 am
Mr. Peter Robinson: This is perhaps the first time that I have approached this subject in the House, but I have dealt with it for many hours in another place in Northern Ireland. During that process I have been struck by the widespread interest in it, which I, as a public representative, had not detected was so deeply held in the community. For that reason, I welcome the substance of the orders, which include provisions that will protect the flora and fauna and our wildlife. These are matters of primary interest to the people of Northern Ireland. They are interested especially in the conservation of wildlife.
The substance of my remarks is one of welcome, so it is unfortunate that any cloud should appear in the sky, especially a grey one, in taking up the remarks of the hon. Member for Belfast, South (Rev. Martin Smyth) on the practice of enclosed live park hare coursing in Northern Ireland.
Those in this place who do not represent Northern Ireland constituencies may think that hare coursing is hare coursing whether it is in Great Britain, Northern Ireland or even the Republic of Ireland. It is not the same throughout the United Kingdom. Hon. Members should be aware of what park hare coursing in Northern Ireland really is. In Great Britain—I do not argue the merits of
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hare coursing there — the rules allow a hare an opportunity to escape that is not available to a hare in Northern Ireland. If a hare in Northern Ireland escapes once, it is recycled and again put through the process. If it escapes the next time, it is recycled and put through the process once more.
I have protested at Crebilly, so I can tell the House about the procedures adopted. The hare does not have a great opportunity to escape. It is given a relatively short start with the hounds following on after it. The hounds can follow the hare into the enclosure and corner it in a smaller and more confined space. The stewards are simply in the area to kick the hare to death rather than see it torn to pieces by the dogs. That is park hare coursing Northern Ireland style. It is more barbaric, cruel and evil than the style practised in the rest of the United Kingdom.
With that background in mind, the Assembly would have considered the proposal for a draft order and the section dealing with the prohibition of certain methods of killing or taking wild animals. It would be appropriate to include a proscription of the use of enclosed park hare coursing.
The political parties in Northern Ireland did not line up with the Unionists on one side of the argument and the Nationalists on the other or with Protestants and Roman Catholics on different sides. There was a degree of agreement that the Minister might like to see in other subjects. With a great deal of agreement, the Members of the Assembly accepted the argument and recommendations presented by the Environment Committee that there should be a ban on enclosed park hare coursing. The Assembly's view was not out of tune with what the people in the country as a whole felt. There was widespread worry about the practice of hare coursing and widespread approval for the Assembly's recommendations.
I support the principle that Northern Ireland politicians should have a role to play in their own affairs. The Assembly has been useful in that it has a scrutinising role and has enabled us to put a bridle on hitherto unaccountable direct rule. The confidence of many people was shaken when they noticed that a proposal which had such widespread acceptance was treated so cavalierly by the Minister's Department. I should have thought that a Tory Minister would have had an excellent opportunity to agree with a proposal that would not cost anything, financially at least.
Some people in Northern Ireland are less generous than I am. If you, Mr. Deputy Speaker, had been in that other place, you might have been alarmed at some of the comments made. One Member said:
"The Minister responsible for this decision is either very stupid, very ignorant, or downright deceitful".
He allowed the Minister some grace, because he said:
"the latter is the most likely".
Although a constituent might forgive a politician for being deceitful, he could not forgive him for being stupid or ignorant. I do not believe that any of those three descriptions applies. I have noticed over and over that when the subject of park hare coursing has arisen in Northern Ireland, something always stops action. I do not know whether there is an over-abundance of tweedy sorts in the Department of the Environment. Whatever it is, something does not allow the Department to think in the same terms as the majority of the people and elected representatives in Northern Ireland. I wonder whether the Minister can support that activity. When he responded to

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the Assembly, he said that there were reasons for not accepting such a ban. He said that the Irish Coursing Club had decided to change its rules and that, with self-regulation, the Assembly might achieve what it sought better than by legislation.
I am not convinced that those who practise barbarity are the best people to regulate it, nor am I convinced that those people who only change the rules when under pressure are likely to keep them when the pressure appears to be off. With self-regulation, they could regulate the rules back to what they were. What is to stop a group that is not affiliated to the Irish Coursing Club from having a meeting similar to Crebilly before self-regulation?
Hon. Members should know what the great changes in the rules at Crebilly are that encouraged the Minister not to go ahead with a ban on park hare coursing. The first change was an increase in the number of stewards who would attend the meeting. I am sure that the hare was impressed by the fact that there would be more stewards to kick it to death when the hounds caught it. If it was not impressed. it would feel the same as Members of the Assembly, who were equally unimpressed.
The other great move was to give the hare a few yards extra start. It would be able to go a few more yards up the course before the hounds killed it. I am sure that the hare was impressed that under the new regulation it would have an extra couple of seconds to live.
The third change in the regulations was that the promoters of the event would clip the ears of the hares that survived after they had gone through the course, so that they could be released within 48 hours of the completion of the event. Neither the Minister nor the ICC has said who will referee such a procedure. The ICC's reaction to the RSPCA's previous request to watch the hares being let into the wild after the events was strange. I suspect that if the ICC is still reluctant to allow supervison of its activities, self-regulation is meaningless.
The Minister has been so impressed by the ICC's generosity in making those three major concessions that he does not feel it necessary to impose a ban. I say that, but I do him an injustice, because in a letter to me he says that he has decided
"for the present not to introduce separate legislation."
I seek some clarification from the Minister. He will be aware that the coursing club's rule 13 states:
"points are awarded during the course to hounds which do the most to kill the hare."
I am sure that the rules for hare coursing in Northern Ireland are different from those followed in Great Britain. As that rule has not been amended, how long does the Minister intend to allow the review of the ICC's self-regulation to continue before he is prepared to say whether it meets the criterion that he set down when he felt that self-regulation would meet the Assembly's request?
I urge the Minister to say that if the self-regulation does not meet his requirements for hare coursing in Northern Ireland and does not bring it closely into line with hare coursing as practised in Great Britain, he will introduce legislation to ban that barbaric and evil practice in Northern Ireland.
I end as I began, by giving a general welcome at least to that part of the order which appeared at the end of the day. It provides overall a better balance between the interests and responsibilities of the different users of the countryside. But in welcoming the order, I urge the Minister to consider legislation.
12.25 am
Mr. Stephen Ross: As one who sat through the Committee stage of the Wildlife and Countryside Bill, and moved an amendment that the Bill should apply to Northern Ireland, I welcome the order.
Anyone who saw the film on BBC television on Sunday night will appreciate how rich and varied is the wildlife of Ireland, both north and south. It was marvellous to see red squirrels—there are not many left in Britain, but we have them in the Isle of Wight — as well, as pine martens, hares, otters, peregrine falcons, chuffs, bitterns, and even the corncrake, which I think now exists only in the Western Isles. Long may they survive.
Under article 4(10), the Minister is enabled to introduce special protection measures for quarry species, particularly in cold weather. I believe that art this moment his colleagues in the Department of the Environment are thinking of banning wildfowling in Britain because of the prolonged cold weather that we are experiencing. May something similar be considered for Northern Ireland if the cold spell continues for any length of time? The weather may not be as severe in Northern Ireland; others will be able to tell me whether it is or not. But if there is to be a prolonged period of cold weather, that article should be implemented.
I am sorry to see that the curlew and the scaup can be hunted in Northern Ireland, because they are protected in Britain. We had an argument about curlew in Committee on the Wildlife and Countryside Bill. Perhaps the scaup might have been included in the order; I am sorry that it was not. However, I welcome the order and hope that it will be implemented speedily.
12.29 am
Mr. William Ross: I was glad to hear the hon. Member for Isle of Wight (Mr. Ross) refer to an amendment that he moved in Committee on the Wildlife and Countryside Bill. If it had been carried, we should not have had to sit here until 3 am. No doubt many hon. Members on the Government Benches would have been even more pleased if that Liberal amendment had been carried.
The order deals with an enormous number of matters. The hon. Member for Belfast, East (Mr. Robinson) concentrated on one aspect of the order; indeed, that has been the hallmark of the examination of the order. Article 4(10) says that a person who
"takes or destroys an egg of any wild bird…shall be guilty of an offence."
Most wild birds' nests are destroyed or interfered with by children—often relatively small children—who go bird-nesting. The practice is not as common now as it was when I was a child, but certainly in regard to small birds that is where the real problem lies.
I suggest that the Minister could approach the education authorities to see what could be done through the schools to relieve pressure on nesting birds from children. If we do not start the process of education when children are young, we shall never get anywhere in that respect.
Mr. Roy Beggs: Will my hon. Friend agree with me that, because of the importance of conveying the contents of the order to schoolchildren, copies should be made readily available to them? We are dependent on the help of teachers in encouraging children to be thoughtful with regard to wildlife. Indeed, we are

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very much indebted to organisations such as the Royal Society for the Protection of Birds for the work they do and the literature they circulate.
Mr. Ross: I agree with my hon. Friend. I do not see any reason why the Department of Education and Science should not make material available to schools.
There is an enabling power to restrict shooting in hard weather. I assume that normally any such restriction would apply to the entire Province, yet it is not unknown for the Province to benefit, with regard to game and wildfowl, when there is hard weather in Great Britain or elsewhere in the island of Ireland. I am curious as to whether the Government are thinking of putting a blanket ban on the entire Province, or only on parts of it that might from time to time be affected by hard weather, when the rest of the Province would be clear and shooting could be permitted there. I should be obliged if the Minister told us what the Government's thinking is on that issue.
In article 6 of the order one reads about the means of killing or taking wild birds that are banned. Later it refers to wild animals. One thing that has concerned me very much is the banning of the automatic shotgun. I have not been able to understand why that should be so. I believe that the measure results purely from the EEC directive. I should be greatly obliged if the Minister could give us the benefit of the Government's thinking when they accepted that restriction. There is nothing wrong with an automatic shotgun. My experience, as a user of one, which I fear none of the members of the Assembly Committee are, is that whenever one fires a gun at any target, and misses two shots, one does not waste ammunition firing a third shot because the target is far out of range by that time. In the control of vermin and ferreting rabbits, the automatic shotgun has tremendous advantages over the standard double-barrelled shotgun. I cannot understand why the Government have been so willing to accept that demand from the EEC.
The Minister will appreciate the difficulties, especially in Northern Ireland, when an individual wants to get a second shotgun, and the police are most unwilling to grant a firearms certificate for that weapon. Therefore, the individual who owns an automatic shotgun may be prohibited when the order comes into operation from using that firearm in the taking of wildlife or game, and may find that not only has its market value diminished but that he is incapable of holding it and a second gun. Perhaps the Minister will have a word with the chief constable and his right hon. Friend the Secretary of State about the matter when he is confronted with applications for a second gun.
I also notice that a shotgun that has an internal barrel diameter of more than 1¾ in. is banned. Perhaps the Minister will tell us what bore of shotgun that represents because elsewhere in the order we find references to the size of shot, the bore and so on. Instead of using the same measurements throughout, we seem to hop from one measurement to the other, which is confusing.
The order also refers to the prohibition of
"any device for illuminating a target or any sighting device for night shooting".
It may not be known to the House, but several different gadgets can be used for shooting. There is the image intensifier, used by the Army, which is a highly sophisticated piece of equipment and extremely unlikely
458
to be available to sportsmen. There are things such as the red spot that appears on the target when one has the device mounted on the gun. When one puts the gun to one's shoulder, once the red spot appears on the target, one knows that one is on it. Is that banned? There is also the extremely simple device for shooting duck in the late evening of putting a piece of white paper on the muzzle of the gun so that one can see it. I have used that device and am curious to know whether it would be banned. I wonder whether anyone asked the Minister those questions before, and whether any practical shooting men talked to him about what it is like on the ground when one is trying to bring down game in bad light conditions.
I am also concerned about the release of wild birds to be shot or to be pursued by birds of prey. The Minister has cleared my mind because I was worried that that practice was taking place in Northern Ireland, but has he any evidence that in any place in Northern Ireland or Great Britain the shooting of live birds in place of clay pigeons is still practised? If so, I should be surprised and shocked to hear it because I thought that it died out a long time ago, and I would not like to think that it had been revived.
Another matter that concerned a great many people was the use of the self-locking snare. A great many people have said a great deal about the cruelty of this device. Having listened to the views of a large number of people, and having seen the snare in use, I remain unconvinced by the arguments for banning it. Any snare that is properly set should catch and kill its quarry. The soft, brass-coloured wire used for rabbit snares would tighten up and have much the same effect as a self-locking snare. If the snare is properly used there should be no problems. We are really seeking to legislate not for responsible, able users but for the cowboys and we shall not stop the people like that by legislation unless the most extreme steps are taken to enforce it. I cannot see the necessary money and effort being put into enforcement to deal with the problem effectively, so I remain unconvinced by the arguments and I am unlikely to be convinced unless much stronger evidence appears.
The reference to the taking of animals through the use of gases and poisons is clearly directed at the use of cymag. Anyone who lives in the country knows how widely that powder is misused and the problems that it causes, especially for fish stocks, and I hope that serious steps will be taken to stop it getting into the wrong hands. This has been a matter of concern for many years to everyone who cares about wildlife. Yet the poacher still goes on his merry way, apparently getting away with it.
The provision about the purchase and sale of parts of animals is presumably intended to stop the purchase and sale of fox skins and I note that the fox appears in one of the schedules as an animal that may not be sold. I was not aware that the fox was in any danger of extinction in Northern Ireland. Indeed, the place sometimes seems to be overrun with them. Until recently there was a bounty on foxes and large numbers have undoubtedly been taken by various means and skinned. Yet there still seem to be quite a large number of them trotting around, causing a great deal of damage.
There is practically no fox hunting of the type practised in England. Foxes in Ireland generally are killed by trapping and shooting or gassing and they will go on being killed. All that is being done here is to remove an incentive

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to hunt them down. At the end of the day, there is no danger to the number of these animals in Northern Ireland, so I see no justification for the provision.
I was astonished to learn that primroses are to be protected. If there is one plant in Northern Ireland that does not need protecting, I should have thought it was primroses. Such a provision seems to me quite ridiculous.
Mr. Chris Patten: From my experience, one group of people from whom primroses may need to be protected in Northern Ireland is visitors from Great Britain.
Mr. Ross: Let us hope that the tourist trade benefits when they come and pick them. My experience of primroses is that they are rather too early in the season for most tourists anyway. What is the policeman going to say when he meets the five-year-old child coming up the road with a bunch of primroses for his mother, a child who would be breaking the law by picking a perfectly common flower? I think that the measure is quite unnecessary.
Article 15 is a useful and interesting one. and has not up to now received the attention that it deserves. It relates to the prohibition of the introduction of new plants and animals. The Minister mentioned two of these—grey squirrels and mink. This article is excellent so far as it goes. but there is not one word anywhere in the order about the responsibility of any person or any public authority to remedy the current situation. In the light of that, I think it is just empty words. If the Government intend to say that we must not introduce things that are harmful, they should be trying to get rid of the existing harmful species instead of allowing them to run round causing the damage that has resulted in Northern Ireland over many years.
Article 20 deals with regulations to cover smooth bore shotguns and so on. Could the Minister translate that into layman's terms? Could he tell the House what shot size is represented by the figures that are referred to and what sort of rifle calibre he is referring to? Is he really saying that instead of a ·236 or 6 mm the Government will accept only a rifle of ·240 calibre and a ball for the taking of deer? That is my understanding of the provision. The people in Northern Ireland who engage in these such activities need to know the exact position in layman's terms.
Article 28 provides for a number of wide powers. In my view, the Government, in exercising those powers, would be enforcing orders which would have no parliamentary sanction whatsoever. I hope that the Minister will say whether I am correct in my assumption and, if so that he will make some effort to ensure that parliamentary procedure exists before the orders come into force.
I welcome particularly the deer protection aspect of the order. Will a game licence be needed by a person going to shoot deer in Northern Ireland? That is not clear from what has so far been said.
On hare coursing, can the Minister say how these hares are captured? I assume that they do not grow on trees but that somebody has to go out and catch them. How are they caught, where are they caught and who has the shooting rights on the land from which the hares are taken? If the source of the hares could be restricted, many of the problems mentioned might disappear. During the Assembly's investigation, a number of people remarked that hares were an endangered species, or to some extent under threat. I recall clearly that before myxomatosis hit the rabbit population, hares were unknown in the lowlands in Northern Ireland except in a rare place like Nutts Corner airport.
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Whenever the rabbits had been nearly wiped out, within two or three years the hares would appear in large numbers all over Northern Ireland. They stopped being an animal of the hill and the open moor. The explanation given at the time was that the male rabbits tended to kill the leverets in the first few days of their life. It was noticeable that, as soon as the rabbit population recovered, the hares in the lowlands diminished in number and eventually vanished. If the explanation was correct, the Minister should try to find out the size of the hare population in the hills today, and what it was before the rabbit population crashed. That might give us an idea of the abundance of hares today compared with past years. I do not believe that the hare is in as much danger as some people believe.
Mr. Peter Robinson: Perhaps the hon. Gentleman could clarify his reference to the number of hares? Because the number of hares may be greater than was suggested by some members of the Assembly, would it be right to treat them in the manner in which they are treated at Clibelly?
Mr. Ross: The hon. Gentleman misunderstands me. I was not referring to anything said by any member of the Assembly Committee. I was referring to what was said by those who gave evidence to that Committee. At least two or three of them expressed that view. I would lot want anyone to believe that the Irish hare is vanishing from the face of the earth. I do not believe it is. I believe that the population of hares rises and diminishes naturally, and not always in the same place. It is noticeable to any shooting man that there has been a vast change. Hares are now found in a more restricted area than they were a few years ago, and I wonder whether that fact has been taken into account by those who fear for the future of the species.
This important order is, in the main, to be welcomed. I have mentioned two or three points that I am concerned about—two or three Government decisions that puzzle me—and I hope that it will be possible for them to be reconsidered at a later stage.
12.47 am
Sir John Farr: I do not know whether the order is the right vehicle for a discussion of hare coursing, but I am sure that no hon. Member would support any sport in the United Kingdom in which the quarry was not given a fair chance of escape—whether coursing, shooting, fishing or hunting. The quarry must have a fair chance of escape if a sport is to be worthy of support in a civilised society.
Part III of the order relates to deer. Why has my hon. Friend not followed the useful precedent established in England and Wales with the Deer Act 1980 and in Scotland with an order of last December? Both the Act and the order gave deer of all species much more watertight protection.
I realise that the House would not wish superfluous additions to be made to an order that is already long, but both the Deer Act and the Scottish order gave much greater protection to the deer in relation to the disposal of the carcases. A schedule was incorporated in the venison register which all dealers in venison in England and Wales, and in Scotland, have to keep. The register must be kept, the columns must be filled in and it must be available for inspection for at least three years. Two years' operation of that scheme in England and Wales has proved

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of great benefit to the police and the authorities in curtailing deer poaching and in tracking down poached carcases of venison. I am surprised and disappointed that it is missing from part III of the order.
The hon. Member for Isle of Wight (Mr. Ross) and I shared the enjoyment of the Committee stage of the Wildlife and Countryside Bill. What he said about harsh weather is important. Provision should be made for it in the order. As from today, we have imposed a harsh weather ban on wildfowl, woodcock for a start. The order should enable the Minister to make a direction, when, as recently, there have been a couple of weeks of harsh weather, to ban or curtail the shooting of all forms of quarry that are under threat because of that harsh weather.
Having made those remarks, I welcome the order.
12.50 am
Mr. A. Cecil Walker: I am a dedicated conservationist, especially with regard to the protection of all forms of wildlife, whether indigenous or visiting during migration.
In my younger days I was interested in sport shooting. I have given it up, not because I am a bit long in the tooth to by lying in wet ditches in the middle of winter or out in the mud flats of Strangford lough waiting for the morning flight, but because I feel that, with the drastic changes that have occurred in our environment, our wildlife is under more pressure for day-to-day existence. It needs all the help that it can get. That is why I give a generous welcome to the Government's efforts, through the order, which is an honest attempt to protect our wildlife from the human species.
I am especially pleased to see that article 6(1)(c) (iv) provides that it will now be an offence to use
"any shotgun of which the barrel has an internal diameter at the muzzle of more than one and three-quarter inches".
I remember such cannons being used on the shores of Belfast and Strangford loughs. They were mounted on what were known as duck punts, which were camouflaged to look like a piece of floating debris. They were manned by two people, who were usually lying down. They were always used during the hours of darkness. Moonlit nights were especially favoured because the quarry, the migratory flocks of ducks and geese, was more easily recognised then. One of the hunters quietly paddled the punt until he was among his victims and then the other one blasted off with this diabolical instrument of death and destruction. It was common to kill or maim upward of 20 to 30 birds with one shot. In the light, one could see many of them flapping about in the water, condemned to a lingering death if not retrieved and put out of their agony.
I am also pleased that article 6(1)(e) makes it an offence to use
"any mechanically propelled vehicle in immediate pursuit of a wild bird for the purpose of killing or taking that bird".
The prohibition extends to animals. I have seen fast planing boats manned by trigger happy so-called sportsmen running down on all types of sea birds. The swiftest birds might get out of range, but the diving species invariably fall victim as they have not the speed to get into the air. They are therefore slaughtered on the surface as soon as they exhaust themselves. I have seen the same tactics employed in seal hunting. Although many fishermen would say that seals are a legitimate target, the cruel killing of them by such methods must be condemned.
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In article 12(1)(a) there is reference to "self-locking snares". Here I might have to take issue with my hon. Friend the Member for Londonderry, East (Mr. Ross). I maintain that all snares can be self-locking; when the animal is caught, its struggles invariably cause a locking effect. If such snares killed the animals they trapped, as can happen when rabbits hit them hard, I would not be so concerned; but when the animal is caught by the neck, body or hind leg, it must suffer. The real cruelty occurs when the setter of the snares leaves them for several days before he inspects them. Many of his victims may be domestic animals. I have heard of instances where dogs, sheep and even cattle have been caught and severely injured in snares which were meant for foxes.
I would like to have seen a provision in the order for duly appointed wardens to be able to enforce the various prohibitions. In several instances culprits who were observed by wardens blatantly breaking the wildlife laws were not apprehended because the wardens did not have the necessary authority. It must be recognised in this connection that our police force cannot be everywhere at one time.
12.56 am
Mr. J. Enoch Powell: The Minister has already taken on board a heavy cargo, perhaps more than he can cope with conveniently in his winding-up speech, contributed to not least in an expert fashion by my hon. Friend the Member for Londonderry, East (Mr. Ross) and others. I want to make only one addition to the cargo, of which I hope he will at least acknowledge the importance, namely, the matter of identification.
Most citizens will wish to observe the law as we are making it in this order. To do so, they must be able to identify the species that are protected. With animals, and to a lesser degree birds, there is no problem. Most people are familiar with and can recognise the species of animals that are protected by the order. Even if people are less commonly able to identify all the birds that are named, at any rate the general drift of the prohibitions which the order contains is clear and could be carried in anyone's mind.
There is a different order of difficulty in relation to the flora. Schedule 8, which occupies a page and a quarter, sets out a list of plants of which even those who, without being expert botanists, take an interest in the countryside are mostly unaware. Nor are they much helped by the fact that the popular names, so-called, are occasionally inserted. I found it no assistance to identify moschatel to know that it is also called town hall clock. I have to admit to not knowing what it looks like or whether I am likely to encounter it in my wanderings in the Mourne mountains.
No doubt the Minister, who referred in his opening speech to publicising the contents of the order, has in mind some ways in which this problem can be dealt with. It would be helpful if he could give some indication to the House in his concluding speech of what those are. It is not so easy perhaps to ensure that the only effective method of identification, namely, good and coloured diagrams and illustrations, are readily visible and available.
In some of the areas with which we may be dealing in the next order to come before the House one could, with perhaps not too much risk of falling victim to vandalism, erect a series of pictures of protected flora, as we find of the duck life in St. James's park. I do not have a suggestion

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to offer as to how the range of protected flora in schedule 8 can be brought to the knowledge and attention of those who might otherwise be tempted to pick a rather exciting and attractive flower and thus unwittingly break the law.
Having a wife who has a passion for picking primroses, I was at first alarmed by the speech of my hon. Friend the Member for Londonderry, East, but then reassured by my inspection of schedule 8, which informed me that so long as she did not uproot them I did not have to restrain her from breaking the law on her many excursions into the lanes of County Down.
I hope the Minister will realise that the problem to which I have drawn attention is real and practical, and I trust that he and his advisers will address their minds to it.
1 am
Mr. Chris Patten: I am grateful to hon. Members for their thoughtful speeches on this important and valuable order. The hon. Member for Middlesbrough (Mr. Bell), whom we again welcome to these debates, thought that the order might be a trifle overdue. At least we now have it. It is a good, comprehensive piece of legislation.
The hon. Gentleman said that the voluntary bodies in Northern Ireland were broadly in sympathy with the intentions of the order. I am sure that is right. I am equally sure that it is incumbent on officials in the Department of the Environment to show that we are determined to implement the order's provisions fully and vigorously.
The hon. Members for Belfast, South (Rev. Martin Smyth) and for Belfast, East (Mr. Robinson) understandably introduced a slightly more controversial note into our deliberations with a reference to park hare coursing, on which I recognise that passions run high. As I have told both hon. Members previously, the introduction of provisions on park hare coursing would have been a significant change in the policy content of the draft wildlife order and would, under existing legislative conventions, have necessitated further consultation. That would have seriously delayed progress on the order, and that would have been unacceptable in view of the Government's obligations.
Given the content of the speeches on this subject, I should point out that the objections raised by the Northern Ireland Assembly about certain specific rules and practices of park coursing were discussed with the controlling body, the Irish Coursing Club. I am sure that it was an inadvertent mistake on the part of the hon. Member for Belfast, East, but the rule to which he referred stating that points are given for hares being killed was amended several years ago. It would, therefore, be injudicious to rest an argument on that point.
I understand that the Irish Coursing Club has introduced a number of practical changes this season to bring coursing in Northern Ireland more into line with coursing as practised in Great Britain. The Government believe that voluntary action of this sort is the quickest and most fitting response to the objections to park coursing, and that, in view of this development, it would not be appropriate to introduce legislation on the subject.
As the hon. Member for Belfast, East noted, the ICC has introduced a number of changes in park hare coursing, the effect of which, as I have said, is intended to bring park coursing more into line with open coursing as practised on this side of the water.
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I have looked closely at the law governing coursing. There is no substantial difference between the state of the law in Northern Ireland and the position in the rest of the United Kingdom. When I was first lobbied on this subject, I was told that what was required was not the banning of hare coursing, but the bringing of the practice of coursing in Northern Ireland as far as possible into line with the practice in Great Britain. I was also told — which I dispute — that there is a substantial difference in the legal framework in Northern Ireland compared with Great Britain. Allowing for the differences dictated by topography, the ICC sought to bring it into line.
If hon. Members want to move further and faster and ban all coursing, they should use private Members' legislation, on which they have a free vote. It is nonsense to suggest that that route is not open in connection with Northern Ireland. For example, the Video Recordings Act, introduced as a private Member's Bill, is now the law and applies to the whole of the United Kingdom.
It would not be appropriate to use the order to try to ban park coursing. Since there is no difference between the legal position in Northern Ireland and Great Britain—certainly hares in Northern Ireland are at no legal disadvantage—it would not make sense to depart from our normal procedures.
Mr. Peter Robinson: Like the hares in Northern Ireland, I am thankful that they are not at a legal disadvantage, but they are dying because of the so-called sport which the Minister believes can be rectified only by a private Member's conscience. If the ICC's regulations do not have the required effect, is the Minister prepared to bring in the necessary legislative change instead of leaving it to hon. Members to pray and hope that they might have that opportunity?
Mr. Patten: For reasons which might not always be obscure, I retain the most profound antipathy to answering hypothetical questions. I repeat that when I was first lobbied by the hon. Gentleman and others on the issue, I was told to bring Northern Ireland into line with the practice on this side of the water. It is curious but not surprising, that the argument has been changed —perhaps for understandable reasons—but my answer has to remain the same.
The hon. Member for Isle of Wight (Mr. Ross) referred to article 4(10). My hon. Friend the Member for Harborough (Sir J. Farr) has great knowledge of the subject, and we welcome his contribution. That paragraph makes it possible to protect quarry species during what would normally be the open season whenever exceptional circumstances justify it—for example, in the event of oil pollution of inclement weather, such as we are having now.
I must tell the hon. Member for Isle of Wight that we can encourage a voluntary ban on wildfowling even before the legislation comes into force, as we did successfully in 1981. We were grateful to the parties to that agreement.
I can tell the hon. Member for Londonderry, East (Mr. Ross) that a ban can be applied to small areas of the Province as well as to the entire Province. That takes account of his practical and accurate observation about weather conditions in the Province.
The hon. Member for Isle of Wight referred to the curlew. He and other's, including my hon. Friend the Member for Harborough, will recall that the curlew

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achieved complete protection as the result of an eleventh hour change to the Wildlife and Countryside Act by means of a Lords amendment. The species is more widespread and abundant in winter in Northern Ireland than it is in Britain. There is a tradition of shooting curlew—mainly inland birds, of which there are a large number in Northern Ireland—for food. However, there is no evidence that the species is suffering as a result of shooting, no doubt because the shooting of waders generally is infrequently practised by wildfowlers. The list of birds that may be shot during an open season has been substantially reduced. In the absence of compelling reasons, the curlew's status as a quarry species remains unchanged. That is obviously a position that we shall need to keep under review.
The hon. Member for Londonderry, East spoke quite properly of the importance of teaching children about conservation and wildlife. I wholly accept that. It is our intention to take a much more active role educationally, and we shall be distributing to all schools literature on this order and on the one that we shall be discussing shortly.
The hon. Gentleman asked about automatic shotguns. He was right in thinking that the ban on birds results from the EEC directive. He will probably know that automatic shotguns can still be used for controlling pests and that the ban applies only to those birds and animals listed in schedule 6. The hon. Gentleman explained the practical experience of a shooting man and asked whether there was any evidence of birds being shot after liberation. I can say that there is no such evidence of that happening in Northern Ireland. It is spreading in Europe and we do not wish to see it happening in Northern Ireland.
The hon. Gentleman asked about self-locking snares. I would have had a great deal more sympathy with his argument had he been talking about free-running snares. I share the view expressed by the hon. Member for Belfast, North (Mr. Walker), that self-locking snares are banned under the EEC wild birds directive.
Mr. William Ross: Can the hon. Gentleman tell me how many times he has actually set a snare?
Mr. Patten: I assume that the hon. Gentleman was being literal rather than figurative. I have not made it a practice to set snares. I appreciate that sometimes one is called upon to speak at the Dispatch Box on subjects of which one does not always have such an intimate
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knowledge as some hon. Members. This is clearly one such occasion in regard to snares, about which the hon. Gentleman knows more than I do. I can only say that I received a number of representations about that subject. It may be that views differ, but the overwhelming view agreed with the hon. Member for Belfast, North.
The hon. Member for Londonderry, East asked about article 15. I was interested to hear what he had to say. With the best will in the world, it is not possible for the Government to eradicate the existing species because of their widespread distribution. We are talking not only about animals, but, as anyone who knows and loves Strangford lough will know, about Spartina. The order is designed to prevent the spread of the undesirable species. I hope that we can do that.
My hon. Friend the Member for Harborough spoke from his great love and knowledge of deer. Venison in Northern Ireland can be sold only to a licensed game dealer. I shall write to my hon. Friend giving details of the licensing conditions applicable to game dealers.
The hon. Member for Belfast, North made a powerful argument for conservation. He thought that the wardens, among others, should be given more extensive powers. I am bound to say that I have great personal reluctance towards extending police powers to those outside the constabulary. That is why I resisted arguments from a number of sources to do that in this order.
The right hon. Member for South Down (Mr. Powell) spoke of the importance of being able to identify those species which are referred to in schedule 8. That is a substantial point, of which we shall have to consider how best to take account in our publicity and explanatory booklet that we shall be issuing about the order. I hope that we shall be able to satisfy him that we have done all that we reasonably can to identify the species, some of which, I fancy, are not familiar to either of us.
The right hon. Gentleman spoke of the primrose. He is right to say that the danger is the uprooting or tearing out of primroses which sometimes happens when people want to enhance the quality of their gardens, but at the expense of the countryside. That is why we have included the primrose in the schedule. On that Primrose League point, I commend the order to the House.
Question put and agreed to.
Resolved,
That the draft Wildlife (Northern Ireland) Order 1984, which was laid before this House on 22nd November, be approved.

Nature Conservation (Northern Ireland)
1.16 am
The Parliamentary Under-Secretary of State for Northern Ireland (Mr. Chris Patten): I beg to move,
That the draft Nature Conservation and Amenity Lands (Northern Ireland) Order 1984, which was laid before this House on 22nd November, be approved.
In November 1983, the proposal for a draft Nature Conservation and Amenity Lands (Northern Ireland) Order was published for consultation. Comments were received up to 3 February 1984 and the proposal was considered by the Northern Ireland Assembly, which forwarded its report to the Secretary of State on 28 March last year. The Assembly welcomed the legislation and put forward 20 recommendations for amendment, together with 13 further recommendations seeking assurances largely relating to the implementation of certain aspects of the legislation. Eleven of the suggested amendments are included in the draft order and a number of the other recommendations are covered in substance by the provisions of the order as at present drafted.
I shall refer in due course to the more substantive changes resulting both from the consultation process and from consideration by the Northern Ireland Assembly, but I wish first to thank the hon. Member for Belfast, East (Mr. Robinson) for the contribution that he made to the order.
The Amenity Lands Act (Northern Ireland) 1965, which this order will supersede, is at present the cornerstone of legislation on nature conservation and countryside amenity in Northern Ireland. It was the first piece of legislation of its kind when enacted 20 years ago. In that time notable progress has been made with a planned programme of establishing nature reserves, areas of scientific interest and amenity areas. Several areas of outstanding natural beauty have also been designated.
However, the increasing pressures on the countryside from competing forms of land use and experience arising from the Act's operation over almost two decades have shown the limitations in its framework; amendments are now clearly necessary. These are incorporated in the measure, along with a necessary and perhaps overdue consolidation of the 1965 Act.
The order will bring Northern Ireland broadly into line with the rest of the United Kingdom in matters of countryside, recreation and amenity. It is not possible to do so precisely, because planning control is exercised differently in Northern Ireland. In addition, the executive responsibility in Great Britain for nature conservation and countryside recreation lies with two semi-autonomous bodies, the Nature Conservancy Council and the Countryside Commission. In Northern Ireland that function rests with the Department of the Environment.
However, the new provisions in the draft order draw heavily on Great Britain sources, specifically the Nature Conservancy Council Act 1973, the Countryside Act 1968, the National Parks and Access to the Countryside Act 1949 and the Wildlife and Countryside Act 1981.
It is appropriate at this stage to mention that the publication of the proposal for a draft order prompted a debate on the question whether the existing administrative structure for conservation in Northern Ireland is the most appropriate or whether it could be improved by the
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establishment of a body, or bodies, on the lines of the Nature Conservancy Council and the Countryside Commission. As a result of the interest in this matter, the Department of the Environment of Northern Ireland is currently reviewing the existing structure. It has been assisted by a distinguished and independent expert in this sphere, Dr. Jean Balfour, whose report was published just before Christmas.
The Northern Ireland Assembly, among others, feels that there is considerable merit in the concept of a separate body for conservation in the Province. However, recognising the need for full public consultation following the review, and the desirability of bringing into effect at an early date the many improvements which the proposed order and the related wildlife order would introduce, the Assembly supported the order subject to the recommendations contained in its report. Any necessary alterations to the structure for conservation in Northern Ire Land will therefore be the subject of a further Order in Council in due course. I am sure that we were right to proceed rapidly with this legislation and to consider the matter of structure at a more deliberate pace.
The existing functions of the Department in relation to nature conservation and countryside amenity are narrow. They are limited to the acquisition of lands for nature reserve and amenity purposes and the designation of national parks, areas of scientific interest and areas of outstanding natural beauty. These powers are restated in the order, but article 3 will enable the Department in future to exercise a wider range of nature conservation and countryside functions, similar to those administered by the Nature Conservancy Council and the Countryside Commission.
Article 4 recognises the land use demands of public bodies and requires that such groups, which include Government Departments, district councils and other statutory bodies, should take into account the requirements of nature conservation and countryside amenity in the exercise of their land-related functions. This has a direct analogue in section 11 of the Countryside Act 1968 and reflects an acceptance that the demands of nature conservation and countryside amenity should have the same consideration as other forms of land use planning.
Article 5 establishes a new conservation committee, the committee for nature conservation. It will assume the responsibilities of the existing nature reserve and wild birds advisory committees and will have certain additional functions under this order and also in relation to wildlife protection.
Parts III and IV are mainly consolidation and restate the Department's existing role in relation to amenity lands, national parks and areas of outstanding natural beauty. Consultation requirements in relation to the latter have, however, been considerably widened and fresh powers have been given to the Department to enable it to take more positive action towards the conservation of such areas.
In Part V, article 20 introduces the totally new concept of marine nature reserves and in that respect corresponds to section 36 of the Wildlife and Countryside Act 1981.
The case for establishing statutorily protected marine nature reserves was made at considerable length in the 1979 joint Nature Conservancy Council — Natural Environment Research Council publication, entitled "Nature Conservation in the Marine Environment'. It made the point that some of the primary objectives of

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conservation policy on land have been to conserve representative examples of plant and animal communities, to safeguard sites where research and experiment can be pursued without disturbance and to provide education facilities. It is illogical that such an approach should end at the low water mark, especially in view of the interdependence of marine and land-based life. Procedural instructions to designate marine nature reserves are precise and all power to create a reserve and to confirm byelaws regarding it will be vested in the Secretary of State for Northern Ireland.
For the first time, district councils are to be given the power to establish nature reserves within their areas and to acquire land for that purpose. It has long been a feature of Great Britain law that local authorities have this power and I look forward to district councils in the Province playing their part in conservation matters.
Part VI deals with areas of special scientific interest and its provisions represent the most substantive change in the proposal for a draft order since it was published for consultation. At that time it was recognised that considerable modification of the Great Britain procedure, found in sections 28 and 29, for example, of the Wildlife and Countryside Act 1981, would be required in order to apply it to the Northern Ireland circumstances, in which, for example, the existence of a single-tier structure with the Northern Ireland Department of the Environment responsible throughout, required a single continuous procedure. It was clear that this was a matter that should be fully debated at the consultation stage. Hence, the proposal merely included a provision equivalent to section 28 of the 1981 Act with the Department at the same time encouraging full discussion of the matter through the circulation of a separate consultation paper to the main interests concerned and to the Northern Ireland Assembly. The provisions now included in the draft order are the result of that consultation. The procedure to be introduced will effectively protect areas of special scientific interest in Northern Ireland and at the same time enable the United Kingdom to comply with the requirements of the Berne convention. Parargraph (1) of article 25 eliminates the "three-month loophole" which has caused so much concern on this side of the water.
Rev. Martin Smyth: The hon. Gentleman by-passed article 24. What do people believe to be the significant change? When article 14 was debated in the Assembly, the people's response was that it was better for the power to be discretionary than to be mandatory. A change in article 24 which shows that the power is discretionary rather than mandatory has caused concern. That was not on the list of changes noted in the response.
Mr. Patten: I am delighted to deal with that point, because I know that concern has been expressed in some quarters about article 24 as drafted. When redrafting this provision, it was felt that an enabling power similiar to that used for the creation of national parks, areas of outstanding natural beauty, marine nature reserves, and so on would be appropriate, achieving consistency of drafting within the context of the draft order. That decision was taken in the knowledge that the existing permissive powers in the draft order to which I have referred had not been challenged during the consultation process.
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Our legislation runs together. The procedures in sections 28 and 29 of the equivalent legislation for Great Britain are mandatory in one section and ultimately permissive in section 29 which refers to the powers of the Secretary of State. The procedures give us a more streamlined and coherent mechanism. Nevertheless, I appreciate the concern expressed, so I shall give hon. Members a firm and unequivocal assurance that my Department will exercise its powers over areas of special scientific interest in a manner consistent with the objectives of these provisions. Scientific criteria for the selection of ASSIs are being prepared corresponding closely to those applied in Great Britain. I shall consider it an unshakeable obligation on my Department to declare as areas of special scientific interest all areas that meet those criteria.
We shall need to legislate again shortly if we are to implement, after a suitable period of consultation, the main recommendations in Dr. Balfour's report. If, at that stage, there are any reservations about the way in which we are implementing article 24, we shall be prepared—this is another firm commitment—to amend this order and to introduce a mandatory provision.
The financial provisions of article 29 widen the Department's existing powers to grant-aid voluntary bodies, which are presently limited to those under the Wild Birds Protection Acts (Northern Ireland) 1931 to 1968, to include any body which has among its objects the conservation of wildlife or of the countryside. This is entirely consistent with the position in Great Britain.
I am confident that the order will provide for the more effective administration of nature conservation and countryside amenity matters for many years ahead, although I accept that we may need shortly to introduce, as I have said already, further complementary legislation when we have all had a chance to form a view on the main recommendations of the Balfour report— sensible as I believe their broad thrust to be. I commend the order to the House.
1.29 am
Mr. Stuart Bell: I am grateful again for the manner in which the Minister has taken us through the draft order.
There are two important aspects of the order. One is that it seeks to bring into line, as the Minister said, the nature conservation legislation in Northern Ireland with that in Great Britain. As he pointed out, it goes somewhat further, because it rectifies some of the weaknesses and loopholes that have become apparent in the Wildlife and Countryside Act 1981, and, not for the first time, we see legislation pertaining to Northern Ireland somewhat ahead of its counterpart on the mainland.
The other important aspect is that we meet our international obligations. We meet the obligations placed upon us by the European Community directive on conservation and wildlife and also, as the Minister said, the Berne convention.
The Minister was kind enough to take us through the consultation procedures which went on for about a year. There were therefore extensive consultations. The Northern Ireland Assembly Environment Committee subjected the order to detailed scrutiny. Amendments were made and, in general, the order was welcomed by those who have nature conservation at heart.

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Notwithstanding that extensive consultation, one word in the text has been changed and the Minister met head on the point and the problem that that change might have brought about. He referred to consistency of draftsmanship. The word "may" has been placed in article 24, rather than the word "shall". Thus, powers which might have been mandatory have become discretionary. Discretion is always the better part of valour; free will is better than coercion; and thou mayest is better than thou shalt. It was the entire philosophy behind the play by Henrik Ibsen and a novel by John Steinbeck. The play by Ibsen was called "The Lady from the Sea" and the novel by Steinbeck was called "East of Eden". However, in relation to nature conservation and amenity, the change may be regrettable.
As the House is aware, article 24 deals with areas of special scientific interest. On the mainland, as the Minister said, the Nature Conservancy Council has a duty to notify sites which are of special scientific interest. Article 24 declares:
"Where the Department, after consultation with the Committee for Nature Conservation, is satisfied that an area of land is of special scientific interest, by reason of its flora, fauna or geological, physiographical or other features, and accordingly needs to be specially protected, the Department may make a declaration that the area is an area of special scientific interest."
The change in the wording from "shall" to "may" raises a number of issues on which we require elucidation.
Why was the change made after the consultation procedures had been completed? Why were interested parties not informed that the change had been made, but left to discover it only when they read the draft order published and delivered to the Palace of Westminster? Has the change in any way altered the obligation placed upon Her Majesty's Government by the European Community directive? Is the order still in line with the Wildlife and Countryside Act 1981? If it is not, is it proposed to alter the Act to bring it into line with the order?
The Minister has explained why the amendment went into the text unannounced, but has it been before a Standing Committee on Statutory Instruments? If the change was brought to the attention of the Committee, what, if any, were the comments of members of the Committee?
There can be little argument that when the order was originally published—and, indeed, even in accordance with the Amenity Lands Act 1965 for Northern Ireland—the Department of the Environment had a statutory duty to notify land as an area of scientific interest where that land, in its opinion, was required to be protected because of the wealth and richness of both flora and fauna. Now that that duty has become discretionary rather than mandatory, it gives the impression that there is a weakening of the sense of responsibility towards nature conservation in Northern Ireland. Having been brought in without consultation, it creates what the Royal Society for the Protection of Birds describes as
"a very dangerous precedent"
and one which
"undermines the good which has been done to improve the orders during the consultation."
I believe that the Minister's statement will go some way towards modifying that attitude, but, nevertheless, the point should be made.
The reasoning behind the change in the wording is further called into question when Ministers have argued in the past that the notification of land of special scientific interest is simply declaratory of its scientific value, rather
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than a decision as to its future management, but such designation is also of benefit to the landowner or farmer, for without that designation no information at all is forthcoming on the reasons for the site's value, and no advice can be given on future management. Indeed, no compensation would be available if permission were refused for further changes of land use in such an area.
Notification of some sites and failure to notify others of similar importance—an inevitable outcome of a may or may not policy—will cause confusion and increase rather than reduce concern over those valuable sites. In addition there are appropriate safeguards for the interests of those landowners and occupiers, including compensation where necessary, and those come into play at a later stage if and when there is a development proposal on the table to be considered.
Before leaving the subject I can do no better than quote from the Royal Society for the Protection of Birds, which declared:
"We are at a loss to understand why the wording of article 24(1) has now been changed, and are moreover deeply disturbed by the perplexingly unorthodox way in which the change was introduced — tardily; unannounced; contrary to the expectations of the Northern Ireland Assembly; without consultation with any of the interested parties."
It is hardly surprising, in those circumstances, that the Royal Society for the Protection of Birds pressed for the withdrawal of the order and its resubmission in the form which originally contained the word "shall" rather than the word "may" in article 24(1).
As I mentioned earlier, in some ways the order is ahead of the Wildlife and Countryside Act 1981, for that Act contains a recognised loophole. It became known as the three-month loophole; that is to say, during a three-month consultation period any owner of land subject to such a notification under the Wildlife and Countryside Act 1981 might modify the land if he so wished. That would or might be to the detriment of conservation. In addition, he might do so without sanction. That preoccupied those Ministers responsible for the operation of the Act, and they are prepared to modify it when parliamentary time allows. Indeed, it may be that they will take advantage of the excellent private Member's Bill which my hon. Friend the Member for South Shields (Dr. Clark) proposes to introduce to reform the 1981 Act.
The order is ahead of that Act because of the inclusion of articles 25 and 27. Article 25 prevents the owner or occupier of any land from tampering with it once there has been a declaration, and for so long as that declaration remains in force he cannot carry out, cause or permit to be carried out, on his land any operation or activity without written consent. My hon. Friend the Member for Wentworth (Mr. Hardy) introduced a private Member's Bill to modify the Wildlife and Countryside Act 1981 along the lines now defined by article 25 of the order. His Bill has now been superseded by that of my hon. Friend the Member for South Shields.
Should the Government take on board all the elements of the private Member's Bill of my hon. Friend the Member for South Shields, thus tightening, for example, the laws to prevent badger digging, empowering the Ministry of Agriculture, Fisheries and Food and the Forestry Commission to give Government grants for conservation practices—
Mr. J. Enoch Powell: What about Northern Ireland?
Mr. Bell: If the right hon. Gentleman is patient, I shall come to the matter to which he refers.
I was saying that should the Government tighten laws, empowering the Ministry and the Forestry Commission to give Government grants for conservation practices and making it easier for the Nature Conservancy Council to declare marine nature reserves, will those changes in the Wildlife and Countryside Act be followed by another order for Northern Ireland?
I should like to draw the attention of the House to article 20. Under the Wildlife and Countryside Act, it was thought desirable that there should be created marine nature reserves. The Minister referred to that in his explanation of the order and said that powers would be vested in the Secretary of State. Yet, because of the system of consultation on this side of the water, no marine nature reserves have been created. Are the provisions in article 20 the same as under the Wildlife and Countryside Act, and, if so, how many marine nature reserves does the Minister expect to be created in Northern Ireland as a result of the legislation?
Over and above the criticism which the Minister has taken on board and sought to assuage, a great deal in the order is welcome. We have seen that the habitat provisions of the order provide the long-awaited strengthening of conservation legislation in Northern Ireland. We are complying with our international obligations. We are witnessing, therefore, a significant stage in the development of conservation in Northern Ireland, and it should be further said that the order constitutes an efficient and practical framework for, to quote the RSPB again,
"wise land-use planning and the conservation of natural resources".
However, two questions remain to be answered. Will this order and the Wildlife (Northern Ireland) Order be implemented? The Minister gave an assurance that the latter order would be. Secondly, will the resources be made available so that the orders can be fully implemented? There is an ungenerous suggestion abroad that the reason for the significant word change in article 24 from "shall" to "may" was based on resource considerations; that it would cost less to have a discretionary rather than a mandatory power placed with the Department of the Environment.
I am sure that the Minister would wish to take an early opportunity to refute such a suggestion. Nevertheless, it lingers on in the minds of those who have been involved in the consultative procedures. Any categorical assurances that he can give would be most welcome. They would be even more welcome if the Minister were to confirm that the resources overall will be available to implement the orders. These resources should mean greater staff and greater finance so that the conservation effort in Northern Ireland can be strengthened, rather than simply maintained. A desirable goal would be one where these resources were on a par with those available on the mainland.
We therefore join the Minister in commending the order to the House. We note the statement that he made in relation to the mandatory exercise of the power under section 25. He has offered to change the wording of that article in a future Order in Council if that is the appropriate course of action for him to take. We welcome that suggestion and, as he has done, commend the order to the House.
1.45 am
Mr. Peter Robinson: I am placed in the same embarrassing situation in which I was placed on the last order: while I naturally welcome the vast majority of recommendations contained in the order, I have one gripe. That flows, perhaps regrettably, from the procedures that are applicable to Northern Ireland business. The Minister will be aware, although the House may not, that while in the case of the last order I concentrated on dealing with what the Minister did not do, he did in fact accept 55 of recommendations of the Assembly.
In the case of this order, of the 33 recommendations of the Assembly, the Minister accepted 29. I leave to one side, perhaps ungenerously, those recommendations which he did accept and shall consider the areas in which we still have some difference of opinion. Nevertheless, I place on record the grateful acknowledgement of most people in the Assembly and in the Province of the contents of the order, which embraces two main themes, the first dealing with the structure of conservation in Northern Ireland and the second dealing with the protection of areas of environmental importance.
On the structure of conservation in Northern Ireland, I take some heart from a comment that the Minister made concerning the report of Dr. Jean Balfour. I have had the opportunity to read that report. I was relieved at the end of doing so because I am holding the ring, as it were, between colleagues in the Assembly and have to part my party leader from certain other colleagues; in other words, considerations of agriculture have been weighed against those of the environment. That Dr. Jean Balfour has steered what I consider to be a fair and balanced middle course helps me out of many difficulties that I might have experienced when the report is debated in the Northern Ireland Assembly.
I trust that, when I put this forward as a personal view, the Minister will accept every letter of it rather than putting it into the melting pot and considering afresh what emerges at the end of the process. I take encouragement from the fact that in relation to article 24 the Minister said that, if there were any reservations when he came to legislate for the structure of conservation, he would take that into consideration. This clearly shows that in his office he is already contemplating legislation for the structure of conservation. I for one would be eager to hear from the Minister at what stage that may be expected. More important, following the comments from the Opposition, does he believe that the resources for that structure can be found within his budget? I appreciate that there is pressure from priority areas such as housing and all too often conservation becomes a scapegoat and is left out when finances are allocated. I hope that the Minister will be able to say that it will be possible to meet the Balfour report in terms of finance.
In my discussions in the Assembly I discovered that the chasm that I had imagined between agricultural and environmental interests did not exist, that there was a great deal of common ground between them and that the two terms were not necessarily mutually exclusive. Indeed, many strong conservationists are members of the agricultural community and some of the best protectors of the natural habitat in the Province are farmers. I was pleased to find that the Ulster Farmers Union, the

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Agriculture Committee of the Assembly and even the Department of Agriculture in many ways were not unsympathetic to proposals to protect the environment.
The problem, however, is the unfortunate change of one word in the order. Again, this shows the weakness of our parliamentary procedures. Even when the Minister agrees that the word should not be as it is and the House would clearly be prepared to accept the change to which he has referred, he cannot do anything about it because Orders in Council cannot be amended, however sensible the amendment may be.
For once, the situation cannot be blamed on the Assembly, however much any hon. Member may wish to do so. The proposal for a draft order considered by the Assembly was perfectly satisfactory as it used the mandatory "will" or "shall" rather than the permissive "may". The Assembly made no recommendation because it was satisfied with the proposal, having had the advantage of both written and oral evidence from the Minister's Department which at no time referred to any proposed change in the wording.
None of the conservation and amenity groups made any comment on the matter because they, too, were perfectly satisfied. Indeed, we were aware that the 1 965 Act was mandatory. as was the 1981 Act for Great Britain, so it was logical that the Northern Ireland order should take that form as its main purpose was to bring Northern Ireland into line with Great Britain. Suddenly, however, somebody somewhere in the Department brought out a rubber and a pencil and changed a proposal that had left everyone quite pleased into one that has alarmed the vast majority, if not all, of the conservation and amenity groups and bewildered many of the rest of us.
I recognise that the Minister in good faith has given an undertaking to the House. That is on the record and I know that he will stand by it. No matter how many of us may wish it, the Minister will not be with us always. He is undoubtedly destined for higher things. He may not be there to ensure that the guarantee that he has given to the House, and which the House no doubt accepts, will be upheld in the same spirit by his successors. The hon. Gentleman might—heaven forbid—even be succeeded by an hon. Member of another party, who might not take the same generous view of the interpretation of the legislation.
I hope that the Minister will tell us tonight that, regardless of whether there are major reservations, he will, when he finds that he can legislate for the Balfour report on the structure of conservation, correct this unfortunate mistake in the legislation and ensure that those who follow him have the strength of statute behind them when they take decisions.
I do not believe that the Minister was trying, by sleight of hand, to put one over on the Assembly, the conservation groups or the amenity organisations in the Province. Here is a way in which he can prove to us that I am right.
1.56 pm
Mr. J. Enoch Powell: I join the hon. Member for Belfast, East (Mr. Robinson) in looking forward to the day, which is visibly coming closer, when the law in Northern Ireland will be made in a manner which enables it to be debated and amended in detail as is the law for the rest of the United Kingdom. Indeed, it was part of the encouragement of this evening's proceedings to have learnt that the Liberal party is now in
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favour of legislating for Northern Ireland, wherever practicable, within a United Kingdom Bill. Things are looking up, and we may not have to take part in niggling debates such as this for ever.
When there is a good row going on over a word—the argument between "may" and "shall"—the temptation to join in is irresistible. When I heard reference to the Royal Society for the Protection of Birds, it occurred to me that there was a case for a royal society for the protection of parliamentary draftsmen. They are, as Dr. Johnson once defined a lexicographer, "harmless, necessary drudges" and it is only right that from time to time a word should be said in their favour. This evening, that is a task that it falls to me to take up.
I have read article 24(1) of the draft order without any inhibition caused by having previously considered a different draft, and I notice that the conditional part of that paragraph is voluntary. It is discretionary. For "Department" we have to read "Minister", doing the usual voodoo—that is now the in word—which is prescribed by the Northern Ireland Act 1974. The paragraph begins:
"Where the Department is satisfied that"
such and such. We then proceed to the main sentence, of which the verb is now "may".
It seems to be self-evident that if a condition is discretionary, the act itself must be discretionary by nature and that, if the draftsman had originally written "may" he would have been acting in conformity both with good sense and with the drafting practice that, in other statutes, we have been accustomed to who in our younger days happily moved amendments to leave out "may" and insert "shall" and made such speeches as have been heard in the Chamber tonight.
I do not believe that there is anything wrong with paragraph (1) of article 24. What is wrong—this has come out in the debate — is the awkward manner in which the drafting was brought into consonance with logic and common practice at an awkward stage in the gestation of the order. This too is something which we would have avoided if we were legislating in the normal manner, for if we were legislating in the normal manner it would have fallen to the Minister in charge of the Bill first to decide whether he wanted to alter the drafting at any particular stage and then to come forward to Committee and move his amendment in the open. All of the speeches would then be recorded in the indelible pages of Hansard and there would be no suggestion of disappointment and no tremors of alarm would have run through the observing public as they have done as a result of this drafting alteration.
I hope that the Minister will take comfort from those remarks and also from the generous and comprehensive démenti of any other intention but that always expressed in relation to this article which he offered to the House.
I should like to raise with the Minister the relationship in this order between the functions of the Minister, or Department, and the functions of local authorities. Far be it from any hon. Member on this Bench to query powers entrusted to local government in Northern Ireland, but even when we see such powers entrusted, as they are in two places in this order in respect of nature reserves and areas of outstanding natural beauty, it is pertinent to inquire what is to be the division of responsibility and how that is to work out between the Minister and district councils. If the Minister is to make up his mind as to the nature reserves that need to be created, what scope is there to be for the district councils similarly to arrive at their

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own conclusions to create nature reserves? Are we to have competitive creation of nature reserves between local authority and Department; or is there some gradation of the desirability of nature reserves whereby the higher level of necessity will be met by ministerial decision and the lower level will be left to the discretion of the local authority? It seems to me that, with this order, we are entitled to some indication from the Government of the manner in which they believe these concurrent powers will be exercised by central and by local government.
The concurrence in the matter of nature reserves is on the face of the order. In the case of areas of outstanding natural beauty, the concurrence is between the powers in this order and some of the powers in the Access to the Countryside (Northern Ireland) Order 1983.
I draw the Minister's attention, and that of the House, especially to the provisions in paragraph (5) of article 14, which empowers the Minister to formulate proposals for, among other things, promoting the enjoyment of areas of natural beauty by the public and
"providing or maintaining public access to it."
That latter provision is directly concurrent with the powers of local authorities under the access to the countryside order. It would be helpful if there were a certain statement of policy in that respect from the Government, especially as—in this I find myself in agreement with the hon. Member for Middlesbrough (Mr. Bell) — the financial provisions in this order appear to be extraordinarily vague. Indeed, they are difficult to understand.
When one considers the financing of the provisions to which I have drawn attention, one learns in article 29 that the Department may
"make grants to any body of persons"
and
"give financial assistance by way of grant or loan".
There seems to be a strange inapplicability of the wording of that provision to the direct operations of the Department itself. It looks as if it were a provision of finance purely for the assistance of secondary bodies or secondary functions under the order. I hope that when he is replying to the hon. Member for Middlesbrough the Minister will be able to clear that up. I do not think it would be reasonable to expect him to offer in numerical terms any forecast or specification of the cost of implementing the order in successive financial years, but I think the House ought to understand better than it is easy to do from article 29 how the application of the financial provisions will work.
I return to the concurrence of powers for providing access to the countryside so as to utter a cautionary note which may have financial applications. About a year ago the Minister and I were in correspondence, helpful as correspondence with the hon. Gentleman always is, if I may say so, on access to the countryside in one of the areas of the most wild and glorious natural beauty in the most beautiful constituency in the United Kingdom, namely, South Down. I have in mind the Trassey valley in the Mourne mountains where public access exists, always has existed and should be properly preserved and safeguarded, if that were necessary.
Unfortunately, the result of unregulated public access is to bring considerable loss and damage to those who earn their livelihood or part of their livelihood from that countryside who happen to be members of one of those
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syndicates which for historical reasons control the use of the uplands in that part of the Province. They find that the unregulated access along undoubted rights of way to the joys of the countryside in that area results in damage and loss to themselves, simply because those who have access do not restrict themselves to the right of way nor their activities to enjoying the country but go as far field as to collect firewood by demolishing fences and making fires for cooking and other purposes with the result of their ravages.
The correspondence between the Minister and myself terminated somewhat unsatisfactorily in February of last year with a reference to the fact that the district council could make an order, the terms of which could be agreed with the users of the land concerned. That left completely at large who was to do the policing of this access to the countryside and where the financial burden would be borne of any loss which rested with the users of the land as a result of the access that was accorded.
So we are brought back, not surprisingly, to finance in the end. One would wish to know how far the Department will stand behind the district councils in whatever is to be their distinct function, as opposed to the Department's own function in exercising the duties which can be undertaken under the order. I know that this is a problem to which the Minister has been alive. I place it upon the record deliberately because, though I agree with the hon. Member for Belfast, East that good agriculture is one of the best forms of conservation and enhancement of the amenity of the countryside, we must remember that there is always an attendant potential penalty which accompanies all these well-intended and desirable measures. That penalty is often not spread over the whole community but falls on individuals and specific groups to whom it is also our nature to have regard.
As well as giving sympathetic attention to these matters in his administration of the order, I hope that the Minister will also be able to make an illuminating reference to them when he replies.
2.10 am
Sir John Farr: One of the most welcome features of the Wildlife and Countryside Act 1981 was the firm requirement relating to SSSIs. This order contains a similar form of site of special scientific interest known as an area of special scientific interest.
I wish briefly to back up what has been said about article 24. The Royal Society for Nature Conservation, the national association of the nature conservation trusts, is concerned about the change in the wording to "may". It regards the change to be of such fundamental importance that it would like to see the order withdrawn and a new one introduced.
Unlike the House, it has not had the benefit of the Minister's explanation and his firm and generous undertaking that he will look at how this works. He also said that in any event he would be introducing new orders and legislation in relation to wildlife and countryside matters in Northern Ireland and that, if any concern still existed at that time, he would put the matter right.
However, it should be put on record that the Royal Society for Nature Conservation feels that, as the order is currently drafted, criteria other than scientific ones could easily creep into the decision about whether or not an area was scheduled. For example, it would be easy for a site

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with potential for industrial development not to be scheduled, thereby losing any benefit it might have received from an official label as to its importance.
These are the fears of the national association of the nature conservation trusts, a not unimportant body, which has been closely concerned with the hammering out of the structure of the order. While I know that it, like me, willingly accepts the undertaking that the Minister has already given, I hope he will recognise that this concern is widespread on both sides of the House.
2.14 am
Mr. Stephen Ross: I do not wish to labour the point about article 24, which has been referred to by every hon. Member who has spoken so far. However, this first-class order has a shadow hanging over it because of the change in the wording from "shall" to "may". Most people think that it should be "shall", as that more clearly reflects what was intended.
The Minister went a long way to assure us, but his words will be read over and over again, not only by the Royal Society for the Protection of Birds, but by the Royal Society for Nature Conservation and many others who are concerned about any weakening of the order. I hope that the Minister will give us further assurances when he replies.
One of the failings of the Wildlife and Countryside Act is the lack of adequate resources provided to the Nature Conservancy Council and to a number of qualified people on the ground. That has now been met by an additional £7 million being made available to the NCC. That will allow it to take on at least another 100 staff.
The Royal Society for the Protection of Birds reckons that in the Countryside Commission, the NCC and the national parks about 2,000 people are deployed on conservation matters in Great Britain. However, it calculates that only 27 such people are deployed in Northern Ireland in the Department of the Environment, and they are spread about and have different obligations. The right hon. Member for South Down (Mr. Powell) wondered where the money would come from to increase the numbers. More people will be needed if the measure is to be properly implemented.
Will it be possible to extend the work of the NCC to Northern Ireland? I hope that that will not be thrown against me as another Liberal suggestion. I do not see why the NCC should apply only to Great Britain. I do not want to reflect on the abilities of the members of the proposed committee on nature conservation, or on the Ulster Countryside Commission, but they will act merely in an advisory capacity and not operate on the ground carrying out orders.
Has the Balfour report been published, and will people other than hon. Members be able to make representations about it? Will there be adequate consultation? I assume that interested parties will be able to make representations to Ministers. I hope that discussions will be fruitful and that the error in article 24 will be remedied. I welcome the step forward. Northern Ireland is now ahead of the rest of the United Kingdom, and that is a jolly good thing.
2.17 am
Mr. A. Cecil Walker: I have studied the order, and I commend the Government on their efforts in support of the principles of conservation and provisions for Northern Ireland.
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Some aspects of the order concern me. As that concern might be due to my ignorance, I should be pleased if the Minister could clarify one or two matters.
I am interested in marine nature reserves, so I was happy to read in article 21 (2) (a) (ii) on page 16 that provision may be made
"for prohibiting or restricting…the doing of anything therein which will interfere with the sea bed or damage or disturb any object in the reserve."
I agree with those sentiments, but I should like clarification of article 21 (5) on page 17. That states:
"Nothing in the byelaws so made shall make unlawful…anything done more than 30 metres below the sea bed."
I should have thought that anything done below the sea bed would interfere with any marine reserve.
Perhaps it refers to the safety of a vessel. It is not unlawful to discharge any substance from a vessel. Paragraph (4) (a) says that it is not intended to
"prohibit or restrict the exercise of any right of passage by vessel other than a pleasure boat".
I do not know what difference there can be between a pleasure boat and a commercial boat. They are boats and they can cause problems in a marine reserve. They can erode banks and disturb the inmates. That seems to be recognised in article 30 (3) (b), which says that the Department
"may prohibit or restrict, either generally or in a manner specified in the bylaws, the use of mechanically-propelled vessels on watercourses in, or whose shores lie within, any such land".
The order states that a watercourse
"includes tidal and coastal waters, rivers, canals, lakes and reservoirs."
I am pleased that arrangements can be made to provide grants to any body of persons involved in conservation, as that will encourage active participation in the protection of our habitat. It will be welcomed by all those interested in that part of our environment.
2.20 am
Mr. William Ross: I had intended to follow the hon. Member for Belfast, East (Mr. Robinson) and berate the Minister about the change from "shall" to "may". They are always good words on which to base a few remarks. However, my right hon. Friend the Member for South Down (Mr. Powell) has already given an explanation that I have not yet fully digested. I have no doubt that the Minister, who has greater back-up than I, will have sorted it out and will have his own views. Having said that, the information that we have been given is that nature conservancy in Great Britain has a statutory duty to declare an ASSI.
I do not yet understand whether there is a difference between the end result in Great Britain and Northern Ireland. I welcome assurances, but Ministers and Governments change. However, a statutory right would remain unless it was brought before the House and changed. For that reason, I am unhappy and want to hear rather more about it.
I wish to ask one or two questions about finance. Under article 7, the Department may make grants either by way of the Department of the Environment or otherwise to the National Trust for the acquiring of land. Under article 29, the Department of Finance and Personnel may make grants
"to any body or persons (not being a body carried on for profit) having among its objects the conservation of wildlife or of the countryside."
That does not have to be the only objective of the body; it is only one of several. Organisations may have more

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than one interest and they may not be universally loved, even if the Government are prepared to give them money. One wonders whether any grants, loans and financial help will be used in a way that might be detrimental to the desires and wishes of others who might have an interest in that same land.
The Government are giving a financial advantage, even if it is only an offsetting financial advantage. Heaven only knows when money goes into an organisation what the end result will be. I am always unhappy about such measures. I would prefer the Department to have taken direct responsibility for those matters rather than subsidise someone else to do it. It would be simpler and more straightforward for the individual directly responsible to be on the Government Bench so that we could question him. However, instead, the matter is dealt with at arm's length and hon. Members can be fobbed off. The Department of the Environment is the proper body to take direct responsibility for those lands.
There is the whole question of covenants and management agreements. As time is running out, I shall not go into that matter too deeply. I wish to draw to the attention of the fanning community in Northern Ireland that once such a covenant or management agreement is entered into, it is permanent. Therefore, there is a permanent loss to the landowner. It is doubtful whether the successors in title would in all cases be happy that an agreement had been made. I would not as a landowner wish to make any commitment which extended beyond my lifetime, as one has no way of knowing what the next generation will do or what the end result might be. The farming community will need to consider this matter deeply before entering into any commitment.
It will be possible under article 19, by byelaw, to prohibit
"the shooting of birds or of birds of any description within such area surrounding or adjoining the nature reserve".
How will that work? What is meant by "area surrounding"? How wide will be the boundary of land which is not under the direct control of the body which controls the nature reserve? Will it be 100 yards, one mile, or what? Sportsmen will want to have that made clear.
There is the problem of seals in relation to marine reserves. The Under-Secretary will be aware of the problem with seals on the west coast of Scotland. While they may not pose a major problem off the coasts of Northern Ireland, they are of concern to salmon fishermen. These problems are well known to the Minister. I should not like the position to be reached when everybody loved the seals so much that they forgot about the fish and the fishing communities.
Mr. Chris Patten indicated assent.
Mr. Ross: I am glad to see the Under-Secretary nodding in agreement.
In Scotland, the needs of fishermen are being ignored, and the right of seals to multiply for ever is being greatly respected. I hope that the Minister will give an assurance that easily understood regulations will be laid to enable everyone to understand what is an adequate number of seals—or of any species of wildlife in a reserve—so that numbers may be kept to reasonable levels.
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As other hon. Members have said, the implementation of these provisions will depend on money being available. As this is partly an exercise in centralisation, I hope that the money will be forthcoming.
What demands are placed on us in this connection by the EEC and the Berne convention? Only in the Minister's closing remarks on the preceding order did it become plain that the real reason for introducing the ban on snares and automatic shotguns was the demand of the EEC. That, in my eyes, was enough to condemn the proposal straight away.
2.24 am
Mr. Chris Patten: I am grateful for this opportunity to respond to the debate.
The hon. Member for Middlesbrough (Mr. Bell), in an interesting speech, said that he thought that we were, by the order, improving on Great Britain legislation, and that was a fair point for him to make. He then said—this point was made by a number of hon. Members—that appreciation of the progress that we were making by the order had been somewhat undermined by the terms in which article 24 had been drafted.
There is not much point in my seeking to adduce once again the reasons for the choice of words in article 24. I must clearly take responsibility for what happens in my Department and for the terms in which its legislation is drafted. I have listened carefully to the views of hon. Members, especially to those of the right hon. Member for South Down (Mr. Powell), who made, I think, his inaugural address on behalf of the royal society for the protection of parliamentary draftsmen. He put the point rather better than I could have done.
I appreciate that suspicions have been aroused by the drafting of article 24. The hon. Members for Belfast, East (Mr. Robinson) and for Belfast, North (Mr. Walker) have voiced them with their customary civility. I assure the hon. Gentlemen that their suspicions are groundless. However, I should not want them to blight what has been an agreeable occasion, or what is important and valuable legislation.
In the circumstances, it is reasonable for me to go further than I went in my earlier remarks and to give the undertaking that when we bring forward legislation, as we shall be obliged to do in due course to implement the Balfour report, we shall amend the wording in the article so that it takes account of the arguments that have been advanced. I hope that that will be regarded as satisfactory by the House. The issue was taken up also by my hon. Friend the Member for Harborough. (Sir J. Farr) and by the hon. Member for Isle of Wight (Mr. Ross). I hope that my undertaking will reassure those who understandably, are anxious. In the meantime, I repeat that my Department regards it as an obligation to declare as ASSIs all areas which meet the criteria which we shall be drawing up.
Mr. William Ross: As the Minister knows, there appear frequently from the departments of the Northern Ireland Office various orders which contain mistakes. Subsequently we receive a small slip which tells us that there is a error and that a word should be substituted for the one printed in the order. Can that not be done in this instance?
Mr. Patten: No. As always, the hon. Gentleman has made a seductive proposition, but it is not one that will lure

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us into his boudoir. I wish that life was that simple and straightforward. I have noted what hon. Members have said during the debate, and my response is given on behalf of the Government. The hon. Member for Belfast, East said that I might be taken away to higher things. I assure him that, like my hon. Friend the Under-Secretary of State for Health and Social Security, who preceded me at the Department of the Environment for Northern Ireland, there is no more important Department than that for which I am responsible.
The hon. Member for Middlesbrough referred to marine nature reserves. The provisions relating to them are the same as those in the Wildlife and Countryside Act. Surveys are being undertaken to determine the criteria for the reserves and to identify potential reserves. We are all too conscious of the problems which have been faced on this side of the water. Monitoring is taking place, and should similar problems arise in Northern Ireland we shall seek to remedy the position, especially in the light of future changes that are made in Great Britain legislation.
The hon. Member said that in order to implement this legislation fully we would need, as the Balfour report suggested, to provide resources of manpower and cash. I accept that point, which the report agrued strongly. It would be injudicious and dishonest of me to pretend that the sky is the limit in providing resources. Nevertheless, I appreciate the fact that we need to do more and that, even while my Department has other pressing priorities, we need to commit greater resources. I am bound to confess that I doubt that the increase in resources will match what people will press us to provide.
The hon. Member for Isle of Wight referred to the Balfour report. I shall ensure that he is sent a copy. We shall welcome representations from everyone. I doubt that we could stop any representations. We look forward to the representations that we shall receive about that extremely thoughtful document, which was highly commended by the hon. Member for Belfast, East. I welcome the broad thrust of the document's proposals. Legislation will be required to implement them.
The right hon. Member for South Down referred especially to the relationship between the functions of the Department of the Environment and those that will be discharged by local authorities. He had in mind particularly the functions referred to in article 22, which follow the position that has obtained in great Britain since 1949. Clearly, we shall need to proceed, wherever possible, by agreement. The Department of the Environment will continue to establish nature reserves of national standing. Nature reserves of local status can be established by district councils. We shall encourage district councils to use the grants that we provide to enhance and control public access to areas of outstanding natural beauty.
The right hon. Member for South Down mentioned the loss of amenity by misuse by visitors to Trassey valley. The district council in that area may have a range of service grant — aided by the Department of the Environment. Where the district council makes an access agreement with a landowner, such as in the case to which the right hon. Gentleman referred, it takes over responsiblity and public liability for that land. I shall look again at that case. I should like to think that we could be helpful, working with the district council or with the
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Mournes advisory committee, because I share the right hon. Gentleman's regard for and love of that area, even though I do not yet share his knowledge of it.
The right hon. Member for South Down asked about total expenditure. It is difficult to be precise. The order contains five new powers under which financial aid may be given, first, to district councils to acquire land for nature reserve purposes; secondly, to landowners tinder management agreements in respect of ASSIs; thirdly, to the owner of an estate in an agricultural unit who can show that he has suffered a reduction in the value of his estate which is directly attributable to the declaration of an ASSI; fourthly, to the owner of any estate in land comprised in an ASSI who can show that he has incurred loss or damage or abortive expenditure as a consequence of an extension of the initial three-month period of restriction or negotiation; and, fifthly, to voluntary conservation bodies and individuals under article 29. We are setting aside funds for those items in the financial year 1985–86. At this stage it is a little difficult to be precise about figures. We shall not be able to define the financial requirements accurately until the order has been in operation for a year or two.
I repeat what I said earlier to the hon. Member for Middlesbrough, that I recognise that we will have to commit more resources out of our fairly hard-pressed budget if the provisions in this legislation are to have the effect that we should all like.
The hon. Member for Belfast, North asked about local marine nature reserves and the possible interference with the passage of shipping, including pleasure boats. I hope that that will not occur. The right of innocent passage, as the hon. Gentleman will be aware, is an international obligation under the 1958 convention on the territorial sea and the contiguous zone. The byelaws that we shall produce cannot override international obligations to which we are a party. I hope that it will be possible to proceed in these matters by co-operation.
The hon. Member for Londonderry, East (Mr. Ross) asked about article 7. The National Trust is mentioned because of its statutory base. As the hon. Gentleman will be aware, it is established under an Act of Parliament. He also asked about article 22. The principle of giving grants is to encourage more bodies and individuals to be actively involved in conservation. He mentioned marine nature reserves, and there will, of course, be full consultation to determine marine nature reserves. We have provided for public inquiries before they are specified. Therefore, I hope that the relevant points that he mentioned can be dealt with during those consultations and the process of inquiry.
I shall conclude with the last sentences of the report by Dr. Balfour, which has been mentioned so often this evening. In her last sentences she wrote that
"the opportunities for change provided by the Access to the Countryside (Northern Ireland) Order 1983 and the two Draft Orders must be grasped and the chance to develop new relationships in the countryside seized with purpose and understanding. Such initiatives can benefit those who live and work in the Northern Ireland countryside and those who visit and enjoy it, but most important of all will be the contribution to the quality of life in the Province. To do this requires a will at political and departmental level to change, and a commitment to provide the resources to do the job."
My Department looks forward to meeting that challenge and to providing the commitment which I know will be available from those who work in my Department.

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It is my task to ensure that there are enough of them and that they have the resources to do the job which to date they have done so competently.
Question put and agreed to.
Resolved,
That the draft Nature Conservation and Amenity Lands (Northern Ireland) Order 1984, which was laid before this House on 22nd November, be approved.

Home Improvement Grants
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Garel-Jones.]
2.43 am
Mr. Austin Mitchell: The subject for my Adjournment debate is simple. Selling home improvements has become a high-pressure business, with high pressure at the door, through advertising in magazines and all the other advertising techniques. People offer guarantees. On double glazing, the guarantee can be for five years; on damp proofing it can be for 10 to 15 years; and on house extensions it can be for 10 years.
Such guarantees are a big inducement. They are featured prominently in many advertisements. I have one for Wallguard damp protection products with a huge "Stop it" guarantee for 30 years which claims that Wallguard unconditionally guarantees the treatment carried out to eliminate rising damp for 30 years. That advertisement appeared in the Sunday Express colour magazine on 2 December, 1984, and that same week Wallguard went into liquidation. Thereby hangs my tale.
Not only are many of the guarantees vague; they suffer from limitations of cover. People are guaranteed in the sales talk that there will be no condensation if double glazing is installed, and when the guarantee arrives it does not cover condensation. People suffer from exclusions of liability for consequential losses. If the damp coursing does not work and the whole room has to be redecorated or replastered, often that is not covered by the guarantee. Some of the guarantees are unenforceable without the assistance of a good lawyer, and all of them are only as good as the company that offers them. They are meaningless with a bad company that does not live up to its obligations; they are all right in the case of a good company. But they are all useless if the company goes bust, because they give the holders no right and they give the holders no claim, and as creditors the holders have no status. The guarantees effectively die with the company. But the problems caused by inadequate workmanship or faulty goods linger on.
Therefore, the question is: how can we guarantee the guarantees? It is an important question to anybody who wants to improve his own house. This is a £3,000 million a year business. I suppose we all want to improve our houses. Indeed, one of the most striking features of the past 15 years has been the great surge of home improvement. At times it seemed that the hills were alive with the sound of hammers as home improvement went on. It makes life better, it makes life more comfortable, and it improves the housing stock of the country. It is, indeed, a national service. I should have thought, therefore, that a Government who proclaim their commitment to home ownership would want to safeguard that business and the guarantees that are an essential part of it.
The business is highly competitive and has brought in sharp operators—in some respects cowboys. Guarantees are needed against their inadequacies. Home improvements last for years; the householder is guaranteed that they will live up to the claims made for them. He needs guarantees to give him peace of mind. But what happens if the company goes bust?
There have been several examples in recent months. One of them was Monarch Home Extensions, Peterborough-based, which was offering 10-year

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guarantees on its work. Another was Coldshield Windows, a big name in the business, which was offering five-year guarantees on its double glazing. There was Mulberry Home Extensions. There was Wallguard Damp Treatment, which I have already mentioned and which was offering a 30-year guarantee. The last three, Coldshield, Mulberry' and Wallguard, were taken over by the Hawley Group in September 1984. The intention then was said to be to combine Coldshield with Alpine, which the Hawley Group already controlled. but in fact all three companies were liquidated in December. A number of householders—it might be as high as 2,000—holding guarantees for work done by those companies were left with worthless guarantees. They had trusted the reputation of the company, they had taken the guarantee, and they were left with no redress or stake; they were not even told, in many cases, that the company which offered them the guarantee had gone into liquidation.
The Hawley Group was happy to take on those companies earlier in the year. It has a similar business, Alpine Double Glazing, so that it can absorb sales money and take on uncompleted business, but it does not feel any compulsion to take on the guarantees offered by the companies that it took over. The Hawley Group is a big group—its turnover in the first six months of 1984 was £119 million — but it has nothing to spare for the guarantees of people who had had work done by the companies that it took over last year. It has just taken over four United States companies concerned with cleaning and landscaping for a first payment of £4·4 million, but there is nothing to spare for the guarantees issued by Coldshield, among others.
The merger makes good business sense, but it does not make good business sense to take on the obligations of the companies that are taken over and then liquidated. For example, there were obligations to old couples with badly fitted double glazing and people with damp courses that were not working properly. That has happened not only with the companies that I have quoted but with a whole range of companies. I have a letter from Mr. Donald Livingston of Largs in Scotland, who says:
"Having 25 years experience in the Aluminium Window Industry and a former member of The Aluminium Window Association I am disgusted with the present state of affairs in the Replacement Window Industry."
Mr. Livingston writes:
"The main problem lies in the installation of replacement windows. Old windows are ripped out and new ones installed and with timber facings, beading etc., fitted internally, the customer cannot see if the job has been 'botched'. Poor external mastic painting eventually leads to water penetration."
Mr. Donald Livingston includes in his letter a cutting from the Sunday Post with a customer complaint to the newspaper. Mr. D. Jenkins writes:
"Last April, we decided to have double glazing by Alva Glen Windows, Ltd. After the fitting in July, we've had leaking frames, seals incomplete, dust and debris in the sealed glass, etc. They came three times to rectify the faults, which are still there. I've heard they're in financial trouble."
The newspaper replies, somewhat tersely:
"Afraid you're right, Mr. J. Firm in liquidation. Will send address which should be helpful."
I wonder whether it was. That is the sort of thing that is happening all too often and for which, if the firm goes out of business, the customer has no redress.
Therefore, the guarantee is not what it is supposed to be—something to give the customer peace of mind and confidence in the installation. It is not rare, because over
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a score of companies, many small, have gone bust in the past few months, some this week. The problems they face are the recession, and the facts that the trade is overcrowded and has probably' peaked. and that VAT was imposed on home improvements in June. The situation will get worse now that interest rates have risen by 2·5 per cent. because that will be a bitter blow to a business that has become intensely, almost hysterically, competitive.
The extent of that competition is shown by the increasing hysteria of many of the advertisements, which say, "35 per cent. off', "One third off', "Save up to 40 per cent." Those cries reveal a business in a frenetic state of competition. A business that depends, as this one does, on credit, will be hard hit by a 2·5 per cent. increase in interest rates. Something needs to be done, and done soon if the industry is, as I have prophesied, facing severe problems.
I have some suggestions. My Adjournment motion refers to home improvement grants. I approached the matter in that way, frankly, because in an Adjournment debate one cannot propose legislation. I suggest that the firms carrying out home improvements that qualify for grants be required to offer enforceable bonded or insured guarantees that will live on if the firm goes out of business and that those guarantees should be satisfactory in terms of the Office of Fair Trading criteria set out in its documents. That is essential, as I know from bitter personal experience of trying to get redress against a firm the work of which was inadequate, which had been done in my own home, on a home improvement grant. The firm went into liquidation. The council obligingly offered that I could sue it to get redress but then told me that that would probably cost more than the cost of the work in the first place. That is the first avenue of approach.
The second approach is to ask the Newspaper Publishers Association to modify its code of conduct and ensure that the guarantees that feature so prominently in advertisements—for example, a guarantee of 30 years issued in the week that the company went into liquidation—are enforceable and will live on. It should ensure that the newspapers do not go in for the practice of accepting advertisements from firms known to be in difficulties, which offer long-term guarantees that they cannot fulfil.
Thirdly, we can legislate so that, if a firm takes over after a company has been liquidated, it also takes on the liability of that company's guarantees. In this way, if a firm which offers guarantees goes into liquidation, those guarantees can be enforceable subsequently and the people who hold the guarantees will have a claim against the company. We should legislate to ensure that the guarantees are valid, bonded or covered by insurance.
Fifthly, the trade associations have a role. A responsibility falls on the trade associations for the different sections of the home improvement industry. There should be an industry bonding scheme. In the instance of Coldshield, the Office of Fair Trading has already drawn up a code of conduct in the cowboy country of double glazing in conjunction with the Glass Glazing Federation, yet the only responsibility that the Glass and Glazing Federation had when Coldshield collapsed, leaving tens of thousands of customers with worthless guarantees, was to say that, when people had put down the money and not had the order fulfilled, the federation would get another firm to put it in, an effort which was not much use.

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The inadequacy of that effort contrasts with the Guaranteed Treatments Protection Trust which was set up recently by the British Wood Preserving Association and the British Chemical Dampcourse Association Ltd. to stand in place of any member contractor who ceases trading leaving unexpired long-term guarantees so that the guarantee through that organisation becomes a secured promise. We should commend and encourage that kind of industry effort as an important way of dealing with the problem.
The aim of responsible and respectable trade associations should be proper bonding in a trade association registered with the Office of Fair Trading so that it is known that the bonding is acceptable and those bonds will live on. This could bring some order and sense into what is still cowboy country and ensure that firms behave responsibly and are prepared to offer guarantees which can be enforced and which they can live up to. That is essential in an industry where conditions are becoming increasingly tougher.
In many respects, the tale of house improvements guarantees is a sorry one. I do not say that everybody with a guarantee should immediately reach for the panic button. Some progressive firms offer effective guarantees, and most guarantees are reliable as long as the firm survives and can be prodded by publicity, legal action or some other kind of pressure into honouring the guarantees. The problem is that not all firms are like that and that few guarantees are bonded or insured. Several firms have got into difficulties and other firms may well be threatened in the near future in the present tough conditions that industries are experiencing — a situation that has been made tougher by the Government's action on interest rates.
It is no use saying: let the buyer beware. I agree with the Office of Fair Trading that it is necessary to educate the consumer to know what rights he has under the guarantee. The consumer must be protected. That entails using the leverage of improvements grants to impose conditions, prodding the trade associations into effective action and enacting legislation to give rights to the guarantee holder. Providing a guarantee is a direct contract between the customer and an authorised insurer. Alternatively, it should be properly bonded in the industry.
There should be a concerted effort to ensure that guarantees mean something instead of being merely a means of conning the consumer into making long-term purchases, which all these items are. Guarantees should be a discipline on an industry which certainly needs one. It is in the interests of the reputable firms in the industry to control the cowboys and to make sure that all firms live up to standards and compete on the basis of satisfaction to the customers.
Home ownership is important and should be encouraged. Home improvement must also be stimulated. To do that the Government have a responsibility to act on the guarantees offered in the industry.
2.59 am
The Parliamentary Under-Secretary of State for Trade and Industry (Mr. Alex Fletcher): I am grateful to the hon. Member for Great Grimsby (Mr. Mitchell) for raising and drawing attention to this subject. There cannot be any hon. Member who over the years has not heard
490
complaints from constituents who have had a great deal of their savings or time and effort wasted by cowboy builders or so-called guarantees or commitments which were not followed through when things went wrong with the business. I am sympathetic, to say the least, and anxious to see what solutions can be found.
The industry is extremely diverse, ranging from the one-man business, and indeed the moonlighter, to very substantial firms, and it is not easily organised into a system of trade associations which could achieve the kind of self-regulation that one would like. I emphasise selfregulation and shall return to it in more detail later.
As the hon. Gentleman knows, the industry generally and the home improvements sector have been studied by the Director General of Fair Trading. In June 1983 the Director General produced a major report on the subject with a large number of recommendations, including cooling-off periods, written contracts, a general duty to trade fairly, encouragement of warranty schemes and standard contract terms. I assure the hon. Gentleman that the recommendations are being very seriously considered by my colleagues at the Department of the Environment. Indeed, I believe that the matter was debated in the House about a year ago.
In a home improvement transaction, as in any other, the primary responsibility must rest with the purchaser—the home owner—to satisfy himself that he is getting the best possible job done. The Office of Fair Trading has provided very useful guidance on this, including an invaluable checklist of seven golden rules for home improvements.
It is always worth choosing a reputable builder and taking full advantage of the schemes increasingly being offered by the construction industry to improve its services. One must, of course. look behind the schemes. I hope that the publicity provided by this debate and the hon. Gentleman's interest in these matters will be further warning to consumers not to take advertisements, such as the one to which he referred, at their face value. I do not know whether it would be practicable for newspaper publishers to try to impose some discipline among themselves to look into such schemes, but the hon. Gentleman's suggestion is certainly worth following up with the Director General, with whom I believe the hon. Gentleman is in correspondence.
The hon. Gentleman particularly mentioned dampproofing. I believe that he mentioned the joint guarantee scheme offered by the British Chemical Dampcourse Association Ltd. and the British Wood Preserving Association, under which member firms offer an independent insurance scheme to clients on payment of a small premium, providing a 20-year back-up guarantee intended to cover situations in which individual contractors go out of business. That appears to be an ideal type of scheme, in that it is independently covered by the insurers and will take effect in cases of insolvency.
I was very pleased, just recently, to learn of the launch of the new guarantee scheme of the Building Employers Confederation by my hon. Friend the Parliamentary Under- Secretary of State for the Environment. As he said on that occasion, the irresponsible section of the industry has fed Esther Rantzen with a rich and steady diet—which, alas, means that much of the industry is tarred withthe same brush.
My hon. Friend also pointed out then that repair, maintenance and improvement is becoming an increasingly important part of the construction industry work

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load. Ten years ago repair and maintenance made up only 28 per cent. of all construction work: last year, it had increased to about 40 per cent. The business is expanding.
It is normal in such circumstances for people to look to the Government to provide some form of statutory regulation or licensing for firms in the industry. I do not believe that that would be the right answer. I doubt the practicability of such a scheme. I cannot think of an industry that would be more difficult to organise in such a way than the building industry. That is why selfregulation seems to me to be the only way forward.
That view is shared by the Director General of Fair Trading, who has actively pursued a policy of developing codes of practice for many sectors of industry. He has, for example, helped in the formation of a code of practice by the Glass and Glazing Federation which covers, amongst other things, double glazing, to which the hon. Gentleman referred.
There are other schemes. The Building Employers Confederation guarantee scheme was a major step forward in changing the image of the industry and helping to restore confidence to those who have suffered in the past. There are also schemes operated by the Federation of Master Builders, the plumbers and the roofing contractors. The schemes offer varying degrees of guarantee.
Looking to a wider front, I know that the hon. Member is generally concerned about the situation of guarantees and what happens when companies go out of business; and I know he is concerned about other companies assuming responsibility for guarantees and for passing on information to guarantee-holders.
The Government's proposals for the reform of the insolvency legislation—a major Bill received its Second reading in another place on Tuesday—will provide an additional degree of protection for consumers, especially through the wrongful trading provisions, which are aimed at directors of businesses who, knowing that they have become insolvent, continue to undertake obligations that they cannot meet.
Mr. Austin Mitchell: Would it not be possible to table amendments to the Bill giving rights to guarantee-holders? They have a financial stake in the company that goes out of business, so their rights should be recognised in any insolvency proceedings.
Mr. Fletcher: Yes; but the liability would be a contingent liability. It would not be a liability that an official receiver or liquidator could take into account. That would be the difficulty. Only if the guarantee-holder had to call in another contractor to do the work, or incurred some other expense, might he rank as a creditor.
I do not, therefore, think that the hon. Gentleman's suggestion is a practical one. We can, however, make directors act more responsibly, and minimise loss and damage, through provisions such as the wrongful trading provisions. Where they wilfully took on obligations that they knew that they could not honour, directors would effectively lose the protection of limited liability. The hon. Gentleman must agree that that is a step in the right direction.
The problems that have been identified, particularly in the Director General's home improvements report, can best be overcome by voluntary controls on the part of the industry and by greater care on the part of members of the public as these problems are increasingly brought to their attention and they become much more suspicious of guarantees.
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As the hon. Gentleman will know, many people—including myself—have bought television sets and paid the extra £25 for a five-year guarantee, only to find that they have become responsible for insurance, having contracted with perhaps an authorised company that is not authorised in that line of insurance. I should add that that was before I took on my present responsibilities. That might be more luck than good thinking, but I had better put it on the record.
The hon. Gentleman will know from the letter that he has received from the Director General of Fair Trading that consumer guarantees are the subject of a discussion paper which was published in August last year. It makes preliminary recommendations that guarantees should be clear and comprehensive, have standard terminology, that, as will almost invariably be the case with construction guarantees, they are for more than one year and that they should take the form of a direct contract of insurance between the purchaser and an authorised insurer so that, in the event of the contractor's insolvency, the consumer will be protected. The consumer will be a party to the insurance contract. I am sure that is a desirable objective.
There are bound to be difficulties for some companies in obtaining insurance cover. That gives the consumer the opportunity to test the company with which he is proposing to do business. There is nothing wrong with that. The trade associations might have some supporting authority or insurance companies might make it clear that a scheme is approved. That could provide real protection. I should encourage the industry to consider such schemes as the Director General is developing.
It is argued that home improvement grants should be linked to long-term guarantees. However, only about 10 per cent. of home improvement and repair work involves home improvement grants. Of some £8 billion-worth of work carried out last year in repairs, maintenance and improvements, only £900 million was given in grant. Therefore, linking the grant with consumer protection would leave the vast bulk of home improvement work unaffected. I understand the hon. Gentleman's reasons for advancing that argument, but that approach would not tackle the scale of the problem.
During the past year, the Government have been carrying out a thorough review of private sector housing improvement policies, including the home improvement grant system. We hope to publish our proposals shortly in the form of a consultation document. The question of guarantee or warranty schemes, and their application to home improvement work, will be covered.
The aim is, in due course, to introduce legislation to simplify the present grant system and to ensure that the money which is available for grants is spent where it is most needed and does good. We have considered measures to ensure that work financed with the aid of a grant is carried out by reliable contractors to a good standard. The hon. Gentleman will tell me to get into that and define a reliable contractor. He is one who is properly and adequately insured—
The Question having been proposed after Ten o'clock on Wednesday evening and the debate having continued for half an hour. Mr. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.
Adjourned at thirteen minutes past Three o'clock.

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  Councils (Real Estate Transfers)
  Councils (Real Estate Transfers)
  Construction Companies (Discrimination)
  Construction Companies (Discrimination)
  Water Metering
  Water Metering
  Natterjack Toad
  Natterjack Toad
  Dipper Bird
  Dipper Bird
  Councillors (Overseas Visits)
  Councillors (Overseas Visits)
  Private Graves
  Private Graves
  Leicester (Rate-Capping)
  Leicester (Rate-Capping)
  Concrete and Timber Framed Dwellings
  Concrete and Timber Framed Dwellings
  Oil and Gas Operations (Planning Control)
  Oil and Gas Operations (Planning Control)
  Regional Industrial Assistance
  Regional Industrial Assistance
  Conservation
  Conservation
NORTHERN IRELAND
  Derry
  Derry
SCOTLAND
  Dumfries Bypass
  Dumfries Bypass
  Glengarnock Steel Works
  Glengarnock Steel Works
  School Education
  School Education
  Woodlands
  Woodlands
  Inverness Airport
  Inverness Airport
  Transport Policy
  Transport Policy
  Airports (Subsidies)
  Airports (Subsidies)
  Economic Situation
  Economic Situation
  Crime Statistics
  Crime Statistics
  Teachers (Pay)
  Teachers (Pay)
  British Steel Corporation
  British Steel Corporation
  NHS (Privatisation)
  NHS (Privatisation)
  Airports
  Airports
  Skillcentres
  Skillcentres
  Renfrewshire (Economic Developments)
  Renfrewshire (Economic Developments)
  Housing Investment Programmes
  Housing Investment Programmes
  Greenock Prison
  Greenock Prison
  Nautical Education
  Nautical Education
  Woodland (Sales)
  Woodland (Sales)
SOCIAL SERVICES
  National Insurance Fund
  National Insurance Fund
  Cost Rent Scheme
  Cost Rent Scheme
  Residential Homes
  Residential Homes
  Home Helps
  Home Helps
  Vibration White Finger
  Vibration White Finger
  National Insurance Contributions
  National Insurance Contributions
  Emigration
  Emigration
  Pension Age (Reduction)
  Pension Age (Reduction)
  Retirement
  Retirement
  Generic Drugs
  Generic Drugs
  Limited List Prescribing
  Limited List Prescribing
  Health Authorities (Managers)
  Health Authorities (Managers)
  NHS (Waiting Lists)
  NHS (Waiting Lists)
  NHS (Achievements and Objectives)
  NHS (Achievements and Objectives)
  Cervical Cancer
  Cervical Cancer
  Ambulance Service
  Ambulance Service
  Health Authorities (Contracts)
  Health Authorities (Contracts)
  Health Authorities (Managers)
  Health Authorities (Managers)
ENERGY
  Coal Industry Dispute
  Coal Industry Dispute
  Northumberland and Durham Coalfields
  Northumberland and Durham Coalfields

Preamble
The House met at half-past two of the clock: The LoRD CHANCELLOR on the Woolsack.
Prayers—Read by the Lord Bishop of Oxford.
The Earl of Eldon—Took the Oath.

NHS: Consultations on Administration
Lord Molloy: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they will hold discussions with all associations representing medical staffs about the administration of the National Health Service.
The Parliamentary Under-Secretary of State, Department of Health and Social Security (Lord Glenarthur): My Lords, the Government already regularly discuss a wide range of administrative issues with associations representing medical staff in the National Health Service.
Lord Molloy: My Lords, in thanking the noble Minister for that reply, may I point out that what he has said is true but is he aware that, although these discussions are helpful, there is grave anxiety from surgeons right through to ancillary staff, nurses, midwives and junior doctors? Perhaps there should just be consultations, with no binding effects, between representatives of all the organisations within the NHS and DHSS representatives. That might help to allay some of the fears. These people have a right to make suggestions about how they think this great service could be improved.
Lord Glenarthur: My Lords, I note what the noble Lord suggests, but a forum already exists and, additionally, the Joint Consultants Committee meets quarterly with the department. I think that essentially any change in the staff representation would be a matter on which the existing staff side should formulate coherent proposals for discussion.
Lord Molloy: My Lords, perhaps I may very respectfully point out that one—
Noble Lords: Question!
Lord Molloy: My Lords, may I, with respect, ask the Minister whether he is aware that one of the reasons why I put this Question was because of discussions with the BMA, CoHSE, NUPE and other organisations relating to young doctors and ancillary staff? They point out that such discussions would be helpful to try to stop what they consider to be a threat. For example, at Westminster Hospital the ophthalmic department will be abolished and transferred to Charing Cross Hospital; the provision for cardiac surgery, which has served Parliament so well, is
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threatened; and the general emergency bed service is threatened at many other hospitals. They are afraid that the policy of the Government is in fact closing hospitals by amputation, and that this could be prevented by sensible discussion.
Lord Glenarthur: My Lords, I cannot accept the noble Lord's assertions, which, to some extent, are scaremongering and unnecessary. The important thing, if the noble Lord wishes to take this forward, is for him and those whom he represents to have discussions through the existing machinery, which will no doubt consider carefully what he says.
Baroness Gardner of Parkes: My Lords, will my noble friend confirm that the whole purpose of the reorganisation of the health service in setting up district health authorities was to enable these bodies, who work close to the ground in these areas, to make these important decisions? If the Government intervene directly on all these matters it would become a centralisation measure.
Lord Glenarthur: My Lords, I agree with my noble friend that these matters are often best discussed locally.
Lord Kilmarnock: My Lords, can the noble Lord tell the House how many general managers selected at local level have been vetoed by the Secretary of State?
Lord Glenarthur: No, my Lords. In any case, that is another question.

Monetary Policy
2.40 p.m.
Lord Bruce-Gardyne: My Lords, I beg leave to ask the Question standing in my name on the Order Paper. May I point out that the last word of the Question should be "policy" and not "police"?
The Question was as follows:
To ask Her Majesty's Government whether they now expect the broad aggregate, £M3, to grow within the target limits over the current target period for monetary policy.
Lord Glenarthur: My Lords, though month to month fluctuations are difficult to predict, there are no grounds to expect at this stage that sterling M3 will be outside the target range for the target period as a whole.
Lord Bruce-Gardyne: My Lords, I am most grateful to my noble friend for that very reassuring Answer. Does he agree that the rise in interest rates this week, far from being a disaster in this context, could be taken as a highly desirable move?
Lord Glenarthur: Yes, my Lords, it is highly desirable, and I am grateful to my noble friend for asking that supplementary question.
Lord Molson: My Lords, since the original Question was totally incomprehensible to a great many of your

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Lordships, may I thank my noble friend for his lucid reply? In order to enlighten noble Lords who, like myself, are not familiar with the language of monetary policy and macro-economics, may I ask four supplementary questions?
What does my noble friend understand by "broad aggregate"? An aggregate is a collection of individual items. What are the individual items that are being aggregated in order to form the "broad aggregate"? What are the "target limits"; and what is the period of time referred to as the "current target period"? Anything that is current obviously is running. When did the period begin to run, and when do the Government expect it to stop running?
Lord Glenarthur: My Lords, my noble friend has asked me a number of questions which I shall endeavour to answer. So far as sterling M3 is concerned, that relates, as far as I am aware, to all bank deposits. I think that my noble friend will be aware that there are various other indicators which refer to different things. The actual current period is a 14-month period, as I understand it. The actual limits for sterling M3, I am afraid I cannot find in my brief at this particular moment but I shall find them and let my noble friend know.
Lord Paget of Northampton: My Lords, I, too, have been fascinated by the noble Lord's difficulties. One point on which perhaps I did not hear an explanation is this. Is the reference in the Question to "monetary police" a printing mistake or is it a form of Cabinet commissar to keep them in line?
Lord Glenarthur: My Lords, thankfully, it is a printing error.
Lord Diamond: My Lords, does the noble Lord agree with his noble friend that the recent increase in interest rates is (as I think he said) a good thing? Can we look forward to the repetition of these good things in the Government's policy and have a number of further increases in interest rates week by week?
Lord Glenarthur: No, my Lords. As the noble Lord will be aware, it was necessary to take the steps that we took for the reasons that were carefully explained by my noble friend the other day. I do not think that I shall go further than that.
Lord Stoddart of Swindon: My Lords, is the noble Lord aware that, although he tried very well to explain these esoteric matters to his noble friend Lord Molson, many people will still remain puzzled? Is it not a fact that since the broad money aggregates have been narrowed, unemployment has risen almost in exact correlation? Is it also not a fact that the Government's monetary policy, far from assisting inflation and interest rates, has done the reverse, and that we are enjoying the highest interest rates now that we have had for a long time? Would it not be far better if the Government abandoned their monetarist policy and ran the economy on a proper, planned basis which would benefit the unemployed, the rest of the economy and the rest of the community to a very great extent?
Lord Glenarthur: My Lords, the noble Lord can rest assured that lower inflation depends upon maintaining a firm monetary control and that is what we propose to do.
Lord Harmar-Nicholls: My Lords, is it not a fact that, on the other side of the coin, the result of the broad aggregate has been more jobs, and that the percentage per thousand of the population has provided more jobs in this country than in any other European country except Denmark? Is that not one of the results that we ought to keep in mind when offering criticism?
Lord Glenarthur: My Lords, I am sure that my noble friend is right.
Lord Bruce-Gardyne: My Lords, for the elimination of doubt, can my noble friend confirm that the currency monetary aggregates were first introduced by the then Chancellor, Mr. Healey, when he was responsible for these matters, and that the current target is from 6 per cent. to 10 per cent?
Lord Glenarthur: My Lords, I am grateful to my noble friend for that information. I am sure that my noble friend Lord Molson will note the figures that he gave.

Public Expenditure Figures
2.46 p.m.
Lord Dean of Beswick: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what is the Government financial subvention, per capita of population, to England, Northern Ireland, Scotland and Wales.
Lord Glenarthur: My Lords, subventions by the Exchequer are calculated only for Northern Ireland. However, figures are available for identifiable public expenditure in all four territories. The latest available are for the financial year 1982–83. The figures per capita are as follows: England, £1,539; Northern Ireland, £2,335; Scotland, £1,990; and, Wales, £1,726.
Lord Dean of Beswick: My Lords, I am grateful to the noble Lord the Minister for that detailed reply because the Question is a difficult one to answer. May I ask the Minister whether he agrees that those figures indicate that the per capita spending now in Northern Ireland is 50 per cent. higher on essential social services than in the English regions? While nobody wants to demur about the necessity for high spending in Northern Ireland, in that unhappy place, is the Minister not aware that, in certain regions of England, unemployment and deprivation is now reaching the Northern Ireland dimensions? May I ask the Minister to plead with the Government to reverse the cuts that they are already implementing in those areas?
Lord Glenarthur: My Lords, the calculation of public expenditure per capita in the territories (if I may use that word) is based on an aggregation of expenditure on a wide range of programmes whose levels are determined by a wide variety of economic and social factors. I think that the noble Lord would be best to address questions on individual programmes direct to the spending departments concerned.
Lord Glenamara: My Lords, can the noble Lord say what the figure is for the North-East of England where unemployment has now reached crisis proportions? There in some communities up to 50 per cent. of the male population are unemployed and the unemployment figure is higher than anywhere else in Great Britain.
Lord Glenarthur: My Lords, no. The figures that I gave are the figures for the territories of England, Northern Ireland, Scotland and Wales; and those are the only ones that are available.
Lord Paget of Northampton: My Lords, does this not boil down to the fact that the poor old English once again are paying for the peripheral provinces?
Lord Glenarthur: My Lords, there are special circumstances which relate to Northern Ireland of which the noble Lord will be aware.
Lord Dean of Beswick: My Lords, may I finally ask the Minister whether he is aware that the figures he produced are very similar to those that I received as a result of research in the Library? They show that the per capita figure that he gave is based on spending mainly on the broad spectrum of the social services, such as housing, education, the DHSS and the National Health Service in each area. I think that they have nothing to do with the industrial grants; and certainly these figures are not remotely concerned with the defence programme for Northern Ireland and the Army there. Comparing like with like, all that I am pleading is for the Government to reconsider the cuts they are imposing in areas of England which now have the same amount of deprivation as in Northern Ireland.
Lord Glenarthur: My Lords, the subvention consists of five items: the grant-in-aid of the United Kingdom Consolidated Fund to the Northern Ireland fund; the Northern Ireland Office expenditure on law and order; expenditure by the Northern Ireland courts service; expenditure by the Ministry of Agriculture in Northern Ireland; and contribution from the GB National Insurance Fund to top up its Northern Ireland counterpart. Three of these items—the first, the second last and the last—are unique to Northern Ireland.

London Regional Transport: Information
2.50 p.m.
Lord Underhill: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they will direct London Regional Transport to publish all the categories of information which were previously published about London Transport by the Greater London Council.
Lord Brabazon of Tara: My Lords, such a direction would not be appropriate. The London Regional Transport Act 1984 requires London Regional Transport to make available comprehensive information about their affairs. They have a duty to prepare, consult upon and publish a three-yearly statement of strategy, the first of which is due by the end of June this year. They are required to publish an annual business plan; the plan for 1985–86 was published last December and the noble Lord has no doubt seen it.
They are also required to publish an annual report and accounts, and they must inform local authorities and the London Regional Passengers' Committee each year of their plans for fares and services.
In addition to these statutory requirements, London Regional Transport publish a great deal of information about their services for use by passengers, and they will continue to assist the London Regional Passengers' Committee in the discharge of their duties.
Lord Underhill: My Lords, I am very grateful to the noble Lord for that detailed reply, but I am a little disappointed with the information he has given. Is it not a fact that the GLC published a considerable amount of information, including that on the quality of service, service levels and financial performance, as well as proposals for capital projects and their monitoring? Is it not the case that of those items only the first piece of information is given to the London Regional Passengers' Committee and that they are given no information on service levels; that is, miles run on trains and buses? May I ask whether the Government will answer questions on detailed service provision in the same way as the GLC previously answered for London Transport?
Lord Brabazon of Tara: My Lords, I think that the noble Lord will find in the business plan much of the information for which he is asking, certainly that relating to passenger miles and so on.
Lord Underhill: My Lords, may I ask whether that information is supplied to the London Regional Passengers' Committee for their consideration? My information is that that is not so.
Lord Brabazon of Tara: My Lords, the annual business plan is freely available to anybody who wants to look at it.

Business
The Earl of Swinton: My Lords, it may be for the convenience of the House if at this point I say a word about the arrangements for this afternoon's short debates standing in the names of the noble Lords, Lord Molloy and Lord Jenkins of Putney. It is customary in

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short debates for the mover to be allowed approximately 15 minutes and for the Minister to rise to reply not less than 20 minutes before the scheduled end of the debate.
In the case of the short debate standing in the name of the noble Lord, Lord Molloy, the number of speakers makes it unnecessary to propose any formal time limit on intermediate speeches, though I am sure that the House will be grateful if the speakers in that debate observe the normal conventions about brevity.
In the case of the short debate standing in the name of the noble Lord, Lord Jenkins of Putney, I should be grateful if other speakers would limit their speeches to a maximum—I repeat, a maximum—of 12 minutes. If any noble Lord were to speak at greater length, it would be at the expense of subsequent speakers in this debate.

World Disarmament
2.52 p.m.
Lord Molloy Lord Molloy rose to call attention to the need for Her Majesty's Government to take the initiative in bringing forward new and realistic proposals for effective world disarmament; and to move for Papers.
The noble Lord said: My Lords, I have a degree of pleasure in opening this debate because of the new warmth of understanding which it seems was being generated between the United States and the Soviet Union at the recent discussions in Geneva, for which great credit must go to Mr. Andrei Gromyko and Mr. George Shultz. Therefore, I think it is time that there should be brand-new proposals, because what we are talking about is not a question of war and peace; it is indeed about the entire future of this globe on which we live.
As we know, the world is moving rapidly to final medical epidemic; namely, thermonuclear war. This was initiated by a few men—scientists in the United States, the USSR and Great Britain. Orders were given by the Attlee Government and later by Mr. Churchill's Government—and kept totally secret from Parliament and the nation—that this course should be embarked upon. Now, over 36 years, mankind has developed 50,000 nuclear weapons. Russia and the United States can target every town in this world with a population of 10,000 or more. We are indeed hostages on a terminally ill planet. The USSR can kill every American 20 times and America can kill every Russian 40 times and at the same time poison all mankind and practically slay and wipe out "all creatures that on earth do dwell".
Our only escape is for the peoples of the world to use their power to influence their governments. It cannot be done by one power, or one people, or one government; it has to be done by us all. We in this country have given a superb example. Under both Conservative and Labour Governments we have deplored the preparation of any form of chemical warfare and have abandoned it. It is to the pride of this nation and to the shame of the two super-powers that they have not followed suit. What we must strive for is to halt the arms race by initiating a United States and
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Soviet Union freeze on testing, production and deployment of nuclear weapons and their systems of delivery.
Of course, the vital element has got to be verifiability. Current monitoring is almost foolproof. Verifiability is not now the threat it once was when it came to the abolition of nuclear weapons. It is possible for the United States satellites SAMOS I and SAMOS II to he able to read the licence plates on cars in Moscow streets and to inform the United States Government and military authorities. So it is not at all an impossible suggestion such as it was a few years ago. With multi-spectral photography the United States, and probably the Russians, can now penetrate all cloud mists and provide simultaneous images of what is happening in different arsenals of the world.
This is the other side of the fence, whereby the horrendous discoveries of thermonuclear weapons are now being balanced with the opportunities to try to arrive at some reduction in these horrendous arms, with acceptable verifiability. The United States maintain extensive worldwide radar which will go over horizons. They have tracking stations which keep them in touch with what is happening in every suspect area of the world, every second of every day or night. What we have to ask is: have the Russians got the same? The answer is probably, yes. Will they agree, therefore, to have examination in depth, which would provide a very good chance that verifiability will be not the menace that it was but will come to our rescue in this dreadful age?
Will our Government consider urging the start of a series of unilateral initiatives designed to reduce world tension and urge on the super-powers the need to commence graduated and reciprocated initiatives in tension reduction? I believe that that itself could then lead to a much more practical appreciation of what we all claim we want to achieve in the abolition of these terrible weapons. I suppose everybody in the world, in every political party, in one way or another supports the principle of CND; not only the multilateralists and the unilaterialists, but everybody. I have never heard of anybody who has said: "This is a wonderful thing and we ought to have these weapons because just imagine what a great, tremendous thing it would be to have a thermonuclear war and reduce this sphere to something spinning lifeless in space."
There have been proposals which we could well have examined and might well be examining again. Ever since 1979 all freeze benefits have not been fully gone into. But, going further back, in 1977 President Brezhnev proposed and urged the reduction of stockpiles. Proposals for negotiations to begin on ending production of nuclear war weapons still exist. Let Britain take the lead. Let us start talking again; instead of threatening, let us get talking.
The example was given to us by the greatest Englishman of our time, Winston Churchill, with his proposition that jaw, jaw is better than war, war. One hopes that what happened in Geneva a few weeks ago will be the restart of talking and of being frank with one another in the hope that something good will result. I hope that my nation will declare that we recognise that our security is intimately tied to the security of our opponents, and hence that mutual

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security must be mutually arrived at. There is an enemy greater than the Soviet Union and that enemy is inaction. Delay could be deadly.
In my judgment we must not countenance the doctrine of limited nuclear war either, because once begun there will be no end until life on earth has ended. There is also the terror of error via "launch on warning". I believe that we have to examine this very quickly with our great allies in the United States of America. The top nuclear scientists and technologists of the world say that with launch on warning there is a grave possibility of an error being committed. As Churchill said—and this has now been revealed—if we have United States missiles on this island and they are let off, we will become nothing but a target for the Soviet Union. I do not think that one ought to dismiss too hastily the words of Winston Churchill.
We must never equate courage with a willingness to wage nuclear war or equate cowardice with arms control, disarmament, or a reluctance to wage nuclear war. Leading British and American scientists are united in their views on the greatest danger facing mankind. Together these British and American scientists, men and women of top quality and ability, cry out to stop this truly unholy madness.
I believe that we should get back to the philosophies of great statesmen of this country; to that of Aneurin Bevan when he urged us to arrive at the frontiers of understanding before some terrible calamity overtook us; and to that of the great Churchill, with his declaration of jaw, jaw being better than war, war. We should underline and demonstrate the interdependence of all nations. Our policies should be at all times to save the world for freedom and to save freedom for the world.
I want to conclude on a personal note. I was in America not so very long ago visiting my American born and bred grandchildren. We travelled over a number of states and I watched the ceremony of my granddaughter, Miss Julia Motl, going to her first mass in America with her little sister Ann. In our family over Christmas another little human being was born, a little granddaughter, Lauren. Then I had the privilege to go to Cheltenham Junior College to listen to the carol singing there. As a Welshman, I am bound to say that I give them 10 out of 10—it was lovely. I listened to the young boys—I knew one young boy in particular, Jonathan Bullingham—singing those Christmas carols. It brought home to me the lead that I believe my country above all others can give in this terrible situation. I respect the Soviet Union and I respect the USA. However, I happen to believe that if they will be prepared to listen to our Governments—irrespective of what political colour they might be—there is always something to be gained. If what I have said this afternoon will be at least looked at by the Government, I shall indeed be most happy. I do not want a situation where there will be neither peace on earth nor indeed goodwill allowed to flourish because there will be nobody to enjoy it.
The situation is deadly. It is appallingly serious. We have talked about it for years without really trying to understand what it means. Literally within a few minutes of the outbreak of a thermonuclear war our island could be wiped out. We might be in a position in which to destroy an invading Russian Army, we
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shall—we shall probably say reluctantly—wipe out millions of Germans, Belgians and Frenchmen. One cannot have a thermonuclear bomb which will slay only Russians. That is an absurdity. These are the matters that we must understand. We should at least be prepared to consider some of the proposals that I have outlined—and they are not all mine. My desire is that the world should arrive at a sane situation, and I would feel justifiably proud if the initial steps were taken by my nation. I beg to move for Papers.
3.7 p.m.
Lord Kennet: My Lords, we are in broad agreement with the broad approach expressed with such eloquence by the noble Lord, Lord Molloy. This is good weather for disarmament and it is time that it was good weather after two or three years of very bad weather.
Just before Christmas the Prime Minister went to Washington and met President Reagan at Camp David. She succeeded in coming back with a four point declaration, the importance of which in history of course remains to be seen, but which I think we should all, in all parts of the House, welcome as a remarkable diplomatic achievement: one which can be only beneficial.
The Prime Minister came back with the agreement of the President, the explicit agreement of the President, that the United States would not procure and deploy the system known colloquially as "star wars" without having negotiations with everybody concerned (which means not only his allies but our adversaries, the Soviet Union), and various other extremely useful formulae which will serve—which have already served—to hold in check the wilder hawks in the United States, who are of course to be found within this Administration as much as they are to be found outside it.
I cannot forbear from taking some pleasure—without making party politics—in the fact that that declaration was quite close to the policy aims suggested to the Prime Minister by my right honourable friend Dr. Owen in an open personal letter—is that a contradiction?—in an open letter, a few days before the Prime Minister went to Washington. We should have liked it closer, but we are glad indeed that she was able to obtain so much of what we thought ought to have been obtained in advance of the Geneva negotiations.
I now turn to the Geneva agreement itself, which, I cannot imagine why, was simply not reproduced in the British press. It was mentioned, it was analysed, it was praised and it was damned, but as far as I can remember not a single paper just printed the wretched thing. I will not read it all, although it is short, but it is worth just reminding ourselves what it says, because the language is new language and indeed good language. It says:
"The sides agree that the subject of the negotiations will be a complex of questions concerning space and nuclear arms both strategic and intermediate range with all the questions considered and resolved in their interrelationship."
It speaks of,
"preventing an arms race in space and terminating it on Earth and limiting and reducing nuclear arms and strengthening strategic stability"—not strategic might, but strategic stability."

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It says that each delegation—the American and the Russian—shall be a single delegation which will be divided into three groups—the three sub-committees of the delegation. It repeats that the aim of the negotiation is the complete elimination of nuclear arms everywhere.
Those who have been around this House as long as I have—and there are many of you, my Lords—will remember the McCloy-Zorin declaration of 1960 or 1962 and will know that in two ways this agreement is better than the McCloy-Zorin declaration. To begin with, it is signed between Foreign Ministers instead of special envoys. Secondly, it is a great deal broader than the McCloy-Zorin approach. It is, I think, the broadest approach to disarmament which has appeared on the table since the grand old days (or the idealistic old days—whichever way one likes to look at it) when the noble Lord, Lord Home, was Foreign Secretary and we really had a go for general and comprehensive disarmament back in the late 1950s.
Back from Geneva, deep divisions immediately appeared in the United States Administration. The divisions were so deep that Mr Shultz had to write to Mr. Gromyko as soon as he got home, saying that the United States really did mean what they had agreed and were going to stick to their bond, it being understood that this was so whatever Mr. Weinberger might say, because the Pentagon hawks had been saying in effect that the United States did not intend to stick to the agreement. Mr. Shultz was the negotiator. He will be conducting the negotiations—he says that they will keep their word, and that can only be good.
He used in recent days more than once the phrase, "organic relationship" to describe the three baskets, the three sub-committees, of the negotiations, thereby agreeing with the Soviet Union that that is an unbreakable relationship and that progress must be made in all three at the same time. The House will not need reminding that the three sub-committees are: first, space, including "star wars" and so on; secondly, strategic nuclear weapons, the intercontinental end of the scale; and thirdly, intermediate nuclear forces, meaning typically those that are in, or which afflict, Western Europe and Eastern Europe, outside the super powers. All this is very good. The Prime Minister has ensured no nonsense about refusing to discuss the Strategic Defence Initiative in Geneva. She has ensured no nonsense about refusing to discuss even research towards the Strategic Defence Initiative. The United States has agreed to discuss research with the Russians. We on these Benches would have liked to see an agreement by both sides to suspend their research during the negotiations, and we shall be pressing the Government to try to get that agreement even now.
The Strategic Defence Initiative is going to dominate the scene in the next round of negotiations—so much has been clear now for many months. It is worth remembering that those in the United States Administration who are keenest on getting the research done without international objections are the very same people who are keenest on preventing the export of military high technology to any country outside the United States. That paradox waits to be resolved.
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The German Government is rather inclined to go along with the research programme because it hopes to get some spin-off from it. It hopes to be aided by it to keep up with Japan and the United States in the relevant high tech. But we must all remember, and the Germans must remember too, that the export of military high tech from the United States or any other country runs into severe objections from other parts of the inchoate United States Adminstration, which have perhaps not yet come into action. The Germans must also remember—and we in Europe must all remember—that if it ever came to the installation of Strategic Defence Initiative systems in Europe on the ground—and that has been proposed by the United States—that would break the ABM treaty as certainly as their installation in the United States itself.
Before leaving SDI, I should like to remind the House of one thing that everyone seems to have forgotten: it concerns anti-satellite capability—the capability to shoot down satellites. It is commonly said that the Russians started work on this long before the Americans and the Americans are running after them to catch up. What is forgotten is that before the Russians started work on it the Americans had an operational capability to shoot down satellites. It was not very good and they gave it up, but it was declared operational. It was installed on two Pacific islands called Johnston and Kwajalein in the early 1960s. There is ample evidence that that is what started the Russians off on the subject. I can give the Government, or any noble Lord who is interested, the references in the Western literature to these facts.
What are the lessons of recent weeks for our Government? At the Conservative Party conference in 1983 Mr. Heseltine was understood to say that the United Kingdom ought to join the disarmament talks, and we on these Benches agree with him. We believe that there is a role for Britain at the negotiating table. It is not immediately easy to see what that role is, but there should be one. We are encouraged by Mr. Heseltine having leaned that way in a now largely forgotten speech 18 months ago. Consultation is not enough, on the simple ground of ordinary good government in a sovereign state. The weapons which are to be discussed at the INF negotiations—that is, the third basket of the negotiations—are nuclear weapons under foreign physical control. They are on our soil, it is our people whose lives are at stake and it is our future. How can we not be present at the negotiations?
What weapons should be considered at these INF negotiations? There is a history of forgetting about things. For years and years the Soviet Union had two systems called the SS-4 and SS-5, which threatened this country but not the United States. Nobody asked them to remove them. Nobody worried about them. In this House I was on at successive Governments from 1971 to do something about the position. They did nothing; and because they did nothing we got the SS-20s. The Russians thought we did not mind. The SS-20s updated the SS-4s and SS-5s.
I see a possibility of that happening again about another Soviet missile system. It is never mentioned, has never been negotiated about, and never discussed. It is the system called Shaddock. Noble Lords will remember that a Shaddock got loose last week from

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Soviet exercises in the Arctic and flew across Norway and Finland. It is a nuclear tipped missile, although I do not know if the one that broke free was armed. It is a nuclear system with a range of many hundreds of miles. It is capable of destroying London, Birmingham, Paris, Frankfurt, or whatever. That system must be included in the negotiations. It was not included on the previous occasion, and I do not know why. Also, let us not forget that a Pershing II exploded last week in Germany and killed three men; they are not safe weapons, any more than is Shaddock.
It is difficult to see how there can be meaningful negotiations about these completely mobile weapons in Europe only. The SS-20s threaten nearly half the countries in the world. They threaten India, Egypt, Israel, China. All those countries are just as steamed up about them as we are. Any which are taken away from European Russia can be trundled along in less than 24 hours to face any of those countries. We ought to be at the negotiations on INF. There is a case for saying that the Indians, Chinese, Egyptians, Israelis, and so on all down the line, ought to be there. I formulate it this way. Any country whose security is affected by the existence of these weapon systems and who wants to be there ought to be there. Perhaps not all of them want to.
Incidentally, who is talking to the Chinese about Geneva? Is the United States briefing the Chinese? Are the Russians briefing the Chinese? The Chinese have said nothing so far. It is about the only country in the world not to have said anything. If the Government have any news, we shall he interested to hear it.
As to the strategic arms reduction negotiations, the same question arises—who should be there? It is not clear that it ought to be only the Russians and the Americans. Of course, one can go to the extreme and say that everyone must be everywhere; and that is clearly impossible. The question arises of our own independent nuclear deterrent being taken into account. Taking something into account can mean any number of things. We take the weather into account. I do not suppose that even this Government will mind our weapons being taken into account in that sense. But it could also mean, at the other extreme, absolutely and finally giving up our weapons.
There is one thing that it could not possibly mean. It could not possibly mean reducing our Polaris force or in future our Trident force. One cannot reduce a four-boat force. If one does, one does not have a deterrent, because there cannot be one boat on station all the time. We have to face the fact that if the Government go ahead and get another four-boat force in the future, with Trident—a more modern and powerful one—it still cannot be reduced. They have to face the fact that either they will have to hang onto it, however much that disrupts the negotiations, or at a given moment and by agreement get rid of it entirely. This is one of the reasons why we on this Bench oppose the acquisition of Trident as a successor to Polaris. We think that there should be a much less expensive, grand, gold-plated and provocative force, and that it should be carried on far more platforms, each carrying fewer and less powerful weapons.
There can be no question of any possiblility of this country giving up its independent nuclear deterrent force after discussion in negotiations at which we are
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not present. There can be no question of our permitting, tolerating or conniving at discussions or negotiations about the giving up of our nuclear forces in our absence. That is absolutely clear. On the other hand, we here would like the country to be in a position to reduce its weapons when the time comes, and finally to give them up when the time comes, after negotiation, in agreement. I think that it would be about right if we said that we would do that, or be prepared to consider doing it, when the super-powers have come down to about half their present level in strategic weapons. That is the express Chinese policy. They have already said that they will do that. It is compatible with the general French approach. It would be beneficial if this country were to adopt it too.
One last word on the negotiations: if anything, though they are wider than they have ever been, they should be even wider still and more organic. Difficulties can arise in the course of the negotiations, and are likely to, as a result of the military-industrial complex—or, I should now say, military-industrial-academic complex—in either super-power blarneying or tricking their own leaders into doing something which they know will cause the negotiations to fail. That has happened so often before. Difficulties can come to the negotiations from the fact that they have been artificially limited in their scope. If the security of any country, or the efficacity of any weapon system is affected by the negotiations, and that country or that system has been left outside the negotiations, those negotiations will fail, as so many have before. They must cover the right countries—those whose security may be affected—and the right weapon systems—those whose efficacity may be affected.
I fear that it is quite likely that the new negotiations will be wrecked by one or other of these familiar dangers. It would not be the first time, but let us hope, and let us above all work, for their enlargement, and to prevent silly plots by the military on either side upsetting them.
3.23 p.m.
The Lord Bishop of Oxford: My Lords, my interest in this debate is first and foremost that of any ordinary citizen of this country and, indeed, of any sane person in the whole world who prays for peace and longs for his children and grandchildren to live without the recurring threat of annihilaton by war. It is also the particular responsibility of every Christian to care deeply about this issue in virtue of the universal character of his faith.
As it happens, my own ministry has been exercised, partly at least, in the international sphere. For the past 10 years I have been one of the presidents of the Conference of European Churches. This is quite a modest organisation, with a small headquarters in Geneva, but it brings together in an unusual manner Christians from both Eastern and Western Europe of the Orthordox, Anglican and Protestant communions. It also has many close and friendly links with the Roman Catholic hierarchies of Europe from East to West. Since the Helsinki Conference on Peace and Security which aroused such hopes in 1975, representatives of the European churches have endeavoured to keep alive what may be called the Helsinki process and to remind the Governments concerned of the follow-up meetings in Belgrade and Madrid and of the

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undertakings that were given and the expectations aroused at Helsinki.
It may be said that our efforts in that direction have been crowned with very little success. Of course, if we are inviting governments to be self-critical, we ought to expect churches to be self-critical as well. If we consider the universal character and vocation of the church (if I may use that word in the broadest sense possible), it has proved itself to be a less effective agent in the realm of peace and disarmament than both its members and its non-members may have had a right to expect. Indeed, when one engages in international meetings of churchmen, one realises the difficulties of a Christian's exercising proper independence of judgment and not simply being regarded as a mouthpiece for the interests of his country and its government. I think that we are all familiar with that criticism when it is applied to church leaders in many of the countries under Communist rule, but we are perhaps less apt to consider whether, even in our democratic societies, there may be a beam in our own eyes which becomes quite apparent as soon as we go outside our borders.
I begin in this way because it is not the object of this speech to heap detailed advice upon Her Majesty's Government but rather to speak about the necessary infrastructure (if I may so call it) of disarmament. No doubt we all have our own pet theories and remedies in the realm of disarmament, but we do not all have the responsibility of Government when trying to put policy into practice. Nevertheless, the interest of the churches in disarmament is not simply that of any old non-governmental organisation. It arises from the fact that the churches contain a great many people, some of whom are politicians, and of many different persuasions, but most of whom are without any special expertise; but all alike are subject to a divine imperative which they may not refuse—namely, to seek the peace and welfare of all humanity.
It was for this reason that a few years ago many Christians besides myself supported a petition by the World Disarmament Movement which was to be laid before a special session of the United Nations. Cynics could, and no doubt did, say that this was a rather futile gesture of pious hope, especially as the citizens of a number of countries would not be free to sign such a petition even if they were aware of its existence. But the worthwhile value of a petition like that seemed to be that it signified the passionate concern of ordinary men and women of different nationalities for a fresh approach to disarmament. It was a welcome sign that peace is always a matter of too great importance to be left to experts of any kind, or indeed to governments, and that public pressure against war, violence and destruction has always to be maintained.
It seems to me, therefore, that the first word of this House to Her Majesty's Government ought to be one of encouragement not to be afraid to persevere, and persevere vigorously, in the face of that kind of fatalism which so easily overtakes our contemporaries when the subject of world disarmament is discussed. The late Lord Noel-Baker who devoted so much of his life to a campaign against the arms race wrote these words 30 years ago:
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"No one who has closely followed disarmament negotiations since 1919 is likely to be guilty of facile optimism about the prospect of success. But no one who understands the present arms race should be guilty of facile pessimism, which is by far the graver fault. Defeatism about the feasibility of plans for disarmament and ordered peace has been the most calamitous of all the errors made by democratic governments in modern times".
In what ways then could we try to escape the paralysis of what Lord Noel-Baker called "facile pessimism"? In the first place we agree with the noble Lord, Lord Molloy, that we surely ought not to sit back and leave everything to the outcome of negotiations between the United States of America and the USSR, as if any nation less than a super-power had little or nothing of significance to contribute to the cause of world disarmament. That is surely a great fallacy and our Government should be prominent in exposing it as such.
We have recently had a welcome moment of hope in Geneva, where the encounter of Mr. Shultz and Mr. Gromyko was at least several degrees warmer than the weather. But already hesitations and reservations are beginning to be expressed about the future of their negotiations—and one may venture to guess that the mentality of those two great powers is generally so different and the spirit of competition between them is so keen, that they are not always the most hopeful runners in the race of détente. The fact that very heavily armoured creatures are apt to be lacking in mobility is illustrated by the life history of the dinosaur and it is not the duty of the Christian, in particular, when he surveys the origins of his own faith, to think that human history is always governed by colossal power.
It is therefore my own conviction that just as the smallest nation is capable of being a serious trouble-maker, as we know, and of setting a match to the conflagration, in the same way there is no nation so small that it could not, by a wise and pacific policy, make some contribution to disarmament in its own region. We are not a small nation and we still retain some credit in the world for being capable now and again of disinterested action in international affairs. That is why this Motion is justified in asking the Government to take an initiative in bringing forward new proposals and in indicating that these proposals should not consist of mere rhetoric or utopian generalisations but should be realistic in character.
Why should we not begin, for example, by working for the creation of quite a narrow zone in central Europe, free of nuclear and chemical weapons, the zone to be extended in depth as confidence grows? The idea that peace and disarmament begin on a global scale and move inwards seems inherently improbable and quite unsupported by history. On the contrary—if we may go a little into history—the initiatives that have been most successful in the past, such as the Rush-Bagot Agreement of 1817 between Britain and the United States demilitarising the Canadian border or the Karlstad Convention of 1905, confirming the demilitarisation of the border between Norway and Sweden, have been comparatively small, good-neighbour agreements. Yet who shall say that they have not made their useful contribution to peace and prosperity in later generations?
By the same token, in our own day, European powers like ourselves who have a common interest in

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avoiding the turning of Europe again into a battle ground may be the right ones to take initiatives for world disarmament, first by setting a regional example rather than just waiting passively for the two super-powers to reach an agreement on behalf of everybody.
I make one last observation: a recent survey of all armed conflicts since 1945 (of which there have been about 150) has shown that the most frequent cause was the allegation that human rights were being denied in one way or another. We know quite well that nothing can arouse public indignation so much as the gross violation of human rights—say, in the persecution of some individual or group—by the government of another nation. And we may be sure that the same indignation sometimes applies in our own case, however blameless we may suppose ourselves to be. The acquisition of more and more military hardware—which is sometimes supposed to be our only guarantee of peace and security—hardly touches this matter of human rights at all. It cannot be shown that our world is a better, more just, more merciful place because powerful nations keep improving their weapons systems, and still less because small nations feel compelled to spend money on armaments which they ought to be spending on feeding and educating their people.
One of the curses of the present deadlock between powers with the capacity for overkill is that it makes what may be called chivalrous action almost impossible. As we witnessed in the cases of Lebanon and Afghanistan (to mention two), the fear of massive destruction on a world scale has made it that much harder to prevent anarchy and cruelty on a small scale.
My conclusion is that any proposals brought forward by the Government should not simply be concerned with the well-worn subjects of the calculation of numbers of weapons and the possibilities for their inspection, as if we believed the path to disarmament to be a largely impersonal business governed by monstrous inventions that have reached beyond human control. To anybody, religious or not, who cares about human dignity, such a view ought to he anathema. In spite of the scorn that was being poured on the expression "peace-building" in this House yesterday, it is a plain fact, without the steady building up of mutual confidence between the parties, disarmament negotiations are likely to go on being unfruitful—unless there is an easing of the suspicion with which they are so often poisoned.
It is in the opening of hearts and minds, and the abandonment of national caricatures (which are usually out of date anyway), that any hopeful process has to begin. Included somewhere in that process should he work for human rights on the basis of international agreements, and especially for the better implementation of those agreements which already exist. It is all too easy to use that phrase "human rights" only as a stick to beat other regimes of which we disapprove, but it is much more valuable to work patiently for the recognition of common standards by which governments will abide—and not only when it happens to suit their book. This is surely a crucial part of any multiple strategy for the prevention of war today
3.38 p.m.
Lord Brockway: My Lords, my first words must be to congratulate my noble friend Lord Molloy on his fortune in winning the ballot for this debate, on his selection of subject and in the moving speech with which he initiated it. Whatever our views, I think we all appreciated it very much.
On the last occasion when we discussed disarmament I said that over the past few months I had met representatives from six governments—three Western and three non-aligned—and felt that there was a warmer climate in international affairs. I think that view has been justified by the climax of the agreement between Mr. Shultz and Mr. Gromyko for further discussions.
The Motion asks for new and effective proposals. I want to begin by referring to measures which I believe are on the agenda of political reality, and to urge the Government to support those measures. The first is the discussion at the Geneva Conference on Disarmament of an international convention banning chemical weapons. I was disturbed by recent rumours that in this country we were to start manufacturing them again. I welcome the denial of that. The proposals at the Geneva Conference on Disarmament are progressing promisingly. The Soviet Union has agreed to verification measures, and I earnestly hope that the Government will give full support to the conclusion in a satisfactory way of those negotiations.
The second measure which I believe is within political reality is the banning of weapons in outer space. I am glad that that subject is to be discussed between the USA and the USSR. Last month, at the United Nations, when this ban was discussed, a resolution in its favour was carried by 150 to none. The United States alone abstained. I congratulate the British representative for voting in favour of that resolution. That, again, is a proposal—an effective proposal—on the agenda of realities.
I wish that I could say the same about the attitude of the Government to the third proposal which I believe is realistic: the proposal to ban all nuclear weapons tests. We ban tests in the air and we ban them on the earth; they now take place only underneath the ground. All over the world there is overwhelming support for this proposal. At the United Nations discussion the proposal was carried by 123 Governments to 2. I urge the British Government to change their attitude to that proposal.
The fourth realistic measure is a new weapons freeze—a proposal which came from America and which has swept the world. Why are the British Government opposed to this proposal—a freeze not only on the manufacture of nuclear weapons but also on research, on development, on deployment, on travel facilities and on anything else which would contribute to ending the danger of a nuclear war?
The next great measure of hope is the support for nuclear weapon-free zones in Northern Europe, in Central Europe and in South-Eastern Europe. They are already in operation in Latin America. Such zones are now proposed by the Governments for the South Pacific, and there is a proposal for the Middle East. In this world, which is surrounded by efforts for devastating nuclear war, these popular proposals for

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zones which are free from danger of nuclear war certainly should be supported by our Government.
Lastly, I want to urge very earnestly upon the Government that they should support a treaty against the first use, not only of nuclear weapons but of conventional weapons as well. The Government themselves said in reply to the Soviet proposal for a ban on the first use of nuclear weapons that they were in favour of banning the first use of conventional weapons as well. NATO has endorsed that idea, and the Warsaw Pact has supported it. There are all the conditions in the world now for a treaty banning the first use, not only of nuclear weapons but also of conventional weapons—indeed, of all kinds of weapons. When we speak of effective proposals, surely those six proposals are within the bounds of realistic achievement. I beg the Government to support them.
The Government say that they are in favour of multilateral disarmament. I wonder whether the Government realise that over the greater part of the world they are regarded as being opposed to multilateral disarmament. That view rests on the fact that both in the United Nations and in the conference on disarmament at Geneva the British Government are constantly opposing measures for disarmament. The Quaker Peace and Service Headquarters at Friends' House have issued a detailed examination the votes cast at the United Nations last month on the subject of disarmament—the votes cast by China, France, the United States, the United Kingdom and the Soviet Union. No one can study that analysis of the votes given by the British representative without understanding the widely-held view that instead of supporting multilateral disarmament we are opposing it.
At the United Nations last month we opposed the abolition of tests for nuclear weapons. We opposed the conclusion of an international convention on strengthening the security of non-nuclear weapon states. We opposed a motion calling upon all states and institutions to terminate nuclear and military collaboration with South Africa. We opposed a motion for a nuclear weapons arms freeze. We opposed a convention on the prohibition of the use of nuclear weapons. We opposed a motion calling for efforts to intensify multilateral negotiations to reverse the nuclear arms race. We opposed a motion for international co-operation on disarmament by implementing United Nations recommendations. We opposed an invitation to all Governments to submit reports on steps to expedite action to prevent nuclear war.
We opposed a motion calling for a report on contributions of United Nations special agencies towards arms limitation and disarmament. We opposed a motion calling on the Geneva Committee to proceed without delay for nuclear disarmament. We opposed a motion in favour of no first use of nuclear weapons. We opposed a motion for the prohibition of neutron weapons. We opposed a motion urging the United States and the Soviet Union to find a way out of the impasse in negotiations. We opposed a motion for the complete elimination of nuclear weapons. We opposed a motion for multilateral talks to curb the naval arms race. In view of that record, how can it be otherwise that over such a large part of the world, the
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Government, despite their declaration, are opposing every kind of move towards multilateral disarmament.
In addition—I shall not delay the House by reading the list—we abstained on a whole series of issues that were moderate in character, much more moderate than those that I have read. At the Geneva conference, which has been asked by the United Nations to prepare proposals for a comprehensive policy of disarmament, and where the subject has been divided into workshops, the British Government are in a minority on the majority of those committees because they are balking the efforts towards multilateral disarmament. My appeal to members of the Government is this—that they reverse their policies in the world upon those issues, reverse them where they are opposed even on the separate measures that I have indicated, but far more deeply, reverse their general attitude towards multilateral disarmament in the world. Otherwise, we are just going forward to disaster. I should not like to have the responsibility of being a member of a Government who have so abysmally failed to prevent this process from going to disaster.
3.52 p.m.
Lord Chalfont: My Lords, I speak with some feeling and indeed with some experience of these matters, having been a Minister in the Foreign Office responsible for arms control and disarmament matters and having followed this subject very closely ever since I left government. When I saw the Motion in the name of the noble Lord, Lord Molloy, I thought that I would be very sharply at odds with him because of the phrase which refers to effective world disarmament. However, I found that, in his speech, the noble Lord did not seem to be calling for world disarmament but for some more modest measures of arms control. I should like, therefore, simply to take up one or two of the points that he made in what I hope will be a constructive manner.
In the first place, I would earnestly counsel the noble Lord, Lord Molloy, the noble Lord, Lord Brockway and, indeed, any other Members of your Lordships' House not to become too euphroic about the results of the meeting in Geneva. This was only a first step, a very hesitant first step. Already, since the talks, almost within 24 hours, we have the Soviet Government announcing their conditions for the success of further talks, one of those conditions being the abandonment by the United States of America of its strategic defence initiative. The President of the United States has no intention of abandoning that initiative. If, therefore, the Soviet Union is saying that it will not arrive at any agreements except as a result of that abandonment, then there will be no agreements. I have to tell those who now feel a sense of warmth—that word has been used twice in today's debate—as a result of what happened in Geneva, that, in my view, it is a sensation that might turn out to be tragically false.
The noble Lord, Lord Molloy, spoke about chemical warfare. The noble Lord, Lord Brockway, also, I think, referred to it. Yes, indeed, it would be an excellent idea if we could arrive at a universal agreement or convention on the banning of chemical warfare, the production and deployment of chemical weapons. I would, however, remind your Lordships that in the confrontation that exists in central Europe

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at the moment the Soviet Union has virtually a monopoly of chemical weapons. We have none. There are none deployed in the British Army of the Rhine. The Soviet Union threatens, in the event of war, to use those weapons. I would suggest that those who are so anxious to arrive at an agreement on chemical warfare should direct their pleas not to Her Majesty's Government, who have already abandoned their right to deploy nuclear weapons in Europe, but to the Soviet Union.
Lord Molloy: My Lords. I should like to defend myself. If the noble Lord reads Hansard tomorrow, he will note that I congratulated this country and deplored the fact that the super-powers did not have the courage to follow our example.
Lord Chalfont: My Lords, I apologise if I gave the noble Lord the wrong impression. I understand what he said and sympathise with his view. I am pointing out that it is not the super-powers—that is a phrase used often too loosely in the debate—but it is the Soviet Union that has the monopoly of chemical weapons in Europe. I wish people would understand that this is not a kind of symmetrical competiton between two equals. We talk about the super-powers as if able to say, "A plague on both their houses". That is a false and dangerous road to take.
Verifiability is another matter to which the noble Lord, Lord Molloy, referred. The noble Lord said that the question of verifying arms control agreements was no longer a problem because of such things as satellite reconnaissance and other national means of intelligence and inspection. This, again, is a very dangerous assumption to arrive at. Yes, it is possible by the use of satellites to determine certain things and to acquire certain intelligence. We can, as the noble Lord said, read the number plates of vehicles in the streets of Moscow. What we cannot do, with existing means of national verification, is a whole range of very important things. We cannot, for example, determine by our own means how many warheads there are in a missile when it is being tested by telemetry. We cannot, by national means of verification, determine what kind of research is taking place in the Soviet Union, what kind of development of weapons is taking place on the ground in factories.
It is true that satellite reconnaissance has given us an enormous weapon of intelligence, but we are not yet in a position where we can totally verify arms control agreements without international inspection. I do ask the noble Lord to accept that, because it should affect a good deal of our attitude towards certain proposed arms control agreements of the kind proposed by the noble Lord, Lord Brockway, to whose speech I shall refer in a moment.
Lord Kennet: My Lords, will the noble Lord not agree that the way to put that right is by on-site inspection, and that it is a hopeful development within the last year that the Soviet Union has for the first time, in a limited context, agreed to the principle of on-site inspection?
Lord Chalfont: My Lords, yes, I agree entirely with the noble Lord, Lord Kennet. The answer to arms
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control verification is on-site inspection. One of the major obstacles to arms control agreements for the last 25 years has been the Soviet Union's refusal to accept on-site inspection. Again, it is a unilateral refusal. It is the Soviet Union that has refused. The noble Lord says that there are encouraging signs that the Russians may now be prepared to accept a measure of on-site inspection. If they do so, this will indeed be an encouraging development.
Finally, on the speech by the noble Lord, Lord Molloy, I should like to say that the noble Lord hinted, unless I misheard him, that there could be, among intelligent people, very little disagreement about the aims of the Campaign for Nuclear Disarmament. Let me assure him that there are in some quarters grave reservations about the aims of the Campaign for Nuclear Disarmament. In the first place, I totally reject the concept of unilateral disarmament measures. They are dangerous and destabilising. But I would go further; and this may not please the noble Lord or some of his friends. I believe that nuclear disarmament, even if it were multilateral, in isolation from other forms of disarmament, is equally dangerous.
We must not address ourselves to the problem of nuclear weapons as though they existed in a strategic vacuum. They are part of a whole complex of confrontation, and if we were to remove nuclear weapons without doing anything about so-called conventional weapons or chemical weapons, we would find ourselves then in a position of serious vulnerability and inferiority vis-à-vis the Soviet Union. So I ask the noble Lord to understand that there are some people with modest claims to intelligence who strongly reject the views of the Campaign for Nuclear Disarmament.
I now come, if I may, very briefly—I hope something has gone wrong with the clock, because I do not think I have been speaking for 23 minutes—to the speech of the noble Lord, Lord Kennet. I must say to him, with deep respect and affection, that his characterisation of the position on the Strategic Defence Initiative—the star wars problem—is a parody of the true situation. It is true that the Americans have assured the Prime Minister that they will not deploy any strategic defence systems without consulting their allies; but they never intended to, anyway. The Strategic Defence Initiative is a research programme, as he well knows. It has nothing to do with the deployment of the weapons. As any member of the United States Administration will tell the noble Lord, if he cares to ask, there is no plan whatsoever to deploy strategic defence weapons; there is only a research programme.
The noble Lord spoke of the wilder hawks in the Administration. Well, yes, there are some hawks there. There are here in Western Europe some doves who I fear are doing our cause in the Alliance some damage in their attitudes to the Strategic Defence Initiative. The noble Lord, Lord Kennet, suggested that what the Prime Minister had achieved in her talks with President Reagan in some way was a result of, or was consonant with, the letter addressed to her by Dr. David Owen. That is of course not so. Dr. David Owen's letter, which ran to something like four pages, invited the Prime Minister categorically to oppose

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their Strategic Defence Initiative. Happily, the Prime Minister did not do so. What the Prime Minister said, if the reports in the press may be relied upon, was, "We are at one with the United States on the matter of Strategic Defence Initiative".
If she said that—and I believe that she did—I for one am very happy, because I think that at this moment we do not know enough about the Strategic Defence Initiative to condemn it. The noble Lord's suggestion that the United States should suspend its research programme during the negotiations would, it seems to me, be playing exactly the game that the Soviet Union wants us to play. The Strategic Defence Initiative was what brought the Soviet Union to the negotiating table. It would not be there if it were not for that. It said, with a great flourish of trumpets, "We shall not come to the negotiating table while you continue to deploy your cruise and your Pershing missiles". We continued to deploy them, with courage and resolution. The Soviet Union came to the negotiating table. Why?—because of the star wars initiative. If we were now to encourage the United States to abandon that research, then there would be no incentive whatsoever for the Soviet Union to continue with these negotiations.
Lord Kennet: My Lords, I should like to take up the point about the motivation both of the Prime Minister and of the Soviet leadership. May I point out that I did not say that the United States should abandon its research, and correct the noble Lord on this? My suggestion was that the United States and the Soviet Union should both suspend their research while negotiations lasted. I think it might help to put the matter into proportion—I do not think custom would permit me to do it myself—if the noble Lord were to read to the House the Prime Minister's four-point agreement with Mr. Reagan, which is extremely brief.
Lord Chalfont: My Lords, I have read the agreement, and I have read Dr. Owen's letter to the Prime Minister. All I am at pains to point out to the House at the moment is that the Prime Minister did not oppose the President's Strategic Defence Initiative. I am making that clear and I am seeking to commend her for taking that point of view with the President.
The noble Lord, again, sought to make a point about anti-satellite weapons by saying that the United States had been the first to go into the anti-satellite weapon business. The fact of the matter—and he will know this as well as anybody—is that the only fully tested ground-based anti-satellite system in the world today belongs to the Soviet Union. The United States followed that research, and in my view followed it wisely. If I may say so, again with great respect, I find it difficult to understand why the noble Lord, and others of his friends, should continue, in everything he does, to try to vindicate the Soviet Union and to heap excoriation and blame upon the United States of America. I do not want to pre-empt the debate which will come next, but I ask noble Lords to understand one simple fact. The Soviet Union is our potential enemy, and shows itself to be so in almost everything it does and says. The United States of America is our great, valued and trusted ally; and there is no way in
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which we can create any symmetry between those two—
Lord Kennet: My Lords, will the noble Lord give way again?
Lord Chalfont: My Lords, I really am being interrupted.
Lord Kennet: My Lords, I am sorry to interrupt the noble Lord once more, but he is implying that I said that which I did not say. Does the noble Lord differ from my statement of the following succession of events? In the early 1960s, the United States had two operational anti-satellite systems. It cancelled them because they are not very good; that is to say, it dismantled them because they are not very good. The Soviet Union then proceeds to develop its own, later, and, presumably, as a result.
Lord Chalfont: My Lords, yes; I contest that version of events, but this is something which obviously we must not continue in the Chamber of your Lordships' House. Perhaps we can continue it at some other time.
If I may, I want to refer briefly to the speech by the right reverend Prelate the Bishop of Oxford, on only one point; that is, his desire to see the establishment of nuclear-free zones. I ask him to understand that a nuclear-free zone is really a meaningless concept. It may mean that you do not have in that zone nuclear weapons stationed, nuclear weapons developed or nuclear weapons manufactured, but it does not prevent that place being a target for nuclear weapons. I understand that there are certain boroughs and municipalities in this country which have declared themselves to be nuclear-free zones. If this makes them feel any better, then I do not mind awfully about that, but I hope they do not think that in the event of a war they are going to be secure from the nuclear weapons of the enemy. I beg the right reverend Prelate to believe that the nuclear-free zone, ever since the days of Adam Rapacki, the Polish Foreign Minister, has been a virtually meaningless concept.
I now come. finally—I see that. according to the clock, I have been speaking for 31 minutes—to the speech by the noble Lord, Lord Brockway. I should like, if I may, to go through very briefly the six proposals which he made for arms control and disarmament.
First, he proposed an international convention on chemical weapons. Yes, we should all love that, but, as I have said, we must understand that at the moment the only country that deploys and threatens to use chemical weapons is the Soviet Union. Secondly, he proposed the banning of weapons in outer space. There is already an outer space treaty which deals with the demilitarisation of outer space.
Lord Kennet: My Lords, I rise on a matter of correction of fact. It might be interesting for the House to know that the outer space treaty bans the positioning of "weapons of mass destruction" in outer space, not, as the noble Lord stated, "weapons".
Lord Chalfont: My Lords, it bans the stationing of what are virtually nuclear weapons in outer

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space—weapons of mass destruction. I am sorry if I misunderstood the noble Lord, Lord Brockway, but I thought it was that to which he was referring. If he was referring to banning in outer space weapons other than weapons of mass destruction, then that, of course is a different matter.
Next, there is the proposal of a comprehensive test ban—the banning of underground testing. Yes, we should all love that, too; but, again, it is a matter for adequate verification. I do not think that we can have a comprehensive test ban when there is the possibility that one or the other side might cheat in their adherence to that test ban.
It is also proposed that there should be a weapons freeze. I am afraid that this, again, is a virtually meaningless concept. A weapons freeze means what—ceasing to research, develop or deploy? If it means ceasing to research, how is it to be verified? There is virtually no way in which to verify research, and I personally would not want to take part in a treaty which could be so comprehensively circumvented by one side or the other.
Next there is the proposal of nuclear-free zones. I have already spoken of those. This is a concept without any meaning at all; as is, indeed, a treaty banning the first use of weapons. The noble Lord said nuclear weapons and all other weapons. If we were to ban the first use of nuclear weapons in war it would be a meaningless treaty because if war broke out no one would take the slightest notice of it. When they are at war, people do not take note of treaties signed in peacetime. If we are talking about the banning of the first use of all weapons, if we are talking about a nonaggression pact of some kind, then I see no reason why we should not have that. However, we are already in a situation where we, the NATO Alliance, have no intention whatever of being the first to use a weapon of any kind at all. It is a defensive alliance, and it is to the Soviet Union that the noble Lord should address his pleas.
I should like to continue speaking on this subject but I cannot do so because there is not enough time. I should like, if I may, to wind up with just one or two brief comments. As I have said, I thought that I was going to be sharply at odds with the noble Lord, Lord Molloy, because I thought that he was going to be talking about general and complete disarmement, which, from the experience of six years in Geneva, I can confidently say I think is an interesting, perhaps desirable, but totally unattainable end. What we should be looking for is arms control, but arms control as an aspect of defence and security. Arms control is not a concept in a vacuum. It is not necessarily a good thing to have arms control. It is only a good thing to have arms control if it improves security. I hope that Her Majesty's Government will continue to use that as a criterion in all their international negotiations.
The noble Lord, Lord Molloy, said something in his speech with which I can totally and unequivocally agree. He said that our aim must be to save the world for freedom. I go along with that 100 per cent. But we shall only do that if we recognise that there is a threat to that freedom, a real and continuing threat from a political and ideological system which is irreconcilable with our own—I repeat, irreconcilable. There is no
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way in which liberal democrats, who believe in freedom, can live with totalitarians, for whom the individual exists only to serve the state. There is no way in which we can co-exist with such people, and I ask the noble Lord to understand that.
I should like to conclude, if I may, with a comment which I may have made in your Lordships' House before but which I think bears making again. At one time in the 1960s, when in the United States there was a great uprising of anti- war and peace movements, there was a young man seen on a university campus bearing a banner on which was inscribed the words, "Nothing is worth dying for". It seems to me that that is something that we must reject wholeheartedly and passionately, because if nothing is worth dying for then nothing is worth living for. I reject both those propositions.
The noble Lord, Lord Brockway, read out a list of resolutions of the United Nations that Her Majesty's Government had opposed, and he begged Her Majesty's Government to change their ways. I beg them not to do so. I beg them to continue to oppose these impractical, half-baked, half-digested ideas that come out of that place, and to continue a realistic search for arms control based on the strength and security of the Western alliance.
4.16 p.m.
Lord Renton: My Lords, it is a great privilege to follow the noble Lord, Lord Chalfont, in this debate, for he speaks with such great knowledge of these matters and, indeed, with experience. As he has covered some of the ground that I was intending to cover, and as I agree with nearly all that he said, I am sure that your Lordships will be glad to know that I have been able to shorten my remarks somewhat. But there is one point that he mentioned on which I should like to expand in a moment. The noble Lord said that nuclear disarmament is not enough and that we must apply our minds also to the reduction of conventional armed forces. I was pleased, and if I may say so surprised, to hear the noble Lord, Lord Brockway, for the first time within my knowledge, make the same point. I hope that your Lordships will feel that the time has come in this debate for a contribution to be made by somebody from these Conservative Benches and that your Lordships will think that it is better later than never. I am relieved to find that already I have been speaking for only one minute!
The Motion which has been moved by the noble Lord, Lord Molloy, is well-intended and worthy. Indeed, all of us must agree that it was right for successive Governments of this country to do what they could to achieve world disarmament, however difficult were the circumstances. I have a strong suspicion that the noble Lord, Lord Molloy, chose the subject of this debate before it was known that the Soviet Union and the United States were going to get together at Geneva. But that does not reduce the value of the debate: indeed, it enables us to take stock, as we should now be doing, of the situation which has been reached.
The noble Lord, Lord Chalfont, said that the meeting in Geneva would never have taken place but for the decision of the United States to carry out

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research on what he called and what is sometimes referred to as the Strategic Defence Initiative. It is also miscalled, in my opinion, the star wars, because, of course, it is intended to be a purely defensive system. However, with respect to the noble Lord, Lord Chalfont, I think that there are two other strong reasons why the Russians decided that it would be worth getting together with the United States. One reason, of course, is surely the deployment of the cruise and Pershing missiles in Europe. That, after all, does something to restore the nuclear balance, and must have done a bit to bring the Russians to their senses.
But there is a further reason (is there not?) in that the Soviet Union are already spending at least 15 per cent. of their national income on arms and the men that use them, compared with the spending of the United States, which is 7 per cent. To the extent that it is relevant, I would mention that we spend 5·4 per cent. of our gross domestic product on defence expenditure. So the Russians are presumably worried about the vast financial and economic burden of their aggressive policies and the threats which they constitute.
I feel strongly that those factors have had a most beneficial result in changing Russian attitudes, and in spite of what they have been trying to do to fetter the discretion of the Americans in these negotiations, I hope that this change of attitude, perhaps with some help and persuasion from our own Government, may last.
Of course, we now know that the negotiations have, I think rather strangely, been divided into three parts and are to be considered quite separately. The first part concerns intercontinental nuclear missiles; the second will be about medium-range nuclear weapons; and the third concerns the so-called star wars weapons, although they are purely defensive. The next stage will be for United States and Soviet officials to discuss how, when and where the three separate negotiations are to be held. I think that this may give our own Government an opportunity to make some helpful suggestions, I hope to both sides, as part of our continuing dialogue with both sides at diplomatic level, which is sometimes forgotten. But I hasten to say that I would not ask or expect my noble friend to reveal much about that in this debate.
Although we must obviously hope that those two great powers will reach agreement on reduction, control and supervision of nuclear weapons with beneficial results for the whole world, I suggest that it is even more necessary and important for them, for us, and indeed for the whole world, to reach agreement on the reduction of conventional forces. I hope that that does not sound too unorthodox to noble Lords or appear to raise a paradox. I say it for two main and, I believe, powerful reasons. The first is that since the end of World War II all the wars that have taken place—and there have been some pretty horrible ones, and there still are—have been conventional wars outside Europe. Each of the great powers, including ourselves, has been involved in some of those wars. At least two of those horrible wars continue—the one in Afghanistan and the one between Iran and Iraq. But there has been no war in Europe; there has been no
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direct confrontation between the United States and Russia; there has been no World War III—and that is because of the nuclear deterrence, and we know it.
The second reason why conventional disarmament is even more important than nuclear disarmament is that the Russians have such a great proponderance of conventional forces on land, in the air and at sea. If all nuclear weapons were abolished, the Russians could hold Europe to ransom and cause even more misery than they have done in various parts of the world, and just as they are still doing in Afghanistan. Let me give some examples, at not too great length, of Russian conventional strength, and here I am attempting to amplify what the noble Lord, Lord Chalfont, said. However, in considering that one must remember that the scene is complex and changes easily because of transfer of forces from one area to another.
For example, a new precedent was set, a new logistic dimension was given to our strategic thinking by the successful diversion of our forces in order to resist the conflict in the Falklands. I suppose that it was something which had been thought of by someone within the Ministry of Defence who was doing strategic planning but which the great mass of us never contemplated was possible. I mention that simply to illustrate that it is dangerous to ignore the complexities of this matter.
Having said that, let me draw attention to several outstanding facts. First, in the Eastern Atlantic Russia has 83 submarines and NATO has only 36. The figures I give are quoted from Government sources and are available in your Lordships' Printed Paper Office. On the central front, which includes Europe, Russia and her allies have 2,700 fixed-wing aircraft, which is more than twice as many as NATO. Of course, one must remember that the numbers of troops in Europe is not a full test of the strength of armies. We must remember that General Wavell's 30,000 men captured 480,000 Italians in the western desert in 1941. But, in fact, the Warsaw Pact countries have nearly three-quarters of a million soldiers in fighting units—not support units—on the central front compared with NATO's smaller figure of 590,000.
However, perhaps more to the point than the numbers of troops is the fact that the Warsaw Pact countries have 18,000 main battle tanks in Europe compared with NATO's 7,800. The Warsaw Pact countries have well over twice as many main battle tanks. Of course, one could greatly amplify these figures, but I hope that I have given enough information to show that nuclear disarmament is not enough. When my noble friend Lady Young replies to the debate perhaps she could give me some help with regard to a particular negotiation which started in Vienna in 1973. It is called the Mutual and Balanced Force Reductions negotiation, the purpose of which is for NATO and the Warsaw Pact to reach agreement on conventional force reductions in central Europe. Are those negotiations still continuing, as Government sources seem to imply, or have they ground to a standstill? What is the position?
Therefore, I say this, and I say it in particular to the noble Lord, Lord Molloy, who is not himself obsessed with the nuclear scene, although many of his friends are—I do not even say his noble friends; but many of

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his friends in politics, inside and outside Parliament, are so obsessed with the nuclear scene that they forget the terrible destructive power of conventional weapons. There are now far more conventional weapons assembled in Europe than were ever assembled at the start of World War I or World War II. Indeed, if we eliminate the Russian front, it may well be that there are as many as there were at the end of World War II.
Therefore, I hope that negotiations on this subject will not be confined to the matters on which the Soviet Union and the United States have agreed to negotiate at present. When they are enlarged, of course, they will have to go far beyond discussions between those two super powers. I say that in particular as far as Europe is concerned, because within NATO it is the European countries which provide 90 per cent. of the ground forces and 80 per cent. of NATO's tanks and air combat strength.
I conclude by saying that we must not delude ourselves that the world can be made safe merely by getting a partial reduction of nuclear weapons, merely by getting a degree of control, although it would be satisfactory to get the nuclear terror into balance again; that would be some achievement. It would be a good beginning, just to do that, but it would not be the end.
4.31 p.m.
Lord Graham of Edmonton: My Lords, it is little more than two months since these matters were last debated in the House, during the debate on the Queen's Speech, and yet so much has happened in those last two months. On that occasion my noble friend Lord Boston of Faversham, followed by my noble friend Lord Cledwyn of Penrhos, both raised a number of serious and searching questions of the spokesman at the time. None of us needs reminding of the text that eternal vigilance is the price of freedom, nor that there are always many fronts to watch, many balls to be kept in the air at once.
We on these Benches want to pay tribute to the diligence of the Government over the past two months; in particular we note the productive visit of Mr. Gorbachev last month. We note the discussions by the West European Defence Ministers. I remind the noble Baroness that those have yet to be debated in this House. We note the initiatives played by the Prime Minister in her travels to China and to the United States. The noble Lord, Lord Kennet, is wise in reminding us that the China dimension is there, cannot be ignored, will not go away and must always be taken into account. Above all, we see much to lift our spirits arising from the Geneva talks. All these subjects have been referred to, and will again be referred to, in this debate.
These are times of great movement in defence and disarmament matters that call for flexibility in approach, a willingness to consider others' initiatives, and a time for patience. It is against that background that my noble friend Lord Molloy has rendered us a great service in initiating this debate. His deep commitment to world peace is beyond dispute.
My noble friend Lord Brockway raises, and pre-empts for many of us, many questions which were
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proper to be raised in this debate. We shall listen with attention to the way in which the noble Baroness responds to the challenging reminder given to her by my noble friend to defend the record of Her Majesty's Government in the United Nations.
After 40 years of glaring and staring at each other there is little wonder that there has been mutual suspicion. We have had our ups and downs. The dreadful days of the Berlin wall era are remembered with horror. It is a time-worn ploy, not exclusively employed by the East, to seek to sow dissension among an opposing alliance. Even the visit to this country of Mr. Gorbachev, and Mrs. Thatcher the Prime Minister saying that she could do business with him, was used mischievously in the United States. It is a tenet of sound defence strategy to exploit the cracks in the opposing forces.
Labour is fully committed to Britain's NATO membership and we in the West have a difficult task in seeking and maintaining a united front. How could Labour look upon NATO as a cornerstone of our defence other than with appreciation, when we recall that it was formed in the days of a Labour Government and was so ably inspired by one of the great Foreign Secretaries of this country, Ernest Bevin?
The decision to launch a programme of research—the noble Lord, Lord Chalfont, was right to remind us that it is research—into the creation of a defence system not based on revenge, on the retaliatory principle, is a positive change in global strategy, and is welcomed. There are dangers, as has been pointed out. I implore the Government to urge America to take Russia with it, as far as it can, every step of the way.
Time and time again in debates concerning disarmament, world peace, reduced tension and peaceful co-existence we consider the question of national security, and rightly so. I certainly endorse the professions made by Government speakers that a prime duty of the Government of this country is to ensure the defence and the security of this realm. Security from attack and security within our borders is fundamental to peace of mind for all people, but I wonder whether sufficient time and thought is being given by the Government and our allies to striving for our peace of mind by giving others their peace of mind. Why do we burden our economy and deny our people billions of pounds-worth of social needs? It is because we do not accept that Russia's claims to want peace are sincere. So we seek a balance or parity, or mutually assured destruction.
At the same time, the Russians do likewise. They listen to our declarations that we have no intention of starting a war, that we want to live in peace, that we will de-escalate the arms race. Yet the Russians see those sincere declarations—and I accept that they are sincere—against the background of the astronomical, horrific costs of ever-new weapons of mass destruction. If we are entitled to be less than sanguine about Russian protestations, are they not at least as entitled to be suspicious of ours? In other words, can we not accept that both East and West have erred in the past when assessing the intentions of the other? If we can make progress from this moment on in the belief that there is a mutual intention to avoid war and secure peace, will that not be a major step forward?

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Reference has been made to chemical warfare. My noble friend Lord Boston asked many anxious questions on this matter in our November debate. Much progress has been made by this Government in this respect. Tribute to the Government's unilateral initiatives were paid by my noble friend Lord Molloy in his opening address. That is much to the credit of the Government, in the way they have persisted in the subsequent talks to try to secure that which we want. However, I do not get too excited at the current situation. The Prime Minister has reminded us that the Soviet Union has a massive chemical warfare capability. I do not doubt that. She also reminded us that Britain abandoned her capability 25 years ago. I do not doubt that, either. But to contemplate restarting the production of weapons of mass destruction, which chemical warfare could turn out to be, would be viewed with horror by the people of this country, and might have grave consequences.
Of course the Prime Minister has gone on, goaded by the revelations in a newspaper recently, to assert that she has a duty to keep that policy of abandonment under constant review. I do not doubt that, either, but I draw this conclusion: there are elements of our defence policy which are capable of being unilaterally radically altered. I also conclude that it is perfectly possible for this Government to take initiatives of a substantial nature across the whole gamut of defence and still remain within the parameters of a sound alliance. We want to see the authority and influence of Her Majesty's Government used more often to urge America to conciliate rather than to prevaricate in world disarmament talks.
"So far so good" could well sum up the sense and the mood in the first few days after Geneva. I certainly re-echo the words of the noble Lord, Lord Chalfont, who counselled us and cautioned us against too much euphoria in the early days following Geneva. If there is a danger of lurching from peaks of euphoria into the troughs of despondency, we need not be ashamed of hailing the new beginnings with more optimism than events may eventually justify.
As the words of Geneva begin to be translated into specific agreements, or not, we shall adjust. We need to be flexible and patient but always to be looking for the bright side and the right side in negotiations. A sober assessment, post-Geneva, of what is held out as an aim and objective of future talks may seem unreal but we must be prepared to give both Mr. Gromyko and Mr. Shultz the benefit of any doubt. The intentions of both appear to be sincere. I am prepared to leave it at that. There can be few, if any, in your Lordships' House who did not rejoice and feel exceeding glad at the outcome of the discussions that were held in Geneva—such a tiny step out of the darkness towards the light. But, my Lords, it will be with such tiny steps, to talk about talks, that we shall make progress.
What has happened, I asked dramatically last week, to give us hope and confidence, or more hope and confidence, for the future arising from Geneva? First, there has been accommodation. Both parties are too big to be seen domestically or internationally to have given in or have given way to the other side. Yet both America and Russia were able to leave the negotiating table having satisfied not only themselves but the other
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side that a genuine intention to reach agreement under varying heads is in prospect. Only a starry-eyed idealist divorced from reality could have hoped for more, or have expected positive agreements too soon or too much in accord with everything that we want. Secondly, by keeping the future agenda as wide as it is the objectives can be capable of satisfying the most reasonable of men.
Those objectives, although stated, can bear repeating again and again; and we were grateful to be reminded by the noble Lord, Lord Kennet, that inexplicably a full copy of the text has yet to be seen and widely circulated. I for my part rely on much that I read in the newspapers. We read, for instance, that one of the objectives of those talks is to work out effective agreements aimed at preventing an arms race in space; secondly, to work out effective agreements to terminate the arms race on earth; and thirdly, to reach an effective agreement designed to achieve the complete elimination of nuclear arms everywhere. Those are the words which appear in the communiqué. I think that we can all rejoice that they are there. But, in respect of the complete elimination of nuclear arms everywhere, I wonder whether the noble Baroness would tell the House how that objective differs from the zero option which surfaced about two years ago in these discussions and negotiations.
What do we do after Geneva? This indeed has been Question Time for the noble Baroness and I want to put a number of questions to her. Where does Britain come in? What happens to Britain's nuclear weapons? What part will Britain play in the discussions? The noble Lord, Lord Kennet, raised, I think quite properly, the question of whether we were going to be consulted or advised or whether our views are going to be sought. Will the Minister tell us whether there are plans for Britain to be consulted before or during the talks? Will those consultations enable a British input? If so, can the Minister tell the House what we are likely to say? For instance, if we can have our finger on the nuclear trigger now—no launch without our approval at this time—will that agreement be up for grabs in the subsequent discussions? The House is entitled to know whether at the very least we are to be properly consulted, and I believe that the Minister can help us here tonight.
Time does not permit it and neither is it prudent or wise to reflect too long on the sad, bad history of mutual suspicion during the past 40 years. I accept without qualification that this Government, by their own lights, pour billions and billions of pounds into a defence budget when they would much prefer not to have to do so. My noble friend Lord Molloy, in bringing us today the opportunity of this debate, raises the possibility in new and changing circumstances of a whole new world. He puts to the Government the worthy consideration of dramatically reducing expenditure on arms and spending our nation's wealth on supplying a range of much more worthy needs. The ultimate desire of all peoples should be to live in peace. Alas! such simple propositions are challenged constantly by the aggression and the violence which breaks out in the world these days.
Not very often do we hear the aggressor declare that his imperialistic actions are motiviated by a naked bid

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for conquest, for subjugation, for slavery. More often they are justified by allusions to threats to national security, to subversion, to world plans to dominate or, as the right reverend Prelate has said, are claimed to be in response to a crime against human rights. Central to our national defence imperatives is our alliance with others as members of the North Atlantic Treaty Organisation—and Labour is committed to that. But, as a national entity, Britain is not wholly devoid of initiatives.
This debate serves the purpose of allowing us to reflect on the role that Britain can play within our alliance and with our allies. Unless the view is held that there can be no initiatives, no proposals, no questioning of the lead given by America, we must serve our allies best by exercising some independence of thought and action. But, just as my noble friend Lord Molloy is without equal in his passionate denunciation of arms expenditure, he has few equals in his desire for that to be translated into social expenditure. He has asked searching questions, He is not alone. The noble Baroness can assist us all by taking us into her confidence on matters which she understands are of vital interest to the whole House.
4.47 p.m.
The Minister of State, Foreign and Commonwealth Office (Baroness Young): My Lords, I welcome the opportunity which the noble Lord, Lord Molloy, has provided for us to debate the subject of disarmament. The Government take this vitally important subject very seriously, and welcome the sort of well-informed debate that we have had today. The debate is timely, coming as it does a week after the important meeting in Geneva between Mr. Shultz and Mr. Gromyko.
The Motion refers to,
"the need for Her Majesty's Government to take the initiative in bringing forward new … proposals for effective world disarmament".
Such a call must be addressed not in isolation, but against the background of international security as it exists today. Her Majesty's Government are wholly committed to the search for balanced and verifiable measures of arms control and disarmament. Like successive British Governments, we have accepted our responsibility to work for peace and security at the lowest possible levels of arms, while always maintaining adequate defences. The record shows that British Governments have played a significant role in negotiating and achieving multilateral arms control and disarmament agreements. But history should also warn that no British Government can achieve "effective world disarmament" on their own. However willing we are, it takes more than one party to achieve disarmament.
In common with our NATO allies and all British Governments since 1945, the Government seek arms controls agreements based on the fundamental principles of balance and verification. Agreements must be fair to all sides if they are to stick. Hence the need for balance. Each party must also be confident that the others cannot successfully cheat. Hence the need for proper verification. As my right honourable and learned friend the Foreign and Commonwealth Secretary has said:
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"In arms control, as in politics generally, we must not allow the best to be the enemy of the good".
Without diluting these principles of balance and verification, we must apply them in ways which encourage, rather than inhibit, progress towards agreement. Balance does not have to mean matching man for man or weapon for weapon: that has never been NATO's defence policy either.
Equally, while perfect verification is an illusion, we will continue to insist on adequate verification. We need agreements which ensure that, if the other side does cheat or break the rules in a way that threatens Western security, we know this early enough to bring the offenders to book and to take appropriate remedies. Because of the open nature of Western societies, the East has less need of verification than we do. I hope that answers one of the points which was raised by the noble Lord, Lord Graham. Nevertheless, all Western proposals have envisaged the same verification regime for East and West. We do not ask the East for anything we would not accept ourselves. But some measures of arms control will demand particularly stringent verification if we are to create the necessary confidence that agreements are being observed.
Several noble Lords raised a number of particular points in the course of the debate. Many of them were in fact answered by the noble Lord, Lord Chalfont, but, if I may, I will just refer to the point that was raised by the noble Lords, Lord Molloy and Lord Brockway, on the suggestion of a nuclear freeze. A nuclear freeze would perpetuate some important imbalances between East and West in favour of the Soviet Union. It would also remove the incentive for the Russians to reach agreements on major reductions in nuclear armaments. Verification of a freeze would be more difficult to negotiate than reductions, which indeed are preferable.
The right reverend Prelate the Lord Bishop of Oxford raised the question of a nuclear weapon-free zone. We believe that a nuclear weapon-free zone in Europe would in fact undermine, and not increase, security. We would be in favour of the principle of nuclear weapon-free zones in areas where nuclear weapons are not yet a factor in the security balance, and provided of course that all the regional states in that part of the world would agree.
The noble Lord, Lord Brockway, suggested that we should commit ourselves to no-first-use of force. Commitments on this matter already exist in the United Nations Charter and in the Helsinki Final Act. No NATO weapons, nuclear or conventional, will ever be used except in response to attack. The priority is to give practical expression to existing commitments by agreement on concrete measures providing for greater openness about military activities in Europe. Real progress along these lines might create the conditions for an appropriate reaffirmation of the principle of non-use of force.
I will now briefly review the current position, and may I say at the beginning that I was very glad that the noble Lord, Lord Graham of Edmonton, acknowledged the work of my right honourable friend the Prime Minister. On 22nd December my right honourable friend the Prime Minister met President Reagan and Vice-President Bush at Camp David. This

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was a valuable opportunity—the first since President Reagan's re-election—for the Prime Minister to discuss at the highest level how arms control negotiations between the United States and the Soviet Union might now develop. They naturally touched upon the United States Strategic Defence Initiative (SDI) research programme in the course of discussions which were thorough and extensive.
Not surprisingly, they saw the prospects for the future in very much the same light. The Prime Minister was able to tell the President, as she had earlier made clear to Mr. Gorbachev, that we would not allow others to create divisions between ourselves and the United States on these important questions. During the discussions the Prime Minister and the President agreed on four specific points: first, the United States' and Western, aim is not to achieve superiority, but to maintain balance, taking account of Soviet developments; secondly, SDI-related deployment would, in view of treaty obligations, have to be a matter for negotiation; thirdly, the overall aim is to enhance, not to undermine, deterrence; and, fourthly, East-West negotiation should aim to achieve security with reduced levels of offensive systems on both sides. This will be the purpose of the resumed United States-Soviet negotiations on arms control, which we warmly welcome.
We have welcomed wholeheartedly the outcome of last week's meeting in Geneva between United States Secretary of State Shultz and Soviet Foreign Minister Gromyko. The United States and the Soviet Union will agree through diplomatic channels within one month on the date and venue of the forthcoming United States-Soviet negotiations on nuclear and space arms. They agreed that the subject of the negotiations would be a complex of questions concerning space and nuclear arms—both strategic and intermediate-range—with all these questions considered and resolved in their interrelationship.
The objective of the negotiations, which the British Government fully share, will be to work out effective agreements aimed at preventing an arms race in space and terminating it on earth, at limiting and reducing nuclear arms, and at strengthening strategic stability. The negotiations will be conducted by a delegation from each side, divided into three groups. The two sides believe that ultimately the forthcoming negotiations, just as efforts in general to limit and reduce arms, should lead to the complete elimination of nuclear arms everywhere.
The fact that negotiations will now re-open demonstrates that the firmness and political self-confidence of the Atlantic Alliance over the last four years has paid off. Pre-emptive concessions were not made to bring the Russians back to the negotiating table, and it would have been wrong and contrary to our interests to do this. The West has consistently stated its willingness to negotiate in good faith and without preconditions. I am glad that the Soviet side has responded.
Nonetheless, we all know that Geneva was only the first step on a long and difficult road. That was a point that was made very well, if I may say so, by the noble Lord, Lord Chalfont, and I think it was agreed and
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accepted by the noble Lord, Lord Graham of Edmonton. Patience and realism will be required. The key to success will be to find the right blend of imagination, commonsense and respect for the legitimate security interests of both East and West.
The Government have already been closely involved in consultations about these talks with our American allies, both bilaterally and through NATO. On 9th January my right honourable friend the Prime Minister assured President Reagan's national security adviser of Britain's continued support for the United States in the negotiations, and looked forward to maintaining the closest contacts during them. We will follow the negotiations with great attention and ensure that the Americans know of our views. That was a point, I think, on which the noble Lord, Lord Graham, wanted assurance. This is the way in which we can maximise our influence in this vital field. It has taken a long time to get even this far, and making progress on such complex matters is bound to be a long haul. Plenty of persistence and perseverence will be required.
Pending progress in the United States-Soviet negotiations on nuclear arms in accordance with the agreement reached in Geneva last week, the Government believe that NATO's INF deployment programme should proceed as planned. To do otherwise would be to make unilateral concessions outside the negotiating framework. The alliance has repeatedly made clear its readiness to halt, reverse, or modify these deployments in accordance with the terms of a balanced and verifiable agreement.
In view of recent suggestions that Britain's nuclear deterrent should be included in the negotiations, it may be helpful if I remind noble Lords of the Government's view. It would be absurd, as things stand, for us to seek to trade reductions with a superpower. But, as the Foreign and Commonwealth Secretary told the United Nations in September 1983, we have never said "never". My right honourable and learned friend continued on that occasion (and I quote):
"On the contrary, we have made it clear that, if Soviet and United States strategic arsenals were to be very substantially reduced, and if no significant changes had occurred in Soviet defensive capabilities, Britain would want to review her position and to consider how best she could contribute to arms control in the light of the reduced threat".
This is clear and logical. It remains the Government's position. Nothing that has happened recently has given us any cause to believe that it requires amendment.
Despite the current focus on nuclear and outer space arms control, we should not lose sight of other opportunities for progress, nor forget that conventional war is horrifyingly destructive—a point which has been made by many noble Lords during the course of this debate. As events in the Gulf War have reminded us. chemical warfare is particularly odious. The Government are deeply concerned at the growing threat to ourselves and our allies which is posed by the Soviet capability in this field. The answer is a negotiated worldwide ban. There is no truth in last week's allegation that the Government are considering manufacturing chemical weapons. I hope that that answers the noble Lord, Lord Graham.

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As my right honourable friend the Prime Minister said in another place on 10th January, we abandoned our chemical weapon capability in the late 1950s; there has been no change in Government policy since then, nor is any change proposed. We shall continue to keep our defence policy under review. But at the same time we shall go on playing a leading part in the negotiations at the Geneva Conference on Disarmament, and shall follow up our previous initiatives in this forum. Acceptance of the need for comprehensive on-site inspection presents a difficult new challenge. But that is what arms control is now about. Although complex, the problem of chemical weapons is not insoluble. Indeed, it offers a unique opportunity to advance the cause of arms control and disarmament by reaching agreement on a treaty which will deter the covert production of such weapons.
My noble friend Lord Renton referred to the Mutual and Balanced Force Reductions talks which began in Vienna in 1973, with the aim of trying to reduce the level of Warsaw Pact and NATO forces in Central Europe—the greatest concentration of conventional forces in the world—to a common agreed goal of 900,000 ground and air forces on each side. I am glad to tell him that some progress has been made. But agreement has been bedevilled by the East's refusal to acknowledge their superiority in manpower. A force reductions agreement without reliable figures is clearly a nonsense.
Last April Britain and the other Western participants tabled a major new initiative, which offers a real opportunity to resolve the dispute over the size of the Eastern forces in the reductions area. The initiative offered flexibility on the initial data requirement in return for enhanced measures of verification. It built on various aspects of the Eastern position, particularly on the form and timing of reductions. So far the Eastern reaction has been disappointingly negative; we hope the East will take a more positive attitude this year. For our part, we will continue to try and find a way out of the current impasse.
Despite the popular title Conference on Disarmament in Europe, the Stockholm Conference is not at present about reductions in arms, but about confidence and security building measures. It is part of the broader CSCE process stemming from the Helsinki Final Act, something to which the right reverend Prelate the Bishop of Oxford referred, which is 10 years old this year. At the start of the Stockholm Conference the United Kingdom and our allies took the initiative, tabling a set of concrete measures designed to reduce the likelihood of an outbreak of hostilities in Europe, through greater openness about normal peacetime military behaviour. This would make the preparation of a surprise attack difficult if not impossible, and thus diminish the likelihood of an outbreak of hostilities in Europe by accident, design or misunderstanding.
The Soviet Union has called this spying. But we are prepared to offer them the same opportunity to observe Western military activities. We remain convinced that confidence and security must be based on such concrete manifestations of goodwill, and not merely on further declarations of good intent. Ours are practical proposals which, if implemented, could have
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a major and beneficial effect on confidence and security in Europe.
Every autumn the First Committee of the United Nations General Assembly deliberates on disarmament and international security questions. The First Committee is not a negotiating forum, but it provides an annual opportunity to involve all member states of the United Nations in discussion of these key topics. The United Nations recognises that all states must participate in the search for effective world disarmament. Virtually all states have armed forces and armaments, and some 90 per cent. of world military expenditure is spent on non-nuclear forces.
But in such a forum there is an obvious temptation to play to the gallery. As in previous years, last autumn's session considered a record number of resolutions. Some of these were polemical and ideological. For our part, as my honourable friend the Minister of State at the Foreign and Commonwealth Office made clear in the First Committee last November, Her Majesty's Government continue to take the work of the committee seriously. I am afraid that I cannot accept the view which the noble Lord, Lord Brockway, expressed when he commented on these debates.
We consider with great care the texts of every resolution tabled. We support all resolutions which in our view will make a real contribution to furthering progress on balanced and verifiable arms control. Last autumn we voted for or joined consensus on 35 resolutions. We played a major role in helping to co-ordinate and promote positive, balanced resolutions covering subjects of key importance including bilateral nuclear arms negotiations, outer space, and the prevention of nuclear war. We shall play a similar constructive role at the 1985 session.
Finally, I should mention the Third Review Conference of the Non-Proliferation Treaty, which is to be held in September in Geneva. The Government are preparing for it, in co-operation with many others among the more than 120 parties. We will work with determination for its success. Twenty years ago, there were fears that by the early 1980s there would be at least 20 countries in possession of nuclear weapons. In fact, since the treaty came into force in 1970, those forecasts have proved wrong, although there is no room for complacency.
The Non-Proliferation Treaty makes a major positive contribution to international security. It represents a security gain for all nations, whether or not they are parties; but clearly, the more parties the greater the gain. The treaty also helps the development of international trade in nuclear materials, equipment and technology for peaceful purposes, by ensuring that such trade may take place with the minimum risk of proliferation. In short, the Non-Proliferation Treaty is worth a great deal. It would be folly to jeopardise the treaty by tying its future to progress on particular measures of disarmament and by ignoring at the same time the Non-Proliferation Treaty's intrinsic value.
This review of the position in the various arms control and disarmament negotiations shows that Her Majesty's Government have been active in taking the initiative in bringing forward new proposals. May I say that I welcomed the note of encouragement that the

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right reverend Prelate the Bishop of Oxford gave to the Government. There is now no shortage of such proposals. In the course of 1984, with our allies or individually, we tabled new proposals in every current negotiating forum. My right honourable and learned friend the Foreign and Commonwealth Secretary attended the opening of the Stockholm Conference, where the NATO countries soon took the initiative. At Geneva in February my honourable friend Mr. Richard Luce presented a new British proposal for challenge inspection under a chemical weapons ban, which was followed by another British verification proposal in July. At the Vienna talks, which he had visited a few months before, the Western participants tabled a major new initiative in April. My honourable friend completed his year of visits to every disarmament forum at which Britain is represented with his address in November to the First Committee of the United Nations General Assembly in New York.
We will continue to take the initiative in bringing forward new proposals. We are closely involved in consultations with our American allies about the new negotiations on space and nuclear arms control. We will not be participants in these negotiations, but we are taking every opportunity to share our views with our American allies. What we want to see now is a constructive and positive attitude from the Soviet Union and the Warsaw Pact. We will maintain our guard, but we will always be ready to talk about ways of making this world safer.
Lord Molloy: My Lords. I wish to make one or two brief remarks about the speech of the noble Lord, Lord Chalfont, but first I wish to congratulate him. Whereas I am given, I admit, to changing my stances on developments in world politics, the noble Lord, Lord Chalfont, has been for years, particularly, on this subject, absolutely consistent.
Consistency, as we all know, is the last refuge of the unimaginative. I have on a number of occasions in this House emphasised how vital it is that we have on-site verification. Indeed, I have said that I would be happy if there were Russians on our television screens being shown coming here to make their inspections, and our top flight technologists and scientists going to all their sites. Added to that is what I had to say earlier this afternoon.
I firmly believe that there must be some way between the British people, the American people and the Russian people. There must still be something left of the great alliance in which I participated between 1939 and 1945, when the Russian nation lost 20 million of her people. I am afraid that the tragedy at the moment is that all of us are lying in the gutter of despair. I would say to the noble Lord, Lord Chalfont, and to paraphrase Oscar Wilde, that some of us are looking at the stars.
I wish to thank the noble Baroness, Lady Young, for the research that has obviously gone into her speech, for which I am grateful. I thank my noble friend Lord Graham, and all noble Lords who have spoken and listened. I beg leave to withdraw the Motion.
Motion for Papers, by leave, withdrawn.

National Heritage (Scotland) Bill
Brought from the Commons; read a first time, and to be printed.

United Kingdom-United States Relationship
5.11 p.m.
Lord Jenkins of Putney Lord Jenkins of Putney rose to call attention to the relationship of Her Majesty's Government to the Government of the United States of America; and to move for Papers.
The noble Lord said: My Lords, this Motion calls attention to inter-governmental relationships, not to the relationship between our two countries, and still less to the relationships between our two peoples. In a way, it is perhaps a postcript to the previous debate, I regret that I was not present for the whole of that debate, but I was able to listen to the winding-up speeches from both sides, when I was struck by the detailed way in which the problem was attacked.
In this debate I wish to refer to one particular aspect of our relationship. This relationship is less satisfactory than that between our two peoples, which seems to me to be admirable. The relationship between our two Governments is too near those of occupying power and satellite, and it is to that relationship that I wish to draw attention.
It must be said for the Prime Minister and her Government that the position of an ex-colonial empire such as our own, reduced, as we are now, to something approaching the status of Dr. Frankenstein in the face of a monstrous super-power, is not an easy one. Nevertheless, previous Prime Ministers have faced that situation with dignity. One thinks of Mr. Attlee, as he then was. He did not feel that a reduction in our military status entailed any forfeiture of the right to criticise, to advise and to influence. Mr. Heath was equally uncowed.
But consider what has happened under the present Government. The Queen's territory of Grenada was invaded by our great ally. There was no formal protest. The Government said (and I quote):
"no such action was called for".
They said that the invasion was,
"a matter of regret".
The Government said that they were "irritated". The Prime Minister said that the Americans should not
"use force to walk into other people's countries".
The United States would not have dreamt of taking such action before the present Government came into office. Can one imagine such a thing happening to a Britain led by Churchill, by Attlee, by Macmillan (as the noble Earl, Lord Stockton, then was), or even by Mr. Heath? Can one imagine what Churchill would have said if such a thing had happened?
This Government complained of a lack of consultation: no invasion without consultation was the extent of their protest. Even today such action would not have been taken by the United States against French territory, Dutch territory or Portuguese territory—one hopes, not even against Nicaragua. So our special relationship has it seems degenerated into a right to be treated with special ignominy. What did

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our Government do in return for that American action? They gave the right to American soldiers to shoot British citizens in our country. The present Government's stance seems to be that President Reagan can do no wrong. It was not always so.
We have now learned, because of the declassification of Cabinet papers under the 30-year rule, that the then Marquess of Salisbury, who was Lord President of the Council in Sir Winston Churchill's Government in 1954, said in Cabinet that the Americans were a greater threat to the peace of the world than were the Russians. So they are today, my Lords; so they are today. Lord Salisbury was supported in his view by Sir Anthony Eden, then Foreign Secretary, who refused point-blank an American request for joint Anglo-American intervention in Vietnam on the side of the French.
The Earl of Longford: My Lords, if I may interrupt the noble Lord, is he really saying that Sir Anthony Eden, later Lord Avon, commented that the Americans were a greater threat to the peace of the world than were the Russians? If so, what is his source of that quotation?
Lord Jenkins of Putney: My Lords, I was saying that Sir Anthony Eden followed up the debate in which Lord Salisbury made that statement with a refusal to meet an American request for joint Anglo-American intervention in Vietnam. I did not state that Sir Anthony Eden made the comment which was made by Lord Salisbury. I believe that my noble friend is taking the two statements together. One is one, and one is the other.
The Earl of Longford: They were made together, my Lords.
Lord Jenkins of Putney: My Lords, certainly they were made together, but they succeed each other; they are not simultaneous.
In those days it was possible to argue that the West was an association of free nations combining in mutual defence. The French recognised at that time that it would be impossible to sustain that concept if American forces were stationed on their soil. They saw that the relationship would degenerate. They saw that, instead of an association of equals, NATO would tend to become a group of satellites circling round a super-power. It was inevitable that it should be so, for the Soviet Union is a European power and until recently all its land-based nuclear weapons were located within the Soviet Union.
So if the lunatic concept was to be pursued of matching not merely total nuclear fire power but each particular type of nuclear weapon, the only way for the West's super-power to match its counterpart in the East in respect of land-based missiles was to locate those missiles in their territory. And if the subject-status of Western Germany was not to be rubbed in, then some of those missiles had to be located in the minor powers—especially in Britain, whose Government's finger is always at the forelock in NATO matters.
My wife and I marched years ago in an anti-nuclear demonstration—in fact, more than one of them—in
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Federal Germany. We did so because it was already becoming clear that the Americans perceived Europe as a whole as the potential nuclear battleground of the future—a battleground which included the main parts of the territory of their major opponent but included no American soil, with the United States thousands of miles away from the scene of any possible nuclear disaster. That is why in some respects this country's relationship to the United States is more dangerous for us than is the relationship of the Eastern European states to the Soviet Union. They know that they are all in it together.
Lord Harris of Greenwich: My Lords, may I ask the noble Lord one question on the interesting point that he has just made? How can he possibly say what he has said in the light of the use of Soviet military power in the streets of East Berlin, in Czechoslovakia and in Hungary? How can he seriously maintain such an argument?
Lord Jenkins of Putney: My Lords, I did not say anything about the size of conventional power nor the location of Soviet conventional forces. I said that until recently—it may no longer be the case now—all Soviet nuclear power was contained within the Soviet Union. That was the case and has been the case until very recently.
I was going on to say that there are important, powerful figures in the United States who sustain the illusion, and they see it, that a European holocaust would not engulf America. So to that extent the United States is less frightened, more nuclear trigger-happy than is the Soviet Union.
Those of us who have visited both countries and who have met people in the peace movements on both sides, and people in or near government on both sides, know this to be the case. The culture of the Soviet Union is peace-orientated in its official manifestations to an extraordinary degree. The United States has no such obsession. Indeed, the old individualist ideas of the lone man with his gun survive to an extraordinary degree. These make themselves felt in the violence of the American screen, the high murder rates in American cities, in the widespread American mania for gun-toting and, finally, for nuclear weapons.
We must all welcome the Geneva discussions but, as I gather has been said during the debate, we should do well to remind ourselves that previous discussions led to very little and that while they were going on the nuclear weapons piled up on all sides.
Meanwhile, the present relationship of this Government to that of the United States has all the disadvantages of a semi-colonial status in reverse, with none of the advantages. The President of the United States can decide to launch missiles from this country through the means of his own servicemen on our soil and through his own means of communication, from which we are excluded. The launching of these missiles would bring about the destruction of our entire nation by Soviet retaliation and yet we have no say in the matter. That is a colonial status. The Prime Minister of such a country is not master or mistress in her own house. The relationship is sadly near that of a satrap. The idea of having our own nuclear system was sold to us on the promise that it would assure us a seat at the

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conference table. It has done no such thing. We have no more position at Geneva than has Japan, Cuba or Finland, and perhaps less than Switzerland, on whose soil the negotiations take place. As for the consideration given by the United States to our financial problems, perhaps enough was said about that by Mr. Heath yesterday in another place.
We exist in the worst possible of all worlds; having no say whatever in the choice of a government which is taking all the vital decisions which affect the lives of every one of us. It is an intolerable situation from which we must break free: but how can we do so? There are only two possible ways. Either we must opt out or we must apply to join the club. We must either tell the Americans to take their troops and their missiles out of our country or we must seek a way, and a say, in determining the decisions of the American Government—and not only the decisions of that Government but its nature. We can only do that by seeking to become the 51st State of the Union. That will seem to be an outrageous suggestion but we are no farther from Washington than is Hawaii or Alaska. In return we could seek to admit the United States of America and Britain to the Commonwealth of Nations.
The benefits would be considerable, and not only to us. We are a voting people and we would introduce a much-needed socialist element into the American scene. We would greatly strengthen the growing American peace movement. We would be rid of the pound sterling and its problems and we could withdraw from the Common Market—an action which would greatly benefit both ourselves and the Market. There would be some resistance to the idea in the United States. Not all Americans would see the benefit of one of the States having a Royal Family, let alone a House of Lords. On the other hand, others might want to adopt the institutions on a federal level. We should, of course, have to rid ourselves of the hereditary principle.
The present American Government would resist on the understandable ground that there might never be another Republican Administration in the United States, but that would be regarded as a blessing elsewhere. However, these things do not happen quickly and by the time the proposal had moved from the stage of an idea in the mind of a Back-Bench Peer into practical politics there might well be a Democratic President who would see the benefits of a change which might keep his party in power for a generation.
Of course, it may be that we shall have to move in the opposite direction and instead establish a more independent relationship with the United States. One thing is sure: we cannot stay in our present position, for if we do we are in danger of us all being dead before children now born leave school. We cannot leave it to the two super-powers to reach agreement while we in Europe represent, as we do, the first victims of their nuclear arsenals if they fail to reach agreement or, having agreed, fail to honour the agreement. On past form both things are likely to happen on both sides.
I have suggested that we must either detach ourselves from the United States or fully integrate
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ourselves into its decision-making processes—processess which are obscure, even Byzantine. Such well-placed and objective observers as the Medvedev Brothers have suggested that the monolithic nature of Soviet decision-making can be an advantage. When one is dealing with civilisation-eliminating weaponry it is desirable to know what is going to happen next. The United States has a complex power distribution moving from the Defense Department to the State Department and back, from the industrial to the political and the military complexes. The President sometimes seems to be more of a shuttlecock than a decision-maker. It is clear that Mr. Gromyko is a more certain deliverer than Mr. Shultz can ever hope to be.
Finally, it may be more satisfactory to propose to President Reagan that the United States should join the Commonwealth than either of the two suggestions I have made. But whichever solution we go for we must move towards a control system—one in which nuclear weapons cannot be fired without the collective assent of the representatives of all those millions whose lives would be terminated if restraint fails. The present situation in which the fate of the world is left to the fallible men in charge in the Kremlin and in the Pentagon is grossly irresponsible. Ideally, the power to fire a nuclear weapon should be reserved for unanimous decison by the United Nations—which means that there would never be a nuclear war. Until we begin to move in that direction we must regard the relations now existing between the United States and ourselves as an example of the need for urgent change if mankind is to survive. I beg to move for Papers.
5.29 p.m.
Lord Mayhew: My Lords, we are all grateful to the noble Lord, Lord Jenkins, for the extremely stimulating and original debate that he has introduced. As I understand it, we are faced with the fearful prospect of becoming annihilated before our children have left school unless we take one of three courses. The first is to become a member of the United States, as the 52nd state. The second is for the United States to join the Commonwealth. The third I forget temporarily but it will come to me in the course of my speech. What I wish to draw the attention of the House to is that the noble Lord overlooked the obvious solution to our problems, which is to become one of the federated states of the USSR. From here we could surely influence the Kremlin a great deal more effectively than speaking in this noble Chamber, for all the influence that we have as it is.
There is a further point that worries me about the speech of the noble Lord. I have heard him speak often in this House with great interest. Always he has supported Britain's membership of NATO. Today he has plainly changed his mind. He is no longer believing in Britain remaining a member of NATO. The basic difference, I think, between my noble friends and myself on the one hand and the noble Lord is that, though we, too, have reservations and criticisms of United States foreign and defence policy, we believe that it is of overriding interest for the United Kingdom to remain a loyal and effective member of the Atlantic Alliance. That is the point.
Lord Jenkins of Putney: My Lords, may I disillusion the noble Lord on that point? My proposal does not imply any suggestion that we should immediately secede from NATO at all.
Lord Mayhew: My Lords, it was a strange kind of NATO speech! I have heard a lot of NATO speeches in a long career in this field. I have to say with great regret to the noble Lord that the content and tone of his language was not that of any ally of the United States. One could listen carefully without detecting any sense of obligation, loyalty or affection for the major participant in the NATO Alliance—the United States.
I say again that we on these Benches are critical of many aspects of United States policy. The list of examples is quite formidable. If I may mention one or two, we have doubted both the skill and the degree of commitment of the United States Administration in arms control and disarmament. We dislike very much the one-way nature of the arms trade across the Atlantic. We oppose its ruthless attempts to destabilise Nicaragua. In the Middle East, as supporters of the Venice Declaration, we deplore the unconditional nature of the huge aid from the United States to Israel which enables her to oppose the Venice Declaration, and indeed all other international peace-keeping initiatives. In general, I think that I speak for my noble friends when I say that we are worried that its perception of the Soviet threat is simplistic.
I am reminded here of the speech that we heard in the previous debate (I hope that I am in order in referring to it) of the noble Lord, Lord Chalfont. In his interesting and pertinent speech, his concept of the Soviet threat had some of the failings that my noble friends and I see in the concept of the Soviet threat in the United States—namely, it is too simplistic. The noble Lord said (and I checked with him) that the Russians are our enemies and do not behave otherwise; we cannot co-exist with them. That is a common attitude in the United States.
Lord Chalfont: My Lords, before the noble Lord goes on, may I set the record straight? I said that the Soviet Union was a potential enemy and not an enemy. We are not at war with it. Secondly, I think that the expression I used was that our two systems are irreconcilable. My views on co-existence with the Soviet Union may or may not be of interest; but to set the record straight, what I said was that totalitarian Communism is irreconcilable with liberal democracy.
Lord Mayhew: My Lords, I am sorry if I misquoted the noble Lord, especially after I went to the trouble of consulting him about his words. But let us take it then that we agree that the two systems are irreconcilable. Of course that is a different matter. I would though very strongly urge on the House that to say that we cannot co-exist with the Soviet Union is a dangerous and unconstructive point of view. It is in fact classical Marxism. It is Marxism itself which says that the world is divided into two opposite social systems, and that these social systems are inevitably destined to conflict and one will supersede the other.
There is the mirror image of the Marxists in the United States who say that the other ideology is one
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with which they cannot co-exist: it is evil, it is their enemy and they cannot co-exist with it. Apart from anything else, that lacks historical perspective. It is quite absurd to equate the Soviet Union of Chernenko with that of Stalin. In terms of human rights the Soviet Union is still a tyranny, but compared with the Stalinist era it has changed. It is still to some extent isolated in international affairs; but compared with the Stalinist era it has changed. When one puts these things into historical perspective, one sees the possibility of peaceful co-existence, and that I believe to be a major feature of a constructive policy.
However, having said that my noble friends and I disagree with a great deal of United States foreign and defence policy, we are primarily interested in the overriding duty that we have to maintain the Alliance and an effective NATO. The question for us is: how can the disagreements between the British Government and the United States best be handled and diminished? The first thing that I think we would say is that we have to recognise that our worries are not unique. Almost without exception they are shared by the other European members of the NATO Alliance. The problem is not Anglo-American. It is a problem between the United States on the one hand and her European allies in NATO on the other. The balance of power between those two groups is not satisfactory and needs to be changed.
The United States undoubtedly has a disproportionate influence on strategy, in arms control and disarmament, and on questions of East-West relations. That balance was acceptable and realistic after the war when Europe was so weak and when the United States was far more dominant economically, politically and militarily than she is now; and—I must say this—when she was better led than she is now and when her world leadership was more widely respected than it is now. Now the balance must be changed. I think it is the unanimous view of my noble friends and myself that it should be changed, first, by increasing Europe's military contribution to the Alliance and making it a contribution that is respected in the United States; and, secondly, by increasing Europe's influence over decision-making. The two matters are of course interconnected and both are pretty difficult.
What it seems to us is needed is to ensure that European foreign and defence Ministers meet regularly, without the Americans, to consider and to concert their views on Europe's security needs within the NATO Alliance. They should discuss, for example, the consequences for Europe of the strategic defence initiative; the nature of the Soviet threat in Europe; the balance between detente and deterrence and between nuclear and conventional defence; Europe's interest in arms control and disarmament; and arms procurement. They should produce their own intelligence analyses without too much reliance on American sources. It is tempting to suggest a new European institution for this, but it may well be wiser simply to upgrade existing institutions such as the WEU, the European Political Consultation, Eurogroup and the European Programme Group and share the work between them.
In conclusion, I feel that we would all agree that if it can be done safely, of course we would be happy to see the American forces returning home across the

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Atlantic, and they themselves would be only too happy to do so if it could be done safely. But they are there because in 1945 and subsequently the Soviet Union kept their armies in position and subjugated Eastern Europe. That is why the American troops are needed in Europe; that is why they are here today.
It is true that in the 1950s the Russians offered to take their forces home if the Americans did the same. We sometimes forget this and sometimes I think it is worth looking at this idea again. However, meanwhile we have no alternative but to remain loyal allies, welcoming the American presence and reforming NATO by methods which are legitimate and acceptable between allies.
5.41 p.m.
Lord Beloff: My Lords, the subject which the noble Lord, Lord Jenkins of Putney, has proposed for our debate this afternoon is an important and serious one. Relations between the Government of the United Kingdom and the Government of the United States, which have had a varied interest since the United States cut loose from us some 200 years ago, are always worth looking at. Indeed, we are fortunate that two noble Lords who have held the important post of Her Majesty's Ambassador in Washington are to take part.
However, I cannot say that the noble Lord, Lord Jenkins' speech, lived up to the importance or interest of this subject. He did not to any significant degree discuss the relations between the two governments: the way in which one might need to influence the other, or be able to influence the other, or wish to influence the other. Instead, we were treated to the fantasy, which has so often marked the noble Lord's speeches in your Lordships' House, that in some sense this country is a satellite, a colonial territory, of the United States of America because, of its own free will, it has decided that the common interest is best served, for the time being, by the presence of American armed forces on its soil. That is a decision freely arrived at. It is a decision which a future Government could, if they wished, remove—and the latest remarks of Mr. Denis Healey suggest that even a Labour Government might not wish to do this very soon.
I feel one can only explain this extravagant outburst by dwelling on the fact that, as so often, the noble Lord, Lord Jenkins of Putney, who talked about his acquaintance with leaders on both sides of the Atlantic, was reflecting a Soviet point of view and Soviet policy. I would agree with the noble Lord, Lord Mayhew, that Soviet policy has changed and may change in the future. But what can he said about Soviet policy is that one element of consistency ever since the end of the second world war has been an attempt to divide European members of what became the North Atlantic Alliance from their friends in the United States, either through diplomatic activity or, as in this case, through appealing to or trying to raise popular prejudice.
After all, it is slightly absurd to talk about the peace-oriented culture of the Russians as compared with the warlike United States when on every anniversary of the Revolution we can see on our own television
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martial parades in Red Square to which there is nothing comparable either in the United States or in Europe. There may be Latin American countries which go in for this kind of activity but Russia is the only major power in the world which still regards the public display of military strength as important in presenting its own conception of itself. To compare this with the gun-toting habits of people in Dallas seems to me to be asking your Lordships to swallow rather too much.
I would venture the point that it is very important for us, for reasons many of which have already been referred to by the noble Lord, Lord Mayhew, to keep in very close touch with the United States on a whole range of issues. The nuclear issue is only one. At the moment, from the point of view of Her Majesty's Government, there may be economic issues where agreement is even more urgent. It is important to do this. The question is: how best can we do it?
It is true, as the noble Lord, Lord Jenkins, said, that a more independent position could, in some respects, be taken by Her Majesty's Government—His Majesty's Government, as it was then, many years ago. But the differences in scale and power, in military preparedness and in economic strength, have grown over that period. We cannot now think of ourselves, and do no longer think of ourselves, as sitting at the top table, as the centre of a Commonwealth which was the Empire under a new name. We are a moderately-sized power which has a specific series of interests, some of them overlapping with those of the United States (the Middle East, for instance), some of them much less (in parts of the world like the Pacific basin, to which the United States now attaches very great importance).
Having studied this from an academic point of view, if you like, over a very long period of time—over 40 years—what strikes me, looking back, is that on the whole the Americans listen to us more than one might have expected. Despite everything, despite these differences, despite the fact that "special relationship" is now only referred to in quotes, it is nevertheless true that the United States, for a number of reasons—and no doubt the noble Lords who are former Ambassadors can enlighten us on this—are prepared to enter into a dialogue with us on the most vital national interests of their own in a way I do not think they do even with countries to which they attach the greatest importance: Japan or the Federal Republic of Germany.
Being able to talk to the United States in a frank and friendly fashion, as the Prime Minister clearly has managed to do with President Reagan, must be an asset. But, to be able to do this, one has to bear in mind certain conditions. I would think that one of them is that. though we may differ from the United States and criticise the United States, it must be done in such a way as to make it clear that it is done within the framework, as the noble Lord, Lord Mayhew said, of an unshakeable alliance.
I think it is important that this is not only what the Government of the day do but it also places some burden, if you like, upon the ways of speech of people in public life who are not members or supporters of the present Government, such as, for instance, the Leader of Her Majesty's Opposition. I think that it is

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weakening for this country, whoever is right about Nicaragua (and different views are possible) for the Leader of the Opposition to make speeches outside this country indicating that he criticises Her Majesty's Government at home—which he is perfectly entitled to do—and indicating that he is wholeheartedly opposed to United States policy in that region. If—and I regard it as a big "if"—Mr. Kinnock were one day to be Prime Minister, he would himself have to establish the kind of intimate relations with whatever American administration might then be in power. A record of criticising the United States on its actions in an area with which he can claim only the most limited and passing acquaintance is perhaps not a great commendation.
It is therefore necessary to be even more wary of using the kind of exaggerated language with which the noble Lord, Lord Jenkins of Putney, opened our debate. It is, after all, I should have thought, likely to be counter-productive. The organisation to which the noble Lord frequently proclaims his adherence, as he did again this afternoon—the Campaign for Nuclear Disarmament—has attempted, by demonstrations and by propaganda in a variety of ways, to prevent the implementation of an agreed military and disarmament strategy by the NATO Alliance. That having failed, what one must see now as the current thrust of Soviet diplomacy is in other ways to create suspicion—to talk about giving American soldiers free rein to shoot down British civilians and things of that kind.
We are not in the position of a satellite. We are not in the position, as the noble Lord, Lord Mayhew pointed out, which has been the position of Czechoslovakia and Hungary and which is, although the force is still in reserve, the position of the unfortunate inhabitants of Poland. We are not in the position of a satellite which is trying to get away. I do not think that if we were to break our relations with the United States we should, like the villagers of Afghanistan, be suffering under a hail of bullets from helicopters. We are not in that kind of position. The issues between the United States and Britain are serious and will be serious. And it would be your Lordships' pleasure today, I should have thought, to ignore that aspect of things and to look at what can be done to improve the intimacy of those relations.
5.52 p.m.
Lord Caccia: My Lords, like the two previous speakers, I had thought that this would be an occasion for what might be called a serious review of our relations with the United States. At least one possibility advanced by the noble Lord, Lord Jenkins, he has himself, I think, already destroyed. That is to make us an alluring partner as the 51st state of the union. So that, at least, can be put aside.
To go on to the more serious questions at issue, the noble Lord raised the subject of Grenada and Nicaragua and the situation on the southern border of the United States. We should do well to remind ourselves, first, that this is an area of special interest to the United States; and, secondly, that when it came to an area in Latin America or near Latin America that was of prime importance to us—namely the Falkland Islands—we had great support from the Americans at
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vital points. It would have indeed been difficult, I imagine, to conduct our military operation as successfully as we did without that understanding and support despite the fact that the Americans thereby got into serious trouble in their relations with other Latin American countries. This does not mean—I do not intend it to mean—that we should refrain from any comment or criticism about what the Americans may do over Grenada or Nicaragua or over the situation in Central America. It does suggest, however, that the tone of voice in which we offer our criticisms and our suggestions should be much more those proposed by the noble Lord, Lord Beloff, than those put forward by the noble Lord, Lord Jenkins.
The noble Lord then turned to the American preponderance in NATO and its rights, as he claimed—although I hope that this will be challenged by the noble Baroness who is to answer the debate—in this country to launch nuclear weapons without any consultation with or reference to Her Majesty's Government. If the situation in NATO was different, if really NATO had become a second pillar to a combined defence system—one pillar being the United States and an equal pillar being that of the European members of NATO—then perhaps we would be able to claim as of right a voice greater than we now can enjoy. But, for good or ill, although great sacrifices have been made by European countries, they have not, despite their economic success and financial advantage, so far agreed to build up a system that could be called an equal pillar. We should therefore also remind ourselves that if the Americans coined the phrase "no taxation without representation" there is a converse to it. That converse is "no full representation without taxation". It is a question rather whether NATO really has allowed itself too much latitude to claim such a position. The fact of the matter is that our safety depends on the United States umbrella and on the presence of United States forces in Europe. And, in Europe, I count the United Kingdom.
To continue from there, questions have also been raised about our financial and economic relations with the United States. Looked at from a European point of view—this is where I wish to join with the remarks of the noble Lord, Lord Mayhew—there is an advantage in looking at this not simply as a British-American issue. It is more widely a European-American issue. Indeed, so far as exchange rates are concerned, it is Japanese as well. Here, perhaps I should sound one word of caution. It is essential to bear in mind always that for the Americans, for any American administration, the prosperity and welfare of the United States is the prime consideration. What conduces to that in their opinion conduces to the better prosperity of the western world. What does not so contribute they will be liable to eschew, thinking that their interests in the longer term are also the interests of the West.
Of course there is something in this, The prosperity of the United States in the past two or three years has been of immense benefit to the western world. But it has brought with it complications for the European economies and the economy of Japan. Still, a balance has to be struck and perhaps, and with any luck, this year it may be possible to persuade the Americans that their interests coincide more closely with ours in that their expansion is showing some signs of weakening

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and that they may themselves therefore see an advantage in lowering interest rates and various other measures that would be, to put it mildly, convenient to other western powers.
I hesitate to continue in this vein. If there is one aspect that has to be continually borne in mind it is that if someone like myself, who has not been in any way personally involved or responsible for our relations with the United States for 20 years, starts to pontificate, it may be certain that he is out of date and that others, who are more up to the present situation, should take his place. I hope to be able to stay to the end of the debate. If, however, owing to a previous engagement, I cannot do so, I hope that the noble Baroness will forgive me. I shall learn what I should learn when I come to read what is written in Hansard.
6 p.m.
Lord Beaumont of Whitley: My Lords, I suspect that, in spite of what has been said so far, the country as a whole is fairly unanimous in its attitude to the United States. This attitude consists, on the one hand, of affection and admiration and, on the other, of that complex mixture of envy, resentment and even fear which is felt by a client state to its protector—a complex of emotions which we must be well aware of since we ourselves, as one of the great nations of the world in the past, must have been—or should have been—infinitely aware of how it was borne to us by our colonies and our client states. Such a relationship is a perfectly understandable one, but because it is complex I think it can often lead to the wrong estimation of what is happening and to actions which are guided often (or sometimes, anyway) more by emotion than by common sense, not always as well thought out as they should be.
Dearly as I should like to leap into the fray which has been started this afternoon, really I want to talk about a minor but not unimportant part of the subject which has not yet been mentioned. I do so the more readily since I was full of admiration and full of support for the remarks made by the noble Lord, Lord Mayhew, from my Front Bench. I entirely agreed with them and I thought that his affirmations and his reservations were most fairly put. What I should like to mention very briefly is the attitude that we and the United States have to a number of institutions, among them the World Bank and the International Monetary Fund.
I believe that the attitude or the present political masters of America to the World Bank is unfortunate to say the least. They combine a hard-nosed approach to economics with a general attitude, in dealing with smaller countries, that, "He who is not with me is against me". The effect of this is that they cultivate an attitude towards the World Bank and its cognate institutions which is remarkably suspicious and which, as a result, has impeded the efforts of the bank to expand and, indeed, is causing it to contract. I deplore this attitude because I believe it is not what the world economy as a whole needs, particularly at a time when the approach of the World Bank to the third world and its problems is much more constructive and much more intelligent than it has been in the past.
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Whether I or indeed your Lordships should deplore the attitude of the United States to these institutions is neither here nor there. Undoubtedly, the United States will continue to do what appears to it—possibly wrongly—to be right, and what appears to it—possibly rightly—to suit its book. However, it is a different matter if the United Kingdom follows suit; and this is where the subject I raise is at the heart of this particular debate. Here again I may differ from our present Government as to what is the right course of action for the bank to take for the benefit of the third world; and, again, my view might be one which they reject, in which case I have to live with it.
Where I think I can challenge them is in their largely unspoken assumption that if the US takes an economic view we should necessarily take the same one, because our basic economic positions are extremely different. Many of us get the impression that the Government's judgment on this is unduly swayed by the basic economic attitudes that the two Governments have in common; that because they are both monetarists and supply "siders" they should therefore agree. But it does not follow. The USA is a largely self-sufficient nation. Its economy does not rely very much on trade. Its share of world trade has been falling steadily for the past 10 years and it has not taken any serious steps to reverse this. It does not really matter to it.
Ours, for better or worse, does, and as we are a small, over-populated country, it will continue to do so. As a result, our self-interest should cause us to back all efforts to expand the world economy. I say "all efforts" because in dealing with the World Bank and the IMF I do not think that I have to add many riders. No one, or virtually no one, accuses the World Bank of profligacy. It is not subject to the same kind of criticism that UNESCO, for instance, rightly or wrongly, encounters. It is thought, even by its critics, to be economically basically sound. It is both right and in our own interest to see that these international financial institutions are not unduly hampered and that they are indeed helped to do their job. I think that the present American Administration is hampering them in this way and I urge our Government at least to appreciate the necessity for detaching ourselves and trying to do our best to see that the World Bank in fact is able to operate more efficiently.
I do not ask for a reply today from the Government on this particular subject. This is an aspect of today's debate that they had no reason to expect, and I have not given them warning that I was going to raise it. As a result, given even the encyclopaedic knowledge of the noble Baroness and the resources of the Civil Service Box, I would get only the standard response; and I know the standard response. What I do hope, though, is that the Foreign Office and the ODA, who I think have little emotional capital invested in the economic views which seem to motivate the Government, will take note that there are many more people than I think they believe who care about these matters and will redouble any efforts they may be making to change our approach in this field.
We are not making friends in the world by our present attitude, and that is a pity. If we are wrong in the beliefs that form this attitude, it is a double pity. If we are not making friends, and we are wrong, and we

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are cutting our own throats commercially, it is a treble pity; and I think that we should do something about it.
6.10 p.m.
Lord Sheffield: My Lords, like other noble Lords I am grateful to the noble Lord, Lord Jenkins of Putney, for raising this matter, but perhaps he will forgive me if I do not follow him in what I venture to call his more tongue in cheek flights of fancy. Like my noble friend Lord Caccia, I have no first-hand knowledge of the recent dealings and negotiations between the two governments, but as far as I can tell the relationship has been very well managed on our side in the last three or four years with one exception to which I shall return. Therefore, I do not propose to say much about current issues except perhaps that, far from being afraid that the Americans will get us involved in another war, my concern is rather that they might become disenchanted with their European allies and begin to weaken the links which at present guarantee the security of ourselves and our European friends. Therefore, if your Lordships can bear a few glimpses of the obvious, I shall briefly sketch part of the changed and changing background in the United States which inevitably shapes and conditions the relationship between our two Governments.
Many people have talked for many years about our special relationship with the United States. That is not an expression which I myself use. Certainly there is a special relationship between the United Kingdom and the United States. It is based on a common language, on the common law—particularly on the common law—on a common political heritage, on a common literary heritage and on a partnership in two world wars, particularly the Second World War. Those are ties of fundamental strength and importance.
But the United States has a special relationship with many other countries—for example, France. I remember once meeting my French colleague in Washington at the airport. He had just returned from a very special occasion in Franco-American relations: the anniversary of the British surrender at Yorktown. He said to me, "We had the same menu which was served to Lafayette after the British surrender". I asked, "What was that?" He said, rather crestfallen, "Well, mostly beans". I said, "Well, Henri, that served you right".
Take Japan. Two years ago I listened to a discourse by the American Ambassador in Tokyo, the distinguished former senator, Mike Mansfield. His theme was that the future prosperity, indeed the future centre of the world, lay in the Pacific basin, and the only relationship which was really important to the United States was their relationship with Japan.
China used to have a very special relationship with the United States due mainly to missionary involvement. That could now be revived. Take Latin America. It was easy to see the pull that this special relationship had for the United States during the Falklands affair.
There are other examples. However, I think that those are enough to say that the implication that there is a special—in the sense of exclusive—relationship between Britain and the United States is demonstrably inaccurate.
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On the ethnic front, the pattern has been changing significantly, if not dramatically, in the last two or three decades. It is now some 30 years since I called on the Automobile Workers of America in Detroit. A senior official was complaining then of the influx of immigrant and black workers into the area. "In a few years," he said sadly, "I shall be the last of the Monroneys". Since then Miami has become a Spanish city, and the whole of the border from Texas to California is becoming Spanish speaking, and similar ethnic changes are taking place in other areas.
Politically, the eastern establishment (the white, Anglo-Saxon Protestants) have, relative to other groups, lost influence. The centre of political power has been moving to California. The Irish and Jewish political influence has not diminished, while the influence of the blacks has increased. Nor is there all that amount of interest in things British. Not long ago I spent 10 days in San Francisco during which the only reference to Great Britain in the local press was an account of the collapse of a giraffe in the London Zoo. That made the front page.
Economically, in 1983 for the first time the volume of United States trade across the Pacific area overtook the volume of trade across the Atlantic. There is one area which has historically been a source of friction between the two governments and that is the area of trade and commercial policy and the attempts made by the United States Government, or rather its agencies, to extend their jurisdiction beyond the confines of the United States.
When I first went to Washington in 1931 the main controversy in that field was the assertion by the United States of the right of pursuit of bootlegging vessels on to the high seas. There have always been these issues. Recent examples have been the chicken war, exports to the eastern bloc, and the attempt to exercise jurisdiction over foreign airlines. I think it is one of the advantages of our membership of the European Communities that these are now dealt with on a European-American basis, which not only makes for a much stronger negotiating hand, but which also lessens the strain on the bilateral relations between the two Governments. Happily none of these issues over the years has been of fundamental importance, or had more than a transient effect upon our relationship.
All these factors are obvious and well-known. Taken together they have a significant bearing on this Motion. What it adds up to is that a close relationship is more important for the United Kingdom than it is for the United States. So the dialogues between our two countries must be carried on. I am sure that we, the British, are still listened to in Washington. We can, and I believe on occasions we do, have an influence out of proportion to our resources. Indeed, on that point I agree with what the noble Lord, Lord Beloff, said. But we cannot expect to call the tune, especially in matters affecting national security—in fact, we have never done so.
Reference was made to Mr. Attlee, as he then was. I accompanied Mr. Attlee when he went to Washington for discussions with President Truman on the rumours that the Americans might use the nuclear bomb in the Korean War. As many of your Lordships will remember, those rumours caused a good deal of

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agitation in Parliament and Mr. Attlee went to Washington to discuss the matter with President Truman. Of course, the Americans were not prepared to give any public assurance in these discussions. They could not do so for constitutional reasons. But Mr. Attlee and Mr. Truman had 15 minutes' private conversation and as a result of that conversation—and, of course, the Americans had no intention of using a nuclear weapon in Korea—Mr. Attlee felt able to come back and reassure the House of Commons. I am sure that the relationship between the present Prime Minister and President Reagan is as close and as intimate as that between Mr. Attlee and Mr. Truman and allows that sort of exchange to take place.
Reference has also been made to a remark by Lord Salisbury, or, as I think he was at the time, Viscount Cranborne. It so happens that I was Ambassador in Washington in 1954, the year in which this remark appears to have been made. I accompanied Viscount Cranborne to a great number of conversations in Washington at that time, and if he really thought what he is supposed to have said, all I can say is that he concealed it extremely well.
The dialogue with the United States Government, the cultivation of our relationship, and the effort to keep it in good repair need more understanding, sensitivity and skill than ever before, and this of course is particularly true at the highest levels. As I said earlier, I believe that it has been well exercised recently. It was certainly well exercised in the Falklands affair. But the subsequent Grenada episode was a severe setback. I hope that this fence is now repaired at Government level, but I fear that that is scarcely the case at the level of popular feeling. It is true enough that the Americans acted precipitately and without proper regard to our constitutional position and rights, though, because I do not have enough knowledge of the subject, I could not endorse what the noble Lord, Lord Jenkins, said about it. Nevertheless, it was a setback. In our dealings with the United States Government in the future we cannot afford any more Grenadas.
6.23 p.m.
The Earl of Longford: My Lords, my qualifications for taking part in this debate are small indeed compared with those of the noble Lord who has just addressed us, and, for that matter, compared with those of the noble Lord, Lord Caccia. My great-uncle led the last British troops to engage in battle against the Americans. It is true that his forces were defeated and that he was slain, but the Americans acted very generously and set up what are now called the Pakenham Oaks in New Orleans in memory of him—they seemed to be proud of their victim. That is a past connection, and the noble Lord, Lord Sherfield, who has generated such a gifted tribe of Anglo-Americans, will be pleased to hear that I have just heard that I have a second Anglo-American grandchild. That is small fry compared with his achievements, but it will give him pleasure.
I shall use up my few minutes stating what I would call the obvious, but what is obvious to me is really no more obvious than the remarks of the noble Lord,
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Lord Sherfield, which were extremely sophisticated. My remarks are banalities compared with the noble Lord's refinements. I entirely agree with what the noble Lords. Lord Mayhew, Lord Beloff and others, said, that since the war the whole defence and foreign policy of this country has rested on the alliance with the United States. Of course, I am very pleased that we are now members of the EEC; there are, of course, a good many other countries which are members of NATO; and the Commonwealth is a wonderful institution presided over with unique skill by Her Majesty the Queen. But when all is said and done, our survival has depended upon the Anglo-American alliance—as it seems to me, the ponsasinorum of the whole subject: the beginning of wisdom.
That alliance did not exist before the war. During the war there was a very intimate alliance. We did not have such an intimate alliance with the Russians during the war. In fact, that came into existence slightly before the alliance with the United States, because the Germans attacked the Russians a little sooner than the Japanese attacked the Americans. That was the wartime alliance. But what has been such a tremendous feat since the war has been the establishment of a peacetime alliance, which is something unique in the history of the United States and, to some extent, of this country.
We on these Benches can certainly take pride in the fact that that alliance was established by a Labour Government, of which the noble Lord, Lord Mayhew, and I were members. However, the noble Lord was rather closer to events at some of the moments in question than I was. At any rate, it was established by a Labour Government. Thererfore, I hope that no one will think that there is something rather remote from Labour policy in this alliance: that is not the case at all. The noble Lord, Lord Mayhew, does not use quite the same language as I do about all this now, but the fact is that he was a very ardent socialist for many years. In fact, if it comes to it, he was my pupil!
Lord Mayhew: My Lords, if the noble Earl will give way, I must reply that when I belonged to the Labour Party it was a loyal supporter of the NATO alliance.
The Earl of Longford: My Lords, it still is. My Leader will explain that later. At any rate, in so far as this country is concerned the Atlantic Alliance was created and established by the Labour Party, and supported by the other parties. This attitude towards America was not shared by everyone in all the parties. The Conservatives were sound on the NATO alliance, but they were not at all sound on the American loan. In the House of Commons Sir Winston Churchill had difficulty persuading his party not to vote against the American loan, but quite a few Members did vote against it. That is just one aspect of their activities at that time.
In this House (although it was not in this particular Chamber but in another part of this House) I can well remember Lord Salisbury doing his best to defend the American loan with Lord Beaverbrook, his old wartime colleague, sitting beside him. Lord Beaverbrook gave Lord Salisbury a very rough time. At one point Lord Salisbury, speaking about Lord Beaverbrook, said rather incautiously:

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"Of course, the noble Lord, Lord Beaverbrook, can afford to take a dispassionate view. He is well endowed with this world's goods".
Lord Beaverbrook then said in a Canadian accent, which I cannot imitate,
"I thought the House of Salisbury was pretty well off?"
That was the nature of the argument that was taking place in the Conservative Party at that time about the American loan.
In the House of Commons, it is true that a dear old friend of some of us, Mr. Dick Crossman, a young MP at that time, brought forward a resolution which was a vote of censure on the whole Anglo-American policy of the Government. He persuaded 58 Labour MPs to sign his Motion. In the end, it was defeated by 353 votes to none. However, 130 Labour MPs abstained out of a party strength of 352. So we must realise that throughout this period there have been times when groups in the Conservative or Labour Parties—if there had been an Alliance Party I have no doubt that it would have had its own problems—have opposed the policy being pursued by the Government of the day. However, throughout the whole of that time, which is nearly 40 years, whether the Conservative or the Labour Party has been in power the policy of the Anglo-American alliance has been firmly supported.
In my own case, this policy was supported by Lord Attlee—to whom the noble Lord, Lord Sherfield, referred in such an interesting way—by Mr. Harold Wilson and Mr. Callaghan as Prime Minister, and by Hugh Gaitskell when he was Leader of the Opposition. When he made his great speech, which some of us heard, in which he said, "Fight, fight and fight again", he denounced some of his opponents as neutralists, pacifists and communists. That is how he felt about the minority at that time. In a healthy democracy there are minorities on both sides. We went through all these periods; but those who have been in power, whether Labour or Conservative, have consistently supported this policy of the Anglo-American alliance. For my part, in all humility, what was good enough for Lord Attlee, Lord Wilson (as he now is), Mr. Callaghan and Mr. Gaitskell—and, I am sure, for our leader tonight—is good enough for me, so I have no qualms about that.
Of course, there will always he differences. In the days to which Lord Sherfield referred, the days of Mr. Attlee (as he then was) and Mr. Bevin, there was a great struggle with the Americans over Palestine. There was a deep division of opinion. There will always be these divisions of opinion. I will not cite any particular divisions tonight.
The noble Lord, Lord Gladwyn, wrote an important letter which appeared in The Times last Friday. I am not sure that I was quite clear about the implications of that letter. If I were clear, I might not agree with them.
Lord Gladwyn: My Lords, may I—
The Earl of Longford: My Lords, before the noble Lord had even heard what I had to say—
Lord Gladwyn: My Lords, I will elucidate a little on that letter in the remarks I shall make in five minutes' time.
The Earl of Longford: My Lords, I know the noble Lord is quick to rise to counter anything that might be said by way of criticism, but I thought he was rather faster than usual this evening to rise to his feet, even before I had made a criticism. I did not intend to criticise him. Perhaps that was what he was objecting to.
I was intending to quote favourably two sentences that appeared in the noble Lord's letter. If he wishes to correct this he will remind me of the late Lord Fisher, who never would allow any sentence to pass without correction. The sentences read:
"No doubt Europeans are in a weak position to insist that the SDI should be traded away in the forthcoming negotiations, if the Americans decline to do anything of the sort … So there seems to be no reason why the Europeans should not at least be allowed their say".
I agree with those two sentences.
I promised to stay within my time. I feel that what the noble Lord, Lord Gladwyn, has said provides in itself a good reason why this debate should have been brought forward. I am glad, as always, to listen to my noble friend Lord Jenkins. In a way, he is the Dick Crossman of today. I hope that remark will be understood as a compliment. There is just this difference, that I usually have a pretty good idea of what the noble Lord intends to say, although tonight he surprised me. I never had any idea of what Dick Crossman would say, because if he said something yesterday it was certain that he would say the opposite the next day. I think Lord Jenkins is far more consistent. However, I must give place to more qualified speakers.
6.35 p.m.
Lord Reay: My Lords, the freedom and prosperity of every man, woman and child in this country and in every other Western European country depends on the strength of the Western Alliance. In turn the strength of this alliance depends on a cohesion between its members, particularly on the cohesion between the United States and Europe.
Given the antagonism which has to exist—I shall return to this point in a minute—between Russia's repressive empire in the East and the Western liberal democracies, it follows that the Soviet Union will always be alert for opportunities to damage Western cohesion, as my noble friend Lord Beloff reminded us. We experienced a protracted attempt to do exactly that with the Soviet campaign to prevent the installation of cruise and Pershing missiles in Europe.
It also follows that it is our vital need and duty to strengthen this cohesion; the more so since the United States would survive the shattering of the alliance into its component parts, but it is much less plain that Europe would. Expecting, therefore, deliberate attempts to damage the alliance, what should we be considering doing ourselves which would, on the contrary, help to strengthen it?
The Soviet Union's campaign to cause disarray in the alliance over the installation of cruise and Pershing missiles was not entirely fruitless. The German defence consensus was broken. Holland has still not deployed. Belgium has just distressed the United States by using the resumption of the super-power talks as a reason for once again postponing

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deployment. Much political aggravation has been caused and the number of missiles kept very low in relation to what the Soviet counterpart has grown to. Many further opportunities for dividing the allies will present themselves in the course of the new talks. It may even be that the possibility of causing disarray in the alliance is more attractive to the Soviets than any likely arms treaty. After all, the strategic defence to which the Soviets object is a distant and speculative target and arms control talks have produced very little in the way of arms control in the last 15 years.
I said earlier that there was bound to be antagonism between the liberal democratic West and the Soviet empire. The fact is that Communist societies can only be held together by repression. As an ideology Communism can carry out a revolution. However, once the masses have had their revolution, Communism loses its raison d'etre. The ideology attracts lip service but not adherence. On top of that, the Soviet empire contains many different nationalities and even countries, which fact exacerbates the internal tensions and pressures.
Added to that, it is an expanding empire, as Afghanistan proves. Indeed it has to expand where it can, if only to help protect what it has. Let no one doubt for one second that the Soviet Union would take the opportunity to quench the liberties of Western Europe. Is it not plain what beacons of hope these Western freedoms are to the subject people of the East, whenever they can be glimpsed flickering through the curtain with which the Soviet leadership tries to veil them from their sight? Would it not be much more convenient if they could be made to disappear over the Atlantic horizon?
What constructive countervailing energies should Europe dedicate to try to preserve this alliance? It has been well argued recently in a reprinted essay by a third former ambassador to the United States, Peter Jay, entitled "Europe's Ostrich and America's Eagle", that Europe is in a transition stage where she resents being an American protectorate, but refuses the responsibilities of becoming a partner even in her own defence, let alone in a more global defence of her interests, as, for example, in the Gulf.
We should therefore do something to shed the image of being America's constant ringside critic, someone who wants America to do everything for us—reach an accommodation with Russia on our behalf, for example—but who waits to criticise whatever arrangement America makes. The noble Lord, Lord Caccia, may be right. It may be politically impossible for European countries to make the effort required for them to become treated as equal partners with the United States. Undoubtedly we fear what may be asked of us—and this applies to Germany and to Japan also, who are tempted to hide behind arguments based on the past to avoid present realities. We fear the effort, we fear the impossible cost, of entering into a proper partnership.
Meanwhile, there is a danger that we slide into unreality. We have in the past been dilatory on civil defence, although civil defence would add credibility to our nuclear deterrent by indicating to any potential aggressor a willingness to live with the consequence of the failure of deterrence. Ostrich-like, we place
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excessive hopes on arms control talks, despite all the evidence of the past. There are some who put their faith in nuclear-free zones and corridors. We allow an absurd situation to build up in Europe over chemical weapons because everyone concerned knows that the Soviets would make massive use of chemicals in any conventional attack, at least if they need not fear the use of chemicals against them. Yet NATO has no credible chemical deterrent so that we put our own fighting forces at a great disadvantage and. incidentally, lower the nuclear threshold.
But do we have to leave the United States to decide this question on its own? Why could not a European country for once take an initiative in a matter relating to Europe's defence? We react with alarm when President Reagan attaches himself more determinedly and more publicly to his Strategic Defence Initiative even though the doctrine that it would display, or partially display—mutual assured destruction—appears to be attracting greater public censure. A doctrine based partially on defensive rather than exclusively on offensive nuclear weapons might prove less unpalatable to the general public, albeit as a long-term goal. Certainly, the American public welcomes President Reagan's initiative. Rather than assume that President Reagan is wrong and since no one knows the outcome of future research, might it not be better if we proposed instead to put some of our own scientific resources into such research?
In order to avoid leaving—and I think that this is a point similar to that which the noble Lord, Lord Mayhew, made—the initiative to consultation, always on an ad hoc basis and usually with the United States, could we not propose regular meetings between Europeans and the United States, and perhaps Japan, at Foreign Minister and other ministerial levels? The point that I wish to make is that the alliance cannot be left to look after itself. To maintain it requires constant labour and attention. Incidentally, the goal of a strong and united Europe is not at all incompatible with the goal of a strong Atlantic alliance. On the contrary, it is a condition of it; provided always that it is an outward-looking and not a protectionist Europe that we help to build. That again is a policy for this country to pursue for the sake of the West as a whole.
Since 1941, the forces of isolationism in the United States have never been dominant. In 1941, the United States committed itself to the rescue of democracy in Europe from Nazi Germany and it has committed itself ever since to its defence against the threat of Soviet Russia. But woe betide the Europeans if its leaders allow its populations to feel that, come what may, the freedom of Western Europe is of such a vital interest to the United States that we need do nothing more ourselves to defend it. For America, impatient with the complacency and irresponsibility of Europe, could then indeed revert to isolationism—and Europe, as Peter Jay has said, would find itself free at last to choose to be "Red or dead". Surely that is a destiny that we should try to avoid.
6.44 p.m.
Lord Gladwyn: My Lords, our relationship with the United States is now necessarily a very close one. It was not always so. Right up to 1939 there was, I think, always a certain rivalry, if not jealousy, as between our

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two states if not between our two peoples. The Americans never liked the British Empire and they entirely failed to appreciate what would be likely to happen if it ever disappeared—as it duly did, with their help, after the last world war. Even now it is possible that they do not think that—in the famous words of Dean Acheson—we have really "found a role". As they see it, no doubt quite unfairly, the Head of the Commonwealth, to paraphrase Thomas Hobbes, is "the ghost of the Empire sitting crowned upon the grave thereof".
To be frank, I feel that we are now regarded by the Americans—when they think of us at all, as the noble Lord, Lord Sherfield, seemed to doubt—as a rather quaint, if lovable, old associate, happily sharing the same language and the same sort of democratic principles; useful, indeed essential, as part of the Western defensive system designed to put a check on Soviet ambitions (although Western Germany of course is more important still); not expected to pursue any very individual line in foreign policy, but rather in the long run to give effect to American policy, whatever, from time to time, that may turn out to be.
More particularly in NATO we are expected to be the chief associate of the United States, more conscious perhaps than most of the absolute necessity of not undermining the alliance on the maintenance of which, as so many noble Lords have pointed out this evening, our independence manifestly depends. We may not feel very comfortable in such a role, but I think that we tend to accept it, if a little grudgingly.
But, my Lords, what happens if the American Administration pursues a line which in the considered opinion of Her Majesty's Government—to say nothing of our European associates—is quite misguided? How far, if at all, can we resist such a line without endangering the alliance, on which our whole future rests? This is the question which presumably must underlie the whole of the debate this afternoon, for which we are so indebted to the noble Lord, Lord Jenkins of Putney, for initiating. For let us not deceive ourselves, there are now—apart from economic issues and "aid", very properly referred to by my noble friend Lord Beaumont, in regard to which we may well agree to differ—at least three broad political areas in which the bulk of informed public opinion, in this country at any rate, does seem to diverge from the policy of the Reagan Administration, if not from that of the Democratic opposition in the United States.
I refer to Central America and the Caribbean; the Middle East and East-West relations, with which is associated the whole question of arms control, in regard to just one point about which I propose to refer in a moment's time—although perhaps I should more properly have intervened in the debate which preceded this one this afternoon, the first part of which, unfortunately, I was unable to attend.
I take Central America first because it is perhaps the least dangerous. For even though we might greatly dislike and deplore any action which the Americans might conceivably take—for example, the actual invasion of Nicaragua—we must at least consider that Central America is just as much the "back yard", so to speak, of the United States as Northern Ireland is ours. And we should surely resent any official American
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interference in the affairs of that distressful province. Whatever the United States may choose to do in their back yard—and, of course, American opinion itself is much divided on Central American issues—this is consequently something as regards which, although we may well criticise, we can hardly take a strong opposing line. In any case, whatever American policy may be, it is not as if the maintenance of the vital alliance would be likely to come into question as a result.
The Middle East is quite another thing. Here we have, politically speaking, an atmosphere in which a spark really might cause an explosion. The tension created by what many on this side of the ocean, at any rate, feel is perhaps excessive preoccupation with Israeli security, might one day produce such a spark. And the resulting explosion would presumably result in a clash between the super powers. Hence, United States policy in the Middle East directly affects the vital interests of ourselves and our European partners. That is undeniable.
What presumably we would like—and I am sure that the noble Baroness, when she comes to reply, will not contradict me on this—is for the Americans to get back to something like the old "Reagan plan" and stick to it. I see no reason why the European Community should not strongly urge this on our ally. But supposing the Americans take no notice? In the last resort they are the dominant partner and we cannot oblige them to change their policy, even if we would. Nor can it be proved to be disastrous until disaster occurs, in which case we shall just have to face the consequences.
But there might possibly be means of persuasion other than mere pressure. This is the point that I really want to make, and I am sure that the noble Baroness will appreciate it. I will come to it in a moment after dwelling on the third and perhaps the most important area in which real disagreement may eventually emerge. I refer to East-West relations, more especially as they are reflected in nuclear matters and in arms control. Happily, I think I may take it that, pace the CND and possibly the noble Lord, Lord Jenkins of Putney, most people in this country are solidly behind the maintenance of some Western defence system, both nuclear and non-nuclear, which, with the United States in the lead, may—pending disarmament of course—be regarded by the Soviet Union as "credible" and hence as a deterrent to any action on their part that might precipitate a war.
And it is in the light of what we may probably call a general consensus that I turn, not so much to ASAT (Anti-Satellite Action), in respect of which there is still some slight hope that the two super powers will eventually agree to scrap all further preparations, as to President Reagan's favourite plan—namely, the construction at colossal expense before the end of the century of some anti-ballistic space system that could shoot down all Soviet nuclear missiles shortly after they leave the ground.
We had originally imagined that any divergent ideas on "star wars" could be put on one side for the moment as a result of the Prime Minister's agreement, in her recent talks with President Reagan, not to object, as I understand it, to the expenditure by the United States on "research" for this project of no less

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than $26 billion over the next five years in return for an American assurance that no definite decision to go ahead with it would be taken pending its consideration, along with other nuclear matters, in negotiations with the Russians.
This was satisfactory in so far as it seemed at least to postpone any decision on a very contentious matter. However, the trouble still is that, if over so long a period such very large sums are to be devoted to research, the chances are that, whatever the Russians, the United States Congress or the Europeans may say or do, it will be very difficult in practice to abandon the project in 1990 or 1991.
However, immediately after this welcome agreement, various high United States authorities, including the Secretary for Defense himself, declared that "star wars" was simply not negotiable in any circumstances whatever. And although Mr. Shultz seems now in effect to have overruled Mr. Weinberger and thus in principle upheld the agreement, it remains to be seen whether in the coming negotiations the United States will ever agree to abandon, or even to modify, the SDI project, whatever concession the Russians may be prepared to offer in return. If so, it will mean that what might be called the Weinberger thesis will have prevailed and the whole future of arms control will thereby be gravely imperilled.
What is the Weinberger thesis? It has just been referred to by the noble Lord, Lord Reay. Although I may be unduly suspicious, I feel that the real, if undeclared, purpose of SDI is to prevent any return to a much abused and distrusted "detente" resting on the principle of mutual assured destruction (MAD), which has been at least tacitly accepted in all arms control negotiations up till now. The intention would rather be to replace this concept of MAD by some settlement based not so much on equality as on overwhelming American strength, and notably by an attempt to achieve virtual immunity against Soviet nuclear attack; thus either placing the Russians at the mercy of the Americans or, perhaps more probably, wrecking the Russian economy as a result of Soviet efforts to keep up in some space war race. However much we may dislike and distrust the Soviet Government, it is hard to imagine anything more inherently destabilising than that.
I have no time to dwell further on the dangers of this unfortunate and, according to many qualified scientists, unrealisable project, which I have good reason to suppose are well appreciated by the majority of informed persons in this country and across the Channel, if not in America. At one time there was good reason to suppose that they were also appreciated by our own Prime Minister.
So, in conclusion, my Lords, I would say only this. It may well be that, whatever our views, we shall eventually find it very difficult by simple opposition to persuade the Americans to abandon a scheme which, however impracticable and undesirable, at least promises enormous advantages to its promoters, if only from the financial point of view. But suppose—just suppose—that we and our friends were to hint that if there were ever a chance of its being abandoned during negotiations we should be
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prepared, in order to clinch a deal, to shoulder the financial obligations necessary for strengthening our conventional defences and to this end to cut down on our own expenditures on nuclear weapons. What then? At the very least, would not such an offer encourage those in Congress who are opposed to the whole "star wars" exercise?
I would not suggest that any démarche should be made at once or in so many words. But if in diplomacy one can see a possible means of reaching an end, there are surely more ways than one, however devious, of resorting to it. For the rest, I can only trust that we shall have an opportunity of discussing star wars at greater length in the light of any progress or absence of progress in the forthcoming negotiations with the Soviet Union. It is really not a question of being, as some suggest, beguiled on this issue by Mr. Gorbachev: it is a question of discovering where our true interests lie.
6.57 p.m.
Lord Cledwyn of Penrhos: My Lords, we have had a debate of great interest and importance, and we are indebted to my noble friend Lord Jenkins for initiating it. In his speech my noble friend drew attention to one aspect, as he sees it, of our relationship with the United States of America; namely, the relations between the two governments in the field of defence. I propose to go somewhat wider than that, and many of the excellent speeches we have heard have also ranged more widely.
In general, I have no doubt in my mind that we do have a special relationship. Geography and history have made that inevitable; and we have only to look at the list of signatories to the Declaration of Independence to appreciate that, whether we like it or not. There is an historic bond which it is impossible to deny. As the noble Lord, Lord Sherfield, said, there have been great changes in 200 years; but I think a bond still remains, although there are arguments on both sides as to whether it still exists, and things are said (as they have been said in this debate) which cast doubt upon it. I think that Mark Twain summed it up when he said of Thomas Carlyle's view of Americans that,
"At bottom he was probably fond of them, but he was always able to conceal it".
The mistake many people on both sides of the Atlantic make is to interpret the special relationship in purely political terms: that is to say, if we are close politically, then there is a special relationship; if not, there is no such relationship. But whatever the political climate, there are always close personal and cultural links, and these are not absent among the Americans who are not of British extraction. The political relationship is bound to vary as leaders and policies change in both countries. The fact that they do change is significant in itself for we are discussing relations between two democratic countries. But the other links remain.
I have the privilege of being the president of the Association of Welsh Societies Overseas, and the largest of these by far are the combined American Welsh societies. In August of every year they send representatives to the National Eisteddfod, and when we meet, there is no barrier between us. We are linked

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by the English language—and in most cases by the Welsh language as well! No doubt if we began to discuss political issues, we would find things to disagree about, but there is nothing odd about that, any more than there is about disagreement in this House. I think therefore that it is important to get this in the right perspective at the very outset.
Then there are other links of a more material kind which must be taken into careful account, notwithstanding what the noble Lord, Lord Beaumont, said about trade. For example, our investment—these are perhaps not the very latest figures—in the United States is of the order of $23 billion and United States investment here is of the order of $30 billion. Our trade with the United States is worth some £16 billion. This is not only immensely valuable to us and to our economy but implies the constant interchange of views and personal relations on the commercial and industrial level.
This trading relationshp is not new. It has been going on for a very long time; and the more it thrives, the better it is for our economy, provided it is balanced and fair. I do not overlook the current economic problems or the serious disagreements which have occurred between our two countries, for example, about the Siberian pipeline two years ago, about trade restrictions which are of acute concern to this country, and about growing concern about a possible American shift towards protectionism. Disagreements on trade matters can have bitter repercussions, I agree, and this must be understood on both sides. The row over the Soviet gas pipeline showed how easily the United States and the EEC could fall out very seriously. The subsequent accommodation showed the strength of the relationship at the end of the day.
On the political side—here I include defence which has been extensively covered in the previous debate—there appear to be two schools of thought. One school takes the view that the political relationship between the United States of America and Britain has never been healthier, and that this is partly due to President Reagan's regard for the Prime Minister, a regard which is warmly reciprocated. On 22nd December, for example, the Economist said:
"Measured in personal terms, the partnerhip now seems to be at the kind of high point reached between Roosevelt and Churchill, the pair who launched it, and later between Kennedy and Harold Macmillan".
Senator John Tower, the chairman of the Senate Armed Services Committee, said a few days ago:
"Most Americans regard Britain as our closest and most reliable ally".
This view is also shared by Mr. Caspar Weinberger and others. The Economist finds evidence of affinity with Britain in travel statistics. It points out that, apart from Mexico, which is on the doorstep of the United States, Britain is by far the most popular destination for travelling Americans.
Three tangible advantages, it is argued, flow to Britain from the special relationship. The first is the one dealt with and sharply criticised by my noble friend Lord Jenkins; namely, nuclear defence cooperation. Trident missiles are, it is said, a natural offspring of Polaris, although the full price is being paid for Trident which was not the case with Polaris. Secondly, the navies of the two countries co-operate
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very closely at Northwood, as we know; and, thirdly, intelligence—a valuable advantage not shared with any other country. It is difficult of course to reconcile the latter advantage with the United States invasion of Grenada without any forewarning to the Government.
This therefore is one view: that the political relationship between Britain and the United States is sound and flourishing. There is, however, a contrary opinion that some fairly fundamental differences exist between our two countries. For example, on 6th May The Times referred to the dangerous threat of the,
"creeping anti-Americanism that is evident in Britain and Western Europe".
This is of course true, and it is in my view unfortunate. It is due to many factors; to the fact that a generation has grown up which does not remember the war or the Marshall Plan and the immense efforts of the American people to help Europe on to its feet again; something no one in Western Europe should ever forget.
Then there was the establishment of NATO (which this party supports as it has always done, as my noble friend Lord Longford has said) one of whose founders was the late Ernest Bevin. The doubt about the relationship is due to the matters graphically described by noble friend Lord Jenkins in his opening speech, the apprehension about the spread of nuclear weapons and the lively awareness that Western Europe is in the front line. It is due to the more aggressive posture of President Reagan in the first years of his Administration, especially compared with his predecessor, and his speeches over a period when he spoke in terms of the empire of evil, the powers of darkness and so on. The actions of the United States Government in Grenada and in Central America have also created an atmosphere of doubt. May I say in parentheses that the remarks of the noble Lord, Lord Beloff, about my right honourable friend Mr. Neil Kinnock were exaggerated, in bad taste and not entirely accurate. There has of course been a welcome change over the past nine months or so and we warmly endorse the recent meetings between Mr. Shultz and Mr. Gromyko in Geneva, and of course President Reagan's positive reactions to them. But the anti-Americanism of which The Times wrote still remains a worrying aspect of our present relations.
I concede that our own position is not always an easy one. On the one hand, we are members of the European Community with interests, loyalties and a clear commitment to our partners there. On the other hand, we have the special relationship. After her meeting with President Reagan in Camp David the Prime Minister is reported as saying:
"She and the President saw matters in very much the same light".
She was of course talking about armaments and defence and the United States' new proposals for the development of the so-called star wars system. Is this absolutely correct? I would value the comments of the noble Baroness on this matter. Does she confirm that the Government are at one with President Reagan on this issue of star wars. Is there not a deep strategic division between our two countries in that, beyond all our allies in NATO, we, Britain, hold that strategic defence is not worth the effort except in so far as it can be achieved by the possession of an ultimate retaliatory weapon, that is the nuclear weapon?

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At some stage this has to be explained in full by our Government. The star wars system is of central interest. Is it for example the Government's view that to proceed with this would provoke an enormously costly and destabilising escalation of the race to develop both defensive and improved offensive weapons, thus frustrating once again the possibility of disarmament. It would be helpful if the Government made their position abundantly clear on this issue at this time. This is important in relation to the projected new arms negotiations. We are extremely grateful to the noble Baroness for the full explanation which she gave of the conduct of the talks when she wound up the last debate. But the extent to which the United States are prepared to put this great issue on the table in the forthcoming talks is of the utmost importance.
Finally, I agree with the noble Lord, Lord Gladwyn, about the three areas of divergence to which he has just referred. But these are all negotiable between us, and I believe that they can be negotiated successfully. However, there is also a longer term aspect of our relationship. I was much impressed by a leading article in The Times on 22nd December. Discussing the development of international affairs, it stated:
"In 'second term' Washington, it is certainly possible to detect a feeling that the United States is opening up a gap between itself and the rest of the world, friends, potential friends, and potential enemies. The full implications of this gap in philosophy and achievement are only slowly dawning on American public opinion and will take some time to be absorbed elsewhere. The significance of the 'gap' should not he over-valued but its existence and its political implications should clearly not be ignored".
Later the article states:
"Not since the days of Roosevelt has there been such a sense of a nation on the move, of a new strength in the United States, coming from all classes and all age groups making their own contribution to the country's emerging predominance in the world".
Those are very significant words. The observer who wrote them obviously comments with great knowledge and intelligence, and note should be taken of what he said. There is a change, without question. President Reagan is a symptom of it—not its philosopher. There is a change here and in Western Europe as well. It is not taking place in America alone. Some people seem to believe that Europe is static and that it no longer counts. But Europe is still the greatest continent in the world and its potential for good is immense, if its resources and talents are properly organised.
There is therefore change here and in Western Europe generally and there will be a change in the Soviet Union—especially when younger leaders take over. We must anticipate the change there imaginatively. We are also extremely conscious of the fundamental changes taking place in China today, and these which will come in the sub-continent of India as well. We live in a world of immense changes and we are probably too close to them to appreciate their full implications.
My Lords, what is necessary is leadership well equipped with common sense, good judgment, and a commitment to liberty and the rule of law. These have been and must remain the basis of this special relationship.
7.12 p.m.
Baroness Young: My Lords, I am grateful to the noble Lord, Lord Jenkins of Putney, for choosing to
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debate this important subject this evening. That said, the noble Lord will not be surprised to hear me say that there was no part of his speech with which I found myself in agreement. In the course of my remarks, I will of course try to answer some of the points he raised. I am bound to say to the noble Lord that his speech stood in marked contrast to that of his noble friend Lord Cledwyn, with whose remarks I agreed in very large part.
Many of the points raised by the noble Lord, Lord Jenkins, were well answered by my noble friend Lord Beloff. However, this debate gives me an opportunity to place on record this Government's firm belief in the importance of our relationship with the Government of the United States for the future wellbeing and security of this country. I am told that a senior Foreign Office official once told his colleagues that he wanted to hear less of our relations with other countries and more of our interests. That is sound thinking, so I shall start by considering our relationship with the United States Government in the light of both English and American interests. What is in it for us, and what do we think is in it for them?
Security is the cornerstone of the relationship between the United States Government and ourselves. The United States continues to play a fundamental role in guaranteeing the security of Britain and our other NATO allies. United States servicemen stationed in Europe constitute the largest American force posted outside the United States. We acknowledge a debt of gratitude to the United States Government and the American people for their support. We are well aware that without this support we could not maintain the level of forces necessary to deter aggression.
It is important that the extent of the United States commitment to our defence is not taken for granted, particularly by the generations which have grown up with the Atlantic Alliance as an established institution. History in ancient times, as well as more recently, can point to many examples of a powerful country involving itself militarily in the affairs of another continent. However, it is without precedent that a preeminent military power should agree to undertake the defence of another continent in free association with countries of that continent. That is what the United States did at the foundation of NATO.
It is not a one-sided arrangement. The United States supports the alliance because it has learned from bitter experience that the defence of Europe and the defence of the United States is indivisible. The United States commitment to our defence is matched by Europe's own contribution to NATO. I listened with particular interest to the point made by the noble Lord, Lord Caccia, in that respect. It is a common endeavour and an endeavour in which Britian plays a major role.
We spend more on defence in absolute and in per capita terms than any member of NATO apart from the United States. Out of our total defence budget the proportion devoted directly or indirectly to alliance tasks continues to amount to some 95 per cent. We are the only European power to contribute to the alliance's strategic nuclear, theatre nuclear, and conventional forces (the three legs of what is known as NATO's triad of forces) and we provide facilities

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which enable the United States to play her role in the alliance more effectively.
Whenever there are reasons to believe that the Soviet Union is genuinely interested in the reduction of tension in armaments, Britain works closely with the United States and our other allies to find common ground and to secure agreement. The alliance has proved itself over nearly 40 years as a remarkably adaptable and effective peace-keeping institution.
We have just concluded a debate on disarmament, and many of the issues which have been raised in this debate were raised in the preceding debate. However, there are some points I shall try to answer which were not raised in the first debate.
The noble Lord, Lord Jenkins, asked once again whether we are not being subservient to the United State and had no control over United States nuclear weapons. It is as well to re-state the position of Her Majesty's Government as stated by my right honourable friend the Prime Minister in answer to a parliamentary Question on 12th May, 1983:
"The existing understandings between the United Kingdom and the United States governing the use by the United States of nuclear weapons and bases in this country have been jointly reviewed in the light of the planned deployment of cruise missiles. We are satisfied that they are effective. The arrangements will apply to United States cruise missiles based in the United Kingdom whether on or off bases. The effect of the understandings and the arrangements for implementing them is that no nuclear weapon would be fired or launched from British territory without the agreement of the British Prime Minister".—[Official Report. Commons, col. 433.]
Having mentioned that, I was very interested to hear the account of the noble Lord, Lord Sherfield, of the relationship enjoyed by the late Mr. Attlee when he visited Washington and had discussions with President Truman over the use of nuclear weapons in the Korean war. And I am sure we were all very interested in the story told by the noble Earl, Lord Longford, concerning the discussions between Conservative Members—Sir Winston Churchill and Mr. Beaverbrook—about the American relationship. It does illustrate that, over a long period of time, it is very important that British Prime Ministers and British Governments should have a very close and intimate relationship with the American Government.
The noble Lord, Lord Mayhew, raised the question of the Western European Union. The United States position is that they have supported publicly efforts to revitalise the WEU as an initiative aimed at enhancing European defence efforts and building public support for them, thus strengthening the Atlantic Alliance. Our own view is that we fully support the revitalisation of the WEU in order to promote increased European defence co-operation and to enhance the European contribution to the alliance.
My noble friend Lord Reay raised a number of points. I was most interested when he spoke of the importance of the cohesion of the relationship between the United States and Europe. He referred to East-West relations. I hope that 1985 will be remembered as the year of realism. There are signs that the Russians have recognised that their attempts to obtain concessions from the West by refusing to move on arms control and other issues were not succeeding. The West has made clear for some time its desire for a wide-ranging dialogue with the Soviet Union, and we hope that the process of contact, not
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just between the super-powers, will continue. We must temper this welcome with realistic expectations about progress. There are unlikely to be dramatic break-throughs, and we will need patience and persistence.
My noble friend Lord Reay also asked about chemical weapons, and I confirm to him that the United Kingdom has tabled at the Geneva negotiations a series of verification proposals. The recent ones include our proposals in 1983 for verifying the non-production of chemical weapons upon entry into force of the convention; a proposal in February 1984 for challenge inspection in cases of suspected non-compliance; and in July 1984 further proposals on non-production. We intend to table a further proposal on verification in March this year.
The noble Lord, Lord Gladwyn, raised a series of issues. The first was on American policy in Central America. I should like to say to him that the United States has repeatedly stated that it wishes to see political reform in Central America through peaceful means. We, too, support that objective. The United States support for the Contadora process was reiterated at the recent session of the United Nations General Assembly. We welcome the continuing discussions between the United States special representative, Mr. Schlaudeman, and the Nicaraguan Deputy Foreign Minister, Tinoco, and hope that these will assist the Contadora process.
On the Middle East, I confirm to the noble Lord that we believe that the United States is indispensable to the peace process. We still believe that the Reagan plan of September 1982 is the best available starting point for negotiations. We welcome President Reagan's reaffirmation of this commitment to the plan which he gave at the United Nations General Assembly in 1984.
The noble Lord, Lord Gladwyn, referred to the whole issue of star wars. Indeed, it was raised by the noble Lord, Lord Cledwyn, and referred to by other noble Lords. I have no doubt that we shall have much discussion and debate on this matter over the coming months and years. Perhaps this evening I can confine myself to saying that the Government have made clear that an arms race in space would benefit no one. We are glad that post-Geneva talks will focus on preventing an arms race. Negotiation and mutual restraint will be needed to meet the urgent challenge posed by costly new space technologies.
The SDI, and parallel Soviet research, are permitted under existing agreements, but there is a clear need for the United States to match Soviet efforts. However, the implications for the future are far-reaching. As was agreed at Camp David, any deployments would have to be a matter for negotiations. The United Kingdom is concerned that neither side should misinterpret the other's intentions and that current activities should aim to strengthen peace and not increase tension; to enhance and not to undermine deterrence. President Reagan and my right honourable friend the Prime Minister agreed at Camp David that the United States and the Western aim is not to achieve superiority but to maintain a balance, taking account of Soviet deployment. Soviet strategic defence programmes are extensive and well established.
The concept of security goes wider, however, than purely military or defence considerations. It reflects

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the community of economic interest between America and Britain. The United States is our largest supplier and remains our largest export market, both for goods and invisibles. It is also the main overseas investor in this country and the main recipient of our own overseas investment. In 1982, the last year for which figures are available, the United States provided 35 per cent. of direct non-oil investment in the United Kingdom from overseas. In the same year the United States received nearly 60 per cent. of all United Kingdom direct non-oil investment overseas, or some £1.5 billion: the United Kingdom accounted for close to 40 per cent. of foreign investment in the United States.
Given this community of interest, and the size of the United States economy, American policies, of course, have an impact on us. For example, the exchange rate for sterling reflects concern about monetary conditions, the level of borrowing and public expenditure, and uncertainty over oil prices; but is influenced also by the strength of the dollar. To the extent that sterling has depreciated further against the dollar than against other major currencies, this is due in part to the demand for foreign capital to finance the continuing high American budget deficit. We welcome the recent lowering in United States interest rates, but renewed upward pressure in 1985 cannot be ruled out in the face of the deficit and a continued pick-up in activity.
The economic problems of Europe receive more than their fair share of coverage: the good news does not. Performance last year in Europe was the best for many years. In the United Kingdom, growth will continue this year and inflation is under 5 per cent. Exports were up in volume in 1984. The recovery here has been slower than in the United States. However, we are increasingly competitive. Europe is rising to the challenge of new technologies and structural adjustment. A new drive to liberalise further the internal Community market is under way.
The United States and Britain stand together in many important endeavours. We share a deep and abiding attachment to the fundamental values of our societies and to the democratic principles on which our systems and institutions of government are based. These points were made first by my noble friend Lord Beloff, particularly comparing them with the system of government in the Soviet Union, and were reiterated by the noble Lord, Lord Sherfield. Outlook, shared values and principles are enhanced by ties of language, history, common heritage and the rule of law.
We are both concerned and have a practical compassion for the less well-off countries in the world. For example, only recently we in this country contributed in full measure to relief of the Ethiopian famine, and the United States has announced that it will be providing l½ million tonnes of food aid for countries in need in Africa. This was reported to constitute half the continent's requirements in 1985. For many people there is also the memory of so many dangers and sacrifices faced together in the course of this century. It is this breadth of shared history and community of interest which gives the relationship between the British and American Governments its depth and particular character.
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Winston Churchill told members of the United States Congress on 17th January 1952:
"Bismarck once said that the supreme fact of the 19th century was that Britain and the United States spoke the same language. Let us make sure that the supreme fact of the 20th century is that they tread the same path".
I believe that we have successfully trodden the same path in the 30 years since then. It is indeed a special relationship. As the noble Lord, Lord Sherfield, pointed out, this does not make it unique, but it undoubtedly does make it special.
Just before Christmas my right honourable friend the Prime Minister, at President Reagan's invitation, stopped in Washington on her way back from China and Hong Kong for a wide-ranging exchange of views with President Reagan, Vice-President Bush, Secretary of State Shultz and senior members of the United States Administration. Discussion focused on East-West relations and arms control talks. It also covered the Middle East, Lebanon, Central America, the United States economy, the Prime Minister's visit to China and her recent talks with Mr. Gorbachev and Dr. FitzGerald. The Prime Minister and President Reagan expressed their grave concern at the current famine in Africa, to which I have just referred.
On 9th January, at President Reagan's request, his National Security Adviser, Mr. McFarlane, reported to my right honourable friend the Prime Minister on the outcome of the United States-Soviet talks in Geneva on 7th–8th January on arms control. The Prime Minister said that the British Government warmly welcomed the agreement which had been reached to hold negotiations on nuclear and space weapons. She assured Mr. McFarlane of Britain's continued support for the United States in the negotiations, and looked forward to maintaining the closest contacts during them.
The noble Lord, Lord Jenkins, in his opening speech asked whether we are not now subservient to the Americans and in a semi-colonial relationship with them. Of course we do not always see eye to eye on all issues with the United States Administration. A community of interest is not the same as an identity of interest. The United States has strategic, political and economic interests in areas where our concerns are less direct, or marginal. We are part of Europe and have European perceptions. We also play an important part in bringing European perceptions into the affairs of the alliance and the broader transatlantic relationship.
It is particularly important that we work together to resolve problems that have arisen in the area of trade. I am happy that agreement has been reached between the European Community and the United States over Community exports of steel pipes and tubes, which had been a source of friction: I hope that differences in other areas, especially agricultural trade, may be resolved by discussion and consultation. We have a common commitment to resisting protectionism, which is set out in the declaration of the Economic Summit at Williamsburg. Nothing is more important, as we make progress towards a new round of multilateral trade negotiations, than that we should continue this resistance. We are particularly concerned at United States efforts to enforce American jurisdiction beyond American shores and at the system of unitary taxation applied in certain American states

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(though no longer, I am happy to say, in Florida). There are thus differing perceptions of the global impact of United States economic management.
The noble Lord, Lord Beaumont, raised the question of the World Bank and the IMF. Although he said that he did not insist on a reaction tonight, I should just like to say this to him. It is not at all the case that British policy merely follows American policy in the IMF and at the IBRD. Often there is a coincidence of American and British views on how matters should be handled in the bank and the fund. It would clearly be wrong to try to generate differences in our approach where none existed in reality in order to meet the noble Lord's point, but, where there are differences, we do not hesitate to make them clear. I need only remind him of the controversy over the replenishment of IDA 7.
The mark of a mature and stable relationship is to be able to acknowledge that there are differences of perception and, on occasion, differences of interest. It is the mark of a dynamic relationship that both sides put time and effort into finding ways of solving problems or minimising unavoidable differences. Thus, Ministers and officials from this Government and the United States Administration have devoted considerable resources to seeking to resolve our differences over certain aviation issues in a way compatible with both our interests. I am happy to say that we have made some progress and discussions continue.
I should like to end by reminding noble Lords of a statement by the Prime Minister in her speech at the Lord Mayor's Banquet on 19th November 1983 which encapsulates this Government's views of our relationship with the United States:
"Friends, like families, differ at times, but nothing alters these basic principles—that the United States is our ultimate defensive shield, the guarantor of Western freedom and the best hope for the world's oppressed. To that conviction we hold. We are confident that any differences that may occur will always be infinitely less important than the purposes and loyalties which bind us together".
7.33 p.m.
Lord Jenkins of Putney: My Lords, I am grateful to the noble Baroness for her reply to this debate which has been an interesting one. I am also grateful to her for leaving me two or three minutes to clear up one or two points, though it is, of course, not our custom to reply to these short debates in any full sense of that word. On the question of clarification, the noble Baroness is, I think, aware that what she told us about the Prime Minister's response on cruise is not regarded by many of us as being a satisfactory answer to the question; but I shall not pursue the matter tonight. There will be other opportunities on another occasion.
I must raise one point. I think perhaps there was a misunderstanding by the noble Lord, Lord Beloff, who seemed to take the view that a proposal that this country should consider a closer relationship with the United States constituted a statement of Soviet policy. As on another occasion the noble Lord was unable to distinguish between the letters CND and KGB, perhaps we may expect a certain myopia from that quarter. I should like to assure him that everything that I have said tonight has been said much more cogently in the United States. There are people there
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who are unhappy about the relationship between their great country and this one of ours.
Finally, I think that I must give the noble Lord, Lord Sherfield, the opportunity to refer to the Cabinet minute that I mentioned. If I briefly read an extract, he will be able to pick it up from Hansard. What was said in the Cabinet minute of July 1954 was this:
"Some believed that the greatest threat to world peace came from Russians. He (Salisbury) himself believed that the greater risk was that the United States might decide to bring the East-West issue to a head while they still had overwhelming superiority in atomic weapons and were comparatively immune from atomic attack by Russia".
That was Lord Salisbury's statement at that time. Whether it was in keeping with his general views, the noble Lord, Lord Sherfield, will know better than I.
I think that it has been a useful debate. I still take the view that our present relationship with the United States is a bad one, that it is too subservient, that it is getting worse and that it needs drastically to be improved. Having said that, I believe that this debate itself may conceivably contribute just a mite in that direction. I beg your Lordships' leave to withdraw the Motion.
Motion for Papers, by leave, withdrawn.

Cross-Channel Fixed Link
7.36 p.m.
The Earl of Bessborough The Earl of Bessborough rose to ask Her Majesty's Government what progress has been made in discussions with the French Government regarding the building of a cross-channel fixed link.
The noble Earl said: My Lords, I beg leave to ask the Question standing in my name on the Order Paper. As I told my noble friend Lord Brabazon, I should also like to ask him whether the Government have had discussions with other member states in the European Community and the European Commission on this subject; and also whether the European Commission itself has produced any proposals or communications to the Council of Ministers. I know that there has been Community involvement.
At the outset I should perhaps declare an interest—not a financial one—in as much as I am half French and for 65 years, ever since the end of the First World War, have constantly been crossing the Channel. As a child when visiting my French grandparents and other relations, I may say that I was frequently seasick in front of my parents and other distinguished personages crossing the Channel. Then in the late 1930s my first job was in the League of Nations secretariat, which involved frequent visits through France to Geneva and elsewhere on the continent. If your Lordships will allow me this little autobiographical note, in 1940, during the Second World War, I was in France, coming out via Dunkirk. Later I was a military liaison officer with the French forces of both Generals Giraud and de Gaulle. After the liberation of Paris, I was five and a half years in the embassy there.
As a Minister in the mid-1960s I was in close touch with my science and technology counterparts in the French Government. Finally, more recently as a Member of the European Parliament, I was, like the

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noble Lord, Lord Gladwyn, and other noble friends in your Lordships' House, crossing the Channel often twice a week, and even now still visit France regularly. I feel virtually as at home there as in Britain. They are my two countries.
I have at all events had to cross the Channel so many hundreds of times—nay, perhaps a thousand times—that I have always been concerned at having to chafe at seaports and airports before crossing to the other side. Sometimes, indeed, like the noble Lord, Lord Gladwyn, I have found that these British offshore islands seemed, especially at this time of the year, cut off by weather from the contintent, with which, after all, we are now so closely associated in the EC. It has always seemed to me, therefore, that if we are truly to belong to the European Community and pledged, as we are, to remove technical barriers to travel and trade, there should be a fixed link across the water.
I was therefore particularly glad to read the joint statement by my right honourable friend the Prime Minister and President Mitterrand on 30th November 1984, recognising the importance of a fixed link as technically feasible and financially viable and announcing the setting up of a Franco-British working group to advise on requirements as a matter of real urgency—and I underline the word "real".
Then I have also noted the press notice which was issued on 10th January by the Department of Transport after the first meeting of this group on that day. In that press notice are given the terms of reference which were defined as follows: to advise Ministers on—
"the way in which the two Governments should be ready to facilitate the construction of one or other form of fixed link between the UK and France, it being understood that there will be no support from public funds and no Government guarantees against commercial risks either in relation to construction or exploitation".
Secondly, to advise on:
"the undertakings which would be given by the two Governments against political risk".
Thirdly, to advise Ministers on:
"the guidelines to be defined by the two Governments, for example, on safety, the environment and any constraints affecting commercial exploitation on the basis of which groups interested in promoting, financing, constructing and operating a fixed link can submit proposals to the two Governments".
Finally, to advise Ministers on:
"Information required from these groups to enable the two Governments to make a choice between proposals".
I understand also that the group have agreed on an intensive programme of work covering all areas on which promoters need guidance. I also note that the group will be meeting again next week and that their advice would be submitted by the end of next month. This speed is very encouraging.
I have of course read the report of the other UK-French study group which was presented to Parliament by my right honourable friend the Secretary of State for Transport in June 1982. I have also studied the proposals of the British Tunnel Group itself and the Inland Transport Council. I am indebted to both of these bodies for very useful briefing. From these it is clear that our French friends strongly favour a link and the Inland Transport Council state that a rail tunnel should be built now—and they put "now"
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in capital letters, underlined. In the view of the Tunnel Group, a twin bored 7-metre rail tunnel would be the type of fixed link likely to meet the necessary criteria.
The noble Lord, Lord Gladwyn, seems unfortunately to have left us at the moment, but I hope he will return. Like him and the former French Minister, M. Jules Moch, I have never been very enthusiastic about a tunnel which, as I understand it, would only be able to cater for a two-way railway link. I believe this would result in delays and bottle-necks getting road transport on to trains.
Also experience with other tunnels has not greatly reassured me. I understand that the road tunnel under Mont Banc has not been altogether satisfactory due to problems of ventilation and gradients—to say nothing of the Dartford Tunnel bottlenecks and the recent grave accident in the Todmorden rail tunnel in Yorkshire.
I have indeed always been in favour of at least some bridging element in the fixed link and was much more interested in the Detweiler Project proposed, I think, some 12 years ago, for a bridge with an island on the sandbanks in the middle of the Channel, which would have provided various services. I have also been interested in the Euro Route Project which your Lordships know would combine both bridging and tunnelling and is supported by British Steel with Sir Nigel Broackes of Trafalgar House as chairman. I was told yesterday that it is also supported by my noble friend Lord Soames, who particularly asked me to say how much he regretted that he was unable to be present this evening for he was certainly in favour of the link.
The Euro Route proposals have received considerable press coverage and appear, according to the media, to be the front runners. I am also grateful to this group for reasoned and comprehensive briefing which I hope is available to all your Lordships. However, I have also looked carefully at, and am even more attracted by, the proposals of the Eurobridge Study Group, which I must confess at present I favour. I am very happy that my noble friend Lord Layton, who is associated with this group, and who I am glad to see sitting on our Benches, is to speak on this project this evening. I shall listen to him intently, and especially his answers to the bridge problems summarised in Annexe B, page 31, of the Report of the UK/French Study Group which I have already mentioned and which was presented to Parliament in June 1982.
As I understand it, the Eurobridge Study Group scheme, which I believe might employ some 60,000 to 70,000 workers, would consist of a bridge with seven spans and six piers, the spans being built of new fibre materials which would be much lighter than steel and enable each span to be of some 5,000 metres in length. I read with great interest the summary of the Eurobridge Study Group proposals, which is, I believe, available in the Printed Paper Office and the Library. I hope that this evening my noble friend Lord Layton will elaborate on that project, because frankly I think it is most imaginative and should provide a link which will meet the needs of cross-channel traffic more effectively and in a longer term than other proposals that have been put forward.
When your Lordships note that four-fifths, that is to say 80 per cent., of all traffic in Europe now goes by road, it seems to me essential to cater for this by some kind of road bridge using these new fibre materials such as Parafil made from Kevlar. Use of these very light materials in the Atlantic and in North Sea oil exploration seems to have proved their strength and durability for suspension bridges with such very long spans.
If it is thought that these materials have been adequately tested and proven, as I am told they have been, then I think what is proposed by the Eurobridge Study Group—a seven-span, four-level motorway bridge, with two four-lane decks and two two-lane decks in sheathed spans—is the most interesting. I believe too that such a group could well afford to build a rail tunnel as well, to satisfy British and French railway requirements and accommodate the French Train de Grande Vitesse, that is to say, the "very high speed train". I recognise that the Government require the scheme to be financed by private enterprise and I should hope that the bridge scheme would prove attractive to banks, investors generally and even Governments.
Certainly one noble Lord, who is chairman of a well-known bank, the noble Lord, Lord Catto, of Morgan Grenfell (who also regrets not being present this evening), confirmed to me over the weekend that he believes it would be financially viable and that it should not be impossible to raise on the world market the necessary £4·7 billion sterling for the bridge and the tunnel. Sums larger than this have been raised for other projects. In this respect, the financial section of the Eurobridge Study Group report is of interest inasmuch as the group's proposals avoid reliance on any form of Government involvement in finance unless, as I say, Governments choose to invest. As I see it, this group's only request would be confirmation by Government that were the project to be cancelled for purely political reasons, outlays already incurred would be reimbursed. I believe that Governments might accept this.
I accept that tonight my noble friend Lord Brabazon may not be able to give very positive replies other than to say that both governments are in principle certainly very well disposed to such a link. I recognise that we must wait for the Anglo-French working party report at the end of February. Nonetheless, I would be glad to hear from my noble friend the Government's preliminary views in the hope that this very long-running Anglo-French fairy tale may now become a reality and bring our two beloved neighbour countries, not always in agreement about certain things, closer together and thus able to understand each other better. I beg leave to ask the Question standing in my name.
7.51 p.m.
Lord Carmichael of Kelvingrove: My Lords, we must all be grateful to the noble Earl, Lord Bessborough, for raising this Question. He has chosen a most appropriate time. When something is happening on the whole question of a Channel link, it is well worth having a look at the problem. The fact that the French and British governments are getting together again is a great encouragement to those of us who have always felt the need for a Channel link.
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I can perhaps give, as the noble Earl did, a little reminiscence about my experience of the Channel link. Ten years ago this month—the coming Sunday is, I believe, the anniversary—the late Anthony Crosland, then Secretary of State for the Environment, announced the Government's formal withdrawal from the treaty with the French government and the arrangements with the private consortia to proceed with plans to construct a tunnel giving a fixed link between Britain and the European mainland. The reasons for the decision, very reluctantly taken, were many and very complicated. Perhaps we were all too starry-eyed and euphoric. We expected too much. There was talk of a London-Paris journey time of 2 hours 43 minutes which would itself be reduced when new, very fast high-speed trains, already under experimental test in both Britain and France, were brought on stream.
However, it entailed on the British side a special link between London and Cheriton near Folkstone for which British Rail gave a first estimate of £120 million. On re-examination, following various demands made upon it. British Rail had to revise this estimate up to £373 million. I do not blame British Rail too much for this. No major rail link had been built in Britain since the turn of the century. Certainly, no rail link had been built, or contemplated, through densely populated and extremely valuable areas in the stockbroker belt. It reached the point where we felt that the only way in which people in that area could be satisfied was to build a tunnel from London to Dover and then continue from Dover across the Channel. There were other costs that were not apparent. And the Secretary of State had no alternative but to ask for time to look at the phasing of the project with a view still to saving it. All of us wanted to save it. I was involved in many of the discussions.
Another difficulty was that during that period there were two general elections in one year. It was 1974. While the other place and this House act very well, we sometimes grind rather slowly. To get the necessary permission for the project through both Houses would have taken a great deal longer, than, at a time of two elections, it was possible to give. In an adjournment debate following the decision officially to cancel the project announced by Anthony Crosland on 20th January 1975, many Members took part. Some of them now sit in this House. I know that I speak on behalf of my noble friend, Lord Mulley, with whom I was closely involved on the tunnel project, when I say that we were anxious to find a way of continuing the scheme.
It will perhaps mean something to many Members, who have been involved for a long time in the whole project, when I say that during the Christmas recess I was rereading some of the many debates, answers to Questions and statements on the subject of a fixed link across the Channel. To anyone like myself—a number of noble Lords have even more experience than I have—it requires not just a few hours during a recess but perhaps the whole of a very long recess just to scratch the surface of the literature that has built up.
As well as being Parliamentary Secretary with some responsibility for the Channel link, I also had the good fortune to serve on the Select Committee when, again, schemes old and new were submitted by powerful, and

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in some cases hopeful, groups. It will, I am sure, be the experience of many noble Lords that a point is reached, no matter how much new information is given, when the intellectual process has acute indigestion. One finds oneself reverting to an originial hunch or "gut" decision using, however unscientifically or irrationally, the new facts to support this perhaps inelegant reasoning. It always seemed to me—I am speaking here particularly about a tunnel—that a big hole in the ground, while expensive to dig, was thereafter a reasonably cheap permanence. But the most important single factor for myself coming from the northern part of these islands, was the linking of the rail systems of Britain and those of Continental Europe. This was my principal reason for wanting a Channel link.
Despite my belief that there can be no end to submissions on the subject from all sorts of sources and the certainty that, even if nothing is done for another 10 years, there will be still greater amounts of paper to read through, there is one submission in all that I have read that cannot be easily pushed aside. It is the, I consider, masterly analysis of all the options by Professor Sir Alec Cairncross in his report commissioned by Anthony Crosland and my right honourable friend, now Lord Mulley. Sir Alec's evidence to the Select Committee was most powerful. It clarified for all Members of the Committee the crucial points and arguments in the 100-odd years of debate that have taken place on this matter.
The Select Committee had the opportunity to visit the site at Cheriton and saw the progress that had been made on the service tunnel. They watched the boring machine at work. We also visited the French end of the proposed tunnel and noted that the French government had put their machine in mothballs—I do not know whether it is still there but for many years it was on the hill just outside Calais—with a view to using it on the project at a later date. The British machine was dismantled and, I believe, sold for scrap. The belief was that we had learned enough from digging the two miles of the service tunnel and that, if required, a new machine that was more efficient could be built. That seems to me reasonable.
Your Lordships will perhaps think from the tenor of my remarks that I have dismissed the idea with little thought of any link other than a tunnel. That is really not so. The noble Earl mentioned one of the designs that really fascinated me for a period. I can think of few things more exciting than to drive across the Straits of Dover, perhaps particularly at holiday time—not if you are going on an official job to the Council of Europe, or to Geneva—and to stop, as one design that was mentioned in the noble Earl's speech suggested, in a tunnel in the centre, with a restaurant there. That sounded very attractive and it was one possibility to which I gave great thought.
The major and obvious difference between a tunnel scheme and any of the surface links is as I have tried to indicate earlier. We know the type of machine required to build a tunnel. We know the type of strata in which we should be working and we know even what we should do with the chalk spoil from the borings. All the test borings on the line of the tunnel are, I believe, still available, at either Dover or Calais.
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The records have been preserved—I think they were bought by the two Governments—so that the preliminary work on a tunnel would be minimal though it would still be a major feat of organisation and logistics.
I should like to spend a few minutes on a brief look at some of the other schemes. None of the other schemes is anything like so advanced. No matter how expert the people who have put forward the various schemes—and I have met many of them—none is really so well advanced. The viaducts, the islands in the immersed tubes, plus the rail-only tunnel in the submerged tube—I think that is the Euro Route suggestion—leave a great deal to be desired. I am sure that noble Lords who have been looking at the subject will realise that the type of dredging required for the submerged tube in such a busy waterway raises problems that it is not possible to skip over and leave without a great deal of thought.
The question of ventilation is another very important point which to my mind has not been answered satisfactorily except by the two seven-metre diameter tunnels plus the four-and-a-half-metre service-tunnel-cum-ventilating-tunnel. So many new techniques are involved that I believe that, when we began to think in terms of starting dates, building schedules and trying to get contracts let, a great deal of time would have been lost. Perhaps we have got both Governments in a position where we may get something done now if we are ready to start relatively soon. If we have to wait much longer, and if we wait for answers to all the questions raised by the Euro Route, it may not be possible to get a start.
The suspension bridge is another wonderful idea and I was fascinated reading material on it in regard to the new techniques, the new materials and the new types of suspension. However, I still feel, as the Select Committee said, that it would be a major project at the limit of the state of the art. Particularly in aeronautics and defence contracts, all governments have had their fingers very badly burnt by going to the limit of the state of the art and then half a step beyond it. Again, I feel that there are a number of questions that have to be answered here. For instance, if it was an open bridge you would have the problem of high-sided vehicles that we have on the Severn Bridge. If it was not an open bridge, you get back perhaps less to a problem of ventilation than to the one of driver fatigue in driving all the way through a tunnel like that.
We are talking also of a bridge with spans two or perhaps even three times the size of those of the Humber Bridge, which at present are the longest spans we have. Even with new materials, I think you are going rather far. Therefore, with reluctance, I have come to the conclusion that if I want to see a cross-Channel link in my lifetime I have little option but to say that a tunnel could start within a very short time and the others could not do it nearly as quickly.
The only other point I wish to comment on in this regard is the suggestion for a drive-through tunnel instead of a rail tunnel. For me, a drive-through tunnel raises again much more sharply the questions of driver fatigue, fire hazard and breakdown in the tunnel, particularly if you have heavy lorries—40-tonne lorries—mixed with light cars, caravans, et cetera. Of

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course you also have the question of ventilation. When I was involved in it, I understood that if you had a drive-through tunnel, unless you had very special methods of ventilation the ventilating tunnel would need to be about twice the diameter of the running tunnels in order to get decent, clean air in the tunnels.
Having looked, I think with a fair amount of dispassionate enthusiasm, at all the schemes for the link, these are the reasons why I came down on the side of the tunnel, as of course did the Select Committee, which went into the matter with great thoroughness. There are only two other brief, though not small, points that I should like to make. I am referring to the problems which have been dealt with very fully both in Sir Alec Cairncross's submission and in the Select Committee submission of 1980. These relate to the danger of monopoly pricing in the early days, if a tunnel or a bridge were built, to ruin the ferry service and the over-dependence we could have on one mode of crossing once the ferries disappeared completely. This needs to be looked at very carefully, but perhaps now is not the time to do it. I have been speaking for too long. The evidence given by the Dover Harbour Board and the powerful case put by Sir William Harris need to be examined carefully.
The last point I should like to make—the Select Committee dealt with this at some length—is that there is the other option which we on the Select Committee called the do-nothing option; that is, just leave things as they are and allow the ports and the ships to take this ever-growing traffic that is building up on either side of the Channel. The growth has been quite phenomenal over the last 10 to 15 years.
I should like to finish on this point by quoting from the Select Committee Report. As I said, I was a member of the committee and on this particular point I agreed wholeheartedly with it. We said at paragraph 47:
"we have no reason to question the view that existing modes could, if necessary, be expanded to a capacity sufficient to cope with all forecast increases in the demand for cross-Channel traffic. There seems to us, however, to be no reason to reject the possibility of a fixed link on these grounds alone, particularly if in so doing we, or the Government, were to prevent the introduction of alternative services which would be profitable in themselves and would offer more convenient and comfortable services to passengers and freight hauliers".
This is the view I take: that the cross-Channel link would be a boon to people on this side of the Channel and on the other side of the Channel and that the most likely way to get something done would be to go for a tunnel.
8.9 p.m.
Lord Gladwyn: My Lords, I intervene just for a moment in this discussion. I feel I shall not be able to remain until the end of the debate, for personal reasons; I apologise. The noble Earl, Lord Bessborough, said that I was, in association with that great Frenchman and great European, the late M. Jules Moch, one of the promoters, as far back as 1962, of a scheme for a bridge-tunnel-bridge on the broad lines of that already existing in Chesapeake Bay. It was then the intention to construct cantilever bridges with comparatively short spans leading gradually down to two artificial islands in the Channel between which immersed tubes would carry both the
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road and the rail traffic involved. That was the general idea.
I still believe that this would, in theory, be a very good solution and a practicable one. But it failed to obtain approval nearly a quarter of a century ago—and I expect that a similar effort may well fail to obtain approval now—owing to the violent opposition of the shipping interests who maintained that the six or seven mile wide unimpeded channel between the two islands would not be sufficient for all the shipping traffic, and that in any case ships proceeding on either side of the channel would risk collision with the inevitably rather numerous piers. It may also be remembered by some that eventually General de Gaulle himself informed the unfortunate M. Moch that after profound study he himself was, as he said, "plutôt tunneliste"! That finished it.
So there may well only remain the alternative of first, a double rail tunnel which could handle most of the goods and passenger traffic and also provide for a shuttle service for cars and lorries; and, secondly, a bridge capable of handling all road traffic with, in addition, a broad single tunnel for railway passengers' use running below it or beside it. The first solution—that is, the tunnel—seems, if I read its report rightly, to be that favoured in principle by the United Kingdom-French study group in 1981, which however did not rule out the possibility of a bridge for all road traffic, provided that some pretty stringent provisions were met. But as the group also indicated, there is much to be said for a tunnel solution, provided always that it can be shown to be profitable—that is an important consideration—even though its disadvantage clearly would be that it would not permit the free flow of all traffic which other solutions provide. So we come down to the bridge plus an accompanying tunnel which is probably more likely to be financially viable in the sense of being sufficiently profitable to attract the necessary private capital, even granted the huge estimated total cost of nearly £5,000 million.
I am told that great progress has been made recently—and certainly since 1962—in protecting the piers against possible collision, even with giant supertankers; in contemplating spans of something like five kilometres, which of course—as I think someone has already said—is more than double the present record for suspension bridges; in strengthening all the materials to be used; and in protection against even the most powerful winds. I understand that research has more or less demonstrated that all these difficulties can be successfully overcome, and provided this really is so then it only remains to accept the forecast that the whole project will pay for itself in five to seven years for a decision to be taken to go ahead and thus to achieve the undoubtedly enormous political and eventually economic benefits resulting from a physical link between these islands and the rest of Western Europe. I consequently very much hope that the project will eventually be given the go-ahead in the comparatively near future.
Only two lingering doubts remain in my mind. In the first place, can suspension bridges with spans of five kilometres—although they dispose of the objections of the shipping interests—really be thought to be absolutely stable and proof against the possible collapse of any one of them? If so, all is well but we

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must take it that all the engineers and construction companies involved have absolutely no doubt that such expectation is justified.
And then there is, after all, in this wicked world still the danger of sabotage. For if once constructed the bridge was partially destroyed, repairs would presumably take a very long time and all during such a period the United Kingdom—save or course, in the air—would be virtually cut off from the mainland, seeing that other facilities for tranferring goods and passengers across the Channel could have, in the nature of things, by that time, almost totally disappeared. I do not say that this is an insuperabale objection; but much thought will have to be devoted to the problem of how to meet it before approval is given for the construction to begin.
In sum, and speaking as a completely non-expert, I can only express my hope that the remaining difficulties in the way of the establishment, at any rate, of some fixed link will shortly be overcome. If one takes the view that our future depends on the successful development of a new form of Western European Union, capable of being a real "partner" for America in a well-functioning Atlantic alliance, there is no doubt that a fixed link of some kind would greatly contribute towards this admirable and very desirable end.
8.16 p.m.
The Earl of Limerick: My Lords, my noble friend Lord Bessborough has initiated a very timely discussion which might usefully have the effect of eliciting whether the political will is really emerging on both sides of the Channel to enable real work to start on a Channel crossing.
I have long been interested in the topic both in a general way and specifically—an interest which I declare—on behalf of a bank which has worked with contractors to make proposals for the twin-bore rail tunnel scheme. The tunnelling groups, as they are known, have now merged their interests. Like my noble friend Lord Bessborough I firmly believe that a fixed Channel link is both politically and economically desirable. Studies have shown that at least one of the proposals can also be economically viable. The question is: will political conditions be defined such as to make it possible?
I should like in this brief intervention to focus attention on some of the practical issues which will I believe determine whether this great concept can actually get off—or in a certain case perhaps get into—the ground. What is needed to enable contractual commitments finally to be given? The first requirement is that the role of the two sponsoring governments shall be defined as to the risks which they assume. This will require a protocol to be defined in fairly precise terms.
Specifically, we should look to the Anglo-French working group to do two things even if it does not come down firmly in favour of one proposal or another. The first requirement is to propose a negotiating mandate sufficiently firm to enable the rival consortia to commit real resources to researching and presenting firm proposals.
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The second requirement from the working group is that it shall define for acceptance by the two governments the minimum political conditions for the commitment of private equity investment funds to the project, this being a condition of both the sponsor governments. I stress the word "equity" because unless and until such assurances are given in adequately defined terms, it follows that any funds put up—whether described as loans or by any other label—will lack the necessary backing to rank otherwise than as equity.
The second practical point is that a joint Anglo-French owning company will have to be set up. That will require its own regime which will be complex and will need to be precise. Consequently, it will need quite a time to establish. The third issue is the role of the EEC, and that likewise will require definition and will need the commitment of funds to back it. The EEC could be the ultimate guarantor for the debt, or perhaps a co-guarantor with the two sponsoring governments.
I should now like to mention one or two fundamental structural problems. The main structural difficulty with this particular project is that in the real sense it has no customer. If the two sponsoring governments were prepared to play a more active role, then they or their appointed agents could be the customer. However, they have consistently insisted upon it being a private sector project. and this means that the customer would have to be synthesised out of a group of interested parties—that is, initially the banks and the construction companies—with other investors being brought in subsequently. This is far from satisfactory, because all these parties have vested interests in the business opportunities arising from the project rather than in the commercial viability of the project itself.
Such an arrangement, therefore, is liable to give rise to severe conflicts of interest, and I believe that in consequence it is this fundamental difficulty which has given rise to the position that we have seen unfolding over the years. There has been a tendency for everyone concerned to pass the buck to someone else. The British have tended to criticise the French for their hesitancy; the French have tended to criticise the British for having aborted the last scheme; the British Government criticise the private sector for being unwilling to take a commercial risk; while the project promoters criticise the Government for failing to see that the Channel link is a classic mixed economy project. The Department of Transport reacts by passing the buck to a series of advisers, calling for reports and more study groups. So much for the structural difficulties.
I should like to dwell for a moment on one or two subjective or personal points. Considering the relative attractions or merits of a bridge or a tunnel, or something which is a hybrid, I can think of few things more delightful than to be driving across the Channel on a tine day with views of the two shores and a general feeling that it is nice to arrive at one's destination in such an agreeable manner. But we know—we have recently been reminded of it daily—that our climate is not always like that. Try to imagine how it would be driving across a bridge in thick fog or in a high wind. I would not find that a very nice experience. On the

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other hand, if we were to suffer the constant closing of a bridge or part-bridge link because the conditions were deemed too adverse, naturally we would also find that a very frustrating experience.
My noble friend Lord Bessborough referred to the Mont Blanc tunnel and the fact that that was not free of problems. Imagine a tunnel one, two or three times as long, and what would happen if there were a breakdown, if a car simply ran out of petrol at the wrong time, or if there were a spillage of a load from a large truck in the middle of the tunnel. Again, that is not a nice thought. and it must make one pause in considering the practicability of a drive-through tunnel. Such considerations, of course, are different for a rail tunnel.
Then there are politically sensitive questions. The effect on long-term employment in ports and ferries has to be set against the undoubted short-term employment benefits during the construction period, whatever scheme is used. There is the sensitive point of the nature of control of the approaches to the crossing (the bridge, the tunnel or the 50/50 arrangement) and the operation of those facilities—a contemplation of conditions in which they might be obstructed.
To conclude, I think that the time for decision on this project, so long delayed, is now fast approaching. A Channel fixed link is within the scope of current engineering technology. Given the political will and impetus, a rail tunnel at least—and I confess my not totally uninformed prejudice on the economics of that proposal—is a viable proposition. It is politically desirable; it is economically desirable. Perhaps we may hope that the response from my noble friend Lord Brabazon of Tara on the Front Bench this evening will bring it a distinct step closer.
8.25 p.m.
Viscount Sidmouth: My Lords, it is timely that we should be debating this Unstarred Question put down by the noble Earl, Lord Bessborough, a colleague on Sub-Committee F of the Select Committee of your Lordships' House on the European Communities. The chairman of that sub-committee, the noble Viscount, Lord Torrington, has, with regret, been prevented from putting his name down to speak. That is all the more regrettable since his great-great-uncle, the then Lord Torrington, actually went out to sea, in the tunnel then being built under the Channel, with the chairman of the South Eastern Railway on 7th September 1884. I cannot, of course, speak for him, but I believe he is sorry that it has not yet reached the other side. Even at that time the idea had been around for 50 years; but in all that period the factors involved—political, financial and technical—have never been so favourable at one and the same time. So there is a feeling that it is now or never, both here and among our partners on the other side of the Channel.
It is my purpose to touch on two aspects out of several which lead me to believe that the answer should be to proceed as soon as possible. The first concerns rail transport, which, for technical reasons, has an indispensable role to play in any scheme involving a tunnel. This is because electric traction generates no fumes, and the trains themselves provide the air changes which are required for ventilation. But
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in addition to that there are sound reasons for affirming that rail is the transport mode best suited to take advantage of a fixed link. This is a route which will carry a considerable proportion of our export-import traffic with the other countries in the European Community, which already amounts to 50 per cent. of our total, increasing by 4 per cent. per annum. Such traffic is mostly long haul and over distances for which rail is the most economical mode of transport. This is because it tends to have higher terminal costs than road but is much cheaper for the actual movement.
Most of us tend to think of transport in terms of passengers, mainly because we encounter it most often in that capacity. There will certainly be important gains from a fixed link in terms of passenger services and transit times, but I believe that the improvement in the movement of freight will be equally impressive. To a degree this arises from a natural difference in the two types of traffic. Passengers have legs, and, with suitable signposting, they can transfer themselves between plane and plane or from one mode of transport to another. Moreover, they carry their essential documentation with them. A similar operation with freight involves complex transfer facilities which always add to the cost and lead to delays. The present situation on the Channel, for all the best efforts of the sea ferries, is an acute example of this. Apart from the costly alternative of air transport, the demand is met largely at present by roll-on roll-off road vehicles with a transfer at each end to and from sea transport.
Largely for this reason the present British Rail share of our export-import traffic is 2 per cent. In 1976—the latest date for which I have been able to obtain figures—this compared with 65·2 per cent. and 62·8 per cent. respectively for the Dutch and Italian railways, while the German railways' share was 22·3 per cent. and the French was 20·9 per cent. I submit that these comparisons confirm that a fixed link would provide British Rail with the opportunity to win new train and wagon-load traffic strictly on competitive lines without taking into account the environmental and other factors which make that a desirable result in itself.
I am aware that two of the three schemes for a fixed link currently being canvassed provide for a direct link by road as well. That would undoubtedly be an advantage worth having, bearing in mind the door-to-door facility so efficiently provided by road transport. But both schemes would be enormously costly, and I believe—and we have heard this confirmed tonight—that they face technical problems to which the answers have yet to be researched.
By comparison, the problems posed by the scheme for a twin seven-metre tunnel were mostly researched in the 1960s, before the 1973–74 scheme was agreed, and have recently been re-assessed and found satisfactory by the Anglo-French study group. I merely make the point that the scheme put forward by the Channel Tunnel group for rail tunnels does not rule it out from being practical and desirable, while also providing, in competition with the sea ferries, a fast and reliable crossing for road vehicles.
My second point is that the Channel fixed link is an important factor in the whole context of the European

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Community. No doubt there are those to whom that is a point against the scheme, but, after all, we are members of the Community and it is the declared aim of our Government to improve our relations with it. For their part, both the Commission and the European Parliament have indicated their interest in and support for the scheme, recognising it as a missing link in the pattern of European transport.
It is not generally realised that the Treaty of Rome identified transport as a suitable subject for a common policy in the same way as agriculture, and Article 74 and following articles spell out the need for such a policy to be developed. For historical reasons the continental railway systems of the European Community have a good record of collaboration in matters such as timetabling, compatibility of rolling stock, through booking and loading gauges. In recent years similar progress has been made with road vehicles. For obvious reasons British Rail has so far been rather isolated, but already a useful pool of rolling stock exists which is suitable for through train working and there should be no difficulty in building this up while the fixed link itself is being constructed.
It is difficult to quantify the effect on men's minds of a physical separation such as that presented by the Channel, but the common connotations of the word "insular" will illustrate that it is great. It is no light matter, therefore, that with a fixed link it will be possible to go down to Waterloo and buy a day return ticket to Paris. After all these years, that is still only an idea, but I believe it is an idea whose time has at last come.
8.35 p.m.
Lord Harris of Greenwich: My Lords, like others who have spoken. I very much welcome the fact that the noble Earl, Lord Bessborough, has put this Question down this evening. The noble Earl has made a notable contribution to the European cause and, that being so, it is particularly appropriate that he has initiated this debate tonight.
This issue of some form of Channel link has been debated in this country and in France for well over a century and a half. That is a fair amount of time, even by our own not particularly exacting standards. At last there appears to be a serious prospect that some form of link will be constructed. I do not propose to get involved in the discussion about which of the alternative projects is best. Speaking entirely for myself, and, I suspect, for others, what most of us are keenest about is that from some form of link, should be agreed between the British and French Governments and proceeded with as speedily as possible.
Having said that, on the basis of the evidence I have seen, I lean, rather like the noble Lord, Lord Carmichael, and the noble Earl. Lord Limerick, marginally in favour of the Channel tunnel, but it is, as I have said, only a marginal preference. I should make that clear at the outset.
There are three powerful arguments which justify urgent action by the Government. First, like the noble Viscount. Lord Sidmouth, I cannot believe that it is sensible for this country, which sends over 50 per cent. of its exports to other countries in the European
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Economic Community, to rely any longer exclusively on sea and air links with the Continent. I dislike intensely the degree of monopoly power exercised by the owners of the sea ferry routes. The Channel tunnel, or one of the other alternatives to it, would introduce a welcome element of competition. For that reason alone, I believe it deserves our support.
Secondly, the Channel tunnel—I take that again simply as an example—would undoubtedly be a great deal more efficient. It would take a mere 25 minutes to get commercial vehicles and private motorists across the Channel, compared with the endless delays which are sometimes experienced, particularly at the height of the summer holiday season.
Thirdly, and by no means least importantly, a Channel link would generate a great deal of employment not only in Kent but in many of the key sectors of British industry elsewhere which have been so grievously affected by the economic recession. I do not think we can any longer afford to stand idly by and watch our manufacturing base in this country continue to wither away. This massive project would by itself make a major contribution to the improvement of employment prospects in this country.
However, I should enter one qualification. It is the only point which I propose to put to the noble Lord who is winding up for the Government this evening. The Government have said—I do not propose to open a debate about whether what they have said is sensible—that this scheme has to be financed exclusively by private capital. We accept that as a decision. but one or two questions arise in relation to any form of Government guarantee which I suspect will be demanded by those responsible for whichever project is finally selected by the British and French Governments. For instance, those who are trying to raise private capital of the order of £5 billion will want some form of guarantee as to what will happen if either the British or the French Government have a change of heart at some time subsequent to the moment at which they have to devote substantial resources to this project. In such circumstances, what form of guarantee will the Government be prepared to give?
Secondly, this group will ask for some degree of comfort from the Government that there will not be unreasonable interventionist policy on the pricing. Again, these are matters of central importance to this project. If we want to proceed—I am quite sure that the Government do now want to proceed—some clear guarantee will have to be given to those who have the responsibility for raising these substantial sums of money.
Lastly, I think there is an even more powerful argument than any I have so far adduced in favour of proceeding with this project. It now appears that at last the issue of whether Britain should remain a member of the European Economic Community has been settled. At the next election there will be no political party claiming that, if elected, it will take Britain out. For that at least we should be thankful. I believe our country has paid a high price for the debilitating quarrel over the last 20 years about whether or not we should remain a member of the European Community. Politicians of different political

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persuasions have, with wearisome regularity, played, or attempted to play, the nationalistic card at general elections. Sometimes there have been suggestions that there should be yet more negotiations or re-negotiatons or re-re-negotiations about our terms of entry. At other times, there has been competitive mud-slinging directed at our Community partners, combined with shrill claims that one group of politicians rather than another can be relied upon rigorously to defend British national interests. This, I believe, has been deeply damaging to the position of Britain within the Community. It has also, I believe, made its contribution to weakening the capacity of the Community to respond sensibly to the serious economic problems caused by the recent economic recession.
The immense value of this project is not only that it can be of considerable economic benefit to this country but that it can also be seen as of the greatest value to France and our other partners in the Community. If it is vigorously supported by the Government, it could, I believe, symbolise in the most direct fashion our country's desire to make a fresh beginning in its relations with the rest of the Community. I hope that the Government will recognise this opportunity and give it their uninhibited support.
8.42 p.m.
Lord Molson: My Lords, I am sorry to strike a somewhat discordant note in a debate which has expressed general sympathy (with which I, certainly emotionally, sympathise) about a fixed link with the Continent of Europe. During the more than a century long debate about the Channel tunnel or bridge, the discussion has been concerned almost exclusively with strategic, geological, commercial and financial arguments for and against it. I want to put an argument against the fixed link which would not have been substantial a century ago, and indeed it would not have been raised. I believe the point to be so serious now as to be almost conclusive against the whole project. The reality is the threat of terrorism.
I need spend no time drawing attention to the widening practice of violence and terrorist activities and the increased destructive power of modern bombs. Knowledge of how to make or how to obtain nuclear bombs has not yet reached the terrorist world, but I fear that it will do so in time. While terrorism a century ago was confined to extreme nationalist movements such as the Fenians in Britain and the Macedonians in Turkey, there is now hardly a country in the world which has not been the scene of acts of terrorism. In many cases, those responsible—or sometimes others who were not responsible—have telephoned to the media claiming proudly to have been guilty of these crimes. In other cases, the motive is quite unknown, as in the recent case of a bomb which exploded in an Italian railway train travelling through a tunnel north of Florence. That is an example of what could be done in a Channel tunnel or on a bridge of any size or design.
There is now also an increasing willingness to make victims of innocent people in no way responsible for any alleged political grievance. Most, if not all, of the 19th century terrorists killed rulers or statesmen or
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other persons whom they alleged to be responsible for some kind of oppression or to be their political opponents. Now the terrorists strike quite indiscriminately—against the passengers in a train, as have referred to, in Italy; going to ski in the Alps; or the crowd waiting in Bologna Station to take a train. A Channel tunnel or bridge would be an obvious target for such people.
My Lords, nor is that all. We are now familiar with hoaxes. Exactly what is their purpose, nobody knows; but they occur. Perhaps some irresponsible people think it funny to telephone a threat to dislocate traffic and cause widespread alarm. They telephone that a bomb has been concealed in some vehicle, with a time fuse which will detonate it. No such warning could be disregarded. Consider the complete dislocation and delay while traffic through the Channel tunnel was held up by any hoax telephone call of that kind by a malicious or irresponsible individual. The profitability of any Channel tunnel must depend upon its giving a reliable service not liable to sudden interruptions. That cannot be guaranteed in these days of irresponsible terrorism.
There is no certain method of combating terrorism. The best way of reducing its efficacy is by dispersal in all its forms. In transport, dispersal can best be achieved by numerous alternative routes—aeroplanes, ships and trains. The certain way to facilitate terrorism and increase its effect would be to concentrate traffic on a single route and, above all, in a tunnel. Terrorism, unfortunately, is not a passing phenomenon nor a transient fashion. It is, I fear, endemic, widening its range and its scope. We shall provide it with a simple target if we build a fixed Channel crossing, and, my Lords, we shall do so at our peril.
8.48 p.m.
Lord Ardwick: My Lords, I must thank the noble Earl for initiating this debate. He and I shared many voyages across the Channel together when we were members of the European Parliament and he knows well that I share his hope that a fixed link in the near future will be accomplished. I must also express my pleasure that my noble friend has expressed himself warmly in favour of a tunnel or some fixed link. Too rarely from this side of the House do we hear anything warm about any European project.
The noble Lord, Lord Molson has made a most important point. I am sure that all of us taking part in this debate have thought of the risk of a terrorist blowing up a Channel tunnel or a Channel bridge either for some political motive or just for the hell of it. The Channel tunnel is a subject that we have all been debating, I should think, since we were in the fourth form; and the people who were against the tunnel in those days used to argue that one night we might find somebody like Napoleon Bonaparte popping up at the Dover end of the tunnel with the Grande Armée behind him. The one schoolboy answer to that was that some English Horatius would guard the exit just as the Romans held the bridge over the Tiber. But that risk of an invasion via the Channel tunnel could be taken fairly lightly because it was never a real risk. But the terrorist threat of today, as the noble Lord, Lord Molson, has said, is a real one. However, I cannot think that it has been entirely

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overlooked by those people who are willing to put so much skill and so many millions of pounds into the building of a bridge or tunnel. Surely they must have considered the risk and decided that there could be effective safeguards against it.
I have been a supporter of a channel link all my life. I have always wanted Britain to be joined or rejoined to the Continent. This, I felt, would be a liberation from our insular fastness. It would not be simply a question of linking Dover with Calais but of Britain with the entire continent. I remember, the first time I crossed the Channel, thinking that there was no barrier to me on the road that led through Omsk and Tomsk to Vladivostok. That was of course a sentimental reason, and it was—and is—a very strong one. The other day I went to the Anglo-Saxon exhibition in the British Museum and learned of the frequent crossings of the Channel in the 10th century which enabled the Anglo-Saxon architects, craftsmen and artists to learn from and to influence their Christian brothers across the Channel.
We have always been a part of Europe, but a handicapped part—handicapped by high winds and low lying fogs. I want to make it as easy and as cheap to go to Brussels and Paris and beyond as it is to go to Manchester and Edinburgh: and so I support any scheme that will bring that about. But of course it is not only a matter of sentiment: it is also a matter of commerce. Our trade with Europe is great and is growing, and neither air freight nor the seaborne container—remarkably efficient though they are—are anything like so efficient as a direct link, whether it be a tunnel under the sea or a bridge over the sea.
To come back to sentiment, I recall that ten or a dozen years ago a party from this House went, as did my noble friend, to explore the mile or so of tunnel built on this side of the Channel, and then we flew over to France to see their end of the tunnel. Then we sat down over luncheon with the English and French engineers and we toasted the day when they would meet and shake hands in the tunnel, as they broke the last barrier between England and France.
But it was not to be. For Mr. Crosland—and I was very grateful for the explanation that we have had tonight from my noble friend—it was not simply "a touch of the Lawsons", a premature "touch of the Nigels" as it were: there were other reasons. I remember that at the time there was a lot of opposition among Members in the north of England against all that money being spent in the south. There was objection from all the MPs in the ports in the south of England and on the east coast. Then there were the environmentalists in the south of England, who feared that the south would be made ugly and industrial.
But today the project is alive again and I fervently hope that one of the three schemes will win approval. Perhaps the Eurobridge project, with its accompanying tunnel, will be built, and built in my lifetime, and I shall be able to drive or be driven over the suspension bridge through the oblate, ellipsoid tube and past the six towers that will soar, each of them over 250 feet high—they will be half as high as Blackpool Tower—and be able to travel to the Continent.
8.54 p.m.
Viscount Massereene and Ferrard: My Lords. I cannot quite agree with the noble Lord who has just sat down. Of course he is entitled to his own opinion, but he said that he would have liked Britain to have been joined to Europe for hundreds and hundreds of years: that is what he said in so many words. But I am quite sure that our insularity, though now out of date, gave us in those centuries our character and our determination to form the greatest empire in the world.
Those days are over now and as regards trade we had no need then to have a fixed link. In any case, that would have been quite impossible because we did not have the know-how. Today it is quite different. We have the know-how; we are an offshore island and we do not want to be an offshore island any longer. That is the reason for my great interest in the fixed link.
I must declare an interest here—I think I am the only speaker so far who has declared an interest. Over the past four or five years I have been associated with the Eurobridge Group studies, and we have in that period done an immense amount of research on a bridge, from every angle. I do not wish to decry a tunnel. All I would say is that a tunnel would be quite incapable of handling the load of traffic that we now have in Europe and the EEC. We have heard from my noble friend Lord Bessborough, that 80 per cent. of all traffic on the Continent goes by road. If we had a twin tunnel, I understand that such a tunnel would not be able to handle more than one-fifth of that traffic.
There is also another point concerning a tunnel, which is that you have to load and offload, and therefore you would not get such a fast and free flow of traffic as with a bridge. I am not decrying a tunnel, but I am saying that the two should be complementary. I personally think that the bridge is by far the most important because, knowing the history of the railways over the past few years, they never make a profit and therefore I doubt whether the tunnel under the Channel would make a profit for British Rail. I imagine that the structuring of the tolls on the bridge would have to cover any loss made by the rail tunnel, but in this Channel fixed link there will obviously have to be a vast consortium, and the tunnel and the bridge presumably would come under more or less the same control.
I have taken down quite a few notes from what noble Lords have said, although I do not want to detain the House for long. From the point of view of trade, I am also interested in the question of tourists. We now have a vast number of tourists coming to this country but the bridge would bring an even greater number. The majority of tourists come either by bus or in their own cars. Obviously cars or buses cannot drive through a tunnel, but they can drive through a tube which is above the sea because ventilation is extremely easy in a tube above the sea. One could not have people driving vehicles through a tunnel under the sea because they would all be poisoned, for such a tunnel would be impossible to ventilate. This would not be the case with a train because the train's coaches could presumably have their own ventilation and their own oxygen supply.

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My noble friend Lord Bessborough gave a short resumé of the type of bridge envisaged. I do not want to repeat what he said. I have sitting beside me an extremely distinguished civil engineer, my noble friend Lord Layton, who will presumably go deeply into that aspect. I do not intend to venture into places where angels fear to tread—I have done that perhaps once or twice in my life but I do not embark on that any more.
My noble friend Lord Molson brought up the question of terrorism. This can apply to anything. One cannot hold up all progress because of terrorism. One has to go ahead. There are obviously risks; but around the towers one could use this wonderful new material called Parafil, which is made by ICI-Dupont. One could have extremely strong nets made of that material, which would presumably stop any underwater sabotage. One would have to have some surface protection for the bridge which presumably would be provided by the Navies of both France and Britain.
I am a firm supporter of the bridge. We have never asked the Government for any money; we do not want Government money. Before the bridge can be started we shall have to have another two years of various deliberations by experts, but we have already done a great amount of that. Some people are very scared about the question of navigation. We have gone into that thoroughly, and of course the towers will act as extremely up-to-date lighthouses. They will have every modern form of electronic warning devices for ships. I think that the bridge will help navigation in the Channel. I know a little about navigation because at one time I took a course in that as a yachtsman.
I am quite sure that the bridge will not mar the seascape and landscape but will, with the modem technology we now have, be a thing of beauty. One should not compare the Forth Bridge—which was built in 1880 and was a marvellous achievement of that age but completely mars the landscape—with a Channel bridge, which I am perfectly sure will one day come to be built, because that would be like comparing a dinosaur with something elegant like a gazelle.
I support the Eurobridge to a great extent, but I do not decry the tunnel as something complementary to it. Here the question of employment is extremely important. I think that this point has already been mentioned; however, I should like to say that the attraction of employment by private capital is that it does not increase inflation, but employment by public expenditure does so. The employment figure would be about 80,000. The people—some of whom would be bound to be French—would be employed for a considerable number of years. One would also have all the ancillaries. I do not know how much employment that will amount to, but it will certainly amount to a lot. That must be borne in mind.
I do not know what my noble friend on the Front Bench will say, but I hope that it will be encouraging. My noble friend Lord Bessborough spoke on how far the Government have progressed with the French side. I have said enough, but I should like to see this bridge come into existence. I do not expect that I shall see it. I suppose that the preliminary work will take two years and that it will take another five or six years to build
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the bridge. I should like to see this bridge with the flags of all the EEC nations fluttering on it. It will be a great achievement, rather like the Suez Canal. I am absolutely sure that this project is something that will come to pass.
9.8 p.m.
Lord Ezra: My Lords, virtually all noble Lords who have spoken in this important debate, so effectively initiated by the noble Earl, Lord Bessborough, have judged that the time is right for a fixed link to be constructed across the Channel. There is no doubt that the need is there. There is no doubt that the technical capability is there. There is no doubt that the resources to construct such a fixed link could be made available, both in human and material terms.
What has so far inhibited progress has been the uncertain attitude of government. It now appears that both the British and French governments have concluded in principle that such a link would be desirable. I personally had the opportunity recently, at a meeting of the Franco-British Council in Avignon, of hearing both Prime Ministers speak to that effect. What is now necessary is to know the basis on which the two governments consider that work should proceed. It is satisfactory to know that the joint working party has got down to its task, and we have been assured that they will be reporting by the end of February.
However, I should like to draw attention to and underline some of the points raised by the noble Earl, Lord Limerick, and the noble Lord, Lord Harris. I feel that, if the Government are adamant, as the press notice of 10th January makes clear, that they will not support this project from public funds or provide any guarantee of a commercial nature for the construction of this link, then the other terms of their undertakings should be very clearly stated.
These conditions must surely be such as to enable projects validly to be put forward and the political assurances would have to be extremely precise in view of past experience. There is also a form of words in the press notice which does disturb me slightly. It is that, apparently, the guidelines are to include any constraints affecting commercial exploitation. I am not quite sure what those words mean and perhaps the noble Lord, Lord Brabazon, can enlighten us. But, if the Government are on the one hand not to provide any financial commitment, and on the other hand are to impose certain constraints on commercial operation, it is difficult to see how this project can get off the ground. So it is very important that these points are fully clarified in the document that will finally be published.
As to the sort of scheme that should be undertaken, there has been much discussion and noble Lords have expressed their various preferences. My own opinion is that three very imaginative schemes have been put forward and a great deal of valuable work has already been done. We are now presented effectively with a project for the twin rail tunnel, the Euro-bridge, and the Euro-route. So far as I am concerned, like other noble Lords who have participated in this debate, I have spent some time briefing myself. I have met with representatives of the tunnel group and have received

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briefs from those who have put forward ideas on the Euro-bridge and the Euro-route.
I personally veer towards the tunnel concept because a great deal of work has already been done on that. I believe it is a project which can probably be completed sooner than the others, with less capital expenditure. If a road link were later to be required, that could be constructed subsequently. It is indeed noticeable that in the case of both the Euro-bridge and the Euro-route schemes, they envisage the accompaniment of a rail tunnel. That seems to be the common element among these three schemes.
The noble Lord, Lord Molson, with his customary eloquence, has drawn our attention to the risk of terrorism. Indeed, that is a very serious point. However, as the noble Lord, Lord Ardwick, commented, surely those who have prepared these projects have taken that aspect fully into account. I do not believe that the ever-present and possibly growing risk of terrorism in the world should put us off going ahead with important and major projects of this sort. We must defeat terrorism and one way is to say that we are going ahead with technological development in spite of all the risks that the terrorists would like to put in our way.
Therefore, I conclude by saying that I think this has been a memorable and timely debate. I very much hope that the noble Lord, Lord Brabazon, in replying, will make it clear to us that there is no longer any ambivalance on the part of the Government as to the principle of a link and that, in drawing up the criteria, the two governments will ensure that they are of such a nature that valid proposals can be put forward.
9.15 p.m.
Earl Attlee: My Lords, I feel rather guilty, having heard what my noble friend Lord Ezra said about noble Lords doing their homework; and certainly hearing that the noble Lord, Lord Carmichael, had studied the papers, and so on. I have to admit that the only briefing I have had is one I received from British Rail which was sent to me because I am an ex-employee. My experience over a period of years is on Monday mornings, after the general manager's conference at Waterloo, spending hours discussing the Channel tunnel and the rail links between Waterloo and the entrance to the tunnel. For a long time it was very real to me and I was sure it was going ahead. I would even say that it was. It was, therefore, a shock when I found out that I did not know what I was talking about—that is not unusual!
I should like to take up one or two aspects. The noble Lord, Lord Molson, referred to terrorism and noble Lords have rightly said that we cannot give in to terrorism. My own view is that if terrorists want to blow up things they can blow up any number of tunnels in this country. They could blow up the Mont Blanc tunnel. It has not stopped us in the past. We cannot give in to terrorism, ever.
What worries me far more, and is not connected with terrorism, is that when we have the bridge or the tunnel there will no longer be any cross-Channel ferries. During the recent exercise "Lionheart"—which I should have attended but could not as I was
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ill—we relied on the cross-Channel ferries to transport troops, armour and supplies. If we do not have these cross-Channel ferries because they will no longer be required, how in times of emergency are we to get these items across? I suppose we could take over the bridge or the tunnel but commercially that does not sound a very good idea. That would worry me, unless we put the ferries in mothballs in case they are needed.
I am against the bridge-only concept. One noble Lord said that to build such a bridge we would be at the very extremities of our technical knowledge. I think that there are too many problems. We know that we can build a tunnel. To me the obvious answer is to have a train going right through from one end to the other carrying freight, and alongside it another which British Rail call a road-vehicle shuttle. The vehicles would be put on the shuttle and taken to a large island in the middle of the Channel. The island would have a hotel and restaurant where people could also walk around and obtain fresh air. There could also be a duty free bonanza. The place would be so huge that even if it was hit by a super-tanker it would not matter. One can imagine that driving 23 miles in a straight line in a tunnel or on a bridge one would soon get dizzy with all the posts going by and many accidents could occur. There must be a break, and if so, have one or even two islands. Those who want a bridge could have two islands. The island on the French side could have a hotel serving pommes frites and on the English island could be a hotel serving fish and chips. Everyone would then be happy.
I forget whether I said this, but if one thinks about it, there has been talk about a Channel tunnel or something like it since the end of the Napoleonic wars. That is so long ago that even the noble Lord, Lord Shinwell, probably was not born then. I really think that we should get on and do something.
9.20 p.m.
Lord Layton: My Lords, like my colleague, I, too, must declare an interest, as I have been closely concerned with the Eurobridge Study Group. It is a very active group and has included a wide range of consultants in every aspect of a Channel link. It has dealt closely with and examined thoroughly all the problems of traffic both across and up and down the Channel. I believe that it has worked very much more than most other projects so far on the problems of engineering, navigation, ecology, surveying, insurance and many other technnical factors. It has also dealt with those companies which have produced and are producing these new and, some people feel, very advanced materials and which have experience in their construction.
I think that I should also declare that, as chairman at one time of a well-known international bridge and tunnel building company, I speak with a certain amount of expertise. I must say that I am very grateful indeed to the Government for advancing, as they are today, and pushing forward with efforts to get a Channel link begun and on the road—and rail, perhaps. I feel that it is essential that a decision should be made as early as possible. I hope that this debate will help the Government to reach that decision.

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As I said, I have been closely concerned with the Eurobridge proposals. As your Lordships will see, the Eurobridge Study Group was set up to study all the problems involved. I ought perhaps to give a slightly better picture of the scheme that we are talking about, but before I do that I must say that we have examined closely all the other schemes as far as we have been able to and discussed among ourselves the possibilities of their being effectively advanced. I still feel that the answer to the double rail tunnel is given pretty well in both the report of the Anglo-French working group of 1982 and the bankers' report two years later in which it was said quite categorically that the proposal could not really be carried out without some Government guarantees, either on the repayment of loans or on the amount of traffic, and therefore, if necessary, a subsidy.
We worked on the suggested idea of the bridge, which I support, and it comes out very happily. The bridge is so profitable by all calculations that we could well afford to build the single rail tunnel, even if it only broke even. It is this project that we put forward. We can meet the requirements of the railway people by having a single tunnel, as was originally suggested by British Rail and the French railways. It is our feeling that the best way to get a rail tunnel is for us to build the bridge.
As the noble Lord, Lord Gladwyn, said, the Euro Route proposal was put forward in 1962. As a concept it is very interesting but it has enormous technical disadvantages with which I shall not bother your Lordships tonight but which I think will push it out. As was shown in the Economist, it is difficult to see how the project can be made to pay well enough to be commercially viable on private capital. I am interested, too, that they have radically changed their ideas (I think it was mentioned by one speaker) on the problem of a rail tunnel of sunken tubes, which was part of the Chesapeake Bay project. That has now changed, and they are going to a bored tunnel. So all the tunnels for rail are now of the bored variety.
I have been asked on numerous occasions about the viability of the materials of which we would make such a bridge, and the degree to which they have been tested. I think it is only fair to say that the cable material which we are proposing has been in use for over 20 years under very stringent conditions. It is now used as guy ropes for most television masts. It has been used for deep sea moorings, and it has been used to deal with all kinds of problems in the North Sea. It has not been used in a suspension bridge because it only really comes into its own as a great advantage in the case of a suspension bridge when you have the longer spans. It makes the longer spans feasible and practical, because it weighs one-sixth of the weight of the equivalent steel. Furthermore, with the type of cable structure that we use it is possible to put up the cable much faster than one can the old-fashioned steel cable. I speak as a steel man who has at one time helped build the cables for some of the steel suspension bridges. This material also has great advantages from the point of view of maintenance.
Another speaker made the point about it being easier to maintain a tunnel once you have dug the hole than possibly to maintain bridges. I think perhaps Annexe B of the Blue Book, which reported so
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unfavourably on bridges, was very much influenced by the troubles we have been having with bridges. The Severn Bridge has an appalling picture to paint in terms of suspension bridges. There are several others where the maintenance has perhaps become lax and where corrosion has had a very serious effect.
The materials we are talking about are largely corrosion-free. The cables, in particular, are corrosion-free. They have been used in marine applications, and there is no corrosion. They are neutral to all the types of gases, liquids, etc., with which they may come into contact. So we have here a very important factor. I refer not only to the cables but also to the structure of the tube in which the traffic will travel. This is also made of a material which is very largely corrosion-resistant, and therefore free of maintenance problems.
One of the great features of the technique that we are now proposing to use is that the maintenance cost of the whole structure will be very low throughout its life. We are also dealing with a new material for the deck on which the traffic runs. This material has been used in a very dense traffic area at Hangar Lane for the last 15 years, and has shown its durability, wearability and effectiveness. What is equally important is that the weight of these materials is only a fraction of the normal road material weight. This also helps us in our building of these long-span bridges.
It is getting late, my Lords. I could go on in detail about the way in which the bridge is to be built and structured, but I think from what I have said your Lordships will see that as far as the materials are concerned we should be using modern, advanced materials—materials which have already been used in many applications but not specifically in this one. We are using these materials to their best advantage and within known technology.
I come therefore to the other problems that face such a bridge. We, at an early stage, went to all the authorities on navigation because we realised the problem faced by navigation in the Channel. Obviously, as some speakers have mentioned, there will be a cutting down of the ferries crossing the Channel. The short-link ferries will, I think, disappear. I believe that that is inevitable. I am sure, however, that there will remain quite a lot of the longer route ferries such as Southampton to Cherbourg, Harwich to The Hague and places like that. I do not think therefore, that there will be a total disappearance of ferry traffic. Some people will take the ferries just for the pleasure of a sea trip. What is, however, very clear is that, as we are putting in both a bridge and a rail tunnel, there will be at least two short route crossings of the Channel. So the competitive problem, the availability problem, should be dealt with.
So far as navigation is concerned, we had talks with Trinity House, with the shipping section of the Department of Transport and with various other maritime authorities to find out the best answers that could be given. We should be clear that 50 per cent. or more of all traffic travels not down the centre of the Channel but along the coastal fringes, which means that it is as essential to keep those clear as it is to keep the centre clear. After full examination, the navigation authorities have come up with the comment really that

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they are very content with our proposals for 5,000 metre spans. We are, in fact, in discussion with them on the exact location of the six towers that will stand in the Channel in order to mark most precisely the deep channels and the shallows. As a result, we can achieve, I believe, a far better guide for ships travelling up and down the Channel as to exactly where they should be. Far from representing a danger, the bridge will, in fact, improve navigation in the Channel.
Mention has been made of protection. We also have designs to provide adequate gear to be able to stop a major tanker from hitting the bridge at any point. This will be done without damage to the tanker. We have gone into the matter in great detail.
Several questions have been raised in relation to the various schemes. It is important to recognise that our scheme is, we believe, very financially viable. I agree with several speakers who have mentioned the terms of reference of the group that it is very important to clarify the conditions under which we are to raise the cash. It is important because we shall not get adequate support if there is an unknown risk of government interference in the commercial activity of the company that builds the bridge or of their stopping the operation when it is partially carried out. So those sort of guarantees we do need. If they are there, there is no doubt whatever, in respect of the bridge and rail tunnel that Eurobridge has put forward, that the entire capital could be repaid after about seven years or, at the most, nine years. Even that, I believe, is a little on the conservative side from experience gained in various major road development projects on the Continent and also on bridges such as that over the Bosphorus, where the future long-term development of traffic expected over quite a considerable period turned up after the second year. These are the sort of figures that we have.
With the M20 and the M23 bringing down 10 or 12 lanes of traffic to the Kent area, we believe that, if those are really justified—and I believe they are—then it is quite wrong to put that traffic onto a rail ferry or to put it onto a four-lane highway. We are therefore putting 12 lanes—that is, four lanes on the two main decks and two lanes on each on the two lesser decks—within the elipse that we are putting round the whole bridge. We believe that this is the right way to do it, and of course it gives us great flexibility. It gives us tremendous defence against serious accidents on the road, because we can divert traffic onto different decks, and it is a great help in meeting the peak loads.
I have already dealt with the maintenance figure, but it is of considerable interest. It produces an important effect on the cost of running the whole operation. Another point made by one speaker—I think it was the noble Lord. Lord Gladwyn—was that there was a problem if one of the sectors of the bridge was damaged. Our design is such that should sabotage wreck one span of the bridge the remaining spans will remain intact and in place. That is part of the back-up that we have done. Somebody else mentioned the height of the towers. I would point out that they are roughly the height of the Eiffel Tower; perhaps a little higher. It gives you the scale of the bridge in terms of looks as well as in terms of the engineering required. I would add that, in dealing with towers of that nature,
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a most important factor is that we have the experience of putting very large structures into the North Sea in regard to the finding of oil and bringing it to the surface.
There are many other technical points that I could mention, and there are at least two more that I should like to deal with. One is the matter of employment, and particularly the employment problem at Dover. It has been pointed out that we shall probably create jobs for 65,000 to 70,000 with the building of the bridge. However, further studies show that the effect of bringing such a flow of traffic down into that area of the country and also through the Pas de Calais will create enormous servicing areas, back-up industries and the like which will probably double or treble that number of permanent jobs in the areas; so I believe that it will be a great adjunct to employment in the South of England as well as in the Pas de Calais.
I still think that the right answer is. "Yes, give us the bridge and we will build the tunnel". I should like to say that I hope the Government are going to see their way to push ahead very strongly and very firmly and to insist that, in studying the three projects, they ask the real technical questions necessary to ensure they get the right answer.
9.39 p.m.
Lord Brabazon of Tara: My Lords, I should like to thank my noble friend Lord Bessborough for initiating this most interesting debate this evening. As he has said, he is half English and half French, so he has a unique interest in this matter, having, so to speak. a foot on both sides of the Channel. I have listened with enormous interest to the wide range of comment and opinion expressed this evening. There is also considerable public interest in the question of a cross-Channel link. I am sure that the many and varied points of view we have heard today reflect something of that wider interest throughout the country. With the exception of my noble friend Lord Molson, all those who have spoken have been in favour of some kind of link.
My noble friend Lord Bessborough has asked Her Majesty's Government what progress has been made in discussions with the French Government regarding the construction of a Channel link. The question of a link has been raised at two recent meetings with members of the French Government. On 14th November, my right honourable friend the Secretary of State for Transport met the French Minister of Town Planning, Housing and Transport and the French State Secretary for Transport. And at the end of November my right honourable friend the Prime Minister discussed the matter with the French President at the Anglo-French summit meeting.
At the first of those meetings my right honourable friend the Secretary of State for Transport and the two French Ministers discussed the basis on which their two Governments could agree to facilitate the construction of a fixed link. The crucial question was finance. Her Majesty's Government have consistently made it clear that any scheme for a Channel link would have to be privately financed, with no support from public funds or guarantees from Government against technical or commercial risks. This principle was endorsed by both sides at the meeting on 14th

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November, and it was agreed that, if a scheme acceptable to the two Governments can be financed on this basis, then the two Governments will play their part in making a project possible, by negotiating a treaty and promoting the necessary national legislation. At the Anglo-French summit, my right honourable friend the Prime Minister and the French President welcomed and endorsed these conclusions.
In the course of these discussions, the two Governments have stated unequivocally their willingness to give a fair wind to an acceptable Channel link scheme which can be privately developed and privately financed. Both Governments recognise that some form of political undertaking will be necessary to protect promoters against the possibility that action or inaction by either or both Governments might cause the project to be aborted. This was a point which the noble Lord, Lord Harris, the noble Lord, Lord Ezra, and, I think, my noble friend Lord Layton touched upon. But the terms of the political guarantee will need careful definition. There is certainly no question of any other form of Government guarantee being given, for example, to protect a scheme against normal commercial risk, or to ensure completion of a scheme which ran into technical or financial
Lord Harris of Greenwich: My Lords, I should like to ask a question as regards the guarantees because I am sure that the noble Lord will appreciate that this is a matter of central importance. He has dealt with one aspect of the matter which I put to him, but perhaps I may remind him of the second: that is, are the Government prepared to give any type of undertaking to the promoters of whichever project they finally select, that there will not be unduly interventionist policies so far as pricing is concerned? This is a matter of great importance.
Lord Brabazon of Tara: My Lords, I am coming to that in due course. Any scheme accepted will have to be a fully private sector enterprise, and before we accept it we shall need to be convinced that it is financially robust and commercially sound.
The initiatives must come from the market. The opportunities for British industry, in partnership with French firms, are considerable. A number of private sector consortia are already putting a great deal of effort into developing possible schemes. We have heard this evening of the proposals for a twin rail tunnel with a roll-on roll-off vehicle shuttle. There are the EuroBridge proposals for a seven-span suspension bridge, of which my noble friend Lord Layton has spoken so enthusiastically. And there are the EuroRoute proposals for a combined scheme with bridges across the inshore zones and an immersed tube beneath the central shipping lanes. All these undoubtedly offer exciting possibilities for innovative design and the creative use of new materials. It is now up to prospective promoting groups, including financial institutions and potential owner/operators, as well as design and construction companies, to convince the two Governments that their schemes are both technically feasible and financially sound.
Of course, before these promoting groups can submit firm proposals, including designs, financing
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plans and operating arrangements, there is a certain amount of guidance they will require from the two Governments.
I have already mentioned the need to define precisely what political undertakings the two governments will give. Promoters will also need a clear indication of the financial and commercial framework within which a link would be constructed and operated. I believe that that is the point which the noble Lord, Lord Harris, was making, as well as the noble Lord, Lord Ezra. This, of course, will mean sorting out with the French Government such matters as the taxation regime and the application of competition law. In addition, promoters will need guidance on the governments' requirements on safety standards, on arrangements for frontier controls, and on the protection of the environment. Obviously it will be essential to ensure there is adequate opportunity for the public and any organisations with an interest to contribute their views on whatever proposals are put forward. It is only fair to let promoters know, in general terms at least, what consultation and planning procedures are envisaged.
For schemes other than bored tunnels—which do not involve structures in the Channel—there are also maritime and marine questions. The governments will want to spell out the safeguards they would require to ensure the safety of shipping and minimum disturbance to the marine environment. All of these are important questions, for which the Government have a clear responsibility. And obviously, prospective promoters will want to know where they stand on these matters, and what the governments require of them. That is why, after their meeting on 14th November, my right honourable friend the Secretary of State for Transport and the French Transport Ministers announced the setting up of an official working group, with representatives from both administrations to prepare guidance on these various aspects for prospective promoters.
At the Anglo/French Summit meeting, my right honourable friend the Prime Minister and the French President indicated that the group should complete its work within three months, that is, by the end of February. Much preparatory work has already been done and at its meeting on 10th January the group agreed the scope of the guidance to be given and made arrangements for the further joint studies necessary to define its content.
Once this guidance is available, it will be up to interested private sector groups to respond to the challenge and opportunity a fixed Channel link scheme offers. In the light of the guidance given, it is up to prospective promoting groups to develop and submit firm proposals jointly to the two governments. Whether a Channel link scheme goes ahead will depend on the ability of these groups to come forward with robust and convincing proposals to demonstrate that they have the capacity and resources to complete their scheme, and that they can meet the two governments' safety and other requirements.
It is impossible to speculate what the final outcome will be. It would be improper for the Government to back any one scheme against the others at this stage, and indeed it would be foolish to do so before the firms have submitted their proposals in response to the

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governments' guidelines. A number of noble Lords have stressed the apparent advantages of drive-through schemes, in which vehicles can be driven directly across the link without the need to use a rail shuttle service. Clearly such schemes may be an attractive proposition to many individual car drivers and road hauliers. But it is up to the promoters of these more costly drive-through schemes to demonstrate that they can attract adequate financial backing for their proposals and that the presence of bridge piers or structures in the Channel will not endanger shipping or the marine or coastal environment.
On the other hand, some noble Lords have argued that a tunnel scheme, even though it would depend on a rail shuttle to ferry vehicles across, would be simpler and safer to build, using well tried and proven technology, and avoiding any danger of interference with shipping and minimising damage to the environment. In due course each promoting group will no doubt put forward the merits and advantages of its own scheme. But neither we nor the French Government have imposed any preconditions on the form or type of link. At this stage, all options remain open.
My noble friend Lord Bessborough asked about contacts with other member states of the European Community and with the European Commission. The Government consider it essential at this stage to concentrate on discussions between the two governments directly involved, that is ourselves and the French Government. Unless and until there is an agreement in principle between our two governments on which scheme, if any, we are ready to facilitate, there is little we can usefully discuss with our other Community partners. Reflecting a very positive interest shown by the European Parliament, the Commission has in the past undertaken studies of the Community interest in the construction of a fixed link across the Channel. Most recently they commissioned from the group of French and British banks which carried out a study, published last May, of the financing of a fixed link, a supplement to their report dealing with possible Community involvement.
In response to the invitation from the council, the Commission have just put forward proposals on the broad outlines of a policy on development of Community infrastructure. I have not yet seen these proposals, and as far as I know they have not yet been translated from the French. It is in this context that a possible Community role in relation to a fixed Channel link would have to be examined. It is too early for me to say anything on this tonight, but the relevant documents will be submitted to your Lordships' Committee for consideration.
The noble Lords, Lord Harris of Greenwich and Lord Layton, particularly mentioned the employment prospects of this project. There can be no doubt that a major project on this scale would create a large number of jobs during construction. The net effect, once the link was in operation, would depend both on its nature and on the rate of traffic growth. I do not wish to comment now on any figures mentioned by the promoters of the various schemes. This is something that the Government will look at very closely, but we must see their proposals first.
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My noble friend Lord Molson mentioned terrorism. I assure him that the risks of sabotage are well in the minds of both Governments. They will not be overlooked by the Anglo-French study group in advising Ministers. I must agree with the words of Lord Ezra, particularly, that we should not give in to terrorism, but should try to go ahead with schemes like this.
The idea of a cross-Channel link has been under discussion now for close on a couple of centuries. Many ingenious plans have been devised, some of them fanciful, some of them realistic. My noble friend Lord Bessborough has already referred to the first road tunnel proposal, made in 1802.That tunnel, for horse-drawn carriages, would have been lit by oil lamps and needed an artificial island half-way across so that the horses could be changed. Perhaps this would have been somewhat similar to the island which the noble Earl, Lord Attlee. mentioned. Technology and transport have both come a long way since then.
Opposition in the 19th century was mainly on military grounds. In 1882, the South Eastern Railway Company had already constructed the first 2,000 yards of a Channel tunnel near Dover when the government of the day put a stop to the work for fear that a tunnel would encourage the French to invade. There has been a long history of doubt and hesitation. As recently as 10 years ago, another tunnel scheme, which the noble Lord. Lord Carmichael, described very well, was started and abandoned. Next time it must be a case of "I've started, so I'll finish".
The Government have made their position clear: if the private sector can come up with a scheme acceptable to the French Government and ourselves, and robust enough to ensure that it is completed, we shall play our part in making that project possible. We must take one step at a time. When we have received and assessed all the promoters' proposals, we shall have a clearer idea of what is feasible and what is financeable. Only then, in close consultation with the French Government, can we come to a final decision.

Associated British Ports (Hull Fish Docks)Bill [H.L.]
Bath City Council Bill [H.L.]
Berkshire Bill [H.L.]
British Railways (Trowse Bridge) Bill [H.L.]
Clywd County Council Bill [H.L.]
Durham City Council Bill [H.L.]
Essex Bill [H.L.]
Greater Manchester Bill [H.L.]
Greater Manchester (Light Rapid Transit System) Bill [H.L.]
King's College London Bill [H.L.]
Luton Borough Council Bill [H.L.]
Nottinghamshire County Council (Superannuation) Bill [H.L.]
Poole Borough Council Bill [H.L.]
Royal Holloway and Bedford New College Bill [H.L.]
Swansea City Council (Tawe Barrage) Bill [H.L.]
West Glamorgan Bill [H.L.]
Presented and read a first time.
House adjourned at seven minutes before ten o'clock.

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  COUNCIL OF AGRICULTURE MINISTERS: JANUARY MEETING
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